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POLICY
TITLE:
Strategic Asset Management Policy
NUMBER:
FIN-002
CATEGORY:
Finance
DATE:
July 25th, 2018
REFERENCES:
By-Law 2018-69
1.0 Purpose:
The purpose of this policy is to provide leadership in and commitment to the development and
implementation of the Municipality's asset management program. It is intended to guide the
consistent use of asset management across the organization, to facilitate logical and evidence-
based decision-making for the management of municipal infrastructure assets and to support
the delivery of sustainable community services now and in the future.
By using sound asset management practices, the Municipality will work to ensure that all
municipal infrastructure assets meet expected performance levels and continue to provide
desired service levels in the most efficient and effective manner. Linking service outcomes to
infrastructure investment decisions will assist the Municipality in focusing on service, rather than
budget, driven asset management approaches.
This policy demonstrates an organization-wide commitment to the good stewardship of
municipal infrastructure assets, and to improved accountability and transparency to the
community through the adoption of best practices regarding asset management planning.
2.0 Definitions:
Unless otherwise noted, the definitions provided in this document align with those outlined in
Ontario Regulation 588/17 (O. Reg. 588/17), Asset Management Planning for Municipal
Infrastructure, under the Infrastructure for Jobs and Prosperity Act, 2015.
1. Asset management (AM) - the coordinated activity of an organization to realize value
from assets. It considers all asset types, and includes all activities involved in the asset's
life cycle from planning and acquisition/creation; to operational and maintenance
activities, rehabilitation, and renewal; to replacement or disposal and any remaining
liabilities. Asset management is holistic and normally involves balancing costs, risks,
opportunities and performance benefits to achieve the total lowest lifecycle cost for each
asset (ISO 55000).
2. Asset management plan (AMP) - Documented information that specifies the activities,
resources, and timescales required for an individual asset, or a grouping of assets, to
achieve the organization's asset management objectives (ISO 55000).
3. Capitalization threshold - the value of a municipal infrastructure asset at or above
which a municipality will capitalize the value of it and below which it will expense the
value of it.
4. Green infrastructure asset - an infrastructure asset consisting of natural or human-
made elements that provide ecological and hydrological functions and processes and
includes natural heritage features and systems, parklands, storm water management
systems, street trees, urban forests, natural channels, permeable surfaces and green
roofs.
5. Level of service - parameters, or combination of parameters, which reflect social,
political, environmental and economic outcomes that the organization delivers.
Parameters can include, but are not necessarily limited to, safety, customer satisfaction,
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quality, quantity, capacity, reliability, responsiveness, environmental acceptability, cost,
and availability (ISO 55000).
6. Lifecycle activities - activities undertaken with respect to a municipal infrastructure
asset over its service life, including constructing, maintaining, renewing, operating and
decommissioning, and all engineering and design work associated with those activities.
7. Municipal infrastructure asset - an infrastructure asset, including a green infrastructure
asset, directly owned by a municipality or included on the consolidated financial
statements of a municipality, but does not include an infrastructure asset that is managed
by a joint municipal water board.
3.0 Background:
The Municipality is responsible for providing a range of essential services to the community. To
deliver these services, it owns and manages a diverse municipal infrastructure asset portfolio of
roads, bridges, culverts, water, wastewater, machinery, vehicles and more. As the social,
economic, and environmental wellbeing of the community depends on the reliable performance
of these municipal infrastructure assets it is critical to implement a systemic, sustainable
approach to their management.
Asset management is such an approach, and refers to the set of policies, practices and
procedures that allow an organization to realize maximum value from its municipal infrastructure
assets. An asset management approach allows organizations to make informed decisions
regarding the planning, building, operating, maintaining, renewing, replacing and disposing of
municipal infrastructure assets through a wide range of lifecycle activities. Furthermore, it is an
organization-wide process that involves the coordination of activities across multiple
departments and service areas. As such, it is useful to adopt a structured and coordinated
approach to outlining the activities, roles and responsibilities required of organizational actors,
as well as the key principles that should guide all asset management decision-making.
A comprehensive and holistic asset management approach will support efficient and effective
delivery of expected levels of service and ensure that due regard and process are applied to the
long-term management and stewardship of all municipal infrastructure assets. In addition, it will
align the Municipality with provincial and national standards and regulations such as the
Infrastructure for Jobs and Prosperity Act, 2015 and Ontario Regulation 588/17, enabling the
organization to take full advantage of available grant funding opportunities.
The approval of this policy is an important step towards integrating the Municipality's strategic
mission, vision and goals with its asset management program, and ensuring that critical
municipal infrastructure assets and vital services are maintained and provided to the community
in a reliable, sustainable manner.
