Township of Hilliard Asset Management Plan 2023
Hilliard, Ontario
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Asset
Management
Plan
Township of Hilliard
2023
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"© 2023, Corporation of the Township of Hilliard, Ontario. All Rights Reserved.
The preparation of this project was carried out with assistance from the
Government of Canada and the Federation of Canadian Municipalities.
Notwithstanding this support, the views expressed are the personal views of the
authors, and the Federation of Canadian Municipalities and the Government of
Canada accept no responsibility for them."
This Asset Management Program was prepared by:
Empowering your organization through advanced
asset management, budgeting & GIS solutions
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Key Statistics
Replacement cost of
asset portfolio
$9.5 million
Replacement cost of
infrastructure per
household
$102,064 (2021)
Percentage of assets in fair
or better condition
95%
Percentage of assets with
assessed condition data
65%
Annual capital
infrastructure deficit
$217,000
Recommended
timeframe for
eliminating annual
infrastructure deficit
20 Years
Target reinvestment
rate
2.3%
Actual reinvestment
rate
0%
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Table of Contents
Executive Summary .............................................................................. 1
Scope ..................................................................................................... 1
Findings .................................................................................................. 2
Recommendations .................................................................................... 3
1.
Introduction & Context .................................................................. 4
Hilliard Community Profile .................................................................. 5
An Overview of Asset Management ...................................................... 6
Key Concepts in Asset Management ..................................................... 8
Climate Change .............................................................................. 11
Ontario Regulation 588/17 ............................................................... 13
2.
Scope and Methodology ............................................................... 15
Asset Categories Included in this AMP ................................................ 16
Deriving Replacement Costs ............................................................. 16
Estimated Useful Life and Service Life Remaining ................................. 17
Reinvestment Rate ......................................................................... 17
Deriving Asset Condition .................................................................. 18
3.
Portfolio Overview ....................................................................... 19
Total Replacement Cost of Asset Portfolio ........................................... 20
Target vs. Actual Reinvestment Rate ................................................. 20
Condition of Asset Portfolio .............................................................. 22
Forecasted Capital Requirements ...................................................... 23
4.
Analysis of Tax-funded Assets ...................................................... 24
Bridges & Culverts .......................................................................... 25
Facilities ....................................................................................... 34
Vehicles ........................................................................................ 43
Machinery & Equipment ................................................................... 52
Land Improvements ........................................................................ 60
5.
Impacts of Growth .................................................................... 68
Description of Growth Assumptions ................................................... 69
6.
Financial Strategy ....................................................................... 73
Financial Strategy Overview ............................................................. 74
Funding Objective ........................................................................... 76
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Financial Profile: Tax Funded Assets .................................................. 77
Use of Debt ................................................................................... 80
Use of Reserves ............................................................................. 82
7.
Appendices .............................................................................. 84
Appendix A: 10-Year Capital Requirements ................................................. 85
Appendix B: Level of Service Maps ............................................................ 87
Appendix C: Proposed Levels of Service Metrics ........................................... 89
Appendix D: Condition Assessment Guidelines ............................................. 91
Appendix E: Review of Existing Asset Management Plan ................................ 93
1
Executive Summary
Municipal infrastructure provides the foundation for the economic, social,
and environmental health and growth of a community through the delivery
of critical services. The goal of asset management is to deliver an adequate
level of service in the most cost-effective manner. This involves the
development and implementation of asset management strategies and long-
term financial planning.
Scope
This AMP identifies the current/proposed practices and strategies that are in
place to manage public infrastructure and makes recommendations where
they can be further refined. Through the implementation of sound asset
management strategies, the Township can ensure that public infrastructure
is managed to support the sustainable delivery of municipal services.
This AMP include the following asset categories:
Asset Category
Bridges & Culverts
Vehicles
Land Improvements
Facilities
Machinery & Equipment
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Findings
The overall replacement cost of the asset categories included in this AMP
totals $9.5 million. 95% of all assets analysed in this AMP are in fair or
better condition and assessed condition data was available for 65% of
assets. For the remaining 35% of assets, assessed condition data was
unavailable, and asset age was used to approximate condition - a data gap
that persists in most municipalities. Generally, age misstates the true
condition of assets, making assessments essential to accurate asset
management planning, and a recurring recommendation in this AMP.
The development of a long-term, sustainable financial plan requires an
analysis of whole lifecycle costs. This AMP uses a combination of proactive
lifecycle strategies and replacement only strategies to determine the lowest
cost option to maintain the current/proposed levels of service.
To meet capital replacement and rehabilitation needs for existing
infrastructure, prevent infrastructure backlogs, and achieve long-term
sustainability, the Township's average annual capital requirement totals
$217 thousand. Based on a historical analysis of sustainable capital funding
sources, the Township is not committing designated funding towards capital
projects or reserves per year. As a result, there is currently an annual
funding gap of $217 thousand.
It is important to note that this AMP represents a snapshot in time and is
based on the best available processes, data, and information at the
Township. Strategic asset management planning is an ongoing and dynamic
process that requires continuous improvement and dedicated resources.
With the development of this AMP the Township has achieved
compliance with O. Reg. 588/17 to the extent of the
requirements that must be completed by July 1, 2025.
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Recommendations
A financial strategy was developed to address the annual capital funding
gap. The following graphics shows annual tax change required to eliminate
the Township's infrastructure deficit based on a 20-year plan:
Recommendations to guide continuous refinement of the Township's asset
management program. These include:
- Review data to update and maintain a complete and accurate dataset
- Develop a condition assessment strategy with a regular schedule
- Review and update lifecycle management strategies
- Development and regularly review short- and long-term plans to meet
capital requirements
Tax-Funded
ASSETS
Average Annual Tax
Change
2.7%
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Key Insights
1. Introduction & Context
- The goal of asset management is to minimize the lifecycle
costs of delivering infrastructure services, manage the
associated risks, while maximizing the value ratepayers receive
from the asset portfolio
- An asset management plan is a living document that should be
updated regularly to inform long-term planning
- Ontario Regulation 588/17 outlines several key milestone and
requirements for asset management plans in Ontario between
July 1, 2022 and 2025
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Hilliard Community Profile
Census Characteristic
Hilliard
Ontario
Population 2021
215
14,223,942
Population Change 2016-2021
3.9
5.8
Total Private Dwellings
93
5,929,250
Population Density
2.4/km2
15.9/km2
Land Area
91.27 km2
892,411.76 km2
The Township of Hilliard is a single tier municipality in the Timiskaming District
located within Northeastern Ontario. The Township lies to the north of Lake
Timiskaming and is situated right on the border with Quebec.
The Township was settled in the late 1800s and was named after Daniel Hilliard, a
political figure who was a member of the Legislative Assembly of Ontario from 1886
to 1888. The Township is comprised of smaller communities such as Couttsville and
Whitewood Grove. The majority of the residents are fluent in English.
Hilliard is described as a small township located in a rural area and one of the
primary industries in the region is agriculture. The Township is surrounded by green
forests and hills, which allow various activities such as crop cultivation and livestock
farming.
The region experiences demand due to the agricultural prospects within the
community, as well as its appeal to tourism. The Township offers a wide range of
services such as hiking, camping, and fishing. Within the Township, both
community residents and visitors can experience a variety of amenities such as The
Hilliard Municipal Park and The Hilliard Marsh Research and Education Centre. These
attractions captivate nature enthusiasts with their distinctive landscapes and
diverse wildlife, offering engaging educational programs and opportunities to
actively contribute to the vital wetland ecosystem research and conservation
endeavors benefiting the community.
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An Overview of Asset Management
Municipalities are responsible for managing and maintaining a broad portfolio of
infrastructure assets to deliver services to the community. The goal of asset
management is to minimize the lifecycle costs of delivering infrastructure services,
manage the associated risks, while maximizing the value ratepayers receive from
the asset portfolio.
The acquisition of capital assets accounts for only 10-20% of their total cost of
ownership. The remaining 80-90% derives from operations and maintenance. This
AMP focuses its analysis on the capital costs to maintain, rehabilitate and replace
existing municipal infrastructure assets.
These costs can span decades, requiring planning and foresight to ensure financial
responsibility is spread equitably across generations. An asset management plan is
critical to this planning, and an essential element of broader asset management
program. The industry-standard approach and sequence to developing a practical
asset management program begins with a Strategic Plan, followed by an Asset
Management Policy and an Asset Management Strategy, concluding with an Asset
Management Plan.
This industry standard, defined by the Institute of Asset Management (IAM),
emphasizes the alignment between the corporate strategic plan and various asset
management documents. The strategic plan has a direct, and cascading impact on
asset management planning and reporting.
Build
20%
Operate, Maintain, and Dispose
80%
Total Cost of Ownership
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1.2.1
Asset Management Policy
An asset management policy represents a statement of the principles guiding the
Township's approach to asset management activities. It aligns with the
organizational strategic plan and provides clear direction to municipal staff on their
roles and responsibilities as part of the asset management program.
1.2.2
Asset Management Strategy
An asset management strategy outlines the translation of organizational objectives
into asset management objectives and provides a strategic overview of the
activities required to meet these objectives. It provides greater detail than the
policy on how the Township plans to achieve asset management objectives through
planned activities and decision-making criteria.
1.2.3
Asset Management Plan
The asset management plan (AMP) presents the outcomes of the Township's asset
management program and identifies the resource requirements needed to achieve a
defined level of service. The AMP typically includes the following content:
-
State of Infrastructure
-
Asset Management Strategies
-
Levels of Service
-
Financial Strategies
The AMP is a living document that should be updated regularly as additional asset
and financial data becomes available. This will allow the Township to re-evaluate
the state of infrastructure and identify how the organization's asset management
and financial strategies are progressing.
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Key Concepts in Asset Management
Effective asset management integrates several key components, including lifecycle
management, risk management, and levels of service. These concepts are applied
throughout this asset management plan and are described below in greater detail.
1.3.1
Lifecycle Management Strategies
The condition or performance of most assets will deteriorate over time. This process
is affected by a range of factors including an asset's characteristics, location,
utilization, maintenance history and environment. Asset deterioration has a
negative effect on the ability of an asset to fulfill its intended function, and may be
characterized by increased cost, risk and even service disruption.
To ensure that municipal assets are performing as expected and meeting the needs
of customers, it is important to establish a lifecycle management strategy to
proactively manage asset deterioration.
There are several field intervention activities that are available to extend the life of
an asset. These activities can be generally placed into one of three categories:
maintenance, rehabilitation, and replacement. The following table provides a
description of each type of activity and the general difference in cost.
Lifecycle
Activity
Description
Example
(Roads)
Cost
Maintenance
Activities that prevent defects or
deteriorations from occurring
Crack Seal
$
Rehabilitation/
Renewal
Activities that rectify defects or
deficiencies that are already
present and may be affecting
asset performance
Mill & Re-
surface
$$
Replacement/
Reconstruction
Asset end-of-life activities that
often involve the complete
replacement of assets
Full
Reconstruction
$$$
Depending on initial lifecycle management strategies, asset performance can be
sustained through a combination of maintenance and rehabilitation, but at some
point, replacement is required. Understanding what effect these activities will have
on the lifecycle of an asset, and their cost, will enable staff to make better
recommendations.
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The Township's approach to lifecycle management is described within each asset
category outlined in this AMP. Developing and implementing a proactive lifecycle
strategy will help staff to determine which activities to perform on an asset and
when they should be performed to maximize useful life at the lowest total cost of
ownership.
