The Regional Municipality of Halton Asset Management Plan. Version 2.0

Transcription

1 The Regional Municipality of Halton Asset Management Plan Version

2 Preface Halton Region Halton Region includes the City of Burlington, the Town of Halton Hills, the Town of Milton, and the Town of Oakville. Halton is situated on the northern shore of Lake Ontario and lies within the industrial and commercial heartland of Ontario, Canada. The Region is within a 640 km radius of some of the largest population centres and markets in North America. Halton s location within the Greater Toronto Area, as well as its close proximity to the United States, translates into expanded business and professional employment opportunities for residents. Halton Region s infrastructure includes an integrated transportation network of roads and bridges, storm water management, water purification and distribution, wastewater collection and treatment, waste management collection, disposal and recycling assets, paramedic services, public health services, services for vulnerable residents (social housing, long-term care for seniors and child care facilities and subsidies), and administration facilities for police and other service departments. Asset Management Plan An Asset Management Plan is an integrated, life cycle approach to effective stewardship of infrastructure assets to maximize benefits, manage risk and meet desired levels of service in a sustainable and environmentally-responsible manner. The overall asset management process takes an organization s objectives, determines how these rely on infrastructure, and then develops a plan to provide the supporting infrastructure services at the lowest life cycle cost. Asset management is essential to the development of a common, systematic understanding of what needs are most important and how they can be addressed. Life Cycle Costing looks at the total cost of an asset over its entire useful life, from construction to disposal, including operating costs. A key objective of an Asset Management Plan is to identify investment strategies that achieve desired levels of service at the lowest life cycle cost. Asset Management Planning is the process of making the best possible decisions regarding the construction, operation, maintenance, renewal, replacement, expansion and disposal of infrastructure assets. Asset management planning requires a thorough understanding of the characteristics and condition of infrastructure assets, as well as the service levels expected from them. It also involves setting strategic priorities with investments and identifying critical assets for the development of a minimum life cycle cost. Finally, it requires the development of a Budget and Business Plan, to ensure that sustainable funding is provided to support the Asset Management Plan. Halton Region Asset Management Plan 2014 i

3 Halton s Asset Management Plan describes the infrastructure that it owns, operates and maintains to support its core services. This document identifies what has been achieved, what is being done and what needs to be done to ensure core services provided to citizens, businesses and institutions are delivered based on desired levels of service while maintaining financial sustainability. It is a compilation of many documents and therefore many other Halton documents contain additional levels of detail and are referenced in this document including but not limited to the following: Council reports, project initiatives, Regional Budget and Business Plan, The Citizens Priorities Action Plan, Master Plans, Management Strategy Reports, Financial Systems, Asset Management Systems and departmental Asset Management Plans. Halton Region Asset Management Plan 2014 ii

4 TABLE OF CONTENTS GLOSSARY OF TERMS EXECUTIVE SUMMARY PART 1 PUBLIC WORKS Introduction Asset Management Plan Purpose Assets Included in the Plan Asset Management Plan Development and Timeline Asset Management Plan Updates STATE OF LOCAL INFRASTRUCTURE Asset Types Asset Valuation Asset Age Distribution Asset Condition Infrastructure Condition Report Card Asset Inventory Database Assumptions Data Verification and Condition Assessment Policy DESIRED LEVELS OF SERVICE Defined Levels of Service Transportation Water Wastewater Waste Management External Trends and Issues Transportation Halton Region Asset Management Plan 2014 iii

5 Water Wastewater Waste Management Performance Measurement Transportation Water Wastewater Waste Management ASSET MANAGEMENT STRATEGY Non-infrastructure Solutions Transportation Water Wastewater Waste Management Maintenance Activities Transportation Water Wastewater Waste Management Renewal/Rehabilitation Activities Transportation Water Wastewater Waste Management Replacement Activities Disposal Activities Expansion Activities Halton Region Asset Management Plan 2014 iv

6 5.7 Procurement Methods Risks Associated with the Strategy Options Analysis Direct Benefits and Costs Indirect Benefits and Costs Asset Management Strategy and the Budget and Business Plan FINANCING STRATEGY Financing Plan Development Current Financing Plan Summary PUBLIC WORKS FOOTNOTES PUBLIC WORKS APPENDICES PW1 PW Asset Management Roadmap PW2 Infrastructure Asset Values PW3 PW Long Range Life Cycle Plans Long Range Life Cyle Plan Limitations and Assumptions PW3-1 Transportation PW3-2 Waste Management PW3-3 Water and Wastewater PW4 Capital Budget Process PW5 Asset types PW5-1 Transportation Asset Types PW5-2 Plant Facilities Asset Types PW5-3 Water and Wastewater Linear Asset Types PW5-4 Waste Management Asset Types PW6 Remaining useful life PW7 Asset record PW7-1 RIVA asset record Halton Region Asset Management Plan 2014 v

