Asset Management: Ohio Senate Bill 2 (SB 2)

Transcription

1 Asset Management: Ohio Senate Bill 2 (SB 2) May 9, 2018

2 Today s Agenda 1 Ohio Senate Bill 2 Introduction/AM Overview 2 What do organizations need to do for SB 2? 3 Next Steps

3 1. SB 2 Introduction / AM Overview

4 What is Asset Management? Five Best Practices Core Management Questions: What is the current state of my assets? What is my required sustained level of service? Which of my assets are critical for sustained performance? What are my best minimum lifecycle cost CIP and O&M strategies? What is my best long-term funding strategy? What defines an asset?

5 What is Asset Management? What defines an asset? Physical pieces of equipment that are maintained. Useful life greater than or equal to five years. Value of greater than $5,000 as based on original cost. Examples of an asset? Water Main? Generator? Screw?

6 What is Asset Management? Asset Management Principles What do we have and where is it? What is it worth? What is it s condition/expected remaining service life? What is the Level of Service expectation and what needs to be done? When do you need to do it? How much will it cost and what is the acceptable level of Risk/Consequences? How do you ensure long-term affordability? * How are you going to manage the asset data moving forward? International Infrastructure Management Manual

7 What is Asset Management? EPA 10 - Step Process

8 What is Asset Management? Industry Lessons Learned Pitfalls Too much emphasis on data collection Disconnect from business drivers Lack of clear, feasible goals and implementation plans No early successes Entrenched business processes and corporate culture Competing priorities Lack of top-level management commitment Recommendations Tie data to decisions to reduce collection burden Create explicit connection to business vision, mission, objectives Develop manageable implementation roadmap Demonstrate quick wins and communicate them Pilot where possible Follow established change management practices Find executive sponsor who can make AM a priority

9 What is Asset Management? Benefits of doing Asset Management

10 What is Asset Management? Drivers for Asset Management Growing list of aging and expensive assets with conditions worsening while demand has increased; Justification for infrastructure investments; Transfer of institutional knowledge from retiring workforce; Transition from building and operating to managing assets by moving to proactive work environment; Improve decision making throughout the life cycle of the asset; Understand future renewal expenditures / Define optimal investment strategies.

11 Introduction / Context 2009/2013 ASCE Infrastructure Report Card 2009 Grade 2013 Grade Roads D- D Bridges C C+ Transit D D Aviation D D Schools D D Drinking Water D- D 2009 Grade 2013 Grade Wastewater D- D Dams D D Solid Waste C+ B- Hazardous Waste D D Navigable Waterways D- D- Energy D+ D+

12 2. What do organizations need to do for SB2?

13 Ohio Senate Bill 2 A public water system shall include in the asset management program all of the following: Inventory and evaluation of all public water system assets; Public water system operation and maintenance programs; Public water system emergency preparedness and contingency planning program; Criteria and timelines for public water system infrastructure rehabilitation and replacement; Approved public water system capacity projections and public water system capital improvement planning; A long-term funding strategy to support the public water system's asset management program implementation.

14 Ohio Senate Bill 2 How do we start??? Development of an Asset Management Plan (AMP) Road Map can assist organizations on moving forward appropriately. What does an Asset Management Plan look like? Current State Understanding / Road Map

15 Ohio Senate Bill 2 Asset Management Plan: State of Local Infrastructure Asset Inventory, Valuation, Useful Life, Condition Levels of Service/KPI s Performance Measures, Goals/Objectives, Trends, Current Performance AM Strategy AM activities, procedure, and policies, Future Demand, Lifecycle Management, Risk Management (LoF/CoF), Criticality Financial Strategy Expenditure History, Yearly Revenues, Replacement Value, Funding Strategies Improvement Plan / Road Map

16 Ohio Senate Bill 2 Elements of an Asset Management Program Draft from Ohio EPA Focus on three areas: Managerial Documentation of Ownership Certified Operators Overview of System Operating Plan Asset Management Program Procedures Contacts Contracting/Purchase Procedures

17 Ohio Senate Bill 2 Elements of an Asset Management Program Draft from Ohio EPA Focus on three areas: Technical Map and Inventory of Assets Evaluation of Assets Levels of Service Metrics/KPIs O&M Programs Capacity Projections Rehab/Replacement Timeline CIP

18 Ohio Senate Bill 2 Elements of an Asset Management Program Draft from Ohio EPA Focus on three areas: Financial Pro-Forma Statements Income Statement, Balance Sheet, Statement of Cash Flow, Amortization Schedule Capitalization terms of debt Current Water Rate Ordinance and Water Rate Evaluation Demonstration of Bond/Credit Rating

19 Ohio Senate Bill 2 How do we Start Recommendation: Plan the Work, Work the Plan Develop an Asset Management Plan Road that reviews current state against SB 2 requirements; Focus on planning for 2-3 year timeframe for implementation; Road Map will define tasks necessary, schedule for implementation and budget for those activities;

20 Ohio Senate Bill 2 Note: An implemented Asset Management Program needs to be in place if: Applying for SRF (requires organization to have AM implemented) Enforcement Actions Obvious Issues

21 3. Next Steps / Plan the Work

22 Next Steps / Plan the Work How should organizations proceed? Education/Communication Develop an Asset Management Plan Road Map

23 Next Steps / Plan the Work Education/Communication: Reasoning / Benefit of a Road Map Executive Leadership (Mayor, Council, Finance Committee) Other Stakeholders (Managers, Operators, Plant Resources, Field Maintenance Crew) Educate on what Asset Management is and how it can be beneficial and provide value. Educate on the appropriate process to move forward.

24 Next Steps / Plan the Work Road Map Development: Understand Current State What do you currently have? Managerial Technical Financial Workshops, Questionnaires, etc. Build upon you current investment

25 Next Steps / Plan the Work Road Map Development: Gap Analysis What do you not have currently? What has been started but is not fully developed? Define the extent of the Gap

26 Next Steps / Plan the Work Road Map Development: Plan moving forward Task What are the tasks or items that need to be addressed? Time What is the anticipated time that it would require to address the task Stakeholders/Resources Who needs to be involved in the task Cost Anticipated costs to address the task Prioritization Which tasks to address first

27 Next Steps / Plan the Work Asset Management Plan Development: Need to have a Champion Collaborative and Interactive Approach Do not develop in a vacuum Need to have necessary resources involved from many departments Executive Managers Operators/Field Crew Finance Communication throughout the process

28 Asset Management Final Thoughts: Without proper planning Without proper planning

29 Questions? Andrew Faley, GISP, PMP Stantec Consulting Services, Inc. GIS Manager