Asset Management Plan 2024
Machin, Ontario
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Asset
Management
Plan
Township of Machin
2024
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"© 2024, Municipality of Machin. All Rights Reserved.
The preparation of this project was carried out with assistance from the
Government
of
Canada
and
the
Federation
of
Canadian
Municipalities. Notwithstanding this support, the views expressed are the personal
views of the authors, and the Federation of Canadian Municipalities and the
Government of Canada accept no responsibility for them."
This Asset Management Program was prepared by:
Update by Tammy Rob, Clerk Treasurer Municipality of Machin
2024
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Key Statistics
Replacement cost of
asset portfolio
$141 million
Replacement cost of
infrastructure per
household
$223,101(2024)
Percentage of assets in fair
or better condition
54%
Percentage of assets with
assessed condition data
24%
Annual capital
infrastructure deficit
$911,100
Recommended timeframe
for eliminating annual
infrastructure deficit
20 Years
Target reinvestment
rate
3.5%
Actual reinvestment
rate
1.3%
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Table of Contents
1
Introduction & Context ..................................................................... 1
2
Scope and Methodology ................................................................. 10
3
Portfolio Overview ......................................................................... 13
4
Road Network ............................................................................... 17
5
Bridges & Culverts ......................................................................... 26
6
Buildings ...................................................................................... 32
7
Vehicles ....................................................................................... 38
8
Machinery & Equipment .................................................................. 43
9
Land Improvements ....................................................................... 49
10
Water Network ........................................................................... 54
11
Impacts of Growth ...................................................................... 61
12
Financial Strategy ....................................................................... 63
13
Appendices ................................................................................ 73
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Executive Summary
Municipal infrastructure provides the foundation for the economic, social, and
environmental health and growth of a community through the delivery of critical
services. The goal of asset management is to deliver an adequate level of service in
the most cost-effective manner. This involves the development and implementation
of asset management strategies and long-term financial planning.
Scope
Identifying the current practices and strategies that are in place to manage public
infrastructure and making recommendations where they can be further refined.
Through the implementation of sound asset management strategies, the Township
can ensure that public infrastructure is managed to support the sustainable delivery
of municipal services.
The following asset categories are addressed in further sections:
Asset Categories
The Township has achieved compliance with O. Reg. 588/17 to the extent
of the requirements that must be completed by July 1, 2022. There are
additional requirements concerning proposed levels of service and growth
that must be met by July 1, 2025.
Road Network
Vehicles
Land Improvements
Bridges & Culverts
Buildings
Machinery & Equipment
Water Network
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Findings
The overall replacement cost of the asset categories owned by Machin totals $41.3
million. 54% of all assets analysed are in fair or better condition and assessed
condition data was available for 24% of assets. For the remaining 76% of assets,
assessed condition data was unavailable, and asset age was used to approximate
condition - a data gap that persists in most municipalities. Generally, age misstates
the true condition of assets, making assessments essential to accurate asset
management planning, and a recurring recommendation.
The development of a long-term, sustainable financial plan requires an analysis of
whole lifecycle costs. Using a combination of proactive lifecycle strategies (roads)
and replacement only strategies (all other assets) determine the lowest cost option
to maintain the current levels of service.
To meet capital replacement and rehabilitation needs for existing infrastructure,
prevent infrastructure backlogs, and achieve long-term sustainability, the
Township's average annual capital requirement totals $1.45 million. Based on a
historical analysis of sustainable capital funding sources, the Township is
committing approximately $541,335 towards capital projects or reserves per year.
As a result, there is currently an annual funding gap of $911,100.
It is important to note that this represents a snapshot in time and is based on the
best available processes, data, and information at the Township. Strategic asset
management planning is an ongoing and dynamic process that requires continuous
improvement and dedicated resources.
Recommendations
A financial strategy was developed to address the annual capital funding gap. The
annual tax change required to eliminate the Township's infrastructure deficit based
on a 20-year plan:
Tax-Funded
ASSETS
Average Annual Tax
Change
1.2%
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The annual rate change needed to adress the funding gap for the water network
extended over 40 years is:
Recommendations to guide continuous refinement of the Township's asset
management program. These include:
-
Review data to update and maintain a complete and accurate dataset
-
Develop a condition assessment strategy with a regular schedule
-
Review and update lifecycle management strategies
-
Development and regularly review short- and long-term plans to meet capital
requirements
-
Measure current levels of service and identify sustainable proposed levels of
service
Rate-Funded
WATER
Average Annual Rate
Change
1.9%
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1 Introduction & Context
1.1
Key Insights
-
The goal of asset management is to minimize the lifecycle costs of delivering
infrastructure services, manage the associated risks, while maximizing the
value ratepayers receive from the asset portfolio
-
The Township's asset management policy provides clear direction to staff on
their roles and responsibilities regarding asset management
-
An asset management plan is a living document that should be updated
regularly to inform long-term planning
1.2
Machin Community Profile
The Township of Machin is in the Kenora District west of Dryden, made up of three
communities all located on or near beautiful Eagle Lake. Eagle River, Minnitaki, and
Vermilion Bay are all located in the heart of Sunset Country on the Trans Canada
Highway.
Census Characteristic
Machin
Ontario
Population 2021
1,012
14,223,942
Population Change 2016-2021
4.2
5.8
Total Private Dwellings
632
5,929,250
Population Density
3.5/km2
15.9/km2
Land Area
290.14 km2
892,411.76 km2
Located directly off the Trans-Canada Highway, you can't travel through the Kenora
District, or across Canada, without passing by Machin. Viewed as a "Hub", the
Township resides in the heart of northwestern Ontario. With entrances at Highway
17, Highway 105, and Highway 594, all travelers must pass by Machin when
heading North, South, East, or West.
Cradling the North shore of world-famous Eagle Lake, Machin has something for
everyone. Our residents and visitors both enjoy the outdoor adventures like fishing,
hiking, water sports, snow machining, horseback riding, collecting wild edibles, and
many more outdoor pursuits.
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1.3
An Overview of Asset Management
Municipalities are responsible for managing and maintaining a broad portfolio of
infrastructure assets to deliver services to the community. The goal of asset
management is to minimize the lifecycle costs of delivering infrastructure services,
manage the associated risks, while maximizing the value ratepayers receive from
the asset portfolio.
The acquisition of capital assets accounts for only 10-20% of their total cost of
ownership. The remaining 80-90% derives from operations and maintenance. The
Township focused its analysis on the capital costs to maintain, rehabilitate and
replace existing municipal infrastructure assets.
These costs can span decades, requiring planning and foresight to ensure financial
responsibility is spread equitably across generations. An asset management plan is
critical to this planning, and an essential element of broader asset management
program. The industry-standard approach and sequence to developing a practical
asset management program begins with a Strategic Plan, followed by an Asset
Management Policy and an Asset Management Strategy, concluding with an Asset
Management Plan.
This industry standard, defined by the Institute of Asset Management (IAM),
emphasizes the alignment between the corporate strategic plan and various asset
management documents. The strategic plan has a direct, and cascading impact on
asset management planning and reporting.
Build
20%
Operate, Maintain, and Dispose
80%
Total Cost of Ownership
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1.3.1 Asset Management Policy
An asset management policy represents a statement of the principles guiding the
Town's approach to asset management activities. It aligns with the organizational
strategic plan and provides clear direction to municipal staff on their roles and
responsibilities as part of the asset management program.
The Township council approved the Strategic Asset Management Policy on
__________ in accordance with Ontario Regulation 588/17.
The purpose of the policy is to provide leadership in and commitment to the
development and implementation of the Municipality's asset management program.
It is intended to guide the consistent use of asset management across the
organization, to facilitate logical and evidence-based decision-making for the
management of municipal infrastructure assets and to support the delivery of
sustainable community services now and in the future.
1.3.2 Asset Management Strategy
An asset management strategy outlines the translation of organizational objectives
into asset management objectives and provides a strategic overview of the
activities required to meet these objectives. It provides greater detail than the
policy on how the Town plans to achieve asset management objectives through
planned activities and decision-making criteria.
The Township's Asset Management Policy contains many of the key components of
an asset management strategy and may be expanded on in future revisions or as
part of a separate strategic document.
1.3.3 Asset Management Plan
The asset management plan (AMP) presents the outcomes of the Township's asset
management program and identifies the resource requirements needed to achieve a
defined level of service. The AMP typically includes the following content:
-
State of Infrastructure
-
Asset Management Strategies
-
Levels of Service
-
Financial Strategies
The AMP is a living document that should be updated regularly as additional asset
and financial data becomes available.
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1.4
Key Concepts in Asset Management
Effective asset management integrates several key components, including lifecycle
management, risk management, and levels of service. These concepts are applied
throughout this asset management plan and are described below in greater detail.
1.4.1 Lifecycle Management Strategies
The condition or performance of most assets will deteriorate over time. This process
is affected by a range of factors including an asset's characteristics, location,
utilization, maintenance history and environment. Asset deterioration has a
negative effect on the ability of an asset to fulfill its intended function, and may be
characterized by increased cost, risk and even service disruption.
To ensure that municipal assets are performing as expected and meeting the needs
of customers, it is important to establish a lifecycle management strategy to
proactively manage asset deterioration.
There are several field intervention activities that are available to extend the life of
an asset. These activities can be generally placed into one of three categories:
maintenance, rehabilitation, and replacement. The following table provides a
description of each type of activity and the general difference in cost.
Lifecycle
Activity
Description
Example
(Roads)
Cost
Maintenance
Activities that prevent defects or
deteriorations from occurring
Crack Seal
$
Rehabilitation/
Renewal
Activities that rectify defects or
deficiencies that are already present
and may be affecting asset
performance
Mill & Re-
surface
$$
Replacement/
Reconstruction
Asset end-of-life activities that often
involve the complete replacement of
assets
Full
Reconstruction $$$
Depending on initial lifecycle management strategies, asset performance can be
sustained through a combination of maintenance and rehabilitation, but at some
point, replacement is required. Understanding what effect these activities will have
on the lifecycle of an asset, and their cost, will enable staff to make better
recommendations.
The Township's approach to lifecycle management is described within each asset
category. Developing and implementing a proactive lifecycle strategy will help staff
to determine which activities to perform on an asset and when they should be
performed to maximize useful life at the lowest total cost of ownership.
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1.4.2 Risk Management Strategies
Municipalities generally take a 'worst-first' approach to infrastructure spending.
Rather than prioritizing assets based on their importance to service delivery, assets
in the worst condition are fixed first, regardless of their criticality. However, not all
assets are created equal. Some are more important than others, and their failure or
disrepair poses more risk to the community than that of others. For example, a
road with a high volume of traffic that provides access to critical services poses a
higher risk than a low volume rural road. These high-value assets should receive
funding before others.
By identifying the various impacts of asset failure and the likelihood that it will fail,
risk management strategies can identify critical assets, and determine where
maintenance efforts, and spending, should be focused.
A high-level evaluation of asset risk and criticality was performed. Each asset has
been assigned a probability of failure score and consequence of failure score based
on available asset data. These risk scores can be used to prioritize maintenance,
rehabilitation, and replacement strategies for critical assets.
1.4.3 Levels of Service
A level of service (LOS) is a measure of what the Township is providing to the
community and the nature and quality of that service. Within each asset category,
technical metrics and qualitative descriptions that measure both technical and
community levels of service have been established and measured as data is
available.
These measures include a combination of those that have been outlined in O. Reg.
588/17 in addition to performance measures identified by the Township as worth
measuring and evaluating. The Township measures the level of service provided at
two levels: Community Levels of Service, and Technical Levels of Service.
Community Levels of Service
Community levels of service are a simple, plain language description or measure of
the service that the community receives. For core asset categories (roads, bridges
and culverts, water, wastewater, stormwater) the Province, through O. Reg.
588/17, has provided qualitative descriptions that are required to be included in
this AMP. For non-core asset categories, the Township has determined the
qualitative descriptions that will be used to determine the community level of
service provided. These descriptions can be found in the Levels of Services
subsection within each asset category.
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Technical Levels of Service
Technical levels of service are a measure of key technical attributes of the service
being provided to the community. These include mostly quantitative measures and
tend to reflect the impact of the Township's asset management strategies on the
physical condition of assets or the quality/capacity of the services they provide.
For core asset categories (roads, bridges and culverts, water, wastewater,
stormwater) the Province, through O. Reg. 588/17, has provided technical metrics
that are required.
Current and Proposed Levels of Service
The Township is focusing on measuring the current level of service provided to the
community. Once current levels of service have been measured, the Township plans
to establish proposed levels of service over a 10-year period, in accordance with O.
Reg. 588/17.
Proposed levels of service should be realistic and achievable within the timeframe
outlined by the Township. They should also be determined with consideration of a
variety of community expectations, fiscal capacity, regulatory requirements,
corporate goals and long-term sustainability. Once proposed levels of service have
been established, and prior to July 2025, the Township must identify a lifecycle
management and financial strategy which allows these targets to be achieved.
1.5
Climate Change
Climate change can cause severe impacts on human and natural systems around
the world. The effects of climate change include increasing temperatures, higher
levels of precipitation, droughts, and extreme weather events. In 2019, Canada's
Changing Climate Report (CCCR 2019) was released by Environment and Climate
Change Canada (ECCC).
