Asset Management Overview. Water & Wastewater Utility Operation and Management for Tribes

Transcription

1 Asset Management Overview Water & Wastewater Utility Operation and Management for Tribes

2 Asset Management Overview What is an Asset? What is Asset Management? What are the Benefits of Implementing Asset Management Principles?

3 Assets Are All the equipment, buildings, land, people and other components needed d to deliver safe and clean water for drinking and disposal. Large, expensive, long-lived, and often buried. Machinery Buildings ASSETS Tools Pipes Essential to protect public health. Operator Equipment

4 Asset Management Is A process for maintaining a desired level of customer service at the best appropriate cost.

5 Asset Management Includes Building an inventory of your assets. Scheduling and tracking maintenance tasks. Managing your budgeted and actual Managing your budgeted and actual annual expenses and revenue.

6 Asset Management Benefits Back up budget talks with solid facts Boost utility efficiency Save staff time Understand that a utility is running a customer service business Improve customer service

7 Asset Management Framework

8 1. Current State of Assets What does the utility own? Where is it? What is its condition? Ruptured Wooden Water Tower, March 1999 Credit: Charles Myers, Rolla, MO What is its remaining useful life? What is its value?

9 Asset Inventory To perform an inventory, determine your assets and list the following information: Condition Age Service history Useful life - Manufacturer s recommendation - Adjust by service history and current condition Leaking reservoir Credit: Rural Community Assistance Corporation

10 Example Inventory Worksheet Example System Inventory Worksheet Date Worksheet Completed/Updated: 4/7/11 Asset Expected Adjusted Remaining Condition Service History Age Useful Life Useful Life Useful Life Well 1 (2003) 30 Good Well 1 Pump 10 Good Rehab (2006) Well 2 (2003) 30 Good Well 2 Pump 10 Good Rehab (2008) Pumphouse (2003) 30 Good Electrical components 10 Some corrosion Rehab (2004) Chlorinator (2003) 10 Good Rehab (2008) Storage Tank 1 (2003) 40 Good Rehab (2010) $17, Storage Tank 2 (2003) 40 Good Rehab (2010) $17, Storage Tank 3 (2003) 40 Almost new

11 Asset Prioritization To prioritize your assets, consider: Remaining useful life Ability to provide service Redundancy The big picture e.g., community development Plans and evaluations

12 Example Prioritization Worksheet Example Prioritization Worksheet Date Worksheet Completed/Updated: 4/7/11 Asset Remaining Priority Importance Redundancy Useful Life (1 is High) Well 1 (2003) 30 Needed for Service Other well, but need backup 6 Well 1 Pump 10 Needed for Service Other well, but need backup 3 Well 2 (2003) 30 Needed for Service Other well, but need backup 6 Well 2 Pump 10 Needed for Service Other well, but need backup 3 Pumphouse (2003) 30 Needed for Service Other well, but need backup 6 Electrical components 10 Needed for Service No redundancy corrosion 2 Chlorinator (2003) 10 Mandatory No redundancy need backup 1

13 Required Reserve To help you determine estimated costs: Contact local contractors Contact equipment manufacturers Talk to other systems Talk to state, tribal, and technical assistance organizations

14 Example Reserve Worksheet Example Required Reserve Worksheet Date Worksheet Completed/Updated: 4/8/11 Asset (list from highest to lowest priority) Activity Years until action needed Cost ($) Reserve required current year 1. Chlorinator Replace 2 $2,000 $1,000 Purchase redundant unit 1 $2,000 $2, Pumphouse Electrical Replace with controller 1 $2,000 $2, Well Pumps Replace Well 1 pump 1 $5,000 $5,000 Replace Well 2 pump 1 $5,000 $5,000 Next replacements (2 well pumps p at $5,000 $, each) 10 $10,000 $1,000 $,

15 Asset Management Framework

16 2. Level of Service What do the regulators require? What are the utility s performance goals? What level of service (LOS) do the utility s customers demand? What are the physical capabilities of the utility s assets?

17 Performance Indicators Failures per year Stoppages per year per mile of pipe Overflows per year per mile of pipe pp Electrical usage Customer complaints per mile of pipe

18 What are some other Performance Indicators?

19 LOS Goal LOS goals should be SMART Specific Measurable Action-oriented Realistic Timely By using the SMART Approach, a utility can not only set goals but also achieve them. Examples of LOS Goals: System will meet all state and federal regulatory standards. Water losses will be maintained below 12%. Under normal conditions, pressures will be maintained between 30 and 70 psi. All customer complaints will be investigated within 2 business days of the complaint.

