Management, Economics and Policy
Business Attributes of Successful Responsible Management Entities
Publication Date: November 2006
Cooperating Institution: NRECA
Sub-Grantee: Hamilton Brown
Project Budget: $168,313
Project Identifier: 04-DEC-4SG
Reported septic system failure rates range from less than 1 percent to as high as 70 percent, yet anecdotal reports typically set this range at 30 to 50 percent. However, ongoing and effective management programs have proven successful at greatly reducing failure rates (EPRI, 2000). Responsible Management Entities can provide the administrative framework essential to ensuring that decentralized wastewater treatment systems protect both public health and the environment for the long term. Unfortunately, they have been slow in developing. The study described in this research was conducted to identify successfully operating Responsible Management Entities and find those business characteristics common among them and in the process accelerate their formation.
The project team first defined “Responsible Management Entity” and “success”. The team used the definition proposed by Yeager and English (2001) when they coined the term “Responsible Management Entity”, rather than the more restrictive definition used by the EPA in their voluntary management guidelines. Defining success proved more challenging, as the definition was developed after reviewing the business practices of a number of RMEs. Ultimately, the project team settled on defining “success” as attaining the necessary technical, financial, and managerial capacity needed to operate the business. By this definition of success, the project team found few successful Responsible Management Entities. Significantly, the project team also found that governance is an important issue for the future success of a Responsible Management Entity. Often overlooked, the manner by which the entity is governed must be carefully considered when forming the entity.
The assessment also led to a number of suggested strategies for forming management programs for specific situations. Suggested strategies are presented for three specific situations, including 1) management plans in regions with existing decentralized treatment systems (such as septic systems), 2) management plans for regions with existing development and new treatment systems, and 3) management plans for regions with new development and new treatment systems.