Sewer Main Relining Asset Management

We did similar things.... and I looked at it as maintenance and enter it as such.

But the best is talk to your company tax guy.

Thanks for the reply. The company tax guy and I are researching what others are doing, hence the multiple options. Ultimately, together we will determine how our system handles this based on accounting codes, engineering principals, capitalisation thresholds and so on. Just after alternate interpretations to consider.

That's a really interesting question. How would you treat it if you were replacing the pipes completely?

I would tend to treat the lining as maintenance, much like painting a building is.

I views also,... Unless it was a complete replacement... treating it a maintenance issue, depending on what you are maintenance, with maintenance, it can be grandfathered in. Especially if it has anything to do with environmental

Thanks, If replace pipes completely, then it's a new asset with the associated new material and replacement value and 80 years "useful life" for depreciation. Current supplier's indicate 50 year useful life after lining. Our GIS (Mapping) system and asset system can cope with lined pipebeing any of "maintenance" (Expensed in year of treatment), "Renewal" where the structural liner becomes the new asset and the host pipe is just part of the bedding and is disposed, or the intermediate where we recognise the host pipe with a nominated liner. Each option has some advantages. For instance, the final option means that our field crews "see" the pipe as host material and liner, so when they do have to dig there are no surprises.

Sorry for the lines running together, I'm typing this with paragraphs, but the preview keeps taking them away. (Have even logged off and back on again, but still doing that.)

Sorry for the lines running together, I'm typing this with paragraphs, but the preview keeps taking them away. (Have even logged off and back on again, but still doing that.)

I used to have that with my iPad, until they upgraded this site.

Otherwise I had to put in assci code from new lines

(from innocent Bystander in these sort of discussions)

One of the terms I haven't seen mentioned yet is Extend the Life of an Asset, in which case your investment can be (typically) capitalized, your liner will not work without the original asset, the liner will have a demonstrably shorter useful life than your original asset, and eventually you will be forced to dispose of the asset combination, unless new technology (like road resurfacing in the past few decades) allows you to replace the lining in situ, or the hydraulic needs of the enterprise exceed the pipe flow rating.

What you are doing is ''replacing-in-place'', and (hopefully) ''upgrading-in-kind''...

The Contract-Labor-and-Material is an up-front capital repair ''expense'', and also is an ''investment'' in (continued?) utility quality, hopefully for the full expected service-life of the sewer line, for (greater?) customer satisfaction...

Thus, the total newly-conditioned pipe-lining cost is an expense, in its' year of construction, while the original pipe is totally written-off, with zero salvage value...

If you dig up the old pipe, and put in a new pipe in its place, then you are not re-lining the old pipe, but you may garner a a salvage value that probably won't pay back enough to cover the cost of excavation, and probably won't be worth the removal effort...

If your (organisational accountants) allowed the original sewer line to be depreciated, then they should also allow the said replacement to be similarly depreciated, as they currently allow...

In theory, each element of infrastructure, such as a sewer line, should be managed as being budgeted to be replaced when reaching the end of each service life, at a value that includes inflation costs...

Consider buying, and using, your own video inspection equipment in order to more accurately define the necessary ''extents'' of future repairs...

Thanks for the feedback and opinions.

We already have four camera systems for "in house" evaluation and also contract inspection for 45km of our "at risk" lines each year for final and independent arbitration. This will give us a 20 year inspection cycle. (Yes, I've got just a little over 900km of sewer mains along with 220 pumping stations and rising mains.)

We do run depreciation schedules for each pipe and your suggestion about write-off for the host pipe and depreciating the liner cost/value over the new expected 50 year life is one of the options on the table.

We will be conforming to the relevant accounting codes in what we do.

We also perform what we call "spot repairs" up to 3m long, but they are understood by all to be an "expense" type activity with no concern over that interpretation.

This question was meant to relate to situations where we reline a complete pipe section from manhole to manhole. Usual reasons are root entry at multiple joints, fractured Vitreous Clay pipes or concrete with eroded aggregate or Asbestos cement with layers delaminating. Basically if we believe that intervention will be necessary before the next 20 year cycle, then we rehabilitate the line.

Yes, by all means, do follow all your applicable rules...

It sounds like the issue is (something like) how to classify a ''3m'' "spot repair'' as a ''construction'' cost, a ''repair'' cost, or a ''maintenance'' cost, and therefore, from which account to pay the money...

It depends on what your rules direct you to do, and how much money is available in the time-frame the (rehab) needs to get done...

To inhibit future root intrusion, would it be feasible to spray an acceptible (weedicide) into the specifically failing pipe joints, before relining?...

( ...Since you are charged with the ''care and feeding'' of such an extensive sewage system of 900km, 200 pumping stations, etc., thus, you are quite a bit more than ''just an Engineer''... )

Thanks,

The only issue relates to the capital nature of full length reline. Repairs are "expensed", even if there are three repairs in one line within a year.

As to the "just an engineer" it's a tongue in check shot at a former executive director who once told me at the annual performance reviews "you're just an engineer" after I'd saved a $3M per year expense. There was an organisational restructure underway and I was moved from deputy department head to senior engineer. I went home and watched a well known movie (Under Siege) about USS Missouri and someone who was "just a cook". I might not be in the same capacity as that portrayed individual, but each time I log on I am reminded that I value my personal worth regardless of what others may think. Like the crew on that boat, I also believe that it's not over until the last shot has been fired.

I became aware of CR4 at that time, through the equipment advertising that was in place at that time and decided to join. The avatar just "seemed right" at the time.

BTW, the team with me is also responsible for 1400km of water mains, five water treatment facilities and 16 sewer treatment facilities. I'm currently the bridge between the engineering functions and finance.

Real actors may be doing real acting, in real movies, but such movies are really just modern-day fairy tales, told on screen... (and some of them are very entertaining, but are still just fairy tales...)

What you're doing is real engineering management, in a sometimes all too real world...

Gooooooood work... (... and thanks for sharing such entertaining background info...)

The company accounting team decides best tax advantage of expenditure categorization...

We also rehabilitate sewer mains by lining. Spot repairs and non-structural liners are a maintenance expense. Structural liners are considered to add materially to the life of the asset. Since the new liner modifies the host pipe, our finance folks are modifying (a "reset") the asset with a new value, new expected life starting a new depreciation schedule. In concept, it is handled very similarly to how a building improvement, such as a new roof, is handled.

Thanks for this. What you have described is extremely close to the anticipated outcome and what we currently do.

There is some discussion about what happens to the written down value of the host pipe at that time. Whether it is accepted as a loss on installation of the liner, or whether it represents the value of the host pipe for the new "Useful Life" of the service provided by the tubular hole through the ground.

While my role is asset management (Condition assessment, lifecycle prediction, renewals forecasting and so on), it is me who actually performs those value "reset" activities that you mention. Your explanation of how your organisation handles such work is quite clear to me. THANKS.

There are a variety of tools on the market that can help you. A plumber's snake is a coiled cable or spring that rotates down the drain to dislodge whatever is stuck. Plumber's snakes and other types of augers are good for removing solid items and for reaching further into the sewer. However, they may be expensive to buy or rent, and may scratch ceramic. Flat tapes and sewer rods are long tools with a spearhead design which may reach up to 100 feet into your pipe. They also won't scratch your ceramic like an auger can. As the task is very complicated it is always recommended to opt sewer treatment company NJ help for repairing task.