CAPITAL IMPROVEMENT PROGRAM (CIP) MANAGEMENT & TRACKING PROCESS, SYSTEMS, & PEOPLE APPROACH

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1 CAPITAL IMPROVEMENT PROGRAM (CIP) MANAGEMENT & TRACKING PROCESS, SYSTEMS, & PEOPLE APPROACH ABSTRACT Aditya Ramamurthy, PMP, ARCADIS US, Inc. Like most water and sanitary sewer utilities around the nation, rehabilitation and/or replacement of aging sanitary sewer infrastructure is a top priority for the City of Virginia Beach, Department of Public Utilities (DPU). The City is currently mandated to be in compliance with the regional Consent Order and is also in the process of developing a mandatory, multi-year, rehabilitation implementation plan. As a result, limited capital improvement program (CIP) funds are available for other programs. With an industry new-normal of having to do more with less, prioritization and effective program/project management of all capital programs is critical and necessary. The objective of this initiative is to develop a robust change management process to efficiently plan for CIP project funding needs, track CIP project schedules, encumbrances and expenditures, and train Sewer Pump Station Project Managers with the adoption of the methodology. DPU s sanitary sewer system is comprised of more than 1,621 miles of gravity sewer lines, 190 miles sewer force main, and 406 sewer pump stations. Given that the typical useful life of a sewer pump station is approximately 50 years and in order to stay ahead of the pump station deterioration rate, it is DPU s intent to replace approximately 8-10 pump stations each year resulting in significant annual capital investments. Upgrades or rehabilitation of 406 sewer pump stations experiencing hydraulic, mechanical, safety, or structural problems and stations subjected to corrosion and odor problems falls under the purview of the Pump Station Modifications program, making it one of the largest and the most complex programs within DPU s annual CIP. The Process-Systems-People methodology has been adopted and is being actively implemented for the Pump Station Modifications program. The process has been established, necessary information management systems have been aligned, and all Sewer Pump Station Project Managers have been trained to successfully implement this methodology. This presentation will describe the methodology used by the City of Virginia Beach, DPU as part of a process-systems-people approach to program management of the Sewer Pump Stations Modifications Program by developing a standardized program/project management framework, leveraging existing technology, and training Sewer Pump Station Project Managers to manage the City-owned, operated, and maintained sewer pump stations. The change management approach that identifies the requirements, systems and resource dependencies of capital program management in

2 order to depict critical program and project management Key Performance Indicators (KPI) and make them accessible to key stakeholders within DPU will also be presented. INTRODUCTION The purpose of the work effort described in this paper is to provide the City of Virginia Beach Department of Public Utilities (DPU) with a robust and systematic process to manage, track, report, and annually administer its CIP projects. The information contained in this paper supports an efficient CIP funding management strategy built from a strong foundation based on asset management principles. This also helps DPU to ensure financial sustainability and assist management and staff with the efficient and effective implementation of CIP projects. These concepts are in alignment with key elements of DPU s Asset Management Program Vision including: Implement a unified and consolidated Departmental strategy for meeting goals related to regulatory compliance, customer service, management of resources and management of infrastructure assets Improve the process of identifying, comparing, prioritizing and implementing Capital Improvement Projects (CIP) for existing infrastructure Encourage better communication and collaboration across the Department to promote more efficient operations Improve education and communication with City Council and other stakeholders BACKGROUND DPU provides water and sanitary sewer services to over 441,000 citizens within the City of Virginia Beach. The water distribution system is comprised of 11 water tanks, 8 water pump stations, and more than 1,580 miles of water mains. The sanitary sewer system is comprised of more than 1,621 miles of gravity sewers (including laterals) and more than 190 miles of sewer force mains. Additionally, DPU plans, designs, constructs, operates, and maintains 406 sewer pump stations. Capacity of these pump stations range from 80 gallons per minute (gpm) to approximately 3,700 gpm. Management of these sewer pump stations and associated assets are funded out of Sewer Pump Stations Modifications Capital Program. The Sewer Pump Stations Modification Capital Program is managed and administered by a Program Manager and supported by approximately Project Managers. Key stakeholders involved in the management of this program include, DPU Engineering Division, DPU Operations Division, City Attorney Office (Deeds), Department of Public Works (DPW) Survey Department, Consultants, Contractors, and citizens. Together, this Capital Program encumbers approximately $6 million to $8 million annually and designs and/or constructs approximately 7 to 8 pump stations annually. Given that the typical useful life of these pump stations are approximately 50 years, it is

