facing the infrastructure challenge 2 - edmonton

FACING THE INFRASTRUCTURE CHALLENGE 2 Figure1:Edmonton’sinfrastructureassetsbyclass,withreplacementvalue* 3

Emergingissues 4 Figure2:Averageageandexpectedlifeofinfrastructureassets,byclass. 4 Figure3:Factorswithanimpactoninfrastructureandservicedelivery 5

Thefinancial‘bigpicture’ 5 Figure4:2006-2015LongRangeFinancialPlanandtheinfrastructuregap 5

Helpfromtheotherordersofgovernment 6

Edmonton’sstrategicapproach 7 Figure5:StatusofEdmonton’sinfrastructureassets 7

DEVELOPING SOLUTIONS 9

EDMONTON CITY COUNCIL’S INFRASTRUCTURE STRATEGY 10

Council’sVision 10

Administration’sMandate 10

GuidingPrinciples 10

Goals 11

LONG-TERM TACTICS AND ACTIVITIES 12

Goal1:Defineneeds:Evaluateandreportthestateofinfrastructureassets 12

Goal2:Developsolutions:Implementsustainableinfrastructureassetmanagementpractices 13

Goal3:Securefunding:Ensureadequatefiscaltoolsandresourcestofundinfrastructureassets 14

APPENDIX A: INFRASTRUCTURE ASSET MANAGEMENT DEFINITIONS 15

Table of Contents

2 EdmontonCityCouncil’sInfrastructureStrategy

OurCity’sinfrastructureandprocessesmustrespondtotheneedsofagrowingpopulationandeconomy.WeneedtosupportandenhancetheinfrastructureassetsthatmakeEdmontonmorethanaplacetowork:theseassetsmakeourCityaplaceforcurrentandfuturegenerationstobuildtheirlives.

· Mayor Stephen Mandel. January16,2005.

Thesinglebiggestchallengefacingmunicipalitiestodayisfindingfundingformuch-neededupgradestoagingoroutdatedinfrastructure,andforgrowth-relatednewinfrastructure.

· Honourable Rob Renner, Minister of Municipal Affairs SpeechtotheAlbertaAssociationofMunicipalDistrictsandCountiesSpringConvention,April6,2005.

Infrastructureisacrucialinvestmentinoureconomicproductivityandqualityoflife.Itisthesinewofournationaleconomy–awebofconcrete,steel,andfibreopticsthatbindsourcountrytogether,andbringsourcountrytotheworld.Toharnessoureconomicpotential,Canadamustaddressitsnationalinfrastructuredeficit.

· Prime Minister Stephen Harper. January11,2006.

EdmontonCityCouncil’sInfrastructureStrategy 1


Acity’srelativehealthcanbemeasuredbytheabilityofitsinfrastructuretomeetcitizens’needs.Infact,thepropermanagementofinfrastructurehelpstocreatethetypeofcityinwhichwewanttolive,workandplay.

Fewofusthinkaboutthecrucialrolemunicipalinfrastructureassetsplayinourday-to-daylives.Weassumepotholeswillbefilledandtrafficsignalswork;wetakeforgrantedthatwastewaterisproperlytreatedbeforeitisreleasedintotheriver;wetrustthattheparksandpoolswhereourchildrenplayaresafeandwellmaintained.Likeanyresponsiblehomeowner,theCityhasaplantomanageitsinfrastructureassetsinordertomanagegrowth,encourageeconomicdevelopment,andprotectpublicsafety.

Facing the infrastructure challenge

Economicsuccesstoday,andevenmoresointhefuture,willrequiremanythings,andamongthemaresustainable,well-financed,andworld-classbigcitiesthatattractandretainthebestandthebrightest.Futuresuccessmeansbuildingbigcitiesthatcanmeethighexpectationsandloftyaspirations,aswellaseffectivelyandefficientlydeliveringahighqualitypackageofmunicipalservicesandgoodqualityinfrastructureatanaffordableprice.

·Rationale for Renewal. CanadaWestFoundation,September2005.

EdmontonCityCouncil’sInfrastructureStrategy �

ASSET CLASS DESCRIPTION REPLACEMENT VALUE % OF TOTAL

Drainage Sanitary,stormandcombinedsewers(includesmanholesandcatchments),andwastewatertreatment.

$8.41billion 42%

Road right-of-way Roads(arterial,collectors,local;curbsandgutters),sidewalks,bridges,gates,streetscapes.

$6.37billion 31%

Parkland Horticulture,trails,hardsurfaces,playgrounds,sportsfields,parksandassociatedinfrastructure(climbinggyms,etc.).

$1.48billion 7%

Transit facilities and equipment

LRTsystemfacilitiesandequipment,transitcentres,busequipmentandsystems,trolleysystem.

$1.02billion 5%

Buildings Civicoffices,publicworksyards,emergencyresponseandpolicebuildings,andlibraries.

