Asset_Management_Plan_-_2017_Draft_3

AMP2017

The 2017 Asset Management Plan for the City of Kawartha Lakes

Figure

Figure

Executive Summary

Infrastructureisinextricablylinkedtotheeconomic,socialandenvironmentaladvancementofa community.Municipalitiesownandmanagenearly60%ofthepublicinfrastructurestockin Canada.Asanalyzedinthisassetmanagementplan(AMP),theCityofKawarthaLakes’ infrastructureportfoliocomprisesthefollowingassetclasses:roadnetwork,bridges&culverts, buildings,storm,water,sanitary,machinery&equipment,landimprovements,vehiclesandnatural resources ThereplacementcostoftheCity’sassetportfolioisestimatedtobeabout$3.2billion, excludingsocialhousing.Ofthis,onlyabout$1.8billionisphysicallydepreciableandthereforefully analyzedwithinthisAMP.

Strategicassetmanagementiscriticalinextractingthehighesttotalvaluefrompublicassetsatthe lowestlifecyclecost.ThisAMP,themunicipality’ssecondfollowingthecompletionofitsfirst editionin2013,detailsthestateofinfrastructureofthemunicipality’sserviceareasandprovides assetmanagementandfinancialstrategiesdesignedtofacilitateitspursuitofdevelopingan advancedassetmanagementprogramandmitigatelong-termfundinggaps.

Inadditiontoobservedfieldconditions,historicalcapitalexpenditurescanassistthemunicipality inidentifyingimpendinginfrastructureneeds,andguideitsmedium-andlong-termcapital programs.Themunicipalityhascontinuouslyinvestedinitsinfrastructurecontinuouslyoverthe decades.Investmentsfluctuatedduringthe1970sand1980sandthenpeakedintheearly2000s. Duringthistime,$215millionwasinvestedwith$94millionputintotheroadnetwork.Since2015, $50millionhasbeeninvestedwithafocusonroads,thewatersystemandlandimprovements.

Basedon2016replacementcost,andprimarilyconditiondata,over70%ofassets,withavaluation of$1.2billion,areingoodtoverygoodcondition;18%areinpoortoverypoorcondition The municipalityhasprovidedconditioninformationfor78%ofassetsbasedon2016replacement cost.Nearly90%oftheassetsanalyzedinthisAMPhaveatleast10yearsofusefulliferemaining. However,4%,withavaluationof$69million,remaininoperationbeyondtheirestablisheduseful life.Anadditional3%willreachtheendoftheirusefullifewithinthenextfiveyears.

InorderforanAMPtobeeffective,itmustbeintegratedwithfinancialplanningandlong-term budgeting.Thedevelopmentofacomprehensivefinancialplanwillallowthemunicipalityto identifythefinancialresourcesrequiredforsustainableassetmanagementbasedonexistingasset inventories,desiredlevelsofservice,andprojectedgrowthrequirements.TheCityhasdeveloped suchaplan,attachedheretoasAppendix2,whicheliminatestheinfrastructuredeficitby2021, phasesinsustainabletaxandwater/wastewaterratesupportover2018-2021andbuildshealthy capitalreservebalancesby2018.

AcriticalaspectofthisAMPisthelevelofconfidencethemunicipalityhasinthedatausedto developthestateoftheinfrastructureandformtheappropriatefinancialstrategies.The municipalityhasindicatedahighdegreeofconfidenceintheaccuracy,validityandcompletenessof theassetdataforallcategoriesanalyzedinthisAMP

I. Introduction & Context

AcrossCanada,themunicipalshareofpublicinfrastructureincreasedfrom22%in1955tonearly 60%in2013.Thefederalgovernment’sshareofcriticalinfrastructurestock,includingroads,water andwastewater,declinedbynearly80%invaluesince1963.1

Ontario’smunicipalitiesownmoreoftheinfrastructureassetsintheprovincethanboththe provincialandfederalgovernment.TheassetportfoliosmanagedbyOntario’smunicipalitiesare alsohighlydiverse.TheCityofKawarthaLakes’capitalassetportfolio,asanalyzedinthisAMPis valuedat$3.1billionusing2016replacementcosts.Themunicipalityreliesontheseassetsto provideresidents,businesses,employeesandvisitorswithsafeaccesstoimportantservices,such astransportation,recreation,culture,economicdevelopmentandmuchmore.Assuch,itiscritical thatthemunicipalitymanagetheseassetsoptimallyinordertoproducethehighesttotalvaluefor taxpayers.ThisAMPwillassistthemunicipalityinthepursuitofjudiciousassetmanagementforits capitalassets.

1 LarryMiller,UpdatingInfrastructureInCanada:AnExaminationofNeedsAndInvestmentsReportoftheStandingCommitteeon Transport,InfrastructureandCommunities,June2015

Figure 1 Distribution of Net Stock of Core Public Infrastructure

II. Asset Management

Assetmanagementcanbebestdefinedasanintegratedbusinessapproachwithinanorganization withtheaimtominimizethelifecyclecostsofowning,operating,andmaintainingassets,atan acceptablelevelofrisk,whilecontinuouslydeliveringestablishedlevelsofserviceforpresentand futurecustomers.Itincludestheplanning,design,construction,operationandmaintenanceof infrastructureusedtoprovideservices.Byimplementingassetmanagementprocesses, infrastructureneedscanbeprioritizedovertime,whileensuringtimelyinvestmentstominimize repairandrehabilitationcostsandmaintainmunicipalassets

Table 1 Objectives of Asset Management

Objective

Description

Inventory Captureallassettypes,inventoriesandhistoricaldata

CurrentValuation Calculatecurrentconditionratingsandreplacementvalues

LifecycleAnalysis IdentifyMaintenanceandRenewalStrategies&LifecycleCosts.

ServiceLevelTargets DefinemeasurableLevelsofServiceTargets

Risk&Prioritization Integratesallassetclassesthroughriskandprioritizationstrategies

SustainableFinancing

ContinuousProcesses

DecisionMaking& Transparency

IdentifysustainableFinancingStrategiesforallassetclasses

Providecontinuousprocessestoensureassetinformationiskeptcurrentand accurate

Integrateassetmanagementinformationintoallcorporatepurchases,acquisitions andassumptions.

Monitoring&Reporting Atdefinedintervals,assesstheassetsandreportonprogressandperformance

1. Overarching Principles

TheInstituteofAssetManagement(IAM)recommendstheadoptionofsevenkeyprinciplesfora sustainableassetmanagementprogram.AccordingtoIAM,assetmanagementmustbe:2

Principle Description

Holistic

Systematic

Systemic

Risk-based

Optimal

Sustainable

Integrated

Assetmanagementmustbecross-disciplinary,totalvaluefocused.

Rigorouslyappliedinastructuredmanagementsystem

Lookingatassetsintheirsystemscontext,againfornet,totalvalue

Incorporatingriskappropriatelyintoalldecision-making

Seekingthebestcompromisebetweenconflictingobjectives,suchas costsversusperformanceversusrisksetc.

Plansmustdeliveroptimalassetlifecycles,ongoingsystems performance,environmentalandotherlongtermconsequences.

Attheheartofgoodassetmanagementliestheneedtobejoined-up.The totaljigsawpuzzleneedstoworkasawhole-andthisisnotjustthe sumoftheparts.

2 “Key Principles”, The Institute of Asset Management, www.iam.org

Table 2 Principles of Asset Management

III. AMP Objectives and Content

ThisAMPisonecomponentofKawarthaLakes’overarchingcorporatestrategy.Itwasdevelopedto supportthemunicipality’svisionforitsassetmanagementpracticeandprograms.Itprovideskey assetattributedata,includingcurrentcompositionofthemunicipality’sinfrastructureportfolio, inventory,replacementcosts,usefullifeetc.,summarizesthephysicalhealthofthecapitalassets, enumeratesthemunicipality’scurrentcapitalspendingframework,andoutlinesfinancialstrategies toachievefiscalsustainabilityinthelong-termwhilereducingandeventuallyeliminatingfunding gaps(i.e.infrastructuredeficits)

Aswiththefirsteditionofthemunicipality’sassetmanagementplanin2013,thisAMPisdeveloped inaccordancewithprovincialstandardsandguidelines,andnewrequirementsundertheFederal GasTaxFund(GTF)stipulatingtheinclusionofalleligibleassetclasses.Thefollowingassetclasses areanalysedinthisdocument:roadnetwork;bridges&culverts;water;wastewater;storm; facilities;machinery&equipment;landimprovements;andvehicles Naturalresourcesandroad baseareincludedsolelytoshowthevalueownedbythemunicipality.

IV. Data and Methodology

Themunicipality’sdatasetfortheassetclassesanalyzedinthisAMParemaintainedinPSD’s CityWide®TangibleAssetsmodule.ThisdatasetincludeskeyassetattributesandPSAB3150data, suchashistoricalcosts,in-servicedates,fieldinspectiondata(asavailable),assethealth,and replacementcosts.

1. Condition Data

Municipalitiesimplementastraight-lineamortizationscheduleapproachtodepreciatetheircapital assets.Ingeneral,thisapproachmaynotbereflectiveofanasset’sactualconditionandthetrue natureofitsdeterioration,whichtendstoacceleratetowardtheendoftheasset’slifecycle. However,itisausefulapproximationintheabsenceofstandardizeddecaymodelsandactualfield conditiondataandcanprovideabenchmarkforfuturerequirements.Weanalyzeeachasset individuallypriortoaggregationandreporting;therefore,manyimprecisionsthatmaybe highlightedattheindividualassetlevelareattenuatedattheclasslevel.

Asavailable,actualfieldconditiondatawasusedtomakerecommendationsmoremeaningfuland representativeofthemunicipality’sstateofinfrastructure.Thevalueofconditiondatacannotbe overstatedastheyprovideamoreaccuraterepresentationofthestateofinfrastructurethandoes agealone.ThetypeofconditiondatausedforeachclassisindicatedinChapterV,Section2.

2. Financial Data

InthisAMP,theaverageannualrequirementistheamount,basedoncurrentreplacementcosts, thatmunicipalitiesshouldsetasideannuallyforeachinfrastructureclasssothatassetscanbe replaceduponreachingtheendoftheirlifecycle.

Todeterminecurrentfundingcapacity,allexistingsourcesoffundingareidentifiedandcombined toenumeratethetotalavailablefunding;fundingforthepreviousthreeyearsisanalyzedasdatais available.Thesefiguresarethenassessedagainsttheaverageannualrequirements,andareusedto calculatetheannualfundingshortfall(surplus)andforformingthefinancialstrategies.

Inadditiontotheannualshortfall,themajorityofmunicipalitiesfacesignificantinfrastructure backlogs.Theinfrastructurebacklogistheaccruedfinancialinvestmentneededintheshort-term tobringtheassetstoastateofgoodrepair.Thisamountisidentifiedforeachassetclass.

3. Infrastructure Report Card

TheAMPisacomplexdocument,butonewithdirectimplicationsonthepublic,agroupwithvaryingdegreesoftechnicalknowledge.To makecommunicationsmoremeaningfulandtheAMPmoreaccessible,we’vedevelopedanInfrastructureReportCardthatsummarizes ourfindingsincommonlanguagethatmunicipalitiescanuseforinternalandexternaldistribution.Thereportcardisdevelopedusing twokey,equallyweightedfactors:FinancialCapacityandAssetHealth.

Amunicipality’sfinancialcapacitygradeisdeterminedbytheleveloffundingavailable(0-100%)foreachassetclassforthepurposeof meetingtheaverageannualinvestmentrequirements.

Usingeitherfieldinspectiondataasavailableorage-baseddata,theassethealthcomponentofthereportcardusescondition(0-100%)to estimatehowcapableassetsareinperformingtheirrequiredfunctions.Weusereplacementcosttodeterminetheweightofeach conditiongroupwithintheassetclass.

VeryGood

B Good

C Fair

Theassetisfunctioningandperformingwell;onlynormalpreventivemaintenanceisrequired.Themunicipalityisfullypreparedforits long-termreplacementneedsbasedonitsexistinginfrastructureportfolio.

Themunicipalityiswellpreparedtofunditslong-termreplacementneedsbutrequiresadditionalfundingstrategiesintheshort-term tobegintoincreaseitsreserves.

Theasset’sperformanceorfunctionhasstartedtodegradeandrepair/rehabilitationisrequiredtominimizelifecyclecost.The municipalityisunderpreparingtofunditslong-terminfrastructureneeds.Thereplacementofassetsintheshort-andmedium-term willlikelybedeferredtofutureyears.

D Poor

F VeryPoor

Theasset’sperformanceandfunctionisbelowthedesiredlevelandimmediaterepair/rehabilitationisrequired.Themunicipalityis notwellpreparedtofunditsreplacementneedsintheshort-,medium-orlong-term.Assetreplacementswillbedeferredandlevelsof servicemaybereduced.

Themunicipalityissignificantlyunderfundingitsshort-term,medium-term,andlong-terminfrastructurerequirementsbasedon existingfundsallocation.Assetreplacementswillbedeferredindefinitely.Themunicipalitymayhavetodivestsomeofitsassets(e.g., bridgeclosures,arenaclosures)andlevelsofservicewillbereducedsignificantly.

Table 3 Infrastructure Report Card Description

4. Limitations and Assumptions

Severallimitationscontinuetopersistasmunicipalitiesadvancetheirassetmanagementpractices.

Asavailable,weusefieldconditionassessmentdatatoillustratethestateofinfrastructureand developtherequisitefinancialstrategies.However,intheabsenceofobserveddata,werelyon theageofassetstoestimatetheirphysicalcondition.

Asecondlimitationistheuseofinflationmeasures,forexampleusingCPI/NRBCPItoinflate historicalcostsintheabsenceofactualreplacementcosts.Whileareasonableapproximation, theuseofsuchmultipliersmaynotbereflectiveofmarketpricesandmayover-orunderstate thevalueofamunicipality’sinfrastructureportfolioandtheresultingcapitalrequirements.

OurcalculationsandrecommendationswillreflectthebestavailabledataatthetimethisAMP wasdeveloped.

ThefocusofthisplanisrestrictedtocapitalexpendituresanddoesnotcaptureO&M(operating andmaintenance)expendituresoninfrastructure.

5.Process

Highdataqualityisthefoundationofintelligentdecision-making.Generally,therearetwoprimarycausesofpoordecisions:inaccurateor incompletedata,andthemisinterpretationofdataused.Thefigurebelowillustratesanabbreviatedversionofourworkorder/workflow processbetweenPSDandmunicipalstaff.ItisdesignedtoensuremaximumconfidenceintherawdatausedtodeveloptheAMP,the interpretationoftheAMPbyallstakeholders,andultimately,theapplicationofthestrategiesoutlinedinthisAMP.

