Jun 26, 2023 Governance & Priorities Committee

[00:00:03]

>> I'LL CALL OUR GOVERNANCE AND PRIORITIES COMMITTEE MEETING FOR MONDAY,

[1. Opening Statement]

I'D LIKE TO BEGIN BY ACKNOWLEDGING THAT THE CITY OF YELLOWKNIFE IS LOCATED IN CHIEF DRAGHI'S TERRITORY.

FROM TIME IN MEMORIAL, IT'S BEEN THE TRADITIONAL LAND OF THE YELLOWKNIFE'S DANNY FIRST NATION.

WE RESPECT THE HISTORIES, LANGUAGES, AND CULTURES OF ALL OTHER INDIGENOUS PEOPLES, INCLUDING THE NORTH SLAVE MAI TAI, AND ALL FIRST NATIONS MAI TAI AND [INAUDIBLE] WHOSE PRESENCE CONTINUES TO ENRICH OUR VIBRANT COMMUNITY.

MS. BASSI-KELLETT, ANYTHING FURTHER TO ADD TO THE AGENDA?

[2. Approval of the Agenda.]

>> THANK YOU VERY MUCH, MADAM CHAIR.

NO, NOTHING ELSE TO ADD.

>> THANK YOU. WE HAVE DISCLOSURE PECUNIARY INTEREST IN THE GENERAL NATURE THEREOF.

[3. Disclosure of pecuniary interest and the general nature thereof.]

NEXT, WE HAVE A PRESENTATION REGARDING ASSET MANAGEMENT.

[4. A presentation regarding Asset Management.]

>> WITH PLEASURE. THANK YOU SO MUCH, MADAM CHAIR.

THE CITY HAS BEEN ADVANCING OUR APPROACH TO ASSET MANAGEMENT FROM DEVELOPING OUR ASSET MANAGEMENT ROADMAP UP TO FORMALIZING OUR COMMITMENTS THROUGH A PUBLIC POLICY THAT'S NOW ON THE FRONT PAGE OF OUR POLICY WEBSITE.

ASSET MANAGEMENT ESSENTIALLY ENSURES THAT WE ARE MANAGING OUR ASSETS IN A WAY THAT ENSURES THE STABLE AND COST-EFFECTIVE DELIVERY OF QUALITY PROGRAMS AND SERVICES TO YELLOWKNIFE, ASSESSING RISK AND MAINTAINING ASSETS TO DELIVER SERVICES TO A STANDARD THAT WE CAN BE PROUD OF.

SINCE COUNCIL ADOPTED THE ASSET MANAGEMENT POLICY IN 2021, ADMINISTRATION HAS CONTINUED TO ADVANCE OUR WORK ON THIS IMPORTANT PAN DEPARTMENTAL PRIORITY.

TODAY, WE'RE VERY PLEASED TO HAVE TWO PRESENTATIONS FOR GPC.

FIRST OF ALL, LAUGHLIN MCLAIN, THE CITY'S FORMER ASSET MANAGEMENT MANAGER AND NOW CONSULTING FOR US, WILL PROVIDE AN OVERVIEW OF THE WORK THAT'S BEEN DONE TO DATE BY THE CITY.

THEN STEVEN HOLVE, OUR ASSET MANAGEMENT MANAGER CURRENTLY, WILL BE ABLE TO LAY OUT THE STEPS THAT LAY BEFORE US GOING AHEAD.

I'LL TURN THINGS OVER NOW TO LAUGHLIN AND TO STEPHEN. THANK YOU.

>> THANK YOU VERY MUCH. I'M VERY PLEASED TO BE HERE TODAY AND THANK YOU FOR INVITING ME BACK TO TALK ONCE AGAIN ABOUT ASSET MANAGEMENT.

AS CITY MANAGER EXPLAINED, I WAS FORMERLY THE MANAGER OF ASSET MANAGEMENT IN GIS FOR THE CITY OF YELLOWKNIFE AND LIVED IN YELLOWKNIFE FOR 13 YEARS.

I'VE BEEN PRACTICING ASSET MANAGEMENT IN SOME WAY OR ANOTHER FOR THE PAST 14 YEARS.

MY BACKGROUND'S MECHANICAL ENGINEERING, BUT I'VE GOTTEN EXPERIENCE IN INDUSTRY AS WELL AS MUNICIPALITIES.

I'M ALSO PARTICULARLY PLEASED TO BE MAKING THIS PRESENTATION TODAY IN A PUBLIC FORUM SO THAT WE CAN SHARE A LITTLE BIT WITH CITIZENS ABOUT WHAT ASSET MANAGEMENT, WHY IT'S SO IMPORTANT TO THE WAY THINGS THAT THE CITY OF YELLOWKNIFE DOES.

START OFF WITH THE FIRST QUESTION THAT ALWAYS GETS ASKED, WHAT IS ASSET MANAGEMENT? NOW, THERE ARE MANY DEFINITIONS, I'VE PICKED OUT THIS ONE.

NOW, DEFINITIONS ARE NOT ALWAYS ENTIRELY USEFUL, BUT THIS COVERS ALL OF THE BASICS.

A SYSTEMATIC, DATA-BASED PRACTICE FOCUSED ON MAXIMIZING THE VALUE DELIVERED BY ASSETS.

AS A SYSTEMATIC PRACTICE, ASSET MANAGEMENT IS METHODICAL, PROCESS BASED.

USING DATA, IT'S OBJECTIVE, IT'S TRANSPARENT.

ULTIMATELY, THE GOAL IS TO MAXIMIZE THE VALUES.

IN A PUBLIC ORGANIZATION THAT'S IMPORTANT, AS WE WANT TO KNOW THAT TAXPAYER MONEY IS BEING USED AS EFFICIENTLY AS POSSIBLE.

IT ALSO ALLOWS COUNCIL TO SUPPORT THEIR DECISION-MAKING.

DECISIONS HAVE TO BE MADE.

YOU CAN'T ALWAYS WAIT FOR ALL OF ALL OF THE INFORMATION.

APPLYING ASSET MANAGEMENT BUILDS UP THE DATA TO SUPPORT DECISIONS AS THEY COME SO THAT COUNCIL CAN FEEL THAT THEY'RE ABLE TO PROVE THAT THEY'RE NOT ONLY MAKING A GOOD DECISION FOR NOW, BUT THAT THEY'RE ALSO MAKING GOOD DECISIONS TO SUPPORT THE LONG TERM.

AS A PRACTICE THAT IS INTERESTED IN DELIVERING VALUE, ASSET MANAGEMENT IS ACTUALLY APPLICABLE TO ANY ORGANIZATION, PRIVATE, PUBLIC, BUT IT COMES DOWN TO HOW YOU DEFINE VALUE.

FOR A MUNICIPALITY, WHAT IS THE GOAL OF COMMUNITY GOVERNMENT? SERVICES. ALL MUNICIPAL GOVERNMENTS EXIST TO PROVIDE SERVICES TO THEIR CITIZENS.

NOW, THE DECISIONS COME IN MAKING TRADE-OFFS, BECAUSE IN DELIVERING SERVICES, YOU INTRODUCE RISKS.

THAT'S RISK THAT YOU CAN'T DELIVER THE SERVICE THAT PEOPLE ARE RELYING ON,

[00:05:01]

THIS IS THE FUNDAMENTAL TRADE-OFF THAT COUNCIL IS CONSTANTLY MAKING DECISIONS ON.

NOW, YOU MIGHT NOT USE THESE WORDS THAT MIGHT NOT BE SO EXPLICIT, BUT WHEN YOU START TO THINK ABOUT THE DECISIONS YOU'RE MAKING, MENTALLY, WE'RE ALWAYS TRYING TO TRADE OFF BETWEEN THESE THREE THINGS.

NOW, IN A PRETTIER WAY, BALANCING THIS IS REALLY WHAT A MUNICIPALITY IS ALL ABOUT.

HOW DO WE FIND A BALANCE BETWEEN DELIVERING SERVICES, THE RISKS THAT THAT PRESENTS, AND WHAT IT COSTS TO DELIVER THOSE? WE CAN CAPTURE THIS BALANCED BY SAYING THAT THE GOAL OF THE CITY IS TO DELIVER SERVICES AT THE MINIMUM SUSTAINABLE COST.

I'M GOING TO TALK ABOUT THIS JUST A LITTLE BIT MORE.

YOU CAN IMAGINE IF WE'RE DELIVERING MORE SERVICES OR A HIGHER LEVEL OF SERVICE, THAT'S GOING TO COME WITH INCREASED RISKS.

WE'RE TRYING TO ACHIEVE A GREATER, GREATER OUTCOME.

IT'S HARDER TO MAKE THAT ACHIEVEMENT.

IT'S ALSO GOING TO COST MORE.

YOU'RE TRYING TO DELIVER MORE, THAT COMES WITH THE DIRECT COST.

ANOTHER WAY OF LOOKING AT THIS, THOUGH, WITHOUT INCREASING SERVICES, IS IF WE DON'T MANAGE OUR RISKS, AT SOME POINT, WE'RE GOING TO HAVE AN EVENT.

THEN THE COST THAT IT TAKES TO ADDRESS THE CONSEQUENCES OF THAT EVENT AND TO TRY AND PREVENT THOSE TYPES OF EVENTS FROM HAPPENING AGAIN, YOU'VE GOT TO FIND THE MONEY FROM SOMEWHERE.

THAT'S GOING TO IMPACT SERVICES, MAYBE NOT THE SERVICES THAT THE EVENT HAPPENED FOR.

LASTLY, IF YOU DON'T COLLECT ENOUGH MONEY, SAY FOR INSTANCE, YOU START TO DELIVER A SERVICE AND YOU GET A VERY GENEROUS GRANT FOR THE ASSETS NEEDED TO START DELIVERING THAT SERVICE, YOU COLLECT THE TAX BASE TO COVER OFF THE OPERATIONS AND MAINTENANCE COSTS, BUT YOU DON'T COLLECT ENOUGH MONEY TO REPLACE THAT ASSET AT THE END OF ITS LIFE.

YOU CAN'T DELIVER THAT SERVICE ANYMORE.

THIS BALANCE, YOU'RE ALWAYS TRYING TO ACHIEVE IT, AND EQUILIBRIUM, THE BALANCE WILL ASSERT ITSELF WHETHER YOU LIKE IT OR NOT.

THE REAL QUESTION IS, ARE WE IN CONTROL OF THE BALANCE? HOW DOES ASSET MANAGEMENT FIT INTO THIS? WELL, CITY DELIVER SERVICES.

IT OWNS ASSETS TO DELIVER SERVICES.

THAT'S THE ONLY REASON WE OWN ASSETS, IS TO DELIVER SOME KIND OF SERVICE IN SOME WAY.

OWNING ASSETS AND DELIVERING SERVICES INTRODUCE THE RISKS.

SPECIFICALLY, IT INTRODUCES THE MINIMUM RISK THAT IF THE ASSET FAILS, YOU CAN'T DELIVER WHATEVER SERVICE YOU OWN THAT ASSET FOR, AND MANAGING ASSETS AND RISKS COSTS MONEY.

ASSET MANAGEMENT IS IMPORTANT TO MUNICIPALITIES BECAUSE THE ASSETS THAT THE CITY OWNS MAKES UP A VAST MAJORITY OF ITS BOOK VALUE, ITS OPERATING EXPENSES, AND ITS FUTURE EXPENDITURES.

NOW I'M GOING TO BREAK DOWN EACH ONE OF THESE AND DESCRIBE SOME OF THE CONCEPTS AND HOW WE APPLY THEM WITHIN THE MUNICIPAL CONTEXT.

WE'RE GOING TO START OFF WITH SERVICES.

WE TALKED ABOUT THIS AS LEVELS OF SERVICE.

NO, I CAN'T DO THIS AS A CONVERSATION, CAN I? WHY ARE LEVELS OF SERVICE IMPORTANT? WELL, THEY SET COMMON EXPECTATIONS.

CITIZENS PAY TAXES, THEY EXPECT TO GET SERVICES.

WHAT ARE THEY EXPECTING TO GET? ADMINISTRATION IS BEING TASKED AT DELIVERING SERVICES.

WHAT ARE THEY EXPECTED TO DELIVER? IF THERE'S A DISCONNECT BETWEEN THOSE TWO THINGS, IT CAN LEAD TO A LOT OF DISSATISFACTION.

I'M NOT SURE IF PEOPLE HAVE HEARD THE FORMULA THAT HAPPINESS EQUALS REALITY MINUS EXPECTATIONS.

IF YOU WERE EXPECTING MORE THAN REALITY WILL DELIVER, YOU ARE NOT GOING TO BE HAPPY.

IT ALSO SETS CLEAR GOALS FOR ADMINISTRATION.

IF WE WRITE DOWN AND ARTICULATE WHAT WE'RE DELIVERING, THAT BECOMES MUCH EASIER TO HIT AS A GOAL.

IT ALSO ALLOWS US TO CELEBRATE SUCCESS.

I FEEL LIKE A LOT OF THE TIME IN ORGANIZATIONS CONVERSATIONS FOCUS ON WHAT DIDN'T GO ACCORDING TO PLAN, WHAT'S NOT HAPPENING, WHEN A MAJORITY OF THE TIME, MOST THINGS ARE ACTUALLY GOING ALL RIGHT AND ARE HAPPENING AND ARE BEING DELIVERED.

IF WE'RE SPECIFIC ABOUT THOSE LEVELS OF SERVICE, IT ALLOWS US TO CELEBRATE ALL THE THINGS THAT ARE GOING WRONG, WHILE STILL ALLOWING US TO FOCUS IMPROVEMENT WHERE IT NEEDS TO BE FOCUSED.

[00:10:03]

YOU IDENTIFY THE ASSETS NECESSARY TO DELIVER THOSE SERVICES.

THEN YOU DESCRIBE THE LEVELS OF SERVICE THAT YOU ARE TRYING TO DELIVER.

YOU IDENTIFY MEASUREMENTS FOR PERFORMANCE.

YOU IDENTIFY THE GAPS IN PERFORMANCE.

THEN YOU IDENTIFY A PLAN TO CLOSE THOSE GAPS AND THEN YOU DISCUSS HOW YOU'RE GOING TO CLOSE THOSE GAPS.

THAT CAN BE INCREASING COSTS, THAT CAN BE LOWERING LEVELS OF SERVICE, THAT CAN BE A MIX OF BOTH.

WITH LEVELS OF SERVICE THOUGH, IT'S ABOUT GETTING VERY SPECIFIC.

WHAT EXACTLY DO WE DELIVER? WHO IS GOING TO GET THIS SERVICE? HOW MUCH OF IT SHOULD THEY EXPECT TO GET? WHEN IS IT AVAILABLE TO THEM? WHAT QUALITY SHOULD THEY EXPECT? HOW AVAILABLE IS IT? WHAT ARE THE RISKS ASSOCIATED WITH THAT SERVICE? HOW MUCH IS IT GOING TO COST? YOU HAVE TO GET VERY SPECIFIC TO MAKE SURE THAT THOSE EXPECTATIONS THERE'S NO ROOM FOR CONFUSION BETWEEN WHAT THE CITY IS EXPECTED TO DELIVER AND WHAT CITIZEN SHOULD EXPECT TO RECEIVE.

ON THE ADMINISTRATION SIDE, LEVELS OF SERVICE HELP BY FRAMING, HOW ARE WE GOING TO PROVE THIS? WHEN WE KNOW WHAT OUTCOMES WE'RE TRYING TO MEASURE, THEN YOU CAN GO AND LOOK FOR HOW YOU COLLECT THE DATA TO PROVE THAT AS PART OF YOUR DAY-TO-DAY OPERATIONS, YOU CAN SET UP THE PROCESSES WITHIN YOUR ORGANIZATION TO COLLECT THAT, SO IT'S AVAILABLE WHEN IT'S NEEDED.

AND LASTLY, WHAT'S THE COMMUNICATION PLAN AROUND THIS? HOW ARE WE GOING TO COMMUNICATE THAT WE ARE DELIVERING WHAT'S BEING ASKED FOR? FOR PEOPLE THAT ARE MORE VISUAL, THIS IS WHAT THE BREAKDOWN LOOKS LIKE.

YOU START WITH A SERVICE, BE ANY KIND OF SERVICE THAT GETS DELIVERED, AND YOU BREAK THAT UP INTO RELEVANT CHARACTERISTICS.

EACH OF THOSE CHARACTERISTICS WOULD GET A STATEMENT THAT YOU'RE COMMITTING TO.

WHEN YOU HAVE A COMMITMENT FOR THAT CHARACTERISTIC, YOU THEN COME UP WITH A MEASUREMENT THAT'S TRYING TO REPRESENT HOW PEOPLE ARE RECEIVING THAT SERVICE.

