Welcome to the BPH Asset Management Program. This PowerPoint presentation is meant to provide additional information and guidance on developing asset

Transcription

1 Welcome to the BPH Asset Management Program. This PowerPoint presentation is meant to provide additional information and guidance on developing asset management plans for medium to large sized drinking water utilities. This presentation should be viewed prior to starting to develop your Asset Management Plan (AM Plan) and discusses advanced asset management approaches you may want to consider when preparing your AM Plan. 0

2 So you may ask What is asset management? Well truthfully there are many different definitions. For example, EPA defines it as A process for maintaining a desired level of customer service at the best appropriate cost. The American water works association defines it as a systematic process to obtain the maximum value from physical assets. However, simply put, it is a way for a system to look at the big picture and should aid in sustaining water services into the future! 1

3 So what does that really mean? When put into place, asset management will help systems to plan for their future needs. Additionally, it helps systems be proactive rather than reactive with maintenance and therefore, protect their existing assets. By tracking maintenance for the system s assets, it allows a system to identify trouble spots and save money by targeting maintenance to fix these spots before they become nightmares. Plus an asset management plan can help a system secure funding to make system improvements by documenting why needed upgrades and rate increases and required. By maintaining it s assets, the system will have less trouble remaining in compliance and be able to provide customers with quality service at the best possible price. 2

4 Ok, so how is this really going to benefit me you ask? Well, there are numerous ways asset management will benefit you, but some of the main ones are: it helps define the expectations for your system s service to the customer, it gives you the information that you need to produce a maintenance audit, in addition, it aids you in identifying and managing the assets presenting the highest risk to your system if they fail, it also supports you in determining the full costs for operating and maintaining your system for the long term, and it assists you in making investment decisions. 3

5 In Other Words. 1. Supports your Utility as a customer service business- basically it keeps your customers happy with safe, affordable, and reliable service. 2. Saves staff time- you will have clear direction of when and what O&M tasks need accomplished. 3. It will boost utility efficiency- you will focus your efforts on the most critical needs of the Utility. 4. A written AMP backs up your budget talks with solid facts. 5. Gives you confidence in telling your story- The AMP will demonstrate whether the Utility is sustainable for the long term, and if it is not it will help you identify specific targets to help get you there. This will give you confidence in going to Funding Agencies, PSC, and your stakeholders about obtaining grants, loans, or rate increases. 4

6 This slide shows the AM Agreement which should be reviewed and completed by Utilities who are receiving funding from the DWTRF. The purpose of the agreement is to help to communicate the proposed timeline and necessary steps to developing an AM Plan. Your Utility will identify the responsible party for each step and submit to the BPH for review. 5

7 So where do you start? 1. First thing you need to do is figure out what you have and where it is at; however, this isn t always so easy to do given many facilities have some assets that are about 100 years old. So it is important to estimate the age of an asset when you are in doubt. Also, as assets get replaced you can record locations as well. 2. Next, consider what type of data or AM tools you already are using? This may include AM software, Work Order Software, Spreadsheets, Databases, GIS, CAD, etc. 3. Then consider, what type of environmental or regulatory concerns are currently present or anticipated in the future that may affect your system? 4. Limited cash flow is another hurdle so once you prioritize the Capital Investment Projects you will need to figure out the best funding strategy. This may be with the use of bonds, loans, cash reserves, rate increase, etc. 6

8 So what might an AM Team look like? Here is an example of an AM Team. 1. You must included someone from the Utility as the AM Lead. We recommend that this is someone in the role like a chief operator, general manager, or Board Official. The AM Lead will need to understand the processes and approaches used for every element in the AM Plan. We have found that a mayor should not be used as the AM Lead since this position changes regularly, however, they can be included as part of the team. 2. You should have a AM Data Development Coordinator who will assist the AM Lead, we recommend that this is another operator/operational staff, office manager, or secretary. The AM Data Development Coordinator will be the right hand man for determining the state of the Assets, and understanding the processes and approaches in place in development of inventory and other areas of AM. 3. You should also have a Financial Lead who would be the go to person that handles budgets and other financial information like the Treasurer, City Clerk, or Accountant. This person should have a good understanding of the financial state of the Utility and in developing the financial strategies to help address the 7

