Asset Management Plan

TOWNSHIP OF LAURENTIAN VALLEY

POLICY MANUAL

POLICY #:

FIN-08

NAME:

Strategic Asset Management Policy

DEPARTMENT:

Finance

SECTION:

Asset Management

EFFECTIVE DATE:

April 16, 2019

LAST REVISION DATE:

APPROVAL MOTION #:

RM19-04-056

COVERAGE:

All Assets

Ratification Date:

April 15, 2019

PURPOSE

This policy articulates a commitment to the development of the Township’s asset management program and provides leadership in implementing the asset management program. It is intended to guide the consistent use of asset management across the organization, to enable evidence-based decision-making for the management of municipal infrastructure assets and to support the delivery of sustainable community services now and in the future.

By applying sound asset management practices, the Township will work to ensure that municipal infrastructure assets meet expected performance levels and provide desired services in the most efficient and effective manner to reduce both cost and risk. Linking service outcomes to these key principles of asset management will assist the Township in understanding which investment needs are most critical and optimizing investment for the betterment of the whole community.

This policy establishes an organization-wide commitment to good stewardship of municipal infrastructure assets through the adoption of best practices regarding asset management planning.

BACKGROUND

The Township is responsible for providing a variety of essential services to the community, including safe and reliable transportation networks, potable drinking water, collection and treatment of wastewater, environmental management and stewardship activities including stormwater management, waste collection, and recreation programs and opportunities. To deliver all these services, the Township owns and manages a diverse municipal infrastructure asset portfolio of roads, water distribution as well as wastewater collection, culverts, storm sewers, vehicles and equipment, land and land improvements, (e.g., parks), facilities, and trails, as well as supporting machinery and equipment and fleet. The social, economic, and environmental wellbeing of the community depends on the reliable performance of these municipal infrastructure assets, so it is critical to implement a systematic, sustainable approach to manage them.

Asset management is such an approach. It is the set of activities (policies, practices and procedures) that help an organization minimize the costs and risks of owning municipal infrastructure assets while still providing the community with the services it expects. It allows organizations to make informed decisions related to planning, building, operating, maintaining, renewing, replacing and disposing of municipal infrastructure assets through a wide range of lifecycle activities.

Since asset management deals with such a wide range of municipal infrastructure assets and services, it requires coordination of multiple activities, processes and people across the entire organization. This includes departments and service areas such as Finance, Public Works, Building, Planning, Recreation, and Emergency Services. Adopting a structured and coordinated approach based on key principles of asset management will help guide the Township in making better-informed decisions.

A comprehensive and holistic asset management approach will support efficient and effective delivery of expected levels of service for the long-term management and stewardship of all municipal infrastructure assets. It will also align the Township with provincial and national standards and regulations such as the Infrastructure for Jobs and Prosperity Act, 2015 and Ontario Regulation 588/17, enabling continued access to available grant funding opportunities.

The approval of this policy is an important step towards integrating the Township’s strategic mission, vision and goals with its asset management program. This will help the Township maintain critical municipal infrastructure assets in a state of good repair and continue to provide vital services to the community in a consistent, reliable and sustainable manner.

Alignment with the Township’s Strategic Direction:

For an asset management program to be effective, it is important that staff, elected members of Council, and the public at large understand how the program can help support and achieve strategic community priorities. This policy was developed to align with the Township’s approved Strategic Plan and Official Plan.

Policy Statement:

To guide the Township’s asset management program, the following policy statements have been developed:

1. The Township will continue to implement an enterprise-wide asset management program through all departments. The program will consider lifecycle and risk management of all municipal infrastructure assets, with the goal of minimizing total ownership costs while providing desired levels of service to the community.

1. The Township will implement a continuous improvement approach and work toward adopting best practices in asset management planning, including:

                    i.            Collection and maintenance of complete and accurate asset data

                   ii.            Adoption of condition assessment protocols to gather and verify field information for key asset classes and categories

                 iii.            Development of risk and criticality Models

                 iv.            Adoption of a lifecycle management approach

                   v.            Development of short- and long-term financial strategies

                 vi.            Development of a level of service framework

1. The Township will continue to develop and maintain an asset inventory of all municipal infrastructure assets which includes unique ID, description, location information, value (both historical and replacement), performance characteristics and/or condition, estimated remaining life and estimated repair, rehabilitation or replacement date; and estimated cost repair, rehabilitation or replacement costs.

1. The Township will develop an asset management plan (AMP) that incorporates all infrastructure types and municipal infrastructure assets that meet the capitalization thresholds outlined in the Tangible Capital Asset Policy. The most recent AMP (2013) recommends that the plan is to be updated on an annual basis. After completion of an AMP that includes analysis of proposed levels of service in 2024, the AMP will be reviewed and updated at least every five years in accordance with O. Reg. 588/17 requirements. This will promote, document and communicate continuous improvement of the asset management program.

