docDevelopment of FVRD Water System Asset Management
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Development of FVRD Water System Asset Management
DevelopmentofFVRDWaterSystemAsset ManagementFrameworkandInvestmentPlan UBCMGasTaxAgreementandAsset ManagementWorkshop March17,2015 TareqIslam,P.Eng. DirectorofEngineeringandCommunityServices Overview • • • • • • • Background Approach Methodology AssetUsefulLife AssetReplacementValue InfrastructureRenewalContribuSon AssetManagementImplementaSon Background • FVRDownsandoperates14watersystems • ServicepopulaSonsrangefrom18–1,000 people • 2surfacewater,12groundwaterfed • FVRDappliedandreceivedRegionally SignificantFundingforWaterGap($90kfor Phase1,$900,000forPhase2) Approach AssetManagementWorkshopfacilitatedbyUrbanSystemsLtd. • BroughtrepresentaSvesfromacrossdepartmentsanddisciplines togetherinanopenforumtoabouttheFVRDassetsparScularly watersystemsassets. • CreatedasharedunderstandingofassetmanagementintheFVRD • IdenSfythecurrentstatusofassetmanagementfortheFVRD’s watersystem • Establishshortandlong-termobjecSvesrelatedtodesiredwater levelservicelevels • IdenSfyanyrelevantchallengesandobstacles. Approach AssetManagementWorkshop(FacilitatedbyUrbanSystems) • DevelopedAssetManagementFramework • DevelopedGuidingPrinciples • DiscussionwithElectoralAreaDirectors • DevelopImplementaSonStrategy FrameWorkforGoodAssetManagement Internal AcSviSes Awareness& PrioriSes People InformaSon Asset Management Money Awareness&PrioriSes • UnderstandingofAssetManagementandit’s significanttothelong-termhealthoftheFVRDs WaterSystems • Electedofficials,staffandulSmatelypublics needstobeaware InternalAcSviSes • Everyonetoworktogether(Alldepartments) • HavingaprocessforsecngprioriSesand makingdecisionsiskey • GoodtechnicalandfinancialinformaSonis necessary People • Adequatepeopleresources • Knowledgeandskills • Sharingknowledge InformaSon • InformaSonisintegraltoAssetManagement • Whatdoweown? • WhatisthecondiSonofremaininglifeofassets • Whataretheconsequencesoffailure Money • Fundingdedicatedassets • Nocommunityhasenoughmoneytodoeverythingitneedsor wanttodo • Deferringmaintenanceincreasesriskandcost • Knowingwhenassetswillneedtobereplacedeliminates surprises Approach Essen&alElementsofAssetManagement Implementa&onofKeyObjec&ves AssetManagementLeader(s) 1. Cross-FuncSonal AssetManagementTeam Whatdoyouown(andwhereisit)? 2.ConsolidatedInventory Whatisitworth? Whendoesitneedtobereplaced? 3.AssetManagementInvestmentPlan Howmuchwillitcost? WhatisitscondiSon? Whatdoyouhavetoreplace? 4.CondiSonAssessments Isitaffordablelong-term? 5.AssetManagementFinancialPlan Awareness,EducaSonand CommunicaSon 6.CommunicaSonStrategy FVRD’sProcesses (e.g.longtermplanning,budgeSng, TCAreporSng) 7.AlignmentwithRelevantProcesses ImplementaSon • TheessenSalelementsofassetmanagement encompassthequesSonsthatareshownonthe leisideoftheflowchart,thisisindicatedbythe FederaSonofCanadianMunicipaliSesandNaSonal ResearchCouncil’sManagingInfrastructureAssets report(October2005) Cross-FuncSonalAssetManagementTeam • USliSesdepartmenttochampionteam • IncluderepresentaSvesfromalldepartmentsthat akendedtheworkshop • Meetonaregularbasis • Ensureac1onitemsforeachteammember ConsolidatedInventory • BuildonexisSngGISplalorm • UseexisSnginformaSon;translatehardcopy informaSonintoauseabledigitalformand downloadknowledgefromtheheadsofstaff • Ensureaccessibilityacrossdepartmentsandinthe field • Considervariouslylevelsofinforma1onneeds AssetManagementInvestmentPlan • BasedontheConsolidatedInventory • AssumpSonsusedforgaps(whichcanbefilledasnecessary informaSonbecomesavailable) • Summaryofassetsbysystem,includingreplacementvalue, remaininglife,replacementSmingbasedonageand expectedlife • Iden1fiespeakswhensignificantassetrenewalmaybe necessary • Caninformanunconstrainedlongtermcapitalplan • Guidescapitalrenewalreservelevels