Toho Water Authority: Looking Back and Moving Forward Michael Sweeney, Ph.D. Deputy Executive Director Toho Water Authority 1

Agenda About Toho Benchmarking Challenges Communication with the Board & Staff Tying Performance to Compensation Continuous Improvement Feedback Loop Summary 2

About Toho Water Authority: A Special Independent District created by the State of Florida Governed by a 6 Member Board of Supervisors by the member governments A Utility Provider of Water, Wastewater, and Reclaimed Water Services A Utility Provider to a Service Population of approximately 250,000 An employer of 290 employees 3

Benchmarking Challenges Data Collection & Management Differentiating systems and activities Accountability to provide complete data Insufficient data Planned Maintenance Asset Inventory Communications to Boards and Staff Analysis Incentives 4

Communication with Governing Boards: Who They Are and What They (Don’t) Want Busy People Private Sector Perspective Financial Background is Predominant Limited Understanding of the Daily Routine Focus is mostly on two areas: The Customer The Money 5

They Want Effective Communications - a Balancing Act 6

Our Strategic Plan Covers Five Strategies 1. Customer Service 2. Water Supply 3. Workforce 4. Infrastructure 5. Financial Health 7

Infrastructure Reliability Our KPI Categories Roll-up to the Strategies 8 Organizational Responsiveness Regulatory Compliance Customer Service Performance Financial Performance Workforce Initiatives 73% 91% 79% 60% Key Performance Indicators – Governance View 100% 50% 8

Level of Service – 4FQ14 9 Key Performance Indicators – Governance View 79% 60% Improved response times sewer collection system failures. Infrastructure Reliability Regulatory Compliance Financial Performance Workforce Initiatives 1Q142Q143Q14 67% 75% 77%82%100% 79% 67% 60% 100% n/a Organizational Responsiveness Customer Service Performance 73% 91% 100% 50% 9

Level of Service – 4FQ14 10 Key Performance Indicators – Governance View 79% 60% Staff available for phone coverage decreased while average call volume increased. Infrastructure Reliability Regulatory Compliance Financial Performance Workforce Initiatives 1Q142Q143Q14 67% 75% 77%82%100% 79% 67% 60% 100% n/a Organizational Responsiveness Customer Service Performance 73% 91% 100% 50% 10

Level of Service: Provide reliable service to TWA Customers POTABLE WATERWASTE WATERRECLAIMED WATER QTRYRQTRYRQTRYR Provide minimum pressure (at point of service) of 40 psi during average demand Repair out-of-service fire hydrants within 14 days of notification Restoration of service Potable Service Lines – 4 hours Potable Distribution Lines and Reclaimed Service – 8 hours Sewer Service – 8 hrs Number of breaks per 100 miles (pipe) per year Potable and Reclaimed Water – 100 breaks Waste Water – 30 breaks Unaccounted for water loss 10% or less Fewer than 11 SSO’s per 100 miles (pipe) per year Reduce # of SSO’s by 1% over previous year Wet weather SSO’s Dry weather SSO’s Provide service on scheduled days Infrastructure Reliability - 4FQ14 Quarterly Report Target met/exceeded - GOODTarget not met – IMPROVEMENT REQ’D LEGEND Low Bound not met – IMPROVEMENT REQ’D Trend Improving Trending Worse WORSTBEST 73% 11

Infrastructure Reliability - 4FQ14 Quarterly Report Target met/exceeded - GOODTarget not met – IMPROVEMENT REQ’D LEGEND Low Bound not met – IMPROVEMENT REQ’D Trend Improving Trending Worse WORSTBEST Level of Service: Provide reliable service to TWA Customers POTABLE WATERWASTE WATERRECLAIMED WATER QTRYRQTRYRQTRYR Provide minimum pressure (at point of service) of 40 psi during average demand Repair out-of-service fire hydrants within 14 days of notification Restoration of service Potable Service Lines – 4 hours Potable Distribution Lines and Reclaimed Service – 8 hours Sewer Service – 8 hrs Number of breaks per 100 miles (pipe) per year Potable and Reclaimed Water – 100 breaks Waste Water – 30 breaks Unaccounted for water loss 10% or less Fewer than 11 SSO’s per 100 miles (pipe) per year Reduce # of SSO’s by 1% over previous year Wet weather SSO’s Dry weather SSO’s Provide service on scheduled days Hydrant repair averaged 22.6 days for the quarter. 73% 12

