Asset Management Made Easy

Transcription

1 Asset Management Made Easy Presented by: Gary Vaughan Date: April 17,

2 My Background Gary Vaughan 40+ years Utility Experience 17 years Government 10 years private utility 13 Consultant WERF Strategic Asset Management Committee WEF Infrastructure Task Force WEF Public Education Committee 1990 Australia (Sydney BOOT project) 2

3 Town sewage plant employee fined for urinating in co-worker's coffee pot... Posted: Tuesday, April 8, :00 pm Updated: 9:45 am, Wed Apr 9, By Rhonda A Culpeper jury ordered an ex-town employee in Culpeper County Circuit Court on Monday to pay $5,001 to his former co-worker whose coffee pot he admitted to spiking with his own urine... James Carroll Butler, who turns 54 next Sunday, owned up to urinating in Michael Utz s coffee pot because of personal ill will and spite toward him. Before the incident, Butler had worked for the town s waste water plant for 17 years his departure 3

4 Asset Management Made Easy The History 4

5 History of Wastewater AM Early 2000 s Mid 1990 s Early 1990 s 5

6 USEPA Asset Management

7 Quote from 2013 Report Card For America s Infrastructure ASCE, Physical Asset, Wastewater Grade D Capital investment needs for the nation s wastewater and stormwater systems are estimated to total $298 billion over the next twenty years. The federal government has required cities to invest more than $15 billion in new pipes, plants, and equipment to eliminate combined sewer overflows. 7

8 Factors Forcing Utilities to Extend facility Life (Drivers) Decreasing population Decreasing revenue Aging infrastructure Staff Retirement/replacement Citizens concern over rate hikes Unfunded federal mandates Permit Requirements 8

9 NPDES Permit Renewal 2/28/14 There is a recent trend of States (New Jersey and Michigan) inserting the requirement of an Asset Management Plan into NPDES Permit renewals. Here is an excerpt from a draft New Jersey NPDES permit: The permittee shall incorporate an Asset Management Plan as part of the overall O&M strategy. This plan shall include an infrastructure inventory with infrastructure repair replacement needs listed and scheduled according to priority/criticality, that ensures the entire collection system owned/operated by the permittee that conveys flows to the treatment works is perpetually and proactively managed 9

10 Asset Management Made Easy The Example 10

11 Goal: Purchase a New 1996 pickup 11

12 AM Decisions for the Capital Item First decision - Lease or Buy Level of service Would be my primary vehicle (did not have a spare vehicle) Maintenance Strategy Drive it until the wheels fall off Life expectancy Minimum of 150,000 miles and 12 years of service 12

13 EPA Worksheet Data - Example Level 2 Vehicles 1996 Ford Pickup Asset Class 11 Cost $21,000 Est. Life 12 Annual Dep. $1,250 Condition Rating 3 Residual life 8 % Asset Consumed 33% Redundancy 0% Probability Of Failure 3 Future Maintenance Change 150% 13

14 Cash Flow $70,000 $60,000 Renewal Profile Asset Renewal Profile $50,000 $40,000 $30,000 Assets will need replacing I better have CASH or a loan Cash Flow Deprec $20,000 $10,000 $0 Year 14

15 When Do You Replace an Asset? Answer: When the cost to repair is greater than the value of the asset Asset Installation Cost $ Asset Depreciation Service Life Remaining Asset Salvage Value Annual Ops & Maintenance Asset Value O&M Replacement Salvage I Bought a New Vehicle in

16 Asset Management Made Easy The Program 16

17 Step 1 Create an Asset Registry (List of Assets) 17

18 Step 2 - Decide What Level of Service (LOS) You Will Provide LOS is fundamental to AM because it: Drives costs Drives staffing Drives public opinion 18

19 Step 3 - Determine the Condition RULES Be consistent Use the same criteria for each asset Focus on the critical assets of the Assets 19

20 Step 4 What are the Consequences of Failure (CoF) CoF Rating Description % Affected Level 1 Minor Component Failure 0-25% Asset 2 Major Component Failure 25-50% Asset 3 Major Asset 0-25% Asset 4 Multiple Asset Failure 25-50% Facility / Sub-System 5 Major Facility Failure % Facility 6 Minor System Failure 20-40% Total System 7 Medium 40-60% Total System 8 Intermediate 60-80% Total System 9 Significant 80-90% Total System 10 Total % Total System 20

21 Step 5 What is the Probability of Failure (PoF) Probability of Failure % of Effective Life Consumed PoF Rating 0% 1 10% 2 20% 3 30% 4 40% 5 50% 6 60% 7 70% 8 80% 9 90% 10 21

22 Step 6 What is the Risk (how to prioritize) Probability of a failure Condition Age Material Maintenance history Consequence of that failure Costs of repair/replacement/rehabilitation Costs of damages Costs of public disruption Loss income Loss of public trust/opinion Regulatory exposure 22

23 Consequence Focus on Your Worst and Most Critical Assets! Risk Profile Catastrophic Major 1 Moderate 1 Minor 6 Insignificant Rare Unlikely Possible Probable Certain Likelihood (Probability) 23

24 Step 7 What is the Impact on Maintenance Impact on Future Maintenance Costs Rating Description Impact 1 Status Quo 100% 2 Higher 125% 3 Considerably Higher 150% 4 Significantly Higher 400% 5 Reduced Slightly 75% 6 Reduced Significantly 50% 24

25 Cash Flow $70, Renewal Profile Entering the information gives $60,000 the following profile $50,000 $40,000 $30,000 $20,000 $10,000 $0 Year 25

26 Asset Management Made Easy Review 26

27 Let s Review the Steps 1. Involve all Stakeholders 2. Create a list of assets 3. Create a Level of Service (LOS) 4. Determine the condition of the assets 5. Determine consequences of failure and how does it impact the LOS? 6. Create a maintenance strategy to meet your LOS 7. Plan your work, work your plan 27

28 CUPSS Good Tool for Small Utilities 28

29 Factors Forcing Utilities to Extend facility Life (Drivers) Decreasing population Decreasing revenue Aging infrastructure Staff Retirement/replacement Citizens concern over rate hikes Unfunded federal mandates Permit Requirements AM is a tool to help make your job easier! 29

30 When it Comes to Asset Management I Know It s Hard to Remember Your Original Objective Was to Drain the Swamp When You re Up to Your Backside in Alligators but, A journey of a thousand miles begins with a single step. Lao-tzu, The Way of Lao-tzu Chinese philosopher (604 BC BC) You Can Git-r-done Just Do It 30

31 THANKS For Letting me Share Gary Vaughan (740)