The report revealed that between 1948 and 2016, the average temperature
increase across Canada was 1.7°C; moreover, during this time, Northern Canada
experienced a 2.3°C increase. The temperature increase in Canada has doubled
that of the global average. If emissions are not significantly reduced, the
temperature could increase by 6.3°C in Canada by the year 2100 compared to 2005
levels. Observed precipitation changes in Canada include an increase of
approximately 20% between 1948 and 2012.
By the late 21st century, the projected increase could reach an additional 24%.
During the summer months, some regions in Southern Canada are expected to
experience periods of drought at a higher rate. Extreme weather events and climate
conditions are more common across Canada. Recorded events include droughts,
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flooding, cold extremes, warm extremes, wildfires, and record minimum arctic sea
ice extent.
The changing climate poses a significant risk to the Canadian economy, society,
environment, and infrastructure. The impacts on infrastructure are often a result of
climate-related extremes such as droughts, floods, higher frequency of freeze-thaw
cycles, extended periods of high temperatures, high winds, and wildfires. Physical
infrastructure is vulnerable to damage and increased wear when exposed to these
extreme events and climate variabilities. Canadian Municipalities are faced with the
responsibility to protect their local economy, citizens, environment, and physical
assets.
1.5.1 Machin Climate Profile
The Township of Machin is in Eastern Ontario in the Kenora District west of Dryden.
The Township is expected to experience notable effects of climate change which
include higher average annual temperatures, an increase in total annual
precipitation, and an increase in the frequency and severity of extreme events.
According to Climatedata.ca - a collaboration supported by Environment and
Climate Change Canada (ECCC) - the Township of Machin may experience the
following trends:
Higher Average Annual Temperature:
-
Between the years 1981 and 2010 the annual average temperature was 2.8
ºC
-
Under a high emissions scenario, the annual average temperatures are
projected to increase by 1.8 ºC by the year 2050 and over 5.5 ºC by the end
of the century.
Increase in Total Annual Precipitation:
-
Under a high emissions scenario, Machin is projected to experience an 6%
increase in precipitation by the year 2050 and a 12% increase by the end of
the century.
Increase in Frequency of Extreme Weather Events:
-
It is expected that the frequency and severity of extreme weather events will
change.
1.5.2 Integration Climate change and Asset Management
Asset management practices aim to deliver sustainable service delivery - the
delivery of services to residents today without compromising the services and well-
being of future residents. Climate change threatens sustainable service delivery by
reducing the useful life of an asset and increasing the risk of asset failure. Desired
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levels of service can be more difficult to achieve because of climate change impacts
such as flooding, high heat, drought, and more frequent and intense storms.
To achieve the sustainable delivery of services, climate change considerations
should be incorporated into asset management practices. The integration of asset
management and climate change adaptation observes industry best practices and
enables the development of a holistic approach to risk management.
1.6
Ontario Regulation 588/17
As part of the Infrastructure for Jobs and Prosperity Act, 2015, the Ontario
government introduced Regulation 588/17 - Asset Management Planning for
Municipal Infrastructure (O. Reg 588/17). Along with creating better performing
organizations, more liveable and sustainable communities, the regulation is a key,
mandated driver of asset management planning and reporting. It places substantial
emphasis on current and proposed levels of service and the lifecycle costs incurred
in delivering them.
The diagram below outlines key reporting requirements under O. Reg 588/17 and
the associated timelines.
Strategic Asset Management
Policy
Asset Management Plan for Core
Assets with the following
components:
1. Current levels of service
2. Inventory analysis
3. Lifecycle activities to
sustain LOS
4. Cost of lifecycle activities
5. Population and employment
forecasts
6. Discussion of growth
impacts
Asset Management Plan for All
Assets with the following
additional components:
1. Proposed levels of service
for next 10 years
2. Updated inventory analysis
3. Lifecycle management
strategy
4. Financial strategy and
addressing shortfalls
5. Discussion of how growth
assumptions impacted
lifecycle and financial
Asset Management Plan for Core and
Non-Core Assets (same components
as 2022) and Asset Management
Policy Update
2019
2024
2022
2025
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1.6.1 O. Reg. 588/17 Compliance Review
The following table identifies the requirements outlined in Ontario Regulation
588/17 for municipalities to meet by July 1, 2024. Next to each requirement a page
or section reference is included in addition to any necessary commentary.
Requirement
O. Reg.
Section
AMP
Section
Reference
Status
Summary of assets in each
category
S.5(2), 3(i)
4 - 11
Complete
Replacement cost of assets in
each category
S.5(2), 3(ii)
4 - 11
Complete
Average age of assets in each
category
S.5(2), 3(iii)
4 - 11
Complete
Condition of core assets in each
category
S.5(2), 3(iv)
4 - 11
Complete
Description of municipality's
approach to assessing the
condition of assets in each
category
S.5(2), 3(v)
4 - 11
Complete
Current levels of service in each
category
S.5(2), 1(i-ii)
4 - 11
Complete
for Core
Assets Only
Current performance measures in
each category
S.5(2), 2
4 - 11
Complete
for Core
Assets Only
Lifecycle activities needed to
maintain current levels of service
for 10 years
S.5(2), 4
4 - 11
Complete
Costs of providing lifecycle
activities for 10 years
S.5(2), 4
Appendix B
Complete
Growth assumptions
S.5(2), 5(i-ii)
S.5(2), 6(i-vi)
12
Complete
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2 Scope and Methodology
2.1
Key Insights
-
Machin has 7 different asset categories with a replacement cost of $141
million
-
The source and recency of replacement costs impacts the accuracy and
reliability of asset portfolio valuation
-
Accurate and reliable condition data helps to prevent premature and costly
rehabilitation or replacement and that lifecycle activities occur at the right
time to maximize asset value and useful life
2.2
Asset Categories
To ensure compliance with Ontario Regulation 588/17 the July 2022 deadline under
the regulation requires analysis of only core assets (roads, bridges and culverts,
water, wastewater, and stormwater). Where the July 2025 requires analysis of all
other assets.
The state of the infrastructure for the Township's asset portfolio listed below. For
core infrastructure each category section establishes current levels of service and
the associated technical and customer oriented key performance indicators (KPIs),
outlines lifecycle strategies for optimal asset management and performance, and
provides financial strategies to reach sustainability for the core asset categories.
Asset Category
Source of Funding
Road Network
Tax Levy
Bridges & Culverts
Buildings
Vehicles
Machinery & Equipment
Land Improvements
Water Network
User Rates
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2.3
Deriving Replacement Costs
There are a range of methods to determine the replacement cost of an asset, and
some are more accurate and reliable than others. The two methodologies are:
-
User-Defined Cost and Cost/Unit: Based on costs provided by municipal
staff which could include average costs from recent contracts; data from
engineering reports and assessments; staff estimates based on knowledge
and experience
-
Cost Inflation/CPI Tables: Historical cost of the asset is inflated based on
Consumer Price Index or Non-Residential Building Construction Price Index
User-defined costs based on reliable sources are an accurate and reliable way to
determine asset replacement costs. Cost inflation is typically used in the absence of
reliable replacement cost data. It is a reliable method for recently purchased and/or
constructed assets where the total cost is reflective of the actual costs that the
Township incurred. As assets age, and new products and technologies become
available, cost inflation becomes a less reliable method.
2.4
Estimated Useful Life and Service Life Remaining
The estimated useful life (EUL) of an asset is the period over which the Township
expects the asset to be available for use and remain in service before requiring
replacement or disposal. The EUL for each asset was assigned according to the
knowledge and expertise of municipal staff and supplemented by existing industry
standards when necessary.
Using an asset's in-service date and its EUL, the Township can determine the
service life remaining (SLR) for each asset. Using condition data and the asset's
SLR, the Township can more accurately forecast when it will require replacement.
The SLR is calculated as follows:
𝑆𝑒𝑟𝑣𝑖𝑐𝑒 𝐿𝑖𝑓𝑒 𝑅𝑒𝑚𝑎𝑖𝑛𝑖𝑛𝑔 (𝑆𝐿𝑅) = 𝐼𝑛 𝑆𝑒𝑟𝑣𝑖𝑐𝑒 𝐷𝑎𝑡𝑒+ 𝐸𝑠𝑡𝑖𝑚𝑎𝑡𝑒𝑑 𝑈𝑠𝑒𝑓𝑢𝑙 𝐿𝑖𝑓𝑒(𝐸𝑈𝐿) −𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑌𝑒𝑎𝑟
2.5
Reinvestment Rate
As assets age and deteriorate they require additional investment to maintain a
state of good repair. The reinvestment of capital funds, through asset renewal or
replacement, is necessary to sustain an adequate level of service. The reinvestment
rate is a measurement of available or required funding relative to the total
replacement cost. By comparing the actual vs. target reinvestment rate the
Township can determine the extent of any existing funding gap.
12
The reinvestment rate is calculated as follows:
𝑇𝑎𝑟𝑔𝑒𝑡 𝑅𝑒𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑅𝑎𝑡𝑒= 𝐴𝑛𝑛𝑢𝑎𝑙 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝑅𝑒𝑞𝑢𝑖𝑟𝑒𝑚𝑒𝑛𝑡
𝑇𝑜𝑡𝑎𝑙 𝑅𝑒𝑝𝑙𝑎𝑐𝑒𝑚𝑒𝑛𝑡 𝐶𝑜𝑠𝑡
𝐴𝑐𝑡𝑢𝑎𝑙 𝑅𝑒𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑅𝑎𝑡𝑒= 𝐴𝑛𝑛𝑢𝑎𝑙 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐹𝑢𝑛𝑑𝑖𝑛𝑔
𝑇𝑜𝑡𝑎𝑙 𝑅𝑒𝑝𝑙𝑎𝑐𝑒𝑚𝑒𝑛𝑡 𝐶𝑜𝑠𝑡
2.6
Deriving Asset Condition
An incomplete or limited understanding of asset condition can mislead long-term
planning and decision-making. Accurate and reliable condition data helps to prevent
premature and costly rehabilitation or replacement and ensures that lifecycle
activities occur at the right time to maximize asset value and useful life.
A condition assessment rating system provides a standardized descriptive
framework that allows comparative benchmarking across the Township's asset
portfolio. The table below outlines the condition rating system used to determine
asset condition. This rating system is aligned with the Canadian Core Public
Infrastructure Survey which is used to develop the Canadian Infrastructure Report
Card.
Condition
Description
Criteria
Service Life
Remaining (%)
Very Good
Fit for the
future
Well maintained, good condition,
new or recently rehabilitated
80-100
Good
Adequate for
now
Acceptable, generally
approaching mid-stage of
expected service life
60-80
Fair
Requires
attention
Signs of deterioration, some
elements exhibit significant
deficiencies
40-60
Poor
Increasing
potential of
affecting
service
Approaching end of service life,
condition below standard, large
portion of system exhibits
significant deterioration
20-40
Very Poor
Unfit for
sustained
service
Near or beyond expected service
life, widespread signs of
advanced deterioration, some
assets may be unusable
0-20
The analysis is based on assessed condition data only as available. In the absence
of assessed condition data, asset age is used as a proxy to determine asset
condition. Appendix E includes additional information on the role of asset condition
data and provides basic guidelines for the development of a condition assessment
program.
13
3 Portfolio Overview
3.1
Key Insights
-
The total replacement cost of the Township's asset portfolio is $141 million
-
The Township's target re-investment rate is 3.5%, and the actual re-
investment rate is 1.3%, contributing to an expanding infrastructure deficit
-
54% of all assets are in fair or better condition
-
54% of assets are projected to require rehabilitation / replacement in the
next 10 years
-
Average annual capital requirements total $1.45 million per year across all
assets
3.2
Total Replacement Cost of Asset Portfolio
The asset categories have a total replacement cost of $41.3 million based on
inventory data from 2024. This total was determined based on a combination of
user-defined costs and historical cost inflation. This estimate reflects replacement of
historical assets with similar, not necessarily identical, assets available for
procurement today.
3.3
Target vs. Actual Reinvestment Rate
The graph below depicts funding gaps or surpluses by comparing target vs actual
reinvestment rates. To meet the long-term replacement needs, the Township
should be allocating approximately $1.45 million annually, for a target reinvestment
0
10
20
30
40
50
60
70
Water Network
Buildings
Roads Network
Bridges & Culverts
Machinery & Equipment
Land Improvements
Vehicles
Total Replacement Cost
$141M
Millons
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rate of 3.5%. Actual annual spending on infrastructure totals approximately
$541,335 for an actual reinvestment rate of 1.3%.
3.4
Condition of Asset Portfolio
The current condition of the assets is central to all asset management planning.
Collectively, 54% of assets in Machin are in fair or better condition. This estimate
relies on both age-based and field condition data.
Assessed condition data is available for 24% of assets; for the remaining portfolio,
age is used as an approximation of condition. Assessed condition data is invaluable
in asset management planning as it reflects the true condition of the asset and its
ability to perform its functions. The table below identifies the source of condition
data.
