The Case
You are an Asset Management Analyst for the City of Greenfield, a mid-sized city known for its fiscal responsibility and well-managed public services. That reputation is now at risk. The city's primary water distribution pump, "Old Faithful," a workhorse that has served the community for over 40 years, is on its last legs. Alarms are becoming more frequent, maintenance costs are skyrocketing, and a catastrophic failure is no longer a question of if, but when.
Maria Flores, the pragmatic Director of Public Works, has tasked you with a critical and time-sensitive analysis. The engineering team has identified three viable replacement pump models, each with a different price tag, operational cost profile, and expected lifespan. The City Council is hesitant to approve a major capital expenditure without a rock-solid business case, especially with budget season just around the corner.
Your job is to cut through the noise and provide a clear, data-driven recommendation. You must evaluate the financial implications of each option and advise the city on the most fiscally sound investment for the next generation of Greenfield's residents. This isn't just about buying a new pump; it's about safeguarding a critical public service while ensuring long-term financial sustainability.
Resources and Evidence
Review the following documents and data to inform your analysis.
Key Document: Memo: Urgent Request for Pump Replacement Analysis
Pump Replacement Options: Financial Comparison
| Pump Model | Initial Cost ($) | Expected Lifespan (Years) | Annual Maintenance Cost ($) | Annual Energy Cost ($) | Projected Major Overhaul Cost ($) |
|---|---|---|---|---|---|
| Standard-Pro | 350000 | 20 | 25000 | 45000 | 80000 |
| Eco-Flow 5000 | 600000 | 30 | 10000 | 18000 | 0 |
| Dura-Max Titan | 220000 | 15 | 40000 | 65000 | 0 |
📊 View Diagram: Greenfield Municipal Water Distribution Flow
From the City Treasurer's Office: A Note on Capital Projects
As a reminder, all proposals for major capital investments (>$500,000) submitted to the City Council must include a Net Present Value (NPV) analysis. The city's standard discount rate for infrastructure projects is 5%. While not a strict rule, projects demonstrating a positive NPV and a lower Total Cost of Ownership (TCO) are strongly favored for approval.
Your Task
Before you begin, review the rubric below. This will be used to evaluate your submission.
As the Asset Management Analyst for the City of Greenfield, your task is to produce a formal recommendation memo addressed to Maria Flores, Director of Public Works. This memo will serve as the primary document she uses to gain approval from the City Council for this critical project.
Your memo must: 1. Briefly state the problem and the purpose of your analysis. 2. Analyze the financial data for the three pump options, applying both Total Cost of Ownership (TCO) and Net Present Value (NPV) models. Clearly present the results of your analysis. 3. Make a clear and specific recommendation for which pump model the city should purchase. 4. Justify your recommendation using the results of your financial analysis and by referencing the city's capital project policies. The goal is to provide a compelling, data-driven argument for your chosen course of action.
Submit Your Work
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Next Steps
Congratulations on completing the Greenfield's Dilemma case study. You have applied critical financial modeling skills to a realistic public infrastructure challenge.
Please ensure you have uploaded your final recommendation memo to the submission area above. Once you have submitted your work, you can navigate back to the course home to continue your learning journey.
