SUN01 - Hands on Development of Asset Management Plans

Transcription

1 2014 Water Infrastructure Conference SUN01 - Hands on Development of Asset Management Plans October 26th, 2014 Atlanta, Georgia

2 9:00 Introduction and Learning Objectives Jeffrey Leighton, City of Portland Water Bureau Workshop Agenda 9:15 Introduction to key concepts of AM and introduction to the AWWA AM Resource Page on the Web Thais Vitagliano, Washington Suburban Sanitary Commission, Tina Yanitski, EPCOR Water Services, Inc. 9:30 Asset Management Plans, within the framework of the International Infrastructure Management Manual, and ISO (the new international AM standard) Paul Smeaton, CH2M Hill Canada 9:45 WSSC Enterprise Asset Management Plan Thais Vitagliano, Washington Suburban Sanitary Commission 10:00 Canadian Corporate AMP Paul Smeaton, CH2M Hill Canada 10:30 EPCOR Distribution AMP Tina Yanitski, EPCOR Water Services, Inc. 10:45 PWB Asset Class AMP Jeffrey Leighton, City of Portland Water Bureau 11:00 Q&A / Discussion Kevin Campanella, Columbus Dept. of Public Utilities, Celine Hyer, ARCADIS 11:15 Levels of Service Thais Vitagliano, Washington Suburban Sanitary Commission, Tina Yanitski, EPCOR Water Services, Inc. 1:00 Risk of Asset Failure Tina Yanitski, EPCOR Water Services, Inc., Jeffrey Leighton, City of Portland Water Bureau 1:45 Business Case Analysis for Replacement and Rehabilitation Paul Smeaton, CH2M Hill Canada, Jeffrey Leighton, City of Portland Water Bureau 2:45 Session 1 (i.e. Workshop on creating an Enterprise Level AMP includes time to create a framework, etc.) Thais Vitagliano, Washington Suburban Sanitary Commission, Paul Smeaton, CH2M Hill Canada 3:30 Session 2 (i.e. Workshop on creating an Asset Level AMP includes time to create a framework, etc.) Tina Yanitski, EPCOR Water Services, Inc., Jeffrey Leighton, City of Portland Water Bureau 4:15 Group Discussion on AMP Framework Kevin Campanella, Columbus Dept. of Public Utilities, Celine Hyer, ARCADIS 4:35 Wrap up, Lessons Learned Kevin Campanella, Columbus Dept. of Public Utilities, Celine Hyer, ARCADIS

3 Presenter Information Jeff Leighton, City of Portland Water Bureau, is the Chair of the AWWA AM Committee. Mr Leighton is a Senior Engineer in charge of the Asset Management Group at the Portland Water Bureau, with responsibility for the risk management, condition assessment, asset replacement forecasting, asset management plans and business case development programs. He is a member of the EPA Innovative Infrastructure Research Committee and has served on more than a dozen Project Advisory Committees on Asset Management for the Water Research Foundation. jeff.leighton@portlandoregon.gov Paul Smeaton, CH2M Hill. Paul is a senior asset management consultant and has more than 20 years experience in water and wastewater engineering and asset management with a focus on risk management and capital investment planning. Before joining CH2M Hill in 2008, Paul was the Asset Management Strategic Coordinator at Scottish Water where he was responsible for the development and implementation of asset planning, risk management, and investment prioritization tools and techniques. Paul.Smeaton@ch2m.com Thais Vitagliano, Washington Suburban Sanitary Commission (WSSC). Thais is the Program Manager for the Asset Management Program at WSSC. She is responsible for the development, implementation, and Institutionalization of WSSC s asset management framework, processes and structure, development of asset management plans, and business cases. She is a member of AWWA AM Committee and a certified project manager with over 26 years of experience delivering a variety of water and wastewater related projects/programs. Thais.Vitagliano@wsscwater.com Tina Yanitski, EPCOR. Tina is the Senior Manager in charge of the Infrastructure Group at EPCOR Water Services in Edmonton, with responsibility for overseeing the planning, design and construction of over $40 million in annual distribution and transmission main rehabilitation and replacement programs. She is also involved in the development and implementation of EPCOR s Asset Management Plans related to both the distribution and transmission main systems. tyanitski@epcor.ca There will also be two facilitators: Kevin Campanella of Columbus Department of Public Utilities - kvcampanella@columbus.gov Celine Hyer of ARCADIS. - celine.hyer@arcadis-us.com

4 INTRODUCTION THE AWWA ASSET MANAGEMENT COMMITTEE IS SPONSORING THIS WORKSHOP AS A KEY LEARNING OPPORTUNITY FOR ASSET MANAGEMENT. DEVELOPMENT OF ASSET MANAGEMENT PLANS IS ONE OF THE KEY ELEMENTS OF ASSET MANAGEMENT IMPLEMENTATION. THIS WORKSHOP WILL COMBINE PRESENTATIONS, INTERACTIVE EXERCISES, SMALL GROUP DISCUSSIONS AND INDIVIDUAL PRODUCT DEVELOPMENT WITH THE INTENTION OF EDUCATING ATTENDEES ON DEVELOPMENT OF AN ASSET MANAGEMENT PLAN AND ON KEY ASSET MANAGEMENT CONCEPTS THAT ARE PART OF THE PLAN.

5 PRESENTATION TEAM JEFF LEIGHTON IS THE CHAIR OF THE AWWA ASSET MANAGEMENT COMMITTEE AND A SENIOR ENGINEER IN CHARGE OF THE ASSET MANAGEMENT GROUP AT THE PORTLAND WATER BUREAU, PAUL SMEATON IS A SENIOR ASSET MANAGEMENT CONSULTANT AT CH2MHILL. THAIS VITAGLIANO IS THE PROGRAM MANAGER FOR THE ASSET MANAGEMENT PROGRAM AT WASHINGTON SUBURBAN SANITARY COMMISSION (WSSC). TINA YANITSKI IS THE SENIOR MANAGER IN CHARGE OF THE INFRASTRUCTURE GROUP AT EPCOR WATER SERVICES IN EDMONTON,

6 AGENDA INTRODUCTION INTRODUCTION TO AM CONCEPTS AND ASSET MANAGEMENT PLANS PRESENTATION OF EXAMPLE ASSET MANAGEMENT PLANS REVIEW OF ASSET MANAGEMENT CONCEPTS & INTERACTIVE LEARNING EXERCISES ASSET MANAGEMENT PLAN CASE STUDIES, SMALL GROUP DISCUSSIONS & DEVELOPMENT OF AN AMP FRAMEWORK GROUP DISCUSSION OF AMP FRAMEWORK WRAP-UP

7 LEARNING OBJECTIVES THREE LEARNING OBJECTIVES OF THE WORKSHOP ARE: A REVIEW OF ASSET MANAGEMENT CONCEPTS THAT ARE KEY TO DEVELOPING ASSET MANAGEMENT AN UNDERSTANDING OF HOW TO PREPARE ASSET MANAGEMENT PLANS AND A REVIEW OF WHAT IS CONTAINED WITHIN ENTERPRISE WIDE AND ASSET CLASS SPECIFIC ASSET MANAGEMENT PLANS DEVELOPMENT OF A CUSTOMIZED AM PLAN OUTLINE/FRAMEWORK FOR EACH OF THE UTILITIES ATTENDING THE WORKSHOP.

8 INTRODUCTION KEY ASSET MANAGEMENT CONCEPTS OCTOBER 26, 2014 ASSET MANAGEMENT NUMBER OF ASSET MANAGEMENT PRACTICES USED VARY IN NUMBER AND DEPTH OF IMPLEMENTATION AWWA HAS IDENTIFIED 13 KEY CONCEPTS EPA USES 5 QUESTIONS AND 10 STEPS WATER INFRASTRUCTURE ASSET MANAGEMENT STUDY RESEARCH (MCGRAW-HILL) IDENTIFIED 14 ADVANCED ASSET MANAGEMENT PRACTICES WHAT IS ASSET MANAGEMENT? THE GOAL OF INFRASTRUCTURE ASSET MANAGEMENT IS TO: MEET A REQUIRED LEVEL OF SERVICE IN THE MOST COST EFFECTIVE MANNER AT AN ACCEPTABLE LEVEL OF RISK THROUGH THE MANAGEMENT OF ASSETS FOR PRESENT AND FUTURE CUSTOMERS.

9 AWWA KEY ASSET MANAGEMENT CONCEPTS ASSET DATA MANAGEMENT ASSET FAILURE MODES ASSET INVENTORY & REPLACEMENT VALUE ASSET MANAGEMENT PLANS ASSET MANAGEMENT PROGRAM STRATEGY & STRUCTURE BEST PRACTICES BUSINESS CASE ANALYSIS FOR INVESTMENTS CONDITION ASSESSMENT LEVELS OF SERVICE MAINTENANCE FRAMEWORK & PLANNING RISK OF ASSET FAILURE REPLACEMENT & REHABILITATION PLANNING & FUNDING USEFUL LIFE EVALUATION EPA ASSET MANAGEMENT CONCEPTS FIVE QUESTIONS & TEN STEPS 1. What is the current state of my assets? Develop Assess Determine Asset Performance, Residual Registry Failure Modes Life Determine Optimize Optimize Business Risk O&M Capital ( Criticality ) Investment Investment Determine Life Cycle & Replacement Costs Determine Funding Strategy 2. What is my required level of service? Set Target Levels of Service (LOS) Build AM Plan 3. Which assets 4. What are my best O&M and are critical CIP investment strategies? to sustained performance? 5. What is my best long-term funding strategy? AWWA & EPA CONCEPTS COMPARED State of the Assets Asset Data Management Develop Asset Registry Condition Assessment Assess Performance & Asset Failure Modes Failure Modes Useful Life Evaluation Determine Residual Life Asset Inventory & Replacement Determine Life Cycle & Value Replacement Costs LOS Define LOS or key performance indicators as targets for utility performance Set Target Levels of Service (LOS) Risk Risk of Asset Failure Determine Risk (Criticality)

10 AWWA & EPA CONCEPTS COMPARED O&M & CIP Investment Strategies Maintenance Framework & Planning Business Case Analysis for Investments Long Term Replacement & Rehabilitation Investment Strategy Planning & Funding Optimize O&M Investment Optimize Capital Investment Determine Funding Strategy AM Plans Asset Management Plans Build AM Plan Organization Asset Management Program Strategy & Structure Best Practices AWWA ONLINE RESOURCES ( AWWA ONLINE RESOURCES (

11 AWWA ONLINE RESOURCES ( AWWA ONLINE RESOURCES ( HOW PRACTICES ARE USED TO DEVELOP ASSET MANAGEMENT PLANS Investment Requirements & Funding Strategies Analysis of State of the Assets (Failure Modes, Condition, Performance, Useful Life) Analysis of LOS Performance (Performance Measures & Targets) CIP (Rehabilitation & Replacement) Recommendations Asset Management Risk Analysis (Risk Registry) O&M Recommendations Infrastructure Needs Resources

12 QUESTIONS

13 ASSET MANAGEMENT PLANS WITHIN THE CONTEXT OF ISO55000, IIMM ETC OCTOBER 26, 2014 CONTENT OVERVIEW OF CURRENT INDUSTRY GUIDANCE & STANDARDS OVERVIEW OF GENERAL AMP CONTEXT AND REQUIREMENTS KEY GUIDANCE & PROCESS STEPS GOOD PRACTICE ASSET MANAGEMENT IN MANY SECTORS IT IS ASSUMED THAT ORGANIZATIONS ARE PRACTICING ASSET MANAGEMENT BUT. EXPECTATIONS OF GOOD PRACTICE FROM CUSTOMERS, STAKEHOLDERS & REGULATORS WHAT IS GOOD PRACTICE? HOW WELL DO MEASURE UP TO THIS? ISO IS FOCUSED ON IMPLEMENTING A MANAGEMENT SYSTEM FOR ASSET MANAGEMENT AMPS ARE A REQUIREMENT OF ISO Asset Management Systematic and coordinated activities and practices through which an organization optimally and sustainably manages its assets and asset systems, their associated performance, risks and expenditures over their life cycles for the purpose of achieving its organizational strategic plan. Source: PAS 55 Coordinated activity of an organization to realize value from its assets Source: ISO 55000

14 THE EVOLUTION OF ISO PAS 55 PUBLICLY AVAILABLE SPECIFICATION FOR THE OPTIMIZED MANAGEMENT OF PHYSICAL ASSETS DEVELOPED IN 2004 BY UK INSTITUTE OF ASSET MANAGEMENT (IAM) IN CONJUNCTION WITH BRITISH STANDARDS INSTITUTE (BSI) PAS 55 IS THE FOUNDATION FOR DEVELOPMENT OF ISO STILL A VERY USEFUL DOCUMENT IN ITSELF PROVIDES ADDITIONAL INFORMATION AND GUIDANCE AMPS ARE A FUNDAMENTAL REQUIREMENT WITHIN PAS 55 COMPRISED OF 3 DOCUMENTS: ISO THE ISO SERIES PROVIDES AN OVERVIEW OF THE SUBJECT OF ASSET MANAGEMENT AND THE STANDARD TERMS AND DEFINITIONS TO BE USED ISO IS THE REQUIREMENTS SPECIFICATION FOR AN INTEGRATED, EFFECTIVE MANAGEMENT SYSTEM FOR ASSET MANAGEMENT ISO PROVIDES GUIDANCE FOR THE IMPLEMENTATION OF SUCH A MANAGEMENT SYSTEM LEADERSHIP VALUE ISO FUNDAMENTAL OBJECTIVES LEADERSHIP AND COMMITMENT FROM ALL MANAGERIAL LEVELS IS ESSENTIAL FOR SUCCESSFULLY ESTABLISHING, OPERATING AND IMPROVING ASSET MANAGEMENT WITHIN THE ORGANIZATION DECISIONS DO NOT FOCUS ON THE ASSET ITSELF BUT ON THE VALUE THAT THE ASSET CAN PROVIDE TO THE ORGANIZATION LINE OF SIGHT ASSET MANAGEMENT DECISIONS (TECHNICAL, FINANCIAL AND OPERATIONAL) COLLECTIVELY ENABLE THE ACHIEVEMENT OF ORGANIZATIONAL OBJECTIVES ASSURANCE ASSURANCE THAT ASSETS WILL FULFILL THEIR REQUIRED PURPOSE VIA EFFECTIVE GOVERNANCE AND DECISION MAKING

15 THE 7 KEY ELEMENTS OF ISO Ref. Element Key Topics 4 Context of the organization Org. Context, Internal & External Stakeholders Scope of the AM system 5 Leadership Leadership & Commitment Policy Roles & Responsibilities 6 Planning Risks to the AM System AM Objectives and planning to achieve them 7 Support Resources, Competence, Awareness & Communication Information & Documentation Requirements & Control 8 Operation Operational Planning and Control Management of Change, Outsourcing 9 Performance evaluation Monitoring, Measurement, Analysis & Evaluation Internal Audit Management Review 10 Improvement Non conformity & corrective action, preventive action Continual Improvement Asset Management Plans KEY BUILDING BLOCKS ISO Organizational Strategic Plan Sets out the vision, mission and high level goals and business objectives for the organization Asset Management Policy Articulates senior management commitment to Asset Management and Continual Improvement Provides top down direction regarding expectations and mandatory requirements for Asset Management and defines the key principles that underpin Asset Management within the Utility. Strategic Asset Management Plan (SAMP) Sets out overall approach to implementing Policy Sets out how the organizational objectives relate to asset management objectives and how the management system will implement the AM Policy Asset Management Plans Outlines long term plan for the assets including service expectations, timelines and funding, and resource requirements Sets out the specific lifecycle activities to deliver the AM objectives ISO AMP REQUIREMENTS THE ORGANIZATION SHALL ESTABLISH, DOCUMENT AND MAINTAIN ASSET MANAGEMENT PLAN(S) TO ACHIEVE THE ASSET MANAGEMENT OBJECTIVES THESE ASSET MANAGEMENT PLAN(S) WILL BE ALIGNED WITH THE ASSET MANAGEMENT POLICY AND THE SAMP THE ORGANIZATION WILL ENSURE THAT THE ASSET MANAGEMENT PLAN(S) TAKE INTO ACCOUNT RELEVANT REQUIREMENTS COMING FROM OUTSIDE THE ASSET MANAGEMENT SYSTEM THE ORGANIZATION SHALL PROVIDE THE RESOURCES REQUIRED FOR MEETING THE ASSET MANAGEMENT OBJECTIVES AND FOR IMPLEMENTING THE ASSET MANAGEMENT PLAN(S)

