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2010 / 2011 Biennial Budget � 2-1

Strategic Plan & Balanced Scorecard

Introduction & History The CAWCD Board of Directors first took up the topic of strategic planning in 1995, about two years after the construction of the Central Arizona Project was declared complete. The first CAWCD Strategic Plan was published in May 1996, and identified three key strategies that are still important today: maximizing the use of the Colorado River water supply, relationships with constituents and other stakeholders and replenishment. Within each of these strategies, specific programs were identified that would help to accomplish the strategic objectives. During 1997, the District published its first Business Plan, which reported accomplishments against the strategic plan outlined above and identified additional objectives for the upcoming year. An updated Strategic Plan was adopted in December 1997 that identified five broad strategic areas, including managing financial performance, ensuring system reliability, shaping and influencing the beneficial use of CAP water, maintaining customer and community relationships and effectively managing CAP’s human resources. Twenty-two individual programs supporting these objectives were identified and began to take shape. The District continued to report accomplishments and objectives annually. In early 1999, management began the process of designing the District’s first Balanced Scorecard. The scorecard was intended to provide a means to measure the degree to which the strategic objectives

CAWCD’s Strategic Development Timeline

2-2 � 2010 / 2011 Biennial Budget

were being accomplished. Several designs were explored as strategies, programs, action plans and measures were organized, reorganized, combined and broken apart. Beginning in 2000, the District’s budget and business plan were prepared in a combined effort that resulted in an integrated single document. Performance goals, objectives and measures were pushed down into the organization, and individual departments began to incorporate these features into their planning processes. During 2001, the Balanced Scorecard began to coalesce around five “Key Results Areas,” or KRAs: Human Resources, Operations and Maintenance, Customer and Community Relationships, Water Management and Financial Stability. In 2002, after additional work, the KRAs were further modified and a sixth KRA, Technology, was added. The KRAs were organized into a “Strategic Framework Map,” with individual strategies organized beneath the KRAs.

2002 Strategic Framework Map

P U B L I C T R U S T �� Support effective board leadership ��Meet customer & constituent needs �� Build stakeholder alliances �� Further public awareness

W A T E R S U P P L Y �� Protect Colorado River water rights �� Secure CAGRD water supplies �� Firm future M&I water supply

P R O J E C T R E L I A B I L I T Y �� Ensure infrastructure & equipment readiness �� Ensure regulatory compliance ��Operate water control systems reliably

F I N A N C I A L V I A B I L I T Y ��Maintain adequate reserves ��Manage budget performance �� Secure final repayment settlement ��Achieve CAGRD financial independence

H U M A N R E S O U R C E S ��Use strategic framework to lead the

business ��Develop & sustain effective leadership �� Foster a capable & motivated workforce �� Provide a healthy, safe & secure

workplace

T E C H N O L O G Y ��Assess & use technology to support

business functions ��Capture & retain vital information �� Ensure network & information security


This Strategic Framework Map and the associated Balanced Scorecard, with certain improvements and revisions, remained in place through 2006. The District developed measures for each of the strategies, targets for each of the measures, and a scoring system to quantify performance for the individual strategies and the Balanced Scorecard as a whole. Although previous budgets had included reporting of accomplishments, strategic objectives and performance measures, the Balanced Scorecard first appeared in the 2003 budget. By 2005, the Board and management began to feel a need to build a new Strategic Plan from the ground up. Some of the Balanced Scorecard measures, while still important to the business, had become more tactical than strategic. Some measures would more appropriately be tracked at the departmental level rather than as District-wide measures. The KRAs and strategies needed more input and direction from the Board of Directors. In late 2004, the Board had adopted a two-year planning cycle in order to allow more time for long-range and strategic planning. During odd years, two-year budgets and business plans would be completed and, during even years, long-range financial plans, water rates and strategic plans were to be addressed. Consequently, during much of 2006, in a series of retreats and work/study sessions, the Board and staff developed a new Strategic Map which, not surprisingly, reflected many of the themes that had appeared in previous Strategic Plans. The new Strategic Map contained six Key Results Areas: Water Supply, Leadership, Public Trust, Project Reliability, Electrical Power and Replenishment. Within each KRA, Strategic Issues were identified by the Board. Strategic Objectives were established for each Strategic Issue, and individual Action Plans were put in place to address each Strategic Objective. There were over 70 individual Action Plans. The Board also updated the District’s Mission Statement and Values. A summary of the Strategic Plan appears on page 2-5. In 2007, a new Balanced Scorecard was developed to correspond to the new Strategic Plan. Fourteen Strategic Issues and the associated Action Plans were selected to comprise the updated Balanced Scorecard. The new scorecard was similar in structure to the scorecard it replaced, with measures for each strategy, a target for each measure and a scoring system for the individual strategies and the scorecard as a whole. Detailed Balanced Scorecard results for 2008-2009 appear on pages 2-17 through 2-31. Going into the 2010-2011 budget period, the District’s Strategic Plan and Balanced Scorecard are in their third generation, and reflect the growth and learning that have been experienced in the area of strategic planning over the last decade. A Balanced Scorecard summary for 2010-2011 appears on page 2-33.


Strategic Plan

During 2006, the Board and staff developed a new Strategic Map, that contained six Key Results Areas (KRA): Water Supply, Leadership, Public Trust, Project Reliability, Electrical Power and Replenishment. Within each KRA, Strategic Issues were identified by the Board. Strategic Objectives were established for each Strategic Issue, and individual Action Plans were put in place to address each Strategic Objective. There are over 70 individual Action Plans. The Strategic Plan concentrates on: �� Leadership within the water community; �� Building Public Trust by working to become more visible and bolstering relationships; �� Working to improve the reliability of the existing Water Supply and identifying potential new

water supplies; �� Maintaining Project Reliability, including operations and maintenance; strengthening our

workforce and planning for potential events that might interfere with project operations; �� Optimizing our power and transmission resources; and �� Ensuring adequate water supplies to meet replenishment needs of the Central Arizona

Groundwater Replenishment District (CAGRD). A tabular presentation of the action plans for each KRA and related strategic issues and objectives are show on pages 2-6 through 2-15.


