HomeMy WebLinkAboutStaff Report 148-05Staff presented its first semi-annual Strategic Plan Performance update to the UAC on October 1,
2003 and to the City Council on December 1,2003. These updates included the 51 performance
measures chosen for the Balanced Score Card covering the 6-month period from January 2003
through June 2003. The report also included Action Plans for two of the performance measures,
which had received a minus score for not achieving their objective goals. Staff has provided
semi-annual updates to the UAC and City Council. The most recent Strategic Plan Performance
update gee5-W~nUO the UAC on October 13, 2004 and pre\~W:9~~ifl~~Lresults for the period
of January 2004 -July 2004.
In response to changes in the utility industry operating environment, CPAU took the necessary
steps to revamp its strategic plan to enhance its ability to meet customer expectations by
providing stable rates, reliable service, financial support to the City, and programs that reflect
balanced environmental solutions. CPAU also recognizes the importance of its employees in
achieving these strategic goals. The purpose of this report is to provide the UAC with a clear .
description of the nature and direction that CPAU will take to achieve its revised objectives and
strategies toward providing valued utility services to customers and dependable returns to the
City.
SJafLnre..se!Jt~d a.n earUJ,;~r Y~r~ion QJ thi.s.SJnlt~J,;iG plan to tlle UAC aLthe October 11.20P.4-,_TbJs,
~orUn~~m-~tJ)C r~~on..s.e..Jo ~fu.e.dilllck received froJnJlttiJAC duringJ.Qe Q-f.,Wj),~r ll~
~QJ11.n~JiJ~
The updated Strategic Plan consists of a new Utilities Mission Statement, four new Key
Objectives, seven new Strategies, and a revised set.ofPerformance Measures.
MISSION STATEMENT
The Mission Statement is revised to be more succinct, clear and easy to remember. All of the
elements of the existing strategic plan continue to be present in the updated strategic plan. The
differences are mainly in the emphasis. Some elements in the mission statement such as
"sustaining the environment," or "being the preferred full service utility provider" are captured
as either objectives or strategies in the updated strategic plan as discussed below.
. '. . ·i EXISTING '. I; , " , UPDAtED ......
"To build value for our citizen owners to "Provide valued utility services to
provide dependable returns to the City and customers and dependable returns to the
citizens of Palo Alto and to be the preferred City."
full service utility provider while sustaining
the environment."
Page 2 oflQ
KEY OBJECTIVES
Key objectives have been redefined, consistent with the revised mission statement, to be more
succinct, clear and easy to remember. Based oll .. UAC's COJlli1leuts aLthLOctober 13t1\ 20Q4
I1~Jing. U pdared Ohj&ctive #Li~U'evi~ed to include. "utility infmstr~~Existing ebjeetive
Obl~ctiy~#2 is alsojnseFj30Hlt:ed-maintained as a strategy under the Hpaated-Updated ebje-(7t~vo
QQ.i~_Qtiy.e_#l as reliability is a key element of customer satisfaction. Similarly...,based on tI~
fee_d.back . .received froUl UAC. .Ex.istitULObiective #4JS .. J"etained and incorQorate .. d into Undated
D11jeGtive #3. 8tlt}HaFl~sting--ebjestci.,,'e #4 is not calleEl-EH:H-sj3ecifically--H+1ael'-tHe-urEkttefr.-s.et
ef-ebjectives, as it is an-outcome eftHefour objeetfv.e.s-spectHeEl-hHHe-Hj3E1ateE1-stfategic plan.
:' ~XlSJ:IN(j,; .... ' •. :::' > . I.··· :.; .: ·."UPDA.11:Ell., .. j ':\.' .,.
1. Enhance customer satisfaction by 1. Enhance customer satisfaction ailcLuJilUx
delivering valued products and services. infi·a.s.tLuctllre.
2. Invest in utility infrastructure to deliver 2. Employ balanced environmental solutions~-;
reliable service. 3. Manage financiaJ-fesoorees-e#eetwely-..
3. Provide superior financial performance to -PrQvide fair and reasillJ.flble r~turns tQJhe
the City and competitive rates to City and ~mp_etitive rates t.9 CJJ.StQffiQI]
customers. thI:o.!Jgh.JIllJIl i c i.nal QWllershlP-L
4. To identify and maintain the unique 4. Ensure a safe and engaged workforce.
advantages of municipal ownershiQ.
The revised key objectives are also aligned with the four balanced scorecard perspectives:
Customer, Environment, Financial and People.
The ffiHewiltg-chart -lo_Atta~hl1},g!!t.6.=presents the major elements of the updated strategic plan.
/
Page 3 oflQ
I
MEASURES
Measures are necessary to track CPAU's success in implementing the Strategic Plan. Staff
believes that performance measures should be few, simple, and easily understood.
Staff noted in earlier reports that the results scorecard will evolve over time and respond to
changes in the business climate, with potentially new performance measures added and others
modified or dropped.
In updating the Strategic Plan, staff focused on defining the best set of measures to ensure that
key objectives were met. Another goal was to reduce the number of measures to a smaller and
more relevant set and to focus on key measures. As a result, changes were made decreasing the
total number of measures from 51 to ~29. The rest of this section summarizes the updated
measures under each of the four. perspectives. For a detailed description of the new measures,
including measure definitions, and measure goal statements, please refer to Appendix B~Updated
Strategic Plan Measures.
