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WSSCAnnualStrategicPerformanceReportFY2014 MessagefromtheGeneralManagerChiefExecutiveOfficerAtWSSCwearecommittedtoprovidingourcustomerswithsafeandreliablewaterthatsustainsahighqualityoflife.WearethereforeproudtosharetheWashingtonSuburbanSanitaryCommissionsWSSCfourthAnnualStrategicPerformanceReportwithourcustomersandotherstakeholders.ThisPerformanceReporthighlightsourprogressduringthe2014fiscalyearFYincludingoursuccessesandouropportunitiesforimprovement.ThereportalsoprovidesafocusonoureightstrategicprioritiesandhowwehaveperformedinkeyareasoverFiscalYears2012-2014.TransformingtheWayWeDoBusinessTocontinuetomeetcustomerneedstodayandinthefuturewearetransformingthewaywedobusiness.Severalmulti-yearinitiativesareunderwayacrossWSSCtoimproveourinfrastructurecustomerservicesupplychainandinformationtechnology.WSSCwasonceagainabletoexceedourgoalsforrepairrehabilitationorreplacementofourcriticalinfrastructure.InFY2014weinvestedover220milliontoaggressivelyimproveouraginginfrastructure.Despitechallengesinobtainingthenecessaryconstructionpermitswecontinuetopushforwardtoensurefuturegenerationshaveaccesstosafecleanandreliablewater.AlthoughwedidnotachieveallofourcustomerservicegoalswecompletedmajormilestonestoevaluateandrealignourCustomerContactCentertoprovideworld-classserviceandoperationstoourcustomers.Weareworkingonmorethantwenty-two22majortechnologyprojectsacrossourenterprisethataredesignedtomodernizeandimproveourbusinessoperationsandprovideeaseofaccesstoWSSCforallourcustomersandotherstakeholdersthroughouttheregion.Oursupplychainmanagementtransformationiswellunderway.InFY2014webeganintegratingbestpracticessuchasstrategicsourcingandspendanalyticstoidentifypotentialcostreductions.Measuringourperformanceresultsbasedonourstrategicprioritieshelpsusbecomeevenbetterstewardsofourresources.WSSCcontinuallyevaluatesthewaywedobusinessbyprovidingeffectiveandefficientservicestoourcommunity.AllofourimprovementsandaccomplishmentsreflectthehardworkanddedicationofWSSCsgreatestassetouremployees.LookingAheadInthefiscalyearsaheadweexpecttostrengthenourcustomerserviceoutreachandengagement.Wearemakingsignificantinvestmentstotransformthewaywedobusinessthroughacultureofinnovationoperationalexcellenceandsustainabilitytobetterserveourcustomersandourcommunity.Wecontinuetomakegreatprogress.Wehopethisreporthelpsyouunderstandmoreaboutourprioritiesandtheimprovementswearemakingtobetterserveyou.Asalwayswewelcomeyourfeedback.JerryN.JohnsonGeneralManagerCEOENSURINGFINANCIALSUSTAINABILITYPracticesoundfinancialstewardshipensuringdeliveryofthebestqualitywaterandwastewatertreatmentservicestoourcustomersatareasonablecostwithaffordableratesanduseofinnovativeideasforminimizingrateincreases.StrategiesInitiativesTheCommissionrecognizestheimportanceofmakinginvestmentsinouroperationsandourinfrastructuretoensureweareabletoserveourcustomersnowandforfuturegenerations.Inadditiontoincreasedinfrastructurecostsweareexperiencingcustomertrendsofwaterconservationandflattenedwaterproductiongrowthwhichplacedownwardpressureonrevenuehoweverweremaincommittedtoreducingthetrajectoryofrateincreasesforourcustomers.InFY2014weimplementedseveralstrategiesforaddressinglong-termfinancialsustainabilitysuchasmodificationofourdebtfinancingexaminationofourcustomerbillingstructureandadvocacyabouttheneedformorepredictablerevenues.WeexpectthatinFY2015oureffortstoexpandfinancialassistancewillbenefitourcustomerswhohavedifficultypayingtheirbills.WealsoexpectthatinFY2015findingcostsavingsandcostreductionthroughoursupplychaininitiativewillbecomeawayofdoingbusiness.Overallwecontinuedtomaintainastrongpositionwithourcreditratingagenciesandreceivedpositivesupportforourlong-termfinancialplanning.FinancialManagementMaintainAAAbondrating.Improverevenueandexpenditureforecastingratios.InFY2014weagainmaintainedourAAABondRatingapositiveindicatorofWSSCsoverallfinancialhealththatalsoreducesthecostofborrowingforthe3.7billionCapitalImprovementPlan.TheCommissionendedFY2014withpositivefiscalresults.Actualrevenueswere5lowerthanourprojections.Howeverthisshortfallinrevenueswasoffsetbyouroverallexpenseswhichwere11lowerthanprojected.Theseresultsaresimilartopreviousfiscalyears.ENSURINGFINANCIALSUSTAINABILITYFY12FY13FY14RESULTSPerformanceLegendPositivePerformanceMixedresultsImprovementNeededWSSCsOverallFY2014PerformanceSummaryShownbelowareoureightStrategicPrioritieswithanindicatorsummarizingoverallFY2014performance.ThroughoutthereportyouwillseeexamplesoftheperformanceobjectivesandoutcomeswhichweremeasuredinFY2014.Ourperformanceagainstindividualobjectivesandmeasuresvaried.Notallarepresentedinthisreport.FinancialSustainabilityCommunicationsInfrastructureEnvironmentalStewardshipCustomerServiceSupplyChainManagementWorkforceManagementandSupplierDiversitySecurityandSafety 0102030405060SUSTAININGINFRASTRUCTUREPlaninvestinandrenewourinfrastructuretomeetcustomerexpectationsthroughinnovativecost-effectivetechnologyandworld-classassetmanagementpractices.StrategiesInitiativesWecontinuetoleadandexecuteacomprehensiveassetmanagementstrategywhichisdesignedtohelpusmakebetterdecisions.Thestrategybalancesthelevelsofserviceourcustomersrequirethecostofserviceandacceptablelevelsofriskforourstakeholders.Weareusingkeyassetmanagementpracticessuchasassessingbusinessriskexposurelinkingassetmanagementprojectvalidationtorequestsforcapitalimprovementcoordinatingassetmanagementwithstrategicenergyplanningandassessingtheperformanceofourinfrastructurebasedonfivelevelsofservicevaluestatementsforourcustomers.Wealsosignificantlyincreasedthenumberofassetsinourregistryfromover175000toover1million.InFY2014wecontinuedtoaggressivelyrepairreplaceandrehabilitateourwaterandsewerundergroundassets.Wevetakenmultiplestepstoaddressourconsentdecreeobligationandtoexpeditetheprocessbutdespiteoureffortswecontinuetoexperiencechallengeswiththefederalandstateagenciesresponsibleforissuingconstructionpermits.OnthetechnologyfronttheCommissioncontinuestoimplementthe5-yearITStrategicPlanandismakingprogresstomodernizeanumberoflegacysystemsandprocessesimpactingourCustomerContactCenterPermitsServicesGeographicInformationSystemsAssetManagementSystemsaswellasothersystems.WaterOperationsIncreasethenumberofwatermainmilesreconstructed.Reducethenumberofwatermainbreaksandleaksper100milesofpipeline.WastewaterOperationsIncreasethenumberofsewermilesreconstructedorrehabilitated.ReducethenumberofSewerSystemOverflowsSSOsper100milesofpipeline.Reducethenumberofbasementback-upsper100milesofpipeline.ITOperationsIncreaseITsystemreliability.WeexceededourFY2014targetof51milesby18completing60.36milesofwatermain.Therewere35.45watermainbreaksandleaksper100milesofpipelineslightlybetterthantheFY2014goalofnomorethan36watermainbreaksandleaksper100milesofpipe.DuetotheinabilitytoobtainaccessandconstructionpermitsfromotheragencieswemissedourFY2014targetof53milesofsewerlinereconstructedorrehabilitatedby49completingonly27.28milesofsewer.WemissedourFY2014annualgoalofincurringnomorethan3.00SSOsper100milesofpipelineby7.Weexperienced3.22SSOsper100miles.WemissedourFY2014annualtargetof16basementback-upsper100milesofpipelineby13.Therewere18back-upsper100miles.InFY2014wesuccessfullycompletedthesecondyearofourITStrategicPlan.Wemetnearlyallofthemilestonesundertheplananddeliveredothersystemenhancements.Ourprogresshasresultedinsignificantdividendsincludingimprovedefficiencyinlicensingandpermittingservicesimprovedcustomerserviceandimprovedcommunicationsforbothratepayersandourcountystakeholders.SUSTAININGINFRASTRUCTUREFY12FY13FY14RESULTSFY2012Completed59.59milesFY2013Completed52.34milesFY2014Completed60.36miles0102030405060WaterMainMileageReconstructedSewerMainReconstructedRehabilitatedMilesMilesFY2012Completed42.47milesFY2013Completed57.61milesFY2014Completed27.28milesTarget46milesTarget51milesTarget35milesTarget53milesTarget53milesTarget41miles