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Client Report B-5123.5 Municipal Infrastructure Investment Planning (MIIP) MIIP Report: Case Studies on Municipal Infrastructure Investment Planning for City of Calgary City of Edmonton City of Hamilton City of Ottawa City of Prince George Department of National Defence Regional Municipality of Durham Regional Municipality of Halton Regional Municipality of Niagara July 2004

Municipal Infrastructure Investment Planning (MIIP) Author L.A. Newton, Ph.D., NSERC Fellow

Author D.J. Vanier, Ph.D., Project Manager

Quality Assurance Y, Kleiner, Ph.D., P.Eng., Group Leader Buried Utilities Group

Approved D.A. Taylor, Ph.D., P.Eng., Director Urban Infrastructure Program Report No: Report Date: Contract No: Program:

B-5123.5 July 2004 B-5123 Urban Infrastructure Program i + 13 pages Copy No. 1 of 15 copies

Table of Contents Table of Contents ........................................................................................................................... i List of Figures................................................................................................................................. i Abstract.......................................................................................................................................... 1 1 Introduction .............................................................................................................................. 1 2 Case Studies .............................................................................................................................. 2 2.1 Developing a Strategic Asset Management Plan for the Region of Durham’s Pumping Stations: A Workable Approach ................................................................................................ 3 2.1.1 Objectives .................................................................................................................. 3 2.1.2 Approach ................................................................................................................... 3 2.1.3 Results ....................................................................................................................... 4 2.2 Pilot Implementations of an Integrated Decision Support System for Infrastructure ...... 4 2.2.1 Objectives .................................................................................................................. 4 2.2.2 Approach ................................................................................................................... 4 2.2.3 Results ....................................................................................................................... 5 2.3 Utilization of Closed Circuit Television Inspection (CCTV) for Wastewater Infrastructure .............................................................................................................................. 6 2.3.1 Objectives .................................................................................................................. 6 2.3.2 Approach ................................................................................................................... 7 2.3.3 Results ....................................................................................................................... 7 2.4 Halton Region Facility Condition Assessments and Audits for Capital Planning ........... 8 2.4.1 Objectives .................................................................................................................. 8 2.4.2 Approach ................................................................................................................... 8 2.4.3 Results ....................................................................................................................... 9 2.5 Asset Accounting............................................................................................................ 10 2.5.1 Objectives ................................................................................................................ 10 2.5.2 Approach ................................................................................................................. 10 2.5.3 Results ..................................................................................................................... 11 3 Acknowledgements................................................................................................................. 12 4 References ............................................................................................................................... 12 Appendix I: MIIP Abbreviations .............................................................................................. 13 List of Figures Fig. 1. Strategic Asset Management Continuum ........................................................................... 2

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MIIP Report: Case Studies on Municipal Infrastructure Investment Planning Linda A. Newton, Ph.D., National Research Council of Canada Dana J. Vanier, Ph.D., National Research Council Canada Issued: 2004-07-15

Abstract This report summarizes five case studies in the field of strategic asset management from a number of partners within the Municipal Infrastructure Investment Planning project. The objective of this report is to present examples of best practices in the field of investment planning from municipal infrastructure assets. The case studies presented herein demonstrate the development of asset management in the partner municipal organizations. The report presents summaries of more extensive reports and presentations by the contributors. The first case study, from the Region of Durham, deals with the development of a strategic asset management plan for the Region’s pumping stations. The next study compares the preliminary results of the implementation of an integrated decision support system for infrastructure in the City of Hamilton and the Department of National Defence. The third and fourth case studies, from the Region of Halton, investigate the utilization of closed circuit television inspection for wastewater infrastructure and the use of facility condition assessments and audits for capital planning. The last case study in this report is from the City of Edmonton and illustrates the steps and challenges involved in implementing an asset accounting system. 1

Introduction

The Municipal Infrastructure Investment Planning (MIIP) project is being carried out by a consortium of researchers from the National Research Council Canada and nine collaborating municipalities/organizations from across Canada. The goal of MIIP is to develop and formalize a Generic Framework for collecting and storing information and knowledge related to prominent issues in strategic asset management. There are four streams of research and development activities in the three-year project (surveys, case studies, research activities and guidelines). The deliverables for each stream are as follows: surveys of tools and techniques currently available in practice; case studies in asset management at the partnering organizations and in the industry; prototype decision support tools for predicting the deterioration of assets and for prioritizing maintenance projects and the development of a Generic information technology (IT) Framework; and guidelines and manuals that document the “state of practice” in strategic asset management. One of the deliverables for Year One of the project includes five case studies. This report provides an executive summary of the cases presented at the MIIP semi-annual meeting in Banff, Alberta in February 2004. The full case studies are available to the project partners on the MIIP website .

