f/EPA
United States
Environmental Protection
Agency
FACT SHEET
Asset Management for Sewer
Collection Systems
For wastewater management utilities, asset management can be defined as managing
infrastructure capital assets to minimize the total cost of owning and operating them, while
delivering the service levels customers desire. It is successfully practiced in urban centers
and large regional sewer collection systems to improve operational, environmental, and
financial performance. Many of these large organizations base asset management planning on
sophisticated information systems and extensive personnel resources.
But a simpler form of asset management can be used by smaller collection system owners,
starting with existing systems, staff and resources. Continuous improvement planning can
then be used to provide program depth and coverage as implementation progresses.
Developed to foster more efficient financial and physical resource investments and to prolong
the life of infrastructure system components, asset management offers the potential to more
than pay for itself over the long term. It can also serve as a logical, cost-effective framework
for making organizational changes to meet new environmental regulations and financial
reporting requirements.
Why Invest in Asset Management?
Many wastewater treatment utilities serving communities with individual or combined annual
revenues of $100 million or less are located in areas that have grown dramatically over the
past 30 years. Most have invested heavily in collection system expansions (to serve growing
populations) and wastewater treatment plant upgrades (to handle the additional volumes and
to meet tighter environmental requirements). Even with local rate and tax increases, a relatively
small component of the wastewater utility budget goes toward improving the condition of the
collection system. Lacking adequate focus on operations and maintenance, many collection
system utilities have slipped into a reactive mode, with most of the operational resources
allocated to emergency response and rehabilitation or replacement
of failed components. Meanwhile, sewers that have not yet
manifested failures are aging, undiscovered defects are
worsening, and the problems of the next year and decade
are developing.
Run-to-Failure
Management Model
Sewer system assets that are
not regularly maintained usually
deteriorate faster than expected
and lead to higher replacement and
emergency response costs.
Excellent
Peak Condition
Asset Decay
Rehab/Replacement Cost
Failing
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What is the national scope of the problem?
No one knows exactly, since there is no nationwide inventory of sewer pipe. One estimate is
derived from data reported in Optimization of Collection System Maintenance Frequencies and
System Performance, a 1999 study of sewer system maintenance practices prepared by the
American Society of Civil Engineers (ASCE) under an EPA Cooperative Agreement (ASCE,
1999). In this study, ASCE surveyed wastewater utilities representing a good cross section of
system sizes, populations served, and geographic regions. Of 42 utilities surveyed, an average
of 21 feet of sewer was provided per person, which would equate to almost 1.2 million miles
of sewer (owned by public and private entities) when extrapolated to the entire U.S. population
served by sewers. Among these same agencies, an average of 57.5% of the system assets
were reported to be between 21 and 100 years old, with 41.1% reported as between 21 and 50
years old and 16.8% greater than 51 years old. These data suggest that by 2020, up to half of
the assets in these systems may be beyond the midpoint of their useful lives (which is generally
assumed to be about 100 years). If these statistics hold true for the majority of utilities across
the country, they represent an unprecedented need for capital replacement funding just beyond
the fiscal horizon.
Each collection system utility is responsible for making sure that its system stays in good
working order—regardless of the age of components or the availability of additional funds.
Asset management programs with long-range planning, life-cycle costing, proactive operations
and maintenance, and capital replacement plans based on cost-benefit analyses can be the
most efficient method of meeting this challenge. Use of asset management will help protect
sewers and extend financial resources by:
• Making sure components are protected from premature failure through proper operations
and maintenance.
• Facilitating proactive capital improvement planning and implementation over longer cycles
to reduce annual and overall costs.
• Reducing the need for expansions and additions through demand management
(I/I reduction, flow balancing, etc.)
Reducing the cost of new or planned investments through
economic evaluation of options using life-cycle costing and
value engineering.
Focusing attention on results by clearly defining
responsibility, accountability, and reporting requirements
within the organization.
Asset Management
Model
Excellent
What is asset management?
Asset management is a continuous process that guides the
acquisition, use, and disposal of infrastructure assets to optimize
service delivery and minimize costs
over the asset's entire life. Among
public utility agencies in the U.S.,
infrastructure asset management
is used most extensively in the
transportation sector to protect and
maximize investments in highway, rail,
and airport infrastructure assets.
Peak Condition
Asset Decay Rate
O&M Cost
Rehab/Replacement Cost Failing
Components are regularly
maintained over long planning
cycles, and finally replaced when
deterioration outweighs the benefit of
further maintenance. Costs are well-
distributed over the life of the asset.
20-Year Planning Cycles
SSO Fact Sheet—Asset Management for Sewer Collection Systems
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An infrastructure asset is any long-lived capital asset that is operated as a system or network,
such as a sewer collection system. The sewers, manholes, and pump stations are the primary
asset components of the collection system. Buildings that are integral to the function of the
network, such as pump station houses, are also considered part of the infrastructure asset.
