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POL.COR.17.07
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Asset Management Policy
Policy
POL.COR.17.07
Asset Management Policy
Policy Type:
Corporate Policy (Approved by Council)
Date Approved:
May 24, 2017
Department:
Finance and IT Services
Revisions Approved:
June 3, 2019
Staff Report:
FAF.17.68, FAF.19.058
By-Law No.:
N/A
Policy Statement
The Town of The Blue Mountains (the "Town") promotes the use of Asset Management
principles and practices as outlined in the Infrastructure for Jobs and Prosperity Act, 2015.
Under this Act, Asset Management Planning for Municipal Infrastructure (O.Reg 588/17) was
created to guide municipalities in the creation of Asset Management Plans and the long-term
planning of infrastructure.
Purpose
The Asset Management Policy will outline principles, roles and responsibilities for asset
management practices that enable a coordinated, cost-effective and organizationally
sustainable approach for the Town as per O.Reg 588/17.
Application
This policy applies to all staff using or managing assets to provide public services for the
citizens, businesses and visitors of the Town.
Principles of Asset Management
The Act outlines 13 principles that the Town shall consider when making infrastructure related
decisions:
1. All long-term capital investment decisions should take a long-term view and should be
mindful of demographic and economic trends in Ontario;
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Asset Management Policy
2. All long-term capital investment decisions should consider all applicable budgets or
fiscals. This includes annual operating and capital budgets, the harbour long-term
financial plan and the water financial plan;
3. Infrastructure priorities should be clearly identifiable;
4. All long-term capital investment decisions should ensure the continued provision of core
public services;
5. All long-term capital investment decisions should promote economic competitiveness,
productivity, job creation and training opportunities;
6. All long-term capital investment decisions should ensure the health and safety of
workers involved in the construction and maintenance of infrastructure of assets is
protected;
7. All long-term capital investment decisions should foster innovation and be creating
opportunities to make use of innovative technologies, services and practices,
particularly where doing so would utilize technology, techniques and practices
developed in Ontario;
8. All long-term capital investment decisions should be evidence-based and transparent;
9. Any other plans or strategies that have been established by another Act that do not bind
the Town will be considered to the extent to which they are relevant;
10. All long-term capital investment decisions should promote accessibility for persons with
disabilities;
11. All long-term capital investment decisions should minimize the impact of the
infrastructure on the environment, respect and help maintain ecological and biological
diversity, and should be resilient to the effects of climate change;
12. All long-term capital investment decisions should endeavour to make use of acceptable
recycled aggregate; and
13. All long-term capital investment decisions should promote community benefits, which
are the supplementary social and economic benefits arising from infrastructure projects
that are intended to improve the well-being of a community.
Asset Management Plan
The Asset Management Plan will consist of the following six components:
1. Asset Registry - maintains the Town's capital assets inventory including the asset's value
and remaining life.
2. Preventative Maintenance - assists to schedule regular maintenance activities to ensure
assets reach or exceed their service levels and life expectancy by reducing the risk of asset
breakdowns or failure.
3. Lifecycle Management - guides an asset through its service life including planning,
acquisition, operation, condition inspections, rehabilitation, disposal and replacement by
utilizing industry best practices to encompass all stages of the asset lifecycle.
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Asset Management Policy
4. Level of Service - identifies the current assets that the Town should own to meet the
Council-directed Level of Service for the citizens, visitors, and businesses of the Town.
5. Financial Strategy - prioritizes maintenance and capital funding to ensure long-term
financial sustainability for all assets.
6. Risk Management - uses probability and consequences of failure as criteria when
prioritizing maintenance and capital works.
Asset Management and the Budget
Section 3. (1) 2. of O.Reg 588/17 requires that the Town outline the process under which the
Asset Management Plan will be used to develop the annual budgets and any long-term financial
plans.
The Town's asset management plan will be the foundation of all future capital budgets as this
plan will contain the list of capital priorities for staff and Council. The list will include both the
replacement cost of the asset as well as the full lifecycle costs to better inform Council when
making decisions regarding both the capital and operating budgets.
