RECOMMENDATION:
THAT the report entitled “The National Benchmarking Initiative for Water and
Wastewater Management Status Report” be received;
PURPOSE:
In its 2005 Business Unit Profile, Waterworks included
participation to the National Benchmarking Program for Water Activities
(Operations and Maintenance) as one of its new initiatives. This
report discusses Markham’s results within
this program and implementation of the findings for improving Waterworks operations.
BACKGROUND:
The National Benchmarking Program for
Water, Wastewater and Storm Water Management Activities
(Operations and Maintenance) started in 1997.
To date there are 31 water
utilities, 31 wastewater utilities, and 9 storm water management programs
involved in benchmarking. This is the
Town’s first year of participation. Earth
Tech, a consulting engineering company located in Markham, is
spearheading and coordinating this initiative.
In 2003, the Benchmarking initiative received
the prestigious Management Innovation Award presented by the American Public
Works Association.
DISCUSSION:
The benchmarking program is
designed so performance measures from different utilities across the country
can be easily compared. For example,
operational costs per kilometre of water main length are calculated and the
performance measures are recorded. This comparison can indicate how efficiently
the utility is being run in terms of productivity, costs, reliability and
customer satisfaction. This analysis is then used to guide
operational, managerial and financial decisions.
The most important benefit of the
Benchmarking program is the development of long term trends which will
highlight increasing or decreasing efficiency of the utility. Development of trends requires several years
of data in order to be useful for long range managerial decisions. More
value is gained with each progressive year that the municipality participates
in the initiative.
Earth Tech works closely with each
utility to ensure that data collection methods are consistent to the greatest
extent possible. This is not an exact science given that
utilities differ in size and age; have different work forces and organizational
structures; and operate under different regulations, as well as being located
in differing geographical locations. Utilities
may be reporting the same activity but the actual work activity might be
slightly different. For example, water billing could be conducted
based on actual customer meter readings, or flat rate billing could be used. It is important to fully understand the data
that is being reported.
As part of the benchmarking
process, staff from many of the participating municipalities attend a workshop
to discuss the results and operational methods.
This year the workshop was held in Montreal, Quebec and was attended by staff from forty municipalities,
including Markham. The workshop forum provides an opportunity to
discuss the data collection process and to identify areas where inconsistencies
in the data reporting may exist. In addition, the workshop provides the
opportunity for those with better performance measures to share their ideas and
innovations with others. Markham staff obtained many valuable tips on best practices and innovations
from other practitioners.
The Benchmarking Initiative
2004-2005 Report has been completed by Earth Tech and has been submitted to the
participating utilities. The complete report is available from the Waterworks Department. The data presented
in the report are current up to year 2003 and must be considered in the context
of the rapidly changing operating and regulatory environment in Ontario resulting from the Walkerton Inquiry, the Safe
Drinking Water Act and Regulation 170/03.
Since the data is more than one
year old initial analysis and conclusions are limited. Long
term trends will emerge over time as participation in the program continues.
Analysis of the benchmarking results has identified several areas that Waterworks will be focussing on for improvement with the objective of meeting or
exceeding the industry best practices in waterworks operations.
1.
Markham is currently undertaking capital works replacement and improvement
programs that represent approximately 0.3% of the total water distribution
system value. At this rate of investment the entire water
system would be replaced once every 333 years.
The “Best in the Class” utilities
are currently re-investing between 1% and 2% of the total system value annually. These
utilities will replace their entire systems once every 50 to 100 years. Since
most water distribution system construction materials cannot be expected to
remain in a serviceable condition for more than 100 years it will be important
for Markham to increase the re-investment rate significantly in
the coming years to ensure that the system remains functional and sustainable.
2.
