For almost 100 years, the City of Tulsa and Tulsa Metropolitan Utility Authority has been a visionary leader in supplying water to the Tulsa area.  As a fundamental element to Tulsa’s growth as a city and a critical resource to the city’s future, we must change and adapt to meet the challenges, demands and uncertainties of tomorrow.  In fiscal year 2012, the Tulsa Metropolitan Utility Authority undertook a comprehensive assessment of the water and wastewater systems, all while continuing to provide reliable high-quality water and wastewater services to 570,000 people.

 

Tulsa’s water and wastewater systems are publicly owned.  The water and wastewater systems are operated by the Tulsa Metropolitan Utility Authority (TMUA), a public trust, under a lease agreement and operation and maintenance contracts with the City of Tulsa.

 

TMUA currently serves more than 136,000 retail water customers and 128,000 retail wastewater customers.  In addition, continuous wholesale water service is provided to eight (8), and wholesale sewer to one (1), of Tulsa areas 14 suburban communities.  TMUA also provides wholesale water services to nine (9) rural water districts.  In terms of population this represents over 570,000 residents.

 

The Water and Sewer Department provides high-quality drinking water and wastewater collection and disposal services, while planning for future growth, implementing sustainability measures, safe guarding public health and the environment, and continually seeking process improvements and cost efficiencies.  The Department’s primary functions are water supply, treatment and distribution, as well as wastewater collection, treatment and disposal.

 

Tulsa’s drinking water comes from two sources – Lakes Spavinaw and Eucha on Spavinaw Creek and Lake Oologah on the Verdigris River.  Lake Oologah is operated by the Corps of Engineers.  A third emergency source of water is available from Lake Hudson. Water is treated at two treatment plants, Mohawk and A.B. Jewell, with a total treatment capacity 220 million gallons per day.  The water distribution system consists of 2,304 miles of pipes.

 

The Department also operates four wastewater treatment plants, Southside, Northside, Haikey Creek and Lower Bird Creek, with a total permitted capacity of 102.6 million gallons per day.  The Haikey Creek WWTP is jointly owned by the City of Tulsa and City of Broken Arrow.  TMUA operates the Haikey Creek plant under an agreement with the Regional Metropolitan Utility Authority (RMUA).  The wastewater collection system consists of 1,967 miles of pipes and 49 lift stations.

Organizational realignment

With the retirement of Charles Hardt, long-standing Public Works Director, the Mayor reorganized the public works functions of the City, including water and sewer, streets, stormwater, public facilities, solid waste, and engineering services, from one department into three departments. The three departments are named Water and Sewer, Streets and Stormwater, and Engineering Services. Other support functions previously performed within the Public Works Department were reassigned to various departments, including Utilities Services (billing and collections) to Finance Department, utilities call-center to Customer Care Department, warehouse and fleet management to Finance Department, and training and professional development to Human Resources Department. Effective July 1, 2011, Clayton Edwards was promoted to Director of the new Water and Sewer Department. The department manages the City’s water and wastewater systems.

 

Comprehensive Assessment

One of the most notable accomplishments in Fiscal Year 2012 was the comprehensive assessment of the water and wastewater systems. In July 2011 TMUA engaged a consulting team, led by the financial firm Infrastructure Management Group, Inc. and comprised of engineering and legal firms, to conduct a comprehensive assessment of the City’s water and wastewater systems. The assessment was in response to the preliminary findings from an audit of City services contracted by the City’s administration. One strategy identified in the KPMG report to address funding shortages and efficiencies of the City is to consider public/private partnerships of the City’s water and wastewater systems.

 

Rather than focusing on just financial, operational, or capital, TMUA chose to take a holistic approach considering all significant aspects of the utility systems including governance and organizational structure, management, operational performance, capital needs, financial condition, and legal and public policy issues. The final report was received in August 2012. Following is an overview of the findings presented.

 

Overall, the IMG Team found that the Tulsa metropolitan region enjoys water and sewer services that operate within industry norms for service quality and cost-efficiency. However, without significant changes, increasingly stringent regulations and the system’s aging infrastructure will combine to force water and sewer rates to grow significantly for decades to come.