$674million 3%

Fleet Transitbuses,cityvehiclesandautomotiveshopequipment. $611million 3%

Traffic control and lighting Trafficsignals,signs,streetlightingandparkingmeters. $540million 3%

Recreation facilities Arenas,leisurecentres,swimmingpools,FortEdmonton,ValleyZoo,etc. $534million 3%

Affordable housing Non-profithousing,communityhousing,andseniorslodges. $220million 1%

Waste management facilities Administrativefacilities,transferstations,processingfacilities,landfilloperations. $185million 1%

Technology equipment Servers,networks,allcommunicationequipment. $107million 0.5%

Others Emergencyresponseandpoliceequipment,librarycontents. $91million 0.5%

Total replacement value $20.2 billion 100%

Edmonton’sinfrastructureassets,whichhaveareplacementvalueof$20billion,includeroads,sewerlines,transit,emergencyresponsevehicles,swimmingpools,parks,informationtechnologyandmore.Alltheseassetsmakevitalcontributionstoourqualityoflife.

*Allfigureshavebeenrounded.

Figure 1: Edmonton’sinfrastructureassetsbyclass,withreplacementvalue*

� EdmontonCityCouncil’sInfrastructureStrategy

Emerging Issues

Thejobofbuildingandmaintainingtheseinfrastructureassetsisbecomingincreasinglydifficult.ManyofEdmonton’sinfrastructureassetswerebuilteitherinthe1950sor‘70s.Asaresult,theaverageageofEdmonton’sinfrastructureisover30yearsandtheaveragelifeexpectancyofinfrastructureassetsis50years.Havingpassedthehalfwaypoint,theCityisapproachingacriticalperiodtoensurethatitsinfrastructureassetscontinuetomeettheneedsofEdmontoniansinthefuture.

Inaddition,eachyearthousandsofnewresidentsflocktotheEdmontonregiontotakeadvantageofemploymentopportunitiescreatedbyourthrivingeconomy.Personaldisposableincomeisontheriseandlowinterestrateshaveresultedinanextremelyhealthyhousingmarket–similartothebuildingboomofthe1970s.

Edmontonhasgrownbymorethan46,000personssince2001,whichislikeaddingtoitspopulationanentirecitythesizeofMedicineHat.Thispopulationgrowthhasasignificantimpactoninfrastructurerequirements.Inthesamewaythatagrowingfamilymayfindthatithasbecometoolargeforatwo-bedroomhome,theCitymustbuildnewinfrastructuretosupportitspopulationgrowth.

Edmonton’ssituationisalsouniquebecausethereare21municipalitiesintheimmediateregionaccountingforalmost300,000additionalpeople.Mostpeoplebenefitfromlivingincloseproximitytotheprovincialcapital,whichprovidesbig-cityservicesandopportunitiesthatwouldbeotherwiseinaccessible.

TensofthousandsofresidentsfromneighbouringmunicipalitiestraveltoEdmontoneverydayandsupportEdmonton-basedbusinessesthat,inturn,paylocalpropertytaxes.However,thiseconomic

activityalonedoesnotnecessarilyprovideacontributionequaltotherevenuerequiredtopreserveandmaintaintheCity’sinfrastructureusedbytheseresidents.

OtherfactorsthathaveanimpactonEdmonton’sinfrastructureincludedemographicchanges(agingpopulation,changingresidentialandmovementpatterns),politicalrelationships(changingrelationshipswiththefederalandprovincialgovernments),environmentalimpacts(suchasratificationoftheKyotoAccordandstricterpollutioncontrols),socialandculturalissues(low-costpublichousing,servicestotheeconomicallydisadvantaged)and

newtechnologiesthatinfluenceservicedeliverytocitizens.

Alberta’shealthyeconomyhasalsoledtohighlevelsofprivateinvestmentintheoilsandsandotherindustrialsectors,aswellasplansfromtheprovincialgovernmenttoimprovetransportationcorridorsandbuildnewschoolsandhospitals.Thishasfueledsubstantialinflationaryincreasesintheconstructionsector;adollartodaydoesnothavethesamepurchasingpowerthatitdidthreeyearsago.Edmontonmustcarefullymanageitsinvestmentininfrastructuretoensureitgetsvalueforeverydollar.

Canadiansknowwhattheywantfortheircommunities.Butwherewehopetoseeclean,green,productiveandwell-runmunicipalitiesandtowns,weseeagrowinggapbetweenwhatisandwhatcouldbe.Weseethesignsofdecline,thewearandtearthatsignalstrouble.

·Quality of Life in Canadian Municipalities: Highlights Report 200�.FederationofCanadianMunicipalities,April2004.

Figure 2: Averageageandexpectedlifeofinfrastructureassets,byclass


Alltheseissuesmakeinfrastructuremanagementanincreasinglydifficulttask.Respondingeffectivelyrequiresastrategicapproach,onethatbridgesthespacebetweenpolicy,asdeterminedbyCityCouncil,andservicedelivery,asperformedbytheAdministration.EdmontonCityCouncil’sInfrastructureStrategyhelpstoprovidethatbridgeandincludesactiontosupporttheimplementationofnewpoliciesandpracticesthatwillsupportlong-termmunicipalsustainability.

