ADM-AM-006 - Capital Asset Risk Management Policy

Selkirk, Manitoba · adopted 2019-10-16

This is the exact embedded text of the captured official document. Snapshot 1dd2737831ab · verified 2026-06-10 · original document · archived snapshot · unofficial consolidation, the official version is held by the municipal clerk.

Selkirk ADM-AM-006 Capital Asset Risk Management Policy Date Approved: 19/10/16 Service: Administration Date of Last Update: 19/10/01 Sub-service: Asset Management Next Review Date: 23/10/01 Lead: Director of Operations Updates: ADM-CAM-006 - Capital Asset Risk Management Policy Implements: City of Selkirk Capital Asset Management By-law No. 5300 OBJECTIVES The objectives of this Policy are to: - define how the City calculates operational risk for capital assets. - establish critical asset characteristics for each capital asset subclass. - identify how the City considers risk when prioritizing capital projects. SUPPORTING POLICY, PROCEDURES, AND TOOLS Policy ADM-AM-001 - Capital Asset Registry Policy ADM-AM-003 - Capital Asset Life-Cycle Management Policy Procedures ADM-AM-006-01 - Procedure to Update the City of Selkirk Risk Registry ADM-AM-006-02 - Procedure to Monitor Service Area Operational Risk from Year to Year Tools: ADM-AM-001-00-01 - Capital Asset Registry ADM-AM-006-00-01 - City of Selkirk Risk Registry ADM-AM-001-02-01 - Annual Capital Asset Risk Report ADM-AM-006 - Capital Asset Risk Management Policy Page 1 of 13 INDEX 1 DEFINITIONS----------------------------------------------------------------------------------------------------3 2 SCOPE------------------------------------------------------------------------------------------------------------4 _ 3 DEFINING RISK-------------------------------------------------------------------------------------------------4 4 MAGNITUDE OF FAILURE CONSEQUENCE------------------------------------------------------------ 4 5 KEY DESTINATIONS------------------------------------------------------------------------------------------ 5 6 KEY COMMUNITY FACILITIES-------------------------------------------------------------------------------5 7 CRITICAL ASSET CHARACTERISTIC TABLES------------------------------------------------------------ 5 8 LIKELIHOOD OF OCCURANCE-----------------------------------------------------------------------------10 9 RISK SCORE------------------------------------------------------------------------------------------------------ 10 10 ACCEPTABLE RISK---------------------------------------------------------------------------------------------- 11 11 CLIMATE CHANGE CONSIDERATION--------------------------------------------------------------------11 12 RISK MANAGEMENT DECISIONS/PRIORITIZING ACTIONS----------------------------- ---------- 11 13 RISK REGISTRY-------------------------------------------------------------------------------------------------- 12 14 CURRENCY OF RISK REGISTRY------------------------- 12 15 MONITORING RISK---------------------------------------------------------------------------------------------12 16 POLICY REVIEW------------------------------------------------------------------------------------------------- 13 17 EFFECTIVE DATE------------------------------------------------------------------------------------------------ 13 ADM-AM-006 - Capital Asset Risk Management Policy Page 2 of 13 1 DEFINITIONS "Administration" means all management and staff of the City of Selkirk as outlined within the City of Selkirk Organization Chart. "Arterial Roads" means high capacity urban roads with the primary function being to deliver traffic from residential and collector roads to highways. "Asset Registry" means the ADM-AM-001-00-01- City of Selkirk Asset Registry document. "Capital Asset" means a Natural or Engineered Asset deemed material by the City and included in the City's Asset Registry. "Chief Administrative Officer" means the Chief Administrative Officer for the City of Selkirk as designated by by-law. "City" means the City of Selkirk. "Collector Road" means a road which traffic movement and access have similar importance. "Commercial District" means the area of Manitoba Avenue between PTH 9 and the Gaynor Family Library (806 Manitoba Avenue). This area also includes Morris Avenue, Superior Avenue, Manitoba Avenue, Calderone Avenue, Eaton Avenue, and Mclean Avenue between Eveline Street and Main Street. "Criticality Score" means the sum of all Critical Asset Characteristic scores, that is equal to a value between 0 and 10. This number shall be accepted as the magnitude of consequence in the risk equation. "Key Destination" means a destination that has been defined in section 5 of this Policy. "Service Critical Assets" means a select group of unique assets defined for each subclass that have been identified by service experts. These assets have inconsistent characteristics, but the function of the entire service depends on their function. "Key Community Facility" means a facility that has been defined in Section 6 of this Policy. "Natural Asset" means a naturally occurring land, water, air or subservice feature which performs or supports the delivery of a municipal service. "Operational Risk" means the risk associated with the reduction or elimination of service delivery due to unexpected asset failures. 