16 ISO GUIDANCE AMPS SHOULD DEFINE THE ACTIVITIES TO BE IMPLEMENTED AND THE RESOURCES TO BE APPLIED TO MEET AM OBJECTIVES SHOULD PROVIDE THE RATIONALE FOR AM ACTIVITIES INCORPORATING: O&M PLANS CAPITAL INVESTMENT PLANS FINANCIAL AND RESOURCE PLANS AMPS CAN BE APPLICABLE TO INDIVIDUAL ASSETS, PORTFOLIOS, GROUPS OR CLASS OF ASSETS AMPS SHOULD BE APPROPRIATE TO ORGANIZATION AND TO THE SOPHISTICATION OF THEIR AM APPROACHES CAN BE A SINGLE PLAN OR SEVERAL AS APPROPRIATE ISO GUIDANCE CLEARLY DEFINE RESPONSIBILITIES FOR DEVELOPING AND IMPLEMENTING THE AMP THERE ARE POTENTIAL BENEFITS IN ESTABLISHING A FIRST ITERATION QUICKLY HELPS CLARIFY STRENGTHS AND WEAKNESSES AND FOCUS DATA COLLECTION EFFORTS CONDUCT PERIODIC REVIEW TO ENSURE ALIGNMENT WITH AM OBJECTIVES UNDERTAKE REGULAR ASSESSMENT OF ABILITY OF THE SAMP TO SUPPORT THE ACHIEVEMENT OF AM OBJECTIVES WHEN DEVELOPING THE AMP: CONSIDER THE AUDIENCE AND WHAT THEY NEED TO KNOW MAY BENEFIT FROM A TIERED APPROACH FOR DIFFERENT AUDIENCES ISO GUIDANCE EMBED AND INCLUDE RISK RANKING / CRITICALITY ASSESSMENT APPROACHES AMPS SHOULD CONSIDER RISKS DURING THE ORGANIZATION S PERIOD OF RESPONSIBILITY AND ANY RESIDUAL RISKS BEYOND OPERATION OR USE OF ASSETS DEFINE AND ADOPT A COMMON METHODOLOGY FOR DETERMINING THE FINANCIAL IMPLICATIONS OF AMPS CONSIDER LIFE CYCLE COST. RECOGNIZE THAT AMPS INCLUDE DECISIONS THAT HAVE SHORT AND LONG TERM EFFECTS ACROSS ALL LIFE CYCLE STAGES

17 2011 Australia/New Zealand International Infrastructure Management Manual Institute of Public Works Engineering Australia NAMS AMP Template Ontario Ministry of Infrastructure Guide for Municipal Asset management Plans - Building Together OTHER AMP APPROACHES AMP Approaches - NAMS NAMS = NATIONAL ASSET MANAGEMENT STRATEGY DEVELOPED BY IPWEA (INSTITUTE OF PUBLIC WORKS ENGINEERING AUSTRALIA) NAMS.PLUS FULLY FLEDGED ASSET MANAGEMENT NAMS LITE ASSET MANAGEMENT FOR SMALL, RURAL AND REMOTE COMMUNITIES DEVELOPED FOR COMMUNITIES WITH LIMITED RESOURCES AND OR CAPACITY BASED ON REQUIREMENTS OUTLINED IN THE INTERNATIONAL INFRASTRUCTURE MANAGEMENT MANUAL 1. EXECUTIVE SUMMARY AMP Approaches International Infrastructure Management Manual 2. INTRODUCTION WHY WE NEED A PLAN 3. LEVELS OF SERVICE WHAT WE PROVIDE 4. FUTURE DEMAND PLANNING FOR THE FUTURE 5. LIFECYCLE MANAGEMENT HOW WE PROVIDE THE SERVICES 6. FINANCIAL SUMMARY WHAT WILL IT COST AND HOW WILL WE PAY FOR IT 7. PLAN IMPROVEMENT & MONITORING 8. APPENDICES

18 Asset Mgt Plan Development Process International Infrastructure Management Manual CONCLUSION AMPS ARE RECOGNIZED INDUSTRY GOOD PRACTICE FUNDAMENTAL REQUIREMENT OF ISO55000 STANDARD NOT PRESCRIPTIVE ON LEVEL OF APPLICATION AND DETAIL TAILORED TO SUIT ORGANIZATION RECOGNITION THAT A LESS THAN PERFECT FIRST ITERATION CAN BE USEFUL TO GET THINGS GOING ISO 55000, PAS 55, IIMM ETC CONTAIN VERY SIMILAR GUIDANCE REQUIREMENT TO MAINTAIN AMP DOCUMENTS AND KEEP THEM LIVE QUESTIONS? 18

19 WSSC ENTERPRISE ASSET MANAGEMENT PLAN OCTOBER 26, 2014 OBJECTIVE TO SHOW AN EXAMPLE OF THE TYPE OF CONTENT AND INFORMATION THAT CAN BE INCLUDED IN AN ENTERPISE ASSET MANAGEMENT PLAN ASSET MANAGEMENT PLANS HIERARCHY Enterprise Wastewater Network Water Network Treatment Plants System WWPS System Collection System Treatment Plants System Transmission & Distribution System Water PS System Treatment Plant 1 Pumping Station 1 Treatment Plant 1 Pumping Station 1

20 THE AMP IDENTIFIES NEEDS AND RECOMMENDS MANAGEMENT STRATEGIES AS AN INPUT INTO THE ANNUAL BUDGETING PROCESS. IT IS UPDATED ON A YEARLY BASIS SHORT TERM VALUE: 30 YEAR INVESTMENT NEEDS AND BASELINE STATE OF THE ASSETS IDENTIFIED CONDITION AND PERFORMANCE MONITORING FRAMEWORK IN PLACE FOCUSES THE TEAMS IN A SINGLE COMMON DIRECTION BASED ON ANALYSIS OF ASSET PERFORMANCE, COST, RISK BETTER DECISIONS LONG TERM VALUE: 30 YEAR INVESTMENT NEEDS AND STATE OF THE ASSETS UNDERSTOOD AT ALL TIMES MANAGEMENT OF RATE REQUIREMENTS AND IMPACTS LIFECYCLE COST SAVINGS PRODUCTIVITY IMPROVEMENTS IN SERVICE DELIVERY ABILITY TO DISCUSS IMPLICATIONS OF BUDGET CUTS IN TERMS OF RISK AND LEVELS OF SERVICE USING REAL TIME DATA BETTER DECISIONS

21 WSSC ENTERPRISE AM PLAN Enterprise Asset Management Plan EXECUITVE SUMMARY SYSTEM STATUS FINANCIAL PLAN LOS & PERFORMANCE RISK MANAGEMENT PRESERVATION PLAN AM INNOVATIVE IDEAS & STRATEGIES RELATED CORPORATE PROGRAMS BUSINESS IMPROVEMENT ORGANIZATIONAL OPPORTUNITIES WSSC ENTERPRISE AM PLAN ENTERPRISE ASSET MANAGEMENT PLANNING Executive Summary ASSET MANAGEMENT PROGRAM UPDATE ACCOMPLISHMENTS BENEFITS SUMMARY: LEVELS OF SERVICES (LOS) PERFORMANCE FINANCIAL NEEDS BUSINESS RISK EXPOSURE (BRE) PRESERVATION PLAN EXECUTIVE SUMMARY ACCOMPLISHMENTS

22 EXECUTIVE SUMMARY BENEFITS WASTEWATER COLLECTION SYSTEM PREVENTIVE MAINTENANCE OPTIMIZATION. ESTIMATED $7.3 MILLION COST AVOIDANCE OVER 6 YRS. RISK REDUCTION OF $112 MILLION WILL BE ACHIEVED ONCE RECOMMENDATIONS FROM BUSINESS CASES ARE IMPLEMENTED. 10 WSSC ENTERPRISE AM PLAN System Status OVERVIEW OF : THE EXPECTED WATER AND WASTEWATER SERVICES DEMAND IMPACT ON GROWTH AND REGULATORY BUSINESS DRIVERS WSSC SYSTEM STATUS Wastewater Flow Projections by Service Area

23 WSSC ENTERPRISE AM PLAN Financial Plan SHORT AND LONG TERM CASH FLOWS OPERATIONS MAINTENANCE CAPITAL RENEWAL FUNDING MECHANISMS IMPACT ON RATE AND CHARGES FINANCIAL PLAN Replacement Value vs. Remaining Value FINANCIAL PLAN 30 YRS. INVESTMENT REQUIREMENT

24 WSSC ENTERPRISE AM PLAN LOS and Performance PERFORMANCE REPORT BASED ON LOS VALUE STATEMENTS PERFORMANCE ANALYSIS OF A FEW SELECTED MEASURES LOS & PERFORMANCE LOS & PERFORMANCE REPORT No. Level of Service Value Statement Performance* LOS 1 Levels of service meet customer and stakeholder expectations Satisfactory LOS 2 Water and wastewater assets are managed to achieve optimum lifecycle costs Excellent LOS 3 Water and wastewater services are reliable and sustainable Good LOS 4 Water and Wastewater Services are provided in a manner that sustains and safeguards the environment Excellent LOS 5 WSSC meets or surpasses County, State and Federal Regulations and Legislation Excellent WSSC ENTERPRISE AM PLAN Risk Management SIGNIFICANT RISK REGISTRY: MANAGEMENT STRATEGIES

25 RISK MANAGEMENT RISK REGISTRY System Asset Types with Significant Risks Risk Strategy Risk Treatment Risk Manager Water Buried Wastewater Buried Inspection and Monitoring PCCP Transmission Mains Program PCCP Repair and PCCP Transmission Mains Replacement Continue to identify and "Single" Zone Feeds prioritize proposed projects Large Valves Inspection Program Large wastewater mains in Anacostia Inspection Program Basin Regions with high concentration of high Inspection Program risk Inspect 18 mi./yr. for 36" & larger pipes Recommended $10m/yr. Projects will be validated & addressed through the Business Case process. To be determined based upon findings of inspection program To be determined based upon findings of inspection program To be determined based upon findings of inspection program Utility Services Utility Services Engineering & Construction and Utility Services Utility Services Utility Services Utility Services Wastewater Facilities- Piscataway WWTP Wastewater Facilities - Broad Creek WWPS Tertiary Process-Filtration-Dirty Backwash Pumps P1 and P2 Secondary Treatment-Pipework and Valves Building -1 Secondary Treatment-Aeration Mix Tanks 2 and 3 Effluent-Pipework and Valves Force Main-Exposed Valves Pumping System Detailed Analysis of Risk Detailed Analysis of Risk Detailed Analysis of Risk Detailed Analysis of Risk Detailed Analysis of Risk Detailed Analysis of Risk To be determined based upon findings of analysis To be determined based upon findings of analysis To be determined based upon findings of analysis To be determined based upon findings of analysis To be determined based upon findings of analysis To be determined based upon findings of analysis Production Production Production Production Production Production WSSC ENTERPRISE AM PLAN FAILURE MODE ANALYSIS Preservation Plan CAPITAL PROJECTS RECOMMENDATIONS REHABILITATION & REPLACEMENT PROJECTS CAPACITY RELATED CAPITAL PROJECTS OPERATIONS AND MAINTENANCE STRATEGIES NEW AND/OR MODIFIED MAINTENANCE PROGRAMS NEW OPERATING STRATEGIES RESOURCES FTE NEEDED TO IMPLEMENT RECOMMENDATIONS PRESERVATION PLAN PHYSICAL MORTALITY FAILURE MODE ANALYSIS

26 PRESERVATION PLAN LOS FAILURE MODE ANALYSIS $250.0 $200.0 $225.8 $150.0 $100.0 $39.4 $17.6 $19.5 $50.0 $0.0 $8.5 $3.2 $1.1 PRESERVATION PLAN BURIED ASSETS O&M PROGRAM FUNDING REQUIREMENTS $3,500,000 $3,000,000 $3,500,000 $3,000,000 $2,500,000 $2,500,000 $2,000,000 $1,500,000 $2,000,000 $1,500,000 $1,000,000 $1,000,000 $500,000 $0 $500,000 $0 Small Valve Inspection Program Large Valve Inspection Program Leak Detection PCCP Inspection Program & Repair Non PCCP Condition Assessment Program WSSC ENTERPRISE AM PLAN Innovative Ideas & Strategies INITIATIVES OR STRATEGIES UNDERTAKEN TO INCREASE KNOWLEDGE OF THE INFRASTRUCTURE EXPANSION OF PROVEN CONDITION ASSESSMENT PROGRAMS I.E. EXPANSION OF ACOUSTIC FIBER OPTIC (AFO) PROGRAM NEW TECHNOLOGIES INVESTIGATION AND/OR PILOTING OF DIFFERENT OR NEW TECHNOLOGIES

27 WSSC ENTERPRISE AM PLAN Related Corporate Programs REPORT ON PROGRAMS WHICH IMPACT, SUPPORT AND/OR HELP ADVANCE ASSET MANAGEMENT DEVELOPMENT OF STRATEGIC ENERGY PLAN IMPLEMENTATION OF NEW COMPUTERIZED MAINTENANCE MANAGEMENT SYSTEM (CMMS) IMPLEMENTATION OF AM DECISION SUPPORT SYSTEM WSSC ENTERPRISE AM PLAN Business Improvement Plan TASKS THAT NEED TO BE COMPLETED TO IMPROVE THE CONFIDENCE WE HAVE IN ASSET MANAGEMENT PLANS DATA QUALITY AND COMPLETENESS ENHANCEMENTS TO THE ASSET MANAGEMENT PLANNING PROCESS TO IMPROVE THE QUALITY OF OUTPUTS LEVEL OF ANALYSIS BUSINESS IMPROVEMENT PLAN BUSINESS IMPROVEMENT PLAN Proposed Business Improvement Projects Work Order Data Improvement Project Preventative Maintenance Optimization Project Hydrogen Sulfide Gas Generation Model Project Description This project was developed as a response to inconsistencies that were present in work order data from previous AMP analysis The PM Optimization project was initiated to evaluate the effectiveness of two heavily used O&M activities, Chemical Root Control (CRC) and Preventative Maintenance Jetting (PM JET). A study to be undertaken to model the generation of H2S within the WSSC Collection System. Work Order Data Analysis Project This data improvement project would help better understand the trend of work orders generated and completed in the MMIS for the wastewater collections system group. 27

28 WSSC ENTERPRISE AM PLAN CHALLENGES, AND RISK ASSOCIATED WITH NOT EXECUTING THE AMPS PLANNED Organizational Opportunities RESOURCES INCLUDING RECRUITMENT AND TRAINING TECHNOLOGY TOOLS, ACCESS TO DATA AND INTELLIGENCE APPROACHES TO BE CONSIDERED TO MITIGATE RISK AND OVERCOME CHALLENGES ORGANIZATIONAL CULTURE AND CHANGE ADOPTION QUESTIONS

29 CORPORATE AMP FRAMEWORKS OCTOBER 26, 2014 CONTENT OVERVIEW OF KEY DRIVERS IN CANADA OVERVIEW OF TYPICAL CORPORATE AMP FRAMEWORK AND CONTENT EXAMPLES OF APPROACHES USED KEY AMP DRIVERS IN CANADA PSAB 3150 (TCA) - REQUIRES REPORTING OF TANGIBLE CAPITAL ASSETS ON FINANCIAL STATEMENTS, HOW MUCH HAS BEEN SPENT AND HOW THEY HAVE AMORTIZED RENEWED DRIVE TO ORGANIZE AND COLLECT ASSET DATA GROWING INTEREST IN ASSET MANAGEMENT AMONGST MUNICIPALITIES SUPPORTED BY ORGANIZATIONS SUCH AS CANADIAN NETWORK OF ASSET MANAGERS (CNAM) SEVERAL MUNICIPALITIES HAVE STATED COUNCIL PRIORITIES TO DEVELOP ASSET MANAGEMENT PLANS NEW PROVINCIAL REQUIREMENTS TO DEVELOP ASSET MANAGEMENT PLANS IN ONTARIO EXPLICITLY LINKED TO REQUESTS FOR PROVINCIAL FUNDS OTHER PROVINCES EXPECTED TO FOLLOW

