Getting The Money That Your Utility Requires: Key Approaches for Forecasting Capital and O&M Needs

All facilities and infrastructure assets deteriorate with time and use. To maintain the effectiveness and value of an asset, renewal work should be performed periodically, and when the asset has reached the end of its functional useful life, it should be replaced. At the heart of any life cycle management program is the effort to preserve the existing system's performance and reliability by anticipating future renewal and replacement (R&R) needs and to ensure that adequate and timely funding is planned. The session will provide key tips and best practices for getting capital and O&M funding from senior decision makers. The presentation is targeted at the intermediate level and assumes basic experience by the attendee in the areas of utility management, asset inventory, condition assessment, and determining replacement asset value. The learning objectives of the session are: 1.Appreciate the need for a renewal and replacement forecast 2.Understand the primary elements and data requirements 3.Apply the provided best practices via a checklist at any utility 4.Understand the tradeoffs with basic and more advanced approaches 5.Effectively communicate renewal and replacement funding needs Five case examples from the water and wastewater utility sector will be used to show the practical application of the highlighted tips and good practices. The case examples will include treatment facilities, collection and distribution systems, and general facilities. The case examples will highlight where different technical approaches and communication approaches were effective and where they were not. Ten best practices will be covered. Seven of these practices are considered foundational: the basic purpose and need of a lifecycle forecast; limitations as a failure prediction model; use of asset inventory and condition; considerations associated with replacement asset value (RAV); stated limitations of a basic forecasting model; variability as an expression of risk; and consideration of insights gained as important as first-generation forecasts. These foundational best practices apply to every utility, regardless of its size or scope. Three additional best practices will be provided for more intermediate participants. These include a discussion of maintenance repair strategies (ranging from 'good as new' to 'better than new'; the role of different approaches to asset rebuild frequencies and magnitudes; and the use of point estimate inputs versus probabilistic methods. The case examples are intended to keep the session practical and understandable for most conference attendees. The presentation will conclude with a practical checklist that will be useable for all attendees, regardless of their experience level or the size/scope of their utility. The presentation will not focus on a propriety software but will instead highlight Excel-based tools so that attendees can self-develop their forecasts if preferred.