GAPANALYSIS:CITYWIDETA

Reviewclientdatabaseand assessagainstbenchmark municipalities

DATAVALIDATION1

CollaboratewithEngineering andFinancetovalidateand refinedata

GAPANALYSIS:CITYWIDECPA

Reviewclientdatabaseand assessagainstbenchmark municipalities

DATAVALIDATION2

CollaboratewithFinanceto validateandrefinedataprior tothedevelopingfinancial strategy

AMENDFINANCIALSTRATEGY

Collaboratewithclientto redevelopfinancialstrategy

ISSTRATEGY APPROVED?

FINANCIALSTRATEGY

PSDsubmitsfinancialstrategyto clientforreview

FIRSTDRAFT

PSDsubmitsfirstcomplete draftoftheAMP

AMENDDRAFT

Incorporateclientfeedback andresubmitdraft

ISDRAFT APPROVED?

SUBMITFINALAMPDRAFT

PSDdevelopsreportcardand submitsfinaldraftforclient approvalandprojectsign-off

DATAAPPROVAL

Clientapprovesallassetand financialdatabeforePSDcan developfinancialstrategy

Figure 2 Developing the AMP – Work Flow and Process

6. Data Confidence Rating

StaffconfidenceinthedatausedtodeveloptheAMPcandeterminetheextenttowhich recommendationsareapplied.Lowconfidencesuggestsuncertaintyaboutthedataandcan underminethevalidityoftheanalysis.Highdataconfidenceendorsesthefindingsandstrategies, andtheAMPcanbecomeanimportant,reliablereferenceguideforinterdepartmental communicationaswellasamanualforlong-termcorporatedecision-making.Havinganumerical ratingforconfidencealsoallowsthemunicipalitytotrackitsprogressovertimeandeliminatedata gaps.

DataconfidenceinthisAMPisdeterminedusingfivekeyfactorsandisbasedontheCityof Brantford’sapproach.Municipalstaffprovidetheirlevelofconfidence(score)ineachfactorfor majorassetclassesalongaspectrum,rangingfrom0,suggestinglowconfidenceinthedata,to100 indicativeofhighcertaintyregardinginputs.Thefivefactorsusedtocalculatethemunicipality’s dataconfidenceratingsare:

Thedataisuptodate. Thedataiscomplete anduniform.

Thedatacomesfrom anauthoritative source Thedataiserrorfree. Thedatais verifiedbyan authoritative source.

Themunicipality’sself-assessedscoreineachfactoristhenusedtocalculatedataconfidencein eachassetclassusingEquation1below.

V. Summary Statistics

Inthissection,weaggregatetechnicalandfinancialdataacrossallassetclassesanalyzedinthis AMP,andsummarizethestateoftheinfrastructureusingkeyindicators,includingassetcondition, usefullifeconsumption,andimportantfinancialmeasurements.

1. Asset Valuation

TheassetclassesanalyzedinthisAMPforthemunicipalityhadatotal2016valuationof$3.2billion,ofwhichroadscomprised48%, followedbynaturalresourcesat13%.Theownershipperhousehold(Figure4)totaled$120,000basedon38,444householdsforallasset categoriesexceptforwaterserviceswith12,766householdsandwastewaterserviceswith11,104households.Notethatnatural resourcesandroadbases,whicharepartoftheroadnetwork,areincludedsolelytorepresentthetotalvalueofassetsownedbythe municipality.

Figure 3 Asset Valuation by Class

2. Source of Condition Data by

Asset Class

Observeddatawillprovidethemostpreciseindicationofanasset’sphysicalhealth.Intheabsence ofsuchinformation,theageofcapitalassetscanbeusedasameaningfulapproximationofthe asset’scondition.Table4indicatesthesourceofconditiondatausedforthevariousassetclassesin thisAMP.Themunicipalityhasconditiondatafor78%ofallassetsbasedon2016replacement cost.

Table 4 Source of Condition Data by Asset Class

Gravel 100%Assessed–2016

Assessed–2016

RoadsNetwork

Assessed–2016

Assessed–2016

Remainingsegments Age-based

Bridges&Culverts Bridges Age-based Culverts

WaterSystem All

SanitaryServices All

Storm All

Buildings Structure

Remainingsegments

Machinery&Equipment Furniture

LandImprovements

Age-based

Assessed–2016

Assessed–2016

Assessed–2016

Age-based

Assessed–2016 Gear&Devices

Systems

AirportSiteworks

Siteworks

LandfillSiteworks

AirportSiteworks

Vehicles FireService

Remainingsegments

Assessed–2016

Assessed–2016

Assessed–2016

Assessed–2016

Assessed–2016

Assessed–2016

Age-based

3. Historical Investment in Infrastructure – All Asset Classes

Inconjunctionwithconditiondata,twoothermeasurementscanaugmentstaffunderstandingofthestateofinfrastructureand impendingandlong-terminfrastuctureneeds:installationyearprofileandusefulliferemaining.Using2016replacementcosts,Figure5 illustratesthehistoricalinvesmentsmadeintheassetclassesanalyzedinthisAMPsince1950.Often,investmentincriticalinfrastructure parallelspopulationgrowthorothersignificantshiftsindemographics;itcanalsofluctuatewithprovincialandfederalstimulsprograms. NotethatthisgraphonlyincludestheactiveassetinventoryasofDecember31,2016.

Themunicipalityhasinvestedinitsinfrastructurecontinuouslyoverthedecades.Investmentsfluctuatedduringthe1970sand1980sand thenpeakedintheearly2000s.Duringthistime,$215millionwasinvestedwith$94millionputintotheroadnetwork.Since2015,$50 millionhasbeeninvestedwithafocusonroads,thewatersystemandlandimprovements.

4. Useful Life Consumption – All Asset Classes

Whileageisnotapreciseindicatorofanasset’shealth,intheabsenceofobservedcondition assessmentdata,itcanserveasahigh-level,meaningfulapproxmiationandhelpguidereplacement needsandfacilitatestrategicbudgeting.Figure6showsthedistibutionofassetsbasedonthe percentageofusefullifealreadyconsumed.

Nearly90%oftheassetsanalyzedinthisAMPhaveatleast10yearsofusefulliferemaining. However,4%,withavaluationof$69million,remaininoperationbeyondtheirestablisheduseful life.Anadditional3%willreachtheendoftheirusefullifewithinthenextfiveyears.

Figure 6 Useful Life Remaining as of 2015 – All Asset Classes

5. Overall Condition – All Asset Classes

Basedon2016replacementcost,andprimarilyconditiondata,over70%ofassets,withavaluation of$1.2billion,areingoodtoverygoodcondition;18%areinpoortoverypoorcondition.

6.Financial Profile

Thissectiondetailskeyhigh-levelfinancialindicatorsforthemunicipality’sassetclasses.

Storm

Machinery

Land

Bridges

Wastewater

$1,088,000

$1,401,000

$2,394,000

$2,660,000

$3,341,000

$3,516,000

$4,987,000

$6,260,000

$22,977,000

$48,624,000

Theannualrequirementsrepresenttheamountthemunicipalityshouldallocateannuallytoeachof itsassetclassestomeetreplacementneedsastheyarise,preventinfrastructurebacklogsand achievelong-termsustainability.Intotal,themunicipalitymustallocate$48.6millionannuallyfor theassetscoveredinthisAMP.InAppendix2,thisfigureisadjustedtoreflectthenewinformation providedbythe2016RoadsNeedsStudywhich,duetotiming,couldnotbeincorporatedintothe mainbodyofthisAMP.

Wastewater

Machinery&Equipment

StormSewer

Facilities

Road

$0

$0

$0

$564,000

$3,630,000

$6,954,000

$8,875,000 $8,133,000

Total

Themunicipalityhasacombinedinfrastructurebacklogof$69.6million,withbridges&culverts comprising60%.Thebacklogrepresentstheinvestmentneededtodaytomeetpreviouslydeferred replacementneeds.Intheabsenceofassesseddata,thebacklogrepresentsthevalueofassetsstill inoperationbeyondtheirestablishedusefullife.

7.Replacement Profile – All Asset Classes

Inthissection,weillustratetheaggregateshort-,medium-andlong-terminfrastructurespendingrequirements(replacementonly)for themunicipality’sassetclasses.Thebacklogisthetotalinvestmentininfrastructurethatwasdeferredoverpreviousyearsordecades.In theabsenceofobserveddata,thebacklogrepresentsthevalueofassetsthatremaininoperationbeyondtheirusefullife.

Basedprimarilyonconditiondata,themunicipalityhasacombinedbacklogof$69.6million,ofwhichbridges&culvertscomprises$41 million.Aggregatereplacementneedswilltotal$62millionoverthenextfiveyears.Anadditional$91millionwillberequiredbetween 2021and2025.Themunicipality’saggregateannualrequirements(indicatedbytheblackline)total$48.6million.Atthisfundinglevel, themunicipalitywouldbeallocatingsufficientfundsonanannualbasistomeetthereplacementneedsforitsvariousassetclassesasthey arisewithouttheneedfordeferringprojectsandaccruingannualinfrastructuredeficits.Further,whilefulfillingtheannualrequirements willpositionthemunicipalitytomeetitsfuturereplacementneeds,injectionofadditionalrevenueswillbeneededtomitigateexisting infrastructurebacklogs.

8. Data Confidence

ThemunicipalityhasahighdegreeofconfidenceinthedatausedtodevelopthisAMP,receivingaweightedconfidenceratingof82%. Thisisindicativeofsignificanteffortincollectingandrefiningitsdataset. Table 5 Data Confidence Ratings

VI. State of Local Infrastructure

Thestateoflocalinfrastructureincludesthefullinventory,conditionratings,usefullife consumptiondataandthebacklogandupcominginfrastructureneedsforeachassetclass.As available,assessedconditiondatawasusedtoinformthediscussionandrecommendations;inthe absenceofsuchinformation,age-baseddatawasusedasthenextbestalternative.

1. Road Network

1.1 Asset Portfolio: Quantity, Useful Life and Replacement Cost

Table6illustrateskeyassetattributesforthemunicipality’sroadnetwork,includingquantitiesofvariousassets,theirusefullife,their replacementcost,andthevaluationmethodbywhichthereplacementcostswerederived.Intotal,themunicipality’sroadsassetsare valuedat$1.5billionbasedon2016replacementcosts.Theusefullifeindicatedforeachassettypebelowwasassignedbythe municipality.Itshouldbenotedthattimingdidnotpermittheupdatedroadsassetdatafromthe2016RoadsNeedsStudytobe incorporatedintothissection.

NotethattheAssetswithUnknownDataareshowninthetableaboveandFigure11tohighlightthetotalvaluationofownedassets. Theseassetsarenotincludedwithintheremainingfiguresinthissectionastheydonothavesufficientdata.However,theseassetsare accountedforwithintheannualrequirementsandfinancialstrategy.

1.2 Historical Investment in Infrastructure

Figure12showsthemunicipality’shistoricalinvestmentsinitsroadnetworksince1950.Whileobservedconditiondatawillprovide superioraccuracyinestimatingreplacementneedsandshouldbeincorporatedintostrategicplans,intheabsenceofsuchinformation, understandingpastexpenditurepatternsandcurrentusefullifeconsumptionlevels(Section1.3)caninformtheforecastingandplanning ofinfrastructureneedsandinthedevelopmentofacapitalprogram.Notethatthisgraphonlyincludestheactiveassetinventoryasof December31,2016.

Investmentsinthemunicipality’sroadnetworkhavegrownsince1950withalargeincreaseinthelate1970s.Intheearly2000s,the periodoflargestinvestment,$94millionwasinvestedwithover$56millionputintoHCBroads.

Figure 12

1.3 Useful Life Consumption

Inconjunctionwithhistoricalspendingpatternsandobservedconditiondata,understandingthe consumptionrateofassetsbasedonindustryestablishedusefullifestandardsprovidesamore completeprofileofthestateofacommunity’sinfrastructure.Figure13illustratestheusefullife consumptionlevelsasof2016forthemunicipality’sroadnetwork.

While86%ofthemunicipality’sroadnetworkhasatleast10yearsofusefulliferemaining,3%, withavaluationof$15million,remaininoperationbeyondtheirusefullife.Anadditional2%will reachtheendoftheirusefullifewithinthenextfiveyears.

Figure 13 Useful Life Consumption - Road Network

1.4 Current Asset Condition

Usingreplacementcost,inthissectionwesummarizetheconditionofthemunicipality’sroad networkasof2016.Bydefault,werelyonobservedfielddataasprovidedbythemunicipality.In theabsenceofsuchinformation,age-baseddataisusedasaproxy.Themunicipalityhasprovided conditiondatafor100%ofHCB,LCBandgravelroadassetsandfor99%ofguiderailassets

Basedprimarilyonassessedconditiondata,90%ofassets,withavaluationof$449millionarein goodtoverygoodcondition;6%areinpoortoverypoorcondition.

Figure 14 Asset Condition – Road Network (Primarily Assessed)

1.5 Forecasting Replacement Needs

Inthissection,weillustratetheshort-,medium-andlong-terminfrastructurespendingrequirements(replacementonly)forthe municipality’sroadnetworkassets.Thebacklogistheaggregateinvestmentininfrastructurethatwasdeferredoverpreviousyearsor decades.Intheabsenceofobserveddata,thebacklogrepresentsthevalueofassetsthatremaininoperationbeyondtheirusefullife.

Inadditiontoabacklogof$8.1million,replacementneedsareforecastedtobe$12millioninthenextfiveyears;anadditional$26million isforecastedinreplacementneedsbetween2021-2025.Themunicipality’sannualrequirements(indicatedbytheblackline)foritsroad networktotal$23million.Atthisfundinglevel,themunicipalitywouldbeallocatingsufficientfundsonanannualbasistomeet replacementneedsastheyarisewithouttheneedfordeferringprojectsandaccruingannualinfrastructuredeficits.

1.6 Recommendations – Road Network

Primarilyassessedconditiondataindicatesabacklogof$8.1millionandsignificant10-year replacementneedsof$38million.Themunicipalityshouldcontinueitsconditionassessments ofroadsurfaces(HCBandLCB),andexpandtheprogramtoincorporateallassetsinorderto morepreciselyestimateitsactualfinancialrequirementsandfieldneeds SeeSection2, ‘ConditionAssessmentPrograms’inthe‘AssetManagementStrategies’chapter.

