TOWN OF GRIMSBY ASSET MANAGEMENT PLAN

Transcription

1 TOWN OF GRIMSBY ASSET MANAGEMENT PLAN August 20, 2014 DFA Infrastructure International Inc.

2 Executive Summary ES1 Background The Town of Grimsby (Town) with a population of approximately 25,325 is located in Niagara between Lake Ontario and the Niagara Escarpment. A mix of residential, light industrial, commercial and agricultural activities drives its economy. The Town is responsible for providing a range of services including public works services, to its community to support the local lifestyle and economy. The ability to deliver these services at the required levels depends on the performance and condition of the respective assets. The asset classes covered by this Asset Management Plan (AMP) and their respective replacement values are included in Figure ES-1. Figure ES-1: Replacement Cost Valuation of Assets (2013 Dollars) Street Light System 2,711,341 1% Road Network 101,373,932 21% Water System 105,783,060 21% Stormwater System 65,282,156 13% Wastewater System 217,317,609 44% Replacement Cost (in 2013 $) = $492,468,098 ES2 State of Infrastructure Report The asset condition is rated as: good, fair and poor. Table ES-1 summarizes the asset condition for each asset class and shows the replacement cost in each condition category. A more detailed breakdown of the condition of each asset class is provided in Appendix A, which shows the actual quantity of each asset type that is in good, fair or poor condition. 1 DFA Infrastructure International Inc.

3 Table ES-1: Asset Condition by Replacement Value Asset Good Fair Poor TOTAL Watermains 68,984,717 3,937,342 10,834,865 83,756,924 Service Connections 14,529, ,529,140 Water Meters 2,701, ,600-3,383,200 Hydrants 4,094, ,094,025 Water Equipment 19, ,771 Total Water System 90,329,253 4,618,942 10,834, ,783,060 Percentage (%) 85.4% 4.4% 10.2% Sanitary Mains 6,459,750 28, ,950 6,727,050 Sanitary Laterals 180,854,898-7,020, ,875,846 Sanitary Manholes 19,856, ,851 20,627,460 Storage Tanks 2,087, ,087,253 Total Wastewater System 209,258,510 28,350 8,030, ,317,609 Percentage (%) 96.3% 0.0% 3.7% Stormwater Mains 51,065, ,627 51,723,396 Manholes 7,726, ,726,260 Catch Basins 5,825,000-7,500 5,832,500 Total Stormwater System 64,617, ,127 65,282,156 Percentage (%) 99.0% 0.0% 1.0% Street Lights-Luminaire - 1,479,564-1,479,564 Street Lights-Posts 758, , ,921 1,231,777 Total Street Light Network 758,703 1,596, ,921 2,711,341 Percentage (%) 28.0% 58.9% 13.1% Road Base 31,293,084 3,879,289 79,853 35,252,227 Road Surface 28,651,004-3,288,397 31,939,401 Road Structures 10,928, ,958 6,761,747 18,442,200 Road Signs 7, , ,769 Sidewalks 8,383,397-38,900 8,422,297 Land Improvements 301, ,005 Facilities - 1,661, ,000 2,162,000 Total Road Network 79,564,982 6,292,247 10,778,669 96,635,898 Percent (%) 82.3% 6.5% 11.2% TOTAL ASSETS 444,528,478 12,536,256 30,665, ,730,064 Percentage (%) 91.1% 2.6% 6.3% In terms of replacement cost, the majority (91.1%) of the assets valued at approximately $444.5 million are in good condition, $12.5 million (2.6%) of the assets are in fair condition and $30.7 million (6.3%) in poor condition. The condition by asset class is summarized as follows: Water System Generally good condition. However, approximately 22 km of pipe (cast iron) and estimated to cost $14.8 million (18%) is in fair or poor condition. The ages for the Water Meters were for the most part assumed. An estimated $0.7 million (20%) is in fair to poor condition; 2 DFA Infrastructure International Inc.

