Municipal Infrastructure Investment Planning Project (MIIP)

Niagara Falls May 30, 2007

Dana Vanier

National Research Council

Outline

• Background• Municipal Infrastructure Investment Planning Project (MIIP)• Deliverables• Public Sector Accounting Board• MIIP Phase II• Conclusions

Problem Statement: Managing Canada’s Aging Infrastructure

• Aging Infrastructure (and growth in some municipalities)

• Limited Funding for Maintenance and Rehabilitation

• Downloading to junior levels of government– Municipalities run the Canadian Economy and own most of

the Assets• Small & medium municipalities need more help than larger• Lack of standards / guidelines for municipalities (performance

indicators)• Little leadership at senior levels of government

Problem Statement: Managing Canada’s Aging Infrastructure

Aging Infrastructure

Decreased Capacity

Health & safety concerns

Economic & social impacts

Increasing

Demand

Climate

Change

Inadequate

Funding

Ineffective

Management

Asset Management 101

Definition from MIIPAsset management is a business process and decision-

support framework that:

(1) covers the extended service life of an asset;

(2) draws from engineering as well as economics, and

(3) considers a diverse range of assets.

6 Whats (answer these and you are an asset manager)–What do you OWN?–What is it WORTH?–What is the DEPRECIATION? What is DEFERRED?–What is the CONDITION?–What is the SERVICE LIFE?–What do you FIX FIRST?

We have been doing it for thousands of years!

Now, do it:EQUITABLY, OBJECTIVELY AND REPEATEDLY

BACKGROUND: What do you OWN?

City of Edmonton

BACKGROUND: What do you OWN?

City of Hamilton

BACKGROUND: What is it WORTH?

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

1960 1965 1970 1975 1980 1985 1990 1995 2000

$tri

llio

n

BuildingsEngineering Works

Total Current $CDN

Residential

Total Constant $CDN

25 years old

Public Infrastructure 20% of business sectorStatistics Canada

BACKGROUND: What is the DEPRECIATION?

Bridges: TAC $10 Billion ??

Water mains: FCM $10 Billion ??

Universities: CAUBO $ 3.6 Billion (10%)

National Defence: $1.7 Billion (10%)

All Civil Assets: ?? McGill $125 B.

Roads: TAC $17.4 Billion ??

Wastewater: ????

BACKGROUND: What is the CONDITION? City of Edmonton

BACKGROUND: What is the CONDITION?

City of Hamilton

BACKGROUND: What is the SERVICE LIFE?

City of Edmonton

BACKGROUND: What do you FIX FIRST?

Based on “Confidence Vote” for each 6 Whats (from MIIP Survey)

Very Confident (4) Somewhat Confident (3)Confident (2)Not Confident (1)

1.00

1.50

2.00

2.50

3.00

3.50

4.00

Co

nfi

den

ce L

evel

-- - -- - -- - 20% Variance

HIGH

LOW

MIIP Overview and Deliverables

Municipal Infrastructure Investment Planning (MIIP)

• Four-year joint research project with 10 Canadian cities, regional municipalities, DND and NRC

• Approx. $1 million in cash contributions

• Published client reports are available publicly on Web

– Provided by the MIIP Steering Committee

irc.nrc-cnrc.gc.ca/ui/bu/miip_e.html

• Partners:

– Region of Durham, Region of Halton, City of Hamilton, Region of Niagara and others.

MIIP Overview and Deliverables

• Survey on Municipal Infrastructure Assets (B5123.2)

• Primer on Municipal Infrastructure Asset Management (B5123.3)

• Geographic Information Systems (GIS) and Interoperability of Software for Municipal Infrastructure Applications (B5123.4)

• Case Studies on Municipal Infrastructure Investment Planning (B5123.5)

• Evaluation of Condition Assessment Protocols for Sewer Management (B5123.6)

MIIP Overview and Deliverables

• A Framework for Municipal Infrastructure Management for Canadian Municipalities (B5123.7)

• Social Cost Considerations for Municipal Infrastructure Management (B5123.8)

• The State of Canadian Sewers – Analysis of Asset Inventory and Condition (B5123.11)

• Open Forum on Opportunities for Research in Asset Management in Canada, (B5123.12)

• Strategic and Sustainable Asset Management – Integrator (SSAM-I) Users Manual (B5123.13) – in Press

