Asset Management Plan

Transcription

1 City of Powell River Asset Management Plan Marine Scenario 1 and 2 Version 1.1 June 2013

2 Document Control Doc ID Rev No Date Revision Details Marine S1_V1 Marine S2_V1 Marine S1_V1 Marine S2_V1 1 6 th June 2013 First Draft th June 2013 Second Draft

3 TABLE OF CONTENTS 1. EXECUTIVE SUMMARY... 1 What is this plan about?... 1 What is an Asset Management Plan?... 1 Context... 1 What does it cost?... 1 Why is there a funding shortfall?... 2 What options do we have?... 3 What happens if we don t manage the shortfall?... 3 What can we do?... 3 What we will do... 3 What we cannot do... 4 Managing the risks... 4 Confidence levels... 4 The next steps INTRODUCTION Background Goals and Objectives of Asset Management Plan Framework Core and Advanced Asset Management Community Consultation LEVELS OF SERVICE Customer Research and Expectations Strategic and Corporate Goals Legislative Requirements Current Levels of Service Desired Levels of Service FUTURE DEMAND Demand Drivers Demand Forecast Demand Impact on Assets Demand Management Plan Asset Programs to meet Demand LIFE CYCLE MANAGEMENT PLAN Background Data Infrastructure Risk Management Plan Routine Operations and Maintenance Plan Renewal/Replacement Plan Creation/Acquisition/Upgrade Plan Disposal Plan Service Consequences and Risks FINANCIAL SUMMARY Financial Statements and Projections Funding Strategy Valuation Forecasts Key Assumptions made in Financial Forecasts Forecast Reliability and Confidence PLAN IMPROVEMENT AND MONITORING Status of Asset Management Practices Improvement Program Monitoring and Review Procedures Performance Measures REFERENCES APPENDICES Appendix A Maintenance Response Levels of Service Appendix B Projected 10 Year Capital Renewal and Replacement Works Program Appendix C Projected Upgrade/New 10 Year Capital Works Program Appendix D Budgeted Expenditure Accommodated in LTFP Appendix E Abbreviations Appendix F Glossary... 45

4 1 1. EXECUTIVE SUMMARY What is this plan about? This asset management plan covers the infrastructure assets that serve the City of Powell River s marine infrastructure needs. These assets include boat launch/ramps, breakwater and seawalk structures, and float systems throughout the community. They provide marine service to the public, commercial fisherman, transient marine traffic and recreational users. The boat ramps allow vessels to be launched at the North Harbour, Mowat Bay, Powell Place and Gibsons Beach. The marinas provide moorage for pleasure craft in the North Harbour and commercial and transient vessels in the South Harbour. The breakwaters provide protection for moored vessels and habitat areas. The seawalk structures prevent soil erosion and provide recreational enjoyment for the public. What is an Asset Management Plan? Asset management planning is a comprehensive process to ensure that the delivery of services from infrastructure is provided in a financially sustainable manner. An asset management plan (AMP) details information about infrastructure assets including actions required to provide an agreed level of service in the most cost effective manner. The plan defines the services to be provided, how the services are provided and what funds are required to provide the services. Context Managing our vital assets and infrastructure now and into the future will ensure the economic, social and environmental well being of our City. Though these assets age and deteriorate, by using sound asset management practices, Council and the community can be assured that the assets are used to deliver the desired services into the long term, and are managed for present and future users. Asset management plans aid in long term planning. Long term planning, including planning for future financial commitments, will allow the City of Powell River to achieve economical and reliable marine infrastructure. Marine Infrastructure The Marine Infrastructure network comprises: Mooring floats complete with water and electrical system and piling network Boat launches and floats Breakwater and seawalk networks Wharves These infrastructure assets have a replacement value of $28,964,617. The average useful life of all assets is estimated at 97.7 years. What does it cost? The projected outlays necessary to provide the services covered by this asset management plan include operations, maintenance, replacement of existing assets and construction of new assets over a 20 year planning period is $12,908,200 or $645,410 on average per year.

5 2 Estimated available funding for this period is $13,061,000 or $653,050 on average per year, which is 101% of the cost to provide the service. This is a funding excess of $7,640 ($645,410 less $653,050) on average per year. Over the next 20 year period, this cumulative excess amounts to $152,800. The funding situation for the next 20 years is in excess, although the majority of the assets are due for renewal or replacement after the 20 year mark. Therefore, the life cycle cost of marine assets is a better indicator of the City s financial position. Life cycle projected outlays to provide operations, maintenance, replacement of existing assets and construction of new assets over the 97.7 year life cycle is $79,903,802 or $817,849 on average per year. Estimated available funding for this period is $63,802,985 or $653,050 on average per year, which is 79.8% of the cost to provide the service. This is a funding shortfall of $164,799 ($817,849 less $653,050) on average per year. Over the life cycle, this cumulative shortfall amounts to $16,100,817. Section 5.7 discusses marine asset life cycle costs in detail. Projected expenditure requirements to provide services in the AMP compared with current budgeted expenditure and life cycle budget requirements are shown in the following graph. CRC ($'000) $1,500 $1,400 $1,300 $1,200 $1,100 $1,000 $900 $800 $700 $600 $500 $400 $300 $200 $100 $0 Powell River - Projected Operating and Capital Expenditure (Marine_S1_S2_V1) Operations Maintenance Funded Capital Renewal Unfunded Renewal Funded Capital Upgrade Current Budget Life Cycle Budget Required Year Why is there a funding shortfall? As is commonplace across Canada, the City s marine system was constructed from municipal taxes, government grants and by user groups, often provided and accepted without consideration of ongoing operations, maintenance and replacement needs. The current level of funds budgeted is sufficient for the next 20 years because the majority of marine assets are due for renewal after the 20 year mark. But, the current level of funds budgeted will not meet the amounts required to replace our assets over their life cycle.

6 3 What options do we have? Resolving the funding shortfall involves several steps: 1. Improving asset knowledge so that data accurately records the asset inventory, how assets are performing and when assets are not able to provide the required service levels. 2. Improving our efficiency in operating, maintaining, renewing and replacing existing assets to optimize life cycle costs. 3. Identifying and managing risks associated with providing services from infrastructure. 4. Making trade offs between service levels and costs to ensure that the community receives the best return from infrastructure. 5. Identifying assets surplus to needs for disposal to make savings in future operations and maintenance costs. 6. Consulting with the community to ensure that marine infrastructure and costs meet community needs and are affordable. 7. Developing partnership with other bodies, where available to provide services. 8. Seeking additional funding from governments and other bodies to better reflect a funding approach to infrastructure services that includes every level of government. What happens if we don t manage the shortfall? It is likely that we will have to reduce service levels in some areas unless new sources of funding are found. For marine infrastructure, the service level reduction may include boat launching ramps that are not suitable for use, or wharves that that are in substandard condition. These services could be closed down due to insufficient financial resources required to provide proper access and use. As well, there may be service level reductions in other municipal areas in order to fund the necessary marine infrastructure. What can we do? North Harbour Floats in Disrepair We can develop options, costs and priorities for future marine infrastructure. We can consult with the community to plan future services to match the community service needs with the ability to pay for services and maximize community benefits against costs. What we will do We plan to provide marine infrastructure services for the following: Operations, maintenance, renewal or replacement of wood/concrete floats, boat launch/ramps, wharves, and breakwater structures to meet service levels within the set annual budgets.

