ALAN S. DILLON NEW JERSEY BUREAU OF SAFE DRINKING WATER NEW JERSEY WATER ASSOCIATION OCTOBER 21, 2015 CAPACITY DEVELOPMENT LONG TERM VIABILITY Capacity Development Program Background Technical Capacity: Refers to the adequacy, operation and maintenance of the system s infrastructure. Infrastructure includes the source water, treatment, storage and distribution network of the water system. Refers to the ability of qualified personnel with technical knowledge to operate and maintain the system. Capacity Development Program Background Managerial Capacity: Refers to the expertise required of the personnel who administer the overall system operations. Refers to the system s demonstration of clear ownership, organized staffing, effective interaction with regulators, and effective interaction with customers Capacity Development Program Background Financial Capacity:FF Refers to the monetary resources available to a water system to support the cost of operating, maintaining, and improving the water system. Refers to the demonstration of sufficient revenues, credit worthiness and fiscal management and controls. 1
OPERATORS Public health is rapidly expanding both in scope and in the application of technical methods. The necessity for training was an important reason for the passage of laws in 1918 requiring licenses for persons employed as superintendents or operators. The necessity for employing trained and qualified personnel has become imperative. Preface to the New Jersey State Department of Health s Rules and Regulations on Licensing of Superintendents or Operators of Public Water Treatment Plants, Public Sewage Treatment Plants, and Public Water Supply Systems, published 1966. NEW JERSEY REGULATIONS CLASS 3 & 4 WATER SYSTEMS NEED FT OPERATOR FULL TIME OPERATOR 7 HOURS PER DAY, 5 DAYS PER WEEK, 35 HOURS PER WEEK EXCEPTION - FULLY AUTOMATED SYSTEM NEW JERSEY OPERATORS 2010 FACILITIES T-3 33 T-4 36 OPERATORS 206 168 Is there really an operator shortage in New Jersey? TREATMENT CLASS SYSTEMS LICENSEES T 1 372 472 T 2 156 618 T 3 32 222 T 4 38 174 TOTAL 598 1,486 DISTRIBUTION CLASS SYSTEMS LICENSEES W 1 115 436 W 2 190 586 W 3 76 210 W 4 26 176 TOTAL 407 1,408 Looks like there s enough after all.. SO WHAT S ALL THE FUSS ABOUT???? Sept 2015 data 2
NEVER TRY TO TEACH A PIG TO SING IT S A WASTE OF YOUR TIME AND IT ANNOYS THE PIG BSDW RESPONSE IF WE CAN T DEFEND A DECISION BASED ON REGULATION, RATIONALITY AND THE PROTECTION OF PUBLIC HEALTH, WE SHOULDN T HAVE MADE IT IN THE FIRST PLACE. RESOLUTION CAPACITY DEVELOPMENT CAPACITY DEVELOPMENT PROTOCOL FOR NEW REQUESTS DO T-3 & T-4 FACILITIES HAVE SUCCESSION PLANNING IN PLACE? DO UTILITIES ALLOW APPROPRIATE TRAINING FOR IN HOUSE STAFF TO ACHIEVE AND MAINTAIN CERTIFICATION? DO YOU PRACTICE FULLCOST PRICING? CAPACITY DEVELOPMENT PROTOCOL FOR NEW REQUESTS DO YOU HAVE AN ASSET MANAGEMENT PLAN?? WHY DO MUNICIPAL BUDGET SHORTFALLS AFFECT WATER SYSTEM OPERATIONS?? BSDW Succession Planning Survey of T 3 and T 4 Systems 69 systems surveyed, 68 responses 1) Operator s Name, License held, Hours/week 2) Back up Operator s Name, License held, Hours/week 3) List all licensed personnel and T license held 4) If you plan to have staff certified, indicate anticipated time to acquire each level of license 5) Do you plan to hire outside personnel? 3
Do systems in NJ have adequate coverage? GOOD NEWS 44 of 69 had full time LO, full time backup LO and holding appropriate licenses 2 had issues with primary LO coverage 14 had issues with back up LO coverage 9 had issues with both Working cooperatively with systems to ensure adequate coverage Since the survey, some issues resolved: primary LO coverage Was 2, Now zero back up LO coverage Was 14, Now 4 Both Was 9, Now zero OPERATOR CERTIFICATION OPERATOR CERTIFICATION NJDEP PROVIDES FULL TUITION DISCOUNT FOR INTRODUCTORY AND ADVANCED COURSES IF YOU ARE ELIGIBLE TO TAKE THE TEST. NJDEP PROVIDES 50% DISCOUNT FOR OPERATORS WHO ATTEND RUTGERS UNIVERSITY OPERATOR TRAINING CENTER COURSES. NJDEP ALLOWS UNIVERSITY OF CALIFORNIA-SACTO COURSE TO SUBSTITUTE FOR INTRO COURSES. NJDEP PROVIDES FREE CONTINUING EDUCATION THROUGH NEW JERSEY RURAL WATER. NJDEP PAYS FOR INITIAL LICENSING AND TESTING FEES FOR VSWS OPERATORS. NJDEP SUBSIDIZES NJAWWA CONTINUING EDUCATION COURSES. CAPACITY