BC’S FIRST ASSET MANAGEMENT BYLAW: City of Courtenay leads by example
Note to Reader:
Two themes merge in the article that follows. One is asset management, whether for constructed infrastructure (e.g. roads, utilities) or the natural commons (e.g. streams, riparian corridors). The second theme is the Comox Valley as an ‘incubator region’ for putting fresh ideas and approaches into practice. Continue reading and you will learn about City of Courtenay leadership in adopting a bylaw that requires consideration of full life-cycle costs in its decision-making!
Context is everything. An issue confronting all local governments is the ‘unfunded infrastructure liability’, and how to pay for it. Significantly, all four Comox Valley local governments were early adopters of a vision for Asset Management for Sustainable Service Delivery. At the 2011 State of Vancouver Island Economic Summit, for example, the ‘forum within the summit’ showcased how Comox Valley local governments envisioned tackling the challenge. The forum within the summit was the catalyst for an Island-wide conversation about a whole-system approach to asset management.
DID YOU KNOW THAT: The initial capital cost of municipal infrastructure is about 20% of the ultimate life-cycle cost. The other 80% is the unfunded infrastructure liability. This is the 20-80 rule, the focus for the ‘Sustainable Service Delivery Forum’ within the 2011 State of the Island Economic Summit.
“A strong corporate culture creates the foundation for asset management that achieves the goals of Sustainable Service Delivery,” states CAO David Allen, City of Courtenay
Sustainable Service Delivery is the Singular Aim
Looking back, the arrival of David Allen in 2013 as Courtenay’s Chief Administrative Officer created the momentum necessary to move from awareness to action. A champion of Sustainable Service Delivery, David Allen presented a vision of what could be. Successive Councils embraced the vision. It has been a five year journey for Council and staff. Step by step, Courtenay has operationalized asset management (AM) organization-wide. In so doing, Courtenay has created the foundation for a corporate culture that would achieve the goals of Sustainable Service Delivery.
In setting out to create an AM culture, the City discovered that a ‘Condition Assessment’ of its staff was necessary, too. The City’s ‘Condition Assessment’ of their people (the who, where, what, how, etc.) proved to be achievable using conventional human resources practices. The process also required thinking broadly to imagine some new form of organizational structure that would support the singular aim of Sustainable Service Delivery. Under the new structure, working groups are organized in terms of future, present and past tenses. Courtenay implemented the new structure en masse in 2016.
The City of Courtenay’s sustained commitment to taking a transformational idea and bringing it to fruition in the form of the AM bylaw personifies what this saying means in practice: A vision with a task is the hope of the world.
City of Courtenay is Leading by Example
“Municipal asset management – the maintenance of infrastructure large and small, including roads, utilities, and facilities – is one of a local government’s most significant responsibilities,” states David Allen, the City of Courtenay’s Chief Administrative Officer.
David Allen has served as Co-Chair of the Asset Management BC Community of Practice since 2011, He has played a leadership role in advancing the vision and implementation program for Asset Management for Sustainable Service Delivery: A Framework for BC, released in December 2014, and updated in 2019. Therefore, it is no surprise that Courtenay is leading by example.
To recognize the central role of asset management in its operations, the City of Courtenay has become one of the first municipalities in Canada, and the very first in B.C., to enshrine its asset management program in a formal bylaw.
Political Commitment to “Get it Right”
“Asset management has been a top strategic priority for Council and staff for several years,” says Courtenay Mayor Bob Wells. “We’re pretty proud of our progress. We’ve moved steadily towards a proactive maintenance model, which we know is actually more cost-effective in the long run than costly and unexpected reactive repairs.
“It is our responsibility to maintain these essential assets; our citizens depend on these services. Establishing this in a formal bylaw reflects how important this is, not only for our current residents, but as our commitment to future generations as well.”
Goal is “Sustainable Service Delivery”
“A number of Canadian jurisdictions have adopted plans and policies on asset management. The City of Courtenay previously adopted an asset management policy in 2015,” continues David Allen. “The policy set guidelines for implementing organization-wide Asset Management processes to meet the asset-intensive Sustainable Service Delivery needs of the City.”
“The bylaw takes the policy one step further, and formally stipulates that decisions on the renewal, upgrade, and acquisition of the City’s assets must consider the full cost throughout the expected lifespan of the asset. As infrastructure ages, maintenance costs typically increase. And failure to maintain assets can dramatically shorten their lifespans, potentially resulting in the need for costly upgrades.”
“The goal of asset management is achieving sustainable service delivery: ensuring that current community services are delivered in a socially, economically, and environmentally responsible manner that does not compromise the ability of future generations to meet their own needs.”
Umvelt, the German word for ‘environment’ or ‘surroundings’, is used to describe environmental factors that are capable of affecting the behaviour of an animal or individual.
“Although the surrounding environment is common to all, each organism experiences the environment in a different way. Applied to asset management, this means that the Umvelt is larger in scope than the triple bottom line. We cannot look at individual municipal services in isolation. Asset management is about a much bigger Umvelt. It is a ‘systems thinking’ method applied to organization-wide problem solving,`concludes David Allen.
Breaking New Ground to Establish ‘A BC First’
“The Asset Management Bylaw is the first in British Columbia. Therefore, it was critical to carefully draft the content so it will: rest upon a solid legal foundation; stay within Council’s authority; be readily understood and ensure it will be consistent with existing legislation and other City bylaws and policies,” reports David Love, Courtenay’s Senior Advisor for Strategic Initiatives. He and David Allen have been an ‘asset management team’ for over a decade.
Start with a Solid Legal Foundation
“In March 2019, a Council Resolution had directed staff to develop the bylaw. The first step in our research to meet the Resolution was to identify the distinction between a policy and a bylaw. This was particularly important because there is little experience across Canada, and none in BC, at writing an Asset Management bylaw.
“In consultation with the City legal advisors, staff proposed various means to satisfy Council’s intent. After much discussion, the legal foundation and scope of Council’s authority were identified. Unfortunately, the aim of achieving bylaw simplicity was partially confounded because certain concepts either contained within the existing Policy or others newly desired, have not been defined in existing law.
“This included Council’s direction to require consideration of full life-cycle costs in its decision-making, the notion of using natural assets where possible as an alternative to constructed assets, or practicing ‘Asset Management for Sustainable Service Delivery’ in accordance with the BC Framework.”
“These issues were overcome by defining the terms within the bylaw – thus adding minimal complexity to its understanding – and assigning appropriate responsibility to meet them within the Bylaw.
“Overall, this bylaw assigns the practice of Asset Management principles and advice related to Council decision-making to the CAO and staff. Internally, staff operational responsibilities are assigned via CAO Directives.
“The Council role is to receive and consider the information and advice, then express their collective decisions via adoption of strategic priorities and approval of the five-year financial plan.
“In Courtenay, the use of modern technology and new techniques for asset management has already begun to provide benefits. As of 2017, Courtenay’s capital budget is based on up-to-date detailed information on what assets have failed, and which are projected to fail within two years.”says David Love.
“The city is developing a computerized system to help operate all the existing assets for the longest possible duration and the lowest possible cost over their lifespan. Practicing asset management involves identifying all the renewal needs of our assets, planning these renewals to avoid disruption of service, and devising a long-term financial strategy to pay for it.”