CMAA Water Summit July 20, 2010

1. Integrated Project Delivery: Built to Last CMAA Water Summit July 20, 2010 James A. Parrott Executive Director

2. MSDGC Background • Population Served • 850,000 in Hamilton County, Ohio • 220,000 connections • Double Governance • Hamilton County Sewer District • Operated by City of Cincinnati

3. MSDGC Challenges • Aging Infrastructure • About 50% combined sewers • Some 150 years old • Multi-Billion $Consent Order • Plan submitted in 2006 • Conditional approval in 2009 • Phase 1 = $1.2B by 2019 • Stagnant/Failing Local and National economy • Unprecedented local layoffs (especially in government) • Affordability issues with residents

4. Key Facts • MSD is among the top 5 CSO dischargers in the US • MSD must submit a plan to USEPA by December 2012 for the Lower Mill Creek Remedy (location of our largest CSO) • MSD has until 2017 to submit Phase II Schedule

5. MSD’s Environmental Challenge Must control by 85%

6. How to Build a Consent Order Wet Weather Strategy Source Control Conveyance & Storage Product Control Strategy Phased Approach Phase 1: 2009 – 2019 Phase 2: Schedule to be submitted by 2017 Flexibility Controlled Spending Phase 1: $1.145B Credit for $300M of projects already built Phase 2: To Be Determined Affordability

7. Clock is Ticking • Submit Plan for Phase 2 including schedule and costs 2009 MSD received conditional approval of the Wet Weather Plan after three years of negotiations • 2011 • Evaluate alternatives to achieve overflow reductions of 2BG 2017 2009 2010 2011 2012 2017 2018 2010 Final legal action anticipated • 2012 • MSD will integrate results to arrive at a recommended plan to submit to USEPA • 2018 • MSD must achieve 2 BG overflow reduction in Lower Mill Creek

9. WWIP Phases & Workload WWIP Phase II Total167 Projects Schedule will be negotiated WWIP Phase I 70 Completed 45 New Projects 8 Annual Allowances

11. MSD Wet Weather Strategy Determines the Project Portfolio • Source Control • Removal of natural drainage from entering the system • Regional BMPs, Separate storm sewer installation • Conveyance & Storage • Tunnels, parallel interceptors, storage facilities • Real-Time control • Product Control • EHRT and peak flow enhancements to existing WWTP’s

12. MSD Wet Weather Strategy Implementation Hydraulic Grade Line

13. How We Got Started • Three phased PMC • GAP Analysis • Highlighted project risks, resource and process needs • Developing Process to Bridge the GAP • Master Program Management Plan • Implementation Plan and Monitor Progress

14. MSD Organization in 2006

15. Engineering Division Conventional “Cradle to Grave” Project Management Program Management and Monitoring operates in own silo

16. What We Know Now That We Didn’t Know Then… • Organizational structure change inevitable • What we did…. Tried to make incremental change • What we should have done…. Slash and Burn • Staff must: • Have sense of urgency • Be open to change • Obtain new skill sets • Or GET OUT OF THE WAY!

17. How We Needed to Change • MSD Manages Integrated Program • External Monitoring • Incentive based embedded staff • Business Case Evaluations • Project selection by Triple Bottom Line analysis • Separated Planning from Design/Construction • Where the rubber hits the road • Allows priority focus for Project Delivery

18. MSD Organization in 2010

19. Capital Programs Management Cross-Functional Responsibility and Imbedded Program Management Support with External Monitors

20. Environmental Programs Concentration on Sustainable Watershed Management

21. Current WWIP Profile Potential Sustainable Approach

22. Other Lessons Learned • Financial System Inadequate • Multiple systems needed to be integrated • Need analysis and decision support tools • Let Risk Management Drive Decisions • Justify projects and alternative selection inside a risk framework • Strengthen Asset Management principles • Communication • Internal and external tools necessary

23. MSD Risk Management • Comprehensive process integrating all enterprise risks • Corporate • Asset • Operational • Project Implementation • Process driven by MSD Financial Policies • Owned by Finance Manager

24. Other Lessons Learned • Let Risk Management Drive Decisions • Justify projects and alternative selection inside a risk framework • Strengthen Asset Management principles • Financial System Inadequate • Multiple systems needed to be integrated • Need analysis and decision support tools • Communication • Internal and external tools necessary

27. Sharing the Vision

28. Technology Drivers Where We Are Tactical Where We Are Going Strategic Integrated Management Workflow Integration through Document Control Watershed Management • Activity-Based • Document Management • Construction Coordination • Required Systems • Fully functional DMZ • Scheduling tool • Integrated financial management system • Forecasting and Earned Value tools • Asset management system

29. Built to Last Formula • Consent Order with Flexibility • Wet Weather Strategy that leverages infrastructure investments to create factor conditions that support community development/urban infill • Organization Structure that support integrated project management • Renewed focus on environmental programs that support the wet weather strategy • Financial and Risk Practices linked with strategic organizational performance Sustainable Organization – Financially and operationally stable Sustainable Infrastructure – Does not create future liabilities Sustainable Community – Maximizes benefits for all residents

30. Value CreationLeveraging MSD Investments

32. Questions? James A. “Tony” Parrott 513-244-1212 tony.parrott@cincinnati-oh.gov