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HomeMy WebLinkAbout06.a.4) Strategic Plan update6 a. q) Cent Contra Costa Sanitary District January 27, 2011 TO: HONORABLE BOARD OF DIRECTORS FROM: JAMES M. KELLY, GENERAL MANAGER /e Affi SUBJECT: STRATEGIC PLAN UPDATE Staff has placed "Strategic Plan Update" on the February 3, 2011 Board agenda. The following background information is provided: * 11126/07 Memo to the Board from Steve T. Hayashi of Red Oaks Consulting * An update of the 12/30/09 Board Strategic synopsis provided last year Since last year, the District has faced a number of new challenges: • New furnace regulations • Potential new nutrient requirements • Increase Contra Costa County Employees' Retirement Association UAAL of $31,239,235 • Newly promulgated AB32 (green house gas) regulations The regulatory and financial exposure of these new challenges is the largest the District has faced since it began upgrading its collection system. With the magnitude of these challenges, it is appropriate to review the current Strategic Plan and seek your guidance on the District's priorities. JMK:slc TO HONORABLE BOARD OF DIRECTORS FROM. STEPHEN T HAYASHI SUBJECT SUMMARY OF STRATEGIC PLANNING FACILITATION DATE. NOVEMBER 2 6 , 2 o O? INTRODUCTION This memorandum summarizes Red Oak Consulting's strategic planning facilitation services to the Board of Directors (Board) of Central Contra Costa Sanitary District (District) The purpose of the effort was to align the District staff's strategic planning activities with the vision of the Board Members O K r In order to gauge the position of the Board with respect to the existing strategic plan, information was gathered from the Board in two steps first, each Board Member was asked to complete a written survey, and then each Board member was individually interviewed Based on the findings from the surveys and interviews (as sun nari z ed in Part 1, below) , a four-hour workshop was held on October 31S 204 7, during which Board Members discussed the strategic issues that the. Members felt were the most critical to clarify in the District's strategic plan The findings from this workshop are presented in Part 2 of this report PART I SUAMARY OF INITIAL FINDINGS Written Questionnaires Strategy Development Roles -- Responses to the survey suggested that there is general acceptance amongst the Board Members of the District's current Mission, Vision, and Values There was a less unified view on the appropriate, respective roles for staff and the Board in creating the District's Mission, Vision, Values, Goals, and Objectives Some Board Members believe that staff should develop the Goals. and Objectives after' receiving the Mission, Vision, and Values from the Board Other Board Members believe that the Board should develop all policies, including Goals and objectives Industry Leadership - All Board Members agree that the District should strive to be an ,industry leader, most Board Members believe that the District is already an industry Leader, and at least one Board Member believes that the District has become too 'comfortable" in assuming that the District is an industry Red Oak Consulting 1 leader B oar d Me have a varie o f views on the strate that should be used to remain an industry leader Te hnolog - Some Board Members believe that the District should make large investments in order to keep up with emerging technologies, axed others believe that the technology investments should be more conservative Customer Service - Board Members generally agree that the District currently provides excellent customer service and full regulatory complianc The issues of reclaimed water, cultural diversity, retirement benefit costs , education, outreach, service rates and the Board's current committee systern stood out as potential topics for further discussion The complete written responses to the surveys are available and can be provided under separate cover' ri WS After analyzing the written responses from the individual Board Members, fed Oak developed a seri of follow -up questions for the in person interviews The purpose of the .•interviews was to allow Board Members to elaborate on their questionnaire responses, indicate their priorities regarding the issues facing the Dis trict, and propose the best war to spend the limited t inn allocated for the workshop The interviews confirmed ed the survey findings and allowed the Board Members to elaborate on a variety of topics Short summaries of the int findings are provided below, organized by strategic topic A more detailed suum of responses given during the interviews has been previously provided under a separate cover and is available upon r Workshop- -- Objectives The overall ob ective of the workshop, as expressed by Board Members was to increase communication regarding strategic planning and to focus on the issues that they commonly hold to be important, such as recycled water and leadership Recycled Water R ecycled/ reclaim�►ed eater is the single issue that all Board Members feel should be included in the strategic plan There is general agreement on the need for the District t augur nt its recycled water services Div It is clear that all Board lesbers agree that workforce diversity is desirable It is not clear how the Board ienbers wish to go about inc reas in g diversi at the Distric Namely, there is no agreement on whether diversity should be considered during the ]siring process, or whether the District Red Oak Consulting should make hiring decisions solely based on qualifications The idea of how to go about increasing diversity within the applicant pool was also brought up in the