Asset management is one of the big buzzwords for government and industry these days. At its most basic, it’s about managing the entire lifecycle of ones assets so you get the most mileage and the best value out of them.
You’d think this would be something that government would have been doing naturally for years, but quite often, those lifecycle costs were not part of the consideration when building or replacing infrastructure.
The new trend of asset management means that when a government is looking at replacing or improving its existing infrastructure, or building something new, the entire lifec of that project needs to be looked at. It’s something senior levels of government want municipalities to consider when they’re applying for grants. For communities, the interest is in having sustainable infrastructure, and for the province and Ottawa, it means they might not have as many communities coming crying for money when that key piece of infrastructure starts to die.
For example, the City of Revelstoke is looking at spending $20–30 million on a new sewer treatment plant. When the city makes plans to build it, the city will not only have to look at that upfront cost, but also the annual cost of running it, the cost of maintaining it, and the cost of replacing it in the future.
In 2016, the City of Revelstoke was one of 12 communities chosen to take part in the Federation of Canadian Municipalities Leadership in Asset Management Program (LAMP). They were paired with Matthew Broadwell, an engineer with Opus Dayton Knight, who guided them in putting together a strategic asset management plan.
Last week, at the Committee of the Whole meeting, Broadwell and Mike Thomas, the city’s director of engineering, gave council an overview of asset management and what had been done so far.
As Broadwell explained, asset management is being driven by changing climates, changing demographics, increased legislation, service failures and cost concerns. “Communities are also starting to be held as more accountable for transparent decision making,” he told council. “In the future the expectation will be linked to funding so that you have the good asset management practices in place.”
Infrastructure, he told council, consists of 90 per cent of the financial value of a municipality, but across Canada, $140 billion worth of infrastructure is considered in poor or very poor condition.
“You want to deliver services that are sustainable over the long term,” Broadwell said. “You will plan and budget the full lifestyle cost of new infrastructure. New infrastructure isn’t just the initial capital cost of building it. In making that decision, you commit to the maintenance and the subsequent renewal cost of new infrastructure.”
The city’s strategic asset management plan is a 61-page document that outlines the city’s goals, priorities and policies for asset management. It doesn’t provide for specific goals for any particular piece of infrastructure but instead outlines how asset management will impact the city’s priorities moving forward.
“Asset management will help the city determine its service level and asset priorities and options,” states the report. “It will help clarify future consequences and impacts of different asset and service level decisions by providing decision makers with the information and the decision support tools to make well-informed, evidence-based decisions, validate priorities in a defensible way, understand what factors impact service and their associated costs, and reduce the total cost of service over the lifecycle of assets.”
The big challenge for the city will be taking the asset management plan and putting into action, Thomas told council. “One of the outcomes is developing that City of Revelstoke roadmap report, which is going to be challenging. There’s a lot of pieces along the way,” he said. “There’s a lot of things we’re not doing right now that we will need to do to make this happen.
“The only way a program like this is going to be successful and actually have meaningful change in how we manage our assets and how sustainable we are as a community is if we are monitoring it continuing forward.”
Going forward, the city will be producing asset management plans for the city’s various pieces of infrastructure, including roads, water, sewer, buildings and parks. The city is also working a long-term financial plan that will consider asset management policies.
Broadwell told council the city would have to direct resources towards asset management if it wants to be successful. One thing the plan mentions is having a sustainability coordinator. “Doing asset management off the side of your desk is not going to be successful,” he said.
Funding that position will be decided on at budget time.