Thedatacollectedthroughconditionassessmentprogramsshouldbeintegratedintoarisk managementframeworkwhichwillguideprioritizationofthebacklogaswellasshort,medium, andlongtermreplacementneeds.SeeSection4,‘Risk’inthe‘AssetManagementStrategies’ chapterformoreinformation.

Inadditiontotheabove,atailoredlifecycleactivityframeworkshouldalsobedevelopedto promotestandardlifecyclemanagementoftheroadnetworkasoutlinedfurtherwithinthe “AssetManagementStrategy”sectionofthisAMP.

Roadnetworkkeyperformanceindicatorsshouldbeestablishedandtrackedannuallyaspartof anoveralllevelofservicemodel.SeeSection7‘LevelsofService’.

2. Bridges & Culverts

2.1 Asset Portfolio: Quantity, Useful Life and Replacement Cost

Table7illustrateskeyassetattributesforthemunicipality’sbridges&culverts,includingquantitiesofvariousassets,theirusefullife, theirreplacementcost,andthevaluationmethodbywhichthereplacementcostswerederived.Intotal,themunicipality’sbridges& culvertsassetsarevaluedat$187millionbasedon2016replacementcosts.Theusefullifeindicatedforeachassettypebelowwas assignedbythemunicipality.

NotethattheAssetswithUnknownDataareshowninthetableaboveandFigure16Figure11tohighlightthetotalvaluationofowned assets.Theseassetsarenotincludedwithintheremainingfiguresinthissectionastheydonothavesufficientdata.However,theseassets areaccountedforwithintheannualrequirementsandfinancialstrategy

Table

Figure 16 Asset Valuation – Bridges & Culverts

2.2 Historical Investment in Infrastructure

Figure17showsthemunicipality’shistoricalinvestmentsinitsbridges&culvertssince1950.Whileobservedconditiondatawillprovide superioraccuracyinestimatingreplacementneedsandshouldbeincorporatedintostrategicplans,intheabsenceofsuchinformation, understandingpastexpenditurepatternsandcurrentusefullifeconsumptionlevels(Section2.3)caninformtheforecastingandplanning ofinfrastructureneedsandinthedevelopmentofacapitalprogram.Notethatthisgraphonlyincludestheactiveassetinventoryasof December31,2016.

Themunicipalityhasinvestedsporadicallyinitsbridgesandculvertssince1950.Intheearly1970s,theperiodoflargestinvestment,$36 millionwasinvestedwith$28millionputintobridges>3m.

Figure 17 Historical Investment – Bridges & Culverts

2.3 Useful Life Consumption

Inconjunctionwithhistoricalspendingpatternsandobservedconditiondata,understandingthe consumptionrateofassetsbasedonindustryestablishedusefullifestandardsprovidesamore completeprofileofthestateofacommunity’sinfrastructure.Figure18illustratestheusefullife consumptionlevelsasof2016forthemunicipality’sbridges&culverts

64%oftheassetshaveatleast10yearsofusefulliferemainingwhile23%,withavaluationof$41 million,remaininoperationbeyondtheirusefullife.Anadditional4%willreachtheendoftheir usefullifewithinthenextfiveyears.

Figure 18 Useful Life Consumption – Bridges & Culverts

2.4 Current Asset Condition

Usingreplacementcost,inthissectionwesummarizetheconditionofthemunicipality’sbridges& culvertsasof2016.Bydefault,werelyonobservedfielddataadaptedfromOSIMinspectionsas providedbythemunicipality.Intheabsenceofsuchinformation,age-baseddataisusedasaproxy. Allassetsarebasedonage-baseddata.

Age-baseddataindicatesthatwhile15%ofthemunicipality’sbridges&culvertsareingoodtovery goodcondition,73%,withavaluationof$132.5million,areinpoortoverypoorcondition.

Figure 19 Asset Condition – Bridges & Culverts (Age-based)

2.5 Forecasting Replacement Needs

Inthissection,weillustratetheshort-,medium-andlong-terminfrastructurespendingrequirements(replacementonly)forthe municipality’sbridges&culverts.Thebacklogistheaggregateinvestmentininfrastructurethatwasdeferredoverpreviousyearsor decades.Intheabsenceofobserveddata,thebacklogrepresentsthevalueofassetsthatremaininoperationbeyondtheirusefullife.

Inadditiontoabacklogof$41million,replacementneedswilltotal$7.1millioninthenextfiveyears;anadditional$14.7millionwillbe requiredbetween2021and2025.Themunicipality’sannualrequirements(indicatedbytheblackline)foritsbridges&culvertstotal $2,660,000.Atthisfundinglevel,themunicipalitywouldbeallocatingsufficientfundsonanannualbasistomeetreplacementneedsas theyarisewithouttheneedfordeferringprojectsandaccruingannualinfrastructuredeficits.

Figure 20 Forecasting Replacement Needs – Bridges & Culverts

2.6 Recommendations – Bridges & Culverts

Age-baseddataindicatesasignificantbacklogof$41millionand10-yearreplacementneedsof $21.8million.TheresultsandrecommendationsfromtheOSIMinspectionsshouldbe incorporatedintotheAMPanalysisandusedtogeneratetheshort-andlong-termcapitaland maintenancebudgetsforthebridgeandlargeculvertstructures.SeeSectionVIII,‘Asset ManagementStrategies’ .

Bridge&culvertstructurekeyperformanceindicatorsshouldbeestablishedandtracked annuallyaspartofanoveralllevelofservicemodel.SeeSectionVII‘LevelsofService’

3. Water System

3.1 Asset Portfolio: Quantity, Useful Life and Replacement Cost

Table8illustrateskeyassetattributesforthemunicipality’swatersystem,includingquantitiesofvariousassets,theirusefullife, replacementcosts,andthevaluationmethodbywhichthereplacementcostswerederived.Intotal,themunicipality’swatersystem assetsarevaluedat$251millionbasedon2016replacementcosts.Theusefullifeindicatedforeachassettypebelowwasassignedbythe municipality.

Table 8 Key Asset Attributes – Water

3.2 Historical Investment in Infrastructure

Figure22showsthemunicipality’shistoricalinvestmentsinitswatersystemsince1960.Whileobservedconditiondatawillprovide superioraccuracyinestimatingreplacementneedsandshouldbeincorporatedintostrategicplans,intheabsenceofsuchinformation, understandingpastexpenditurepatternsandcurrentusefullifeconsumptionlevels(Section3.3)caninformtheforecastingandplanning ofinfrastructureneedsandinthedevelopmentofacapitalprogram.Notethatthisgraphonlyincludestheactiveassetinventoryasof December31,2016.

Investmentsinthewatersystemhavebeensporadicsincethelate1950s.Intheearly2000s,theperiodoflargestinvestment,$73million wasinvestedinthewatersystemswith$49millionputintowatermains.

3.3 Useful Life Consumption

Inconjunctionwithhistoricalspendingpatternsandobservedconditiondata,understandingthe consumptionrateofassetsbasedonindustryestablishedusefullifestandardsprovidesamore completeprofileofthestateofacommunity’sinfrastructure.Figure23illustratestheusefullife consumptionlevelsasof2016forthemunicipality’swatersystem

Virtually100%ofassetshaveatleast10yearsofusefulliferemaining.

Figure 23 Useful Life Consumption – Water System

3.4 Current Asset Condition

Usingreplacementcost,inthissectionwesummarizetheconditionofthemunicipality’swater services.Bydefault,werelyonobservedfielddataasprovidedbythemunicipality.Intheabsence ofsuchinformation,age-baseddataisusedasaproxy.Themunicipalityhasprovidedcondition dataforallofitswaterassets.

Basedonassesseddata,77%ofassetsareingoodtoverygoodconditionwhile5%,witha valuationof$11.8million,areinpoorcondition

Figure 24 Asset Condition – Water System (Assessed)

3.5 Forecasting Replacement Needs

Inthissection,weillustratetheshort-,medium-andlong-terminfrastructurespendingrequirements(replacementonly)forthe municipality’swatersystemassets.Thebacklogistheaggregateinvestmentininfrastructurethatwasdeferredoverpreviousyearsor decades.Intheabsenceofobserveddata,thebacklogrepresentsthevalueofassetsthatremaininoperationbeyondtheirusefullife.

Assessedconditiondatashowsnobacklogandminimal10-yearreplacementneeds.Themunicipality’sannualrequirements(indicatedby theblackline)foritswatersystemtotal$3,341,000.Atthisfundinglevel,themunicipalitywouldbeallocatingsufficientfundsonan annualbasistomeetreplacementneedsastheyarisewithouttheneedfordeferringprojectsandaccruingannualinfrastructuredeficits.

3.6 Recommendations – Water System

Conditiondatashowsnobacklogandminimal10-yearreplacementneeds.Themunicipality shouldcontinueitsconditionassessmentprogramofitswaterassetstopreciselyestimateits financialrequirementsandfieldneeds.SeeSection2,‘ConditionAssessmentPrograms’inthe ‘AssetManagementStrategies’chapter.

Thedatacollectedthroughconditionassessmentprogramsshouldbeintegratedintoarisk managementframeworkwhichwillguideprioritizationofshort,medium,andlongterm replacementneeds.SeeSection4,‘Risk’inthe‘AssetManagementStrategies’chapterformore information.

Inadditiontotheabove,atailoredlifecycleactivityframeworkshouldbedevelopedtopromote standardlifecyclemanagementofthewatersystemasoutlinedfurtherwithinthe“Asset ManagementStrategy”sectionofthisAMP

Waterdistributionsystemkeyperformanceindicatorsshouldbeestablishedandtracked annuallyaspartofanoveralllevelofservicemodel.SeeSectionVII‘LevelsofService’.

Themunicipalityshouldassessitsshort-,medium-andlong-termcapital,andoperationsand maintenanceneeds.

Anappropriatepercentageofthereplacementcostsshouldthenbeallocatedforthe municipality’sO&Mrequirements.

4. Wastewater Systems

4.1 Asset Portfolio: Quantity, Useful Life and Replacement Cost

Table9illustrateskeyassetattributesforthemunicipality’swastewatersystemportfolio,includingquantitiesofvariousassets,their usefullife,replacementcosts,andthevaluationmethodbywhichthereplacementcostswerederived.Intotal,themunicipality’s wastewatersystemassetsarevaluedat$279millionbasedon2016replacementcosts.Theusefullifeindicatedforeachassettypebelow wasassignedbythemunicipality.

4.2 Historical Investment in Infrastructure

Figure27showsthemunicipality’shistoricalinvestmentsinitswastewatersystemsince1950.Whileobservedconditiondatawill providesuperioraccuracyinestimatingreplacementneedsandshouldbeincorporatedintostrategicplans,intheabsenceofsuch information,understandingpastexpenditurepatternsandcurrentusefullifeconsumptionlevels(Section4.3)caninformtheforecasting andplanningofinfrastructureneedsandinthedevelopmentofacapitalprogram.Notethatthisgraphonlyincludestheactiveasset inventoryasofDecember31,2016.

Majorinvestmentsintothemunicipality’swastewaterassetsbeganinthelate1950s.Investmentsthenfluctuatedandpeakedinthelate 1990sat$47million.Duringthistime$32.8millionwasputintosanitarysewergravitymains.

4.3 Useful Life Consumption

Inconjunctionwithhistoricalspendingpatternsandobservedconditiondata,understandingthe consumptionrateofassetsbasedonindustryestablishedusefullifestandardsprovidesamore completeprofileofthestateofacommunity’sinfrastructure.Figure28illustratestheusefullife consumptionlevelsasof2016forthemunicipality’swastewatersystem

Virtually100%ofassetshaveover10yearsofusefulliferemaining.

Figure 28 Useful Life Consumption – Wastewater System

4.4 Current Asset Condition

Usingreplacementcost,inthissectionwesummarizetheconditionofthemunicipality’ssanitary servicesasof2016.Bydefault,werelyonobservedfielddataasprovidedbythemunicipality.In theabsenceofsuchinformation,age-baseddataisusedasaproxy.Themunicipalityhasprovided conditiondataforallwastewatersystemassets.

Assesseddataindicatesthat71%oftheassetsareingoodtoverygoodcondition,while13%,with avaluationof$35million,areinpoorcondition.

Figure 29 Asset Condition – Wastewater System (Assessed)

4.5 Forecasting Replacement Needs

Inthissection,weillustratetheshort-,medium-andlong-terminfrastructurespendingrequirements(replacementonly)forthe municipality’swastewatersystemassets.Thebacklogistheaggregateinvestmentininfrastructurethatwasdeferredoverpreviousyears ordecades.Intheabsenceofobserveddata,thebacklogrepresentsthevalueofassetsthatremaininoperationbeyondtheirusefullife.

Conditiondataindicatesnobacklogor10-yearreplacementneeds.Themunicipality’sannualrequirements(indicatedbytheblackline) foritswastewaterassetstotal$3,516,000.Atthislevel,fundingwouldbesustainableandreplacementneedscouldbemetastheyarise withouttheneedfordeferringprojects.

Figure 30 Forecasting Replacement Needs – Wastewater System

4.6 Recommendations – Wastewater System

Conditiondatashowsnobacklogandminimal10-yearreplacementneeds.Themunicipality shouldcontinueitsconditionassessmentprogramofitswastewaterassetstoprecisely estimateitsfinancialrequirementsandfieldneeds.SeeSection2,‘ConditionAssessment Programs’inthe‘AssetManagementStrategies’chapter.

Thedatacollectedthroughconditionassessmentprogramsshouldbeintegratedintoarisk managementframeworkwhichwillguideprioritizationofshort,medium,andlongterm replacementneeds.SeeSection4,‘Risk’inthe‘AssetManagementStrategies’chapterformore information.

Inadditiontotheabove,atailoredlifecycleactivityframeworkshouldbedevelopedtopromote standardlifecyclemanagementofthewastewatersystemasoutlinedfurtherwithinthe“Asset ManagementStrategy”sectionofthisAMP

Wastewatercollectionsystemkeyperformanceindicatorsshouldbeestablishedandtracked annuallyaspartofanoveralllevelofservicemodel.SeeSectionVII‘LevelsofService’.

Themunicipalityshouldassessitsshort-,medium-andlong-termoperationsandmaintenance needs.Anappropriatepercentageofthereplacementcostsshouldthenbeallocatedforthe municipality’sO&Mrequirements.

