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THE ASSET MANAGEMENT PLAN FOR THE MUNICIPALITY OF BAYHAM
2013
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SUBMITTED DECEMBER 2013
BY PUBLIC SECTOR DIGEST
148 FULLARTON ST.,SUITE 1410
LONDON,ONTARIO,N6A 5P3
State of the Infrastructure
The Municipality of Bayham
AVERAGE ANNUAL FUNDING REQUIRED vs.AVERAGE ANNUAL FUNDING AVAILABLE
$52,000
$551,000
•14
$217,000
$105,000
$0
ROAD NETWORK ES&CULVER ATER NETWO ITARY NETWO
-$154,000
-$240,000
-$384,000
Total Annual Deficit: $726,000
Annual Funding Available
Annual Funding Deficit
Annual Funding Surplus
PUBLIC SECTOR DIGEST
INTELLIGENCE FOR THE PUBLIC SECTOR.
148 Fullarton St.,Suite 1410
London,Ontario,N6A 5P3
T:519.690.2565 F:519.649.2010
www.publicsectordigest.com
www.citywidesolutions.com
December 2013
The Municipality of Bayham
9344 Plank Road,Box 160
Straffordville,Ontario,NOJ 1 Y0
Attention: David Aristone,Treasurer
We are pleased to submit the 2013 Asset Management Plan (AMP)for the Municipality of Bayham.This AMP complies
with the requirements as outlined within the provincial Building Together Guide for Municipal Asset Management Plans. It
will serve as a strategic,tactical,and financial document,ensuring the management of the municipal infrastructure
follows sound asset management practices and principles,while optimizing available resources and establishing desired
levels of service.Given the broad and profound impact of asset management on the community,and the financial&
administrative complexity involved in this ongoing process,we recommend that senior decision-makers from across the
organization are actively involved in its implementation.
The performance of a community's infrastructure provides the foundation for its economic development,
competitiveness,prosperity,reputation,and the overall quality of life for its residents.As such,we are appreciative of
your decision to entrust us with the strategic direction of its infrastructure and asset management planning,and are
confident that this AMP will serve as a valuable tool.
Sincerely,
The Public Sector Digest Inc.
P.
Matthew Dawe Israr Ahmad
Vice President Managing Editor
mdawe@publicsectordigest.com iahmad@publicsectordigest.com
PUBLIC SECTOR DIGEST
INTELLIGENCE FOR THE PUBLIC SECTOR.
Contacts
Matthew Dawe
Vice President
mdawe@publicsectordigest.com
Israr Ahmad
Managing Editor
iahmad@publicsectordigest.com
Christine Beneteau
Data Analyst
cbeneteau@publicsectordigest.com
Chad Gale
Data Analyst
cgale@publicsectordigest.com
Jona Memo
Data Analyst
jmema@publicsectordigest.com
Salman Zafar
Data Analyst
szafar@publicsectordigest.com
Tyler Sutton
Senior Research Analyst
tsutton@publicsectordigest.com
Matthew Van Dommelen
Regional Director
mvandommelen@publicsectordigest.com
Gabe Metron
Regional Director
gmetron@publicsectordigest.com
Holly Jennings
Account Manager
hjennings@publicsectordigest.com
LEGAL NOTICE
This report has been prepared by The Public Sector Digest Inc. ("PSD")in accordance with instructions received from the
Municipality of Bayham (the"Client")and for the sole use of the Client.The content of(and recommendations)this
report reflects the best judgement of PSD personnel based on the information made available to PSD by the Client.
Unauthorized use of this report for any other purpose,or by any third party,without the express written consent of PSD,
shall be at such third party's sole risk without liability to PSD.
This report is protected by copyright.
THE ASSET MANAGEMENT PLAN FOR THE MUNICIPALITY OF BAYHAM
Table a Contents
1.0 Executive Summary 4
2.0 Introduction 7
2.1 Importance of Infrastructure 8
2.2 Asset Management Plan(AMP)-Relationship to Strategic Plan 8
2.3 AMP-Relationship to other Plans 8
2.4 Purpose and Methodology 9
2.5 CityWide Software alignment with AMP 11
3.0 State of the Infrastructure(SOTI) 12
3.1 Objective and Scope 12
3.2 Approach 12
3.2.1 Base Data 12
3.2.2 Asset Deterioration Review 12
3.2.3 Identify Sustainable Investment Requirements 13
3.2.4 Asset Rating Criteria 13
3.2.5 Infrastructure Report Card 13
3.2.6 General Methodology and Reporting Approach 14
3.3 Road Network Infrastructure 15
3.3.1 What do we own? 16
3.3.2 What is it worth? 16
3.3.3 What condition is it in? 17
3.3.4 What do we need to do to it? 18
3.3.5 When do we need to do it? 18
3.3.6 How much money do we need? 19
3.3.7 How do we reach sustainability? 19
3.3.8 Recommendations 20
3.4 Gravel Roads—Maintenance Requirements 21
3.4.1 Introduction 21
3.4.2 Maintaining a Good Cross Section 21
3.4.3 Grading Operations 22
3.4.4 Good Surface Gravel 22
3.4.5 Dust Abatement and stabilization 22
3.4.6 The Cost of Maintaining Gravel Roads 22
3.4.7 Minnesota Study(2005) 22
3.4.8 South Dakota study(2004) 23
3.4.9 Ontario Municipal Benchmarking Initiative(OMBI) 23
3.4.10 Conclusion 23
3.5 Bridges&Culverts 24
3.5.1 What do we own? 25
1
3.5.2 What is it worth? 25
3.5.3 What condition is it in? 26
3.5.4 What do we need to do to it? 26
3.5.5 When do we need to do it? 27
3.5.6 How much money do we need? 27
3.5.7 How do we reach sustainability? 28
3.5.8 Recommendations 28
3.6 Water Infrastructure 29
3.6.1 What do we own? 30
3.6.2 What is it worth? 30
3.6.3 What condition is it in? 32
3.6.4 What do we need to do to it? 32
3.6.5 When do we need to do it? 33
3.6.6 How much money do we need? 34
3.6.7 How do we reach sustainability? 34
3.6.8 Recommendations 34
3.7 Sanitary Sewer Infrastructure 35
3.7.1 What do we own? 36
3.7.2 What is it worth? 36
3.7.3 What condition is it in? 37
3.7.4 What do we need to do to it? 38
3.7.5 When do we need to do it? 38
3.7.6 How much money do we need? 39
3.7.7 How do we reach sustainability? 39
3.7.8 Recommendations 40
4.0 Infrastructure Report Card 41
5.0 Desired Levels of Service 42
5.1 Key factors that influence a level of service: 42
5.1.1 Strategic and Corporate Goals 42
5.1.2 Legislative Requirements 42
5.1.3 Expected Asset Performance 42
5.1.4 Community Expectations 42
5.1.5 Availability of Finances 43
5.2 Key Performance Indicators 43
5.3 Transportation Services 44
5.3.1 Service Description 44
5.3.2 Scope of Services 45
5.3.3 Performance Indicators(reported annually) 45
5.4 Water/Sanitary/Storm Networks 45
5.4.1 Service Description 45
5.4.2 Scope of services 46
5.4.3 Performance Indicators(reported annually) 46
6.0 Asset Management Strategy 47
6.1 Objective 47
6.2 Non-Infrastructure Solutions and Requirements 47
6.3 Condition Assessment Programs 47
2
6.3.1 Pavement Network Inspections 48
6.3.2 Bridges&Culverts(greater than 3m)Inspections 49
6.3.3 Sewer Network Inspections(Sanitary&Storm) 49
6.3.4 Water network inspections 50
6.4 AM Strategy—Life Cycle Analysis Framework 52
6.4.1 Paved Roads 52
6.4.2 Gravel Roads 54
6.4.3 Sanitary and Storm Sewers 54
6.4.4 Bridges&Culverts(greater than 3m span) 56
6.4.5 Water Network 56
6.5 Growth and Demand 59
6.6 Project Prioritization 59
6.6.1 Risk Matrix and Scoring Methodology 59
7.0 Financial Strategy 62
7.1 General overview of financial plan requirements 62
7.2 Financial information relating to Bayham's AMP 63
7.2.1 Funding objective 63
7.3 Tax funded assets 63
7.3.1 Current funding position 63
7.3.2.Recommendations for full funding 64
7.4 Rate funded assets 65
7.4.1 Current funding position 65
7.5 Use of debt 67
7.6 Use of reserves 70
7.6.1 Available reserves 70
7.6.2 Recommendation 70
8.0 Appendix A: Report Card Calculations 71
3
1 .0 Executive Summary
The performance of a community's infrastructure provides the foundation for its economic development,
competitiveness, prosperity,reputation,and the overall quality of life for its residents. Reliable and well-
maintained infrastructure assets are essential for the delivery of critical core services for the citizens of a
municipality.
A technically precise and financially rigorous asset management plan,diligently implemented,will mean
that sufficient investments are made to ensure delivery of sustainable infrastructure services to current and
future residents.The plan will also indicate the respective financial obligations required to maintain this
delivery at established levels of service.
This Asset Management Plan (AMP) for the Municipality of Bayham meets all requirements as outlined within
the provincial Building Together Guide for Municipal Asset Management Plans. It will serve as a strategic,
tactical,and financial document, ensuring the management of the municipal infrastructure follows sound
asset management practices and principles,while optimizing available resources and establishing desired
levels of service. Given the expansive financial and social impact of asset management on both a
municipality,and its citizens, it is critical that senior decision-makers,including department heads as well as
the chief executives,are strategically involved.
Measured in 2012 dollars,the replacement value of the asset classes analyzed totaled $95 million for
Bayham.
2012 Replacement Value by Asset Class
Total: $95,065,157
Road Network,
$20,826,720,22%
Sanitary Sewer
Network, $43,139,543 Bridges&Culverts,
,45% $6,168,574,7%
Water Network,
$24,930,320,26%
4
While the municipality is responsible for the strategic direction,it is the taxpayer in Bayham who ultimately
bears the financial burden.As such,a 'cost per household' (CPH) analysis was conducted for each of the
asset classes to determine the financial obligation of each household in sharing the replacement cost of
the municipality's assets.Such a measurement can serve as an excellent communication tool for both the
administration and the council in communicating the importance of asset management to the citizen.The
diagram below illustrates the total CPH,as well as the CPH for individual asset classes.
Infrastructure Replacement Cost Per Household
Total:$73,756 per household
-�- Road Network(excludes gravel)
•a • "''' Total Replacement Cost:$16,733,020
Cost Per Household:$6,744
I. MI MI Sanitary Sewer Infrastructure
• •• •• r Total Replacement Cost:$43,139,543
• ■• •• InCost Per Household:$36,130
• ■■ ■■ 01111011110
i
l {.) Q111
Storm Sewer Network Water Network Bridges&Culverts
MIL N/A Total Replacement Cost:$24,930,320 Total Replacement Cost:$6,168,574
Cost Per Household:$28,394 Cost Per Household:$2,486
In assessing the municipality's state of the infrastructure,we examined,and graded, both the current
condition (Condition vs. Performance) of the asset classes as well as the municipality's financial capacity to
fund the asset's average annual requirement for sustainability (Funding vs. Need).We then generated the
municipality's infrastructure report card.The municipality received a cumulative GPA of `D+',with an
annual infrastructure deficit of$726,000. Its grades on the Funding vs. Need dimension were both
inconsistent,and indicative of critical funding shortages in three of the four asset classes analyzed in this
AMP. While the municipality received an 'A' on the Funding vs. Need dimension for its road network,a
grade of 'F' was assigned to bridges &culverts,water and sanitary sewer networks. For both asset classes,
the municipality is funding less than 20%of its annual infrastructure requirements.With a grade of 'F' in both
its water and sanitary network,the municipality is funding below 40%of its annual infrastructure needs.
On the Condition vs. Performance dimension,the municipality's grades were equally inconsistent. Based on
age data, it received:a 'D+' and a 'D' on its roads and the bridges &culverts assets, respectively;and, a
`B+' on both its water and sanitary networks,respectively.The ratings for the road network and culverts
assets suggest that, based on age data,the assets are likely showing significant signs of deterioration and
their function is likely compromised.They also signal substantial and impending financial demand on the
municipality. For example, as there is a significant portion of the road network in poor and critical condition,
this has generated a backlog of needs totaling approximately$5.9 million in the next 5 years.Similarly,the
accumulated needs for the bridges and large structures in the next 5 years total approximately$4.8 million.
5
For both asset classes—as well as the remaining two—the implementation of a full condition assessment
program should be an essential next step to defining actual field requirements.Structures are one of the
highest liability assets a municipality owns;as such,the development and implementation of a program
should receive urgent attention.
In order for an AMP to be effectively put into action,it must be integrated with financial planning and long-
term budgeting.We have developed scenarios that would enable Bayham to achieve full funding within 5
years or 10 years for the following: tax funded assets,including road network, bridges &culverts,and;rate
funded assets, including water network,and sanitary sewer network.
This AMP already assumes that,over time,the$52,000 of surplus available in the roads network will be
transferred to bridges &culverts,resulting in no impact on the recommendations in this AMP.
The average annual investment requirement for paved roads and bridges &culverts is$653,000. Annual
revenue currently allocated to these assets is$551,000, leaving an annual deficit of$102,000.To put it
another way,these infrastructure categories are currently funded at 84%of their long-term requirements.
Bayham has annual tax revenues of$3,156,000 in 2013.Without consideration of any other source of
revenue,full funding would require an increase in tax revenue of 3.3%over time.We recommend a 5 year
option which involves full funding being achieved over 5 years by:
a) allocating the$5,000 of tax revenue currently being allocated to rate funded asset categories (as listed in section 7.4 of
this report)to the tax funded asset categories.
b) beginning in 2015,allocating the$35,000 of tax revenues currently being invested in a waste transfer station.
c) allocating the$206,000 of gas tax revenue to the paved roads category.
d) increasing tax revenues by 0.4%each year for the next 5 years solely for the purpose of phasing in full funding to the Iwo
asset categories covered by this AMP.
e) increasing existing and future infrastructure budgets by the applicable inflation index on an annual basis in addition to
the deficit phase-in.
The average annual investment requirement for sanitary services and water services is$946,000.Annual
revenue currently allocated to these assets for capital purposes is$322,000 leaving an annual deficit of
$624,000.To put it another way,this infrastructure category is currently funded at 34%of their long-term
requirements.
In 2013, Bayham has annual sanitary services revenues of$641,000 and annual water revenues of$551,000.
Without any adjustments to existing revenues,a move to full funding would require a rate increase of 59.9%
in the sanitary services, and 43.6%for the water services over time. We recommend a 10 year option which
involves full funding being achieved over 10 years by:
a) reallocating the tax revenue of$5,000 currently being allocated to water services to the tax funded asset categories in
section 7.3 of this report.
b) reallocating the forecasted debt cost reductions of$44,000 for water services to the applicable infrastructure deficit.
c) increasing rate revenues by 6.0%for sanitary services and 3.7%for water services each year for the next 10 years solely
for the purpose of phasing in full funding of the asset categories covered by this AMP.
d) increasing existing and future infrastructure budgets by the applicable inflation index on an annual basis in addition to
the deficit phase-in
The revenue options available to Bayham allow the municipality to meet its long-term goal to fully fund its
infrastructure requirements without further use of debt. However,as explained in sections 7.3.2 and 7.4.2,
the recommended condition rating analysis may require otherwise.
6
2.0 Introduction
This Asset Management Plan meets all provincial requirements as outlined within the Ontario Building
Together Guide for Municipal Asset Management Plans. As such,the following key sections and content
are included:
Executive Summary and Introduction
2. State of the Current Infrastructure
3. Desired Levels of Service
4. Asset Management Strategy
5. Financial Strategy
The following asset classes are addressed:
1. Road Network:Urban and rural,paved and gravel
2. Bridges&Culverts:Bridges and large culverts with a span greater than 3m
3. Water Network:Water mains,hydrants,meters,and valves
4. Sanitary Sewer Network:Sanitary sewer mains and facilities
Municipalities are encouraged to cover all asset classes in future iterations of the AMP.
This asset management plan will serve as a strategic,tactical,and financial document ensuring the
management of the municipal infrastructure follows sound asset management practices and principles,
while optimizing available resources and establishing desired levels of service.
At a strategic level,within the State of the Current Infrastructure section, it will identify current and future
challenges that should be addressed in order to maintain sustainable infrastructure services on a long-term,
life cycle basis.
It will outline a Desired Level of Service (LOS) Framework for each asset category to assist the development
and tracking of LOS through performance measures across strategic,financial,tactical,operational, and
maintenance activities within the organization.