4 Wastewater System Generally good condition. However, approximately 5.3 km of pipe, 0.3 km of laterals and 59 manholes estimated to cost $8 million (4%) are in poor condition; Storm Water System Generally good condition. Approximately 1.0 km of pipe and 3 catch basins estimated to cost $0.67 million (1%) is in poor condition; Street Lighting System All of the 2628 luminaires are in fair condition and are valued at approximately $1.5 million. Street light poles are generally in good condition with 680 (62%) valued at $0.8 million and 424 (38%) valued at approximately $0.5 million in fair to poor condition; Road Network Generally in good condition. Approximately 17.7% of the network valued at $17.1 million is in fair or poor condition. This includes 28 km of road base, 13 km of road surface, 29 structures, 3102 road signs, 0.39 km of sidewalk, and 2 facilities. Because the condition assessment is primarily age based, the condition of the assets noted as being in fair or poor condition should be confirmed and the scope of work determined prior to undertaking replacement and/ or rehabilitation work. The future infrastructure requirements are summarized in Table ES-2. 3 DFA Infrastructure International Inc.

5 Table ES-2: Infrastructure Requirements Asset Total Replacement Costs ($2013) 25 Year Requirement ( ) 25 Year Requirement (%) Requirement Beyond 25 years (>2037) Requirement Annual Beyond Lifecycle 25 Replacement years (%) Water-Watermains 83,756,924 19,207,333 20% 64,549,590 3,407,900 Water Service Connections 14,529,140 3,331,856 4% 11,197, ,161 Water Meters 3,383,200 3,383,200 4% - - Water Hydrants 4,094, ,460 0% 3,764, ,393 Water Equipment 19,771 19,771 0% - - Total Water 105,783,060 26,271,621 28% 79,511,439 4,200,455 WW-Sanitary Mains 187,875,846 18,007,014 19% 169,868,832 9,003,125 WW-Sanitary Laterials 20,627,460 1,977,045 2% 18,650, ,480 WW-Sanitary Manhole 6,727, ,200 1% 5,981, ,917 WW-Storage Tank 2,087,253-0% 2,087, ,314 Total Sanitary 217,317,609 20,729,258 22% 196,588,350 10,426,837 SW-Storm Mains 51,723,396 1,201,946 1% 50,521,450 2,673,622 SW-Manholes 7,726,260 72,675 0% 7,653, ,166 SW-Catch Basins 5,832,500 40,000 0% 5,792, ,134 Total Storm 65,282,156 1,314,621 1% 63,967,535 3,384,921 Street Lights-luminaire 1,479,564 1,479,564 2% - - Street Lights-Posts 1,231, ,166 1% 468,611 27,929 Total Street Lights 2,711,341 2,242,730 2% 468,611 27,929 Roads-Base 35,252, ,600 0% 34,912,627 1,085,726 Roads-Surface 31,939,401 22,368,480 24% 9,570, ,550 Roads-Structures 18,442,200 9,778,705 10% 8,663, ,236 Roads-Signs 116, ,769 0% - - Roads-Sidewalks 8,422,297 75,500 0% 8,346, ,193 Roads-Land Improvements 301,005-0% 301,005 15,766 Roads-Facilities 2,162,000 2,106,000 2% 56,000 3,402 Total Roads 96,635,898 34,785,054 37% 61,850,844 2,622,873 Vehicles 9,540,034 9,540,034 10% - - Total Vehicles 9,540,034 9,540,034 10% - - TOTAL 497,270,098 94,883, ,419,244 20,663,016 ES3 Levels of Service The Town s corporate strategic objectives related to service levels and their respective asset classes are not explicitly documented in a strategic plan. However the general objectives of providing services at levels that meet the community expectations and compliance with regulatory requirements are inherent in the Town s current levels of service. These include but are not limited to: The DWQMS Operations Plan; The Minimum Road Maintenance Standards 4 DFA Infrastructure International Inc.