30 PURPOSE OF THE CORPORATE AMP 1. PROVIDES AN EASY TO DIGEST SUMMARY OF OVERALL CITY STATUS 2. IS UNDERSTANDABLE BY CITY COUNCIL AND ELECTED REPRESENTATIVES 3. ENABLES DECISIONS TO BE PUT INTO CITY WIDE CONTEXT 4. ELECTED MEMBERS OF COUNCIL AND STAFF ARE IN A BETTER POSITION TO ENSURE ANY DECISIONS TAKE INTO ACCOUNT FUTURE GENERATIONS 5. ENSURES COUNCIL DO NOT FACE ANY SURPRISES IN MANAGING CITY ASSETS 6. THE IMPLICATIONS OF BUDGET ALLOCATIONS AND KEY POLICY DECISIONS CAN BE BETTER LINKED TO CUSTOMER AND STAKEHOLDER OUTCOMES THE CORPORATE AMP TWO COMMON TECHNIQUES: OPTION 1 SUMMARY APPROACH Long-Term Strategic Documents High level Strategic Docs inform Department AMPs to support efficient & effective delivery of LOS, asset stewardship and contribution to City longer term goals Dept 1 AMP Dept 2 AMP Dept 3 AMP Corp AMP summarizes key messages from the Department AMP s. Looks at medium to long-term funding requirements across the corporation. Highlights LOS impacts. Corporate AMP THE CORPORATE AMP Long-Term Strategic Documents Corporate AMP TWO COMMON TECHNIQUES: OPTION 2 CYCLICAL APPROACH Corp AMP guides Department AMPs as to the Corporation s longer term direction Provides City wide view on risk and recommends focus areas for funding Guides Departments to enable a more integrated approach to rehab and renewal Defines how Departments will work together to achieve goals, while following through on Council Priorities & Objectives Dept 1 AMP Dept 2 AMP Dept 3 AMP Guide efficient & effective delivery of LOS, asset stewardship and contribution to City longer term goals Provide bottom-up feedback on LOS, Risk, and needs

31 COMMON CHALLENGES DEPARTMENTS & TEAMS AT DIFFERENT LEVELS OF MATURITY FEW/NO SERVICE AREA AMPS TO DRAW UPON PERCEIVED LACK OF DATA: LEVELS OF SERVICE ASSET CONDITION & PERFORMANCE RISK ONTARIO AMP REQUIREMENTS Building Together FUTURE PROVINCIAL CAPITAL FUNDING WILL BE CONDITIONAL ON MOI Guide for Asset management Plans MUNICIPALITIES ENSURING THAT THEIR ASSET MANAGEMENT PLANS INCLUDE, AT MINIMUM, ALL OF THE CONTENT DESCRIBED IN THE MOI GUIDELINES AS A CONDITION OF FUTURE PROVINCIAL INFRASTRUCTURE FUNDING, MUNICIPALITIES WILL BE REQUIRED TO DEMONSTRATE THAT A FULL RANGE OF AVAILABLE FINANCING AND REVENUE GENERATION TOOLS HAS BEEN EXPLORED VIEWS ASSET MANAGEMENT PLANS AS LIVING DOCUMENTS THAT REQUIRE CONTINUAL UPDATES AND IMPROVEMENTS TYPICAL CORPORATE AMP FRAMEWORK 1. Executive Summary Overview of AMP 2. Introduction Purpose of AMP Plans Link to City Goals & Objectives Assets/Services covered Timeframe 3. State of Local Infrastructure Inventory, condition, age, valuation etc Conclusions regarding data 7. Plan Improvement & Monitoring (Not an MOI requirement) Monitoring & Review Performance Measures 4. Desired Levels of Service LOS metrics in place Current & expected performance Anticipated impact of external trends 5. Asset Management Strategy Asset Mgt approach for option analysis, enabling growth, meeting legislation etc Approach to lifecycle management of assets. 6. Financing Strategy Past expenditures Future Expenditures & Revenues Scale of Infrastructure Deficit Strategies for addressing the deficit 9

32 SECTION 3. STATE OF LOCAL INFRASTRUCTURE 3.1 Asset Inventory 3.2 Asset Valuation 3.3 Asset Useful Life 3.4 Asset Condition 3.5 Summary Asset Condition Levels Information is often patchy and inconsistent. How can we answer this? CANADIAN INFRASTRUCTURE REPORT CARD (2012) Grade Summary Definition 1 Very Good The infrastructure in the system or network is generally in very good condition, typically new or recently rehabilitated. A few elements show general signs of deterioration that require attention. 2 Good The infrastructure in the system or network is in good condition; some elements show general signs of deterioration that require attention. A few elements exhibit significant deficiencies. 3 Fair The infrastructure in the system or network is in fair condition; it shows general signs of deterioration and requires attention. Some elements exhibit significant deficiencies. 4 Poor The infrastructure in the system or network is in poor condition and mostly below standard, with many elements approaching the end of their service life. A large portion of the system exhibits significant deterioration. 5 Very Poor The infrastructure in the system or network is in unacceptable condition with widespread signs of advanced deterioration. Many components in the system exhibit signs of imminent failure, which is affecting service. Developed by: Federation of Canadian Municipalities Canadian Society for Civil Engineers Canadian Public Works Association and Canadian Construction Association 11 CONDITION ASSESSMENT APPROACH 1.MAP EXISTING TECHNICAL RATINGS TO THE 5 POINT SCALE. FOR EXAMPLE: WRC SEWER RATINGS PAVEMENT QUALITY INDEX FACILITY CONDITION INDEX 2. IN THE ABSENCE OF EXISTING TECHNICAL RATINGS, USE A COMBINATION OF : a.age (TCA) b.plus EXPERT KNOWLEDGE (WORKSHOP REVIEW) Grade Summary Remaining Useful Life 1 Very good: 80% of UL 2 Good: 60-80% of UL 3 Fair: 40-60% of UL 4 Poor: 20-40% of UL 5 Very poor: <20% of UL 12

33 WASTEWATER EXAMPLE 13 WASTEWATER EXAMPLE Applied To Other City Departments Fair Good Good Fair Fair Good Good 15

34 CITY WIDE OVERVIEW 16 SECTION 4. LEVELS OF SERVICE DESCRIBE KEY LOS MEASURES FOR EACH DEPARTMENT / SERVICE AREA DISCUSS EXTERNAL TRENDS & ISSUES (E.G CLIMATE CHANGE) SHOW CURRENT PERFORMANCE AGAINST TARGET SHOW PREDICTED TRENDS OVER PLAN PERIOD OVERALL CONDITION PROFILE RISK TO SERVICE DELIVERY PROJECTED SERVICE LEVELS IN ABSENCE OF DATA, MAKE QUALITATIVE ASSESSMENTS COMMENT ON KEY ISSUES & CONCERNS Flooding of Properties Flooding adj to Properties CSO Performance Provide supporting commentary on causal factors and link directly to AM Strategies Odor Complaints Section 4. Example of LOS Performance

35 Section 7. Plan Improvement & Monitoring Task Task Responsibility Resources Timeline No. Required 1 Update and revise the Corporate Asset Internal Annual Plan to reflect changes in Planning part of the the asset portfolio and Business business practices Plan and Budget Process 2 Develop Corporate Level Corporate Asset External and Q of Service practices Planning Internal corporate template, procedure and process 3 Level of Service Parks, PW Internal and Q to development for Operations, Corp External Q roadways and parks Asset Planning 4 Develop Corporate Life AM & CMMS Internal Q Cycle Costing practice Network, Finance template, procedures and and Corp Asset policy Planning 19 QUESTIONS? 20

36 ASSET LEVEL AMP OVERVIEW DISTRIBUTION MAINS OCTOBER 26, 2014 ASSET MANAGEMENT PLANS WITHIN EPCOR WATER Integrated Resource Plan Enterprise level Updated bi-annually Long-term planning Major Categories: Supply Considerations Demand Considerations External Factors Financial Factors Asset Summary System level Risk assessment and current program planning Major Categories: Asset Description Asset Inventory Data Management Operation & Maintenance Failure and Repair Replacement References and Studies Sub-Asset Summary Material or appurtenance specific Knowledge transfer Major Categories: Specific description Inventory Design and Construction Considerations Failure and Repair DISTRIBUTION MAINS SAMPLE ASSET SUMMARY

37 ASSET DESCRIPTION Definition Purpose Sizing Standard location and depth Typical design standards Related appurtenances Charts, Tables and Maps Size Material Installation years Location ASSET INVENTORY DATA MANAGEMENT Record types Record locations / systems GIS quality / accuracy Deficiency identification Past work orders / maintenance Inspection records Field locating

38 OPERATION AND MAINTENANCE Preventative maintenance programs Description (activities, frequency, crew size) Driving factors Inspection programs Frequency Driving factors Isolations Process Restrictions FAILURE AND REPAIR Failure Overview Causes Typical impacts Level of service requirements Repair overview Event management Managing main breaks Third party damage Causes Recovery Addition Growth process Replacement Current programs Funding Replacement criteria Abandonments Process REPLACEMENT

39 REFERENCES AND STUDIES Manufacturer information Benchmarking studies Depreciation / Asset life calculations Criticality studies Optimization studies Project charters Risk assessments SUB-ASSET SUMMARY SUB-ASSET SUMMARIES Individual Pipe Materials PVC, Cast Iron, Steel, Concrete Cylinder, etc. Hydrants Valves Gate, butterfly, check, zone separation, etc. Air vents Chambers Utilidor

40 SUB-ASSET SUMMARIES Additional information Specific asset inventory Installation period Service life Specific failure modes and impacts Repair techniques Installation methods Construction requirements Benefits and disadvantages QUESTIONS

41 2012 International Asset Management Performance Improvement Project Asset Management Plans Implementation Including Failure Mode and RCM Portland Water Bureau Jeff Leighton LEADING PRACTICE KEY MESSAGE DEVELOPMENT OF COMPREHENSIVE DOCUMENTS THAT CAPTURE THE STATE OF THE ASSET CLASS AND EXISTING MANAGEMENT STRATEGIES INVOLVED MORE OF THE ORGANIZATION AS ACTIVE PARTICIPANTS IN ASSET MANAGEMENT ADVANCED THE ORGANIZATION IN IDENTIFYING FAILURE MODES, RISK OF ASSET FAILURE, AND MAINTENANCE STRATEGIES BACKGROUND / CONTEXT ASSET MANAGEMENT GROUP (AMG) STARTED IN BUSINESS PROCESSES FOR RISK, BUSINESS CASE DEVELOPMENT AND SERVICE LEVEL TARGETS AMONG FIRST AREAS OF FOCUS. AMPS PREPARED FOR SOME ASSET CLASSES BY AMG IN ASSET MANAGEMENT STEERING COMMITTEE (AMSC) IDENTIFIED AMP DEVELOPMENT FOR ALL ASSET CLASSES AS A PRIORITY IN 2010.

42 LEADING PRACTICE DESCRIPTION KEY MILESTONES: INTERNAL GUIDANCE DOCUMENT PREPARED COMPUTER FILE TEMPLATE DEVELOPED TECHNICAL WRITER PROVIDED KEY MILESTONES: AMP CO-LEADS DESIGNATED AND TIMELINE SET AMP CO-LEADS MONTHLY MEETING, TRAINING & EXAMPLES CO-LEADS PRESENT TO AMSC LEADING PRACTICE DESCRIPTION LEADING PRACTICE DESCRIPTION CAPTURE EXISTING KNOWLEDGE ON ASSET INVENTORY, CONDITION, SERVICE LEVELS AND CURRENT MAINTENANCE STRATEGIES

43 LEADING PRACTICE DESCRIPTION DEFINE FAILURE MODES, ASSET LIFE, AND RISKS OF ASSET FAILURE LEADING PRACTICE DESCRIPTION DEFINE FAILURE MODES AND EFFECTS, AND MAINTENANCE STRATEGIES Failure Code what an operator or nontech would say has happened to the asset. Pump assembly fails Component Code what part of the asset failed Coupling Failure Code what a tech identified Over/under lubrication 7. Pump Stations 2.4, Reduce maintenance on redundant assets, including -Base pump oil analysis on run time: Every 2 years for non-lead pumps and every year for lead pumps -Reduce motor starter PM to once every two years for motors on nonlead pumps 7. Pump Stations 2.6 Perform PM on critical subcomponents such as generator fuel and batteries including -Replace batteries every 3 years [possibly more often] -Have technicians present for generator start test -Test fuel every quarter for contaminants -Add pressure vacuum vent on outside fuel tanks LEADING PRACTICE DESCRIPTION DEFINE MAINTENANCE AND REPLACEMENT STRATEGIES

44 DEMONSTRATED OUTCOMES AND BENEFITS UNDERSTANDING OF CURRENT STATE OF THE ASSET IDENTIFICATION OF INFORMATION GAPS IDENTIFICATION OF ADDITIONAL ASSET RISKS DOCUMENTATION OF CURRENT MANAGEMENT STRATEGIES AND RECOMMENDATIONS FOR FUTURE ACTIONS CULTURE CHANGE Content covered by co-leads from Planning and Subject Matter Expert in Engineering (For Conduits) SUPPORT FROM AMSC ESSENTIAL TO OVERCOME BARRIERS PROVIDING A FRAMEWORK WAS KEY (GUIDANCE DOCUMENT, CO- LEADS MEETING AND EDUCATION, EXAMPLES PROVIDED AHEAD OF WHEN WORK FROM DONE) ACTING ON THE RECOMMENDATIONS (E.G., ON MANAGEMENT STRATEGIES) IS OUR NEXT BIG CHALLENGE. IMPLEMENTATION ISSUES, LESSONS LEARNT AND REMAINING CHALLENGES

45 LEVELS OF SERVICE OCTOBER 26, 2014 LEVELS OF SERVICE (LOS) DEFINED Key performance indicators as targets for utility performance Key business driver which describe the outputs the organization intends to deliver to customers; Commonly relate to service attributes such as quality, reliability, responsiveness, sustainability, timeliness, accessibility and cost; WHY LEVELS OF SERVICE? Focus your efforts on common goals and targets Ensures performance is measured and in turn sustained or improved Clearly communicate expectations and options to customers Increased services equals increased costs Discussion of trade-offs and risks between options Negotiate with regulators and council/commission/board Service levels O&M and capital costs and budgets Rate impacts Level of risk

46 DETERMINING LEVELS OF SERVICE Research Industry Select Potential Measures Determine Potential Targets Review Measures & Targets with Community Update Measures & Targets as per Input Implement Measures Measure! Review & Update HIERARCHY OF LEVELS OF SERVICE Key Service Levels (Strategic Goals) Effectiveness Measures (Program Level Objectives) Sub-program Metrics (Activities and Outcomes) LOS HOW IT DRIVES WHAT WE DO IN ASSET MANAGEMENT PLANNING Strategic Review STRATEGIC PRIORITIES WHAT HAVE WE ACHIEVED? HOW WELL HAVE WE IMPLEMENTED THE CAPITAL, O&M PROGRAMS? Level of Service Reporting Implementation Reporting AMPs Levels of Service Asset Performance Standards WHAT DO WE WANT OR NEED TO DELIVER TO OUR CUSTOMERS & STAKEHOLDERS? (TARGETS, GOALS) HOW DO THE ASSETS NEED TO PERFORM? WHAT CAPITAL, OPERATIONS & MAINTENANCE PROGRAMS ARE NEEDED?

47 LOS HOW IT DRIVES HOW WE DO OUR WORK WHAT HAVE WE ACHIEVED? HOW WELL HAVE WE IMPLEMENTED CHANGE? Level of Service Reporting Implementation Reporting Strategic Review AMPs STRATEGIC PRIORITIES Levels of Service Performance Standards WHAT DO WE WANT OR NEED TO DELIVER TO OUR CUSTOMERS & STAKEHOLDERS? (TARGETS, GOALS) HOW EFFICIENT AND EFFECTIVE DO WE NEED TO BE IN PERFORMING OUR WORK? WHAT RESOURCES DO WE NEED? EXAMPLE 1 LEVELS OF SERVICE AT WSSC WSSC LOS FRAMEWORK WSSC S FRAMEWORK HAS THREE MAJOR COMPONENTS: 1. FIVE LOS VALUE STATEMENTS EXTERNAL 2. STRATEGIC PRIORITIES DASH BOARDS INTERNAL MEASURES

48 WSSC LOS VALUE STATEMENTS WSSC LOS VALUE STATEMENTS PERFORMANCE WSSC STRATEGIC PRIORITIES DASHBOARD THREE IMPORTANT COMPONENTS FOR THE DEVELOPMENT OF THE DASHBOARD: 1. STRATEGIC PRIORITIES DESCRIPTION 2. ASSET MANAGEMENT PROGRAM HIERARCHY 3. DETERMINATION OF HOW EACH OF THE 68 MEASURES CONTRIBUTES TO THE STRATEGIC PRIORITIES AND AT WHICH LEVEL OF THE HIERARCHY.

