Tangible Capital Assets For Asset Management

Transcription

1 Tangible Capital Assets For Asset Management 15 th Annual Ontario First Nations Conference and Tradeshow Aug 24 26, 2010 David Watt, Manager of Asset Management Roland Bradshaw, Senior Asset Management Engineer Tanya Stephens, Asset Management Technologist

2 Introductions Roland Bradshaw Senior Asset Management Engineer Tanya Stephens Senior Asset Management Technologist David Watt Manager Asset Management Group

3 Presentation Overview Part 1 8:30 to 10:00 PSAB vs Asset Management What, when, why and where of Asset Management Case Studies Part 2 10:15 to 11:45 Handling specific inventories Tips and Tricks Questions and Answers

4 Asset Management at AE 25member staff team located in ON, AB, BC- 25 years in situ municipal experience. Skill sets Engineering / IT / Geomatics Provide services and training in Asset Management and PSAB to over 400 communities across Canada

5 Some of our clients Regional District of Nanaimo City of Nanaimo Province of Saskatchewan Ledcor Inc. Ontario Power Generation Abbotsford Mission Water and Sewer Commission Towns of Taber, Nanton, Picture Butte, Stirling and Raymond, AB Region of Halton, ON City of Niagara Falls, ON County of Brant, ON MD 124 Lesser Slave Lake, AB City of Yorkton, SK Town of Fort Erie, ON Etc

6 Why are we here Asset Management: What Why When How Asset Management Case Studies Address your questions and challenges! We will not...

7 Talk about Elvis The King of PSAB The King of Rock and Roll

8 Quote for the day We have more information now than we can use, and less knowledge and understanding than we need. Indeed, we seem to collect information because we have the ability to do so, but we are so busy collecting it that we haven't devised a means of using it. The true measure of any society is not what it knows but what it does with what it knows. Warren Bennis

9 Some Key Terms Asset : Something I own and perform work on Resource: Something that I use to work on my assets Asset Inventory: A sustainable collection of current information on all my assets Level of Service: A quantifiable measure of the effectiveness of my management of assets using indicators Data Management: Management of Information for knowledge and better decision making

10 Access to Information For Better Decision Making!!!!!

11 Asset Management Myths Asset Management requires expensive software! Is a GIS or complex database Requires assistance outside of your community My budget process will be automatic if I buy the right software

12 What? The effective management of things I own to assess, improve, maintain or decrease a predetermined customer service level balancing: My available resources My legislative requirements My community expectations To make the things I own last at the least possible cost!

13 Why? Some definitive service level and performance indicators

14 The Real Reasons Why! Create a community infrastructure memory that exists irrespective of: Staff or organizational changes Provides meaningful information and a history Make the best use of limited resources Protection of community and environment Ability to create an evidence based business vs anecdotal plan for your systems

15 The Real Reasons Why! (cont) Ability to monitor the impact of investments over time - value for money! Focus on the things that deserve attention Prolong the life of assets in the most cost effective manner possible Prevent retirement based loss of community infrastructure memory

16 Asset Management What do I own? Asset Inventory Where is it? Mapping / GIS What condition is it in Condition Assessments ACRS How important is it if it fails what will happen criticality / risk When do I need to fix it? Limited funds Political Asset failure Capital Replacements Legislative Requirements Liability Risk Service level What will it cost - Valuation Which one should I fix first Prioritization

17 PSAB 3150 TCA Steps Inventory Valuation Amortize Manage? Buildings Land Equipment / Vehicles Water / Wastewater Plants Water / Sewer / Road Networks Transit IT / Furniture + Appliances Historical cost Reproduction Replacement Cost Appraisals Units of output Declining balance Straight line Residual value Additions Disposals Writedowns Budgets Reporting

18 Doesn t PSAB do that? Inventory Valuation Amortize Financial Statement Manage contributions, disposal, write downs etc.. Asset Management Inventory Valuation Condition Assessment Manage Assets Manage additions, rehabilitation, replacements, removals etc..

19 PSAB Will Provide a statement of what you own. Provide a simplistic lifecycle assessment of your assets. Provide a statement of the amortized value of your assets.

