The Three Planning Windows of Asset Management John Murray City of Hamilton May 9 th, 2012 CNAM - Montreal. Hamilton Asset Management Plan

Transcription

1 The Three Planning Windows of Asset Management John Murray City of Hamilton May 9 th, 2012 CNAM - Montreal 1

2 City of Hamilton Amalgamated Area Municipalities Population 500,000 The City of Waterfalls 2

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4 Facility Construction - last 50 yrs Hamilton now has over 300 corporate and community facilities 4

5 Facility Construction - Next 50 yrs? Replace 300 corp. and comm. facilities and additional facilities?? 5

6 Presentation Summary Hamilton s Asset Management Plan The Three Planning Windows of Asset Management - Strategic Planning Window - Tactical Planning Window - Project Planning Window What would we change / do different? 6

7 Infrastructure Today 6500 Lane Kms of Road / 15,000 Street Segments 2100 Kms Water Main s / 35,000 Pipes 2700 Kms Sewer Main s / 45,000 Pipes 1 Water Treatment Plant 2 Waste Water Treatment Plants 700 Facilities (includes park facilities) 5,520 Acres of Parkland / 430 Parks Fleet Vehicles / Transit Vehicles Waste Management Assets 7

8 Asset Management is Service Management The Asset is the conduit for the service Infrastructure provides services that bring our city to life Pipes provide clean drinking water Roads provide a transportation network Buses provide public transportation Facilities provide recreation programs 8

9 Cost-effective AM = Wise Investments: Doing the right thing To the right asset At the right time 9

10 Asset Management The Framework: What do we own and where is it? What is it worth? What condition is it in? What do we need to do to it? When do we need to do it? How much money do we need? How do we achieve sustainability? Two additional important questions: Do we still need it? (should be question 2 above) How do we maintain sustainability? 10

11 The Asset Management Plan The Strategic Planning Window State of the infrastructure Reports Life Cycle Analysis Revenue Plans and projections Key Communication Tools STRATEGIC PLANNING Sustainable Asset Management Life Cycle

12 Strategic Planning & Communication A New Way of looking at the same Infrastructure 13

13 State of the Infrastructure Reports Public Works Assets (2005, 2006, 2009) Water Waste Water Storm Water Roads & Traffic Fleet & Transit Corporate Facilities Waste Management Parks & Open Spaces Forestry Cemeteries 14

14 State of the Infrastructure Reports Community Services Assets (2008) Housing Recreation Culture Long Term Care 15

15 Objectives of the SotI Report It is: A revenue plan An order of magnitude Long-term & strategic Service based Life-cycle based It is not: A budget Fixed time /short-term Tactical/operational Project specific It identifies trends and issues, Not policies. 16

16 First Step: What do we own? Water Asset Type Asset Component 2009 Inventory Mains - trunk (greater than 450 mm) Mains - Local (less than 450 mm) 175,094 m 1,771,874 m Linear Facilities Appurtenances included as part of local mains Meters Hydrants 12,118 Valves & Chambers 16,655 Services 132,988 Industrial Residential 132,9881 Water Treatment Plant 1 Pumping Stations 25 Storage (Reservoirs and Towers) 20 Wells (Communal systems) 8 Surge Tanks2 1 17

17 First Step: What do we own? Transit Asset Type Asset Component 2009 Inventory Fleet Infrastructure HSR (Buses) 211 ATS (ParaTransit) 66 Non-Revenue 15 Shelters 536 Loops and Terminals 24 Bus Stops 2,253 18

18 Second Step: Asset Valuation (Wastewater System Replacement Value) Asset Type Asset Component 2009 Replacement Cost ($M) Linear Facilities Interceptors1 $247 Trunk Sewers (greater than or equal to 450 mm) Local Sewers (less than 450 mm) Combined Sewers (less than 450 mm) $476 $571 Maintenance Holes $697 Sewer Laterals2 $689 Replacement Value Sub-Totals $2,680 Wastewater Treatment Plants $835 CSO Tanks $135 Pumping Stations $187 Wastewater Control Gates $16 Replacement Value Sub-Totals $1,172 Replacement Value Totals $3,852 19

