Identifying trends and relationships between key performance indicators to aid municipal mangement and decision making

Schoeman, Stephanus Johannes (2012-12)

Thesis (MScEng)--Stellenbosch University, 2012.

Thesis

ENGLISH ABSTRACT: South African municipalities are under pressure to improve the current state of the water andwastewater service delivery industry. Knowing that there exists a need for improvement within the municipal water and wastewater industry, the Department of Water Affairs (DWA) launched a municipal strategic self-assessment (MuSSA) initiative to evaluate the business health of the industry. MuSSA asks high level technical management staff five key questions about sixteen key business attribute areas. This study seeks to determine if theMuSSA data can be used to aid municipal decision making, by way of drawing correlations between key performance indicators contained in the MuSSA questions. The correlations are to bring forth areas thatmust be focussed on to improve selected attribute areas requiring attention within municipalities. Three areas have been chosen from theMuSSA data to be investigated in this research project namely; (i)staff skill levels and capacity, (ii)non-revenue water and (iii)the execution of planned water services activities. In the MuSSA questionnaire there are questions addressing each of (i), (ii) and (iii) to determine the municipality’s performance in each of the three areas. Non-parametric statistics are used to determine with which of the MuSSA questions’ answers the relevant questions’ answers significantly correlate for (i), (ii) and (iii). Engineering judgement and expert opinion are used to determine if the questions correlating with the relevant questions for (i), (ii) and (iii) either affect, are affected by or have no relation with the question. These results are then organized using a flow diagram and are discussed in detail by way of a bivariate histogramof each correlation. The investigation revealed that municipalities not having sufficient technical management capacity are not performing well on at least one of the five questions asked on eleven of the sixteen MuSSA business attributes. The skill level of water and wastewater treatment works staff were found to be strongly affected by technical management capacity and skill, water services planning and financial sustainability of the organization. Municipalities training technical management and operational staff showed a high percentage of skilled operational staff employed at treatment works. Water and wastewater treatment works staff capacity are very dependent of the level of skill and capacity of technical management employed by the municipality. Municipalities having appropriate budgets and funding to appoint and train staff showed a tendency to be better at operational staff capacity building than those lacking funding. The reduction of non-revenue water (NRW) showed strong correlations with technical management and network operational repair staff skills and development. Municipalities employing staff with correct skills and experience combined, with commitment from management to reduce NRW by way of monitoring and practicing of pressuremanagement programs, significantly reduced NRW percentages. Equally crucial to the reduction of NRW, as revealed from the investigation, is the practicing of infrastructure asset management within the municipality. It was concluded that municipalities should strive to reach a NRW percentage of 30% or less to become financially stable, due to correlation between funding of routine operations and building up of cash reserve versus NRW percentages. Municipalities wanting to improve the execution rate of planned water services activities are recommended to address, among other factors, technical management skill levels and capacity. Municipalities lacking technical management skill and capacity reported a low percentages of planned activities being executed. Also of high significance, is the technical operational staff skill levels and capacity, due to their involvement in the execution of planned activates. The involvement of council members in water and wastewater planning and the reporting of data and issues to council greatly enhancesmunicipalities’ abilities to execute planned activities. This can mainly be contributed to increased funding in situations where council members support planned projects. The lack of funding was found to be a major inhibitor of the execution of planned activities. Even though a great deal of municipalities indicated that they are effectively spending allocated budgets, this positive indication is not seen in the percentage municipalities executing planned activities and leads to the conclusion that there is a lack of funding. Municipalities taking actions in other areas of their business such as infrastructure assetmanagement and planning were more effective at executing planned activities. In all, it was concluded that technicalmanagement and operational staff skill levels and capacity need to be present for amunicipality to function properly. Municipalities also are in need of funding to execute planned activities and need to become financially self sustainable. One way of working towards the goal of financial self sustainability is the reduction of NRW percentages. The data from this investigation shows great similarity with the literature consulted on the current state and functioning of South African municipalities. The statistical analysis of the MuSSA data accurately revealed correlations among key performance indicators in municipalities. The conclusion can be drawn that investigation of correlations amongMuSSA questions can be used to help aid municipal decision making.

