30 Minute - Asset Management30 Minute - Asset Management

“Explain Asset Management in Practical Terms and Demonstrate Practical (Implementation) M th d ”Methods”

1040 REALLY Easy Tax Form

1. Federal Taxes you paid?2. State Taxes you paid?

$ 7,500

$ 500$ 2,000

3 Local Taxes you paid?

5. Total Taxes Paid (add 1-4) $12,500

$ 500$ 2,500

3. Local Taxes you paid?4. Property Taxes you paid?

6. How Much did you make? $50,0 00

7. Subtract line 5 from line 6 $37,500

8. Taxes Due (enter amount from line 7) $37,5 00

Thank You your voluntary compliance is greatly Appreciated

AGENDAAGENDA

History of AM (Wastewater)History of AM (Wastewater)“Push” Vs “Pull” InformationPush Vs Pull InformationAMUSE UtilityQ/A

History of Wastewater AMHistory of Wastewater AM

“Let’s Ring ‘em up on the blower”Let s Ring em up on the blower

PUSH VS PULL INFORMATION30 Minute Asset Management

PUSH VS PULL INFORMATION GATHERING

“Push” ConceptPush ConceptInformation is pushed by the creators of p ythe information, with little regard for the end-user needs end-user needs Too much information is created in

f fanticipation of unforeseen needs, and not in the form needed by the end-user

CCTV Projects

CCTV

“Clean House” The Mitchell’s Living RoomClean House The Mitchell s Living Room

“Pull” ConceptPull Concept

Information requested by end-user in the Information requested by end user in the form and precision level required for the decisiondecision

Compliance ReportingOrganization can respond specifically without Organization can respond specifically without wasting effortRegularity allows the process to seek efficiency g y p ythrough automation or through lower costs methods

ASSET MANAGEMENT USING30 Minute Asset Management

ASSET MANAGEMENT USING SIMPLE EXAMPLES (AMUSE)

Asset Management Worksheet Off f– EPA Office of Water

Parsons-GHD USEPA Asset Management Workshops 2003

This workbook is copyrighted by Parsons/GHD. It is intended for the

use of and licensed for use by utility staff and public officials. Feel

free to modify it to fit your organization, but please assure proper

citation.

http://www.epa.gov/ow/

EPA Training Materials

AMUSE - Story LineAMUSE Story Line

AMUSE needs more moneyAMUSE needs more moneyAMUSE had been successful in rate

(increase (the rate payers have been generous)g )AMUSE had been so busy “providing services” that they haven’t planned services that they haven t planned for asset replacementAMUSE needs a plan!

Staff of AMUSEStaff of AMUSE

Me maw Chair of the Board

Mama - COO Sam – Plant & Maint. SuptSupt.

Casey – Steven – Fleet & Road CECE – Head of Casey Distribution Supt. Supt. Security/Physical

Fitness

I Approached My Ratepayers With This Message

I need a 25% increase in I need a 25% increase in my rate (wages)

I need 25%/year for the next 15 yearsnext 15 years

You want what? Ha Ha

Ha!

I Approached My Bonding Agency And Said:I need more I need more money to replace my Assets

Show me your financial statement including depreciationShow me your financial statement including depreciation.Has you Agency complied with GASB 34?What is your O&M cost?What is you Debt?I’m sorry your bond rating (credit score) is too low You need an AssetI m sorry your bond rating (credit score) is too low. You need an Asset Management Plan

At the Next Staff Meeting I Announced

Employees of AMUSE…

“We Need an Asset Management Plan”

Step 1 – Create an Asset Registry (List of Assets)

I sure wish II sure wish I knew what

AssetAsset Registry means

Utility Departments of AMUSEUtility Departments of AMUSE

W tGas Distribution

Fl tWater Distribution

C bl

Fleet

Wastewater Treatment

Cable Franchise

R d

Electrical Distribution

Offices

Roads

Distribution

Fleet Office

AMUSE Assets - StatisticsAMUSE Assets Statistics

Assets TotalsAssets TotalsStaff (including beanie babies and dolls) 183

Wastewater treatment facility (oz/day) 20 992Wastewater treatment facility (oz/day) 20,992

Water Distribution System (inches) 1,800

Gas Distribution System (inches) 2 160Gas Distribution System (inches) 2,160

Cable Franchise (inches) 3,600

Electric Distribution System (breakers) 35Electric Distribution System (breakers) 35

Fleet (including hot wheels) 193

R d 288 000Roads (inches squared) 288,000

Step 1A – Work Together, Involve Stakeholders

Include all employeesemployeesInclude VendorsInclude contractorsInclude contractorsInclude ratepayers

Step 1b… encourage Staff to Work Together, and Use a Common Data Base

Level 1 Level 2 Level 3 Level 4 Level 5Name Name Name Name Name

AMUSE

Asset Hierarchy

AMUSEWater Distribution

Water meterSupply line

Electical DistributionWiring (office)Primary FeedPanel boxes

RoadsDrivewayAMUSE List DrivewayPaved Parking

BuildingsAdministration

FurnaceRoofSidingBasement wallsDeck

Vehicle Office

AMUSE List of Assets -A t Vehicle Office

Wastewater Treat.AeratorSand filterHouse lines

Cable FranchiseCable DropInside wiring

Gas DistributionGas meter

Asset Registry Gas meter

Supply lineVehicles

2000 OldsMotorTransmissionTiresBrakes

1999 Ford TarusMotor

g y

MotorTransmissionTiresBrakes

1996 Ford PickupMotorTransmissionTiresBrakes

20' Pontoon Boat20 Pontoon BoatInteriorHullMotorTrailer

Condition Assessment ToolCondition Assessment Tool

Condition AssessmentCondition Rating Maintenance Level Degree of Replacement

0 NEW N l 0%Description

0 NEW Normal 0%1 PERFECT/EXCELLENT CONDITION Normal 0%2 MINOR DEFECTS ONLY Minor 5%3 BACKLOG MAINTENANCE REQUIRED Significant 10-20%g4 REQUIRES MAJOR RENEWAL Renew 20-40%5 ASSET ALMOST UNSERVICEABLE Replace >50%

