[00:00:02]
>> IT IS 12:01, AND WE'LL BEGIN OUR MEETING.
JUST WANTED TO START WITH THAT THE CITY OF YELLOWKNIFE ACKNOWLEDGES THAT WE ARE LOCATED IN [INAUDIBLE] TERRITORY.
FROM TIME IMMEMORIAL, IT HAS BEEN THE TRADITIONAL LAND OF THE YELLOWKNIFE DENE FIRST NATION, AND MORE RECENTLY, THE HOMELAND OF THE NORTH SLAVE METIS.
WE RESPECT THE HISTORIES, LANGUAGES, AND CULTURE OF FIRST NATION'S METIS INUIT AND ALL FIRST PEOPLES OF CANADA WHOSE PRESENCE CONTINUES TO ENRICH OUR VIBRANT COMMUNITY.
FIRST, WE HAVE DISCLOSURE OF PECUNIARY INTERESTS.
OUR TOPIC TODAY IS ON ASSET MANAGEMENT.
WE BEGIN WITH THE PRESENTATION REGARDING ASSET MANAGEMENT.
[2. A presentation regarding Asset Management.]
OVER TO YOU. MS. BASSI-KELLET.>> THANK YOU VERY MUCH, MADAM CHAIR, AND WELCOME EVERYBODY TO THE MAY EDITION OF THE COUNCIL ADMINISTRATION ROUNDTABLE.
WE ARE SUPER THRILLED TODAY TO BE ABLE TO PROVIDE AN OVERVIEW OF THE WORK THAT'S BEEN UNDERTAKEN TO-DATE ON ASSET MANAGEMENT.
COUNCIL MEMBERS WILL RECALL YOU'VE SPENT TIME THINKING ABOUT THIS, DIRECTING ADMINISTRATION TO DEVELOP AN ASSET MANAGEMENT ROADMAP, WHICH WE DID WITH SOME SUPPORT FROM CONSULTANTS.
WE HAVE HIRED OUR MANAGER OF ASSET MANAGEMENT, AND THERE'S BEEN A LOT OF REALLY IMPORTANT WORK THAT'S GOTTEN UNDERWAY.
IT'S MY PLEASURE RIGHT NOW TO TURN THINGS OVER TO LACHLAN MACLEAN.
LACHLAN IS OUR MANAGER OF ASSET MANAGEMENT.
HIS DIVISION IS LOCATED IN THE CORPORATE SERVICES DEPARTMENT OF THE CITY, AND THAT IS INTENTIONAL TO REFLECT THAT ASSET MANAGEMENT PERMEATES ALL AREAS WITHIN THE CITY.
IT'S SOMETHING THAT ALL DEPARTMENTS WILL HAVE A ROLE IN COLLABORATING WITH AND WORKING ON UNDER THE GREAT LEADERSHIP AND FACILITATION OF LACHLAN AND OF COURSE, THERE'S DIRECTOR SHAROLYNN.
I'LL TURN THINGS OVER RIGHT NOW TO LACHLAN WHO WILL BE WALKING US THROUGH THE PRESENTATION.
>> THANK YOU VERY MUCH. I WILL TURN ON MY CAMERA LATER.
IF I TRY TO DO IT [LAUGHTER] IT MIGHT MESS THINGS UP.
I'M GOING TO JUMP RIGHT INTO THE PRESENTATION, AND YOU'LL SEE MY SMILING FACE AT THE END.
TODAY, I'M GOING TO KICK OFF A PRESENTATION ON ASSET MANAGEMENT WITH THE MOST ASKED QUESTION ABOUT ASSET MANAGEMENT.
WHAT IS ASSET MANAGEMENT? THIS IS QUESTION IS A LITTLE BIT LIKE AN ONION; THERE'S A LOT OF LAYERS TO IT.
I'M HOPING TO PEEL BACK A FEW OF THOSE TODAY, AND I'M HOPING NONE OF YOU END UP CRYING.
WHEN PEOPLE TALK ABOUT ASSET MANAGEMENT AT MUNICIPALITIES, OFTEN THIS IS SOMETHING THAT THEY WILL GET THROWN OUT THERE.
THIS IS THE STANDARDIZED ASSET MANAGEMENT FRAMEWORK OF BRITISH COLUMBIA, AND IT'S REPRESENTED AS A DIAGRAM.
IT'S RIGHT IN YOUR FACE WITH TERMS ABOUT LIKE POLICIES, STRATEGIES, PLANS, PROCEDURES.
IT'S UNDERSTANDABLE TO FEEL INUNDATED BY THE TERMINOLOGY.
IN THIS PRESENTATION TODAY, I WANT TO APPROACH ASSET MANAGEMENT INDEPENDENT OF THE EXISTING IDEAS AND STRUCTURES, AND JUST DISCUSS CORE CONCEPTS AND WHY THEY ADD VALUE TO A MUNICIPALITY.
THEN FROM THAT BASE, I'LL GO THROUGH THE FORM THAT THESE CONCEPTS TAKE IN THE TERMS OF THE PROCESSES AND THE DOCUMENTS SO THAT WE'LL GET TO THE POINT WHERE WE MIGHT HAVE A BETTER UNDERSTANDING OF THIS FRAMEWORK.
BUT IT STARTS WITH THE CONCEPTS.
GETTING BACK TO THE QUESTION, WHAT IS ASSET MANAGEMENT? I'M GOING TO MAKE IT EASY. I'M GOING TO PROVIDE A DEFINITION.
A PRACTICE FOCUSED ON MAXIMIZING THE VALUE DELIVERED BY ASSETS.
THIS IS ASSET MANAGEMENT'S MISSION STATEMENT.
BUT LIKE ALL MISSION STATEMENTS, IT DOESN'T ACTUALLY TELL US MUCH ABOUT WHAT WE NEED TO KNOW.
FIRST OFF, WHAT IS THE CITY DELIVERING THAT SUPPOSEDLY HAS VALUE? SERVICES. THE PUBLIC PAYS A CITY, ALL CITIES, ALL MUNICIPALITIES TO PROVIDE VARIOUS SERVICES.
DRINKING WATER, TRANSPORTATION, ENFORCEMENT, RECREATION, CEMETERY, LIBRARY.
WE OWN ASSETS TO DELIVER THOSE SERVICES.
YOU SHOULDN'T OWN ANYTHING UNLESS IT'S HELPING US DELIVER THOSE SERVICES.
MANAGING ASSETS REQUIRES RESOURCES, AND IT INVOLVES RISK.
IT COSTS MONEY TO SUPPLY THOSE RESOURCES AND TO MANAGE THOSE RISKS.
YOU SEE THE LINKAGE HERE FROM SERVICES DOWN TO WHAT WE OFTEN TALK ABOUT AS THE BOTTOM LINE.
[00:05:04]
IF THE VALUE THAT WE DELIVER IS SERVICES, HOW DO WE MAXIMIZE THAT VALUE? WELL, FIRST WE HAVE TO ASK, WHAT ARE PEOPLE PAYING FOR? WHAT ARE THEY GETTING? THAT BRINGS US TO THE FIRST CORE CONCEPT I WANT TO DISCUSS TODAY, WHICH IS LEVELS OF SERVICE.NOW, LEVELS OF SERVICE IS MORE THAN JUST DETAILING WHAT SERVICES THE CITY PROVIDES, LIKE DRINKING WATER OR CEMETERY OR A LIBRARY.
IT'S ABOUT GETTING VERY SPECIFIC ABOUT THE NATURE OF THOSE SERVICES.
