audio, select “phone call” after joining the webinar 2020.pdf · 1—loss of asset results in...
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WA State DOH | 0
DWSRF Overview and Asset Management
Thank you for joining us this morning. For
audio, select “Phone Call” after joining the
webinar and dial the following phone number.
United States: 1-646-749-3129
Access Code: 495-167-789
All training materials are available at
doh.wa.gov/dwsrf
We work with others to protect the health of the people of
Washington State by ensuring safe and reliable drinking water.
DWSRF OVERVIEW AND
ASSET MANAGEMENTWashington State Department of Health
Office of Drinking Water
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WebinarMay 2020
Janet CherryProgram Supervisor
Drinking Water State
Revolving Fund Program
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Overview
Asset management components
Asset management spreadsheet
Asset management activities
Overview of Drinking Water State Revolving Fund
(DWSRF) funding programs
This training counts as bonus points on DWSRF
application
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Asset Management
We will be doing a number of examples
All information is available on the DWSRF webpage
doh.wa.gov/dwsrf
o AM Webinar 2020.pdf (presentation)
o Excel spreadsheets (2 total)
o Water System A1 asset inventory exercise.pdf
o Asset Inventory RCAC Instructions.pdf
o North tank inspection report.pdf
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Asset Management
DOH Definition
The practice of managing all utility assets to address
the total cost of owning, operating, upgrading, and
replacing them, while delivering the appropriate level
of service.
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Asset Management
Findings of 2019 American Society of Civil
Engineers (ASCE) Washington Infrastructure Report
Card for Drinking Water and Wastewater
o More funding needed
o Continue to make funds available for
improvements/replacements
o Important to make systems resilient to seismic and
extreme weather patterns
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Asset Management
ASCE report card findings (continued)
o Asset management vital
o Ensure rates provide for full cost of service including
operation, maintenance, and capital improvements
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Asset Management
Drinking Water
o Interesting fact
According to the 2015 Drinking Water Needs Assessment,
Washington will need, on average, $600 million per year
for the next 20 years to maintain the infrastructure for
public water supplies. Over half of the need is for
distribution water line replacement.
o Existing funds not sufficient to meet these demands
o Need to set rates accordingly
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Asset Management
Drinking Water
o 2018 DWSRF construction loan applicants rates ranged
from $30 to $100 per month, average of $49 per
connection per month
o 2019 DWSRF construction loan applicants rates ranged
from $26 to $91 per month, average of $56 per
connection per month
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Asset Management
Wastewater
o Interesting fact
According to 2012 information collected by Department of
Ecology, Washington will need, on average, $600 million
per year for the next six years to maintain wastewater
infrastructure.
o Average monthly sewer bill is $57 per household,
90 percent higher than the national average
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Asset Management
Why do asset management?
o Tool to discuss water system improvements with decision
makers
o Tool to develop adequate rates to operate and maintain
water system
o Prioritization of capital projects
o Proactive vs. reactive
o Bonus points on DWSRF application
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Asset Management
Asset Management Overview
o List of major assets
o Age and expected life of assets
o Condition and criticality of assets
o Cost of replacing assets
o Impact to rates
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Asset Management
LIST OF ASSETS
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Asset Management
List of major assets
o Well
o Pump
o Pipe—size, type, length (estimated)
o Reservoir
o Building
o Treatment
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Asset Management
Can be as detailed as you make it
o More sophisticated programs include valves, hydrants
o Links GIS and work tickets
Update as needed
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Asset Management
Buried assets difficult to quantify and assess
Refer to
o As-builts
o Maintenance records
o Field location of valves and estimate distance
Start collecting information and update as
information is available—asset management is an
on-going effort
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Asset Management
Rural Community Assistance Corporation has Excel
spreadsheet to help
Free and available on DWSRF webpage
Blank copy available in training material
AssetInventoryWorksheet_2020 blank.xls
Also have instructions in training material
Asset Inventory RCAC Instructions.pdf
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Asset Management
Open RCAC spreadsheet
Asset Inventory Worksheet_2020 blank.xls
