may 9th 2018 trenton, on
TRANSCRIPT
TRENTON, ON
May 9th 2018
Introductions
Presenter :
Guy Félio,
Stantec Consulting
Acknowledgements
This initiative is offered through the
Municipal Asset Management
Program, which is delivered by the
Federation of Canadian
Municipalities and funded by the
Government of Canada.
Who are you and your what’s your level of
understanding?
Learning Objectives
Describe what asset management is and why it is important.
Understand the importance of planners, engineers, and financial
staff in the AM process.
Identify the components of an asset management system.
Differentiate and describe the scope of an AM policy, AM strategy
and AM Plan.
Assess organizational readiness using the MAMP Readiness scale.
AgendaTIME: ITEM:
10:00–10:10 Welcome
10:10–11:00 Context
11:00–11:20 Creating an AM Policy & Exercise
11:20–11:30 Break
11:30–12:00 Creating an AM Strategy & Exercise
12:00–12:45 Lunch
12:45–13:20 Creating an AM Plan
13:20–13:50 Case Study
13:50–14:00 Readiness Scale Exercise
14:00–14:10 Break
14:10–14:30 Local Journey Roundtables
14:30–14:50 Reflections
14:50–15:00 Funding & Wrap-up
CONTEXT
What are assets?
Physical ”stuff” needed to deliver services
Service Delivered Physical Asset
Shelter Houses
Transportation Roads & transit
Recreation Skating rinks, sport fields, parks
Safety Firehalls, trucks, police station
Clean water Treatment plant , distribution network
Collect and dispose liquid waste Treatment plant, collection network
Collect and dispose solid waste Landfill, recycling centre, trucks
Manage stormwater Collection network, ditches, wetlands
Manage air quality /GHG Trees
HowWhat
What is asset management?
The ongoing process by which we
manage our communal assets to
ensure sustainable service delivery.
Think of your own home
...cleaning the floors
...servicing the furnace
...replacing the roof
AM Defined
ISO 55000: A coordinated activity of an organization to realize value from
assets. Realization of value will normally involve a balancing of costs, risks,
opportunities and performance benefits.
National Roundtable for Sustainable Infrastructure: Asset management is an
integrated business approach involving planning, finance, engineering and
operations to effectively manage existing and new infrastructure to maximize
benefits, reduce risk and provide satisfactory levels of service to community
users in a socially, environmentally and economically sustainable manner.
International Infrastructure Management Manual: The combination of
management, financial, economic, engineering and other practices applied to
physical assets with the objective of providing the required level of service in
the most cost effective manner.
What's your #1 job as a local
government employee?
Sustainable Service Delivery =
Asset Management
The Challenge
Almost 60% of Canada’s core public infrastructure owned
and maintained by local governments
Excellent Good Fair PoorVery
Poor
Fit for
future
Adequat
e
Requires
attention
Unfit for
future
Significant
deterioratio
n
35%
2016 CIRC – Key Findings
2016 CIRC – Key Findings
2016 CIRC – Key Findings
Asset Lifecycle
Asset Deterioration
Asset Deterioration
Asset Deterioration
Double WhammyAssets vulnerable to climate change
Dawson Creek, BC. Source: CTV News
Boom-bust
communities
Seasonal communities
Shrinking communities
Upfront Cost vs Lifecycle Cost
Focus on initial capital cost
Failing to fully recover costs
and fees
Keeping taxes low
Not enough money!
No funding reserves!
Stantec Consulting
REPAIR / REHAB COSTS
20%
80%
Reactive vs. Proactive Management
Deferring costs until
asset fails costs more
...and has service
implications!
Stantec Consulting
Asset rich – cash poor!
Choices...
‘Denial’ strategies
Defer cost
Secure funding from others
Consequences...
Service disruptions
Upset customers
Asset failure
Social & environmental
consequences
Sustainability...
More Immediate & Personal
Sustainable development is
development that meets the
needs of the present without
compromising the ability of
future generations to meet their
own needs. – Brundtland
Commission
Economic
Social
Environmental
?
Nevermind your grandchildren—
your quality of life is at stake!
• Population projections & Land supply
• Development location and typePLANNING
• Provide infrastructure to service development
• Replace, operate and maintain infrastructureENGINEERING
• $ for new capital costs
• $ for operations and maintenanceFINANCE
Who is Responsible?
