Bob Schneider & Kelly Green
Michigan Department of Environmental
Quality
Revolving Loan Section
Asset Management Plan (AMP)
1.
2.
3.
4.
5.
Asset Inventory
Critical Assets
Level of Service
O&M Strategies
Capital Improvement Planning
Asset Management
Community
Water Supplies
Serving 
Publicly Owned CWS
>1,000
<=1,000
Privately Owned CWS
>1,000
<=1,000
n/a
n/a
Rule 1606
Capital
Improvements
Plan
CIP developed by 1/1/2016
Propose CIP
developed by
1/1/2018
Rule 1606 Asset
Management
Program
Propose AMP
developed by
1/1/2018
Propose AMP
developed by
1/1/2018
n/a
AM Provision in Permits
 Proposed AM Permit Language has been drafted to be
included in NPDES permits for some municipal
systems – “Operation, Maintenance &
Replacement/Asset Management”
 First up: Detroit Water and Sewerage Department
(DWSD) – Current Draft Permit Includes AM
Provision
 Then: All Major Municipals reissued in FY13 and the
remainder over the next cycle (5 years)
 After that: “Significant” Municipal Minors
DEQ - Asset Management
4
Proposed AM Permit Language
 Permit Language Requires an Approvable AM
Program to address:
 Staffing
 Mapping Collection System
 Inventory and Assessment of Fixed Assets
 Budget and Rate Sufficiency
 Annual Report
DEQ - Asset Management
5
SAW Expectations
•
•
•
•
Funds can be used to address any or all of the 5 AMP
components; however after the 3 year grant period the
final product is a complete and approvable AMP
covering all 5 components.
The applicant will need to certify that all grant activities
have been completed at the end of three years.
For wastewater systems the applicant must demonstrate
significant progress towards funding the AMP.
A stormwater funding structure is not required however
an analysis of the costs to maintain the system and
support the AMP is required.
If the wastewater AMP identifies a gap in the current
revenue needs to meet expenses, then significant
progress must be made toward achieving the
funding structure necessary to operate the system.
Significant progress is defined as a 5-year plan to
eliminate the gap with a minimum initial rate
increase to close at least 10 percent of the
funding gap. The first rate increase must be
implemented within three years of the executed
grant.
SAW/NPDES Interface
 Under the SAW grant the asset analysis can involve grouping of asset types, i.e. 50
manholes. Under the NPDES asset management requirements DEQ will require a
detailed asset analysis, i.e. manhole 1, manhole 2…. This will have to be done in 1 year for
WWTP assets and 3 years for collection system assets.
 For Majors, those with discharges greater than 1 MGD, when the NPDES comes up for
renewal the NPDES asset management requirements take effect. NPDES requirements
will supersede the SAW asset management requirements. So for example if you get a
grant in 2013 and your NPDES permit comes up for renewal in 2015, you can begin with a
broad asset analysis in 2014 but in 2015 the NPDES permit requirement for a detailed
analysis will come into effect.
 For Minors, it is understood that when their NPDES permit comes up for renewal, asset
management will be a part of that permit, however the implementation schedule in the
permit will follow that of SAW. If the applicant does not have a detailed asset analysis,
the timeframe for completing that requirement will be negotiated with the Permits
Section.
Asset Inventory
Table 1
Directions
A. List assets
B. Enter asset information
C. To add more assets use insert function and add rows then copy first asset row to new rows to transfer
formulas
D. Enter information in highlighed cells
E. Remaining cells will calculate automatically.
A
Source Assets
B
C
D
E
F
Material Location Manufacturer Original Cost Replacement Cost
G
H
I
J
K
L
Remaining Useful
Likeliness of Consequence
Life in Years
Condition Redundancy
Failure
of Failure
Criticality Factor
well #1 pump
0
Enter asset
0
0
5
5
25
0
Enter asset
0
0
Enter asset
0
0
Enter asset
0
0
Enter asset
0
0
Enter asset
0
0
If Criticality Factor is greater than 16 cell will turn RED
If Criticality Factor is greater than 16
A
Treatment Assets
B
C
D
E
F
Material Location Manufacturer Original Cost Replacement Cost
G
H
I
J
add to CIP table
K
L
Remaining Useful
Likeliness of Consequence
Life in Years
Condition Redundancy
Failure
of Failure
Criticality Factor
chlorinator
0
Enter asset
0
4
5
20
Enter asset
0
Enter asset
0
2
3
6
Enter asset
0
4
4
16
Enter asset
0
5
5
25
Enter asset
0
0
0
0
If Criticality Factor is greater than 16 cell will turn RED
If Criticality Factor is greater than 16
add to CIP table
American Iron & Steel requirement
 For DWRF and SRF funded projects
 Beginning January 2014
 State will have ongoing compliance reviews
 Onsite visit
 Review of compliance documentation
 Photographs
 Follow-up letter
State Revolving Fund Changes
State Revolving Fund - SRF
 Low interest loan funds to municipalities to plan,
design, and build water pollution control projects
 Interest rates for loans are set below market rates each
year
 Projects on publicly owned sites
 $4,372,430,000 in loans since 1988 in Michigan
Architectural/Engineering
Procurement - QBS
 Applicant issues a RFQ based on scope of work
 RFQ must be publicly advertised
 May choose to send RFQ to specific firms
 Statement of qualifications are evaluated
 Firms are ranked
 Discussions must be conducted with no fewer than
three firms
 Cost can not be a factor when ranking firms
Architectural/Engineering
Procurement
 Applies to all A/E services for SRF projects executed after 10/1/2014
Project Planning
Design
Surveying
Mapping
Engineering
Construction Management
Project Management
Feasibility Studies
 Must be used by all applicants regardless of longstanding relationships with
specific A/E firms
 Not required if work is done in-house or not included in SRF loan
QBS Certification
 Must attach the RFQ advertisement
 Must list all firms that responded
 If less than 3 firms must describe efforts taken to solicit
 Certification Form will be submitted with the Part III
application.
 Form is still required if QBS does not apply
Fiscal Sustainability Plans
 Applies to all projects that include repair, replacement, or




expansion
Does NOT apply to NPS or construction of new treatment
works projects
SRF projects with project plans submitted after Oct. 1, 2014
must comply
Applicants must self-certify they are complying or are
exempt
Not required to be a stand-alone document, info can be
located in various documents and/or databases.
FSP Minimum Requirements
 Can be project based
 Inventory of critical assets
 Evaluation of the condition and performance of inventoried assets
 Financial plan for maintaining, repairing/replacing assets
 Certification that the recipient has evaluated and will be implementing
water and energy conservation efforts as part of the plan
Loan Terms and Rates
 20 and 30 year loans
 Interest rates for loans may differ
 Dependent on Useful Life of project assets
 Only disadvantaged communities eligible for 30
year loan (similar to DWRF)
Useful Life
 Determination is completed by the engineer and
included in the project plan
 May use weighted average
 For projects involving a variety of components
 Equipment with varying useful life estimates
 Average must not be less than 20 yrs for typical
loan, not less than 30 yrs for disadvantaged loan
Stay in the Know
 Updated Guidance and Documents
 GovDelivery
www.Michigan.gov/drinkingwaterrevolvingfund
www.Michigan.gov/cleanwaterrevolvingfund
Michigan Department of Environmental Quality
Revolving Loan Section
517-284-5433
Bob Schneider 517-388-6466
schneiderR@michigan.gov
Kelly Green 517-284-5409
greenk1@michigan.gov