OUR MISSION: To provide our customers with high-quality, efficient and reliable water, power and sewer services in a manner that values environmental and community interests and sustains the resources entrusted to our care.
525 Golden Gate Avenue, 13th Floor
San Francisco, CA 94102
T 415.554.3155
F 415.554.3161
TTY 415.554.3488
Augus
t 15, 2022
TO
: Commissioner Anson Moran, President
Commissioner Newsha Ajami, Vice President
Commissioner Sophie Maxwell
Commissioner Tim Paulson
THRO
UGH: Dennis J. Herrera, General Manager
FR
OM: Ron Flynn, Deputy General Manager
Laura Busch, Budget Director
Charles Perl, Deputy CFO
Tricia Yang, Director, Strategy, Innovation & Change
RE: Ca
pital Budgeting & Planning – Update on Project Deliverability Assessment
Dur
ing the Capital Budget discussions in January 2022, SFPUC staff committed to developing a balanced FY 23-24 Capital Budget and a 10-Year Capital Plan for Commission review and approval in February 2023 informed by several factors including project deliverability. This work would examine capital project budget, planning and deliverability to more closely align the capital planning process with our execution capacity.
Ov
er the past several months, through both interview and data gathering, staff have investigated the complex SFPUC capital planning and delivery processes which touch almost all SFPUC Enterprises and Bureaus. Developing and implementing complex infrastructure planning improvements relies on adequate staffing, funding, project planning and design capacity, as well as effective communication both internally and externally. Project interdependencies across the SFPUC require a dedicated agency-wide program to 1) identify deliverability challenges, 2) adapt our capital plans based on deliverability capacity and, most importantly, 3) develop and implement solutions for building our capacity to match our Capital Improvement Plan (CIP). In short, we need to examine and adjust our agency Capital Budget and 10-Year Capital Plan decision making to reflect changing agency-wide resources and project execution capacity.
In o
rder for this effort to be effective and sustainable, it will take time to implement improvements and embed accelerated deliverability into our capital planning process, focusing first on balancing our FY 23-24 Capital Budget, and then moving to a continuous improvement focus in subsequent planning cycles.
This approach is outlined in the project overview below:
Project Overview
I. Short-Term Goals: The capital deliverability review effort has three immediate goals:
• Develop a balanced FY 23-24 Capital Budget informed by updated project deliverability factors by December 2022
• Develop a balanced 10-Year Capital Plan that meets agency’s needs informed by deliverability and ratepayer affordability factors by December 2022
• Build upon and strengthen the unified approach for capital project planning, prioritization and decision making across SFPUC
II. Long-Term Goals: Complex agency project deliverability issues will require several years to be fully identified, assessed, aligned to capital planning and adjusted to improve capacity for project execution. Our goals long-term are to:
• U se the outcomes from the FY 23-24 planning cycle to determine critical resource, process, and system issues that impact deliverability
• D evelop solutions to key deliverability issues and improve our overall ability to assess deliverability for project planning and budgeting
In order to meet these goals, the SFPUC will identify and build dedicated project teams to address deliverability issues and roll out these changes over subsequent capital planning cycles.
III. Schedule
Phase 1: Discovery and planning (Feb-July 2022)
• Identify problems and define scope /workstreams
Phase 2: Budget development & near-term improvements (July-Dec 2022) • Deliver/ implement new tools to support planning and budgeting • Update our capital plan and balance our FY 23-24 budget Phase 3: Continuous improvement (2023 and beyond)
IV. Progress to Date: The Strategy, Innovation and Change (SIC) division within Business Services is stewarding this capital deliverability review effort and has been coordinating a steering committee from across the agency to ensure a high level of engagement and commitment. Given the overlap of this effort with the budget process, this project has been aligned with the FY 23-24 budget development schedule. Progress to date includes:
• Interviewed leadership and stakeholders, and reviewed documents, reports, etc. to define and diagnose key issues
• Facilitated workshops to identify deliverability challenges and prioritize deliverability constraints to focus on this budget cycle • Defined deliverability assessments / tools / guidance to build this calendar year to adjust schedules and budgets, and improve agency-wide understanding of systems and processes; tools and guidance are currently under development
• Refined project scope and objectives to articulate what can be delivered in the short term for this planning cycle, and what will need to be addressed in future years to increase capacity to deliver capital projects
As noted above, given the complexity of these activities, we anticipate process improvements to take several capital planning cycles. We look forward to providing further updates on this initiative as a part of the FY 23-24 budget discussions.
Please contact us if you have any questions.