7 PW7-2 SAP asset record PW8 TCA Asset System Architecture PW9 Roadway Appraisal Sheet PW10 Structure Inspection Form PW11 Wastewater System Effluent Monitoring Report PW12 Region Wide and Spatial Distribution PW13 CCTV Sewer Main Snap Shots PW14 Transportation Master Plan Capital Plan PW15 PW Budget Process PW16 Halton Region Reserve Policy PW17 Financing Strategy Process for Capital Expenditures PW18 Region of Halton Asset Management Framework PART 2: CORPORATE FACILITIES AND SOCIAL HOUSING INTRODUCTION Asset Management Plan Purpose Assets Included in the Plan Asset Management Plan Development and Timeline Asset Management Plan Evaluation and Ongoing Improvements STATE OF LOCAL INFRASTRUCTURE Asset Types Asset Valuation Asset Age Distribution Asset Condition Assessments Asset Information Sources Policies and Procedures DESIRED LEVELS OF SERVICE Levels of Service Halton Region Asset Management Plan 2014 vi

8 External Trends and Issues Asset Performance ASSET MANAGEMENT STRATEGY Life Cycle Costs and Options Analysis Risk Assessment Project Prioritization Project Plans Procurement Methods FINANCING STRATEGY Financing Plan Development Current Financing Plan Summary CORPORATE FACILITIES AND SOCIAL HOUSING FOOTNOTES CORPORATE FACILITIES AND SOCIAL HOUSING APPENDICES AM 1 Asset Management Capital Budget Development AM 2 Corporate and Social Housing Assets Infrastructure Condition Report Card AM 3 Deferred Capital Budget Sample AM 4 Excerpt from TCA Policies for Facilities and Building AM 5 UNIFORMAT II AM 6 Excerpt from Halton Region Purchasing Policy AM 7 Budget Plan Sample AM 8 10-Year Expenditure Plan Sample AM 9 Life Expectancy AM 10 Replacement Values AM 11 Capital Planning Software Sample Snapshots Halton Region Asset Management Plan 2014 vii

9 GLOSSARY OF TERMS Active Transportation Active transportation means non-motorized or lightly-motorized travel, including walking, cycling, roller-blading and movements with mobility devices. The active transportation network includes sidewalks, crosswalks, designated road lanes and off-road trails to accommodate active transportation. Asset Capital Asset capital is defined as equipment which is fixed, built-in or permanently affixed to a building structure. It can also refer to infrastructure. Asset Management (AM) AM is the process of making the best possible decisions regarding the construction, operation, maintenance, renewal, replacement, expansion and disposal of infrastructure assets. Asset Management Plan (AMP) An AMP is an integrated, life cycle approach to effective stewardship of infrastructure assets to maximize benefits, manage risk and provide satisfactory levels of service in a sustainable and environmentally-responsible manner. The overall asset management process analyzes an organization s objectives and determines reliance on infrastructure, and then develops a plan to provide the supporting infrastructure services at the lowest life cycle cost. Asset Management Planning Asset Management Planning is the process of making the best possible decisions regarding the construction, operation, maintenance, renewal, replacement, expansion and disposal of infrastructure assets. Asset management planning requires a thorough understanding of the characteristics and condition of infrastructure assets, as well as the service levels expected from them. It also involves setting strategic priorities with investments and identifying critical assets for the development of a minimum life cycle cost. Finally, it requires the development of a Budget and Business Plan, to ensure that sustainable funding is provided to support the Asset Management Plan. Asset Management Strategy (AMS) The AMS is the set of planned actions that will enable the assets to provide the desired levels of service in a sustainable way, while managing risk, at the lowest life cycle cost (e.g., through preventative action). The AMS is the set of actions that, taken together, has the lowest total cost not the set of actions that each has the lowest cost individually. Halton Region Asset Management Plan

10 Basement Flooding Prevention Subsidy Program The Halton program offers residents a one-time subsidy to assist residents who 1) have a history of basement floods caused by a backup or surcharge of the sanitary sewer system; or 2) Halton residents who have not experienced flooding but would like to correct improper storm water connections and install a backwater valve. The Big Move (Metrolinx Regional Transportation Plan) The Big Move is a 25-year, $50-billion plan for coordinated, integrated transportation and transit in the Greater Toronto and Hamilton Area launched in 2008 by Metrolinx. Net Book Value (or Book Value) The Book Value is the difference between the acquisition cost of a Tangible Capital Asset less its accumulated amortization. It represents the unconsumed acquisition cost of a Tangible Capital Asset attributable to its remaining service life. Write-downs due to obsolescence or reductions to the asset s useful life also reduce the Book Value. Bridge Condition Index (BCI) A BCI rating is a planning tool that helps schedule maintenance and upkeep. The BCI is not used to rate or indicate the safety of a bridge. The result is organized into a range from 0 to 100 (poor to excellent). Building Condition Assessment (BCA) The BCA is the first part of a capital reserve plan. The report describes: the condition of the capital items; when they are anticipated to be replaced; how much the replacement would cost at the present day and in the anticipated year of replacement; and what priority to give the replacement. The BCA is based on a review of property documents and a review of the capital items. Capital Planning Software (CPS) CPS helps organizations develop detailed capital plans by taking into account repair and replacement costs, urgency, and future needs. The CPS generates and compares costs across multiple scenarios and develops a deferred maintenance program along with determining building component life cycles. Consultants and end-users can both benefit from using CPS to generate and compare costs across multiple scenarios. CPS has features that assist with cataloging deferred maintenance and determining building component life cycles. Halton Region Asset Management Plan