• Details of a Framework for Municipal Infrastructure Management for Canadian Municipalities (B5123.14) in Press

0%5%

10%15%20%25%30%35%

Pe

rce

nta

ge By Response

By Asset Value

Survey on Municipal Infrastructure Assets

(B5123.2)

0%

5%

10%

15%

20%

25%

30%

35%

40%

Per

cen

tag

e

By Response

By Asset Value

Survey on Municipal Infrastructure Assets

(B5123.2)

Primer on Municipal Infrastructure Asset

Management (B5123.3)

• Scope of Asset Management for Municipal Infrastructure

• Related International and National Activities in Asset Management

• Relationship between Asset Management and Information Technologies

• An Asset Management Implementation Strategy for Municipalities: The Six “Whats”

• Asset Management Implementation Plan

GIS and Interoperability of Software for Municipal

Infrastructure Applications (B5123.4)

• First part on Geo-spatial Technologies and Research• Second part on Interoperability of GIS in AM• Summary of Research

– Robust 3D capability is required that meets engineering requirements

– Time dimension is necessary to save versions of data during a project’s conceptual phases

– GIS does not address temporal variations

– Object orientation modeling is required to represent complex hierarchical structures and attribute inheritance typical of municipal assets

Case Studies on Municipal Infrastructure Investment

Planning (B5123.5)

• Developing a Strategic Asset Management Plan for the Region of Durham’s Pumping Stations: A Workable Approach

• Pilot Implementations of an Integrated Decision Support System for Infrastructure (City of Hamilton and DND)

• Utilization of Closed Circuit Television Inspection (CCTV) for Wastewater (Region of Halton)

• Halton Region Facility Condition Assessments and Audits for Capital

• Asset Accounting (City of Edmonton)

Evaluation of Condition Assessment Protocols for

Sewer Management (B5123.6)

• Condition Assessment for Sewers

• Existing Condition Assessment Protocols and Guideline

– WRc, NRC, Edmonton, Winnipeg, NAAPI, NASSCO

• Comparison and Discussion of Protocols

• Discussion

Evaluation of Condition Assessment Protocols for

Sewer Management (B5123.6)

A Framework for Municipal Infrastructure Management for

Canadian Municipalities (B5123.7)

Inventory

Performance

Service Life

Life Cycle Cost

Criticality

Alternatives

A Framework for Municipal Infrastructure Management for

Canadian Municipalities (B5123.7)

Per

form

ance

Inve

nto

ryS

yste

ms

Fac

ets

Processes

Select Protocols

Itemize Assets

Integrate Needs

Inspect Assets

Rate Assets

Forecast Needs

Recommend Resources

Optimize Investment

Review/Update Protocols

Select IT Framework

Select Facets

Select Data Quality

Select Asset Classes

Select Inventory Protocols

Select Asset Attributes

Select Inventory System

Select Benchmark Protocol

Identify Client Needs

Identify Administrative/ Political Needs

Identify Legislative

Requirements

Select Levels of Service

Select Performance

Protocols

Select Data Dictionary

Review Itemization Protocols

Select Itemization Protocols

Categorize New Assets

Supply Inventory Data

to Others

Collect Data

Review Data

Review Inspection Protocols

Select Inspection Protocols

Identify Inspection Protocols

Update Inventory Data

Collect Data

Update Inventory Data

Update Performance

DataUpdate

Inventory Data

Review Rating

Select Rating

Calculate Performance

Review Facets

Select Prioritization

ModelDevelop

Sustainability Model

Validate Inventory

Predict Performance

Accommodate Growth

Identify Growth

Propose Preliminary

Budget

Develop Decision Support System

Normalize Asset Classes

Identify Suitability Gap

Harmonize Asset Classes

Harmonize Performances

Propose Budget

Review Gap/ Funding Needs

Maximize Performance

Identify Functionality

GapIdentify

Condition Gap

Identify New Requirements

Categorize Data

Update Model Data

Fig

. 3 O

pti

miz

e In

vest

men

t

Update Metadata & Expedite M&R

Recommend Level of

Investment

Social Cost Considerations for Municipal Infrastructure

Management (B5123.8)

• Three Categories of User Costs

– Organizational (design, traffic control, parking, lost revenue)

– Societal (actual costs to citizens and companies)

– Environmental (????)

The State of Canadian Sewers – An Analysis of

Asset Inventory and Condition (B5123.11)

Table 14. Predicted average service life of Canadian sanitary sewers.