The financial ‘big picture’

In1998,theCity’sLongRangeFinancialPlan(LRFP)identifiedan‘infrastructuregap’–thetotalcapitalinfrastructureinvestmentrequiredoveraten-yearperiodcomparedtoavailablerevenues–thatexceededtheCity’sabilitytobridgeexistingrevenuesourcesandmanagementpractices.

CityCounciladoptedEdmonton’sfirstInfrastructureStrategyin1998asastrategicresponsetothewideningdisparitybetweennecessaryinfrastructureinvestmentandavailablefunding.

Figure �: Factorswithanimpactoninfrastructureandservicedelivery

Figure �: 2006-2015LongRangeFinancialPlanandtheinfrastructuregap


The2006-2015LRFPidentifiestotalcapitalspendingof$8.6billion.Ofthattotal,nearly56percentor$4.8billionis‘funded’;thatis,theCityhasidentifiedrevenuefromtaxes,grantsanduserfeestopayforprojectswiththisvalue.Thecorresponding‘unfunded’portionoftheLRFP,whichisthevalueoftheinfrastructuregap,isapproximately$3.8billion.

Ofthe$3.8billionunfundedinfrastructuregap,nearly$1.7billion(44percent)isrequiredtorehabilitateexistinginfrastructure,$2.1billion(55percent)isrequiredtofundgrowthprojects,andtheremaining$30million(onepercent)forotherprojects.

ThispersistentcapitalfundingshortfallmeansthattheCityhasbeendeferringmaintenanceonexistinginfrastructureassetsanddelayingtheconstructionofnewassets,eventhough

delaysarecostly,becauseitsimplydoesnothaveenoughrevenuetomeetidentifiedneeds.

Municipalinfrastructureexpertsrecommendthatmunicipalitiescommitbetweentwoandfourpercentoftheirtotalinfrastructureassetvalueeachyeartorehabilitation.ForEdmonton,withassetsvaluedatslightlymorethan$20billion,thisbenchmarkwouldtranslatetoanannualreinvestmentofbetween$400and$800milliontorehabilitateexistinginfrastructure.Overthenext10years,however,theCityhasthecapacitytospendonlyabout$260millionannuallyforrehabilitationandreplacement–slightlymorethanonepercentoftheassetreplacementvalueandsignificantlybelowtherecommendedtwotofourpercent.Thelongerthatrequiredrehabilitationisdeferred,themoreexpensiveitbecomestobringassetsbacktoanacceptablecondition.

CurrentreinvestmentratescannotpreservetheCity’s$20billioninvestmentinexistinginfrastructureinitscurrentcondition,norcancurrentbudgetskeeppacewithEdmonton’srequirementsandprojectedgrowth.

Help from the other orders of government

Municipalrevenues,whichareoverlyreliantonpropertytaxes,cannotpreserveexistinginfrastructureorsustaingrowthprojections.Chronicunderfundingcreatesabacklogofdeferredcapitalprojectsandimpairsthe

City’sabilitytomaintaincurrentservicelevels.Thesecombinetoreduceourabilitytosupportgrowthandeconomicdevelopment.

Overthenextdecade,Edmontonwillreceiveroughly$1.5billionincombinedcommitmentsfromthefederalandprovincialgovernments.Thefederalgovernmentagreedin2004torefundtheGSTtomunicipalitiesandtoshareapercentageofthefederalgasolinetax.In2005,theprovincialgovernmentcommitted$3billioninnewinfrastructurefundingtoAlbertamunicipalitiessharedonapercapitabasis,whichmeansthatEdmonton’seventualsharewilldependoncensusdata.

ThoughthereisnosinglesolutionthatwillalleviateEdmonton’sinfrastructurechallenges,persistenceiscrucialastheCityexploressuitablerevenuesourcesandmorecost-effectiveapproachestomanagetheinfrastructuregap.

·Thinking Outside the Gap: Opportunities to Address Edmonton’s Infrastructure Needs.ReportoftheOfficeofInfrastructure,CityofEdmonton,December2004.

EdmontonCityCouncil’sInfrastructureStrategy �

ThisnewfundingenablesCityCounciltopursueprojectsthatwouldotherwisehavebeenindefinitelydeferred,suchasthe23rdAvenue/GatewayBoulevardinterchange,thesouthernextensionoftheLRTtoCenturyPark,busrapidtransit,neighbourhoodinfrastructure,floodpreventionandnewemergencyfacilities.

Theimportanceofthisnewfundingcannotbeoverstated;atthesametime,itcannotbedeniedthatEdmontonstillhasasignificantshortfall.Edmontoncontinuestofaceadelicatebalancingact–itmustmaintain

andreplaceexistinginfrastructurewhiledealingwithincreaseddemandstosupportgrowth,andthatmeansmarryingnewfiscalgoalswithimprovedinfrastructureassetmanagement.