49 WSSC STRATEGIC PRIORITIES AMP INFRASTRUCTURE ENVIRONMENTAL STEWARDSHIP FINANCIAL STABILITY CUSTOMER SERVICE SECURITY & SAFETY NON AMP WORKFORCE MANAGEMENT PROCUREMENT COMMUNICATIONS & STAKEHOLDER RELATIONSH FRAMEWORK HIERARCHY AND PERFORMANCE MEASURES CONTRIBUTIONS SUSTAIN INFRASTRUCTURE: PLAN, INVEST AND RENEW OUR INFRASTRUCTURE TO MEET CUSTOMER EXPECTATIONS THROUGH INNOVATIVE, COST- EFFECTIVE TECHNOLOGY, AND WORLD CLASS ASSET MANAGEMENT PRACTICES DASHBOARD DEVELOPMENT THIS PART OF THE FRAMEWORK IS STILL UNDER DEVELOPMENT. PLAN IS TO PILOT IN 2015

50 Number Strategic Priority EXAMPLE PERFORMANCE MEASURES TABLE LOS Value Statement Water and wastewater 1 Infrastructure services are reliable and sustainable Water and wastewater 2 Infrastructure services are reliable and sustainable Water and wastewater 3 Infrastructure services are reliable and sustainable Water and wastewater 4 Infrastructureservices are reliable and sustainable KPM x Performance Measure The actual percentage of programmed Programmed investment completion capital investment against the fiscal year % completion budget. Excludes Blue against budget Plains and DSG expenditures. Confidence Level Rating of Enterprise AMP exceeds X% % Length of miles of sewer pipe inspected via closed circuit television and cleaned VS budgeted length Collection system failures per 100 miles of sewer pipe per FY Definition Formula Scoring = 100 * (the total $ - Blue Plains - DSG $ spent in the FY) / (total $ in the fiscal year budget - Blue Plains $ - DSG $) % actual % of compliance to Long term goal 100% 100% 95-99% 90% % 70% % 40% < 80% 0% % actual % of compliance to Long term goal The Confidence Level = the actual CLR score of >=90% 100% Rating (CLR) score of Enterprise AMP % 90% Enterprise AMP % 70% % 40% < 70% 0% The total number of = (100) * (miles of sewer miles of sewer pipes pipes inspected and/or being inspected via cleaned in the Fiscal Year) / CCTV and/or cleaned in (miles of sewer pipe the fiscal year, budgeted for inspection expressed as and/or cleaning in the Fiscal percentage of the Year) budgeted length. Total number of failures (main line break or leak, = (100) * (total # of sewer confirmed partial or collection system failures in total blockage) in the the fiscal year) / (the total sewer collection system miles of sewer pipes) per 100 miles of pipe on an annual basis (per FY). Reporting Level Team/Gro up Responsibl e Teams Involved Facility / Engineerin Engineerin WDS / WTS / g and g and WWCS / Constructio Constructio B&G n n / Finance Enterprise WWCS WWCS Engineerin g and Constructio n Customer Care Customer Care Engineerin g and Constructio n Customer Care Customer Care Focus Performance & Reliability Performance & Reliability Reliability & Customer Satisfaction Performance & Reliability & Customer Satisfaction Short Term Target Long Term Goal Timeframe Data Available? (Y/N) 90% 100% Current Y 70% >80% Current N 97% 97% Current Y TBD TBD Current Y EXAMPLE 2 LEVELS OF SERVICE WITHIN EPCOR WATER EWSI EXTERNAL PERFORMANCE MEASURES Written into a city bylaw Directly impact water rates Tracked monthly Reported annually Externally audited Reviewed and updated every 5 years Supported by internal measures

51 EWSI LOS CATEGORIES 5 Customers Indexes System reliability Water quality Customer service Environmental Safety Fire Department Obligations Hydrant availability Description Benchmark Standard System Reliability Index Water Main Breaks Repair Duration Planned Construction Water Pressure Water Loss (ILI) # of breaks % fixed < 24 hour % compliance # times < 20 psi leakage index % 95.0% Water Quality Index 99.6% Customer Service Index Post Service Audit Response Time Home Sniffing Factor Environmental Index ER Training Reporting Complete Incident Reporting Water Conservation Watershed Program Activity Safety Index Safety Meetings Safe Work Plans First Aid Training Work Site Inspections Lost Time Frequency Injury Frequency Rate Injury Severity Rate % satisfied min to confirm % satisfaction # of exercises % target # of incidents m 3 / residential household # completed # of meetings # completed % staff trained # frequency rate frequency rate frequency rate 74% % 4 100% % EWSI INTERNAL PERFORMANCE MEASURES Reported monthly or quarterly Drive efficiency Meet contractual obligations Prevent water quality incidents Improve customer service Reviewed and updated annually Examples Avg. days between in-service and GIS Repair cost per main break Valves found in wrong status Avg. days to complete paving Time to fix minor leaks MEASURING AND MONITORING

52 HOW LOS DRIVES ASSET MANAGEMENT Performance Measure Maximum Total Breaks Break Confirmation & Repair Time Relation to Asset Management Replacement and Rehabilitation Planning and Funding Risk of Asset Failure Useful Life Evaluation Asset Data Management Maintenance Framework and Planning Asset Data Management Replacement and Rehabilitation Planning and Funding Asset Management Plans Water Loss Condition Assessment Repair Costs Asset Inventory and Replacement Value Maintenance Framework and Planning Asset Failure Modes Capital Execution Replacement and Rehabilitation Planning and Funding Net Income Replacement and Rehabilitation Planning and Funding Asset Management Plans Business Case Analysis for Investments LEVELS OF SERVICE GROUP EXERCISE QUESTIONS

53 RISK OF ASSET FAILURE OCTOBER 26, 2014 Business Risk: WHAT IS RISK? The threat that an event, either an action or inaction, will adversely affect an organization's ability to achieve its business objectives Asset Risk: The threat that the failure of an asset poses to an organization A measure of criticality A function of the consequences and probability of failure Consequence of Failure Likelihood or Probability of Failure Risk of Failure WHY MANAGE ASSETS BASED ON RISK? Avoid and minimize the risks themselves Increased costs, Supply outages, Property damage, Violations Ensure sound decision making based on existing business vulnerabilities Reduced liability exposure through due diligence Meet required levels of service and contract obligations

54 RISK OF ASSET FAILURE IN ASSET MANAGEMENT Identify the likelihood and consequence of failure of assets. Establish business risk management policy. Rank risks of asset failure. Assess risk mitigation options. Assess condition / failure modes Determine the business risk or criticality. TYPES OF ASSET FAILURES Failure Mode Capacity Performance or LOS Efficiency or Cost Delivery Mortality or Deterioration Definition Demand for service or volume exceeds design capacity Unable to perform reliability or meet required levels of service or regulations Operating costs are unacceptable or exceed other alternatives Deterioration reduces performance below an acceptable level DETERMINING THE LIKELIHOOD OF FAILURE Not an exact science Dependent on the failure mode Potential Resources: Asset history (number of past failures, average time between failures) Maintenance history Condition Assessments Inspections Industry information (benchmarking studies, supplier information, deterioration curves) Employees (knowledge and experience)

55 DETERMINING THE LIKELIHOOD OF FAILURE Distinct Assets (Tanks, pumps, etc.) Individual Asset Condition Rating Good condition - Poor Condition No repairs required Major rehabilitation required Linear Assets (Water mains, valves, hydrants) Reoccurrence interval for single asset failure (5 100 years, local verses industry failure) Failure rate of population (breaks / km, % of assets) DETERMINING THE CONSEQUENCE OF FAILURE Utility - Safety incidents - Repair costs - Resource demands - Damage claims and lawsuits - Mitigation costs during failures - Production and product loss - Reputation damage Customers - Property damage - Service outage impacts - Health risks Community - Environmental impacts - Economic strain - Emotional strain - Traffic delays - Restricted access to businesses RATING THE CONSEQUENCE OF FAILURE Actual cost of failure Extent of potential failure Minor Component Failure Overall consequence Major Asset Failure Multiple Asset Failure Significant System Failure Very Low Moderate High Extreme

56 RATING THE CONSEQUENCE OF FAILURE Criticality or Impact on Process No impact Impacts single process, no lost production Impacts multiple processes, lost production Mandated by Regulations Category Specific (i.e. safety risk) First Aid Medical Treatment Restricted Duty Fatality CALCULATING RISK Cost Based Business Risk = Cost of Failure x Likelihood of Failure Compare Cost of Replacement vs. Cost of Failure Directly compare risks for a wide variety of assets Overall Risk Matrix comparing consequence and likelihood Provide overall risk (very high very low) Identifies critical assets Quick overview of system risk EXAMPLE 1 RISK ASSESSMENT WITHIN EPCOR

57 LIKELIHOOD Remote Rarely Very Unlikely Unlikely Likely Almost Certain 1 in 100 years 1 in 30 years 1 in 10 years 1 in 3 years Once per year Remote chance of happening Heard of in the industry Has happened at EPCOR or in the industry in the last 10 years Has happened at EPCOR or more than once per year in the industry Has happened at the location about once per year More than once per year Has happened more than once per year at the location Health & Safety Fatality; or Multiple Fatalities First Aid (On & Off Site) Environmental Release/Spill: Reportable - massive adverse effect, persistent nonrecoverable damage Water Quality: Severe violation resulting in widespread or serious waterborne illness in the general population and/or fatalities. Release/Spill: Non-reportable - on-site Water Quality: Isolated and contained variance with no risk to public health. CONSEQUENCES Regulatory Major violation resulting in extreme action; significant fines; or Regulatory response with significant penalties, receipt of Enforcement Orders or prosecution No noticeable impact on regulator; or No notification required, contravention of internal limits but within regulatory requirement Reputation External Relations Customer Impact: Very large customer group / multiple critical customers with major service disruption or concern Stakeholder / Political Action: Extreme Political action taken Media: National and International coverage, global Social Media Customer Impact: Small customer group with minor service disruption or concern Stakeholder / Political Impact: minor or limited concern Media No attention/coverage People Employees: Reduced engagement company-wide; Long term multiple union action; Unable to attract / retain key resources Employees: Reduced engagement within immediate employee work area (S1 ); Financial > $5M < $50K Risk Scores not dollar values Consider overall risk score and individual categories Plot assets or groups of assets to assess system risk Evaluate reduction of risk through potential replacement or rehabilitation 6X6 RISK MATRIX

58 EXAMPLE 2 RISK ASSESSMENT WITHIN PORTLAND WATER BUREAU RISK OF ASSET FAILURE

59 RISK OF ASSET FAILURE EXERCISE

60

61 QUESTIONS

62 BUSINESS CASE ANALYSIS OCTOBER 26, 2014 LEARNING OBJECTIVES HOW ASSET MANAGEMENT PLANS DRIVE DEVELOPMENT OF CANDIDATE ACTIONS HOW THE BUSINESS CASE FOR CANDIDATE ACTIONS SHOULD BE CONSTRUCTED THE KEY CHECKS AND CONTROLS THAT SHOULD BE PUT IN PLACE TO ENSURE THAT: CANDIDATE ACTIONS ARE CONSISTENTLY EVALUATED OPTIMUM SOLUTIONS ARE PROMOTED AND ADVANCED AMP HIERARCHY & ACTIONS Corporate / Enterprise Network System / Portfolio Asset High Level Strategies Detailed Needs Candidate Actions How do we test that we re doing the right things? How do we know we are using $$$ wisely?

63 EXAMPLE OF AM STRATEGIES LEADING TO BUSINESS CASE REQUIREMENT Linking investments to customer outcomes Goals Needs Solutions Priorities Clearly Defined LOS Robust approach to identifying legislative, growth, efficiency and LOS enhancement needs Risk Based approach to identifying LOS maintenance needs (i.e Renewal & Rehab) Asset Management Planning Approaches Business Case Evaluation Investment linked to maintaining or improving specified LOS Investment linked to customer outcomes Project Prioritization Investment Plan Develop optimum affordable plan What is the need? How will services to customers be affected? What is the magnitude of any risk? CHECKS & CONTROLS What is the best option to go for? Are our customers getting the best value for money? What are the relative benefits of candidate projects? In which order / budget cycle can we do these projects? Validate Needs Validate Solutions Validate Priorities Tools and Techniques Asset Risk Management Business Cases BC Review Sessions Project Prioritization Residual Risk Sessions

64 WHY UTILIZE A BUSINESS CASE FRAMEWORK BUDGETS ARE USUALLY LIMITED AND THE TOTAL OF THE CANDIDATE ACTIONS USUALLY EXCEEDS BUDGET ENGINEERING ORGANIZATIONS ARE OFTEN VERY PROJECT FOCUSED. WITHOUT A BUSINESS CASE FRAMEWORK: PROJECTS MAY NOT ALWAYS ADDRESS AN ACTUAL OR WELL DEFINED NEED PROJECTS MAY NOT ALWAYS OFFER THE OPTIMUM SOLUTION INVESTMENTS MAY THEREFORE NOT ALWAYS CONSTITUTE THE BEST USE OF $$$ FOR CUSTOMERS AND STAKEHOLDERS A BUSINESS CASE FRAMEWORK HELPS TO ENSURE THAT ALL CANDIDATE ACTIONS ARE BASED UPON: A VALID NEED FOR SOME SORT OF ACTION ALL FEASIBLE OPTIONS HAVE BEEN CONSIDERED THE OPTIMUM SOLUTION IS BEING PROPOSED THERE IS A CLEAR LINK BETWEEN $$$ SPENT AND CUSTOMER/STAKEHOLDER OUTCOMES BUSINESS CASE PHILOSOPHY NEEDS OPTIONS CHOICES Encourage Departments to be creative in their planning and to find innovative solutions by focusing on business need and service delivery requirements TYPICAL BUSINESS CASE STRUCTURE Part 1 Part 2 Part 3 Part 4 Part 5 Summary Information & Driver Allocation Business Need Analysis Options Analysis & Whole Life Costing Preferred Solution Details Capital Cost, O&M Cost & Funding Details

65 PART 1 SUMMARY INFO & DRIVER ALLOCATION PROJECT NUMBERING SYSTEM (TO BE CREATED AS REQUIRED) PROGRAM CATEGORIES (E.G. WW, TREATMENT) RELEVANT INVESTMENT DRIVERS / SUB DRIVERS & ALLOCATION % SIMPLE ALLOCATION OF BUDGET TO SOME HIGH LEVEL DRIVER CATEGORIES (E.G MAINTENANCE OF SERVICE, ENHANCEMENT OF SERVICE, GROWTH) PROVIDES BETTER VISIBILITY OF SPEND OVER TIME LINKS TO CITY POLICIES, STRATEGIES OR DIRECTIVES PART 2 BUSINESS NEED ANALYSIS Part 2 Description of Business Need Nature and Extent of the Problem/Opportunity Renewal & Rehab Describe the nature of the problem: this is usually some kind of breakdown or condition of the assets. Be specific. Avoid general terms such as poor condition. Quantify historic failure rates or indicators. Quantify the consequences to stakeholders if no investment is made Root Cause Simple bullet point list Project Synergies List other projects in the capital program with significant synergies One project enables another Project is part of high level strategy Combination of projects deliver cost savings Growth & Enhancement Quantify the new requirement and timing. Quantify the current performance and current capability of the assets. Quantify the scale of the shortfall and the consequences to stakeholders if no investment is made. Consequences Simple bullet point list with quantities Evidence & Data Simple bullet point list of sources of evidence and data to validate the business need PART 3 OPTIONS ANALYSIS & WLC IS THERE A MINIMUM SPEND OPTION THAT ONLY DEALS WITH CRITICAL NEEDS AND DEFERS/ TEMPORARILY MITIGATES THE REMAINDER OF THE NEEDS? ARE THERE A RANGE OF OPTIONS THAT DELIVER DIFFERENT LEVELS OF SERVICE FOR DIFFERENT LEVELS OF SPEND? IS THERE AN OPTION WITH AN ALTERNATIVE BALANCE OF CAPITAL VS O&M COST? IS THERE A SYSTEM RECONFIGURATION OPTION RATHER THAN LIKE-FOR-LIKE REPLACEMENT? ARE THERE OTHER SOFT SOLUTIONS THAT MAT REDUCE THE NEED (E.G DEMAND MANAGEMENT)