11 Capital Reserves Also known as replacement reserves, these are funds set aside to replace and repair major capital infrastructure in the future. Capital Reserve Plan A capital reserve plan sets out: the replacement that must be made each year to keep the asset in good repair; and how much money is to be put aside each year to pay for the replacements in the future. Carbonaceous Biochemical Oxygen Demand (cbod) A testing method measured by the depletion of dissolved oxygen by biological organisms in a body of water in which the contribution from nitrogenous bacteria has been suppressed. cbod is a method-defined parameter widely used as an indication of the pollutant removal from wastewater. Certificate of Approval (CoA) In Ontario, any organization that intends to emit chemicals to the air must first submit an application to the Ontario Ministry of Environment (MOE) for a CoA for air emissions and noise. In the case of water systems, it is superseded by the Drinking Water Licence. The Citizens Priorities Action Plan On June 22, 2011, Regional Council approved The Citizens Priorities Action Plan for Halton Region. Each new term, Halton Regional Council develops a plan to reflect Council s priorities and focus on what services are important to Halton residents. This Action Plan is fundamentally different from other plans Halton has developed in the past because of how closely Halton worked with residents at the beginning of the development process. Closed-circuit Television (CCTV) Inspections Video inspections of linear assets to determine condition and replacement/rehabilitation needs. Computer Maintenance Management System (CMMS) A CMMS software package maintains a computer database of information about an organization s maintenance operations. This information is intended to help maintenance workers do their jobs more effectively (e.g. determining which machines require maintenance and which storerooms contain the spare parts they need), and to help management make informed decisions such as calculating the cost of machine breakdown repair versus preventive maintenance for each machine, possibly leading to better allocation of resources. Halton Region Asset Management Plan

12 Condition Assessment Reports These reports review infrastructure condition and identify needs for asset maintenance, renewal and replacement, with recommended timing of projects and estimated costs. Debentures A debt instrument issued by a municipal corporation and secured by municipal general revenues. Drinking Water Quality Management Systems (DWQMS) A repository of information for Halton s drinking water infrastructure and all related business processes. It contains all Public Works procedures, policies, manuals, instructions, specifications and forms related to operation of the water system. It also contains the Operational Plan as required by the Drinking Water Licence. Environmental Compliance Approvals (ECAs) Provincial legislation on how to operate an individual system/facility. Approval from the Ontario Ministry of Environment (MOE) which addresses emissions, discharges and wastes. Facility Condition Index (FCI) An industry standard asset management tool which measures the constructed asset s condition at a specific point in time. It is a functional indicator resulting from an analysis of different but related operational indicators (such as building repair needs) to obtain an overview of a building s condition as a numerical value. Fire Flow A rate of flow supplied by the water distribution system for fire fighting purposes usually specified as litres per second at 140 kilopascal (kpa). GIS (Geographic Information System) A system designed to capture, store, manipulate, analyze, manage and present all types of geographical data. Halton Region uses an ESRI platform. Grant A transfer of money from one organization to another. In the case of local governments, grants can be one of two types - conditional or unconditional. Conditional grants are monies transferred for a specific purpose that may not be used for any other project. Unconditional grants can be used for any purpose the recipient sees fit. Halton Region Asset Management Plan

13 HR-F78 Facility Project Fact Sheet Drinking Water Quality Management Systems (DWQMS) document showing form used to provide background information for non-development facility capital budget items. HR-F79 Linear Project Fact Sheet Drinking Water Quality Management Systems (DWQMS) document showing form used to provide background information for non-development linear capital budget items. HR-P37 Review and Provision of Infrastructure Drinking Water Quality Management Systems (DWQMS) document further identifying the process followed in the review of water infrastructure. HR-W88 Infrastructure Review Drinking Water Quality Management Systems (DWQMS) document identifying the process followed in the review of water infrastructure. Industrial, Commercial, Institutional Construction (ICI) ICI stands for Industrial, Commercial, Institutional construction. Inflow and Infiltration (I&I) Program Structural and operational repairs that help to stop inflow and infiltration from entering into the collection system. Life Cycle Costing Life Cycle Costing looks at the total cost of an asset over its entire useful life, from construction to disposal, including operating costs. Manhole Assessment and Certification Program (MACP) Industry Standards A program for the grading of defects within manholes using the established defect coding system found in the Pipeline Assessment and Certification Program (PACP). Master Plans A comprehensive review and analysis of servicing requirements based on planning growth estimates following the Municipal Engineers Association Class Environmental Assessment process. Halton Region Asset Management Plan