3 critical that approximately 8-10 pump stations are rehabilitated or replaced annually. The Sewer Pump Stations Modification program funds the replacement and/or rehabilitation of pump station projects. This capital program also funds pump station rehabilitation projects such as wet well rehabilitation, HVAC replacement, and electrical assets rehabilitation and are primarily driven by the age and condition of these asset groups. Sewer Pump Stations are identified and prioritized for rehabilitation or replacement based on the following: Input from the Operations and Maintenance (O&M) crew Review of SCADA data Capacity issues identified by the Planning and Analysis Bureau at DPU Engineering Condition of assets at the pump station Age of assets within certain asset groups (HVAC, Wet Well assets, Electrical assets) In order to successfully design and construct the sewer pump stations based on the above criteria, the following engineering approach has been adopted: Pre-Preliminary Engineering Report (Pre-PER) Phase This is typically an internal initiative process where a detailed desktop assessment of the selected pump station is conducted by Sewer Pump Station Project Managers. Service area maps, pressure data, capacity, run time statistics, rain gauge data, and master planning reports are reviewed by multiple Project Managers. Results of this assessment are presented to the pump station committee at the monthly pump station committee meeting. Based on this evaluation, Project Managers recommend if the pump station should be rehabilitated or replaced. If the pump station has to be rehabilitated, specifics on assets/asset groups (wet well, HVAC, and/or electrical assets) that need to be replaced is recommended Preliminary Engineering Report Phase (PER) As part of the PER phase, a detailed on-site field inspection, data collection, preliminary design calculations, and existing station viability analysis is conducted at the pump station. Based on the recommendations of the viability analysis, preliminary design (35% Design) is completed as part of this phase. Preliminary design includes the development of site layout and staging plan, elevation view plan, off-site improvement plans, traffic control plans, detailed design calculations, and cost estimates. Site Acquisition Any site acquisition associated with the replacement of a pump station is coordinated with the Real Estate Division within the Public Works Department. The Real Estate

4 Division further coordinates with the Survey Division within Public Works and the City Attorney s office. Design Phase As part of the Design Phase, all engineering services associated with the preparation of final design, development of project manual, construction drawings, including the interaction with the associated regulatory agencies is completed. Additionally, documentation associated with bid preparations and the bidding process is completed as part of this phase Construction This phase involves the construction and construction management of rehabilitation or replacement of a pump station and/or its associated assets. The Design Phase is either completed in-house or contracted out to Consultants as part of Annual Services Engineering Contracts, whereas the Construction Phase is contracted out based on a formal bidding process. METHODOLOGY Replacement of a pump station typically takes 2-3 years to complete. At any given time, Sewer Pump Stations Project Managers manage multiple pump stations in various stages of either replacement or rehabilitation. Although a well-documented engineering process discussed above, is in place and used by Project Managers to design, construct and/or rehabilitate sewer pump stations, there was no formal process in place to efficiently and effectively manage, track, and report status and performance of these projects. With a need to rehabilitate or replace approximately 10 pump stations each year, a standardized Process-Systems-People approach was used for efficient and effective management of this program. Additionally, this necessitated an automated process to manage, track and report project status and performance of all pump station projects. PROCESS SYSTEM PEOPLE APPROACH PROCESS Project Schedule Management As a first step, it was critical to understand all the existing processes that were being utilized by the Project Managers to Manage each individual pump station project and identify potential gaps and areas of improvement. Although scope and budget for the project were well defined and documented as part of the Engineering assessment phases, there was no standardized process to measure and report schedule

