Asset Investment Planning for a more Sustainable California
How you can play a pivotal role in shaping a sustainable future for California through responsible asset investment planning. Understand the intersection of multi-year planning and sustainability. This webinar will provide valuable insights and practical guidance for leveraging asset investment to drive positive change and create a more sustainable future.
Welcome, welcome, welcome. Thank you all for being here. As the introduction had mentioned, I am Matt Smith and now we have Ben Mueller as well. Considering it is the end of the fiscal year Thursday before we start a new year next week, thank you. And also to everybody that is in office. This week we sent out about, I think probably about 1300 invites or so and probably got about 200 or so bounce back saying, hey, I'm going to be on vacation through July 5th.
Wasn't anticipating people taking vacation this week, but absolutely so excited to have those that are in attendance join us. I promise you, it's going to be, you know, worth your time and you're going to get a lot of information, you know, from Ben and myself. And so, you know, we're going to talk about, you know, kind of the critical issue that affects all of us in asset investment planning, You know, a few housekeeping items in addition to what was already mentioned.
This is going to be a ongoing series. You know, the hope is, you know, this is our first one where we're going to talk about asset investment planning and how it pertains to California based sustainability goals and initiatives. But then over time, we already have two or three lined up clients in the future that are going to come and start sharing some best practices, some of the projects that they're working on.
So even those in attendance today, if you can't attend in the future, you know, please sign up. If you see another one, we're going to be doing those about quarterly or so. We're also going to have various polls throughout. I definitely would encourage people to answer some of those to the best of their ability. You know, it'll help us drive some of this conversation and some of this dialog for Ben and myself.
So with that being said, let's go ahead and get started with our first poll question. And it is, you know, what grade would you give your organization infrastructure? And this is based on, I would say, overall condition across various asset classes. You know, your capacity, your maintenance and your various infrastructure or categories. So just take about 30 seconds or so, think about it, and then go from there and decide, you know, hey, are we in a are we are we in F?
Please feel free to kind of, you know, kind of click there and we'll give everybody just a few minutes to answer and get into the the next next slide. Okay. Moving on to the next slide here, looking like a few C's, a couple of these wonderful. Okay, So reason we ask that is, you know, I think the why for today is is a good place to start.
And it really just boils down to America's infrastructure. You know, before we jump into asset investment planning, you know, I think it's important to level set, you know, why we're here. And I'm sure most of you in attendance feel this more than most, you know, the alarming state of our nation, our of our nation's infrastructure, you know, highlighted in the top left here with sort of a C minus.
And, you know, this is coming from the American Society of Civil Engineers Infrastructure Report card. And these grades are given based on overall condition, capacity and maintenance, as I had mentioned earlier on the various infrastructure categories. So that C minus grade signifies that our infrastructure is honestly in a mediocre state, you know, with significant deficiencies and and then becoming a growing concern.
So if we narrow that down, you know, to California, where we're all at, you know, you can see some of the grades aren't much better. You know, you look at water specifically, you've got aging pipes, outdated infrastructure, you know, contribute to a frequent, you know, water main break leaks, water quality. You know, the environmental impact is obviously significant and the financial burden falls on to municipalities and anti citizens.
So in conclusion, you know, the C-minus grade assigned to America's infrastructure I think serves as a really good wake up call, highlighting kind of the urgent need for invested in prioritization and failing to address these issues, not only compromises, you know, citizen safety, but, you know, quality of life, but also puts, you know, our nation's sort of competitiveness at risk.
I think it's important that we come together and to address the crisis and ensure a brighter future. So, you know, now that we kind of understand, hey, C-minus, we got some infrastructure challenges, you know, I think really what we're seeing is, you know, a speed of change in a lot of communities. And municipalities are trying to be a part of these changes.
You know, California, obviously known for its for forward thinking approach, you know, has developed a comprehensive strategy to combat climate change with simultaneously tracking infrastructure, tackling infrastructure challenges. So, you know, California's climate plan encompasses a range of initiatives and policies aimed at reducing greenhouse gas emissions, promoting renewable energy and improving overall sustainable re And I think this comprehensive approach aligns with the state's commitment to addressing infrastructure issues, you know, through innovative and environmentally conscious strategies.
And California in particular, you know, the state has passed down some pretty aggressive, you know, carbon reduction goals. A lot of them, you know, net zero by 2030 for some cities, 2045 for the state. And you know, the state's like, yep, we're on board. You know, you have municipalities being like we're on board citizens within your community. Yeah, we're on board.
