Clearwater Return on Investment (ROI) Case Study

Transcription

1 Clearwater Return on Investment (ROI) Case Study Utility Branding Network Workshop December 7, 2015 Jeff Biggs, Tucson Water 1

2 Tucson Water s History Careful Planning and Investment in Water Use of Renewable Colorado River Water Supplies via CAP 2

3 Foundation The Brand & Strategic Plan Established Tucson Water Brand and Commitments Affirmed Business Values Adopted Strategic Plan 3

4 Key Components Strategic Plan Foundation: Mission and Behavioral Values 2. Business Values: Commitments to reliability, quality, efficiency, sound financial planning, etc. 3. Standards: Rules, levels of quality or achievements that are considered optimal or desirable 4. Key Policy Issues: Strategic challenges or opportunities facing the utility in the planning horizon 4

5 Strategic Plan 2020 Business Values and Standards Safe, High-Quality Water Conservative Approach to Protect Public Health Comply with the Safe Water Drinking Act Comprehensive Source and System Water Quality Info High Standards for both Potable and Recycled Water Appropriate Investment Rates Cover Full Cost of Service Appropriate CIP Funding to Ensure Reliability Explain Rationale for Investment Decisions Maintain Strong Credit Ratings Reliable Water Supplies Maintain 100-Year Assured Water Supply Designation Maximum Utilization of CAP Water Allocation Diverse Water Supply Portfolio No Systemic Groundwater Mining Exceptional Customer Service Accurate Water-Use Data and Accurate Bills 24/7 Customer and Emergency Support No Busy Signals Any Time of Day Resolve Problems with First Customer Interaction Sound Financial Management Tucson Water Financially Self Supporting Fair, Equitable, and Stable Rates Maintain AA Credit Rating and Low Cost of Debt Credit Worthy Reserves, Cash, and Debt Ratios Reliable Water Supplies Maintain 100-year Reliable Water Service Assured Water Supply Protecting the Environment Designation Uninterrupted Water Service Balance for People and the Environment, Maximum Real-Time, Comprehensive System Information Cost-Effective, Pro-Active Utilization Habitat Restoration and Enhancement System Maintenance of CAP Environmentally Water & Community Allocation Design Sensitive Facilities Appropriately Trained Operations and Maintenance Staff Reduce Carbon Footprint Diverse Water Supply Portfolio No Systemic Groundwater Mining Increasing Efficiency & Conservation Community-Wide Conservation Ethic Climate Change Resilient System & Supply Rate Structure Encourages Water-Use Efficiency Effective Conservation & Efficiency Programs Sound Planning Standards-Driven, Data-Driven Planning & Decision Making Long-Range Water Planning through 2050 Anticipate Future Regulations, Evolving Standards Engage CWAC and Community in Planning Processes Transparency & Communication Comply with Mayor & Council Policies Accurate, Publicly Accessible Data & information Meet All Reporting Requirements Utilize Various Media for Timely Public Communications 5

6 Business Case and ROI Case Study Accountability and transparency on project investment Builds sound planning and investment brand elements Clear alignment with Strategic Plan business values Business case established before a project is initiated ROI case study developed after a project is completed Develop Business Case Implement Project ROI Case Study 6

7 ROI Case Study Answers the following questions: Issue addressed? On schedule? Align with Tucson Water s Strategic Plan and Business Values? Major challenges encountered and overcome? Action, solution, or investment? Financial and non-financial investments? Achieve objectives? Value added? 7

8 ROI Case Study Considerations Financial investments Capital Annual Rate impacts Non-financial investments Land Equipment Labor Value added Cost savings Safety Environmental Economic Public outreach and branding Water supply and reliability Water quality Provisions for the future 8

9 Clearwater ROI Case Study The Clearwater Program has been used to recharge and recover Colorado River water from the Central Arizona Project (CAP) since

10 Clearwater ROI Case Study Primary issue this program addressed: The City of Tucson cannot rely on groundwater alone to meet current and future water demands. CAP is Tucson s largest renewable water supply, but it was not being fully utilized prior to the Clearwater Program. 10

11 Summary of Investments and Value Added Investments Capital investment of $134 million in Clearwater infrastructure, including Recharge basins Recovery wells Conveyance Water quality management Current annual investment of $39.5 million, including purchase of CAP water, operations and maintenance, electricity, natural gas, and chemical feed Value Added by Program Allowed full utilization of the City s Colorado River allocation Increasing Water Reliability! Allowed Central Wellfield to begin recovering from over-pumping Renewable/local supply is essential to the viability of Tucson s economy Successful public outreach and utility branding as a trusted water utility Water quality improvements Provisions for future expansion Maximized current infrastructure and investments by using Tucson Water-owned land for the Clearwater facilities Achieved program goals on schedule 11

12 Clearwater ROI Case Study ROI Case Study Question How does this project align with Tucson Water s Strategic Plan and Business Values? Response Sound planning and appropriate investment: Creates compelling benefits with respect to water reliability and protecting the environment Reliability: Allows Tucson Water to purchase its full allocation of CAP water, storing unused portions in the aquifer for future use in case of droughts or shortages Safe, high quality water: Complies with Safe Drinking Water Act Exceptional customer service: Provides a reliable water supply for the foreseeable future Protecting the environment: Has allowed Central Wellfield groundwater wells to be shut down Increasing efficiency: Includes strategies for operating lower-cost wells for recovery of CAP water Sound financial management: Has been implemented in a fiscally responsible manner. Transparency: Communication with the public has been a central focus of the program. 12

13 AMWA Platinum Award for Utility Excellence Tucson Water was recognized by the Association of Metropolitan Water Agencies (AMWA) with a Platinum Award for Utility Excellence on October 20, 2014 Recognizes utilities that have proven exceptional performance through past AMWA awards and implementation of nationally recognized Attributes of Effective Utility Management The Clearwater Program and Recycled Water Master Plan were highlighted as examples of Tucson Water s proactive investments in supply availability and infrastructure development Community relations, including work with the Citizens Water Advisory Committee, were also highlighted 13

14 14 Questions?

15 Clearwater ROI Case Study ROI Case Study Question What was the course of action, solution, or investment? What were the financial and non-financial investments? Response Implement the Clearwater Program so that Tucson Water s allocation of CAP water could be recharged and recovered for potable use, thus reducing the need for groundwater pumping and providing a reliable long-term water supply Financial: Capital: $134 million Annual: $39.5 million Non-Financial: Land (previously owned by Tucson Water) 15

16 Clearwater ROI Case Study ROI Case Study Question What is the value added by this project? Response Environmental: Has allowed Central Wellfield to be shut down and aquifer to begin recovery from overpumping Economic: The program and the Assured Water Supply Designation are essential to attracting businesses and investments to the community Public Outreach and Utility Branding: Has provided many opportunities for public outreach Water Supply and Reliability: Has provided benefits related to water table, water banking, drought resistance, Assured Water Supply Designation Water Quality: Provides high-quality, safe drinking water Provisions for the Future: Allows Tucson Water to move forward with other projects in Strategic Plan 16

17 Clearwater ROI Case Study ROI Case Study Question Does this project achieve its objectives? Was this project completed on schedule? Response The Clearwater Program achieves its objectives to provide a reliable, safe, high-quality source of drinking water to the community Yes 17