1. PACP® Based Asset Management
Risk
PACP® Based Asset Management

2. Objectives of Asset Management
Maintain function or level of service as cost effectively as possible
Maintain individual components (assets) at lowest life cycle cost possible
The purpose of asset management is to maintain the intended function or level of service of a system as cost effectively as possible. This is achieved by maintaining the individual components of the system, known as assets, at the lowest life cycle cost possible without negatively impacting the performance of the overall system.

3. Asset Management in Wastewater Systems
Key asset management questions:
What pipes, manholes, and laterals do we own?
Where are these assets located?
What are their materials, dimensions, depth, and ground cover?
What is the condition of each asset?
What other community assets would be affected by failure of a particular asset?
Which assets are critical to sustained performance?
What are my best O&M and CIP investment strategies?
What will be the rehabilitation cost?
What effect will this have upon the utility budget?
How should all of this be communicated to stake holders?
These are the key questions that asset management helps answer. PACP is an integral part of asset management as it can be used to help answer a number of these questions (Next slide highlights which questions it can help answer).

4. PACP in Asset Management
PACP can assist in developing an asset management plan by collecting asset information such as:
Pipe segment length
Relative location details
Pipe size
Pipe shape
Pipe material
Upstream manhole data
Pipe segment lateral data
Consequence of failure
Defect codes (Structural and O&M)
Condition grades
Make it a point to discuss that CoF will be stored in Field 35 (PACP) and Field 22 (MACP) – no field for CoF in LACP.

5. Risk in Asset Management
Risk = Calculation that takes into account
Physical condition
The impact of failure to
System performance
Stakeholders
Not all assets are created equal. Risk helps us to assign a value to each asset to guide us on how to manage it properly.

6. Risk in Asset Management
Likelihood of something bad happening
and
Severity of consequence(s) of failure

7. Risk in Asset Management
Risk = LoF x CoF
Likelihood of Failure (LoF) - Probability of failure of an asset
Consequence of Failure (CoF) - Direct and indirect impacts that would result from an asset failure
Not all assets are created equal. Risk helps us to assign a value to each asset to guide us on how to manage it properly.

8. Likelihood Of Failure (LoF)
PACP condition grades can determine segment scores
Segment scores can be used to calculate Likelihood of Failure for pipelines
The Modified PACP Quick Rating based upon highest grade defect observed within a particular pipe segment
The PACP Quick Rating is used to determine Likelihood of Failure values for pipelines. This rating is preferred since its derivation is based upon the highest rating scores and is not adversely skewed by the presence of multiple low condition grade scores. The…
THIS IS WHY I am not sure we need to have the slides detailing the other methods.

9. Appendix C – PACP Condition Grading System
PACP Grading System for Pipelines, Manholes and Laterals
5 – Most significant defect grade
4 – Significant defect grade
3 – Moderate defect grade
2 – Minor to moderate defect grade
1 – Minor defect grade

10. Appendix C – PACP Condition Grading System
Pipe
Broken

11. Appendix C – PACP Condition Grading System

12. Appendix C – PACP Condition Grading System

13. Pipe Rating System
PACP Quick Rating

14. Pipe Rating System PACP Quick Rating 10 to 14 =A 15 to 19 = B
20 to 24 = C
Etc.
10 to 14 =A
15 to 19 = B
20 to 24 = C
Etc.

15. Likelihood of Failure Rules
An asset’s Likelihood of Failure is determined based on the following scenarios:
No condition assessment data is available
Condition assessment data is available and there are no defects
There are no more than 9 occurrences of the highest condition grade
The second character is a letter (indicating more than 9 occurrences)
The last two digits in the PACP Quick Rating will not be used in calculating the Modified Quick Score.
Discuss what is meant by “result of the division” in the bullets above – taking the first two numbers of the PACP Quick Rating and dividing them by 10.
In all cases we divide the first two digits of the quick rating by 10

16. Calculate LoF
Please note: A LoF of zero DOES NOT indicate that there is no likelihood of failure of this asset. Instead, any rating of zero is meant to be a flag that indicates that data is missing and should be promptly collected in order for this asset to be properly managed.

