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SAINT JOHN
Title: Asset Management
Policy
Subject:
Asset Management
Category:
Finance
and
Administrative
Services
FAS)
Policy No.: FAS-001
M& C Report No.: 2018- 68
Effective
Date: April 27, 2018
Next Review Date: ( 3 years)
Area( s) this policy applies to: Cross Corporate
Office Responsible for review of this Policy:
Finance and Administrative Services
Related
Instruments:
Policy
Sponsor:
Commissioner
Finance
and
FAS- 005 Operating
Budget
Administrative
Services
M& C 2017- 301 Grant
Agreement
with
FCM
Document
Pages: This
document
consists
of
16
pages.
Revision
History:
This
revises
the March
6th, 2017 Asset
Management
Policy Statement
in order to meet the Federation
of Canadian Municipalities Funding Agreement for Climate and Asset Management Network (CAMN).
Common Clerk' s Annotation for Official Record
I certify that the Asset Management
Policy Statement was adopted
by
Common
Council
on
March
12, 2018
1 certify the Asset Management Policy was approved by the City Manager
on April
27, 2018
6'
April
27, 2018
Common
Clerk
Date
Contact: Commissioner
Finance and Administrative Services, Kevin Fudge
Telephone: 635- 2011
Email: kevin. fudge@saintjohn.
ca
TABLE
OF CONTENTS
1. POLICY
STATEMENT
2. SCOPE.
3
4
3. LEGISLATION
AND
STANDARDS...............................................................................................
4
4. ROLES
AND
RESPONSIBILITIES.................................................................................................
4
5. MONITOR
AND
REVIEW..........................................................................................................
5
6. IMPLEMENTATION..................................................................................................................
5
7. AUTHORIZATION....................................................................................................................
5
8. RESOURCES............................................................................................................................
5
9. STRATEG
I ES............................................................................................................................
5
10. GLOSSARY.............................................................................................................................
6
11. INQUIRIES..............................................................................................................................
6
12. APPENDICES...........................................................................................................................................
7
2
4__..
SAINT
JOHN
ASSET MANAGEMENT
CITY OF SAINT JOHN
POLICY
STATEMENT
POLICY
SECTION:
ASSET AND
ENERGY
DIVISION
OF FINANCE
AND ADMINISTRATIVE
SERVICES
1.
POLICY
STATEMENT
To confirm the City of Saint John' s ( City' s) support for implementing
asset management
practices to
ensure sustainable delivery of services, the City adopts the following statement.
The City of Saint John shall adopt and apply recognized asset management practices in support of
delivering services to its customers reflecting the vision presented
in the City' s Municipal
Plan, PlanSJ,
and related strategic
plans.
Specific objectives of the Asset Management ( AM) policy are to:
Improve the reliability of customer service by maintaining clearly defined levels of service.
Improve the decisions related to the management of the City' s assets.
Improve the transparency and accountability of community investments in the management of
the City' s assets.
Improve the management of the City' s exposure to risks of reduced service delivery.
Facilitate the leveraging of partnerships and infrastructure funding from external sources.
The City shall maintain a strategy for the implementation of asset management practices across the
organization. The strategy will incorporate the following asset management principles:
Incorporating industry recognized asset management protocols.
Defining levels of service.
Applying risk- based decision- making processes.
Utilizing lifecycle costing principles.
Incorporating
continuous
improvement
practices.
Considering
the effects of climate
change.
3
Asset
management
will
be considered
and
integrated
in the development
of all other
organizational
plans, including capital and operating budgets.
2.
SCOPE
This policy applies to all City of Saint John activities
related to all assets of the City.
3.
LEGISLATION
AND STANDARDS
Province
of New
Brunswick
Local
Governance
Act
4.
ROLES
AND
RESPONSIBILITES
Refer to the Governance Structure outlined in the AM strategy ( Appendix A - 3. 1) for a hierarchical
representation of the following roles.
4. 1 City Council
Adopt AM policy.