14 Non-residential Building Construction Price Indices (NRBCPI) A quarterly series measuring the changes in contractors' selling prices of non-residential building construction (i.e. commercial, industrial and institutional). The index relates to both general and trade contractors' work and excludes the cost of land, land assembly, design, development and real estate fees. Pavement Management Pavement management is the process of planning the maintenance and repair of a network of roadways in order to optimize pavement conditions over the entire network. Pavement Quality Index (PQI) A numerical index between 0 and 100 or 0 and 10 (poor to excellent) which is used to indicate the general condition of pavement. Pipeline Assessment and Certification Program (PACP) An industry coding standard that provides standardization and consistency in how sewer pipe condition and closed-circuit television (CCTV) inspection results are coded and managed through the National Association of Sewer Service Companies (NASSCO) and the Canadian Standards Association (CSA). Preventative Maintenance Program Inspection, testing and calibration of electrical and mechanical instrumentation and control equipment performed and documented by fully-trained and qualified technicians as is recommended by the original equipment manufacturer (OEM). Program Capital Program capital is based on modifications to a building as program needs change and the expenditures are for capital items of a less than permanent nature and normally at a lower cost. Project Capital Project capital expenditures are for the construction, expansion, replacement or major renovation of any new facility, either free-standing or addition of physical structures. PS 3150 Tangible Capital Assets (TCA) The accounting standard relating to TCA issued by the Public Sector Accounting Board (PSAB) of the Chartered Professional Accountants Canada (CPA Canada, formerly the Canadian Institute of Halton Region Asset Management Plan

15 Chartered Accountants). This standard came into effect for Halton Region on January 1, 2009 and mandated that TCA be reported in the balance sheet, similar to the private sector. Public Sector Accounting Board (PSAB) PSAB is an independent body with the authority to set accounting standards for the public sector. Public Works (PW) Halton Region s department responsible for transportation, water, wastewater and waste services including asset planning, construction, operation and maintenance of the related infrastructure. Region s Official Plan Amendment (ROPA) Halton's Regional Official Plan which outlines the Region s approved policy for development and growth. It outlines specific goals and objectives that Regional Council and Halton citizens believe are important. It also contains policies related to a wide range of topics including, but not limited to the following. Setting urban area boundaries to accommodate growth and to protect farmland. Protection of environmentally-sensitive areas and promotion of land stewardship. Promotion of economic development. Delivery of urban services such as water supply and wastewater treatment, transportation, energy and utilities. Building healthy, complete and sustainable communities. The Regional Official Plan also lays out a strategy for implementing and achieving these goals and objectives, including ongoing monitoring of the effectiveness of plan policies. RIVA (Real-time Infrastructure Valuation Analysis platform) RIVA connects with and exchanges data between SAP, GIS and Microsoft. The integration allows for real-time interaction within systems. Halton s RIVA Online Process Engine integrates and consolidates all assets from source systems including GIS before triggering their creation in SAP. Road Maintenance Level of Service (LOS) The Road Maintenance LOS defines the activities to be carried out in the maintenance of the Region s road infrastructure and establishes the time frames within which those activities will be completed. Road Needs Study The Road Needs Study provides an overview of the overall condition of the road system, by section, including such factors as capacity, geometry, surface width, surface type, structural adequacy, and drainage. Halton Region Asset Management Plan

16 SAP (Systems Applications and Products) SAP is the world's largest inter-enterprise software company. The original name for SAP was German: Systeme, Anwendungen, Produkte, German for "Systems Applications and Products." SAP is the Halton Region financial system. The Halton Region Tangible Capital Asset registry is maintained in SAP. SCADA (Supervisory Control and Data Acquisition) A computerized system used to control the operation of water and wastewater systems. It is a type of industrial control system (ICS). Industrial control systems are computer-controlled systems that monitor and control industrial processes that exist in the physical world. SCADA systems historically distinguish themselves from other industrial control systems (ICS) by being large-scale processes that can include multiple sites and large distances. These processes include industrial, infrastructure and facility-based processes. Also used to store data such as run times, flows and pressures. Screenline A screenline is an imaginary boundary that defines a broad corridor consisting of one or more roadway links. Smart Commute Halton Smart Commute Halton is a travel demand management program which encourages active and sustainable transportation by offering services and tools designed to make commuting easier for employees of local organizations. Solid Waste Management Strategy A plan with a goal to minimize waste deposited in the landfill which is updated every five years. Spot Repair Program Minor repairs for deficiencies identified in sanitary/wastewater mains. Tangible Capital Asset (TCA) Non-financial assets with physical substance that: 1. are held for use 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 TCA s; 2. have useful economic lives extending beyond an accounting period; 3. are to be used on a continuing basis; and 4. are not for sale in the ordinary course of operations. Halton Region Asset Management Plan

