NIAGARA REGION ASSET MANAGEMENT PLAN 2014

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1 2014 1

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3 EXECUTIVE SUMMARY The Regional Municipality of Niagara (the Region) delivers a variety of services that support public health and safety, protect the environment, and contribute to the economic prosperity and sustainability of Niagara. These services include providing high quality, reliable, sustainable and affordable transportation, drinking water, sewage treatment, waste management services and affordable housing to approximately 406,000 people and 157,000 business employees throughout Niagara. These core services help to make Niagara Region a desirable place for people to live, work, visit and invest. Fundamental to the provision of these services are the assets that support them. The Region has numerous processes that are used to plan, design, construct, maintain, renew and retire infrastructure. Once an asset s useful life has ended the process starts over again. The Public Works Department and Niagara Regional Housing (NRH) are together the stewards of approximately $6.5 billion of assets and account for 85% of the Region s ten year capital program. Management of this infrastructure is vital to ensure that the assets deliver the desired service to customers and address corporate objectives and strategies. Many of the Region s service levels are defined by legislation due to the highly regulatory nature of these services. Continued management of assets is also important in maintaining the Region s strong financial position. The Region currently maintains a rating of AA from Standard & Poor s (S&P) due to its effective reserve management, financing, and debt strategies. Quick Quote THE PUBLIC WORKS DEPARTMENT AND NIAGARA REGIONAL HOUSING (NRH) ARE TOGETHER THE STEWARDS OF APPROXIMATELY $6.5 BILLION OF ASSETS. To assist in meeting this challenge, and in keeping with industry best practices, the Region has compiled this Asset Management Plan (AMP). The intent of this AMP is to outline the measures that are currently in place that ensure that the Region has a sustainable way forward for its large asset base. Asset management is a systematic approach that combines financial, technical and environmental practice to: Promote lifecycle management of physical assets, including maintenance, upgrades, rehabilitation, replacement and operations Enhance system performance, maximize asset life and improve return on investment Manage risk Facilitate decision-making that prioritizes investments in order to sustain system infrastructure and meet the objectives of the organization and needs of stakeholders Asset management is a continuous process. This AMP represents the next step in the Region s evolving history of sound asset management practices, and will itself continue to be broadened and refined as part of future planning exercises. i

4 TABLE OF CONTENTS EXECUTIVE SUMMARY SECTION 1 INTRODUCTION i 1 SECTION 2 STATE OF LOCAL INFRASTRUCTURE 2.1 Water and Wastewater Transportation Waste Management Housing 20 SECTION 3 DESIRED LEVELS OF SERVICE 3.1 Water and Wastewater Transportation Waste Management Housing 29 SECTION 4 ASSET MANAGEMENT STRATEGY Corporate Overview IT Systems 33 Coordination with Others Water and Wastewater Transportation 37 Risk Assessment Waste Management Housing 41 SECTION 5 FINANCING STRATEGY Corporate Overview Water and Wastewater Transportation Waste Management Housing 48 ii

5 LIST OF FIGURES SECTION 1 INTRODUCTION Figure 1.1 Figure 1.2 Figure 1.3 SECTION 2 Public Works & NRH Regional Asset Map Act, Plan, Implement, Monitor Cycle Asset Management Plan Section Overview STATE OF LOCAL INFRASTRUCTURE Figure 2.1 Niagara Region Asset Conditions Figure 2.2 Method of Condition Assessment Figure 2.3 Water and Wastewater Facilities Figure 2.4 Water / Wastewater Assets Figure 2.5 Water & Wastewater Main Aging By Decade of Construction Figure 2.6 Water & Wastewater Main Network Age Distribution Figure 2.7 Water & Wastewater Plant Network Figure 2.8 Age Distribution Water / Wastewater Support Facility Network Age Distribution Figure Water & Wastewater Asset Conditions 8 Figure 2.13 Water / Wastewater Condition Assessment Programs 9 Figure 2.14 Transportation Network 10 Figure 2.15 Transportation Assets 11 Figure 2.16 Pavement Network Age Distribution 11 Figure 2.17 Transportation Structure Network Age Distribution 12 Figure 2.18 Transportation Other Infrastructure Network Age Distribution 12 Figure Transportation Asset Condition 13 Figure 2.23 Transportation Pavement Planning 14 Figure 2.24 Transportation Pavement Conditions Index (PCI) Per Year 15 Figure Bridges & Culverts 16 Figure 2.27 Transportation Operations Condition Assessment Frequency 17 Figure 2.28 Waste Management Facilities 18 Figure 2.29 Waste Management Assets 19 Figure 2.30 Waste Management Network Age Distribution 19 Figure 2.31 Housing Facilities 20 Figure 2.32 Housing Assets Figure 2.33 NRH Aging of Facilities Figure 2.34 NRH Building Network Aging Figure 2.35 Housing Asset Condition SECTION 3 DESIRED LEVELS OF SERVICE Figure 3.1 Figure 3.2 Figure 3.3 Figure 3.4 Figure 4.1 Figure 4.2 Figure 4.3 Figure 4.4 Figure 4.5 Figure 4.6 Figure 4.7 Figure 4.8 Figure 5.1 Figure 5.2 Figure 5.3 Figure 5.4 Figure 5.5 Linear Water & Wastewater Asset Breaks and Strikes Niagara Region Water Treatment kwh per ML Water Treated Annual PCI Index Comparison of Waiting List as of Sept. 30, 2013 and Current Stock SECTION 4 ASSET MANAGEMENT STRATEGY Asset Management & Annual Budget Process 32 Water / Wastewater Capital Validation Process 34 Water / Wastewater Capital Validation Process 35 Transportation Pavement Needs & Considerations 37 Pavement Life Extension Through Preventative Maintenance 38 Transportation Pavement Funding By PCI Level 40 Housing Asset Management Process 42 Housing Waiting List Vs. Population 43 SECTION 5 FINANCING STRATEGY 10 Year Capital Budget Request & Funding Water / Wastewater 10 Year Capital Budget By Funding Source Transportation 10 Year Capital Budget By Funding Source Waste Management 10 Year Capital Budget By Funding Source Housing 10 Year Capital Budget By Funding Source iii 5 i

6 SECTION 1 INTRODUCTION 6

7 1. INTRODUCTION Niagara is a culturally rich and historically significant region that offers its residents a mix of urban and rural living within 12 local municipalities. The Region boasts a diverse economy that includes manufacturing, tourism, agriculture and emerging sectors. Niagara Regional Council s Business Plan lays out 7 strategic themes that are supported by a series of specific actions aimed to advance the priorities of the current Council. Those priorities collectively aim to improve the quality of regional services and reduce operating costs at the same time through identifiable efficiencies; facilitate business growth in Niagara in order to improve our economy, reduce poverty and increase prosperity; and ensure the way Regional government carries out its governance obligations promotes effective decision making, inter-municipal communication and collaboration, including meaningful public engagement. CL THE 7 KEY THEMES ARE: Responsive Region Healthy Community Open For Business Environmentally Responsible Integrated Transportation System Governance Review Public Engagement and Communications Niagara Region s investment in public infrastructure contributes significantly to Council s economic growth and job creation goals. Investments in public infrastructure provide capacity to support business retention, expansion, and attraction across Niagara in existing urban areas, Economic Zones and Centres, and designated employment lands. The Region s Transportation network provides the foundation for future economic development by interlinking people, businesses, and products making them accessible to expanding marketing opportunities nearby. Figure 1.1 Asset Map-Public Works & Niagara Regional Housing W H WW OL CL H CL CL CL CL WW H HH H H HHH H H H CL W H WW H H W H H OL H H H CL WW H H WW W WW CL CL WW H WW HH RC H HH H H H H H B WW W WW WW CL W WW B MCR RC OL CL H W Provincial Highway Niagara Region Jurisdiction Roadway Water Treatment Plant Wastewater Treatment Plant Biosolids Processing Facility Recycling Centre Open Landfills Closed Landfills NRH Owned Community Housing Provider Community OL CL WW H H H H 1

8 The Asset Management Plan has been produced as a collaborative effort between Regional departments and Niagara Regional Housing. Asset Management has always been a guiding principle throughout Niagara Region. Niagara has developed a complete Tangible Capital Asset (TCA) Registry in order to comply with Public Sector Accounting Board (PSAB) requirements. This registry provides specific details on individual assets that are owned by the Region. In addition, individual departments and divisions have all historically had strategies in place to manage their assets. Figure 1.2 Act, Plan, Implement, Monitor Cycle ACT PLAN The purpose of Niagara Region s Asset Management Plan (AMP) is to lay the foundation for a comprehensive and integrated approach to planning going forward, and to fulfill Council s commitment to have an Asset Management Plan approved that satisfies Provincial requirements. The Province requires that at a minimum this AMP include roads, bridges, water and wastewater systems, and social housing. This Asset Management Plan is only the first step to Asset Management at Niagara Region. THE INFRASTRUCTURE INCLUDED IN THIS AMP INCLUDES: Water / Wastewater Transportation Waste Management Housing These 4 programs comprise approximately 85% of the Region s capital program. Asset Management is a process of continuous improvement based on the cycle of Plan, Implement, Monitor, and Act (Figure 1.2). Once the need for an asset is identified it is acquired and put into operation. That asset is continually monitored and actions are undertaken as required for that asset such as repair, rehabilitation, reconstruction or disposal. Those actions in turn affect the planning process of future assets, and the cycle is repeated. This is a long-term commitment and as such a phased approach has been utilized in developing this document. MONITOR IMPLEMENT This document follows the suggested Asset Management Plan Template provided by the Province of Ontario s Ministry of Infrastructure and is depicted in Figure 1.3. Figure 1.3 Asset Management Plan Section Overview SECTION State of Local Infrastructure Desired Levels of Service Asset Management Strategy Financing Strategy OVERVIEW Asset types, value, age, and condition Current levels of service, applicable legislation, service metrics Asset maintenance, renewal / rehabilitation, and replacement process Operating and capital expenditures and financing strategy Each of the above sections is further broken down by division in order to provide the specific details of how each of the divisions manages its assets to account for the unique traits of their operations, and to maximize service for Niagara residents. 2

