CASE STUDY CITY OF HAMILTON, CANADA

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1 CASE STUDY CITY OF HAMILTON, CANADA a. Category Program Sustainability b. Executive Summary The City of Hamilton has learned that sustaining an asset management program requires more than just a good technical program. To be clear, a sound technical program that is founded on quality data remains the cornerstone for a strong asset management program. However, in order to sustain the program over a long period of time, the City of Hamilton has learned that keeping the governance of an organization educated and informed on the purpose and value of the Asset Management Program assures its long life. By providing yearly education to new and existing City Council members, the Asset Management team ensures that their recommendations are understood and respected during council meetings. It also results in the continuous improvement of the program as councilors better understand the program and thus can provide better scrutiny. Today the Hamilton Asset Management Program is able to move toward an integrated program that analyzes all city assets for a given location. City Operations and Maintenance now also play a vital role in their asset management program. The Asset Management Team continues to grow and to provide the City with a much clearer outlook for the future. Most important, that outlook is understood by the City s Council. c. Background Information Hamilton Amalgamates The City of Hamilton, Ontario, Canada, located on the western shore of Lake Ontario, is known as Canada s Steeltown due to the presence of major steelmaking companies. The city was incorporated in June of In 2008, this 162-year-old city is now home to a population of more than 500,000 due in part to an amalgamation of seven municipalities into one single city in This amalgamation was one of the catalysts for the Hamilton Asset Management Program, now arguably one of the most mature programs established in Canada. Figure 1: Hamilton view from atop the escarpment

2 In 2001, as an outcome of amalgamation, seven municipalities needed to merge while continuing to deliver their core services to their citizens. Of the many pains that occur during an amalgamation, the need to align different organizations with varying service levels and varying delivery mechanisms is one of the most difficult to execute. As expected, the amalgamation resulted in the upheaval of programs and service departments, which, in turn, resulted in the development of an entirely new organizational structure. It also brought about the merging of assets ranging in age from well over 100 years to brand new. From an asset perspective, the amalgamation pulled together: 6,200 lane-kilometers of roads in 14,000 segments bridges and culverts. 2,100 Km of water mains in 32,000 segments. 2,500 Km of sewer mains in 40,000 segments. 700 facilities. 5,520 acres of parkland and 430 outdoor facilities. Multiple fleet and transit systems. Amidst the challenges, there were opportunities. The amalgamation resulted in the creation of the Transportation, Operations & Environmental Department. At the time, the Department General Manager was a huge supporter of asset management. As a result, he took this opportunity to create a whole new service program called Asset Management. The new program was formed to help deal with the amalgamation of so many assets that were previously under seven different jurisdictions. Additionally, a new position of Manager of Asset Management (Asset Manager) was created and filled to lead the new program. We knew we had a problem. The issue of asset management actually began in the City back in with the water and sewer program. Staff recognized that the infrastructure was aging, little data on assets were available and water prices were insufficient to cover actual costs. Realizing that they were facing a potential crisis, City staff developed models on sustainability and discovered the need to start increasing rates by 8 to10% in order to sustain their services over the long run. During that time period, the Canadian National Research Council (NRC) was doing a study on asset sustainability called the Municipal Infrastructure Investment Program 2

3 (MIIP). Seeing an alignment of that project with their own internal efforts, the Hamilton team worked their way onto the MIIP. As a result, Hamilton went on to participate in the program, meeting with other municipalities and the NRC to discuss the state of the City s infrastructure. This participation helped Hamilton better analyze its own system and identify its funding gap. The result of this effort was an approval by City Council to move forward with rate increases for water and wastewater services. In fact, Hamilton has roughly doubled their rates during the last 8 years. Although the steel companies in Hamilton opposed the rate increase, it was approved. While the cost would impact their bottom line, due to education and outreach, these companies ultimately understood the importance of good infrastructure and as a result, also gained assurances on service levels to be provided by the City. d. Description of Best Practice including Personnel/Departments (Institutions) Involved Building an Asset Management Team A small staff team began developing forecasts for the City of Hamilton s overall asset life through to 2031 (see Figure 2) to show the requirements of the aging infrastructure. These figures were the catalyst needed to energize the asset management movement in Hamilton % of asset life Minor Maintenance 26% 23% 14% 25 50% of asset life Major Maintenance 37% 26% 23% 50 75% of asset life Rehabilitation 14% 37% 26% % of asset life Replacement 23% 14% 37% Figure 2: Hamilton s infrastructure life cycle forecast 3

