Chapter 3745-87 | Asset Management Program

Rule 3745-87-01 | Asset management definitions.

• Effective: April 11, 2025
• Promulgated Under: 119.03

Except as otherwise noted, the definitions in rule 3745-81-01 of the Administrative Code apply to this chapter.

(A)

(1) "Asset" means a component of a facility with an independent physical and functional identity and age as defined by the water system. This includes items of substantial value and critical to the delivery of potable water.

(2) "Asset management program" means the development and documentation of a program of activities that demonstrates the managerial, technical, and financial capability of a public water system, to manage physical infrastructure assets in order to maintain levels of service to customers, the community and the environment, while considering costs and residual asset risks.

(3) "Asset management screening" (formerly capability screening) means an evaluation of the technical, managerial, and financial capability of a public water system.

(B) "Break" means physical damage to a pipe, valve, hydrant, or other appurtenance that results in a disruption.

(C)

(1) "Capital improvement plan" or "CIP" means a financial plan based on a planning period for all individual capital improvement projects.

(2) "Capital improvement project" means a unique construction project that aims to install, repair, rehabilitate, replace, or expand existing infrastructure, not including regularly incurred operation and maintenance costs.

(3) "Continuity plan" means a written plan developed through succession planning that establishes the public water system's plan in the event of the loss of critical personnel. Continuity plan criteria may include, but is not limited to, cross-training existing critical personnel, timeframes and detailed steps for hiring replacement personnel, and position descriptions for critical personnel.

(4) "Critical infrastructure" means assets, systems and networks, whether physical or virtual, that are vital for a public water system to operate, or whose inoperability would have a debilitating effect on the ability of the water system to operate as intended or would create a public health risk.

(5) "Criticality" is a measure of the importance of an asset, based on potential consequences that would result if the asset were to fail, including financial, environmental, and social consequences.

(D) [Reserved.]

(E) [Reserved.]

(F) [Reserved.]

(G) [Reserved.]

(H) "Horizontal/linear asset" means assets which may be configured or networked for the purpose of moving materials or services from one place to another. Also known as "below-ground asset." In the context of the water industry, this includes pipeline assets for water distribution, collection, and transmission.

(I) [Reserved.]

(J) [Reserved.]

(K) [Reserved.]

(L) "Leak" means an unintended hole or crack in a transmission or distribution pipeline, valve, hydrant, appurtenance, or service connection that continuously loses water but that does not result in a disruption.

(M) "Metric" means a qualitative or quantitative measure of actual performance against a standard or other target.

(N)

(1) "Non-publicly owned" means public water systems not owned by a governmental entity.

(2) "Non-revenue water" means the distributed volume of water that is not reflected in customer billings.

(O) "Operating ratio" means a ratio comparing the system's operating expenses divided by the system's operating revenue (or net sales).

(P)

(1) "Pro-forma" means projected or estimated financial statement that attempts to present a reasonably accurate idea of what a water system's financial situation would be if the present trends continue or certain assumptions hold true.

(2) "Publicly owned" means public water systems owned by a governmental entity.

(Q) [Reserved.]

(R) "Reserve funds" means funds used for addressing expense situations of a capital nature that were not expected nor anticipated.

(S) "Succession planning" means the process for identifying and developing new or current personnel who can replace personnel when vacancies occur.

(T) [Reserved.]

(U) "Useful life" means the average amount of time in years, that an asset is estimated to function when installed.

(V) "Vertical asset" means an asset within a building or facility often comprised of multiple components, also known as an above-ground asset. In the context of the water industry, this typically refers to assets within pump stations, treatment plants, and may include other facilities, such as storage facilities.

(W) [Reserved.]

(X) [Reserved]

(Y) [Reserved]

(Z) [Reserved]

(AA) Referenced materials. This chapter includes references to certain subject matter or materials. The text of the referenced materials is not included in the rules contained in this chapter. Information on the availability of the referenced materials as well as the date of and the particular edition or version of the material is included in this rule. For materials subject to change, only the specific version specified in this rule are referenced. Material is referenced as it exists on the effective date of this rule. Except for subsequent annual publication of existing (unmodified) Code of Federal Regulation compilations, any amendment or revision to a referenced document is not referenced unless and until this rule has been amended to specify the new dates.

(1) Availability. The referenced materials are available as follows:

(a) "American National Standards/American Water Works Association" (ANSI/AWWA). A copy may be obtained from "AWWA Bookstore, 6666 W. Quincy Avenue, Denver, CO, 80235," [phone], www.awwa.org.

