HomeMy WebLinkAbout2004-05-10 City Council (6)City of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER DEPARTMENT: UTILITIES
DATE:
SUBJECT:
MAY 10, 2004 CMR:246:04
UTILITIES STRATEGIC PLAN PERFORMANCE REPORT, JULY
2003 THROUGH DECEMBER 2003
This is an informational report and no Council action is required.
BACKGROUND
On May 21, 2001, the City Council approved the Utilities Sta’ategic Plan Implementation
Plan (CMR:223:01) and directed staff to make periodic progress reports on the
performance of the Utilities in meeting the objectives of the strategic plan. Staff
committed to update the Utilities Advisory Commission (UAC) and City Council twice
per year. This report is report #6.
Report t UACDate !
1
2
3
November 7, 2001
April 10, 2002
October 2, 2002
March 5, 2003
October 1,2003
March 3, 2004
Council Date CMR
February 4, 2002 129:02
May 13, 2002 235:02
November 12, 2002 432:02
April 21, 2003
December 1,2003
May 10,2004
214:03
526:03
246:04
Focus
Performance Measures
July 01 - February 02 Performance
March 02 - June 02 Performance and
Council-approved revisions
July 02 - December 02 Performance
and Balanced Scorecard
January 03 - June 03 Performance and
Balanced Scorecard
July 03 - December 03 Performance
and Balanced Scorecard
The attached March 3, 2004 report, covering July 2003 through December 2003, provides
key accomplishments and activities as well as key performance measures for each of the
strategic objectives. The report also includes discussion of the development of an overall
CMR:246:04 Page 1 of 4
°’balanced scorecard" approach to measuring and reporting the Utilities Department’s
pro~ess in achieving the Strategic Plan Objectives, and application of this measurement
methodology to identify and implement action plans to improve shortcomings.
BOARD/COMMISSION REVIEW AND RECOMMENDATIONS
The Utilities Strategic Plan performance report xvas discussed at the March 3, 2004 UAC
meeting. Comments were generally positive and indicated that the Commission felt that
staff is moving in the right direction. Key commission questions and comments are
summarized below with staff responses.
Can you explain the reason behind receiving a negative score for the business
customer perception of reliability performance score ?
The negative score received for this area is can-ied over from the prior report for the
period covering January 2003 to June 2003, and should have probably been reported
as a "0", indicating no change since the last report. The negative score received in
the prior report was a result of a bi-annual survey of California Businesses that RKS
conducted in the spring of 2003 of all California Municipal Utility (CMUA)
members. In the October UAC report, staff showed that, although overall CPAU
scores ranked higher than other California Munis and NCPA pool members in
general, Palo Alto business customers awarded CPAU a lower than average score in
reliability, based primarily on their recollection of how many service disruptions
and/or power quality interruptions they had experienced during the year. To
mitigate the negative score, CPAU developed an action plan, which includes
reporting the System Average Interruption Duration Index (SAIDI) in ~o ways:
with and without storm related outages. Doing so makes benchmarking against
other municipal utilities and California Investment Owned Utilities (IOU’s) more in
line with industry standards. Additional tasks listed under this action plan can be
found on page 13 of the March 2, 2004 Strategic Plan update report.
2.The safe workplace issue seems to come up in each update report. Is zero
accidents a realistic number to achieve for this performance measure?
The safe workplace will always show a negative score until the goal of zero
accidents is reached which staff believes will be difficult to achieve. Expectations
of a safe workplace, and working towards that by providing employees the proper
CMR:246:04 Page 2 of 4
tools and equipment, training, and an environment is conducive to a safe work
environment.
In the Financial Perspective, under the cost-effective and efficient heading, staff
only reports on the number of customers per employee for the electric utiliOa Is
there a reason why the same cannot be reported for the gas and water utilities?
Although similar data for water and gas is available, currently staff is not aware of
any industry benchmarks that can be used to compare CPAU’s customers per-
employee ratios for water and gas for this performance measure. Staff will begin
reporting this ratio for all commodity customers, and for the time being there will
only be a comparison shown for the electric utility, as there is an APPA
benchmark that is updated annually that can be used.
4.It would be useful to include the prior period’s performance scores in the
Balanced Score Card tables to measure progress.