Asset Category
% of Assets with
Assessed Condition Source of Condition Data
Bridges & Culverts
78% Assessed
2021 OSIM Report
Road Network
84% Assessed
2007 Road Study
15
All other Categories
100% Age-based
None
3.5
Service Life Remaining
Based on asset age, available assessed condition data and estimated useful life,
56% of the Township's assets will require rehabilitation or replacement within the
next 10 years. Capital requirements over the next 10 years are identified in
Appendix B.
3.6
Forecasted Capital Requirements
The development of a long-term capital forecast should include both asset
rehabilitation and replacement requirements. With the development of asset-
specific lifecycle strategies that include the timing and cost of future capital events,
the Township can produce an accurate long-term capital forecast.
The following graph identifies capital requirements over the next 120 years. This
projection is used as it ensures that every asset has gone through one full iteration
of replacement. The forecasted requirements are aggregated into 10-year
groupings and the trend line represents the average 10-year capital requirements.
16
3.7
Risk & Criticality
The Township has noted key trends, challenges, and risks to service delivery that
they are currently facing:
Organizational Capacity and Cognizance
Both short- and long-term planning requires the regular collection of
infrastructure data to support asset management decision-making.
Staff find it a continuous challenge to dedicate resources and time
towards data collection and condition assessments to ensure that
asset condition and asset attribute data is regularly reviewed and
updated.
Lifecycle Management Strategies
The current lifecycle management strategy for all asset categories is
considered more reactive than proactive. It is a challenge to find the
right balance between maintenance, capital rehabilitation, and the
replacement of assets. Staff hope to develop better defined
strategies that will extend asset lifecycles and result in a lower total
cost to the Town. These strategies will require sustainable annual
funding to minimize the deferral of capital works
Asset Data & Information
There is a lack of confidence in the available inventory data and
condition data. Staff find it a continuous challenge to dedicate
resources and time towards data collection and condition
assessments to ensure that condition and asset attribute data is
regularly reviewed and updated.
17
4 Road Network
4.1
Key Insights
The road network is a critical component of the provision of safe and efficient
transportation services and represents the second highest value asset category in
the Township's tax funded asset portfolio. It includes all municipally owned and
maintained roadways in addition to supporting roadside infrastructure including
streetlights.
The state of the infrastructure for the road network is summarized in the following
table.
Replacement
Cost
Condition
Financial Capacity
$ 41.9 million
Poor (22%)
Annual Requirement:
$136,100
Funding Available:
$156,980
Annual Deficit/Surplus: $(20,880)
4.2
Asset Inventory & Costs
The table below includes the quantity, total replacement cost and annual capital
requirements of each asset segment in the Township's road inventory.
Asset Segment
Quantity
Replacement
Cost
Annual Capital
Requirement
Asphalt (HCB)
6,608 m
$6,938,354
$37,291
Gravel
79,500 m
$31,800,100
$70,619
Street Lights
65
$124,255
$8,284
Surface Treatment (LCB)
6,537.5 m
$3,118,355
$19,908
Total
$41,981,064
$136,102
Each asset's replacement cost should be reviewed periodically to determine whether
adjustments are needed to more accurate represent realistic capital requirements.
0
5
10
15
20
25
30
35
Asphalt (HCB)
Surface Treatment
Total Replacement Cost
41.9 M
18
4.3
Asset Condition & Age
The table below identifies the current average condition, the average age, and the
estimated useful life for each asset segment. The average condition (%) is a
weighted value based on replacement cost.
Asset Segment
Estimated
Useful Life
(Years)
Average Age
(Years)
Average
Condition
Asphalt (HCB)
30 Years
41 Years 4 Months
82% (Very Good)
Gravel
25 Years
52 Years 4 Months
3% (Very Poor)
Street Lights
15 Years
7 Years 6 Months
87% (Very Good)
Surface Treatment
(LCB)
30 Years
56 Years 6 Months
56% (Fair)
Average
41 Years 4 Months
22% (Poor)
The graph below visually illustrates the average condition for each asset segment
on a very good to very poor.
To ensure that the Township's roads continue to provide an acceptable level of
service, the Township should monitor the average condition of all assets. If the
average condition declines, staff should re-evaluate their lifecycle management
strategy to determine what combination of maintenance, rehabilitation, and
replacement activities is required to increase the overall condition of the roads.
Each asset's estimated useful life should also be reviewed periodically to determine
whether adjustments need to be made to better align with the observed length of
service life for each asset type.
4.3.1 Current Approach to Condition Assessment
Accurate and reliable condition data allows staff to determine the remaining service
life of assets and identify the most cost-effective approach to managing assets. The
following describes the Township's current approach:
19
-
A Road assessment was completed in 2007 that included a detailed
assessment of the condition of each paved road segment and 2001 for gravel
roads.
The rating criteria is used to determine the current condition of road segments and
forecast future capital requirements is:
Condition
Rating
Very Good
80-100
Good
60-80
Fair
40-60
Poor
20-40
Very Poor
0-20
4.4
Lifecycle Management Strategy
The condition or performance of most assets will deteriorate over time. This process
is affected by a range of factors including an asset's characteristics, location,
utilization, maintenance history and environment. The following lifecycle strategies
have been developed as a proactive approach to managing the lifecycle of Township
owned roads. Instead of allowing the roads to deteriorate until replacement is
required, strategic rehabilitation is expected to extend the service life of roads at a
lower total cost.
Asphalt Roads(HCB)
Event Name
Event Class
Event Trigger
Surface Mill & Pave
Rehabilitation
60 condition
Major Rehabilitation
Rehabilitation
45 condition
Full Reconstruction
Replacement
0 condition
20
Surface Treated Roads
Event Name
Event Class
Event Trigger
Single Surface Treatment (SST)
Rehabilitation
40 condition
Double Surface Treatment (DST) Rehabilitation
30 condition
Full Reconstruction
Replacement
0 condition
The Township has developed a gravel road program that resurfaces the road with
50mm of granular A every five years.
21
4.4.1 Forecasted Capital Requirements
Based on the lifecycle strategies identified previously for roads, and assuming the
end-of-life replacement of all other assets in this category, the following graph
forecasts capital requirements for the road network.
The following graph forecasts long-term capital requirements. The annual capital
requirement represents the average amount per year that the Township should
allocate towards funding rehabilitation and replacement needs. The following graph
identifies capital requirements over the next 70 years. This projection is used as it
ensures that every asset has gone through one full iteration of replacement.
The forecasted requirements are aggregated into 10-year groupings and the trend
line represents the average 10-year capital requirements.
The projected cost of lifecycle activities that will need to be undertaken over the
next 10 years to maintain the current level of service can be found in Appendix B.
22
4.5
Risk & Criticality
The following risk matrix provides a visual representation of the relationship
between the probability of failure and the consequence of failure for the assets
within this asset category based on 2024 inventory data. See Appendix D for the
criteria used to determine the risk rating of each asset.
This is a high-level model developed by Township staff and it should be reviewed
and adjusted to reflect an evolving understanding of both the probability and
consequences of asset failure.
The asset-specific attributes that municipal staff utilize to define and prioritize the
criticality of the road network are documented below:
Probability of Failure (POF)
Consequence of Failure (COF)
Condition (Structural)
Replacement Cost (Economic)
Service Life Remaining (Functional)
Traffic Counts (Operational 50%)
Surface Type (Operational 50%)
The identification of critical assets allows the Township to determine appropriate
risk mitigation strategies and treatment options. Risk mitigation may include asset-
specific lifecycle strategies, condition assessment strategies, or simply the need to
collect better asset data.
4.6
Levels of Service
The following tables identify the Township's current level of service for the roads.
23
Cost
Performance
(Average Condition)
Risk
These metrics include the technical and community level of service metrics that are
required as part of O. Reg. 588/17 as well as any additional performance measures
that the Township has selected.
4.6.1 Community Levels of Service
The following table outlines the qualitative descriptions that determine the
community levels of service provided by the road network.
Service
Attribute
Qualitative Description
Current LOS (2024)
Scope
Description, which may
include maps, of the road
network in the municipality
and its level of connectivity
Machin is a divided Township that is
connected by Highway 17. The land
between the east and west portions of
Machin is called Kenora Unmanaged
See Appendix C
Quality
Description or images that
illustrate the different levels
of road class pavement
condition
The Township staff provide surface
condition with a rating as follows:
0 - 20 Very Poor
20 - 40 Poor
40 - 60 Fair
60 - 80 Good
80 - 100 Very Good
4.6.2 Technical Levels of Service
The following table outlines the quantitative metrics that determine the technical
level of service provided by the road network.
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
Average Annual
Capital Funding
Average Annual
Capital
Requirements
13%
6%
7%
38%
36%
48%
22%
5%
12%
13%
Very Poor
Poor
Fair
Good
Very Good
24
Service
Attribute
Technical Metric
Current LOS
(2024)
Scope
Lane-km of arterial roads (MMS classes 1 and 2)
per land area (km/km2)
0
Lane-km of collector roads (MMS classes 3 and
4) per land area (km/km2)
0
Lane-km of local roads (MMS classes 5 and 6)
per land area (km/km2)
0.32
Quality
Average pavement condition index for paved
roads in the municipality
Asphalt = 82
Surface
Treatment = 56
Average surface condition for unpaved roads in
the municipality (e.g. excellent, good, fair, poor)
Poor
25
4.7
Recommendations
Condition Assessment Strategies
-
The roads condition assessment program needs to be updated and all roads
need to be re-assessed
Risk Management Strategies
-
Implement risk-based decision-making as part of asset management
planning and budgeting processes. This should include the regular review of
high-risk assets to determine appropriate risk mitigation strategies.
-
Review risk models on a regular basis and adjust according to an evolving
understanding of the probability and consequences of asset failure.
Levels of Service
-
Continue to measure current levels of service in accordance with the metrics
identified in O. Reg. 588/17 and those metrics that the Township believes to
provide meaningful and reliable inputs into asset management planning.
-
Work towards identifying proposed levels of service as per O. Reg. 588/17
and identify the strategies that are required to close any gaps between
current and proposed levels of service.
26
5 Bridges & Culverts
5.1
Key Insights
Bridges and culverts represent a critical portion of the transportation services
provided to the community. The roads department is responsible for the
maintenance of all bridges and culverts located across municipal roads. The state of
the infrastructure for bridges and culverts is summarized in the following table.
Replacement
Cost
Condition
Financial Capacity
$14.2 million
Fair (58%)
Annual
Requirement:
$87,240
Funding Available:
$19,060
Annual Deficit:
$68,180
5.2
Asset Inventory & Costs
The table below includes the quantity, total replacement cost and annual capital
requirements of each asset segment in the Township's bridges and culverts
inventory.
Asset
Segment
Quantity
Replacement Cost
Annual Capital
Requirement
Bridges
4
$13,344,334
$55,841
Culverts
156
$945,859,
$31,395
Total
$14,290,193
$87,237
Each asset's replacement cost should be reviewed periodically to determine whether
adjustments are needed to more accurate represent realistic capital requirements.
5.3
Asset Condition & Age
The table below identifies the current average condition, the average age, and the
estimated useful life for each asset segment. The average condition (%) is a
weighted value based on replacement cost.
Asset Segment
Estimated Useful
Life (Years)
Average Age
(Years)
Average
Condition
Bridges
60
59.25
68% (Good)
Culverts
30
49.83
25% (Poor)
Average
50.08
58% (Fair)
27
The graph below visually illustrates the average condition for each asset segment
on a very good to very poor scale.
To ensure that the Township's bridges & culverts continue to provide an acceptable
level of service, the staff should monitor the average condition of all assets. If the
average condition declines, the Township should re-evaluate their lifecycle
management strategy to determine what combination of maintenance,
rehabilitation, and replacement activities is required to increase the overall
condition of the bridges and culverts.
Each asset's Estimated Useful Life should also be reviewed periodically to determine
whether adjustments need to be made to better align with the observed length of
service life for each asset type.
5.3.1 Current Approach to Condition Assessment
Accurate and reliable condition data allows staff to determine the remaining service
life of assets and identify the most cost-effective approach to managing assets. The
following describes the Township's current approach:
-
Condition assessments of all bridges and culverts with a span greater than or
equal to 3 meters are completed every 2 years in accordance with the
Ontario Structure Inspection Manual (OSIM)
5.4
Lifecycle Management Strategy
The condition or performance of most assets will deteriorate over time. To ensure
that municipal assets are performing as expected and meeting the needs of
customers, it is important to establish a lifecycle management strategy to
proactively manage asset deterioration. The following table outlines the Township's
current lifecycle management strategy.
Activity Type
Description of Current Strategy
Maintenance,
Rehabilitation and
Replacement
All lifecycle activities are driven by the results of mandated
structural inspections competed according to the OSIM
Inspection
The most recent inspection report was completed in 2024 by
JML Engineering
28
5.4.1 Forecasted Capital Requirements
The following graph forecasts long-term capital requirements. The annual capital
requirement represents the average amount per year that the Township should
allocate towards funding rehabilitation and replacement needs. The following graph
identifies capital requirements over the next 35 years. This projection is used as it
ensures that every asset has gone through one full iteration of replacement. The
forecasted requirements are aggregated into 5-year groupings and the trend line
represents the average 5-year capital requirements.
