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Assessing your assets, Corvée at GFOABC 2017
- 1. Assessing your assets Asset management – a success story at the District of West Vancouver GFOABC 2017 Conference June 15th
- 2. Executive summary • Introductions • Work with West Vancouver • Staff • Council and community • Outcomes (AM Implementation) • Conclusions Assessing your assets – GFOA BC 2017
- 3. Introductions Matthew V. Hartney • MBA, CPA, CMA • Director of Advisory, Corvée • Past Director of Finance, City of North Battleford • 10+ years experience Isabel V. Gordon • MBA, CPA, CA • Director of Financial Services, District of West Vancouver • Past Director of Finance, City of North Vancouver • 30+ years experience Assessing your assets – GFOA BC 2017
- 4. Common challenges • Lack of resources • Rising operating expenses • Stagnating revenues • New service offerings • Net new capital assets • Insufficient reserve funds • Short-term focus (council) Assessing your assets – GFOA BC 2017
- 5. Work with West Vancouver • Start with staff • Conclude with council and community Assessing your assets – GFOA BC 2017
- 6. What are we talking about? • What is Capex vs. Opex? • What is AM? • What assets do we consider? • What asset data do we need? • How do we get it? • If we get it, how to use it? • When do we need it? • What is fiscal sustainability and long range planning? Assessing your assets – GFOA BC 2017
- 7. Staff level • What do we own? • What should we know? • What work has been done? • Who has the info? Who is responsible? What was needed: • Big list of stuff • Location, state and condition • Capital asset task force Assessing your assets – GFOA BC 2017
- 8. How to start? Big list of stuff Assessing your assets – GFOA BC 2017
- 9. Categorize
- 10. Chart: $24.8M over 20 years Assessing your assets – GFOA BC 2017
- 11. $24.8M forecast by asset type Assessing your assets – GFOA BC 2017 4% other
- 12. Capex long-term forecast Assessing your assets – GFOA BC 2017
- 13. 20 year lifecycle funding gap: $58M Assessing your assets – GFOA BC 2017 *Provided by District of West Vancouver.
- 14. Committee and Council • Big list of stuff – helps get buy-in • Discuss when, where, why and how to invest in AM: • tax rates • charges/levies • capital reserves • debt financing • service levels/changes • asset divestment Assessing your assets – GFOA BC 2017
- 15. When to invest in assets? Assessing your assets – GFOA BC 2017 *Provided by District of West Vancouver.
- 16. Sustainable AM Assessing your assets – GFOA BC 2017 *Provided by District of West Vancouver.
- 17. Align AM with strategy Assessing your assets – GFOA BC 2017 *Provided by District of West Vancouver.
- 18. Moving AM forward • Council and community: • Asset levy • Asset reserves • Framework for evaluating new assets • Asset Shedding • Staff: • Rank assets by condition and use (risk registers) • Updated listings and values • AM training • AM software Assessing your assets – GFOA BC 2017 *Provided by District of West Vancouver.
- 19. Conclusions • Don’t start with software • Don’t just do an accounting exercise • Understand the work already done • Develop your framework for evaluating new assets using life cycle cost – think about maintenance costs before you buy • Link assets to services • Ask tough questions • Get ready for grant funding requirements Assessing your assets – GFOA BC 2017
Editor's Notes
- Over 30 years experience in municipal finance. Previously Director of Finance, City of North Vancouver for 25+ years. Currently Director of Financial Services, District of West Vancouver (since 2015). In West Vancouver, she has introduced many innovations, including a District-wide asset management program financed by a dedicated asset levy. Advocates for natural capital accounting, and is an early adopter of the CLIC (Community Lifecycle Infrastructure Costing) tool. Frequent speaker at Capilano University’s Public Administration program, through MATI, and Planning and Engineering groups. A passionate believer in the need to transform government finance through a sustainability lens, she will participate in GFOA International’s pilot program to test its new Financial Sustainability Framework.
- However, it should also be noted that this report is not: A one-time exercise to be checked off a list as completed. It must be a living document, continually updated and refreshed with new information as conditions and assets change. It is not a replacement for the annual capital budget. It provides guidance to that process, but the annual financial plan must consider changing community requirements, availability of funds, opportunities for grants, critical replacement requirements, and community input, as well as optimal asset maintenance. It is not a list of critical asset investment requirements, that is, a list of assets that are in danger of failure unless investment is made. Due to under-investment in the past, some of the District’s assets are critical. The 2016 capital investment program is based upon addressing this deficit. The projected replacement cost schedules are for the twenty years from 2016 to 2035. In some cases, the District owns assets whose investment requirements exceed this timeline – they are more than twenty years in the future. These assets are included in Appendix 9, the asset inventory list, but are not represented in Appendices 1-8, which provide twenty years of anticipated costs. Year by year, as the listings are updated, these assets will be incorporated into the twenty-year projections. Initial Analysis: relatively healthy fiscal position given the breadth of services, total value of infrastructure assets, nominal long-term debt load and AAA credit rating. new capital assets and infrastructure low total taxation and the lowest residential property tax mill rate in Metro Vancouver.
- A comprehensive understanding of long-term asset management is a key requirement in support of fiscal sustainability.
- A comprehensive understanding of long-term asset management is a key requirement in support of fiscal sustainability.
- A comprehensive understanding of long-term asset management is a key requirement in support of fiscal sustainability.
- Replacing assets at the ‘optimum’ point avoids costly maintenance which does not prolong asset life, and therefore provides the best value for money The ‘critical’, or balance point (in circle) is the point at which risk of failure starts to climb. At this point, repairs are required just to keep the asset functioning, and, even then, may not be sufficient .
- Replacing assets at the ‘optimum’ point avoids costly maintenance which does not prolong asset life, and therefore provides the best value for money The ‘critical’, or balance point (in circle) is the point at which risk of failure starts to climb. At this point, repairs are required just to keep the asset functioning, and, even then, may not be sufficient .
- Replacing assets at the ‘optimum’ point avoids costly maintenance which does not prolong asset life, and therefore provides the best value for money The ‘critical’, or balance point (in circle) is the point at which risk of failure starts to climb. At this point, repairs are required just to keep the asset functioning, and, even then, may not be sufficient .
- Replacing assets at the ‘optimum’ point avoids costly maintenance which does not prolong asset life, and therefore provides the best value for money The ‘critical’, or balance point (in circle) is the point at which risk of failure starts to climb. At this point, repairs are required just to keep the asset functioning, and, even then, may not be sufficient .
- 20 Year Lifecycle Funding Gap $58.0M Avg Annual Investment Required $13.3M Current Tax Levy Asset Funding $10.4M Annual Investment Gap $2.9M