(b) Ohio EPA technical documents. These documents are generally available in most Ohio public libraries and the state library of Ohio. Information and copies may be obtained by writing to "Division of Drinking and Ground Waters, Lazarus Government Center, P.O. Box 1049, Columbus, OH" 43216-1049.

(2) Referenced materials:

(a) "ANSI/AWWA, Utility Benchmark Performance Indicators," 2022.

(b) "AWWA Asset Management Definitions Guidebook" https://www.awwa.org/Portals/0/AWWA/ETS/Resources/AMGuidebook.pdf?ver=2018-12-13-100101-887. (David DiCesare, AWWA Ohio section asset management committee)

(c) "Guidelines for Design of Small Public Water Systems." https://dam.assets.ohio.gov/image/upload/epa.ohio.gov/Portals/28/documents/engineering/greenbook.pdf (2023).

(d) "Planning and Design Criteria for Establishing Approved Capacity for: 1) Surface Water And Ground Water Supply Sources, 2) Drinking Water Treatment Plants (WTPs), and 3) Source/WTP Systems." https://dam.assets.ohio.gov/image/upload/epa.ohio.gov/Portals/28/documents/engineering/ApprovedCapacity.pdf (2010).

Last updated April 11, 2025 at 11:32 AM

Supplemental Information

Authorized By: 6109.04
Amplifies: 6109.24
Five Year Review Date: 4/11/2030
Prior Effective Dates: 10/1/1999

Rule 3745-87-02 | Applicability and general requirements.

• Effective: April 11, 2025
• Promulgated Under: 119.03

In order to ensure the long-term viability of public water systems, community and nontransient noncommunity public water systems shall demonstrate the managerial, technical, and financial capability of the public water system to comply with this chapter and rules adopted thereunder. Demonstration of capability shall be made through a written description of an asset management program that is acceptable to the director.

(A) Community and nontransient noncommunity public water systems shall submit a written description of the public water system's asset management program description and supporting documents in accordance with the following:

(1) New community and nontransient noncommunity public water systems shall submit an outline describing what the asset management program will entail prior to operation. Thereafter, the public water system shall submit a written description and supporting documents upon request of the director in accordance with rule 3745-87-04 of the Administrative Code and in accordance with any schedule prescribed by the director.

(2) For existing community and nontransient noncommunity public water systems other than those receiving a loan, the director may require public water systems to make the asset management program available for review based on enforcement proceedings, compliance history including violations and deficiencies identified as part of the sanitary survey or limited scope site visits, or on the results of an asset management screening. A written description of the asset management program meeting all of the requirements of this rule, shall be submitted in accordance with a schedule accepted by the director.

(B) Public water systems applying for a water supply revolving loan account (WSRLA) loan shall demonstrate an acceptable asset management program prior to receiving a WSRLA loan. The asset management program shall address any deficiencies noted in an asset management screening.

(C) A written description of an asset management program and all supporting documents provided to the director by a public water system that demonstrates the asset management program shall be treated as an infrastructure and security record and be exempt from the public record provisions of sections 149.43 and 149.433 of the Revised Code and is not subject to mandatory release or disclosure under that chapter.

(D) Within five days of a request by the agency, copies of asset management related materials shall be submitted in a format acceptable to the agency.

Last updated April 11, 2025 at 11:33 AM

Supplemental Information

Authorized By: 6109.04
Amplifies: 6109.24
Five Year Review Date: 4/11/2030
Prior Effective Dates: 10/1/1999, 11/8/2018

Rule 3745-87-03 | Contents of an asset management program.

• Effective: April 11, 2025
• Promulgated Under: 119.03

(A) In order to demonstrate adequate managerial capacity, personnel commitments that are needed to provide for effective management, operation and financials of community and nontransient noncommunity public water systems shall be proven with documentation. The asset management program shall include, but is not limited to, the following:

(1) Demonstration of ownership accountability, which includes the legal authority to take the measures necessary for construction, operation, and maintenance of the system, including maintaining staffing skills, resources, and prioritizing continuous improvements of the water system.

(2) Demonstration that the owner has committed to proper operation and management of the public water system in accordance with agency 3745 of the Administrative Code, as applicable.

(3) Demonstration to ensure continued, proper operation of the public water system through succession planning, such as having a continuity plan in place for critical personnel.

(4) The following information from the owner or operator of the public water system:

(a) A brief description of the water system, including major components, source type, number of service connections, and number and type of customers.

