Township of Strong Asset Management Plan (2021)

Strong, Ontario

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Watson & Associates Economists Ltd. 905-272-3600 November 11, 2021 [email protected] Asset Management Plan Township of Strong FINAL ________________________ Watson & Associates Economists Ltd. H:\Strong\2021 AMP\Report\Strong AMP - Final.docx © 2021, The Corporation of the Township of Strong. All Rights Reserved. The preparation of this project was carried out with assistance from the Government of Canada and the Federation of Canadian Municipalities. Notwithstanding this support, the views expressed are the personal views of the authors, and the Federation of Canadian Municipalities and the Government of Canada accept no responsibility for them. Watson & Associates Economists Ltd. H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Table of Contents Page 1. Introduction ...................................................................................................... 1-1 1.1 Overview ................................................................................................. 1-1 1.2 Legislative Context for the Asset Management Plan .............................. 1-2 1.3 Asset Management Plan Development ................................................... 1-3 1.4 Maintaining and Integrating the Asset Management Plan ....................... 1-4 2. State of Local Infrastructure and Levels of Service ..................................... 2-2 2.1 Introduction ............................................................................................. 2-2 2.2 Transportation ......................................................................................... 2-3 2.2.1 State of Local Infrastructure ....................................................... 2-3 2.2.2 Condition .................................................................................... 2-7 2.2.3 Current and Proposed Levels of Service ................................. 2-16 2.3 Facilities ................................................................................................ 2-20 2.3.1 State of Local Infrastructure ..................................................... 2-20 2.3.2 Condition .................................................................................. 2-20 2.3.3 Current and Proposed Levels of Service ................................. 2-23 2.4 Fleet ...................................................................................................... 2-24 2.4.1 State of Local Infrastructure ..................................................... 2-24 2.4.2 Condition .................................................................................. 2-24 2.4.3 Current and Proposed Levels of Service ................................. 2-27 2.5 Equipment and Land Improvements ..................................................... 2-28 2.5.1 State of Local Infrastructure ..................................................... 2-28 2.5.2 Condition .................................................................................. 2-29 2.5.3 Current and Proposed Levels of Service ................................. 2-30 2.6 Population and Employment Growth .................................................... 2-31 3. Lifecycle Management Strategy ..................................................................... 3-1 3.1 Introduction ............................................................................................. 3-1 3.2 Transportation ......................................................................................... 3-2 3.2.1 Decision Making Process - Transportation ................................ 3-2 Table of Contents (Cont'd) Page Watson & Associates Economists Ltd. H:\Strong\2021 AMP\Report\Strong AMP - Final.docx 3.2.2 Estimating Long-run Needs for Transportation Assets ............... 3-3 3.2.3 Average Annual Lifecycle Costs and Long-run Forecast ........... 3-8 3.3 Facilities .................................................................................................. 3-9 3.3.1 Decision Making Process - Facilities ......................................... 3-9 3.3.2 Estimating Long-run Needs for Facilities ................................. 3-10 3.4 Other Assets ......................................................................................... 3-11 3.4.1 Decision-making Process - Fleet, Equipment, and Land Improvements .......................................................................... 3-11 3.4.2 Estimating Long-run Needs for Fleet, Equipment, and Land Improvements .......................................................................... 3-11 4. Financing Strategy .......................................................................................... 4-1 4.1 Introduction ............................................................................................. 4-1 4.2 Annual Contribution and Lifecycle Funding Target ................................. 4-3 4.3 Annual Costs .......................................................................................... 4-4 4.4 Funding ................................................................................................... 4-5 4.5 Tax Levy Impact ..................................................................................... 4-5 Appendix A Financing Strategy Tables .................................................................. A-1 Appendix B Road Condition Maps .......................................................................... B-1 Watson & Associates Economists Ltd. H:\Strong\2021 AMP\Report\Strong AMP - Final.docx List of Acronyms and Abbreviations CL Centreline BCI Bridge Condition Index CSP Corrugated Steel Pipe GPS Global Positioning System G/S Gravel HCB High-Class Bituminous HVAC Heating, Ventilation, and Air Conditioning IJPA Infrastructure for Jobs and Prosperity Act LCB Low-Class Bituminous MMS Minimum Maintenance Standards OCIF Ontario Community Infrastructure Fund OSIM Ontario Structure Inspection Manual PCI Pavement Condition Index PSAB Public Sector Accounting Board UL% Percentage of Useful Life Report Watson & Associates Economists Ltd. H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Chapter 1 Introduction Watson & Associates Economists Ltd. PAGE 1-1 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx 1. Introduction 1.1 Overview The main objective of an asset management plan is to use a municipality's best available information to develop a comprehensive long-term plan for capital assets. In addition, the plan should provide a sufficiently documented framework that will enable continuous improvement and updates of the plan, to ensure its relevancy over the long term. The Township of Strong (Township) retained Watson & Associates Economists Ltd. (Watson) to prepare a comprehensive asset management plan. One of the objectives of this plan is to move the Township's asset management practices into compliance with Ontario Regulation (O. Reg.) 588/17. It is intended to be a tool for municipal staff and Council to use during various decision-making processes, including the annual budgeting process and future capital grant application processes. This is a comprehensive asset management plan covering all capital assets the Township has asset management responsibilities for. These assets and their replacement costs are shown in Table 1-1. Figure 1-1 shows the distribution of replacement cost by asset class. Roads accounts for more than half the replacement cost (58%), followed by facilities (26%), bridges and structural culverts (11%), fleet (4%) and equipment and land improvements (1%) Table 1-1: Asset Classes and Replacement Cost Asset Class Replacement Cost Roads $34,410,000 Bridges and Structural Culverts $6,190,000 Facilities - Arena $11,380,000 Facilities - All other $4,020,000 Fleet $2,600,000 Equipment and Land Improvements $600,000 Total $59,190,000 Watson & Associates Economists Ltd. PAGE 1-2 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Figure 1-1: Distribution of Replacement Cost by Asset Class The Township's goals and objectives with respect to asset management are identified in the Township's Strategic Asset Management Policy. A major theme within that policy is for the Township's physical assets to be managed in a manner that will support the sustainable provision of municipal services to residents. Through the implementation of the asset management plan, the Township's practice should evolve to provide services at levels proposed within this document. Moreover, infrastructure and other capital assets should be maintained at condition levels that provide a safe and functional environment for the Township's residents. Therefore, the asset management plan and the progress with respect to its implementation will be evaluated based on the Township's ability to meet these goals and objectives. 