Marion County Utilities

1. Marion County Utilities Performance Measurement and Strategic Planning October 12, 2012 Flip Mellinger Director Marion County Utilities Flip.Mellinger@marioncountyfl.org 352-671-8549

2. Brief History • Marion County Utilities – born in 1995 • Purchased major private Utility service area - 2001 • Purchased Florida Water Services assets – 2003 • Agreed not to raise rates for 5 years • Seriously underfunded – lacked sufficient manpower • Maintenance deferred – Assets failing • BCC forced to raise rates – Tiered Rate Structure • 5 year plan: • 9% April 2009, 9% October 2009, 9% October 2010, 4.5% October 2011, 4.5% October 2012

3. Impacts • Overall 36% rate increase + • Implementation of water conservation tiered rate structure • Some customers saw water bills more than double • Major political issue

4. Benchmarking • Utilities track: • 28 Performance data points • Higher than normal labor expenditure to track • 38 Performance Measures • Calculated from the measures above • MCU uses 22 Key Benchmarks (Goals) • Some examples……

5. Key Benchmarking Results • O&M cost per account for water operations:

6. Key Benchmarking Results • O&M cost per million gallons of water produced:

7. Resulting Goals & Objectives • Reduce direct costs per MG water produced: • Continue to regionalize • SCADA Implementation • Variable Frequency Drives / Ample Amp Motors • Rebid Chlorine Contract

8. Key Benchmarking Results • O&M cost per account for wastewater:

9. Key Benchmarking Results • O&M cost per million gallons wastewater:

10. Resulting Goals & Objectives • Reduce direct costs per MG wastewater: • Continue to regionalize • SCADA Implementation • Greater control of plants – reduced electricity • Less manpower • Upgrade / modernize facilities for efficiency • Reduced from 11 WWTPs to 6 – going to 5

11. Key Benchmarking Results • Number of Water Pipe leaks per 100 miles pipe:

12. Emergency Pipe Repairs r US

13. Resulting Goals & Objectives • Reduce number of water pipe leaks: • Continue service line replacements • Oak Run complete • Some Marion Oaks neighborhoods underway • Older sections of Silver Springs Shores next • Improved line locates – ground penetrating radar • Replace Asbestos Cement / Sched 40 Class pipe

14. Key Benchmarking Results • Number of Sewer Pipe Failures per 100 miles pipe:

15. Resulting Goals & Objectives • Reduce number of sewer pipe failures: • Increase gravity sewer maintenance • Implement video logging of trouble sewer mains • Identify breaks / root infiltration / inflow • Improved line locates – ground penetrating radar • Replace deteriorated force mains & service lines

16. Key Benchmarking Results • Customer Service Costs per Active Account:

17. Resulting Goals & Objectives • Reduce Customer Service Costs • CMMS will reduce Work Order Management • Tighter control over overtime labor • More proactive, less reactive practices • Billing Spikes • Cut-off Calls • Implement automation • AMR will improve quality of meter reading • Integrated Voice Response system

19. Accomplishments: • Significantly reduce operations and maintenance costs • $15.5M in 2008 to $11.7M in 2013 • Improve Bond ratings • Moodys from A1 to Aa3 • Standard and Poors to AA- • Refinance old Debt – net savings of nearly $5M • Reduce Rates – 9% reduction on October 1st

23. Questions?