5 performance of these projects. It was therefore important to establish standardized schedule management templates for all projects under the purview of this program. As part of the schedule development process, a work breakdown structure was established, tasks were identified and defined, and duration for each task was assigned for all pump station projects. These steps ensured that a baseline schedule with timelines and costs was established for all pump station replacement projects and could be used to track and report project performance from a schedule stand-point. This would enable the Project Managers to manage costs, identify and address schedule delays and effectively plan the management of a project. Automated Financial Reporting In order to enable an automated process to track and report project performance, it was critical to ensure that individual project activities (design, construction, design study etc) for each pump station project are uniquely tracked in the City s enterprise financial system. Historically, projects were tracked at a program level in the financial system. As a result, the granularity of financial metrics was limited at a program level. For example, the financial system reported the amount of program expenditures or encumbrances for design projects but did not provide a breakdown of the expenditures or encumbrance at an individual project level. In other words, it was not possible to ascertain from the data in the financial system the actual expenditure or encumbrance for a particular project within a capital program. Additionally, the monthly financial metrics had to be computed manually for stakeholder reporting purposes resulting in increased Project Manager time. In order to accomplish the above business need, a process change workflow associated with the creation of accounts in the financial system for each project resulting in the tracking of financial data at an individual project level was developed and implemented. As a result of this process change, it is now possible to report on the exact project encumbrance for the design of a sewer pump station project.

6 Project Management Adoption With schedules being developed for each project, it was important to create, adopt and subsequently track schedule performance for each project directly within the project management system rather than stand-alone systems or databases. Having all the data in one enterprise system will provide the opportunity to automate tracking and reporting of data. An additional benefit to adopting and tracking the projects in the City s project management system is the elimination of redundant data sources and project management steps resulting in significant time saving opportunities for Project Managers. SYSTEMS In order to track and report progress of projects, it was important to understand existing information system capabilities and functionalities. At the City of Virginia Beach, Project Planning and Tracking Systems (PPATS) is the project management system of choice and the finance module of Integrated Services In The Enterprise (InSITE) system is the system of choice for financial reporting. It was therefore critical to leverage these two enterprise systems to track and report progress of projects. A detailed system assessment was performed on PPATS and InSITE to evaluate their respective capabilities and functionalities. The goal was to leverage existing technology instead of investing in new enterprise/custom technology applications. The detailed system assessment indicated that PPATS has the ability to manage, track and report schedules for each project. However, this application is outdated and did not provide the flexibility to report all the desired performance measures. Similarly, the detailed system

7 assessment indicated that InSITE recorded all the financial transactions such as capital project encumbrances, capital project expenditures, and available funding. Although, InSITE has reporting capabilities the desired reports were not readily available and had to be developed. With the implementation of the process changes discussed in the PROCESS section above, Project Managers now manage project data for pump station projects (scope, budget, and schedule) in PPATS, and financial information for capital projects is being tracked and reported at a project level in InSITE financial system. However, despite the fact that PPATS and InSITE are enterprise systems, these two systems are not setup within the City s Information Technology framework to seamlessly exchange and report information. As a result, an existing enterprise reporting system currently used by the City was utilized to develop performance tracking and reporting dashboards. Performance Tracking and Reporting Dashboards As noted above, due to the existing limitations in PPATS and InSITE, it was determined to develop performance tracking and reporting dashboards using existing enterprise reporting systems. Here again, the emphasis was to leverage existing technology in use within the City rather than procure new systems and technologies. The performance tracking and reporting dashboards were designed to seamlessly draw relevant data from the two enterprise source systems and report the information on the dashboard in a logical and meaningful way. As a result of this dashboard, sewer pump station Project Managers are able to review both financial information and project management information (scope, budget, and schedule) in one location for any individual Sewer Pump Station Project Manager or for a specific pump station project. Additionally, as this dashboard provides all applicable CIP data in one location, Program Managers save significant amount of time by not having to gather and consolidate individual project information from various data sources. Some of the Key Performance Metrics that are being developed and implemented on the dashboard include: Percentage of annual planned funds to available funds Cost management metric Percentage of CIP projects that are on schedule - Schedule management metric Percentage of CIP funding managed by a Project Manager Resource management metric Percentage of CIP projects managed by a Project Manager Resource management metric The performance tracking and reporting dashboards have been designed to leverage data associated with the above metrics directly from the source systems (InSITE and PPATS) to automatically compute and report information. These dashboards provide