WHAT EXACTLY DO WE DELIVER? HOW MUCH OF IT? TO WHO? HOW CONSISTENTLY? WHAT CAN PEOPLE EXPECT FOR AVAILABILITY? HOW MUCH SHOULD IT COST AND HAND IN HAND WITH THAT IS, HOW DO WE PROVE IT? HOW ARE WE GOING TO MEASURE THAT WE'RE ACTUALLY DELIVERING THAT? WHAT DATA DO WE NEED AND HOW DO WE COMMUNICATE IT? WHY ARE LEVELS OF SERVICE IMPORTANT? WHEN YOU GET SPECIFIC, THE COMMUNITY AND THE ADMINISTRATION AGREE ON WHAT RESIDENTS ARE PAYING FOR AND WHAT THEY SHOULD EXPECT TO RECEIVE.
IT ALSO MEANS THAT CITY ADMINISTRATION CAN PROVE THAT WE'RE DELIVERING IT AND THAT WE CAN CONTINUE TO DELIVER IT.
WE CAN IDENTIFY IF WE'RE NOT DELIVERING IT, OR WE CAN'T CONTINUE TO DELIVER IT, THAT WE CAN WORK TO ADJUST EITHER THE EXPECTATIONS OR THE FUNDING.
NOW, COUNCIL ALREADY RECOGNIZES THE VALUE OF LEVELS OF SERVICE.
THERE'S A GOAL AND OBJECTIVE 2.3, CONFIRM CLEAR SERVICE LEVEL STANDARDS FOR KEY PROGRAMS AND SERVICES.
I THINK THAT THE CITY'S ALREADY SEEN THE BENEFIT OF HAVING THESE DETAILED CONVERSATIONS ABOUT LEVELS OF SERVICE THROUGH THE WORK THAT YKFD DID TO DEFINE THEIRS.
THAT IDENTIFIED SOME EXPECTATIONS WHICH DIDN'T MEET OUR FUNDING AND RISK REALITIES.
AFTER WE IDENTIFY EXACTLY WHAT PEOPLE ARE PAYING FOR, THE NEXT QUESTION IS, WELL, WHAT DO THEY COST? WHICH BRINGS US TO THE NEXT CORE CONCEPT, LIFE-CYCLE COST.
NOW TYPICALLY, WHEN WE THINK OF COSTS OF ASSETS, WE THINK IN TERMS OF CAPITAL AND OPERATIONS AND MAINTENANCE.
CAN WE AFFORD TO BUILD IT, AND HOW INEXPENSIVELY CAN WE RUN IT? THE CONCEPT OF LIFE-CYCLE COSTS EXPANDS ON THAT, AND ENCOURAGES US TO THINK AHEAD AND PLAN FOR THE RENEWAL AND DISPOSAL COSTS OF OWNING AN ASSET.
AIMING TO MINIMIZE THE LIFE-CYCLE COST OF OWNING AN ASSET, WHICH YOU CAN THINK ABOUT AS THE AVERAGE COST PER YEAR THAT YOU OWNED THAT ASSET.
AN EXAMPLE IS THAT THIS MIGHT MEAN PAYING MORE DURING CONSTRUCTION FOR SAY A STEEL ROOF TO AVOID HAVING TO REPLACE THE ROOF THREE TIMES BEFORE THE BUILDING IS DISPOSED OFF.
STEEL ROOF MIGHT COSTS THREE TIMES AS MUCH, BUT YOU MIGHT GET FOUR TIMES THE LIFE.
IT COSTS MORE UPFRONT, BUT IT COSTS LESS ON AVERAGE OVER TIME AND HAS A LOWER LIFE-CYCLE COST.
THIS IS THE KIND OF THINKING THAT SUPPORTS COUNCIL'S VALUE OF RESPONSIBLE DECISION-MAKING AND THE GOAL OF ENHANCING LONG-TERM FINANCIAL PLANNING.
BUT WE CAN TAKE THIS EVEN ONE STEP FURTHER.
THINKING IN TERMS OF SUSTAINABLE LIFE-CYCLE COSTS ENCOURAGES US TO LOOK AT THE OPERATING CONTEXT OF OUR ASSETS SO WE CAN CONSIDER WHAT IT'LL TAKE TO CONTINUE DELIVERING THE CURRENT LEVEL OF SERVICE GIVEN FUTURE TRENDS.
THIS REFERS TO ALL ASPECTS OF SUSTAINABILITY.
FINANCIAL SUSTAINABILITY, CAN WE ACTUALLY CONTINUE TO PAY FOR IT? AS WELL AS ENVIRONMENTAL SUSTAINABILITY, AS WELL AS CULTURAL SUSTAINABILITY.
ARE THE PRACTICES ABLE TO CONTINUE IN THE LONG TERM? IF THEY AREN'T, WELL, HOW DOES THAT IMPACT OUR OWNERSHIP? AN EXAMPLE IS THAT IF WE ONLY BUILD FOR TODAY'S DEMANDS IN A PARTICULAR SERVICE, THEN IN THE FUTURE, EXPANDING TO MEET TOMORROW'S DEMAND MIGHT COST US MORE OVERALL THAN IF WE HAD BUILT FOR FUTURE DEMAND FROM THE START.
THINKING IN TERMS OF SUSTAINABLE LIFE CYCLE COSTING IS A FORM OF INTER-GENERATIONAL EQUALITY.
IT'S A WAY TO DEMONSTRATE COUNCIL'S VALUE OF MULTI-GENERATIONALITY AND THE GOAL OF ENSURING A HIGH QUALITY OF LIFE FOR ALL, INCLUDING FUTURE GENERATIONS.
IT'S ALSO A WAY THAT WE CAN INCORPORATE THE IMPACTS OF CLIMATE CHANGE INTO OUR DECISION-MAKING.
ENVIRONMENTAL ACTION DOESN'T HAVE TO BE A STAND-ALONE PROCESSES.
IT'S AN IMPACT AND A RISK LIKE MANY OTHER ASPECTS THAT WERE ALREADY MANAGING, SO IT CAN BE INTEGRATED INTO THE WAY WE DO THINGS.
[00:10:04]
NOW TRIVIA TIME, AND I AM EXPECTING SOMEONE TO TRY AND ANSWER.WHEN IT COMES TO THESE LIFE-CYCLE COSTS, WHICH COSTS THE MOST OVER THE LIFE OF AN ASSET? ANYBODY?
>> OPERATIONS AND MAINTENANCE IS LIKELY GOING TO ACCOUNT FOR THE MAJORITY OF THE LIFE-CYCLE COST OF OWNING AN ASSET.
IT CAN BE ANYWHERE BETWEEN SAY LIKE, WELL IDEALLY IT'S BETWEEN SOMETHING LIKE 60 AND 80 PERCENT AND COULD BE HIGHER THAN THAT.
NEXT QUESTION THOUGH. WHICH ASPECTS OF THESE LIFE-CYCLE COST CARRIES THE MOST RISK TO SERVICES? NOT HEARING ANYTHING.
>> OPERATIONS AND MAINTENANCE AGAIN?
>> YEAH, I WAS GOING TO SAY EITHER THAT OR RENEWAL.
>> EVERYONE THAT THINKS OPERATIONS AND MAINTENANCE CAN BE FORGIVEN FOR THAT BECAUSE IT IS A VERY EXCELLENT POSITION.
IT'S WHAT WE'RE DEALING WITH EVERY YEAR.
RENEWAL, SPECIFICALLY, THE FUTURE REPLACEMENT OF AN ASSET IS OFTEN UNDERESTIMATED IF WE ACTUALLY REMEMBER THAT IT'S COMING UP AT ALL.