1.2 Legislative Context for the Asset Management Plan Asset management planning in Ontario has evolved significantly over the past decade. Before 2009, capital assets were recorded by municipalities as expenditures in the year of acquisition or construction. The long-term issue with this approach was the lack of a capital asset inventory, both in the municipality's accounting system and financial statements. As a result of revisions to section 3150 of the Public Sector Accounting Roads 58% Bridges and Structural Culverts 11% Facilities - Arena 19% Facilities - All other 7% Fleet 4% Equipment and Land Improvements 1% Watson & Associates Economists Ltd. PAGE 1-3 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Board (PSAB) handbook, effective for the 2009 fiscal year, municipalities were required to capitalize tangible capital assets, thus creating an inventory of assets. In 2012, the Province launched the municipal Infrastructure Strategy. As part of that initiative, municipalities and local service boards seeking provincial funding were required to demonstrate how any proposed project fits within a detailed asset management plan. In addition, asset management plans encompassing all municipal assets needed to be prepared by the end of 2016 to meet Federal Gas Tax agreement requirements. To help define the components of an asset management plan, the Province produced a document entitled Building Together: Guide for Municipal Asset Management Plans. This guide documented the components, information, and analysis that were required to be included in municipal asset management plans under this initiative. The Province's Infrastructure for Jobs and Prosperity Act, 2015 (IJPA) was proclaimed on May 1, 2016. This legislation detailed principles for evidence-based and sustainable long-term infrastructure planning. IJPA also gave the Province the authority to guide municipal asset management planning by way of regulation. In late 2017, the Province introduced O. Reg. 588/17 under IJPA. The intent of O. Reg. 588/17 is to establish standard content for municipal asset management plans. Specifically, the regulations require that asset management plans be developed that define the current and proposed levels of service, identify the lifecycle activities that would be undertaken to achieve these levels of service, and provide a financial strategy to support the levels of service and lifecycle activities. This plan has been developed to fully address the requirements of O. Reg. 588/17. It utilizes the best information available to the Township at this time. 1.3 Asset Management Plan Development This asset management plan was developed using an approach that leverages the Township's asset management principles as identified within its strategic asset management policy, capital asset database information, and staff input. The development of the Township's asset management plan is based on the steps summarized below: Watson & Associates Economists Ltd. PAGE 1-4 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx 1. Compile available information pertaining to the Township's capital assets to be included in the plan, including attributes such as size, material type, useful life, age, accounting valuation and current valuation. Update the current valuation, where required, using benchmark costing data or applicable inflationary indices. 2. Define and assess current asset conditions, based on a combination of field work performed by WalterFedy, municipal staff input, existing asset reports, and an asset age-based condition analysis. 3. Define and document current levels of service based on analysis of available data and consideration of various background reports. 4. Set proposed levels of service that the Township believes are achievable and affordable based on current information. 5. Develop lifecycle management strategies that identify the activities required to sustain the levels of service discussed above. The outputs of these strategies are summarized in the forecast of annual capital and operating expenditures required to achieve these level of service outcomes. 6. Develop a financing strategy to support the lifecycle management strategy. The financing plan informs how the capital and operating expenses arising from the asset management strategy will be funded over the forecast period. 7. Document the comprehensive asset management plan in a formal report to inform future decision-making and to communicate planning to municipal stakeholders. 1.4 Maintaining and Integrating the Asset Management Plan The asset management plan should be updated as the strategic priorities and capital needs of the Township change. This can be accomplished in conjunction with specific legislative requirements (i.e., five-year review of the asset management plan under IJPA), as well as the Township's annual budget process. Further integration into other municipal financial and planning documents would assist in ensuring the ongoing accuracy of the asset management plan, as well as the integrated financial and planning documents. The asset management plan has been developed to allow Watson & Associates Economists Ltd. PAGE 1-5 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx linkages to several strategic documents, as identified in the Township's Strategic Asset Management Policy. When updating the asset management plan, it should be noted that the state of local infrastructure, lifecycle management strategy and financing strategy are integrated and impact each other. For example, the financing strategy outlines how the lifecycle management strategy will be funded. The lifecycle management strategy identifies the lifecycle activities that need to be planned for in order to enable the Township to maintain or achieve proposed levels of service, and the associated costs. The asset management plan is a snapshot in time and is based on a number of assumptions regarding expected lifecycles and future performance of assets, lifecycle intervention costs, among others. The Township will need to establish processes for reviewing and updating these assumptions on a regular basis to keep the plan relevant. Watson & Associates Economists Ltd. H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Chapter 2 State of Local Infrastructure and Levels of Service Watson & Associates Economists Ltd. PAGE 2-2 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx 2. State of Local Infrastructure and Levels of Service 2.1 Introduction This chapter provides an analysis of the Township's assets and the current service levels provided by those assets. O. Reg. 588/17 requires that for each asset category included in the asset management plan, the following information must be identified: - Summary of the assets; - Replacement cost of the assets; - Average age of the assets (it is noted that the regulation specifically requires average age to be determined by assessing the age of asset components); - Information available on condition of assets; and - Approach to condition assessments (based on recognized and generally accepted good engineering practices where appropriate). Asset management plans must identify the current levels of service being provided for each asset category. For core municipal infrastructure assets, both the qualitative descriptions pertaining to community levels of service and metrics pertaining to technical levels of service are prescribed by O. Reg. 588/17. For all other infrastructure assets, each municipality needs to establish its own measures for levels of service. Asset management plans must also include proposed levels of service for each asset class. The proposed levels of service will be defined using the qualitative descriptions and technical metrics that the municipality uses to define current levels of service. The rest of this chapter addresses the requirements identified above, with each section focusing on an individual asset category. Watson & Associates Economists Ltd. PAGE 2-3 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx 2.2 Transportation 2.2.1 State of Local Infrastructure The assets that support the Township's transportation services are comprised of roads, bridges, and structural culverts. Other transportation assets such as signs and streetlights are not included in this plan because their repair and replacement are treated as operating expenses. The road network consists of roads with various surface types, including high-class bituminous (HCB), low-class bituminous (LCB), and gravel (G/S). The estimated replacement cost of roads is $34.4 million. The average age of the road surfaces is 7.8 years for paved roads and 3.6 years for gravel roads. Table 2-1 provides a breakdown of the road network by surface type, while Figure 2-1 illustrates the breakdown as a proportion of the total. More than two thirds of the network is gravel - 71%. The next most common surface type is LCB - 27% of the total road network length. Roads with HCB surface represent 2% of the total road network length. Map 2-1 provides a spatial illustration of the Township's road network and its extent. Table 2-1: Road Network - Surface Type Surface Type Centreline Kilometres Replacement Cost HCB 3.7 $2,280,000 LCB 38.2 $13,000,000 Gravel 100.7 $19,130,000 Total 142.7 $34,410,000 Watson & Associates Economists Ltd. PAGE 2-4 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Figure 2-1: Road Network Distribution - Surface Type Based on Centreline-Kilometres HCB 2% LCB 27% Gravel 71% Watson & Associates Economists Ltd. PAGE 2-5 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Map 2-1: Roads by Surface Type The Township has eight bridges and three structural culverts. The estimated replacement cost of the bridges and structural culverts is $6.19 million. The average age is 30 years for bridges and 28 years for structural culverts. Table 2-1 provides counts and replacement costs for bridges and structural culverts. Map 2-2 provides a spatial illustration of the Township's bridges and structural culverts. Watson & Associates Economists Ltd. PAGE 2-6 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Table 2-2: Bridges and Structural Culverts Surface Type Count Replacement Cost Bridges 8 $5,170,000 Structural Culverts 3 $1,010,000 Total 11 $6,190,000 Watson & Associates Economists Ltd. PAGE 2-7 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Map 2-2: Bridges and Structural Culverts 2.2.2 Condition The Township assessed the condition of its paved roads in 2020 using TotalPave and assessed the condition of gravel roads in 2021 as a desktop exercise. Paved roads were assessed using the Pavement Condition Index (PCI). The PCI is measured on a scale from 0 to 100, with 100 being an asset in as-new condition and 0 being a failed Watson & Associates Economists Ltd. PAGE 2-8 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx asset. Gravel roads were assessed on a subjective three-point scale: Good (3), Fair (2), and Poor (1). Going forward, it will be important for the Township to keep the condition data up to date so that it can be used to accurately plan asset interventions. To this end, the Township plans to formally re-assess the condition of its roads every five years using external consultants that can provide a consistent, objective assessment of condition. The PCI will be assessed using the methodology in the Ontario Ministry of Transportation's Manual for Condition Rating of Flexible Pavements MTO SP024. The timing of the condition assessments will be aligned with the timing of the update to the asset management plan required every five years by O. Reg. 588/17. Annual adjustments to the PCI will be done as a desktop exercise between the condition assessments. The annual adjustments will account for improvements done in the year and expected annual decreases in PCI due to typical use of the roads. The condition of gravel roads will be reviewed and updated periodically by staff. To better communicate the condition of the road network, the numeric condition ratings for roads have been segmented into qualitative condition states. Moreover, descriptions of these condition states are provided to better communicate the condition to the reader. Table 2-3 summarizes the various physical condition ratings and the condition state they represent for paved roads. Table 2-4 summarizes the condition states for gravel roads. Watson & Associates Economists Ltd. PAGE 2-9 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Table 2-3: Road Condition States Defined with Respect to Pavement Condition Index Pavement Condition Index (PCI) Range1 Condition State Description 85 < PCI ≤ 100 Excellent A very smooth ride. Pavement is in excellent condition with few cracks. 