This is the exact embedded text of the captured official document.
Snapshot 0c6673e1325e · verified 2026-06-09 ·
original document ·
archived snapshot ·
unofficial consolidation, the official version is held by the municipal clerk.
i
Asset
Management
Plan
The Municipality of Mattawan
2024
ii
This Asset Management Program was prepared by:
Empowering your organization through advanced
asset management, budgeting & GIS solutions
i
Key Statistics
Replacement cost of
asset portfolio
$4.8 million
Replacement cost of
infrastructure per
household
$47,284 (2021)
Percentage of assets in fair
or better condition
96%
Percentage of assets with
assessed condition data
80%
Annual capital
infrastructure deficit
$106,000
Recommended timeframe
for eliminating annual
infrastructure deficit
20 Years
Target reinvestment
rate
2.2%
Actual reinvestment
rate
0%
i
Asset Management Plan ......................................................................... i
Key Statistics ........................................................................................ i
Executive Summary .............................................................................. 1
Scope ..................................................................................................... 1
Findings .................................................................................................. 2
Recommendations .................................................................................... 3
1
Introduction & Context ..................................................................... 4
Mattawan Community Profile .............................................................. 5
An Overview of Asset Management ...................................................... 6
Key Concepts in Asset Management ..................................................... 9
Climate Change .............................................................................. 12
Ontario Regulation 588/17 ............................................................... 14
2
Scope and Methodology ................................................................. 16
Asset Categories Included in this AMP ................................................ 17
Deriving Replacement Costs ............................................................. 17
Estimated Useful Life and Service Life Remaining ................................. 18
Reinvestment Rate ......................................................................... 18
Deriving Asset Condition .................................................................. 19
3
Portfolio Overview ......................................................................... 20
Total Replacement Cost of Asset Portfolio ........................................... 21
Target vs. Actual Reinvestment Rate ................................................. 22
Condition of Asset Portfolio .............................................................. 23
Forecasted Capital Requirements ...................................................... 24
4
Road Network ............................................................................... 25
Asset Inventory & Costs .................................................................. 25
Asset Condition & Age ..................................................................... 26
Lifecycle Management Strategy......................................................... 28
Risks to Current Asset Management Strategies .................................... 30
Levels of Service ............................................................................ 31
Recommendations .......................................................................... 33
5
Bridges & Culverts ......................................................................... 34
Asset Inventory & Costs .................................................................. 34
Asset Condition & Age ..................................................................... 35
ii
Lifecycle Management Strategy......................................................... 37
Risks to Current Asset Management Strategies .................................... 39
Levels of Service ............................................................................ 40
Recommendations .......................................................................... 41
6
Facilities ....................................................................................... 42
Asset Inventory & Costs .................................................................. 42
Asset Condition & Age ..................................................................... 43
Lifecycle Management Strategy......................................................... 45
Risks to Current Asset Management Strategies .................................... 47
Levels of Service ............................................................................ 48
Recommendations .......................................................................... 49
7
Vehicles ....................................................................................... 50
Asset Inventory & Costs .................................................................. 50
Asset Condition & Age ..................................................................... 51
Lifecycle Management Strategy......................................................... 53
Risks to Current Asset Management Strategies .................................... 55
Levels of Service ............................................................................ 56
Recommendations .......................................................................... 57
8
Machinery & Equipment .................................................................. 58
Asset Inventory & Costs .................................................................. 58
Asset Condition & Age ..................................................................... 60
Lifecycle Management Strategy......................................................... 62
Risks to Current Asset Management Strategies .................................... 64
Levels of Service ............................................................................ 65
Recommendations .......................................................................... 66
9
Impacts of Growth ......................................................................... 67
Description of Growth Assumptions ................................................... 68
10
Financial Strategy ....................................................................... 72
Financial Strategy Overview .......................................................... 73
Funding Objective ........................................................................ 76
Financial Profile: Tax Funded Assets ................................................ 77
Use of Debt................................................................................. 80
Use of Reserves ........................................................................... 83
iii
11
Appendices ................................................................................ 84
Appendix A: 10-Year Capital Requirements ................................................. 85
Appendix B: Level of Service Maps ............................................................ 87
Appendix C: Condition Assessment Guidelines ............................................. 91
1
Executive Summary
Municipal infrastructure provides the foundation for the economic, social,
and environmental health and growth of a community through the delivery
of critical services. The goal of asset management is to deliver an adequate
level of service in the most cost-effective manner. This involves the
development and implementation of asset management strategies and long-
term financial planning.
Scope
This AMP identifies the current practices and strategies that are in place to
manage public infrastructure and makes recommendations where they can
be further refined. Through the implementation of sound asset management
strategies, the Municipality can ensure that public infrastructure is managed
to support the sustainable delivery of municipal services.
This AMP include the following asset categories:
Asset Category
Road Network
Vehicles
Machinery & Equipment
Bridges & Culverts
Facilities
2
Findings
The overall replacement cost of the asset categories included in this AMP
totals $4.8 million. 96% of all assets analysed in this AMP are in fair or
better condition and assessed condition data was available for 80% of
assets. For the remaining 20% of assets, assessed condition data was
unavailable, and asset age was used to approximate condition - a data gap
that persists in most municipalities. Generally, age misstates the true
condition of assets, making assessments essential to accurate asset
management planning, and a recurring recommendation in this AMP.
The development of a long-term, sustainable financial plan requires an
analysis of whole lifecycle costs. This AMP uses a combination of proactive
lifecycle strategies (where applicable) and replacement only strategies to
determine the lowest cost option to maintain the current level of service.
To meet capital replacement and rehabilitation needs for existing
infrastructure, prevent infrastructure backlogs, and achieve long-term
sustainability, the Municipality's average annual capital requirement totals
$106,000. Based on a historical analysis of sustainable capital funding
sources, the Municipality is committing $0 towards capital projects or
reserves per year as all funds are used for operational activities. As a result,
there is currently an annual funding gap of approximately $106,000.
It is important to note that this AMP represents a snapshot in time and is
based on the best available processes, data, and information at the
Municipality. Strategic asset management planning is an ongoing and
dynamic process that requires continuous improvement and dedicated
resources.
With the development of this AMP the Municipality has
achieved compliance with O. Reg. 588/17 to the extent of the
requirements that must be completed by July 1, 2024. There
are additional requirements concerning proposed levels of
service and growth that must be met by July 1, 2025.
3
Recommendations
A financial strategy was developed to address the annual capital funding
gap. The following graphics shows annual tax/rate change required to
eliminate the Municipality's infrastructure deficit based on a 20-year plan:
Recommendations to guide continuous refinement of the Municipality's asset
management program. These include:
- Continue to refine and update asset information as made available.
- Newly hired staff should undergo CityWide inventory and asset
management training
- Operationalize existing database and develop short- and long-term
capital projections
- Evaluate the efficacy of the Municipality's lifecycle management
strategies at regular intervals to determine the impact on cost,
condition, and risk
- Continue to measure current levels of service and work towards
compliance for O. Reg 588/17 2025 requirements
- Consider the development of a dedicated capital budget
Tax-Funded
ASSETS
Average Annual Tax
Change
0.8%
4
Key Insights
1 Introduction & Context
- The goal of asset management is to minimize the lifecycle
costs of delivering infrastructure services, manage the
associated risks, while maximizing the value ratepayers receive
from the asset portfolio
- The Municipality'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
- Ontario Regulation 588/17 outlines several key milestone and
requirements for asset management plans in Ontario between
July 1, 2024 and 2025
5
Mattawan Community Profile
Census Characteristic
Municipality of
Mattawan
Ontario
Population 2021
153
14,223,942
Population Change 2016-2021
-5.0%
5.8%
Total Private Dwellings
102
5,929,250
Population Density
0.8/km2
15.9/km2
Land Area
200.12 km2
892,411.76 km2
The Municipality of Mattawan is a single tier Municipality in the Nipissing District
located within Northeastern Ontario. The Municipality is situated east of Lake
Nipissing, and on the south side of Ottawa River.
Mattawan is a relatively small municipality in terms of population. The Municipality
has no named communities within its boundaries and covers a rural and forested
area. Like other municipalities within the area, residents are multi-cultural, having
strong roots to First Nations, French, and English heritage.
The region is characterized by its natural landscapes which include forests, lakes,
and rivers. It is part of the Canadian Shield, a vast geological region known for its
rocky terrain, forests, and abundant freshwater resources. The Municipality's
natural beauty and outdoor recreational opportunities make it an attractive
destination for outdoor enthusiasts.
The economy of Mattawan is primarily based on natural resources, including
forestry, mining, and outdoor tourism. The region's forests provide timber and
wood products, while mining activities may involve mineral extraction. Tourism is
also an important industry, with visitors coming for activities such as fishing,
hunting, camping, and hiking. Mattawan, along with four other municipalities, have
cooperated to create the Mattawa Voyageur Country tourist region to promote the
area.
The Municipality has prioritized maintenance of its current infrastructure allocating
resources to ensure the ongoing functionality and resilience of its assets. This
dedication highlights the Municipality's commitment to maintaining the
effectiveness and integrity of its essential infrastructure.