The key elements of asset management are:
• Level of service definition
• Selection of performance goals
• Information system
• Asset identification and valuation
• Failure impact evaluation and risk management
• Condition assessment
• Rehabilitation and replacement planning
• Capacity assessment and assurance
• Maintenance analysis and planning
• Financial management
• Continuous improvement
These elements should be implemented by everyone in the organization, involving
management, financial, engineering, administrative and field staff.
This sounds familiar. Isn't it the same as CMOM?
When utilities operate in a reactive mode, most of their resources go to emergency response
and replacement or rehabilitation only after performance problems have surfaced. In recognition
of the current and future problems associated with this approach, many people in technical
leadership of the wastewater industry support the adoption of dynamic management,
operation, and maintenance approaches for sanitary sewer collection systems. These dynamic
approaches use information about system performance, changing conditions, and operation
and maintenance practices to guide and modify responses, routine activities, procedures, and
capital investments to try to prevent problems from occurring.
EPA, in conjunction with municipal and other industry representatives, has developed a
framework for a dynamic management approach to collection systems called the capacity,
management, operation, and maintenance (CMOM) approach. The CMOM approach is an
information-based approach to setting priorities for activities and investments. CMOM embodies
many asset management principles as they apply to collection systems such as defining goals,
using an information-based approach to set priorities, evaluating capacity and taking steps to
ensure it is adequate, developing a dynamic, strategic approach to preventive maintenance,
and conducting periodic program audits to identify program deficiencies and ways to address
those deficiencies.
Integrating asset management planning with a CMOM program can improve the effectiveness
of the CMOM effort. An emphasis on asset management can better ensure that the key
components of a strategic business plan, such as level of service definition, rate setting,
budgeting, financing, and value-engineering are taken into consideration.
Sewer collection system utilities should begin implementing CMOM as soon as possible,
especially if they are experiencing SSOs or contributing to peak flow violations at wastewater
treatment plants. Following is a general discussion of ways to implement CMOM in an asset
management framework.
SSO Fact Sheet—Asset Management for Sewer Collection Systems
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What about GASB 34?
Carrot and Stick Approach to Encouraging Fiscal Responsibility
Government Accounting Standards Board Statement 34 (GASB 34) includes both requirements
for reporting of public infrastructure assets in a government's financial statement and options
for reporting additional information by governments that use asset management systems. The
new rules are designed to establish a basic financial reporting model that will result in greater
accountability by state and local governments by providing more useful information to a wider
range of users than did the previous model. Communities that opt not to comply with the GASB
34 financial reporting requirements will not present financial statements in accordance with
generally accepted accounting principles (GAAP).
The Stick: Full Accrual Accounting and Management Discussion and Analysis
GASB 34 requires full accrual accounting principles to be used in government-wide financial
statements, reporting to readers of financial statements such as ratepayers and creditors, the
historical cost of all the capital assets used in delivering services and the full cost of providing
services to the public.
The modified accrual basis of accounting used by many collection systems in the past did not
provide complete information about the system. This type of financial statement would show
whether a given year's revenues were adequate to cover the cost of sewer system operations
and debt service requirements for that same year. It would not show the capital assets used
to provide service and whether the net assets of the system were increasing, decreasing, or
remaining the same.
With full accrual accounting, collection system utilities must report the historical cost of
the sewer system and its components. Revenues include all earnings of the system, even
those that will be collected in cash in future years. Expenses of the system include annual
depreciation (or preservation costs, if the modified approach is used), as well as all expenses
incurred during the year, regardless of whether they were paid during the year or shortly after
year end, or won't be paid until some time in the future.
Financial statements presented in the annual report must be accompanied by a management
discussion and analysis (MD&A) that provides an analysis of the system's overall financial
position and results of operations, to assist users in assessing whether the position has
improved or deteriorated as a result of operations. The MD&A also provides information on
known facts, decisions, or conditions that may have a significant effect on future financial
results. It may also include information about the current condition of the system, how that
condition compares with the condition level established by the government, and differences
between the amount estimated to be needed to preserve and maintain the system, and the
amount actually incurred.
GASB 34 offers a Government Total Annual Date of GASB 34 End of Grace Period for
phased schedule for Revenues in the Fiscal Year Transition1 Retroactive Capitalization of
implementing the new Ended After June 15,1999 Infrastructure Assets2
reporting requirements.
Communities with $100 Over $100 million June 15,2001 June 15,2005
million or more in annual $10 million— $100 million June 15, 2002 June 15, 2006
revenues (government- Less than $10 million June 15, 2003 Not required, but recommended
wide, not just collection
system revenues, for 1GASB 34 compliant financial statements should be issued for the first fiscal year beginning after this date.
the year ending after 2Grace period is not available for infrastructure assets reported in enterprise fund.
June 15, 1999) were
required to begin GASB
34 reporting in financial statements for fiscal years beginning after June 15, 2001. Communities
with total annual revenue between $10 million and $100 million are required to meet the new
standards in financial reporting periods beginning after June 15, 2002.
SSO Fact Sheet—Asset Management for Sewer Collection Systems
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Governments with less than $10 million in annual revenue should begin in financial reporting
periods beginning after June 15, 2003.