RENEWAL COSTS OFTEN SNEAK UP ON US, AND IT'S NOT UNUSUAL FOR MUNICIPALITIES ACROSS CANADA, ACROSS THE WORLD TO NOT HAVE COLLECTED ENOUGH IN FEES UPFRONT TO COVER THAT COST OF RENEWAL WHEN IT COMES DUE.
IF THE ASSET FAILS AND IT CAN'T BE REPLACED, THE SERVICE IT SUPPORTS IS AT RISK OR IF WE DON'T HAVE ENOUGH MONEY TO REPLACE THE ASSET, THE CONDITION OF THAT ASSET DETERIORATES AND THE LEVEL OF SERVICE, THE DUE QUALITY OF THE SERVICE THAT PEOPLE EXPERIENCE DETERIORATES.
WE NEED TO REALLY BE THINKING ABOUT RENEWAL, FAR IN ADVANCE OF WHEN IT HAPPENS SO THAT WE CAN MANAGE IT WHEN IT COMES AROUND.
THIRD QUESTION REGARDS TO THE LIFE-CYCLE COSTS.
ARE GIFTED ASSETS REALLY FREE? I WON'T ASK ANYONE TO GO TO THIS. I'LL ANSWER THIS ONE. [OVERLAPPING]
>> THEY'RE NOT FREE. THAT'S RIGHT.
IT DOESN'T MEAN THAT WE SHOULDN'T TAKE THEM.
IT JUST MEANS THAT WE NEED TO UNDERSTAND THAT ACCEPTING THE GIFT IS COMMITTING US TO OTHER LIFE-CYCLE COSTS AND LEVELS OF SERVICE EXPECTATIONS THAT WE THEN NEED TO ACCOUNT FOR AND KNOW THAT WE CAN SUSTAIN GOING FORWARD.
HERE'S A REAL-LIFE EXAMPLE OF LIFE-CYCLE COSTING AND I'M USING A CITY HALL.
AT THE TIME IT COST $1.9 MILLION, WHICH IS 8.7 MILLION IN TODAY'S DOLLARS.
IT'S ESTIMATED USEFUL LIFE IS 50 YEARS, WHICH MEANS THAT IT IS DUE FOR REPLACEMENTS IN 2026 ACCORDING TO THIS.
IT'S GOT AN ANNUAL OPERATIONS COSTS.
YOU CAN SEE THE MAINTENANCE COST, YOU CAN SEE THE ANNUALIZED RENEWAL COST IS LIKE TAKING ALL OF THE CAPITAL MONEY WE PUT INTO CITY HALL, IT'S DIVIDING IT BY THE NUMBER OF YEARS AND THE ESTIMATED REPLACEMENT COSTS OF THIS BUILDING LIGHT FOR LIGHT IS $15.6 MILLION.
ONE OF THE REASONS IT'S HIGHER IS BECAUSE THE CONSTRUCTION COSTS OF ASSETS CAN ACTUALLY INFLATE FASTER THAN BACKGROUND INFLATION.
WHICH IS SOMETHING THAT YOU ONLY START TO REALIZE WHEN YOU LOOK FARTHER INTO THE FUTURE.
NOW, THESE ARE REAL NUMBERS, I BASE THIS ON COSTS THAT WE RECORDED BETWEEN 2000 AND 2020.
I WANT TO POINT OUT SOMETHING INTERESTING RELATED TO THAT SECOND TRIVIA QUESTION.
THE CURRENT ESTIMATED REPLACEMENT COST IS EQUIVALENT TO 30 YEARS OF OPERATION.
SO THE CHALLENGE THAT REPLACEMENT PRESENTS IS A HUGE COST AND IT COMES ALL AT ONCE IF WE NEED TO SEE THIS COMING, OR THERE'S A RISK THAT WE CAN'T AFFORD THEIR END SERVICE LEVEL SULFUR.
WE KNOW THE ANNUAL COST OF OPERATIONS.
WE KNOW MAINTENANCE, WE KNOW RENEWAL., SO THERE IS THE NEXT OBVIOUS QUESTION WHICH IS, WHAT IS THE ANNUALIZED COST OF REPLACING ASSETS? THIS IS A CONCEPT OF AMORTIZATION.
YOU MIGHT KNOW IT AS A WRITE-DOWN OF AN ASSET'S VALUE OVER ITS LIFELIKE DEPRECIATION, YOU CAN THINK OF IT AS THE CONSUMPTION OF AN ASSET IN FINANCIAL TERMS, IN DOLLARS.
IT'S ALSO MANDATED THAT WE DO IT AND WE CALCULATE THIS BY THE PUBLIC SECTOR ACCOUNTING BOARD.
BUT MOST IMPORTANTLY, FOR OUR PURPOSES, WE CAN USE IT AS A PROXY FOR ASSET CONDITION AND CONDITION IS WHAT IS INDICATING REPLACEMENT.
[00:15:06]
AN EXAMPLE, THIS IS A FICTITIOUS EXAMPLE, IS A BUILDING, THE AMORTIZATION, THIS IS WHAT IT LOOKS LIKE.YOU CAN SEE ON THE RIGHT, THESE ARE THE USEFUL LIVES THAT WE PUT USING OUR FINANCIAL STATEMENT AND THIS IS A FICTITIOUS $40 MILLION BUILDING WITH A LIFE OF 40 YEARS, AND I DID THAT BECAUSE IT'S EASY TO DO MATH.
FORTY MILLION DIVIDED BY 40 YEARS IS A MILLION DOLLARS A YEAR. WHAT DOES THAT MEAN? THIS IS A ROUGH ESTIMATE OF WHAT WE NEED TO BE PUTTING ASIDE EVERY YEAR IN ORDER TO FUND THE EVENTUAL REPLACEMENT OF THE BUILDING WHEN IT HITS THE END OF IT'S LIFE.
NOW, IT IS A LITTLE MORE COMPLICATED THAN THAT, BUT IT'S A REASONABLE HIGH-LEVEL ESTIMATION AND THIS OCCURS WITH EVERY ASSET WE OWN.
THE ASSETS HAVE DIFFERENT VALUES, AGES, EXPECTED LIVES.
HOW DO WE WORK THAT OUT TO BE LIKE A TOTAL ANNUAL COST? WHAT'S GREAT IS THAT BECAUSE PCAB MANDATED US THAT WE DO IT BACK IN 2009, WE ACTUALLY REPORT THIS NUMBER EVERY YEAR IN BUDGET.
THAT LAST LINE THERE, AMORTIZATION, THE EQUIVALENT CONSUMPTION OF OUR ASSETS USEFUL LIVES IS EQUIVALENT TO $15,500,000 A YEAR.
NOW THIS IS IMPORTANT WHEN WE START ASKING, WHERE CAN WE LOWER LIFE-CYCLE COSTS? BECAUSE OFTEN WE THINK ABOUT LOWERING THE COSTS OF OPERATIONS AND MAINTENANCE.
BUT THIS POINTS US AS AN INTERESTING DIRECTION BECAUSE THE ANNUAL AMOUNT THAT WE NEED TO BE PUTTING ASIDE TO RENEW A BUILDING IF IT IS JUST GOING TO GET THE EXPECTED BOOK VALUE LIFE IS TWO-THIRDS OF OUR ANNUAL OPERATING COSTS.
TYPICALLY, WE JUST LOOK AT OPERATIONS AND MAINTENANCE AND HOW CAN WE LOWER THE COST OF OPERATING.
BUT THIS OPENS UP A WHOLE OTHER ASPECT WHERE WE CAN LOWER LIFE-CYCLE COSTS, WHICH IS EXTENDING THE ASSET LIFE.