Ensure sufficient
resources are available to manage the City' s assets.
Revise and update the AM policy as required.
4. 2 Finance Committee
Coordinate interaction between Council and the Senior Leadership Team
4.3 Senior Leadership Team
Establish and maintain an AM strategy to implement the AM policy.
Report to Council on the progress of meeting the AM policy objectives.
Direct the AM Steering Group to develop and maintain an AM work plan to complete the AM
strategies.
4. 4 AM Coordination
Team ( part of AM Steering
Group)
Prepare
annual
asset
management
plan ( AMP).
Submit AMP to the provincial government to satisfy regulatory and funding requirements.
Establish and direct AM Support Groups as required.
Report to the Senior Leadership
Team on the implementation
of the of the AM strategy.
4.5 AM Steering Group
Establish and maintain an AM work plan to implement the AM strategy.
Coordinate
AM
activities
across
the organization.
Coordinate with AM Support Groups to develop the AM work plan.
4
4. 6 AM Operation Teams
Execute
the AM
work
plan.
Report to the AM Steering Group on the results of AM work plan.
Coordinate
with AM Support
Groups
to execute
the AM work
plan.
4. 7 AM Support Groups
Provide specialized
expertise to support AM Steering Group to establish and maintain the AM
work plan.
Provide
specialized
expertise
to support
the AM Operation
Teams
to execute
the AM work
plan.
S.
MONITOR
AND
REVIEW
This Policy will be reviewed every 3 years, and as determined by the City Manager.
6.
IMPLEMENTATION
This
Policy will
be implemented
under the authority
of the City Manager
by the Asset &
Energy
Management
Division
of Finance
and Administrative
Services.
7.
AUTHORIZATION
This
Policy shall
be authorized
by the City Manager
pursuant
to
a resolution
of Common
Council
approving
the associated "
Asset Management"
Policy Statement.
8.
RESOURCES
The City recognizes that a successful asset management program depends upon the employees of the
City of Saint John along with Common
Council.
9.
STRATEGIES
The following represent the current asset management strategies to set the direction from Senior
Management to Department
staff for improving
and sustaining
asset management
practices and to
ensure
these
practices
are applied
consistently
across
the
organization.
These
current
strategies
are
presented to illustrate the continuity from the Asset Management Policy to the Asset Management
Strategies, and it should
be noted that staff will adjust these strategies
as asset management
practices
evolve.
4. 1.
Improve
Departmental
Interaction
Improve the work flow business
processes
between
departments
to increase the integration
of
asset lifecycle activities ( operations, maintenance, refurbishments, renewals
and replacements)
5
between
both different
hard -asset departments
as well
as between
these departments
and
finance.
4.2. Improve Data Sharing
Improve the asset management
tools that integrate
data sources
and systems to increase the
availability and sharing of asset data within the entire organization.
4. 3. Improve Data Software
Improve
the
asset
management
tools
to
facilitate
the
generation
and
extraction
of
asset
management
information from stored asset management
data.
4. 4. Define
Asset
Risks
Improve/ increase
the asset
management
activities
and
resources
needed to prioritize
asset
refurbishments,
renewals
and
replacements
based
on
defined
and
quantified
asset
risks,
including the risks and vulnerabilities associated with climate change.
4. 5. Define
Performance
Metrics
Implement/ refine
asset
management
activities
to define
levels
of service
and
monitor
and
report on the effectiveness
of asset management.
4. 6. Define Asset Lifecycle Needs
Implement
asset management
activities
to define and quantify
asset lifecycle
needs based on
risk, lifecycle cost ( including the cost of greenhouse gas emissions) and service provision.
4. 7. Lengthen
Planning
Horizon
Implement
asset management
activities to increase the depth ( duration) of asset management
and financial plans.
10. GLOSSARY
None.
11.
INQUIRIES
Inquiries regarding this Policy can be addressed to the City of Saint John' s Asset & Energy
Management
Division
of Finance
and Administrative
Services.