AN EXAMPLE OF HOW THE CITY IS DOING THAT IS THROUGH CLICK AND FIXED YK.

THAT'S DIRECT CITIZEN FEEDBACK ON HOW THEY FEEL ABOUT A SERVICE.

INTERNALLY, YOU COME UP WITH THE MEASUREMENTS FOR ACTIVITIES THAT SUPPORT THOSE OUTCOMES.

PEOPLE WITHIN THE ORGANIZATION, THE ACTIVITIES THEY DO SHOULD BE SUPPORTING THE OUTCOMES OF SERVICE DELIVERY IN ONE WAY OR ANOTHER.

WITH THE TECHNICAL PERFORMANCE MEASURES, THIS IS INTERNAL MEASUREMENTS.

ARE WE DOING THOSE INSPECTIONS? ARE WE DOING THOSE CHECKS? CURRENTLY, AT THE CITY OF YELLOWKNIFE USING CITY WORKS, THAT'S THE PROGRAM THAT WOULD HELP MONITOR AND TRACK THE TECHNICAL PERFORMANCE MEASURES.

BUT THESE HAVE TO BE COME UP WITH, YOU HAVE TO GENERATE THIS AND IT'S NO GOOD COMING UP WITH A MEASUREMENT THAT YOU CAN'T SUPPORT WITH DATA THAT YOU CAN COLLECT.

ANYBODY CAN COME UP WITH AN IDEA ABOUT WHAT TO MEASURE BUT IF YOU DON'T KNOW HOW YOU'RE GOING TO GET THE DATA, THEN IT'S USELESS.

THIS IS THE FRAMEWORK WE APPLY AND IT TAKES SOME TIME TO BUILD JUST FOR ONE SERVICE.

I HAVE SOME TRIVIA, BUT OF COURSE, I'M JUST GOING TO PAUSE FOR A MOMENT AND LET YOU THINK OF YOUR ANSWER IN YOUR HEAD AND THEN I WILL SPEAK BECAUSE YOU CAN'T SPEAK TO ME DIRECTLY.

ROUGHLY, HOW MANY SERVICES DOES THE CITY OF YELLOWKNIFE PROVIDE? THERE BEEN SOME PRELIMINARY WORK DONE TO TRY AND IDENTIFY THESE SERVICES, SO PUT YOUR ANSWER IN YOUR MIND, 60-100 SERVICES.

THESE ARE NOT NECESSARILY HUGELY ASSET-DEPENDENT SERVICES, THEY MIGHT BE RELATIVELY SMALL SERVICES THAT ARE SERVING JUST A SMALL GROUP BUT ANY SERVICE THAT WE DELIVER, IS ALL SUBJECT TO THIS IDEA THAT WE NEED TO MEASURE.

ARE WE DELIVERING IT? HOW ARE WE DELIVERING IT? ARE PEOPLE HAPPY WITH IT? LET'S TALK A LITTLE BIT NOW ABOUT RISK.

RISK MANAGEMENT IS ITS OWN FIELD.

BUT ASSET MANAGEMENT NEEDS RISK MANAGEMENT.

IT USES RISK MANAGEMENT BECAUSE THERE ARE INHERENT RISKS IN OWNING AND OPERATING ASSETS THAT NEED TO BE COMPARED AGAINST OTHER ORGANIZATIONAL RISKS THAT ARE NOT ASSET DEPENDENT.

I'M GOING TO COVER THE GENERAL CONCEPTS AROUND RISK MANAGEMENT AND THEN TAKE IT INTO ASSET MANAGEMENT AND DESCRIBE HOW WE USE THAT.

WHAT IS RISK? I THINK WE ALL INTUITIVELY HAVE A SENSE OF WHAT RISK IS, BUT IT CAN BE CHALLENGING TO TALK ABOUT IT, TO DESCRIBE IT, BECAUSE WE ALL INTERPRET RISK A LITTLE BIT DIFFERENTLY.

[00:15:02]

IN RISK MANAGEMENT, WE APPROACH RISK WITH THE IDEA THAT IT IS THE LIKELIHOOD OF AN EVENT TIMES THE SEVERITY OF THE EVENT, OR YOU CAN THINK OF IT AS TIMES.

BUT ESSENTIALLY THERE ARE TWO COMPONENTS, LIKELIHOOD AND SEVERITY.

THE LANGUAGE OF RISK MANAGEMENT, YOU START WITH A HAZARD.

HAZARD IS ANYTHING THAT COULD LEAD TO AN EVENT.

THE RISK IS THE THING THAT'S HAPPENING AND RISK CAN BE BROKEN UP INTO MANY DIFFERENT TYPES OF OUTCOMES.

YOU CAN HAVE, FOR EXAMPLE, FINANCIAL RISK, HEALTH AND SAFETY RISK, ENVIRONMENTAL RISK, COMMUNITY TRUST RISK IN THE SENSE OF A MUNICIPALITY.

YOU CAN HAVE A SINGLE EVENT THAT HAS MULTIPLE OUTCOMES OF DIFFERENT KINDS.

IF WE HAVE, SAY, A SEWER MAIN RUPTURE, THERE'S DEFINITELY FINANCIAL IMPACTS.

THERE ARE LIKELY HEALTH AND SAFETY IMPACTS AND ENVIRONMENTAL IMPACTS, AND THERE ARE LIKELY SOME FORM OF COMMUNITY TRUST IMPACTS.

RISK MANAGEMENT IS ABOUT TRYING TO THINK OF THIS IN ADVANCE AND TRYING TO ESTIMATE WHAT THE OVERALL OUTCOMES ARE GOING TO BE.

HOW DO WE COMPARE THEM AND HOW DO WE DECIDE WHAT TO SPEND MONEY ON AND WHAT NOT TO? THIS IS A TOOL THAT'S USED TO DO THAT.

IT'S CALLED A RISK MATRIX.

THEY CAN BE THREE-BY-THREE, THEY CAN BE FIVE-BY-FIVE, THEY CAN BE 10 BY 10. PICK YOUR NUMBERS.

BUT THE MAIN COMPONENTS ARE THAT ON THE LEFT YOU CAN SEE SEVERITY RANKINGS 1-5 AND IN THE MIDDLE, THIS IS WHERE YOU WOULD DEFINE THE OUTCOMES FOR EACH OF THOSE LEVELS AND EACH OF THOSE TYPES OF RISKS.

FOR EXAMPLE, MULTIPLE FATALITIES WOULD BE A SEVERITY LEVEL 5 UNDER HEALTH AND SAFETY.

THEN ON THE RIGHT-HAND SIDE, TOWARDS THE BOTTOM, YOU CAN SEE LIKELIHOOD.

ONE MIGHT BE AN EVENT THAT'S RARE, MIGHT OCCUR ONCE IN 50 YEARS WHEREAS 5 MIGHT BE SOMETHING THAT IS EXPECTED TO OCCUR EVERY YEAR, MAYBE EVEN MORE FREQUENTLY.

WHAT YOU DO WITH THAT VERY COLORFUL BOX ON THE RIGHT IS YOU COLOR IT ACCORDING TO HOW YOU WANT TO TREAT THOSE RISKS.

YOU CAN SEE HERE, LOW-RISK, MEDIUM-RISK, HIGH-RISK CRITICAL RISKS.

THEY EACH HAVE A DIFFERENT COLOR.

THOSE COLORS ARE ASSOCIATED WITH THE ACTION THAT YOU NEED TO TAKE ONCE YOU ASSESS THAT RISK.

YOU CAN SEE HERE, FOR INSTANCE, IF YOU HAD A SEVERITY LEVEL 2, AT A LIKELIHOOD LEVEL 3, IT'S CONSIDERED A LOW-RISK, YOU PROBABLY WOULDN'T DO ANYTHING TO TREAT THAT RISK BUT IF YOU HAVE SOMETHING THAT IS A SEVERITY LEVEL 4, AND A LIKELIHOOD LEVEL 4, IT COMES OUT AS A HIGH RISK, YOU WOULD NEED TO HAVE PRESCRIBED ACTIONS THAT YOU WOULD TAKE.

THIS IS THE RISK MANAGEMENT FRAMEWORK.

YOU IDENTIFY RISKS.

YOU TRY AND ANALYZE WHAT THEIR LIKELIHOOD AND SEVERITY COULD BE IN VARIOUS WAYS.

YOU THEN LOOK AT THE FINAL RISK RANKING AND DETERMINE WHETHER YOU'RE GOING TO ACCEPT THIS RISK OR NOT.

IF YOU'RE NOT GOING TO ACCEPT IT, YOU DECIDE HOW ARE WE GOING TO TREAT THIS RISK AND THEN IF YOU PUT ANY KIND OF TREATMENT INTO PLACE, YOU HAVE TO MONITOR IT AND REVIEW IT FOR ITS EFFECTIVENESS.

IF IT STOPS BEING EFFECTIVE, YOU NEED TO DO SOMETHING ELSE, YOU NEED TO REVISIT THAT RISK.

VERY IMPORTANTLY, ALL OF THOSE STEPS ARE DOCUMENTED.

THE DOCUMENTATION IS REALLY VALUABLE BECAUSE NOW THIS BECOMES A TOOL FOR COLLECTING ORGANIZATIONAL KNOWLEDGE.

HOW DO WE VIEW THESE THINGS? WHAT RISKS DO WE NEED TO REMEMBER? AS YOU HAVE STAFF TURNOVER, A PERSON CAN COME IN AND LOOK AT THESE RISK REGISTERS AND GET A VERY QUICK EDUCATION AS TO WHAT THEY NEED TO BE PAYING THE MOST ATTENTION TO, WHAT WE'RE DOING ABOUT IT, AND WHAT THEY NEED TO MONITOR. ASSETS. HOW DO THEY FIT INTO THIS WHOLE THING? IF THE GENERAL APPROACH FOR RISK IS LIKELIHOOD AND SEVERITY, WHEN IT COMES TO ASSETS, WE CAN LOOK AT LIKELIHOOD AS AN ASSET'S CONDITION.

IF IT'S IN POOR CONDITION, IT'S LIKELY TO FAIL.

IT'S IN GREAT CONDITION, IT'S NOT LIKELY TO FAIL.

WHEN WE LOOK AT SEVERITY, WE THINK OF CRITICALITY.

YOU CAN IMAGINE THAT THE CRITICALITY OF A WATER MAIN THAT IS FOUR INCHES ACROSS IS NOT AS HIGH AS A WATER MAIN THAT IS MAYBE 10 INCHES ACROSS.

YOU COME UP WITH THESE STANDARD DEFINITIONS AND THEN YOU APPLY IT TO YOUR ASSET PORTFOLIO TO TRY AND SIFT OUT WHAT ARE THE HIGHEST RISKS?

[00:20:05]

I WANT TO DRAW THESE OUT SPECIFICALLY FOR COUNSEL.

MANAGING RISK MEANS SPENDING MONEY IDEALLY, SO THAT NOTHING HAPPENS.

THIS IS A CHALLENGE.

PEOPLE ARE USED TO GETTING SOMETHING VERY TANGIBLE FOR THEIR MONEY.

WHAT RISK MANAGEMENT DOES BY MAKING THESE DECISIONS MORE IMPLICIT IS RETRYING TO DRAW THE LINKS BETWEEN THE ACTIVITIES THAT YOU'RE DOING FOR THE MONEY THAT YOU'RE SPENDING AND HOW THOSE ARE GOING TO PREVENT OUTCOMES FROM HAPPENING.

RISK MANAGEMENT IS A PREVENTATIVE PRACTICE AND ALL PREVENTATIVE PRACTICES SUFFER FROM THE SAME PROBLEMS. ONE IS THAT IF NOTHING HAS HAPPENED, WE ALL HAVE A TENDENCY TO THINK THAT NOTHING IS GOING TO CONTINUE TO HAPPEN, WHICH IS NOT TRUE.

THE OTHER THING IS THAT IT'S REALLY HARD TO PROVE THAT SOMETHING WOULD HAVE HAPPENED IF WE HADN'T SPENT THE MONEY.

BY BRINGING THIS FORMALIZED APPROACH, WE'RE REALLY TRYING TO DRAW UP AND MAKE CLEAR WHAT THAT MONEY IS BEING SPENT ON SO THAT IT'S SEEN AS AN INVESTMENT AND NOT AS A COST.

SECOND CHALLENGE IS THAT THERE IS NO ZERO-RISK SCENARIO UNLESS YOU DO NOTHING AND THAT'S NOT AN OPTION.

THIS INHERENTLY MEANS THAT THERE ARE SOME RISKS THAT WE HAVE TO ACCEPT AND ACCEPTING RISK IS COUNCIL'S ROLE.

WHEN IT COMES TO RISK MANAGEMENT, ADMINISTRATION CAN IDENTIFY THE RISKS, IDENTIFY POTENTIAL TREATMENTS CONTROLS, AND WHAT THOSE ARE GOING TO COST AND THEY'RE THE ONES TO EXECUTE THE MANAGEMENT OF THOSE CONTROLS.

THEY'RE THE ONES DOING THE REVIEWS HOW EFFECTIVE IS THIS? BUT ULTIMATELY, COUNCIL SETS THE ORGANIZATION'S RISK TOLERANCE.

YOU DETERMINE ACCEPTABLE RISK LEVELS BY WHAT YOU APPROVE TO SPEND MONEY ON.

IF YOU DON'T APPROVE THE MONEY TO REDUCE THE RISK, YOU ARE INHERENTLY ACCEPTING THE RISK.

LET'S TALK ABOUT COST.

WHEN WE TALK ABOUT COST, MOST OF THE TIME, PEOPLE ARE TALKING ABOUT CAPITAL COSTS AND OPERATIONAL COST AND THEY'RE THINKING ABOUT HOW DO I DO THIS AS CHEAPLY AS POSSIBLE? HOW DO I BUILD IT AS CHEAPLY AS POSSIBLE? AND THEN HOW DO I OPERATE IT AS CHEAPLY AS POSSIBLE.

WITH THE IDEA THAT IF YOU'RE DOING BOTH OF THOSE INDIVIDUAL THINGS AS CHEAPLY AS POSSIBLE, THE OUTCOME IS THAT IT IS THE CHEAPEST AND MOST COST-EFFECTIVE WAY THAT YOU CAN DO SOMETHING.

THERE'S A DIFFERENT WAY TO LOOK AT IT.

LIFE-CYCLE COSTS.

WHAT LIFE CYCLE COST DOES IS IT ASKS YOU TO LOOK AT THE COST OF OWNING AN ASSET THROUGH ITS ENTIRE LIFE.

ACQUIRING IT, OPERATING, AND MAINTAINING IT, ANY CAPITAL RENEWALS THAT YOU'LL NEED TO DO, AND THE FINAL DISPOSAL.

THINK ABOUT THIS BEFORE YOU BUY THE ASSET.

BECAUSE BEFORE YOU BUY THE ASSET IS THE OPPORTUNITY TO START MAKING TRADE-OFFS BETWEEN THESE TWO THINGS.

FOR INSTANCE, YOU CAN SPEND MORE WHEN YOU ACQUIRE THE ASSET TO ADD INSULATION, WHICH THEN LOWERS YOUR OPERATIONAL AND MAINTENANCE COST MORE THAN WHAT YOU ARE ADDITIONALLY SPENDING ON ACQUISITION.

THIS FUNDAMENTALLY SUPPORTS DELIVERING SERVICES AT MINIMUM SUSTAINABLE COST BECAUSE WHEN YOU ARE LOWERING THE LIFE CYCLE COST, YOU ARE GETTING THAT TO ITS MINIMUM.

THAT'S THE MINIMUM COST OF OWNERSHIP OVER TIME.

THE RISK, IF YOU COMPARTMENTALIZE, IS YOU GET STUCK WITH THINGS THAT ARE GOING TO BE EXPENSIVE TO FIX AND EXPENSIVE TO OPERATE.

MORE TRIVIA. WHICH HAS THE LOWER LIFE CYCLE COST? OPTION 1, 10 MILLION TO BUILD,200,000 O&M ANNUALLY AND A 20-YEAR LIFE.

OPTION 2, TO TWICE AS EXPENSIVE TO BUILD, HALF AS MUCH TO OPERATE AND A 10 YEAR LONGER LIFE.

I'M GOING TO HELP PEOPLE OUT WITH THE MATH.

I KNOW YOU CAN'T DO THE MATH ON THE FLY.

$700,000 A YEAR FOR OPTION 1.

INTUITIVELY, MOST PEOPLE WILL SAY, WELL OPTION 2, BECAUSE THEY LOOK AT THAT LOWER O&M COSTS AND THE LONGER LIFE AND THEY SAY THAT'S GREAT.

IT'S ACTUALLY IN THIS CASE, MORE EXPENSIVE.

THE REASON I DO THIS SPECIFICALLY IS JUST TO SHOW YOU THE VALUE OF HAVING THE DATA AND RUNNING THE NUMBERS AS OPPOSED TO TRUSTING YOUR GUT.

