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ASSET MANAGEMENT
MUNICIPAL ACTION PLAN
HEMSON C o n s u l t i n g L t d.
30 Saint Patrick Street, Suite 1000
Toronto, ON, M5T 3A3
September 2019
TABLE OF CONTENTS
MUNICIPAL ACTION PLAN EXECUTIVE SUMMARY ............................................................... 1
A.
KEY OBJECTIVES AND RECOMMENDATIONS ................................................................... 1
I
INTRODUCTION: POLICY AND PROCEDURE ............................................................... 3
A.
WHAT IS ASSET MANAGEMENT? ....................................................................................... 3
B.
ONTARIO'S ASSET MANAGEMENT REGULATION (O. REG. 588/17) ................................. 3
C.
LINKAGE TO OTHER DOCUMENTS AND STRATEGIES...................................................... 4
D.
ALL ASSETS TO BE INCLUDED IN AMP BY 2023 ................................................................ 5
E.
ASSET INVENTORY, DATA ALIGNMENT AND POLICY ...................................................... 5
F.
DATA ALIGNMENT AND POLICY ...................................................................................... 8
G.
DOCUMENTING MAJOR ASSUMPTIONS AND DEFINITIONS ........................................... 9
II
STATE OF LOCAL INFRASTRUCTURE ........................................................................... 10
A.
ASSET DESCRIPTIONS: WHAT INFORMATION SHOULD BE INCLUDED ........................ 10
B.
REPLACEMENT COSTS ...................................................................................................... 11
C.
CONDITION ASSESSMENTS ............................................................................................. 12
III
LEVELS OF SERVICE ....................................................................................................... 15
A.
IDENTIFYING CORPORATE GOALS ................................................................................. 15
B.
IDENTIFYING CUSTOMER LEVELS OF SERVICES AND HOW THEY CAN BE MEASURED 16
C.
DATA ACCESSIBILITY........................................................................................................ 17
D.
TARGET LEVELS OF SERVICE ............................................................................................ 17
E.
TRACKING LEVELS OF SERVICE ........................................................................................ 18
F.
SERVICE CAPACITY ........................................................................................................... 19
IV
ASSET MANAGEMENT STRATEGY ................................................................................ 20
A.
SET OF PLANNED ACTIONS TO PROVIDE DESIRED LEVEL OF SERVICE ......................... 20
B.
RISK ASSESSMENTS ASSOCIATED WITH PLAN AND STRATEGY ..................................... 21
C.
RISK MATRIX - ASSESSED BY ASSET ................................................................................. 22
D.
RISK MATRIX APPROACH TO PRIORITIZATION .............................................................. 24
E.
FUTURE DEMAND ............................................................................................................ 25
F.
COST REDUCTION STRATEGIES ...................................................................................... 25
V
FINANCING STRATEGY ................................................................................................ 26
A.
IDENTIFY AVAILABLE FUNDING TOOLS ......................................................................... 26
B.
LONG-TERM OUTLOOK .................................................................................................. 26
C.
IDENTIFY INFRASTRUCTURE GAP ................................................................................... 28
D.
IMPLEMENTING A STRATEGY TO TACKLE THE FUNDING SHORTFALL ......................... 28
E.
10-YEAR CAPITAL PROGRAM .......................................................................................... 30
VI
MAKING ASSET MANAGEMENT OPERATIONAL ......................................................... 32
A.
CREATING ASSET MANAGEMENT INTERNAL NETWORK ................................................ 32
B.
LINKAGE TO CAPITAL ...................................................................................................... 32
C.
RELATE MUNICIPAL PRACTICES TO THE AMP ................................................................. 32
APPENDIX A MUNICIPAL ACTION PLAN AND REGULATION SUMMARY
APPENDIX B SAMPLE LEVEL OF SERVICE TABLE
APPENDIX C SAMPLE PRIORITY CAPITAL PROJECT LIST APPENDIX
HEMSON
MUNICIPAL ACTION PLAN EXECUTIVE SUMMARY
The MFOA Amp It Up program provides expert asset management consulting services
to municipalities in Ontario with populations under 25,000. To date, over 90
municipalities across Ontario have participated. The program has now expanded to
include all municipalities with populations under 5,000, with the goal of including all
municipalities in the future. This project has been funded in co-operation with the
Province of Ontario.
The Municipal Action Plan (MAP), provides the Township with guidance on how to
update their existing Asset Management Plan and how to move forward with asset
management strategies to optimize the Township's asset management framework.
Furthermore, the MAP provides guidance on meeting the requirements of Ontario
Regulation 588/17 (O. Reg. 588/17). The MAP is based on Hemson's analysis,
consultation with Township staff and MFOA's Asset Management Self Assessment
Tool.
A.
KEY OBJECTIVES AND RECOMMENDATIONS
Document all major assumptions and definitions, such as detailing data
confidence and financial factors like inflation and interest rates.
Create age profile analyses for all asset categories, and make use of a 5-tier
condition assessment rating scale in order to provide more detail than the 3-tier
scale. Present the condition assessments in graphs and tables. The state of
infrastructure should be summarized in a table that gives a high level overview of
replacement costs, remaining useful lives and condition assessments for each asset
category.
Build upon the customer level of service goals already included in the existing
plan, and incorporate corporate goals as well. Levels of service should be
documented in a level of service registry, tracked over the long term, and updated
regularly.
Take a risk based approach to asset management. Incorporate a risk matrix
analysis by defining the risk of assets and the consequence of asset failure for all
assets. This ensures that corporate risk is minimized.
Incorporate risk ratings and future demand considerations into the asset
management strategy. Ensure the strategy covers each type of planned action for
every asset class.
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Detail the Township-wide infrastructure gap. Calculate the cumulative
infrastructure deficit over the long-term and present the data in a graph or table.
Develop a long-term financing strategy that considers both operating and capital
budgeting, the use of debt, and alternative revenue solutions. Ensure that the
financing strategy is realistic and achievable. Outline a 10-year capital program
that considers all asset lifecycle costs in each of the planned action categories.
Ensure that the long-term financing strategy accounts for costs associated to
achieving desired levels of service.
HEMSON
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I
INTRODUCTION: POLICY AND PROCEDURE
A.
WHAT IS ASSET MANAGEMENT?
In its most simplistic form, asset management is a process of managing assets in the
most cost effective way. The key objective is to maximize benefits and manage risks
while providing services to the public in the most sustainable way. It is important that
the Asset Management Plan (AMP) clearly define asset management and the benefits
of asset management to the Township. Some benefits of asset management include:
Township can make informed and traceable decisions;
Risks are managed over the long-term so the Township has the opportunity to co-
ordinate accordingly in advance of capital needs in the future;
Potential for higher resident satisfaction;
Documents a funding plan and strategy to manage infrastructure; and
Demonstrates compliance with regulation and legislation.
B.
ONTARIO'S ASSET MANAGEMENT REGULATION (O. REG. 588/17)
In 2015, the Province of Ontario established the Infrastructure for Jobs and Prosperity
Act. The purpose of this Act is to establish mechanisms to encourage principled,
evidence-based and strategic long-term infrastructure planning that supports job
creation and training opportunities, economic growth, protection of the environment,
and incorporate design excellence into infrastructure planning.
In December 2017, Ontario Regulation 588/17 Asset Management Planning for
Municipal Infrastructure (O. Reg. 588/17) was passed under the Infrastructure for Jobs
and Prosperity Act. The regulation aims to provide a more standardized framework to
facilitate asset management planning for Ontario municipalities. The regulation
requires municipalities to develop a Strategic Asset Management Policy to document
the relationship between the Asset Management Plan and existing policies and
practices as well as provide guidance for capital investment decisions.
The regulation also contains specific requirements on the analyses municipal asset
management plans should include, so that asset management plans are more consistent
HEMSON
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across the Province. Table 1 provides a summary of the key regulatory timelines as
outlined by O.Reg. 588/17 and where the Township stands in the timeline.
Table 1
O. Reg. 588/17 Timeline
Regulation
Timeline
Requirement
Progress
July 1, 2019
Municipalities shall prepare their first
strategic asset management policy.
Municipalities shall review, and if
necessary, update the policy every 5
years.
The Township approved its policy in
2019.
The next review is expected in 2024.
July 1, 2021
Every Township shall prepare an asset
management plan in respect of its
core municipal infrastructure assets.
The current levels of service must be
defined for all core assets.
The Township already has existing asset
management plans for transportation,
water and wastewater assets.
The Township is expecting to develop
the level of service measures for core
assets as required by the regulation (see
Appendix B).
July 1, 2023
Every Township shall prepare an asset
management plan in respect of all
other municipal infrastructure assets.
The current levels of service must be
defined for all other municipal assets
The Township is expecting to add all
other asset categories to the corporate
asset management plan.
The Township is expecting to develop
level of service measures for non-core
assets (see Appendix B).
July 1, 2024
Municipalities must establish
proposed levels of service for a
minimum of 10 years.
A lifecycle management and financial
strategy that covers a minimum of 10
years.
The Township is expecting to develop
the analysis needed to establish
proposed levels of service and a
financial plan to achieve the proposed
levels of service.
The proposed levels of service will be
established through consultation with
Council and the public in a subsequent
update of the AMP.
Note: A simplified summary of O. Reg. 588/17 is provided in Appendix A.
C.
LINKAGE TO OTHER DOCUMENTS AND STRATEGIES
It is important to identify how the AMP incorporates municipal responsibility and
strategies. O. Reg. 588/17 includes a requirement to develop a Strategic Asset
Management Policy (SAMP). The purpose of the SAMP is to document asset
management policies and procedures and how they relate to other existing municipal
processes. The SAMP is expected to be in place by July 1st, 2019 as per O. Reg. 588/17.
The policy has several key goals which are outlined in MFOA's Strategic Asset
Management Policy Toolkit:
HEMSON
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Affirming organizational commitment to asset management principles and
philosophies;
Aligning and integrating asset management into an organization's strategic
planning process, as well as other key plans and policies;
Guiding the asset management planning process, and embedding asset
management principles into ongoing capital, operations, and maintenance
activities;
Defining asset management responsibilities and accountabilities for Council,
leadership, management, and staff; and
Supporting the formation of a culture that values asset management and makes it
a priority.
D. ALL ASSETS TO BE INCLUDED IN AMP BY 2023
O. Reg. 588/17 requires municipal asset management plans to include all assets by July
1, 2023. It is important that the plan outlines which assets are included to ensure they
are consistent with other key municipal documents such as the Financial Information
Return and Gas Tax Funding Agreement. In the case of the Gas Tax Funding
Agreement, communities are able to use the Federal Gas Tax funds towards a wide
range of projects that are related to: public transit, wastewater infrastructure,
drinking water, solid waste management, community energy systems, local roads
and bridges, capacity building, highways, local and regional airports, short-line rail,
short-sea shipping, disaster mitigation, broadband and connectivity, brownfield
redevelopment, culture, tourism, sport and recreation. The Township has to include
all applicable assets in the asset management plan to satisfy future grant funding
applications.
E.
ASSET INVENTORY, DATA ALIGNMENT AND POLICY
Asset management is a data driven process. It is important to recognize that without
reliable data on municipal assets and their associated services, management of these
assets will be difficult. As part of the overall asset management strategy, there should
HEMSON
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be a complementary data management strategy since the foundation of the AMP is a
robust asset inventory.
The data management strategy relates to the methods for the acquisition, storage and
analysis of asset data. Knowledge and decision making on asset management is a
function of the reliability of the data. A data management strategy can be a standalone
policy or part of the SAMP and should include guidelines on:
Maintaining a central asset inventory;
Attributes required in the asset register for each asset category. For example, when
a new asset is entered into the database a replacement cost, year of service and
useful life must be entered;
Frequency of asset inventory updates should be established;
Person(s) responsible for updates and management of the data, a data "champion";
and
The roles of other departments in collecting and managing data.
It is important that a central asset inventory be maintained and should contain all
assets the Township owns and manages. The asset inventory can help facilitate
updating the asset management plan, working towards meeting the gas tax funding
requirements and analysis of the municipal funding gap. At a minimum, an asset
inventory should contain the pieces of information outlined in Table 2.
Table 2
Information Needed in the Asset Inventory
Parameter
Description
Asset Unique ID
A unique ID number helps maintain the asset data in an organized way.
Helps identify assets and asset components quickly within the asset inventory.
Important wherever a large number of unique assets are captured in the inventory.
Easier to consolidate assets that may be kept in separate inventories.
