Session: I – VI

 Asset management strategy and objectives

 Whole of life models for planning and delivery
 Asset management policy, plans and processes
 Portfolio theory applications
 Condition assessment
 Deterioration modeling and performance assessment
 Maintenance objectives, definitions, models and
maintenance requirements determination
 Life cycle costing, replacement analysis
 Decision tools for asset management
 Prioritization and optimization
 System reliability and vulnerability
 Computer tools for asset management.
 Case studies 2
 Assignment – 1: Application of asset management -
Case analysis & presentation (group) : 20
Marks

 Assignment 2: Condition monitoring assignment

(group): 10 Marks

 Quiz based on Multiple Choice Questions (MCQ) : 10

Marks

 Group of 4 – same group for assignment 1 and 2.

3
 What is asset management?
 Application -Public sector as well as private industries
 Evolution of Asset Management
 Need
▪ Maximum Return for the investment
▪ Accountability – Fiscal / Environmental
▪ Managing risks
▪ Sustainability / Durability
▪ Level of Service

 Challenges
 Asset Management Standards (ISO 55000 : 2014, PAS 55 -
2008) 4
 Any item of economic value owned by an
individual or corporation, especially that which
could be converted to cash.

 In this class, we will focus on physical facilities or

tangible assets.

5
  “the systematic and coordinated activities and
practices through which an organization optimally
and sustainably manages its assets and asset
systems, their associated performance, risks and
expenditures over their life cycles for the purpose of
achieving its organizational strategic plan” (BSI
Definition)

 “the optimal lifecycle management of physical assets

to sustainably achieve the stated business objectives”
(EFNMS, 2009)
BSI - British Standards Institution
EFNMS - European Federation of National Maintenance Societies 6
 What is asset management?
▪ Facility Management – is it asset management?
▪ How about Structural Health Monitoring (SHM)

 Applicable to Public Sector as well as

Private Enterprise?

7
 Facilities Manager
▪ For the Facility Manager the leading objective is optimal
work environment
▪ Facility Manager’s scope of work are all assets which
support the primary business of a company/organization
▪ Facility Manager's priority is to improve the User‘s primary
business productivity and effectiveness
▪ Facility Manager is focused on End User/Occupier
workplace needs and demands while optimising
operational (OPEX) and capital expenditures (CAPEX)

8
 Asset Manager
▪ For the Asset Manager the leading objective is maximum
Return on Assets and Asset Utilization rate
▪ Asset Manager’s scope of work are all assets utilized by
both primary business and support business functions of
company/organization
▪ Asset Manager's priority is to improve maintenance
productivity and optimize equipment reliability as per
Investor’s production/primary business targets
▪ Asset Manager is focused on achieving Investor’s
profitability objectives while minimizing assets’ capital
expenditures (CAPEX)
9
 Rather who should do?

 Various Participants
▪ Indian Railways – Track Management System, Bridge
Management System
▪ NHAI – Road Asset Management System (RAMS)
▪ State Governments
▪ Local Bodies and Municipal Corporations
▪ Industries

10
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 Governments around the world are exploring
innovative financing mechanisms to fill
infrastructure financing gaps in support of the
Sustainable Development Goals (SDGs).

 Often such efforts do not budget for the financial,

human and material resources needed to manage
infrastructure assets over their entire lifespans.

12
 Underinvestment in infrastructure maintenance has been
estimated to cost some developing countries up to 2 per
cent growth in GDP.

 Under-maintained infrastructure assets are more likely to

fail, disrupting essential services like transport, water and
sanitation or solid waste management.

 Such vulnerabilities become particularly evident—and the

consequences even worse—in times of crises that put
additional strain on these assets, such as extreme
weather events or health emergencies like the COVID-19
pandemic.
13
 Effective infrastructure investment strategies look
beyond the initial acts of acquisition or
construction.

 Contrary to common belief, the actual construction

or acquisition cost of an infrastructure asset only
accounts for 15-30 percent of overall expenditures.