9 SECTION 2 STATE OF THE INFRASTRUCTURE 3

10 2. STATE OF LOCAL INFRASTRUCTURE The State of Local Infrastructure section provides detailed information on the assets Niagara Region owns. This information includes the types of assets, value (both historic cost and replacement value), age, and condition. The following information on Regional infrastructure has been separated at a high level by program area; Water and Wastewater, Transportation, Waste Management, and Housing. Within each of these program areas infrastructure is further broken down as follows: WATER AND WASTEWATER Linear Assets (i.e. watermains, forcemains, and sewers) Plants Support Facilities (i.e. reservoirs, tanks, pump stations, etc.) TRANSPORTATION Paved Roadways Structures (i.e. bridges and major culverts) Other Assets (i.e. fleet, signals & illumination, patrol yards, guide rails, retaining walls, etc.) WASTE MANAGEMENT Recycling Facility Landfills HOUSING Apartments Houses Figure 2.1 is a summary of asset conditions at an aggregate level for the assets of the divisions above. Overall the majority of Niagara s assets are in good condition or better. Condition Excellent Good Fair Poor 8% 18% 17% 58% 0% 20% 40% 60% 80% 100% Percent Figure 2.2 shows the basis and methodology for the analytics used to create these dashboards. DIVISION & ASSET TYPES* Figure 2.1 Niagara Region Asset Conditions Figure 2.2 Method of Condition Assessment CONDITION ASSESSMENT ACTUAL EXTRAPOLATED AGE BASED ANALYSIS Water & Wastewater Linear Assets 23% 77% Plants 35% 65% Support Facilities 38% 62% Transportation Paved Roadways 100% Structures 100% Other Assets 100% Housing Apartments 100% Houses 100% * Does not include Waste Management 4

11 2.1 WATER AND WASTEWATER Niagara Region provides wholesale potable water and wastewater services to 11 area municipalities across the region through the operation and maintenance of water and wastewater treatment plants and transmission networks, as well as various support facilities such as pump stations, reservoirs, and elevated water tanks. In 2013, 80 billion litres of wastewater was treated, and 57 billion litres of potable water was produced KM 183 $3.8B Quick Facts Treatment Facilities of Mains and Sewers Support Facilities (Reservoirs, Tanks, Pump Stations, etc.) Replacement Value Figure 2.3 Water and Wastewater Facilities WW W Water Treatment Plant WW WW Wastewater Treatment Plant W WW WW W WW W WW WW W B WW WW W WW WW B Biosolids Processing Facility WW W 5

12 VALUE OF EXISTING ASSETS Figure 2.4 is a summary of the major assets in the Regional Water & Wastewater Network and the associated replacement value. Figure 2.4 Water / Wastewater Assets ITEM QUANTITY EXPECTED SERVICE LIFE (YEARS) HISTORICAL COST REPLACEMENT VALUE Watermains & Sewers 455 kms 60+ * $266M $1,235M Treatment Plants 17 treatments plants 60+ ** $562M $1,668M Support Facilities & Other 183 reservoirs, tanks, pump stations, etc. 30+ $165M $922M Total $993M $3,825M * Contingent upon pipe material ** Based on structural life. Supporting mechanical/electrical assets may have shorter life ASSET AGE DISTRIBUTION Figure 2.5 indicates that the majority of linear water and wastewater infrastructure in Niagara Region was built in the 1960 s and onward, with the largest decade of construction being the 1970 s. Much of this construction was driven by growth in the Region, Kilometres (KM) Prior/ Unknown thereby leading to the increased length and size of the network in order to service more areas. There was also an impact as the Region constructed systems to deal with combined sewer systems and to reinforce water system redundancy. Figure 2.6 shows how the increases per decade contribute overall as a percentage to the entire network. Figure 2.5 Water & Wastewater Main Aging By Decade of Construction 1910s 1920s 1930s 1940s 1950s 1960s 1970s 1980s 1990s 2000s 2010s Decade of Construction 6

13 Figure 2.6 Water & Wastewater Main Network Age Distribution 100% 90% 80% Km Cummulative % Kilometres (KM) % 60% 50% 40% 30% 20% 10% s & Earlier * 1910s 1920s 1930s 1940s 1950s 1960s 1970s 1980s 1990s 2000s 2010 Decade of Construction 0% Figures indicate the investment and expansion in water and wastewater treatment plants and support facilities. These types of assets continually require investment to address aging Annual Historical Cost % Incease 18% 16% 14% 12% 10% 8% 6% 4% 2% plant process infrastructure, technology upgrades and to meet increased levels of service (i.e. growth and legislation). Major peaks in the graph represent significant investments in plant capacity and compliance. Figure 2.7 Water & Wastewater Plant Network Age Distribution 0% 0% 1962 & Older Year of Construction 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Annual % Cummulative % 7

14 Figure 2.8 Water / Wastewater Support Facility Network Age Distribution Annual % Increase 16% 14% 12% 10% 8% 6% 4% 2% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Cumulative % of Network Annual % Addition to Network Cummulative % of Network 0% 0% 1962 & Older Year of Construction ASSET CONDITION The Water & Wastewater Division undertakes condition assessments of pipes and buildings such as sanitary sewers, treatment plants, and pump stations. Condition Condition Figure 2.9 Water & Wastewater (Total) Excellent Good Fair Poor Excellent Good Fair Poor 5% 8% 19% 68% 0% 20% 40% 60% 80% 100% Percent Figure 2.11 Plants 5% 7% 11% 77% 0% 20% 40% 60% 80% 100% Percent Figures show the current condition of the Region s Water and Wastewater assets. Figure 2.13 is a table of the annual condition assessment programs that are in place. Condition Condition Excellent Good Fair Poor Excellent Good Fair Poor 1% 0% Figure 2.10 Mains 42% 57% 0% 20% 40% 60% 80% 100% Percent Figure 2.12 Support 6% 6% 10% 78% 0% 20% 40% 60% 80% 100% Percent 8

15 Figure 2.13 Water / Wastewater Condition Assessment Programs ASSET TYPE METHOD OF ASSESSMENT FREQUENCY OF ASSESSMENT Sewers CCTV inspection Once every 3 years Watermains Soil sample and physical inspection of pipe exterior As required Elevated Pipe Crossings Condition Assessment Once every 2 years Roofs Condition Assessment 15 to 20 years Water Treatment Plants (Individual Assets) Condition Assessment Once every 20 years Wastewater Treatment Plants (Individual Assets) Condition Assessment Once every 20 years Water Treatment Plants (Process Performance) Facility Assessment 2 to 3 years prior to design work for plant upgrades Wastewater Treatment Plants (Process Performance) Facility Assessment 2 to 3 years prior to design work for plant upgrades Sanitary Pump Stations Condition Assessment Once every 20 years Water Booster Stations Condition Assessment Once every 20 years Elevated Storage Tanks Condition Assessment Once every 5 years Elevated Storage Tank Safety Equipment Inspection Annually 9

16 2.2 TRANSPORTATION Niagara Region s Transportation infrastructure consists of urban and rural road surfaces, bridges, culverts, traffic signals, and lighting. The Region s Transportation group also operates five patrol yards. The Transportation group manages all of these assets and is responsible for maintaining, rehabilitating, and replacing the assets as required. In addition, Niagara Region s Fleet Services are part of the Transportation division. 758 KM $1.6B Quick Facts of Regional Road Bridges Large Culverts Patrol Yards Replacement Value Figure 2.14 Transportation Network Provincial Highway Niagara Region Jurisdiction Roadway 10