Name and Description
A description helps visualize and identify assets in more detail beyond a unique ID.
For example:
o For vehicles, the model or VIN number can be used.
o For buildings, the name or address of the building can be used.
o For roads, the name of the road and the segment can be used.
Useful Life (In Years)
The engineered useful life should be included in the inventory and should be consistent
with tangible capital asset policies (if available).
Replacement Cost
The replacement cost of assets should be included in current year dollars and should be
updated on a regular basis.
HEMSON
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Table 2
Information Needed in the Asset Inventory
Parameter
Description
Detailed Asset Attributes
Other detailed attributes are important to include in the asset inventory as they help
inform other data in the inventory. Some examples include:
o Diameter, material type and length in metres for pipes.
o Road type such as gravel/HCB/ICB/LCB and length of road segment in kilometres.
o For assets that can be broken down into components, such as buildings, include the
components (exp. Structural, HVAC, plumbing, electrical, etc.).
o Wherever engineered condition assessments are available, they should be included
in the asset inventory.
In addition to these data attributes, each asset should be broken down into components
wherever possible. This ensures that asset condition is tracked for components that
may require more frequent repairs or replacements. For example, a building can be
broken down into its superstructure, foundation, roof and other components such as
HVAC and electrical systems as shown in Figure 1. The repair and maintenance
requirements of all these components vary widely and cost efficiencies are possible by
tracking these repairs separately.
Figure 1
Assets by Component - Example for Buildings
A typical strategy to break down complex assets would involve separating assets that
have different useful lives. In the example below, the structure has a useful life of 40
years, while the HVAC system has a useful life of 25 years. If the building was not
broken down we would assume the useful life of the building, and all of its components,
was 40 years. This results in not being able to account for the HVAC system or other
individual components properly when calculating the required provisions for
replacement of the building and its components. The Township's current AMP does
not break down complex assets into components; any subsequent updates should strive
to do so. Table 3 below provides a breakdown of a general facility by asset type.
HEMSON
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Table 3
Sample Inventory - Building by Asset Component
Asset Name
Acquisition
Year
Useful Life
Replacement Cost
Example Facility
2009
Structure & Site
2009
40
$535,000
Shingle Roofing
2009
30
$66,700
HVAC System
2009
25
$149,000
Plumbing
2009
25
$40,700
Electrical
2009
25
$147,000
Tile Flooring
2009
20
$63,700
Total
$1,002,100
The asset inventory is an integral part of the data management strategy and should
also play a complementary role informing other databases the Township maintains. It
is advantageous that the asset register be spatially mapped using a GIS software
solution. The unique asset ID should be used to create a connection between the asset
register and any spatially mapped assets for database consistency.
F.
DATA ALIGNMENT AND POLICY
The frequency of updates of the asset inventory is extremely important. As assets age
and more are added over time, the reliability of the data depends on how frequently
the asset inventory is updated. The asset inventory should be updated when there are
new asset purchases, upgrades and replacements, as well as asset condition ratings and
information on useful life. These types of updates may be required several times per
year; however, the reliability of the data will become apparent as updates occur.
To facilitate updating the asset inventory, it is recommended that a data "champion"
be designated. The data champion is intended to be the person who maintains and
regulates the quality of the asset inventory. Identifying a champion may be challenging
however there are some characteristics that may help in identifying one, including:
Knowledgeable about asset management and the Township's current practices;
Well-connected within the Township;
Interested in contributing to the process; and
Strong communication skills.
HEMSON
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Tips to identify a data champion include:
First opportunity to identify a data champion may occur during initial AMP
concept meetings - staff members that relate most strongly to the
objectives/process may emerge at this time.
Can also assign "leadership groups" to distribute responsibilities - staff members
or small groups of staff may be assigned specific responsibilities (e.g. project
management, data collection, data integrity, etc.).
A data champion does not and should not be alone in the data management process.
It is important that all other departments contribute to the process to ensure that
reliable data is available. For example, as new assets are acquired for recreation services,
it is required that recreation staff provide the information to the data champion to
update the asset inventory. This ensures that the inventory is up to date and that there
is no data loss.
To ensure buy-in and co-operation from all departments, department representatives
and the data champion should meet frequently to identify and address any gaps or
challenges that may arise throughout the process. This creates an internal network
which facilitates communication between departments. As challenges are addressed,
the inventory may be adapted to incorporate changes that will facilitate buy-in from
all departments. Communication between municipal departments is key to the success
of the data management strategy.
G. DOCUMENTING MAJOR ASSUMPTIONS AND DEFINITIONS
A good plan should have major assumptions and definitions documented that are clear
and transparent as to the process and use of information. The Township's current plan
documents the method of condition assessment for some asset classes. Subsequent plan
updates should also document major assumption and limitations of the plan. Some
other examples of documentation include:
an overview of how replacement costs were calculated for each type of asset.
a data confidence section that outlines the reliability of the information used to
inform the plan.
a definitions section - outline all terminology used throughout the plan.
key financial drivers: inflation and investment rates for example.
HEMSON
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II STATE OF LOCAL INFRASTRUCTURE
A.
ASSET DESCRIPTIONS: WHAT INFORMATION SHOULD BE INCLUDED
The State of Local Infrastructure section of the plan is about documenting what the
Township owns; both in a quantitative and qualitative aspect. Table 4 provides a
sample of how the Township can summarize the inventory in the AMP. The table is a
good summary of the number of assets and their replacement value. The summary goes
further and indicates the number of components recorded for each building, the
method used to determine replacement costs and the useful life assumptions.
Table 4
Sample Summary of Inventory - Buildings
Asset Type
Components
Quantity
Replacement
Cost 2019
Replacement
Cost Method
Useful Life
(Years)
Buildings
Roof
18
$1,700,000
Recent Costing
10/15/30/40
Mechanical &
Electrical
18
$426,000
Recent Costing
15/25
Windows & Doors
18
$453,000
Recent Costing
20
Exterior Cladding
18
$530,000
Recent Costing
20/60
Structure
31
$55,591,000
Recent Costing
50/100
Total
103
$58,700,000
An age profile analysis which details asset age to useful life across all different asset
classes is a helpful way to illustrate the remaining useful life of municipal assets by
category or holistically. Figure 2 provides an example of an age profile analysis which
can be included as part of the plan or communicated to Council. The Township's
existing AMP does not contain age profile analysis for any asset classes. Note that the
age profile analysis illustrates assets either by their age or their remaining useful life
based on standard assumed engineered useful lives. It does not necessarily reflect the
condition of assets, as many assets are used well beyond their engineered useful lives
and may still be in good working condition. Figure 2 shows an example for buildings
categorized by their remaining useful life (expressed in dollars of replacement value).
HEMSON
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B.
REPLACEMENT COSTS
A comprehensive asset management plan's key outputs and capital replacement
requirements can only be as good as the inputs into the plan. In order for the Township
to properly plan for future capital requirements, having reliable replacement costs
identified is a key to success. There can be several methodologies to calculate the
replacement cost of infrastructure assets, they include:
Recent tenders in the Township and surrounding areas - cost to construct certain
buildings, the acquisition cost of a new fire truck, vehicle or heavy equipment,
cost to rehabilitate/replace roads and bridges.
Local price indices, if available. Similar capital projects in neighbouring
municipalities can also be used as a benchmark.
Insurance values, although often low, are a good benchmark or reasonability test.
Historical cost inflated to current dollars. This approach is best used for assets
recently acquired or for low value assets which represent a small share of the
Township's total replacement value. The Township should look to move away
from this approach and generate replacement cost based on the other two more
credible methodologies.
The Township's current AMP uses replacement costs sourced from equipment
suppliers and accepted industry references. The Township should develop and
$-
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
Overdue
0-9
10-19
20-29
30-39
40-49
50+
Replacement Cost (millions $)
Remaining Useful Life (Years)
Figure 2
Buildings by Remaining Useful Life in Years ($58.7 million)
HEMSON
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implement a policy to update and refine costs. This policy can be included as part of
the SAMP or a standalone document. The policy should address the following:
When the Township issues a new tender for the construction and/or acquisition
of an asset - look at revising costs.
Close contact with surrounding municipalities on upcoming work - policy to
interact every six months.
What costs should replacement costs include? For example, the replacement cost
of a road should include costs such as: excavation/removal, materials,
engineering/design, construction and contingency.
C.
CONDITION ASSESSMENTS
The most effective way to assess the condition of assets and identify repair and
replacement needs is through condition assessments. Typically, condition assessments
are performed on higher value assets or assets that have regulatory or safety regulations
such as roads, buildings, bridges or fire equipment and vehicles. The Township's
current plan uses engineered condition assessments for bridges and roads, and relies on
staff judgement for building conditions. Moving forward, the Township should perform
condition assessments based on recognized and generally accepted good engineering
practices where appropriate.
To ensure repeatable and consistent approach of condition ratings, a general 5-tier
condition rating system which is backed by other major organizations and associations
can be used. The Building Together Guide specifies assets to be conditioned on a 3-
tier approach at minimum, as "Good", "Fair" or "Poor". The Township's existing AMP
uses a 3-tier approach for roads (based on when improvements are needed) and bridges,
and a five-tier approach for buildings. The 5-tier rating approach adds additional
details to the 3-tier categories. The ideal method to identify asset conditions are:
1) Condition rating systems based on engineered metrics and standards: Pavement
Quality Index, Facility Condition Index, Bridge Condition Index, Ride Comfort
Rating and CCTV inspections, etc. These metrics can then be translated into a
5-tier rating system.
2) Estimates based on age and the remaining useful life of the asset.
3) Estimate based on expert staff opinion. This approach is important where there is
low confidence that age and useful life properly represents a particular asset.
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O. Reg. 588/17 requires that the asset management plan documents and describes the
methods used for condition assessments for each asset category wherever it is
applicable.
Table 5 provides some general parameters using the 5-tier rating system. In this
example, if engineered conditions for buildings were performed based on a 100-point
scale, parameters can be defined to consolidate those conditions into the 5-tier scale.
For buildings where condition assessments are unavailable, the remaining useful life
can be used as a proxy. It should be noted that the parameters of what constitutes asset
condition may change from place to place.
Table 5
Example of Condition Assessment Parameters
Rating
Condition
Definition
(Township Specific)
Definition
(Based on Building
Condition out of 100)
Definition
(Based on Remaining
Useful Life)
1
Very Good
Well maintained, good condition, new or
recently rehabilitated.
Greater than 80
Greater than 80% of
Asset Useful Life
remaining.
2
Good
Good condition, few elements exhibit
existing deficiencies.
70 - 80
60% - 80% of Asset
Useful Life remaining.
3
Fair
Some elements exhibit significant
deficiencies. Asset requires attention.
60 - 70
40% - 60% of Asset
Useful Life remaining.
4
Poor
A large portion of the system exhibits
significant deficiencies. Asset mostly
below standard and approaching end of
service life.
50 - 60
20% - 40% of Asset
Useful Life remaining.
5
Very Poor
Widespread signs of deterioration, some
assets may be unusable. Service is
affected.
Less than 50
Less than 20% of Asset
Useful Life remaining.
Figure 3 provides an example of a summary of condition ratings for buildings expressed
in dollars of replacement value. The example shows about 37% of assets are in poor or
very poor condition and may require replacement or rehabilitation soon, while 25%
are in good or very good condition. Assets in fair condition require special attention,
as these assets may transition into the poor or very poor categories in the short-term.
These assets make up about 38% of the building assets.
HEMSON
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Table 6 includes a sample summary of assets that include replacement cost, weighted
average remaining useful life and weighted average condition. The Township can
utilize a summary similar to the one below which can be used to provide reports to
Council and the public. Table 6 also summarizes the overall condition of assets and is
a good summary to get a holistic picture of the current condition of the Township's
assets. In the example below the overall condition is considered as fair. This rating is
driven by the high value assets of roads, buildings and bridges.
Table 6
Sample Summary State of Local Infrastructure
Asset Type
Replacement
Cost (2019)
Useful Life
(Years)
Remaining
Useful Life
(Weighted
Average)
Condition
(Weighted
Average)
Buildings
$58,705,000
10/15/20/25/30
/40/50/60/100
43
Fair
2.9
Vehicles & Machinery
$8,541,000
10/15
2
Fair
2.5
Land Improvements
$6,834,000
10/15/20/30
1
Poor
2.4
Stormwater Infrastructure
$3,560,000
75
57
Good
4.3
Equipment & Furnishings
$2,301,000
5/7/8/10/15/30
Overdue
Fair
2.9
Sidewalks & Pathways
$449,000
25/30
16
Fair
3.5
Bridges & Culverts
$42,852,000
60
9
Fair
3.5
Roads
$212,020,000
40
22
Fair
3.0
Total
$335,262,000
23
Fair
3.0
11%
14%
38%
21%
16%
Figure 3
Buildings by Condition Rating ($58.7 million)
Very Good ($6.4 M)
Good ($8.3 M)
Fair ($22.2 M)
Poor ($12.3 M)
Very Poor ($9.5 M)
HEMSON
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III LEVELS OF SERVICE
A.
