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State of New Jersey Department of Environmental Protection
State of New Jersey Department of Environmental Protection
Asset Management Policy Program-Renewing New Jersey's Water Infrastructure
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Asset Management Program Components

Financing
Financing
 

 

photoThe New Jersey Department of Environmental Protection (DEP) is responsible for overseeing the protection of New Jersey’s water resources to ensure that a safe, adequate, and reliable water supply is available to the public and to restore, enhance, and maintain the integrity of the waters of the State. To ensure drinking water (DW) and clean water (CW) systems are adequately maintained and operated to meet customer service expectations as well as comply with applicable regulations DEP rules generally require DW and CW utilities to demonstrate that they have adequate facilities and equipment, and that they regularly perform operation and maintenance to assure they provide safe, adequate and reliable service  This includes conducting an inventory of system assets, providing adequate staffing and training, performing preventative maintenance, and demonstrating adequate funding. In order to meet these requirements, a utility must identify its needs and costs, and develop long-range financial plans.  The current best management practice for ensuring financial planning is through the implementation of an Asset Management Program where capital assets are inventoried, monitored, and managed over time to ensure the longevity and sustained viability of the assets as components of an effectively functioning system.

The DEP will assist utility owners and operators by clearly defining the metrics of Asset Management as well as providing technical assistance to local systems to aid in the development of each system’s Asset Management Program. 

  • Applicable Regulations:
The Safe Drinking Water Act of 1997 as amended (SDWA) and the Clean Water Act of 1985 as amended (CWA) require the Department to establish regulatory programs that require Water Systems to meet minimum standards that are protective of public health and the environment.

Amendments to the Federal Water Pollution Control Act (FWPCA) in 2014 known as the Water Resources Reform and Development Act (WRRDA) require recipients of Clean Water State Revolving Fund (SRF) loans to implement a long-term strategy and fiscal plan to pay for such strategy (Fiscal Sustainability Plans) at

Section 603(d)(1)(E)

WRRDA Section 603(d)(1)(E)- for a treatment works proposed for repair, replacement, or expansion, and eligible for assistance under subsection (c)(1), the recipient of a loan shall—
(i) develop and implement a fiscal sustainability plan that includes—
(I) an inventory of critical assets that are a part of the treatment works;
(II) an evaluation of the condition and performance of inventoried assets or asset groupings;
(III) a certification that the recipient has evaluated and will be implementing water and energy conservation efforts as part of the plan; and
(IV) a plan for maintaining, repairing, and, as necessary, replacing the treatment works and a plan for funding such activities; or
(ii) certify that the recipient has developed and implemented a plan that meets the requirements under clause (i);


For more information on WRRDA and the FSP see EPA’s interpretative guidance.

State regulations require proper operation and maintenance of systems and their components, which includes maintaining the technical, managerial and financial capacity to do so.  Below is a list of the New Jersey Statutes and Regulations that are applicable to asset management. 

Inventorying:

  • NJ Safe Drinking Water Act [N.J.S.A. 58:12A-4(c)]

    NJSA 58:12A-4(c) – The commissioner shall adopt and implement adequate procedures, promulgate appropriate rules and regulations, and issue such orders as are necessary for the enforcement of State primary drinking water regulations and for the provision of potable water of adequate volume and pressure; such regulations and procedures to include but not be limited to:
    1. Maintenance of an inventory of public water systems in the State;
    2. A systematic program for conducting sanitary surveys of public water systems throughout the State or in a part thereof, whenever the commissioner determines that such surveys are necessary or advisable;
      • "Sanitary survey" means an on-site review of the water source, facilities, equipment, operation and maintenance of a public or nonpublic water system for the purpose of evaluating the adequacy of the source, facilities, equipment, operation and maintenance for producing and distributing safe drinking water with adequate pressure and volume;
  • NJ Pollutant Discharge Elimination System Rules (N.J.A.C. 7:14A-23.5(b)6)

    N.J.A.C. 7:14A-23.5(b)6: Technical requirements for treatment works approval applications: For treatment works applications involving the temporary or permanent use of holding tanks, the engineering reports required to be submitted……include: 6. Engineering drawings containing construction details for all system components.