And you know, councils are pushing, you know, these initiatives down to facilities, public works, finance departments, sustainability departments and the departments are like, how are we going to get there? And public works and facilities and sustainability is and finance departments are like, Yep, that's a great question. And if it was something easy to do within a year, they would probably have made the goal a year within a year.
You know, these met, these are measures that are put into place, you know, that make a financially viable option. It's going to take the whole 10 to 15 year window. And because you know what you think you know municipalities sorry because what if you're a municipality that just installed a brand new natural gas boiler, you know, your public works has been saying, hey for years, you know, we need a new boiler, we need a new boiler.
They install a new natural gas boiler five, six years ago, and you just paid $250,000 for that boiler. And now you have this net zero initiative and you're going to have to get rid of all natural gas, natural gas stuff. And so you can't just throw it away. So now you got to look at the boiler and plan for its replacement 15 years later, on top of all the other natural gas assets.
So how do you prioritize those? So you go you get to the modeling and you manage not just one natural gas boiler, but all of your sustainability initiatives in a strategic manner, maybe just not, you know, decarbonization, but then also, you know, widening of roads to help with more, you know, encourage more, you know, you know, bike lanes and or, you know, including EV adoption by adding more EV charging station.
This is a long winded way of saying councils and boards have signed up. Municipalities for these goals and these targets and it's it's on sort of the working person to figure out how we're going to get there. And there's no easy path. I don't think anybody here would say that there's an easy path or one path. You know, it's going to make, you know, help you hit your sustainability goals.
You literally could have 7 to 10 different ways to get there, and they're all viable options. You know, I haven't seen an organization chart a path yet to net zero or another sustainable goal that didn't include, you know, contracting out with consulting firms or increase internal hiring, you know, for some of this long range planning. You know, so you got these targets.
How are you going to get there? And that's sort of what we're going to be focusing on today. So thinking about this and I'm sure everyone's going to say, hey, sustainability is very important, especially if you're attending today. If you're here, I'm assuming it's very important. But during your planning process and when you're thinking about your long term multi-year plan, where that's five, 25 years out, is sustainability part of that planning planning process?
Is it part of your capital improvement process? Is it part of maybe your strategic asset management process and fit with most organizations I talked to, I think we're in early stages of, hey, we know it needs to be we're building out these ideas of what we how we think we should shape it, but we're not quite there yet.
We're still sort of in those early stages. And so, you know, I'm getting some answers here. Very important, obviously, you know, a few somewhat importance. So, you know, you know, thank you for sharing there. But, you know, let's dive in to, you know, asset investment planning benefits and some challenges here. I think we should start, especially in today's day and age, you know, what is asset investment planning?
And according to chat, I was just a little bit curious, so I put it in there. An asset investment plan is a data driven capital plan that allows asset intense organizations to prioritize their capital budget in an effective or an efficient and justifiable manner. So really what we're getting ready to dive into is it's going to be the combination of your total expenditures and the process of identifying, prioritizing and optimizing investments into your assets to achieve to achieve a desired outcome.
And that's going to be combining your CapEx and your OpEx and which enables organizations to make more informed investment choices by considering various factors. You know, what is the asset condition, the criticality, the maybe risk mitigation. But I want everybody to be thinking about this process in the lens of sustainability. So analyzing asset data, evaluating investment options and developing investment plans, and also talking about how we can leverage technology to help evidence based decisions and improve some transparency.
So right now, just a little bit curious how familiar you are. Are people in the audience with the concept of asset investment planning? Yeah, I'll be honest. It's a newer concept for me. Over the past year or so. I'm very familiar with strategic asset management, you know, for all the, you know, finance, you know, finance directors and other, you know, finance personas, you know, in attendance today was at GFL a couple of weeks ago, you know, major emphasis on strategic asset management, which is, you know, which we're going to kind of dive to hidden here a little bit.
But yeah, so I think basic understanding is is pretty good. So let's let's focus as I mentioned to was that the GFC conference attended a lot of this session. There was actually a four hour long training session around strategic asset management. And I think to understand that asset investment planning you'd need to have an understanding of strategic asset management as as a whole first.
And this is going to focus on your overall management and optimization of your assets to achieve long term, long term organizational objectives. Okay. So what does that mean? Right. Hey, let's just we'll keep keep things simple. Let's talk about decarbonization. Hey, we we as a city, we as a community, we want to be we want to be carbon neutral by 2035.