interviews Outreach Two distinct perspectives were expressed during the interviews, some Board Members feel that the current outreach programs are adequate and that sometimes less news is better, and other Board Members feel that outreach should be enhanced, particularly with the District's educational programs Employee , Benefits Board Members expressed varying opinions regarding the cost of employee benefits, particularly retirement costs, but the general consensus was to ensure that the District is providing proper benefits at a reasonable cost to rate payers Service Rates Some Board Members feel that some of the District rates are too high, while others feel that they are average as compared to other sanitary districts While there is general agreement that the District provides a valuable service to its customers, some members feel that the District should be charging for services that currently do not have a fee, and other members feel that certain services should be provided at no additional cost Strategic Plan Document Most Board Members believe that the current staff developed strategic plan should be considered a draft that will be revised to reflect the outcome of the issues addressed above Preliminga Conclusions The written surveys and individual interviews revealed that the Board members are in general agreement on the District's Mission, Vision, and Values Therefore, rather than spending time at the workshop on refining these strategic plan elements, the focus of the workshop became a strategic issues workshop to address select operational -issues that were deemed important, yet unresolved, elements of the strategic plan As such, the following list of topics was developed * Recycled water services o Cultural diversity • Public outreach • Costs of retirement and benefits * Rates • The District as an industry leader Red oak Consulting 3 PART 2 WORKSHOP Due to the limited amount of time , Recd Cask asked each Board Member to select four issues from the above list that they felt were the most important to discuss during the workshop The total vote tally was as follows Issue Number of Votes Recycled Water Services Community outreach Cultural diversity Rates 3 The District as an ,industry leader 3 Cost$ of retirement and employee benefits Based on these results, recycled water, coxmmmity outreach, cultural diversity, rates, and the District as a leader were given priority to discussed during the workshop Ultimately, all of the topics were discussed during the workshop WorkshODFindm The following summarizes the discussions held during the Board's October 31 "" workshop with Red Oak Recycled Water Services There is consensus among Board Members that the District should pursue increased recycled Mater services and that it will be one of the most important issues facing the District in the future The following topics were discussed • The relationship between the District and Contra Costa water ]district CCWD is an important consideration There is are apparent misconception or miscommunication on the part of the CCWD Board Members with respect to the status of water recycling within the Water District There was an active discussion on how to approach the CCWD Board, although no consensus was reached The District should approach recycled water from "the bigger picture" in terms of statewide rater supply issues especially considering the vulnerability of the Delta i e 'Potential for maNjor catastrophe if there were a lame seismic event) and other envi ro mental issues a With the augmentation of recycled water services, there may be n additional need for storing the recycled water Red oak Consulting • If the District is serious about providing recycled water services, a more comprehensive financial plan will need to be developed Currently the budget has .a line item for recycled water, but there is a need to better understand the costs associated with the service It may be appropriate to develop a Recycled Water Master Plan The ma jo rity of Board Members agree on the following • Currently,. approximately 20 MCD of fresh water is used at the refineries, this is an opportunity to provide recycled water The District should pursue large recycled water projects, such as providing recycled water to refineries and other large- volume users • The District should also dedicate resources to influence legislation that will allow the District and other sanitary and sanitation districts to provide recycled water without the interference of the water purveyor Community f �U= ch The topics addressed during the workshop respect to public outreach included • creating partnerships with other special districts • collaborating with environmental groups such as the Sierra Club or Bay Keeper to inform the public about issues such as triclosan soaps, etc • Perhaps operational issues, such as recycled water services, should be prioritized rather than using resources to increase public outreach • Better informing the public of the annual National Pollutant Discharge Elimination System (NPDES) report Although there was good discussion, there was not agreement among Board Members regarding if, and how, the District should approach community and public outreach There were two distinctive perspectives, the first is that current outreach efforts should be increased and more proactive, and the second is to continue with the current outreach program employed at the District A more proactive approach to community outreach may include the following elements * As an environmental agency, the responsibilities of the District should change as related environmental challenges change Responsibilities may