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Town of Tillsonburg

Town of Tillsonburg. Lifecycle/Capital/Debt Strategy. Asset Management. Long-term goals: Assess on an enterprise wide basis, asset life cycle, the condition, useful life and replacement cost of assets Stabilize the required funding levels

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Town of Tillsonburg

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  1. Town of Tillsonburg Lifecycle/Capital/Debt Strategy

  2. Asset Management • Long-term goals: • Assess on an enterprise wide basis, asset life cycle, the condition, useful life and replacement cost of assets • Stabilize the required funding levels • Be able to respond to residents on the timing of capital projects • Assets to tie to GIS database

  3. Asset Management • Short-term goals: • Identify the infrastructure • Gather asset information such as age, location, construction material, etc. • Assess timing of major repairs and replacements • Assess financing needs and funding options on a macro scale

  4. Asset Management • Project overview • Data gathering began in the first half of 2005 for roads (which includes curbs and gutters), sidewalks, storm sewers, facilities, and fleet • Use of WorkTech for compiling detailed data • Provincial borrowing cap is $1.5 million • There has been a significant learning curve for all • Objective of this presentation is to begin discussions on capital funding needs and options for the 2006 budget and beyond

  5. Asset Management • WorkTech – Approach to Roads • Block: a section of road between two intersecting functioning roads • Data collected: • Block lengths • Existing widths of each block • Assigned each block an asset class: UP50 – urban, paved, 50 yr. life; UP42 – 42 yr. life; UP35 – 35 yr. life; RP50 – rural, paved, 50 yr. life; RP42; RP35; GR1 – gravel surface

  6. Asset Management • Data collected con’t: • Assigned each block a subtype according to OGRA standards: LCI - local commercial industrial; L/R - local residential; CCI - collector commercial industrial; C/R - collector residential; ART - arterial roadway • Year road sections and storm sewers were built • Determined surface types: HCB - high class bituminous; ICB - intermediate class bituminous; LCB - low class bituminous; GR - gravel

  7. Asset Management • Data collected con’t • Determined class of each block of road according to Provincial Minimum Maintenance Standards • Determined whether the block has curb and gutter • Determined the location and the OPSD of each section of curb and gutter • Determined Length, width and location of all sidewalks

  8. Asset Management • Established benchmark costs • Our reconstruction prices from the past 3 years • Recent subdivision construction prices • For the remaining items supplier prices were used with the addition of estimated installation costs

  9. Asset Management • Data was summarized from WorkTech or the existing five year capital plan to arrive at the average annual requirements for all departments over a 10 year time horizon • Note that a 10 year time period may not cover the full life cycle of an asset and an averaging approach does not take into account asset replacement spikes • Average annual requirements are $4.88 million • Based on what we currently collect from taxation for capital, a deficit of $4.13 million potentially exists

  10. Asset Management • Assumptions: • 5% cost of capital • 15 year term for debt • 10 year time horizon • Data requirements are averaged • Federal Gas Tax revenue of $1.14 million reduces the annual debt requirement over 5 years • No inflation factor

  11. Asset Management • Assumptions con’t: • Real assessment growth estimated to be 1% for each of the 10 years relating to residential, commercial and industrial growth • Remaining reserve balances are either phased in over a 11 year period or topped up (applies to Roads) • New strategic projects anticipated, such as capital costs for medical center, golf course, industrial land acquisition and potential oil clean up • No other funding sources considered

  12. Asset Management • Estimated Enterprise Wide Asset Values: • Fleet: $15.7 million • Facilities: $37.8 million • Roads: $84.5 million • IT: $0.2 million • Total: $138.2 million

  13. Asset Management Scenarios

  14. Asset Management • Results for proposed scenario: • Total expenditures • Total deficit • Principal and interest payments • Outstanding debt • Fleet department • Roads department

  15. Asset Management • Choices: • Define required capital service level • Defer projects • % increase in taxation for capital assets • Pursue other funding sources, such as RED, Tobacco transition, COMRIF, etc

  16. Asset Management • Discussion - other scenarios? • Next steps: • Ongoing annual project to refine data, getting better use from WorkTech software and keep the data current • Phase 2, 2006, refine condition assessments and additional areas to be inventoried (Hydro, bridges, water, sanitary, etc. and completion of storm) • Analyze asset spikes and consider options to create uniform asset replacement and stable funding levels

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