17 The Sustainable Halton Water and Wastewater Master Plan (SHMP) A long-range planning document which integrates infrastructure requirements for existing and future land uses. The plan satisfies at a minimum Phase 1 and 2 of the Municipal Class Environmental Assessment Process. Transportation Master Plan (2031) The Road to Change The Road to Change is Halton Region s current Transportation Master Plan (TMP) which developed a sustainable, integrated transportation plan and associated strategies that consider all modes of travel (automobiles, transit, cycling, walking) to the year Total Suspended Solids (TSS) TSS include all particles suspended in water which will not pass through a filter. Suspended solids are present in sanitary wastewater and many types of industrial wastewater. There are also non-point sources of suspended solids, such as soil erosion from agricultural and construction sites. Transportation Services Progress Report The Transportation Services Progress Report is a report that summarizes the Region s activities relating to the planning, design, construction, operationand maintenance, of the Region s transportation system. Travel Demand Management The application of strategies and policies to reduce travel demand (specifically that of singleoccupancy private vehicles), or to redistribute this demand in space or in time. UK Water Industry Water Resource Council (WRc) Coding Standards Standardized sewer defect coding that has helped to provide a consistent approach in order to deliver confidence in CCTV inspections and data. UNIFORMAT II UNIFORMAT II provides a consistent reference for the description and management of buildings during all phases of their life cycle. The elements identified are the major components, common to most buildings, that usually perform a given function regardless of the design specifications, construction method or materials used. Halton Region Asset Management Plan

18 Watermain Cathodic Protections Method of corrosion protection normally accomplished with the attachment of sacrificial anodes to metallic pipes. Watermain Flushing Process of flushing potable water at a high velocity through watermains in order to remove minor sediment and refresh the water in the main. Watermain Swabbing Method of pipe cleaning accomplished by forcing a sponge through a pipe using water pressure. Wastewater Systems Effluent Regulations (WSER) Environment Canada regulations that state minimum effluent quality standards for four deleterious substances in the effluents of wastewater treatment plants to ensure systems provide at least secondary treatment or the equivalent. Regulations also cover sampling, monitoring, record keeping and reporting requirements. Wastewater System Performance Report An annual report with appendices for each wastewater treatment plant in Halton. It provides a summary of the wastewater treatment system, ensures that Halton is meeting regulatory requirements for testing, and includes analytical, plant flow, bypass, operational and biosolids data. Volume-Demand-to-Capacity Ratio (V/C) The Volume-Demand-to-Capacity Ratio (V/C) is a measure that compares roadway demand (vehicle volumes) with roadway supply (carrying capacity) and determines the level of congestion at an intersection, screenline or corridor. Halton Region Asset Management Plan

19 EXECUTIVE SUMMARY Introduction The Asset Management Plan demonstrates sound stewardship of the Region s existing assets to support services at desired levels and to ensure the support of the Region s infrastructure is financially sustainable. The Asset Management relationships and dependencies at Halton Region are illustrated below. Asset Management Relationships and Dependencies Current State of Assets Level of Service Critical Assets Minimum Life Cycle Costs Long Term Funding Plan Halton Region s infrastructure assets are key resources used to provide services to the public. These services include the provision of a safe and efficient road network, safe drinking water, environmentally sound wastewater treatment, effective waste collection and processing, and the provision of social housing and facilities for other key services such as long-term care. All of these services contribute to the local economy and improve the quality of life for residents. The purpose of Halton Region s Asset Management Plan is to make the best possible decisions regarding the construction, operation, maintenance, renewal, replacement, expansion and disposal of these infrastructure assets while minimizing risk and cost to the Region and its taxpayers and while maximizing service delivery. The Asset Management Plan allows Halton Region to: provide input into long-term infrastructure master plans and the Budget and Business Plan; document existing and planned work practices and procedures; provide a business case for key infrastructure investments to support Regional services; develop a sustainable financial plan; support community engagement regarding customer desired levels of service derived from the infrastructure assets; meet legislative requirements; and support funding applications to the Government of Ontario. Halton Region s vision is to integrate Asset Management with Asset Financial Management as illustrated below. Asset Degradation and Rehabilitation Asset Management Asset Life Cycle Focused Risk Analysis Capacity and Operations Asset Data Status & Condition Asset Needs/ Plans Service Levels Asset Financial Management Financial Sustainability Balanced Budgets Expenditures Leveling Asset Depreciation and Financing Cost of Service Halton Region Asset Management Plan