A colunm will be added to the Balanced Score Card tables to show the prior
period’s performance scores beginning with the October UAC update report.
5.Why is CPAU’s customer accounting ratio so much higher than that compared to
the benchmark?
The customer accounting ratio measures the average expenses incurred by the
utility in handling each customer’s account, and include the costs of obtaining and
servicing all retail customers. These costs include but are not limited to costs of
labor, material, advertising, billing, collections, records, handling inquiries and
complaints, meter reading, and uncollectible accounts expenses.
Part of the difficulty in coming up with an accurate ratio on the electric side, for
example, is separating all of the complex customer account costs in CPAU’s
financial statements that are otherwise co-mingled between the three commodities
of electric, gas and water. This is easier to do when the utility is providing only
one or two commodities.
CMR:246:04 Page 3 of 4
6.Can you briefly explain what the City facilities efficiency improvements measure is
and why it is being transferred to Public Works?
The fact that the activities described in this performance measure are being
transferred to Public Works does not mean that the City is giving up its energy
efficiency efforts, rather the utility has stopped being the prime driver for such
efforts. During the height of the energy crisis, CPAU participated with the City’s
General Fund to identify and capture fairly sigaaificant amounts of energy savings,
and sponsored many improvements across 69 City buildings through the Public
Benefits Pro~ams or through state funds. The remaining work is fairly technical
opportunities, best handled by the Public Works Department.
RESOURCE IMPACT
This report has no direct resource impact.
POLICY IMPLICATIONS
This report supports the existing Council-approved Utilities Strategic Plan (CMR 432:02)
and Utilities Strategic Implementation Plan (CMR:223:01).
ATTACHMENTS
A:March 3, 2004 UAC Report.
B:Minutes from UAC Meeting March 3, 2004
PREPARED BY:
DEPARTMENT HEAD:
CITY MANAGER APPROVAL:
Taha Fattah
j~. l~~[~.Ri~~~x_Seni°r ~arket Ana~
?~,~ctor of Utilities
Assistant City Manager
CMR:246:04 Page 4 of 4
MEMORANDUM
TO:UTILITIES ADVISORY COMMISSION
FROM:UTILITIES DEPARTMENT
DATE:
SUBJECT:
MARCH 3, 2004
UTILITIES STRATEGIC PLAN PERFORMANCE UPDATE
REPORT COVERING JULY 2003 THROUGH DECEMBER 2003
REQUEST
This report is the semi-animal update on the Utilities
Comlnission’s information only. No action is necessary’.
SUMMARY
Strategic Plan and is for the
The City of Palo Alto Utilities (CPAU) overall "Balanced Scorecard" for the period
beginning in July 2003 and ending in December 2003 is shown in Figure 1. CPAU has:
1. exceeded goals in most categories
92. achieved significant progress on October _00~ Action Plans
3. developed Action Plans for all negative rankings in this update
UAC March 3, 2004: Strategic Plan 3/3/04 Update Page 1 of 17
Figure 1:
Utilities Balanced Scorecard By Objective, July 2003 - December 20031
"CPAU exceeds goals in most categories"
A. Customer & Community
1.Customer Satisfaction (+) N//C
2.Reliability +
3.Unique Municipal Value +
:2 Re~ew~Ne~
5 Returns ,o C0mmunitv 0
1.Safety
2.Attract & Retain TBD
3.Train & Develop TBD
4.Gallup (÷) N/C
This report consists of two parts. The first part discusses CPAU perfomaance under each
Balanced Scorecard category. For this reporting period 38 out of 51 performance
measures have been updated. The second part of this report presents Action Plans for
performance measures in which unfavorable scores were achieved.
1 Exceed Goal "’-", , Achieve Goal "0".. Fail in achieving Goal "-", N/C no chan~e~ since last
update, TBD goals to be determined.
Within each perspective, CPAU applies objective measures to determine whether CPAU
achieved pre-determined goals. Attachment B, Balanced Scorecard Measures Summary, provides
a cross-reference relating each of the 4 perspectives to specific performance measures. The (+)
"plus", (0) "zero", or (-) "minus" in each of the four categories indicates the average overall
performance score achieved for the period being reported. "N/C" indicates no change since last
report and the previous score is shown bem, een parentheses. "TBD" indicates that staff
continues to evaluate benchmark goals for a performance measure It should be noted that the
Perspectives are presented in no particular order, i.e. they are not arranged in order of importance
and no single item is weighted more heavily than another.
