CHAMBERS CREEK REGIONAL WASTEWATER TREATMENT PLANT FACILITIES PLAN 2. SEWER UTILITY LEVELS OF SERVICE

Transcription

1 CHAMBERS CREEK REGIONAL WASTEWATER TREATMENT PLANT FACILITIES PLAN 2. SEWER UTILITY LEVELS OF SERVICE The Pierce County Department of Public Works and Utilities (County) Sewer Utility (Sewer Utility) uses Levels of Service to describe how they are achieving its mission, vision and values. This chapter provides an overview of the Sewer Utility Levels of Service in context with the Chambers Creek Regional Wastewater Treatment Plant Facilities Plan (Facilities Plan). 2.1 Introduction Providing service to existing and future customers relies upon effectively managing the investments, both existing and future, to best meet customers needs and expectations. As the sewer system infrastructure ages, improvements will be made in maintenance, repair, and refurbishment to manage the Sewer Utility s costs. The County will continue to strive to deliver cost-effective, environmentally sound sewer services to all of its ratepayers. Projects included in the Sewer Utility s plan are organized and evaluated in accordance with how they are aligned with the following five categories: 1. Maintenance is considered a routine activity associated with repairing a physical asset or keeping the physical asset functional during the asset s useful life. Within the Chambers Creek Wastewater Treatment Plant (Plant), maintenance activities can range from servicing a sludge pump to emptying and cleaning out one of the facility s biosolids digesters. 2. Operations (or operating a system) include the costs and activities associated with the continued and highest and best use of an asset. The operations staff at the Plant is responsible for ensuring that systems are operating efficiently and generating a product that meets a defined set of quality control measures. On one hand, this means maintaining a discharge to Puget Sound that meets or goes beyond the water quality objectives for the Plant s permitted discharge. Alternatively, this means ensuring the biosolids product from the fertilizer manufacturing facility has the right chemical composition to be used as a commercial fertilizer and is safe enough for county residents to use on their own lawns. 3. Preservation includes replacement or rehabilitated of an asset after it has reached its useful life to accomplish the same overall function. Often this activity is confused with the capital improvement of a system. Examples of preservation activities at the Plant include replacing worn pumps and installing new flights and chains at the bottom of a primary sedimentation basin once the old units show excessive signs of wear and tear. 4. Improvements are changes that augment the capacity or function of an asset. Any activity or capital investment in the Sewer Improvements Program (SIP) is considered an improvement activity. In Public Works and Utilities, even the actions associated with the identification or development of the SIP is considered an improvement activity. Most of the project alternatives considered in this Facilities Plan constitute improvements. 5. Administration of a project or program involves the management, planning, and coordination of the overall asset. Examples of administration activities include the management of boards or committees, planning activities such as basin planning, or working on an environmental impact statement. 2-1 November 2010

2 CHAPTER 2 Chambers Creek Regional Wastewater Treatment Plant Facilities Plan The projects discussed in this Facilities Plan cover all five of these categories, and some projects contain aspects of several. Along with categorization and prioritization, all projects discussed in this Facilities Plan will include a clearly defined driver and purpose, and will have a quantifiable outcome which conforms to the Sewer Utility s Levels of Service. 60% 50% 40% 30% 20% 10% 0% 51% 23% 12% 11% 1% 2% 5-Excellent Very Poor Don't Know 2.2 Public Involvement During the fall of 2008, the Sewer Utility conducted a telephone survey of 600 Sewer Utility customers to determine the level of support for potential Facility Plan alternatives. The interview pool was arranged to reflect existing customer populations in the cities of Lakewood, University Place, Steilacoom, Milton, and DuPont, and unincorporated Pierce County including the neighborhoods of Spanaway, South Hill, Frederickson, and Parkland. Customer information was supplied from existing Sewer Utility customer databases, and supplemented where phone numbers were outdated, by data from a private source (Lists and Labels). In all, over 12,400 contacts were made to ensure the sample pool was equitable with regard to geography, age and gender. Just over half (53 percent) of the survey respondents were male and 47 percent were female. Eighteen percent of survey takers were between 18 and 44, 31 percent were between 44 and 59 and 47 percent were over 60. This age distribution is reflective of a typical homeowner sample and not necessarily consistent with the actual population of the region, which includes renters. The survey has a margin of error of +/- 4 percentage points. The following summarizes the results of the survey. Customer Satisfaction: About 74 percent of customers in the area say they consider the quality of service they receive either good (23 percent) or excellent (51 percent), on a 5-point scale, relative to the price they pay. Planning Priorities for the Future: 55 percent of ratepayers say they would like to see the Sewer Utility s most important goal be using new technology to limit wastewater discharge to Puget Sound (28 percent) or to impact the environment as little as possible (27 percent). Use new technologies to limit discharge to Puget Sound Impact the environment as little as possible Maintain low sewer rates for existing ratepayers Ensure sufficient system capacity to accommodate growth Don't Know Maintain low hook-up costs for new users 4% 6% 14% 22% 28% 27% 0% 5% 10% 15% 20% 25% 30% Priorities for Improvements: The public prioritized five potential system improvement areas essential to the long term Sewer Utility success. The following figure illustrates the percentage of customers rating the improvement area as important or extremely important. Ensure Plant operates within guidelines 100% of the time Rehabilitate sewer facilities before they fail Maintain Plant to extend its useful life and minimize spills Invest in new technology to improve water discharged to Puget Sound Invest in new technology so wastewater can be reused Expand existing facilities to serve the needs of future customers Treat wastewater to a higher level than the minimum required Install landscape buffers to screen Plant from nearby neighbors 29% 54% 60% 72% 71% 80% 77% 86% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% November

