By Mike Matichich
Who: Cape Fear Public Utility Authority
Where: Wilmington, N.C.
Treatment works: 41 mgd water; 925 miles of distribution pipe 28 mgd wastewater; 950 miles of collection pipe
No. customers: 60,000
2010 operating budget: $38 million
2010 capital improvements budget: $218 million
In 2007, after 15 years of discussions, the City of Wilmington and New Hanover County water and sewer utility systems in North Carolina consolidated operations.
Initially, their combined capital improvement budget was $400 million. But the city was in the middle of compliance issues (and a moratorium) resulting from sanitary sewer overflows, and neither city nor county had a formalized maintenance plan. By the time the Cape Fear Public Utility Authority opened its doors on July 1, 2008, the 10-year capital investment estimate had swelled to $600 million.
In recommending the merger, a joint advisory committee mandated lower rates in the long term, better planning and more effective investment leading to a more reliable system, and more career opportunities for employees. So, in addition to uniting two organizational cultures, CEO Matt Jordan and COO Nancy Gallinaro had to identify and fix the weakest assets to meet locally defined service needs and state consent order requirements.
Fortunately, both had experience they could immediately apply to these challenges.
While working for the City of Gastonia, Jordan implemented North Carolina's first ISO 14001-certified environmental management system (EMS) by a water/wastewater utility. Having seen the benefits firsthand, one of his first moves was to challenge employees to develop one for the new entity, and work has already begun within the collection system and pump station operation and maintenance groups. Their efforts are being developed in concert with other programs designed to focus the entire organization on continual improvement, pollution prevention, and regulatory compliance.
Gallinaro's 30-year career includes overseeing operations and maintenance for the Massachusetts Water Resources Authority. Having directed combined sewer overflow treatment for Boston and 42 communities, she recognized that immediate action was necessary on multiple fronts.
“Records were kept in different formats, and the new combined staff needed to work to address major immediate external challenges,” Gallinaro says. “At the same time, we needed to define the long-term mission and vision for a new organization, and begin building processes and tools to manage information for the larger service area.”
In addition to the new leadership team, many new roles were identified for the existing staffs. While the merger's goals included improved efficiency, customer service, environmental stewardship, and savings, no one lost their job during the consolidation process. Instead, labor-related savings would come through attrition and implementing productivity-enhancing tools and approaches over time.
A number of things needed to happen almost simultaneously; in particular, three separate enterprise planning initiatives, each on a fast-tracked schedule:Strategic plan to define the newly integrated utility's vision and valuesIntegrated water resources master plan to address growth needs during service area build-out and anticipated regulatory requirements including combined system water, wastewater, reuse, and conservationAsset management plan to improve overall system reliability by determining the condition of physical assets, developing a proactive renewal and replacement program grounded in economically based decision-making, creating a culture based on the processes and standards needed to achieve the mission and vision, and giving employees the tools and training they need to make all this happen.
The asset management plan addresses considerations similar to those outlined by “Risk-based budgeting,” which begins on page 51 of the June issue of PUBLIC WORKS. That case study explains how Virginia's Upper Occoquan Service Authority used consequence and likelihood of failure analyses to develop risk profiles for key assets to better allocate renewal-and-replacement resources.