19 Third Step: Asset Rating Condition and Performance A - F Capacity versus Need A - F Funding versus Need A - F 20

20 Fourth & Fifth Step: What do we need to do, and When? 0 25% of asset life Minor Maintenance 25 50% of asset life Major Maintenance 50 75% of asset life Rehabilitation % of asset life Replacement x 4x 50x 200x Operating Budget Capital Budget 21

21 Sixth Step: Financial Analysis Capital Costs Construction Costs $ + Growth 0.5%/year + Engineering cost $ 15% + Contingency $ 10% + Overhead & Admin $ 10% + Borrowing Costs $ 50% Total Capital Requirements $ O & M Costs + O & M (inc. growth) + Overhead & Admin + Cost Allocations 2.5% 10% 2% Total O & M Requirements $ Seventh Step: Sustainable Funding Level/Year 22 Total O&M + Capital / life-cycle $

22 Primary Goal of SotI: to move from Measurement Strategic Management 23

23 State of the Infrastructure Reports Key Communications & Analysis 24

24 2009 Infrastructure Report Card Public Works Assets 25

25 Asset Replacement Value per 50 property frontage - $92,300 Public Works Asset Replacement Values Per Property 26

26 SotI Communication Tools Waste Management $400 Funding Requirements (Millions) $350 $300 $250 $200 $150 $100 $ years $ Year 27

27 SotI Communication Tools Facilities $100 Funding Requirements (Millions) $90 $ $70 years $60 $50 $40 $30 $20 $10 $0 Year 28

28 The Future is Dynamic Typical Age Distribution of Infrastructure % of asset life Minor Maintenance 26% 23% 14% 25 50% of asset life Major Maintenance 37% 26% 23% 50 75% of asset life Rehabilitation 14% 37% 26% % of asset life Replacement 23% 14% 37% 29

29 Network Capital Investment Requirements Roads $3,000 $2,500 $2,000 Average Annual Investment = $138 million 2008 Investment = $42.4 million Millions $1,500 $1,000 $500 $0 2010s 2020s 2030s 2040s 2050s 2060s 2070s 2080s 2090s 2100s Decade 30

30 Capital Budget vs. Deficit Ratio Capital Program 2010 Funding $000's Asset Value $000's Lifecycle of Asset Years Forecast Lifecycle Years Deficit Years Deficit Ratio Roads 40,000 4,397, Corporate Facilities 5, , Recreation Facilities 9, , Cultural Facilities 3, , Park Development 4, , Park Operations 1,200 86,

31 Asset Inventory Corporate Facilities - $354 (3%) Fleet - $86 (1%) Transit - $127 (1%) Parks - $314 (2%) Waste Mgm't - $149 (1%) Cemetery - $250 (2%) Water - $2,290 (17%) Roads and Traffic - $4,397 (32%) Wastewater - $3,852 (29%) Stormwater - $1,565 (12%) Total Value = $13.4 Billion (Values shown are in $ millions) 32

32 100 yr Investment Requirements 33

33 Daily Household Cost Comparisons 34

34 The new science of accountineering Pacioli Help engineers think like MBAs and act like engineers and Help accountants think like P.Eng.s and act like accountants Leonardo Da Vinci 35

35 The Strategic Planning Window What would we change or do different? Communication / Communication / Communication Make State of the Infrastructure Reports first priority New AM groups can use PSAB data as a base Builds council understanding & support from the onset Builds stakeholder involvement & support Integrate Public Engagement results and metrics 36

36 The Asset Management Plan STRATEGIC PLANNING Sustainable Asset Budget Forecast Management Life Cycle TACTICAL PLANNING Summary Budget 3 to 20 Years PROJECT PLANNING Detailed Operating and Capital Budget 1 to 3 Years 37

37 The Tactical Planning Window Infrastructure management systems Asset Risk and Criticality Analysis Capital Program Development Sustainability Plans Long Term Project Listings Council approved methodologies TACTICAL PLANNING Summary Budget 3 to 20 Years 38

38 Asset Management Team Structure Manager - Asset Management Admin Secretary Key Consultants & Industry Experts Senior Project Manager Surface Infrastructure Programming Senior Project Manager Subsurface Infrastructure Programming Project Mgr Manager Surface Infrastructure (1) Project Manager Parks & Facilities (1) Coordinator Infrastructure Programming (2) Project Manager Subsurface Infrastructure (1) Project Manager Infrastructure Mgmt Systems (1) Infrastructure Programming Tech (2) Facilities Tech. (1) Infrastructure Programming Tech (2) Application Development Technologist (3) Finance Systems 39

