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Home My WebLink About8 District Organization Study Agenda Item # TRUCKEE DONNER public Utility District Memorandum To: Board of Directors From: Peter Holzmeister Date: May 14, 2004 Date of Board Meeting: May 19, 2004 Subject: District organization atudy 1. WHY THIS MATTER IS BEFORE THE BOARD: This is an issue that was raised at the last strategic plan workshop. We were directed to bring this matter back to the board for discussion. 2. HISTORY: At the strategic plan meeting we discussed problems we were having in efficiently sharing information. We discussed the need to look at our entire management information system. We also discussed the fact that the District service territory has grown significantly over the last twenty years, and the District's professional capability has improved in recent years, and yet the District's organizational structure has remained essentially unchanged, except for minor adjustments. A committee was appointed to work with me to evaluate these options. The committee has met and I have met several times with the management staff. We have looked at various options. However, we have reached the point where we believe that input from an outside professional would be useful. 3. NEW INFORMATION: After we had looked at structure and management issues for some considerable time I began to feel that we may have not thought through the various issues carefully enough. Modifying an organization's management structure and information system should not be taken lightly. I decided to talk with Bob Rauch about the issues. He suggested I call Glen Reiter. I called Glen Reiter and had a lengthy conversation with him, and asked him to provide a proposal to help us further. Attached is a proposal from Glen Reiter of Reiter Lowry Associates to conduct a brief study of some issues we have raised in our review of the organization structure. Also attached is information about the Reiter Lowry firm. I would like to discuss this matter is more detail at the workshop on May 19. 4. RECOMMENDATION: This is a workshop item; no action is anticipated. ..........-............. Reiter. Lowry, Consultants 11417 West Bernardo Court San Diego, CA 92127-1639 858-61-,5-4400 858-675-9424 April 16, 2004 Mr. Peter L. HOlznlCiSter Trukee Donner Public Utility District 11570 Donner Pass Road Trukee, CA 96160 Subject: Proposal, or Phuse 1: Reconnaissance Study and Problem Identification Dear Peter, It was a pleasure speaking to you about the state of affairs at Trukee Donner Public Utility District. During our Phone conversation you shared several areas of colleen). I have listed them as follows: 1. The timely closing of work orders 2. Timely submission of field data 3. Purchasing and warehousing inventory and control 4. GIS system integration 5. Accounting for developer costs and their proper billing 6. The number of funds and cash flow tracking 7. Monthly operating and capital spending reports 8. Coordination between daily operations and new construction 9. Accessible financial information to assist management After reading the material that You provided to me, I can appreciate your desire to look at the aforementioned items. When I was the General Manager and Chief Engineer of the Otay Municipal Water District, we also went through a period where we were rapidly expanding our existing service requirements as well as developing new services. We experienced the same concerns. I will also agree with you that identifying the reason why there is a problem is the key to a good solution. For that rationale, I would suggest that we approach the study in phases. Phase I would be a reconnaissance study. The purpose would be to zero-in on what specifically needs to be examined and which workproduct should be delivered. This effort would include a 2-day on-site visit with staff to discuss the above issues and uncover any other potential concerns. We will examine how the District currently conducts its business, and which opportunities exist to improve its business practices. In addition, we would meet with staff to determine what they believe they need in the way of management information so that they may more effectively do their jobs. Since the District presently provides two essential services to the community, and is now considering expansion of its broad band service as well, a business model will be essential in developing "what if' scenarios. We have found that a business model that allows the user to change their assumptions will ultimately become an invaluable tool in making decisions and testing the outcome before the decision is implemented. To begin this process, a portion of the on-site time will be spent on examining those areas of your operation that can be modeled so that you may more effectively manage each activity. Upon completion of the on-site meeting, we would prepare a letter report which would outline the information that was discovered. We would pay particular attention to those areas that offer opportunity for improvement. In addition, we would identify the necessary tasks to resolve the specific issues that were identified during the € reconnaissance study. � 't r ekere owry. onsuitants t. --.