Asset Management is an integrated process bringing together planning, finance, engineering and operations to effectively manage existing and new infrastructure to maximize benefits, reduce risks and provide satisfactory levels of service to community users in a socially, environmentally and economically sustainable manner. Assets included in the plan are manufactured assets such as buildings and roads and will also include the Districts groundwater resource.
The District’s Asset Management Plan outlines a long term approach for capital renewal investment. To provide clarity and transparency, as a next step an Asset Management Levy will be introduced to the tax notice in 2019. This levy will identify the portion of the property taxes that are dedicated to infrastructure renewal. This will need to increase over a ten or fifteen-year period to reach sustainable levels. Council will be considering a policy approach to funding asset management in 2019.
Funding to begin the process of implementing the District’s Asset Management Plan is included with a transfer to reserves for future infrastructure replacement. With a focus on the road system for 2018, a Road Surface Profile and Pavement Management Plan is funded, along with road resurfacing and shouldering.
The next steps in asset management was for the District to secure grant funding from the Federation of Canadian Municipalities (FCM) Municipal Asset Management Program to develop a pavement management strategy, integrate asset management into a long term financial plan, and to support staff training and mentoring in relation to the project.
The District was successful in securing the FCM grant and part of the work resulting from this funding included undertaking a pavement condition survey and developing a Reserves and Surplus Policy.
A pavement condition survey was undertaken and it is now intended to be incorporated into the Five Year Financial Plan.
Council received a presentation of the pavement condition survey on Monday, March 11, 2019 - the presentation can be found here: Link
In additional to the pavement assessment The Brentwood Advisory Group also introduced a Reserves and Surplus Policy that reflects the Districts current approach to reserves management, incorporates the strategy envisioned in the Districts Asset Management Plan and allows for flexibility in the future.
The report from the BAG further goes on to state:
Healthy reserves and surplus levels are important in achieving community goals such as financial health and stability. The proposed policy has been developed to provide consistent direction for the establishment, maintenance and use of Reserves and Surplus in meeting the Districts short-term and long-term financial goals.
The framework is focused on providing:
• Long-term Financial Stability,
• Predictable Tax Levies,
• Contingencies for Operating Emergencies,
• Safeguard and Maintain Existing Assets, and
• Finance New Capital Assets
Using four fundamental principles:
• The District will strive to be proactive in terms of financial health and stability;
• Reserves and surplus goals will be consistent with The Districts longer-term financial plan and Sustainable Asset Management Plan;
• Actual reserves and surplus balances will be benchmarked with other jurisdictions and with pre-determined targets on an ongoing basis to gauge whether financial health is being achieved, and
• Annual disclosure of reserves and surplus (The Scorecard).
Three Areas of Reserves and Surplus are proposed:
1. OPERATING (WORKING) CAPITAL
The District will maintain an Unappropriated Surplus balance in its General Operating Fund for working capital purposes, i.e. to provide for operating expenditures before property taxes and/or user fees are collected. Given the stability of District revenues and moderate level of financial risk a target of 6 months revenue (approx $1,400,000) is suggested.
2. OPERATING RESERVE FUNDS – CONTINGENCIES and PROJECTS
These are two contingency reserves in case of major emergent operating Issues and one-time and intermittent projects.
• Financial Stabilization Reserve Fund – A range of between one month’s revenue $231,000 (minimum) and two months revenue $463,000 (Optimal) is suggested. This will provide Council with the flexibility to fund projects from time to time and to cover unexpected emergencies if they occur.
• Snow Contingency Reserve Fund – A range of between $75,000 and $150,000 to provide a reasonable contingency for significant winter snow events is suggested.
• Westshore Recreation Reserve Fund – no specific level identified.
If these reserves are used to fund emergency costs or one-time projects they should be replenished to at least minimum levels with three years.
3. STATUTORY RESERVE FUNDS – INFRASTRUCTURE and LAND
These are reserves for the planned replacement of District assets, the purchase of land and a general capital reserve for future new capital priorities of Council.
• Community Works Gas Tax Reserve Fund
• Fire Buildings, Vehicles and Equipment Replacement Reserve Fund
• Municipal Buildings, Vehicles and Equipment Replacement Reserve Fund
• Heritage Structures Replacement Reserve Fund
• Community Hall Replacement Reserve Fund
• Park Facilities Replacement Reserve Fund
• Roads Replacement Reserve Fund
• Bridge Replacement Reserve Fund
• Groundwater and Drainage Reserve Fund
• General Capital Project Reserve Fund
• Parkland Acquisition and Development Reserve Fund
• Land Sale Reserve Fund
The presentation on the Reserves and Surplus Policy can be seen here: Link