Asset Management for Sustainability. Feb 10, 2015

Transcription

1 Asset Management for Sustainability Feb 10, 2015

2 Welcome! Today s agenda: Welcome and Introductions Asset Management Practice: case study Sustainability and Asset Management Lunch Leadership in Asset Management Developing an Eco Assets Strategy (Gibsons BC) Sustainable Infrastructure Decisions (Revelstoke BC) Close

3 3

4 4

5 5

6 NEW OFFER will launch APRIL 1ST,

7 CNAM: Your Asset Management Body of Knowledge

8 What is CNAM? Canadian Network of Asset Managers (CNAM) Initially established by municipalities, for municipalities Now in its 9 th year Focus on public infrastructure asset management Not-for-profit organization

9 CNAM s Vision & Mission VISION Fostering excellence in public infrastructure asset management MISSION To advance the value of asset management practices through leadership, innovation and collaboration

10 Strategic Pillars Leadership Increase capacity to enhance and promote CNAM Innovation Engage in and support knowledge generation, consolidation and dissemination Collaboration Build sustainable relationships with other organizations to unify and improve the state of asset management practice

11 Introductions Why is the topic of today s workshop important to you? How is it relevant to your work and interests?

12 Pre-course survey results This group seems to be more familiar with sustainability than Asset Management (though there is expertise and experience in both) Most interested in: opportunities for integration / natural assets You asked for: group discussion and networking

13 A question to get us started: What are some of the key elements of long term thinking?

14 City of Hamilton s Asset Management Team

15 City of Hamilton Amalgamated Area Municipalities Population 500,000 The City of Waterfalls

16

17 Facility Construction - last 50 yrs Hamilton now has over 300 corporate and community facilities

18 Facility Construction - Next 50 yrs? Replace 300 corp. and comm. facilities and additional facilities??

19 Hamilton s Infrastructure Today 6,400 Lane km of Road / 15,000 Street Segments 2,100 km Water Main s / 32,000 Pipes 2,500 km Sewer Main s / 40,000 Pipes 1 Water Treatment Plant 2 Waste Water Treatment Plants 700 Facilities (includes park facilities) 5,520 Acres of Parkland / 430 Parks 1,000 Fleet Vehicles / 260 Transit Vehicles Waste Management Assets

20 The Original Framework: What do we own and where is it? What is it worth? What condition is it in? What do we need to do to it? When do we need to do it? How much money do we need? How do we achieve sustainability? Two additional important questions: Do we still need it? How do we maintain sustainability?

21 Hamilton s Asset Management Approach STRATEGIC PLANNING Sustainable Asset Budget Forecast Management Life Cycle TACTICAL PLANNING Summary Budget 3 to 20 Years PROJECT PLANNING Detailed Operating and Capital Budget 1 to 3 Years Not Project based, but Service based

22 Hamilton s Asset Management Approach The Strategic Planning Window State of the infrastructure Reports Life Cycle Analysis Revenue Plans and projections Key Communication Tools STRATEGIC PLANNING Sustainable Asset Management Life Cycle

23 State of the Infrastructure Reports A New Way of looking at the same Infrastructure

24 Roads/Bridges - Inventory and Valuation Asset Type: Roads & Bridges 2013 Inventory Roads Lincoln Alexander Parkway (LINC) Red Hill Valley Parkway (RHVP) 85 km Urban Network 1,830 km Rural Network 1,137 km Bridges Bridges 296 Culverts (> 3m) 95 Asset Type: Roads & Bridges 2013 Replacement Cost Roads Lincoln Alexander Parkway (LINC) Red Hill Valley Parkway (RHVP) $218 Urban Network $3,970 Rural Network $490 Bridges Bridges Culverts (> 3m) $533 Sum $5,211

25 Asset Profiles: Water Mains Asset Type: Linear Water* Replacement Value: $1.87 Billion Estimated Useful Life: 75 years Percentage of assets exceeding useful life: 20% Comment: Lack of available widespread condition assessment of water pipes make age a relevant indicator of condition. Overall the City s water network is evenly spread out over the past 100 years, implying that longterm capital spending on network replacement is not expected to encounter sudden spikes. The City does own a sizable inventory of water mains that are older than 100 years (7% by length). In the short-term these are expected to require immediate attention More than 100 years 7% years 13% years 14% years 29% Less than 25 years 37%