EXTENDING ASSET LIFE, WE NEED TO KNOW WHAT DO WE OWN? HOW MUCH IS IT WORTH? WHAT'S ITS CONDITION AND WHAT ARE THE ACTIVITIES THAT WE CAN DO TO PROLONG ITS LIFE.
BECAUSE IT MIGHT BE CHEAPER TO PUT IT A LITTLE BIT OF MONEY IN NOW, IN ORDER TO GET SEVERAL MORE YEARS OUT OF THAT ASSET, AS OPPOSED TO FOCUSING ON THE OPERATION SIDE.
BUT THE OPERATIONS IS ALSO A TRUE COSTS AND WE DO NEED TO ASK OURSELVES IN LIGHT OF THE LEVELS OF SERVICE, WHAT SHOULD WE STOP DOING? WHAT SHOULD WE DO MORE OF, AND WHAT SHOULD WE DO DIFFERENTLY? SO WHEN WE TALKED ABOUT LOWERING COSTS, THIS IS WHERE A MUNICIPALITY REALLY NEEDS TO FOCUS.
>> JUST UNMUTE YOURSELF AND SHARE IT OUT.
>> GOOD ONE. WILDCAT CAFE IS OUR OLDEST ASSET, IT WAS BUILT IN 1937 MAKING IT 84 YEARS OLD.
YES, WE RENOVATED THE WILDCAT IN 2012 BUT IT WASN'T A COMPLETE REPLACEMENT.
THE WORK WAS DONE TO EXTEND THE BUILDING'S LIFE AND I'M HOPING THAT WE GET ANOTHER 84 YEARS OUT OF IT.
IF THAT DOESN'T PARTICULARLY SUITE WELL WITH YOU, THE NEXT OLDEST ASSET IS FIREWEED STUDIO AND THAT WAS BUILT IN 1938 ONLY A YEAR LATER AND I THINK WE CAN ALL AGREE THAT THAT'S STILL THE ORIGINAL BUILDING.
WHAT'S THE MOST EXPENSIVE ASSET TO ACQUIRE? ANYONE WHO[OVERLAPPING].
>> WATER TREATMENT PLANT. [NOISE]
>> WATER TREATMENT PLANT COST 34.4 MILLION IN 2015.
IT'S OUR MOST EXPENSIVE ASSET TO ACQUIRE.
LAST QUESTION IS A BIT OF A TRICK QUESTION.
>> WHAT IS OUR MOST EXPENSIVE ASSET TO REPLACE? AQUATIC CENTER IS A GOOD GUESS? ANYONE ELSE?
>> VERY SHARP, IT IS ACTUALLY LIKELY TO BE FIDDLER'S LAGOON.
WE HAVE A BETTER SENSE OF WHAT THE AQUATIC CENTER IS GOING TO COST BUT I WOULD LIKE TO POINT OUT THAT THAT'S NOT SO MUCH A REPLACEMENT IN WHICH WE WOULD MAINTAIN OUR LEVELS OF SERVICE.
THAT'S ACTUALLY AN INCREASE IN OUR LEVELS OF SERVICE.
THERE'S GOING TO BE A LOT MORE GOING ON IN THAT NEW AQUATIC CENTER.
IT'S NOT A PURE REPLACEMENT BUT IF WE HAD TO REPLACE FIDDLER'S LAGOON WITH A SEWAGE TREATMENT PLANT, WE WOULD BE LOOKING AT A CAPITAL COST IN EXCESS OF WHAT IT IS GOING TO COST TO BUILD IN THE POOL WHICH IS SOMETHING TO CONSIDER ABOUT.
WE NEED TO MAKE SURE THAT WE'RE OPERATING THAT LAGOON WELL THAT WE UNDERSTAND THE IMPACTS.
WE CAN KEEP USING THAT NATURAL ASSET BECAUSE IT'S
[00:20:01]
OFFSETTING THE NEED FOR A VERY EXPENSIVE ENGINEERED ASSET.WHERE DO WE TRACK THIS INFORMATION? AN ASSET REGISTRY. WHAT IS IT? IT'S ONE SOURCE OF THE TRUTH.
IT MIGHT SEEM LIKE I'VE GOT THE DATA AT MY FINGERTIPS ALL READY BUT IT'S ACTUALLY TAKING QUITE A BIT OF TIME TO PUT IT ALL TOGETHER FOR THIS PRESENTATION AND I'D LIKE TO MAKE IT A LOT EASIER FOR EVERYONE TO HAVE THAT INFORMATION AT THEIR FINGERTIPS BY BUILDING AN ASSET REGISTRY.
WE CAN HAVE A LIST OF ALL THE ASSETS WE OWN.
WE KNOW WHAT YEAR THEY WERE BUILT.
WE KNOW THEIR ESTIMATED LIFE, THEIR CURRENT CONDITION, WHAT THEIR ESTIMATED FUTURE REPLACEMENT COST IS BECAUSE THIS INFORMATION DIRECTLY SUPPORTS COUNCIL'S GOAL OF ENHANCING LONG-TERM FINANCIAL PLANNING AND IT LETS US BUILD MORE ACCURATE AND FARTHER LOOKING REPLACEMENT AND RENEWAL PLANS.
BECAUSE IT'S VERY HARD TO DEAL WITH THE FINANCES OF LARGE-SCALE REPLACEMENT WITHIN ITS TIME SPAN OF 1-3 YEARS.
THIS IS THE STUFF THAT WE NEED TO SEE 10-20 YEARS IN ADVANCE.
GOING BACK TO EARLIER ON WHEN WE'RE TALKING ABOUT THE REPLACEMENT COSTS, THERE MIGHT BRING UP THIS QUESTION, IF WE DON'T HAVE ENOUGH MONEY TO DO THIS.
DOES IT ACTUALLY POSE A RISK TO THE COMMUNITY? THAT'S THE WAY TO INTRODUCE THE NEXT CONCEPT WHICH IS, RISK.
NOW A BASIC DEFINITION OF RISK IS THAT IT'S THE LIKELIHOOD OF AN EVENT OCCURRING AND THE CONSEQUENCE OF AN EVENT OCCURRING.
AN EXAMPLE OF SOMETHING THAT'S HIGH LIKELIHOOD, LOW CONSEQUENCE EVENT PERSONALLY IS THAT I WOULD GET A SUNBURN.
IT'S PROBABLY GOING TO HAPPEN AND I DON'T REALLY CARE.
BUT A LOW LIKELIHOOD, HIGH CONSEQUENCE EVENT FOR MYSELF PERSONALLY, I'D BE LIKE I GET STRUCK BY LIGHTNING.
IT'S ALMOST NEVER GOING TO HAPPEN BUT I WOULD HAVE A BIG IMPACT ON MY LIFE.
FOR THE CITY, A HIGH LIKELIHOOD, LOW CONSEQUENCE EVENT MIGHT BE GRAFFITI. IT'S ANNOYING.
IT DOES HAVE A CONSEQUENCE BUT IT'S NOT REALLY IMPACTING OUR DAY-TO-DAY OPERATIONS.
BUT A LOW LIKELIHOOD, HIGH CONSEQUENCE EVENT WOULD BE SOMETHING LIKE A GLOBAL PANDEMIC OR ONE IN 100-YEAR FLOOD LEVELS.
RISK IS A WAY OF CONCEPTUALIZING THESE EVENTS.
THEN YOU CAN TAKE A STEP FORWARD TO TRY AND MANAGE THOSE RISKS IN A SYSTEMATIC WAY.
DOCUMENT THEM, FIGURE OUT WHAT THE LIKELIHOOD AND THE POTENTIAL CONSEQUENCES ARE.
DETERMINE WHAT WE'RE GOING TO DO TO CONTROL THOSE.