20 Water Distribution Network Wastewater Collection Network Stormwater Collection Network Sidewalks Road Network Alleys and Lanes Bridges in Saskatchewan Bridge Future Replacement Value $70,000, $60,000, $50,000, $40,000, $30,000, $20,000, $10,000, $0.00 Future Replacement Value Future Replacement Value City of Niagara Falls Watermains $10,000,000 $9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 Cash Flow Water Main - Replacement Town of Taber Alberta Infrastructure $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 Town of Taber Infrastructure Costing Summary Estimated Annual Expenditures Min Annual Expenditure Min Annual Expenditure

21 PSAB (cont) PSAB financial statement will NOT allow me to Better manage my assets / infrastructure Benchmark my asset performance against others Accurately predict replacement and rehabilitation PSAB can be the starting point for Asset Management! Asset Management factors in condition, risk and past performance to drive improved decision making

22 Example PSAB VS Asset Management

23 Saskatchewan Highways Bridge Valuation (PSAB) Strategic Asset Management Plan

24 Work Plan Consistent with Infraguide What do we own - Inventory What is the risk versus value* - AM Where is it* - Mapping What is it worth - PSAB What condition is it in AM What needs to be done and when - AM *Supplemental conditions added by AE Staff for the purposes of the study

25 What do you own (Bridge and Culvert Data Review) ~ 1800 Culverts ~ 2100 Bridges Saskatchewan Highways had/has an inventory

26 What is the Value (2006) Conventional Bridges + Timber > 10 m in length $ 2500 per square metre of deck surface. + $25,000 in disposal (Timber) Timber Bridges < 10 m in length* Assumes replacement with twin 2000 mm diameter culverts. + $25,000 in disposal costs $ 140,000 per structure Culverts Assumes replacement costs per unit metre / mm diameter. Total Bridge Inventory Value ~ $565 M Total Culvert Inventory Value ~ $ 61 M (estimated

27 Bridge Valuation Bridge Valuation Scenarios Capital Investment Life Total Replacem ent Value Depreciated Value Future Replacem ents Backlog Required 75 year $536,195,671 $239,952,750 $503,514,081 $32,681,590 $190,498, year $536,195,671 $175,629,279 $484,608,328 $49,607,418 $271,099,057

28 How long does it last? Bridge life 60 and 75 years Culvert life 35 and 50 years

29 PSAB / Lifecycle Based Spending Plan Assumes all structures will life + one day Not enough funding to replace on a lifecycle basis preserve critical structures! Bridge Future Replacement Value $70,000, $60,000, $50,000, $40,000, $30,000, $20,000, $10,000, $0.00 Future Replacement Value Future Replacement Value

30 Asset Management Plan Risk Analysis who uses the bridge and how often Funds should be spent on those most used Risk and Priority Factor Grain Haul Route 5% 10% 5% Road Class TAADT 10% 50% AADT 20% Structure Age Proximity to Populated Areas (RM)

31 What condition is it in? (Pilot Bridge Inspections) No comparative condition information available Small sample inspected and average condition by age / type of structure assessed Applied to spending plan We did not have all the information

32 Value Versus Risk and Condition Bridge Inventory Total Value by Rating Group $160,000, $140,000, $120,000, $100,000, $80,000, $60,000, $40,000, $20,000, $0.00 Start with these Replacement Value Rating Replacement Value Increasing importance!

33 Lessons Learned Not enough funding to replace on a lifecycle basis preserve critical structures! Inspect more frequently spend a little repair money now to prevent replacement later. Inspection information should be comparative Remove those not required

34 Back to the Process!

35 What Asset Management Principles can be applied to virtually all assets: Water, wastewater, facilities, dams, dykes, housing etc.. Asset must have a significant value and or present a risk. Monetary value <> value to the community!!! Must be tangible and measurable

36 Start now! When Current PSAB report first milestone in Asset Management. PSAB regulations and reporting may be altered to reflect performance condition based funding in the future Ability to present solid business cases for investment and funding in your infrastructure. Identify rehabilitation opportunities vs costly capital investments. Better decision making to avert High Profile Failures

37 How Do I Start! You already have! You do every day but not in a structured / systematic format! Resources PSAB Statement Inventory Asset Condition Reporting System Conditions and Priorities OPERATOR AND COMMUNITY EXPERIENCES!

38 The First Thing! Value through cooperation Form user groups Share collective experiences and challenges Share solutions Retain expert services together reduce cost Share ongoing costs staff, software and otherwise

39 Recognize Value PSAB + AM Approach Approximately 5-10% more effort to add AM related information at inventory stage. PSAB inventory build without AM component is a missed opportunity. PSAB is an annual requirement AM is a tool to use everyday

40 PSAB + AM Approach PSAB demands a significant amount of research. Add key values for Asset Management as part of your research: Material Condition Past Failures Operator Experiences Drawing references References :

41 Asset Inventory Data Create your inventory in a separate sheet. Copy or link your inventory data to the PSAB Asset Register.

