In 2012, Jim Proce and team completed a evaluation and assessment of the Rowlett Utility system and provided the attached presentation to the City Council for consideration for a rate increase to cover unfunded expenses for repairs, maintenance and on-going planning for expansion and growth.

1. Jim Proce, ICMA-CM, PWLF, MBA

2. Agenda…
 Service area
 State of the system
 System components
 Evaluation of Division
 Challenges of the system
 Issues identified
 Deficiencies identified
 Strategies/actions
 Show and tell along the way
 Questions/answers

4. How is Utilities Funded?
 The Water Utilities
Operations for Water
Distribution and
Wastewater Collection are
funded out of the Utility
Operations Funds.
 This is strictly derived by
the rate payers.
 Rate payers are not the
same as tax payers.

6. FORMER Utility Organizational Structure
Water Manager
Sr. Administrative Asst.
(shared by dept.)
Utilities Field Supervisor
Crew Leader
(Pumps & Motors)
(1) Maintenance
Specialist III
(2) Maintenance
Specialist II
(2)Electricians
Crew Leader
(Wastewater &
Construction)
(1) Maintenance
Specialist III
(2) Maintenance
Specialist II
(2) Maintenance
Specialist II
(Jet Truck)
Crew Leader
(Water & Construction)
(1) Maintenance
Specialist III
(2) Maintenance
Specialist II
(1) Maintenance
Specialist III
(1) Maintenance
Specialist
(Valve/Hydrants)
Water Quality
Technician
(1) Maintenance
Specialist III
Right-of-Way Inspector
24 FTEs – all divisions

7. State of the Infrastructure –
Sewer System
Wastewater Lines Ages
Sewer Lines Feet Miles Percentage
Age A 0-10 Years 345,043 65.3 27.2%
Age B 11-14 Years 194,549 36.8 15.4%
Age C 15-19 Years 78,638 14.9 6.2%
Age D 20-24 Years 411,990 78.0 32.6%
Age F 25-30 Years 148,061 28.0 11.7%
Over 30 Years 85,954 16.3 6.7%
July 2011
Total miles of Sewer Lines that are 20 years or more in age – 122.3
Total percentage of Sewer Lines that are 20 years or more in age – 51.0%
Percentage of clay tile pipe in system – 10.5 % or 24.2 miles
AWWA standard is 50 to 100 years life expectancy in optimal conditions

8. Wastewater Collection Systems
25 Lift Stations 2 Flow Metering
Stations
58 Pumps & Motors
ranging from 4 – 18.5
HP
>234 Miles of Sewer
Line Ranging from 4”
– 42”
2600 Manholes 664 Mainline
Cleanouts and 32 End
of Line
22 Sluice Gates 98 Wastewater Valves
Annual
Operating Budget
- $4,588,624
Approximate
system value -
$156,000,000
Value of pipe over
30 years old -
$13,000,000
Approximately
14 FTEs

9. State of the Infrastructure –
Water System
Water Lines Ages
Water Lines Feet Miles Percentage
Age A 0-10 Years 288,077 54.5 21.6%
Age B 11-14 Years 195,752 37.1 14.5%
Age C 15-19 Years 78,752 14.9 6.0%
Age D 20-24 Years 450,841 85.4 34.0%
Age F 25-30 Years 140,481 26.6 10.5%
Over 30 Years 176,192 33.3 13.2%
July 2011
Total miles of Water Lines that are 20 years or more in age – 145.3
Total percentage of Water Lines that are 20 years or more in age – 57.7%
Percentage of AC lines in ground is 1.5% - 3.75 miles of pipe

10. Water Distribution Systems
3 Water Pumping Stations – 1 with
backup generator; 1 with 2 diesel right
angle gear drive units
2 Water Booster Stations 17 Pumps ranging from 30 – 250
HP
7 Ground Storage Tanks
totaling 13.5 MG
4 Elevated Towers totaling 5.25
MG
>252 Miles of Water Lines
ranging from 2” to 30”
4,006 Water Valves 1,908 Fire Hydrants
Annual
Operating Budget
- $6,134,273
Approximate
system value -
$186,000,000
Value of pipe over
30 years old -
$25,000,000
Approximately
10 FTE’s