6
An Overview of Asset Management
Municipalities are responsible for managing and maintaining a broad portfolio of
infrastructure assets to deliver services to the community. The goal of asset
management is to minimize the lifecycle costs of delivering infrastructure services,
manage the associated risks, while maximizing the value ratepayers receive from
the asset portfolio.
The acquisition of capital assets accounts for only 10-20% of their total cost of
ownership. The remaining 80-90% derives from operations and maintenance. This
AMP focuses its analysis on the capital costs to maintain, rehabilitate and replace
existing municipal infrastructure assets.
These costs can span decades, requiring planning and foresight to ensure financial
responsibility is spread equitably across generations. An asset management plan is
critical to this planning, and an essential element of broader asset management
program. The industry-standard approach and sequence to developing a practical
asset management program begins with a Strategic Plan, followed by an Asset
Management Policy and an Asset Management Strategy, concluding with an Asset
Management Plan.
This industry standard, defined by the Institute of Asset Management (IAM),
emphasizes the alignment between the corporate strategic plan and various asset
management documents. The strategic plan has a direct, and cascading impact on
asset management planning and reporting.
Build
20%
Operate, Maintain, and Dispose
80%
Total Cost of Ownership
7
1.2.1 Asset Management Policy
An asset management policy represents a statement of the principles guiding the
Municipality'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 Municipality adopted By-law No. 2019-11 which included a "Strategic Asset
Management Policy" and "State of Maturity Report" on June 13th, 2019, in
accordance with Ontario Regulation 588/17.
The asset management plan satisfies the policy statement 4 section 4:
"The Municipality will develop an asset management plan that
incorporates all infrastructure categories and municipal infrastructure
assets that meet the capitalization threshold outlined in the
organization's Tangible Capital Asset Policy. It will be updated at least
every five years following 2024 in accordance with O. Reg. 588/17
requirements, to promote, document and communicate continuous
improvement of the asset management program."
1.2.2 Asset Management Strategy
An asset management strategy outlines the translation of organizational objectives
into asset management objectives and provides a strategic overview of the
activities required to meet these objectives. It provides greater detail than the
policy on how the Municipality plans to achieve asset management objectives
through planned activities and decision-making criteria.
The Municipality'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.
1.2.3 Asset Management Plan
The asset management plan (AMP) presents the outcomes of the Municipality'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
8
The AMP is a living document that should be updated regularly as additional asset
and financial data becomes available. This will allow the Municipality to re-evaluate
the state of infrastructure and identify how the organization's asset management
and financial strategies are progressing.
9
Key Concepts in Asset Management
Effective asset management integrates several key components, including lifecycle
management, risk management, and levels of service. These concepts are applied
throughout this asset management plan and are described below in greater detail.
1.3.1 Lifecycle Management Strategies
The condition or performance of most assets will deteriorate over time. This process
is affected by a range of factors including an asset's characteristics, location,
utilization, maintenance history and environment. Asset deterioration has a
negative effect on the ability of an asset to fulfill its intended function, and may be
characterized by increased cost, risk and even service disruption.
To ensure that municipal assets are performing as expected and meeting the needs
of customers, it is important to establish a lifecycle management strategy to
proactively manage asset deterioration.
There are several field intervention activities that are available to extend the life of
an asset. These activities can be generally placed into one of three categories:
maintenance, rehabilitation, and replacement. The following table provides a
description of each type of activity and the general difference in cost.
Lifecycle
Activity
Description
Example
(Roads)
Cost
Maintenance
Activities that prevent defects or
deteriorations from occurring
Crack Seal
$
Rehabilitation/
Renewal
Activities that rectify defects or
deficiencies that are already
present and may be affecting asset
performance
Mill & Re-
surface
$$
Replacement/
Reconstruction
Asset end-of-life activities that
often involve the complete
replacement of assets
Full
Reconstruction
$$$
Depending on initial lifecycle management strategies, asset performance can be
sustained through a combination of maintenance and rehabilitation, but at some
point, replacement is required. Understanding what effect these activities will have
on the lifecycle of an asset, and their cost, will enable staff to make better
recommendations.
10
The Municipality's approach to lifecycle management is described within each asset
category outlined in this AMP. Developing and implementing a proactive lifecycle
strategy will help staff to determine which activities to perform on an asset and
when they should be performed to maximize useful life at the lowest total cost of
ownership.
1.3.2 Risk Management Strategies
Municipalities generally take a 'worst-first' approach to infrastructure spending.
Rather than prioritizing assets based on their importance to service delivery, assets
in the worst condition are fixed first, regardless of their criticality. However, not all
assets are created equal. Some are more important than others, and their failure or
disrepair poses more risk to the community than that of others. For example, a
road with a high volume of traffic that provides access to critical services poses a
higher risk than a low volume rural road. These high-value assets should receive
funding before others.
By identifying the various impacts of asset failure and the likelihood that it will fail,
risk management strategies can identify critical assets, and determine where
maintenance efforts, and spending, should be focused.
This AMP includes a high-level evaluation of asset risk and criticality. Each asset has
been assigned a probability of failure score and consequence of failure score based
on available asset data. These risk scores can be used to prioritize maintenance,
rehabilitation, and replacement strategies for critical assets.
1.3.3 Levels of Service
A level of service (LOS) is a measure of what the Municipality is providing to the
community and the nature and quality of that service. Within each asset category in
this AMP, technical metrics and qualitative descriptions that measure both technical
and community levels of service have been established and measured as data is
available.
These measures include a combination of those that have been outlined in O. Reg.
588/17 in addition to performance measures identified by the Municipality as worth
measuring and evaluating. The Municipality 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 and
bridges) the province, through O. Reg. 588/17, has provided qualitative
descriptions that are required to be included in this AMP. For non-core asset
11
categories, the Municipality 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 Service subsection within each asset category.
Technical Levels of Service
Technical levels of service are a measure of key technical attributes of the service
being provided to the community. These include mostly quantitative measures and
tend to reflect the impact of the Municipality's asset management strategies on the
physical condition of assets or the quality/capacity of the services they provide.
For core asset categories (roads and bridges) the province, through O. Reg.
588/17, has provided technical metrics that are required to be included in this AMP.
For non-core asset categories, the Municipality has determined the technical
metrics that will be used to determine the technical level of service provided. These
metrics can be found in the Levels of Service subsection within each asset category.
Current and Proposed Levels of Service
This AMP focuses on measuring the current level of service provided to the
community. Once current levels of service have been measured, the Municipality
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 Municipality. 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 Municipality must identify a lifecycle
management and financial strategy which allows these targets to be achieved.
12
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 period, Northern Canada
experienced a 2.3°C increase. The temperature increase in Canada has doubled
that of the global average. If emissions are not significantly reduced, the
temperature could increase by 6.3°C in Canada by the year 2100 compared to 2005
levels. Observed precipitation changes in Canada include an increase of
approximately 20% between 1948 and 2012. By the late 21st century, the
projected increase could reach an additional 24%. During the summer months,
some regions in Southern Canada are expected to experience periods of drought at
a higher rate. Extreme weather events and climate conditions are more common
across Canada. Recorded events include droughts, flooding, cold extremes, warm
extremes, wildfires, and record minimum arctic sea ice extent.
The changing climate poses a significant risk to the Canadian economy, society,
environment, and infrastructure. The impacts on infrastructure are often a result of
climate-related extremes such as droughts, floods, higher frequency of freeze-thaw
cycles, extended periods of high temperatures, high winds, and wildfires. Physical
infrastructure is vulnerable to damage and increased wear when exposed to these
extreme events and climate variabilities. Canadian Municipalities are faced with the
responsibility to protect their local economy, citizens, environment, and physical
assets.
1.4.1 Mattawan Climate Profile
The Municipality of Mattawan is located in Northeastern Ontario within the Nipissing
district. The Municipality 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 Municipality of Mattawan may experience the
following trends:
Higher Average Annual Temperature:
-
Between the years 1971 and 2000 the annual average temperature was 4.0
ºC
13
-
Under a high emissions scenario, the annual average temperatures are
projected to increase by 2.7 ºC by the year 2050 and over 6.6 ºC by the end
of the century.
Increase in Total Annual Precipitation:
-
Under a high emissions scenario, Mattawan is projected to experience an
13% increase in precipitation by the year 2051 and a 18% 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.
1.4.2 Integration Climate Change and Asset
Management
Asset management practices aim to deliver sustainable service delivery - the
delivery of services to residents today without compromising the services and well-
being of future residents. Climate change threatens sustainable service delivery by
reducing the useful life of an asset and increasing the risk of asset failure. Desired
levels of service can be more difficult to achieve as a result of climate change
impacts such as flooding, high heat, drought, and more frequent and intense
storms.
To achieve the sustainable delivery of services, climate change considerations
should be incorporated into asset management practices. The integration of asset
management and climate change adaptation observes industry best practices and
enables the development of a holistic approach to risk management.
