www.ca-nv-awwa.org 29
ments for each asset is essential
for long-term asset manage-ment.
A customized analysis
was fundamental to increasing
confidence in asset manage-
ment projections.
Determining the useful
life of each asset provides a
basis for calculating its timing
of failure. Estimated lifespans
for each asset were based on
industry best practices as de-fined
by the Water Environment Research
Foundation, American Water Works Asso-ciation
and USEPA, experience from local
and similar projects, and onsite condition
assessment. Condition assessment pro-vided
insight into the nature and timing
of possible asset failures, which was im-pacted
by factors such as operating envi-ronment,
operational history, maintenance
procedures, construction quality, material
quality, and external stresses. Confidence
in estimated failure timing was increased
by customizing some of the expected use-ful
lives of asset classes based on their
historical performance (Figure 1). For
example, the useful life of large motors
was increased from 20 years to 35 years
based on the performance of existing large
motors onsite.
Translating Data into Dollars
The next step was determining the
financial requirements associated with re-habilitation
and replacement needs. The
process began with assessing the current re-placement
cost of each asset. A cost library
was developed to improve asset valuation
efficiency and allow review and update of
cost assumptions in the future as more re-cent
cost information becomes available.
A unit cost approach was used for assets
such as chemical storage tanks, structures,
and access covers. While a cost matrix ap-proach
was used for assets in which cost is
correlated with both the type and size of the
asset, such as valves, pumps, flow meters,
and air-conditioning units. The replace-ment
costs were based on the cost informa-tion
from previous projects supplemented
by RS-Means data, the district’s historical
cost information, institutional knowledge
and quotes from manufacturers. The total
replacement cost for WWTP assets was esti-mated
at approximately $96 million.
Fully understanding lifecycle cost re-quires
estimates of both the replacement
and rehabilitation costs for each asset. To
accomplish this, a management strategy
was developed for each individual asset
that identified the rehabilitation needs with
their timing and associated costs. Using the
timing of failure, replacement costs, and
lifecycle cost logic made it possible to iden-tify
the year in which each asset is likely to
require investment and funding required
for repair, rehabilitation or replacement.
The asset management approach esti-mated
that on average, the GSD will need to
invest approximately $2.0 million per year
in the WWTP for the next 50 years to main-tain
the current level of service. The annual
average investment needs for the next five,
10, and 20 years are lower, $1.2 million,
$1.3 million, and $1.8 million respectively,
illustrating the increase in annual average
investment requirements as the planning
horizon widens. This is mainly due to re-placement
of major process structures that
have longer useful lives and are not due for
replacement until 2060 and beyond.
Determining Where to
Spend the Money
The next step is to decide where and
when the district should utilize available
funds. To accomplish this, a risk assess-ment
methodology was developed to
calculate the business risk exposure score
of each asset. Business risk exposure has
two components: probability of failure
and consequence of failure. Probability of
failure is a function of asset condition and
helps measure how likely it is for an asset
to fail. The consequence of failure quanti-fies
the impact of asset failure on the main
functionalities of the WWTP.
A two-tier approach, process level
and asset level, was utilized. The process
level consequence followed a triple-bottom-
line methodology evaluating the
impact of major process failures from
environmental, social, and economic per-spectives.
The asset level consequence
focused on the impact of asset failures on
the main functionalities of each
process. For example, a score
of 3.6 out of 4.0 was assigned
to the influent pump station
given the relatively high impact
of failure on the transition of
sewerage from collection system
to WWTP. Assets within the
influent pump station were
scored exclusively on how they
support the main functionality
of the pump station. Thus, the
vertical turbine pumps and Motor Control
Center received the highest scores and the
influent gate valves received lower scores.
The multiplication of process level and
asset level scores resulted in the overall
consequence of failure score for each asset.
The results of risk assessment were
visualized in various formats including
risk matrices categorizing assets based on
their level of risk by count and replace-ment
values. The results were also trans-ferred
to GIS for a better visualization of
high-risk asset locations. The results indi-cated
that 15 assets are considered high
risk and have a total replacement cost
of about $1 million or about one percent
of the total valuation of the WWTP. The
risk assessment results helped the district
prioritize annual investments and focus
first on rehabilitation or replacement of
high-risk assets.
Continuous Improvement
Asset management is a process of con-tinuous
improvement. As GSD implements
its asset management plan, it will gain a
better understanding of its assets including
their useful lives, failure modes and criti-cality,
which will increase the confidence
level of the next iteration of the asset man-agement
plan. The GSD general manager
wanted a better tool for the staff to commu-nicate
financial needs internally and with
the Board of Directors. Data visualization
via the customized dashboards in the GSD’s
asset management program is a powerful
way to simplify the complexity of data and
present it in a form that is easy to access,
compare data and track performance.
In this age of decreasing budgets, as-set
management processes and tools en-able
utilities to make sound, defendable
data-backed decisions, evaluate the risks
associated with their decisions and find
the right balance between funding imme-diate
needs and maintaining reserves for
long-term capital expenditures. S