9 upcoming CIP projects. 4. A Recorder is also recommended and can be any professional service provider, or Utility Staff. Their role might be to work alongside the AM Team and help to record, communicate, and prepare deliverables for the Utility. We understand that some of these roles may be combined or adjusted, as needed. These were provided to give you a good idea of what roles should be considered as part of an AM Team. It is a requirement that the AM Lead be a representative of the Utility; therefore, you should not have a professional service provider as the AM Lead. 7

10 Your AM Team will complete the AM Team and Mission Statement in the Advanced AM Guidance Tool. This will be submitted once you develop your Priority Asset List. The AM Team and Mission Statement will be submitted with the priority assets list. 8

11 So why do we need to develop a Level of Service Statement? Well, for one it helps you avoid failure mode management. In other words it should help your Utility repair, rehab or replace major assets before they break down and not wait till after. Remember through this whole asset management process the focus is to become more proactive. Most of you probably do not wait for your car to stop working to fix it right? You do preventative maintenance like get your oil changed, well this is the same idea. It also helps you see the big picture- What is your vision for your keeping your customers happy and managing your resources? You want to think about: What do you do? Why you do it? How you do it? *Many times you have different people dealing with different items at your Utility so you can lose sight of the big picture. Being able to sit down and come up with specific Level of Service (LOS) Goals will help you stay on course. 9

12 When developing LOS Goals your AM Team should consider whether the goals are achievable for the Utility. For example, do you have the time, resources, and money to manage the LOS that you are considering? Do the LOS Goals support your overarching mission and/or system goals? It is important to make sure that before finalizing your LOS goals they should be reviewed and agreed upon by your whole asset management team. If you have any deficiencies in a LOS Goal it likely will mean you need to focus your money in that area. It s a good way to communicate expectations and expenses to stakeholders- This could be anyone that is part of or effected by the utility. For example, it could be board members, funding agencies or customers. But remember, the higher your LOS the higher your costs will be! 9

13 First we are doing to go over how to develop your LOS Goals Keep in mind you want your Utility s LOS to: 1. Define major goals for your system. 2. Identify your Utility s objectives. 3. Set performance targets: both short and long term. 4. Measure your Utility s goals: your LOS should provide a way to measure your progress. This may require that you standardize the O&M reporting and tracking to measure LOS goal progress. 5. Identify Utility deficiencies: Are you meeting all your LOS Goals? If not and you have found that you have deficiencies in LOS you will address these in the action plan of your AMP. LOS Goals should be SMART! Developing SMART LOS Goals will help you to measure your progress. Let s take a closer look at SMART goals SMART: 1. Specific: Well defined. 10

14 2. Measurable: How you will know if it has been achieved? Be able to show progress. 3. Attainable: Is the goal capable of being reached? 4. Realistic: Can you reach it within your available resources, knowledge, time? 5. Time-based: Provides time frame to achieve goal- enough time to achieve the goal, but not too much to where it affects your utility performance. 10

15 There are 4 different LOS service areas that you can use to develop your LOS statement. The first LOS area is Asset Preservation and Condition. When developing your LOS goals in this area you may want to think about: What are the physical capabilities of my assets? What is your plan to properly maintain your assets and insure that they are in reliable working condition? What areas within your system and assets are most important to insure you will be able to provide the best LOS possible? When you consider sustaining a preferred LOS, are you taking into account asset age and life cycles, asset conditions, funding availability, etc.? The second LOS area is Conservation, Compliance Enforcement. When developing your LOS goals in this area you may think about: What do regulators require currently, and possible future requirements? How often are you out of compliance with regulations? Are your operators properly certified? 11