IMG concluded that TMUA’s unique structural attribute (in which the governing board and owner of the assets contracts with the City for utility operating services) could be used to impose significant and lasting improvements in a way that most US water utilities cannot. IMG concluded that operating and capital program improvements could – if supported by critical new performance and asset management systems linked to the TMUA-City lease and operating contract – make durable improvements roughly equivalent to privatization, and thereby reducing future rate increases by 20 to 30 percent compared to current projections.

Going forward into FY2013, TMUA, in collaboration with the City’s administration, will set forward on several strategic and performance improvement initiatives presented by IMG.

Chloramine conversion

Improvements were constructed at both the Mohawk and A.B. Jewell water treatment plants preparing for the conversion from free chlorine to chloramines (Cl2 + ammonia) as the secondary disinfectant in the treatment process.  The actual conversion and start-up was July 31, 2012.  Initial tests following start-up indicate substantial improvement complying with regulatory requirements.

 

Water Operations

• Installed new propane delivery system at the Grand River Pump Station.  The new system, considered innovative by ODEQ and more efficient, was installed at an estimated cost savings of $100,000 compared to replacing the system with like-kind.  The projected annual savings is $10,000.

• Continuing to work with OWRB on the floating wetlands project at the upper-end of Lake Eucha for removal of taste and odor precursors.

• Updated Dam Breach Plans for Lake Eucha, Lake Spavinaw, Yahola Reservoir, and Lynn Lane Reservoir.

• Joined AEP/Public Service Company’s Demand Response Program, an incentive based program for select high electric energy users to reduce energy demands during peak periods in the summer months.  Select process units at Mohawk and A.B. Jewell WTP’s are included in the program.

• Completed the asset data collection and risk assessment phases of the Strategic Asset Management (SAMS) program for the Mohawk and A.B. Jewell WTP’s.

• Repaired 1,159 water main breaks and 655 leaks.  The average time a customer was without water service was 4.92 hours per repair.

• Commenced installing new SCADA system that will allow remote monitoring and control of distribution pump station and storage tank operations.  Project will be completed in FY2013.

• Investigated and surveyed 257 miles of water lines for surfacing and non-surfacing leaks.

• Changed out 14,189 small, medium and large meters.

• Read 1,748,258 meters with an accuracy rate of 99.9 percent.

• Implemented an automated dispatch system to improve customer service and continued progress toward a paperless system.

• Developed and implemented Nitrification Control and Response Plan as part of the chloramines conversion project.

Wastewater Operations

• Completed approximately 30 percent of the asset data collection and risk assessment phases of the Strategic Asset Management (SAMS) program for the sanitary sewer lift stations and selected force mains.

• The Sewer Operation and Maintenance (SOM) section repaired, rehabilitated, or replaced 1.242 miles of sewer mains and cleaned 946 miles.

• Joined AEP/Public Service Company’s Demand Response Program, an incentive based program for select high electric energy users to reduce energy demands during peak periods in the summer months.  Three major lift stations are included in the program.

• Transitioned the sanitary sewer inflow/infiltration program, the “Smokie” program, from Working-In-Neighborhoods Department to the new Water and Sewer Department.

Capital projects

• Replaced 133,485-feet, or 25.281 miles, of water lines, or 1.10 percent.

• Installed 14,503-feet, or 2.747 miles, of new water lines.

• Replaced and rehabilitated 37,596-feet, or 7.121 miles, of sanitary sewer lines, or 0.36 percent.

• Installed 12,143-feet, or 2.300 miles, of new sewer lines.

• Haikey Creek WWTP solids thickening improvements completed.  The new equipment reduces the volume of sludge hauled by 40 percent which results in lower transportation costs and allows treatment plant personnel to focus more time on operational and maintenance activities instead of driving.

• Northside and Southside WWTP disinfection improvements completed.  The new disinfection process utilizes liquid chemicals, in lieu of gaseous chemicals, providing a safer working environment for employees and reduces the risk of chemical exposure to the community.

• Southside WWTP diffused aeration improvements nearly complete.  The new equipment more effectively delivers air to the treatment process resulting in greater treatment quality and reduced utility costs.

• Lower Bird Creek WWTP expansion construction commenced (June 2012).  Capacity will be expanded from 2 million gallons per day to 4 million gallons per day anticipating growth in the Spunky Creek drainage basin of east Tulsa.

