HomeMy WebLinkAboutINS-17-036 - Asset Management and Water Infrastructure Program
REPORT TO:Mayor and Members of Council
DATE OF MEETING:May 15, 2017
SUBMITTED BY: Cynthia Fletcher, Interim Executive Director, INS - (741-2200
x4424)
Justin Readman, Interim Executive Director, INS – (741-2200
x7646)
PREPARED BY:Denise McGoldrick, Director of Operations – Env. Services
(741-2600 x4657)
Jason Winter, Director Asset Management (741-2600 x4630)
Alicia Bennett, Business Analyst, Infrastructure Services (741-
2600 x4423)
WARD(S) INVOLVED:All
DATE OF REPORT:April 26, 2017
REPORT NO.:INS-17-036
SUBJECT:Asset Management and the Water Infrastructure Program
___________________________________________________________________________
RECOMMENDATIONS:
For discussion.
BACKGROUND:
The State of the Infrastructure report was presented to Council in August 2015 and
outlined a plan to replace all water related infrastructure (water, sanitary, stormwater)
greater than 80 years by 2032.
Through the 2017 budget process, staff heard two key feedback themes from Council:
a need to provide a clearer understanding of the rates and variables which
influence rate recommendations
concernsregarding the current rate projections and the impact on long term
affordability to our customers.
In response to the feedback, staff committed to providing Council with more information
and options to consider prior to the 2018 budget process.
The purpose of this Council Strategic Session is to:
provide an overview ofand requirements for a comprehensive asset
managementprogram;
provide information related to the Water Infrastructure Program (WIP), an
initiativewhich incorporates the former Accelerated Infrastructure Program
*** This information is available in accessible formats upon request. ***
Please call 519-741-2345 or TTY 1-866-969-9994 for assistance.
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(AIRP)and is intended to respond to Council’s request for more information and
options prior to the 2018 budget process;
Staff areseeking feedback from Council on the variables to be considered in the
Water Infrastructure Program to developrate options.
REPORT:
Asset Management
Applying asset management principles to infrastructureensures that operational and
management practices are optimized to get the most out of the investment over the
asset’s useful life. The city is legislated by the Province of Ontario’s Infrastructure for
Jobs & Prosperity Act, 2015to create and maintain thoroughasset management plans
for all infrastructure by 2022. The most consistent and cost effective asset management
strategies include a data-driven, risk-based approach that combines long-range
financial planningand effective maintenance activities.
The drinking water, sanitary sewer and stormwater systems are infrastructure that
deliveressential services such as a reliable supply of drinking water, sanitary sewer
collection, protection of our source water, and reduced risk from weather-related
incidents like flooding. These services provide thebackbone for the high quality of life
that City of Kitchener residents enjoy. A decrease in service levels can significantly
impact on quality of life, life safety systems, and enjoyment of property.
Recognizing the importance of having a plan to forecast replacement needs of this
infrastructure, the Accelerated Infrastructure Replacement Program (AIRP) was
implemented in 2002 and planned to run until 2032. The programs’ intent has been to
accelerate the replacement of all infrastructure within the City’s rights-of-way (e.g.
water, sanitary, storm water, pavement and sidewalks) that combined, is beyond its
serviceable life (estimated at 80 years). The goal has been to provide physical and
financial sustainability to this infrastructure across the City.During this 30 year program,
the plan identified the need to replace 260 km of water, sewer and stormwater pipes.
Since 2002, there has been an increase in growth of assets and heightened regulatory
requirements for drinking water, wastewater and stormwater systems.In addition, asset
management practices havematured to a point of being able to collect quality condition
data and understanding the cause and effect of maintenance activities as they relate to
the overall condition of the infrastructure.
Water Infrastructure Program
The water, sanitary sewer and stormwater utility budgets(operating and capital)are
currentlyresponsible for:
•maintaining 893km of watermains, 827 km of sanitary sewers, 614 km of storm
sewers and 23 pumping stations;
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•removal of sediment, as necessary, from our 142stormwater ponds in order to
reduce flood risks in the community and to improve the quality of water run-off to
our creeks, rivers and lakes;
•rehabilitatingour creeks to manage the risk offlooding, protect propertyand
improve water quality for aquatic lifeand as a source of drinking water;
•replacingapproximately 8 km of water main, 7 km of sanitary sewer, and 5 km of
stormwater pipesin 2017 at an estimated cost of $25M,to replace infrastructure
that is at the end of its useful life and no longer providing acceptable service
levels; and
•fundingRegion wholesale water and wastewater charges to provide drinking
water supply and treatment and wastewater treatment for the residents of
Kitchener.