'Residential Road" means a street or road in a mixed residential/local area that is lightly trafficked. ADM-AM-006 - Capital Asset Risk Management Policy Page 3 of 13 2 SCOPE 2.1 This Policy shall: 2.1.1 Outline what risk is, and how the City of Selkirk defines risk for individual Capital Assets. 2.1.2 Define what characteristics makes one asset more critical than other assets within the same service area. 2.1.3 Provide direction on how the City determines asset criticality, risk levels, and manages infrastructure risks. 2.1.4 Guide Administration on how decisions are made around risk, and how risk levels are incorporated into the decision-making process when prioritizing infrastructure projects. 3 DEFINING RISK 3.1 Operational Risk, which is the potential for loss in service delivery, shall be the type of risk being measured by this Policy. 3.2 Operational Risk is defined by the City of Selkirk as the Likelihood of Asset Failure multiplied by the Magnitude of Failure Consequence. 3.3 Each Capital Asset's Operational Risk shall be determined using the following equation: Operational Risk = Magnitude of Failure Consequence X Likelihood of Asset Failure 3.4 An asset's Criticality Score, as recorded in the City of Selkirk Risk Registry, shall be accepted as the Magnitude of Failure Consequence in the Operational Risk Equation. 3.5 An asset's condition, as recorded in the City of Selkirk Asset Registry, shall be accepted as the Likelihood of Asset Failure in the Operational Risk Equation. 3.6 When identifying Critical Asset Characteristics, the following general risk categories are considered: - Social Risk - EnvironmentalRisk - Economic Risk - Human Safety - Climate Risk - Political Risk 4 MAGNITUDE OF FAILURE CONSEQUENCE 4.1 An asset's Criticality Score shall be determined by the Critical Asset Characteristic Table developed for each subclass set out in Section 7. 4.2 A Critical Asset Characteristic Table shall be developed by asset subclass. Each table will contain a list of critical characteristics and potential variations. Each characteristic shall be weighted for importance, and each variation of the characteristic shall receive a score no ADM-AM-006 - Capital Asset Risk Management Policy Page 4 of 13 higher than the weighting of the characteristics. The higher the score of the characteristic variation, the more critical it makes the asset. 4.3 Overall Criticality Score for an individual asset shall be determined by summing the score of all Asset Criticality Characteristics. Equation: n - i=l 5 KEY DESTINATIONS Key destinations have been identified by Administration and include Selkirk Park, Selkirk Reginal Health Centre, Selkirk RCMP Detachment, and Selkirk Golf & Country Club. 6 KEY COMMUNITY FACILITIES Key Community Facilities have been identified by Administration and include Betel Personal Care Home, Tudor House Personal Care Home, Extendicare Red River Place, Selkirk Regional Health Centre, Selkirk Mental Health, City of Selkirk Fire Hall, and the Selkirk RCMP Detachment. 7 CRITICAL ASSET CHARACTERISTIC TABLES 7.1 Transportation Services 7.1.1 Road Subbase, Road Base and Road Surface Assets Characteristic # (C) Criticality Characteristic Total Weighting Variable Score C1 Traffic Count 3.5 Arterial Road 3.5 Collector Road 2.0 Residential Road 1.0 C2 Commercial District 2.0 Yes 2.0 No 0.0 C3 Primary Route to Key Destination 2.0 Yes 2.0 No 0.0 C4 Bus Route 1.5 Yes 1.5 No 0.0 C5 Truck Route 0.5 Yes 0.5 No 0.0 C6 Redundancy 0.5 Yes 0.5 No 0.0 ADM-AM-006 - Capital Asset Risk Management Policy Page 5 of 13 7.1.2 Traffic Count shall be determined by whether the road segment is classified as an arterial road, collector road, or residential road. The higher traffic flow, the more critical the road asset. 7.1.3 Commercial District is an area in which the primary use of land is for commercial activities such as shopping, restaurants, and offices. These are prioritized as they see an increased amount of traffic from both residents and non-residents of the City. 7.1.4 Primary Route to Key Destination is defined as the road network segments that are a part of the shortest and easiest way for an individual coming to a Key Destination within the City of Selkirk, if their origin was outside of the City boundaries. These assets have been prioritized because these are routes used frequently by those travelling to Selkirk from out of town. 7.1.5 The Bus Route shall be those road segments that are used for the City of Selkirk Bus Route. These assets have been prioritized because services provided by various trucks that use these routes, rely on the function of these road assets. 