Edmonton’s strategic approach

Comprisedofsixprincipalstrategiesandninesupportivestrategies,theCity’sfirstInfrastructureStrategywasintendedtoensurethat:

·municipalinfrastructureisinagoodstateofrepair;

·rehabilitationanddevelopmentprogramswereadequatelyfunded;and

·thedifferencebetweencapitalrequirementsandavailablefunding–theinfrastructuregap–isaddressed.

AkeycomponentofEdmonton’sInfrastructureStrategywasthecreationin2000oftheOfficeofInfrastructure.Overthepastfiveyears,theOfficehas:

·createdandmaintainedacomprehensiveinventoryoftheCity’sofinfrastructureassets;

·coordinatedregularupdatesoftheCity’sinventoryandinvestmentneedstoCityCouncileverytwoyears;

·developedandimplementedstrategiestoaddresstheinfrastructuregap;

·coordinatedtheinfrastructurefundsreceivedfromfederalandprovincialprograms.

Tomakesurethatlimitedcapitalresourcesarewiselyinvested,Edmontonhasdevelopedorisintheprocessofdevelopingavarietyofinnovativeinfrastructureassetmanagementtoolsthatinclude:

·arankingsystemtoevaluatethestateandconditionofexistinginfrastructureassetsofallclasses;

·ariskassessmentmethodologytoquantifytheriskofassetfailureandrelatethisrisktoinvestmentlevels,and

·alifecyclecostmethodologytosupportbetterdecision-makingandlong-termplanning.

OverthepastfiveyearstheCityhasseengreaterintegrationofitsinfrastructuremanagement,budget,andplanningprocesses.ThisintegrationbetterenablestheCitytoprioritizeinfrastructureinvestmenttomatchcitizendemandsandprogramneeds.TheOfficeofInfrastructurehelpsCitydepartmentsdefinethecostsassociatedwithassetmaintenance,

rehabilitationandconstruction.Asaresult,theCitywillbeabletomoreaccuratelypredictitsbudgetrequirementsinboththeshort-andlong-term.

Figure 5: StatusofEdmonton’sinfrastructureassets

Municipalitiescontinuetofacefinancialpressuretorepairorreplaceexistinginfrastructure.Somemunicipalpropertytaxassessmentbasesaredecliningwhileothermunicipalitiesfacerapidgrowthpressures.Municipalitiescontinuetoindicatethatcurrentfundinglevelsandrevenuesourcesmaynotbeadequatetomeetserviceorinfrastructuredemands.

· Alberta Municipal Affairs Business Plan 200�-200�.


Edmontonhasadoptedothermeasurestohelpdealwithitsinfrastructurechallenges.TheSanitaryServicingStrategyFund,apartnershipforgedbetweentheCityanddevelopersin1998,collectsfeesfromdevelopersthroughchargesappliedtonewneighbourhoodsanddevelopments.Thefundfinancestheconstructionofmajorsanitarysewersandmakesitpossiblefordevelopmentinnewcommunitiestoproceed.

ArterialRoadwayAssessmentsisanothertoolusedbytheCitytopayforroadinfrastructureassociatedwithagrowingcity.Theseassessmentsrequirethatdeveloperspayforthefirsthalfofanarterialroadwaylocatedwithinapredeterminedarea.

Itshouldalsoberecognized,however,thateventhoughtheinitialcapitalinvestmentispaidelsewhere;therearelifecycleoperation,maintenance,rehabilitationandreplacementcoststhatneedtobeaddressedwhentheCityassumesownershipoftheseassets.

In2002CityCouncilamendedtheDebtManagementFiscalPolicytopermitborrowingofupto$50millioneveryyearoverfiveyearstofundlarge-scale,high-priorityinfrastructureprojects.

TheCityalsoconvertedlanddrainagetoautilityin2003,enablingthedrainagenetworktobecomeaself-supporting,user-paysystemindependentofpropertytaxes.

Edmonton’sstrategicapproachtoinfrastructureassetmanagementhasledtoitsinternationalrecognitionasoneofNorthAmerica’smostprogressivejurisdictionsbysuchauthoritiesastheInstituteofPublicWorksEngineeringAustralia;theFederalHighwayAdministration;theAmericanAssociationofStateHighwayandTransportationOfficials;CanadianPublicWorksAssociation;CanadianSocietyofCivilEngineers;Transport,InfrastructureandCommunitiesCanada;andtheFederationofCanadianMunicipalities.

TheCityofEdmontonhasalsobeenapproachedbymanymunicipalitiesacrossCanada,theUnitedStatesandAustraliawhowishtolearnmoreaboutitsinnovativeapproachtoinfrastructureassetmanagement.

TheOfficeofInfrastructurehasgreatlyenhancedtheCity’sawarenessandunderstandingoftheinfrastructurechallengeitfaces.WiththeadoptionofthenewInfrastructureStrategy,CityCouncilhasshiftedEdmonton’sfocusfrom‘definingtheproblem’to‘developingsolutions.’

