City of Philadelphia Water Department 2013 Investor Conference 300 - PowerPoint PPT Presentation

City of Philadelphia Water Department 2013 Investor Conference

300 Years of Management Experience Joseph Clare, CPA J h Cl CPA 40 years Finance Christopher Crockett, PE 20 years 20 years Planning Planning Steve Furtek, PE 30 years Engineering 26 years Mami Hara, AICP, ASLA 35 years Debra McCarty 34 years Chief of Staff Operations Howard Neukrug, PE,BCEE Commissioner Scott Schwarz Esq Scott Schwarz, Esq G Gerald Leatherman, Esq ld h Chief Counsel 24 years Administration 32 years Joanne Dahme 32 years Public Affairs Public Affairs David Katz 26 years Compliance Michelle L. Bethel 20 years WRB 2

Executive Summary Integrated, regional water and wastewater services to Southeastern PA • Recognized leader in the US Water Industry for our innovation and leadership Recognized leader in the US Water Industry for our innovation and leadership • • Strong, experienced and stable management team • A long history of conservative budgeting and projections and significant reserves A long history of conservative budgeting and projections and significant reserves • • Recently updated and integrated Strategic Business Plan, Financial Plan and Capital • Plan • History of approvals for steady rate increases averaging ~ 6% per year • Rates remain low in comparison to other regional utilities • A strong vision for moving toward the “Utility of the Future” In strong partnership with our regional and national regulators, environmental • advocacy groups local consumer advocates and business leaders and our City advocacy groups, local consumer advocates and business leaders and our City Government 3

Three Integrated Plans to Support Sustainable, Cost Effective Infrastructure C t Eff ti I f t t • Strategic Business Plan Strategic Business Plan – Clear and unified vision, direction, initiatives – Focused development of staff throughout development of the plan and its initiatives • Financial Plan – Increase in coverage and liquidity – Corollary focus on financial literacy and support of financial C ll f fi i l lit d t f fi i l responsibilities internally and externally • Capital Plan – Focused upon meeting the four components of sustainable cost effective infrastructure management – State of the art planning approaches and technologies employed Adapted from USEPA Four Pillars 4

Four Components of Sustainable, Cost Effective I f Infrastructure Management t t M t • Asset management Asset management – Making the right investments at the right time • Infrastructure Financing and the Full Cost of Water – Using all available options to invest in our system • Water and Energy Efficiency – Adopting sustainable practices and technologies for improving efficiency, reducing costs and addressing future needs • Alternative Technology Optimization – Using the best, the new and the innovative solutions Using the best, the new and the innovative solutions 5 Adapted from USEPA Four Pillars

System Overview 2,000 employees serving over 2 million customers 2 000 employees serving over 2 million customers over 200 square miles Service S i I f Infrastructure t t Service Area: 230 sq. mi. Estimated replacement value: $30 B • • • 6 modern water and wastewater • Retail: 134 sq. mi. treatment facilities f ili i Wholesale: 96 sq. mi. • • Over 1 Billion GPD of drinking water • Wholesale and retail water, storage wastewater and stormwater N Nearly 7,000 miles of water and l 7 000 il f d • Active Accounts: 581,587 • sewer piping • Population served: 2.3 million P3’s for Sludge Pelletization, • Annual Operating Budget of $702 M Annual Operating Budget of $702 M • Cogeneration AMR Cogeneration, AMR • Annual Capital Budget of $250+ M 6

Overview of Existing Retail Rates and Charges Water + Wastewater – Meter Based Billing More than 99.5% AMR coverage • • Approximately 98% collection rate Approximately 98% collection rate • Municipal properties are billed 100% of cost of service Stormwater Management – New Parcel Based Billing in place • Successful implementation of a parcel based billing system for stormwater Adopted four ‐ year transition to minimize increases to negatively impacted customers • Initiated billing of stormwater only properties • • Developed a number of supportive programs: • Citizens Advisory Committee • St Stormwater Management Incentives Program t M t I ti P Stormwater Assistance Phase ‐ in Program • Enhanced stormwater CAP program • 7

History of Implementing Rate Increases 5/8" Meter Residential* 600 Cu. Ft. monthly $80 14% $70 12% 12.6% $60 10% rges $50 % I 8% 8% Rate Cha ncrease 6.3% $40 5.7% 5.8% 5.5% 5.0% 6% 4.3% $30 6.7% 6.7% 3.1% 3.0% 4% $20 2.3% 2.3% 5.8% 1.9% 2% $10 0.7% $0 0% 7/93 7/94 7/95 9/01 7/02 7/03 2/05 8/05 7/06 7/07 11/08 7/09 7/10 7/11 1/13 7/13 7/14 Effective Date Water Sewer % Increase Source: Philadelphia Water Department 8