Linear Silos
• Population projections & Land supply
• Development location and typePLANNING
• Provide infrastructure to service development
• Replace, operate and maintain infrastructureENGINEERING
• $ for new capital costs
• $ for operations and maintenanceFINANCE
Problem
Solution
Linear Silos
• Population projections & Land supply
• Development location and typePLANNING
• Provide infrastructure to service development
• Replace, operate and maintain infrastructureENGINEERING
• $ for new capital costs
• $ for operations and maintenanceFINANCE
Problem
Solution
Driver
Partners of AM Planning
Budget
Addressing Underlying Drivers
‘Denial’ strategies
Defer cost
Secure funding from
others
‘Confront’ strategies
Increase taxes
User fees
Reduce service delivery
(with engagement)
Demand reduction (such
as land use)
It’s not new but its different
AM then AM now
Technical exercise Strategic exercise
Engineering responsibility Integrated responsibility – planning,
engineering, finance
Buying an AM software program Any data (GIS, spreadsheets, field notes)
Departmental management ‘silos’ Integrated asset management
Reactive management process Proactive management process
Capital focus Life cycle focus
Narrow risk focus Risk assessment process with climate
vulnerability / risk
Technical levels of service Community engagement on service levels
Benefits
Sustainable service delivery
Better decision-making and
transparency
Fiscal stability & less money
over lifecycle
Reduced risks
Higher customer
engagement and satisfaction
Framework Example - ISO
Framework Example - IIMM
Framework Example - AMBC
Framework – FCMNot Just One Plan - Continuous Process
Asset Management Policy
Asset Management Strategy
Asset Management Objectives
Asset Management
System
Asset Management Plans
Org
an
izati
on
Valu
es,
Pri
ori
tiza
tio
n
Cri
teri
a a
nd
Ris
k P
olicy
Organizational Strategic Plan
Asset Management
Roadmap
Scalable
Sound too complicated for
your community?
...it does not have to be.
Components for Today
1. AM Policy
2. AM Strategy
3. AM Plan
4. Institutional Readiness
/ Self Assessment
Asset Management Policy
Asset Management Strategy
Asset Management Objectives
Asset Management
System
Asset Management Plans
Org
an
izati
on
Valu
es,
Pri
ori
tiza
tio
n C
rite
ria a
nd
Ris
k P
olicy
Organizational Strategic Plan
Asset Management
Roadmap
CREATING AN AM POLICY
Asset Management Policy
Formalize and signal corporate commitment
Outlines the principles that guides AM across the organization
Connection between community objectives and management of
assets.
Integration of AM within the organization.
Key roles for managing the asset management policy
Asset Management Policy
Policies should call for...
Maintain & manage infrastructure assets at defined
levels.
Monitor standards and service levels.
Develop & maintain asset inventories of all assets.
Use full life cycle costing principles in
establishing replacement strategies.
Plan financially for the appropriate level of
maintenance.
Stable long term funding to replace / renew
/decommission.
Incorporate AM in corporate plans.
Report to citizens regularly.
Refer to handout
Define the roles and responsibilities for your
community...
BREAK
CREATING AN AM STRATEGY
Asset Management Strategy
Link between the policy level of the organization and the day-to-
day implementation.
Outlines current asset management practices.
Identifies the desired state of assets and the target levels of service.
Identifies the critical risks to be managed.
Asset Management Strategy
Provides a guide to each department to effectively implement asset
management.
Identifies how other corporate plans are linked to asset
management plans.
Identifies how AM decision-making is integrated into the
organization.
Provides clarity on the roles and responsibilities of the asset
management team.
Identifies the approach to reviewing and updating the strategy.
Refer to handout
Review the examples provided
and outline the TOC for your AM
strategy...
Lunch Break
CREATING AN AM PLAN
Asset Management Plan
Asset Management Plan
and/or
Corporate Asset Management Plan
for each asset type (buildings, water, roads, etc.)
that includes all of the assets
Asset Management Plan
Asset management plans identify:
Assets owned and their condition and performance
Gaps between the current and desired levels of service
Practices, projects, and programs required to close the gap
Risks to service delivery
A timeline for implementation
Current vs projected funding required
Future improvements to the plan
Some Key Questions
Where are we now? (the state of our assets – inventory, condition)
Where do we need to be? (levels of service)
What do we do to do fill the gap? (actions/strategies)
What are the risks if we don’t act?
What will it cost? ($$)
State of Our Assets
Inventory
PSAB 3150- Tangible
Capital Assets
What do we own?
Where is it?
What is it worth?