20 Asset Management Evolution Halton Region has been implementing various Asset Management practices for a number of years. In 2006, a vision for a comprehensive Asset Management program was developed. The vision implementation began with the development of the Regional Tangible Capital Asset register completed in 2009 to comply with new financial reporting requirements (refer to staff reports CS-31-06, CS-45-07, CS-52-07, CS-17-10). In 2012, utilising 2010 data, the Public Works first infrastructure condition report card was presented to Council, (refer to staff report PW-62-12). Subsequently the report card has been updated to reflect 2013 data and is presented in section 3.4 of the Asset Management Plan. The Public Works infrastructure condition report card will be reported on every three years. In 2014, a consultant was retained by the Public Works department to facilitate a review and develop a Corporate Asset Management Framework (Appendix PW18) and implementation plan to begin enhancements to the Public Works Asset Management Plan. Furthermore, the Asset Management Division has been undertaking a Building Condition Assessment process and feasibility study which enhances asset management planning for social housing and corporate facilities assets (refer to staff reports SS-25-08, CS-28-08). The Building Condition Assessments form the basis of the Asset Management Division Report Card which shows that the assets continue to be in a state of good repair. An overview of the evolution of Asset Management for Halton Region is presented in the following timeline. Asset Management Timeline Halton Region Asset Management Vision established CS Public Sector Accounting Board, Tangible Capital Asset Project Update SS and CS Asset Management Building Condition Assessment Proposal CS Financial Statements for Halton Region - including new TCA financial reporting requirements PW Public Works 2010 Infrastructure Condition Report Card CS Capital Asset Management and Reporting Framework CS SAP Software to support Capital Asset Reporting TCA Financial Reporting Compliance Date (Jan. 1, 2009) AM Division Asset Management Plan Development Halton Region Corporate Asset Management Plan The Halton Region Asset Management Plan was developed with an objective to ensure financial sustainability in achieving desired service levels. A project team including staff from the Public Works Department, Legislative and Planning Services Department and the Finance Department, led the initiative, supported by a Steering Committee comprising of Directors from the above named departments. The Asset Management Plan was approved by the Commissioner of Public Works, Commissioner of Finance and Commissioner of Legislative and Planning Services. The first version of the Asset Management Plan was presented to Council through staff report PW-55-13/FN-27-13/ LPS This Asset Management Plan continues to meet the requirements of the Ontario Ministry of Infrastructure Guide for Asset Management Plans issued in August P1 Halton Region Asset Management Plan

21 Asset Management Plan Structure The infrastructure assets currently included in the Halton Region Asset Management Plan are water, wastewater, transportation and waste management assets managed by each of the divisions within the Public Works Department. Corporate Facilities and the Social Housing assets are also included in the plan and are managed by the Asset Management Division of the Legislative and Planning Services Department. The Halton Region Asset Management Plan is divided into two parts: Part 1 - Public Works and Part 2 Corporate Facilities and Social Housing. Although the principles of asset management planning used by both departments are similar, specific policies and practices differ to account for the differences in asset types and their unique operational requirements. Part 1: Public Works Halton Region Asset Management Plan Part 2: Corporate Facilities and Social Housing Halton Region Asset Management Plan The Budget and Business Plan presented for formal Council approval covers a forecast period of 10 years. However, the Asset Management Plan provides a full asset life cycle analysis for up to 100 years for Public Works assets. For Corporate Facilities and Social Housing assets, Building Condition Assessment and feasibility studies and replacement cost estimates are prepared for a forecast period of 25 years. Asset Management Plan Updates Continuous improvements to Asset Management practices within Halton Region will result in updates to the Asset Management Plan, and as such, it is a living document that will require ongoing refinement to reflect the evolution of Asset Management maturing within Halton Region over time. Next steps include scoping and validating a roadmap of activities which will enhance the Public Works Asset Management Plan as detailed in Appendix PW1. Annual updates to this Asset Management Plan will be prepared on the same timeline as the Region s Budget and Business Plan. Asset Management Plan Summary 1. State of Local Infrastructure Public Works infrastructure includes transportation, water, wastewater and waste management assets. The total book value of these assets at December 31, 2013 was $3.0 billion. The total estimated replacement value in current dollars is $8 billion. This figure does not account for technological advancements and changes to legislative requirements; therefore, the actual current replacement value is expected to be higher in the year the asset is needed to be replaced (refer to Appendix PW2 for details). Most of those assets are assessed to be in good condition, (refer to Infrastructure Condition Report Card section 3.4). Asset information is compiled in accordance with Regional policies and procedures and is stored in the Region s accounting system and individual asset records. This asset information is also included in the annual financial statements which are subject to external audit. Halton Region Asset Management Plan

