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Bridging the Gap: An Educational Primer on Sustainable Water Infrastructure

Asset Management

Technical Report · August 2006

DOI: 10.13140/RG.2.2.34996.30084

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BRIDGING THE GAP:
AN EDUCATIONAL PRIMER ON
SUSTAINABLE WATER INFRASTRCUTRE
ASSET MANAGEMENT

Bridging the Gap: An Educational Primer on Sustainable Water Infrastructure Asset Management
Project was funded through a cooperative agreement between the United States Environmental
Protection Agency and the Pennsylvania State University.
 The Pennsylvania State University
Department of Civil and Environmental Engineering

MUNICIPAL WATER & WASTEWATER INFRASTRUCTURE

ASSET MANAGEMENT PRIMER

Sunil K. Sinha, PhD

Assistant Professor

S. Safa Eslambolchi
Graduate Student

University Park, PA

August 2006

Asset Management Primer © Penn State 1

Table of Contents
NOTE FROM EDITOR .................................................................................................................. 4
ABOUT THIS PROJECT: “BRIDGING THE GAP” .................................................................... 5
ABOUT THIS PRIMER: “ASSET MANAGEMENT” ................................................................. 6
National Asset Management Steering (NAMS) Group .............................................................................6
Federal Highway Administration (FHWA) ...............................................................................................7
Pavement Management System (PMS) .................................................................................................7
Bridge Management System (BMS) .....................................................................................................7
Governmental Accounting Standards Board (GASB) ...............................................................................8
United State Environmental Protection Agency (USEPA) .......................................................................8
1 INTRODUCTION ................................................................................................................ 10
2 WHAT IS ASSET MANAGEMENT? ................................................................................. 12
2.1 What is an infrastructure asset? ..................................................................................................12
2.2 Who is an asset manager?...........................................................................................................12
Infrastructure Asset Management .......................................................................................................12
2.3 Federal Highway Administration (FHWA) ................................................................................12
2.4 United States Environmental Protection Agency (USEPA) .......................................................13
Strategic Municipal Asset Management .............................................................................................14
Best Practices in Asset Management ..................................................................................................14
2.5 International Infrastructure Management Manual ......................................................................14
3 WHY ASSET MANAGEMENT? ........................................................................................ 16
3.1 System Demands ........................................................................................................................16
3.2 Budget Demands ........................................................................................................................16
4 ASSET MANAGEMENT FRAMEWORK ......................................................................... 18
4.1 Asset Identification .....................................................................................................................19
4.2 Asset Valuation ..........................................................................................................................19
GASB 34 .............................................................................................................................................19
GASB Perspective:..............................................................................................................................19
Community Perspective: .....................................................................................................................19
Straight-line depreciation ....................................................................................................................20
Modified approach ..............................................................................................................................20
4.3 Inspection/Data Collection .........................................................................................................20
4.4 Condition Assessment ................................................................................................................21
Deterioration Model ............................................................................................................................21
4.5 Decision Making ........................................................................................................................22
Life cycle cost analysis .......................................................................................................................22
4.6 Maintenance and Rehabilitation Planning and Implementation .................................................22
Trenchless Techniques for Sewer rehabilitation .................................................................................22
4.7 Prioritization for the Future ........................................................................................................23
4.8 Water Infrastructure Security .....................................................................................................24

Asset Management Primer © Penn State 2

 Security and Safety of Municipal Infrastructure Systems...................................................................24
5 ASSET DATA AND INFORMATION MANAGEMENT.................................................. 25
Geographic Information Systems (GIS)..............................................................................................25
6 PERSPECTIVES ON ASSET MANAGEMENT ................................................................ 27
6.1 Water Environment Federation (WEF) ......................................................................................27
WEFTEC® - The Water Quality Event ..............................................................................................27
6.2 Water Environment Research foundation (WERF) ....................................................................27
Sustainable Infrastructure Management Program Learning Environment (SIMPLE):.......................27
6.3 American Public Works Association (APWA) ..........................................................................28
6.4 The National Association of Clean Water Agencies (NACWA) ...............................................28
6.5 The Water Infrastructure Network (WIN) ..................................................................................28
6.6 American Water Work Association (AWWA)...........................................................................29
International Perspective on Infrastructure Asset Management .........................................................29
6.7 International Infrastructure Management Manual ......................................................................29
6.8 Australian National Audit Office (ANAO) ................................................................................29
6.9 National Guide to Sustainable Municipal Infrastructure ............................................................30
6.10 Municipal Infrastructure Investment Planning (MIIP) ...............................................................30
7 IMPLEMENTING ASSET MANAGEMENT ..................................................................... 31
8 RESEARCH AND EDUCATION IN ASSET MANAGEMENT ....................................... 32
9 CONCLUSIONS .................................................................................................................. 33
ACKNOWLEDGEMENT ............................................................................................................ 33
REFERENCES ............................................................................................................................. 34

Asset Management Primer © Penn State 3

NOTE FROM EDITOR
The Department of Civil and Environmental Engineering at the Pennsylvania State University is
pleased to present this “Asset Management Primer.” This primer is part of the project “Bridging
the Gap: An Educational Primer on Sustainable Water Infrastructure Asset Management,” funded
by United States Environmental Protection Agency (U.S. EPA). The goal of this primer is to raise
awareness of the role of water and wastewater infrastructure asset management for agencies,
municipalities, associations, academics, and the general public.

An extensive list of resources related to this topic is available at the Web site’s reference library.
Within this PDF document, hyperlinks to some of these resources provide instant access.

The information contained in this “Asset Management Primer” is believed to be correct and
appropriate for “Bridging the Gap” project. We strongly believe that this primer will help promote
best asset management practices for water and wastewater infrastructure systems in the United
States and around the world.

Sunil K. Sinha, PhD

Assistant Professor

Seyed S. Eslambolchi
Graduate Student

Department of Civil & Environmental Engineering

The Pennsylvania State University
231 Sackett Building
University Park, PA, 16802, U.S.A.
Email: [email protected]
Phone: 814-865-9433
Fax: 814-863-7304

Asset Management Primer © Penn State 4

ABOUT THIS PROJECT: “BRIDGING THE GAP”
Participant in the “Bridging the Gap: An Educational Primer on Sustainable Water Infrastructure
Asset Management,” project will be able to access the site through USEPA Asset Management
website. The USEPA website contains information about the project and a link to the project
website on the Penn State website. The entire project website is organized in the following five
sections:

Welcome: Welcome to the Bridging the Gap: An Educational Primer on Sustainable Water
Infrastructure Asset Management. As interest in water and wastewater asset management among
utilities has grown over the past decade, a number of professional and government organizations
have attempted to define asset management and develop strategic plans in an effort to focus the
practice and implementation of asset management. This site synthesizes these initiatives to develop
an educational primer for water and wastewater utility infrastructure asset management.

Module 1: This module is designed to help users understand key principles of asset management
and its components. Furthermore, it is hoped that this module will inspire municipal officials to
become “stewards” of water and wastewater infrastructure asset management through perspectives
on building the case for asset management, getting people on board, and managing change.