KEY RESULTS AREA

STRATEGIC ISSUE

STRATEGIC OBJECTIVE ACTION PLANS

W A T E R

S U P P L Y

Improving Colorado River

Reliability

Reduce the risk associated with CAP's junior priority.

Be a leader in efforts and financial assistance to establish shortage criteria and acquire and manage supplies, while searching for opportunities to change the priority in Congress.

Manage the river to optimize existing supply.

Make a commitment of significant staff and budget to influence Colorado River management decisions, identify and implement programs and ensure necessary facilities are constructed and operated. These activities include: - Continuing CAP's role in providing input into Colorado River issues, e.g., operation of YDP, Drop 2 Reservoir, MSCP; - Evaluating the business case and determine how much effort and resources are needed to devote to YDP operation; - Evaluate the need for a formal Arizona Colorado River Advisory Board, with CAP as a designated principal.

Augment Colorado River supplies.

Fully commit CAP's public, political and financial resources to support updated augmentation studies and pilot programs (e.g., weather modification, watershed management, phreatophyte removal, ocean desalinization), followed by, when feasible and cost effective, technical and financial leadership in establishing programs that will increase average annual yield and reduce probability of shortfall significantly.

Strategic Plan


Strategic Plan

KEY RESULTS AREA

STRATEGIC ISSUE

STRATEGIC OBJECTIVE

ACTION PLANS

W A T E R

S U P P L Y

Identify the potential demand for new supplies and the potential supply to meet that demand.

Collaborate with CAP service area users to develop and maintain a CAP service area database. Revisit and update, if necessary, data prepared in the CAGRD Plan of Operation.

Develop an approved standard form wheeling agreement that addresses all cost components and the issue of project and non-project water.

Set a short-term process and timeline for CAP to lead a collaborative effort to identify potential future water supplies and develop a wheeling agreement, pricing guidelines, definition of non-project water and environmental compliance requirements for all future needs. Revisit existing policy.

Establish a collaborative process to determine when new supplies need to be acquired and what entities get those supplies. Encourage fair competition and eliminate perceptions of unfair advantage.

CAP takes the lead role developing a process that includes water user entities, CAGRD, and ADWR to decide the who, when, what and how much questions. CAP, as owner/operator of the CAP system, is lead agency.

Managing the Competition for

New Water Supplies & CAP System Capacity

Maximizing available system capacity to support future need for new supplies.

Evaluate constraints and risks to increasing and using system capacity in excess of 3,000 cfs. Make further decisions after evaluation. Prior to evaluation and further decisions, do not agree to deliveries above 3,000 cfs and 1.8 million acre-feet.

Drought Contingency

Planning

Develop credible recovery plans for AWBA banked water.

Complete planning process by mid-2007.

Developing New Water Supplies

for the CAP Three-County

Area


KEY RESULTS AREA

STRATEGIC ISSUE


L E A D E R S H I P

Future Water Leadership

Educate potential future CAP leaders.

Continue efforts and identify additional opportunities to educate community leaders, elected officials and members of the public about water and the value CAP brings to the tri-county service area through leadership development programs and other forums.

Identify new audiences for leadership development opportunities, including customers, employees, emerging and former community leaders and elected officials.

CAP External Leadership - Board

Better inform and involve community decision makers and leaders.

Develop opportunities for Board members to educate community leaders, elected officials and members of the public about water and the value CAP brings to the tri-county service area (same action in Public Trust).

CAP Internal Leadership - Board

Identify how interested Board members become officers.

Executive Committee to develop guidance for members wishing to hold a leadership position on the Board (officer terms, how to qualify, etc.).

CAP Internal Leadership - Key Staff & Succession

Planning

Have a succession plan for the General Manager and key senior staff.

Develop a succession plan for the General Manager that provides flexibility to replace with internal or external candidates (submit to Board by December 2007).

Develop succession plan for senior staff that provides flexibility to replace with internal or external candidates.

Strategic Plan


KEY RESULTS AREA

STRATEGIC ISSUE

STRATEGIC OBJECTIVE

ACTION PLANS

P U B L I C

T R U S T

Image - Education / Knowledge &

Visibility of CAP

Improve knowledge of water and CAP among the general public and community leaders.

Continue efforts to involve Board members in setting strategic communications direction.

Develop opportunities for Board members to educate community leaders, elected officials and members of the public about water and the value CAP brings to the tri-county service area.

Relationships - Customers

Improve relationships with customers.

Identify and develop opportunities for Board members to collaborate with customers and other stakeholders, including involvement in meetings, issues, discussions, etc., based on expertise, experience, and relationships.

Identify opportunities to obtain customer input and collaborate with customers on decisions, but without abdicating decisions to others.

Relationships - Other Stakeholders

Improve relationships with other stakeholders.

Define relationship that CAP wishes to have with environmental groups and how that relationship will benefit CAP.

Define relationship that CAP wishes to have with Indian communities and how that relationship will benefit CAP; recognize that tribes vary in objectives, culture, etc.

Define relationship that CAP wishes to have with public land use constituencies and how those relationships will benefit CAP.

Strategic Plan


KEY RESULTS AREA

STRATEGIC ISSUE


P R O J E C T

R E L I A B I L I T Y

Managing Our Workforce

Attract and retain human resources.