6 The Town s DWQMS Operations Plan sets out the required service levels related to the water system and the Town s road maintenance standards (winter maintenance, patrols, etc.) are consistent with requirements of O.Reg. 239/02, which sets the minimum road maintenance service levels in Ontario and represent the desired service levels regarding the road system. The current annual maintenance budget and staff resources allow the Town to meet these targets. The Municipal Performance Measurement Program (MPMP) 2010 results were also used as the basis for defining the expected service levels for asset classes where MPMP information is available. The target values for the Town are the 2010 median MPMP values for the group of similar municipalities, i.e. southern communities with populations of 20,000 to 39,999. In other cases the desired level of service is identified as the percentage of the asset class that is deemed to be in good condition. The target value for watermains is the sum of watermains in good and poor condition. The watermains currently in poor condition (13%) are Cast Iron mains, which will be completely replaced in the upcoming years. The initial target is set at 80% for sanitary sewers and storm water mains and 63% for roads, recognizing that these targets would be adjusted over time as more detailed asset condition information become available. The target service levels are not currently being met for the following assets: Watermains. 82% of the watermains are in good condition compared to the target of 95%; and Road Structures. Only 60% of road structures are in good condition compared to the MPMP target of 74%. ES4 Preferred Asset Management Strategy The Town s asset management policy with respect to asset data verification and undertaking condition assessments shall include: Developing an asset database to track the inventory of assets and their respective attributes and condition; Using age as an indicator of asset condition in the absence of actual condition information; Identifying deteriorating asset performance through the normal operations and maintenance functions and flagging these assets for potential future rehabilitation and/ or replacement; Undertaking asset condition inspections on specific assets as needed based on age and/or indications of declining asset performance and regulatory requirements, to confirm asset condition; Allocating staff and equipment resources to long-term asset management; Giving priority to rehabilitation versus replacement to the extent possible in order to reduce costs; Allocating budgets on a prioritized basis for asset replacement and/ or rehabilitation while having regard to affordability and risks of delaying required work; Working with other municipalities when beneficial to do so in undertaking projects and initiatives; 5 DFA Infrastructure International Inc.

7 Seeking provincial government, federal government and other third party funding including public-private partnerships (P3) as much as possible for asset management projects and activities; Funding the respective asset management costs from the respective sources of funding including user rates, taxes, provincial government, federal government and other third party sources. This would include contributions to and use of reserves in conjunction with debt financing; and Updating the Asset Management Plan every 5 years as a minimum. This strategy offers a mix of rehabilitation and replacement of assets. Rehabilitation is considered for assets where the risk to the operation and/ or service is acceptable when compared to replacement. Assets that are deemed to be in fair or poor condition are addressed sooner rather than later. The main components of this strategy include the following: Water System Replacing the majority of Cast Iron watermains and services that are in fair or poor condition over a period of 15 years through an average annual replacement program. The Cast Iron watermains would be entirely replaced by Relining (instead of replacing) the remaining watermains and services that are in fair or poor condition as their service lives expire. The Relining program would initiate in 2033; Continuing to meet DWQMS Requirements; and Continuing Annual Operations & Maintenance (O&M) Activities. Wastewater System Relining sewer mains and laterals and undertaking spot repairs as necessary on segments that are in poor and fair condition; Road Network Rehabilitating/Resurfacing roads multiple times throughout the 100-year period. Timing of rehabilitation is based on the expected useful life that each treatment can be expected to provide. Road reconstruction projects identified in the Municipality s Capital Budget Forecast are included in this strategy but averaged throughout the initial 10 year period; Annual Maintenance to comply with the Municipality s service level standards; and Replacing sidewalk sections, road signs and road structures as their expected useful lives expire. Annual needs are averaged for the initial 10 years. Storm Water System Relining storm water mains based on expiry of their useful lives; Replacement of catch basins and manholes as their useful lives expire 6 DFA Infrastructure International Inc.