 By contrast, 70-85 percent of the costs of an asset is

incurred after it is bought or built.
14
 We define infrastructure assets as all physical
assets that are essential to the delivery of basic
public services.

 Such assets include traditional infrastructure

facilities, like roads and water and sanitation
systems, as well as the land that roads are built
on, the buildings that house essential services
and the equipment and information technology
systems needed to operate and maintain them.
15
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 Asset management is a coordinated series of
activities that monitor and maintain things of
value.

 Effective asset management demands increased

attention, commitment and resources.

 Ultimately, asset management is a way to align

strategic planning with infrastructure and ser-
vice delivery in the real world.
17
https://www.bsigroup.com/en-IN/Asset-Management/implementing-
ISO-55001/

https://www.bureauveritas.co.in/services+sheet/iso+55001+asset+ma
nagement

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 In early 1900’s design and durability issues, versatile
structures
 After World War II, reliability issues and maintenance
for mechanical and electrical equipments
 In 1960’s green movements, LCC and LCM
 In 1970’s and 1980’s PMS, CMMS and WO
 In 1990’s IT tools, CMMS, CMMS to AMS, GIS and GPS
 2000 ~ Integrated systems
21
 Accountability
▪ Customer (demand and service)
▪ Staff (Fiscal responsibility, health and safety)
▪ Environment (regulatory compliance)
 Risk Management
▪ Minimize health and safety tragedies/incidents
▪ Reduce liability claims
 Asset Sustainability
▪ Longer term (cradle to grave)
▪ Reserve funding 22
 Infrastructure demand and population growth
 Aging of infrastructure and condition deterioration
 Infrastructure deficit
 Service level improvement
 Lack of integrated systems/tools and consistent
approach
 Inadequate funding
 Organizational restructuring
23
 ISO 55000:2014

 PAS 55 - 2008

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Two fold benefits:
▪ Reduce cost
▪ Extend life

(Life cycle)

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Another benefit is to Service Expected
increase the levels

Service Levels
Service Agreed/LOS
of service
Service Provided
Service Gap
Levels of Service is a
compromise between
existing and expected Service Items
service levels

Levels of Service
Balance between (LOS)
cost, risk and LOS

Risk Cost
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 Economic Life of an Asset

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 Whole-life cost or Total Cost of Ownership

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 Which assets local government are
responsible for, and which is the
responsibility of other levels of government
or agencies?

 Identify any areas where responsibility

overlaps between levels of government.

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 Think about and list five major asset
management challenges facing local bodies.

 Why are they challenges?

 What measures could help address those

challenges?

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 Think about the impact of climate change on
your country.

 What are the top three risks you face from

climate hazards and why?

 What are you doing to address them?

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 What can be an example of Asset
Management? – Bonneville case

 Approach to Asset Management

▪ Systems Approach
▪ Questions, questions and questions
▪ The six what’s
▪ Evaluation – Key Performance Indicators, Life Cycle Costs
▪ Decision Making

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 I keep six honest serving-men
(They taught me all I knew);

Their names are What and Why and When

And How and Where and Who

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 Simple questions but…
▪ Is there anything wrong?
▪ What is wrong?
▪ What should we do? How do we fix it?
▪ What will the benefits be?
▪ How much will it cost and how do we pay for it?
▪ How can we be more proactive?

 What tools can then be used?

43
 What are the absolute requirements?
 How do an existing system fit into?

 How does Asset Management assist in monitoring

of condition and performance?

 How should an Asset Management system be

implemented?

 How Asset Management is compatible with

business approach to managing infrastructure
assets? 44
 What do you own?
Asset knowledge
 What is it worth?

 What is the condition?

Calculations
 What is the deferred maintenance? Models
 What is the remaining service life? Protocols

 What do you fix first? Decision-making

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▪ What do you own?
• Asset inventory
• Database
▪ Paper based
▪ Electronic (relational database and spreadsheets)
▪ Integration with GIS

▪ What is it worth?
• Asset valuation
▪ Book value, historical value, depreciated value, PV
▪ Current Replacement Value (CRV)
▪ Cost modeling (direct and indirect costs)
• Life cycle cost/Whole life cost
46
▪ What is the condition?
• Condition assessment
▪ Condition grading systems (subjective evaluation, distress based
matrices and hybrid systems)
• Structural and functional (defects, breaks, hydraulics, blockages
etc.)
• Protocols (IT tools)
• Prediction modeling

▪ What is the deferred maintenance?