26 Road Condition - Service Level Average Overall Condition Index (OCI) Urban Arterial Major Urban Arterial Minor Urban Collector Urban Local Rural Arterial Functional Class Rural Collector Rural Local 2012 Network Average (62)

27 What do we need to do, and When? 0 25% of asset life Minor Maintenance 25 50% of asset life Major Maintenance 50 75% of asset life Rehabilitation % of asset life Replacement x 4x 50x 200x Operating Budget Capital Budget

28

29 Hamilton s Infrastructure - $16B Per Household Value = $114,000 Forestry & Horticulture Values included in related asset groups Street Trees: 260,000 Park/Natural Area Trees: 600,000 Street Flower Beds: 382 Park Shrub / Flower Gardens: Over 600 Housing Replacement: $840 Million Per Household: $5,600 High / Low Rise Apts: 4,735 Row Houses: Over 1,743 Semi-detached Houses: 483 Single Family Houses: 290+ Recreation & Culture Replacement: $668 Million Per Household: $4,500 Arenas & Outdoor Pools: 33 Sports & Community Halls: 29 Community Centres / Pools: 69 Cultural Facilities: 39 Corporate Facilities Replacement: $647 Million Per Household: $4,300 Administration: 18 Fire and Ambulance: over 32 Libraries: 15 Works and Maintenance: 66 Parks & Cemeteries Replacement: $325 Million Per Household: $2,200 Parks: 521, Trails: 54.6 km Cemeteries: Over 500 acres of land Transit Replacement: $139 Million Per Household: $930 Buses: Over 221 Para-transit Vehicles: 70 Bus Stops: 2,310, Shelters: 553 Water Replacement: $2,665 Million Per Household: $17,800 Water Mains: Over 2,000 km Hydrants: Over 12,700 Treatment Plant: 1 large plant Transportation Network Replacement: $5,347 Million Per Household: $35,500 Roads: Over 3,000 km Sidewalks: 2,400 km Cycling Network: Over 280 km Bridges: Over 390 Sanitary & Combined Replacement: $4,483 Million Per Household: $29,900 Sewer Mains: Over 1,600 km Treatment Plants: 2 Long Term Care Replacement: $58 Million Per Household: $400 Macassa & Wentworth Lodges Waste Management Replacement: $115 Million Per Household: $800 Active Landfill Sites: 1 Transfer & Recycling : 3 each Materials Recycling Facility: 1 Central Composting Facility: 1 Storm Replacement: $1,821 Million Per Household: $12,100 Storm Mains: Over 1,100 km Manholes: Over 15,000 Storm Ponds: 76

30 Daily Household Cost Comparisons

31 The Future is Dynamic % of asset life Minor Maintenance 26% 23% 14% 25 50% of asset life Major Maintenance 37% 26% 23% 50 75% of asset life Rehabilitation 14% 37% 26% % of asset life Replacement 23% 14% 37%

32 Hamilton s Asset Management Approach The Tactical Planning Window Infrastructure management systems Asset Risk and Criticality Analysis Capital Program Development 10 / 20 year programs TACTICAL PLANNING Summary Budget 3 to 20 Years

33 Life Cycle Management Review

34 Pavement Management System 6,500 Lane kms 15,000 Street Segments 34

35 Sewer Main - Overall Condition 2,800 km of Sewer Main to Assess

36 Water Main Overall Condition New Rehab Replace 2,000 Km of Water Mains to Assess Based On: Age Size Material Type Break Rate 36

37 Risk / Criticality Assessment Risk = Consequence of Failure X Probability of Failure

38 Criticality Drivers Criticality drivers confirmed and weighting factors established for Economic, Operational, Social and Environmental impacts e.g. Weighting factors for Commercial / Industrial Land Use Economic Operational Social Environmental Pipe Size 0.33 Critical Customer 0.56 Road Type 0.24 Watercourse Proximity 0.22 Bury Depth 0.22 Material 0.17 No Diversion 0.36 Sensitive Area 0.28 Material 0.16 Pipe Size 0.27 Pipe Size 0.40 Pipe Size 0.50 Accessibility 0.31

39 Multi-Criteria Weighted Model

40 Risk the basis for a Tactical Planning Framework Criticality Model Consequences of Failure Economic Impact Operational Impact Environmental Impact Social Impacts Probability of Failure CoF Rating Systems Condition & Reliability Operational Adequacy Regulatory Compliance Economic Efficiency PoF Decision Model Business Case Planning Tools Long Range Forecast Lifecycle Models What if? Analysis Sustainable Funding Full Cost of Services Response Toolbox Capital Program Urgent Action Planned Action Repair & Renewal New Growth Others? Maintenance Program Planned Work Predictive Work Preventive Work Others? Inspection Program Trouble Reports Visual Inspection Testing Regiment Flow Monitoring Others?

