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Town of Latchford
Asset Management Plan
2016-2025
Project No. 16-317
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Limitations and Disclosure
This document has been prepared by Infrastructure Solutions Inc. ("ISI") for the
exclusive use of the Town of Latchford (the "Client"). The information, opinions,
recommendations, conclusions and/or analysis contained within this document are
based upon observations and information made available to ISI as at the time of the
preparation of the document. Any information provided to ISI by the Client on any third
party is assumed to be correct.
The information, opinions, recommendations, conclusions and/or analysis contained
within this document are given based upon observations made by ISI and using
generally accepted professional judgment and principles. Any use which a third party
makes of this document, or any reliance or decisions or actions taken by any such third
party based upon this document are the sole responsibility of any such third party and
ISI accepts no responsibility, liability or risk for any damages, loss, or claims, if any,
suffered by any such third party or any related party of such third party as a result of
any reliance, or decisions made or actions taken, based upon this document.
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TABLE OF CONTENTS
1
EXECUTIVE SUMMARY ...................................................................................................................... 3
2
HISTORICAL OVERVIEW .................................................................................................................... 4
3
OUR METHODOLOGY ......................................................................................................................... 5
3.1
ISI ROAD SURVEY .................................................................................................................................. 6
4
SOTI REPORT ...................................................................................................................................... 8
5
INVENTORY AND THE VALUATION OF ASSETS (SOTI) ................................................................. 9
5.1
ROADS ................................................................................................................................................. 10
5.2
WATER NETWORK ................................................................................................................................ 16
5.3
WASTEWATER NETWORK ...................................................................................................................... 17
5.4
BRIDGES .............................................................................................................................................. 18
5.5
SOTI CONCLUSION ............................................................................................................................... 18
6
NON-LINEAR ASSET TYPES ............................................................................................................ 19
6.1
BUILDINGS ............................................................................................................................................ 19
6.2
VEHICLES ............................................................................................................................................. 20
6.3
MACHINERY AND EQUIPMENT ................................................................................................................. 20
6.4
STREETLIGHTS ..................................................................................................................................... 21
6.5
RECREATIONAL AREA ........................................................................................................................... 22
7
CAPITAL PLAN .................................................................................................................................. 22
7.1
BACKGROUND ...................................................................................................................................... 22
7.2
OVERVIEW ............................................................................................................................................ 23
7.3
METHODOLOGY .................................................................................................................................... 24
8
ASSET MANAGEMENT PLAN RESULTS ........................................................................................ 25
9
LEVELS OF SERVICE ....................................................................................................................... 27
9.1
OVERVIEW ............................................................................................................................................ 27
9.2
METHODOLOGY .................................................................................................................................... 27
9.3
LEVELS OF SERVICE PROCESS .............................................................................................................. 28
9.4
OPERATING PERFORMANCE INDICATOR EXAMPLE ................................................................................... 29
10
FINANCIAL PROJECTIONS .............................................................................................................. 31
10.1
CONSUMER PRICE INDEX: OUR PERSPECTIVE ......................................................................................... 32
10.2
MUNICIPAL COST INDEX ........................................................................................................................ 33
10.3
FINANCIAL STRATEGY ASSUMPTIONS ..................................................................................................... 33
10.4
EXISTING WATER FUNDING REQUIREMENTS ........................................................................................... 34
10.5
FUNDING REQUIREMENTS ...................................................................................................................... 34
10.6
FINANCIAL STRATEGIES - THE INFRASTRUCTURE GAP ............................................................................ 35
11
RECOMMENDATIONS ....................................................................................................................... 40
11.1
SOTI RECOMMENDATIONS .................................................................................................................... 40
11.2
CAPITAL PLAN RECOMMENDATIONS ....................................................................................................... 40
11.3
LEVEL OF SERVICE RECOMMENDATIONS ................................................................................................ 41
11.4
FINANCIAL STRATEGY RECOMMENDATIONS ............................................................................................ 42
12
CONCLUSION .................................................................................................................................... 43
APPENDIX A - DETAILED LIST OF CAPITAL PROJECTS .......................................................................................... 44
APPENDIX B - ASSET USEFUL LIFE .................................................................................................................... 45
APPENDIX C - MUNICIPAL COST INDEX ............................................................................................................... 46
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1 EXECUTIVE SUMMARY
The Town of Latchford is undertaking a detailed evaluation of all its existing infrastructure to
update its long-term Asset Management Plan, put the Town in a position to receive the Federal
Gas Tax Fund and other grants, and build a fully implementable program for its residents which
aims to further strengthen municipal asset management practices.
Asset management planning requires that the most cost effective and realistic decisions are
made regarding the building, operating, maintaining, renewing, replacing and disposing of
infrastructure assets. The prime goal of the Asset Management Plan is to maximize benefits,
manage risk, and offer satisfactory, safe and sustainable service levels to the public. Asset
management planning requires that the Town has an in-depth understanding of the
characteristics and condition of infrastructure assets, as well as the service levels they are
expected to meet. Asset management planning also involves strategic prioritization and
optimization to obtain the best decision-making concerning the timing and utilization of
investments, which includes a comprehensive and achievable financial strategy.
Infrastructure Solutions Inc. was well supported by Latchford's staff to accumulate the Town's
geometric and condition assessment data, where available. We based the Asset Management
Plan on all asset types and their current replacement costs. Asset lifespans, condition and project
requirements were determined by engineering assessments and degradation curves. Where
condition assessments were unavailable, ISI applied an age-based analysis. Our objective was
to build a practical asset management plan based on optimizing the capital spend and taking
corrective action to address the Town's infrastructure deficit.
The Town's infrastructure deficit is defined as the added investment that would be required to
maintain a Town's infrastructure at appropriate service levels and in a good state of repair today.
Based on our calculations, Latchford's current (as of 2016) infrastructure deficit is in the range of
$2.37 million dollars. To completely remove the infrastructure deficit over the next 10 years, the
Town would need to make an average annual capital investment of $225,678 toward the deficit
which is well outside the Town's current financial capability.
The greatest portion of the infrastructure deficit (36%) is with the roads. We have analyzed this
road network in detail with the objective of optimizing how capital is expended. Independent of
the deficit, we have reviewed the Town's current/projected capital contributions in relation to its
current/projected needs. The Town is currently contributing $48,419 per annum to its capital
program but has a requirement to contribute $69,167 per annum. Without corrective action, the
infrastructure deficit will continue to grow. As highlighted in the SOTI Report within this
document, the Town's major linear asset, the roads, are in poor condition overall. The water and
wastewater systems are in fair condition. The bridge is in poor condition.
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2 HISTORICAL OVERVIEW
Municipal infrastructure is the foundation that the daily life of Canadians is built upon. The strength
of this foundation enables our communities and local businesses to grow and it ensures that
Canadians have a high quality of life. Municipalities own the core infrastructure assets that are
critical to the quality of life of Canadians and the competitiveness of our country. Almost 60% of
Canada's core public infrastructure is owned and maintained by municipal governments.
According to survey results, the total value of core municipal infrastructure assets is estimated at
$1.1 trillion dollars or about $80,000 per household.
The delivery of essential public services is reliant on a strong foundation of municipal
infrastructure. This foundation enables our communities and local businesses to grow and
ensures Canadians can lead safe and healthy lives. The Town of Latchford is not alone in dealing
with an infrastructure deficit. According to the Canadian Infrastructure Report Card (CIRC), one-
third of our Canadian municipal infrastructure is in fair, poor or very poor condition, increasing the
risk of service disruption. Assets in fair, poor and very poor conditions represent a call for action.
Survey results demonstrate that roads, municipal buildings, sport and recreation facilities and
public transit are the asset classes most in need of attention. Figure 1 provides a summary of the
physical condition ratings for all municipal asset categories across the country.
Figure 1: Physical Condition Ratings by Asset Category
Increasing reinvestment rates will stop the deterioration of municipal infrastructure. The 2016
CIRC report found that rates of reinvestment are lower than targets recommended by asset
management practitioners. The rate can vary based on factors such as the age of the
infrastructure, the level of service and risk tolerance. The values provided are based on the
experience of municipal asset management practitioners and are intended to be informative in
nature. Roads and sidewalks, storm water, and sport and recreation infrastructure presented the
largest gaps in terms of current and target rates of reinvestment. Figure 2 demonstrate the gap
between current and target reinvestment levels. Continuing down this path will result in a gradual
decline of physical condition levels that will impact municipal services. When contrasted with
target reinvestment rates it becomes clear that current levels of reinvestment in municipal
infrastructure are inadequate.
3%
3%
2%
5%
1%
5%
5%
2%
9%
8%
5%
9%
3%
12%
14%
15%
17%
24%
16%
23%
22%
28%
27%
26%
35%
26%
33%
37%
57%
33%
36%
34%
36%
39%
44%
26%
17%
22%
18%
23%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Potable
Water
Wastewater
Stormwater
Roads
Bridges
Buildings
Sport & Rec. Public Transit
Very Poor
Poor
Fair
Good
Very Good
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Target Reinvestment Rates vs Current Reinvestment Rate
Infrastructure
Lower Target
Reinvestment Rate
Upper Target
Reinvestment Rate
Current
Reinvestment Rate
Potable Water (linear)
1.0%
1.5%
0.9%
Potable Water non-linear)
1.7%
2.5%
1.1%
Wastewater (linear)
1.0%
1.3%
0.7%
Wastewater (non-linear)
1.7%
2.5%
1.4%
Stormwater (linear)
1.0%
1.3%
0.3%
Stormwater (non-linear)
1.7%
2.0%
1.3%
Roads and Sidewalks
2.0%
3.0%
1.1%
Bridges and Culverts
1.0%
1.5%
0.8%
Buildings
17.0%
2.5%
1.7%
Sport and Recreation
1.7%
2.5%
1.3%
Figure 2: Target Reinvestment Rates vs Current Reinvestment Rate
3 OUR METHODOLOGY
Infrastructure Solutions is an "accountineering" company, half civil engineers, half financial
planners. Building an implementable Asset Management Plan requires both civil engineering and
financial planning expertise. Working with smaller municipalities is our only business. We
understand that every municipality is unique with its objectives and priorities, so our analytical
process involves feedback from Public Works and Treasury. Our objective is to build asset
management plans that are practical and implementable. Our intention is to deliver a plan that
Latchford can manage and that its Council and community can embrace.