Enable Macros
o Click on “file” and scroll down to “options”
o Click “Trust Center Settings”
o Click “Macro Settings” and click “Enable”
o Then click “OK”
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Asset Management
Review RCAC spreadsheet
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Asset Management
Exercise 1—Complete Asset Inventory
Using RCAC spreadsheet
Asset Inventory Worksheet_2020 blank.xls
System A1
Water System A1 asset inventory exercise.pdf
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Asset Management
Exercise 1—Complete Asset Inventory
System A1 assets
o Well #1, North Well
o 4,000 ft 4-inch PVC main
o Well #1 Pump
o Reservoir #1, North Tank
Take 5 minutes to add these assets to spreadsheet
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Asset Management
Review Exercise 1 Excel Spreadsheet
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Asset Management
AGE AND ESTIMATED LIFE OF
ASSETS
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Asset Management
Once you have list of assets, next step is
o Age of assets
o Estimated life of assets
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Asset Management
Age of assets
o Need to know date of installation
o Estimate as best possible
o Refer to as-builts, equipment manuals, current and
former water system staff
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Asset Management
Estimated life of assets
o Can use general guidelines in RCAC spreadsheet
o Refer to owner’s manuals
o Professional judgement
o Number of repairs performed on asset—balance cost of
continued repairs with replacement
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Asset Management
Estimated life of assets
Asset Type
Average
Effective
Life (years) Asset Type
Average
Effective
Life (years)
Intake Structures 40Lab Monitoring
Equipment5–10
Wells/Springs 40 Tools & Shop Equipment 10
Chlorination
Equipment
7–10 Office Furniture 10
Small motors 10–15 Computers 5
Storage Tanks 60 Vehicles 10
Pumps 10–15 Civil Structures 75
Pipe 60–90 Electrical Motors (large) 30
Valves 20–30 Electrical panels 20–25
Backflow Devices 15–20 Controls 15–25
Meters 10–15 Building assets 60
Hydrants 30–45
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Asset Management
Exercise 2—Install Date and Estimated Life of
Assets
System A1 assets
o Well #1, North Well, installed 1995
o 4,000 ft 4-inch PVC main, installed 1975
o Well #1 Pump, installed 2015
o Reservoir 1, North Tank, installed 1975
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Asset Management
Exercise 2—Enter installation date and estimated
effective life of each asset
Take 5 minutes to add information to spreadsheet
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Asset Management
Review Exercise 2 Excel Spreadsheet
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Asset Management
CONDITION AND CRITICALITY
OF ASSETS
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Asset Management
Once you have list of assets, installation date, and
estimated life, next step is
o Condition of assets
o Criticality of assets
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Asset Management
Condition of assets
o Easy to do for above-ground assets
o Buried assets may be challenging
o Do your best to assess condition of pipe based on
maintenance records and operator knowledge
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Asset Management
Condition of assets from RCAC
Condition
Rating Description Maintenance Level
Condition
Multiplier
1 Good/Expected Condition Normal Preventive
Maintenance (PM)1
2 0.95
3 Minor Defects OnlyNormal PM, Minor Contract
Maintenance (CM)
0.8
4 0.7
5 Moderate DeteriorationNormal PM, Major CM
0.5
6 0.35
7 Significant DeteriorationMajor repair, rehabilitate
0.2
8 0.1
9 Virtually Unserviceable Rehab unlikely 0.05
10 Unserviceable Replace 0
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Asset Management
Criticality of assets
o If water system is out of water for extended period of
time when asset fails, then it is very critical to maintain
operation of the asset
o If water system can continue to operate with
conservation measures and operate from storage, asset
not as critical but still important to repair/replace in
timely manner
o If loss of asset has minimum impact on water system
operations, then not critical
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Asset Management
Criticality of assets—Level of Service
o Assess customer needs for continued water
service and impacts if water service is reduced or
lost
o Hospitals
o Industrial users
o Customer with home dialysis
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Asset Management
Criticality and level of service important to
understand to assist with prioritizing projects
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Asset Management
Criticality of assets from RCAC Spreadsheet
1—Loss of asset results in system being out of
water.
o Example: Loss of well for system that has only one well
and no other water source.
2—Loss of asset impacts water service, but can be
resolved in a reasonable amount of time.
o Example: Loss of well pump in only well, able to replace
with local supplier within 24 hours. System can operate
from storage during outage.