Module 2: This module is more technical in focus, examining current and best practices for water
and wastewater infrastructure asset management. Overall, it provides an overview of implementing
an asset management plan. It includes case studies in asset management from the Seattle Public
Utility, Atlanta Utility, Pittsburgh Water and Sewer Authority, and Benton-Nicholson (PA) Sewer
Authority.

Module 3: This module is designed to provide answers to common research and education
questions from leading experts in the field of municipal infrastructure asset management. In
addition, this module provides several international perspectives on municipal infrastructure asset
management.

Reference: This online reference library on infrastructure asset management combines rich and
scholarly resources with quick-reference coverage of the extensive spectrum of water and
wastewater infrastructure asset management. It offers a wide range of additional materials such as
videos, biographies, presentation slides, articles, books, summary, case studies, and reports.

Asset Management Primer © Penn State 5

ABOUT THIS PRIMER: “ASSET MANAGEMENT”
This Asset Management Primer is a part of project Bridging the Gap: An Educational Primer on
Sustainable Water Infrastructure Asset Management. Asset Management, as described later in this
document, is a business process and a decision-support framework that:

1. Covers the extended service life of an asset.

2. Draws from business economics, finance, public policy, as well as various disciplines of
science and engineering.
3. Considers a broad range of assets and a system approach.

The following sections outline several efforts related to sustainable infrastructure asset
management system.

National Asset Management Steering (NAMS) Group

The Institute of Public Works Engineering Australia and the New Zealand National Asset
Management Steering (NAMS) Group have jointly developed an International Infrastructure
Management Manual consisting of five main sections [1]:

• Section One - Introduction: It introduces the concepts of Total Asset Management (asset
management as an integrated part of all organizations’ activities) and Lifecycle Asset
Management (decisions are made based on costs associated with all stages of an asset’s
life).
• Section Two - Implementing Asset Management: This section describes the principles
and processes for successfully implementing asset management planning. It is designed to
help asset managers to progress quickly through the steps of developing meaningful asset
management plans and establishing a framework for the ongoing enhancement of asset
management plans to meet real business needs.
• Section Three - Implementing Techniques: This section contains details of asset
management standards, guidelines, techniques and references together with examples of
key asset management activities.
• Section Four - Asset Management Information Systems: This section advises how to
evaluate and implement information systems to support good asset management planning
and decision-making.
• Section Five - Country Specific Information: This section provides country specific
information for Australia and New Zealand outlining the current context of infrastructure
asset management planning practices in each of the countries.

Asset Management Primer © Penn State 6

Federal Highway Administration (FHWA)
To assist states, FHWA and the American Association of State Highway and Transportation
Officials (AASHTO) are developing a guidebook that will offer advice on applying asset
management principles and provide examples of best practices already underway in some of the
states. AASHTO [2] has also set up an Asset Management Task Force to guide this effort.

"Transportation agencies have undergone a fundamental change," says Mary E. Peters, director
of the Arizona Department of Transportation and head of the AASHTO task force. "Nationally
our priorities are moving to focus on more efficient and effective management, operation, and
preservation of transportation systems, rather than placing a primary emphasis on adding
capacity. Yet, for the most part, we are still operating our agencies with management information
systems that focus more on how many miles of highway we have built or maintained rather than
how those systems are performing. We can tell you how many ribbons we cut last year, but not a
rate of return on investment."

Pavement Management System (PMS)

One example of an asset management technique that is helping states better evaluate their existing
assets and calculate the return on investments in roadways is use of a Pavement Management
System (PMS). This software tool is used for collecting and monitoring information on current
pavement conditions, forecasting future conditions, and evaluating and prioritizing alternative
reconstruction, rehabilitation, and maintenance strategies. The evaluation, forecasting, and
prioritization are done to maintain the system at a steady level of performance. Alternative
rehabilitation and maintenance strategies analyzed by the PMS might include shutting down a road
completely for repair work, rather than putting the public through months or years of work zones
and detours. States such as Virginia and Washington have implemented PMS with great success.
In the long run, the shutdowns saved the public time, money, and aggravation and were preferable
to a protracted series of backups.

Bridge Management System (BMS)

Some states are also using Bridge Management System (BMS) software called PONTIS to help
them determine the best program of bridge investments to pursue over a certain period, given
funding levels. PONTIS [3] supports the entire bridge asset management. Ideally, a BMS should
identify current and future deficiencies, estimate the backlog of investment requirements, and
project future requirements.

Another powerful software tool that is currently being tested by States is a modified version of
FHWA's Highway Economic Requirements System [4] program, which provides benchmark
estimates of future highway system requirements, given some user-defined criteria.

FHWA has initiated several programs to address the issues of infrastructure and asset management.
In 1999, FHWA established the Office of Asset Management. It is one of the four offices within

Asset Management Primer © Penn State 7

FHWA’s Office of Infrastructure. The mission of this office is to bring state-of-the-art
management system technology and best practices to the state and local agencies and to provide
leadership and expertise in the management of highway infrastructure assets. The Office has three
key responsibilities [5]:

• To provide national leadership in asset management for the highway programs

• To develop asset management policies for pavement and bridge systems
• To partner with the American Association of State Highway and Transportation Officials
(AASHTO) and others to conduct nationwide programs.

To name a few, Asset Management Primer [5], Life Cycle Cost Analysis Primer [6], and Data
Integration Primer [7] are some of FHWA’s publications on the topic of infrastructure asset
management.

Governmental Accounting Standards Board (GASB)

The U.S. Governmental Accounting Standards Board is a private, non-profit organization that
defines “generally accepted accounting principles” for state and local governments. In June 1999,
GASB approved new financial reporting requirements that will encourage state and local agencies
to become better stewards of their infrastructure assets. GASB Statement No. 34: Basic Financial
Statements—and Management’s Discussion and Analysis—for State and Local Governments,
requires municipal, local, and state governments to account for their assets and to identify them in
their annual financial statements [8]. Statement 34 established and improved “standards of state
and local governmental accounting and financial reporting that will result in useful information
for users of financial reports and guide and educate the public, including issuers, auditors, and
users of those financial reports”. GASB 34 also requires state and local governments to value
infrastructure either by depreciating it or by reporting on the cost and consequences of preserving
it. Statement 34 provides two methods for reporting the infrastructure owned by governmental
authorities: (1) Straight Depreciation method (traditional), referred to as the Standard Reporting
Approach, and (2) the Modified Approach (preservation). The traditional approach to reporting
the annual cost of using capital assets involves the operating, maintenance and repair costs, as well
as depreciation costs. The Modified Approach provides information on the current physical
condition and long-term maintenance needs of government’s infrastructure assets. In the Modified
Approach, infrastructure assets do not have to be depreciated if: (1) an asset management system
is used, and (2) assets are maintained at a pre-established condition.