CUSTOMER MEASURES , ' .. EXI$TIN~:'; "'i .i,,: : .. ;'" ,l]£DAJ'Elt ; .. '.c· Z····· .. ... , ' .
1. CUSTOMER SATISFACTION 1. CUSTOMER SA TISF ACTION
a. Residential Customer Satisfaction a. Customer Satisfaction Index
Index b. Customer Complaints -Trends and
b. Business Customer Satisfaction Analysis
Index
c. Gap Analysis
2. RELIABILITY 2. RELIABILITY
a. Electric residential customer a. Electric System Average
perception about reliability Interruption Duration Index
b. Electric business customer b. Gas frequency of service
perception about reliability interruptions per customer
c. Electric System Average c. Water frequency of service
Interruption Duration Index interruptions per customer
d. Gas frequency of service d. Waste water Federal Regulations
interruptions per customer
e. Water frequency of service ~NIQ!lE MUNICIP~1 VA~UE interruptions per customer a..~ .Accel~rated crp -electri~ ... UNIQUE MUNICIPAL VALUE ". b. Accekrated CIP -.gas a. Maintain Local Control c~AQ..Gelel1lte1LC I~\Y.il.ter b. Accelerated CIP -electric d. Transfer to General Fund Accelerated CIP -gas , c.
d. Accelerated CIP -water ~_ Re~RonSG_ tQJ-o<&l
e. Public Benefits and Demand Side Com.l2Elbensiye 11ru1
Management Programs &.-
Measures pertaining to achieving the objective specified under the Customer an..d_CQUl.011mU,X
perspective have been decreased from -l-2-11Jo s-i* Jl. The measures have been reevaluated with
Page 4 of III
two goals in mind: 1) to better align the measures with the revised objective statement and 2) to
focus on key measures.
The revised objective statemevt emphasizes "enhancement of customer satisfaction._~md .... Jltili!y
inJhtstructure". Customer satisfaction will be measured under two general categories: Overall
Customer Satisfaction and Reliability. The existing Residential and Business Customer
Satisfaction Indexes and the Gap Analysis are based on both the annual statewide survey
conducted by RKS, a national corporation that conducts surveys in the utility industry, and the
additional, Palo-Alto-specific, component ofthe RKS survey. These surveys are conducted every
other year. In order. to more closely and timely track customer satisfaction issues including the
Gap Analysis, a new CPAU survey instrument will be developed and conducted annually for
both customer groups. Additionally, a department-wide Customer Complaints Tracking Database
will be developed to support the analysis and reporting of customer complaints and trends.
On the Reliability side, existing electric, gas and water reliability measures will be continued ..
For wastewater reliability, spills will be reported based on Federal Guidelines on Capacity
Management Operations Maintenance (CMOM). Previously this measure was listed under the
Environmental perspective. Electric customer perception about reliability will be handled under
the new survey to be designed under the Customer Satisfaction category .
.gHe-te-tfle""1'ev-is~l--eIBfJhasts-HHI·le-stfategi-e--plafl-;-Aeool{:wateEl-GI-JL6y-I4!flEl .... wi-l-l--fl0t-131.HfleaStH'cEl
Htl€lel'-lJItiqHe--MaA-ieil*l-¥aI-l:I&-Wtcg(wy ..... GI-I~0flE~l:HtEI will b~d-Ht1Ger-the
oJ.lioflafwiul perspective. Soimitafly, Pllbli~s-atlEl DSM Pl~e-repElfteEl--t:ltlElet'-the
£i'l¥if6mRe-nta-l-pe!'5peetf.ve-w·itlHev-iseEl .... meaStlfe geul statemeRts.
Based on .the feedbl'lck rec.eived from the UAC-,-Uni~unicillil~~ will be retailJed a~ .. an
inmo!:tant menSJ.lre, Under th is cate&QrX, Accelerated CIP.J1mresents the ability to set the paCQ of
.Q..~.mjtfiJ~pendituJ'.e .... l).I:Pg;rnU1...£...hfis~d QQJhe .. Meds ofllie comm1lllit~Ihe prg,gJ'e.ss inJhiS .. ..are..a wiIJ
be tnooitored and repQrte..d..hy fund. AtlQLher item....Irans.futl<2....G.rnernl Eund,=ulso repres.ents the
Unkty.e..Ml!nicipal Va~and therefore, will be re~l here. Additionally. Public Benefits and
Demand. Side Mallllg,ement programs will be monitored and reported under the morefS¥Ileral
measure C~]~ .... ~ls_e .11) LocaLColUJ2I:.ehensjye I1mI .. LQQtI COllmreilensiYe £lan inctud~'i
the ..Ell~gX and :Water Effici.euQ.Y..JlS .welI as........Q1ber lO...Qal initiatives thaLthe Uti.litx d~partment
ml.P ... u.m:.ts .... m}d imp]~Jllents.
