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Town of Oakville - Asset Management Plan

Town of Oakville Asset Management Plan

January 2019


1. Executive Summary

The Town of Oakville has been on the Asset Management journey since 2008 when the town made a choice to further leverage the PSAB 3150 initiative to embark on developing a comprehensive Asset Management plan. In 2013, the need for asset management plans was further enhanced by the announcement from the Ministry of Infrastructure stipulating that in order to qualify for future higher level government funding Municipalities must have an asset management plan. At this time the Province published a document “Building Together – Guide for Municipal Asset Management Plans” that set out the minimum requirements to be include in an Asset Management Plan. In order to meet this requirement, staff responded by submitting a report for Council on November 18, 2013 and including an Asset Management Plan section in the 2014 ten-year Capital Forecast which outlined how the town met the various elements and identified areas where additional refinement would be recommended over the coming years. Since that time, staff became aware of the Asset Management standard set out by ISO 55000 and set out specific goals to further enhance the town’s Asset Management plan. Going forward, the Asset Management Plan will be adjusted to meet the recent O. Reg. 588/17: Asset Management Planning for Municipal Infrastructure (formerly, Bill 6: Infrastructure for Jobs and Prosperity Act, 2015). Therefore, next steps were established to refresh the asset management strategy, policy and governance structure to include:

An Asset Management Roadmap from 2016 to 2021 An enterprise approach to Asset Management; Consistent with the organization’s strategic goals Fully integrated with the organization’s sustainability goals Follow ISO 55000 guidelines Develop a Levels of Service framework for all asset classes Establish clear linkage between asset-specific performance and both customer service

and sustainability goals

History of Asset Management Practices

1950 – Fix it when it

breaks 1970 – Asset Life

Cycle/Maintenance Planning

1980 – True Cost of Service; Timing of Asset Replacement, Australia

2000 – International Infrastructure Management Manual 2000, New Zealand

2009 – PSAB 3150 Tangible Capital Asset Accounting

2014 – ISO 55000 Asset Management System

2017/2018 ‐ O. Reg. 588/17 (formerly, Bill 6, Asset Management Planning Regulation)


As a result, the following has been accomplished to date and included as appendices as part of this document.

a. Appendix A: Asset Management Policy (A-BMG-004) approved by Council b. Appendix B: Strategic Asset Management Plan (SAMP) c. Appendices C and D: State of Local Infrastructure Report (SOIR) for all Asset Classes d. Appendix E: Summary asset reports including guide and glossary

In addition to the above accomplishments, an assessment of the town’s asset management practices, policies and plans has been conducted to determine the current level of maturity compared to ISO 55000 guidelines and then develop a work plan with short-term, medium term and long term goals. Based on the Comprehensive Asset Management Review and Assessment (CAMRA) completed, the town is currently at a Level 2 asset management maturity, with some aspects being a Level 3 as illustrated in Figure 1.1 below. Further details have been included in sections 3.4 and 5 of the SAMP.

Figure 1.1: Town of Oakville Asset Management Maturity

By implementing the initiatives in the asset management roadmap provided in the SAMP, the Town will move towards a maturity level of 3-4 over the next 5 years.


2. What is an Asset Management Plan (AMP)

The purpose of an AMP is to provide a comprehensive document that will guide corporate decision-making in regards to the construction (new and existing), operation, maintenance, rehabilitation, replacement, capacity expansion, and disposal of the Town’s assets while minimizing risk and costs to the Town and its taxpayers and maximizing service delivery. Good asset management means making decisions based on the lowest long-term cost over the entire lifecycle of the asset, rather than short-term savings, and managing assets in a way that balances service levels, risk and costs in a sustainable manner.

One of the most important objectives of an AMP is to demonstrate how the town’s overarching strategic goals and organizational plan align with the asset management policies, strategy and objectives or better known as “line of sight” in ISO 55000. Figure 2.1 below demonstrates what is meant by “line of sight” by illustrating the link between organizational goals, policy, AM strategy and AMP’s.

How the Town’s assets are managed, including the financial sustainability over their life and how they are operated plays a key role in achieving the town’s strategic goals and objectives. Many of these goals and objectives are reliant on the long-term sustainability of the Town’s infrastructure; therefore, one of the aims of a SAMP is to put in place a clear line of sight between those high-level objectives and the day-to-day activities carried out on the assets, as shown in Figure 2.1.