United State Environmental Protection Agency (USEPA)

USEPA is working closely with utilities and others to provide technical assistance and training
materials to assist utilities as they work to implement comprehensive asset management. Each
utility is responsible for making sure that its system stays in good working order-regardless of the
age of components or the availability of additional funds. Asset management programs with long-
range planning, life-cycle costing, proactive operations and maintenance, and capital replacement

Asset Management Primer © Penn State 8

plans based on cost- benefit analyses can be the most efficient method of meeting this challenge.
As part of the USEPA's Sustainable Infrastructure Initiative, the Office of Water Works in
collaboration with partner organizations to hosts and co-sponsor training sessions and facilitate
discussions on best practice in Advanced Asset Management. [9]

Asset Management Primer © Penn State 9

1 INTRODUCTION
Clean and safe water is critical for human and ecosystem health. Wastewater collection systems
perform the critical task of collecting sewage and other wastewater from places where people live,
work and recreate, and transport it to the treatment facility for proper treatment and disposal. These
systems are essential for protecting public health and the environment. Most cities and towns
started building sewer collection systems over 100 years ago and many of these systems have not
received adequate upgrades, maintenance, repair, and rehabilitation over time. Cities have used a
wide variety of materials, designs, and installation practices. The U.S. Environmental Protection
Agency estimates that there are at least 40,000 overflows of sanitary sewers each year [10]. The
untreated sewage from these overflows can contaminate our waters, causing serious water quality
problems and threatening drinking water supplies and the fish. It can also back up into basements,
causing property damage and creating threats to public health for those who encounter the
untreated sewage. Sanitary sewer overflows that discharge to surface waters have been prohibited
under the Clean Water Act since 1972 [11].

Today, municipal governments are facing an infrastructure crisis requiring costly renewal beyond
their capacity. There has been a steady decline in the state of our wastewater infrastructure over
the past two decades, and a growing concern is that these facilities may be inadequate both for
current requirements and projected future growth [12]. Funding for these needs is limited, and a
deferred maintenance, out-of-sight, out-of-mind philosophy still prevails in many regions.
Recently, for example, the American Society of Civil Engineering (ASCE) in its [2005] assessment
of the nation’s infrastructure assigned the grade ‘D’ and estimated a five-year investment needs to
be more than $1.3 trillion [13]. It is estimated that the cost of replacing all water mains in the
United States would run to $348 billion [14]. Although the federal government has spent more
than $71 billion on wastewater treatment programs since 1973, the nation’s 19,000 wastewater
systems still face enormous infrastructure funding needs in the next 20 years to replace pipes and
other constructed facilities that have exceeded their design life [15]. With billions being spent
yearly for water infrastructure, the systems face a shortfall of at least $21 billion annually to replace
aging facilities and comply with existing and future federal water regulations [16]. Monetary
investment alone will not resolve this dilemma; it must be met with a new approach to sustainable
water infrastructure engineering and management.

The enormity of the problem of deteriorating water infrastructure is apparent. Since rebuilding the
entire system is not financially realistic, municipal engineers require the capacity to monitor and
maintain the condition of water infrastructure systems. Thus, a reliable assessment and
management system is necessary so that municipal engineers can develop long-term cost effective
renewal programs [17]. These programs are necessary to ensure that critical pipeline sections are
repaired or replaced before they fail. Data is central to managing civil infrastructure effectively
[18]. At a minimum, a facility inventory and information about facility condition are essential. But
what kind of condition information is necessary? At what level of detail – temporally and spatially

Asset Management Primer © Penn State 10

– should data be collected? What level of accuracy is acceptable? The answers to these and similar
questions determine how resources can most effectively be applied to gathering the information
needed to make cost-effective decisions about infrastructure maintenance, repair, and
rehabilitation [19]. Many decision-making processes used by municipalities lack the
comprehensive integration of environmental impacts and technology solutions required to balance
development and environmental well-being. Additional research is needed in how to address the
renewal of infrastructure through the application of a holistic, system approach that includes issues
of system behavior, assessment, deterioration, and renewal [20]. The development, integration,
and deployment of state-of-the-art research and technology are needed to maintain and renew the
infrastructure more effectively.

The civil engineering curriculum must be altered through a contemporary focus on training a new
breed of engineers who are well versed in the multi-disciplinary needs of asset management and
maintenance, repair, rehabilitation, and renewal programs.

Asset Management Primer © Penn State 11

2 WHAT IS ASSET MANAGEMENT?
2.1 What is an infrastructure asset?
The EPA defines an infrastructure asset as “any long-lived capital asset that is operated as a system
or network, such as a sewer collection system.” [21] Steve Albee incorporates the idea of “service”
in his definition: “Physical facility or component of a physical facility that has a value that enables
a service to be provided.” [22]

Civil Infrastructure assets include bridges, highways, municipality’s assets i.e. water and
wastewater infrastructure assets and other publicly owned assets. Only the last types of
infrastructure assets are of the interest of this primer.

One of the important objectives of a utility is to maintain an asset’s level of service (LOS) at a
desired level, making a comprehensive managerial program is an inevitable part of any utility. An
asset management program implemented in the city of Wellington, New Zealand, provides a good
case study example.1

2.2 Who is an asset manager?

An asset manager is responsible for conducting and managing the maintenance, repair, and
infrastructure renewal program. Optimizing expenditures and maximizing the value of an asset
during its life cycle are responsibilities of an asset manager, who must possess business and
information management skills.

Infrastructure Asset Management

Employing a combination of financial, managerial, technical, and operational skills, asset
management is becoming an important part of many utilities’ efforts to provide a constant desired
level of service while being cost-effective in the long term.

As a terminology, “asset management” may sound new, but its elements have long been employed
by U.S. utilities. What is new, however, is how AM unifies, consolidates, and correlates these
elements, which we’ll examine in this primer.

2.3 Federal Highway Administration (FHWA)

The FHWA is one of the leading organizations conducting Transportation Infrastructure Asset
Management from its separate office of Asset Management, with branches in each state. The office
defines its function in this way:

1
To download this document please visit USEPA Web site at:
http://cfpub.epa.gov/npdes/sso/featuredinfo.cfm

Asset Management Primer © Penn State 12

“Asset management is a business process and a decision-making framework that covers an
extended time horizon, draws from economics as well as engineering, and considers a broad range
of assets. The asset management approach incorporates the economic assessment of trade-offs
among alternative investment options and uses this information to help make cost-effective
investment decisions.”

This office works in areas of asset management, system preservation, pavement management and
analysis, bridge management and inspection, and construction and maintenance activities, as well
as technology development, outreach, and partnering initiatives. It also conducts case studies2 and
training sessions. To date, 11 case studies have been done in several states on different aspects of
Transportation Asset Management, e.g., bridge management, data integration, economics,
highway economic requirement systems, and life cycle cost analysis. Training sessions are offered
as workshops or courses.

High demand, shortage in resources and budget, and continual aging of assets are some of the
reasons asset management is essential for this organization. To explore these issues more deeply,
see the Asset Management Primer [5].

In July 2006, the FHWA office of Asset Management signed a Memorandum of Understanding
(MOU) with the United States Environmental Protection Agency’s (USEPA) Office of Water
Works to exchange technology and increase the collaboration and communication between the two
parties to provide better service for the nation’s critical infrastructure assets.