17 VALUE OF EXISTING ASSETS Figure 2.15 is a summary of the major assets in the Regional Road Network and the associated replacement value. ASSET AGE DISTRIBUTION Figure 2.16 shows that the majority of Niagara Region s pavement network is from the 1990 s or newer. The annual spend on the pavement network is done with the focus of maintaining the Region s target Pavement Condition Index (PCI) level of 72. Figure 2.15 Transportation Assets ITEM QUANTITY EXPECTED SERVICE LIFE (YEARS) HISTORICAL COST REPLACEMENT VALUE Paved Roads 758 of centre line km 40 $538M $1,247M Structures (Bridges & Culverts) 128 bridges, 55 large culverts 75 $95M $221M Signals & Illumination 269 signals, 1019 luminaires 5 to 40 $36M $84M Other 5 patrol yards, guide rails, cross culverts, retaining walls 5 to 40 $21M $48M Annual % Increase Fleet 193 vehicles, 275 pieces of equipment 4 to 20 $17M $19M Total $707M $1,619M 30% 25% 20% 15% 10% 5% Figure 2.16 Pavement Network Age Distribution 0% 0% 1962 & Older Year of Construction 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Cumulative % of Network Annual % Addition to Network Cummulative % of Network 11

18 Structures such as bridges tend to have a longer lifecycle and the peaks in Figure 2.17 are due more to specific construction projects such as the Woodlawn Road Bridge in 1989 and 18-Mile Creek and 20-Mile Creek Bridges on North Service Road in Figure 2.17 Transportation Structure Network Age Distribution 20% 18% 16% 14% 100% 90% 80% 70% Annual % Addition to Network Cummulative % of Network Annual % Increase 12% 10% 8% 6% 4% 60% 50% 40% 30% 20% Annual % Increase 2% 0% 0% 1962 & Older Year of Construction 14% 12% 10% 8% 6% 4% 2% Figure 2.18 Transportation Other Infrastructure Network Age Distribution 0% 0% Year of Construction 10% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Annual % Addition to Network Cummulative % of Network 12

19 ASSET CONDITION Figure 2.19 Transportation (Total) Figure 2.20 Pavement Excellent 19% Excellent 21% Condition Good Fair Poor 12% 29% 39% Condition Good Fair Poor 13% 29% 37% 0% 20% 40% 60% 80% 100% Percent 0% 20% 40% 60% 80% 100% Percent Figure 2.21 Structures Figure 2.22 Other Excellent 4% Excellent 28% Condition Good Fair 38% 50% Condition Good Fair 21% 37% Poor 9% 0% 20% 40% 60% 80% 100% Percent Poor 13% 0% 20% 40% 60% 80% 100% Percent 13

20 PAVEMENT The Region completes an annual monitoring program to assess the current condition of the Regional road network and develop a priority listing of roadways that are candidates for maintenance and rehabilitation treatments. The monitoring program is consistent with the Ontario Ministry of Transportation Pavement Condition Rating Guidelines for Municipalities and procedures recommended by the Ontario Good Roads Association. The Region adopted the Ontario Ministry of Transportation Pavement Condition Rating Guidelines for Municipalities and recommendations of the Ontario Good Roads Association in order to consolidate the pavement management system (PMS) data and encourage consistency and comparison of PMS data with other municipalities. Figure 2.23 Transportation Pavement Planning 1. Level of Service 2. Pavement Inventory Condition Assessment Performance Predictions 3. Identification of Needs Multi Year Planning Short-term Planning Each year, pavement condition inspections are completed for one third of the Regional road network. Historical condition inspection ratings are used in the PMS to develop performance prediction models for the deterioration of the pavements. Condition ratings for sections that are not inspected in a particular year are developed from the last available rating and prediction models to estimate the current condition rating for all sections in the Regional pavement database each year. The deterioration models are used in conjunction with the pavement section construction history to determine when the pavements will reach a critical condition rating that would trigger maintenance, rehabilitation or reconstruction action. Niagara Region s current Pavement Condition Index (PCI) is 72. The overall distribution of Pavement Conditions for the Regional Road Network is shown in Figure Prioritization 5. Budgeting 6. Project Implementation 7. Performance Monitoring Specific Treatment Entire Network Network Level: Selecting the right section at the right time Project Level: Designing and Implementing the right treatment 14

21 Figure 2.24 Transportation Pavement Conditions Index (PCI) Per Year Pavement Condition Index Excellent Good Fair 10 Poor Year STRUCTURES The method of condition assessment is as per the Ontario Structure Inspection Manual (OSIM). The frequency of assessments is every two years. The structure conditions are determined as per the OSIM and the following guidelines: Very Good Overall the components of the structure are in very good condition. Generally the structure has been constructed within the last 10 years and does not require any work within the next 10 years. Bridge Condition Index (BCI) Range 80 to 100. Good Overall the components of the structure are in good condition. Generally the structure is adequate or requires only minor maintenance within the next 10 years. BCI Range 70 to 80. Fair Overall the components of the structure are in fair condition. Generally the structure requires major rehab or replacement within the next 10 years, or requires Deck Condition Surveys (DCS), Load Capacity Evaluation (LCE) or Rehabilitation / Replacement Analysis (RRA). BCI Range 60 to 70. Poor Overall the components of the structure are in poor condition. Generally the structure requires replacement within the next 5 years. BCI less than 60. The most recent bridge and culvert inspections conducted by Ellis Engineering Inc. are shown in Figures 2.25 and

22 PRIORITY RATING Figure 2.25 Bridges General Overall Condition EXCELLENT GOOD FAIR POOR TOTAL ADEQUATE 4% 27% 0% 0% 31% 6-10 YEARS 0% 1% 11% 0% 12% 1-5 YEARS 0% 5% 22% 7% 33% NOW 0% 15% 7% 2% 23% TOTAL 4% 48% 40% 9% 100% Figure 2.26 Culvert General Overall Condition PRIORITY RATING EXCELLENT GOOD FAIR POOR TOTAL ADEQUATE 0% 56% 0% 0% 56% 6-10 YEARS 0% 0% 2% 0% 2% 1-5 YEARS 0% 2% 9% 7% 18% NOW 0% 25% 0% 0% 25% TOTAL 0% 82% 11% 7% 100% 16

23 TRANSPORTATION OPERATIONS Condition assessments have been performed for the vast majority of Transportation Operations assets. Most of these assets are tracked in the Region s ArcGIS mapping application as part of the Cityworks CMMS database. Figure 2.27 provides an overview on the frequency of assessments. FLEET The conditions of vehicles and equipment are assessed twice a year as part of Niagara Region s Phase 1 and Phase 2 Replacement Schedule Reports. Units are assessed based on mileage, maintenance / repair costs, condition, and necessity. Figure 2.27 Transportation Operations Condition Assessment Frequency ASSET TYPE Traffic Signals CA FREQUENCY Bi-annual Traffic Signs (Specified Regulatory Signs) Weekly / Bi-Weekly Interval Traffic Signs (Other) As Needed Illumination Bi-annual Minor Cross Culverts & Entrance Culverts As Needed Storm Water Systems Retaining Walls (> 1.2 metres high) Traffic Safety Devices (Post and Cable, Guiderails, Barrier Walls, Retaining Walls < 1.2 metres high) Road Operations Equipment (RWIS Sites, Brine Plants) Fleet As Needed Bi-annual (as part of the Structures Program) As Needed As Needed Bi-annual 17

24 2.3 WASTE MANAGEMENT Waste Management is responsible for the planning, management and operations of waste management facilities, programs and services throughout the Region, including: Operating and maintaining two Regional landfills, a Recycling Centre, a Municipal Hazardous Waste (MHSW) facility, Municipal Hazardous and Special Waste events, four Residential Waste and Recycling Drop-off depots, and special diversion events Providing residential and commercial curbside, waste, recycling and organics collection programs Perpetual care of 12 closed landfills K Quick Facts 2 12 Closed Landfills Operating Landfills (perpetual care) Drop off Depots Recycling Centre MHSW Facility Tonnes Material Managed (2012) Figure 2.28 Waste Management Facilities CL OL CL CL CL CL CL OL CL CL CL CL RC CL OL CL RC OL CL Recycling Centre Open Landfills Closed Landfills 18

25 VALUE OF EXISTING ASSETS The most current study done on the replacement value of Waste Management Assets was conducted on behalf of Niagara Region by Stantec in Replacement cost methodology for the landfills has been amended (5 open and 9 closed vs. 2 open and 12 closed). Figure 2.29 provides a cost overview of waste management assets. ASSET CONDITION In the 2007 Stantec Report conditions were graded in a report card format with an overall B grade for the Recycling Centre and C grade for landfills. Other methodologies for approximating conditions (example - age based) were not considered accurate due to the unique nature of waste management assets, specifically landfills. The Waste Management Division will be engaging an external party to provide updated data. Figure 2.29 Waste Management Assets ITEM QUANTITY EXPECTED SERVICE LIFE (YEARS) HISTORICAL COST REPLACEMENT VALUE Recycling Centre $26M $30M Landfills (open & closed) $44M $260M Annual % Increase Total $70M $290M 30% 25% 20% 15% 10% 5% Figure 2.30 Waste Management Network Age Distribution 0% Year of Construction 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Annual % Addition to Network Cummulative % of Network 19