Asset Management is a coordinated activity of an organization to realize value from assets. Asset management involves the balancing of costs, opportunities and risks against the desired performance of assets, to achieve the organizational objectives. Source: ISO 55000


Figure 2.1: Asset Management – Line of Sight

In conjunction with an external consultant, staff have developed a Strategic Asset Management Plan (SAMP) which sets out the asset management strategy for the Town of Oakville and focuses on creating a line of sight between the town’s organizational objectives, asset management objectives, and day-to-day asset management activities. In addition, an Asset Management Policy (A-BMG-004) was prepared and approved by Council in September 2017 which clearly defines the key principles and expectations for asset management.


3. Introduction

In 2008, the Town of Oakville made a decision to leverage the PSAB 3150 initiative into developing comprehensive asset management processes and systems. Asset management assists in protecting and enhancing the quality of life in Oakville by leveraging the best possible asset information leading to better decisions about our assets—pipes, buildings, roads and parks—in a way that maintains the levels of service and manages risk in a cost-effective manner.

The town will manage our infrastructure assets in a strategic, comprehensive, enterprise‐wide manner through an integrated business approach that relies on well‐devised strategies, trained knowledgeable staff, and good communication with all stakeholders to achieve desired levels of service. This requires that all assets be treated as interrelated components in a unified system, rather than as isolated parts. The Town of Oakville’s asset management system incorporates the following asset management principles:

Forward-Looking and Sustainable: The town will incorporate social, legislative, environmental and financial considerations into decisions, taking into account present and future service commitments, giving due attention to the long-term stewardship of assets. Sound Asset Information: The town will collect, collate, control, and circulate the right asset information, at the right time, informing the right asset management decision-making.

Robust, Repeatable and Transparent Decision Making: The town will utilize a formal but scalable, consistent, and repeatable approach to manage infrastructure assets, enabling services to be provided in the most efficient and cost-effective manner.

Whole Life Cycle Cost Perspective: The town will consider the combined impact of all aspects of the asset life-cycle – acquiring, operating, maintaining, renewing, and retiring assets. No new assets will be constructed/acquired without considering future operating and maintenance costs. Asset performance will be monitored throughout the asset life cycle and will be used to inform recommendations on future asset acquisition.

Risk-Based Perspective: The town will direct resources, expenditures, and priorities to achieve the agreed service outcomes and benefits, at acceptable levels of risk.


People-Focused (Customers and Staff): The town will adopt a serviceability-based approach to managing our assets and will only accommodate additional demand for services without detriment to current levels of service. The town will recruit, train, and retain the right staff.

The Town of Oakville since 2008 has maintained a complete inventory of all the town’s assets in the town’s Corporate Information System (CIS). Our CIS inventory currently is integrated to the Town’s GIS system which will facilitate spatial analysis and provide an ability to confirm physical inventory for audit purposes. This will give the town an ability to coordinate capital spending among asset types. An example of this is Road Replacement with Storm System Replacement. As well this will provide an easier avenue to share our information with our regional level of government for better coordination. The current Asset Management Plan (AMP) has been developed following the Provincial requirements as outlined in Building Together – Guide for Municipal Asset Management Plans, as well as guidance provided in the International Infrastructure Management Manual. Going forward, the Asset Management Plan will be adjusted to meet O. Reg. 588/17: Asset Management Planning for Municipal Infrastructure (formerly, Bill 6: Infrastructure for Jobs and Prosperity Act, 2015) and ISO 55000 standards for Asset Management and will be a component of the ten year financial plan. Currently the plan includes the following sections listed below but will be expanded to include a maintenance strategy and more thorough whole life costing component:

State of Local Infrastructure Expected Levels of Service Asset Management Strategy Financing Strategy Plan Improvement and Monitoring Asset management is important because it helps protect the quality of life in Oakville by ensuring the best possible decisions regarding our assets. The plan supports evidence-based businesses cases for budgets and long-term financial forecasts. It is the foundation for longer term thinking and planning to support financial sustainability.


