10-Year Anniversary Series: Asset Management and Finance as Major Goals in Jersey Water Works Action Agenda
Photo courtesy of New Jersey Future.
INTRODUCTION
Nature provides us with water, but it takes an invisible network of pipes, pumps, and infrastructure operated by water systems to enable us to use it. For water systems to operate efficiently and effectively, proactive asset management is essential when managing the network of pipes, pumps, and treatment plants. This is why the Jersey Water Works collaborative, early on in its inception, identified asset management and finance as major goals in its action agenda. The collaborative emphasizes the importance of establishing effective and financially sustainable systems that allow communities to maintain and improve their drinking water, wastewater, and stormwater infrastructure. This ensures the delivery of quality water services that meet community needs. With adequate and affordable operating budgets and capital investment, these systems can function efficiently and remain in good repair.
JWW has served as an organized network that addresses emerging issues in water infrastructure and has been highly successful in its first 10 years of existence. Recommendations from JWW reports have informed state legislation and increased awareness, helping more people understand the importance of asset management and the need for continuous funding increases to meet the demands of transforming an aging water system. This mini-report is part of the JWW 10-year anniversary series and outlines the work of the JWW Asset Management and Finance committee during this past decade.
“Water supply, wastewater, and stormwater utilities provide critical services to developed areas throughout New Jersey. These services rely on both physical assets and well-trained personnel. Asset management is the systematic approach utilities use to ensure that their system delivers the optimum level of service through sufficient investment in, and planned maintenance of, the system, and in a manner that minimizes what is known as life-cycle costs – i.e., the assets’ costs over their full lifespan.”¹
WHAT IS ASSET MANAGEMENT?
According to the New Jersey Department of Environmental Protection,
“Asset Management is a process to ensure sufficient investment in planned maintenance, needed repair, replacement, and upgrade of the physical components of a drinking water or wastewater system. These physical components of the system infrastructure are considered assets.
To achieve effective asset management, a water system must assess the current state of their assets and have a program in place to prioritize investment. Often, the prioritization is done through an Asset Management Program and documented in an Asset Management Plan. An Asset Management Plan incorporates detailed asset inventories, operation and maintenance tasks, and a long-range financial planning strategy to ensure that annual revenue reserves and reinvestment are sufficient to facilitate the long-term viability of the system. The five major, generally recognized components of asset management are:
- Performing an inventory and condition assessment of the system’s assets
- Defining the level of service goals
- Prioritizing assets based on criticality and business risk exposure
- Establishing life cycle costs
- Developing a long-term funding strategy
Source: Asset Management Policy Program, Renewing New Jersey’s Water Infrastructure
In the pursuit of sustainable and resilient water infrastructure, the members of the collaborative established a set of strategic goals aimed at enhancing the management, funding, and operation of essential water systems. These objectives underline the importance of maintaining infrastructure, ensuring wise financial management, promoting equitable revenue generation, and advocating for robust government support. The following goals reflect this commitment:
1.1 Maintaining Systems Utilities and departments maintain drinking water, wastewater and stormwater pipes, and other water infrastructure assets to efficiently and effectively reduce leakage, emergency repairs, and other impacts. ‘
1.2 Wise Management and Spending State requirements, metrics, and incentives, along with utility policies, ensure that utilities and departments implement water infrastructure asset management programs fully, with sufficient operating budgets and capital investments to deliver required and desired levels of service while minimizing life-cycle costs.
1.3 Adequate and Fair Revenue Utilities and local governments raise the funds required to make appropriate capital investments and ensure proper operation and maintenance in a cost-effective, equitable manner that treats ratepayers fairly. Programs are authorized and established to ensure affordability. Stormwater utilities and stormwater fees are authorized statewide and widely implemented.
1.4 Robust Government Funding Initiatives Funding for existing federal water infrastructure financing programs is maintained or increased. New state funding for water infrastructure programs advance Jersey Water Works’ goals.
Graphic created by Shweta Raman. View full image here.
MILESTONES
In 2016, the Best Practices Committee developed indicators, measures, and targets for asset management of drinking water, wastewater, and stormwater management systems. This document served as a foundation for legislative testimony and recommendations by JWW members in 2016 and 2017 regarding the Water Quality Accountability Act of 2017. The committee also interacted with NJDEP regarding asset management planning requirements and with Sustainable Jersey regarding asset management actions. The Finance Committee was also active in 2016, regarding an analysis of how some water and sewer infrastructure projects supported by Water Bank funding can reduce costs per volume.
In 2017 and 2018, the individual committees and the new Asset Management and Finance committee continued work on recommending metrics to the NJDEP, hosting peer reviews of financing programs, and publishing in-depth case studies and surveys of state-level initiatives to fund water infrastructure. Steering committee members and backbone staff worked to articulate a strong background of the issue in the appendix of the Our Water Transformed: An Action Agenda for New Jersey’s Water Infrastructure report. Through a project involving Rutgers University and New Jersey Future, the first of three reports on affordability was published in 2018, reviewing methodologies and suggesting approaches for New Jersey regarding the affordability of water and sewer services to households.
