Asset Management Plan – Part 3

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

Asset Class Replacement Cost (2022$)
Roads $116,599,000
Structures $16,921,000
Water $321,435,000
Wastewater $246,724,000
Total $701,679,000

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

Asset Class Replacement Cost (2024$)
Buildings $227,400,000
Fleet $23,200,000
Parks & Recreation $37,000,000
Equipment $8,400,000
Parking $3,800,000
Information Technology $2,500,000
Total $302,300,000

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

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Linda Mackenzie-Nicholas
25 days ago

Wow John- thanks for sharing this important info in such an easy to understand format

Jennifer Darrell
25 days ago

Thank you John once again for all the work and effort you put into summarizing these important reports for us. As tax payers we are indebted to you. I confess that my eyes glaze over when reading (skimming!) all the details of information of this nature but it’s good to be aware of what is “out there” and very handy to have the reference should one want to check on details. The comments of others more inclined to study these issue and more informed of their significance can also be helpful. Fantastic “service” you provide for us “townies”

Diana
Reply to  Jennifer Darrell
25 days ago

You have said it so well, Jennifer. Kudos to John for keeping us so well informed! We appreciate your hard work on our behalf.

Sandpiper
26 days ago

The Town had a little misunderstanding of Funding between the Mayor ,LUCI & Finance as I saw it , especially when it came to the New Big developer in town as to when and who is paying for it Storm & drinking water and Sanitary sewers Seems they are not to eager to anti up for these new services the Town has taken on in the east end
. How can this be ?? Would we not have $$$ up front or Bonding in place to draw from .

Also LUCI seems to have possibly over extended it self once again and was there with hands out looking for another $8 to $9 Mill before the end of Aug . for just these reasons .
Where are the Cut Backs ? What exactly does the group from Venture 13 do other than
playing with Computers and trying to do what exactly ???? and Some Dashboard that still not up and running , its already out of date and non functional most of the time ????

Leweez
Reply to  Sandpiper
26 days ago

The Town of Cobourg’s biggest core asset in replacement value at $321 million is Water and yet the town council is fine with letting a contractor(Lusi) run the show, with council having zero insight into how the department is being run!!
At Lusi’s presentation to council last week, the only question a councillor could come up with was “who would someone call if they had a problem with their water? Really?? If you don’t have any interest in what is going on in the Water department, just sit there quietly😂
Why not contract out the other core assets as well? This will leave the councillors more time to decide what crosswalk to paint next

John
Reply to  Sandpiper
23 days ago

Once again the Town is aiding the pockets of the developer in approving-settlement ponds instead of demanding they pay upfront for larger pipes and water treatment plants .
Missisagua was build on the backs of the developers not the rate payer!
so far I have spotted mosquito breeding ponds on Foote Crescent, one each side if Brooke Road East and West, three in the new Tridell development and maybe one off King street .This is over and above the very large storm water settling pond the council built off Division Street . Keep you gutters clean is the councils only contribution to control the bugs while they build breeding dens
This use of settlement ponds is such old technology and is avoided in Europe. I guess without a Planning Department that so understaffed it is lie back and be ripped off

Cobourg taxpayer
Reply to  John
22 days ago

Just some clarity here John. The storm water management ponds are for managing storm (rain) water so it does not run directly into the lake/water courses and polluting those. Much healthier for the environment to not have storm run off going directly in to the lake. Storm water never goes through water treatment plants which are for treating lake water so we can drink it. Then there are sewage treatment plants with their own settling ponds, no mosquitos there. These are 3 completely different systems in Ontario. No idea what Europe does. I don’t know if there is mosquito breeding, the Brook Road South pond has frogs which would eat larvae. Some idiot threw in goldfish years ago which are an invasive nonnative species but would eat mosquito larvae as well.