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Asset Management
Exercise 3—Condition and Criticality of Assets
System A1 assets
o Well #1, North Well, installed 1995, excellent condition
o 4,000 ft 4-inch PVC main, installed 1975, lots of breaks
due to poor installation and construction
o Well #1 Pump, installed 2015, excellent condition
o Reservoir 1, North Tank, installed 1975, review inspection
report
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Asset Management
Reservoir 1, North Tank Inspection Report
North tank inspection report.pdf
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Asset Management
Reservoir Inspection Report
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Asset Management
Reservoir Inspection Report
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Asset Management
Reservoir Inspection Report
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Asset Management
Exercise 3—Condition and Criticality of Assets
System A1 assets
o Well #1, North Well, installed 1995, excellent condition
o 4,000 ft 4-inch PVC main, installed 1975, lots of breaks
due to poor installation and construction
o Well #1 Pump, installed 2015, excellent condition
o Reservoir 1, North Tank, installed 1975, Some minor
concerns with exterior cracking, hatch, vents
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Asset Management
Exercise 3—Enter condition and criticality for each
asset
Take 5 minutes to add information to spreadsheet
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Asset Management
Exercise 3—Condition and Criticality of Assets
System A1 assets
o Well #1, North Well, installed 1995, excellent condition
o 4,000 ft 4-inch PVC main, installed 1975, lots of breaks
due to poor installation and construction
o Well #1 Pump, installed 2015, excellent condition
o Reservoir 1, North Tank, installed 1975, Some minor
concerns with exterior cracking, hatch, vents
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Asset Management
Exercise 3—Condition and Criticality of Assets
Review
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Asset Management
ORIGINAL AND REPLACEMENT
COSTS
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Asset Management
Once you have list of assets, installation date,
estimated life, condition, and criticality, the next
step is
o Original cost
o Replacement cost
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Asset Management
Original cost
o Obtain from records, local suppliers, consultant, operator
o Estimate as best possible
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Asset Management
Replacement cost
o Obtain from local suppliers, consultant, operator
o Estimate as best possible
o Include all costs—design, permitting, equipment
purchase, installation
o Use current value—the spreadsheet adjusts for the future
value based on expected life of the asset
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Asset Management
Exercise 4—Installation and Replacement Costs
System A1 assets
o Well #1, North Well: $50,000 original cost, $200,000 replacement cost
o 4,000 ft 4-inch PVC main: $250,000 original cost, $1,000,000 replacement cost
o Well #1 Pump: $5,000 original cost, $10,000 replacement cost
o Reservoir 1, North Tank: $120,000 original cost, $300,000 replacement cost
o Assume inflation rate of 1.5 percent
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Asset Management
Exercise 4—Enter original cost, replacement cost,
and inflation rate
Take 5 minutes to add information to spreadsheet
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Asset Management
Exercise 4—Original and replacement costs
System A1 assets
o Well #1, North Well: $50,000 original cost, $200,000 replacement cost
o 4,000 ft 4-inch PVC main: $250,000 original cost, $1,000,000 replacement cost
o Well #1 Pump: $5,000 original cost, $10,000 replacement cost
o Reservoir 1, North Tank: $120,000 original cost, $300,000 replacement cost
o Assume inflation rate of 1.5 percent
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Asset Management
Exercise 4—Original Cost and Replacement Cost
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Asset Management
IMPACT TO RATES
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Asset Management
RCAC spreadsheet has a number of cells for
financial information and resulting rates
Open the spreadsheet and we will review the rate
information
Asset Inventory Worksheet Ex 5
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Prioritize Projects
What is your decision making process?
o Urgency of project—public safety or health issue?
o Level of service—is infrastructure critical for continued
service?
o Can only afford to do one project at a time
o Cost of repair vs. replacement
Cheaper to repair now, but what is cost of failure?
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Project Funding
How will you fund the project?