7 4 What we cannot do We do not have enough funding over the life cycle to provide all services at the desired service levels or provide new services. Works and services that cannot be provided under present funding levels would include renewal of boat launching/ramps and some wharves to maintain the current level of service over the life cycle. Therefore, reactive repairs or renewals will occur, demanding unplanned use of reserves. Funding at the current level over the life cycle will result in a growing backlog of assets requiring renewal or replacement. This could result in extreme pressure in the future to manage the replacement of assets that may be failing because their useful lives have expired. Managing the risks There are risks associated with providing the service and not being able to complete all identified activities and projects. We have identified major risks as: Unsafe marine infrastructure for public use Boat launch/ramp in disrepair Breakwater failure King tides and major storm effects on aging structures We will endeavour to manage these risks within available funding by: Identifying assets in poor condition Reactive repairs or renewals Regular inspection and testing of marine infrastructure Maintenance program application Review new standards for climate change Confidence levels This AMP is based on a medium level of confidence in our asset inventory data attributes. Further condition assessments will improve the confidence level. The next steps The actions resulting from this asset management plan are: Long term financial planning for asset renewals and upgrades Identification of critical assets Condition assessment for all assets Developing an Infrastructure Risk Management Plan Undertaking community consultation Routine operations and maintenance Renewal/replacement of assets Creation/acquisition/upgrade of assets Performance measurement

8 5 2. INTRODUCTION 2.1 Background This asset management plan covers all aspects of the municipal marine infrastructure and is one of a family of nine asset management plans comprising the complete municipal asset base. This plan is intended to facilitate the strategic management of assets (and services provided), compliance with regulatory requirements, and to communicate the funds required to provide the selected levels of service over the life cycle. The asset management plan follows the format for asset management plans as recommended in Section of the International Infrastructure Management Manual 1. Municipal AMPs should be read in concert with the City s Asset Management Policy and Asset Management Strategy (once established). Municipal AMPs will influence, and be influenced by, the following associated municipal documents: Sustainability Charter; Corporate Strategic Plan; Official Community Plan (OCP); 5 Year Financial Plan; and Departmental operating plans The infrastructure assets covered by this asset management plan are shown in Table 2.1. These assets are used for the protection of marine infrastructure and the commercial and recreational use of marine facilities. Table 2.1: Assets covered by this Plan Asset Category Replacement Value Float systems $10,281,268 Boat launch structures 634,993 Breakwaters and seawalks 16,272,521 Wharves 1,775,835 TOTAL $28,964,617 Key stakeholders in the preparation and implementation of this asset management plan are shown in Table Key Stakeholder Table 2.1.1: Key Stakeholders in the AM Plan 2 Role in Asset Management Plan Council To act as custodians for the community s assets. To set levels of service, risk and cost standards. To approve the Asset Management Plan and align the Strategic Plan and the Corporate Plan. To approve the asset management program. To ensure appropriate resources and funding are made available to support the asset management program. 1 IPWEA, 2011, Sec 4.2.6, Example of an Asset Management Plan Structure, pp City of Powell River Asset Management Policy 2012

9 6 Key Stakeholder Chief Administrative Officer and Management Group Managers and staff Role in Asset Management Plan To provide strategic advice and leadership in the management of infrastructure assets. Ensure outcomes support the Corporate Strategic Plan. To validate and challenge proposals to ensure they meet the Corporate Strategic Plan objectives and community service needs. To ensure the community and key stakeholder inputs are integrated into asset management plans. Establish current levels of service for assets, compare to benchmarks and community needs and identify gaps or challenges. To draft asset management plans To implement the asset management program with agreed resources. To develop, implement and review the asset management program using the International Infrastructure Management Manual as a guide, documenting required allocation of funding and improvement plans for individual asset groups, using the principles of life cycle costing. To develop and implement maintenance, and capital works programs in accordance with the Asset Management Plan and Strategy, the Corporate Strategic Plan and the 5 Year Financial Plan. Deliver Council approved levels of service to agreed risk and cost standards. To manage infrastructure assets in consideration of their long term sustainability. To develop and implement maintenance and capital works programs in accordance with asset management plans, and report to the Management Group and to Council. Our organization s organizational structure 3 for service delivery of infrastructure assets is detailed below: 2.2 Goals and Objectives of Asset Management The City exists to provide services to its community, of which some are provided by infrastructure assets. We have acquired infrastructure assetss through purchasing, contract, construction and by contributionn of assets constructed by others to meet increased levels of service. 3 City of Powell River, Corporate Strategic Plan (Draft)

10 7 Our goal in managing infrastructure assets is to meet the defined level of service (as amended from time to time) in the most cost effective manner for present and future consumers. The key elements of infrastructure asset management are: Providing a defined level of service and monitoring performance. Managing the impact of growth through demand management and infrastructure investment. Taking a life cycle approach to developing cost effective management strategies for the long term that meet the defined level of service. Identifying, assessing and appropriately controlling risks. Having a long term financial plan, which identifies required, affordable expenditure and how it will be financed Plan Framework Key elements of the plan are: Levels of service specifies the services and levels of service to be provided by Council. Future demand how this will impact on future service delivery and how this is to be met. Life cycle management how we will manage our existing and future assets to provide defined levels of service. Financial summary what funds are required to provide the defined services. Asset management practices. Monitoring how the plan will be monitored to ensure it is meeting the organization s objectives. Asset management improvement plan. 4 Based on IPWEA, 2011, IIMM, Sec 1.2 p 1 7.

11 8 A road map for preparing an asset management plan is shown below: Road Map for preparing an Asset Management Plan Source: IPWEA, 2006, IIMM, Fig 1.5.1, p 1.11.

