Asset Management For Local Officials.pdf

A Concise Summary

This fact sheet provides a overview of asset management for local officials responsible for water systems, highlighting its importance and key implementation steps.

What is Asset Management?

Asset management involves strategically maintaining infrastructure to deliver desired service levels at the lowest possible life-cycle cost. It encompasses planning, budgeting, and implementing actions to rehabilitate, repair, or replace assets before failure, ensuring their productivity and preventing disruptions.

Why is it Important for Water Systems?

Prevent Infrastructure Failures: Address aging infrastructure proactively to avoid costly emergency repairs.
Optimize Limited Resources: Treat every financial decision as an investment, maximizing the return on public funds.
Transparency & Accountability: Make costs clear and justifiable to stakeholders.
Improve Service & Financial Health: Lead to more efficient operations, better capital project prioritization, rate base adjustments based on operational decisions, and enhanced financial stability.

The Five Core Questions Framework:

1. Current Asset State: Assess the value and condition of your water system assets. Declining infrastructure indicates insufficient asset management funding.
2. Sustainable Service Level: Define the required level of service to meet community needs and justify rate structures.
3. Critical Assets: Identify essential assets critical to maintaining service levels and prioritize their maintenance and improvement.
4. Life-Cycle Costs: Understand the costs associated with different asset stages (maintenance, repair, replacement) for proactive planning.
5. Long-Term Financing Strategy: Analyze economic costs and revenues to inform financial forecasting and secure funding for future needs.

Key Role for Local Officials:

Local officials play a vital role in successful asset management by:

Securing public support and commitment
Fostering community understanding of asset management's value
Overcoming implementation barriers like immediate results expectations, shifting focus from operations to assets, and reconciling short-term costs with long-term savings.

Accounting Considerations (GASB 34):

Publicly owned water systems must comply with Governmental Accounting Standards Board (GASB) Statement #34, which requires reporting infrastructure asset values and deferred maintenance costs for transparency and creditworthiness.

Benefits of Asset Management Implementation:

Sustainable water service delivery
Maximized asset useful lives
Financial self-sufficiency
* Protection of public health and the environment