Answering the query on “Starting Asset Management Despite Lack of Financial or Human Resources”, Heather explained that a simple inventory and one’s knowledge of the water utility system are enough to initiate asset management.
Ross agrees with Heather that building a great basic inventory is a really great place to start.
Simply, even if I’ve got a hundred miles of cast iron pipes that’s 6-inch and it’s as simple as that, and it was put in around 1900 or something like that and it’s an older town, maybe it’s 1950 or whenever the date was. It doesn’t need to be any more technical than that.
Because once you’ve got that really basic inventory, you can then, in less than a day, you can go and say:
- Well, what if I have to replace that inventory
- What am I paying at the moment to do a bit of replacement?
And so you can get some rates there at so many dollars per mile. And then that tells you pretty much what your system is worth.
The next step you can look at from there, so how much we’re spending maintaining the system?
We know its worth, let say, we know it’s worth 10 million dollars. Now if you’re spending 5 million dollars a year, as a ridiculous example, maintaining a few million dollar system, something’s not right because your maintenance should be one or two percent depending on the age of your system; per annum it might not even be half of the percentage value.
So you can start doing some very simple math that allows you to then start pin pointing where your problem areas are likely to be. And just been able to look at the inventory and say, oh we got some very old pumps here that are quite near at the end of their life.
You start thinking about what we going to have to do with them when they end their life or you got an area of reticulation that we’re getting a lot of breaks and then it’s costing us far too much.
And that starts the conversation internally about what the next steps are? But it doesn’t have to be based on the huge amount of sophisticated analysis.
That’s really a simple spreadsheet or asset inventory will get you over the line with that.
Heather mentioned that there is a very simple tool that the University of North Carolina Environmental Finance Center setup.
That’s a nice rate setting tool. And you can go online to the efcnetwork.org website under “Resources and Tools” and you can download that for free. And that’s a tool that you can use as a simple way to get some rate setting started.
So that’s something else to think about if you want to get more into the financial side and looking at what your rate should be. That’s a nice simple tool you can use to kind of get you started looking at what should be in your rate and what your rate should be.
Because certainly you’re not going to have the finances if you don’t have any idea of what rate to charge and haven’t been able to get the money you need through rates.
So keep that in mind as well that there is that free tool available to you that can help you get started on that end.
PHOTO CREDIT: US Pacific Fleet via Flickr Creative Commons License