12 9 2.4 Core and Advanced Asset Management This asset management plan is prepared as a core asset management plan over the life cycle in accordance with the International Infrastructure Management Manual 5. It is prepared to meet minimum legislative and organizational requirements for sustainable service delivery and long term financial planning and reporting. Core asset management is a top down approach where analysis is applied at the system or network level. Future revisions of this asset management plan will move towards advanced asset management using a bottom up approach for gathering asset information for individual assets to support the optimization of activities and programs to meet agreed service levels. 2.5 Community Consultation This core asset management plan is prepared to facilitate community consultation. Future revisions of the asset management plan will incorporate community consultation on service levels and costs of providing the service. This will assist Council and the community in matching the level of service needed by the community, service risks and consequences with the community s ability and willingness to pay for the service. 3. LEVELS OF SERVICE 3.1 Customer Research and Expectations The organization has not carried out any research on customer expectations. This will be investigated for future updates of the asset management plan. 3.2 Strategic and Corporate Goals This asset management plan is prepared under the direction of the organization s vision, mission, goals and objectives. Our vision 6 is a sustainable Powell River that provides for: Economic Diversity a resilient economy. Social Well Being a vibrant, safe and healthy community. Healthy Environment a diverse and healthy natural environment. The City of Powell River s mission 6 is to ensure the provision of quality services, in a manner that promotes prosperity and economic, environmental and social health and well being for current and future generations, while living within our means. 5 IPWEA, 2011, IIMM. 6 City of Powell River, Corporate Strategic Plan (Draft)

13 10 Relevant organization goals and objectives and how these are addressed in this asset management plan are: Table 3.2: Organization Strategic Priorities Strategic Priorities Objective How Strategic Priorities and Objectives are addressed in AM Plan Live Within our Means Governance Sustainability Asset Management The City will strive towards longterm financial sustainability and best practices in internal processes. The City will strive to develop comprehensive governance regimes supporting community cohesion, self sufficiency and an informed and engaged citizenry. The City will be a leader in increasing our environmental, social/cultural and economic sustainability. The City will follow best practices in asset management and seek to maximize capital utilization and stewardship. The Marine Asset Management Plan is a best practice management tool for the financial stewardship of municipal assets and enables long term financial planning for all municipal marine asset infrastructure. The Marine Asset Management Plan will assist the organization engage the community in discussion on marine asset infrastructure. The Marine Asset Management Plan is a best practice tool for the implementation of sustainable asset infrastructure management. The Marine Asset Management Plan is a best practice tool in the management of asset infrastructure and seeks to maximize capital utilization and stewardship. The City will exercise its duty of care to ensure public safety in accordance with the Infrastructure Risk Management Plan prepared in conjunction with this AM Plan. Management of infrastructure risks is covered in Section Legislative Requirements We have to meet many legislative requirements including Canadian Federal and Provincial legislation and Provincial regulations. These include: Table 3.3: Legislative Requirements Legislation Local Government Act 1996 Community Charter 2003 PSAB 3150 Accounting Standards Provincial Environmental Management Act Requirement Provides a legal framework and foundation for the establishment and continuation of local governments. Sets out the legal framework for the powers, duties and functions of municipal organizations. Provides municipal organizations with the authority to address existing and future community needs. Tangible Capital Asset accounting standards for the public sector, including municipalities. Provides regulations regarding waste discharge to land and water.

14 Current Levels of Service We have defined service levels in two terms. Community Levels of Service Measures how the community receives the service and whether the organization is providing community value. Community levels of service measures used in the asset management plan are: Quality Function Capacity/Utilization How good is the service? Does it meet users needs? Is the service over or under used? Technical Levels of Service Supporting the community service levels are operational or technical measures of performance. These technical measures relate to the allocation of resources to service activities that the organization undertakes to best achieve the desired community outcomes and demonstrate effective organizational performance. Technical service measures are linked to annual budgets covering: Operations the regular activities to provide services such as harbour staff operations, Maintenance the activities necessary to retain assets as near as practicable to an appropriate service condition (e.g. inspections, condition assessments, float repair, pile assessment etc). Renewal the activities that return the service capability of an asset up to that which it had originally (e.g. replacing boat launch structures). Upgrade the activities to provide a higher level of service (e.g. construction of additional seawalk infrastructure/habitat features) or a new service that did not exist previously (e.g. additional floats or ramps to accommodate clubs and organizations and the public). Asset managers plan, implement and control technical service levels to influence the customer service levels 7. Our current service levels are detailed in Table 3.4. Future iterations of this document will provide the subsequent yearly measurements of levels of service, as a means of measuring performance. Table 3.4: Current and Optimal Service Levels Key Performance Measure Level of Service Objective Performance Measure Process Performance Measured Optimal Level of Service COMMUNITY LEVELS OF SERVICE Quality Floats are level, ramps are smooth for launching Number of service requests from users requests from users 0 requests Function Access is available at all times Number of requests for user access requests 0 requests for access Users vessels are protected Number of complaints of vessel damage 2012 complaints 0 complaints 7 IPWEA, 2011, IIMM, p 2.22

15 12 Key Performance Measure Level of Service Objective Performance Measure Process Performance Measured Optimal Level of Service Capacity/ Utilization Capacity is matched to user s need Number of service requests for over or under capacity requests Match user demands TECHNICAL LEVELS OF SERVICE Operations Servicing and management Annual condition and defects inspection 2012 daily inspections Daily inspections are adequate to reduce defects Maintenance Renewal Upgrade/New Repair of failing infrastructure Infrastructure meets users needs Users have means of accessing or launching their vessels Budget $420,000 $420,000 Reactive service requests and scheduled maintenance is completed within reasonable time frames reactive service requests 0 service requests Budget $171,000* $79,000** Useful life of infrastructure assets should be increasing 2012 avg 97.7 years System components are economically replaced within operating life cycles Budget $64,000* $296,465*** Number of users without access 2012 All users have access All users have access Budget $228,000 $0**** *2013 budget is out of the ordinary ** 20 year average ***average over life cycle ****future upgrade/new assets have not been identified at this time 3.5 Desired Levels of Service Indications of desired levels of service are obtained from community consultation/engagement. The asset management planning process includes the development of two scenarios to develop levels of service that are financially sustainable. 4. FUTURE DEMAND 4.1 Demand Drivers Drivers affecting demand include population change, changes in demographics, geographic location, climate changes, and social pressures. 4.2 Demand Forecast The present position and projections for demand drivers that may impact future service delivery and utilization of assets are identified and documented in Table 4.3.

16 Demand Impact on Assets The impact of demand drivers that may affect future service delivery and utilization of assets are shown in Table 4.3. Table 4.3: Demand Drivers, Projections and Impact on Services Demand drivers Present position Projection Impact on services Population 13, to 2011 population increase 1.6% 8 Demographic Geographical Climate Change Social Pressure Median age of the population 2006 to 2011 median age increased from 47 to City marines are at the gateway to Desolation Sound Mild winters and acceptable summer conditions for boating Boating demographic owns larger size vessels 4.4 Demand Management Plan Increased transient traffic Slight increase in rainfall with increase in summer temperatures Requirement to service larger vessels Small increase in demand Larger mooring slips may be required for larger vessels Increased transient visits to Desolation Sound which will increase the City s Marina use Increased use due to acceptable boating conditions Increased size of mooring slips required along with increased power Demand for new services will be managed through a combination of managing existing assets, upgrading of existing assets and providing new assets to meet demand and demand management. Demand management practices include non asset solutions, insuring against risks and managing failures. Non asset solutions focus on providing the required service without the need for the organization to own the assets and management actions including reducing demand for the service, reducing the level of service (allowing some assets to deteriorate beyond current service levels) or educating customers to accept appropriate asset failures 9. Examples of non asset solutions include the sailing club providing a dock system for the club s sailboats, connected to the City system, but having full responsibility for its operation and maintenance. Opportunities identified to date for demand management are shown in Table 4.4. Further opportunities will be developed in future revisions of this asset management plan. Table 4.4: Demand Management Plan Summary Demand Driver Impact on Services Demand Management Plan Population Very Little impact Accommodate the users with available moorage and launching facilities. Demographic Older users may have more disposable income for larger size vessels Make available the larger slips and increased power Geographical Increased traffic could reduce available slips during peak times Have staff available to strategically moor vessels to accommodate increased volumes 8 Statistics Canada Focus on Geography Series, 2011 Census 9 IPWEA, 2011, IIMM, Table 3.4.1, p 3 58.

