THE FEDERAL GAS TAX FUND

THE FEDERAL GAS TAX FUND Program Update Eastern Ontario Treasurers Association December 2016

ALL ABOUT THE FEDERAL GAS TAX FUND Page 2

FEDERAL GAS TAX FUND WHICH INFRASTRUCTURE PROJECT CATEGORY IS NOT ELIGIBLE? A. Local roads and bridges B. Protection services C. Wastewater services D. Recreation services E. Brownfield redevelopment 0% 0% 0% 0% 0% A. B. C. D. E. 3

WHERE GT FUNDS HAVE BEEN INVESTED? $5B transferred to 443 municipalities during 2005-2015 $4.3B invested in 6,700 eligible projects 2015 Gas Tax Investment in Major Eligible Project Categories Local Roads and Bridges Public Transit Wastewater Solid Waste Community Energy Systems Drinking Water Capacity Building Recreation Culture Brownfield Redevelopment Disaster Mitigation Regional and Local Airports Sport Tourism Broadband Connectivity Short-Line Rail Short-Sea Shipping $44.27 $22.71 $19.67 $13.06 $7.59 $4.81 $0.90 $0.57 $0.20 $0.18 $0.03 $0.02 $0.02 $0.00 $0.00 $116.17 $355.46 In 2015, $586 million was invested into 1,200 infrastructure, community energy and capacity building projects Payments increased by 5% in 2016! $0 $100 $200 $300 $400 Millions Page 4

MUNICIPALITIES MAY USE THE GAS TAX FUNDS: A. Towards the full cost of an eligible project B. To support an eligible project that benefits from other funding sources C. To save for and/or invest in future eligible projects D. To finance long-term debt for eligible projects E. To develop and implement asset management plans F. All of the above 17% 17% 17% 17% 17% 17% A. B. C. D. E. F. 5

FEDERAL GAS TAX FUND DOES YOUR MUNICIPALITY HAVE AN INVESTMENT POLICY? A. Yes B. No C. Not sure 0% 0% 0% A. B. C. 6

A. Yes B. No FEDERAL GAS TAX FUND ARE YOU FAMILIAR WITH THE TERMS INCREMENTALITY AND BASE AMOUNT? 0% 0% A. B. 7

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FEDERAL GAS TAX FUND ARE YOU AWARE OF AMO S GAS TAX COMMUNITY SITE? A. Yes B. No Treasurer is provided with login to the Gas Tax Reporting website 0% 0% A. B. 9

INTERACTIVE MAPPING TOOL OF PROJECTS WWW.GASTAXATWORK.CA 10

DEMONSTRATING PROJECT OUTCOMES Funds can be invested in 15 different infrastructure categories, community energy systems, or capacity building projects New national performance framework introduced in 2014 Focus of the program broadened from environmental outcomes to increase productivity and economic growth, and strengthen cities and communities Clean Environment Productivity & Economic Growth Strong Cities & Communities Community Energy Systems Local Roads and Bridges Disaster Mitigation Drinking Water Public Transit Recreational Wastewater Local and Regional Airports Cultural Solid Waste Broadband Connectivity Tourism Brownfield Redevelopment Short Sea Shipping / Short-Line Rail Sport Page 11

DEMONSTRATING PROJECT OUTCOMES The Agreement requires municipalities to report on how each completed project is supporting progress towards achieving: a) Beneficial impacts on communities; and b) Enhanced impact of funds as predictable source of funding Report on relevant project scope (output) and impact (at least one outcome) for 2014-2016 projects from drop down list Direct Control Direct Influence Indirect Influence Inputs Activities Outputs Immediate Outcomes Intermediate Outcomes Final Outcomes what we invest what we do what we produce what we are trying to achieve 12

WHICH IS AN OUTCOME INDICATOR? Kingston s Road Rehabilitation - Baxter St, Sproule St, etc. A. 16 km resurfaced road B. $640,000 invested C. Pavement repairs D. Change in length of resurfaced road rated as good or above E. None of the above 0% 0% 0% 0% 0% A. B. C. D. E. 13

WHICH IS AN IMMEDIATE OUTCOME INDICATOR? Clarence-Rockland's Marion Storm Sewer Replacement A. Sanitary sewer replacements B. Clean environment C. Number of residents with access to rehabilitated sanitary sewers D. Total number of sanitary sewer backups E. 170 meters of replaced storm sewer 0% 0% 0% 0% 0% A. B. C. D. E. 14