17. Calculate LoF

18. Consequence of Failure (CoF)
Direct and indirect impacts on the vicinity and community due to a potential asset failure
Expressed as “Triple Bottom Line” (TBL)
Economic Impacts
Social Impacts
Environmental Impacts

19. Consequence of Failure (CoF)
Social costs
Economical costs
Environmental costs
Sustainability
Pipe failure may be defined in multitude of ways that can vary from one agency to the next. For the purposes of this Appendix, pipe failure is defined as the inability to convey flow due to deteriorating asset condition. Consequence of Failure (CoF) is the combination of direct and indirect impact on the vicinity and community due to a potential asset failure.
In recent decades this type of impact has typically been expressed in “Triple Bottom Line “(TBL) terms – also known as People, Planet, and Profit. This concept emerged in the early 1980’s as a criterion for measuring economic, ecologic and societal success. The TBL expands the traditional organization's financial bottom line to view other non-traditional social and environmental factors. Consideration of these factors encourages an organization to also focus on social and environmental aspects rather than solely upon the (more visible) economic aspects of management. This also helps an organization to consider its stakeholders.
TBL concept focuses not only upon direct Economical Costs, but also on Social Costs and Environmental Costs. The goal is sustainability of all the assets in a balanced manner.

20. Economical Impacts Impact of Direct and Indirect economic losses
Direct costs
Asset Repairs
Legal Fees
Fines
Indirect costs
Property Values
Increased Insurance Rates
Utility's Credibility
Typically expressed in dollars and include property damage, repair cost, and production loss, etc.
Regarding sanitary sewers, economical cost considerations may include those related to pipe material, diameter, depth, and length of the pipe segments; direct or indirect interaction with other infrastructure elements such as roads and bridges in the repair vicinity; effects of local topography on required access; and possible access restriction created by such barriers as walls and fences.
Direct consequences of failures include such costs as those for asset repairs, legal fees, and fines. Indirect consequences include environmental cleanup costs and loss of business revenue to the community
Consideration must be given to other external costs that are not directly measureable but result from of the failure - such as loss in property value and increased insurance rates

21. Social Impacts Impact on Society due to asset failure Factors include
Number of properties/clients affected
Types of affected properties (hospitals, schools, businesses, parks, “critical services”, etc.)
Duration of Failure
Utility’s Credibility
Public Health and Safety
In addition, there must be consideration for safety issues (i.e. public exposure to health-threatening problems, injuries, or even fatalities)
Reduced firefighting ability can be added as an additional social cost

22. Environmental Impacts
Impact to ecological conditions occurring as a result of asset failure
Environmentally cost considerations based on
Proximity to wetlands and waterways
Federal Emergency Management Agency (FEMA) flood zones
Possible contamination of potable water sources
Sensitivity of nearby soils

23. Rating Methodology
56 inch combined trunk sewer 100 feet downstream of a Combined Sewer Overflow (CSO) that crosses a body of water
Vs.
8 inch sanitary sewer at the upstream end of the system that only serves one resident
Lower CoF
Higher CoF

24. Rating Methodology Considers locational and demographical information
Network Position
Location of Pipe
Proximity to Environmentally Sensitive Features
Service to customer of significant importance
Accessibility for maintenance and inspection
A good GIS map helps to determine these considerations
CoF assigned on a scale from 1 to 6
Assets with no CoF assigned are given a value of 0 (Zero)
GIS databases/overlays can provide excellent supporting information…

25. To group MH defects by categories
Sample GIS Data
Example GIS Data
GIS Integration
To group MH defects by categories
All defective benches
All broken covers
All missing covers
All missing frames
Structural defects on the bench and channel
Structural defects above the cone
Structural defects below the chimney
Consider how we can use this to illustrate particular attributes that affect the CoF.

26. CoF Examples CoF Descriptions and Associated Factors Examples include
Pipe Depth
Relative Network Position of the Pipe
Pipe Diameter
Location of Pipe
Distance between Pipe and Waterway
Customers of High Importance
Accessibility
GIS databases/overlays can provide excellent supporting information…
The system owner must decide upon CoF factors and weighting

27. Pipe Depth
Typically an economic consideration since deeper pipe is generally more expensive to repair/replace
These CoF factors are only reasonable illustrations of the types of factors that could be used. These factors must be thoroughly discussed with the utility or engineer and then used consistently throughout the entire asset management program at a specific utility.
* Assets with no CoF assigned shall be given a value of 0 (Zero)

28. Relative Network Position of Pipe
Pipe Diameter
Economic – Costs more to repair, replace, and rehabilitate
Social – Impacts more customers
Environmental – impacts to sensitive geographical area
Relative Network Position
Sum of relative position of all pipes discharging to an upstream structure
Some utilities are storing their data in advanced enterprise GIS databases. Typically a database will carry sewer pipe attributes like material, diameter, upstream and downstream inverts, upstream structure, downstream structure, length along with other attributes. Others have more limited capabilities.
In general large diameter pipes are located at the downstream portion of the system while small diameter pipes are located at the upstream portion.