• Facility Condition Index (FCI)
• Maintenance backlog and economic inflation/deflation

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▪ What is the remaining service life?
• Service life modeling
▪ Analytical and probabilistic methods
▪ Costs for alternative maintenance, repair and renewal

▪ What do you fix first?

• Prioritization
▪ Methods
▪ Ranking: Asset by asset or group of assets
▪ Costs for alternative maintenance, repair and renewal
• Decision-making
▪ Combination of all and political agenda

48
 Step 6

Step 1 to 3 – Data oriented

Step 4 to 5 – Methodology and policy issues Step 5
Decision-
Step 6 – Decision-making making
Step 4

Calculations
Step 3
Models

Step 2
Protocols

Step 1

Asset
knowledge

49
 You are the chief executive of a company or
organization that depends heavily for its
success on the availability and reliability of
its physical assets.

 If you are not already asking yourself

questions like the following, your
shareholders, non-executive directors,
funding authority, regulator or bank will be
soon. 50
1. Do all the investments we make in our asset base support
our strategy and objectives?
2. Are levels of risk associated with the asset base
acceptable?
3. How do asset costs and performance affect our
competitiveness?
4. Which investment projects will have the least impact on
risk, costs and service if they are stopped or delayed
when there are funding or cash flow constraints?
5. Are reductions in maintenance and/or operating costs
sustainable?
6. Why are some activities outsourced and others not?
51
1. Which of our assets are most critical to us now or in the
future?
2. How do we make sure our critical assets are available in
the right condition when we need them?
3. Are assets being used and operated in the best ways?
4. Can less be spent on them and targets still be achieved?
5. What other asset costs can be reduced, deferred or
eliminated?
6. Does the board understand the main sources and types
of asset-related risk?
7. How can returns on investment be improved?
8. How can maintenance deliver better value?
52
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 There is growing recognition across the
world that infrastructure providers cannot
just focus on meeting business needs
through investment in asset creation
without recognizing the long-term costs of
ownership, operations and maintenance
and finally, rehabilitation, replacement or
retirement.

54
 Facility Asset Management (FAM) is
responsible for the planning and
management oversight of non-electric
facilities (NEF) as well as site-development
systems such as fences, parking lots,
sidewalks and driveways.

55
 The non-electric facility portfolio currently
consists of 1,013 buildings such as control
houses, data centers, office buildings and
storage facilities at 434 sites located across
the agency service area of 300,000 square
miles.

 The buildings portfolio has an estimated

replacement cost of $750 million.
56
 The non-building assets component of the portfolio
such as fixed cranes; fences; pavements; water
distribution, storm and sanitary sewer systems;
land; and other site improvements, are also
included.
 Early indications are that the replacement cost for
this component of the asset base is approximately
$400 million.
 As such, the replacement value of the entire
nonelectric facility portfolio is roughly $1.15 billion.
57
 Maintaining expected level of service

 Business Continuity
▪ Old building built based on codes applicable
then
▪ Rezoning of seismic region

 Historical Requirements
▪ Old buildings before 1974 historically significant
58
 Functionally outdated asset class

 Expansion

 Executive Orders (ordinance in India) –

reduce energy consumption – compliance

 New building codes (safety)

 Hazardous material (safety)

59
 The overall, long-term objective of the
Facility Asset Management program is to
optimize, or fully leverage, the asset
portfolio to provide reliable, sustainable
nonelectric assets that fully meet current
and known future agency business needs
and ensure performance and condition
standards that comply with all applicable
regulations while minimizing the life cycle
costs.
60
* Systems here refers to major components of a building asset
Facility Asset Management will accomplish this by
creating a cross-agency program that:

 Employs a tightly defined set of criteria for making

asset-related investment decisions;
 Aligns responsibilities and accountabilities;
 Provides the guidance standards for asset
planning, design, construction and care; and
 Is tightly linked and aligned to the strategic
objectives of the Agency.
64
 Systems are in place to assess the health and
performance of assets
▪ An inventory of the health of nonelectric facilities
portfolio is completed.
▪ Processes and resources are in pace to inspect the
condition of the nonelectric facilities portfolio once a
year.
▪ Metrics: Facility Condition Index, Systems Condition Index.
▪ Performance: A facilities management information
system is in place by FY 2014.
▪ Metrics: cost of ownership, asset data, warranty recovery,
workflow.
65
 Investments are prioritized based on need,
risk and return on investment

▪ Risk: A method is currently in place today and

will become more consistent and objective as
the asset health information becomes more
accurate and complete.

▪ Need/return on investment: Nonelectric

facilities design standards and master material
specifications are in place.
66
 Industry standard operations and
maintenance practices are executed

▪ Comprehensive preventive maintenance,

workflow, planning and scheduling programs
and resources are in place by FY 2015.

▪ Metrics: percentage of emergency repairs,

productivity rates, scheduled work completion,
inventory performance.
67
Assets are sustainable and compliant
▪ Energy intensity reduced 30 percent (over 2003
baseline) by FY 2015.
▪ Non-potable water use reduced 20 percent (over 2010
baseline) by FY 2020.
▪ Potable water use reduced 26 percent (over 2007
baseline) by FY 2020.
▪ No adverse compliance findings (Occupational Safety
and Health Act, Environmental Protection Agency,
International Building Codes) by FY 2015.

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 16 new initiatives started

 The 16 new initiatives should achieve one

or more of the 4 objectives listed before

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74
 Strategic Asset Management

 Asset Management Framework

 Asset Management Plan

 Case – Township of North Kawartha, Canada

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Business Plan Strategic Level
(Policy)

Asset
Management
Plan
Tactical Level
(Procedure)

Operations
and
Maintenance
Plan
Operational Level
(Execution)

81
1. Strategic Asset Management – Policy

2. Asset Management Framework –

Policy/Protocols

3. Asset Management Plan – Procedure

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 AOL

 Tata Communications

 Instagram

 Amazon cloud service

 Content Delivery Networks (Akamai)

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 The Asset Strategy is the top level strategy

 Determines whether assets should be

enhanced by capital investment, maintained
or disposed of

88
 Maximise benefits and minimise costs is
both a responsibility and challenge for all
Asset Managers

 Develop practices and procedures that can

help successfully meet that challenge

89
 Assets are acquired to support the
provision of services to customers.

 Cost and quality of service trade-off

 Primary objective – how to achieve service

delivery goals or objectives

90
 Informed decision making by managers
who invest in and manage assets

 Asset management decisions need to be

based on a proper evaluation of options
which take into account all costs and
benefits over the life of the asset, and
incorporate an explicit analysis and
determination of an acceptable level of
risk.
91
 PROGRAM LEVEL: High-level
decision-making.
TOP DOWN Synonymous to “Top-Down
System Knowledge Approach”

MIXTURE OF BOTH

PROJECT LEVEL: Detailed

assessment on an asset-by-asset
BOTTOM UP basis.
Asset / Component Data Synonymous to “Bottom-Up
Approach”

92
 Asset procurement and management must
be responsible, accountable, open,
consistent and ethical.

 Agency management is responsible for the

level of investment in assets, the benefits
and costs that arise from the investment
and how well the assets are maintained and
managed.
93
 Integration of asset planning, budgeting,
reporting and monitoring

 An integrated approach may call for

consultation with, and coordinated
reporting to, central agencies

 Key words - Integration and Coordination

94
 What have we learnt so far

1. What is asset management (AM)? (how it is different from

Facilities Management).
2. Evolution of AM; standards (ISO 55000)
3. Who is doing and who should do AM
4. The six what’s approach to AM (Asset knowledge, models
to predict remaining useful life and finally decision making)
5. Bonneville Power AM – case study
6. Asset Management Approach (strategic)

