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HomeMy WebLinkAbout2018-PAD-073 Asset Management COUNTY OF NEWELL - POLICY HANDBOOK POLICY NO: 2018-PAD-073 TITLE: ASSET MANAGEMENT ADOPTED: July 19, 2018 (C-220/18) SUPERCEDES NO: n/a TO BE REVIEWED: PAGE NO: 1 of 4 1 POLICY PURPOSE To establish the County’s commitment to asset management and provide a set of principles to guide the development and implementation of an Asset Management System in such a way that it is coordinated, cost-effective and organizationally sustainable. 2 DEFINITIONS 2.1 Assets – an asset is an item, thing or entity that has potential or actual value to an organization. The value can be tangible or intangible, financial or non- financial and includes consideration of risks and liabilities. 2.2 Asset Management – is the coordinated activity of an organization to realize value from assets. It encompasses all asset types, tangible and intangible, individual components or complex systems, and all activities involved in the asset’s life cycle – everything from initial identification of requirements or opportunities, acquisition/creation, operations, asset care/maintenance responsibilities through to retirement/disposal. 2.3 Asset Management System (AM System) – (as defined in ISO 55000) is a management system for asset management. The AM system should be able to accommodate the various levels at which asset unit may be managed, ranging from the operational level where discrete assets are managed up to the corporate level where integration across asset systems, networks or portfolios is desired. 2.4 Asset Management Strategy (AM Strategy) – defines the County’s high level long term approach to asset management. Its purpose is to: define the scope of the AM System; identify internal and external stakeholders and how they will be engaged; document the corporate level Asset Management Objectives (AM Objectives) and describe the role of asset management in achieving Council’s priorities; document asset management Governance Structure within the County; define the process for review and continuous improvement of the AM system; and inform the approach for developing Asset Management Plans (AM Plans). 2.5 Asset Management Framework (AM Framework) – sets out the principles of the AM System and provides guidance for its implementation, operation, and maintenance, It defines: the detailed components of the AM System; the COUNTY OF NEWELL - POLICY HANDBOOK POLICY NO: 2018-PAD-073 TITLE: ASSET MANAGEMENT ADOPTED: July 19, 2018 (C-220/18) SUPERCEDES NO: n/a TO BE REVIEWED: PAGE NO: 2 of 4 functional relationships between the components and with other organizational management systems; roles and responsibilities for components of the system and for reviews and performance reporting; criteria for decision-making, prioritizing, and criticality assessments; and references other framework and asset management guidance documents. 2.6 Asset Management Plan (AM Plan) – long term (20 year) plan that details the assets, activities and programs for each service area, and the resources required to provide a defined level of service in the most cost-effective way. 3 POLICY STATEMENT The County of Newell will: 3.1 Establish, implement, maintain, and continually improve an AM System in alignment with ISO 55000, 55001, and 55002 Asset Management Standards. 3.2 Develop a strategic AM Plan and integrate this plan with the annual budget and annual reports. An AM Strategy and AM Framework should be detailed in the AM Plan. 3.3 Maintain and manage assets at defined levels to support public safety, community well-being and community goals. 3.4 Monitor standards and service levels to ensure that they meet/support community and Council goals and objectives. 3.5 Establish infrastructure replacement strategies through the use of full life cycle costing principles. 3.6 Plan financially for the appropriate level of maintenance of assets to deliver service levels and extend the useful life of assets. 3.7 Plan for and provide stable long-term funding to replace and/or renew and/or decommission infrastructure assets. 3.8 Make informed decisions, identifying all revenues and costs associated with infrastructure asset decisions, including additions and deletions. 3.9 Establish organizational accountability and responsibility for asset inventory, condition, use and performance. COUNTY OF NEWELL - POLICY HANDBOOK POLICY NO: 2018-PAD-073 TITLE: ASSET MANAGEMENT ADOPTED: July 19, 2018 (C-220/18) SUPERCEDES NO: n/a TO BE REVIEWED: PAGE NO: 3 of 4 3.10 Consult with stakeholders where appropriate. 3.11 Use available resources effectively and minimize total life cycle costs of assets. 3.12 Manage corporate assets to minimize risks to users and risks associated with failure and optimize benefits to citizens. 4 POLICY ON THE KEY PRINCIPLES OF ASSET MANAGEMENT 4.1 To effectively use Asset Management to support achievement of the County’s organizational goals, the following principles are to be applied within the County’s AM System: a) Holistic – take a comprehensive approach that looks at the “big picture” (i.e. the combined implications of managing all aspects rather than a compartmental approach). This includes the functional interdependencies and contributions of assets within asset systems and the different management of assets across all lifecycle phases. b) Systematic – take a methodical approach (i.e. formal, repeatable, and consistent) to the management of assets. c) Systemic – make asset investment decisions in an asset system context, not just to optimize the individual asset itself. d) Risk-based – manage asset risk associated with attaining levels of service and focusing resources, expenditures and priorities based on risk and associated cost/benefit. e) Optimal – make asset investment decisions based on trade-offs between the competing factors of service level (including asset performance), risk and cost. f) Sustainable – take a long-term, lifecycle-based approach in estimating asset investment and activities, thus developing effective asset management strategies for the long term. g) Integrated – coordinate the above principles to ensure the delivery of justified services and well-defined outcomes. COUNTY OF NEWELL - POLICY HANDBOOK POLICY NO: 2018-PAD-073 TITLE: ASSET MANAGEMENT ADOPTED: July 19, 2018 (C-220/18) SUPERCEDES NO: n/a TO BE REVIEWED: PAGE NO: 4 of 4 h) Aligned – ensure that the AM System complements the strategic objectives of the County, as well as other key business systems, legislation and regulation. 5 ROLES & RESPONSIBILITIES ROLE RESPONSIBILITY Adopt an asset management policy and establish levels of Council service Monitor and review infrastructure standards and levels of Council, CAO and Staff service as established Develop and maintain asset inventories Directors & Finance Assess infrastructure conditions Directors Establish and monitor infrastructure replacement levels Directors & Finance and needs through asset inventory data set Develop and maintain financial plans for the appropriate Directors & Finance level of maintenance, rehabilitation, extension and decommission of assets Report on infrastructure assets and asset management Directors & Finance program 6 RISKS OF NON-COMPLIANCE Failure to adhere to this policy may result in: 6.1 The risk that the County is not investing in safe and reliable infrastructure at the most optimal times in the asset’s lifecycle. This risk potentially compromises the safety and service delivery provided by the County’s infrastructure. 6.2 The risk of sub-optimal planning for growth, maintenance and replacement of existing assets and the development of new assets. This risk potentially compromises the County’s ability to meet expected levels of service. 6.3 The risk of conflicting department investment priorities, poor coordination of service delivery, corporate inefficiencies, and lack of expenditure optimization. 6.4 Capital plans that are inconsistent with the needs identified in the asset management plans, thus increasing the infrastructure gap. This risk potentially compromises the alignment of infrastructure, financial, and land-use goals and objectives and the ability to achieve sustainability goals.