IDENTIFYING CORPORATE GOALS
The Township's existing AMP contains an identification of community and
operational levels of service for each asset class, but does not identify high-level
corporate goals. Corporate goals are general and provide a high level expectation as to
what should be achieved by the service. For example, corporate service goals may focus
on safety, reliability and accessibility. Some corporate goals may be directly defined by
legislation, such as local water services, which are governed by strict safety and
reliability regulations. Other corporate goals may be less restrictive such as those for
recreation which depend on the types of recreation programs offered and demand for
those programs.
It is important that corporate goals for each service category are well defined, easy to
understand and realistic. Typically, corporate goals can be identified through other
existing documents such as strategic plans, official plans or other policies. Linking
corporate goals as part of the asset management process ensures that the Township is
committed to meeting those goals.
Tracking the performance of corporate goals over time is a cycle, this process is
summarized in Figure 4 below. It is important to recognize that level of service tracking
and management is a fluid process and should be refined over time as lessons are
learned and the Township changes. The following sections provide some examples of
services and their associated corporate service goals.
Figure 4
Identifying and Measuring Performance of Corporate Goals
HEMSON
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B.
IDENTIFYING CUSTOMER LEVELS OF SERVICES AND HOW THEY CAN BE
MEASURED
For each corporate goal, there should also be key customer level of service descriptions
which define what the municipal service performance will be measured on and be
specific to the type of service. For example, road related corporate goals may be
measured on safety while fire related corporate goals may focus on quick response times
to emergencies. The Township's current AMP contains robust community levels of
service for each asset class; for each level of service there is an objective, a performance
measure, and a benchmark level of service target. The Township should continue this
practice.
To measure the performance of each service category and whether the associated
corporate goals are being met, we must establish performance indicators or level of
service measures. Level of service measures vary widely across services and
municipalities. Where information to establish level of service measures is available
for one service, it may be difficult to obtain for another. However, there are many
sources of information that are readily available and these are discussed in the
following section. Table 7 shows examples of corporate goals, levels of service and their
associated level of service measures.
Table 7
Example Levels of Service and Associated Level of Service Performance Indicator
Service
Area
Corporate Goal
Level of Service
Level of Service
Performance Indicator
Roads
To maintain safe roadways and
roadsides enabling safe and
efficient travel in a cost
effective way.
Maintain road infrastructure in
state of good repair.
Number of paved land
kilometres where the condition
is rated as good to very good.
Fire
Protect municipal health and
safety efforts through fire
preventions and protection
services.
Fire services that meet fire
master plan priorities.
Number of locations that do not
meet fire master plan strategic
priorities.
Outdoor
Recreation
Provide safe, clean parks and
open space systems through
proactive property management
in a cost effective way.
Provide sufficient park, trails
and open spaces for residents.
Square metres of outdoor
recreation facility space per
1,000 persons (municipally
owned).
Indoor
Recreation
Provide accessible and
enjoyable indoor community
space to all residents.
Infrastructure should comply
with the Accessibility for
Ontarians with Disabilities Act.
Number of facilities in the
Township that do not comply
with the Act.
O. Reg. 588/17 requires municipalities to determine their current levels of service for
core assets by 2021. Appendix B contains the measures required by the regulation. For
non-core assets, the regulation requires municipalities to determine current level of
HEMSON
16
service measures defined by the Township by 2023, examples of which are also
provided in Appendix B.
C.
DATA ACCESSIBILITY
Most municipalities track levels of service and the performance of assets, but there is
often a disconnect in documenting progress over time. Data limitations, data
understanding and limited resources are common challenges faced by municipalities in
documenting their levels of service. Fortunately, there is a wealth of resources that can
be used to obtain level of service data and track it over time. Municipalities can look
to some of the following sources to get input:
Municipal FIR statements;
Engineering documents and master plans; and
Industry standards, common practices, regulatory requirements and staff.
D. TARGET LEVELS OF SERVICE
Target levels of service are the main benchmark to measure whether a Township has
met a particular corporate goal. Target levels of service are mainly a function of the
demand for services from the public. By July 1 2024, O. Reg. 588/17 requires
municipalities to establish desired or target levels of service and outline the costs and
actions needed to achieve those targets. The Township already has target levels of
service defined for each asset class.
Public perception and opinion can be established in several ways including through
common municipal practices such as:
Local public surveys;
Local committees and stakeholder consultation; and
Council meetings.
Local perception of current services and actual public demand for services are
complementary to Council engagement. It is important that Council understands what
realistic and reasonable targets are for local services. Establishment of any service level
target should be done through consultation with Council.
HEMSON
17
Finally, level of service targets should be well defined and realistic. Some level of
service targets will be mandated through legislation such as those for drinking water
services. Targets for engineering services such as roads, for example, can be defined by
using industry standards and municipal benchmarks (such as those provided in the
FIR). Target levels of service may not be achievable immediately and it is
advantageous for short and long term goals to be distinguished.
E.
TRACKING LEVELS OF SERVICE
Levels of service should be tracked over time. Level of service performance measures
should be tracked and illustrated over a 5-year time frame. This helps gauge whether
corporate goals and desired targets have been met. For example, if there has been a
corporate decision to increase funding for road repairs and rehabilitation, the % of
roads in good to very good condition should be shown to increase from year to year.
To complement the data management process, a level of service registry should be
established. This registry should include historical levels of service for all services the
Township provides for at least a 5-year time frame. The registry can be used to
complement asset management discussions and budget deliberations with Council and
the public. It also has the advantage of being a central database that staff can reference
when needed. A sample template that can be used to track level of service measures
over time is provided in Table 8. Appendix B also provides additional level of service
measures the Township may consider as well as an example of a current level of service
tracker the Township can use for reporting.
Table 8
Sample Level of Service Tracker
Indicator
2015
2016
2017
2018
2019
5-Year
Average
Qualitative
Measure
Target
Percentage of roads at or
above "Good" or "Very
Good" condition
42%
43%
43%
43%
56%
45%
xx
Unaccounted water
(water loss after distribution)
31%
29%
29%
30%
30%
30%
---
xx
Average Condition of Assets
(Based on 5-tier condition)
Fair
Fair
Fair
Good
Good
Fair
xx
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F.
SERVICE CAPACITY
Well-documented set of service levels are used to drive asset management activities as
they relate to the capacity of infrastructure. One of the most common initiatives is to
encourage growth and development in already built-up areas as a means of utilizing
existing capacity within infrastructure as opposed to creating additional capacity in
various neighbourhoods. The Township should promote intensification and infill
where sufficient capacity is available or can be made available, to support the resulting
growth.
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19
IV ASSET MANAGEMENT STRATEGY
A.
SET OF PLANNED ACTIONS TO PROVIDE DESIRED LEVEL OF SERVICE
The Township should strive to document asset management strategies it currently uses
and those it hopes to adopt in the future. Asset management strategies are simple
defined as the set of planned actions taken to maintain assets in state of good repair.
These planned actions can be segmented into 6 categories: non-infrastructure
solutions, maintenance, renewal/rehabilitation, replacement, disposal and expansion
activities. The Township's current AMP includes all planned actions, ranging from
asset monitoring, planned and reactive maintenance, and asset disposal. These
sections are relatively high level, and could provide more detail of planned actions for
each asset class. Table 9 provides a description of each category and some examples of
the planned actions that can be documented in the AMP.
Table 9
Planned Actions
Category
Description
Examples
Non-
infrastructure
Solutions
Actions or policies that can lower costs
or extend asset life (e.g., better
integrated infrastructure planning and
land use planning, insurance, demand
management, process optimization,
managed failures, etc.).
Work is not carried out on roads which are planned
to have either sewer work in the next 5 years or are
part of a larger project in the 5-year Capital Program.
Public consultation and communication to conserve
water.
Service level adjustments.
Constructing a new facility or major rehabilitation
usually involves a complete business plan and
involvement of key staff, council and sometimes
stakeholders.
Maintenance
Activities
Servicing assets on a regular basis in
order to fully realize the original
service potential. Maintenance will
not extend the life of an asset or add to
its value. Not performing regular
maintenance may reduce an asset's
useful life.
Bridge washing program.
Perform regular bridge inspections as mandated by
the Province.
Maintenance activity/programs spearheaded by
public through general use/observation.
Street sweeping occurs in spring after the snow melts.
Renewal/
Rehabilitation
Activities
Mostly associated to significant repairs
designed to extend the useful life of an
asset. These types of activities are
typically done at key points in the
lifecycle of an asset to ensure the asset
reaches it designed useful life.
Sidewalk spot repair program.
Catch basin inspection and repair annually.
Gravel road resurfacing to have 100 + mm of new
gravel applied on an as needed basis.
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20
Table 9
Planned Actions
Category
Description
Examples
Replacement
Activities
Activities that are expected to occur
once an asset has reached the end of
its
useful
life
and
renewal/
rehabilitation is no longer an option.
Asset
replacement
is
common
for
heavily
deteriorated linear infrastructure.
Facilities components are replaced based on
inspection reports.
Disposal
Activities
The
activities
associated
with
disposing of an asset once it has
reached the end of its useful life, or is
otherwise no longer needed. Typically
disposal costs are accounted under
replacement activities. Some assets,
such as landfills, may have perpetual
maintenance costs.
Asset disposal is carried out to avoid cost recovery.
Sell of underutilized facilities.
Land is reused or sold.
Expansion
Activities
Planned activities required to extend
or expand municipal services to
accommodate the demands of growth.
Identify
needs
through
traffic
counts
and
environmental assessment reports.
Assumption of capital assets through development
agreements.
Service improvements made where possible (traffic
calming equipment, etc.).
B.
RISK ASSESSMENTS ASSOCIATED WITH PLAN AND STRATEGY
A good asset management plan should recognize the risk associated with the
Township's ability to deliver the plan and any actions which could occur outside the
planned scope. An AMP should look to identify possible risks and the mitigating
actions to ensure that the objectives of the plan are met. The Township's AMP only
identifies one risk, associated with one project, and should employ a fuller risk
assessment framework in the next plan. Table 10 illustrates an example of risks and
mitigating actions that can be documented in the asset management plan.
Table 10
Risks and Mitigating Impacts of the AMP
Identified Risk
Potential Impact
Mitigating Action
Failed
Infrastructure
Delivery of service
Asset and equipment damage
Repair and rehabilitate as
necessary
Increase investment
Non-infrastructure solutions
Inadequate
Funding
Delivery of service
Increased risk of failure
Shorten asset life
Defer funding to future generations
Reductions of service
Find additional revenue sources
Regulatory
Requirements
Non-compliance
Mandatory investments
Increased costs
Find additional revenue sources
Lobby actions
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Table 10
Risks and Mitigating Impacts of the AMP
Identified Risk
Potential Impact
Mitigating Action
Plan Not Followed
Shorten asset life
Inefficient investments
Prioritization process failure
Failure to deliver service
Monitor and review
Create asset management network
Implement processes
C.
RISK MATRIX - ASSESSED BY ASSET
It is important to assess the risk associated with each asset and the likelihood of asset
failure. Asset failure can occur as the asset reaches its limits and can jeopardize
public/environmental safety. In addition, certain assets have a greater consequence of
failure than others. A risk matrix can help prioritize which assets should be
repaired/replaced, even those which the Township has already identified to be in Very
Poor or Poor condition. The evaluation rating is then linked to the condition
assessment parameter discussed in Section II. The formula to determine asset risk is as
follows:
(Probability of Failure) X (Consequence of Failure) = (Risk Rating)
Each of the components of the Risk Rating methodology is defined as follows:
Probability of Failure: is directly linked to the condition of an asset. An asset in
Very Poor condition is considered to be almost certain to fail in the short term.
This type of asset may be near the end of its useful life or has deteriorated
significantly. Conversely it would be considered rare for an asset to fail in the
short term if it is considered to be in Very Good condition. Table 11 below
outlines the definition of probability of failure used for the Township's assets.
