HomeMy WebLinkAboutINS-11-082 - Corporate Asset Management Policy complete1
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REPORT T0: Community and Infrastructure Services Committee
DATE OF MEETING: November 28, 2011
SUBMITTED BY: Pauline Houston, Deputy CAO, Infrastructure Services
Department (ext 2646)
PREPARED BY: Hans N. Gross, P. Eng., Director of Asset Management
(519-741-2416)
WARD(S) INVOLVED: All
DATE OF REPORT: November 16, 2011
REPORT NO.: INS-11-082
SUBJECT: Corporate Asset Management Program Policy
RECOMMENDATION:
That the Corporate Asset Management Program Policy and Framework as outlined in and
attached to Report I NS 11-082 be approved.
EXECUTIVE SUMMARY:
The City of Kitchener has established a corporate asset management program as an outcome
of the Asset Management (AM} Service Delivery Strategy developed in late 2009. The asset
management program is a holistic approach to managing the City's assets, incorporating all
aspects of asset maintenance and service delivery. Some examples of assets include roads,
sewers, buildings, vehicles.
Asset management is the combination of management, financial, economic, engineering, and
other practices applied to physical assets with the objective of providing the required level of
service in the most cost-effective manner at an acceptable level of risk. It comprises all
elements needed for lifecycle asset management.
A solid Corporate Asset Management Program will ensure the availability and sustainability of
existing and future assets for the City of Kitchener.
BACKGROUND:
Capital asset management represents a core business function for the City of Kitchener given
the considerable number and value of assets that are owned and maintained by the municipal
government (almost 300,000 individual assets with a replacement cost of about $2.5 billion).
Despite a sizeable asset base, the approach to asset management is often informal, lacking
high-level corporate oversight and coordination.
The introduction of new tangible capital asset accounting standards has provided the City of
Kitchener a platform from which to launch leading edge systems to support asset management.
These systems will maintain the corporate asset inventory and also provide a corporate tool for
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decision support. These changes provide an opportunity to improve the coordination between
City departments to ensure that efficiencies resulting from new technology are maximized and
that decisions are made in the future to optimize the use of taxpayer/ratepayer funds for capital
investment.
In 2009, the City completed an Asset Management Service Delivery Strategy in consultation
with asset managers from across the City. The resolution passed by Council at the February 22,
2010 meeting stated:
"THAT the Asset Management Service Delivery Strategy as outlined in staff report FIN-10-026
be supported as the direction for the City of Kitchener's asset management program over the
next 3 to 5 years"
During 2010/2011, the City undertook and completed an Asset Management Gap Analysis. The
report identifies the City's asset groups, corporate business drivers, strengths and weaknesses.
The report also identifies improvement projects in preparation for the development of detailed
long term asset management plans. Several of the improvement projects are currently
underway.
REPORT:
Asset management is the combination of management, financial, economic, engineering, and
other practices applied to physical assets with the objective of providing the required level of
service in the most cost-effective manner at an acceptable level of risk. It comprises all
elements needed for lifecycle asset management.
The City of Kitchener Strategic Plan and the Infrastructure Services Department Business Plan
identify the Corporate Asset Management Program as one of the City's strategies to achieve its
operational and financial objectives. It is an integral component of the City's Long Term
Financial Plan.
The Asset Management Program resides within the City's Strategic Plan as part of Section 2 -
Effectiveand Efficient Government Priorities, namely Priority E2. The four strategic directions of
the Asset Management Program are Affordable Services, Dependable Services, Planned
Maintenance and Prioritized Funding. A description of each direction is contained within the
policy.
The major components of the program will include a corporate asset registry, corporate work
management systems, decision support models and asset management plans all of which are
described within the policy.
The policy applies to all staff using or managing tangible assets to provide services for the City.