70 < PCI ≤ 85 Good A smooth ride with just a few bumps or depressions. The pavement is in good condition with frequent very slight or slight cracking. 55 < PCI ≤ 70 Fair A comfortable ride with intermittent bumps or depressions. The pavement is in fair condition with intermittent moderate and frequent slight cracking, and with intermittent slight or moderate alligatoring and distortion. 40 < PCI ≤ 55 Poor An uncomfortable ride with frequent to extensive bumps or depressions. Cannot maintain the posted speed at lower end of the scale. The pavement is in poor to fair condition with frequent moderate cracking and distortion, and intermittent moderate alligatoring. 25 < PCI ≤ 40 Very Poor A very uncomfortable ride with constant jarring bumps and depressions. Cannot maintain the posted speed and must steer constantly to avoid bumps and depressions. The pavement is in poor condition with moderate alligatoring and extensive severe cracking and distortion. 10 ≤ PCI ≤ 25 Serious The pavement is in poor to very poor condition with extensive severe cracking, alligatoring and distortion. 0 ≤ PCI ≤ 10 Failed [1] The mapping of PCI values to Condition States (PCI Labels) is based on the intervals used in TotalPave. Watson & Associates Economists Ltd. PAGE 2-10 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Table 2-4: Road Condition States Defined - Gravel Roads Condition State Description[1] Good Roadway surface well shaped with shoulder between roundings. Some distress manifestations in slight to moderate class such as loose gravel, dust, potholes, etc. There may be a few soft spots of frost heaving when evaluation is made in late spring. Good drainage for surface run-off on roadway and shoulder. Fair Mixture of properly shaped roadway surface and improperly shaped areas. Shoulder distress manifestations such as ponding and overgrowth evident between roundings in slight to moderate class. Various surface distress manifestations present such as washboarding, potholes, etc., in slight to moderate class. Localized breakup may be present. Poor Majority of roadway surface improperly shaped. Shoulder distress manifestations in moderate to severe class. Various roadway surface distress manifestations making travel unpleasant because of washboarding, dust, potholes, distortions, etc. Localized breakup areas. [1] Descriptions are from the Ministry of Transportation "SP-025 Manual for Condition Rating of Gravel Surface Roads." Watson & Associates Economists Ltd. PAGE 2-11 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Table 2-5 shows the average condition of the road network by surface type, which is weighted based on centreline-kilometres. On average, HCB roads are in the Excellent condition state, LCB roads are in the Good condition state, and gravel roads are in the Fair condition state. Figure 2-2 and Figure 2-3 show the distribution of road condition for paved and gravel roads in the Township. It is important to note that, in contrast to paved roads, the condition of gravel roads can change significantly in a short period. Wet or cold weather events can cause the condition of gravel roads to rapidly deteriorate, while routine maintenance activities such as grading can significantly improve their condition. The result is that the condition of gravel roads can vary significantly over the course of a single year, both up and down. Therefore, the average condition of gravel roads presented in Table 2-5 is only accurate within a short timeframe of the assessment. Map 2-3 provides a spatial illustration of the condition of the Township's roads. For greater clarity, maps showing the condition of paved and gravel roads separately are included in Appendix B. Table 2-5: Road Condition Analysis Road Surface Centreline Kilometres Condition (Weighted Average) Average Condition State HCB 3.7 87 Excellent LCB 38.2 75 Good Gravel 100.7 1.7 Fair Total 142.7 Not applicable[1] Not applicable [1] The condition measures for paved and gravel roads are on different scales and cannot be averaged together in a meaningful way. Watson & Associates Economists Ltd. PAGE 2-12 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Figure 2-2: Distribution of Paved Road Centreline Length by Condition State Figure 2-3: Distribution of Gravel Road Centreline Length by Condition State Excellent 36% Good 29% Fair 17% Poor 7% Very Poor 7% Serious 4% Good 16% Fair 32% Poor 52% Watson & Associates Economists Ltd. PAGE 2-13 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Map 2-3: Roads by Condition Similar to road assets, to better communicate the condition of the bridge and culvert inventory, the numeric condition ratings have been segmented into qualitative condition states. Photographs and descriptions of these condition states (and the corresponding range of BCI values) are provided in Table 2-6. Watson & Associates Economists Ltd. PAGE 2-14 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Table 2-6: Examples and Descriptions of Bridge and Culvert Condition States BCI Range Condition State Bridge Photos Culvert Photos Description[1] 70 < BCI ≤ 100 Good Maintenance is not usually required within the next five years 60 < BCI ≤ 70 Fair No Examples Maintenance work is usually scheduled within the next five years. This is the ideal time to schedule major bridge repairs to get the most out of bridge spending. 0 < BCI ≤ 60 Poor No Examples Maintenance work is usually scheduled within one year. Structure may be at increased risk of requiring a loading restriction to be posted. [1] Descriptions are based on descriptions in the Ministry of Transportation's "Ontario Structure Inspection Manual - 2008." Watson & Associates Economists Ltd. PAGE 2-15 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Table 2-7 shows the average BCI for bridges and structural culverts. On average, the Township's bridges and structural culverts are in the Good condition state. Figure 2-4 shows the overall distribution of condition for the Township. provides a spatial illustration of the condition of the Township's bridges and structural culverts. Table 2-7: Bridges and Structural Culverts Condition Analysis Road Surface Count Condition (Weighted Average) Average Condition State Bridges 8 74 Good Structural Culverts 3 72 Good Total 11 74 Good Figure 2-4: Distribution of Bridges and Structural Culverts by Condition State Good 82% Fair 18% Watson & Associates Economists Ltd. PAGE 2-16 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Map 2-4: Bridges and Structural Culverts by Condition 2.2.3 Current and Proposed Levels of Service This section provides an overview of the Township's level of service framework for transportation services. Watson & Associates Economists Ltd. PAGE 2-17 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Table 1: Community Levels of Service - Roads and Bridges Service Attribute Community Levels of Service Scope The Township's transportation assets enable the movement of people and goods within the Township and provide connectivity to regional roads. The Township's transportation assets also provide tourists with access to camping areas and resorts. In addition to passenger vehicles, the Township's transportation assets support commercial and forestry truck traffic, and provide reliable emergency vehicle access to all areas of the Township. The Township's transportation network also supports various recreational activities, including the use of recreational vehicles, such as ATVs and snowmobiles, walking, cycling, and horseback riding. The scope of the Township's transportation assets is illustrated in Map 2-1 and Map 2-2. The maps show the geographical distribution of transportation assets and identify locations of the Township's bridges and structural culverts. Quality The Township strives to maintain road and bridge surfaces to a level that supports a comfortable travel experience for road users. Descriptions of roads, bridges and structural culverts in different condition states are shown in Table 2-3, Table 2-4, and Table 2-6. Cost The Township strives to deliver transportation services efficiently and at a cost that is affordable to Township taxpayers. Watson & Associates Economists Ltd. PAGE 2-18 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Table 4: Technical Levels of Service - Roads and Bridges Service Attribute Performance Measure 2020 Performance Proposed Performance Scope Number of lane-kilometres of arterial roads as a proportion of square kilometres of land area of the Township Not Applicable  Number of lane-kilometres of collector roads as a proportion of square kilometres of land area of the Township Not Applicable  Number of lane-kilometres of local roads as a proportion of square kilometres of land area of the Township 1.8 km/km²  Percentage of bridges in the Township with loading or dimensional restrictions 63%[1]  [1] Single-lane bridges were considered to have a dimensional restriction. Five of the Township's eight bridges are single- lane bridges. Two of the single-lane bridges also have loading restrictions. Watson & Associates Economists Ltd. PAGE 2-19 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Service Attribute Performance Measure 2020 Performance Proposed Performance Quality For paved roads in the municipality, the average pavement condition index value 76  Lane-kilometres of paved roads in a condition state of poor or worse (Percentage of total lane-kilometres) 15.7 km (18%)  For unpaved roads in the municipality, the average surface condition (Good = 3; Fair = 2; Poor = 1) 1.64 (Fair)  Lane-kilometres of high-volume gravel roads in a condition state of Fair or Poor (Percentage of total lane-kilometres) 106.8 km (81%)  Lane-kilometres of Low-volume gravel roads in a condition state of poor (Percentage of total lane-kilometres) 33.3 km (48%)  Percentage of minimum maintenance standard deficiencies remedied within prescribed timeframe Not currently available For bridges in the municipality, the average BCI value 74  Number of bridges in the Poor condition state 0  For structural culverts in the municipality, the average BCI value 72  Number of structural Culverts in the Poor condition state 0  Average condition of non-structural culverts Not currently available Number of non-structural culverts in the poor condition state Not currently available Cost Annual road maintenance costs as a percentage of reconstruction cost for paved roads 0.34%  Annual road maintenance costs as a percentage of reconstruction cost for gravel roads 1.31%  Watson & Associates Economists Ltd. PAGE 2-20 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx 2.3 Facilities 2.3.1 State of Local Infrastructure The Township is responsible for eleven facilities. Table 2-8 lists all of the Township's facilities. Table 2-8: Listing of Facilities and Replacement Costs Facility Replacement Cost B01 - Municipal Office $1,461,000 B02 - Public Works Office $802,000 B03 - Cold Storage Depot $244,000 B04 - Sand Dome $290,100 B05 - Quonset Hut $474,800 B06 - Storage Building - Landfill No. 1 $138,700 B07 - Recycling Building - Landfill No. 1 $48,200 B08 - Storage Building - Landfill No. 2 $7,500 B09 - Former Church $503,000 B10 - Cemetery Vault Building $48,700 B11 - SSJ Arena $11,375,000 Total $15,393,000 2.3.2 Condition All facilities except for the SSJ Arena were assigned a facility-level condition rating by Township staff using the scale shown in Table 2-9. The Township hired WalterFedy to do a component-level condition assessment of the SSJ Arena in 2021. WalterFedy used the four-point component rating scale shown in Table 2-10. Watson & Associates Economists Ltd. PAGE 2-21 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Table 2-9: Facility-level Rating Scale Condition Description Very Good No concerns. Good Deterioration causes minimal influence on use of facility. Occasional concerns raised by users. Fair Some deterioration beginning to be reflected in minor restrictions on operational uses. Concerns from users. Poor Regular complaints from users. Very Poor Generally not suitable for use. Table 2-10: Facilities Condition Assessment Component Rating Scale Condition Description Excellent (4) Element(s) collectively are in a condition indistinguishable from new. Good (3) Element(s) are in a condition to have a collective remaining life span in excess of five years. Fair (2) Element(s) collectively require some level of immediate attention within the short term (less than five years) of either repair, replacement, or upgrade. Individual life spans may vary. Poor (1) Element(s) collectively require some level of immediate action of either repair, replacement, or upgrade. Individual life spans may vary. To integrate the SSJ Arena into the facility level condition assessment done for the other facilities, it has been assigned a condition rating of Good based on the average component condition rating, weighted by replacement cost of the component. Figure 2-5 shows the distribution of component replacement cost at the SSJ Arena by condition rating. Watson & Associates Economists Ltd. PAGE 2-22 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Figure 2-5: Distribution of Replacement Cost of Assessed Components by Condition Rating - SSJ Arena Table 2-11 lists facilities by condition. Figure 2-6 shows that facilities in good condition represent approximately 85% of the replacement cost of all facilities. The replacement cost of those in Fair condition is 12% of the total. Facilities in Poor condition have a replacement cost that is 3% of the total. Table 2-11: Listing of Facility by Condition Facility Condition B01 - Municipal Office Good B06 - Storage Building - Landfill No. 1 Good B07 - Recycling Building - Landfill No. 1 Good B08 - Storage Building - Landfill No. 2 Good B11 - Arena Good B02 - Public Works Office Fair B03 - Cold Storage Depot Fair B04 - Sand Dome Fair B05 - Quonset Hut Fair B10 - Cemetery Vault Building Fair B09 - Former Church Poor Good 71% Fair 22% Poor 7% Watson & Associates Economists Ltd. PAGE 2-23 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Figure 2-6: Distribution of Facility Replacement Cost by Condition Rating 2.3.3 Current and Proposed Levels of Service This section provides an overview of the Township's level of service framework for Facilities. Table 5: Community Levels of Service - Facilities Service Attribute Community Levels of Service Quality The Township maintains facilities at a level that provides a reasonable user experience. Accessibility The Township strives to make facilities accessible where possible. Table 6: Technical Levels of Service - Facilities Service Attribute Performance Measure 2020 Performance Proposed Performance Target Quality Average condition of facilities Good  Accessibility Number of facilities with accessibility concerns 1 0 Good 85% Fair 12% Poor 3% Watson & Associates Economists Ltd. PAGE 2-24 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx 2.4 Fleet 2.4.1 State of Local Infrastructure The Township currently maintains a fleet of 19 vehicles with 18 supporting assets such as attachments and trailers. The total replacement cost of the Township's fleet assets is $2,603,000. The vehicles are divided between five departments, Public Works, Landfill, Arena, Joint Building Committee (JBC), and Bylaw. Table 2-12 shows the number of vehicles and supporting assets and the replacement costs broken down by department. Table 2-12: Number of Fleet Assets and Replacement Costs by Department Department Number of Vehicles Number of Supporting Assets Replacement Cost Public Works 11 12 $2,013,000 Landfill 4 1 $404,000 Arena 2 5 $146,000 JBC 1 0 $34,000 Bylaw 1 0 $6,000 Total 19 18 $2,603,000 2.4.2 Condition The condition of fleet assets is evaluated based on age relative to the expected useful life (i.e., based on the percentage of useful life (UL%) consumed). A brand-new asset would have a UL% of 0%, indicating that zero percent of the asset's life expectancy has been utilized. On the other hand, an asset that has reached its life expectancy would have a UL% of 100%. It is possible for assets to have a UL% greater than 100%, which occurs if an asset has exceeded its typical life expectancy but continues to be in service. This is not necessarily a cause for concern; however, it must be recognized that assets that are near or beyond their typical life expectancy are expected to require replacement or rehabilitation in the near term. For fleet assets, the age-based conditions were reviewed (and adjusted where needed), by the Township's staff to Watson & Associates Economists Ltd. PAGE 2-25 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx ensure that they are reflective of the physical condition and remaining service life of the assets. To better communicate the condition of fleet assets, the UL% ratings have been segmented into qualitative condition states as summarized in Table 2-13. The scale is set to show that if assets are replaced around the expected useful life, they would have a rating of Fair. The rating of Fair extends to 140% of expected useful life. Beyond 140% of useful life, the probability of failure is assumed to have increased to a point where performance would be characterized as Poor or Very Poor. Table 2-13: Condition States Defined with Respect to UL% UL% Condition State 0% ≤ UL% ≤ 45% Very Good 45% < UL% ≤ 90% Good 90% < UL% ≤ 140% Fair 140% < UL% ≤ 200% Poor 200% < UL% Very Poor Figure 2-7 shows the distribution of replacement cost by condition state for fleet assets. While most fleet assets (85%) are in a condition state of Very Good or Good, there are also some older assets. Fifteen percent of the fleet assets are in a Fair condition state, four vehicles and two supporting assets. These assets may need replacing over the next few years. The replacements have been included in the 10-year capital plan. Watson & Associates Economists Ltd. PAGE 2-26 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Figure 2-7: Fleet Asset Condition State Distribution Closely related to condition is reliability. Township staff subjectively rated reliability on the three-point scale shown in Table 2-14. As shown in Figure 2-8, almost three- quarters of fleet assets (74%) were given a reliability rating of Good. A further 25% were given a reliability rating of Fair. Only 1% of fleet assets, corresponding to one piece of equipment, was given a reliability rating of Poor. The replacement of the asset in Poor condition has been included in the 10-year capital plan. Table 2-14: Asset Condition States Description Reliability Issues and breakdowns are not expected Good Minor issues can be expected and there is a risk of breakdowns Fair Breakdowns and failures are common Poor Very Good 46% Good 39% Fair 15% Watson & Associates Economists Ltd. PAGE 2-27 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Figure 2-8: Distribution of Replacement Cost by Reliability 2.4.3 Current and Proposed Levels of Service This section provides an overview of the Township's level of service