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

2. Asset Management Start by answering five key questions

3. Five Key Questions 1. 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? 2. 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? 3. 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? 4. What are my best O&M and CIP investment strategies? What alternative management options exist? Which are most cost effective for my organization? 5. What is my best long-term funding strategy?

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

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

7. WACHS Utility Services 2008 Status Quo What is the Status Quo? Operability System Information Gaps Asset Inventory Asset Locations Accuracy of Asset Info Continued Status Quo?

8. WACHS Utility Services 2008 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 Wilmington Oklahoma City Charlotte BaltimoreHenrico County Columbus

10. WACHS Utility Services 2008 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. WACHS Utility Services 2008 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. WACHS Utility Services 2008 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. WACHS Utility Services 2008 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. WACHS Utility Services 2008 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. WACHS Utility Services 2008 Risks and Costs What are the RISKS and COSTS of maintaining the status quo?

16. WACHS Utility Services 2008Risks Low Operability = Loss of System Control

17. WACHS Utility Services 2008 Initially Inoperable – 61%

18. WACHS Utility Services 2008 Currently Inoperable – 16%

19. Asset Criticality: Valves The Coming Wave

20. Definitions Function STOP water flow when needed 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 and ALLOW water flow when not

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

22. Industry 190020252000197519501925 $ InvestmentInvestment Post War Installation Wave Population Growth Installation Wave Continuing Installation Renew/Replace Wave Valve Criticality Wave

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. WACHS Utility Services 2008 The Moving Parts Valves Meters Leak Detection Hydrants System Rehabilitation Water Audit Leak Survey Leak Pinpoint Document Inspect Exercise Repair Document Test Repair Replace Document Inspect Flush Flow test Paint Repair Document GIS Map Evaluate Create Analyze

25. WACHS Utility Services 2008 Solutions Moving parts control the system Control the moving parts and you control the system

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

27. Customer Impacts Numbers Dollars “Factors” 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

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. WACHS Utility Services 2008 Focus The Distribution System is gaining focus across the industry.

31. WACHS Utility Services 2008 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. WACHS Utility Services 2008 Asset Management City of Chicago, IL Asset Lifespan Gaps

33. WACHS Utility Services 2008 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. WACHS Utility Services 2008 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. WACHS Utility Services 2008 CIP Planning Dollars Spent Wisely (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

36. WACHS Utility Services 2008 Currently Inoperable – 16% 5 of 6 valves inoperable

37. WACHS Utility Services 2008 Solutions Getting started

38. Where to Start: 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. WACHS Utility Services 2008 Where to Start Pilot program System program *Start with System Control Points (Valves) and Information

40. WACHS Utility Services 2008 Paul Schumi Director of Sales & Marketing pschumi@wachsus.com cell: (630) 485-9870