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Case Studies

The extent to which an organization strategically manages its assets follows a continuum that ranges from little or no use of asset management tools to a fully integrated asset management system. This continuum has been described as the six “whats” of asset management (Vanier, 2001) and is illustrated in Fig.1. As an organization matures in its approach to asset management it moves from left to right along the continuum. Each stage includes the activities of the previous stage until all six “whats” are incorporated into the asset management strategy. An organization can be in different places along the continuum for different types of assets. As an example, a municipality may have an advanced pavement asset management system but is still creating a basic inventory for its wastewater services. In fact, a municipality can be at different stages in the continuum in different municipal regions for the same service (e.g. wastewater). The ultimate, and long-term, goal is to fully integrate all municipal infrastructure assets into one asset management system (AMS). Condition Assessment (CA) What is its condition? What is the remaining service life? Basic Inventory What do you own? What is it worth?

Fully Integrated Asset Management

Mature AMS

No AMS

Maintenance Management System (MMS) What is the deferred maintenance? Strategic Asset Management What will you fix/replace first?

Fig. 1. Strategic Asset Management Continuum The MIIP members are at various stages along the continuum. The case studies presented herein demonstrate the development of asset management in the partner municipal organizations. In total, five members of the consortium have contributed case studies for this report. They are the Regional Municipalities of Durham and Halton, the Cities of Edmonton and Hamilton and the Department of National Defence (DND).

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2.1

Developing a Strategic Asset Management Plan for the Region of Durham’s Pumping Stations: A Workable Approach

This case was presented by the Regional Municipality of Durham (Durham). Durham is approximately one third of the way along the continuum in its strategic asset management planning, midway between the MMS and CA stages. Durham is currently implementing a program to develop an overall management plan for its assets (Ho, A., and Himanen, J., 2004). 2.1.1

Objectives

The Region of Durham wanted to develop a life-cycle based Asset Management Plan (AMP) to ensure the operational and financial sustainability of its pumping station infrastructure. It was important that the AMP incorporate detailed assessments of the physical operating condition of its pumping station assets and provide senior managers with the meaningful tool they needed to take a strategic perspective in managing the performance of their facilities. The objective was to develop the plan such that it could be used as a protocol for the development of an overall AMS for the Region. 2.1.2

Approach

The Region of Durham owns and operates 69 major sewage and booster pumping station facilities located throughout the Region. It was determined that the main focus of the AMP had to be on developing a reinvestment profile for each of the pumping stations. To accomplish this, the development of the AMP was divided into five major phases, more or less corresponding to the continuum discussed earlier: asset inventory including defining, grouping and cataloguing the assets; asset valuation; condition assessment including determining and recording the operational condition and performance of the assets; reinvestment requirement to achieve sustainable assets; and life cycle reinvestment profile. The asset inventory component included facility audits of all pumping stations. Each audit consisted of detailed inspections of the existing building condition, mechanical components, electrical instrumentation and services as well as a site inspection. All of the collected data were grouped, catalogued and entered into a Municipal Infrastructure Data Standard (MIDS) compliant, Microsoft Access database called the Facility Asset Management System. The second phase of the AMP consisted of determining the current replacement costs and book values for the pumping stations. Two approaches were used to determine replacement costs. The first method used multiple regression curves developed from historical construction costs of similar capacity stations. The second method determined replacement costs by calculating the sum total of the replacements costs of all assets within each station. Condition assessment involved establishing condition ratings for each asset based on the following criteria: age, visual inspection, maintenance history, service conditions, design service life and compliance to applicable codes and regulations (e.g. building and fire codes, occupational health and safety, etc.) A failure risk impact rating was also included in this phase B-5123.5

