ASSET MANAGEMENT Federation of Canadian Municipalities Gerry Davis, CMA Director of Capital Planning

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ASSET MANAGEMENTFederation of Canadian
MunicipalitiesGerry Davis, CMADirector of
Capital Planning ImplementationPublic Works
DepartmentCity of HamiltonFebruary 3, 2006
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The City of Hamilton
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The City of Hamilton

• 7 Municipalities Amalgamated (2001)
• Population 500,000
• 6100 Lane Kms / 14,000 Segments
• 2100 Kms WMs / 32,000 Segments
• 2500 Kms SMs / 40,000 Segments
• 700 Facilities
• 5520 Acres of Parkland / 430 Outdoor Facilities
• Fleet/Transit
• Waste

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The Asset Management Team
Manager Asset Management
Senior Project Manager -
Infrastructure Programming
Project Manager -
Asset Management Project Analysts
Project Manager -
Project Manager -
Infrastructure Management Systems
Surface Infrastructure
Subsurface Infrastructure
Program Capital Budget ROAD / FACILITIES
Program Capital Budget WATER / SEWER
Applications, Databases MANAGEMENT SYSTEMS
Prepare Capital Budget FINANCIAL SYSTEMS
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The Role of Asset Management

• We Do Not Operate, Maintain or Construct Anything
• We Develop and Program Capital Projects
• We Co-Ordinate Surface and Sub-Surface Needs
• We Supply Life Cycle and Financial Analysis
• We Try to Get the Most Asset for the Least Money

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Framework

• What do you have?
• 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?

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Sustainable Asset Management
What do we have? 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?
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R.O.W Integration Coordination

• High level of interaction between infrastructure
  networks
• Coordination of rehabilitation/replacement
  activities
• Strategically Optimize spending

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Integration of Road, Sewer Water Condition
Ratings

• A truly integrated approach will encompass all
  infrastructure types along with their associated
  risks, funding mechanisms and regulatory
  requirements.
• Since the lifecycles for different asset types
  are dissimilar - individual asset groups will be
  faced with pressures at varying times in the
  Municipalities (decades)
• True Co-Ordination Integration of individual
  infrastructure condition ratings into a single
  right-of-way segment rating
• Street right-of-way model concept developed with
  automated links assigned through GIS

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Life Cycle Analysis
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GIS Used To Integrate Data

• Street Centreline Graphic was Starting Point
• Created ROW Tables for Each Asset Type
• Created Data Model With Resultant Tables

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Socio - Economic Factors

• Criteria Assessment alone is not enough
• Budget Constraints Control Decision Process
• Hospitals, Schools, Have Higher Priority
• Land Use Data Evaluated and Added to Model
• Socio-Economic Impact added to Project Decision

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Integrated Decision Support System
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• STATE OF THE INFRASTRUCTURE REPORT
• PHASE 1

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Process

• Began in early 2005
• Public Works Department Assets
• Divisional Input
• Department Management Team
• Corporate Management Team
• 2006 2015 Capital Budget - Council

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Objective of the Report
What it is
What it is not

• not a budget
• not short-term/tactical
• not project specific

• it is a financial plan
• long-term strategic
• service based
• life-cycle based
• the basis of a communication tool
• easily updatable

It identifies trends and issues. Not solutions
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Asset Groups Reviewed

• Water
• Wastewater
• Storm
• Roads / Bridges
• Waste Management
• Parks and Open Space
• Facilities
• Transit
• Fleet

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Asset Rating

• Infraguide Best Practices
• Asset Management Manual (NZ / AUS)
• Based upon ASCE State of the Infrastructure
  Reports
• Condition Performance
• Capacity vs. Need
• Funding vs. Need
• Assigns a letter Grade A thru F

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Other Notable Points

• Investment requirements were derived by adding
  allowances for
• Growth (0.5 per annum)
• Engineering (15)
• Contingencies (10)
• Overhead Admin (10)
• Cost Allocations (10 million over water,
  sanitary roads)
• Cost of borrowing - 50 of the total annual
  capital expenditure.
• Operating investments - 2.5 of the total
  replacement value or current operating budget.
• All values are calculated in current dollars
  (2005).

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Impact on Rate Levy
excludes SWMMP initiatives
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COMMUNICATIONS TOOLS
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Asset ManagementPlanning Process

• Not Project based, but Service based
• Not fixed-term, but Life-Cycle based

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Asset Replacement Value(per 50 frontage)
Total Value 68,800
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Household Daily Cost
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Major Recommendations

• Review other assets in detail
• Identify optimal O M expenditure
• Review O M activities on a Business Case basis
• Review ROI of rehabilitation alternatives
• Review Capital debt financing
• Additional funding identified to include staff, O
  M and Capital
• Develop and implement a plan to ensure community
  engagement
• Develop plan to reach Sustainability

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Future Directions

• Continue to Adapt Our Processes and Programs
• Develop Risk Assessment Data Models
• Implement an Integrated Decision Support System
• Integrated CIP Return on Investment (GFOA)
• State of the Infrastructure Report (Phase II)

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SUSTAINABLE INFRASTRUCTURE SUSTAINABLE
COMMUNITIES
MANAGE DEFICIT DO NOT CREATE ANOTHER ONE
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Gerry Davis, CMADirector of Capital Planning and
ImplementationPublic Works Departmentgdavis_at_hami
lton.cawww.myhamilton.ca 905.546.2424 x4621fax
905.546.4435