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6.4 Asset Management Strategy
APPENDIX 6.4
ASSET MANAGEMENT STRATEGY FOR CAMPBELL RIVER – 2016
Prepared by: AIM Committee (Ron Bowles, Jennifer Peters, Drew Hadfield, Alaina Maher & Jason Decksheimer) Presented on: April 27, 2016
ASSET MANAGEMENT STRATEGY
EXECUTIVE SUMMARY
The Federation of Canadian Municipalities (FCM) stunned the government world in 2007 with its release of the report Danger Ahead: The Coming Collapse of Canada’s Municipal Infrastructure. 1 Since then, a new term “infrastructure deficit” has become synonymous with municipal governance. The Canadian Infrastructure Report Card2 - a collaboration of the FCM and industry trade and professional associations, first published in 2012 and updated early in 2016, outlines the state of Canadian municipal infrastructure. More importantly, the 2016 report lays out a path for success. The report’s major findings are:
1) Municipalities own 60% of Canada’s core infrastructure with an estimated value of $80,000 per household; 2) One third of municipal infrastructure is in fair, poor and very poor condition, with 35% in need of attention; 3) Increasing infrastructure investment will reduce deterioration, with critical areas being roads, sidewalks, storm, water and recreation; 4) Reinvestment will save money in the long-term as one dollar invested in the first 75% of the asset’s life eliminates or delays spending of six to ten dollars on future rehabilitation; and 5) Communities will benefit from increased asset management capacity. 56% of medium-sized municipalities have a formal asset management plan in place, 40% have a computer-based management system and 19% have a formal mechanism to factor climate change into decision-making.
Given these findings, the Asset Infrastructure Management (AIM) Committee was formed to develop a framework for how the City of Campbell River can achieve an active and functional asset management program. The formulated Asset Management (AM) strategy identifies how the City can address current shortcomings, safeguarding City assets, assisting in decision making, and achieving a fully integrated AM plan by 2021.
1 https://www.fcm.ca/Documents/reports/Danger_Ahead_The_coming_collapse_of_Canadas_municipal_infrastructure_EN.pdf 2 http://canadainfrastructure.ca/downloads/Canadian_Infrastructure_Report_2016.pdf
ASSET MANAGEMENT STRATEGY
Locally, the City of Campbell River views asset management as an opportunity to use industry best-practices to tackle the looming infrastructure deficit problem. In its 2015 Strategic Plan, City Council adopted a priority “We will plan proactively for the long-term costs of maintaining our critical infrastructure.” To support this strategic item, the Asset Infrastructure Management (AIM) Committee has been created. The Committee’s long range goal is to establish an active and functional asset management program for the City. The AIM Committee will be taking a leadership role in the City to manage an enormous capital asset portfolio and tackle the growing infrastructure deficit.
Campbell River is not alone and Asset Management B.C. has produced a roadmap for a successful implementation of a municipal asset management program; the Guide for using the Asset Management B.C. Roadmap. 3 This roadmap has been incorporated as the guiding document for Campbell River’s asset management program. It will be a long-term endeavor for the City and the first task is to adopt an Asset Management strategy.
1) Lower infrastructure lifecycle costs; 2) Lower infrastructure failure risk; 3) Provide service and taxation stability; 4) Increase opportunity for government grant funding; and 5) Increase ability to manage impacts of climate change.
Together, let’s take AIM.
3 https://www.civicinfo.bc.ca/Library/Asset_Management/AM_Roadmap/Guide_for_using_the_Roadmap%20--AMBC--Sept_23_2011.pdf
ASSET MANAGEMENT STRATEGY
AIM COMMITTEE MISSION
The City of Campbell River will be a leader in asset management to maintain our community assets to meet current and future service needs. To lead this charge, the Asset Infrastructure Management (AIM) Committee will be tasked with meeting the ultimate goal of an integrated asset management plan by 2021. The AIM Committee will develop a strategy and execute a process towards establishing, implementing, auditing, refining and communicating a corporate-wide asset management system.
AIM COMMITTEE MANDATE (GOALS)
To develop a process for:
• Defining and recording information on physical assets • Understanding replacement costs and condition assessments • Defining acceptable risk and service levels • Ensuring a corporate-wide, integrated asset replacement process • Supporting the development of a stable long-term financial plan • Communicating the steps, the obstacles and the successes of the asset management program internally
AIM COMMITTEE CHARTER (TERMS OF REFERENCE)
The AIM Committee is a cross-departmental, staff led group of technical and financial professionals committed to Council’s strategic objective – we plan proactively for the long-term costs of maintaining our critical infrastructure. All decision making will be by consensus. All policy and budget recommendations will be to Council, through the City Manager. All operational decisions will be through the City Manager.