The Water Infrastructure Program project was initiated in spring 2017 to review the
AIRP and maintenance programs, as well as, evaluate other variables that influence the
water, sanitary sewer and stormwater rates.
The anticipated deliverables of the Water Infrastructure Program:
Review of other municipalities’practices
Provide rate options based on review of variables and guiding principles
(September 2017)
Develop a framework for WIP futurereview and updates
Communication Plan
Communications &Feedback
Communication efforts were madeduring the 2017 budget process and subsequent first
billing cycle for ratesto assist ratepayers in understanding what the key rate increase
drivers were. In addition these efforts identified needs associated with infrastructure
renewal and maintenance. A summary of the communication toolsusedare provided
in Table 1.
Table 1: Summary of Communication Tools
Communication MethodTimingPotential Reach
Bill insertsNovember & February 70,000+ each time
Newspaper advertisementFebruary60,000 +
Social Media January -March267,000 impressions
(YouTube, Facebook, Twitter)54,000 views, 18 comments
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Feedback was tracked through thebudget survey, social media comments, and direct
contact through phone oremail and based on the feedback key themes emerged.
These included:
Affordability concerns
Lack of understanding on what is driving rates (e.g. LRT comments)
Support for infrastructure investment
In order to better understand Kitchener residents’ awareness and attitudes towards rate
increases and infrastructure investment, a statistically valid, representative survey of
600 households was conductedin April 2017. Survey results are provided in Appendix
Aand summarized as follows:
More than seven in ten Kitchener residents are satisfied with the reliability of their
water, sewer, stormwater services and approximately two thirds are happy with
the quality of their drinking water.
Approximately one-half of residents (47%) are aware the City of Kitchener has a
plan to maintain and replace water-related infrastructure.
When asked to express a preference for managing the City’s water-related
infrastructure or keeping rates as low as possible, residents are more likely to opt
for maintaining and replacing infrastructure.
When asked how concerned they are ofexperiencing a service issue in the
future, four in ten (39%) report that they are very or somewhat concerned.
The feedback received is helpful to understand resident priorities related to the Water
Infrastructure Programandconfirmguiding principles to provide an evaluation lens for
various WIP options. The survey outcomes alsoidentified the need to focus
communication efforts around demonstrating the value for the cost of water-related
services and communicatingwhy rate increases are required and how the money will be
invested.
Guiding Principles
To assist in the development and evaluation of infrastructure investment options and
associated rate forecast the following guiding principles outlined in Figure1are
proposed.
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Legislative
Ensure regulatory requirements are met or exceeded.
Compliance
Consider the likelihood of infrastructure failure and the financial and
Risk Based
Approach
service delivery impact.
Ensure we are able to deliver consistent, quality service to customers
Sustainability
today and into the future.
Affordability Water Infrastructure program will consider customers’ ability to pay.
Information about the Water Infrastructure Program (including what
Transparency makes up water utility rates and any rate changes) is clearly
communicated to customers.
Figure 1: Summary of Water Infrastructure Program Guiding Principles
Water Infrastructure Program Variables
A review of the key variables that influence the capital and maintenance program and
overall rate forecast was conducted and are summarized in Figure 2 above.
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Capital
Project Estimation
Estimated lifeof
assets
Grant Inflationary
opportunitiesGrowth factor
forecasts
Maintenance
Asset sale
Climate Change
Impacts
Customer financial
assistance
Maintenance
Rates
Debt tolerance
program
Reserve levels
Figure 2: Capital, Maintenance and Rate variables to be considered
Feedback Requested by Council:
At the May 15, 2017 Strategic Session, staff are seekingfeedbackfrom Councilon the
variables identified.
Council Questions:
1.Are there any variablesmissing or should any variablesbe removed?
2.What are thetop three variables that you feel are most important to consider?