29. Pipe Diameter Affects Economic, Environmental and Social costs
Larger diameter pipes generally
Serve more customers
Cost more to rehabilitate
* Assets with no CoF assigned shall be given a value of 0 (Zero)

30. Relative Network Position of Pipe

31. Location of Pipe
GIS based maps with layers including street network, buildings, waterways and other datasets can be utilized to assign Consequence of Failure based on surface location

32. Location of Pipe
Disruption to the community and the cost of managing emergency repairs of a pipe
Accessibility for repair, rehabilitation or replacement in case of emergency
Pipe failure on a major road causes more disruption to traffic compared to failure of a pipe on a local road
* Assets with no CoF assigned shall be given a value of 0 (Zero)

33. Proximity to Environmentally Sensitive Features
Consequence of Failure factor is set based on the distance between a pipe and an environmentally sensitive feature
Factor affected by the nature of the sensitive environment
GIS can be set-up to assign CoF based on distance to environmentally sensitive features
If… close to environmentally sensitive features….
LF=Linear Foot

34. This example shows a pipeline which runs next to a creek and river…
-if pipe damaged by feature it gets assigned a CoF factor
(Click…)
This table shows sample values for the CoF factor based on distance from pipe…
THIS SHOULD BE DISCUSSED from the perspective of the feature being damaged by the proximity of a potentially defective pipe. The closer a pipe is to a waterway the more likely is this consequence.

35. Service to Customer of Significant Importance
Hospitals, schools, manufacturing facilities, emergency services, etc., as determined by utility
Providing uninterrupted service to these facilities may be a priority for the utility
I flipped these.

37. Accessibility for Maintenance/Inspection
Response time for a service crew may be significantly higher if access is difficult
Failure may cause significant damage to the environment as well as private properties due to delays in response

39. Sample Calculation of Overall CoF
In this example, each of the various factors were equally weighted when considering the individual Economic, Social and Environmental rates. However, these could be weighted individually (i.e. diameter considered more important than depth). Or, a utility could decide to rate each based upon the single highest rated factor in each column or by what the utility considers the most crucial component of each. A table, such as this, along with its computation and weighting methods must be developed based upon sufficient consultation with the owner.
This example shows just one possible method of how calculating the CoF may be accomplished. All of this must be thoroughly discussed with the engineer or utility. The approach must be tweaked to meet the needs of the specific utility and then CONSISTENTLY applied to all of the CoF calculations throughout the system.

40. Enter Consequence of Failure value in Field 22 of the PACP Inspection Form Header Section
4.03

41. High LoF High CoF Managing Asset Risk More aggressive maintenance
Risk matrix provides a basis for a maintenance and rehabilitation program
Overall risk a function of LoF and CoF
More aggressive maintenance
High LoF
Increased assessment
High CoF
Another approach to managing risk is to implement mitigation or control measures such as investing in back-up truck-mounted or trailer-mounted pumps and having them readily available to support a failed pumping station.

42. Appendix D – PACP ® Based Risk Management
Considers PACP Role Regarding Risk Management in Asset Management

43. Managing Asset Risk CoF and LoF have a range between 0 and 6
A score of 0 (LoF or CoF) represents a data gap
Information should be promptly collected
Do not use/graph 0 scores!
On the graph
The green area represents assets with lower risk
The red area represents assets with higher risk; resources should be focused on rehabilitating assets that fall in the red area
Non-zero risk scores can be used to prioritize projects

44. Sample Asset Management Plan
Collect asset condition information
Sample Asset Management Plan
Graph this data to help set priorities

45. Managing Asset Risk (Examples)
5.1, 4.4
2.4, 4.0
2.1, 3.0
4.1, 2.8
The asset risk scores that plot the furthest towards the upper right-hand corner are the highest priority rehabilitation projects to complete.
2.1, 2.5
4.4, 2.1

46. Managing Asset Risk (Examples)
$40,000 available for rehab
$25,000 available for rehab
$20,000 available for rehab
5.1, 4.4
2.4, 4.0
2.1, 3.0
4.1, 2.8
This figure illustrates how to prioritize rehabilitation projects depending upon how much money is available to do the work. Starting in the upper right-hand corner (darkest red area), select the number of projects that can be completed based upon the rehabilitation budget that is available.
2.1, 2.5
4.4, 2.1

47. Successful Asset Management Results
Shift from emergency response to strategic risk-based management of critical assets
Reduce the number of asset failures
Minimize the negative impacts of failures when they occur
Improve performance & reliability of the system
Manage O&M costs more accurately
Successful asset management implementation has many benefits.
The purpose of assigning a risk score to each asset is to prioritize and rehab assets in a planned cost effective manner as opposed to responding to emergencies.

48. Questions? ?

49. More Information? Ted DeBoda, PE Director@nassco.org Jane Bayer
NASSCO, Inc.
(410)