12. Utilities Evaluation
New Director hired June
2011
Initiated cursory evaluation
of all divisions, conducted
with a focus on utilities,
inspections, overall safety,
& supervision techniques.
Completed observations by
ride-alongs with all field
staff, interviews of key staff,
& personal inspections of
job sites and project sites
Analyzed processes,
budget, resources, staff, and
organizational structure
and stability
Initiated strategic planning
actions, employee surveys,
identified basic core values
regarding expectations and
customer service values
Initiated Self Assessment
process in pursuit of APWA
Accreditation, provided
training, and identified
team

13. What are the
required steps
towards
achieving
sustainable
solutions?

14. Utilities Evaluation
New Director hired June
2011
Initiated cursory evaluation
of all divisions, conducted
with a focus on utilities,
inspections, overall safety,
& supervision techniques.
Completed observations by
ride-alongs with all field
staff, interviews of key staff,
& personal inspections of
job sites and project sites
Analyzed processes,
budget, resources, staff, and
organizational structure
and stability
Initiated strategic planning
actions, employee surveys,
identified basic core values
regarding expectations and
customer service values
Initiated Self Assessment
process in pursuit of APWA
Accreditation, provided
training, and identified
team

15. Utilities Evaluation
Reviewed master plans, studies,
engineering recommendations,
& work towards
implementation of action plans
Reorganize the utility
operations; focus on the
implementation of
improvement plans
Identify current issues
(ongoing) addressing
immediate and urgent needs
Initiate the complete review of
all safety & security practices
Development of training
program, safety program,
vulnerability assessment,
continuity of operations plan,
foster professional
development, & acknowledge
succession planning needs
Develop department specific
strategic plan
•Survey staff
•Identify core services
•Develop action plans
•Identify and revise core values
•Challenge current culture

16. Specific Challenges Identified in the
Wastewater Collection System
Aging infrastructure
Lift stations that need
to be rehabilitated /
upgraded.
Maintenance plan
funding
Capital improvement
funding
Main breaks/failures
are epidemic
Clay tile pipe in ground
subject to failure in
heaving soils and
requires replacement
Infiltration - from run
off, ground water,
irrigation, damaged
infrastructure
Reliance on contractors
for emergency repairs
Reliance on
consultants
SCADA system
outdated
Security system
upgrades

17. Specific Challenges in the Water
Distribution System
Drought impacts -
water restrictions
result in revenue
shortfalls & soil
movement
Aging infrastructure Low water pressure
Maintenance plan
funding
Capital improvement
funding
Increasing water loss
for unbilled quantities
No method of recovery
of flushed water for
secondary use
Reliance on contractors
for emergency repairs
Reliance on
consultants
Main breaks/failures
are epidemic
Water sampling
process need to be
modernized
SCADA system
outdated
Security system
upgrades needed
No work recording
system is in place

18. SWOT Analysis/Action Plan
Establish
Performance
Metrics
Perform Rate
Equity Analysis
Emergency
Communications
Strategy
Create Safety Task
Force
Acquire Work
Order System
Replace SCADA
System
Develop
Infrastructure
Rating System
Push System
Accreditation
(3 yr process)
Develop Business
Plan
Perform
Vulnerability
Assessment
Develop
Continuity of
Operations Plan
Improve
Administrative
Oversight and
Processes

19. Why is the Infrastructure So Tired?
Utilities was not a
priority!
• Fast growth period
• New installations
required little
attention
• Plenty of time to
catch up
• Small city mentality
• Habits did not evolve
to bigger city needs
Other concerns
• Complicated systems
fighting
environmental and
geographical
challenges
• Economic challenges
• You can’t see it!

20. Why is the Infrastructure So Tired?
All experts state systems
should last 50 to 100
years with the proper…
• Materials in place
• Maintenance programs
• Environmental
conditions
• Installation techniques
Other concerns
• Variable pressure
• Dead-end systems
• External loading

21. Why is the Infrastructure So Tired?
Heaving soils stress
non-flexible pipe systems
Construction error –
likely put in without
inspection
Lack of proper
installation methods
High environmental issues
– Hydrogen Sulfide (HS2)
deterioration to piping
systems, manholes, and lift
stations
Lack of maintenance
what you can’t see
will hurt you!
Wrong type of pipe
for conditions

