Vicki M. Putala, PE, Director of Environmental and Water Resources at OHM Advisors presented: "North Oakland County Water Authority – Collaboration of Assets and Operation to Improve Customer Service and Reduce Cost" at the Michigan Section AWWA 2015 Annual Conference.

1. September 17, 2015
Collaboration of Assets and Operation to
Improve Customer Service and Reduce Cost

2. Ronald Melchert, DPW Director
City of Auburn Hills
Aka: NOCWA Chairperson
Vicki M. Putala, PE
Director of Environmental and Water Resources Department
OHM Advisors

3. • Regional water authority – four communities
– City of Auburn Hills
– Orion Township
– City of Rochester Hills
– City of Pontiac/Oakland County Water Resources
Commissioner’s Office
• Coordinated system operations for improved level of
service (higher pressure during peak hour water
demand)
• Strategic use of storage to reduce supplier-provided
peak hour water demand for cost savings
• Single contract with Detroit Water and Sewerage
Department (DWSD)

4. PARTNE
RS

5. • Simple organizational structure
– Interlocal Agreement through Michigan Constitution of 1963,
Article 7, Section 28 and the Urban Cooperation Act of 1967, PA
7, fully executed September 2014
– No direct employees
• Communities retain ownership and operate their
own systems through a jointly developed NOCWA
Operations Plan
• Contracts limited to consulting services and DWSD
for water supply

6. • Put NOCWA Operations Plan into action during hot,
high water use days
• Coordinate storage use to reduce peak hour
demand

7. • NOCWA members reduce their community’s peak
water demand during the critical morning period
• Communication, collaboration and trust

8. • Community representatives meet monthly to discuss
operational strategies

9. • Effectively coordinating storage
tank usage between
communities is crucial
• Storage filled during DWSD
Exclusionary Period (midnight to
6 am EDT) or during periods of
low system demand
• Storage drained during morning
high usage period

10. • Specific DWSD meters are restricted during high
usage periods

14. • DWSD Revenue Requirement
– Maximum day rate
– Peak hour rate
– Annual Volume
• Fixed costs - 60%
• Commodity cost (based on usage) – 40%
Revenue Requirement can be lowered with
reduced peak hour demand

15. NOCWA/DWSD Contract and Individual Community
Limits
Max Day (MGD) Peak Hour (MGD)
NOCWA 50.6 56.0
Auburn Hills 10.0 12.6
Orion Township 8.5 8.5
Pontiac 12.0 3.0
Rochester Hills 21.0 35.4

16. • DWSD Rate Methodology – Previous
Arrangement
Community
Volume
(MCF)
Max Day
Rate
(MGD)
Peak Hour
Rate (MGD)
Revenue
Requirement
Fixed Cost
Commodity
Rate
Auburn Hills 179,000 10.0 12.6 $5,163,916 $3,098,349 $11.54
Orion
Township
135,000 8.5 8.5 $3,954,188 $2,372,513 $11.72
Pontiac 312,000 12.0 12.0 $5,512,436 $3,307,461 $7.07
Rochester
Hills
317,000 21.0 35.4 $11,830,569 $7,098,341 $14.93
Community
Summation
943,000 51.5 68.5 $26,461,109 $15,017,026 $11.22
Revenue Requirement
Fixed Cost
Commodity
Rate
Contract
Peak
Hour
Contract
Max Day
Annual
Volume
Meter
Location

17. Revenue Requirement
Fixed Cost
Commodity
Rate
Contract
Peak
Hour
Contract
Max Day
Annual
Volume
Meter
Location
Community
Volume
(MCF)
Max Day
Rate
(MGD)
Peak Hour
Rate (MGD)
Revenue
Requirement
Fixed Cost
Commodity
Rate
Auburn Hills 179,000 10.0 12.6 $5,163,916 $3,098,349 $11.54
Orion
Township
135,000 8.5 8.5 $3,954,188 $2,372,513 $11.72
Pontiac 312,000 12.0
12.0
3.0
$5,512,436
$4,079,703
$2,447,822
$7.07
$5.23
Rochester
Hills
317,000 21.0 35.4 $11,830,569 $7,098,341 $14.93
Community
Summation
943,000 51.5 59.5
$26,461,109
$25,028,376
$15,017,026 $10.62
NOCWA 943,000 50.6 56.0 $22,587,700 $13,552,620 $9.58
• DWSD Rate Methodology – NOCWA
Arrangement
Net Savings: $26,461,109 - $22,587,700 or $3,873,409