16 What is your method to stay aware of and prepare for new regulations? Have you developed a source water protection plan to assess and reduce threats to your water? The third is Health, Safety, and Security. When thinking of this you might ask yourself: Have you establish an emergency response plan? How do you rate your past performance in providing safe drinking water consistently to the public without interruption? How secure is your water system from accidental or intentional contamination? The fourth LOS area is Service Quality and Cost. When developing your LOS goals in this area you may think about: What do your customers expect? Do you share your LOS statement with your customers? How do you track and respond to customer needs/complaints? How quickly do you want to respond to customer outage? 11

17 The WVBPH has developed a Advanced LOS SMART Goal Worksheet. This worksheet leads the Utility through a series of questions to help you build a SMART LOS Goal. It will do this by asking: 1. What is your goal? What are your overall Utility objectives? 2. Who is involved? For example, are employees involved and if so which ones? 3. Where does it happen? For example, what department should be involved? 4. Which requirements apply or constraints exist? Is there anything that must be accomplished for this to occur or are there any obstacles? 5. Why do you want to do it? What are the benefits to this goal or why do you need to accomplish it? 6. How do you obtain it? What performance targets(actions) need to be completed to get there? 12

18 Here is an example SMART Goal: The service Area for our example is Service Quality and Cost : The example goal is Our water system staff will log all customer complaints daily into the Customer Compliant Tracking System and assign them to staff for investigation to be completed and reported to the manager within 48 hours. Notice that the goal establishes: What: (underlined in blue) log all customer complaints daily, and assign, investigate, and report to the manager within 48 hours. Who: (underlined in red) Water system staff, Where: (underlined in orange) Customer Compliant System, How: (bold typeface) standardize the compliance receiving process, and develop forms to record customer issues and track corrective actions, and review complaints and response time at monthly board meeting to evaluate performance. Notice that timeframes are provided for each target to make them measurable: In this example the target date is July 2015 to have these processes in place. 13

19 The AM Team will use the Advanced AM Guidance Tool and insert the LOS Goals. You should have two LOS Goals for each service area. The LOS Goals will be submitted once you develop the priority assets list. 14

20 Once you develop an Asset Registry Plan you will start the Condition Assessment Protocol Process. We will overview each of the steps to do this in more detail. This first round you will establish the condition assessment protocol and develop condition ranking charts that will be used into the future at your facility. The idea here is to set up the protocol and get it in place in the various departments. You may only have time initially to base your conditions assessment on your knowledge from experience or history of working with the assets. However, you will start working the process into your O&M program and over the next year you will be able to review your information and use it to make decisions on conditions. 15

21 1. A written CAP will guide staff in consistently tracking and reporting the state of an asset. It also helps to prioritize the O&M schedule. 2. The BPH has created the Developing Your Conditions Assessment Protocol PowerPoint which explains in further detail how to create: Asset Registry Plan: Divisions and Pressure Zone Condition Ranking Charts Conditions Assessment Protocol (Click on this link to view the CAP PowerPoint): Advanced_AM_2_22_16_CAP.docx 16

22 This guidance is located at sset_management.asp 16

23 The Advanced AM Guidance tool will help on developing Priority Assets List. At this time you will complete the Priority Assets List and submit the whole workbook. This will incorporate the AM Team Table, Mission Statement, LOS Goals, Naming Your Assets, Condition Ranking Chart, Condition Assessment Protocol, Criticality Summary, and the Priority Assets List. Again your Utility may develop an unique approach to developing your criticality and priority. Please provide a thoroughly explanation of what you plan to do to further prioritize your assets for rehabilitation and renewal efforts. 17