1.3.2
Risk Management Strategies
Municipalities generally take a 'worst-first' approach to infrastructure spending.
Rather than prioritizing assets based on their importance to service delivery, assets
in the worst condition are fixed first, regardless of their criticality. However, not all
assets are created equal. Some are more important than others, and their failure or
disrepair poses more risk to the community than that of others. For example, a
road with a high volume of traffic that provides access to critical services poses a
higher risk than a low volume rural road. These high-value assets should receive
funding before others.
By identifying the various impacts of asset failure and the likelihood that it will fail,
risk management strategies can identify critical assets, and determine where
maintenance efforts, and spending, should be focused. This AMP includes a high-
level evaluation of asset risk and criticality. Each asset has been assigned a
probability of failure score and consequence of failure score based on available
asset data. These risk scores can be used to prioritize maintenance, rehabilitation,
and replacement strategies for critical assets.
1.3.3
Levels of Service
A level of service (LOS) is a measure of what the Township is providing to the
community and the nature and quality of that service. Within each asset category in
this AMP, technical metrics and qualitative descriptions that measure both technical
and community levels of service have been established and measured as data is
available.
These measures include a combination of those that have been outlined in O. Reg.
588/17 in addition to performance measures identified by the Township as worth
measuring and evaluating. The Township measures the level of service provided at
two levels: Community Levels of Service, and Technical Levels of Service.
Community Levels of Service
Community levels of service are a simple, plain language description or measure of
the service that the community receives. For core asset categories (roads, bridges
and culverts, water, wastewater, stormwater) the province, through O. Reg.
588/17, has provided qualitative descriptions that are required to be included in
this AMP. For non-core asset categories, the Township has determined the
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qualitative descriptions that will be used to determine the community level of
service provided. These descriptions can be found in the Levels of Service
subsection within each asset category.
Technical Levels of Service
Technical levels of service are a measure of key technical attributes of the service
being provided to the community. These include mostly quantitative measures and
tend to reflect the impact of the Township's asset management strategies on the
physical condition of assets or the quality/capacity of the services they provide.
For core asset categories (roads, bridges and culverts, water, wastewater,
stormwater) the province, through O. Reg. 588/17, has provided technical metrics
that are required to be included in this AMP. For non-core asset categories, the
Township has determined the technical metrics that will be used to determine the
technical level of service provided. These metrics can be found in the Levels of
Service subsection within each asset category.
Current and Proposed Levels of Service
This AMP focuses on both the current and proposed level of service, provided to the
community, in accordance with O. Reg. 588/17.
Proposed levels of service should be realistic and achievable within the timeframe
outlined by the Township. They should also be determined with consideration of a
variety of community expectations, fiscal capacity, regulatory requirements,
corporate goals, and long-term sustainability.
As per O. Reg. 588/17, the Township's proposed levels of service must:
i.
Explain why the proposed levels of service are appropriate:
a. Discuss associated risks
b. How they differ from current levels of service
c. Whether proposed levels of service are achievable
d. Discuss the Township's ability to afford the proposed level of service
ii.
Have a proposed performance metric
iii.
Have a lifecycle management and financial strategy
iv.
Discuss how assumptions regarding future changes in population and
economic activity, informed the preparation of the lifecycle management
and financial strategy
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Climate Change
Climate change can cause severe impacts on human and natural systems around
the world. The effects of climate change include increasing temperatures, higher
levels of precipitation, droughts, and extreme weather events. In 2019, Canada's
Changing Climate Report (CCCR 2019) was released by Environment and Climate
Change Canada (ECCC).
The report revealed that between 1948 and 2016, the average temperature
increase across Canada was 1.7°C; moreover, during this time period, Northern
Canada experienced a 2.3°C increase. The temperature increase in Canada has
doubled that of the global average. If emissions are not significantly reduced, the
temperature could increase by 6.3°C in Canada by the year 2100 compared to 2005
levels. Observed precipitation changes in Canada include an increase of
approximately 20% between 1948 and 2012. By the late 21st century, the
projected increase could reach an additional 24%. During the summer months,
some regions in Southern Canada are expected to experience periods of drought at
a higher rate. Extreme weather events and climate conditions are more common
across Canada. Recorded events include droughts, flooding, cold extremes, warm
extremes, wildfires, and record minimum arctic sea ice extent.
The changing climate poses a significant risk to the Canadian economy, society,
environment, and infrastructure. The impacts on infrastructure are often a result of
climate-related extremes such as droughts, floods, higher frequency of freeze-thaw
cycles, extended periods of high temperatures, high winds, and wildfires. Physical
infrastructure is vulnerable to damage and increased wear when exposed to these
extreme events and climate variabilities. Canadian Municipalities are faced with the
responsibility to protect their local economy, citizens, environment, and physical
assets.
1.4.1
Hilliard Climate Profile
The Township of Hilliard is in Northeastern Ontario, north of Lake Timiskaming. The
Township is expected to experience notable effects of climate change which include
higher average annual temperatures, an increase in total annual precipitation, and
an increase in the frequency and severity of extreme events. According to
Climatedata.ca - a collaboration supported by Environment and Climate Change
Canada (ECCC) - the Township of Hilliard may experience the following trends:
Higher Average Annual Temperature:
1. Between the years 1971 and 2000 the annual average temperature was 2.7
ºC
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2. Under a high emissions scenario, the annual average temperatures are
projected to increase by 2.7 ºC by the year 2050 and over 6.9 ºC by the end
of the century.
Increase in Total Annual Precipitation:
1. Under a high emissions scenario, Hilliard is projected to experience an 14%
increase in precipitation by the year 2050 and a 20% increase by the end of
the century.
Increase in Frequency of Extreme Weather Events:
1. It is expected that the frequency and severity of extreme weather events will
change.
2. In some areas, extreme weather events will occur with greater frequency and
severity than others especially those impacted by Great Lake winds.
1.4.2
Integration Climate change and Asset
Management
Asset management practices aim to deliver sustainable service delivery - the
delivery of services to residents today without compromising the services and well-
being of future residents. Climate change threatens sustainable service delivery by
reducing the useful life of an asset and increasing the risk of asset failure. Desired
levels of service can be more difficult to achieve as a result of climate change
impacts such as flooding, high heat, drought, and more frequent and intense
storms.
To achieve the sustainable delivery of services, climate change considerations
should be incorporated into asset management practices. The integration of asset
management and climate change adaptation observes industry best practices and
enables the development of a holistic approach to risk management.
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Ontario Regulation 588/17
As part of the Infrastructure for Jobs and Prosperity Act, 2015, the Ontario
government introduced Regulation 588/17 - Asset Management Planning for
Municipal Infrastructure (O. Reg 588/17). Along with creating better performing
organizations, more liveable and sustainable communities, the regulation is a key,
mandated driver of asset management planning and reporting. It places substantial
emphasis on current and proposed levels of service and the lifecycle costs incurred
in delivering them.
The diagram below outlines key reporting requirements under O. Reg 588/17 and
the associated timelines.
Strategic Asset Management
Policy
Asset Management Plan for Core
Assets with the following
components:
1. Current levels of service
2. Inventory analysis
3. Lifecycle activities to
sustain LOS
4. Cost of lifecycle activities
5. Population and employment
forecasts
6. Discussion of growth
impacts
Asset Management Plan for All
Assets with the following
additional components:
1. Proposed levels of service
for next 10 years
2. Updated inventory analysis
3. Lifecycle management
strategy
4. Financial strategy and
addressing shortfalls
5. Discussion of how growth
assumptions impacted
lifecycle and financial
strategies
Asset Management Plan for Core and
Non-Core Assets (same components
as 2022) and Asset Management
Policy Update
2019
2024
2022
2025
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1.5.1
O. Reg. 588/17 Compliance Review
The following table identifies the requirements outlined in Ontario Regulation
588/17 for municipalities to meet by July 1, 2025. Next to each requirement a page
or section reference is included in addition to any necessary commentary.
Requirement
O. Reg.
Section
AMP
Section
Reference
Status
Summary of assets in each
category
S.5(2), 3(i)
4
Complete
Replacement cost of assets in each
category
S.5(2), 3(ii)
4
Complete
Average age of assets in each
category
S.5(2), 3(iii)
4
Complete
Condition of core assets in each
category
S.5(2), 3(iv)
4
Complete
Description of municipality's
approach to assessing the
condition of assets in each
category
S.5(2), 3(v)
4
Complete
Current levels of service in each
category
S.5(2), 1(i-ii)
4
Complete
Current performance measures in
each category
S.5(2), 2
4
Complete
Proposed levels of service in each
category
S.6
4
Appendix C
Complete
Lifecycle activities needed to
maintain current levels of service
for 10 years
S.5(2), 4
4
Complete
Costs of providing lifecycle
activities for 10 years
S.5(2), 4
Appendix A
Complete
Growth assumptions
S.5(2), 5(i-ii)
S.5(2), 6(i-
vi)
5
Complete
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Key Insights
2. Scope and Methodology
- This asset management plan includes 5 asset categories
- The source and recency of replacement costs impacts the
accuracy and reliability of asset portfolio valuation
- Accurate and reliable condition data helps to prevent
premature and costly rehabilitation or replacement and
ensures that lifecycle activities occur at the right time to
maximize asset value and useful life
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Asset Categories Included in this AMP
This asset management plan for the Township of Hilliard is produced in compliance
with Ontario Regulation 588/17. The July 2025 iteration of the Asset Management
Plan requires analysis of both core and non-core assets.
The AMP summarizes the state of the infrastructure for the Township's asset
portfolio, establishes current levels of service, proposed levels of service, and the
associated technical and customer oriented key performance indicators (KPIs),
outlines lifecycle strategies for optimal asset management and performance, and
provides financial strategies to reach sustainability for the asset categories listed
below.
Asset Category
Source of Funding
Bridges & Culverts
Tax Levy
Facilities
Vehicles
Machinery & Equipment
Land Improvements
Deriving Replacement Costs
There are a range of methods to determine the replacement cost of an asset, and
some are more accurate and reliable than others. This AMP relies on two
methodologies:
-
User-Defined Cost and Cost/Unit: Based on costs provided by municipal
staff which could include average costs from recent contracts; data from
engineering reports and assessments; staff estimates based on knowledge
and experience
-
Cost Inflation/CPI Tables: Historical cost of the asset is inflated based on
Consumer Price Index or Non-Residential Building Construction Price Index
User-defined costs based on reliable sources are a reasonably accurate and reliable
way to determine asset replacement costs. Cost inflation is typically used in the
absence of reliable replacement cost data. It is a reliable method for recently
purchased and/or constructed assets where the total cost is reflective of the actual
costs that the Township incurred. As assets age, and new products and
technologies become available, cost inflation becomes a less reliable method.
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Estimated Useful Life and Service Life
Remaining
The estimated useful life (EUL) of an asset is the period over which the Township
expects the asset to be available for use and remain in service before requiring
replacement or disposal. The EUL for each asset in this AMP was assigned according
to the knowledge and expertise of municipal staff and supplemented by existing
industry standards when necessary.
By using an asset's in-service data and its EUL, the Township can determine the
service life remaining (SLR) for each asset. Using condition data and the asset's
SLR, the Township can more accurately forecast when it will require replacement.