5. Storm Network

5.1 Asset Portfolio: Quantity, Useful Life and Replacement Cost

Table10illustrateskeyassetattributesforthemunicipality’sstormnetwork,includingquantitiesofvariousassets,theirusefullife,their replacementcost,andthevaluationmethodbywhichthereplacementcostswerederived.Intotal,themunicipality’sstormnetwork assetsarevaluedat$80millionbasedon2016replacementcosts.Theusefullifeindicatedforeachassettypebelowwasassignedbythe municipality.AsindicatedinAppendix2,stormassetsareaddressedthroughtheUrban/RuralReconstructionProgram.

5.2 Historical Investment in Infrastructure

Figure32showsthemunicipality’shistoricalinvestmentsinitsstormnetworksince2000.Whileobservedconditiondatawillprovide superioraccuracyinestimatingreplacementneedsandshouldbeincorporatedintostrategicplans,intheabsenceofsuchinformation, understandingpastexpenditurepatternsandcurrentusefullifeconsumptionlevels(Section5.3)caninformtheforecastingandplanning ofinfrastructureneedsandinthedevelopmentofacapitalprogram.Notethatthisgraphonlyincludestheactiveassetinventoryasof December31,2016.

Thestormwaternetworkwasinstalledbefore1985withthelargestinvestmenttakingplaceintheearly1960swithavaluationof$49.6 millionwithafocusonstormmains.

5.3 Useful Life Consumption

Inconjunctionwithhistoricalspendingpatternsandobservedconditiondata,understandingthe consumptionrateofassetsbasedonindustryestablishedusefullifestandardsprovidesamore completeprofileofthestateofacommunity’sinfrastructure.Figure33illustratestheusefullife consumptionlevelsasof2016forthemunicipality’sstormassets

70%oftheassetshaveatleast10yearsofusefulliferemainingwhile9%,withavaluationof$7.1 million,remaininoperationbeyondtheirusefullife.Anadditional16%willreachtheendoftheir usefullifewithinthenextfiveyears.

Figure 33 Useful Life Consumption – Storm Network

5.4 Current Asset Condition

Usingreplacementcost,inthissectionwesummarizetheconditionofthemunicipality’sstorm services.Bydefault,werelyonobservedfielddataasprovidedbythemunicipality.Intheabsence ofsuchinformation,age-baseddataisusedasaproxy.Themunicipalityhasnotprovidedcondition dataforitsstormnetworkassets

Basedonagedata,virtuallyallthestormnetworkassetsareinpoortoverypoorcondition

Figure 34 Asset Condition – Storm Network (Age-based)

5.5 Forecasting Replacement Needs

Inthissection,weillustratetheshort-,medium-andlong-terminfrastructurespendingrequirements(replacementonly)forthe municipality’sstormassets.Thebacklogistheaggregateinvestmentininfrastructurethatwasdeferredoverpreviousyearsordecades. Intheabsenceofobserveddata,thebacklogrepresentsthevalueofassetsthatremaininoperationbeyondtheirusefullife.

Age-baseddatashowsabacklogof$3.6millionandfive-yearreplacementneedsof$15.7million.Anadditional$4.2millionwillbe requiredbetween2021-2025.Themunicipality’sannualrequirements(indicatedbytheblackline)forstormassetstotal$1,088,000.At thisfundinglevel,themunicipalitywouldbeallocatingsufficientfundsonanannualbasistomeetreplacementneedsastheyarise withouttheneedfordeferringprojectsandaccruingannualinfrastructuredeficits.

5.6 Recommendations – Storm Network

Themunicipalityshouldimplementaconditionassessmentprogramofitsstormmainsto furtherdefinefieldneedsandtoassisttheprioritizationoftheshortandlongtermcapital budget.SeeSection2,‘ConditionAssessmentPrograms’inthe‘AssetManagementStrategies’ chapter.

Usingtheaboveinformation,themunicipalityshouldassessitsshort-,medium-andlong-term capital,andoperationsandmaintenanceneeds.

Anappropriatepercentageofthereplacementvalueoftheassetsshouldthenbeallocatedfor themunicipality’sO&Mrequirements.

Stormnetworkkeyperformanceindicatorsshouldbeestablishedandtrackedannuallyaspart ofanoveralllevelofservicemodel.SeeSectionVII‘LevelsofService’.

6. Buildings & Facilities

6.1 Asset Portfolio: Quantity, Useful Life and Replacement Cost

Table11illustrateskeyassetattributesforthemunicipality’sbuildings&facilities,includingquantitiesofvariousassets,theirusefullife, theirreplacementcost,andthevaluationmethodbywhichthereplacementcostswerederived.Intotal,themunicipality’sbuildings assetsarevaluedat$282millionbasedon2016replacementcosts.Theusefullifeindicatedforeachassettypebelowwasassignedbythe municipality.

$282,170,583

NotethattheAssetswithUnknownDataareshowninthetableaboveandFigure36tohighlightthetotalvaluationofownedassets. Theseassetsarenotincludedwithintheremainingfiguresinthissectionastheydonothavesufficientdata.However,theseassetsare accountedforwithintheannualrequirementsandfinancialstrategy

6.2 Historical Investment in Infrastructure

Figure37showsthemunicipality’shistoricalinvestmentsinitsbuildings&facilitiessince1950.Whileobservedconditiondatawill providesuperioraccuracyinestimatingreplacementneedsandshouldbeincorporatedintostrategicplans,intheabsenceofsuch information,understandingpastexpenditurepatternsandcurrentusefullifeconsumptionlevels(Section6.3)caninformtheforecasting andplanningofinfrastructureneedsandinthedevelopmentofacapitalprogram.Notethatthisgraphonlyincludestheactiveasset inventoryasofDecember31,2016.

Themunicipality’sinvestmentsintoitsbuildingassetsgrewconsistentlystartingin1960until1979.Between1985and1989,theperiod oflargestinvestment,$41.2millionwasinvestedintothebuildingassetswithafocusonstructures.

6.3 Useful Life Consumption

Inconjunctionwithhistoricalspendingpatternsandobservedconditiondata,understandingthe consumptionrateofassetsbasedonindustryestablishedusefullifestandardsprovidesamore completeprofileofthestateofacommunity’sinfrastructure.Figure38illustratestheusefullife consumptionlevelsasof2016forthemunicipality’sbuildingsassets.

97%ofbuildingsassetshaveatleast10yearsofusefulliferemaining;2%,withavaluationof$6.6 millionremaininoperationbeyondtheirestablishedusefullife.

6.4 Current Asset Condition

Usingreplacementcost,inthissectionwesummarizetheconditionofthemunicipality’sbuildings assets.Bydefault,werelyonobservedfielddataasprovidedbythemunicipality.Intheabsenceof suchinformation,age-baseddataisusedasaproxy.Themunicipalityhasprovidedconditiondata for96%ofitsstructures.

86%ofbuildingsassets,withavaluationof$237million,areingoodtoverygoodcondition;5% areinpoortoverypoorcondition.

Figure 39 Asset Condition – Buildings & Facilities (Primarily Assessed)

6.5 Forecasting Replacement Needs

Inthissection,weillustratetheshort-,medium-andlong-terminfrastructurespendingrequirements(replacementonly)forthe municipality’sbuildingsassets.Thebacklogistheaggregateinvestmentininfrastructurethatwasdeferredoverpreviousyearsor decades.Intheabsenceofobserveddata,thebacklogrepresentsthevalueofassetsthatremaininoperationbeyondtheirusefullife.

Primarilyconditiondataindicatesabacklogof$7millionandminimalfive-yearreplacementneedsof$2.3million.Themunicipality’s annualrequirements(indicatedbytheblackline)foritsbuildingstotal$5million.Atthisfundinglevel,themunicipalitywouldbe allocatingsufficientfundsonanannualbasistomeetreplacementneedsastheyarisewithouttheneedfordeferringprojectsand accruingannualinfrastructuredeficits.

6.6 Recommendations – Buildings & Facilities

Themunicipalityshouldcontinueitsconditioninspectionprogramforitsbuildings&facilities topreciselyestimatefuturefinancialneeds.SeeSection2,‘ConditionAssessmentPrograms’in the‘AssetManagementStrategies’chapter.

Thedatacollectedthroughconditionassessmentprogramsshouldbeintegratedintoarisk managementframeworkwhichwillguideprioritizationofshort,medium,andlongterm replacementneeds.SeeSection4,‘Risk’inthe‘AssetManagementStrategies’chapterformore information.

Inadditiontotheabove,atailoredlifecycleactivityframeworkshouldbedevelopedtopromote standardlifecyclemanagementofbuildings&facilitiesasoutlinedfurtherwithinthe“Asset ManagementStrategy”sectionofthisAMP.

Usingtheaboveinformation,themunicipalityshouldassessitsshort-,medium-andlong-term capital,andoperationsandmaintenanceneeds.

Anappropriatepercentageofthereplacementcostsshouldthenbeallocatedforthe municipality’sO&Mrequirements.

Facilitykeyperformanceindicatorsshouldbeestablishedandtrackedannuallyaspartofan overalllevelofservicemodel.SeeChapterVII,‘LevelsofService’.

7. Machinery & Equipment

7.1 Asset Portfolio: Quantity, Useful Life and Replacement Cost

Table12illustrateskeyassetattributesforthemunicipality’smachinery&equipment,includingquantitiesofvariousassets,theiruseful life,theirreplacementcost,andthevaluationmethodbywhichthereplacementcostswerederived.Intotal,themunicipality’smachinery &equipmentassetsarevaluedat$13millionbasedon2016replacementcosts.Theusefullifeindicatedforeachassettypebelowwas assignedbythemunicipality.

$13,390,935

NotethattheAssetswithUnknownDataareshowninthetableaboveandFigure41tohighlightthetotalvaluationofownedassets. Theseassetsarenotincludedwithintheremainingfiguresinthissectionastheydonothavesufficientdata.However,theseassetsare accountedforwithintheannualrequirementsandfinancialstrategy

7.2 Historical Investment in Machinery & Equipment

Figure42showsthemunicipality’shistoricalinvestmentsinitsmachinery&equipmentsince1950.Whileobservedconditiondatawill providesuperioraccuracyinestimatingreplacementneedsandshouldbeincorporatedintostrategicplans,intheabsenceofsuch information,understandingpastexpenditurepatternsandcurrentusefullifeconsumptionlevels(Section7.3)caninformtheforecasting andplanningofinfrastructureneedsandinthedevelopmentofacapitalprogram.Notethatthisgraphonlyincludestheactiveasset inventoryasofDecember31,2016.

Themunicipalityrapidlyexpandeditsmachinery&equipmentportfoliobeginningintheearly2000s.Between2010and2014,theperiod oflargestinvestment,$4.8millionwasinvestedinthemachineryandequipmentcategory.

7.3 Useful Life Consumption

Inconjunctionwithhistoricalspendingpatternsandobservedconditiondata,understandingthe consumptionrateofassetsbasedonindustryestablishedusefullifestandardsprovidesamore completeprofileofthestateofacommunity’sinfrastructure.Figure43illustratestheusefullife consumptionlevelsasof2016forthemunicipality’smachinery&equipmentassets.

While23%ofassetshaveatleast10yearsofusefulliferemaining,12%,withavaluationof $835,000,remaininoperationbeyondtheirusefullife.Anadditional41%willreachtheendof theirusefullifewithinthenextfiveyears.

Figure 43 Useful Life Consumption – Machinery & Equipment

7.4 Current Asset Condition

Usingreplacementcost,inthissectionwesummarizetheconditionofthemunicipality’smachinery &equipmentassetsasof2016.Bydefault,werelyonobservedfielddataasprovidedbythe municipality.Intheabsenceofsuchinformation,age-baseddataisusedasaproxy.The municipalityhasprovidedconditiondataforitsfurnitureandgear&deviceswhileITsystemsrely onage-basedata

Basedonamixofassessedandagedata,30%ofassets,withavaluationof$2.1million,areinpoor toverypoorcondition;61%areingoodtoverygoodcondition.

Figure 44 Asset Condition – Machinery & Equipment (Assessed and Age-based)

7.5 Forecasting Replacement Needs

Inthissection,weillustratetheshort-,medium-andlong-terminfrastructurespendingrequirements(replacementonly)forthe municipality’smachinery&equipmentassets.Thebacklogistheaggregateinvestmentininfrastructurethatwasdeferredoverprevious yearsordecades.Intheabsenceofobserveddata,thebacklogrepresentsthevalueofassetsthatremaininoperationbeyondtheiruseful life.

Inadditiontoabacklogof$564,000,themunicipality’sreplacementneedstotal$2.3millioninthenextfiveyears.Anadditional$4.1 millionwillberequiredbetween2021-2025.Themunicipality’sannualrequirements(indicatedbytheblackline)foritsmachinery& equipmenttotal$1,401,000.Atthisfundinglevel,themunicipalitywouldbeallocatingsufficientfundsonanannualbasistomeet replacementneedsastheyarisewithouttheneedfordeferringprojectsandaccruingannualinfrastructuredeficits.

Figure

7.6

Recommendations – Machinery & Equipment

Themunicipalityshouldimplementacomponentbasedconditioninspectionprogramforall machinery&equipmentassetstobetterdefinefinancialrequirementsforitsmachineryand equipment.SeeSection2,‘ConditionAssessmentPrograms’inthe‘AssetManagement Strategies’chapter.

Usingtheaboveinformation,themunicipalityshouldassessitsshort-,medium-andlong-term capital,andoperationsandmaintenanceneeds.

Anappropriatepercentageofthereplacementcostsshouldthenbeallocatedforthe municipality’sO&Mrequirements.

8. Land Improvements

8.1 Asset Portfolio: Quantity, Useful Life and Replacement Cost

Table13illustrateskeyassetattributesforthemunicipality’slandimprovements,includingquantitiesofvariousassets,theirusefullife, theirreplacementcost,andthevaluationmethodbywhichthereplacementcostswerederived.Intotal,themunicipality’sland improvementsassetsarevaluedat$72.3millionbasedon2016replacementcosts.Theusefullifeindicatedforeachassettypebelowwas assignedbythemunicipality.

NotethattheAssetswithUnknownDataareshowninthetableaboveandFigure46tohighlightthetotalvaluationofownedassets. Theseassetsarenotincludedwithintheremainingfiguresinthissectionastheydonothavesufficientdata.However,theseassetsare accountedforwithintheannualrequirementsandfinancialstrategy

8.2 Historical Investment in Infrastructure

Figure47showsthemunicipality’shistoricalinvestmentsinitslandimprovementssince1950.Whileobservedconditiondatawill providesuperioraccuracyinestimatingreplacementneedsandshouldbeincorporatedintostrategicplans,intheabsenceofsuch information,understandingpastexpenditurepatternsandcurrentusefullifeconsumptionlevels(Section8.3)caninformtheforecasting andplanningofinfrastructureneedsandinthedevelopmentofacapitalprogram.Notethatthisgraphonlyincludestheactiveasset inventoryasofDecember31,2016.

