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Asset Management Program Components

Financing
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photoMany of New Jersey’s Water Systems have components that are nearing, or in some cases have surpassed, the end of their expected life.  There is broad recognition of the need for consistent reinvestment in New Jersey’s aging water system infrastructure both to ensure that it will continue to serve the needs of our State and reduce the risk to the environment, economy, and public health.  As the State focuses on redevelopment and quality of life, the provision of water service, protection of health, and minimization of water service disruption is essential.

To ensure that drinking water and clean water systems are adequately maintained and operated to meet customer service expectations, as well as comply with applicable permit conditions, DEP has been working to develop resources and guidance to support Asset Management within the State. Prudent asset management planning promotes the responsible maintenance, investment, and rehabilitation of New Jersey’s clean water and drinking water infrastructure.

What is Asset Management?

Asset Management is a process to ensure that there is sufficient investment in and planned maintenance, needed repair, replacement and upgrade of the physical components of a drinking water or wastewater system. These physical components of the system infrastructure are considered assets.

To achieve effective asset management, a water system must assess the current state of their assets and have a program in place to prioritize investment. Often the prioritization is done through an Asset Management Program and documented in an Asset Management Plan.  An Asset Management Plan incorporates detailed asset inventories, operation and maintenance tasks and a long-range financial planning strategy to ensure that annual revenue reserves and reinvestment are sufficient to facilitate long-term viability of the system. The five major, generally recognized components of asset management are:

  1. Performing an inventory and condition assessment of the system’s assets;
  2. Defining level of service goals;
  3. Prioritizing assets based on criticality and business risk exposure;
  4. Establishing life cycle costs, and
  5. Developing a long-term funding strategy.

Why Asset Management?

  • Utility assets represent a major public or private investment;
  • Increased knowledge of the system allows better financial and management decisions;
  • Enables efficient and cost-effective operation of the system;
  • Reliable infrastructure promotes economic development;
  • Efficient system operation and maintenance is essential to public health and safety and protection of water quality;
  • May provide greater access to financial assistance as some funding sources give applicants higher priority ratings for having an asset management plan or a capital improvement plan.

Benefits of Asset Management

  • Improved protection of public health / environment;
  • Improved service reliability, resiliency, and sustainability;
  • Response to existing and future conditions/ long-term system integrity;
  • Significant cost savings;
  • Improved system security and safety.

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Last Updated: January 3, 2017