The projected cost of lifecycle activities that will need to be undertaken over the
next 10 years to maintain the current level of service can be found in Appendix B.
5.5
Risk & Criticality
The risk matrix provides a visual representation of the relationship between the
probability of failure and the consequence of failure for the assets within this asset
category based on 2024 inventory data. See Appendix D for the criteria used to
determine the risk rating of each asset.
29
This is a high-level model developed by Township staff should review and adjust the
risk model to reflect an evolving understanding of both the probability and
consequences of asset failure.
The asset-specific attributes that municipal staff utilize to define and prioritize the
criticality of bridges are documented below:
Probability of Failure (POF)
Consequence of Failure (COF)
Condition
Replacement Cost (Economic)
Service Life Remaining
Capacity - Load Limit (Operational 50%)
Detour Length (Operational 50%)
And for culverts:
Probability of Failure (POF)
Consequence of Failure (COF)
Condition
Replacement Cost (Economic)
Service Life Remaining
Traffic Counts (Operational 50%)
Diameter (Operational 50%)
The identification of critical assets allows the Township to determine risk mitigation
strategies and treatment options. Risk mitigation may include asset-specific
lifecycle strategies, condition assessment strategies, or simply the need to collect
better asset data.
30
5.6
Levels of Service
The following tables identify the Township's current level of service for bridges and
culverts.
Cost
Performance
(Average Condition)
Risk
The metrics included below are the technical and community level of service metrics
that are required as part of O. Reg. 588/17 as well as any additional performance
measures that the Township has selected.
5.6.1 Community Levels of Service
The following table outlines the qualitative descriptions that determine the
community levels of service provided by bridges and culverts.
Service
Attribute Qualitative Description Current LOS (2024)
Scope
Description of the traffic
that is supported by
municipal bridges (e.g.
heavy transport vehicles,
motor vehicles,
emergency vehicles,
pedestrians, cyclists)
Bridges and structural culverts are a key
component of the municipal transportation
network. None of the Town's structures
have loading or dimensional restrictions
meaning that most types of vehicles,
including heavy transport, emergency
vehicles, and cyclists can cross them
without restriction.
Quality
Description or images of
the condition of bridges
and culverts and how
this would affect use of
the bridges and culverts
See Appendix C
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
Average Annual
Capital Funding
Average Annual
Capital
Requirements
4%
35%
27%
35%
16%
0%
0%
81%
3%
Very Poor
Poor
Fair
Good
Very Good
31
5.6.2 Technical Levels of Service
The following table outlines the quantitative metrics that determine the technical
level of service provided by bridges and culverts.
Service
Attribute
Technical Metric
Current
LOS (2024)
Scope
% of bridges in the Town with loading or dimensional
restrictions
0%
Quality
Average bridge condition index value for bridges in the
Town
68
Average bridge condition index value for structural
culverts in the Town
None
5.7
Recommendations
Data Review/Validation
-
Continue to review and validate inventory data, assessed condition data and
replacement costs for all bridges and structural culverts upon the completion
of OSIM inspections every 2 years.
Risk Management Strategies
-
Implement risk-based decision-making as part of asset management
planning and budgeting processes. This should include the regular review of
high-risk assets to determine appropriate risk mitigation strategies.
-
Review risk models on a regular basis and adjust according to an evolving
understanding of the probability and consequences of asset failure.
Lifecycle Management Strategies
-
The Township should work towards identifying projected capital rehabilitation
and renewal costs for bridges and culverts and integrating these costs into
long-term planning.
Levels of Service
-
Continue to measure current levels of service in accordance with the metrics
identified in O. Reg. 588/17 and those metrics that the Township believe to
provide meaningful and reliable inputs into asset management planning.
-
Work towards identifying proposed levels of service as per O. Reg. 588/17
and identify the strategies that are required to close any gaps between
current and proposed levels of service.
32
6 Buildings
6.1
Key Insights
The Township of Machin owns and maintains several facilities and recreation centres
that provide key services to the community. These include:
-
administrative offices
-
medical clinics
-
senior centres
-
fire stations
-
arena and recreation centres
The state of the infrastructure for the buildings and facilities is summarized in the
following table.
Replacement
Cost
Condition
Financial Capacity
$26.6 million
Poor (37%)
Annual
Requirement:
$250,580
Funding Available:
$54,740
Annual Deficit:
$195,840
6.2
Asset Inventory & Costs
The table below includes the quantity, total replacement cost and annual capital
requirements of each asset segment in the Township's buildings inventory.
Asset Segment
Quantity
Replacement
Cost
Annual Capital
Requirement
Environmental
3
$20,817
$1,140
Fire
3
$7,156,413
$23,845
General Government
3
$2,324,433
$20,740
Health
2
$4,101,102
$15,133
Recreation
12
$5,871,469
$178,906
Transportation
5
$7,155,259
$10,819
Total
$26,629,493
$250,582
Each asset's replacement cost should be reviewed periodically to determine whether
adjustments are needed to more accurate represent realistic capital requirements.
33
6.3
Asset Condition & Age
The table below identifies the current average condition, the average age, and the
estimated useful life for each asset segment. The average condition (%) is a
weighted value based on replacement cost.
Asset Segment
Estimated
Useful Life
(Years)
Average Age
(Years)
Average
Condition
Environmental
20 - 25 Years
28 Years 6 Months
29% (Poor)
Fire
25 - 40 Years
48 Years 6 Months
0% (Very Poor)
General Government
25 - 40 Years
43 Years
14% (Very Poor)
Health
40 Years
30 Years 6 Months
65% (Good)
Recreation
20 - 40 Years
20 Years
46% (Fair)
Transportation
20 - 40 Years
54 Years 6 Months
0% (Very Poor)
Average
31 Years 1 Month
75% (Good)
The graph below visually illustrates the average condition for each asset segment
on a very good to very poor.
0
1
2
3
4
5
6
7
8
Fire
Transportation
Recreation
Health
General Government
Enviroment
Chart Total Replacement Cost
26.6 M
34
To ensure that the Township's buildings provide an acceptable level of service, the
Township should monitor the average condition of all assets. If the average
condition declines, staff should re-evaluate their lifecycle management strategy to
determine what combination of maintenance, rehabilitation and replacement
activities is required to increase the overall condition of the buildings and facilities.
Each asset's estimated useful life should also be reviewed periodically to determine
whether adjustments need to be made to better align with the observed length of
service life for each asset type.
6.3.1 Current Approach to Condition Assessment
Accurate and reliable condition data allows staff to determine the remaining service
life of assets and identify the most cost-effective approach to managing assets. The
Township's current approach is staff identify deficiencies, repairs and replacements
needed.
6.4
Lifecycle Management Strategy
To ensure that municipal assets are performing as expected and meeting the needs
of customers, it is important to establish a lifecycle management strategy to
proactively manage asset deterioration. The following table outlines the Township's
current lifecycle management strategy.
Activity Type
Description of Current Strategy
Maintenance /
Rehabilitation
The maintenance of buildings is dealt with on a case-by-case
emergency basis
Replacement
As a supplement to the knowledge and expertise of municipal
staff the Township regularly works with contractors
6.4.1 Forecasted Capital Requirements
The annual capital requirement represents the average amount per year that the
Township should allocate towards funding rehabilitation and replacement needs.
The following graph identifies capital requirements over the next 45 years. This
projection is used as it ensures that every asset has gone through one full iteration
35
of replacement. The forecasted requirements are aggregated into 5-years and the
trend line represents the average 5-year capital requirements.
The projected cost of lifecycle activities that will need to be undertaken over the
next 10 years to maintain the current level of service can be found in Appendix B.
6.5
Risk & Criticality
The risk matrix provides a visual representation of the relationship between the
probability of failure and the consequence of failure for the assets within this asset
category based on 2024 inventory data. See Appendix D for the criteria used to
determine the risk rating of each asset.
This is a high-level model developed by Township staff and should be reviewed and
adjusted to reflect an evolving understanding of both the probability and
consequences of asset failure.
The identification of critical assets allows the Township to determine risk mitigation
strategies and treatment options. Risk mitigation may include asset-specific
36
lifecycle strategies, condition assessment strategies, or simply the need to collect
better asset data.
6.6
Levels of Service
Buildings are considered a non-core asset category and as such, the Township has
until July 1, 2024, to determine the qualitative descriptions and technical metrics
that measure the current level of service provided.
37
The following tables identify the Township's current level of service for the building
assets.
Cost
Performance
(Average Condition)
Risk
6.7
Recommendations
Asset Inventory
-
The Township's asset inventory contains a single record for some facilities.
Facilities consist of several separate capital components that have unique
estimated useful lives and require asset-specific lifecycle strategies. Staff
should work towards a component-based inventory of all facilities to allow for
component-based lifecycle planning and inventory consistency.
Condition Assessment Strategies
-
The Township should implement regular condition assessments for all
facilities to better inform short- and long-term capital requirements.
Risk Management Strategies
-
Implement risk-based decision-making as part of asset management
planning and budgeting processes. This should include the regular review of
high-risk assets to determine appropriate risk mitigation strategies.
Levels of Service
-
The Township should develop metrics that are determined to provide
meaningful and reliable inputs into asset management planning and begin
measuring them to meet the July 1, 2024, regulation deadline.
0
50,000
100,000
150,000
200,000
250,000
300,000
Average Annual
Capital Funding
Average Annual
Capital
Requirements
7%
12%
12%
69%
27%
35%
9%
11%
19%
Very Poor
Poor
Fair
Good
Very Good
38
7 Vehicles
7.1
Key Insights
Vehicles allow staff to efficiently deliver municipal services and personnel. Municipal
vehicles are used to support several service areas, including:
-
tandem axle trucks for winter control activities
-
fire rescue vehicles to provide emergency services
-
waste collection vehicles to provide environmental services
-
pick-up trucks to support the maintenance of all departments
The state of the infrastructure for the vehicles is summarized in the following table.
Replacement
Cost
Condition
Financial Capacity
$1.3 million
Good (75%)
Annual
Requirement:
$78,525
Funding Available:
$17,150
Annual Deficit:
$61,375
7.2
Asset Inventory & Costs
The table below includes the quantity, total replacement cost and annual capital
requirements of each asset segment in the Township's vehicle inventory.
Asset Segment
Quantity
Replacement Cost
Annual Capital
Requirement
Fire
5
$757,817
$33,212
General Government
1
$31,162
$2,597
Transportation
9
$526,588
$42,716
Total
$1,315,567
$78,525
Each asset's replacement cost should be reviewed periodically to determine whether
adjustments are needed to more accurate represent realistic capital requirements.
39
7.3
Asset Condition & Age
The table below identifies the current average condition, the average age, and the
estimated useful life for each asset segment. The average condition (%) is a
weighted value based on replacement cost.
Asset Segment
Estimated
Useful Life
Average Age
Average
Condition
Fire
15 - 25 Years
15 Years 1 Month
72% (Good)
General
Government
12 Years
4 Years 6 Months
93% (Very Good)
Transportation
8 - 15 Years
8 Years 8 Months
78% (Good)
Average:
10 Years 7 Months
68% (Good)
The graph below visually illustrates the average condition for each asset segment
on a very good to very poor scale.
To ensure that the Township's vehicles continue to provide an acceptable level of
service, the Township should monitor the average condition of all assets. If the
average condition declines, staff should re-evaluate their lifecycle management
strategy to determine what combination of maintenance, rehabilitation and
replacement activities is required to increase the overall condition of the vehicles.
Each asset's estimated useful life should also be reviewed periodically to determine
whether adjustments need to be made to better align with the observed length of
service life for each asset type.
7.3.1 Current Approach to Condition Assessment
Accurate and reliable condition data allows staff to determine the remaining service
life of assets and identify the most cost-effective approach to managing assets. The
Township's current approach relies on staff completing regular visual inspections of
vehicles to ensure they are in state of adequate repair prior to operation. The
rating criteria used to determine the current condition and forecast future capital
requirements is consistent with all other asset categories at 0 - 100.
40
7.4
Lifecycle Management Strategy
The condition or performance of assets will deteriorate over time. To ensure that
municipal vehicles are performing as expected and meeting the needs of
customers, it is important to establish a lifecycle management strategy to
proactively manage asset deterioration.
The following table outlines the Township's current lifecycle management strategy.
Activity
Type
Description of Current Strategy
Maintenance /
Rehabilitation
Visual inspections completed and documented daily
Every 4-7000km includes an inspection and oil change
Annual CVOR annual inspection by a licensed mechanic
Replacement
Vehicle replacements are based on age, kilometres and annual
repair costs are taken into consideration when determining
appropriate treatment options
7.4.1 Forecasted Capital Requirements
The annual capital requirement represents the average amount per year that the
Township should allocate towards funding rehabilitation and replacement needs.
The following graph identifies capital requirements over the next 25 years. This
projection is used as it ensures that every asset has gone through one full iteration
of replacement. The forecasted requirements are aggregated into 5-year bins and
the trend line represents the average 5-year capital requirements.
The projected cost of lifecycle activities that will need to be undertaken over the
next 10 years to maintain the current level of service can be found in Appendix B.
