Cincinnati’s city manager has announced the Metropolitan Sewer District (MSD) and the Greater Cincinnati Water Works (GCWW) will no longer share administrative services.
Harry Black provided the reasoning for his decision Tuesday in a memo to Mayor John Cranley and city council members.
“The partial sharing of select MSD and GCWW administrative functions, which began three years ago, was well intentioned but has not proven to be in the best interests of either entity long-term, or their respective customers,” Black wrote. “This experiment has likely resulted in some savings; however, mechanisms were not put in place to capture savings in a quantifiable manner.”
Black also referenced the tense relations between the city and Hamilton County regarding MSD issues. The disagreements have led to litigation in federal court and plenty of harsh rhetoric between the two sides.
“The acrimonious relationship with (sic) Hamilton County related to MSD operations and city-owned sewer assets has had an adverse impact on GCWW,” Black wrote. “The county’s increasing entanglement with MSD operations has interfered with the city’s ability to realize the anticipated savings from the physical consolidation of GCWW and MSD under one roof.”
Black said there will be no net budget impact. He said in the long term it will increase revenue opportunities, reduced ratepayer pressure and improve the performance of both utilities.
He believes the “decoupling” will allow MSD to focus more on improving operations while focusing on federal consent decree work required to stop sewer overflows into local streams.
Black said the city will establish a “shared services area bureau” within the water works.
“Greater Cincinnati Water Works is a national leader in supplying utility services, which presents a revenue generating opportunity that should be immediately grown as an enterprise center,” Black wrote.
Some of those opportunities include: customer billing services, water service enterprise expansion, internal water treatment systems, and water and sewer line insurance.
In November 2014, WVXU reported the city was saving money by merging the administrative functions of the Greater Cincinnati Water Works, the Metropolitan Sewer District and the stormwater utility. Then officials told a city council committee the savings were projected to be $55 million during the next decade. That was less than the initial feasibility study suggested, but officials were still crunching the numbers.
At the time, the combined utility Director, Tony Parrott, said “so far, so good.”
Council Member Wendell Young helped guide the merger effort through Council in 2011. He said in November the combination of administrative functions for the three utilities is an example of shared services actually being implemented instead of just talked about.