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of the plan. The reinvestment required for each asset was then determined by first defining the best practices for maintaining and enhancing asset value and then generating reinvestment costs based on the requirements for minor and major maintenance, rehabilitation and replacement. Finally, a life-cycle reinvestment profile was developed for each facility. The profile serves two purposes. It provides the Region with a forecast of annual maintenance, rehabilitation and replacement costs for each asset over a 25 year planning horizon. It also provides the Region with an opportunity to assess the impact of strategic planning and growth-related capital expansion on each facility’s operating and maintenance requirements. 2.1.3

Results

The project began in early 2003. At the time of reporting, the development of the AMP was completed for the pumping stations. The next stage of the project involves completing an inventory assessment on all of the Region’s water and wastewater assets using the AMP developed for the pumping stations as the framework. Critical data management challenges include ensuring that the continued implementation of the AMS is fully integrated with the Region’s computerized maintenance management system (Avantis), the master planning process, water and wastewater modelling and financial accounting systems. The AMP will eventually form the foundation for implementing an IT-based Region-wide AMS for all water and wastewater infrastructure. 2.2

Pilot Implementations of an Integrated Decision Support System for Infrastructure

This case was presented jointly by the City of Hamilton (Hamilton) and DND (Davis, G., and Ammouri, R., 2004). 2.2.1

Objectives

Both Hamilton and DND have implemented CA programs; however, they face the challenge of organizing dispersed sets of databases and systems to extract the relevant information required for long term capital improvement planning. In addition, both organizations are coping with aging infrastructure at a time when there is ever increasing competition for budget dollars. The objective of this study was to demonstrate how an Integrated Decision Support System (IDSS) can be implemented and utilized to generate prioritized capital improvement plans with the funds available while maintaining an adequate level of service. Integration is very important as it can confirm the timely replacement of one network section (e.g. sewers) to ensure that it can be coordinated with the rehabilitation or replacement of another network (e.g. roads). 2.2.2

Approach

Dillon Consulting Limited (Dillon) and Harfan Technologies (Harfan) were retained by both DND and the City of Hamilton to undertake pilot projects for the implementation of an IDSS for public infrastructure. The southern portion of the HMC Dockyard (Halifax) was chosen as the location for the DND pilot while Hamilton chose a portion of the fully urbanized downtown core, referred to as “Mini-Ville”. Infrastructure within the study areas included buried services, water distribution, sanitary and storm sewers, roads and steam lines (steam lines for DND only). Each project considered individual network performance and then integrated these networks.

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The methodology in both pilots involved five key steps: assemble background data to validate “What do you own, what do you know about it and what is it worth?”; condition assessment and the transfer of the data to the Harfan Asset Management System (HAMS); determine the remaining service life for each infrastructure family using statistical analysis of defects, development of deterioration curves and comparison with industry standards for acceptable levels of service; develop an infrastructure plan to show the integrated condition of the targeted networks; and determine what needs to be done to operate, maintain, rehabilitate and replace networks including “what if” scenarios and the production of a general work plan with scheduling, recommended techniques and costs. 2.2.3

Results

Several challenges were encountered in implementing the pilot projects. These included gaps in historical data for network inventories and difficulties in the conversion of geospatial data due to poor data structure. Where there were data gaps, assumptions were made based on the available data to complete the inventory. To solve the conversion problems, the geospatial data were manipulated to create a new database. In order to determine remaining service life, the small sample and the lack of historical inventory records also meant that the data needed to be complemented by deterioration models from other projects and organizations so that deterioration curves could be developed. Once steps one through three were completed, the Harfan Integrated Engineering Management System (IEMS) was used to identify the interaction between infrastructure networks, prioritize improvements and determine the costs of various alternatives to implementing the requirements; thus, providing the asset manager with an integrated solution. The piloted IDSS allowed for the analysis of assets based on the actual condition and also on the predicted condition by identifying windows of opportunity (maintenance, rehabilitation or replacement) along the deterioration curves. The IDSS predicted that a funding scenario of 2.5% of total replacement value was required to maintain the condition of all networks at a fixed level of service. By integrating the subsequent capital improvements plans, the IEMS demonstrated a potential savings of 7.5% of the total replacement value over the next 20 years compared to the non-integrated strategy. The information needed by asset managers is frequently stored in a variety of formats and found at many locations. In order to make decisions, the manager must combine all of the information and endeavour to determine the most cost-effective solution that will most benefit all public infrastructure networks. The joint Hamilton and DND pilot study identified the benefits of utilizing an IDSS to define an optimal capital improvement plan for public infrastructure. It enabled both organizations to recover sources of data that had not been fully used to their potential, to acknowledge the condition and remaining service life of existing networks, to build a capital plan that considered the geospatial relationships for the various networks and to provide capital savings by optimizing the capital improvement plan.