Once a community has made the transition to GASB 34 reporting, any collection system
components that are acquired, rehabilitated, or significantly improved should be recorded as
new assets on the financial statement for the same fiscal year. Capital reporting of existing
assets is also encouraged at the date of transition, but a four-year grace period is provided.
Governments with less than $10 million annual revenues are not required to capitalize assets
acquired before the date of transition.
Governments with less than $10 million total annual revenues are not required to retroactively
capitalize system assets acquired before the date of transition. When system assets are
retroactively reported, only those components that were acquired or received major renovations,
restorations, or improvements in fiscal years ending after June 30, 1980, are required to be
reported. It is encouraged, but not required, to report components acquired prior to that period.
Although the new infrastructure capitalization requirements will not take effect until 2005 or
2006, implementing asset management practices now would facilitate making the necessary
data available when the reporting requirements take effect.
The Carrot: Modified Approach Accounting Can be Used to Avoid Depreciation
GASB 34 offers collection system owners the option of reporting the system at full historical
cost, rather than reporting depreciation, as long as certain requirements are met. These
requirements include maintaining the system at or above a condition level specified by the
government, and managing the system using an asset management system that meets
certain requirements. Under this option, known as the "modified approach," maintenance
and preservation costs are expensed and only additions and improvements to the system
are capitalized. The option is appropriate for utilities that use
asset management activities to preserve the service life of the
system overtime. In contrast, depreciation accounting, a method
of systematically writing off a portion of the historical cost over
an estimated useful life, is more appropriate for assets that are
used up over a finite life. To use the modified approach, the asset
management system must inventory the system assets, perform
condition assessments, and estimate the annual amount needed
to maintain and preserve the system assets at the established
condition level. The condition assessment must be performed at
least every three years. As required supplementary information,
the government must present a schedule of the assessed condition
Depreciation Doesn't
Measure Condition
The value of a sewer system is its
ability to provide service for the
longest time possible for the least
cost. Modified approach accounting
offers a way to document in annual
financial reports that the system can , , , ... ,
. . . for the three most recent condition assessments, the estimated
continue to provide service. I amounts needed to maintain and preserve the system, and the
amounts actually expensed for the last five years.
It may be more difficult for governments to meet the requirements to use the modified approach
than it is to apply depreciation accounting, but most of these same activities are needed to
meet similar CMOM requirements. The incremental effort may be modest, and the benefits of
success are substantial. Sewer collection utilities that use modified approach accounting will be
demonstrating to customers, lending institutions, and regulators a commitment to maintaining
the assets for which they are responsible. This commitment may symbolize a government's
dedication to delivery of excellent service, proper use of public funds, and compliance with
environmental and health laws. In addition, the collection system will enjoy the benefit of asset
management, including lower capital replacement costs, smoother system operations, less
resistance to needed rate increases, and more advantageous commercial lending terms.
SSO Fact Sheet—Asset Management for Sewer Collection Systems
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Where Do Environmental Management Systems Fit In?
Asset management and environmental management systems (EMSs) have valuable attributes
and can complement each other, but they are not the same. The asset management approach
helps utility owners optimize maintenance and replacement cycles to cost-effectively ensure
that the sewer collection system runs smoothly and to accurately predict capital funding needs
over a long planning horizon. It assumes that the utility owner has identified its environmental
compliance goals and has incorporated them into the planning process. By contrast, EMSs are
designed to help a facility identify and manage a full range of environmental, public health, and
safety issues—both regulated and unregulated (i.e., surface water, groundwater, air quality,
noise, etc.) EMSs are designed to help integrate these issues into an overall system that can
help continually improve environmental performance and provide other important business
benefits like reduced costs through energy and water conservation, reduced chemical usage,
reduced risk of noncompliance, etc.
Like asset management, EMS was developed by the private sector to improve business
planning, and it has a similar philosophy: the most cost-effective way to meet environmental
goals is to specifically identify them, plan for them, and set performance benchmarks to ensure
they are being met. A growing number of public sector organizations, including wastewater
utilities in the United States and around the world, are adopting EMSs. Many are using
independent third party certification, which involves an audit by a qualified, independent
third party to ensure that the EMS conforms to the elements of ISO 14001 (or another
established EMS standard), and that the organization is making progress toward meeting
its own performance objectives and targets. An EMS audit does not specifically look at an
organization's compliance, but does help determine if the organization has procedures in
place to identify legal requirements, address noncompliance should it occur, and take steps
to minimize the risk of a recurrence. Several wastewater utilities in the United States have
achieved ISO 14001 certification and reported significant benefits from their efforts.
The CMOM approach can be seen as a type of EMS that focuses on sewer collection system
utilities. It establishes an environmental goal (employing collection system management
practices to minimize SSOs or peak flow violations at a treatment plant), provides specific
operations and management guidelines to achieve the goal, and requires establishment of
performance measures to make sure the goal is met. It is a logical starting point for a sewer
collection system utility just embarking on comprehensive business planning. CMOM does
not replace the need for true EMS planning and implementation, because it only addresses
environmental concerns related to surface water quality protection.