14
Ontario Regulation 588/17
As part of the Infrastructure for Jobs and Prosperity Act, 2015, the Ontario
government introduced Regulation 588/17 - Asset Management Planning for
Municipal Infrastructure (O. Reg 588/17). Along with creating better performing
organizations, more liveable and sustainable communities, the regulation is a key,
mandated driver of asset management planning and reporting. It places substantial
emphasis on current and proposed levels of service and the lifecycle costs incurred
in delivering them.
The diagram below outlines key reporting requirements under O. Reg 588/17 and
the associated timelines.
Strategic Asset Management
Policy
Asset Management Plan for Core
Assets with the following
components:
1. Current levels of service
2. Inventory analysis
3. Lifecycle activities to
sustain LOS
4. Cost of lifecycle activities
5. Population and employment
forecasts
6. Discussion of growth
impacts
Asset Management Plan for All
Assets with the following
additional components:
1. Proposed levels of service
for next 10 years
2. Updated inventory analysis
3. Lifecycle management
strategy
4. Financial strategy and
addressing shortfalls
5. Discussion of how growth
assumptions impacted
lifecycle and financial
strategies
Asset Management Plan for Core and
Non-Core Assets (same components
as 2022) and Asset Management
Policy Update
2019
2024
2022
2025
15
1.5.1 O. Reg. 588/17 Compliance Review
The following table identifies the requirements outlined in Ontario Regulation
588/17 for municipalities to meet by July 1, 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)
4.1.1 - 8.2.1
Complete
Replacement cost of assets in each
category
S.5(2), 3(ii)
4.1.1 - 8.2.1
Complete
Average age of assets in each
category
S.5(2), 3(iii)
4.1.3 - 8.2.3
Complete
Condition of core assets in each
category
S.5(2), 3(iv)
4.1.2 - 8.2.2
Complete
Description of municipality's
approach to assessing the
condition of assets in each
category
S.5(2), 3(v)
4.1.2 - 8.2.2
Complete
Current levels of service in each
category
S.5(2), 1(i-ii)
4.1.6 - 8.2.6
Complete
Current performance measures in
each category
S.5(2), 2
4.1.6 - 8.2.6
Complete
Lifecycle activities needed to
maintain current levels of service
for 10 years
S.5(2), 4
4.1.4 - 8.2.4
Complete
Costs of providing lifecycle
activities for 10 years
S.5(2), 4
Appendix A
Complete
Growth assumptions
S.5(2), 5(i-ii)
S.5(2), 6(i-
vi)
9.1-9.2
Complete
16
Key Insights
2 Scope and Methodology
- This asset management plan includes 5 asset categories and
are fully tax-funded
- The source and recency of replacement costs impacts the
accuracy and reliability of asset portfolio valuation
- Accurate and reliable condition data helps to prevent
premature and costly rehabilitation or replacement and
ensures that lifecycle activities occur at the right time to
maximize asset value and useful life
17
Asset Categories Included in this
AMP
This asset management plan for the Municipality of Mattawan is produced in
compliance with Ontario Regulation 588/17. The July 2024 deadline under the
regulation--the second of three AMPs--requires analysis of core assets (roads,
bridges & culverts) and non-core assets (facilities, vehicles, and machinery &
equipment).
The AMP summarizes the state of the infrastructure for the Municipality's asset
portfolio, 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 asset categories listed below.
Asset Category
Source of Funding
Road Network
Tax Levy
Bridges & Culverts
Facilities
Vehicles
Machinery & Equipment
Deriving Replacement Costs
There are a range of methods to determine the replacement cost of an asset, and
some are more accurate and reliable than others. This AMP relies on two
methodologies:
-
User-Defined Cost and Cost/Unit: Based on costs provided by municipal
staff which could include average costs from recent contracts; data from
engineering reports and assessments; staff estimates based on knowledge
and experience
-
Cost Inflation/CPI Tables: Historical cost of the asset is inflated based on
Consumer Price Index or Non-Residential Building Construction Price Index
User-defined costs based on reliable sources are a reasonably accurate and reliable
way to determine asset replacement costs. Cost inflation is typically used in the
absence of reliable replacement cost data. It is a reliable method for recently
purchased and/or constructed assets where the total cost is reflective of the actual
18
costs that the Municipality incurred. As assets age, and new products and
technologies become available, cost inflation becomes a less reliable method.
Estimated Useful Life and Service
Life Remaining
The estimated useful life (EUL) of an asset is the period over which the Municipality
expects the asset to be available for use and remain in service before requiring
replacement or disposal. The EUL for each asset in this AMP was assigned according
to the knowledge and expertise of municipal staff and supplemented by existing
industry standards when necessary.
By using an asset's in-service data and its EUL, the Municipality can determine the
service life remaining (SLR) for each asset. Using condition data and the asset's
SLR, the Municipality can more accurately forecast when it will require replacement.
The SLR is calculated as follows:
𝑆𝑒𝑟𝑣𝑖𝑐𝑒 𝐿𝑖𝑓𝑒 𝑅𝑒𝑚𝑎𝑖𝑛𝑖𝑛𝑔 (𝑆𝐿𝑅) = 𝐼𝑛 𝑆𝑒𝑟𝑣𝑖𝑐𝑒 𝐷𝑎𝑡𝑒+ 𝐸𝑠𝑡𝑖𝑚𝑎𝑡𝑒𝑑 𝑈𝑠𝑒𝑓𝑢𝑙 𝐿𝑖𝑓𝑒(𝐸𝑈𝐿) −𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑌𝑒𝑎𝑟
Reinvestment Rate
As assets age and deteriorate they require additional investment to maintain a
state of good repair. The reinvestment of capital funds, through asset renewal or
replacement, is necessary to sustain an adequate level of service. The reinvestment
rate is a measurement of available or required funding relative to the total
replacement cost.
By comparing the actual vs. target reinvestment rate the Municipality can
determine the extent of any existing funding gap. The reinvestment rate is
calculated as follows:
𝑇𝑎𝑟𝑔𝑒𝑡 𝑅𝑒𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑅𝑎𝑡𝑒= 𝐴𝑛𝑛𝑢𝑎𝑙 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝑅𝑒𝑞𝑢𝑖𝑟𝑒𝑚𝑒𝑛𝑡
𝑇𝑜𝑡𝑎𝑙 𝑅𝑒𝑝𝑙𝑎𝑐𝑒𝑚𝑒𝑛𝑡 𝐶𝑜𝑠𝑡
𝐴𝑐𝑡𝑢𝑎𝑙 𝑅𝑒𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑅𝑎𝑡𝑒= 𝐴𝑛𝑛𝑢𝑎𝑙 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐹𝑢𝑛𝑑𝑖𝑛𝑔
𝑇𝑜𝑡𝑎𝑙 𝑅𝑒𝑝𝑙𝑎𝑐𝑒𝑚𝑒𝑛𝑡 𝐶𝑜𝑠𝑡
19
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 Municipality's asset
portfolio. The table below outlines the condition rating system used in this AMP to
determine asset condition. This rating system is aligned with the Canadian Core
Public Infrastructure Survey which is used to develop the Canadian Infrastructure
Report Card. When assessed condition data is not available, service life remaining is
used to approximate asset condition.
Condition
Description
Criteria
Service
Life
Remaining
(%)
Very Good
Fit for the
future
Well maintained, good condition, new
or recently rehabilitated
80-100
Good
Adequate for
now
Acceptable, generally approaching
mid-stage of expected service life
60-80
Fair
Requires
attention
Signs of deterioration, some
elements exhibit significant
deficiencies
40-60
Poor
Increasing
potential of
affecting
service
Approaching end of service life,
condition below standard, large
portion of system exhibits significant
deterioration
20-40
Very Poor
Unfit for
sustained
service
Near or beyond expected service life,
widespread signs of advanced
deterioration, some assets may be
unusable
0-20
The analysis in this AMP is based on assessed condition data only as available. In
the absence of assessed condition data, asset age is used as a proxy to determine
asset condition. Appendix C includes additional information on the role of asset
condition data and provides basic guidelines for the development of a condition
assessment program.
20
Key Insights
3 Portfolio Overview
- The total replacement cost of the Municipality's asset portfolio
is $4.8 million
- The Municipality's target re-investment rate is 2.2%, and the
actual re-investment rate is 0%, contributing to an expanding
infrastructure deficit
- 96% of all assets are in fair or better condition
- Average annual capital requirements total $106,000 per year
across all assets
21
Total Replacement Cost of Asset
Portfolio
The asset categories analyzed in this AMP have a total replacement cost of $4.8
million based on inventory data from 2022. This total was determined based on a
combination of user-defined costs and historical cost inflation. This estimate reflects
replacement of historical assets with similar, not necessarily identical, assets
available for procurement today.
The following table identifies the methods employed to determine replacement
costs across each asset category:
Asset Category
Replacement Cost Method
User-
Defined
Notes
Road Network
0%
All roads are unpaved, and not planned for
replacement. Roadside culverts are
cost/unit or based on inflation (CPI)
Bridges & Culverts
100%
Staff estimates and based on grant amount
Facilities
100%
Staff estimates
Machinery & Equipment
71%
Staff estimates
Vehicles
100%
Based on purchase cost
Overall
86%
22
Target vs. Actual Reinvestment Rate
The graph below depicts funding gaps or surpluses by comparing target vs actual
reinvestment rate. To meet the long-term replacement needs, the Municipality
should be allocating approximately $106 thousand annually, for a target
reinvestment rate of 2.2%. Actual annual spending on infrastructure totals $0 for
an actual reinvestment rate of 0%.
