Asset Management .pub

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					March 2008
                                                  For Local Government

Asset Management for Public Water and Wastewater Utilities
By Lori Kroll, Community Resource Specialist
This is the first article in a three-part series that looks at asset man-
agement, one of the important challenges facing municipalities today.
                                                                             Asset Management is defined as an integrated
      Water and wastewater utilities across the nation face                  process of managing infrastructure assets to
common challenges, such as rising costs and increasing                       minimize the total cost of owning and oper-
complexity in providing quality products and services to                     ating them, while continuously delivering the
their customers. Each utility is responsible for making                      levels of service customers desire at an
sure its system stays in good working order – regardless                     acceptable level of risk.
of the age of the system or the availability of additional
funds.                                                                                   Managing Public Infrastructure Assets
      Asset management programs, including components                                     AMSA, AMWA, AWWA, WEF, 2001
like long-range planning, life-cycle costing, proactive op-
erations and maintenance, and capital replacement plans
based on cost-benefit analyses, can provide the most effi-
cient method of meeting this challenge. EPA is working                            Asset management is a planning process that insures
collaboratively with national organizations that support                    getting the most value and most efficient utilization from
drinking water and wastewater utilities to identify the                     each of these assets and having the financial resources to
characteristics of sustainable utilities and to promote ef-                 repair, rehabilitate, and/or replace them when necessary.
fective utility management.                                                 It’s as much an investment policy as it is a management
      As part of EPA's Sustainable Infrastructure Initiative,               tool.
the Office of Water works in collaboration with partner                           Asset management involves developing a plan to
organizations to host and co-sponsor training sessions in                   reduce costs while increasing the efficiency and the reli-
Advanced Asset Management, and to facilitate ongoing                        ability of your assets. Successful asset management de-
dialog among providers of water and wastewater services                     pends on knowing about your system’s assets and regu-
to further best practices in the industry.                                  larly communicating with staff, management, and cus-
                                                                            tomers about your system’s future needs.
What is Asset Management?
      Asset management is generally defined by EPA and                      “Asset management is a methodology to efficiently and
its collaborating partners as managing infrastructure capi-                 equitably allocate resources amongst valid and compet-
tal assets to minimize the total cost of owning and operat-                 ing goals and objectives.”
ing them, while delivering the service levels desired by                                          American Public Works Association
customers at an acceptable level of risk. The intent of the                 The Asset Management Process
process is to use integrated tools and consistent method-                        Asset management consists of the following five
ologies to improve operational, environmental, and finan-                   steps:
cial performance.                                                              1. Taking an inventory. Before you can manage your
      For public utilities, assets are generally defined as                    assets, you need to know what assets you have and
any building, tool, piece of equipment, furniture, pipe, or                    what condition they are in. This information will help
machinery used in the operation of the water or wastewa-                       you schedule rehabilitations and replacements of your
ter systems.                                                                   assets.
      Assets also include a utility’s hard and soft data re-
                                                                               2. Prioritizing your assets. Your water system proba-
sources as well as the human resources within an organi-
                                                                               bly has a limited budget. Prioritizing your assets will
zation. Asset management looks at ways of developing,
                                                                               ensure that you allocate funds to the rehabilitation or
improving and better utilizing these valuable resources in
                                                                               replacement of your most important assets.
order for them to remain as productive as possible, too.
                                                                                                                  Continued on back…...
                                                                                                                                                            PRSRT STD
                                                                                                                                                           US POSTAGE
                                                                                                                                                          ROANOKE, VA
                 2206 South Main Street
                                                                                                                                                          PERMIT # 495
                 Blacksburg, Virginia 24060

Continued from front…...

    3. Developing an asset management plan. Planning                                                 EPA is committed to promot-
    for the rehabilitation and replacement of your assets                                       ing sustainable practices that will
    includes estimating how much money you will need                                            help to reduce the potential gap
    each year to maintain the operation of your system.                                         between future funding needs and
    This includes developing a budget and calculating                                           spending at the local and national
    your required reserves over time.                                                           level. Their Sustainable Infrastruc-
    4. Implementing your asset management plan. Once                                            ture Initiative will help guide our efforts in changing how
    you have determined how much money you will have                                            the nation views, values, manages, and invests in its water
    to set aside each year and how much additional fund-                                        infrastructure. EPA is working with the water industry to
    ing (if any) you will need to match that amount, you                                        identify best practices that have helped many of the na-
    need to work with your management, customers, and                                           tion’s utilities address a variety of management chal-
    regulators to carry out your plan and ensure that you                                       lenges and extend the use of these practices to a greater
    have the technical and financial means to reliably de-                                      number of utilities. EPA believes that collaboration with a
    liver services to your customers.                                                           coalition of leaders, with EPA playing a prominent role,
    5. Reviewing and revising your asset management                                             can build a roadmap for the future promotion of sustain-
    plan. Once you have developed an asset management                                           able infrastructure.
    plan, it should be used as a dynamic tool to help you                                             For more information regarding EPA’s Sustainable
    shape your operations. It is a flexible document that                                       Infrastructure Initiative or Asset Management Programs,
    should evolve as you gain more information and ex-                                          visit their website:
    perience as priorities shift.                                                               waterinfrastructure/index.html.

  Draper Aden Associates is a full-service engineering, surveying and environmental consulting firm. Services include: civil/utilities engineering; environmental services, geological/
  hydrogeological services; geotechnical/construction/laboratory; site planning & engineering; soils science; solid waste management; structural engineering; surveying; subsurface
  utility engineering, information management services, GIS and transportation engineering.

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