asset management a story of integration wally wells p. eng

Asset Management A STORY of INTEGRATION

Wally Wells P. Eng.

What do we do?

•Provide Services! That’s it!!

•Level of Service defines everything

•Physical Infrastructure is only there to provide a service

(c) Asset Management BC, 2015(c) Asset Management BC, 2015 www.assetmanagementbc.cawww.assetmanagementbc.ca

What are Local Government assets?

•Buildings/ sheds / garages•Fleet / vehicles/ mobile equipment•Water system and plant•Sewer system and lagoon•Drains/intakes/outfalls•Parks/trails/ bikeways•Roads/ parking lots and structures•Airports/harbours•Parks and street furniture•Cemeteries•Street lighting•Emergency resources


What are going to about?•Heard – About program

•Will hear – case studies - applications

•Fill in the Blanks

•Based on many experiences

•Pot Pourri of issues !!!


What is the Issue?• Sustainable Infrastructure provides

good living / working space and competitive economic climate

• So, we have managed assets for decades………….

• Here’s the Problem


What is the Issue?• Municipal Budgets reflect current

operations • 100+ years of doing it wrong especially

since about 1950

• Not long term 5 year…really 2 +3 years • Never considered asset renewal /

replacement

• We have huge need and backlog with no plan


Where to Start?• Don’t be overwhelmed – It will take time • Scalable – NOT one size fits all

• Start small – pick an area or an asset

• Get training – Understand the process • Know what you are doing – collectively * Asset SMART

• Have a good conversation between technical and financial


Where to Start?• Develop your corporate team – have a

champion

• Use a committee or Working Group

• Use Resources • You have more data than you think

• Integrate existing plans • Have your plan of attack and timeline

• Communicate at all levels.


Data• PSAB 3150 provided a base

• Included some approach to condition assessment

• Keep Inventory up to date * policies and procedures * timeline

• Condition assessment – Why do I need it?

• Adjust mindset – the 30% solution.

• Short term projects


Financial• PSAB 3150 provided a base

• Understand that it is an accounting standard

• May need to defer to technical requirements

(expected life)

• Replacement value

• Adding / deleting to inventory


Operations and Maintenance

•Depreciation and operations / maintenance * connection

•Budget process in municipal government does not differentiate

•Add criticality and risk

•Treat analysis as a guide – not absolute

•Adding / deleting to inventory


Integrated Long Term Capital PlansObjective:Identify a longer term (50 – 100 years) view of linear asset renewal with costs by funding source to help evaluate our long term annualized funding requirements.

10 Sept 2009

Roads

Cost

Profile

Framework for Sustainable Service Delivery

Asset Management

Asset Management is an integrated process, bringing together

skills, expertise, and activities of People; with Information

about a community’s physical Assets; and Finances; so that informed

decisions can be made, supporting Sustainable Service Delivery.

It REALLY is a change in business process!



The Calgary Story “In particular, an accurate inventory and

value of assets is critical to properly respond to a disaster situation and is core to the city’s asset management system.”


The Gamètì Story• Keeping records

• Water plant

• Administration building


The District of North Vancouver Story

• Make it our day job

• How to save time and money


The High River Story• A good inventory really

helps


Kitimat• $2.0++ billion investment – large

construction camp

• Consuming assets with no increase in maintenance money


http://www.nisgaalisims.ca/

http://www.portcoquitlam.ca/Home_Page.htm


SINGULAR OBJECTIVE

TO CREATE AND FACILITATE OPPORTUNITIES TO SHARE KNOWLEDGE, TOOLS AND

INFORMATION RESPECTING “INTEGRATED” ASSET MANAGEMENT.


By using the tools and resources that Asset Management BC has developed: - AssetSMART - Framework - AM Policy - Workshops - NAMS training - Newsletter 12th Edition - Website(resources) - Case studies

ASSET MANAGEMENT BC


Growing Network


People

Information

Assets

Finances



Assess

Plan

Implement


Resources• Asset Management BC

• Asset Management policies

• Standards (PAS 55000)

• References IPWEA

• Case studies (12)

• Financial – LTFP

• Asset Management Plan



AssetSMARTAssetSMART to assess their capacity to manage theirassets.