Continue the following activities: - Conduct regular employee surveys and target lowest scoring items with improvement programs. - Review employee turnover annually. - Conduct market salary surveys at least every two years. - Conduct market benefit comparisons at least every two years.

Develop and grow our own workforce.

Maximize efficiency and effectiveness of the existing Apprenticeship Program. Education is procured primarily from the outside; some modules may be brought in house.

Continue the following activities: - Exploration of other alternatives for obtaining skilled labor. - Providing appropriate Manager and Supervisor training. - Providing training opportunities for employees to maintain job competency and improve skills. Employees and managers are responsible for achieving development plan goals. - Maintain the tuition reimbursement program for appropriate education.

Investigate outsourcing.

Do not outsource critical activities necessary to maintain reliable water deliveries. Define what is critical and what is not.

Explore more outsourcing for jobs that aren't done every day, jobs for which we do not have the expertise, and appropriate routine jobs.

Strategic Plan


KEY RESULTS AREA

STRATEGIC ISSUE


P R O J E C T


Managing Our Workforce

(continued)

Plan for succession of key jobs.

Continue the following activities: - Use of succession planning for key jobs expected to be vacated within three years. - Proactive identification of candidates for succession to key jobs. - Maintenance of workforce planning for all jobs expected to be vacated.

Provide a safe and secure work environment.

Continue efforts to obtain VPP Star Status and achieve Target Zero.

Establish and achieve an improved target for participation in annual health assessment.

Utilize appropriate state-of-the-art equipment to protect assets and employees and provide surveillance.

Effectively Operating &

Maintaining the System.

Maintain our physical assets.

Continue efforts to achieve Maintenance Excellence (CAP's asset management initiative).

Establish and maintain a capital replacement plan.

Regularly review and update reserve strategy, capital replacement strategy and long-range financial forecast.

Provide reliable water deliveries.

Attain 90% system operating availability while providing for necessary planned outages.

Maintain current critical incident plan and emergency operations plan (current = less than two years old).

Maintain cross-departmental partnership agreements.

Aggressively pursue consensus resolution of issues surrounding Pima County CAP reliability.

Strategic Plan


KEY RESULTS AREA

STRATEGIC ISSUE


P R O J E C T


Effectively Operating &

Maintaining the System.

(continued)

Continue to establish reliable rates.

Regularly review rate setting process.

Regularly review and update rate components.

Update supply and demand assumptions annually.

Establish a policy to address rate setting in times of shortage.

Preparedness for Business Disasters

& Threats.

Prepare the workforce.

Proceed with current BDR planning efforts and maintain the existing BDR plan.

Meet semi-annually with managers/SMT for review and identification of critical skill sets.

Provide annual BDR training and communications.

Protect intellectual property and information technology.

Continue with current plan - IT BDR plan in place and tested by the end of 2007.

Evaluate two complete hot sites - CAP site and IBM site (long term).

Vital records protection to be completed by 2008.

Protect water resources.

Utilize appropriate state-of-the-art equipment to protect assets, monitor water quality and provide surveillance.

Guard against internal and external threats.

Perform regular computer system security audits.

Maintain a current terrorism response plan.

Conduct a third-party security audit of CAP facilities every five years.

Prepare for potential pandemics.

Develop a pandemic response plan and incorporate into the existing BDR plan.

Strategic Plan


KEY RESULTS AREA

STRATEGIC ISSUE


E L E C T R I C A L

P O W E R

Use of Power Resources

Effectively manage costs.

Continue the following activities: - Participation on Navajo O&M committee. - Effective utilization of Hoover resources. - Maintaining operating flexibility. - Energy Risk Oversight Committee evaluation of energy costs and risks. - Efforts to participate in NGS audits.

Monitor and evaluate the possibility of auditing APA.

Effectively manage revenue.

Manage sale and use of SO2 credits to stabilize rates.

Maximize benefit of Basin Development Fund revenues to CAWCD.

Optimize CAP's flexibility in sale of excess Navajo power after 2011. Evaluate contracting with marketing specialist (short term action plan).

Evaluate the use of Navajo power for treating and delivering CAP water.

Maintain energy rate structure associated with use (in-state, out of state, subcontract, recharge, etc.) after 2011 (long term).

Strategic Plan


KEY RESULTS AREA

STRATEGIC ISSUE


E L E C T R I C A L

P O W E R

Prepare CAP & the Board to Manage Its Power Future

After 2011

Increase the Board’s understanding of the electric power environment, operation and policies.

Provide ongoing training for Board members in the area of electric power economics in order for them to become well-versed in the subject.

Create an electric power primer to use for orientation of new Board members and act as a reference after new member is seated.

Hold semi-annual informational and educational seminars on electric power policy.

Decide how CAP will manage its electric power resources after 2011.

Staff and consultant initiative to assist Board in establishing strategies and policies (short term action plan).

Maintain the FA&P committee to stimulate innovative thinking, provide oversight, evaluate options and champion legislative changes.

Transmission

Construct new lines.

Continue to participate in regional transmission planning and influence line siting to benefit CAP.

Evaluate agreements to offer land in exchange for power transmission.

Maximize reliability.

Partner with others to maintain transmission lines, increase reliability and reduce costs.

Establish transmission redundancy.

Strategic Plan


KEY RESULTS AREA

STRATEGIC ISSUE


R

E

P

L

E

N

I

S

H

M

E

N

T

Water Supply

Obtain sufficient water supplies to meet replenishment obligation.

Enrollment

Identify and implement an appropriate level of management for enrollment.

Establish a process to reach consensus on whether there are any conditions to enrollment upon which stakeholders can agree.