12.
APPENDICES
Appendix A - City of Saint John Asset Management
Strategy
APPENDIX A
Saint John Asset Management Strategy
Date: February
28, 2018
Version:
3. 0
1.
PURPOSE
The purpose of the Saint John Asset Management Strategy is to set out the long- term approach to
the management of the City' s Assets and the development of the City' s Asset Management
practices. The Strategy sets the direction from Senior Management to Departmental staff for
improving
and sustaining
asset management
practices
and ensuring
these practices
are applied
consistently across the organization. In its simplest form, the improvement of asset management
practices
relates to the City' s ability to answer the six questions
of asset management ...
What have
you got? What is it worth? What is its condition/ performance? What needs to be done to it? When
does it need to be done? How much will it cost?
This strategy
will
be reviewed
annually
and
updated
to reflect
progress
in the implementation
of
asset management
practices.
2.
CONTEXT
The Asset Management Strategy is not a standalone document but is part of a document hierarchy
and a broader context for the overall management of the City' s assets, as noted in Figure
1 and
detailed below.
2. 1. Plan SJ ( approved 2011)
Plan
SJ
is
Saint
John'
s
Municipal
Plan.
It
establishes
a
community
vision
to
guide
the
development and investment
in the City of Saint John over the course of the Plan' s 25 -year
planning
period.
Importantly, Plan
SJ
incorporates guidance
and
strategies
for municipal
services
and infrastructure. Prepared
through
a significant
public
consultation
engagement
process, Plan
SJ is an over -arching
guidance
document
for the development
and growth
of the
City and management
of the City' s assets.
Responsibility:
Council
and Public
FA
2. 2. AM Policy
The
Asset
Management
Policy
articulates
Council'
s
commitment to asset management and Council' s direction
to
guide
staff
in
improving
AM
practices
in
the
organization. It is a document approved
by City Council
supporting
the implementation
of the community
vision
represented
in
Plan
SJ
specific
to
infrastructure
in
delivering services to the public.
Responsibility: Council
2. 3. AM Strategy
The
Asset
Management
Strategy
articulates
senior
management'
s
commitment
to
implementing
the
City' s
Asset
Management
Policy.
The
document
sets
the
direction
from Senior Management
to Departmental
staff
for improving and sustaining asset management practices
and to ensure these
practices
are applied
consistently
across the organization.
Responsibility:
Senior Management
team
Figure
1
Document Hierarchy for AM
1. "
Plan SY' __$
j
Council /
Public)
COMMUNITY
PLAN
sa
n,
ohn
Asset
Management
2. AM Policy
Policy
Council)
GpprovMbytnun
il:
5amtlohn
Asset
Management
3. AM Strategy
Strategy
Senior
Management)
0
2. 4. AM Work Plan ( Roadmap)
4. AM Work
Plan--®
The Asset Management Work Plan is a set of activities to (
Departmental
be implemented by Departmental staff in accordance with
Staff)
the
Strategic
directions
established
by
the
Senior
Management Team and includes required resources and timing details to complete the plan.
The Roadmap activities developed
in this hierarchy of linked asset management
documents
ensures a connectivity between Council priorities and the day-to- day activities and resources
required to improve the asset management processes supporting the City' s delivery of services.
3.
STRUCTURES
There are several " structures" on which an asset management
program
is founded. These include a
governance structure required to establish a hierarchy of corporate responsibilities within the
organization, and an activities structure represented
in a framework that includes asset
management
activities and the work flows, resources
and tools required to ensure these activities
are integrated and coordinated across the City
F?
3. 1. Governance
Structure
The governance
structure
is a foundational
component
of the asset
management
program. It
provides an organizational structure for the development of asset management tools, guidelines
and processes, as well as oversight for their application
across the organization. The Saint John
governance
structure
is shown in Figure 2, below, while the roles and responsibilities
within the
governance
structure are as follows.
3. 1. 1.