UAC March 3, 2004: Strategic Plan 3/3/04 Update . Page 2 of 17
BACKGROUNI)
On November 13th, 2000 the Palo Ako City Council (Council) approved the Utilities
Strategic Plan [CMR 418:00] and directed the City Manager to remm to Council with an
implementation plan at a future date.
On May 21, 2001, Council approved the Utilities Strategic Implementation Plan
[CMR:223:01 ] and directed staff to make periodic progress reports on the performance of
the Utilities in meeting the objectives of the strategic plan. Staff committed to update the
UAC and City Council twice per year about the performance of Utilities.
The first strategic plan performance report was presented to the UAC in November 2001,
and to City Council in January 2002 [CMR:129:02]. This initial report focused on
performance measures. Council indicated a desire to be presented with a discussion of
activities. This report provided key accomplishments and activities as well as key
performance measures for each of the strategic objectives. The report also included
discussion of recommended modifications to the Utilities Strategic Plan in order to adapt
to the changing utility industry environment.
The next update was provided to the Commission in April 2002. In October 2002, the
UAC was presented with another Strategic Plan Performance Report. Proposed changes
to the Strategic Plan were unanimously recommended by the UAC. City Council
approved the revisions in the Strategic Plan Performance Report in November 2002
(CMR 432:02). The Utility Strategic Plan is included in this report as Attachment A.
On March 5, 2003, the UAC approved the "balanced scorecard" approach presented by
staff as the method to set targets and to present the semi-annual strategic planning
performance measurement
On October 1, 2003, the UAC received the first semi-annual Strategic Plan Performance
update report, which 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.
On December 1, 2003, the City Council received its first semi-annual Strategic Plan
Performance update report (CMR:526:03), which included the 51 performance measures
chosen for the Balanced Score Card for the period January 2003 through June 2003.
UAC March 3, 2004: Strategic Plan 3/3/04 Update Page 3 of 17
DISCUSSION
I.Utilities Semi-Annual Balanced Scorecard
The Balanced Scorecard tracking methodology was chosen to assist in
performance measurement and to promote a better understanding of CPAU’s
strategic business processes on a semi-annual basis. Even though each perspective
and category in the above Balanced Scorecard was examined for alignment with
the Strategic Plan, not all measures can be updated on a semi-annual basis, either
because updated data is not available at the time the report is prepared or the data
is updated on a calendar year basis only (or longer).
Staff noted in earlier reports that the scorecard will evolve over time and respond
to changes in the business climate, with potentially new performance measures
added and others modified or completely dropped out. Utility managers meet on a
periodic basis to review the overall Strategic Plan to evaluate and revise the
objectives, strategies, tactics and measures to align the Strategic Plan with the
changing environment and priorities. There are no proposed changes to the
Strategic Plan at this time. Recommendations for any changes to the Strategic Plan
will be presented to the UAC in a future report.
UAC March 3, 2004: Strategic Plan 3/3/04 Update Page 4 of 17
A. Customer and Community Perspective: Three categories are measures in this
perspective, namely customer satisfaction, reliability and unique municipal value.
Customer Satisfaction
Residential Customer Satisfaction Index (RCS)
(see Note 1)
Business Customer Satisfaction Index (BCS)
(see Note 1)
Gap Analysis
Reliability
Residential Customer Perception - reliability
(see Note 1)
Business Customer perception - reliability
(see Note 1)
System Average Interruptible Duration Index, (SAIDI)
Service Interruptions per customer- Gas
Service Interruptions per customer - Water
Unique Municipal Value
Maintain local control
Accelerated CIP - Electric
Accelerated CIP - Gas
Accelerated CIP - Water
Public benefit and DSM program offerings
City facility efficiency
(see note 2)
Notes:
(+)
(+)
+
(+)
(-)
+
+
+
N/C
N/C
N/C
N/C
÷
(+) N/C
1.The residential Customer Satisfaction Index (RCS) and the Residential
Customer perception measure of reliability are obtained from the CMUA
Residential Benchmark Survey of California Customers. The survey will be
conducted in the Fall of 2004 and the updated Index will be reported in the
October 2004 report. Sin~ilarly, the business customer survey will be
conducted in Fall 2005 and the BSC index will be updated in the October
2005 update report.
