USING GIS FOR ASSET MANAGEMENT AND FINANCE REPORTING
Abstract:Utility Companies can no longer operate as monopolies with rigidly defined service territories whose top priority is only to satisfy a handful of government regulators. In response to market pressures, utility companies are restructuring. The City of Safford (Arizona) believed, that if given the organizational freedom and the economic incentives of the private sector, it could out perform the private sector by operating more like a business. The result was Gila Resources, Inc., a solely owned subsidiary of the City.
The utility assets of the City were transferred to Gila Resources as a part of this separation. This prompted the need for a complete physical inventory of these assets. Gila Resources chose to use GIS to inventory the assets over a flat file database because it quickly integrates information with location, creating a “live” database with various attributing capabilities. The major costs would be that of the actual physical inventory. Gila Resources would have the advantages of GIS with little additional costs.
During the initial needs assessment, a few key features beyond the asset inventory were identified as integral parts of the project. They included infrastructure sustainability, reduced operating costs, asset management, better delivery of service at a lower cost, and financial reporting requirements.
Implementation of an enterprise-wide GIS with an asset management component provides Gila Resources with a unique vision of current infrastructure conditions and the required revenues needed for maintenance renewal. Our goal through the use of GIS is to provide proactive infrastructure renewal and community needs.
Gila Resources, Inc. provides water, wastewater, electric and gas services to 16,350 customers in its 100 square mile service area. Gila Resources hired the consulting firm of Global Systems Modeling to assist and direct the implementation of GIS. The physical inventory and the financial reporting phases were completed within the first year.
The challenges of the first phase included:
Capturing all utility assets within the GIS framework
Adding attribute information necessary to calculate current fixed asset value and to estimate future replacement costs
Implementing procedures to ensure GIS data would be updated as part of normal work activities
The capturing of water and sewer assets were particularly challenging because many of them were built by developers as a part of a subdivision and then turned over to the city. There was little historical data as to costs for these assets and many were not included in the financial reporting of the utility.
Gila Resources also chose to capture all assets (water, wastewater, natural gas and electric) in the physical inventory even though it was not a financial reporting requirement. This also proved to be a challenge because of the lack of data relating to install dates and material types due to the fact that some of the assets had been renewed.
All assets were noted with the source of the information attached to that asset. Algorithms were developed to populate cost data tables from known values. Using the attributes of the asset times the cost factor, and discounting for age using straight-line depreciation, produced the financial reports. An outside audit proved the validity of the financial reports. Only minor changes were required.
The next phase will involve the implementation of the software program CITY WORKS. This will provide the vehicle for maintaining the GIS database. CITY WORKS is work order driven and is linked to update assets as work is completed.
Document Type: Research Article
Publication date: 2003-01-01
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