3.Is there anything that stands from the guiding principles or resident feedback?
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Next Steps:
Following feedback from Council at the Strategic Session, staff will be developing and
evaluating options and associated rate impacts for the Water Infrastructure Program
and will report back to the Finance and Strategic Planning Committee on September 11,
2017 with recommendations. Council’s decision at the September 11committee
meeting will guide the 2018 budget discussions.
ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
Strategic Priority:Sustainable Environment and Infrastructure
Strategy:
4.5 Strengthen the capability and capacity within the organization to manage all of
the city’s assets so that they are affordable, dependable and sustainable in the
long-term.
4.6 Improve the City of Kitchener’s ability to leverage funding opportunities for the
development and renewal of infrastructure through federal or provincial programs
and other partnerships
Strategic Actions:
•Work towards developing asset management plans for all asset categories
enabled by organizational structure and business processes.
•Explore options to accelerate capital funding for the renewal of roads, water and
sewer infrastructure.
FINANCIAL IMPLICATIONS:
No financial implications at this time.
COMMUNITY ENGAGEMENT:
INFORM – A copy of this report will be posted to the City’s Council agenda webpage.
ACKNOWLEDGED BY:
Cynthia Fletcher, Interim Executive Director, Infrastructure Services
Justin Readman, Interim Executive Director, Infrastructure Services
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CITY OF KITCHENER | WATER INFRASTRUCTURE PROGRAM RESIDENT SURV
TOPLINE REPORT
Water Infrastructure Program Resident Survey CITY OF KITCHENER APRIL 13, 2017
2.a. - 8
2
EY |
and
th
for each of
quotas
4.0%. The margin of
-
Number of Interviews 186207207
to conduct a survey of
selected and representative sample
-
Environics
populations surveyed.
-
of the City:
CITY OF KITCHENER | WATER INFRASTRUCTURE PROGRAM RESIDENT SURV
FSAs N2A, N2B, N2HN2N, N2M, N2GN2E, N2C, N2R, N2P
areas
, 2017.
th
AreaNortheastNorthwestSouth
The City of Kitchener engaged Kitchener residents using a telephone methodology between April 511Survey results are from a randomlyof adults living in Kitchener. The sample frame included
quotas forregion, gender and cell phone penetration.A total of 600 interviews were completed, including the following three The margin of error for a sample of n=600 is +/error is higher
among the sub
INTRODUCTION AND METHODOLOGY
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3
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70%
,
bill
services. Do
Yes, personally pay
stormwater
CITY OF KITCHENER | WATER INFRASTRUCTURE PROGRAM RESIDENT SURV
15%
,
not pay bill
,
No, household does
14%
month, households receive a bill that shows what they pay for water, sewer and
Each
.
household pays bill
Yes, someone else in
BILL PAYMENT Qyou, or does someone else in your household, pay this bill?
More than eight in ten Kitchener residents are responsible for paying their own household water bills
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4
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Mean Score 4.364.063.993.79
2*
-
Top 84%74%70%67%
2%
2%
3%
4%
2%
2%
8%
6%
5%
5%
6%
10%
8%
10%
17%
28%
15%
26%
Neutral (3)(Unsure)
31%
32%
56%
CITY OF KITCHENER | WATER INFRASTRUCTURE PROGRAM RESIDENT SURV
48%
Somewhat satisfied (4)Not at all satisfied (1)
39%
35%
service
Very satisfied (5)Not very satisfied (2)
water
2 includes those who are very/somewhat satisfied
-
I
.
Reliability of stormwater
SATISFACTION WITH UTILITY SERVICES Qstormwatervery satisfied*Top
Majorities of Kitchener residents are satisfied with the reliability of their water utility services, with satisfaction lowest on the quality of household drinking water
Reliability of sewer service
Reliability of drinking water
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Quality of household drinking
5
EY |
2*
-
Top48%
15%
36%
Poor
Fair
40%
bill?