Page 5 oflQ
ENVIRONMENTAL MEASURES
EXISTING··· UPDATED
1. RESOURCE EFFICIENCY 1. RESOURCE EFFICIENCY
a. Public Benefit and Demand Side a. Demand Side Efficiency
Management Programs Targets -Electric
b. Service Programs for Commercial b. Demand Side Efficiency
Customers Targets -Gas
, c. Best Management Practices for c. Demand Side Efficiency
Water Targets -Water
d. Wastewater Regulations 2. RENEWABLES
2. RENEWABLES a. Renewable Portfolio Targets
a. Renewable Portfolio Targets b. Palo Alto Green Targets
b. Palo Alto Green Targets .., WATER QUALITY .J.
a. Water Quality -Title 22
Measures pertaining to achieving the objective specified under the Environmental perspective
have been decreased from seven to five. The measures have been reevaluated with two goals in
mind: 1) to better align the measures with the revised objective statement and 2) to focus on key
measures.
The revised objective statement emphasizes "employment of balanced environmental solutions".
Under the Resource Efficiency category, Public Benefit and Demand Side Management
Programs will co·ntinue to playa major role. Demand Side Efficiency Program goals that are
under development will be used as the revised measures for these programs. Compliance with
Best Management Practices for water will be incorporated into the new program goals, and
therefore, will not be reported as a separate category. Wastewater regulations are moved under
the Customer perspective under Reliability, and Service for Commercial Customers will continue
to be pursued as a strategy but will not be reported as a measure going forward.
Renewable Program Targets will continue to be reported as a measure. Water Quality, an
important indicator, will be pursued but not reported as a measure, as it is not directly related to
the revised goal statement of employing balanced environmental solutions.
FINANCIAL MEASURES
. , >, .. . EXISTING ...... .... . uPDATED . . ... . ,-" . _. .'
1. COMPETITIVE RATES , I. CQMPETITIYE..RA rn8.
a. Combined average residential utility bill a. A v~_.ele.Qtric h.ill
b. Combined average commercial utility bill c..QmparedJQ.Santa Clal:g.
c. Combined average industrial utility bill eG&E al.ld NCPA aY~m~~
2. FINANCIAL STRENGTH fm::.
a. Bond financing rating i. Residential JiJJSloJDJ:.!'S
b. Debt service coverage ji. Commgrcial
c. Electric reserves ruS.tQ!llt2b~
d. Gas reserves i i.LJ.nQJJsir.ia.I...c ... llSlilllleLS
e. Water .reserves 12. ~X~L~~~sjljJ I COJllP.a!~~d.J.Q .., COST EFFECTIVE AND EFFICIENT .eD&E flJJ.d.l.&.!1R B~ach ... fQJ .J.
Page 6 of lQ
a. Customer accounting ratio -electric
b. O&M Costs per circuit mile -electric
c. Number of customers per employee -electric
d. O&M costs per kWh sold
4. SUPPLY COST ADVANTAGE
a. Electric commodity costs VS. PG&E
b. Gas commodity costs VS. PG&E
c. Electric supply costs VS. National Munis
d. Gas supply costs VS. APGA
e. Water supply costs vs. A WWA
5. RETURNS TO COMMUNITY
a. . Transfer to General Fund
i.. ResidentiaLGllS1illM}:,s,
iL,,-CDJllLn~[Qlill
.QJlS1Qme[~
iii. I I1fL\J.strif!LC!J~.'11ill:neIs
c. . AYeram:; wter _bill.cQIJ1J1~re~
to BAWSCAayerag~s...&.~l
Water
L R.e~ld®.!i~L<fnstpm~~
Ii. _ COJllil1erciat
cLlstruners
111. I nciustrial CLlstQlmLS.
2 ... FINANCIAL_ STRENGIU
a. ~fU1llilci)lgj'lJJing
b. D~bLs~rvic~ cover~
BFFC"-C-+p,lg-f-I-NA-NCIAL M!\NAGEM-BN+
Net-sal.es
&.C-I-P by funa
G&M-{flet--ttf:-·&uJ'}J'}J.y-j-by--f-H-fltl
A-J.J-eea-tOO--allikl-i·Feet-G-Rarges (net-e-f-stJpply
attG-Gl-P-j--by---funEl
Gemt:ooEl-i-ty--ees-t--by--funEI
2. CGSTCGMP-G--T--I-+-l¥[cN-eg.g.
a.C-e-ffib.ifleth.weffige--re&iaoo-tiat---utH-i-ty--b~H
&.-Gem-bhteEl-aveffi.ge--eetlli-H~I--ut·i-I-i+y--bi-14
e.GeHt-bifled--aveffige---ifl(-lHstt~al-u{.H-i-ty--bi-l-l
Measures pertaining to achieving the objectives. under the Financial perspective have been
eOO{=easee-decl'e~~~d from 18 to &11. _Measures lIREler the Finaootal-r~tive hav-e----been
H~e-va-lH-ateEhv-i-t:fl----twe___ge_als in mi~ette-t!--iiligfl-the----meastlfes--witMhe---rev-isee objeotives
ane 2) to foetlS-oH-k:e-y;fle-a8-ltre&-Ras~ Qn 1lLue~hack lIOOLlrnulAC, me.a...suring,.,utili1Y biJJs
ill?;Wnst !2t,b_e.1' nejghbOling or similar utilities will continue to be reJ1Q!i~.wITe~
mC.llsJ.!J'enLenLwilLbe-.eLone based on indiYld-®1 uti~service cOJJ1Qonents find llQLas ~ombined
hilL
}lase~LQ)) th~f.c~dbaQ]~ re..Q.eiY_erl fi·Qm..th~-.UAChwe will cQntinue to meJ:lS1!Le and reRQ!:t Financial
Str~ngth as Bond FilJa~~ and Debt Service Covera~. As reserves a~orted
l~<1,g~trclless....w __ c will.J1!2U@Prt them here.