20 Best Practices Analyze customer demand and satisfaction Understand regulatory requirements Communicate to the public a level of service agreement Make your service objectives meaningful to the customers Use level of service standards

21 Asset Management Framework

22 3. Critical Assets How can assets fail? How do assets fail? What are the likelihoods and consequences of asset failure? Leaking valve Credit: Rural Community Assistance Corporation What does it cost to repair the asset? What are other costs that are associated with asset failure?

23 What can t you live without?

24 Understanding Asset Risks Perfect World = Knowing Asset Risks Predict when an asset will fail (i.e., likelihood) Fully understand consequences of failure (i.e., impact) Wellhead that needs to be replaced Credit: Rural Community Assistance Corporation Failed booster pump results in well house flooding Credit: Rural Community Assistance Corporation

25 Best Practices to Ensure LOS List assets based on criticality Conduct a failure analysis Determine probability bilit of failure Analyze failure risk and consequences NYC pipe explosion, July 2007 Credit: Mario Tama, Getty Images

26 Asset Management Framework

27 4. Minimum Life Cycle Cost What are the best Capital Improvement Projects (CIP) and Operation and Maintenance (O&M) strategies? What management strategies are the most feasible for my organization? Wh t th t f h bilit ti What are the costs for rehabilitation, repair, or replacement of critical assets?

28 Asset Maintenance Options Non-preventive (wait until it breaks) Preventive (plan before it breaks) Repair Refurbish/rehabilitate Replace Decommission Grit removal and grinder/screener units Credit: Village of Boyd, WI Return Activated Sludge (RAS) Station and two associated Pad mounted Transformers (PMTs) Credit: City of Lincoln, IL

29 Management Decisions What are utility work crews doing and where are they doing it AND WHY!!? What Capital Improvement Projects (CIP) should be done and when? When to repair, when to rehab, and when to replace? These decisions typically account for 85% of a utility s annual expenditures!

30 Best Practices to Ensure LOS Move from reactive to proactive maintenance Know the costs and benefits of rehabilitation vs. replacement Look at lifecycle costs for critical assets Deploy resources based on asset conditions Develop and validate CIP

31 Asset Management Framework

32 5. Long-term Funding Plan Best Long-Term Financing Strategy What are the full economic costs associated with the utility? Is there enough funding to maintain assets for the required level l of service? How can full cost pricing be implemented? Is the rate structure sustainable for the system s s long term needs?

33 Cost of Sustainable Utility Services Cost Allocation & Rate Design Rates & Charges Residential Commercial Industrial Sbidi Subsidies Transfer Payments Annual Revenue Necessary for Full Cost Recovery Recognition of Full Business Costs Chosen Level and Means of Provision of Service

34 Best Practices to Ensure LOS Routinely review and revise the rate structure t Fund a dedicated reserve from current revenues Finance asset renewal and replacement through h borrowing

35 EPA Tools EPA Tools Available for Asset Management Simple tools for effective performance (STEP) guides Check up program for small systems (CUPSS)

36 STEP Guide This guide is designed for owners and operators of small community water systems. Presents basic concepts of asset management and provides the tools to develop an asset management plan. State and Regional Tribal Capacity Development Program Coordinators are available to help with concepts covered in this guide.

37 STEP Guide (Cont ) Copies of the STEP guide may be obtained by: Calling the Safe Drinking Water Hotline and requesting document EPA 816-R Download the guide from EPA s Safe Drinking Water Website:

38 CUPSS What is CUPSS? Check up program for small systems Free Asset Management tool Desktop software program that runs on your computer Series of modules that store information about a user s utility Tool designed and developed with input from wellrounded stakeholder group

39 CUPSS (Cont ) Who should use it? Small drinking water and wastewater systems Medium-sized systems new to Asset Management

40 CUPSS (Cont ) Using CUPSS to Manage Assets Helps in understanding the asset management process Establish and keep track of goals and milestones Become more organized by keeping all information in one place

41 CUPSS (Cont )

42 CUPSS (Cont )

43 CUPSS Benefits Using CUPSS will allow utilities to: Make more informed decisions Save time by planning ahead Back up budget talks with solid facts Improve po ecustomer service

44 CUPSS CD To obtain a copy of CUPSS CD: s/index.cfm CUPSS CD contains: CUPSS Software Getting Started with CUPSS Workbook User s Guide CUPSS Presentation You can also contact: cupss@epa.gov

45 What Have We Learned? How to identify our assets Management techniques to plan for maintenance and replacements