-__. ------- It is estimated that 32 to 40 hours would be necessary to produce the Phase I letter report. The estimated cost would be $4,800 to $6,000 plus actual expenses for travel and lodging. Billing would be at$150 per hour. We have recently completed a business model for the City of Corona Electric Utility and have a great appreciation for the complexity and dynamics of the electric industry. We are currently preparing an update to the plan since the industry is constantly changing. As you are fully aware, the personal computer has provided us with a great tool to create and analyze information. The key however, is to make sure we gather and analyze the right information, not just volumes of data. We thank you for the opportunity to submit this proposal and look forward to working with you. If this proposal is acceptable please sign below and return it to us. With many thanks. Respectfully, Accepted Glenn M. Reiter Peter L. Holzmeister General Manager Re-e(> Owz}+ on.suitants xerter Lowry Consultants Page I of 2 Home Feedback Services About Us Reiter Lowry Consultants Financial e? Management conrultzng rer�nces for rpecial djS1tj6,jf andpublic agencef Special Districts and public agencies are profoundly impacted by current economic, legislative, and population changes. Challenges to productivity and revenue generation are unprecedented and call for experience-based solutions. The principals of Reiter Lowry Consultants offer 60 Years of combined experience in the engineering, design, construction, operations,governance, finances and management of large and small agencies. Contact Information Telephone 858-675-4400 FAX 858-675-9424 Postal address 16980 Via Tazon #230 San Diego, CA 92127-1647 Electronic mail General Information: 1i. f ici/,i i;7jj Webmaster: [Home] Send mail to T Eaton with questions or comments about this web site. Copyright @ 2003 Reiter Lowry Consultants Last modified: 12/04/03 i s s f { http://www.reiterlowry.com/ 5/14/2004 KLU Jervlces Yage Page 1 of 2 Nome Feedback Services About Us Services P'nan ial&Management consulting renu ce.r fbr spedal districts and-public agencies Reiter • Lowry• Consultants specializes in strategic cost control and revenue generation plans. Today's fiscal environment requires that a successful financial plan reflect improvement and replacement costs for the next 20 years or more. Because these costs must legally be apportioned between current and future users,we work with clients to develop a plan that considers public sentiment as well as current law. A comprehensive financial strategy considers the cost of today s facilities,which benefit existing users, as well as future users. Fk Finance Reiter • Lowry• Consultants provides its clients with a comprehensive range of financial services to help develop and implement successful financial strategies. Assessments Reiter• Lowry• Consultants has a proven track record in providing complete direct assessment services for many special districts throughout California. The firm has successfully administered assessment programs since 1989. All services are tailored to meet the individual and unique needs of any agency. Facilities Public agencies concerned with the best plan to maintain and operate their facilities benefit from our firm s comprehensive facility planning services. Administration A strong alliance between Board members and staff is critical to a successful operation. Clear definitions of accountability,responsibility, and authority are needed, as well as consistently good communication. We provide services that help our clients develop the relationships necessary to succeed. Accounting Reiter • Lowry• Consultants can provide your district or agency with a wide range of accounting services. We know how difficult it is to trust someone else with your finances, so we provide our customers with the greatest level of confidentiality and accuracy possible. Whether you need Bill service accounting or only customer billing, we can help. We customize our services to fit your needs. http://www.reiterlowry.com/services.htm 5/14/2004 Kt t- Services Yage Page ?of 2 Send mail to T. Eaton with questions or comments about this web site. Copyright O 2003 Reiter Lowry Consultants Last modified: 12/04/03 i 5 3 3 http://www.reiterlowry.com/services,htm 5/14/2004 t1VVUt US Page 1 of 2 Home Feedback Services About Us About Us Financial 6 Management consulting services for special districts and public agencies Company Profile Since 1981, Reiter Lowry Consultants has provided clients with innovative, cost-effective solutions in the areas of strategic financial management, facility planning and financing, capital improvement planning, rate setting and revenue analysis. The firm pioneered the use of computer-based models for long-range financial forecasting, revenue generation and customer impact analysis. These models have resulted in a variety of sophisticated, comprehensive and successful rate strategies for many public agencies. Our combination of practical and consulting experience uniquely qualifies us to recommend effective strategies to address challenges facing agencies today. Glenn M. Reiter A Registered Civil Engineer with the State of California, Class A Engineering Contractor license, is a leader in developing sound and ?. wise capital improvement programs that fit an agency's ability to pay. His focus is on integrating client capital improvement programs into long-range financial strategies. Over the past 40 years, Mr. Reiter has held a variety of positions including General Manager and Chief Engineer of a water and sewer agency, Director of Regional Water Authority, Executive Director and founder of the Special District Association and San Diego LAFCO Advisory Committee Chairman. He has written numerous papers on Special Districts and has