;
Measllre_S-....J111der _Co..st Effectiv.e. ______ llnd. __ Efticient -----.are IrusleadinK aLdifferC;!.ll.Qe_L in utili1~
infTIlS1JJJ.Qlm:k,J!&Q.Ql.ll11lng~ces an~atorx direction mal\S: tbi~'=p:e of coml2fllis.Qi} I~ss
yalll~ble Su~lili' Cost Advantage wiIJ also not be retained as a...s...e.par£lte ~as.j.t __ 1yill
imPJLci!1~ be caRtUl'ed upder getai/e.d bill compJlris..on ~Jectr~ter and.gas,
Ahm Existing M..c.a~...N..QfJ'ransfer ill General Fund under RetUD1S to L.QllltDunitLwill c.ontinue
ill be. umnitored amLhe repol~nili!l~e "UniglLe Municimd Val.ue" cat~gQJ'LYnder ~
C.usmmer and Comn1JJ~'mective.
Page 7 of li!
STRATEGIES
. EXISTiNG UPDA.l'El)'
1. Operate distribution systems in a cost-1. Ensure a high level of system reliability in a
effective manner. cost effective and timely manner.
2. Preserve a supply cost advantage compared 2.
to the market price. ~Manage ,supply portfolio risk as per council ,., Streamline and manage business processes policy to I2rovide stable gas and electric rillks • .).
to allow CPAU to work efficiently and cost-to I2reserve a S1lPt2!y£Qst advanta~,)m.d tQ
effectively. ~anrutej)u.,sil1e.s.s,J~rocJi.£~ost effectlveJ~7 4. Deliver products and serviCes valued by our ,., Improve inter-and intra-departmental business .).
customers, and continue to build CPAU processes to reduce cost, improve efficiency
brand presence. and enhance information flow.
5. Attract and retain employees with critical 4. Provide low and stable rates, adequate.
skills and knowledge. reserves, and l1!:l~~Q..transfers to the General
6. Maintain stable General Fund transfers, and Fund.
maintain financial strength. S. Provide proactive, responsive and integrated
7. Implement programs that improve the communication to customers.
quality of the environment. 6. Provide targeted customer and environmental
programs and services.
7. Foster a productive workplace environment
that promotes safety, job satisfaction and self
improvement goals.
The strategies have been revised to specifically target the updated objectives and measures.
Existing Strategy #1, cost effective operation of the distribution system, is refocused to ensure a
high level of system reliability in a cost effective and timely manner. This is a key component of
achieving Objective # 1 and will be measured by the reliability measures identified above.
Existing Strategy #2 shifts the emphasis from readiness for the emerging competition in the
market place to ensuring adequate supply portfolio risk management. The s11.:atez);'_ statemenL~
now.nlQdified in I~SI2Qnse to feedlLack JronJ the l1~C to 12LQ..yld~111QL~,clarity and to be more
~Jllicit abQuLtbe. ~~ired outQQm~_J:t[Jlle intrn..d~~y-whichis.io ,lllilYid~s.1a~~a.nd
~e.ctric J:ll1es, to _pr~serY_e a suppJy cOllLillly.antgge..~.!LjI)_allilg~ine.ss pro~s.eLQQst
effective~
Existing Strategy # 3 continues to be an· important one in ensuring efficiency and lower cost of
doing business in delivering utility services.
Page 9 oflQ
Existing Strategy #4 has been revised to de-emphasize defensive posture in light of emerging
competition and it has been combined with Existing Strategy #7 to provide focused customer
service and environmental programs as the new Strategy #6.
Existing Strategy #5 is revised as updated Strategy #7 and takes into account the changes in the
marketplace. From targeting attraction and retention of employees with critical skills, it is now
focused on fostering a ,productive workplace environment that promotes safety, job satisfaction
and self improvement goals.
Existing Strategy #6, which targeted maintenance of stable General Fund transfers, and financial
strength in general, is now more focused as updated Strategy #4 to provide low and stable rates,
adequate reserves, and Q~ldK~ed transfers to the General Fund.
The updated list of strategies also has a new strategy, #5" created to explicitly recognize the
importance of customer communication in enhancing customer satisfaction. The new Strategy #5
also emphasizes the desire to provide a proactive and integrated communication to the
customers.
ATTACHMENTS
A: Updated Utilities Strategic Plan (for approval)
B: Updated Strategic Plan Measures (for approval) _
C: Updated Utilities Strategic Plan with Associated Tactics (for information only)
PREPARED BY:
REVIEWED BY:
DEPARTMENT HEAD:
Jpek Connolly
Resource Planner
Scott Bradshaw, Assistant Director
Tom Auzenne, Assistant Director
Girish Baiachandran, Assistant Director
JOHN ULRICH
Director of Utilities
Page 10 oflO
AttB: Updated Utilities Strategic Plan Measures
Measure Goal Measure Goal Measure
MeasurelD Measure Definition/Objective Commodity Proposed Statement Value Update
Benchmark Frequency
C1.