Thepotentialcostsoffailingtoaddressthe[infrastructure]issueincludehigheroperatingcostsforgovernmentandbusiness,negativeimpactsontheenvironment,threatstopublichealthandsafetyaswellasothersocialcosts,losteconomicpotentialandproductivity,andmostimportant,theprospectofevenhighercapitalcostsinthefuture.Clearly,theissueisonethatneedstobeaddressed.Giventhepotentialmagnitudeoftheproblemandthecostsoffailingtoact,thisisnotimetobetimid.

· No Time to Be Timid: Addressing Infrastructure Deficits in the Western Big Six.CanadaWestFoundation,February2004.


TheOfficeofInfrastructurehasworkedwithCityCouncil,seniormanagers,administrativestaffandexternalstakeholdersoverthepasttwoyearstorevisetheInfrastructureStrategy.Threefundamentalsustainabilityobjectiveshaveemergedoutoftheseconsultations.

1.Balancetheallocationofavailableresourcesbetweenrehabilitationandgrowth.

2.Increaseoperationsandmaintenance,rehabilitationandreplacementfundingtocorrespondtonewassetsaddedtotheinventory.

3.Addressthebacklogofdeferredrehabilitationprojects.

Eachoftheseobjectivesdependsontheavailabilityofadequateandsustainablefunding.

EdmontonCityCouncil’sInfrastructureStrategyprovidesthedirectiontoaddresstheseobjectivesandtosupportlong-terminfrastructureinvestmentandreinvestmentstrategiesthatwillmaintaintheCity’sassetsintothefuture.

Inaddition,theStrategyalsocommitstheCitytodevelopnewtoolsthatfurtherenhancetheinfrastructuremanagementsystemacrossthecorporation.TheStrategysupportscontinuedcollaborationamongtechnicalplanners–thosewhopropose,designandbuildinfrastructureassets–andfinancialdecision-makers.

Giventhatsoundinfrastructureisessentialtosupportanycommunity’sgoalsforgrowth,economicdevelopment,andpublicsafety,ourabilitytobuildandproperlymaintainourinfrastructureisessentialtoensureEdmontonremainsanattractiveandcost-effectiveplacetoliveanddobusiness.

Edmonton’s leadership and innovation

EdmontonisoneofthefirstcitiesinCanadatohavecapturedacomprehensiveinventoryofitsinfrastructureassetsandtohaveimplementedarankingsystemtoevaluatethestateandconditionofexistinginfrastructureassets.BoththeFederationofCanadianMunicipalitiesandtheAlbertaUrbanMunicipalitiesAssociationareencouragingtheirmemberstodevelopaninfrastructureassetinventoryandratingsystem.

Physical condition:Theconditionofanassetthatenablesittomeetintendedservicelevels(e.g.theintegrityofadrainagesystem).

Demand/capacity:Thecapacityofaninfrastructureelementtomeetservicerequirements(e.g.theabilityofaparticularroadtohandletrafficflow).

Functionality:Theabilityofaninfrastructureelementtomeetprogramdeliveryrequirements(e.g.whetherornotarecreationfacilitymeetsuserexpectations).

TherankingsystemhelpsCityCouncilandtheAdministrationtocomparetheconditionofdisparateinfrastructureelements–roadstodrainageorparkstoinformationsystems–andimprovesthequalityofinformationusedtomakemoreinformeddecisionsandestablishpriorityprojects.

Developing solutions


EdmontonCityCouncil’sInfrastructureStrategyarticulatesCityCouncil’scommitmenttodevelopandmaintaintheCity’sinfrastructureassets,whichsupportthedeliveryofprogramsandservicestocitizens.

TheStrategywasfirstdevelopedinresponsetoagrowingunderstandingoftheCity’sinfrastructuregap.

Advancedmanagementtechniques,manyofwhichhavebeendevelopedinEdmontonandattractedinternationalattention,helpCityCouncilmakemoreinformeddecisionsandusescarceresourcesmoreeffectivelytoaddresschallenginginfrastructuredemands.

MoreeffectiveinfrastructureassetmanagementwillhelptheCitytoprovidecost-effectivemunicipalservices,promoteeconomicdevelopment,ensurecitizenhealthandsafety,protecttheenvironment,andsupportahighqualityoflifeforallEdmontonians.

Council’s Vision

Sustainableinfrastructure,maintainedthroughsoundfinancialpoliciesandassetmanagementpractices,willcontributetothevibrancyoftheCity’seconomy;thevitalityofitsneighbourhoods;safetyofitscitizens;protectionoftheenvironment;anditscapacitytoaccommodategrowth.

Administration’s Mandate

Toensurethatprogramstorenew,upgradeandexpandinfrastructureassetsaresustainableandsupporttheCityofEdmonton’splansandpriorities.

Guiding Principles

1.Infrastructureassetsshouldbesocially,environmentally,andeconomicallysustainable.