o Raise rates
o Seek funding, which will most likely result in a rate
increase for loan repayment
o Remember—Securing funds takes time
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DWSRF Funding Programs
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DWSRF Funding Programs
Water main replacement loan applications
accepted in August
Consolidation feasibility grant applications
accepted in August
Construction loan applications accepted
October and November
Emergency loans available year-round
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DWSRF Water Main Replacement Loan
Applications accepted August 3 to August 31
Will be notified of funding status October
Funding agreement and funds released January
2021
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DWSRF Water Main Replacement Loan
Eligible Applicants
Group A community not-for-profit systems serving
fewer than 10,000 people
(residential population)
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DWSRF Water Main Replacement Loan
$10 million available to award
Maximum award $1 million
1.75 percent interest rate, 1.0 percent loan
origination fee
Project must be completed within 36 months of
signing funding agreement
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DWSRF Water Main Replacement Loan
Must meet all DWSRF eligibility requirements
o Current approved planning document
o Project must be identified in planning document
We award bonus points based on readiness to
proceed, Water Use Efficiency reporting, asset
management
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DWSRF Consolidation Feasibility Study Grant
Applications accepted August 3 to August 31
Will be notified of funding status October
Funding agreement and funds released December
2020
Two years to complete work
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DWSRF Consolidation Feasibility Study Grant
Eligible Applicants
Applicant must be a Group A community not-for-
profit systems (PUD, City, Town, County, HOA)
System proposed for the study must be a Group A
water system serving fewer than 10,000 people
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DWSRF Consolidation Feasibility Study Grant
$150,000 available to award
All grant
$30,000 per project
If studying to consolidate 4 or more systems
(excludes project applicant) the maximum award is
$45,000
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DWSRF Consolidation Feasibility Study Grant
Need letters of commitments to participate in
study
Funding can be used for assessment of water
system to be consolidated, costs for infrastructure
improvements, reports, meetings
Cannot reimburse for costs incurred prior to
funding agreement execution
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DWSRF Consolidation Feasibility Study Grant
Projects scored and ranked based on health risk
being addressed
New this year: managerial challenges of having
vacant positions or board/council positions
Bonus points awarded for number of water
systems participating in the study
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DWSRF Construction Loan
Applications accepted October 1 to November 30
Will be notified of funding status February 2021
Funding agreement and funds released August
2021
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DWSRF Construction Loan
Eligible Applicants
Group A community systems
Group A nonprofit noncommunity systems
Group B systems converting to Group A through a
consolidation
Tribal systems not receiving SDWA set asides for
the project
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DWSRF Construction Loan
Must be a construction project
Approximately $35 million available
Maximum award $5 million
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DWSRF Construction Loan
Projects scored and ranked based on severity of
health risk being addressed
Award principal forgiveness based on affordability
index or if a consolidation project (up to 50 percent
principal forgiveness)
Must have current approved planning
document
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DWSRF Construction Loan
Twenty-year repayment, but can extend to 30 years
for disadvantaged communities
1.75 percent standard interest rate, 1.25 percent if
project receiving principal forgiveness
1.0 percent loan origination fee
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DWSRF Construction Loan
Funding available for additional costs for
construction overruns
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Emergency Funding
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DWSRF Emergency Loan
Open—Year-round
Limit—$500,000 per entity
Emergency defined as any time the water system is
without water
Eligible entities—Group A publicly and privately
owned not-for-profit community systems (up to
10,000 people) and noncommunity systems owned
by nonprofits
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DWSRF Emergency Loan
Eligible activities
o Preconstruction activities
o Construction, reconstruction, replacement or
rehabilitation
o Temporary repair or improvement needed to
continue or restore service
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DWSRF Emergency Loan
Interest rate: 0 percent.
No principal forgiveness
Loan Terms: 10 years.
Time of performance: Two years from contract
execution to project completion.
Repayment: Starts the first October after contract
execution.
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Reminder
DWSRF bonus points for attending today
Need asset inventory, age of asset, expected life of asset,
replacement cost, and criticality to receive additional bonus
points
Start gathering information for RCAC spreadsheet and
update as needed. Don’t let lack of information prevent
you from starting.
Potential infrastructure stimulus funding
COVID 19 resources on Office of Drinking Water webpage
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Upcoming Training Opportunities
Webinars in July, August, September, and
November for all DWSRF funding cycles—check
the DWSRF webpage in July for webinar
information
IACC Annual Conference
o Late October in Wenatchee
o Learn about funding projects
o Can also request a tech team
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DWSRF Contact Information
Janet Cherry 360-236-3153
Sara Herrera 360-236-3089
Scott Kugel 509-329-2117
DWSRF Mailbox [email protected]
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Loans and Grants Contact Information
Mike Copeland 360-236-3083
Eloise Rudolph 360-236-3124
Dennis Hewitt 360-236-3017
Brittany Cody-Pinkney 360-236-3047
Safe, reliable drinking water isn’t free.
Clean and consistent drinking water requires
commitment, hard work, and investment.
We want everyone to know how water systems provide
safe, reliable drinking water to their customers.
Investing in infrastructure today ensures safe and reliable
drinking water for our future generations.
We Value Water