Annual
Customer Satisfaction Index Customer Satisfaction Index -to be developed All N/A TBD TBD
C2.
Customer Complaints -Trends Develop a system to track and report complaints by Semi
and Analysis type, fund, resolution etc. -Report on proposed All N/A TBD TBD Annual
measure
C3.1
Electric System Average Average electric service interruption minutes per Not Currently SAlOl not to exceed Semi Interruptible Duration Index-customer per year, YTD and estimated EOY projection Electric Benchmarked 60 minutes per SAlOl <60 Annual SAlOl customer per year
.
C3.2 Fewer than 2 gas
Gas frequency of service Average gas· service interruptions per utility customer Not Currently serviCe interruptions Semi
interruptions per customer per year, YTD and EOY projection Gas Benchmarked per customer per <2 Annual
year
C3.3. Fewer than 2 water
Water frequency of service Average water service interruptions per utility customer Not Currently service interruptions Semi
interruptions per customer per year, YTD and EOY projection Water Benchmarked per customer per <2 Annual
year
C3A
Meet Federal Limit spills to Semi CMOM CMOM Federal Regulations WasteWater Regulation Limit spills to <=2/yr <=2/yr Annual
--_.-..
Attachment B -Page 1 of 6
AttB: Updated Utilities Strategic Plan Measures
CUSTOMER MEASURES
MeasurelD Measure Definition/Objective Commodity Proposed Measure Goal Measure Goal Measure
Benchmark Statement Value Update
Frequency
C4.1 Adopted budget vs.
Accelerated CIP Electric Accelerate infrastructure replacement program to Electric NOT Currently the total expended or
reduce maintenance costs in future years Benchmarked encumbered. >=90% Annual
Complete 90% of
budgeted CIP
C42 Adopted budget vs.
Accelerated CIP Gas Accelerate infrastructure replacement program to Gas NOT Currently the total expended or
reduce maintenance costs in future years Benchmarked encumbered. >=90% Annual
Complete 90% of
budgeted CIP
C4.3 Adopted budget vs.
Accelerated CIP Water Accelerate infrastructure replacement program to Water NOT Currently the total expended or
reduce maintenance costs in future years Benchmarked encumbered. >=90% Annual
Complete 90% of
budgeted CIP
C4.4 Adopted budget vs.
Accelerated CIP Waste Water Accelerate infrastructure replacement program to Wastewater NOT Currently the total expended or
reduce maintenance costs in future years Benchmarked encumbered. >=90% Annual
Complete 90% of
budgeted CIP
C4.5 Maintain annual
transfers to the
general fund within
Transfer to General Fund General Fund transfer % change from prior year--NOT Currently City council Per budget:
maintain stable transfers to the General Fund All Benchmarked established Annual
guidelines, report on 3% increase
% increase or
decrease in transfers
from prior year
C4.6
Response to Local Report on Local Comprehensive Plan initiatives NOT Currently Offer 5 unique
Comprehensive Plan All Annual Benchmarked programs or services 5
per year
Attachment B -Page 2 of 6
AttB: Updated Utilities Strategic Plan Measures
ENVIRONMENTAL MEASURES
~j0i Measure
MeasurelD Measure Definition/Objective Commodity Proposed Measure Goal Measure Goal Update '::"-," Statement Value
I: Benchmark Frequency
k Meet Renewable 10% in 2008; Semi Renewable Portfolio Targets Renewable Portfolio Targets Identified in LEAP Electric PG&E andCA
,i: System mix Portfolio Targets 20% in 2015 Annual
~t' 3,000 res and
Palo Alto Green Participation Meet Green Program 135 nonres by Semi ~~~Z; Targets Green Program Participation Targets ~Iectric Maintain a place in PartiCipation Targets: 12/04; 3975 res Annual NREL Top Ten List 11.4 % by June 2005. and 160 nonres
by 06/05. ;1 "
Demand Side Efficiency Increase customer electric efficiency through demand Not Currently Semi Targets side efficiency programs including Public Benefits and Electric Benchmarked TBD TBD Annual Cost Effective DSM
Demand Side Efficiency Increase customer gas efficiency through demand side Not Currently , Semi Targets efficiency programs including Public Benefits and Cost Gas Benchmarked TBD TBD Annual ,-Effective DSM
I~ Demand Side Efficiency Increase customer water efficiency through demand Not Currently Semi
1'[-Targets side effiCiency programs including Public Benefits and Water Benchmarked TBD TBD Annual
I::' i,',; Cost Effective DSM
Attachment B -Page 3 of 6
AttB: Updated Utilities Strategic Plan Measures
PEOPLE MEASURES
f-t:i., I;" Measure Goal Measure Goal Measure
:.i-Measure ID Measure Definition/Objective Commodity Proposed Statement Value Update
Benchmark Frequency
.. :<:
fi~1 Less than industry Semi Safety Index OSHA Incidence Rate All (APPA, APGA, NTEO 0 Annual ,.;;:: AWWA) aver~ge rate
wi~ Gallup Q12 poll National Average -Maintain a Gallup
Annual. I Job Satisfaction Index All . Gallup Measure measure equal to or >3.62
:~ better than national i~ average: 3.62 -.J
Attachment B -Page 6 of 6
I
I
I
ATTACHMENT C
Utilities Strategic Plan -
Key Strategies and Tactics
MISSION I "Provide valued utility seryices to customers and dependable returns to the City. "
SUPPORTING OBJECTIVES
1. Enhance customer satisfaction...lli1dJJ1ilil'Linfh!structure.
2. Employ balanced environmental solutions.
3. Pllli'ide fakand l.:e.asooable returns to the City and competitive rates to customer~Jhrollgll
lmtl1icipaLmtn~slJiI2,Matlage-fi-tffiH€-ia-l-re5-fHlfSD. .cr, ,1,
4. Ensure a safe and engaged workforce.
KEY STRATEGIES, Years 2005-10
STRATEGY 1: Ensure a high level of system reliability in a cost effective and timely
manner.