17 14 Demand Driver Impact on Services Demand Management Plan Climate Change The climate change could increase the volume of users of the facilities Have staff available to strategically moor vessels to accommodate increased volumes Social Pressure Larger vessels require bigger slips and increased power All renewals of infrastructure will be designed to accommodate larger vessels (30 60 ft range) and supply electrical services of at least 30 amperage 4.5 Asset Programs to meet Demand New assets required to meet growth will be acquired from new construction/acquisitions by the City. New assets are discussed in Section 5.5. At this time, marina assets are not contributed from developers. There is not a cost to the City in acquiring new assets from developers, but the acquisition of new assets will commit the organization to fund ongoing operations, maintenance and renewal costs for the period that the service provided by the assets is required. These future costs are identified and considered in developing forecasts of future operations, maintenance and renewal costs in Section LIFE CYCLE MANAGEMENT PLAN The life cycle management plan details how the organization plans to manage and operate the assets at the agreed levels of service (defined in Section 3) while optimizing life cycle costs. 5.1 Background Data Physical parameters The assets covered by this asset management plan are shown in Table 2.1. These assets include float systems, boat launch structures, breakwaters, seawalks and wharves. The age profile of the assets include in this AM Plan is shown in Figure 1.

18 15 Figure 1: Asset Age Profile Asset capacity and performance The organization s services are generally provided to meet design standards, where these are available. Currently there are no known service deficiencies Asset condition Where possible, condition is monitored in accordance with recommended service and maintenance standards. Condition is also monitored during planned and unplanned reactive maintenance. The condition profile of our assets is shown in Figure 2.

19 16 Fig 2: Asset Condition Profile Condition is measured using a 1 5 grading system 10 as detailed in Table Table 5.1.3: Simple Condition Grading Model Condition Grading Description of Condition 1 Very Good: only planned maintenance required 2 Good: minor maintenance required plus planned maintenance 3 Fair: significant maintenance required 4 Poor: significant renewal/rehabilitation required 5 Very Poor: physically unsound and/or beyond rehabilitation Asset valuations The value of assets recorded in the asset inventory register as at December 31, 2012 covered by this asset management plan is shown below. Assets are valued at current replacement cost. Current Replacement Cost $28,964,617 Depreciable Amount $28,964,617 Average useful life 97.7 years Annual Depreciation/ Consumption Expense $296,465 Useful lives were reviewed in May 2013 by the Manager of Engineering Services and the Director of Infrastructure. 10 IPWEA, 2011, IIMM, Sec 2.5.4, p 2 79.

20 17 Key assumptions made in preparing the valuations were: Float systems have an average useful life of 43 years Boat launch structures have an average useful life of 64 years Breakwaters and seawalks have an average useful life of 150 years Wharves have an average useful life of 50 years Various ratios of asset consumption and expenditure have been prepared to help guide and gauge asset management performance and trends over time. Following are the ratios for 2013: Rate of Annual Asset Consumption 1.02% (Depreciation/Depreciable Amount) 20 Year Rate of Annual Asset Renewal 0.44% (Capital renewal exp/depreciable amount) Rate of Annual Asset Upgrade/New 0.039% (Capital upgrade exp/depreciable amount) Rate of Annual Asset Upgrade/New 0.039% (including developer contributed assets) Historical Data Historical cost $19,125,620 Net Book Value $15,435,053 Annual Amortization Expense $484,136 Historically, and as reported in our financial statements, the cost of the marine infrastructure assets valued at their in service date is $19,125, Infrastructure Risk Management Plan An assessment of risks 11 associated with service delivery from infrastructure assets has identified critical risks that will result in the loss or reduction in service from infrastructure assets or a financial shock to the organization. The risk assessment process identifies credible risks, the likelihood of the risk event occurring, the consequences should the event occur, develops a risk rating, evaluates the risk and develops a risk treatment plan for non acceptable risks. Critical risks, being those assessed as Very High requiring immediate corrective action and High requiring prioritized corrective action, together with the estimated residual risk are summarized in Table 5.2. These risks are reported to management and Council. Table 5.2: Critical Risks and Treatment Plans Risk Damage to the float systems Service or Asset at Risk Wood/concrete fingers What can Happen Personal injury/ vessel damage Risk Rating (VH, H) Risk Treatment Plan H Daily inspections; Immediate repairs Residual Risk * L 11 City of Powell River Marine Supply Asset Infrastructure Risk Management Plan to be developed

21 18 Risk Breakwater failure Service or Asset at Risk Harbour float systems What can Happen Damage to float network Mooring vessels damaged Use of harbour compromised Risk Rating (VH, H) Risk Treatment Plan H Marine Engineer inspect breakwater every 5 years Monitor extreme tides Plan to relocate customers to other facilities Residual Risk * L Wharves structural failure Wharves at North Harbour and Powell Lake Interruption/ closure of use by public/ commercial users H Marine Engineer inspect wharf every 5 years M Note * The residual risk is the risk remaining after the selected risk treatment plan is operational. 5.3 Routine Operations and Maintenance Plan Operations include regular activities to provide services such as sanitary pump out, moorage collection, safety inspections, liaison with boat owners and government agencies. Routine maintenance is the regular on going work that is necessary to keep assets operating, including instances where portions of the asset fail and need immediate repair Operations and Maintenance Plan Operational activities affect marine asset quality and longevity. Maintenance includes all actions necessary for sustaining an asset in useful condition, including regular ongoing day to day work necessary to keep assets operating but excluding rehabilitation or renewal. Maintenance may be classified into reactive, planned, and specific maintenance activities. Reactive maintenance is unplanned repair work carried out in response to service requests and management/supervisory direction. Planned maintenance is repair work that is identified and managed through a maintenance management system (MMS). MMS activities include inspecting, assessing the condition based on the number of failures/breakdowns, prioritizing, scheduling, actioning the work and reporting. Recording maintenance activity will develop a maintenance history to improve service delivery. Specific maintenance is replacement of higher value components/sub components of assets that are undertaken on a regular cycle including electrical components, lighting, etc. This work falls below the capital/maintenance threshold but may require a specific budgetary allocation. In the past the organization has not separately recorded operational and maintenance costs. As a consequence of this, the 2013 Marine Asset Management Plan is unable to differentiate historic maintenance expenditure trends. Future iterations of this plan will be able to show past maintenance expenditure for planned and specific maintenance expenditure, and for unplanned expenditure. Maintenance expenditure levels are considered to be adequate to meet projected service levels, which may be less than or equal to current service levels. Where maintenance expenditure levels are insufficient, lesser levels of service may result. The service consequences and service risks are to be considered in the Infrastructure Risk Management Plan.