Technical, Managerial, and Financial Capacity:

  • NJ Safe Drinking Water Act Rules (N.J.A.C. 7:10-2.7)

    N.J.A.C. 7:10-2.7 (Existing system) -- NJDEP may require a demonstration of “managerial and technical capacity” for existing systems that undergo a change in “status or ownership” or are considered to be in significant non-compliance with State primary drinking water regulations
  • NJ Safe Drinking Water Act Rules (N.J.A.C. 7:10-13)

    N.J.A.C. 7:10-13 et seq. (New system) – Establishes minimum technical, managerial, and financial standards to prevent the operation of a “non-viable” water system.
  • NJ Safe Drinking Water Act Rules (N.J.A.C. 7:10-11.5(c)(6)

    NJAC 7:10-11.5(c)6 – Mapping (GIS) of service area and system inventory for WME permits
  • National Capacity Development Program (1996 Federal SDWA Amendments)

    National Capacity Development Program (1996 Federal SDWA Amendments)

    The National Capacity Development (CapDev) Program is designed to focus available resources toward assisting public drinking water systems in acquiring and maintaining the technical, managerial, and financial capacity to meet these challenges. Congress provided States with the flexibility to devise their own individual strategies to meet the 1996 CapDev requirements. While States have flexibility in developing and implementing their CapDev programs, they must ensure the basic requirements are met. In order to avoid Drinking Water State Revolving Fund withholding:
    • States must ensure that all new community water systems (CWSs) and non-transient, non-community water systems (NTNCWSs) demonstrate technical, managerial, and financial (TMF) capacity (CFR §1420(a)).
    • States must develop and implement a strategy to assist public water systems in acquiring and maintaining technical, managerial, and financial (TMF) capacity (CFR §1420(c)(1)(C))

Operation and Maintenance (O&M):

  • NJ Water Supply Management Act (N.J.S.A. 58:1A-5)

    N.J.S.A. 58:1A-5 (Supply and diversion of water; rules and regulations.)
    1. Standards and procedures to be followed to maintain the minimum water levels and flow necessary to provide adequate water quantity and quality;
    2. Standards and procedures governing the maintenance of adequate capacity by, and withdrawal limits for, water purveyors.
  • NJ Water Supply Management Act (N.J.S.A. 58:1A-15)

    NJSA 58:1A-15 (Powers and duties)
    1. Order any person diverting water to improve or repair its water supply facilities so that water loss is eliminated so far as practicable, safe yield is maintained, and drinking water quality standards adopted pursuant to the SDWA are met.
  • NJ Water Supply Allocation Permits Rules (N.J.A.C. 7:19-6.6)

    NJAC 7:19-6.6 (Rehabilitation) – Mandates and sets requirements for preparation and implementation of management and status surveys by water purveyors.
    • Management and status surveys shall include an analysis of the current status of system infrastructure and the planned renewal and rehabilitation required to maintain the system in good physical condition, including preventative maintenance.
    • Includes a provision requiring, where the department determines that a water supply system component has deteriorated to a degree that may jeopardize the delivery of an adequate and reliable supply of water or may cause an unduly large waste of water, the purveyor shall submit a report and implementation schedule identifying the scope of the necessary work, the time required for completion, and the required water rate modification to finance the work.
    • All approved (by DEP) rehabilitation activities shall be commenced expeditiously and in conformance with NJ SDWA and the Water Supply Management Act rules (NJAC 7:19-6.)
    • Loans from the Water Supply Bond Act may be provided on a priority basis (based on qualifications and funding availability) for planned or required transmission/distribution rehabilitation projects.
  • NJ Pollutant Discharge Elimination System Rules (N.J.A.C. 7:14A-6.12)