Expendituresinlandimprovementshavefluctuatedacrossthedecades.Between2005and2009,theperiodoflargestinvestment,$30 millionwasinvestedwithafocusongeneralsiteworks.

8.3 Useful Life Consumption

Inconjunctionwithhistoricalspendingpatternsandobservedconditiondata,understandingthe consumptionrateofassetsbasedonindustryestablishedusefullifestandardsprovidesamore completeprofileofthestateofacommunity’sinfrastructure.Figure48illustratestheusefullife consumptionlevelsasof2016forthemunicipality’slandimprovementassets.

94%ofthemunicipality’slandimprovementassets,withavaluationof$67.9million,haveatleast 10yearsofusefulliferemaining Anadditional2%willreachtheendoftheirusefullifewithinthe nextfiveyears.

Figure 48 Useful Life Consumption – Land Improvements

8.4 Current Asset Condition

Usingreplacementcost,inthissectionwesummarizetheconditionofthemunicipality’sland improvementassets.Bydefault,werelyonobservedfielddataasprovidedbythemunicipality.In theabsenceofsuchinformation,age-baseddataisusedasaproxy.Themunicipalityhasprovided conditiondatafornearlyalllandimprovementassets

Basedprimarilyassesseddata,89%ofthemunicipality’slandimprovementassets,withavaluation of$64million,areingoodtoverygoodcondition;1%areinpoortoverypoorcondition.

Figure 49 Asset Condition - Land Improvements (Primarily Assessed)

8.5 Forecasting Replacement Needs

Inthissection,weillustratetheshort-,medium-andlong-terminfrastructurespendingrequirements(replacementonly)forthe municipality’slandimprovementsassets.Thebacklogistheaggregateinvestmentininfrastructurethatwasdeferredoverpreviousyears ordecades.Intheabsenceofobserveddata,thebacklogrepresentsthevalueofassetsthatremaininoperationbeyondtheirusefullife.

Primarilyassessedbaseddatashowsnobacklogorfive-yearreplacementneeds.However,replacementneedswilltotal$3.7million between2021-2025.Themunicipality’sannualrequirements(indicatedbytheblackline)foritslandimprovementstotal$2,394,000.At thisfundinglevel,themunicipalitywouldbeallocatingsufficientfundsonanannualbasistomeetreplacementneedsastheyarise withouttheneedfordeferringprojectsandaccruingannualinfrastructuredeficits.

Figure 50 Forecasting Replacement Needs

8.6 Recommendations – Land Improvements

Themunicipalityshouldcontinueitsconditionassessmentprogramforitslandimprovement assetstopreciselyestimatefinancialneeds.SeeSection2,‘ConditionAssessmentPrograms’in the‘AssetManagementStrategies’chapter.

Thedatacollectedthroughconditionassessmentprogramsshouldbeintegratedintoarisk managementframeworkwhichwillguideprioritizationofshort,medium,andlongterm replacementneeds.SeeSection4,‘Risk’inthe‘AssetManagementStrategies’chapterformore information.

Usingtheaboveinformation,themunicipalityshouldassessitsshort-,medium-andlong-term capitalandoperationsandmaintenanceneeds.

Anappropriatepercentageofthereplacementcostsshouldthenbeallocatedforthe municipality’sO&Mrequirements.

9. Vehicles

9.1 Asset Portfolio: Quantity, Useful Life and Replacement Cost

Table14illustrateskeyassetattributesforthemunicipality’svehiclesportfolio,includingquantitiesofvariousassets,theirusefullife, theirreplacementcost,andthevaluationmethodbywhichthereplacementcostswerederived.Intotal,themunicipality’svehiclesassets arevaluedat$78.8millionbasedon2016replacementcosts.Theusefullifeindicatedforeachassettypebelowwasassignedbythe municipality.

NotethattheAssetswithUnknownDataareshowninthetableaboveandFigure51tohighlightthetotalvaluationofownedassets. Theseassetsarenotincludedwithintheremainingfiguresinthissectionastheydonothavesufficientdata.However,theseassetsare accountedforwithintheannualrequirementsandfinancialstrategy.

Table 14 Asset Inventory – Vehicles

9.2 Historical Investment in Infrastructure

Figure52showsthemunicipality’shistoricalinvestmentsinitsvehiclesportfoliosince1950.Whileobservedconditiondatawillprovide superioraccuracyinestimatingreplacementneedsandshouldbeincorporatedintostrategicplans,intheabsenceofsuchinformation, understandingpastexpenditurepatternsandcurrentusefullifeconsumptionlevels(Section9.3)caninformtheforecastingandplanning ofinfrastructureneedsandinthedevelopmentofacapitalprogram.Notethatthisgraphonlyincludestheactiveassetinventoryasof December31,2016.

Investmentsinvehiclesquicklyincreasedstartinginthe1990s.In2010-2014,theperiodoflargestinvestment,$27millionwasinvested with$17millionputintofleetandtransit.

9.3 Useful Life Consumption

Inconjunctionwithhistoricalspendingpatternsandobservedconditiondata,understandingthe consumptionrateofassetsbasedonindustryestablishedusefullifestandardsprovidesamore completeprofileofthestateofacommunity’sinfrastructure.Figure53illustratestheusefullife consumptionlevelsasof2016forthemunicipality’svehicles

40%ofassetshaveatleast10yearsofusefulliferemaining;14%,withavaluationof$11million remaininoperationbeyondtheirusefullife.Anadditional28%willreachtheendoftheirusefullife withinthenextfiveyears.

Figure 53 Useful Life Consumption – Vehicles

9.4 Current Asset Condition

Usingreplacementcost,inthissection,wesummarizetheconditionofthemunicipality’svehicles assetsasof2015.Bydefault,werelyonobservedfielddataasprovidedbythemunicipality.Inthe absenceofsuchinformation,age-baseddataisusedasaproxy.Themunicipalityhasprovided conditiondataforitsfirevehicleswhiletheremainingassetsrelyonage-baseddata

Age-basedandassesseddatashowsthat34%ofthemunicipality’svehicleassetsareinpoortovery poorcondition;51%,withavaluationof$40millionareingoodtoverygoodcondition.

Figure 54 Asset Condition – Vehicles (Assessed and Age-based)

9.5 Forecasting Replacement Needs

Inthissection,weillustratetheshort-,medium-andlong-terminfrastructurespendingrequirements(replacementonly)forthe municipality’svehiclesassets.Thebacklogistheaggregateinvestmentininfrastructurethatwasdeferredoverpreviousyearsordecades. Intheabsenceofobserveddata,thebacklogrepresentsthevalueofassetsthatremaininoperationbeyondtheirusefullife.

Inadditiontoabacklogof$8.9million,replacementneedswilltotalover$16millionoverthenextfiveyears;anadditional$27million willberequiredbetween2021-2025.Themunicipality’sannualrequirements(indicatedbytheblackline)foritsvehiclestotal $6,260,000.Atthisfundinglevel,themunicipalitywouldbeallocatingsufficientfundsonanannualbasistomeetreplacementneedsas theyarisewithouttheneedfordeferringprojectsandaccruingannualinfrastructuredeficits.

9.6 Recommendations – Vehicles

Apreventivemaintenanceandlifecycleassessmentprogramshouldbeestablishedforall vehicleassetstogainabetterunderstandingofcurrentconditionandperformanceaswellas theshort-andmedium-termreplacementneeds.SeeSection2,‘ConditionAssessment Programs’inthe‘AssetManagementStrategies’chapter.

Usingtheaboveinformation,themunicipalityshouldassessitsshort-,medium-andlong-term capitalandoperationsandmaintenanceneeds.

Anappropriatepercentageofthereplacementcostsshouldthenbeallocatedforthe municipality’sO&Mrequirements.

10. Natural Resources

10.1 Asset Portfolio: Quantity, Useful Life and Replacement Cost

Table15illustrateskeyassetattributesforthemunicipality’snaturalresources,includingquantitiesofvariousassets,theirusefullife, theirreplacementcost,andthevaluationmethodbywhichthereplacementcostswerederived.Intotal,themunicipality’snatural resourcesarevaluedat$412.7millionbasedon2016replacementcosts.Theusefullifeindicatedforeachassettypebelowwasassigned bythemunicipality.

Notethattheseassetsareincludedtohighlightalloftheassetsthatareownedbythemunicipality.Acompleteanalysisontheseassetsis notprovidedsincenaturalresourcesdonotfollowstandardassetmanagementtechniquesbasedonreplacement.

VII. Levels of Service

Thetwoprimaryriskstoamunicipality’sfinancialsustainabilityarethetotallifecyclecostsof infrastructure,andestablishinglevelsofservice(LOS)thatexceeditsfinancialcapacity.Inthis regard,municipalitiesfaceachoice:overpromiseandunderdeliver;underpromiseandoverdeliver; orpromiseonlythatwhichcanbedeliveredefficientlywithoutplacinganinequitableburdenon taxpayers.Ingeneral,thereisoftenatrade-offbetweenpoliticalexpedienceandjudicious,longtermfiscalstewardship.

DevelopingrealisticLOSusingmeaningfulkeyperformanceindicators(KPIs)canbeinstrumental inmanagingcitizenexpectations,identifyingareasrequiringhigherinvestments,driving organizationalperformanceandsecuringthehighestvalueformoneyfrompublicassets.However, municipalitiesfacediminishingreturnswithgreatergranularityintheirLOSandKPIframework. Thatis,theobjectiveshouldbetotrackonlythoseKPIsthatarerelevantandinsightfulandreflect theprioritiesofthemunicipality.

1. Guiding Principles for Developing LOS

Beyondmeetingregulatoryrequirements,levelsofserviceestablishedshouldsupporttheintended purposeoftheassetanditsanticipatedimpactonthecommunityandthemunicipality.LOS generallyhaveanoverarchingcorporatedescription,acustomerorienteddescription,anda technicalmeasurement.ManytypesofLOS,e.g.,availability,reliability,safety,responsivenessand costeffectiveness,areapplicableacrossallserviceareasinamunicipality.ThefollowingLOS categoriesareestablishedasguidingprinciplesfortheLOSthateachserviceareainthe municipalityshouldstrivetoprovideinternallytothemunicipalityandtoresidents/customers. ThesearederivedfromtheTownofWhitby’s Guide to Developing Service Area Asset Management Plans

Reliable Servicesarepredictableandcontinuous;servicesofsufficientcapacityareconvenientand accessibletotheentirecommunity

CostEffective Servicesareprovidedatthelowestpossiblecostforbothcurrentandfuturecustomers,fora requiredlevelofservice,andareaffordable

Responsive

Opportunitiesforcommunityinvolvementindecisionmakingareprovided;andcustomersare treatedfairlyandconsistently,withinacceptabletimeframes,demonstratingrespect,empathyand integrity

Safe Servicesaredeliveredsuchthattheyminimizehealth,safetyandsecurityrisks

Suitable Servicesaresuitablefortheintendedfunction(fitforpurpose).

Sustainable Servicespreserveandprotectthenaturalandheritageenvironment.

2. Key Performance Indicators and Targets

Inthissection,weidentifyindustrystandardKPIsformajorinfrastructureclassesthatthe municipalitycanincorporateintoitsperformancemeasurementandfortrackingitsprogressover futureiterationsofitsAMP.Themunicipalityshoulddevelopappropriateandachievabletargets thatreflectevolvingdemandoninfrastructure,itsfiscalcapacityandtheoverallcorporate objectives.

Strategic

Financial Indicators

Tactical

Operational Indicators

Percentageoftotalreinvestmentcomparedtoassetreplacementvalue

Completionofstrategicplanobjectives(relatedtoroads,andbridges&culverts)

Annualrevenuescomparedtoannualexpenditures

Annualreplacementvaluedepreciationcomparedtoannualexpenditures

Costpercapitaforroads,andbridges&culverts

Maintenancecostpersquaremetre

Revenuerequiredtomaintainannualnetworkgrowth

Totalcostofborrowingvs.totalcostofservice

OverallBridgeConditionIndex(BCI)asapercentageofdesiredBCI

Percentageofroadnetworkrehabilitated/reconstructed

Percentageofpavedroadlanekilometresratedaspoortoverypoor

Percentageofbridgesandlargeculvertsratedaspoortoverypoor

PercentageofassetclassvaluespentonO&M

Percentageofroadsinspectedwithinthelastfiveyears

Percentageofbridgesandlargeculvertsinspectedwithinthelasttwoyears

Operatingcostsforpavedlaneperkilometres

Operatingcostsforbridgeandlargeculvertspersquaremetre

Percentageofcustomerrequestswitha24-hourresponserate

Table 17 Key Performance Indicators – Road Network and Bridges & Culverts Level KPI(ReportedAnnually)

Table 18 Key Performance Indicators – Buildings & Facilities

Level KPI (Reported Annually)

Strategic

Financial Indicators

Tactical

Operational Indicators

Percentage of total reinvestment compared to asset replacement value

Completion of strategic plan objectives (related to buildings & facilities)

Annual revenues compared to annual expenditures

Annual replacement value depreciation compared to annual expenditures

Revenue required to meet growth related demand

Repair and maintenance costs per square metre

Energy, utility and water cost per square metre

Percentage of component value replaced

Percent of facilities rated poor or critical

Percentage of facilities replacement value spent on O&M

Facility utilization rate

Percentage of facilities inspected within the last five years

Number/type of service requests

Percentage of customer requests addressed within 24 hours

Table 19 Key Performance Indicators – Vehicles Level KPI(ReportedAnnually)

Strategic

Financial Indicators

Tactical

Operational Indicators

Percentageoftotalreinvestmentcomparedtoassetreplacementvalue

Completionofstrategicplanobjectives(relatedtovehicles)

Annualrevenuescomparedtoannualexpenditures

Annualreplacementvaluedepreciationcomparedtoannualexpenditures

Costpercapitaforvehicles

Revenuerequiredtomaintainannualfleetportfoliogrowth

Totalcostofborrowingvs.totalcostofservice

Percentageofallvehiclesreplaced

Averageageofvehicles

Percentofvehiclesratedpoororcritical

PercentageofvehiclesreplacementvaluespentonO&M

Averagedowntimepervehiclescategory

Averageutilizationpervehiclescategoryand/oreachvehicle

Ratioofpreventivemaintenancerepairsvs.reactiverepairs

Percentofvehiclesthatreceivedpreventivemaintenance

Number/typeofservicerequests

Percentageofcustomerrequestsaddressedwithin24hours

Table 20 Key Performance Indicators – Water, Sanitary and Storm Networks Level KPI(ReportedAnnually)

Strategic

Financial Indicators

Tactical

Operational Indicators

Percentageoftotalreinvestmentcomparedtoassetreplacementvalue

Completionofstrategicplanobjectives(relatedtowater,sanitaryandstorm)

Annualrevenuescomparedtoannualexpenditures

Annualreplacementvaluedepreciationcomparedtoannualexpenditures

Totalcostofborrowingcomparedtototalcostofservice

Revenuerequiredtomaintainannualnetworkgrowth

Percentageofwater,sanitaryandstormnetworkrehabilitated/reconstructed

Annualpercentageofgrowthinwater,sanitaryandstormnetwork

Percentageofmainswheretheconditionisratedpoororcriticalforeachnetwork

Percentageofwater,sanitaryandstormnetworkreplacementvaluespentonO&M

Percentageofwater,sanitaryandstormnetworkinspected

Operatingcostsforthecollectionofwastewaterperkilometreofmain

Numberofwastewatermainbackupsper100kilometresofmain

Operatingcostsforstormwatermanagement(collection,treatment,anddisposal)per kilometreofdrainagesystem.