DEVELOPMENT Exam Pass Rates NJDEP HAS SUPPORTED THE CREATION OF A NEW CIVIL SERVICE POSITION REGARDING OPERATOR APPRENTICESHIPS. NJDEP HAS PROPOSED A NEW OPERATOR APPRENTICESHIP PROGRAM IMPORTANT ASPECT OF THESE PROGRAMS ARE THAT THEY ARE PERFORMANCE/GOAL BASED. T 1 T 2 T 3 T 4 ALL T # # % # # % # # % # # % % pass exam pass pass exam pass pass exam pass pass exam pass pass 2010 46 103 44.7% 31 87 35.6% 17 37 45.9% 1 16 6.3% 39.1% 2011 63 121 52.1% 46 111 41.4% 17 39 43.6% 8 2828.6% 44.8% 2012 52 118 44.1% 38 90 42.2% 10 28 35.7% 5 1435.7% 42.0% 2013 49 116 42.2% 39 87 44.8% 13 42 31.0% 3 1717.6% 39.7% 2014 58 102 56.9% 39 67 58.2% 18 51 35.3% 12 23 52.2% 52.3% 4
New Operators Sustainability T 1 T 2 TOTAL 2010 46 31 77 2011 63 46 109 2012 52 38 90 2013 49 39 88 2014 58 39 97 What can I do to ensure my utility has adequately trained and certified staff to operate it? YOU CAN PREPARE YOURSELF Resource Strategies for Recruitment and Retention of Utility Personnel Workforce Planning for Water Utilities Successful Recruiting, Training, and Retaining of Operators and Engineers 2008 study co sponsored by AWWA Research Foundation and USEPA http://www.waterrf.org/publicreportlibrary/91237.pdf 1) Marketing attractors to the industry and to your utility Top attractors to young people (hiring) Most effective retention strategies 2) Broadening the pool of candidates Standard certification reciprocity agreements between States Streamlining hiring policies (e.g., residency requirements) Retirees, displaced workers, veterans 3) Developing standard training programs, apprenticeships Relationships with educational institutions How to Get Started Questions for You 1) Gap Analysis Inflows and outflows anticipated next 5 years 2) Workforce Practices Assessment Compare current practices vs. most effective practices 1) Does your system currently have adequate coverage? 2) Do you have a succession plan for your system? 3) If your operator left tomorrow, how easily can a new operator take on the job? 5
DUTIES AND RESPONSIBILITIES DUTIES AND RESPONSIBILITIES T-1 Regularly check the system status of flows. WORK IN PROGRESS Adjust chemical feed rates, calculate dosage rates and add chemicals as needed. Confirm chemical strength, prepare chemicals, and measure amount chemical used. Minimum time required 2-5 hours weekly. DUTIES AND RESPONSIBILITIES T-2 Backwash pressure filters as required. DUTIES AND RESPONSIBILITIES T-3 Monitor additional groundwater unit operations Adjust chemical feed rates, calculate dosage rates and add chemicals as needed. Confirm chemical strength, prepare chemicals, and measure amount chemical used. Minimum time required 5-20 hours weekly. Operate simpler surface water treatment facilities to with regard to turbidity reduction and evaluation CT requirements. Full time 35 hour week DUTIES AND RESPONSIBILITIES T-4 Monitor multiple additional sophisticated groundwater unit operations Operate largest and most sophisticated surface water treatment facilities with regard to turbidity reduction and CT evaluations. Full time 35 hour week DUTIES AND RESPONSIBILITIES W-1 Monitor water system pressure and storage facilities Conduct valve exercise program Estimated time 2-5 hours per week 6
DUTIES AND RESPONSIBILITIES W-2 Same responsibilities as W-1 Estimated time requirement is 5 to 20 hours per week DUTIES AND RESPONSIBILITIES W-3 Same responsibilities as W-1 with additional monitoring of differential pressure gradients, booster stations and storage facilities Estimated time requirement is 35 hours per week DUTIES AND RESPONSIBILITIES W-4 Same responsibilities as W-3 O&M MANUAL http://www.nj.gov/dep/watersupply/doc/ops_plan_temp.doc Estimated time requirement of 35 hours per week. O&M MANUAL O&MANUAL 7
O&M MANUAL O&M MANUAL O&M MANUAL CUPSS EPA s Asset Management Tool Check Up Program for Small Systems What is CUPSS? Check Up Program for Small Systems Designed for small and medium-sized drinking water and wastewater systems Establishes and keeps track of goals and milestones Saves time by storing all information in one place Track inventory, tasks, and finances Develop a personalized Asset Management Plan Get CUPSS FREE download at: www.epa.gov/cupss/ At this site, you can also: Register your copy of CUPSS Find training events Learn more about asset management 8