42 Inventory Creation Create an asset management excel sheet Use standard abbreviations everywhere i.e. CON, CONC, Concrete? Number a map with the location of your assets hard to find now much harder to manage later! Sketch! Existing Paper maps Scanned maps Adobe Acrobat Digital map Autocad / GIS $$$ Make sure condition is comparative and on a predefined scale

43 Location, location, location!!! Replacement of 200 mm diameter watermain on Main Street Multiple watermains of that size / Main Street Visual Reference is key

44 Saskatchewan Example City of Yorkton Sidewalk Management and PSAB Valuation

45 City of Yorkton Sidewalk Inventory and Valuation PSAB Assignment Inventory of all sidewalk assets from historical records Determine current and historical value Replacement value ~ $21M Annual Capital Spending ~ $ 100,000 Life span = $21M / $85,000 = 247 years Above analysis does not tell you what to fix and when

46 PSAB Deliverable

47 Sidewalk Inventory and Valuation + Asset Management Additional Tasks Assess overall condition Assess risk and prevent future financial loss Assess replacement service levels Provide a replacement planning tool

48 PSAB statement plus Condition inspections. Criticality Visualized in GIS Simplification of results Asset Management Deliverable

49 Results Increase spending current budget is not sustainable Repair plan aimed at worst sidewalks in most travelled areas versus oldest sidewalks or worst first Better tracking of failure mechanisms Coordinate replacements with other infrastructure NOT FIX WHEN IT FAILS!!!!

50 Health Break!!!!!!!!!!

51 Building an Asset Inventory The Fundamentals

52 Remember Above All! Assets can depreciate, deflate and the amortization can be ACCOUNTED FOR in a linear fashion Assets do not DETERIORATE at uniform rate due to: Method of construction Environmental conditions Load applied on them Preventative Maintenance! Calvin could manage all of Canada s infrastructure with little help! I know that off the top of my head your successor won t!

53 Service Life vs Useful Life And Value Useful Life <> Service Life 75 Years <> 600 BC Cloaca Maxima (Rome) 2500 years and still operating

54 Presentation Overview Asset inventory tips and tricks Why don t we just buy software? Getting it together! Where to start External resources Specific asset examples

55 Asset Inventory Tips and Tricks Keep it simple you will have to maintain it! Add detail later as the business need arises. Identify every asset uniquely Identify the relative location of every asset Always look for existing information before conducting field surveys

56 Asset Inventory Tips and Tricks (cont) Nothing will ever be perfect get used to it! Overall success is a collection of small successes. Focus and accountability on one thing or one asset class at a time.

57 Asset Inventory Tips and Tricks (cont) Define the update and maintenance procedure before the inventory build! Form a team with the staff that operate and maintain the assets in your community Expand and add detail as required

58 Commitment Realize the commitment involved in not just building the inventory but maintaining the inventory The commitment involves All Staff, All the time

59 Why Asset Inventories Typically Fail! Value to users not stressed at the outset Too much data or too much detail Functional need before asset build is not stressed Communication operations and administration? Stressing large vs small functional successes Information upkeep after the project the new normal

60 Let s just buy some software! Protect Your Information Beware of black boxes No one system or piece of software will fulfill all municipal data requirements Implementation Cost = 3 X Software Cost

61 Let s just buy some software! Many systems are failing to deliver on promises Research, research and more research on the happy customer base Learning curve Staff requirements to keep the gorilla fed Ongoing costs and long term contracts Take a test drive! Will it work with the rest of our systems?

62 Retaining Outside Consulting Assistance Be clear on scope of project what s included more importantly what is not? Be clear on data ownership after project completion Aligned with one software provider STAY AWAY Get project deliverables in a format that you understand and can use!- (Excel) References, References and References

63 Where to start?

64 Document the process!

65 Where do I start The path of least resistance! General Arrangement Plans of water, sewer and road External Engineering Consultants for their records: Infrastructure Master Plans Development / Planning Studies Water and Sewer Models Autocad plans of your infrastructure Traffic impact studies Pavement Assessments Recent surveys Bridge Assessments CCTV Inspections

66 Other Resources Provincial, Regional and Federal Information Asset Condition Reporting System Reports PSAB Inventory Legacy operators of your systems Past public works staff

67 General Arrangement Plan

68 Linear Infrastructure

69 Asset Inventory Data Create your inventory in a separate sheet. Copy or link your inventory data to the asset register.