Hydrologic Impact of Replenishment

Evaluate the magnitude of the problem. Identify CAGRD roles, responsibilities and capabilities.

Support ADWR's efforts to investigate potential areas where excessive groundwater declines are possible; investigate ways to mitigate local groundwater decline impacts through new CAWCD policies and contract replenishment.

Revisit and update CAGRD Plan of Operation, as necessary, including obligations, available water supplies, water supply portfolio, timing and cost of acquisition, and fees and rates.

Strategic Plan


2008 Balanced Scorecard Results

A map of the District’s Strategic Framework is shown below. The Scorecard includes these six Key Result Areas (KRAs) and 14 strategies. Each strategy has an associated Key Performance Indicator (KPI) or measure. A year-end target rank has been identified for each measure, and a seven-point scale was developed to represent possible outcomes. The 2008 targets were assigned a “10” on the scale, with other points representing outcomes that either exceed (ranks above “10”) or fall short of (ranks below “10”) the 2008 targets. To calculate the District's overall score, the individual ranks are added up and divided by the total target rank (14) and multiplied by 1,000. A weighted average score between 0 and 1,400 is calculated for the District as a whole, with a target score of 1,000. Each of the KRAs and their respective scores are shown on the left and discussed on pages 2-18 through 2-23. The score for the fourth quarter of 2008 is 1,007.

Rank Actual Target

Water Supply 32 30 Public Trust 20 20 Leadership 21 20 Project Reliability 42 40 Electrical Power 22 20 Replenishment 4 10 Total Score 141 140

Key Result Areas

Actual Rank / Target Rank x 1000 = Composite score 141 / 140 x 1000 = 1007

Strategic Framework Map

Water Supply �� Improve Colorado

River reliability ��Develop new water supplies �� Protect Colorado River water

rights

Project Reliability �� Provide a healthy, safe and secure

workforce �� Effectively maintain the CAP

system ��Maintain preparedness for business disasters

and threats ��Maintain stable and predictable rates

Electrical Power �� Effectively manage power

resources �� Prepare for CAP’s post-

2011 power future

Replenishment ��Manage a viable Plan of

Operation

Public Trust �� Improve relationships with

customers and stake-holders

�� Further public awareness

Leadership ��Develop future water leadership ��Develop and sustain effective

Board leadership


Improve Colorado River Reliability Several strategic activities were identified for 2008, including participation in weather modification planning and studies and Colorado River augmentation studies. The target for 2008 was to complete all identified activities. As of the fourth quarter, all activities were complete, for a rank of “10.”

Develop New Water Supplies This activity consisted of developing a collaborative process to identify the “who,” “when,” “what” and “how much” involved with developing new water supplies. The target for 2008 was to have the process established and ongoing. The process was established and ongoing by the end of 2008 for a rank of “10.”

Protect Colorado River Water Rights The measure was to oppose threats to the CAP water supply. Five specific threats were carried forward from

2007: (1) Failure to operate the Yuma Desalting Plant (YDP); (2) Environmental litigation (two cases, one favorably resolved); (3) Remaining Indian water rights claims; (4) Failure to restore the CAP priority; and (5) Failure to augment Colorado River supplies and improve system efficiency. The target was to aggressively oppose all identified threats. Threats were identified, strategies were developed, one threat was favorably resolved and the remaining threats were being aggressively opposed, for a rank of “12.”

Water Supply Strategy Scorecard Measure

2 4 6 8 TARGET 10

12 14 RANK

IMPROVE COLORADO RIVER RELIABILITY STRATEGIC ACTIVITIES COMPLETED

20% 40% 60% 80% 100% 120% 140% 10

DEVELOP NEW WATER SUPPLIES DEVELOP A COLLABORATIVE PROCESS TO IDENTIFY WHO, WHEN, WHAT AND HOW MUCH

No Activity Supply/Demand Database

Database & Canal

Capacity Analysis

Process Defined

Process Established/

Ongoing

Draft Proposal

Agreement On Who, When,

How Much

10

PROTECT COLORADO RIVER WATER RIGHTS WATER SUPPLY THREATS OPPOSED

Identify / List

Significant Threats

Strategy Approved

Strategy Communicated

Strategy Successfully Implemented

Aggressively Opposed

All Threats

Successfully Resolved 1

Threat


Threats 12

32


Improve Relationships with Customer and Stakeholders The CAWCD Communications Group annually prepares a Communications Strategic Plan, which contains program plans designed to support the District’s KPIs in the area of Public Trust which, for 2008, included sponsoring annual League of Arizona Cities and Towns meeting � producing a two-part video series on optimizing CAP’s power resources � supporting CAGRD by creating and developing its conservation grant program � participating in Tucson Earth Day, Valley Forward’s EarthFest Educator’s Night, Reach 11 Grand Opening and Arizona Ag Day � coordinating Friends of West Valley Recreation Corridor activities on behalf of CAP � producing at least 17 educational interviews with Board members and stakeholders � publishing a bi-weekly e-newsletter to CAP customers and constituents � participating on the AMWUA Conservation Committee, helping coordinate its Smartscape conference and/or other collaborative events, including the Phoenix Home and Garden Show. The target was to complete 100% of the planned events. Program plans were on schedule, for a rank of “10.”

Further Public Awareness The CAWCD Communications Group annually prepares a Communications Strategic Plan, which contains program plans designed to support the District’s KPIs in the area of Public Trust which, for 2008, included creating and producing “shared voice” public education radio spots in conjunction with Salt River Project � securing at least one new “shared voice” partner in Pima County to co-sponsor public education radio messages � participating in Tap Into Quality committee composed of municipal customers to create and support public education media outreach efforts � co-sponsoring Water Day at the Legislature in conjunction with University of Arizona and Salt River Project � soliciting at least ten print and broadcast news pieces on issues related to managing an extreme shortage of water as well as an unexpected abundance of water. Program plans were on schedule for a rank of “10.”

