This standard describes the critical elements of e?ective business practices for the operation and management of water, wastewater, and reclaimed water utilities (to be referred to as the water sector). It encompasses the major functions necessary to manage and sustain a successful utility. This standard can be referenced in the development and evaluation of the business practices described in Sec. 1.1. The stipulations of this standard apply when this document has been referenced and then only to the business practices described in Sec. 1.1.<\/p>\n
| PDF Pages<\/th>\n | PDF Title<\/th>\n<\/tr>\n | ||||||
|---|---|---|---|---|---|---|---|
| 1<\/td>\n | Document Article Figure G410-23 G410-23 ANSI\/AWWA (Revision of ANSI\/AWWA G410-18) Ideal crop marks AWWA Management Standard AWWA Management Standard Business Practices for Operation and Management Business Practices for Operation and Management E\ufb00ective date: May 1, 2024. First edition approved by Board of Directors Jan. 25, 2009. This edition approved Oct. 23, 2023. Approved by American National Standards Institute Dec. 19, 2023. Figure Since 1881SM Figure <\/td>\n<\/tr>\n | ||||||
| 2<\/td>\n | AWWA Management Standard This document is an American Water Works Association (AWWA) management standard. It is not a specification. AWWA management standards describe consensus requirements for utility management practices. The use of AWWA management standards is entirely voluntary. This standard does not supersede or take precedence over or displace any applicable law, regulation, or code of any governmental authority. AWWA management standards are intended to represent a consensus of the water industry of requirements and practi American National Standard An American National Standard implies a consensus of those substantially concerned with its scope and provisions. An American National Standard is intended as a guide to aid the manufacturer, the consumer, and the general public. The existence of an American National Standard does not in any respect preclude anyone, whether that person has approved the standard or not, from manufacturing, marketing, purchasing, or using products, processes, or procedures not conforming to the standard. American National Sta Caution Notice: The American National Standards Institute (ANSI) approval date on the front cover of this standard indicates completion of the ANSI approval process. This American National Standard may be revised or withdrawn at any time. ANSI procedures require that action be taken to reaffirm, revise, or withdraw this standard no later than five years from the date of ANSI approval. Purchasers of American National Standards may receive current information on all standards by calling or writing the America info@ansi.org ISBN-13, print: \u2003978-1-64717-172-8 ISBN-13, electronic: \u2003978-1-61300-699-3 DOI:\u2003http:\/\/dx.doi.org\/10.12999\/AWWA.G410.23 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including scanning, recording, or any information or retrieval system. Reproduction and commercial use of this material is prohibited, except with written permission from the publisher. Copyright \u00a9 2023 by American Water Works AssociationPrinted in USA <\/p>\n<\/td>\n<\/tr>\n | ||||||
| 3<\/td>\n | Committee Personnel Committee Personnel The AWWA Standards Committee on Business Practices for Operation and Management, which reviewed and approved this standard, had the following personnel at the time of approval: Dwayne Schwartz, Chair Consultant Members M.W. Grimm, West Slope Water District, Happy Valley, Ore. C. Ly, Independent Consultant, Hacienda Heights, Calif. A. Ramamurthy, Kennedy\/Jenks Consultants, Virginia Beach, Va. E.M. Rebitch, Rural Water Asset Management Group, Delmont, Pa. A.M. Sanchez Virnoche, FCS Group, Redmond, Wash. H. Sinclair, Arcadis, Hanover, Md. R. van Buskirk, Trimtab Consulting LLC, El Dorado Hills, Calif. Management Interest Members G.M. Baird, Black & Veatch Management Consulting LLC, Provo, Utah M.R. Joseph, WSP Canada Inc., Brampton, Ont. M. Klein, Aqualaurus Group, Fort Mill, S.C. D. Mason (liaison, nonvoting), Standards Council Liaison, Holden, Mo. R.W. Mundy, II, McWane Ductile, Lexington, Ky. P.J. Olson (liaison, nonvoting), Standards Engineer Liaison, AWWA, Denver, Colo. R.W. Roost, AWWA Training Services, Lansing, Mich. H. Stephens, North Texas Municipal Water District, Wylie, Tex. User Members J.J. Diaz, Startex Jackson Wellford & Duncan, Lyman, S.C. S.S. Randhawa, EIT, Winnipeg, Man. D.S. Schwartz, City of Waynesboro\/Water Treatment, Waynesboro, Va. C. Wachs, Montgomery Water Works & Sanitary Sewer Board, Montgomery, Ala. J.P. Walsh, Arizona Water Company, Phoenix, Ariz. K.B. Waterhouse, Connecticut Water Co., East Windsor, Conn. <\/td>\n<\/tr>\n | ||||||
| 5<\/td>\n | Foreword Foreword Foreword I Introduction ……………………………… vii I Introduction ……………………………… vii I.A Background ………………………………. vii I.A Background ………………………………. vii I.B History …………………………………….. viii I.B History …………………………………….. viii I.C Acceptance ……………………………….. viii I.C Acceptance ……………………………….. viii II Special Issues …………………………….. viii II Special Issues …………………………….. viii II.A Advisory Information on II.A Advisory Information on Application of Standards ……….. viii III Use of This Standard ………………….. viii III Use of This Standard ………………….. viii III.A Options and Alternatives …………….. viii III.A Options and Alternatives …………….. viii III.B Modi\ufb01cation to Standard…………….. viii III.B Modi\ufb01cation to Standard…………….. viii IV Major Revisions …………………………. ix IV Major Revisions …………………………. ix V Comments ……………………………….. ix V Comments ……………………………….. ix Management Standard Management Standard 1 General 1 General 1.1 Scope……………………………………….. 1 1.1 Scope……………………………………….. 1 1.2 Purpose ……………………………………. 1 1.2 Purpose ……………………………………. 1 1.3 Application ……………………………….. 2 1.3 Application ……………………………….. 2 2 References ……………………………….. 2 2 References ……………………………….. 2 3 Definitions ………………………………. 3 3 Definitions ………………………………. 3 4 Requirements 4 Requirements 4.1 Strategic Planning ……………………… 5 4.1 Strategic Planning ……………………… 5 4.2 Capital Improvement Program …….. 7 4.2 Capital Improvement Program …….. 7 4.3 Continuous Improvement …………… 10 4.3 Continuous Improvement …………… 10 4.4 Engineering ………………………………. 12 4.4 Engineering ………………………………. 12 4.5 Finance\/Fiscal Management ………… 16 4.5 Finance\/Fiscal Management ………… 16 4.6 Governance ………………………………. 22 4.6 Governance ………………………………. 22 4.7 Health and Safety ………………………. 24 4.7 Health and Safety ………………………. 24 4.8 Human Resources ……………………… 27 4.8 Human Resources ……………………… 27 4.9 Information Management …………… 29 4.9 Information Management …………… 29 4.10 Organizational Development ………. 32 4.10 Organizational Development ………. 32 4.11 Plant and Property Management ….. 35 4.11 Plant and Property Management ….. 35 4.12 Procurement ……………………………… 37 4.12 Procurement ……………………………… 37 4.13 Risk Management ……………………… 40 4.13 Risk Management ……………………… 40 4.14 Asset Management …………………….. 41 4.14 Asset Management …………………….. 41 5 Verification 5 Verification 5.1 Documentation Required ……………. 48 5.1 Documentation Required ……………. 48 5.2 Human Resources ……………………… 49 5.2 Human Resources ……………………… 49 6 Delivery …………………………………… 49 6 Delivery …………………………………… 49 <\/td>\n<\/tr>\n | ||||||
| 7<\/td>\n | Foreword Foreword This foreword is for information only and is not a part of ANSI*\/AWWA G410. * American National Standards Institute, 25 West 43rd Street, 4th Floor, New York, NY 10036. * American National Standards Institute, 25 West 43rd Street, 4th Floor, New York, NY 10036. I. Introduction. I.A. Background. The AWWA Standards Program is designed to serve water, wastewater, and reclaimed water utilities\u2014hereafter, the water sector\u2014their customers, owners, service providers, and government regulators. The standards developed under the program are generally intended to improve a utility\u2019s overall operations and service. Among these standards is this effort to establish formal management and operations guidelines. These guidelines identify appropriate practices, procedures, and behaviors whose imp AWWA\u2019s standards process has been used for more than 90 years to produce American National Standards Institute (ANSI)\u2013recognized standards for materials and processes that are used by the water sector. These standards are recognized worldwide and have been adopted by many utilities and organizations. Likewise, this performance standard is developed using the same ANSI-recognized formal process. Volunteer standards committees establish standard practices in a uniform and appropriate format. Formal AWWA standards committees have been and continue to be formed to address the individual standard practices for the diverse range of water sector utilities. A formal standards committee was created in November 2006 to create this standard, Business Practices for Operation and Management. AWWA has developed a series of utility management standards designed to cover the principal activities of water sector utilities. Some examples of the individual topics in this series include those for water treatment plant operation and management, distribution system operation and management, source water protection, emergency preparedness practices, security practices, communication and customer relations, business practices, water conservation program operation and management, and reclaimed water operat The Utility Management G-Series Standards were developed to assist utilities with identifying and implementing applicable best management practices. To further enhance the use of the standards, the AWWA Utility Quality Management Committee developed both self-assessment and peer-review programs to assist utilities that choose to meet performance criteria contained within the standards. The committee developed a framework for the stringent expectations of all utility management standards, as follows: <\/td>\n<\/tr>\n | ||||||
| 8<\/td>\n | \u00b7 Utility management standards are voluntary, and their intent is to provide guidance toward best management practices. \u00b7 The requirements set forth in the standards describe best practices that are achievable but not necessarily the best of class. \u00b7 The language used in the standards should avoid requirements related to numeric values and words such as \u201cshall\u201d or \u201cmust\u201d in areas that describe or could be considered in exceedance of existing local and\/or federal regulations. I.B. History. The first edition of G410 was approved by the AWWA Board of Directors on Jan. 25, 2009. The second edition of G410 was approved on June 9, 2018. This edition of G410 was approved on Oct. 23, 2023. I.C. Acceptance. There is no applicable information for this section. II. Special Issues. II.A. Advisory Information on Application of Standards. This standard is limited exclusively to and includes only those requirements for establishing e\ufb00ective operation and management business practices for water sector utilities. Separate standards adopted by the Standards Program cover development of a utility-management system framework and other programs such as water treatment plant operation and management, distribution system operation and management, source water protection, security practices, emer III. Use of This Standard. It is the responsibility of the user of an AWWA standard to determine that the products and provisions described in that standard are suitable for and compatible with the user\u2019s intended application being considered. III.A. Options and Alternatives. The following information should be provided by the purchaser: 1. Industry standard used, i.e., ANSI\/AWWA G410, Business Practices for Operation and Management, of latest revision. 2. Details of federal, state, and local provincial, territorial, and local governments guidance, programs, practices, and\/or regulatory requirements. III.B. Modi\ufb01cation to Standard. There is no applicable information for this section. <\/td>\n<\/tr>\n | ||||||
| 9<\/td>\n | IV. Major Revisions. Major revisions made to the standard in this edition include the following: 1. The updated description and discussion of AWWA utility management standards developed by the AWWA Standards Council for inclusion in all management standards have been added to the foreword. (Sec. I.A) 2. Definitions for collaborative project delivery framework, manufacturer, resources, and stakeholders have been added. (Sec. 2) 3. A requirement for regular update of developed procurement processes for services and materials was added to the section on integrated functions and practices for procurement. (Sec. 4.12.4.1) V. Comments. If you have any comments or questions about this standard, please call AWWA Engineering and Technical Services at 303.794.7711, write to the department at 6666 West Quincy Avenue, Denver, CO 80235-3098, or e-mail at . standards@awwa.org <\/td>\n<\/tr>\n | ||||||
| 11<\/td>\n | G410-23 G410-23 ANSI\/AWWA (Revision of ANSI\/AWWA G410-18) \u00ae AWWA Management Standard AWWA Management Standard Business Practices for Operation and Management SECTION 1: GENERAL Sec. 1.1 Scope This standard describes the critical elements of e\ufb00ective business practices for the operation and management of water, wastewater, and reclaimed water utilities (to be referred to as the water sector). It encompasses the major functions necessary to manage and sustain a successful utility. Sec. 1.2 Purpose The purpose of this standard is to establish criteria for how the water sector develops, measures the performance of, and improves the strategic planning, resource management, and support functions necessary to create and sustain a high-performing organization. This standard describes the framework that successful utilities should use in developing and improving the performance of these business practices, including the establishment of policies and performance standards, the creation of functions and pract <\/td>\n<\/tr>\n | ||||||
| 12<\/td>\n | Sec. 1.3 Application This standard can be referenced in the development and evaluation of the business practices described in Sec. 1.1. The stipulations of this standard apply when this document has been referenced and then only to the business practices described in Sec. 1.1. SECTION 2:\u2003REFERENCES This standard references the following documents. In their latest editions, they form a part of this standard to the extent specified within the standard. In any case of conflict, the requirements of this standard shall prevail. Americans with Disabilities Act\/US Equal Employment Opportunity Commission. ANSI\/ASSE Z10-2012(R2017)\u2014Occupational Health and Safety Management Systems. * * American National Standards Institute, 25 West 43rd Street, Fourth Floor, New York, NY 10036. * American National Standards Institute, 25 West 43rd Street, Fourth Floor, New York, NY 10036. \u2020 American Society of Safety Professionals, 520 North Northwest Highway, Park Ridge, IL 60068. American Society of Safety Professionals, 520 North Northwest Highway, Park Ridge, IL 60068. \u2020 ANSI\/AWWA G420\u2014Communication and Customer Relations. ANSI\/AWWA G430\u2014Security Practices for Operation and Management. ANSI\/AWWA J100\u2014Risk and Resilience Management of Water and Wastewater Systems. AWWA Manual M1\u2014Principles of Water Rates, Fees, and Charges. AWWA Manual M36\u2014Water Audits and Loss Control Programs. Effective Utility Management (EUM)\u2014A Primer for Water and Wastewater Utilities. Financial Management for Water Utilities\u2014Principles of Finance, Accounting, and Management Controls. ISO 55000\u2014Asset Management\u2014Overview, Principles and Terminology. \u2021 International Organization for Standardization, Customer Service Division, 545 Washington Boulevard, Jersey City, NJ 07310. International Organization for Standardization, Customer Service Division, 545 Washington Boulevard, Jersey City, NJ 07310. \u2021 ISO 55001\u2014Asset Management\u2014Management Systems\u2014Requirements. ISO 55002\u2014Asset Management\u2014Management Systems\u2014Guidelines for the Application of ISO 55001. OSHA Voluntary Protection Program (VPP). \u00a7 Occupational Safety and Health Administration, 200 Constitution Avenue, NW, Washington, DC 20210. Occupational Safety and Health Administration, 200 Constitution Avenue, NW, Washington, DC 20210. \u00a7 Project Management Institute (PMI); PMBOK Guide. \u00b6 Project Management Institute, 18 Campus Boulevard, Ste. 150, Newton Square, PA 19073. Project Management Institute, 18 Campus Boulevard, Ste. 150, Newton Square, PA 19073. \u00b6 <\/td>\n<\/tr>\n | ||||||
| 13<\/td>\n | SECTION 3:\u2003DEFINITIONS The following definitions shall apply in this standard: 1. Asset management: The systematic care, disposal, maintenance, and\/or replacement of the total resources of a business, including cash, notes, accounts receivable, inventories, securities, machinery, fixtures, land, buildings (owned or leased), rights-of-way, easements, or any source of wealth having economic value to the business. Asset management allows the organization to make rational, prioritized decisions on whether to repair, rehabilitate, or replace an asset based on economic and risk-based factor 2. Budget: An estimate of proposed expenditures for a given period or purpose and a statement of the means of financing them. 3. Capital improvement program (CIP): A plan, updated or compiled regularly by most utilities, that identifies facility and major equipment requirements over an extended period, often 20 years or more. The CIP is often a part of, or stems from, a water system master plan that combines water demand projections with supply alternatives and facility requirements. It is different from a replacement program, which concentrates on smaller assets generally funded from current revenues or from funds established for 4. Collaborative project delivery framework: Various methods of capital project delivery approaches that include Design-Bid-Build, Design-Build, Construction-Manager-at-Risk, Design-Build-Operate, Design-Build-Finance-Operate-Maintain, and Concession. 5. Consultant: In this standard, the term consultant refers to a qualified professional or a firm hired by the owner to perform planning, design, management, construction observation, and other services or to give advice related to such issues. 6. Life cycle cost analysis (LCCA): An analytical tool for decision-making that determines the most cost-effective option of technically valid alternatives for building, owning, rehabilitating, maintaining, or disposing of an asset. 7. Management: The person or persons charged with implementing policies established by the organization\u2019s oversight body for controlling and directing the affairs and operations of a water utility, business, or institution. 8. Manufacturer: The party that manufactures, fabricates, or produces materials or products. <\/td>\n<\/tr>\n | ||||||
| 14<\/td>\n | 9. Potable water: Water that is safe and satisfactory for drinking and cooking. 10. Public\u2013private partnership: A cooperative shared risk arrangement between multiple public and private parties, established specifically to provide, manage, or operate a public asset or service, in which remuneration is linked to performance. 11. Purchaser: The person, company, or organization that purchases any materials or work to be performed. 12. Reclaimed water: Wastewater that becomes suitable for beneficial use as a result of treatment. 13. Resources: Include, but are not limited to, human resources, specialized skills, organizational infrastructure, technology, and \ufb01nancial resources. 14. Stakeholders: A group, organization, person, or agency who has an interest in, decision-making responsibility for, or authority over a process and who is a\ufb00ected by or will bene\ufb01t from the outcome of a process. Examples of stakeholders are customers, elected o\ufb03cials, regulatory agencies, utility employees, and representatives of culturally diverse audiences in the community. 15. Supplier: The party that supplies materials or services. A supplier may or may not be a manufacturer. 16. Wastewater: A combination of the liquid and water-carried waste from residences, commercial buildings, industrial plants, and institutions, together with any groundwater, surface water, and stormwater that may be present. SECTION 4:\u2003REQUIREMENTS This standard applies to water, wastewater, and reclaimed water utilities, regardless of size, location, ownership, or regulatory status, hereafter referred to as the water sector. The requirements are progressive and intended to guide the utility from the bottom up in developing and maintaining effective business practices to manage and sustain a successful utility. This standard requires that the utility establish goals to disseminate and promote the exchange of information, ideas, and opinions, with the audience identified. Additionally, goals should serve to build trust, service excellence, credibility, and respect for others. Clearly defined goals that are achievable and measurable can be monitored for reporting progress and used to describe what constitutes success for the plan. <\/td>\n<\/tr>\n | ||||||
| 15<\/td>\n | The utility shall develop a strategy to optimize efforts, periodically review progress, and make revisions as needed to improve the plan, keeping it relevant to meet the needs of the utility\u2019s strategic plan. Sec. 4.1 Strategic Planning 4.1.1 Policies and performance standards. To meet this standard, an organization must demonstrate that it has in place policies and performance standards for strategic planning as follows: 4.1.1.1 Mission development. The governing body of an organization shall clearly identify the mission of the organization, including how the organization measures successful mission accomplishment. 4.1.1.2 Policies for developing and updating the strategic plan. Policies and procedures for developing and updating the organization\u2019s strategic plan shall be identi\ufb01ed. 4.1.1.3 Policies related to expectations of management. The policies related to strategic planning shall clearly communicate the expectation for management to implement necessary programs, services, and projects to accomplish the mission of the organization. 4.1.1.4 Policies related to strategic planning processes and performance measurement. An organization shall establish policies describing the process for developing the strategic plan, key participants, time frames for developing the plan, and methodology for establishing the plan objectives and their measurement and reporting. 4.1.2 Functions and practices. To meet this standard, an organization must demonstrate that it has in place functions and practices for strategic planning as follows: 4.1.2.1 Strategic plan development. An organization shall develop, and periodically update, a strategic plan that guides the delivery of the organization\u2019s core services, maintenance of and investment in infrastructure, hiring and development of employees, and customer service. The strategic plan shall describe the organization\u2019s mission, vision, and core values; key constituencies and their objectives; and key assumptions and environmental in\ufb02uences. The strategic plan shall identify long-term goals and me <\/td>\n<\/tr>\n | ||||||
| 16<\/td>\n | 4.1.2.2 Strategic plan updates. An organization shall update the strategic plan on a regular basis, no more frequently than annually and no less frequently than every five years, depending on the rate of change in the industry, organization, or regulatory environment. 4.1.2.3 A CIP plan to support the strategic plan. An organization shall have in place a CIP plan that identi\ufb01es the capital investments needed over a specific time frame, as well as a \ufb01nancial plan that adequately funds the strategies, construction, operation, and maintenance of facilities and programs outlined in the strategic plan. 4.1.2.4 Annual reporting of strategic plan progress. Each year, an organization shall report progress toward accomplishing the goals and objectives of its strategic plan to its customers, governing body, employees, lenders\/investors, and other key stakeholders. 4.1.3 Organizational capacity and technology. To meet this standard, an organization must demonstrate that it has in place the organizational capacity and technology for strategic planning as follows: 4.1.3.1 Staff capacity. An organization shall have in place the administrative and management personnel and staff (or contracted expertise) to conduct and monitor the strategic planning and implementation process. 4.1.3.2 Technology. An organization shall have access to enabling technologies commensurate with the level of complexity and needs of the organization. 4.1.4 Integration of functions and practices. To meet this standard, an organization must demonstrate integration of its functions and practices for strategic planning into the organization as follows: 4.1.4.1 Integration with performance management. An organization shall have management and employee performance goals, objectives, and action items linked to the organization\u2019s strategic plan. Annual performance appraisals shall reference achievement of the objectives of the strategic plan. 4.1.4.2 Integration with strategic and operational plans. An organization shall have mechanisms in place for the integration of the strategic plan into the departmental operational plan, budgets, work plans, goals, and objectives; operational plans, budgets, work plans, goals, and objectives must be consistent with and in furtherance of the strategic plan. <\/td>\n<\/tr>\n | ||||||
| 17<\/td>\n | Sec. 4.2 Capital Improvement Program 4.2.1 Policies and performance standards. To meet this standard, an organization must demonstrate that it has in place policies and performance standards for its CIP as follows: 4.2.1.1 Capital improvement planning policies. To ensure acceptable performance of its infrastructure over the infrastructure\u2019s design life, including the ability to meet current and emerging regulatory requirements, population growth, and changing demand and usage, an organization shall have in place a policy of developing a multiyear CIP that speci\ufb01es in detail the organization\u2019s plans for replacing, rehabilitating, and\/or expanding its system infrastructure. Development of the CIP should also consider su 4.2.1.2 Policies for using consultants. An organization shall have in place a policy or strategy for using consultants to support the planning and execution of its CIP. The policy or strategy shall consider the cost-effectiveness and risk associated with employing individuals with highly specialized skills versus contracting with qualified professional service providers for those same skills. 4.2.1.3 Performance measurement. An organization shall have in place performance standards and metrics for the execution of its CIP to ensure that the scope, schedule, and budget of individual projects, as well as the CIP, meet the organization\u2019s standards for performance. These standards and metrics shall monitor the execution of the CIP to assist in making course corrections where necessary and to compare the performance of the organization\u2019s CIP with that of other similar organizations. 4.2.1.4 Policies for project selection. An organization shall have in place policies that stipulate the procedures for the development, evaluation, prioritization, and selection of CIP projects. Such policies may call for the use of cost\u2013bene\ufb01t analysis, multi-objective decision-making tools, committee-based evaluation processes (e.g., business case evaluation [BCE]), and value engineering, among others. 4.2.1.5 Policies for \ufb01nancing system growth. An organization shall have in place policies that establish how system growth and expansion will be \ufb01nanced (i.e., the role of developers\u2019 fees, capacity charges, grants, governmental subsidies, private capital, concessions, etc.). An organization shall also have in place standards for selecting project delivery frameworks that include design, construction, and inspection\/acceptance of system infrastructure that is \ufb01nanced and constructed by private developers an <\/td>\n<\/tr>\n | ||||||
| 18<\/td>\n | 4.2.2 Functions and practices. To meet this standard, an organization must demonstrate that it has in place functions and practices to support its CIP as follows: 4.2.2.1 Accountability for program execution. An organization shall establish clear accountability for its CIP with a single organizational segment, office, or individual\u2014either a capital improvement program director\/manager or, in the case of smaller systems, the general manager or another management-level employee with adequate engineering, business, and system planning experience and the ability to e\ufb00ectively manage contract resources and ensure adequate professional development, mentorship, and training 4.2.2.2 Effective CIP project delivery. An organization shall establish clear project-management processes (e.g., Project Management Institute [PMI] Project Management Book of Knowledge [PMBOK] Project Management Standards) to efficiently and effectively deliver capital projects. Collaborative project delivery frameworks should be considered as part of the project cost, financing, and risk analyses and assessments. 4.2.2.3 Stakeholder involvement. The process of developing an organization\u2019s CIP shall include key stakeholders, including engineering, maintenance, \ufb01nance, customer service, and other stakeholders as necessary. External regulators, investors\/lenders, and customers should also have a designated role in the development of a CIP, although such a role may be advisory in nature. 4.2.2.4 Consideration of costs in selecting among alternatives. An organization\u2019s process for selecting among capital improvement project alternatives shall consider each alternative\u2019s life cycle costs (i.e., long-term maintenance costs and capital costs), environmental costs, and community effects (\u201csocial\u201d costs). 4.2.2.5 Supporting tools. An organization shall have in place robust programs\/tools for supporting the development of its CIP, including condition assessment programs, water audit and loss control programs, and tools for forecasting future population and consumption. 4.2.2.6 Practices for updating the CIP. An organization shall review and update its CIP annually and perform \u201cmajor\u201d updates approximately every \ufb01ve years. <\/td>\n<\/tr>\n | ||||||