2.This measure will be suspended as the project responsibilities have been
transferred to Public Works.
UAC March 3, 2004: Strategic Plan 3/3/04 Update Page 5 of 17
To measure customer satisfaction in the Customer and Community perspective,
three indices serve as useful indicators of achieving strong customer satisfaction.
These are the Residential Customer Satisfaction Index, the Business Customer
Satisfaction Index and the Customer Service Gap Analysis, which is the difference
between customer reported utility performance and customer expectations. The
first two will be updated and reported on as planned in Fall 2004 and Fall 2005,
respectively. Service reliability is measured in terms of service interruption
minutes per customer per year. CPAU’s reliability measures were on target for
this reporting period. The value of local municipal ownership includes unique
Public Benefit and Demand Side Management program offerings, as well as
accelerated infrastructure replacement programs to minimize maintenance costs in
the future.
1.CPAU has implemented several projects, which include a Public Art
Component of the Electric Public Benefits Program, the Shade Tree
Program, the Energy Visualization Project (using hafrared thermography as
an efficiency evaluation too!), the Efficiency Curriculum Support for the
Palo Alto Unified School District, and the Utility support of the
"Sustainable Schools Program" of the Palo Alto Unified School District.
2. The accelerated infrastructure replacement programs in the water utility and
electric utility started off slow but are expected to end the year on target. In
the water utility the delay was due to the Phase 1 Environmental Impact
Statement changes implemented. In the electric utility, the delay was due to
contractual issues with the local telephone company, SBC, on Underground
District #38.
3. The City facilities efficiency improvements measure will be dropped from
the Balanced Scorecard Measures following this update report as the
Project responsibilities for this measure have been transferred to the Public
Works Department.
UAC March 3, 2004: Strategic Plan 3/3/04 Update Page 6 of 17
B. Environment Perspective
In the Environmental perspective energy efficiency,
and water quality are main categories measures.
renewable implementation
UAC March 3, 2004: Strategic Plan 3/3/04 Update Page 7 of 17
1.Utilities will continue to provide Public Benefits and Demand Side
Management Program offerings specific to its customer sectors such as the
new ~Palo Alto Green" program which has 1,840 participants and has
exceeded its objective target of 1,250 participants.
2. CPAU will implement the Long-term Electric Acquisition Plan (LEAP)
beginning in FY 2003-04 to manage the City’s electric supply portfolio by
securing energy supplies for CPAU customers, including an aggressive
20% renewable portfolio by 2015.
3. CPAU will adopt the new "CMOM’’2 federal regulations by July 1, 2004 as
the new performance measure for wastewater efficiency. Specific goals for
this performance measure will be implemented by the next update report in
Fall 2004.
2 CMOM stands for the US EPA’s Capacity, Management, Operations, and Maintenance regulations.
UAC March 3, 2004: Strategic Plan 3/3/04 Update Page 8 of 17
C. Financial Perspective
In the Financial perspective, competitive rates, financial stren~h, cost-
effectiveness and efficiency, supply cost advantage and returns to the community
are the main categories measured.
Average combined Commercial Nlls Local Muni’s & IOU’s
AVerage combined Industrial bills LoCal Muni’s & IOU’s
+
+
+
Electric reserves
Gas reserves
Water reserves
Cost-effective & Efficient
customer Accountln= Ratm - Electric
O&M costs per circuit mile = Electric
On-budget performance - electric
+
+
÷
TBD
+
".4-
+
+
,-4-
.+
Supply Cost Advanta~e~
Electric commodity costs VS PG&E and local Muni’s
Gas Cormnodity costs
TBD
TBD
UAC March 3, 2004: Strategic Plan 3/3/04 Update Page 9 of 17
Rate comparisons may also be found in the Utilities Quarterly Reports. Rate
comparisons to other electric generating suppliers besides PG&E (i.e. Santa Clara)
have not yet been implemented into the Balanced Scorecard process. However,
NCPA completed an electric retail rate comparison study including NCPA Pool
member utilities and PG&E using information collected from EIA Form 861 for
2002,which shows that Palo Alto’s rates continue to be the lowest among this
group. NCPA results are provided in Attachment C.