City Council
Adopt AM policy.
Ensure sufficient
resources
are available
to manage the City' s assets.
Revise and update the AM policy as required.
3. 1. 2.
Finance Committee
Coordinate interaction between Council and the Senior Leadership Team
3. 1. 3.
Senior Leadership Team
Establish
and maintain
an AM strategy to implement the AM policy.
Report to Council
on the progress
of meeting the AM policy objectives.
Direct the AM Steering Group to develop and maintain an AM work plan to complete the
AM strategies.
3. 1. 4.
AM Coordination
Team ( part of AM Steering
Group)
Prepare
annual
asset
management
plan ( AMP).
Submit AMP to the provincial government to satisfy regulatory and funding requirements.
Establish and direct AM Support Groups as required.
Report to the Senior Leadership
Team on the implementation
of the of the AM strategy.
3. 1. 5.
AM Steering
Group
Establish and maintain an AM work plan to implement the AM strategy.
Coordinate
AM activities
across
the organization.
Coordinate with AM Support Groups to develop the AM work plan.
3. 1. 6.
AM Operation Teams
Execute
the AM work
plan.
Report to the AM Steering
Group on the results of AM work plan.
Coordinate with AM Support Groups to execute the AM work plan.
3. 1. 7.
AM Support Groups
Provide
specialized
expertise
to support
AM Steering
Group
to establish
and
maintain
the
AM work
plan.
Provide
specialized
expertise
to support
the
AM
Operation
Teams
to execute
the
AM
work
plan.
G;
City Council
Finance Committee
Leademhip
AM Program Sponsor
FacilitiesTransportation
Management
Leisure
Services
Saint
John
Water
W`
Environment
VIII &
A&
A
4.
1 & ;
ij( u
1 &
46
Fleet
Inagement
SJ
Transit
ublic
Safe
SJ
Parkin
Commission
9
Safety
9
II
t -
A, &
4& ' & &+ -
Risk &
Climate
Change
Data &
IT
Management
Life
Cycle
Planning
Levels
of
Service
Other_.
AM Coordination Team
7AMagw
Corporate Planning
FinanceDevelopment
Growth & Community
1
i
i
Facilites Manage
Transportation &
Saint John Water
Environment
uu,_
i
Fleet Manag
Tranatt,:
ublic Safety
SJ Parking Commission
FacilitiesTransportation
Management
Leisure
Services
Saint
John
Water
W`
Environment
VIII &
A&
A
4.
1 & ;
ij( u
1 &
46
Fleet
Inagement
SJ
Transit
ublic
Safe
SJ
Parkin
Commission
9
Safety
9
II
t -
A, &
4& ' & &+ -
Risk &
Climate
Change
Data &
IT
Management
Life
Cycle
Planning
Levels
of
Service
Other_.
3. 2. Activities Structure - Asset Management
Framework
The Asset
Management
Framework (
Figure
3) is
a structure
representing
asset
management
activities. The activities in this framework have been developed
based on the simple process of
asset management defined by answering the 6 basic questions of asset management. The six
questions represent the core Lifecycle Management
activities and are listed below.
1.
What do you have?
2.
What is it worth?
3.
What
is its condition/
performance?
4.
What do you need to do to it?
5.
When do you need to do it?
6.
How much money do you need?
Figure 3 -- Asset
Management
Framework
G
Vision
I Strategic
Levels of
Customer
Regulatory
Service
Expectations
Sustainability
Growth
Requirements
Risk
Analysis
will
consider
the
risks
and
vulnerabilities
contributed
by
climate
change.
Cost/
Benefit
Analysis
will
consider
the
social
cost
of
carbon.