Many other performance measures and operational data for FY2012 are included in the Statistical Section of this report.

 

Annual Operating and Capital Budget

The annual budget is prepared on a program basis.  Detailed annual work plans for operation and maintenance activities are developed during the budget process each year.  These work plans itemize the cost of activities and projects within each section, or function of the water or wastewater systems.  The total FY2012 budget for the Water Fund (7020) was $100,321,458 and Sewer Fund (7030) was $90,138,701.  These figures include personal services, materials and supplies, other services, transfer to general fund, indirect costs, capital equipment, transfer to capital projects, and debt service.  The following charts show a breakdown of the FY2012 operating budgets for both the Water and Sewer funds by the type of expenditure.

More detailed figures are included in the Statistical Section of this report, as well as the FY2012 Comprehensive Financial Report.

Chart 1.

Chart 2.

 

Staffing

The Water Fund and Sewer Fund collectively employ 891.3 full time equivalent employees (FTE).  The Water Fund employs 481.8 FTE’s and the Sewer Fund 409.5 FTE’s.  At full staff there are 642 authorized positions in the Water and Sewer Department.  The following charts illustrate the breakdown of direct charge staffing and support, or shared services for the Water Fund and Sewer Fund.

 

Chart 3.

 

Chart 4.

 

Revenues and Rate Setting

Tulsa’s water and sewer rates are set based on cost-of-service analysis.  Cost-of-service analyses are conducted on an annual basis as part of the budgeting process.  The key objectives of the cost-of-service analyses are to forecast annual water and sewer revenue requirements to fund projected operating and capital expenditures, allocate costs on an equitable basis to each customer class, comply with debt service coverage requirements, and maintain adequate financial reserves.

TMUA, over the past few years, has adjusted rates to accommodate the rising costs of water and sewerage services and maintaining our aging infrastructure.  In May 2011, TMUA voted to increase water rates 7 percent for all customers, effective October 1, 2011. Sewer rates were adjusted 9 percent for all customers, effective October 1, 2011.  The rate increases were confirmed by the Mayor and City Council in June 2011.

 

Water Revenues

Revenue generated by the FY2012 adopted 7 percent rate increase along with increased revenues due to the excessive heat and drought conditions experienced in the summer 2011 generated about $12.3 million over FY2011 actual billed revenues and $9.9 million over FY2012 budget estimates.  Of that $3.8 million went to additional debt service and capital equipment in FY2013.  The remainder allowed TMUA to transfer to major capital projects $12.550 million in FY2013, an increase of $8.2 million over FY2012.  In FY2012 TMUA deferred $22.1 million in revenue bonds in an effort to control debt.  In FY2012, revenues exceeded outlays by $6.555 million.  The year-end balance, after reserving for the 5 percent cash operating reserve, is estimated to be $9.1 million.

 

The following chart shows the actual billed water revenues compared to budget for the period FY2002 through FY2012.

Chart 5.

 

Sewer Revenues

Revenue generated by the FY2012 adopted 9 percent rate increase generated about $5.3 million over FY2011 actual billed revenues and $1.0 million under FY2012 budget estimates.  Of that $3.5 million went to additional debt service and capital equipment in FY2013.  The remainder allowed TMUA to transfer to major capital projects $3.410 million in FY2013, only a slight increase over FY2012’s $2.341 million, but reducing the amount borrowed in the FY2013 capital program.  In FY2012, outlays exceeded revenues by $3.6 million.  The year-end balance, after reserving for the 5 percent cash operating reserve, is estimated to be $2.3 million.

 

The following chart shows the actual billed wastewater revenues compared to budget for the period FY2002 through FY2012.

Chart 6.

 

Tables 1 and 2 on the following pages show Tulsa’s Top 15 water consumers by rank for the period FY 2003 through FY2012 by consumption (Table 1) and amount billed (Table 2).  For the purpose of this table, both potable (treated) and raw water are included.

 

Water Consumption and Sewer Usage

Actual billed water consumption in FY2012 was 38.015 billion gallons.  Actual billed sewerage was 14.742 billion gallons.  The following charts illustrate the breakdown of water consumption for FY2012 – inside city versus outside city, and by customer type.

Chart 7.

 

Chart 8.

