How Do You Know How Old Your Assets Are?

During the recent National Capacity Development and Operator Certification Workshop in Indianapolis, an interesting question was posed.  The topic under discussion was asset management.  The question was how can very small utilities, particularly those with volunteer boards, determine how old assets are in order to develop a capital improvement plan.

I didn’t have a solid sense of what a good answer should be, so, I asked Heather Himmelberger, the Director for the Southwest Environmental Finance Center.  Heather and her team spend countless hours helping small communities with precisely these kinds of questions.

Here’s Heather’s response…

“The truth is, it doesn’t really matter how old an asset actually is.  The age of an asset is only one characteristic that defines an asset, but it is not even close to being the most important. The good news is that a range of factors such as condition, useful life remaining, preventative maintenance history, and corrective maintenance history, are much more important in determining when an asset needs to be replaced than the age of the asset.

“These factors are also ones that an operator and/or system manager can actually know or make a good educated guess about.  For assets that can be seen, a visual review of the asset by those familiar with it, combined with whatever is known about preventative maintenance history, repair history, and operational issues, can provide a good estimate of condition and how much longer the asset will be able to do the job for which it is intended. For assets that can’t be seen, the same categories can be used to estimate condition and useful life remaining, except the visual inspection.

“When operators or managers are being requested to make an estimate of useful life remaining, it is important to ask the question in the form of, “knowing all you know about how the asset has been operating, how it’s been maintained, the repairs you’ve had to do…how much longer do you think that pump can keep pumping or that valve can continue to open and close or the pipe can convey water, etc.?” This is an estimate in terms of number of years it can still do its job. Will the operator/board member/manager be completely right about their estimates? The answer is no, but that’s okay.  They may overestimate some or underestimate others, but it will be good enough to develop a simple capital improvement plan.

“If you back up a little further and say, what if they don’t even know what assets they have, the process starts at a different place.  Every water system has some knowledge of their system’s components; it may be in someone’s head or in old drawings or just in visual clues on the ground, but there is a starting place. In that case, you start with what is known and develop a simple asset inventory and/or a map of assets. All assets that can be seen (e.g., valves, hydrants, meters, treatment facilities, storage tanks) are good places to start.  An operator/board member can walk or drive around the system either on their own or with an assistance provider and collect data about the assets. Data collection can be done with simple phone apps or on a piece of paper.  Any assets unable to be seen, such as pipe, can be drawn in later based on the visual clues such as valves, meters, and hydrants.  Will this data be exact?  No, but it will be good enough to get the CIP started.  The inventory and map can always be updated and improved over time.”

Thanks, Heather, for offering some helpful, basic approaches in working with very small systems.

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