Montgomery County Environmental Services

Kettering, Ohio, United States

KPI Development and Strategic Planning

Montgomery County Environmental Services (MCES) is a progressive utility organization providing water, wastewater treatment, solid waste, and recycling services to more than 250,000 residents and 6,000 businesses in the Dayton, Ohio area. With a focus on performance management, MCES was interested in developing and implementing Key Performance Indicators (KPIs) to: provide measurement of how they are performing; be utilized for future benchmarking; and guide procedural adjustments for the organization. Raftelis assisted MCES with the development and implementation of these KPIs. Together, we identified five organizational goals, and developed KPIs for each goal along with critical success factors for successfully achieving the stated organizational goals. A final set of KPIs were selected and communicated to the organization for implementation. These KPIs will provide MCES and its staff with metrics to help guide their activities in the future.

MCES understands that a successful strategic plan helps organizations to drive decision making and lead to continuous improvement. So, as part of their overall commitment to performance management, Raftelis also assisted MCES with the development of a strategic plan for the organization.

Working with MCES leadership, we created a blueprint for performance management implementation and worked with organizational leadership to institutionalize a culture of strategic planning and continuous improvement. Performance indicators were aligned to specific strategies using tactic workplans, providing a platform for accountability and measurement of success. The Raftelis team also built a customized performance management tracking tool that MCES can use to monitor performance and progress towards its stated organizational goals.

Using the organization’s strategic planning framework, tactic workplans, and performance management tool, MCES is now able to demonstrate success both internally and externally and identify areas for strategic improvement.

View Strategic Plan


Financial Planning and Rate Studies

Raftelis has been engaged with MCES since 2016 on various financial planning and rate studies. The initial engagement was to develop a comprehensive capital and charge study which resulted in an evaluation of the utility’s current financial position and made recommendations to position the utility for long-term fiscal stability. MCES identified significant capital needs to address aging infrastructure and to deliver reliable and safe service throughout its service area.

The capital and charge study involved a comprehensive review of the utility’s financial performance over the past 10 years as MCES dealt with significant reductions in water sales that caused revenue stagnation despite rate increases. Raftelis worked with County and utility staff to develop financial policies that become guidelines for the financial plan, rate alternatives, and long-term decision making. A comprehensive financial planning, cost-of-service, and rate design model was developed that allowed County staff to explore multiple rate structure scenarios. Final rate and charge recommendations include a new, capital-specific charge aimed to recover a portion of the long-term capital needs of the systems.

Raftelis worked with MCES’s communications department to develop an assortment of cross-platform public outreach materials to support the updated rate structure. These items included bill stuffers, website content, FAQ’s, and an online bill calculator. At the conclusion of this study, the County received approval on a five-year plan of water and sewer rate increases.

Raftelis has subsequently been retained by the County for on-call financial services that support the continued implementation of the rate recommendations. Additionally, Raftelis has developed wholesale models that the County is using to develop new long-term agreements with its wholesale customers.

Interjurisdictional Negotiations

Raftelis worked with County administration and MCES staff in 2016 and 2017 while the County was in negotiations with the City of Dayton on a new long-term water service agreement. At the expiration of a 50-year service agreement, the City and County desired to enter into a new water service agreement that would allow both parties to have confidence in the equitability and long-term sustainability of the agreement.

Raftelis worked in collaboration the County administration, City officials, and MCES staff through multiple workshops, meetings, and conference calls to evaluate a new wholesale cost-sharing model and water service agreement. Raftelis also developed a financial feasibility evaluation model that compared the long-term costs of service as a customer of the City with the costs of constructing a new water treatment plant. These tools helped the County reach an agreement with the City on a new long-term water agreement that was executed in 2018.

Raftelis continues to work with the County in reviewing the annual rate updates under this agreement.

Solid Waste Rate Study

Raftelis assisted MCES with a two-phase, solid waste rate study. The first phase of the study included three components: 1) an information technology and business systems review; 2) solid waste rate benchmarking; and 3) rate development and financial planning. The primary task under the information technology and business systems review was to perform an audit of the County’s billing system. MCES was concerned that it wasn’t billing all of its customers and that it may have been incorrectly billing some of the customers that it was billing. One of the complicating factors is that MCES must rely on private haulers for billing information. The objective of the solid waste rate benchmarking was to identify the way other solid waste districts in Ohio and across the country charge for the services provided. MCES recovers about half of its revenue from tipping fees and half from annual property charges. The third component of this phase of work was to develop a multi-year financial plan and model for the solid waste enterprise fund. The model will be used to evaluate alternative charge methodologies and, ultimately, will become a financial planning tool which MCES uses for annual budgeting and capital planning.

The second phase of the study was to develop a customized software solution that minimizes the manual effort MCES employees need to make to ensure customers are being correctly charged. The system involves automatic incorporation of data from private haulers, coordination with tax database systems, and County accounting and budgeting software.

This study will help to ensure that the solid waste enterprise is financially stable into the future.

Asset Management

In 2017, Montgomery County Environmental Services (MCES), which serves over 250,000 people, promised ratepayers they would begin an aggressive capital spending plan to reinvest in water and sewer infrastructure. This required the development of MCES’s Enterprise Asset Management (EAM) program to help support the capital improvement projects being proposed. Raftelis provided MCES staff augmentation to develop internal processes and controls.

Phase I of the project required organizational development of engineering services, improved system planning, project delivery, asset management implementation, education, and project tracking controls in the CMMS Cityworks Program. A critical element of this work required development of processes for improved collaboration between Engineering, Operations, IT, Finance, and Purchasing. Ensuring involvement of upstream and downstream internal customers was critical to the success of this initiative. During Phase I, Raftelis introduced LEAN transformation philosophy throughout multiple departments. Core business functions and critical processes were identified to ensure proper procedures and standards were documented. Various MCES team members performed self-audited department assessments; Raftelis used these findings to develop an organizational restructure plan that would promote culture transformation.

Phase II focused on EAM process improvement and monitoring. Raftelis assisted MCES with aligning engineering and operations employee skill sets and resources to improve the organization’s capacity to support its core business functions. More substantially, it was during Phase II that frameworks and workflows were developed to create an EAM Department and Engineering Planning Group. With the new organizational structure in place, staff performed process mapping of core project management functions and processes.

Additionally, Raftelis assisted MCES in implementing a new CMMS Data Management Strategy and established a tracking mechanism for key project management data in Cityworks and ESRI GIS.

Within a short time, the team identified several initiatives that needed to be addressed such as development of necessary SOPs, CMMS data input, work order tracking, workflows and guidelines, process improvement quality control standards and practices. Ultimately, the focus to implement improved processes and operations expanded to all MCES enterprise asset management operational practices.