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  • Writer's pictureGeorge Hawkins

Observations on Asset Management - Why AM Is The Best Investment For Every Community

Updated: Nov 7, 2023

By George S. Hawkins, Esq. Founder and President, Moonshot Missions



I was pleased at the invitation to speak during lunch at the Buried Asset Management Institute (BAMI) annual Congress in Chicago just prior to WEFTEC. I was invited by Tom Iseley, Professor of Practice at Purdue University and one of the visionaries of this work, and his trusted colleague Wei Liao, a Lead Research Engineer at Purdue and the Executive Director of BAMI. I joined this event because I am convinced Asset Management (AM) is an essential step for a community and its utility. I arrived at this realization after 15 years of experience, starting out with no awareness of AM or

what it meant.


From this context, I started with a short version of a story many have heard me

tell before—the first water main break I visited during the infamous Snowpocalypse

weekend in December of 2009. I was impressed by the intrepid work of our crews

battling the break amidst a historic storm and stunned at the poor state of the tools

at their disposal. At the heart of it was out-of-date and frequently incorrect

information about what was happening underground, presented in old books laced

with ripped pages, handwritten notes and yellow stickies, coffee stains (and

possibly blood stains)—which all seemed to unerringly steer our teams to do the

wrong work in the wrong places. They seemed to do better when they made

decisions based on years of experience and instinct.


What I did not know is that we lacked “asset management,” and its foundation:

accurate information about what assets we had and where, along with current

information about their condition and performance. This challenge is compounded

many times over when it is underground. What I have learned since is that

investments to catalogue and assess these physical assets in a digital framework

that is easy to understand, share, and replicate can provide one of the single best

set of outcomes, and therefore investments, for a utility. I offer eleven observations

to both highlight lessons I learned about AM, and why this AM should be at the top

of every community agenda:


1. Worst Name/Best Name I vividly remember my first meeting about Asset

Management at DC Water. As members of the team assembled, I questioned

why our CFO was not present. I was surprised by the curious looks in response.

I was no expert at utility operations back then, but I thought it obvious that the

CFO should be invited to a meeting about our financial assets. As often

happened in those months, my team seemed amused (and probably nervous)

that I did not realize that AM was the process to manage our physical assets –

and for this meeting—a focus on assets “outside the fence”—or in the collection

and distribution systems for wastewater, stormwater, and drinking water.

Since then, I have often thought about the wisdom of such a confusing term.

How could we come up with a more compelling name, one that might help

breathe some excitement into such work? Professor Iseley must have thought

about this issue since he added the word “buried” to the discussion, which at

least indicated we were not talking about bank accounts.


“Asset management” is exactly the right name because it beautifully

captures the dual and essential purpose: to manage the physical assets of

the enterprise in a way that both preserves the functioning of physical

structures and deploys the resources to do this work—operating and capital

dollars and human capital in the most efficient and effective way possible.

Asset management is a fundamental duality in that way and should be a

starting point for every utility.


2. From Failure to Success: Listen First We failed twice at AM at DC

Water before we succeeded. Those failures are fairly common missteps. The

first time we tried, it came from the GM’s office and was not grounded in any

real understanding of what we were trying to do or who should do it. We had

not devoted the scale of resources needed for such an undertaking, in part

because I had no real understanding of what we needed to do. We sought to

correct course in the second effort by hiring a respected consulting firm with

a significant budget. Perhaps thinking that scale and complexity was the only

way to justify this investment, the resulting program was overly complex, not

integrated with our operating teams—and was ultimately canceled. We went

back to the drawing board, governed by two of my favorite themes: listening

first and starting from the ground up.


What we learned from talking to our team who worked outside the fence

is that their greatest interest was in GIS mapping our key assets, starting

with fire hydrants and storm drains, and then expanding from there. They

wanted to be involved in how this information was recorded and displayed.

The third time was a startling success. Our personnel became enthusiastic

partners in developing the program and encouraged our efforts to expand the

information captured. The key was that the engagement was built with them

in mind and improved their ability to do their work. Of course, over time, it

grew and required new hires and engaging all sorts of sophisticated analysis

(likelihood of failure, consequence of failure, and the rest in parallel to

predictive maintenance)—but momentum was on our side.

Most importantly, our team felt respected and heard as we jointly built

these systems, which was THE essential precursor to the culture of

innovation and change that we developed. Change was guided by the team

to help them in their work and reflect their knowledge and priorities. We held

those principles close in all the years that followed.