22 19 Assessment and prioritization of reactive maintenance is undertaken by City staff using experience and judgement Operations and Maintenance Strategies The organization will operate and maintain assets to provide the defined level of service to approved budgets in the most cost efficient manner. The operation and maintenance activities include: Scheduling operational activities to deliver the defined level of service in the most efficient manner. Undertaking maintenance activities through a planned maintenance system to reduce maintenance costs and improve maintenance outcomes. Maintain a current infrastructure risk register for assets and present service risks associated with providing services from infrastructure assets and reporting very high and high risks and residual risks after treatment to management and Council. Review current and required skills base and implement workforce training and development to meet required operations and maintenance needs. Review asset utilization to identify underutilized assets and appropriate remedies, and over utilized assets and customer demand management options. Maintain a current hierarchy of critical assets and required operations and maintenance activities. Develop and regularly review appropriate emergency response capability. Review management of operations and maintenance activities to ensure best value is obtained for resources used. Asset hierarchy An asset hierarchy provides a framework for structuring data in an information system to assist in the collection of data, reporting information and making decisions. The hierarchy includes the asset class and component used for asset planning, and financial reporting and service level hierarchy used for service planning and delivery. The organization s service hierarchy is shown is Table Table 5.3.2: Asset Service Hierarchy Service Hierarchy Float Systems Boat launch structures Breakwaters and seawalks Wharves Service Level Objective To effectively provide infrastructure for moorage of commercial and private vessels To effectively provide egress access of vessels into the harbour, Malaspina Strait, and Powell Lake To effectively provide protection of the float infrastructure and the upland topography and to provide pedestrian corridor To effectively provide access for float planes and a public gathering place Critical Assets Critical assets are those assets which have a high consequence of failure but not necessarily a high likelihood of failure. By identifying critical assets and critical failure modes, organizations can target and refine investigative activities, maintenance plans and capital expenditure plans at the appropriate time. Operations and maintenance activities may be targeted to mitigate critical assets failure and maintain service levels. These activities may include increased inspection frequency, higher maintenance intervention levels, etc. Critical assets failure modes and required operations and maintenance activities are detailed in Table

23 20 Table : Critical Assets and Service Level Objectives Critical Assets Critical Failure Mode Operations & Maintenance Activities Float Systems Float infrastructure is compromised Boat launch structures Breakwaters and seawalks Wharves Standards and specifications Launching access or egress is compromised Loss of harbour breakwater protection Structural damage to wharf structures Renewal and maintenance programs Scheduled maintenance inspections Inspections of breakwater during high tide and storm events Inspection of wharves yearly and scheduled structural Engineer review every 5 years Maintenance work is carried out in accordance with the following standards and specifications. MMCD Master Municipal Construction Documents Infrastructure Design & Construction Bylaw 2225, 2009 Marine asset management best practises Summary of future operations and maintenance expenditure Future operations and maintenance expenditure is forecast to trend in line with the value of the asset stock as shown in Figure 3. Note that all costs are shown in current 2013 Canadian dollar values (i.e. real values). Figure 3: Projected Operations and Maintenance Expenditure 5.4 Renewal/Replacement Plan Renewal and replacement expenditure is major work which does not increase the asset s design capacity but restores, rehabilitates, replaces or renews an existing asset to its original or lesser required service potential. Work over and above restoring an asset to original service potential is upgrade/expansion or new works expenditure.

24 Renewal plan Assets requiring renewal/replacement are identified by using the asset inventory register data to project the renewal costs using acquisition year and useful life to determine the renewal year. The useful lives of assets used to develop projected asset renewal expenditure are shown in Table Asset useful lives were last reviewed in May Table 5.4.1: Useful Lives of Assets Asset Category Float systems Boat launch structures Breakwaters and seawalks Wharves Average Useful Life 43 years 64 years 150 years 50 years Renewal and Replacement Strategies The organization will plan capital renewal and replacement projects to meet level of service objectives and minimize infrastructure service risks by: Planning and scheduling renewal projects to deliver the defined level of service in the most efficient manner. Undertaking project scoping for all capital renewal and replacement projects to identify: o The service delivery deficiency, present risk and optimum time for renewal/replacement. o The project objectives to rectify the deficiency. o The range of options, estimated capital and life cycle costs for each option that could address the service deficiency. o Evaluate the options against evaluation criteria adopted by Council. o Select the best option to be included in capital renewal programs. Using low cost renewal methods (cost of renewal is less than replacement) wherever possible. Maintain a current infrastructure risk register for assets and service risks associated with providing services from infrastructure assets and reporting Very High and High risks and residual risks after treatment to management and Council. Review current and required skills base and implement workforce training and development to meet required construction and renewal needs. Maintain a current hierarchy of critical assets and capital renewal treatments and timings required. Review management of capital renewal and replacement activities to ensure Council is obtaining best value for resources used. Renewal ranking criteria Asset renewal and replacement is typically undertaken to either: Ensure the reliability of the existing infrastructure to deliver the service it was constructed to facilitate, or To ensure the infrastructure is of sufficient quality to meet the service requirements 12 It is possible to get some indication of capital renewal and replacement priorities by identifying assets or asset groups that: Have a high consequence of failure. 12 IPWEA, 2011, IIMM, Sec 3.4.4, p 3 60.

25 22 Have a high utilization and subsequent impact on users. The total value represents the greatest net value to the organization. Have the highest average age relative to their expected lives. Are identified in the AM Plan as key cost factors. Have high operational or maintenance costs. Where replacement with modern equivalent assets would yield material savings. 13 The ranking criteria used to determine priority of identified renewal and replacement proposals is detailed in Table Table 5.4.2: Renewal and Replacement Priority Ranking Criteria Criteria Weighting Have a high consequence of failure 20% Have a high utilization and subsequent impact on users would be greatest The total value represents the greatest net value to the organization Have the highest average age relative to their expected lives Are identified in the AM Plan as key cost factors 20% 20% 10% 10% Have high operational or maintenance costs 10% Where replacement with modern equivalent assets would yield material savings 10% Total 100% Renewal and replacement standards Renewal work is carried out in accordance with the following standards and specifications. MMCD Master Municipal Construction Documents Infrastructure Design & Construction Bylaw 2225, Summary of future renewal and replacement expenditure Projected future renewal and replacement expenditure are forecast to increase over time as the asset stock increases from growth. The expenditure is summarized in Fig 4. Note that all amounts are shown in real values. The projected capital renewal and replacement program is shown in Appendix B. 13 Based on IPWEA, 2011, IIMM, Sec 3.4.5, p 3 66.

