APPENDIX A: DRAFT ASSET MANAGEMENT POLICY

APPENDIX A: DRAFT ASSET MANAGEMENT POLICY

POLICY MANUAL

PURPOSE: The purpose of this Policy is to support sustainable service delivery by establishing asset management best practices.

OBJECTIVES:

The objectives of this policy are as follows:

• Triple Bottom Line: Ensuring capital services are provided in a socially, financially and environmentally sustainable manner, with the appropriate levels of service to residents, businesses, visitors and the environment.
• Stewardship of Public Assets: Safeguarding and stewarding Town assets through the implementation of appropriate asset management strategies and appropriate financial resources for those assets.
• Asset Management Culture: Creating an environment where all Town employees take an integral part in overall management of Town assets by creating and sustaining asset management awareness throughout the organization inclusive of training and development.
• Capital Service Levels: Providing information on asset target levels of service and required resources to achieve those targets.
• Legislative Compliance: Meeting federal, provincial and local legislative and regulatory requirements for asset management as applicable at the individual asset level and at the corporate level.
• Affordability: Aligning levels of service with what citizens are willing to pay.

DEFINITIONS:

SCOPE

This policy applies to all Town departments, officers, employees and contractors.

POLICY

1. Background

1.1. The Town owns and uses significant tangible capital assets to support sustainable service delivery to the community. At the time of writing this Policy, the Town is estimated to own approximately $296M in depreciable assets and $60M in non-depreciable assets.

1.2. Asset management practices impact directly on the core business of the Town and appropriate asset management is required to achieve service delivery objectives.

1.3. The Town is committed to implementing a systematic asset management methodology in order to apply appropriate asset management best practices across all areas of the organization. This includes ensuring that assets are planned, created, operated, maintained, renewed and disposed of in accordance with Town priorities for service delivery.

2. Policy Principles

2.1. Legislative Compliance: Town asset management practices must meet all legislative requirements for the provision of capital services. Asset Management and Financial Plans will incorporate expected service level changes that are needed to meet legislative and regulatory requirements.

2.2. Triple Bottom Line: Sustainable Service Delivery ensures that the Town’s capital services are provided in a manner that respects cultural, economic and environmental sustainability and does not compromise the ability of future generations to make their own choices.

2.3. Cost Effective Service Delivery: A well-developed Asset Management Program will enable the Town to select infrastructure priorities and support plans, practices, materials, actions and operations that aim at minimizing the cost of asset ownership over the entire life of the asset for the desired service level.

2.4. Long Term Benefits: A well-developed Asset Management Program will enable the Town to prioritize plans, practices, materials, actions and operations that produce the maximum benefits over the entire life of the asset for the desired service level.

2.5. Plan Consistency & Operational Integration: Asset Management program aim is to integrate Asset Management principles within the Town’s planning and operational processes and the Town’s Financial Plan including the asset management consequences of Council endorsed master plans.

2.6. Intergenerational Funding Equity: Intergenerational funding equity ensures that all generations pay a similar cost to utilize capital services in a similar manner through the lifecycle of the assets. This principle is compromised if the cost of capital services or levels of service differ significantly for different generations of capital service users.

2.7. Service Level adaptability: Robust Asset Management practices support the production of service-based, Asset Management Plans that are adaptable to Council approved service level increases or decreases.

3. Specific Policy Items

3.1. Financial Plan Capital: Full life cycle costs should be reported and considered in all decisions relating to new Town services and assets and renewal/upgrading of existing services and assets.

3.2. Debt Servicing Budgets: When debt is retired, Council should consider using the revenue previously used to service debt for infrastructure funding and/or transfer to reserve funding.

3.3. Infrastructure Funding Cash Flow Investment Harmonization: The Town should align forecasted cash flows from infrastructure replacement reserves with investment portfolio horizon to maximize investment returns earned on such reserves. Council will endeavour not to provide direction that would significantly disrupt or abruptly change cash flow projections from long-term infrastructure replacement reserves and related investment portfolios as this may crystalize an investment loss that would otherwise be avoided.

3.4. Lifecycle Costing in Procurement: Financial considerations used to evaluate procurement processes should consider full lifecycle costing of proposals.

3.5. Lifecycle Costing in Land-Use: Incremental Infrastructure lifecycle costing information should be integrated into the information used to make land-use decisions. Infrastructure lifecycle costing information should be compared to incremental expected lifecycle taxation (or utility revenue) yield derived from that land use decision.