1.CPAU has attained the goals set for all the performance measures updated
for this reporting period.
UAC March 3, 2004: Strategic Plan 3/3/04 Update Page I0 of 17
D. People Perspective
To measure progress in the People perspective, CPAU measures safety, attraction
and retention of employees, training and development and implementation of
Gallup plans.
Safety
Safe workplace -
Safety education +
(see Note-1)
Attract & Retain
Compensation
(see Note 2)
Employee tenure
Retirements
(see Note 3)
Eml~
TBD
0
TBD
TBD
Train & Develop
Employee training and development
(see Note 5)
GalluE
Job Satisfaction Index
(see Note 6)
TBD
(÷) N/C
Notes:
2.Staff is working with the Human Resources Division to benchmark
compensation plans with other local Muni’s.
3. Staff continues to work on this area and will develop a ptan to mitigate the
expected increase in employee retirees in the coming few ?’ears. An update
will be presented in the he:~t update report
4. Staff is @orking with the Hmn~n ResoUrces Division to examine the employee
turnover ratio and an update will be presented in the next report.
against industlT standards for the next report
The second Gallup sur~,ey will be conducted in Spring 2004. The Index for
utilities will be rei~orted in the next update report.
UAC March 3, 2004: Strategic Plan 3/3/04 Update Page 11 of 17
CPAU compares the rate of OSHA (the Federal Occupational Safety and Health
Act) incidents against other utilities, examines the employee turnover rate, tracks
training and development and focuses on building a stronger workplace program
based on the results of the Gallup Q12 survey. Staff is working with the Human
Resources Division to examine the employee turnover ratio, deve!opment and
training, compensation, and tenure and an update on these measures wilt be
addressed in the next update report.
1.The number of OSHA recordable accidents decreased during this reporting
period from the previous report of 8 (the previously reported number of
OSHA reportable incidents in the October update report of 10SHA
incident for the period January 2003 through June 2003 was incorrect)
incident to 7 incidents, making it necessary to assign a score of (-) minus to
this performance measure.
2. During this reporting period, CPAU experienced 3 separate water quality
incidents that were reported to the Department of Health Services, and all
three incidents were related to failure to meet the control range of optimal
fluoride levels (fluoride overfeed) due to equipment failure within a flow
meter at a water station. All of the reported incidents occurred prior to the
new chloramine guidelines.
UAC March 3, 2004: Strategic Plan 3/3/04 Update Page 12 of 17
Previously Reported Action Plans from October 2003 Update Report
October 2003 Action Plan 1" Improve electric reliability perception of business customers
(Measure: A2. Customer & Community, Reliability)
In Spring 2003, RKS conducted its bi-annual survey of California Businesses on behalf
of all of the California Municipal Utility (CMUA) members. Although overall CPAU
scores ranked higher than other California Munis and NCPA pool members in general,
Palo Alto Business customers awarded CPAU a lower than average score in reliability in
the survey, based primarily on their recollection of how many service disruptions and/or
power quality interruptions they had experienced during the year.
Proposed Actions:
1. CPAU will begin to report its SAIDI excluding storn~-related outages for
benchmarking purposes with APPA member Muni’s and California IOU’s.
2. Staff will continue to focus efforts on replacing and maintaining the aging
infrastructure and improve reliability by devoting significant funding to
maintaining the reliability of service to its business and residential customers
3.CPAU will implement an interactive online link with its customers
4.Continue Customer Service Call Center monitoring of call response times to
ensure prompt attention to customers
Update:
1. CPAU’s SAIDI (excluding storm-related outages) meets the internal performance
goal proposed for the reporting period of less than 60 minutes per customer.
Updated APPA and California Muni benchmark data was not available for
comparison for this reporting period, and the comparison will be included in the
Fall 2004 update report.
2. Through its CIP program for system reconstruction and improvements, the
Electric Utility is devoting significant funding to maintaining the reliability of
service to its business and residential customers. The increase in CIP funding
from FY 2002/03 is approximately 2.4%.
