Policy Number: POL-FIN-03-2025
Version Number: V#1
Policy Title: Strategic Asset Management Policy
Effective Date: February 24, 2025
Approval Authority: Council
Resolution / By-law Number: RES-CM-28-2025
Scheduled Review Date: January 1, 2030
Policy Contact: Nadia Knebel, Treasurer
Initiating Department: Finance
Abstract: A policy for the effective management of municipal assets and infrastructure by aligning with financial strategies, risk management, and service delivery goals to optimize sustainability, efficiency and long-term community needs.
1. Policy Statement
1.1 This policy supports The Corporation of the Nation Municipality's ("The Nation") commitment to managing infrastructure by addressing risks, priorities, and costs associated with both short- and long-term needs. It reflects an organization-wide dedication to responsible stewardship of municipal assets while enhancing accountability and transparency to the community through the adoption of best practices in asset management planning.
2. Purpose
2.1 A Strategic Asset Management Policy formalizes The Nation's commitment to asset management, aligns its asset management actions with strategic goals and objectives, and provides direction to guide Council and staff in carrying out its business, plans, and activities for the community. This policy will support logical and evidence-based decision-making for the management of municipal infrastructure assets, guide efforts to manage risks, address priorities and meet short and long-term needs within the bounds of possible funding.
2.1 By using sound asset management practices, the Municipality will work to ensure that all municipal assets meet expected performance levels and continue to provide the desired service levels in the most efficient and effective manner. Linking service outcomes to infrastructure and equipment investment decisions will assist the Municipality in focusing on service, rather than budget driven asset management approaches.
3. Scope
3.1 This policy applies to all departments and employees of The Nation that have a direct or indirect link with assets and asset systems that are owned in whole or in part, leased, or operated by The Nation.
4. Legislative Authority
4.1 The Nation's asset management processes shall comply with all applicable laws and regulations as well as account for provincial mandates such as Jobs and Prosperity Act, 2015 and Ontario's Climate Change Action Plan, and Ontario Regulation 588/17, Asset Management Planning for Municipal Infrastructure, as amended.
5. Definitions
5.1 In the policy, the following definitions are used:
5.1.1 "Asset" - Any item or entity with potential or actual value to an organization, whether tangible or intangible, financial or non-financial, including associated risks and liabilities.
5.1.2 "Asset Class" - A grouping of assets of a similar nature and use.
5.1.3 "Asset Management" - Coordinated actions to efficiently manage assets, ensuring they deliver the desired service levels sustainably and at the lowest life-cycle cost. It applies to all asset types and covers their full life cycle, from acquisition to maintenance, renewal, and disposal.
5.1.4 "Asset Management Activities" - Collection of activities required to identify, manage and maintain a particular Asset or collection of Assets
5.1.5 "Asset Management Plan (AMP)" - A long-term strategic document that outlines how assets will be managed, including their condition, expected service levels, required actions, and financing strategies.
5.1.6 "Asset Management Policy and Strategy" - The Asset Management Policy establishes the principles, framework, and overall direction for asset management within the Municipality, ensuring alignment with strategic objectives and regulatory requirements. The Asset Management Strategy outlines the specific approach, resources, and implementation plans needed to achieve these objectives, including addressing barriers and ensuring organizational readiness. Together, these guide the focus, level of practice, and decision-making processes necessary for sustainable and effective asset management.
5.1.7 "Asset Management System" - A structured framework that connects key asset management practices and processes. It enables the organization to effectively manage assets at all levels, from daily operations to system-wide integration and planning.
5.1.8 "Condition" - The physical state of an asset.
5.1.9 "Council" - The council of the Corporation of The Nation Municipality.
5.1.10 "Department Head" - The person responsible for the management and operation control of the department within The Corporation of The Nation Municipality.
5.1.11 "Infrastructure" - Physical assets (and natural assets) developed and/or used by an organization to support its social, cultural, and economic activities and services.
5.1.12 "Level of Service (LoS)" - The measurable outcomes an organization aims to deliver, reflecting social, economic, environmental, and political priorities.
5.1.13 "Life-cycle activities" - Actions performed throughout an asset's life, including design, construction, maintenance, renewal, operation, and decommissioning.
5.1.14 "Life-cycle costs" - The total cost of owning and managing an asset, including capital, operating, maintenance, renewal, replacement, and environmental costs.
5.1.15 "Long-Term Financial Plan" - A financial forecast covering at least five years, ensuring alignment with strategic plans and funding requirements.
5.1.16 "Performance Monitoring" - The continuous or periodic quantitative and qualitative assessments of the actual performance compared to specific objectives, targets or standards.
5.1.17 "Risk" - The effect of uncertainty on objectives. Risk events are events which may compromise the delivery of the organization's strategic objectives.