CITY OF KITCHENER | WATER INFRASTRUCTURE PROGRAM RESIDENT SURV
Good
stormwater
9%
Excellent
, would you say that you receive excellent, good, fair or poor value for the amount your household pays on
Value for money
2 includes those who say they receive excellent or good value
-
Overall
PERCEIVED VALUE FOR MONEY
Nearly one half of Kitchener residents (48%) feel they receive at least good value for what they spend on their water utility bill Q.your combined water, sewer and *Top
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6
EY |
10%
(Unsure)
2%
little/a lot
Decreased a
service in the past three years, would you say
6%
Stayed the same
stormwater
42%
CITY OF KITCHENER | WATER INFRASTRUCTURE PROGRAM RESIDENT SURV
Increased a little
40%
Increased a lot
about what you pay for water, sewer and
Thinking
.
VIEWS REGARDING RATE INCREASES Q
Four in five Kitchener residents who pay their utility bills believe water/sewer rates have increased, with half of these saying their
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7
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infrastructure? This includes
47%
,
stormwater
Yes
20%
20%
20%
No
Yes
related infrastructure
(Unsure)
-
53%
CITY OF KITCHENER | WATER INFRASTRUCTURE PROGRAM RESIDENT SURV
,
No
Are
.
Qunderground pipes as well as water mains, sewer mains and flood control improvements.
Slightly fewer than half of Kitchener residents are aware of the
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8
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51%
2%
25%
22%
CITY OF KITCHENER | WATER INFRASTRUCTURE PROGRAM RESIDENT SURV
of the following would you say should be the most important priority for the City of Kitchener?
Maintain/replace existing infrastructureKeep rates as low as possible(Both are equally important)Other/Unsure
Which
.
Q
PREFERRED INFRASTRUCTURE PRIORITY
One half of Kitchener residents prioritize infrastructure replacement, with one quarter preferring to keep rates as low as possible and one in five asking the City to address both priorities
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2%
Unsure
even if it means
-
3%
Other
5%
Neither
CITY OF KITCHENER | WATER INFRASTRUCTURE PROGRAM RESIDENT SURV
while one in ten advocate for extending the
13%
costs
past its expected
higher maintenance
lifespan, even if this
The City should delay
service disruptions and
replacing infrastructure
means increased risk of
now
of the following two options comes closest to your view?
77%
Which
paying higher rates
once they reach the
life, even if it means
should replace items
.
The City of Kitchener
end of their expected
Q
INFRASTRUCTURE MANAGEMENT PREFERENCE
Three quarters of Kitchener residents believe the City should replace infrastructure at the end of its lifespan paying higher rates replacement of infrastructure for as long as possible
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10
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services in the past two years?
stormwater
21%
,
,
Yes
1%
service in the past two years
(Unsure)
78%
,
CITY OF KITCHENER | WATER INFRASTRUCTURE PROGRAM RESIDENT SURV
No
stormwater
you experienced an issue with your household water, sewer or
Q. Have
INCIDENCE OF SERVICE DISRUPTION
One in five residents have experienced some issue with their water, sewer or
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11
EY |
2*
-
Top39%
22%
39%
Somewhat concernedNot at all concerned
CITY OF KITCHENER | WATER INFRASTRUCTURE PROGRAM RESIDENT SURV
29%
Very concernedNot very concerned
10%
concerned are you that your household will experience any issues with these services in the future? Are
2 includes those who are very/somewhat concerned
-
How
.
CONCERN ABOUT FUTURE SERVICE ISSUES
Four in ten Kitchener residents express some level of concern about experiencing problems with their water services, with one in ten very concerned about this happening in the future.Q*Top
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55+
28%
*Refused: 11%
44
-
35
34%
10 to 40 years old41 to 75 years
OwnRent/Other
75+ yearsUnsure
Less than 10 years
34
-
18
26%
AGE OF THE HOME8%52% 29% 8% 3%
HOME OWNERSHIP79% 21%
AGE DISTRIBUTION*
%
51
GENDER
%
49
CITY OF KITCHENER | WATER INFRASTRUCTURE PROGRAM RESIDENT SURV
31%
Northeast:
34%
South:
34%
Area
Northwest:
WEIGHTED RESPONDENT DEMOGRAPHICS
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CITY OF KITCHENER | WATER INFRASTRUCTURE PROGRAM RESIDENT SURV
Curtis Brown
SENIOR RESEARCH ASSOCIATE416.969.2747Curtis.Brown@environics.ca
CONTACT US
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