framework for fleet. Table 2-15: Community Levels of Service - Fleet Service Attribute Community Levels of Service Reliability The Township maintains vehicles so that they can be relied upon to perform as intended. Efficiency The Township strives to operate and maintain its fleet at the lowest cost while still ensuring reliability performance targets are met. Good 74% Fair 25% Poor 1% Watson & Associates Economists Ltd. PAGE 2-28 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Table 2-16: Technical Levels of Service - Fleet Service Attribute Performance Measure 2020 Performance Target Reliability Average reliability of vehicles as rated by staff (Good = 3; Fair = 2; Poor = 1) 2.74 (Good)  Count of vehicles with condition rating of Poor 0  Efficiency Litres of diesel per 100 km for vehicles with odometers Not currently available Litres of gasoline per 100 km for vehicles with odometers Not currently available Litres of gasoline used for vehicles and equipment without odometers Not currently available 2.5 Equipment and Land Improvements 2.5.1 State of Local Infrastructure The Township has 35 equipment and land improvement assets. The total replacement cost of these assets is $595,000. Figure 2-9 shows how the replacement cost of these assets is distributed across departments. The Recycling department has the highest share (29%), followed by Parks (26%), Landfill (17%), Administration (12%), Public works (11%), Arena (4%), and the Cemetery with 1%. Watson & Associates Economists Ltd. PAGE 2-29 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Figure 2-9: Distribution of Equipment and Land Improvement Replacement Costs by Department 2.5.2 Condition The condition of equipment and land improvements is evaluated based on age in the same way fleet assets are, utilizing the condition states as summarized in Table 2-13 in the fleet section. The average UL% is 59.7%, which is categorized as Good. Figure 2-10 shows the distribution of replacement cost by condition state. Most assets, 89%, are in a Very Good or Good condition state according to this age-based analysis. Further, 9% of assets are in a Fair condition state indicating that they are likely to require replacement in the near future, and 2% of assets are in a Poor condition state, indicating that they are well past their expected useful life and replacement is likely imminent. Replacements of assets in Fair and Poor condition states have been included in the 10-year capital plan. Recycling 29% Parks 26% Landfill 17% Admin 12% Public works 11% Arena 4% Cemetery 1% Watson & Associates Economists Ltd. PAGE 2-30 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Figure 2-10: Equipment Asset Condition Distribution 2.5.3 Current and Proposed Levels of Service This section provides an overview of the Township's level of service framework for equipment and land improvements. Table 2-17: Community Levels of Service - Equipment and Land Improvements Service Attribute Community Levels of Service Reliability The Township maintains equipment and land improvements so that they can be relied upon to perform as intended. Very Good 23% Good 66% Fair 9% Poor 2% Watson & Associates Economists Ltd. PAGE 2-31 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Table 2-18: Technical Levels of Service - Equipment and Land Improvements Service Attribute Performance Measure 2020 Performance Target Reliability Number of equipment items with condition rating of Poor or worse 2  Number of land improvement assets with condition rating of Poor or worse 0  2.6 Population and Employment Growth As of the 2016 Census, the Township had a population of approximately 1,439. Between 2011 and 2016, the Township population grew from 1,341 to 1,439, an annual growth rate of 1.4% per year. Continued population growth may result in incremental service demands that would impact levels of service. If needed, the Township would address these pressures through established planning processes such as development of master plans for specific services. If future master planning studies identify the need for new infrastructure and/or upgrades of existing infrastructure to accommodate future population growth, the Township should consider the option of imposing development charges. Utilizing development charges would ensure that the effects of future population growth do not increase the cost of maintaining levels of service for existing taxpayers. Watson & Associates Economists Ltd. H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Chapter 3 Lifecycle Management Strategy Watson & Associates Economists Ltd. PAGE 3-1 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx 3. Lifecycle Management Strategy 3.1 Introduction This chapter details the lifecycle management strategies required to achieve the proposed levels of service presented in Chapter 2. A lifecycle management strategy identifies the recommended lifecycle activities required to achieve the levels of service discussed Chapter 2. Within the context of this asset management plan, lifecycle activities are the specified actions that can be performed on an asset in order to ensure it is performing at an appropriate level, and/or to extend its service life.[1] These actions can be carried out on a planned schedule in a prescriptive manner, or through a dynamic approach where the lifecycle activities are only carried out when specified conditions are met. O. Reg. 588/17 requires that all potential lifecycle activity options be presented, with the aim of analyzing these options in search of identifying the set of lifecycle activities that can be undertaken at the lowest cost to maintain current levels of service or to provide proposed levels of service. Asset management plans must include a ten-year capital plan that forecasts the lifecycle activities resulting from the lifecycle management strategy. While human resources fall outside the scope of this asset management plan, it is important recognize that they are critical assets in themselves and are vital to the implementation of this plan. In order for the Township to successfully manage its infrastructure, it will be imperative to maintain appropriate staffing levels to plan, procure, supervise, and in some cases directly perform the lifecycle activities identified in the lifecycle management strategies contained herein. What follows are the lifecycle management strategies for all assets contained within this asset management plan, with each section focusing on an individual asset class. Each section has two parts. The first part, Decision Making Process, discusses how projects are selected and prioritized for implementation. The second part, Estimating Long-run [1] The full lifecycle of an asset includes activities such as initial planning and maintenance which are typically addressed through master planning studies and maintenance management, respectively. Watson & Associates Economists Ltd. PAGE 3-2 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Needs, presents a generalized lifecycle model for how assets typically are expected to perform, average annual lifecycle costs, and a long-range forecast of investment needs. 3.2 Transportation 3.2.1 Decision Making Process - Transportation 3.2.1.1 HCB roads Lifecycle activities for HCB roads will be done on an as-needed basis as identified by Township staff. If significant work needs to be done, the option of changing surface type to LCB should be considered because of the lower lifecycle cost and the efficiency of integrating management of the segment into the management process for the much larger LCB road inventory. 3.2.1.2 LCB roads The decision to do resurfacing work on LCB roads is made by staff based on observations of distresses such as extensive patching and alligator cracking. If an overlay is being considered, a microseal is used unless there are indications of surface breakup that would cause a microseal to fail early. In this case, a single surface treatment overlay is used. If re-grading is needed to address issues that are identified, the surface is pulverized and a double surface treatment is applied. 3.2.1.3 Gravel roads Gravel roads are assessed by Township staff. In general, the roads in the worst condition are re-gravelled first. Factors such as the volume and type of traffic can result in roads in relatively good condition being re-gravelled. The intent is to have all high- volume gravel roads kept in Good condition, low-volume gravel roads kept in Fair or Good condition. 3.2.1.4 Bridges and Structural Culverts The biennial OSIM reports required by O. Reg. 104/97 form a starting point for short- and medium-term planning. They include recommendations for lifecycle activities that should be done over a ten-year timeframe. These recommendations are reviewed by Township staff to ensure they are affordable and that potential lower cost alternatives have been explored. Watson & Associates Economists Ltd. PAGE 3-3 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx 3.2.2 Estimating Long-run Needs for Transportation Assets To estimate long-run needs, the Township's roads have been broken down into five categories based on surface type and traffic volume as shown in Table 3-1. The categorization of the LCB and gravel roads into high-volume and low-volume traffic roads was done by Township staff based on their experience managing the roads. If formal traffic counts are done in the future, a data driven definition could be used. Table 3-1: Categorization of Roads for Lifecycle Management Strategies Lifecycle Management Strategy Category Description Quantity (Centreline- kilometres) Replacement Cost HCB All asphalt roads 3.7 $2,280,000 LCB - High-Volume Surface treated roads with high traffic volume 31.4 $10,680,000 LCB - Low-Volume Surface treated roads with low traffic volume 6.8 $2,320,000 Gravel - High-Volume Gravel roads with high traffic volume 65.7 $12,480,000 Gravel - Low-Volume Gravel roads with low traffic volume 35.0 $6,650,000 Total 142.7 $34,410,000 Bridges and structural culverts are broken down into three categories as shown in Table 3-2. The generalized lifecycle models have lifecycle activity costing