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Mono’s non-core assets could cost $105,000 per household

July 25, 2024   ·   0 Comments

Written By James Matthews

Mono is on its way to having a clear picture of its core and non-core assets that will lead to a financial strategy to maintain them into the future.

Peter Simcisko, a managing partner in municipal finance at Watson and Associates Economists, presented Mono’s asset management plan for non-core assets when council met on July 16.

Aside from being required by the province to have such a plan, asset management ensures a level of service framework for tracking performance and setting future targets. It also helps the town determine the level of annual capital investment to maintain the current service level.

“It establishes some preliminary funding targets,” he said. “In terms of the funding that would be required to sustainably manage these assets over their full life span.”

Infrastructure is always aging, he said. At some point, it requires full replacement or rehabilitation renewal.

“The purpose of an asset management plan is to lay that out,” Simcisko said.

A management plan for core infrastructure assets was developed in June 2022 with the non-core asset plan completed by July 2024. The final step is for the municipality to have a management plan for all infrastructure assets by July 2025.

That final phase will include a 10-year forecast of lifecycle activities related to all infrastructure assets to achieve the target level of service.

The completed three-phase plan is a financial strategy that will outline how the municipality plans to support that forecasted lifecycle and long-term funding requirements.

Watson and Associates have been involved with Mono’s planning since the beginning.

“The final phase of this project, the development of the asset management plan, is where this is going to turn into a full plan,” Simcisko said.

Asset management planning becomes a balancing act between the level of service a municipality aims to provide and the financial requirements to do that and bring those two facets into balance.

“That financial component and the identification of those proposed levels of service is something that’s going to be developed over the next six months to a year,” Simcisko said.

So far, it’s been determined that Mono has $335-million in infrastructure assets, Simcisko said. And that equates to an investment of about $105,000 per Mono household for replacement costs. He said that’s about in line with other municipalities they’ve worked with.

About $43-million of that tally is related to non-core assets such as its vehicle fleet and equipment, land improvements, and transportation assets. The greatest share of that purse is related to municipal facilities.

“There are about 11 facilities included in the plan valued at $14.2-million,” he said. “That represents about a third of the replacement costs of the non-core assets.”

Replacement costs for the vehicle fleet and equipment have been pegged at about $11-million.

The plan’s second phase reviews the condition of the municipality’s non-core assets. He said a formal assessment of the condition of the town’s facilities has never previously been done.

“From time to time, municipalities do undertake formal building condition assessments which require specialists’ expertise to come and look at the buildings and establish what the current condition and remaining useful life of individual components from the roof to the flooring, interior finishes would be,” he said.

Mayor John Creelman asked about how Mono stacks up against other municipalities of comparable size regarding the condition of assets.

Simcisko said that would be a tough comparison to make at this stage in the process.

“As we’re seeing these asset management plans come forward now, I think we’re expecting to do a bit more work around that benchmarking piece, see how municipalities compare in that regard,” Simcisko said.

“When we look at the condition profile based on age, there isn’t anything alarming there. If that helps to answer the question. I think we’ve seen and worked with municipalities that have a lot more of their assets that are beyond their useful life expectancy.”

“It strikes me that the lifecycle process is fairly arbitrary in terms of determining a particular asset has a lifecycle,” Creelman said. “We all know that cars and various things have a lifecycle, but we all drive them well beyond the lifecycle.

“We make do with what we have for as long as we possibly can.”

Creelman said it seems the management plan process is heading toward a day when the provincial government is going to demand that municipalities spend money.

“And they are going to order us to spend money to keep our facilities in the excellent, good, and even fair range as opposed to the determination of them being poor,” he said.

Creelman fears the provincial government will insist municipalities spend a specific amount of money annually.

“I don’t believe we have seen any indication to date that the province is intending on setting targets for municipalities,” Simcisko said.

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