At a tactical level,within the Asset Management Strategy section,it will develop an implementation
process to be applied to the needs-identification and prioritization of renewal, rehabilitation, and
maintenance activities,resulting in a 10 year plan that will include growth projections.
At a financial level,within the Financial Strategy section, a strategy will be developed that fully integrates
with other sections of this asset management plan,to ensure delivery and optimization of the 10 year
infrastructure budget.
Through the development of this plan, all data, analysis, life cycle projections,and budget models will be
provided through the Public Sector Digest's CityWide suite of software products.The software and plan will
be synchronized,will evolve together,and therefore,will allow for ease of updates, and annual reporting of
performance measures and overall results.
This will allow for continuous improvement of the plan and its projections.It is therefore recommended that
the plan be revisited and updated on an annual basis, particularly as more detailed information becomes
available.
7
2.1 Importance of Infrastructure
Municipalities throughout Ontario, large and small, own a diverse portfolio of infrastructure assets that in
turn provide a varied number of services to their citizens.The infrastructure,in essence,is a conduit for the
various public services the municipality provides, e.g.,the roads supply a transportation network service;
the water infrastructure supplies a clean drinking water service.A community's prosperity,economic
development, competitiveness,image,and overall quality of life are inherently and explicitly tied to the
performance of its infrastructure.
2.2 Asset Management Plan (AMP) - Relationship to Strategic Plan
The major benefit of strategic planning is the promotion of strategic thought and action.A strategic plan
spells out where an organization wants to go, how it's going to get there, and helps decide how and where
to allocate resources,ensuring alignment to the strategic priorities and objectives.It will help identify
priorities and guide how municipal tax dollars and revenues are spent into the future.
The strategic plan usually includes a vision and mission statement,and key organizational priorities with
alignment to objectives and action plans. Given the growing economic and political significance of
infrastructure,the asset management plan will become a central component of most municipal strategic
plans, influencing corporate priorities,objectives,and actions.
2.3 AMP - Relationship to other Plans
....................................................................................................................................................................................................................................................................................................................................................
An asset management plan is a key component of the municipality's planning process linking with multiple
other corporate plans and documents. For example:
• The Official Plan-The AMP should utilize and influence the land use policy directions for long-term growth and
development as provided through the Official Plan.
• Long Term Financial Plan-The AMP should both utilize and conversely influence the financial forecasts within the long-
term financial plan.
• Capital Budget-The decision framework and infrastructure needs identified in the AMP form the basis on which future
capital budgets are prepared.
• Infrastructure Master Plans-The AMP will utilize goals and projections from infrastructure master plans and in turn will
influence future master plan recommendations.
• By-Laws,standards,and policies-The AMP will influence and utilize policies and by-laws related to infrastructure
management practices and standards.
• Regulations-The AMP must recognize and abide by industry and senior government regulations.
• Business Plans-The service levels,policies,processes,and budgets defined in the AMP are incorporated into business
plans as activity budgets,management strategies,and performance measures.
8
2.4 Purpose and Methodology
The following diagram depicts the approach and methodology, including the key components and links
between those components that embody this asset management plan:
INFRASTRUCTURE-STRATEGIC PLAN
�♦ Strategic Plan Goals,Asset Performance&Community Expectations,
Legislated Requirements
STATE OF THE CURRENT INFRASTRUCTURE REPORTS
Asset Inventory,Valuation,Current Condition/Performance,
Sustainable Funding Analysis
U
>
EXPECTED LEVELS OF SERVICE
o Key Performance Indicators,Performance Measures,Public
Engagement
4)
ASSET MANAGEMENT STRATEGY
Lifecycle Analysis,Growth Requirements,Risk Management,Project
> Prioritization Methodologies
1)
a)
FINANCING STRATEGY
Available Revenue Analysis,Develop Optional Scenarios,Define
Optimal Budget&Financial Plan
AMP PERFORMANCE REPORTING
Project Implementation,Key Performance Measures Tracked,Progress
Reported to Senior Management&Council
It can be seen from the above that a municipality's infrastructure planning starts at the corporate level with
ties to the strategic plan, alignment to the community's expectations,and compliance with industry and
government regulations.
Then,through the State of the Infrastructure analysis,overall asset inventory,valuation,condition and
performance are reported. In this initial AMP,due to a lack of current condition data for all of asset classes,
present performance and condition are estimated by using the current age of the asset in comparison to
its overall useful design life. In future updates to this AMP,accuracy of reporting will be significantly
increased through the use of holistically captured condition data. Also,a life cycle analysis of needs for
each infrastructure class is conducted.This analysis yields the sustainable funding level,compared against
actual current funding levels,and determines whether there is a funding surplus or deficit for each
infrastructure program.The overall measure of condition and available funding is finally scored for each
asset class and presented as a star rating (similar to the hotel star rating) and a letter grade (A-F) within the
Infrastructure Report card.
9
From the lifecycle analysis above,the municipality gains an understanding of the level of service provided
today for each infrastructure class and the projected level of service for the future.The next section of the
AMP provides a framework for a municipality to develop a Desired Level of Service (or target service level)
and develop performance measures to track the year-to-year progress towards this established target level
of service.
The Asset Management Strategy then provides a detailed analysis for each infrastructure class.Included in
this analysis are best practices and methodologies from within the industry which can guide the overall
management of the infrastructure in order to achieve the desired level of service.This section also provides
an overview of condition assessment techniques for each asset class; life cycle interventions required,
including those interventions that yield the best return on investment;and prioritization techniques,
including risk quantification,to determine which priority projects should move forward into the budget first.
The Financing Strategy then fully integrates with the asset management strategy and asset management
plan,and provides a financial analysis that optimizes the 10 year infrastructure budget. All revenue sources
available are reviewed,such as the tax levy,debt allocations,rates,reserves,grants, gas tax, development
charges,etc.,and necessary budget allocations are analysed to inform and deliver the infrastructure
programs.
Finally,in subsequent updates to this AMP,actual project implementation will be reviewed and measured
through the established performance metrics to quantify whether the desired level of service is achieved or
achievable for each infrastructure class. If shortfalls in performance are observed,these will be discussed
and alternate financial models or service level target adjustments will be presented.
10
2.5 CityWide Software alignment with AMP
The plan will be built and developed hand in hand with a database of municipal infrastructure information
in the CityWide software suite of products.The software will ultimately contain the municipality's asset base,
valuation information, life cycle activity predictions, costs for activities,sustainability analysis, project
prioritization parameters, key performance indicators and targets, 10 year asset management strategy,
and the financial plan to deliver the required infrastructure budget.
The software and plan will be synchronized, and will evolve together year-to-year as more detailed
information becomes available.This synchronization will allow for ease of updates, modeling and scenario
building, and annual reporting of performance measures and results.This will allow for continuous
improvement of the plan and its projections.It is therefore recommended that it is revisited and updated
on an annual basis.
The following diagram outlines the various CityWide software products and how they align to the various
components of the AMP.
INFRASTRUCTURE-STRATEGIC PLAN
�♦ Strategic Plan Goals,Asset Performance&Community Expectations,
Legislated Requirements
ITvr,I_�_
STATE OF THE CURRENT INFRASTRUCTURE REPORTS dill TANGIBLE ASSETS
Asset Inventory,Valuation,Current Condition/Performance,
N) Sustainable FundingAnalysis
m
°
a)
EXPECTED LEVELS OF SERVICE wily WORKS
o Key Performance Indicators,Performance Measures,Public
° Engagement
.:ITYWIoE
CAPITAL PLANNING & ANALYSIS
o ASSET MANAGEMENT STRATEGY
v,
a) Lifecycle Analysis,Growth Requirements,Risk Management,Project
> Prioritization Methodologies
N
N
CITYWIDE
ON GIS
FINANCING STRATEGY
Available Revenue Analysis,Develop Optional Scenarios,Define
Optimal Budget&Financial Plan
I"TYWIDE
1 PERFORMANCE
AMP PERFORMANCE REPORTING
Project Implementation,Key Performance Measures Tracked, Progress
Reported to Senior Management&Council
11
3.0 State of the Infrastructure (SOTI)
3.1 Objective and Scope
Objective:To identify the state of the municipality's infrastructure today and the projected state in the
future if current funding levels and management practices remain status quo.
The analysis and subsequent communication tools will outline future asset requirements,will start the
development of tactical implementation plans,and ultimately assist the organization to provide cost
effective sustainable services to the current and future community.
The approach was based on the following key industry state of the infrastructure documents:
• Canadian Infrastructure Report Card
• City of Hamilton's State of the Infrastructure reports
• Other Ontario Municipal State of the Infrastructure reports
The above reports are themselves based on established principles found within key,industry best practices
documents such as:
• The National Guide for Sustainable Municipal Infrastructure (Canada)
• The International Infrastructure Management Manual (Australia/New Zealand)
• American Society of Civil Engineering Manuals (U.S.A.)
Scope: Within this State of the Infrastructure report,a high level review will be undertaken for the following
asset classes:
1. Road Network:Urban and rural,paved and gravel
2. Bridges&Culverts:Bridges and large culverts with a span greater than 3m
3. Water Network:Water mains,hydrants,meters,and valves
4. Sanitary Sewer Network:Sanitary sewer mains and facilities
3.2 Approach
..................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
The asset classes above were reviewed at a very high level due to the nature of data and information
available.Subsequent detailed reviews of this analysis are recommended on an annual basis, as more
detailed conditions assessment information becomes available for each infrastructure program.
3.2.1 Base Data
In order to understand the full inventory of infrastructure assets within Bayham, all tangible capital asset
data,as collected to meet the PSAB 3150 accounting standard,was loaded into the City Wide Tangible
AssetTM software module.This data base now provides a detailed and summarized inventory of assets as
used throughout the analysis within this report and the entire Asset Management Plan.
3.2.2 Asset Deterioration Review
Without detailed condition assessment,information captured holistically across entire asset networks (e.g.,
the entire road network),the deterioration review will rely on the 'straight line' amortization schedule
approach provided from the accounting data.Although this approach is not as accurate for entire life
cycle analysis as the use of detailed condition data, it does provide a reliable benchmark of future
requirements. Each asset is analyzed individually.Therefore,while there may be inaccuracies in the data
associated with any given asset,these imprecisions are minimized at the aggregate over entire asset
classes. It is a sound approach for a high level review.The one exception would be the bridge and culvert
assets for which actual field condition data was available and used.The condition data recalculates a
12
new performance age for each individual asset and, as such, a more accurate prediction of future
replacement can be established and applied to the future investment requirements within this AMP.
3.2.3 Identify Sustainable Investment Requirements
A gap analysis was performed to identify sustainable investment requirements for each asset category.
Information on current spending levels and budgets was acquired from the organization,future investment
requirements were calculated, and the gap between the two was identified.
The above analysis is performed by using investment and financial planning models, and life cycle costing
analysis,embedded within the CityWide software suite of applications.
3.2.4 Asset Rating Criteria
Each asset category will be rated on two key dimensions:
• Condition vs.Performance: Based on the condition of the asset today and how well performs its function.
• Funding vs.Need:Based on the actual investment requirements to ensure replacement of the asset at the right time,
versus current spending levels for each asset group.
3.2.5 Infrastructure Report Card
The dimensions above will be based on a simple 1-5 star rating system,which will be converted into a letter
grading system ranging from A-F. An average of the two ratings will be used to calculate the combined
rating for each asset class.The outputs for all municipal assets will be consolidated within the CityWide
software to produce one overall Infrastructure Report Card showing the current state of the assets.
Grading Scale: Condition vs. Performance
What is the condition of the asset today and how well does it perform its function?
Color
Star Rating Letter Grade IndicatorC '
***** A I Excellent:No noticeable defects
**** B Good:Minor deterioration
*** C Fair:Deterioration evident,function is affected
** D Poor:Serious deterioration.Function is inadequate
* F Critical:No longer functional.General or complete failure
Grading Scale: Funding vs. Need
Based on the actual investment requirements to ensure replacement of the asset at the right time,versus
current spending levels for each asset group.
Star Rating Letter Grade I Description
***** A Excellent:91 to 100%of need
**** B Good:76 to 90%of need
*** C Fair:61 to 75%of need
** D Poor:46-60%of need
* F Critical:under 45%of need
13
3.2.6 General Methodology and Reporting Approach
The report will be based on the seven key questions of asset management as outlined within the National
Guide for Sustainable Municipal Infrastructure:
• What do you own and where is it? (inventory)
• What is it worth? (valuation/replacement cost)
• What is its condition/remaining service life? (function&performance)
• What needs to be done? (maintain,rehabilitate,replace)
• When do you need to do it? (useful life analysis)
• How much will it cost? (investment requirements)
• How do you ensure sustainability? (long-term financial plan)
The above questions will be answered for each individual asset category in the following report sections.
14
3.3 Road Network
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3.3 Road Network
Note:The financial analysis in this section includes paved and tar and chip roads. Gravel roads are
excluded from the capital replacement analysis, as by nature, they require perpetual maintenance
activities and funding. However,the gravel roads have been included in the Road Network inventory and
replacement value tables.There is also further information regarding gravel roads in section 3.4 "Gravel
Roads-Maintenance Requirements" of this AMP.
3.3.1 What do we own?
Road Network Inventory
Asset Type Asset Component Quantity/Units
Guardrails Pooled
Base 1,335,214m2
Asphalt 261,510m2
Road Network Gravel 431,770m2
Sidewalks 23,074m2
Streetlights 367m
Tar&Chip 647,430m2
The road network data was extracted from the Tangible Capital Asset and G.I.S. modules of the CityWide
software suite.
3.3.2 What is it worth?
The estimated replacement value of the road network,in 2012 dollars,is approximately$21 million.The cost
per household for the road network (excluding gravel) is$6,744 based on 2,481 households.
Road Network Replacement Value
Asset 2012 Unit 2012 Overall
Type Asset Component Quantity/Units Replacement Replacement Cost
Cost
Guardrails Pooled NRBCPI $11,016
Base 1,335,214m2 $7.49/m2 $10,000,723
Asphalt 261,510m2 $12.06/m2 $3,153,811
Road Gravel 431,770m22
Network $10.00/m $4,093,700
Sidewalks 23,074m2 $59.20/m2 $1,365,987
Streetlights 367m $1,800.00 $660,600
Tar&Chip 647,430m2 $2.38/m2 $1,540,883
$20,826,720
16
The pie chart below provides a breakdown of each of the network components to the overall system
value.
Road Network Components
Base:510,000,722.90(48.02%)
Acphail:$3,153,810.60(15.14%)
Tar&Chip:51,540,883.40(7.40%)
Streetlights:S560,600.00(3.17%)
Sidewalks:$1,365,987.17(6.56%)
Guardrails:511,015.31(0.05%)
Gravel:54.093,700.00(19.66%) -
3.3.3 What condition is it in?
The majority,56%, of the municipality's road network is in fair to excellent condition,with the remaining 44%
in poor to critical condition.As such, the municipality received a Condition vs. Performance rating of `D+'.
Road Network Surface(Asphalt,Tar&Chip),Base and Sidewalks Condition by Area(m2)
800,000
/00,000
3
600,000 '"
1
500,0100
LI
400,000
300,000
200,000
100,000
0 1 Excellent Good #-a,r Poor Critical
17
3.3.4 What do we need to do to it?
There are generally four distinct phases in an asset's life cycle that require specific types of attention and
lifecycle activity.These are presented at a high level for the road network below. Further detail is provided
in the "Asset Management Strategy" section of this AMP.
Addressing Asset Needs
Phase Lifecycle Activity Asset Life Stage
:................................................................................................................._:......................
Activities such as inspections,monitoring,sweeping,winter
Minor maintenance 15}Qtr
control,etc.
:...................................................................................................................:..................................................................................................................................................................................................................................................................:.....................................................................................:
Activities such as repairing pot holes,grinding out roadway
Major maintenance 2nd Qtr
rutting,and patching sections of road.
Rehabilitation activities such as asphalt overlays,mill and
Rehabilitation 3rd Qtr
paves,etc.
:...................................................................................................................:..................................................................................................................................................................................................................................................................:.....................................................................................:
Replacement Full road reconstruction 4th Qtr
3.3.5 When do we need to do it?
For the purpose of this report, 'useful life' data for each asset class was obtained from the accounting data
within the CityWide software database.This proposed useful life is used to determine replacement needs of
individual assets.These needs are calculated and quantified in the system as part of the overall financial
requirements.