4. State of Local Infrastructure The Town of Oakville owns a sizable portfolio of assets which vary significantly in terms of their function, age, durability, and many other factors. The purpose of the State of Infrastructure Report (SOIR) is to provide a summary of the key physical attributes and current physical state of the asset portfolio. The SOIR only provides information about the physical asset and not whether it is meeting service provision. The report identifies asset types, accounting valuation and replacement cost valuation, asset age distribution and asset age as a proportion of expected useful life and asset condition. This information is supported by the town’s Corporate Information System (CIS) which forms the database for all town assets. This system holds asset records for individual assets and groups of assets and contains details such as asset type, class, description, location, useful life, historical cost, replacement cost, depreciation and condition. The SOIR also provides background on the Town’s Quality Rating System (QRS) for parks and park assets. Summary asset reports on various asset types have also been prepared highlighting key information on the asset such as average age and total current value. More detailed information on the assets can be found in the SOIR.


5. Expected Levels of Service The Town’s Asset Management Program focuses on three fundamental goals:

Providing sustainable, high quality service to customers Optimizing asset value while minimizing life cycle costs and ensuring that assets are financially sustainable over the life of the

assets Managing risks to the delivery of established service levels

An important objective to meeting these fundamental goals is to have well defined Customer Levels of Service (LOS). ISO 55000 best practices indicate that asset management objectives should be in the form of Level of Service (LOS) measures, which cascade vertically from Corporate measures to Technical measures. Figure 5.1 below shows how LOS measures can be aligned from the corporate performance vision, down to day‐to‐day asset management decision‐making (at the Technical LOS level), ultimately enabling customers to assess the suitability, affordability, and equity of services offered.

(draft Strategic Asset Management Plan)

Figure 5.1: Asset Management – Line of Sight


Currently the Town has well defined Corporate LOS which have been set out in Council’s Strategic Plan 2015-2018 and Vision 2057. The key principles and objectives in these plans have cascaded down and been embedded into all other various strategic plans which set out Customer LOS and targets within each of them. For example, the Fire Master Plan sets out the service delivery standards for fire response times and recommends new stations or relocations to make improvements to those times or to service new growth areas. A list of the various Master Plans and strategic documents can be found in section 3.1.1 of the SAMP.

In addition, through work on the town’s program based performance based budget (PB2), key performance indicators (KPI’s) were created for all town programs in order to measure actual program results against expected outcomes and monitor trends over time. These KPI’s serve for the most part as Technical LOS for the town’s programs and services and have been reported in the annual Operating Budget books since 2008. Many of these KPI’s are directly related to how infrastructure will be maintained and how service will be delivered, but others may be linked indirectly as well maintained infrastructure leads to effective delivery of service. Specific examples are:

KPI’s for each specific program area can be found within the 2019 Operating Budget and 2020-2021 Forecast document; each Program Business Plan provides key performance indicators specific to program practices and operations including past results and expected outcomes. Next steps in the asset management work plan are to clearly define Customer LOS and consolidate them into one document in order to establish clear linkages between the Corporate LOS. Work completed to date through the SAMP has established a qualitative overview of the Level of Service delivered for each network of assets, as assessed against a set of core Customer Values including: Accessibility; Quality; Availability; Reliability; Safety; and Shine (aesthetics).


6. Asset Management Strategy

The asset management strategy is the set of planned actions that will enable the assets to provide the desired service in a sustainable way, while managing risk and at the lowest lifecycle cost. The asset management strategy outlines plans for renewal/rehab activities, maintenance activities, replacements, disposals and expansion to service. The strategy should also address actions or policies that can lower costs or extend asset life.

6.1 Strategic Asset Management Plan and Policy

The Town’s asset management approach is to align their asset-related activities to the desired customer LOS and to meet their asset management vision to “create customer value through enhancing community asset management”. There are a number of corporate documents that guide and direct the planning and management of assets and these go some way towards translating organizational goals into asset management objectives. The Town’s Asset Management Policy and SAMP form the framework for establishing a clear line of sight between the corporate objectives and strategies and the overall Asset Management Program. The Town’s asset management-related strategic documents include:

Asset Management Policy Capital and Operating Budget Policies Asset Management General Policy (for Tangible Capital Assets) Asset-Specific Policies Procedures Strategic Plan 2015-2018 To put in place the necessary line of sight between organizational goals and asset management objectives, the Town has developed an Asset Management Policy that includes a set of asset management principles, which support delivery of the Town’s strategic goals and objectives. As stated in the Town’s Asset Management Policy, the Town intends to manage infrastructure assets in a strategic, comprehensive, enterprise‐wide manner through an integrated business approach that relies on well‐devised strategies, trained knowledgeable staff, and good communication with all stakeholders to achieve desired LOS. This requires that all assets be treated as interrelated components in a unified system, rather than as isolated parts.