The City's physical assets, which will benefit from the Asset Management Program, fall into one
of the twelve asset groups, namely;
Water Utility
Gas Utility
Wastewater (Sanitary) Utility
Stormwater Utility
• Parking Enterprise (parking lots & parking structures)
Golfing Enterprise (golf courses & club houses)
• Fleet
• Facilities (civic, maintenance, fire, community centres, arenas, museums)
• Roads (pavement, sidewalk, bridges, culverts, traffic signs, lighting}
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• Parks (sportsfields, playgrounds, pedestrian bridges, pathways, trails)
• Forestry (street trees, natural areas, active parkland}
• Cemeteries
ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
The Asset Management Program resides within the City's Strategic Plan as part of Section 2 -
Effectiveand Efficient Government Priorities, namely Priority E2.
FINANCIAL IMPLICATIONS:
None
ACKNOWLEDGED BY: Pauline Houston, Deputy CAO Infrastructure Services (519-741-2646)
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COUNCIL POLICY RESOLUTION
POLICY NUMBER: DATE:
POLICY TYPE: FINANCIAL
SUBJECT: CORPORATE ASSET MANAGEMENT PROGRAM POLICY
PURPOSE:
To outline the Corporation's position with regard to Asset Management including
roles and responsibilities related to Asset Management.
POLICY STATEMENT(S):
The City of Kitchener Strategic Plan and the Infrastructure Services Department
Business Plan identify the Corporate Asset Management Program as one of the
City's strategies to achieve its operational and financial objectives. It is an
integral component of the City's Long Term Financial Plan.
The City will promote the use of asset management principles and practices in all
City departments.
The program will assist departments to optimize processes for the creation,
operation, maintenance, renewal and disposal of assets.
The program will promote the provision of services at a level that balances
customer expectations with cost and business risk.
POLICY
1. Definitions:
"Asset Management" - is a combination of management, financial, economic,
engineering and other practices applied to physical assets with the objective of
providing the required level of service in the most cost-effective manner at an
acceptable level of risk. It involves decision-making and actions throughout the
lifecycle of physical assets.
"Corporate Asset Management" -the application of asset management
practices on a corporate level to maximize consistency among the diverse asset
groups. Corporate asset management creates efficiency by harmonizing service
levels and business processes wherever possible.
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"Asset Management Plans" -asset specific plans which are regularly updated
to develop strategies and implement actions in order to achieve objectives and
targets. Asset Management Plans will provide an understanding of:
• The extent of the City's asset inventory
• Condition of each asset in the inventory
• Existing and desired service levels
• Demands on the assets
• Financial commitments needed to operate, maintain, rehabilitate, upgrade
and replace assets
• Policies and programs needed to be sustainable
• Public and business risk of asset failure
"Lifecycle" -the cycle of activities that an asset goes through while it retains an
identity as an asset.
"Lifecycle Cost" -the total cost of an asset throughout its life including
planning, design, construction, acquisition, operation, maintenance,
rehabilitation, renewal and disposal costs.
"Physical Asset or Tangible Capital Asset" -has the following features:
• It is physical in nature
• It has a value
• It enables services to be provided
• It is subject to lifecycle costing
• It has an economic life greater than three (3) years
2. City Strategic Plan Priorities and Directions
The Asset Management Program resides within the City's Strategic Plan as part
of Section 2 -Effective and Efficient Government Priorities, namely Priority E2.
E2. Asset Management-A solid Corporate Asset Management program
ensures the availability and sustainability of existing and future assets forthe City
of Kitchener. The four strategic directions of the Asset management Program
are:
E2.1 Affordable Services. Link the operating and capital funding levels to the
required levels of service and corporate goals for each asset type with a view to
providing the flexibility to respond to changing conditions.
E2.2 Dependable Services. Set priorities for asset rehabilitation and
replacement based on a combination of the business risk exposure and
appropriate treatment strategies.
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E2.3 Planned Maintenance. Develop advanced Asset Management Plans
comprising long range funding requirements for both the existing and future asset
inventories.
E2.4 Prioritized Funding. Link the Asset Management Plans to the City's
Strategic Direction for Financial Management.