23
Condition of Asset Portfolio
The current condition of the assets is central to all asset management planning.
Collectively, 96% of assets in Mattawan are in fair or better condition. This estimate
relies on both age-based and field condition data.
This AMP relies on assessed condition data for 80% of assets; for the remaining
portfolio, age is used as an approximation of condition. Assessed condition data is
invaluable in asset management planning as it reflects the true condition of the
asset and its ability to perform its functions. The table below identifies the source of
condition data used throughout this AMP.
Asset Category
Asset
Segment
% of Assets with
Assessed Condition
Source of
Condition Data
Road Network
Roadside
Culverts
0%
N/A
Bridges & Culverts
All
100%
OSIM Report
Facilities
All
97%
Staff Assessments
Machinery &
Equipment
All
100%
Staff Assessments
Vehicles
All
0%
N/A
24
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 Municipality can produce an accurate long-term capital forecast. The following
graph identifies capital requirements over the next 80 years. This ensures that
every asset has gone through one full iteration of replacement. The forecasted
requirements are aggregated into 5-year bins.
25
\
4 Road Network
The Road Network is a critical component of the provision of safe and efficient
transportation services and represents a significant value asset category in the
Municipality's asset portfolio. It includes all municipally owned and maintained
roadways in addition to supporting roadside infrastructure, such as culverts with a
span of under 3 meters. The Municipality's roads are maintained by internal staff.
Asset Inventory & Costs
The table below includes the quantity, total replacement cost and annual capital
requirements of each asset segment in the Municipality's road network inventory.
Asset Segment
Quantity
Replacement
Cost
Annual Capital
Requirement
Roadside Culverts
129
$672,473
$30,462
Unpaved Roads
25.4 km
Not Planned for Replacement1
Total
$672,473
$30,462
Each asset's replacement cost should be reviewed periodically to determine whether
adjustments are needed to more accurate represent realistic capital requirements.
1 Gravel roads undergo perpetual operating and maintenance activities. If maintained properly,
they can theoretically have a limitless service life.
26
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
Roadside Culverts
20 - 50
16 Years 1 Months
52% (Fair)
Average
16 Years 1 Month
52% (Fair)
The graph below visually illustrates the average condition for each asset segment
on a very good to very poor.
To ensure that the Municipality's Road Network continues to provide an acceptable
level of service, the Municipality 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.
27
4.2.1 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
more confidently. The following describes the Municipality's current approach:
-
Road patrols are completed weekly for all roads by the road supervisor
-
Older roadside culvert (under 3m span) pipes are inspected on an annual
basis
-
While roadside culverts are checked less often, they are expected to be part
of an inspection program
In this AMP the following rating criteria is used to determine the current condition of
road segments and forecast future capital requirements:
Condition
Rating
Very Good
80-100
Good
60-80
Fair
40-60
Poor
20-40
Very Poor
0-20
28
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 gravel roads.
Activity Type
Description of Current Strategy
Maintenance,
Rehabilitation
and
Replacement
Grading is completed throughout the year to maintain the roads
Gravel is reapplied to the roads on an as-needed basis
according to Road Supervisor recommendations based on field
observations
Ditching is completed periodically
A backhoe and gravel application are utilized to level and
remedy roadside culverts that have lost cover due to erosion;
staff prioritize based on criticality and condition of culverts
Gravel roads are perpetually maintained and are generally not
replaced unless there is an underlying structural issue
29
4.3.1 Forecasted Capital Requirements
Based on the lifecycle strategies identified previously, 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 Municipality should
allocate towards funding rehabilitation and replacement needs. The following graph
identifies capital requirements over the next 40 years. This projection ensures that
every asset has gone through one full iteration of replacement. The forecasted
requirements are aggregated into 5-year bins.
The projected cost of lifecycle activities that will need to be undertaken over the
next 10 years to maintain the current level of service can be found in Appendix A.
30
Risks to Current Asset Management
Strategies
The following section summarizes key trends, challenges, and risks to service
delivery that the Municipality is currently facing:
Climate Change & Extreme Weather Events
An increase in freeze/thaw cycles causes roads to heave and settle.
This can cause accelerated deterioration. When the ditches are filled
with water, freeze/thaw makes the terrain conditions more difficult to
maintain. Additional sanding is required. The uncertainty surrounding
the impact of extreme weather events can make changing conditions
difficult to plan for.
Capital Funding Strategies
There is some uncertainty on the ability to adequately fund lifecycle
requirements from available revenues. Given the small tax base of the
Municipality, additional tax revenue can mean a larger tax increase for
a single household compared to that of larger municipalities.
The asset-specific attributes that internal staff utilize to define and prioritize the criticality of
assets are documented below:
Probability of Failure (POF)
Consequence of Failure (COF)
Condition
Replacement Cost
31
Levels of Service
The following tables identify the Municipality's current level of service for the road
network. 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 Municipality has selected for this AMP.
4.5.1 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 (2022)
Scope
Description, which
may include maps, of
the road network in
the municipality and
its level of connectivity
See Appendix B
Quality
Description or images
that illustrate the
different levels of road
class pavement
condition
Routine road patrols identify 8 different
types of deficiencies including potholes, soft
shoulders, debris on the road, drainage,
warning/hazard on road, regulatory issue for
signs, road on bridge issue, and information
signs.
Roads that do not exhibit any of these
deficiencies are in Very Good condition.
Depending on the severity and extent of the
8 deficiency types, roads will receive a
Good, Fair, Poor, or Very Poor rating.
32
4.5.2 Technical Levels of Service
The following table outlines the quantitative metrics that determine the technical
level of service provided by the road network.
Service
Attribute
Technical Metric
Current LOS
(2022)
Scope
Lane-km of arterial roads (MMS classes 1 and 2)
per land area (km/km2)
0/201
Lane-km of collector roads (MMS classes 3 and 4)
per land area (km/km2)
0/201
Lane-km of local roads (MMS classes 5 and 6) per
land area (km/km2)
50.8/2012
Quality
Average pavement condition index for paved
roads in the municipality
N/A3
Average surface condition for unpaved roads in
the municipality (e.g. excellent, good, fair, poor)
Good
2 Where the number of lanes was not specified, it was assumed that the road had 2 lanes.
3 The Municipality of Mattawan does not currently own any paved roads.
33
Recommendations
Asset Inventory
-
Review roadside culvert inventory and update attribute information (e.g.
quantity, unit of measure, diameter, and material) to ensure standardization
of all asset segments.
-
Newly hired staff should undertake CityWide inventory training to gain
knowledge on uploading and updating assets and utilize tools available to run
capital projections.
-
Collect and track inventory of roadside ditches, capturing important attribute
information so that it can be included in the asset management program.
Condition Assessment Strategies
-
Develop an internal condition assessment for road and culvert assets to
capture consistent and reliable information.
-
Capture internal condition ratings on assets and input this information into
the inventory on a regular basis (e.g. yearly). Currently, there is a backlog of
$92,000, regarding the Municipality's roadside culverts. A formal condition
assessment strategy will allow for more accurate data and can potentially
decrease the Municipality's backlog, as there would be assessed condition, as
opposed to an age-based approach.
Lifecycle Management Strategies
-
Evaluate the efficacy of the Municipality's lifecycle management strategies at
regular intervals to determine the impact on cost, condition, and risk.
Risk Management Strategies
-
Consider procuring extra supplies (e.g. sand) when there are deals for
emergency preparedness, subject to budgetary and space constraints.
Levels of Service
-
Re-evaluate the value of each culvert and consider whether to dispose or
replace them based on performance, budgetary constraints, and levels of
service expected.
-
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.
34
\
5 Bridges & Culverts
Bridges & Culverts represent a critical portion of the transportation services
provided to the community. Public Works staff is responsible for the maintenance of
all bridges located across municipal roads to keep structures in an adequate state
of repair and minimize service disruptions. There are two bridges at the Municipality
of Mattawan - Murphy Bridge and Burke Drive Bridge. The Municipality does not
own any structural (greater than 3-meter span) culverts.
Asset Inventory & Costs
The table below includes the quantity, total replacement cost and annual capital
requirements of each asset segment in the Municipality's bridges and culverts
inventory.
Asset
Segment
Quantity
Replacement Cost
Annual Capital
Requirement
Bridges
2
$3,000,000
$40,000
Total
$3,000,000
$40,000
Each asset's replacement cost should be reviewed periodically to determine whether
adjustments are needed to more accurate represent realistic capital requirements.
35
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
75
4 Years 5 Months
88% (Very Good)
Average
4 Years 5 Months
88% (Very Good)
The graph below visually illustrates the average condition for each asset segment
on a very good to very poor scale.