11
Asset
Portfolio
Financial
Future
Inventory/
Historical
Re
Ortin g
Demands
Attributes
Performance
Data
L
Valuation
TCA)
Life -Cycle
Analysis * **
Financial
Master
CapacityRemainingRisk
Cost/ Benefit
Analyses
Planning
Analysis
y
Life
Analysis
Analysis
Cash
Flow Forecast
Life -Cycle
Management
Plans
LOng- Term
Demand
Management
Risk
Financial
Plan
Plans
Additions
Replacement
O& M
Management
Funding/ Revenue
State of the Infrastructure
Customer and Public
Performance Measures
Reports
Feedback
and Risk Ratings
Risk
Analysis
will
consider
the
risks
and
vulnerabilities
contributed
by
climate
change.
Cost/
Benefit
Analysis
will
consider
the
social
cost
of
carbon.
11
Figure
3,
above,
represents
the
asset
management
activities
as
a
framework
for
continuous
improvement in the delivery of services to the public utilizing infrastructure systems ( assets).
There
are several
other important
aspects of the asset
management
process associated with the
execution of the life cycle management
activities:
the work flow business processes that describe how the City of Saint John undertakes the AM
activities,
the resources ( staff) with AM capabilities / training to undertake the activities described in
the work flow processes, and
the tools ( particularly information technology tools, i. e. data storage, data transfer and
analytical systems) that support the City Departments in their application of asset
management activities.
Figure 4, below, represents
these other components
required
to implement
the asset management
activities.
Figure
4 -- Work flow Processes, Resources
and AM Tools
12
Asset Management
Activities
Corso-
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5ervke)
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nd
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4-^
Monitoring
and
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Pubec
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Risk
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Vision/ Strategic
Goals ( Levels
of
Service) Politic
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m
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M..<.
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Cur
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Demand
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Demajnd
Management .......,...
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a
alnw_
Mauer
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Plannng
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and
1
Demand _..
Monitoring
and
Reporting
Slate
of
infrastructure Customer/
Public
Reports
Feedback
Asset
Management Resources
Corporate
Vision
Strategic
Goals (Levels of
Service) Poetical
Drivers
Busm
ss
D --
Demand
Life
Cycle
Management
Financial
Management .......,...
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and
aa
k
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Cav
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nn
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low
anagern
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7_..........
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andReporting State
of
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Key
Performance &
Risk
Reports
Feedback
Ratings '
i
Financial
Management
pngtb
n n
l
Cash
Flow Fora",
Key
Performance8
RiskMMI
Rabngs
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Management Tools
Corporate
Vision / Strategic
Goals ( Levels
of
Service) Potnical
Drners
Business
Drivers
Demand
Life
Cycle
Management Financial
Management ^-- -^-
W+
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Current
future
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ianaiMe
Demand
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Flow
Demand ..,-.,,...,
F--
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Management . ............
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eevenue
Plan
Monitoring
and
Reporting State
of
Infrastructure Customer, /
Pubec
Key
Performance & Risk
Reports
Feedback
Rabngs
Based
on the
representations of the Asset Management Framework above, the key
components of the
AM
Framework used to
evaluate the City' s
current asset
management practices includes the
following:
1.
The
six
questions of
Asset Management: a)
What
do you have? b)
What
is it
worth? c)
What
is
its
condition/ performance? d)
What
do you need to do to it?
e)
When
do you need to do it?
f)
How
much money do you need? 2.
The
four dimensionsof the AM Framework including: a)
AM
activities 13
b)
AM workflow business processes
c)
AM resources
d)
AM tools
4.
Strategies
The asset management improvement strategies
presented
below were formulated
by identifying
which of the six questions of asset management could not be answered due to the recurring and
organization - wide
issues, and which
of the four dimensions
of the asset
management
framework
were the root causes of this.
4. 1.
Improve
Departmental
Interaction
The
fragmentation
of
the
organization (
limited
interaction
between
service
groups/ departments) interferes with answering the following asset management questions in
an integrated manner ( i. e. between different departments owning assets that affect each other,
as well as between finance and other departments): what is its condition/ performance, what do
you need to do to it, when do you need to do is, and how much money do you need? The root
cause of this is a lack of work flow business processes, while the fragmentation of data ( issue 2)
and the difficulties in extracting information from the data systems ( issue 3) are related and
aggravate the organizational fragmentation.