Public Trust Strategy Scorecard Measure

2 4 6 8 TARGET

10 12 14 RANK

IMPROVE RELATIONSHIPS WITH CUSTOMERS AND STAKEHOLDERS % OF PLANNED ACTIVITIES COMPLETED

20% 40% 60% 80% 100% 120% 140% 10

FURTHER PUBLIC AWARENESS % OF PLANNED ACTIVITIES COMPLETED

20% 40% 60% 80% 100% 120% 140% 10

20


Develop Future Water Leadership The CAWCD Communications Group annually prepares a Communications Strategic Plan, which contains program plans designed to support the District’s KPIs in the area of Leadership. For 2008, the plan included refining and improving content of online education competition, H204U, to middle and high schools throughout the service territory to encourage interest and academic pursuit in the water industry � hosting the bi-annual Leadership Forum in Pima County to attract professionals, community leaders and other interested parties to work in the water industry � developing, managing and distributing $50,000 to non-profits, schools, students, teachers and other academic arenas to raise awareness of water and environmental programs and issues � providing water curriculum materials to all schools, supporting Phoenix’s water education facilitator training workshops, and promoting ADWR’s Conserve Arizona program to instruct and inspire students of all ages about the water industry � participating on Arizona Water Institute’s Water Educator’s ThinkTank to support water education programs in all three state universities � coordinating quarterly Women in Water association meetings with guest speakers and field trips that will inspire and encourage women to vie for leadership positions in the water industry � continuing membership and participation in Westmarc, Tucson Chamber, and West Valley Leadership to promote and encourage interest and involvement in water issues � coordinating legislative orientation flights and tours of the CAP system to encourage greater interest and involvement in water issues. The target was to complete 100% of the planned events. Planned programs were completed for a rank of “10.”

Develop and Sustain Effective Board Leadership This activity includes attendance by Board members at Board meetings, attendance by Committee members at

Committee meetings and attendance of non-Committee members at Committee meetings. Members’ engagement and participation at Board events is indicative of effective leadership. The measures through the fourth quarter were 84% attendance for Board meetings, 82% attendance by Committee members at Committee meetings and 51% attendance by non-Committee members at Committee meetings. The three scores are weighted at 70%, 20%, and 10%, respectively. The combined attendance for board members through 2008 received a rank of “11.”

Leadership

Strategy Scorecard Measure

2 4 6 8 TARGET

10 12 14 RANK

DEVELOP FUTURE WATER LEADERSHIP % OF PLANNED ACTIVITIES COMPLETED

20% 40% 60% 80% 100% 120% 140% 10

DEVELOP AND SUSTAIN EFFECTIVE BOARD LEADERSHIP-ATTENDANCE A) BOARD B) COMMITTEE C) NON-COMMITTEE

51% 51% N/A

60% 60% N/A

70% 70% N/A

75% 75% N/A

80% 80% 10%

90% 90% 30%

95% 95% 60%

11

21


Provide a Healthy, Safe, and Secure Workplace The measures are the reduction in the three-year rolling average for recordable injuries and illnesses and the milestones accomplished towards obtaining Voluntary Protection Program (VPP) status. The target for 2008 was a reduction of 20% in recordables and completing the annual report to ADOSH. For 2008, recordable injuries and illnesses were reduced by 13%, the annual facility inspections and internal audit have been performed, and the 2009 plan has been developed, for a composite rank of “9.”

Effectively Maintain the CAP System The measure of effective CAP system maintenance was the percentage operating ability of equipment along

the system. The target for 2008 was 88% based on industry best practices. Actual performance through the fourth quarter was 86% for a rank of “8.”

Maintain Preparedness for Business Disasters and Threats This is a composite measure consisting of a percent reduction in files migrated from the “G:” drive to Livelink, the successful completion of the IT BDR test (by year end) and the number of network incidents (target = 0). At the end of 2008, the percentage reduction in migrated files for those departments currently included in the Livelink migration was 78%, the IT BDR test was completed by the end of September and there was one network incident followed by several network security enhancements. The overall rank was a “13.”

Maintain Stable and Predictable Rates The measure is the percentage variance between the set rates and the actual reconciled rates (not including application of SO2 credits). The target for 2008 was 4% based on actual performance for 2002-2006, which ranged between 1% and 9%. The variance for the end of 2008 was 2%, for a rank of “12.”

Project Reliability


2 4 6 8 TARGET 10

12 14 RANK

PROVIDE A HEALTHY, SAFE AND SECURE WORKPLACE REDUCTION IN 3-YEAR ROLLING AVERAGE OF RECORDABLE INJURIES AND ILLNESSES RETAIN VPP STATUS

0% Annual

Report to ADOSH for 2007

5% Implement Recertificat

ion Plan for 2008

10% Implement Action Plan for 2008

Items

15% Annual Facility

Inspections and

Internal Audit

20% Develop

2009 Plan

25% Correction of Inspection &

Audit Deficiencies

30% Target Zero in 2008 Implement 2009 Plan

9

MAINTAIN PREPAREDNESS FOR BUSINESS DISASTERS AND THREATS COMPLETE IT BDR TEST SUCCESSFULLY BY 12/31/2008 PERCENT REDUCTION IN FILES MIGRATED FROM G: DRIVE NUMBER OF NETWORK INCIDENTS

20% 50%

4

40% 55%

3

60% 60%

2

80% 65%

1

100% 70%

0

1 Month Early 75%

0+1 Security Improvements

2 Months Early 10


13

MAINTAIN STABLE AND PREDICTABLE RATES PERCENT VARIANCE TO SET RATES

8% 7% 6% 5% 4% 2% 0% 12

42

EFFECTIVELY MAINTAIN THE CAP SYSTEM EQUIPMENT OPERATING AVAILABILITY

80% 82% 84% 86% 88% 89% 90% 8


Effectively Manage Power Resources This measure is the percent variance actual to budgeted purchased power costs (including Navajo, Hoover B and C and over-threshold), normalized on power purchased. The target for 2008 was ±4%. At the end of 2008, power costs were 1.9% under the normalized budget, for a rank of “12.”