ASSET MANAGEMENT STRATEGY
STRENGTHS
• Council strategic objective to improve infrastructure management • Some departments have started developing components of an Asset Management program • Good GIS system • Asset experts on staff • PSAB 3150 Tangible Capital Asset database for baseline asset register information • Some risk and condition assessments started • Ability to raise funding • AIM Committee • Access to other municipal and industry best practices • Eagerness at staff and department level to improve processes
WEAKNESSES
• Lack of accurate and complete asset registers for all asset categories • High proportion of assets at or beyond expected lifespan • No standardization of Asset Management practices or protocols between departments • Capital planning decisions frequently made by professional judgement, not knowledge based condition/risk assessment • Limited condition assessment information on many assets • Undefined community service needs relating to asset condition • Lack of clarity on AM benefits/outcomes • Limited defined service levels for municipal services
OPPORTUNITIES
• Improved capital renewal decision making process • Surety and consistency in future service levels • Stable taxes and fees • Improved maintenance practices resulting in extended asset lifespan • Community/Council defined service levels • Funding dictated by renewal needs, not vice versa • Most efficient use of scarce financial and staff resources • Risk levels defined for all asset categories • Most accurate asset registers / condition information available
THREATS
• Asset failure resulting in reduced or interrupted services • Increased financial, safety, environmental and health risks • Legislated mandate of other levels of government • Reduced access to government grants • Reduced employee morale and corporate image • Limited resources to implement Asset Management program • Unstable and unforeseen tax/fee increases for capital renewal • Decisions made without formal risk/condition assessment information
ASSET MANAGEMENT STRATEGY
Major asset categories were scored from 1 to 4 on 21 different criteria, ranging from key attribute data to decision making. The City of Campbell River self-assessment results are:
4
City of Campbell River Self Assessment
3
2
1
Roads Storm Facilities Fleet Parks Water Wastewater
Asset Category
1= No capacity 2 = Fair capacity 3 = Good capacity 4 = High capacity
4 http://www.civicinfo.bc.ca/Library/Asset_Management/Tools_and_Resources/AssetSMART_2%20-_A_Local_Government_Self_Assessment_Tool--LGAMWG-September_2015.pdf
ASSET MANAGEMENT STRATEGY
ASSET MANAGEMENT B.C. GAP ANALYSIS 5
A comparison between current practise at the City of Campbell River and the Asset Management B.C. Roadmap identified the following gaps in AM practices:
1.0 Know Your Assets
Gap 1 No master asset list including asset type, location, quantity/size, material, useful life, install date and remaining life. Gap 2 No componentized asset inventories for all asset categories. Gap 3 No formal decision making tools, consistent data/asset management database for all asset categories. Varied data sources. Gap 4 No linkage or consistency between various data sources, GIS and financial information. Gap 5 No single department or person responsible for asset management data management, accuracy and process.
2.0 Know Your Financial Situation
Gap 6 No list of depreciated and replacement costs for all asset classes. Gap 7 No componentized or fully reliable historical operations or repairs and maintenance costs. Gap 8 Future capital planning based on historical spending and not on a data supported replacement plan.
3.0 Understand Decision Making
Gap 9 Very limited formal (written) decision making processes, across the whole organization. Gap 10 No improvement plan or consideration of desired decision making process.
5 http://www.civicinfo.bc.ca/Library/Asset_Management/AM_Roadmap/Roadmap_Diagram--AMBC--Sept_23_2011.pdf
ASSET MANAGEMENT STRATEGY
4.0 Manage Your Asset Lifecycle
Gap 11 Almost no current condition information or rating across all asset classes. Gap 12 Other than regulatory, very little stated levels of service. Applies across organization, particularly relating to assets. Gap 13 Minimal formal renewal or replacement decision process, particularly regarding maintenance practices.
5.0 Know the Rules
Gap 14 Limited proactive stakeholder engagement. Gap 15 Very limited internal/operational goals, performance measures and strategic priorities.
6.0 Sustainability Monitoring
Gap 16 Sustainability (Financial/Environmental/Social) reporting is at a high-level and without measurable, direct and operational action plans. Gap 17 Renewal coordination is done on a project by project basis, not on a whole system asset class basis.
