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Home My WebLink About02. Presentation 11/01/19 BOARD WORKSHOP November 4, 2019 I . - ! 2.A. THE BOARDS ROLE — LABOR RELATIONS DISCUSSION 2 ' 1 11/01/19 1� 2.13. SUCCESSION PLANNING AT THE SENIOR LEVEL 3 ' SUCCESSION PLANNING AT THE SENIOR LEVEL •Succession Planning Committee • Management Leadership Academy •Supervisory Academy • Mentorship Program •Conferences and trainings 4 ' 2 11/01/19 2.C. ANNUAL O&M BUDGET FUTURE EXPECTATION 5 ' ANNUAL O&M BUDGET SIX-YEAR HISTORY Budgeted and Actual $120 $100 $88.2 $87.5 $89.8 $89 7 $89.7 $84.1 $84.6 85.5 $87.3 $87.8 $87.6 $80 4 $60 $40 $20 $0 FY 2014.15 FY 2015.16 FY 2016-17 FY 2017-18 FY 2018.19 FY 2019.20 Notes: • Contribution of$5M toward Unfunded Actuarial Accrued Liability(UAAL)was budgeted in FY 2014-15,then reduced to$2.5M through FY 2018-19,and $1.25M in FY 2019-20. 6 ' CENTRALSAN 3 11/01/19 ANNUAL O&M BUDGET FY 2019-20 AND THREE-YEAR PROJECTION O&M Budget Trend Approved and Projected per Financial Plan $105 $101.2 $100 $96.2 $95 w $92.1 C 0 $90 $87.6 $85 $80 FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 Assumptions: 1. Salaries per Memoranda of Understanding(MOU)(cost-of-living adjustment(COLA)of 3%,step increases,other) 2. Benefits(5-6%medical cost increase) 3. Other costs(3-5%) 4. Flat staffing 7 ' BUDGET CONSIDERATIONS • Economy •Staffing • District Staff • Consultants • Contract Labor/Temporaries 8 4 11/01/19 ANNUAL O&M BUDGET WHAT IS AN APPROPRIATE GOAL FOR FY 2020-21? $87.61M Flat with FY 2019-20 $89.81M Highest budget of the last 6 years $91.31M Salaries&Benefits per MOU Assumed COLA of 3% Non-labor costs flat $91.71M Salaries&Benefits per MOU Assumed COLA of 3.75% Non-labor costs flat $92.1 M (Financial Plan Assumption) Salaries&Benefits per MOU Assumed COLA of 3% Non-labor costs inflated at 3-5% $92.5M Salaries&Benefits per MOU Assumed COLA of 3.75% Non-labor costs inflated at 3-5% 9 ' CENTRALSAN 2.D. CENTRAL SAN 2030 DISCUSSION 10 5 11/01/19 2.E. BUSINESS CASE EVALUATIONS MODEL CENTRAL SAN'S BCE APPROACH 1. Define problem: identify goals and project driver(s) 2. Determine project functional requirements and required levels of service; assess current condition 3. Determine potential alternatives to achieve functional requirements and levels of service 4. Conduct alternatives analysis a. Economic analysis (Quantitative) AML b. Non-economic analysis (Qualitative) 5. Conduct Pilot testing to validate recommended alternative (if needed or applicable) — 6. Review results of analysis and recommend an alternative a. Prepare recommendations for Executive Review b. Present recommendations to Committee(s), then Board 12 ' 6 11/01/19 2.F. BOARD POLICY ON PENSION FUNDING LEVEL 13 ` BOARD POLICY ON PENSION FUNDING • It is both appropriate and responsible to pay the cost of current utility operations in the period such costs are incurred • Annual pension and OPEB contributions should be made to ensure that the funded ratio is targeted at and maintained as close to 100% as is reasonably practicable • When the pension and OPEB funded ratios are below 100%, efforts should be taken (beyond the minimums required by CCCERA and/or accounting requirements) to ensure the funded ratios are restored to 100% as soon as is practicable given other reasonable ratemaking constraints • Options are provided in the following slide 14 ' CENTRAL SAN 7 11/01/19 EXAMPLE: POTENTIAL PENSION FUNDING GUIDELINES While the pension is less than 80%1 funded,in addition to the CCCERA amortization of UAAL over 18 years,the District shall2 through budgeted contributions and funding from available year-end variances3,target bringing the funded ratio to 100%over not less than a 10-year4 period,through contributions to CCCERA5. Funding Source Time to Restore Contributions ME to ,, Less than 80% Shall budgeted contributions and funding 10 years CCCERA from available year-end variances Between 80-90% Shall budgeted contributions and funding 7 years CCCERAor from available year-end variances Trust Between 90-95% Shall budgeted contributions and funding 4 years Trust from available year-end variances Between 95-100% May available funding from year-end 2 years Trust variances Greater than 100% May available funding from year-end N/A Trust variances 15 2.G. STRATEGIC PLAN DEVELOPMENT - FISCAL YEARS 2020-22 _ Proposed Revisions to FY 2018-20 Vision, Values, and Goals and Consideration of a Culture Statement 16 ' 8 11/01/19 MISSION To protect public health and the environment 0 dL 17'0610 