Prepare for CAP’s post-2011 Power Future This measure consists of a number of planned activities, including a series of Board workshops, and working with APS, SRP and Southwest Transmission on identifying potential transmission redundancy. All activities were achieved for a rank of “10.”

Electric Power


2 4 6 8 TARGET

10 12 14 RANK

EFFECTIVELY MANAGE POWER RESOURCES % OF ACTUAL TO BUDGET (NAVAJO, HOOVER B&C AND OVER-THRESHOLD)

12% 10% 8% 6% 4% 2% 8% 12

PREPARE FOR CAP’S POST-2011 POWER FUTURE % OF PLANNED ACTIVITIES COMPLETED

20% 40% 60% 80% 100% 120% 140% 10

22


Manage a Viable Plan of Operation This measure is the variance between actual cumulative CAGRD enrollments and the enrollments assumed in the plan of operation. The target for 2008 was ±10%. The variance through the fourth quarter was approximately 25% higher, for a rank of “4.”

Replenishment


2 4 6 8 TARGET

10 12 14 RANK

MANAGE A VIABLE PLAN OF OPERATION % OF ACTUAL TO PLANNED ENROLLMENT

30% 25% 20% 15% 10% 5% 2% 4

4


2009 Balanced Scorecard Results

A map of the District’s Strategic Framework is shown above. The Scorecard includes these six Key Results Areas (KRAs) and 14 strategies. Each strategy has an associated Key Performance Indicator (KPI) or measure. A year-end target rank was identified for each measure, and a seven-point scale was developed to represent possible outcomes. The 2009 targets were assigned a “10” on the scale, with other points representing outcomes that either exceed (ranks above “10”) or fall short of (ranks below “10”) the 2009 targets. To calculate the District's overall score, the individual ranks are added up and divided by the total target rank (14) and multiplied by 1,000. A weighted average score between 0 and 1,400 is calculated for the District as a whole, with a target score of 1,000. Each of the KRAs and their respective scores are shown on the left and discussed on pages 2-26 through 2-31. The 14 measures described above are each equally weighted. The sum of the ranks are divided by 140 and multiplied by the overall target score of 1000. The actual score for 2009 was 1000.

Rank Actual Target

Water Supply 32 30 Public Trust 20 20 Leadership 21 20 Project Reliability 41 40 Electrical Power 18 20 Replenishment 8 10 Total Score 140 140

Key Result Areas

Actual Rank / Target Rank x 1000 = Composite score 140 / 140 x 1000 = 1000

Strategic Framework Map

Water Supply �� Improve Colorado

River reliability ��Develop new water supplies �� Protect Colorado River water

rights

Project Reliability �� Provide a healthy, safe and secure

workforce �� Effectively maintain the CAP

system ��Maintain preparedness for business disasters

and threats ��Maintain stable and predictable rates

Electrical Power �� Effectively manage power

resources �� Prepare for CAP’s post-

2011 power future

Replenishment ��Manage a viable Plan of

Operation

Public Trust �� Improve relationships with

customers and stake-holders

�� Further public awareness

Leadership ��Develop future water leader-

ship ��Develop and sustain effective

board leadership


Improve Colorado River Reliability Several strategic activities have been identified for 2009, including participation in weather modification planning and studies and Colorado River augmentation studies. The target for 2009 is to complete all identified activities. For the year, all planned activities were completed, for a rank of “10.”

Develop New Water Supplies This activity consists of developing a collaborative process to identify the “who,” “when,” “what” and “how much” involved with developing new water supplies. The target for 2009 is to have the process established and ongoing. As of the first quarter of 2009, the process was established and ongoing for a rank of “10.”

Protect Colorado River Water Rights The measure is to oppose threats to the CAP water supply. Five specific threats were carried forward from 2008: (1) Failure to operate the Yuma Desalting Plant (YDP); (2) Environmental litigation (one case); (3) Remaining Indian water rights claims; (4) Failure to restore the CAP priority; and (5) Failure to augment Colorado River supplies and improve system efficiency. An additional threat was added in 2009 (failure to obtain MSCP legislation). The target is to aggressively oppose all identified threats. Threats have been identified, strategies have been developed, one threat has been favorably resolved (MSCP legislation) and the remaining threats are being aggressively opposed, for a rank of “12.”