Operatingcostsforthedistribution/transmissionofdrinkingwaterperkilometreofwater distributionpipe

Numberofdayswhenaboilwateradvisoryissuedbythemedicalofficerofhealth,applicable toamunicipalwatersupply,wasineffect

Numberofwatermainbreaksper100kilometresofwaterdistributionpipeinayear

Numberofcustomerrequestsreceivedannuallyperwater,sanitaryandstorm

Percentageofcustomerrequestsaddressedwithin24hoursperwater,sanitaryandstorm network

Table 21 Key Performance Indicators – Machinery & Equipment

KPI (Reported Annually)

Percentage of total reinvestment compared to asset replacement value

Strategic

Completion of strategic plan objectives (related to machinery & equipment)

Annual revenues compared to annual expenditures

Annual replacement value depreciation compared to annual expenditures

Cost per capita for machinery & equipment

Indicators

Tactical

Operational Indicators

Revenue required to maintain annual portfolio growth

Total cost of borrowing vs. total cost of service

Percentage of all machinery & equipment replaced

Average age of machinery & equipment assets

Percent of machinery & equipment rated poor or critical

Percentage of vehicles replacement value spent on O&M

Average downtime per machinery & equipment asset

Ratio of preventive maintenance repairs vs. reactive repairs

Percent of machinery & equipment that received preventive maintenance

Number/type of service requests

Table 22 Key Performance Indicators – Land Improvements Level KPI(ReportedAnnually)

Strategic

Financial Indicators

Tactical

Operational Indicators

Percentageoftotalreinvestmentcomparedtoassetreplacementvalue

Completionofstrategicplanobjectives(relatedtolandimprovements)

Annualrevenuescomparedtoannualexpenditures

Annualreplacementvaluedepreciationcomparedtoannualexpenditures

Costpercapitaforsupplyingparks,playgrounds,etc.

Repairandmaintenancecostspersquaremetre

Percentoflandimprovementsratedpoororcritical

PercentageofreplacementvaluespentonO&M

Parklandpercapita

Percentageoflandimprovementsinspectedwithinthelastfiveyears

Number/typeofservicerequests

Percentageofcustomerrequestsaddressedwithin24hours

3.Future Performance

Inadditiontoamunicipality’sfinancialcapacityandlegislativerequirements,manyfactors, internalandexternal,caninfluencetheestablishmentofLOSandtheirassociatedKPIs Thesecan includethemunicipality’soverarchingmissionasanorganization,thecurrentstateofits infrastructureandthewidersocial,politicalandmacroeconomiccontext.Thefollowingfactors shouldinformthedevelopmentofmostLOStargetsandtheirassociatedKPIs:

Strategic Objectives and Corporate Goals

Themunicipality’slong-termdirectionisoutlinedinitscorporateandstrategicplans.This directionwilldictatethetypesofservicesitaimstodelivertoitsresidentsandthequalityofthose services.Thesehigh-levelgoalsarevitalinidentifyingstrategic(long-term)infrastructure prioritiesandasaresult,theinvestmentsneededtoproducedesiredLOS.

State of the Infrastructure

Thecurrentstateofcapitalassetswilldeterminethequalityofservicesthemunicipalitycandeliver toitsresidents.Assuch,LOSshouldreflecttheexistingcapacityofassetstodeliverthoseservices, andmayvary(increase)withplannedmaintenance,rehabilitationorreplacementactivitiesand timelines.

Community Expectations

ThegeneralpublicwilloftenhavequalitativeandquantitativeinsightsregardingtheLOSa particularassetoranetworkofassetsshoulddeliver,e.g.,whataroadin‘good’conditionshould looklikeorthetraveltimebetweendestinations.Thepublicshouldbeconsultedinestablishing LOS;however,thediscussionsshouldbecenteredonclearlyoutliningthelifecyclecostsassociated withdeliveringanyimprovementsinLOS.

Economic Trends

MacroeconomictrendswillhaveadirectimpactontheLOSformostinfrastructureservices.Fuel costs,fluctuationsininterestratesandthepurchasingpoweroftheCanadiandollarcanimpedeor accelerateanyplannedgrowthininfrastructureservices.

Demographic Changes

Thecompositionofresidentsinamunicipalitycanalsoserveasaninfrastructuredemanddriver, andasaresult,canchangehowamunicipalityallocatesitsresources(e.g.,anagingpopulationmay requirediversionofresourcesfromparksandsportsfacilitiestoadditionalwellnesscenters). Populationgrowthisalsoasignificantdemanddriverforexistingassets(loweringLOS),andmay requirethemunicipalitytoconstructnewinfrastructuretoparallelcommunityexpectations.

Environmental Change

Forecastingforinfrastructureneedsbasedonclimatechangeremainsanimprecisescience. However,broaderenvironmentalandweatherpatternshaveadirectimpactonthereliabilityof criticalinfrastructureservices.

4. Monitoring, Updating and Actions

ThemunicipalityshouldcollectdataonitscurrentperformanceagainsttheKPIslistedand establishtargetsthatreflectthecurrentfiscalcapacityofthemunicipality,itscorporateand strategicgoals,andasfeasible,changesindemographicsthatmayplaceadditionaldemandonits variousassetclasses.Forsomeassetclasses,e.g.,minorequipment,furniture,etc.,cursorylevelsof serviceandtheirrespectiveKPIswillsuffice.Formajorinfrastructureclasses,detailedtechnical andcustomer-orientedKPIscanbecritical.Oncethisdataiscollectedandtargetsareestablished, theprogressofthemunicipalityshouldbetrackedannually.

VIII. Asset Management Strategies

Theassetmanagementstrategysectionwilloutlineanimplementationprocessthatcanbeusedto identifyandprioritizerenewal,rehabilitationandmaintenanceactivities.Thiswillassistinthe developmentofa10-yearcapitalplan,includinggrowthprojections,toensurethebestoverall healthandperformanceofthemunicipality’sinfrastructure.Thissectionincludesanoverviewof conditionassessment,thelifecycleinterventionsrequired,andprioritizationtechniques,including risk,todeterminewhichcapitalprojectsshouldmoveforwardintothebudgetfirst.

1. Non-Infrastructure Solutions & Requirements

Themunicipalityshouldexplore,asrequestedthroughtheprovincialrequirements,whichnoninfrastructuresolutionsshouldbeincorporatedintothebudgetsforitsinfrastructureservices. Non-infrastructuresolutionsaresuchitemsasstudies,policies,conditionassessments, consultationexercises,etc.,thatcouldpotentiallyextendthelifeofassetsorlowertotalasset programcostsinthefuturewithoutadirectinvestmentintotheinfrastructure.

Typicalsolutionsforamunicipalityincludelinkingtheassetmanagementplantothestrategicplan, growthanddemandmanagementstudies,infrastructuremasterplans,betterintegrated infrastructureandlanduseplanning,publicconsultationonlevelsofserviceandcondition assessmentprograms.Aspartoffutureassetmanagementplans,areviewoftheserequirements shouldtakeplace,andresourcesshouldbededicatedtotheseitems.

Itisrecommended,underthiscategoryofsolutions,thatthemunicipalitydevelopandimplement holisticconditionassessmentprogramsforallassetclasses.Thiswilladvancetheunderstandingof infrastructureneeds,improvebudgetprioritizationmethodologiesandprovideaclearerpathof whatisrequiredtoachievesustainableinfrastructureprograms.

2. Condition Assessment Programs

Thefoundationofanintelligentassetmanagementpracticeisbasedoncomprehensiveandreliable informationonthecurrentconditionoftheinfrastructure.Municipalitiesneedtohaveaclear understandingregardingtheperformanceandconditionoftheirassets,asallmanagement decisionsregardingfutureexpendituresandfieldactivitiesshouldbebasedonthisknowledge.An incompleteunderstandingofanassetmayleadtoitsuntimelyfailureorprematurereplacement.

Somebenefitsofholisticconditionassessmentprogramswithintheoverallassetmanagement processarelistedbelow:

understandingofoverallnetworkconditionleadstobettermanagementpractices allowsfortheestablishmentofrehabilitationprograms preventsfuturefailuresandprovidesliabilityprotection potentialreductioninoperation/maintenancecosts accuratecurrentassetvaluation allowsfortheestablishmentofriskassessmentprograms establishesproactiverepairschedulesandpreventivemaintenanceprograms avoidsunnecessaryexpenditures extendsassetservicelifethereforeimprovinglevelofservice improvesfinancialtransparencyandaccountability enablesaccurateassetreportingwhich,inturn,enablesbetterdecisionmaking

Conditionassessmentcaninvolvedifferentformsofanalysissuchassubjectiveopinion, mathematicalmodels,orvariationsthereof,andcanbecompletedthroughadetailedorcursory approach.Whenestablishingtheconditionassessmentforanentireassetclass,acursoryapproach (metricssuchasgood,fair,poor,verypoor)isused.Thisisaneconomicalstrategythatwillstill provideup-to-dateinformation,andwillallowfordetailedassessmentorfollow-upinspectionson thoseassetscapturedaspoororcriticalcondition.

The Impact of Condition Assessments

In2015,PSDpublishedastudyinpartnershipwiththeAssociationofMunicipalitiesofOntario (AMO).Thereport, The State of Ontario’s Roads and Bridges: An Analysis of 93 Municipalities, enumeratedtheinfrastructuredeficits,annualinvestmentgaps,andthephysicalstateofroads, bridgesandculvertswitha2013replacementvalueof$28billion.

Acriticalfindingofthereportwasthedramaticdifferenceintheconditionprofileoftheassets whencomparingage-basedestimatesandactualfieldinspectionobservations.Foreachasset group,fielddatabasedconditionratingsweresignificantlyhigherthanage-basedconditionratings, withpavedroads,culverts,andbridgesshowinganincreaseinscore(0-100)of+29,+30,and+23 pointsrespectively.Inotherwords,age-basedmeasurementsmaybeunderestimatingthecondition ofassetsbyasmuchas30%.

Figure 57 Comparing Age-based and Assessed Condition Data

Bridges(Structure)

Culverts(Structure) PavedRoads

2.1 Pavement Network

Typicalindustrypavementinspectionsareperformedbyconsultingfirmsusingspecialized assessmentvehiclesequippedwithvariouselectronicsensorsanddatacaptureequipment.The vehicleswilldrivetheentireroadnetworkandtypicallycollecttwodifferenttypesofinspection data:surfacedistressdataandroughnessdata.

Surfacedistressdatainvolvesthecollectionofmultipleindustrystandardsurfacedistresses,which arecapturedeitherelectronicallyusingsensingdetectionequipmentmountedonthevan,or visuallybythevan'sinspectioncrew.Roughnessdatacaptureinvolvesthemeasurementofthe roughnessoftheroad,measuredbylasersthataremountedontheinspectionvan'sbumper, calibratedtoaninternationalroughnessindex.

Anotheroptionforacursorylevelofconditionassessmentisformunicipalroadcrewstoperform simplewindshieldsurveysaspartoftheirregularpatrol.Manymunicipalitieshavecreateddata collectioninspectionformstoassistthisprocessandtostandardizewhatpresenceofdefectswould constituteagood,fair,poor,orcriticalscore.Lackinganyotherdataforthecompleteroadnetwork, thiscanstillbeseenasagoodmethodandwillassistgreatlywiththeoverallmanagementofthe roadnetwork.

Itisrecommendedthatthemunicipalitycontinueitspavementconditionassessmentprogramand thataportionofcapitalfundingisdedicatedtothis.Wealsorecommendexpansionofthisprogram toincorporateadditionalcomponents.

2.2 Bridges & Culverts

OntariomunicipalitiesaremandatedbytheMinistryofTransportationtoinspectallstructuresthat haveaspanof3metresormore,accordingtotheOSIM(OntarioStructureInspectionManual).

Structureinspectionsmustbeperformedby,orundertheguidanceof,astructuralengineer,must beperformedonabiennialbasis(onceeverytwoyears),andincludesuchinformationasstructure type,numberofspans,spanlengths,otherkeyattributedata,detailedphotoimages,andstructure elementbyelementinspection,ratingandrecommendationsforrepair,rehabilitation,and replacement.

Thebestapproachtodevelopa10-yearneedslistforthemunicipality’sstructureportfoliorelieson thestructuralengineerwhoperformstheinspectionstoalsoproduceamaintenancerequirements report,andrehabilitation&replacementrequirementsreportaspartoftheoverallassignment.In additiontodefiningtheoverallneedsrequirements,thestructuralengineershouldidentifythose structuresthatwillrequiremoredetailedinvestigationsandnon-destructivetestingtechniques. Examplesoftheseinvestigationsare:

Detaileddeckconditionsurvey

Non-destructivedelaminationsurveyofasphaltcovereddecks

Substructureconditionsurvey

Detailedcoatingconditionsurvey

Underwaterinvestigation

Fatigueinvestigation

Structureevaluation

ThroughtheOSIMrecommendationsandadditionaldetailedinvestigations,a10-yearneedslistcan bedevelopedforthemunicipality’sbridges.