To ensure that the Municipality's Bridges & Culverts continue to provide an
acceptable level of service, the Municipality should monitor the average condition of
all assets. If the average condition declines, staff should re-evaluate their lifecycle
management strategy to determine what combination of maintenance,
rehabilitation, and replacement activities is required to increase the overall
condition of the Bridges & Culverts.
36
5.2.1 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
more confidently. The following describes the Municipality's current approach:
-
Condition assessments of all bridges are completed every 2 years per the
Ontario Structure Inspection Manual (OSIM). The most recent inspection
report was completed by K. Smart Associates Ltd.
-
These findings are verified by Public Works Staff through visual inspections,
such as looking at the bridges' underside for cracking or any other indicators
of issues
In this AMP, the following rating criteria is used to determine the current condition
of bridges and culverts and forecast future capital requirements:
Condition
Rating
Very Good
80-100
Good
60-80
Fair
40-60
Poor
20-40
Very Poor
0-20
37
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 Municipality'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 completed according to the Ontario
Structure Inspection Manual
In-house maintenance activities are completed periodically such
as regular cleaning, maintaining guide rails, applying sealant,
etc.
38
5.3.1 Forecasted Capital Requirements
The following graph forecasts long-term capital requirements. The annual capital
requirement represents the average amount per year that the Municipality should
allocate towards funding rehabilitation and replacement needs. The following graph
identifies capital requirements over the next 70 years. This projection ensures that
every asset has gone through one full iteration of replacement. The forecasted
requirements are aggregated into 5-year bins.
The projected cost of lifecycle activities that will need to be undertaken over the
next 10 years to maintain the current level of service can be found in Appendix A.
39
Risks to Current Asset Management
Strategies
The following section summarizes key trends, challenges, and risks to service
delivery that the Municipality is currently facing:
Climate Change & Extreme Weather Events
The changing climate can lead to more rain and freezing temperature
events, increasing freeze/thaw cycles. Moisture seeps into the depths of
the foundation and freezing temperatures have heaved parts of the
structure e.g. guide rails. This can cause accelerated deterioration and
increase the level of maintenance required.
Capital Funding Strategies
The rehabilitation and/or replacement of bridges is heavily dependent
on the availability of grant funding for capital projects. Capital costs for
bridges can be substantial, and when grant funding is unavailable it can
be challenging to fund necessary capital works through sustainable
revenue sources. Necessary repairs can be deferred, but this affects the
Levels of Service provided.
The asset-specific attributes that internal staff utilize to define and prioritize the criticality of
assets are documented below:
Probability of Failure (POF)
Consequence of Failure (COF)
Condition
Replacement Cost
40
Levels of Service
The following tables identify the Municipality's current level of service for Bridges &
Culverts. 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 Municipality has selected for this AMP.
5.5.1 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 (2022)
Scope
Description of the traffic
that is supported by
municipal bridges (e.g.
heavy transport vehicles,
motor vehicles,
emergency vehicles,
pedestrians, cyclists)
The bridges support regular vehicular and
truck traffic. Snowplows traverse over them
during snowfall. With the logging operations
in the area, transport trucks are common and
may carry excavators.
Quality
Description or images of
the condition of bridges
& culverts and how this
would affect use of the
bridges & culverts
See Appendix B
5.5.2 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 (2022)
Scope
% of bridges in the Municipality with loading or
dimensional restrictions
0
Quality
Average bridge condition index value for bridges in the
Municipality
88
Average bridge condition index value for structural
culverts in the Municipality
N/A4
4 The Municipality of Mattawan does not currently own any structural (greater than 3 meters) culverts.
41
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.
-
Newly hired staff should undertake CityWide inventory training to gain
knowledge on uploading and updating assets and utilize tools available to run
capital projections.
Lifecycle Management Strategies
-
This AMP only includes capital costs associated with the reconstruction of
bridges and culverts. The Municipality 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.
-
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.
42
\
6 Facilities
The Municipality of Mattawan owns and maintains two facilities which support
services provided to the community. This includes:
-
administrative office
-
public works garage
Asset Inventory & Costs
The table below includes the quantity, total replacement cost and annual capital
requirements of each asset segment in the Municipality's facilities inventory.
Asset Segment
Quantity
Replacement
Cost
Annual Capital
Requirement
Garage
1
$25,000
$500
Office
1
$812,395
$13,540
Total
$837,395
$14,040
Each asset's replacement cost should be reviewed periodically to determine whether
adjustments are needed to more accurate represent realistic capital requirements.
43
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
Garage
50
22 Years
52% (Fair)
Office
60
55 Years
65% (Good)
Average
38 Years 6
Months
64% (Good)
The graph below visually illustrates the average condition for each asset segment
on a very good to very poor.
To ensure that the Municipality's facilities and facilities continues to provide an
acceptable level of service, the Municipality 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 facilities 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.
44
6.2.1 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
more confidently. The following describes the Municipality's current approach:
-
Internal staff conduct visual inspections and general safety inspections as
part of the Municipality's approach to building condition assessments
In this AMP the following rating criteria is used to determine the current condition of
facility segments and forecast future capital requirements:
Condition
Rating
Very Good
80-100
Good
60-80
Fair
40-60
Poor
20-40
Very Poor
0-20
45
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
Municipality's current lifecycle management strategy.
Activity
Type
Description of Current Strategy
Maintenance /
Rehabilitation
HVAC systems, including air conditioning, furnace, and hot water
systems are inspected every spring and fall
Septic tanks are scheduled to be assessed every 5 years
The decision to prioritize components of a building for
rehabilitation is influenced by input from insurance companies,
consultations with contractors, and guidance from the building
inspector
Replacement
The replacement strategies for facilities entail a top-down
approach focused primarily on the Municipality's office
The Municipality is dependent on a grant to construct a new
garage for storing the plow truck, which involves the demolition of
the old garage and the subsequent construction of a new one
46
6.3.1 Forecasted Capital Requirements
The following graph forecasts long-term capital requirements. The annual capital
requirement represents the average amount per year that the Municipality should
allocate towards funding rehabilitation and replacement needs. The following graph
identifies capital requirements over the next 35 years. This projection ensures that
every asset has gone through one full iteration of replacement. The forecasted
requirements are aggregated into 5-year bins.
The projected cost of lifecycle activities that will need to be undertaken over the
next 10 years to maintain the current level of service can be found in Appendix A.
47
Risks to Current Asset Management
Strategies
The following section summarizes key trends, challenges, and risks to service
delivery that the Municipality is currently facing:
Organizational Capacity
Limited staff capacity poses a significant risk to the Municipality's
facilities, as it can lead to delays in maintenance, inspections, and
repairs, potentially compromising safety and structural integrity.
Moreover, a lack of personnel can impede proactive planning and
strategic asset management, hindering the municipality's ability to
allocate resources effectively and prioritize critical rehabilitation and
maintenance projects. A comprehensive Building Condition Assessment
(BCA) would provide valuable insights to the Municipality, allowing a
clearer understanding of the necessary maintenance and rehabilitation
measures needed to maintain the facilities in optimal condition.
Aging Infrastructure and Capital Funding Strategies
Aging infrastructure, infrastructure re-investment, and reliance on
grants pose a substantial risk to the Municipality's facilities. As
infrastructure components naturally deteriorate over time, the absence
of sufficient reinvestment and grant dependency exacerbates this
process, leaving facilities vulnerable to accelerated decay. This not only
jeopardizes structural integrity but also increases the likelihood of
safety hazards and more costly repairs down the line. To mitigate these
risks, it is imperative for municipalities to allocate adequate resources,
reduce reliance on grants, and establish a strategic reinvestment plan
to ensure the longevity and functionality of their facilities and
infrastructure.
The asset-specific attributes that internal staff utilize to define and prioritize the criticality of
assets are documented below:
Probability of Failure (POF)
Consequence of Failure (COF)
Condition
Replacement Cost
48
Levels of Service
The following tables identify the Municipality's current level of service for facilities.
These metrics include the community and technical level of service metrics that the
Municipality has selected for this AMP.
Community Levels of Service
The following table outlines the qualitative descriptions that determine the
community levels of service provided by facilities.
Service
Attribute
Qualitative Description
Current LOS (2022)
Quality
Description of the current
condition of municipal
facilities and the plans that
are in place to maintain or
improve the provided level
of service
Refer to sections 6.2 & 6.3
Technical Levels of Service
The following table outlines the quantitative metrics that determine the technical
level of service provided by the facilities.
Service
Attribute
Technical Metric
Current LOS
(2022)
Quality
% of facilities that are in good or very good
condition
97%
% of facilities that are in poor or very poor
condition
0%
49
Recommendations
Asset Inventory
-
The Municipality's asset inventory contains a single record for all facilities.
Facilities consist of several separate capital components that have unique
estimated useful lives and require asset-specific lifecycle strategies.
-
The Municipality should consider conducting a third-party building condition
assessment (BCA), which would componentize its facilities, while
implementing a UNIFORMAT II hierarchy.
Replacement Costs
-
Gather accurate replacement costs and update on a regular basis to ensure
the accuracy of capital projections.
Condition Assessment Strategies
-
The Municipality 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.
