Revised On: Aug. 26, 2024 - 3:30 p.m.

Asset management is the practice of managing all infrastructure assets to understand the total cost of owning, operating, upgrading and replacing them. In other words, understanding the cost of providing water service. An asset management plan allows public water systems to make sound investment decisions for the operation and maintenance of assets, including adequate rate setting and the prioritization of capital projects.

Asset management includes:

• Inventory of all assets
• Identifying critical assets
• Assessing condition and performance of assets
• Developing a plan to maintain, repair and/or replace assets
• Funding the maintenance, repair and/or replacement of assets

With a proper plan for asset management, a public water system can improve service and reliability, reduce risk and unexpected costs, and enhance communication with customers and stakeholders.

An asset management plan should include:

Determining Current State of Assets

• Locate/identify the assets
• Evaluate asset condition
• Determine the remaining life and value of the assets
• Determine the energy use of the assets

Identifying Critical Assets

• Identify assets critical to the operation of the utility
• Assess each asset's vulnerability
• Determine the consequence of failure

Defining Desired Level of Service

• Meet all drinking water standards
• Ensure adequate capacity
• Establish clear performance criteria (acceptable level of water loss, acceptable number of water line breaks, good pressure in the distribution system, good customer service, etc.)

Establishing Minimum Life Cycle Cost

• Determine the expected useful life of assets using the manufacturer's recommendations
• Calculate an adjusted useful life that takes into account the current condition of assets and their service history

Developing Long-Term Funding Plan

• Estimate expenditure to repair/upgrade system to meet standards and ensure long-term operation
• Ensure sufficient capital/reserve/set aside to fund needed infrastructure improvements
• Set adequate rates