Under the MIII program in 2013 - 2014, we wrote 60 Asset Management Plans, primarily focused
on identifying the infrastructure deficit and required capital contribution. We got frustrated telling
Councils that they had big deficits, an over-taxed population, and no hope of getting their
infrastructure deficits under control without provincial or federal grants. Since 2014, to promote
municipal self-sufficiency, we have been building capital planning and optimization tools to
maximize the positive impact of municipal spending.
We have been supported in our efforts to build capital planning tools by the Ontario Centers of
Excellence (OCE) and NSERC grants through the Civil Engineering department at the University
of Waterloo. Our "Better Capital Planning" workshop was delivered at the Municipal Finance
Officer's Annual Conference (Collingwood, ON) in Sept. 2015, and the Ministry of Municipal
Affairs' Northern Treasurer's Forum in (Sudbury, ON) in Oct. 2015. Most recently, we presented
road maintenance, rehabilitation, and reconstruction strategies at the Municipal Engineers
Association (MEA) AGM. ReNew Canada (Nov. 2016 issue) magazine and Municipal World
magazine (Dec. 2016 issue) published articles about our development of capital planning tools
for smaller municipalities.
To enhance our capital planning tools and maximize the accuracy of our long-range projections,
we developed a comprehensive Municipal Cost Index (MCI) based on a micro-analysis of
municipal costs. It includes a weighting of the expenditure categories and the inflation factor used
for each municipal component. We match an appropriate inflator to the types of expenditures in
each budget category.
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3.1 ISI ROAD SURVEY
This year, Infrastructure Solutions Inc. conducted the most comprehensive Canadian survey of
municipal road maintenance practices ever undertaken. The 171 survey participants represented
45,000 km of paved road, 15% of Canada's population, and a wide range of municipalities by
region and population. The survey was designed to identify the extent to which municipalities
apply preventive maintenance treatments, to attain practical observations about treatment options
and lifecycle gains, and clarify user perceptions about what constitutes best road maintenance
practices. The results are truly disturbing.
The survey established that 98% of respondents perceive preventive maintenance as an
important and cost-effective approach to extend the service life of their pavements and to save
the municipality significant capital investment in the long run. The survey further establishes that
a majority of the municipalities do not apply preventive maintenance treatments (Figure 3) and
have a widely-varied understanding of when these treatments should be applied.
Figure 3: Current Application of Preventive Maintenance Across Canadian Municipalities
Respondents were asked what percentage of their municipality they believe is currently being
maintained according to best practices. Figure 4 shows the survey's cumulative response on the
application of chip seal, micro-surfacing, and slurry seal to paved roads. For every major surface
treatment type, less than 20% of municipal road networks are maintained in accordance with what
respondents believe to be best practice.
Figure 4: Application of Preventive Treatments According to Best Practices
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This contradiction between the clearly appreciated benefits of preventive maintenance and the
inadequate application of preventive treatments in practice has deep roots. Municipalities may be
overly reactive to community requests. Councils surely follow the advice of Roads Needs Studies,
where engineering companies recommend repairing worst roads first for safety and other
reasons, assuming an unlimited municipal budget. Deteriorated water or wastewater lines might
necessitate road reconstruction for line replacement and take precedence over maintenance.
Smaller municipalities often use Excel or simplistic pavement management programs which
typically recommend projects based on a simple ranking process. Finally, many municipalities
still operate on an ad hoc basis, arbitrarily selecting roads which need rehabilitation or
reconstruction work without undertaking any analytical process whatsoever. Whatever the
circumstance, tax dollars are being poured into pot holes unnecessarily.
Our capital planning tool provides a robust decision-making process, identifies the best possible
course of action, and considers both the short-term needs and the long-term goals of a
municipality. It includes an advanced decision-making process called optimization or prescriptive
modeling, which is the most powerful and effective way of finding the best possible solution to a
decision-making problem. A capital planning tool with optimization capability can maximize the
overall performance of a network in terms of physical condition (or any other criteria) over a multi-
year analysis horizon and provides municipalities with the best possible course of action in terms
of timing and selection of different maintenance, rehabilitation, or reconstruction treatments
considering all municipal goals and constraints. The improvements achieved through an
optimized solution, which inevitably highlights the critical importance of preventive maintenance,
can be translated into substantial savings and increased socio-economic benefit (Figure 5).
Figure 5: Optimized vs. Conventional Capital Planning
Combining advanced optimization capabilities with robust engineering models and socio-
economic consideration provides municipalities with a fully implementable and defensible road
network capital plan. The analytical models used in the system are flexible, able to adjust to
regional variances and reflect the behavior of assets verified through a rigorous engineering
analysis.
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4 SOTI REPORT
This State of the Infrastructure (SOTI) assessment is based on an analysis of the replacement,
rehabilitation, and maintenance requirements of the Town's asset inventory and its current
condition. Infrastructure Solutions has been contracted to assist the Town in analyzing the State
of the Infrastructure Report (SOTI) and the assembly of a Capital Plan as the initial components
of a comprehensive Asset Management Plan. We include a Report Card on the current state of
the major linear assets within the Town. The Capital Plan provides both a high-level assessment
of projected Capital expenses and a detailed future project by project costing for the Town's
review and confirmation. Our objective is to give the Town the analytical tools and information
necessary to implement a comprehensive and cohesive asset management program. We have
determined that the Town has a significant backlog of assets in need of betterment or
replacement.
Dealing with aging infrastructure requires that the Town assesses the long-term capital project
requirements and establish the funding of high-priority projects in an efficient, timely and cost-
effective manner. With our engineering analysis and project identification, the Town can monitor,
track and manage infrastructure assets to ensure that policy makers obtain sufficient funding in
order to maintain, at a minimum, and potentially enhance future service levels. Through capital
budgeting, the Town of Latchford can plan the future operating budget expenses and reserve
funds to manage its financial position over a long-term period. Capital planning provides the core
information needed for the Council's planning and fiscal policies.
The Report Card produced within the SOTI has been developed to provide an easily understood
reference that can be regularly updated to document investment gaps and the progress that the
Town is making towards sustainability. The SOTI and associated analysis are strategic
documents that identify trends and highlight possible issues involved in delivering services and
maintaining the assets for those services. The SOTI will also assist in the development of more
detailed tactical and operational plans aimed at identifying expenditures needed to provide
service in a cost-effective, sustainable manner.
Encapsulated within this report ISI presents the Town's State of the Infrastructure report (SOTI),
and a description of our methodology. The final Capital Plan contains a more detailed asset data
and calculation process. The direction of this project was influenced by the Town's requirement
for an Asset Management Plan and the work of the National Guide for Sustainable Municipal
Infrastructure. In November 2003, the National Guide to Sustainable Municipal Infrastructure
published a Best Practice for Municipal Infrastructure Asset Management. It stated that the
framework for an asset management plan can be described in terms of seven questions:
1. What do you have and where is it? (Inventory and Location)
2. What is it worth? (Costs/Replacement Rates)
3. What are its condition and expected remaining service life? (Condition and Capability)
4. What is the service level expectation and what needs to be done? (Capital & Operating
Plans)
5. When do you need to do it? (Capital and Operating Plans)
6. How much will it cost and what is the acceptable level of risk? (Short/Long-term
Financial Plan)
7. How do you ensure long-term affordability? (Short- and Long-term Financial Plan)
This report answers these questions.
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5 INVENTORY AND THE VALUATION OF ASSETS (SOTI)
The aim of this section of the report is to provide an overview of the State of the Infrastructure
(SOTI) by an analysis of the available data on the condition and/or age of the Town's assets. The
SOTI requirements are restricted to linear assets only. Within the Capital Plan, ISI has included
other critical asset types in its analysis for the Town's review. The grouping of these assets and
asset replacements were taken from the PSAB files provided by the Town, and the current
replacement value of the assets is comprised of these factors:
Value of all the existing assets
New assets
Adjustments in unit costs based on improved knowledge and inflationary impacts
Based on the TCA Policy, a $3,000 capital threshold limit is used, and any assets
below the threshold have not been accounted for in the capital plan.
For the purpose of the Asset Management Plan report, we have grouped the assets as follows:
Linear Assets:
Roads - Paved, Surface Treated and Gravel
Water Network - Waterlines
Sewer Network - Sewerline (Storm)
Structures - Bridge
Non-linear assets have been dealt with in the Capital Plan:
Buildings
Vehicles
Equipment
Streetlights
Recreation Area - Park
Assets Type
Replacement Cost
Roads
$3,992,415
Water (including WTP building)
$9,424,277
Wastewater
$1,128,652
Bridge
$114,342
Buildings
$3,360,187
Equipment
$485,682
Vehicles
$956,448
Streetlights
$29,111
Recreation Area
$125,524
Total
$19,616,638
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Figure 6: Asset Replacement Cost by Category
5.1 ROADS
The Town of Latchford has a total of 8.01 km of roads. Latchford has gravel (G/S), surface-
treated (LCB) and paved (HCB) roads.
