CIP Scheduling and Financial Planning, Engineering and Finance together at last

Aurora Water is the third largest water utility provider in Colorado and home to one of the fastest growing cities in America. Aurora Water provides water, sewer, and stormwater services to about 90,000 customers. In recent years Aurora Water’s total Capital budget was over $100 million dollars annually but the actual spending reached about half of that amount. In 2017 the finance department implemented two new approaches to CIP scheduling that greatly improved the projection of capital spending and the development of the 5-year plan.It is very common in water, wastewater and stormwater utilities that the planned capital improvement program (CIP) for a given year is not completed, sometimes by large percentages of 60 to 80 percent. This causes delays, increase in planned cost, and changes in the utility’s cash flow. Even though all the projects in the CIP are needed and the funds are available, the utility might lack the staffing to manage all the required projects at once or the actual spending of the project occurs between two or more fiscal years.For the Utility’s Financial Administration Division, the CIP is one of the most important pieces of information in the development of its multi-year financial plan. The CIP spending will most likely determine the need for rate increases, debt funding and utility’s staff commitments. When the engineering and finance divisions collaborate strategically in the development of the CIP scheduling results in a more accurate and realistic program that both groups can rely and trust. Although this seems straightforward many times these groups have difficulty getting on the same page. This presentation showcases a way to bridge this gap which helped Aurora Water to improve the budgeting and scheduling of capital projects.Although every capital project and every utility is different the implemented approach is an example of how collaboratively working can create synergy and produce tangible results. Using an interactive scheduling tool, Aurora Water was able to evaluate multiple scheduling scenarios for deploying personnel resources and capital in a way that minimized impact to rate payers. The tools developed by Aurora Water provided a more realistic CIP schedule with a more accurate financial cash flow.