| 19<\/td>\n | 4.2.2.7 Community and stakeholder communication. An organization shall have in place an ongoing communications program for communicating its capital improvement plans to community stakeholders, regulators, and other key stakeholders. This program shall ensure a proper level of involvement of stakeholders in siting decisions. 4.2.3 Organizational capacity and technology. To meet this standard, an organization must demonstrate that it has in place the capacity and technology for developing and implementing a CIP as follows: 4.2.3.1 Staff capacity. An organization shall hire, develop, and retain staff that can effectively manage the organization\u2019s CIP, including elements of the program performed in-house and those performed by consultants. 4.2.3.2 Organizational structure. An organization shall continually evaluate its structure to ensure that the structure supports effective execution of the CIP. 4.2.3.3 Technologies for information management and process controls. An organization shall have in place business\/operations systems and technologies, including data management processes and procedures, that allow it to effectively plan, implement, and evaluate its CIP. Supervisory control and data acquisition (SCADA) systems, computerized maintenance management systems (CMMS), computer-aided design (CAD) systems, geographic information systems (GIS), project-management systems, financial data systems, and 4.2.4 Integration of functions and practices. To meet this standard, an organization must demonstrate integration of its functions and practices for implementing a CIP into the organization as follows: 4.2.4.1 Training. An organization shall provide staff training to ensure that personnel are fully trained in their areas of responsibility related to the organization\u2019s CIP. Training shall occur on a regular basis and enhance the staff\u2019s planning, business, and engineering skills; develop their project analysis skills (e.g., cost\u2013bene\ufb01t analysis); enhance their knowledge and use of available technology; and enhance their ability to plan and manage the CIP and to manage people. <\/td>\n<\/tr>\n | ||||||
| 20<\/td>\n | 4.2.4.2 Integration with strategic, information system, and \ufb01nancial plans. Execution of an organization\u2019s CIP shall be consistent with the organization\u2019s strategic plan, information system plan, and \ufb01nancial plan. Sec. 4.3 Continuous Improvement 4.3.1 Policies and performance standards. To meet this standard, an organization must demonstrate that it has policies and performance standards for continuous improvement in place as follows: 4.3.1.1 Policies to guide continuous-improvement strategy. A corporate policy shall be in place that clearly describes organizational goals for identifying and implementing improvements to service quality, effectiveness, and efficiency within the context of an overall strategic plan; the framework(s) by which the organization will pursue such goals (e.g., industry programs such as the AWWA Utility Benchmarking Program, the Partnership for Safe Water, the Partnership for Clean Water, EUM, and\/or broader envi 4.3.1.2 Policies guiding what is to be measured. Detailed policies shall be in place for\u2014at a minimum\u2014the following elements of continuous improvement: accurately and reliably measuring key indicators of current performance; benchmarking organizational performance relative to relevant external standards and comparators to identify areas of potential improvement; process benchmarking relative to best-practice leaders to inform the development of strategies for performance gains; and ongoing measurement and a 4.3.1.3 Performance measurement framework. To every extent feasible, performance standards shall be in place that link to the organization\u2019s strategic plan and that encompass a range of indicators for sustained performance. This range of indicators shall include measures that are appropriate for internal and external stakeholders, supportive of both routine work and special projects, and responsive to the needs of line employees, management, and executives. Measures shall focus on quality, efficiency, and e <\/td>\n<\/tr>\n | ||||||
| 21<\/td>\n | 4.3.2 Functions and practices. To meet this standard, an organization must demonstrate that it has functions and practices for continuous improvement in place as follows: 4.3.2.1 Executive responsibility for continuous improvement. Specifically designated senior management shall oversee the continuous-improvement program to ensure compatibility with the organization\u2019s overall strategic plan and direction. 4.3.2.2 Staff capacity. In addition to executive oversight and direction, an organization shall have individuals and\/or work units responsible for implementing continuous-improvement activities, including performance monitoring, benchmarking and gap analysis, and process improvement. 4.3.2.3 Target development. An organization shall establish and revise, on a periodic basis, continuous-improvement targets, typically in conjunction with the budgeting process, to re\ufb02ect broad internal, external, \ufb01nancial, and improvement goals in strategic and operating plans. 4.3.2.4 Addressing improvement needs. Where gaps are identi\ufb01ed between established continuous improvement targets and current performance, the organization shall demonstrate a practice of addressing prioritized opportunities for improvement using approaches such as metric and process benchmarking, process mapping, and external and peer evaluations. Business intelligence and other analytic tools shall support analysis and identification of trends associated with both leading and lagging performance measures. 4.3.2.5 Ongoing monitoring and reporting. A continuous-improvement program shall also include a routine monitoring and reporting process. Frequency may vary for di\ufb00erent metrics but would typically include both annual and interim reports. Metrics shall be consistent with indicators used broadly within the industry to facilitate benchmarking and other comparative analyses. Practices shall be in place to ensure the accuracy, reliability, and timeliness of data used for continuous improvement. Practices and to 4.3.3 Organizational capacity and technology. To meet this standard, an organization must demonstrate that it has the organizational capacity and technology for continuous improvement in place as follows: <\/td>\n<\/tr>\n | ||||||
| 22<\/td>\n | 4.3.3.1 Staff capacity. An organization shall hire, develop, and retain staff that can effectively carry out its continuous-improvement program at each level in the organization. 4.3.3.2 Organizational structure. An organization shall continually evaluate its organizational structure to ensure that its structure is appropriate to effectively carry out its continuous-improvement program. 4.3.3.3 Technology. An organization shall develop and implement technologies and methodologies that allow it to effectively implement and evaluate its continuous-improvement program, such as monitoring tools, asset management systems, and customer feedback mechanisms. 4.3.4 Integration of functions and practices. To meet this standard, an organization must demonstrate integration of its functions and practices for continuous improvement into the organization as follows: 4.3.4.1 Training. An organization shall provide staff training on a regular basis to ensure full training on every element of the continuous-improvement program relevant to their work. 4.3.4.2 Communication with and feedback to staff. Staff at each level shall receive regular feedback regarding performance and progress on organization-wide, unit-wide, and, where appropriate, individual levels. 4.3.4.3 Integration with strategic and operational plans. An organization\u2019s strategic, \ufb01nancial, and operational plans shall clearly incorporate strategies, tactics, and metrics for continuous improvement. 4.3.4.4 Continuous improvement. A utility\u2019s continuous-improvement business processes (including policies, performance standards, functions, and practices) shall be holistic in strategy and approach. Sec. 4.4 Engineering 4.4.1 Policies and performance standards. To meet this standard, an organization must demonstrate that it has in place policies and performance standards for its engineering program as follows: 4.4.1.1 Policies for outsourcing. An organization shall have in place a policy or strategy for balancing the use of in-house engineering staff against the use of consultants to implement its engineering program. Generally speaking, building in-house engineering capability is more appropriate for activities performed frequently and that require commonly performed engineering tasks (e.g., water main design, project management). For activities that require specialized knowledge and skills and\/or occur infreque <\/td>\n<\/tr>\n | ||||||
| 23<\/td>\n | 4.4.1.2 Policies for contracting for services. Policies shall be in place that clearly articulate the organization\u2019s processes for procuring outside services via requests for proposals, requests for quali\ufb01cations, etc. An organization shall periodically review the policies and associated processes for conformance with federal, state, and local laws related to procurement, as well as for good business sense. The basis for any contracting preferences or exclusion must be well-documented and based on explicit 4.4.1.3 Project delivery policies. An organization shall establish policies to guide organization staff in sourcing, contracting methods, project management, preliminary engineering (e.g., survey, requirements, bid documents), design, project review (e.g., value engineering), construction management, and risk management. 4.4.1.4 Standard requirements for materials, equipment, and methods. An organization shall have in place a written set of standards and requirements for materials, equipment, construction methods, construction safety, and environmentally responsible maintenance and construction practices. 4.4.1.5 Policies for ensuring quality of work performed by private parties. An organization shall have in place enforceable policies establishing its authority to ensure that private and other agency development and construction activities conform to the organization\u2019s standards for materials, equipment, and construction methods. In general, an independent third party must perform the inspection and acceptance of facilities designed by a specific individual (either internal or external to the organization) 4.4.1.6 Design data requirements. An organization shall establish and adopt design data requirements standards and ensure that all design deliverables developed by in-house engineers or consultants follow standardized data requirements during all stages of design, enabling effective design review and delivery. 4.4.1.7 Performance measures. An organization shall have in place a set of performance metrics for its engineering program that measure how well the organization executes its program (schedule), how well the organization estimates costs (planned costs versus actual costs), and how e\ufb03ciently the organization delivers projects (hard costs versus soft costs). <\/td>\n<\/tr>\n | ||||||
| 24<\/td>\n | 4.4.2 Functions and practices. To meet this standard, an organization must demonstrate that it has in place functions and practices for an engineering program as follows: 4.4.2.1 Accountability for program execution. An organization shall establish clear accountability for its engineering program with a single individual\u2014either a chief engineer or, in the case of smaller systems, the general manager or another management-level employee with adequate engineering experience and the ability to e\ufb00ectively manage contract resources. 4.4.2.2 Processes and systems for ensuring performance of constructed assets. An organization shall have in place methods, systems, and processes for ensuring that engineered infrastructure can be safely and cost-e\ufb00ectively maintained by \ufb01eld personnel, conforms to legal and industry standards, is consistent with community expectations for aesthetically appealing design, and meets or exceeds requirements for minimization of environmental impacts. An organization\u2019s staff shall use engineering inspection prac 4.4.2.3 Methods and processes for evaluating alternatives. An organization shall have in place a consistent, agreed-on method and process for evaluating engineering design alternatives. Such a method might be a traditional cost\u2013bene\ufb01t analysis or, in the case of organizations with more sophisticated asset management programs, triple-bottom-line analysis. 4.4.2.4 Incorporation of best practices. An organization shall have in place processes for ensuring that execution of its engineering program is consistent with engineering best practices, including design methods and technological advances. 4.4.2.5 Stakeholder involvement in the review and selection of alternatives. An organization shall have in place a process for evaluating project proposals\/alternatives (including the selection of consultants) that includes quali\ufb01ed key stakeholders, including engineering, maintenance, \ufb01nance, legal advisors, risk management, and, where appropriate, community stakeholders. <\/td>\n<\/tr>\n | ||||||
| 25<\/td>\n | 4.4.2.6 Frequency of design review. An organization shall conduct design reviews at regular intervals throughout the design phase of significant or critical projects. Reviews shall evaluate design concepts, conformance with standards and requirements, quality standards, certainty of cost estimates, construction scheduling and progress, project barriers, and risk mitigation strategies. For a collaborative project delivery, design review is part of the overall approach. 4.4.2.7 Records and plans. An organization shall have in place functions, processes, and systems for retaining as-built information such as project plans, design drawings, and operating manuals needed for future planning, operations and maintenance, and other potential needs. As-builts will also serve as the basis for capturing facility\/equipment changes made over time (by planning and operations and maintenance as upgrades, refurbishments, or replacement of assets and asset systems\/networks occur). 4.4.3 Organizational capacity and technology. To meet this standard, an organization must demonstrate that it has in place the organizational capacity and technology for an engineering program as follows: 4.4.3.1 Staff capacity. An organization shall hire, develop, and retain staff that can effectively manage the organization\u2019s engineering program, including elements of the program performed in-house and those performed by consultants. 4.4.3.2 Organizational structure. An organization shall regularly review its organizational structure to ensure that it can support effective management of the engineering program. 4.4.3.3 Technology. An organization shall develop and implement technologies that allow it to e\ufb00ectively implement its engineering program (and other utility programs and business processes), including but not limited to GIS, maintenance management systems, asset analytics and modeling systems, and project-management tools. 4.4.4 Integration of functions and practices. To meet this standard, an organization must demonstrate integration of its functions and practices for implementing an engineering program into the organization as follows: 4.4.4.1 Training. An organization shall provide training to ensure that staff are fully trained in their areas of responsibility related to the organization\u2019s engineering program. Training shall occur on a regular basis and enhance the staff\u2019s engineering skills, their knowledge and use of available technology, and their ability to manage projects and people. <\/td>\n<\/tr>\n | ||||||
| 26<\/td>\n | 4.4.4.2 Integration with strategic plans. Execution of an organization\u2019s engineering program shall be consistent with the organization\u2019s strategic, system, and \ufb01nancial plans. Sec. 4.5 Finance\/Fiscal Management 4.5.1 Policies and performance standards. To meet this standard, an organization must demonstrate that it has in place policies and performance standards for \ufb01nance and \ufb01scal management as follows: \ufb01nancial planning, budgeting, accounting, \ufb01nancial reporting, cash management, investment management, debt management, reserves management, and rate making. 4.5.1.1 Financial planning. An organization shall have a plan that identi\ufb01es the development of \ufb01nancial resources to achieve the objectives of the multiyear strategic plan. The \ufb01nancial plan shall cover the same time horizon as the long-term CIP plan. 4.5.1.1.1 The \ufb01nancial plan shall identify the \ufb01nancial objectives of the organization to provide for annual operation and maintenance expenses, capital outlays, and adequate working capital and required reserves. It shall also identify and assess the key risks that may prevent the organization from achieving its \ufb01nancial objectives. 4.5.1.1.2 The \ufb01nancial plan shall identify and be based on reasonable assumptions for changes in water usage and expenses. 4.5.1.1.3 The \ufb01nancial plan shall project the income statement, cash flow, and sources and uses of funds in detail adequate to compute standard \ufb01nancial ratios for liquidity, capitalization, efficiency, debt service coverage, pro\ufb01tability, and dividends\/transfers. The \ufb01nancial plan shall also identify the amounts and timing of rate increases and debt issues. 4.5.1.2 Financial budgeting. An organization shall have detailed procedures in place for preparation and monitoring of an annual or biannual budget document that aligns the \ufb01nancial resources to achieve the objectives of the upcoming year\u2019s operating plan, clearly identifying revenue requirements. 4.5.1.2.1 The budget document shall be consistent with the long-term \ufb01nancial plan and based on reasonable assumptions for changes in water usage and expenses. 4.5.1.2.2 Systems and procedures shall support the budget to ensure accountability for effective use of resources. The budget shall reflect renewal and replacement expenses appropriate to sustain the ongoing level of service (LOS) needed to accomplish the strategic plan as well as operational risks\/consequences. <\/td>\n<\/tr>\n | ||||||
| 27<\/td>\n | 4.5.1.3 Financial accounting. An organization shall account for and maintain its funds in separate water, wastewater, and reclaimed water accounts to allow segregation of the utility\u2019s revenues, expenses, and assets at a level of detail sufficient for preparation of financial statements and to support asset management and rate making. One suggested resource is Financial Management for Water Utilities\u2014Principles for Finance, Accounting, and Management Controls. 4.5.1.3.1 The chart of accounts and operational procedures shall be explicitly identified and consistent with generally accepted accounting principles (GAAP) and adequate for compliance with generally accepted auditing standards (GAAS) as promulgated by the Financial Accounting Standards Board (FASB) or Governmental Accounting Standards Board (GASB) as appropriate and as defined by applicable law and regulation. 4.5.1.3.2 The organization shall identify the accounts, journals, and ledgers needed to provide adequate detail to support the \ufb01nancial statements. Written procedures shall be in place regarding recognition of revenues and expenses. These procedures shall clearly identify the requirements for capitalization of expenses and document the method for development of estimates when needed. 4.5.1.4 Financial reporting. An organization shall prepare and distribute standard \ufb01nancial statements, audited by an independent third party to ensure compliance with GAAP on an annual basis. The annual \ufb01nancial report shall include footnotes that adequately describe the accounting policies and practices. The report shall also include management\u2019s discussion and analysis of the \ufb01nancial results, as well as any other supplemental information needed to ensure understanding by the reader of the \ufb01nancial repor 4.5.1.5 Debt management. A policy shall be in place that identi\ufb01es the legal authority authorized to enter the organization into debt obligations to \ufb01nance the construction or acquisition of waterworks assets or to re\ufb01nance existing debt. The policy shall identify the types of debt instruments authorized for use. 4.5.1.5.1 The policy shall identify the organization\u2019s preferred level of debt \ufb01nancing as well as any limits on debt \ufb01nancing. The policy shall indicate the expectation of the governing body that the debt will comply with covenants and requirements of the bond covenants and state and federal laws authorizing and governing the issuance and administration of debt obligations. 4.5.1.5.2 The policy shall require that long-term debt will not \ufb01nance current operations. The policy shall identify the security pledged for repayment of the debt, the authorized method of sale, and the limits on the maximum amount of debt outstanding. The policy shall indicate the target savings threshold for re\ufb01nancing debt obligations. <\/td>\n<\/tr>\n | ||||||
| 28<\/td>\n | 4.5.1.5.3 The policy shall identify the specific metrics used to evaluate the level of debt for the utility (e.g., debt service as a percentage of operating revenues, outstanding debt as a percentage of long-term assets, percentage of annual capital expenses funded by debt versus cash). 4.5.1.6 Reserves management. A policy shall be in place that identi\ufb01es the authority to establish reserves and invest funds, as well as the targeted balance for each type of reserve and the approvals required to use each type of reserve. 4.5.1.6.1 The policy shall indicate the expectation of the governing body that the investment of funds will be in conformance with federal, state or provincial, local, and other legal requirements, including bond or loan covenants and the investment management and cash management policies of the organization. 4.5.1.6.2 The policy shall identify the purpose of the reserves and the objectives and standard of care of the investments. The standard of care shall identify the types of \ufb01nancial institutions authorized for deposit of reserve funds and the types of authorized \ufb01nancial instruments for investment. 4.5.1.7 Rate making. A policy shall be in place based on a generally accepted methodology for rate making that identi\ufb01es the objectives of the rate-making practices regarding cost of service, interclass subsidies, economic development, a\ufb00ordability, and compliance with laws and regulations related to rate making. The policy shall specify the frequency for updating the rate schedule and methodology. 4.5.1.7.1 The policy shall include guidance on the funding of growth-related improvements. An organization will fully disclose any non-cost-of-service rate-setting practice implemented to its customers and regulators, identifying each of the non-cost-based practices, the expected bene\ufb01ts of the practices, and the effect on the customers. 4.5.1.7.2 The rate-making methodology included in the policy shall incorporate integrated asset planning and analysis outputs to ensure that growth and capacity demands for new\/upgraded facilities are timely addressed. Suggested resources available include AWWA M1, Principles of Water Rates, Fees, and Charges; ANSI\/AWWA G420, Communication and Customer Relations; and AWWA M36, Water Audits and Loss Control Programs for consideration of nonrevenue water and potential implications on forecasting. <\/td>\n<\/tr>\n | ||||||
| 29<\/td>\n | 4.5.2 Functions and practices. To meet this standard, an organization must demonstrate that it has in place functions and practices for \ufb01nance\/\ufb01scal management as follows: 4.5.2.1 Financial planning. The organization shall regularly prepare a multiyear planning document that outlines the future revenue and expenses anticipated and provides a picture of the projected \ufb01nancial health of the organization. The \ufb01nancial plan shall identify any challenges that the organization may encounter in the future. 4.5.2.2 Financial budgeting. The organization shall annually prepare a budget document that provides a basic understanding of the planned spending for the coming year and shall provide regular reports comparing actual revenue and expenditures to budget. 4.5.2.3 Financial accounting. The organization shall use GAAP as promulgated by an official accounting standards board. Financial statements shall accurately re\ufb02ect underlying transactions and events in a manner that presents the \ufb01nancial position, results of operations, and cash \ufb02ows within a range of acceptable limits and shall be supported by informative disclosures and relevant assertions. The organization shall account for and maintain its funds in separate accounts. Such funds shall not be diverted to 4.5.2.4 Financial reporting. The organization shall prepare and distribute standard \ufb01nancial reports that accurately describe its \ufb01nancial condition on at least a quarterly basis. The \ufb01nancial reports shall also include updates on key performance indicators to mark progress made on attaining the \ufb01nancial objectives contained in the strategic plan. 4.5.2.5 Debt management. Written procedures shall be in place to determine the timing and size of a debt issue. These procedures shall identify the selection process for \ufb01nancial advisors, underwriters, bond counsel, and disclosure counsel. Additionally, these procedures shall identify the key steps of the debt sale process for inclusion in the \ufb01nancing calendar. 4.5.2.6 Reserves management. Written procedures shall be in place to identify the target levels for reserves to meet requirements for operations, capital improvements, asset replacement, debt service, and rate stabilization. The procedures shall identify the methodology, authority, and timing of deposits to and requisitions from the reserves. The procedures shall also identify the methodology for ensuring that the amounts held in the reserves are accurately re\ufb02ected on the \ufb01nancial statements. <\/td>\n<\/tr>\n | ||||||
| 30<\/td>\n | 4.5.2.7 Rate making. An organization shall conduct a cost-of-service rate study regularly, at least every \ufb01ve years. The study shall include water rates, charges, and fees. When a proposed rate change will occur over multiple years, the method for implementing future rate changes shall be clearly identi\ufb01ed. 4.5.2.8 Review of regulations. An organization shall regularly review regulatory requirements to identify changes needed to its \ufb01nance and \ufb01scal management practices. 4.5.3 Organizational capacity and technology. To meet this standard, an organization must demonstrate that it has in place the organizational capacity and technology for \ufb01nance\/\ufb01scal management as follows: 4.5.3.1 Enabling technology. An organization shall have access to enabling technologies commensurate with the level of complexity and needs of the organization. 4.5.3.2 Organizational capability. An organization shall have administrative and management capabilities to perform each of these \ufb01nance and \ufb01scal management responsibilities, including the employment of qualified professional staff\/contractor support and the regular training of such staff to maintain knowledge and capabilities needed for compliance with changing standards and goals. 4.5.4 Integration of functions and practices. To meet this standard, an organization must demonstrate integration of its functions and practices for \ufb01nance\/\ufb01scal management into the organization as follows: 4.5.4.1 Financial planning. An organization shall have a methodology in place to integrate \ufb01nancial planning with capital improvement planning and operational planning. The organization shall update the financial plan annually, and the updated plan shall be communicated in a timely and understandable manner to the key stakeholders of the plan. An independent outside expert shall review the financial plan on a regular basis for completeness and reasonableness. An organization shall reconcile the adequacy of 4.5.4.2 Financial budgeting. An organization shall, at a minimum, on an annual basis monitor and compare in detail the \ufb01nancial results against the budget to identify any needed intervening management actions. <\/td>\n<\/tr>\n | ||||||
| 31<\/td>\n | 4.5.4.3 Financial accounting. An organization shall ensure that adequate training is in place to ensure the recording of \ufb01nancial transactions that are timely, accurate, complete, and consistent. On at least a quarterly basis, the organization shall reconcile the \ufb01nancial accounting records with the customer records and the utility asset records with the reconciliation complete before the reconciliation for the next quarter. The organization shall maintain asset records that detail sufficient information to 4.5.4.4 Financial reporting. An organization shall distribute the standard \ufb01nancial reports on a timely basis to stakeholders with management comments discussing and analyzing the results. The reporting shall compare current-period results with previous-period results as well as budgeted results. Unusual or one-time revenues and expenses shall be clearly identi\ufb01ed and explained. 4.5.4.4.1 The organization shall provide information to external constituents about the organization\u2019s sustained capability to generate revenue levels necessary to protect the \ufb01nancial investment of others in the utility. Such information could include historical expenditures for renewal and replacement, as well as the revenues generated under planned and adopted rates to support renewal and replacement during subsequent years. 4.5.4.4.2 Financial reports shall present on a unified and consistent basis the results of operational and capital activities if the organization is subject to controls or monitoring on a budgetary, cash, or modified cash basis. 4.5.4.4.3 The organization shall prepare and publish regular and timely reports on such bases. Additionally, the organization shall prepare and publish annual financial statements on an accrual basis, as well as a reconciliation between accrual-based financial statements and financial statements that were prepared and published. 4.5.4.5 Debt management. The organization shall update and disclose key \ufb01nancial projections included in bond documents annually. The organization shall prepare an arbitrage rebate analysis, if applicable, to identify excess arbitrage earnings on the investment of tax-exempt bond proceeds. 4.5.4.6 Reserves management. Reserve accounts for debt service, rate stabilization, and other established purposes shall be maintained at the required levels. <\/td>\n<\/tr>\n | ||||||