2.Infrastructureassetsarecriticaltoeconomicdevelopmentandqualityoflife.

3.InfrastructureprogramsshouldsupportthevaluesandobjectivescontainedinplansandprioritiesapprovedbyCityCouncil.

4.Infrastructureisacapitalinvestmentandmustberesponsiblymanaged.

5.Infrastructureassetsmustbemaintainedinaconditionthatenablesthemtoperformtheirintendedfunctions.

6.InfrastructureassetmanagementwillhelptheCitytobalancerenewal,upgradingandexpansionprograms.

Edmonton City Council’s Infrastructure Strategy


Goals

ThreeprimarygoalsweredevelopedtosupporttheimplementationofEdmontonCityCouncil’sInfrastructureStrategy.

Goal 1: Define needs Evaluateandreportthestateofinfrastructureassets.

Keyactionitems

1.1 Maintainanassetinventory,valuationandconditionratingsystemforallmunicipalinfrastructure.

1.2 Determinethecurrentandprojecteduseofinfrastructureassetsandrelatedcosts.

1.3 Developaprocesstoevaluatelevelsofservice.

1.4 Reportinfrastructureperformanceinthemeetingofbroadersocial,environmentalandeconomicobjectivesoftheCity.

1.5 Communicatetothepublicthescope,valueandimportanceofinvestmentininfrastructure.

Goal 2: Develop solutions Implementsustainableinfrastructureassetmanagementpractices.

Keyactionitems

2.1 Developandapplyevaluationtoolsthatenhancecorporatepoliciesandsupportinfrastructureinvestmentdecisions.

2.2 Evaluateapproachestosustainableservicedelivery.

2.3 Developalong-termfinancialstrategytosupportinvestmentinexistingandnewinfrastructure–operationsandmaintenance;renewal,upgradingandexpansion.

2.4 Encouragethebalancedallocationoflimitedinfrastructureresources.

2.5 Researchinfrastructuremanagementandservicedeliverybestpractices.

Goal �: Secure funding Ensureadequatefiscaltoolsandresourcestofundinfrastructureassets.

Keyactionitems

3.1 Pursuealternativesourcesofrevenue.

3.2 Reviewsharedservicedeliveryandcost/revenue-sharingmechanismswithintheCapitalregion.

3.3 Encourageeffectivecoordinationwithotherserviceproviders(powerandwater,cable,schoolboards,etc.).

3.4 Collaborateonkeyinvestmentsbyotherordersofgovernment,institutionalstakeholders(UniversityofAlberta,GrantMacEwan,NAIT,CapitalHealthAuthority,etc.),thedevelopmentindustryandnon-governmentalorganizations.


Long-Term Tactics and Activities

Thetactics/activitiesandtheiranticipatedoutcomesassociatedwiththeGoalsoftheInfrastructureStrategy2006aredescribedinthefollowingsectionandaretobeundertakenbytheAdministrationasawhole.

KEY ACTION ITEMS TACTICS AND ACTIVITIES OUTCOMES

1.1 Maintain an inventory, valuation and condition rating system for municipal infrastructure.

· Acquirebuy-infromnecessarypartners.

· Involvedepartmentsindevelopmentandapplicationofinventoryandratingsystem.

· Establishaprocesstomaintain,updateandreportinventoryannually.

· Addressthebasicelementsofassetmanagement.

Aqualityinfrastructureassetmanagementinventorythatwillprovidedecision-makerswithaccurateanddetailedinformationaboutthestateandconditionofinfrastructureassets.

1.2 Determine the current and projected use of infrastructure assets and related costs.

· Analyzegrowthscenarios.

· Assessandprojectfutureinfrastructureneeds.

Currentandprojecteduseofinfrastructurethatwillfacilitateplanningforfutureinvestmentandreinvestmentininfrastructure.

1.� Develop a process to evaluate levels of service.

· Identifycurrentservicelevels.

· Linkservicelevelsanddeliverycoststoinfrastructurerequirements.

· ReviewandconfirmservicelevelswithcitizensandCityCouncil.

· Developsystemofimplementingandapplyinglevelsofservice.

Servicelevelsthatproducesustainableinfrastructureandmeetcitizens’needs.

1.� Report infrastructure performance in the meeting of broader social, economic and environmental objectives of the City.

· Determinecriteriaandestablishperformanceindicators.

· Measureperformance.

· Estimatesocial,economicandenvironmentalimplicationsofinfrastructure.

· Benchmarkperformancewithothermunicipalities.

IndicatorsthatmeasureperformanceofinfrastructureassetsinsupportofCity’splansandpriorities.

1.5 Communicate to the public the scope, value and importance of investment in infrastructure.

· Coordinateaunifiedcorporatevoice.

· Developandimplementaninfrastructurecommunicationsplan.

· Providethepublicwithanopportunitytoprovidefeedback.

IncreasedpublicawarenessandsupportoftheCity’sinfrastructureneeds.