BUT, I DO WANT TO HONOR SOME ASPECT OF THAT OPINION,

[00:25:01]

FIVE YEARS HAS BIG IMPACT.

WE'RE GOING TO TALK A LITTLE BIT MORE ABOUT THAT LATER.

IT'S ANOTHER TRIVIA QUESTION.

ARE GIFTED ASSETS ACTUALLY FREE? IT'S GREAT. YOU'RE NOT PAYING THAT ACQUISITION COSTS.

THAT CAN BE BIG, BUT YOU'RE ON THE HOOK.

YOU'RE ON THE HOOK FOR O&M, YOU'RE ON THE HOOK FOR THE RENEWAL, YOU'RE ON THE HOOK FOR THE EVENTUAL REPLACEMENT OF THAT ASSET, YOU'RE ON THE HOOK FOR THE DISPOSAL, AND YOU'RE ON THE HOOK FOR INCREASED EXPECTATIONS AROUND LEVEL OF SERVICE.

HERE'S A QUESTION. WE'RE GOING TO GO THROUGH THIS AS AN EXAMPLE.

IT'S A VERY SIMPLE QUESTION.

I CAN EASILY IMAGINE IT BEING ASKED BY A COUNSELOR.

HOW OFTEN SHOULD WE REPLACE OUR GRADERS? TO ANSWER THAT, WE'RE GOING TO USE THE LIFE-CYCLE COST PRINCIPLE.

HERE WE CALL IT COST OF OWNERSHIP.

YOU WANT TO WORK IT OUT ON AN HOURLY BASIS SO ON THE TOP YOU TAKE YOUR CAPITAL COST, YOUR FUEL COST TO OPERATE, YOUR CONSUMABLE COSTS AND MAINTENANCE COSTS OVER TIME.

THEN THE RESIDUAL VALUE IS WHATEVER YOU GET FOR THAT GREATER AT THE END OF LIFE WHEN YOU AUCTION IT OFF OR SELL IT, IT'S GREEN BECAUSE YOU'RE GETTING MONEY BACK, AND YOU DIVIDE THAT BY THE OPERATING HOURS.

WE'RE REALLY ASKING FOR THE LOWEST COST OF OWNERSHIP.

WHEN IS THIS NUMBER AT ITS SMALLEST? THIS IS HOW THINGS GO INTO IT.

THE HOURLY COST OF CAPITAL WORKS LIKE THIS.

YOU BUY A GREATER FOR $400,000 AND YOU OPERATE IT FOR ONE HOUR.

YOUR CAPITAL COST IS $400,000 AN HOUR.

I DON'T SUGGEST DOING THAT.

IF YOU OPERATE IT FOR 10,000 HOURS, IT'S $40 AN HOUR AND IT GOES DOWN.

THIS IS WHY IN THAT FIRST EXAMPLE THAT FIVE YEARS ON THE ASSET LIFE MADE SUCH A BIG DIFFERENCE TO THE ANNUAL OPERATING COST.

"COST OF FUEL AND CONSUMABLES." THESE ARE ACTUALLY EXPECTED TO BE PRETTY STEADY THROUGHOUT THE LIFE OF THIS PIECE OF EQUIPMENT.

BASED ON THE LOAD AND THE SERVICE, YOU'RE GOING TO CONSUME GRADER BLADES AT A SET AMOUNT OIL FILTERS.

YOU'RE GOING TO USE A FUEL AT PRETTY MUCH A CONSISTENT RATE.

IT'S A BASICALLY A FLAT LINE AND WE'RE GOING TO GET RID OF IT LATER, BUT I WANTED TO TALK ABOUT IT.

THE COST OF MAINTENANCE OVER TIME INCREASES.

WEAR, CORROSION, AND FATIGUE ALL BUILD-UP IN THAT PIECE OF EQUIPMENT CAUSING LARGER AND LARGER REPAIRS THAT ON AVERAGE OVER THE LIFE OF THAT OPERATING INCREASE THAT COST, AND THIS IS WHAT SETS THE LIMIT ON THE LIFE.

THEN LASTLY, THE RESIDUAL VALUE.

IT LOOKS VERY SIMILAR TO THE CAPITAL CURVE.

IT'S A LITTLE STEEPER BECAUSE YOU CAN BUY THAT $400,000 GRADER AND YOU CAN OPERATE IT FOR ONE HOUR, AND IF YOU BRING IT BACK TO THE DEALER AND TRY AND SELL IT BACK, YOU ARE NOT GETTING $400,000 [LAUGHTER].

IT'S LOWER AND IT IS PRETTY STEEP.

WHEN WE PUT ALL OF THESE TOGETHER, LIKE I SAID, WE CAN GET RID OF THE FUEL AND CONSUMABLES.

YOU CAN SEE ON THE LEFT, THESE ARE THE LINES, THESE ARE, THEY REPRESENT.

YOU ADD THOSE LINES TOGETHER AND IT GIVES YOU THE CURVE ON THE RIGHT.

THE TIME THAT YOU SHOULD BE REPLACING THIS VEHICLE, THE REPLACEMENT FREQUENCY, IT'S WHEN IT'S LOWEST.

IN THIS CASE, WE'LL SAY AROUND 9,000 HOURS. THIS IS JUST AN EXAMPLE.

BUT WHAT DOES THAT ACTUALLY MEAN? WHY IS THIS IMPORTANT? WHY ARE YOU SHOWING YOU THIS? THE NUMBERS.

AT THAT 9,000 FREQUENCY YOU'VE GOT AN AVERAGE OF $61 AN HOUR.

IF YOU WERE TO EXTEND THAT LIFE OUT, WHICH MOST PEOPLE WOULD SAY EXTENDING LIFE IS GREAT BECAUSE WE'RE GOING TO GET THE MOST VALUE OUT OF THAT VEHICLE.

IF YOU ARE REPLACING IT EVERY 16,000 HOURS, IT'S ACTUALLY COSTING YOU $69 AN HOUR.

AND THE DIFFERENCE WHEN YOU'RE OPERATING 1,000 HOUR A YEAR, THE DIFFERENCE WORKS OUT TO BE $8,000 A YEAR PER UNIT.

NOW THIS IS NOT MONEY BACK IN YOUR POCKET THAT YOU CAN SPEND ON SOMETHING ELSE, BUT IT'S REDUCED TO TRANSFER RATES ON AVERAGE TO YOUR MUNICIPAL EQUIPMENT RESERVE FUND.

BUT WE CAN SHOW THAT THIS IS, IN THIS EXAMPLE, THE RIGHT FREQUENCY TO REPLACE THAT AND THAT WE'RE DELIVERING WHATEVER SERVICE WE CAN WITH THIS GRADER AT ITS MINIMUM COST.

WHENEVER I SHOW THAT EXAMPLE TO PEOPLE, THEY'RE LIKE, "GREAT. THAT IS AMAZING.

I WANT THAT ALL THE TIME." WHY DON'T WE HAVE THAT ALL THE TIME? WE LIVE IN THE REAL-WORLD.

TO PRODUCE THOSE GRAPHS TAKES A PYRAMID OF DATA.

YOU NEED THE PURCHASE COST HISTORY.

YOU NEED THE HISTORICAL UNIT HOURS.

[00:30:03]

YOU NEED THE RESIDUAL VALUES FROM AUCTIONS AND TRADE-IN.

YOU NEED ALL OF THOSE TO BE PRETTY FLAWLESS TO PUT THEM TOGETHER IN ORDER TO ANALYZE IT.

THAT'S JUST FOR ONE PIECE OF EQUIPMENT.

NOW IF WE BUILD OUR SYSTEMS, KNOWING THAT WE WANT THESE OUTCOMES THIS BECOMES A LOT EASIER.

IF YOU'RE JUST PICKING THE DATA APART AND TRYING TO COLLECT IT FROM WHERE IT IS AND PUT IT TOGETHER, IT TAKES A LOT OF TIME.

THAT WAS JUST GRADERS.

HERE'S ANOTHER VERY SIMPLE QUESTION TO ASK, VERY COMPLICATED TO ANSWER.

HOW MUCH SHOULD WE CHARGE FOR WATER? TO FIGURE THAT OUT, AT A HIGH LEVEL YOU NEED THE LIFE-CYCLE COST OF ALL OF THE ASSETS THAT ARE SUPPORTING THE DRINKING WATER SERVICE.

YOU NEED TO KNOW THE OPERATIONAL COSTS OF THE PEOPLE INVOLVED.

THEN YOU WOULD NEED TO WORK THAT OUT ON AN ANNUAL BASIS.

YOU WOULD NEED TO FIGURE OUT HOW MUCH WATER WE ARE BILLING FOR EACH YEAR, NOT PRODUCING.

BILLING FOR EACH YEAR AND THEN FIGURE IT OUT.

THAT IS A LOT OF DATA.

I THINK THE CITY HAS MOST OF IT, IT'S JUST THAT IT'S IN EACH OF ITS AREAS.

WHEN YOU COME AT IT FROM AN ASSET MANAGEMENT PERSPECTIVE, YOU'RE LOOKING TO BUILD THE LINKS BETWEEN THESE REPOSITORIES OF DATA SO THAT IT'S MUCH EASIER TO ANSWER THESE QUESTIONS TO INFORM THE DECISIONS THAT YOU'RE MAKING ABOUT COST.

TRIVIA, "WHICH PART OF THE LIFE-CYCLE TYPICALLY COSTS THE MOST?" OPERATIONS AND MAINTENANCE.

IN THE LIFE CYCLE OF AN ASSET ITS OPERATIONS AND MAINTENANCE COST IS TYPICALLY THE HIGHEST.

HOWEVER, "WHICH ASPECT OF LIFE CYCLE COST CARRIES THE MOST RISK TO SERVICES?" SPECIFICALLY THE REPLACEMENT PART.

WE'RE GOING TO USE SOME REAL EXAMPLES FROM THE CITY.

LIFE-CYCLE COST FOR CITY HALL.

IT WAS BUILT IN 1976, FOR $1.9 MILLION, WHICH SOUNDS PRETTY NICE RIGHT NOW.

IT'S ESTIMATED USEFUL LIFE, 50 YEARS.

THAT WAS AT THE TIME, IT'S ON THE BOOKS, FOR 50 YEARS UNTIL 2026, WE'LL SEE.

ANNUAL OPERATIONS BUDGET, $306,000, ANNUAL MAINTENANCE $116,000 A YEAR.

IF YOU TAKE 1.9 MILLION AND DIVIDE IT BY 50,000 THAT\S $38,000 A YEAR.

A SIGNIFICANTLY HIGHER PORTION OF THE COSTS OF OWNING THIS ASSET COMES FROM ITS ANNUAL OPERATIONS AND MAINTENANCE.

BUT WHEN WE LOOK AT THE REPLACEMENT COST, IT'S ESTIMATED TO COST $22 MILLION TO REPLACE THIS BUILDING.

THAT WORKS OUT TO $442,000 A YEAR? ASSUMING YOU HAVE THE MONEY TO DO IT.

WHEN THAT ASSET GETS REPLACED, YOU HAVE TO HAVE THE MONEY.

EVEN IF YOU HAVE THE MONEY, IT'S GOING TO INCREASE THE ASSOCIATED COST TO DELIVERING THE SERVICES.

WHY IS REPLACEMENT SUCH A RISK? HONESTLY, YOU FORGET IT'S COMING.

PARTICULARLY FOR LONG-LIVED ASSETS.

STUFF THAT GOES IN THE GROUND ISN'T VISIBLE AND YOU GET 50-80 YEARS OUT OF IF YOU'RE LUCKY.

BUILDINGS, WE ALSO HAVE A TENDENCY TO FORGET ABOUT THEM BECAUSE THEY'RE THERE FOR AWHILE.

THEY BECOME JUST PART OF THE BACKGROUND, BUT THEY DO NEED REPLACEMENT.

THE OTHER REASON IT'S A RISK IS THAT WE UNDERESTIMATE THE COST, CONTINUALLY.

WHILE THAT DOESN'T SEEM SUCH A SHOCK NOW WITH OUR HYPERINFLATION PERIOD, I'VE GOT A COUPLE OF EXAMPLES THAT I WANT TO DEMONSTRATE.

THOSE TWO THINGS GO TOGETHER TO ADD UP THAT YOU DON'T SAVE ENOUGH.

AND YELLOWKNIFE WOULD NOT BE UNIQUE IN THIS SITUATION.

EVERY MUNICIPALITY IN CANADA THAT HAS LOOKED AT THESE NUMBERS HAS FIGURED THIS OUT.

THAT IS WHY THE FEDERAL GOVERNMENT FUNDS ASSET MANAGEMENT INITIATIVES FOR MUNICIPALITIES.

TRIVIA, "WHAT WAS THE INFLATION RATE 2010-2020?" IN THE GOOD OLD DAYS, PRE-COVID? IT'S A TRICK QUESTION. SORRY, GOT TO BE ONE.

IT REALLY DEPENDS ON WHAT YOU'RE TALKING ABOUT.

MOST PEOPLE WOULD SAY 2%, 2% IS LIKE AT LEAST WHAT MY GENERATION HAS GROWN UP WITH. THAT'S INFLATION, 2%.

BUT INFLATION THAT 2% IS WHAT'S CPI.

THAT'S THE CONSUMER INDEX THAT'S BASED ON A BASKET OF GOODS WHERE YOU GO INTO A STORE AND YOU BUY IT.

IT DOESN'T APPLY TO PHYSICAL ASSETS.

THE REALITY IS THAT DIFFERENT ASSETS INFLATE AT DIFFERENT RATES.

[00:35:02]

THIS CAN BE BECAUSE OF LIKE BULK MATERIAL COSTS.

JUST LIKE BUILD THE THING.

REGIONS INFLATE AT DIFFERENT RATES.

THAT'S BASED ON THE AVAILABILITY OF LABOR, THAT'S ALSO BASED ON LOCALIZED REGULATIONS THAT REQUIRE MORE IN THE CONSTRUCTION OF ASSETS IN TERMS OF SAFETY SYSTEMS, IN TERMS OF QUALITY OF CONSTRUCTION, ENERGY CODES, ETC.

THOSE INFLATION COSTS, THEY AFFECT THE REPLACEMENT COST.

I'M GOING TO TEACH YOU A PARTY TRICK.

ADMITTEDLY, IT'S NOT THE BEST PARTY TRICK.

I ACTUALLY DON'T ADVISE YOU TO DO THIS AT PARTIES, BUT YOU CAN QUICKLY CALCULATE THE INFLATION RATE OR THE NUMBER OF YEARS UNTIL THE COST OF SOMETHING DOUBLES BY USING WHAT'S CALLED THE RULE OF 72.

[NOISE] THE NUMBER OF YEARS UNTIL THE COST DOUBLES IS EQUAL TO 72 DIVIDED BY THE INFLATION RATE.

LET'S DO IT. ONE MILLION DOLLARS.

AT A 2% INFLATION RATE, IT DOUBLES EVERY 35 YEARS.

AT YEAR 35, YOU HAVE SOMETHING THAT NOW COSTS $2 MILLION.

MAKES SENSE. THREE PERCENT INFLATION RATE IS 1% MORE.

THE COST DOUBLES EVERY 24 YEARS, WHICH MEANS BY YEAR 35, THAT $1 MILLION ASSET COST 2.8 MILLION TO REPLACE 5%.

THE COST DOUBLES EVERY 14-AND-A-HALF YEARS AND THAT $1 MILLION ASSET AT YEAR 35 NOW COSTS $5.5 MILLION TO REPLACE.

THOSE PERCENTAGE POINTS, MAKE A BIG DIFFERENCE, WHAT WAS THE INFLATION RATE OF GRADERS IN YELLOWKNIFE? THIS IS BASED ON REAL DATA, 5%.

DURING THE GOOD OLD DAYS, BETWEEN 2010 AND 2021.

YOU CAN SEE THE ACQUISITION COST UP ABOVE.

THAT'S THE BLUE LINE IN THE GRAPH.

THE ORANGE LINE IS 5% INFLATION RATE.

YOU CAN SEE IT'S ACTUALLY GONE ABOVE, IT'S GONE BELOW.

ON AVERAGE, 5%. DO NOT HAVE THE DATA.

SINCE THEN WE HAVEN'T BOUGHT A GRADER YET.

CITY HALL, BUILT IN 1976 FOR $1.9 MILLION.

I'LL SAY IT AGAIN. SOUNDS GREAT.

THAT'S A GREAT DEAL, 9.1 MILLION IF YOU GO TO THE BANK OF CANADA INFLATIONARY CALCULATOR, WHICH USES CPI, THAT'S WHAT IT SAYS THIS BUILDING SHOULD COST TO REPLACE TODAY USING CPI, OVER THAT, SINCE 1976, AVERAGE CPI HAS BEEN 3.4%.