8 a schedule and cost performance status on ongoing CIP programs and projects and allow for comparison across CIP programs and between CIP projects. PEOPLE Change Management Adoption of any process change is typically a challenge within any organization. To change the way business is conducted is one of the most challenging tasks to implement. If there is no universal adoption of such process changes, the true impact of the process and system changes will not be realized within the organization and will render the entire effort futile. The sewer pump station Program Manager organized a series of meetings with sewer pump station Project Managers and emphasized the need to adopt and apply these process changes. Initially, significant resistance to change was observed (mostly due to existing deficient systems), but as Project Managers began to use the new process and were able to see the benefits of these changes, adoption of the process was more acceptable and achievable. Additionally, having strong Executive Committee sponsorship further reinforced the need for the adoption of the process changes. Strong Executive Committee sponsorship combined with multiple Project Manager Meetings to demonstrate the true value and potential of these process changes enabled the implementation of a successful change management process Process Change Training Another critical aspect to successfully adopt newly implemented processes has been extensive Project Manager training. Multiple training sessions were setup to communicate all the new process changes and train the Project Managers in the use of associated systems. These training sessions not only communicated the details of the process changes, but also constantly emphasized the macro level need and value of this process change from an organizational level. As a result, Project Managers at all levels in the organization were able to appreciate the impact of the process changes at an organizational level. In addition to training, detailed reference documentation (SOPs, Process change memorandum etc) was also developed and distributed to all Project Managers for future reference and use.

9 RESULTS The following overarching goals of this effort were successfully accomplished: Developed and implemented robust business processes that will enable efficient and effective management of CIP Programs Leveraged existing technology for data management Communicated and trained Project Managers and empowered them to own and use the new process Fostering a dynamic process that can consistently respond to changing business needs and drivers Specific results of this effort include: The pump station modification program has developed and adopted standard schedule management (with standard tasks and task durations) methodologies to manage the implementation of all pump station projects. Most all standalone systems and databases used by individual Project Managers have been eliminated. All project management data is now recorded in the enterprise project management system (PPATS) All financial management data is now recorded in the enterprise financial management system (InSITE). Financial Reporting Process Change Memorandum documentation has been developed and outlines all the process change steps. Performance Reporting and Tracking Dashboards were developed and are leveraging data directly from the enterprise systems. This process has been automated and has significantly reduced project manager reporting and tracking times. Standard Operating Procedures (SOPs) with step-by-step guidance have been developed to assist Project Managers with change management. Project Manager training sessions have been held to communicate, train, and empower Project Managers with process and system changes With the successful implementation of this Process-Systems-People approach on the Sewer pump station modifications program, this approach is currently being implemented for all the water and sanitary sewer Capital Improvement Programs within DPU. Given the existing limitations in PPATS, an inter-departmental collaborative effort is underway to evaluate potential upgrades or replacement of PPATS with a

10 more current project and program management enterprise system. It is noted that regardless of which system is selected, processes and data developed as part of this approach is expected to be seamlessly transitioned into the new system. New Sub-Project Account Creation InSITE PPATS Adoption PPATS PPATS NEEDS ASSESSMENT InSITE Reports InSITE TRACKING & REPORTING DASHBOARD CONCLUSIONS While DPU has been proactive in operating and maintaining its infrastructure to ensure regulatory compliance and service level commitments are met, this work effort provided a formal approach to efficiently and effectively manage track and report performance and status of capital projects. One of the most compelling success stories of operational optimization at DPU is process automation and reporting maturity achieved through the monitoring, tracking, and reporting of performance metrics associated with delivery of existing Capital Projects. DPU Project Managers have adopted a standardized program management process through the native technology systems available. The department-wide adoption of the PPATS is demonstrating to the DPU program management team the benefits of a standardized schedule management and reporting approach, leveraging past investment in existing technology, and is enabling DPU CIP Project and Program Managers to proactively administer, track, and report performance of all DPU CIP Project through a scalable, secure and dynamic dashboard built in the enterprise reporting system.

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