2.4 United States Environmental Protection Agency (USEPA)

USEPA defines wastewater utilities asset management as “managing infrastructure capital assets
to minimize the total cost of owning and operating them, while delivering the service levels
customer's desire.” They believe it is “a continuous process that guides the acquisition, use, and
disposal of infrastructure assets to optimize service delivery and minimize costs over the asset’s
entire life.” [21]

As part of the USEPA's Sustainable Infrastructure Initiative, the Office of Water Works is
collaborating with partner organizations to host and co-sponsor training sessions and facilitate
discussions on best practice in Advanced Asset Management. The need for such training is
imperative since each utility is responsible for maintaining its system in good working order,
regardless of the age of components or the availability of additional funds. The most efficient
method of meeting this challenge can be through asset management programs with long-range
planning, life-cycle costing, proactive operations and maintenance, and capital replacement plans

2
To download the PDF version of these case studies please visit:
http://www.fhwa.dot.gov/infrastructure/asstmgmt/casestudies.cfm

Asset Management Primer © Penn State 13

based on cost-benefit analyses.

Strategic Municipal Asset Management

The Strategic Municipal Asset Management report examines international expertise and practices
in strategic municipal asset management, with a focus on the evaluation of asset management in
Australia and New Zealand, and provides an analysis of asset management methodologies,
outlined in its best practices below:

Best Practices in Asset Management

To achieve best practices in asset management, organizations must be able to demonstrate:

1. Knowledge of levels of service required by customers

2. Ability to predict future demands for service
3. Knowledge of ownership of existing assets
4. Knowledge of physical condition of assets
5. Knowledge of asset performance and reliability
6. Knowledge of asset utilization and capacity
7. Ability to predict the failure modes and estimated time of failure for assets
8. Ability to analyze alternative treatment options
9. Ability to rank works based on economic analysis
10. Ability to prioritize works to suit the available budget
11. Ability to develop and revise strategic objectives for each asset
12. Ability to optimize operations and maintenance activities

2.5 International Infrastructure Management Manual

The International Infrastructure Management Manual (IIMM)
[1] was first introduced by the NAMS Group in 2000 with the
second edition published in 2002. The IIMM 2006 edition,
shown in Figure 1, contains the latest concepts in asset
management and more practices and case studies from different
infrastructure sectors, presented in a very user-friendly format,
which makes it easier and more pleasing to use, especially for
those new to this area. To date, it is the most comprehensive
manual covering general Infrastructure management topics. This
manual is highly recommended to agencies and people interested
in gaining more knowledge on getting the most out of their
infrastructure assets. Figure 1. International
Infrastructure Management Manual
[26]

Asset Management Primer © Penn State 14

This manual includes five sections, beginning with an “Introduction,” which outlines the benefits
that infrastructure managers will gain from using the techniques described in the manual. Also,
briefly introduced are the concepts of Total Asset Management and Lifecycle Asset Management.

Section two, “Implementing Asset Management,” describes the principles and processes for
successfully implementing asset management planning. It is designed to help asset manager
progress quickly through the steps of developing meaningful asset management plans and
establishing a framework for the ongoing enhancement of asset management plans to meet real
business needs.

Section three, “Implementation Techniques,” talks more in details of asset management standards,
guidelines, techniques and references, together with examples of key asset management activities
such as:

• Developing and consulting

• Optimized decision-making on service levels
• Maintenance planning
• Demand forecasting
• Risk management methods and management.

Section 4, “Asset Management Information System and Data Management” provides advices on
“how to evaluate and implement information systems to support good asset management planning
and decision-making. The section includes guidelines for good data capture and ongoing data
management processes.” [1]

Section 5, “Country Specific Information,” contains “separate country specific information for
Australia and New Zealand outlining the current context of infrastructure asset management
planning practices in each country, the relevant drivers, legislation, regulations and related
documents that support this Manual.” [1]

The New Zealand Asset Valuation and Depreciation Guidelines

was also issued by NAMS later in 2001 as a companion for
IIMM.

Figure 2. The New Zealand Asset

Valuation and Depreciation
Guidelines [27]
Asset Management Primer © Penn State 15
3 WHY ASSET MANAGEMENT?
Per the Board on Infrastructure and the Constructed Environment (BICE): “The United States
spends an enormous amount of money annually to replace or repair deteriorated equipment,
machines and other components of the infrastructure. In the next several decades, a significant
percentage of the country’s transportation, communications, environmental, and power system
infrastructure, as well as public buildings and facilities, will have to be renewed or replaced.” [28]

The concept of asset management has drawn much attention from those who are responsible for
and interested in civil infrastructure systems. Motivated by rising public expectation, changing
capital allocation requirements, and increasing resource constraints, many public agencies and
enterprises in the United States have begun promoting and coordinating efforts to develop
frameworks and decision support systems for infrastructure asset management [29].

3.1 System Demands

Water and Wastewater assets include water or sewer pipes, treatment plant facilities, pumps,
manholes, and so on. Buried underground and thus out of sight, water and wastewater pipes
typically are paid less attention to than other assets. Maintenance of many buried assets follows a
reactive model, these assets are noticed only when deteriorated or, even worse, when a disaster
occurs.

As cities continue to develop and their populations grow, users increase. Some cities like Glendale,
Arizona, with a population of 36,000 in 1970 and 148,000 in 1990, has triple its growth, and is
estimated to have a population of 300,000 in 2020 [30]. But how about the capacity of their
utilities? Are their utilities adequately maintained? Are the levels of asset service measured and at
desired levels for the future growth?

Geological conditions such as settling, earth movements, or corrosive soil and tree root intrusion
are some of the disturbances that over time can cause deterioration of pipes lines, especially waste
water collection systems, which are usually metal, PVC, or concrete pipes.

3.2 Budget Demands

An enormous amount of money is spent annually to rehabilitate or replace deteriorated
infrastructure assets including facilities and pipelines. This trend does not stop and will continue
in coming years and decades, as you cannot stop buried pipes from aging. According to the USEPA
estimate, drinking water facilities will need $154 to $446 billion invested in future programs for
upgrading aging infrastructure assets.

The nonlinearity of assets’ deterioration rate makes estimating and predicting necessary funds for
maintenance and rehabilitation programs complicated. Allocating budgets for each city’s
infrastructure assets is another issue. Major funding sources for these budgets come from the
Federal government, taxes, or consumers. Though these are the current providers, we nonetheless

Asset Management Primer © Penn State 16

should ask: who should be funding these budgets? Federal money always has its constraints, and
relying on it is not the wisest choice.

Asset Management Primer © Penn State 17

4 ASSET MANAGEMENT FRAMEWORK
• Asset management is a systematic process of maintaining, upgrading, and operating
physical assets cost effectively.
• Asset management combines sound business practices, economic theory, and engineering
to facilitate a more organized, logical approach to decision-making.
• Asset management provides a framework for handling short- and long-range planning.

Figure 3 shows some of the basic elements of sustainable municipal infrastructure asset
management and how the elements build on and complement each other to form an integrated asset
management system.

Figure 3. Elements of Sustainable Municipal Infrastructure Asset Management [31]

Asset Management Primer © Penn State 18

4.1 Asset Identification
Asset identification is the process of documenting existing assets. Assigning a code or an ID to
each component of an infrastructure system lets you link all its related data, making it easy for the
operator to locate and access the asset. These data include financial, technical, economic, and
management use. Information needed for identification of a component includes location, burial
depth, length, slope, size, material, and age.