70 Inventory Creation Create an excel sheet with the information shown Use standard abbreviations for materials everywhere i.e. CON, CONC, Concrete? Number a map with the location of your assets hard to find now much harder to manage later! Sketch! Existing Paper maps Scanned maps Adobe Acrobat Digital map Autocad / GIS $$$ Capture only that which is relevant

71 Location, location, location!!! Replacement of 200 mm diameter watermain on Main Street?????? Visual Reference is key

72 Roads

73 Road / Transportation Linear road component Assets Road Surface Road Base Singular road assets Bridges Culverts Signage Traffic Control Street Furniture Valuation is discretionary based on road type - $ / metre squared! Asset registry should be segmented by intersection or change in road class?

74 Road Numbering / Segmentation Road sections to be numbered intersection to intersection unless Road class or material of construction changes. Ownership changes create a break!!! Add a prefix to identify the other potential service areas or operators if necessary i.e. owned by you, maintained by another All Asset Id s must be unique!

75 Required Information for Road Asset Inventory Asset ID Road ID From Street ID + To Street ID Asset Class Construction Date FULL ROAD NAME Location Provincial Road Class, (if available) Length Width Surface type Base type Road Condition Road Class Unique Drawing number reference Traffic volumes Valuation is on a M 2 basis Gravel Roads one cost Paved Roads two costs

76 Required Information Culvert Inventory Asset ID Culvert ID Asset Class Year Constructed - Amortization Road name Location Length - Valuation Diameter Valuation # of pipes Material useful life? Shape Crossing Type Valuation is on a $ per / diameter / metre x length basis

77 Required Information Bridge Inventory Asset ID Bridge ID Asset Class Construction Year - Amortization Location Length - Valuation Width - Valuation Superstructure material - Valuation Substructure material - Valuation Surface material - Valuation Bridge Condition Crossing type Drawing Reference Load Restrictions Valuation is on a M 2 basis of deck by Bridge type

78 Traffic Control / Signs / Street Furniture Signs are assumed as implicit to Road assets! Traffic control Lights Control Systems Street lights talk to your auditor! All are valued singularly based on standard types Create a SIMPLE Asset listing Asset ID Asset Class Asset Description Year of Construction Condition

79 Water

80 Water Linear water assets Watermain Hydrants Large system valves Services Value these inclusive of all components $ / per diameter / unit metre Asset registry should be segmented by valve to valve or junction Also segment if diameter / material changes!

81 Required Information Water Inventory Asset ID Watermain ID Asset Class Year Constructed Location Length Diameter Drawing number Material Previous break record Visual inspection at site of break Leakage Pressure / Fire Flow? Valuation is on is on a a $ / $ diameter per diameter / metre x length basis

82 Sanitary / Storm Sewer

83 Sanitary / Storm Sewer Sewer line component assets Sewer line Manholes Service Laterals Value these inclusive of all components $ / per diameter / unit metre Asset registry should be segmented by manhole to manhole section.

84 Sanitary / Storm Sewer Segmentation SA-4 SA-1 SA-2 SA-3 In the direction of flow! Upstream to Downstream

85 Sanitary / Storm Numbering Number sanitary and storm segments in the direction of flow Add a prefix to identify the system in the asset register Sanitary SA Storm ST Forcemain FM All Asset Id s must be unique!

86 Required Information for Asset ID Sewer line ID From Manhole ID + To Manhole ID Asset Class Construction Year Length Diameter (W+H) Location Slope Shape Material Unique Drawing number reference CCTV report / visual condition Sanitary and Storm Asset Inventory Valuation is on a $ / diameter / metre basis

87 Facilities

88 Facilities Infrastructure facilities Water treatment plants Wastewater treatment plants Pump stations water & sewage Reservoirs Storage tanks Lagoons Water supply facilities wells, intakes Communal septic systems

89 Other Facilities Fire stations Playground Recreation centres Arenas Administration and works buildings Curling rinks Golf courses Etc

90 Facilities Required Inventory Detail will depend upon the level that you wish to manage to. Singular bomb drop register entry and cost based on capacity. $ per L/s etc.. Functional pooled component level Structural + building envelope HVAC Roofing Land Etc..