39 Infrastructure Management Systems Move from Project based to Program based Budgets Pavement Management System (2001 ) Water/Sewer Condition Indexes (2002 ) Water/Sewer Risk/Criticality Models (2006 ) Bridge Management System (2002 onward ) Capital Project Management System (2003 ) Facilities Management System (2006 ) Parks Management System (2008 ) TCA System PSAB 3150 (2009..) ROW IDSS (2012 and ongoing) 40

40 Pavement Management System 6,300 Lane KMs of Road / 14,000 street segments 41

41 Pavement Life Cycle Analysis Results 42

42 Water Distribution Network Analysis - 2,100 Km of Water Mains to Assess (32,000 Pipes) - 25% of Mains are 75yrs or Older Break History 43

43 Water Main Overall Condition Ratings New Rehab Replace Based On: Age Size Material Type Breaks Rate Soil Condition Water Quality 44

44 Sewers Mains CCTV Formula Based Insp. 45

45 Sewer Main Overall Condition Ratings Zoom Inspection 90% of inventory CCTV Camera ,213 Km (50%) 46

46 Facilities / Parks System 500 facilities / 450 Parks 47

47 Capital Asset Accounting System 48

48 GIS Coordination of Needs 49

49 Risk / Criticality Assessment Risk = Consequence of Failure X Probability of Failure 50

50 Consequences of Failure Reflects the relative Impact of asset failure Economic Repair Cost Operational Expense Operational Customer Type Length of Interruption Environmental Damage to Property and Adjacent Infrastructure Damage to the Environment Social Impact on Public Safety Disruption to Traffic and Business 51

51 Risk serves as the basis for a Tactical Planning Framework Criticality Model Consequences of Failure Economic Impact Operational Impact Environmental Impact Social Impacts Probability of Failure CoF Rating Systems Condition & Reliability Operational Adequacy Regulatory Compliance Economic Efficiency PoF Decision Model Business Case Planning Tools Long Range Forecast Lifecycle Models What if? Analysis Sustainable Funding Full Cost of Services Response Toolbox Capital Program Urgent Action Planned Action Repair & Renewal New Growth Others? Maintenance Program Planned Work Predictive Work Preventive Work Others? Inspection Trouble Reports Visual Inspection Testing Regiment Flow Monitoring Others? Program 52

52 Multi-Criteria Weighted Model 53

53 ROW Coordination Interaction between Infrastructure networks Coordination of activities Optimize spending Minimize disruption Trench 54

54 Integrated Management of ROW To turn a window of opportunity into A window of opportunities 55

55 ROW - many windows / many opportunities Road N/ A Road No work Req d Road Overlay Road Grinding Road Mill + Road Replace Water N/A Water No work Req d Water Rehab Water Replace Sanitary N/A Sanitary No work Req d Sanitary Rehab Sanitary Replace Storm N/A Storm No work Req d Storm Rehab Storm Replace 56

56 One window of opportunities = One integrated project Road N/A Road No work Req d Road Overlay Road Grind Road Mill + Road Replace Water Replace Sanitary N/A Sanitary No work Req d Sanitary Rehab Sanitary Replace Storm N/A Storm No work Req d Storm Rehab Storm Replace 57

57 Pilot Project Integrated ROW 3 City wards: Roads, Water, Storm and Sanitary Sewers Options Individual Network Project Projections Coordinated Project Projections Results: 12% Return on Investment Using Coordinated Approach Total $16.5 M/yr ASAP JIT EOL Integ. Indiv. Integ. Indiv. Integ. Indiv. $14.9 M/yr $12.2 M/yr $13.9 M/yr $13.8 M/yr $13.8 M/yr ROI (19%) (7%) 12% - 1% 1% 58

58 ROW Integrated management Next Steps: 59

59 New Assets: Detailed Sustainability Plans Includes Red Hill Valley Parkway (34 Ln Km) Lincoln M. Alexander Parkway (44 Ln KM) 60