CondiSonAssessments • UsedtoadjustreplacementSmingbasedonactual condiSon • Minimizecostinvestmentbyundertaking accordingtoageandriskofassets • Rota1ngimplementa1onschedule AssetManagementFinancialPlan • PolicyparametersforfundingofexisSngandnewassets • BasedontheInvestmentPlan,operaSngneedsforeach watersystem,andavailablerevenue • Informsreserveandotherfundinglevelsneededtoensure sufficientannualandlongtermcashflow • Levelofserviceexpecta1onsandriskevaluatedtobalance costsandavailablerevenuewithinpolicyparameters • Caninformasustainable(constrained)longtermcapitalplan CommunicaSonStrategy • RegularreporSngtotheBoard • PromoSngpublicawarenessofexisSngassets(e.g.. onepagewatersystemreportcards) • EducaSonaroundtheimportanceofassetrenewal • Providesafounda1onforcommunica1ngfuture asset-relateddecisions AlignmentwithRelevantProcesses • Alignassetmanagementprogramwithfinancial, capital,operaSonalandlanduseplanning • Formalizealongtermcapitalplanningprocess • Tieassetmanagementprocessandannualupdates withthebudgeSngcycle • EfficienciesandalignmentwithTCArepor1ng • Ensureassetinforma1onisbeingcollectedtomeetthe longtermassetmanagementneedsofeach department MethodologyofAssetManagementInvestmentPlan • AssetManagementInvestmentPlanwasdevelopedto illustratetheexpectedreplacementneedsbasedon ageforeachoftheFVRD’swaterSystemAssets • FVRDused20yearscostcashflowanalysiswhich includestherenewalcostforallofthewater infrastructureandpresentassetreplacementvalues, remaininglife,deficit,renewalcostandSming. • Italsoprovidedacostprofile,byassetcategorythat showsfundingrequiredtomanageinfrastructureover thelongterm. Methodology • FVRDDevelopedtheinvestmentplanbased ona4-Stepapproach AssetReplacementValue SystemSummary Pipe PumpStations Intakes Replacement Value $24,350,000 $1,690,000 $300,000 Reservoirs $4,550,000 Treatment $1,500,000 Wells $1,650,000 SampleStations $300,000 Other $2,000,000 Planning/Design/Contract Admin $2,000,000 $38,340,000 AssetReplacementValue • TheesSmatedfullreplacementvalueoftheFVRD’swater assetsisapproximately$38.3million(2013).Ofthispipe infrastructureassetsmakeuptwothirdsofthevalue • ItprovidesasummaryofthereplacementvalueofexisSng waterinfrastructure • Itdoesnottouchonregulatoryrequirements,growth/ expansion,levelofserviceimprovements,andeconomic development.Theseitemscanbeincorporatedintofuture iteraSonsoftheinvestmentplan AssetReplacementValue Wells4% SampleSta&ons1% Planning,Design,and ContractAdmin5% Other5% Treatment4% Reservoirs12% Intakes1% BoosterPumpSta&ons 4% PipeInfrastructure64% InfrastructureRenewalContribuSon • TheInfrastructureRenewalContribuSon(IRC)istheannual depreciaSonofthereplacementvalueofaninfrastructureasset. • IntheFVRD,thetotalsystem-wideIRCisapproximately$637,000 whichmeansthisamountrepresentstheaverageannualcostto renewexisSnginfrastructure. • Whenplannedforappropriately,theIRCcanbeusedtorenew exisSngassetsusingadedicatedcashflow,ensuringrevenue stability,prevenSngunnecessaryrisk,andenablingacommunityto applyone-Smefundingtosupportnewassetneedsasopposedto addressingemergencysituaSons. • TheamountoftheIRCnotbudgetedeachyearwillhavetobe madeupinfutureyearsorweneedtoborrowfundstorenew expiredassets InfrastructureRenewalContribuSon Asset Category InfrastructureRenewal Contribution (IRC) Pipe $330,000 PumpSta&ons $44,000 Intakes $3,000 Reservoirs $68,000 Treatment $45,000 Wells $46,000 SampleStations $5,000 Other $56,000 Planning,DesignandContract $40,000 Total $637,000 InfrastructureRenewalContribuSon SampleSta&ons1% Other9% Planning,Designand Contract6% Wells7% Pipe52% Treatment7% Reservoirs11% Intakes0% PumpSta&ons7% AssetManagementImplementaSon 1.Cross-FuncSonalAssetManagementTeam 2.ConsolidatedInventory 3.AssetManagementInvestmentPlan 4.CondiSonAssessmentandAdjustReplacementTiming 5.AssetManagementFinancialPlan 6.CommunicaSonStrategy 7.AlignmentwithRelevantProcess