-
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
-
Begin measuring current levels of service in accordance with the metrics that
the Municipality has established in this AMP. 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.
50
\
7 Vehicles
Vehicles allow staff to efficiently deliver municipal services and personnel. Mattawan
owns and operates 1 public works vehicle (snow-plow/dump truck) which is used
for winter control activities and services the Municipality all year long.
Asset Inventory & Costs
The table below includes the quantity, replacement cost method and total
replacement cost of each asset segment in the Municipality's vehicles.
Asset Segment
Quantity
Replacement Cost
Annual Capital
Requirement
Public Works
1
$259,985
$17,332
Total
$259,985
$17,332
Each asset's replacement cost should be reviewed periodically to determine whether
adjustments are needed to more accurate represent realistic capital requirements.
51
Asset Condition & Age
The table below identifies the current average condition and source of available
condition data for each asset segment. The average condition (%) is a weighted
value based on replacement cost.
Asset Segment
Estimated
Useful Life
(Years)
Average Age
(Years)
Average
Condition
Public Works
15
1
93% (Very Good)
Average
93% (Very Good)
The graph below visually illustrates the average condition for each asset segment
on a very good to very poor scale.
To ensure that the Municipality's vehicles continue to provide an acceptable level of
service, the Municipality 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.
52
7.2.1 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
more confidently. The following describes the Municipality's current approach:
-
Internal staff conduct circle checks by prior to use and also perform informal
assessments, ensuring thorough and timely evaluations
-
Vehicles also receive routine maintenance by certified mechanics
In this AMP the following rating criteria is used to determine the current condition
vehicles and forecast future capital requirements:
Condition
Rating
Very Good
80-100
Good
60-80
Fair
40-60
Poor
20-40
Very Poor
0-20
53
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
Municipality's current lifecycle management strategy.
Activity
Type
Description of Current Strategy
Maintenance /
Rehabilitation
Tire replacements and oil changes are conducted according to the
mileage accumulated by a vehicle
The safety of the vehicle is ensured through compliance with
CVOR (Commercial Vehicle Operator's Registration) standards
Vehicles are serviced externally by a local mechanic for all
necessary repairs
During the winter season, a garage is rented for the truck to be
stored. The garage also allows the truck to be washed during this
time
Replacement
Vehicle age, kilometres and annual repair costs are taken into
consideration when determining appropriate treatment options
54
7.3.1 Forecasted Capital Requirements
The following graph forecasts long-term capital requirements. The annual capital
requirement represents the average amount per year that the Municipality should
allocate towards funding rehabilitation and replacement needs. The following graph
identifies capital requirements over the next 15 years. This projection ensures that
every asset has gone through one full iteration of replacement. The forecasted
requirements are aggregated into 5-year bins.
The projected cost of lifecycle activities that will need to be undertaken over the
next 10 years to maintain the current level of service can be found in Appendix A.
55
Risks to Current Asset Management
Strategies
The following section summarizes key trends, challenges, and risks to service
delivery that the Municipality is currently facing:
Organizational Capacity
The Municipality is experiencing limitations in staff capacity which poses
several qualitative risks to the community. Limited staff results in time
constraints, impacting the Municipality's ability to efficiently manage
key responsibilities such as road maintenance and emergency services.
This situation can lead to reduced service quality and inconsistencies in
operations. The lack of capacity also impedes the development of
essential departmental standards and policies.
Capital Funding Strategies
The lack of infrastructure re-investment for vehicles in a Municipality
poses considerable risks. If a vehicle needs extensive repairs, the lack
of an alternative means essential services like emergency response and
public safety can be disrupted. This can lead to decreased service
efficiency and risks to public safety. Additionally, the Municipality might
incur extra costs for temporary vehicle rentals, straining its budget.
Over time, this lack of investment can lead to higher operational costs
and challenges in meeting community service commitments effectively.
The asset-specific attributes that internal staff utilize to define and prioritize the criticality of
assets are documented below:
Probability of Failure (POF)
Consequence of Failure (COF)
Condition
Replacement Cost
56
Levels of Service
The following tables identify the Municipality's current level of service for vehicles.
These metrics include the community and technical level of service metrics that the
Municipality has selected for this AMP.
Community Levels of Service
The following table outlines the qualitative descriptions that determine the
community levels of service provided by vehicles.
Service
Attribute
Qualitative Description
Current LOS (2022)
Scope
Description of the current
condition of municipal
vehicles and the plans that
are in place to maintain or
improve the provided level
of service
Refer to sections 7.2 & 7.3
Technical Levels of Service
The following table outlines the quantitative metrics that determine the technical
level of service provided by the vehicles.
Service
Attribute
Technical Metric
Current LOS
(2022)
Quality
% of vehicles that are in good or very good
condition
100%
% of vehicles that are in poor or very poor
condition
0%
57
Recommendations
Replacement Costs
-
Gather updated replacement costs on an annual basis to ensure the accuracy
of capital projections.
Condition Assessment Strategies
-
Create a formal internal rating criteria, utilizing industry standards and best
asset management practices.
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
-
Begin measuring current levels of service in accordance with the metrics that
the Municipality has established in this AMP. 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.
58
\
8 Machinery & Equipment
To maintain the high quality of public infrastructure and support the delivery of core
services, Municipality staff own and employ various types of machinery and
equipment. This includes:
-
IT equipment
-
machinery to support public works
-
office equipment for administration services
-
signage
Asset Inventory & Costs
The table below includes the quantity, total replacement cost and annual capital
requirements of each asset segment in the Municipality's machinery and equipment
inventory.
Asset Segment
Quantity
Replacement
Cost
Annual Capital
Requirement
IT Equipment
2
$8,000
$800
Machinery
5
$24,252
$1,825
Office Equipment
2
$19,405
$1,441
Signage
1
$1,500
$100
Total
$53,157
$4,166
59
Each asset's replacement cost should be reviewed periodically to determine whether
adjustments are needed to more accurate represent realistic capital requirements.
60
Asset Condition & Age
The table below identifies the current average condition and source of available
condition data for each asset segment. The average condition (%) is a weighted
value based on replacement cost.
Asset Segment
Estimated
Useful Life
(Years)
Average Age
(Years)
Average
Condition
IT Equipment
10
3 Years
89% (Very
Good)
Machinery
10-25
13 Years 5 Months
66% (Good)
Office Equipment
10-15
9 Years 6 Months
85% (Very
Good)
Signage
15
4 Years
69% (Good)
Average
9 Years 7 Months
76% (Good)
The graph below visually illustrates the average condition for each asset segment
on a very good to very poor.
To ensure that the Municipality's machinery and equipment continues to provide an
acceptable level of service, the Municipality should monitor the average condition of
all assets. If the average condition declines, staff should re-evaluate their lifecycle
management strategy to determine what combination of maintenance,
rehabilitation and replacement activities is required to increase the overall condition
of the machinery and equipment.
Each asset's estimated useful life should also be reviewed periodically to determine
whether adjustments need to be made to better align with the observed length of
service life for each asset type.
61
8.2.1 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
more confidently. The following describes the Municipality's current approach:
-
Internal staff conduct visual inspections prior to use and perform informal
assessments on an as-needed basis
In this AMP the following rating criteria is used to determine the current condition of
machinery & equipment segments and forecast future capital requirements:
Condition
Rating
Very Good
80-100
Good
60-80
Fair
40-60
Poor
20-40
Very Poor
0-20
62
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 Municipality's current lifecycle management
strategy.
Activity Type
Description of Current Strategy
Maintenance/
Rehabilitation
Machinery and equipment are maintained annually, ensuring
their upkeep. This regular maintenance schedule prevents
breakdowns and prolongs the lifespan of assets
Replacement
The replacement of machinery and equipment depends on
deficiencies identified by operators that may impact their ability
to complete required tasks
63
8.3.1 Forecasted Capital Requirements
The following graph forecasts long-term capital requirements. The annual capital
requirement represents the average amount per year that the Municipality should
allocate towards funding rehabilitation and replacement needs. The following graph
identifies capital requirements over the next 20 years. This projection ensures that
every asset has gone through one full iteration of replacement. The forecasted
requirements are aggregated into 5-year bins.
The projected cost of lifecycle activities that will need to be undertaken over the
next 10 years to maintain the current level of service can be found in Appendix A.
64
Risks to Current Asset Management
Strategies
The following section summarizes key trends, challenges, and risks to service
delivery that the Municipality is currently facing:
Organizational Capacity
The Municipality's limited staff capacity is notably impacting its ability
to manage key responsibilities and expected levels of service. This staff
shortage results in time constraints, which adversely affects the
efficiency of machinery upkeep and operations in areas like public
works. Consequently, the quality and consistency of services provided
by these departments may be hindered.
The asset-specific attributes that internal staff utilize to define and prioritize the criticality of
assets are documented below:
Probability of Failure (POF)
Consequence of Failure (COF)
Condition
Replacement Cost
65
Levels of Service
The following tables identify the Municipality's current level of service for machinery
and equipment. These metrics include the community and technical level of service
metrics that the Municipality has selected for this AMP.