26 2.4 HOUSING Niagara Region has designated Niagara Regional Housing (NRH) as the Administrator of social housing. NRH is accountable for the ownership and management of the former public housing portfolio of 2,636 units and, although not part of this plan, NRH has legislative oversight of an additional 4,000 units owned by non-profit and co-operative housing providers. This housing provider portfolio is facing the same challenges as the NRH units in terms of an aging infrastructure. Quick Facts 2,636 4,000+ Units Owned and Managed by NRH Non-Profit and Co-operative Housing Providers Figure 2.31 Housing Facilities H H NRH Owned Community Housing Provider Community H H H HH H H HHH H H H H H H H H H H H H H HH H HH H H H H H H H H H 20

27 VALUE OF EXISTING ASSETS Building value assessments were completed in 2012 for over half of the portfolio. The balance, which had previously been assessed during the previous Building Condition Assessment (BCA) exercise, had the methodology confirmed for consistency. Total replacement cost of the portfolio is $363.9 million. Figure 2.32 is a summary of the assets and the associated replacement value. Figure 2.32 Housing Assets ITEM QUANTITY EXPECTED SERVICE LIFE (YEARS) HISTORICAL COST REPLACEMENT VALUE Apartments 36 buildings, 1782 units 70+ $77M $195M Houses 306 buildings, 854 units 65+ $77M $169M Total $153M $364M ASSET AGE DISTRIBUTION The NRH portfolio consists of older units with the majority ranging in age from 31 to 61 years. Just over half of the current stock (55%) was built over 40 years ago, having been constructed between 1952 and These units were fairly evenly distributed between apartments and houses. From 1974 onwards the majority of units that were constructed were apartment buildings for seniors, with very little development of family houses. See figures 2.33 and 2.34 for a full breakdown of the age of NRH assets. 21

28 # of Housing Units Figure 2.33 NRH Aging of Assets Year of Construction Apartment Units Houses Figure 2.34 NRH Building Network Aging # of Housing Units % 90% % % 60% % 40% % % 10% 0 0% Year of Construction Units Age Distribution 22

29 ASSET CONDITION Third-party Building Condition Assessments (BCA) are completed generally every five to seven years. The last round, completed in 2012, provided the basis for the 10 year capital program. Annual inspections of both buildings and units ensure that the information is kept current. This approach, combined with the preventative maintenance program which prolongs the life of the assets, ensures that the buildings are kept in the best condition possible. Condition Figure 2.36 Apartments Excellent 0% Good 94% Fair 6% Poor 0% 0% 20% 40% 60% 80% 100% Percent Figure 2.35 Housing (Total) Figure 2.37 Houses Excellent 0% Excellent 0% Condition Good Fair 9% 88% Condition Good Fair 13% 82% Poor 2% Poor 5% 0% 20% 40% 60% 80% 100% Percent 0% 20% 40% 60% 80% 100% Percent 23

30 SECTION 3 DESIRED LEVELS OF SERVICE 24

31 3. DESIRED LEVELS OF SERVICE Legislative requirements contribute significantly to defining service level standards for several Regionally delivered services. Council approved policy and direction also determine program standards and requirements. Assets are tools used to provide these services to the residents, businesses, and visitors of Niagara Region, and therefore Asset Management is essential to adequate service delivery while maintaining affordability. 3.1 WATER AND WASTEWATER Quick Facts SERVICE LEVELS IN NIAGARA REGION ARE HEAVILY LEGISLATED THEREFORE COMPLIANCE IS THE PRIMARY DRIVER. The Region s Computerized Maintenance Management System (CMMS) tracks break and strike statistics. Figure 3.1 provides a summary of linear asset breaks and strikes for the last three years. Niagara Region s target level of service for water and wastewater services is to provide reliable and economical services 24 hours a day with no interruptions, while complying with existing and future Provincial and Federal legislations. Niagara s water and wastewater service is a two-tier system with the Region providing supply of water and treatment of all wastewater for 11 of its 12 local area municipalities. Desired targets will continue to focus on minimum disruption to service, environmental protection, healthy communities, and focus on customer satisfaction. Major processes at water and wastewater plants have built-in redundancies for failure protection and to support maintenance work. In addition Niagara Region continues to make security of supply improvements throughout its water system network. Several of Niagara s water systems also have reservoirs and elevated storage tanks to supply water in cases of emergency and peak demands. In the rare cases where system outages happen, the following are the minimum times for repairing water and wastewater pipe systems: Normal watermain breaks: 4 to 8 hours Normal forcemain breaks: 24 hours Normal gravity sewer breaks: 12 hours As mentioned above, these outages and failures are rare. On average Niagara Region experiences less than 2 failures / 100 km per year in transmission mains and forcemains. Events Figure 3.1 Linear Water & Wastewater Asset Breaks and Strikes Year LEGISLATION Niagara s water and wastewater service levels are based on several Legislative Acts and associated Regulations including: Safe Drinking Water Act (SDWA) Environmental Protection Act (EPA) Ontario Water Resource Act (OWRA) Clean Water Act (CWA) Water Opportunities Act Nutrient Management Act (NMA) Fisheries Act Breaks Strikes Niagara Region is also required to operate in accordance with future Federal regulations such as the pending limits within the Federal Wastewater System Effluent Regulations (WSER). 25

32 BEST PRACTICES Niagara Region uses best practices in the water and wastewater industry. For example, the Ontario Ministry of Environment s best practice for Minimum Water System PSI requires that water flow remain above 20 psi in the system during max day demand (usually in the summer) and meets fire flow needs. On average, across the entire regional water system, pressure is above 85 psi. Staff remains up to date with benchmarking literature to continuously improve the benchmarking program. Key performance indicators (KPIs) used in this reporting have been selected to highlight areas where improvement may be achievable through process optimization, changes in operating procedure, or through development or change of philosophy. KPIs used include: Operating cost per Megaliter (ML) treated Operating cost by area of expenditure Gross expenditures per ML treated Kilowatt hours (kwh) per ML treated Utilization of Plant Capacity Figure 3.2 provides an example of some of the benchmarking data; in this case kwh per ML treated at Niagara s water treatment plants. Figure 3.2 Niagara Region Water Treatment kwh per ML Water Treated kwh per ML Treated Port Colborne Grimsby Rosehill Welland Niagara Falls DeCew Falls Water Treatment Plant

33 3.2 TRANSPORTATION Transportation options, routes and infrastructure influence everyday activities for residents, employers and visitors in Niagara Region. Through the Transportation Master Planning process the Region has identified the following key themes: Figure 3.3 Annual PCI Index YEAR AVERAGE NETWORK PCI Transportation infrastructure influences people s feelings about where they live, work and play Transportation infrastructure influences employment, the economy and goods movement Transportation influences tourism Transportation needs to be accessible to all These key themes are integral to providing the proper level of service for the Region s Transportation department. PAVEMENT Niagara Region s target pavement condition index (PCI) has been established at a value of between 72 and 75 based on the professional opinion of staff and input from external consultants. Niagara Region s average condition rating for the past three years has remained within its targeted range at a level of 72, as shown in Figure 3.3 Work to be carried out for all pavements qualified for resurfacing is undertaken when a critical pavement condition index (PCI) level of 60 out of 100 is reached. Similarly, construction work for roads qualifying for reconstruction would be undertaken once a minimum PCI of 45 is reached. STRUCTURES The minimum requirements are to meet geometric standards that are in accordance with Regional and Provincial Standards, having an acceptable riding surface, and being able to carry full Highway Traffic Act loading. The desired targets are to have all structures in good condition with no load limit postings. The current plan to assess service levels is completed by carrying out biennial (every two years) OSIM inspections under the guidance of a Professional Engineer. Service levels are based on Niagara Region Standards, Ontario Regulation 472/10 (Amending 104/97), and the Highway Traffic Act

34 SIGNALS & ILLUMINATION Minimum services levels for traffic signals and illumination are met as defined in Regulation 269 (Minimum Maintenance Standards for Municipal Highways) of the Ontario Municipal Act. BEST PRACTICES The Region developed the Design and Operation of Traffic Signals Standards and Specifications manual in 2000 and later updated this document in Its purpose was to ensure that all new, modified, and upgraded traffic signal installations are designed and operated in a consistent and uniform manner. This type of standardization helps in reducing inventory, reduces staff training needs, and results in lower overall costs. calculation methodology) compared to 42% in This has been partially accomplished through the implementation of services and associated policies that increase diversion, through enhanced programs and behavioural change incentives such as reward programs. The operation and maintenance of landfill sites is guided by legislation from the Ontario Ministry of the Environment (MOE) through the issuance of Environmental Compliance Approvals (ECA), issued either under the Environmental Protection Act or the Ontario Water Resources Act. New infrastructure requires an ECA which details the design of that infrastructure, as well as a prescribed maintenance frequency. FLEET The goal of Niagara Region s Fleet Services group is to provide and maintain a highly functional and efficient regional fleet of vehicles and equipment in the most economical manner practical. BEST PRACTICES In order to achieve Niagara Region s Fleet Services goal a comprehensive policy manual was developed in 2009 (PW5.F01.0 Vehicle and Equipment Policy). This policy outlines in detail the Region s vehicle and equipment guidelines with respect to acquisition, provision, maintenance, disposal, assignment, and identification. 3.3 WASTE MANAGEMENT The Waste Management program is responsible for the planning, management and operations of waste management facilities, programs, and services throughout the Region. One of the goals of the Waste Management division is to coordinate and provide for the collection and disposal of residential garbage and recycling materials while maintaining a consistent level of service to all 12 Niagara municipalities. Further to this, Niagara has been working towards higher diversion rates for residential waste with a target rate of 65% by Niagara s diversion rate has increased to 52% (based on 2011 rate Every year, Niagara Region, along with other municipalities, is required to submit a blue box datacall to Waste Diversion Ontario (WDO) in order to receive industry funding. As part of the WDO data call, Niagara Region submits information about the residential blue box program, which includes: Tonnes of blue box materials collected and recycled including the revenue received Operating and capital costs associated with the collection, processing and transfer of blue box materials Niagara has received the 3rd highest funding payment in the comparator group (municipalities with populations greater than 250,000) as a percentage of net costs in 2013, and 10th highest in Ontario. Niagara has held this ranking for the last few years, which demonstrates that the Region s blue box program is cost effective, efficient and is performing well. LEGISLATION Niagara s Waste Management division is governed by several Legislative Acts and associated Regulations including: Environmental Protection Act (EPA) Ontario Water Resource Act (OWRA) Niagara Escarpment Planning and Development Act Waste Diversion Act Environmental Assessment Act (EAA) 28

