Role: Co-leader and lead architect of restructuring Seattle’s utilities

• The creation of the highly integrated Seattle Public Utilities – unique in North America
• Integration to meet goals of efficiency, effectiveness and holistic environmental management
• Recognized as a national and international leader in water and solid waste

Details

The Opportunity

• The City of Seattle had four separate, well managed, environmentally-related utilities – electricity, water, drainage & wastewater, and solid waste.
• Question posed by Mayor Rice: Could these utilities operate more efficiently ($) and effectively in terms of products delivered, customer services and environmental management — if these utilities were partially or wholly combined?
• Approximately 3,500 employees out of a total City of Seattle employment of 10,000 worked in the four utilities – therefore, the answer to the question had real significance to all parties.
• A significant study was undertaken to answer Mayor Rice’s basic question – a study that was accomplished internally but transparently involving all the stakeholders rather than being delegated to external consultants.

Major Decisions

• The recommendation to the Mayor, accepted and implemented following the study was:
  • Combine water, drainage & wastewater, and solid waste into a new utility;
  • Keep electricity (Seattle City Light) separate
  • Join City Light and the new combined utility “at the hip” in customer services
• The new utility, named Seattle Public Utilities (SPU), was formed with a major emphasis on synergizing the relationships between drinking water, waste water, drainage and solid waste. Accordingly, the new organizational structure of SPU emphasized “cross-cutting” thinking and action throughout the utility
• Formerly separate internal functions within each of the four predecessor utilities were combined including finance, communications, IT, fleet mgt, warehousing and operations
• The customer service functions – service connections/disconnections, billing, and customer complaints – were combined into one unit for both Seattle City Light. Thus customers with one phone call could initiate service for all utilities when moving to Seattle

Outcomes

• One of Seattle Public Utility’s objectives was to reduce its work force by 15%, resulting in estimated savings of $1.5 million per year. This was to be accomplished over time without major reductions in force – instead earlier retirements and managing attrition were the main tools.
• Within months of the formation of Seattle Public Utilities, the US Government prepared to list Puget Sound chinook salmon as an endangered species. The City was able to respond decisively and comprehensively because of the strength of the combined utility. New flow regimes for the Cedar and Tolt rivers were enacted to further protect salmon. A Habitat Conservation Program compact was negotiated with the tribes and the US Government to enhance salmon recovery while protecting the Cedar.
• New conservation, waster reduction and environmental protection programs were enacted owing to synergies within SPU between water and waste. For example, “salmon friendly” techniques for stream-side gardening, reduction in lawn clippings and pesticides.
• Synergies between drinking water, wastewater and drainage infrastructure planning and management gave rise to a more sophisticated and effective asset management system.
• Much stronger relationships with suburban communities were built providing both a consensual approach to development of water conservation and strengthened mechanisms for regional water governance. During this time, the Central Puget Sound Water Suppliers Forum was established which continues to this day to facilitate coordination and planning between the Tacoma, Seattle and Everett water systems and their suburban customers.
• The size and strength of Seattle Public Utilities and a very good working relationship with the Mayor and the City Council allowed Seattle Public Utilities to pioneer the Design-Build-Operate (DBO) approach to treatment plant development in the US. About $80 million dollars were saved using this approach on two plants, which reduced the upward pressure on rates and strengthened the positive relationships with suburban customers.
• Within three years, Seattle Public Utilities came to be recognized as one the leading US utilities. International recognition followed.