FIGURE OUT WHAT THOSE CONTROLS IMPACT IN TERMS OF THE LIKELIHOOD AND THE CONSEQUENCES AND HOW THAT REDUCES THE RISK.
PUT THOSE CONTROLS IN PLACE, MONITOR THEM, AND KEEP DOING THIS.
ONE OF THE MOST IMPORTANT ASPECTS OF RISK TO GRASP IS THAT MANAGING RISK INVOLVES SPENDING MONEY TO MAKE SURE NOTHING HAPPENS.
I DON'T WANT TO UNDERSTATE THIS.
WE'RE ALL USED TO GETTING SOMETHING FOR OUR MONEY.
MANAGING RISKS INVOLVES NOTHING HAPPENING IN TERMS OF CONSEQUENCES.
WE GO THROUGH THIS SYSTEMATIC PROCESS SO THAT WE'RE LINKING THE MONEY THAT WE'RE SPENDING TO THE CONTROLS THAT WE'RE GETTING.
THAT'S THE VALUE AND THAT'S WHY WE NEED TO MONITOR THOSE CONTROLS AND MAKE SURE THAT WE'RE STILL GETTING THAT VALUE.
WE'RE SPENDING REAL MONEY UPFRONT.
BUT WE'RE GOING TO AVOID POSSIBLY HAVING TO SPEND A LOT MORE MONEY IF WE CAN MANAGE THOSE CONTROLS.
HOW DOES RISK WORK? THE BIG CORE OF IT IS USING SOMETHING CALLED A RISK MATRIX.
A CORPORATE RISK MATRIX LAYS OUT THE LIKELIHOODS AND THE CONSEQUENCES IN A NUMERICAL SCALE.
THIS ALLOWS US TO QUANTIFY DIFFERENT RISKS.
IT'S NOT AN EXACT SCIENCE BUT BY QUANTIFYING, IT ALLOWS TO PRIORITIZE THESE RISKS ACROSS VARIOUS SERVICES AND VARIOUS POTENTIAL CONSEQUENCES.
WHEN YOU LOOK AT CONSEQUENCES, THEY CAN BE FINANCIAL, THEY CAN BE PERSONAL INJURY, IT CAN BE A SERVICE INTERRUPTION, IT CAN BE RISKS TO THE ENVIRONMENT, RISK TO THE REPUTATION OF THE CITY.
IT'S INCREDIBLY DIFFICULT TO TRY AND PRIORITIZE ACROSS ALL OF THESE CONSEQUENCES AND SERVICES UNLESS YOU BRING THIS TYPE OF FORMALIZED SYSTEM TO IT.
TRIVIA. WHAT'S OUR BIGGEST RISK? I WON'T LET ANYBODY ANSWER THIS BECAUSE I DON'T KNOW.
AS AN ORGANIZATION, THE CITY DOESN'T TAKE A FORMALIZED CENTRAL APPROACH TO RISK MANAGEMENT.
I DO WANT TO UNDERLINE THIS HAPPENS LIKE ALMOST ALL ASPECTS OF ASSET MANAGEMENT IS ALL READY HAPPENING.
[00:25:01]
IT HAPPENS AT A QUALITATIVE, INTUITIVE, AND A LOCAL LEVEL WITHIN DEPARTMENTS.THIS IS WHY WE HAVE SUBJECT MATTER EXPERTS.
WE TRUST THE OPINIONS OF PEOPLE.
BUT IF WE CAN BRING IT TO A WHOLE ORGANIZATION LEVEL ON A SYSTEMATIC APPROACH, IT ALLOWS THE ABILITY TO STRATEGICALLY MANAGE THIS ACROSS ALL OF THOSE DEPARTMENTS AND MAKE SURE THAT WE'RE GETTING THE MOST VALUE FOR THE INVESTMENT IN CONTROLS.
LET'S GO BACK TO THAT QUESTION.
WHAT DO WE REALLY MEAN WHEN WE SAY MAXIMIZING THE VALUE? MAXIMUM VALUE IS DELIVERING SERVICES AT A MINIMAL, SUSTAINABLE LIFE-CYCLE COST.
THAT INCLUDES TRADE-OFFS BETWEEN CAPITAL AND OPERATIONS AND MAINTENANCE, TRADE-OFFS BETWEEN ASSET LIFE AND REPLACEMENT COST, TRADE-OFFS BETWEEN RISK CONTROL VERSUS CONSEQUENCES.
ALL IN A WAY THAT'S NAVIGATING THE FUTURE DEMAND, THE LEGISLATIONS, THE CHANGING ENVIRONMENT.
THE FIRST PART OF THAT, THE PRACTICE.
WHAT ARE WE ACTUALLY GOING TO DO? HOW DO WE TRANSLATE THESE CONCEPTS INTO THE POLICY PROCEDURES AND TOOLS THAT ARE REQUIRED TO MANAGE ANY PROCESS?
>> THIS IS HOW THE PRACTICE WORKS.
AT FIRST, YOU DEFINE THE PRINCIPLES OF THE PRACTICE.
THIS IS THE ASSET MANAGEMENT POLICY.
THESE ARE THE FUNDAMENTALS THAT GUIDE OUR DECISION-MAKING.
THINK OF IT AS THE RULES OF THE GAME.
WHAT ARE WE DELIVERING TO PEOPLE SPECIFICALLY? ARE WE GOING TO MEASURE IT? WE IDENTIFY EVERYTHING THAT WE OWN.
WHAT ARE THOSE COSTS ASSOCIATED WITH THOSE ASSETS? WE IDENTIFY OUR RISKS.
WHAT DO WE NEED TO BE CONTROLLING TO AVOID LARGE UNEXPECTED COSTS? WE COLLECT ALL THIS DATA.
WE'RE CAPTURING THIS KNOWLEDGE.
WE'RE EMBEDDING PRACTICE THROUGH THE POLICIES, AND THE PROCEDURES IN THE TOOLS.
WE'RE USING THAT DATA TO THEN THROUGH AN ASSET MANAGEMENT STRATEGY, FOCUS IMPROVEMENT OF OUR PRACTICE THROUGH THE ASSET MANAGEMENT PLANS WE'RE PLANNING FOR THOSE ASSETS.
DO WE REPLACE THEM? DO WE INVEST? DO WE CONTINUE TO OPERATE? WHEN DO WE UPGRADE? HOW DOES THE LEVEL OF SERVICE IMPACT THAT? THROUGH THE 10-YEAR CAPITAL PLAN, WE HAVE THAT LONG-TERM OUTLOOK THAT'S MUCH BETTER INFORMED THROUGH THAT ASSET REGISTER.
THEN WE CAN TAKE ALL OF THIS TO ENGAGE THE PUBLIC WHEN WE'RE TALKING ABOUT CHANGES OF LEVELS OF SERVICE.
BECAUSE IF WE INCREASE THE LEVEL OF SERVICE IS PROBABLY CAN INCREASE OUR COSTS.
ARE THEY WILLING TO PAY FOR THAT? OR IF WE FIND OUT THAT WE'RE ACTUALLY NOT ABLE TO SUSTAIN A PARTICULAR SERVICE, HOW DOES THE PUBLIC FEEL ABOUT THAT? DO THEY WANT US TO SUSTAIN ONE SERVICE OF THE COST TO ANOTHER? WE NEED THIS INFORMATION TO HAVE PRODUCTIVE CONVERSATIONS WITH THE PUBLIC TO UNDERSTAND WHAT THEY WANT.
ALL OF THESE STEPS BUILD ALIGNMENT, AND CONSISTENCY, AND TRANSPARENCY THROUGH DOCUMENTATION.