Figure 6.1 shows a high-level, best practice model AMS from the Institute of Asset Management (IAM) that the Town will work on detailing and customizing for the next version of this SAMP, once more of the Town’s asset management processes have been developed.

Figure 6.1: General AMS Model


The town’s SAMP is the basis for delivery of the Asset Management Policy, efficient compliance with the business needs, and achievement of corporate goals. Some of the key corporate strategic planning documents include:

Strategic Plan 2015-2018 Vision 2057 Livable Oakville Official Plan Let's Be Livable Community Sustainability Plan Cultural Plan 2016-2021 Environmental Strategic Plan Parks, Recreation, and Library Facilities Master Plan Fire Master Plan Switching Gears Transportation Master Plan Active Transportation Master Plan Development Charges Background Study

Many of these documents not only set out the Corporate Strategic goals, but also set the service standards for the delivery of various programs and services and outline the asset requirements necessary to meet changing demand as a result of population and employment growth, changing demographics, legislation and changes in demand and/or popularity of services. More information can be found in sections 2 and 3 of the SAMP.

6.2 Asset Management Planning Practices and Procedures

The Town’s Long-term Capital Forecast and Financing Strategy has been built on the foundation of Council’s strategic goals resulting from many of the studies undertaken under Vision 2057 and the 2015-2018 Strategic Workplan. In addition, the town’s Annual Budget Policy (F-FPC-006) states “that the town is committed to accountable and fiscally responsible financial management. Decisions made with regards to the operating budget, capital budget, staff complement and reserve management are consistent with the goals set out by Council in its Strategic Plan and ensure that budget plans support economic growth, maintain ageing infrastructure, respond to changing needs and are fiscally responsible.” This policy includes key budget principles such as Affordability, Sustainability, Interdependancy, Multi-year budgeting and Performance Based.


Overall, the annual update of the Long-term capital plan identifies the capital needs necessary to ensure current service levels are maintained for the various programs offered across the town. The town’s capital forecast not only plans for renewal and replacement of existing infrastructure used to support town services, but also takes into consideration future needs. The Executive Summary portion of the Long-term Capital Forecast explains the strategies on how to evaluate or prioritize capital projects within the town have been developed which consider the benefit of the project to the community, health and safety or legislative requirements and alignment of the project with council’s strategic goals.

In general, the Long-term Capital Forecast is built on a framework based on “drivers” in which to review and assess capital project needs.

Infrastructure Renewal - The information stored in the Corporate Information System (CIS) is used to prepare the Infrastructure Renewal Capital Plan based on life cycle replacement and scheduled maintenance programs. Condition of assets is then evaluated at the beginning of each budget cycle to optimize the life of the assets while balancing risk of unanticipated failures. It is the town’s practice that as replacement of assets are executed, existing assets are disposed and any salvage value is transferred into the capital reserves. Capital projects included in this section address renewal/rehab activities, major repairs and replacements for all asset types.

Maintenance activities, including regularly scheduled inspections, preventative maintenance, and minor repairs are planned for in the town’s work order management system and are funded from the town’s operating budget. A repair and maintenance budget for each program has been included as part of the 2018 Operating Budget. This budget is also used to address unplanned repairs where emergency repairs are dealt with through the town’s emergency repair policy. Currently, many policies and/or practices exist to establish best practices, process for usage optimization and procedures in managing failures within each of the departments. For example, in order to extend the useful life of a conventional bus it is the town’s practice to complete a major refurbishment of each bus after 7-9 years which increases the life expectancy of the bus on average by 4 years. Over the next few years staff plans to consolidate all of these best practices and procedures into one document as part of the Asset Management strategy. Growth – every 5 years a Development Charges Background Study is undertaken which outlines in detail the infrastructure required in order to maintain service levels as the town’s population and employment grows. Detailed projects are included for the various asset classifications that would be required to meet program needs for Fire, Library, Recreation, Parks, Parking, Roads, Road Operations and Transit which have been identified through various Master Plan needs assessments. On an annual basis project needs are re-evaluated based on actual population and employment growth development.


