Asset Management

In water and wastewater systems, an "asset" is a component of a facility with an independent physical and functional identity and age (e.g., pump, motor, sedimentation tank, main). The renewal and replacement of the assets that make up our nation's water infrastructure is a constant and ongoing task. To efficiently manage this important part of a utility's business, many have turned to asset management. This approach has gained recognition all across the world—and across all infrastructure heavy sectors—for its effectiveness in maximizing the value of capital as well as operations and maintenance expenditures.

• Explore EPA- and partner-provided asset management guides and tools on our Asset Management Resources page.
• Advanced asset management training workshop materials and information can be found on our Asset Management Training Workshops page.

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• What is asset management?
• What are some benefits of asset management?
• What are the elements of asset management practice?
• Who should do asset management?

What is asset management?
Asset management is maintaining a desired level of service for what you want your assets to provide at the lowest life-cycle cost. Lowest life-cycle cost refers to the best appropriate cost for rehabilitating, repairing or replacing an asset. Asset management is a framework being widely adopted as a means to pursue and achieve sustainable infrastructure. It is the practice of managing infrastructure capital assets to minimize the total cost of owning and operating them while delivering the desired service levels. A high-performing asset management program incorporates detailed asset inventories, operation and maintenance tasks, and long-range financial planning to build system capacity, and it puts systems on the road to sustainability.

Each utility is responsible for ensuring that its system stays in good working order, regardless of the age of components or the availability of additional funds. Asset management programs with good data—including asset attributes (e.g., age, condition and criticality), life-cycle costing, proactive operations and maintenance (O&M) and capital replacement plans based on cost-benefit analyses—can be the most efficient method of meeting this challenge.

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What are some benefits of asset management?
While the benefits of asset management range across many aspects of running a water sector utility, here are some examples of outcomes that can be realized:

• Prolonging asset life and aiding in rehabilitation, repair and replacement decisions through efficient and focused operations and maintenance
• Meeting consumer demands with a focus on system sustainability
• Setting rates based on sound operational and financial planning
• Budgeting focused on activities critical to sustained performance
• Meeting service expectations and regulatory requirements
• Improving responses to emergencies
• Improving the security and safety of assets
• Reducing overall costs for both operations and capital expenditures

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What are the elements of asset management practice?
Asset management is centered on a framework of five core questions, which provide the foundation for many asset management best practices:

1. What is the current state of my assets?
2. What is my required "sustainable" level of service?
3. Which assets are critical to sustained performance?
4. What are my minimum life-cycle costs?
5. What is my best long-term funding strategy?

More information on the components within the five core question framework, as well as a short summary of best practices for each, can be found in EPA's Asset Management: A Best Practices Guide (PDF) (5 pp, 244KB, About PDF) (EPA-816-F-08-014, April 2008). This short guidebook is intended for owners, managers and operators of public water systems, local officials, technical assistance providers and state personnel.

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Who should do asset management?
Asset management is a scalable approach that can be implemented by systems of any size. Whether running a small drinking water system serving 50 customers or the drinking water and wastewater systems of the largest cities, asset management provides the means to put in place a long-term plan that will sustain these systems and the services that they provide.

Asset management is also used in other sectors where infrastructure needs to be managed for the long term, such as in the transportation and housing sectors. Some leading communities are adopting cross-sector asset management programs where infrastructure investments are coordinated and prioritized holistically across the different infrastructure areas.

Under a Memorandum of Understanding between EPA and the Federal Highways Administration (FHWA), the two agencies are working together to promote cross-sector asset management. As part of this partnership, the agencies have jointly released a set of Multisector Asset Management Case Studies (PDF) (88pp, 2.52MB, About PDF). These case studies are designed to gather lessons learned and summarize the knowledge and experiences of entities that have adopted asset management approaches across multiple infrastructure systems, notably, water and transportation infrastructure systems. 

The participating communities include the following:

• Calgary, Alberta, Canada
• Hamilton, Ontario, Canada
• Henderson, Nevada
• Portland, Oregon
• Saco, Maine

For additional information, contact Steve Allbee at EPA (allbee.steve@epa.gov) or Steve Gaj at FHWA (stephen.gaj@dot.gov).

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