lectured extensively on Special District Management, Finance and Administration. Gregg A. Lowry rf, Mr. Low is the firm's consulting en project�' g engineer and director of ro ect 1 research. He provides insightful technologically advanced solutions http://www.reiterlowry.com/Company%a20Profile.htm 5/14/2004 g r�uvut v5 Page 2 of 2 in the areas of finance, operations, administration, engineering, human resources and data processing. Mr. Lowry's agency management experience includes the positions of Assistant General Manager, Engineer, Public Works Director, Construction Manager, and Contracts Manager. He has an established reputation as an accomplished engineer with savvy financial management experience and practical hands-on problem solving focus. Send mail to T. Eaton with questions or comments about this web site. Copyright @ 2003 Reiter Lowry Consultants Mast modified: 12/04/03 F f Y http://www.reiterlowry.com/Company%20Profile.htm 5/14/2004 i MANAGEMENT INFORMATION AND ORGANIZATIONAL STRUCTURE What issues did the strategic plan raise and what did it conclude? Water : Management Information Systems (MIS) • Spend too much time on administration • Record keeping Support Services: MIS • Need to Bar Code and track inventory • Not linked to GIS or accounting • Going backward • This is a cost and efficiency issue. Less errors Electric: MIS • Have portable GIS. How to do work orders. Need to take advantage of it for efficiency. • Design Integration • Outage management Broadband: MIS • Need to integrate GIS with broadband • Question: outsource or In-house management of network itself Admin Services: MIS • Work order accounting; closing process- 20 years old and overloaded • Must rethink process or add people • Newer information systems such as GIS not integrated with work order # • This is not a technology problem- rather a management process. Need to tie systems in separate departments i together. • Departments- starting to bump heads. Can't share information. General Manager• Internal Management Processes • We have grown in terms Of customers. • Organization needs to change-realize how organization works and change ourselves. • Also adding new services, but using same managerial processes as 20 years ago. Need to change management to match new reality. MANAGEMENT INFORMATION AND ORGANIZATIONAL STRUCTURE ACTION PLAN Management Information System • Need help analyzing the problem and suggesting solution • Need to make information available • Have to interface with the utility software- NISC • GIS is infrastructure data (Ian is trying to interface with NISC) • Work flow process what does final process need to be. Action: Find a consultant (similar to finance consultant) to advise on how to proceed Who. Peter Holzmeister Organization and Management • Staff already at max. Difficulty getting beyond fires. • Several key managers not too many years form retirement. • Growth will continue and compound the challenge. • Assistant General Manager has multiple responsibilities. • Human Resources- an organizational challenge • Growth Perspective: 80% increase in customers; 40% in staff • Summary of new needs: ■ Human Resources ■ Assistant General Manager • Finance • Need more focus, direction, accountability Action: President appoint a ad hoc committee to develop a new organizational plan to bring to Board i Who: Board president and committee (Ron Hemig, Jim Maass and Peter Holzmeister) { { MANAGEMENT INFORMATION AND ORGANIZATIONAL STRUCTURE WHAT HAS HAPPENED? Committee has met Management team has met We evaluated various organizational structures Management information and organizational structure are tied together What is the nature of our organization? • We provide water and electric service to 11 ,000 customers — rates (Broadband) • We expand our service to new development — fees and development agreements These are two very different processes • Different people • Different thought process • Different funding We need to organize accordingly Bob Rauch and Glenn Reiter The Glen Reiter proposal • Two day reconnaissance study • Develop scope for further study • $4,800 to $6,000 • Within my authority, but a new consulting firm z Consideration of a motion expressing the board's intent and understanding relating to construction of the broadband system and LAFCo approval. (Gov Code Section 54954.2 (b) 2, requires two thirds vote of the board to add this item to the agenda) I move that the board express its intent and understanding as follows: 1. The District has applied to Nevada LAFCo for activation of a latent power so it can deploy a telecommunications system and offer broadband service within our service area. 2. Nevada LAFCo has given conditional approval to our application. Final approval will be given when we have complied with LAFCo requirements as set forth in their Resolution Number 01-01. 3. The District has proceeded to secure bids for supply of electronic components and for construction of the system. This was necessary to secure financing for the project. The securing of financing for the project is necessary in order to satisfy the LAFCo requirement for a risk mitigation plan. The securing of construction bids, securing of financing and preparation of the risk mitigation plan are interrelated such that they need to proceed simultaneously. The District has not and will not enter into contracts for acquisition of electronic components or for construction of the system until a final decision has been made by LAFCo and has been approved by this board. a