35 As a result of being subject to these acts, there are numerous regulations and many ECAs (as noted above) that govern operations and maintenance of Waste Management facilities. WASTE DIVERSION AND RECYCLING BEST PRACTICES The following is a list of practices that have been implemented by Waste Management in the area of waste diversion and recycling in order to extend the life of existing landfill sites: Developed and implemented an up-to-date plan for recycling as part of a Waste Diversion System Established performance measures, including diversion targets (i.e. 55% by 2016 and 65% by 2020), monitoring and a continuous improvement program Multi-municipal planning approach to collection and processing of recyclables Optimization of collections and processing operations following generally accepted principles Training of key program staff Appropriately planned, designed, and funded Promotion and Education program Established and enforced policies that induce waste diversion (i.e. Waste Management By-Law) WASTE DISPOSAL AND OPERATIONS AND ENGINEERING BEST PRACTICES The Region has developed Operations and Maintenance Manuals and/or Closure Plans for each landfill site. Each of these documents is site specific and is tied to ECAs and MOE waste management regulations. Waste management maintains complex site specific infrastructure in accordance with the above noted documents. 3.4 HOUSING NRH is responsible for ensuring that residential units are maintained to a standard that meets legislative requirements and provides residents with a healthy community environment. All requests for repairs and customer complaints are responded to within 24 hours. Completion of repairs is dependent on contractor availability; however emergency repairs are addressed immediately. LEGISLATION The provincial Housing Services Act sets minimum service levels expressed as units in legislation. There is a requirement that the number of units transferred in 2001 from the province be maintained indefinitely. Any units that are disposed of via sale or demolition must be replaced. It is a further legislative requirement that the portfolio be well managed, maintained in a satisfactory state of repair, and be fit for occupancy. NRH is guided by Provincial and local building codes and must be able to meet requirements set out for fire safety and accessibility. As a landlord NRH must also adhere to standards and procedures set out in the Residential Tenancies Act. BEST PRACTICES In order to meet the legislated levels of service NRH established the Preventative Maintenance Program. As part of this program detailed building profiles are maintained with an inventory of building components and their condition. This inventory is updated regularly and supports day to day and preventative maintenance and capital decisions. Quick Quote NRH IS RESPONSIBLE FOR ENSURING THAT RESIDENTIAL UNITS ARE MAINTAINED TO A STANDARD THAT MEETS LEGISLATIVE REQUIREMENTS AND PROVIDES RESIDENTS WITH A HEALTHY COMMUNITY ENVIRONMENT. 29

36 COMMUNITY NEEDS While NRH is meeting the needs of tenants, the current availability of affordable housing stock is not meeting the needs of Niagara as a whole. Over 6,200 households (11,473 people) are currently waiting for affordable housing. With an average turnover rate of 764 units per year and new applications of 2,548 per year, NRH has fallen behind in its ability to meet the increasing need. Creation of new affordable housing is required to address this need. Figure 3.4 shows the waiting list, as of September 30, 2013, broken down by household type. This chart compares this need to the number of households on the affordable housing waiting list. The type of current stock does not fit the demand expressed by the waiting list. Figure 3.4 Comparison of Waiting List as of September 30, 2013 and Current Stock WAITING LIST # AND % SENIORS SINGLES & COUPLES FAMILIES TOTAL # 2,301 1,842 2,106 6,249 % 36.8% 29.5% 33.7% 100% STOCK # 3, ,414 7,302 % 41.7% 11.5% 46.8% 100% 30

37 SECTION 4 ASSET MANAGEMENT STRATEGY 31

38 4. ASSET MANAGEMENT STRATEGY CORPORATE OVERVIEW Asset Management is a systematic approach that combines financial, technical and environmental practice to: Promote lifecycle management of physical assets, including maintenance, upgrades, rehabilitation, replacement and operations Enhance system performance, maximize asset life and improve return on investment Manage risk Facilitate decision-making that prioritizes investments in order to sustain system infrastructure and meet the objectives of the organization and needs of stakeholders Quick Quote THE COUNCIL BUSINESS PLAN, POLICY DOCUMENTS, CONDITION ASSESSMENTS, AND SERVICE LEVELS SERVE AS THE FOUNDATION OF CAPITAL BUDGETING AT NIAGARA REGION. The Council Business Plan, policy documents such as the Master Plans for Transportation and the Water & Wastewater divisions, and the condition assessments and service levels discussed in previous sections, serve as the foundation of capital budgeting at Niagara Region. These policy documents are developed collaboratively between Regional staff and experts from external sources and are then brought before the appropriate standing committee for approval. Once approved and adopted by Council, the details from these documents are incorporated into the Region s annual budget process. NRH follows a similar process, with all documents going through the NRH Board. Figure 4.1 Asset Management & Annual Budget Process 32

39 Project-specific details are required for any capital project seeking approval for the current year. These details include a project description, the need that will be addressed by the project, the justification for the timing of the project, the risk or impact of delaying the project, and the rationale driving the project as defined by the Region s Capital Filters. All capital projects at Niagara Region are assigned one or more Capital Filters that attribute the benefit of the work to; Compliance, Enhancement, Growth, Risk, Sustainability. These capital filters help to prioritize capital requests through each Capital Budget Cycle. The filters are applied as percentages, and the total of the filters for each project must equal 100% (for example, 20% compliance, 20% risk, and 60% sustainability). Generally speaking the highest priority is given to projects within the Compliance, Sustainability and Risk Filters, and the lowest priority is given to projects in the Enhancement and Growth Filters. The following are high level definitions of the five Capital Filters. Yardi to manage day to day maintenance transactions. Geographic Information Systems (GIS) are also widely used to manage the Region s infrastructure. Other systems include a Pavement Asset Manager (PAM), Sewer Management System, and a financial system (SmartStream). Several internal tools have been developed on an as needed basis such as an extract tool to SharePoint developed by the water and wastewater area that summarizes multiple pieces of information regarding water and wastewater assets when needed such as during the budget process. It should also be noted that Niagara Region is engaged in a process to obtain a new Enterprise Resource Planning (ERP) system. This is an extensive Region wide implementation with input being received from all departments. The new ERP will replace and/ or integrate existing systems.this will allow the organization to make better informed decisions in a number of areas, including asset management. COORDINATION WITH OTHERS COMPLIANCE mandatory regulatory requirements ENHANCEMENT discretionary current system improvements and joint & partnership projects GROWTH physical extensions servicing new growth RISK mitigation to ensure business continuance and address loss of service impact SUSTAINABILITY investment to sustain existing assets at current levels The use of the filters provides a means of assessing all capital project requests on a more level platform, although it should be noted that it is not a finite measurement. IT SYSTEMS Niagara Region uses and relies on numerous computer systems to aid in the asset management process. Computerized Maintenance Management Systems (CMMS) are utilized by Water and Wastewater, Transportation and Fleet. NRH uses Total Capital Planning Solution (TCPS) for capital forecasting and Niagara Region works closely with its 12 local area municipalities, the province, ultility companies, and private industries to coordinate asset delivery. This includes joint planning and alignment of timing for several programs and capital projects such as: Joint purchasing / contract delivery is used for capital projects where Regional, local, and other work can be undertaken together Joint program delivery between the Region and local area municipalities is used for programs such as snow clearing and traffic signal maintenance Alternative Service Delivery Funding partnerships with the local municipalities through grants such as the Combined Sewer Overflow (CSO) program, and with upper levels of government through various programs This coordination helps to maximize cost effectiveness and achieve economies of scale, while also minimizing the disruption in service to residents. 33