Asset Useful Life in Years
Asset Type Asset Component Useful Life
Guardrails 20
Base 80
Asphalt 15
Road Network Gravel 20
Sidewalks 50
Streetlights 20
Tar&Chip 15
:....................................................................................:..........................................................................................................................................................:........................................................................................:
As additional field condition information becomes available,the data can be loaded into the CityWide
system to increase the accuracy of current asset age and,therefore, that of future replacement
requirements.The following graph shows the projection of road network replacement costs based on the
age of the asset only.
18
Road Network Replacement Profile(excludes gravel roads)
59,000.000.00
58.000,000.00
57,000,000.00
56,000.000.00
56,400,000.00
54,000,000.00 MI 1.1
EEEO
El
1111
50.00 I
2012•2021 2022•2031 2032-2041 2042-2051 2052•2061 2062-2071 2012-2061 2082•2091 2092-2092
I Asphalt I Dias li guardrails li Sidewalks r streetlights I Tar a Chip
3.3.6 How much money do we need?
The analysis completed to determine capital revenue requirements was based on the following constraints
and assumptions:
1. Replacement costs are based upon the unit costs identified within the"What is it worth"section.
2. The timing for individual road replacement was defined by the replacement year as described in the"When do you
need to do it?"section.
3. All values are presented in (2012) dollars.
4. The analysis was run for an 80 year period to ensure all assets went through at least one iteration of replacement,
therefore providing a sustainable projection.
3.3.7 How do we reach sustainability?
Based upon the above parameters,the average annual revenue required to sustain Bayham's paved road
network is approximately$499,000. Based on Bayham's current annual funding of$551,000,there is an
annual surplus of$52,000.As such,the municipality received a Funding vs. Need rating of 'A'.The following
graph illustrates the expenditure requirements in five year increments against the sustainable funding
threshold line.
Sustainable Funding Requirements(excludes gravel roads)
56.000,000.00
55,000,000.00
54,000,000.00
I53.000,000.00 �I I.
::::::: $
I ! Ii . I1IIIJII1
2012-2016 2022•2026 2032-2036 2042-2046 2052-2056 2052•2066 2072-2076 2082-2086 2092•2092
2017•2021 2027-2031 2037-2041 2047-2051 2057-2061 2067-2071 2077-2081 2087-2091
I Asphalt `t;l Base I Guardrails Sidewalks • Streetlights
111 Tar 8:Chip II Average Annual Requirement(Total per Flve Year cloc()
19
In conclusion, based on age data only,there is a significant portion of the road network in poor and critical
condition,generating a backlog of needs totaling approximately$5.9 million in the next 5 years.The
implementation of a full condition assessment program for the road network should be an essential next
step to defining actual field requirements.A condition assessment program will aid in prioritizing overall
needs for rehabilitation and replacement and will assist with optimizing the long and short term budgets.
Further detail is outlined within the "asset management strategy" section of this AMP.
3.3.8 Recommendations
The municipality received an overall rating of 'B for its road network,calculated from the Condition vs.
Performance and the Funding vs. Need ratings.Accordingly,we recommend the following:
1. A condition assessment program should be established for the entire paved road network to gain a better
understanding of current condition and performance as outlined further within the"Asset Management Strategy"
section of this AMP.
2. As approximately 30%of the municipality's road network is gravel roads,a detailed study should be undertaken to assess
the overall maintenance costs of gravel roads and whether there is benefit to converting some gravel roads to paved,
or surface treated roads,thereby reducing future costs.This is further outlined within the"Asset Management Strategy"
section of this AMP.
3. Once the above studies are complete or underway,the condition data should be loaded into the Citywide software
and an updated"current state of the infrastructure"analysis should be generated.
4. An appropriate%of asset replacement value should be used for operations and maintenance activities on an annual
basis.This should be determined through a detailed analysis of 0&M activities and be added to future AMP reporting.
5. The Infrastructure Report Card should be updated on an annual basis.
20
3.4 Gravel Roads - Maintenance Requirements
3.4.1 Introduction
Paved roads are usually designed and constructed with careful consideration given to the correct shape
of the cross section.Once paving is complete the roadway will keep its general shape for the duration of its
useful life.Gravel roads are quite different. Many have poor base construction,will be prone to wheel track
rutting in wet weather, and traffic will continually displace gravel from the surface to the shoulder area,
even the ditch,during wet and dry weather.Maintaining the shape of the road surface and shoulder is
essential to ensure proper performance and to provide a sufficient level of service for the public.
Therefore,the management of gravel roads is not through major rehabilitation and replacement, but
rather through good perpetual maintenance and some minor rehabilitation which depend on a few basic
principles: proper techniques and cycles for grading;the use and upkeep of good surface gravel;and,
dust abatement and stabilization.
3.4.2 Maintaining a Good Cross Section
In order to maintain a gravel road properly, a good cross section is required consisting of a crowned driving
surface, a shoulder with correct slope, and a ditch.The crown of the road is essential for good drainage. A
road with no crown,or insufficient crown,will cause water to collect on the surface during a rainfall,will
soften the crust,and ultimately lead to rutting which will become severe if the subgrade also softens. Even if
the subgrade remains firm, traffic will cause depressions in the road where water collects and the road will
develop potholes.It is a generally accepted industry standard that 1.25cm per 12cm (one foot),
approximately 4%,on the cross slope is ideal for road crown.
The road shoulder serves some key functions. It supports the edge of the travelled portion of the roadway,
provides a safe area for drivers to regain control of vehicles if they are forced to leave the road, and finally,
carries water further away from the road surface.The shoulder should ideally meet the edge of the
roadway at the same elevation and then slope away gradually towards the ditch.
The ditch is the most important and common drainage structure for gravel roads. Every effort should be
made to maintain a minimal ditch.The ditch should be kept free of obstructions such as eroded soil,
vegetation or debris.
21
3.4.3 Grading Operations
Routine grading is the activity that ensures gravel roadways maintain a good cross section or proper profile.
The three key components to good grading are: operating speed, blade angle,and blade pitch.
Excessive operating speed can cause many problems such as inconsistent profile,and blade movement or
bouncing that can cut depressions and leave ridges in the road surface. It is generally accepted that
grader speed should not exceed 8km per hour.The angle of the blade is also critical for good
maintenance and industry standards suggest the optimal angle is between 30 and 45 degrees. Finally,the
correct pitch or tilt of the blade is very important.If the blade is pitched back too far,the material will tend
to build up in front of the blade and will not fall forward,which mixes the materials, and will move along
and discharge at the end of the blade.
3.4.4 Good Surface Gravel
Once the correct shape is established on a roadway and drainage matters are taken care of,attention
must be given to the placement of good gravel.Good surface gravel requires a percentage of stone
which gives strength to support loads, particularly in wet weather. It also requires a percentage of sand size
particles to fill the voids between the stones which provide stability. And finally,a percentage of plastic
fines are needed to bind the material together which allows a gravel road to form a crust and shed water.
Typical municipal maintenance routines will include activities to ensure a good gravel surface through both
spot repairs (often annually) and also re-graveling of roadways (approximately every five years).
3.4.5 Dust Abatement and stabilization
A typical maintenance activity for gravel roads also includes dust abatement and stabilization. All gravel
roads will give off dust at some point, although the amount of dust can vary greatly from region to region.
The most common treatment to reduce dust is the application of Calcium Chloride,in flake or liquid form,
or Magnesium Chloride, generally just in liquid form.Of course,there are other products on the market as
well.Calcium and Magnesium Chloride can be very effective if used properly.They are hygroscopic
products which draw moisture from the air and keep the road surface constantly damp.In addition to
alleviating dust issues,the continual dampness also serves to maintain the loss of fine materials within the
gravel surface,which in turn helps maintain road binding and stabilization. A good dust abatement
program can actually help waterproof and bind the road,in doing so can reduce gravel loss,and
therefore, reduce the frequency of grading.
3.4.6 The Cost of Maintaining Gravel Roads
We conducted an industry review to determine the standard cost for maintaining gravel roads. However,it
became apparent that no industry standard exists for either the cost of maintenance or for the frequency
at which the maintenance activities should be completed. Presented below, as a guideline only, are two
studies on the maintenance costs for gravel roads:
3.4.7 Minnesota Study (2005)
The first study is from the Minnesota Department of Transportation (MnDOT) Local Road Research Board
(LRRB),where the researchers looked at historical and estimated cost data from multiple counties in
Minnesota.
The study team found that the typical maintenance schedule consisted of routine grading and re-
graveling with two inches of new gravel every five years.They found that a typical road needed to be
graded 21 times a year or three times a month from April-October,and the upper bound for re-graveling
was five years for any road over 100 ADT;lower volume roads could possibly go longer.The calculated
costs including materials, labour,and hauling totaled$1,400 per year or$67 per visit for the grading activity
and$13,800 for the re-gravel activity every five years.The re-gravel included an estimate gravel cost of
$7.00 per cubic yard and a 2.5"thick lift of gravel (to be compacted down to 2").Therefore,they
developed an average estimated annual maintenance cost for gravel roads at$4,160 per mile.This
converts to$2,600 per km of roadway and if adjusted for inflation into 2012 dollars,using the Non-
Residential Building Construction Price Index (NRBCPI), it would be$3,500.
Reference:Jahren, Charles T. et. al. "Economics of Upgrading an Aggregate Road,"Minnesota Department of
Transportation, St. Paul,Mn,January 2005.
22
3.4.8 South Dakota study (2004)
This second study was conducted by South Dakota's Department of Transportation (SDDOT).The default
maintenance program for gravel roads from SDDOT's report includes grading 50 times per year,re-
graveling once every six years, and spot graveling once per year.The unit cost for grading was very similar
to Minnesota at$65 per mile,re-gravel at$7,036 per mile and spot graveling or pothole repair at$2,420 per
mile,totaling to an average annual maintenance cost of$6,843 per mile. Due to the frequency of the
grading activity and the addition of the spot gravel maintenance,the SDDOT number is higher than
Minnesota reported even though the re-gravel activity is reported at about half of the price in Minnesota.
This converts to$4,277 per km of roadway and if adjusted for inflation into 2012 dollars,using the NRBCPI,it
would be$5,758.
Reference:Zimmerman, K.A. and A.S. Wolters. "Local Road Surfacing Criteria,"South Dakota Department of
Transportation,Pierre, SD, June 2004.
3.4.9 Ontario Municipal Benchmarking Initiative (OMBI)
One of the many metrics tracked through the Ontario Municipal Benchmarking Initiative is the "Operating
costs for Unpaved (Loose top) Roads per lane Km." As referenced from the OMBI data dictionary,this
includes maintenance activities such as dust suppression, loose top grading, loose top gravelling,spot base
repair and wash out repair.
Of the six Ontario municipalities that included 2012 costs for this category,there is a wide variation in the
reporting.The highest cost per lane km was$14,900 while the lowest cost was$397.The average cost was
$6,300 per lane km.Assuming two lanes per gravel road to match the studies above,the Ontario OMBI
average becomes$12,600 per km of roadway.
Summary of Costs
Source 2012 Maintenance Cost per km
(adjusted for inflation using NRBCPI)
Minnesota Study $3,500
:.........................................................................................................................................................................:...........................................................................................................................................................................................:
South Dakota Study $5,758
:.........................................................................................................................................................................:...........................................................................................................................................................................................:
OMBI Average (six municipalities) 12,600
:.........................................................................................................................................................................:............................................................................................................................................................................................:
3.4.10 Conclusion
As discussed above,there are currently no industry standards in regards to the cost of gravel road
maintenance and the frequency at which the maintenance activities should be completed.Also,there is
no established benchmark cost for the maintenance of a km of gravel road and the numbers presented
above will vary significantly due to the level of service or maintenance that's provided (i.e.,frequency of
grading cycles and re-gravel cycles).
23
3.5 Bridges & Culverts
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3.5 Bridges & Culverts
3.5.1 What do we own?
As shown in the summary table below,the municipality owns 10 bridges and 7 large culverts.
Bridges & Culverts Inventory
Asset Type Asset Component Quantity/Units
Bridges 1,747m2
Bridges&Culverts
Culverts 1,169m2
The bridges &culverts data was extracted from the Tangible Capital Asset and G.I.S. modules of the
CityWide software suite.
3.5.2 What is it worth?
The estimated replacement value of the municipality's bridges &culverts, in 2012 dollars,is approximately
$6.2 million.The cost per household for bridges & culverts is$2,486 based on 2,481 households.
Bridges & Culverts Replacement Value
Asset Type Asset Component Quantity/Units 2012 Unit 2012 Replacement
Replacement Cost Cost
Bridges& Bridges 1,747m2 NRBCPI $5,758,206
Culverts Culverts 1,169m2 NRBCPI $410,368
$6,168,575
The pie chart below provides a breakdown of each of the bridges & culverts components to the overall
structures value.
Bridges&Culverts Components
ridges:55,758,206.33(93.35%)
Culverts:$410,369.43(6.55%)
25
3.5.3 What condition is it in?
The vast majority, 76%, of the municipality's bridges &culverts are in critical condition. As such,the
municipality received a Condition vs. Performance rating of 'D.
Bridges&Culverts Condition by Area(m2)
Z400
2,200
2,000
1,800
1,600
1,400
1,200
1,000
B00
600
400
200
0
Excellent Good Far floor
3.5.4 What do we need to do to it?
There are generally four distinct phases in an asset's life cycle.These are presented at a high level for the
bridge and culvert structures below. Further detail is provided in the "Asset Management Strategy" section
of this AMP.
Addressing Asset Needs
Phase Lifecycle Activity Asset Life Stage
Minor Maintenance Activities such as inspections,monitoring,sweeping,winter control,etc. 1 sf Qtr
Activities such as repairs to cracked or spalled concrete,damaged
Major Maintenance 2nd Qtr
expansion joints, bent or damaged railings,etc.
Rehabilitation events such as structural reinforcement of structural
Rehabilitation 3rd Qtr
elements,deck replacements,etc.
Replacement Full structure reconstruction 4th Qtr
26
3.5.5 When do we need to do it?
For the purpose of this report, `useful life' data for each asset class was obtained from the accounting data
within the CityWide software database.This proposed useful life is used to determine replacement needs of
individual assets,which are calculated in the system as part of the overall financial requirements.
Asset Useful Life in Years
Asset Type Asset Component Useful Life in
Years
Bridges&Culverts Bridges 40
Culverts 40
As additional field condition information becomes available,the data can be loaded into the CityWide
system to increase the accuracy of current asset age and,therefore,that of future replacement
requirements.The following graph shows the projection of road network replacement costs based on the
age of the asset only.The following graph shows the current projection of structure replacements based on
the age of the asset only.
Structures Replacement Profile
56,004,000.00
55,400,000.00
S4,ouo,000.00
$3,000,000.00
52,004,000.00
S1,000,000.00
SO.00 — - - _
2012-2021 2022-2031 2032-2041 2042-2051 2052-2052
eHdeas I advets
3.5.6 How much money do we need?
The analysis completed to determine capital revenue requirements was based on the following constraints
and assumptions:
1. Replacement costs are based upon the"What is it worth"section above.
2. The timing for individual structure replacement was defined by the replacement year as described in the"When do you
need to do it?"section above.
3. All values are presented in 2012 dollars.
4. The analysis was run for a 40 year period to ensure all assets cycled through at least one iteration of replacement,
therefore providing a sustainable projection.
27
3.5.7 How do we reach sustainability?
Based upon the above assumptions,the average annual revenue required to sustain Bayham's bridges &
culverts is$154,000. Based on Bayham's current annual funding of$0,there is an annual deficit of$154,000.
As such,the municipality received a Funding vs. Need rating of 'F'.The following graph presents five year
blocks of expenditure requirements against the sustainable funding threshold line.
Sustainable Revenue Requirement
$5,000,000.00
$4,000,660.00 t
1
53,066,006.66 �I
$2.000,000.00 I
$1.000,000.00 �I
U
$0.60 :�, —�r - .�
2002-2616 2017-2021 2022-2025 2027-2031 2032.2936 2037-2041 2042-2046 2047-2901 2052-2002
1 !ridge* • culvert! g Average Annual Requirement(Total per Five Year Meek)
In conclusion, based on the age data only, the majority of bridges and large structures are in critical
condition.There is a significant backlog of needs to be addressed within the next 5 years totaling
approximately$4.8 million.Structures are one of the highest liability assets a municipality owns and
therefore a high priority would be to establish a condition assessment program and/or enter completed
condition results into the CityWide software for further analysis. A full analysis of field condition will aid in
prioritizing overall needs for rehabilitation and replacement and will assist with optimizing the long and short
term budgets. Further detail is outlined within the "asset management strategy"section of this AMP.
