On the Road to Sustainability

There is a common discussion taking place across the United States today that may sound a bit different depending on where you live and what your local economic and political climate is, but the common underlying question is simply this: Is government operating with maximum effectiveness and efficiency to achieve long-term sustainability?

This question is being asked of our federal government, our state governments and our local governments. It is being asked across hundreds of government divisions and departments and it is being asked of the entire spectrum of public services including health, education, transportation and public utility service organizations.

For many of our country?s water, wastewater and stormwater utility organizations, the public?s interest in this question, and the increased involvement of key stakeholders, is an opportunity to communicate the value of the services the utility provides. Leveraging the opportunity to engage in this discussion and demonstrate the value being provided is an excellent way to enhance customer understanding and gain critical stakeholder support. One way to accomplish this is the utilization of ?effective utility management? (EUM), the water-sector utility industry?s new management initiative.

The Metropolitan St. Louis Sewer District (MSD) is the fourth largest wastewater utility in the United States serving 525 square miles including all 62 square miles of the City of St. Louis and 463 square miles (approximately 90 percent) of St. Louis County, including 92 municipalities. Annual operating revenue is approximately $250 million and MSD manages infrastructure assets with a total value of more than $2 billion. Currently, MSD serves a population of approximately 1.4 million. Like most utility organizations, delivering effective and efficient utility services and achieving long-term sustainability is critical to ensuring continued stakeholder support.

For MSD, one strategy the organization uses to help ensure sustained value for its customers is addressed by a charter requirement that the organization undergo an independent management audit every five years. Such examinations normally serve to evaluate the nature and quality of management decisions, operating results, and controls that ultimately support the effective and efficient delivery of services. Typically, a management audit is a comprehensive examination of an organization that seeks to identify problems or significant weaknesses, ultimately providing management with a tool to address and improve any problem areas. However, the MSD charter is silent regarding the specific areas that must be audited.

Desiring to obtain added value from the management audit process, MSD decided to begin their most recent management audit by utilizing the EUM framework as a launching point of the MSD management audit.


MSD is an innovative utility with a simple vision, ?Quality Service Always.? To provide consistent, high-quality service, MSD must use the water and wastewater industry?s best management approaches. With this in mind, the audit team established the following objective of the initial phase of the MSD audit: To review MSD?s status relating to the EUM standards and to develop an approach and plan that will enable MSD to move closer to an ideal EUM state.

About Effective Utility Management

EUM is a comprehensive approach to help utilities respond proactively to both current and future challenges. Developed by a consortium of six water and wastewater industry associations and the U.S. Environmental Protection Agency, EUM practices have been developed to support utilities as they seek to position themselves as successful 21st century service providers. The EUM process works to assure that a utility addresses the Ten Attributes of Effectively Managed Utilities (Attributes), which are at the core of the EUM process. As extracted from the Primer ?Effective Utility Management,? these Attributes, are:

  • Product Quality
  • Customer Satisfaction
  • Employee and Leadership Development
  • Operational Optimization (efficiency)
  • Financial Viability
  • Infrastructure Stability (management of assets)
  • Operational Resiliency (safety and security) ?
  • Community Sustainability (impact on the community and the environment)
  • Stakeholder Understanding and Support
  • Resource Adequacy (ability to serve the community in the long-term)

The management techniques that EUM considers the Five Keys to Management Success (Keys), which effectively managed utilities use to address the Attributes, are also defined in the Primer ?Effective Utility Management,? and include:

  • Leadership
  • Strategic Business Planning
  • Organizational Approaches
  • Measurement
  • Continual Improvement Management Framework


To accomplish the objective of this initial phase of the MSD management audit, the audit team worked with MSD management to conduct the EUM assessment in relation to the Attributes and Keys.

The audit team designed, managed, and facilitated an EUM assessment that included the following tasks:
Reviewing existing documents including measures, organizational charts, existing strategic and operating plans, customer survey results and financial information.

Conducting an introductory workshop with MSD senior management to assure a clear understanding of the project, develop a calendar, assign attribute teams and identify potential interviewees.
Interviewing key stakeholders including management, selected board members and rate commission members.

Conducting and analyzing an online survey of MSD management personnel addressing the EUM Attributes and Keys.

Helping Attribute champions and teams provide information and ideas concerning Attribute measures and core strategies.
Conducting focus group sessions with selected interdepartmental groups of employees to discuss their perceptions of MSD?s activities related to Attributes and Keys.

Conducting a two-day workshop with senior management directed toward the Attribute measures and activities.

Facilitating a workshop with senior leadership and the Attribute champions to address MSD?s approach to the Five Keys to Management Success.

Reviewing a preliminary list of suggestions at a workshop with senior leadership and the Attribute champions to evaluate priorities of potential suggestions and to determine those that would require further planning before implementation.

Documenting the EUM Assessment results in a final report.

Overall Observations

Overall, the audit team found the EUM framework to be an excellent structure to organize and initiate a water-sector utility management audit. For MSD, the results of the initial phase of the audit revealed that MSD is operating in accordance with the majority of the components of EUM. Specifically, while operating a very successful utility that provides excellent wastewater and stormwater services at rates that are relatively low compared to other communities, MSD utilizes a number of performance measures that address each Attribute and has business strategies relating to the various Attributes. MSD generally conforms with EUM in approaches to most of the Attributes.

Further, MSD focuses extensive efforts on customer satisfaction consistent with its vision of ?Quality Service Always,? which results in consistently positive customer survey results. In addition, MSD devotes significant efforts and much of its strategic plan to stakeholder communications. This is likely to become increasingly important as MSD implements its long-term capital improvement program, which will result in significant rate increases. While a number of findings and recommendations were developed that provided management with opportunities to elevate performance, overall the results obtained by the use of the EUM framework provided MSD management an excellent way to communicate performance internally across departments as well as externally to key stakeholders.


The EUM assessment for MSD resulted in 71 specific recommendations to move the organization closer to an EUM state. These recommendations have been reviewed by management, are prioritized and have become part of the management work program to improve an already excellent utility organization.

Darin Thomas serves as the Director and Gerald Wexelbaum serves as the Director of Strategy Services of Raftelis Financial Consultants Inc.?s management consulting division, SUNESIS.

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