26 23 Fig 4: Projected Capital Renewal and Replacement Expenditure Deferred renewal and replacement, i.e. those assets identified for renewal and/or replacement and not scheduled in capital works programs, are to be included in the risk analysis process in the Infrastructure Risk Management Plan. Renewals and replacement expenditure in the organization s capital works program will be accommodated in the long term financial plan. 5.5 Creation/Acquisition/Upgrade Plan New works are those works that create a new asset that did not previously exist, or works which upgrade or improve an existing asset beyond its existing capacity. They may result from growth, social or environmental needs. Assets may also be acquired at no cost to the organization from land development. These assets from growth are considered in Section 4.4 and 4.5. At this time, marina assets are not contributed by developers Selection criteria New assets and upgrade/expansion of existing assets are identified from various sources such as Council or community requests, proposals identified by strategic plans or partnerships with other organizations. Candidate proposals are inspected to verify need and to develop a preliminary renewal estimate. Verified proposals are ranked by priority and available funds and scheduled in future works programs. The priority ranking criteria for new assets will be incorporated into the next iteration of this Marine Asset Management Plan Capital Investment Strategies The organization will plan capital upgrade and new projects to meet level of service objectives by:

27 24 Planning and scheduling capital upgrade and new projects to deliver the defined level of service in the most efficient manner. Undertake project scoping for all capital upgrade/new projects to identify: o The service delivery deficiency, presents risk and required timeline for delivery of the upgrade/new asset. o The project objectives to rectify the deficiency including value management for major projects. o The range of options, estimated capital and life cycle costs for each option that could address the service deficiency. o Management of risks associated with alternative options. o Evaluate the options against evaluation criteria adopted by Council. o Select the best option to be included in capital upgrade/new programs. Review current and required skills base and implement training and development to meet required construction and project management needs. Review management of capital project management activities to ensure best value is obtained for resources used. Standards and specifications for new assets and for the upgrade/expansion of existing assets are the same as those for renewal shown in Section North Harbour Summary of future upgrade/new assets expenditure The City has identified the extension of a seawalk in the South Harbour for Expenditure on new assets and services in the organization s capital works program will be accommodated in the long term financial plan, if these projects are planned. 5.6 Disposal Plan Disposal includes any activity associated with disposal of a decommissioned asset including sale, demolition or relocation. Assets identified for possible decommissioning and disposal have not been identified. Where

28 25 cash flow projections from asset disposals are not available, these will be developed in future iterations of this asset management plan. 5.7 Service Consequences and Risks The organization will make decisions based on this asset management plan to obtain the optimum benefits from its available resources. Decisions will be based on the development of two scenarios. Scenario 1 The current 20 year average budget of $126,400 per year for capital renewals does not provide sufficient funding to replace assets over the full life cycle. Funding will be used towards reactive maintenance rather than replacement of assets. This will require additional resources, may require reduction in levels of service will increase risk consequences. The 20 year budget for operations, maintenance and replacement of existing assets is projected to be an average of $653,050. Scenario 2 The optimal level of budget required for capital renewals should be based on the average annual consumption of the marine assets. Based on the current replacement cost of $28,964,617 and an average life of 97.7 years, an annual budget of $296,465 would be required for optimal capital renewal and replacement of the marine assets. In addition, it is necessary to retain the current operating and maintenance budgets as forecasted. The annual life cycle costs for operations, maintenance and replacement of existing assets is projected to be an average of $815, What we cannot do There are some operations, maintenance activities and capital projects that may be unable to be undertaken over the life cycle. These include: Regular inspection program for all marine assets. Planned maintenance for all marine assets. Renewal of marine assets to maintain the current level of service Service consequences Operations and maintenance activities and capital projects that may not be undertaken may create service consequences for users. These include:

29 26 Marine asset infrastructure condition will deteriorate, as marine assets will only be repaired if and when safety is a concern or the asset is no longer able to provide the service, causing service interruptions. Lack of daily inspections may allow for damaged assets to be neglected, providing an unsafe service Risk consequences The operations and maintenance activities and capital projects that cannot be undertaken may maintain or create risk consequences for the organization. These include: Repairs and replacement of marine assets Lack of daily inspections of marine assets These risks will be included with the Infrastructure Risk Management Plan summarized in Section 5.2. Risk management plan actions and costs will be included within projected expenditure. 6. FINANCIAL SUMMARY South Harbour This section contains the financial requirements resulting from all the information presented in the previous sections of this asset management plan. The financial projections will be improved as further information becomes available on desired levels of service and current and projected future asset performance. 6.1 Financial Statements and Projections The financial projections are shown in Fig 5 for projected operating (operations and maintenance) and capital expenditure (renewal and upgrade/expansion/new assets). Note that all costs are shown in real values.

30 27 Fig 5: Projected Operating and Capital Expenditure Sustainability of service delivery There are four key indicators for service delivery sustainability that have been considered in the analysis of the services provided by this asset category, these being the asset renewal funding ratio, long term lifecycle costs/expenditure, and medium term projected/budgeted expenditure over 5 and 10 years of the planning period. Asset Renewal Funding Ratio 20 year Asset Renewal Funding Ratio % The Asset Renewal Funding Ratio is the most important indicator and reveals that over the next 20 years, the organization is forecasting that it will have 110% of the funds required for the optimal renewal and replacement of its assets. The funding situation for the next 20 years is in excess, although the majority of the assets are due for renewal or replacement after the 20 year mark. Therefore, the life cycle renewal funding ratio is a better reflection of our funding situation. Life cycle Asset Renewal Funding Ratio 42.7% Over the full life cycle of the marine assets, the organization is estimated to have 42.7% of the funds required for optimal renewal and replacement of its assets. It should be noted that these funds are restricted to renewal and replacement of the North Harbour and the Barge and Tanker assets. Funds to renew and replace other marine assets have not been budgeted for at this time. 14 AIFMG, 2009, Financial Sustainability Indicator 8, Sec 2.6, p 2.18

31 28 Long term Life Cycle Cost Life cycle costs (or whole of life costs) are the average costs that are required to sustain the service levels over the asset life cycle. Life cycle costs include operations and maintenance expenditure and asset consumption (depreciation expense). The life cycle cost for the services covered in this asset management plan is $815,515 per year (operations and maintenance costs plus depreciation expense). Life cycle costs can be compared to budgeted life cycle expenditure to give an initial indicator of affordability of projected service levels when considered with age profiles. Budgeted life cycle expenditure includes operations, maintenance and capital renewal expenditure and excludes new or upgraded assets. The budgeted life cycle expenditure is $641,650 per year (average operations and maintenance plus capital renewal budgeted expenditure). A shortfall between life cycle cost and budgeted life cycle expenditure is the life cycle gap. The life cycle gap for services covered by this asset management plan is $173,865 per year. Budgeted life cycle expenditure is 79% of life cycle costs. The life cycle costs and budgeted life cycle expenditure comparison highlights any difference between planned outlays and the average cost of providing the service over the long term. If the budgeted life cycle expenditure is less than the life cycle cost, it is most likely that outlays will need to be increased or cuts in services will need to be made in the future. Knowing the extent and timing of any required increase in outlays and the service consequences if funding is not available will assist organizations in providing services to their communities in a financially sustainable manner. This is the purpose of the asset management plans and long term financial plan. Medium term 10 year financial planning period This projected expenditure may be compared to budgeted expenditure in the 10 year period to identify any funding shortfall. In a core asset management plan, a gap is generally due to increasing asset renewals for ageing assets. The projected operations, maintenance and capital renewal expenditure required over the 10 year planning period is $572,500 on average per year. Estimated (budget) operations, maintenance and capital renewal funding is $639,300 on average per year giving a 10 year funding excess of $66,800 per year. This indicates that the City expects to have 112% of the projected expenditure needed to provide the services documented in the asset management plan. There is an excess over the 10 year period because the majority of the assets have an expected replacement year after the ten year mark. Medium Term 5 year financial planning period The projected operations, maintenance and capital renewal expenditure required over the first 5 years of the planning period is $613,000 on average per year. Estimated (budget) operations, maintenance and capital renewal funding is $634,600 on average per year giving a 5 year funding shortfall of $21,600 per year. This indicates that the City expects to have 104% of projected expenditure required to provide the services shown in this asset management plan.