40 4.1 WATER AND WASTEWATER The asset management strategy for water and wastewater infrastructure is driven by condition assessment data. This assessment data is stored in the division s data warehouse along with other relevant asset information. The information is used to plan the maintenance and capital programs. Requests for Condition Assessments are identified during the annual Capital Validation process. This process supports the 10 Year Capital Forecast but also provides a broad range of information which has other uses such as requests for condition assessments to confirm the condition of plants or pump stations. Plant and station condition assessments are done every 20 years on average. Condition assessment work is also done in advance of plant or station upgrades. PROJECT PRIORITIZATION The Division prioritizes projects by using a collaborative and multi-stepped approach. This approach engages staff from all levels within the Division and uses data from a number of different sources. CAPITAL VALIDATION PROCESS Capital Validation meetings take place annually to review the needs for plants, stations and pipes. The process is comprised of a series of meetings with each Operational Area to review the condition, performance, risk, timing and related concerns that staff have for their respective facilities and pipe networks. The meetings have representation from each of the Division s teams (Operations, Maintenance, and Engineering) including staff which deal daily with operating and maintaining the systems. Staff provides operational knowledge and information from condition assessments, maintenance history records and plant performance to support the need for a capital project. During the meetings staff share information about the current condition of an asset, including what can go wrong with it and associated processes if there is a failure. A risk score indicating the likelihood and severity of failure is agreed upon. This score is used to identify assets and process trains that need to be looked at further. In addition, Operations Process staff is asked for input regarding the performance of the process. This ensures that not only the physical asset condition is reviewed but also that the entire asset train is functioning properly. Maintenance items are also discussed and documented. Each plant process is divided into seven different categories and assigned a condition grade from 1 (good condition) to 5 (replacement required). Prioritization for the work is discussed and is categorized as either immediate to 1 year, Figure 4.2 Water / Wastewater Capital Validation Process 34

41 1 to 5 years, 5 to 10 years or 10+ years. Assets needing capital investment are agreed to and an internal request is completed by the plant manager. The internal request reports provide a general description of the proposed work, justification, detailed information, and consequence of delay. Project prioritization is reviewed again based on additional supporting information such as condition assessments. Requests are then prepared for inclusion into the draft capital forecast, which then follows the divisional and corporate budget approval process. GROWTH Growth from residential, industrial, commercial and institutional development continues to require expansion of water and wastewater services. To meet these demands the Division has Master Servicing Plan (MSP) studies done to determine where and when infrastructure services need to be expanded. The results from the study are used to prioritize capital projects so that the new infrastructure is ready to meet the growth demands. This information is included in the draft capital forecast. LEGISLATIVE AND REGULATION REQUIREMENTS Legislative and regulation requirements change over time. Regional Quality & Compliance managers are informed of pending standards that will need to be met and a review of the impacts to the Region s services is done. Where compliance will affect systems, improvement work is prioritized and included in the draft capital forecast with the goal of having the Region fully prepared to meet the new legislative and regulation requirements. MAINTAIN, REPAIR AND REPLACEMENT Central Maintenance staff support both Water and Wastewater Operations needs. Maintenance staff is responsible for all treatment plants, support facilities and linear systems. The maintenance program consists of planned and unplanned maintenance, and repair and replacement of infrastructure assets. To effectively manage maintenance needs, repair and replacements costs are compared. Figure 4.3 Water / Wastewater Capital Validation Process 35

42 Repair an asset is repaired when the cost is below 60% of the replacement cost Replacement an asset is replaced when the cost to repair is 60% or more of the replacement cost When information shows that the infrastructure has exceeded its life expectancy and cannot be economically rehabilitated because of additional costs needed to meet current building, electrical or mechanical codes, disposal occurs. Other factors are also considered when making a decision such as energy improvements, lower maintenance costs with new equipment, technical advancements and obsolescence. Run to failure is also considered depending on the type of asset and the process involved. If components are low cost, readily available, easy to swap out and there is redundancy in the process then repair may not be considered. Where the estimated costs for replacement are above Tangible Capital Assest (TCA) thresholds the need for the work is documented in a Project Initiation Request and becomes part of the capital forecast process. If the need is deemed as an emergency then a request for emergency funding is made. REHABILITATION When an asset or group of assets, such as a pump station, has been identified at risk due to age, maintenance demands, or poor performance a review of the infrastructure takes place. A condition assessment and performance review is done to confirm the status of the asset. Recommendations from the reviews may lead to a Like for Like rehabilitation if there are no development demands or a capacity increase where additional growth is occurring. Examples of this are pump stations where multiple assets at the station have reached their service life, or a trunk sewer that has been damaged by corrosion. DISPOSAL Disposal of infrastructure occurs when it cannot be modified to meet new demands, the useful life has been reached, or it is no longer needed. To confirm that a facility is not meeting its intended purpose results from the Master Servicing Plan (MSP) and condition assessments are used. The land where the asset is located becomes available to construct a new facility, or after site remediation, is prepared for sale. EXPANSION OF EXISTING ASSETS Expansion of infrastructure is driven by following recommendations from the Master Servicing Plan (MSP). The MSP, which is updated every five years, determines the growth required from existing infrastructure in twenty years time. To do this the MSP uses Provincial growth projections, Regional and local planning data, historical building construction rates and current infrastructure capacities. To calculate the impacts from either future growth or decline in demands, hydraulic models (water and wastewater) are used extensively. The MSP report makes the business case for the need, timing and cost of the infrastructure to support both Provincial and Regional growth plans. Also it addresses compliance issues related to current/pending regulations and deals with risk. Quick Quote OTHER FACTORS ARE ALSO CONSIDERED WHEN MAKING A DECISION SUCH AS ENERGY IMPROVEMENTS, LOWER MAINTENANCE COSTS WITH NEW EQUIPMENT, TECHNICAL ADVANCEMENTS AND OBSOLESCENCE. 36

43 4.2 TRANSPORTATION PROJECT PRIORITIZATION The Region uses the following criteria to prioritize the 10 Year Transportation Capital Program: Pavement & Bridge Condition Ratings Condition of Underground Assets: watermains, sanitary and storm sewers, etc. Right-of-way Management Partnerships and/or Commitments with other agencies: LAM, MTO, etc. Transportation Strategy: Masterplans, etc. Capacity Deficiencies: Existing and future volume/capacity Geometric and Structural Deficiencies Potential for Safety Improvements Overall Community / Network Benefit (Arterial Connectivity, Centres & Corridors) Development / Growth These criteria are applied to the projects and the 10 Year Capital Program is developed by senior staff and technical specialists from Transportation Services. The projects are then reviewed further for each road section and bridge structure based on experience and knowledge of local challenges, in order to adjust the timing of the projects. Needs Pavement Preservation Needs Prioritized preservation needs Mandatory projects Other Roadway Needs Culverts, bridges, sidewalks Operation improvements Safety improvements Projects can take multiple years from the start of the planning process to detailed design, though implementation and completion of the project. Each project is necessary to support the long-term Transportation Strategy. Staff also reviews and identifies projects and opportunities to implement smaller scale projects in order to address the short term needs. The above criteria are used as the framework to allocate funds to the highest priority projects given the available funding. Some projects may be deferred due to the need to fund projects with more immediate impacts, in order to ensure that resources are allocated to where they are needed most. PAVEMENT Pavement prediction models and costs vary by pavement surface type, (i.e. concrete, hot mix asphalt, or surface treatment) and also by classification, ( i.e. urban, rural or semi-urban). There are also other checks and balances used that will not qualify a section for rehabilitation or reconstruction unless it has reached a certain age, (i.e. has not been resurfaced in the past few years and is then qualified for resurfacing again), it would not be efficient to spend money on a pavement which had deteriorated rapidly. The models are updated annually based on the pavement condition inspections. These performance models are used to Figure 4.4 Transportation Pavement Needs & Considerations Packaging of Projects Coordination Scheduling Prioritization Budget Formulation and Reporting Consideration System Operations Inconvenience to public New development Related Projects Underground utilities Grouping of projects 37

44 determine the expected condition of each pavement section in the future. This future condition is then used in conjunction with the trigger values to determine candidate projects for rehabilitation and reconstruction. An important feature of multi-year prioritization analysis is its ability to prioritize (or optimize) competing treatments using the cost effectiveness of individual treatments. To do this, each treatment is characterized by its cost and benefit. The cost aspect of the treatment should be based on its life cycle cost as much as possible. Typically only the initial treatment costs and routine maintenance costs are used because the exact nature of the treatments is not known in the planning stage (at the network level). Timely maintenance and rehabilitation treatments prevent premature deterioration of the pavement, retard the progression of pavement defects, provide a smooth pavement for users and extend the useful life of the pavement. For cost-effective management of our pavement infrastructure, it is necessary to apply the right treatment to the right pavement at the right time. The objective is to identify the pavement sections that would benefit most from treatments (such as asphalt overlays) and to implement the treatment in a timely manner. To succeed, a maintenance and rehabilitation program requires a long-term commitment, ongoing improvements and the documentation of program benefits. Depending on funding availabilty, projects not funded one year are considered in the subsequent year (or years). By changing the amount of funding, the amount of work will change, and so will the condition of the pavement network. However, regardless of the funding, the list of prioritized projects still represents the best value for the money. Preventive pavement maintenance and timely reconstruction of roadways that have reached the end of their useful service life are important in preserving the value of the Region s infrastructure investment. Once the annual pavement management inspections are complete, the list of candidate rehabilitation and reconstruction treatments is reviewed in conjunction with other roadway asset related needs and the available budget to package projects for each year. Expansion projects are combined with rehabilitation and reconstruction projects based on Regional priorities. The concept of network value (NV) is used for prioritization of individual projects. For example, for any given year, there may be 10 or 15 pavement sections that all have a pavement condition rating of 60. Figure 4.5 Pavement Life Extension Through Preventative Maintenance 38