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2.3

Utilization of Closed Circuit Television Inspection (CCTV) for Wastewater Infrastructure

This case was one of two presented by the Regional Municipality of Halton (Halton) (Lindschoten, G., and Szilagyi, J., 2004). Halton is at the far right of the asset management continuum described earlier having an established, pro-active strategic asset management program for its water and wastewater assets. 2.3.1

Objectives

Halton has been using Closed Circuit Television (CCTV) inspections to assist with maintenance, design and to identify long and short term needs of its underground wastewater collection system since the 1970’s. The early reports were paper documents containing still photographs depicting the general pipe conditions. This documentation was later enhanced to include full-length video of the actual pipe inspection. A detailed analysis of the existing CCTV inspection process was conducted in the 1990’s. Several shortcomings were identified in the analysis of the existing CCTV inspection process: several groups had responsibility for ordering the CCTV inspections; the videotapes and hard copy reports were stored at different locations; the system was not integrated with the corporate Geographic Information System (GIS) infrastructure data; and actual pipe condition ratings varied because of differing interpretations of the pipe condition by the individual pipe inspectors. This review indicated that there was a need to enhance, standardize and streamline the existing data collection process. Consequently, an integrated, automated system was proposed. The main objective of this project was to ensure that there was consistent, reliable, and functional data available and accessible to support the decision making process. A review of the systems and software available on the market was conducted to see if there was a system that could meet the specific needs of Halton and address the above shortcomings. The new system also needed to meet the following functional and business requirements: centralize the CCTV request order and tracking processes; link final reports and data to the GIS data; identify pipe deficiencies in a consistent manner; estimate the remaining service life of the infrastructure; identify upgrade/replacement options; help prioritize work order activity and schedule further inspections or evaluation; be able to link to the proposed computerized work management system; and allow remote access to the information. It was found that no such system existed; therefore, it was proposed to develop an “in house” system.

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2.3.2

Approach

The first step in automating the existing process was to scan all relevant paper documents (over 16,000). A database structure was developed that allowed Halton to recode the pertinent attribute information associated with each report. All required data fields were populated before any data was uploaded into the main system. A viewing component based on the Environmental Systems Research Institute’s (ESRI) Internet Map Server was developed that allowed users to navigate and query an interactive map of the Region. Data collection standards were implemented based on the Manual of Sewer Condition Classification from the UK Water Research Centre (WRc, 2001). This allowed Halton to collect survey data that were consistent in data collection methodologies and survey interpretation. A detailed Request for Proposal (RFP) process was implemented to find contractors capable and qualified to inspect pipes using the WRc protocols. The data collection system was re-designed to include algorithms and weighting factors to convert the descriptive data developed from the WRc codes into pipe condition states. The new system also had a functionality that linked the calculated pipe condition score to the GIS data sets so that a thematic map of the network could be produced that would: highlight geographic locations with high condition rating scores (i.e. poor condition); assist in the prioritization of the capital works programme; and illustrate trends in pipe conditions over time. The entire system was web-based so that current and historical data could be entered and accessed from any location. In place of using VHS format CCTV, contractors were requested to supply digital videos using MPG1 (shortened version of MPEG or Motion Pictures Coding Experts Group) format. 2.3.3

Results

Several challenges were identified and resolved throughout the implementation of the new integrated, automated system. These included ensuring that the inspection data were correct and complete, correcting a “drifting” or time lag between the observed WRc inspection time and the recorded digital video time, and improving the efficiency of importing data into the system. These issues were resolved by incorporating quality control checks within the various applications developed for the system. The primary goal of Halton was to become more proactive with respect to planning the replacement of the mains within the wastewater network. This ensured better management of resources, eliminated costly reactive and emergency repairs and associated downtime, and allowed information to be retrieved by operational staff in a timely, effective manner. In addition, the returns on investment were improved due to prolonging the service life of pipes in the wastewater system. The project involved a systematic approach to the inspection programme. The comprehensive analysis resulted in the ability for collected data to be organized and stored within a custom SQL database created specifically to allow the ease of retrieval and updating of information. The system has added value in that it allowed for the identification of maintenance and capital needs required on each main inspected on both a network and project level. Having taken these initial steps to evaluate the condition of the existing wastewater network, Halton will now determine the appropriate future steps needed to manage and best utilize the enormous quantity of data collected to further its strategic asset management. B-5123.5