STRATEGY 2: Manage supply portfolio risk as per council policyJ{L12royide stab~~
and electric rates. to--12.!'eSeI:.y'~_JL~ c...Qst advantage. and to mana~
bu..."i!J&s.s processes OOS1~ffectivel~.
STRATEGY 3: Improve inter-and intra-departmental business processes to reduce
cost, improve efficiency and enhance information flow.
STRATEGY 4: Provide low and stable rates, adequate reserves, and tblLdgeted_transfers
to the General Fund.
STRATEGY 5: Provide proactive, responsive and integrated communication to
customers.
STRATEGY 6: Provide targeted customer and environmental programs and services.
STRATEGY 7: Foster a productive workplace environment that promotes safety, job
satisfaction and self imQ..rovement _goals.
ATTACHMENT C
KEY STRATEGIES with TACTICS
STRATEGY 1: Ensure a high level of system reliability in a cost effective and timely
manner
A. Complete budgeted CIP projects as scheduled,
B. Flush and clean 12 million feet of sewer main per year.
C. Flush and clean 1/3 of the water system main lines each year.
D. Check and operate 1/3 of the main line water valves each year, replace or repair as needed.
E. Check and operate all Gas system Key valves each year, repair or replace as needed.
F. Check and operate all gas system valves once every 3 years, repair or replace as needed.
G. Complete the gas leak survey of the business districts once per year, leaks repaired (depending upon
grade) within specified time frames.
H. Gas leak survey 115 of the city each year, leaks repaired (depending upon grade) within specified time
frames.
I. Gas leak survey all bridges, railroad crossings and creek crossings each year, leaks repaired (depending
upon grade) within specified time frames.
J. Inspect all water reservoirs once every 3 years.
K. Maintain all traffic signal cabinets and lighting systems once per year.
L. Test all traffic signal battery backups monthly.
M. Continue the citywide undergrounding of utility wires. Minimize the impacts of under grounding on
street tree root systems and planting areas.
N. Continue with line clearing and vegetation management activities and meet the goal of9000 trees per
year that interfere with power lines.
O. Complete annual GO 95 and GO 128 inspections and make corrections by December of each year,
complete the G0165 report by the following February.
P. Evaluate transmission alternatives and implement physical, regulatory and legislative alternatives that
improve reliability.
Q. Evaluate the potential for small-scale distributed generation and demand-side measures to improve
distribution system reliability and power quality ..
STRATEGY 2: Manage supply portfolio risk as per council policy.JApJID.'.ide sillble gas and
electric rates, MbRre~£uJ2ply ~ost a<iYan1ag~. and tQ.1Uan.age. busin~proce..sse~G.Qst
~fectly~lY, .
A. Prepare a recommendation for policy-makers on the remaining elements of the WIRP not already
addressed in the Council-approved WIRP Guidelines. .
B. Comply with the Urban Water Management Planning Act by updating the City's UWMP/uWSCP by
December 2005.
C. Implement Council adopted long-term electric acquisition plan (LEAP).
D. Implement Local Generation Feasibility Study.
E. Develop efficiency goals and integrate efficiency into resource planning.
F. Work towards achieving Renewable Portfolio Standard goals of 10% by 2008 and 20% by 2015, and
review or revise those goals to meet customer needs and regulatory requirements.
G. Evaluate transmission alternatives and implement physical, regulatory and legislative alternatives that
reduce cost.
H. Implement Council adopted gas utility long-term plan (GULP).
I. Manage the electric and gas portfolio as per Council adopted recommendations and risk management
policies. .
J. Develop and implement annual regulatory and legislative goals by working individually and through
collaboration with BAMx, BA WSCA, NCPA, T ANC, and CMUA.
K. Monitor and influence cost structure of partner agencies such as NCP A, T ANC and BA WSCA.
2
ATTACHMENT C
STRATEGY 3: Improve inter-and intra-departmental business processes to reduce cost,
improve efficiency and enhance information flow.
A. IdentifY and map key business processes to eliminate waste, increase accuracy and minimize
complaints.