•Evaluate their asset management capacity in a wide range of areas

•Identify particular areas of strength and areas for improvement

•Establish priorities

•Build awareness of the many dimensions of asset management

•Generate productive discussion with organization

•Measure progress over time

•Set short-, mid-, and long-term objectives in specific areas

www.assetmanagementbc.cawww.assetmanagementbc.ca


An Asset Management Governance Framework for Canada

OOObbbjjjeeeccctttiiivvveeesss ooofff AAAsssssseeettt MMMaaannnaaagggeeemmmeeennnttt Sustainability of communities – building environmental, financial and social resilience and adaptability to face a changing world

KKKeeeyyy PPPrrriiinnnccciiipppllleeesss fffooorrr MMMaaannnaaagggiiinnnggg IIInnnfffrrraaassstttrrruuuccctttuuurrreee Infrastructure needs to be managed as assets with value that needs to be

protected

Assets need to be defined within the context of community goals for level of service

Assets need to be managed on the basis of full lifecycle assessments

Assets need to be managed as inter-connected systems considering the relationship between various categories of assets

Asset management activities themselves need to be managed as integrated processes to optimize investment decisions

Are you ready (AssetSmart)Inventory (PSAB 3150)Condition assessmentAsset Class assessments

Level of ServiceRisk / Criticality ProfileIntegrated Strategy

From PSAB 3150

Asset Identity

Asset Valuation

Asset Depreciation

Asset performance.

Does it meet current user requirements?

Are there current limitations? Safety? Capacity? Regulatory?

Environmental ?

Do you have a measurement for performance?

Can measurements be used for comparative “ benchmarking“ ?

Asset condition

Was the asset rehabilitated/replaced?

What is the asset’s life expectancy under ideal conditions ?

What is the current projected life of the asset ?

What is the present condition of the asset?

What assets are decommissioned or deleted?

Water System - Age Profile

Water System Challenges

• A moderate percentage of water infrastructure is reaching the end of its useful service life.

• Some material types are not performing as expected and are experiencing premature failure.

• The cost of repairing and replacing the water system has increased dramatically over the past several years (>inflation).

Storm Drain System - Age Profile

Sewer System - Age Profile

Infrastructure Replacement Cost

Infrastructure Type Current Replacement Cost

Civic Facilities $ 209,000,000

Water System $ 262,000,000

Storm Drain System $ 362,000,000

Sanitary Sewer System $ 312,000,000

Roads (inclusive) $ 465,000,000

Bridges $ 102,000,000

Street Lighting $ 13,000,000

Fleet and Equipment $ 16,000,000

All $1,742,000,000

Current Funding Levels and Deficits

Infrastructure Type2010 Actual

Funding(Millions $)

2010Recommended

Funding(Millions $)

2010FundingDeficit

(Millions $)

Civic Facilities 1.7 4.3 (1) 2.6

Water System 1.6 5.3 (2,3) 3.7

Storm Drain System 2.1 3.7(2,3) 1.6

Sanitary Sewer System 4.9 6.2(2,3) 1.3

Roads (paving only) 0.5 2.0 (4) 1.5

Total 10.8 21.5 10.7

(1) Amount required for systemic replacement and the mitigation of deferred maintenance.(2) Recommended funding level to have no deferred maintenance within 20 years(3) To be decreased to one percent of replacement value after 20 years(4) Recommended funding level to ensure maintenance of current system condition


Nanaimo Numbers - Population about 88,5001. Water $ 719 Million

33%2. Sewer $ 402

18%3. Transportation $ 386

18%4. Drainage $ 405

18%5. Buildings $ 245

11%6. Parks and Amenities $ 16

1%7. Fleet $ 19

1%8. IT $ 8

0%9. Total $ 2,200 100%

City underspending for full replacement over $10.00m /YR Simple math for 70 year average life says spent $30.0m /year.

Linear Infrastructure Gap - SummaryProposed Dev Services Infrastructure reinvestment budgets based on RIVA simulation of the next 100 years of linear infrastructure renewal & replacement

InfrastructureArea

NLIA2008

RIVA2009

Linear

5-YearAverageLinear

Linear Infrastructure

Gap

Gen - Roads 4.6 4.83* 2.924 1.906

Gen - OtherIncl. Storm 4.76 1.06 0.374 0.686

Water 3.49 3.79 0.856 2.934

Sanitary 1.56 2.17 0.317 1.853

Total 14.41 11.85 4.471 7.379All amounts are in Millions

* Does not include the cost of Road Reconstruction for Utilities @ $9.14M

Long Term Financial Plan• Long-Term Financial Planning is a

process that combines strategies, policies, forecasts and assumptions to model projections of future financial results.



Local Government Challenges

• Growing service demands (More with Less)

• Limited revenue sources• Unfunded Infrastructure

Replacement • Little control over cost structure

(contracts) • Downloading and regional pressures• Need to build trust and transparency • Incorporating Climate Change


What’s Current

• Climate Change• Culture Change

• Measures

• Framework

Where we are going• Focus on communicating the

message

• Culture Change

• Performance measures

• Climate change

• Implementation – continuous process



Canadian Network for Asset Managers

• Vancouver May 11-14• Focus – integration• Governments and utilities

• Registration now open• www.cnam.ca

asset management a story of integration wally wells p. eng

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