Material Predicted Service Life (years)

Predicted Service Life (years) Approx. Confidence Interval 10%

All materials 115 105 – 130

Asbestos cement (AC) 138 125 – 155

Concrete (CO) 114 105 – 130

PVC 75 70 – 85

Vitrified clay (VC) 136 120 – 150

The State of Canadian Sewers – An Analysis of

Asset Inventory and Condition (B5123.11)

0 10 20 30 40 50 60 70 80 90

1

3

5

0.00

0.20

0.40

0.60

0.80

1.00

Pro

bab

ilit

y d

istr

ibu

tio

n

Age (years) SPG

International Agencies (World Bank, OECD, CIDA)

Ontario’s PIM Ontario’s Bill

175

Research

Policy

Practice

NRC - MIIP CATT

INFC KOA

TRM and AM Committees

INFC State of Infrastructure

INFC Strategic Infrastructure Fund

InfraGUIDE

Benchmarking (OMBI)

Canada West Foundation

CICA TAC Primer

MIMS Alberta

CERIU

Horizontal Research Roundtable on Infrastructure

Public Policy in Municipalities (PPM)

NRC - IRC Universities (Civil)

Universities (Urban Planning) ISIS

CWN NRC - CSIR

Municipalities

CSCE CIP

CEAB

NRTSI

Other NCE’s

Federal Departments (PWGSC, DND, TC. Heritage, Parks, etc.)

CMHC

EPIC/CSCE

OGRA/MIDS

International AM Activities (IPWEA, IIMM, EPA)

INFC MRIF COMRIF

PPPForum

ICMD

StatCan

AwwaRF

McGill

MPMP

APWA CAUBO

Edmonton

PPM

Open Forum on Opportunities for Research

in Asset Management in Canada, (B5123.12)

http://irc.nrc-cnrc.gc.ca/pubs/fulltext/b5123.12

Additional Deliverables:AM Software Review

• Software Review– Municipal infrastructure asset management systems: state-of-the-art

review (irc.nrc-cnrc.gc.ca/fulltext/nrcc48339)– www.itcon.org/cgi-bin/works/Show?2006_16 (Journal Paper)

• Mahmoud Halfawy, Linda Newton, Dana Vanier

– Reviews the following:• Synergen • CityWorks• Hansen • RIVA• Infrastructure2000 • Harfan• Municipal Infrastructure Management Systems (MIMS)

– Conclusions• Evaluated well-known applications in Canada• Focused on collaborators’ interests• Stresses need for industry standards for interoperability

Deliverable: Software Review - MIMS

www.albertamims.org

Framework for Decision Support System (DSS)

Life Cycle Costing

Service Life Prediction

(b) Asset Life Cycle

Condition Assessment

Risk Assessment

Alternative Evaluation

Decision Analysis Paradigm

Cost Analysis

(c) Benefit-Cost Analysis

Benefit-

(a) Asset Inventory

Asset Inventory Roads Bridges Buried Utilities Buildings, etc.

Geographic Information System (GIS)

Funded Projects

Deferred Maintenance

Budgeting Decisions

YES

NO

(e) Project Selection

Making

Civil Infrastructure

Needs

Administrative Requirements

Political Agendae

(d) Decision-

Discussion

• Ranking to date (only 7 projects, top 4, 5 criteria, scale of 1 to 5)

Nor

mal

. Age

Ran

k

1234

647

Con

ditio

n R

ank

6614

224

Ris

k R

ank

7132355

LC

C R

ank

7653

321

Nor

mal

. Cos

t Ran

k

7653

321

5 C

riter

ia R

ank

7632

315

3 C

riter

ia R

ank

7622

125

Cas

e 1

Ran

k

7213

546

Cas

e 2

Ran

k

7651

342

Cas

e 3

Ran

k

7512

246

Cas

e 4

Ran

k

7615

324

MO

O u

nwei

ght.

Ran

k

5673

321

MO

O W

eigh

ted

Ran

k

7654

321

FS

E R

ank

7651

342

Pro

ject

ABCD

EFG • NOT one project is selected consistently as a top four ranking

• Age ranking is worst and probably the most used!