| 32<\/td>\n | 4.5.4.7 Rate making. The water rate schedule shall be written in clear and understandable terminology to ensure that customers can replicate the computations made in the preparation of their bills. The water rate schedule shall be readily available to constituents. 4.5.4.8 Compliance reviews. An independent external reviewer shall conduct regular reviews to ensure compliance with each of these areas of \ufb01nance and \ufb01scal management. The independent reviewer shall report any occasions of material noncompliance to the governing body immediately. Sec. 4.6 Governance 4.6.1 Policies and performance standards. To meet this standard, an organization must demonstrate that it has in place policies and performance standards for governance as follows: 4.6.1.1 Availability of enabling legislation and related documents. Current copies of enabling legislation, articles of incorporation or charter, and bylaws shall be readily available. 4.6.1.2 Operating policies related to corporate governance. A corporate policy shall be in place that clearly describes the board of directors\u2019 policies and procedures for selecting o\ufb03cers, conducting meetings, establishing budgets, dealing with con\ufb02icts of interest, attendance and compensation, travel and education, and the general expectations of the board. 4.6.1.3 Policies related to disclosure and compliance. A corporate policy shall be in place that describes the board of directors\u2019 expectation for management to provide transparency of conditions and operations, including management\u2019s responsibility to provide reasonable assurance regarding the achievement of e\ufb00ective and e\ufb03cient operations, reliability of reporting, and compliance with applicable laws and regulations. 4.6.1.4 Policies related to planning. A planning mechanism shall be in place that identi\ufb01es the key constituent objectives of the organization and describes how the organization will pursue, measure, and report those objectives. 4.6.1.5 Polices related to assets. A corporate policy shall be in place that links utility-wide strategy and objectives to asset management strategy, objectives, and plans. (Refer to Sec. 4.14 for additional information on asset management.) 4.6.1.6 Policies related to data. A corporate policy shall be in place for the collection, processing, use, and quality of all data. This policy shall reference standards for the required accuracy and completeness of all data. <\/td>\n<\/tr>\n | ||||||
| 33<\/td>\n | 4.6.2 Functions and practices. To meet this standard, an organization must demonstrate that it has in place functions and practices for governance as follows: 4.6.2.1 Procedures for ensuring compliance with codes of conduct. Written procedures shall be in place to describe the control environment for how the organization\u2019s management will ensure integrity, ethical values, and competence of the organization\u2019s employees. The procedures shall describe how management assigns authority and responsibility and organizes and develops the employees. 4.6.2.2 Procedures for ensuring internal consistency. Written procedures shall be in place to establish objectives linked at di\ufb00erent levels and internally consistent. The procedures shall describe how relevant risks will be identi\ufb01ed, assessed, and managed. 4.6.2.3 Procedures for ensuring risks are properly controlled. Written procedures shall be in place to ensure that personnel carry out management directives and that management takes necessary actions to address risks to achievement of the organization\u2019s objectives. These procedures shall describe approvals, authorizations, veri\ufb01cations, reconciliations, reviews of operating performance, security of assets, and segregation of duties. These procedures shall also describe the consequences for violating laws a 4.6.2.4 Procedures for capturing and disseminating information. Written procedures shall be in place to ensure that pertinent information is identi\ufb01ed, captured, and communicated in a form and time frame that enables employees to carry out their responsibilities. Systems shall be in place to produce operational, \ufb01nancial, and compliance-related information to make informed decisions and meet external reporting requirements. 4.6.2.5 Procedures for monitoring performance. Written procedures shall be in place to ensure monitoring of the organization\u2019s performance. The scope and frequency of these evaluations will depend primarily on the assessment of risks and the e\ufb00ectiveness of ongoing management and supervisory activities. The procedures shall describe how to report signi\ufb01cant variances in the execution of the procedures to management. 4.6.2.6 Procedures for incorporating board directives in plans and budgets. Written procedures shall be in place to describe the process used by the organization to incorporate the directives of the board into the annual business plan and budget. <\/td>\n<\/tr>\n | ||||||
| 34<\/td>\n | 4.6.2.7 Procedures for managing policies affecting employees and customers. Written procedures shall be in place to describe the process used by the organization to develop, implement, monitor, and amend policies established by the board that a\ufb00ect the employees and customers of the utility. 4.6.3 Organizational capacity and technology. To meet this standard, an organization must demonstrate that it has in place the organizational capacity and technology for governance as follows: 4.6.3.1 Realistic long-range plans. An organization shall have long-range plans based on reasonable forecasts that describe the strategies and facilities necessary to meet long-term objectives. 4.6.3.2 Alignment of plans and the allocation of \ufb01nancial resources. An organization shall have long-range plans to create and align the \ufb01nancial resources necessary to adequately fund the construction, operation, and maintenance of facilities. 4.6.3.3 Enduring management practices. An organization shall have institutionalized management practices that are recognized by political leaders and able to withstand personnel change. 4.6.3.4 Staff capacity. An organization shall have trained staff, with appropriate supporting resources, to support its governance functions, such as audit and board support. 4.6.3.5 Technology. An organization shall have access to enabling technologies commensurate with the level of complexity of the organization. 4.6.4 Integration of functions and practices. To meet this standard, an organization must demonstrate integration of its functions and practices for governance into the organization as follows: 4.6.4.1 Integration of the performance management with organizational goals. An organization shall have management and employee performance goals linked to the organization\u2019s objectives. 4.6.4.2 Integration with strategic and operational plans. An organization shall have in place processes that integrate its governance policies and processes with its strategic and operational plans. Sec. 4.7 Health and Safety 4.7.1 Policies and performance standards. To meet this standard, an organization must demonstrate that it has in place policies and performance standards for managing employee health and safety as follows: <\/td>\n<\/tr>\n | ||||||
| 35<\/td>\n | 4.7.1.1 Program policies. Policies related to management and mitigation of health and safety risk exposures, including but not limited to con\ufb01ned-space entry, lockout\/tagout (energy control), trenching and shoring, fall protection, bloodborne pathogens, \ufb02agging and tra\ufb03c control, equipment operation, hearing protection, use of personal protective equipment, ergonomics, and chemical usage. The organization shall update these policies periodically (approximately every two years) to ensure consistency with org 4.7.1.2 Performance standards. Performance standards (metrics) that enable the organization to measure the e\ufb00ectiveness of its health and safety policies and programs and that provide data and information that bring to light improvement opportunities. 4.7.2 Functions and practices. To meet this standard, an organization must demonstrate that it has in place functions and practices for managing employee health and safety as follows: 4.7.2.1 Executive and worker involvement. An organization\u2019s top-level executives shall develop the employee health and safety strategy, with extensive ongoing involvement of frontline workers. In addition to creating and sustaining a \u201csafety culture,\u201d an organization\u2019s executives are responsible for developing, modifying, and evaluating the e\ufb00ectiveness of the organization\u2019s employee health and safety strategy. However, frontline workers have the primary responsibility of executing a health and safety progr 4.7.2.2 Responsibility for implementation. An organization shall have individuals and\/or work units whose responsibility it is to implement and monitor employee health and safety activities and programs, including risk assessment, return-to-work management, compliance reporting, training, and performance management. Although an organization may choose to outsource some of these activities, it shall have sufficient internal expertise to effectively oversee the quality and cost of externally provided (contrac 4.7.2.3 Safety committees and training. An organization\u2019s implementation strategy for its safety program shall include regular training and \ufb01eld exercises. An organization shall also use formal structures such as safety committees to ensure a high level of worker involvement in the implementation, oversight, and improvement of its safety program. <\/td>\n<\/tr>\n | ||||||
| 36<\/td>\n | 4.7.2.4 Accident investigation and corrective action. An organization shall have in place a structured process for investigating and evaluating the cause of workplace injuries and for identifying corrective actions (e.g., additional and\/or improved training, engineering controls, and changes to equipment). The organization shall evaluate the effect of corrective actions once implemented to ensure their e\ufb00ectiveness. 4.7.2.5 Safety program planning. In parallel with its strategic business planning process, an organization shall develop an employee health and safety program that addresses risk exposures resulting from the way that the organization maintains, operates, and enhances its infrastructure (i.e., capital improvements, major rehabilitation). An employee health and safety program shall re\ufb02ect changing demographics of the workforce (e.g., the potential that an aging workforce might experience higher injury rates) 4.7.3 Organizational capacity and technology. To meet this standard, an organization must demonstrate that it has in place the organizational capacity and technology for managing employee health and safety as follows: 4.7.3.1 Staff capacity. An organization shall hire, develop, and retain staff that can effectively carry out its employee health and safety programs, activities, and strategies (including the management and oversight of legally required activities and processes), even if it chooses to outsource many or all of its major functions. 4.7.3.2 Technology. An organization shall develop and implement technologies that allow it to e\ufb00ectively implement, monitor, and sustain its employee health and safety programs, activities, and strategies. 4.7.4 Integration of functions and practices. To meet this standard, an organization must demonstrate integration of its functions and practices for managing employee health and safety into the organization as follows: 4.7.4.1 Training and integration with performance management. An organization\u2019s staff shall be fully trained on every element of the organization\u2019s employee health and safety programs, policies, procedures, systems, and strategies relevant to their work. Training and retraining shall occur regularly; roles and responsibilities for the execution of employee health and safety program processes shall be made clear; and the strategic importance of employee health and safety shall be constantly reinforced to and <\/td>\n<\/tr>\n | ||||||
| 37<\/td>\n | 4.7.4.2 Integration with strategic and operational plans. An organization\u2019s strategic and operational plans shall clearly re\ufb02ect that employee health and public safety come \ufb01rst and shall clearly identify the policies, programs, and actions that the organization will take to create a healthy and safe workplace. Sec. 4.8 Human Resources 4.8.1 Policies and performance standards. To meet this standard, an organization must demonstrate that it has in place policies and performance standards for managing human resources (HR) as follows: 4.8.1.1 Policies related to basic HR processes. Policies related to classi\ufb01cation and compensation; hiring and selection; provision of training; performance management (e.g., performance reviews, corrective action and discipline); conduct of investigations and fact \ufb01ndings; bene\ufb01ts provision (e.g., health care, vacation, and sick leave); compliance with federal and state law; and records management shall be clearly documented. The organization shall update these policies at least annually to ensure consiste 4.8.1.2 Performance measurement. Performance standards (metrics) shall be established for key HR functions and activities, including but not limited to hiring and selection (speed, quality); corrective action and discipline; provision of training (especially training that is mandatory and\/or an organizational priority); conduct of performance reviews; payroll accounting (accuracy); attrition trends (retirements); and compensation (competitiveness). 4.8.2 Functions and practices. To meet this standard, an organization must demonstrate that it has in place functions and practices for managing HR as follows: 4.8.2.1 Executive responsibility for HR. An organization\u2019s top-level executives shall develop its HR strategy. The organization\u2019s executives are responsible for developing, modifying, and evaluating the e\ufb00ectiveness of the organization\u2019s HR strategy, including classi\ufb01cation and compensation, workforce development and training, and HR processes and systems, and for ensuring that the organization\u2019s HR strategy is in alignment with its strategic business plan. <\/td>\n<\/tr>\n | ||||||
| 38<\/td>\n | 4.8.2.2 Responsibility for program execution. An organization shall have individuals and\/or work units whose responsibility it is to implement and monitor HR management activities and programs, including recruitment, hiring, and selection; payroll and bene\ufb01ts administration; training; performance management; records management; return-to-work administration; and ADA\/EEO (Americans with Disabilities Act\/Equal Employment Opportunity) compliance. Although an organization may choose to outsource some of these a 4.8.2.3 HR strategic planning. In parallel with its strategic business planning process, an organization shall develop a strategic HR plan that connects classi\ufb01cation, compensation, training, hiring and selection, recruitment, leadership development, succession planning, and other critical HR processes to the business goals of the organization. A strategic HR plan shall consider demographic trends, local labor market conditions, and changes in technology that present opportunities and challenges for trainin 4.8.3 Organizational capacity and technology. To meet this standard, an organization must demonstrate that it has in place the organizational capacity and technology for managing HR as follows: 4.8.3.1 Sta\ufb00 capacity. An organization shall hire, develop, and retain staff that can effectively carry out its HR activities and strategies (including the management and oversight of legally required activities and processes), even if it chooses to outsource many or all of its major functions. Consideration should be given to succession planning and establishing training programs that will empower and enable staff to progress within the organization. Additionally, organizations should consider programs tha 4.8.3.2 Technology. An organization shall develop and implement computer, software, and database technologies that allow it to effectively implement, monitor, and sustain its HR activities and strategies. 4.8.4 Integration of functions and practices. To meet this standard, an organization must demonstrate integration of its functions and practices for managing HR into the organization as follows: <\/td>\n<\/tr>\n | ||||||
