Although it’s difficult to see into the future with certainty, planning activities that address near-term needs while keeping an eye on potential long-term needs can lay the groundwork for a well planned capital improvements plan (CIP). When it comes to rate-setting, […]
Posts by Miranda.Kleven@ae2s.com
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Asset Management for Sustainable Utility Operations
A cross-section of AE2S staff recently facilitated an Asset Management workshop geared toward regional water system operations. The forum provided a great venue for system managers, operators, and board members to interact and share information. It was also a good reminder that asset management is essentially taking a deliberately planned and consistent approach to doing things you already do: maintain assets, prioritize asset replacement, seek funding for asset replacement, and revise rates to ensure adequate revenue to operate and maintain the system.
The concept of Asset Management has been around for most of modern history. But after years of deferred maintenance and postponement of rate adjustments, the infrastructure crisis in the United States has forced the formalization of Asset Management into a practical tool to manage infrastructure. The U.S. Environmental Protection Agency (USEPA) defines it:
“Asset Management is maintaining desired level of service for what you want your assets to provide at the lowest life cycle cost. Lowest life cycle cost refers to the best appropriate cost for rehabilitating, repairing or replacing an asset…”
-EPA Asset Management: A Best Practice Guide
Today’s implementation of Asset Management generally centers on five core topics, shown in the graphic below:
Understanding the age and condition of the system is what most of us think of first when we hear the words “asset management.” This is generally the first step in developing an approach to asset management. If the system is new, you may make significant expenditures annually in terms of debt service principal payments. As debt on system components is retired, the system should continue to “invest” either through renewal/replacement or by contributing to a reserve fund for future replacements. A general rule of thumb is annual investment either through debt service, reserve contributions, or rate-funded capital should be at least equal to total annual depreciation on the system.
To address aging infrastructure and operational efficiency challenges, best practices and tools have been developed by the U.S. Environmental Protection Agency (USEPA) and industry stakeholders. Comprehensive resources for asset management can be accessed by clicking here.
A formalized approach to Asset Management has many benefits. Taking a planned and prioritized approach to maintaining and replacing a system’s assets will ultimately lead to long-term financial stability. If you have questions or would like more information on Asset Management, contact Jared Heller at Jared.Heller@ae2s.com or Shawn Gaddie at Shawn.Gaddie@ae2s.com.
Participants in the annual Rate Survey produced by AE2S have an extra month to submit their responses. The deadline has been extended to April 15, 2016. Each year, AE2S conducts a survey of water, wastewater, stormwater, and solid waste utility […]
Each year, AE2S Nexus conducts a survey of water, wastewater, and stormwater charges for communities in Minnesota, Montana, North Dakota, South Dakota, and Wyoming. The annual survey will celebrate its 15th anniversary this year. As AE2S grows into regions outside […]
Water and wastewater utilities, and their advocates are celebrating a huge step forward for the Water Infrastructure Finance and Innovation Act (WIFIA) after President Barack Obama signed legislation that lifts a ban on the use of tax-exempt bonds with WIFIA […]
Each year, AE2S Nexus conducts a survey of water, wastewater, stormwater, and solid waste utility rates throughout the region consisting of Minnesota, Montana, North Dakota, South Dakota, Wisconsin, and Wyoming. AE2S Nexus is happy to announce that Utah will be […]
Every utility is unique. Raw water characteristics, treatment processes, size and capacity of utility systems, topography, and utility age are just a few of the factors that will greatly impact monthly utility charges. Therefore, strictly comparing average monthly utility charges […]
Data for the 2015 North Central Utility Rate Survey was solicited from utilities in Minnesota, Montana, North Dakota, South Dakota, Wisconsin, and Wyoming. Solid waste (curbside garbage collection and related services) is an important component of City Services. This year 27 […]
AE2S Nexus plans to distribute the 2015 version of its annual North Central Utility Rate Survey within the next few weeks. We would like to thank the 251 participants this year. AE2S Nexus received responses from 106 systems serving populations […]
Here is a sneak peak at the Total Utility Bill (water, wastewater, and stormwater) graphics in the 2015 AE2S Nexus North Central Utility Rate Survey. The values reported in the following tables illustrate the monthly residential charge for a bill […]
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