ACTUAL REPLACEMENT, ESTIMATED REPLACEMENT COSTS 22 MILLION.

THAT'S AN INFLATION RATE OF 5.3% OVER THAT SAME NEAR 50-YEAR PERIOD.

THIS IS THE ACTUAL INFLATION RATE THAT YELLOWKNIFE IS EXPERIENCING, WHAT IT MEANS IS PEOPLE THINK OF INFLATION AS THE EROSION OF PURCHASING POWER.

YOU CAN'T BUY AS MUCH WHEN THE COSTS INFLATE 2%.

OVER THE ENTIRE TIME THAT WE'VE BEEN THINKING IT'S 2%, YOUR PURCHASING POWER FOR NEW PHYSICAL ASSETS HAS BEEN ERODING AT 5%.

WHAT IF WE EXTEND THE LIFE? IF WE CAN TAKE CARE OF OUR ASSETS AND EXTEND THE LIFE OF THEM, THAT'S GOOD. IT IS GOOD.

YOU PUT OFF THE REPLACEMENT COSTS CERTAINLY.

BUT AT THESE TYPES OF INFLATION RATES.

LET'S TAKE CITY HALL, 22 MILLION OVER 50 YEARS.

LET'S SAY WE GET 75 YEARS OUT OF IT.

BUT AT THE END OF THAT 75 YEARS, THE PRICE HAS GONE UP AT A 5% RATE.

THAT'S 997,000 A YEAR.

AT 100 YEARS, IT'S THE SAME 5% INFLATION RATE.

IF YOU EXTEND THE LIFE, YOU ARE BUYING TIME.

YOU ARE NOT LOWERING COST. YOU'RE NOT SAVING MONEY.

LET'S USE A DIFFERENT EXAMPLE.

WHAT'S THE ESTIMATED SERVICE LIFE FOR WATER AND SEWER PIPES AT INSTALLATION? IT'S 50 YEARS.

MOST PEOPLE WILL SAY, HEY, I CALL SHENANIGANS.

IT'S MUCH LONGER.

THERE ARE MANY MUNICIPALITIES THAT HAVE RUN THEIR PIPES MUCH LONGER THAN THIS, THAT IS TRUE.

MOST PEOPLE WILL HAVE FORGOTTEN THAT YELLOWKNIFE IS ALREADY ON ITS SECOND GENERATION OF UNDERGROUND INFRASTRUCTURE.

THE FIRST-GENERATION ONLY WENT 30 YEARS.

NOW, THAT ISN'T TO SAY THAT WE EXPECT TO GET 30 YEARS OUT OF THE NEXT ONE USING DIFFERENT MATERIALS, UNDERSTAND A LOT MORE ABOUT THE GROUND CONDITIONS.

ABSOLUTELY, WE WOULD HOPE TO GET AS MUCH AS WE CAN OUT OF THIS.

BUT ON AVERAGE, OVER LARGE GROUP DATA, YOU EXPECT 50 YEARS.

[00:40:01]

IF WE TAKE THAT AND WE APPLY IT TO THE DATA WE HAVE AVAILABLE FOR THE WATER AND SEWER PIPES THAT ARE IN THE GROUND IN YELLOWKNIFE.

NOW THIS HAS NOT BEEN LOOKED OVER WITH A FINE TOOTH COMB.

I'D SAY I HAVE MEDIUM CONFIDENCE IN THE DATA.

THIS IS JUST USING THE INFORMATION THAT'S IMMEDIATELY AVAILABLE TO US IN TERMS OF THE YEAR THAT THE PIPES WERE INSTALLED.

THIS IS WHAT THE FORECASTED PIPE REPLACEMENT LOOKS LIKE OVER THE NEXT 50 YEARS.

THIS IS A LITTLE DIFFERENT THAN WHAT YOU'RE NORMALLY USED TO SEEING WHEN IT COMES TO CAPITAL FORECASTS, WHERE YOU SEE LIKE A STRAIGHT LINE OR IN FLEET YOU MIGHT SEE LIKE IT'S PRETTY CONSISTENT EVERY YEAR.

LONG LIVED ASSETS, YOU DON'T DO ANYTHING TO THEM UNTIL THEY COME DUE.

THE TROUBLE IS THAT FOR MANY MUNICIPALITIES IN CANADA, THEY PUT THEM IN 50, 60, 70 YEARS AGO.

WE'RE ACTUALLY LUCKY HERE BECAUSE WE ARE ON OUR SECOND-GENERATION.

WE PROBABLY HAVE MORE TIME THAN OTHER MUNICIPALITIES.

BUT IT'S A MATTER OF WHEN, NOT IF.

THE COSTS ASSOCIATED WITH THIS IS SOMETHING THAT YOU NEED TO THINK ABOUT NOW AND YOU NEED TO BE THINKING ABOUT EVERY YEAR.

JUST TO POINT THIS OUT, AS AN EXAMPLE, IN YEAR 2029, THAT IS ROUGHLY 11 KILOMETERS OF PIPE THAT'S BASED ON AGE ALONE, SUGGESTED TO BE REPLACED.

IF YOU HAD THE MONEY FOR IT, YOU MIGHT NOT EVEN PHYSICALLY BE ABLE TO DO THAT.

YOU NEED THE CONTRACTORS NEED TO TRAFFIC MANAGEMENT PLANS.

IT'S EASY TO PUT THE STUFF IN THE FIRST TIME BECAUSE THERE'S NOTHING ON TOP OF IT.

YOU GO BACK TO DO IT THE SECOND TIME, THINGS HAVE CHANGED.

HOW MUCH DOES REPLACING WATER AND SEWER MAINS COST ROUGHLY PER METER? $3,200.

IF WE TAKE THAT SAME GRAPH AND WE USE THIS COST AND WE APPLY A 3% INFLATION, THIS IS NOW YOUR LONG-TERM SENSE OF WHAT WE'RE LOOKING AT.

THAT'S A LOT OF MONEY. ASSET MANAGEMENT LOOKS TO PRODUCE THESE LONG-TERM FORECASTS SO THAT WE CAN SEE WHAT'S COMING.

IT'S THE BINOCULARS TO SEE THE ICEBERG AHEAD SO THAT YOU DON'T RUN INTO IT, BECAUSE IF YOU'RE NOT LOOKING FAR ENOUGH IN ADVANCE, YOU DON'T HAVE ENOUGH TIME TO CORRECT.

YOU'RE INTO IT. YOU'VE GOT THINGS FAILING AND YOU DON'T HAVE ANY MONEY.

PIPES EXTEND THE LIFE, DOES IT WORK ITS 3%? NO, SORRY.

YOU'RE STILL BUYING YOURSELF TIME.

IT'S GREAT. ESPECIALLY IF YOU DON'T HAVE THE MONEY.

BUT IT'S NOT LOWERING YOUR COST.

EVENTUALLY, WHEN YOU REPLACE THOSE ASSETS, THE COST OF THE ASSOCIATED SERVICES WILL GO UP. THAT CAN BE A SHOCK.

YOU CAN CUSHION THAT SHOCK IN A FEW WAYS, ESPECIALLY IF YOU'RE LOOKING OUT IN ADVANCE.

NOW, WHY DO WE REPLACE ASSETS? BECAUSE AGE IS TERRIBLE WAY TO REPLACE ASSETS.

THREE REASONS. WELL, FOUR REASONS, PHYSICAL FAILURE.

THIS IS THE ONE THAT EVERYBODY UNDERSTANDS.

IT'S DEAD WE NEED A NEW ONE.

FUNCTIONAL FAILURE.

IT'S NOT DEAD, BUT IT DOESN'T DO THE JOB WE NEED IT TO.

THE COLORFUL EXAMPLE I LIKE TO USE WOULD BE THE SEWER PUMP LIFT STATION 1 AT THE BOTTOM OF FRANKLIN HILL.

IT STILL WORKS BUT IF IT DOESN'T PUMP ENOUGH, WHAT ARE YOU UP TO YOUR EYEBALLS IN? FUNCTIONALLY IT'S FAILED, YOU NEED TO REPLACE IT.

DOESN'T MATTER THAT IT'S IN GREAT CONDITION.

IT COULD BE NEW BUT IF YOU PUT IN A BUNCH MORE DEVELOPMENT UPHILL IT NO LONGER HAS THE CAPACITY, IT FUNCTIONALLY FAILED AND IT NEEDS TO GO.

THE LAST IS ONE THAT I LIKE TO CALL FISCAL FAILURE.

IT'S NOT REALLY FAILURE, BUT THIS IS WHAT I SHOWED WITH THE GRADERS.

IT'S THE POINT AT WHICH YOU CONTINUE TO OPERATE AN ASSET IT ACTUALLY COSTS YOU MORE.

YOU MIGHT WANT TO REPLACE AN ASSET THAT WORKS FINE, DOES WHAT YOU NEED TO, BUT BECAUSE IT'S COSTS ARE GOING TO INCREASE AS YOU CONTINUE TO OWN IT, IT'S BETTER TO REPLACE IT.

THE LAST REASON IS UNACCEPTABLE RISK.

IDEALLY, YOU DON'T LET ANY OF THIS STUFF HAPPEN TO YOU.

YOU REPLACE IT BEFORE IT HAPPENS.

BUT THE ONLY WAY YOU DO THAT IS BY ASSESSING THE RISKS.

LET'S TALK ABOUT ASSETS, SINCE IT IS AN ASSET MANAGEMENT PRESENTATION.

WHAT IS OUR OLDEST ASSET HERE AT YELLOWKNIFE? WILDCAT CAFE, 86 YEARS OLD.

[00:45:04]

ALMOST SEEMS QUAINT NOW.

WHAT IS THE MOST EXPENSIVE ASSET THAT WE OWN TO REPLACE SINGLE ASSET? FIDDLERS LAGOON.

IF WE HAVE TO REPLACE THAT WITH AN ENGINEERED ASSET, LIKE A FULLY ENGINEERED ASSET, SEWAGE TREATMENT PLANT, ITS GOING TO COST PROBABLY UPWARDS OF $100 MILLION, INCLUDING A SIGNIFICANT INCREASE IN OPERATING COSTS.

WITH ASSET MANAGEMENT, A KEY PART OF THIS IS WHAT WE CALL AN ASSET REGISTRY OR AN ASSET INVENTORY.

IT'S A PLACE TO PULL ALL OF THIS INFORMATION TOGETHER ABOUT OUR ASSETS.

WHAT SERVICE DO THEY SUPPORT? WHEN DID WE ACQUIRE THEM? HOW MUCH SHOULD WE PAY? WHAT'S ITS CURRENT CONDITION? WHAT'S ITS CRITICALITY, THE ASSOCIATED RISK? YOU NEED ALL OF THIS INFORMATION AT YOUR FINGERTIPS IN ONE SPOT, KEPT UP TO DATE SO THAT YOU CAN INFORM DECISIONS.

CONCEPT OF THE ASSET REGISTRY DOES THIS.

IT'S IMPORTANT BECAUSE IT'S THE TOOL THAT LETS US BUILD THOSE LONG-TERM FORECAST AND LET YOU SEE THOSE WAVES OF INFRASTRUCTURE REPLACEMENT THAT ARE BEARING DOWN ON YOU WHEN YOU STILL HAVE ENOUGH TIME TO COURSE-CORRECT.

IT ALSO HELPS PROVE SO THAT WE CAN KNOW THAT WE'RE FISCALLY SUSTAINABLE NOT JUST NOW, BUT IN THE LONG TERM, SO THAT WE KNOW THAT FUTURE GENERATIONS ARE GOING TO GET THE SAME LEVELS OF SERVICE AT RELATIVELY THE SAME COST AS WE GET THEM NOW.

LASTLY, IT HELPS PRIORITIZE INVESTMENT BASED ON CONDITION AND RISK RATHER THAN AGE.

DON'T REPLACE IT UNTIL YOU NEED TO, REPLACE IT WHEN IT COMES DUE FOR WHATEVER REASON, FISCAL, FUNCTIONAL, OR PHYSICAL FAILURE.

CITY OF YELLOWKNIFE HAS AN ASSET MANAGEMENT POLICY.

I JUST WANT TO GO OVER THE PRINCIPLES OF THAT AFTER GOING THROUGH THE EXAMPLES.

SOMETIMES READING A POLICY DOESN'T REALLY DO IT FOR PEOPLE.

BUT NOW HOPEFULLY LOOKING AT THE PRINCIPLES AFTER WE'VE DISCUSSED THE PROCESSES AND THE CONCEPTS THAT ARE RELATED AND HOW THEY APPLY, YOU CAN GET A SENSE OF WHERE THE CITY OF YELLOWKNIFE IS HEADED.

SERVICE DELIVERY TO CUSTOMERS, SYSTEMATIC DATABASE DECISIONS, MINIMUM SUSTAINABLE COST, RISK MANAGEMENT, WHOLE ORGANIZATION, AND CONTINUOUS IMPROVEMENT.

THIS IS ASSET MANAGEMENT IN ACTION.

I LIKE TO TRY AND END ON A MORE HUMOROUS NOTE, DATA, IT'S A DATABASE PRACTICE, DATA'S GREAT.

DATA IS JUST NUMBERS.

KNOWING WHAT THAT DATA REPRESENTS.

THAT'S WHEN WE START TO THINK THAT WE HAVE INFORMATION.

ASSET MANAGEMENT LETS US BUILD THE LINKS BETWEEN THIS INFORMATION SO THAT WE CAN IDENTIFY WHERE WE ARE AND WHERE WE WANT TO BE.

IDENTIFY THAT GAP, AND FIND THE MOST EFFICIENT WAY TO CLOSE IT, AND AVOID PROPOSALS WITH LESS MERIT INTERPRETATIONS, OPINIONS.

KEY TAKEAWAYS FOR COUNSELORS.

THINK IN TERMS OF LEVELS OF SERVICE, RISK, AND COST.

YOU'VE ALWAYS BEEN DOING IT, YOU MAYBE HAVEN'T BEEN CONSCIOUSLY DOING IT.

SEE HOW THESE TERMS APPLY TO THE DECISIONS THAT YOU MAKE AND THINK ABOUT HOW YOU'RE TRADING OFF BETWEEN THESE THINGS.

IF YOU START THINKING IN THESE TERMS AND TALKING IN THESE TERMS, YOU'RE GOING TO SUPPORT ADMINISTRATION ANSWERING QUESTIONS IN THESE TERMS. SECONDLY, ASK FOR LIFE-CYCLE COST INFORMATION, DEMAND IT.

YOU WANT TO KNOW THE COST UPFRONT IF YOU CAN, IF NOT, ALWAYS ASK FOR THE LIFE-CYCLE COST BECAUSE IT'S NOT ALWAYS JUST ABOUT HOW MUCH IT'S GOING TO COST NEXT YEAR OVER THE NEXT THREE YEARS BECAUSE THOSE LONG-TERM ASSETS ARE GOING TO AFFECT YOUR COSTS IN A BIG WAY IF YOU DON'T START PLANNING NOW.

REMEMBER, IT'S A MATTER OF WHEN, NOT IF.

YOU WILL HAVE TO REPLACE THESE THINGS SO START PLANNING NOW.

YOU PLAN NOW, YOU'RE GOING TO REDUCE THE IMPACT THAT HAS AND YOU'RE GOING TO INCREASE THAT CHANCE THAT WE CAN SUSTAIN THE QUALITY OF LIFE FOR FUTURE GENERATIONS.

THAT'S MY PRESENTATION FOR TODAY.

I WOULD LIKE TO TURN IT OVER TO STEVEN HOLVE, WHO IS NOW GOING TO MAKE A PRESENTATION IN REGARDS TO

[00:50:01]

>> THANK YOU, LABAN. I'LL TAKE IT UP FROM HERE ON.

THE QUESTION THAT COMES TO MIND IS, HOW DOES THIS ALL FIT TOGETHER? WHERE DO WE GO FROM HERE ON? I WOULD LIKE TO START BY JUST SAYING WE'LL GO THROUGH AN AGENDA HERE.

WE'LL LOOK AT THE ORGANIZATIONAL CONTEXT OF ASSET MANAGEMENT.

WE'LL LOOK AT OUR ASSET MANAGEMENT APPROACH WITHIN THE CITY OF YELLOWKNIFE AND WE WERE GOING WITH IT, AND I WILL TALK ABOUT THE ASSET MANAGEMENT JOURNEY.

THE REASON WHY I END WITH THE ASSET MANAGEMENT JOURNEY IS BECAUSE ASSET MANAGEMENT IS NOT A SHORT-TERM ACTIVITY, IT'S ACTUALLY A JOURNEY.

IT'S SOMETHING THAT WE HAVE TO BUILD INTO OUR BUSINESS.