In addition, the Town's asset management plan will be used to create the short, medium and
long-term capital requirements when completing a long-term financial plan for a department.
Asset Management and the County
Section 3. (1) 9. of O.Reg 588/17 states that the Town is committed to coordinating planning for
asset management where there is joint ownership of assets with the County and neighbouring
municipalities.
The Town shares ownership of some assets (such as a transit bus shared with the Town of
Collingwood) and owns assets on County lands (such as sidewalks). When forecasting the
replacement of these assets, the Town will coordinate with the relevant municipal government.
Asset Management and Climate Change
Section 3. (1) 5. of O.Reg 588/17 requires that the Town will consider the following during asset
management planning:
- Actions to address the vulnerability that may be caused by climate change to municipal
infrastructure assets;
- Anticipated cost of these vulnerabilities;
- Adaption opportunities to manage these vulnerabilities;
- Mitigation approaches to climate change; and
- Disaster planning and contingency funding.
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Asset Management Policy
The Town recognizes that climate change will put additional stress on critical infrastructure.
Increased frequency and intensity of rainfall and more frequent freeze-thaw cycles can cause
soil instability and ground movement causing damage to roads, sidewalks, and underground
infrastructure. Furthermore, increased frequency of extreme weather events causes strain
not just on linear infrastructure, but also on services critical to an emergency such as fire
services, municipal facilities and others. The Town may choose to explore opportunities to
adapt infrastructure to a changing climate, most notably through the consideration of
alternative and new technologies, though only if costs and benefits are in line with Town
objectives. A more comprehensive list of climate change actions are appended to this policy.
Asset Management for Water and Wastewater
Section 3. (1) 6. of O.Reg 588/17 requires the Town to establish a process to ensure that asset
management planning aligns with the Town's water financial plan as per the Safe Drinking
Water Act, 2002, while a similar wastewater financial plan is not legislated, it is encouraged.
The Town has prepared a Water Financial Plan consistent with the requirements of the Safe
Drinking Water Act and Ontario Regulation 453/07 for the municipal water system. The
Financial Plan is for a period of 6 years to assist staff with long-term cost recovery and capital
planning. Under Ontario Regulation 453/07, the Town is required to complete a financial plan
for municipal water services as part of the application process for renewal of the Drinking
Water Licenses.
Asset Management and Land Use Planning
Section 3. (1) 7. of O.Reg 588/17 requires the Town to align asset management planning with
Ontario's land use planning framework, including relevant policy statements issued under
subsection 3(1) of the Planning Act.
Alignment with Land Use Planning
The alignment of municipal planning initiatives and asset management is particularly important
when considering corporate planning initiatives and resources. The Planning and Development
Services Department supports provincial land-use legislation and incorporates the key policy
principles and issues that affect each community.
There are three key planning related documents that align with the Town's asset management
program:
1. Provincial Policy Statement
The Provincial Policy Statement (PPS, 2014) is the statement of the provincial government's
policies on land use planning. It applies to the entire province and provides clear policy
direction on land use planning to promote strong communities, a strong economy, and a clean
and healthy environment. Specifically related to asset management, the PPS has several
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Asset Management Policy
policies related to the efficient use and management of land and infrastructure, in order to
ensure that infrastructure is financially viable over the lifecycle of the asset.
2. Official Plan
The Town's Official Plan outlines the principles the Town adheres to in regards to land use
planning and development. The Official Plan includes a provision for ensuring that land use
planning is aligned with asset management. The Official Plan states:
For the purposes of settlement area boundary expansion or employment area re-designation,
means an official plan review which is initiated by the County or Town, or an official plan
amendment which is initiated or adopted by the County or Town, which:
...is integrated with planning for infrastructure and public service facilities, and considers
financial viability over the life cycle of these assets, which may be demonstrated through
asset management planning (pg. 247).