22. Why is the Infrastructure So Tired?
 Almost 4 miles of asbestos cement pipe
 The use was discontinued in early 1980’s in North America
 The appeal was that AC lines are:
 Inexpensive
 Readily available
 Lighter than ductile iron (which was susceptible to corrosion)
 Easy to tap for service connections
 But it had drawbacks that we are living with today…
Form of Failure Causes of Failure Indicators of Failure
Break failure
Soil differential movement or inadequate bedding
support Circumferential cracks
Internal pressure and external loads (soil cover, live
loads, frost) Longitudinal cracks
Manufacturing defects Cracks in body
Structural Failure
Movements from thermal, seismic, external loading Joint leaks, poor bedding, and pipe movements
Internal pressures, external loadings, thermal stresses
Longitudinal cracks and changed internal/external
loads
Leaks
Loss of soil support and bending failure Leak noise, wet areas, and pressure variations

23. Why is the Infrastructure So tired?
 Over 24 miles of clay tile pipe
 This technology dates back to the Romans.
 The appeal was that CLAY TILE lines are:
 Inexpensive
 Readily available
 Durable/rigid/strong stuff
 But it has drawbacks in our application…
 Offset failures
 Separation at joints and services
 Collapse
 Root infiltration
 Deflection failures
 Brittle and subject to ground swell
 Improper installation and lack of compaction

24. Chiesa/Schrade Manhole

25. Chiesa/Schrade Manhole

26. Chiesa/Schrade Manhole

27. Manholes
NOTE: The current city standard for all new
manholes requires a 200 mil coating…
The balance is 1980 for remaining inventory all
conditions
370 manholes in poor condition remain on the
initial priority list
The department recently refurbished 244
manholes at a cost of approximately $544,000
Approximately 2600 manholes total inventory

28. Lift Stations/ OH Cranes
Several in
poor
condition
Several in fair
condition
Limited or no
back up
power
Overhead
cranes in
poor
conditions
without
planned
maintenance
Force main
under lake
always a
concern

29. Obsolescent Technology
SCADA (supervisory
control and data
acquisition) generally refers
to industrial control
systems (ICS): computer
systems that monitor and
control industrial,
infrastructure, or facility-
based processes.
The current
system is
approaching
obsolescence.
Software and
hardware
requirements and
replacement parts
are soon
unavailable.

30. Aging Infrastructure
Maintenance plan
funding lacking
$550K
Should be $2.8M
Capital improvement
funding lacking
What is available
remains unspent
Focus on
implementation
of existing SSES
data available
Low water pressure
Elevated water
tank
Pressure plane
Water loss
management
No urgency of
water loss
concerning water
loss management
OUR CULTURE
SHOULD BE:
Our water is our
blood; Our blood
if our life; Our
life is our Water
NTMWD model
is 12%; efforts to
reduce & recover
are being focused
Repeating and constant
main breaks/system
failures
Staff knows
where the
problem exist
Focus on hot
spots and repeat
failures
Asset management
No system in
place to manage
assets
Focus on
Fragmented GIS
data
CUPPS/EUM
software is
needed
Vulnerability
assessment/continuity
of operations
Outdated plan &
no contingency
plans
Emergency
management
needs upgrading
VSAT Software is
needed

31. Operational Upgrades/Concerns
Facilities
• Initiated
security policy
• Protection of
water supply
• Initiated
surveillance
camera
acquisitions
Assets
• Established
need for asset
management
plan
• Acquisition of
asset software
(EPA supplied)
Inventories
• Initiated
inventory
analysis
• Developing
storage
decentralization
• Develop reorder
process
• Reallocation of
current space

32. Periodic Rehabilitation

33. Periodic Rehabilitation

34. Reinvestment in Capital Maintenance
Utility Assets
• City’ system is valued
at $342 million
• Assume it has a life
expectancy of 30 years,
approx. $11.4 million
should be spent
annually for
maintenance
How much do we
allocate now?
• City current allocates
$550k or 0.16%
• City also contributes
$1.0 million to Cash
CIP for streets & alleys
• 2004-2006 Revenue
Bonds are nearly spent
2003 Study
• Study from Freese &
Nichols suggested the
City allocate $2.4
Million annually
• DFW CPI increases
that amount to $2.8
million by FY2012
34

35. Why is $2.8 Million the Right Number?
$2.8 M is the
foundation
for a recovery
plan; it is the
first STEP
No overnight
results are
anticipated; It
took decades to
get here; it will
take a while to
dig out of this
hole.
This effort will
stop the
hemorrhaging
and begin to
repair not only
the
infrastructure
but the culture.
We will do this
One
Small
Town
Evolution
Plan
at a time…
35

36. Your Greatest Personal Investment….
What is the
average home
cost in Rowlett?
$160,000
30 year
mortgage?
30 year useful
life?
But what is the
cost of deferred
maintenance?
And what is the
cost of that
maintenance as
compared to
the cost of that
asset?