4.2 Asset Valuation

It is essential to establish the service life of assets to establish the cost of capital renewal and the
current asset value.

GASB 34
The Governmental Accounting Standards Board (GASB) was formed in 1984 by the Financial
Accounting Foundation to establish standards of financial reporting for state and local
governmental entities. GASB 34 refers to the Governmental Accounting Standards Board (GASB)
and its Statement 34 (June 1999): ‘‘Basic Financial Statements—and Management’s Discussion
and Analysis—for State and Local Governments.’’ The statement establishes a new financial
reporting model for state and local governments and introduces the biggest change in history to
public sector accounting. GASB developed the new requirements to make annual reports more
comprehensive and easier to understand and use.

GASB Perspective:
“Once a community has made the transition to GASB 34 reporting, any collection system
components that are acquired, rehabilitated, or significantly improved should be recorded as new
assets on the financial statement for the same fiscal year. “ [21]

Community Perspective:
“GASB 34 is a mandate of sorts that is not given to us by the federal government, but by the
Federal Accounting Standards Board, which can hold the ‘‘clean audit’’ over our heads if we do
not comply.” [32]

GASB 34 requires that financial statements are made available to the public to disclose how funds
were budgeted and money spent. In this way, the public will understand how the budget drives
asset management and provided services and may then support tax increases if needed to match
their expectations. Public review of financial statements and distribution of funding also helps to
shape community expectation of service. Likewise, employees gain needed public feedback as
well as recognition for their efforts. GASB 34 provides two options for filing the required annual
reports: modified or straight-line depreciation methods. Both methods have benefits and
drawbacks, as described by Chris Yarnell, author of “Asset Management GASB 34”:

Asset Management Primer © Penn State 19

Straight-line depreciation
The benefit of straight-line depreciation is the ease of reporting and tracking. Once the initial
information or database is developed, it is easily maintained. As time marches on, the asset
depreciates at a rate that is established at the onset. The largest drawback to straight-line
depreciation is that, for all the effort a department must put forth to develop the database, there is
no required maintenance of the database so that it can be used in the end to help make maintenance-
funding decisions to benefit the traveling public. [32]

Modified approach
The drawback to the modified approach is the continuous effort it takes to maintain the database.
A well-maintained database can be used in return by a department to help make justifiable
maintenance decisions that can be shown to be good, justifiable, and defendable expenditures of
the taxpayers’ money. Thus, a significant benefit of the modified approach is that it reflects the
actual state of the asset, considering actual wear and tear of the asset and the funds put back into
its upkeep, as well as major improvements to the asset [32].

Finally, reaction to GASB 34 to date has been spotty. Forward thinking utilities have understood
the advantages of implementing GASB 34 recommendations and have grasped the advantages of
undertaking the Modified Approach. In essence, well run utilities are already doing the tasks under
the Modified Approach so adhering to GASB 34 recommendations is not difficult. However, those
utility managers without the luxury of sufficient staff or resources to implement AM practices have
a more difficult time in using the Modified Approach. Many utilities assume that their current
accounting practices meet the GASB 34 recommendations for depreciating network assets and that
they can safely ignore GASB 34. Unfortunately, these utilities are missing an opportunity to realize
the real benefits of an asset management program. [33]

4.3 Inspection/Data Collection

To collect data regarding the condition of an asset, an inspection must be performed. Depending
on the type, size, and location of an asset, either crews or machines are used. Closed-circuit TV
(CCTV), sonar/CCTV, and static camera are the most common machine-based inspections
methods used for inspecting collection systems.

To conduct a thorough inspection program, utilities must be assured that all assets have been
identified and none overlooked. Complete inspection is an expensive and time-consuming
undertaking that must be done with perfect planning and scheduling to best support the goals of
asset management in different ways. Inspection of an asset is based on the prioritized scheduling
derived from decisions considering the condition of the asset, to be discussed later.

For utilities beginning to apply asset management, program scheduling for inspection is of high
importance. Inspecting all assets after identification may take as long as 20 years, while some may
need most frequent inspection. The question to ask: are all the assets at the same level of risk and

Asset Management Primer © Penn State 20

importance? The answer is “no.” Some pipes are in much higher risk of deterioration due to
corrosive surrounding soil, differences in loading and earth movement, as well as the capacity of
the asset.

4.4 Condition Assessment

The outputs of inspections are raw data that need to be translated into information. For example,
different colors in a video taken by the CCTV method represent different degrees of infection and
condition of the asset. By analyzing the data, the condition of the asset is obtained. To predict
future behavior of an asset, either a linear deterioration rate is used or a deterioration model
(discussed in the next part). Software applications are used to assist operators with condition
assessment. Some asset management software applications are more advanced and capable of
automatically evaluating the condition of assets, identifying the location and level of defects, and
assigning a condition rating, while others need a specialist to assign the ratings manually. The key
point in this process is to convert the data to accurate and useful information.

Deterioration Model
Inspection is a costly and time-consuming process, which is inevitably required to predict the
behavior and condition of an asset over time. How will the condition of that asset change? Is it
possible to predict it? Deterioration modeling is used to predict future behavior of pipes based on
the data collected from inspection. Other information used to develop the model includes material
and depth of the pipe, type of the soil, level of water table, and so on.

Figure 4. Typical CCTV images from a sewer pipe [34]

Asset Management Primer © Penn State 21

4.5 Decision Making
“Water Infrastructure: Comprehensive Asset Management Has Potential to Help Utilities Better
Identify Needs and Plan Future Investments,” a report by the U.S. General Accounting Office
(GAO) (March 2004), outlines some benefits of AM for making more efficient future investments.
Another benefit includes using information more effectively to coordinate across departments.

Life cycle cost analysis

Assets follow a cycle of behavior after construction. As the
condition of an asset approaches its least acceptable condition,
rehabilitation activities are required. Usually the rate of
deterioration derived from deterioration models dictates the
timing of the next action, which can be either maintenance and
rehabilitation or replacement. LCCA provides decision makers
with the most economical strategies to maintain the public assets
while satisfying their needs. In an LCCA process, only those
costs, which are different for alternatives, need to be considered.
This is an important distinction as it may considerably simplify
the analytical process and reduce the required information.

Optimized Decision Making Guidelines is another manual by Figure 5. Optimized

NAMS. It provides step-by-step guide for making optimized Decision Making Guidelines
Management Manual [35]
decisions for infrastructure acquisition, renewal, operations and
maintenance. To learn more about the content if this manual
please click here.

4.6 Maintenance and Rehabilitation Planning and Implementation

More rehabilitation and maintenance programs exist today due to growing awareness that proper
periodic rehabilitation and maintenance arrests deterioration. Still many cities take no action to
maintain and rehabilitate the municipalities’ assets until a failure occurs. In such an emergency,
cost will be manifold. Maintenance programs prevent failure of the asset before major deterioration
occurs. It is a proactive approach, which tackles problems before they are born. In the case of storm
water utilities, such a program saves money by reducing the likelihood of a breakdown; likewise
saving money that would have been spent on cleanup. Finally, field staff can provide feedback on
the viability of different maintenance and rehabilitation strategies in case mid-course corrections
are necessary.