4.0 Alignment with the Municipality's Strategic Direction:
This policy aligns with The Hastings County Official Plan, 2017. The following passages outline
key strategic priorities and objectives listed within this document that the development of an
asset management program will support:
Planning Principles of the Official Plan
1. (1.7.1) The intent of the Hastings County Official Plan is to facilitate and achieve a high
quality of life, economic growth, healthy, active communities, and environmental
sustainability by implementing the following principles of good land use planning:
2. (1.7.1a) Provide members of the public, County and Member Municipality Councils with
data, information, and policies that will direct wise and sustainable use and management
of lands, including natural and cultural heritage resources, natural or man-made hazards,
public infrastructure, built form, and public service facilities.
Objectives
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(2.1.2f) To promote the efficient and sustainable use of infrastructure and public service facilities
which are planned or available, and avoid the need for premature, unjustified and/or
uneconomical expansions of such.
Infrastructure & Public Service Facilities - Goals and Objectives
1. (3.1.1a) To undertake asset management planning and develop asset management plans
that will pursue the financial viability of the County's and Member Municipalities'
infrastructure and public service facilities over their lifecycle.
2. (3.1.1b) To provide, maintain, finance, and operate infrastructure and public service
facilities that are accessible and will provide a high quality of life while protecting the
overall health and safety of County residents and visitors.
3. (3.1.1g) To maintain in good repair and condition new and existing infrastructure and
public service facilities, including but not limited to water and sanitary sewage systems,
roads, recreational trails, pedestrian sidewalks and walkways, bike paths/lanes, social
and special needs housing, community halls, arenas, museums, and libraries.
4. (3.1.3)To consider the following before developing new infrastructure and service
facilities:
i.
Optimizing the use of existing infrastructure and public service facilities; and,
ii.
Considering opportunities for adaptive re-sue, wherever feasible
5. (3.2.10) Member Municipality Councils will actively maintain/upgrade their systems and
promote water conservation practices in order to "free up" capacity within the municipal
water and sanitary sewage treatment plant and distribution systems. Member
Municipalities that own and manage municipal water and wastewater plants and systems
will develop and implement assessment management plans inclusive of an asset
management strategy and financing strategy tailored to their unique needs and the life
cycle cost of their infrastructure.
6. (3.6.1.3) Member Municipalities will develop and implement Assessment Management
Plans inclusive of an asset management strategy and financing strategy tailored to their
unique needs and the life cycle cost of their roads and transportation infrastructure.
5.0 Policy Statement:
To guide the Municipality, the following policy statements have been developed:
1. The Municipality will implement an enterprise-wide asset management program through
all departments. The program will promote lifecycle and risk management of all municipal
infrastructure assets, with the goal of achieving the lowest total cost of ownership while
meeting desired levels of service.
2. The Municipality will implement continuous improvement protocols and adopt best
practices regarding asset management planning, including:
Complete and Accurate Asset Data
Condition Assessment Protocols
Risk and Criticality Models
Lifecycle Management
Financial Strategy Development
Level of Service Framework
3. The Municipality will develop and maintain an asset inventory of all municipal
infrastructure assets which includes unique ID, description, location information, value
(both historical and replacement), performance characteristics and/or condition,
estimated remaining life and estimated repair, rehabilitation or replacement date; and
estimated cost repair, rehabilitation or replacement costs.
4. The Municipality will develop an asset management plan that incorporates all
infrastructure categories and municipal infrastructure assets that meet the capitalization
thresholds outlined in the organization's Capital Asset Policy. It will be updated regularly
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according to the dates outlined in O. Reg. 588/17 until July 1, 2024, after which it will be
updated at least every five years. The Capital Asset Policy for the Municipality of Centre
Hastings includes the following capitalization thresholds:
Major Asset Class
Minor Asset Class
Capitalization Threshold
Land
All land will be recorded
Land Improvements
$10,000
Buildings
$10,000
Engineered Structures
Roadway System
$10,000
Water System
$10,000
Wastewater System
$10,000
Storm System
$10,000
Machinery & Equipment
$10,000
Vehicles
$10,000
Computer System (Hardware & Software)
$10,000
Furniture & Office Equipment
$10,000
Group assets (all categories)
$10,000
5. The Municipality will integrate asset management plans and practices with its long-term
financial planning and budgeting strategies. This includes the development of financial
plans that determine the level of funding required to achieve short-term operating and
maintenance needs, in addition to long-term funding needs to replace and/or renew
municipal infrastructure assets based on full lifecycle costing.
6. The Municipality will explore innovative funding and service delivery opportunities,
including but not limited to grant programs, public-private partnerships (P3), alternative
financing and procurement (AFP) approaches, and shared provision of services, as
appropriate.
7. The Municipality will develop meaningful performance metrics and reporting tools to
transparently communicate and display the current state of asset management practice to
Council and the community.