3. Development Charges Background Study
The Development Charges Background Study is rooted in identifying the capital infrastructure
requirements necessary to accommodate the development expected to occur in the Town. As
development charges are only responsible for the first round capital acquisition costs, the Town
would be responsible for funding the asset management requirements associated with the new
infrastructure emplaced in addition to regular operations. Under the requirements of the new
DCA regulations, an asset management plan must be prepared with the completion of the DC
Background study illustrating that the assets funded under the by-law are financially
sustainable. This analysis has been incorporated in the study currently underway.
Asset Management and Tangible Capital Assets
Section 3. (1) 8. of O.Reg 588/17 requires that the threshold used for asset management
planning aligns with those used for Tangible Capital Assets or if they differ then an explanation
be included as to why. As per the Town's Tangible Capital Asset Policy, the chart below outlines
the threshold:
Tangible Capital Asset Classes
Threshold
Land
All land purchases are capitalized
Land Improvements
$5,000
Buildings
$5,000
Vehicles, Machinery and Equipment
$5,000
Pooled Tangible Capital Assets
$5,000
Linear (Water, Wastewater, Roads)
$10,000
For the purposes of asset management, a threshold of $15,000 will be used for all asset classes.
The threshold has been set higher than under the Tangible Capital Asset Policy to eliminate
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some of the smaller assets (small pumps, hand tools etc.). To include all of these assets, at this
time, would over-burden staff as the implementation of Cityworks continues to be rolled out.
In addition, pooled assets which are allowed under the Tangible Capital Asset Policy, will not be
included because as a single stand-alone asset the items (usually computers and books) are
much smaller in cost.
Continuous Improvement
The major premise of comprehensive corporate asset management is that an organization will
seldom have perfect processes and data to manage the asset portfolio. Instead, the underlying
culture of continuous improvement and reliability is its key to success. These improvements will
be part of the Town's evolving Asset Management program.
Definitions
Asset Management: a process to guide the planning, acquisition, operation and maintenance,
rehabilitation and disposal of assets. Its objective is to maximize asset service delivery potential,
manage related risks and minimize costs of ownership while delivering acceptable levels of
service to the public in a sustainable manner.
Capital Assets: non-financial assets having physical substance that:
i.
are held for use by the Town in the production or supply of goods and services, for
rental to others, for administrative purposes or for the development, construction,
maintenance or repair of other tangible capital assets;
ii.
have useful lives extending beyond a year and are intended to be used on a continuing
basis; and
iii.
are not intended for sale in the ordinary course of operations.
Capital Assets do not include such things as:
i.
inventories held for resale (including land);
ii.
capital grants;
iii.
intangible assets, except for software which is tangible for the purpose of capitalization;
iv.
feasibility studies, business cases, management reviews (post implementation); and
v.
assets below the thresholds outlined in the Tangible Capital Asset Policy
(POL.COR.19.04).
Life-cycle: the time interval that commences with the identification of the need for an asset and
terminates with the disposal of the asset.
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Asset Management Policy
Procedures
The following chart outlines the governance model for Asset Management as well as the roles
and responsibilities of each level of governance:
Council
Responsible for approving the Asset Management Policy and Strategy and other items related
to the Asset Management Plan such as Levels of Service and acceptable risk. Council will set the
spending levels on capital assets through the annual operating and capital budgets.
Senior Management Team
Provides overall direction throughout the corporation to ensure that the asset management
goals are achieved and that this plan aligns with other corporate plans.
Service Area Managers
Responsible for the assets that they are assigned including annual maintenance, reporting
obligations, and capital purchases.
Staff
These employees consume the capital assets as they provide services to the citizens, visitors
and businesses.
Exclusions
None.
Council
Senior
Management Team
Service Area Managers
Staff
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References and Related Policies
POL.COR.19.04 - Tangible Capital Assets Policy
Consequences of Non-Compliance
Non-compliance with the Municipal Act, 2001 is subject to the remedies prescribed therein.
Review Cycle
This policy will be reviewed once per term of Council.
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Appendix 1