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Capital Budget Tuesday November 24, 2016 9:00 A.M

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Capital Budget Tuesday November 24, 2016 9:00 A.M The Corporation of the Township of Norwich Special Council Meeting - Capital Budget Tuesday November 24, 2016 9:00 a.m. Council Chambers, Norwich AGENDA Page 1. CALL TO ORDER 2. APPROVAL OF AGENDA 3. DISCLOSURE OF PECUNIARY INTEREST 4. REVIEW OF ASSET MANAGEMENT PLAN 2-92 4.1 Departmental 20 year plans 93-97 4.2 Executive Summary 5. DEPARTMENTAL CAPITAL BUDGET 98-124 5.1 General Government 5.2 Protective Services 5.3 Transportation 5.4 Health Services 5.5 Recreation and Culture 6. BY-LAWS 125-126 I No. 68- 2016 To Confirm All Actions and Proceedings of Council 7. ADJOURNMENT Page 1 of 126 ASSET MANAGEMENT PLAN To ensure our municipal assets are maintained and renewed INDEX in a responsible and financially sustainable manner. 2016 Departmental 20 year plans Page 2 of 126 INDEX Introduction ……………………………………………………………………………..…. 1 Components of an Asset Management Plan …..………………..…………………………. 2 Benefits of a having an Asset Management Plan ……..…………………………………... 4 Asset Management Plan by Asset Category 1. Roadways …………………………………………………………………... 5 2. Bridges and Culverts ……………………………………………….............. 8 3. Sidewalks …………………………………………………………………... 11 4. Parking Lots ……………………………………………………………….. 13 5. Storm Sewers ……………………………………………………………… 15 6. Buildings and Structures …………………………………………………... 18 7. Vehicles and Machinery …….…………………………………………….. 21 8. Furnishings and Equipment ………….……………………………………. 23 Overall Cost per Year for Entire Program ……………………………………………….… 25 Financial Shortfall …………………………………………………………………….…… 26 Long-Term Plan for Sustainability ………………………………………………………... 27 Appendices A. Detailed Listing - Paved Road Structures B. Detailed Listing - Bridges Structures C. Detailed Listing - Culverts D. Detailed Listing - Sidewalks E. Detailed Listing - Parking Lots F. Detailed Listing - Storm Sewers – Trunk Piping G. Detailed Listing - Storm Sewers – Catch Basins & Laterals H. Detailed Listing - Buildings I. Detailed Listing - Structures J. Detailed Listing - Vehicles and Machinery K. 20 Year Replacement Plan – Fire Department L. 20 Year Replacement Plan – Public Works Department Construction M. 20 Year Replacement Plan – Public Works Department Equipment N. 20 Year Replacement Plan – Parks & Recreation Structures O. 20 Year Replacement Plan – Parks & Recreation Equipment Departmental 20 year plans Page 3 of 126 INTRODUCTION Municipalities have always engaged in some form of asset management, through such things as capital budgets, 10 year forecasts, road needs studies, and long-term financial planning. Informal and undocumented plans have been utilized in various manners and forms by municipal departments for decades. But now there is a need to put more formal, all-encompassing, comprehensive programs in place to deal with all of our municipal infrastructure and ensure that our assets remain viable and usable for the general public. It is commonly known that there is not enough budget dollars available to replace most municipal assets when their useful life has come to an end. Municipalities are being forced to find ways to keep and maintain assets well beyond their normal lifespan. Capital budget dollars have to be properly prioritized so that critical infrastructure is renewed before it fails; the replacement of non- critical assets also needs to be accounted for. In order to accomplish this, municipalities require a detailed accounting of all their assets, which includes an assessment of their current condition, estimated costs to replace (as opposed to historical costs), and an estimated replacement date (as opposed to the end of its estimated useful life). Only when a municipality has accumulated all this essential information, can it create a long-term plan to properly manage its assets. Fully financing an asset management program will be difficult and pose the greatest challenge a municipality will face in making your asset management plan a reality. All financing options that are available will need to be considered and utilized: tax revenue, reserves and reserve funds, debt financing, user fees and development charges, and capital grants from the Provincial and Federal Government. Even with all these financing options available, municipalities will face a funding shortfall in their program. This shortfall is commonly referred to as an “infrastructure gap”. The success or failure of an asset management plan will be in how a municipality deals with and attempts to shrink this “infrastructure gap”. Every plan should have a target date when a fully funded program can be achieved. Depending on the current state of a municipality’s infrastructure, this target date could be as little as 10 to 15 years from now or it could be as much as 100 years or more down the road. This date will fluctuate over time as assets are added and removed, service levels increase and/or decrease, and as funding levels and political wills change. One thing is clear, for a municipality to achieve a fully-funded asset management program it will require a long and steady increase in tax revenues in order to