95
Business Plan Strategic Level
(Policy)

Asset
Management
Plan
Tactical Level
(Procedure)

Operations
and
Maintenance
Plan
Operational Level
(Execution)

96
 Case - North Kawartha

1. Strategic Asset Management – Policy

(session IV)

2. Asset Management Framework –

Policy/Protocols

3. Asset Management Plan – Procedure

97
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 Management of assets benefits from a
strategic framework which establishes:
▪ The criteria and standards for the ownership
and management of the assets

▪ Strategies and processes for procurement,

maintenance, disposal and risk management

▪ Priorities for allocating resources for asset

management
99
 The Framework is a way to achieve better
value from the Developer’s investments
and reduced asset running costs

 How does the Strategic Asset Management

Framework help?

100
 It provides a structure for strategic planning for the
management of the Developer’s infrastructure

 It ensures minimisation of costs over the life of the

asset for providing, maintaining and operating assets
▪ System cost vs. individual cost

 It ensures that investment in assets is at an appropriate

level

 It encourages the consideration and adoption of non-

asset based options for the delivery of some services.
101
 Framework sets the basis and standards
which can assist people apply sound
business principles and take rational decision
making approach
▪ Government of India – self attestation of documents

 Inculcates development of a more creative

and analytical management culture
▪ South west airlines, Jet Blue Airlines call center

102
 The Strategic Asset Management
Framework will assist managers develop a
formal corporate approach to identify their
agency’s asset management requirements

 It provides clear linkages between the

various asset management functions

 Integration and Coordination

103
 Strategic Asset Management can be considered in
three dimensions

Management Levels Different levels of management

responsibility and activities

Life-cycle Functions Different tasks to be performed at

different stages of the asset’s life

Organizational To support the asset management

requirements process
104
 There are four main levels of asset management.
Risk management should be considered at each
level.

▪ Developer / Investor Level (planning)

▪ Agency level (management/implementation)

▪ Facilities management level (operations)

▪ Conduct of works level (maintenance)

105
The life-cycle functions to be considered include

 Planning

 Procurement

 Maintenance and management

 Disposal or divestment
106
 Management needs to consider the structures, staff, resources
and information which will best support the asset management
process

 Organisational structures and processes – Centralised /De-

centralised

 Staff skills – enhancement needs

 Sufficient resources – Allocation of resources

 Adequate management information - Ensure the availability and

quality of information which supports decisions and assessment
of outcomes 107
 Contracting out to the private sector
▪ Value for money (risks and benefits - price is only one
factor); NASA Artemis programme vs. SpaceX
▪ The strategic significance of the asset or service;
▪ Non-core activities;
▪ Availability of suitably skilled staff; and
▪ Accountability and control.

 Asset management services are generally support

functions, consider contracting out these services in the
broader context of the agency’s strategies in terms of
contracting out service delivery
108
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 Asset Management Plan
▪ Flow charts
▪ Demand Management
▪ Risk Management
▪ AMP Document

 Case Study – Town of North Kawartha Asset Management

Plan

111
 An Asset Management Plan sets out the
framework for an agency to allocate
appropriate resources and make strategic
decisions to support service delivery

 The Asset Management Plan is for use

when setting out support systems, in-
house or contracted out, budgeting and
accreditation purposes.
112
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 Asset management plans link physical
resources to service delivery objectives

 These plans include whole of agency plans

(for capital investment, maintenance,
divestment or disposal)

 Agencies continually assess service needs

and standards and reconcile them with
asset holdings
117
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119
 What are the possible demand forecasting
techniques that are used?