5.1.1 ROAD GEOMETRICS
Road Surface Types
The following summarizes the road surface types within the Town:
20.4%
0.6%
48.0%
5.8%
2.5%
17.1%
4.9%
0.6%
Asset Replacement Cost - 2016
Roads
Bridges
Water
Wastewater
Equipment
Buildings
Vehicle
Streetlights
Recreation Area
Total Replacement Cost $ 19.62 MM
Surface Type
Length (km)
Percentage
HCB
2.45
30.59
LCB
4.42
55.18
G/S
1.14
14.23
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Figure 7: Road Surface Types by Section Length
Condition-Based Analysis for Roads
The state of the infrastructure for roads is based on the 2014 ISI Road Needs Study. The 2016
conditions were calculated using degradation curves.
The following summarizes the Network Pavement Condition Index (PCI) weighted by section
length:
Surface Type
PCI
HCB
53.36
LCB
20.93
G/S
42.68
Figure 8: Road Condition by Surface Material
14.23%
30.59%
55.18%
Road Surface Type
G/S
HCB
LCB
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Figure 9: Network Road Condition
Note: Percentages are calculated based upon the section length of each road type
The strategies for rehabilitation/reconstruction for roads are suggested in Appendix A, the
detailed capital planning report for the Town.
5.1.2 OPTIMIZED CAPITAL PLANNING RESULTS
This section provides an overall summary of the optimized capital planning results for the paved
road network of the Town of Latchford. The analysis is only focused on the paved (LCB & HCB)
road network with a total length of 6.87 Km (excluding gravel roads) in 2016. The Town has
established a road rehabilitation plan for the period of 2017 through 2019. This planned work has
been scheduled as mandatory in the optimization analysis. This rehabilitation plan includes the
conversion of some gravel surfaces to surface treated (LCB), so after 2019 there are 7.09 km of
paved (LCB & HCB) roads in the inventory.
Budget Policy Scenario
The following budget scenario has been used in the optimization analysis:
Road Budget Scenarios
Year
Scenario 1
2017
$176,738
2018
$112,350
2019
$86,820
2020
$5,000
2021
$7,500
2022
$10,000
2023
$12,500
2024
$15,000
2025
$17,500
2026
$20,000
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The optimization objective is to maximize the network overall performance considering municipal
budget limits. The 'Network Overall Performance' represents the overall network pavement
condition index (PCI), weighted by section lengths, in addition to any applicable macro and micro
policy factors, such as functional classes, surface types, roadside environments, traffic, service
types, and socio-economic considerations, as set by the municipality. The network overall
performance has a numerical value between 0 and 100, with 100 representing the best possible
performance and 0 representing the worst possible performance. The network physical
performance is further divided into different functional classes, if applicable, to better investigate
the impact of budget policies on different classes of roads considering their relative importance.
Available Treatments and their Associated Costs
ISI's comprehensive list of pavement maintenance/rehabilitation/reconstruction treatments, cost
database, and decision tree have been used in the analysis to determine feasible treatments and
their associated cost in the optimization analysis. To predict future pavement condition, a series
of degradation curves, developed by ISI in collaboration with Golder Associates, has been used
for different classes of roads considering surface type, subgrade strength, functional classes, and
traffic data. The detailed list of applied treatments and their associated cost can be found in
Appendix A.
Network Optimization Results
Optimization analysis has been performed to produce a workable capital plan considering
municipal budgetary constraints while maximizing network overall performance to achieve the
highest possible investment efficiency. The recommended capital expenditure (CapEx) over the
capital plan under each budget scenario is shown in the table below.
Recommended Capital Expenditure (CapEx) under Recommended Budget Scenario
Figure 10 shows the effect of the budget scenario on the network overall performance. In
comparison with ranking or prioritization solutions, depending on the utilized ranking method, the
optimization results in a performance improvement in the range of 15% to 30% on average. The
current overall performance of the network has been determined at 32.2. Using the
recommended budget scenario, the overall performance at the end of the plan is estimated to be
80.4 with an average performance of 75.9 during the plan.
Figure 10: Overall Performance
0
10
20
30
40
50
60
70
80
90
100
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Network Overall
Performance
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
1
$176,738
$112,350
$86,820
$2,765
$6,720
$7,560
$11,620
$14,923
$15,293
$18,830
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Paved road infrastructure deficit is estimated at $851,044 in the beginning of the plan. Figure 11
shows the deficit projections for the budget scenario. Using the recommended scenario, the
projected deficit is estimated to be $22,260 at the end of the plan, showing a 97% decrease.
Deficit elimination is a side product of optimum allocation of the capital budget over time with a
balanced focus on preventive maintenance and major rehabilitation or reconstruction projects.
The road infrastructure deficit is calculated by the software based on the road condition (PCI) and
the cost of treatments considered the most cost effective at that condition. As for the Town's
rehabilitation plan, many of the scheduled treatments for a given section are outside the PCI range
in our decision tree, and would therefore not be selected by the optimizer. This explains the
significant drop in the infrastructure deficit relative to the rehabilitation costs. There is a possibility
that the life cycle gains achieved with these "lighter" treatments are less than with the more
extensive treatments that the optimizer would chose to maximize performance and keep life cycle
costs at a minimum.
Figure 11: Road Infrastructure Deficit Projection
Figure 12 shows the condition status of the network at each year. As shown in this figure, 66.3%
of paved roads are in poor condition, 32.9% in fair condition, and 0.8% in good condition, at the
beginning of the plan. Using the recommended budget scenario, 1.7% of paved roads will be in
poor condition, 5.6% in fair condition, and 92.7% in good condition, by the end of the plan.
Figure 12: Road Network Condition Status
$0.00
$100,000.00
$200,000.00
$300,000.00
$400,000.00
$500,000.00
$600,000.00
$700,000.00
$800,000.00
$900,000.00
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
0%
20%
40%
60%
80%
100%
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Annual Network Condition Status
Poor
Fair
Good
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5.1.3 RECOMMENDED PROJECTS
The road replacement costs are based on contractor costs for the region that have been indexed
based on our "Municipal Cost Index". ISI used numerous deterioration curves built into its road
network capital planning and optimization software to make recommendations on Latchford's road
network capital plan. These results are captured in Appendix A.
5.1.4 GRAVEL ROADS
The gravel road expenses are treated as operating expenses and are not included in the Capital
Plan.
Lifecycle Activities - Loosetop (Unpaved)
We are only dealing with Surface Treated roads in this Capital Plan. Gravel road expenses are
being captured as operating expenses, and inserting them into the Capital Plan would be a
redundant entry. Our only concern is that the Town establishes whether it is allocating sufficient
funds in its Operating Budget to cover the gravel road expenses. The OGRA strategy for gravel
roads is to re-gravel roads 75 mm every 3 to 5 years depending on the AADT. Every Town we
work with does annual maintenance rather than a 5-year resurfacing to 75 mm Granular A.
Timing
Activity
Activity Quantity
Class of Road
4
5
6
Annual
Grading
Dust suppression
Ditching
Culvert cleaning
Safety devices
8 x per year
4t per kilometer
1 x per year
as required
6 x per year
4t per kilometer
1 x per year
as required
6 x per year
4t per kilometer
1 x per year
as required
3 years
75mm Granular A
All roads
All roads
5 years
75mm Granular A
All roads
6 years
75mm Granular A
Spot repairs
Drainage replacement
All roads
10%
12%
All roads
10%
12%
10 years
75mm Granular A
Spot repairs
Drainage replacement
All roads
10%
12%
Figure 13: Gravel Road Maintenance Strategy (OGRA)
To Pave or Not To Pave Gravel
Paved roads provide improvement over gravel in ways that are hard to quantify with dollars,
including improved winter surfaces, improved safety with better signage and delineation, a safer
surface with higher skid resistance, a smoother surface that increases user satisfaction and
reduces vehicle maintenance costs, redistribution of traffic away from gravel roads, and an
increased tax base on adjacent property. Like everything else, maintenance costs for both paved
and unpaved roads are rising. Reduced funding and resources require more efficient use of
available money.
The decision on when to pave a gravel road is not easy, but an increase in traffic does lead to an
increase in maintenance costs, especially for gravel roads. This is due to more lost gravel due to
wear, and an increased need for blading and smoothing of the road surface.
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Figure 14: Economics of Upgrading an Aggregate Road
(The Minnesota Local Road Research Board, 2005)
Traffic is a primary factor in deciding to pave or not to pave. Gravel road maintenance costs per
mile appear to increase considerably after an ADT level of 200 vehicles/day. Paved roads are
most cost-effective at ADT levels above 150 vehicles/day. Informed decisions can be made based
on traffic data, local construction and maintenance costs, and area growth values to determine if
and when a roadway should be paved.
5.2 WATER NETWORK
This group comprises of:
Waterlines - consists of 4,960 meters of waterlines
An age-based analysis has been conducted on the water assets due to the non-availability of
condition ratings. The calculations, undertaken in this circumstance, were to determine the
remaining life of the asset on age-based analysis with pre-defined criteria. Age-based condition
assessment has the least level of confidence to determine the current State of
Infrastructure. The graphs below show the age-based analysis (life used for each asset
depending on their total useful life) for each asset mentioned above.
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
0-49
50-74
75-99
100-124
125-149
150-199
200-249
250-300
301-999
1000-up
Maintenance Cost/Mile
ADT Range
Maintenance of Paved and Gravel Roads
Bituminous
Gravel
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Figure 15: Waterlines Condition
5.3 WASTEWATER NETWORK
This group comprises of:
Sewerline (Storm) - consists of 3,850 meters of storm pipes
An age-based analysis is done on the water assets due to non-availability of conditions. The
calculations, undertaken in this circumstance, were to determine the remaining life of the assets
using an age-based analysis with pre-defined criteria. Age-based condition assessment has the
least level of confidence to determine the current SOTI. The graphs below show the age-
based analysis for each asset mentioned above.