CMOM is one of many environmental management approaches available to sewer collection
system utilities, and more are being developed all the time. EPA and two industry trade groups
are working on a project to examine the feasibility of creating a comprehensive structure
for water and wastewater utilities that brings together the strengths of tools such as asset
management, CMOM, QualServe, and performance benchmarking, to create a sustainable
and effective utility-wide management system. EPA, the Association of Metropolitan Sewerage
Agencies (AMSA) and the Water Environment Federation (WEF) hope to present preliminary
recommendations for this comprehensive approach in summer, 2002.
Does asset management have to be complex?
An asset management program does not have to be complex to be effective. A basic program
can be developed around existing systems, with new systems being added as the program
progresses. For utilities with relatively small collection systems and pay-as-you-go financing,
complex asset management systems may not be needed to meet organizational objectives.
Other communities may benefit greatly from using the asset management approach to address
serious current or impending infrastructure problems. More advanced asset management
systems are justified for collection systems that have:
SSO Fact Sheet—Asset Management for Sewer Collection Systems
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• High value, such that asset management decisions will have a large financial impact
• Components nearing or beyond the end of their service lives, components in poor
condition, and/or a history of SSOs and peak flows that contribute to permit violations at a
wastewater treatment plant
• System complexity in terms of the size, design, or location of components
Regardless of the level of sophistication of the asset management system, two primary
performance goals chosen by the organization should be the fullest possible implementation
of the CMOM approach and compliance with the financial statement reporting requirements
of GASB 34. A third recommended goal is use of the modified approach for reporting sewer
collection systems in financial statements.
Components of an Asset Management System for a Sewer
Collection Network
Below is a general discussion of the components of an asset management system designed to
meet the objectives of the CMOM approach, comply with GASB 34 reporting requirements, and
take advantage of the modified approach option for infrastructure assets.
Level of service definition.
A basic level of service definition for most collection systems will be to deliver reliable sewer
collection services at a minimum cost, consistent with applicable environmental and health
regulations. Level of service criteria will be system-specific, but should address CMOM and
GASB 34 requirements, particularly in areas where improvements are most needed and will
yield the greatest benefits. Examples include:
• Ensuring adequate system capacity for all service areas
• Eliminating system bottlenecks due to pipe blockages
• Reducing peak flow volumes through inflow/infiltration (I/I) controls
• Providing rapid and effective emergency response service
• Minimizing cost and maximizing effectiveness of CMOM programs
Performance measurements.
Performance measurements are specific metrics designed to assess whether level of service
objectives are being met. Some examples of performance measurements:
• Annual performance goals for sewer system inspection, cleaning, maintenance,
rehabilitation, and capital improvement
• Correlating grease control education and enforcement measures with expected reductions
in the number, distribution, and severity of grease blockages
• Establishing maximum hourly and monthly peak flow volumes
• Establishing maximum emergency response time to emergency calls, tracking customer
complaints and claims for private property restoration
• Performing cost-benefit analysis of key completed activities, taking into account expected
vs. actual outcome and budgeted vs. actual cost
SSO Fact Sheet—Asset Management for Sewer Collection Systems
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Information system.
How much information is needed to create and implement an
asset management system? There is no standard answer. Each
utility must analyze its information needs, based on a variety
of factors such as asset management goals, performance
measures selected, regulatory requirements, and collection
system size, complexity, and condition.
Snapshot in Time
Begin with an evaluation and documentation of existing
information systems. For each data stream, questions to
answer include:
• How much data is collected?
• How is it collected and managed?
• How frequently is the information collected?
• How thorough are the records?
• Is the data available to other information systems and/or
other users?
For instance, field crews may track minor sewer repairs by
recording the location of the defect, the type of repair, and the
cost of labor and materials. This information could be logged
into an asset management system by workers who have laptop
computers in the field, or they may be handwritten on a work
order that ends up in a file cabinet.
Gap Analysis
The next step is to perform a side-by-side comparison between
identified information needs and existing systems to reveal gaps.
A prioritized, phased plan is then developed to fill in the gaps.
Automated Information Management System
Collection system information should be managed by computer
to ensure its availability for analysis and decision-making.
Well-designed spreadsheet databases may be adequate for
some very small or streamlined collection systems, but for
most utilities, information is most efficiently managed by use of
asset management software programs that help organize the
data, perform many standard analyses, and facilitate planning,
scheduling, and budgeting. These programs range in cost and
complexity from affordable, simple applications to complex,
expensive solutions. A number of commercial applications
are modular, so that basic systems can be enhanced and
expanded over time. It is best to start with the most basic system
appropriate to the utility's information needs, and add complexity
over time. This approach helps control up-front hardware and
software costs and makes it easier for staff to master new
systems, thereby reducing margin for error during transition.
GASB 34 and CMOM
Requirements for
Information Systems
GASB 34 establishes use of an asset
management system as a condition of
eligibility for modified approach accounting,
but does not set forth detailed requirements
for the information system component. The
CMOM approach calls for information to
be managed in a way that facilitates timely
decision-making for planning, prioritization,
and emergency response. It also establishes
basic requirements for information system
elements, including:
• Up-to-date system maps.