3 Chambers Creek Regional Wastewater Treatment Plant Facilities Plan CHAPTER 2 Ensuring the Chambers Creek Plant operates within state and federal compliance 100 percent of the time was rated by more than 85 percent of the survey respondents as a top priority. Rehabilitating sewer facilities before they fail and maintaining the Chambers Creek Plant to extend its useful life and minimize spills are the second and third highest overall priorities. These three projects are popular because they all focus on keeping current plants in use, well maintained, safe and in compliance with federal guidelines. On the other hand, improvements to expand or benefit future customers, and treating the water to a higher level than required are viewed as less important. Landscape buffers that hide the wastewater plant were not a priority Conclusions The following summarizes the results of the public participation efforts: Sewer Utility customer satisfaction is notably high at present. However, residents in East Pierce County where there has been tremendous growth in the past three to five years may not feel as connected to the government agencies that serve them (i.e., fire, libraries, and sewer). Providing additional information about Sewer Utility activities might help build a stronger relationship over the long term. Customers are interested in extending the useful life of existing facilities and making other low-cost improvements before expending capital for new equipment or system upgrades. However, they are also willing to support specific investments that achieve important goals, as defined by the customers themselves. Sewer Utility customers have a strong interest in pushing technology to the next level wherever possible, suggesting a belief that green technology can offset, reduce or eliminate discharge impacts to the environment. Sewer Utility may be in a strong position to align its future investments with the high value customers place on conservation, water quality and technology innovation. This has been effectively by peer organizations, and can help the public to view Sewer Utility as not merely a service provider, but a partner in a greater common goal. 2.3 Sewer Utility Asset Management The Sewer Utility currently manages a collection system with 636 miles of sewer line and a wastewater treatment plant. The assets (e.g., pumps, motors, valves, pipes, and buildings) associated with these facilities have an approximate $1.3 billion replacement value in 2009 dollars. The Sewer Utility embarked on an asset management program in 2005 to ensure that revenues are being used most effectively to responsibly achieve the customer goals. Asset management is a systematic, fact-based approach to optimizing the acquisition, operation, and maintenance of a utility s physical infrastructure assets in order to meet the Sewer Utility s level of service goals. Asset management uses tools that include life-cycle cost analysis (the quantitative assessment of the entire cost of acquiring, owning, operating, maintaining, and ultimately decommissioning and replacing a given asset) and risk management (the quantitative assessment of the likelihood and the consequences of failure of an asset; to help a utility make an informed comparison of alternatives). Asset management is closely linked to the concept of level of service. This term is used to describe the overall how the performance goals for a utility will be achieved. It describes the standard of service that is delivered to the customer. Levels of service are usually expressed as quantifiable measures or goals (e.g., responsiveness and customer satisfaction) which can be normalized into dollar terms. A sustainable level of service is one that can be delivered long-term to a utility s customers. A defined level of service provides an objective baseline by which decisions in an asset management program can be evaluated. Asset management is a system used to verify that a utility s services and performance are aligned with 2-3 November 2010