Right. So that is going to be our you know, that is going to be our long term investment strategy. We want to be carbon neutral by 2035. And, you know, so that is going to be a long term goal. It's going to take some time, it's going to take some energy is going to, you know, the scope and the focus is going to be a lot more strategic planning, decision making, coordinating various activities to minimize those risks.
Hey, we're not going to install a natural gas asset if we're trying to go carbon neutral by 2045, which I think most organizations probably kind of have a decent handle on that. You know, the time horizon is a much more long term perspective and the decision making process is going to be, you know, involve more high level. You know, you're going to have finance teams, you're going to have public works, you're going to have, you know, executives, you know, internal stakeholders and also external stakeholders.
Right? You're going to probably want to get some insight from your community to build these, you know, this long term strategic asset management plan. But part of that strategic asset management plan is going to be filled up with a little bit shorter goals and that's where asset investment planning comes into play. So asset investment planning, right scope, you're still going to be analyzing and optimizing, but really it's going to be a much more, you know, shorter term goal to help with the larger picture here.
So again, keeping in line, keeping in line with our keeping in line with our, you know, our example of decarbonization. If we want to understand how to, you know, go carbon neutral or net zero, you know, this right here is an example of a community greenhouse emissions report from from a city. And so if you look at it and say, okay, hey, we want to be you know, we want to go net zero, let's look at our biggest admission hogs here.
And right off the bat, you see transportation, you see natural gas are, you know, are two big, two big components of that. And then you see a few other things as well, you know, off the road equipment, you know, electrification, you know, some of the, you know, HFCS and some solid waste there. But, you know, so if you look at that, you know, the obvious statement is, okay, hey, cool, let's let's work on transportation and let's work on our not on natural gas.
But you know, you can only encourage, you know, your citizens, hey, if you have a fuel burning vehicle, but let's switch to an EV, right? Sometimes within a city or within an organization, there's going to be things outside of your control. So maybe just identifying some of that low hanging fruit. So even though you know, transportation, you know, there's grant there's grants for EV charging stations, you know, definitely steps in the right direction.
But, you know, looking at that natural gas, a lot of that will potentially be coming under facilities and, you know, buildings within within the cities that, you know, you can essentially start, you know, leading by example. And so, you know, that decision making process is going to be not necessarily as wide or as big, but it's going to be, you know, finance asset managers, capital planning departments and all of that is going to kind of come into this sort of visual.
And I think this gives us a great just perspective of what asset investment planning is at its core, because this honestly helps me sort of convey to those that may not necessarily understand, you know, many asset intense organizations have invested heavily in technology and to streamline business processes and to support, know operational asset management decisions. So think of your enterprise asset management software, you know, whether that's, you know, assume a mass system, you know, that's more of your operational data.
So if you look down in sort of the bottom right of the investment delivery, there's your operational expenditures. So looking at this, you know, are at the top strategic asset management organizational direction that we've decided carbon neutral by 2045. Hey, Ana, asset investment planning, we need to start understanding not only our operational expenses but also our capital expenditures around sunsetting natural gas assets.
And if you look that cart, you know, that carbon neutral by 2045 on the right, we're looking at a 1 to 25 year window there. You know, and your asset investment planning strategy is going to be either monthly or yearly because you can tackle that, you know, in a kind of a given time frame there. So, you know, this enterprise asset management system, you know, tends to focus on that operational data, as I mentioned.
And you know, for kind of weekly, monthly maintenance planning, you know, in some of that supply chain and work work management, all supported by what I hope a lot of organizations have in an asset registry talks with a city this week actually, and said, hey, you know, you have these goals, you know, where is your asset registry currently?
Like where is it? And ask them, you know, is it within their enterprise asset management system? And surprisingly, it wasn't. It's in an Excel spreadsheet on the finance team, you know, So think of it thinking of that boiler. You know, if we have 100 boilers and we just invested in that one, you know, five years ago, it's brand new, it's cooking, it's great.
You know, we're definitely of those hundred boilers. Maybe we put that towards the end, but now you have 99 boilers and you know, how often are you fixing those boilers? Which one of those are constantly causing headaches for your facilities team or your public works team? You know, without that operational data and those operational expenditures, you're not going to know.