• Data related to capacity assessment
studies, sewer inspections, and sewer
modeling.
• Inventory of system assets, including age,
capacity, major construction materials,
historical cost, and condition.
• Information related to identified structural
and nonstructural defects, including type
of defect, severity, location, and date of
discovery.
• Records of all SSOs, including location,
date discovered, internal notification
procedures, estimated volume of release,
emergency response action taken, and
notification of affected parties, including
environmental and health agencies, water
supply utilities, private property owners,
and the public. If the SSO impacted a
surface water or sensitive environmental
resource, any required environmental
monitoring results should be included.
• Records of routine preventive operation
and maintenance activities, including
type of activity, location, date, and labor,
material, and equipment costs.
• Inventory of maintenance facilities and
equipment, including replacement parts.
• Results of inspections and tests for new
or rehabilitated system components,
including sewers, pumps, manholes, and
other appurtenances.
• Schedules and budgets for routine
operations and maintenance activities
and planned rehabilitation and
replacement projects.
8
SSO Fact Sheet—Asset Management for Sewer Collection Systems
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For most sewer networks, geographic information systems (GIS) offer advantages over plan
drawings or CAD maps. A GIS links database information to points on the map, which are
primarily defined by manhole locations and their connecting sewer segments. The GIS can
then be linked to the asset management system, sewer system model applications, and even
billing systems. Like the asset management system, the development of a GIS can be simplified
and accomplished in phases to accommodate the utility's asset management goals and
available resources.
Asset identification and capitalization.
GASB 34 requires that collection system assets be identified and that their historical cost
be reported.
Asset Identification
Asset identification is the process of identifying and numbering the primary components in
the sewer system. Once the components are assigned unique identifiers, the utility can
link information systems and aggregate data for financial, economic, technical and
management use. Identification begins with architectural or engineering maps and as-built
construction or repair records, which may exist in paper or electronic format. Information
from these records should be transferred to a database, such as
a spreadsheet, relational database, or asset management
software program.
Geographic Information
Systems (GIS)
Johnson County, KS, uses GIS for
planning, management, condition
tracking, and public outreach, even
providing an online mapping utility
through its website.
Courtesy of Johnson County, KS
Each component record includes fields for relevant information.
For instance, sewer main segments would be identified by
location, length, material, size, slope, burial depth, beginning and
ending manholes, and approximate or actual age. The component
numbering system should be based on manholes, with the sewer
segments labeled according to their relationship to the beginning
and ending manholes.
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A utility with very little available information may limit the initial asset identification to major
components, such as manholes and large-diameter gravity and force main sewers. This simple
network can be expanded over time by adding smaller lines, additional manholes, pump
stations, and other components.
Map data should be verified with physical system inspection methods such as closed-circuit TV
(CCTV), sonar/CCTV, static camera, or person-entry. Latitude/longitude coordinates should be
established or verified using global positioning surveying (GPS) techniques.
Some collection systems have never been completely inspected. Many industry experts believe
that most sewer collection systems have components that are not fully identified (i.e., sewer
lines that are shown on maps but have not been located in the field, or sewer lines that were
added to the system, but not to the maps.) Complete sewer system inspection is an expensive
and time-consuming undertaking that must be carefully planned and coordinated to support
many aspects of the asset management program. Many communities will need to prioritize and
plan inspection over a period of years. Highest priority for inspection should be given to sewers
that have known defects, have caused or contributed to SSOs or treatment plant violations, or
have the potential to impact sensitive environmental or drinking water sources.
Priorities can be further refined by performing system-wide failure impact analysis, as described
below. Second-level priority should go to areas where upcoming construction projects are
planned that may partially expose sewers, such as road replacement, water main construction,
or other utility construction. Inspection should be coordinated so that, to the extent possible,
sewer inspections are completed before the areas are disturbed. This will allow identification of
sewer defects early enough to coordinate replacement or rehabilitation while the area is already
being disturbed. Remaining areas of the collection system should be scheduled for inspection
over a longer period of time.
Asset Capitalization
In general, the capitalized amount of an asset is defined as its acquisition cost (design,
construction, land acquisition, etc.), plus capital improvements. Accumulated depreciation is
also reported (except for systems accounted for using the modified approach). For collection
system utilities, this capitalization amount could be established at the subsystem level—
force mains, sewer mains, service laterals, manholes, catch basins, etc., or at the overall
system level.
GASB 34 leaves the level of detail of asset capitalization to the discretion of the utility owner.
For instance, some utilities choose to capitalize all sewer lines, manholes, and pump stations,
while others capitalize only sewer mains above a certain size threshold. Either approach is
considered valid.
To the extent possible, actual cost records should be used to determine the amount reported
for sewer system assets. This applies unconditionally to components acquired, rehabilitated, or
significantly improved after the community has made the transition to GASB 34 reporting. For
these newly acquired assets, detailed acquisition records should be maintained for financial
reporting purposes.