4 CHAPTER 2 Chambers Creek Regional Wastewater Treatment Plant Facilities Plan a chosen level of service. Under asset management, decisions for installing new facilities in the service area, how and when to maintain and repair equipment, and how to effectively and efficiently operate the equipment and facilities are made by defining and comparing costs and benefits. Asset management helps incorporate both quantifiable goals, such as operating cost, number of connections, or regulatory limits, and semi-quantitative or qualitative goals, such as sustainability and social factors, into the decisionmaking process. This process leads to smarter decisions based on a balance between what level of service is provided to the customer (e.g., limited number of backups into homes, permit compliance, Puget Sound water quality) and what the cost is to provide this service. How much the public is willing to pay to receive a set level of service is used to determine how monies are spent at the Sewer Utility. 2.4 Decision-Making and Total Life-Cycle Costing The decision-making process adopted by the Sewer Utility, and applied in this Facilities Plan, combines a level of service goal with risk management to assign needs, and uses a business case evaluation (BCE) to assess alternatives. The process is characterized by the following components Level of Service The term level of service is used to describe the overall performance of a utility. Pierce County s Sewer Utility identified the following goals that shape its level of service guidelines: Maintain public satisfaction. Continue to solicit public feedback to ensure that service is aligned with customer expectations. Protect the environment. Meet or exceed regulatory standards to protect water quality and the environment. Maintain transparent and predictable rates. Work to minimize rate increases to ensure predictable rates for customers. Support economic development by ensuring sufficient capacity to meet growth and infill needs, and by keeping fees aligned with peer communities. Be good stewards of infrastructure resources. Ensure that rates are sufficient to cover operations and maintenance, replacement, and administrative costs to ensure an equitable distribution of rates for current and future generations of customers. The Sewer Utility s goals are consistent with what is sometimes referred to as a triple bottom line approach. Triple bottom line refers to taking into account not only financial capital (the conventional bottom line ), but human capital (social performance) and natural capital (ecological performance) as well. Human capital refers to contributing to the welfare of an organization s employees and the welfare of the community where the organization operates. Natural capital refers to minimizing the cradle-to-grave ecological impacts of an organization s decisions. This approach is reflected in the Sewer Utility s performance goals Risk Management All assets will eventually fail; quantifying and managing the risk of failure is the goal of risk management. By assessing and quantifying the risk posed by the failure or inability of infrastructure assets to meet their intended functions, the utility can identify operations, maintenance, repair and rehabilitation, and replacement strategies and projects to mitigate these risks. In general, risk can be considered to be a product of two variables: the likelihood of failure and the consequence of failure. An asset with a low likelihood of failure but a high consequence of failure might be just as critical to address as an asset with a higher likelihood of failure but a lower consequence of failure. A risk management program includes a systematic inventory of assets to identify potential failure modes, the likelihood of failure (also called a condition assessment), and November

5 Chambers Creek Regional Wastewater Treatment Plant Facilities Plan CHAPTER 2 the consequences of failure for each asset (also called a criticality assessment). This information is incorporated into the facilities planning process Business Case Evaluation / Life-Cycle Cost Analysis A BCE is a structured economic analysis used to make decisions based on life-cycle costs and community, environmental, and risk considerations. Life-cycle means not only the costs to build an asset, but also the cost to operate, maintain, repair, and ultimately decommission and replace an asset while it is owned and operated by the sewer utility. The BCE tool is a repeatable, defensible, and quantitative decision-making process, and provides a means of making a clear distinction between wants and needs. The BCE process includes six steps, illustrated in Figure 2-1 and described in the following paragraphs: 1. Form an expert team. Identify the team that will be responsible for developing the BCE. The team should be made up of a crossfunctional group representing all levels of the organization (i.e., management, engineering, operations, maintenance, and finance) that have a stake in finding a solution to the problem. 2. Define the problem in terms of level of service and drivers. Identify and clearly define the problem that creates the need for the project or policy revision. This is a critical step because the way an organization thinks about a problem could limit the solutions it considers. The goal in this step is to step back from the situation to understand the problem in a way that permits the formation of creative, alternative approaches to a solution. At this point, the primary drivers or levels of service should be identified. The level of service sets boundaries for the project solution and could include regulatory requirements, system capacity limitations, system reliability, efficiencies (cost savings), and/or aesthetic considerations. 3. Collect data on the current situation. Collect data around the problem and determine if the problem is an isolated problem or if solutions might affect other areas of the process or other projects. Any data relevant for solving the problem should be considered. Some of the information will be easy to obtain and some will be more difficult. Form expert team: your staff Identify problem and service level effects Brainstorm alternatives and screen fatal flaws Collect data on costs and benefits Undertake present value/life-cycle analysis Solution based on best cost/benefit analysis Figure 2-1. BCE process overview 4. Prepare and screen alternatives. Define alternative ways of addressing the problem. Again, this is a critical step and it is important to consider all prospective solutions. If the BCE is being used by a cross-functional team, the alternatives are usually developed in a brainstorming session. After alternatives are developed, they are screened for fatal flaws with regard to solving the problem, meeting the level of service required, or unacceptable levels of risk. 5. Develop costs and analyze alternatives. Each remaining alternative is evaluated by a life-cycle, present value, and benefit/cost analysis that considers not only budgetary impacts but also risks, environmental 2-5 November 2010