IT HAS TO BE THE WAY WE DO BUSINESS AS WE MOVE FORWARD.

A LITTLE BIT OF SOME BACKGROUND WITH REGARD TO OUR ORGANIZATIONAL CONTEXT IS THAT WE HAVE A POLICY, AS WE'VE MENTIONED EARLIER.

I WON'T GO THROUGH THE PRINCIPLES THEMSELVES, BUT LET'S FOCUS ON THE LAST TWO: WHOLE OF ORGANIZATION, CONTINUOUS IMPROVEMENT.

THESE ARE THE THINGS THAT WE NEED TO FOCUS ON IN ORDER FOR US TO PUT ALL THE DIFFERENT PIECES TOGETHER.

THE OTHER DEFINITION OF ASSET MANAGEMENT IS THAT IT IS A COORDINATED ACTIVITY OF OUR ORGANIZATION TO REALIZE VALUE FROM ASSETS.

THIS IS THE STANDARD OF ASSET MANAGEMENT.

WE HAVE STRATEGIC DIRECTION THAT HAS BEEN SET BY COUNCIL AND IT'S GOING TO GUIDE US IN TERMS OF HOW WE IMPLEMENT OUR ASSET MANAGEMENT WORK WITHIN OUR ORGANIZATION, AND ONE OF THEM, WHICH IS SERVICE EXCELLENCE, ARTICULATES THAT ASSET MANAGEMENT IS IMPORTANT AND WE'RE GOING TO USE THAT AS OUR FOUNDATION TO THE WAY WE DO BUSINESS AS A FUNCTION OF ASSET MANAGEMENT WITHIN THE CITY AND HOW WE COMMUNICATE INTERNALLY AND ALSO EXTERNALLY.

WE HAVE AN ASSET MANAGEMENT DIVISION AND IS DEDICATED TO ASSET MANAGEMENT WORK AND THE FUNCTION WITHIN THE CITY AND HOW WE INTEGRATE ALL OUR ACTIVITIES BETWEEN THE DIFFERENT DEPARTMENTS.

WE HAVE A ROADMAP THAT WE'VE CREATED AND WE UPDATE THAT ROADMAP EACH YEAR TO ENSURE THAT IT ALIGNS WITH OUR FUTURE STRATEGY AND IT'S ADDRESSING THE BALANCE THAT WE'VE DISCUSSED EARLIER WITH REGARD TO COST, LEVELS OF SERVICE, AND RISK.

WE HAVE HAD SOME PAST CHALLENGES WITH RESOURCING.

WE'RE WORKING ON THAT AND ENSURING THAT WE'RE ABLE TO SUSTAIN OURSELVES AND WE HAVE AN EXPERIENCED TEAM THAT CAN DO THE WORK THAT'S REQUIRED.

LASTLY, THIS IS SOMETHING THAT'S VERY IMPORTANT TO ME.

I WAS INVOLVED IN DEVELOPING THE ISO 55000, WHICH IS A FAMILY OF ASSET MANAGEMENT STANDARDS THAT WE USE WORLDWIDE, INCLUDING IN OUR CANADIAN MUNICIPAL ENVIRONMENT TO ENSURE THAT WE HAVE A CONSISTENT PRACTICE OF ASSET MANAGEMENT.

WE ARE GOING TO BE IMPLEMENTING THESE PRACTICES WITHIN THE WORK THAT WE DO WITHIN THE CITY OF YELLOWKNIFE.

IT'S GOOD FOR OUR BUSINESS BECAUSE IT HELPS US TO BE ABLE TO BENCHMARK OURSELVES AGAINST OTHER MUNICIPALITIES AND THAT'S HOW WE SUCCEED WHEN WE BENCHMARK WITH OTHER SIMILAR-SIZED MUNICIPALITIES, ENSURING THAT THE ASSET MANAGEMENT CONCEPTS AND THE PRACTICES THAT THEY ARE APPLYING ARE CONSISTENT AND THE SAME.

THERE IS THAT ALIGNMENT THAT'S TO COME.

NOW, THE MANAGEMENT SYSTEM FOR ASSET MANAGEMENT IS NOT AN IT SYSTEM.

IT IS A SYSTEM FOR HOW WE MANAGE OUR ASSETS, IT'S THE SAME AS AN HR SYSTEM, IT'S THE SAME AS A BUSINESS MANAGEMENT SYSTEM.

BUT WE NEED TO INTEGRATE ALL THESE DIFFERENT SYSTEMS WITHIN OUR ORGANIZATION TO MAKE SURE THAT WE ARE SUCCESSFUL.

THE CONCEPTS THAT WE DISCUSSED EARLIER ON, VERY PRACTICAL AND ARE REQUIRED, BUT WE NEED TO MAKE SURE THAT THEY'RE INTEGRATED WITH ALL THE OTHER ACTIVITIES THAT WE HAVE, WHICH IS OUR BUSINESS PLANNING, WHICH IS OUR COMMUNITY PLANNING, ALL THE DIFFERENT FACETS AND ASPECTS OF OUR BUSINESS.

AS MUNICIPAL GOVERNMENT, WE'RE IN THE BUSINESS OF DELIVERING SUSTAINABLE LEVELS OF SERVICE TO OUR COMMUNITY AND WE DO THAT THROUGH GOOD GOVERNANCE AND ASSET MANAGEMENT.

WE WANT TO ENSURE THAT OUR COMMUNITY WELL-BEING IS IMPROVING.

WE'RE LOOKING AT THE ECONOMIC, SOCIAL, AND THE ENVIRONMENTAL FACTORS.

TO DO THAT, WE NEED TO BUILD A STRONG RELATIONSHIP BETWEEN OUR COMMUNITY AND OUR COUNCIL AND THAT DEFINES OUR VISION.

THE ASPIRATIONS OF OUR COMMUNITY HAVE TO BE COMMUNICATED.

WE MENTIONED EARLIER THAT ONE OF THE WAYS IN WHICH WE UNDERSTAND OUR COMMUNITY NEEDS IS THROUGH CLICK AND FIX, IT'S ONE METHOD IN WHICH WE CAN COLLECT DATA AND UNDERSTAND THE SERVICE THAT'S REQUIRED BY OUR COMMUNITY, AND COUNCIL PROVIDES LEADERSHIP THROUGH

[00:55:03]

WE ALSO NEED TO HAVE A SHARED STRATEGIC AGENDA BETWEEN OUR COUNCIL AND ADMINISTRATION, ENSURING THAT WE IMPLEMENT ALL THE FOCUS AREAS THAT HAVE BEEN DEFINED, AND ADMINISTRATION PROVIDING FEEDBACK ON WHERE DO WE NEED TO RETHINK AND SUSTAIN OURSELVES.

WE NEED TO CREATE VALUE THROUGH OUR ASSETS AND WE NEED TO MAKE SURE THAT AS WE RECEIVE REVENUE, WE CAN PROVIDE SUSTAINABLE SERVICES TO OUR COMMUNITY.

WHAT'S HAPPENING IS THAT THERE'S AN ONGOING SERVICE VALUE DIALOGUE BETWEEN OUR COMMUNITY, COUNCIL, AND ADMINISTRATION.

THIS IS THE STRATEGIC TRIANGLE.

ALL GOVERNMENTS GO THROUGH THIS.

ALL MUNICIPAL GOVERNMENTS HAVE TO GO THROUGH THIS.

OUR PLANNING, THE WORK THAT WE DO IN OUR BUSINESS RELIES ON THIS STRATEGIC TRIANGLE.

IF WE MISS ANY OF THE PLAYERS OR STAKEHOLDERS OR WE DO NOT GET THEIR FEEDBACK, WE DO NOT SUCCEED.

THIS IS SOMETHING THAT WE'RE GOING TO BUILD INTO OUR WORK AND ENSURING THAT OUR ASSET MANAGEMENT WORK IS SUCCESSFUL, AND IT HELPS US TO BE ACCOUNTABLE TO THE COMMUNITY AND ALSO TO BE ABLE TO MEASURE OUR PERFORMANCE AS AN ORGANIZATION.

THE SERVICE VALUE DIALOGUE IS ESSENTIAL BECAUSE IT BINDS THE COMMUNITY COUNCIL AND ADMINISTRATION.

IT ALSO HELPS US TO DEFINE OUR FRAMEWORK ON HOW WE DEFINE OUR SERVICE PLANS THAT WE MENTIONED EARLIER ON AND ALSO HOW WE CREATE OUR BUDGET BY TAKING INTO ACCOUNT THE CONVERSATIONS THAT ARE HAPPENING BETWEEN COMMUNITY AND ADMINISTRATION IN ORDER TO ADDRESS THE COMMUNITY NEEDS IN A COST-EFFECTIVE WAY.

WE NEED TO HARNESS THE POWER OF ASSET MANAGEMENT BY THINKING CRITICALLY ABOUT SERVICE AND WE ALSO NEED TO MAKE OPTIMUM DECISIONS AS WE DECIDE ON WHERE TO INVEST THROUGHOUT THE LIFE CYCLE OF OUR ASSETS.

I MOVE ON TO OUR ASSET MANAGEMENT APPROACH.

NORMALLY WE TALK ABOUT ASSET MANAGEMENT FACING THE EXTERNAL COMMUNITY BUT THERE'S ALSO THE INTERNAL WORK THAT WE NEED TO DO TO ENSURE THAT WE BUILD OUR ASSET MANAGEMENT ACTIVITIES, THE STRATEGY, THE PLANNING, THE INFORMATION ABOUT ASSETS, AND THE PERFORMANCE OF THOSE ASSETS.

ALL THAT IS SUPPORTED BY OUR ORGANIZATIONAL PROGRAMS AND OUR STRATEGIC DIRECTION, PEOPLE FIRST, SERVICE EXCELLENCE, AND SUSTAINABLE FUTURE, ENSURING THAT WE CAN EMBED IN ADVANCE SUSTAINABLE ASSET MANAGEMENT EXCELLENCE AT THE CITY OF YELLOWKNIFE.

THIS IS CRITICAL FOR OUR OWN INTERNAL DEVELOPMENT IN ENSURING THAT ALL THE DEPARTMENTS ARE COORDINATED AND WILL WORK EFFICIENTLY TOGETHER.

OUR ASSET MANAGEMENT SYSTEM THAT I MENTIONED EARLIER ON, BASED ON ISO 55000, IS MAPPED OUT IN A WAY THAT WE CAN BE ABLE TO TAKE THE STRATEGIC OBJECTIVES OF THE ORGANIZATION AND INTERPRET THOSE IN AN ASSET MANAGEMENT WAY THROUGH ASSET MANAGEMENT OBJECTIVES AND THOSE ASSET MANAGEMENT OBJECTIVES WILL INFLUENCE ALL OUR ASSET MANAGEMENT PLANS AND WE'LL BE ABLE TO PERFORM MEASURES ON HOW WE'RE DOING AND FEEDBACK TO OUR ORGANIZATIONAL STRATEGIC OBJECTIVES.

SO IT'S AN ONGOING CYCLICAL PROCESS.

HOWEVER, WE NEED A LINE OF SIGHT BETWEEN OUR ORGANIZATIONAL STRATEGY AND OBJECTIVES AND OUR ASSET MANAGEMENT WORK, AND THIS IS THE SYSTEM THAT WE'RE GOING TO BE APPLYING.

TO ENSURE THAT WE ARE SUCCESSFUL, IT WILL TAKE INTO ACCOUNT THE COSTS, RISKS, AND PERFORMANCE MEASURES THAT WE MENTIONED EARLIER ON AND ENSURING THAT WE ARE SUCCESSFUL IN MANAGING THE ASSETS AND DELIVERING SERVICES THROUGH THOSE ASSETS.

OUR ASSET MANAGEMENT FRAMEWORK IS INTEGRATED AND OUR APPROACH IS TO ENSURE THAT ALL THE DIFFERENT PARTS OF THE ORGANIZATION ARE TAKEN INTO ACCOUNT AND ARE INCLUDED AS WE MAKE DECISIONS ABOUT ASSETS AND ABOUT THE SERVICE THAT WILL PROVIDE AND WE WILL FOLLOW THE CRITICAL FUNDAMENTALS OF ASSET MANAGEMENT MAINLY THAT WE DERIVE VALUE FROM ASSETS AND THAT IS ALIGNMENT BETWEEN OUR STRATEGIC OBJECTIVES AS AN ORGANIZATION AND THE ASSETS THAT WE HAVE AND THE SERVICE THAT WE DELIVER FROM THOSE ASSETS.

WE ALSO WANT TO ENSURE THAT OUR LEADERSHIP IS ENGAGED AND IS SUPPORTING THE WORK THAT WE DO IN OUR ASSET MANAGEMENT WORK ENSURING THAT OUR ASSETS ARE ACHIEVING THE BENEFITS THAT WE NEED.

WHAT'S ALSO IMPORTANT IS TO UNDERSTAND THAT IT'S NOT ALL ABOUT THE ASSETS, BUT IT'S ABOUT THE SERVICE DELIVERY THROUGH THE ASSETS THAT WE OWN.

SO OUR FRAMEWORK IS HOLISTIC.

[01:00:01]

WITH REGARD TO WHERE WE ARE NOW, WE ARE CURRENTLY ESTABLISHING OURSELVES AND WE'VE DEVELOPED A POLICY, WE HAVE DEVELOPED DIRECTIVES ON LEVELS OF SERVICE, RISK MANAGEMENT, ASSET REGISTRY.

WE HAVE ACTUALLY USED OUR ASSET REGISTRY DIRECTIVE TO CREATE A 10-LAYER FLEET REPLACEMENT FORECAST.

WE'VE ALSO DEVELOPED A CAPITAL PROJECT PRIORITIZATION METHOD THAT TAKES INTO ACCOUNT OUR LEVELS OF SERVICE AND RISK.

NOW, WHERE DO WE WANT TO BE? WE WANT TO BE ABLE TO GET TO THE COMPETENCE STAGE, WHICH IS ACCORDING TO THE FCM ASSET MANAGEMENT SCALE.

FOR US TO BE COMPETENT, WE NEED TO HAVE THAT COMPLETE SYSTEM THAT I MENTIONED EARLIER, FULLY FUNCTIONAL.

AGAIN, IT'S A JOURNEY, IT'S NOT A SHORT-TERM ACTIVITY.

HOW DO WE WANT TO GET THERE TO THE COMPETENCE LEVEL? WE'RE GOING TO UPDATE OUR ROADMAP, WHICH WE CONTINUOUSLY UPDATE EACH YEAR TO ENSURE THAT WE HAVE INCORPORATED WHAT WE'VE ACHIEVED AND HOW IT ALIGNS TO WHERE WE WANT TO GO IN THE FUTURE.

WE WANT TO MAKE SURE THAT OUR ASSET MANAGEMENT STRATEGY AND GOVERNANCE HAS BEEN COMPLETED AND FINALIZED BECAUSE IT'S CRITICAL TO HOW EVERYTHING ELSE IS GOING TO WORK GOING FORWARD.

THEN WE'RE GOING TO FOCUS ON DEVELOPING OUR SERVICE LEVELS OR LEVELS OF SERVICE TO ENSURE THAT WE HAVE A GOOD STARTING POINT BECAUSE ONCE YOU UNDERSTAND YOUR LEVELS OF SERVICE, THEN YOU CAN BE ABLE TO LINK THAT TO YOUR ASSETS AND HOW MUCH YOU SPEND ON THOSE ASSETS FROM A LIFE CYCLE PERSPECTIVE.

LASTLY, I WOULD LIKE TO JUST TOUCH ON THE ASSET MANAGEMENT JOURNEY.

IT STARTS WITH REACTIVE DECISION-MAKING IN MOST ORGANIZATIONS TO AN UNDERSTANDING OF HOW WE CAN COLLECTIVELY MAKE DECISIONS AND FINALLY, HOW WE CAN MAKE SOME DECISIONS BASED ON COST, RISK, AND PERFORMANCE WHERE ALL THE PLAYERS ARE INVOLVED IN, CONSULTED WITHIN THE ORGANIZATION IN ORDER FOR US TO SAVE OUR COMMUNITY EFFECTIVELY.

THIS IS THE JOURNEY. THE JOURNEY TAKES TIME, FOR SOME ORGANIZATIONS.

IT COULD TAKE FIVE YEARS FOR OTHERS, IT COULD TAKE 15 YEARS.

IT'S A RANGE DEPENDING ON THE CAPACITY AND CAPABILITY OF EACH OF THE ORGANIZATIONS.

THANK YOU VERY MUCH AND WE'RE READY TO TAKE ANY QUESTIONS THAT YOU MAY HAVE.

>> THANK YOU. REALLY INFORMATIVE PRESENTATION.

I THINK OUR TERM WILL BE DEFINED BY THIS, PARTICULARLY WITH THE HYPERINFLATION COSTS.