Trenchless Techniques for Sewer rehabilitation

In traditional dig-and-replace techniques, an additional parallel or a replacement pipe will be
placed by digging all along the length of the existing one. In trenchless techniques, the existing
pipe is used as a host to a new pipe or liner, while in dig-and-replace the existing (old) pipe is

Asset Management Primer © Penn State 22

removed. Traditional dig-and-replace methods cannot be used to rehabilitate sewer pipes
everywhere, especially in urban environments where this method can cause disruption to traffic
and the transportation system. In some instances, pipes are buried underneath a tree or even
beneath a recently constructed building. In such cases, trenchless techniques are valuable. Spot
repairs and manhole-to-manhole lining are other benefits

Installation time is a critical issue and plays an important role in choosing between traditional and
trenchless techniques. City officials may dictate a certain time length, which is usually short, for
shutting the line. In such cases, the available time may not accommodate the dig-and-replace
method, whereas trenchless techniques can overcome such time constraints. Another very
important issue is the effect of dig and replace technique on traffic. Most of the pipe lines are along
the streets and traffic routes. Imagine what would happen if you want to use this technique to
replace a pipe at a conjunction. Figure 6.a shows an intersection with a high traffic flow. Figure
6.b shows the same conjunction while using dig-and-replace technique while figure 6.c shows the
same intersection using trenchless technique. Traffic congestion is the first effect followed by
many other social effects. In short, trenchless techniques are mostly the appropriate choice for
urban areas and are more beneficial both in time savings and convenience for citizens. [38]

4.7 Prioritization for the Future

Financial Planning

“Financial forecasting should be performed over a period of 5 to 10 years and should be updated
annually.” [21]

(a) (b) (c)

Figure 6. Dig-and- versus trenchless methods, (a) Normal traffic, (b) Using dig-and-replace technique (Congestion
is observed) (c) Using trenchless technique (The traffic still flows) [37]

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4.8 Water Infrastructure Security
Security and Safety of Municipal Infrastructure Systems
The September 11, 2001, attacks on the World Trade Center and the Pentagon have drawn attention
to the security of many institutions, facilities, and systems in the United States, including the
nation’s water supply and water quality infrastructure. These systems have long been recognized
as being potentially vulnerable to terrorist attacks of various types, including physical disruption,
bioterrorism/chemical contamination, and cyber-attack. Damage or destruction by terrorist attack
could disrupt the delivery of vital human services in this country, threatening public health and the
environment, or possibly causing loss of life. Further, since most water infrastructure is
government-owned, it may serve as a symbolic and political target for some. The Congressional
Research Service (CRS) report (2005) for congress presents an overview of this large and diverse
sector, describes security-related actions by the government and private sector since September
11, and discusses additional policy issues and responses, including congressional interest.

A bill entitled "Wastewater Treatment Works Security Act of 2003" was introduced in the Senate
on May 12, 2003, that will provide grants for conducting vulnerability assessments (VA's) and
implementing security enhancements. The VAs look at the following five plant assets: the physical
plant, the people (employees), the knowledge base (plans, drawings, etc.), information technology,
and customers.

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5 ASSET DATA AND INFORMATION MANAGEMENT
A utility’s information system plays an important role since it links all information, activities, and
aspects of an asset management program. From the location and specification of a utility
component or an asset, to scheduling a coming maintenance/rehabilitation program—all should be
managed with an integrated information system.

During excavation or construction work, especially in large cities, crews sometimes hit buried
pipes, resulting in a system breakage that may have serious consequences. Such difficulties usually
rise from a lack of cooperation between parties and accessibility to proper information. Maps and
documents for pipes installed long ago may no longer exist and those that do may not be properly
shared with those in charge.

Another important issue, one relevant to even new asset, is the loss of information associated with
the move or retirement of personnel. By organizing and properly documenting these vital
components of asset management, accessing the information is much more convenient for new
employees and decision makers.

For a small utility, a well-designed spreadsheet may be adequate; however larger scale utilities or
municipalities may need more sophisticated and advanced asset management software.

Geographic Information Systems (GIS)

Some software packages can be linked to a GIS database system, which allows the operator to
locate an asset on the map and provide instant access to edit the information of the asset. Some
more complicated software packages are even equipped with programs that allow users to enter
data taken from inspection to the appropriate sections and zones in the map and get instant analysis
of the data. Thereby, the data transforms to information which can be effectively be used in the
decision-making process.

GIS provides the utilities many feature including having instant access to assets and the locations
of different components of the system, such as manholes, pipes, and fire hydrant. If any problem
occurs and the utility gets informed by phone, they can quickly locate the exact location of the
problem by asking some basic question about the street names or other identical signs close to the
location and dispatch their team at the earliest possible time. Using GIS system also provides
utilities the opportunity to highlight critical zones, which need more frequent periodically
inspection, to give more attention to crisis situations. Although the cost of implementing a
comprehensive GIS system is high especially for small communities and municipalities, the
benefits gained for long term are considerable and worth it.

Asset Management Primer © Penn State 25

 Figure 7. GIS database for a water/wastewater system [40]

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6 PERSPECTIVES ON ASSET MANAGEMENT
National Perspective on Municipal Infrastructure Asset Management Leading organizations and
agencies in water and wastewater are briefly introduced below, along with their activities related
to asset management in the United States. (Descriptions within quotation marks have been quoted
from sponsoring Web sites.)

6.1 Water Environment Federation (WEF)

WEF is a not-for-profit organization for technical and educational purposes, mainly focusing on
water quality protection and wastewater treatment by the following services:

• Sponsoring conferences
• Providing technical training sessions and education workshops and seminars
• Technical publications (magazines and journals)
o Water environment and technology
o Water environment research
• Newsletter
• Reviewing, testifying, and making comments on environmental regulations and legislation
• Public information and education

WEFTEC® - The Water Quality Event

WEFTEC, as the largest technical exhibition and conference on water quality and wastewater
treatment technology in North America, annually hosts 16,000 water quality experts from around
the world. Infrastructure security and asset management are topics addressed in this conference.
“Managing the Water and Wastewater Utility” is one of the best books published by WEF in asset
management.

Water Is Life, and Infrastructure Makes It Happen™ is a new public education program “designed
to inform and motivate the public, ratepayers, and elected officials to invest in water and
wastewater infrastructure.” For more information about this organization, please visit
http://www.wef.org.

6.2 Water Environment Research foundation (WERF)

As a not-for-profit organization in the water and wastewater industry, WERF seeks to promote the
development and application of sound science to water quality management by providing nearly
$7 million in new projects annually, mainly focusing on management decisions, science policy,
and water quality topics.