91 Asset ID Asset tag Asset class Purchase cost Purchase Date Useful life Location Description Drawing number Vendor Condition Manual Photograph Floor Room Facility Detailed Component Inventory

92 Facility Specific Issues Tags! Understand that you may have many items < Capital Threshold Items may < Capital Threshold but may be critical to operation! Locate items on drawings where possible on drawings Many like items in a limited space or footprint!

93 LAND?

94 Sources for Valuation Historical capital works tender documents Pool your resources with your neighbours Local Engineering consultants many clients many projects ONLINE! Product Catalogues Purchasing documents Provincial Ministries

95 Inventory Maintenance The NEW NORMAL Someone has to be singularly accountable One person day per month after initial effort. Regular audits Standard Operating Procedures, (SOP), for new staff

96 External Inventory Data Providers Reducing Your Effort Supply a template to: Equipment suppliers Developers Engineering Consultants Contractors Service Providers No statement no holdback (25%) Get inventory and valuation in YOUR format of choice.

97 Sources of Age Information Adjoining infrastructure Plans of subdivision Staff

98 Field Data Collection Do not SURVEY! Using a GPS 3 metre accuracy Try before you buy Check against known positions available from the province before beginning your survey

99 Geographic Information Systems (GIS) This To This

100 GIS Desktop Nerd Users WEB Everyone Else

101 Another Example PSAB 3150, Water System Assessments, Municipal Asset Information System Northern Saskatchewan

102 Three Components Component 1A: Complete asset inventory for PS 3150 compliance Component 1B: Prepare WSA s of water and sewer systems in Northern Saskatchewan Component 2: Concurrent with the PS 3150 work, implement a Northern pilot project of the data collection for the MAIS initiative Component 3: Develop the MAIS Basic database, Geographic Information System (GIS), and import/export tools at the provincial level. BLEND ALL OF THESE TOGETHER TO CREATE COMMUNITY INFRASTRUCTURE MEMORIES

103 Work Plan: Weyakwin Pilot Project Pilot community: Northern Hamlet of Weyakwin Purpose: Ensure all team members aware of the infrastructure and level of detail required for the project

104 Challenges: Data Collection & Processing PS 3150 assigns a Tangible Capital Asset threshold $5,000 per item for this project Future use of information for asset management may require asset criticality to be considered

105 Data Collection: Model & Serial No. To help determine useful life and condition, inspectors photographed model and serial number plates Some were more readable than others!

106 Data Collection: Onsite Drawings/Info Data inspectors collected information in the community offices, eg. Engineering drawings Insurance documents Reports of damage and failure

107 Data Collection: Water Wastewater Buffalo Narrows Buildings Denare Beach Roads Ile-a-la-Crosse Michel Village

108 Data Collection: Playgrounds Communications Bear Creek Docks Camsell Portage Cemeteries Brabant Lake Cumberland House

109 Data Collection: Land Fills Fleet Jans Bay Creighton Recreation Fencing La Loche Patuanak

110 Data Collection: Offices Storage Tanks Sled Lake Uranium City among others.

111 For each community: PSAB statement Asset Management System Mandatory WSA Results

112 The Value! Weyakwin staff The information contained in the asset management system really helps the staff to determine what is important to maintain and have replacement parts for! Unknown The GIS / mapping system provides an overall map of the community that wasn't previously available to Public Works Staff that allows us to plan what we do work more effectively. Our operator left for another community and he knew everything. AE Project Manager information compiled will enable consulting firms to prepare future studies with more accuracy; and cost efficiencies for future reports should be recognized by the community AE Field Inspection Team From an operator point of view, the nature of this project has helped bridge any previous gaps that may have been between Public Works and Administration within the communities, as they had to work together in order for us to collect the required data.

113 The Value LaRonge Administrator The detailed list of assets provided to the community allowed us a better understanding of what we owned! " I forgot we had that. It was a trash pump used for pumping water in wet years, brand new, never used worth approx. $10-15,000 Administration Staff in Most Communities I didn t really have an appreciation for all of the things that we owned, their importance to the community and their value prior to the project. I knew there was a funding gap but now I can quantify it.

114 Wrap Up! Start simple Expand information as required Software is not the answer Learn from community experiences Stick with it!

115 Thank You Questions David Watt, Manager Asset Management Group, Dr Roland Bradshaw, Senior Asset Management Engineer, Tanya Stephens, Asset Management Technologist, Associated Engineering Asset Management and Applied GIS Suite A Hannover Drive St Catharines, ON