The SLR is calculated as follows:
𝑆𝑒𝑟𝑣𝑖𝑐𝑒 𝐿𝑖𝑓𝑒 𝑅𝑒𝑚𝑎𝑖𝑛𝑖𝑛𝑔 (𝑆𝐿𝑅) = 𝐼𝑛 𝑆𝑒𝑟𝑣𝑖𝑐𝑒 𝐷𝑎𝑡𝑒+ 𝐸𝑠𝑡𝑖𝑚𝑎𝑡𝑒𝑑 𝑈𝑠𝑒𝑓𝑢𝑙 𝐿𝑖𝑓𝑒(𝐸𝑈𝐿) −𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑌𝑒𝑎𝑟
Reinvestment Rate
As assets age and deteriorate they require additional investment to maintain a
state of good repair. The reinvestment of capital funds, through asset renewal or
replacement, is necessary to sustain an adequate level of service. The reinvestment
rate is a measurement of available or required funding relative to the total
replacement cost.
By comparing the actual vs. target reinvestment rate the Township can determine
the extent of any existing funding gap. The reinvestment rate is calculated as
follows:
𝑇𝑎𝑟𝑔𝑒𝑡 𝑅𝑒𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑅𝑎𝑡𝑒= 𝐴𝑛𝑛𝑢𝑎𝑙 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝑅𝑒𝑞𝑢𝑖𝑟𝑒𝑚𝑒𝑛𝑡
𝑇𝑜𝑡𝑎𝑙 𝑅𝑒𝑝𝑙𝑎𝑐𝑒𝑚𝑒𝑛𝑡 𝐶𝑜𝑠𝑡
𝐴𝑐𝑡𝑢𝑎𝑙 𝑅𝑒𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑅𝑎𝑡𝑒= 𝐴𝑛𝑛𝑢𝑎𝑙 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐹𝑢𝑛𝑑𝑖𝑛𝑔
𝑇𝑜𝑡𝑎𝑙 𝑅𝑒𝑝𝑙𝑎𝑐𝑒𝑚𝑒𝑛𝑡 𝐶𝑜𝑠𝑡
18
Deriving Asset Condition
An incomplete or limited understanding of asset condition can mislead long-term
planning and decision-making. Accurate and reliable condition data helps to prevent
premature and costly rehabilitation or replacement and ensures that lifecycle
activities occur at the right time to maximize asset value and useful life.
A condition assessment rating system provides a standardized descriptive
framework that allows comparative benchmarking across the Township's asset
portfolio. The table below outlines the condition rating system used in this AMP to
determine asset condition. This rating system is aligned with the Canadian Core
Public Infrastructure Survey which is used to develop the Canadian Infrastructure
Report Card. When assessed condition data is not available, service life remaining is
used to approximate asset condition.
Condition
Description
Criteria
Service
Life
Remaining
(%)
Very Good
Fit for the
future
Well maintained, good condition, new
or recently rehabilitated
80-100
Good
Adequate for
now
Acceptable, generally approaching
mid-stage of expected service life
60-80
Fair
Requires
attention
Signs of deterioration, some
elements exhibit significant
deficiencies
40-60
Poor
Increasing
potential of
affecting
service
Approaching end of service life,
condition below standard, large
portion of system exhibits significant
deterioration
20-40
Very Poor
Unfit for
sustained
service
Near or beyond expected service life,
widespread signs of advanced
deterioration, some assets may be
unusable
0-20
The analysis in this AMP is based on assessed condition data only as available. In
the absence of assessed condition data, asset age is used as a proxy to determine
asset condition. Appendix D includes additional information on the role of asset
condition data and provides basic guidelines for the development of a condition
assessment program.
19
Key Insights
3. Portfolio Overview
- The total replacement cost of the Township's asset portfolio is
$9.5 million
- The Township's target re-investment rate is 2.3%, and the
actual re-investment rate is 0%, contributing to an expanding
infrastructure deficit
- 95% of all assets are in fair or better condition
- Average annual capital requirements total $217 thousand per
year across all assets
20
Total Replacement Cost of Asset
Portfolio
The asset categories analyzed in this AMP have a total replacement cost of $9.5
million based on inventory data from 2022. This total was determined based on a
combination of user-defined costs and historical cost inflation. This estimate reflects
replacement of historical assets with similar, not necessarily identical, assets
available for procurement today.
The following table identifies the methods employed to determine replacement
costs across each asset category:
Asset Category
Replacement Cost Method
User-
Defined
Notes
Bridges & Culverts
100%
2021 OSIM Report
Facilities
100%
Insurance Appraisal
Machinery & Equipment
100%
Internal Staff
Vehicles
100%
Internal Staff
Land Improvements
100%
2022 Construction Cost
Overall
100%
Target vs. Actual Reinvestment Rate
The graph below depicts funding gaps or surpluses by comparing target vs actual
reinvestment rate. To meet the long-term replacement needs, the Township should
21
be allocating approximately $217 thousand annually, for a target reinvestment rate
of 2.3%. There is no capital expenditure on the Township's infrastructure needs.
22
Condition of Asset Portfolio
The current condition of the assets is central to all asset management planning.
Collectively, 95% of assets in Hilliard are in fair or better condition. This estimate
relies on both age-based and field condition data.
This AMP relies on assessed condition data for 65% of assets; for the remaining
portfolio, age is used as an approximation of condition. Assessed condition data is
invaluable in asset management planning as it reflects the true condition of the
asset and its ability to perform its functions. The table below identifies the source of
condition data used throughout this AMP.
Asset Category
Asset
Segment
% of Assets with
Assessed Condition
Source of
Condition Data
Bridges & Culverts
Bridges
100%
2021 OSIM Report
Structural
Culverts
100%
2021 OSIM Report
Facilities
All
0%
Age-Based
Machinery &
Equipment
All
33%
Staff Assessments
Vehicles
All
2%
Staff Assessments
Land Improvements
All
0%
Staff Assessments
23
Forecasted Capital Requirements
The development of a long-term capital forecast should include both asset
rehabilitation and replacement requirements. With the development of asset-
specific lifecycle strategies that include the timing and cost of future capital events,
the Township can produce an accurate long-term capital forecast. The following
graph identifies capital requirements over the next 75-80 years. This projection is
used as it ensures that every asset has gone through one full iteration of
replacement. The forecasted requirements are aggregated into 5-year bins and the
trend line represents the average 5-year capital requirements.
24
\
Key Insights
4. Analysis of Tax-funded
Assets
- Assets are valued at $9.5 million
- 95% of assets are in fair or better condition
- The average annual capital requirement to sustain the current
level of service for tax-funded assets is approximately $217
thousand
- Critical assets should be evaluated to determine appropriate
risk mitigation activities and treatment options
25
Bridges & Culverts
Bridges and culverts represent a critical portion of the transportation services
provided to the community and represents the highest value asset category in the
Township's asset portfolio.
4.1.1
Asset Inventory & Costs
The table below includes the quantity, total replacement cost and annual capital
requirements of each asset segment in the Township's bridges and culverts
inventory.
Asset
Segment
Quantity
Replacement Cost
Annual Capital
Requirement
Bridges
3
$4,809,813
$64,131
Culverts
3
$1,176,165
$23,523
Total
$5,985,978
$87,654
Each asset's replacement cost should be reviewed periodically to determine whether
adjustments are needed to represent realistic capital requirements more accurately.
26
4.1.2
Asset Condition & Age
The table below identifies the current average condition, the average age, and the
estimated useful life for each asset segment. The average condition (%) is a
weighted value based on replacement cost, utilizing the bridge condition index
(BCI) scores from the 2021 OSIM report.
Asset Segment
Estimated Useful
Life (Years)
Average Age
(Years)
Average
Condition
Bridges
75
50 Years 4
Months
74% (Good)
Culverts
50
73 Years
66% (Good)
Average
61 Years 8
Months
73% (Good)
The graph below visually illustrates the average condition for each asset segment
on a very good to very poor scale.
To ensure that the Township's Bridges & Culverts continue to provide an acceptable
level of service, Hilliard should monitor the average condition of all assets. If the
average condition declines, staff should re-evaluate their lifecycle management
strategy to determine what combination of maintenance, rehabilitation, and
replacement activities is required to increase the overall condition of the bridges
and culverts.
Each asset's Estimated Useful Life should also be reviewed periodically to determine
whether adjustments need to be made to better align with the observed length of
service life for each asset type.
27
Current Approach to Condition Assessment
Accurate and reliable condition data allows staff to determine the remaining service
life of assets and identify the most cost-effective approach to managing assets
more confidently. The following describes the Township's current approach:
-
Condition assessments of all bridges and culverts with a span greater than or
equal to 3 meters are completed every 2 years in accordance with the
Ontario Structure Inspection Manual (OSIM)
In this AMP, the following rating criteria is used to determine the current condition
of assets and forecast future capital requirements:
Condition
Rating
Very Good
80-100
Good
60-80
Fair
40-60
Poor
20-40
Very Poor
0-20
28
4.1.3
Lifecycle Management Strategy
The condition or performance of most assets will deteriorate over time. To ensure
that municipal assets are performing as expected and meeting the needs of
customers, it is important to establish a lifecycle management strategy to
proactively manage asset deterioration.
The following table outlines the Township's current lifecycle management strategy.
Activity Type
Description of Current Strategy
Maintenance,
Rehabilitation
and
Replacement
All lifecycle activities are driven by the results of mandated
structural inspections competed according to the Ontario
Structure Inspection Manual (OSIM)
Inspection
The most recent inspection report was completed in 2021 by
ART Engineering Inc.
29
Forecasted Capital Requirements
The following graph forecasts long-term capital requirements. The annual capital
requirement represents the average amount per year that the Township should
allocate towards funding rehabilitation and replacement needs. The following graph
identifies capital requirements over the next 70-75 years. This projection is used as
it ensures that every asset has gone through one full iteration of replacement. The
forecasted requirements are aggregated into 5-year bins and the trend line
represents the average 5-year capital requirements.
The projected cost of lifecycle activities that will need to be undertaken over the
next 10 years to maintain the current level of service can be found in Appendix A.
30
4.1.4
Risks to Current Asset Management
Strategies
The following section summarizes key trends, challenges, and risks to service
delivery that the Township is currently facing:
Capital Funding Strategies
Staff identified the lack of capital funding as the single biggest risk to the
management of the Township's bridges and structural culverts. Limited
funding due to a Township's small taxpayer base, makes it difficult for
proactive asset management.
Major capital rehabilitation projects for bridges and culverts are dependant
on the availability of grant funding opportunities. When grants are not
available, bridge rehabilitation projects may be deferred. An annual capital
funding strategy can reduce dependency on grant funding and help prevent
deferral of capital works.
The asset-specific attributes that internal staff utilize to define and prioritize the
criticality of assets are documented below:
Probability of Failure (POF)
Consequence of Failure (COF)
Condition
Replacement Cost (Financial)
31
4.1.5
Current Levels of Service
The following tables identify the Township's current level of service for bridges and
culverts. These metrics include the community and technical level of service metrics
that are required as part of O. Reg. 588/17.
Community Levels of Service
The following table outlines the qualitative descriptions that determine the
community levels of service provided by bridges and culverts.
Service
Attribute
Qualitative
Description
Current LOS (2022)
Scope
Description of the traffic
that is supported by
municipal bridges (e.g.,
heavy transport
vehicles, motor vehicles,
emergency vehicles,
pedestrians, cyclists)
Bridges and structural culverts are a key
component of the municipal transportation
network. None of the Township's
structures have loading or dimensional
restrictions meaning that most types of
vehicles, including heavy transport, motor
vehicles, emergency vehicles and cyclists
can cross them without restriction.