41 One System - Project Prioritization Road Condition Capacity / Function Risk (volume/speed) Underground Service Levels Strategic Plans Water Quality Fire Flow Protection Condition Capacity Risk Service Levels Strategic Plans Sewer SERG Condition Capacity Risk Service Levels Strategic Plans Right of Way Coordination of Rehab / Recon Optimize Capital Resources

42 Successful Implementations: Road - Neighbourhood Program Provincial Surplus Funding: LnKms 17 Neighbourhoods Cost of $27 M Regular Resurfacing : Cost of $56 M Cost Avoidance: - $29 M 42

43 Successful Implementations: Sewer Main Lining Program 320 km lined to date (April 2014) $80 M in Lining = $240 M in Replacement Cost avoidance - $160 M Less Community Disruption (green technology) 43

44 Successful Implementations - Facilities: Energy Efficiency and Renewable Activity All existing facility components analyzed for: Potential for change out to energy efficient components Potential industry incentives Timeline for pay back period (savings plus incentives) All capital projects include: Energy Efficient Lighting and Controls Water Efficiency (housing and lodges) Hamilton Renewable Power Inc. Methane capture at Landfill site and Wastewater Digesters Annual revenue of $1.7M

45 The Evolution of the Practice

46 Asset Management is Service Management The Asset is the conduit for the service Infrastructure provides services that bring our cities to life Pipes provide a clean drinking water service Roads provide a transportation service Buses provide a public transit service Facilities / Parks provide recreation programs and services

47 A NEW Asset Management definition Asset management is the coordinated activities of an organization to realize value from its assets in the achievement of its organizational objectives. Value: Assets exist to provide value to the organization and its stakeholders. Alignment: Asset management aligns the organizational objectives with technical and financial decisions, plans, and activities. Leadership: Leadership and workplace culture are crucial to realize value. Assurance: Asset management gives assurance that assets will fulfill their required purpose.

48 A NEW Framework: What are the organizational objectives? What assets are owned and what services do they provide What is the assets value (to the organization and the community)? What is the asset s performance (condition and capacity)? What are the life cycle needs and available options? What are the work/budget prioritisation processes? What are the financial strategies? What level of service is attainable?

49 Levels of Service Delivering Levels of Service (LOS) is fundamentally why a City is in business Corporate LOS = why we re here High-level, motherhood statements Customer LOS = what the customer gets Written in language that the customer understands Technical LOS = what we do Things about assets / activities we measure

50 LOS Framework Water Distribution Service Service Goal Technical LOS Accessible Affordable Non-Revenue Water (L/connection/day) Cost of Customer Billing / Service Connection O&M Cost ('000) / km Length Accommodate Growth Safe Keep employees safe Protect the Public % of Inoperable or Leaking Hydrants Reliable Sufficient quality / quantity # of Water Pressure Complaints by Customers / 1,000 People Served # of Water Quality Customer Complaints / 1,000 People Served Uninterrupted Service Regulatory Meet License - Safety Meet License - Environment Customer Service Responsive Accurate # of Main Breaks / 100 km Length # of Unplanned System Interruptions / 100 km Length % of Valves Cycled % of Inoperable or Leaking Valves

51 verview of trends Water Distribution Service Goal TLOS Trend Affordable Non-Revenue Water ? (L/connection/day) Cost of Customer Billing $11.3 $11.1 $12.8 $12.4 $13.6 / Service Connection O&M Cost ('000) / km $4.6 $6.3 $6.9 $7.7 $7.3 Length Protect the % of Inoperable or 1.43% 2.91% 5.65% 5.33% Public Leaking Hydrants Sufficient # of Water Pressure quality / quantity Complaints / 1,000 People Served # of Water Quality Customer Complaints / 1,000 People Served Uninterrupted # of Main Breaks / Service km Length # of Unplanned System ? Interruptions / 100 km Length % of Valves Cycled 34% 37% 32% 36% 35% % of Inoperable or Leaking Valves 0.60% 0.60% 0.60% 0.70%

52 Trends influencing LOS Climate change Aging infrastructure Uncertainty in growth forecasts Declines in water consumption Socio-Political expectations Declining senior gov t grants

53 Moving Forward - Community Engagement Services and Delivery for the Community What does the community desire? And at what level of service? What are they willing to pay?