3. Outside the Fence As we embarked on this effort, I was also surprised to

hear the level of friendly animosity between the teams that worked inside

and outside the fence of Blue Plains, our giant treatment plant. The “outside”

view was that most of the time and money was devoted to managing the

plant while the condition of the collection and distribution systems fell into disrepair. When investigated these feelings, I discovered this perception is

largely true due to the existence of stringent permits and various legal

obligations that governed almost every aspect of the treatment facility—

which required an AM program inside the fence so that compliance violations

could be avoided. Our teams at Blue Plains did not understand the irritation

felt by the crews outside the fence: they were doing what the laws dictated.

Embarking on AM outside the fence helped to level the playing field.

Creating digital mapping of assets, conditions, and the associated work

started to illuminate the causation between condition and issues that

triggered regulatory and financial consequences—particularly sanitary and

combined overflows and water main breaks. Moreover, the data also revealed

how thoughtful actions would then save us money and liability risk based on

improved future performance. The realities that AM uncovered demanded a

response and gave a compelling voice to the hardy souls working outside the

fence.


4. Asset Management Duality Almost immediately, AM helped us target

and save precious utility resources. For operations, we started replacing

existing maintenance practices that combined a standard schedule of

maintenance for most assets regardless of condition with emergency

response to those that failed. Instead, AM enabled us to target maintenance

based on need (cleaning storm drains that regularly clogged more often and

cleaning others less frequently) and start making strategic capital

investments—not just replacing old mains, but those with the most frequent

breaks—or even just segments of those with the most breaks instead of the

whole line. Not only did we do more with the same investment, but we

decreased the frequency of emergency upsets.


With time, we started adding the “consequence of failure” component to

our asset maps, so we knew where key hospitals, schools and other facilities

were, which prioritizes those projects over others. The bottom line, though, is

that we achieved far better outcomes in operations and far more productive

capital investments with the same technology that helped our crews know

what needed to be done and where in the city.


Gregory Baird, also a speaker at the BAMI Conference, highlighted that

managing infrastructure by responding to failures is five times more

expensive than maintenance of the assets, and that replacing infrastructure

is five times more expensive than repairing assets. The back-of-the-envelope

calculation is that proactive AM of infrastructure is 25 times less expensive

than either simply repairing or replacing components run to failure.


5. Asset Management and People Although AM evolves to help target

operating and capital resources to achieve better and cheaper outcomes, I

want to emphasize that these are not the only measures of success. After

doing hundreds of public meetings over the years, I heard from people

throughout the district that they wanted to see how our efforts were improving service in their neighborhoods. Each year I used to conduct Town

Halls in every ward and learned that we needed a visual way to present the

work we were doing in each ward, and what we had planned for the years

ahead. In that context, AM was essential.


So, combined with LOF (likelihood of failure) and COF (consequence of

failure) was a third fundamental overlay—responding to the needs in every

part of the city. Moreover, by visually highlighting the work we planned to do

in any neighborhood, we were able to initiate a conversation on whether we

had it right. What had we missed that needed attention? Engaging every

community in decisions gained citywide support for our overall program.


6. Known Unknowns AM also started revealing all sorts of issues in our

system that we suspected but had a hard time evaluating. For example, our

operating personnel understood that changes in the pressure of the drinking

water system could cause breaks, independent of other triggers. Think of a

reasonably sudden shut-off of water in one part of the system that raised the

pressure of the water everywhere else nearby. That pressure “transient”

would often be the reason that a piece of pipe broke, and would often affect

a collection of pipes in the same general area simultaneously. It was several

years into my tenure that my questions about this curious geographic and

temporal proximity of breaks became clear—unexpected changes to pressure

were often the cause.


AM highlighted these triggers and helped us formulate a program to be

far more thoughtful about how to minimize the threat of pressure-related

upsets. Until we had real-time AM that we could correlate to related issues

such as shut offs or other triggers, we had no real way to visualize, plan, or

respond. Assessing pressure was just one of the first truths to be highlighted

as we implemented AM.


7. Inside and Outside the Fence II The development of AM also created

a new common cause between our maintenance crews inside and outside the

fence. What I had not realized until we embarked on this program is how

many buried assets there are at the Blue Plains Treatment Plant. So much

happens underground in all the connections between various processes.

Maybe it’s no surprise, but the maintenance folks working in these

underground galleries also thought that their needs were overlooked. Those

doing this work inside the fence bonded with their counterparts and

advanced similar compelling needs at the treatment plant.


Some of the outcomes were not directly from AM but were the result of a

new level of awareness. For example, we learned that there was no

communication system that worked well underground, which was dangerous for our personnel and made the work inefficient. The result was a team-

guided project to develop, source, and implement an underground communications system that could communicate with the Fire Department if they were needed. The same system could be used in the major underground

systems outside the fence as well.