WE'LL HAVE TO THINK ABOUT THIS MORE AND MORE AND EVEN THINKING OF THE FAIRHALL WHERE IT WENT FROM THREE MILLION BACK IN 2020, PROJECTION FOR RENOVATIONS ALL THE WAY UP TO 17 MILLION AND DO WE KICK IT DOWN THE WAY OR ARE WE ACTUALLY JUST CAUSING FUTURE PROBLEMS? I'LL START WITH COUNCILOR FEQUET.

>> THANKS, MADAM CHAIR, AND THANK YOU FOR THAT GREAT PRESENTATION ALL THAT INFORMATION.

STEPHEN AND LAUGHLIN.

COUNCIL RECEIVED ADMINISTRATION'S HIGH-LEVEL WORK PLAN AT THE MAY 15TH GPC MEETING UNDER THE COMMUNITY SERVICES DEPARTMENT, THE ASSET MANAGEMENT INVENTORY WAS ANTICIPATED TO TAKE PLACE THROUGHOUT 2023.

I UNDERSTOOD THAT WAS THE NEXT MAJOR STEP OR THING WE'RE WORKING ON.

FIRSTLY, COULD ADMINISTRATION, JUST COMMENT ON WHETHER THAT IS STILL THE NEXT MOST HIGH-PRIORITY TASK AND IF IT'S ANTICIPATED TO BE COMPLETED BY THE END OF 2023? IF NOT UNDERSTANDING, THERE'S BEEN VARIOUS THINGS HAPPENING, JUST WHAT THE TIMING OF THAT IS, IF IT'S DIFFERENT.

>> THANK YOU. MS. BASSI-KELLETT.

>> THANK YOU VERY MUCH FOR THE QUESTION.

I'LL TAKE THIS ONE THEN WENT AND I'LL ASK MR. WHITE TO SUPPLEMENT.

ONE OF THE THINGS THAT WE WERE FINDING AS WE WERE STARTING TO LOOK AT WHERE WE HAVE DATA WITHIN ADMINISTRATION AT THIS POINT IN TIME IS THAT WE HAVE DATA IN THE DEPARTMENT WHERE THERE HAVE BEEN STAFF WHO HAVE BEEN ABLE TO QUANTIFY AND COLLECT AND ORGANIZE THAT DATA, AND THAT'S IN PUBLIC WORKS.

WE DON'T HAVE THE SAME ADMINISTRATIVE CAPACITY WITHIN COMMUNITY SERVICES, OR AT LEAST WE HAVEN'T UP UNTIL THIS YEAR AND WE WERE VERY PLEASED AND VERY APPRECIATIVE THAT COUNCIL HAD APPROVED THAT THERE WOULD BE A PY THAT WOULD GO INTO COMMUNITY SERVICES THAT COULD START TO COLLECT THE SAME DATA FOR OUR COMMUNITY SERVICES ASSETS THAT WE'RE CURRENTLY DOING FOR PUBLIC WORKS ASSETS.

THAT WORK IS GETTING UNDERWAY.

WE'VE GOT THE JOB DESCRIPTION THAT'S WRITTEN.

WE WANT TO GET THAT POSITION STAFF SO THEY CAN GET UP TO SPEED AND BE ABLE TO MAKE SURE THE SYSTEMS ARE IN PLACE FOR THE ORGANIZED COLLECTION AND UTILIZATION OF THAT DATA.

[01:05:01]

>> THANK YOU VERY MUCH. I GUESS I WOULD ADD THAT THEIR POSTING IS EXPECTED TO BE OUT VERY SHORTLY FOR THAT POSITION.

WITH THE DISRUPTION THAT WE HAD EARLIER IN THE YEAR AND THEN KEY STAFF BEING AWAY, IT WAS DELAYED JUST A LITTLE BIT MORE, LONGER THAN WE ANTICIPATED. THANK YOU.

>> THANKS FOR THAT. COULD ADMINISTRATION JUST CONFIRM, IS THAT STILL THE NEXT HIGH PRIORITY MILESTONE ON OUR ASSET MANAGEMENT JOURNEY? JUST THE INVENTORY FOR THE COMMUNITY SERVICES DEPARTMENT OR IS THERE A DIFFERENT TACT OR SOMEBODY ELSE WE'RE TACKLING NEXT?

>> MS. KELLETT. THANK YOU VERY MUCH FOR THE QUESTION.

WE'VE GOT A NUMBER OF THINGS UNDERWAY THAT WE WANT TO WORK ON CONCURRENTLY, BUT THAT'S A VERY IMPORTANT ONE FOR US TO BE ABLE TO HAVE THE SAME DATA AND COMMUNITY SERVICES, WHICH OF COURSE IS VERY ASSET HEAVY, LIKE PUBLIC WORKS.

WE WANT THEM TO COME UP TO SPEED, BUT WE HAVE A NUMBER OF AREAS WE'RE REALLY GOING TO BE FOCUSING ON SERVICE LEVELS THAT WE ANTICIPATE BEING PEN DEPARTMENTAL. THANK YOU.

>> THANK YOU FOR THAT. IT'S LIKE YOU'RE READING MY QUESTIONS, ANSWERING THE NEXT ONE WITH EACH RESPONSE.

IT'S GREAT. THANKS FOR THE UPDATE ON THE STAFFING AND LEADING INTO SERVICE LEVELS.

RECOGNIZING THAT THAT'S ONE OF THE IMPORTANT WAYS WE ARTICULATE OUR EXPECTATIONS.

ABSOLUTELY. YOU JUST MENTIONED PEN DEPARTMENTAL.

DO WE HAVE ANY SERVICE LEVELS FOR SOME OF OUR SERVICES YET? WHAT ARE THE SERVICE LEVELS THAT WE ARE PRIORITIZING TO WORK ON FIRST, IF THERE ARE SOME?

>> MS. BASSI-KELLETT.

>> THANK YOU VERY MUCH FOR THE QUESTION.

WE HAVE A NUMBER OF SERVICE LEVELS THAT ARE ORGANIC ACROSS THE ORGANIZATION RIGHT NOW.

IT CAN BE ANYTHING FROM HOW WE MAINTAIN CERTAIN PARKS.

SOME BOUQUET IS MAINTAINED TO A LEVEL THAT IS VERY DIFFERENT FROM SOME OF THE NODES THAT EXIST ACROSS THE COMMUNITY.

WE HAVE SERVICE LEVELS WHEN IT COMES TO THINGS LIKE SNOW REMOVAL AND WE SAW THAT CERTAINLY DURING SNOW MEGATON LAST NOVEMBER.

WE COULD CONCEIVABLY HAVE ISSUES AROUND LEVELS OF SERVICE THAT ARE DEFINED IN OTHER AREAS AS WELL.

THEY'RE AT AN OPERATIONAL LEVEL RIGHT NOW THAT CERTAINLY, WE DO WANT TO MAKE SURE THAT WE'RE ABLE TO ARTICULATE AND BE ABLE TO BRING TO THE SURFACE.

WE HAD A DISCUSSION THEN COUNCIL SET THE LEVEL OF SERVICE FOR THE FIRE DEPARTMENT IN 2019, I BELIEVE IT WAS AROUND WHETHER OR NOT WE WOULD CONTINUE TO FIGHT FIRES OUTSIDE OF THE MUNICIPAL BOUNDARY.

THAT WAS A DECISION THAT WAS MADE AT THE TIME THAT WE WOULD NOT WITH THE EXCEPTION OF WHEN WE'RE HELPING OUT FOR AS FIREFIGHTING, IF THERE'S SOMETHING THAT PUTS A BUILDING AT RISK, OR IF WE'RE PROVIDING ASSISTANCE TO DATA.

THAT WAS A VERY CLEAR STATEMENT THAT WAS MADE.

SERVICE LEVELS ARE VERY IMPORTANT TO US AT THIS POINT IN TIME.

MANY OF THEM WE HAVE IN PLACE, THEY WILL COME TO COUNCIL AND I'LL BE HONEST ABOUT THIS AS STEPHEN OUTLINED.

THIS IS A BIG PROJECT FOR US, SO WE'LL BE BRINGING FORWARD THINGS ON AN AD HOC BASIS.

THAT'S CERTAINLY WHAT WE WANT TO BE ABLE TO DO TO START WITH, THEN WE WILL GET MORE ORGANIZED AS WE HAVE OUR SERVICE LEVEL INVENTORY THAT WE'RE ABLE TO BRING FORWARD TO COUNCIL.

BUT CERTAINLY, TO START, WE WILL BE DOING THINGS A LITTLE BIT MORE AD HOC.

ON A RELATED NOTE, WE HAVE SEEN THEM.

THERE HAS BEEN A LITTLE BIT OF MEDIA COVERAGE AROUND SURFACE WATER LINES.

THAT'S CERTAINLY IS A SERVICE LEVEL, AND I KNOW THAT WE HAVEN'T DONE THE ANALYSIS YET.

WE EXPECT TO DO THAT BY EARLY 2024.

BUT THAT'S CERTAINLY AN AREA THAT IS VERY MUCH TO BE FRAMED AS A TOPIC AROUND SERVICE LEVEL PROVISION. THANK YOU.

>> THANKS FOR THAT.

THAT SOUNDS AWESOME.

EVERYTHING I HEARD MAKES PERFECT SENSE TO ME AND FULLY SUPPORT MOVING AHEAD AS WE CAN.

MY LAST QUESTION ON THAT SAME UNDERSTANDING OF THIS AS A JOURNEY AND I'M NOT ASKING FOR A TIME OR ANYTHING, BUT ON THIS JOURNEY, AT WHAT POINT MAYBE THIS IS FOR LOCKE MENTOR STEPHEN, I'M NOT SURE, BUT WHAT POINT DOES IT MAKE MORE SENSE TO HAVE COUNCIL WEIGH IN ON THE RISK TOLERANCE.

PER INDIVIDUAL RISK OR THE RISK APPETITE, THE CUMULATIVE RISK THAT WE'RE ACCEPTING TO HELP, AND MAYBE THAT'S WITH THE SERVICE LEVELS, BUT I DON'T KNOW IF THERE'S A SPECIFIC POINT IN THE PROCESS THAT ALIGNS WITH BEST PRACTICE TO MAKE SURE THAT WE'RE DOING REWORK.

THAT'S MORE OF WHERE I'M COMING FROM. THANKS.

>> MS. BASSI-KELLETT.

>> LOOK FORWARD TO SEEING IF MR. MCCLENDON, MR. HOOVER HAVE SOME COMMENTS ON IT.

[LAUGHTER]

>> I'LL START AND THEN THE MCCLENDON CAN TAKE OVER.

NORMALLY WHAT YOU WILL FIND THIS WE HAVE A RISK MATRIX, AND THAT MATRIX IS SOMETHING THAT ONCE WE TEST IT AND WE'VE ACTUALLY USED REAL DATA.

WE CAN BE ABLE TO BRING IT FORWARD BECAUSE IT THEN DEFINES EVERYTHING ELSE THAT WE DO.

BUT IT NEEDS REAL DATA, AND I THINK WE'VE MENTIONED THAT EARLIER ON THAT AT THE MOMENT DATA IS ISSUE.

[01:10:02]

WHAT I'VE EXPERIENCED IN OTHER MUNICIPALITIES IS IT COULD TAKE A WHILE FOR THE CITY OF CALGARY, FOR EXAMPLE, IT TOOK US ABOUT, SAY, TWO YEARS TO GET TO BE CONFIDENT IN TERMS OF WATCHING THE MATRIX.

BECAUSE THE MATRIX TO AN EXTENT IS ACTUALLY CONVERTING, IT'S MONETIZING WHAT IS SUPPOSED TO BE QUALITATIVE DATA.

>> THE ONLY THING I WOULD ADD WOULD BE SOME DETAILS AROUND WHY IT TAKES SO LONG BECAUSE YOU CAN THROW A MATRIX TOGETHER IN TWO SECONDS.

BUT FOR PEOPLE TO BECOME COMFORTABLE WITH IT, YOU REALLY NEED TIME TO USE IT OVER MULTIPLE DIFFERENT SCENARIOS.

BECAUSE IT'S ALSO DESIGNED TO WORK ACROSS THE ORGANIZATION, YOU CAN PUT IN ASSET RISKS, BUT YOU CAN PUT IN RISKS FROM COMMUNITY SERVICE, YOU CAN PUT IT IN THE RISKS OF A RANSOMWARE ATTACK, YOU CAN PUT IT IN THE RISKS OF CLIMATE CHANGE.

WHAT YOU NEED A RISK MATRIX TO DO IS TO PROPERLY BALANCE THESE THINGS ACROSS A BROAD RANGE OF SERVICES DELIVERED IN POTENTIAL SITUATIONS.

THAT'S THE TESTING AND THE TIME THAT STEVE IS TALKING ABOUT, IS YOU'RE REALLY THROWING SCENARIOS AT THIS RISK MATRIX AND AT SOME POINT IT'S GOING TO POP OUT AND ANSWER, THE PEOPLE IN THE ROOM OR JUST GIVE YOU LIKE THAT DOESN'T FEEL RIGHT.

THIS DOESN'T AGREE WITH WHAT OUR COLLECTIVE PERCEPTION OF HOW WE WOULD HANDLE THESE RISKS IS.

THAT'S WHEN YOU ARE CHANGING THE COLOR OF THE SQUARE IN THAT MATRIX.

IT WILL TAKE TIME TO GET THROUGH AND THEN ONES THAT COMFORT LEVEL IS BUILT UP HOW TO APPLY IT AS WELL THAT IT DOES APPLY IN OUR CONTEXT IS WHEN IT'S THEN APPROPRIATE TO BRING BEFORE COUNCIL. THANK YOU.

>> THANKS FOR THAT AND MAYBE I'LL JUST MORE COMMENT, I GUESS, TO ECHO MY THOUGHTS ON.

UNDERSTANDING THAT OBVIOUSLY STAFF ALREADY HAVE PRIORITIZED THE AREAS WHERE WE DO HAVE DATA, LIKE PUBLIC WORKS, THERE'S A LOT MORE DATA.

WE HAVE TO GATHER DATA FOR SOME OF THE OTHER DEPARTMENTS WHERE WE DON'T HAVE IT.

I GUESS, I JUST WANT TO SHOUT OUT FOR THE RISK MATRIX THAT IT'S GREAT TO TEST IT FOR SURE, BUT WE CAN ALSO DO A LOT OF THE HIGH-LEVEL CONVERSATIONS ABOUT WHAT FEELS RIGHT IN THE ABSENCE OF FULSOME DATA, BECAUSE SOMETIMES THERE ARE SOME THRESHOLDS OR RISKS, TOLERANCE AND APPETITE THAT WE CAN SET THAT MIGHT ACTUALLY HELP INFLUENCE THE NEED FOR SPENDING MONEY, THEY GATHER DATA IN AREAS WHERE WE MIGHT FEEL IT'S IMPORTANT OR MAYBE WE DON'T FEEL IT'S AS IMPORTANT BECAUSE WE'RE COMFORTABLE MAKING A CALL ON.

IT'S A LOW-RISK OR IT'S A REALLY HIGH RISK AND WE DON'T NEED TO SPEND MONEY COLLECTING.

I JUST WANT TO, I GUESS, GIVE A SHOUT OUT FOR THE MATRIX THAT IF THAT CAN HAPPEN AT SOME POINT IN THE NEAR-ISH FUTURE OF OUR TERM, THAT WOULD BE GREAT EVEN IF WE DON'T HAVE FULSOME DATA.

THANKS FOR THAT GREAT PRESENTATION, GUYS.

>> THANK YOU. COUNCILOR HENDRICKSON.

>> THANKS MAYOR ALTY. SHOUT OUT FOR THE MATRIX.

[LAUGHTER] WELL, FIRST OFF, THANK YOU, [INAUDIBLE] AND STEPHEN.

I FEEL LIKE I'LL BE SHARING THIS PRESENTATION WHEN PEOPLE START GETTING INTO US AROUND BUDGET TIME.

I AGREE WITH MEREDITH THIS IS GOING TO BE A LOT OF OUR WORK OVER THE COMING TERM, BUT SPECIFICALLY IN THE NEXT COUPLE OF YEARS.

FIRST QUESTION BOUNCING OFF OF ONE OF THE QUESTIONS FROM COUNCILOR [INAUDIBLE] LAUGHLIN IN YOUR PRESENTATION, YOU HAD MENTIONED 60-100 SERVICES AND SO I KNOW PART OF THIS WORK IS FIGURING OUT EXACTLY HOW MANY WE HAVE OUT OF INTEREST.

HOW MANY HAVE WE NAILED DOWN TO DATE JUST OUT OF INTEREST.

HOW MANY OF THOSE SERVICES DO WE KNOW OF?

>> MS. BASSI-KELLETT.