24 The Advanced AM Guidance tool will help on developing O&M Strategy. The O&M Strategy should be summarized and should explain how you will deal with preventative, emergency/reactive, and deferred maintenance. Again your Utility may develop an unique approach for your O&M strategy. Please provide a thoroughly explanation of what you plan to do to sustain your assets. 18

25 Optimize your O&M Investment So you are going to take your critical assets, and prioritize your O&M efforts on them. As you plan, schedule, and execute your O&M you will need to build in measurements to evaluate your progress. This evaluation will help you know if you are meeting your LOS. If you aren t meeting your LOS you will build a plan of action to deal with it. Later we will discuss that this will become a target in your action plan. 19

26 Studies show, Planned maintenance costs one-third less than Unplanned maintenance for the same task and by following the manufacturer s recommendations the useful life of equipment can be increased 2-3 times. Notice that the preventative maintenance, rehabilitation or replacement, and reactive maintenance all support your desired LOS. 20

27 This shows an example of the Level of Service Goals measurement built right into the O&M Monthly Report. If there are issues during the O&M tasks these can be tracked and findings will help measure whether you are meeting your LOS performance targets. 21

28 The Advanced AM Guidance tool will help on developing O&M Strategy. Your MY O&M List should provide a list of the tasks you are projecting need to be completed to help you maintain your assets. If you are deferring maintenance you will also need to project that as well. Again your Utility may develop an unique approach to develop your MY O&M List. 22

29 So you may ask, What are lifecycle costs anyway? Lifecycle Costs is the process of identifying and documenting all the costs involved over the life of an asset. It is important to understand the total cost of ownership of an asset since it is often far greater than the initial capital cost and can vary significantly between different alternative solutions to a given operational need. Your AM Team should consider Lifecycle Costs centered around the critical assets. 23

30 Over time it cost more to use an asset, because of increased operation and maintenance costs. You will notice in the graph below that as an asset gets older the operation and maintenance costs tend to increase. This is one reason why you should consider the costs over the whole life of an asset. Doing so really will aid you Utility in decision making. 24

31 To obtain the best Lifecycle costs you should start early in the design phase of a project. Move towards : least possible costs/best scenarios You will consider the alternative solutions Cost drivers Lead times/lifespan Usage O&M Risks 25

32 Do Nothing Increase Maintenance Operate Differently Repair Only Refurbish or Rehabilitate Replace with similar asset Replace with improved asset Reduce the cause of failure Use Demand Management Reduce Level of Service Construct a new asset 26

33 So let s dig into these a little further. What do these renewal strategies actually mean for my Utility? Do Nothing- maintaining the current operations and maintenance behavior typically that defined by the manufacturer or the design engineer. It is the realistic baseline case against which other alternatives are compared. Renewal (Major Repair, Rehabilitation or Replacement) - Assessment of different rehabilitation or replacement strategies requires an understanding of the costs and longevity of different asset intervention strategies. Each strategy is costed for the expected life of that strategy, converted to an equivalent present worth, adjusted for varying alternative life lengths, and compared to find the least overall cost. Non-Asset Solutions - In certain circumstances the non-asset solution (providing the same level of service without a major additional investment) can be a viable alternative (for example, using pricing strategies to reduce the consumption of water). 27

34 Change Levels of Service - compares alternatives with different levels of service (different levels of benefit) and projected benefits in addition to the cost projections. Dispose - retiring the asset at the end of its useful life. Do-nothing not investing any money on any form of maintenance or renewal, including that recommended by the design engineer or manufacturer. 27

35 Focus your efforts on determining the lifecycle costs for the assets that are most critical to your system. 28

36 The Lifecycle Costs tool was developed to help Utility s monitor the lifecycle costs of their critical assets. By using this tool it will help your Utility be proactive and make the most cost effective asset renewal decisions. You are not required to use this tool if you have financial software or other methods in place that help you understand the full LCC for the most critical assets. 29