Asset Inventory What assets do I have? When was it installed? How much did it cost? When was the last major repair? What maintenance will you perform on it this year? What is the typical routine maintenance and when is it performed? Do you have or know where to get replacement parts? Will you be financially prepared to replace a major component if it fails? O&M Tasks What are routine tasks? How often are they performed? Do you keep records of completing these tasks? Where? How do you ensure that tasks are completed? Finances CUPSS MODULES What are my sources of revenue? What are my expenses? How much will it cost to repair/replace an asset? When will I have to repair/replace an asset? 1) My Inventory 2) My O&M 3) My Finances 4) My Check Up Reports 5) My CUPSS Plan 9
My Inventory Identify your assets Basic Information Type, Name, Location Status and Condition Condition, Consequence of Failure (CoF), Redundancy, Can asset be repaired/replaced? Cost and Maintenance Installation Date, Original Cost, Expected Useful Life, Replacement Cost, Frequency of Routine Maintenance Manufacturer and Supplier Model Number, Manufacturer, Supplier Name, Address/Contact of Supplier My Inventory (cont.) Create/edit a personalized schematic Visual representation of all assets My Capital Improvement Projects Lists all assets that need to be repaired, rehabilitated, or replaced and recommended dates of action Asset Risk Matrix A graph that shows the risk category of each asset Plots the probability of failure against the consequence of failure for each asset 10
My O&M Create future O&M activities Schedule tasks Daily, Weekly, Monthly, Annual Tasks Track current O&M activities Alerts you if a task is past due Print work orders 11
My Finances Revenue - User rates, Grants, Loans/bonds, Reserve fund, Interest, One-time fees, Bulk sales, Contract sales, Product sales, Other Expenses - Maintenance, Equipment costs, Salaries and benefits, Supplies, Chemical costs, Contracts, Utility costs, Monitoring and testing, Emergency costs, Rent or mortgage, Insurance, Services, Training costs, Billing costs, Fees, Security, Capital improvements, Debt payment, Capital reserve contribution, Emergency reserve contribution, Other Graph your Financial Data Shows aggregated totals for actual and budgeted revenue and expenses for each year 12
Operating Ratio = Operating Revenue Operating Expense High ratio indicates operating efficiency (expenses low relative to revenue) Debt Ratio = Total Liabilities Total Assets Measure of utility s debt Sales Ratio = Sales Total Revenue Low ratio indicates utility is overly reliant on outside funding Expense Ratio = Operating Expense Total Expense High ratio indicates most expenditures are for operations. Low ratio indicates that utility is not likely to meet capital-related expenses, which may cause system to deteriorate more rapidly. My Check Up Reports 1) My Asset Check Up Displays summary report of all assets 2) My Financial Check Up Assists with long-term financial planning Estimates capital improvement needs based on asset consequence and probability of failure Anticipates future growth of system Anticipates cost increases due to inflation 13
My CUPSS Plan 7 steps: 1) Utility Profile 2) Mission and Level of Service (LOS) Agreement 3) Critical Assets 4) O&M Strategy 5) Capital Improvement Plan (CIP) 6) Financial Management Strategy 7) Finalize Plan 14
More Information For more information or to download CUPSS, check out EPA s website at: www.epa.gov/cupss We plan to run CUPSS user training sessions soon If you have any questions or are interested in attending CUPSS user training, please contact: DWSRF Joe durocher (609) 292-5550 joseph.durocher@dep.state.nj.us THE PROPOSED FFY2016 PRIORITY SYSTEM, INTENDED USE PLAN AND PROJECT PRIORITY LIST DOCUMENT DRINKING WATER FINANCING The Proposed Priority System document is posted on the Department s web site at http://www.nj.gov/dep/watersupply/dws_loans. html and look for Proposed 2016 IUP Engineering Services Contract In March 2014, NJDEP approved a $400,000 contract with New Jersey Water Association. Systems serving less than 3,300 customers may access a pre approved list of consulting engineers to provide assistance in assessing needs of system