Community Levels of Service
The following table outlines the qualitative descriptions that determine the
community levels of service provided by machinery and equipment.
Service
Attribute
Qualitative Description
Current LOS (2022)
Quality
Description of the current
condition of machinery &
equipment assets and the
plans that are in place to
maintain or improve the
provided level of service
Refer to sections 8.2 & 8.3
Technical Levels of Service
The following table outlines the quantitative metrics that determine the technical
level of service provided by the machinery and equipment.
Service
Attribute
Technical Metric
Current LOS
(2022)
Quality
% of assets that are in good or very good
condition
73%
% of assets that are in poor or very poor
condition
0%
66
Recommendations
Replacement Costs
-
Gather updated replacement costs on an annual basis to ensure the accuracy
of capital projections.
Condition Assessment Strategies
-
Create a formal internal rating criteria, utilizing industry standards and best
asset management practices.
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
-
Begin measuring current levels of service in accordance with the metrics that
the Municipality has established in this AMP. 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.
67
Key Insights
9 Impacts of Growth
- Understanding the key drivers of growth and demand will allow
the Municipality to more effectively plan for new infrastructure,
and the upgrade or disposal of existing infrastructure
- Minimal changes to population and employment are expected
- The costs of growth should be considered in long-term funding
strategies that are designed to maintain the current level of
service
68
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 Municipality to plan for new infrastructure more
effectively, and the upgrade or disposal of existing infrastructure. Increases or
decreases in demand can affect what assets are needed and what level of service
meets the needs of the community.
9.1.1 East Nipissing Official Plan (June 2021)
The East Nipissing Planning Board covers the various areas including Mattawan.
The Official Plan has been approved with modifications as of June 26th, 2021. The
Official Plan spans a 25-year time horizon (2021-2046) and will be revised no less
frequently than 10 years after it has come into effect and every five years
thereafter. The Official Plan has been prepared based on four key components
including community development, environmental stewardship, community health
and safety, and resource management. The overall goal is to attain a healthy
economic base that supports sustainable and orderly community development while
conserving the attributes and resources of the rural area.
The Rural Lands include about two-thirds of Mattawan which is endowed with
natural resources whose extraction or development, including value-added land-use
activities, support the economic base of East Nipissing. Resource-based uses
include mineral aggregate extraction, forestry, and agriculture.
Servicing of development will be principally through individual on-site water and
sewage systems. No new municipal water or sewer services are anticipated over the
life of the Official Plan (2021-2046).
The Municipality will be receiving assistance from the Northern Ontario Resource
Development Support (NORDS) program to help build infrastructure and promote
economic development. The Municipality will also be receiving municipal
infrastructure support through the Ontario Community Infrastructure Fund (OCIF),
which provides funding for communities to renew and rehabilitate critical
infrastructure.
The following table summarizes the historical population and household statistics
for the Municipality of Mattawan from the StatsCan Census.
Historical Figures
1996
2001
2006
2011
2016
2021
Population
115
114
147
162
161
153
Population Change
N/A
-0.9%
28.9%
10.2%
-0.6%
-5.0%
Private Dwellings
N/A
90
120
99
104
102
69
9.1.2 Growth Plan for Northern Ontario (March
2011)
The Growth Plan for Northern Ontario was prepared under Ontario's Places to Grow
Act and authorizes the Province to identify and designate growth planning areas.
The Growth Plan also authorizes the Province to develop strategic growth plans for
the defined planning areas. The six theme areas which the Growth Plan is
structured around include economy, people, communities, infrastructure,
environment, and Aboriginal Peoples.
The Mattawan Official Plan addresses these themes in a variety of ways. The key
factors addressed by the Mattawan Official Plan relating to the growth of the
community, in compliance with the Growth Plan for Northern Ontario, include
designating areas within Mattawan for economic and residential growth, protecting
key environmental resources, and providing a local framework to assist in the
implementation of regional economic plans.
9.1.3 Regional Growth
In 2021 the Come North Conference Report was produced by FedNor and
Government of Canada. The document describes short, medium, and long-term
objectives for all communities in Northern Ontario as it relates to population
growth.
According to the report all 11 Census Districts in Northern Ontario (Nipissing, Parry
Sound, Manitoulin, Sudbury, Greater Sudbury, Timiskaming, Cochrane, Algoma,
Thunder Bay, Rainy River, Kenora) are currently experiencing the following trends:
population decline, population aging, or labour shortages. The report highlights a
risk of these communities becoming economically unsustainable unless population
retention and attraction numbers improve. The risk is the result of the dependency
ratio increasing. The dependency ratio is the ratio of people unable to support
themselves without assistance; people between the ages of 0 and 14 and 64 and
older.
The goal is to achieve a dependency ratio of 0.5. In 1996, every Census District
was at or near the goal by 2016; there were no districts that were below and more
than half had a ratio more than 0.6. The following graph displays the dependency
ratio for each Census District in 1996 and 2016 along with a projected ratio for the
year 2036.
70
The Municipality of Mattawan is found in the Nipissing District, which is expected to
reach a dependency ratio of 0.77.
The population trends within the Nipissing District have been fluctuating as seen in
the graph below. The following graph from the 2019 Northern Projections Nipissing
District Human Capital Series report by the Northern Policy Institute, displays the
population trends from 1991 to 2016.
The following table, found in the same report, shows population projections in the
Nipissing District for the years 2021 to 2041.
Year
Ages 0-19
Ages 20-64
Ages 65+
Total
2021
16,879
51,301
20,048
88,228
2026
16,780
48,399
23,159
88,338
2031
16,370
46,061
25,876
88,307
2036
16,006
45,516
26,681
88,203
2041
15,727
45,585
26,814
88,126
71
The most recent census data from 2021, shows a slight increase in the population,
reaching a total of 84,716, which is significantly lower than the projected
population. According to census data, a significant population increase is seen in
the population of 65 and older and a slight decline in the 0 to 19 and 20 to 64 age
ranges: thus, further increasing the dependency ratio.
72
Key Insights
10 Financial Strategy
- The municipality is committing $0 towards capital projects per
year from sustainable revenue sources
- Given the annual capital requirement of $106,000, there is
currently a funding gap of $106,000
- For tax-funded assets, we recommend increasing tax revenues
by 0.8% each year for the next 20 years to achieve a
sustainable level of funding
73
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 Municipality of Mattawan to identify the
financial resources required for sustainable asset management based on existing
asset inventories, desired levels of service, and projected growth requirements.
This report develops such a financial plan by presenting several scenarios for
consideration and culminating with final recommendations. As outlined below, the
scenarios presented model different combinations of the following components:
1. The financial requirements for:
a. Existing assets
b. Existing service levels
c. Requirements of contemplated changes in service levels (none
identified for this plan)
d. Requirements of anticipated growth (none identified for this plan)
2. Use of traditional sources of municipal funds:
a. Tax levies
b. User fees
c. Reserves
d. Debt
e. Development charges
3. Use of non-traditional sources of municipal funds:
a. Reallocated budgets
b. Partnerships
c. Procurement methods
4. Use of Senior Government Funds:
a. Gas tax
b. Annual grants
Note: Periodic grants are normally not included due to Provincial requirements for
firm commitments. However, if moving a specific project forward is wholly
dependent on receiving a one-time grant, the replacement cost included in the
financial strategy is the net of such grant being received.
If the financial plan component results in a funding shortfall, the Province requires
the inclusion of a specific plan as to how the impact of the shortfall will be
managed. In determining the legitimacy of a funding shortfall, the Province may
evaluate a Municipality's 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:
74
a. If a zero-debt policy is in place, is it warranted? If not the use of debt
should be considered.
b. Do user fees reflect the cost of the applicable service? If not, increased
user fees should be considered.
10.1.1 Annual Requirements & Capital Funding
Annual Requirements
The annual requirements represent the amount the Municipality 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
Municipality must allocate approximately $106 thousand annually to address capital
requirements for the assets included in this AMP.
For all 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.
Although the Municipality relies on a replacement-only scenario, a lifecycle strategy
scenario is also described below should the Municipality incorporate measures that
yield benefits through preventative maintenance or rehabilitation activities in the
future.
1. 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.
2. 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.
The implementation of a proactive lifecycle strategy for assets can lead to potential
annual cost avoidance. As the Replacement scenario represents the most cost-
effective option available to the Municipality, we have used these annual
requirements in the development of the financial strategy.
75
Annual Funding Available
Based on a historical analysis of sustainable capital funding sources, the
Municipality is committing approximately $0 towards capital projects per year.
Given the annual capital requirement of $106,000, there is currently a funding gap
of $106,000 annually.
76
Funding Objective
We have developed a scenario that would enable Mattawan to achieve full funding
within 1 to 20 years for the following assets:
-
Tax Funded Assets: Road Network, Bridges & Culverts, Facilities, Vehicles,
and Machinery & Equipment
Note: For the purposes of this AMP, we have excluded gravel roads since they are a
perpetual maintenance asset and end of life replacement calculations do not
normally apply. If gravel roads are maintained properly, they can theoretically have
a limitless service life.
For each scenario developed we have included strategies, where applicable,
regarding the use of cost containment and funding opportunities.