And you may be looking at finances that say, Hey, this one, boilers cost us $60,000, we need to replace it tomorrow. But then if you go and look at the work history, it's, oh, actually, you know, we we made some major upgrades and that's why we actually have a pretty good life, life on this. Maybe we make that boiler number, you know, the second to last boiler we replace.
So without having that sort of total picture, it's often hard for cities and counties to really kind of invest in sort of this asset investment plan. So you know, again, you know, many of this data are either lying in one database or in a microsoft Excel and or honestly, we're mostly, you know, some of the some cities I talk about, it's a lot of institutional knowledge, hey, we need to go in and replace this.
Why? Because it's been giving us a bunch of headaches. Well, how many headaches has it been giving you over the past two or three years? A lot of that without data is just somebody's opinion. So having, you know, common common practices to determine which assets require, what capital expenditures and that operational expenditures, organizations typically, you know, segregate budget planning for their CapEx or their OpEx.
And what I'm really trying to if I haven't hammered it in already, is just looking at combining that data and combining that to better understand the total expenditure. You know, so running with sunsetting of natural gas assets, you know, I think we're going to kind of keep that theme as we kind of go through this. So, you know, let's talk about some of the challenges.
You know, we've sort of sort of highlighted them as we've kind of gotten going here. But there's three big challenges that I have kind of siloed them into buckets of data quality, organizational, siloed siloing and resource management. So of these challenges, I'm just a little bit curious, you know, what do you face in your, you know, what challenges do you face?
And would you say in your asset investment planning process? And again, if you don't have an asset in an asset investment planning process currently, maybe one of these is the reasons why, like, hey, we you know, we don't have the right data or, you know, sustainability is doing one thing and they have all their goals and that's great.
Public works is doing their thing and finance has their their eyes on something else. You know, again, there's no wrong answers. It's just, you know, sometimes, you know, these processes take a little bit time and it takes everybody kind of rowing the oars in the same direction to help get the boat moving. So seeing a little bit of organizational siloing, you know, some data quality, you know, I mean, personally, I think data is one of the biggest challenges, but I'll keep that to myself.
Yeah. Okay, great. So challenge number one, let's let's talk about data quality. Yeah. So we talked about CapEx, we talked about OpEx. You know, for those that, you know, mentioned as data as one of their challenges, I'd say typically from what I hear, this I think is the most common, you know, as of recent, I think resource management is up there as, you know, scale.
It's hard it's difficult to find skilled labor, labor having to outsource things more and more. But, you know, there are industry experts that to lean on. But data is is is so hard to manage because honestly, not many people like talking about data, but it's important because it helps drive some of these decisions. So, you know by I think addressing some of the data quality issues, organizations can enhance the accuracy and the reliability there of their asset information.
So when it comes to addressing, you know, aging infrastructure, you know, that data quality issue is essential for informed decision, you know, decision making processes, effective planning and, you know, effective resource allocation and utilization as you're building out this sustainability plan. And if you look on the top right right now, I actually went and found one organization that I saw it at.
Jeffrey had an awesome asset investment plan, and these were all the sources of information that they pulled from to help build the plan. And if you look, I mean, they're looking at tangible asset, tangible capital asset inventory, they're looking at playground inventory assessment, they're looking at internal equipment replacement plans. They're looking at all of these various plans to better understand, okay, hey, when do we need to start sunsetting certain assets?
When should we be starting these various projects? I definitely don't want to get it confused with a capital improvement plan, you know, and this and thinking about this being more so of focusing on sort of those assets that we may be able to help with this various sustainability goals. So accurate and comprehensive data ensures municipalities have clear understanding of their condition, maintenance history and remaining life span of their infrastructure assets.
So if you don't have your hey, when was something installed? What is the make maybe what the model is and and having, you know, how much would it cost to replace this if you don't have that data against one of your assets currently and it's not in a living breathing asset registry that when people make updates or do work orders and it's making updates, you know, you're not really having a true, you know, asset investment plan that's living and breathing.
It's okay. Hey, we did this last year and now this was our plan. And yeah, okay, maybe things have tweak a little bit, but maybe they've had a few, you know, catastrophic failures and now things have have shifted and that wasn't conveyed to that Excel spreadsheet sitting in the finance department. So implementing, I would say, data validation processes and investing in data management type systems, you know, establishes better data governance practices.