Goal 1: Defineneeds:Evaluateandreportthestateofinfrastructureassets

EdmontonCityCouncil’sInfrastructureStrategy 1�


2.1 Develop and apply evaluation tools that enhance corporate policies and support infrastructure investment decisions.

· Involvedepartmentsindevelopmentandapplicationofevaluationtools.

· Acquirebuy-infromdepartmentsandseniormanagement.

· Applytoolssuchaslifecyclecosting,riskassessment,returnoninvestment,andbusinesscasemodels.

· Promoteconsistentcorporate-wideuseoftools.

· Conducttrainingsessionsonuseandapplicabilityoftools.

· Providealiaisontosupportdepartmentsintheuseoftools.

· Innovativeevaluationtoolsthatfacilitateinformedinfrastructuremanagementdecision-making.

· Techniquesthatquantifysocial,economicandenvironmentalimpacts.

2.2 Evaluate approaches to sustainable service delivery.

· Identifyandevaluatemethodsofservicedelivery.

· AssessfeasibilityofimplementingbestpracticesintheCityofEdmonton.

· Reportfindingsandmakerecommendations.

· Facilitatedepartmentinformationandresourcesharing.

· Exploremethodstoincreaseinterdepartmentalsynergy.

· Recommendationstoimproveservicedelivery.

· Strongerworkingrelationshipbetweendepartmentsforeffectiveinfrastructuremanagement.

2.� Develop a long-term financial strategy to support investment in existing and new infrastructure – operations and maintenance; renewal, upgrading and expansion.

· Determinelong-terminfrastructureinvestmentandreinvestmentneeds.

· Determinecurrentandpotentialsourcesofrevenue.

· Developasustainablelong-termcorporatefinancialstrategyforinfrastructure.

· Strategythatwillidentifymeasurestoensuresustainablelong-terminvestmentininfrastructure.

2.� Encourage the balanced allocation of limited infrastructure resources.

· Determinerenewal,upgradingandexpansionneeds.

· Determineimplicationsonlevelsofservice.

· Determinecriteriaforbalancedallocationofresources.

· Identifyinvestmentpriorities.

· Guidelinesforabalancedallocationofresources.

2.5 Research infrastructure management and service delivery best practices.

· Participateinprovincial,nationalandinternationalorganizations.

· Developallianceswithothermunicipalities.

· Networkwithresearchinstitutesandothergovernmentagencies.

· EstablishEdmontonasacredibleauthorityoninfrastructureissues.

· Adoptionofbestpracticesandnewtechnologiesforbetterinfrastructuremanagement.

Goal 2: Developsolutions:Implementsustainableinfrastructureassetmanagementpractices

1� EdmontonCityCouncil’sInfrastructureStrategy


�.1 Pursue alternative sources of revenue. · Identifyandevaluateappropriatenessofpotentialrevenuegeneratingoptions.

· Evaluateandmonitortheuseofdebt.

· Clarifyrolesandresponsibilities–andassociatedresourcerequirements–withtheotherordersofgovernment.

· Pursuelegislativechangetograntmunicipalitiestheflexibilitytogeneratenewrevenuesources.

· Recommendationsforviablealternativesourcesofrevenue.

· Equitablepositionsamongallordersofgovernmenttosharecostsofinfrastructure.

· Increasedmunicipalcapacitytoinvestininfrastructure.

�.2 Review shared service delivery and cost/revenue-sharing mechanisms within the Capital region.

· DevelopalliancesintheCapitalregiontobenefitfromsharedservicesandbestpractices.

· Establishinter-municipalcommitteetosharebestpracticesamongmunicipalitiesandassessbenefitsofsharedservicesarrangementsintheCapitalregion.

· Implementsharedserviceinitiatives,asappropriate.

· DefinedresponsibilitieswithintheCapitalregionthatcanbesharedandmutuallybeneficial.

�.� Encourage effective coordination with other service providers (power and water, cable, school boards, etc.).

· Networkwithotherinfrastructure/serviceproviders.

· Developmechanismsforacoordinatedapproachwithotherprovidersofinfrastructure.

· Cooperationamongotherinfrastructure/serviceproviderstooptimizeinfrastructureinvestment.

�.� Collaborate on key investments by other orders of government, institutional stakeholders (University of Alberta, Grant MacEwan, NAIT, Capital Health Authority, etc.), the development industry and nongovernmental organizations.

· IdentifykeyinvestmentsintheCity.

· Exploreopportunitiesforcollaboration.

· Collaborationwithexternalstakeholderstooptimizeinfrastructureinvestmentopportunities.

Goal �: Securefunding:Ensureadequatefiscaltoolsandresourcestofundinfrastructureassets


Appendix A: Infrastructureassetmanagementdefinitions

Asset:Ausefulorvaluableresourcewiththeintendedpurposeofprovidingabenefitorservice.