    N.J.A.C. 7:14A-6.12 Operation, maintenance and emergency condition (applies to all NJPDES permits)
    1. A permittee shall, at all times, maintain in good working order and operate the treatment works and facilities which are installed by the permittee to achieve compliance with the terms and conditions of the discharge permit. Proper operation and maintenance, includes, at a minimum:
      1. Effective performance based upon treatment levels for which the treatment works was designed;
      2. Adequate funding;
      3. Effective management;
      4. Adequate operator staffing and training;
      5. Regularly scheduled inspection and maintenance programs; and
      6. Adequate laboratory and process controls …..
    2. Any permittee who operates a treatment works shall satisfy the licensing requirements of the “Water Supply and Wastewater Operators’ Licensing Act,” ….. requires the operation of back-up or auxiliary facilities or similar systems when necessary to achieve compliance with the conditions of the NJPDES permit…
    3. All permittees shall submit written verification to the Department that an operation and maintenance manual for the treatment works, including the related appurtenances and collection system, has been or will be completed [per the permit]….
    4. 3. An operation and maintenance manual shall describe, at a minimum, operator and staff responsibilities; staff guidance for emergency situations; operation procedures during all events….; an emergency plan.
    5. An emergency plan shall be included as part of the operation and maintenance manual….
    6. 3. The emergency plan shall include a vulnerability analysis
  • NJ Pollutant Discharge Elimination System Rules (N.J.A.C. 7:14A-22.5(j))

    N.J.A.C. 7:14A-22.5(j) Treatment Works Approval - The full responsibility for adequate design, construction and operation of the treatment works, and the full responsibility for successful collection, treatment and discharge of pollutants shall be on the applicant.
  • Water Supply and Wastewater Operators' Licensing Act  (N.J.A.C. 7:10A-1.12(a)

    N.J.A.C. 7:10A-1.12(a) Duties, records and reports
    1. At a minimum, all licensed operators shall perform the following duties and maintain the following information for each system operated: Each licensed operator shall have readily available written detailed operations and maintenance (O&M) procedures. The O&M procedures shall be designed to maximize preventive maintenance and operating techniques that will ensure that the system operates in a manner that satisfies all laws, rules, regulations, license conditions and orders relating to this chapter. The written O&M procedures shall be updated within 30 days after any substantial change to the system that warrants a change in the operation and maintenance of the system. The written O&M procedures shall include, at a minimum:…
      1. An emergency operations plan, which addresses facility and system security, and includes a list of names and telephones of facility personnel to be contacted in the event of emergency;
      2. A schedule of routine inspections and preventive maintenance;
      3. An inventory of equipment and supplies necessary to operate and maintain the system. …
    2. Each licensed operator shall:
      1. Properly operate and maintain the system, including, but not limited to, the following duties, as applicable: (1) Monitor chemical feed and other system components;
        (2) Monitor effectiveness of treatment;
        (3) Develop a preventive maintenance plan consistent with the schedule specified in the O&M procedures;
      2. Schedule routine inspections and preventive maintenance tasks which will be undertaken to preserve the physical integrity of the system;
      3. Establish and implement a routine record keeping system designed to incorporate all O&M procedures that relate to the system; …
    3. Each licensed operator shall be responsible for conducting inspections of the system(s) and appurtenances in accordance with the schedule specified in the O&M procedures, and as otherwise indicated by operating requirements, and/or directed by the Department.
      1. The results of all mechanical equipment and appurtenance inspections essential to the proper O&M of the system shall either be recorded in ink and maintained in bound inspection log books or be maintained in secured-access computer databases or files or other equivalent method of recordkeeping.
  • Compliance Parameters:

The State, through its role as regulator of DW and CW systems, has the responsibility to ensure that all Water Systems provide the required levels of service, are operating and maintaining their systems at technically adequate and appropriate levels, and are doing so in a fiscally sustainable manner.  The following pertains to compliance parameters related to financing programs that will require AM and/or Fiscal Sustainability Plans (FSP):

  • The New Jersey Environmental Infrastructure Finance Program (NJEIFP) requires that utilities applying for loans have an AM Plan either established, or are currently developing. 
  • Beginning SFY17, federal regulations, as amended through WRRDA, require that those CW systems applying for SRF funds have an FSP established.  

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Last Updated: March 20, 2017