54 Hamilton Community Engagement Project Delivery for the Community What is the current desired service level? What is the sustainable cost? How do we bridge the Gap together?

55 Levels of Service - Why so Critical? Links to the Strategic goals of the organization Links to the operations of the organization Is tangible, measurable, understandable, and is relevant to most stakeholders Justifies every dollar spent Creates a framework from which sustainability can be assessed A customer culture is dependent upon it

56 Thank you John Murray Manager of Asset Management, City of Hamilton. Vice Chair of CNAM.

57 Asset Management: the context Public infrastructure is a growing concern. As stewards of these assets, we as municipalities are challenged to balance current and future requirements, while living within our means. Aging Infrastructure Limited Resources Shifting Priorities Changing Environments

58 Business Drivers Many of us are revisiting our approach to capital asset management to help better understand, plan for, and address these challenges and opportunities. Target limited resources Adapt to changing realities Enhance transparency and defensibility Link assets and investments to the services they support Quantify and evaluate LOS, risk and value-for-money Plan-for and prioritize needs and opportunities Accommodate growth without compromising existing assets Incorporate social considerations into plans and decisions Improve resiliency and adaptability to internal and external change Communicate the business case behind spending decisions Justify new or increased investment based on ROI Demonstrate responsibility, stewardship and due diligence

59 Business Drivers This push for better asset management is being felt across Canada...

60 What is Asset Management? Asset management involves balancing infrastructure system costs, opportunities and risks against the desired performance of assets, to achieve organizational objectives. Value is created and sustained by managing the trade-offs between service, risk and cost over an asset s lifecycle, to Align assets and service delivery with current and future objectives Manage the risks associated with meeting these requirements Optimize lifecycle investment and minimize total cost of ownership

61 Asset Management Plans (AMPs) Asset Management Plans (AMPs) document an organization s asset management system and its strategy for meeting defined objectives through ongoing investment in infrastructure and business change. Business Goals and Objectives Desired Levels of Service State of Infrastructure AM Strategy Financial Strategy Why are we here? What is our vision and what do we want to achieve? What services do we need to support these goals? At what level do we need to provide them? How does our infrastructure support service delivery? Where are the gaps and opportunities? What do we need to do to achieve this? What capital and operating investments are needed? What will this cost us and how will we pay for it? What trade-offs are needed to make this sustainable?

62 Business Goals and Objectives Desired LOS State of Infrastructure Asset Management Strategy Financial Strategy Balance Budgets $ of projected deficit $ of sustaining capital vs. revenue Assets $ Grant Economic Operate Efficiently OPEX variance as % of budget Crew utilization rate Overtime hours as % of budgeted Activities Activities $ $ Fee Support Community Sustainability Environmental Stewards to the Environment Resilient to Climate Change GHG emissions as % of 2010 Values Unmitigated Climate Risk $ of backlogged upgrades # systems requiring adapt. Plan $ of backlogged adaptation works Assets Assets Activities $ $ $ Tax Reserve Social Accessible and Responsive Hrs needed to respond to service request Hrs of crew backlog Activities $ Support Community Development % of target pop served by active initiatives # of social housing units vs. # of requests Assets $ Borrow

63 What are the connections between Asset Management and long term thinking?

64 Key Sustainability Concepts Sustainable Development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. - Brundtland Commission, 1987

65 development that meets the needs of the present without compromising the ability of future generations to meet their own needs. - Brundtland Commission, 1987 Social Systems Ecological Systems

66 Sustainability Principles In a sustainable society, nature is not subject to systematic: Increases in concentrations of substances extracted from the earth s crust Increases in concentrations of substances produced by society Degradation by physical means And in that society, People are not subject to conditions that systematically undermine their capacity to meet their needs

67 The systems are interconnected and complex Environment Society Economy

68 Multiple approaches to implementing Integrated Community Sustainability Plans Triple Bottom Line approach Corporate Social Responsibility And many, many more Environmental Economic Social

69 Looking back at our list of how Asset Management supports long term thinking, what would we add when we ALSO consider sustainability?

70 How does Asset Management link to your municipality s sustainability work? What are the common goals? What operational processes are affected by both initiatives? Who is responsible for Asset Management in your community? Who is responsible for sustainability? What are the opportunities for integration?