Asset management:Anintegratedapproachinvolvingplanning,engineeringandfinancetoeffectivelymanageexistingandnewmunicipalinfrastructuretomaximizebenefits,reduceriskandprovidesatisfactorylevelsofservicetolocalusersandcitizens.

Best practices:State-of-the-artmethodologiesortechnologiesformunicipalinfrastructureplanning,design,construction,management,assessment,maintenanceand

rehabilitationthatconsiderlocaleconomic,environmentalandsocialfactors.

Contributed Assets:Assetsthathavebeenconstructedandfundedbydevelopersorotherpartnersanduponcompletiontransferredtocityownership.

Expansion:Investmentinnewassetsdesignedtoextendthesimilarstandardandtypeofservicetoagreaternumberofusers,e.g.,extendingadrainageorroadnetwork.

Infrastructure:Thephysicalassetsdevelopedandusedbyamunicipalitytosupportits

socialandeconomicactivities.TheCityofEdmonton’sinfrastructureinventoryincludessuchdiverseassetsasdrainage,roadsandright-of-wayinfrastructure,parksandgreenspaces,buildings,fleetvehicles,LRTandtransitfacilities,buildings,trafficcontrolinfrastructure,recreationfacilities,computernetworks,affordablehousingandlibraryresources.

Infrastructure gap:Thedifferencebetweenthecapitalneedsandfinancingcapabilities.

Level of service:Acompositeindicatorthatreflectsthesocialandeconomicgoalsofthecommunityandmayincludeanyofthefollowingparameters:safety,customersatisfaction,quality,quantity,capacity,reliability,responsiveness,environmentalacceptability,costandavailability.

Life cycle costing:Amethodofexpressingcostsinwhichbothcapitalcostsandoperationsandmaintenancecostsareconsideredovertheexpectedservicelifeofanasset.

1� EdmontonCityCouncil’sInfrastructureStrategy

Maintenance:Thesetofactivitiesrequiredtokeepacomponent,system,infrastructureassetorfacilityfunctioningasitwasoriginallydesignedandconstructed.Maintenancereferstoallactionsnecessaryforretaininganassetasnearaspossibletoitoriginalcondition,includingrepairbutexcludingrenewal(rehabilitationorreplacement).

· Repair: Theactionofrestoringacomponent,system,infrastructureasset,orfacilitytoitsformerconditionafterfailureordamage.Repairsdonotextendassetlifeorexpandcapacityanddonotincreaseorimprovefunctionality.

Operations:Thesetofon-goingactivitiesandexpensesthatallowtheuseofanassetforitsintendedfunction.Operationsrefertotheuseofanassetthatconsumesresourcessuchasmanpower,energy,chemicalsandmaterials.

· Operations (Asset): Thesetofon-goingactivitiesthatallowtheuseoftheassetforitsintendedfunction.

· Operations (Service delivery):Thesetofactivitiesandresourcesrequiredtodelivertheserviceorprogramrelatedtotheuseoftheinfrastructureasset.

Renewal:Investmentinexistinginfrastructuretorestoretoitsformerconditionandmayextenditsservicelife,whichmayincludereplacementofindividualcomponentsastheyageorbecomeobsolete.Capitalinvestmentinrenewalextendstheperiodofservicepotentialbutdoesnotchangethereplacementvalue,andsodoesnotincreasethesizeoftheinfrastructureassetportfolio.

· Rehabilitation:Theactionofrestoringacomponent,system,infrastructureasset,orfacilitytoaformerconditionorstatus.

· Replacement:Theactionofreplacingacomponent,system,infrastructureassetorfacility.

Replacement value:Thecostoftotalreplacementofanexistingassetintoday’sdollars.

Upgrade:Investmentinaddedorenhancedcomponentstoexistinginfrastructureassetsdesignedtoimprovethetypeofserviceprovidedtoexistingratepayers.Upgradinggenerallyprolongstheasset’sservicelifeorimprovesitsfunctionality,andmaysometimesbetheresultofbuildingcodechanges,newregulations,adjustedservicelevels,ortechnologyimprovements.

User-pay:Feeschargedspecificallytotheusersofaservicebasedontheuser’sconsumptionoforrelianceontheservice.

Utility:Aservicethatoperatesonaself-supportingandcost-recoverybasis.

References

AccountingforInfrastructureinthePublicSector,CanadianInstituteofCharteredAccountants.Toronto:CanadianInstituteofCharteredAccountants,2002.

Decision-MakingandInvestmentPlanning:PlanningandDefiningMunicipalInfrastructureNeeds.NationalGuidetoSustainableMunicipalInfrastructure(InfraGuide).Ottawa:NationalResearchCouncilandFederationofCanadianMuncipalities,2002.

InternationalInfrastructureManagementManual.Australia/NewZealandEdition.Version2.0.Sydney,Australia:2002.

For more information, contact:

City of Edmonton Office of Infrastructure Phone: (��0) �9�-2�9� Website: www.edmonton.ca/infrastructure

March2006

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facing the infrastructure challenge 2 - edmonton

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