Strategic Plan Review

STRATEGIC PLAN REVIEW BOARD SESSION 2017

Report on the 2017 Board of Directors Strategic Planning Work Session

GM’s SUMMARY

This report is a compilation of the strategic planning concepts and program priorities presented and discussed with the EAA Board of Directors during its annual strategic planning work session held Sept. 22-23, 2017.

GENERAL MANAGER’S EXECUTIVE SUMMARY: THE STATE OF THE EAA As presented at the work session, assessing the state of the EAA requires contemplation of: our past history; the connection of that history to where we are at present for context; and then visualizing where we want to be in the future. When taking this approach, it becomes clear that ours is a journey from a past fraught with contention, complexity, and uncertainty toward a future of increasing clarity, consensus, and assurance that should breed a higher level of certainty. There are guideposts along this journey that signal progress – litigation and legislation landmarks as well as programmatic initiatives and outcomes – that help to further refine and define our roadmap for the future, if we take these experiences and use them as lessons learned, and then commit to an agreed path forward. Certainty as Our Goal: A commitment to pursuing greater certainty, from a broad view then, should be the overarching objective of our planning process. As we move forward, this focus will be aided by an intentional effort to build on the past success of the EAA mission for the continued benefit of the resource it protects and the people it affects, toward the ultimate goal of perpetuating greater certainty for both. Bridging the Gap from Past to Future is Key: Certainty is fostered, in part, by building a “bridge” of trust that links the known past to an unknown future through a culture of shared value that builds confidence and buy-in to the mission. In this way, the tumultuous history of the Edwards should increasingly become a remnant of the past, not to be forgotten but to be used as lessons learned from which we draw knowledge, if not inspiration, to reinvent ourselves for service to the region over the next 20 years. In this way, we can evolve from a reactive, risk averse past to a proactive, collaborative and engaging people-first culture that unites people around ideas and policies in which they feel invested.

Context (Why?) Matters: As we move forward in the planning process over the next couple of years, maintaining proper context in vision, mission, and programming will be critical, lest we become distracted by the inclinations, political and otherwise, that tend to distract organizations from their main purpose. In this regard, the value of certainty – for the regulated community, stakeholders, and the region in general – cannot be overstated in its importance as an overarching goal of everything we undertake as an organization. This speaks to managing expectations, limiting exposure to undue risk and liability, and maintaining fiscal stability within some reasonable level of predictability. The idea of proper context for our work then prompts continual self-reflection as an organization. As an organization, we must then intentionally change the dialogue about planning and program structure around the idea of self-examination by contemplating the “why” of what we do so that we establish the proper context to our work. More to the point, asking ourselves “why?” helps to clarify …. Our vision: The Edwards Aquifer Authority is a regional water management agency that regulates with integrity, transparency, respect, and commitment to sustainability of the Aquifer. Our mission: Manage, enhance and protect the Edwards Aquifer system. Our purpose: As I’ve communicated it to our staff, our purpose should be service to others. Our responsibility: Fairness and equity in everything we do. Asking ourselves “why?” can also serve as a reality check on expectations. Accepting that we cannot be all things to all people, helps mitigate against the tendency of bureaucratic operations such as ours to take on more than they’re capable of successfully completing; it guards against mission creep into areas that potentially create needless expenditures (both in financial terms and political capital); and provides greater clarity in overall operational planning and execution. Our Success Will Be Measured by Legacy: For the EAA, the “why?” question compels us to take a self-reflective assessment of ourselves with a longer view of the planning horizon. Moving beyond a five-year planning process to, perhaps, a 10-year cycle or longer provides context to any success we might have. This is because our success will be measured in the long term, not the so much the short term. Focusing on our legacy also brings with it an inherent sense of greater reliability, sustainability and predictability in the direction of our organization, and should translate into greater certainty, which in the end provides the broad context for our work. The program priorities presented were thus identified within the context of these ideas and the desired outcome of a legacy of certainty around our mission for the good of the natural resource we manage for the people we serve.