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2.4

Halton Region Facility Condition Assessments and Audits for Capital Planning

The second case presented by Halton extends the principles involved in the management of the wastewater system to facility condition assessment (Lindschoten, G., and Hribljan, M., 2004). 2.4.1

Objectives

Water and wastewater treatment plants as well as underground storage reservoirs located throughout the Region are part of the infrastructure Halton owns and operates. Combined, these assets have an estimated total replacement worth of $2.8 billion. A project was undertaken to develop a plan to effectively and efficiently upgrade the ageing infrastructure and process equipment at the water and wastewater plants and related facilities. The objective was to identify the capital upgrading needs at each facility and develop a long-term capital upgrade plan to be included in Halton’s Planning and Public Works 10-year Capital Budget. 2.4.2

Approach

A facility condition assessment requires expertise in the area of condition assessment, capital planning, risk analysis and analysis of performance data. Lack of staff and the need for diverse areas of expertise precluded an in-house solution, so external expertise was retained to assist Halton with the development of the plan. A systematic approach to conducting facility audits was used. This included background review, field investigations, data compilation and analysis and report preparation. The data collected were then organized and stored in a custom MS Access database created for the project to allow for ease of retrieval and updating of the information. Facility inspections were normally performed over a two to three week period after an initial kick-off meeting with key stakeholders (plant supervisor and operations and Regional maintenance staff) to discuss potential upgrade requirements. The audits consisted of detailed visual inspections of the existing condition for each building and site features as well as assessments of the process and building mechanical components, instrumentation and the electrical services/equipment. Evaluation of the condition of each structure, equipment and system was determined using the following criteria: age; visual inspection; maintenance history; service condition; background reports/data; industry accepted life expectancy; applicable codes and regulations; and potential impacts on health and safety. Condition ratings were described as Good, Fair or Poor where a rating of “Good” meant that no repair or replacement would be required within a 10-year period. A rating of “Fair” indicated that repair or replacement may be required but not immediately and “Poor” structures or equipment would require repair or replacement within the next two years.

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The report and presentation of the findings was separated into four broad areas: Building, Electrical & Instrumentation, Mechanical and Process. The first area, Building, consisted of the structural and architectural building components as well as site work. The second area, Electrical & Instrumentation, consisted of primary and secondary power distribution systems as well as process and buildings related electrical devices and instrumentation. The Mechanical area included heating, ventilation, air conditioning and other building equipment/systems. The last area, Process, included equipment related to plant operations and systems. Custom reports were created that allowed users to query and report the capital and maintenance needs by facility or plant. The functionality of the database allowed users to print project forecast lists and identified short (0-2 years), medium (2-5 years) and long-term (5-10 years) upgrades at each facility, along with capital and/or maintenance cost estimates, engineering and safety regulations, and operation and maintenance requirements. Identified works were classified as either maintenance or capital projects. The low cut-off for capital projects was set at $50,000. Projects below this amount that could be completed by maintenance staff were classified as maintenance. The project was carried out in three phases. In Phase I, two wastewater treatment plants (WWTP) and one water purification plant (WPP) were selected to establish the assessment and reporting protocol for similar investigations of the remaining facilities. Phase II included an additional six WWTP and WWP facilities. In the third and final phase, the program was extended to include over 125 submerged concrete structures, 12 wells, over 90 pumping stations and over 10 water booster stations. 2.4.3

Results

Through the assessments, over 100 capital projects were identified (total value of $29 million) along with numerous smaller upgrades identified under the maintenance category. The capital and maintenance works identified in the reports were put through an internal review at Halton along with other project and upgrade needs. From this review, upgrade and replacement priorities were set for Halton’s plants. The overall deficiencies identified in the audit indicated a funding shortfall of over $4.5 million annually. This shortfall was accommodated through a rate increase, moving Halton closer to providing the minimum level of investment recommended by some government agencies of 2% per year of total asset value for infrastructure renewal (NRC US, 1996). Through this project, Halton was able to meet its goal of becoming more proactive with respect to the planned replacement and upgrading of assets in order to better manage limited financial resources, eliminate costly reactive and emergency repairs and associated downtime, and to prolong the remaining service life of buildings, structures and equipment. The audits have been successful in providing Halton with upgrade plans for the improvement of works for the next 10 years. Thus, the Halton can more effectively budget and allocate resources to maintain operations at its water and wastewater treatment facilities and to justify the increased capital and maintenances funding that will be required as the infrastructure ages. The project also serves as a template for all future plant assessments to be performed throughout the Region.