ASSET MANAGEMENT IS A LOT ABOUT TAKING WHAT IS CURRENTLY BEST PRACTICE IN ISOLATED DEPARTMENTS, AND MAKING IT STANDARD PRACTICE ACROSS THE ORGANIZATION.
I ALSO WANT TO POINT OUT, WHEN WE TALK ABOUT THE PIECES OF IT, THERE'S NOT REALLY ANY INHERENT VALUE IN THESE DOCUMENTS.
WE ONLY REALIZE THE VALUE IF WE PRACTICE THE PRINCIPLES IN THE PROCESSES THEY OUTLINE.
I DON'T WANT PEOPLE TO LOOK AT THIS, AND THINK THAT IT'S JUST GONE LIKE, YEP, WE HAVE THIS AND CHECK OFF.
WE'VE GOT A POLICY. WE'RE DOING ASSET MANAGEMENT.
JOINING A JUDO CLASS DOESN'T MAKE YOU A BLACK BELT.
PART OF ASSET MANAGEMENT IS JUST CONTINUING TO IMPROVE ON THAT PRACTICE.
[NOISE] THAT TAKES US BACK TO THESE FRAMEWORKS THAT IF YOU WOULD LOOK UP MUNICIPAL ASSET MANAGEMENT ON THE INTERNET, YOU WOULD SEE THIS STUFF COME UP.
AT FIRST IT MIGHT SEEM LIKE REALLY IMPENETRABLE.
BUT WHEN YOU GO BACK TO THOSE BASIC CONCEPTS, THIS IS REALLY JUST A FRAMEWORK TO TRY, AND STANDARDIZE THAT, AND MAKE IT PART OF EVERYTHING THAT WE DO.
PROGRESS TO DATE, IN 2019 CITY STAFF ARE DOING CONSULTANT DEVELOPED A FIVE-YEAR ASSET MANAGEMENT ROADMAP, AND THAT WAS ACCEPTED BY COMMITTEE FOR INFORMATION IN AUGUST OF 2019.
THE RESOURCES FOR ASSET MANAGEMENT WERE ALLOCATED BUDGET 2020.
MY POSITION WAS FILLED BY B IN OCTOBER OF 2020.
IN JANUARY 2021, WE FORMED A CROSS-FUNCTIONAL STEERING COMMITTEE, AND THIS IS TO PROVIDE GUIDANCE, AND DIRECTION FOR ASSET MANAGEMENT.
EVERYBODY HAS TO PARTICIPATE IN THIS TO MAKE SURE THAT WHAT WE DEVELOP IS PRACTICAL,
[00:30:03]
THAT WE CAN IMPLEMENT IT AND THAT IT'S GOING TO ADD VALUE.NEXT STEPS, THE STEERING COMMITTEE DEVELOPED A PROPOSED ASSET MANAGEMENT POLICY, AND THAT'S GOING TO BE SUBMITTED TO GPC ON MAY 25TH.
WHILE THAT IS GOING FORWARD, THE STEERING COMMITTEES CONTINUING TO DISCUSS, AND DEVELOP ASSET REGISTRY, WHAT'S GOING TO LOOK LIKE? HOW ARE WE GOING TO MANAGE IT? A FRAMEWORK FOR LEVELS OF SERVICE.
HOW CAN WE UTILIZE STEP FORWARD IN A STANDARDIZED WAY ACROSS THE ORGANIZATION TO DEFINE THE SPECIFICS OF THE LEVELS OF SERVICE THAT WE DELIVER, AND TO START BUILDING THIS RISK MANAGEMENT FRAMEWORK.
EVERYTHING I'VE DISCUSSED TODAY IS PART OF THAT FIVE-YEAR DYLAN ROADMAP.
THE LAST POINT IS ALSO VERY IMPORTANT.
WE'RE GOING TO BUILD OUR PRACTICE OVER TIME.
WE'RE NOT NECESSARILY GOING TO GET EVERYTHING RIGHT OUT OF THE GATES, OR IT'S NOT ALL GOING TO BE THERE OUT OF THE GATE.
WE BUILD IT OVERTIME. WE BUILD IT SLOWLY.
WE BUILD IT AS WE FIGURE OUT WHAT WE CAN DO NOW, AND WHAT WE NEED TO GROW INTO LATER.
THAT'S WHY IT WAS A FIVE-YEAR ROADMAP.
JUST BECAUSE I'VE GOT THIS STUFF UP HERE DOESN'T MEAN IT'S GOING TO HAPPEN THIS YEAR.
BUT IT IS THE CORE CONCEPTS, AND IT IS WHAT WE'RE GOING TO BE DEVELOPING.
THAT'S THE END OF THE PRESENTATION.
I THINK I CAN TURN MY SCREEN OFF, AND TURN MY CAMERA ON.
>> PERFECT. THANK YOU VERY MUCH FOR THE PRESENTATION.
ANY QUESTIONS FOR THE PRESENTER? PASS TO WILLIAMS.
>> THANKS MADAM CHAIR. NOT REALLY ANY QUESTIONS.
I JUST WANTED TO SAY, I APPRECIATE THE PRESENTATION, LAUGHLIN, IT LOOKS LIKE WE GOT THE RIGHT CANDIDATE FOR THE JOB, AND GLAD TO SEE THAT THAT WORK HAS STARTED ALREADY.
I THINK MOST OF THE QUESTIONS WILL BE IN REGARDS TO THE MAY 25TH GPC PACKAGE.
GLAD WE HAD THIS PRESENTATION TO SORT OF WALK OUR WAY THROUGH SOME OF THE CONCEPTS TO PREPARE US FOR WHAT THAT STRATEGY IS GOING TO LOOK LIKE, OR WHAT THAT POLICY IS GOING TO LOOK LIKE INTERNALLY.
REALLY APPRECIATE IT. THANKS VERY MUCH.
>> THANK YOU. YEAH, THANKS A LOT ON FOR THE PRESENTATION THAT WAS NICE AND PLAIN LANGUAGE AND IT WAS INTERESTING HOW YOU LOOK AT THAT CIRCLE AT THE START AND YOU'RE LIKE, WELL, WHERE DO I START? BUT BY THE END I WAS LIKE, OKAY, I KNOW I SEE HOW ALL THIS COMES TOGETHER.
WE ALWAYS TALK ABOUT, OR I ALWAYS THINK ABOUT THE CAPITAL COST OF THE ONM TARGET.
I THINK ABOUT DISPOSAL PARTICULARLY BECAUSE IT'S ALSO GOING TO IMPACT THEIR SOLID WASTE.
BUT THAT RENEWAL, I DON'T ALWAYS THINK ABOUT, AND WE DO THIS FOR IT, WE PUT MONEY IN THE BUDGET EVERY YEAR SO THAT WE CAN RENEW IT.
WE DO IT WITH FLEET MANAGEMENT.
JUST WONDERING, AND MAYBE IT'S NOT A QUESTION FOR YOU BUT FOR PER SHALYNNE, ARE WE DOING THIS ACROSS THE ORGANIZATION ALREADY? WE JUST HAVE THOSE TWO FUNDS.
THERE ARE TOP OF MIND FOR ME, OR IS IT SOMETHING THAT WE SHOULD BE INCLUDING IN OUR BUDGETS IN THE FUTURE?
>> THANKS. I WILL ASK SHAROLYNN TO SPEAK TO THIS.
BUT DEFINITELY THIS IS SOMETHING THAT WE ASPIRE TO DO.
THAT'S A LITTLE BIT OF WHAT OUR BUDGET POLICIES AIM TO DO.