And really what that says is you just you're going to have better credible information to help improve, you know, more informed decisions and reduce risk of errors, you know, caused by some of that unreliable data. And, you know, if you were to hopped on today and said, hey, you know, one of our biggest challenges with our sustainability goals is data.
I'm sure you the person that you're telling the story is like, that doesn't sound right. It's like going out or actually it probably might be. So let's jump to number two organizational silos. This one, I think is a combination of of sort of the data with sort of resource management. You know, if you think about your various departments, divisions within city municipality, county, you know, organizational silo is often do river referred to as sort of the isolation and compartmentalization that administrators and other departments often operate independently.
Right. Everybody's staying in their lane thinking about their their goals, their objectives, not necessarily sometimes thinking about the bigger picture. Hey, no, I did. I did. Hey, we're going to need $1,000,000 for capital improvements. Great. Cool. Here's you have $500,000. Go. Why do I have $5,000? What is this? What is what are we able to do here? So these silos can impede, I think, the necessary coordination and comprehensive approach required to address aging infrastructure efficiently, efficiently to help with some of these sustainability goals.
And if you look again, this is this is various master plans, right? You know, you have your facility master plan, you have your stormwater master plan, you have your transportation master plan. All of these departments or divisions have their own master plan. And you know, it's easy to say, okay, cool, we're going to work, you know, focus on stormwater needs, this transportation needs that without necessarily thinking like, okay, hey, you know, maybe if we're having to pick up some of these pipes and transportation is having to do a few a few of these projects, we can, you know, save a dollar or two and, you know, mirror these projects at the same time.
So just thinking of like all of the various plans that are out there and not just keeping them, okay, hey, we're going to money put money here, put money there, put money there. And so, you know, kind of going back again to the previous slide, you know, effective data integration and technology can play a role in breaking down some of these silos and improving sort of that asset investment in asset investment planning.
And, you know, the key strategies are, you know, implementing integrating data systems. You know, I would also say embracing technology as well and just having the ability to understand what other people are doing on the other side of the fence, challenge three skilled resources and I think right now there's there's two buckets cities and counties can kind of fall into.
And, you know, you can either improve and sort of uplift internally, you know, training and professional development on, you know, maybe, you know, data quality practices, right. Understanding what asset investment planning is, understanding what some of these sustainability goals are, you know, and in uplifting in getting your, you know, getting that worker in the field to say, hey, I'm going to go and collect this data.
So then we have this information on this natural gas asset to help with our decarbonization initiative, you know, and sometimes there's just not enough bandwidth within an organization in order for order to make that happen. And so, you know, as I mentioned earlier, I think more and more cities are having to rely on third parties to go and collect and help with some of these with these planning efforts, simply because they don't have the time or the resources to do so.
And so, you know, investing in development of skilled resources can definitely signify and improve that assessment as improvement, investment planning process and organizations can provide, as I mentioned, training professional development to enhance the capabilities of their staff. And, you know, with not only asset management, but then also long term planning. And you know, considering some of these partners with, you know, external consultants, you know, they they're experts in their field and they have skilled resources that enables your organization to effectively analyze data.
Hey, maybe it's a combination of both. Hey, we know that, you know, we have, you know, 100 buildings. We need to go and collect as, you know, asset information. But, you know, we don't have enough money to go and do all 100 buildings. So we're we're going to look at our utility consumption and our natural gas, you know, our natural gas bills.
And these 15 are our highest, you know, our highest natural gas hawks. So we want to go and identify these assets and then figure out those conditions. Then we can we can build a plan about replacing them. So, you know, sometimes it is a combination and marrying of a you know, just because you can't do all of it doesn't mean that you should do something.
So again, integrating some of the you know, we've been talking about some of the challenges we've been talking about, hey, what is asset investment planning? So let's talk about some of the sustainable city projects and some of the criteria that we can be thinking about, which I'm sure a lot of you are within the audience. You know, this is this is the areas that I think are probably top of mind for most, you know, climate action, reduction of overall greenhouse gases, grasses we've been talking about in most of this webinar, electrifying of buildings, you know, similar, similar vein.
They're increasing increasing active transportation, you know, supporting EV adoption, you know, preparing for climate change. Hey, wildfires. One thing we have you talked about, just because we're talking about what we're doing today to help address the aging infrastructure doesn't mean that we shouldn't be also talking about what we should be doing to prepare for rising seas. These, you know, for for wildfires coming or that are constantly being talked about, all these, you know, hundred year storms that are now happening every five years.