32 29 Asset management financial indicators Figure 5A shows the asset management financial indicators over the 5, 10 and life cycle period. Figure 5A: Asset Management Financial Indicators 104 % 79 % Life Cycle Providing services from infrastructure in a sustainable manner requires the matching and managing of service levels, risks, projected expenditure and financing to achieve a financial indicator of approximately 1.0 for the first years of the asset management plan and ideally over the life cycle. Figure 8 shows the projected asset renewal and replacement expenditure over the 20 years of the AM Plan. The projected asset renewal and replacement expenditure is compared to renewal and replacement expenditure in the capital works program, which is accommodated in the long term financial plan. Figure 6: Projected and LTFP Budgeted Renewal Expenditure

33 30 Table shows the shortfall between projected renewal and replacement expenditure, and expenditure accommodated in long term financial plan. Budget expenditure accommodated in the long term financial plan or extrapolated from current budgets is shown in Appendix D. Year End Table 6.1.1: Projected and LTFP Budgeted Renewals and Financing Shortfall Projected Renewals ($,000) LTFP Renewal Budget ($ 000) Renewal Financing Shortfall( gap + surplus) ($ 000) Cumulative Shortfall ( gap + surplus) ($'000) 2013 $0 $64 $64 $ $0 $94 $94 $ $0 $128 $128 $ $424 $130 $294 $ $0 $132 $132 $ $0 $132 $132 $ $0 $132 $132 $ $80 $132 $52 $ $0 $132 $132 $ $0 $132 $132 $ $0 $132 $132 $ $0 $132 $132 $ $933 $132 $801 $ $0 $132 $132 $ $0 $132 $132 $ $0 $132 $132 $ $0 $132 $132 $ $862 $132 $730 $ $0 $132 $132 $ $0 $132 $132 $229 Note: A negative shortfall indicates a financing gap; a positive shortfall indicates a surplus for that year. Providing services in a sustainable manner will require matching of projected asset renewal and replacement expenditure to meet agreed service levels with the corresponding capital works program accommodated in the long term financial plan. A gap between projected asset renewal/replacement expenditure and amounts accommodated in the LTFP indicates that further work is required on reviewing service levels in the AM Plan (including possibly revising the LTFP) before finalizing the asset management plan to manage required service levels and funding to eliminate any funding gap. We will manage the gap by developing this asset management plan to provide guidance on future service levels and resources required to provide these services, and review future services, service levels and costs with the community Projected expenditure for long term financial plan Table shows the projected expenditure for the 10 year long term financial plan. Expenditure projections are in 2013 real values.

34 31 Table 6.1.2: Projected Expenditure for Long Term Financial Plan ($000) Year Operations Maintenance Projected Capital Renewal Capital Upgrade/New Disposals 2013 $ $ $0.00 $ $ $ $74.66 $0.00 $0.00 $ $ $74.66 $0.00 $0.00 $ $ $74.66 $ $0.00 $ $ $74.66 $0.00 $0.00 $ $ $74.66 $0.00 $0.00 $ $ $74.66 $0.00 $0.00 $ $ $74.66 $79.60 $0.00 $ $ $74.66 $0.00 $0.00 $ $ $74.66 $0.00 $0.00 $ $ $74.56 $0.00 $0.00 $ $ $74.56 $0.00 $0.00 $ $ $74.56 $ $0.00 $ $ $74.56 $0.00 $0.00 $ $ $74.56 $0.00 $0.00 $ $ $74.56 $0.00 $0.00 $ $ $74.56 $0.00 $0.00 $ $ $74.56 $ $0.00 $ $ $74.56 $0.00 $0.00 $ $ $74.56 $0.00 $0.00 $ Funding Strategy After reviewing service levels, as appropriate to ensure ongoing financial sustainability, projected expenditure identified in Section will be accommodated in the City s 20 year long term financial plan. 6.3 Valuation Forecasts Asset values are forecast to increase as additional assets are added to the asset stock from construction and acquisition by the organization, and from assets constructed by land developers and others and donated to the organization. Figure 9 shows the projected replacement cost asset values over the planning period in real values.

35 32 Figure 7: Projected Asset Values Depreciation expense values are forecast in line with asset values as shown in Figure 8. Figure 8: Projected Depreciation Expense The depreciated replacement cost will vary over the forecast period depending on the rates of addition of new assets, disposal of old assets and consumption and renewal of existing assets. Forecast of the assets depreciated replacement cost is shown in Figure 9. The depreciated replacement cost of contributed and new assets is shown in the darker colour and in the lighter colour for existing assets. The depreciated replacement cost is projected to decline because the depreciation/consumption is greater than the replacement/renewal of our capital assets.

36 33 Figure 9: Projected Depreciated Replacement Cost 6.4 Key Assumptions made in Financial Forecasts This section details the key assumptions made in presenting the information contained in this asset management plan and in preparing forecasts of required operating and capital expenditure and asset values, depreciation expense and carrying amount estimates. It is presented to enable readers to gain an understanding of the levels of confidence in the data behind the financial forecasts. Key assumptions made in this asset management plan and risks that these may change are shown in Table 6.4. Table 6.4: Key Assumptions made in AM Plan and Risks of Change Key Assumptions Conditions are based on estimated useful life Replacement costs are based on industry cost estimates Useful life is based on industry standards Risks of Change to Assumptions Actual conditions of assets may be better or worse Actual replacement costs may be more or less Asset life may be more or less than estimated 6.5 Forecast Reliability and Confidence The expenditure and valuations projections in this AM Plan are based on best available data. Currency and accuracy of data is critical to effective asset and financial management. Data confidence is classified on a 5 level scale 15 in accordance with Table 6.5. Table 6.5: Data Confidence Grading System Confidence Grade A Highly reliable B Reliable Description Data based on sound records, procedures, investigations and analysis, documented properly and recognized as the best method of assessment. Dataset is complete and estimated to be accurate ± 2% Data based on sound records, procedures, investigations and analysis, documented properly but has minor shortcomings, for example some of the data is old, some documentation is missing and/or reliance is placed on unconfirmed reports or some extrapolation. Dataset is complete and estimated to be accurate ± 10% 15 IPWEA, 2011, IIMM, Table 2.4.6, p 2 59.