For pre-existing assets, use of actual historic cost records is encouraged, but if records are
inadequate or nonexistent, GASB 34 provides several methods for estimating the historic cost.
The community may decide to restrict its retroactive reporting of infrastructure to only those
assets acquired, rehabilitated, and/or significantly improved after June 30, 1980. Phase 3
communities are not required to retroactively report assets, but are encouraged to do so.
Retroactive reporting of assets is not required until 2005 or 2006 for Phase 1 and 2
communities, respectively, but some communities may report those networks for which
information is availabel at an earlier date. A description should be provided for those networks
that are not yet reported, and whether they will be accounted for using the modified approach.
1 0 SSO Fact Sheet—Asset Management for Sewer Collection Systems
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Failure impact evaluation and risk management.
The potential impacts from sewer line failures should be assessed on a system-wide basis. The
goal is to identify those areas of the system that will have the most impact if a failure occurs,
and focus asset management resources to minimize the risk. Failure impact severity factors to
consider include location within the system, intended service function, burial depth and access
barriers, proximity to public areas or environmental resources, hydrogeological features such as
soil type, depth to groundwater, seismic activity, etc. Critical areas can be classified by zones,
individual segments, or subnetworks within the sewer system.
As an example, a community may have established an association between a certain acidic soil
type and a higher-than-average failure rate of ductile iron pipe. A high failure impact rating can
then be applied to all areas where these soils occur and where ductile pipe is known to exist.
Similarly, a high rating could be applied to sewer lines running under occupied structures in a
commercial or residential district since any needed replacement would likely involve additional
complexity, cost, and risk of private property damage.
Condition Assessment
Condition assessment is performed to identify assets that are underperforming, determine the
reason for the deficiency, predict when failure is likely to occur, and determine what corrective
action is needed and when.
The GASB 34 modified accounting option requires that condition assessment be based on
an up-to-date inventory of assets, and that the methods used be documented in such a way
that the same results could be obtained by someone else performing the same assessment.
A condition level measurement scale should be used, and a minimum acceptable condition
should be established and incorporated into the administrative
rules governing the operation of the collection system (municipal
Condition Assessment ! ordinance'state or countv statute>etc-)
Measurement Systems
There are many different
measurement systems in use by
sewer utilities. This is an example
of a simple grading system found in
Managing Public Infrastructure Assets
To Minimize Cost and Maximize
Performance (AMSA, 2002). ,
The established condition level of the collection system is left to the
discretion of the individual utility. Whatever benchmarks are chosen,
they should refer primarily to the physical condition of the system
and its components. For instance, an established condition level for
a sewer collection system could include ensuring that no more than
10% of main sewer lines are allowed to degrade below fair condition
during any 12-month period.
Grade
Condition
Description
o
1
2
3
4
5
Abandoned
Very Good
Good
Fair
Poor
Very Poor
No longer in service
Operable and well-maintained
Superficial wear and tear
Significant wear and tear; minor deficiencies
Major deficiencies
Obsolete, not serviceable
SSO Fact Sheet—Asset Management for Sewer Collection Systems
11
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Condition assessment begins with the field inspector, who records defects found in sewer
mains, service laterals, manholes, catch basins, and/or pump stations. These defects are
characterized based on a standard notation system that is used by all field inspectors. The
collection system utility establishes the appropriate level of detail. Some utilities focus on
structural defects found in primary sewer lines, while others extend the inspection and rating
systems to nonstructural defects and service laterals, access holes, and pump stations. The
defect data gathered in the field are entered into the asset management system to allow
analysis of the overall structural integrity and operating condition of each component. Some
asset management software applications automatically evaluate the types and distribution of
defects found in each component and assign a condition rating, while others allow the collection
system manager to assign the rating manually. This analysis is then combined with the failure
impact rating of the component to develop a prioritized condition rating.
Components found to be in poor condition, or with severe defects and high failure impact
ratings, should be addressed as soon as possible after they are discovered. Less severe
defects can be prioritized for more frequent inspection or cleaning, repair, rehabilitation, or
replacement. The overall system condition is then assessed based on the aggregated condition
ratings of the components to determine whether or not the system condition meets the
minimum condition levels.
GASB 34 requires that the condition assessment be performed every three years:
Condition assessments may be performed using statistical samples that are representative
of the eligible infrastructure assets being preserved. For example, one-third may be
assessed each year. If a cyclical basis is used, a condition assessment is considered
complete for a network or subsystem only when condition assessments have been
performed for all (or statistical samples of) eligible infrastructure assets in that network or
subsystem. GASB 34, Paragraph 24(a), Note 19
If statistical samples are employed as part of the complete condition assessment, the rationale
and sampling methods must be documented. The methods must be applied consistently over
time, and any changes should be documented in the MD&A.