7.1.6 Redundancy in the road network means that there is an additional or alternate route that can be used to access areas of the City. A lack of redundancy increases the Criticality Score because the impact of a loss of service would be greater if there is no alternate route available. 7.2 Land Drainage Services 7.2.1 Storm Main Characteristic # (C) Criticality Characteristic Total Weighting Variable Score Cl Pipe Diameter 4.0 900-1650mm 4.0 600-750mm 2.0 200-525mm 1.0 C2 Service Critical Assets 3.0 Yes 3.0 No 0.0 C3 Current Over Capacity 2.0 Yes 2.0 No 0.0 C4 Predicted Over Capacity 1.0 Yes 1.0 No 0.0 7.2.2 Pipe Diameter is the diameter of each storm pipe, as determined by the City of Selkirk Asset Registry. The larger diameters have been given priority as it implies that larger pipes services more customers, and therefore would have a greater impact if the service was lost. 7.2.3 Service Critical Assets are a select group of assets that have been identified as critical by service experts. They are unique, but the entirety of the network depends on their function. For the Land Drainage Service Area, these assets are those outfall pipes that bring surface run off to the river. 7.2.4 Current Over Capacity is defined as an asset that is within an area that has been identified by City of Selkirk service experts as an area that floods frequently during rain events. These areas have been given increased weighting because they are currently failing or are providing service poorly during rain events, and due to climate ADM-AM-006 - Capital Asset Risk Management Policy Page 6 of 13 change predictions in the City of Selkirk, this loss of service will occur more frequently and with greater intensity. Data to be collected. 7.2.5 Predicted Over Capacity assets are those that are not currently over capacity but based on the expected climate change trends in the City of Selkirk, these will be problem areas in the future. To adapt to the changing climate, these assets have been prioritized. Data to be collected. 7.3 Wastewater Services 7.3.1 Wastewater Main Characteristic # (C) Criticality Characteristic Total Weighting Variable Score C1 Pipe Diameter 3.0 525-900mm 4.0 300-500mm 2.0 100-300mm 1.0 C2 Combined/Separated Sewers 2.5 Combined 2.5 Separated 0.0 C3 Service Critical Assets 2.0 Yes 2.0 No 0.0 C4 Force vs Gravity Sewer 1.5 Yes 1.5 No 0.0 C5 Key Community Facility Service Critical Asset 1.0 Yes 1.0 No 0.0 7.3.2 Pipe Diameter is the diameter of each wastewater main pipe, as determined by the City of Selkirk Asset Registry. The larger diameters have been given priority as it implies that larger pipes services more customers, and therefore would have a greater impact if the service was lost. 7.3.3 Combined/Separated Sewers means that the land drainage and sewer mains are or are not separated. Combined sewers have been given a higher priority due to the risk that they pose to the environment in times of high rainfall when there is potential for this material to be deposited in the river. In addition, the City has made it a priority to separate combined sewers to better manage the increased amount of storm water that is predicted due to climate change. 7.3.4 Service Critical Asset are a select group of assets that have been identified as critical by service experts. They are unique, but the entirety of the network depends on their function. In the Wastewater Service Area, these assets include the main directly after the Dufferin Lift Station. 7.3.5 Force vs Gravity Sewer defines the way in which materials are transported through a sewer main. Where slope is not great enough, sewer mains are forced as opposed to gravity. Forced gravity sewer mains have been prioritized because they are responsible for the movement of more effluent than a pipe of its diameter that is a gravity main. This extra weighting ensures that the pipe is prioritized, despite the diameter of the pipe. ADM-AM-006 - Capital Asset Risk Management Policy Page 7 of 13 7.3.6 Key Community Facility Service Critical Asset is a wastewater main asset that is within a critical distance from a Key Community Facility to the first tee in the main. These assets are prioritized because a break in these assets would result in immediate loss of service to the facility. 7.4 Water Services 7.4.1 Watermain Characteristic # (C) Criticality Characteristic Total Weighting Variable Score C1 Service Critical Assets 3.5 Yes 3.5 No 0.0 C2 Pipe Diameter 3.0 525-900mm 4.0 300-500mm 2.0 100-300mm 1.0 C3 Redundancy 2.0 No 2.0 Yes 0.0 C4 Key Community Facility Service Critical Asset 1.5 Yes 1.5 No 0.0 No 0.0 7.4.2 Service Critical Assets are a select group of assets that have been identified as critical by service experts. They are unique, and the entirety of the network depends on their function. For this Service Area, the Service Critical Assets are those that move water directly in or out of the Water Treatment Plant, or Reserve Tanks. 