WWTA – Sell It Or Fix It?

Friday, February 8, 2019

There is a debate occurring in the media about what would the best approach for managing the Hamilton County`s sewage system going into the future. Should the WWTA be (1) sold /contracted or (2) should the WWTA retain control of the sewage system if it can be fixed?

I am sure the county mayor, the WWTA Board of Directors and the WWTA Management team would say they are in control of the issues and should be allowed to continue as they have been doing. Too many of their customers, the public and some county/state officials feel the WWTA performance has been considered dismal at best and a change is needed.

What is broke at the WWTA?

Hamilton County WWTA is faced with the following issues: 

(1)  A WWTA management structure which is a quasi government organization that has no clear oversight or checks and balances within the county government.

(2) Capital improvements for an aging sewer system infrastructure.

(3) Additional sewer system piping and treatment capacity is needed for growth in the county. 

(4)  Environmental Permit (NPDES) violations causing a moratorium on county growth.

(5)  A looming Consent Decree agreement with the Federal  EPA and Tennessee Department of  Environmental Compliance with a cost of $200 million plus expensive fines. 

(6) The public and customers that have lost confidence in the WWTA to properly operate and maintain the sewer system. 

(7) It is becoming obvious to many that the WWTA has failed to establish any critical strategic goals, priorities, and tactical plans focused on the several critical issues:

Overall Short /Intermediate /Long range planning: That is why the situation is an emergency

Reduction of Sewage System Overflows strategic planning: Experienced 29 pills (2 million gallons sewage) 

• Development of a strategic plan for the EPA consent decree: WWTA has been negotiating with EPA for two years and now it has become critical and an emergency. 

Work practice improvement: Improper handling of diesel spills at Snow Hill Road pump station.

Customer / public perception and trust at an all time low: Poor handling of customer complaints and lack of transparency on sewage treatment plant issues. 

The leadership established goals for the WWTA outlined in the official 2019 Hamilton County Operating Budget (County webpage) included 11 goals for 2018 /2019. The goals (internal not strategic) were not for the critical issues I have outlined. They were very misguided and focused on improved efficiencies. 

The #1 goal listed was “Distribute the standard details and specifications for construction of sanitary sewers to developers and contractors.” It is curious as to why the focus on supporting the developers and contractors when the system is currently limited thru a moratorium on additions. The leadership clearly has misguided priorities. Developers and contractors seem to be more important than the people of the county or their customers. 

Sell it?

This option has been proposed by some public officials as early as 2016 and residents that are unhappy with the lack of proactive performance by the WWTA. 

There are several benefits of privatization. (1) It is an opportunity to turn a fixed asset into cash. (2) There can be some savings on an operating basis from a company with well established processes,(3)  and it transfers the environmental problem, like SSO`s. (4) Thru negotiations there will potentially be a rate increase for the new plant, however fixed rates for the future can be established with only inflationary increases based on national indexes (5)  It can encourage economic development if the negotiated contract can establish a fixed rate structure for the future so people and companies will knowing that their rates will be fixed for future years.

There are several issues with the selling or contracting the sewage system though. (1) The process will probably take two years to accomplish which impacts the EPA Consent Decree negotiations, (2) The issue of customer rates and services will be a difficult negotiation. (3) Legal issues of the value and extent of the contracts with the Chattanooga City Waste water organization will be lengthy. (4) A county regulatory group will need to be established to control and regulate the company.

This option requires an RFP for a sale or contracted business to take over. The WWTA has already indicted they will not pursue this option. It will require the county mayor to initiate the process, but don’t hold your breath for that because that would implicate him in the failure of WWTA and that is political suicide. 

Fix it?

Actually I think this option may be the only one that is achievable in the short term. I think the existing WWTA organization probably has some very capable people within the ranks. However the Board and the executive leadership team are failing miserably at developing strategic goals and establishing the values for the organization. The Board should be looking to the future and establishing the vision for the WWTA in the planning for the future. They have clearly failed at that and a new Board needs to be established. 

The new Board should include people abler to establish a future vision and help the organization focus on the services they provide, good environmental stewardship, and customer empathy and be able to include the public in their decisions. Hey are servants of the public.

The current WWTA structure within the county government will need to be changed so that there are some clear lines of oversight to keep the WWTA leadership team focused on the goals and core values that the new Board establishes for them. 

The WWTA leadership team should have experience in leading / managing a large and complex system. This requires a leader with experience in dealing with both the technical issues, major construction projects as well as the ability to listen to the customers and the public.  

Unless there is a willingness by the county mayor to admit there is a problem and allows / asks for help in making changes to the WWTA I assure you it will not get fixed. If not then it will be time to sell it or contract the WWTA to someone who can run it properly.

Donald G. Johnson      

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