Rehabilitation and Replacement Planning
Proactive rehabilitation and replacement planning provides the best opportunity for capital
cost savings. By rehabilitating or replacing sewers and other components before they fail, the
utility automatically avoids costs such as emergency contractor fees, staff overtime, unplanned
repairs, and SSO cleanup costs. Additional savings can be achieved through coordination of
sewer construction with other construction projects, replacing longer segments, and phasing
construction over a period of years. Proactive planning also allows
the utility to assess the relative economic costs and benefits of
rehabilitation vs. replacement.
Excellent
Optimum Preservation Point
Sewer Capacity Limit I
Minimum Level of Service
Physical Failure
Failing
o%
20% 40% 60% 80%
Percentage of Effective Life Used
100%
Replacement Planning
The goal of replacement planning
is to find the point in the asset's life
cycle where the cost of replacement
is balanced against the accelerating
cost to maintain it and declining
level of service. It is much like
deciding whether to repair or
replace an old car.
w
12
SSO Fact Sheet—Asset Management for Sewer Collection Systems
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Questions to explore for alternatives analysis include:
• When was the asset installed?
• What is the expected service life, and where is it in its life cycle?
• Can the anticipated deterioration rate and eventual failure be predicted?
• If so, what is the estimated residual life until rehabilitation or replacement is necessary?
• Could best management practices and maintenance prevent or extend the time to failure?
• Can the asset be rehabilitated? How much will rehabilitation cost?
• If so, would this extend the time to failure? By how much?
• What will be the incremental life-cycle cost of each alternative?
• Is the asset technically or commercially obsolete?
Once rehabilitation and replacement options are selected, value engineering can be performed
to optimize the location, material, design, and timing of construction.
Capacity Assurance Planning
Capacity assurance planning is fundamental to the CMOM approach. EPA's draft proposed
rule provides a detailed approach to sewer collection system evaluation and capacity planning
(SECAP). In general, capacity planning should be based on:
• Review of operational, SSO, and peak flow data for evidence of existing capacity
constraints.
• Analysis of predicted demand for sewer service, based on regional growth patterns.
Where possible, sewer planning should be linked to regional land use and/or watershed
management planning activities.
• Identification of current and future capacity shortfalls.
• Identification and evaluation of alternatives for correcting the deficiencies, focusing first on
those that are contributing to SSOs or peak flow violations at the treatment plant.
If the utility believes that meeting the capacity demand will cause financial, operational, or
physical design problems, it should explore demand management alternatives. The best way
to begin is to complete a sewer system evaluation survey (SSES) to identify bottlenecks and
evaluate the impact of inflow and infiltration (I/I) on system flows. If I/I is a significant component
of flow, the utility should address I/I first, then evaluate capacity again. Some base flow demand
management measures include flow balancing, price-based conservation incentives, and
blockage elimination programs like sediment traps and grease control ordinances.
When additional capacity is required to accommodate new development, the utility can use
"growth-pays-for-growth" strategies, such as requiring developers to install new service laterals
as a condition of building permit issuance, requiring hook-up fees to cover costs of expanding
sewer mains, additional pump stations, and treatment plant capacity. By minimizing its
investment in additional capacity, the utility can focus more of its financial resources on other
needed capital improvement projects.
SSO Fact Sheet—Asset Management for Sewer Collection Systems 13
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Maintenance Analysis and Planning
An effective maintenance program keeps the sewer system running smoothly and helps prevent
premature deterioration of components. Planning should be performed annually and updated
throughout the year as needed to address changing conditions. Maintenance activities are
either planned (i.e., inspecting all major lines in the system every 15 years, cleaning all major
lines on a rotating basis every five years) or unplanned (i.e., defect repair, emergency blockage
removal).
The asset management goal is to maximize planned maintenance and minimize unplanned
maintenance. Planned maintenance is more cost-effective because it is performed on a non-
emergency basis, is coordinated with other system operation activities, and provides more
opportunity to value engineer activities during the planning process. In general, chronic
unplanned maintenance conditions indicate that:
• Planned maintenance is too infrequent
• Planned maintenance is inadequate (activities are ineffective at preventing defects, or
needed activities are not being performed)
• The failing component may be too deteriorated to preserve through maintenance, or it is
improperly designed, and should be rehabilitated or replaced
Maintenance planning is improved by evaluating the patterns of failures leading to unplanned
maintenance to see if they were related to timing (the line failed before the next cleaning was
scheduled); ineffective maintenance methods (repeatedly clearing sediment blockages in a
sagging line, rather than correcting the sag); or to advanced deterioration or improper design.
It is important to document the assumptions, methods, and information used to support
maintenance planning analysis.
Field crews should be integrally involved with maintenance planning. This gives management
the benefit of field crews' on-the-ground expertise and achieves buy-in from the staff. As the
maintenance program proceeds, field staff should be encouraged to provide feedback on which
strategies are working and which are not, to allow mid-course corrections if necessary.
Training is also essential. Informal on-the-job training for new employees often allows improper
procedures and mistaken assumptions to be passed on. This type of initiation also places
too much emphasis on "what we do" and not enough on "why we do what we do," so that
employees do not have enough information to respond to problems they encounter as they
are performing their tasks. Maintenance activities should be documented in standard operating
procedures that are reviewed for accuracy, efficiency, and effectiveness
every two to three years, or as often as necessary to remain up to date.