77
Financial Profile: Tax Funded
Assets
10.3.1 Current Funding Position
The following tables show, by asset category, Mattawan'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
Requireme
nt
Annual Funding Available
Annual
Deficit
Taxes
Gas
Tax
OCIF
Total
Available
Bridges & Culverts
$40,000
$0
$0
$0
$0
$40,000
Facilities
$14,000
$0
$0
$0
$0
$14,000
Machinery &
Equipment
$4,000
$0
$0
$0
$0
$4,000
Road Network
$31,000
$0
$0
$0
$0
$31,000
Vehicles
$17,000
$0
$0
$0
$0
$17,000
$106,000
$0
$0
$0
$0
$106,000
The average annual investment requirement for the above categories is $106,000.
Annual revenue currently allocated to these assets for capital purposes is $0 leaving
an annual deficit of $106,000. Put differently, these infrastructure categories are
currently funded at 0% of their long-term requirements.
10.3.2
Full Funding Requirements
In 2022, Mattawan has annual tax revenues of $397,459. 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
10.1%
Facilities
3.5%
Machinery & Equipment
1.0%
Road Network
7.8%
Vehicles
4.3%
26.7%
78
The following changes in costs and/or revenues over the next number of years
should also be considered in the financial strategy:
a) Mattawan's debt payments for these asset categories will be decreasing by
$6,000 over the next 5 years and $34,000 over the next 10 years for a total
debt payment decrease of $40,000 before year 105.
Our recommendations include capturing the above changes and allocating them to
the infrastructure deficit outlined above. The table below outlines this concept and
presents several options:
Without Capturing Changes
With Capturing Changes
5 Years
10 Years
15 Years
20 Years
5 Years
10 Years
15 Years
20 Years
Infrastructur
e Deficit
$106,000 $106,000
$106,000
$106,000
$106,000
$106,000
$106,000
$106,000
Change in
Debt Costs
N/A
N/A
N/A
N/A
-$6,000
-$40,000
-$40,000
-$40,000
Change in
OCIF Grants
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Resulting
Infrastruct
ure Deficit:
$106,000 $106,000
$106,000
$106,000
$100,000
$66,000
$66,000
$66,000
Tax Increase
Required
26.7%
26.7%
26.7%
26.7%
25.2%
16.6%
16.6%
16.6%
Annually:
4.9%
2.4%
1.6%
1.2%
3.2%
1.6%
1.1%
0.8%
5 See debt section 10.4 for assumptions concerning debt.
79
10.3.3 Financial Strategy Recommendations
Considering all the above information, we recommend the 20-year option. This
involves full funding being achieved over 20 years by:
a) when realized, reallocating the debt cost reductions of $40,000 to the
infrastructure deficit as outlined above.
b) increasing tax revenues by 0.8% each year for the next 20 years solely for
the purpose of phasing in full funding to the asset categories covered in this
section of the AMP.
c) increasing existing and future infrastructure budgets by the applicable
inflation index on an annual basis in addition to the deficit phase-in.
Notes:
1. As in the past, periodic senior government infrastructure funding will most
likely be available during the phase-in period. By Provincial AMP rules, this
periodic funding cannot be incorporated into an AMP unless there are firm
commitments in place. We have included OCIF formula-based funding, if
applicable since this funding is a multi-year commitment6.
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.
Although this option achieves full 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.
Current data shows a pent-up investment demand of $92,474 for the Road
Network.
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.
6 The Municipality should take advantage of all available grant funding programs and transfers from other
levels of government. While OCIF has historically been considered a sustainable source of funding, the
program is currently undergoing review by the provincial government. Depending on the outcome of this
review, there may be changes that impact its availability.
80
Use of Debt
Debt can be strategically utilized as a funding source with in the long-term financial
plan. The benefits of leveraging debt for infrastructure planning include:
a) the ability to stabilize tax & user rates when dealing with variable and
sometimes uncontrollable factors
b) equitable distribution of the cost/benefits of infrastructure over its useful life
c) a secure source of funding
d) flexibility in cash flow management
Debt management policies and procedures with limitations and monitoring practices
should be considered when reviewing debt as a funding option. In efforts to
mitigate increasing commodity prices and inflation, interest rates have been rising.
Sustainable funding models that include debt need to incorporate the now current
realized risk of rising interest rates. The following graph shows the historical
changes to the lending rates:
A change in 15-year rates from 5% to 7% would change the premium from 45%
to 65%. Such a change would have a significant impact on a financial plan.
For reference purposes, the following table outlines the premium paid on a project
if financed by debt. For example, a $1 million project financed at 3.0%7 over 15
years would result in a 26% premium or $260 thousand 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.
7 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
81
Table 1: Premiums Paid
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%
The following tables outline how Mattawan has historically used debt for investing in
the asset categories as listed. There is currently $222,000 of debt outstanding for
the assets covered by this AMP with corresponding principal and interest payments
of $40,000, well within its provincially prescribed maximum of $121,538.
Asset Category
Current Debt
Outstanding
Use of Debt in the Last Five Years
2018
2019
2020
2021
2022
Bridges & Culverts
Facilities
Machinery & Equipment
Road Network
Vehicles
$222,000
$222,000
Total Tax Funded:
$222,000
$0
$0
$0
$0
222,000
82
Asset Category
Principal & Interest Payments in the Next Ten Years
2024
2025
2026
20278
2028
2029
2034
Bridges & Culverts
Facilities
Machinery &
Equipment
Road Network
Vehicles
$40,000
$40,000
$40,000 $34,000
$34,000
$34,000
$0
Total Tax Funded: $40,000 $40,000 $40,000 $34,000 $34,000 $34,000
$0
The revenue options outlined in this plan allow Mattawan to fully fund its long-term
infrastructure requirements without further use of debt.
8 The current loan will expire in 2027 with a balance still outstanding of approximately $71,000. For
modeling purposes, it is assumed that loan with similar payment requirements will be arranged. That
would see the loan be fully paid off within two years after renewal.
83
Use of Reserves
10.5.1 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 requirement
There is considerable debate in the municipal sector as to the appropriate level of
reserves that a Municipality should have on hand. There is no clear guideline that
has gained wide acceptance. Factors that municipalities should take into account
when determining their capital reserve requirements include:
a) breadth of services provided
b) age and condition of infrastructure
c) use and level of debt
d) economic conditions and outlook
e) internal reserve and debt policies.
These reserves are available for use by applicable asset categories during the
phase-in period to full funding. This coupled with Mattawan'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.
At present time, the Municipality of Mattawan does not have formally defined
reserves.
10.5.2 Recommendation
In 2025, Ontario Regulation 588/17 will require Mattawan 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.
84
Key Insights
11 Appendices
- Appendix A identifies projected 10-year capital requirements for
each asset category
- Appendix B includes several maps that have been used to
visualize the current level of service
- Appendix C provides additional guidance on the development of a
condition assessment program
85
Appendix A: 10-Year Capital Requirements
The following tables identify the capital cost requirements for each of the next 10 years to meet projected capital
requirements and maintain the current level of service.
Road Network
Asset Segment
Backlog
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
Roadside Culverts
$92,474
$36,797
$7,433
$6,598
$17,836
$9,238
$0
$0
$13,362
$4,017
$1,691
$92,474
$36,797
$7,433
$6,598
$17,836
$9,238
$0
$0 $13,362
$4,017
$1,691
Bridges & Culverts
Asset Segment
Backlog
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
Bridges & Culverts
$0
$0
$6,200
$6,200
$6,200
$6,200
$6,200
$0
$0
$0
$0
$0
$0
$6,200
$6,200
$6,200
$6,200
$6,200
$0
$0
$0
$0
Facilities
Asset Segment
Backlog
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
Garage
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Office
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Vehicles
Asset Segment
Backlog
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
Public Works
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
86
Machinery & Equipment
Asset Segment
Backlog
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
IT Equipment
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$8,000
Machinery
$0
$0
$0
$0
$0
$0
$14,252
$0
$0
$0
$0
Office Equipment
$0
$0
$0
$0
$0
$0
$0
$0
$4,405
$0
$0
Signage
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0 $14,252
$0
$4,405
$0
$8,000
87
Appendix B: Level of Service Maps
Road Network Map 1
88
Road Network Map 2
89
Bridges and Culverts Map
90
Images of Bridge in Good Condition
Burke Drive Bridge
Inspected: October, 2023
Images of Bridge in Good Condition
Murphy Road Bridge
Inspected: October, 2023
South Approach Looking North
Deck Looking South
South Abutment
West Elevation
Undermining at Southwest
Corner
North Abutment
South Approach Looking North
Bridge Deck Looking South
West Barrier Looking South
East Elevation
North Abutment
Underside of Bridge Looking
North
91
Appendix C: 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 Municipality'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 Municipality'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 Municipality 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 Municipality
can develop long-term financial strategies with higher accuracy and reliability.
Guidelines for Condition Assessment
Whether completed by external consultants or internal staff, condition assessments
should be completed in a structured and repeatable fashion, according to consistent
92
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 Municipality 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 Municipality 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