One of the key budget principles included in the Annual Budget Policy it the need to address “Interdependency” in which the operating and capital budgets must be reviewed with a coordinated effort as capital expenditures and financing decisions will impact future operating budgets. As well as the need for “Multi-Year Budgets” – multi-year budgets will be developed for operating and capital expenditures according to an approved guideline. Multi-year budgets will incorporate the operating impacts of capital initiatives. As such it is the town’s practice to include all anticipated operational costs in the detailed sheet for each capital project in particular for growth. These operating impacts include additional personnel, materials and supplies, utilities, contracted services, transfers to reserve for future replacement of assets and any revenues associated with fees for service. As a result, the Long-term Forecast not only outlines 10 Year capital requirements but also a 10 year forecast of the operating cost required to support those assets.

Community Enhancement and Strategic Priorities - projects for planned expansion activities that support infrastructure requirements to meet various community needs as identified through Master Plan updates and to meet Council’s strategic goals. Enterprise Initiatives – projects to maintain and enhance the town’s three self-supporting programs; Harbours, Cemeteries and Parking. Master plans for each area are completed on a recurring basis to review operations and identify improvements. Capital and operating costs are funded from revenues generated by each area with residual surplus or deficit transferred to individual reserves set up for each. 6.3 Organizational Opportunities and Challenges

The town’s suite of strategic planning documents sets out the environmental and business context of the town. In developing the SAMP the town identified several opportunities and challenges that may arise along the asset management journey and with the various objectives set out. These have been discussed in section 3.2 and 3.3 of the SAMP.


7. Financing Strategy

This section contains the financial plan for putting the asset management plan into action. The financial information discussed in this section is based on the best available information to date. For current period, the 2019 Capital Budget and 2019 Base Operating Budget are used both of which are currently available on the town’s website. Plans for the ongoing improvement of information quality and the planning process will be an integral part of the Town’s Corporate Asset Management Program going forward. In order to ensure the effective implementation of the AMP, it is important that it is integrated with the Town’s financial planning and long-term budgeting process as well as departmental master plans. The development of a comprehensive financial plan that reflects the timely rehabilitation and maintenance of assets will allow the town to identify the financial resources required for sustainable asset management based on long term asset needs, agreed LOS, legislative requirements, and projected growth requirements.

Having a financial plan is critical for putting the AMP into action. In addition, by having a strong financial plan, the town can demonstrate that they have made a concerted effort to integrate asset management planning with financial planning and budgeting and to make full use of all available infrastructure financing tools.

This section of the AMP contains information related to the historical and forecast capital expenditure (CAPEX) and operating expenditure (OPEX) required to deliver the agreed LOS and ensure an appropriate level of asset stewardship.

7.1 Historical Capital and Operating Expenditures

Capital expenditures are defined as expenditures that are of sufficient monetary value to warrant capitalization and the resulting assets have a useful economic life of more than 1 year. The Town’s accounting guidelines state that a purchase will be considered a capital expenditure if it has physical substance and meets the following criteria: is held for use in the production or supply of goods and services, for rental to others, for administrative purposes or for the development, construction, maintenance, or repair of other capital assets has been acquired, constructed or developed to be used on a continuing basis has a useful economic life extending beyond 1 year is not intended for sale in the ordinary course of business it is of sufficient monetary value to warrant capitalization


The Town has chosen to present budget information rather than expenditure information in order to align with other financial reports. Budget information contains the full cost of the project even though the project expenditure may occur over more than one year. From an asset management perspective, it is important to understand what the drivers for investment have been over recent years and to understand how expenditure has changed year on year (if that is the case) as this will have an effect on how the asset base behaves in the future along with the associated future funding requirements. The capital forecast is built on a framework based on drivers in which to review and assess capital project needs. As some financing sources are specific for only certain types of projects, all financial tools available to the town need to be managed as a whole with the overall fiscal picture in mind. Therefore, the capital forecast is built on a framework based on the five classification drivers shown in Figure 7.1 below.

