Creating a SUSTAINABLE Utility Sammamish Plateau Water

Presentation Outline About US Our process SP Water’s Approach Using a cross-functional team SP Water’s Approach Our Results Our Next Steps

Sammamish Plateau Water Bellevue Sammamish Plateau Water Seattle

Sammamish Plateau Water Parts of Sammamish, Issaquah and unincorporated King County 29 square miles Population about 64,000 Median household income $147,000 Bachelor degree or higher: 72.5%

Sammamish Plateau Water Water connections: 18,000 - Water sales 1.8 billion gallons a year Sewer connections: 12,000 Replacement value: $1,017,414,000, includes assets above and below ground 2017 budget: $36,000,000

Our Mission Sammamish Plateau Water will provide safe, efficient, and reliable water and sewer services by being a leader in the planning and the practice of fiscal and environmental stewardship

We Will Be The Best in Class Utility Our Vision We Will Be The Best in Class Utility

Our process Management process alignment removed silos paired with cross-functional teams removed silos changed organizational culture and enhanced decision making

Maturation of Systems for Better Decisions Operating Plan Capital Plans GIS CMMS Budget Prior investment in technology applications and tools

Functional Classifications Water Administration Wells and Production Water Treatment Booster Stations Storage Mains and Appurtenances Meters SCADA Sewer Administration Lift Stations Mains and Appurtenances Grinder Pumps SCADA

Alignment of Processes Asset Management Plan Operating Plan Budget Capital Plan Comp Plan Asset Management Plan: Management of infrastructure to optimize operations and replacement for sustainability Operating Plan: Procedures to deploy, operate, maintain, and dispose of assets to achieve the lowest life-cycle cost Budget: Assign resources based upon asset condition and criticality, and intergenerational equity Capital Plan: Use Business Case Evaluations to justify and prioritize projects Comprehensive Plan: System-wide Infrastructure Planning Business Metrics: Ongoing measurements to ensure continuous improvement and business performance Business Metrics Jillian

SP Water’s Approach Embrace asset management - leadership and Board support required Asset management is a priority, we added new staff Deliberately create an asset management culture with training Cross functional team Start small use pilot projects Right-size the program and involve the right people Have the courage to try, then step back and redo Reach out to others – experts and practitioners Keep your program alive and evolving Use asset management to tell your story

Stewardship and Sustainability Sustainability with Asset Management (industry best practice) Reserves set aside for future infrastructure replacement Capital Replacement Reserve Formula   ASSET VALUE / USEFUL LIFE X REPLACEMENT VALUE ASSUMPTION = ANNUAL REPLACEMENT CONTRIBUTION You can keep taxes or rates low, but can you afford the long-term cost of unfunded replacement liabilities?

20-Year Capital Replacement Cash Flow Projection

Asset Management Long-term Perspective

Our Results A “working” asset management plan Infrastructure strategy Asset management culture Rates aligned with long-term goals O&M Optimization Business case for capital spending Informed elected officials Infrastructure strategy Performance expectations Satisfied customers Continual improvement Live fiscal model We can tell the story

Our Next Steps Reliability Maintenance Management Enhanced Condition Assessment Program SMART Utility Applications – “GIS Centric” Enterprise Solution for a Comprehensive Utility Asset Management and Preventative Maintenance System Had a peer review – implementing recommendations for continuous improvement

Utility Best in Class Practices Can You Answer the following questions: Do you have an asset registry? Do you know the age, condition, replacement value and expected replacement year of your assets? Does your rate model forecast out replacement needs until all assets have been replaced? Do your rates recognize and fund future replacement costs? If Not, LOOK OUT FOR THE CLIFF. Not many utility asset management programs have matured to our level Crumbling infrastructure, artificially low rates True cross functional orientation

Words of Wisdom Make it a process not a plan Involve Information Technology on the front end – They make things work Not one person can do it – It takes a team Use asset management to inform elected officials Sooner or later someone will pay for unfunded liability Not cross functional dysfunctional

Discussion