>> I CAN PICTURE THE LIST.

[LAUGHTER] I DON'T KNOW IF LAUGHLIN WOULD LIKE TO TAKE A STAB AT THIS ONE.

>> IT HAS BEEN AWHILE SINCE I LOOKED AT THE LIST AND THE LIST IS EVER CHANGING AS WE TRY AND IDENTIFY NEW THINGS OR ARE WE RECOGNIZE THAT MAYBE SOMETHING WE WROTE DOWN AS PART OF SOMETHING ELSE.

WHAT'S HAPPENING RIGHT NOW IS WORKING OFF THE CONCEPT OF AN ASSET REGISTRY.

WE'VE PUT TOGETHER A LIST THAT WE CALL THE SERVICE REGISTRY.

YOU JUST TRYING TO PUT A NAME TO THE DIFFERENT THINGS THAT WE DELIVER.

I THINK THE LAST COUNT, WE WERE SOMEWHERE AROUND 65.

THAT INCLUDES WHAT WE IDENTIFY AS INTERNAL SERVICES.

THERE ARE, FOR INSTANCE, MANY FUNCTIONS WITHIN ADMINISTRATION FOR THE CITY OF YELLOWKNIFE THAT DO NOT DIRECTLY DELIVER SERVICES TO THE PUBLIC.

BUT THESE ARE SUPPORT DEPARTMENTS.

THEY ARE DELIVERING A SERVICE INTERNALLY.

FOR EXAMPLE, FLEET IS FIXING THE FLEET EQUIPMENT THAT THE OPERATIONAL GROUPS THEN USE TO DELIVER THE SERVICE.

FOR IT IS FIXING THE COMPUTERS THAT PEOPLE ARE THEN USING TO DELIVER THE SERVICE.

YOU CAN ALSO DEFINE INTERNAL LEVELS OF SERVICE AS TO WHAT DEPARTMENTS NEED

[01:15:03]

THAT NUMBER INCLUDES THOSE INTERNAL SERVICES.

>> THAT'S AWESOME. THANK YOU. IT'S GOOD.

THANK YOU FOR HIGHLIGHTING THAT INTERNAL SERVICE ASPECT TOO, BECAUSE I THINK AGAIN, SHARING THIS PRESENTATION AND CONVERSATION DOWN THE LINE THAT'S SOMETHING THAT I THINK PEOPLE GO WAIT A SECOND, I DON'T SEE ALL OF THESE SERVICES IN HIGHLIGHTING THE FACT THAT THESE ARE ALSO THINGS THAT SUPPORT THE INTERNAL WORKING OF THE DELIVERY OF SERVICES TO RESIDENTS.

I PROMISE YOU NOW THAT I WILL NEVER GO INTO THE WEEDS ON THIS, BUT I'M JUST INTERESTED AROUND THE DATA COLLECTION PIECE.

A MORE HIGHLIGHTING THIS FOR THE CITY MANAGER BUT DON'T WORRY, I WON'T BE GOING INTO THE WEEDS ON IT, BUT JUST ON THE DATA MANAGEMENT PIECE IN THE DATA COLLECTION PIECE.

WE KNOW WE HAVE THE INFORMATION FOR PUBLIC WORKS RIGHT NOW.

ARE WE ENSURING AS WE'RE GOING FORWARD THAT WE'RE USING A CONSISTENT TYPE OF SYSTEM FOR DATA COLLECTION AND WE'RE NOT MAKING MICKEY UP THE THINGS AS WE GO FORWARD, GATHERING ONCE AND THEN FIVE YEARS FROM NOW, REALIZE, GOD, THIS DOESN'T WORK.

ARE WE BEING CONFIDENT THAT WE'RE DOING THAT? I GUESS THE QUESTION AROUND BUDGETING IS, ARE WE MAKING SURE THAT IF SYSTEMS ARE NEEDED, THOSE THINGS ARE GOING TO BE BROUGHT FORWARD SOONER THAN LATER? TO MAKE SURE THAT WE'RE NOT STARTING THE WORK AND THEN HAVING TESTS, COUNCIL FORGETS IT AND REDO IT, SAY THREE OR FOUR YEARS LATER TO JAM IT INTO A NEW SYSTEM WE HADN'T THOUGHT OF IN ADVANCE.

>> MS. BASSI-KELLETT.

>> YES. THAT WOULD NOT BE A NICE SCENARIO.

WE DO NOT WANT TO END UP IN THAT WHERE WE'RE COMPARING APPLES AND ORANGES.

WE REALLY WANT TO UTILIZE OUR CITY WORK SYSTEM, WHICH IS WHAT PUBLIC WORKS UTILIZES NOW.

WE WANT TO MAKE SURE THAT WE GET ALL DEPARTMENTS ONTO THAT BECAUSE THAT DOES HAVE THE ABILITY TO HAVE CONSISTENT TRACKING.

LAUGHLIN AND STEPHEN, ANYTHING TO ADD TO THAT?

>> WE COULD JUST ADD TO SAY, BESIDES USING SILHOUETTES, WE'VE ALSO ENSURED THAT THIS TRAINING AVAILABLE TO THE STAFF.

IT'S SOMETHING THAT WE'VE OBSERVED THAT WE NEED TO TRAIN OUR STAFF TO MAKE SURE THAT IT'S EFFECTIVELY USED.

I'M A STRONG BELIEVER IN IF WE'VE INVESTED IN A SOFTWARE SYSTEM, WE MIGHT AS WELL USE IT.

IF THERE ARE OTHER OPTIONS, WE'LL COME BACK TO COUNCIL AND RECOMMEND ANY OTHER OPTIONS I'VE USED AT THE DIFFERENT SYSTEMS THAT ARE EQUALLY GOOD.

BUT I THINK SILHOUETTES IS GOOD ENOUGH AT THIS STAGE HERE.

>> THAT'S PERFECT. THANK YOU VERY MUCH FOR THAT.

THEN MY LAST QUESTION IS JUST AROUND A QUESTION TO ADMINISTRATION ON WHEN WE LOOK AT THE CAPITAL FUND.

LAUGHLIN TALKED ABOUT THIS AND YOU START FORECASTING OUT INTO THE FUTURE AND LOOKING AT OUR CAPITAL FUND.

APOLOGIES, I'M NOT REMEMBERING FROM OUR BUDGET FROM LAST YEAR, BUT FROM PAST BUDGETS AND FUTURE BUDGETS, ARE WE LOOKING AT EXPANDING OUT AT THIS MOMENT THE SIZE OF THE CAPITAL FUND IN ORDER TO CONTEMPLATE ALL THOSE FUTURE POTENTIAL, COST, ESPECIALLY AROUND PIPES IS LOCKED IN HIS PRESENTATION HIGHLIGHTED.

ARE WE LOOKING AT AN EXPANSION OUT OF THE CAPITAL FUND AT THIS MOMENT? IS IT SOMETHING THAT ADMINISTRATION WOULD RECOMMEND WE START CONSIDERING AS PART OF BUDGET 2024 GOING FORWARD? I'LL LEAVE IT AT THAT. THANKS.

>> MS. BASSI-KELLETT.

>> THAT'S A FANTASTIC QUESTION BECAUSE PART OF WHAT WE'RE DOING IS WE'RE EMBARKING ON THE ASSET MANAGEMENT JOURNEY AND BECOMING MORE FULSOME IN THE APPROACH WE TAKE IS ALSO UP AGAINST SOME OF THE REALITIES THAT WE'VE HEARD ABOUT SOME OF OUR PROJECT COSTS THAT ARE ON THE GO RIGHT NOW, INCREASING IN COST SIGNIFICANTLY SINCE 2020.

THAT IS OUR PRIMARY BALANCING ACT RIGHT NOW AND WE'RE FOCUSING ON THE CORE SERVICES.

CERTAINLY I THINK COUNSEL IS FAMILIAR THAT WERE OUR MAIN FOCUSES ON THINGS LIKE THE CAPITAL ASSETS THAT ARE SUPPORTING OUR CORE SERVICES LIKE OUR WATER LICENSE.

WE'RE LOOKING AT ITEMS AROUND OUR WATER SUBMARINE LINE AND OPTIONS THAT MAY EXIST THERE.

WE'RE LOOKING AT ESSENTIAL SERVICES LIKE THE FIRE HALL.

WE'RE NOT LOOKING AT ANYTHING THAT IS A NICE TO DO AT THIS POINT OTHER THAN THE AQUATIC CENTER, OF COURSE, IS A PROJECT THAT SOME MIGHT ARGUE IS A NICE TO-DO PROJECT.

THAT IS ONE WHERE I'M PROUD OF THE FOREST SIDE OF THE CITY THAT WE DID A DESIGN-BUILD SO THAT WE'RE NOT EXPERIENCING THE EXPONENTIAL COST INCREASES FOR THAT PROJECT.

RIGHT NOW WE'RE LOOKING AT HOW WE MAKE SURE THAT THE ESSENTIAL CAPITAL PROJECTS ARE COVERED OFF IN THE LONGER-TERM.

WE LOOK AS WELL THEN HOW WE MAKE SURE THAT OUR CAPITAL PLANNING PROCESS MAXIMIZES THE LIFESPAN OF THOSE ASSETS AND TRYING TO CAPTURE MANY OF THOSE THINGS AROUND WHEN IS THE RIGHT TIME TO SAY, OKAY, THAT'S IT FOR THAT ASSET TIME FOR A NEW ONE SO THAT WE CAN MAXIMIZE THE EFFICIENCY THAT WE HAVE.

THAT IS COMING, PART OF THE WORK THAT WE'RE DOING IN PART OF THE WORK THAT WE'RE TRYING TO REFINE OUR ABILITIES AND OUR SKILLS TO BE ABLE TO DO. THANK YOU.

>> I THINK JUST LOOKING AT THE BUDGET POLICY ABOUT THE CAPITAL FUND, WE'D PROBABLY WILL HAVE TO TAKE A BECAUSE THE CAPITAL FUND AMOUNT SUFFICIENT TO FUND EXPENDITURES ACCORDING TO THE ASSET MANAGEMENT PLAN.

OUR ASSET MANAGEMENT PLAN IS GETTING MORE AND MORE DETAILED.

RECOGNIZING THOSE GIANT COSTS ARE,

[01:20:01]

IT'S PROBABLY ON THE LOW END AND WE'LL HAVE TO HAVE SOME HARD DISCUSSIONS ABOUT HOW TO MAKE SURE THAT FUND IS ACTUALLY IN COMPLIANCE WITH THE BUDGET FUND OR POLICY.

>> COUNCILOR WILBURTON.

>> THANK YOU, MADAM CHAIR. THANKS, PATRICIA.

THAT WAS VERY DETAILED AND ACCURATE.

JUST CURIOUS, I KNOW A LOT OF MODELING DEPENDS ON CONSISTENCY.

WE'RE SEEING NOTHING REALLY CONSISTENT RIGHT NOW WITH INFLATION CAUSED VOLATILITIES IMMENSE.

HOW WELL CAN WE ADJUST, I GUESS IN REAL TIME AS COSTS OR FLUCTUATED LIKE CRAZY LIKE FUEL FOR EXAMPLE, IT'S HARD TO AVERAGE A COST OVER A YEAR WHEN IT CHANGES SO MANY TIMES AND UP AND DOWN.

JUST SPEAK TO IT OR THE ABILITY TO ADJUST THAT VOLATILITY.

>> MS. BASSI-KELLETT.

>> THAT IS A GREAT QUESTION.

I'M GOING TO ASK OUR EXPERTS TO WEIGH IN ON THIS ONE.

>> I SUPPOSE THE ANSWER IS THAT YOU DO THE BEST YOU CAN.

NOBODY HAS A CRYSTAL BALL.

YOU CAN'T SEE INTO THE FUTURE.

YOU DON'T KNOW IF THE INFLATION COST IS GOING TO GO UP OR GO DOWN.

WHAT WE CAN DO WITH THE ASSET REGISTRY AS WE'VE BUILT THAT STRUCTURE, IS THAT WE HAVE AN ATTRIBUTE THAT WE CALL THE ASSET INFLATION RATE THAT WE CAN CHANGE.

WHAT THAT DOES IS IT APPLIES TO THE CURRENT REPLACEMENT COST AND IT ADDS THAT INFLATION SO THAT THE FUTURE REPLACEMENT DATE, IT'S ADDING THAT INFLATION PERCENTAGE.

WE HAVE THE ABILITY WITHIN THE SYSTEM TO UPDATE AND MANIPULATE THAT THOSE FUTURE FORECASTS ESSENTIALLY IN REAL TIME, PROVIDED WE HAVE THE DATA.

WITH FLEET ASSETS, IT'S MY UNDERSTANDING THAT THERE HAVE BEEN QUITE A BIT OF INFORMATION COMING IN WITH TENDERS AND WE'VE BEEN TRYING TO FIGURE OUT HOW WE CAN THEN UPDATE THAT INFORMATION.

I CERTAINLY MUCH EASIER WHEN YOU HAVE HISTORICAL DATA, BUT REALLY AT THIS POINT THE GOAL IS TO BE CLOSER AND IDEALLY AS CLOSE AS POSSIBLE AS WE CAN BE TO WHAT WE WILL NEED.

AS OPPOSED TO STICKING WITH THIS IDEA THAT INFLATION IS SOMEHOW MAGICALLY 2% AND THAT IN 15 YEARS WHEN WE NEED TO REPLACE SOMETHING, IT WILL BE X COST.

WE'RE TRYING AS MUCH AS POSSIBLE TO BE REALISTIC.

THERE'S STILL VERY MUCH A CHANCE IN THIS ENVIRONMENT WHEN YOU ASSUME A 5% INFLATION COSTS WITH GRADERS THAT WAS 2010-2021.

THIS IS VERY LIKELY GONE UP SINCE THEN.

HOW MUCH? WE'LL FIND OUT THE NEXT TIME WE BUY A GREATER.

>> THANK YOU.

>> COUNSEL COCHRAN?

>> THANK YOU MADAM MAYOR AND THANK YOU GUYS FOR TAKING US OR BEGINNING TO TAKE US ON OUR ASSET MANAGEMENT JOURNEY.

I GUESS, FOR THE CURRENT ASSETS THAT HAVE BEEN ASSESSED IN THE REGISTRY, DO WE HAVE A ROUGH ESTIMATE OF WHICH ONES HAVE REACHED PHYSICAL FAILURE SO FAR?

>> MS. BASSI-KELLETT?

>> THANK YOU VERY MUCH. I WILL ASK HER EXPERTS TO WEIGH IN ON THIS, BUT THE GOOD THING THAT WE KNOW IS THAT WE SEE ASSETS THAT HAVE REACHED THEIR END OF LIFE.

YET WE'RE STILL CONTINUING TO SQUEEZE OUT SOME USE OUT OF THEM.

FOR EXAMPLE, OUR WATER SUBMARINE LINE, FOR EXAMPLE, THE LIFE CYCLE FOR CITY HALL.

WE ARE DOING AN ASSESSMENT RIGHT NOW SO THAT WE'RE ABLE TO ANTICIPATE AT THE 50-YEAR MARK WHAT WE CAN DO TO RENOVATE, TO EXTEND THE LIFESPAN OF THE BUILDING.

SO THERE ARE A NUMBER OF THINGS WE ARE DOING WITH SOME OF OUR ASSETS, BUT I'LL SEE IF THOSE WHO ARE MORE FAMILIAR WITH OUR ASSETS WOULD LIKE TO HAVE A CRACK AT THIS ONE.

>> GENERALLY SPEAKING, WHEN YOU'RE TALKING ABOUT PHYSICAL FAILURE, THAT IS HAVING AN IDEALIZED LIFE-CYCLE REPLACEMENT POINT THAT TYPICALLY HAPPENS WITH SHORTER-LIVED ASSETS, LONGER-LIVED ASSETS, YOU JUST TRY AND KEEP THEM ALIVE AS LONG AS YOU CAN.

WHEN IT TO COMES TO THE ASSET REGISTRY, THE ASSET TYPES THAT WE HAVE IN THE REGISTRY RIGHT NOW ARE FLEET ASSETS.

THEY ARE THOSE SHORTER-TERM ONES AND THE EXPECTED LIFE FOR THOSE ASSETS HAS BEEN REVIEWED SEVERAL TIMES OVER THE LAST FEW YEARS.

WHAT WE'RE DOING NOW THAT WE HAVE THE DATA IN THE REGISTRY IS WE'RE ANALYZING THAT AND WE'RE TRYING TO FIGURE OUT IF THOSE REPLACEMENTS NEED TO BE ADJUSTED ONE WAY OR THE OTHER BASED ON WHAT THOSE COSTS ARE.

BUT IN ORDER TO DO THAT ANALYSIS, YOU NEED THE MAINTENANCE DATA, YOU NEED THE ACQUISITION COSTS, AND YOU NEED THE TIME TO PUT IT ALL TOGETHER AND ANALYZE.