| 39<\/td>\n | 4.8.4.1 Training. An organization\u2019s staff shall be fully trained on every element of the organization\u2019s HR processes, systems, and strategies that are relevant to their work. Training and retraining shall be conducted regularly, roles and responsibilities for the execution of HR processes shall be made clear, and the strategic importance of workforce development shall be constantly reinforced to an organization\u2019s leadership. Performance agreements for supervisors and managers shall re\ufb02ect requirements to re 4.8.4.2 Integration with strategic and operational plans. An organization\u2019s strategic and operational plans shall clearly re\ufb02ect related HR management requirements. Sec. 4.9 Information Management 4.9.1 Policies and performance standards. To meet this standard, an organization must demonstrate that it has in place policies and performance standards for information management as follows: 4.9.1.1 Policies related to information quality. An organization shall have policies and procedures in place for meeting information quality requirements, including roles and responsibilities for data reliability, security, accuracy, and completeness. Information managed by the organization shall be relevant and pertinent to the organization and delivered in a timely, correct, consistent, and usable manner. The organization shall provide this information through the most productive and economical use of res 4.9.1.2 Policies related to information security. An organization shall have policies and procedures in place to meet information security requirements. The organization shall use physical or electronic means to protect sensitive information managed by the organization from unauthorized disclosure. The information managed by the organization shall be accurate and complete to meet business expectations. Information shall be available when required by the organization. Information resources and capabilities s 4.9.1.3 Policies related to information \ufb01duciary requirements. An organization shall have policies and procedures in place to meet information \ufb01duciary requirements. Information shall be managed to ensure compliance with laws, regulations, and contractual arrangements. Information shall be provided to ensure that management can operate the organization and exercise its \ufb01nancial and compliance reporting responsibilities. <\/td>\n<\/tr>\n | ||||||
| 40<\/td>\n | 4.9.1.4 Policies for outsourcing information systems, technologies, and services. An organization shall have in place a policy or strategy for balancing the use of in-house IT sta\ufb00 and outside\/contracted consultants to implement and manage its information systems and technologies to support the achievement of organizational goals. Generally speaking, building in-house IT capability is more appropriate for activities performed continually and that require commonly performed IT tasks (e.g., IT infrastructure 4.9.2 Functions and practices. To meet this standard, an organization must demonstrate that it has in place functions and practices for information management as follows: 4.9.2.1 IT application management functions and services. An organization shall have service support processes in place to provide day-to-day support and maintenance activities involved in the provision of IT services. The service support processes shall provide a point of contact for restoration of agreed service levels and shall plan and supervise changes to applications systems. 4.9.2.2 IT service delivery processes. An organization shall have service delivery processes in place to plan and deliver quality IT services. The service delivery processes shall de\ufb01ne clear interfaces and requirements of services with customers and suppliers and ensure the adequate availability of systems. 4.9.2.3 IT security management processes. An organization shall have security management processes in place to plan and manage a de\ufb01ned level of security for information and IT services. The security management processes shall include assessment and management of risks, implementation of appropriate risk mitigation controls, and periodic testing of security controls. 4.9.2.4 IT infrastructure management functions and services. An organization shall have processes in place to manage information and communications technology infrastructure. 4.9.2.5 IT application development functions and services. An organization shall have processes for managing applications from the initial business need through each stage in the application life cycle. <\/td>\n<\/tr>\n | ||||||
| 41<\/td>\n | 4.9.2.6 Accountability for program execution. An organization shall establish clear accountability for its IT function with a single individual\u2014either an IT supervisor\/manager or, in the case of smaller systems, the general manager or another management-level employee with adequate IT experience. For organizations of all sizes\/complexity, the person who is accountable shall be able to effectively balance internal and outsourced services and e\ufb00ectively manage contract resources. 4.9.2.7 Processes and systems for ensuring performance of implemented applications, systems, and technologies. An organization shall have in place methods, systems, and processes for ensuring that software and hardware IT solutions are being securely, safely, and cost-e\ufb00ectively maintained and meet or exceed requirements for support of business processes and information management. The organization\u2019s executives shall review IT solution performance at least twice annually (minimum), with formal assessments e 4.9.2.8 Methods and processes for evaluating alternatives. An organization shall have in place consistent, agreed-on methods and processes for evaluating IT solution alternatives. Such methods shall involve business\/operations managers and key staff in selecting core business management applications and analytics\/reporting applications, ensuring that the selected applications meet the needs of the organization. 4.9.2.9 Incorporation of best practices. An organization shall have in place processes for ensuring that its IT function is consistent with IT best practices, including planning, design\/selection, development\/implementation, end-user training, disaster recovery, and cybersecurity. 4.9.2.10 Stakeholder involvement in the review and selection of alternatives. An organization shall have in place a process for evaluating project proposals\/alternatives (including the selection of consultants and software applications) that includes quali\ufb01ed key stakeholders, including engineering, maintenance, operations, \ufb01nance, legal advisors, and risk management. 4.9.3 Organizational capacity and technology. To meet this standard, an organization must demonstrate that it has in place the organizational capacity and technology for information management as follows: 4.9.3.1 IT planning. An organization shall have a master\/strategic IT plan in place that de\ufb01nes information management needs, targeted service levels, technology direction, and a set of programmed projects for achieving the desired objectives. The plan shall be updated as required to meet business strategic and tactical needs (for larger organizations, this can require an update every 3\u20135 years; for a smaller organization, an update may be required every 6\u201312 years). The plan shall also de\ufb01ne the organizati <\/td>\n<\/tr>\n | ||||||
| 42<\/td>\n | 4.9.3.2 Competencies and staff\/resource capacity to e\ufb00ectively manage day-to-day IT operations. An organization shall have the competencies and capacity (via internal and\/or contracted resources) to de\ufb01ne and manage service levels, manage third-party services, manage performance and capacity, ensure continuous service, ensure system security, identify and allocate costs, educate and train end-users, manage the con\ufb01guration, manage problems and incidents, manage data, and\/or manage IT facilities and operatio 4.9.3.3 Competencies and capacity to monitor and correct internal controls. An organization shall have the competencies and capacity (via internal and\/or contracted resources) to monitor and assess the adequacy of internal control of its information management applications, systems, and technologies. 4.9.4 Integration of functions and practices. To meet this standard, an organization must demonstrate integration of its functions and practices for information management into the organization as follows: 4.9.4.1 Integration of information systems with organization business processes. An organization shall ensure the recording of information in a manner that allows users to access it in a manner that enables efficient and effective execution of the organization\u2019s business processes and the achievement of its business goals. 4.9.4.2 Integration with strategic and operational plans. An organization\u2019s strategic and operational plans shall clearly re\ufb02ect related IT requirements. Sec. 4.10 Organizational Development 4.10.1 Policies and performance standards. To meet this standard, an organization must demonstrate that it has in place policies and performance standards as follows: 4.10.1.1 Incorporation of policies in strategic and business plans. Policies and performance standards regarding organizational development shall be embodied in an organization\u2019s strategic plan and in business and tactical plans throughout the organization. 4.10.1.2 Ethics policies. Speci\ufb01c policies shall be in place to ensure ethical business practices and to reinforce organizational values related to ensuring transparency of business transactions, con\ufb02icts of interest, and con\ufb01dentiality of employee and customer information. Policies shall be oriented to building and maintaining employee and public trust and con\ufb01dence. <\/td>\n<\/tr>\n | ||||||
| 43<\/td>\n | 4.10.1.3 Performance measurement. Performance standards shall be in place to establish quantitative targets for meeting stated goals and objectives related to organizational development. For example, leadership development goals and objectives may foster the development and promotion of employees from within the organization. Performance measurements such as the percentage of positions \ufb01lled by employees promoted from within the organization may be appropriate indicators. The targets for such measures shall 4.10.1.4 Policies supporting organizational learning. An organization shall have in place programs for organizational learning and development that support strategic goals and objectives with targeted leadership development, knowledge management, coaching\/mentoring, and succession planning. Workforce planning will be carried out to de\ufb01ne the tactical programs that enable the utility to carry out its mission and achieve its vision. 4.10.2 Functions and practices. To meet this standard, an organization must demonstrate that it has in place functions and practices for organizational development as follows: 4.10.2.1 Roles and responsibilities for organizational development. To sustain a utility\u2019s capability for the long term, organizational development must be a primary responsibility of the general management led by the executive level. Although di\ufb00ering organizational mechanisms or structures may be appropriate for a given utility, a senior executive or executive team shall be accountable for the integration and application of organizational development as previously described in the performance standards. I 4.10.2.2 Program elements. Individual teams, business units, or managers responsible for organizational development shall address appropriate functions and practices for the following components: \u00b7 leadership development, \u00b7 succession planning and management, \u00b7 workforce planning and development, \u00b7 employee involvement and teamwork, \u00b7 organizational cross-functional problem solving, <\/td>\n<\/tr>\n | ||||||
| 44<\/td>\n | \u00b7 management and supervisory relationships, \u00b7 employee career development, \u00b7 organizational communications, \u00b7 knowledge retention and management, \u00b7 recognition and reward strategy, \u00b7 recruiting and retention strategy, \u00b7 cultural and generational diversity awareness, and \u00b7 change leadership and management. Many of these functions and practices will be carried out by a utility\u2019s appropriate business units such as HR, training, general\/administrative management, \ufb01nance, operations and maintenance, continuous quality improvement, and strategic planning. 4.10.2.3 Periodic program reviews. A utility shall review or audit its organizational development on a regular basis (at least annually) to ensure accomplishment of both operational\/tactical and strategic goals and objectives. Review of policies that affect labor and public relations shall include use of independent\/external resources as appropriate. 4.10.3 Organizational capacity and technology. To meet this standard, an organization must demonstrate that it has in place the organizational capacity and technology for organizational development as follows: 4.10.3.1 Sta\ufb00 capacity. A utility shall hire, develop, and retain sta\ufb00 that can e\ufb00ectively carry out its organizational development at each level in the organization. 4.10.3.2 Organizational structure. A utility shall periodically evaluate its business processes and organizational structure to ensure that it is e\ufb00ectively carrying out its organizational development strategy and functions. 4.10.3.3 Technology. An organization shall develop and implement technologies that allow it to e\ufb00ectively implement and evaluate its organizational development strategy and functions, including HR information systems, knowledge management tools, skills\/talents evaluation tools, Web-based interaction tools, computer-based training tools, and analytics\/research tools. 4.10.4 Integration of functions and practices. To meet this standard, an organization must demonstrate integration of its functions and practices for organizational development into the organization as follows: <\/td>\n<\/tr>\n | ||||||
| 45<\/td>\n | 4.10.4.1 Training. A utility\u2019s staff members shall be fully trained on every element of organizational development that is relevant to their work. Training shall occur on a regular basis with practical on-the-job exercises where possible. 4.10.4.2 Integration with strategic and operational plans. A utility\u2019s strategic plan and operational plans shall clearly incorporate organizational development strategies and tactics. The \u201cbusiness process category\u201d for organizational development is very related and may overlap with other business process categories such as HR, strategic planning, and continuous improvement, depending on the de\ufb01nition or focus of these related business processes. Therefore, a utility\u2019s organizational development business p Sec. 4.11 Plant and Property Management 4.11.1 Policies and performance standards. To meet this standard, an organization must demonstrate that it has in place policies and performance standards for managing utility plant and real property as follows: 4.11.1.1 Statement of commitment to managing property and assets. A corporate policy shall be in place that clearly describes the governing body\u2019s expectation that its sta\ufb00 will manage the physical plant and real property assets of the utility, including maintenance of inventory and accounting for the value of the assets. 4.11.1.2 Policies for managing property and assets. Detailed policies and procedures shall be in place for managing real property, including mapping; maintenance of deeds and legal documents related to easements, rights-of-way, and other rights; acquisition of property and property rights for watershed protection and siting of facilities such as tanks, pump stations, etc.; and disposal of excess property. 4.11.1.3 Policies for records management. Detailed policies and procedures shall be in place for managing and maintaining the utility plant using engineering drawings, system-wide and detailed maps, maintenance records, accounting ledgers, engineering reports, and electronic \ufb01les and proprietary software. 4.11.2 Functions and practices. To meet this standard, an organization must demonstrate that it has in place functions and practices for managing utility plant and property as follows: <\/td>\n<\/tr>\n | ||||||