Quality
Description or images of
the condition of bridges
and culverts and how
this would affect use of
the bridges and culverts
See Appendix B
Technical Levels of Service
The following table outlines the quantitative metrics that determine the technical
level of service provided by bridges and culverts.
Service
Attribute
Technical Metric
Current
LOS (2022)
Scope
% of bridges in the Township with loading or
dimensional restrictions
0%
Quality
Average bridge condition index value for bridges in the
Township
74
Average bridge condition index value for structural
culverts in the Township
66
32
4.1.6
Proposed Levels of Service
As per O. Reg. 588/17, Hilliard is mandated to document its proposed levels of
service for bridges and culverts. Refer to appendix C for the Township's proposed
level of service for bridges and culverts, for the following 10 years.
33
4.1.7
Recommendations
Data Review/Validation
-
Continue to review and validate inventory data, assessed condition data and
replacement costs for all bridges and structural culverts upon the completion
of OSIM inspections every 2 years.
Risk Management Strategies
-
Implement risk-based decision-making as part of asset management
planning and budgeting processes. This should include the regular review of
high-risk assets to determine appropriate risk mitigation strategies.
Lifecycle Management Strategies
-
This AMP only includes capital costs associated with the reconstruction of
bridges and culverts. The Township should work towards identifying
projected capital rehabilitation and renewal costs for bridges and culverts and
integrating these costs into long-term planning.
Levels of Service
-
Measure levels of service in accordance with the metrics identified in O. Reg.
588/17 and those metrics that the Township believe to provide meaningful
and reliable inputs into asset management planning.
-
Ensure that proposed levels of service metrics are reported on an annual
basis.
34
Facilities
The Township of Hilliard owns and maintains two facilities, which include:
-
administrative office
-
salt shed
4.2.1
Asset Inventory & Costs
The table below includes the quantity, total replacement cost and annual capital
requirements of each asset segment in the Township's buildings and facilities
inventory.
Asset Segment
Quantity
Replacement
Cost
Annual Capital
Requirement
Administrative Office
1
$2,000,000
$40,000
Salt Shed
1
$350,000
$5,833
Total
$2,350,000
$45,833
Each asset's replacement cost should be reviewed periodically to determine whether
adjustments are needed to more accurately represent realistic capital requirements.
35
4.2.2
Asset Condition & Age
The table below identifies the current average condition, the average age, and the
estimated useful life for each asset segment. The average condition (%) is a
weighted value based on replacement cost.
Asset Segment
Estimated
Useful Life
(Years)
Average Age
(Years)
Average
Condition
Administrative Office
50
5 Years
90% (Very Good)
Salt Shed
60
23 Years
62% (Good)
Average
14 Years
86% (Very Good)
The graph below visually illustrates the average condition for each asset segment
on a very good to very poor.
To ensure that the Township's facilities continue to provide an acceptable level of
service, it should monitor the average condition of all assets. If the average
condition declines, staff should re-evaluate their lifecycle management strategy to
determine what combination of maintenance, rehabilitation and replacement
activities is required to increase the overall condition of the buildings and facilities.
Each asset's estimated useful life should also be reviewed periodically to determine
whether adjustments need to be made to better align with the observed length of
service life for each asset type.
Current Approach to Condition Assessment
Accurate and reliable condition data allows staff to determine the remaining service
life of assets and identify the most cost-effective approach to managing assets
more confidently. The following describes the Township's current approach:
36
-
Visual inspections are completed by internal staff, on an ad hoc basis
-
There are currently no formalized condition assessment programs in place at
the Township
In this AMP the following rating criteria is used to determine the current condition of
assets and forecast future capital requirements:
Condition
Rating
Very Good
80-100
Good
60-80
Fair
40-60
Poor
20-40
Very Poor
0-20
37
4.2.3
Lifecycle Management Strategy
The condition or performance of most assets will deteriorate over time. To ensure
that municipal assets are performing as expected and meeting the needs of
customers, it is important to establish a lifecycle management strategy to
proactively manage asset deterioration. The following table outlines the Township's
current lifecycle management strategy.
Activity
Type
Description of Current Strategy
Maintenance /
Rehabilitation
Minor maintenance activities of facilities are completed by internal
staff, as needed
A formalized assessment program does not currently exist
Replacement
In the absence of external reports, the Township relies on staff
expertise to drive discussion, regarding the replacement of
facilities
The Township's replacement strategy is reactive. Due to a lack of
funding, Hilliard cannot conduct a building condition assessment
(BCA). As facilities continue to age and where funding becomes
available, the Township may decide to utilize an external
engineering firm to conduct a BCA
38
Forecasted Capital Requirements
The following graph forecasts long-term capital requirements. The annual capital
requirement represents the average amount per year that the Township should
allocate towards funding rehabilitation and replacement needs. The following graph
identifies capital requirements over the next 45-50 years. This projection is used as
it ensures that every asset has gone through one full iteration of replacement. The
forecasted requirements are aggregated into 5-year bins and the trend line
represents the average 5-year capital requirements.
The projected cost of lifecycle activities that will need to be undertaken over the
next 10 years to maintain the current level of service can be found in Appendix A.
39
4.2.4
Risks to Current Asset Management
Strategies
The following section summarizes key trends, challenges, and risks to service
delivery that the Township is currently facing:
Asset Data/Capital Funding
While Hilliard's facilities are currently in a state of 'good' condition,
the rating is solely using an age-based approach. Neither the
administrative office nor salt shed has been assessed.
Building condition assessments (BCA) are valuable as facilities are
assessed on a component basis (i.e., UNIFORMAT II). By having a
componentized breakdown of each facility, it would allow the
Township to more accurately project expected capital expenditure
(ex. Upgrade to heating, replacement of windows, etc.).
While there are no immediate capital projections for either facility,
the Township is not well equipped currently if there were to be a
major unplanned rehabilitation event. To mitigate any unplanned
capital expenses, and for better asset management, the Township
should consider conducting a BCA in the near future.
The asset-specific attributes that internal staff utilize to define and prioritize the
criticality of assets are documented below:
Probability of Failure (POF)
Consequence of Failure (COF)
Condition
Replacement Cost (Financial)
40
4.2.5
Current Levels of Service
The following tables identify the Township's current level of service for facilities.
These metrics include the community and technical level of service metrics that are
required as part of O. Reg. 588/17.
Community Levels of Service
The following table outlines the qualitative descriptions that determine the
community levels of service provided by facilities.
Service
Attribute
Qualitative
Description
Current LOS (2022)
Scope
Description of the
facilities owned and
managed by the
Township along with the
overall condition
The township owns and manages two
facilities (administrative office and salt
shed)
Using an age-based approach,Hilliard's
facilities are in very good condition.
Technical Levels of Service
The following table outlines the quantitative metrics that determine the technical
level of service provided by bridges and culverts.
Service
Attribute
Technical Metric
Current
LOS (2022)
Quality
% of assets that are in good or very good condition
100
% of assets that are in fair condition
0
% of assets that are in poor or very poor condition
0
41
4.2.6
Proposed Levels of Service
As per O. Reg. 588/17, Hilliard is mandated to document its proposed levels of
service for facilities. Refer to appendix C for the Township's proposed level of
service for facilities, for the following 10 years.
42
4.2.7
Recommendations
Asset Inventory
-
The Township's asset inventory contains a single record for all facilities.
Facilities consist of several separate capital components that have unique
estimated useful lives and require asset-specific lifecycle strategies. Staff
should work towards a component-based inventory of all facilities to allow for
component-based lifecycle planning.
-
A building condition assessment (BCA) in the coming years, will help the
Township better manage and plan for capital expenditure (i.e., rehabilitation
events).
Condition Assessment Strategies
-
The Township should implement regular condition assessments for all
facilities to better inform short- and long-term capital requirements.
Risk Management Strategies
-
Implement risk-based decision-making as part of asset management
planning and budgeting processes. This should include the regular review of
high-risk assets to determine appropriate risk mitigation strategies.
Levels of Service
-
Measure levels of service in accordance with the metrics identified in O. Reg.
588/17 and those metrics that the Township believe to provide meaningful
and reliable inputs into asset management planning.
-
Ensure that proposed levels of service metrics are reported on an annual
basis.
43
Vehicles
Vehicles allow staff to efficiently deliver municipal services and personnel. Hilliard
own and manage two public works vehicles, including:
-
Freightliner
-
Trailer
4.3.1
Asset Inventory & Costs
The table below includes the quantity, replacement cost method and total
replacement cost of each asset segment in the Township's vehicles.
Asset Segment
Quantity
Replacement Cost
Annual Capital
Requirement
Public Works
2
$338,500
$34,417
$338,500
$34,417
Each asset's replacement cost should be reviewed periodically to determine whether
adjustments are needed to more accurately represent realistic capital requirements.
44
4.3.2
Asset Condition & Age
The table below identifies the current average condition and source of available
condition data for each asset segment. The average condition (%) is a weighted
value based on replacement cost.
Asset Segment
Estimated Useful
Life (Years)
Average Age
(Years)
Average
Condition
Public Works
5-10
8 Years 5 Months
98% (Very Good)
8 Years 5 Months
98% (Very
Good)
The graph below visually illustrates the average condition for each asset segment
on a very good to very poor scale.
To ensure that the Township's vehicles continue to provide an acceptable level of
service, it should monitor the average condition of all assets. If the average
condition declines, staff should re-evaluate their lifecycle management strategy to
determine what combination of maintenance, rehabilitation and replacement
activities is required to increase the overall condition of the vehicles.
Each asset's estimated useful life should also be reviewed periodically to determine
whether adjustments need to be made to better align with the observed length of
service life for each asset type.
Current Approach to Condition Assessment
Accurate and reliable condition data allows staff to determine the remaining service
life of assets and identify the most cost-effective approach to managing assets
more confidently. The following describes the Township's current approach:
-
As per MTO guidelines, staff completes regular visual inspections of vehicles
to ensure they are in state of adequate repair prior to operation
45
-
Mileage, in conjunction with monitoring maintenance costs, are used as
proxies to determine remaining useful life and relative vehicle condition
In this AMP the following rating criteria is used to determine the current
condition of assets and forecast future capital requirements:
Condition
Rating
Very Good
80-100
Good
60-80
Fair
40-60
Poor
20-40
Very Poor
0-20
46
4.3.3
Lifecycle Management Strategy
The condition or performance of most assets will deteriorate over time. To ensure
that municipal assets are performing as expected and meeting the needs of
customers, it is important to establish a lifecycle management strategy to
proactively manage asset deterioration. The following table outlines the Township's
current lifecycle management strategy.
Activity Type
Description of Current Strategy
Maintenance /
Rehabilitation
Regular, daily inspections are conducted internally prior to vehicle
usage. As per MTO guidelines, an interior, in-cab, and exterior
inspection is conducted
Minor repairs are completed internally. The Township utilizes
external mechanics for major rehabilitation needs
Replacement
Historically, vehicles have lasted well beyond estimated useful
lives. Coupled with funding limitations, the Township's
replacement strategy can be defined as reactive
47
Forecasted Capital Requirements
The following graph forecasts long-term capital requirements. The annual capital
requirement represents the average amount per year that the Township should
allocate towards funding rehabilitation and replacement needs. The following graph
identifies capital requirements over the next 10-15. This projection is used as it
ensures that every asset has gone through one full iteration of replacement. The
forecasted requirements are aggregated into 5-year bins and the trend line
represents the average 5-year capital requirements.