Figure 7.1: Capital Forecast Framework

The operating budget is prepared using the performance based program based budgeting (PB2) methodology. PB2 focuses on programs rather than departments and traditional line item budgeting. Emphasis is on the allocation of resources to programs based on desired outcomes and measurement of actual program results against expected outcomes. Performance measures are included in the budget document for all town programs.


7.1.1 Historical Capital Expenditure Based on the best available information to date, for current period, the proposed 2019 Capital Budget is used. As such, historical capital budget information is provided for 2017 and 2018. Capital projects add value to the town’s physical assets or significantly increase their useful life. The total value of town capital projects was $122.8 million in 2017 and $128.4 million in 2018. Figure 7.2 below provides a breakdown of the historical capital budgets by classification. For further information, please refer to the 2017 and 2018 Capital Budget documents.

Figure 7.2: 2017 and 2018 Capital Budget by Classification (in millions)

7.1.2 Historical Operating Expenditure

Based on the best available information to date, for current period, the proposed 2019 Operating Budget is used. As such, historical operating budget information is provided for 2017 and 2018. The total operating budget was $308.5 million in 2017 and $321.5 million in 2018. Figure 7.3 below provides a breakdown of the operating budgets by cost component. For further information, please refer to the 2017 Operating Budget and 2018 Operating Budget documents which are available on the town’s website.


2017 Operating Budget 2018 Operating Budget

Figure 7.3: 2017 and 2018 Operating Budget by Cost Component (in millions)

7.2 Budget Forecasts

Long range financial planning is an important exercise for ensuring funds are available in the future, as required, to meet anticipated needs. Annually, town staff prepare a one year adopted capital budget and nine year forecast and a one year adopted operating budget and two year forecast.


7.2.1 Capital Expenditure Forecast Typically, a current year budget and the following nine year capital forecast is prepared and presented to Council as part of the annual budget process. Council approves the current year capital budget and, in some instances, approves the budget for projects where construction will span multiple years. Council also approves, in principle, the following nine years.

The approved capital budget represents a significant investment in the development and rehabilitation of capital infrastructure and associated studies to support the provision of services to the current and future citizens of the Town. The budget considers the capital requirements of growth alongside maintaining existing infrastructure. In the preparation of the budget, consideration is given to actual costs incurred in the past for similar projects, current priorities, the impact on future operating budgets, feedback gathered through the public input process, availability of staff resources to undertake and properly manage the program, and the available sources of revenue to fund the program. The proposed 2019-2028 capital forecast and financial plan implement objectives set out in the various master plans and strategic goals while maintaining fiscal sustainability and ensuring fiscal policies are adhered to. The proposed 2019-2028 capital forecast totals $1,222.3 million over 10 years of which $116.3 million in gross expenditures is budgeted for 2019. Figure 7.4 below illustrates a breakdown of the proposed 2019-2028 total capital program by classification. For further information, please refer to the 2019-2028 Capital Forecast document.

Figure 7.4: 2019‐2028 (10 year total) Capital Program by Classification


Figure 7.5 below illustrates the proposed 2019-2028 total capital program for each classification by year.

Figure 7.5: 2019‐2028 Capital Program by Classification by Year

7.2.2 Operating Expenditure Forecast

The proposed 2019 base operating budget totals $337.3 million. The base operating budget also includes the operating costs for new infrastructure and programs completed as part of the capital budget as well as infrastructure assumed by the town as new developments are completed. Figure 7.6 below provides a breakdown of the proposed 2019 operating budget by cost component. For further information, please refer to the 2019 Operating Budget document.


Figure 7.6: 2018 Operating Budget by Cost Component

7.3 Sources of Funding

The capital investment program is funded from a wide range of sources. Broadly speaking there are five main sources:

Cash to capital – revenue received in the financial year that is allocated to the capital program Debt – external borrowing within strict limits Reserves – the Town maintains several reserve funds that are built up and drawn down to cover peak in expenditure Other levels of government – Provincial and Federal grants, subsidies and programs that may be ongoing or time limited Other third party funds – such as developer charges


The following table provides an outline of the sources of funding that may be available to the Town; not all are currently utilized.


