asset management made easy vaughan - asset mgmt.pdf · 2014-04-29 · depreciation service life...
TRANSCRIPT
Asset Management – Made
Easy
Presented by: Gary Vaughan
Date: April 17, 2014
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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)
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Town sewage plant employee fined for urinating in co-worker's coffee pot...
Posted: Tuesday, April 8, 2014 4:00 pm | Updated: 9:45 am, Wed Apr 9, 2014.
By Rhonda [email protected]
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
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Asset Management Made Easy
The History
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History of Wastewater AM
Early
1990’s
Mid
1990’s
Early
2000’s
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USEPA Asset Management -
2003
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Quote from 2013 Report Card For
America’s Infrastructure ASCE,
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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.”
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
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NPDES Permit Renewal 2/28/14
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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”
Asset Management Made Easy
The Example
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Goal: Purchase a New 1996 pickup
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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
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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%
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$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
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Cash
Flo
w
Year
Renewal Profile
Cash Flow
Deprec
Asset Renewal Profile
Assets will need
replacing …I
better have
CASH or a loan
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When Do You Replace an Asset? Answer: When the cost to repair is greater than the value of the asset
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Asset
Installation Cost
Asset
Salvage Value
Asset
Depreciation Service Life
Remaining Annual Ops &
Maintenance
$
Asset Value
O&M
Replacement Salvage
I Bought a New Vehicle in 2013
Asset Management Made Easy
The Program
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Step 1 – Create an Asset
Registry (List of Assets)
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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
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Step 3 - Determine the Condition
of the Assets
RULES
Be consistent
Use the same
criteria for each
asset
Focus on the
critical assets
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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 50-100% 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 90-100% Total System
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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
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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
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Focus on Your Worst and Most
Critical Assets! Risk Profile
Likelihood (Probability)
Minor
Moderate
Major 1
1
6
Certain Probable Possible Unlikely Rare
Co
nseq
uen
ce
Insignificant
Catastrophic
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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%
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$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
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Cash
Flo
w
Year
Renewal Profile
Entering the information gives
the following profile
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Asset Management Made Easy
Review
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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
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CUPSS – Good Tool for Small Utilities http://water.epa.gov/infrastructure/drinkingwater/pws/cupss/index.cfm
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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
When it Comes to Asset
Management…
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“A journey of a thousand miles begins with a single step.” Lao-tzu, The Way of Lao-tzu Chinese philosopher (604 BC - 531 BC)
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,
You Can “Git-r-done”
“Just Do It”