2.3 Buildings & Facilities

Themostpopularandpracticaltypeofbuildings&facilitiesassessmentinvolvesqualifiedgroupsof trainedindustryprofessionals(engineersorarchitects)performingananalysisoftheconditionofa groupoffacilitiesandtheircomponents,thatmayvaryintermsofage,design,construction methodsandmaterials.Thisanalysiscanbedonebywalk-throughinspection(themostaccurate approach),mathematicalmodelingoracombinationofboth.Thefollowingassetclassificationsare typicallyinspected:

Site Components –propertyaroundthefacilityandoutdoorcomponentssuchasutilities, signs,stairways,walkways,parkinglots,fencing,courtyardsandlandscaping

Structural Components –physicalcomponentssuchasthefoundations,walls,doors, windows,roofs

Electrical Components –allcomponentsthatuseorconductelectricitysuchaswiring, lighting,electricheaters,andfirealarmsystems

Mechanical Components –componentsthatconveyandutilizeallnon-electricalutilities withinafacilitysuchasgaspipes,furnaces,boilers,plumbing,ventilation,andfireextinguishing systems

Vertical Movement –componentsusedformovingpeoplebetweenfloorsofbuildingssuchas elevators,escalatorsandstairlifts

Oncecollected,thisinformationcanbeuploadedintotheCityWide®,themunicipality’sasset managementandassetregistrysoftwaredatabaseinorderforshort-andlong-termrepair, rehabilitationandreplacementreportstobegeneratedtoassistwithprogrammingtheshort-and long-termmaintenanceandcapitalbudgets.

Itisrecommendedthatthemunicipalitycontinueitsinspectionofstructuresandexpandits conditionassessmentprogramforothersegments.Itisalsorecommendedthataportionofcapital oroperatingfundingisdedicatedtothis.

2.4 Vehicles and Machinery & Equipment

Thetypicalapproachtooptimizingthemaintenanceexpendituresofvehiclesandmachinery& equipment,isthroughroutinevehicleandcomponentinspections,routineservicing,andaroutine preventivemaintenanceprogram.Mostmakesandmodelsofvehiclesandmachineryassetsare suppliedwithmaintenancemanualsthatdefinetheappropriateschedulesandroutinesfortypical maintenanceandservicing,andalsomoredetailedrestorationorrehabilitationprotocols.

Theprimarygoalofsoundmaintenanceistoavoidormitigatetheconsequenceoffailureof equipmentorparts.Anestablishedpreventivemaintenanceprogramservestoensurethis,asitwill consistofscheduledinspectionsandfollowuprepairsofvehiclesandmachinery&equipmentin ordertodecreasebreakdownsandexcessivedowntimes.

Agoodpreventivemaintenanceprogramwillincludepartialorcompleteoverhaulsofequipmentat specificperiods,includingoilchanges,lubrications,fluidchangesandsoon.Inaddition,workers canrecordequipmentorpartdeteriorationsotheycanscheduletoreplaceorrepairwornparts beforetheyfail.

Theidealpreventivemaintenanceprogramwouldmoveprogressivelyfurtherawayfromreactive repairsandinsteadtowardsthepreventionofallequipmentfailurebeforeitoccurs.

Itisrecommendedthatapreventivemaintenanceroutineisdefinedandestablishedforallvehicles andmachinery&equipmentassets,andthatasoftwareapplicationisutilizedfortheoverall managementoftheprogram.

2.5 Water System

Unlikesewermains,itisoftenprohibitivelydifficulttoinspectwatermainsfromtheinsidedueto theconstantandhigh-pressureflowofwater.Aphysicalinspectionrequiresadisruptionofservice toresidents,canbeanexpensiveexerciseandistimeconsumingtosetup.Itisrecommended practicethatphysicalinspectionofwatermainstypicallyoccursonlyforhigh-risk,large transmissionmainswithinthesystem,andonlywhenthereisarequirement.Thereareanumber ofhightechinspectiontechniquesintheindustryforlargediameterpipesbuttheseshouldbe researchedfirstforapplicabilityastheyarequiteexpensive.Examplesincluderemoteeddyfield current(RFEC),ultrasonicandacoustictechniques,impactecho(IE),andGeoradar.

Forthemajorityofpipeswithinthedistributionnetwork,gatheringkeyinformationinregardsto themainanditsenvironmentcansupplythebestmethodtodetermineageneralcondition.Key datathatmaybeused,alongwithweightingfactors,todetermineanoverallconditionscoreinclude age,materialtype,breaks,hydrantflowinspectionsandsoilcondition.

Itisrecommendedthatthemunicipalitycontinueitswatermainassessmentprogram,andthat fundsarebudgetedforthis.

2.6 Sewer Network Inspection (Sanitary and Storm)

ThemostpopularandpracticaltypeofsanitaryandstormsewerassessmentistheuseofClosed CircuitTelevisionVideo(CCTV).TheprocessinvolvesasmallroboticcrawlervehiclewithaCCTV cameraattachedthatislowereddownamaintenanceholeintothesewermaintobeinspected.

Thevehicleandcamerathentravelthelengthofthepipe,providingalivevideofeedtoatruckon theroadabovewhereatechnician/inspectorrecordsdefectsandinformationregardingthepipe.A widerangeofconstructionordeteriorationproblemscanbecaptured,includingopen/displaced joints,presenceofroots,infiltration&inflow,cracking,fracturing,exfiltration,collapse, deformationofpipeandmore.Therefore,sewerCCTVinspectionisaneffectivetoolforlocating andevaluatingstructuraldefectsandgeneralconditionofundergroundpipes.

EventhoughCCTVisanexcellentoptionforinspectionofsewers,itisafairlycostlyprocessand doestakesignificanttimetoinspectalargevolumeofpipes.

AnotheroptionintheindustrytodayistheuseofZoomCameraequipment.Thisisverysimilarto traditionalCCTV,however,acrawlervehicleisnotused.Rather,initsplace,acameraislowered downamaintenanceholeattachedtoapolelikepieceofequipment.Thecameraisthenrotated towardseachconnectingpipeandtheoperatoraboveprogressivelyzoomsintorecordalldefects andinformationabouteachpipe.Thedownsidetothistechniqueisthefurtherdownthepipethe imageiszoomed,thelessclarityisavailabletoaccuratelyrecorddefectsandmeasurement.The upsideistheprocessisfarquickerandsignificantlylessexpensive,andanassessmentofthe

manholecanbeprovidedaswell.Also,itisimportanttonotethat80%ofpipedeficiencies generallyoccurwithin20metresofamanhole.

Itisrecommendedthatthemunicipalitycontinueitswastewatermainassessmentprogram,and expandittoincludestormsewermains.Aportionofcapitaloroperatingfundingshouldbe dedicatedtothis.

2.7 Parks and Land Improvements

CSAstandardsprovideguidanceontheprocessandprotocolsinregardstotheinspectionofparks andtheirassociatedassets,e.g.,playspacesandequipment.Thelandimprovementsinspectionwill involvequalifiedgroupsoftrainedindustryprofessionals(operationalstafforlandscape architects)performingananalysisoftheconditionofagroupoflandimprovementassetsandtheir components.Themostaccuratewayofdeterminingtheconditionrequiresawalk-throughto collectbaselinedata.Thefollowingkeyassetclassificationsaretypicallyinspected:

Physical Site Components – physicalcomponentsonthesiteoftheparksuchasfences, utilities,stairways,walkways,parkinglots,irrigationsystems,monuments,fountains

Recreation Components – physicalcomponentssuchasplaygrounds,bleachers,backstops, splashpads,andbenches

Land Site Components –landcomponentsonthesiteoftheparksuchaslandscaping,sports fields,trails,naturalareas,andassociateddrainagesystems

Minor Park Facilities – smallfacilitieswithintheparksitesuchas:sunshelters,washrooms, concessionstands,changerooms,storagesheds

Itisrecommendedthatthemunicipalitycontinueitsparksconditionassessmentprogramandthat aportionofcapitaloroperatingfundingisdedicatedtothis.

3.Lifecycle Analysis Framework

Anindustryreviewwasconductedtodeterminewhichlifecycleactivitiescanbeappliedatthe appropriatetimeinanasset’slife,toprovidethegreatestadditionallifeatthelowestcost.Inthe assetmanagementindustry,thisissimplyputasdoingtherightthingtotherightassetattheright time.Ifthesetechniquesareappliedacrossentireassetnetworksorportfolios(e.g.,theentireroad network),themunicipalitycangainthebestoverallassetconditionwhileexpendingthelowest totalcostforthoseprograms.

3.1 Paved Roads

Thefollowinganalysishasbeenconductedatafairlyhighlevel,usingindustrystandardactivities andcostsforpavedroads.Withfutureupdatesofthisassetmanagementstrategy,themunicipality maywishtorunthesameanalysiswithadetailedreviewofpeermunicipalityactivitiesusedfor roadsandtheassociatedlocalcostsforthoseworkactivities.Allofthisinformationcanbeentered intotheCityWide®softwaresuiteinordertoperformupdatedfinancialanalysisasmoredetailed informationbecomesavailable.Thefollowingdiagramdepictsageneraldeteriorationprofileofa roadwitha30-yearlife.

Asshownabove,duringtheroad’slifecycle,therearevariouswindowsavailableforworkactivity thatwillmaintainorextendthelifeoftheasset.Thesewindowsare:maintenance;preventive maintenance;rehabilitation;andreplacementorreconstruction.

Thewindowsorthresholdsforwhencertainworkactivitiesshouldbeappliedcoincide approximatelywiththeconditionstateoftheassetasshownbelow:

sealing Emulsions Fair (Rehabilitationphase)

Resurface-mill&pave

Resurface-asphaltoverlay

Single&doublesurfacetreatment(forruralroads) Poor (Reconstructionphase)

VeryPoor (Reconstructionphase) 0-20

Reconstruct-pulverizeandpave

Reconstruct-fullsurfaceandbasereconstruction

Criticalincludesassetsbeyondtheirusefullives whichmakeupthebacklog.Theyrequirethesame interventionsasthe‘poor’categoryabove.

Withfutureupdatesofthisassetmanagementstrategy,themunicipalitymaywishtoreviewthe aboveconditionrangesandthresholdsforwhencertaintypesofworkactivityoccur,andadjustto bettersuitthemunicipality’sworkprogramand/orlevelsofservice.Thesethresholdsand conditionrangescanbeupdatedandarevisedfinancialanalysiscanbedone.Theseadjustments willbeanimportantcomponentoffutureAMPs,astheprovincerequireseachmunicipalityto presentvariousmanagementoptionswithinthefinancingplan.

Itisrecommendedthatthemunicipalityestablishalifecycleactivityframeworkforthevarious classesofpavedroadwithinthetransportationnetwork.

3.2 Bridges & Culverts

Thebestapproachtodevelopa10-yearneedslistforthemunicipality’sbridgestructureportfolio reliesonthestructuralengineerwhoperformstheinspectionstodevelopamaintenance requirementsreport,arehabilitationandreplacementrequirementsreportandidentifyadditional detailedinspectionsasrequired.

3.3 Buildings & Facilities

Thebestapproachtodevelopa10-yearneedslistforthemunicipality’sfacilitiesportfoliowouldbe tohavetheengineers,operationalstafforarchitectswhoperformthefacilityinspectionstoalso developacompleteportfoliomaintenancerequirementsreportandrehabilitationandreplacement requirementsreport,andalsoidentifyadditionaldetailedinspectionsandfollowupstudiesas required.Thismaybeperformedasaseparateassignmentonceallindividualfacility audits/inspectionsarecomplete.

Theabovereportscouldbeconsideredthebeginningofa10-yearmaintenanceandcapitalplan; however,withinthefacilitiesindustry,thereareotherkeyfactorsthatshouldbeconsideredto determineoverallprioritiesandfutureexpenditures.Someexampleswouldbefunctionaland legislativerequirements,energyconservationprogramsandupgrades,customercomplaintsand healthandsafetyconcerns,andcustomerexpectationsbalancedwithwillingness-to-payinitiatives.

Itisrecommendedthatthemunicipalityestablishaprioritizationframeworkforthefacilitiesasset classthatincorporatesthekeycomponentsoutlinedabove.

3.4 Vehicles and Machinery & Equipment

Thebestapproachtodevelopa10-yearneedslistforthemunicipality’svehiclesandmachinery& equipmentportfoliowouldfirstbethroughadefinedpreventivemaintenanceprogram,and secondly,throughanoptimizedlifecyclevehiclereplacementschedule.Thepreventive maintenanceprogramwouldservetodeterminebudgetrequirementsforoperatingandminor capitalexpendituresforrenewalofparts,andmajorrefurbishmentsandrehabilitations.An optimizedreplacementprogramwillensureavehicleorequipmentassetisreplacedatthecorrect pointintimeinordertominimizeoverallcostofownership,minimizecostlyrepairsanddowntime, whilemaximizingpotentialre-salevalue.Thereissignificantbenchmarkinginformationavailable withinthevehiclesindustryinregardtovehiclelifecycleswhichcanbeusedtoassistinthis process.Onceappropriatereplacementschedulesareestablished,theshort-andlong-termbudgets canbefundedaccordingly.

Thereare,ofcourse,functionalaspectsofvehiclesmanagementthatshouldalsobeexaminedin furtherdetailaspartofthelong-termmanagementplan,suchasvehiclesutilizationand incorporatinggreenvehicles,etc.Itisrecommendedthatthemunicipalityestablishaprioritization frameworkforthevehiclesassetclassthatincorporatesthekeycomponentsoutlinedabove.

3.5 Sanitary and Storm Sewers

Thefollowinganalysishasbeenconductedatafairlyhighlevel,usingindustrystandardactivities andcostsforsanitaryandstormsewerrehabilitationandreplacement.Withfutureupdatesofthis assetmanagementstrategy,themunicipalitymaywishtorunthesameanalysiswithadetailed reviewofactivitiesusedforsewermainsandtheassociatedlocalcostsforthoseworkactivities. ThisinformationcanbeinputintotheCityWide®softwaresuiteinordertoperformupdated financialanalysisasmoredetailedinformationbecomesavailable.Thefollowingdiagramdepictsa generaldeteriorationprofileofasewermainwitha100-yearlife.

Asshownabove,duringthesewermain’slifecycletherearevariouswindowsavailableforwork activitythatwillmaintainorextendthelifeoftheasset.Thesewindowsare:maintenance;major maintenance;rehabilitation;andreplacementorreconstruction.Thewindowsorthresholdsfor whencertainworkactivitiesshouldbeappliedalsocoincideapproximatelywiththeconditionstate oftheassetasshownbelow:

Criticalincludesassetsbeyondtheirusefullives whichmakeupthebacklog.Theyrequirethesame interventionsasthe“poor”categoryabove.