Markham is currently operating the water distribution system very efficiently. Among
comparable “distribution only” utilities Markham had the second lowest total operating cost. This
is due in part to the fact that Markham has fewer operating staff than the national average. Other
efficiencies include lower than average costs for customer billing, use of
external contractors for emergency repairs and specialized work, and reasonably
low costs for water quality sampling. Another
contributing factor is that the number of watermain breaks in Markham is significantly lower than the national average. This
is the result of the long term corrosion protection program that Waterworks has implement for many years to protect existing iron watermains. In
addition, Waterworks has begun to implement several initiatives including
a mobile work management system that will leverage the existing Hansen work
management system for increased operational efficiency.
3.
The lower
operating costs that Markham has reported also reflect that some preventative maintenance activities
are not being implemented as thoroughly as in other utilities. For
example, in 2003 Markham was only able to inspect and cycle 2% of the main
line valves in the system. On average, utilities were exercising
approximately 40% of the valves in the system.
The “Best in the Class” utilities
were exercising 100% of the valves and have complete confidence that the line
valves can be closed or opened in emergency situations. This
weakness is being addressed by the 2004-2006 staffing initiative in Waterworks and purchase of additional equipment in 2005 and 2006. When
the Operations and Maintenance section is completely staffed at the proposed
levels a greater emphasis will be placed on preventative maintenance, and
programs such as valve exercising can be completed annually.
4.
Markham currently has a relatively low cost for customer billing services. The
current low billing costs are a result of the meter reading and billing
agreement originally entered into with Markham Hydro. These
meter reading and billing costs are expected to increase substantially when a
new agreement is reached with PowerStream.
Waterworks is working with PowerStream to develop an efficient meter reading and
billing process within the new organization and framework. Waterworks is also planning to achieve further efficiencies by implementing a
pilot program to install Automatic Meter Reading devices on new meters.
5.
The Markham water distribution system has a relatively low rate
of lost or unaccounted for water. This is water that the Town pays for through
the bulk water purchases from York Region but for which the Town is unable to
collect revenue because it is lost from the system. The
water can be lost through watermain breaks, slow leaks in the system,
unauthorized usage, fire-fighting, and system flushing to maintain water
quality. Waterworks is
planning to reduce the amount of non-revenue water by implementing district
metering areas (DMAs) which will allow more rapid detection of leaks and
unauthorized usage. They will also provide waterworks with the
potential to control pressures in the system which further reduces leakage.
6.
Consumer water
rates in Markham are less than the national average for similar water
distribution utilities. This indicates that Waterworks will have the ability to generate increased revenues in the future to
offset increasing operating costs.
By participating in the National Benchmarking Initiative Waterworks staff have been able to improve our record keeping and data analysis
capabilities. Areas where waterworks initially had
difficulty retrieving accurate data are being improved, and areas where our
records were incomplete or non-existent are being corrected. This
has resulted in an overall improvement in the Waterworks business practices.
FINANCIAL CONSIDERATIONS:
The cost of continued participation
in the National Benchmarking Initiative for Water Activities is expected to be
$13,000.00 for the 2005 budget year. The
amount can be accommodated within the waterworks operation budget account 760
998 5600 and was identified as a new initiative in the Waterworks 2005 Business Unit Profile. As Waterworks becomes more experienced and proficient with the data collection and
submission process, a reduction in the annual participation fees will be
possible.
Waterworks will be evaluating the benefit of participating in
the wastewater benchmarking process as a new initiative for the 2006. The
additional cost to participate in the benchmarking initiative for wastewater activities
is expected to be $13,000.00 per year.
The cost for Waterworks staff to participate in the 2006 Benchmarking
Initiative workshop is expected to be approximately $1500.00 per person
including travel costs. The additional
cost will be brought forward for consideration in the 2006 annual waterworks
budget.
BUSINESS UNITS CONSULTED AND AFFECTED:
The Asset
Management Section within the Operations and Asset Management Department has
been consulted and concurs with the recommendations.
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Jerry Klaus, C.E.T.
General Manager, Waterworks
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Peter
Loukes, P. Eng.
Director,
Operations and Asset Management
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Jim Sales,
Commissioner
of Community & Fire Services
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Q:\Commission
Share\Operations and Asset Management\Reports\2005\Waterworks\The National
Benchmarking Intitiative (May 30).doc