3. Customer Web Access (CWA) was implemented in October 2003 to all interested
CPAU customers. The free service provides utility customers with historic utility
consumption data, allows customers to pay their monthly utility bill online, and
includes an online link for customers to correspond by email with a customer
service representative.
4. The Customer Service Call Center responded to 96% of all calls. The internal
goal is to respond to at least 95% of calls. There were 6 percent less calls made to
the call center compared to the same period one year prior.
5. A follow-up survey will be conducted in Fall 2005 and the results will be
reported in the Fall 2004 update report to assess any change in business customer
perception about the reliability of their electric service.
UAC March 3, 2004: Strategic Plan 3/3/04 Update Page 13 of 17
October 2003 Action Plan 2: Promote a safe workplace for all employees, reduce OSHA
Incident Rate to ~0" (Measure: D1. People, Safety)
Safety activities play an important role in achieving the mission and objectives of the
Utilities Strategic Plan. Proper safety equipment, training activities, and statistics are
monitored and reported on an ongoing basis. Although OSHA recordable injuries
dropped in number since the last report, the fact that a goal of "0" reportable injuries was
not achieved made it necessary to assign a score of (-) minus to this performance
measure.
Proposed Actions:
1. CPAU will continue to conduct mandatory monthly safety meetings on subjects
related to office and fieldwork safety.
2.A new performance indicator to measure staff attendance at the monthly safety
meetings will be used across all Utility Divisions to enhance staff participation.
Update:
1. One safety standard established requires all unexcused Engineering and
Operations (E&O) staff shall attend all mandatory monthly safety. Staff
attendance for this reporting period for all E&O staff was 99%.
2. The E&O Division adopted a work planning process, which is intended to assist in
identifying and evaluating job site hazards. All jobs must be pass through this
process prior initiating work. Supervisors will continue to be held accountable for
identifying trends or problems and taking action.
October 2003 Action Plan 3: Provide programs and services to meet customer interests
(Measure: A1. Customer & Community, Gap Analysis)
Among various programs and services asked of business customers in the CMUA 2003
Statewide Survey of California Businesses, most reported interest in having the ability to
view electricity usage on their utility’s website followed closely by green energy
programs.
Proposed Actions:
1. In response to these interests, in FY 2003/2004 CPAU customers will see the
launch of a host of new customer services over the internet including "My Utilities
Account" to enable customers to pay their utility bill and view their account and
billing information on-line, Automated Meter Reading for remote meter reading,
and 15 minute interval consumption data for load profiling and usage analysis.
2. In addition, the new "Palo Alto Green" program offers "new" renewables (as
defined by the California Energy Commission). This program had achieved 90%
of its goal as of the previous update report.
Update:
UAC Marcia 3, 2004: Strategic Plan 3/3/04 Update Page 14 of 17
1.Selected Key and Major electric customers have the ability to view 15-minute
interval consumption data for load profiling and usage analysis on the web. The
criteria for being selected for this program are the availability of a dedicated
telephone line and a revenue meter with a built in modem.
2. The number of participants in the Palo Alto Green Program has surpassed the
annual goal of 1,250 and as of this report the number of participants is somewhere
around 1,765 customers.
3. An RFP to solicit bids for Automated Meter Reading (AMR) will be issued in
March 2004, and a contract for implementing AMR is expected to follow in FY
04/05.
March 2004 Action Plans for unfavorable scores received for the report period
startin~o in July 2003 and endin~ in December 2003:
Staff developed the accompanying action plans, which reflect recommendations and
actions to mitigate the unfavorable scores received for the current performance-reporting
period.
March 2004 Action Plan 1: Promote a safe workplace for all employees, reduce OSHA
Incident Rate to "0" (Measure: D1. People, Safety)
The number of OSHA recordable accidents decreased during this reporting period from
the previous report of 8 incident to 7 incidents; however, the fact that a goal of "0"
reportable injuries was not achieved made it necessary to assign a score of (-) minus to
this performance measure.
To mitigate the low scores received for this reporting period, CPAU will implement the
following action plans:
1.Continue to conduct mandatory monthly safety meetings on subjects related to
office and fieldwork safety.