Figure 16: Sewerline (Storm) Average Useful Life
47
0
10
20
30
40
50
60
70
80
90
100
Sewerlines (Storm)
Sewerlines (Storm) % Remaining Service Life (RSL) Analysis - 2016
Good 61% - 100%
Fair 41% - 60%
Poor < 41%
3,850 m
47
69
0
10
20
30
40
50
60
70
80
90
100
Waterlines
Waterlines % Remaining Service Life (RSL) Analysis - 2016
Poor < 41%
Fair 41% - 60%
Good 61% - 100%
570 m
4,390 m
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5.4 BRIDGES
This group comprises:
Bridges - there is 1 bridge in the inventory
The Bridge is the World's Shortest Covered Bridge, measuring 4.26 m wide and 3.4 m long
along the roof ridge. It spans a stream of 1.3 m across a concrete culvert. The State of the
Infrastructure for the bridge has been done on an age-based analysis due to the non-availability
of condition ratings. The calculations, undertaken in this circumstance, were to determine the life
used of the asset by conducting an age-based analysis with pre-defined criteria.
Figure 17: Bridge Condition
5.5 SOTI CONCLUSION
Asset
Group
Overall Condition
Rating
Rating
Range (Condition)
Comments
Road
Network
C
A
Good
70 to 100
Condition rating based on
condition-based analysis
B
Fair
50 to 69.9
C
Poor
0 to 49.9
Range (in Years)
Water
Network
B
A
Good
0 to 17 years
Condition rating based on
age-based analysis
B
Fair
18 to 36 years
C
Poor
>37 years
Wastewater
Network
B
A
Good
Different ranges
based upon total
useful life for each
asset type
Condition rating based on
age-based analysis
B
Fair
C
Poor
Bridge
C
A
Good
Different ranges
based upon total
useful life for each
asset type
Condition rating based on
age-based analysis
B
Fair
C
Poor
Figure 18: Linear Asset Condition Rating Report Card
25
0
10
20
30
40
50
60
70
80
90
100
Bridge
Bridge % Remaining Service Life (RSL) Analysis - 2016
Good 61% - 100%
Fair 41% -60%
Poor < 41%
Smallest Bridge
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As highlighted in the Report Card above, the current state of the linear infrastructure, based on
available condition rating analysis, presents a picture of the Town's linear assets. The condition
analysis according to the asset type is as follows:
Surface treated roads are in poor condition
Paved (HCB) roads are in fair condition
Water Network is in fair condition
Sewer Network is in fair condition
Bridge is rated in poor condition
The Town should continue to be proactive in their strategies, so as to extend asset useful life and
avoid major rehabilitation/reconstruction or replacement costs.
6 NON-LINEAR ASSET TYPES
6.1 BUILDINGS
This group comprises of buildings like the municipal office, fire station, indoor arena, etc. The
replacement cost of the buildings is taken from the insurance document (2015) provided by the
Town and HST of 1.76% is added to the base costs. For the Town's facilities, ISI conducted age-
based analysis to determined condition assessments to maintain the current portfolio. All
recommended projects as per the study are placed in Appendix A.
Figure 19: Buildings Condition Rating
78
48
19
0
10
20
30
40
50
60
70
80
90
100
Buildings
Buildings % RSL Analysis - 2016
Good 61%-100%
Fair 41%-60%
Poor < 41%
Library & Hall Ofice, Medical
Clinic, Rec. Centre
Museum, Fire Station, Township Garage, Concession Stand, Loggers
Hall of Fame, Indoor Arena, Quonset Storage, Sand Shed
Administration &
Information Centre
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6.2 VEHICLES
The vehicle group comprises of trucks, rescue van, etc. The replacement cost is calculated using
the Town's PSAB report for 2015, and in the case of the costs not provided, the historical costs
have been indexed using the CPI and Municipal Cost Index and added 1.76% HST to the costs.
Further review and discussion with the Town are required to ascertain the accuracy of the Town's
vehicle requirements.
Figure 20: Vehicles Condition Rating
6.3 MACHINERY AND EQUIPMENT
The machinery and equipment group comprises of generators, recreational and office equipment,
etc. The replacement cost is calculated using the Town's Insurance documents for 2015, and in
the case of the costs not provided, the historical costs have been indexed using the CPI and
Municipal Cost Index and added 1.76% HST to the costs. Further review and discussion with the
Town are required to ascertain the accuracy of the Town's equipment requirements.
68
53
18
0
10
20
30
40
50
60
70
80
90
100
Vehicles
Vehicles % Remaining Service Life (RSL) Analysis - 2016
Good 61% - 100%
Fair 41% - 60%
Poor < 41%
Sterling
Plough
Rescue Van, Case,
Dodge RAM
Pumper Truck, Dodge
Rescue, Champion 740,
Kubota, Tandem Dump
Trailer
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Figure 21: Equipment Condition Rating
6.4 STREETLIGHTS
The streetlights group comprises of various/pooled sets of data. The replacement cost is
calculated using the Town's Insurance documents for 2015, and in the case of the costs not
provided, the historical costs have been indexed using the CPI and Municipal Cost Index and
added 1.76% HST to the costs. Further review and discussion with the Town are required to
ascertain the accuracy of the Town's equipment requirements.
Figure 22: Street Lights Condition Rating
-27
-40
-20
0
20
40
60
80
100
Street Lights
Street Lights % Remaining Service Life (RSL) Analysis - 2016
Good 61% - 100%
Fair 41% - 60%
Poor < 41%
% RSL is -27%, meaning that the
asset life is over 8 years more than
the useful life of 30 years
65
4
0
10
20
30
40
50
60
70
80
90
100
Equipment
Equipment % Remaining Service Life (RSL) Analysis - 2016
Good 61% - 100%
Fair 41% - 60%
Poor < 41%
Photocopier, Breathing
Apparatus, Bunker
Suits, Fitness Eq.,
Playground Eq.
Bear Bins, Generator
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6.5 RECREATIONAL AREA
The recreational area comprises of Bay Lake Campground, Baseball Field, etc. The replacement
cost is calculated using the Town's Insurance documents for 2015, and in the case of the costs
not provided, the historical costs have been indexed using the CPI and Municipal Cost Index and
added 1.76% HST to the costs. Further review and discussion with the Town are required to
ascertain the accuracy of the Town's equipment requirements.
Figure 23: Recreational Area Condition Rating
7 CAPITAL PLAN
7.1 BACKGROUND
Managing the Town's capital assets requires an assessment of the long-term capital project
requirements and the establishment of the funding for high-priority projects in an efficient, timely
and cost-effective manner. As a result of this analysis, the Town will be able to more effectively
monitor, track and manage infrastructure assets, to ensure that policy makers obtain sufficient
funding in order to maintain, at a minimum, and potentially enhance future service levels. Through
capital planning, the Town of Latchford can plan the future operating budget expenses and reserve
funds to manage the financial position over a long-term period. Capital planning also provides the
core information needed for implementing the Council's planning and fiscal policies.
An Asset Management Plan provides many benefits including:
A systematic evaluation of all potential projects at the same time.
The ability to stabilize the debt and consolidate projects to reduce borrowing costs.
To serve as a public relations and economic development tool.
A focus on preserving a municipal government's infrastructure while ensuring the efficient
use of public funds.
An opportunity to foster cooperation among departments and the general public regarding
the Town's priorities.
70
3
0
10
20
30
40
50
60
70
80
90
100
Recreational Area
Recreational Area % RSL Analysis - 2016
Good 61%-100%
Fair 41%-60%
Poor < 41%
Baseball Field, Veteran Park,
Beach Dock, Walkway Park
Bay Lake Campground,
Basketball Park
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7.2 OVERVIEW
The Capital Plan, an integral part of an Asset Management Plan, is a blueprint for planning a
community's capital expenditures and is one of the most important responsibilities of local
government officials. It coordinates community planning, financial capacity, and physical
development. It is a tool to assess the long-term capital project requirements of a Town and to
establish funding of high-priority projects in a timely and cost-effective fashion. The development
of a Capital Plan is intended to ensure that policy makers are responsible to residents and
businesses of the community with respect to the expenditure of public funds. It also promotes the
provision of continuous efficient services.
The Capital Plan provides a detailed understanding of anticipated investments into tangible capital
assets. These assets include basic facilities, services, and installations needed for the functioning
of the community. The development of a CIP that will ensure sound fiscal and capital planning
requires effective leadership and the involvement and cooperation of all municipal departments. A
complete, properly developed CIP has the following benefits:
Facilitates coordination between capital needs and the operating budgets
Enhances the community's credit rating, control of its tax rate, and avoids sudden changes
in its debt service requirements
Identifies the most economical means of financing capital projects
Increases opportunities for obtaining federal and provincial aid
Relates public facilities to other public and private development and redevelopment
policies and plans
Focuses attention on community objectives and fiscal capacity
Keeps the public informed about future needs and projects
Encourages careful project planning and design to avoid costly mistakes and help a
community reach desired goals
A municipal government must take care of two key responsibilities in managing its infrastructure:
The first major responsibility is the maintenance and repair of existing infrastructure. Given
the high cost to replace linear assets and the fact that they are essential to providing
programs and services to the public, it is extremely important that regular maintenance
and periodic refurbishments be done to keep facilities and other assets in good working
condition for as long as possible.
The second major responsibility that municipal governments have is to plan and construct
new community infrastructure. This involves several steps including deciding what
services are to be provided, identifying community needs, careful planning, determining
priority investments, figuring out how to finance projects and good management to ensure
projects are completed on time and on budget.
Although the Capital Plan is generally maintained separately from the operating budget, they do
work in unison since the debt charges on funds borrowed for capital expenditures become expense
items in the annual operating budget. In addition, operating and maintenance costs of capital
assets have an impact on the operating budget. In order to have a realistic, workable Capital Plan,
therefore, it is necessary to estimate the effect that debt service and operating costs will have on
future tax rates. In this way, non-essential capital expenditures will not be undertaken at the
expense of pending essential capital projects and the Town will thus be in a better position to control
future debt levels.