3.5.8 Recommendations
The municipality received an overall rating of 'F' for its bridges &culverts,calculated from the Condition vs.
Performance and the Funding vs. Need ratings.Accordingly,we recommend the following:
1. As a result of the condition assessment policy and the subsequent OSIM inspections,condition data should be loaded
into the Citywide software and an updated 'current state of the infrastructure' analysis should be generated.
2. An appropriate%of asset replacement value should be used for operations and maintenance activities on an annual
basis.This should be determined through a detailed analysis of 0&M activities and added to future AMP reporting.
3. The Infrastructure Report Card should be updated on an annual basis.
28
3.6 Water Network
INFRASTRUCTURE REPORT CARD GRADE
X_
3.6 Water Network
3.6.1 What do we own?
Bayham is responsible for the following water network inventory which includes approximately 32km of
water mains:
Water Network Inventory
Asset Type Asset Component Quantity/Units
Mains-Local (38mm) 50m
Mains-Local (50mm) 650m
Mains-Local (150mm) 16,500m
Mains-Local (200mm) 3,800m
Mains-Local (250mm) 10,820m
Water Curb Stops 750
Water Hydrants 322
Water Meters 1,510
Water Network Main Valves-2" 24
Main Valves-4" 2
Main Valves-6" 229
Main Valves-8" 61
Main Valves- 10" 61
Main Valves- 12" 10
Secondary Valves-6" 124
Air Release Valves- 1" 6
Air Release Valves-4" 1
The water network data was extracted from the Tangible Capital Asset and G.I.S. modules of the Citywide
software suite.
3.6.2 What is it worth?
The estimated replacement value of the water network,in 2012 dollars, is approximately$25 million.The
cost per household for the water network is$28,394 based on 878 households.
30
I .
Water Network Replacement Value
2012 Unit 2012 Overall
Asset Type Asset Component Quantity Replacement
Cost Replacement Cost
Mains-Local (38mm) 50m $396/m $19,800
Mains-Local (50mm) 650m $398/m $258,700
Mains-Local (150mm) 16,500m $569/m $9,388,500
Mains-Local (200mm) 3,800m $649/m $2,466,200
Mains-Local (250mm) 10,820m $709/m $7,671,380
Water Curb Stops 750 $1,125 $843,750
Water Hydrants 322 $500 $1,610,000
Water Meters 1,510 $425 $641,750
Water
Main Valves-2" 24 $1,260 $30,240
Network
Main Valves-4" 2 $2,950 $5,900
Main Valves-6" 229 $4,000 $916,000
Main Valves-8" 61 $4,800 $292,800
Main Valves-10" 61 $5,200 $317,200
Main Valves-12" 10 $6,000 $60,000
Secondary Valves-6" 124 $3,200 $396,800
Air Release Valves-1" 6 $1,500 $9,000
Air Release Valves-4" 1 $2,300 $2,300
$24,930,320
The pie chart below provides a breakdown of each of the network components to the overall system
value.
Water Network Components
Water Hydrants:$1,610,000.00(6.46%)
Water Curb Stops:$843,750.00(3.3845)
Water Mains:$19,804,560.00(79.441x)
Water Valves:$2,030,240.00(8.14N,)
Water Meters:$641,750.00(2.571x)
31
3.6.3 What condition is it in?
Nearly 100%the municipality's water mains are in fair to excellent condition,with some appurtenances
being in critical condition.As such,the municipality received a Condition vs. Performance rating of 'B+'.
Water Mains Condition by Length(metres)
16,000
14,000
12,000
10,000
6,000
6,000
4,000
2,000
0
Excellent Good Fair Poor Critical
3.6.4 What do we need to do to it?
There are generally four distinct phases in an asset's life cycle.These are presented at a high level for the
water network below. Further detail is provided in the "Asset Management Strategy"section of this AMP.
Addressing Asset Needs
Phase Lifecycle Activity Asset Age
Minor Maintenance Activities such as inspections,monitoring,cleaning and flushing,
hydrant flushing,pressure tests,visual inspections,etc. 1st Qtr
...................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
Major Maintenance Such events as repairing water main breaks,repairing valves,
replacing individual small sections of pipe etc. 2nd Qtr
Rehabilitation Rehabilitation events such as structural lining of pipes and a
cathodic protection program to slow the rate of pipe deterioration. 3rd Qtr
Replacement Pipe replacements 4th Qtr
32
3.6.5 When do we need to do it?
For the purpose of this report "useful life" data for each asset class was obtained from the accounting data
within the CityWide software database.This proposed useful life is used to determine replacement needs of
individual assets,which are calculated in the system as part of the overall financial requirements.
Asset Useful Life in Years
Asset Type Asset Component Useful Life in
Years
Mains-Local (38mm) 100
Mains-Local (50mm) 100
Mains-Local (150mm) 100
Mains-Local (200mm) 100
Mains-Local (250mm) 100
Water Curb Stops 35
Water Hydrants 35
Water Meters 35
Water Network Main Valves-2" 35
Main Valves-4" 35
Main Valves-6" 35
Main Valves-8" 35
Main Valves-10" 35
Main Valves-12" 35
Secondary Valves-6" 35
Air Release Valves-1" 35
Air Release Valves-4" 35
As field condition information becomes available in time,the data should be loaded into the CityWide
system in order to increasingly have a more accurate picture of current asset age and condition,therefore,
future replacement requirements.The following graph shows the current projection of water main
replacements based on the age of the assets only.
Water Network Replacement Profile
$15,000,000.00
$16,000,000.00
$14,000,000.00
$12,000,000.00
$10,000,000.00
$8,000,000.00
$5,000,000.00
$4.000.000.00
$2,000,000.00
$0.00
2012-2021 2022-2031 2032-2041 2042-2051 2052-2061 2062-2071 2072-2081 2082-2091 2092-2101 2102-2111 2112-2112
Water Curb Stmps, Water Hydrants N Water Mains Water Meters , Water Valves
33
3.6.6 How much money do we need?
The analysis completed to determine capital revenue requirements was based on the following
assumptions:
Replacement costs are based upon the unit costs identified within the"What is it worth"section above.
2. The timing for individual water main replacement was defined by the replacement year as described in the"When do
you need to do it?"section above.
3. All values are presented in 2012 dollars.
4. The analysis was run for a 100 year period to ensure all assets went through at least one iteration of replacement,
therefore providing a sustainable projection.
3.6.7 How do we reach sustainability?
Based upon the above assumptions,the average annual revenue required to sustain Bayham's water
network is approximately$345,000. Based on Bayham's current annual funding of approximately$105,000
there is a deficit of$240,000. As such,the municipality received a Funding vs. Need rating of 'F'.The
following graph presents five year blocks of expenditure requirements against the sustainable funding
threshold line.
Sustainable Revenue Requirements
$10,000,000.00
$9,000,000.00
$6,000,000.00
$7,000,000.00
$6,000.000.00
$5,000,000.00
$4,000,000.00
$3,060,000.00
$2,000,000.00
$1,aoa,o .00
$0
#o.00 0�
2012-2016 2022-2026 2032-2036 2042-2046 2052-2056 2062-2066 2072-2076 20132-20136 2092-2096 2102-2106 2112-2112
2017-2021 2027-2031 2037-2041 2047-2051 2057-2061 2067-2071 2077-20131 2067-2091 2097-2101 2107-2111
▪ Water Curb Steps , Water Hydrants Water pains , Water Meters
▪ Water Valrw , Average Annual Mcguirement(Total per F Year Hock)
In conclusion, Bayham's water distribution network is generally in good condition based on age data only.
There are, however, a number of hydrants and valves at the end of their useful lives generating needs
totaling approximately$2 million in the next 5 years.A better understanding of field performance for the
entire water distribution network should be undertaken as outlined further within the Asset Management
Strategy portion of this Asset Management Plan.
3.6.8 Recommendations
The municipality received an overall rating of 'D+' for its water network,calculated from the Condition vs.
Performance and the Funding vs. Need ratings.Accordingly,we recommend the following:
A more detailed study to define the current condition of the water network should be undertaken as described further
within the"Asset Management Strategy"section of this AMP.
2. Once the above study is complete,a new performance age should be applied to each water main and an updated
"current state of the infrastructure"analysis should be generated.
3. An appropriate%of asset replacement value should be used for operations and maintenance activities on an annual
basis.This should be determined through a detailed analysis of 0&M activities and be added to future AMP reporting.
4. The Infrastructure Report Card should be updated on an annual basis.
34
3.7 Sanitary Sewer Network
1:41) +
INFRASTRUCTURE REPORT CARD GRADE
/ Ilk 10.116*- "11111.001.-
*41W -
y
•
.y t2
.
Sr
Br-
3.7 Sanitary Sewer Network
........................................................................................................................ .................................................
3.7.1 What do we own?
The inventory components of the sanitary sewer network are outlined in the table below.The entire
Network consists of approximately 47km of sewer main.
Sanitary Sewer Inventory
Asset Type Asset Component Quantity/Units
Sewer Mains-Local (50mm) 800m
Sewer Mains-Local (200mm) 17,190m
Sewer Mains-Local (250mm) 4,700m
Sewer Mains-Local (300mm) 260m
Sewer Mains-Local (350mm) 3,050m
..................................................................................................................................................................................................:..............................................................................................:
Sanitary Sewer Forcemains-Local (50mm) 4,000m
Sewer
NetworkSewer Forcemains-Local (100mm) 4,950m
:...................................................................................................................................................................................................:.............................................................................................:
Sewer Forcemains-Local (150mm) 800m
:...................................................................................................................................................................................................:........................................................................................
Sewer Forcemains-Local (200mm) 6,000m
:...................................................................................................................................................................................................:.......................................................
Sewer Forcemains-Local (250mm) 5,000m
:...................................................................................................................................................................................................:.............................................................................................:
Sewer Air Release Valves Pooled
Sewage Treatment 28
The Sanitary Sewer Network data was extracted from the Tangible Capital Asset and G.I.S. modules of the
City Wide software application.
3.7.2 What is it worth?
The estimated replacement value of the sanitary sewer network, in 2012 dollars, is approximately$43
million.The cost per household for the sanitary network is $36,130 based on 1,194 households.
Sanitary Sewer Replacement Value
Asset Type Asset Component Quantity 2012 Unit 2012 Overall
Replacement Cost Replacement Cost
Sewer Mains-Local (50mm) 800m $436/m $348,800
:.....................................................................................................................................................................................................:.....................................................................:..........................................................................................:..............................................................................................................:
Sewer Mains-Local (200mm) 17,190m $845/m $14,525,550
Sewer Mains-Local (250mm) 4,700m $886/m $4,164,200
Sewer Mains-Local (300mm) 260m $1,051/m $273,260
Sewer Mains-Local (350mm) 3,050m $1,280/m $3,904,000
Sanitary Sewer Forcemains-Local (50mm) 4,000m $405/m $162,000
Sewer
Network Sewer Forcemains-Local (100mm) 4,950m $440/m $2,178,000
Sewer Forcemains-Local (150mm) 800m $649/m $519,200
Sewer Forcemains-Local (200mm) 6,000m $729/m $4,374,000
Sewer Forcemains-Local (250mm) 5,000m $838/m $4,190,000
Sewer Air Release Valves Pooled $2,850 $205,655
Sewage Treatment 28 NRBCPI $8,294,878
$43,139,542
36
The pie chart below provides a breakdown of each of the network components to the overall system
value.
Sanitary Sewer Network Components
Sewer Air Release Valves:$205,654.21(0.4800(
Sewer Forcemains:511,423,200.00(26.4800)
Sewage Treatment:$8,294,811.53(19.234b0
Sewer Mains:$23,215,810.00(53.8208(
3.7.3 What condition is it in?
All 100%of the municipality's sanitary sewer assets are in fair to excellent condition.As such,the
municipality received a Condition vs. Performance rating of `B+'.
Sanitary Sewer Mains &Forcemains Condition by Length(m) Sewage Facilities Condition by Replacement Cost
36.,081 13,200,000.00
32,000
82.800,000.00
28,000 Y(
82.400.000.00
24.900
32,900,909A0
20,000
$1,600,000-00
18,000
$1,200,000.00
12.000
13,000 3800.000.00
4,000. (400,000.00
9 30.00
U[0,0,1 Goad ra,.. Pour 00[zai [xddlent Good Fair Poor
37
3.7.4 What do we need to do to it?
There are generally four distinct phases in an assets life cycle.These are presented at a high level for the
sanitary sewer network below. Further detail is provided in the "Asset Management Strategy" section of this
AMP.
Addressing Asset Needs
Phase Lifecycle Activity Asset Life Stage
Activities such as inspections,monitoring,cleaning and flushing,zoom
Minor Maintenance
camera and CCTV inspections,etc. 1St Qtr
Activities such as repairing manholes and replacing individual small
Major Maintenance
sections of pipe. 2nd Qtr
Rehabilitation events such as structural lining of pipes are extremely cost
Rehabilitation
effective and provide an additional 75 plus years of life. 3rd Qtr
Replacement Pipe replacements 4th Qtr
3.7.5 When do we need to do it?
For the purpose of this report "useful life" data for each asset class was obtained from the accounting data
within the CityWide software database.This proposed useful life is used to determine replacement needs of
individual assets,which are calculated in the system as part of the overall financial requirements.
Asset Useful Life in Years
Asset Type Asset Component Useful Life in Years
Sewer Mains-Local (50mm) 100
Sewer Mains-Local(200mm) 100
Sewer Mains-Local (250mm) 100
Sewer Mains-Local (300mm) 100
Sewer Mains-Local (350mm) 100
Sanitary Sewer Sewer Forcemains-Local (50mm)........................ 100.......................................
Network Sewer Forcemains-Local (100mm) 100
Sewer Forcemains-Local (150mm) 100
Sewer Forcemains-Local (200mm) 100
Sewer Forcemains-Local (250mm) 100
Sewer Air Release Valves 35
Sewage Treatment 75
As field condition information becomes available in time,the data should be loaded into the CityWide
system in order to increasingly have a more accurate picture of current asset performance age and,
therefore,future replacement requirements.The following graph shows the current projection of sanitary
sewer main replacements based on the age of the asset only.
38
Sanitary Sewer Network Replacement Profile
$30,000,000.00
$20,030,000.00
$26,000,000.00
$24,000,000.00
$22,006,000.00
$20,030,000.00
$18,000,000.00
$26.000,000.00
$14,000,000.00
$12.000,000.00
$10,000,000.00
$8,000,000.00
$6,000,000.00
$4,000,000.00
$2.000,0$0.00 MCP
F
$0.00
2012-2021 2022-2031 2032-2041 2042-2051 2052-2051 2062-2071 2072-2081 2082-2091 2092-21(1 2102-2111 2112-2102
• Sewage Treatment r Sewer Air Release Valves II Sewer Forcemanis Sewer Mains
3.7.6 How much money do we need?
The analysis completed to determine capital revenue requirements was based on the following
assumptions:
1. Replacement costs are based upon the unit costs identified within the"What is it worth"section above.
2. The timing for individual sewer main replacement was defined by the replacement year as described in the"When do
you need to do it?"section above.
3. All values are presented in 2012 dollars.
4. The analysis was run for a 100 year period to ensure all assets went through at least one iteration of replacement,
therefore providing a sustainable projection.
3.7.7 How do we reach sustainability?
Based upon the above assumptions,the average annual revenue required to sustain Bayham's sanitary
sewer network is approximately$601,000. Based on Bayham's current annual funding of$217,000 there is
an annual deficit of$384,000.As such,the municipality received a Funding vs. Need rating of 'F'.The
following graph presents five year blocks of expenditure requirements against the sustainable funding
threshold line.
Sustainable Revenue Requirements
$30.000,000.00
$28,000,000.00
$26.000,000.00
$24,000,000.00
$22,000,000.00
$20,000,000.00
$18,000,000.00
$16,000,000.00
$14.000,000.00
$12,000,000.00
$10,000.000.00
$6,0130,000.00
$6,000,000.00
$4,000,000.00
$2,000,000.00
.IIMiEMMMOMMM • — ■� �.�. ii
2012-2016 2022-2026 2032-2036 2042-2046 2052-2056 2062-2066 2072-207E 2002-2036 2092-2096 2182-2106 2112-2112
2017-2021 2027-2031 2037-2041 2047-2051 2057-2061 2067-2071 2077-2081 2081-2091 2097-2101 2107-2111
. Sewage Treatment . Sewer Air Release Valves , Sewer Farcemains
Sewer Mains , Average Annual Requirement(Total per Ave Year aleck)
39
In conclusion based on age data only,the sanitary sewer network is generally in very good condition and
the sanitary facilities are in fair to good condition.There are some minor replacement requirements for the
sanitary facilities shown in the projections above.It should be noted, however, that a condition assessment
program would outline any pipes and/or facilities that have accelerated deterioration and could be good
candidates for a rehabilitation or replacement program.This is discussed further in the Asset Management
Strategy portion of the Asset Management Plan.