B. Ensure timely information related to preparing accurate budgets and financial forecasts.
C. IdentifY areas where technology would increase efficiency and implement.
D. Establish back-up systems for mission critical billing and communication system.
E. Evaluate and implement a CIS System.
F. Review and modifY bill presentation.
G. Design and implement a department-wide complaint tracking and response database.
H. Evaluate the integration of Automated Meter Reading, Advanced Metering. SCADA and Dark Fiber.
I. Evaluate SAP solutions for business process improvements.
J. Improve recordkeeping and tracking
a. Maintain and publicize Point-of-Contact numbers for customer problems
b. Update Blockfinder database and online search applications
c. Update customer phone number database and circuit mapping for the automated Porsche
Outage Notification system
K. Develop and maintain a centralized system of key administrative information for frequently used
templates and critical timelines
L. Review and update Service Level Agreements as appropriate.
M. Ensure timely interdepartmental communications at the manager level and above.
N. Coordinate major project initiatives with other City priorities (e.g. Alma Sub -Housing; Local
GenerationlESC/WQP; etc.)
STRATEGY 4: Provide low and stable rates, adequate reserves,and blldg~~dJransfers to
the General Fund
A. Explore SAP solutions in designing and implementing effective (user friendly) financial and other
reporting systems to include:
a. Budget -to-Actual reports for Operating and Capital Budgets for both labor and expenses.
b. Asset management in compliance with FERC requirements,
c. Revenue margin guidelines,
d. Review the use of allocated vs direct charges for charges for support services from other
departments and develop a methodology to track these charges and their impacts on the
financial health ofCPAU,
e. Develop a system to study, review, and authorize all budget transfers to other departments,
both for support s~rvices and other services.
B. Review the use of financial reporting tools such as income statements, balance sheets, and others for
drivers for decisions at the appropriate time within the appropriate ranges.
C. Establish and manage retail cash management policies that include credit policies, deposits, cycle
balance and working capital.
D. Evaluate and implement contractor damage cost recovery plans that encourage reduction in
occurrences.
E. Implement changes to rates and reserves policies as necessary.
F. Monitor and pursue outside funding opportunities to leverage City resources
3
ATTACHMENT C
STRATEGY 5: Provide proactive, responsive and integrated communication to customers
A. Maintain ongoing and effective customer communications in the service areas of:
a. Red Tags
b. Tum-ons and Turn-offs
c. Unscheduled Service Disruptions
d. Planned Shutdowns
e. Changes in Water Quality
B. Enhance ongoing and effective internal and customer communications:
a. Communicate CIP plans
b. Communicate CIP construction schedules and status
c. Communicate long-term resource plans
d. Engage the public on major initiatives (PP/reservoirs/intertie/water and electric rates)
e. Promote visibility in the community through public speaking opportunities at neighborhood
groups, service groups, etc.
f. Develop and implement a plan to improve reliability perception ,
g. Create New Customer "Welcome Packet"s for Residential and Business customers
C. Implement and evaluate targeted customer communications:
a. Website
b. Email list serve
c. Promotional events
d. Bill stuffers and UCAs
e. Program materials
f. Form letters to customers
g. Customer Satisfaction Surveys
h. Required annual notifications: Water quality notifications, Gas safety, Call Before You Dig
i. Brand awareness campaigns
4
ATTACHMENT C
STRATEGY 6:Yrovide targeted customer and environmental programs and services
A. Continue providing high quality Key Account Services
B. Expand Low Income Assistance Program
C. Provide integrated energy and water efficiency programs
D. Continually evaluate and revise forecasts for electric power demand. Pursue adequate low cost
supplies to meet this demand by participating in cost-effective programs offered by Northern
California Power Agency (NCPA) or other suppliers and marketers of energy.
E. Work individually and through partner agencies such as SCVWD, NCPA, CMUA, BA WSCA,
CUWCC to maintain and enhance efficiency and conservation program effectiveness
F. Monitor other utilities that successfully use alternative energy sources and seek funding for similar
projects that would be appropriate in Palo Alto
O. Support implementation of City's Sustainability Program
H. Support implementation ofthe.environmental components of the City's Comprehensive Plan
a. Continue providing staff support and technical assistance in energy conservation and demand
side management to architects, developers, and utility customers.
b. Regularly review the water rate structure to ensure that it encourages efficiency and is
competitive.
c. Maintain citywide water conservation and efficiency programs for all customer classes .
. d. Where practical, incorporate federal, state, and other agency policies and standards for water
efficiency into City codes, regulations, and procedures.
e. Implement incentives for the use of drought-tolerant landscaping and recycled water for
landscape irrigation.
f. Implement gas and electric rate. structures that encourage energy conservation and that are in
balance with other rate-making objectives, such as providing competitive rates .. Set rates to
achieve a balance between actual service costs, market prices, and the goal of promoting
conservation and efficient use. Continue to provide a baseline service rate.
g. Encourage establishment of public education programs addressing energy conservation and
efficiency.
h. Provide information and advice on the use of alternative energy technologies, including the
relative costs and benefits of different types of fuel to all customers.
1. Encourage the use of compact and well-designed utility elements, such as transformers,
switching devices, and back flow preventers. Place these elements in locations that will
minimize their visual intrusion
I. Work with the Santa Clara Valley Water District to identify and map key groundwatenecharge areas
for use in land use planning and permitting and the protection of groundwater resources.