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7.3 METHODOLOGY
The Town of Latchford's Capital Plan addresses infrastructure deficiencies and future capital
expenditures. It includes existing service infrastructure not meeting engineering standards, the
cost of renovation or replacement of infrastructure which has exceeded its service life and which
as a consequence, is not meeting required service standards. Provision is required to renovate or
replace previously constructed infrastructure when it reaches the end of its service life. These costs
do not include on-going operational and regular maintenance (which typically represent the
greatest cost component of a facility's service life, for example). Unless informed by the Town,
requirements such as investments required to support industrial, commercial and residential
development in accordance with the growth projections required to serve the community and social
needs as well as supply the increasing population and to service to the boundaries of new
subdivisions have not been analyzed.
The Town's Capital Plan includes:
Development of parameters for each asset class
Development of rehabilitation and replacement unit costs
Identifying the asset types to be included in the Capital Plan and determining and
confirming the components of each asset class
Identification of services to be provided and the capital expenditures to be incurred
Determination of secondary cost estimates of capital expenditures (consideration of cost
elements such as remoteness of the Town, land, architect/engineering fees, construction,
legal fees, taxes, etc.). The non-rebatable portion of HST at 1.76% has been applied, for
example
Determination of the time periods over which the asset is to be constructed or acquired
and the costs prorated accordingly
The methodology used for building this Capital Plan was to:
1) Determine the "unconstrained" rate of capital expenditure (assuming an unlimited budget).
A constrained rate of capital expenditure is provided in the final report.
2) Identify the Town's current infrastructure deficit.
3) Determine the Town's future requirements
4) Prepare a report detailing the capital required for each asset class based on current
rehabilitation and replacement unit costs
5) Establish the cost of maintaining existing infrastructure while addressing the infrastructure
deficit.
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8 ASSET MANAGEMENT PLAN RESULTS
Figure 24: 2016 Infrastructure Deficit by Asset Category
Like most other local governments in this province, Latchford is struggling with aging
infrastructure and constrained budgets. Upon completion of the collection of all the pertinent
data, the capital plan was generated, broken down by asset class for the years 2016 to 2025
(with HST and without inflationary factor), was developed. Inflation will be incorporated in the
financial analysis. The results are as follows:
Timeframe
Year
Capital Projects (Incl. HST)
Year 2016-2025
2016
$59,500
2017
$180,273
2018
$177,961
2019
$141,115
2020
$27,930
2021
$34,394
2022
$7,711
2023
$11,852
2024
$18,281
2025
$32,650
Total
$691,668
$780,760
$76,855
$29,111
$344,170
$51,135
$0
$130,962
$105,713
$851,044
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
Buildings
Rec. Area
Streetlights
Vehicles
Water
Wastewater
Equipment
Bridge
Roads
2016 Infrastructure Deficit
Total Infrastructure Deficit $ 2.37 MM
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Timeframe
Year
Buildings
Rec. Area
Streetlights
Vehicles
Water
Wastewater
Equipment
Bridge
Roads
Year 2016-
2025
2016
$3,000
$15,000
$0
$0
$0
$0
$41,500
$0
$0
2017
$0
$0
$0
$0
$0
$0
$0
$0
$176,738
2018
$0
$12,151
$0
$49,971
$0
$0
$0
$0
$112,350
2019
$0
$0
$0
$0
$0
$0
$51,528
$0
$86,820
2020
$0
$0
$0
$10,412
$0
$0
$14,205
$0
$2,765
2021
$0
$0
$0
$27,000
$0
$0
$0
$0
$6,720
2022
$0
$0
$0
$0
$0
$0
$0
$0
$7,560
2023
$0
$0
$0
$0
$0
$0
$0
$0
$11,620
2024
$0
$0
$0
$3,000
$0
$0
$0
$0
$14,923
2025
$0
$0
$0
$0
$16,717
$0
$0
$0
$15,293
Figure 25: Summary of Capital Plan 2016-2025
A detailed project-by-project breakdown of this Capital Plan and all proposed or consultant's/study
recommended projects are included in the capital project list in Appendix A.
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
$200,000
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Capital Plan - 2016-2025
Roads
Bridge
Equipment
Wastewater
Water
Vehicles
Streetlights
Recreational Area
Buildings
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9 LEVELS OF SERVICE
9.1 OVERVIEW
Levels of Service (LOS) are statements of service performance delivery. LOS is established
based on Council direction, the needs or wants of the community as well as legislative and
regulatory requirements. This report includes Operating Performance Indicators (OPI's) for
current levels of service. Through the ongoing Asset Management process, LOS will be further
defined for the Town, the Town's assets, and the community. They all are interconnected.
There is likely further effort required by the Town to address and formally define levels of service
from a customer perspective. Asset management, at its root, is really about balancing the full life
cycle costs of various services and the levels of service being provided. It is about knowing what
levels of service customers expect and what they are willing to pay. The level of service is a
reflection of the quality, function, and capacity of the services being provided. As a Town, you
might consider:
The level of service you are currently providing to users
The annual cost to continue to provide the current level of service
How the current level of service is expected to change in the future given current funding
levels
If you are meeting the level of service expectations of your users given the costs to
provide current, increased or decreased levels of service
As a rough generalization, the higher the level of service provided, the higher the life cycle costs
of providing that service. Levels of service drive the expected treatments in the management of
infrastructure. Customer levels of service outline the overall quality, function, capacity, and safety
of the service being provided. Technical levels of service outline the operating, maintenance,
rehabilitation, renewal and upgrade activities expected to occur within the Town. When practicing
asset management, it is important to first document the current level of service being provided.
As asset management becomes more established within your Town, levels of service may be set
through consultation with the community. However, it is critical that prior to consulting with the
public, the current levels of service along with associated life cycle costs are understood.
It is also important to discuss how various levels of service may have different risks associated
with them. These risks may play an important role in determining if certain levels of service are
acceptable. As with all economic analysis, a sensitivity analysis should be carried out on those
parameters which are more likely to be beyond the control of the organization, such as market
forces affecting the opportunity cost of capital, community expectations/perception on risk and
factors in the long-term, health and safety effects, community economic effects, environmental
and social effects, feasibility including public support and the Town's readiness.
9.2 METHODOLOGY
The implementation of a formal Maintenance Management System (MMS), among many other
items, measures the response time, lag time, total time to resolution, resources involved, and
communication logs for all issues identified internally and by customers. Going forward, this type
of information not only provides the basis for resource and program management decisions but
is key information that will provide council and the public with the service level information in
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relation to the cost of service. Historically a significant portion of activities has been provided at
a 'best we can do with what we have' basis. Through a review of design guidelines, and metrics
being captured by the MMS, the Town of Latchford can re-orientate service delivery that is driven
by service level expectations that incorporate Level of Service factors. To assist in better
establishing Levels of Service, the Town should also consider collecting technical performance
measures needed to provide information on:
the types of failure
the number of customers affected
the duration of the failure
the severity of the failure
This kind of technical performance measurement and monitoring is undertaken to support
decision-making by the asset managers within an organization. It addresses issues for
consideration in the effective management of the assets, such as:
Assessing the effectiveness of the operational, maintenance and capital works program
Review and refinement of maintenance and rehabilitation strategies and standards
Assistance in strategic decision-making through the definition of remaining life, based on
the measure being assessed, e.g. capacity of a pipe versus demand.
Benchmarking and other comparison management techniques are used both internally and for
external regulation and monitoring, to assess the performance of infrastructure groups and asset
owners. Each Town needs to consider developing rating systems to judge the assets from both
a Town's perspective with the values that it brings to the organization, and also from a user's or
regulator's perspective, in terms of the functionality, suitability, cost and service performance of
the asset.
9.3 LEVELS OF SERVICE PROCESS
Some Levels of Service (LOS) for the Town can be attained through documents developed in the
industry and by internally focusing on technical requirements that meet generally expected levels
of operation and safety:
Provincial Minimum Maintenance Standards (MMS) for roads, street lighting, water and
drainage
Drinking Water Quality Management System (DWQMS)
Engineering Standards Manuals
Operating Performance Indicators - These are the main activities within each operating budget
cost center. These activities (OPI's) link directly to the level of service provided by the Town. The
OPI's also include maintenance tasks that help extend asset life. A good balance between asset
replacement through capital funding and ongoing maintenance provides the best cost efficiency
and service productivity.
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9.4 OPERATING PERFORMANCE INDICATOR EXAMPLE
ROADS
Service
Operating Performance
Indicators (OPI)
Current
Performance
Target
Performance
Timeframe
Examples for Roads below:
Road Maintenance &
Repairs
Complete approximately X
work orders per year for
service requests including
pothole repair, minor asphalt
patching, sightline
improvement, MVA clean-up.
1500
500
3 Years
Brushing and
Roadside Mowing
Complete approximately X
km's of brushing on roadsides
annually.
N/A
50 km
2 Years
Complete roadside mowing X
times annually
2
3
3 years
Boulevard
Maintenance
Twice per year cut every
boulevard in the Town.
2
3
3 Years
Annual weeding, cleaning,
and caulking of X km of
sidewalk and curb.
7
7
Maintain sight lines at
intersections for vehicle and
pedestrian safety.
14 Days
14 Days
Timeline
Achieved
Roads Recapped ____km's -
Annual Average
8
30
2 Years
Gravel Roads Surface
Treated ___km's - Annual
Average
3.5
20
2 Years
Curbing/Shoulders
Annual repair, by August, of
all curbing damage in
previous winter.
September
July
1 Year
Sidewalks &
Walkways
Completed Inspections____
times per year
1
1
Timeline
Achieved
Sidewalks / Walkways swept
_____ times per year
1
1
Timeline
Achieved
Vandalism
Within X hours of notification,
remove graffiti.