MEASURING AND COMMUNICATING PROJECT RESULTS Updates to the on-line federal Gas Tax reporting tool Streamlining project reporting results requirement Less number and more clarity on measures New measures were developed through consultation with municipalities and the Province Streamlining communication requirement Help to build awareness of your GT Fund success stories Improving project descriptions showcasing your municipality Page 15

INFRASTRUCTURE IN MY COMMUNITY: GANANOQUE Page 16

SMOOTH ROADS IN PRESCOTT Page 17

FEDERAL GAS TAX FUND WHAT BEST DESCRIBES YOUR ASSET MANAGEMENT PLAN? A. Our Plan includes all infrastructure categories B. Our Plan only includes core infrastructure (e.g. transportation, environmental services) C. We don t have an AMP 0% 0% 0% A. B. C. 18

FEDERAL GAS TAX FUND DO YOU KNOW THE REPLACEMENT COST OF YOUR ASSETS? A. Yes, for all assets B. Yes, but for just some assets C. No, we don t know the replacement costs for most of our assets 0% 0% 0% A. B. C. 19

FEDERAL GAS TAX FUND HOW IS REPLACEMENT COST DETERMINED? A. Inflating historical costs B. Engineering estimates C. Combination of A and B 0% 0% 0% A. B. C. 20

ASSET MANAGEMENT PLAN REQUIREMENT Municipalities develop and implement an asset management plan by December 31, 2016 Over 95% of municipalities already have an asset management plan that captures core infrastructure Improve existing plans to include all infrastructure (tangible capital assets) eligible for Gas Tax funding If you own infrastructure in any eligible category, it should be included in your plan irrespective of whether you invest Gas Tax funds in that category Adhere to the guidelines set out in Ontario s Building Together: Guide for Asset Management Plans Must demonstrate progress to AMO Page 21

CAPACITY BUILDING CATEGORY Gas Tax funds can be used to develop and implement asset management plans Eligible asset management expenditures include: Software acquisition and implementation Condition assessments Staff training Other long-term infrastructure plans Page 22

ASSET MANAGEMENT OUTCOMES REQUIREMENT Municipalities are: Required to report on asset management outcomes Expected to identify and address priority projects using asset management plan AMO is required to: Track and report municipal sector s progress on asset management to Canada Which indicators do municipalities report on to demonstrate progress? Page 23

DEVELOPING ASSET MANAGEMENT OUTCOMES Roads and Bridges Study: 93 municipalities: combination of financial and condition data One-third of the assets were in poor to very poor condition Assets with condition data were performing better than what their age data suggests Research on Capital Investment and Financial Sustainability: Develop long-term financial strategies which will help municipalities implement their asset management plans Survey municipalities with contrasting fiscal challenges on topics like capital investment needs, reserve contributions, debt, etc. Report to be completed by Spring 2017 Page 24

ASSET MANAGEMENT OUTCOMES WORKING GROUP Proposed Asset Management Outcomes focused on 5 themes: Inclusion of more municipal infrastructure assets Better linkages between service levels and asset management Whether current service levels are monitored Whether target service levels are being met or not Improving data used to inform asset management plans More condition data Small municipalities can use a risk based approach Embedding asset management within municipal operations Whether priority projects identified in AMP are part of municipal capital budget Effectiveness of financial strategies Page 25

ASSET MANAGEMENT OUTCOME REQUIREMENT Starting with 2016 Gas Tax Reporting Cycle: Municipalities will annually report to AMO the percentage of infrastructure assets they own that are included in their asset management plan Percentage calculated as: Replacement cost of tangible capital assets included in asset management plan as a percentage of total replacement costs of all tangible capital assets reported in Schedule 51 of the Financial Information Return (FIR) Remaining outcomes will be reviewed and implemented after the potential asset management regulation under Bill 6 will come into effect Infrastructure for Job and Prosperity Act, 2015 Page 26

ASSET MANAGEMENT: A ROADMAP FOR THE FUTURE OF OUR COMMUNITIES Page 27

MUNICIPAL ACTION PLAN Understanding terms and requirements of the Gas Tax Agreement When in doubt contact us at gastax@amo.on.ca 2015 Compliance Audit identified concerns with: Awareness on incrementality requirement and process in place for annual monitoring of Base Amount Procurement by-law, record retention by-law, investment policy Sample policies are available Gas Tax funds not tracked separately Must earn interest on unspent funds Risk management questionnaire Continue to work on refining asset management plans Ensure required data is available for demonstrating results for all projects completed during 2014 2016 Page 28

QUESTIONS??? Eastern Ontario Treasurers Association EMAIL: GASTAX@AMO.ON.CA