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Program Priorities:

Develop Effective Water Quality/Aquifer Protection Plan/Program – Align programming and processes to achieve protection of water quality of aquifer as means of ensuring region’s significant investment and reliance on the Edwards for long term. Improve Data Management Systems—Ensure effective processes through sufficient technological infrastructure that leads to greater interconnectedness and ability to serve others as a resource/ partner. Maintain Sustainable EAHCP – Maintain stability of programming while gaining efficiencies to lay foundation for successful transition to next Incidental Take Permit/HCP for continued certainty in aquifer availability and environmental certainty. Maximize Resources – Optimize efficiency in human capital, facilities, and financial resources to sustain stability and predictability in budget to build confidence and certainty in mission. Optimize the Reliability and Sustainability of the Aquifer – Posture to facilitate innovative regional solutions for balanced approaches to management and use of the aquifer to create shared value in the mission. Communicate and Collaborate – Build lasting relationships that engage stakeholders as partners in the mission to effectuate lasting programming for generational impact/legacy. Streamline Compliance – Redesign programmatic approaches to expedite compliance process to foster improved understanding and engagement with mission.

SUMMARY: STRATEGIC PLAN REVIEW

BOARD SESSION

ORGANIZATIONAL EFFECTIVENESS

Financial Overview

A 10-year financial forecast shows that the EAA can potentially maintain an aggregate $84 AMF rate for the foreseeable future if all cost variables remain static, meaning there are no new major initiatives undertaken that aren’t already planned or anticipated ( slide 1 ). Since raising the rate in 2012 to accommodate the habitat conservation plan, we have been able to absorb significant costs, planned and unplanned, such as capital expenses, legal payouts and settlements, special project costs such as participating in the Bracken Bat Cave conservation easement, and other inflationary expenses, while maintaining the same aggregate AMF rate of $84/AF. ( slide 2 )

However, moving forward we will not have capacity within the $84 AMF to continue to absorb new costs beyond those that are already accounted for — unless we raise the AMF or find additional sources of funding.

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SLIDE 1

SLIDE 2

ORGANIZATIONAL EFFECTIVENESS

Staff and Contracting Diversity

We have begun evaluating our comprehensive program needs -- e.g. full-time equivalent (FTE) positions vs. contractual help – to manage and mitigate against rising human capital costs. In this regard, we have under taken an intentional approach to maximizing existing human resources by improving our cross- functional capabilities, increasing cross-team collaboration, focusing on creating opportunities for on-the- job professional growth opportunities, and refining our performance measurement approaches. When needs for outsourcing do arise, we continually seek opportunities to further develop MWBE inclusion through our procurement procedures. ( Slide 3 ) shows the total amount of procurement contracts in 2016 of $6.1 million. Of this amount, approximately $2.9 million, or 46% of the total procurement dollars expended in 2016, was competitively bid out for these services in that year (2016). This is due to the fact that a number of these contracts span multiple years and thus were not competitively bid within the year, but rather the contracts were extended or renewed for an additional year. ( Slide 4 ) Therefore, of the contracting opportunities that were competitively bid in 2016, the EAA awarded 32.8% of these dollars to MWBE vendors. Examining the data within a micro context rather than macro helps us to better track progress in this area from year to year and to more directly target areas for improvement.

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SLIDE 3

SLIDE 4

ORGANIZATIONAL EFFECTIVENESS

Data Management Update

Data, in many respects, is the lifeblood of the EAA’s mission. The integrity of how we manage our technology resources is critical to the continued legacy and mission of the EAA. As we continue to transition our data storage and file sharing capabilities to a more state-of-the-art methodology based on a systematic, protected and accessible approach, we must reconcile all our data and make sure it is managed and securely moved and housed in the appropriate servers and locations ( slide 5 ). While we have successfully stored data for many years, the effective access to that data has often been a challenge. Now, with the advancements in expanded storage, accessibility, and file-sharing capabilities, we are using this momentum to enhance and expand our data management platforms and begin to migrate toward a data warehousing configuration that will enhance our data sharing and storage capabilities. This will allow us to store and share the millions upon millions of data points that enter our organization-wide network daily, but it is an ongoing process that will take a couple of years to fully implement.

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SLIDE 5

ORGANIZATIONAL EFFECTIVENESS

Public Information/Outreach Update

Information sharing and public transparency are cornerstones to building shared value across the region. The ability to reconcile, synthesize and share our data with our stakeholders and the public helps further our mission and keeps that mission top of mind and relevant. By focusing on our communication goals: Raise Awareness of programs & services, Engage Constituents on some level, and Change Behavior over time ( slide 6 ), we can help meet and further our strategic goals. Public information and engagement channels are determined and then implemented based on the message to be deliver and the target audience ( slide 7 ). In this area, we also continue to refine and re-conceptualize our communication models and tools, given advancements in technology and redevelopment of existing EAA programs to more user-friendly, proactive and responsive approaches.