TO KEEP CERTAIN AMOUNTS IN CERTAIN AREAS, TO HAVE RESERVED FUNDS THAT WE ARE READY TO BE ABLE TO BUILD AND BE ABLE TO DEPLOY.
BUT CERTAINLY A PART OF OUR ASSET MANAGEMENT WORK WILL BE TO FORMALIZE THIS A LOT MORE.
I'LL ASKED SHAROLYNN AND TO ADD TO THIS.
>> THANK YOU VERY MUCH FOR THE QUESTION. YES, YOU'RE RIGHT.
WE ARE ALL [INAUDIBLE] AND THAT WE DO HAVE AN IT RESERVE.
WE HAVE A FLEET RESERVE, WE ALSO HAVE A MAJOR COMMUNITY FACILITY RESERVE.
THIS DEMONSTRATES THAT WE HAVE THESE POCKETS OF ASSET MANAGEMENT WITHIN THE ORGANIZATION.
WHAT WE'RE HOPING TO DO BY BRINGING MORE FORMALIZED PROCESSES INTO PLAY.
THE PRACTICE THAT LACHLAN REFERRED TO IS HOW THIS MORE CONSISTENT, MORE MINDFUL CONTRIBUTIONS.
AS I SAY, IT'S BEEN FAIRLY STRAIGHTFORWARD, SAY IN THE CASE OF IT.
BUT WHEN WE START TALKING ABOUT SOME OF THE OTHER AREAS LIKE OUR BUILDINGS, THAT'S WHERE WE PERHAPS HAVEN'T BEEN AS ATTENTIVE TO IT AS WE SHOULD HAVE.
JUST THE SHORT TIME THAT HE'S BEEN HERE, THE INFORMATION THAT LACHLAN'S UNEARTHED HAS OPENED A LOT OF EYES.
I THINK IT WILL REALLY SHAPE THE WAY WE GO FORWARD TO PLANNING FOR THAT VERY [INAUDIBLE]. THANK YOU.
>> THANKS. MY NEXT ONE WAS ABOUT CITY HALL EXPECTED TO LAST 50 YEARS,
[00:35:05]
WHICH IS ONLY FIVE YEARS TILL IT'S DONE, I GUESS.BUT WE HAVE BEEN DOING INVESTMENTS LIKE RENOVATIONS AND STUFF LIKE THAT.
WHEN YOU TALK ABOUT EXPECTED TO LAST 50 YEARS, BECAUSE WE PUT IN INVESTMENTS TO HOPEFULLY MAINTAIN THE ASSET BEYOND THAT, IT DOESN'T NECESSARILY MEAN THAT WE HAVE TO TEAR DOWN AND BUILD NEW IN 2026.
THE ESTIMATED USEFUL LIFE IS JUST A START.
IDEALLY, YOU DO GET BEYOND THE ESTIMATED USEFUL LIFE BY INVESTING IN ANY ASSET.
AN EXAMPLE WOULD BE, MY ESTIMATED USEFUL LIFE AS A WHITE MALE IS 78 YEARS, BUT DON'T BURY ME BEFORE I'M DEAD.
[LAUGHTER] I PLAN TO EXTEND THAT BY INVESTING IN MYSELF.
[LAUGHTER] FROM THAT PERSPECTIVE, WHAT REALLY SHOULD DRIVE ASSET REPLACEMENT IS ITS COST PERFORMANCE AND ITS CONDITION.
TRADITIONALLY, AND IT'S NOT UNUSUAL FOR PEOPLE TO PRACTICE THIS 10 YEARS OLD, I WILL REPLACE IT OR 50 YEARS AND WE'LL REPLACE IT.
WHEN YOU LOOK AT IT FROM THE PERSPECTIVE OF YOU PROBABLY GOT GOOD VALUE FOR YOUR MONEY, WHY PUSH IT AND THEN RISK THE THING FALLING APART ON YOU? THAT WORKS AS A FIRST STEP.
THE NEXT STEP IS TO REALLY DIG INTO HOW AN ASSET'S PERFORMING AND REPLACE THEM WHEN THEY NEED TO BE DONE.
AS AN EXAMPLE, LIKE A BUILDING HAVING A 50 YEAR USEFUL LIFE.
THAT'S REALLY IS SUPPOSED TO BE AN AVERAGE.
THAT MIGHT MEAN THAT SOME BUILDINGS DON'T LAST AS LONG AND WE NEED TO BE ABLE TO IDENTIFY THOSE AND REPLACE THEM.
SOME BUILDINGS CAN GO FURTHER THAN THAT.
WE SHOULD PUSH THOSE AS FAR AS THEY CAN GO.
THAT MIGHT REQUIRE A LITTLE BIT OF EXTRA INVESTMENT IN A BUILDING BEYOND ITS INITIAL CONSTRUCTION COST AND MAINTENANCE.
BECAUSE YOU'RE AVOIDING A HUGE COST.
IF WE WERE TO JUST REBUILD THE CITY HALL EXACTLY AS IT IS RIGHT NOW, IT WOULD COST TWICE AS MUCH AS THE CURRENT VALUE OF ITS ORIGINAL CONSTRUCTION.
YOU DON'T USE THAT ESTIMATED USEFUL LIFE TO REPLACE IT SO MUCH AS YOU USE IT TO PLAN FISCALLY LONG-TERM.
THEN WHEN IT GETS CLOSER AND CLOSER, YOU LOOK AT THE CONDITION OF IT AND YOU SAY, YEAH, WE CAN PUSH IT.
NO WE CAN'T. LET'S DO THAT ONE EARLY.
LET'S DO THAT ONE LATE. THIS IS A LEMON, THAT ONE'S NOT.
I APPRECIATE YOUR NON ASSET MANAGEMENT EXAMPLES AS WELL OF YOURSELF AS A HUMAN.
IT'S RELATABLE. LOOK FORWARD TO THE ASSET REGISTRY AND THE RISK REGISTRY WITH MY TIME AT [INAUDIBLE] WAS REALLY INTRODUCED TO THE FIVE-BY-FIVE RISK MATRIX.
WE HAD DEPARTMENT RISK REGISTRIES THAT HAD TO THEN FEED UP TO THE CORPORATE RISK REGISTRIES AND YOU CAN'T MANAGE WHAT YOU DON'T KNOW.
I WAS GOING TO ASK ABOUT THE PRACTICE BECAUSE WHETHER YOU START AT THE TOP AND WORK YOUR WAY THROUGH, BUT YOU TOUCHED ON IT IN A FURTHER SLIDE THAT YOU'RE FOCUSED ON ASSET REGISTRY, THEN LEVEL OF SERVICE, THEN RISK REGISTRY OR WERE THOSE JUST THREE BULLETS IN NO PARTICULAR ORDER?
>> THOSE ARE THREE BULLETS IN NO PARTICULAR ORDER.
THERE IS NO ADVISED ORDER TO TACKLE ASSET MANAGEMENT.
SOME MUNICIPALITIES WILL TAKE ON ASSET PLANS FIRST BEFORE THEY EVEN DEVELOP A POLICY.
BUT WE FELT THAT THE BEST APPROACH HERE AND IT WAS REFLECTED IN THE DYLAN ROADMAP WAS TO START WITH THE POLICY WHICH REALLY SETS THE STAGE AND THAT IS THE RULES. THAT'S HOW WE'RE GOING TO APPROACH.
IT GETS EVERYONE ON THE SAME BOAT.
THEN WE CAN START DEVELOPING ASPECTS OF THAT IN NO PARTICULAR ORDER ALL AT THE SAME TIME.
I PERSONALLY LIKE TO TAKE ON MULTIPLE THINGS AT ONCE AND TRY AND DEVELOP THEM AS OPPOSED TO JUST WORK AT ONE THING AT A TIME.