For management purposes, it can be useful to inventory, track, and report on municipal infrastructure assets that fall below the relevant capitalization threshold. This could include pooled and controlled assets, as outlined in the Tangible Capital Asset Policy. Recognizing that it could be beneficial to include these types of assets in AMPs, the Township will consider incorporating assets with values below the capitalization threshold as appropriate, based on the objective of managing municipal infrastructure in a sustainable way.

Works-In-Progress will not be considered in AMPs until they are placed into service.

1. The Township will integrate asset management plans and practices with its long- term financial planning and budgeting strategies. This includes the development of financial plans that determine the level of funding required to achieve short- term operating and maintenance needs, in addition to long-term funding needs to replace and/or renew municipal infrastructure assets based on full lifecycle costing.

1. The Township will explore innovative funding and service delivery opportunities, including but not limited to grant programs, public-private partnerships (P3), alternative financing and procurement (AFP) approaches, and shared provision of services, as appropriate.

1. The Township will develop meaningful performance metrics and reporting tools based on legislative requirements and the community’s service expectations. This will help transparently communicate and display the current state of asset management practice to Council and the community.

1. The Township will consider the risks and vulnerabilities of municipal infrastructure assets to climate change and the actions that may be required including, but not limited to, anticipated costs that could arise from these impacts, adaptation opportunities, mitigation approaches, disaster planning and contingency funding. Impacts may include matters relating to operations, levels of service and lifecycle management.

1. The Township will align all asset management planning with the Province of Ontario’s land-use planning framework, including any relevant policy statements issued under section 3(1) of the Planning Act. Asset management planning will conform with the provincial plans that are in effect on that date and will be consistent with all municipal official plans

1. The Township will coordinate planning for interrelated municipal infrastructure assets with separate ownership structures (e.g., Renfrew County, other neighbouring municipalities, etc.) by taking part in collaborative opportunities with neighbouring municipalities and jointly-owned municipal bodies wherever viable and beneficial.

1. The Township will develop processes and provide opportunities for municipal residents and other interested parties to offer input into asset management planning wherever and whenever possible.

1. The Township will review and, if necessary, update this Asset Management Policy at least every five years following July 1, 2019.

Roles and Responsibilities:

The development and continuous support of the Township’s asset management program requires a wide range of duties and responsibilities. The following passages outline the persons responsible for these tasks:

1. 1.      Council

                    i.            Provide input into policy development and policy updates

                   ii.            Approve the AM policy and direction of the AM program

                 iii.            Maintain adequate organizational capacity to support the core practices of the AM program

                 iv.            Prioritize effective stewardship of assets in adoption and ongoing review of policy and budgets

                   v.            Provide input in developing appropriate levels of service

1. 2.      Executive Leads (Treasurer and Public Works Manager)

                    i.            Develop policy and policy updates

                   ii.            Provide organization-wide leadership in AM practices and concepts

                 iii.            Provide departmental staff coordination

                 iv.            Establish and monitor levels of service

                   v.            Coordinate and track AM program implementation and progress

                 vi.            Report to Council on the asset management program based on relevant key performance indicators

1. 3.      Corporate Asset Management Group / Senior Management Team

                    i.            Develop policy and policy updates

                   ii.            Provide corporate oversight to goals and directions and ensure the AM program aligns with the Township’s strategic plan

                 iii.            Ensure that adequate resources are available to implement and maintain core AM practices

                 iv.            Provide departmental staff coordination

                   v.            Establish and monitor levels of service and key performance indicators

                 vi.            Track, analyze and report on AM program progress and results

1. 4.      Departmental Staff

                    i.            Use the new business processes and technology tools developed as part of the AM program

                   ii.            Participate in implementation task teams to carry out AM activities

                 iii.            Provide input into establishing levels of service, and monitor key performance indicators for reporting to the Senior Management Team

                 iv.            Provide support and direction for AM practices within their department

                   v.            Track, analyze and report on AM program progress and results

Key Principles:

The Township will consider the following principles as outlined in section 3 of the Infrastructure for Jobs and Prosperity Act, 2015, when making decisions regarding asset management:

1. Infrastructure planning and investment should take a long-term view, and decision-makers should take into account the needs of citizens by being mindful of, among other things, demographic and economic trends.

1. Infrastructure planning and investment should take into account any applicable budgets or fiscal plans.

1. Infrastructure priorities should be clearly identified in order to better inform investment decisions respecting infrastructure.

1. Infrastructure planning and investment should ensure the continued provision of core public services.

1. Infrastructure planning and investment should promote economic competitiveness, productivity, job creation and training opportunities.

1. Infrastructure planning and investment should ensure that the health and safety of workers involved in the construction and maintenance of infrastructure assets is protected.