37 34 Confidence Grade C Uncertain D Very Uncertain E Unknown Description Data based on sound records, procedures, investigations and analysis which is incomplete or unsupported, or extrapolated from a limited sample for which grade A or B data are available. Dataset is substantially complete but up to 50% is extrapolated data and accuracy estimated ± 25% Data is based on unconfirmed verbal reports and/or cursory inspections and analysis. Dataset may not be fully complete and most data is estimated or extrapolated. Accuracy ± 40% None or very little data held. The estimated confidence level for and reliability of data used in this AM Plan is shown in Table Table 6.5.1: Data Confidence Assessment for Data used in AM Plan Data Confidence Assessment Comment Demand drivers B Based on local corporate knowledge and Provincial government projections Growth projections B Based on Provincial government projections Operations expenditure C Municipal records historically, operations expenditure and maintenance expenditure not separately identified Maintenance expenditure C Municipal records historically, operations expenditure and maintenance expenditure not separately identified Projected Renewal exps. B Assets re valued in May Asset values Asset residual values B Municipal assets are generally used to the end of their useful life and would not have a residual value of a material amount. Asset useful lives B Useful lives based on industry standards Condition modelling B Condition modelling completed for wave action Renewals C Based on asset inventory registers and capital project expenditures. Defect repairs C Developed from planned and reactive inspections and municipal cost/estimating rates Upgrade/New expenditure A Cost is based on past projects Disposal expenditure C Rough estimates only Over all data sources, the data used in the preparation of this AM Plan is assessed at a medium confidence level. 7. PLAN IMPROVEMENT AND MONITORING 7.1 Status of Asset Management Practices Accounting and financial systems The City uses Agresso Unit 4 Enterprise software for recording accounting information. We also use the cash and municipal tax software developed by the Tempest Development Group for local governments. Accountabilities for financial systems The Director of Financial Services and the Manager of Accounting Services are responsible for the accounting and financial systems. Accounting standards and regulations GAAP (Generally Accepted Accounting Principles) defined in the CICA (Canadian Institute of Chartered Accountants) Handbook. PSAB 3150 (Public Sector Accounting Board section 3150 Reporting of Tangible Capital Assets )

38 35 Capital/maintenance threshold The capital threshold in most instances is $10,000. The threshold may be different in some classes of capital assets. According to the definition of a capital asset in the CICA handbook, costs will be recorded as capital or maintenance, regardless of value. Required changes to accounting financial systems arising from this AM Plan The implementation of a work order module for recording maintenance costs and scheduling of preventative maintenance would help to maximize the life cycle of capital assets Asset management system We are using GIS software produced by ESRI, called ARC GIS. Asset inventory registers The asset inventory register is compiled and maintained by the Finance Department with support of the Engineering Department. The asset inventory register is verified and reviewed annually as per Council s Tangible Capital Asset Policy #233. A summary of the asset classes is reported in the annual financial statements. Linkage from asset management to financial system The asset inventory register is manually maintained in Excel spreadsheets by the Finance Department. The data is uploaded to the ESRI ARC GIS software by the Engineering Department. Accountabilities for asset management system and data maintenance The Director of Infrastructure, the Manager of Accounting Services and the Manager of Engineering Services are responsible for ensuring the maintenance and accuracy of the asset management system and its associated data. Required changes to asset management system arising from this AM Plan The asset management system is functional although efficiencies may be achieved with a work order module for recording maintenance costs and scheduling of preventative maintenance would help to maximize the life cycle of capital assets. As well, technology in the field would allow data to be captured and uploaded to the ESRI ARC GIS database in a timely and accurate manner.

39 Improvement Program The asset management improvement plan generated from this asset management plan is shown in Table 7.2. Table 7.2: Improvement Plan Task No Task Responsibility Resources Required Timeline 1 Separation of operations and maintenance budgets Financial Services Department 2 Identification of critical assets for condition assessment Engineering & Operational Services Department 3 Long term financial planning for asset renewals and upgrades 4 Undertake marine asset infrastructure condition monitoring to increase confidence limits 5 Further integration of our asset GIS database with the asset management plan Financial Services Department Engineering & Operational Services Department Engineering & Operational Services Department Financial, Engineering & Operational Services Staff Engineering & Operational and Financial Services Staff Financial Services staff Next 6 month period Next 12 month period Next 12 month period Various staff Next 24 month period Engineering & Operational and Financial Services Staff Next 24 month period 6 Undertaking community consultation To be determined To be determined Next 24 month period 7 Performance measurement Engineering & Operational Services Department 7.3 Monitoring and Review Procedures Engineering & Operational Services Staff Continual This asset management plan will be reviewed during annual budget planning processes and amended to recognize any material changes in service levels and/or resources available to provide those services as a result of budget decisions. The AM Plan will be updated annually to ensure it represents the current service level, asset values, projected operations, maintenance, capital renewal and replacement, capital upgrade/new and asset disposal expenditure and projected expenditure values incorporated into the Council s long term financial plan. 7.4 Performance Measures The effectiveness of the asset management plan can be measured in the following ways: The degree to which the required projected expenditure identified in this asset management plan is incorporated into the organization s long term financial plan. The degree to which 1 5 year detailed works programs, budgets, business plans and organizational structures take into account the global works program trends provided by the asset management plan. The degree to which the existing and projected service levels and service consequences (what we cannot do), risks and residual risks are incorporated into the organization s Strategic Plan and associated plans. The Asset Renewal Funding Ratio achieving the target of 1.0.

40 37 8. REFERENCES IPWEA, 2006, International Infrastructure Management Manual, Institute of Public Works Engineering Australia, Sydney, IPWEA, 2008, NAMS.PLUS Asset Management, Institute of Public Works Engineering Australia, Sydney, IPWEA, 2009, Australian Infrastructure Financial Management Guidelines, Institute of Public Works Engineering Australia, Sydney, IPWEA, 2011, International Infrastructure Management Manual, Institute of Public Works Engineering Australia, Sydney, City of Powell River, Corporate Strategic Plan (Draft), Powell River, British Columbia Statistics Canada, 2012, Focus on Geography Series, 2011 Census, www12.statcan.gc.ca/censusrecensement/2011/as sa/fogs spg/facts cma eng.cfm?lang=eng&tab=2&gk=cma&gc=945

41 38 9. APPENDICES Appendix A Maintenance Response Levels of Service Appendix B Projected 10 Year Capital Renewal and Replacement Works Program Appendix C Projected 10 Year Capital Upgrade/New Works Program Appendix D Budgeted Expenditure Accommodated in LTFP Appendix E Abbreviations Appendix F Glossary

42 39 Appendix A Maintenance Response Levels of Service To be developed.

43 40 Appendix B Projected 10 Year Capital Renewal and Replacement Works Program

44 41 Appendix C Projected Upgrade/New 10 Year Capital Works Program