THERE'S NO PARTICULAR ORDER BEYOND THE POLICY SHOWING UP ON THE 25TH AND WE'LL TAKE IT FROM THERE.
>> OKAY. [INAUDIBLE] I JUST WANT ONE MORE QUESTION.
I GUESS IN YOUR DISCUSSION WITH THE WORKING GROUP IS THAT WHERE YOU DETERMINE HOW FAR YOU DRILL INTO A DETAIL ON ASSETS AND LEVELS OF SERVICE? IN SOME OF THE DISCUSSIONS, LIKE THE FCM LEVEL THEY TALK ABOUT ARE NATURAL ASSETS THAT CAN HELP REDUCE FLOODING IN COMMUNITIES OR OTHER NATURAL DISASTERS? HOW FAR DO YOU GO INTO THE DETAILS AND DO YOU LOOK AT JUST CITY OWNED ASSETS OR DO YOU LOOK AT OUR COMMUNITY AND NATURAL BUILT ENVIRONMENTS AS WELL?
[00:40:06]
>> ALL OF THOSE ARE POSSIBLE. LET'S PUT IT THAT WAY.
THAT'S REALLY WHAT GETS INTO THE CONTENT OF THE POLICY ITSELF.
THE STEERING COMMITTEE IS REALLY THERE TO HELP KEEP THINGS PRACTICAL AND LET'S MAKE SURE THAT WE BITE OFF WHAT WE CAN ACTUALLY CHEW.
YOU CAN TRY AND DEVELOP A FULLY DETAILED, ENORMOUS APPROACH RIGHT OFF THE BAT, AND IT MIGHT GO NOWHERE.
IF WE RECOGNIZE ASSET MANAGEMENT AS A CONTINUING PRACTICE, IT'S REALLY BETTER TO JUST START AND GET WALKING FIRST AND GET USED TO THE PROCESSES.
MAY BE ONLY ONE DEPARTMENT DOES IT A CERTAIN WAY AT FIRST AND THEN MORE OR YOU TRY AND BRING IN ELEMENTS AS WE'RE PREPARED FOR IT, AND YOU JUST KEEP GETTING BETTER AND KEEP GETTING BETTER.
I FULLY EXPECT AS WE DEVELOP EXPERIENCE OVER THE YEARS THAT THE LEVEL OF DETAIL IS GOING TO CHANGE BASED ON OUR IDENTIFIED NEEDS.
WE REALLY WANT TO TRACK THIS PARTICULAR CLASS OF ASSETS.
WE'RE GOING TO START TRACKING IT OR WE NEVER REALLY USE THE INFORMATION ABOUT THIS CLASS OR WE'RE GOING TO STOP TRACKING IT.
IT'S BEST TO JUST START AND WE FIGURE OUT THE DETAIL AS WE GO INTO STEERING COMMITTEE.
FOR ANY OF THEM THAT WATCH THIS RECORDING, I HAVE TO GIVE THEM LOTS OF CREDIT.
THEY ARE KEEPING ME AND MY IDEAS PRACTICAL AND MAKING SURE THAT WHAT WE CAN DO IS EXECUTABLE AND IT'S GOING TO HAVE VALUE.
>> AWESOME. THANK YOU. I LOOK FORWARD TO CHATTING FURTHER AT GBC.
>> NEXT I HAVE COUNSELOR MORRIS.
I ACTUALLY ASKED MY QUESTIONS SO THEY'VE ALL BEEN ANSWERED.
BUT AGAIN, SIMILAR TO THE COUNSELOR WILLIAMS, IT'S GREAT TO HAVE YOU ON BOARD LACHLAN, AND EXCITED TO SEE ALL THE WORK THAT YOU'RE DOING.
THIS IS GREAT. I THINK IT'S GOING TO END UP SAVING US A LOT OF MONEY OVER TIME.
>> ANY OTHER QUESTIONS? [INAUDIBLE]
>> THANK YOU VERY MUCH. ISN'T A QUESTION SO MUCH AS JUST A RIFF OFF OF COUNSELOR MORRIS' LAST COMMENT.
I THINK HE NAILED IT THAT, WHAT THIS IS GOING TO DO IS IT MAY NOT PERHAPS RESULT IN COST SAVINGS, BUT IT WILL RESULT IN, I THINK THAT'S WHAT HE WAS GETTING AT, AT THE BEST, MOST EFFICIENT AND EFFECTIVE USE OF OUR FUNDS.
SO THAT IF THERE ARE RESOURCES THAT WE ARE ALLOCATING TOWARDS SOMETHING THAT MAY NOT BE A PRIORITY, MAY NOT BE AS HIGHER RISK AS WE THINK.
WE'VE GOT OPPORTUNITY TO REALLOCATE THAT INTO THINGS THAT ARE HIGHER RISK, TO PUT MONEY AWAY FOR SIGNIFICANT PROJECT REPLACEMENTS THAT WE HAVE THE ABILITY TO DO SO, SO IT STABILIZES THE ORGANIZATION AND IT ENSURES THE RELIABILITY OF SERVICE FOR YEARS TO COME FOR. [INAUDIBLE]
>> THANK YOU. ANY OTHER QUESTIONS?
>> FOR MYSELF, THANK YOU VERY MUCH FOR THE PRESENTATION.
I WAS REALLY BLOWN AWAY BY THE INFORMATION THAT YOU PROVIDED.
I READ THE DOCUMENT AND I READ IT AGAIN AND I DEFINITELY WILL PRINT IT BECAUSE ASSET MANAGEMENT HAS ALWAYS BEEN SOMETHING THAT'S REALLY NEAR AND DEAR TO ME.
LEARNING WHAT YOU HAD TO PRESENT WAS JUST AMAZING.
THE MATRIX, THE RISK OF REPLACEMENT.
I JUST NEVER HAD THOUGHT ABOUT THE COST DIFFERENTIAL ON THE ACQUISITION AND POTENTIALLY THE REPLACEMENTS.
THANK YOU VERY MUCH FOR THE INFORMATION.
I FOUND IT VERY, VERY INTERESTING. THANK YOU.
>> WELL, THANK YOU EVERYONE FOR THE OPPORTUNITY TO PRESENT AND ALL THE QUESTIONS.
I LOOK FORWARD TO ANYTIME WHEN WE GET TO TALK.
I THINK I'M NOT SURE IF I'LL BE THERE FOR GPC OR NOT, BUT I'VE ONLY BEEN WITH THE CITY FOR SIX MONTHS.
I'M STILL LEARNING ABOUT [LAUGHTER] HOW EVERYTHING WORKS.
[LAUGHTER] BUT I LOOK FORWARD TO ANY FUTURE CONVERSATIONS.
>> THANK YOU. NEXT WE HAVE NOTES FROM
[3. Notes from Council Administration Round Table of March 11, 2021.]
COUNCIL ADMINISTRATION ROUNDTABLE OF MARCH 11TH, 2021.ANY QUESTIONS? NO, WE'RE GOOD AND I GUESS THIS CONCLUDES THE MEETING UNLESS THERE'S ANY OTHER BUSINESS THAT I DON'T SEE ON THE AGENDA.
THIS CONCLUDES THE MEETING. THANK YOU VERY MUCH, EVERYBODY.
SO GLAD I GOT TO CHAIR THE ASSET MANAGEMENT DISCUSSION BECAUSE IT'S ALWAYS BEEN SOMETHING THAT I RAN ON.
THANK YOU FOR THE OPPORTUNITY. REALLY APPRECIATE IT.
>> BYE EVERYBODY.
* This transcript was compiled from uncorrected Closed Captioning.