(b) An operating plan defining the tasks to be performed in managing and operating the public water system, which consists of at least the following:

(i) A high-level table of organization that identifies critical personnel including the operator, manager and supervisor responsible for operations, maintenance, treatment, and distribution. The table shall include clearly defined job classifications/titles and the individuals within those job classifications/titles and include differentiation between a property owner and business owner or lessee, if applicable.

(ii) The director may require fiscal and managerial training for water systems governing bodies and responsible management, and documentation of governing bodies and employees attending appropriate water system fiscal and management training.

(iii) An operation and maintenance program as described in paragraph (B)(4) of this rule.

(c) Demonstration of the owner's ability to address violations of applicable portions of the Revised Code and the Administrative Code, that includes an explanation of how the water system will establish and maintain effective communications and relationships between the water systems management, its customers, professional service providers and any applicable regulatory agencies.

(d) An inventory of external contacts and resources necessary for proper operation of the system, including a description of how the contacts and resources will be effectively utilized.

(e) Description of internal contracting and purchasing procedures to accomplish routine and emergency repairs and replacements.

(B) In order to demonstrate adequate technical capacity, the asset management program shall include, but is not limited to, the following:

(1) Schematic of water source, treatment, storage and distribution system.

(2) Inventory of assets, including the following:

(a) Asset name.

(b) Known purchase or installation date, or estimated age of asset if different.

(c) Status of asset (e.g. in use, available for use, needs repaired, etc.) as identified by the water system.

(d) Locations of assets, including up-to-date maps.

(3) Evaluation of assets, including the following:

(a) Condition (e.g. excellent, good, fair, poor, needs replacement).

(b) History of maintenance and repair.

(c) Estimated remaining useful life based upon condition and performance

(d) A prioritization of assets based on criticality and condition assessment.

(4) Operation and maintenance programs.

(a) Standard operating procedures for daily operation of the facility and use of system equipment.

(b) Maintenance schedules or supporting documentation of the maintenance performed for each of the following as applicable:

(i) Wells, all raw-water reservoirs and intakes.

(ii) Pump stations.

(iii) Electrical equipment, controls, and auxiliary power.

(iv) Water treatment facilities.

(v) Distribution system components, including tanks, hydrants and valves.

(c) Demonstration of an adequate maintenance log.

(5) Emergency preparedness and contingency planning program.

(a) Community public water systems shall prepare a written contingency plan meeting the requirements of Chapter 3745-85 of the Administrative Code.

(b) Nontransient noncommunity public water systems shall complete the approved, most-current, asset management program template to comply with contingency planning requirements. Nontransient noncommunity public water systems may create an asset management program using an alternative format, provided the format includes no less than the required information in the agency's asset management program template.

(6) Source water assessment and protection plan review.

(a) Community and nontransient noncommunity public water systems shall review the source water assessment report annually to determine if revisions are necessary. If revisions are deemed necessary, the public water system shall submit the proposed revisions to the agency.

(b) Community and nontransient noncommunity public water systems with an endorsed drinking water source protection plan shall review the protection plan in accordance with the review frequency stated in the plan and revise the plan as necessary. If there is no specified review schedule in the protection plan, the system shall review the plan no less than every three years and revise as necessary.

(c) Community and nontransient noncommunity public water systems with a drinking water source protection plan checklist that has been accepted by the agency shall review and update the checklist every five years.

(d) A revised drinking water source protection plan or checklist shall be submitted to the agency within sixty days of making the revisions.

(7) Approved capacity projections, including.

(a) Written approved capacities of small public water systems using only ground water (such as factories, mobile home parks, office buildings, restaurants, condominiums, and the like) will be established in accordance with Ohio EPA's "Guidelines for Design of Small Public Water Systems." Written approved capacity projections for all other water systems shall meet the requirements of Ohio EPA's "Planning and Design Criteria for Establishing Approved Capacity for: 1) Surface Water And Ground Water Supply Sources, 2) Drinking Water Treatment Plants (WTPs), and 3) Source/WTP Systems."

(b) Identification of infrastructure needed to meet written approved capacity projections.

(8) Criteria and timelines for infrastructure rehabilitation and replacement.

(a) Identification of, and a schedule for needed repair, rehabilitation, replacement and expansion of existing assets and prioritized to address the most critical needs.

(b) Identification of funds that will be collected or set aside for repair, rehabilitation, replacement or expansion of existing assets.

(9) Capital improvement plan (CIP).

(a) A CIP shall include annual projections for a three to five-year planning period with detailed expenditures in each of those time frames.

(b) The projects should be listed by the year in which they are planned and include, at a minimum, the following information:

(i) Description and reasoning for the project.

