Amwa 2017 Sustainable Water Utility Management Award Application
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AMWA 2017 SUSTAINABLE WATER UTILITY MANAGEMENT AWARD APPLICATION PART I: UTILITY PROFILE 1. Does your utility provide drinking water only or combined drinking water/wastewater? Drinking Water Only 2. What are your water sources, i.e., groundwater, surface water, desalination, etc.? OCWA draws from two surface water sources – Lake Ontario, the Eastern-most Great Lake and Otisco Lake, the Eastern-most Finger Lake. Some additional water is purchased from the City of Syracuse, whose surface water source is the next Finger Lake west of Otisco - Skaneateles. The City of Syracuse operates under a Filtration Avoidance Determination (FAD), while all OCWA source lake water is filtered. 3. Characterize your climate, i.e., arid, tropic, etc. Central New York is in the northern temperate zone, humid continental climate, characterized by large seasonal temperature differences over four seasons, including cold, snowy winters and warm, humid summers. Precipitation is well distributed throughout the year, although extreme weather events have been on the rise; particularly more intense storms with strong winds year-round, and variable and aberrant winter temperatures. 4. Does your utility have watershed management responsibilities? Yes, OCWA plays a role in the protection of the Otisco Lake watershed, and in respect to Great Lakes policy for Lake Ontario. 5. Is your utility a wholesaler, retailer or combination? Combined retail and wholesale 6. Are you a stand-alone utility or part of a municipal organization? OCWA is an authority; a public benefits corporation under New York State Authorities Law. 7. What is your governance structure? OCWA is overseen by a five-member, part-time (paid) board appointed by the Chair of the County Legislature. The Authority is subject to audit by the New York State Comptroller. 8. What is your population served? OCWA serves a population of approximately 500,000 through 102,000 residential and commercial accounts in 40 municipalities, predominantly in Onondaga County, and in portions of four other Counties in Central New York. The OCWA system has substantial excess capacity. Average daily production is 38 million gallons (60 million gallons peak), of 74 million gallons of production capability. 9. What is your annual budget? OCWA’s 2017 Budget is $44,000,000 as summarized in Part III. 10. Other relevant profile information? Effective January 1, 2017, Metropolitan Water Board (MWB), the Onondaga County wholesale drinking water agency, was consolidated with OCWA, its largest customer as a means of delivering greater government efficiency and financial sustainability. This action was also taken, in part, as a pilot for other consolidations under consideration in the community. MWB’s operations were exclusively wholesale treatment, transmission and storage systems from Lake Ontario, put in service in 1967 to expand regional capacity for economic growth. MWB’s ability to maintain and invest in its water infrastructure assets was impacted by the ebb and flow (mostly ebb) of politics and County budget constraints. MWB’s water infrastructure assets have been leased to OCWA, who will operate, maintain and make future capital investment in the system. Under the Authority structure, OCWA has greater autonomy to assure proactive and consistent asset management, and thus safe, sustainable and cost-effective drinking water service to the region. All MWB employees were transferred to OCWA. The consolidated agency has 170 FTE employees and has achieved appropriate staffing through retirements, in the first six months of consolidated operation. OCWA received the AMWA Platinum Award in 2013. This 2017 application outlines the many initiatives that have been implemented as a means of continuous improvement for an innovative and sustainable water utility. 1 PART II: SUSTAINABILITY MISSION/POLICY STATEMENT SUSTAINABILITY HERITAGE OCWA has a long-standing and ongoing commitment to utility triple-bottom-line sustainability. This commitment was institutionalized during 2008 and 2009 with the implementation of the 7G Program, which established the following Mission: OCWA is dedicated to organizational and behavioral changes that will protect and preserve the environment, and reduce demand on natural resources in a sustainable and measurable way. Initiated through a year-long facilitated effort that enjoyed the full support and participation of the Board and Executive Team, and engaged expanding groups of OCWA employees. ‘7G’ was established to align with seven generation stewardship, a concept that urges the current generation of humans to live and work for the benefit of the seventh generation into the future. This philosophy of responsibility and respect originated