48
24
1 Year
Street Lighting
Service requests for street
light repair completed within X
hours.
5 days
48 hours
1 Year
Signs
Annual inspection and
maintenance of all X stop
signs.
1225
1225
Timeline
Achieved
Annual inspection of
crosswalk, pedestrian, school
and playground signs and
beacons.
September
July
1 Year
Annual Upgrade of X signs to
diamond grade
12
25
1 Year
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Snow and Ice Control
Major roads including
emergency routes during
winter events.
16 Hours
16 Hours
Timeline
Achieved
Residential areas - through
roads first then cul-de-sacs
and dead ends.
16 Hours
16 Hours
Timeline
Achieved
Residential areas will be
plowed and maintained within
96 hours unless snow and icy
conditions return crews back
to major roads.
16 Hours
16 Hours
Timeline
Achieved
VEHICLES - FLEET
Service
Operating Performance
Indicators (OPI)
Current
Performance
Target
Performance
Timeframe
Fleet Maintenance
Undertake preventative
maintenance and repairs to
meet industry standards for
safety and operation.
Daily
Daily
Timeline
Achieved
Maintain fleet availability at
X%.
80
100
3 Years
Small Equipment
Inventory, maintain and repair
X pieces of small equipment
for use by all departments.
40
40
Timeline
Achieved
Preventative
Maintenance
Services
X units inspected every X
months to maintain safety and
fleet efficiency.
32 Units
every 250
Hours
32 Units
every 250
Hours
Timeline
Achieved
WATER
Service
Operating Performance
Indicators (OPI)
Current
Performance
Target
Performance
Timeframe
Valves & Air Valves
Exercise all line valves X per
year with
monthly/quarterly/yearly
reporting
1
1
present
Water Main Breaks
Upon notification emergency
response and water shut
down within X minutes.
60
60
present
Repair completed and water
service re-instated within X
hours.
12
12
present
Currently experiencing X
breaks per year on
average
0
>2
present
Service Connection
Renewals
X renewals completed each
year on average.
0
Service connections
associated with Road Rehab
Program and capital projects
are checked and replaced as
necessary.
at that time
at that time
present
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Pump Stations
Annual painting
no
yes
2014
Annual vegetation control
yes
yes
present
X year cycle - rebuild control
valves.
as necessary
10 years
2014
X year cycle - rebuild or
replace pumps.
as necessary
15 years
2014
Weekly trouble shooting and
repairs
yes
yes
present
X weekly visual inspections
7
7
present
Stations
Maintain all pressure reducing
stations to operate without
failure.
as necessary
every 5 years
2015
X year cycle - complete
replacement of each station
as necessary
as necessary
present
X year cycle - complete
rebuild of the system.
as necessary
every 10
years
2015
Annual painting and
vegetation control.
n/a
n/a
n/a
Water Testing
100% of water samples
contain no bacteriological
contaminants.
100%
100%
present
Monthly reporting
no
no
present
WPC Chlorination
Disinfects X% of Town
supply.
100%
100%
present
Daily data acquisition and
inspection
yes
yes
present
Daily water testing
yes
yes
present
Monthly chlorine cylinder
replacement.
n/a
n/a
n/a
Semi-annual chlorination
equipment replacement and
repairs
n/a
n/a
n/a
Annual painting and
vegetation removal
n/a
n/a
n/a
X year cycle - replacement of
small piping and control
valves.
as necessary
every 10
years
2014
Reservoir
Chlorination
Disinfects X% of Town supply
n/a
n/a
n/a
Water Main Flushing
Annually flush all supply lines.
annual
annual
present
Service Call-outs
Provide 24/7 on call coverage
for emergency response.
yes
yes
present
10 FINANCIAL PROJECTIONS
Our first steps in Financial Forecasting include compounding/inflating historical costs to Present
Value (2015/16) and then further compounding/inflating these numbers to meet future
requirements. To maximize the accuracy of our projections, we have developed a
comprehensive "Municipal Cost Index (MCI)". To further fine-tune our projections, we do a micro-
analysis of your geographic region.
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Our basic assumptions and calculations, included within this document, are key to the planning
process and serve as the base for the forecasting and predicting your future budgetary
requirements and needs.
10.1 CONSUMER PRICE INDEX: OUR PERSPECTIVE
A price index measures the change in the
costs of purchasing a fixed basket of goods
and services in the current period, compared
to a base period, typically month-over-month
or year-over-year. The most widely applied
measure of inflation/price index is the
Consumer Price Index (CPI). Given its
pervasive
use
in
setting
cost-of-living
adjustments, it can be the appropriate metric
when calculating the rate of consumer
inflation
at
the
national
level.
Major
components of the CPI include housing,
food, and transportation.
Source: www.marketmonetarist.com
Extending the use of the CPI into discussions about the appropriate level of tax and fee rate
increases becomes problematic, however, because a government's actual experience with
inflation can differ greatly from the CPI. This is because the largest expenditures for governments
are typically labor, materials, and contractual services -- different factors than those found in the
CPI. Spending patterns that are different than those of other economic sectors. A price index
that does not reflect the municipal purchasing structure does not truly reflect changes in the cost
experience, and thus the purchasing power, of local governments. For instance, the CPI reflects
household spending patterns that focus on shelter (27.7 percent of the Statistics Canada CPI
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basket), transportation (19.5 percent), food (15.5 percent), and recreation (12.9 percent) -- none
of which registers as leading purchase categories for local governments.
There are two main parts to the MCI calculation: the weightings of the expenditure categories
(showing the relative importance of items in the index), and the inflation factor used for each
component. The inflation factors for expected price changes are based on economic data from
two main sources, the Conference Board of Canada (CBOC) and Statistics Canada. The key
issue is to match an appropriate inflator from these external sources to the types of expenditures
in each budget category. MCI can be used in the following ways:
To measure the increase in overall municipal expenditures attributed to inflation;
To allow managers to more closely monitor the increase in spending by expenditure
category, thus making inflationary price increases or decreases more visible;
To provide an indication of the historical, current, and future direction of prices relative
to municipal expenditures;
To explain increased expenditures attributed to inflation when submitting annual
budgets.
10.2 MUNICIPAL COST INDEX
Municipal Cost Index (MCI), entails both inflationary and non-inflationary components along with
their Weight and Inflators. MCI has been created in such a way that it focuses on the overall
yearly impacts of a basket of goods that our clients have maximum exposure to and represents
the operational/working capital needs on an ongoing basis. MCI will be used to a part of the
assumptions in the following calculations:
Municipal Cost Index is used as an integral part of Capital Planning Module, MCI served
as the base for inflating/compounding historical costs to Present Value
Financial Forecasting Municipal Cost Index will be used as a compounding/inflation
factor till the 2016 financial year and then the compounding/inflationary factor will be
based on reliable research reports like RBC, TD, Scotia Bank, Stats Canada to predict
the rest of the years (basis Inflation rate, GDP growth rate, Population, Risk Free Rate,
Market Premium Rate etc. will be considered for a constant growth rate)
Breakdown of revenue and expenditure and predicting the sources of funds and
expenses
Latchford's Municipal Cost Index is attached as Appendix C.
10.3 FINANCIAL STRATEGY ASSUMPTIONS
The following summarizes the key assumptions used in the preparation of the financial strategy
for major assets:
2.3% annual operating income increase (property taxation, base scenario)
2% annual increase in user fees and 1% increase in other revenues
2% annual operating expenditure increase
2% annual increase in capital replacement costs
Gas Tax Fund $17,537 (not inflated)
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Existing funding sources, as identified in the 2015 FIR
No growth-related capital has been included in the analysis as the financial strategy
relates to the replacement of existing assets.
Capital replacement needs as identified in the previous section of this report
It is important to keep in mind that assumptions may significantly change over time. In addition,
capital replacement cost estimates may vary from current projections. As such, there is a need
to monitor the financial strategy over time.
10.4 EXISTING WATER FUNDING REQUIREMENTS
All the analysis was age based and the capital planning horizon is short considering the nature of
system. Over the next 10 years, there are only a few capital projects to the tune of $16,717. To
establish an effective water wastewater analysis, system should be analyzed over a 40-50-year
system lifespan. Ten-year horizon does not consider all the upcoming expenses; a longer span
will better prepare the Town for expenses coming in the pipeline. Also, a longer horizon will enable
the Town to create better reserves and feasibility of the rates being charged.
10.5 FUNDING REQUIREMENTS
In our efforts to create the best plan moving forward for the Town, ISI decided to create two
scenarios:
Capital Plan including infrastructure deficit (backlog)
Capital Plan (excluding infrastructure deficit)
A Capital Plan that would eliminate the deficit over the next 10 years would require the Town to
make an average annual capital investment of $295,000 as compared to the current contribution
of $48,419. By our calculations, the Town would be required to increase property taxes by in
excess of 12% annually, making this scenario a highly unlikely choice. The Town would need to
be successful in attaining substantial government grants/funding to deal with its infrastructure
deficit.
We believe that self-sufficiency should be the Town's objective. The Town will continue to
experience an infrastructure deficit like many other similarly-sized municipalities. ISI recommends
what it believes to be an implementable capital plan as a roadmap and encapsulate the Town's
capital projects for the next 10 years. By our calculations, the average annual capital requirement
is $69,167 and the existing contribution to the capital program is $48,419. The Town needs to
increase its current contribution and build reserves so that it can prepare to maintain service levels
and meet future capital requirements. The Town's strategies to close/reduce the gap will be
discussed in the next section of the report.
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Figure 26: Capital Program Contributions (Required vs. Existing)
10.6 FINANCIAL STRATEGIES - THE INFRASTRUCTURE GAP
Financial sustainability requires that a Town ensures that there are sufficient resources to support
the delivery of services for which the Town bears responsibility. Given the need and benefit for
further infrastructure investment in order to protect, sustain, and maximize the use of Latchford's
infrastructure assets, a number of options and strategies have been considered.