37 You can provide a summary of your financial strategy and long term funding plan. In addition, the financial workbook tool can assist you in presenting your financial submittal. At a minimum, your Utility's budget information for the past few years. Make sure that it includes last years actuals and the budget information for the current year. If you do not have a current budget, you will be required to develop one and address in the action plan. See the Financial Workbook Tool to aid you in further developing this information. You do not have to use this tool if you have a financial software or another means to provide this supporting information for our review. Also, you should use this time to also describe your approach to what defines an asset; what type of assets you will track full lifecycle costs; and what defines a CIP. 30

38 The Advanced AM Guidance tool will help on developing Lifecycle Costs for your most critical assets. Again your Utility may develop an unique approach to show this information. There are tools to aid in the process, but you may already have a good work order or financial software that helps you to track costs. If so, please just provide a summary of what you do or plan to do. 31

39 Capital Improvement Plan (CIP) You will need to evaluate your CIPS lists to make sure you the priority makes sense for your Utility. Again a series of questions will help you gain a better understanding of this: 1. What are your priority projects? 2. Why is this the right project at the time? Benefits and your confidence should be weighed. Identify strategic drivers. 3. What are your funding options? What must you do to proceed with a project? 4. Consider developing a business case for each project which will further summarize the timing and project solution. 5. Develop a CIP- which will show the priority of the projects and summarize the needs, benefits, and funding strategies. 32

40 Many things can increase the risks for your assets such as: 1. Poor Condition. 2. High Business Risks. 3. Poor Performance Scores. 4. Poor Reliability Scores. 5. Low Remaining Useful Life. 6. No Redundancy. 7. Imminent Major Failure Mode. There are Four Major Failure Modes that Drive you Confidence Level Rating: Capacity- is the asset undersized or already at capacity? What is your demand on the asset? LOS- does the LOS require a higher level of function? Mortality- is the physical state of an asset below what is acceptable for function? Efficiency- does operational costs exceed the alternative? 33

41 Step 9- Long Term Funding Plan Includes: 1. Capital, 2. Maintenance, and 3. Operational Investments. Accounts: 1. Full economic costs, 2. Addresses LOS, and 3. Business Risks. Incorporates: 1. Raising rates, 2. Creating a dedicated reserve, 3. Acquiring Grants/loans, and 4. Short and long term targets 34

42 The Advanced AM Guidance tool will help on developing your financial strategy/long term funding plan for your most critical assets. Again your Utility may develop an unique approach to show this information. The idea is to further explain what the projects are and how your propose to fund them. 35

43 Action Plan Address: Objectives and targets Capital Investment/Improvement Plan Special issues (financial, environmental, and regulatory/compliance) Deficiencies in LOS 36

44 Deficiencies from Sanitary Survey s Schedule to review and update the plan annually Tips: Goals can be changed, added, removed, and adjusted as needed Large issues or goals may need interim timeframes to keep momentum 36

45 The Action Plan will be the last part in building your Asset Management Plan. Your Utility will want to address any issues that came to light during this AM Plan development. This may include, but is not limited to, deficiencies of LOS, Sanitary Survey, or any financial, regulatory, environmental, or compliance problems. You will also address any maintenance or capital investment projects that are necessary to be completed in the next ten years. This table should clearly define the priority, objectives, targets, and improvements where the utility needs to take action. The Action Items table compiles all the aspects of the utility that require action or followup. You should clearly define any objectives and milestones to which you are committing to in your plan. Action items should have a reasonable likelihood of being accomplished and should be more specific than LOS goals. 37

