Objective and Approach

OBJECTIVE

The purpose of this project was to develop a framework to assist municipal decision-makers with evaluating ownership and management alternatives for retail water distribution systems.

Our framework assesses three scenarios for changing the ownership and management structure of a publicly owned water system:

1. CIP: Continued public ownership with implementation of an internal program to increase operational efficiency, referred to as a Continuous Improvement Program.
2. PPP: Outsourcing operations and maintenance responsibilities to a private company through a contract, referred to as a public-private partnership.
3. Asset Sale: Selling the water system assets to a private company.

For systems currently under private ownership, our framework assesses the implications of public acquisition of the water system, or municipalization.

Our intent is not to recommend one ownership model over another, given the wide diversity of circumstances and priorities at the local level. Rather, our framework is intended to promote a systematic decision-making process, identifying potential tradeoffs between different management objectives and recommending actions to improve performance under each alternative.

APPROACH

To identify key considerations associated with each decision scenario, our framework identifies ten management objectives that decision-makers should consider in determining which water system ownership model best addresses local priorities.

For each decision scenario (CIP, PPP, asset sale, or municipalization) our framework evaluates the performance of the associated ownership model in addressing each of the ten objectives. Where applicable, the framework recommends actions that can be taken to increase the likelihood of attaining each management objective.

Our framework is informed by four primary research elements:

1.A comparative analysis of the public and privately owned water systems operating in the City of Thousand Oaks, California
2.Legal research conducted by students at the University of California Los Angeles School of Law
3.Interviews with water sector experts, including public officials, water industry executives, utility managers, regulatory officials, and non-governmental research and advocacy personnel
4. An extensive literature review