COMMITTEE OF THE WHOLE REPORT - Asset Management Program Update

Asset Management Program Update

RECOMMENDATION:

THAT the November 3, 2022 report from the Deputy Director of Engineering titled “Asset Management Program Update” be received for information.

CHIEF ADMINISTRATIVE OFFICER’S COMMENTS:

I concur with the recommendation.

DIRECTOR OF FINANCE’S COMMENTS:

I concur with the recommendation.

DIRECTOR OF ENGINEERING’S COMMENTS:

I concur with the recommendation.

PURPOSE OF REPORT:

To provide the Committee with an update on View Royal’s Asset Management Program and build the Committee’s awareness of asset management within the View Royal context.

BACKGROUND DISCUSSION:

What is asset management?

Asset management is a process that supports the delivery of services that assets provide throughout their entire lifecycle, from creation, acquisition, maintenance, operation, rehabilitation, through to replacement. Asset management at its core is sustainable service delivery.

The graphic above is the Asset Management BC (AMBC) Framework, which informs the Town’s Asset Management Program. The Framework is an industry standard that describes the many components within the holistic asset management process.

Why is asset management important?

The importance of asset management to a local government is dependent on many factors, including its tolerance to risks, its reliance on external funding, and its cultural awareness of the benefit of asset management in terms of fulfilling its purpose under the Community Charter.

Infrastructure-related emergencies are, unfortunately, a common reason why local governments discover the importance of asset management. Events such as a bridge failure, a water main break, or a structure fire can all be mitigated through the implementation of asset management practices. Much of the advancement of the asset management discipline across the globe has come as a response to acute and impending crises.

In the short-term, asset management is important to the Town of View Royal to ensure the Town’s continued eligibility to receive external funding streams. A local government’s ability to demonstrate competency and the ongoing maturation of its asset management journey is becoming a standard requirement for outside funding programs, such as the Canada Community-Building Fund (formally known as the Gas Tax Fund), FCM and UBCM infrastructure planning and capital replacement funding programs. These outside funding sources fund much of the Town’s non-core and capital projects. In order to continue to qualify for these external funding streams it is critical that the Town continue to develop and mature the Asset Management Program.

Fulfilling the purpose of the municipality described in Section 7 of the Community Charter is arguably the integral reason why asset management is important. This section describes the purposes of the municipality to provide services and laws, provide stewardship of public assets, and foster the economic, social and environmental well-being of its community. Asset management fulfills many of these purposes through the systematic and principles-based approach to the management of assets.

Asset management at the Town of View Royal

The Town of View Royal provides seven services:

• General Government Services
• Protective Services
• Transportation Services
• Environmental Health Services
• Development Services
• Parks Services
• Recreation and Culture Services (West Shore Parks and Recreation and Greater Victoria Public Library)

The Town has been exercising many asset management practices since its incorporation in 1988, thus a primary part of the Asset Management Program’s efforts entails adapting those existing practices into the AMBC Framework. Other asset management elements of the Framework are less developed within our organization and will require the ongoing support from Council to develop and implement.

This said, View Royal has made significant advances in the Finances core area of the AMBC Framework by adopting objectives within its 2015-2018 and 2019-2022 Strategic Plans to undertake a financial sustainability review and develop a Long-term Financial Plan. These objectives have resulted in:

• The adoption of a Reserves and Surplus Policy (last updated in 2021)
• The development of a Sustainable Infrastructure Replacement Plan (currently in progress)
• and the Town’s first-ever Asset Management Policy (currently in progress).

Staff look forward to presenting the Sustainable Infrastructure Replacement Plan and Asset Management Policy to the Committee before the end of 2022, which is a requirement of the 2021 FCM Infrastructure Planning Grant ($36,400) that will fund 80% of this initiative.

The benefit of the Asset Management Program

The Asset Management Program will allow the Town to define the levels of service an asset can provide and understand the lifecycle cost associated with delivering any particular level of service. It will allow the municipality to financially plan for the actual lifecycle cost of delivering municipal services and it will provide the opportunity to strategically distribute the financial burden of providing services across benefiting generations.

Summary

View Royal’s Asset Management Program is informed by Asset Management BC’s Framework, which describes a sustainable process of delivering municipal services. The Town is making significant advances in 2022 through the development of a long-term Sustainable Infrastructure Replacement Plan and an Asset Management Policy. The Program is not yet fully developed and ongoing support from Council through its strategic and financial planning processes is critical to ensure the Town’s ongoing eligibility for external funding streams, while future-proofing the sustainable delivery of services.

RECOMMENDATION:

THAT the November 3, 2022 report from the Deputy Director of Engineering titled “Asset Management Program Update” be received for information.

SUBMITTED BY: B. Lubberts, Deputy Director of Engineering REVIEWED BY: I. Leung, Director of Engineering and Parks