5.1.18 "Risk Management" - The application of a formal process to assess risks to determine risk tolerance, the range of outcomes and their probability of occurrence and actions that may be taken to address overall risk exposure.
5.1.19 "Service/Useful Life" - The period over which an asset or component is expected to be available for use.
6. Policy
6.1 GOALS AND OBJECTIVES
6.1.1 The Municipality's goals and objectives with respect to its tangible assets relate to the effective delivery of municipal services to constituents and stakeholders. The goals and objectives for The Nation's asset management policy are:
6.1.1.1 To maintain assets at condition levels that are aligned with the expected service levels and strategic intent;
6.1.1.2 To provide services and maintain assets in a financially sustainable manner;
6.1.1.3 To use asset management to inform the annual budget process and long-term financial plans; and
6.1.1.4 To use the AMP as a tool to communicate the needs related to assets to deliver services of the Municipality and the strategies required to meet those needs.
6.2 STRATEGIC ALIGNMENT
6.2.1 The Municipality's AMP will be aligned with the following documents:
- Strategic Plan
- Official Plan
- Budgets
- Drinking Water Quality Management Standard
- Development Charge Study
- Various Master Plans
- The following documents will be developed to support comprehensive financial alignment:
- Long-Term Financial Plan
- Water, Wastewater and Stormwater Financial Plans
- Reserve and Reserve Fund Policy
- Debt Management Policy
6.2.2 All these plans rely to some extent on the physical assets owned by the Municipality and the commitment of its staff to ensure their strategic use. This includes the long-term maintenance, repair, and replacement of existing assets and the acquisition of new assets to meet the evolving needs of The Nation.
6.2.3 Following updates or material changes to any of the documents listed above, the Municipality will consider potential impacts on the AMP to ensure continued alignment.
6.3 GUIDING PRINCIPLES
6.3.1 The Infrastructure for Jobs and Prosperity Act, 2015 sets out principles to guide asset management planning in municipalities in Ontario. The Nation Municipality will strive to incorporate the following principles whenever possible into the day-to-day operations:
6.3.1.1 Resident Focused: The Municipality will have clearly defined levels of service and applying asset management practices to maintain the confidence of residents in how the Municipality assets are managed.
6.3.1.2 Forward looking: The Municipality will make the appropriate decisions and provisions to better enable its assets to meet future challenges, including changing demographics and populations, resident expectations, legislative requirements, technological and environmental factors.
6.3.1.3 Budgeting and planning: The Municipality shall consider any applicable budget or fiscal plans, including those adopted through Ontario legislation.
6.3.1.4 Serviced focused: The Municipality will consider all the assets in a service context and consider their interrelationships as opposed to optimizing individual assets in isolation.
6.3.1.5 Risk-based: The Municipality will manage the risk associated with attaining the agreed levels of service by focusing resources, expenditures, and priorities based upon risk assessments and the corresponding cost/benefit recognizing that public safety is the priority.
6.3.1.6 Holistic: The Municipality will take a comprehensive approach that looks at the "big picture" and considers the combined impact of managing all aspects of the asset life cycle.
6.3.1.7 Value-Based / Affordable: The Municipality will choose practices, interventions and operations that aim at reducing the life cycle cost of asset ownership, while satisfying agreed levels of service. Decisions are based on balancing service levels, risks, and costs.
6.3.1.8 Systematic: The Municipality will adopt a formal, consistent, repeatable approach to the management of its assets that will ensure services are provided in the most effective manner.
6.3.1.9 Innovation: The Municipality will continually improve its asset management approach, by driving innovation in the development of tools, practices and solutions.
6.3.1.10 Accessibility: Infrastructure planning and investment should promote accessibility for people with disabilities.
6.3.1.11 Environmentally conscious: The Township shall minimize the impact of infrastructure on the environment by
- Respecting and helping maintain ecological and biological diversity,
- Augmenting resilience to the effects of climate change, and
- Endeavoring to make use of acceptable recycled aggregates.
6.3.1.12 Health and safety: The Township shall ensure that the health and safety of workers involved in the construction and maintenance of infrastructure assets is protected.
6.4 BUDGETING
6.4.1 The asset management plan and progress made on the plan will be considered annually in the creation of the Municipality's capital budgets, operating budgets, and long-term financial plans. The asset management plan will be referenced by each specific department in the preparation of their budget submission to:
6.4.1.1 Look up forecasted spending needs identified in the plan;
6.4.1.2 Verify progress made on the plan to identify potential gaps; and
6.4.1.3 Prioritize spending needs, across the gap identified in the plan and recent developments, for the years to be budgeted for.
6.4.2 The budgets thus prepared by each department will then be processed in accordance with the municipal budget process.
