Wilmington, City of
Organizational Assessment and Strategic Planning
The City of Wilmington (City) has water, sewer, and stormwater public utility services which are provided through its water/sewer utility enterprise fund. Over the last several years, the poor financial condition of the utility fund has required inter-governmental support to maintain financial viability. The City’s utility organization, like many public utility organizations around the country, is challenged by increased regulatory requirements, aging infrastructure, and reduced revenues.
For the City, providing water services to areas outside the City and wastewater treatment services to large areas of New Castle County, add further complexities in assuring financial sufficiency. As a result, the Mayor and City Council decided to engage a consultant to conduct a comprehensive assessment of the City’s Water and Sewer Enterprise Fund to identify opportunities to strengthen the financial sustainability of the City’s utilities to enable the water and sewer enterprise fund to regain its ability to be self-supporting.
To accomplish this objective, the RFC consulting team focused its assessment and evaluation in the following four focus areas: governance, finance, management, and operations. The assessment sought to evaluate how the policies and procedures, organizational structure, management approach, and operational practices of these four focus areas impact the City’s ability to achieve the desired long-term financial sustainability of its utilities. The project team utilized EUM which addresses the 10 Attributes of effectively managed water sector utilities and the 5 Keys to Management Success.
RFC conducted a series of workshops, stakeholder interviews, employee focus group meetings, and a management-level employee survey, as well as reviews of key reports, planning documents, and financial statements. From these efforts the project team assembled an inventory of existing issues associated with current governance, finance, management, and operations practices being utilized by the City which served as the basis for comparisons to industry best practice. Four focus area teams were then created that included members of the consulting team and City staff to compare how the City’s current approach to governance, finance, management, and operations either enhances or impedes the City’s ability to address specific challenges, obstacles, and changes necessary to strengthen the overall utility financial health.
This engagement resulted in a series of recommendations that will:
- Enhance communication and cooperation between the branches of City government and between the City of Wilmington and New Castle County
- Strengthen the financial position of the water and sewer enterprise fund through the establishment of reserves and enhanced financial management
- Improve the overall management of the utility through implementation of a series of recommendations designed to bring the utility closer to the ideal state as compared to the Keys to Management Success as they are defined by EUM
- Enhance operations through more effective performance measurement and the implementation of recommendations addressing each of the 10 Attributes of an Effectively Managed Utility
Privatization Procurement Assistance
RFC also worked with the City on privatization procurement for their wastewater treatment plant operations, maintenance, and minor capital improvement. RFC was part of a team that drafted the request for proposals. The solicitation resulted in several proposals from private operators. RFC assisted the City in evaluation of the proposals and preparation of a privatization contract. Subsequently, the firm that received the contract was sold and RFC performed a due diligence analysis to ensure that the contract could be assigned to the new entity. Over the course of the contract, the private contractor has sued to re-negotiate the contract pricing and terms. RFC has supported the City through these negotiations with their contractor.