Step 2 - Determine the Condition of the Assetsof the Assets

RULESRULESBe consistentUse the same Use the same criteria for each assetFocus on the critical assets

All Major Assets Were Assessed

Step 3… Decide What is Important To Y A L l f S i (LOS)Your Agency - Level of Service (LOS)

AMUSE LOSImage is very importantOffice needs to be Office needs to be maintained between 65 –75 degreesVehicles m st ork No Vehicles must work. No more than 1 breakdown/vehicle per yearPontoon Boat must be available April - October

Image Is Important… As It Maintains Property Values & Community StandardsProperty Values & Community Standards

Determine Consequence of Failure

Consequence of FailureCoF Rating Description % Affected Level

1 Minor Component Failure 0-25% Asset2 Major Component Failure 25-50% Asset3 Major Asset 0-25% Asset4 Multiple Asset Failure 25-50% Facility / Sub-System5 Major Facility Failure 50-100% Facility6 Minor Sanitary System Failure 20-40% Total System7 Medium 40-60% Total System8 Intermediate 60-80% Total System9 Significant 80-90% Total Systemg y

10 Total 90-100% Total System

Probability of Failure (POF)Probability of Failure (POF)Probability of Failure

% f Eff ti Lif C d P F R ti% of Effective Life Consumed PoF Rating 0% 1

10% 220% 330% 440% 550% 660% 770% 880% 990% 10

Don't Forget Redundancy!Level of Redundancy Reduce PoF by:

50% Backup 50%100% Backup 90%p

200% Secondary Backup 98%

Impact on Future Maintenance CCosts

Impact on Future Maintenance CostsRating Description Impactg p p

1 Status Quo 100%2 Higher 125%g3 Considerably Higher 150%4 Significantly Higher 400%5 Reduced Slightly 75%6 Reduced Significantly 50%

Renewal StrategiesRenewal StrategiesRenewal Strategiesg

Option Description Type1 Continue with Status Quo Non-Capital2 Increase Maintenance Non-Capitalp3 Operated Differently Non-Capital4 Repair Capital5 Complete Significant Overhaul Capital6 Replace Asset with Similar Capital7 Replace with Improved Asset Capital8 Complete Cause Reduction (stop the failure) Capital9 Use Demand Management Non-Asset

10 Pay rebate to effected customers Non-Asset11 Reduce Levels of Service Non-Asset12 I t ll t C it l12 Install new asset Capital

What Are AMUSE Critical AssetsWhat Are AMUSE Critical Assets

1 Ford Pickup (it’s used for PaPa to get 1. Ford Pickup (it s used for PaPa to get to work and if the ratepayers aren’t happy they don’t pay for service)happy they don’t pay for service)

2. Pontoon boat & motor (because it is (boating season)

3 Gas line coming into the house 3. Gas line coming into the house (because it is at the end of its life its

f d b i ld i f )unsafe and being cold is no fun)

AMUSE’S Capital/Maintenance Plan

ASSET Maintenance Strategy Reason

Pickup Spend more on maintenanceHave a back up vehicle (rent

one if necessary)

Vehicle is in very good condition, a rental unit is available, maintenance can be one if necessary)“Planned”

Pontoon Boat

Have a very good PM programHeavy maintenance performed

Boat is used intermittently, heavy maintenance can be d h b t i d d k dduring fall and winter months done when boat is dry docked

Gas line Operate to failure (Buy a service contract for line

l t)

Service contract is ~ $3.00/ month and it would costs ~ $500 t lreplacement) $500 to replace

Wastewater Treatment Facility

Spend more on maintenancePurchase a service contract

Aerator has been replaced, concrete is still solid

Facility

My A.M. Plan Indicates That 2013 will be Very Expensive Year

Renewal Profile

$60,000

$70,000

$40,000

$50,000

h Fl

ow Cash Flow

Deprec

$20,000

$30,000Cas

pAARA

$0

$10,000

004

006

008

010

012

014

016

018

020

022

20 20 20 20 20 20 20 20 20 20

Year

Let’s Review the StepsLet s Review the Steps1. Involve all Stakeholders2. Create a list of assets3. Determine the condition of the assets4. Create a Level of Service (LOS)5. Determine consequences of failure and how does

it impact the LOS?6. Create a maintenance strategy to meet your LOS7. Plan your work, work your plan

Staff Is Your Most Important Asset

Remember to Reward Staff For a Job “Well Done”

Staff Says - A.M. Is Easy and CFun! You Too Can Do It.

Me maw Chair of the Board

Mama - COO Sam – Plant & Maint. SuptSupt.

Casey – Steven – Fleet & Road CECE – Head of Casey Distribution Supt. Supt. Security/Physical

Fitness

Contact InformationContact Information

Gary VaughanGary VaughanGreeley and Hansen

9203 Knoll Drive9203 Knoll DriveGalena, OH 43021

Phone (740) 965-8020Phone (740) 965 8020

gvaughan@greeley-hansen comgvaughan@greeley hansen.com