3.7.8 Recommendations
The municipality received an overall rating of 'D+' for its sanitary sewer network,calculated from the
Condition vs. Performance and the Funding vs. Need ratings. Accordingly,we recommend the following:
1. A condition assessment program should be established for the sanitary sewer network to gain a better understanding of
current condition and performance as outlined further within the"Asset Management Strategy"section of this AMP.
2. Also,a detailed study to define the current condition of the sanitary facilities and their components(structural,
architectural,electrical,mechanical,process,etc)should be undertaken,as collectively they account for
approximately 20%of the sanitary infrastructure's value.
3. Once the above studies are complete or underway,the condition data should be loaded into the CityWide software
and an updated"current state of the infrastructure"analysis should be generated.
4. An appropriate%of asset replacement value should be used for operations and maintenance activities on an annual
basis.This should be determined through a detailed analysis of 0&M activities and be added to future AMP reporting.
5. The Infrastructure Report Card should be updated on an annual basis.
40
4.0 Infrastructure Report Card
CUMULATIVE GPA
Infrastructure Report Card
D +
1. Each asset category was rated on two key,equally weighted(50/50)dimensions:Condition vs.Performance,and Funding vs.Need.
2. See the"What condition is it in?"section for each asset category for its star rating on the Condition vs.Performance dimension.
3. See the"How do we reach sustainability?"section for each asset category for its star rating on the Funding vs.Need dimension.
4. The'Overall Rating'below is the average of the two star ratings converted to a letter grade.
I �
Asset Condition vs. Funding vs. Overall Comments
Category Performance Need Grade
The majority,56%,of the municipality's road network is in fair to excellent
condition,with the remaining 44%in poor to critical condition.The
RoadD+ average annual revenue required to sustain Bayham's paved road
Network network is approximately$499,000.Based on Bayham's current annual
funding of$551,000,there is an annual surplus of$52,000.
The vast majority,76%,of the municipality's bridges&culverts are in
Bridges& critical condition.The average annual revenue required to sustain
Culverts p F Bayham's bridges&culverts is$154,000.Based on Bayham's current
annual funding of$0,there is an annual deficit of$154,000.
Nearly 100%the municipality's water mains and facilities are in fair to
excellent condition,while 1/3 of its appurtenances are in critical
Water condition.The average annual revenue required to sustain Bayham's
Network B+ F water network is approximately$345,000.Based on Bayham's current
annual funding of$105,000,there is a deficit of$240,000.
All 100%of the municipality's sanitary sewer assets are in fair to excellent
Sanitary condition.The average annual revenue required to sustain Bayham's
Sewer B+ F D+ sanitary sewer network is approximately$601,000.Based on Bayham's
Network current annual funding of$217,000,there is an annual deficit of$384,000.
41
5.0 Desired Levels of Service
Desired levels of service are high level indicators,comprising many factors,as listed below,which establish
defined quality thresholds at which municipal services should be supplied to the community.They support
the organisation's strategic goals and are based on customer expectations,statutory requirements,
standards,and the financial capacity of a municipality to deliver those levels of service.
Levels of Service are used:
• to inform customers of the proposed type and level of service to be offered;
• to identify the costs and benefits of the services offered;
• to assess suitability,affordability and equity of the services offered;
• as a measure of the effectiveness of the asset management plan
• as a focus for the AM strategies developed to deliver the required level of service
In order for a municipality to establish a desired level of service,it will be important to review the key factors
involved in the delivery of that service,and the interactions between those factors. In addition,it will be
important to establish some key performance metrics and track them over an annual cycle to gain a
better understanding of the current level of service supplied.
Within this first Asset Management Plan, key factors affecting level of service will be outlined below and
some key performance indicators for each asset type will be outlined for further review.This will provide a
framework and starting point from which the municipality can determine future desired levels of service for
each infrastructure class.
5.1 Key factors that influence a level of service:
• Strategic and Corporate Goals
• Legislative Requirements
• Expected Asset Performance
• Community Expectations
• Availability of Finances
5.1.1 Strategic and Corporate Goals
Infrastructure levels of service can be influenced by strategic and corporate goals.Strategic plans spell out
where an organization wants to go, how it's going to get there, and helps decide how and where to
allocate resources, ensuring alignment to the strategic priorities and objectives . It will help identify priorities
and guide how municipal tax dollars and revenues are spent into the future.The level of importance that a
community's vision is dependent upon infrastructure,will ultimately affect the levels of service provided or
those levels that it ultimately aspires to deliver.
5.1.2 Legislative Requirements
Infrastructure levels of service are directly influenced by many legislative and regulatory requirements. For
instance,the Safe Drinking Water Act,the Minimum Maintenance Standards for municipal highways,
building codes, and the Accessibility for Ontarians with Disabilities Act are all legislative requirements that
prevent levels of service from declining below a certain standard.
5.1.3 Expected Asset Performance
A level of service will be affected by current asset condition, and performance and limitations in regards to
safety,capacity,and the ability to meet regulatory and environmental requirements. In addition,the
design life of the asset,the maintenance items required,the rehabilitation or replacement schedule of the
asset,and the total costs,are all critical factors that will affect the level of service that can be provided.
5.1.4 Community Expectations
Levels of services are directly related to the expectations that the general public has from the
infrastructure. For example,the public will have a qualitative opinion on what an acceptable road looks
like,and a quantitative one on how long it should take to travel between two locations. Infrastructure costs
42
are projected to increase dramatically in the future,therefore it is essential that the public is not only
consulted, but also be educated,and ultimately make choices with respect to the service levels that they
wish to pay for.
5.1.5 Availability of Finances
Availability of finances will ultimately control all aspects of a desired level of service.Ideally,these funds
must be sufficient to achieve corporate goals, meet legislative requirements,address an asset's life cycle
needs, and meet community expectations. Levels of service will be dictated by availability of funds or
elected officials' ability to increase funds, or the community's willingness to pay.
5.2 Key Performance Indicators
Performance measures or key performance indicators (KPIs) that track levels of service should be specific,
measurable, achievable,relevant, and timebound (SMART).Many good performance measures can be
established and tracked through the CityWide suite of software products. In this way,through automation,
results can be reviewed on an annual basis and adjustments can be made to the overall asset
management plan,including the desired level of service targets.
In establishing measures, a good rule of thumb to remember is that maintenance activities ensure the
performance of an asset and prevent premature aging,whereas rehab activities extend the life of an
asset. Replacement activities, by definition,renew the life of an asset. In addition,these activities are
constrained by resource availability (in particular,finances) and strategic plan objectives.Therefore,
performance measures should not just be established for operating and maintenance activities, but also for
the strategic,financial,and tactical levels of the asset management program.This will assist all levels of
program delivery to review their performance as part of the overall level of service provided.
This is a very similar approach to the "balanced score card" methodology,in which financial and non-
financial measures are established and reviewed to determine whether current performance meets
expectations.The "balanced score card", by design, links day to day operations activities to tactical and
strategic priorities in order to achieve an overall goal, or in this case,a desired level of service.
The structure of accountability and level of indicator with this type of process is represented in the following
table, modified from the InfraGuide's best practice document, "Developing Indicators and Benchmarks"
published in April 2003.
43
LEVEL OF INDICATOR MUNICIPAL STRUCTURE
COUNCIL
STRATEGIC
CAO
I
TACTICAL CITY ENGINEER
TACTICAL& WATER ROAD MANAGER
OPERATIONAL MANAGER
As a note,a caution should be raised over developing too many performance indicators that may result in
data overload and lack of clarity. It is better to develop a select few that focus in on the targets of the
asset management plan.
Outlined below for each infrastructure class is a suggested service description,suggested service scope,
and suggested performance indicators.These should be reviewed and updated in each iteration of the
AMP.
5.3 Transportation Services
5.3.1 Service Description
The municipality's transportation network comprises asphalt, tar&chip and gravel roads, 10 bridges, 7
large culverts,sidewalks,and street lights.
Together,the above infrastructure enables the municipality to deliver transportation and pedestrian facility
services and give people a range of options for moving about in a safe and efficient manner.
44
5.3.2 Scope of Services
• Movement-providing for the movement of people and goods.
• Access-providing access to residential,commercial,and industrial properties and other community amenities.
• Recreation-providing for recreational use,such as walking,cycling,or special events such as parades.
5.3.3 Performance Indicators (reported annually)
Performance Indicators (reported annually)
Strategic Indicators • percentage of total reinvestment compared to asset replacement value
• completion of strategic plan objectives(related to transportation)
• annual revenues compared to annual expenditures
Financial Indicators ■ annual replacement value depreciation compared to annual expenditures
■ total cost of borrowing compared to total cost of service
■ revenue required to maintain annual network growth
....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
• percentage of road network rehabilitated/reconstructed
• value of bridge/large culvert structures rehabilitated or reconstructed
• overall road condition index as a percentage of desired condition index
• overall bridge condition index as a percentage of desired condition index
• annual adjustment in condition indexes
• annual percentage of network growth
Tactical Indicators • percent of paved road lane km where the condition is rated poor or critical
■ number of bridge/large culvert structures where the condition is rated poor or
critical
■ percentage of road network replacement value spent on operations and
maintenance
• percentage of bridge/large culvert structures replacement value spent on
operations and maintenance
....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
• percentage of road network inspected within last 5 years
• percentage of bridge/large culvert structures inspected within last two years
• operating costs for paved roads per lane km
Operational Indicators 1 • operating costs for gravel roads per lane km
• operating costs for bridge/large culvert structures per square metre
• number of customer requests received annually
• percentage of customer requests responded to within 24 hours
5.4 Water / Sanitary / Storm Networks
..........................................................................................................................................................................................................................................................................................
5.4.1 Service Description
The municipality's water distribution network comprises 32km of water main,322 hydrants, and 518 valves.
The waste water network comprises 47km of sanitary sewer main and numerous sanitary sewer facilities.
Together,the above infrastructure enables the municipality to deliver a potable water distribution service,
and a waste water collection service to the residents of the municipality.
45
5.4.2 Scope of services
• The provision of clean safe drinking water through a distribution network of water mains and pumps.
• The removal of waste water through a collection network of sanitary sewer mains.
• The removal of storm water through a collection network of storm sewer mains,and catch basins
5.4.3 Performance Indicators (reported annually)
•
•
•
Performance Indicators (reported annually)
• Percentage of total reinvestment compared to asset replacement value
Strategic Indicators • Completion of strategic plan objectives (related water/sanitary)
• Annual revenues compared to annual expenditures
• Annual replacement value depreciation compared to annual expenditures
Financial Indicators
• Total cost of borrowing compared to total cost of service
• Revenue required to maintain annual network growth
• Lost revenue from system outages
• Percentage of water/sanitary network rehabilitated/reconstructed
• Overall water/sanitary network condition index as a percentage of desired
condition index
• Annual adjustment in condition indexes
Tactical Indicators • Annual percentage of growth in water/sanitary network
• Percentage of mains where the condition is rated poor or critical for each network
• Percentage of water/sanitary network replacement value spent on operations
and maintenance
..................................................
• Percentage of water/sanitary network inspected
• Operating costs for the collection of wastewater per kilometre of main.
• Number of wastewater main backups per 100 kilometres of main
• Operating costs for the distribution/transmission of drinking water per kilometre of
water distribution pipe.
Operational Indicators • Number of days when a boil water advisory issued by the medical officer of health,
applicable to a municipal water supply,was in effect.
• Number of water main breaks per 100 kilometres of water distribution pipe in a
year.
• Number of customer requests received annually per water/sanitary networks
• Percentage of customer requests responded to within 24 hours per water/sanitary
.......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
46
6.0 Asset Management Strategy
6.1 Objective
........................................................................................................................................................... .._....................................................................................................................................................................................................................................................................................................................................
To outline and establish a set of planned actions, based on best practice,that will enable the assets to
provide a desired and sustainable level of service,while managing risk,at the lowest life cycle cost.
The Asset Management Strategy will develop an implementation process that can be applied to the needs
identification and prioritization of renewal,rehabilitation,and maintenance activities.This will assist in the
production of a 10 year plan,including growth projections,to ensure the best overall health and
performance of the municipality's infrastructure.
This section includes an overview of condition assessment techniques for each asset class;the life cycle
interventions required,including interventions with the best ROI;and prioritization techniques,including risk,
to determine which priority projects should move forward into the budget first.
6.2 Non-Infrastructure Solutions and Requirements
The municipality should explore,as requested through the provincial requirements,which non-infrastructure
solutions should be incorporated into the budgets for the road,water,sewer (sanitary and storm), and
bridges &culverts programs. Non-Infrastructure solutions are such items as studies, policies,condition
assessments, consultation exercises,etc.,that could potentially extend the life of assets or lower total asset
program costs in the future.
Typical solutions for a municipality include linking the asset management plan to the strategic plan, growth
and demand management studies,infrastructure master plans, better integrated infrastructure and land
use planning, public consultation on levels of service,and condition assessment programs.As part of future
asset management plans,a review of these requirements should take place,and a portion of the capital
budget should be dedicated for these items in each programs budget.
It is recommended, under this category of solutions, that the municipality implement holistic condition
assessment programs for their road,water,sanitary,and storm sewer networks.This will lead to higher
understanding of infrastructure needs,enhanced budget prioritization methodologies, and a clearer path
of what is required to achieve sustainable infrastructure programs.
6.3 Condition Assessment Programs
The foundation of good asset management practice is based on having comprehensive and reliable
information on the current condition of the infrastructure. Municipalities need to have a clear
understanding regarding performance and condition of their assets,as all management decisions
regarding future expenditures and field activities should be based on this knowledge. An incomplete
understanding about an asset may lead to its premature failure or premature replacement.
Some benefits of holistic condition assessment programs within the overall asset management process are
listed below:
• Understanding of overall network condition leads to better management practices
• Allows for the establishment of rehabilitation programs
• Prevents future failures and provides liability protection
• Potential reduction in operation/maintenance costs
• Accurate current asset valuation
• Allows for the establishment of risk assessment programs
• Establishes proactive repair schedules and preventive maintenance programs
• Avoids unnecessary expenditures
47
• Extends asset service life therefore improving level of service
• Improves financial transparency and accountability
• Enables accurate asset reporting which,in turn,enables better decision making
Condition assessment can involve different forms of analysis such as subjective opinion, mathematical
models,or variations thereof,and can be completed through a very detailed or very cursory approach.
When establishing the condition assessment of an entire asset class,the cursory approach (metrics such as
good,fair, poor, critical) is used.This will be a less expensive approach when applied to thousands of
assets,yet will still provide up to date information, and will allow for detailed assessment or follow up
inspections on those assets captured as poor or critical condition later.
The following section outlines condition assessment programs available for road, bridge,sewer, and water
networks that would be useful for the municipality.
6.3.1 Pavement Network Inspections
Typical industry pavement inspections are performed by consulting firms using specialised assessment
vehicles equipped with various electronic sensors and data capture equipment.The vehicles will drive the
entire road network and typically collect two different types of inspection data-surface distress data and
roughness data.
Surface distress data involves the collection of multiple industry standard surface distresses,which are
captured either electronically, using sensing detection equipment mounted on the van,or visually, by the
van's inspection crew. Examples of surface distresses are:
• For asphalt surfaces
alligator cracking;distortion;excessive crown;flushing;longitudinal cracking;map cracking;patching;edge cracking;
potholes;ravelling;rippling;transverse cracking;wheel track rutting
• For concrete surfaces
coarse aggregate loss;corner'C'and'D'cracking;distortion;joint faulting;joint sealant loss;joint spalling;linear cracking;
patching;polishing;potholes;ravelling;scaling;transverse cracking
Roughness data capture involves the measurement of the roughness of the road, measured by lasers that
are mounted on the inspection van's bumper, calibrated to an international roughness index.
Most firms will deliver this data to the client in a database format complete with engineering algorithms
and weighting factors to produce an overall condition index for each segment of roadway.This type of
scoring database is ideal for upload into the CityWide software database,in order to tag each road with a
present condition and then further life cycle analysis to determine what activity should be completed on
which road,in what timeframe,and to calculate the cost for the work will be completed within the
CityWide system.
