Improving Financial & Operational Performance in Water Services

Financial and Operational Performance Improvement Programe (FOPIP) Danube Water Conference 2017, Vienna, May 18 Training session on Local governments role in planning investments and improving performance of WSS services Trainers: Mr. Jane Vrteski, ADKOM, Macedonia and Ms. Aida Jusufhodzic, AQUASAN, B&H

Learning objectives Session s learning objectives: To familiarize with the purpose, concept and methodology of the Financial and Operational Performance Improvement Programme (FOPIP). To be able to prioritize the Management Areas, those are in need of improvement. To familiarize with the development of the Improvement plan for prioritized management areas.

The need for FOPIP Inadequate HRM low productivity; Low operational efficiency staff performance not evaluated; rising costs; high level on NRW; unreliable and low level of service. insufficient internal communication. Tariffs below cost-recovery: Inadequate customer relations insufficient revenues; poor maintenance; under-investment in infrastructure. unsatisfied customers; unpaid bills; tools for customer relations not used.

Why FOPIP? It is a systematic approach for achieving effective utility management that can help PUCs improve their services, increase community support, and ensure a strong and viable utility long into the future. It is often required by international financial institutions, to improve a utility s performance, and capacity to sustain that performance, prior to becoming eligable for international funding.

Key Management Areas of improvement Water resource adequacy Business planning and budgeting Product quality Financial manage- ment Mapping and measure- ments Effective Utility Management Non- revenue water Tariff policy Infrastru- cture stability Organistion and employees Customer relations

Conducting assessment and developing Action plan 1 Assessment of current situation regarding the institutional, financial and operational performance, identify the problems and their causes; Prioritisation of key areas of improvement according to importance of each area to the Utility. Develop an overall and prioritized Utility Improvement Plan.

Conducting assessment and developing Action plan 2 Definition of real and measurable objectives; Proposal of activities/measures; Allocation of responsibilities for the proposed activities; Defining a time-frame for the actions; Assessment of the necessary lines of communication; Assessment of the optimal ways to measure and analyse progress made (selection of key performance indicators).

Benefits of FOPIP It can educate utility staff and stakeholders regarding the range of responsibilities faced by Utility managers. It can provide an additional framework for Utility s long- term planning efforts.

Plan-Do-Check-Act methodology of FOPIP

Interactive training exercise Self-assessment for PUCs Assessing the current level of achievement for each management area of Public Utility Company Tool: Self-assessment sheet for PUCs

Step 1 - Rating Areas 1. Water resource adequacy and product quality (e.g. clean & safe water) Performance score 15 a. The system is able to meet the water needs of its customers now and for the reasonable future (in terms of quantities for customers). 1 2 3 b. The utility or community has performed a long-term water supply and demand analysis. 1 2 3 c. The utility regularly monitors water quality, in accordance with regulatory requirements. 1 2 3 d. The system is in compliance with regulatory requirements related to water quality. 1 2 3 e. The system is in compliance with service reliability requirements (24 hours service). 1 2 3 f. Rural water systems are under management and control of PUC. 1 2 3

Performance score:Summarize the score for each management area and look at the table below to see the overall performance score for PUC low, medium and high. No. Management area Low Medium High 1 Water resource adequacy and product quality 1-6 7-12 13-18 2 Network mapping and measurements 1-9 10-18 19-27 3 Non-revenue water 1-6 7-12 13-18 4 Infrastructure stability 1-4 5-8 9-12 5 Customer relations 1-8 9-16 17-24 6 Organisation and employees 1-9 10-18 19-27 7 Tariff policy 1-5 6-10 11-15 8 Financial management 1-3 4-6 7-9 9 Business planning and budgeting 1-5 6-10 11-15

Performance score Performance score (Low - Medium - High) Rank priority (Low Medium - High) Key No. Management Area Description Management Area a. The system is able to meet the water needs of its customers now and for the reasonable future (in terms of quantities for customers). The utility or community has performed a long-term water supply and demand analysis. The utility regularly monitors water quality. The system is in compliance with regulatory requirements related to water quality. The system is in compliance with service reliability requirements (24 hours service). Rural water systems are under management and control of PUC. The utility has electronic maps of primary water network developed. The utility has electronic maps of secondary water network developed. The utility has electronic maps of sewage network developed. The utility has human capacities for mapping and GIS. Water meters on all water connections established. Water meters are regularly maintained and replaced. Flow meters on water intake established. The utility understands, has documented, and monitors key operational aspects of the system (e.g., pressure, flow). 1 Water resource adequacy and product quality b. c. d. H e. f. a. 2 Network mapping and measurements b. c. d. e. f. g. h. M

Step 2 - Ranking Areas Performance score (Low - Medium - High) Rank priority (Low Medium - High) Key No. Management Area Description Management Area a. The system is able to meet the water needs of its customers now and for the reasonable future (in terms of quantities for customers). The utility or community has performed a long-term water supply and demand analysis. The utility regularly monitors water quality. The system is in compliance with regulatory requirements related to water quality. The system is in compliance with service reliability requirements (24 hours service). Rural water systems are under management and control of PUC. The utility has electronic maps of primary water network developed. The utility has electronic maps of secondary water network developed. The utility has electronic maps of sewage network developed. The utility has human capacities for mapping and GIS. Water meters on all water connections established. Water meters are regularly maintained and replaced. Flow meters on water intake established. The utility understands, has documented, and monitors key operational aspects of the system (e.g., pressure, flow). 1 Water resource adequacy and product quality b. c. d. H H e. f. a. 2 Network mapping and measurements b. c. d. e. f. g. h. M H

Step 3 - Match Results 1 High Performance score Medium 2 Low Low Medium High Ranking (Priority)

Step 3 - Match Results

Step 4 - Management Area Improvement Plan List your top three Priority Management Areas these should be drawn from the self- assessment activity. List the Improvement Actions that you will undertake to address the priority management areas you should have at least one action for each priority management area (actions may address multiple management areas). Priority Management Areas: 1. Network mapping and measurements Improvement Actions 1. To develop electronic maps of secondary water network 2. 2. 3. 3.

Step 4 - Management Area Improvement Plan Improvement Action: To develop electronic maps of secondary water network Description: Action Management Area(s) addressed Objective(s) Timeline: Start date Milestones Target completion date Responsible Party (or Parties): To develop electronic maps of secondary water network Network mapping and measurements Relevant Resources (on-hand or needed): Challenges to Address: Review Process: Performance indicators or measures Status reports and updates frequency/cycle Other Notes:

Thanks a lot for your attention!