Right. Like the climate change is very real and we're feeling some of those effects. So what is your city or what is your county doing to to kind of help prepare, prepare for some of that enhancing biodiversity, plant more trees. You know, I talked to one, I talked to one organization. They are supporting a tree farm down in Mexico to help with their natural to offset their natural gases and help, you know, help net zero that way.
So, you know, just because you don't have the space within your area doesn't mean that you can't help the, you know, your neighbors down south or all over the world, you know, supporting zero waste and then also improve water systems. I think this year, especially with the amount of storms and waters, there's you know, I think now more than ever, people have realized that, you know, maybe the infrastructure that we have around all of this needs to be improved upon.
And people have been saying it for years. But now, you know, sort of the wakeup call sort of happened. You know, again, these are the key issues. And again, these are just a few key issues that we've sort of identified on this on this conversation today. And I it's not necessarily mean you don't have your own sustainability goals or your own sustained sustainability ideas, but I think just talking with clients and talking with other cities and counties and I think in an area that we placed a strong focus on transitioning to renewable energy resources and upgrading the power grid, you know, the state has implemented ambitious renewable energy targets, so fostering the growth of solar,
wind energy installations, you know, by monitoring, modernizing, expanding the power grid, you know, California, I think, is ensuring sort of a reliable and resilient energy infrastructure that can better withstand some of these climate related challenges, you know, such as those wildfire fires, you know, with also reducing some of the greenhouse gas emissions. So, yeah, those are again, just a few of those.
I think now would be a good time to kind of transition and look at some of these sort of long term plans and look at some of what we could you could be presenting to, you know, some of those internal stakeholders or some of those community members that might be having questions and just helping them understand the challenges that you're facing to not you know, we can't just flip a switch and all of a sudden, you know, we're carbon neutral or flip a switch and all of you know, all of our our pipes underground are where they need to be.
And you know, we have improved, you know, active transportation. Right. So I'm going to turn this we're going to kind of turn things on over to Ben to kind of walk through some of these examples. And again, please, I'm sorry, I haven't really been paying attention, but if you have any questions, you will be doing our best to sort of answer those, you know, at the end, or as we're kind of going through here.
So I'm going to turn things on over to Ben and we'll go ahead and get started.
Thanks, Matt. So just to continue on the messaging that the man's been presenting today, I just want to kind of show you regionalization of of of how you can use tools to communicate to the decision makers whether that's a council board or just internal. So how have things in historically been done is obviously in the PDF document or in Excel and being able to say here, here is the projects that I'd like to move forward with.
But one thing that is has been a struggle to communicate is the long term impact of that. So this, this screenshot is just showing you a visualization of what the world will look like in a in an organization in ten years time. And this is looking at underground assets. But you can see there's the top left corner is a 0.5% replacement value reinvestment.
So that just means that say it's worth $100 million. The network you're reinvesting year over year, just 0.5% of that. So that's 500,000. And then it's incremental. There's a 1% option, there's a 1.5 as a 2.5% option. So logically, you can see that as you reinvest more money, you're going to get different outputs. And obviously the more invest you're going to improve the network.
But if you want to incorporate a lot of the points that Matt was been going on about today and tying it to your strategic objectives, you got, you're going to start looking at those items. So this is the exact same type of report. But then now it's taking into effect risk as well as other aspects. So it's really focused on what risk is in this model.
So once more, this is underground assets. So what risk is in here is those long term events in terms of the design life for certain pipes, whether related to 70 years, 100 years storm events. And now we're finding that due to climate factors, we're actually seeing those events occurring in 5 to 7 years. So these pipes that used to be sized in a suitable capacity, they're now no longer meeting the standard.
So they're overflowing that causing environmental issues. But so now it's it's changing how you reinvest in your assets. So it's not just replacing like for like it's it's looking at the different options available and focusing on those assets that are causing the greatest impact to your long term sustainability in a different lens. It could even be maybe you're experiencing a lot of growth in a certain areas, so there's more impact on the network.
So it might be a lot of people moving in a specific area and there's a lot more population density. So sustainability in relation to that would be putting in utilities that suit, that suit, those people that say 10,000 people moving into a small area and now you need to provide services that suit both. And I'm also talking continuing along that model of underground assets, like looking at different pipe networks, that the impact is as they go across the bridge or then they're waterways.