New
employees should be trained on how to perform standard
procedures, coordinate with other public works and private
utility crews, operate equipment, and observe health and
safety protection requirements.
o
o
0
o
c
to
o>
c
'to
Proactive Maintenance Cost
Reactive Maintenance Cost
Maintenance Planning
The goal of system maintenance is
to improve system performance and
preserve asset condition as long as
possible. Effective planning is used
to target maintenance activities to
meet these goals and minimize
costly emergencies.
Degree of Planning
14
SSO Fact Sheet—Asset Management for Sewer Collection Systems
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Financial Management
The goal of sewer system financial management is to identify how much money will be needed
to meet level of service goals and maintain the system at or above the identified minimum
condition, forecast when the money will be needed, and use the information to set user fees,
other revenues, and debt financing.
Financial forecasting should be performed over a period of five to 10 years and should be
updated annually. The annual estimate of the cost to maintain the system is included in the
utility's annual financial report, along with a full accounting of cash flows, debt financing, and
financial reserve activity.
The better the support data, the more reliable the financial forecast. Support data include:
• Asset identification and valuation
• Condition assessment
• Performance monitoring
• Current and future capacity assessments
Where gaps in the data exist, reasonable assumptions must be used as a basis for financial
forecasting.
The high up-front costs of capital acquisition often dominate the capital improvement planning
process. It is important, however, to evaluate capital improvement alternatives relative to the
blend of capital and lifecycle costs and the expected useful life of the asset. For instance, it may
cost $1 million to construct a 36" HOPE sewer using a four-inch compacted gravel bed, and
$5 million to build the same line using an eight-inch gravel bed. Over time, however, the
probable higher maintenance costs and shorter useful life related to the first design would more
than make up for the difference in up-front cost. Other life cycle costs that may affect the cost of
ownership include the risk of harm to human health or the environment, or the risk of private or
public property damage in the event of failure.
Continuous Improvement
Continuous improvement processes are based on periodic review of systems against
performance measures to identify any shortfalls. Performance measures can be related to level
of service goals, condition maintenance goals, or asset management system goals.
For instance, if one of the level of service goals is to shift maintenance resources from
excessive emergency response to more proactive rehabilitation/replacement, then the
performance measure may be a reduction in the number of sewer emergencies during the
planning year, supported by corresponding increases in miles of sewer line replaced. If
improvement was not achieved, the performance data would be studied to determine what
barriers prevented achievement of the goal. For instance, the utility may have identified sewer
lines with significant structural deterioration that required replacement, but was not able to
obtain debt financing. The improvement plan would address this barrier through identification
of additional sources of funding, identification of more cost-effective alternatives, or a phased
replacement program to reduce the initial required investment.
Alternatively, if an operational or capital improvement program is completed and the expected
performance improvement is not realized, further analysis may needed to identify the most
effective next actions. Frequently, performance shortfalls occur because planning assumptions
were based on incomplete information. The continuous improvement plan should include
elements to improve the collection, management and use of data, including:
SSO Fact Sheet—Asset Management for Sewer Collection Systems 15
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More aerial coverage of asset inspection and condition assessment.
Identification, inspection, and condition assessment of additional asset classes, such as
smaller service mains and laterals.
More sophisticated information management tools.
Better data quality assurance.
More data correlating types of defects and time-to-failure to improve predictive planning
capability.
More integration between operational, financial, and planning systems.
Improved organizational efficiency through better systematization of asset management
programs.
Resources
International Infrastructure Management Manual, Version 1.0. ISBN No. 0 473 06739 0 NZ
National Asset Management Steering Group, Wellington, NZ, April 2000. Available for order
online at www.ingenium.org.nz
Guide to Implementation of GASB Statement 34 on Basic Financial Statements-and
Management's Discussion and Analysis-for State and Local Governments: Questions and
Answers. Product Code GQA34. Government Accounting Standards Board, Norwalk, CT, April
2000. Available for order online at www.gasb.org
Statement No. 34 of the Governmental Accounting Standards Board: Basic Financial
Statements-And Management's Discussion and Analysis-for State and Local Governments.
Product Code No. GS34, June 1999. Government Accounting Standards Board, Norwalk, CT.
Available for order online at www.gasb.org
Managing Public Infrastructure Assets. Association of Metropolitan Sewerage Agencies,
Washington, D.C. February, 2002. Available for order online at www.amsa-cleanwater.org
For Program Information on SSO Abatement
Water Permits Division
U.S. Environmental Protection Agency
EPA East Building
1200 Pennsylvania Ave., NW
Mail Code: 4204M
Washington, DC 20460
Phone: (202) 564-0581
Fax: (202) 564-0749
Internet: http://www.epa.gov/npdes/sso
Publication Information
2U02
Office of Wastewater Management •[ HF \ i <\R 01
833-F-02-001 CHA\ \\-\n-K
April 2002
1 6 SSO Fact Sheet—Asset Management for Sewer Collection Systems
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