46 The Advanced AM Guidance tool will help on developing your Capital Improvement Plan for your most critical assets. Again your Utility may develop an unique approach to show this information. The Action Plan will be the last part in building your Asset Management Plan. Your Utility will want to address any issues that came to light during this AM Plan development. This may include, but is not limited to, deficiencies of LOS, Sanitary Survey, or any financial, regulatory, environmental, or compliance problems. You will also address any maintenance or capital investment projects that are necessary to be completed in the next ten years. This table should clearly define the objectives, targets, and improvements where the utility needs to take action. The Action Items table compiles all the aspects of the utility that require action or followup. You should clearly define any objectives and milestones to which you are committing to in your plan. Action items should have a reasonable likelihood of being accomplished and should be more specific than LOS goals. The template below can be adopted or modified to fit your Utilities needs. Please make sure to reflect your Utilities needs and highlight anything that is necessary to fit the specific elements for your Utility. 38

47 Your AM Team will develop an AM Plan which will incorporate the findings from the previous submittals. You should include summaries to describe the process and protocols used, identify all critical assets, O&M, and CIP list with long term funding plan included. The conclusions of this AM Plan will further support the Utility's mission statement, and LOS goals. It will incorporate an action plan that clearly defines the many objectives, targets, maintenance and priority improvements needed for the utility. It will address any specific issues the Utility may be facing such as financial management, environmental management, and regulatory or compliance issues. 39

48 Your AM Team will submit this completed workbook with all the supporting stand alone submittals (ARP, CRC, CAP, O&M, LCC, and any other supporting documentation). All of these documents will serve as your written Asset Management Plan. You will be required to keep the plan updated for the life of the loan. BPH will ask for these updates annually. Please see the System's Guide to maintaining the AMP for specific items that you should consider. 40

49 Turn over in drinking water staff (AM Team members) is a common issue we have experienced when working with DW systems. Short staffing- folks really don t have a lot of time to devote to AM development. Appropriate leads managing tasks Staff knowledge/skill, resources, and time- These are hurdles that you may have to overcome by setting specific interim targets to help you get there. Stakeholder buy in (Leaders who have authority to make decisions in support AM Program needs) Communication Lack of control over outside organizations 41

50 1. Assign tasks to appropriate staff 2. Knowledge of staff skills, and resources 3. Provide AM Training 4. Delegate tasks AM lead shouldn t be the only person gathering and processing the data. This should be assisted by other staff within the Utility. 5. Understanding your stakeholders- be sensitize to who your target audience is, and their needs or constraints. 6. Inform Board or political leaders of AM progress and issues 7. Keep communication open and schedule regular AM Team meetings 8. Formal written agreements for task/timeframes 9. Evaluate and research what tools and processes work for you. 10. Organize/manage AM information 11. Know your systems needs 12. Take it one step at a time towards the big picture. 42

51 If you are a DWTRF recipient and you are hiring an Asset Management Administrator or technical service provider to help develop your Asset Management Plan you will want to keep in mind: The AM Team as a whole should be involved in each step of the planning process and the Utility s AM Lead should have a full understanding of each step so he or she will be able to take responsibility for maintenance of the AM Plan in upcoming years. If you have hired an engineer or a consultant to help develop your AM Plan please make sure you (the AM Team) reviews and approves each and every submittal and item developed. Also all submittals should be submitted by the AM Lead, not the Service Provider. 43

52 Please keep in mind that once you have completed your AM Plan your work is not done! You will need to maintain and update your AMP continuously. When: Annually (at a minimum), and for the life of the loan (for DWTRF recipients) As assets are renewed or replaced Reevaluate: AM Team Level of Service Naming Your Assets/Asset Registry Plan Condition Ranking Charts Remaining Useful Life Condition Assessment Protocol O&M Strategies Life Cycle Costs Financial Strategy/Long Term Funding Plan Capital Improvement Plan Action Plan Do not worry if you do not know what some of these parts are right now, we will get 44

53 into them later. We just want to ensure that you understand that you will need to keep up all part of the plan as needed over time. Resources: System s Guide to Maintaining your Asset Management Plan 44

54 Completion of Your Asset Management Plan The AMP should provide a summary of all the elements, findings, objectives, and targets to managing, and implementing the AM. 45

55 These before and after photos demonstrate just what asset management can do for your system. 46