8. Fire Department II, and Insurance Undertaking AM has additional

benefits that we had not anticipated. Perhaps the most important was how

vital the information we were digitizing was to the Fire Department. Their

Battalion Chiefs had been using the same printed, out-of-date books to

identify both the location of fire hydrants, their condition, and volume of

water flow, which they consulted when under time pressure to put out a fire.

Neither agency had good information on hydrants, the size or pressure of the

lines that served them, or even their precise location.


From early on, our AM effort worked in concert with the Fire Department

to make sure the information was in a format and system that was useful to

them. The Fire Department outfitted their Battalion Chief trucks with the

same iPads that we used in our trucks, and their efficiency rose accordingly.

Recording the data also started revealing a painful reality—starting with the

17 models of hydrants, some dating back nearly a century, which were in use

in the district. No wonder it was so expensive to maintain these hydrants—

the inventory we needed if not doing a full replacement was ridiculously

difficult to source in a timely fashion.


Using the new asset data, and after conferring with the Fire Department,

we settled on two models to be used consistently and with their support: an

enhanced annual inspection and replacement program.


I was gratified to learn a few years later that these operational

improvements and targeted investments led to improvements to the rating

that the district receives to help set insurance premium rates. Due almost

entirely to our fire hydrant asset management program, the district went

from one of the worst ratings to one of the best. This improvement reduced

DC Water’s insurance premiums, and even better, saved the taxpayers of the

District considerable money across many agencies—and of course, reflected

that the people and structures of the city were safer from harm. By helping

to achieve this outcome, we found a wide range of new allies and friends,

including in the Mayor’s and Council’s offices, which were a tremendous asset

to all our efforts in the years ahead. That kind of outcome is rarely counted

in the cost benefit of an AM program, but in my view is nearly priceless.


9. City Agencies and Integration The positive “externalities” of AM kept

multiplying. One of the great complaints from the public is the tendency for

agencies to do work in the street, spend precious public money to resurface

the street, and then have a second agency come back and dig it up just a

short time later. Not only does this compound the disruption; any tax or

ratepayer knows it is a waste of money. Digitizing our assets enabled us to

communicate with our partners that work in the street—the Department of

Transportation for sure, but also the electric, gas and telecom companies.


The result was not just fewer instances of the multiple disturbances on

the same street, but the parallel savings of agencies who jointly planned

work and shared the expense of excavation and resurfacing. Much like fire

insurance, this transformation impressed the people we served on every

important level and saved their precious money. Again, that was a message

the Mayor and Council loved to highlight, and again, gained us friendships in

the municipal building.


10. Integration and Smart Cities The third aspect on this theme is how

mayors, council members, and other leaders in the community liked to

highlight how their community is becoming a “smart community.” This

attribute, stemming from successes noted above and many others, was a

leading reason for companies and businesses to choose locations in the city

and region, for young people to come back and seek employment in the

region, and perhaps most importantly for the district and surrounding

jurisdictions, to specifically target companies choosing these locations for

reasons other than government. As in most areas, we prized recruiting

Microsoft and Amazon and the rest—and one of the reasons that Amazon

decided to locate a major new corporate office in Northern Virginia was

access to top digital services and talent.


Every community wants to attract businesses and young people and offer

career paths for those looking for good, stable jobs. Training and hiring

people to start digitized AM systems is one way to develop the next

generation of employees and demonstrate a commitment to the future.


11. Federal and State Funding The final point here is one of the most

important: many states require AM programs as a pre-requisite for receiving

federal and state funding assistance with either favorable rates and terms or

as a grant or with loan forgiveness. This requirement is understandable,

because the agencies doling out these funds want to know whether the

projects selected will deliver the most benefit to public health and the

environment. AM is the foundation of making these decisions.


I certainly understand this requirement, even as I hope federal and state

agencies will be aware that AM programs for small and under-resourced

communities may be less sophisticated than larger utilities with better

resources. It imperative to consider how programs should be redesigned with

disadvantaged communities in mind. I formed Moonshot Missions to help

these communities with AM and related improvements precisely to overcome

this challenge—but that is a story for another time!


The bottom line, though, is not only does asset management enable a

utility to better allocate its own scarce resources but enables that same

utility to access federal and state financial resources that may well be critical

to a program and its success.


If you have any questions or comments on this essay, or would like to discuss how Asset Management might be a benefit for your community, please contact Moonshot Missions at info@moonshotmissions.org



OBSERVATIONS ON ASSET MANAGEMENT - WHY AM IS THE BEST INVESTMENT FOR EVERY COMMUNITY
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