4 Established as part of the Infrastructure and Environmental Planning Division, the Asset Manager moved forward and created a team that combined engineering, computer sciences, and financial skills. One of the advantages of starting an entirely new department during the amalgamation process was that all people hired on to the Asset Management team actually wanted to be there. No individuals were forced to fit into this team since it had no precedent within the organization. This fact alone allowed for the creation of a strong team whose members were often recruited from other business units based on their records of achievements and suitable skills. While the Asset Management team started off as a smaller group, it quickly became evident that this team could deliver as promised. The team was able to prioritize capital improvement programs and minimize political influence, using good data to justify their results. Their resulting success enabled the Asset Management team to take on the capital planning function for rehabilitation and reconstruction of capital projects. During the next reorganization, the Asset Management team created an engineering services and project management component along with a strategic and environmental planning function. As of June 2007, Hamilton s Asset Management team established a specifier / provider organization. The result was that the Asset Management team would not only define which projects would be delivered, the team now also would define how projects should be delivered. Under the Capital Planning and Implementation Division (CPI), as Senior Director, the Asset Manager now oversees Engineering Services, which includes Asset Management, Survey and Technical Services, Design and Development, and Construction and Inspection Services. Also part of the portfolio is Strategic and Environmental Planning Services, which includes Strategic Planning, Environmental Planning, Open Space Development and Park Planning, and Business Support Services. Getting Traction There were many challenges as the Asset Management team tried to establish the initial programs. For example, the Asset Management team had inherited seven different road and bridge management systems as a result of the amalgamation, all with different levels of data including core data that contained: Asset data (including attributes). Location data. Condition data (physical and functional). Historical maintenance data. The information for each system ranged from good to very poor, and each system used different data standards with varying levels of details. Additionally, the information was distributed across various different types of tools and/or databases. Each jurisdiction 4

5 had ownership in the information and process they brought to the table and wanted to see it used as the tool moving forward. The solution chosen was to scrap all existing road management systems and move forward with the implementation of the Hansen pavement management system. While this ultimately ended up serving the City well, it was a difficult change to institute. Creation of an Integrated AM Program Having moved forward with a coherent new roads asset management program, the City was able to develop an integrated asset management program, focusing on layering the asset condition data for multiple types of assets in a given location in order to better understand the risks and value of investments in a single location. The intent was to: Minimize the number of asset closures in a given area. Minimize the impact of the destroying a relatively new asset to fix an old one in the same location. Maximize the use of rehabilitation funds. Minimize the interruption to residents and businesses within the City of Hamilton. Some of the programs to integrate asset management that are in progress include the following: Ongoing asset inventory data capture and initial assessment. o o Hamilton has began utilizing a Global Positioning System (GPS) to determine the exact location of sewer lines as they move through maintenance hole inspections. Ongoing data capture from as-built drawings. Road inspection program to monitor the condition and commission repairs or rehabilitation of all paved surfaces. Implementation of a Bridge Management System that includes the inspection of bridges every two years. Implementation of a maintenance pothole inspection program that includes full system inspection on a three-year cycle, including development of a condition assessment rating system to support this program. Delivery of the sewer relining program (carried out at night). 5

6 Linking construction to the Asset Management Program so that an asset condition assessment can be updated when construction is completed. Ongoing capture of water pipe condition assessment along with asset attributes such as soil conditions, pipe material, and installation date. Ongoing data analysis of assets such as tracking breaks per KM, flow problems, odor complaints, back-ups, flows, pressures, etc. Hydrant inspection program performed by the City Fire Department. The ongoing geospatial data capture in Intergraph and Hansen. Developing Buy-in to an Integrated Asset Management Program An initial challenge that Hamilton faced early in the creation of its integrated Asset Management Program was how to pull in all different departments/disciplines to participate in an integrated AM program. The solution came in the form of an Infrastructure Project Coordinating Committee. The Infrastructure Project Coordinating Committee was developed to provide a forum for all business units to jointly review the infrastructure projects planned by the Asset Management team and be able to provide feedback and voice issues before the plan was finalized. The initial Infrastructure Project Coordinating Committee was not fully attended by all departments. Some managers thought they would voice their issues when they had the time. Knowing the importance of collecting everyone s input together consistently, the Asset Management team was able with the blessing of Senior Management to institute a very simple but powerful rule: If you don t show up you don t get to impact the program and there are no opportunities for changes later. This new rule has every department coming to the table with appropriate representation. While this effort was not without its bumps and bruises, today, department intercommunication has improved, infighting has greatly reduced and the objectives of the integrated asset management plan have come to fruition. Integration with Maintenance and Operations Another key aspect of Hamilton s success was the integration of Maintenance and Operations into the asset management decision making process. Too often these valuable resources are ignored. At Hamilton, they contribute to two key elements in the decision making process: Confirm the need for capital investments based on their understanding of asset condition. Provide maintenance and operational alternatives to capital investments in order to mitigate existing risks. 6