Infrastructure Reliability - 4FQ14 Quarterly Report Target met/exceeded - GOODTarget not met – IMPROVEMENT REQ’D LEGEND Low Bound not met – IMPROVEMENT REQ’D Trend Improving Trending Worse WORSTBEST Level of Service: Provide reliable service to TWA Customers POTABLE WATERWASTE WATERRECLAIMED WATER QTRYRQTRYRQTRYR Provide minimum pressure (at point of service) of 40 psi during average demand Repair out-of-service fire hydrants within 14 days of notification Restoration of service Potable Service Lines – 4 hours Potable Distribution Lines and Reclaimed Service – 8 hours Sewer Service – 8 hrs Number of breaks per 100 miles (pipe) per year Potable and Reclaimed Water – 100 breaks Waste Water – 30 breaks Unaccounted for water loss 10% or less Fewer than 11 SSO’s per 100 miles (pipe) per year Reduce # of SSO’s by 1% over previous year Wet weather SSO’s Dry weather SSO’s Provide service on scheduled days 1.5% of breaks for this quarter were associated with main distribution lines. 73% 13

Infrastructure Reliability - 4FQ14 Quarterly Report Target met/exceeded - GOODTarget not met – IMPROVEMENT REQ’D LEGEND Low Bound not met – IMPROVEMENT REQ’D Trend Improving Trending Worse WORSTBEST Level of Service: Provide reliable service to TWA Customers POTABLE WATERWASTE WATERRECLAIMED WATER QTRYRQTRYRQTRYR Provide minimum pressure (at point of service) of 40 psi during average demand Repair out-of-service fire hydrants within 14 days of notification Restoration of service Potable Service Lines – 4 hours Potable Distribution Lines and Reclaimed Service – 8 hours Sewer Service – 8 hrs Number of breaks per 100 miles (pipe) per year Potable and Reclaimed Water – 100 breaks Waste Water – 30 breaks Unaccounted for water loss 10% or less Fewer than 11 SSO’s per 100 miles (pipe) per year. Reduce # of SSO’s by 1% over previous year Wet weather SSO’s Dry weather SSO’s Provide service on scheduled days 74% of failures for the quarter occurred in the sewer lateral lines or at the cleanout 73% 14

Infrastructure Reliability - 4FQ14 Quarterly Report Target met/exceeded - GOODTarget not met – IMPROVEMENT REQ’D LEGEND Low Bound not met – IMPROVEMENT REQ’D Trend Improving Trending Worse WORSTBEST Level of Service: Provide reliable service to TWA Customers POTABLE WATERWASTE WATERRECLAIMED WATER QTRYRQTRYRQTRYR Provide minimum pressure (at point of service) of 40 psi during average demand Repair out-of-service fire hydrants within 14 days of notification Restoration of service Potable Service Lines – 4 hours Potable Distribution Lines and Reclaimed Service – 8 hours Sewer Service – 8 hrs Number of breaks per 100 miles (pipe) per year Potable and Reclaimed Water – 100 breaks Waste Water – 30 breaks Unaccounted for water loss 10% or less Fewer than 11 SSO’s per 100 miles (pipe) per year Reduce # of SSO’s by 1% over previous year Wet weather SSO’s Dry weather SSO’s Provide service on scheduled days 58% fewer SSOs in FY2014 than in FY % 15

FYTD Revenue Summary Metered Sales$18,353 Rents$152 Tap Fees$234 Other Revenues$579 Interest Earnings$95 Total Operating Revenue$19,413 (In thousands) 16

FYTD Major Expense Comparisons to Prior FY Year Expense Item FY15 Actual FY14 Actual $ Variance % Variance Personnel4, % Utilities1,557 (20)(1.3%) Other Maintenance % Professional Services % Contract Operations & Other 584 (283)(32.7%) Auto Maintenance & Fuel % Chemicals % Total9, % (In thousands) 17