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2.5

Asset Accounting

This case was presented by the City of Edmonton (Edmonton) and illustrates the steps and challenges involved in implementing an asset accounting system (Fechner, F., 2004). 2.5.1

Objectives

Traditionally, North American municipalities have not accounted for their infrastructure assets in any great detail. As a result of recent recommendations of the Public Sector Accounting Board (PSAB) (CICA, 2003) in Canada and the new directives set forth by the Governmental Accounting Standards Board (GASB) Statement 34 in the U.S., municipalities are beginning to make changes to asset accounting methods and to the way they report the value of infrastructure assets. Consequently, Edmonton wished to implement a Capital Assets accounting system. The objectives of the system were to identify specific asset costs, determine asset life and asset depreciation for Drainage Services. The asset accounting system would then be used as a component of the utility rate and the asset management system. 2.5.2

Approach

Asset accounting is the tracking of an asset from the beginning of the asset life to decommissioning. It involves accounting for asset additions and retirements, knowing the asset costs and the life expectancy. In the case of infrastructure, asset life begins at the study or concept design phase and concludes when the asset is permanently “retired” or removed from the inventory through sale, abandonment or demolition at or before the end of the asset’s productive life. Through asset accounting, a municipality is able to: track individual assets; set depreciation and utility rates to comply with accounting practices; provide detailed information to assess future funding requirements; and establish an information base for general planning. Edmonton chose to initiate asset accounting by developing an asset accounting system for its Drainage Services section. Drainage Services is part of the Edmonton Asset Management and Public Works Department and comprises a Collection and Transmissions System (CTS), and a WWTP. The CTS collects sanitary and land drainage flows through sanitary, storm and combined collection systems. The planning, constructing, operating and maintaining of the system is the responsibility of Drainage Services. Assets may be acquired through purchase, construction or may be given to the department. Currently, high-level asset costs are available for the CTS and WWTP but detailed asset-costing information is not readily available. Detailed information includes new construction costs, replacements costs, operating and maintenance costs, asset life and asset inventory attributes. This information is necessary if Drainage Services is to undertake cost of service studies, life cycle costing and risk analysis. A cost of services study done for Drainage Services made the following recommendations with regard to the implementation of an asset accounting system: a detailed plant inventory be established and each asset within the inventory should include cost requirements and asset life; B-5123.5

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the plant inventory system be able to track asset additions, retirements and depreciation; and a study be undertaken to determine the accurate value of assets. Edmonton used group accounting rather than item accounting to track and account for its assets. Group accounting allows for assets to be grouped into homogenous groupings based on functionality and useful life. The grouped assets are then treated as if they are one asset The difference between group and item accounting is that group accounting has no gain or loss recognized at retirement. Similar assets, generally alike in character and used in the same manner with common forces acting on them, are placed into asset groups and depreciated. It was important that asset accounting align with other internal systems such as those used to track the number and physical location of assets or those used to track plant maintenance. Secondly, asset definitions were required for each item. As an example, a sewer pipe was defined by its material, diameter, length and waste type. Historical costing information was also required. Finally, standardized asset forms that record each asset needed to be developed and the procedures to record and account assets needed to be reconciled. The implementation of Asset Accounting for Drainage Services also had to consider that other Edmonton departments would eventually implement asset accounting. Therefore, a flexible but standard structure that all departments could use needed to be developed. A hierarchy was created that consisted of general ledger accounts, which broke down into sub-ledgers by functionality (e.g. WWTP) comprising in turn, individual asset records (e.g. individual WWTP components). Each lower level can be rolled up into the next level in the Edmonton Balance Sheet. 2.5.3

