GrokSurf's San Diego

[new headline; the old one confused people]

An audit of the San Diego Public Utilities Department (PUD) Capital Improvement Program (CIP) was received on Monday Oct. 17 by an approving Independent Rates Oversight Committee (IROC). The report, performed at IROC’s request and prepared by the Office of the City Auditor (OCA) issued four broad findings with 18 recommendations.

PUD is responsible for the city’s water and wastewater systems.

Erin Noel, Performance Auditor at the City Auditor’s Office, presented the report to the committee, provided additional background, and answered questions.

The report summarized: “Steps have been taken to implement asset management and planning, but improvements are needed to more effectively manage projects.”

Among the areas for improvement noted:

• Public Utilities has assessed the physical condition of many above-ground assets, but has only assessed about one percent of its water transmission pipes.
• Public Utilities has developed three master plans to address capital needs — the Water Facilities Master Plan, Draft Metropolitan Wastewater Plan, and Municipal Wastewater Collection System Master Plan — but only the Water Facilities Master Plan is comprehensive and in-line with best practices.
• For smaller projects valued between $100,000 and $2 million, the City’s average delivery costs are 14 percent higher than the statewide average of 33 percent.

(Findings are also summarized in an OCA highlights sheet.)

Of particular interest to IROC members, in addition to the report’s findings, was “Management’s Response to Report Recommendations” submitted by PUD Director Roger Bailey. While management agreed with most recommendations, it disagreed with several, especially with regard to process changes in recommendations #16 and #17, with management indicating that other processes already in place can or do accomplish the same things.

As committee members questioned Ms. Noel about the disagreements, she indicated that it wasn’t really the Department that disagreed with the recommendations, the objection came from higher up “in the administration” (i.e., Mayor’s Office). The outcome then, is a difference of opinion between OCA and the Mayor’s Office as to whether the recommended steps are already being done.

When members asked how the standoff would be resolved, Ms. Noel indicated that a followup process will take place in Nov-Dec, and that the issue would also likely go before City Council, possibly in January.

Overall the committee was impressed by the auditor’s view on the disputed issues. Initially Andrew Hollingworth moved to “accept” the report, but Colin Murray suggested that “support” would better convey the committee’s interest in the auditor’s position. Revised motion moved (Murray), seconded (Don Billings), and passed unanimously. Committee Chair Jim Peugh later said “I think the auditor’s report made a lot things clearer and I hope we can build on the information that was in the report over the next year.”

Click here for the complete audit report. Below are the slides from Ms. Noel’s briefing to the committee: