Mayors Water Council

Newsletter of the Mayors Water Council of The United States Conference of Mayors

Winter 2008

Commentary on Water and Wastewater Asset

Management Programs

We asked knowledgeable experts in the field to provide

Montgomery Watson Harza, a leading provider of asset

insights on what asset management is, what should be included

management consulting in the municipal sector was asked

in such programs and what public benefits could be achieved

to make the case for why public managers should integrate

by implementing these programs. Steve Albee, internationally

these programs into their everyday management of the

recognized asset management expert and US EPA's "go to"

physical assets.

guy on the subject was asked to provide a practical and con-

"Asset management is a systematic and formal approach to

cise definition of asset management.

managing physical assets in order to minimize costs over the

"An asset is anything of value such as a building, or an item

useful life of the assets, while maintaining service to custom-

of plant or equipment or infrastructure that provides service

ers. Implementation of asset management allows for improved

potential or future economic benefits over a period greater

decision making, better communication, more certainty of

than one year and has a cost which is not minor. Water and

long-term costs, and improved risk management and regula-

wastewater systems are classified as physical assets.

tory compliance.

Asset management is a management paradigm and a body

While a formal asset management approach is relatively

of management practices that applies to the entire portfolio of

new to U.S. municipalities, it has been used in other developed

infrastructure assets which seeks to minimize the total cost of

countries for as long as 20 years. MWH's global reach has

acquiring, operating, maintaining and renewing the organi-

allowed us to leverage the expertise developed abroad and

zation's assets while continuously delivering the service levels

share asset management best practices with our clients here in

required at an acceptable level of risk.

the United States."

The key steps in the asset management process include;

--Tony Urquhart, Vice President with MWH Business

asset identification, asset registry, condition and criticality

Solutions

assessment, definition of targeted service levels and prioritized

decision making with regard to the risk and consequence of

Veolia Water North America, a full-service water company

asset failure."

with demonstrated experience in providing cities with asset

management help, was asked to comment on what cities can

--Steve Albee, U.S. Environmental Protection Agency

hope to achieve by using Asset Management techniques on

Malcolm Pirnie, a prominent engineering and consulting

their water and sewer infrastructure.

company with demonstrated experience in helping communi-

"Level of Service (LOS) is a concept embedded within a

ties integrate asset management programs was asked to briefly

comprehensive asset management system that can provide all

describe the benefits of asset management for public water

stakeholders with a way to define the expected type, quantity

and sewer managers and customers.

or quality of service and related infrastructure requirements. I

"The objective of asset management is to meet service level

have found the alignment of all policy, stakeholders, and staff

and reliability requirements cost effectively in order to serve

on the expected LOS is essential if an Asset Management Pro-

the public need. By understanding the capacity, condition, and

gram is to be successful.

criticality of its assets, a utility can ensure that maintenance

Asset Management is especially needed in communities

and capital investments are directed toward areas that impact

historically underfunding infrastructure. Where money is tight,

customers the most. Over the long-term, comprehensive asset

repairs that bring the greatest reward (Level of Service) and

management results in increased useful life, decreased main-

fiscal return (ROI) can only be determined by a comprehensive

tenance costs, and optimized capital investment. On the soft-

understanding of infrastructure criticality and current condition

er side, a comprehensive asset management program fosters

assessment which comes from asset management planning."

greater understanding of the long-term implications of invest-

--Chibby Alloway, Executive Vice President, Chief

ment decisions and strengthens financial decision-making --

Technology Officer, Veolia Water North America

creating improved trust, understanding, and transparency with

the public, elected officials, and stakeholders and strengthen-

ing the case for required investments and resources."

--David Sklar, Asset Management Practice Leader

with Malcolm Pirnie (Denver, CO)