Detail Data: KPI: Restoration of Service – potable service lines (4 hours) and distribution lines (8 hours) Since it is not possible to consistently differentiate between service and distribution lines an average of 8 hours is used. Description: The following information pertains to any service interruptions (line breaks, meter or valve replacements, etc.) that cause customers to experience the complete cessation of water service or water delivered at a pressure lower than 20psi. Data includes potable water work orders with LEAKING as the problem code and/or work orders with the word WATER and LEAK, BREAK, CUT, or HIT in the description and a SERVICE INTERRUPTION indicated. Data shown uses the recorded service interruption time. 18 Observations / Actions Taken: The target has been consistently achieved for the quarter. Last KPI Sample Detail

Detail Data: KPI: Restore Reclaim Service within 8 hours Description: The following information pertains to any service interruptions that cause customers to experience an interruption in reclaim service. The type of work orders included below are reclaim work orders with LEAKING as the problem code and/or work orders with the word RECLAIM and LEAK, BREAK, CUT, or HIT in the description and a SERVICE INTERRUPTION indicated. Data shown uses the recorded service interruption time. 19 Observations / Actions Taken: The target has been consistently achieved for the quarter. Last KPI Sample Detail, cont’d.

Detail Data: KPI: Fewer than 100 Potable Water breaks per year per 100 miles of pipe. Graph below is monthly data so the target shown in graph is 1/12 of the annual target (8.33 breaks per month). Description: Mirroring a quality measure included in AWWA’s QualServe Benchmarking Program, this metric normalizes the # of water distribution system breaks by the miles of distribution pipe. Specifically, this indicator accumulates the # of water system breaks in a year, divides this by the number of miles of distribution pipe and divides this result by 100. This report includes leaks and breaks from pipe or any equipment connected in the distribution system (valves, hydrants, meters, etc). 20 Observations / Actions Taken: There were 28% more breaks this quarter than last quarter. 7.8% of the breaks for this quarter were caused by contractors. Additional analysis is necessary to identify common and avoidable causes for service line leaks and breaks. Last KPI Sample Detail, cont’d.

Internal Staff Communications Monthly reports are provided and reviewed Reviewed in staff meetings Increasing used in determining gain sharing bonuses Driving training and data requests in CMMS, GIS, etc. 21

Non-Compliance letters to DFEP, EPA or other regulatory agency. Resident or business backup reports. TWA’s Root Cause Analysis (RCA) Process Incident Handling Process Non compliance letters are sent to Florida DEP for notice of outages (planned or not), incidents or excursions Use TWA’s Root Cause Analysis Process A Review will be based on a quarterly report that summarizes the incidents looking for common trends or problems. Oversight intended to recognize successful efforts AND identify areas requiring additional analysis. Continuous Improvement Feedback Loop 22

Non- Compliance letters to DFEP, EPA or other regulatory agency. Resident or business backup reports. TWA’s Root Cause Analysis (RCA) Process Generate Quarterly Summary Report for Continuous Improvement Committee (CIC) CIC Quarterly Review of Incidents CIC Identify Incidents Requiring Additional Analysis Incident Handling Process Continuing Improvement Oversight Process Feedback Loop, cont’d. 23

TWA’s Compensation “Package” 1. Merit pay increase as determined by annual performance evaluation 2. Quarterly and Annual Gainsharing 3. Skill-Based Compensation Program 4. Innovative Rewards Program 24

An Effective Performance System Based upon job analysis/employee input Focused on job competencies and behaviors Aligned with TWA’s vision and strategic (line of sight) Results of appraisal reviewed with employees and clearly documented Employees allowed to give feedback/appeal Adequately prepare and train Supervisors and Managers in use of instruments Guidance provided for poor performers Consistent across/among employees “Buy-in" is equally important to the performance management process. 25

Tying Performance to Compensation  Consistent with organizational structure and culture  Complimentary to the organization’s goals and objectives  Perceived as fair by employees  Flexible to meet changing needs  Effectively and efficiently administered 26

Summary and Lessons Learned Agree on the KPIs High level measures for the policy level More detail for the tactical/operations level Incorporate FBC metrics Avoid KPI overload – too many/too much detail Incentivize and do so fairly Use the information to continuously improve performance and accountability 27

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