Paper copy

Decision models to prioritize maintenance and renewal alternativesVanier, D.J.; Tesfamariam, S.; Sadiq, R.; and Lounis, Z. Joint International Conference on Computing and Decision Making in Civil and Building Engineering (Montréal, QC. June 14, 2006), pp. 2594-2603, June 14, 2006http://irc.nrc-cnrc.gc.ca/pubs/fulltext/nrcc45571/

SSAM-I

• Investigate GREEN and RED interventions

$1000 (10%)

$1000 (10%)

$1000 (10%)PV of $4000= $2709

$1000 (10%)

Ave. Cond. = 1.51

2

3

4

52005 2010 2015 2020 2025 2030 2035 2040

Con

diti

on

2050

$10,000 PV = $3066

Ave. Cond. = 3.0

1

2

3

4

52005 2010 2015 2020 2025 2030 2035 2040

Con

diti

on

2050

Look at average for next 10 years

Results – Geometric Deterioration

1

1.5

2

2.5

3

3.5

4

4.5

5

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033

1

2

3

4

Results – Geometric Deterioration

1

1.5

2

2.5

3

3.5

4

4.5

5

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033

Planning Horizon

We

igh

ted

Po

rtfo

lio

Co

nd

itio

n

0

5000

10000

15000

20000

25000

30000

35000

40000

Weighted Start Condition

Annual Budget

Required Budget

Bud

get

Looks OKAY

Downhill

Emergencies

BACKGROUND: PSAB – What and who are they?

• Public Sector Accounting Board

• Canadian Institute of Chartered Accountants (CICA)

– PSAB comprises 12 volunteer members from senior levels of government, including federal and provincial auditors general, controllers, and deputy ministers, municipal finance officials, academics and other experts in government reporting.

– Senior “Accountants” at all 3 levels of government• Auditor General, Treasury Board

• Provinces of SK, BC, NL, ON

• Ottawa, Quebec City, Montreal

• Others

– University of Saskatchewan

– Deloitte & Touche, Dominion Bond Rating Service

Tangible Capital Assets (TCA)

• PSAB 3150 legislates that municipalities must report tangible capital assets on their annual financial statement and must record: – Historical cost of these assets, transfers, betterments,

impairment• Can be estimate

– Net write-down of these assets, and• Amortization method (Straight-line to “0” in 40 years is typical)

– Useful life of these assets• shortest of physical, economical, technical, commercial or legal

• This must be implemented in the fiscal years starting in January 2009.

Asset Management = PSAB 3150

• What does AM have to do with PSAB 3150?– Advocates “Proper Stewardship” Tangible Capital Assets

– Surveys (Ontario and BC – Google “zoomerang psab”):• 50% - great initiative• 50% - waste of money

– Comments (from the survey respondents)• Finally!• Money to accountants and consultants• Cannot afford• Augh!

Asset Management = PSAB 3150

• However, PSAB 3150 is a means to an end:– What do you OWN?

– What is it WORTH?

– What is the DEPRECIATION?

• “Asset Assessment” in FUTURE

• Physical condition and life expectancy of TCA

• Publish a Statement of Recommended Practices (SORP)

– Later on … Condition and Service Life (Not bad!)

• Great Opportunities to get “house in order”

• Get Finance to pay !

Engineering Approach to TCA

• Proposal – An Engineering Approach to the Valuation and Assessment

of Tangible Capital Assets

– MIIP PHASE II

MIIP Phase II

1. PSAB Engineering Approach

2. Data Structures for urban infrastructure (fields, records)

3. Sustainable Strategic Asset Management-Integrator

• SSAM-I software prototype

Still in discussion phase

Smaller cities/towns

2-3 year project to start in March ’07

Summary and Conclusions

• Need more research in Asset Management

• Better Collaboration with Municipalities

• A proper implementation of PSAB 3150 will assist the implementation of asset management in Canadian municipalities.

• PSAB needs to hear from the engineering and technical staff in municipalities.

Municipal Infrastructure Investment Planning Project (MIIP)

http://irc.nrc-cnrc.gc.ca/ui/bu/miip_e.html

MIIP Partners

Questions ?

Dana J. Vanier, Ph.D.Senior Research Officer

Institute for Research in Construction

National Research Council Canada

1200 Montreal Road

Ottawa, Ontario CANADA K1A 0R6

dana.vanier@nrc.ca

Tel: (613) 993-9699

FAX 954-5984

MIIP Website

http://irc.nrc-cnrc.gc.ca/ui/bu/miip_e.html