120
 Apply demand management practices to
create a non-asset based solution for:

▪ Water sector
▪ Road transport sector
▪ Electricity sector
▪ Waste Management
▪ Housing

121
 Demand management is integral to the process of
accurately forecasting service requirements

 A part of the agency’s corporate planning, and

should be incorporated within asset management
plans

 A modification to demand may serve to

dramatically reduce investment in assets or defer
asset acquisition
▪ Example – Flag Telecom, City of Detroit
122
▪ Identify justifiable community needs from other
expectations

▪ Optimise the use and performance of existing assets

and look for non-asset based solutions to meet demand
for services

▪ Incorporate the cost of assets into the pricing of

services, and introduce accrual accounting to reflect the
full cost of services

▪ Help modify behaviour through explanatory marketing

and education campaigns
123
 Management must consider the agency’s exposure to risk
throughout the asset management process.

 Risk management is a structured way to identify and

analyse potential risk, and devise and implement
appropriate responses according to classes of risks.

 These responses may include risk prevention, risk transfer,

minimising the impact or acceptance of risk.
▪ For example - Do nothing approach

 A combination of these strategies may apply to manage

different individual risks within a particular activity or
project 124
 Decision making should take into account life-cycle
costing

 This serves to ensure that a balance is achieved between

asset performance, which is derived from agreed service
standards, and the total asset costs

 Use discounted cash flows to compare alternative

solutions.

 Following the acquisition of an asset, life-cycle costing

can provide a profile against which the asset can be
managed and costs controlled
125
Service Delivery Oriented i.e.

 Define Functions
 Functional Requirements
 Current and Future Requirements
▪Translate Agency Service and functional requirements to
Asset Requirements
 Spatial
 Financial
126
 Asset Recording
▪ Land, Build, Plant, Equipment
▪ Compliance
▪ Conditions
 Assets and Performance
▪ Infrastructure/remedial works
▪ O&M
▪ Energy/environment
▪ Other
▪ New
▪ Refurbished
127
 Asset Land/Buildings
 O&M
 Environmental Systems
▪ Performance requirements for Service delivery
▪ Indoor Environmental Quality Infection Control and special requirements
 Central Energy
▪ Essential services and utility arrangements
▪ Plant and Reticulation Systems
▪ Metering Monitoring and Reporting Systems
 Performance Specifications
▪ Compliance
▪ Safety
▪ Security
▪ Other
 Life Cycle of each component
 Accommodating future changes.

128
 Business Continuity
 Contingency Arrangements
 Budgets
 Cash Flows
 Dysfunctional Facilities
 Upgrade and Renewal Priorities
 Unsatisfactory e.g. Gaps Overlaps
 Identify Options.

129
 Strategic Issues

 Priority (urgent items < 12 months)

 Costing

130
 Asset Management Plans are required to be
produced at critical phases of the
development of asset throughout their life
e.g. design stage and during operations

131
 Short (12 months)

 Medium (3 years)

 Long (5 years +).

132
 Planning
 Acquisition
 Implementation
 Disposal
 Maintenance
 Operational
 Environmental
 Emergency Services
 Financial Plans.
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 A city has a 30 year old Water Distribution Network
which provides 24 hour water supply for its
residents. The city is blessed with a small fresh
water lake 5 kms from the city boundary which has
enough water to meet the demand of the city in the
near future.
 The city wants to prepare an Asset Management
Plan for this water distribution network.

▪ List steps you will take for such an exercise?

▪ What will be the content of Asset Management Plan
document and what will be description in each chapter? 138
139
 Introduction
 Tangible assets / useful life
 Asset inventory
 Asset condition
 Future demand
 Level of Service / KPI
 Implementation Strategy
 Financing
 Conclusion and Recommendations
140
 The Township of North Kawartha Asset
Management Plan (2017-2056) provides the
Township with a tool to guide capital financing
decisions.

 The Plan covers all Township assets, these

include: buildings, land improvements, vehicles,
equipment, computers & software, and other
engineering assets which include the Township’s
bridge, sidewalks, streetlights and other minor
engineering related assets.
141
 The purpose of the 2017 Plan is to build on
existing practices by identifying how best to
manage Township infrastructure over the
planning period to 2056.

142
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 Township’s 2016 census population is estimated
at 2,479 persons as per Statistics Canada.

 The Township does not expect any significant

growth to occur in the near Future.