represented as percentages of replacement costs. Short- and medium-term funding requirements are identified in the biennial OSIM reports required by O. Reg. 104/97. Watson & Associates Economists Ltd. PAGE 3-4 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Table 3-2: Categorization of Bridges and Structural Culverts for Lifecycle Management Strategies Lifecycle Management Strategy Category Quantity Replacement Cost Bridge 8 $5,172,000 Concrete Culvert 2 $739,000 Steel Culvert 1 $275,000 Total 11 $6,187,000 3.2.2.1 HCB Road Generalized Lifecycle Model Table 3-3 shows the parameters of the generalized lifecycle model for HCB roads. Average annual lifecycle capital costs are $14,760 per centreline-kilometre. With 3.7 centreline-kilometres of roads in this category, the total average annual lifecycle capital cost is $55,100 Table 3-3: Generalized Lifecycle Model for HCB Roads: Capital Activity Description Cost per Centreline- kilometre Average Annual Cost per Centreline- kilometre Age Condition / Performance Microseal $35,000 $1,400 15 PCI ~ 55 Pulverize and repave $334,000 $13,360 25 PCI ~ 55 Total $369,000 $14,760 3.2.2.2 LCB - High-Volume Road Generalized Lifecycle Model Table 3-4 shows the parameters of the generalized lifecycle model for LCB - High- Volume roads. Average annual lifecycle capital costs are $11,170 per centreline- kilometre. With 31.4 centreline-kilometres of roads in this category, the total average annual lifecycle capital cost is $350,800 Watson & Associates Economists Ltd. PAGE 3-5 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Table 3-4: Generalized Lifecycle Model for LCB High-Volume Roads: Capital Activity Description Cost per Centreline- kilometre Average Annual Cost per Centreline- kilometre Age Condition / Performance Single surface treatment $28,000 $1,870 3 Microseal $35,000 $2,330 7 PCI ~ 55 Replace culverts $4,790 $320 14 Ditching $14,000 $930 14 Brushing $17,500 $1,170 14 Pulverize surface and double surface treatment $68,250 $4,550 15 PCI ~ 55 Total $167,540 $11,170 3.2.2.3 LCB - Low-Volume Road Generalized Lifecycle Model Table 3-5 shows the parameters of the generalized lifecycle model for LCB Low-Volume roads. Average annual lifecycle capital costs are $8,380 per centreline-kilometre. With 6.8 centreline-kilometres of roads in this category, the total average annual lifecycle capital cost is $57,100 Watson & Associates Economists Ltd. PAGE 3-6 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Table 3-5: Generalized Lifecycle Model for LCB - Low-Volume Roads: Capital Activity Description Cost per Centreline- kilometre Average Annual Cost per Centreline- kilometre Age Condition / Performance Single surface treatment $28,000 $1,400 5 Microseal $35,000 $1,750 10 PCI ~ 55 Replace culverts $4,790 $240 19 Ditching $14,000 $700 19 Brushing $17,500 $875 19 Pulverize surface and double surface treatment $68,250 $3,410 20 PCI ~ 55 Total $167,540 $8,380 3.2.2.4 Gravel - High-Volume Road Generalized Lifecycle Model Table 3-6 shows the parameters of the generalized lifecycle model for Gravel - High- Volume roads. Average annual lifecycle capital costs are $1,670 per centreline- kilometre. With 65.7 centreline-kilometres of roads in this category, the total average annual lifecycle capital cost is $109,700 Table 3-6: Generalized Lifecycle Model for Gravel - High-Volume Roads: Capital Activity Description Cost per Centreline- kilometre Average Annual Cost per Centreline- kilometre Age Condition / Performance Regravelling $8,350 $1,670 5 Total $8,350 $1,670 3.2.2.5 Gravel - Low-Volume Road Generalized Lifecycle Model Table 3-7 shows the parameters of the generalized lifecycle model for Gravel - Low- Volume roads. Average annual lifecycle capital costs are $1,040 per centreline- kilometre. With 35.0 centreline-kilometres of roads in this category, the total average annual lifecycle capital cost is $36,500 Watson & Associates Economists Ltd. PAGE 3-7 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Table 3-7: Generalized Lifecycle Model for Gravel - Low-Volume Roads: Capital Activity Description Cost per Centreline- kilometre Average Annual Cost per Centreline- kilometre Age Condition / Performance Regravelling $8,350 $1,040 8 Total $8,350 $1,040 3.2.2.6 Bridges Generalized Lifecycle Model Table 3-8 shows the parameters of the generalized lifecycle model for bridges. Average annual lifecycle capital costs are 2% of replacement cost. With a total replacement cost of $5,172,000 for eight bridges, the total average annual lifecycle capital cost is $103,400. Table 3-8: Generalized Lifecycle Model for Bridges: Capital Activity Description Percentage of Replacement Cost Average Annual Cost per Centreline- kilometre Age Condition / Performance Minor Rehabilitation 15% 0.20% 25 Major Rehabilitation 35% 0.47% 50 Replacement1 100% 1.33% 75 Total 150% 2% 3.2.2.7 Concrete Culverts Generalized Lifecycle Model Table 3-9 shows the parameters of the generalized lifecycle model for concrete culverts. Average annual lifecycle capital costs are 1.8% of replacement cost. With a total replacement cost of $739,000 for two concrete culverts, the total average annual lifecycle capital cost is $13,300. 1 It is assumed that bridges will be replaced with like-for-like. The 2020 OSIM report suggests that some narrow bridges should be replaced with 10 metre wide bridges to meet current standards. The increased cost of the larger bridges is not incorporated into the generalized lifecycle model. Watson & Associates Economists Ltd. PAGE 3-8 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Table 3-9: Generalized Lifecycle Model for Concrete Culverts: Capital Activity Description Percentage of Replacement Cost Average Annual Cost per Centreline- kilometre Age Condition / Performance Major Rehabilitation 35% 0.47% 40 Replacement 100% 1.33% 75 Total 135% 1.8% 3.2.2.8 Steel Culverts Generalized Lifecycle Model Table 3-10 shows the parameters of the generalized lifecycle model for steel culverts. Average annual lifecycle capital costs are 2% of replacement cost. With a total replacement cost of $275,000 for one steel culvert, the total average annual lifecycle capital cost is $5,500. Table 3-10: Generalized Lifecycle Model for Steel Culverts: Capital Activity Description Percentage of Replacement Cost Average Annual Cost per Centreline- kilometre Age Condition / Performance Replacement 100% 2% 50 Total 100% 2% 3.2.3 Average Annual Lifecycle Costs and Long-run Forecast The generalized lifecycle models were used to estimate average annual lifecycle costs and to develop a high level 100-year forecast by decade. Table 3-11 shows that the total average annual lifecycle capital cost for transportation assets is $731,500. This is comprised of $609,300 for roads and $122,300 for bridges and structural culverts. Figure 3-1 shows average annual funding requirements by decade. Funding requirements for the next 40 years are below average. The following two decades are above average with years 51-60 being 33% above the long-run average. To smooth this peak, either some projects should be done early, or a reserve should be built up to fund the peaks. Watson & Associates Economists Ltd. PAGE 3-9 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Table 3-11: Average Annual Lifecycle Costs - Transportation Assets Asset Class Average Annual Lifecycle Cost (Capital) Roads $609,300 Bridges and Structural Culverts $122,300 Total $731,500 Figure 3-1: Transportation Assets Lifecycle Management Strategy - Average Annual Funding Requirements by Decade 3.3 Facilities 3.3.1 Decision Making Process - Facilities Facilities are composite assets with individual components being replaced at the end of their useful life. For example, over time the shingles on a roof deteriorate. At some point, all the shingles are removed and replaced with new ones. The timing of this replacement is independent of the state of other facility components. All of the Township's facilities are evaluated by Township staff to identify components that need repair or replacement. For all facilities except for the SSJ Arena, staff inspections are sufficient to identify components that need to be repaired or replaced. The SSJ Arena is a larger facility and periodically requires structural inspections to ensure the 000 200 400 600 800 1,000 1,200 1-10 11-20 21-30 31-40 41-50 51-60 61-70 71-80 81-90 91-100 $ (Thousands) Time interval (years) Roads - Capital Bridges & culverts - Capital Long-run average annual lifecycle expenditure Watson & Associates Economists Ltd. PAGE 3-10 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx soundness of the substructure and superstructure. Components that are identified as needing replacement are prioritized by staff and addressed when funding is available. 