Table 11
Probability of Failure
Condition
Probability of
Failure
Description
Very Good
1
Rare
Good
2
Unlikely
Fair
3
Possible
Poor
4
Likely
Very Poor
5
Almost Certain
Note: Definitions are based on the MFOA Asset Management Framework.
Consequence of Failure: refers to the impact on the Township if an asset were to
fail. The consequence of failure has been determined separately for each asset
category, as the impact to the Township differs greatly by asset type. For example,
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if a fire emergency vehicle was not available for service, the potential impact could
be severe compared to a vehicle used for administrative purposes. Table 12
outlines a definition of consequence of failure.
Table 12
Consequence of Failure
Replacement
Cost
Consequence of
Failure
Description
Very High
1
Insignificant
High
2
Minor
Moderate
3
Moderate
Low
4
Major
Very Low
5
Significant
Note: Definitions are based on the MFOA Asset Management Framework.
Risk Rating: categorizes assets based on the level of risk to the Township. The
risk rating provides a guide to prioritize assets by determining which assets require
attention first and which capital works can be deferred. Higher risk assets should
be prioritized for attention in the short term by determining which of the lifecycle
actions is required to be performed on the asset, Table 13 below provides a
summary of the risk matrix.
Table 13
Risk Matrix
Evaluation
Rating
Consequence of Failure
Color Code
1
2
3
4
5
Probability of
Failure
1
1
2
3
4
5
Very Low Risk
2
2
4
6
8
10
Low Risk
3
3
6
9
12
15
Moderate Risk
4
4
8
12
16
20
High Risk
5
5
10
15
20
25
Very High Risk
Table 14 presents an example of the findings of a risk analysis. Assets in the high risk
category are expected to be prioritized sooner relative to assets in the low risk category.
The timing or replacement or rehabilitation work is therefore a function of the risk
assessment. It is important to note, that the Township will need to continue regular
maintenance activities and capital works moving forward to maintain current levels of
service - this ensures assets do not further deteriorate posing greater risk to the
Township.
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Table 14
Example Summary of Risk Assessment
Asset Category
Replacement Cost
(2019)
Risk
(Weighted Average)
Buildings
$58,705,000
Moderate
9
Vehicles & Machinery
$8,541,000
High
11
Land Improvements
$6,834,000
Low
7
Stormwater Infrastructure
$3,560,000
Low
4
Equipment & Furnishings
$2,301,000
Low
7
Sidewalks & Pathways
$449,000
High
10
Bridges & Culverts
$42,852,000
Moderate
8
Roads
$212,020,000
Moderate
8
Total
$335,262,000
Moderate
9
D. RISK MATRIX APPROACH TO PRIORITIZATION
The purpose of the risk matrix is to develop a more standard method to determine
which assets should be prioritized for replacement or repair/rehabilitation. Assets with
a higher risk rating should be prioritized as those assets may be in poorer condition or
have a higher consequence of failure (or both). The simplest approach is to prioritize
assets simply based on the risk rating from 1 to 25. However, this approach can be
taken one step further to account for the approximate timing of replacement or
repair/rehabilitation of assets using the risk matrix. Table 15 provides parameters that
can be used to develop a revised replacement schedule based on risk rating.
Example - An asset was acquired in 2005 and has a 10 year useful life. Therefore, the
asset is overdue for replacement based on the useful life alone (assuming current year
is 2019). However the asset has been assigned a risk rating of 8. Based on Table 13 and
15, 30% of the useful life is 3 years. Therefore a revised timeline for replacement is
calculated 3 years from now (2022).
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24
Table 15
Percentage Revised Remaining Useful Life Based on Risk Matrix
Evaluation
Rating
Consequence of failure
Color Code
1
2
3
4
5
Probability of
Failure
1
100%
80%
60%
40%
20%
Very Low Risk
2
80%
65%
50%
30%
16%
Low Risk
3
60%
50%
35%
25%
10%
Moderate Risk
4
40%
30%
25%
15%
2%
High Risk
5
20%
16%
10%
2%
0%
Very High Risk
Note: Municipalities will need to calibrate the parameters in the matrix over time to
be in line with expectations of staff and Council. The matrix is a tool to help inform
the capital budget process and the example above is one method that can be used.
E.
FUTURE DEMAND
Future demand and the impact on the delivery of services in the community is an
important component of the AMP. This component assesses the type of growth which
is anticipated in the community. Even if growth is limited this does not directly
translate into a reduction or sustained capital investment. The Township has to be
responsive to new capital investments and operating and maintenance required to
address changing demographics and demands. The assets requiring attention to service
demands will be different based on how the change takes places (existing area vs.
greenfield areas).
F.
COST REDUCTION STRATEGIES
The Guide for Municipal Asset Management Plans (Guide) states that 'to ensure the
most efficient allocation of resources, best practice is for a number of delivery
mechanisms to be considered -- such as working with other municipalities to pool
projects and resources, or considering an AFP model.' The design-build-finance-
maintain AFP (Alternate Financing and Procurement) model takes a lifecycle
perspective and builds effective asset management directly into the contract. The
Guide also states that municipalities should have procurement by-laws in place to serve
as the basis for considering various delivery mechanisms. The Township's AMP does
reference the Township's procurement by-law in the asset management strategy.
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25
V FINANCING STRATEGY
A.
IDENTIFY AVAILABLE FUNDING TOOLS
A broad range of funding tools are available to the Township in order to fund
infrastructure repair and replacement activities, although property taxes and utility
rates are the most common own source revenues. The Township's existing AMP does
not examine available funding tools. It should discuss the extent to which each funding
tool is used, which helps to demonstrate that the Township is exercising all available
funding options.
Table 16
Funding Tools Available
Grants - Federal and Provincial
Public Private partnerships
Development Charges
Local Improvement Charges
Utility Rates
Developer Contributions
Property Taxes
Debt (as a financing tool)
User Fees
Reserve and Reserve Funds
B.
LONG-TERM OUTLOOK
The Township's long-term budgetary outlook should be observed from two
perspectives:
a.
Operating Costs - The Township should look at operating costs holistically, as a
significant component of costs is related to maintaining infrastructure in a state
of good repair. This is also true as often the general maintenance and repair costs
are undertaken by municipal staff, or contracted services, costs that are captured
in the operating budget. These maintenance expenses ensure that the assets
continue to provide service at existing levels.
b.
Capital Requirements - Future capital requirements should be calculated to
reflect in-year requirements and the replacement of assets outside of the AMP
planning period. It is important to show the capital requirements delineated by
maintenance, growth and non-infrastructure expenses.
The sections that follow illustrate a methodology to develop and long-term financing
strategy specific to the Township. The methodology ensures that different scenarios
can be tested so that a strategy that is realistic and achievable can be developed for the
Township.
HEMSON
26
Table 17
Budget Operating Expenditures
Identify the operating costs
associated with
maintaining assets based
on historical expenditures.
How are operating and
maintenance costs going to
change in the next few
years?
Are there increased costs
associated with enhanced
repair programs?
Future operating needs
should be considered
within the AMP.
Table 18
Capital Replacement Schedule
Identifying capital costs and
timing, as well as
replacement or major
rehabilitation of assets, is
important and can be done
through a replacement
schedule.
This simply looks at capital
replacement costs and
timing of existing assets.
Identifies annual in-year
capital requirements by
asset category and areas of
pressure (for example
vehicle replacements in
2025 and building
replacement in 2037).
Replacement schedule
should be based on
condition assessment, risk
matrix and prioritization.
$-
$0.5
$1.0
$1.5
$2.0
2017 Actual
2018 Actual
2019 Budget
Asset Maintenance Related Expenditures (Millions $)
Roads
Buildings
Vehicles & Equipment
Land Improvements
Bridges & Culverts
$-
$0.5
$1.0
$1.5
$2.0
$2.5
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
Capital Replacement Schedule (Millions $)
Buildings
Vehicles
Equipment
Land Improvements
Computers & Software
Other Engineering Assets
HEMSON
27
C.
IDENTIFY INFRASTRUCTURE GAP
It is important to recognize what current capital expenditures are versus calculated
requirements. The required annual capital contribution reflects the required capital
contributions if the replacement schedule shown in Table 18 was followed. Table 19
shows a "smoothed" capital expenditure schedule. The difference between current
capital expenditures and the calculated requirement is considered to be the funding
shortfall (i.e. infrastructure gap/deficit). The Township's existing AMP does not
quantify the existing infrastructure gap or present strategies to close the funding gap.
Table 19
Calculated Annual Capital Requirement
Represents a "smoothed"
approach to capital
expenditures.
The difference between
current expenditures and
required capital contributions
is the funding shortfall.
Analysis takes into account
how much is required to fund
in-year capital requirements
plus savings for long-term
replacements.
Roads and buildings largely
dominate the capital
requirements.
D. IMPLEMENTING A STRATEGY TO TACKLE THE FUNDING SHORTFALL
The Township must identify how to manage the funding shortfall. The financing
strategy determines how much your capital spending needs to increase in order to close
the infrastructure gap. It is important to recognize that once the in-year gap is closed,
the cumulative infrastructure deficit will need to be addressed. The relationship
between increased capital contribution requirements and the impact on the tax levy
will need to be calculated. A good plan will take a long-term perspective and outline
the key revenue sources which will be used to sustain infrastructure investments. The
Township's existing AMP does not have a detailed table analyzing the financing
strategy to achieve sustainability. Table 20 and Figure 8 provide an example of how to
$-
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
Calculated Annual Capital Requirement (Millions $)
Roads
Buildings
Vehicles
Equipment
Land Improvements
Computers & Software
Other Engineering Assets
Infrastructure
Deficit
Annual
Funding Gap
HEMSON
28
look at achieving financial sustainability over the long-term. Table 20 provides an
explanation of the methodology.
Table 20
Example of a Capital Financing Strategy
Legend
A
B
C
D
E
F
G
Year
Projected
Annual Capital
Requirement (A)
Annual Capital
Contributions
(Tax Supported)
% Annual
Increase in
Capital
Contributions
Other Sources of
Funding (Gas
Tax)
Total Capital
Funding = (B+D)
Annual Funding
Gap = (A-E)
Cumulative
Infrastructure
Deficit = (sum of
F)
2019
3,200,000
$
923,612
$
4.2%
$ 357,000
1,280,612
$
1,919,388
$
1,919,388
$
2020
3,000,000
$
962,404
$
4.2%
$ 357,000
1,319,404
$
1,680,596
$
3,599,985
$
2021
2,400,000
$
1,002,825
$
4.2%
$ 357,000
1,359,825
$
1,040,175
$
4,640,160
$
2022
2,300,000
$
1,044,943
$
4.2%
$ 357,000
1,401,943
$
898,057
$
5,538,217
$
2023
2,300,000
$
1,088,831
$
4.2%
$ 357,000
1,445,831
$
854,169
$
6,392,386
$
2024
2,300,000
$
1,134,562
$
4.2%
$ 357,000
1,491,562
$
808,438
$
7,200,825
$
2025
2,200,000
$
1,182,213
$
4.2%
$ 357,000
1,539,213
$
660,787
$
7,861,611
$
2026
2,000,000
$
1,231,866
$
4.2%
$ 357,000
1,588,866
$
411,134
$
8,272,745
$
2027
2,000,000
$
1,283,605
$
4.2%
$ 357,000
1,640,605
$
359,395
$
8,632,141
$
2028
2,000,000
$
1,337,516
$
4.2%
$ 357,000
1,694,516
$
305,484
$
8,937,625
$
2029
2,000,000
$
1,393,692
$
4.2%
$ 357,000
1,750,692
$
249,308
$
9,186,933
$
2030
2,000,000
$
1,452,227
$
4.2%
$ 357,000
1,809,227
$
190,773
$
9,377,706
$
2031
2,000,000
$
1,513,220
$
4.2%
$ 357,000
1,870,220
$
129,780
$
9,507,486
$
2032
2,000,000
$
1,576,775
$
4.2%
$ 357,000
1,933,775
$
66,225
$
9,573,711
$
2033
2,000,000
$
1,643,000
$
4.2%
$ 357,000
2,000,000
$
-
$
9,573,711
$
2034
1,900,000
$
1,712,006
$
4.2%
$ 357,000
2,069,006
$
(169,006)
$
9,404,705
$
2035
1,900,000
$
1,783,910
$
4.2%
$ 357,000
2,140,910
$
(240,910)
$
9,163,795
$
2036
1,900,000
$
1,858,834
$
4.2%
$ 357,000
2,215,834
$
(315,834)
$
8,847,960
$
2037
1,900,000
$
1,936,906
$
4.2%
$ 357,000
2,293,906
$
(393,906)
$
8,454,055
$
2038
1,900,000
$
2,018,256
$
4.2%
$ 357,000
2,375,256
$
(475,256)
$
7,978,799
$
Total Infrastructure Deficit
7,978,799
$
$-
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038
Figure 8
Projected Annual Capital Requirements vs. Cumulative Infrastructure Deficit
(Millions $)
Projected Annual Capital Requirement (A)
Total Capital Funding = (B+D)
Cumulative Infrastructure Deficit = (sum of F)
In-year funding
gap is closed
Cumulative infrastructure
deficit grows until funding
equals the capital
requirement.