60 ROW ASSETS: What do we own? Asset Type Asset Component UM Quantities Ramps m 2 86,400 Shoulders m 2 158,400 Curbs m 56,000 Roadway Median m 11,000 Noise Barriers m 20,000 LINC Traffic Drainage Fencing m 6,000 Guide/Guard Rails m 2,000 Crash Attenuators ea 264 Striping m 80,000 Marking ea 380 Signs & Supports ea 48 Overhead Signs & Supports ea 24 Signals Ea 11 Lighting Ea 119 Catch Basins Ea 220 Ditches M 11,000 Inlets/Outlets Ea 20 Pipes/Culverts M 1, Storm Water Management Outlet Control Ea 2 Ponds m 2 2,000 Access Roads M 1,000 Fencing (Ponds) M 800

61 What is it worth? (all assets) LINC RHVP RHCV Asset Type Asset Quantity Asset Replacement Value ($M) Road 44 lnkm $85.0 Structures 14 $53.5 Traffic Control - $2.6 Water Management - $1.7 Road 34 lnkm $65.3 Structures 38 $118.5 Traffic Control - $1.6 Water Management 23 $1.8 Waterway 7 km <$1 Trails 7 km $1 Natural Heritage Areas ~100ha - Total: $332 62

62 Annual Maintenance Requirements Asset Type Lincoln Alexander Parkway & Redhill Valley Project Asset Maintenance Requirement ($K) Winter Control $2,750 Roadway $480 Drainage $300 Traffic $110 Storm Water Management $124 Structures $164 Total $3,928 63

63 Sustainability Plan Recommendations An average annual O&M budget of $4 million (Road) An average annual O&M budget of $245,000 (Red Hill Valley); Average annual contribution to capital reserves of $6 (maximum life) to $10 million (minimum life) - based on the 100 year life-cycle; 64

64 New Assets: Impact of debt financing (Central Composting Facility) Millions $100 $90 TOTAL = $160M/25 yrs $80 $70 $60 $50 $40 $30 $20 Interest $19M Principal $35M O&M $83M Rehab $23M Repl. Reserve $0M (or $0M/yr) Need: $73M cash (or borrow + $21M interest) $10 $0 Year O&M Sherman-Dergis Formula Debt-Financing - Principal Debt-Financing - Interest Construction Inflation Future CCF DF - Interest 65

65 Benefits of PAYG (Central Composting Facility) Millions $80 $70 TOTAL = $195M/25 yrs $60 $50 $40 $30 $20 Interest $19M Principal $35M O&M $83M Rehab $23M Repl. Reserve $35M (or $1.4M/yr) Need: $0 $10 $ Year Reserve Contribution O&M Sherman-Dergis Formula Debt-Financing - Principal Debt-Financing - Interest Construction Inflation 66

66 The Tactical Planning Window What would we change or do different? We had the right team and support from Senior Mgmt Build Risk Management into the process earlier Bring total cost of ownership concept forward earlier Implement a ROW coordination system earlier 67

67 The Asset Management Plan STRATEGIC PLANNING Sustainable Asset Budget Forecast Management Life Cycle TACTICAL PLANNING Summary Budget 3 to 20 Years PROJECT PLANNING Detailed Operating and Capital Budget 1 to 3 Years 68

68 The Asset Management Plan The Project Planning Window Projects are defined Limits, Scope, Budget Projects are delivered for detailed design Implementation of key methodologies OPERATIONAL PLANNING Detailed Operating and Capital Budget 1 to 3 Years 69

69 Capital Delivery Program Based not Project Based Annual Expenditure: $50 M Roads $70M Sew / Wat Multi Year: Coordinated Program Driven 70

70 Local / Collector Rd. Methodology Provincial Surplus Funds : 157 LnKms 16 Neighbourhoods Cost of ($33.5 mill) Regular Resurfacing Method: Cost of ($56 mill) Savings - $22.5 mill 71

71 230km lined to date $59 mill spent Approx $150 mill Open Cut Replacement Less Community Disruption (green tech) Sewer Main Lining Program Implementation 72

72 The Project Planning Window What would we change or do different? The ROW approach has had great benefits We have implemented some key AM methodologies Bring more tactical analysis forward to project level Track key delivery metrics link to Tactical / Strategic Plan Link to Service Level - communicate to council 73

73 Asset Management is Service Management is Risk Management 74

74 QUESTIONS 75