Friday February 7, 2014
Louisville Water and MSD are ready to take the next step in bringing together some of the support functions at each organization. Sharing services as part of the One Water concept will provide for more efficient operations, reduce the size of future rate increases and ultimately save customers money.
During a joint board meeting of the Board of Water Works and the MSD Board, Louisville Metro Mayor Greg Fischer urged the boards to quickly approve sending a Comprehensive Interlocal Agreement to Kentucky Attorney General Jack Conway for his approval.
The Mayor’s recommendation comes after eight months of critical analysis by Louisville Water and MSD, and by a third party evaluation of their work.
Louisville Water and MSD are not forming a new entity but instead will create coordinated teams of employees who can reduce duplication and deliver superior customer service at a lower cost.
Louisville Water and MSD have identified five functional groups and one specialty area to start with for the One Water concept: Procurement, Fleet, Human Resources, Information Technology, Customer Service and Energy Savings.
While bringing together these first five work functions, the organizations will work to identify other opportunities to share services. Implementing the Comprehensive Interlocal Agreement can produce savings of up to $14 million by 2019. Much of the labor savings will come through job attrition. Louisville Water and MSD will also save money with combined purchasing and identifying energy savings.
“Our customers expect a high-quality, safe supply of drinking water,” said Jim Brammell, President and CEO of Louisville Water. “Moving forward with this One Water concept allows us to continue with that excellent quality and service while working with MSD to achieve savings. Both Louisville Water and MSD provide a critical service to the community. Working more closely together will allow for reduced rate increases in the future while continuing to improve the product we offer.”
A Due Diligence Team that included senior leadership from Louisville Water and MSD recommended this approach to Mayor Fischer after critically reviewing the 2012 findings of the Mayor’s Utility Task Force. Mayor Fischer had an outside thirty party review the team’s work and the party agreed that shared services could produce significant savings.
Both organizations and Mayor Fischer believe moving forward with the Comprehensive Interlocal Agreement strategy is the logical first step for the One Water concept. It provides the ability for significant savings and protects the unique governance structure for Louisville Water.
At its February meeting, the Board of Water Works will be asked to accept the recommendation from the Louisville Water and MSD team and then send the Comprehensive Interlocal Agreement to the Attorney General. Upon approval, implementation to combine Procurement and Fleet Management would begin by the summer as well as the analysis on energy savings.