Hi Geoff,
You are spot on my friend.
We are using major capital bid tabs and development projects unit rates from the last five years to inform the rates as closely as practically possible to market rates. There is quite a bit more supporting data than that, but the bid tabs and unit rates are the meat and potatoes of it.
We are aiming to develop a base unit rate for each asset based on size, type, and greenfield construction (Tier 1 factors). We are doing this with a Modern Equivalent Approach focused solely on valuing the assets based on our current standards irrespective of the actual material. After that we are developing a series of factors to capture costing variables such as location (urban, suburban, rural) and environment (depth, road xing, river xing, rail xing, etc.,) (Tier 2 Factors). Finally we will consider variables related to renewals, valuing historic assets ,and economies of scale such as; disposal costs, bypass costs, size of project, time period of construction, etc. (Tier 3 factors). All of these factors are supported by data we currently capture in the asset register. As a starter we are going to be applying the formulas in an Excel Spreadsheet estimation/valuation tool. Eventually we would look to integrate this with one of our information systems to automate valuation.
We are also trying to get a handle on the estimated O&M cost per assets type, size, etc.. That one is definitely more difficult...sort of like trying to catch a greased pig at the county fair. However, we have a pretty good approach and are starting to make some tangible progress on acquiring supporting data.
I have some detailed specifications I would be willing to share just shoot me an email. I will also be making a presentation on the valuation project with our supporting consultant B&V in mid October as a part of the SCAWWA Joint Asset Management Committee AM Workshop. The project will not be complete by that time but we will be far enough down the track to provide an informative presentation on our approach and lessons learned thus far. The workshop will be virtual and anyone is welcome to attend but there is a small registration fee. If you or anyone else in the forum is interested I will share a link to the registration page. Thank you!
Regards,
Earl DuPriest
Asset Management Program Manager
Charleston Water System
103 St. Philip Street | Charleston, SC 29403
Tel: 843-727-7202
Mob: 843-214-4310
E: dupriester@charlestoncpw.com
Original Message:
Sent: 30 September 2020 11:09
From: Geoff Brown
Subject: How are you valuing assets?
Hi Earl,
I'd be interested in what Charleston Water is considering to include specifically for the linear assets. At a minimum, I would think a standardized cost should include current material and local labour rates, but are you also including depth of pipe and the associated amount of excavation required as well as some sort of percentage for Mob and Demob? My thinking is yes, one should ... but in a sense is it logical to consider the linear assets replacement value as if they were constructed in a greenfield environment or so you go a step further and consider the replacement costs factors associated with replacement of the linear assets currently in service.
This is not something we have started here yet in terms of standardization, but it is on our radar and various Departments have come up with replacement costs of various asset types previously. Replacement cost unit of measure data for linear assets should be available through past and recent procurements, filling in the gaps from other sources.
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Geoff Brown, P.Eng.
Manager, Corporate Asset Management Branch
City of Regina
Regina, SK CANADA
Original Message:
Sent: 28 September 2020 13:11
From: Earl DuPriest
Subject: How are you valuing assets?
Hi Everyone,
Yes, I am replying to myself and that is definitely a little weird. However, I wanted to provide a quick update for everyone's sake to demonstrate the effectiveness of this forum as a "go to" for AM problem solving.
Although many of y'all are still being shy, I have received three email replies to this post with a phenomenal amount of very helpful information and some great industry contacts. Thank you very much to all that contributed!!
Having been a long time "Ask Your Mates" (Australian equivalent) forum user, I can attest to the great benefits of an industry working together to solve AM problems.
So quit being so shy, step on to the dance floor, and lets all solve some AM problems together!! : )
Regards,
Earl DuPriest
Asset Management Program Manager
Charleston Water System
103 St. Philip Street | Charleston, SC 29403
Tel: 843-727-7202
Mob: 843-214-4310E: dupriester@charlestoncpw.com
Original Message:
Sent: 25 September 2020 16:59
From: Earl DuPriest
Subject: How are you valuing assets?
Hi Everyone,
Charleston Water System is currently undertaking a project, the Asset Valuation Project, resulting from of our Strategic Asset Management Plan. It is a phased project that will standardize how we value linear, plant, and facilities assets. The intention is for this to be a recurring project that coincides with our service rates study every 4-5 years. We have a pretty good handle on things (last words) and the project is really gaining some steam.
I am really interested if any other municipalities, utilities, or local governments out there are doing something similar? If you are, I would love to hear about it! Don't be shy y'all!! Thank you in advance : )
Regards,
Earl DuPriest
Asset Management Program Manager
Charleston Water System
103 St. Philip Street | Charleston, SC 29403
Tel: 843-727-7202
Mob: 843-214-4310
E: dupriester@charlestoncpw.com
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Earl DuPriest
CWS
Charleston SC
United States
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