 

Key Metrics

One key measurement introduced in the Comprehensive Assessment was “affordability”, or the ability of lower income households to pay continually increasing water and sewer rates.  The Environmental Protection Agency (EPA) established affordability criteria for water and wastewater systems with the 1996 Amendments to the Safe Drinking Water Act.  The four (4) percent benchmark is measured as the total annual water and sewer bill divided by the median household income for the service area.  The four percent benchmark translates to two percent each for the individual water bill and individual sewer bill.  These figures however are considered to be a worst case scenario.  The water and wastewater industries have long considered an acceptable affordability ratio for a combined bill to be within a range of 1.5 to 2.5 percent.

 

Table 3 shows a summary of the average consumption or usage for single–family residential TMUA customers, and the “affordability” ratio for the period FY2005 through FY2011.  The median household income was obtained from the American Community Survey conducted by the U.S. Census Bureau.  Tulsa’s affordability ratios for FY2011 are 0.79 percent and 0.64 percent for water and sewer, respectively.  The combined ratio is 1.43 percent, below both standards discussed above.  Table 4 shows Tulsa compared to other peer cities identified in the Comprehensive Assessment.

 

Tulsa’s peer cities pay on average 14 percent more in water and sewer rates than Tulsans do.  In 2009 the same report showed Tulsa six (6) percent below the average of the seven peer cities surveyed.  This statistic concludes that other cities are increasing rates at a faster pace than Tulsa.  Tulsa continues to be below the average of cities in this region of the country for water and sewer rates.
(Rates effective June 1, 2012 – Austin, Dallas, Denver, Fort Worth, Kansas City, Little Rock, Oklahoma City and Wichita)  

 

Water CIP

Total budgeted expenditures for the FY2012 Capital Improvement Plan were $25.9 million for the water system – $4.350 million in cash from the rate base and $21.550 million in the issuance of revenue bonds.  Through the CIP review process, it was determined that some projects were not ready to proceed in FY2012 and existing capital accounts were analyzed and found sufficient unexpended funds in completed projects to enable the re-appropriation of funds to other projects.  Thus, revenue bonds were not issued in FY2012.

 

The total projected expenditures for the FY2012 – FY2016 Five-Year Water Capital Improvement Plan are $141.950 million.  As of June 30, 2012, the Water Fund has outstanding debt of $157,756,938.  A breakdown of the debt is shown in the following chart.

 

Chart 9.

 

Wastewater CIP

Total budgeted expenditures for the FY2012 Capital Improvement Plan were $37.588 million for the wastewater system – $2.341 million in cash from the rate base, $10.700 million in proceeds from the City’s Third Penny revenue collections, and $24.547 million in the loans from the Oklahoma Water Resources Board.  Through the CIP review process, it was determined that some projects were not ready to proceed in FY2012 and existing capital accounts were analyzed and found sufficient unexpended funds in completed projects to enable the re-appropriation of funds to other projects.  Thus, the borrowing of funds from OWRB was reduced to $14.947 million, a reduction of $9.600 million.

 

The total projected expenditures for the FY 2012 – FY 2016 Five-Year Wastewater Capital Improvement Plan are $174.328 million.  As of June 30, 2012, the Wastewater Fund has outstanding debt of $191,191,022.  A breakdown of the debt is shown in the following chart.

 

Chart 10.

 

Many of our Water & Sewer Department employees are involved in professional and water and wastewater-industry trade associations.  Many volunteer countless hours and are part of the success of these organizations.  TMUA maintains membership and continued participation, through its staff, in the following professional and industry trade associations:

 

• American Water Works Association   (water)

• Water Research Foundation   (water)

• Southwest Section AWWA  – Arkansas, Louisiana and Oklahoma   (water)

• Water Environment Federation   (wastewater and stormwater)

• Water Environment Research Foundation (wastewater and stormwater)

• Oklahoma Water Environment Association   (wastewater)

• Association of Metropolitan Water Agencies   (water)

• National Association of Clean Water Agencies   (wastewater)

• American Public Works Association   (broader public works functions, including water and wastewater)

• Water Information Sharing and Analysis Center   (homeland security)

Director’s Award – Partnership for Safe Water

TMUA, through its staff, participates in American Water Works Association’s Partnership for Safe Water program.  TMUA successfully completed the Phase III Self-Assessment and was awarded the Phase III Directors Award.  The Partnership for Safe Water is a voluntary effort between six drinking water organizations, and more than 200 water utilities throughout the United States.  This achievement is no small task and demonstrates the staff’s commitment to water quality and consumer safety.

