The CNAM Knowledge Pod on January 17th focussed on the connected topics of Long-term Capital Planning, and Developing Levels of Service
Two speakers kicked-off the discussions before moving into breakouts for group sharing:
- Mike Benson, University of New Brunswick – McNamara’s Fallacy and Integrated Financial Planning
- Darren Joseph, Sunshine Coast Regional District – Local Government Example
A poll was conducted with the participants on the timeframe for their capital plan. The range of responses from 5 years (42%) to 25 years (18%).
Highlights from one of the breakout groups discussions:
- Denny Boskovski, Manager of Corporate Asset Management, City of Markham ON
- Jacqueline Weston, Asset Management Program Manager, District of Saanich BC
What challenges have you experienced in capital planning?
- Hiring people with asset management experience
- Having good information to do capital planning
- Integration of capital planning with all lifecycle activities (acquire, operations, maintenance, renewal, disposal)
- Integration of capital planning with strategic objectives
- Markham has a Lifecycle Reserve Study (contribution to reserve for replacement/renewal of assets), which is updated annually with a 25 year forecast
- For the 2024 AM Plan, Markham is planning to increase the forecast from 25 years to 75 years (based on longest asset useful life)
- Asset Management governance structure is important (Markham working on this)
What system(s) are being used to track their capital plans (spreadsheets, AM or ERP software, other?)
- Markham uses EAM system, Lucidity (full range of functionality: Inventory, CRM, CMMS); implementing using a phased approach by department (first was Environmental Services – w/ww/storm, second phase was operations roads/park, Phase 3 – Facility assets)
- Markham’s Facility assets are managed in a decentralized fashion (building envelope for various buildings managed by different departments; outside of building department managed by operations group)
- Reserve Study uses Access database
How do other groups account for potential grant funding in the future?
- Don’t assume future grant funding (only include if it is a certainty, such as gas tax funding, DCC, etc.)
How are other groups determining inflationary value for future replacement costs?
- AM Planning is all done in today dollars (no inflation factor)
- AM Plans updated annually to account for inflation
- Markham Reserve Study is updated each year to account for inflation
How long is your capital planning horizon? 5 year? 10 year? longer?
- Markham 25 years but will be changing to 75 years
- Saanich Financial Plan has 5 year horizon, but AM Strategy has a 100 year forecast for determining replacement funding needs
How do you link levels of service to capital planning?
- Markham is in process of developing asset portfolio level LoS following the IPWEA Framework
- Start with Customer Values (what’s important to your customer, go into building want it to be safe and warm), then LoS broken down into Customer LoS (condition, function, capacity) and Technical LoS (all regular operating programs with metrics behind it, e.g. # km lane resurfacing every year)
- Technical LoS roll up to Customer LoS, which rolls up to Customer Values
- Conversation with Council is focused on Customer Values and Customer LoS