7 As part of the integration process, Maintenance and Operations Division (M&O) representatives now participate in the Infrastructure Project Coordinating Committee meetings. Having the maintenance teams in the meetings allows them to confirm, with detail, why work needs to be done, provide feedback on their inspections of infrastructure, and clarify their ratings. Part of capital planning is to identify supplemental projects that can be done if money happens to be available. Favorable bids below budget on approved projects cause funds to become available. Because of their close contact with the assets, the M&O team play an important role in identifying and prioritizing the mid-year projects. Importance of Information Technology A recent trend is the growth in the implementation of Integrated Decision Support Systems (IDSS) information technology as a tool to support an integrated asset management system. The purpose of these tools is to help cities create and analyze scenarios to optimize their asset life cycles based on condition and risk rankings. These tools take management system data (in Hamilton s case, data captured in CMMS and GIS) and provide a prioritized list of capital projects based on asset condition deterioration, project cost benefits, and risk mitigation. The tools also can identify the projected financial benefits to help justify alternate sources of funding. Based on the projected benefits, Hamilton moved ahead with the piloting of IDSS. The intent was to eliminate having to analyze the different asset types and pull together the data for all assets for a final integrated view. The idea was that it would be better to analyze them together as an intergraded system to avoid early preferences and prejudices. However, the City has decided for the time being that it will not immediately move forward with the full implementation of an IDSS. Two factors weighed heavily on their decision. The first was that the effort was not producing the results that were expected. Second, the City is having acute problems due to the long term under-funding and therefore clearly knows what projects must be done for the next three years. e. Description of Best Practices including Personnel/Departments (Institutions) Involved Importance of Governance Understanding and Buy-in of AM Program How has Hamilton been able to sustain and grow their Asset Management Program? How was the Asset Management team able to develop support for a long-term infrastructure investment program with elected officials who often serve short terms of 3-4 years in a climate of severe funding limits? The simple answer: education and communication. 7

8 Early on in the program, the Asset Management team realized that their efforts could be tossed aside easily as soon as the next city election. Councilors are elected based on their promises to deal within their wards. These problems are generally very visible as are their solutions. It was very feasible that the Asset Management team funding could be reduced or cut completely. Having realized real benefits from the earlier efforts with their water and wastewater program, the Asset Management team was convinced they needed to deal with council proactively to ensure their support: Councilors Asset Management Education Workshops A Council education workshop is held every spring by the Asset Management team. During these workshops, new councilors are educated on the internal workings of the asset management and capital planning processes. Because many councilors do not have a city services background, the intent is to help them understand the steps needed to deliver capital projects. As an example, they learn that if they want a park built in their ward, they first need a master plan, a process that alone can take about two years. Experienced councilors get updated on the latest developments. The Asset Management team has discovered that these education workshops have resulted in a much better working relationship and communication with council along with a better mutual understanding of each other s needs As part of the education, there is a review of the value of money over time, as well as concepts related to asset deterioration over time. During these same workshops, there is an update on asset conditions. The update is conducted through the use of report cards with red down arrows or green horizontal forward arrows indicating asset conditions and what the condition will be in years. This is done to create awareness of asset condition beyond just those that are very visible such as streets and sidewalks. Councilors hate to see the poor condition ratings of their assets and are therefore much more willing to pay attention to those assets that are not as visible. One-on-one meetings with Councilors Every year the Asset Manager meets with every councilor to review the latest three-year capital plan. The meetings are held to go over all assets including: Streets and sidewalks. Water, wastewater, and storm drain pipes. Parks and green lands. Public facilities including municipal buildings, arenas, clinics, etc. Transit system infrastructure. 8

9 Forestry, bridges, and culverts. Traffic signals. The purpose of the meetings is to ensure that all councilors understand the overall investment program, where funds are committed and why. The councilors also get to see what is planned in their wards and have the opportunity to comment on their priorities. Detailed city tours Once a year, the Asset Management team takes the Mayor and all City councilors on a joint tour of the city. The intent is to explain the investment plan while on the tour and to provide a visual back-up of the plan. The tour begins at City Hall, moving from neighborhood to neighborhood, going as far as their most remote communities. Providing visual proof and comparisons between neighborhoods and wards has resulted in reduced pushback by individual council members. Ward-by-ward breakdown of all proposed projects (mapped) While the education, one-on-one meetings, and tours greatly help in creating a bigpicture understanding for the Council member, they still rightfully remain advocates for their wards. To help ensure that some level of equity and visibility remains, the Asset Management team provides each councilor with maps of each ward to show work that has been done and work that is to be done in the future. This also serves as a tool to help the Council better understand future work. The result is the opportunity to match their wish list to project work planned by the City. e. Summary of Key Lessons and Experiences (Results and Findings) The need to develop a strong technical asset management program that optimizes asset life cycle is critical in the quest for sustainability. The City of Hamilton s in-depth Asset Management Program demonstrates the value of such a program. However, a strong program that is established within a volatile environment, such as city politics, will always remain vulnerable to the winds of political change. The City of Hamilton s unique approach to creating proactive buy-in from their Council members must not be underestimated in their success story. This approach should serve as a lesson and blueprint to all asset management teams that ultimately report to a political body. Too often City department managers place blame on the Council for poor funding decisions. The City of Hamilton model clearly demonstrates that the burden of proof rests squarely on that of the City department managers. The City of Hamilton s approach has demonstrated that most Council members, even those with limited understanding of City operations, will make the right decisions when armed with the education and understanding of a program. 9