include educating the public on emerging environmental issues, such as endocrine disrupters, as well as self - regulating the District's carbon footprint through efficient use of energy and sustainable practices y Red Oak C 5 • Constituents, including both children and adults, should know about the District's services and they should be informed about how those services may affect the env i roranen t The District should be proactive in obtaining positive publicity in local news publications The District should have a► system for reaching out to service clubs and other organizations The more traditional or business-as- usual) ►p r o includes the following concepts • Continuously improve the current educational offerings • Continue to ensure that the public is informed about the Household Hazardous Waste Collection Facility and pollution prevention The District should not be seeking publicity; rather, it should focus on doing what it does well without worrying about recognition This means that the District should continue to be on the leading edge of understanding sanitary issues and providing quality services to the public The majority of the Board Members generally agree on the following • At a minimum, the current approach outlined above should be continued • The District should get positive value from the resources it spends on public outreach The new Public Information officer is performing well and should g:.ven time to imp lement the community outreach plan Qltuml I -),Lq I The current District values include "all aspects of diversity # Some Board Members feed. that "cultural" diversity should be more clearly specified as a District value Other Board members were less clear on what should be included in the definition of diversity, e g should cultural, ethnic, gender, and sexual orientation all be included Other Board Members believe that diversity should not influence the hiring process at all, and that jobs should be offered to those who are the most highly qualified, regardless of ethnicity With respect to this topic, the Board discussed, but did not reach conclusion on, the following issues Red Oak Consulting ■ The extent to which staff should pursue candidates to ensure there is a high level of diversity within the candidate pool, as well as the actual level of diversity within the hiring pool * The extent to which staff should pursue hiring the best qualified candidate or consider hiring a qualified candidate that would increase the diversity of the organization • what would be the impact of hiring a qualified candidate at the District versus hiring the best -- qualified candidate? The majority of the Board Members generally agree on the following • Diversity at the District is a confirmed goal of the Board Staff will need more guidance on defining the scope of diversity ■ The District should pursue diversity while continuing to emphasize recruiting and hiring highly qualified employees The District's recruiting and outreach efforts should be audited by a third party to assess whether there are any internal. or external, barriers to diversity, or other ways to improve recruitment Rates The District's current rates are $300 per year per household, plus an ad valorem assessment as part of the property tax, of approximately $80 per household The issues that were discussed in relation to the District's rates include ■ The effect of the economy on the revenues received from the ad valorem taxes, the District may see a decrease in ad valorem revenues because of the real estate slow down in the recent past ■ Setting rates based on the current and future cost of providing services to customers, as opposed to setting rates based on the rates that other Districts charge for their services • The appropriate management of the District's current reserves • The appropriate reserve amount for the District • Increasing recycled water services will probably impact District finances There may be a need to increase rates and there also may be a need to reallocate the overall District budget • There is a concern that the :rates paid by small businesses are prohibitively high, particularly connection fees for restaurants Red oak Consulting 7 • Nether the District should have a financial planning horizon longer than 10 years to ensure our programs are sustainable The majority of the Board generally agrees on the following * Rates are currently adequate to cover the services that the District provides to its customers • The District needs to continuously ensure that ratepayers are getting a good value through quality services o Rates should reflect what the District plans to accomplish and provide, i e , ten -year capital and financial plans should continue to be developed The Distnct as a Leader Board members agree that the District should strive to maintain leadership position within the wastewater industry The following issues were discussed during the workshop Being are industry leader should include showing leadership as an environmental agency There are many organizational facets that the District can measure and strive to improve in its guest to remain leader The District should identify which facets it wants to focus on, such as technology, susta inability, politics, fiscal organization, academid involvement, and research to name a few The majority of the Board members agree that The District can consider itself an industry leader based on the fact that it continuously meets or exceeds state and federal regul at ions , it receives outside recognition for its work, and it has a state-of-the-art laboratory • The Board wants the District to continue to e an industry leader