The above process is an excellent way to capture road condition as the inspection trucks will provide
detailed surface and roughness data for each road segment,and often include video or street imagery. A
very rough industry estimate of cost would be about$100 per centreline km of road.
Another option for a cursory level of condition assessment is for municipal road crews to perform simple
windshield surveys as part of their regular patrol.Many municipalities have created data collection
inspection forms to assist this process and to standardize what presence of defects would constitute a
good,fair, poor, or critical score. Lacking any other data for the complete road network,this can still be
seen as a good method and will assist greatly with the overall management of the road network.The
CityWide Works software has a road patrol component built in that could capture this type of inspection
data during road patrols in the field, enabling later analysis of rehabilitation and replacement needs for
budget development.
It is recommended that the municipality establish a pavement condition assessment program and that a
portion of capital funding is dedicated to this.
48
6.3.2 Bridges & Culverts (greater than 3m) Inspections
Ontario municipalities are mandated by the Ministry of Transportation to inspect all structures that have a
span of 3 metres or more,according to the OSIM (Ontario Structure Inspection Manual). At present,in the
municipality,there are 17 structures that meet this criterion.
Structure inspections must be performed by,or under the guidance of, a structural engineer, must be
performed on a biennial basis (once every two years), and include such information as structure type,
number of spans,span lengths, other key attribute data, detailed photo images,and structure element by
element inspection, rating and recommendations for repair,rehabilitation,and replacement.
The best approach to develop a 10 year needs list for the municipality's structure portfolio would be to
have the structural engineer who performs the inspections to develop a maintenance requirements report,
and rehabilitation and replacement requirements report as part of the overall assignment. In addition to
refining the overall needs requirements,the structural engineer should identify those structures that will
require more detailed investigations and non-destructive testing techniques. Examples of these
investigations are:
• Detailed deck condition survey
• Non-destructive delamination survey of asphalt covered decks
• Substructure condition survey
• Detailed coating condition survey
• Underwater investigation
• Fatigue investigation
• Structure evaluation
Through the OSIM recommendations and additional detailed investigations,a 10 year needs list will be
developed for the municipality's bridges.
The 10 year needs list developed could then be further prioritized using risk management techniques to
better allocate resources. Also,the results of the OSIM inspection for each structure,whether BCI (bridge
condition index) or general condition (good,fair, poor, critical) should be entered into the CityWide
software to update results and analysis for the development of the budget.
6.3.3 Sewer Network Inspections (Sanitary&Storm)
The most popular and practical type of sanitary and storm sewer assessment is the use of Closed Circuit
Television Video (CCTV).The process involves a small robotic crawler vehicle with a CCTV camera
attached that is lowered down a maintenance hole into the sewer main to be inspected.The vehicle and
camera then travels the length of the pipe providing a live video feed to a truck on the road above where
a technician/inspector records defects and information regarding the pipe.A wide range of construction
or deterioration problems can be captured including open/displaced joints, presence of roots,infiltration &
inflow,cracking,fracturing,exfiltration,collapse,deformation of pipe and more.Therefore,sewer CCTV
inspection is a very good tool for locating and evaluating structural defects and general condition of
underground pipes.
Even though CCTV is an excellent option for inspection of sewers it is a fairly costly process and does take
significant time to inspect a large volume of pipes.
Another option in the industry today is the use of Zoom Camera equipment.This is very similar to traditional
CCTV, however,a crawler vehicle is not used but in it's a place a camera is lowered down a maintenance
hole attached to a pole like piece of equipment.The camera is then rotated towards each connecting
pipe and the operator above progressively zooms in to record all defects and information about each
pipe.The downside to this technique is the further down the pipe the image is zoomed,the less clarity is
available to accurately record defects and measurement.The upside is the process is far quicker and
significantly less expensive and an assessment of the manhole can be provided as well. Also,it is important
to note that 80%of pipe deficiencies generally occur within 20 metres of each manhole.The following is a
list of advantages of utilizing Zoom Camera technology:
49
• A time and cost efficient way of examining sewer systems;
• Problem areas can be quickly targeted;
• Can be complemented by a conventional camera (CCTV),if required afterwards;
• In a normal environment,20 to 30 manholes can be inspected in a single day,covering more than 1,500 meters of pipe;
• Contrary to the conventional camera approach,cleaning and upstream flow control is not required prior to inspection;
• Normally detects 80%of pipe deficiencies,as most deficiencies generally occur within 20 meters of manholes.
The following table is based on general industry costs for traditional CCTV inspection and Zoom Camera
inspection; however,costs should be verified through local contractors.It is for illustrative purposes only but
supplies a general idea of the cost to inspect Bayham's entire sanitary network.
Sanitary and Sewer Inspection Cost Estimates
Sewer Network Assessment Activity Cost Metres of Main/#of Manholes Total
Full CCTV $10(perm) 47,000m $470,000
Sanitary
Zoom $300(per mh) 588 manholes (estimated)* $176,400
.................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
*manholes estimated by using one manhole per 80 metres of main
It can be seen from the above table that there is a significant cost savings achieved through the use of
Zoom Camera technology.A good industry trend and best practice is to inspect the entire network using
Zoom Camera technology and follow up on the poor and critical rated pipes with more detail using a full
CCTV inspection.In this way, inspection expenditures are kept to a minimum, however,an accurate
assessment on whether to rehabilitate or replace pipes will be provided for those with the greatest need.
It is recommended that the municipality establish a sewer condition assessment program and that a
portion of capital funding is dedicated to this.
In addition to receiving a video and defect report of each pipe's CCTV or Zoom camera inspection, many
companies can now provide a database of the inspection results, complete with scoring matrixes that
provide an overall general condition score for each pipe segment that has been assessed.Typically pipes
are scored from 1 -5,with 1 being a relatively new pipe and 5 being a pipe at the end of its design life.This
type of scoring database is ideal for upload into the Citywide software database,in order to tag each
pipe with a present condition and then further life cycle analysis to determine what activity should be done
to which pipe,in what timeframe,and to calculate the cost for the work will be completed by the
CityWide system.
6.3.4 Water network inspections
Unlike sewer mains,it is very difficult to inspect water mains from the inside due to the high pressure flow of
water constantly underway within the water network. Physical inspections require a disruption of service to
residents,can be an expensive exercise,and are time consuming to set up. It is recommended practice
that physical inspection of water mains typically only occurs for high risk, large transmission mains within the
system,and only when there is a requirement.There are a number of high tech inspection techniques in
the industry for large diameter pipes but these should be researched first for applicability as they are quite
expensive. Examples are:
• Remote eddy field current(RFEC)
• Ultrasonic and acoustic techniques
• Impact echo(IE)
• Georadar
50
For the majority of pipes within the distribution network gathering key information in regards to the main
and its environment can supply the best method to determine a general condition. Key data that could be
used,along with weighting factors,to determine an overall condition score are listed below.
• Age
• Material Type
• Breaks
• Hydrant Flow Inspections
• Soil Condition
Understanding the age of the pipe will determine useful life remaining, however,water mains fail for many
other reasons than just age.The pipe material is important to know as different pipe types have different
design lives and different deterioration profiles. Keeping a water main break history is one of the best
analysis tools to predict future pipe failures and to assist with programming rehabilitation and replacement
schedules.Also, most municipalities perform hydrant flow tests for fire flow prevention purposes.The
readings from these tests can also help determine condition of the associated water main. If a hydrant has
a relatively poor flow condition it could be indicative of a high degree of encrustation within the attached
water main,which could then be flagged as a candidate for cleaning or possibly lining. Finally,soil
condition is important to understand as certain soil types can be very aggressive at causing deterioration
on certain pipe types.
It is recommended that the municipality develop a rating system for the mains within the distribution
network based on the availability of key data,and that funds are budgeted for this development.
Also, it is recommended that the municipality utilize the CityWide Works application to track water main
break work orders and hydrant flow inspection readings as a starting point to develop a future scoring
database for each water main.
51
6.4 AM Strategy - Life Cycle Analysis Framework
An industry review was conducted to determine which life cycle activities can be applied at the
appropriate time in an asset's life,to provide the greatest additional life at the lowest cost. In the asset
management industry,this is simply put as doing the right thing to the right asset at the right time. If these
techniques are applied across entire asset networks or portfolios (e.g.,the entire road network),the
municipality could gain the best overall asset condition while expending the lowest total cost for those
programs.
6.4.1 Paved Roads
The following analysis has been conducted at a fairly high level, using industry standard activities and costs
for paved roads. With future updates of this Asset Management Strategy,the municipality may wish to run
the same analysis with a detailed review of municipality activities used for roads and the associated local
costs for those work activities.All of this information can be input into the CityWide software suite in order to
perform updated financial analysis as more detailed information becomes available.
The following diagram depicts a general deterioration profile of a road with a 30 year life.
Excellent.Maintenance
aced-Preventative Maintenance
75 - - - -
�
air-Rehabilitation
50 -1
Poor-+Replace
25
1
Years of Service ) 30 years
As shown above, during the road's life cycle there are various windows available for work activity that will
maintain or extend the life of the asset.These windows are: maintenance; preventative maintenance;
rehabilitation;and replacement or reconstruction.
52
The windows or thresholds for when certain work activities should be applied to also coincide
approximately with the condition state of the asset as shown below:
Asset Condition and Related Work Activity: Paved Roads
1 AML
Condition Condition Range i Work Activity
excellent condition (Maintenance only phase) 100-76 • maintenance only
.................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
good Condition (Preventative maintenance phase) 75-51 • crack sealing
■ emulsions
■ resurface-mill&pave
fair Condition (Rehabilitation phase) 50-26 • resurface asphalt overlay
• single&double surface treatment(for rural
roads)
...................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
• reconstruct-pulverize and pave
poor Condition (Reconstruction phase) 25- 1 • reconstruct-full surface and base
reconstruction
• critical includes assets beyond their useful
critical Condition (Reconstruction phase) 0 lives which make up the backlog.They
require the same interventions as the
"poor"category above.
With future updates of this Asset Management Strategy the municipality may wish to review the above
condition ranges and thresholds for when certain types of work activity occur,and adjust to better suit the
municipality's work program.Also note:when adjusting these thresholds, it actually adjusts the level of
service provided and ultimately changes the amount of money required.These threshold and condition
ranges can be easily updated with the CityWide software suite and an updated financial analysis can be
calculated.These adjustments will be an important component of future Asset Management Plans,as the
Province requires each municipality to present various management options within the financing plan.
The table below outlines the costs for various road activities,the added life obtained for each,the
condition range at which they should be applied,and the cost of 1 year added life for each (cost of
activity/added life) in order to present an apples to apples comparison.
Road Lifecycle Activity Options
Treatment Average Unit Cost Added Life Condition Cost Of Activity/Added Life
(per sq.m) (Years) Range
Urban Reconstruction $205 30 25-0 $6.83
Urban Resurfacing $84 15 50-26 $5.60
................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
Rural Reconstruction $135 30 25-0 $4.50
...................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
Rural Resurfacing $40 15 50-26 $2.67
Double Surface Treatment $25 10 50-26 $2.50
Routing& Crack Sealing (P.M) $2 3 75-51 $0.67
53
As can be seen in the table above, preventative maintenance activities such as routing and crack sealing
have the lowest associated cost (per sq. m) in order to obtain one year of added life. Of course,
preventative maintenance activities can only be applied to a road at a relatively early point in the life
cycle.It is recommended that the municipality engage in an active preventative maintenance program
for all paved roads and that a portion of the maintenance budget is allocated to this.
Also, rehabilitation activities,such as urban and rural resurfacing or double surface treatments (tar and
chip) for rural roads have a lower cost to obtain each year of added life than full reconstruction activities. It
is recommended,if not in place already,that the municipality engages in an active rehabilitation program
for urban and rural paved roads and that a portion of the capital budget is dedicated to this.
Of course,in order to implement the above programs it will be important to also establish a general
condition score for each road segment,established through standard condition assessment protocols as
previously described.
It is important to note that a "worst first" budget approach,whereby no life cycle activities other than
reconstruction at the end of a roads life are applied, will result in the most costly method of managing a
road network overall.
6.4.2 Gravel Roads
The life cycle activities required for these roads are quite different from paved roads. Gravel roads require
a cycle of perpetual maintenance,including general re-grading,reshaping of the crown and cross
section,gravel spot and section replacement,dust abatement and ditch clearing and cleaning.
Gravel roads can require frequent maintenance,especially after wet periods and when accommodating
increased traffic. Wheel motion shoves material to the outside (as well as in-between travelled lanes),
leading to rutting,reduced water-runoff,and eventual road destruction if unchecked.This deterioration
process is prevented if interrupted early enough,simple re-grading is sufficient,with material being pushed
back into the proper profile.
As a high proportion of gravel roads can have a significant impact on the maintenance budget,it is
recommended that with further updates of this asset management plan the municipality study the traffic
volumes and maintenance requirements in more detail for its gravel road network.
Similar studies elsewhere have found converting certain roadways to paved roads can be very cost
beneficial especially if frequent maintenance is required due to higher traffic volumes. Roads within the
gravel network should be ranked and rated using the following criteria:
• Usage-traffic volumes and type of traffic
• Functional importance of the roadway
• Known safety issues
• Frequency of maintenance and overall expenditures required
Through the above type of analysis, a program could be introduced to convert certain gravel roadways
into paved roads, reducing overall costs, and be brought forward into the long range budget.
6.4.3 Sanitary and Storm Sewers
The following analysis has been conducted at a fairly high level, using industry standard activities and costs
for sanitary and storm sewer rehabilitation and replacement. With future updates of this asset management
strategy,the municipality may wish to run the same analysis with a detailed review of municipality activities
used for sewer mains and the associated local costs for those work activities.All of this information can be
input into the CityWide software suite in order to perform updated financial analysis as more detailed
information becomes available.
54
The following diagram depicts a general deterioration profile of a sewer main with a 100 year life.
Excellent -Maintenance
100 -- - - - 1
Good-Major Maintenance
I I
c I I
o • Fair-Rehabilitation
50
o t
# I Poor- Replace
25I I
i I
0
Years of Service ] 100 years
As shown above, during the sewer main's life cycle there are various windows available for work activity
that will maintain or extend the life of the asset.These windows are: maintenance; major maintenance;
rehabilitation;and replacement or reconstruction.
The windows or thresholds for when certain work activities should be applied also coincide approximately
with the condition state of the asset as shown below:
Asset Condition and Related Work Activity:Sewer Main
Condition Condition Work Activity
Range
excellent condition (Maintenance only phase) 100-76 ■ maintenance only(cleaning&flushing etc.)
good Condition (Preventative maintenance phase) 75-51 • mahhole repairs
• small pipe section repairs
..................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
fair Condition (Rehabilitation phase) 50-26 • structural relining
poor Condition (Reconstruction phase) 25- 1 ■ pipe replacement
critical Condition (Reconstruction phase) • critical includes assets beyond their useful lives which
0 make up the backlog.They require the same
interventions as the"poor"category above.
With future updates of this Asset Management Strategy the municipality may wish to review the above
condition ranges and thresholds for when certain types of work activity occur,and adjust to better suit the
municipality's work program.Also note:when adjusting these thresholds, it actually adjusts the level of
service provided and ultimately changes the amount of money required.These threshold and condition
ranges can be easily updated with the CityWide software suite and an updated financial analysis can be
calculated.These adjustments will be an important component of future Asset Management Plans,as the
province requires each municipality to present various management options within the financing plan.
55
The table below outlines the costs, by pipe diameter,for various sewer main rehabilitation (lining) and
replacement activities.The columns display the added life obtained for each activity, the condition range
at which they should be applied,and the cost of 1 year added life for each (cost of activity/added life) in
order to present an apples to apples comparison.
Sewer Main Lifecycle Activity Options
Category Cost(per m) Added Life Condition Range 1 year Added Life Cost(Cost/Added Life)
Structural Rehab (m)
0-325mm $174.69 75 50-75 $2.33
325-625mm $283.92 75 50-75 $3.79
625-925mm $1,857.11 75 50-75 $24.76
> 925mm $1,771.34 75 50-75 $23.62
Replacement(m)
0-325mm $475.00 100 76- 100 $4.75
..............................................................................
325-625mm $725.00 100 76- 100 $7.25
625-925mm $900.00 100 76- 100 $9.00
> 925mm $1,475.00 100 76- 100 $14.75
.........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
As can be seen in the above table,structural rehabilitation or lining of sewer mains is an extremely cost
effective industry activity and solution for pipes with a diameter less than 625mm.The unit cost of lining is
approximately one third of replacement and the cost to obtain one year of added life is half the cost. For
Bayham,this diameter range would account for over 100%of sanitary sewer mains.Structural lining has
been proven through industry testing to have a design life (useful life) of 75 years; however,it is believed
that liners will probably obtain 100 years of life (the same as a new pipe).