37. Your Greatest Personal Investment
 Experts say as much as 1% to 4% annually or $2,000 to
$8,000 annually! And likely more in this region
 Roof, flooring, paint inside and out, plumbing repairs,
driveway repairs, AC maintenance, pest control, yard
work, pool maintenance, HOA fees, WATERING THE
YARD, and so many other costs…
Lack of maintenance here… leads to… deterioration here!

38. Comparison of Asset Reinvestment
Your house…
• Valued at approximately
$160,000 average for
Rowlett
• $2,000 to $8,000 annually
on maintenance
• Approximately 1% to 4% of
value
Our Utility System
• Valued at almost
$342,000,000
• And very likely more!
• $550,000 on
reinvestment/maintenance
• Approximately 0.16%
• FNI study recommended
$2.4M in 2003 ($2.8M now!)
• NOTE: We must determine
the organizational capacity

39. Operational Deficiencies
Unacceptable level of care for
a sustainable system
• Exercising water valves
regularly (more than 37
valves and 29 fire hydrants
per quarter)
• Fire Department performed
125 fire hydrant flow tests in
0ctober 2011; 1970 tests in
2011
• Painting fire hydrants
• Servicing fire hydrants
regularly
• Installation of pavement
markings to identify hydrant
and valve locations for
emergency services and
response (blue RPMs)
Increase standard of care
throughout organization
• Thorough, timely, and cost
effective dress up of
excavations
• Increased pump
maintenance (bi-annual is
preferred, currently planned
annually or when failures
occur)
• Reliance on contractors (cost
containment efforts)
• Sidewalk restorations
executed timely and cost
effectively (costs co-mingled
with streets program)
Cultural deficiencies must be
avoided
• Management by crisis
• Performance measurement
• Instill strategic thinking
methods in supervisory
group
• One S.T.E.P. at a time
process ☺

40. Operational Adjustments
Uncontrolled
overtime
expenses
$92,000 in 2011
Significant can
be deferred to
operational
support
Time
management
techniques
Implement
scheduling
changes to
reduce
overtime
expenses
Variable
schedules will
avert OT
expenses
Reduce call
backs
Inventories
need to be
analyzed,
improved, and
eventually
automated
Storage facilities
need to be
decentralized
Reduce travel
and
mobilization
time
Just in time
delivery where
possible
Operational
planning
needs to be
more efficient
and responsive
Daily, weekly,
monthly work
plans
Reporting
Performance
measurements
need to be
initiated to
include:
Establish levels
of
service/response
times
Benchmark
productivity
against
reasonable
standards
Measure water
loss and equate
to lost revenue
Review of all
operational
processes
Begin self
assessment
process
Review existing
policies and
practices
Draft
accreditation
practices
Re-
appropriation
of current
operating
budgets
Deferring
$248,000
annually to
maintenance
improvements
Fund crew from
existing
resources
Monitor budget
expenditures

41. Current Utility Organizational Structure
Utilities Asset Manager Utilities Operations Manager
Sr. Administrative Asst.
(shared by dept.)
Utilities Field Supervisor
Crew Leader
(Pumps & Motors)
(1) Maintenance Specialist III
(2) Maintenance Specialist II
(1) Maintenance Specialist I
Crew Leader
(Wastewater &
Construction)
(1) Maintenance Specialist III
(2) Maintenance Specialist II
(2) Maintenance Specialist II
(Jet Truck)
Crew Leader
(Water & Construction)
(1) Maintenance Specialist III
(2) Maintenance Specialist II
(1) Maintenance Specialist
III
(1) Maintenance Specialist
(Valve/Hydrants)
Right-of-Way Inspector Water Quality Technician
Maintenance Specialist III
24 FTEs – all divisions

42. Challenges
Public acceptance for
rate adjustments
Continued unexpected
failures
Media/marketing plan
Funding shortfalls
Balancing
organizational capacity
without large amount
of additional staffing
Performance
measurement and
records management
Accreditation as a
culture; self assessment
and continuous
improvement