Example - Waste Water System
Collection
Laterals and main sewers
Transport
Collectors
Trunks
Includes pumps
Treatment
Discharge
State of Our Assets
Condition
Estimated Service Life (ESL) Remaining
Example - City of Edmonton
Very Good Good
Fair Poor
Critical
Condition Grade % ESL Remaining
Very Good 80–100%
Good 60–79%
Fair 40–59%
Poor 20–40%
Very Poor < 20%
Levels of Service
Levels of Service
Service delivered Physical Asset
Shelter Houses
Transportation Roads & transit
Recreation Skating rinks, sport fields, parks
Safety Firehalls, trucks, police station
Clean water Treatment plant , distribution network
Collect and dispose liquid waste Treatment plant, collection network
Collect and dispose solid waste Landfill, recycling centre, trucks
Manage stormwater Collection network, ditches, wetlands
Manage air quality /GHG Trees
Frequency,
Hours of
operation,
Range of
offering,
Standards, etc.
Costs
Higher Level of Service = Increased Cost...YET we keep taxes and fees low
Levels of Service
Mandated
Regulations, codes, standards
Associated with funding requirement
Community Objectives
Link to the Community vision, for example:
• Economic development
• Social well being
• Environmental concerns
Reference InfraGuide best practice
Close the Gap
• Strategies to close the
gap
• $$ needed
Very Good
Good
Fair
Poor
Critical
High
LOS
low
=Current State
Desired State
The Gap
How can we close
the gap?
Risk
Risk Management
Process
Risk
RiskProbability of
Asset Failure
Consequence of
Asset FailureX=
Risk Rating Matrix
Risk
The ice caps are melting,
Leonard. In the future,
swimming won't be
optional.
Quick Tips for Drafting an AM Plan
• Start - Don’t wait for perfect
data
• Align approach and format
between departments
• Keep it short & tell a story
• Utilize examples or templates
National Asset Management
Strategy (NAMS)
www.ipwea.org/namscanada/home
NAMSCanada
Not-for-profit in Canada
NAMSplus ‘Suite of Templates’
Follows International Infrastructure
Management Manual
Aligns with ISO 55000
Subscription
NAMSPLUS Templates
Inputs by 2 Methods
1 Expenditure Template Spreadsheet
Emailed and loaded overnight
2 On Line Editing
NAMSPLUS – Input Methods
Calculation: In 2029 (2004 + 25) projected renewal is $55,744
Method 1 – Asset Register
NAMS.PLUS Results on Line
Activities
•Operations
•Maintenance
•Capital renewal
•Capital Upgrade/New
Resources
•Financing and staffing
Timelines
•Programs
Outputs: What is revealed by a good asset plan?
Projections based on
current programs
Are we able to communicate the consequences … and choices?
Quick Start Tools & Templates for
Building and AM Program
www.cea.ca/publicationsresources/asset-management.html
Getting Started Toolkit
Workbook
CASE STUDY
Financial Sustainability of Infrastructure
2011Replacement Needs
Not affordable based
on current business
practices
Undeveloped Lands Under
Consideration – Development Industry
Pressures
Council Objectives
Mandate to Council’s Infrastructure and Buildings Committee
Evaluate the capital, operations and maintenance (O&M) needs and
other associated costs with the in the South part of the urban area
(Rockland).
Capital includes buildings, major equipment, land acquisition,
etc.
O&M includes labour, materials, contracts, etc.
Establish whether current practices will make the development
sustainable.
Make recommendations as necessary.
Scenario Assumptions
Rockland south development only
Area split
65% residential
30% infrastructure, commercial, SWM
5% parks
Potential for 5,500 units
Population growth due to this development = 15,000
Timelines: scenarios for development
20 years 275 units/year
30 years 185 units/year
Doubles the
population of
urban area
Assumptions (continued)
Full infrastructure and staff requirements applied when all
5,500 units completed (at 20 or 30 years)
All costs in 2012 dollars
Does not include cost of Caron St project
Based on current practices
Debt financing at 6% interest
Capital financing as per development charges (next slide)
and considers all is to support growth
Assumptions (continued)
Development Charges
Service Inclusions =
• 100% Cost Recovery for Fire Protection
Services and Engineered Services
• 90% Cost Recovery for library,
daycare, parks & recreation, transit,
etc.