So if you have assets that are going across a bridge, there's more impact on those being overflowing and going into the river. So there's environmental impacts of that. The other one that sorry, didn't make it into the slides I have looked at, but so is talking about electrified assets. So that spoke about the examples with the boilers earlier, but it's looking at the impact of not just replacing like for like, but looking at the long term impact of going looking at your gas fired assets and and replacing them with more electric assets and then looking at the impact that has on not only not only the overall condition, but the budget needed and the risk
going forward. And then obviously in relation to that, electrification has other impacts in the sense that just because you electrify a boiler, you're just moving where the carbon impact goes. So the carbon is actually now you're putting more impact on the grid. So then you need to also look at improvements around the grid and look at different power supply.
So it's not just looking at the isolation of what you're doing in your community, but looking at the greater network in the greater state of California. So put to the next one class of back to Mountain.
Yeah, and I think, you know, this isn't going to just happen overnight. You know, as has been kind of showcase with, you know, some of the examples of, you know, what what is certain risk going to be here, what is certain criticality going to be here if we invest this much, much there, What's you know, what's it going to do?
You know, so I think having, you know, these are some planning design principles to kind of think about as you're integrating some of these sustainable criteria in into some of the key issues that you're trying to tackle. And I said it earlier, but actually I really, you know, focus on what's feasible. You know, technology and costs are shifting rapidly.
Inflation's, you know, kind of through the roof, but, you know, costs are going up. So just focus on kind of what's feasible. But, you know, prioritizing actions within the cities control that. I think sometimes, you know, hey, we're going to go and do all of these things. But, hey, you know, I was talking with a energy manager on Tuesday and he just went out for a grant and for every station get Grant to get electrical vehicle charging stations on some of the buildings.
And, you know, that is leading by example. Hey, if we put in more, more stations, we're going to encourage more people. They see that they have the ability to charge, to charge their electric vehicles. So, you know, but they can only control, hey, we're going to put in this EV station. And, you know, the hope is if we do this, we're leading by example.
And in that way, I also think, you know, being specific about the actions and the cost to sort of achieve near-term goals while accepting that, you know, long term goals could be a little bit more aspirational at times. You know, you can kind of see in the here and the now that 1 to 5 year plan, if we keep doing this, we're you know, this we're hoping that this long term plan will come to fruition.
And, you know, just by at least trying for that, you know, 1 to 5 years, you know, you know, hoping, improving, you know, the 25 down the road, you know, full cost of accounting is another thing to consider, as we had mentioned, using total lifecycle and cost of ownership, not just, hey, you know, this one natural gas asset is has cost the city $60,000.
You know, while the cost is $60,000, because it's it's been upgraded and improved. So, you know, thinking about that, you know, those can, you know, external considerations from other data sources to help guide some of those financial and replacement decisions. You know, I would say align initiatives, you know, and, you know, in other sort of asset investment, public resources kind of encourage what we want and discourage maybe what we don't want.
You know, that in getting input from, you know, your, you know, external stakeholders, you know, again, flexible, take practical near-term steps that expand rather than restrict capacity for, you know, future actions and pivots. You know, being light on your feet, you know, moves like a butterfly, sting like a bee sorta. So kind of in conclusion, you know, these are just sort of our summaries here.
You know, climate change is is is impacting and driving change in asset management, you know, and organizations must understand their current condition. Have that data that OP, you know Apex data have that CapEx data so you can get that total expenditure data. I bet you you know and understand operational and long term, you know, sustainability considerations should be step one.
What's critical that we need to invest, you know, upgrade. Step two, what's going to get us to step three? How is this how is this asset aligned with our, you know, sustainable or climate action plan? Right. You know, storytelling and, you know, predictive analytics can help engage those decision decisions, leveraging technology, help paint the picture. Hey, here are four options that we think would make a lot of sense.
And here's the dollar amounts with each option to help promote what you want us to do and data and analytics. As I said earlier, if if you're just institutional knowledge, sometimes it's great, but if you don't have data to back it up, it's just somebody opinion. So know that that does provided valuable insights, you know, to optimize that asset management and that asset asset investment plan.
Circling back around, this is the first in a series we're going to do webinars, we're going to roadshows spring to trade shows. And right now it's just been me because we're at the forefront of what I want to be seeing done by rightly in the state of California. And we're going to start incorporating actual examples with real clients that have done, you know, electrification projects and how they've they basically prioritized, planned and got funding.
So again, thank you for everybody in attendance today.