1 aCENTRALSAN VISION To be a high-perf Ge organization that provides Current exceptional customer service and regulatory GGMPliaRGe at responsible rates To be an innovative organization known for Proposed environmental stewardship and delivering exceptional customer service at responsible rates i 1s - 1 9 11/01/19 VALUES Current Proposed PEOPLE PEOPLE e customers and employees ResF customers and employees Roo, I ^I ^" • Work erficiently and effectively as a team • Work as a team Celebrate our successes and learn from • Celebrate our successes and learn from our our challenges challenges COMMUNITY COMMUNITY Value water sector partners Work with water sector partners • Fostere"Pn*^n*community relationships Foster community relationships • Be open,transparent and accessible Be open,transparent,and accessible • Understand service level expectations Understand service level expectations Build pa14R8FS '.. PRINCIPLES PRINCIPLES • Be truthful and honest Be truthful and honest • Be fair,kind and friendly Be fair,kind,and friendly • Take ownership and responsibility Take ownership and responsibility LEADERSHIP AND COMMITMENT LEADERSHIP AND COMMITMENT • War!(effectively and eff G ent! Promote a passionate and empowered • Promote a passionate and empowered workforce workforce Encourage continuous growth and • Encourage continuous growth and development development Inspire dedication and top-quality results • Inspire dedication and top-quality results 19 GOALS Current Proposed Provide Exceptional Customer Customer and Community r Service and Maintain an Excellent Provide exceptional service and maintain Reputation in the Community an excellent reputation • Environmental Stewardship Strive to Meet Regulatory Strive to meet regulatory requirements Requirements and promote sustainability Be a Fiscally Responsible and Fiscal Responsibility Effective Wastewater Utility Manage finances wisely and prudently Recruit,Develop,and Retain a Highly Workforce Development Trained and Safe Workforce Recruit,empower,and engage a highly trained and safe workforce ® Infrastructure Reliability • Maintain a Reliable Infrastructure Maintain facilities and equipment to be dependable,resilient,and long lasting Innovation and Optimization Embrace Technology,Innovation, Explore new technologies for continuous and Environmental Sustainability improvement 20 10 11/01/19 CULTURE STATEMENT •Why have a high-performing culture? • Stand out in the industry • Find and keep"A" level talent • Execute at higher levels • Protect an existing strong culture • Preserve the organization's legacy •What is an organization's culture? • You can often define the culture by the behavior you are willing to tolerate • Culture does not equal perks • ood organizations have good cultures by chance; world-class organizations have world-class cultures by design LG d is the enemy of great Adapted from 10/25/19 Manager Roundtable PowerPoint 21 1 THE FRAMEWORK FOR CULTURE DEVELOPMENT 1. Define • Important for General Manager and senior management to set and reinforce the culture • Adjust with employee engagement survey findings as needed 2. Ritualize — proactively 3. Select— hire for your culture; can't fix later 4. Integrate — orientation to the culture and make part of the daily work life 5. Communicate — make the culture visible 6. Coach — do what you say you'll do 7. Lead —walk the talk 8. Drive —through accountability Adapted from 10/25/19 Manager Roundtable PowerPoint 22 ' 11 11/01/19 KEYS TO MAINTAINING CULTURE • Understand the difference between values (ideas) and behaviors (actions) • Behaviors • Honor commitment • Practice blameless problem solving • Be a fanatic about response time • Follow up on everything • Rituals — practices that become behaviors over time • Rituals help makes things last Adapted from 10/25/19 Manager Roundtable PowerPoint 23 1 SAMPLE CULTURE STATEMENTS • We serve our community and each other with pride, passion, and purpose. • We take pride in our work and serve the Central San community with passion and integrity. • We take pride in our mission and serve with integrity. • We are proud to serve our community and each other with passion and integrity. • Proudly and passionately taking public service to the next level. • Water is our purpose. Our community is our pride. • We do more with wastewater. • Resource recovery with pride and integrity. • Dedicated to two precious resources: water and people. • Public service with vision and integrity. 24 ' 12 11/01/19 FINAL THOUGHTS? 25 lolvil 13