Sustainable Infrastructure Management Program Learning Environment (SIMPLE):

“This web-based knowledge management tool assists wastewater treatment facilities in developing
a proper life-cycle asset management system. By gathering asset management best practices and

Asset Management Primer © Penn State 27

processes from around the world, SIMPLE offers users a look at state-of-the-art asset management
programs and provides the tools they need to begin a program of their own.” For more information
about WERF’s activities and products please visit the Web site at: www.werf.org

6.3 American Public Works Association (APWA)

APWA “is an international educational and professional association of public agencies, private
sector companies, and individuals dedicated to providing high quality public works goods and
services. . .. APWA provides a forum in which public works professionals can exchange ideas,
improve professional competency, increase the performance of their agencies and companies, and
bring important public works-related topics to public attention in local, state and federal arenas.”

APWA’s publications found in the bookstore webpage, include manuals, books, CD-ROMs, and
others, cover many topics in public works such as “Facilities and Grounds,” “Leadership,
Management, and Administration,” “Water Resources,” and “Construction and Municipal
Engineering.” Some of selected APWA’s publications in Asset Management are:

• Infrastructure Asset Management Manual

• GASB 34 Statement & Implementation Guide
• Managing Infrastructure Assets - Knowledge Product
• The Facility Management Handbook, 2nd Edition

6.4 The National Association of Clean Water Agencies (NACWA)

“NACWA represents the interests of the country's wastewater treatment agencies, true
environmental practitioners that serve most the population in the United States, and collectively
treat and reclaim more than 18 billion gallons of wastewater each day. NACWA maintains a key
role in the development of environmental legislation, and works closely with federal regulatory
agencies in the implementation of environmental programs.” [41]

Managing Public Infrastructure Assets to Minimize Cost and Maximize Performance (Asset
Management Handbook) published by the Association of Metropolitan Sewerage Agencies
(AMSA) is a useful handbook in water and wastewater.

6.5 The Water Infrastructure Network (WIN)

“The Water Infrastructure Network (WIN) is a broad-based coalition of local elected officials,
drinking water and wastewater service providers, state environmental and health administrators,
engineers and environmentalists dedicated to preserving and protecting the health, environmental
and economic gains that America's drinking water and wastewater infrastructure provides.” Two
reports by WIN discuss water and wastewater infrastructure financing programs: “Clean & Safe
Water for the 21st Century” and “Water Infrastructure NOW: Recommendation for clean and safe
Water in the 21st Century.” For more information please visit WIN’s Web site at win-water.org.

Asset Management Primer © Penn State 28

6.6 American Water Work Association (AWWA)
Founded in 1881, AWWA is the largest organization of water supply professionals in the world
dedicated to water quality and support’s improvement as a non-profit scientific and educational
society. AWWA is distinguished as “…the authoritative resource for knowledge, information, and
advocacy to improve the quality and supply of water in North America and beyond.” [42] Members
of this society are “…treatment plant operators and managers, scientists, environmentalists,
manufacturers, academicians, regulators, and others who hold genuine interest in water supply and
public health.” Some of the activities of AWWA:

• Conferences
• Public Officials Program
• Seminars
• Teleconference
• E-Journal
• Forums

International Perspective on Infrastructure Asset Management

In many countries around the world, asset management programs have become a vital part of
utilities; among these Australia, New Zealand, United Kingdom, and South Africa are the most
experienced and successful.

6.7 International Infrastructure Management Manual

The Institute of Public Works Engineering Australia (formerly the Institute of Municipal Engineers
Australia-IMEA) and the New Zealand National Asset Management Steering (NAMS) Group have
jointly developed an International Infrastructure Management Manual [1]. This manual is divided
into five sections: introduction, implementing asset management, implementing techniques, asset
management information systems, and country specific information. The manual defines asset
management; introduces the concepts of total asset management and life cycle asset management;
shows the benefits provided by asset management techniques; outlines best practices; provides
principles and processes of asset management implementation guidelines; shows how to evaluate
and implement information systems to support good asset management planning and decision
making; cites case studies, and includes an implementation plan.

6.8 Australian National Audit Office (ANAO)

The ANAO’s Asset Management Handbook [43] helps asset managers implement asset
management principles. The Asset Management Handbook provides an overview of asset
management principles, instructions on the application of asset management principles and
concepts, a selection of case studies, and a glossary of terms. The Australian National Audit Office
found that:

Asset Management Primer © Penn State 29

 • Most organizations can benefit from proper asset management strategies
• Asset management strategies should integrate with other strategic planning processes
• Alternatives should be considered when purchasing and replacing assets
• Life-cycle costing analysis should be used
• Improved asset management can occur from proper codification of costs of assets
• Decisions about asset decommissioning should be made at a strategic level, and
• Regular inspection of the condition and performance of assets, combined with careful
planning for replacement, can maximize the return on investment.

6.9 National Guide to Sustainable Municipal Infrastructure

The National Guide to Sustainable Municipal Infrastructure [44] is funded under the Infrastructure
Canada Program (ICP) and managed by the Federation of Canadian Municipalities (FCM) in
partnership with the National Research Council of Canada (NRC). The Guide provides a road map
to the best available solutions (Best Practices) for addressing municipal infrastructure issues. It
also serves as a focal point for the Canada-wide network of practitioners, researchers, and
municipal governments focused on infrastructure operations and maintenance.

6.10 Municipal Infrastructure Investment Planning (MIIP)

The Municipal Infrastructure Investment Planning project is a research initiative of the National
Research Council Canada and a few municipalities [45]. MIIP’s objectives are:

• Evaluating existing tools and techniques to assist municipal infrastructure investment

planning, and
• Developing prototype tools and techniques for asset managers to better manage their
municipal infrastructure

Specific deliverables of the MIIP project include: evaluations of Information Technology (IT)
tools, surveys of the use of asset management in practice, case studies of asset management, and
guidelines and manuals on asset management [46].

Asset Management Primer © Penn State 30

7 IMPLEMENTING ASSET MANAGEMENT
An asset management program is not only required for large utilities but also for small systems.
Unfortunately, there is no complete and comprehensive instruction on how to implement an asset
management program for water and wastewater infrastructure assets; however, available manuals,
books, and reports are valuable resources to help utilities achieve a proper AM program. An AM
program needn’t be complicated to be useful. For small utilities with budgeting constraints,
applying a complex asset management program would be wasteful and not even useful. In such
utilities, a basic program, like an excel sheet database, would be a good start. Then as the system
grows and enhances more advanced programs can be used. A benefit of this strategy is that as the
system develops, staff becomes more familiar and competent in applying asset management
concepts. A useful document prepared by the EPA is Asset Management: A Handbook for Small
Water Systems. It is recommended to the owner and operators of small utilities as a good reference
for starting an AM program. 3

More advanced asset management technologies and programs are used for utilities at high-level
risk of deterioration, those of high value with potentials of huge financial impact, and, finally,
systems that have considerable complexity in terms of design, size, location, or importance. A
mandate from Congress for utilities to develop a comprehensive AM program can be a good
solution and policy. Today, ten times as many professionals are focusing on AM than last year,
with their numbers increasing continuously because of the scale of challenge ahead.