41
7.5
Risk & Criticality
The risk matrix provides a visual representation of the relationship between the
probability of failure and the consequence of failure for the assets within this asset
category based on 2024 inventory data. See Appendix D for the criteria used to
determine the risk rating of each asset.
This is a high-level model developed by the Township staff and should be reviewed
and adjusted to reflect an evolving understanding of both the probability and
consequences of asset failure. The identification of critical assets allows the
Township to determine appropriate risk mitigation strategies and treatment options.
Risk mitigation may include asset-specific lifecycle strategies, condition assessment
strategies, or simply the need to collect better asset data.
7.6
Levels of Service
Vehicles are considered a non-core asset category. As such, the Township has until
July 1, 2024, to determine the qualitative descriptions and technical metrics that
measure the current level of service provided.
42
The following tables identify the Township's current level of service.
Cost
Performance
(Average Condition)
Risk
7.7
Recommendations
Condition Assessment Strategies
-
Review assets that have surpassed their estimated useful life to determine if
immediate replacement is required or whether these assets are expected to
remain in-service. Adjust the service life and/or condition ratings for these
assets accordingly.
Risk Management Strategies
-
Implement risk-based decision-making as part of asset management
planning and budgeting processes. This should include the regular review of
high-risk assets to determine appropriate risk mitigation strategies.
Levels of Service
-
The Township should develop metrics that are determined to provide
meaningful and reliable inputs into asset management planning and begin
measuring them to meet the July 1, 2024, regulation deadline.
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
Average Annual
Capital Funding
Average Annual
Capital
Requirements
26%
50%
14%
10%
10%
0%
0%
18%
72%
Very Poor
Poor
Fair
Good
Very Good
43
8 Machinery & Equipment
8.1
Key Insights
To maintain the quality stewardship of Machin's infrastructure and support the
delivery of services, Township staff own and employ various types of machinery and
equipment. This includes:
-
Computer hardware, software, and phone systems to support all Township
services
-
Landscaping equipment to maintain public parks
-
Fire equipment to support the delivery of emergency services
-
Plows and sand hoppers to provide winter control activities
-
Facility and park equipment to enable the provision of recreational services
The state of the infrastructure for the machinery and equipment is summarized in
the following table.
Replacement
Cost
Condition
Financial Capacity
$2.66 million
Poor (37%)
Annual Requirement:
$214,316
Funding Available:
$46,815
Annual Deficit:
$167,501
8.2
Asset Inventory & Costs
The table below includes the quantity, total replacement cost and annual capital
requirements of each asset segment in the Township's machinery and equipment
inventory.
Asset Segment
Quantity
Replacement
Cost
Annual Capital
Requirement
Environmental
1
$60,350
$2,012
Fire
32
$8,778,829
$74,464
General Government
12
$2,693,177
$39,410
Health
2
$4,290,636
$1,421
Recreation
13
$6,798,466
$25,201
Transportation
14
$83,557,321
$71,809
Water
1
35,194,637,
Total
$141,373,417
$214,316
44
Each asset's replacement cost should be reviewed periodically to determine whether
adjustments are needed to more accurate represent realistic capital requirements.
8.3
Asset Condition & Age
The table below identifies the current average condition and source of available
condition data for each asset segment. The average condition (%) is a weighted
value based on replacement cost.
Asset Segment
Estimated
Useful Life
Average Age
(Years)
Average
Condition
Environmental
25 Years
46 Years 6 Months
0% (Very Poor)
Fire
10 - 25 Years
16 Years
37% (Poor)
General
Government
3 - 15 Years
24 Years
0% (Very Poor)
Health
10 Years
5 Years
87% (Very Good)
Recreation
10 -15 Years
14 Years 7 Months
40% (Fair)
Transportation
15 - 20 Years
22 Years 9 Months
46% (Fair)
Average:
19 Years 1 Month
37% (Poor)
The graph below visually illustrates the average condition for each asset segment
on a very good to very poor scale.
0
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
Transportation
Water
Fire
Recreation
Health
General Governement
Environment
Total Replacement Cost
141.3
45
To ensure that the Township's machinery and equipment continues to provide an
acceptable level of service, the Township should continue to monitor the average
condition. If the average condition declines, staff should re-evaluate their lifecycle
management strategy to determine what combination of maintenance,
rehabilitation and replacement activities is required to increase the overall
condition.
Each asset's estimated useful life should also be reviewed periodically to determine
whether adjustments need to be made to better align with the observed length of
service life for each asset type.
8.3.1 Current Approach to Condition Assessment
Accurate and reliable condition data allows staff to determine the remaining service
life of assets and identify the most cost-effective approach to managing assets. The
following describes the Township's current approach:
-
Staff complete regular visual inspections of machinery and equipment to
ensure they are in state of adequate repair
-
The broad range of types of equipment included in this category, there are
some types with very established assessments (i.e. Fire Equipment) but also
many don't have any assessment procedures
Th rating criteria used to determine the current condition and forecast future capital
requirements is consistent throughout all asset categories with a scale of 0 - 100.
8.4
Lifecycle Management Strategy
The condition or performance of most assets will deteriorate over time. To ensure
that municipal assets are performing as expected and meeting the needs of
customers, it is important to establish a lifecycle management strategy to
proactively manage asset deterioration. The following table outlines the Township's
current lifecycle management strategy.
Activity Type
Description of Current Strategy
Maintenance/
Rehabilitation
Maintenance program varies by department
Fire Protection Services equipment is subject to a much more
rigorous inspection and maintenance program compared to
most other departments
Machinery and equipment is maintained according to
manufacturer recommended actions and supplemented by the
expertise of municipal staff
Replacement
The replacement of machinery and equipment depends on
deficiencies identified by operators that may impact their ability
to complete required tasks
46
8.4.1 Forecasted Capital Requirements
The following graph identifies capital requirements over the next 45 years. This
projection is used as it ensures that every asset has gone through one full iteration
of replacement. The forecasted requirements are aggregated into 5-year bins and
the trend line represents the average 5-year capital requirements.
The projected cost of lifecycle activities that will need to be undertaken over the
next 10 years to maintain the current level of service can be found in Appendix B.
8.5
Risk & Criticality
The risk matrix provides a visual representation of the relationship between the
probability of failure and the consequence of failure for the assets within this asset
category based on 2024 inventory data. See Appendix D for the criteria used to
determine the risk rating of each asset.
47
This is a high-level model developed by Township staff and should be reviewed and
adjusted to reflect an evolving understanding of both the probability and
consequences of asset failure.
The identification of critical assets allows the Township to determine appropriate
risk mitigation strategies and treatment options. Risk mitigation may include asset-
specific lifecycle strategies, condition assessment strategies, or simply the need to
collect better asset data.
8.6
Levels of Service
Machinery and equipment are considered a non-core asset category. As such, the
Township has until July 1, 2024, to determine the qualitative descriptions and
technical metrics that measure the current level of service provided.
The following table identifies the Township's general level of service.
Cost
Performance
(Average Condition)
Risk
0
50,000
100,000
150,000
200,000
250,000
Average Annual
Capital Funding
Average Annual
Capital
Requirements
18%
14%
2%
11%
56%
53%
0%
16%
0%
31%
Very Poor
Poor
Fair
Good
Very Good
48
8.7
Recommendations
Replacement Costs
-
All replacement costs are based on the inflation of historical cost. These costs
should be evaluated to determine their accuracy and reliability. Replacement
costs should be updated according to the best available information on the
cost to replace the asset in today's value.
Condition Assessment Strategies
-
Review assets that have surpassed their estimated useful life to determine if
immediate replacement is required or whether these assets are expected to
remain in-service. Adjust the service life and/or condition ratings for these
assets accordingly.
Risk Management Strategies
-
Implement risk-based decision-making as part of asset management
planning and budgeting processes. This should include the regular review of
high-risk assets to determine appropriate risk mitigation strategies.
Levels of Service
-
The Township should develop metrics that are determined to provide
meaningful and reliable inputs into asset management planning and begin
measuring them to meet the July 1, 2024, regulation deadline.
49
9 Land Improvements
9.1
Key Insights
The Township of Machin owns a small number of assets that are considered land
improvements. This category includes:
-
Parking lots for municipal facilities
-
Sports fields and signage
-
Miscellaneous landscaping and other assets
The state of the infrastructure for the land improvements is summarized in the
following table.
Replacement
Cost
Condition
Financial Capacity
$141.3 million
Poor (24%)
Annual Requirement:
$104,771
Funding Available:
$22,886
Annual Deficit:
$81,885
9.2
Asset Inventory & Costs
The table below includes the quantity, total replacement cost and annual capital
requirements of each asset segment in the Township's land improvements
inventory.
Asset Segment
Quantity
Replacement
Cost
Annual Capital
Requirement
Environmental
7
$206,835
$9,902
Fire
4
$41,685
$2,084
General Government
16
$252,079
$12,318
Health
1
$16,083
$804
Recreation
19
$697,890
$29,489
Transportation
4002 m & 10
$1,003,466
$50,173
Total
$2,218,038
$104,771
Each asset's replacement cost should be reviewed periodically to determine whether
adjustments are needed to more accurate represent realistic capital requirements.
9.3
Asset Condition & Age
The table below identifies the current average condition, the average age, and the
estimated useful life for each asset segment. The average condition (%) is a
weighted value based on replacement cost.
50
Asset Segment
Estimated
Useful Life
Average Age
(Years)
Average Condition
Environmental
20 - 30 Years
21 Years 6 Months
51% (Fair)
Fire
20 Years
46 Years 3 Months
0% (Very Poor)
General
Government
20 - 30 Years
53 Years 6 Months
9% (Very Poor)
Health
20 Years
30 Years 6 Months
0% (Very Poor)
Recreation
20 - 40 Years
25 Years
46% (Fair)
Transportation
20 Years
44 Years 2 Months
8% (Very Poor)
Average:
37 Years 6 Months 24% (Poor)
The graph below visually illustrates the average condition for each asset segment
on a very good to very poor scale.
To ensure that the Township's land improvements provide an acceptable level of
service, the Township should monitor the average condition. If the average
condition declines, staff should re-evaluate their lifecycle management strategy to
determine what combination of maintenance, rehabilitation and replacement
activities is required to increase the overall condition of the land improvements.
Each asset's estimated useful life should also be reviewed periodically to determine
whether adjustments need to be made to better align with the observed length of
service life for each asset type.
0
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
Transportation
Water
Fire
Recreation
Health
General Governement
Environment
Total Replacement Cost
141.3
51
9.3.1 Current Approach to Condition Assessment
Accurate and reliable condition data allows staff to determine the remaining service
life of assets and identify the most cost-effective approach to managing assets. The
following describes the Township's current approach:
-
There are no formal condition assessment programs in place for land
improvements
9.4
Lifecycle Management Strategy
To ensure that municipal assets are performing as expected and meeting the needs
of customers, it is important to establish a lifecycle management strategy to
proactively manage asset deterioration. The following table outlines the Township's
current lifecycle management strategy.
Activity Type
Description of Current Strategy
Maintenance,
Rehabilitation
& Replacement
The Land improvements asset category includes several
unique asset types and lifecycle requirements are dealt with
on a case-by-case basis
9.4.1 Forecasted Capital Requirements
The following graph identifies capital requirements over the next 45 years. This
projection is used as it ensures that every asset has gone through one full iteration
of replacement. The forecasted requirements are aggregated into 5-year bins and
the trend line represents the average 5-year capital requirements.
The projected cost of lifecycle activities that will need to be undertaken over the
next 10 years to maintain the current level of service can be found in Appendix B.
52
9.5
Risk & Criticality
The risk matrix provides a visual representation of the relationship between the
probability of failure and the consequence of failure for the assets within this asset
category based on 2024 inventory data. See Appendix D for the criteria used to
determine the risk rating of each asset.
This is a high-level model developed by Township staff and should be reviewed and
adjusted to reflect an evolving understanding of both the probability and
consequences of asset failure.
The identification of critical assets allows the Township to determine appropriate
risk mitigation strategies and treatment options. Risk mitigation may include asset-
specific lifecycle strategies, condition assessment strategies, or simply the need to
collect better asset data.
9.6
Levels of Service
Land improvements are considered a non-core asset category. As such, the
Township has until July 1, 2024, to determine the qualitative descriptions and
technical metrics that measure the current level of service provided.
53
The following tables identify the Township's general level of service.
Cost
Performance
(Average Condition)
Risk
9.7
Recommendations
Replacement Costs
-
All replacement costs are based on the inflation of historical cost. These costs
should be evaluated to determine their accuracy and reliability. Replacement
costs should be updated according to the best available information on the
cost to replace the asset in today's value.
Condition Assessment Strategies
-
Identify condition assessment strategies for high value and high-risk assets.
Risk Management Strategies
-
Implement risk-based decision-making as part of asset management
planning and budgeting processes. This should include the regular review of
high-risk assets to determine appropriate risk mitigation strategies.
Levels of Service
-
The Township should develop metrics that are determined to provide
meaningful and reliable inputs into asset management planning and begin
measuring them to meet the July 1, 2024, regulation deadline.