66 PART 3 OPTIONS ANALYSIS & WLC Discounted cash flow techniques should be used to estimate Whole Life Costs typically Net Present Value (NPV). NPV sets out the year-by-year future cash flows (+ve and ve) associated with the solution option and then discounts the combined cash flow back to a present day value. It is important that the numbers used in the assessment represent actual cash $ that may leave or enter the business and should not include any financial accounting effects such as depreciation. The convention is costs are positive numbers and benefits are negative numbers. Whole Life Costs should include four elements: 1. Initial Capital cost the upfront capital expenditure of the project 2. Change in O&M cost the change in operating expenditure 3. Future renewal & rehab of the assets 4. Any asset disposal costs(if applicable) The WLC for each option must use the same time horizon PART 4 PREFERRED SOLUTION DETAILS SOLUTION DESCRIPTION AND RATIONALE BASIC RATIONALE IS TO CHOOSE LOWEST WHOLE LIFE COST SOLUTION WITH AN ACCEPTABLE DEGREE OF RESIDUAL RISK KEY ASSUMPTIONS AND SENSITIVITIES DELIVERABILITY RISKS OR ISSUES MAJOR ISSUES SUCH AS LONG LEAD ITEMS, LAND ACQUISITION, PERMITS ETC ESTIMATED SCHEDULE PLUS PROJECT DEPENDENCIES OR COORDINATION PART 5 CAPITAL, O&M & FUNDING DETAILS CAPITAL - CAPITAL INVESTMENT REQUEST O&M - NET CHANGE IN OPERATING BUDGETS FOLLOWING BENEFICIAL COMPLETION OF THE PROJECT FUNDING SOURCES COSTING ACCURACY (E.G AACE COST ESTIMATE CLASS 1-5)

67 Initial Investigation Class 5 Outline Business Case Study Class 4 COSTING ACCURACY Final Business Case Class 3 Design Class 2 Class 1 Construct & Commission Acceptance Test Costing accuracy should be appropriate to the stage of the project at the point that the investment plan is compiled Target is Class 3 estimates for annual capital budgeting Warranty Period Investigate & Analyze BUSINESS NEED - SEWER LATERALS EXAMPLE Problem: Steady increase in sewer lateral repairs year on year. Increasing Opex spend for repairs. Backlog on Ops Whiteboard Connections with limited/poor flow Lines can be on for 1-2months Complete blockage results in urgent action Replacements down repairs up Backup Complaints Why coding jobs is useful and important... Obstruction Total Need to identify Tree Roots 714 N/A 143 Root Cause(s)... Other 87 Main Ok 72 Tie In's 66 Deterioration 44 Bad Pipe 33 Tree Roots/Bad Pipe 29 Sag 25 Develop Options Problem: Despite inspections there have been a number of $$$ costly capital repairs required. A patch repair cannot always be achieved, lifespan of major civil assets are shortened. Investigate & Analyze BUSINESS NEED - RESERVOIR INSPECTIONS EXAMPLE Current situation: 4-5 year cleaning cycle. Ops call Engineers to do inspection when empty. Inspections vary and do not seem to follow a structured and standard audit / checklist Inspections fall short of recognized good practice Could the expensive repairs have been prevented by an enhanced Inspection Program? What other problems would this help prevent in the future? What options have we got and how much will it cost to implement? Develop Options

68 BUSINESS CASE EVALUATION AIM IS TO MAKE THIS A SIMPLE 3-5 PAGE DOCUMENT WHICH SUMMARIZES ANY PROJECT IN THE SAME WAY AND ESTABLISH CONSISTENT APPROACH FOR ALL PROJECT SPONSORS AND REVIEWERS REFER TO SUPPLEMENTARY STUDIES AND DOCUMENTATION FOR INCREASING DETAIL BEHIND NEEDS AND OPTIONS AS $$$ VALUE INCREASES FOCUS ON ENSURING NEED IS ROBUSTLY ESTABLISHED AND THAT OPTIONS ADDRESS NEED AT LOWEST WHOLE LIFE COST IMPLEMENT INDEPENDENT/PEER REVIEW AND CHALLENGE SESSIONS LINK TO CAPITAL INVESTMENT PRIORITIZATION AND BUDGETING PROCESSES WORKED EXAMPLE & EXERCISE

69 BUSINESS CASE EXERCISE

70 ENTERPRISE ASSET MANAGEMENT PLAN (EAMP) SESSION 1 OCTOBER 26, 2014 WSSC ENTERPRISE ASSET MANAGEMENT PLAN EVOLUTION High Level Forecast Enterprise AM Plan High Level Assessment of 11 Asset Groups (Systems) 5 Detailed AM Plans & High Level Analysis of Systems 1 WWTP 1 WWPS 1 Collection System Basin Transmission & Distribution Pipes High Level Systems 5 Detailed AM Plans & High Level Analysis of Systems 1 WWTP 1 WWPS 1 Collection System Transmission & Distribution High Level Systems 5 Detailed AM Plans & High Level Analysis of Systems 1 WWTP 1 WWPS Collection Transmission & Distribution High Level Systems 2007 EAMP HIGH LEVEL FORECAST 11 ASSET GROUPS 30-YEAR CAPITAL INVESTMENT PROJECTION AND 10-YEAR FISCAL PLAN SUMMARY PROFILES FOR EACH OF THE MAJOR ASSET GROUPS (SYSTEMS) KEY STRATEGIC DRIVERS, TRENDS AND LEVELS OF SERVICE; AND RECOMMENDATIONS FOR SUBSEQUENT PHASES. RISK (BRE) SCORES (NOT DIRECTLY COMPARABLE BETWEEN MULTIPLE ASSETS GROUPS BUT USEFUL IN COMPARING ASSETS WITHIN THE DEFINED ASSET GROUPS)

71 2011 EAMP EMPHASIS ON FIVE (5) LOWER LEVEL AM PLANS 5 QUESTIONS DETAILED ANALYSIS, AT ASSET LEVEL, OF: CONDITION, USEFUL LIFE, REMAINING LIFE, REPLACEMENT COST, MANAGEMENT STRATEGY FOR ASSETS TEN (10) LOS PERFORMANCE MEASURES RISK - BUSINESS RISK EXPOSURE (BRE) SPECIFIC O&M AND CIP INVESTMENT STRATEGIES RECOMMENDATIONS FOR ASSETS INCLUDED IN 5 AM PLANS ORGANIZATION LEVEL FUNDING STRATEGIC RECOMMENDATIONS 2013 EAMP UPDATE OF PREVIOUS 5 PLANS AND MORE ANALYSIS (DSS) INTRODUCTION OPERATING ENVIRONMENT CURRENT STATE OF THE ASSETS ASSET INVENTORY AND CONDITION LEVELS OF SERVICES BUSINESS RISK EXPOSURE CAPITAL EXPENDITURE O&M EXPENDITURE GROWTH AND DEMAND INFRASTRUCTURE IMPROVEMENT PLAN BUSINESS IMPROVEMENT PLAN HURDLES & IMPEDIMENTS 2014 EAMP NEW FORMAT IMPROVED ANALYSIS MORE ASSETS REPORTS ON AM PROGRAM ACCOMPLISHMENTS AND BENEFITS INCREASED NUMBER OF ASSETS IMPROVED SYSTEM LEVEL ANALYSIS FOR BURIED ASSETS LOS VALUE STATEMENTS USED TO REPORT ON PERFORMANCE RISK EXPRESSED IN DOLLAR VALUES INCLUDES RISK REGISTRY

72 ASSET COUNTS (2011 TO 2014) COMPARISON WATER TRANSMISSION SYSTEM CONDITION PROGRESS LEVELS OF SERVICES REPORTING 2011 EAMP (10 MEASURES) 2013 EAMP (29 MEASURES) 2014 EAMP (LOS VALUE STATEMENTS) Achievement against Goals KPM PM Total Better than Goals Below Goals RIVA Modeled Totals

73 QUESTIONS EXERCISE COMMON AMP FRAMEWORK THEMES IIMM 1. Exec Summary 2. Introduction 3. Levels of Service 4. Future Demand 5. Lifecycle Mgt 6. Financial Summary 7. Plan Improvement & Monitoring 8. Appendices Ontario MIO 1. Exec Summary 2. Introduction 3. State of the Infra 4. Desired Levels of Service 5. Asset Mgt Strategies 6. Financing Strategies 7. Appendices WSSC EAMP 1. Exec Summary 2. System Status 3. Financial Plan 4. Levels of Service & Performance 5. Risk Management 6. Preservation Plan 7. Business Improvement Plan 8. Organizational Opportunities (Hurdles & Impediments) 9. Appendices

74 1. Introduction GENERIC EAMP FRAMEWORK 4. Growth & Demand 2. State of Infrastructure 5. Asset Management Strategies 3. Levels of Service 6. Financing Strategies 7. Plan Improvement & Monitoring 13 EXERCISE FOR EACH CHAPTER OF THE GENERIC AMP FRAMEWORK PROVIDED: 1) DEFINE THE KEY ELEMENTS (OR SUB HEADINGS) THAT NEED TO BE COVERED TO ADEQUATELY AND ACCURATELY CONVEY THE AMP S MESSAGE 2) PUT THESE IN ORDER SO THAT THE CONTENTS OF THE CHAPTER BUILD APPROPRIATELY 3) PROVIDE BRIEF STATEMENTS ON YOUR ORGANIZATION S CURRENT STRENGTHS AND WEAKNESSES WITH REGARDS TO EACH SUB-HEADING 4) MAKE SUGGESTIONS FOR HOW THE NEXT ITERATION OF YOUR EAMP COULD BE IMPROVED

75 Portland Water Bureau Guidelines for How To Develop an Asset Management Plan Tanks Pump Stations Mains Transmission Valves & Regulators Hydrants Service Lines Meters Vaults Groundwater Bull Run Roads

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77 Table of Contents 1. Introduction and Asset Profile Definition Purpose Levels of Service Key Service Levels in Strategic Plan Current Effectiveness Measure for the Water Bureau Existing Sub Program Metrics Asset Inventory and Valuation Asset and Component Listing and Hierarchy (Asset Hierarchy) Data base(s) Physical Parameters Inventory Age Location Asset Replacement Valuation (Fully Loaded Replacement Costs) Asset Condition and Utilization Likelihood of Failure Current Condition Overview Identification of Assets in Poor Condition Asset Capacity/ Performance (Utilization) Developing a Condition Assessment Strategy Failure Modes and Asset Life Failure Modes Service Demands Asset Deterioration and Condition Failure Effective or Useful Asset Lives Actions to Extend Useful Life Business Risk Exposure Consequence of Failure (CoF)...26

78 6.2. Business Risk Exposure (BRE) Asset / Program Level Business Risk Exposure (BRE) Bureau Level Maintenance, Repair, and Replacement Strategies Current and Potential Activities Maintenance Strategies Condition Assessment Strategies Preventive / Predictive Maintenance Strategies Reactive / Responsive Maintenance Strategies Repair Strategies Replacement Strategies Risk Cost Analysis Budget Forecasting Existing Capital Improvement Projects and Programs Recommended and Projected Activities for Maintenance Recommended and Projected Activities for Repair and Replacement Growth, Improvements, and New Requirements Forecasting Asset Condition and Funding Needs Performance Tracking Improvement Plan and Data Requirements Summary of Next Steps Recommended Service Levels Recommended Condition Assessment Work Recommended Failure Modes Analysis Recommended Risk Evaluations Recommended Operational Changes Recommended Maintenance Strategies Recommended Repair and Replacement Strategies Recommended Data Collection Actions...45 Appendices...46

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80 Guidelines for an Asset Management Plan This Guideline follows the Asset Management Plan (AMP) Template. The AMP Template has all the chapters and sections formatted. The Template and the recommended chapters and subchapters can be changed to meet the needs of the particular AMP, but should generally following the outline presented here and in the Template. Jessica Letteney is the contact person for Template formatting questions, the location of the template is here: AMP Template 1. Introduction and Asset Profile Provide a brief introduction to the asset and this asset management plan. Add information on the asset category, sub category and who the players are: Champion, Budget Program Leader, Analyst and any support staff. This will be done in a table format as outlined below: Asset Category <category name> Asset Sub-Category <sub-category name> AMSC Champion <WB employee> Budget Program Lead <WB employee> AMP Lead or Co- Lead <WB employee> Support <WB employee or group> Plan Author <your name> Version Number Last Reviewed Next Review 1.1. Definition Provide definition of the asset and general information so the audience has a clear picture of the asset being addressed. For example, storage tanks AMP does not include terminal storage facilities such as Powell Butte, Mt. Tabor, or Washington Park; stand pipes are taller than they are wide; tanks may be buried, partially buried, ground level or elevated; are either concrete or steel. Guidelines for an Asset Management Plan Page 1

81 1.2. Purpose Define the purpose of the asset how it contributes to the goal of the PWB and delivers water to customers. Purpose may be taken from the Budget Program Description and Summary Example from AMP: Distribution Mains The water system contains over 2,100 miles of distribution mains that transport water from terminal reservoirs to local distribution areas and then through a complex grid of interconnected piping to customers services. Distribution mains primary purposes are to move water between central distribution points located within different distribution zones throughout the city and to provide water service and fire protection to Portland Water Bureau (PWB) customers. Example from Budget Program Description: Valves/Gates/Regulators Purpose: Through the use of valves/gates, isolate segments of the distribution system for maintenance and/or adjustments. Through regulator stations, reduce main water pressure to ensure adequate and appropriate pressure at the customer s meter. 2. Levels of Service There are really three levels that occur in our strategic planning. At the Bureau level we have Key Service Levels. These bureauwide goals help the Bureau focus on delivering results on the strategic objectives. At the Program level there are Effectiveness Measures. These are program level objectives that are presented in the budget and reported on. Effectiveness measures, like all objectives, are quantifiable or measurable and they contribute to the Bureau goals or strategic objectives. Guidelines for an Asset Management Plan Page 2

82 The third level is Sub Program Metrics. These activities that are reported on quarterly. Subprogram metric outcomes directly contribute to the Effectiveness Measures. The top two levels are considered as the Level of Service that an asset delivers while the bottom level is the specific activities with their measurable outcomes that are contributing to specific sub program objectives. Each of these strategic metrics is reported in the sub sections below Key Service Levels in Strategic Plan Use service levels from the Strategic Plan that the asset contributes to meeting the goal. Identify all levels of service linked to asset group. Example: Pump Station: No more than 5% of customers out of water for more than 8 hours a year; Maintain minimum pressure of 20 psi during normal demands limit outage) Outline how data will be gathered and reported on so that the Service Levels goals can be reported on. Reference materials for service levels have been compiled within the directory: WB-PDX /Eng/Asset Management/Service Levels (WB PDX will be changing to WBFile1 anticipated in June 2010). The material includes a summary given as a PPT file entitled Water Utility Service Levels Around the World. National and Utility specific detailed reports are available on service levels: Australia National Performance Report England Level of Service Report Canadian Benchmarking Report Water Performance Report for Australian Utilities Seattle Public Utilities Strategic Plan Charlotte Mecklenburg Utilities Strategic Plan City of Phoenix Performance Report 2.2. Current Effectiveness Measure for the Water Bureau Use the Effectiveness Measures taken from the current budget and any revisions that are planned. Guidelines for an Asset Management Plan Page 3

83 Example: Effectiveness Measures for Valves/Gates/Regulators 90 percent of valves operating and less than 5% of customers experiencing a cumulative outage of water for more than 8 hours in a year 99 percent of regulators operating to standard providing 40 to 100 psi (but not below 20 psi 100 percent) at the customer s meter. Example: Effectiveness Measures for Services and Mains Less than 5 percent of customers shall experience a cumulative outage of water for more than 8 hours in a year. Planned outages, causing disruption of service, shall be limited to 8 hours. Emergency outages are limited to 24 hours, except for mains exceeding 16 inches in diameter, for which emergency outages are limited to 48 hours. The results of the Effectiveness Measures are reported on in the Budget Program Results Reports. Results should be presented in the AMP and, when possible, use data from multiple years to show trends. Provide information on issues or events that helped meet or not to meet Effectiveness Measures. If there are applicable AWWA guidelines additional to stated measures then provide information on those measurements. Outline how data will be gathered and reported on so that the Effectiveness measures can be reported on. Section 7 shall include recommendations on changes or additions to Effectiveness Measures Existing Sub-Program Metrics List the sub program metrics for the asset group. Include the CIP projects with their objectives, targets and results. This section is for existing sub program metrics and the capital projects that are being implemented. Any recommended changes, as with Effectiveness Measures above, is addressed in Chapter 7. Guidelines for an Asset Management Plan Page 4

84 Example: Sub Program Metrics for Various Assets Sub Program Metric FY Target Year To Date Results Pump Stations & Tanks: Distribution storage exceeds 70% of maximum capacity 95% of time 33.4% of time per Excel report of City Storage totals over a day time period. CIP activities have impacted this performance measure. Valves/Gates/Regulators: Inspect and exercise all 2000 large valves annually Inspect and exercise 2000 large valves Inspected and exercised large valves of 768 quarter sections (N.A.) Example: Distribution Mains Program Capital Projects Project Objectives Construct water mains and appurtenances necessary to 1) replace all leaky galvanized & steel pipes in 5-10 years, 2) provide service to new developments, 3) increase supply for fire protection, 4) improve water quality, 5) support LIDs. FY Target Approximately 6 miles of new and replacement mains are anticipated to be installed during FY Year To Date Results There were 21,205 feet of main installed. Replacement mains for leak prevention, fire flow and to improve water quality 17,376 feet; Petition mains 3,829 feet; Major accomplishments included design completion of City Lights Development. The above examples are of budget reports, which are necessarily brief in description. The AMP should provide fuller detail on objectives, targets and, particularly, results. If results are more or less than the targets, greater information as to the reasons and any corrective measures should be detailed. Asset Management has information on service levels and effectiveness measures from other utilities. If appropriate and if comparative levels of service are available, benchmarking Bureau levels of service against other utilities would go in this section. Guidelines for an Asset Management Plan Page 5

