An Example: Tying Together Service Levels, Lifecycle Costing, and the Triple Bottom Line 100+908070605040302010 5 Estimated Number of Sewer Backups per Year Regulatory non-compliance costs Environmental/ social costs Claims costs Labor and equip. costs Chemical root treatment costs Proactive CCTV costs Grease abatement costs $$ 100% Reactive 100% Proactive A Sample A Sample “ “ Bathtub Curve Bathtub Curve ” ” for the Sewer Maintenance Program for the Sewer Maintenance Program An Example: Tying Together Service Levels, Lifecycle Costing, and the Triple Bottom Line 100+908070605040302010 5 Estimated Number of Sewer Backups per Year Regulatory non-compliance costs Environmental/ social costs Claims costs Labor and equip. costs Chemical root treatment costs Proactive CCTV costs Grease abatement costs Pipe rehab costs $$ 100% Reactive 100% Proactive A Sample A Sample “ “ Bathtub Curve Bathtub Curve ” ” for the Sewer Maintenance Program for the Sewer Maintenance Program An Example: Tying Together Service Levels, Lifecycle Costing, and the Triple Bottom Line 100+908070605040302010 5 Estimated Number of Sewer Backups per Year Regulatory non-compliance costs Environmental/ social costs Claims costs Labor and equip. costs Chemical root treatment costs Proactive CCTV costs Grease abatement costs Pipe rehab costs $$ 100% Reactive 100% Proactive SPU is here SPU wants to be here Exponentially rising costs: Total backup elimination cannot be achieved A Sample A Sample “ “ Bathtub Curve Bathtub Curve ” ” for the Sewer Maintenance Program for the Sewer Maintenance Program Data and Data Systems Asset Data l Age, material, location, etc l History (problem history, maintenance history, etc) l Condition l Consequence of failure Data Systems l Provide for analysis l Mobile systems l Asset costing Pre - 1900 1900-1909 1910-1919 1920-1929 1930-1939 1940-1949 1950-1959 1960-1969 1970-1979 1980-1989 1990-1999 2000-Present 0 50 100 150 200 250 300 350 Miles of Pipe Decade Installed Total Length of SPU Sewer and Drainage Pipe (By Material Type and Decade of Installation) Brick Vitrified Clay Asbestos Cement Concrete (Reinforced & Non-Reinforced) Benchmarking l Determine how best to conduct benchmarking l Strive for best in class l Strive for continuous improvement l Commit to benchmarking over time Benchmarking Assess our performance relative to others through benchmarking Water Services Association of Australia Civil Maintenance Benchmarking Results Seattle l Insert overall chart - functional level Water Overall Comparison with International Benchmarking Participant Group – Function Level l Insert overall chart - Corporate Policy and Business Planning Water Overall Comparison with International Benchmarking Participant Group – Process Level – Corporate Policy and Business Planning l Insert overall chart - Asset Capability Forward Planning Water Overall Comparison with International Benchmarking Participant Group – Process Level – Asset Capability Forward Planning l Insert region chart – Function level Water Comparison with North America Participant Group – Function Level l Insert 2004 to 2008 chart – function level Water 2004 to 2008 Comparison – Function Level l Insert BD chart for participant and region Business Driver Comparison to North America Group Financial Results of Applying the Principles of Asset Management SPU Results to date Seattle Public Utilities' Forecast for a Typical Residential Bill: 2002 vs. 2004 $- $20.00 $40.00 $60.00 $80.00 $100.00 $120.00 $140.00 Forecast Year Total Monthly Bill and Bill by Service Water Solid Waste Sewer Drainage Water $26.08 $23.83 $31.48 $25.62 $37.36 $33.07 Solid Waste $21.97 $20.35 $23.43 $21.47 $25.60 $23.59 Sewer $35.64 $30.68 $42.63 $37.89 $47.40 $45.72 Drainage $9.97 $9.20 $13.91 $13.84 $16.21 $17.90 2004 - '02 Forecast 2004 - '04 Forecast 2007 - '02 Forecast 2007 - '04 Forecast 2010 - '02 Forecast 2010 - '04 Forecast $93.66 $84.04 $111.45 $98.82 $126.57 $120.28 $9 to $10 less $12 to $13 less $6 to $7 less SPU Water Fund Results to Date Projected Water Capital Spending: 2002 Forecast vs. Today $- $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 $110 $120 $130 Projected CIP Expenditures by Year Millions $ September 2002 Forecast August 2005 September 2002 Forecast $119.52 $88.72 $94.47 $110.99 $107.38 $93.85 August 2005 $93.60 $62.50 $72.10 $84.90 $107.30 $71.90 2003 2004 2005 2006 2007 2008 SPU Water Fund Results to Date Projected Water O&M Spending: 2002 Forecast vs. Today $- $10 $20 $30 $40 $50 $60 $70 Projected Operations and Maintenance Expenditures by Year Millions $ September 2002 Forecast August 2005 September 2002 Forecast $53.27 $56.23 $59.17 $60.89 $62.52 $64.40 August 2005 $54.47 $55.80 $57.89 $58.70 $60.17 $61.67 2003 2004 2005 2006 2007 2008 Financial Results – Immediate Capital Budget Reductions Seattle Public Utilities CIP Spending (2002-2007) $- $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 $160.0 $180.0 $200.0 2002 2003 2004 2005 2006 2007 Fiscal Year Millions of Dollars Total CIP Water CIP DR & WW CIP 37% Decrease in CIP Spending (~$40M) in 1 Year Financial Results – Immediate Capital Budget Reductions Seattle Public Utilities CIP Spending (2002-2007) $- $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 $160.0 $180.0 $200.0 2002 2003 2004 2005 2006 2007 Fiscal Year Millions of Dollars Total CIP Water CIP DR & WW CIP Financial Results - Continued O&M Budget Reductions  Relative to the 2004 budget projection the 2004 actuals were reduced by 6% (about $16M) and the 2006 projection was reduced by 3% (about $7M)…Results are complicated and ongoing though Increasing Cash Contribution to Capital Investments Fund Fund 2003 2003 2004 2004 2005 2005 Water Water 19% 19% 30% 30% 22% 22% Drainage & WW Drainage & WW 5% 5% 15% 15% 15% 15% Solid Waste Solid Waste 6% 6% 48% 48% 30% 30% Revenue requirement: “bookend” scenarios . $35. 64 $30.68 $42 .63 $37.89 $47 .40 $45 .72 Drainage $9.97 $9.20 $13.91 $13. 84 $16.21 $17.90 20 04 - '02 Forecast 20 04 - ' 04 Forecast 2007 - '02 Forecast 2007 - ' 04 Forecast 2010. Results of Applying the Principles of Asset Management SPU Results to date Seattle Public Utilities& apos; Forecast for a Typical Residential Bill: 2002 vs. 20 04 $- $20.00 $40 .00 $60.00 $80.00 $100.00 $120.00 $ 140 .00 Forecast. Curve ” ” for the Sewer Maintenance Program for the Sewer Maintenance Program An Example: Tying Together Service Levels, Lifecycle Costing, and the Triple Bottom Line 100+908070605 040 302010 5 Estimated