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SLIDE 6

SLIDE 7

AQUIFER MANAGEMENT & PROTECTION

TCEQ Recharge Dam Amendment Process As we seek to engage and collaborate with other agencies as partners in our mission to optimize the quantity and quality of water in the aquifer, ensuring integrity of our own existing programs is imperative to building trust and buy-in. In this regard, we have initiated the process for seeking amendments to our existing diversion permits associated with our four recharge structures to ensure future compliance with state required limitations. We have completed the technical analysis necessary and are now visiting with interested parties involved in the process (surface water rights/downstream users). We intend to file an application to amend our permits with TCEQ by the end of year. Water Quality Task Force Update In our effort to streamline and effectuate more effective water quality protection programming, we have identified a cross-functional approach within our agency to develop and implement new solutions. This is a cross-functional approach is made up of multiple teams who work collaboratively to assess and propose solutions for water quality issues relating to the recharge and contributing zones and to address areas affected by potential abandoned well hazards. For example, the facilities storage/tanks team has initiated a process using GIS layering and identifying facilities that store regulated substances with older GIS layers of sensitive features (adding contours and drainage patterns) to more directly pinpoint areas of concern and risk for appropriate preparedness and education. This mapping process will help provide understanding during the facilities registration process and give justification for our protocols. It also helps us prioritize risks of recharge zone facilities and abandoned wells accordingly. One tar- get user group, first responders, can benefit when using this information to help make them aware of the regulated substances stored on the recharge zone so they can make appropriate decisions regarding firefighting activities with the potential to impact the water quality of the aquifer ( slide 8 ).

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SLIDE 8

SLIDE 8

AQUIFER MANAGEMENT & PROTECTION

Abandoned Well Program

Abandoned and deteriorated wells are direct conduits for potential contamination from the surface to reach the fresh water supply in the aquifer. So, abandoned water wells pose a threat to our groundwater quality. While Texas law makes the landowner responsible for plugging abandoned wells, the threats posed by that well can be significant health risks to the general population. To reduce these health risks, the EAA has developed an abandoned well risk assessment tool to rank potential impacts to groundwater quality ( slide 9 ). This tool helps to accelerate the plugging of those wells based on the risk to groundwater quality and to public health. Collaborative partnerships across the region could also help us facilitate this process by educating their constituents of the potential dangers, notifying them of well registration requirements, and sharing information with the EAA when an abandoned well is discovered. While the EAA has a needs-based abandoned well closure assistance program, additional funding sources would also be highly beneficial and continue to be explored.

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SLIDE 9

AQUIFER MANAGEMENT & PROTECTION

Enforcement/Compliance Program Re-Engineering

Based on lessons learned from past experience, we have begun to explore and integrate creative new ways to engage constituents and facilitate their compliance with our regulations. One way we are doing this is through a passive enforcement behavior modification process to educate constituents and incentivize compliance, depending on the significance of the risk to the aquifer and severity of the issue. This allows us to facilitate the best compliance outcome with the highest regulatory quality for the region. An example of a passive enforcement process would be if an abandoned well was found on someone’s property and they didn’t have the funds to properly cap it. The EAA could offer to bring it back into service for use as a monitoring well—if it was in an area that was advantageous to our monitoring program. This would be a beneficial use for water quality protection and would help solve the compliance issue ( slide 10 ).

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SLIDE 10

EAA SCIENCE PROGRAM OVERVIEW

EAHCP Timeline Review

In May 2007, the Texas Legislature directed the EAA and certain other state and municipal water agencies to participate in the EARIP and to prepare a FWS-approved plan by 2012 for managing the aquifer to preserve the listed species at Comal and San Marcos Springs. An Incidental Take Permit (ITP) was granted by the USFWS and Phase 1 of the EAHCP began in 2013. In 2020, a review period of the strategic adaptive management process is scheduled so that Phase 2 of the EAHCP can take place from 2021 through 2028 ( slides 11 &12 ).

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SLIDE 11

SLIDE 12

EAA SCIENCE PROGRAM OVERVIEW

ASR Adaptive Management Overview

Model runs and studies are currently being conducted to determine how the existing ASR Leasing program within the EAHCP can be modified for improved implementation and cost efficiency. We plan on presenting the revised program through the adaptive management process in late 2017 and early 2018. Once approved, we will announce the new “product” and begin a robust marketing and outreach effort to permit holders throughout the region to introduce the revised program ( slide 13 ).