HEMSON
29
Table 21
Guide to Components of the Infrastructure Deficit Analysis
Column
Explanation
A
The required in-year annual contribution for capital repair/replacement.
B
The planned tax supported annual capital contribution required to close the in-year funding
gap by 2033 (see column F). This includes in-year funding of capital and transfers to
reserves.
C
The calculated annual contribution % increase required to close the in-year funding gap by
2033. This percentage increase is used in column B.
D
Other sources of funding, such as gas tax funding as shown in the example above.
E
Total planned capital funding to close the in-year funding gap by 2033. The sum of B+D.
F
The in-year funding gap. The difference between the required in-year capital contribution,
and the planned capital contribution. Column A-E.
G
The cumulative infrastructure deficit. Notice that we begin to fund the backlog by 2033,
however the infrastructure deficit is not eliminated.
The above example looks solely at increased capital spending to close the
infrastructure gap. Additional tests and variations should be explored which consider
the use of debt to fund infrastructure or alternative revenue solutions. Each scenario
can be included in a single graph to compare the long-term cumulative infrastructure
deficit at different funding levels.
The Township also has the ability to manage the funding shortfall through the creation
of additional policy:
Review underutilized infrastructure which may not warrant repair/replacement;
Co-ordinate assets into specific hubs to create operating and capital
repair/maintenance efficiencies where possible. Example: Sport fields into
centralized areas;
Leverage growth related works with asset repair and replacement activities.
Example: watermain upsizing in conjunction with road resurfacing projects; and
Explore major building rehabilitation vs. complete replacement.
E.
10-YEAR CAPITAL PROGRAM
Table 22 outlines an example of a 10-year capital program template that can be used
by the Township for long-range financial planning. The capital program outlines the
asset management related expenditures for a period of 10-years needed to maintain
HEMSON
30
current levels of service. The expenditures are categorized based on the asset
management strategy planned actions outlined in Section 6. A long-term outlook can
help the Township plan for future infrastructure and calculate the impact to tax payers
of maintaining infrastructure. The Township's current AMP does not display the 10-
year capital plan; it should outline the planned expenses by year and by category of
planned action.
Table 22
10-Year Expenditure Forecast
2020
2021
2022
2023
2024
Expenditures
Forecast
Forecast
Forecast
Forecast
Forecast
Non-Infrastructure Solutions
5,000
$
5,000
$
5,000
$
5,000
$
5,000
$
Maintenance Activities
150,000
$
150,000
$
150,000
$
150,000
$
150,000
$
Renewal/Rehabilitation Activities
100,000
$
100,000
$
200,000
$
100,000
$
150,000
$
Replacement Activities
500,000
$
50,000
$
100,000
$
15,000
$
1,000,000
$
Disposal Activities
100,000
$
100,000
$
25,000
$
-
$
-
$
Expansion Activities
-
$
-
$
250,000
$
-
$
-
$
Total
855,000
$
405,000
$
730,000
$
270,000
$
1,305,000
$
Level of Service Adjustments
-
$
-
$
-
$
-
$
100,000
$
Grand Total Lifecycle Costs
855,000
$
405,000
$
730,000
$
270,000
$
1,405,000
$
2025
2026
2027
2028
2029
Expenditures
Forecast
Forecast
Forecast
Forecast
Forecast
Non-Infrastructure Solutions
5,000
$
5,000
$
5,000
$
5,000
$
5,000
$
Maintenance Activities
150,000
$
150,000
$
150,000
$
150,000
$
150,000
$
Renewal/Rehabilitation Activities
100,000
$
100,000
$
100,000
$
350,000
$
350,000
$
Replacement Activities
150,000
$
150,000
$
250,000
$
350,000
$
1,500,000
$
Disposal Activities
-
$
-
$
100,000
$
100,000
$
Expansion Activities
-
$
-
$
250,000
$
250,000
$
-
$
Total
405,000
$
405,000
$
755,000
$
1,205,000
$
2,105,000
$
Level of Service Adjustments
100,000
$
100,000
$
100,000
$
100,000
$
100,000
$
Grand Total Lifecycle Costs
505,000
$
505,000
$
855,000
$
1,305,000
$
2,205,000
$
HEMSON
31
VI MAKING ASSET MANAGEMENT OPERATIONAL
A.
CREATING ASSET MANAGEMENT INTERNAL NETWORK
Operationalizing an asset management plan starts with involving staff in the
Township. An internal network needs to be created and each member has to be
informed about asset management and the effects of good practice on the Township.
An Asset Management Committee can be developed to discuss, identify and address
gaps in the asset management practices of the Township. The Committee can be made
up of representatives from all departments.
B.
LINKAGE TO CAPITAL
1) The Township should adopt multi-year capital budgets and forecasts for all
services based on a minimum 10-year forecast horizon. The long-term capital
forecast should incorporate the prioritized capital projects as a result of risk
assessment and condition analysis. Table 22 in the previous section provides an
example.
2) Capital budgets and forecasts should identify and evaluate each capital project in
terms of the following:
a.
gross and net project costs;
b.
timing and phasing;
c.
funding sources;
d.
growth-related components;
e.
potential financing and debt servicing costs;
f.
long-term costs, including operations, maintenance, and asset rehabilitation
costs;
g.
capacity to deliver; and
h. alternative service delivery and procurement options.
3) Utilize risk matrix and capital prioritization to assist in capital budget decision
making. An example of a list of priority capital projects is provided in
Appendix C.
C.
RELATE MUNICIPAL PRACTICES TO THE AMP
1) Endorse Financing Strategy - In order to operationalize a plan, a financing
strategy needs to be adopted. The financial plan is the most critical step in putting
HEMSON
32
the plan into action and ultimately the only avenue to ensure your assets continue
to meet service levels.
2) Public Review and Comment - Although the AMP is intended to aid municipal
staff and Council make informed decisions regarding future capital investment
needs, the plan is intended to be available to the public. Therefore, it is
recommended that the Township post this plan as well as the strategic policy on
the website and provide a copy to members of the public upon request.
3) Plan Monitoring - Implementation of the AMP should be monitored. It is
important to ensure that successes and failures are documented to ensure that any
challenges in implementing the plan are addressed on an ongoing basis. The
Township can monitor the following key factors:
a.
Compliance with legislative requirements - Are we meeting all legislated
mandates?
b.
Service Delivery -100% compliance with service targets or targets exceeded.
c.
Capital project delivery outputs delivered to schedule (or better) and on
budget (or better).
d.
Operational and maintenance budgets met (or better).
e.
Risk Management--No events occurring outside the risk profile. How have
projects with high risk been handled?
f.
Benchmarking with comparable jurisdiction -- Maintain performance.
4) Keep it a living document - ongoing updates and refinements are encouraged.
Table 23 outlines when such updates and reviews should take place and can help
guide future plans.
Table 23
Timelines for Review
Asset Management Framework
Timeframe
Asset Management Policy
5 Years
Asset Management Plan
5 Years
Capital Budget
Annually
Asset Register and Data
Semi-Annually or Annually
Condition Assessment Reviews and Revisions
Semi-Annually
HEMSON
33
APPENDIX A
MUNICIPAL ACTION PLAN AND
REGULATION SUMMARY
(see MS Excel File)
HEMSON
Appendix A - Table 1
Township of Limerick
Asset Management Regulation (O.Reg. 588/17) and Municipal Action Plan Summary
Section
Regulation
Summary of Regulation
3. Strategic asset management policy
(1)
1.
2.
3.
4.
Every municipality shall prepare a strategic asset
management policy that includes the following:
The process by which the asset management plan is
to be considered in the development of the
municipality's budget or of any long-term financial
plans of the municipality that take into account
municipal infrastructure assets.
Outline the ways the AMP is used in the
yearly budgetting process. This can include
recommendations from the AMP that were
adopted, prioritized project lists or yearly
reporting on asset management key
indicators. Any application of the AMP in
yearly budgeting should be outlined.
Include a list of municipal goals, policies, and
plans that are directly linked to the AMP.
These can be found in strategic plans, official
plans,economic development studies, budget
documents, etc.
This can include methods on how the
municipality continues to improve asset
management. Examples include: staff
attendance in asset management training,
acquisition of asset management software,
asset management committee, etc.
The municipality should document any
principles used in the asset management
decision making process. These principles can
be taken from municipal strategic plans.
Section 3 of the Infrastructure for Jobs and
Prosperity Act includes 14 principles which
must be followed, in addition to any others
the municipality has.
Any of the municipality's goals, policies or plans that
are supported by its asset management plan.
The municipality's approach to continuous
improvement and adoption of appropriate practises
regarding asset management planning.
The principles to be followed by the municipality in its
asset management planning, which must include the
principles set out in section 3 of the Act.
HEMSON
Appendix A - Table 1
Township of Limerick
Asset Management Regulation (O.Reg. 588/17) and Municipal Action Plan Summary
Section
Regulation
Summary of Regulation
5.
i.
A. operations, such as increased maintenance schedules,
B. levels of service, and
C. lifecycle management,
ii.
iii.
iv.
v.
6.
i.
ii.
7.
8.
A process to ensure that the municipality's asset
management planning is aligned with Ontario's land-
use planning framework, including any relevant policy
statements issued under subsection 3 (1) of the
Planning Act , any provincial plans as defined in the
Planning Act and the municipality's official plan.
Financial plans related to the municipality's
wastewater assets.
An explanation of the capitalization thresholds used
to determine which assets are to be included in the
municipality's asset management plan and how the
thresholds compare to those in the municipality's
tangible capital asset policy, if it has one.
the actions that may be required to address the
vulnerabilities that may be caused by climate change
to the municipality's infrastructure assets, in respect
The municipality's commitment to consider, as part of
its asset management planning,
The asset management funding requirements
are usually included in municipal water and
wastewater financial plans. AMP funding
needs should be included in future financial
plans.
Financial plans related to the municipality's water
assets including any financial plans prepared under
the Safe Drinking Water Act, 2002 .
disaster planning and contingency funding.
adaptation opportunities that may be undertaken to
manage the vulnerabilities described in subparagraph
i,
mitigation approaches to climate change, such as
greenhouse gas emission reduction goals and targets,
and
A process to ensure that the municipality's asset
management planning is aligned with any of the
following financial plans:
This section requires an analysis on what the
municipality is doing or planning to do, to
mitigate the effects of climate change on
infrastruture. This can included references to
the Fire Master Plan, Emergency
Management Studies, Environmental
Assessments and others. This section may be
more strongly related to stormwater
infrastructure.
the anticipated costs that could arise from the
vulnerabilities described
An explanation on how related planning
policies are reflected in the AMP. This section
is moreso important for growth related
infrastructure that the municipality plans to
build in the future.
The municipality should include the minimum
dollar value requirement for assets to be
included in the AMP. Typically, assets with
value greater than $5,000 should be included,
but this varies across municipalities. The
municipality's TCA policies should be
referenced.
HEMSON
Appendix A - Table 1
Township of Limerick
Asset Management Regulation (O.Reg. 588/17) and Municipal Action Plan Summary
Section
Regulation
Summary of Regulation
9.
10.
11.
12.
(2)
For the purposes of this section,
4. Update of asset management policy
The municipality's commitment to provide
opportunities for municipal residents and other
interested parties to provide input into the
municipality's asset management planning.
"capitalization threshold" is the value of a municipal
infrastructure asset at or above which a municipality
will capitalize the value of it and below which it will
expense the value of it. ("seuil de capitalisation")
Every municipality shall prepare its first strategic asset
management policy by July 1, 2019 and shall review
and, if necessary, update it at least every five years.
The municipality's commitment to coordinate
planning for asset management, where municipal
infrastructure assets connect or are interrelated with
those of its upper-tier municipality, neighbouring
municipalities or jointly-owned municipal bodies.
An explanation of the municipal council's involvement
in the municipality's asset management planning.
