Management Practice Inc. (MPI) is in the process of helping seven investor-owned water companies develop their strategic plans in a form which is both useful to management and meets with the evolving regulatory requiremend for integrated resource planning.

The process is summarized in the schematic shown above. It is based on three phases (1) Defining the water utility in terms of areas served and services provided both now and in the future. Management must also set the financial, productivity and service goals, which are needed to guide individual departments. (2) Assessing the impact of key variables which affect the water company over the planning period. These include noncontrollable variables such as the economic environment, the Safe Drinking Water Act, and the rate-making process. Also included are controllable variables such as engineering, technology, employee relations, and financial structure. (3) Building the long-range plan which provides the framework for next year's budget, capital expenditure, and management objectives.

In our experience, many managerial and regulatory difficulties can be avoided by developing a strategic plan and if required, sharing it with the regulatory authorities.