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.
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PERMIT # 495
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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: http://www.epa.gov/
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.
Corporate Offices: 2206 South Main Street Blacksburg, VA (540) 552-0444
Blacksburg, VA 24060 Charlottesville, VA (434) 295-0700
(540) 552-0444 Hampton Roads, VA (757) 599-9800
Fax: (540) 552-0291 Richmond, VA (804) 264-2228