 

Peak Performance Award – National Association of Clean Water Agencies

NACWA’s Peak Performance Awards recognize member agency facilities for outstanding compliance of their National Pollutant Discharge Elimination System (NPDES) permit limits.  TMUA and the City of Tulsa are recognized for its operational performance for calendar year 2011.

• Southside Wastewater Treatment Plant – Gold Award

• Lower Bird Creek Wastewater Treatment Plant – Gold Award

• Haikey Creek Wastewater Treatment Plant – Gold Award
  Gold Awards honor treatment works that have achieved 100 percent compliance with their NPDES permit for an entire calendar year.

• Northside Wastewater Treatment Plant – Silver Award
  Silver Award recognizes facilities that have received no more than five NPDES permit violations per calendar year.

• Implement Utility Enterprise Initiative – follow through of recommendations included in the Comprehensive Assessment will provide TMUA important management tools and business processes necessary to improve performance.  Recommendations include development of service level agreements with City departments providing support services.

• Vulnerability Assessments of the Water and Wastewater Systems – evaluate susceptibility to potential threats and identify corrective actions that can reduce or mitigate risk of serious consequences from adversarial actions or natural disasters.  In 2002 Federal law required water systems to conduct vulnerability assessments.  After 10-years, the previous reports will be reviewed and updated, evaluation of existing countermeasures, and develop a new listing of corrective actions.

Water

• Strategic Asset Management (SAMS) – staff continues to evaluate the state of water system infrastructure, determine capital required to restore critical infrastructure and maintain the water system by utilizing preventive and predictive maintenance to ensure optimum equipment performance through its useful life, and development of the capital program.

• Replacement of high service pumps at the A.B. Jewell WTP – two are complete, two funded, and two planned for replacement in FY2013.

• Sustainability – Continue energy efficiency programs initiated in FY2012 at Mohawk and A.B. Jewell Water Treatment Plants.  TMUA will receive rebates from PSO to fund old inefficient equipment with new energy efficient units.

• National Environmental Laboratory Accreditation Program – Water Quality Assurance section developed and is implementing testing standards that represent best practices in environmental laboratories to achieve accreditation to conduct Safe Drinking Water and Clean Water Act compliance monitoring.

• Meter Change Out Program (COP) – Water Distribution continues the meter change out program.  The meter change out program ensures accurate measurement and billing.  The goal is to replace all small and residential meters on a 10-year cycle, 10 percent or approximately 15,000 meters each year.  Medium and large meters are replaced more frequently based on volumes and testing.

• Automated Meter Reading (AMR) – As funding allows Water Distribution continues to install AMR units based on the implementation plan developed in 2010.  Criteria for installing AMR include health and safety, hard to read meters, and costs per read (walking vs. AMR).

• Leak Detection – Water Distribution conducts a leak detection program which searches for leaks in the water system which are not visible on the ground surface.

• “Pay-Per-Read” – Field Customer Services is converting meter reading from salary based compensation to “pay-per-read”.  TMUA is currently evaluating this proposed change.  The “pay-per-read” program is an incentive/ disincentive based program that will provide an opportunity for employees to earn more, and also should improve accuracy in data collection.

Wastewater

• Strategic Asset Management (SAMS) – staff continues to evaluate the state of wastewater system infrastructure, determine capital required to restore critical infrastructure and maintain the wastewater treatment plants and lift stations by utilizing preventive and predictive maintenance to ensure optimum equipment performance through its useful life, and development of the capital program.

• Video Inspection Program – The Sewer Operations and Maintenance section (SOM) performs video inspections of 10 percent of the sewer collection system, or 200 miles each year.  Staff is conducting training and certifying employees on the Pipeline Assessment Certification Program (national standardized video inspection).

• Sewer Line Cleaning Program – SOM will clean 800 miles of sewer lines utilizing in-house staff and equipment and contract firms.  Additionally, 220 repairs will be performed accounting for 5,500-feet of sewer line in FY2012.