3.3.2 Estimating Long-run Needs for Facilities Township staff produced a 10-year capital plan for all of the facilities except the SSJ Arena. For the arena, the Township hired WalterFedy to do a formal facility condition assessment. Figure 3-2 shows the total funding need identified for facilities. The large value in 2026 is due mainly to some large projects identified at the SSJ Arena. The average over the 10-year period is $160,400. Figure 3-2: Facilities - 10-year Capital Forecast Longer term funding requirements were identified at a high level by breaking down the list of facilities into simple facilities and more complex facilities. Simple facilities consist mainly of a shell. For example, a shed would be considered a simple facility. More complex facilities have services such as water, wastewater, electricity, and HVAC. Four of the Township's facilities were identified as being more complex: B01 - Municipal Office, B02 - Public Works Office, B09 - Former Church, and B011 Arena. The more complex facilities account for 92% of the total replacement cost of facilities. To estimate the long run lifecycle cost for more complex facilities, guidance in the 2016 Canadian Infrastructure Report Card was used. This report recommends lifecycle funding between 1.7% and 2.5% of replacement cost. The Township chose the lower end of this range because its facilities are not as complex as facilities in larger municipalities. The replacement cost of the four more complex facilities is $14.1 million. The long-run funding requirement for these facilities is 1.7% of this amount, $240,400. $0 $100 $200 $300 $400 $500 $600 $700 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Dollars (Thousands) Year Watson & Associates Economists Ltd. PAGE 3-11 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx For the simple facilities, it was felt that the funding needs identified over the next 10 years are representative of longer-term needs. The average of the 10-year forecast for these facilities is $13,100. This represents 1.0% of replacement cost. Combining the amounts for simple and more complex facilities, total long-run funding needed for facilities is $253,400 3.4 Other Assets The remainder of the Township's assets do not currently have an assessed condition, and as such will all be subject to an age-based lifecycle management strategy. The following subsections apply to Fleet, Equipment and Land Improvements. At present, the Township only performs replacement lifecycle activities in the management of its age-based assets. The costs to perform a replacement is therefore simply the current replacement cost, as of 2021. These costs were estimated by inflating historical costs and were reviewed by the Township's staff for reasonableness. Similarly, the assumptions on expected useful lives were based on accounting useful life data and reviewed by the Township's staff. 3.4.1 Decision-making Process - Fleet, Equipment, and Land Improvements Township staff identify the need to replace vehicles, equipment, and land improvements though ongoing observation of the assets during routine use. Needs are prioritized and addressed when funding is available. 3.4.2 Estimating Long-run Needs for Fleet, Equipment, and Land Improvements The long-run average annual lifecycle cost of fleet, equipment, and land improvements is estimated by dividing the replacement cost of each asset by its expected useful life. Table 3-12 shows that the total average annual lifecycle cost for these assets is $219,300. Watson & Associates Economists Ltd. PAGE 3-12 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Table 3-12: Long-run Average Annual Lifecycle Needs - Fleet, Equipment, and Land Improvements Asset Class Average Annual Lifecycle Cost Fleet $190,300 Equipment and Land Improvements $29,000 Total $219,300 Figure 3-3 and Figure 3-4 show that there is some lumpiness in the average annual funding needs in the long run. As with roads and bridges, to smooth the funding needs, either some projects should be done early, or a reserve should be built up to fund the peaks. Figure 3-3: Fleet Lifecycle Management Strategy - Average Annual Funding Requirements by Decade Figure 3-4: Equipment and Land Improvements Lifecycle Management Strategy - Average Annual Funding Requirements by Decade 0 50 100 150 200 250 300 1-10 11-20 21-30 31-40 41-50 51-60 61-70 71-80 81-90 91-100 $ (Thousands) Time interval (years) Average annual lifecycle expenditure (decade) Long-run average annual lifecycle expenditure 0 5 10 15 20 25 30 35 40 45 50 1-10 11-20 21-30 31-40 41-50 51-60 61-70 71-80 81-90 91-100 $ (Thousands) Time interval (years) Average annual lifecycle expenditure (decade) Long-run average annual lifecycle expenditure Watson & Associates Economists Ltd. H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Chapter 4 Financing Strategy Watson & Associates Economists Ltd. PAGE 4-1 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx 4. Financing Strategy 4.1 Introduction This chapter outlines the financing strategy that would sustainably fund the lifecycle management strategies presented in Chapter 3. This financing strategy focuses on examining how the Township can fund the lifecycle activities required to maintain its assets at the proposed levels of service, as identified in Chapter 2. The strategy presented is a suggested approach which should be examined and re-evaluated during the annual budgeting processes to ensure the sustainability of the Township's financial position as it relates to its assets. The state of local infrastructure and levels of service sections reported on all assets the Township has full or partial responsibility for. The financial analysis includes the full amount of capital expenditures and, where applicable, shows the funding contributions that will be made by other municipalities. Table 4-1 identifies the assets with shared responsibility along with their replacement and average annual lifecycle costs, and shows which municipalities contribute funding towards their renewal and replacement needs and their respective funding shares. It is assumed that the contributing municipalities will be able to continue funding their share of capital projects when required. Watson & Associates Economists Ltd. PAGE 4-2 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Table 4-1: Assets with Shared Responsibility Asset Municipalities and Funding Shares Total Replacement Cost Average Annual Lifecycle Cost (Total) Sundridge Strong Joly Arena Facility Strong - 50% Sundridge - 40% Joly - 10% $11,375,000 $193,400 Sundridge Strong Joly Arena - Fleet and Equipment Strong - 50% Sundridge - 40% Joly - 10% $170,900 $8,600 Joint Building Committee - Fleet Burk's Falls, Joly, Machar, Ryerson, South River, Strong, and Sundridge All 14% $33,600 $3,000 Chapman Strong Road from Broomfield Road to south end Strong - 50% Magnetawan - 50% $591,200 $3,200 Boundary Bridge No. 5 Strong - 50% Armour - 50% $500,300 $10,000 Total $12,671,000 $218,200 O. Reg. 588/17 requires at minimum a ten-year capital plan that forecasts the costs of implementing the lifecycle management strategy and the lifecycle activities required therein. The financing strategy in this asset management plan has been developed for a 10-year forecast period in order to be in compliance with this requirement. Various financing options, including reserve funds, debt, and grants were considered during the process of developing the financing strategy and are described in more detail in section 4.4 below. Watson & Associates Economists Ltd. PAGE 4-3 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx 4.2 Annual Contribution and Lifecycle Funding Target An annual lifecycle funding target describes the amount of funding that would be required annually to fully finance a lifecycle management strategy over the long term. By planning to achieve this annual funding level, the Township would theoretically be able to fully fund capital works as they arise. In practice, capital expenditures often fluctuate year-to-year based on the asset replacement and renewal/rehabilitation projects being undertaken in a particular year. By planning to achieve the lifecycle funding target over the long term, however, the periods of relatively low capital needs would allow for the building up of lifecycle reserve funds that could be drawn upon in times of relatively high capital needs. Table 4-2 presents the Township's current annual contributions towards capital-related needs - as detailed in the Township's 2021 Operating Budget - as well as the annual lifecycle funding target based on the lifecycle management strategies presented in Chapter 3 and the portion of the lifecycle funding target that the Township is responsible for. Table 4-2: Contribution Towards Capital-related Needs and Lifecycle Target (2021$) Asset Class 2021 Annual Contribution Annual Lifecycle Funding Target Township's Share of Annual Lifecycle Funding Target Roads $609,300 $607,600 Bridges and Culverts $122,300 $117,300 Facilities $253,400 $156,800 Fleet $171,300 $165,000 Equipment and Land Improvements $29,000 $28,000 Grand Total $541,900 $1,185,300 $1,074,700 The Township's share of the annual lifecycle funding target has been estimated to total $1,074,700, and this is the amount that has been built into the financial strategy outlined below. Watson & Associates Economists Ltd. PAGE 4-4 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx In comparison, the Township budgeted to contribute approximately $541,900 from the tax levy and other current revenue sources towards capital-related needs in 2021. Included in this are budgeted contributions to capital-related reserve funds, debt servicing costs, and reliable and long-term federal and provincial grants (i.e., Gas Tax and OCIF). The sum of these components is the amount of funding the Township contributed in 2021 to the provision of capital-related needs. It is noted that other capital funding sources, such as prior year surpluses and external debt financing used in 2021, are not captured in the Current Annual Contribution since they are a product of previous budgets and specific-purpose funding that cannot be relied on consistently in future years, respectively. The difference between the annual lifecycle funding target and current annual contribution is referred to as the lifecycle funding gap. The existing gap indicates that the Township is currently underfunding the annual lifecycle funding target by approximately $532,800 annually. 4.3 Annual Costs The annual capital expenditures for the Township's assets from 2021 to 2031 are presented in Table A-1 in Appendix A and are summarized in Figure 4-1 below. This expenditure forecast is based on the Township's 2021 capital budget and the lifecycle activities identified in preceding sections of this plan for 2022 and onwards. Figure 4-1: Annual Capital Expenditures - Inflated $, in Thousands The expenditure forecast includes a capital inflation factor of 3.5% annually, which aligns closely with the historical 20-year annual average rate of inflation as witnessed in Statistics Canada's Building Construction Price Index. 