Employees’ benefits = +25% to salaries
Acquisition of lands for new buildings =
20% of construction costs of buildings
Useful life of assets from PSAB report
Revenue Assumptions
Estimated average annual taxes
Based on property values of similar units
in the area
Residential: $1350/unit/year
Commercial: $700K to 1.4$mil /year
(use $1mil/year in analysis)
Lower Tier Municipality …
add to property taxes
County and School
Board taxes for total tax
bill – not included
Needs
Additional infrastructure to operate, maintain, repair and eventually
reconstruct roads, sidewalks, water pipes, sanitary sewers, storm
sewers new street lights
Expansion of fire stations (Rockland and Clarence Creek)
Expansion/new space for City Hall offices
New/expansion public works facilities (municipal garage, salt
storage, water and wastewater treatment plants, landfill)
Additional equipment: public works, fire trucks, vehicles, daycare
Additional staff – all departments: Firefighting, Public Works,
Community services, Administration, Finance, By-Law enforcement,
Planning and Construction
Other additional requirements: Insurance, Library, Police, Public Transit
Is there something missing from
the list of needs you might add?
How would you go about
coting your needs?
Would you recommend
development approval or what
AM concerns do you have?
Results 20-year scenario
Infrastructure deficit +
differed maintenance
Insufficient funding only
visible after several years
into the development
Observations
Current practice for growth is not sustainable.
Infrastructure investments:
Need to adopt and implement preventive maintenance procedures
to increase the longevity of the infrastructure and maintain the level
of service
Need to create dedicated reserve funds for all infrastructure assets
Review the City’s operations:
Ensure maximum efficiency in all aspects of operations within the
City.
Observations (continued)
20 and 30-year scenarios present similar patterns in terms of
infrastructure deficit and differed maintenance accumulation.
Financial burden on City only appears a few years into the development
(3 to 4 years).
Increasing property taxes can pay for growth:
30-year scenario seems to create a lesser tax burden
(2.5% increase/year vs. 3%/year for the 20-year scenario)
Is this the most effective solution?
Observations (continued)
Optimistic growth scenario (i.e., 275 units per year over 20 years) may not
be realistic for the next 5 to 10 years in the present economic context is
there a need for the urban area expansion?
Will D.C. charges collected be enough to cover $33mil needed for new
capital D.C. study underway?
There is no growth management plan/policy to ensure sustainability.
SELF-ASSESSMENT
MAMP Readiness Scale
5 Key AM Components
Policy and
Governance
Putting in place policies and objectives Bringing policies to life through a strategy or framework Measuring and monitoring progress
People and
Leadership
Setting up cross-functional groups with clear accountability Ensuring adequate resourcing and commitment
Data and
Information
Using data to support effective AM planning and decision-
making: Asset Data, Performance Data, Financial Data
Planning and
Decision-Making
Documenting, standardizing how organization sets priorities Plans capital and O&M investment Decides on budgets
Contribution to AM
Practice
Training and staff development Sharing knowledge internally Participating in external knowledge sharing
Assess where you are and progress
Complete Self Assessment
BREAK
LOCAL JOURNEYS
Share & identify 3
personal action items...
REFLECTIONS
Video
Just 5 Ways AM & Planning Intersect
1. Environmental planning, ESAs, parks,
tree protection = natural assets
2. Climate resilience = risk
management
3. DCCs, amenity contributions = cost
recovery / O&M liability
4. Community engagement =
Customer expectations and
awareness
5. Alternative Transportation, TDM,
density, infill, subdivisions =
impact demand for new
How does your pet project /
responsibility relate to asset
management objectives?
WRAP-UP
MAMP Direct Funding Offer
Funding Offer:
Lesser of 80% of Eligible Costs and
$50,000.00
Features:
Continuous intake
Time from application to decision (max. 8 weeks)
Wider distribution (↑ # of Recipients ≥ 550)
Projects ≤ 12 months (including 1 month for reporting)
Contract with one Lead Applicant (applicants can form
partnerships and share resources).
MAMP Direct Funding Offer
A municipally-owned corporation
A regional, provincial or territorial organization delivering municipal services
An indigenous community that has a shared service agreement with a
municipal government related to infrastructure
A not-for-profit organization with a focus on municipal services
Municipal governments
(e.g. towns, cities, regions, districts, etc., and local boards thereof)
OR
Municipal partners applying in partnership with a municipal
government
Eligible applicants are defined as:
MAMP Direct Funding Offer
Eligible activities include:
AM Assessments (needs or risks)
AM Plans, Policies, and Strategies
Data collection and reporting
AM Training and organizational development
Knowledge transfer, development and sharing
Broad approach to eligible activities
to ensure inclusivity
Go to www.fcm.ca – Programs – MAMP
Complete Feedback Form
and Submit...