The persons responsible for the municipality's asset
management planning, including the executive lead.
Discuss the role of Council in developing the
AMP and decision making on asset
management matters.
Allow citizens and other stakeholders to
provide their input on the findings of the
AMP. This can include public surveys or public
Council meetings where the AMP is presented
for Council approval. Include the a description
of the public consultation process.
The strategic asset management policy will
need to be completed by this date. This can
be included as an addition to the existing
AMP.
Include a section that oulines the process for
co-ordinating asset maintenace, repair or
replacement for assets that are shared or are
connected. For example co-ordination of
water pipe replacements owned by a
municipality that may be under an upper tier
owned road.
Include the position in charge of asset
management planning for the municipality.
HEMSON
Appendix A - Table 2
Township of Limerick
Asset Management Regulation (O.Reg. 588/17) and Municipal Action Plan Summary
Section
Summary of Regulation
Relevant Section
Action Plan
5. Asset management plans, current level of service
Timeline to Complete
(1)
(2)
A municipality's asset management plan must include the following:
Section 3
1.
Levels of Service
i.
Section 3
Levels of Service
ii.
Section 3
Levels of Service
2.
Section 3
Levels of Service
For each asset category, the current levels of service being
provided, determined in accordance with the following
qualitative descriptions and technical metrics and based on
data from at most the two calendar years prior to the year in
which all information required under this section is included
in the asset management plan:
- Include all assets in the asset management plan by 2023. The current
plan contains roads, bridges and culverts and buildings. Current levels of
service will need to be determined for all assets by 2023 as well.
- Continue to track the level of service measures outlined in Table 1 of
Appendix B. Appendix B - Table 1 provides the level of service measures
that will need to be reported on as per O.Reg 588/17 for the relevant
asset classes (i.e. roads and bridges & culverts).
- Continue to track level of service measures for all other assets (non-core
infrastructure). Build off the existing measures contained in the AMP.
- Develop and track performance measures that are feasible and relevant
to the municipality. The existing plan already includes level of service
measures.
Township of Limerick
- Start tracking your service levels over a number of years (minimum 5-
years). The data used to determine the current levels of service should be
updated at least every 2 years.
- Establish a level of service centralized registry that includes all current
services.
With respect to core municipal infrastructure assets, the
qualitative descriptions set out in Column 2 and the technical
metrics set out in Column 3 of Table 1, 2, 3, 4 or 5, as the
case may be.
With respect to all other municipal infrastructure assets, the
qualitative descriptions and technical metrics established by
the municipality.
The current performance of each asset category, determined
in accordance with the performance measures established
by the municipality, such as those that would measure
energy usage and operating efficiency, and based on data
from at most two calendar years prior to the year in which
all information required under this section is included in the
asset management plan.
Regulation
This requirement establishes timelines for core
and non-core municipal assets to be included in
the asset management plan in relation to
current levels of service
This section outlines reporting requirements for
existing levels of service. Historical data should
be at least 2 years old.
Include the community and technical levels of
service from Table 4 in this appendix in the
AMP for roads, water, wastewater and
stormwater infrastructure.
Include the qualitative and quantitative
descriptors outlined by the municipality for
assets such as facilities, vehicles, equipment,
land improvements, etc. These will have to be
defined by the municipality.
Include the performance of each asset category
which is measured using data less than 2 years
old as outlined by the municipality.
Performance measures will vary by asset
category.
Every municipality shall prepare an asset management plan
in respect of its core municipal infrastructure assets by July
1, 2021, and in respect of all of its other municipal
infrastructure assets by July 1, 2023.
Q1 2023
Q2 2020
Q1 2021
Q1 2023
Q2 2020
HEMSON
Appendix A - Table 2
Township of Limerick
Asset Management Regulation (O.Reg. 588/17) and Municipal Action Plan Summary
Section
Summary of Regulation
Relevant Section
Action Plan
5. Asset management plans, current level of service
Timeline to Complete
Township of Limerick
Regulation
3.
For each asset category,
i.
a summary of the assets in the category,
A summary describing the assets in each
category. For assets that are broken down into
components, a summary can be developed by
component.
Q4 2020
ii.
the replacement cost of the assets in the category,
Include total replacement cost of all assets in
each category.
Q1 2021
iii.
iv.
v.
- A summary table of the description of assets can be developed based on
the asset inventory. The table should include a description of assets,
replacement cost, weighted average age or remaining useful life, weighted
average condition, and useful life assumptions. An example is provided in
Section 2.
- Develop a centralized asset inventory for all assets. Include all relevant
information, including unique asset ID, age, useful life, location, condition,
and other factors. Break complex assets into their components. Include as
an Appendix to the AMP.
- Continue to base replacement costs on manufacturer costs and
benchmark costs that reflect the full cost of replacing an asset, including
disposal costs, materials, labour, contingency, design, etc. Look to recent
tenders for further information.
- Use condition assessment information based on staff or engineered
inspections. Regularly update the pavement condition indices and bridge
ratings that are in the current AMP, and regularly perform visual/staff
assessments of other assets.
- Map out all "Very Poor" to "Poor" assets. Assets also identified in "Fair"
condition are extremely important to recognize, as this category of assets
will continue to deteriorate and transition into the "Poor" category in the
near term. These assets are likely to pose the greatest risk to the
organization. Employ a 5-tier scale for roads and bridges, as opposed to
the 3-tier scale. The existing plan identifies assets in "Poor" and "Very
Poor" condition on a 5-tier scale or 3-tier scale.
- Document the methods used to perform condition assessments for each
asset category and include in the AMP. The current AMP contains high
level articulation of the methodology that could use more detail,
especially for roads, building and bridge assessments.
- Include the average age of asset categories for all assets. Weighted
average age of assets can be calculated relative to the replacement cost of
each asset. Develop an age profile of all assets.
the average age of the assets in the category, determined by
assessing the average age of the components of the assets,
the information available on the condition of the assets in
the category, and
a description of the municipality's approach to assessing the
condition of the assets in the category, based on recognized
and generally accepted good engineering practices where
appropriate.
Include the weighted average age of all assets
in each category weighted relative to their
replacement cost.
Where available, include the weighted
condition rating of assets in each category
weighted relative to their replacement cost.
Include the engineering methods used to assess
condition rating of all assets in each category.
This can include staff visual inspections, remote
sensors, etc.
Section 2
State of Local
Infrastructure
Section 2
State of Local
Infrastructure
Q1 2021
Q2 2021
Q2 2021
HEMSON
Appendix A - Table 2
Township of Limerick
Asset Management Regulation (O.Reg. 588/17) and Municipal Action Plan Summary
Section
Summary of Regulation
Relevant Section
Action Plan
5. Asset management plans, current level of service
Timeline to Complete
Township of Limerick
Regulation
4.
i.
The full lifecycle of the assets.
The activities listed should be relevant to the
useful life of the asset.
ii.
iii.
Discuss the risks involved with the options in
sub-section 4.ii.Risks include discussion of
consequences of not undertaking such
maintenance activities.
iv.
The risks associated with the options referred to in
subparagraph ii.
For each asset category, the lifecycle activities that would
need to be undertaken to maintain the current levels of
service as described in paragraph 1 for each of the 10 years
following the year for which the current levels of service
under paragraph 1 are determined and the costs of
providing those activities based on an assessment of the
following:
Discuss alternative options that can be
undertaken to maintain current service levels
and what options work best.
The options for which lifecycle activities could potentially be
undertaken to maintain the current levels of service.
The lifecycle activities referred to in subparagraph ii that can
be undertaken for the lowest cost to maintain the current
levels of service.
Discuss the lowest cost options that can be
undertaken to maintain current service levels.
Include all maintenance activites required to
maintain current service levels for at least a 10
year period. For example, for buildings this can
include frequency of inspections, maintenance
schedules, maintenace procedures, etc.
- For each asset category outline the planned actions needed to maintain
assets in state of good repair and maintain current levels of service.
Planned actions can be categorized by: non-infrastructure solutions,
maintenance activities, repair/rehabilitation, replacement and disposal.
- Provide the costs of performing each of these activities. Typically
municipal budgets capture maintenance activites through operating
budgets and repair/rehabilitation/replacement through capital budgets.
Incorporate future demand considerations in the analysis.
- Incorporate a risk assessment table associated with the asset
management strategy which outlines any actions that will be taken in
response to the potential impacts.
- The existing AMP does not identify the current infrastructure gap.
Calculate the gap and update this analysis on an ongoing basis, and
calculate the long-term cumulative infrastructure gap as it changes over
time. This can be presented in a table or graph for easy presentation.
- Identify what the tax/utility rate implications would be in order to carry
out the required capital contributions - test various funding options,
including scenarios with the strategic use of debt. For instance, calculate
the impact of closing the infrastructure gap on the tax rate.
- Contributed assets - identify how much (in $) is contributed each year.
The Township assumes responsibility for future repair and replacement.
- Identify policies to manage funding shortfall.
- Identify costs to maintain current levels of service and classify as non-
infrastructure solutions, maintenance activities, repair/rehabilitation,
replacement and disposal.
- Use a risk based approach to asset management. A risk matrix analysis
can be developed based on the approach in Section 4 and 5.
Section 4
Asset Management
Strategy
Section 5
Financing Strategy
Q2 2021
Q2 2021
HEMSON
Appendix A - Table 2
Township of Limerick
Asset Management Regulation (O.Reg. 588/17) and Municipal Action Plan Summary
Section
Summary of Regulation
Relevant Section
Action Plan
5. Asset management plans, current level of service
Timeline to Complete
Township of Limerick
Regulation
5.
i.
ii.
6.
i.
ii.
iii.
iv.
v.
How the assumptions referred to in subparagraph i relate to
the information required by paragraph 4.
For municipalities with a population of 25,000 or more, as
reported by Statistics Canada in the most recent official
census, the following:
With respect to upper-tier municipalities or single-tier
municipalities outside of the Greater Golden Horseshoe
growth plan area, the population and employment forecasts
for the municipality that are set out in its official plan.
With respect to lower-tier municipalities in the Greater
Golden Horseshoe growth plan area, if the population and
employment forecasts for the municipality are not set out in
Schedule 7 to the 2017 Growth Plan, the portion of the
forecasts allocated to the lower-tier municipality in the
official plan of the upper-tier municipality of which it is a
With respect to lower-tier municipalities outside of the
Greater Golden Horseshoe growth plan area, the population
and employment forecasts for the lower-tier municipality
that are set out in the official plan of the upper-tier
municipality of which it is a part.
With respect to municipalities in the Greater Golden
Horseshoe growth plan area, if the population and
employment forecasts for the municipality are set out in
Schedule 3 or 7 to the 2017 Growth Plan, those forecasts.
If, with respect to any municipality referred to in
subparagraph iii or iv, the population and employment
forecasts for the municipality cannot be determined as set
out in those subparagraphs, a description of assumptions
regarding future changes in population or economic activity.
For municipalities with a population of less than 25,000,
as reported by Statistics Canada in the most recent official
census, the following:
A description of assumptions regarding future changes in
population or economic activity.
Discussion on the relationship of growth on
maintenance activities. For example as
population grows, further maintenance
activites are required for roads as more roads
experience larger traffic volumes.
This can include: population forecasts,
development forecasts or economic reports.
If no population and employment forecasts are
available, estimates are acceptable as long as
the assumptions are stated in the AMP.
- Create a population and household growth graph to illustrate what the
future looks like in the community.
- Discuss how long-term needs for capital expenditures are expected to
change with growth (or no growth) and how growth projections inform
the development of operating and capital budgets.
Not Applicable
Section 6
Making Asset
Management
Operational
Q1 2021
Q1 2020
HEMSON
Appendix A - Table 2
Township of Limerick
Asset Management Regulation (O.Reg. 588/17) and Municipal Action Plan Summary
Section
Summary of Regulation
Relevant Section
Action Plan
5. Asset management plans, current level of service
Timeline to Complete
Township of Limerick
Regulation
vi.
(3)
(4)
In this section,
Section 6
Making Asset
Management
Operational
Every asset management plan must indicate how all
background information and reports upon which the
information required by paragraph 3 of subsection (2) is
based will be made available to the public.
"Greater Golden Horseshoe growth plan area" means the
area designated by section 2 of Ontario Regulation 416/05
(Growth Plan Areas) made under the Places to Grow Act,
2005. ("zone de croissance planifiée de la région élargie du
For each of the 10 years following the year for which the
current levels of service under paragraph 1 are determined,
the estimated capital expenditures and significant operating
costs related to the lifecycle activities required to maintain
the current levels of service in order to accommodate
projected increases in demand caused by growth, including
estimated capital expenditures and significant operating
costs related to new construction or to upgrading of existing
municipal infrastructure assets.