6.4.3 The Finance Department will be involved in asset management planning to facilitate the bridge between:
6.4.3.1 The financial strategy developed in the asset management plan;
6.4.3.2 The budget submissions of each service area; and
6.4.3.3 The overall budgeting process they ultimately oversee.
6.4.4 The Finance Department will work together with all the departments involved to align the financial strategy developed in the asset management plan with the financial plans related to the assets.
6.5 COMMUNITY PLANNING
6.5.1 The asset management planning will be aligned with the Municipality's Official Plan. The asset management plans will reflect how the community is projected to change and the related asset impacts. The Municipality will achieve this with the following:
6.5.1.1 Those responsible for managing services impacted by development or redevelopment will:
6.5.1.1.1 Be consulted while the plan is being prepared;
6.5.1.1.2 Provide input for the analysis of future service costs; and
6.5.1.1.3 Provide written comments about the financial viability of development as it pertains to the service they manage.
6.5.1.2 Methods, assumptions and data used in the selection of development or redevelopment initiatives documented in the community plan will be available in support of the production of asset management plans.
6.6 CLIMATE CHANGE
6.6.1 The Municipality commits to the development of tailored actions that make the best use of its resources to mitigate and adapt to climate change. These actions will go beyond acquiring or modifying assets based on greenhouse gas reduction targets and risk exposure. Bolstering resilience to climate change in the Municipality also means modifying the scope of current operations, anticipating possible costs to support contingency funds, leveraging alternative funding mechanisms, integrating the disaster response perspective to planning, and revising levels of service. The Municipality will tailor these actions by striking a balance between its organizational capacity, financial and stakeholder support, and the local risks and vulnerabilities related to climate change. The asset management plan will encompass this sustainable approach to climate change mitigation and adaptation.
6.7 STAKEHOLDER ENGAGEMENT
6.7.1 The goal of the Municipality is to efficiently provide its various stakeholders with the municipal services they need within the bounds of regulatory requirements, the built environment, and the natural environment. To achieve this goal, it is necessary that the Municipality understand the needs of current stakeholders, consider the needs of future generations, and incorporate these perspectives into asset management plans. The Municipality recognizes them as an integral part of the asset management approach. Accordingly, the Municipality will:
6.7.1.1 Provide opportunities for residents and other stakeholders served by the Municipality to provide input in asset management planning; and
6.7.1.2 Coordinate asset management planning with other infrastructure asset owning agencies such as municipal bodies and regulated utilities.
7. Responsibilities
7.1 The development and continuous support of the Municipality's asset management program requires a wide range of duties and responsibilities. The following table outlines the groups responsible for these tasks.
Council responsibilities
- Approve and review the Strategic Asset Management Policy (AMP) at least every five years.
- Oversee annual reporting on asset management performance.
- Approve funding and budgets for asset management.
- Ensure adequate resources and capacity for effective asset management.
- Prioritize asset stewardship in policy and budget decisions.
- Set and approve levels of service for municipal assets.
- Facilitate public input into asset management planning
CAO Responsibilities
- Represent Council and stakeholder interests in asset management.
- Provide leadership and strategic direction to department heads.
- Ensure resources and support for asset management initiatives.
- Oversee continuous improvement of asset management systems and practices.
- Advise Council on asset management strategies based on professional expertise.
Treasurer responsibilities
- Manage and update the Asset Management Policy (AMP) to ensure compliance and effectiveness.
- Oversee the municipality-wide asset management system, ensuring consistency across departments.
- Align asset management strategies with budgets, financial policies, and long-term financial plans.
- Monitor financial performance, provide insights, and advise leadership on funding strategies.
- Ensure adherence to financial regulations, reporting standards, and best practices.
Department heads responsibilities
- Oversee asset and risk management planning within their service area.
- Ensure infrastructure and service levels meet municipal standards and long-term goals.
- Support the Treasurer in maintaining consistent asset management systems across departments.
- Align 10-year capital plans with financial strategies and the AMP.
- Coordinate with other departments on shared assets and infrastructure needs.
- Keep the CAO informed on infrastructure conditions, risks, and trends.
8. Administration
8.1 The administration of this policy shall be done by the Finance department.
9. Housekeeping Amendments
9.1 The Clerk is hereby authorized to make such minor amendments to this Policy as are necessary to ensure continued compliance with provincial legislation and Council-ratified operating procedures.
10. Errors or Omissions
10.1 It is acknowledged that any error or omission in this policy, which error or omission was not the result of bad faith on behalf of the Municipality, will not render such policy invalid or void.
11. Policy Review
11.1 The CAO and/or Treasurer shall review the effectiveness of this policy at least every five (5) years to ensure that it is aligned with the current best practices and legislative requirements. The result of this review, along with any recommended changes, will be reported to Council for approval.
12. Effective Date
12.1 This Policy shall take effect on February 24, 2025, and shall replace any former policies in place.