Asset Management: What It Means For Water Distribution

1. Asset Management: What It Means For Water Distribution Operability & Criticality December 09, 2008 Paul Schumi Wachs Utility Services

2. Asset ManagementStart by answering five key questions

3. Five Key Questions What is the current state of my assets? What do I own? Where is it? What condition is it in? What is its remaining useful life? What is its remaining economic value? What is my required level of service (LOS)? What is the demand for my services by my stakeholders? What do regulators require? What is my actual performance? Which assets are critical to sustained performance? How does it fail? How can it fail? What is the likelihood of failure? What does it cost to repair/refurbish/replace? What are the consequences of failure? What are my best O&M and CIP investment strategies? What alternative management options exist? Which are most cost effective for my organization? What is my best long-term funding strategy?

4. Asset Management Inventory Assets Assess Condition Determine Residual Life Determine RRR $ & Timing SetTarget LOS Assign BRE Rating (Criticality) Determine Appropriate Maintenance Determine Appropriate CIP Fund Your Strategy BuildtheAMP

5. Asset Management What is the required level of service What is the current state of my assets? Inventory Assets Assess Condition Determine Residual Life Determine RRR $ & Timing SetTarget LOS Assign BRE Rating (Criticality) Determine Appropriate Maintenance Determine Appropriate CIP Fund Your Strategy BuildtheAMP Which assets are critical to sustain performance What are the best O&M and CIP strategies What is the best funding strategy

6. Asset Management What is the required level of service What is the current state of my assets? Inventory Assets Assess Condition Determine Residual Life Determine RRR $ & Timing SetTarget LOS Inventory Assets Assess Condition Assign BRE Rating (Criticality) Determine Appropriate Maintenance Determine Appropriate CIP Fund Your Strategy Assign BRE Rating (Criticality) BuildtheAMP Which assets are critical to sustain performance What are the best O&M and CIP strategies What is the best funding strategy

7. Status Quo What is the Status Quo? • Operability • System Information Gaps • Asset Inventory • Asset Locations • Accuracy of Asset Info • Continued Status Quo?

8. Operability: Status-Quo • 40% of all water valves are inoperable • 10% of all hydrants are inoperable; including inadequate flow • 10% of all valves are paved over • 9% of all distribution valves are found in the wrong position: shut & open • Transmission valves found shut Nationwide

9. Operability: Status-Quo Henrico County Oklahoma City Baltimore Columbus Wilmington Charlotte

10. Information: Status-Quo • City of Baltimore, MD • Valve and Hydrant Assessment and Rehabilitation Program • How Many Assets (valves)? • 160,000 vs. 68,000 • Asset Inventory Executed - Reveals the True Quantity Asset Inventory

11. Information: Status-Quo • City of Melbourne, FL (2 Programs) • Unidirectional Flushing Program • Valve & Hydrant Assessment Program • Where Are Your Assets? • 23% of valves cannot be located Asset Locations

12. Information: Status-Quo • City of Houston, TX • Large & Critical Valve Program • How Accurate Is Your Mapping and Hydraulic Model? • Model indicates a 16” main, we determined it was a 10” main Information Accuracy

13. Information: Status-Quo • City of Dallas, TX • RE-Inventory EVERY Valve & Hydrant • Determined that 70% of their Asset information was inaccurate • Surveyor GPS’ing Water Lids • No Idea what was Underground • No information on Operability More Accuracy

14. Status-Quo • Is not SUSTAINABLE • INCREASES the already high RISKS and COSTS in our industry • Keeps a utility in reactive mode, chasing emergencies, trying to keep up Continued Status Quo

15. Risks and Costs What are the RISKS and COSTS of maintaining the status quo?

16. Risks Low Operability = Loss of System Control

17. Initially Inoperable – 61%

18. Currently Inoperable – 16%

19. Asset Criticality: ValvesThe Coming Wave

20. Definitions Function STOP water flow when needed and ALLOW water flow when not Criticality IMPORTANCE that a valve perform its function Valve Criticality IMPORTANCE that a valve STOP water flow when needed and ALLOW water flow when not

21. Industry Industry view of valve criticality – “the wave” STOP water flow when needed and ALLOW water flow when not

22. Industry Valve Criticality Wave Investment Post War Installation Wave Renew/Replace Wave $ Population Growth Installation Wave Continuing Installation 1900 1925 1950 1975 2000 2025

23. Industry Valve criticality “Today” much more than “Yesterday” We NEED valves to execute the renewal/replacement wave (unlike previous waves) Valves are “Control Points”

24. The Moving Parts Inspect Exercise Repair Document Valves Water Audit Leak Survey Leak Pinpoint Document Inspect Flush Flow test Paint Repair Document Leak Detection Hydrants System Rehabilitation Test Repair Replace Document GIS Meters Map Evaluate Create Analyze

25. Solutions Moving parts control the system Control the moving parts and you control the system

26. Customer Customer view of valve criticality – customer consequence of a valve not performing its function STOP water flow when needed and ALLOW water flow when not – both functions

27. Customer Impacts • Number of customers • Type of customers • Loss of life • Physical damage • Restoration $ • Transportation disruption • Business disruption • Restitution $ • Contractor delay costs • Customer goodwill • Political disruption Weighting Numbers Dollars “Factors”

28. Customer Impacts Valve Criticality = Disruption times Probability You set the risk tolerance level

29. Critical Valves • Ask… • Critical “places” • Critical “transportation” • Critical “sources” • Critical “transmission” • If, then: sideline valves • Single line feed valves • Pressure boundary valves • Pressure reducing valves • Rehabilitation area valves • SVMM, VCM, Optimatix… data driven 80 – 20 Rule

30. Focus The Distribution System is gaining focus across the industry.

31. Asset Management • City of Chicago, IL • 100 year – 1% Replacement Program per year • Asset Lifespan Gaps not Equal • Preventative Maintenance CAN extend the life of the asset Many Approaches

32. Asset Management • City of Chicago, IL • Asset Lifespan Gaps

33. Asset Management • City of Kansas City, MO • Criticality Based Lifecycle Approach • Creates a Roadmap for Asset Management going Forward • Addresses “Critical” assets with greater frequency Many Approaches 2

34. Asset Management • City of Charlotte, NC • Building GIS From The Ground Up • Asset Information “captured” can provide information from the field back into planning (including Asset Management / CIP) Many Approaches 3

35. CIP Planning (12) 20” transmission valves found shut – twin 54” mains deemed unnecessary Pump station at capacity – Closed 7 pressure boundary valves found in the wrong position – MGD cut in half Rehabilitation of a large externally geared pump station valve – plan to replace required draining an entire reservoir Dollars Spent Wisely

36. Currently Inoperable – 16% 5 of 6 valves inoperable

37. Solutions Getting started

38. WheretoStart: Strategies • Total system assessment • program approach • Large valves • core of the system • Representative survey • state of the system • Specific areas • section of the system

39. Where to Start • Pilot program • System program *Start with System Control Points (Valves) and Information

40. Paul SchumiDirector of Sales & Marketing pschumi@wachsus.comcell: (630) 485-9870