| 46<\/td>\n | 4.11.2.1 Accounting for property and assets. An organization will book an organization\u2019s capital expenditures for utility plant, real estate, and property rights to the general ledger per a standard chart of accounts at original cost. These assets shall be depreciated in accordance with GAAP. 4.11.2.2 Forecasting capital and maintenance needs. An organization shall have a system in place to forecast the maintenance, renewal, and replacement funding requirements for the next 5\u201310 years and have a funding strategy to meet the \ufb01nancial needs. 4.11.2.3 Management of records, deeds, drawings, and other documents. An organization shall have in place functions and practices for actively managing and maintaining real property, including compiling, recording, and storing deeds and legal documents related to real estate and property rights; surveying and mapping; forest management; maintenance of borders; lawn maintenance where appropriate; and fencing and security (including patrolling and enforcement), as needed. 4.11.2.4 Maintenance practices. An organization\u2019s facilities, structures, and equipment shall be maintained in good working order according to generally accepted practices and principles (e.g., manufacturer recommendations). The organization shall keep detailed descriptions of facilities and equipment. Facilities and structures maintenance shall include regular inspections of equipment such as roofs, doors, windows, sills, gutters, foundations, grouting, hatches, locks, and bolts. Where maintenance is neede 4.11.2.5 Facility and asset redundancy. For an organization\u2019s facilities that cannot be taken out of service for routine maintenance, such as a storage tank, plans shall be made and implemented to construct additional facilities to allow for such maintenance. 4.11.2.6 Working with local taxing authorities. Where applicable, an organization shall actively work with local government and tax assessors to manage real estate and personal property taxes to ensure that the organization receives fair treatment. 4.11.3 Organizational capacity and technology. To meet this standard, an organization must demonstrate that it has in place the organizational capacity and technology for managing utility plant and real property as follows: <\/td>\n<\/tr>\n | ||||||
| 47<\/td>\n | 4.11.3.1 Staffing capacity. An organization shall hire, develop, certify, and retain staff who can e\ufb00ectively carry out its utility plant and real property management program. 4.11.3.2 Organizational structure. An organization shall continually evaluate its organizational structure to ensure that it is structured to e\ufb00ectively carry out its utility plant and real property management program. 4.11.3.3 Technology. An organization shall develop and implement technologies that allow it to e\ufb00ectively implement and evaluate its utility plant and real property management program, including GIS, models and tools (including tools for GIS-enabled hydraulic modeling and predictive modeling), equipment and facility maintenance software (including GIS-enabled applications), smart monitoring and alerting devices (including smart manhole covers, smart equipment monitors, pipe condition monitors), and CAD syst 4.11.4 Integration of functions and practices. To meet this standard, an organization must demonstrate that its functions and practices for managing utility plant and real property are integrated into the organization as follows: 4.11.4.1 Training. An organization\u2019s staff members shall be fully trained on every element of the organization\u2019s utility plant and real property management program that is relevant to their work. Training shall occur on a regular basis, and scenario-based training (\u201cexercises\u201d) shall be used as often as possible. 4.11.4.2 Integration with strategic and operational plans. An organization\u2019s strategic plan(s) and operational plans shall clearly incorporate utility plant and real property management components. Sec. 4.12 Procurement 4.12.1 Policies and performance standards. To meet this standard, an organization must demonstrate that it has in place policies and performance standards for procurement as follows: 4.12.1.1 Identi\ufb01cation of applicable laws and regulations. An organization shall identify applicable state and municipal laws and regulations regarding procurement practices. 4.12.1.2 Policies ensuring integration with organizational goals. Policies and procedures to ensure that procurement practices achieve organizational objectives within the applicable federal, state, and local laws and regulations shall be identi\ufb01ed. 4.12.1.3 Policies related to delegation of authority. The authority to execute purchases, including delegation of that authority to others in the organization, shall be formally identi\ufb01ed and documented, as shall the action of delegating such authority. The authority levels delegated to certain positions or individuals shall be explicitly identified and shall be reviewed and adjusted periodically. <\/td>\n<\/tr>\n | ||||||
| 48<\/td>\n | 4.12.1.4 Policy objectives related to procurement. The objectives of the organization\u2019s procurement practices shall be clearly identi\ufb01ed in measurable terms, including ethical principles governing employee conduct. 4.12.2 Functions and practices. To meet this standard, an organization must demonstrate that it has in place functions and practices for procurement as follows: 4.12.2.1 Authorized methods for procurement. An organization shall identify the authorized methods for procurement, including procedures and agreements for cooperative procurements with other organizations. 4.12.2.2 Requirements for notice to suppliers. Requirements for notice to the marketplace for the opportunity to compete for materials and services shall be clearly identi\ufb01ed. 4.12.2.3 Criteria for evaluation and award. Criteria for evaluation and award of competitive and noncompetitive procurement contracts shall be established. 4.12.2.4 Establishment of authorization thresholds. Procurement authorization levels consistent with operational needs and sta\ufb00 responsibility shall be established. 4.12.2.5 Establishment of guidelines for waivers. An organization shall determine in advance which exceptions, informalities, and irregularities on procurement transactions may be waived and which may not be waived. 4.12.2.6 Establishment of guidelines for emergencies. Procedures to allow for timely acquisition of materials and services to respond to emergencies shall be clearly identi\ufb01ed and communicated. 4.12.2.7 Compliance. An organization shall be able to demonstrate compliance with the system of procurement-related internal controls. 4.12.2.8 Communication with suppliers and contractors. Communication linkages with suppliers and contractors shall be established to ensure timely and accurate communication during the bidding process, when placing orders, and with contract agreements. 4.12.2.9 Communication within the organization. The organization shall establish communication linkages with organization planning staff to ensure that materials and services will be available to meet planned activities. Communication linkages with organization cash management and accounts payable staff shall be established to ensure that adequate \ufb01nancial resources are available to pay invoices on a timely basis. <\/td>\n<\/tr>\n | ||||||
| 49<\/td>\n | 4.12.2.10 Procedures for contract renewals. Procedures for contract renewals, including updates to prices, shall be established. 4.12.3 Organizational capacity and technology. To meet this standard, an organization must demonstrate that it has in place the organizational capacity and technology for procurement as follows: 4.12.3.1 Staff capacity. An organization shall hire, develop, and retain staff who can effectively carry out its procurement activities and strategies (including the management and oversight of legally required activities and processes), even if it chooses to outsource many or all of its major functions. 4.12.3.2 Technology. An organization shall develop and implement computer, software, and database technologies that allow it to effectively implement, monitor, and sustain its procurement activities and strategies. 4.12.4 Integration of functions and practices. To meet this standard, an organization must demonstrate that its functions and practices for procurement are integrated into the organization as follows: 4.12.4.1 Requirement development. An organization shall demonstrate that the development and regular update of requirements for services and materials is integrated into the processes for constructing, operating, and maintaining the organization. 4.12.4.2 Order\/release. The methods for ordering materials and services from a supplier or contractor shall be integrated into the procurement process to ensure that delivery and quality meet requirements at the contract price. 4.12.4.3 Storage. The methods for receiving, storing, and maintaining an inventory of materials shall be integrated into the procurement process to ensure an efficient balance of ordering and storing expenses. 4.12.4.4 Inventory issues and returns. The methods for issuing materials from and returning materials to inventory shall be integrated into the procurement process to ensure accurate records for stock on-hand. 4.12.4.5 Payment. The methods for paying for goods and services shall be integrated into the procurement process to ensure that payments are in accordance with contract prices. <\/td>\n<\/tr>\n | ||||||
| 50<\/td>\n | 4.12.4.6 Document control and reporting. The methods for controlling procurement documents and reporting information to management shall be suf\ufb01cient to ensure auditability of the procurement process. Sec. 4.13 Risk Management 4.13.1 Policies and performance standards. To meet this standard, an organization must demonstrate that it has in place policies and performance standards for managing risk as follows: 4.13.1.1 Policies regarding risk tolerance and framework for managing risk. A corporate policy shall be in place that clearly describes the organization\u2019s capacity to bear risks, how risks will be identi\ufb01ed and assessed, the framework by which it will manage those risks (Committee of Sponsoring Organizations or another established framework), and the methods it will use to \ufb01nance the residual risks. 4.13.1.2 Business planning. A business plan shall be in place to identify the signi\ufb01cant objectives for regulatory compliance, water sales, source of supply protection, customer satisfaction, infrastructure reliability, workforce e\ufb00ectiveness, government relations, vendor relations, and \ufb01nancial performance. 4.13.1.3 Policies related to the use of risk assessment. A risk identi\ufb01cation and assessment shall be performed for at least each of the previously noted signi\ufb01cant objectives, describing the event or action that would cause the risk to become manifest based on probability or development time. 4.13.2 Functions and practices. To meet this standard, an organization must demonstrate that it has in place functions and practices for managing risk as follows: 4.13.2.1 Risk identi\ufb01cation policies. An organization shall identify the business risks or threats of potential events or actions that would adversely a\ufb00ect the organization\u2019s ability to achieve its business objectives and execute its strategies successfully. The risk identi\ufb01cation and assessment shall also include management\u2019s estimate of the consequences for each risk. 4.13.2.2 Risk mitigation practices. An organization shall identify the controls or techniques used to mitigate the risks by reducing the variance between intended outcomes and actual results to an acceptable level. 4.13.2.3 Audit of risk-management program. An organization shall audit its risk-management program on a regular basis (at least annually). Independent external resources shall be used to validate risk program elements when risk exposures are high and potential effect on the public is large. <\/td>\n<\/tr>\n | ||||||
| 51<\/td>\n | 4.13.3 Organizational capacity and technology. To meet this standard, an organization must demonstrate that it has in place the organizational capacity and technology for managing risk as follows: 4.13.3.1 Senior management capacity and responsibilities. An organization shall hire, develop, and retain staff that can effectively carry out its risk-management program at each level in the organization. Senior management shall oversee an organization\u2019s risk-management program. The organization\u2019s senior management is responsible for developing, modifying, and evaluating the e\ufb00ectiveness of the organization\u2019s risk-management policies and for making changes to functions and practices as necessary. 4.13.3.2 Staff capacity. In addition to the senior management, an organization shall have individuals and\/or work units whose responsibility it is to perform risk identi\ufb01cation and risk assessment; to develop strategies and tactics for mitigating risk at the strategic and operational levels; and to develop emergency, disaster, security, and business continuity management plans. 4.13.3.3 Organizational structure. An organization shall continually evaluate its organizational structure to ensure that it is structured to effectively carry out its risk-management program. 4.13.3.4 Technology. An organization shall develop and implement technologies that allow it to e\ufb00ectively implement and sustain its risk-management program. 4.13.4 Integration of functions and practices. To meet this standard, an organization must demonstrate that its functions and practices for managing risk are integrated into the organization as follows: 4.13.4.1 Training. An organization\u2019s staff shall be trained on elements of the organization\u2019s risk-management program that are relevant to their work. Scenario-based training (\u201cexercises\u201d) shall be used to develop and demonstrate the effectiveness of employee risk-management skills on a regular basis. 4.13.4.2 Integration with strategic and operational plans. An organization\u2019s strategic and operational plans shall clearly include the related risk identi\ufb01cation and assessments. Sec. 4.14 Asset Management 4.14.1 Policies and performance standards. To meet this standard, an organization must demonstrate that it has in place policies and performance standards for asset management as follows: These standards can be based on the more recent global standards\u2014ISO 55000, ISO 55001, and ISO 55002\u2014which incorporate best practices from previous international standards (e.g., Australia\u2019s Asset Management standard and New Zealand\u2019s International Infrastructure Management Manual), as well as numerous asset management gui <\/td>\n<\/tr>\n | ||||||