8 ES5 Financial Strategy Water System ES Table 3 summarizes the short-term revenue requirements i.e. for the next 5 years for the water system. ES Figure 2 shows the 25-year revenue requirements in relation to annual increases of 2% and 5%. Increases in water rate revenues of approximately 3.5% to 2.5 % per year between 2014 and 2018 are required to fund the asset management needs. The annual increases in revenue required tend to decline in the later years. ES Table 3: Short-Term Water Rate Revenue Requirements Cost / Revenue Item New or Non-Asset Related Capital 87,550 68,959 81,955 78,786 81,149 Asset Rehabilitation Asset Replacement 1,594,694 1,642,534 1,691,810 1,742,565 1,794,842 Total Capital Requirements 1,682,244 1,711,493 1,773,765 1,821,350 1,875,991 Debt Financing Capital Reserve Financing 1,247,244 1,711,493 1,773,765 1,821,350 1,307,991 Other Financing (Grants, third party, etc.) DC Reserve Financing 435, ,000 Total Capital Financing 1,682,244 1,711,493 1,773,765 1,821,350 1,875,991 Operations & Maintenance 4,029,405 4,079,566 4,158,929 4,239,880 4,322,449 Transfers to Capital Reserves 1,460,000 1,546,000 1,606,000 1,668,000 1,732,000 Debt Repayment Less Non-Rate Revenues 180, , , , ,838 Revenue Requirements (from Users) 5,309,405 5,441,966 5,577,657 5,716,862 5,859,611 Annual Increase ($) 178, , , , ,749 Annual Increase (%) 3.5% 2.5% 2.5% 2.5% 2.5% ES Figure 2: Long-Term Water Rate Revenue Requirements 18,000,000 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 - Water Revenue Requirements Year ( ) What a 5% Annual Increase Would Look Like What a 2% Annual Increase Would Look Like Revenue Requirements (from Users) 7 DFA Infrastructure International Inc.

9 Wastewater ES Table 4 summarizes the short-term revenue requirements i.e. for the next 5 years for the wastewater system. ES Figure 3 shows the 25-year revenue requirements in relation to annual increases of 2% and 5%. Increases in wastewater rate revenue of approximately 1% to 2% per year between 2014 and 2018 are required to fund the asset management needs. The annual increases in revenue required tend to remain constant at a 2% in the later years. ES Table 4: Short-Term Wastewater Rate Revenue Requirements Cost / Revenue Item New or Non-Asset Related Capital 1,617, ,094 81,955 84,413 86,946 Additional Allowance for Capital Projects - 500, , , ,000 Asset Rehabilitation 294, , , , ,205 Asset Replacement 27,532 28,358 29,209 30,085 30,987 Total Capital Requirements 1,938,903 1,059, , , ,138 Debt Financing Capital Reserve Financing 1,938,903 1,059, , , ,138 Other Financing (Grants, third party, etc.) DC Reserve Financing Total Capital Financing 1,938,903 1,059, , , ,138 Operations & Maintenance 4,068,105 4,137,362 4,219,223 4,302,721 4,387,889 Transfers to Capital Reserves 950, , , , ,000 Debt Repayment Less Non-Rate Revenues 63,240 64,505 65,795 67,111 68,453 Revenue Requirements (from Users) 5,081,345 5,151,867 5,235,018 5,319,831 5,406,342 Annual Increase ($) 116,765 67,992 80,571 82,182 83,826 Annual Increase (%) 2% 1% 2% 2% 2% ES Figure 3: Long-Term Wastewater Rate Revenue Requirements 18,000,000 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 - Wastewater Revenue Requirements Year ( ) What a 5% Annual Increase Would Look Like What a 2% Annual Increase Would Look Like Revenue Requirements (from Users) 8 DFA Infrastructure International Inc.