22 Halton Region s transportation infrastructure includes: 1,013 lane kilometres of Regional roads 225 bridges and major culverts Water infrastructure includes: 7 bulk water stations 12 water treatment plants (3 lake & 9 ground water based) 19 municipal wells 2,218 kilometers of watermains 22 reservoirs 15 booster stations Wastewater infrastructure includes: 7 wastewater treatment plants 1,806 kms of wastewater mains 1 biosolids facility 88 pumping stations Waste management infrastructure includes: 1 open landfill 11 closed landfills and leachate pumping stations The Asset Management Division s Asset Management Plan covers all corporate facility and social housing assets totaling over 3.2 million square feet. The book value of owned Corporate Facilities as of December 31, 2013 was $75 million with a current replacement cost estimate of $175 million. (i) The book value of owned Social Housing assets as at December 31, 2013 was $93 million with a current replacement cost estimate of $266 million. These estimates are stated in current dollars and are based on insurance values, (refer to Appendix AM10 for details). These estimates do not take into account other cost factors such as technology advancements, (i) Includes Police portion of Halton Regional Centre and as such the replacement value is expected to be higher in the year the asset needs to be replaced. The condition of these assets is evaluated on an annual basis during the development of the capital and operating budgets and through Building Condition Assessments performed on a five-year rotating cycle. Most of the assets are assessed to be in good condition, (refer to Appendix AM2). Asset information is compiled in accordance with Regional policies and procedures and is stored in the Region s accounting system, individual property Building Condition Assessment records and the capital asset management software. Owned Corporate Facilities: Halton Regional Centre 3 Long-term Care Facilities 8 Halton Region Paramedic Services Facilities Halton Museum Woodlands Operations Centre (South Operations) North Operations Centre Halton Waste Management Building Facilities 3 Child Care Centres Social Housing: Halton Community Housing Corporation buildings (including a child care facility) Oakville Senior Citizens Residence 2,300 units (in 13 Senior Communities & 19 family Communities) Assets managed by the Asset Management Division: Land Banks Leased Facilities, including one child care centre owned by HCHC 4 First Line Properties (part of Public Works infrastructure assets) Halton Region Asset Management Plan

23 2. Levels of Service Levels of service are a key business driver for Halton Region and influence all asset management decisions. Levels of service statements describe the outputs Halton intends to deliver to its customers and commonly relate to service attributes such as quality, reliability, responsiveness, sustainability, timeliness, accessibility and cost. Halton s levels of service can relate to technical and legislated requirements, as well as Council directives. Council directives are influenced by the Citizens Priorities, Action Plan. P2 Other factors that influence levels of service include condition assessments, client needs and requests. To demonstrate that Halton Region is delivering on the priorities outlined in the Citizens Action Plan, detailed infrastructure master plans and the Budget and Business Plan support the initiatives listed in the Citizens Priorities Action Plan. To maintain transparency, a report card showing progress of the listed initiatives in the action plan is presented to Council annually. The first report card was issued in P3 Desired levels of service are based on technical, legislated and customer requirements approved by Council. Levels of service for the Public Works infrastructure relate to the delivery of service through the following: Transportation - Plan, construct and maintain a regional transportation system that includes 1,013 lane kilometres of major arterial roadways, signalized intersections, lighting, signs, 225 bridges and major structures. Water and Wastewater Infrastructure - Plan, construct and maintain a complex and integrated system of physical structures to deliver drinking water to Halton residents and dispose of wastewater in an efficient and sustainable manner. Environmental Protection and Conservation of Water - Protect water quality and the natural environment through effective treatment, source protection, conservation and adherence to regulations. Waste Management - Plan and implement an integrated and sustainable waste management system of collecting, processing and disposing municipal solid waste that incorporates the principles of reduce, reuse, recycle and resource recovery. A number of external trends and impacts are considered when reviewing levels of service including provincial legislation such as the Places to Grow Act, 2005 and changing weather patterns that affect storm occurrence inflow and infiltration rates. Water use patterns through conservation programs are factored in when planning for infrastructure and its funding. Waste diversion programs result in extending the remaining life of the landfill. Public Works measures levels of service through a number of tools and reporting mechanisms. These include Council reports such as the annual Transportation Services Progress Report documenting roadway infrastructure and the Wastewater System Performance Report. The Drinking Water Systems Flow Summary Report provides information relating to compliance. Additionally, Public Works has produced an overall Infrastructure Condition Report Card. Performance details are tracked internally using various information systems and tools. Halton Region Asset Management Plan

24 Levels of service for the Asset Management Division are based upon the review of the long range infrastructure strategies, current technical and financial practices. The Asset Management Division takes a comprehensive long-term view of its infrastructure performance and costs and has several procedures and processes in place to ensure that asset performance is monitored to ensure that legislative requirements are met. External issues and trends such as changing legislative requirements are reviewed on a regular basis to ensure the levels of service are updated where required. 3. Asset Management Strategy An effective asset management strategy requires knowledge of the condition of the assets, the performance of the assets as compared to desired levels of service and the associated costs to maintain, rehabilitate, replace and expand the asset systems and components. Knowledge of disposal costs is also required. This section of the Asset Management Plan details the various components to ensure that actions are taken to enable assets to provide the desired levels of service in a sustainable way while managing risk at the lowest life cycle cost possible. The Asset Management Strategy at Halton Region is: Customer focused Clearly-defined levels of service and applied asset management practices to provide those levels of service and maintain the confidence of program areas and customers in how Regional assets are managed. Forward-looking Make appropriate decisions and provisions to enable assets to meet future challenges, including changing demographics and populations, program area expectations, legislative requirements, technological, and environmental factors. Integrated and service-coordinated Consider all the assets in a service context and take into account their interrelationships as opposed to optimizing individual assets in isolation. Risk-based Manage the asset risk associated with attaining the agreed levels of service by focusing resources, expenditures, and priorities based upon risk assessments and the corresponding cost/benefit recognizing that public safety is the priority. Value-based/Affordable Choose practices, interventions and operations that aim at reducing the life cycle cost of asset ownership, while satisfying agreed levels of service. Decisions are based on balancing service levels, risks and costs. Holistic Take a comprehensive approach that looks at the big picture and considers the combined impact of managing all aspects of the asset life cycle including direct and indirect impacts of the asset. Halton Region Asset Management Plan