3
To download a free PDF copy of this document please visit:
http://www.epa.gov/safewater/smallsys/pdfs/guide_smallsystems_asset_mgmnt.pdf

Asset Management Primer © Penn State 31

8 RESEARCH AND EDUCATION IN ASSET MANAGEMENT
Water (drinking water and wastewater) plays a critical role in every aspect of civilization:
agriculture, industry, economy, environment, recreation, transportation, culture, and health. While
clean water and sanitary conditions remain an elusive luxury in many parts of the world, we, as
Americans, take them for granted. Much of drinking water and wastewater infrastructure, however,
is old and deteriorating. A crisis looms as our demands on these systems increase. The costs
associated with renewal of these eroding systems are staggering. There is a critical disconnect
between the methodological remedies for infrastructure renewal problems and the current
sequential or isolated manner of renewal analysis and execution. These disconnect manifests in
the need for a holistic systems perspective to address the renewal problem. New tools are needed
to provide the intellectual support for water infrastructure decisions necessary to sustain economic
growth, environmental quality, and improved societal health.

Meeting the challenge for sustainability and intelligent infrastructure renewal will require a
reevaluation of the purpose for infrastructure systems within a sustainable society, which in turn
will require development of an understanding of the relationship between sustainable community
development and the demands for efficient use of technology and materials associated with
infrastructure systems. This requires the education of engineers, technological professionals, and
decision/policy makers with integrated view of technologies and their applications, and sensitivity
to the complex and diversity of the cultural, natural, and societal environment [47]. In addition,
students need to acquire the analytical tools to assess risks, to perform life-cycle analyses, and to
solve technical problems, cognizant of and taking into consideration the economic, socio-political
and environmental implications [48].

Education is critically needed in the areas of infrastructure failure, sensor technology, life-cycle
cost analysis, and renewal and rehabilitation engineering to give both students and the professional
engineering workforce the skills needed to revitalize and preserve our nation’s municipal
infrastructure system. The education plan should involve a systems approach to civil infrastructure
management and disseminating the results to K-12 students, graduate and undergraduate courses
and research, professional development offerings for engineers and researchers.

Asset Management Primer © Penn State 32

9 CONCLUSIONS
Asset management is a systematic process of maintaining, upgrading and operating physical assets
cost effectively. It combines sound business practices and economic theory, and it provides tools
to facilitate a more organized, logical approach to decision-making. Asset management provides
a framework for handling short- and long-range planning. Asset management of municipal
infrastructure system can bring major benefits by ensuring that scarce resources are used in the
most cost-effective manner, thereby enhancing economic growth, improving living standards and
improving environmental sustainability. The first step in implementing an Asset Management
program is having enough understanding and knowledge about this important concept and its
components, which requires skilled employees. Therefore, hiring personnel with the appropriate
skill sets or providing proper training sessions for current personnel is a must for municipalities or
other agencies.

ACKNOWLEDGEMENT
The authors would like to thank several individuals who contributed either directly or indirectly to
the development of this municipal infrastructure asset management primer.

Asset Management Primer © Penn State 33

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[2] AASHTO (2003) American Association of State Highway and Transportation Officials
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[3] PONTIS, Cambridge Systematics, Inc. Pontis Release 4 User’s Manual, AASHTO,
Washington, D.C., 2001.

[4] FHWA (2000), Highway Economic Requirements System State Version, (HERS-ST), Office
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[5] FHWA (1999) Asset Management Primer, Office of Asset Management, Federal Highway
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[6] FHWA (2002) Life-Cycle Cost Analysis Primer, Office of Asset Management, Federal
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[7] FHWA (2001) Data Integration Primer, Office of Asset Management, Federal Highway
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[8] GASB (2001) Basic Financial Statements—and Management’s Discussion and Analysis—for
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[9] USEPA (2006), Office of Wastewater Management, Asset Management

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[10] United States Environmental Protection Agency (U.S. EPA), (2002). “Asset Management
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[11] United States Environmental Protection Agency (U.S. EPA), (1999). “Protecting Sources of
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[12] U.S. Environmental Protection Agency (U.S. EPA), (2000). “Liquid Assets,” Washington,
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[13] American Society of Civil Engineers (ASCE), (2005). “Report Card for America’s
Infrastructure,” Reston, VA.

Asset Management Primer © Penn State 34

[14] American Society of Civil Engineers (ASCE) Policy Statement 480, (2000a). “Clean Water
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[15] American Society of Civil Engineers (ASCE) Policy Statement 326, (2000b). “Wastewater
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[16] Water Infrastructure Network (WIN), (2000). “Clean and Safe Water for the 21st Century,”
Washington, D.C.

[17] World Bank Group, (WBC), (2000). “Strategic Municipal Asset Management,” Background
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[19] National Science Foundation (NSF), (1995). “Civil Infrastructure Systems. An Integrative
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[22] Natalie Eddy, NESC, (2005). “Asset Management from Theory to Reality.”

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[28] BICE (1999), “Research Agenda for Test Methods and Models to Simulate the Accelerated
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[29] Garvin, M.J. (2001). “Challenges of Infrastructure Asset Management,”

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[30] William J. Thornton, CMC, (2001). “Asset Management in Prioritizing Water Distribution

Asset Management Primer © Penn State 35

Capital Improvement Projects.”

[31] Sinha, S.K. (2005). “Civil Infrastructure Asset Management,” Graduate Course Materials in
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[32] Chris Yarnell, P.E., (2004), “Asset Management GASB 34, And the Local Entity
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[33] Henry R. (Kelly) Derr, P.E., “Asset Management Is Much More Than an Annoying
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[34] NASSCO, 2001. “Pipeline Assessment and Certification Program,” Version 3.0 Edition
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[35] http://www.nams.org.nz/Optimised%20Decision%20Making%20Guidelines.

[36] http://www.alpha-plumbing.com/images/workers-in_pit-lg.gif

[37] http://www.istt.com/index.cfm?menuID=10

[38] U.S. Environmental Protection Agency (U.S. EPA), (2002). “Collection Systems O&M Fact
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[39] http://www.uwm.edu/News/PR/03.06/images/water_security.jpg

[40] http://www.esri.com/news/arcnews/summer05articles/summer05gifs/p19p2-lg.jpg

[41] The National Association of Clean Water Agencies (NACWA), (2006),

http://www.nacwa.org/about/

[42] American Water Works Association (NACWA), (2006), http://www.awwa.org/

[43] ANAO (1996) Asset Management Handbook, Australian National Audit Office, Canberra,
Australia, www.anao.gov.au

[44] Guide (2003) National Guide to Sustainable Municipal Infrastructure www.infraguide.gc.ca

[45] MIIP (2003) Municipal Infrastructure Investment Planning Project www.nrc.ca/irc/uir/miip

[46] MIIP Report, (2004). “A Primer on Municipal Infrastructure Asset Management,” National
Research Council, Canada.

[47] Hudson, R., Haas, R., and Uddin, W., (1997). “Infrastructure Management,” McGraw Hill
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Asset Management Primer © Penn State 36

 [48] Grigg, N., (2000). “Demographics and Industry Employment of Civil Engineering

Workforce,” J. of Professional Issues in Engineering Education & Practice, ASCE, 126(3), pp.
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[49] Short, J.J., (1997). “Infrastructure Visionaries,” Civil Engineering Magazine, ASCE, 67(8),
pp. 63-64.

Asset Management Primer © Penn State 37

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