10 Tax Supported All services provided by the Municipality except for water and wastewater system costs, including any asset related costs, are recovered through the annual tax levy. The annual revenues required for the storm water system and the road network over the next 25-years through the levy, to fund the preferred asset management strategy are presented in Appendix H. ES Table 5 summarizes the shortterm tax levy requirements i.e. for the next 5 years. ES Figure 4 shows the 25-year revenue requirements in relation to annual increases of 2% and 5%. The estimated increases to the annual revenues to be obtained through the tax levy for the tax supported assets considered in this AMP (i.e. storm water, roads, bridges, culverts and sidewalks) between 2014 and 2018 are 2.5% to 9.3% annually. Beyond 2018 the required annual revenue increases would range between 2% and 4%. It is recommended that the Municipality review its service expectations in greater details to assess the feasibility of opportunities to reduce service levels and associated costs. It is also recommended that grant funding be aggressively pursued to partially offset costs in the next 5 years and reduce the impact to the levy. ES Table 5: Short-Term Tax Supported Services Revenue Requirements Cost / Revenue Item New or Non-Asset Related Capital 1,192, , , ,495 70,716 Asset Rehabilitation 732, ,169 1,088,400 1,121,052 1,246,030 Asset Replacement 2,126,315 2,182,147 1,439,232 1,482,409 1,526,881 Total Capital Requirements 4,051,426 3,075,467 2,681,706 2,867,955 2,843,627 Debt Financing Capital Reserve Financing 1,111,426 1,817, ,707 1,527,955 1,418,627 Other Financing (Grants, third party, etc.) 344, , , Gas Tax Financing 1,550, , , , ,000 DC Reserve Financing 1,046, , , , ,000 Total Capital Financing 4,051,426 3,075,467 2,681,707 2,867,955 2,843,627 Operations & Maintenance 3,055,835 3,009,265 3,061,564 3,114,910 3,169,323 Transfers to Capital Reserves 1,043,000 1,188,691 1,239,973 1,292,771 1,477,121 Debt Repayment Less Non-Rate Revenues 270, , , , ,257 Revenue Requirements (from Users) 3,828,835 3,922,556 4,020,629 4,121,155 4,354,187 Annual Increase ($) 325,365 93,721 98, , ,032 Annual Increase (%) 9.3% 2.4% 2.5% 2.5% 5.7% 9 DFA Infrastructure International Inc.

11 ES Figure 4: Long-Term Tax Supported Services Revenue Requirements 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 Tax Supported Revenue Requirements What a 5% Annual Increase Would Look Like Revenue Requirements (from Users) What a 2% Annual Increase Would Look Like Year ( ) Vehicles ES Table 6 summarizes the short-term revenue requirements i.e. for the next 5 years for vehicle and equipment replacement. Increases in vehicle and equipment revenue of approximately -20% to 5% per year between 2014 and 2018 are required to fund the asset management needs. The annual increase in revenue remains at 0% for the remainder of the forecast period. ES Table 6: Short-Term Vehicle and Equipment Revenue Requirements Cost / Revenue Item Vehicle Replacement Requirements 640, , , , ,847 Total Capital Requirements 640, , , , ,847 Debt Financing Capital Reserve Financing 540, , , , ,847 Other Financing (Grants, third party, etc.) Gas Tax Financing DC Reserve Financing 100, Total Capital Financing 640, , , , ,847 Operations & Maintenance Transfers to Capital Reserves 686, , , , ,000 Debt Repayment Revenue Requirements (from PW) 686, , , , ,000 Annual Increase ($) 30, , Annual Increase (%) 5% -20% 0% 0% 0% 10 DFA Infrastructure International Inc.

12 ES6 Recommendations The following are the recommendations: 1. That the Asset Management policy statements noted in Section 2.6 be adopted by the Town; 2. That the preferred Asset Management Strategy presented in Section 4 be adopted by the Municipality; 3. That the Financial Strategy presented in Section 5, including the capital investments for each asset class over the 25-year period, be adopted by the Town to support the preferred asset management strategy for the water and wastewater system; 11 DFA Infrastructure International Inc.