0
20,000
40,000
60,000
80,000
100,000
120,000
Average Annual
Capital Funding
Average Annual
Capital
Requirements
19%
2%
10%
16%
54%
64%
10%
7%
0%
19%
Very Poor
Poor
Fair
Good
Very Good
54
10 Water Network
10.1 Key Insights
The water services provided by the Township are overseen by the Water
department. The department is responsible for the following:
-
Water Treatment Plant at 4 Bay Street
-
Water Distribution System
The state of the infrastructure for the water network is summarized in the following
table:
10.2 Asset Inventory & Costs
The table below includes the quantity, replacement cost method, and annual capital
requirements of each asset segment in the Township's water network inventory.
Asset Segment
Quantity
Replacement Cost
Annual Capital
Requirement
Gate Valves
65
$79,491
$1,325
Hydrants
50
$1,082,093
$6,657
Service Connections
154
$430,273
$7,171
Water Mains
7526.6 m
$22,168,062
$62,734
Water Treatment
Plant
50
$11,210,963
$503,007
Total
$34,970,882
$580,894
Each asset's replacement cost should be reviewed periodically to determine whether
adjustments are needed to more accurate represent realistic capital requirements.
Replacement
Cost
Condition
Financial Capacity
$34.9 million
Good (66%)
Annual Requirement:
$580,894
Funding Available:
$223,707
Annual Deficit:
$357,187
55
10.3 Asset Condition & Age
The table below identifies the current average condition, the average age, and the
estimated useful life for each asset segment. The average condition (%) is a
weighted value based on replacement cost.
Asset Segment
Estimated
Useful Life
Average Age
Average
Condition
Gate Valves
60 Years
43 Years 9 Months
67% (Good)
Hydrants
60 Years
38 Years 10 Months
82% (Very Good)
Service
Connections
60 Years
43 Years 9 Months
65% (Good)
Water Mains
60 Years
43 Years 9 Months
68% (Good)
Water Treatment
Plant
10 - 50 Years
17 Years 1 Month
65% (Good)
Average:
33 Years 9 Months 66% (Good)
The graph below visually illustrates the average condition for each asset segment
on a very good to very poor scale.
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
Gate Valves
Hydrants
Service Connections
Water Mains
Water Treatment Plant
Total Replacement Cost
$34.0M
Series 1
56
To ensure that the Township's water network continues to provide an acceptable
level of service, the Township should monitor the average condition of all assets. If
the average condition declines, staff should re-evaluate their lifecycle management
strategy to determine what combination of maintenance, rehabilitation and
replacement activities is required to increase the overall condition of the water
network.
Each asset's Estimated Useful Life should also be reviewed periodically to determine
whether adjustments need to be made to better align with the observed length of
service life for each asset type.
10.3.1 Current Approach to Condition Assessment
Accurate and reliable condition data allows staff to determine the remaining service
life of assets and identify the most cost-effective approach to managing assets. The
following describes the Town's current approach:
-
Staff primarily rely on the age and material of water mains to determine the
projected condition of water mains
-
The only formal condition assessment program in place for the water
distribution system is the annual hydrant inspection / system flushing
program
-
The Treatment Plant operators perform daily rounds and repair and/or
rehabilitation is based on their recommendations
The following rating criteria is used to determine the current condition of water
network assets and forecast future capital requirements:
Condition
Rating
Very Good
80-100
Good
60-80
Fair
40-60
Poor
20-40
Very Poor
0-20
57
10.4 Lifecycle Management Strategy
The condition or performance of most assets will deteriorate over time. To ensure
that municipal assets are performing as expected and meeting the needs of
customers, it is important to establish a lifecycle management strategy to
proactively manage asset deterioration. The following table outlines the Township's
current lifecycle management strategy.
Activity
Type
Description of Current Strategy
Maintenance
Main flushing is completed once a year using in-house resources
with the hydrant inspection program
Replacement
Mains are simply maintained with the goal of full replacement
once it reaches its end-of-life
Replacement activities are identified based on an analysis of the
main break rate as well as any coloured water complaints
received
10.4.1 Forecasted Capital Requirements
The following graph forecasts long-term capital requirements. The annual capital
requirement represents the average amount per year that the Township of Machin
should allocate towards funding rehabilitation and replacement needs. The following
graph identifies capital requirements over the next 50 years. This projection is used
as it ensures that every asset has gone through one full iteration of replacement.
The forecasted requirements are aggregated into 5-year bins and the trend line
represents the average 5-year capital requirements.
The projected cost of lifecycle activities that will need to be undertaken over the
next 10 years to maintain the current level of service can be found in Appendix B.
58
10.5 Risk & Criticality
The following risk matrix provides a visual representation of the relationship
between the probability of failure and the consequence of failure for the assets
within this asset category based on 2024 inventory data. See Appendix D for the
criteria used to determine the risk rating of each asset.
This is a high-level model developed for the purposes of Township staff to utilize for
prioritization and it should be reviewed and adjusted to reflect an evolving
understanding of both the probability and consequences of asset failure.
The asset-specific attributes that municipal staff utilize to define and prioritize the
criticality of the water network are documented below:
Probability of Failure (POF)
Consequence of Failure (COF)
Condition (Structural)
Replacement Cost (Financial 70%)
Service Life Remaining
(Functional)
Pipe Diameter (Operational 15%)
Traffic Counts (Operational 15%)
The identification of critical assets allows the Township to determine risk mitigation
strategies and treatment options. Risk mitigation may include asset-specific
lifecycle strategies, condition assessment strategies, or simply the need to collect
better asset data.
59
10.6 Levels of Service
The following tables identify the Township's current level of service for the water
network.
Cost
Performance
(Average Condition)
Risk
These metrics include the technical and community level of service metrics that are
required as part of O. Reg. 588/17.
10.6.1 Community Levels of Service
The following table outlines the qualitative descriptions that determine the
community levels of service provided by water network.
Service
Attribute Qualitative Description
Current LOS (2024)
Scope
Description, which may include
maps, of the user groups or areas
of the municipality that are
connected to the municipal water
system
Vermillion Bay has a
municipally owned and
operated water system
Description, which may include
maps, of the user groups or areas
of the municipality that have fire
flow
Vermillion Bay is the only area
with municipal water which also
provides fire flows
Reliability
Description of boil water
advisories and service
interruptions
In 2020 and 2021 there were
no boil water advisories or
watermain breaks
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
Average Annual
Capital Funding
Average Annual
Capital
Requirements
22%
17%
6%
44%
12%
12%
0%
2%
69%
17%
Very Poor
Poor
Fair
Good
Very Good
60
10.6.2 Technical Levels of Service
The following table outlines the quantitative metrics that determine the technical
level of service provided by the water network.
Service
Attribute Technical Metric
Current LOS
(2024)
Scope
% of properties connected to the municipal water
system
23%
% of properties where fire flow is available
23%
Reliability
# 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
0
# of connection-days per year where water is not
available due to water main breaks compared to
the total number of properties connected to the
municipal water system
0
10.7 Recommendations
Replacement Costs
-
Gather accurate replacement costs and update on a regular basis to ensure
the accuracy of capital projections.
Condition Assessment Strategies
-
Identify condition assessment strategies for high value and high-risk water
network assets.
Risk Management Strategies
-
Implement risk-based decision-making as part of asset management
planning and budgeting processes. This should include the regular review of
high-risk assets to determine appropriate risk mitigation strategies.
-
Review risk models on a regular basis and adjust according to an evolving
understanding of the probability and consequences of asset failure.
Levels of Service
-
Continue to measure current levels of service. Additional metrics can be
established as they are determined to provide meaningful and reliable inputs
into asset management planning.
-
Work towards identifying proposed levels of service as per O. Reg. 588/17
and identify the strategies that are required to close any gaps between
current and proposed levels of service.
61
11
Impacts of Growth
11.1 Key Insights
-
Understanding the key drivers of growth and demand will allow the Township
to plan for new infrastructure more effectively, and the upgrade or disposal
of existing infrastructure
-
The Township has experienced higher than projected population growth
-
The costs of growth should be considered in long-term funding strategies
that are designed to maintain the current level of service
11.2 Description of Growth Assumptions
The demand for infrastructure and services will change over time based on a
combination of internal and external factors. Understanding the key drivers of
growth and demand will allow the Township to plan for new infrastructure, as well
as the upgrade or disposal of existing infrastructure.
Increases or decreases in demand can affect what assets are needed and what level
of service meets the needs of the community.
11.2.1 Machin Strategic Plan (2017 - 2022)
The Township strategic vision is:
"Machin will be known as an innovative and growing community that is diverse in
culture, people and its economy, offering a safe place where quality of life can be
enjoyed in a beautiful setting."
The Township of Machin has a strategic mission that states:
"To promote a diversified community and economy based on sustainability by
strengthening and enhancing community infrastructure, services and activities,
while engaging people and celebrating Machin as a beautiful and safe place to play,
live and learn."
The population in Machin from 2006 to 2011 declined 4.4%, however since then the
population has been on incline increasing by 8.2% from 2011 to 2024. The
Township is currently working on promoting infilling within the community as well
as a subdivision development project to redevelop the old airport property.
62
11.3 Impact of Growth on Lifecycle Activities
By July 1, 2025, the Township's asset management plan must include a discussion
of how the assumptions regarding future changes in population and economic
activity informed the preparation of the lifecycle management and financial
strategy.
Planning for forecasted population growth may require the expansion of existing
infrastructure and services. As growth-related assets are constructed or acquired,
they should be integrated into the Township's asset management program.
While the addition of residential units will add to the existing assessment base and
offset some of the costs associated with growth, the Township will need to review
the lifecycle costs of growth-related infrastructure.
63
12
Financial Strategy
12.1 Key Insights
-
The Township is committing approximately $541,335 towards capital projects
per year
-
Given the annual capital requirement of $1,452,430, there is currently a
funding gap of $911,094 annually
-
For tax-funded assets, we recommend increasing tax revenues by 1.2% each
year for the next 20 years to achieve a sustainable level of funding
-
For the water network, increasing rate revenues by 1.9% annually for the
next 40 years to achieve a sustainable level of funding
12.2 Financial Strategy Overview
For an asset management plan to be effective and meaningful, it must be
integrated with financial planning and long-term budgeting. The development of a
comprehensive financial plan will allow the Township to identify the financial
resources required for sustainable asset management based on existing asset
inventories, desired levels of service, and projected growth requirements.
A financial plan was developed by presenting several scenarios for consideration
and culminating with final recommendations. As outlined below, the scenarios
presented model different combinations of the following components:
1. The financial requirements for:
a. Existing assets
b. Existing service levels
c. Requirements of contemplated changes in service levels (none
currently identified)
d. Requirements of anticipated growth (none identified for this plan)
2. Use of traditional sources of municipal funds:
a. Tax levies
b. User fees
c. Reserves
d. Debt
3. Use of non-traditional sources of municipal funds:
a. Reallocated budgets
b. Partnerships
c. Procurement methods
4. Use of Senior Government Funds:
a. Canada Community Building Fund (CCBF)
b. Annual grants
64
Note: Periodic grants are not included due to Provincial requirements for firm
commitments. However, if moving a specific project forward is wholly dependent on
receiving a one-time grant, the replacement cost included in the financial strategy
is the net of such grant being received.
If the financial plan results in a funding shortfall, the province requires the inclusion
of a specific plan as to how the shortfall will be managed. In determining the
legitimacy of a funding shortfall, the province may evaluate an approach to the
following:
1. To reduce financial requirements, consideration has been given to revising
service levels downward.
2. All asset management and financial strategies have been considered. For
example: If a zero-debt policy is in place, is it warranted? If not, the use of
debt should be considered.
12.3 Annual Requirements & Capital Funding
12.3.1 Annual Requirements
The annual requirements represent the amount the Township should allocate
annually to each asset category to meet replacement needs as they arise, prevent
infrastructure backlogs, and achieve long-term sustainability. In total, the Township
must allocate approximately $1.45 million annually to address capital requirements
for the asset inventory.
For most asset categories the annual requirement has been calculated based on a
"replacement only" scenario, in which capital costs are only incurred at the
construction and replacement of each asset.
However, for the road network, lifecycle management strategies have been
developed to identify capital costs that are realized through strategic rehabilitation
and renewal. The development of these strategies allows for a comparison of
potential cost avoidance if the strategies were to be implemented.
65
The following table compares two scenarios for the road network:
-
Replacement Only Scenario: Based on the assumption that assets
deteriorate and - without regularly scheduled maintenance and rehabilitation
- are replaced at the end of their service life.
-
Lifecycle Strategy Scenario: Based on the assumption that lifecycle
activities are performed at strategic intervals to extend the service life of
assets until replacement is required.
Asset
Category
Annual Requirements
(Replacement Only)
Annual Requirements
(Lifecycle Strategy)
Difference
Road Network
$298,908
$136,102
$162,806
The implementation of a proactive lifecycle strategy for roads leads to a potential
annual cost avoidance of approximately $162,800 for the road network. This
represents an overall reduction of the annual requirements by 54%. As the lifecycle
strategy scenario represents the lowest cost option available to the Township, we
have used this annual requirement in the development of the financial strategy.