7.4.3 Pipe Diameter is the diameter of each water main pipe, as determined by the City of Selkirk Asset Registry. The larger diameters have been given priority as it implies that larger pipes service more customers, and therefore would have a greater impact if the service was lost. 7.4.4 Redundancy in the water network means that there is an additional or alternate watermain that services a specific area of the City. A lack of redundancy increases the Criticality Score because the impact of a loss of service would be greater if there is no alternate supply source. 7.4.5 Key Community Facility Service Critical Asset is a watermain asset that is within a critical distance from a Key Community Facility to the first tee in the main. These assets are prioritized because a break in these assets would result in immediate loss of service to the facility. 7.5 Parks and Recreation Services 7.5.1 Parks Characteristic # (C) Criticality Characteristic Total Weighting Variable Score C1 Park Category 3.5 Reginal Park 3.5 Community Park 2.5 ADM-AM-006 - Capital Asset Risk Management Policy Page 8 of 13 Neighborhood Park 1.5 C2 Amenities 2.5 ' > X amenities present 2.5 < X amenities Present 0.0 C3 Natural Assets 2.5 Yes - The majority of surroundings are Natural Assets 2.5 No - The majority of surroundings are not natural assets, they are groomed 0.0 C4 Seasonal 1.5 Yes - This is open year­ round 1.5 No - This is open for only a specific season 0.0 7.5.2 Park Category is defined by the Selkirk Recreation Master Plan. A regional park is defined as facilities and parks that are designed to serve a critical mass of participants, and people will travel throughout the region to visit. A Community Park provides services to a smaller market than regional parks; they are multipurpose and multi-use in nature. Neighborhood parks serve residents near their home and provide access to basic recreation activities. 7.5.3 Amenities are defined as a desirable or useful feature in a park, such as benches, washrooms, picnic areas, recreation structures etc. 7.5.4 Natural Assets describe the assets that are present and surround the park. Natural Assets within or surrounding the park are prioritized as it is more difficult to replace these assets, than it would be to replace engineered or groomed park areas. 7.5.5 Seasonality of a park is defined by the seasons of operation, whether it is open year round or only during specific seasons. 7.6 Pathways Characteristic # (C) Criticality Characteristic Total Weighting Variable Score C1 Natural Assets 3.3 Yes 3.3 No 0.0 C2 Number of Users 3.0 Regional 3.0 Community 2.0 Neighbourhood 1.0 C3 Connectivity 2.0 > 5 Entry Points 2.0 < 5 Entry Points 1.0 C4 Accessible 1.7 Yes, this park is accessible to all 1.7 No, this park is not accessible to all 0.0 ADM-AM-006 - Capital Asset Risk Management Policy Page 9 of 13 7.6.1 Natural Assets describe the assets that are present and surround the pathways. Natural Assets within or surrounding the pathways are prioritized as it is more difficult to replace these assets, than it would be to replace engineered or groomed park areas. 7.6.2 Number of Users is defined by the category of park that the pathway is located within. This can be either a Neighborhood Park, a Community Park, or a regional facility. 7.6.3 Connectivity of a pathway is defined by the number of entry points to the pathway. This is a measure of capacity for interconnection with the active transportation or sidewalk network, and a gauge of how easily accessible it is to users. Data to be collected. 7.6.4 Accessible is a pathway that is flat with no barriers for wheelchair mobility. Data to be collected. 8 LIKELIHOOD OF OCCURANCE An assets' likelihood of occurrence is equal to the condition score of the asset. 9 RISK SCORE 9.1 A risk score shall be determined for each asset in the City of Selkirk Capital Asset Registry. 9.1.1 Risk score shall be calculated by using the following equation: Risk Score = Operational Risk X Service Area Multiplier 9.1.2 Due to differences between service areas and some being inherently more critical than other due to the type of risk consequences, assets belonging to different service areas cannot be compared using operational risk values. A service area multiplier must be applied before comparing risk between assets of different service areas. 9.1.3 The following table shall define the Service Area Multiplier to be applied to each Service Area when comparing risk. 9.1.4 The weighting for each service area takes into consideration health and human safety, climate change impacts, legislative requirements, as well as service delivery expectations. Service Area Service Area Multiplier Water Services 10.0 Wastewater Services 8.0 Land Drainage Services 7.0 Transportation Services 6.0 Parks and Recreation Services 4.0 ADM-AM-006 - Capital Asset Risk Management Policy Page 10 of 13 10 ACCEPTABLE RISK 10.1 There shall be risk associated with all City assets. There is not a condition of zero risk. 10.2 If a temporary loss of service in a service area is acceptable for the asset in question, that asset may be allowed to deteriorate to a point that represents a high probability of failure. 