2.Continue to measure staff attendance at the monthly safety meetings across all
Utility Divisions to ensure staff participation.
3. On the Operations side of the utility, institute a hazard evaluation and control
guideline to provide a systematic approach for evaluating hazards, prioritizing
hazards, and controlling hazards identified in the work environment.
4. To identify patterns or trends related to hazardous condition reports, near miss
incidents, automotive incidents, incidents involving specific injury or illness,
infractions found during inspections, incidents involving third parties, material
problem reports, equipment failure and contractor incidents, Supervisors will
identify trends or patterns so that specific actions can be taken to reduce the
likeliness of reoccurrence.
UAC March 3, 2004: Strategic Plan 3/3/04 Update Page 15 of 17
March 2004 Action Plan 2: Maintain high water quality through operation, monitoring
and testing of the system to achieve zero Title 22 reportable incidents (Measure: B3.
Environment, Water Quality)
During this reporting period, CPAU experienced 3 separate water quality incidents that
were reported to the Department of Health Services, and all three incidents were related
to failure to meet the control range of optimal fluoride levels (fluoride overfeed) due to
equipment failure within a flow meter at a water station. All of the reported incidents
occurred prior to the new Chloramine guidelines. To avoid similar problems in the future,
preventative measures have been implemented to the daily operations of the water
distribution system.
March 2004 Action Plan 3: Maintain gas commodity costs per gas therm at least 10% less
than PG&E on a rolling average 36-month basis (Measure: C4. Financial, Supply Cost
Advantage (Gas))
To mitigate the low score received for this reporting period, CPAU will implement the
following action plan:
The gas laddering strate~ resulted in a 36 month rolling average gas cost being
6% less than PG&E versus the benchmark of 10% less. Staff has revised the gas
laddering strategy (presented to the UAC in January 2004) and no further changes
are currently contemplated.
March 2004 Action Plan 4: Complete 90% of budgeted CIP for infrastructure
replacement program to reduce maintenance costs in future years (Measure: A3.
Customer & Conamunity, Accelerated CIP (water) infrastructure replacement program to
reduce maintenance costs in future years)
UAC March 3, 2004: Strategic Plan 3/3/04 Update Page 16 of 17
To mitigate the low score received for this reporting period, CPAU will implement the
following action plan:
The CIP for the accelerated Water Study was delayed due to senior management
and council direction to redo Phase I of the Water Storage Project to include EIS
work for the complete project. The contract is being amended. By next report we
plan to be approximately 50% complete with Phase I consulting and design work.
CPAU has reduced next year’s CIP budget by about $2.2 million in order to catch
up on spending, and expects to be back on track by the end of the 04/05-budget
year.
March 2004 Action Plan 5: complete 90% of budgeted CIP for infrastructure replacement
program to reduce maintenance costs in future years (Measure: A3. Customer &
Community, Accelerated CIP (electric))
To mitigate the low score received for this reporting period, CPAU will implement the
following action plan:
1.The project to underground district 38 (UG-38) was delayed due to SBC not
agreeing to honor the previous joint trench agreement with PacBell. This issue has
been resolved, and UG-38 will start construction next week. In the future all
agreements with undergrounding partakers will be in place as part of the design
process. By the end of the 04/05 fiscal year UG 38 should be constructed and UG
39 and 40 under construction.
ATTACHMENTS
A: Utilities Strategic Plan
B: Balanced Scorecard Measure/~Sm~nary Tables
C: NCPA Member Rates Ve/~s Cun’e~}\~.,,Gf&~Rates
Taha Fattah
Senior Utilities Market Analyst
REVIEWED BY:
DEPARTMENT HEAD:
Scott Bradshaw, Assistant Director
Tom Auzenne, Assistant Director
Girish Balachandran, Assistant Director
D~r or of Utilities/ /
UAC March 3, 2004: Strategic Plan 3/3/04 Upd~, te /Page 17 of 17
ATTACHMENT A
Utilities Strategic Plan*
MISSION
"To build value for our citizen owners to provide dependable returns to the City and citizens of
Palo Alto and to be the preferred fidl service utilita, provider while sustaining the environment. "
SUPPORTING OBJECTIVES
1. Enhance customer satisfaction by delivering valued products and services.
2. Invest in utility infrastructure to deliver reliable service.
3. Provide superior financial performance to the City and competitive rates to customers.
4. To identify and maintain the unique advantages of municipal ownership.
KEY STRATEGIES, Years 2001-06
STRATEGY 1: I Operate distribution systems in a cost-effective manner.