85 3. Asset Inventory and Valuation The information for Sections 3.2 and 3.3 may be available from the Status and Condition Report and in the related EXCEL file. Click here for the link to the Water System Status and Condition Summary Water System Status and Condition Report (Feb 2006) Report 2006 and the Current Condition and Cost Data (2009), which has more current cost information than the 2006 report Asset and Component Listing and Hierarchy (Asset Hierarchy) The following link is PWB s Asset Hierarchy schematic with level 1 and level 2 asset hierarch. The AMP should mention the level 1 and 2 hierarchy but then provide more detail at higher levels, if there are components to the asset in the hierarchy (see example below). Example: Pump Station (see hierarchy diagram below) The diagram shows the child assets to be assigned and tracked within each pump station. Each pump station will be within the Operations/Distribution Facilities group of assets. The plan is for work orders issued in Synergen to be linked to a specific child asset. As maintenance is performed the labor, equipment, materials used and date will be recorded for each incident. The information will then roll up to the parent asset. This will be a very valuable tool as we move forward with future asset management plans. Guidelines for an Asset Management Plan Page 6

86 Roof Hoist/Crane Bathroom Plumbing Building HVAC Building Intrusion Detection Misc. Grounds Irrigation System Fe nce SCADA/Instrumentation Flow Meter RTU Misc. In truments Lanscape Misc. 15KV Primary Switch 2000 KVA/2260KVA Transformer Carolina Pump Station Piping Mechanical Electrical System Pumping System 1 (Ty p. 6) Discharge Header Suction Header Carolina Ball Valve Relief Piping Misc. Switchgear for Pump 1-3 Landscape Switchgear for Pump Phase Breaker Panel House Power Electrical Service Pump Motor Pump Control Valve Mi sc. Valve MCC Electrical Starter Misc. Guidelines for an Asset Management Plan Page 7

87 3.2. Data base(s) Provide information on asset databases and include links. Description should include databases and information on the fields that each database is holding. If there is duplicate information, is there a database that is considered to be the default one to use in case of discrepancies? For example, Synergen and GIS have different asset IDs for valves, when do we use the GIS number and when to use the Synergen number Physical Parameters Tabulation and/or graphical depiction of the number / type / physical characteristics / installation date of assets. Could also include out of service assets if applicable and significant. For example, with valves the parameters would include size, type (pressure relief valve, altitude, pump control, check, gate, etc.), or manufacturer. One way to present the data would be to tabulate each parameter separately. If there are two or more parameters in which data sorted by multiple parameters provides useful information then tabulate those multiple parameters together (see example below): Example: Valves by physical parameters Size Type Count 16 Gate 1, Check Gate Check Inventory List of all assets in the AMP. For assets with limited numbers each individual asset shall be listed, e.g. pump stations or tanks. For assets that are too numerous to list individually they may be grouped by size, material or other characteristics, e.g. distribution mains or meters. The actual list may be given in or below. If the actual list is given below, then this section should summarize the inventory count by characteristic (i.e. large meters inventory may be summarized by size of meter with totals given for type or manufacturer as well). Guidelines for an Asset Management Plan Page 8

88 Age Age of an asset is important to understanding condition which is often based on a deterioration curve with age as the independent variable. Since the AMP may not be revised for several years it may be more appropriate to list year of install rather than age, this is up to the AMP Lead. Give ranges of age where appropriate. Include a count of assets within an age range and include a range or field for those with unknown age Location For information on individual assets where the count is low enough to list individually provide location information. Address and/or quarter section Asset Replacement Valuation (Fully Loaded Replacement Costs) This section includes the replacement value including construction replacement cost, engineering services, and overhead both direct (benefits of those working on the project) and indirect (capital borrowing charges and a portion of salaries of non project staff, like billing, HR, finance, etc). This should be done in cooperation with Engineering Planning as they also utilize cost estimates that should be in sync with our methodology. It should be noted that TEAM Plan (Total Enterprise Asset Management Planning Tool) is built using budget level costs, which do not include the indirect overhead. This is because when budgeting is conducted, the overhead is added as a separate line item in the budget and the output of TEAM PLAN was intended to give budget projections, so indirect overhead was removed from the costs in this model. The Status and Condition Report is being revised and may have different estimates than the 2006 report given in the link above. Check with Asset Management on current valuation estimates for your assets. 4. Asset Condition and Utilization Available data sources for preparing asset inventories for Asset Management Plans include Asset Viewer, ATTASK, GIS, Large Meter Database, OpsInfrastructure database, SAP fixed assets data, Streetsaver, Synergen, TEAM PLAN and the Water System Status and Condition Report. Table 1 in Appendix A provides a brief description of where to find each data source, the basic information that can be found in each, and who maintains the information. It is the objective of asset management planning efforts to continually improve the completeness and accuracy of data sources and to eventually develop links between these sources so that key data for all assets has a home system that is maintained by those in charge of that system and the information is then linked into the other systems rather than duplicated. This prevents various Guidelines for an Asset Management Plan Page 9

89 systems from being out of synch with one another. In working with asset management plans expect to get very familiar with GIS and how to create selections and layers displaying various characteristics of assets and their physical environment, as well as how to use Synergen to find out work history on individual assets. Asset Management staff members can provide assistance in learning to use these primary data sources. It is hoped that data collected for and updated through the Asset Management Planning process will mirror the same asset groupings, naming conventions, and FacilityID designations being used elsewhere so that it can readily be used to update data sources such as TEAM PLAN, OpsInfrastructure, GIS and/or Synergen where appropriate. The Status and Condition Report and related EXCEL file PWB Status and Condition Report contain basic summaries of assets by class and condition by dollar value, mostly based on the age distribution of assets. See Asset Management for up to date revisions to the report and asset condition. The AMP should be the document feeding the Status and Condition Report so developing new guidelines or revisions should be part of this exercise. The TEAM PLAN financial forecast model also contains more detailed information about asset condition and replacement value because it takes assets down to a more detailed level in some cases. The TEAM PLAN model is where the data for the Status and Condition report now comes from. So any additions or changes to the physical asset inventory, attributes, useful life, condition, replacement value, or maintenance needs of assets needs to be fed into TEAM PLAN to keep our knowledge of our assets current. Tables of the attributes that are available in TEAM PLAN or that can be populated and used for budget forecasting but that have not been populated yet are included in Appendix A. For those who would like to learn more about the capabilities of this budget forecasting tool, see Asset Management for a demonstration Likelihood of Failure Recommended verbiage for starting this sub section: The Likelihood of Failure (LoF) used by Asset Management ranks the condition of each asset on a scale of 1 to 5 with 1 being a {asset name} in excellent condition and 5 being a {asset name} in poor condition. The first steps are to determine a list of factors that affect asset condition and determine the useful life of the asset. Tanks, for example, may have a useful life of 100 years and condition is affected by corrosion, roof, column and weld condition and other factors (see tank condition assessment tableau in section 4.5). PWB Asset Management uses a Likelihood of Failure (LoF) rating scale of 1 to 5 (1 is in excellent or new condition, 5 is in very poor condition). For Bureau wide condition ratings the following table is a guideline used for all assets: Guidelines for an Asset Management Plan Page 10

90 CLEM Likelihood of Failure (Asset Condition) rating Likelihood Rating Recurrence Interval for a Single Asset Failure (years) Failure Rate of a Population 5 <= 5 years years years years >> 100 years <.01 In many instances, assets may not last 100 years, or even 50 years, and therefore could only be rated at the lower upper ends of the condition rating. For example, a meter may have an expected life of < 20 years and therefore a brand new meter in the ground would be given a condition rating of 4 until it had only 5 years of expected useful life at which point it will be given a condition rating of 5. The bureau wide (CLEM) condition scale will have to be modified relative to the maximum expected useful life of an asset if that asset has an expected useful life of less than 100 years. The scale may be from 2 to 5, or 3 to 5 or even a smaller range depending on the maximum useful life of the asset and where it fits on the above CLEM table for asset condition. In many instances the bureau wide scale may not suffice for a particular program when we are using asset management principals to determine maintenance, rehabilitation and replacement strategies. In the cases where a particular asset condition does not have an expected useful life of 100 years or more, the AMP program team should develop their own LOF or condition rating scale that utilizes the full 1 to 5 range. In the above case, create two LOF tables; 1) using the CLEM likelihood of failure rating and the asset group does not use the full 1 to 5 ratings, then create 2) a second likelihood of failure rating for the asset group utilizing the full 1 to 5 ratings. If other studies/inspections have been done on asset conditions list those and compare their scale and ratings to the asset management ratings. Include any internal inspections (i.e. the Senior Design Engineer inspects tanks internally every 5 years when they are being cleaned, OEs visit pump stations every x days/weeks, etc.) List any condition that an asset has in poorer condition than the average rating. Those parts of the asset in worst condition should be listed with an assessment. In some cases, one part of an asset in poor condition may drive the overall condition. For example, if all parts of tank except the roof are in good condition ( 2 ) but the roof is in poor condition (e.g. a 4 ) then it may be appropriate to list the condition of the tank as a 4 because it is a critical part of the tank and if Guidelines for an Asset Management Plan Page 11

91 left unrepaired then the life of the tank will be greatly reduced. The tank would return to a condition of 2 once the roof is repaired. Examples: Pump Station condition assessment was conducted by a consulting firm for 32 pump stations as part of the Distribution System Master Plan. A condition rating scale from 1 (bad) to 10 (excellent) was applied. Twenty one pump station system components were evaluated as part of a Level 1 assessment; a more detailed Level 2 assessment of the structure and/or electrical system was conducted at 11 of these pump stations. The DSMP rating set the minimum acceptable condition index (MACI) at a rating of 4 (i.e. at 4 the pump station is no longer considered to be in acceptable condition and should be replaced). This 4 10 scale that was used for both pump stations and tanks, converted into the AMP 1 5 ranking is summarized in the example below: Example of DSMP tank inspection rating numbers (converted to 1 5 scale): Cond. Rank Definition 1. Sound physical and operating condition. Meets all requirements for functionality, safety, and regulations. Operable and maintained. Expected to perform adequately with routine maintenance for 10 years. 2. Acceptable physical and operating condition. Exhibits signs of minor wear that results in minimal impact on performance and/or operating and maintenance costs. Minimal short term failure risk. Potential for further deterioration or impaired performance over next 5 to 10 years. Minor corrective maintenance required, if any. 3. Average repair history. To restore to CR 8 10, improvements between 5 20% of replacement value are needed for improved performance, efficiency, regulatory or code compliance. 4. High incidence of repairs. Improvements needed within 2 5 years to maintain reliability and/or function of item. Renewal/upgrade of whole component systems likely more cost effective than continued repair/maintenance of existing equipment/systems. Investment of 20 50% of replacement cost is required to restore CR to 8 10). 5. Asset in unserviceable or repair so involved or difficult as to be non cost effective, near total failure, replacement required avoiding total loss of function of item. Investment of 50% or more of replacement cost required restoring component to CR of Guidelines for an Asset Management Plan Page 12

92 If a scale of 1 5 is not robust enough for our purposes the AMP team may decide to use scale fractions (tenths, e.g. 3.1, 3.2, etc.; or by using half or quarter fractions). The DSMP also gave a general guideline on tank condition classifications based on inspection results. This ranking could be revised for different assets using the general guidance for tank condition classification. Example of DSMP tank condition ranking scale based on inspection results: Cond. Rank Definition 1. Good Condition: Tanks in this group are generally in good condition and do not require near term attention. 2. Minor Deficiency: Tanks included in this group have components with minor deficiencies that do not require immediate repair. 3. Maintenance Repair Required: Tanks included in this group have components that require immediate repair. 4. Structural Attention Required: Tanks included in this group experience serious structural damage and require in depth structural evaluation. 5. Tank condition is very poor: Tanks included in this group experience severe structural damage and must either be rehabilitated or replaced. Cannot be used further either due to safety or reliability reasons. TEAM PLAN uses condition to forecast when various assets will require rehabilitation or replacement. Each asset can be given a 1 5 condition score (decimals between 1 and 5 are okay also), where 1 is new condition and 5 is failed or near failed. The model allows minimum condition triggers to be established for each asset, which can be automatically assigned based on the value of another variable, like size or criticality or vulnerability or consequence. Services for example are basically run to failure assets when they break we fix or replace them, we don t do any inspection or rehab on them or advance replacement. However, there are some critical services, for example those that supply hospitals, where we might want to inspect them and replace before they actually fail. These would be given a minimum condition of 3.5 or 4, and the model then triggers a replacement when the asset reaches this condition instead of waiting until it gets to 5. We could also schedule periodic inspections under the Pm area and put a cost in for that and if we did that for all assets that need periodic inspections, TEAM PLAN could forecast how much staff we need to do all of our preventative maintenance work Guidelines for an Asset Management Plan Page 13

93 on the schedules we establish. The same can be done for corrective maintenance and rehabilitation and replacement. Different curves are available for condition deterioration and for allocating the costs of operations, corrective and preventative maintenance, and rehabilitation and replacement. The costs for these items will then be adjusted based on where the asset is in its lifespan. For example if the minimum value for operations of an asset is set at 1% of capital cost, then TEAM PLAN starts out at 1% and increases the percentage following the selected curve until at the end of the assets life, this cost may be 5 or 10%, depending on which curve is chosen. It is possible to leave the rate as constant over the asset s life if desired by not selecting a flat curve with no slope. Right now, only capital and rehabilitative costs are populated in TEAM PLAN. No effort has gone into modeling other operations and maintenance activities, though it is the hope that this will occur as we continue through our asset management planning endeavors. An example of the various condition curves available for forecasting asset deterioration in TEAM PLAN is shown below in Figure. The pipe curve is an S shape because there are always those few stalwart pipes that outlast all the others. Most assets follow the typical concave down shape. Short lived assets and those that wear relatively uniformly with use (tires for example) tend to be pretty linear in condition deterioration. For assets with maintenance or rehabilitation occurring periodically, the ongoing condition curves would follow a pattern of falling condition and restoration as shown in Figure. As can be seen, each time the asset is rehabilitated, the condition returns to nearly the same condition that existed prior to the refurbishment action. Guidelines for an Asset Management Plan Page 14

94 1 Age of Asset Condition of Asset Useful pipe Useful life service-100 Useful life vault- 75 Useful life pump - 50 Useful life I&C Pipe Pump Vault Service I&C Guidelines for an Asset Management Plan Page 15

95 The second figure above provides an example of potential condition changes from various types of interventions (inexpensive frequent maintenance or minor rehab at condition 3 ($400), more intense rehab at condition 3.3 ($500), a major rehab/near replacement at condition 4 ($600), or a full replacement at condition 5 ($800) Current Condition Overview Provide a list of the current condition of the assets. Assets with a high number of points (mains, valves, hydrants) may be grouped together using a characteristic important in qualifying the asset (size, type, material etc.). Use either a chart (by condition only) or table (by condition and one other attribute, e.g. size) to summarize condition Identification of Assets in Poor Condition List assets that are in poor condition, i.e. those that are in condition rating 4 or 5. If there are too many assets in poor condition then define characteristics for a group of assets and count the number of assets in that group that are in poor condition. Identify not just names or assets in a characteristic group but also look at patterns or reasons as to why a number of assets may be in poor condition Asset Capacity/ Performance (Utilization) If possible, list the utilization of the assets (e.g., whether or not in service, number of hours of operation) Examples: Pump Station summary of flow and energy use (kwh) from (Table 2b); pump run times, as a percentage of 2 year period (Table 2c); pump station yearly electrical costs, by station and as a total Developing a Condition Assessment Strategy It is important to develop formal condition assessment techniques to give repeatable and objective assessments. Guidelines for an Asset Management Plan Page 16