J. Embrace Environmental Solutions: Invest in equipment, facilities and programs that reduce the
environmental footprint of providing utility services: increased efficiency, lower losses,
environmentally friendly materials and processes, and reduced environmental impact.
a. Use environmentally friendly materials for parts and equipment
b. Use less destructive construction,methods
c. Continue to support the Right Tree in the Right Place program
d. Continue to support the Shade Tree Program
e. Continue to stay up-to-date on current industry practices on ininimizing, mitigating negative
environmental impact
K. Evaluate fossil fuel efficiency and greenhouse gas impacts of thermal generation [per AB1478]
L. Develop the City Council approved fiber optic ring around the City as recommended in the 1996
Telecommunications Strategy Study and evaluate and implement enhancements to the system
a. Improve dark fiber billing, pricing and contract terms
b. Promote VOIP to hotels
c. Use dark fiber as AMR and advanced metering back bone infrastructure [and evaluate use for
SCADA or distribute resources monitoring and control even though it is not in the report?]
ATTACHMENT C
STRATEGY 7: Foster a productive workplace environment that promotes safety, job
satisfaction and self improvement goals
A. Maintain OSHA Reporting System and incent employees to adhere to safety regulations
B. Provide employees with ergonomics recommendations
C. Ensure all employees are aware of and implementing security procedures
D. Ensuring targeted safety meeting participation
E. Implement Phase II Gallup Q12 Program
F. Schedule quarterly communication from department/senior management to entire department (State of
the Department) [rotate divisions chairing meeting]
G. Ensure 100% involvement in Strategic Plan development [input and buy-in]
H. Develop interdivisional work teams for identified projects.
I. Track skills related training hours and dollars
J. Implement Career Development Actions
J .1. Career-day once per quarter / open house
J.2. Cross-training .
J.3. Shadow mentoring
K. Ensure an employees haveal~aI"lliI1Ka.nd~_eye1Qprnentplan
Attachment B
Excerpt from Utilities Advisory Commission Minutes of 01112/05.
Minutes approved on 2/9/05.
Dexter remarked that for the Carollo emergency plan, as an add on to that plan we asked
them to look at having that connection as an emergency alternative to us spending that
money but the answer came back it wouldn't full-fill that.
No other questions.
3. Utilities Updated Strategic Plan -Action
Ulrich introduced the revised update to the Utilities Strategic Plan (USP). Based on
UAC feedback staffre-worked the plan. Changes are noted in red. Ipek Connelly and
others have put a lot oftime into this report.
Dexter commended staff for the red lines which simplified review and thinks this is a
greatjbh. Melton echoed Dexter's comments. Thinks UAC comments were considered
and a fine job has been done.
Dahlen questioned environmental measure Number 3 under water quality -it's not in
the updated version, is it somewhere else? Ipek said we will continue doing this but we
were trying to be succinct in this plan and this will not be a measure.
" Bradshaw said it's the annual water report -State Water Quality Report. We are
required to do on an annual basis.
Customer Values unique value -don't keep local controJ? Girish directed group to
page 5 of 10 last sentences refers to local control in that way. Didn't specifically say
local control. Thought a person off the street could understand. , Sentiment is local
control.
Rosenbaum mentioned that he is pleased with financial measures, competitive rates.
We are going to compare our rates with Santa Clara. Noticed we plan to compare the
average gas bill to PG&E and Long Beach which is the only other municipal gas in
California (may be a couple of others).
They want to mirror So Cal <;Jas on how they buy ·gas for their customers. UTL buying
on a monthly basis from the soutp-.
Beecham said our goal is to flatten it out. PG&E and Long Beach will have ups and
?owns. A long-term average basis might tell us if our strategy is superior to theirs.
Balachandran said we have information going back to 1998 . We will try out ,several
scenarios to see what works.
Rosenbaum said on the actual water bill, we have been getting information. BA WSCA
and Cal Water which is a private wholesale of Hetch Hetchy. They are the largest
comparison we have. Balachandran thinks this would be a good start Rosenbaum asked
UAC Minutes -01/12/05 -Page 8 of 10
what is the BA WSCA average, is it an average of all cities? Balachandran said yes.
How would BA WSCA measure it? View since they have two sources. Balachandran
said we would look at both sources.
Rosenbaum asked for CalWater what rate would be recorded as a CalWater? Ulrich
said under CPUC jurisdiction, they explain where it is delivered in their territory.
Charge reflecting work done by the city that owns the pipe system, they' have a rate
schedule. Ulrich was reluctant to get into a great amount of detail.
Bechtel asked as part of our membership in BASWCA are we required to report
information to them on a monthly basis. His goal is to not create extra staff time.
Balachandran said information is there, purpose of this plan is to provide information to
our governing bodies and the public at large. We are trying to winnow-down measures
but that doesn't mean we will stop doing other comparisons. Ulrich said our reason for
doing the measurement is to show if we are meeting our goals in the USP. Don't want
to get into staff time getting into the details of comparison studies. Enough is enough to
measure it.
Dawes said previously it was too general and that is why we were asked for more
specificity. Bechtel asked that the quarterly report statistic the same where we report
more detail on other cities?
Dawes asked for a motion.
Rosenbaum moved that the UAC indicate to the City Council it approves the updated
Strategic Plan. Bechtel seconded.
Motion passed: Unanimous.
IX. NEXT REGULARLY SCHEDULED MEETING
February 9, 2005 -Council Conference Room
X. FUTURE HIGHLIGHTS
Possibly water to be scheduled.
XI. ADJOURNMENT at 8:35
Respectfully submitted,
UAC Minutes -01/12/05 -Page 9 of 10