The projected cost of lifecycle activities that will need to be undertaken over the
next 10 years to maintain the current level of service can be found in Appendix A.
48
4.3.4
Risks to Current Asset Management
Strategies
The following section summarizes key trends, challenges, and risks to service
delivery that the Township is currently facing:
Aging Infrastructure & Funding Strategies
While there are no immediate planned capital requirements projected
for the Township, it is worth noting that the vehicles are approaching
their estimated useful life (EUL). As vehicles age, their respective
operations & maintenance (O&M) costs increase. O&M costs will
continue to increase to ensure compliance with MTO standards.
Furthermore, as vehicles age, the likelihood of asset failure,
increases. The Township should consider a risk mitigation strategy in
the event of unforeseen asset failure. Such a strategy will help
decrease the negative impact (financial, health & safety, etc.) to the
Township.
The asset-specific attributes that internal staff utilize to define and prioritize the
criticality of assets are documented below:
Probability of Failure (POF)
Consequence of Failure (COF)
Condition
Replacement Cost (Financial)
49
4.3.5
Current Levels of Service
The following tables identify the Township's current level of service for vehicles.
These metrics include the community and technical level of service metrics that are
required as part of O. Reg. 588/17.
Community Levels of Service
The following table outlines the qualitative descriptions that determine the
community levels of service provided by vehicles.
Service
Attribute
Qualitative
Description
Current LOS (2022)
Scope
Description of types of
vehicles owned and
managed by the
Township along with the
overall condition
The Township owns two public works
vehicle assets (a frieghtliner, along with a
trailer)
Hilliard's vehicles are in good/very good
condition
Technical Levels of Service
The following table outlines the quantitative metrics that determine the technical
level of service provided by bridges and culverts.
Service
Attribute
Technical Metric
Current
LOS (2022)
Quality
% of vehicles that are in good or very good condition
97
% of vehicles that are in fair condition
3
% of vehicles that are in poor or very poor condition
0
50
4.3.6
Proposed Levels of Service
As per O. Reg. 588/17, Hilliard is mandated to document its proposed levels of
service for vehicles. Refer to appendix C for the Township's proposed level of
service for vehicles, for the following 10 years.
51
4.3.7
Recommendations
Replacement Costs
-
Gather accurate replacement costs and update on a regular basis to ensure
the accuracy of capital projections.
Condition Assessment Strategies
-
Identify condition assessment strategies for high value and high-risk assets.
-
Review assets that have surpassed their estimated useful life to determine if
immediate replacement is required or whether these assets are expected to
remain in-service. Adjust the service life and/or condition ratings for these
assets accordingly.
Risk Management Strategies
-
Implement risk-based decision-making as part of asset management
planning and budgeting processes. This should include the regular review of
high-risk assets to determine appropriate risk mitigation strategies.
Levels of Service
-
Measure levels of service in accordance with the metrics identified in O. Reg.
588/17 and those metrics that the Township believe to provide meaningful
and reliable inputs into asset management planning.
-
Ensure that proposed levels of service metrics are reported on an annual
basis.
52
Machinery & Equipment
To maintain the high quality of public infrastructure and support the delivery of core
services, Township staff own and employ machinery and equipment, including:
-
Tractor
-
Steamer
-
Grader
-
Brush Hog
4.4.1
Asset Inventory & Costs
The table below includes the quantity, total replacement cost and annual capital
requirements of each asset segment in the Township's machinery and equipment
inventory.
Asset Segment
Quantity
Replacement Cost
Annual Capital
Requirement
Public Works
4
$742,500 $45,875
Total
$742,500
$45,875
Each asset's replacement cost should be reviewed periodically to determine whether
adjustments are needed to more accurately represent realistic capital requirements.
53
4.4.2
Asset Condition & Age
The table below identifies the current average condition and source of available
condition data for each asset segment. The average condition (%) is a weighted
value based on replacement cost.
Asset Segment
Estimated
Useful Life
(Years)
Average Age
(Years)
Average
Condition
Public Works
5-25
25 Years 6 Months
16% (Very Poor)
Average
25 Years 6 Months
16% (Very Poor)
The graph below visually illustrates the average condition for each asset segment
on a very good to very poor.
To ensure that the Township's machinery and equipment continues to provide an
acceptable level of service, it should monitor the average condition of all assets. If
the average condition declines, staff should re-evaluate their lifecycle management
strategy to determine what combination of maintenance, rehabilitation and
replacement activities is required to increase the overall condition of the machinery
and equipment.
Each asset's estimated useful life should also be reviewed periodically to determine
whether adjustments need to be made to better align with the observed length of
service life for each asset type.
Current Approach to Condition Assessment
Accurate and reliable condition data allows staff to determine the remaining service
life of assets and identify the most cost-effective approach to managing assets
more confidently. The following describes the Township's current approach:
54
-
Staff completes regular visual inspections of vehicles to ensure they are in
state of adequate repair prior to operation
-
Usage, in conjunction with monitoring maintenance costs, are used as
proxies to determine remaining useful life and relative vehicle condition
In this AMP the following rating criteria is used to determine the current condition of
assets and forecast future capital requirements:
Condition
Rating
Very Good
80-100
Good
60-80
Fair
40-60
Poor
20-40
Very Poor
0-20
55
4.4.3
Lifecycle Management Strategy
The condition or performance of most assets will deteriorate over time. To ensure
that municipal assets are performing as expected and meeting the needs of
customers, it is important to establish a lifecycle management strategy to
proactively manage asset deterioration.
The following table outlines the Township's current lifecycle management strategy.
Activity Type
Description of Current Strategy
Maintenance/
Rehabilitation
Minor repairs are completed internally. The Township utilizes
external mechanics for major rehabilitation needs
Machinery and equipment is maintained according to
manufacturer recommended actions and supplemented by the
expertise of municipal staff
Replacement
Historically, vehicles have lasted well beyond estimated useful
lives. Coupled with funding limitations, the Township's
replacement strategy can be defined as reactive
56
Forecasted Capital Requirements
The following graph forecasts long-term capital requirements. The annual capital
requirement represents the average amount per year that the Township should
allocate towards funding rehabilitation and replacement needs. The following graph
identifies capital requirements over the next 15-20 years. This projection is used as
it ensures that every asset has gone through one full iteration of replacement. The
forecasted requirements are aggregated into 5-year bins and the trend line
represents the average 5-year capital requirements.
The projected cost of lifecycle activities that will need to be undertaken over the
next 10 years to maintain the current level of service can be found in Appendix A.
57
4.4.4
Risks to Current Asset Management
Strategies
The following section summarizes key trends, challenges, and risks to service
delivery that the Township is currently facing:
Aging Infrastructure & Funding Strategies
The Township has numerous immediate & short-term forecasted
capital requirement projections. Hilliard's machinery & equipment
assets has extended beyond their projected estimated useful life
(EUL).
Staff indicated that the grader ($500,000) has reached its useful life
and needs to be replaced as soon as possible. Staff also indicated
that both the brush hog and tractor will need replacement, in 2025
and 2028, respectively.
As it stands, the Township's capital budget is not sufficient. Hilliard
should begin the process of creating a funding strategy to ensure that
the Township has the means to obtain the required machinery &
equipment assets in the coming years.
The asset-specific attributes that internal staff utilize to define and prioritize the
criticality of assets are documented below:
Probability of Failure (POF)
Consequence of Failure (COF)
Condition
Replacement Cost (Financial)
58
4.4.5
Current Levels of Service
The following tables identify the Township's current level of service for machinery &
equipment. These metrics include the community and technical level of service
metrics that are required as part of O. Reg. 588/17.
Community Levels of Service
The following table outlines the qualitative descriptions that determine the
community levels of service provided by machinery & equipment.
Service
Attribute
Qualitative
Description
Current LOS (2022)
Scope
Description of the
various machinery &
equipment assets owned
and operated by the
Township along with the
overall condition
Hilliard owns and manages various
equipment such as: tractor, steamer,
grader, and brush hog. These assets help
provide essential services to the
community
The Township's machinery & equipment
are in very poor condition
Technical Levels of Service
The following table outlines the quantitative metrics that determine the technical
level of service provided by machinery & equipment.
Service
Attribute
Technical Metric
Current
LOS (2022)
Quality
% of assets that are in good or very good condition
0
% of assets that are in fair condition
33
% of assets that are in poor or very poor condition
67
59
4.4.6
Proposed Levels of Service
As per O. Reg. 588/17, Hilliard is mandated to document its proposed levels of
service for machinery & equipment. Refer to appendix C for the Township's
proposed level of service for machinery & equipment, for the following 10 years.
60
4.4.7
Recommendations
Replacement Costs
-
Gather accurate replacement costs and update on a regular basis to ensure
the accuracy of capital projections.
Condition Assessment Strategies
-
Identify condition assessment strategies for high value and high-risk assets.
-
Review assets that have surpassed their estimated useful life to determine if
immediate replacement is required or whether these assets are expected to
remain in-service. Adjust the service life and/or condition ratings for these
assets accordingly.
Risk Management Strategies
-
Implement risk-based decision-making as part of asset management
planning and budgeting processes. This should include the regular review of
high-risk assets to determine appropriate risk mitigation strategies.
Levels of Service
-
Measure levels of service in accordance with the metrics identified in O. Reg.
588/17 and those metrics that the Township believe to provide meaningful
and reliable inputs into asset management planning.
-
Ensure that proposed levels of service metrics are reported on an annual
basis.
Land Improvements
Hilliard owns and manages one skating pad land improvement asset.
61
4.5.1
Asset Inventory & Costs
The table below includes the quantity, total replacement cost and annual capital
requirements for the Township's land improvement inventory.
Asset Segment
Quantity
Replacement Cost
Annual Capital
Requirement
Skating Rink
1
$75,000 $3,000
Total
$75,000
$3,000
Replacement cost should be reviewed periodically to determine whether
adjustments are needed to represent realistic capital requirements more accurately.
4.5.2
Asset Condition & Age
The table below identifies the current average condition, the average age, and the
estimated useful life for each asset segment. The average condition (%) is a
weighted value based on replacement cost.
Asset Segment
Estimated
Useful Life
(Years)
Average Age
(Years)
Average Condition
Skating Rink
25
1
96% (Very Good)
Average
1
96% (Very Good)
The graph below visually illustrates the average condition for each asset segment
on a very good to very poor.
62
To ensure that the Township's land improvement asset continues to provide an
acceptable level of service, it should monitor the average condition of all assets. If
the average condition declines, staff should re-evaluate their lifecycle management
strategy to determine what combination of maintenance, rehabilitation and
replacement activities is required to increase the overall condition of the land
improvements.
Estimated useful life should also be reviewed periodically to determine whether
adjustments need to be made to better align with the observed length of service life
for each asset type.
Current Approach to Condition Assessment
Accurate and reliable condition data allows staff to determine the remaining service
life of assets and identify the most cost-effective approach to managing assets
more confidently. The following describes the Township's current approach:
-
Hilliard has assigned a staff member to complete an inspection, on an ad hoc
basis
-
With the skating pad being a new asset, there is currently not a need for a
formal condition assessment program
In this AMP the following rating criteria is used to determine the current condition of
assets and forecast future capital requirements:
Condition
Rating
Very Good
80-100
Good
60-80
Fair
40-60
Poor
20-40
Very Poor
0-20
63
4.5.3
Lifecycle Management Strategy
The condition or performance of most assets will deteriorate over time. To ensure
that municipal assets are performing as expected and meeting the needs of
customers, it is important to establish a lifecycle management strategy to
proactively manage asset deterioration.