8. The Municipality will consider the risks and vulnerabilities of municipal infrastructure
assets to climate change and the actions that may be required including, but not limited
to, anticipated costs that could arise from these impacts, adaptation opportunities,
mitigation approaches, disaster planning and contingency funding. Impacts may include
matters relating to operations, levels of service and lifecycle management.
9. The Municipality will ensure that all asset management planning is aligned with any of the
following financial plans:
i. Financial plans related to the Municipality's water assets including any financial
plans prepared under the Safe Drinking Water Act, 2002.
ii. Financial plans related to the Municipality's wastewater assets.
10. The Municipality will align all asset management planning with the Province of Ontario's
land-use planning framework, including any relevant policy statements issued under
section 3(1) of the Planning Act; shall conform with the provincial plans that are in effect
on that date; and, shall be consistent with all municipal official plans.
11. The Municipality will coordinate planning for interrelated municipal infrastructure assets
with separate ownership structures by pursuing collaborative opportunities with
neighboring municipalities and jointly-owned municipal bodies wherever viable and
beneficial.
12. The Municipality will develop processes and provide opportunities for municipal residents
and other interested parties to offer input into asset management planning wherever and
whenever possible.
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6.0 Roles and Responsibilities:
The development and continuous support of the Municipality's asset management program
requires a wide range of duties and responsibilities. The following passages outline the persons
responsible for these tasks:
1. Council
Development of policy and policy updates
Approve the AM policy and direction of the AM program
Maintain adequate organizational capacity to support the core practices of the AM
program
Prioritize effective stewardship of assets in adoption and ongoing review of policy and
budgets
Establish and monitor levels of service
2. Senior Management Team
Development of policy and policy updates
Provide corporate oversight to goals and directions and ensure the AM program aligns
with the Municipality's strategic plan
Ensure that adequate resources are available to implement and maintain core AM
practices
Provide departmental staff coordination
Establish and monitor levels of service
Track, analyze and report on AM program progress and results
3. Executive Lead (Treasurer)
Development of policy and policy updates
Provide organization-wide leadership in AM practices and concepts
Provide departmental staff coordination
Establish and monitor levels of service
Coordinate and track AM program implementation and progress
4. Departmental Staff
Utilize the new business processes and technology tools developed as part of the AM
program
Participate in implementation task teams to carry-out AM activities
Establish and monitor levels of service
Provide support and direction for AM practices within their department
Track, analyze and report on AM program progress and results
7.0 Key Principles:
The Municipality shall consider the following principles as outlined in section 3 of the
Infrastructure for Jobs and Prosperity Act, 2015, when making decisions regarding asset
management:
1. Infrastructure planning and investment should take a long-term view, and decision-
makers should take into account the needs of citizens by being mindful of, among other
things, demographic and economic trends.
2. Infrastructure planning and investment should take into account any applicable budgets
or fiscal plans.
3. Infrastructure priorities should be clearly identified in order to better inform investment
decisions respecting infrastructure.
4. Infrastructure planning and investment should ensure the continued provision of core
public services, such as health care and education.
5. Infrastructure planning and investment should promote economic competitiveness,
productivity, job creation and training opportunities.
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6. Infrastructure planning and investment should ensure that the health and safety of
workers involved in the construction and maintenance of infrastructure assets is
protected.
7. Infrastructure planning and investment should foster innovation by creating opportunities
to make use of innovative technologies, services and practices, particularly where doing
so would utilize technology, techniques and practices developed in Ontario.
8. Infrastructure planning and investment should be evidence based and transparent, and,
subject to any restrictions or prohibitions under an Act or otherwise by law on the
collection, use or disclosure of information,
i. investment decisions respecting infrastructure should be made on the basis of
information that is either publicly available or is made available to the public,
and
ii. information with implications for infrastructure planning should be shared between
the Municipality and broader public sector entities, and should factor into
investment decisions respecting infrastructure.
9. Where provincial or municipal plans or strategies have been established in Ontario, under
an Act or otherwise, but do not bind or apply to the Municipality, as the case may be, the
Municipality should nevertheless be mindful of those plans and strategies and make
investment decisions respecting infrastructure that support them, to the extent that they
are relevant.
10. Infrastructure planning and investment should promote accessibility for persons with
disabilities.
11. Infrastructure planning and investment should minimize the impact of infrastructure on the
environment and respect and help maintain ecological and biological diversity, and
infrastructure should be designed to be resilient to the effects of climate change.
12. Infrastructure planning and investment should endeavor to make use of acceptable
recycled aggregates.
13. Infrastructure planning and investment should promote community benefits, being the
supplementary social and economic benefits arising from an infrastructure project that are
intended to improve the well-being of a community affected by the project, such as local
job creation and training opportunities, improvement of public space within the
community, and any specific benefits identified by the community.