"2017 Growth Plan" means the Growth Plan for the Greater
Golden Horseshoe, 2017 that was approved under
subsection 7 (6) of the Places to Grow Act, 2005 on May 16,
2017 and came into effect on July 1, 2017; ("Plan de
Include the sources of the information and
ensure that the information is available to the
public.
- The asset management plan document can be made available online
through the website. Additional background information can be provided
to the public upon request, this includes the asset inventory and any
underlying assumptions.
Include estimates of capital and operating costs
for the maintenance of current service levels in
order to accommodate increases in demand
caused by growth.
Not Applicable
Q2 2021
HEMSON
Appendix A - Table 3
Township of Limerick
Asset Management Regulation (O.Reg. 588/17) and Municipal Action Plan Summary
Section
Summary of Regulation
Relevant Section
Action Plan
6. Asset management plans, proposed level of service
Township of Limerick
Timeline to Complete
(1)
1.
i.
ii.
- Continue to update target levels of service expected for a minimum of 10-years.
Target levels of service can be updated in consultation with the public and
Council.
- Level of service targets may be mandated by legislation, safety regulations or
defined by the municipality.
- Continue to track the level of service targets based on Table 1 of Appendix B.
Table 1 provides the level of service measures that will need to be reported on as
per O.Reg 588/17.
The Township should continue to track target levels of service for non-core
infrastructure going forward.
Section 3
Levels of Service
Section 3
Levels of Service
Section 3
Levels of Service
Regulation
This section refers to the proposed or planned
level of service for a minimum of 10 years.
Include the community and technical levels of
service from Table 4 in this appendix in the
AMP for roads, water, wastewater and
stormwater infrastructure.
With respect to all other municipal infrastructure assets, the
qualitative descriptions and technical metrics established by the
municipality.
Include the qualitative and quantitative
descriptors outlined by the municipality for
assets such as facilities, vehicles, equipment,
land improvements, etc. These will have to be
defined by the municipality.
Subject to subsection (2), by July 1, 2024, every asset management
plan prepared under section 5 must include the following additional
information:
For each asset category, the levels of service that the municipality
proposes to provide for each of the 10 years following the year in
which all information required under section 5 and this section is
included in the asset management plan, determined in accordance
with the following qualitative descriptions and technical metrics:
With respect to core municipal infrastructure assets, the qualitative
descriptions set out in Column 2 and the technical metrics set out in
Column 3 of Table 1, 2, 3, 4 or 5, as the case may be.
The regulations has additional requirements
which must be included in the asset
management plan by 2024.
Q2 2023
Q2 2023
Q2 2023
HEMSON
Appendix A - Table 3
Township of Limerick
Asset Management Regulation (O.Reg. 588/17) and Municipal Action Plan Summary
Section
Summary of Regulation
Relevant Section
Action Plan
6. Asset management plans, proposed level of service
Township of Limerick
Timeline to Complete
Regulation
2.
i.
ii.
iii.
iv.
3.
4.
i.
A. The full lifecycle of the assets.
B.
C.
D.
Section 3
Levels of Service
- Describe why the target levels of service are appropriate; this should include
the process that was used to establish the targets and how Council and the public
was consulted.
- Ensure that target levels of service are based on measurable targets that can be
tracked over time and maintained up to date. Discuss the risks of not achieving
those targets.
- Continue to document the target levels of service in relation to the current
levels of service and document the differences over time. A sample level of
service tracker can be found in Section 2.
- Continue to ensure that target levels of service are achievable, feasible and
realistic. Targets should be developed in consultation with the public and Council.
Ensure that the consultation process is documented.
- Ensure that the target levels of service are sustainable over the long-term
through the financing strategy outlined in Section 5. Identify what the tax rate
implications would be in order to carry out the required capital contributions to
meet targets - test various funding options, including scenarios with the strategic
use of debt.
- Continue to develop performance level targets based on measures that are
feasible to track over time. Examples of performance measures are included in
Section 2 and in the Township's existing AMP.
The options for the proposed levels of service and the risks associated
with those options to the long term sustainability of the municipality.
Options to achieve the proposed levels of
service and all risks associated to not meeting
the targets.
Include a description of how proposed service
levels differ from current service levels.
Include quantitative and qualitative
differences. Identify which service measures
are new.
Discuss whether proposed service levels are
attainable. Only feasible and realistic level of
service targets should be included in any plan.
An explanation of why the proposed levels of service under
paragraph 1 are appropriate for the municipality, based on an
assessment of the following:
An explanation on how levels of service
targets have been determined will need to be
outlined.
Whether the proposed levels of service are achievable.
How the proposed levels of service differ from the current levels of
service set out under paragraph 1 of subsection 5 (2).
The proposed performance of each asset category for each year of
the 10-year period referred to in paragraph 1, determined in
accordance with the performance measures established by the
municipality, such as those that would measure energy usage and
operating efficiency.
A lifecycle management and financial strategy that sets out the
following information with respect to the assets in each asset
category for the 10-year period referred to in paragraph 1:
An identification of the lifecycle activities that would need to be
undertaken to provide the proposed levels of service described in
paragraph 1, based on an assessment of the following:
The options for which lifecycle activities could potentially be
undertaken to achieve the proposed levels of service.
The municipality's ability to afford the proposed levels of service.
The lifecycle activities referred to in sub-subparagraph B that can be
undertaken for the lowest cost to achieve the proposed levels of
service.
The risks associated with the options referred to in sub-subparagraph
B.
Discuss alternative options that can be
undertaken to achieve proposed service levels
and what options work best.
Discuss the risks involved with the options to
achieve proposed service levels. Risks include
discussion of consequences of not
undertaking such maintenance activities.
Discuss the lowest cost options that can be
undertaken to achieve proposed service
levels.
Section 4
Asset Management
Strategy
- For each asset category outline the planned actions needed to maintain assets
in state of good repair and meet level of service targets at the lowest possible
cost. Planned actions can be categorized by: non-infrastructure solutions,
maintenance activities, repair/rehabilitation, replacement and disposal.
- Incorporate a risk assessment table associated with the asset management
strategy which outlines any actions that will be taken in response to the potential
impacts.
- Include a discussion on the risks associated with not taking the planned actions
as required.
- Include the useful life of each asset in the lifecycle analysis.
- Consider the cost of planned actions of lifecycle activities; identify the lowest
cost options that can achieve target service levels.
The activities listed should be relevant to the
useful life of the asset.
Discuss whether proposed service levels are
affordable. This will require a cost of analysis
of work required to achieve the proposed
targets.
Include the planned performance levels
established by the municipality. Performance
measures will vary by asset category.
Identify the lifecycle activities that need to be
performed to provide proposed service levels
based on:
Lifecycle cost analysis for each asset category.
Should be for at least a 10 year period.
Q2 2023
Q2 2023
Q2 2023
Q2 2023
Q3 2023
Q2 2023
Q1 2024
HEMSON
Appendix A - Table 3
Township of Limerick
Asset Management Regulation (O.Reg. 588/17) and Municipal Action Plan Summary
Section
Summary of Regulation
Relevant Section
Action Plan
6. Asset management plans, proposed level of service
Township of Limerick
Timeline to Complete
Regulation
ii.
iii.
iv.
A.
B. if applicable, an explanation of how the municipality will manage the
risks associated with not undertaking any of the lifecycle activities
identified in subparagraph i.
An estimate of the annual costs for each of the 10 years of
undertaking the lifecycle activities identified in subparagraph i,
separated into capital expenditures and significant operating costs.
An identification of the annual funding projected to be available to
undertake lifecycle activities and an explanation of the options
examined by the municipality to maximize the funding projected to
be available.
If, based on the funding projected to be available, the municipality
identifies a funding shortfall for the lifecycle activities identified in
subparagraph i,
an identification of the lifecycle activities, whether set out in
subparagraph i or otherwise, that the municipality will undertake,
and
Forecast of capital and operating costs
associated to achieving the proposed levels of
service. Forecast should be for at least a 10
year period.
- The existing AMP does not identify the current infrastructure gap. Calculate the
gap and include an analysis of the cumulative infrastructure gap. Continue to
update this analysis on an ongoing basis.
- Identify what the tax rate implications would be in order to carry out the
required capital contributions - test various funding options, including scenarios
with the strategic use of debt. The current plan does not include a tax rate
impact assessment or exploration of current revenue sources.
- Contributed assets - identify how much (in $) is contributed each year. The
Township assumes responsibility for future repair and replacement.
- Identify policy to manage funding shortfall.
- Identify costs to meet level of service targets and classify as non-infrastructure
solutions, maintenance activities, repair/rehabilitation, replacement and disposal.
- Use a risk based approach to asset management. A risk matrix analysis can be
developed based on the approach in Section 4 and 5.
- Identify all possible municipal funding sources. The largest funding sources for
municipalities will be taxes. Can also identify other predictable sources of funding
such as user fees or gas tax funding. Answer questions like: How much revenue
was generated from the funding source in the latest year? What % of total
revenues did that represent? What is the current % of the annual repayment
limit? The current AMP does not discuss past revenue sources.
- Develop an asset priority list to ensure that assets in need of immediate
attention are identified and documented. Appendix C provides a sample priority
projects list which can be included as an appendix in the AMP.
Section 5
Financing Strategy
Identify funding options and forecast funding
for a minimum of 10 years. Funding is
associated to the lifecylce cost forecast
above.
Conditions if a funding shortfall is identified.
Identify lifecycle activities that the
municipality will undertake.
Discussion on risk management activities
associated to the funding shortfall.
Q1 2024
HEMSON
Appendix A - Table 3
Township of Limerick
Asset Management Regulation (O.Reg. 588/17) and Municipal Action Plan Summary
Section
Summary of Regulation
Relevant Section
Action Plan
6. Asset management plans, proposed level of service
Township of Limerick
Timeline to Complete
Regulation
5.
6.
i.
ii.
iii.
7.
(2)
- Fully document the assumptions and definitions in the AMP; for instance how
replacement costs are calculated and how condition assessments are defined.
With respect to an asset management plan prepared under section 5
on or before July 1, 2021, if the additional information required under
this section is not included before July 1, 2023, the municipality shall,
before including the additional information, update the current levels
of service set out under paragraph 1 of subsection 5 (2) and the
current performance measures set out under paragraph 2 of
subsection 5 (2) based on data from the two most recent calendar
years.
For municipalities with a population of less than 25,000, as reported
by Statistics Canada in the most recent official census, a discussion of
how the assumptions regarding future changes in population and
economic activity, set out in subparagraph 5 i of subsection 5 (2),
informed the preparation of the lifecycle management and financial
strategy referred to in paragraph 4 of this subsection.
For municipalities with a population of 25,000 or more, as reported
by Statistics Canada in the most recent official census,
the estimated capital expenditures and significant operating costs to
achieve the proposed levels of service as described in paragraph 1 in
order to accommodate projected increases in demand caused by
population and employment growth, as set out in the forecasts or
assumptions referred to in paragraph 6 of subsection 5 (2), including
estimated capital expenditures and significant operating costs related
to new construction or to upgrading of existing municipal
infrastructure assets,
an overview of the risks associated with implementation of the asset
management plan and any actions that would be proposed in
response to those risks.
An explanation of any other key assumptions underlying the plan that
have not previously been explained.
the funding projected to be available, by source, as a result of
increased population and economic activity, and
All assumptions in the AMP should be clearly
laid out.
If planned service level analysis is not included
in the AMP by July 1, 2023 then the
municipality will need to update the current
level of service analysis with the most recent
2 years of data.
- Discuss how expected growth projections have been used to inform the
financing strategy.
Section 3
Levels of Service
Not Applicable
Section 6
Making Asset
Management
Operational
For municipalities with a population greater
than 25,000, include the risks associated with
implementing the AMP and how to manage
these risks.
For municipalities with a population greater
than 25,000, include the estimated capital
and operating costs to achieve proposed
service levels in order to accommodate
increases in demand due to growth.
For municipalities with a population less than
25,000, explain how population and economic
forecasts assumptions tie into the lifecycle
management and financial strategy for the
municipal asset management plan.
For municipalities with a population greater
than 25,000, include the funding and funding
sources available as a result of increased
population and economic activity.