The following table outlines the Township's current lifecycle management strategy.
Activity Type
Description of Current Strategy
Maintenanace,
Rehabilitation
&
Replacement
Internal staff conduct inspections on an ad hoc basis
With the skating rink being new and in excellent condition, a
formal condition assessment program has not been implemented.
As the asset ages, the Township may choose to implement a
program to ensure that the skating pad remains in acceptable
condition
Forecasted Capital Requirements
The following graph forecasts long-term capital requirements. The annual capital
requirement represents the average amount per year that the Township should
allocate towards funding rehabilitation and replacement needs. The following graph
identifies capital requirements over the next 25-30 years. This projection is used as
it ensures that every asset has gone through one full iteration of replacement. The
forecasted requirements are aggregated into 5-year bins and the trend line
represents the average 5-year capital requirements.
The projected cost of lifecycle activities that will need to be undertaken over the
next 10 years to maintain the current level of service can be found in Appendix A.
64
4.5.4
Risks to Current Asset Management
Strategies
Lifecycle Management Strategy & Staffing Capacity
A formalized condition assessment program has not been established
by Hilliard. With the skating pad being only a year old, there is not
an immediate need to implement a program. However, the Township
should look to develop an internal program to ensure best asset
management practices.
Staff indicated that visual inspection of the skating pad is completed
internally, only when time permits, suggesting that there may be
capacity issues. As the asset ages, O&M costs will be expected to
increase, taking away from the Township's resources (i.e. internal
staff time).
65
4.5.5
Current Levels of Service
The following tables identify the Township's current level of service for land
improvements. These metrics include the community and technical level of service
metrics that are required as part of O. Reg. 588/17.
Community Levels of Service
The following table outlines the qualitative descriptions that determine the
community levels of service provided by land improvements.
Service
Attribute
Qualitative
Description
Current LOS (2022)
Quality
Description of the types
of assets owned and
managed by the
Township along with the
overall condition
The Township currently owns and manages
one land improvement asset (skating pad)
The Township's skating pad is in very good
condition
Technical Levels of Service
The following table outlines the quantitative metrics that determine the technical
level of service provided by land improvements.
Service
Attribute
Technical Metric
Current
LOS (2022)
Quality
% of assets in good or very good condition
100
% of assets in fair condition
0
% of assets in poor or very poor condition
0
66
4.5.6
Proposed Levels of Service
As per O. Reg. 588/17, Hilliard is mandated to document its proposed levels of
service for land improvements. Refer to appendix C for the Township's proposed
level of service for land improvements, for the following 10 years:
67
4.5.7
Recommendations
Condition Assessment Strategies
-
Formalize an appropriate condition assessment program for the Township's
skating pad.
Risk Management Strategies
-
Implement risk-based decision-making as part of asset management
planning and budgeting processes.
Levels of Service
-
Measure levels of service in accordance with the metrics identified in O. Reg.
588/17 and those metrics that the Township believe to provide meaningful
and reliable inputs into asset management planning.
-
Ensure that proposed levels of service metrics are reported on an annual
basis.
68
Key Insights
5.
Impacts of Growth
- Understanding the key drivers of growth and demand will allow
the Township to more effectively plan for new infrastructure,
and the upgrade or disposal of existing infrastructure
- Moderate fluctuation in population and employment growth is
expected
- The costs of growth should be considered in long-term funding
strategies that are designed to maintain both the current and
proposed levels of service
69
Description of Growth Assumptions
The demand for infrastructure and services will change over time based on a
combination of internal and external factors. Understanding the key drivers of
growth and demand will allow the Township to plan for new infrastructure more
effectively, and the upgrade or disposal of existing infrastructure. Increases or
decreases in demand can affect what assets are needed and what level of service
meets the needs of the community.
5.1.1
Hilliard Official Plan (November 2009)
The Township of Hilliard adopted their Official Plan which bases its projections on
the Growth Plan for Northern Ontario and reflects the goals of the Planning Act. The
Official Plan was approved at County Council as of November 25, 2009.
The Township of Hilliard has land reserves dedicated for immediate residential
development, with a focus on new lot creation and rural area redevelopment. The
Official Plan's objective is to establish an attractive community that fosters resident
well-being, while supporting a thriving agricultural industry. The plan focuses on
conserving prime agricultural land, promoting employment growth through diverse
means, and ensuring well-managed expansion through new housing and
commercial opportunities. The plan also designates space for parks, playgrounds,
and other public service facilities.
The Township will be receiving assistance from the Northern Ontario Resource
Development Support (NORDS) program to help build infrastructure and promote
economic development. The Township will also be receiving municipal infrastructure
support through the Ontario Community Infrastructure Fund, which provides
funding for communities to renew and rehabilitate critical infrastructure.
The Township intends to take measures to protect prime agricultural land, ensure
source water protection, and enhance drainage flows. The preservation of natural
heritage features, safeguarding against natural hazards, and the potential for
alternative energy sources like wind turbines underline the Township's growth
strategies. These factors will contribute to enhance the Township's infrastructure
stability and facilitate overall community enhancement.
The following table outlines the population and employment forecasts allocated to
Hilliard.
70
Historical Figures
1996
2001
2006
2011
2016
2021
Population
253
241
222
204
207
215
Population Change
N/A
-4.7%
-7.9%
-8.1%
1.5%
3.9%
Private Dwellings
N/A
94
101
92
95
93
The population of Hilliard ranges from 253 in 1996 to 215 in 2021. Between the
years of 1996 and 2011 there were significant drops in population. Since 2016,
there has been a slight increase of population until 2021. The Official Plan has set a
population goal of 200-250 by 2029, and recent census data indicates that this
target can be achieved.
5.1.2
Regional Growth
In 2021 the Come North Conference Report was produced by FedNor and
Government of Canada. The document describes short, medium, and long-term
objectives for all communities in Northern Ontario as it relates to population
growth.
According to the report all 11 Census Districts in Northern Ontario (Nipissing, Parry
Sound, Manitoulin, Sudbury, Greater Sudbury, Timiskaming, Cochrane, Algoma,
Thunder Bay, Rainy River, Kenora) are currently experiencing the following trends:
population decline, population aging, or labour shortages. The report highlights a
risk of these communities becoming economically unsustainable unless population
retention and attraction numbers improve. The risk is the result of the dependency
ratio increasing. The dependency ratio is the ratio of people unable to support
themselves without assistance; people between the ages of 0 and 14 and 64 and
older.
The goal is to achieve a dependency ratio of 0.5. In 1996, every Census District
was at or near the goal but by 2016, none were below and more than half had a
ratio in excess of 0.6. The following graph displays the dependency ratio for each
Census District in 1996 and 2016 along with a projected ratio for the year 2036.
71
The Township of Hilliard is found in the Timiskaming district, which is expected to
reach a dependency ratio of 0.85.
The population trends overall in the Northeastern Ontario are in decline. The
following graph from the 2019 Timiskaming district report by the Northern Policy
Institute, displays the population trends from 1986 to 2016.
The following table, found in the same report, shows population projections in the
Northeastern Ontario for the years 2021 to 2041.
Year
Ages 0-19
Ages 20-64
Ages 65+
Total
2021
6,347
17,362
8,029
31,738
2026
6,293
15,709
8,900
30,902
2031
6,092
14,628
9,436
30,156
2036
5,887
14,180
9,412
29,479
2041
5,751
14,014
9,137
28,902
72
The most recent census data from 2021, shows a slight decrease in the population,
reaching a total of 31,424. According to census data, a significant portion of
population decrease is within the 15-to-64-year age group, while there is an
increase in population for the age of 65 years and over; thus, further increasing the
dependency ratio.
73
Key Insights
6.
Financial Strategy
- The Township is not allocating funding towards capital projects,
on an annual basis
- An annual capital requirement and funding gap of $217,000
exists
- For tax-funded assets, we recommend increasing tax revenues
by 2.7% each year for the next 20 years to achieve a
sustainable level of funding
74
Financial Strategy Overview
For an asset management plan to be effective and meaningful, it must be
integrated with financial planning and long-term budgeting. The development of a
comprehensive financial plan will allow Township of Hilliard to identify the financial
resources required for sustainable asset management based on existing asset
inventories, desired levels of service, and projected growth requirements.
This report develops such a financial plan by presenting several scenarios for
consideration and culminating with final recommendations. As outlined below, the
scenarios presented model different combinations of the following components:
1. The financial requirements for:
a. Existing assets
b. Existing service levels
c. Requirements of contemplated changes in service levels (none
identified for this plan)
d. Requirements of anticipated growth (none identified for this plan)
2. Use of traditional sources of municipal funds:
a. Tax levies
b. User fees
c. Reserves
d. Debt
3. Use of non-traditional sources of municipal funds:
a. Reallocated budgets
b. Partnerships
c. Procurement methods
4. Use of Senior Government Funds:
a. Gas tax
b. Annual grants
Note: Periodic grants are normally not included due to Provincial requirements for
firm commitments. However, if moving a specific project forward is wholly
dependent on receiving a one-time grant, the replacement cost included in the
financial strategy is the net of such grant being received.
If the financial plan component results in a funding shortfall, the province requires
the inclusion of a specific plan as to how the impact of the shortfall will be
managed. In determining the legitimacy of a funding shortfall, the province may
evaluate a Township's approach to the following:
1. To reduce financial requirements, consideration has been given to revising
service levels downward.
75
2. All asset management and financial strategies have been considered. For
example:
a. If a zero-debt policy is in place, is it warranted? If not the use of debt
should be considered.
b. Do user fees reflect the cost of the applicable service? If not, increased
user fees should be considered.
6.1.1
Annual Requirements & Capital Funding
Annual Requirements
The annual requirements represent the amount the Township should allocate
annually to each asset category to meet replacement needs as they arise, prevent
infrastructure backlogs, and achieve long-term sustainability. In total, the Township
must allocate approximately $217 thousand annually to address capital
requirements for the assets included in this AMP.
The annual requirement has been calculated based on a "replacement only"
scenario, in which capital costs are only incurred at the construction and
replacement of each asset.
Annual Funding Available
Based on a historical analysis of sustainable capital funding sources, the Township
is not committing dedicated funding towards capital projects. Given the annual
capital requirement of $217,000, consequently, a funding gap of the same value,
exists.
76
Funding Objective
We have developed a scenario that would enable Hilliard to achieve full funding
within 1 to 20 years for the following assets:
1. Tax Funded Assets: Bridges & Culverts, Facilities, Land Improvements,
Machinery & Equipment, and Vehicles
Note: For the purposes of this AMP, we have excluded the road network (gravel
roads) since they are a perpetual maintenance asset and end of life replacement
calculations do not normally apply. If gravel roads are maintained properly, they
can theoretically have a limitless service life.
For each scenario developed we have included strategies, where applicable,
regarding the use of cost containment and funding opportunities.
77
Financial Profile: Tax Funded Assets
6.3.1
Current Funding Position
The following tables show, by asset category, Hilliard's average annual asset
investment requirements, current funding positions, and funding increases required
to achieve full funding on assets funded by taxes.