45 The NV concept is based on the accounting principle of depreciation coupled with the engineering principle of survival analysis. During pavement rehabilitation and management, pavements are evaluated based on their functional and structural condition. The functional condition of the pavement is evaluated in terms of the ability of the pavement to provide a safe, durable platform for vehicular travel. The structural condition of the pavement is the ability of the pavement to protect the subgrade and for the individual layers to withstand the day-to-day loading imposed on it by vehicular traffic. In order to evaluate the structural and functional condition of a pavement, the pavement s ability to carry out its function is measured by assessing: Condition of the pavement surface as determined by the type and extent of various pavement surfaced distresses Ride condition of the pavement as determined by pavement smoothness measurements Structural condition of the pavement through load/deflection testing The condition of a pavement surface is assessed by determining the type and severity of various distresses and then deducting the impact of these distresses on the score of a perfect pavement. For example, a newly constructed pavement without distress would receive a score of 100. For the purposes of this example, the value of one square metre of a newly constructed pavement will be $100. The expected overall service life of the pavement in this example is expected to be 50 years. Pavements deteriorate with age and traffic. Typically, a pavement would be permitted to deteriorate to a condition of 60 on a scale of 100 over a period of 25 years and then would be considered for rehabilitation. Using the network value concept, this pavement would be considered to have a value of $50 (half its initial value). At the end of this service life, this example pavement would be considered for a mill and overlay. Once the overlay is placed, the surface condition of the pavement would be considered to be excellent and the surface condition index of this pavement would be increased from 60 to 100. A user of the pavement would perceive the pavement to be the same as new. However, the value of the pavement is not the same as if the pavement were newly constructed. Therefore the value of the in-situ pavement is only increased by a percentage of how long the mill and overlay rehabilitation would last. The extent of the increase in value to the original pavement structure is dependent on the effectiveness of the rehabilitation treatment (mill and overlay). For the purposes of this example, the mill and overlay is considered to cost $10 per square metre. Therefore it is considered to have increased the underlying value of the pavement from $50 per square metre to $60 per square metre. If the rehabilitation treatment is effective for a service life of 10 years, its effectiveness would decrease over its service life. The rate of reduction of value would be a function of the rate of deterioration of the pavement. Subsequent treatments would be considered in a similar fashion with the pavement deteriorating and reducing in value with time. The effectiveness of each treatment would be a function of its initial value and the length of time that it would last. If a treatment is relatively expensive, but does not last for a long period of time, the effectiveness of this treatment would be reflected in a significant reduction in the network value of the pavement. The pavement deteriorates with time until it eventually reaches its residual value or salvage value. Using the network value concept, the underlying value of the pavement or amortized value of the pavement can be calculated at any point during its service life. It addition, the return on investment of any rehabilitation treatment can be expressed as a percentage of the increase in network value that it provides. STRUCTURES Based on the recommendations from the biennial OSIM inspections, staff develops a preliminary 10 year Capital Budget forecast. The timing of the projects is then refined once more detailed investigations are completed to determine maintenance, rehabilitation, and replacement needs. 39

46 These investigations include, but are not limited to: Deck Condition / Condition Surveys Load Capacity Evaluations Fatigue Analysis Rehabilitation / Replacement Analysis The rehabilitation / replacement analysis (RRA) are typically the Region s best tool to determine rehabilitation versus replacement needs. RRA are completed in accordance with the Ministry of Transportation s (MTO s) Structural Financial Analysis. The RRA reviews the present condition and the economics of rehabilitation versus replacement of the existing structure. The primary task of the RRA is to determine whether or not it is economically favourable to rehabilitate structures, as opposed to replacing them. Tasks include a visual inspection of the structures in question to confirm the effects of deterioration and a net present value financial analysis for various rehab and replacement options. RISK ASSESSMENT PAVEMENT Risk assessment is completed by looking forward based on pavement condition ratings and current and future expected funding levels. Multiple funding scenarios are completed to determine the optional funding level for rehabilitation and reconstruction as well as the overall investment to maintain the Regional Road Network. Pavement Condition Index The pavement management data is analyzed to determine the optimal investment scenario (see Figure 4.6). Ten year pavement condition forecasts are prepared each year to prioritize pavements for maintenance, rehabilitation and reconstruction and to determine the optimal level. For this analysis, the funding necessary to maintain an overall network average PCI of 72 was used. This means that some sections qualifying for resurfacing at a PCI of 60 or reconstruction at a PCI of 45 may be allowed to deteriorate further if their priority is such that the work does not need to be done on a particular section in any one year to achieve an overall network average PCI of 72. The overall program, trigger values and investment needs are then adjusted as necessary to manage network priorities. Changes in condition of the pavement network on a year to year basis are also tracked. STRUCTURES Risk is assessed with failure of a structure closing a road or a condition that would require emergency repairs which would in-turn cause a road closure. There are also road side safety risks to be assessed on the approaches to the structures. Factors such as asset lifecycle and operating costs are used to confirm whether it is more economical to rehabilitate rather than replace a structure. Figure 4.6 Transportation Pavement Funding By PCI Level Years $5M $10M $15M $20M $25M 40

47 4.3 WASTE MANAGEMENT PROJECT PRIORITIZATION Landfill related capital works are prioritized based on the potential for impact to the environment and compliance with Ministry of Environment Environmental Compliance Approvals (MOE ECAs) if the asset were to fail. If replacement is not warranted for these reasons that asset is scheduled within the 10 year forecast or the year planning period based on a predetermined replacement frequency. Capital works at the Recycling Centre are prioritized based on need, ensuring that the facility remains operational. Maintenance and replacement plans for assets are prioritized in accordance with overall goals and objectives to maintain expected service levels. The maintenance of assets is based on Operations and Maintenance Manuals developed post commissioning and specific requirements identified in MOE ECAs approvals. Rehabilitation of assets is completed based on a review of the records compiled during O&M activities. If O&M activities identify problems or issues with infrastructure then arrangements are made to schedule for repair/replacement of the asset. Assets within Waste Management are scheduled for replacement based on a predetermined replacement frequency and fine-tuned based on observations collected in the field during O&M and rehabilitation works. Replacement life cycle(s) are predetermined for each infrastructure type. Operating and capital budgets consider the condition assessment, preventative maintenance, repair and replacement of capital assets in order to continue the provision of services that contribute to public health, safety, and quality of life (i.e. compliance with MOE ECAs). Factors such as asset lifecycle and operating costs are used to confirm whether it is more economical to rehabilitate rather than replace an asset. In the case of the Recycling Centre a decision might also be based on the presence of available funding from industry associations and opportunities to increase revenue. 4.4 HOUSING PROJECT PRIORITIZATION Overall, NRH has the responsibility to ensure that the affordable housing portfolio is able to meet the needs of current and future residents while ensuring the best use of available resources. This requires: Regular review and rationalization of assets to ensure they are used effectively and continue to deliver value for money A flexible portfolio of assets best equipped to meet changing service needs Adaptable methods of service delivery during a period of significant financial constraints NRH has two streams of responsibility when it comes to asset management of the portfolio (see Figure 4.8). PROTECTING THE EXISTING ASSET Protecting the existing asset is meant to prolong the life expectancy and usability of current housing stock. On a regular basis building condition assessments are conducted to determine if the asset is meeting objectives, underperforming or not meeting objectives. CREATING NEW ASSETS Creating new assets increases the availability of affordable housing to meet demand and allows service level standards to be met if assets are being replaced. Given the significant resources that go into creating new assets considerable investigation is conducted to determine viability before it becomes a project in the Development Program. 41

48 The two streams have distinct purposes and have separate funding sources; however they utilize some of the same staff resources which makes the coordination of work important. Figure 4.7 Housing Asset Management Process Protecting Existing Assets Does the existing asset meet strategic objectives? Evaluation Criteria Building Condition Financial Energy Efficiency Legislative Requirements Client Needs/Functionality Creating New Assets Is there a need for additional/replacement assets to meet strategic objectives? Building Condition Assessment Yes Maintain Preventative Maintenance Program Day to Day Repair Program Under Performing Further Investigation Prioritize Capital Jobs Indentify Funding Preventative Maintenance Program Annual Capital Program CAPITAL VALIDATION Assets that are meeting objectives are maintained through the Day to Day Repair Program and Preventative Maintenance Program. Assets that are underperforming, but continue to have value to the organization, will receive replacements through the Capital Program. Only a certain number of capital projects are able to be undertaken each No Further Investigation Tenant needs assessment Cost Benefit Analysis Funding Availability Organizational Preparedness Long Term or Interim Rehabilition Sale or Demolition Yes Further Investigation Funding Availability Service Level Standards Wait List Demand Assessment Market Analysis Muncipical Allocations Organizational Preparedness Surplus Land Development Programs year. As a result, projects are prioritized based on established criteria. In undertaking repair, preventative maintenance and capital work, it is NRH policy to include energy conservation measures where possible. When an asset is no longer meeting objectives, an indepth investigation of the situation is undertaken and options assessed. An asset will either be rehabilitated (for the long term or interim) or eliminated through sale or demolition. 42