7.3.1 Capital Funding Forecast

The following chart illustrates the proposed ten year capital plan financing by source (millions). The primary sources of funding for the $1,222.3 million proposed for the 2019-2028 capital plan is development charges at $446.1 million, 36%, followed by the Capital Levy at $361.6 million, 30%. Building Maintenance and Equipment reserves represent $167.3 million, 14%, and Capital reserves at $93.6 million, 8%. Other significant funding sources are the gas tax reserve funds. Figure 7.7 below illustrates a breakdown of the capital program by funding source. For further information, please refer to the 2019-2028 Capital Forecast document.


Figure 7.7: 2019‐2028 Total Capital Program by Funding Source

7.3.2 Operating Funding Forecast

Figure 7.8 below illustrates the funding sources for the proposed 2019 operating budget. Taxation revenues provide 59% of the funding. Fees and charges are the next largest source of funding at $76.0 million or 22%. Included in the fees and charges are increases to maintain cost recovery ratios for all programs. Other significant funding sources are Internal Recoveries and Interest and Penalties. For further information, please refer to the 2019 Operating Budget document.


Figure 7.8: 2018 Operating Budget Funding Sources

7.4 Capital Financing Policies and Assumptions

The 2019-2028 capital forecast and financing plan has been developed with the following financing policies and assumptions. These financial strategies form the basis of the town’s strong financial position and are monitored to ensure the town’s long-term financial position is sustained into the future:


Debt re-payment levels including the hospital commitment remain within the council approved policy limits; Outstanding debt to reserve levels do not exceed the 1:1 ratio required to maintain AAA credit rating; The 1% Capital levy increase is maintained over the 10 year period; Timing of Growth projects aligns with anticipated residential and non-residential development; Development Charge reserve funds return to a surplus position; Capital reserves are maintained at sufficient levels to minimize risk, support future initiatives and provide for unknown

contingencies; Equipment reserves are maintained at sufficient levels to support on-going life cycle replacements; Building replacement reserve contributions are maintained and as new facilities are built contributions are increased phased

over 5 years;

7.5 Funding Shortfall

The town’s proposed 2019 Operating and 2019-2028 Capital Forecast budgets have identified the financial needs required to support current level of services established and include plans to support existing infrastructure, expansion activities as well as various enhancements. Both budgets have been fully financed as noted above, therefore the town does not have a funding shortfall. As work continues over the few years to further refine Customer LOS and established associated cost to deliver Customer LOS the financing strategy will be revised to address changes in priority and/or alternative financing tools explored as required.


8. Plan Improvement and Monitoring

This Asset Management Plan is a living document that will continue to reflect the evolution of asset management practices within the Town. The Town has embedded continual improvement into its Mission Statement and its Strategic Plan. From the Town’s Mission Statement:

We create and preserve Canada’s most livable community that enhances the natural, cultural, social and economic environments. We achieve this by continuously improving programs and services that are both accessible and environmentally and fiscally sustainable.

From the Town’s Strategic Plan (2015-2018):

The Town’s strategic plan is a continual work in progress. Over time, new priorities, new opportunities, new demands and new challenges will emerge, and incorporating annual business plans into the Town’s strategic planning process ensures us the flexibility to respond quickly and effectively to these changing directions.

In order to continually evaluate, review, and enhance its asset management practices, the Town is adopting a number of continual improvement activities and will promote a culture of continual improvement through disciplined performance management, performance benchmarking, and collection of customer feedback. The asset management improvement roadmap and improvement initiatives described in the SAMP are aligned with the Town’s Strategic Plan and succeed in meeting the Town’s mission, through continual improvement of the asset management system. Throughout implementation of the asset management improvement roadmap, annual reviews of the performance of the program will be conducted. The review will consist of internal evaluation, together with the results of benchmarking, audit results, and assessments of current and best practices. Furthermore, the Town’s asset management plan will be adjusted to meet the requirements, including reporting requirements, of O. Reg. 588/17: Asset Management Planning for Municipal Infrastructure (formerly, Bill 6: Infrastructure for Jobs and Prosperity Act, 2015), within the prescribed timelines.

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