Cobourg News Blog

In 2012, the Province decreed that if a municipality wanted provincial funding, they would have to demonstrate how any proposed project fits within a detailed asset management plan. This also applied to receiving the Federal Gas Tax. The requirement was for three phases: (1) core assets, (2) non-core assets and finally: (3) Proposed Level of Service, Lifecycle Management and Financial Strategy. The first one has been done and the plan for non-core assets will be presented to Council at their meeting on June 26. Why do we care? When an asset management plan was done for stormwater (part of core assets), a shortfall was discovered which led to the imposition of the stormwater fee. The basic intent of an asset management plan is to make sure the Town’s assets are managed prudently and not left in disrepair until such time as there are serious problems.

Assets to be managed – list of categories

Core Assets

• Roads;
• Bridges and structural culverts (structures);
• Water;
• Wastewater;
• Stormwater – covered in a separate plan.

Non-Core Assets

• Buildings
• Fleet
• Parks & Recreation
• Equipment
• Parking
• Information Technology

Note that to date, the 3 Asset Management plans are core, stormwater and non-core.

Schedule

The required dates for completion of Asset Management Plans are:

1. Asset Management Policy – July 1, 2019
2. For Core Assets – July 1, 2022
3. For All Other Assets – July 1, 2024
4. For All Assets: Proposed Level of Service, Lifecycle Management and Financial Strategy July 1, 2025

A presentation from the consultant is planned for the Council meeting – they will present the non-core asset management plan. The plan for core assets was presented in June 2022 and the Stormwater plan was presented in several stages starting in 2021. Also up for approval is a revised Asset Management Policy which defines what will be done with these plans with responsibilities spelled out. A key itrem is that the asset management plan will be the responsibility of the CAO and Director of Public Works.

So what does an Asset Management plan include?

• An inventory of all assets – grouped by category
• Average age
• Asset condition
• Current level of service
• Costs associated with the delivery of the current level of service for 10 years.

That is, how much money would be required to be spent for each category over the next 10 years.

This is of interest to taxpayers since sooner or later these costs will land on our tax bill.

The plans have a lot of detail but let me try to simplify and summarize.

Core assets

Annual Estimated Costs

• Roads & Structures – $3.4M per year
• Water – $8.1M per year – recovered by invoicing users
• Wastewater – $8.9M per year – recovered by invoicing users

Note that the core asset management plan was presented to Council in June 2022.

Stormwater Assets

Part of core assets but reported separately. See the consultant’s report available for download in Resources. There is a list of stormwater assets on page 2-2; the total is $70.2M.
The plan provided annual cost estimates for the remaining asset life. For each year from 2022 to 2032, the average annual capital cost was estimated at $1.05M – varying from $500K to $2.2M. Taxpayers are charged the average to smooth out the hit.

This subject was covered in multiple reports by Cobourg blog on the stormwater fee. Use the site’s search box to find them.

Non-core Assets

The plan lists average age and condition plus it gives an estimate of expenditure for each year in the future. Even without that, the information provided is interesting. There’s a lot of detail provided (see the full “plan”) – I have extracted some highlights:

• IT – The average age of software is 7 years
• Parking – Number of available parking spaces (on-street and in municipal lots) is 1,337
• Fleet – the Town owns 116 vehicles with a replacement cost of $23M – their average age varies from 2 years (Police) to 18 years (Engineering). The condition of many is described as poor (or worse) with by-law enforcement, Police and Transit as notable exceptions (they were described as good condition).
• The replacement cost for the CCC (in very good condition) would be $37M and the 120 year old Police Station in “poor” condition would be $11.3M.
• The 104 years old waterfront infrastructure replacement cost would be $19.3M and it’s in “very poor” condition.

Recommendations for the period 2024 to 2033 of what non-core assets should be fixed and when, are provided in section 3 of the plan. Here’s a summary:

• Information Technology – $679,000 per year
• Parking – $112,000 per year
• Fleet – $2.6M per year
• Equipment – $436,000 per year
• Buildings – $4.8M per year
• Parks and Recreation – $3.2M per year (but $19M for harbour infrastructure is scheduled for 2024)

Note, a Parking garage is not included in the Parking estimate. See the full report for a breakdown by year.

So the estimated annual capital required for non-core assets is $11.8M. But the total annual cost for Cobourg includes core assets. So adding the Roads and Structures amount of $3.4M, it brings the total annual Capital cost to $15.3M. For comparison, the 2024 Capital Budget is $11M; in 2023 it was $33M; in 2022 it was $15.5M; in 2021 it was $8.4M.

I think we can conclude from this that the asset management plans do not indicate any shortfalls or surprises.

Note that all estimates assume the current level of service; if that changes (gets better?) then the numbers will change.

The idea of proactively managing Capital assets is good. It allows priorities to be set, long term decisions to be made, manages risk, and ensures financial sustainability.

Resources

• Asset Management Policy – 26 June 2024 – download pdf
• Core Assets Management Plan – 9 June 2022 – download pdf
• Stormwater Asset Management Plan – 28 April 2022 – download pdf
• Non -Core Assets Management Plan – 26 Jun 2024 – download pdf

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