2010 Board Strategic Plan activities included:

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2 2010 Board Strategic Plan activities included: March September 2009 The Board's Strategic Planning Task Force met several times to develop a process and schedule to review and update the 2006 Board Strategic Plan. August 2009 The 2006 Board Strategic Plan status was updated, and comments from Stakeholders were collected. September 2009 The Board held a 2 day Strategic Plan Retreat to review action plan status and Stakeholder comments and provide direction on ongoing and new action plans. December 2009 The Board reviewed the initial draft of the 2010 Board StrategicPlan prepared from the materials createdat the Retreat January 2010 The Board reviewed the final draft of the 2010 Board Strategic Plan 2

3 Cover page of the 2010 CAWCD Board of Directors Strategic Plan (also published in a turquoise color) 3

4 The 2010 Board Strategic Plan combined two KRAs from the 2006 Plan Leadership and Public Trust and added back a new KRA Finance that had appeared in earlier plans but that was subsequently rolled into Project Reliability The 2010 Board Strategic Plan contained: 6 Key Results Areas 19 Strategic Issues 37 Strategic Objectives 99 Action Plans 4

5 The Internal Strategic Plan contains the entire 2010 Board Strategic Plan The results of the Maintenance Organization Assessment and the Enterprise Management Assessment will be absorbed into the Internal Strategic Plan. 5

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8 History To better meet the future needs of the Maintenance Group, we determined that a more robust asset management program which included predictive, preventative, and scheduled maintenance would allow the organization to meet the mission of CAP. This included a need to better maintain and increase the reliability of the organization's aging infrastructure Also, the need for a structured way to capture information and transfer knowledge was important as many of the existing skilled crafts were nearing retirement eligibility. An additional advantage to a good asset management program is the ability to better predict maintenance cost. By minimizing reactive activities and concentrating on predictive and preventative tasks, this effort reduces the need to work excessive overtime, improves the safety of our workforce, minimizes equipment damage, and allows us to better control our costs. The overall goal of an asset management program is to improve system reliability. By performing proper maintenance in a timely manner, we are able to minimize breakdowns. An outside consultant was hired to perform an assessment in 2003 when the Maintenance Excellence program was initiated and CAP has performed three subsequent internal assessments using the same methodology. This has enabled us to continuously identify gaps and implement improvements. 8

9 Benchmarking Maintenance Audit The consultant began the assessment process by interviewing i i staff and requesting a mountain of documents. This included the general principles of the Maintenance Excellence Program, the workflow processes deployed by CAP, and the technology and tools used to manage the assets. The Consultant ranked each of the 21 maintenance excellence audit categories and six CAP facilities by identifying the consequence and likelihood of failure for each category or facility respectively. This process identified the areas for improvement based on mitigating risk. Consultant staff conducted CAP facility site visits to confirm the level of maintenance performed and interviewed site personnel regarding maintenance processes for the maintenance audit. Sites visited included: Headquarters, Mark Wilmer PP, Salt Gila PP, Waddell PGP, Hassayampa PP, Check Structure #21, and City of Phoenix Turn Out. As a result of initial staff interviews, the consultant felt that CAP was very advanced in our asset management program and a better indicator for benchmarking would provide CAP with an international perspective. The consultant suggested the use of the Water Services Association of Australia's Asset Management Process (WSAA) benchmarking tool. The WSAA benchmark is a more comprehensive audit tool which derives a score that can be compared to other utilities from around the world who have deployed best practice maintenance programs. This evaluation was performed at no additional cost to CAP. 9

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11 The overall results of the assessment including previous scores. A score of 82% places CAP's program near World Class. Also, the consultant validated that CAP's previous internal audits were performed objectively and without bias. 11

12 Maintenance Audit Processes Category Scores The consultant evaluated the 21 categories used in the overall scoring process to determine the level of performance for each one; this allowed them to come up with the 13 areas for improvement. Letters are the original category assignments developed by Life Cycle Engineering. 12

13 42 Leading International/National Utilities This slide is includes Utilities in North America 13

14 42 Leading International/National Utilities This slide includes International Utilities where world class Asset Management has been a way of life for many years. Also, as in Australia, reliability is a component of regulatory requirements. 14

15 CAP's maintenance function compared to the 42 Leading National and International Utilities. CAP's overall score of above 70% indicates that CAP's maintenance program is at a level above all utilities ranked in North America. For Overall Participants CAP's maintenance Excellence Program was above the median. 15

16 The consultant did come up with 13 areas for improvement. These categories are being evaluated to determine when and how they can be incorporated into the Maintenance Excellence Program. Many of the 13 areas of improvement overlap with CAPs Internal Strategic Plan and the Enterprise Assessment Plan. 16

17 In conclusion. CAPs Maintenance Excellence Program ranks as the leader among North American companies. It is near world class when compared to leading utilities internationally. This however does not mean we are done. There is still a lot of work ahead of us. Going forward, we will be looking at refining the program and implementing the 13 recommendations outlined by the consultant. 17

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19 The timeline for this project was fairly short, considering that the deadline for the final report was November 2010 in order to be able to intercept 2011 planning processes. 19

20 These 10 categories were defined based on research performed on similar studies by the CAP purchasing department and advice from staff contacts in the consulting industry who would not be bidding on this work. 20

21 Over 20 managers were interviewed The focus group consisted of approximately 40 employees, including managers, supervisors and individual contributors with varying lengths of service. The assessment analyses utilized are well known evaluation tools often used in management effectiveness evaluations. 21

22 The Senior Management Team evaluated and prioritized the recommendations using a tool developed by the consultant. These prioritizations will help to identify low hanging fruit and will also help to further plan and delineate the activities in the Internal Strategic Plan. Some recommendations are directly addressed by individual action plans in the Internal Strategic Plan. Other recommendations are more broad in nature and will impact multiple areas of the Internal Strategic Plan. 22

23 The integration work will take place by mid February. 23

24 Why engage in Internal Strategic Planning? To effectively support the 2010 Board Strategic Plan by linking it directly to CAP s planning, operations and maintenance activities To provide a vision and roadmap for the next five years into which the entire CAP organization has had input, so that we are all working collaboratively and in cross functional teams to achieve agreed upon goals and objectives To be an effective, flexible organization that can readily adapt to changing conditions facing CAP and its customers and stakeholders, such as: Economic variability Drought and climate change, creating potential impacts on water supply National and state shift away from fossil fuels towards more renewable energy supplies Evolving technologies, as in the fields of information management and asset monitoring Maintenance challenges facing the CAP aqueduct Leadership position in the state with respect to water and power 24

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28 Yellow: First Draft of Internal Strategic Plan, May 2010 Orange: Strategic Issues, Objectives and Action Plans added as a result of the Strategic Planning meetings with CAP staff 28

29 Internal Strategic Plan includes the following: 6 KRA s 19 Strategic Issues (1 added to Leadership & Public Trust) 48 Strategic Objectives (2 added to Leadership & Public Trust, 7 added to Project Reliability; 1 added to Replenishment) 207 Acton Plans (86 added, impacting all the KRAs; 16 added to Leadership & Public Trust, 4 added to Finances, 54 added to Project Reliability, 8 added to Water Supply, 3 added to Power, 1 added to Replenishment) 29

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