HomeMy WebLinkAboutFCS-12-197 - Municipal Infrastrucutre Investment Initiative (MIREPORT TO:Finance and Corporate Services Committee
DATE OF MEETING:
December 10, 2012
SUBMITTED BY:Dan Chapman, Deputy CAO
PREPARED BY:
Ryan Hagey, Director of Financial Planning
Hans Gross, Director of Asset Management
WARD(S) INVOLVED:
All
DATE OF REPORT:
December 4, 2012
REPORT NO.:
FCS-12-197
SUBJECT:
Municipal Infrastructure Investment Initiative (MIII) Pre-
Screening Grant Application
RECOMMENDATION:
THAT the information in the Expression of Interest, attached to report FCS-12-197, regarding
the Bridgeport Neighbourhood Secondary Feed Watermain be certified as factually correct;
AND FURTHER THAT it hereby be confirmed that the City of Kitchener is committed to
developing a comprehensive asset management plan that includes all of the information and
analysis described in the Ministry of Infrastructure’s Building Together: Guide for Municipal
Asset Management Plans by December 31, 2013.
BACKGROUND:
On August 16, 2012, the Province of Ontario launched the Municipal Infrastructure Investment
Initiative (MIII) as part of the Municipal Infrastructure Strategy. Through the MIII Capital
Program, up to $51M will be made available in 2013-2014 and 2014-2015 to address necessary
road, bridge, water and wastewater projects identified as top priorities through comprehensive
asset management plans. The share of provincial funding that may be requested is flexible, up
to a maximum of 90% of total project costs or $2M, whichever is lower. Funding will be targeted
to municipalities and Local Service Boards (LSBs) that are unable to pay for proposed projects
without provincial assistance.
The MIII Capital Program includes both a pre-screening and application process. To begin,
municipalities and LSBs must submit an Expression of Interest (EOI) form for pre-screening.
Completed EOIs must be submitted by January 9, 2013. Municipalities and LSBs that pass the
pre-screening process will be given the opportunity to submit a detailed application.
Eligible project costs include environmental assessment costs, design/engineering costs, project
management costs, materials, construction, and contingency costs (maximum 15%). The
project must be completed and all costs must be incurred by December 31, 2014
This report recommends the highest priority project that qualifies for the MIII program as
identified in the Province’s materials.
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REPORT:
In an effort to begin to address the ongoing infrastructure deficit, the Province of Ontario
announced the MIII capital program which will provide an investment of $51M into Ontario
infrastructure over the next two years. Under the MIII program, municipalities can apply for
funding of a single project that is in one of the four categories identified (roads, bridges, water
systems, and wastewater systems).
In preparing recommendations for this report, staff reviewed the guidelines provided regarding
MIII and have proposed a watermain project that is believed to best fit the criteria outlined in the
provincial materials. The three MIII pre-screening objectives and how the proposed project
qualifies are summarized in the table below:
CriteriaPre-Screening Project Qualifications
Objective
AssetCommitment Asset management plans will be developed for water
Management to/progress toward mains before the December 31, 2013 deadline.
Planningcomprehensive asset
management planning
Criticality of Preliminary evidence of Watermain is located under the river and is the only
Projecthealth and/or safety existing water source for approximately 700 residences
problemand 75 businesses. If the watermain were to break, it
could potentially take months to repair, at which time
affected properties would have limited fire coverage and
would be under a boil-water advisory.
FiscalApplicant’s general Kitchener has high debt levels and low reserve levels,
Situationfiscal circumstancesand therefore needs additional funding to complete this
work. The City’s Accelerated Infrastructure
Replacement Program has been in place since 2004,
and is over 41km or $126M short of expected
replacement schedule for Water and Sanitary combined.
The recommendations of this report take into account staff’s analysis and reflect the wording
required by the province, as set out in section 10 of the EOI document.
ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
Foundation: Efficient and Effective Government
Goal: Financial Management
Strategic Direction: Strive for competitive, rational and affordable taxation levels
Under a grant program such as the MIII, the City of Kitchener is able to leverage City funding to
do more work than if the City were required to completely fund the project on its own.
FINANCIAL IMPLICATIONS:
The maximum amount that can be applied for is 90% of the total project cost (up to $2M).
Given the City’s debt load and state of reserve funds, staff have recommended applying for the
maximum grant possible, which would limit the impact to be funded through the Water rate.
Based on a project cost of $653,200, this would mean that $65,320 of funding would be required
in excess of the proposed budget from the Water utility in 2013.
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COMMUNITY ENGAGEMENT:
Not applicable.
ACKNOWLEDGED BY:
Dan Chapman, Deputy CAO (Finance and Corporate Services)
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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 for the 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 Management 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 lifecycle/depreciation 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.
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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.
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)
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ASSET MANAGEMENT STEERING COMMITTEE
(Chair, Asset Owners, IT rep, Finance rep, Cityworks PM)
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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