with the Iroquois – a regional Native American Confederacy - which uses this perspective to consider whether the decisions they make today will benefit their children seven generations into the future. ‘7G’ created a utility-wide awareness that has been expanded and integrated, on an ongoing basis. Starting in 2010, MWB leadership also advanced the integration of innovative sustainability initiatives and other workplace culture changes. As a result of the recent merger, best practices from both organizations are being evaluated and deployed. STRATEGIC ALIGNMENT OCWA’s long-standing Vision has been: To be Central New York’s Water Purveyor of Choice. Since that vision has been achieved in many ways, the Board is reviewing a proposed update to this vision: Through sustainable and innovative advancements, OCWA will continue to earn community-trust, and national-recognition in the drinking water industry, for delivering the highest quality water, sustainably, securely, and at the lowest responsible cost to the ratepayers and the environment. Similarly, OCWA’s Mission is being updated by the Board. Currently the Mission states: As a Public Benefit Corporation created by the New York State Legislature, OCWA’s primary purpose is to supply water to the residents and businesses in the Central New York Region for the improvement of their health, welfare and prosperity, in a manner protective of the resource and environment. Furthermore, as the Authority has no power to tax and is financed solely by the revenues from the sale of water and related services to its customers, OCWA will operate and maintain a work environment the strives for employee excellence and encourages personal development which will ultimately result in the Authority providing good, reliable, potable water and other related services at competitive and reasonable rates. The proposed revision is: OCWA’s Mission is to protect the public health, safety and economic vitality of the Central New York region through the supply of safe, reliable cost-efficient drinking water and fire protection, in a sustainable and resilient manner that preserves and optimizes our water resources, system assets, and our environment, and with a commitment to employee respect, development and excellence. In summary, OCWA is committed to continuous improvement and industry innovation that leads to financial, environmental and social sustainability. 2 PART III: FINANCIAL MANAGEMENT OCWA 2017 BUDGET SUMMARY REVENUES: WATER REVENUES 42,868,668 MISC. REVENUES 1,071,214 INVESTMENT INCOME 88,380 TOTAL REVENUES 44,028,262 EXPENSES: LABOR & BENEFITS 19,016,480 ALL OTHER EXPENSES 13,963,983 NET OPERATING EXPENSES 32,980,463 BOND INTEREST EXPENSE 2,470,317 OTHER INTEREST 5,010 DEPRECIATION & AMORTIZATION 6,370,016 TOTAL FIXED EXPENSES 8,845,343 TOTAL EXPENSES 41,825,806 NET INCOME BEFORE CAPITAL CONTRIBUTIONS 2,202,456 + CAPITAL CONTRIBUTIONS 1,800,000 CHANGE IN NET ASSETS 4,002,456 + NON-CASH CHARGES - INCLUDES DEPRECIATION & AMORT PLUS OPEB 8,389,016 - BOND PRINCIPAL ALLOCATION AND LEASE PAYMENTS 3,192,184 CHANGE IN NET ASSETS (CASH BUDGET) 9,199,288 CAPITAL BUDGET TOTAL 11,381,226 AMOUNT OF CAPITAL BUDGET FUNDED BY RESERVES 2,181,938 ACTION LEADERS FOR FINANCIAL SUSTAINABILITY OCWA and Metropolitan Water Board (MWB) merged operations on January 1, 2017, to create efficiencies that will benefit customers and the community. This consolidation has long been contemplated and is one of the first major local agency mergers, leading the way for further consideration of similar meaningful, efficiency-driven consolidations. Prior to this historic initiative, both agencies have been proactive in their implementation of advanced technology and balanced asset management programs to replace end of life equipment with energy efficient infrastructure and optimize the life of new and aging assets, using international best practices. WATER RATE SETTING PHILOSOPHY AND PRACTICES OCWA must maintain tight control of rates to remain competitive for the economic benefit of the community and pocketbooks of residents; to allow the community to attract new industry and maintain existing, and to show sensitivity 3 to low income residents. Over the last twenty years, OCWA has grown to over 100,000 accounts, serving a population of nearly 500,000, predominantly through the acquisition of smaller municipal systems. While consolidation efficiencies will not eliminate rate increases, they will reduce them; continuing to make the region’s water competitive and affordable, in balance with necessary, planned and on-going system investment. In addition, the OCWA/MWB consolidation will contribute to energy and operational optimization, freeing funds for cash investment in future infrastructure improvements. Although always in consideration, apples-to-apples comparison of rates