000 500 1,000 1,500 2,000 2,500 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 $ (Thousands) Roads Bridges and Culverts Facilities Fleet, Equipment and Land Improvements Sundridge Strong Joly Arena Joint Building Committee Watson & Associates Economists Ltd. PAGE 4-5 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx 4.4 Funding Table A-4 in Appendix A summarizes the recommended strategy to finance the asset lifecycle costs identified in Table A-1. This funding forecast was based on the funding sources identified in the Township's 2021 budget. The lifecycle costs required to sustain established level of service targets are being recovered through several methods: - Ontario Community Infrastructure Fund (OCIF) formula-based funding is identified for years in which the funding amount is known (2021). The 2021 level of OCIF funding is then maintained for the remaining years of the forecast, recognizing the OCIF as a stable and long-term funding source for capital projects. - Gas Tax funding has been shown as a stable and long-term funding source for eligible capital projects. Annual funding estimates are based on the Township's 2021 funding level. - Debt financing is shown as required in years where significant capital needs are identified. Specifically, the forecast includes total debt financing of $3,887,000 over the forecast period. This financing strategy has been developed to be fully funded, and therefore no funding shortfall has been identified. This means, however, that if identified grants are not received at expected amounts then shortfalls may present themselves. In such an event, the difference could be made up through increases to the tax levy/user rates over-and-above those presented hereafter. It is noted that this fully funded financing strategy phases in annual contributions towards capital such that the Township reaches full lifecycle funding levels by 2031. 4.5 Tax Levy Impact As discussed in section 4.2, while the annual funding requirement may fluctuate, it is important for the Township to implement a consistent, yet increasing, annual investment in capital so that the excess annual funds can accrue in capital reserve funds. Table A- 4 in Appendix A presents a summary of the impacts on the tax levy as a result of this financing strategy. Watson & Associates Economists Ltd. PAGE 4-6 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx In order to fund the recommended asset lifecycle activities over the forecast period using the Township's own available funding sources (i.e., using taxation, Gas Tax funding, OCIF funding, and debentures), an increase in the Township's taxation levy of 4.9% annually would be required from 2022 to 2031. Consideration for cash flow and positive reserve fund balances has been included in setting the capital reserve transfer amounts. A detailed continuity schedule of all capital-related reserves/reserve funds can be viewed in Table A-3 in Appendix A. Layering on assessment increases resulting from new assessment growth, assumed to be 0.50% annually, the impacts on individual property tax bills resultant from the financial strategy are estimated to be increases of 4.3% annually from 2022 to 2031. The taxation impacts identified above include inflationary adjustments to the Township's operating costs and revenues as identified in its 2021 budget (i.e., general operating inflation of 2% annually). If, however, other funding sources become available (as mentioned above), or if maintenance practices allow for the deferral of capital works, then the impact on the Township's taxation levy would potentially decrease. Further detail on the Financing Strategy is presented in Appendix A. Appendices Watson & Associates Economists Ltd. PAGE A-1 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Appendix A Financing Strategy Tables Watson & Associates Economists Ltd. PAGE A-2 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Table A-1 Capital Budget Forecast (Inflated $) 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Capital Expenditures Roads 688,400 Resurfacing 403,220 571,337 156,809 446,373 304,757 908,769 203,254 544,029 409,604 306,093 Reconstruction 736,498 394,181 193,935 85,125 84,168 131,362 126,261 1,507,091 184,828 222,617 Bridges and Culverts 143,000 136,620 113,550 58,762 20,655 - 49,170 - - - - Facilities 17,743 - 18,197 28,039 28,569 5,962 - 891 75,730 5,369 Fleet, Equipment and Land Improvements 545,500 299,943 39,957 70,071 292,045 605,720 45,728 73,156 20,147 1,023,672 26,519 Sundridge Strong Joly Arena 22,000 139,168 185,485 7,662 132,170 760,798 275,645 118,900 120,321 34,509 115,176 Joint Building Committee - - - - - - - - - 45,793 - Total Expenditures 1,398,900 1,733,192 1,304,509 505,437 1,004,406 1,784,012 1,416,637 521,572 2,192,479 1,774,136 675,775 Capital Funding Debenture Issuance 400,000 206,629 685,932 - 239,023 617,860 433,399 - 709,217 595,012 - Transfer from Operating 198,935 Transfer from Capital R.F.s 788,965 1,449,217 525,835 501,606 694,144 775,658 820,830 462,122 1,423,102 1,122,618 618,187 Contribution from Other Municipalities 11,000 77,347 92,742 3,831 71,239 390,495 162,408 59,450 60,161 56,506 57,588 Total Funding 1,398,900 1,733,192 1,304,509 505,437 1,004,406 1,784,012 1,416,637 521,572 2,192,479 1,774,136 675,775 Description Table A-2 Schedule of Debenture Repayments Year of Issuance Principal 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2021 400,000 34,500 82,927 82,927 82,927 82,927 48,427 - - - - - 2022 206,629 - - 24,223 24,223 24,223 24,223 24,223 24,223 24,223 24,223 24,223 2023 685,932 - - - 80,412 80,412 80,412 80,412 80,412 80,412 80,412 80,412 2024 - - - - - - - - - - - - 2025 239,023 - - - - - 28,021 28,021 28,021 28,021 28,021 28,021 2026 617,860 - - - - - - 72,432 72,432 72,432 72,432 72,432 2027 433,399 - - - - - - - 50,808 50,808 50,808 50,808 2028 - - - - - - - - - - - - 2029 709,217 - - - - - - - - - 83,142 83,142 2030 595,012 - - - - - - - - - - 69,754 2031 - - - - - - - - - - - - Total 3,887,072 34,500 82,927 107,150 187,563 187,563 181,083 205,088 255,896 255,896 339,038 408,791 Watson & Associates Economists Ltd. PAGE A-3 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Table A-3 Continuity of Capital Reserve Funds1 Description 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Opening Balance 1,376,162 953,226 - - 37,275 - - - 424,675 - - Transfer from Gas Tax 179,023 179,023 179,023 179,023 179,023 179,023 179,023 179,023 179,023 179,023 179,023 Transfer from OCIF 78,626 78,626 78,626 78,626 78,626 78,626 78,626 78,626 78,626 78,626 78,626 Proceeds of Disposal (Vehicles) 48,143 28,763 - 4,701 29,204 41,569 4,573 3,982 - 80,166 1,862 Transfer from Operating 50,800 209,579 268,186 276,162 370,016 476,440 558,609 620,960 740,778 784,804 850,078 Transfer to Capital 788,965 1,449,217 525,835 501,606 694,144 775,658 820,830 462,122 1,423,102 1,122,618 618,187 Closing Balance 943,788 - - 36,906 - - - 420,470 - - 491,402 Interest 9,438 - - 369 - - - 4,205 - - 4,914 1 Includes Gas Tax and OCIF Reserve Funds Watson & Associates Economists Ltd. PAGE A-4 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Table A-4 Operating Budget Forecast (Inflated $) Description 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Expenditures Operating Expenditures Council 92,900 94,800 96,700 98,600 100,600 102,600 104,600 106,700 108,800 111,000 113,200 Environmental Services 280,557 286,200 291,900 297,700 303,700 309,800 316,000 322,300 328,700 335,300 342,000 General Government 755,976 730,300 744,900 759,800 775,000 790,500 806,300 822,400 838,900 855,700 872,800 Health services 240,343 245,100 250,100 255,100 260,200 265,400 270,700 276,100 281,600 287,200 293,000 Planning and development 12,802 13,100 13,300 13,600 13,900 14,100 14,400 14,700 15,000 15,300 15,600 Protection 543,447 554,300 565,400 576,700 588,200 600,000 612,000 624,200 636,700 649,500 662,500 Recreation 306,529 210,700 214,900 219,200 223,600 228,000 232,600 237,200 242,000 246,800 251,800 Social and family services 225,777 230,300 234,900 239,600 244,400 249,300 254,300 259,300 264,500 269,800 275,200 Transportation 966,551 985,900 1,005,600 1,025,700 1,046,200 1,067,200 1,088,500 1,110,300 1,132,500 1,155,100 1,178,200 Capital-related Expenditures Transfers to Capital 198,935 Transfers to Capital Res./R.F.s 50,800 209,579 268,186 276,162 370,016 476,440 558,609 620,960 740,778 784,804 850,078 New Debenture Repayments 34,500 82,927 107,150 187,563 187,563 181,083 205,088 255,896 255,896 339,038 408,791 Total Expenditures 3,709,116 3,643,206 3,793,036 3,949,724 4,113,379 4,284,423 4,463,097 4,650,056 4,845,374 5,049,541 5,263,169 Operating Revenues Department Revenue Federal Grants - Conditional 47,600 - - - - - - - - - - Provincial Grants - Conditional 5,000 - - - - - - - - - - Other 291,808 297,600 303,600 309,700 315,900 322,200 328,600 335,200 341,900 348,700 355,700 Miscellaneous Miscellaneous: One-Time Grants 156,734 - - - - - - - - - - Miscellaneous: OMPF 517,600 528,000 538,500 549,300 560,300 571,500 582,900 594,600 606,500 618,600 631,000 Miscellaneous: Other 118,836 121,200 123,600 126,100 128,600 131,200 133,800 136,500 139,200 142,000 144,900 Total Operating Revenues 1,137,578 946,800 965,700 985,100 1,004,800 1,024,900 1,045,300 1,066,300 1,087,600 1,109,300 1,131,600 Tax Levy Tax Revenues Required 2,571,539 2,696,406 2,827,336 2,964,624 3,108,579 3,259,523 3,417,797 3,583,756 3,757,774 3,940,241 4,131,569 Prior Year Tax Levy 2,571,539 2,696,406 2,827,336 2,964,624 3,108,579 3,259,523 3,417,797 3,583,756 3,757,774 3,940,241 Add: Tax Revenues from Incremental Assessment 12,858 13,482 14,137 14,823 15,543 16,298 17,089 17,919 18,789 19,701 Tax Revenues at 0% Tax Rate Increase 2,584,397 2,709,888 2,841,473 2,979,448 3,124,122 3,275,821 3,434,886 3,601,675 3,776,563 3,959,942 Additional Increase in Tax Levy 112,009 117,448 123,151 129,131 135,401 141,976 148,870 156,099 163,679 171,626 Total Tax Revenues 2,571,539 2,696,406 2,827,336 2,964,624 3,108,579 3,259,523 3,417,797 3,583,756 3,757,774 3,940,241 4,131,569 Estimated Impact on Tax Bills 4.3% 4.3% 4.3% 4.3% 4.3% 4.3% 4.3% 4.3% 4.3% 4.3% Watson & Associates Economists Ltd. PAGE B-1 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Appendix B Road Condition Maps Watson & Associates Economists Ltd. PAGE B-2 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Map B-1: Paved Roads by Condition Watson & Associates Economists Ltd. PAGE B-3 H:\Strong\2021 AMP\Report\Strong AMP - Final.docx Map B-2: Gravel Roads by Condition