Annual Funding Available
Based on a historical analysis of sustainable capital funding sources, the Township
is committing approximately $849,078 towards capital projects per year from
sustainable revenue sources. Given the annual capital requirement of $1,452,429,
there is currently a funding gap of $603,351 annually.
12.4 Funding Objective
We have developed a scenario that would enable Machin to achieve full funding
within 1 to 20 years for the following assets:
1. Tax Funded Assets: Buildings, Machinery & Equipment, Road Network,
Land Improvements, Bridges & Culverts, & Vehicles
2. Rate Funded Assets: Water Network
For each scenario developed we have included strategies, where applicable,
regarding the use of cost containment and funding opportunities.
66
12.5 Financial Profile - Tax Funded Assets
12.5.1 Current Funding Position
The following tables show, by asset category, Machin's average annual asset
investment requirements, current funding positions, and funding increases required
to achieve full funding on assets funded by taxes.
Asset Category
Avg. Annual
Requirement
Annual Funding Available
Annual
Deficit /
Surplus
Taxes
CCBF OCIF
Total
Available
Bridges & Culverts 87,237
19,056
-
-
19,056
68,181
Buildings
250,582
54,737
-
-
54,737
195,845
Land
Improvements
104,771
22,886
-
-
22,886
81,885
Machinery &
Equipment
214,316
46,815
-
-
46,815
167,501
Road Network
136,102
29,730
-
127,251 156,981
-20,879
Vehicles
78,525
17,153
-
-
17,153
61,372
871,534
190,377 -
127,251 317,628 553,906
The average annual investment requirement for the above categories is $871,500.
Annual revenue currently allocated to these assets for capital purposes is $317,600
leaving an annual deficit of $553,900. Put differently, these infrastructure
categories are currently funded at 36% of their long-term requirements.
12.5.2 Full Funding Requirements
In 2022, Township of Machin will have an annual tax revenue of $2,026,800. As
illustrated in the following table, without consideration of any other sources of
revenue or cost containment strategies, full funding would require the following tax
change over time:
Asset Category
Tax Change Required
for Full Funding
Bridges & Culverts
3.4%
Buildings
9.7%
Land Improvements
4.0%
Machinery & Equipment
8.3%
Road Network
-1.0%
Vehicles
3.0%
27.4%
67
In the following tables, we have expanded the above scenario to present multiple
options. Due to the significant increases required, we have provided phase-in
options of up to 20 years:
5 Years
10 Years 15 Years
20 Years
Infrastructure Deficit
553,906
553,906
553,906
553,906
Change in Debt Costs
-
-
-
-
Change in OCIF Grants
-
-
-
-
Resulting Infrastructure
Deficit:
553,906
553,906
553,906
553,906
Tax Increase Required
27.3%
27.3%
27.3%
27.3%
Annual
5.0%
2.4%
1.6%
1.2%
12.5.3 Financial Strategy Recommendations
Considering all the above information, we recommend the 20-year option. This
involves full funding being achieved over 20 years by:
-
increasing tax revenues by 1.2% each year for the next 20 years solely for
the purpose of phasing in full funding to the tax funded asset categories
-
allocating the current CCBF and OCIF revenue as outlined previously.
-
should the scheduled OCIF grant increase, the Township should reduce the
annual tax increase by an amount equal to the grant increase as it occurs.
-
reallocating appropriate revenue from categories in a surplus position to
those in a deficit position.
-
increasing existing and future infrastructure budgets by the applicable
inflation index on an annual basis in addition to the deficit phase-in.
Notes:
1. As in the past, periodic senior government infrastructure funding will most
likely be available during the phase-in period. By Provincial AMP rules, this
periodic funding cannot be incorporated into an AMP unless there are firm
commitments in place. We have included OCIF formula-based funding since
this funding is a multi-year commitment1.
2. We realize that raising tax revenues by the amounts recommended above for
infrastructure purposes will be very difficult to do. However, considering a
longer phase-in window may have even greater consequences in terms of
infrastructure failure.
1 The Township should take advantage of all available grant funding programs and transfers from other levels
of government. While OCIF has historically been considered a sustainable source of funding, the program is
currently undergoing review by the provincial government.
68
Although this option achieves full capital funding on an annual basis in 20 years and
provides financial sustainability over the period modeled, the recommendations do
require prioritizing capital projects to fit the resulting annual funding available.
Prioritizing future projects will require the current data to be replaced by condition-
based data. Although our recommendations include no further use of debt, the
results of the condition-based analysis may require otherwise.
12.6 Financial Profile: Rate Funded Assets
12.6.1 Current Funding Position
The following tables shows Machin's average annual asset capital expenditure
requirements, current funding positions, and funding increases required to achieve
full funding on water network assets funded by user rates.
Asset Category Avg. Annual
Requirement
Annual Funding Available
Annual
Deficit /
Surplus
Rates
Green
Stream CCBF
Total
Available
Water Network
580,894
0
162,116 61,591 223,707
357,187
The average annual capital requirement for the water network is $580,890. Annual
revenue currently allocated to the Water Network for capital purposes is $223,707
leaving an annual deficit of $357,187. Put differently, this infrastructure category is
currently funded at 38.5% of the long-term requirements.
12.6.2 Full Funding Requirements
In 2022, Machin had budgeted annual Water Network revenues of $307,740. As
illustrated in the following table, without consideration of any other sources of
revenue or cost containment strategies, full funding would require the following tax
change over time:
Asset Category
Tax Change Required
for Full Funding
Water Network
116.1%
In the following tables, we have expanded the above scenario to present multiple
options. Due to the significant increases required, we have provided phase-in
options of up to 40 years:
5 Years
10 Years 20 Years
40 Years
Infrastructure Deficit
357,187
357,187
357,187
357,187
Rate Increase Required
116.1%
116.1%
116.1%
116.1%
Annual
16.7%
8.0%
3.9%
1.9%
69
12.6.3 Financial Strategy Recommendations
Considering the above information, we recommend the 20-year option for the water
network, however, raising the water rates by 3.9% annually for infrastructure only
(in addition to the rate study recommendations of 2% for operations) staff are
recommending extending the phase in. This plan is extending the implementation of
full capital funding being achieved over 40 years by:
-
increasing rate revenues by 1.9% for the Water Network each year for the
next 40 years.
-
these rate revenue increases are solely for the purpose of phasing in full
capital funding.
-
increasing existing and future infrastructure budgets by the applicable
inflation index on an annual basis in addition to the deficit phase-in.
Notes:
1. As in the past, periodic senior government infrastructure funding will most
likely be available during the phase-in period. This periodic funding should
not be incorporated into an AMP unless there are firm commitments in place.
2. A longer phase-in window may have even greater consequences in terms of
infrastructure failure.
3. Any increase in rates required for operations would be in addition to the
above recommendations.
Although this strategy achieves full capital funding for rate-funded assets over 40
years, the recommendation does require prioritizing capital projects to fit the
annual funding available. Prioritizing future projects will require the current data to
be replaced by condition-based data. Although our recommendations include no
further use of debt, the results of the condition-based analysis may require
otherwise.
70
12.7 Use of Debt
For reference purposes, the following table outlines the premium paid on a project
if financed by debt. For example, a $1M project financed at 3.0%2 over 15 years
would result in a 26% premium or $260,000 of increased costs due to interest
payments. For simplicity, the table does not consider the time value of money or
the effect of inflation on delayed projects.
Interest
Rate
Number of Years Financed
5
10
15
20
25
30
7.0%
22%
42%
65%
89%
115%
142%
6.5%
20%
39%
60%
82%
105%
130%
6.0%
19%
36%
54%
74%
96%
118%
5.5%
17%
33%
49%
67%
86%
106%
5.0%
15%
30%
45%
60%
77%
95%
4.5%
14%
26%
40%
54%
69%
84%
4.0%
12%
23%
35%
47%
60%
73%
3.5%
11%
20%
30%
41%
52%
63%
3.0%
9%
17%
26%
34%
44%
53%
2.5%
8%
14%
21%
28%
36%
43%
2.0%
6%
11%
17%
22%
28%
34%
1.5%
5%
8%
12%
16%
21%
25%
1.0%
3%
6%
8%
11%
14%
16%
0.5%
2%
3%
4%
5%
7%
8%
0.0%
0%
0%
0%
0%
0%
0%
It should be noted that current interest rates are near all-time lows. Sustainable
funding models that include debt need to incorporate the risk of rising interest
rates. The following graph shows where historical lending rates have been:
2 Current municipal Infrastructure Ontario rates for 15-year money is 3.2%.
0.00%
5.00%
10.00%
15.00%
Historical Prime Business Interest Rate
71
A change in 15-year rates from 3% to 6% would change the premium from 26% to
54%. Such a change would have a significant impact on a financial plan.
The following tables outline how Machin has historically used debt for investing in
the asset categories as listed.
Asset Category
Current
Debt
Outstanding
Use of Debt in the Last Five Years
2020
2021
2022
2023
2024
Water Network
847,000
-
-
-
-
-
Asset Category
Principal & Interest Payments in the Next Ten Years
2022
2023
2024
2025
2026
2027
2032
Water Network
$86,514
$86,282
$86,045 81,627 $77,383 $77,383 $66,328
The revenue options outlined in this plan allow Municipality of Machin to fully fund
its long-term infrastructure requirements without further use of debt.
12.8 Use of Reserves
12.8.1 Available Reserves
Reserves play a critical role in long-term financial planning. The benefits of having
reserves available for infrastructure planning include:
-
the ability to stabilize tax rates when dealing with variable and sometimes
uncontrollable factors
-
financing one-time or short-term investments
-
accumulating the funding for significant future infrastructure investments
-
managing the use of debt
-
normalizing infrastructure funding requirements
The table below outlines the details of the reserves currently available to fund
capital assets.
Reserve Name
Balance on
December 31, 2023
Buildings
$313,959
Machinery & Equipment
$199,673
Road Network
$280,181
Land Improvements
$222,262
Bridges & Culverts
$194,292
Vehicles
$199,672
Total Tax Funded:
$1,410,039
72
Water Network
$226,831
There is considerable debate in the municipal sector as to the appropriate level of
reserves that a Township should have on hand. There is no clear guideline that has
gained wide acceptance. Factors that municipalities should consider when
determining their capital reserve requirements include:
-
breadth of services provided
-
age and condition of infrastructure
-
use and level of debt
-
economic conditions and outlook
-
internal reserve and debt policies.
These reserves are available for use by applicable asset categories during the
phase-in period to full funding. This coupled with Municipality of Machin's judicious
use of debt in the past, allows the scenarios to assume that, if required, available
reserves and debt capacity can be used for high priority and emergency
infrastructure investments in the short- to medium-term.
12.9 Recommendation
In 2025, Ontario Regulation 588/17 will require Machin to integrate proposed levels
of service for all asset categories in its asset management plan update. We
recommend that future planning should reflect adjustments to service levels and
their impacts on reserve balances.
73
13 Appendices
13.1 Key Insights
-
Appendix A includes a one-page report card with an overview of key data
from each asset category
-
Appendix B identifies projected 10-year capital requirements for each asset
category
-
Appendix C includes several maps that have been used to visualize the
current level of service
-
Appendix D identifies the criteria used to calculate risk for each asset
category
-
Appendix E provides additional guidance on the development of a condition
assessment program
74
Appendix A: Infrastructure Report Card
Asset Category
Replacement
Cost (millions)
Asset
Condition
Financial Capacity
Road Network
$7.7
Poor (22%)
Annual Requirement:
$136,100
Funding Available:
$156,980
Annual Deficit/Surplus: $(20,880)
Bridges & Culverts
$4.29
Fair (58%)
Annual Requirement:
$87,240
Funding Available:
$19,060
Annual Deficit:
$68,180
Buildings
$9.1
Poor (37%)
Annual Requirement:
$250,580
Funding Available:
$54,740
Annual Deficit:
$195,840
Vehicles
$1.3
Good (75%)
Annual Requirement:
$78,525
Funding Available:
$17,150
Annual Deficit:
$61,375
Machinery &
Equipment
$2.66
Poor (37%)
Annual Requirement:
$214,316
Funding Available:
$46,815
Annual Deficit:
$167,501
Land Improvements
$2.2
Poor (24%)
Annual Requirement:
$104,771
Funding Available:
$22,886
Annual Deficit:
$81,885
Water Network
$14
Good (66%)
Annual Requirement:
$580,894
Funding Available:
$223,707
Annual Deficit:
$357,187
Overall
$41.3
Good (71%)
Annual Requirement:
$1,452,429
Funding Available:
$849,078
Annual Deficit:
$603,351
75
Appendix B: 10-Year Capital Requirements
The following tables identify the capital cost requirements for each of the next 10 years to meet projected capital requirements and maintain the current
level of service.