 No growth-related capital additions

 Maintaining control of the current infrastructure

deficit should be prioritized in the coming years.
152
 Level of Service (KPI)
Asset Category Level of Service Performance Indicator Indicator Parameter

• Facilities should comply with the • Number of facilities that do

Accessibility for Ontarians with not comply with the Act
Disabilities Act • Percentage of facilities in
Buildings
good to very good
• All facilities should be maintained in condition
state of good repair • Number of outstanding
repair/rehabilitation
activities for all facilities.

Indoor • Provide a variety of indoor

recreation • Square metres of indoor
recreation facility space for
recreation facilities
residents

• All vehicles should be maintained • Percentage of vehicles in

good condition
• Maintain minimum fleet availability • Percentage of vehicles
Vehicles available for duty
• Perform preventative maintenance
• Number of vehicles
of safety and operation
inspected (daily)
153
154
A. Set of planned actions

B. Cost reduction strategies

C. Risk Management

155
 Non-infrastructure solutions
 Maintenance activities
 Renewal / Rehabilitation
 Replacement
 Disposal
 Expansion (based on demand forecast)
156
A. Set of Planned Actions

157
A. Set of Planned Actions

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 Robust procurement policy
▪ Open, honest and transparent procurement
policy

 Alternative resource delivery options

▪ Outsourcing
▪ Resource sharing with neighboring townships

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 Risk Assessment Matrix

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 Probability of Failure level 5 (Very Poor
Asset) multiplied by Consequence of Failure
level 5 (Severe Consequence of Failure) =
Risk Score of 25.

 This would illustrate that the particular

asset assessed should be prioritized for
replacement immediately as it would have
the highest risk.
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A. Operating budget expenditures

B. Repair and replacement schedule

C. Capital provision schedule

D. Infrastructure deficit

E. Financing strategy
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 The Township has limited reserves on hand

 A higher level of capital contributions is

required in order to meet service level
requirements.

 Average annual contributions over the 40-

year period would have to be in the order of
$1.4 million per year
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 Funding sources
▪ Taxes

▪ Existing resources

▪ Gas tax reserve fund

▪ Ontario grants
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 Federal and provincial grants
 Development charges
 Property taxes
 User fees
 PPP

 Debt as a financing tool

 Reserve funds
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 The Township’s asset base is extensive, valued at
$58.5 million, in relation to the census permanent
population of about 2,479 persons.

 Overall, a high proportion (about 65% or $38.3

million) of Township assets are considered to be in
“Good” to “Very Good” condition.

 At the same time, approximately 20% ($11.8

million) of infrastructure is considered to be in
“Poor” to “Very Poor” condition.
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 Attempt to increase tax base (most reliable
source)

 Explore PPP or sharing resources

 The Township is considered to be in good fiscal

standing with strong budgetary performance and
no external debt - the Township currently
operates well below the annual repayment limit
of $1.4 million in total net debt charges.

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 Improve capital development process

 Ensure asset inventories are updated regularly

 Optimize use of existing assets

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 A city has a 24 year old Water Distribution Network
which provides 24 hour water supply for its
residents. The city is blessed with a small fresh
water lake 5 kms from the city boundary which has
enough water to meet the demand of the city.
 The city wants to prepare an Asset Management
Plan for this water distribution network.

▪ List steps you will take for such an exercise?

▪ What will be the content of Asset Management Plan
document and what will be description in each chapter?
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 • Demand Forecast
Step 1 • Setting Levels of Service (KPI)

• What do you own / condition

Step 2 • Adequacy for set LoS

• Driver for Asset Management

Step 3 • Growth/performance/age/cost of service

• Risk mitigation plans

Step 4 • Develop maintenance / replacement plans

• Implementation strategy
Step 5 • Funding Strategy

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 Executive Summary, time horizon
 State of Assets / Condition
 Level of Service (expected)
 Drivers (Growth / demand / regulation / cost / age /
risk assessment)
 Lifecycle Management (O&M, Renewal and
Augmentation)
 Implementation strategy (phases / roles in
organization / time lines)
 Funding strategy
 Updating the plans
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