Water Supply Strategy Scorecard Measure

2 4 6 8 TARGET 10

12 14 RANK

IMPROVE COLORADO RIVER RELIABILITY STRATEGIC ACTIVITIES COMPLETED

20% 40% 60% 80% 100% 120% 140% 10

DEVELOP NEW WATER SUPPLIES DEVELOP A COLLABORATIVE PROCESS TO IDENTIFY WHO, WHEN, WHAT AND HOW MUCH

No Activity Supply/Demand Database

Database & Canal

Capacity Analysis

Process Defined

Process Established/

Ongoing

Draft Proposal

Agreement on Proposal

10

PROTECT COLORADO RIVER WATER RIGHTS WATER SUPPLY THREATS OPPOSED

Identify / List

Significant Threats

Strategy Approved

Strategy Communicated

Strategy Successfully Implemented

Aggressively Opposed

All Threats


Threat


Threats 12

32


Improve Relationships with Customer and Stakeholders The CAWCD Communications Group annually prepares a Communications Strategic Plan, which contains programs designed to support the District’s Key Performance Indicators (KPI) in the area of Public Trust. For 2009, the following actions were planned to enhance the public trust through improving relationships with customers and stakeholders: Sponsor luncheon and Board presentation during League of Arizona Cities and Towns annual conference to further educate elected officials across the three-county service territory about CAP � participate in Greater Phoenix, Scottsdale, Tucson and Casa Grande Chambers of Commerce � coordinate legislative orientation flights and tours of the CAP system to encourage greater interest and involvement in water issues � promote, plan and execute the annual President's Award for Community Service � co-sponsor Water Day at the Legislature in conjunction with Salt River Project (SRP) and the Arizona Municipal Water Users Association (AMWUA) to further educate elected officials in the state legislature � assist in the coordination of the annual symposium of the Arizona Hydrologic Association � participate on the Tap Into Quality committee composed of municipal customers to create and support public education outreach efforts. The target was to complete 100% of the planned events. All planned programs were completed in 2009 for a rank of “10.”

Further Public Awareness The CAWCD Communications Group's strategic plan for 2009 included the following programs designed to enhance Public Trust by furthering public awareness: Schedule at least five public presentations for the CAP Board members to meet and dialogue with their constituents about Arizona's water supply issues � produce at least 15 educational interviews with the Board members and stakeholders for the CAP Channel which airs on the CAP website and on the international website YouTube � publish a bi-weekly e-newsletter to CAP customers and constituents to further inform them of issues affecting CAP and Arizona's Colorado River Entitlement � write, produce and distribute CAP's 2008 Annual Report � proactively solicit at least ten print and broadcast news pieces on issues related to managing shortages of water as well as unexpected abundances � manage, improve and refine CAP's website and coordinate links to/from associated organizations to exponentially increase hits and numbers of browsers � sustain and build on public/private partnerships that can provide CAP with expanded opportunities for increased public awareness at reduced costs. The target was to complete 100% of the planned events. All planned programs were completed in 2009 for a rank of “10.”

Public Trust Strategy Scorecard Measure

2 4 6 8 TARGET

10 12 14 RANK

IMPROVE RELATIONSHIPS WITH CUSTOMERS AND STAKEHOLDERS % OF PLANNED ACTIVITIES COMPLETED

20% 40% 60% 80% 100% 120% 140% 10

FURTHER PUBLIC AWARENESS % OF PLANNED ACTIVITIES COMPLETED

20% 40% 60% 80% 100% 120% 140% 10

20


Develop Future Water Leadership The CAWCD Communications Group annually prepares a Communications Strategic Plan, which contains program plans designed to support the District’s KPIs in the area of Leadership. For 2009, the following programs were used to develop future water leadership: Refine and improve content of online education competition, H2O4U, to middle and high schools throughout the service territory to encourage interest and academic pursuit in the water industry � provide water curriculum materials to all schools, support Phoenix's water education facilitator training workshops, and promote Arizona Department of Water Resource's (ADWR) Conserve Arizona program to instruct and inspire students of all ages about the water industry � participate in Arizona Water Institute's Water Educator's ThinkTank to support water education programs in all three state universities � coordinate two Women in Water association meetings with guest speakers and field trips that will inspire and encourage women to vie for leadership positions in the water industry � serve on the Valley Forward Board of Directors water committee and environmental education committee to promote importance of Arizona's water supply to new and upcoming leaders in the organization � continue membership and participation in Westmarc, Tucson Chamber and West Valley Leadership to promote and encourage interest and involvement in water issues. The target was to complete 100% of the planned events. All planned programs were completed in 2009 for a rank of “10.”

Develop and Sustain Effective Board Leadership This activity measures the timeline for the CAWCD Board Member survey. This includes the design, implementation, and completion of the survey . The survey was completed by the end of 2009 for a rank of "11".

Leadership


2 4 6 8 TARGET

10 12 14 RANK

DEVELOP FUTURE WATER LEADERSHIP % OF PLANNED ACTIVITIES COMPLETED

20% 40% 60% 80% 100% 120% 140% 10

DEVELOP AND SUSTAIN EFFECTIVE BOARD LEADERSHIP SURVEY COMPLETED BY BOARD MEMEBERS BY THE END OF 2009

No Activity

Define Element of Survey

Draft Survey

Finalize Survey

Questions

Survey Completed

by 12/31/09

One Month Early

Two Months

Early 11

21


Provide a Healthy, Safe, and Secure Workplace The measure is the composite score for physical, emotional and cognitive safety indexes as rated by CAP employees through a series of questions and safety meetings. Scoring ranges for each area are from 0 to 5. The composite baseline score for 2009 is 3.42. Actual ratings will be given at the beginning of the year and the end of the year. With continued training and activities throughout 2009, the goal was to improve the score by 5% at year end. For 2009, the score improved by 3% over the baseline base, for a rank of "8".

Effectively Maintain the CAP System The measure of effective CAP system maintenance is the percentage operating ability of equipment along the system. The target for 2009 was 88% based on industry best practices. Actual performance for the year was 88% for a rank of “10.”

Maintain Preparedness for Business Disasters and Threats This is a composite measure consisting of a percent reduction in files migrated from the “G:” drive to Livelink, the successful completion of the IT BDR test (by year end) and the number of network incidents (target = 0). For 2009, the percentage reduction in migrated files was 75%, The IT BDR was completed by the end of September and there were no network incidents during the year. The overall rank is a “12.”