Staff should continue to stay involved in professional and technical organizations in order to maintain a leadership position in the industr • Staff should inform the Board what areas staff believes the District could/should pursue to continue to be an industry leader Red oak Consulting Cost of Retirement Benefits The topic of retirement costs was discussed. The majority of the Board Members agreed that staff should bring a request to the Board to conduct a study of the costs associated with switching their retirement benefits administrator from Contra Costa county to CalPERS. �'''nr�r►��ycinrte Following the workshop discussion of key strategic issues, Board Members expressed general satisfaction on the success of the workshop. The approach of providing a summary of the group's responses from the questionnaires and interviews prior to meeting was appreciated. Some Board Members felt that the group could have used more time to more fully discuss all of the topics. The workshop provided a forum for discussing key strategic issues, all of which should be included in the District's strategic plan. The consensus among Board Members on the key strategic issues outlined above provides a basis for staff to revise the existing strategic plan. Staff should use the information in this document to assist in reporting back to the Board on the strategic issues work progress. Red oak Consulting 9 BOARD STRATEGIES - SYNOPSIS 1128/10 Update On October 31, 2007, the Board of Directors of the Central contra Costa Sanitary District met with the General Manager to address areas of strategic importance to the Board and the District. Based on the findings from a written survey and subsequent interview with each Board, six issues were identified for discussion. Those areas were Recycled Water; Public Outreach; cultural Diversity; Rates; the District as an Industry Leader; and the Costs of Retirement and Benefits. What follows is a series of strategies to address each of these issues in the order of importance determined by the Board. Each issued is addressed in the following manner: • Goal - the targeted end result for each issue; • Primary Objective -- Strategies to meet Goal • Result — the outcome of staff efforts to date RECYCLED WATER Goal: Increase safes of recycled water Primary objectives 1. Identify potential significant users of recycled water in the service area a. Determine realistic number of potential new users in a significant user class. b. Identify potential sales volume of recycled water to each potential customer. c. Determine probable costs for large volume users of recycled water d. Determine infrastructure needs and costs as a result of increased sales of recycled water. 2. Develop Marketing Plan for sales to new customers. a. identify possible cost - sharing projects with potential new customers (e.g., new infrastructure to deliver recycled water). b. Identify revenue neutral proposals for water transfers 3. Increase awareness and support for increased production and use of recycled water. a. Increased legislative support for use of recycled water b. Implemented outreach to U.S. Bureau of Reclamation and other partners to generate support for large scale recycled water project to serve refineries. c. Participate in Bay area Coalition to pursue Title XVI funding for Concord Recycled Water Project d. Include recycled water as topic in all public events/environmental fairs e. Include basic details of recycled water in Sewer Science presentations to high school students f. Provided information needed to Concord to serve Concord Naval Weapon Station with recycled water Results This identified projects that could include industrial usage especially by nearby refineries; piping to the Diamond Boulevard area, paralleling the existing A- Line; early plans for the use of recycled water at the decommissioned Naval Weapons Station; and lobbying efforts to State and Federal officials on the importance of recycled water. Additionally, recycled water has been the focus of several Pipeline articles over the past year. EDUCATIONAL &COMMUNITY OUTREACH Goal: continue implementation of existing Marketing /Communications Plan with additional emphasis on educational outreach. Primary objective 1. Review and update Marketing /Communication Plan, evaluating cost - effectiveness of individual programs, with an emphasis on the District's role as a protector of public health and the environment. a. Focus education outreach efforts on the changing environmental landscape and the District's role as an advocate for and a steward to the environment. b. Develop educational outreach program for the general public on challenges facing the District (mercury, endocrine disrupters, pharmaceuticals, carbon footprint, air quality, etc.). c. Develop series of articles on the "Big Picture," emphasizing the broader impacts of District efforts to fight pollution. d. Reinvigorate the District's Speakers Bureau. Results: Public Education and Outreach has been a key element in the District's NPDES permit since 1990. Starting in 2007, the Pipeline Newsletter expanded its publishing schedule from two to three times per year and has addressed larger issues impacting the District and the region, including new State and Federal regulations, Rate Case issues, and pollution prevention programs that are complimentary to District efforts (e.g., Green Business, Sharps Disposal, composting programs, etc.). Pipeline articles have been reprinted (with permission) by other sanitary sewer agencies and several cities in our service area. The District's website is updated regularly and includes links to those complimentary