71 Lunch Time!

72 Welcome back! Today s agenda: Welcome and Introductions Asset Management Practice: case study Sustainability and Asset Management Lunch Leadership in Asset Management: stories and dialogue Developing and Eco Assets Strategy (Gibsons BC) Sustainable Infrastructure Decisions (Revelstoke BC) Close

73 Creating an Eco Assets Strategy: The Gibsons Experience

74 Sustainable Infrastructure Decisions Doing the right project and Doing the project right

75 Presentation Outline The Problem The Solution The Example

76 The Problem WHY INFRASTRUCTURE DECISIONS MATTER

77 2012 Canadian Municipal Infrastructure Report Card

78 75% of the infrastructure that will exist in 2050 does not exist today

79 Smart People + Resources + Tools and Techniques

80 Smart People BUT WE STILL BUILD + MEDIOCRE Resources INFRASTRUCTURE + Tools and Techniques

81 It is no longer enough that infrastructure work, that it be constructed on time and within budget, or even that it last. It must now be sustainable

82 The Solution A RATING SYSTEM FOR SUSTAINABLE INFRASTRUCTURE

83 Infrastructure Disciplines

84 Envision Assessment Categories

85

86 The Example HOW TO USE THE ENVISION RATING SYSTEM

87 Revelstoke

88 Revelstoke Sewer Catchments

89 Sewer Network

90 Front and Wales Lift Station

91 Front and Wales Lift Station

92 The Neighbourhood

93 The Neighbourhood 1960 s

94 The Neighbourhood 1970 s

95 The Neighbourhood 2000 s

96 The Neighbourhood 2000 s

97 The Neighbourhood 2000 s

98 Front and Wales Lift Station

99 Imagine the Site

100 Imagine the Infrastructure

101 Imagine the Infrastructure

102 Imagine the Design and Construction - Engineering drafting room, Seattle Municipal Archives

103 Avoid Traps and Vulnerabilities Resource Traps Climate Traps Regulatory Traps

104 Infrastructure Choices

105 How Can I Implement Envision? ENV SP Credential Municipal Staff Consultants Incorporate into Project Planning Use the Envision Checklist Get buy-in from council Include in consulting procurement Be prepared to be flexible in delivery

106 For more information on Envision Mike Thomas P.Eng. ENV

107 A quick summary Sustainably managing our assets - Terry Dodds, City of Ryde - YouTube

108 Key Insights As a result of our time together, what is one thing that you know or understand differently?

109 GMF Leadership in Asset Management Program (LAMP) Seeks to address four main barriers that limit integration of asset management with municipal sustainability goals: 1) Organizational adoption of asset management (required) 2) Linking assets to services and outcomes (optional) 3) Developing more robust risk frameworks (optional) 4) Incorporating lifecycle management (optional) GMF grant maximum of $175K per participating municipality, to be approved when they are selected to participate (50% of total project costs) 110

110 LAMP Combines GMF project funding with a peer learning program Objectives: To work together & build a supportive peer network To generate innovative, good practices in asset management that demonstrate strong integration with municipal sustainability goals and targets To develop frameworks, practices and tools that will be shared nationally through FCM/GMF and national AM networks. 111

111 Who is the Program For? Is the program for municipal governments only? Is the program for large municipalities only? Does my municipality need to be advanced in asset management? Is There A Regional Focus? Yes, only municipal governments are eligible to participate. Seeking a range of municipal sizes, population doesn t matter BUT: minimum project team of 3 municipal staff will be required to participate Program has been designed for municipalities at both very early stage or advanced in asset management Demonstrated progress in implementing a corporate sustainability plan is required Seeking regional balance across Canada 5 10 Anglophone municipalities in Francophone municipalities in

112 Next Steps March 2015 Late June 2015 September 2015 Oct/Nov 2015 Begin Recruitment and Intake of Applications Deadline to submit applications Selection of Anglophone Cohort First face-to-face meeting of participants MORE INFO? Contact Donna Chiarelli Senior Advisor, Knowledge Services AND Join networking lunch on LAMP tomorrow in BALLROOM 3/4

113 CNAM Conference 2015 Driving Informed Decisions ( 9 th Annual Conference on Asset Management Venue - Vancouver Marriott Pinnacle Downtown Hotel Over 300 Asset Management professionals 50+ Asset management presentations and Experts Panels. New Professionals Group

114 Thank you!