Asset Category
Avg. Annual
Requirement
Annual Funding Available
Annual
Deficit
Taxes
Gas
Tax
OCIF
Total
Available
Bridges & Culverts
88,000
0
0
0
0
88,000
Facilities
46,000
0
0
0
0
46,000
Land Improvements
3,000
0
0
0
0
3,000
Machinery &
Equipment
46,000
0
0
0
0
46,000
Vehicles
34,000
0
0
0
0
34,000
217,000
0
0
0
0 217,000
The average annual investment requirement for the above categories is $217,000.
The Township has not historically allocated any annual revenue to these assets for
capital purposes which leaves an annual deficit of $217,000. Put differently, these
infrastructure categories are currently funded at 0% of their long-term
requirements.
6.3.2
Full Funding Requirements
In 2022, Township of Hilliard has annual tax revenues of $315,000. As illustrated in
the following table, without consideration of any other sources of revenue or cost
containment strategies, full funding would require the following tax change over
time:
78
Asset Category
Tax Change Required for
Full Funding
Bridges & Culverts
27.9%
Facilities
14.6%
Land Improvements
1.0%
Machinery & Equipment
14.6%
Vehicles
10.8%
68.9%
The following changes in costs and/or revenues over the next number of years
should also be considered in the financial strategy:
a) Hilliard's debt payments for these asset categories will increase in 2023 by
$36,000 which further extends the funding gap. However, the debt payment
will decrease by $3,000 at year 10 and by $36,000 at year 15. This will result
in a decrease in the funding gap during the period of 15 - 20 years.
Our recommendations include capturing the above changes and allocating them to
the infrastructure deficit outlined above. The table below outlines this concept and
presents several options:
Without Capturing Changes
With Capturing Changes
5 Years
10 Years 15 Years 20 Years
5 Years
10 Years 15 Years 20 Years
Infrastructu
re Deficit
217,000
217,000
217,000
217,000
217,000
217,000
217,000
217,000
Change in
Debt Costs
N/A
N/A
N/A
N/A
36,000
33,000
-3,000
-3,000
Resulting
Infrastruc
ture
Deficit:
217,00
0 217,000 217,000 217,000 253,000 250,000 214,000 214,000
Tax
Increase
Required
68.8%
68.8%
68.8%
68.8%
80.2%
79.3%
67.9%
67.9%
Annually:
11.1%
5.4%
3.6%
2.7%
12.6%
6.1%
3.6%
2.7%
79
6.3.3
Financial Strategy Recommendations
Considering all the above information, we recommend the 20-year option. This
involves full funding being achieved over 20 years by:
a) When realized, reallocating the debt cost reductions of $39,000 to the
infrastructure deficit as outlined above.
b) Increasing tax revenues by 2.7% each year for the next 20 years solely for
the purpose of phasing in full funding to the asset categories covered in this
section of the AMP.
c) Allocating any gas tax or OCIF funding that is remaining after road
maintenance to the asset categories outlined above.
d) Increasing existing and future infrastructure budgets by the applicable
inflation index on an annual basis in addition to the deficit phase-in.
Notes:
1. As in the past, periodic senior government infrastructure funding will most
likely be available during the phase-in period. By Provincial AMP rules, this
periodic funding cannot be incorporated into an AMP unless there are firm
commitments in place. We have included OCIF formula-based funding, if
applicable since this funding is a multi-year commitment1.
2. We realize that raising tax revenues by the amounts recommended above for
infrastructure purposes will be very difficult to do. However, considering a
longer phase-in window may have even greater consequences in terms of
infrastructure failure.
Prioritizing future projects will require the current data to be replaced by condition-
based data. Although our recommendations include no further use of debt, the
results of the condition-based analysis may require otherwise.
1 The Township should take advantage of all available grant funding programs and transfers from other levels
of government. While OCIF has historically been considered a sustainable source of funding, the program is
currently undergoing review by the provincial government. Depending on the outcome of this review, there
may be changes that impact its availability.
80
Use of Debt
For reference purposes, the following table outlines the premium paid on a project
if financed by debt. For example, a $1M project financed at 4.5%2 over 15 years
would result in a 40% premium or $400,000 of increased costs due to interest
payments. For simplicity, the table does not consider the time value of money or
the effect of inflation on delayed projects.
Interest Rate
Number of Years Financed
5
10
15
20
25
30
7.0%
22%
42%
65%
89%
115%
142%
6.5%
20%
39%
60%
82%
105%
130%
6.0%
19%
36%
54%
74%
96%
118%
5.5%
17%
33%
49%
67%
86%
106%
5.0%
15%
30%
45%
60%
77%
95%
4.5%
14%
26%
40%
54%
69%
84%
4.0%
12%
23%
35%
47%
60%
73%
3.5%
11%
20%
30%
41%
52%
63%
3.0%
9%
17%
26%
34%
44%
53%
2.5%
8%
14%
21%
28%
36%
43%
2.0%
6%
11%
17%
22%
28%
34%
1.5%
5%
8%
12%
16%
21%
25%
1.0%
3%
6%
8%
11%
14%
16%
0.5%
2%
3%
4%
5%
7%
8%
0.0%
0%
0%
0%
0%
0%
0%
It should be noted that current interest rates are near all-time lows. Sustainable
funding models that include debt need to incorporate the risk of rising interest
rates. The following graph shows where historical lending rates have been:
2 As of February 2023 the municipal Infrastructure Ontario rates for 15-year money is 4.3%.
81
A change in 15-year rates from 4.5% to 6% would change the premium from 40%
to 54%. Such a change would have a significant impact on a financial plan.
The following tables outline how Hilliard has historically used debt for investing in
the asset categories as listed. There is currently $291,000 of debt outstanding for
the assets covered by this AMP with corresponding principal and interest payments
of $39,000, well within its provincially prescribed maximum of $90,605.
Asset Category
Current
Debt
Outstandin
g
Use of Debt in the Last Five Years
2018
2019
2020
2021
2022
Bridges & Culverts
0
0
0
0
0
0
Facilities
0
0
0
0
0
0
Land Improvements
0
0
0
0
0
0
Machinery & Equipment
291,000
0
0
0
0 293,000
Vehicles
0
0
0
0
0
0
Total Tax Funded:
291,000
0
0
0
0 293,00
0
Asset Category
Principal & Interest Payments in the Next Ten Years
2022
2023
2024
2025
2026
2027
2032
Bridges & Culverts
0
0
0
0
0
0
0
Facilities
0
0
0
0
0
0
0
Land Improvements
0
0
0
0
0
0
0
Machinery & Equipment
3,000
39,000
39,000
39,000
39,000
39,000
36,000
Vehicles
0
0
0
0
0
0
0
Total Tax Funded:
3,000 39,000
39,000 39,000
39,000 39,000 36,000
The revenue options outlined in this plan allow Hilliard to fully fund its long-term
infrastructure requirements without further use of debt.
0.00%
5.00%
10.00%
15.00%
Historical Prime Business Interest Rate
82
Use of Reserves
6.5.1
Available Reserves
Reserves play a critical role in long-term financial planning. The benefits of having
reserves available for infrastructure planning include:
a) the ability to stabilize tax rates when dealing with variable and sometimes
uncontrollable factors
b) financing one-time or short-term investments
c) accumulating the funding for significant future infrastructure investments
d) managing the use of debt
e) normalizing infrastructure funding requirement
By asset category, the table below outlines the details of the reserves currently
available to Hilliard.
Asset Category
Balance at December 31,
2022
Bridges & Culverts
0
Facilities
0
Land Improvements
0
Machinery & Equipment
22,000
Vehicles
0
Total Tax Funded:
22,000
There is considerable debate in the municipal sector as to the appropriate level of
reserves that a Township should have on hand. There is no clear guideline that has
gained wide acceptance. Factors that municipalities should consider when
determining their capital reserve requirements include:
a) breadth of services provided
b) age and condition of infrastructure
c) use and level of debt
d) economic conditions and outlook
e) internal reserve and debt policies.
These reserves are available for use by applicable asset categories during the
phase-in period to full funding. This coupled with Hilliard's judicious use of debt in
the past, allows the scenarios to assume that, if required, available reserves and
83
debt capacity can be used for high priority and emergency infrastructure
investments in the short- to medium-term.
84
Key Insights
7.
Appendices
- Appendix A identifies projected 10-year capital requirements for
each asset category
- Appendix B includes several maps that have been used to
visualize the current level of service
- Appendix C includes the Township's proposed LOS metrics for the
following ten (10) year period
- Appendix D provides additional guidance on the development of a
condition assessment program
85
Appendix A: 10-Year Capital
Requirements
The following tables identify the capital cost requirements for each of the next 10
years to meet projected capital requirements and maintain the current level of
service.
Bridges & Culverts
Segment
Backlog
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
Bridges
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Culverts
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Total:
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Facilities
Segment
Backlog
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
Administrative
Office
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Salt Shed
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Total:
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Vehicles
Segment
Backlog
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
Public Works
$0
$0
$0
$0
$0
$8,500
$0
$0
$0
$0
$0
Total:
$0
$0
$0
$0
$0
$8,500
$0
$0
$0
$0
$0
86
Machinery & Equipment
Segment
Backlog
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
Public Works
$500,000
$0
$0
$0
$25,000
$0
$0
$200,000
$0
$25,000
$0
Total:
$500,000
$0
$0
$0
$25,000
$0
$0
$200,000
$0
$25,000
$0
Land Improvements
Segment
Backlog
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
Skating Rink
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
87
Appendix B: Level of Service Maps
Images of Bridge in Good Condition
Swamp Hallow Bridge
Inspected: November 17th, 2021
88
Images of Culvert in Fair Condition
Coutville Road Culvert
Inspected: June 27th, 2019
89
Appendix C: Proposed Levels of
Service Metrics
Asset
Category
Service
Attribute
LOS
Metric
Current
LOS
Target
LOS
Trend
Background
Achievability
Affordability
Growth
Risks
Bridges &
Culverts
Quality
BCI
(Bridges)
74
50-70
↓
Hilliard's bridges
and culverts are
in good
(BCI>60)
condition.
Rehabilitation/re
placement
events for bridge
& culverts are
expensive; the
Township's
target LOS
reflects the facts
that Hilliard has
a small taxpayer
base, along with
the necessary
reliance on
grants to
conduct major
rehabilitation
events.
Bridges & culverts have
long (75/50 years) EULs.
With the asset class
deteriorating at an
acceptable rate, Hilliard
should achieve its target
LOS.
There are no
planned capital
requirements in
the next 10 years.
The Township will
continue to follow
its current lifecycle
management/fina
ncial strategy to
achieve its target
LOS.
Operating
efficiency is
expected to
decrease as the
assets age, and
O&M associated
costs increase.
For more
information, refer
to the financial
strategy portion of
this AMP (Section
6)
Refer to
section 5
of this
AMP.
Increase to
O&M costs
Increased
likelihood of
unforeseen
closure
Public
liability
Detour
(impact to
critical
services)
BCI
(Culverts)
66
40-59
Scope
% of
bridges
with
loading or
dimensiona
l
restrictions
0
0
↔
Facilities
Quality
Average
Weighted
Condition
86%
60%-79%
↓
The Township's
administrative
office and salt
shed are in very
good/good
condition.
The Township's
target LOS
reflects the facts
that Hilliard has
a small taxpayer
base, along with
the necessary
reliance on
grants.
