Asset Management: A Tool to Identify and Care For Municipal Infrastructure
Capital outlays by both municipal and investor-owned water and wastewater utilities are expected to keep rising as increasingly tight environmental and public health legislation affects how these utilities must act in the years just ahead. The combination of these higher expenditures and simultaneously increasing operating costs will present a difficult challenge to water/wastewater managers, and to public works officials in general.
Help is at hand, however, in the form of a tool called Asset Management. While not exactly a new concept, it is gaining in visibility and acceptance in the public works field. This was evident from the interest shown by more than 3000 participants who took advantage of a recent nationwide videoconference conducted by the American Public Works Association to address the topic.
APWA Board Member Richard Ridings, a vice president of Dallas-based consulting firm HNTB, started the conference by offering a simple definition --"Asset management is knowing what you have got and taking good care of it."
He pointed out that the method is not just capable of guiding the management and maintenance of infrastructure assets in the most cost-effective way. It is extremely useful in dealing with the political entities that make decisions on how a public agency budgets and spends. In sum, it allows water, wastewater and public works managers to provide "all the information the decision makers need to understand the situation, options, and decisions needed."
In addition to the water and wastewater facilities serving a municipality, other infrastructure elements such as roads, bridges, parks, public buildings, public right-of-way, airports, electric utilities, and others are fair game for asset management planners. They can use the concept to propose cost-effective measures for the design, construction, maintenance, rehabilitation, replacement, abandonment or retrofitting of an asset.
Two members of the staff of Bedford, TX, a city that recently developed and implemented an asset management program dealing with pavements, gave a presentation during the videoconference to describe their success. Mike Hutchison and J.C. Wood laid out the steps that were taken.
- Inventory: This step defined all assets to be managed and, where necessary, divided them into units consistent with the decision-making process. Requesting an inventory of assets from the chief financial officer was suggested as a starting point. Computer programs are available for preparing an asset management program. The Bedford staff used MicroPAVER (a pavement maintenance program available through the APWA) to build their specific asset management system.
- Condition Assessment: This can be a time-consuming step. In the Bedford case, where there was no prior experience, three months was spent reviewing historical data and seven months inspecting the streets. The process employed a two-person crew, a measuring wheel, a two-way radio, and a laptop computer.
- Needs Assessment: This step determined the cost to repair or replace all components without regard to funding availability.
- Prioritization: Components that needed repair or replacement were identified in terms of achieving the greatest benefit. The question was asked, "Do you prioritize by repairing the worst first?" The answer was no. Safety needs were considered first, preventive maintenance next. Sometimes priorities may be based on political considerations, e.g., promises or citizen complaints.
- Decision-impact analysis: Preventive maintenance was the main focus in this stage. Several maintenance strategies were compared in terms of long-term spending.
- Feedback: The final ongoing step allows fine-tuning of the asset management plan from year to year by improving the accuracy of projections, and building confidence in the program.
The Bedford staff justified spending $16.3 million on a preventive pavement maintenance program by demonstrating it would save more than $18 million over a five-year period. Their efforts resulted in complete repair of every city street within 24 months. During the assessment period, no new staff people were hired, but several consultants were retained.
The entire experience has been so favorable for the City of Bedford (a survey showed a 93% approval rating by residents) that the city is moving to include the drinking water, wastewater, storm drainage, and other facilities and functions in an all-encompassing asset management program.
Municipal managers will need all the help they can get down the road. They will have to contend with tougher regulatory requirements, citizens who are better educated and informed than ever (especially about environmental matters), the inevitable political interventions, finding the most cost-effective solutions to a host of problems, and fighting the never-ending battle for funds. An asset management plan can help them pull all the functional elements together so they can run their operations in a way that's commonly described as business-like.