Q1 2024
Q2 2021
HEMSON
Appendix A - Table 4
Township of Limerick
Asset Management Regulation (O.Reg. 588/17) and Municipal Action Plan Summary
Section
Summary of Regulation
Relevant Section
Action Plan
7. Update of asset management plans
Township of Limerick
Timeline to Complete
(1)
(2)
8. Endorsement and approval required
(a)
The AMP must be endorsed by the executive
lead of the municipality.
(b)
The AMP must be approved by Council.
9. Annual review of asset management planning progress
(1)
(2)
The annual review must address,
(a)
The annual review should discuss the
progress made in implementing the AMP.
(b)
(c) a strategy to address the factors described in clause (b).
The annual review should discuss a strategy
to address any factors that act as barriers,
gaps or challenges in implementing the
AMP.
10. Public Availability
Post the asset management policy and plan
on the municipality's website so that the
public can access it. Provide a copy of the
asset management policy and plan to any
person who requests it.
The AMP should be updated every 5 years
after July 1st 2024.
Any updates to the AMP should comply with
the requirements of O.Reg 588/17 as well.
endorsed by the executive lead of the municipality; and
approved by a resolution passed by the municipal council.
Review the AMP annually before or on July
1st of each year starting after all
requirements of O.Reg 588/17 have been
met.
The annual review should discuss any
factors that act as barriers, gaps or
challenges in implementing the AMP.
Regulation
Every municipality shall post its current strategic asset
management policy and asset management plan on a website
that is available to the public, and shall provide a copy of the
policy and plan to any person who requests it.
Every municipality shall review and update its asset management
plan at least five years after the year in which the plan is
completed under section 6 and at least every five years
thereafter.
The updated asset management plan must comply with the
requirements set out under paragraphs 1, 2 and 3 and
subparagraphs 5 i and 6 i, ii, iii, iv and v of subsection 5 (2),
subsection 5 (3) and paragraphs 1 to 7 of subsection 6 (1).
Every asset management plan prepared under section 5 or 6, or
updated under section 7, must be,
Every municipal council shall conduct an annual review of its asset
management progress on or before July 1 in each year, starting
the year after the municipality's asset management plan is
completed under section 6.
any factors impeding the municipality's ability to implement its
asset management plan; and
the municipality's progress in implementing its asset
management plan;
Ongoing
Q4 2020
Q4 2020
Q1 2020
Section 6
Making Asset
Management
Operational
- Ensure the asset management plan and strategic asset management
policy are posted on the website and available upon request.
- Establish an asset management committee. The committee can
identify gaps in the asset management framework and propose
potential solutions. The committee should be made up of key staff
from all relevant departments, this ensures that key staff, such as the
executive lead, are involved from the beginning.
- Identify a data champion. A data champion is responsible for
updating and maintaining the asset register as well as coordinating
updates of the asset management plan. Key municipal staff should
support the data champion as information will be needed from all
departments to maintain asset management information up to date.
- Ensure the asset management plan is endorsed by the executive
lead and approved by Council.
- This should also be detailed in the Strategic Policy
Section 6
Making Asset
Management
Operational
Section 6
Making Asset
Management
Operational
Section 6
Making Asset
Management
Operational
- Monitor asset management plan progress on an annual basis.
- Progress can be measured using some of the monitoring options
outlined in Section 6.
- Develop standardized reports for Council for each asset category.
The report should include asset condition, replacement cost, data
quality and any other relevant information. Section 2 provides
examples.
- The asset management plan is a living document. The plan should be
updated at least every 5 years.
- The asset inventory should be up to date whenever the plan is to be
updated, however best practice is to update the asset inventory
whenever assets are replaced or new assets acquired.
HEMSON
APPENDIX B
SAMPLE LEVEL OF SERVICE TABLES
HEMSON
Sample Current Level of Service Tracker
Asset Category
Community Level of Service
Performance Measures
(Current Level of Service)
Note: Indicates level of service measures required by O.Reg. 588/17.
Buildings
Average weighted condition assessment
Good
Percentage of assets at or above "Good" or "Very Good"
condition
30%
Vehicles & Machinery
Average weighted condition assessment
Fair
Percentage of assets at or above "Good" or "Very Good"
condition
20%
Land Improvements
Average weighted condition assessment
Poor
Percentage of assets at or above "Good" or "Very Good"
condition
30%
Stormwater Infrastructure
1. Percentage of properties in municipality resilient to a 100-
year storm (O. Reg. 588/17).
100% (Urban Area)
2. Percentage of the municipal stormwater management
system resilient to a 5-year storm (O. Reg. 588/17).
100% (Urban Area)
Average weighted condition assessment
Good
Percentage of assets at or above "Good" or "Very Good"
condition
95%
Equipment & Furnishings
Average weighted condition assessment
Fair
Percentage of assets at or above "Good" or "Very Good"
condition
10%
Sidewalks
Average weighted condition assessment
Fair
Percentage of assets at or above "Good" or "Very Good"
condition
50%
Bridges and Culverts
Municipal bridges and culverts support regular vehicle
traffic including transport trucks.There are weight
restrictions in place for some bridges. This is done to
ensure safety and reduce damage to bridges.
Percentage of bridges in the municipality with loading or
dimensional restrictions (O. Reg. 588/17).
10%
Inspections of bridges are completed under the Public
Transportation and Improvement Act, specificially
O.Reg. 104/97 Standards for Bridges. Visual
inspections are performed and bridge conditions are
assessed. Detailed information and images are
provided through bridge assessment reports done
every 2 years.
1. For bridges in the municipality, the average bridge
condition index value (O. Reg. 588/17).
70%
Inspections of culverts with span greater than 3 metres
are completed under the Public Transportation and
Improvement Act, specificially O.Reg. 104/97
Standards for Bridges. Visual inspections are
performed and culvert conditions are assessed.
Detailed information and images are provided through
bridge assessment reports done every 2 years.
2. For structural culverts in the municipality, the average
bridge condition index value (O. Reg. 588/17).
70%
Average weighted condition assessment (All bridges &
culverts)
Fair
Percentage of assets at or above "Good" or "Very Good"
condition (all bridges & culverts)
55%
Includes all municipal buildings and facilities as well as
minor buildings and structures. Buildings have been
recorded by components wherever possible.
Includes fleet vehicles including fire, parks and roads
related. Also includes heavy machinery and all major
equipment associated to the vehicles.
Includes equipment mostly on playgrounds and
sportsfields such as fencing, lighting, skate ramps, etc.
Also includes parking lots.
All stormwater linear infrstructure and storm ponds are
included in this category. Municipality maintains a GIS
database of this asset class and is updated based on
the Stormwater Master Plan.
Equipment includes all mechanical and stationary
equipment. Examples include furniture at facilites, fire
bunker gear and library materials.
Includes all Township sidewalks, trails and pathways.
HEMSON
Sample Current Level of Service Tracker
Asset Category
Community Level of Service
Performance Measures
(Current Level of Service)
Note: Indicates level of service measures required by O.Reg. 588/17.
Roads
Number of lane-kilometres of each of arterial roads, collector
roads and local roads as a proportion of square kilometres
of land area of the municipality (O. Reg. 588/17).
Arterial
0%
Collector
55%
Local
45%
1. For paved roads in the municipality, the average
pavement condition index value (O. Reg. 588/17).
70%
2. For unpaved roads in the municipality, the average
surface condition (O. Reg. 588/17).
62%
Average weighted condition assessment (All Roads)
Good
Percentage of assets at or above "Good" or "Very Good"
condition (All Roads)
60%
Water System
1. Percentage of properties connected to the municipal water
system (O. Reg. 588/17).
80%
2. Percentage of properties where fire flow is available (O. Reg.
588/17).
80%
1. The number of connection-days per year where a boil water
advisory notice is in place compared to the total number of
properties connected to the municipal water system (O. Reg.
588/17).
0%
2. The number of connection-days per year due to water main
breaks compared to the total number of properties connected to
the municipal water system (O. Reg. 588/17).
0%
Average weighted condition assessment
Good
Percentage of assets at or above "Good" or "Very Good"
condition
50%
Sewer System
Maps of the wastewater linear network are maintained in a
GIS database and updated along with updates of the
water/wastewater master plan.
Percentage of properties connected to the municipal wastewater
system (O. Reg. 588/17).
80%
1. The number of events per year where combined sewer flow in
the municipal wastewater system exceeds system capacity
compared to the total number of properties connected to the
municipal wastewater system (O. Reg. 588/17).
0%
2. The number of connection-days per year due to wastewater
backups compared to the total number of properties connected to
the municipal wastewater system (O. Reg. 588/17).
0%
3. The number of effluent violations per year due to wastewater
discharge compared to the total number of properties connected
to the municipal wastewater system (O. Reg. 588/17).
0%
Average weighted condition assessment
Fair
Percentage of assets at or above "Good" or "Very Good"
condition
50%
Maps of the road network and descriptions of the
connectivity of roads is maintained in a GIS database
and updated every 5 years based on the Road Needs
Study.
Maps of the road network that illustrate the conditions
and works needed on all Township roads over the next
10 years is provided through the Road Needs Study
which us updated avery 5 years.
Maps of the water linear network (including fire flow and fire
hydrants) are maintained in a GIS database and updated
along with updates of the water/wastewater master plan.
Water boil advisories and interruptions are minimal,
however if one does occur it is imeediately recorded and
reported in accordance to Provincial regulations.
The water/wastewater master plan documents the following
information:
- overflow mechanism design, locations and details
- effluent areas and descriptions
- stormwater protections and future measures
HEMSON
APPENDIX C
SAMPLE PRIORITY CAPITAL
PROJECT LIST APPENDIX
HEMSON
HIGH PRIORITY WATER AND WASTEWATER CAPITAL WORKS
This section outlines a sample of priority projects that can be attached as an appendix to an
asset management plan. The priority list appendix should be updated with the asset
management plan as new information is available. Note that this is an example and any values
presented are just placeholders.
Although some of the Municipality's water and wastewater infrastructure is not due to be replaced
for some time by virtue of the assets engineered design life, the condition of some of the assets are
considered to be poor or very poor and no longer perform to the proper standards to meet current
levels of service. In consultation with municipal staff, the following table outlines a list of 10 key
projects which have been identified as a high priority and require immediate attention.
High Priority Water and Wastewater Capital Projects - Examples
Priority
#
Project Description
Estimated Cost
Condition
Risk
1.
Sanitary Sewer Forcemain
$1,000,000
Very Poor
Very High - 25
2.
New Water/Sewer
$900,000
Very Poor
Very High - 25
3.
Water Tower/Standpipe
$1,500,000
Very Poor
Very High - 25
4.
New Watermain and Sewermain
Extension 1
$800,000
Very Poor
Very High - 20
5.
New Watermain and Sewermain
Extension 2
$800,000
Very Poor
Very High - 16
6.
New Watermain and Sewermain
Extension 3
$800,000
Very Poor
High - 15
7.
Catchbasins 1
$190,000
Very Poor
High - 12
8.
Catchbasins 2
$190,000
Poor
High - 12
9.
Watermain Rehabilitation 1
$800,000
Poor
High - 12
10.
Watermain Rehabilitation 2
$800,000
Poor
High - 10
Total
$7,780,000
The Level of Risk can be identified by using the risk matrix as outlined Section IV of the Municipality's
Municipal Action Plan.
The level of capital repair and replacement works required would necessitate the Municipality to
seek funding from a variety of sources, in addition to utility rate based revenues, to fund all or part
these works. The Municipality's utility rates will continue to be increased, which progressively
over-time, moves the Municipality towards full cost recovery. However, in the short to medium
term, the Municipality should look to secure grant funding to offset the capital costs of completing
the noted projects.
HEMSON
The Municipality has always used internal control measures to prioritize capital related repair and
replacement activities to align with available funds/resources to meet current levels of service.
The Municipality will continue to utilize such measures to ensure capital works are carried out in
a fiscally responsible manner. It is in this regard, the Municipality has identified the need to
complete the sanitary sewer forcemain project (priority #1) and the new water/sewer works
(priority #2) immediately, while the remaining high priority projects will be considered for
completion in subsequent years beyond 2019. The Municipality's ability to undertake these
projects is largely dependent on securing upper-level government grant funding, and therefore,
the Municipality should exercise all available grant funding opportunities while continuing to
move towards full cost recovery utility rates.
The financing strategies to be implemented by the Municipality detail the commitment to
increase capital contributions over time to progressively move towards a self-sustaining water and
wastewater system. It should be noted; annual capital budgeting exercises may reprioritize the
capital works identified.
HEMSON