For sewer mains with diameters greater than 625mm specialized liners are required and therefore the costs
are no longer effective.It should be noted, however,that the industry is continually expanding its
technology in this area and therefore future costs should be further reviewed for change and possible price
reductions.
It is recommended,if not in place already,that the municipality engage in an active structural lining
program for sanitary and storm sewer mains and that a portion of the capital budget be dedicated to this.
In order to implement the above,it will be important to also establish a condition assessment program to
establish a condition score for each sewer main within the sanitary and storm collection networks, and
therefore identify which pipes are good candidates for structural lining.
6.4.4 Bridges & Culverts (greater than 3m span)
The best approach to develop a 10 year needs list for the municipality's relatively small bridge structure
portfolio would be to have the structural engineer who performs the inspections to develop a maintenance
requirements report, a rehabilitation and replacement requirements report and identify additional detailed
inspections as required.This approach is described in more detail within the "Bridges &Culverts (greater
than 3m) Inspections" section above.
6.4.5 Water Network
As with roads and sewers above,the following analysis has been conducted at a fairly high level, using
industry standard activities and costs for water main rehabilitation and replacement.
56
The following diagram depicts a general deterioration profile of a water main with an 80 year life.
Excellent -Maintenance
100 - - - - - - - -
- �
I Good- Major Maintenance
75 - _ - � - - - - - --1
I 1
° I I Fair-Rehabilitation
50
c I
0 f
25 I - _ -
I Poor- Replace
I 1
0
Years of Service ) 80 years
As shown above, during the water main's life cycle there are various windows available for work activity
that will maintain or extend the life of the asset.These windows are: maintenance; major maintenance;
rehabilitation;and replacement or reconstruction.
The windows or thresholds for when certain work activities should be applied also coincide approximately
with the condition state of the asset as shown below:
Asset Condition and Related Work Activity: Water Main
Condition Condition Work Activity
Range
excellent condition (Maintenance only phase) 100-76 • maintenance only(cleaning&flushing etc.)
.................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
good Condition (Preventative maintenance phase) 75-51 • water main break repairs
■ small pipe section repairs
..................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
fair Condition (Rehabilitation phase) 50-26 • structural water main relining
..................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
poor Condition (Reconstruction phase) 25- 1 • pipe replacement
..................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
critical Condition (Reconstruction phase) IIcritical includes assets beyond their useful lives which
0 make up the backlog.They require the same
interventions as the"poor"category above.
......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
57
Water main Lifecycle Activity Option
Category Cost Added Life Condition Range Cost of Activity/Added Life
Structural Rehab (m)
..............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
0.000-0.150m $209.70 50 50-75 $4.19
0.150-0.300m $315.00 50 50-75 $6.30
0.300-0.400m $630.00 50 50-75 $12.60
0.400-0.700m $1,500.00 50 50-75 $30.00
............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
0.700 m-&+ $2,000.00 50 50-75 $40.00
..............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
Replacement(m)
0.000-0.150m $233.00 : 80 76- 100 $2.91
0.150-0.300m $350.00 80 76- 100 $4.38
0.300-0.400m $700.00 80 76- 100 $8.75
0.400-0.700m $1,500.00 80 76- 100 $18.75
0.700 m-&+ $2,000.00 80 76-100 $25.00
..............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
Water rehab technologies still require some digging (known as low dig technologies, due to lack of access)
and are actually more expensive on a life cycle basis. However,if the road above the water main is in
good condition lining avoids the cost of road reconstruction still resulting in a cost effective solution.
It should be noted,that the industry is continually expanding its technology in this area and therefore future
costs should be further reviewed for change and possible price reductions.
At this time,it is recommended that the municipality only utilize water main structural lining when the road
above requires rehab or no work.
58
6.5 Growth and Demand
Typically a municipality will have specific plans associated with population growth. It is essential that the
asset management strategy should address not only the existing infrastructure, as above, but must include
the impact of projected growth on defined project schedules and funding requirements. Projects would
include the funding of the construction of new infrastructure,and/or the expansion of existing infrastructure
to meet new demands.The municipality should enter these projects into the CityWide software in order to
be included within the short and long term budgets as required.
6.6 Project Prioritization
The above techniques and processes when established for the road,water,sewer networks and bridges will
supply a significant listing of potential projects.Typically the infrastructure needs will exceed available
resources and therefore project prioritization parameters must be developed to ensure the right projects
come forward into the short and long range budgets.An important method of project prioritization is to
rank each project, or each piece of infrastructure,on the basis of how much risk it represents to the
organization.
6.6.1 Risk Matrix and Scoring Methodology
Risk within the infrastructure industry is often defined as the probability (likelihood) of failure multiplied by the
consequence of that failure.
RISK = LIKELIHOOD OF FAILURE x CONSEQUENCE OF FAILURE
The likelihood of failure relates to the current condition state of each asset,whether they are in excellent,
good,fair, poor or critical condition, as this is a good indicator regarding their future risk of failure.The
consequence of failure relates to the magnitude, or overall effect,that an asset's failure will cause. For
instance,a small diameter water main break in a sub division may cause a few customers to have no
water service for a few hours,whereby a large trunk water main break outside a hospital could have
disastrous effects and would be a front page news item.The following table represents the scoring matrix
for risk:
High
4 A..ets 14 Assets
5 5,250 m2.m 21.200
52.921,516.00 58,190,392.80
No Asad. 5 As sats 2.Assets
y 4 - 2,3$0 m 1,700 to
915 5I,935,150.30 51,103.300,00
29 A3seti 29 A3ie!3 29 Afset3 11 A33lts
3 50,678 m2.m 181,050 m2.m 141,290 m2.m 135,600 m2
511 427.$34.78 5:,564,203.90 54,529,258.20 5322,728.00
6
49 Assets 33 A33st3 No Assets No Assets. 3 Assets
V
19.200 m 5,790 m - - 259 m2
514,624,200.00 54,794,550.00 kms 94 9486.532.16
6 Assets 4 Assets 7 Assets 40 Assets 4 Assets
1 6,455 m,m2 356 m,m2 650 to - 927 m2
$2682,270.53 5175,572.85 $250,600.00 N/A 5241.469.06
paw 1 23 4 5 High
P*abab'lity 31'F3rIW/e
All of the municipality's assets analyzed within this asset management plan have been given both a
likelihood of failure score and a consequence of failure score within the CityWide software.
The following risk scores have been developed at a high level for each asset class within the CityWide
software system.It is recommended that the municipality undertake a detailed study to develop a more
59
tailored suite of risk scores, particularly in regards to the consequence of failure, and that this be updated
within the CityWide software with future updates to this Asset Management Plan.
The current scores that will determine budget prioritization currently within the system are as follows:
All assets:
The Likelihood of Failure score is based on the condition of the assets:
Likelihood of Failure: All Assets
Asset condition Likelihood of failure
Excellent condition Score of 1
.............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
Good condition Score of 2
Fair condition Score of 3
.............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
Poor condition Score of 4
Critical condition Score of 5
Bridges (based on valuation):
The consequence of failure score for this initial AMP is based upon the replacement value of the structure.
The higher the value, probably the larger the structure and therefore probably the higher the
consequential risk of failure:
Consequence of Failure: Bridges
Replacement Value Consequence of failure
Up to$100k Score of 1
$101 to$250k Score of 2
$251 to$500k Score of 3
.............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
$501 to$850k Score of 4
$851k and over Score of 5
.............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
Roads (based on classification):
The consequence of failure score for this initial AMP is based upon the road classification as this will reflect
traffic volumes and number of people affected.
Consequence of Failure: Roads
Road Classification Consequence of failure
.,,,�wwwwwwwwwwwwwwww....
Gravel Score of 1
Tar&Chip Score of 3
.............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
Asphalt Score of 5
.............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
60
Sanitary Sewer (based on diameter):
The consequence of failure score for this initial AMP is based upon pipe diameter as this will reflect potential
upstream service area affected.
Consequence of Failure: Sanitary Sewer •
Pipe Diameter Consequence of failure
Up to 100mm Score of 1
..........................................................................................................:
150-200mm Score of 2
201-250mm Score of 3
.........................................................................................................:
251-300mm Score of 4
301 mm and over Score of 5
Water (based on diameter):
The consequence of failure score for this initial AMP is based upon pipe diameter as this will reflect potential
service area affected.
Consequence of Failure: Water
Pipe Diameter Consequence of Failure
Up to 50mm Score of 1
51 - 100mm Score of 2
101 -150mm Score of 3
151 -200mm Score of 4
201 and over Score of 5
61
7.0 Financial Strategy
7.1 General overview of financial plan requirements
In order for an AMP to be effectively put into action,it must be integrated with financial planning and long-
term budgeting.The development of a comprehensive financial plan will allow Bayham to identify the
financial resources required for sustainable asset management based on existing asset inventories, desired
levels of service and projected growth requirements.
The following pyramid depicts the various cost elements and resulting funding levels that should be
incorporated into AMP's that are based on best practices.
GROWTH Funding atthis level isfully sustainable and covers
'EQUIREMENT \ future investment needs.
These elements are required to /
fully fund replacement costs. v
SERVICE
ENHANCEMENTS
Funding atthis level provides for replacement costs
INFLATION REQUIREMENTS at existing service levels.
Funding at this level provides for proven renewal
RENEWAL REQUIREMENTS opportunities which delay the need and cost of full
replacement.
Funding at this level meets accounting rules
AMORTIZATION OF HISTORICAL COST OF INVESTMENT implemented in 2009 but does not adequately
plan for the future.
\\ Funding at this level covers cash costs only and
\ is significantly under-funded in terms of lifecycle
\ costs.
OPERATING AND MAINTENANCE COSTS
This report develops such a financial plan by presenting several scenarios for consideration and culminating
with final recommendations.As outlined below,the scenarios presented model different combinations of
the following components:
a) the financial requirements (as documented in the SOTI section of this report)for:
• existing assets
• existing service levels
• requirements of contemplated changes in service levels (none identified for this plan)
• requirements of anticipated growth (none identified for this plan)
b) use of traditional sources of municipal funds:
• tax levies
• user fees
• reserves
• debt(no additional debt required for this AMP)
• development charges (not applicable)
62
c) use of non-traditional sources of municipal funds:
• reallocated budgets(not required for this AMP)
• partnerships (not applicable)
• procurement methods(no changes recommended)
d) use of senior government funds:
• gas tax
• grants (not included in this plan due to Provincial requirements for firm commitments)
If the financial plan component of an AMP results in a funding shortfall,the Province requires the inclusion
of a specific plan as to how the impact of the shortfall will be managed. In determining the legitimacy of a
funding shortfall,the Province may evaluate a municipality's approach to the following:
a) in order to reduce financial requirements,consideration has been given to revising service levels downward
b) all asset management and financial strategies have been considered.For example:
• if a zero debt policy is in place,is it warranted? If not,the use of debt should be considered.
• do user fees reflect the cost of the applicable service? If not,increased user fees should be considered.
This AMP includes recommendations that avoid long-term funding deficits.
7.2 Financial information relating to Bayham's AMP
7.2.1 Funding objective
We have developed scenarios that would enable Bayham to achieve full funding within 5 years or 10 years
for the following assets:
a) Tax funded assets-Road network(paved roads);Bridges&Culverts;Storm Sewer Network
b) Rate funded assets-Water Network;Sanitary Sewer Network
Note: For the purposes of this AMP,we have excluded the category of gravel roads since gravel roads are
a perpetual maintenance asset and end of life replacement calculations do not normally apply. If gravel
roads are maintained properly they,in essence, could last forever.
For each scenario developed we have included strategies,where applicable,regarding the use of tax
revenues,user fees and reserves.
7.3 Tax funded assets
7.3.1 Current funding position
Tables 1 and 2 outline, by asset category, Bayham's average annual asset investment requirements,
current funding positions and funding increases required to achieve full funding on assets funded by taxes.
Table 1. Summary of Infrastructure Requirements &Current Funding Available
Average • Annual
Asset Category Annual Deficit
Investment Taxes to (Surplus)
iii
Required Taxes Gas Tax Reserves Total
Paved Roads 499,000 338,000 206,000 7,000 551,000 -52,000
Bridges&Culverts 154,000 0 0 0 0 154,000
Other 0 0 0 0 0 0
Total 653,000 338,000 206,000 7,000 551,000 102,000
63
Note: As illustrated in table 1, paved roads are in a surplus position.This AMP assumes that,over time,this
$52,000 of funding will be transferred to bridges &culverts,resulting in no impact on the recommendations
in this AMP.
7.3.2. Recommendations for full funding
The average annual investment requirement for paved roads and bridges/culverts is$653,000.Annual
revenue currently allocated to these assets is$551,000, leaving an annual deficit of$102,000.To put it
another way,these infrastructure categories are currently funded at 84%of their long-term requirements.
Bayham has annual tax revenues of$3,156,000 in 2013.As illustrated in table 2,without consideration of any
other source of revenue,full funding would require an increase in tax revenue of 3.3%over time.
Table 2. Overview of Revenue Requirements for Full Funding
Asset Category Tax Increase Required for Full Funding
Paved Roads -1.6%
Bridges&Culverts 4.9%
:.......................................................................................................................................................................................:................................................................................................................................................................................:
Other 0.0%
Total 3.3%
As outlined in section 7.4 below,there is$5,000 of tax revenues currently being allocated to water services.
We are recommending that this revenue be reallocated to the tax based categories in this section of the
report so that rate revenues fully fund water services.
Also, there is currently$35,000 of tax revenues being allocated for a waste transfer station.These funds are
available beginning in 2015 for AMP purposes.
Table 3 outlines these concepts and presents two options:
Table 3. Effect of Reallocating Tax Revenue Currently Allocated to Water Services
5 Years 10 Years
Infrastructure Deficit as Outlined in Table 1 102,000 102,000
Tax Revenues Available in 2015 re Waste Transfer Station -35,000 -35,000
Reallocation of Tax Revenue From Water Services -5,000 -5,000
Net Infrastructure Deficit to be Addressed by Taxes 62,000 62,000
:..................................................................................................................................................................................................................................................................................:........................................................................................:..................................................................................:
Resulting Tax Increase Required:
:..................................................................................................................................................................................................................................................................................:........................................................................................:..................................................................................:
Total Over Time 2.0% 2.0%
Annually 0.4% 0.2%
We recommend the 5 year option in table 3.This involves full funding being achieved over 5 years by:
a) over the phase-in period,allocating the$5,000 of tax revenue currently being allocated to rate funded asset categories
(as listed in section 7.4 of this report)to the tax funded asset categories as outlined above.
b) beginning in 2015,reallocating the$35,000 of tax revenues currently being invested in a waste transfer station.
c) allocating the$206,000 of gas tax revenue to the paved roads category.
d) increasing tax revenues by 0.4%each year for the next 5 years solely for the purpose of phasing in full funding to the two
asset categories covered by this AMP.
e) increasing existing and future infrastructure budgets by the applicable inflation index on an annual basis in addition to
the deficit phase-in.
64
Notes:
1. As in the past,periodic senior government infrastructure funding will most likely be available during the phase-in period.
By Provincial AMP rules,this funding cannot be incorporated into the AMP unless there are firm commitments in place.
2. As illustrated in table 1,the paved roads category is in a surplus position.Over time,$52,000 of funding currently being
allocated to this category should be transferred to the bridges/culverts category.
Although this option achieves full funding on an annual basis in 5 years and provides financial sustainability
over the period modeled (to 2050),the recommendations do require prioritizing capital projects to fit the
resulting annual funding available. As of 2013, age based data shows a pent up investment demand of
$5,487,000 for paved roads and$4,867,000 for bridges/culverts. Prioritizing future projects will require the
age based data to be replaced by condition based data. Although our recommendations include no
further use of debt,the results of the condition based analysis may require otherwise.
7.4 Rate funded assets
7.4.1 Current funding position
Tables 4 and 5 outline, by asset category, Bayham's average annual asset investment requirements,
current funding positions and funding increases required to achieve full funding on assets funded by rates.