and assistance in completing DWSRF applications and submittals for systems. Includes : Development of a preliminary asset management assessment and engineer's recommendation for needed improvements, as well as lower cost alternatives, Engineering services for small water systems applying to the DWSRF loan program, such as prep of planning docs, design docs, and loan applications Small Systems Water Loan Designed to facilitate small system access to DWSRF financing Changes to the FFY2016/SFY2017 Drinking Water Revolving (DWSRF) Loan Program Eligible candidates are active public community water systems and nonprofit non community water systems serving 10,000 persons. Active is defined as systems having an active PWSID n the NJDEP s NJEMS database and who are responsible for at least two complete prior years of requisite public water system compliance sampling. 15
Very Small Water Systems Loan Very Small Water System defined as serving a population 500 DEP only loan for very small systems Can receive a principal forgiveness (PF) loan up to $500,000, as long as they supply at last 15% of the project costs themselves using outside lenders or the NJDEP base program if credit worthy Larger systems can utilize this program to make infrastructure improvements to the smaller water system that they have acquired. Small Systems Water Loan For systems serving a population 10,000 Can receive a loan up to $1M with project costs allocated as follows: 50% as Principal Forgiveness 25% as zero interest loan 25% as NJEIT market rate With priority as follows Serving population 500 Serving population 501 to 3,300 Serving population 3,301 to 10,000 Small System Loans In FFY 2016, the NJDEP will also provide VSWS or SWS loans to larger (> 10,000 statewide) more viable water systems which are willing to take ownership of small water systems in the calendar year 2015 or later, and make needed capital improvements. Therefore, the larger water systems would be eligible for the same enhanced loan terms as the otherwise eligible small water system. Restrictions to VSWS and SWS Loan Program Limit of $500,000 principal forgiveness for any individual water system in any three year funding cycle. VSWS and SWS loans are unavailable to private and public utilities who serve >10,000 persons statewide, except these larger systems can utilize the VSWS and WSWS to make infrastructure improvements to small water systems that they have recently acquired (since 2015) Principal Forgiveness for Municipally Owned Systems for Treatment of a Primary Contaminant Municipally owned systems needing treatment for a primary contaminant, as follows: 20% of total project costs (up to $2M) will be awarded as principal forgiveness loans $40% of total projects costs (up to $4M) will be awarded as zero interest loans from NJDEP 40% of total projects costs (up to $4M0 will be awarded as a loan at market rate from the Trust If total project cost is more than $10M, balance greater than $10M will be 75% zero interest from NJDEP and 25% market rate from Trust Readiness to Proceed Proposing to grant priority status to DWSRF ranked projects that are ready to proceed based on the date of project approval. A listing of active projects and key milestone dates with target dates or actual completion dates for all active drinking water projects on the DEP website and the NJEIT website will be posted quarterly. Strong incentive for applicants to submit necessary application related documents and secure approvals as soon as possible. 16
How Readiness to Proceed affects PF Projected amounts of principal forgiveness funds must be less than 30% of the capitalization grant. For the FFY 2016 fiscal year, principal forgiveness money will be allocated in priority order to: 1. Very Small Systems 2. Small Systems 3. Municipal systems with a primary contaminant issue Any unused principal forgiveness funds not used in a calendar year will be transferred to the next calendar year. Equipment Loans Proposing to reserve up to $1M for equipment purchases. For the purposes of the equipment purchase reserve, equipment is limited to portable generators and other equipment where construction services (such as the installation of a pad to support a generator) are not needed to effectuate the project. Questions? 17