Beyond Privatization: Lessons From the Upper Midwestern United States and the Canadian Province of Ontario
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1 Beyond Privatization: Lessons From the Upper Midwestern United States and the Canadian Province of Ontario Thematic Week: Water and City Thematic Axis: Sustainable Financial Tools Gary Wolff, P.E., Ph.D., Vice Chair Vice Chair, California Water Resources Control Board and Research Affiliate, The Pacific Institute
2 US and Candian Utilities Face Problems: Historic Under-Investment Tighter Regulations Increased Security Expenditures Limited Financial Resources
3 Is the Private Sector The Solution? Private/ Public is A Value Issue But NOT the Primary Performance Issue Case Studies in: Ilinois, Indiana, Iowa Michigan, Minnesota, Ohio, Wisconsin And The Canadian Province of Ontario
4 We Found Performance Depends On: Effective Staffing Consistent and Adequate Funding Better Asset Management Performance Measurements and Rewards Stakeholder Involvement & Transparency Avoiding False Starts
5 Ine fficien t staffin g B etter tra inin g Addition al sta ff In tera genc y labor sha ring S elec tive outsourc in g Clea r com m unica tion with worke rs and union s S tate and fede ra l tec hnica l assista nce Insu fficie nt fu n d s Gra nts an d subsidie s R egulator y r elief M or e cost-ef fe ctive procur em e nt a ppr oac h Va lue enginee ring or a lter native fa cilitie s Longe r term loa ns Gr eater econom ies of sc ale or sc ope Str ea mlinin g of key proc esses Ad ditional char ges or ta xes Lim ited transpare nc y and public participation Open-m inde d ne eds assessm ent discussions C om pre hensive external and inte rna l c om m unica tions Adhe re nce to and exce eding lega l re quir em e nts C on sistently informing custom ers about n ew fa cility bene fits a nd c osts P rom pt, third-party investigation of a llegations Third-party te chn ical revie ws P oor asse t m anage me nt On e-tim e asset condition a sse ssm e nt Ongoin g a sse t inspec tion and trac kin g Risk-ba sed asset m ana gem ent C lear threshold betwe en m a intena nce a nd c apital spending In effect ive pe rform an ce m easu rem e nt and rew ard C lea r sta ndar ds and in dic ator s Pe rf or m an ce-ba sed com pen sation Per for m anc e sc ore ca rds F ixed-fee c ontra cts with op tions to extend R aw wate r use or pollution ch ar ges P ublic ben efits cha rge s P re-specif ie d m inim um m anda tor y pen alties
6 Fo cu s of m anual Effective Start 1 C larify sym p to ms Id en tify causes 3 E valuate optio ns 2 Limite d discussion 6 4 E valuate p erfo rmance L ocal decision - m akers 5 Im plemen t solution (s) Select so lu tio n(s) False start Pu blic participatio n (e.g., ad visory co mm ittees, pu blic h earing s) Exp ert assistance (e.g., con sultan ts, asso ciatio ns) Federal, state, and local rules, regulations, and customs
7 Example: Economies of Scale Lansing, Michigan Public Regionalization (Lansing, Watertown, Delhi Township; Then Added Dewitt, Alaidon, and Bath Townships) Minnesota Small Private Regionalization (St. Michael, Albertville, Hanover) Both Captured Economies of Scale
8 Example: Performance Measures and Rewards Louisville, Kentucky Water Company Public Ownership with Public Operation Milwaukee Municipal Sanitation District Public Ownership with Private Operation Hamilton, Ontario Public Ownership, With Operation: Public, Private, Public
9 Beyond Privatization: Lessons From the Upper Midwestern United States and the Canadian Province of Ontario Conclusion: Values Are Important, but Performance Is a Separate Issue See this Paper for More Examples or the Primary Research Document at:
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