PercentDELIVERINGEXCELLENTCUSTOMERSERVICEEnsurecustomerconfidencethroughthedeliveryoftimelyhighqualityproductsandservicestointernalandexternalcustomers.StrategiesInitiativesThequalityofourwaterisevidentinourstellarrecordofhavingmetorexceededourfederalandstatedrinkingwaterrequirementsforover95years.Wecontinuetostrivetowardsprovidinghighqualitycustomerservicetoourcustomersaswell.WhilewehavenotturnedthecorneronourperformancewithinourCustomerContactCenterwehavemadeprogresswithourevaluationofthisimportantfunction.InFY2014wecompletedacomprehensivedatadrivenanalysisandevaluationofallthemajorcomponentsofWSSCsCustomerContactCenterthatresultedinrecommendationsforsystemicallyimprovingourcustomersexperience.InFY2015weexpecttobeginimplementingsomeofthoserecommendationsincludinganorganizationalrealignmentandanextensiveskilldevelopmentinitiative.FY2012Calls15.7FY2013Calls8.4FY2014Calls17FY2012onHold5.4minFY2013onHold2.8minFY2014onHold6.8minAbandonedCallRateWaitTimeinCallCenterMinutesDELIVERINGEXCELLENTCUSTOMERSERVICEFY12FY13FY14RESULTSCustomerRelationsandSatisfactionMaintainhighqualitydrinkingwaterstandards.ImprovetheabandonedcallrateinourCustomerContactCentercallersthatdisconnectbeforespeakingwithacustomerserviceagentinourCustomerContactCenter.ImproveourcustomerswaittimeinQueueinourContactCenter.ImproveourcustomerswaittimeintheBillPayQueueinourContactCenter.InFY2014ourwaterfiltrationplantsagainmetorexceededfederalandstateSafeDrinkingWaterActrequirements100ofthetime.InFY2014ourmonthlyaverageabandonedcallratewas17exceedingourgoalof5doublingtheratefromthepreviousyear8.4.InFY2014thelengthoftimeacallerwasonholdbeforespeakingtoarepresentativeaveraged6.8minuteswhichismorethantwiceourgoalof3minutes.OurperformanceinthisareafellshortcomparedtoourperformanceinFY2013of2.8minutes.InFY2014ourwaittimeinourCustomerContactCenterBillPayQueueaveraged26seconds.Thisperformancewas57betterthanourgoalof60secondsbutisaslightdeclinefromFY2013.0481216200246810Target5Target5Target5Target3minTarget3minTarget3minOPTIMIZINGWORKFORCEMANAGEMENTSustainahigh-performingdiverseworkplacethatattractsandretainsflexibleandknowledgeableemployeeswhopromoteserviceexcellenceandinnovation.StrategiesInitiativesWeareproudofouremployeesfortheircommitmenttoWSSCsmission.Fromarecruitmentperspectiveourperformancecontinuestoimprove.TheamountoftimerequiredtofillpositionswithinWSSCtrendeddowninFY2014.TechnologyimprovementsmadeinFY2013haveledtoamorestreamlinedandefficienthiringprocessandonethatissubstantiallypaperless.Wefilled58morepositionsinFY2014211comparedtoFY2013153.InFY2014WSSCcontinuedtoimproveoverallleadershipandemployeedevelopmentbylaunchingitsStreamInstituteapipelineofdiverselearningopportunitiesdesignedtostreamworkforcetalentdevelopmentandtrainingtoleadersmanagerstechnicalandadministrativeprofessionals.Anewlearningmanagementsystemwasalsolaunchedandprovidesamoreefficientmethodforenrollingtrackingandevaluatingtrainingforouremployees.OurPeopleandOurWorkplaceImproveWSSChiringcycletime.InFY2014theaveragetimetorecruitandhirenewtalentwas58workdays.Thisaveragecycletimeof58workdayswas3lessthanourtargeted60workdays.Inadditionour58workdaysrepresentsa23improvementfromourFY2013averageof75days.OPTIMIZINGWORKFORCEMANAGEMENTFY12FY13FY14RESULTS