programs. The website is regularly updated and now averages 171 visitors per day. The site remains notable for the professionally produced educational /informational videos posted on it. Production of additional videos is planned for the next year. The Speakers Bureau has become an increasingly important part of our community outreach effort with 25 engagements reaching approximately 900 people in 2010, covering a variety of pollution prevention efforts by the District. Seven presentations have already been made or scheduled in the first month of 2011. As an addendum to the Speakers Bureau, close to 200 people, primarily grade school and high school students, took Plant tours last year. FOG brochures continue to be distributed to realtors and apartment complexes in the service area, especially in areas with grease - related SSOs. CCCSD brochures, including FOG, HHW, Pharmaceutical Disposal, and Operator Training, are regularly brought to chamber of Commerce and City Planning offices in the service area., CCCSD is the only wastewater agency still offering in- school Student programs in the Bay area.. In 2010, nearly 1,300 high school students took part in our Sewer Science Program; more than 1,900 third and fifth graders took part in the Water Wizards program. And nearly 5,000 students from the CCCSD service area took part in Delta Discovery Voyages thanks to our support of the Marine Science Institute Program. CULTURAL DIVERSITY Goal: Pursue Cultural Diversity in the District's workforce. Primary objective 1.Pursue cultural diversity in all recruitment and hiring practices while continuing to emphasize the recruitment of highly qualified employees. a. Develop a Board statement acknowledging the value of Cultural Diversity within the District's workforce. b. Conduct comprehensive review of District recruitment and hiring practices that may or may not impact the development of a culturally diverse workforce. c. contract with a consultant to perform a third party audit of District recruitment and hiring practices. d. Examine how open positions are presently advertised e. Develop new methods to expand the existing pool of culturally diverse job candidates. f. conduct survey of other wastewater agencies to compare recruitment and hiring practices. RESULT: The Board adopted a statement acknowledging the importance of cultural Diversity. A review of District hiring practices conducted internally and by an independent consultant confirmed that the District was making the proper efforts for a culturally diverse workplace. An on --line job application process was adopted by the District. And New Employee Orientations now have a dedicated section given over to the reality of cultural Diversity in the Workplace as a reflection of the District's Values. RESPONSIBLE RATES Goal: Ensure that District rates continue to be fair and reasonable for all customers. Primary objectives 1. continue annual review of District rates as potentially impacted by District needs, regulatory compliance, and legislative actions. a. Determine fiscal impact of an expanded recycled water program. b. Develop financial plan for recycled water program. 2. Ensure that small businesses pay their fair share of sewer fees and no more. 3. Ensure rates cover the service the District provides and support the 10 -Year Capital and Financial Plan. Result: While opting not to increase sewer rates in 2009 and 2010, the District continues to reduce costs (except for benefits) without loss of service. Financial plans show the District must either increase rates this year or reduce service or modify some of its programs. CCCSD AS INDUSTRY LEADER Goal: District should make a concerted effort to remain a leader in the wastewater field. Primary objective 1. Position District as industry leadership in environmental issues and regulatory compliance. a. Adopt new technologies and pioneering/cutting edge approaches to industry challenges b. continued compliance that exceeds State and Federal requirements. c. Apply for all relevant industry -based awards and promote District on achievement of same. d. Increase involvement of District staff in professional and technological organizations Result: The District will soon receive its 13 consecutive Platinum Award for Total Annual Compliance with its NPDES Permit; won a number of.engineering, education and operations - related awards; has been recognized for its OperatorTraining Program that has provided the District with 12 new plant operators; has complied with the new Green House Gas reduction law; been recognized as a Green business; expanded service at its Household Hazardous Waste Collection Facility; televising the collection system with a resulting record of less than 43 SSOs = 3 SSOs per 100 miles; and awarded a contract for the construction of a new CSO facility. COST OF RETIREMENT &EMPLOYEE BENEFITS Goal: Determine whether CCCSD should move from the contra costa county Employees' Retirement Association (CCCERA) to the California Public Employees' Retirement System (CalPERS). Primary objective 1. Contract Actuarial to evaluate retirement costs and effectiveness of CCCERA versus CaIPERS a. Understand why CCCERA contribution rates are higher than other retirement systems. Result; An actuarial determined that CCCERA was inherently more stable than CalPERS and that District contributions to CCCERA were within reasonable amounts. Also, within the past year, the District established a GASB 45 Trust; signed three labor agreements which allow for the creation of a Third Tier for new hires. CCCERA's depooling and market losses have increased the District's CCCERA rate by 9.17% next year.