| 52<\/td>\n | 4.14.1.1 Asset management policy. To demonstrate its commitment to asset management principles and ensure that these principles guide the organization\u2019s planning, decision-making, and resource-allocation decisions, the organizational leadership shall develop and publish an asset management policy. The asset management policy shall align with the utility strategic plan and the organization\u2019s vision, mission, values, business policies, and stakeholder requirements (including mission, goals, performance target 4.14.1.1.1 Levels of service. The organizational leadership shall establish LOS measures, with annual targets, to measure its performance in meeting the expectations of stakeholders, customers, and communities and to assist it in gauging the effectiveness of its business practices, resource allocation, and spending decisions. 4.14.1.1.2 Management framework. The organizational leadership shall authorize the utility to execute the asset management policy via a formal management framework that integrates people\/roles, policies, strategies, objectives, technologies, and data to achieve objectives and support the fulfillment of the utility\u2019s business strategies and goals. The management framework shall include key roles, decisions, protocols, methods, and technologies required to address all aspects of modern asset management. The m 4.14.1.2 Asset management strategy and objectives. The organization shall have in place an asset management strategy and objectives document that formally states how the organization will execute the policies and business goals established by the leadership team, including: 4.14.1.2.1 Program definition. The complete definition of the organization\u2019s asset management program, which should include (at a minimum) the governance structure; the program team structure and roles; the set of projects and milestones to be developed via the program; resource and budget estimates required to achieve targeted program outcomes; the approach and methods for performing asset management; and the procedures for delivering program outputs into the organization and sustaining asset management as <\/td>\n<\/tr>\n | ||||||
| 53<\/td>\n | 4.14.1.2.2 Program direction. A formally defined, long-term optimized, and sustainable direction for the management of assets to assist in the delivery of the utility strategic plan and apply the asset management policy. 4.14.1.2.3 Program approach. A clear set of methods and accountabilities for monitoring the organization\u2019s asset management performance as it relates to LOS targets, making \u201ccourse corrections\u201d where necessary, reviewing and making decisions on options, managing risks, and implementing performance improvements. 4.14.1.2.4 Communication plan. A well-established communication management plan that will effectively communicate and cohesively integrate all asset management initiatives across all functional silos such as management, engineering, business, operations and maintenance, finance, and IT. 4.14.1.3 Asset management culture. The organization shall have in place a formal asset management program \u201ccharter\u201d signed by organizational leadership that will enable asset management staff to develop and effectively administer an asset management program. 4.14.1.4 Asset management program governance. The organization shall establish a formal asset management program governance structure that includes an asset management steering\/oversight committee chaired by the organization\u2019s chief executive officer (CEO)\/director or a designated enterprise asset manager. The committee should be formally chartered and should meet on a regular basis to monitor the organization\u2019s performance related to its LOS targets, identify and make \u201ccourse corrections\u201d where necessary, 4.14.2 Functions and practices. To meet this standard, an organization must demonstrate that it has in place functions and practices for managing assets as follows: 4.14.2.1 Education of decision-makers. The organization\u2019s leadership shall inform and educate decision-makers (e.g., elected officials) of the essential elements of its asset management program and the benefits of following asset management principles and report performance improvements achieved as a result of the program. <\/td>\n<\/tr>\n | ||||||
| 54<\/td>\n | 4.14.2.2 Business case evaluations (BCEs). For larger capital projects, the organization shall perform rigorous BCEs before selecting among alternative project options. Business cases should include a full life cycle cost analysis (LCCA) of each project option (including risk costs), and, where environmental and\/or social costs of one or more options are expected to be significant, the BCE should evaluate these as well. 4.14.2.3 Risk-based decision-making. The organization shall, where it deems appropriate, make prioritization decisions (including spending decisions) using a \u201crisk and consequence\u201d methodology. Such a methodology allows the organization to prioritize projects, as well as other resource-allocation alternatives, based on the extent to which each project or alternative reduces the likelihood and\/or consequences of negative effects on the organization (such as a major infrastructure failure or a major security 4.14.2.4 Condition assessment. The organization shall use asset condition assessments to assist in prioritizing the allocation of maintenance resources and investments in repair, rehabilitation, and replacement of assets based on the probability of failure. 4.14.2.5 Criticality assessment. The organization shall develop and use asset criticality assessments to assist in prioritizing the allocation of maintenance resources and investments in repair, rehabilitation, and replacement of assets based on their consequence of failure. 4.14.2.6 Maintenance optimization. The organization shall use methods for the efficient planning and scheduling of maintenance resources and use effective methods for ensuring the reliability of assets and achievement of targeted returns on investment in assets, such as reliability-centered maintenance (RCM) methods, that propagate a risk-driven maintenance strategy over schedule-driven maintenance strategy using all maintenance approaches as appropriate (such as preventive, predictive, reliability-centered 4.14.2.7 Data collection policies and practices. The organization shall establish detailed policies and rigorous practices for collecting data necessary to support its asset management program. These policies and practices should encompass, among other things, a data creation and management strategy, asset performance data (e.g., SCADA data), water quality information, customer service-related data, asset condition data, and maintenance cost information (at the work order level). Data should be maintained i <\/td>\n<\/tr>\n | ||||||
| 55<\/td>\n | 4.14.3 Organizational capacity and technology. To meet this standard, an organization must demonstrate that it has in place the organizational capacity and technology for managing assets as follows: 4.14.3.1 Organizational staffing needs assessment. The organization shall conduct a formal staffing needs assessment to establish the asset management expertise and experience requirements, as well as asset management staffing needs, to successfully develop and implement an asset management program. 4.14.3.2 Dedicated asset management staff. The organization shall have a dedicated asset management program staff whose responsibilities are to develop, implement, and support all elements of the organization\u2019s asset management program. This work unit should report directly to the CEO\/director or enterprise asset manager and be staffed with both engineering expertise and financial expertise (to support the preparation of BCEs). This staffing configuration would maximize enterprise asset management program e 4.14.3.3 Asset management training. All staff members in the organization shall have at least a basic understanding of asset management principles and understand how their jobs relate to the implementation of the program. Engineers, operations staff, and other staff members who are actively responsible for implementing the program shall be provided with advanced asset management program elements such as how to perform a BCE, how to use \u201crisk and consequence\u201d methods to prioritize projects, and how to apply 4.14.3.4 CMMS. The organization shall use a CMMS to plan, schedule, and track daily work and to capture asset condition data; track the costs of daily work; and support prioritization of repair, rehabilitation, and replacement of existing assets. The CMMS system shall have a standardized asset hierarchy that will organize all of the organization\u2019s assets for effective cost tracking and reporting. The CMMS shall be integrated with the organization\u2019s GIS, customer information, and financial systems to allow f <\/td>\n<\/tr>\n | ||||||
| 56<\/td>\n | 4.14.3.5 Geographic information system (GIS). The organization shall use a GIS to facilitate efficient locating of assets and support master planning and system modeling efforts and other work that requires a spatial view of assets. Asset management requires having an inventory of assets with the asset description, location, and condition. The geodatabase contained within a GIS can be used as the system of record for assets and as an open platform where the asset data can be analyzed with various tools. The 4.14.3.6 Project-management system. The organization shall use a centralized project-management system that can plan and manage the CIP and track, monitor, and report on the delivery of various ongoing capital improvement projects. 4.14.3.7 Remote monitoring and control. The organization shall use remote monitoring and control systems (SCADA and\/or other sensory systems) to facilitate the efficient operation of plants, pump stations, large valves, and gates; to monitor system flows and asset performance; and to identify failures of assets that require an immediate response. These systems can also provide data that trigger predictive maintenance events. 4.14.4 Integration of functions and practices. To meet this standard, an organization must demonstrate that its functions and practices for managing assets are integrated into the organization as follows: <\/td>\n<\/tr>\n | ||||||
| 57<\/td>\n | 4.14.4.1 Integration with the budget and rate-setting process. The organization\u2019s budget and rates should reflect the resource-allocation prioritization decisions resulting from the organization\u2019s BCE process, maintenance optimization processes, and other asset management processes. 4.14.4.2 CIP. The organization\u2019s multiyear CIP shall be based on master plans, rigorous BCEs, and a thorough application of \u201crisk and consequence\u201d prioritization processes. 4.14.4.3 Incorporation of a change management strategy. Incorporation of a change management strategy within an organization will ensure seamless adoption of asset management program policies and procedures. 4.14.4.4 Integration of technology systems. The organization\u2019s major corporate technology systems (e.g., SCADA, the CMMS, project management, GIS) shall be properly integrated to ensure the consistency of information contained in each system and to support the efficient implement of the organization\u2019s asset management program. A reporting mechanism or dashboard should be configured to allow quick visual interpretation of the integrated data. An analytical platform should be considered. 4.14.4.5 Incorporation of project-management standards. Project-management standards shall be properly adopted and integrated as part of the CIP to ensure efficient and effective delivery of CIP projects. 4.14.4.6 Integration with corporate risk-management program. Organizational risks identified by the organization\u2019s asset management staff and steering committee shall be reflected in the organization\u2019s corporate risk-management profile, and appropriate actions shall be taken to mitigate these risks where necessary. Examples include emerging health and\/or safety risks and supply risks. Identified operational and infrastructural risks should be integrated in enterprise asset management work processes. 4.14.4.7 Hiring, selection, and training strategies. The organization\u2019s hiring, selection, and training strategies shall support continued development of a workforce with knowledge, skills, and abilities to perform the duties and tasks required by the organization\u2019s asset management program. These strategies should also be designed to develop a workforce that embraces an asset management culture. <\/td>\n<\/tr>\n | ||||||
| 58<\/td>\n | SECTION 5:\u2003VERIFICATION Sec. 5.1 Documentation Required The utility shall de\ufb01ne critical activities and create written procedures for each. The utility shall have a training component for personnel (Sec. 5.2.2). The utility shall maintain an adequate record-keeping system so that conformance with this standard can be measured. 5.1.1 General. The documentation shall include: 1. Documented statements of a quality policy and quality objectives. 2. Standard operating procedures. 3. Documented procedures required by this standard. 4. Documents needed by the utility to ensure the e\ufb00ective planning, operation, and control of its processes. 5. Records required by this standard. 5.1.2 Examples of documentation. Documentation shall be su\ufb03cient to support the requirements in Section 4, including but not limited to: 1. Examples of strategic and \ufb01nancial plans. 2. Written policies and procedures related to the 14 business practices covered by this standard. 5.1.3 Control of documents. Documents required for this standard shall be controlled. Records are a special type of document and shall be controlled according to the requirements given in Sec. 5.1.4. A document procedure shall be established to de\ufb01ne the controls needed to: 1. Authorize documents for adequacy before issue. 2. Review and update as necessary and reauthorize documents. 3. Ensure that changes and current revision status of documents are identi\ufb01ed. 4. Ensure that the relevant versions of applicable documents are available at points of use. 5. Ensure that documents remain legible and readily identi\ufb01able. 6. Ensure that documents of external origin that are determined by the organization to be necessary for this standard are identi\ufb01ed and their distribution controlled. <\/td>\n<\/tr>\n | ||||||
| 59<\/td>\n | 7. Prevent the unintended use of obsolete documents and apply suitable identi\ufb01cation to them if they are retained for any purpose. 5.1.4 Control of records. The organization shall establish and maintain records to provide evidence of conformity to requirements and of the effective operation of this standard. Records shall remain legible, readily identi\ufb01able, and retrievable. A documented procedure shall be established to de\ufb01ne the controls needed for identi\ufb01cation, storage, protection, retrieval, retention time, and disposition of records. Sec. 5.2 Human Resources 5.2.1 General. Personnel performing work or functions covered by this standard shall be competent on the basis of appropriate education, training, skills, test requirements, and experience as required by the governing regulatory agency. 5.2.2 Competence, awareness, and training. The utility shall: 1. Determine the necessary competence for personnel performing work related to this standard. 2. Provide training or take other actions to satisfy these needs. 3. Evaluate the e\ufb00ectiveness of the actions taken. 4. Ensure that its personnel are aware of the relevance and importance of their activities. 5. Maintain appropriate records of education, training, skills, and experience. (See Sec. 5.1.3.) SECTION 6:\u2003DELIVERY This standard has no applicable information for this section. <\/td>\n<\/tr>\n | ||||||
| 60<\/td>\n | 1717287816479 ISBN 978-1-64717-172-8 <\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":" AWWA G410-23 Business Practices for Operation and Management<\/b><\/p>\n |