Figure 59 Sewer Main General Deterioration

Table 24 Asset Condition and Related Work Activity for Sewer Mains

Withfutureupdatesofthisassetmanagementstrategythemunicipalitymaywishtoreviewthe aboveconditionrangesandthresholdsforwhencertaintypesofworkactivityoccur,andadjustto bettersuitthemunicipality’sworkprogram.Alsonote:whenadjustingthesethresholds,itactually adjuststhelevelofserviceprovidedandultimatelychangestheamountofmoneyrequired.These adjustmentswillbeanimportantcomponentoffutureassetmanagementplans,astheprovince requireseachmunicipalitytopresentvariousmanagementoptionswithinthefinancingplan.

3.6 Water System

Aswithroadsandsewers,thefollowinganalysishasbeenconductedatahighlevel,usingindustry standardactivitiesandcostsforwatermainrehabilitationandreplacement.Thefollowingdiagram depictsageneraldeteriorationprofileofawatermainwithan80-yearlife.

Asshownabove,duringthewatermain’slifecycle,therearevariouswindowsavailableforwork activitythatwillmaintainorextendthelifeoftheasset.Thesewindowsare:maintenance;major maintenance;rehabilitation;andreplacementorreconstruction.Thewindowsorthresholdsfor whencertainworkactivitiesshouldbeappliedalsocoincideapproximatelywiththeconditionstate oftheassetasshowninTable25

Figure 60 Water Main General Deterioration

VeryGood (Maintenanceonlyphase)

81-100

Good (Preventivemaintenancephase) 61-80

Fair (Rehabilitationphase) 41-60

Maintenanceonly(cleaning&flushingetc.)

Watermainbreakrepairs Smallpipesectionrepairs

Structuralwatermainrelining

Poor (Reconstructionphase) 21-40 Pipereplacement

VeryPoor (Reconstructionphase)

0-20

Criticalincludesassetsbeyondtheirusefulliveswhich makeupthebacklog.Theyrequirethesame interventionsasthe“poor”categoryabove.

4. Growth and Demand

Growthisacriticalinfrastructuredemanddriverformostinfrastructureservices.Assuch,the municipalitymustnotonlyaccountforthelifecyclecostforitsexistingassetportfolio,butthoseof anyanticipatedandforecastedcapitalprojectsassociatedspecificallywithgrowth.Basedonthe 2016census,thepopulationforKawarthaLakeshasincreased3%since2011toreach75,423. Populationchangeswillrequirethemunicipalitytodeterminetheimpacttoexpectedlevelsof serviceandifanychangestotheexistingassetinventorymayberequired.

5. Project Prioritization and Risk Management

Generally,infrastructureneedsexceedmunicipalcapacity.Assuch,municipalitiesrelyheavilyon provincialandfederalprogramsandgrantstofinanceimportantcapitalprojects.Fundscarcity meansprojectsandinvestmentsmustbecarefullyselectedbasedonthestateofinfrastructure, economicdevelopmentgoals,andtheneedsofanevolvingandgrowingcommunity.Thesefactors, alongwithsocialandenvironmentalconsiderationswillformthebasisofarobustrisk managementframework.

5.1 Defining Risk Management

Fromanassetmanagementperspective,riskisafunctionoftheconsequencesoffailure(e.g.,the negativeeconomic,financial,andsocialconsequencesofanassetintheeventofafailure);and,the probabilityoffailure(e.g.,howlikelyistheassettofailintheshort-orlong-term).The consequencesoffailurearetypicallyreflectiveof:

An asset’s importance in an overall system:

Forexample,thefailureofanindividualcomputerworkstationforwhichtherearereadily availablesubstitutesismuchlessconsequentialanddetrimentalthanthefailureofanetwork serverortelephoneexchangesystem.

The criticality of the function performed:

Forexample,amechanicalfailureonaroadconstructionequipmentmaydelaytheprogressof aproject,butamechanicalfailureonafirepumpertruckmayleadtoimmediatelifesafety concernsforfirefighters,andthepublic,aswellassignificantpropertydamage.

The exposure of the public and/or staff to injury or loss of life:

Forexample,asinglesidewalkassetmaydemandlittleconsiderationandcarryminimum importancetothemunicipality’soverallpedestriannetworkandperformsamodestfunction. However,membersofthepublicinteractdirectlywiththeassetdailyandareexposedto potentialinjuryduetoanytriphazardsorotherstructuraldeficienciesthatmayexist.

Theprobabilityoffailureisgenerallyafunctionofanasset’sphysicalcondition,whichisheavily influencedbytheasset’sageandtheamountofinvestmentthathasbeenmadeinthemaintenance andrenewaloftheassetthroughoutitslife.

Riskmitigationistraditionallythoughtofintermsofsafetyandliabilityfactors.Inasset management,thedefinitionofriskshouldheavilyemphasizethesefactorsbutshouldbeexpanded toconsidertheriskstothemunicipality’sabilitytodelivertargetedlevelsofservice

Theimpactthatactions(orinaction)ononeassetwillhaveonotherrelatedassets

Theopportunitiesforeconomicefficiency(realizedorlost)relativetotheactionstaken

5.2 Risk Matrices

Usingthelogicabove,ariskmatrixwillillustrateeachasset’soverallrisk,determinedby multiplyingtheprobabilityoffailure(PoF)scoreswiththeconsequenceoffailure(CoF)score,as illustratedinthetablethatfollow.Thiscanbecompletedasaholisticexerciseagainstanydataset bydeterminingwhichfactors(orattributes)areavailableandwillcontributetothePoForCoFof anasset.Figure61(knownasabowtiemodelintheriskindustry)illustratesthisconcept.The probabilityoffailureisincreasedasmoreandmorefactorscolludetocauseassetfailure.

PROBABILITY OF FAILURE

Increasedbyfundamentaland immediatecausessuchasage, orobservedcondition

CONSEQUENCES OF FAILURE

Includesimmediateandlongtermeconomic,socialand environmental

Figure 61 Bow Tie Risk Model

Failure Event

Probability of Failure

InthisAMP,theprobabilityofafailureeventispredictedbytheconditionoftheasset.

Consequence of Failure

TheconsequenceoffailurefortheassetclassesanalyzedinthisAMPwillbedeterminedeitherby thereplacementcostsofassets,orotherattributesasrelevant.Theseattributesincludematerial types,classifications,orsize.Assetclassesforwhichreplacementcostisusedinclude:bridges& culverts,buildings&facilities,landimprovements,vehicles,andmachinery&equipment.This approachispremisedontheassumptionthatthehigherthereplacementcost,thelarger(andlikely moreimportant)theasset,requiringahigherriskscoring.

Assetsforwhichotherattributesareusedinclude:water,wastewater,stormandroads.Attributes areselectedbasedontheirimpactonservicedelivery.Forlinearinfrastructure,pipediameteris usedtoestimateasuitableconsequenceoffailurescoreasitreflectsthepotentialupstreamservice areaaffected.Scoringforroads,theriskisbasedonclassificationasitreflectsthetrafficvolumes andnumberofpeopleaffected.

$201to$400k

$401to$800k

$801to$1.5Million

$.5Millionandover

Scoreof2

Scoreof3

Scoreof4

Scoreof5

Table 26 Probability of Failure – All Assets

Table 27 Consequence of Failure – Roads

Table 28 Consequence of Failure – Bridges & Culverts

Table 29 Consequence of Failure – Water Mains Pipe Diameter

Less than 100mm

101–200mm

201–300mm

301–400mm

400mm and over

Table 30 Consequence of Failure – Sanitary Sewers Pipe Diameter

Less than 200mm

200-300mm

301-400mm

401-600mm

601mm and over

Table 31 Consequence of Failure – Storm Sewers Pipe Diameter

Less than 200mm

251-500mm

501-700mm

701-1,000mm

1,001mm and over

Table 32 Consequence of Failure – Buildings & Facilities

ReplacementValue

Upto$50k

$51kto$100k

$101kto$600k

$601kto$2million

Over$2million

Consequence of Failure

Score of 1

Score of 2

Score of 3

Score of 4

Score of 5

Consequence of failure

Score of 1

Score of 2

Score of 3

Score of 4

Score of 5

Consequence of Failure

Score of 1

Score of 2

Score of 3

Score of 4

Score of 5

Consequenceoffailure

Scoreof1

Scoreof2

Scoreof3

Scoreof4

Scoreof5

Table 33 Consequence of Failure – Machinery & Equipment Replacement Value Consequence of failure

Up to $10k

$11k to $15k

$16k to $20k

$21k to $30k

Over $30k

Table 34 Consequence of Failure – Land Improvements

Replacement Value

Up to $25k

$26k to $50k

$51k to $100k

$101k to $250k

Over $250k

Table 35 Consequence of Failure – Vehicles Replacement Value

Up to $25k

$26k to $60k

$61k to $100k

$101k to $350k

Over $350k

Score of 1

Score of 2

Score of 3

Score of 4

Score of 5

Consequence of failure

Score of 1

Score of 2

Score of 3

Score of 4

Score of 5

of failure

Score of 1

Score of 2

Score of 3

Score of 4

Score of 5

Theriskmatricesthatfollowshowthedistributionofassetswithineachassetclassaccordingtothe probabilityandlikelihoodoffailurescoresasdiscussedabove.

Figure 62 Distribution of Assets Based on Risk – All Asset Classes

Figure 63 Distribution of Assets Based on Risk – Road Network

Figure 64 Distribution of Assets Based on Risk – Bridges & Culverts

Figure 65 Distribution of Assets Based on Risk – Water System

Figure 66 Distribution of Assets Based on Risk – Sanitary Services

Figure 67 Distribution of Assets Based on Risk – Storm

Figure 68 Distribution of Assets Based on Risk – Buildings & Facilities

Figure 69 Distribution of Assets Based on Risk – Machinery & Equipment

Figure

Figure

InorderforanAMPtobeeffectiveandmeaningful,itmustbeintegratedwithfinancialplanning andlong-termbudgeting.Thedevelopmentofacomprehensivefinancialplanwillallowthe municipalitytoidentifythefinancialresourcesrequiredforsustainableassetmanagementbased onexistingassetinventories,desiredlevelsofserviceandprojectedgrowthrequirements.

InflationRequirements

RenewalRequirements

AmortizationofHistoricalCostof Investment

Principal&InterestPayments

OperationsandMaintenanceCosts

Figure72depictsthevariouscostelementsandresultingfundinglevelsthatshouldbe incorporatedintoAMPsthatarebasedonbestpractices.Municipalitiesmeetingtheiroperational andmaintenanceneeds,anddebtobligationsarefundingonlytheircashcost.Fundingatthislevel isseverelydeficientintermsoflifecyclecosts.

Meetingtheannualamortizationexpensebasedonthehistoricalcostofinvestmentwillensure municipalitiesadheretoaccountingrulesimplementedin2009;however,fundingisstilldeficient forlong-termneeds.Asmunicipalitiesgraduatetothenextlevelandmeetrenewalrequirements, fundingatthislevelensuresthatneedandcostoffullreplacementisdeferred.Ifmunicipalities meetinflationrequirements,they’repositioningthemselvestomeetreplacementneedsatexisting levelsofservice.Inthefinallevel,municipalitiesthatarefundingforserviceenhancementand growthrequirementsarefiscallysustainableandcoverfutureinvestmentneeds.

Typically,thebalanceofthissectionwouldoutlinealong-termfinancialstrategytobringannual assetreplacementexpenditureuptotheaveragelevelrequired.Inlieuofthis,however,Cityhas decidedtodevelopamorerefinedanddetailed10-yearfinancialstrategydirectly,whichappearsin ChapterXII(Appendix2)

X. 2016 Infrastructure Report Card

Thefollowinginfrastructurereportcardillustratesthemunicipality’sperformanceonthetwokeyfactors:AssetHealthandFinancial Capacity.Appendix1providesthefullgradingscaleandconversionchart,aswellasdetaileddescriptions,foreachgradinglevel.

Basedon2016replacementcost, andprimarilyconditiondata,over 70%ofassets,withavaluationof $1.2billion,areingoodtoverygood condition;18%areinpoortovery poorcondition.

Table 36 2016 Infrastructure Report Card

Appendix 1: Grading and Conversion Scales

A Excellent Assetisneworrecentlyrehabilitated

B Good Assetisnolongernew,butisfulfillingitsfunction.Preventivemaintenanceisbeneficialatthisstage.

C Fair

D Poor

F VeryPoor

Deteriorationisevidentbutassetcontinuestofullitsfunction.Preventivemaintenanceisbeneficialat thisstage.

Significantdeteriorationisevidentandserviceisatrisk.

Assetisbeyondexpectedlifeandhasdeterioratedtothepointthatitmaynolongerbefittofulfillits function.

A Excellent 90-100percent

B Good 70-89percent

ShortTerm

MediumTerm

LongTerm

C Fair 60-69percent

Themunicipalityisfullypreparedforitsshort-,medium-andlong-term replacementneedsbasedonexistinginfrastructureportfolio.

D Poor 40-59percent

ShortTerm

MediumTerm

LongTerm

Themunicipalityiswellpreparedtofunditsshort-termandmedium-term replacementneedsbutrequiresadditionalfundingstrategiesinthelong-term tobegintoincreaseitsreserves.

F VeryPoor 0-39percent

ShortTerm

MediumTerm

LongTerm

/

ShortTerm

MediumTerm

LongTerm

ShortTerm

MediumTerm

LongTerm

Themunicipalityisunderpreparedtofunditsmedium-tolong-term infrastructureneeds.Thereplacementofassetsinthemedium-termwilllikely bedeferredtofutureyears.

Themunicipalityisnotwellpreparedtofunditsreplacementneedsinthe short-,medium-orlong-term.Assetreplacementswillbedeferredandlevels ofservicemaybereduced.

Themunicipalityissignificantlyunderfundingitsshort-term,medium-term, andlong-terminfrastructurerequirementsbasedonexistingfundsallocation. Assetreplacementswillbedeferredindefinitely.Themunicipalitymayhaveto divestsomeofitsassets(e.g.,bridgeclosures,arenaclosures)andlevelsof servicewillbereducedsignificantly.

Appendix 2: Financial Strategy

ThissectioncontainstheforecastsfromtheCity’s10-YearFinancialPlan. Forthefullplan,pleaseseeCityofKawarthaLakesCouncilReportCORP2017020.

CityofKawarthaLakesTax-Supported10-YearFinancialPlan

Opening Tax Levy

Status Quo Tax Increase

Increase Summary

Levy Growth Summary

Financing

Transitional Debenture Continuity

Opening Remaining

2,500,000 2,500,000 (2,500,000) 0

City

ofKawarthaLakesWater/Wastewater10-YearFinancialPlan

Rate Levy Growth Summary

Closing Rate Levy

Capital Reserve Continuity