1. Infrastructure planning and investment should foster innovation by creating opportunities to make use of innovative technologies, services and practices, particularly where doing so would utilize technology, techniques and practices developed in Ontario.

1. Infrastructure planning and investment should be evidence based and transparent, and, subject to any restrictions or prohibitions under an Act or otherwise by law on the collection, use or disclosure of information,

                    i.            investment decisions respecting infrastructure should be made on the basis of information that is either publicly available or is made available to the public, and

                   ii.            information with implications for infrastructure planning should be shared between the Township and broader public sector entities and should factor into investment decisions respecting infrastructure.

1. Where provincial or municipal plans or strategies have been established in Ontario, under an Act or otherwise, but do not bind or apply to the Township, as the case may be, the Township should nevertheless be mindful of those plans and strategies and make investment decisions respecting infrastructure that support them, to the extent that they are relevant.

1. Infrastructure planning and investment should promote accessibility for persons with disabilities.

1. Infrastructure planning and investment should minimize the impact of infrastructure on the environment and respect and help maintain ecological and biological diversity, and infrastructure should be designed to be resilient to the effects of climate change.

1. Infrastructure planning and investment should endeavour to make use of acceptable recycled aggregates.

1. Infrastructure planning and investment should promote community benefits, being the supplementary social and economic benefits arising from an infrastructure project that are intended to improve the well-being of a community affected by the project, such as local job creation and training opportunities, improvement of public space within the community, and any specific benefits identified by the community.

Definitions

Unless otherwise noted, the definitions provided in this document align with those outlined in Ontario Regulation 588/17 (O. Reg. 588/17), Asset Management Planning for Municipal Infrastructure, under the Infrastructure for Jobs and Prosperity Act, 2015.

1. Asset management (AM) – the coordinated activity of an organization to realize value from assets. It considers all asset types, and includes all activities involved in the asset’s life cycle from planning and acquisition/creation; to operational and maintenance activities, rehabilitation, and renewal; to replacement or disposal and any remaining liabilities. Asset management is holistic and normally involves balancing costs, risks, opportunities and performance benefits to achieve the total lowest lifecycle cost for each asset (ISO 55000).

1. Asset management plan (AMP) – Documented information that specifies the activities, resources, and timescales required for an individual asset, or a grouping of assets, to achieve the organization’s asset management objectives (ISO 55000). Under O. Reg. 588/17, by 2023 AMPs for core municipal infrastructure assets will be required to include the current levels of service being provided; the current performance of each asset category; a summary of assets in each asset category, their replacement cost, average age, condition information, and condition assessment protocols; lifecycle activities required to maintain current levels of service; discussion of population and economic forecasts; and documentation of processes to make inventory- and condition-related background information available to the public.

1. Capitalization threshold – the value of a municipal infrastructure asset at or above which a Township will capitalize the value of it and below which it will expense the value of it.

1. Green infrastructure asset – an infrastructure asset consisting of natural or human-made elements that provide ecological and hydrological functions and processes and includes natural heritage features and systems, parklands, stormwater management systems, street trees, urban forests, natural channels, permeable surfaces and green roofs.

1. Level of service – parameters, or combination of parameters, which reflect social, political, environmental and economic outcomes that the organization delivers. Parameters can include, but are not necessarily limited to, safety, customer satisfaction, quality, quantity, capacity, reliability, responsiveness, environmental acceptability, cost, and availability (ISO 55000).

1. Lifecycle activities – activities undertaken with respect to a municipal infrastructure asset over its service life, including constructing, maintaining, renewing, operating and decommissioning, and all engineering and design work associated with those activities.

1. Municipal infrastructure asset – an infrastructure asset, including a green infrastructure asset, directly owned by a Township or included on the consolidated financial statements of a Township.

TOWNSHIP OF LAURENTIAN VALLEY

Schedule A

Asset Type

Single Asset

Capitalization Threshold

Pooled Asset Capitalization Threshold

Land

All

Land Improvements

$10,000 or greater

Buildings

$25,000 or greater

Vehicles

$5,000 or greater

Machinery & Equipment

$5,000 or greater

Heavy Equipment Vehicles

$5,000 or greater

Computer Hardware, Software & Communication Equipment

$5,000

Furniture & Fixtures

$50,000 or greater

Leasehold Improvements

$10,000

Road Allowance

$1 per segment

Road Surface

$25,000 or greater

Road Grade

$25,000 or greater

Signs

N/A

$50,000

Lighting

N/A

$50,000

Safety Devices

N/A

$50,000

Culverts

$25,000

Sidewalks & Curbs

$5,000

Drainage Systems

$25,000

Water Mains

$25,000

Sewer Mains

$25,000

Sewer Structure (Wastewater)

$25,000

Fire Hydrants

$50,000

Water Meters

$50,000

Water Tanks & Stand Pipes

$50,000

Work-In-Progress

          Capitalized when asset is placed into service