10.6.1 STRATEGY 1: SPECIAL LEVY
General Infrastructure
ISI recommends that the Town implement a special infrastructure levy for the replacement of
existing infrastructure. For example, a special infrastructure annual levy increase of 4% would
generate sufficient revenues to reduce the tax related infrastructure gap beyond 10 years. This
levy would meet the requirement of the projected $69,167 annual contribution. An optimized road
plan, as provided and including the Town's 2017-2019 rehabilitation plan, would decrease the
road network infrastructure deficit from $851,044 in 2016 to $22,260 in 2025, (a 97% decrease).
By increasing the levy by an additional 4% annually the Town will increase the funds available
over the 10-year period by approximately $874,658. This reflects the significant power of
compounding:
In year one, the additional 4% special levy would generate an additional $27,563
In year 10, with an assumed 4% special infrastructure levy, this would generate an
additional $176,767
The following table is provided for illustrated purposes to help explain the significant potential
through a modest levy increase to address the tax infrastructure gap:
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Current Average Contribution
Average Required Contribution
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4% Special Infrastructure Levy
2017
$ 27,563
2018
$ 42,647
2019
$ 58,657
2020
$ 75,636
2021
$ 93,631
2022
$ 112,690
2023
$ 132,863
2024
$ 154,204
2025
$ 176,767
Total
$ 874,658
Average Income
$ 97,184
10.6.2 STRATEGY 2: RETHINKING INFRASTRUCTURE/SERVICES
There is always the potential to reduce infrastructure costs by determining the most cost-effective
options for all capital programs for new or rehabilitated infrastructure by pursuing life cycle
costing analysis which was discussed earlier in the report. Further, as indicated previously, the
timing to replace assets is based on the analysis undertaken using theoretical assumptions in
some cases. Due to the funds available, there will be a need to identify where the replacement
of some assets may be deferred.
Many municipalities develop rehabilitation and replacement programs on a system-wide program
basis versus annual project by project basis. This will allow for improved prioritization and
coordination of required works within similar geographic areas.
Recognizing the significance of the infrastructure deficit, the Town should consider a services
review with the objective of re-evaluating the priorities of the community and cost of services
provided.
10.6.3 STRATEGY 3: STRATEGIC USE OF DEBT
In some circumstances, it makes good sense to incur debt today rather than take the
consequence and cost of allowing assets to deteriorate to a point where replacement or
reconstruction would substantially increase cost to the community. The concepts involved with
changing the oil in our cars and fixing the roof of our house also apply to preventive maintenance
on road networks, for example. Keep a road in good shape with regular maintenance and you
will never face a full reconstruction.
Due to the backlog in the tax-supported programs, there is a need to examine the cost/benefit of
addressing these needs through the issuance of debt. Using debt strategically can provide
capital funding flexibility by allowing certain infrastructure to be built and used before sufficient
revenue has accumulated to offset the needed investment. Debt is frequently issued and
considered a standard practice in Municipalities for capital projects that are long term in nature
and that benefit future taxpayers, thereby spreading the costs across future years. As such, debt
promotes inter-generational equity in that infrastructure is paid for by those who use it. With
favourable interest rates and significant backlog, the Town may wish to consider the need to
issue debt to expedite capital replacement. Infrastructure Ontario interest rates at the time of
this report are as follows:
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10 year - 2.64%
15 year - 3.05%
20 year - 3.33%
For example, if the Town were to issue $1 million in debt to address a portion of the backlog
deemed to be the highest priority that was beyond reserve availability, the debt payments would
be approximately $88,000 (assuming 15-year term). A debt management policy improves the
quality of decisions, identifies policy goals and demonstrates a commitment to long-term financial
planning, including a multi-year plan. Adherence to a debt management plan signals to rating
agencies and capital markets that the Town is well managed and is well positioned to meet its
obligations in a timely manner. The Province regulates the amount of debt that Municipalities
issue by setting an annual repayment limit for each Town (25% of a Town's own source
revenues). Based on our experience, Municipalities typically establish thresholds below the
Provincial limit to take into consideration taxpayer affordability and to ensure flexibility.
In addition to a debt guideline, monitoring also becomes important when considering the idea of
the increased use of debt as a funding source to ensure that it is being used in a fiscally
responsible manner. Government Finance Officers Association recommends that Municipalities
adopt policies that specify appropriate uses for debt.
The following strategies are recommended to determine the most appropriate time to issue debt
Debt will be proportionate to the Town's tax base and will not put an excessive burden
on operating expenditures.
Outstanding and planned debt levels will not exceed an amount that can be supported
by the existing and projected tax revenue base. Debt policies will focus on:
o projected debt requirement
o limits and benchmarks
o term and structure of debt
o use of reserves to offset debt issuance
Long-term debt for the replacement and refurbishment of existing capital assets will be
reduced and a planned process will be developed whereby an annual contribution will
be made to meet lifecycle needs of all assets.
The following policies are recommended to manage debt within the Town:
Tax Debt Charges as a percentage of Tax Own Source Revenues will not exceed 10%.
Long-term debt financing will be restricted to specific project types:
o Increased/new services to residents for new initiatives
o New, non-recurring infrastructure requirements
o Projects which are supported by a business plan that shows revenues will cover
capital and interest costs
o Projects where the cost of deferring expenditures exceeds debt servicing costs
o Project costs not recovered from Development Charges
o Projects tied to third party matching funding
(Note: These restrictions may have to be phased in to meet short-term budget challenges.)
The length of the term of debt will not exceed the useful life of the underlying asset.
The Town will monitor and report on all forms of debt annually.
10.6.4 STRATEGY 4: USE OF GRANTS
It is well established that the condition of Canada's municipal infrastructure is one of the keys to
underpinning, maintaining and enhancing Canada's economic productivity and competitiveness.
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It is therefore clearly in the national and provincial interests for the federal and provincial
government to institute permanent and sustainable infrastructure funding. Along with the
strategic use of debt, the Town can also apply for the grants available from the Provincial and
Federal governments. Some significant components of the infrastructure deficit can be dealt with
through close monitoring of grant programs and a careful expression of interest to access these
funds.
FEDERAL GOVERNMENT INVESTING IN CANADA
Across the country, people and communities are in need. The middle class and those working
hard to join it need the opportunities that come with good, well-paying jobs, and communities need
help to maintain, improve and expand the things that make Canada's Towns and cities great
places to live.
Investing in Canada's infrastructure builds strong communities and helps to strengthen and grow
the middle class, setting the stage for sustained economic growth in the future. In Budget 2016,
the government made a down payment on future growth by making immediate investments of
$11.9 billion in public transit, green infrastructure and social infrastructure. This 2016 Fall
Economic Statement strengthens the government's commitment to long-term growth for the
middle class. It proposes an additional investment of $81 billion over 11 years, starting in 2017-
18, in public transit, green infrastructure, social infrastructure, transportation that supports trade,
Canada's rural and northern communities, and smart cities. The government will also establish a
new Canada Infrastructure Bank to provide innovative financing for infrastructure projects, and
help more projects get built in Canada, where public capital can be leveraged.
Taking into account existing infrastructure programs, new investments made in Budget 2016 and
the additional investments contained in this Fall Economic Statement, the government will make
a total investment in Canada's communities of more than $180 billion.
This commitment is unprecedented in Canadian history.
ONTARIO PROVINCIAL GOVERNMENT
As announced in the 2016 Ontario Economic Outlook and Fiscal Review, the Province of
Ontario plans to invest more than $160 billion over 12 years, starting in 2014-15.
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Figure 27: The Province's 12-year infrastructure plan by sector (%)
The infrastructure plan includes investments in Moving Ontario Forward for public transit,
highways and other priority infrastructure projects. The infrastructure expenditures table below
outlines all planned investments over 12 years, starting in 2014-15, and shows they touch all
key sectors.
Figure 28: 2016-17 Infrastructure Expenditures Table
(Source: 2016 Ontario Economic Outlook and Fiscal Review)
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11 RECOMMENDATIONS
11.1 SOTI RECOMMENDATIONS
The SOTI/Capital Plan identifies a number of asset-specific recommendations. However, there
are six recurring recommendations that should be addressed in future strategic asset
management initiatives:
1. Develop, through more detailed analysis, a plan for allocating the additional funds to the
operating and/or capital budgets, as required, in order to successfully develop,
implement, and maintain an approved asset management plan;
2. Develop a policy and implement a strategy to reach long-term sustainable funding for
each of the assets covered in this SOTI Report;
3. Implement a comprehensive budget structure along service delivery lines, so that
service managers can adequately know what the true total cost of their service is
(including asset management, operations, capital, and borrowing costs).
4. Review the selection and use of rehabilitation strategies on life-cycle costing and on a
return-on-investment (ROI) basis.
5. Review operating and maintenance practices, balancing least life-cycle cost against
level of service and risk exposure, on a business-case basis using InfraGuide Best
Practices and other industry sources;
6. Provide regular updates to the SOTI Report Card and Analysis
11.2 CAPITAL PLAN RECOMMENDATIONS
1. Asset condition assessment of capital assets should be considered wherever feasible.
The application of a standard life expectancy of an asset reflects a financial approach
(PSAB 3150). Age-based condition assessment has the least level of confidence for
building a capital plan.
2. The Town of Latchford could consider releasing a policy defining its strategy and
intention as it pertains to the infrastructure deficit, including communications to the
general public.
3. The Town needs to build a definitive policy with respect to it's infrastructure deficit.
4. The Town should proactively define organizational responsibilities to maintain the asset
inventory including proposed and actual project cost information, updating the data as
assets are acquired or betterments are added to existing assets and projects are started
and completed. In this manner, the accuracy of future Capital Plans will increase over
time.