Strategic Adaptive Management

The goal of this process is to rollover the ITP in 2027/2028 to acquire a new permit that continues to provide certainty of species protection and water supply for the region. Groundwater that is currently in the SAWS ASR program will remain there and will carry over to satisfy EAHCP requirements. A forbearance agreement for SAWS is currently being drafted and the 2 models needed for this process (Eco model for fountain darter & hydro model) are undergoing testing and review ( slide 14 ).

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EAA SCIENCE PROGRAM OVERVIEW

SLIDE 13

SLIDE 14

APPENDIX

BOARDWORK SESSION SUMMARY ROUND TOP CONSULTING ASSOCIATES

Edwards Aquifer Authority (EAA) Work Session Summary September 2017

I. Issues Facing the Edwards Aquifer Authority. During a teambuilding exercise, the Board of Directors was asked what is the most important issue facing the EAA. The responses are illustrated below. • Base conversion. • Understanding the agency through educational initiatives. • Long term augmentation of resources. • Abandoned wells. • Diversity issues (mentioned by two different Directors). • Establishing what are the main things to address. • Recharge. • Water quality. • Establishing an agency focus (mentioned by two different Directors). • Point source solutions. • Teamwork among the Board of Directors. • Mission identification. II. Visioning. The General Manager facilitated the Board of Directors through an initial visioning exercise aimed at focusing the agency on a 15-20 year horizon. Important comments emerging from the discussion are annotated below. • The EAA should be lead agency relative to the water resource in the region. As such, it should be in the middle of discussions and should link itself to other water-related entities. An example of EAA linking the spokes of a wheel was provided to emphasize the agency’s role in the future. • The most important internal and external challenges regarding the EAA need to be identified and prioritized for addressment. • As the agency strategically plans for the next 20 years, the prudent use of limited resources must be factored in when developing initiatives. • Need to clarify issues of water quality through use of scientific information and data. • Keep the vision statement simple. • It may be necessary to clarify the agency rules and what are the agency’s responsibilities. • The EAA should do a better job of letting the public know what water issues the agency is researching and studying. • Assess the current agency roles and outline what roles will be important in the future. The EAA should become more proactive.

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III. Legislative Report. The agency lobbyists (Carriage House) provided a summary of the 2017 Texas Legislative Session. Comments and suggestions for future legislative-related activities stemming from the presentation are provided below. • Agency should begin the process of moving from under the stipulations of SB36. This needs to be a streamlined process and it will probably take at least two legislative sessions to complete. • Increase the use of video technology to highlight agency issues to the Texas Legislature. Visual images carry more weight and impact when making a case to Legislative members. • The discussion of abandoned wells should be enhanced to include discussions of urban wells. • General Manager will explore these potential actions, along with the lobbyists, and come back to the Board of Director Executive Committee with recommendations. IV. Strategic Plan Update . The Board of Directors received a strategic plan update through presentations by the EAA staff. Comments and discussion points are summarized below. A. Organizational Effectiveness. The involve EAA Strategic Goals E, F, G, and H. • The creation of a minority contracting participation policy should be considered. Set a timetable for establishing the policy. • Explore avenues for expanding early recruitment of women and minorities. The use of universities and other educational organizations may provide some access. • Raise awareness of EAA programs and services. Consideration should be given to the development and use of podcasts. • Enhance public engagement in events and activities. These should be emphasized to maximize participation. • Use the agency news clipping report more effectively. • Data management should be improved. Water resource information should be collected properly and archived in manner that is user friendly for our staff and citizens. B. Aquifer Management and Protection. This involves EAA Strategic Goals A, B, C, and D. • Enforcement may be redefined as a process approach. Agency will contemplate separating the compliance and enforcement functions. • There may be multiple enforcement tools. These may include administrative assessment, responsive regulation, use of market forces (liens, etc.). • Regarding scientific activity, increase the use of uncertainty analysis. This type of modeling gives a better understanding of the Edwards Aquifer system. • Scientific modeling allows for planning actions strategically in the out-years. V. Writing Wall. During the session, a writing wall was created for Board of Directors to identify any additional agency issues. Comments provided are outlined below. • Critical Period. Different critical period stage numbers remain a problem. The agency tends to lose engagement, understanding, and awareness when this causes people to tune out because of conflicting information. Clarification in carrying out policy is needed.

Round Top Consulting Associates 10/2017

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