96 Condition Assessment Recommendation from Asset Management Work Plan for the Organization (WPO): Recommendation 1: Perform overall planning for condition assessment through AMP development. This will be responsibility of the AMP Co- Leads. All asset types should be reviewed with respect to an approach to condition assessment. This review should take place as part of the development of an Asset Management Plan, and should be scheduled in the next 2 years, in most cases. Older and more critical assets usually require more frequent condition assessments. Typical asset condition questions to be considered when preparing an assessment strategy are: When was the asset constructed / rehabilitated / replaced? Where is the asset / component in its life cycle? What is the asset s theoretical effective life? What is the estimated residual life until rehabilitation and/or replacement is necessary? Has the asset been inspected physically and by what process? How can the asset s deterioration be predicted? How can the asset s failure be predicted? How could planned maintenance prevent the asset s failure or extend the time to failure? Can the asset be rehabilitated and at what cost? What level of service will the asset deliver once rehabilitated and for how long? Is the asset technically or commercially obsolete? Are asset condition gradings appropriate and relevant? Are asset condition monitoring processes effective? Condition assessments should take account of physical integrity and address the expected failure pattern. The Distribution System Master Plan (DSMP) developed criteria for condition assessments on certain assets. Below is the criteria developed for tank condition assessment and a sample inspection sheet from the Arnold tank #1 inspection. Following is also a proposed grading scheme for valves. The AMP Team should develop recommendations on a condition assessment strategy and state those concisely in this section Guidelines for an Asset Management Plan Page 17

97 Detail Condition Criteria from DSMP Guidelines for an Asset Management Plan Page 18

98 Guidelines for an Asset Management Plan Page 19

99 Proposed Grading Scheme for Valves This version of the condition grading table includes a report of whether shutdown was achieved during assessment. If attempted, the response could be any of the first 3 choices listed. YES Shutdown Completely Successful SOME Shutdown Partly Successful NO Shutdown Not Successful UNKNOWN Shutdown Success Unknown N/A Shutdown Not Attempted Or SHUTDOWN SUCCESSFUL o COMPLETE (LESS THAN X gpm LEAK BY ESTIMATED) o GOOD SOME LEAK BY (LESS THAN Y gpm LEAK BY ESTIMATED) SHUTDOWN ATTEMPTED, BUT NOT SUCCESSFUL o UNCLEAR NOT SURE IF SHUTDOWN WAS ACHIEVED o BAD CANNOT GET SHUTDOWN SHUTDOWN NOT ATTEMPTED o N/A SIMPLY NOT ATTEMPTED, TRY LATER o IMPOSSIBLE TO EVEN TRY, NOT RECOMMENDED CONDITION RATING NAME Condition Maintenance 1 Excellent/ Very Good 2 Good 3 Fair/ Operable 4 Poor 5 Very Poor/ Inoperable/ Inaccessible New / works great. Minimal or no maintenance necessary. Minor defects only. More difficult to operate but still seats. Moderate deterioration. Hard to turn, leaks or setting waivers. Valve is partially operable, has significant deterioration or is obsolete. Valve has failed or could not be operated/ replacement required. Inaccessible/paved over. Minimal or no maintenance necessary. Normal preventative maintenance/ minor corrective maintenance necessary or to optimize performance and restore it to near new condition Significant corrective maintenance and/or partial refurbishment/replacement to restore it to good condition. Likely that valve will fail in very near future. Rehabilitate if possible. Rehabilitate if possible or Replace. Provide access. OPERATED (Isolation Valves) ACHIEVED SHUTDOWN (Isolation Valves) YES COMPLETE NO N/A COMPLETE YES GOOD MAYBE TO MAINTAIN UNCLEAR YES COMPLETE GOOD UNCLEAR N/A CREATE WORK ORDER YES MAYBE UNCLEAR YES NO IMPOSSIBLE YES REASON FOR WO TO RESTORE TO RESTORE/ REPLACE TO RESTORE/ REPLACE Was valve accessible? Was valve operated? Was valve operable? Guidelines for an Asset Management Plan Page 20

100 5. Failure Modes and Asset Life 5.1. Failure Modes In this section, consider the four key ways in which an asset will fail: Capacity: demand for service exceeds capacity of asset or network of assets Performance: the asset is unable to perform reliably or meet service levels (this category includes obsolescence, and failure to meet regulatory requirements) Cost of service delivery: this category applies to assets that are unacceptably expensive to operate, and should be replaced or disposed. Physical mortality (deterioration): the most common failure mode category. Our deterioration curves and risk of asset failure analysis are primarily developed with this failure mode category in mind. Pump station failure modes were given two primary modes of failure, as seen in the example below: Example of pump station failure modes: Performance and/or physical mortality: The most common reported failures have been tabulated, in five areas: pumps, electrical system, mechanical piping, building structure, and telemetry/scada. Capacity: As fire flow requirements increase and/or population density increases a pump station may be deficient in delivering the required fire flow. The table below shows examples of different modes of failure from the CLEM analysis for various asset types. Guidelines for an Asset Management Plan Page 21

101 Example failure modes for different assets from CLEM Working Table: Asset / Project Name Mt. Tabor Reservoirs 1 & 5 Westside Header, over I-5 at Corbett Crossing (part of Corbett-Moody?) NW Yeon - NW Nicolai to NW Kittridge bypass bridge Vernon 270 Supply Billing Xerox Printer Failure Mode PWB does not meet EPA requirements for covered terminal reservoirs because open reservoirs are still connected to potable water system 24" steel pipe break due to soil movement near bridge Multiple leaks from corrosion pitting Tanks not decommissioned. Water quality issue from poor turnover. Equipment failure unable to print bills for more than 15 days 5.2. Service Demands Describe the current demand loads placed on assets, if applicable. This may be more important in PS, tanks or meters but less pertinent to valves or mains. For assets where the demand is pertinent to its performance, use Load Scenario Tables (from Engineering Planning) or other data that compare capacities to the demand placed on assets for various scenarios (peak day + fire flow, for example). Demand Forecast (for new assets; system capacity changes potential asset failure mode) New requirements (including new regulations) Obsolescence (new technology another asset failure mode) Asset Deterioration and Condition Failure What kind of deterioration path does the asset follow? Deterioration may be linear or non linear (example of having slow deterioration and then deteriorating more rapidly after a certain point in time). Estimating a deterioration curve(s) is important to predicting major rehabilitations and replacements. Guidelines for an Asset Management Plan Page 22

102 1 Sample Asset Decay Profile Condition Score % 20% 40% 60% 80% 100% Percent Effective Life Elapsed 5.4. Effective or Useful Asset Lives Establishing an effective useful life is important when estimating the benefits and costs of a proposed project and its alternatives. Therefore, use data and industry standards to estimate the useful life of an asset for PWB. An asset s useful life will depend on a number of factors that include material, construction method, design criteria, location, loading, pressure, environmental condition and level of maintenance. For example, concrete and steel tanks may have different life cycles and an estimate for each should be given. Even concrete tanks that are buried or above ground may be different in their expected useful life. Take into account all characteristics that may affect the longevity of an asset and estimate useful life based on those characteristics. Assets will have failure rates that are often estimated using Weibull analysis. Figure 1 below (from the Distribution Mains AMP) shows the useful life analysis for CI pipe, comparing the break rates on pipes of different ages to Weibull failure curves. Table 4 below summarizes useful lives for different types of pipe. Guidelines for an Asset Management Plan Page 23

103 Weibull curves vs CI Failure Rates 125, skew 3 125, skew year, skew 3 % of Failed Segments year, skew year, skew year, skew year, skew year, skew 3 Anomaly (construction-related breaks 200 year, skew year, skew year, skew year, skew year, skew Age of Pipe Failure Rate on pre 1900 Pipe Failure Rate Pipe Failure rate Pipe Failure Rate on Pipe Failure Rate on Pipe Failure Rate on Pipe Failure Rate on Pipe Failure Rate on Pipe Failure Rate on Pipe Failure rate Pipe Failure Rate on Pipe Failure Rate on Pipe Failure Rate on Pipe Failure Rate on Pipe Figure 1 Weibull graph showing leak rates of CI pipe vs age of pipes. The above curves show that the current leak rate for older CI pipe is below the Weibull failure prediction curve for a Mean time to failure (MTTF). of 200 years, skew 3. The data most closely follows the 300 year, skew 3 curve. Younger pipe is failing at a higher rate and sooner. Failures lie between the 175 and 150 year, skew 3 curves. Table 4 (Distribution Mains AMP): Useful Lives for Various Mains Materials Pipe Material Useful Life Estimate CI, Constructed before years CI Constructed between 1930 and years CI, Constructed 1955 or later years Concrete Cylinder Pipe (CCP), cathodically protected 200 years + DI pipe, Constructed 1955 to 1965 (transitional material) years DI, Constructed 1966 or later 200 years Guidelines for an Asset Management Plan Page 24

104 Asset replacement forecast. Use a chart or table or both to show when assets (or groups of assets) will be replaced. Forecast until the end of the useful life of the asset furthest out for replacement. Is there a minimally acceptable condition? Some assets can be run to failure, while other assets should be replaced or rehabilitated long before they fail. This is usually a function of the criticality or consequence of failure. If the consequence of failure is high, e.g. the ground water pump station, then rehabilitation or replacement will occur before the asset has reached the end of its mechanical life. If the mechanical life of the pumps at ground water are 80 years (longer than normal due to low usage) but the minimum acceptable condition is a 3 due to risk, then the pumps will be replaced sooner, maybe in 30 or 40 or 50 years. If an asset will have rehabilitations (minor and/or major), the interval for rehabilitations should be established. Cost estimates for rehabilitations and replacements is estimated in Chapter 8. Example of pump station useful life: Motor Rehabilitation Motor Replacement Pump Rehabilitation Pump Replacement Building Rehabilitation Building Replacement 20 years 50 years 25 years 80 years 50 years 80 years 5.5. Actions to Extend Useful Life Describe actions that may extend useful life including rehabilitations. A description of the action should be included, i.e. what does a motor rehabilitation entail. Other useful life extending action may not be rehabilitations per se, for example cathodic protection on pipes or steel tanks. Provide estimates of the magnitude of that life extension. Cathodic protection may add on 40 or more years to the life of a pipe or tank. How much do these actions cost? Painting a tank periodically is likely to extend the life of the tank another years. Lining a pipe with cement mortar, epoxy, with an inserted pipe or other similar product could extend its life indefinitely at half the cost or less of full replacement. Joint bonding can now be done from the pipe interior for pipes 30 inches and over and possibly even down to 24 inches, so don t assume that the only fix for a deteriorated asset is to completely replace it. Technology is advancing rapidly and there are a multitude of new products and construction techniques on the market for rehabilitation of aging assets. Be creative in thinking about the best approach for treating Guidelines for an Asset Management Plan Page 25

105 various assets and under what conditions each treatment makes sense. For example the hassle associated with cutting out services and avoiding gates may make lining of a small distribution main uneconomical but installing a pipe within a pipe may make perfect sense for larger pipes with few connections, particularly since the older, large pipes are generally the most durably built pipes in the system. 6. Business Risk Exposure 6.1. Consequence of Failure (CoF) Recommended verbiage for starting this sub section: The Consequence of Failure (CoF) used by Asset Management ranks each asset on a scale of 1 to 5 with 1 being a {asset name} with very little consequence to the PWB, our customers or the community and 5 being a {asset name} that would have severe consequences. As with triple bottom line (TBL) methodology, we need to think not only of consequences to the PWB alone, but consequences to our customers and to the community at large. Consequences include financial, social, and environmental as well on the impact to the level of service. As with LoF, it may be that some assets have limited consequence and will not use the entire 1 to 5 scale that the bureau wide rating will use. This section will rank the consequence of failure based on importance to the asset category and then to the overall impact on the PWB. (example: a large meter that measures consumption of > 10,000 ccf/year would be a 5 when considered in the large meter category, but for the bureau as a whole the failure of this meter only ranks a 3. The Consequence and Likelihood Evaluation Matrix (CLEM) table for consequences is given in Appendix B at the end of this document. The table lists consequences by category (water quality, supply continuity, etc.) and provides examples for events and the rating for the event. It is up to the AMP team to identify and list the most likely failure scenario(s) and the outcome of each event. The CLEM consequence table in Appendix B is a guideline to help establish where the consequence will rate on the 1 5 consequence of failure scale. Not all categories have dollar values for their associated consequence, but there are theoretically similarities of dollar impact within a consequence rating. For example, a health and safety tier 3 has a consequence of between $1 million and $5 million. We can assume dollar impacts for other failure events estimated to be a tier 3 will fall within this range. The AMP team will have to decide where in Guidelines for an Asset Management Plan Page 26

106 the range the particular event listed for their asset will fall if they want to narrow the range or have a single point dollar figure for their impact valuation. For asset categories that have a maximum consequence that is less than that considered in the bureau wide ranking (i.e. they will have a range of 1 to 4 or narrower), then the AMP team can develop their own 1 to 5 ranking for that asset group. Having a second consequence ranking for the asset group will be useful when developing maintenance, rehabilitation and replacement strategies for that particular asset group. TEAM PLAN relies on 1 5 consequence ratings within a particular asset group to decide when individual assets should be replaced with respect to one another. Two of the factors that may be used to influence the consequence rating are the criticality of this individual asset in comparison to other assets within that group and the vulnerability of the asset to different natural hazards as compared to other assets in the group. TEAM PLAN includes a field for a vulnerability rating. Right now it is set up as either the asset is or is not vulnerable (1 or 0), but a scoring system could be developed. It also includes a field for a 1 5 criticality score (1 = not critical, 5 = critical). An asset that is critical and vulnerable would have a high consequence rating. TEAM PLAN uses consequence and likelihood (or condition if likelihood isn t populated) to establish asset risk. Maximum allowable risk trigger can be set up to cause a rehabilitation or replacement of an asset when the trigger is exceeded. Tolerable risk levels would be set lower for critical assets and higher for those that are of less importance. The risk rating triggers should be commensurate with the CLEM scale consequences between asset classes because the goal is to minimize the total system wide risk. Therefore even the most critical water service in the system should not have a risk trigger that is lower than the risk trigger established for Bull Run Dam 1, for example. List the most likely events that would happen for each asset or group of assets. Once the events are identified, the outcome of the event(s) needs to be evaluated and quantified. Examples from the CLEM Working Table is given below: Example of consequence rating: Asset/Project Name Calvary to Greenleaf Pump Main Failure Mode Pipe fails due to landslide Consequence Rating 3 Main supply to > 1000 services. Some supply from LinWit to Willalatin; Have to deal with landslide, temporary fix in less than 72 hours, but not less than 24 (3 for out of service criteria; Guidelines for an Asset Management Plan Page 27

107 Texas Tank Large Valve Replacement Large Valve Replacement Raymond Tank Sam Jackson Pump Station Sam Jackson Pump Station Improvements Sam Jackson Pump Station Improvements Structural failure of tank Single large valve does not close when needed for shutdown Valve is broken and is closed when it isnʹt supposed to be Earthquake takes out tank Failure of electrical or instrumentation systems by running electrical system to failure Landslide or earthquake causes a break in the 16ʺ DI Portland Heights Pump Main near a residential area Motor Control Center Failure renders the pump station useless 4.5 Not a significant impact to supply, but if it fails, this is a HydroPark site, there is a potential for loss of life and certainly in public confidence in our ability to safeguard the public 3 This consequence (3) is for a critical valve. If valve is needed to stop water flow from large break, could increase damages by $1 10 million, could damage habitats, could temporarily lower pressures in a zone until another valve is found. 3 This consequence (3) is for a critical valve. Valve could be causing reduced pressures in a large zone for more than 72 hours. Needs to be considered on case by case basis. 5 Large service area out of water for more than 72 hours. 2 This consequence relates to failure during October March. Some part of service area would receive low pressures for extended period if out during April September, but not all. Barbur Gibbs is backup but doesn t have as much capacity. 3 A break in a residential area could easily cause $1M in damage to the expensive homes in the area. 2 Barbur Gibbs & Washington Park could supply water to all three service areas but could incur small or moderate increase in electricity usage. No backup supply would be available for these two pump stations. Asset Management has written guidelines for valuing service level impacts. These guidelines can be used to estimate dollar value impact for not meeting service levels. Service level impact valuation can be found in the Business Case Guides folder. To date (May 2010) have been written for supply interruptions, fire flow, pressure, safety, and impacts on traffic. Guidelines for an Asset Management Plan Page 28

108 6.2. Business Risk Exposure (BRE) Asset / Program Level Business Risk Exposure at the Program Level vs. Business Risk Exposure at the Bureau Level There are two levels of rating BRE. First, how important is a single asset within its class. Second is how important is a single asset to the bureau. The two rating scales for likelihood and consequence are discussed in the chapters above. Example a large meter failure is considered highly consequential to the Meter Shop and the meter program if that meter measures a large volume of water. However, the failure of the large meter, likely to be detected in 3 months or less, may only pose a medium or low risk to the overall bureau risk exposure. Section 6.2 addresses risk exposure of assets at the program level. This section is optional only if the asset program ratings are different from bureau ratings and if having a separate, asset program specific BRE will help in developing maintenance and replacement strategies. Section 6.3 addresses risk exposure of assets to the bureau. This section is mandatory as it is needed for PWB and COP for planning purposes. Business Risk Exposure is the product of the likelihood and consequence of failure discussed in the previous sections. Suggested text for starting this subsection, including graphic below: The risk (criticality) metric is a function of the consequences of failure and the probability of failure, as defined in the previous sections. The formula is defined as: Guidelines for an Asset Management Plan Page 29

