Asset Management

"Asset management is managing infrastructure assets to minimize the total cost of owning and operating them while continuously delivering the service levels customers desire."
-- from the publication, Managing Public Infrastructure Assets


Assets are the most expensive sources that a community can own, maintain and upkeep. Asset Management is a tool that can be used to help assure that utility services are provided in a sustainable, cost-effective way. It helps in making sound decisions by answering questions about what we do, how we do it, when we do it, where we invest, what our costs are, and what our return is.

Asset Management is a proven method whose techniques have been refined by the international community, particularly in Australia and New Zealand. NM EFC began working with Asset Management in 2003. In 2006, at the request of EPA, the NM EFC director traveled to New Zealand and Australia to study Asset Management. We have worked with systems from the very small to the very large and have provided many trainings on Asset Management to local, state and tribal governments and to the EPA.

In 2006-2007, the NM EFC undertook to assist three communities in New Mexico in preparing and implementing an Asset Management Plan as a pilot study for the NM Department of Finance and Administration and the Office of the State Engineer. This project resulted in an Asset Management Guide that has been used by hundreds of communities and agencies. In addition, case studies of these communities have been presented at numerous conferences throughout the Southwest. These case studies, as well as NM EFC's Asset Management Guide, can be downloaded by clicking on the links at the bottom of this page.

Five Core Components of Asset Management
  • Asset Inventory
  • Level of Service Agreement
  • Critical Asset Assessment
  • Life Cycle Costing
  • Long-term Funding Strategy
Asset Management Has Many Benefits:
  • Better operational decisions
  • Improved emergency response
  • Greater ability to plan and pay for future repairs and replacements
  • Increased knowledge of asset location and condition
  • Increased understanding of which assets are critical to the utility
  • More efficient operation
  • Improved customer communication and service
  • Easier rate-setting
  • Rates based on sound information
  • Increased acceptance of rates
  • Better prioritization of capital improvement projects
Funding Agencies and Asset Management

Decreasing funds and increasing project costs require funding agencies to be well informed when allocating limited funds. Funding agencies want to fund sustainable projects and ensure that repair, replacement, and O&M budgets are well thought-out. Reflecting these needs, the NM CDBG Rules and Regulations now include Asset Management as a criterion for assessing applications, and an Asset Management Plan can be worth 10 points on the application. This provides a powerful incentive in the competitive world of funding applications. With an Asset Management Plan in place, communities can show funding agencies that they won't be in need of additional money due to poor planning, and funding agencies can verify that the community understands what they are getting through a Level of Service Agreement.

Click here to access information on the EPA website for upcoming asset management workshops and other materials.



For more information, check these related documents:
Asset Management Guide
Show Me Rate-Maker (Excel rate-setting software)
Asset Management Case Studies
Asset Management Presentation (pdf)
 Environmental Finance Advisory Board
EPA Environmental Finance Program
EPA Region 6 Drinking Water Program