Wednesday May 16, 2012
The Advisory Group appointed by Mayor Greg Fischer to identify opportunities for Metro Public Works, Louisville Water and MSD to more closely work together to improve efficiencies and cost savings presented its recommendations to the Mayor at the Group’s final meeting on Tuesday May 15.
The recommendations follow five months of public hearings and research by Black and Veatch, a national engineering consulting firm.
The Advisory Group’s recommendations include inter-local agreements in the short term between the three agencies on purchasing, fleet management and back-office systems and then a consolidation of MSD and Louisville Water within five years. The potential annual net savings range from $14 - $24 million depending on whether inter-local agreements are utilized or there are consolidated operations with Louisville Water and MSD.
The Advisory Group included seven members with extensive experience in utility operations, financial management and legislative issues. Former Louisville Water President John Huber chaired the group. The Mayor appointed the panel in January after the state audit of MSD last December.
The Mayor plans to spend the next 60 days reviewing the group’s findings. Mayor Fischer praised the Advisory Group members and called the report “very thorough” and said it provided the type of data needed to make a decision. The Mayor said he believes consolidation between Louisville Water and MSD, which would occur incrementally over the next five years, is the best option to deliver stronger, leaner and more efficient services to the citizens of Louisville. But Fischer cautioned that a consolidation or partnerships wouldn’t be completed by just “snapping our fingers.”
Inter-local agreements would require approval from the boards of Louisville Water, MSD and the Attorney General. A consolidation of MSD and Louisville Water would also require legislative approval.
“The Board of Water Works looks forward to reviewing the Advisory Group's recommendations and Mayor Fischer's decision,” said Marita Willis, Board of Water Works Chair and Vice-President at PNC Bank. “We are interested in solutions that provide efficiencies and savings while not compromising the outstanding quality and service Louisville Water provides. The company has a 152-year tradition of quality and innovation. We are mindful of the careful consideration and analysis that must take place before we can proceed.”
“The task force, working with Black and Veatch, has presented an opportunity for cost savings and improved customer service,” said Heitzman. “Throughout the process and moving forward, we must ensure that any solution does not impact the safe, high-quality supply of drinking water and outstanding customer service Louisville Water provides.” “Our customers expect us to chart a course that will benefit the community for decades to come.”
If Louisville Water and MSD consolidate, full implementation would not be achieved until at least 2017.