109 Current Risk Cost = Costs of the Consequences of Failure X Probability Of Failure (PoF) Business Risk Exposure (BRE or Criticality) Consequence of Failue (CoF) Related to Condition, Reliability & Redundancy BRE = CoF X PoF (Criticality) Implicit in the business risk exposure for the supply and distribution of water to a service area(s) is redundancy. If a pump station has a 50 year recurrence of being out of water for three days during a storm but can be supplied by another source such as a tank then the likelihood and/or consequence of the outage may change. A BRE table will have both the likelihood and the consequence as the two axis in the matrix. As demonstrated below, the BRE rating of an asset and its identified possible failure has five levels of ranking from Very Low to Extreme. Likelihood Consequences 1 Very low 2 Low 3 Moderate 4 High 5 Very high Very low (1) VL VL L M M Low (2) VL VL M M H Moderate (3) L L H H E High (4) L M H E E Very high (5) L M H E E Where: VL = Very Low M = Medium L = Low H = High M = Medium E = Extreme Guidelines for an Asset Management Plan Page 30

110 Use the Likelihood of Failure (LoF) from Section 4 and the CoF from above to generate a table of the count of critical assets such as the one for Large Meters AMP Table 6.2. This example shows how meter BREs were evaluated for the 1 to 5 ranking within the meter asset program. Business Risk Exposure: count of meters in each consequence and likelihood ranking (within the meter asset category ranking system) Likelihood Consequences Very Low (1) 2, Low (2) Moderate (3) Moderately-High (4) High (5) Provide a list of the critical assets identified as those Extreme BRE ratings. If appropriate and reasonable a list of assets with High ratings should also be listed. If assets are grouped into categories rather than listed individually due to their high number then the AMP can simply describe those assets that are found to be Extreme or High risk exposure Business Risk Exposure (BRE) Bureau Level The Consequence and Likelihood Evaluation Matrix (CLEM) uses a likelihood and consequence of failure rating that is appropriate at the bureau wide level. An asset group will define its own likelihood and consequence scale of one to five that are relevant to asset failure but using the CLEM ratings will result in each asset being rated differently, as in the case of meters: Business Risk Exposure: count of meters in each consequence and likelihood ranking (within the meter asset category ranking system) Likelihood Consequences Very Low (1) 3, Low (2) 1, Moderate (3) Moderately-High (4) High (5) Bureau wide system CLEM analysis can be found in the CLEM Working Table. Below are some examples: Guidelines for an Asset Management Plan Page 31

111 EXAMPLES of CLEM likelihood and consequence of failure rating system to determine risk exposure. Asset/Project Name Failure Mode Likelihood Rating Consequence Rating GW Transformer and Automatic Circuit Breaker Westside Header, over I-5 at Corbett Crossing (part of Corbett- Moody?) Failure of GW Transformer or Automatic Circuit Breaker during a 10 Day Turbidity Event 24" steel pipe break due to soil movement near bridge NW Yeon - NW Nicolai Multiple leaks from corrosion to NW Kittridge bypass pitting bridge 3 - Likely happen within the next 50 years 3 - Soil movement already observed. Potential for landslide to take out pipe at end of bridge 4 - Pipe has had 6 leaks in past 20 years, despite adding cathodic protection in System is shorted and needs to be fixed. 5 - New transformer or circuit breaker has a long lead time. City would not have water or would have to serve turbid water CLEM Risk Rating Risk Ranking Extreme 5 Recommended Next Steps Forward to planning and GW Program Manager for more detailed evaluation 5 - loss of life due to landslide on freeway Extreme 5 Forward to Planning 3 - If the main is out of service north of NW 35th Avenue, supply to the St. Helen's Rd Industrial area from Washington Park would be reduced. These three lines feed a 24" and 16" to Saltzman, Linwit andwillalatin, High 4 Fix shorts and isolation so that cathodic protection system works again. Willamette Heights Tank Loss of supply main on Thurman St. bridge 3-50 year event? Bridge is considered to be in poor shape and if it fails main could be unavailable for several days to several weeks customers out of water for 72 hours or more. Damages/additional costs >5 million, major environmental damage probable. High 4 Forward to Planning Bertha Tank Tank has several water leaks 5 - Tank currently leaking 2 - Leaks will continue to get worse and may lead to eventual rebar degradation and catestrophic failure. Tank had poor visual appearance to customers/neighbors and may lead to complaints. Medium 3 Repair Tank Leaks Guidelines for an Asset Management Plan Page 32

112 7. Maintenance, Repair, and Replacement Strategies Maintenance Strategies can be divided into three categories: Condition assessment strategy Preventive/predictive maintenance strategy Reactive/responsive maintenance strategy 7.1. Current and Potential Activities Provide a list of the current and potential maintenance, repair and replacement strategies in this section. Those that are currently performed should be noted. This is an overview and more details should be provided in subsequent sub sections. This section should also capture our response to high risk assets. Our response can involve monitoring (condition assessment), repair (e.g., a casing around an existing pipe of concern), or replacement. This will link to section 8.4 Growth, Improvements, and New Requirements under the budget forecasting chapter Maintenance Strategies Condition Assessment Strategies This section should answer the following questions: How is it performed? How often is it needed? Is there a different strategy for critical assets? What is the cost of the task? What are the benefits? What are the data collection needs and approach? Is there a current inspection approach? Does this document present a proposed condition assessment approach? Example of OE valve condition assessment: Currently, the condition of OE valves (at tank and pump station sites) are not kept in a data base and the actual condition of many valves is not known. Asset Management along with Operations will conduct a tank and pump Guidelines for an Asset Management Plan Page 33

113 station valve condition assessment. The first step is a prioritization of the OE valves based on a BRE assessment. Then a plan will be developed for testing (optimally to test all sites within 5 years) and then the valves will be tested. As an outcome of this project, a long term plan will be developed with budget funding and implementation guidelines and timelines. Example of condition assessment of hydrants Prior to 2009, the Hydrant Inspection Team worked each summer to inspect and test every hydrant in our system. Some deficiencies were resolved at that visit or follow up corrective work orders were created. These crews of seasonal workers with low levels of skill and knowledge reported to a Mechanic experienced in hydrant maintenance. An evaluation of the existing program in the hydrant AMP considered: Not all hydrants need to operate (the key service level is that there is an operating hydrant within 500 feet of all service connections, and there is usually more than one hydrant that close), but more than 99% of hydrants do work. An annual inspection of all hydrants is probably unnecessary (how many hydrants have problems identified that prevent them from operating? How many of those with minor problems are not addressed and then inspected again the next year, when the same problem is identified?). Not all hydrants are of equal importance. About 20% of all hydrants are considered to have a higher consequence of failure because they are located near specific facilities. This ranking (where 5 is highest) has been suggested: 0 Noncritical Location is not near a critical facility. 1 Rail Location is within 50 feet of Rail: railroad, light rail, or streetcar. 3 School Location is within 500 feet of School: special education, head start, preschool & kindergarten, elementary school, middle school or other, skill centers & alternative, high school, or college or university. 5 Medical Location is within 500 feet of Medical Facility: nursing home, mental health facility, or hospital. Guidelines for an Asset Management Plan Page 34

114 The recommendation is to inspect and record assessment of the non critical hydrants every three years (triennially), rather than annually. Inspect and record assessment of every critical hydrant annually. One task in the AMP is to evaluate asset risks. Pipes in our distribution system have been evaluated in terms of the risk that failure poses to the water system and to society (through traffic disruption, damage to structures, environmental impacts, etc.). A service level requires that action be taken to mitigate high risks, or to better understand whether the risk is properly rated. The example below shows how this was applied to pipes with a large risk exposure: Condition assessment of buried pipes or pipes on bridges Pipe inspection provides a higher degree of confidence in estimates of the probability of failure. One strategy identified in the Distribution Mains AMP was to conduct a visual inspection of higher risk pipes on bridges. All pipes rating as medium, high or extreme risks are being inspected to confirm the condition. Among the results of the first condition assessment that were conducted: initially a high risk rating was assigned to the pipe on the SW 4 th and I 405 freeway crossing, but no concerns were found and the risk rating was reduced. In contrast, for the North Grand Avenue and I 84 freeway crossing, it was originally a medium risk, but the 16 steel pipe shows signs of being under compression. It appears that a large force has been applied from the South causing the pipe segments to snake at the North end of the bridge. A work plan has been created leading to with immediate action being taken on the pipe Preventive / Predictive Maintenance Strategies This section should answer the following questions: How is it performed? How often is it needed? Is there a different strategy for critical assets? What is the cost of the task? What are the benefits? What are the data collection needs and approach? Is there a current inspection approach? Does this document present a proposed condition assessment approach? Guidelines for an Asset Management Plan Page 35

115 Develop a strategy for preventive / predictive maintenance and estimate the budget needed to implement these. The budget forecast for this asset group, including all types of maintenance, rehabilitations and replacements will be collected and summarized in section 8.5 Forecasting Asset Condition and Funding Needs. Example of pump station predictive maintenance strategies: Current Predictive Maintenance Activities. Megger readings are conducted on motors at least once each year to check for insulation damage. Bearing temperatures are also measured and documented. Vibration readings and analysis is done to predict and solve alignment issues before the problem becomes severe enough to cause any damage. These vibration readings are taken and analyzed monthly to establish a normal baseline for each pump. The frequency of readings will probably be reduced once the baseline is clearly established and the schedule will likely reflect the relative importance of the various pumps, the type of pump it is, and the environmental conditions to which each pump is subjected. The fourth predictive maintenance activity is testing of transmission oil and filtering or changing it based on the test results. Suggested Predictive Maintenance BMP s. The AMP mentions the Federal Energy Management Program (FEMP) recommended maintenance regimes. A checklists for other maintenance tasks on the primary pumps and motors is also given in the AMP and includes tasks on lubrication, packing, cleaning, bearings and other work needed for a robust predictive maintenance program at pump stations. See the Pump Station AMP for full details. Preventive Maintenance of Hydrants overhauls A change was made in 2005 as part of the first hydrant program review by Asset Management to abandon the strategy of overhauling hydrants (replacing worn components and lubricating) proactively. Analysis showed the cost of the strategy of overhauling all hydrants on a 7.5 year cycle was about $500,000 annually, which would not avoid replacement occurring, but would avoid three types of repairs: hard to operate, stem leak, and base leaks. The total value of avoided repairs was estimated at less than $150,000 a year, far less than the cost of conducting the program. Guidelines for an Asset Management Plan Page 36

116 Preventative and predictive maintenance typically occurs on a regular basis, i.e. monthly, annual, bi annual, etc. Some predictive maintenance may also be done for regulatory compliance. Other example of preventative or predictive maintenance strategies: Tank cleanings every five years, Regulator cleaning and overhauls every five years, Valve exercising for large, critical valves every 2 4 years, Conduit inspections Reactive / Responsive Maintenance Strategies This section should answer the following questions: How is it performed? How often is it needed? Is there a different strategy for critical assets? What is the cost of the task? What are the benefits? What are the data collection needs and approach? Is there a current inspection approach? Does this document present a proposed condition assessment approach? Develop a strategy for reactive / responsive maintenance and estimate the budget needed to implement these. The budget forecast for this asset group, including all types of maintenance, rehabilitations and replacements will be collected and summarized in section 8.5 Forecasting Asset Condition and Funding Needs. Guidelines for an Asset Management Plan Page 37

117 Example of pump station reactive maintenance strategies: Reactive maintenance is basically the run until it fails maintenance mode. Little or no action is taken to maintain the equipment. The advantages to reactive maintenance include saving money and labor in the short term by avoiding maintenance of new equipment. The downside is a harsh reality. During the period of non maintenance we are shortening the life of the equipment, resulting in an early need for replacement. If it is a critical pump station part we have to pay for a large inventory of repair parts or take the chance of a long down time. Current Reactive Maintenance Activities. Many of the smaller pieces of equipment within a pump station are dealt with on a run to failure basis. Items like space heaters, air circulation fans, and sump pumps are generally not maintained but replaced when they quit functioning. Even with the current programs of preventative and predictive maintenance, there is still reactive maintenance needed for pumps and motors Repair Strategies This section should answer the following questions: How is it performed? How often is it needed? Is there a different strategy for critical assets? What is the cost of the task? What are the benefits? What are the data collection needs and approach? Is there a current inspection approach? Does this document present a proposed condition assessment approach? Many assets will require repairs throughout their lives. This section should focus on the repairs of medium or significant importance and costs. A tank that is 40 years or older, for example, may periodically need some minor repairs that may cost several hundred dollars and do not significantly affect service levels or safety do not need to be detailed. But we may predict more significant repairs needed on a less frequently basis. Some general examples are given below: Guidelines for an Asset Management Plan Page 38

118 General Examples of asset repair strategies: Tanks Depending on the tank type, location and other factors there may be repairs that we can predict will be needed throughout its life. Some tanks we know may have frequent vandalism and need painting on a more regular basis. Most tanks will need repairs to their ladders and safety equipment every 20 years. Depending whether a tank is steel or cement, buried or ground level it is reasonable to predict significant maintenance at different intervals (e.g. a steel tank at ground level may require major repairs valued at 5% 10% of its original construction cost every 20 or 30 years, or cathodic protection if it doesn t have CP) Large Meters these meters need periodic testing and repairs. A maintenance strategy was developed based on several factors (total and annual consumption, previous test scores, and time since last test/repair) that established frequency of testing and repair work. Mains Asset Management has developed Weibull curves based on size and type of main that can be used to predict the probability of the first failure, or break, of a section of pipe. Once a section of pipe has its first break the likelihood of future breaks will increase. There is also a break even point of breaks per mile in which once a pipe reaches that point then replacement is the least cost life cycle alternative. Develop a strategy for repairs and estimate the budget needed for repairs that are predicted through probability analysis or experience. The budget forecast for this asset group, including all types of maintenance, repairs, rehabilitations and replacements will be collected and summarized in section 8.5 Forecasting Asset Condition and Funding Needs Replacement Strategies This section should answer the following questions: How is it performed? How often is it needed? Is there a different strategy for critical assets? What is the cost of the task? What are the benefits? What are the data collection needs and approach? Is there a current inspection approach? Does this document present a proposed condition assessment approach? Guidelines for an Asset Management Plan Page 39

119 Example of large meter strategies: Replacement of large meters is done on an economic basis. If we assume that the value of equity is equal to the dollar cost expended and revenue received, we can use a least cost life cycle approach to assess when a meter should be replaced. An economic analysis in the current AMP demonstrate that total consumption, number of repairs and the number of previously poor test results are the main criteria for identifying meter replacement strategies. When meter accuracy deteriorates more rapidly and repairs become more frequent the replacement strategy becomes one in which the future life cycle costs (including loss of revenue due to inaccuracy) are minimized. Estimate the average useful life of an asset. This should be consistent with the deterioration curve in 5.3 above. Example of pipe replacement strategy: A simplified decision making model for pipe replacement was applied to projects in the 903 budget program. For each project, historic leak data was assessed and used to project a number of repairs that were expected in the future. The avoided cost of those repairs were compared to the estimated replacement costs. As the figure shows, many of our proposed replacement projects are not justified in terms of the avoided cost of repair. Example of pipe replacement strategy: A simplified decision making model for pipe replacement was applied to projects in the 903 budget program. For each project, historic leak data was assessed and used to project a number of repairs that were expected in the future. The avoided cost of those repairs were compared to the estimated replacement costs. As the figure shows, many of our proposed replacement projects are not justified in terms of the avoided cost of repair. Guidelines for an Asset Management Plan Page 40

120 Develop a strategy for preventive / predictive maintenance and estimate the budget needed to implement these. The budget forecast for this asset group, including all types of maintenance, rehabilitations and replacements will be collected and summarized in section 8.5 Forecasting Asset Condition and Funding Needs Risk Cost Analysis Risk cost is a more precise estimate of BRE. Business cases often use risk cost analysis in their analysis (typically a part of either a benefit cost ratio or net present value). In Risk Cost we assign dollar values to the consequence and express the likelihood of failure in probability terms, with a resultant dollar value on the risk cost: Risk Cost ($) = Consequence ($) x Probability of failure (% or decimal) Guidelines for an Asset Management Plan Page 41