49 GROWTH The current number of affordable housing units in all programs is insufficient to address the need for affordable housing as expressed through the affordable housing waiting list. Over 6,200 households (11,473 people) are currently waiting for affordable housing and this number continues to escalate with a 6% increase over last year and a 35.5% increase in the past 5 years. Figure 4.8 shows that the waiting list in almost all municipalities far exceeds the current supply. Additionally, the distribution of units does not address the need for 1 bedroom units for individuals between 16 and 54 years of age. Only 11.5% of the existing stock is available to this client group compared to 41.7% for seniors and 46.8% for families. When funding becomes available for potential new development projects the need of households on the waiting list and current supply is an important component of the feasibility investigation. Units and Waiting List Number Figure 4.8 Housing Waiting List Vs. Population Population Waiting LIst Units 0 St. Catharines Niagara Welland Fort Port Colborne Lincoln Grimsby Niagara Thorold West Pelham Falls Erie -on-the- Lincoln Lake Location 140, , ,000 80,000 60,000 40,000 20,000 0 Population 43

50 SECTION 5 FINANCING STRATEGY 44

51 5. FINANCING STRATEGY CORPORATE OVERVIEW Niagara Region has a Capital Program Funding Model, the purpose of which is to balance immediate and future needs, affordability and sustainability, while minimizing risk and supporting economic growth in the Region. The intent of the model is achieved by adhering to the following concepts: Capital projects are budgeted in their entirety to support transparency of total project costing. Where a project could be considered for phasing, the design and construction costs can be budgeted in different years. A source of funding is required for each capital project The model is a conservative approach to managing the Region s capital funding requirements. The Capital Program is funded through a combination of levy, water and wastewater reserves (funded through annual water / wastewater requisitions from the local area municipalities), Development Charges (DC s), gas tax, upper tier government funding, and debt financing. Program specific reserve financing (i.e. Waste Management Reserve, Fleet Replacement Reserve, and PW Field Admin Equipment Replacement Reserve) is also utilized where appropriate. ($ Millions) The Region ensures provincial guidelines are adhered to with respect to borrowing limits. The projected Annual Repayment Limit (ARL) for Niagara Region over the next 10 years in not expected to go above 11%, meaning no more than $0.11 of every own source revenue dollar will be spent for debt charges (principal and interest). By doing so this helps the Region to maintain its Standard & Poor s (S&P) rating of AA. This is important for ensuring future borrowing costs are kept at an affordable limit when debt financing is required. Each of Niagara Region s departments submits a 10- year Capital Budget & Forecast, along with a 3-year operating budget. The capital budget & forecast lay out the 10-year requirements for each of the programs on a project by project basis. Once the project list has been prioritized based on criteria explained previously in this AMP, a funding model is developed to accommodate the capital requests. The funding model lays out all the sources of funding that will be used, and what level of contribution will be required from levy funds and water and wastewater rates. This level of funding from levy and rates, along with debt charge repayments, comprise the direct operating impact of the capital program. Figure Year Capital Budget Request & Funding Total Request ( ) $1,560.6 Total Funding ( ) $1, Capital Request $220.0 $163.7 $174.9 $162.0 $198.5 $143.5 $128.5 $121.9 $124.9 $122.6 Funding $220.0 $156.3 $188.3 $162.6 $183.8 $130.0 $140.1 $147.7 $113.1 $

52 The Region s approved Capital Budget & Forecast for totals $1.56 billion, including $1.32 billion for Water and Wastewater, Transportation, Waste Management, and Housing. Additional detail by division is provided later in this section as well as in the Region s Capital Visual Tool which is available on the Regional Website. In addition, the 2014 Operating Budget includes approximately $20 million for repair and maintenance expenses for existing Regional assets. IN YEAR REPORTING & MONITORING The Capital Budget represents priority projects as determined by the departments and approved by Council. Project Managers within departments administer the projects and with corporate staff maintain the related tangible capital asset information. Niagara Region reports on its capital projects each quarter. Information such as projected annual cashflows and estimated date of completion are provided as part of this reporting for projects that have a remaining unspent budget of $1 million or greater. Explanations for projects with significant variances are also included in the quarterly reporting. Closeout Reports are generated based on the review of capital projects done for purposes of quarterly reporting. The purpose of these Closeout Reports is to ensure that projects are closed as soon as possible after completion. Surplus or unspent funding from capital projects is returned to the Region s Capital Variance Reserves (CVRs). The CVRs are a mechanism to fund unforeseen capital expenditures that are not deemed to be an emergency and to eliminate the need for transfers between projects. Amounts in excess of the CVR target balances are returned to the original capital reserves and re-deployed through future budget processes. DEVELOPMENT CHARGES The Region participates in a regular Development Charge (DC) process. DC By-laws are required to be updated at least every 5 years. The Region s most recent DC By-law was enacted in 2012 after extensive consultation with the public and stakeholders through the Development Charge Task Force. This resulted in several improvements aimed at increasing DC revenue available for capital projects, including differentiation of building types in the rate structure as well as the elimination of the DC rate phase-in. PURCHASING Purchasing in Niagara Region is governed by the Region s Purchasing By-law. The purpose of the By-law is to ensure openness, accountability, and transparency throughout the purchasing process while protecting the best interests of the Corporation and taxpayers. A competitive and fair bidding process is encouraged amongst potential vendors in order to obtain the best value and maximize savings. The By-law also encourages the purchasing of goods and services with due regard to the preservation of the natural environment. Finally, the By-law also helps to avoid any real or perceived conflicts between the interests of the Region, its employees, and elected officials, and to ensure compliance with the Municipal Conflicts of Interest Act. Quick Quote THE REGION S APPROVED CAPITAL BUDGET & FORECAST FOR TOTALS $1.56 BILLION, INCLUDING $1.32 BILLION FOR WATER AND WASTEWATER, TRANSPORTATION, WASTE MANAGEMENT, AND HOUSING. 46

53 5.1 WATER AND WASTEWATER Niagara Region s 10-year capital program for water and wastewater totals $590 million. Funding for the program consists of $460 million (78%) from capital reserves which represents funds from rate and requisitions from local area municipalities, $71 million (12%) in development charges, $30 million (5%) in debt, and $29 million (5%) in external recoveries from upper tier governments (see Figure 5.2). In accordance with the Safe Drinking Water Act and O.Reg 453/78 requirements, a financial plan specific to Water & Wastewater services has been developed and approved by Council. This plan aligns with the principles of the Ministry of Environment s guideline document Towards Financially Sustainable Drinking- Water and Wastewater Systems. The financial plan demonstrates that over the 10 year period 2014 to 2023, Niagara Region s Water and Wastewater programs have an anticipated growth in net assets as program funding is expected to exceed asset consumption. The plan balances the four key elements of capital financing, which are the reserve balances, debt levels, annual operating contributions, and the capital project needs. Figure 5.2 Water / Wastewater 10 Year Capital Budget By Funding Source ($Millions) ($ Millions) Year Figure 5.3 Transportation 10 Year Capital Budget By Funding Source Year External Recovery ($29M, 5%) Debt ($30M, 5%) Development Charges ($71M, 12%) Capital Reserve ($460M, 78%) External Recovery ($46M, 7%) Program Specific Reserve ($26M, 4%) Development Charges ($90M, 14%) General Capital Reserve/ Debt ($341M, 54%) 47

54 5.2 TRANSPORTATION Niagara Region s 10-year capital program for transportation totals $635 million. Funding for the program comes from capital reserves which, represents funds from the levy (property taxes), development charges, federal and provincial gas tax funding, debt, and external recoveries including other upper tier government amounts, local area municipalities, and other external agencies (see Figure 5.3). 5.3 WASTE MANAGEMENT Niagara Region s 10-year capital program for Waste Management totals $34 million. Funding for the program consists of $30 million (89%) from capital reserves and $4 million (11%) in debt (see Figure 5.4). 5.4 HOUSING Niagara Region s 10-year capital program for Housing totals $62 million. Funding for the program consists of $8 million (13%) from capital reserves, $47 million (76%) in debt, and $7 million (11%) in other and external funding (see Figure 5.5). Over the next ten years NRH will see a $715,184 decrease in Federal funding, which will increase the organization s reliance on debt financing. Figure 5.4 Waste Management 10 Year Capital Budget By Funding Source 9 Debt ($4M, 11%) ($Millions) ($ Millions) Year Figure 5.5 Housing 10 Year Capital Budget By Funding Source Year Capital Reserve ($30M, 89%) Federal Funding ($6.6M, 7%) Debt ($47M, 76%) Capital Reserve ($8.3M, %) 48