get there. In this document, you will find the detailed asset management program for each capital class in the Township of Norwich asset inventory. Each section will detail the current assets we maintain in that class, the current state of these assets, strategies for managing and maximizing the life of these assets, and the costs to maintain and fund the eventual replacement of these assets. The final sections of this document will pull all this data together, determine the municipality’s overall “infrastructure gap” and discuss strategies for funding it. Detailed lists of all municipal assets are included in the appendices to this document. For 2016, additional appendices have been added to this document that contain various long-term asset replacement plans for each department. It is within these long-term plans that you can see how and when the Township of Norwich intends to replace each of its assets. These plans have been compiled and formalized based on the all the other information contained with this document. Township of Norwich – Asset Management Program – 2016 Page 1 Departmental 20 year plans Page 4 of 126 COMPONENTS OF AN ASSET MANAGEMENT PROGRAM In order for a plan to be considered a complete asset management program, it should include all of the following components: CONDITIONAL ASSESSMENTS To assist a municipality in properly prioritizing asset replacements, each asset should be assessed based on its current condition. While some asset classes will have its conditional assessments closely relate to the age of its assets, other classes may vary widely due to other factors such as usage, traffic counts, operating hours, weather exposure, etc. Each class of asset will need to be analyzed separately and proper conditional ratings applied. Through this process, critical assets to the municipal operations also need to be identified, as failure of these assets will have far greater consequences than non-essential assets. With this information in hand, only then can asset replacements be properly prioritized by ensuring that the assets in the most need are replaced first. REPLACEMENT VALUE Every asset in your management program needs a true cost for its eventual replacement. This differs from the Historical Cost that was attributed to each asset in the TCA Inventory completed for PSAB 3150. To properly plan for the funding of the new asset, you need to have an estimate of what the replacement asset will cost. This will require the use of price indexes and inflation factors in order to estimate a cost in a future year of purchase or construction. It is within this component of the Asset Management Program that consideration should also be given to the “Expected Level of Service” for each asset class. Will the replacement asset need to be increased (or decreased) or changed due to a different “Expected Level of Service” either now or in the future? Standards can also change over time which could dictate a different type of asset be put in place. If necessary, the replacement value determined will need to reflect the cost of the new and improved asset not just the replacement cost of the existing asset. NOTE: Some assets may not be intended to be replaced when there useful life comes to an end; these assets need to be identified so that their replacement costs are not reflected in your plan. REPLACEMENT DATE Every asset sitting in your current TCA Inventory has an estimated useful life. This is the number of years that the asset will be amortized over for financial reporting purposes. Realistically, due to budget constraints and lack of funding, this is not an accurate estimate of the replacement date for the asset. Generally replacement dates will be many years after the useful life of the asset has expired. Utilizing conditional assessments, budget dollars available and other factors, asset replacements in each class will need to be prioritized and placed out over numerous years in order to determine the most appropriate replacement date for each asset. Township of Norwich – Asset Management Program – 2016 Page 2 Departmental 20 year plans Page 5 of 126 MAINTENANCE / UPGRADE PLANS Most assets within the municipal inventory will need periodic maintenance to ensure that they are properly maintained and remain fully usable over their entire useful life, and usually beyond. A properly scheduled and funded maintenance program should be included in your Asset Management Program. This will ensure that the assets do not need to be replaced before their scheduled replacement date. Some assets may require substantial work and financial investment at various points in its life to ensure they continue to operate at an optimal level. This could include work such as engine rebuilds and overhauls, road treatments, parts replacements, etc. These are necessary procedures that need to be accounted for in your plan. Beyond the regularly scheduled maintenance program there may be other opportunities where there is an option to reinvest in your asset to extend its useful life. In these cases, it is necessary to complete a cost-benefit analysis to determine if the financial investment is worth the extra useful life that will result.
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