(ii) Estimate of project cost, including engineering design and construction.

(iii) Funding sources.

(c) A description and estimated cost of significant projects for the next five to twenty years.

(C) In order to demonstrate adequate financial capacity, community and nontransient noncommunity water systems shall include a long-term funding strategy to support asset management plan implementation, including, but not limited to, the identification of sources and amounts of funds to finance the needed repair, rehabilitation, replacement or expansion of assets, including debt service.

(1) New publicly owned public water systems shall include a five-year pro forma statement of the next five years of operation, which includes the following:

(a) An income statement, balance sheet, and statement of cash flow pertaining to the water operating fund.

(b) An amortization schedule of all water system debt including terms of all outstanding debt.

(c) Capitalization terms of long-term debt anticipated to be incurred in the next five years of operation.

(d) The current water rate ordinance in effect including any planned periodic increases of the rate, as applicable.

(e) Documentation that water rate evaluations are adequate for CIP to be developed as required by paragraph (B)(9) of this rule and conducted at a minimum every five years.

(f) Documentation of all customers being billed for water usage, as applicable.

(g) Any existing information demonstrating bond or credit rating.

(2) Existing publicly-owned public water systems shall include all of the following:

(a) All the items listed in paragraph (C)(1) of this rule.

(b) The most recent five years of annual financial reports, as required by section 117.38 of the Revised Code, or substantively equivalent documents which describe the performance of the owner and the water system.

(3) New non-publicly owned public water systems shall include all of the following:

(a) A demonstration of the cost of the water treatment components and the conveyance system including capitalization terms or lump sum debt retirement option if selected.

(b) A demonstration of an adequate budget and revenue sources to support the annual operation and maintenance costs of the system for the next five years of operation including the following:

(i) Cost of required level certified operator coverage.

(ii) Capitalization terms of anticipated long-term debt incurred in the next five years of operation.

(4) Existing non-publicly owned public water systems shall include all of the following:

(a) All the items shown in paragraph (C)(1) of this rule.

(b) Type of business organization and historical origination date; including the legal document establishing the corporate structure.

(c) The most recent five years of annual financial statement documentation which describe all assets, liabilities, income, expenditures, balances and equity of the water system.

[Comment: All referenced materials can be found in rule 3745-87-01 of the Administrative Code.]

Last updated April 11, 2025 at 11:33 AM

Supplemental Information

Authorized By: 6109.04
Amplifies: 6109.24
Five Year Review Date: 4/11/2030
Prior Effective Dates: 11/8/2018

Rule 3745-87-04 | Evaluation criteria.

• Effective: April 11, 2025
• Promulgated Under: 119.03

(A) A written description of the asset management program and all supporting documents shall be made available upon request by representatives of the director.

(B) The director may request a public water system to submit a written description of the public water system's asset management program. The public water system shall submit the written description within thirty days of the request.

(C) If a public water system's written description of the asset management program does not comply with the requirements of this chapter, the director may require the owner or operator to revise and resubmit the written description of the asset management program.

(D) The director may only grant acceptance of the asset management program at the time of review if the program meets the requirements set forth in this chapter.

Last updated April 11, 2025 at 11:33 AM

Supplemental Information

Authorized By: 6109.04
Amplifies: 6109.24
Five Year Review Date: 4/11/2030
Prior Effective Dates: 11/8/2018

Rule 3745-87-05 | Long-term implementation.

• Effective: April 11, 2025
• Promulgated Under: 119.03

(A) The water system shall annually review and update the asset management program.

(B) Metrics shall be kept onsite and available for review at the discretion of the director and be reviewed and documented annually by the public water system, unless otherwise required by the director. The following operational metrics will be required for the specified system type:

(1) Community public water systems.

(a) Operating ratio.

(b) Operating cost to produce water per service connection.

(c) Breaks per one-hundred miles of distribution pipe.

(d) Non-revenue water (percentage loss).

(e) Time spent on planned maintenance tasks per year and time spent on unplanned maintenance tasks per year for vertical assets.

(2) Nontransient noncommunity public water systems.

(a) Documentation of incidents where system pressure was not maintained in accordance with Chapter 3745-83 of the Administrative Code.

(b) Repair, rehabilitation or replacement tasks per year (emergency versus planned).

(c) Reserve funds.

(d) Number of days unable to serve water.

Last updated April 11, 2025 at 11:33 AM

Supplemental Information

Authorized By: 6109.04
Amplifies: 6109.24
Five Year Review Date: 4/11/2030