Retail Rates are Comparable Regionally and Nationally d N ti ll National Comparison (2011) $100 Combined Household Water, Wastewater, and Stormwater Charges $90 $80 $80 $70 $60 $50 $40 $30 $ $20 $10 $0 2012 Regional Residential Rate Comparisons Companies Water Charge Sewer Charge Stormwater Charge Aqua Pennsylvania $59.90 N/A N/A Pennsylvania American Water Pennsylvania American Water $54 60 $54.60 N/A N/A N/A N/A New Jersey American Water $37.26 N/A N/A North Penn Water Authority $23.25 N/A N/A North Wales Water Authority $20.16 N/A N/A Doylestown Township $29.02 $38.75 N/A Lower Gwynedd Municipal Auth. N/A $29.23 N/A CCMUA (Camden County) CCMUA (Camden County) $37 26 $37.26 $34 92 $34.92 N/A N/A City of Trenton, New Jersey $28.11 $25.69 N/A Philadelphia Water Department $27.50 $21.14 $12.10 9

Implementing the Strategic Plan Vision T b A To be America's model 21st century urban water utility ‐ one i ' d l 21 t t b t tilit that fully meets the complex responsibilities of our time and our environment. Values Professionalism | Employing a highly qualified workforce that takes pride in maintaining the highest level of service maintaining the highest level of service Quality | Supplying products and services of the highest possible standards through efficiency of operation Service | Providing courteous, respectful, vigilant, and supportive services to our customers and the public 10

The US Water Industry in the 21 st Century 10 K 10 Key Trends to Watch T d t W t h • Uncertain economy • Adequacy of water resources (quantity and quality) • Aging infrastructure (expanded capital needs) • Shifting water demands (demographics and conservation) • Changing workforce, dynamic talent life ‐ cycle • New technology applications • Social media explosion • Increasing / expanding regulations Resource Recovery and Energy Efficiency (R2E2) • Cli Climate uncertainty i • Paraphrased from The Water Research Foundation, 2012 11

Strategic Plan Focus Areas g Supported by executives and management the Strategic Plan is the umbrella under which PWD Supported by executives and management, the Strategic Plan is the umbrella under which PWD makes/executes plans of action related to these areas: Financial Health Fi i l H lth W Work Force Strength and Diversity k F St th d Di it Core Service Delivery Facility and System Planning Infrastructure Investment Sustainable Operations Customer Service Support of the Business Community The slides that follow illustrate how PWD upholds its progressive strategic goals in its resource and financial planning. 12

Strong Commitment to Asset Management • Favorable, affordable CSO LTCP based on Green Infrastructure Doubling of capital re ‐ investment rate to $250+ M per g p $ p • FY2014 ‐ FY2019 Capital Improvement Program year $1.673B • Long ‐ term (25 year, $10 Billion) CIP planning horizon • Modern work order / asset mgmt systems Engineering Engineering, – Maximo, CityWorks Administration & Material Support • Water Treatment, Distribution and Storage Supply / $210 M Treatment Facilities Demand Study 13% $388 M 23% New WPCP Facility Plans Ne WPCP Facilit Plans • • Conveyance System • Sewer Assessment Plan $312 M 19% • Predictive Risk /Consequence Distribution System Model Model Major voice in DC on infrastructure funding Collector System/CSO/ • Flood Relief Strategic use of innovative financing: • $763M 46% PPP – – Green Infrastructure financing – Encouraging private sector investment 13

PWD Capital Program (in millions) $12,000 $10 000 $10,000 $10,000 $8,000 2005 $6,000 $4,600 2014 $4,000 $1,673 $2,000 $695 $695 $235 $119 $0 1 ‐ year CIP 6 ‐ Year CIP 25 ‐ Year CIP 14

Capital Fund – Sources of Funding FY 2014 and FY 2019 (in thousands) $400,000 $335,952 $335,952 $350 000 $350,000 $300,000 $277,477 $234,533 $250,000 $ , $195,733 $200,000 2014 2019 $150,000 $100,000 $36,000 $50,000 $19,800 $22,475 $19,000 $ ‐ Total Revenue Bonds Residual Fund Operating Fund (long term debt) Excludes Private, State and Federal Fund (2014 – $620 M, 2019 ‐ $312 M) 15

PWD Capital Projects Synagro Pelletization Facility| Biosolids Recycling Center New Co ‐ Generation Plant | Northeast WPCP Philadelphia New Drinking Water Storage | East Park New Sewage Overflow Storage Facility |Venice Island, Manayunk 16