The years 2019 and 2020 also saw the committee’s involvement in crucial activities such as providing recommendations to the Governor’s office, releasing white papers, and conducting studies on capital investment by drinking water utilities. Specifically, the committee published a white paper on policy options for improving water and wastewater affordability for low-income customers. They also conducted a study of capital investment by drinking water utilities statewide. Most importantly, they sent recommendations to NJDEP for Water Quality Accountability Act reporting in partnership with the American Water Works Association (AWWA). Also, in 2020, a white paper on New Jersey Assessment Methodology for Water and Sewer Utility Costs was released, leading to a proposed methodology.
In 2020, during the pandemic, the committee sent recommendations to the Governor’s office regarding water access and affordability. They also released a draft consensus methodology for measuring water affordability and identified at-risk communities. In addition, they met with NJDEP to recommend ways to focus CSO investments in environmental justice communities as a joint exploration with the CSO Committee.
In 2021, the committee sent a letter to the governor’s office, the Department of Community Affairs, the Board of Public Utilities, and other pertinent stakeholders, presenting recommendations for the establishment of a state low-income water assistance program. The Affordability Report (phase 2) was published and disseminated, highlighting a new methodology for assessing the affordability of water and sewer utility expenses in New Jersey. The committee created a list of resources to aid in the recent lead service line legislation for replacement and implementation. Dedicated efforts were made to broaden the diversity of the committee by engaging in outreach initiatives to address disparities and augment the committee’s racial, gender, and sectoral composition. The final of three reports on affordability, A New Jersey Affordability Methodology and Assessment for Drinking Water and Sewer Utility Costs, was released in 2021, authored by Dan Van Abs, PhD, of Rutgers University, and Tim Evans and Kimberley Irby by New Jersey Future.
In 2022, the committee provided feedback on the proposed Clean Water SRF and Drinking Water SRF Intended Use Plans for SFY 2023. Additionally, they authored a blog addressing the Affordability of Residential Drinking Water and Sewer Utility Services. A webinar on the Low Income Household Water Assistance Program was conducted in collaboration with the NJ Department of Community Affairs, Natural Resources Defense Council, and the NJ Board of Public Authorities. Furthermore, the committee compiled and shared an example for Requests for Proposals for Stormwater Utility Feasibility Studies intended for municipal application. They also developed and shared a model Stormwater Utility outreach digital toolkit for municipal use.
In 2023, the committee made significant strides by expanding information about available funding through technical assistance webinars, blogs, social media, and newsletters, ultimately resulting in the disbursement of all funds awarded by the DCA. Additionally, they organized five town hall-style Stormwater Utility Information Forums to encourage municipalities to consider creating stormwater utilities. The forums were attended by over 70 participants. The committee continued to raise awareness about water affordability and assistance programs via presentations at the NJ Water Environment Association (NJWEA) conference and by creating social media content, publishing a blog, and sharing information via a newsletter on the Low Income Household Water Assistance Program (LIHWAP). They also provided feedback via comments on Proposed Clean Water SRF and Drinking Water SRF Intended Use Plans for SFY2024.
In 2024, the committee worked to influence policy decisions connected to JWW’s shared goals, reviewed and developed comments on the proposed Clean Water and Drinking Water State Revolving Fund Year SRFY 25 Intended Use Plans, Water Quality Accountability Act Proposed rules amendments, and repeals to the Safe Drinking Water Act Rules (N.J.A.C. 7:10) and Water Supply Allocation Permit Rules (N.J.A.C. 7:19). They also educated legislative staff and decision-makers about congressionally directed funding (CDF), formerly known as earmarks, by sharing information via letters, newsletters, and social media. Backbone staff developed a funding tracking list to provide financing resources available for water infrastructure projects in New Jersey.
JWW has been instrumental in building bridges between stakeholders, elevating issues on affordability and infrastructure upgrades, and advocating for robust financing solutions that all water systems can access. Strong asset management and financial practices build resiliency in the invisible network of pipes, pumps, and infrastructure that provides us with water 24/7 and is crucial to our communities’ health and well-being. Communities can play a role by getting to know your water and wastewater system better. Go to Jersey WaterCheck to learn how your water or wastewater system is doing. Jersey Water Works (JWW) created this dashboard to tell the story of our state’s water and wastewater infrastructure needs.
To learn more about the Asset Management and Finance Committee, click here:
https://www.jerseywaterworks.org/committees/asset-management-and-finance-committee/
¹ “Our Water Transformed: An Action Agenda for New Jersey’s Water Infrastructure.” Jersey Water Works, 20 March 2017, https://cms.jerseywaterworks.org/wp-content/uploads/2017/11/Asset-Management-Background-Materials-11-28-2017.pdf