18. • Previous Arrangement
Revenue Requirement = $26,461,109
Water
Supplier
- DWSD
Auburn Hills
• $5,163,916
Orion
Township
• $3,954,188
Pontiac
• $5,512,436
Rochester
Hills
• $11,830,569

19. NOCWA
Revenue
Requirement:
$22,587,700
Auburn Hills
•Allocated
Percentage: 20.6%
•Allocated RR:
4,660,350
Orion Township
•Allocated
Percentage: 15.8%
•Allocated RR:
$3,568,590
Pontiac
•Allocated
Percentage: 16.3%
•Allocated RR:
$3,681,865
Rochester Hills
•Allocated
Percentage: 47.3%
•Allocated RR:
$10,676,895
Water
Supplier
- DWSD
• Revenue Requirement Allocation
Community
Individual
Revenue
Requirement
Percent of
NOCWA
Revenue
Requirement
Allocated
Revenue
Requirement
Auburn Hills $5,163,916 20.6% $4,660,350
Orion Township $3,954,188 15.8% $3,568,590
Pontiac $4,079,703 16.3% $3,681,865
Rochester Hills $11,830,569 47.3% $10,676,895
Community
Summation
$25,028,376 100.0% $22,587,700
NOCWA $22,587,700

20. • NOCWA Arrangement
Revenue Requirement =
$22,587,700
Community Savings
Auburn Hills $503,566
Orion Township $385,598
Pontiac $1,830,571
Rochester Hills $1,153,674
Total $3,873,409
Water
Suppli
er -
DWSD
NOCWA
Auburn Hills
• $5,163,916
• $4,660,350
Orion
Township
• $3,954,188
• $3,568,590
Pontiac
• $5,512,436
• $3,681,865
Rochester
Hills
• $11,830,569
• $10,676,895

21. Communit
y
Fixed Cost
Commodit
y Rate
Predicted
Volume
(MCF)
Actual
Volum
e
(MCF)
Predicted
Individual
Revenue
Requiremen
t
Adjusted
Individual
Revenue
Requireme
nt
Original
Percentag
e
Adjusted
Percentag
e
Paid
During
Previous
Year
Adjusted
Revenue
Requiremen
t
True Up
Adjustmen
t
Auburn Hills $3,098,349 $11.54 179,000 179,000 $5,163,916 $5,163,916 20.6% 20.8% $4,567,439 $4,612,745 -$45,306
Orion
Township
$2,372,513 $11.72 135,000 135,000 $3,954,188 $3,954,188 15.8% 16.0% $3,497,446 $3,532,138 -$34,693
Pontiac $2,447,822 $5.23 312,000 265,000 $4,079,703 $3,833,875 16.3% 15.5% $3,608,462 $3,424,666 $183,796
Rochester
Hills
$7,098,341 $14.93 317,000 317,000 $11,830,569 $11,830,569 47.3% 47.7% $10,464,037 $10,567,834 -$103,797
Community
Summation
$15,017,026 $10.62 943,000 896,000 $25,028,376 $24,782,548 100.0% 100.0% $22,137,383 $22,137,383 $0
NOCWA $13,552,620 $9.58 943,000 896,000 $22,587,700 $22,137,383 $22,137,383 $0

22. Auburn Hills
•Predicted Use: 179,000 MCF
•Actual Use: 179,000 MCF
•Underpaid: $45,306
Orion Township
•Predicted Use: 135,000 MCF
•Actual Use: 135,000 MCF
•Underpaid: $34,693
Pontiac
•Predicted Use: 312,000 MCF
•Actual Use: 265,000 MCF
•Overpaid: $183,796
Rochester Hills
•Predicted Use: 317,000 MCF
•Actual Use: 317,000 MCF
•Underpaid: $103,797
NOCWA
True Up

23. • Cost of creating NOCWA: $80,000
• Net savings of $3.8M – ROI is less than 10 days
RR as Individual Community RR as NOCWA Member Savings
Auburn Hills $5,163,916 $4,660,350 $503,566
Orion Township $3,954,188 $3,568,590 $385,598
Pontiac $5,512,436 $3,681,865 $1,830,571
Rochester Hills $11,830,569 $10,676,895 $1,153,674
Total $26,461,109 $22,587,700 $3,873,409
*RR = Revenue Requirement

24. • Community
Collaboration
• Economic Benefit
– $3,800,000
annual savings
• Enhanced Level
of Service
– 5 to 7 PSI
pressure
increase during
high water
demand periods
• System Reliability

25. • Reduces Future Capital Expenditures
• Facilitated Communication