AFRIKAANSE OPSOMMING: Suid-Afrikaanse munisipaliteite is onder druk om die huidige toestand van die water en afvalwater dienslewering te verbeter. Met die wete dat daar ’n behoefte vir verbetering in die munisipale water en afvalwater bedryf is het dieDepartement vanWaterwese ’n munisipale strategiese self-assessering (MuSSA) projekte geïnisieer omdie welstand van die bedryf te evalueer. MuSSA vra hoë vlak tegniese bestuurs personeel vyf kern vrae oor sestien sleutel besigheids aspekte. Hierdie studie poogomvas te stel of dieMuSSA data gebruik kan word om munisipale besluitneming te help verbeter, deur middel van die evaluering van korrelasies tussen die sleutel prestasie aanwysers soos vervat in MuSSA vrae. Die korrelasies bring na vore gebiede waar op gefokus moet word om geselekteerde kenmerk areas binne munisipaliteite, wat aandag vereis, te verbeter. Drie areas uit die MuSSA-data is ondersoek in hierdie navorsings projek naamlik; (i) personeel vaardigheidsvlakke en kapasiteit, (ii) nie-inkomste water en (iii) die uitvoering van die beplande waterdienste aktiwiteite. In die MuSSA vraelys is daar vrae wat elk van (i), (ii) en (iii) aanspreek om die munisipaliteit se prestasie op die drie gebiede te monitor. Nie-parametriese statistiek word gebruik om die oorblywendeMuSSA vrae wat se antwoorde met die relevante vrae se antwoorde korreleer vir (i), (ii) en (iii) vas te stel. Kundigheid en oordeel van ingenieurs word gebruik om te bepaal of die vrae wat korreleer met die relevante vrae vir (i), (ii) en (iii) die relevante vraag beïnvloed, beïnvloed word deur die relevante vraag of geen verhouding het met die relevante vraag nie. Hierdie resultate word dan georganiseer met behulp van ’n vloeidiagram en word in detail bespreek deur middel van ’n tweeveranderlike histogram van elke korrelasie. Die ondersoek het aan die lig gebring dat munisipaliteite wat nie genoegsame tegniese bestuurs kapasiteit het nie swak presteer op ten minste een van die vyf vrae van elf van die sestienMuSSA besigheid eienskappe. Die personeel vaardigheidsvlakke van water en afvalwater behandelings werke word sterk beïnvloed deur die tegniese bestuurskapasiteit en -vaardigheid, waterdienste beplanning en die finansiële volhoubaarheid van die organisasie. Munisipaliteite wat opleiding van tegniese bestuur en operasionele personeel uitvoer het ’n hoë persentasie van opgeleide operasionele personeel werksaam by suiweringswerke. Water en afvalwater behandelingswerke se personeelkapasiteit is baie afhanklik van die vlak van vaardigheid en kapasiteit van tegniese bestuur in diens van die munisipaliteit. Munisipaliteite met toepaslike begrotings en befondsing om personeel aan te stel en op te lei het ’n neiging om beter te presteer met kapasiteitsbou van operasionele personeel as die wat aan ’n gebrek ly van befondsing. Die vermindering van nie-inkomste water (NRW) het sterk korrelasies met tegniese bestuur en netwerkherstel personeelvaardighede en ontwikkeling. Munisipaliteite wat personeel met die korrekte vaardighede en ervaring in diens het, gekombineer met bestuur wat dit nastreef om NRW te verminder by wyse van monitering en uitvoering van druk beheer in water netwerke het aansienlik kleiner NRWpersentasies. Ewe noodsaaklik vir die vermindering van NRW, soos geopenbaar deur die ondersoek is die beoefening van interne infrastruktuur batebestuur deur diemunisipaliteit. Daar is tot die gevolgtrekking gekom dat munisipaliteite daarna moet streef om ’n NRW persentasie van 30% of minder te bereik om finansieel stabiel te word, as gevolg van die korrelasie tussen befondsing van roetine bedrywighede en die opbou van kontant reserwe teenoor NRWpersentasies. Munisipaliteitewat die uitvoeringskoers van beplande waterdienste aktiwiteitewil verbeter, word aanbeveel om onder andere, tegniese bestuurs vaardigheids vlakke en kapasiteit aan te spreek. Munisipaliteite wat nie tegniese bestuursvaardigheid en -kapasiteit het nie, berig dat ’n lae persentasie van beplande aktiwiteite uitgevoer word. Die tegniese operasionele personeel vaardigheidsvlakke en kapasiteit, as gevolg van hul betrokkenheid in die uitvoering van beplande aktiwiteite is ook van groot belang. Die betrokkenheid van lede van die raad by water en afvalwater beplanning en die rapportering van data en kwessies aan die raad verhoog baiemunisipaliteite se vermoëns om beplande aktiwiteite uit te voer. Dit kan hoofsaaklik toegeskryf word aan verhoogde befondsing in situasies waar raadslede beplande projekte ondersteun. Dit is gevind dat die gebrek aan befondsing ’n groot inhibeerder van die uitvoering van beplande aktiwiteite is. Alhoewel ’n meerderheid van die munisipaliteite aangedui het dat hulle begrotings effektief spandeer, word dit egter nie weerspieël in die persentasie munisipaliteite wat beplande aktiwiteite uivoer nie en lei dit tot die gevolgtrekking dat daar n gebrek aan befondsing is. Munisipaliteite wat klem lê op ander gebiede van hul besigheid soos, infrastruktuur batebestuur en beplanning was meer effektief met die uitvoering van die beplande aktiwiteite. Daar is tot die gevolgtrekking gekom dat tegniese bestuur en operasionele personeel vaardigheidsvlakke en kapasiteit noodsaaklik is vir ’n munisipaliteit om behoorlik te funksioneer. Daar is ook ’n behoefte aan befondsing by munisipaliteite om beplande aktiwiteite uit te voer en munisipaliteite moet finansieel onafhanklik en lewensvatbaar word. Een manier om te werk te gaan om finansiële self volhoubaarheid te bereik, is die vermindering van NRW persentasies. Die data van hierdie ondersoek toon groot ooreenkomste met die literatuur wat geraadpleeg is oor die huidige stand en funksionering van Suid-Afrikaanse munisipaliteite. Die statistiese analise van die MuSSA data het akkurate korrelasies geopenbaar tussen die sleutel prestasie-aanwysers inmunisipaliteite. Die gevolgtrekking kan gemaak word dat die ondersoek in terme van die korrelasie tussen MuSSA vrae gebruik kan word om munisipale besluitneming te help verbeter.

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