25 Systematic Adopt a formal, consistent, replicable approach to the management of assets that will ensure services are provided in the most efficient and effective manner. Innovative Continually improve the asset management approach by driving innovation in the development of tools, practices and solutions. In order to enhance infrastructure and financial sustainability planning, Public Works also reviews the long-term infrastructure life cycles, (refer to Appendix PW3). The divisions of the Public Works department have policies and processes in place for producing a tactical one-year budget as well as a 10-year Capital Plan forecast, (refer to Appendix PW4 and PW15). The process culminates in the production of an annual Budget and Business Plan. Public Works undertakes a number of programs, studies, condition assessments and maintenance reports which may identify specific projects that include but are not limited to: roadway crack sealing, roadway resurfacing, roadway replacements and expansions, watermain cathodic protection, watermain and wastewater main replacements, and expansions and facility refurbishments, upgrades and expansions. To ensure that infrastructure is maintained in a state of good repair and provides desired levels of service at the lowest possible life cycle cost, Public Works continuously develops and implements a number of non-infrastructure solutions. These include but are not limited to: travel demand management, smart commute initiatives, the water efficiency outreach program, the optimization program for linear assets and treatment plants, annual wastewater main flushing program, waste diversion programs and the coordination of water, wastewater, transportation and Local Municipality construction projects. Additionally, maintenance activities are carried out on a regular basis. Each division also performs renewal and rehabilitation activities. Replacements and asset expansions required are mainly identified through the maintenance, renewal and rehabilitation activities. All Public Works divisions follow the Region s policy for asset disposal. Risks relating to the Asset Management Strategy are evaluated on a regular basis. Through studies and condition assessments, different options are considered. The options analysis includes items such as: life cycle cost analysis, direct and indirect benefits and costs. Halton Region Asset Management Plan

26 Asset information and desired levels of service form the basis of the Asset Management Strategy for the Asset Management Division. The Asset Management Strategy includes a review of options using a life cycle cost analysis and risk assessments to appropriately prioritize projects and to develop project plans. The Building Condition Assessments are a crucial cornerstone of information that forms the basis of the plan. The Asset Management Division incorporates existing preventative maintenance and risk management programs to preclude the risk of failure. The preventative maintenance components ensure that the asset meets or exceeds its expected life cycle. The risk management component ensures that administration manages the risk through due diligence. Maintenance activities of the assets are carried out on a regular basis. From these ongoing efforts information is gathered that supports the overall lifecycle program and its eventual replacement. The Asset Management Division also follows the Region s policy on for asset disposal. Through the management of the assets by current level maintenance activities as well as studies and condition assessments, the Asset Management Division develops lifecycle forecasting options. Each year, the 10-year forecast for the Operating Budget is updated to reflect the changing needs to operate and maintain infrastructure and to incorporate the impact of additional infrastructure included in the Capital Budget (i.e. growth related infrastructure). Key sources of revenue for the Operating Budget include tax revenue and user fees. The estimated forecasted capital expenditures and financing sources for Public Works based on the 2014 Budget and Business Plan are presented in the following graphs: PW Total Capital Expenditures: $2.8B Water 32% Transportation 44% Wastewater 22% Waste Management 2% 4. Financing Strategy The annual Budget and Business Plan is compiled by the Financial Planning and Budgets division working with each of the program areas. For the state of good repair Capital Budget, a 10-year forecast of proposed projects representing asset rehabilitation and replacements is reviewed taking into consideration program needs, trends and priorities. Once the budget request is finalized, financing options are determined based on the optimum funding plan including the following key sources of funding: debt, reserves, grants/recoveries, and development charges (for asset replacement of assets involving growth related infrastructure). The financing of the capital plan is determined using provincial and Halton Region guidelines and policies relating to debt capacity and provisions to fund capital reserves and future infrastructure needs. The capital reserves are then replenished by the operating budget contributions based on a financial plan. Non-capital expenditures such as repairs and maintenance are part of the Operating Budget. Reserves 50% PW Capital Financing: $2.8B Development Charges 44% Subsidies & Recoveries 1% Debentures (Debt) 5% Halton Region Asset Management Plan