Summary
Segment
Backlog
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Bridges & Culverts
$682,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Buildings
$1,581,027 $834,932
$0
$3,165,990 $0
$0
$774,646 $0
$0
$10,784
$0
Land Improvements
$1,423,301 $0
$228,080 $0
$0
$147,093 $0
$0
$6,977
$0
$0
Machinery & Equipment $1,404,884 $3,398
$0
$373,377
$63,620
$28,942
$57,624
$23,006
$50,051
$28,942
$35,290
Road Network
$0
$81,140
$181,029 $74,947
$144,484 $136,326 $0
$11,197
$10,744
$124,987 $136,326
Vehicles
$133,350
$0
$0
$2,010
$50,009
$188,505 $0
$0
$91,284
$55,780
$0
Water Network
$3,448,132 $0
$115,165 $0
$0
$192,299 $11,388
$0
$0
$0
$7,228,570
Total
$8,672,693 $919,470 $524,273 $3,616,324 $258,113 $693,166 $843,659 $34,204 $159,055 $220,493 $7,400,187
Road Network
Segment
Backlog 2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Asphalt (HCB)
$0
$0
$79,237
$3,747
$93,715
$0
$0
$0
$0
$0
$0
Gravel
$0
$0
$11,197
$10,744
$732
$136,326
$0
$11,197
$10,744
$732
$136,326
Street Lights
$0
$0
$0
$0
$0
$0
$0
$0
$0
$124,255
$0
Surface Treatment (LCB) $0
$81,140
$90,594
$60,456
$50,036
$0
$0
$0
$0
$0
$0
Total:
$0
$81,140
$181,029 $74,947
$144,484 $136,326 $0
$11,197 $10,744 $124,987 $136,326
76
Bridges & Culverts
Segment
Backlog
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Bridges
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Culverts
$682,000 $0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Total:
$682,000 $0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Buildings
Segment
Backlog
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Environmental
$16,184
$0
$0
$0
$0
$0
$0
$0
$0
$10,784
$0
Fire
$114,624
$834,932 $0
$2,654
$0
$0
$0
$0
$0
$0
$0
General Government $704,097
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Health
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Recreation
$333,003
$0
$0
$3,163,336 $0
$0
$774,646 $0
$0
$0
$0
Transportation
$413,120
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Total:
$1,581,027 $834,932 $0
$3,165,990 $0
$0
$774,646 $0
$0
$10,784 $0
Machinery & Equipment
Segment
Backlog
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Environmental
$50,301
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Fire
$244,002
$0
$0
$373,377 $49,784
$0
$34,265
$0
$29,666
$0
$21,453
General Government
$306,325
$0
$0
$0
$13,837
$28,942
$18,319
$13,837
$8,283
$28,942
$13,837
Health
$0
$0
$0
$0
$0
$0
$5,041
$9,170
$0
$0
$0
Recreation
$171,732
$0
$0
$0
$0
$0
$0
$0
$9,829
$0
$0
Transportation
$632,524
$3,398
$0
$0
$0
$0
$0
$0
$2,272
$0
$0
Total:
$1,404,884
$3,398
$0
$373,377 $63,620
$28,942
$57,624
$23,006
$50,051
$28,942
$35,290
77
Vehicles
Segment
Backlog
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Fire
$108,732 $0
$0
$0
$0
$0
$0
$0
$0
$0
$0
General Government
$0
$0
$0
$0
$0
$0
$0
$0
$0
$31,162
$0
Transportation
$24,618
$0
$0
$2,010
$50,009
$188,505
$0
$0
$91,284
$24,618
$0
Total:
$133,350 $0
$0
$2,010
$50,009 $188,505 $0
$0
$91,284 $55,780
$0
Land Improvements
Segment
Backlog
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Environmental
$33,383
$0
$0
$0
$0
$147,093
$0
$0
$0
$0
$0
Fire
$41,685
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
General Government
$223,539
$0
$0
$0
$0
$0
$0
$0
$6,977
$0
$0
Health
$16,083
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Recreation
$371,113
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Transportation
$737,498
$0
$228,080 $0
$0
$0
$0
$0
$0
$0
$0
Total:
$1,423,301 $0
$228,080 $0
$0
$147,093 $0
$0
$6,977
$0
$0
Water Network
Segment
Backlog
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Gate Valves
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Hydrants
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Service Connections
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Water Mains
$1,766,864 $0
$115,165 $0
$0
$0
$0
$0
$0
$0
$0
Water Treatment Plant $1,681,268 $0
$0
$0
$0
$192,299 $11,388
$0
$0
$0
$7,228,570
Total:
$3,448,132 $0
$115,165 $0
$0
$192,299 $11,388
$0
$0
$0
$7,228,570
78
Appendix C: Level of Service Maps
Road Network Map
79
Images of Bridge in Good Condition
80
Appendix D: Risk Rating Criteria
Asset
Category
Asset
Segment
Risk
Criteria Criteria
Weighting
(%)
Sub-Criteria
Weighting
(%)
Value/Range
Score
General / Corporate
COF
Economic
100%
Replacement
Cost
100%
0 - 5,000
5,000 - 20,000
20,000 - 100,000
100,000 - 250,000
>250,000
1 - Insignificant
2 - Minor
3 - Moderate
4 - Major
5 - Severe
POF
Structural
60%
Age Based
Condition
100%
80 - 100
60 - 79
40 - 59
20 - 39
0 - 19
1 - Rare
2 - Unlikely
3 - Possible
4 - Likely
5 - Almost Certain
Functional
40%
Service Life
Remaining
100%
> 40
20 - 30
10 - 20
1 - 10
< 1
1 - Rare
2 - Unlikely
3 - Possible
4 - Likely
5 - Almost Certain
81
Asset
Category
Asset
Segment
Risk
Criteria
Criteria
Weighting
(%)
Sub-Criteria
Weighting
(%)
Value/Range
Score
Bridges &
Culverts
Bridges
COF
Economic
70%
Replacement
Cost
100%
0 - 5,000
5,000 - 20,000
20,000 - 100,000
100,000 -
250,000
>250,000
1 - Insignificant
2 - Minor
3 - Moderate
4 - Major
5 - Severe
Operational
30
Capacity - Load
Limit
50%
No
Yes
1 - Insignificant
4 - Major
Detour Length
50%
< 10km
10km to 20km
> 20km
2 - Unlikely
3 - Possible
4 - Likely
POF
Structural
60%
Assessed
Condition
100%
80 - 100
60 - 79
40 - 59
20 - 39
0 - 19
1 - Rare
2 - Unlikely
3 - Possible
4 - Likely
5 - Almost Certain
Functional
40%
Service Life
Remaining
100%
> 40
20 - 30
10 - 20
1 - 10
< 1
1 - Rare
2 - Unlikely
3 - Possible
4 - Likely
5 - Almost Certain
82
Asset
Category
Asset
Segment
Risk Criteria
Criteria
Weighting (%)
Sub-Criteria
Weighting
(%)
Value/Range
Score
Bridges &
Culverts
Continued
Culverts
COF
Economic
70%
Replacement
Cost
100%
0 - 5,000
5,000 - 20,000
20,000 -
100,000
100,000 -
250,000
>250,000
1 - Insignificant
2 - Minor
3 - Moderate
4 - Major
5 - Severe
Operational
30%
Traffic Range
50%
Non-
Maintained
0-49
50-199
200-399
1 - Insignificant
2 - Minor
3 - Moderate
4 - Major
Width/Diameter
50%
<=500mm
<=750mm
<=1500mm
<=2000mm
<=3000mm
1 - Insignificant
2 - Minor
3 - Moderate
4 - Major
5 - Severe
POF
Structural
60%
Assessed
Condition
100%
80 - 100
60 - 79
40 - 59
20 - 39
0 - 19
1 - Rare
2 - Unlikely
3 - Possible
4 - Likely
5 - Almost
Certain
Functional
40%
Service Life
Remaining
100%
> 40
20 - 30
10 - 20
1 - 10
< 1
1 - Rare
2 - Unlikely
3 - Possible
4 - Likely
5 - Almost
Certain
83
Asset
Category
Asset
Segment
Risk
Criteria
Criteria
Weighting
(%)
Sub-Criteria
Weighting
(%)
Value/Range
Score
Road
Network
Roads
COF
Economic
70%
Replacement
Cost
100%
0 - 25,000
25,000 -
50,000
50,000 -
100,000
100,000 -
250,000
>250,000
1 - Insignificant
2 - Minor
3 - Moderate
4 - Major
5 - Severe
Operational
30%
Traffic Range
50%
Non-
Maintained
0-49
50-199
200-399
1 - Insignificant
2 - Minor
3 - Moderate
4 - Major
Surface Type
50%
Gravel
Surface
Treatment
Asphalt
2 - Minor
3 - Moderate
4 - Major
POF
Structural
60%
Assessed
Condition
100%
80 - 100
60 - 79
40 - 59
20 - 39
0 - 19
1 - Rare
2 - Unlikely
3 - Possible
4 - Likely
5 - Almost
Certain
Functional
40%
Service Life
Remaining
100%
> 40
20 - 30
10 - 20
1 - 10
< 1
1 - Rare
2 - Unlikely
3 - Possible
4 - Likely
5 - Almost
Certain
84
Asset
Category
Asset
Segment
Risk Criteria
Criteria
Weighting (%)
Sub-Criteria
Weighting
(%)
Value/Range
Score
Water
Network
Watermains
COF
Economic
70%
Replacement
Cost
100%
0 - 5,000
5,000 - 20,000
20,000 -
100,000
100,000 -
250,000
>250,000
1 - Insignificant
2 - Minor
3 - Moderate
4 - Major
5 - Severe
Operational
30%
Traffic Range
50%
Non-
Maintained
0-49
50-199
200-399
1 - Insignificant
2 - Minor
3 - Moderate
4 - Major
Width/Diameter
50%
<=100mm
<=200mm
<=300mm
<=400mm
<=600mm
1 - Insignificant
2 - Minor
3 - Moderate
4 - Major
5 - Severe
POF
Structural
60%
Assessed
Condition
100%
80 - 100
60 - 79
40 - 59
20 - 39
0 - 19
1 - Rare
2 - Unlikely
3 - Possible
4 - Likely
5 - Almost
Certain
Functional
40%
Service Life
Remaining
100%
> 40
20 - 30
10 - 20
1 - 10
< 1
1 - Rare
2 - Unlikely
3 - Possible
4 - Likely
5 - Almost
Certain
85
Appendix E: Condition Assessment Guidelines
The foundation of good asset management practice is accurate and reliable data on
the current condition of infrastructure. Assessing the condition of an asset at a
single point in time allows staff to have a better understanding of the probability of
asset failure due to deteriorating condition.
Condition data is vital to the development of data-driven asset management
strategies. Without accurate and reliable asset data, there may be little confidence
in asset management decision-making which can lead to premature asset failure,
service disruption and suboptimal investment strategies. To prevent these
outcomes, the Township's condition assessment strategy should outline several key
considerations, including:
-
The role of asset condition data in decision-making
-
Guidelines for the collection of asset condition data
-
A schedule for how regularly asset condition data should be collected
Role of Asset Condition Data
The goal of collecting asset condition data is to ensure that data is available to
inform maintenance and renewal programs required to meet the desired level of
service. Accurate and reliable condition data allows municipal staff to determine the
remaining service life of assets, and identify the most cost-effective approach to
deterioration, whether it involves extending the life of the asset through remedial
efforts or determining that replacement is required to avoid asset failure.
In addition to the optimization of lifecycle management strategies, asset condition
data also impacts the Township's risk management and financial strategies.
Assessed condition is a key variable in the determination of an asset's probability of
failure. With a strong understanding of the probability of failure across the entire
asset portfolio, the Township can develop strategies to mitigate both the probability
and consequences of asset failure and service disruption. Furthermore, with
condition-based determinations of future capital expenditures, the Township can
develop long-term financial strategies with higher accuracy and reliability.
86
Guidelines for Condition Assessment
Whether completed by external consultants or internal staff, condition assessments
should be completed in a structured and repeatable fashion, according to consistent
and objective assessment criteria. Without proper guidelines for the completion of
condition assessments there can be little confidence in the validity of condition data
and asset management strategies based on this data.
Condition assessments must include a quantitative or qualitative assessment of the
current condition of the asset, collected according to specified condition rating
criteria, in a format that can be used for asset management decision-making. As a
result, it is important that staff adequately define the condition rating criteria that
should be used and the assets that require a discrete condition rating. When
engaging with external consultants to complete condition assessments, it is critical
that these details are communicated as part of the contractual terms of the project.
There are many options available to the Township to complete condition
assessments. In some cases, external consultants may need to be engaged to
complete detailed technical assessments of infrastructure. In other cases, internal
staff may have sufficient expertise or training to complete condition assessments.
Developing a Condition Assessment Schedule
Condition assessments and general data collection can be both time-consuming and
resource intensive. It is not necessarily an effective strategy to collect assessed
condition data across the entire asset inventory. Instead, the Township should
prioritize the collection of assessed condition data based on the anticipated value of
this data in decision-making. The International Infrastructure Management Manual
(IIMM) identifies four key criteria to consider when making this determination:
1. Relevance: every data item must have a direct influence on the output that
is required
2. Appropriateness: the volume of data and the frequency of updating should
align with the stage in the assets life and the service being provided
3. Reliability: the data should be sufficiently accurate, have sufficient spatial
coverage and be appropriately complete and current
4. Affordability: the data should be affordable to collect and maintain