10.3 As the City continues to develop this tool, an acceptable risk level shall be established for each service area. 11 CLIMATE CHANGE CONSIDERATION 11.1 Opportunities to mitigate, adapt or increase resiliency to climate change were identified throughout the Critical Asset Characteristic weighting process, and those characteristics that increased the City's adaptation were weighted to reflect higher priority. 11.2 Consideration was given to climate change, and the City's Climate Change Adaptation Strategy in the following ways: 11.2.1 The Land Drainage Service Area's Critical Asset Characteristic identifying areas that are likely to be over capacity based on future precipitation predictions being prioritized over those assets that have sufficient capacity for future precipitation predictions. 11.2.2 Prioritization of sewers that have the potential to be separated is built into consideration by the level of weighting these assets receive. This is important for both the land drainage network, as well as the wastewater network as the climate changes. 11.2.3 Prioritization of Natural Assets and recognizing the importance of biodiversity, protection of environmental services such as storm water absorption, carbon sequestration and tree shading, through the increased score associated with parks and pathways that have Natural Assets. 11.3 As asset classes are added, climate mitigation, adaptation and resiliency will be prioritized throughout Critical Asset Characteristic weightings. 12 RISK MANAGEMENT DECISIONS/PRIORITIZING ACTIONS 12.1 All assets shall be managed according to the Capital Asset Life-Cycle Management Policy to ensure assets are designed, managed, and operated in a way that meets organizational objectives and minimizes operational risk. 12.1.1 Preventative maintenance scheduled for each asset subclass outlined by the Capital Asset Life-Cycle Management Policy shall be followed to reduce the risk of operational failure. 12.1.2 Infrastructure projects that have a high overall Risk Score shall be generally prioritized over infrastructure projects with a low-Risk Score. 12.1.3 In the situation where more than one infrastructure project is being considered and both have a high-risk score, the conflict shall be discussed among Administration and a decision will be made with considerations of the types of risk and consequences associated with each. ADM-AM-006 - Capital Asset Risk Management Policy Page 11 of 13 13 RISK REGISTRY 13.1 The City shall develop and maintain a digital Risk Registry, which contains an asset Criticality Score for each asset, based on that asset subclasses Critical Asset Characteristic Table. 13.2 All Capital Assets within an Asset Subclass that has a defined Critical Asset Characteristic Table in this Policy shall be included in the Risk Registry. 14 CURRENCY OF RISK REGISTRY 14.1 Administration shall ensure that the Risk Registry is maintained and kept current according to the provisions set out in this Policy. 14.1.1 Capital Assets in the Risk Registry shall, as practicable, be recorded or updated in the Risk Registry within 30 days of their requirement, procurement, or completion of construction. 14.1.2 When adding, removing, or making an update to an asset in the Risk Registry, the impact on adjacent assets in the network must be considered by revaluating critical asset risk scores. 14.1.3 The Critical Asset Characteristics for all assets shall be reviewed annually to ensure the accuracy of the Risk Registry. 15 MONITORING RISK 15.1 The Service Area Operational Risk score for each service area shall be calculated using the following equation: Service Area Operational Risk Score = A y Operational Risk Scoret i=l y Worst Case Scenario Riskt i=l 15.2 At the end of the year, the Service Area Operational Risk score for each service area identified in the City of Selkirk Asset Registry Policy shall be documented in the Annual Sustainable Service Delivery Report Card and compared to the previous years overall risk scores to monitor risk levels from year to year. 15.3 Worst Case Scenario Risk shall assume that all assets belonging to a service area have the greatest Likelihood of Failure (5). 15.4 Based on the Service Area Operational Risk Score, the service areas level of risk shall be determined based on the following table: ADM-AM-006 - Capital Asset Risk Management Policy Page 12 of 13 Service Area Operational Risk Score Range Service Area Risk Category 81-100 Very High 61-80 High 41-60 Medium 21-40 Low 0-20 Very Low 16 POLICY REVIEW This Policy shall be reviewed no less than every five years from the date it is effective. 17 EFFECTIVE DATE This Policy shall be effective as of January 30, 2019. Recommended By: Edie Henrichsen_____________ Edie Henrichsen Director of Corporate Services __________ 19/10/16__________ Date Recommended (YY/MM/DD) Approved By: Duane Nicol_____________ Duane Nicol Chief Administrative Officer _______ 19/10/16________ Date Approved (YY/MM/DD) ADM-AM-006 - Capital Asset Risk Management Policy Page 13 of 13