3. Corporate Asset Management Program
A) The major components of the program will include a corporate asset
registry, corporate work management systems, decision support models
and asset management plans.
Asset Registry -The asset registry will maintain an inventory of the City's
tangible capital assets including their value, performance characteristics,
maintenance history and estimated remaining life.
Corporate Work Mana.. ement Systems -The systems will track workflow from
service request to task completion and integrate existing major information
systems to track asset performance over time and improve quality and reliability
of data in the asset registry.
Asset Management Plans -Asset Management Plans will be developed within
departments for groups of assets specific to those departments. The plans will
leverage the data in the registry and known best practices to identify and
implement improvements in business processes in order to balance a level of
service that meets customer expectations with the costs and risks associated
with providing the service.
B) The objectives of the Corporate Asset Management Program are:
1. Establish and maintain a record of the value and lifecycleldepreciation of all
tangible assets owned by the City.
2. Review, on an on-going basis, business processes related to asset acquisition,
asset maintenance, asset disposition and service provision. Establish a set of
corporate standards to promote consistency in how assets are managed.
3. Modify current business processes where justified to improve operational
effectiveness and efficiency.
4. Ensure all legislative requirements and regulatory standards are met.
5. Support the development and improvement of decision-making tools that
promote doing the right thing to the right asset at the right time.
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6. The development of enhanced communication tools to illustrate complex
concepts in plain language.
7. Achieve continuous improvement in asset management process through
ongoing improvements to data quality to provide increased forecast reliability.
4. Scope and Application
This policy applies to all staff using or managing tangible assets to provide
services for the City.
The City's physical assets, which will benefit from the Asset Management
Program, fall into one of the twelve following groups.
Each group has been assigned an asset owner and an asset steward(s).
• Water Utility
• Gas Utility
• Wastewater (Sanitary) Utility
• Stormwater Utility
• Parking Enterprise (parking lots & parking structures)
• Golfing Enterprise (golf courses & club houses )
• Fleet
• Facilities (civic, maintenance, fire, community centres, arenas, museums
• Roads (pavement, sidewalk, bridges, culverts, traffic signs, lighting }
• Parks (sports fields, playgrounds, pedestrian bridges, pathways, trails )
• Forestry (street trees, natural areas, active parkland }
• Cemeteries
5. Roles and Responsibilities
Following is the governance framework for the Corporate Asset Management
Program.
CITY COUNCIL
CORPORATE LEADERSHIP TEAM
CORPORATE ASSET MANAGEMENT SPONSOR
(Deputy CAO, Infrastructure Services)
ASSET MANAGEMENT STEERING COMMITTEE
(Chair, Asset Owners, IT rep, Finance rep, Cityworks PM}
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DIRECTOR OF ASSET MANAGEMENT
(Chair of the Steering Committee)
ASSET MANAGEMENT STEWARDS/MANAGERS
(12 Groups)
Council -approves asset management policies and asset funding allocation
through the annual corporate budget process.
Corporate Leadership Team -provides corporate oversight to the program to
ensure that the goal and directions of the program are maintained and that the
program remains consistent with the overall corporate Strategic Plan.
Deputy CAO, Infrastructure Services - is the executive sponsor of the Asset
Management program providing overall leadership to the program and reporting
on the program to the Corporate Leadership Team.
Asset Management Steering Committee -will maintain the momentum of the
Asset Management Program. The Committee will provide direction, set priorities,
approve work programs and allocate resources.
Asset Owners -are Directors with accountability over one or more of the 12
asset groups. Asset Owners are responsible for the assets themselves, as well
as the service delivery programs associated with the assets.
Director of Asset Management-chairs the Asset Management Steering
Committee and will develop work programs, project lists, project timelines,
resource allocation and project budgets towards achieving the directions, goals
and objectives outlined in the Corporate Asset Management Program Policy
document.
Asset Stewards/Managers -are responsible for the management of the asset
registry to which they are assigned. The responsibilities extend to all of the
improvement projects that impact on the sustainability of their assets.
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