STRATEGY 2:
STRA TEG Y 3:
STtL4 TEG Y 4."
STRATEGY 5.
STRATEGY 6."
STRATEGY 7." I
Preserve a supply cost advantage compared to the market price.
Streamline and manage business processes to allow CPAU to work efficiently
and cost-effectively.
Deliver products and services valued by our customers, and continue to build
CPAU brand presence.
Attract and retain employees with critical skills and. knowledge.
Maintain stable General Fund transfers, and maintain financial strength.
Implement programs that improve the quality of the environment.
KEY STRATEGIES with TACTICS
STRATEGY 1: Operate distribution systems in a cost-effective manner.
A. Accelerate the capital improvement program to reduce maintenance costs in later years when
competition may become more intense.
B.Develop multi-year supplement contracts with local contractors to reinforce staffs installation of new
water, gas, and wastewater services.
C. Provide customized reliability solutions to meet customer needs.
D. Identify and implement measures to reduce the frequency of contractors accidentally rupturing, mains.
STRATEGY 2: Preserve a supply cost advantage compared to the market price.
A. Explore alternative supply methods and projects to control the cost of electric, gas, and water
commodities to meet existing and future customer needs.
t3.Investigate partnerships, alternative sources, and projects to secure low cost, reliable transmission for
commodity supplies.
C.Manage exposure to energy commodity price risk.
D.Enhance wholesale revenues through optimization of contractual rights for transmission and
generation.
E. Work through partner agencies such as BAWUA, TANC and NCPA to become a more effective voice
for our mutual benefit.
STRATEGY 3: Streamline and manage business processes to allow CPAU to work efficiently & cost
effectively.
A.Develop, execute, and monitor service level agreements with other City Departments.
B.Review the Municipal Code for governance and organization changes, which could improve Utilities
communication and success.
C.Examine outsourcing for cost-effective opportunities.
D.Support City effort to streamline budget, administrative, and regulator3, processes.
E.Protect customer confidentiality to the greatest extent possible, as allowed by governing law.
F.Track and evaluate other departments’ charzes to Utilities accounts.
ATTACHMENT A
STRATEGY 4: Deliver products & services valued by our customers and continue to build CPAU brand
presence.
A.Reliability services
B.Convenient customer bill payment and self-service options consistent with "e-government" tactics
C.Energy and water efficiency, information and control services
D.Installation and maintenance services
E.Commodity products
F.Telecommunications products
G.Special Facilities and metering options
H.Explore technical and financial assistance, and standards for customers who wish to install distributed
generation equipment
I.Provide 24 x 7 field customer service
STRATEGY 5: Attract and retain employees with critical skills and "knowledge.
A. Offer compensation and benefit packages that are competitive with private industry and consistent with
the local markets.
B.Evaluate hiring practices to allow the Utility to respond to a competitive environment.
C.Promote a safe and drug free work place.
D.Evaluate establishing apprenticeship and recruiting programs.
STRATEGY 6: Maintain stable transfers to the General Fund.
A.Maintain reserves within established guidelines.
B.Balance transfers between enterprise funds to provide flexibility.
C.Maintain bond-financing ratings and consider it to fund major projects.
D.Optimize the economics of buying rather than leasing property.
E.Complete the work order cost system.
F.Create performance measures and establish budaetar), and cost monitoring tools.
STRATEGY 7: Implement programs that improve the quality of the environment.
A.Support implementation of the environmental components of the City’s Comprehensive Plan.
B.hnprove existing green pricing program.
C.Support implementation of the City’s Sustainability Program.
D.Support investment in future green resource projects.
E.Implement Public Benefits and demand side management programs.
F.Provide sustainabitity life cycle cost analysis to Palo Alto customers.
G.Enhance conservation.
*As approved by City Council in November 2002, CMR 432:02
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