Maintain Stable and Predictable Rates The measure is the percentage variance between the set rates and the actual reconciled rates (not including application of SO2 credits). This measure is one quarter in arrears and is based on data from the 2008 year-end. The target for 2008 was 4% based on actual performance for 2002-2007, which ranged between 1% and 9%. The anticipated variance as of the third quarter of 2009 was within 3%, for a rank of “11.”

Project Reliability


2 4 6 8 TARGET

10 12 14 RANK

PROVIDE A HEALTHY, SAFE AND SECURE WORKPLACE CAP EMPLOYEE’S PERCEPTION OF PHYSICAL, COGNITIVE AND EMOTIONAL SAFETY

3.2 3.3 3.4 3.5 3.6 3.7 3.8 8

MAINTAIN PREPAREDNESS FOR BUSINESS DISASTERS AND THREATS COMPLETE IT BDR TEST SUCCESSFULLY BY 12/31/2009 PERCENT REDUCTION IN FILES MIGRATED FROM G: DRIVE NUMBER OF NETWORK INCIDENTS

20% 50%

4

40% 55%

3

60% 60%

2

80% 65%

1

100% 70%

0

1 Month Early 75%


2 Months Early 10


12

MAINTAIN STABLE AND PREDICTABLE RATES PERCENT VARIANCE TO SET RATES

8% 7% 6% 5% 4% 2% 0% 11

41

EFFECTIVELY MAINTAIN THE CAP SYSTEM EQUIPMENT OPERATING AVAILABILITY

80% 82% 84% 86% 88% 89% 90% 10


Effectively Manage Power Resources This measure is the percent variance actual to budgeted purchased power costs (including Navajo, Hoover B and C and over-threshold), normalized on power purchased. The target for 2009 was ±4%. For the first quarter of 2009, projected power was approximately 6% under the normalized budget for a rank of “8.”

Prepare for CAP’s post-2011 Power Future This measure consists of a number of planned activities, including a series of Board workshops, working with APS, SRP and Southwest Transmission on identifying potential transmission redundancy, and working with Western and Reclamation on improving operations and maintenance costs of the CAP transmission system. All planned activities were completed in 2009 for a rank of “10.”

Electric Power


2 4 6 8 TARGET

10 12 14 RANK

EFFECTIVELY MANAGE POWER RESOURCES % OF ACTUAL TO BUDGET (NAVAJO, HOOVER B&C AND OVER-THRESHOLD)

12% 10% 8% 6% 4% 2% 8% 8

PREPARE FOR CAP’S POST-2011 POWER FUTURE % OF PLANNED ACTIVITIES COMPLETED

20% 40% 60% 80% 100% 120% 140% 10

18


Manage a Viable Plan of Operation This measure reflects achievements associated with the following CAGRD activities: satisfaction of annual replenishment obligations, establishment of a replenishment reserve of long-term storage credits, and acquisition of water rights. The three measures are weighted at 40%, 20%, and 40% respectively. The satisfaction of annual replenishment obligations was measured as percent completion of obligations incurred over a three-year period. The target for 2009 was to satisfy 100% of obligations incurred in 2006, 67% of obligations incurred in 2007, and 33% of obligations incurred in 2008. The composite target for annual replenishment obligations was 50% for the years 2006 to 2008. The establishment of replenishment reserves and acquisition of water rights are measured as a percent completion of the volumes identified for 2009 in the current CAGRD Plan of Operation (Plan). The 2009 target for these items was to be within 10% of the volumes identified in the Plan. Activities through the end of the year resulted in a composite rank of “8”.

Replenishment


2 4 6 8 TARGET

10 12 14 RANK

MANAGE A VIABLE PLAN OF OPERATION % OF ACTUAL TO PLANNED ENROLLMENT

30% 25% 20% 15% 10% 5% 2% 8

8


2010 / 2011 Balanced Scorecard KEY RESULTS

AREA STRATEGIES BALANCED SCORECARD

MEASURES 2010 TARGET 2011 TARGET

WATER SUPPLY

Improve Colorado River Reliability

Strategic Activities Completed

100% Completed 100% Completed

Develop New Water Supplies

Percent of Planned Activities Completed


Protect Colorado River Water Rights

Water Supply Threats Opposed

Aggressively Oppose All Threats

Aggressively Oppose All Threats

PUBLIC TRUST

Improve Relationships with Customers & Stakeholders

Percent of Planned Activities Completed 100% Completed 100% Completed

Further Public Awareness Percent of Planned Activities Completed


LEADERSHIP

Develop Future Water Leadership



Develop & Sustain Effective Board Leadership

Staff Support Survey and Board Hours

Follow Up Survey; Maintain Board Hours

Maintain Board Hours

PROJECT RELIABILITY

Provide a Healthy, Safe & Secure Workforce

CAP Employees’ Perception of Physical, Cognitive and Emotional Safety

Maintain Improved Baseline

Maintain Improved Baseline

Effectively Maintain the CAP System

Equipment Operating Availability

89% 90%

Maintain Preparedness for Business Disasters & Threats

a) Complete IT BDR Test by year-end

b) Percent Reduction in Migrated Files

c) Number of Network Incidents

a) 100% b) 70% c) 0

a) 100% b) 70% c) 0

Maintain Stable & Predictable Rates

Percent Variance to Set Rates

Within + 4% Within + 4%

ELECTRICAL POWER

Effectively Manage Power Resources

Percent of Actual Expense to Budget Within + 4% Within + 4%

Prepare for CAP's Post-2011 Power Future



REPLENISHMENT Manage a Viable Plan of Operation

a) Meet Annual Obligations over 3-year period.

b) Replenishment Reserves c) Water Rights Acquired

a) 50% b) 100% c) 100%

a) 50% b) 100% c) 100%

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