Table 4. Summary of Infrastructure Requirements & Current Funding Available
2013 Annual Funding Available
Average
Asset Category Annual Less: Other Annual
Investment Deficit
Allocated Revenue
Required Rates to (see note Total
Operations below)
Sanitary Services 601,000 641,000 -455,000 31,000 217,000 384,000
Water Services 345,000 551,000 -451,000 5,000 105,000 240,000
Total 946,000 1,192,000 -906,000 36,000 322,000 624,000
Other revenue in table 4 consists of the following:
a) Sanitary Services:
Bayham collects fees from customers connecting into the system in order to recover an appropriate share of
previous infrastructure investment.From 2013 to 2017,this revenue is estimated to be$85,600 annually.From
2018 on,it is estimated to be$21,000.Since the$21,000 is sustainable,we have built that amount into the
revenue available in table 4.The balance of$64,600 for the years 2013 to 2017 is being allocated to the
appropriate reserve for emergency and priority sanitary services investment.
The amount of$31,000 in table 4 is comprised of the above$21,000 plus an annual$10,000 of connection
charges.
b) Water Services:
This amount consists of$5,000 of tax revenue.
The average annual investment requirement for sanitary services and water services is$946,000.Annual
revenue currently allocated to these assets for capital purposes is$322,000 leaving an annual deficit of
$624,000.To put it another way,this infrastructure category is currently funded at 34%of their long-term
requirements.
In 2013, Bayham has annual sanitary services revenues of$641,000 and annual water revenues of$551,000.
As illustrated in table 5,without any adjustments to existing revenues, a move to full funding would require
the following increases over time.
65
Table 5. Overview of Revenue Decreases Required for Full Funding
Asset Category Rate Increase Required
for Full Funding
Sanitary Services 59.9%
Water Services 43.6%
As illustrated in table 4,there is$5,000 of tax revenues currently being allocated to water services.We are
recommending that these revenues be reallocated to the tax based categories in section 7.3 above so
that rate revenues fully fund water services.
As illustrated in table 9, Bayham's debt payments for water services will be decreasing by$0 from 2013 to
2017 (5 years).Although not illustrated,debt payments will decrease by$44,000 from 2013 to 2022 (10
years).Our recommendations include capturing those decreases in cost and allocating it to the
infrastructure deficits outlined above.
Table 6 illustrates the above concepts and presents 2 options.
Table 6. Effect of Reallocating Taxes to Tax Funded Asset Categories and Incorporating Debt
Cost Reductions
Sanitary Services Water Services
5 Years 10 Years 5 Years 10 Years
Infrastructure Deficit as Outlined in Table 4 384,000 384,000 240,000 240,000
:.................................................................................................................................................................................................................................................:............................................................:.......................................................:.......................................................:........................................................:
Reallocation of Tax Revenue 0 0 5,000 5,000
:.................................................................................................................................................................................................................................................:............................................................:.......................................................:.......................................................:........................................................:
Change in Debt Costs 0 0 0 -44,000
Net Infrastructure Deficit to be Addressed by Rates 384,000 384,000 245,000 201,000
Resulting Rate Increase Required:
Total Over Time 59.9% 59.9% 44.5% 36.5%
Annually 12.0% 6.0% 8.9% 3.7%
:.................................................................................................................................................................................................................................................:............................................................:.......................................................:.........................................................:........................................................:
Considering all of the above information,we recommend the 10 year option in table 6.This involves full
funding being achieved over 10 years by:
a) over the phase-in period,reallocating the tax revenue of$5,000 currently being allocated to water services to the tax
funded asset categories in section 7.3 of this report.
b) when realized,reallocating the debt cost reductions of$44,000 for water services to the applicable infrastructure deficit.
c) increasing rate revenues by 6.0%for sanitary services and 3.7%for water services each year for the next 10 years solely
for the purpose of phasing in full funding of the asset categories covered by this AMP.
d) increasing existing and future infrastructure budgets by the applicable inflation index on an annual basis in addition to
the deficit phase-in.
Notes:
1. As in the past,periodic senior government infrastructure funding will most likely be available during the phase-in period.
By Provincial AMP rules,this funding cannot be incorporated into an AMP unless there are firm commitments in place.
2. We realize that raising rate revenues by the amounts recommended above for infrastructure purposes will be very
difficult to do.However,considering a longer phase-in window may have even greater consequences in terms of
infrastructure failure.
3. Any increase in rates required for operations would be in addition to the above recommendations.
Although this option achieves full funding on an annual basis in 10 years and provides financial
sustainability over the period modeled (to 2050),the recommendations do require prioritizing capital
66
projects to fit the resulting annual funding available. As of 2013, age based data shows a pent up
investment demand of$330,000 for sanitary services and $2,050,000 for water services. Prioritizing future
projects will require the age based data to be replaced by condition based data.Although our
recommendations include no further use of debt, the results of the condition based analysis may require
otherwise.
7.5 Use of debt
For reference purposes,table 7 outlines the premium paid on a project if financed by debt. For example,a
$1M project financed at 3.0%' over 15 years would result in a 26%premium or$260,000 of increased costs
due to interest payments. For simplicity,the table does not take into account the time value of money or
the effect of inflation on delayed projects.
Table 7.Total Interest Paid as a %of Project Costs
Number Of Years Finance
Interest Rate
5 10 15 20 25 30
7.0% 22% 42% 65% 89% 115% 142%
6.5% 20% 39% 60% 82% 105% 130%
6.0% 19% 36% 54% 74% 96% 118%
5.5% 17% 33% 49% 67% 86% 106%
5.0% 15% 30% 45% 60% 77% 95%
4.5% 14% 26% 40% 54% 69% 84%
4.0% 12% 23% 35% 47% 60% 73%
3.5% 11% 20% 30% 41% 52% 63%
3.0% 9% 17% 26% 34% 44% 53%
2.5% 8% 14% 21% 28% 36% 43%
2.0% 6% 11% 17% 22% 28% 34%
1.5% 5% 8% 12% 16% 21% 25%
1.0% 3% 6% 8% 11% 14% 16%
0.5% 2% 3% 4% 5% 7% 8%
0.0% 0% 0% 0% 0% 0% 0%
It should be noted that current interest rates are near all-time lows.Sustainable funding models that include
debt need to incorporate the risk of rising interest rates.The following graph shows where historical lending
rates have been:
1 Current municipal Infrastructure Ontario rates for 15 year money is 3.2%.
67
Historical Prime Business Interest Rate
16.00%
14.00% -
1 2.00% -
10.00% -
8.00
6.00% -
4.00%
2.00% -
0.00%
O N CO COVCO O, O N CO V u') -0 r- CO O, O — N
o` 0- 0- O, 0- O, O, 0- 0- O` O CD CD CD CD CD CD CD CD CD
O` O, O, O, O, O, O, O, 0- O` O CD CD O CD CD CD CD O CD CD CD O
N N N N N N N N N N N N N
Year
As illustrated in table 7,a change in 15 year rates from 3%to 6%would change the premium from 26%to
54%.Such a change would have a significant impact on a financial plan.
Tables 8 and 9 outline how Bayham has historically used debt for investing in the asset categories as listed.
There is currently$321,000 of debt outstanding for the assets covered by this AMP. In terms of overall debt
capacity, Bayham currently has$1,036,000 of total outstanding debt and $171,000 of total annual principal
and interest payment commitments.These principal and interest payments are well within its provincially
prescribed annual maximum of$1,408,000.
Table 8. Overview of Use of Debt
Current Debse Debt In Last Five Years 7111111110
Asset Category '- = 2009 2010 2011 2012 2013
Paved Roads 0 0 0 0 0 0
Bridges&Culverts 0 0 0 0 0 715,000
Other 0 0 0 0 0 0
Sanitary Services 0 0 0 0 0 0
:..........................................................................................................................:...........................................................................................:........................................:........................................:................................................:...................................................:....................................................:
Water Services 321,000 0 0 359,000 0 0
Total for AMP Categories 321,000 0 0 359,000 0 715,000
Non AMP Debt 715,000 0 0 715,000 0 0
Overall Total 1,036,000 0 0 1,074,000 0 715,000
68
Table 9. Overview of Debt Costs
Principal &Interest Payments In Next Five Years
Asset Category 2013 2014 2015 2016 2017
..................................
Paved Roads 0 0 0 0 0
Bridges&Culverts 62,000 62,000 62,000 62,000 62,000
Other 0 0 0 0 0
Total Tax Funded 62,000 62,000 62,000 62,000 62,000
Sanitary Services 0 0 0 0 0
Water Services 44,000 44,000 44,000 44,000 44,000
Total Rate Funded 44,000 44,000 44,000 44,000 44,000
Total AMP Debt 106,000 106,000 106,000 106,000 106,000
....................................:.................................
Non AMP Debt 65,000 65,000 65,000 65,000 566,000
Overall Total 171,000 171,000 171,000 171,000 672,000
As illustrated in this plan, the revenue options available to Bayham allow the municipality to meet its long-
term goal to fully fund its infrastructure requirements without further use of debt. However, as explained in
sections 7.3.2 and 7.4.2, the recommended condition rating analysis may require otherwise.
69
7.6 Use of reserves
7.6.1 Available reserves
Reserves play a critical role in long-term financial planning.The benefits of having reserves available for
infrastructure planning include:
• the ability to stabilize tax rates when dealing with variable and sometimes uncontrollable factors
• financing one-time or short-term investments
• accumulating the funding for significant future infrastructure investments
• managing the use of debt
• normalizing infrastructure funding requirements
By infrastructure category,table 10 outlines the details of the reserves currently available to Bayham.
Table 10. Summary of Reserves Available
Asset Category Balance at December 31,2012
Paved Roads 528,000
Bridges 0
:............................................................................................................................:..............................................
Other 0
Total Tax Funded 528,000
Water Services 566,000
Sanitary Services 1,065,000
Total Rate Funded 1,631,000
There is considerable debate in the municipal sector as to the appropriate level of reserves that a
municipality should have on hand.There is no clear guideline that has gained wide acceptance. Factors
that municipalities should take into account when determining their capital reserve requirements include:
• breadth of services provided
• age and condition of infrastructure
• use and level of debt
• economic conditions and outlook
• internal reserve and debt policies.
The reserves in table 10 are available for use by applicable asset categories during the phase-in period to
full funding. This, coupled with Bayham's judicious use of debt in the past,allows the scenarios to assume
that, if required,available reserves and debt capacity can be used for high priority and emergency
infrastructure investments in the short to medium-term.
7.6.2 Recommendation
As Bayham updates its AMP and expands it to include other asset categories,that future planning should
include determining what its long-term reserve balance requirements are and a plan to achieve such
balances in the long-term.
70
8.0 Appendix A. Report Card Calculations
Key Calculations Letter Grade Star Rating
F :0
C 2
1. "Weighted, unadjusted star rating": 0+ 2,5
C 2.9
(%of assets in given condition) x (potential star rating) C+ 3..
B 3.9
B+ 4.5
2. "Adjusted star rating" 9
(weighted, unadjsted star rating)x (%of total replacement value) A 5
3. "Overall Rating"
Funding % Star rating Grade
(Condition vs. Performance star rating) + (Funding vs. Need star rating) 0.096 0 F
25.0% 1 F
2 46,0% 1.9 0
61:0% 2.9 C
76.0% 3.9 B
91.0% 4.9 A
100.0% 5 A
71
Road Network Bayham
1 . Condition vs. Performance
Segment value as a%of total category
Total category replacement value $16,061,404 Segment replacement value$16,061,404 replacement value 100.0%
--
Segment Qui•
Excellent A 5 418,755 18%1 0.9
Base,asphalt, Good B 4 399,654 18% _0.7
sidewalks,tar&chip, Fair C 3 467,820 21% 0.6
excludes gravel Poor D 2' 243,852 11% 0.2 2.8
Critical F 1 737,142 33% 0.3
Totals 2,267,223 100% 2.8
Category star Category letter
rating grade
2.8
2. Funding vs. Need
Average annual 2013 funding Funding percentage Defici:f Category star Category letter
investment required available rating grade
$499,000 $551,000 110.4% -$52,000
5.0 A
3. Overall Rating
Condition vs Performance star rating Funding vs. Need star rating Average star rating Overall letter grade
2.8 5.0
3.9
Bridges & Culverts Bayham
1 . Condition vs. Performance
Segment value as a%of total category
Total category replacement value $6,168,574 Segment replacement value $6,168,574 replacement value 100.0%
Segment Condition Letter r rating Quantity(m.sq)in given %of Assets in given Weighted,unadjustedment adjusted star rating
condition condition star rating
Excellent A 5 603 21% 1.0
Good B 4 106 4% 0.1
Bridges&Culverts Fair C 3 0 0% 0.0
1.9
Poor D 2 0 0%1 0.0
Critical F 1 2,207 76% 0.8
Totals 2,916 100%i 1.9
Category star Category letter
rating grade
1.9 D
2. Funding vs. Need
Average annual 2013 funding Funding percentage eficit Category star Category letter
investment required available rating grade
$154,000 $0 0.0% $154,000
0.0 F
3. Overall Rating
Condition vs Performance star rating Funding vs. Need star rating Average star rating Overall letter grade
1 .9 0.0
1.0
Water Bayham
1. Condition vs. Performance
Segment value as a%of total category
Total category replacement value$24,930,320 Segment replacement value$19,804,580 replacement value 79.4%
nt Condition Letter ,. Qug,ntit ,in ti,:,
gra e-
Excellent A 5 18,650 72% 3.59
Good B 4 7,350 28% 1.13
Mains Fair C 3 0 0% 0.00
Poor D 2 0 0% 0.00 3.7
Critical F 1 0 0% 0.00
Totals 26,000 100% 4.72
Total category replacement value$24,930,320 Segment value as a%of total category Segment replacement value$5,125,740 replacement value 20.6%
er ,wing Units in given condition
Excellent A 5 1,091 35% 1.76
Good. B 4 1,510 49% 1.95
Appurtenances Fair C 3 0% 0.00
Poor D 2 0% 0.00 0.8
Critical F 1 499 16% 0.16
Totals 3,100 100% 3.87
Category star Category letter
rating grade
4.5 B+
2. Funding vs. Need
Average annual 2013 funding Funding percentage Deficit Category star Category letter
investment required available rating grade
$345,000, $105,000 30.4% $240,000
1.0 F
3. Overall Rating
Condition vs Performance star rating Funding vs.Need star rating Average star rating Overall letter grade
4.5 1.0
2.8 D +
Sanitary Sewer
Bayham
Network
1. Condition vs. Performance
Segment value as a%of total category
Total category replacement value$42,933,888 Segment replacement value$34,639,010 replacement value 80.7%
nt (Condition
Letter Qu
gra
Excellent A 5 35,050 81% 4.06
Good B 4 8,100 19% 0.75 I
Mains Fair C 3 0 0% 0.00
Poor D 2 0 0% 0.00 3.9
Critical F 1 0 0% 0.00
Totals 43,150 100% 4.81
Segment value as a%of total category
Total category replacement value$42,933,888 M Segment replacement value$8,294,878 replacement valueli
19.3%
SSeg r jg uantity($)in Weight ,.
conditit. s,
r.
Excellent A 5 $2,468,302 30% 1.49
Good B 4 $2,211,990 27% 1.07
Facilities Fair C 3 $3,284,488 40% 1.19
Poor D 2 0% 0.00 0.7
Critical F 1 $330,098 4% 0.04
Totals $8,294,878 100% 3.78
Category star Category letter
111- •IUMIV
rating grade
4.6 B+
2. Funding vs. Need
Average annual 2013 funding Funding percentage Deficit Category star Category letter
investment required available rating grade
$601,0001 $217,000 36.1% $384,000
1.0 F
3. Overall Rating
Condition vs Performance star rating Funding vs.Need star rating Average star rating Overall letter grade
4.6 1.0
2.8 D +
Municipality of Bayham
Infrastructure Replacement Cost Per Household
Total:$73,756 per household
- -(- Road Network(excludes gravel)
•or.•• Total Replacement Cost: $16,733,020
Cost Per Household:$6,744
IU Sanitary Sewer Infrastructure
• •• ■n - Total Replacement Cost:$43,139,543
.. ■. Cost Per Household:$36,130
•
Storm Sewer Network Water Network Bridges&Culverts
N/A Total Replacement Cost:$24,930,320 Total Replacement Cost:$6,168,574
Cost Per Household:$28,394 Cost Per Household:$2,486
Daily Investment Required Per Household for Infrastructure Sustainability
$3.50 -
Daily infrastructure investment:$3.18
$3.00 -
$2.50 -
$2.00 -
Daily cup of coffee:$1.56
$1.50 -
• $1.08 • $1.38
$1.00 -
$0.50• $0.55
$0.00 • $0.17
Road Network Bridges&Culverts Water Network Sanitary Sewer Network