Since the implementation of a unique and aggressive optimization program in 1999, Topeka Water has saved over one million dollars in annual operation and maintenance (O&M) expenses, nearly 10 percent of their O&M budget. These savings are the result of a 1998 extensive competitive utility assessment of operations and maintenance practices and resulting operational changes designed to improve cost- effectiveness and organizational efficiency. This paper focuses on organizational and work process changes that have had the most significant impact on Topeka Water's employees and their efficiencies. In addition to the positive and commendable results achieved by Topeka Water, this paper presents some of the challenges encountered as well. Because 80 to 90 percent of the cost savings by Topeka Water was to come from reduced staff, it was imperative for Topeka Water to first invest in technical and personnel improvements that would allow for areduced labor force. In 1997, Topeka Water had 148 funded full-time positions covering all aspects of water production, distribution, meter reading, customer service, and administration. A computerized maintenance management system implemented at the water treatment plant in 2000 is helping management proactively plan and document equipment maintenance. Management has also been evaluating non-core processes that would be suited for out-sourcing and has begunto contract out many activities that were historically performed by in-house resources. As of January 2001, Topeka Water has 106 full time employees tending to the same functions as in 1997. Topeka Water has also initiated a division-wide safety program and training program with committed resources to a safety manual, a specific safety awards program, and continuous safety training. Additionally, the employee-training program encourages supervisors to provide necessary and helpful training and cross training to all employees. Topeka Water's training goal is to have every employee receive at least 40 hours of training per year. Topeka Water has implemented a number of additional changes and programs that have helped staff become more efficient and save costs. The percent of overtime, even with reduced staff and increased water main breaks, has decreased from 16.6 percent in 1997 to 12.5 percent in 1999 and 14.8 percent in 2000. Staff in both the plant and distribution systems are developing standard operating procedures to promote consistency and efficiency during regular operations. Plant operations, maintenance, and laboratory staff have adopted weekly process control meetings that have promoted communication and better personnel relations. Additionally, plant operations has transitioned from two to one operator per shift. Although Topeka Water has achieved some noticeable goals, both cultural and financial, Topeka Water continues to encounter hurdles with this aggressive program. This paper addresses ongoing challenges, including employee sick time use, staff reductions occurring at a faster pace than corresponding process improvements, employee transfers, city and municipal inefficiencies (purchasing,personnel, and financial departments), and the perceived lack of time and ability to develop and implement process changes. Includes figures.