To: Honorable Mayor and Members of Town Council
From: Mark Marlowe, P.E., Utilities Director
Title
Resolution Approving the Annual Update to the Town of Castle Rock Utilities Department Five-Year Strategic Plan (2014-2018)
Body
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Executive Summary
The purpose of this memorandum is to present Town Council with the annual update to the Utilities Department’s Five-Year Strategic Plan (2014-2018) (Attachment A) for approval and adoption. This memo summarizes progress on implementation of the Strategic Plan over the last year, priority items for the coming year, and the status of key performance indicators developed as a direct output of strategic plan implementation.
Progress on implementation of key tactics has been outstanding. Of the fourteen key tactics for implementation identified to Council in the Strategic Plan in 2015, thirteen have either been completed or are well under way. Key outcomes of the implemented tactics include:
• The Utilities team again reduced non-revenue water in 2015 going from 10.3 percent in 2014 to 9.6 percent in 2015, adding roughly $110,000 in revenues that would not have been realized in 2014.
• We continued to track the use of renewable water from our native Plum Creek supplies. Tracking indicated in 2015 and early 2016 the current alluvial wells were not physically capable of capturing all of our renewable water rights. Our team designed a solution adding new alluvial wells and upgrading existing alluvial wells. Utilities obtained Council’s approval to add three new alluvial wells and upgrade three others. The new capacity should come online in 2016 before irrigation season.
• Utilities completed an evaluation of an option to move reusable water supplies from the Plum Creek Water Reclamation Authority to storage in Rueter-Hess Reservoir. The option holds great promise as a cost effective way to fill up the storage we own in Rueter-Hess Reservoir with renewable water. In 2016, we will move forward on preliminary design of the selected option.
• Special charges were reviewed and updated to ensure that the costs of service for special services are applied only to the customers that need those services. Some of the charges were updated to correspond to the actual cost of the service. The result will be more equitable rates and fees, and the collection of additional special charge revenues where appropriate reducing pressure on overall rates and fees.
• Utilities completed an updated financial management plan approved by Council in 2015. Several action items from that plan have moved forward quickly, including recognizing $4,846,156 in deferred revenues associated with elimination of a reserve fee, which will have a benefit on rates and fees. Second, a financial advisor was brought on to work with us on identifying options to restructure our $64 million in variable interest rate Certificates of Participation (COP) debt. An option has been identified which will save rate payers around $17 million through 2037 relative top the assumed average interest rate of the variable rate COPs.
• Key performance indicators for 2015 relative to 2014 are shown in Attachment B. The KPIs show significant improvement in safety, cost of residential service and renewable water usage rate. There were slight decreases in roughly half of the KPIs but none of those were large changes that are cause for concern. Areas of focus form improving continue to be turnover rate, energy consumption efficiency and costs per million gallons.
Priority tactics have been added to the updated plan for 2016 taking into consideration last year’s accomplishments, updated master planning, the changing needs of our community and national trends in business and utility best practices among other considerations. The key tactics added for this coming year as well as those that have been maintained from last year are identified in Attachment C.
The Utilities Department established Vision and Mission have not changed and are presented below for context:
Vision: The Town of Castle Rock Utilities Department will be a national
leader among water utilities, focused on customer satisfaction and delivering outstanding quality and value.
Mission: We provide our community with exceptional service that protects
public health and balances social, environmental and fiscal responsibilities
in a sustainable manner.
The six major strategies put forward in the Strategic Plan continue to be relevant in this year’s update:
• Strategy 1 - Ensure long term water
• Strategy 2 - Utilize Town values to fulfill Utilities’ Vision and Mission
• Strategy 3 - Enhance customer satisfaction
• Strategy 4 - Maintain financial sustainability
• Strategy 5 - Optimize infrastructure performance
• Strategy 6 - Demonstrate industry leadership
Utilities will continue to provide an annual update to the Town Council on the progress and changes to the Five-Year Strategic Plan.
Budget Impact
Since the plan focuses priorities based on community priorities, previous master planning, and the 2016 budget process, Utilities does not expect any significant immediate budget impacts beyond what has been identified in the 2016 budget. The plan, as it is implemented, will continue to result in annual reviews of levels of service, corresponding staffing levels, operational resources, capital priorities, management of assets, and key performance indicators which will inform potential budget recommendations for the upcoming 2017 budget and beyond.
Staff Recommendation
Staff recommends approval of the 2016 annual update to the Town of Castle Rock Utilities Department Five-Year Strategic Plan (2014-2018).
Proposed Motion
I move to approve Resolution: Approving the 2016 Annual update to the Town of Castle Rock Utilities Department Five-Year Strategic Plan (2014-2018).
Attachments
Attachment A: Resolution
Exhibit 1: Strategic Plan
Attachment B: Key Performance Indicators Dashboard
Attachment C: Key Tactics