From time to time, ASDWA receives helpful and informative information from our colleagues at Boise State Environmental Finance Center (EFC). The article below is a good example of the type of work that these good folks take on. At the end is a note from the EFC Executive Director David Eberle inviting you to get in touch if you have questions or issues that you’d like to see researched.
Asset Inventory: What can it tell you?
When does a system operator know that an asset just looks like it is going to fall down and when it actually going to fall down? These are questions that system operators need to ask themselves annually, and report their findings to their operating board. The previous article pictorially presents images of what appear to be assets in distress. However, if it something you see every day it may not even register that the last winter added another set of rust spots along a seam or dry rot has moved from the wall into the roof rafter. It takes a scheduled routine to inspect and record conditions to determine the rate of deterioration.
Why is this important when I know the condition of my assets? Boards do not like surprises, particularly when it is a piece of critical equipment. Without a written document, it is difficult for a board to remember what they have been told. Assets may be one of many responsibilities the board is focusing on. Additionally, boards prefer to plan expenditures, rather than reacting to an unplanned one.
The first step in preparing a report for the board is the inventory of assets. As the previous article illustrates a simple cell phone camera is a valuable tool in creation an inventory list. Not only is the phone able to take pictures also many smart phones have a GPS application that can record the location of the asset. As part of any disaster preparedness plan is location of assets is important. When known landmarks, roads, trees, or signs have been disturbed, it can take valuable time trying to locate critical assets.
Once the location has been identified, a condition scale needs to be assigned to the asset. There are standard scales, age of asset, number of hours operated, and physical condition. Each year it is the operator’s responsibility to record the change in asset condition and make an estimation of remaining life. The remaining life will not be linear based on year of installation. Finally, each asset needs to be evaluated on the basis of its function relative to delivery of service. A shed that falls down will not interrupt service while a pump failure may mean failure of water delivery. On a scale (1 to 10 or 1 to 5) of how critical each asset is to the functioning of the plant, rate the asset. This scale of criticality will inform the board how to prioritize the expenditure list you have developed.
Now you are able to present to the board your opinion of what needs to be replaced and when it should be replaced before it fails. The major repair and maintenance work plan should cover, at a minimum, five years. Larger organizations will have a 20-year capital improvement plan. Until the process becomes ritual, you can separate the projects that need to be done within the next 24 months and projects that can wait up to 60 months to simplify the plan. Once the first year is completed, successive years are easier. And as asset conditions are updated annually, projects may move between the 24 month and 60 month classification. This will give your board time to adjust rates, work with their state SRF program and if it is a municipality priority rank how to use their unrestricted funds. These steps also will help the plant operator build a strong working relationship with their board, and improve the plant capacity, reliability and durability.
Do you have a question or an idea for the Environmental Finance Center? Is there a topic you wish us to write on? We want to hear from you. Please use the link below to send us topics for research, questions or inquires about how we may be able to help you. EFC@boisestate.edu.