Given that facilities have
long (50+ years) EULs,
the Township's strategy is
to provide an acceptable
level of service, which is
defined by facilities
remaining in good
condition for the next 10
years.
There are no
planned capital
requirements in
the next 10 years.
Coupled with the
fact that the
Township's
facilities are in
adequate
condition, it will
continue to follow
its current lifecycle
management/fina
ncial strategy to
achieve its target
LOS.
Operating
efficiency is
expected to
decrease as the
assets age, and
O&M associated
costs increase.
For more
information, refer
to the financial
strategy portion of
this AMP (Section
6)
Refer to
section 5
of this
AMP.
Increase to
O&M costs
Increased
likelihood of
unforeseen
facility
closure
Vehicles
Quality
Average
Weighted
Condition
98%
40%-59%
↓
Hilliard's
vehicles are in
very good
condition. There
is 1 capital event
scheduled for
the next 10
years (2026;
replacement of
trailer).
While vehicles deteriorate
at a faster rate compared
to other asset classes (10
years), historically,
vehicles within the
Township are used well
beyond their intended
EUL.
The Township's target
LOS is achievable if it
continues its current
lifecycle management
strategies.
There is one
planned capital
requirements in
the next 10 years.
The Township will
continue to follow
its current lifecycle
management/fina
ncial strategy in
order to achieve
its target LOS.
Operating
efficiency is
expected to
decrease as the
assets age, and
O&M associated
costs increase.
For more
information, refer
to the financial
strategy portion of
this AMP (Section
6).
Refer to
section 5
of this
AMP.
Increase to
O&M costs
The
freightliner
provides
critical
services for
the
Township.
Failure of
the asset, as
it
approaches
its EUL,
would have
numerous
negative
impacts on
the
community
(safety,
financial,
etc.)
Failure of
Township's
90
freightliner
would
impact its
ability to
meet MMS
Machinery
&
Equipment
Quality
Average
Weighted
Condition
16%
0%-20%
↔
Hilliard's
machinery &
equipment
assets are in
very poor
condition. Staff
have indicated
that numerous
assets have
been in
operation
beyond their
respective EULs.
As a result, a
backlog of
$500,000 exists.
While staff have indicated
that there is an
immediate need to
replace certain assets,
the Township is cognizant
of the fact that funding is
limited. As a result, asset
replacement can only
occur when funding
becomes available (ex.,
grant).
With numerous
capital
requirements in
the next 10 years,
the Township can
achieve the target
LOS by following
its current lifecycle
management/fina
ncial strategy.
Operating
efficiency is
expected to
remain relatively
the same for the
next 10 years.
While not ideal
regarding asset
management
practices, Hilliard
cannot realistically
ensure its
machinery &
equipment assets
will be in 'fair' to
'good' working
condition.
Refer to
section 5
of this
AMP.
Increase to
O&M costs.
Higher
likelihood of
catastrophic
asset failure
Negative
impact on
community
(financial,
safety, etc.)
Land
Improveme
nts
Quality
Average
Weighted
Condition
96%
40%-60%
↓
The Township's
skating pad
asset is in very
good condition.
The new (2022)
asset requires
very little O&M
costs;
furthermore, no
capital
requirements
(upgrade or
replacement)
are projected in
the next 10
years.
The township will allow
the asset to deteriorate
over time. It is expected
to remain in acceptable
condition (fair-good), due
to the nature of the
asset.
There are no
planned capital
requirements in
the next 10 years.
The Township will
continue to follow
its current lifecycle
management/fina
ncial strategy to
achieve its target
LOS.
Operating
efficiency is
expected to
decrease as the
assets age, and
O&M associated
costs increase.
For more
information, refer
to the financial
strategy portion of
this AMP (Section
6).
Refer to
section 5
of this
AMP.
Increase to
O&M costs
Deterioratin
g rink
features
91
Appendix D: Condition Assessment
Guidelines
The foundation of good asset management practice is accurate and reliable data on
the current condition of infrastructure. Assessing the condition of an asset at a
single point in time allows staff to have a better understanding of the probability of
asset failure due to deteriorating condition.
Condition data is vital to the development of data-driven asset management
strategies. Without accurate and reliable asset data, there may be little confidence
in asset management decision-making which can lead to premature asset failure,
service disruption and suboptimal investment strategies. To prevent these
outcomes, the Township's condition assessment strategy should outline several key
considerations, including:
-
The role of asset condition data in decision-making
-
Guidelines for the collection of asset condition data
-
A schedule for how regularly asset condition data should be collected
Role of Asset Condition Data
The goal of collecting asset condition data is to ensure that data is available to
inform maintenance and renewal programs required to meet the desired level of
service. Accurate and reliable condition data allows municipal staff to determine the
remaining service life of assets, and identify the most cost-effective approach to
deterioration, whether it involves extending the life of the asset through remedial
efforts or determining that replacement is required to avoid asset failure.
In addition to the optimization of lifecycle management strategies, asset condition
data also impacts the Township's risk management and financial strategies.
Assessed condition is a key variable in the determination of an asset's probability of
failure. With a strong understanding of the probability of failure across the entire
asset portfolio, the Township can develop strategies to mitigate both the probability
and consequences of asset failure and service disruption. Furthermore, with
condition-based determinations of future capital expenditures, the Township can
develop long-term financial strategies with higher accuracy and reliability.
Guidelines for Condition Assessment
Whether completed by external consultants or internal staff, condition assessments
should be completed in a structured and repeatable fashion, according to consistent
and objective assessment criteria. Without proper guidelines for the completion of
92
condition assessments there can be little confidence in the validity of condition data
and asset management strategies based on this data.
Condition assessments must include a quantitative or qualitative assessment of the
current condition of the asset, collected according to specified condition rating
criteria, in a format that can be used for asset management decision-making. As a
result, it is important that staff adequately define the condition rating criteria that
should be used and the assets that require a discrete condition rating. When
engaging with external consultants to complete condition assessments, it is critical
that these details are communicated as part of the contractual terms of the project.
There are many options available to the Township to complete condition
assessments. In some cases, external consultants may need to be engaged to
complete detailed technical assessments of infrastructure. In other cases, internal
staff may have sufficient expertise or training to complete condition assessments.
Developing a Condition Assessment Schedule
Condition assessments and general data collection can be both time-consuming and
resource intensive. It is not necessarily an effective strategy to collect assessed
condition data across the entire asset inventory. Instead, the Township should
prioritize the collection of assessed condition data based on the anticipated value of
this data in decision-making. The International Infrastructure Management Manual
(IIMM) identifies four key criteria to consider when making this determination:
1. Relevance: every data item must have a direct influence on the output that
is required
2. Appropriateness: the volume of data and the frequency of updating should
align with the stage in the assets life and the service being provided
3. Reliability: the data should be sufficiently accurate, have sufficient spatial
coverage and be appropriately complete and current
4. Affordability: the data should be affordable to collect and maintain
93
Appendix E: Review of Existing Asset
Management Plan
AMP Table of Contents: High Level Review and Suggestions
The below is a high-level review of the Municipality's current Asset Management
Plan (AMP), with some suggestions for improvements.
Section
Title / details
Notes
Action
1
Exec Summary
Report of AMP
development
Use this as a section
for high-level
insights, inc. most
recent priorities and
risks (rather than
share how the AMP
was developed)
2
SOTI Report
Historical Overview
Consider elimination
/ placement in
appendix
Data gathering
Consider elimination / placement in appendix
PSAB
Consider elimination / placement in appendix
(with data gathering)
SOTI for linear assets, inc. condition and
replacement costs
Consider improving by connecting it to other
chapters by asset rather than separate
chapters for functional requirements (include
Asset Info, LOS, Performance, in one place)
3
Capital Plan
Background &
Overview
Consider reducing
detail / only related
directly to
municipality.
Methodology
Consider reducing detail / place details
related directly to municipality in appendix.
Details
Update. Consider combining with 2, for each
asset class.
4
LOS
How to do LOS
(operating details in
Appendix D)
Consider combining
with 2, as above.
Consider reducing
LOS to what is
required only
5
Financial
Projections
Methodology,
Funding
Requirements,
Funding Strategies
Consider combining
with 2, as above.
Consider improving
and making more
realistic
(Apply for more
grants)
6
Recommendations
For each section
above
Consider combining
with 2, with
highlights in Exec
Summary.
7
Conclusion
Context and
conclusion
Retain, consider
making briefer.
A
Detailed List of
Capital Projects
Not available (link
does not work)
Update
94
B
Asset Useful Life
Statement of
assumptions re
useful life
Update
C
Capital Plan
Prioritization
Matrix
Weighting of what is
important
Update / remove.
D
LOS / KPIs
Examples
Update / put in
correct main section
e
Municipal Cost
Index
Usage of escalation /
inflation factor
specific to
municipalities
Update
F
Road Management
Strategy
How to maintain
roads
Eliminate (put
somewhere else
AMP Requirements: High Level Comparison
The table below is a high-level comparison of the Municipality's current Asset
Management Plan (AMP) with the dated requirements under Ontario's Asset
Management Regulation: O.Reg. 588/17. For this purpose, the requirements have
been tabulated and simplified. For specific guidance, please consult the legislation
or professional legal advice.
Date required
Requirement
Status
July 1, 2021
AMP for Core Assets (water,
wastewater, stormwater, roads,
bridges & culverts)
- Current LOS (qualitative and technical)
using data from last 2 years or less
Missing, example provided
- Current performance using data from
last 2 years or less
Missing, example provided
- Asset info: summary, replacement cost,
average age, condition, approach to
condition assessment
Provided in 2016, must be updated
- Lifecycle activities to maintain current
LOS for 10 years, using full lifecycle info,
options for lifecycle activities, risks, and
lowest cost activities to maintain current
LOS
Missing
Missing (Easy)
95
- Description of assumptions re future
changes in population or economic activity
and how they may impact lifecycle
activities above
July 1, 2023
AMP for non-core assets
- Current LOS (qualitative and technical)
using data from last 2 years or less
Missing, example provided
- Current performance using data from
last 2 years or less
Missing, example provided
- Asset info: summary, replacement cost,
average age, condition, approach to
condition assessment
Provided in 2016
- Lifecycle activities to maintain current
LOS for 10 years, using full lifecycle info,
options for lifecycle activities, risks, and
lowest cost activities to maintain current
LOS
Missing
- Description of assumptions re future
changes in population or economic activity
and how they may impact lifecycle
activities above
Missing (Easy)
July 1, 2024
Add-ons
- LOS - proposed (qualitative and
technical)
Missing
required
Requirement
Status
- Commentary re LOS (options,
differences between current vs
proposed, achievability,
affordability)
Missing
- Proposed performance for each
asset category
Missing
- Lifecycle mgmt. and financial
strategy covering: LC activities
needed for proposed LOS, full LC
of assets, options to achieve,
risks, identification of lowest
cost options; estimate of LC
activities cost for 10 years;
funding available for LC;
Missing
96
shortfall identification and
mgmt.
- Discussion of changes to
reflect how assumptions re
future changes in population and
economic activity informed
preparation of LC mgmt. and
Financial Strategy
Missing
Undated
Additional requirements
- Update every 5 years
- Endorsed by executive lead of municipality and
approved by Council resolution
- Annual review including implementation progress,
identification of impeding factors, and a strategy to
address impeding factors
- Make SAMP and AMP available publicly online