Lana Foulds, Manager of Financial Planning. Single Source Procurement - Asset Management Plans

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1 CITY OF KINGSTON REPORT TO COUNCIL Report No.: TO: FROM: RESOURCE STAFF: Mayor and Members of Council Desiree Kennedy, City Treasurer Stephen Dickey, Deputy Treasurer Lana Foulds, Manager of Financial Planning DATE OF MEETING: SUBJECT: Single Source Procurement - Asset Management Plans EXECUTIVE SUMMARY: In order to qualify for any future capital funding from the province, municipalities are required to have corporate asset management plans in place by December 31, To assist in the consistent development of the plans, the Province has defined four major components to be addressed: state of local infrastructure, desired levels of service, asset management strategy and financing strategy. The City s tangible capital asset inventory is managed through a hosted database solution called CityWide Tangible Assets, which is owned and maintained by Public Sector Digest Inc. Public Sector Digest has developed compatible software, as well as a standard template and process for the development of the required asset management plans utilizing the asset information held by their clients in their capital asset inventory database for accounting and reporting purposes. CityWide Tangible Assets software is a widely used municipal asset inventory system in Ontario and Public Sector Digest is currently completing over 60 asset management plans for Ontario municipalities. In accordance with By-law , A By-Law to Establish Purchasing Policies and Procedures, Council approval is required to enter into a single source procurement contract that exceeds $50,000. This single source contract is being recommended in recognition of the benefits that Public Sector Digest offers in developing a corporate asset management plan, both from their knowledge of the City s capital asset base as well as the ability to leverage capital asset information that currently exists within the CityWide database. In addition, the ability to expand the use of CityWide software solutions will facilitate and enable the advancement of existing software for the next stage of asset management planning. Council Meeting

2 - Page 2 - The purpose of this report is to seek Council approval to enter into an agreement with Public Sector Digest Inc. to complete an asset management plan for the City of Kingston by December 31, The total quoted cost of services provided by Public Sector Digest Inc. is $125,000 (exclusive of applicable taxes and incidental expenses). RECOMMENDATION: THAT Council authorize the Mayor and Clerk to enter into an agreement with Public Sector Digest Inc., in a form satisfactory to the Director of Legal Services, to develop an asset management plan for the City of Kingston by December 31, Council Meeting

3 - Page 3 - AUTHORIZING SIGNATURES: Desiree Kennedy, City Treasurer Gerard Hunt, Chief Administrative Officer CONSULTATION WITH THE FOLLOWING COMMISSIONERS: Cynthia Beach, Sustainability & Growth N/R Lanie Hurdle, Community Services Denis Leger, Transportation, Properties & Emergency Services N/R Jim Keech, President and CEO, Utilities Kingston (N/R indicates consultation not required) Council Meeting

4 - Page 4 - OPTIONS/DISCUSSION: In 2012, the Province launched a Municipal Infrastructure Strategy. A cornerstone of this strategy was a new requirement for long-term asset management planning by municipalities. Municipalities seeking provincial capital funding will be required to submit a detailed asset management plan that demonstrates how its proposed project fits within the plan s priorities. The Province is requiring asset management plans to be completed by December 31, The Province has defined asset management as an integrated, lifecycle approach to effective stewardship of infrastructure assets to maximize benefits, manage risk and provide satisfactory levels of service to the public in a sustainable and environmentally responsible manner. Lifecycle costing looks at the total cost of an asset over its entire useful life, from construction to disposal, including operating costs. To assist with the development of plans, the Province released an asset management plan framework that sets out four major components to be addressed: state of local infrastructure, desired levels of service, asset management strategy and financing strategy. While no standard template or format is required, the plan needs to include major infrastructure assets; roads, bridges, water and wastewater systems as well as social housing portfolios. Asset management planning has been an ongoing initiative as directed in the City of Kingston Strategic Plan. The strategic priority to Maintain and Enhance Infrastructure addresses the need for long-term proactive asset management culture and plans and the City and Utilities Kingston continue to enhance and develop asset information and existing capital plans, capital funding and debt models, master plans and strategies as well as maintenance schedules which will all feed directly into a corporate asset management plan. The City s tangible capital asset inventories are maintained through a hosted database solution called CityWide Tangible Assets, which is owned and maintained by Public Sector Digest Inc. After a comprehensive review of available products, this software license was purchased from Public Sector Digest in 2008, in order to track capital asset inventories for purposes of reporting capital assets on the City s financial statements beginning in Several capital tangible asset software solutions were reviewed prior to selecting Public Sector Digest s CityWide database. A joint federal-provincial grant allowed for the purchase of the software and the purchase was reported to Council through Report # for purchases between $20,000 and $50,000. The development of corporate asset management plans is a logical next step in long-term asset planning. Because existing capital asset data within CityWide provides a comprehensive foundation for developing corporate asset management plans, Public Sector Digest has responded to the provincial requirements by developing an efficient process for the creation of these plans that leverages the information collected for accounting and reporting purposes within the CityWide database. This single source procurement award is being recommended recognizing the benefits of Public Sector Digest s existing knowledge of our capital asset inventories and the ability to leverage the information that exists within the CityWide database in creating a corporate asset management plan. CityWide is the City s only corporate database that tracks and values all of the corporate capital assets in one archival system, including the water and wastewater assets managed by Council Meeting

5 - Page 5 - Utilities Kingston. In addition, because CityWide software solutions have the ability to integrate with other city owned systems including GIS and Cartegraph, expanding the use of CityWide to address longer term asset planning opportunities will also facilitate and enable the advancement of existing software for the next stage of asset management planning. The primary objective of this contract is to develop an asset management plan that will address future provincial funding requirements; however, the plan will also provide a roadmap for continued efforts with respect to asset management. In that regard, Public Sector Digest, as part of this contract, will provide a summary of recommended next steps for the City as it continues to focus on the operations, maintenance and replacement activities of its capital infrastructure in an affordable, reliable, environmentally sustainable and integrated way. Public Sector Digest (PSD) is currently completing over 60 Ontario municipal asset management plans and will be in a position to provide valuable direction on best practice asset planning. The total quoted cost of services provided by Public Sector Digest Inc. to develop a corporate asset management plan is $125,000 plus applicable taxes and any incidental expenses for travel. In accordance with By-law , A By-Law to Establish Purchasing Policies and Procedures, Council approval is required to enter into a single source procurement contract that exceeds $50,000. EXISTING POLICY/BY LAW: By-Law , A By-Law to Establish Purchasing Policies and Procedures. NOTICE PROVISIONS: There are no notice provisions with this report. ACCESSIBILITY CONSIDERATIONS: This report may be available in alternative formats upon request. FINANCIAL CONSIDERATIONS: There are sufficient funds allocated in the 2013 capital budget for this expenditure. CONTACTS: Stephen Dickey, Deputy Treasurer Ext Lana Foulds, Manager of Financial Planning Ext OTHER CITY OF KINGSTON STAFF CONSULTED: Mark VanBuren, Director, Engineering John Piraino, Asset Management Coordinator, Engineering Sheldon Laidman, Director, Housing Holly Wilson, Manager, Intergovernmental Relations Randy Murphy, Chief Financial Officer, Utilities Kingston Jim Miller, Director, Engineering, Utilities Kingston EXHIBITS ATTACHED: There are no exhibits for this report. Council Meeting