Strategy:
Improve
the
work flow
business
processes
between
departments
to
increase
the
integration of asset lifecycle activities ( operations, maintenance, refurbishments, renewals and
replacements)
between
both
different
hard -asset
departments
as
well
as
between
these
departments
and finance.
4. 2. Improve
Data Sharing
The
fragmentation
of
data
both
between
different
departments
and
within
individual
departments interferes with answering all six asset management questions. The root cause for
this
is a lack of asset management
tools, while the organizational
fragmentation (
issue
1) and
the difficulties
in extracting information from the data
systems ( issue
3) are related
and
aggravate the data fragmentation.
Strategy: Improve
the asset management
tools that integrate
data sources and systems
to
increase the availability and sharing of asset data within the entire organization.
4. 3. Improve Data Software
The difficulty in extracting information from the current software packages used to collect and
store data interferes with answering all six asset management questions. The root cause for this
is a lack of asset management
tools, while the organizational
fragmentation (
issue
1) and the
14
data
fragmentation ( issue
2) are related and aggravate the difficulties
in extracting
asset
management
information from the data systems.
Strategy: Improve the asset management tools to facilitate the generation and extraction of
asset management information from stored asset management data.
4. 4. Define
Asset
Risks
The lack of priority/ risk ratings for all the assets being managed interferes with answering the
following asset management questions: what is its condition/ performance, what do you need to
do it, and when do you need to do it? The root causes for this are deficiencies
within the asset
management
activities ( condition
assessments
and
risk quantification) and
resources.
The City' s location on the Bay of Fundy, the St. John River, and the Kennebecasis River makes
the community particularly susceptible and vulnerable to the effects of climate change and
rising water levels. As a result, climate change impacts shall be included in the development of
risk ratings.
Strategy: Improve/ increase the asset management activities and resources needed to prioritize
asset refurbishments, renewals
and replacements
based
on defined and quantified
asset risks,
including the risks and vulnerabilities associated with climate change.
4. 5. Define
Performance
Metrics
The lack of defined levels of service and key performance indicators interferes with answering
the following asset management questions: what do you need to do to it, and how much money
do you need? The root cause for this is a deficiency within the asset management activities.
Strategy: Implement/ refine asset management activities to define levels of service and monitor
and report on the effectiveness of asset management.
4. 6. Define Asset Lifecycle Needs
The
lack
of
well- defined
asset
lifecycle
needs (
operations,
maintenance,
refurbishments,
renewals
and
replacements) interferes
with
answering
the
following
asset
management
questions: what do you need to do to it, when do you need to do it, and how much money do
you need? The root cause for this is a deficiency within the asset management activities.
In
order
to
account
for the
potential
environmental,
social
and
economic
consequences
of
greenhouse
gas
emissions, asset
lifecycle
needs
shall
consider
the
social
cost
of carbon
and
climate change
mitigation
opportunities.
Strategy: Implement asset management activities to define and quantify asset lifecycle needs
which consider risk, lifecycle cost ( including the cost of greenhouse gas emissions) and service
provision.
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4. 7. Lengthen
Planning
Horizon
The lack of planning horizon depth ( currently a single year) interferes with the following asset
management questions: what do you
need to do to it, when do you
need to do it, and how
much money do you need? The root cause for this is a deficiency within the asset management
activities, while the lack of well- defined
asset renewal
and
replacement
needs
is related
and
aggravates
the lack of planning
horizon
depth.
Strategy: Implement asset management
activities
to increase the depth ( duration) of asset
management and financial plans.
The reactive ( rather than pro -active) nature of asset management activities in the City of Saint
John is a direct result of the short planning horizon and the lack of well- defined asset renewal
and
replacement
needs. Implementing
the two strategies
presented
above to address
these
two issues will also make the asset management activities more pro -active.
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