5. The Town should consider establishing as policy the following guiding principles, that it
be:
a) Customer Focused: To have clearly defined Levels of Service and applying asset
management practices to maintain the confidence of residents in how the Town
of Latchford assets are managed.
b) Forward Looking: To make the appropriate decisions and provisions to better
enable its assets to meet future challenges, including changing demographics and
populations, customer expectations, legislative requirements, technological and
environmental factors.
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c) Service Focused: To consider all the assets in a service context and taking into
account their interrelationships as opposed to optimizing individual assets in
isolation.
d) Risk-based: To manage the asset risk associated with attaining the agreed levels
of service by focusing resources, expenditures, and priorities based upon risk
assessments and the corresponding cost/benefit recognizing that public safety is
the priority.
e) Value-Based/Affordable: To choose practices, interventions, and operations that
aim at reducing the life cycle cost of asset ownership, while satisfying agreed
levels of service. Decisions are based on balancing service levels, risks, and
costs.
f) Holistic: To take a comprehensive approach that looks at the "big picture" and
considers the combined impact of managing all aspects of the asset life cycle.
g) Systematic: To adopt a formal, consistent, repeatable approach to the
management of its assets that will ensure services are provided in the most
effective manner.
h) Innovative: To continually improve its asset management approach, by driving
innovation in the development of tools, practices, and solutions.
6. To meet the goals and objectives of this policy, senior management could consider:
a) The creation and maintenance of a Comprehensive Asset Management (CAM)
governance structure to lead the development of AM tools and practices and to
oversee their application across the organization.
b) Adopt a Comprehensive Asset Management Strategy (AMS) to:
Establish, document and continually adhere to industry recognized asset
management protocols;
Develop asset management knowledge and competencies aligned with
recognized competency frameworks;
Entrench lifecycle costing when evaluating competing asset investment needs
across the Town assets;
Monitor the performance of the assets and track the effectiveness of AM
practices with a view to continuous improvement;
11.3 LEVEL OF SERVICE RECOMMENDATIONS
1. We recommend that the Town incorporate a Level of Service analysis prior to resolving
the infrastructure deficit in order to maximize the impact of their capital investments with
the objective to:
Refine levels of service that balance customer expectations with risk,
affordability and timing constraints as it pertains to the Town's unique
requirements;
Adopt risk-based decision-making processes that consider the likelihood of
asset failure and the consequence of a failure with regards to impacts on safety
and levels of service;
2. To assist in better establishing Levels of Service, the Town should consider collecting
technical performance measures required to provide information on:
the types of failure
the number of customers affected
the duration of the failure
the severity of the failure
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3. To support decision-making for effective management of the assets, the Town should
consider technical performance measurement and monitoring, undertaken by the Town
such as:
Assessing the effectiveness of the operational, maintenance and capital works
program
Review and refinement of maintenance and rehabilitation strategies and
standards
Assistance in strategic decision-making through definition of remaining life,
based on the measure being assessed
11.4 FINANCIAL STRATEGY RECOMMENDATIONS
A financial strategy to support the asset management plan is a dynamic document that should be
updated and re-evaluated on an ongoing basis. The Town should give due consideration to the
following points:
1. The Town has insufficient funds from existing sources to proactively manage its
infrastructure and will need to prioritize its requirements to maximizing the impact of
existing financial resources.
2. The Town has a growing infrastructure deficit which is serious considering its population
and tax base. A special infrastructure levy will help the Town to reduce the gap over
time and should be taken into consideration.
3. The Town requires a rate review for a detailed analysis, so as to create reserves to be
able to sustain the current and future service levels and begin to close the infrastructure
deficit.
4. In the event that the Town implements an infrastructure levy, a percentage of the
additional funds should be transferred into a reserve so that the Town has some
flexibility to prioritize and sustain future infrastructure and service level requirements.
5. The Town needs to be proactive in reviewing and capitalizing on the upcoming
Provincial and Federal programs, as the Town will need financial assistance to close
its infrastructure deficit. It should seek government grants to be able to undertake the
capital projects outlined in this Asset Management Plan.
6. The Town needs to be proactive in reviewing funding options including Infrastructure
Ontario Lending Policies, Private Public Partnerships, user fees and other funding
options to have an understanding of financing options.
7. The Town needs to embrace the principles of Asset Management to formulate
assumptions, projections, and strategies going forward. The Plan should be modified
on an ongoing basis, taking into account changes in the municipal environment.
8. The Town should track and build awareness of the results of its projections on current
operating and capital spending and funding levels with the objective of fine-tuning the
forecasting process.
9. The Town should continue the analysis and examination of key financial goals and
strategies that guide future priorities and expenditures.
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12 CONCLUSION
As a general comment, the Town of Latchford is hampered by limited revenue and extensive
infrastructure like many municipalities of similar size and asset base. ISI worked with staff who
were knowledgeable and committed. The information we received was, by in large, accurate and
well organized. The overall state of the linear infrastructure at the Town is in line with the vast
majority of municipalities in this Province. As highlighted in the Report Card, the current state of
the linear infrastructure, based on available condition rating and age analysis, presents a picture
of the Town's linear assets to be in need of substantial work and the Town should continue to be
proactive in their strategies, so as to extend asset useful life and avoid major
rehabilitation/reconstruction or replacement costs.
It is highly recommended that the Town of Latchford embrace the principles of Asset
Management. Managing existing infrastructure, doing the right thing, at the right time, involves
knowing and actually doing the most cost-effective maintenance, repair, rehabilitation or
replacement activity at the right time throughout the entire lifecycle of the asset. Beyond cost
savings, assets need to be viewed in terms of their ability to enhance quality, function, capacity
and safety of the service being provided.
The process of implementing Asset Management is rife with challenge. It requires clear direction
from Council. It requires significant cross-departmental cooperation. It requires the allocating of
time, energy, and resource to assume new responsibilities. It requires consultation with the
community. It requires working with constrained budgets to balance priorities. Because
infrastructure management deals with assets that have long lifespans, it may take years before a
substantial financial return on investment (ROI) becomes apparent. Still, managing existing,
capital intensive, public sector infrastructure asset could provide very significant benefits (i.e. 20
- 40% reductions in life cycle costs).
Finally, the Town will likely be faced with difficult decisions over the next years, and the
infrastructure deficit will continue to widen without corrective action. The Council should put
together a public communication program to engage the community in discussing the true cost of
services and the assets required to provide those services. Community and stakeholder buy-in
for an implementable asset management plan and service levels in line with public expectations
and willingness to pay are critical to the success of the program.
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APPENDIX A - DETAILED LIST OF CAPITAL PROJECTS
Click on the Dropbox hyperlink below for a detailed list of your Capital Projects over the next 10
years:
Click here to view
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APPENDIX B - ASSET USEFUL LIFE
Departments
Assets
Useful Life as per CIP
(Years)
Source
Transportation
Network
HCB Roads
50 (Total Reconstruction)
Infrastructure Report
LCB Roads
50 (Total Reconstruction)
Infrastructure Report
Gravel Roads
(Recurrent Resurfacing)
Infrastructure Report
Structure
Culverts
50
Infrastructure Report
Sewer Network
Sewerline (Storm)
85
Infrastructure Report
Sewerline (Waste Water)
80
Infrastructure Report
Lagoon
50
Infrastructure Report
Sewer Structure (Storm)/Ditches
50
Infrastructure Report
Catch basin (Storm)
50
Infrastructure Report
Manhole (Waste Water)
75
Infrastructure Report
Water Network
Waterlines
75
Infrastructure Report
Water Services
75
Infrastructure Report
Hydrants
50
Infrastructure Report
Equipment
Equipment
Varies
As per the TCA Policy
Fleet
Vehicle
Varies
As per the TCA Policy
Parks
Recreation Area
Varies
As per the TCA Policy
Facility
Treatment Plant
Varies
As per the TCA Policy
Buildings
50
Infrastructure Report
Rating Category
% Remaining
Service Life (RSL)
Definition
Good
61% - 100%
The infrastructure in the system or network is generally in good condition,
typically new or recently rehabilitated. A few elements show general signs of
deterioration that require attention
Fair
41% -60%
The infrastructure in the system or network shows general signs of
deterioration and requires attention with some elements exhibiting
significant deficiencies
Poor
< 40%
The infrastructure in the system or network is in poor condition and mostly
below standard, with elements approaching the end of their service life. A
large portion of the system exhibits significant deterioration
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APPENDIX C - MUNICIPAL COST INDEX
Notes:
Municipal Cost Index, is calculated to better represent the municipal purchasing power
and cost experience, so ISI will use 2.4% as the compounding/inflationary factor up until
2016
Municipal Cost Index represents the basket of goods and services which is
consumed/used by Municipalities and represents the operational/working capital needs
on an on-going basis
Assigned weights represent the percentage of services/goods consumed out of total
spend
Inflators represent the year on year changes in the components
Component's weight and inflators, sum all represents the overall cost experience for the
Municipalities/region as compared to CPI
MCI is created as to minimize the variation/deviations of cost/purchasing experience in
the region
The sources of Municipal Cost Index are the Financial Statements for your specific region
Outliers have been removed from the data for Municipal Cost Index calculation to average
out/standardized data
2009
2010
2011
2012
2013
2014
2015
Wages and Salaries and Benefits
32%
22%
2%
-2%
2%
-4%
6%
Interest on Long Term Debt
2%
79%
5%
19%
4%
1%
Materials
28%
-23%
18%
-2%
12%
7%
Contracted Services
22%
9%
-2%
5%
2%
2%
Rents and Financial Expenses
2%
-9%
23%
3%
External Transfers
6%
-13%
36%
-38%
9%
Amortization
8%
Average MCI
MCI(Region 1)
COMPONENTS
Weights
Inflators for Each Component
2.40%