ENHANCINGCOMMUNICATIONSANDSTAKEHOLDERRELATIONSHIPSProactivelycommunicateandsustainrelationshipsandstrategicpartnershipswithourcommunitykeystakeholdersandjurisdictionsinsupportofourmissionandourfuturesuccess.StrategiesInitiativesOurpresenceandinteractivitywithourcustomersthroughsocialmediaisgrowing.WearereachingmorecustomerseverydaythroughsocialmediasuchasFaceBookandTwitter.OurlikesandfollowersmorethandoubledfromFY2013aswecontinuetoimplementoursocialmediastrategy.AdditionalstepsareslatedforFY2015.InanefforttoincreasecommunicationandtransparencyweprovidedthefirstlivewebcastofmonthlyCommissionmeetingsinFY2014.Meetingsareliveandcustomerscanviewthemfromtheirdesktopsormobiledevices.InFY2014theCommissionfacedandaddressedseveralcomplexpolicymattersaffectingourcommunityincludingutilitycommunicationsduringwatermainbreakstosafetyissuessurroundingourlarge-diameterwatermaininfrastructure.Stakeholderinputandfeedbackisimportanttous.Wewilllaunchournextcustomersurveyinthefallof2014andlookforwardtohearingfromourcustomersabouttheirperceptionsofourcustomerserviceandwaterquality.DEMONSTRATINGENVIRONMENTALSTEWARDSHIPPracticesafeandresponsiblestewardshipofourwaterairandlandthroughefficientandeffectiveeducationtechnologyandbusinesspractices.StrategiesInitiativesOurcommitmenttoprotectourenvironmentisevidenteverydayfromtheworkwedotoprotectthequalityofoursourcewatersprovidecleanenergysolutionsoffereducationalprogramminginlocalschoolsandcollaboratewithourkeyenvironmentalstakeholders.WecontinuetoimproveouruseofcleanenergyandinFY2014weunveiledtwosolarpowerinstallationsthroughapublic-privatepartnershipattwoofourwastewatertreatmentplants.Thesetwoinstallationswillprovidefour4megawattsofalternativeenergy.Weexpectourportfolioofenergy-savinginitiativestocontinuetogrow.CustomerCommunicationandStakeholderRelationshipsIncreaseeffectivenessofcommunicationswithcustomers.Increaseinvolvementandpartneringinourcommunity.WSSCcontinuestoprovideourcustomersandstakeholderswithawiderangeofrelevantinformationHowtodoBusinesswithWSSCeventsbuildstrongrelationshipswithoursuppliercommunity.Westressourroleasenvironmentalstewardsinareaclassroomsandthroughclean-upandeducationaleventsthroughouttheyear.PubliceducationcampaignsincludedeffortstokeepwipesoutofthesewerpipesandencouragecustomerstoGoGreenwithonlinebillingoptions.Wecontinuetoplayakeyroleprovidingup-to-theminuteupdatestothemediaandgeneralpublicduringemergencyandcrisissituations.WemaintainedourpartneringbypromotingWSSCinvolvementinthecommunityandenvironmentaleducationbyconducting247outreacheventsinFY2014.ENHANCINGCOMMUNICATIONSANDSTAKEHOLDERRELATIONSHIPSFY12FY13FY14RESULTSConservationandRestorationMaintaincomplianceatourwastewatertreatmentplants.EnergyandNaturalResourceConservationIncreaseuseofalternativeenergysources.InFY2014weachieved99.97compliancewithoureffluentdischargepermitsatourwastewatertreatmentplants.AllofourwastewatertreatmentplantsagainreceivedPlatinumorGoldPeakPerformanceAwardsforoutstandingcompliancerecordsandenvironmentaleffortsduringcalendaryear2013.InFY201426.2ofourenergyusagewasfromwind-shortofourtargetof33.Howeverthisrepresentsanimprovementof3.5fromFY2013andtranslatesintoabout27784metrictonsofCO2reductionswhichaccordingtotheUSEPAisequivalenttoremovingapproximately5849passengervehiclesfromtheroadforoneyear.DEMONSTRATINGENVIRONMENTALSTEWARDSHIPFY12FY13FY14RESULTSwww.wsscwater.com