Results

Several software packages for asset accounting were evaluated. SAP Asset Accounting was chosen for the following reasons: ease of integration with Edmonton’s current financial system (also SAP); reduced learning curve for SAP since it was already in use; technical support already in place; group accounting principles are used in SAP; and ability to work with other SAP applications such as plant maintenance module. Once the software was selected, an Asset Accounting blueprint document and project charter were created to provide the design and framework for implementation. The Asset Accounting was then introduced over a period of one year for a total project length of 18 months. The design and configuration was documented inside the Asset Accounting software and also made available on the Edmonton website. To determine the historical cost of an asset, historical costs needed to be estimated from replacement costs and a price index. These costs were then loaded into Asset Accounting and they represent the cost of the Embedded Plant (CTS and WWTP currently in service and not originally recorded in Asset Accounting). The implementation had to take into account the future introduction and use of Asset Accounting in other departments. Consequently, a flexible structure was developed to enable all departments to use and configure Asset Accounting B-5123.5

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separately while maintaining a citywide hierarchy. Finally, training on the Asset Accounting system was provided to all staff. There are limitations to Asset Accounting. Since it is primarily a costing tool, it does not focus on physical attributes. Thus, it only records attributes such as location. It also records diameter and material for sewer pipes. This limits the detail of an asset cost analysis. It can be used to determine costs per metre of pipe and to track assets in new developments. Asset Accounting will eventually be a central place for Drainage Services to look for costing information on all assets. 3

Acknowledgements

The authors would like to thank our MIIP partners who contributed the case studies. In particular, Dr Rima Ammouri (DRAP 2, Department of National Defence); Gerry Davis (Hamilton); Alfred Ho, John Himanen and John Presta (Durham); Geoff Linschoten, Michael Hribljan and Jozef Szilagyi (Halton); and Konrad Siu and Franck Fechner (Edmonton). In addition, NRCC would like to thank the members of the MIIP Consortium for their continuing support of this initiative, specifically: the Cities of Calgary, Edmonton, Hamilton, Ottawa and Prince George, the Regions of Durham, Halton and Niagara and the Department of National Defence. 4

References

CICA (2003) Accounting for Infrastructure in the Public Sector, Canadian Institute of Chartered Accountants, Toronto, ON. (December 2003). Davis, G., and Ammouri, R. (2004) Pilot Implementations of an Integrated Decision Support System for Infrastructure, MIIP semi-annual meetings, Banff, 19-20 February 2004. Fechner, F. (2004) Asset Accounting, MIIP semi-annual meetings, Banff, 19-20 February 2004. GASB (2002) Governmental Accounting Standards Board, (December 2003). Ho, A., and Himanen, J. (2004) Developing a Strategic Asset Management Plan for the Region of Durham’s Pumping Stations: a Workable Approach, MIIP semi-annual meetings, Banff, 1920 February 2004. Linschoten, G., and Szilagyi, J. (2004) Utilization of Closed Circuit Television Inspection (CCTV) for Wastewater Infrastructure, MIIP semi-annual meetings, Banff, 19-20 February 2004. Linschoten, G., and Hribljan, M. (2004) Halton Region Facility Condition Assessments and Audits for Capital Planning, MIIP semi-annual meetings, Banff, 19-20 February 2004. NRC US (1996) Budgeting for Facilities Maintenance and Repair Activities, Standing Committee on Operations and Maintenance, Report 131, National Research Council , National Academy Press, Washington D.C. Vanier, D.J. (2001) Why Industry Needs Asset Management Tools. Journal of Computing in Civil Engineering, 15 (1) pp 35-43, January 01, (NRCC-44702) 14 July 2003. Water Research Centre (2001) Sewer Rehabilitation Manual, 4th Edition, WRc Publications, Marlow, U.K. B-5123.5

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Appendix I: MIIP Abbreviations AMP

Asset Management Plan

AMS

Asset Management System

CA

Condition Assessment

CCTV

Closed Circuit Television

CTS

Collection and Transmissions System

DND

Department of National Defence

ESRI

Environmental Systems Research Institute

GASB

Governmental Accounting Standards Board

GIS

Geographic Information System

HAMS

Harfan Asset Management System

IDSS

Integrated Decision Support System

IT

Information Technology

MIDS

Municipal Infrastructure Data Standard

MIIP

Municipal Infrastructure Investment Planning

MMS

Maintenance Management System

MPG

Shortened version of MPEG (Motion Pictures Coding Experts Group)

PSAB

Public Sector Accounting Board

RFP

Request for Proposal

SQL

Structured Query Language

WPP

Water Purification Plant

WWTP

Wastewater Treatment Plant

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