6 CHAPTER 2 Chambers Creek Regional Wastewater Treatment Plant Facilities Plan considerations, and societal costs (i.e., triple bottom line considerations). Life cycle means that benefits and costs are considered over a long period of time, the Sewer Utility uses a 30-year timeframe. To the extent possible, these benefits and costs are expressed in dollar terms. Risks, if present or if reduced by an alternative, are likewise expressed in dollar terms. Present value means that the analysis takes the time value of money into account. Present value is universally used by private companies to make investment decisions. 6. Recommend and report. The BCE recommendation developed using the first five steps is easy to justify. The solution is the alternative with the lowest life-cycle cost that meets the level of service requirements Asset Inventory An asset inventory is a critical facet of an asset management program; to manage assets effectively, a utility must first understand what its assets are. An asset inventory includes the collection of basic design data such as size, material, and capacity, as well as information such as age, condition, function, reliability, efficiency, criticality, original cost and estimated replacement cost, and estimated service life. The asset inventory enables the use of other asset management tools such as risk management and life-cycle costing by collecting and making readily available important information about the utility s physical infrastructure. After the initial inventory of assets, an asset inventory should be continually maintained and updated as new assets are added and old assets are decommissioned and replaced. Asset inventory tracking is often simplified through the use of a computerized maintenance management system (CMMS) and other management tools Funding Strategy Maintaining a sustainable level of service requires a well planned long-term funding strategy. The use of revenue from customer rates, connection fees, and bonds must be prioritized for the sometimes competing demands of new facilities, operations costs, and repair, rehabilitation, and replacement of existing assets. A quantifiable Sewer Improvements Program (SIP) helps ensure that costs and revenues are forecast well into the future. In turn, this helps eliminate level of service gaps, including the need for sudden or unplanned changes in customer rates and connection fees and the need to undertake inefficient repair or rehabilitation projects because financial shortfalls preclude the replacement or upgrade of an asset. The Sewer Utility s SIP includes the use of asset management tools such as life-cycle costing, risk management, and asset tracking. By analyzing the entire cost of ownership of an asset, life-cycle costing helps the utility steer away from projects or decisions that might be initially attractive because of a lower capital cost, but have high long-term operation, repair, or rehabilitation costs. Risk management tools help the utility avoid costly asset failures and extend the useful life of assets. Asset tracking and performance metrics, along with life-cycle costing, help financially optimize the ownership of assets, ensuring that the operation, repair and rehabilitation, and replacement strategies for an asset are planned in manner that maximizes the useful life and minimizes the cost of ownership. 2.5 Facilities Planning Outcomes This Facilities Plan has been developed according to four critical outcomes; these include the management of risk, the lowest triple bottom line cost, the efficiency and effectiveness of selected processes, and strategic preparation for future conditions. November

7 Chambers Creek Regional Wastewater Treatment Plant Facilities Plan CHAPTER Managing Risk Existing facility needs have been identified and categorized based upon a risk assessment. A list of projects has been developed to address these needs. Each project is associated with a criticality, which considers both the risk and consequence of failure. Risk management practices allow the Sewer Utility to develop risk mitigation strategies for its most critical assets, helping to reduce the cost of high-consequence failures Least Cost The BCE process identifies the lowest-cost alternative, but it does so in a manner that ensures that other important considerations are not overlooked. Before costs of a project or decision are considered, all potential alternatives are subjected to a screening process that includes an analysis of the project relative to the Sewer Utility s level of service and a risk assessment. Alternatives that do not meet the required level of service or have an unacceptably high risk are eliminated from further consideration. By the time an alternative reaches the stage of cost analysis, it has already been vetted and been found consistent with the Sewer Utility s level of service and risk mitigation strategies. Cost analysis using the BCE tool assesses lifecycle cost, and not simply the up-front capital cost of a project or decision. The BCE tool ensures that all costs of a decision are considered by evaluating the capital, maintenance, operations, repair and rehabilitation, and decommissioning and replacement costs of an asset. This helps to ensure that projects which might have attractively low front-end costs are not selected without full knowledge of long-term operational costs and triple bottom line impacts. for utility assets can extend their useful life, minimize risk, and lower the total cost of ownership. This increases the efficiency and effectiveness of asset O&M, maximizing the value per dollar spent Preparation for Future Conditions The Sewer Utility s level of service emphasizes future conditions by assessing goals for both future and existing customers. The BCE tool ensures that future goals are considered by stopping to fully define the problem, collecting all available data, evaluating potential solutions against the selected level of service, and considering the cradle-to-grave life-cycle cost of a project or decision. Sustainability follows naturally from the consideration of and preparation for future conditions. A sustainable level of service is one that can be maintained over time; a utility should not have to rely on large, sudden rate changes to maintain its chosen level of service, and the level of service should not have to be altered dramatically as a result of the utility s finances. Preparing for the future and planning accordingly helps to maintain a sustainable level of service Efficiency/Effectiveness The asset management tools applied in this Facilities Plan are intended to optimize the way the utility s physical infrastructure is acquired, operated, and maintained. A systematic approach to operations and maintenance (O&M) decisions 2-7 November 2010