INTEGRATINGSUPPLYCHAINMANAGEMENTANDSUPPLIERDIVERSITYEnsureoperationalefficiencyandreliableservicetocustomerssuppliersandallstakeholdersthroughtransparentequitableandresponsibleprocurementpracticesthatinvolveinformandreflectthecommunityweserve.StrategiesInitiativesInFY2014weinitiatedanaggressivetransformationofWSSCssupplychainwhichisdesignedtodrivedownWSSCscostofdoingbusiness.ActivitiesincludedlaunchingStrategicSourcingTeamsSSTtoincorporatestrategicsourcingbestpracticesandnegotiationsmanagementintoourprocurementprocesstherebyimprovingourprocurementefficienciesidentifyingsupplychainrisksimprovingourcontractadministrationandmonitoringcostreductionandcostavoidanceintheprocurementofgoodsandserviceswithinoursupplychain.ThroughJune2014ourreturnoninvestmentROIofthetransformationstandsatbetterthan400.AswebegintoseeresultsofourstrategicsourcingeffortsweexpectanevengreaterROI.OnthesupplierdiversityfrontWSSCsspendingMBEpaymentswithminoritybusinessenterprisesuppliersincreasedbyover8inFY2014.AwardsaleadindicatoralsoincreasedinFY2014.Whilewedidnotmeetouraspirationalspendgoalof26withMBEswecontinuetoexpandourmarketplacebyattractingnewfirmstodobusinesswithusandweanticipategreaterspendtoMBEsinFY2015.INTEGRATINGSUPPLYCHAINMANAGEMENTSUPPLIERDIVERSITYFY12FY13FY14RESULTSProcurementandSLMBEImproveMinorityBusinessEnterpriseMBEPaymentsPercentage.ImproveMinorityBusinessEnterpriseMBEAwardsPercentage.Improveprocurementprocesscycletimeandenhanceprocurementpractices.IncreasenewregistrantsinWSSCsCentralizedBiddersRegistrationSystemCBR.IncreasenewMinorityBusinessEnterpriseSLMBEregistrants.InFY2014theCommissionspent99.9million20intotalcontractpaymentswithMWBEfirmsascomparedto92.1million20inFY2013.TheFY2014levelofspendingwas7.8millionmorethanFY2013.InFY2014theCommissionawarded42.3millionmoretoMWBEsthaninFY2013whichamountedto228.5million23asopposedto186.3million25inFY2013.WSSCstotalcontractawarddollarsof974.3millionincreasedby228milliondollarsincomparisontothecontractawards746.3millioninFY2013.InFY2014wecontinuedtoenhanceourprocurementpracticesbyinitiatingoursupplychaintransformationincludingstrategicsourcingandcontractmanagementtraining.Weconducted21educationoutreachsessionsforsuppliersincludingoursignatureHowtoDoBusinessWithWSSCevents.InFY2014weexceededourtargetof336newregistrantsby511registrants.Thisrepresents252ofouroriginaltarget.InFY2014wemissedourtargetof200newSLMBEregistrantsby117or58.TotalSLMBEregistrantsinourCBRattheendofFY2014were733.ENSURINGSECURITYANDSAFETYProtectourpeopleourbusinessandourcommunitythroughproactiveplanningemergencypreparednessandutilizationofeffectiveriskmanagement.StrategiesInitiativesTheoperationalresiliencyofourenterpriseiscriticaltoprovidingqualityuninterruptedservicetoourcustomers.InFY2014wecompletedourCommission-wideVulnerabilityAssessmentVAandalsocompletedmajormilestonesinourbusinesscontinuityplanninginitiative.BothoftheseinitiativeswerelaunchedinFY2013forensuringcontinuityofoperationsandprotectingourfacilitiesanddistributionsystemfromnaturalandman-madedisasters.FromanemployeeperspectivewecontinuedtofocusondriveraccountabilityandemployeesafetyinFY2014.WSSCsOSHAreportableaccidentsareconsistentlybelowthenationalaverageforthewaterandwastewaterindustry.AsaresultWSSCwaspresentedwiththe2014AWWAWendellR.LaDueSafetyAwardforoutstandingperformanceforourstateoftheartsafetyprogram.Thisawardrecognizesdistinguishedwaterutilitysafetyprograms.EmployeeandPublicSafetyImproveemployeehealthandsafety.OSHAreportableinjuriesdecreasedbymorethan12fromFY2013to2014.SinceFY2010OSHAreportableinjurieshavedecreasedalmost23.ENSURINGSECURITYANDSAFETYFY12FY13FY14RESULTSMBESpendingTransformationROICumulativeFY2012TotalWSSCSpend365.7millionMBESpend102.3millionFY2013TotalWSSCSpend465.1millionMBESpend92.1millionFY2014TotalWSSCSpend491.4millionMBESpend99.9million14501SweitzerLaneLaurelMaryland20707ThenumberusedhereisbasedontheauditedvalidatedFY2014SLMBELegislativeReport.PerformanceMeasurementSystemdatamaydifferslightlyduetotheutilizationofunauditedsourcedata.CostReductions5.1millionInvestment1.2million