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Asset Management, A Wise Investment

March 18, 2016

In order for Mount Pleasant Waterworks (MPW) to provide reliable drinking water and wastewater treatment our assets must work 24 hours per day, seven days per week, 365 days per year. For those assets to provide reliable service they must be renewed or replaced before they fail. This is why MPW has what we call an Asset Management Program.

The goal of an Asset Management Program is maintain a desired level of service at the lowest life cycle cost. You can define asset management many ways, but the bottom line is providing reliable service through assets to meet our customers and the regulators expectations and requirements.

In the 1990s and 2000s, many capital dollars were spent on growing our system. Now that it is older, we are spending the money to maintain the system or what we call- renew and replace. We are managing our assets to keep them in good condition- doing what we need them to do to keep the system reliable.

Developers contribute assets as part of their subdivisions. While MPW does not pay the developers for these assets, we do accept the liability for the long-term renewal and replacement cost. There are also a number of assets that MPW pays for. All assets become a shared liability.

MPW assets include 4 water treatment plants, over 500 miles of water lines, over 3,000 fire hydrants, 2 wastewater treatment plants, over 450 miles of wastewater lines, and 160 pump stations. These are some of our larger assets, but when you break it down MPW has over 500,000 discreet assets.

The original cost of these assets was $440,000,000, but if the entire system had to be replaced today it would cost $1.5 billion. This is why proper asset management is so important, who wants to pay for a total replacement!

Based on the replacement cost, our total depreciation will be around $38 million per year. Our goal is to reinvest a sufficient amount to keep the system reliable. Over the next 5 years that investment will be about $18.6 million per year. As assets continue to depreciate our investments must rise.

Because these are publically owned assets, they are owned by all the customers. So, funding for renewing and replacing these assets come directly from our customers. Asset management is just like owning a car, you as the owner must pay for the operational costs like gas and oil, but additionally as the tires wear out they need replacing or if you need a tune up that is a renewal. It is the same with publically owned utilities, customers as owners must share equally in the cost of keeping the system reliable. Otherwise you might get left on the side of the road.

Much like your family budgets for renewal and replacement costs for your home and car, MPW plans a long-term renewal and replacement plan for the publically owned assets.

The plan will provide necessary upgrades to the system with a projected budget of $18.6 million per year. That means, through your monthly water and wastewater bill, each of you will contribute to the $18.6 million budget annually as an investment in your publically owned water and wastewater system.

Some things improve with age, water and wastewater pipes, pumps, and plants are not among those. MPW’s Capital Improvement Plan and Asset Management Program will bring upgrades to the miles of pipes, pumps, and water and wastewater treatment plants that   provide   you   high   quality   drinking   water   and   wastewater   services.

Your home’s water bill will remain among the lowest in Charleston County. Improved infrastructure will lead to greater efficiency and reliability. All for just pennies more a day, our water is worth it.

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