THAT IS ONE OF THE THINGS THAT WE'VE IDENTIFIED AS A GOAL.

WHEN YOU HAVE THESE GOALS OF OUTCOMES THAT YOU WANT, THAT'S WHAT GUIDES HOW YOU STRUCTURE YOUR PROCESSES.

WHEN YOU TALK ABOUT DATA SYSTEMS LIKE CITY WORKS, IT'S GREAT TO HAVE A SYSTEM.

BUT UNLESS YOU HAVE A PROCESS THAT MAKES SURE YOU COLLECT THE DATA YOU NEED, THEN WHEN YOU GO TO DO THE ANALYSIS, IF IT'S NOT THERE, YOU CAN'T DO IT.

WHEN WE HAVE THE OUTCOMES THAT WE WANT, THAT'S WHAT HELPS US DETERMINE HOW WE DO ACTIVITIES DAY-TO-DAY, SO THAT WE ENSURE WE COLLECT THE RIGHT DATA SO THAT IT'S AVAILABLE WHEN YOU NEED IT.

SO IN THE CASE OF DOING THOSE ANALYSES, YOU NEED 7, 8, 10 YEARS OF DATA.

[01:25:01]

THE NEXT BEST TIME IS RIGHT NOW.

>> THANK YOU VERY MUCH.

>> THANK YOU. I HAD A COUPLE OF QUESTIONS.

IN REGARDS TO LEVELS OF SERVICE, YOU'RE TALKING ABOUT 65 SERVICES. I WAS JUST WONDERING.

BEST PRACTICES WISE AGAIN, RECOGNIZING THE CITY OF YELLOWKNIFE IS ABOUT THE SAME JOURNEY AS EVERY OTHER MUNICIPALITY ITSELF THAT WERE FARTHER BEHIND HER HEAD.

BUT HOW DETAILED DO YOU GET ABOUT YOUR LEVELS OF SERVICE? DO YOU KEEP IT BROAD AT THE START SAYING A SERVICES IS SPECIAL EVENT, AND THEN YOU GO AS YOUR JOURNEY PROGRESSES, CANDIDATE, CELEBRATION, NEW YEAR'S EVE, FIREWORKS.

ARE THOSE SERVICES OR DO YOU TEND TO FOCUS ON THE HIGHER LEVEL OF SAYING SPECIAL EVENTS AS A SERVICE? JUST WONDERING, HOW DETAILED DO YOU GET WITH LEVELS OF SERVICE? MS. BASSI-KELLETT.

>> THANK YOU VERY MUCH, MADAM CHAIR.

CERTAINLY WHERE WE'RE AT WITH OUR LIST OF 63 OR 65 RIGHT NOW IS FAIRLY HIGH LEVEL.

FOR EXAMPLE, WE HAVE AQUATIC SERVICES, SEWING, AND THAT WOULD BE IT.

BUT I THINK THAT WOULD BE DEFINITELY A GOAL FOR US TO BE ABLE TO DIVE DOWN I'LL SEE IF OUR EXPERTS WOULD LIKE TO WEIGH IN ON THIS ONE.

>> YES. THE INTENTION IS TO DIAL DOWN TO THE DETAILS.

BUT YES, STARTING AT A HIGHER LEVEL IS THE IDEAL WAY TO DO IT.

BEST-PRACTICE? YES, YOU START IT AT A HIGHER LEVEL AND THEN YOU GO INTO THE DETAILS AFTER YOU LEARN MORE ABOUT THOSE SERVICES.

WHAT YOU'LL FIND IS YOU MAY START WITH A LIST TODAY, AND THEN A FEW MONTHS DOWN THE LINE, THAT LIST COULD INCREASE AS YOU DISCOVER THAT MAYBE SOME OF THE SERVICES YOU NEED TO SPLIT THEM OR MAYBE YOU MAY ACTUALLY CONSOLIDATE SOME OF THEM.

YEAH. BASED ON MY EXPERIENCE AT THE CITY OF CALGARY, WHICH PROBABLY IS LEADING WHEN IT COMES TO SERVICE-BASED BUDGETING.

WE STARTED WITH NINE DIFFERENT TYPES AND 62 SERVICES.

IT HAS BEEN HOVERING AROUND THAT NUMBER.

NOW YOU WOULD SAY, OKAY, BUT THAT'S A BIGGER CITY.

THIS IS A SMALLER CITY WHY IS THE NUMBER ALMOST THE SAME? IT GOES BACK TO THAT ARGUMENT THAT YOU TEST IT OUT FIRST.

SO YOU'VE GOT AT LEAST YOU GO OUT AND YOU SEE HOW WE'RE DELIVERING THAT SERVICE AND WHAT'S THE INTERACTION BETWEEN THE DIFFERENT SERVICES.

THEN SOMETIMES YOU END UP CONSOLIDATING SOME OF THEM. YEAH. CARRY ON.

>> I'LL ADD A LITTLE BIT TO THAT. THE OTHER REASON THAT IT MIGHT SOUND A LITTLE STRANGE, CALGARY HAS GOTTEN TOTALLY THE SAME NUMBERS.

IF WE PROVIDE ONE THING IN THIS SERVICE, CALGARY MIGHT PROVIDE THE SAME SERVICE 100 TIMES LARGER, BUT WE'RE STILL BOTH PROVIDING A SERVICE.

TO THINK IN TERMS LIKE ONE OF THE ONES WE'VE IDENTIFIED AS SPECIAL EVENTS AND NOT REALLY BREAKING IT DOWN BEYOND THAT AT THIS POINT.

BUT MOST PEOPLE WOULD THINK LIKE RECREATION.

WELL, WHAT DO YOU MEAN BY RECREATION? AQUATIC, INDOOR RINKS, OUTDOOR RINKS, TENNIS COURTS, SKATE PARK.

THESE ARE ALL DIFFERENT TYPES OF SERVICES.

THAT'S THE LEVEL THAT WE'VE CURRENTLY DEFINED THESE AT.

WHEN IT COMES INTO THE PRACTICAL LIKE GOING THROUGH AND APPROACHING THESE SERVICES DEPENDING ON THE SIZE OF THE MUNICIPALITY, THEY'LL TAKE DIFFERENT APPROACHES.

SMALLER THE MUNICIPALITY TYPICALLY, THEY'LL WRAP THOSE UP INTO HIGHER LEVEL, LARGER THAN MUNICIPALITY, THEY'LL HAVE MORE DETAIL.

AS WE WORK THROUGH THE PROCESS AND GET A SENSE OF WHERE THAT APPROPRIATE LEVEL OF DETAIL IS, HOW MUCH TIME DO WE WANT TO SPEND ACTUALLY DETAILING OUT THOSE LEVELS OF SERVICE, IS WHEN YOU'LL START TO SEE THE NUMBERS CHANGE.

WE DON'T WANT TO LOOK AT EVERY ASPECT OF OUTDOOR RECREATION.

WE JUST WANT TO LOOK AT OUTDOOR RECREATION, FOR INSTANCE, AS AN EXAMPLE.

>> THANK YOU. APPRECIATE THAT BECAUSE.

RECOGNIZING THE CITY OF CALGARY IN THE CITY OF ILLINOIS FOR BOTH CITIES AND THEREFORE BOTH HAVE TO DO WATER SEWER.

SO IT MAKES SENSE THAT WE BOTH HAVE SIMILAR NUMBERS OF SERVICES.

AGAIN, WISH WE COULD HAVE HAD ALL THIS DONE 60 YEARS AGO, BUT WE ARE HERE NOW.

IT'S ALMOST LIKE IN THAT NEXT LEVEL THAT I THINK AS COUNCIL AND AS RESIDENTS WILL REALLY START GOING, DO WE WANT TO DELIVER THAT? BECAUSE I THINK WE ALL KNOW THE BROAD STROKES OF THE CITY DELIVERS RECREATION OR THE CITY DELIVERS THIS.

THEN WHEN YOU BREAK DOWN AND YOU GO, I DON'T KNOW IF WE SHOULD BE AT THAT LEVEL.

RECOGNIZING WE'LL GO WITH THE HIGH LEVELS OF SERVICE AND THEN DIVE DEEPER AFTER THAT.

I HAD A QUESTION WITH YOUR INFLATION RATES AND YOU'RE TALKING OF REGULATIONS THAT IMPACT IT AND I THINK OF REPAINTING THE BRISTOL FREIGHTER WAS SUBSTANTIALLY HIGHER AND WE HAVE DIFFERENT SAFETY REGULATIONS AND THERE'S PROBABLY SOME PERSON UP THERE JUST PAINTED WITHOUT

[01:30:02]

SO THE COST BACK THEN VERSUS THE COST NOW WAS SUBSTANTIALLY HIGHER.

SIMILAR TO COUNSELOR WARBURTON'S QUESTION, HOW DO YOU FUTURE-PROOF THE INFLATION RATE AND THE LIFE-CYCLE COSTS? I GUESS FIRST QUESTION WOULD BE, YOU WERE TALKING ABOUT THE RISKS OF SERVICES IN THE RENEWAL AND REPLACEMENT COSTS.

THAT'S WHERE YOU NEED TO HAVE THAT INFLATION NUMBER.

BECAUSE YOU SHOULD BE SAVING A LITTLE BIT PER YEAR TO FORECAST OR TO HAVE MONEY FOR RENEWAL AND REPLACEMENT.

SO HOW DO YOU FORECAST A GOOD NUMBER FOR RENEWAL AND REPLACEMENT? MS. BASSI-KELLETT?

>> TURN IT OVER TO OUR EXPERTS, MR. MCCLEAN, MR. HOVE.

>> I WOULD SUGGEST AGAIN THAT YOU GET AS CLOSE AS YOU CAN.

THERE'S NO SUCH THING AS FUTURE-PROOF.

THERE'S NO ZERO-RISK SCENARIO.

YOU CANNOT TELL WHAT THE FUTURE HOLDS, NONE OF US CAN.

BUT WHEN YOU ALSO THINK OF THE TIMESCALES THAT WE'RE TALKING ABOUT, AT LEAST RIGHT NOW FOR THE CITY OF YELLOWKNIFE, THERE IS TIME, WHICH IS GREAT.

IT'S LOOKING ABOUT HOW LARGE ORDER OF MAGNITUDE COSTS ARE WE TALKING ABOUT AND STARTING TO PLAN FOR THE FUTURE IN TERMS OF HOW MUCH DO WE SAVE NOW PUT ASIDE FOR FUTURE REPLACEMENT, KNOWING THAT YOU'RE PROBABLY NOT GOING TO GET IT EXACTLY RIGHT.

BUT YOUR CUSHIONING THE BLOW.

BECAUSE IF YOU DON'T SAVE ANYTHING, AS YOU USE UP THAT LIFE, YOU HAVE FEWER AND FEWER YEARS OVER WHICH YOU NEED TO SAVE UP THE REPLACEMENT COST, OR THEN YOU END UP GOING INTO DEBT AND THEN YOU'RE PAYING OFF DEBT PAYMENTS AFTER YOU'VE INSTALLED THE ASSET.

SO IT'S NOT ABOUT FUTURE-PROOFING.

THERE IS NO FUTURE PROOF IN MY OPINION.

IT'S ABOUT LOOKING AS FAR AS YOU CAN AND GETTING AS CLOSE AS YOU CAN, AND THE PICTURE WILL BE HAZY THE FARTHER YOU LOOK OUT.

I MEAN, MOST FINANCIAL ANALYSES DON'T EVEN LOOK PAST 25 YEARS BECAUSE THEY JUST SAY IT DOESN'T EXIST.

THE COST, INFLATION, YOU CAN'T TELL WHAT IT'S GOING TO DO BEYOND 25 YEARS AND MONEY BECOMES WORTHLESS AT THAT POINT.

BUT IF YOU LOOK AND YOU SAY, WELL, THIS IS OUR BEST GUESS.

EVENTUALLY, 25 YEARS IS 15 YEARS OUT, AND THEN IT'S TEN YEARS OUT AND THEN IT'S FIVE YEARS OUT AND YOU CONTINUE TO REFINE THAT.

THAT'S WHY YOU STILL ALWAYS WANT TO BE LOOKING OUT, IF YOU CAN 50 YEARS TO SEE THOSE REPLACEMENT CYCLES.

BUT YOU'RE NOT FISCALLY PLANNING IN YEAR ONE FOR 50 YEARS DOWN THE ROAD BEYOND THIS GENERAL SENSE THAT WE NEED TO PUT ASIDE A LITTLE BIT TODAY TO HELP MAKE SURE THAT IN THE FUTURE THEY CAN GET THE SAME SERVICE.

WE CAN SUSTAIN THAT ON ITS LIKE YOU'RE SAVING A LITTLE BIT FOR THE FUTURE.

>> THANKS. YEAH. NO, THAT MAKES SENSE.

ALSO RECOGNIZING IF REGULATION CHANGES FORBID NO MECHANICAL SEWAGE, THAT WE START SAVING AND REFINING OUR NUMBERS.

I'M JUST GOING TO GO TO PAGE 58 OF OUR AGENDA. OH, YEAH.

YOU HAD THE LIFE OF WATER AND SEWER PIPES THAT INSTALLATION AND WE'RE HAVING A LITTLE DISCUSSION WITH THE GMBT BECAUSE THE GMBT WOULD LIKE TO USE 100 YEARS AS THE LIFE CYCLE OF WATER AND SEWER PIPES.

WE WERE SAYING THAT'S WAY TOO FAR.

THEY'RE NOT GOING TO LAST THAT LONG.

IS THIS THE 50 YEARS THAT YOU WERE, IS THAT A YELLOWKNIFE OR IS IT MORE LIKE A BEST PRACTICE OR IS THERE SOME DATA THAT WE CAN SOURCE TO SEND THEM? MS. BASSI-KELLETT?

>> MR. MCCLEAN?

>> WHEN IT COMES TO USING 100 YEARS FOR THE PIPES, I'D ASK FOR SOME PROOF.

THERE HAVE NOT BEEN PIPES IN THE GROUND UP HERE FOR 100 YEARS.

THE LAST PIPES THAT WENT IN YELLOWKNIFE WERE 30.

WE CAN DO BETTER THAN THAT.

MY UNDERSTANDING IS THAT THE CURRENT MATERIAL SELECTION, ETC, IF THERE'S NOTHING UNUSUAL THAT HAPPENS, IT'D BE REASONABLE TO EXPECT 80 YEARS ON AVERAGE.

BUT AVERAGES ARE DECEIVING BECAUSE THAT DOESN'T MEAN THAT THEY ALL GO 80 YEARS.

I MEAN, SOME GO OVER, IT MEANS SOME GO UNDER.

THERE ARE ISSUES THAT ARE NOT RELATED TO AGE, CORROSION IS RELATED TO AGE, FATIGUE IS RELATED TO AGE, BUT IF YOU HAVE GROUND SUBSIDENCE, YOU'RE GOING TO HAVE TO REPLACE THAT PIPE AND IT COULD BE 10 YEARS OLD.

WHEN YOU START TALKING ABOUT AVERAGE NUMBERS, YOUR GUESS IS PROBABLY AS GOOD AS MINE.

[01:35:04]

YOU HOPE TO GET MORE THAN THAT.

THERE ARE MANY MUNICIPALITIES OUT THERE AND OTHER JURISDICTIONS THAT HAVE PIPES THAT HAVE BEEN IN THE GROUND OVER 100 YEARS, BUT YOU DIG INTO THE DETAILS ON THESE.

THESE ARE CAST IRON PIPES, THEY WERE MADE AT A TIME WHEN THEY WERE MADE MUCH THICKER THAN CURRENT CAST IRON PIPES.

NOT ALL OF THEIR PIPES ARE GOING 100 YEARS.

IF YOU HAVE ONE PIPE IN YOUR ENTIRE CITY THAT GOES 100 YEARS, DID YOU ASSUME THAT ALL OF YOUR PIPES ARE GOING TO GO 100 YEARS? NO, YOU CAN'T.

ABSOLUTELY, I WOULD LOVE TO SEE YELLOWKNIFE JOIN THE UNDERGROUND ASSETS CENTER GENERIC CLUB.

BUT DO YOU USE THAT TO FISCALLY PLAN? I SEE A LOT OF RISK IN THAT.

>> AGREED. THANKS AGAIN FOR THE PRESENTATION, I THINK IT'S REALLY IMPORTANT WORK AND I'M WONDERING THOUGH, ASSET MANAGEMENT COMES ACROSS VERY JARGONY, IF I TALK TO RESIDENTS IT'S REALLY IMPORTANT STUFF.

THIS IS A HUGE PRIORITY FOR COUNCIL AND IT'S LIKE YOU GUYS DON'T KNOW WHAT YOUR PRIORITIES ARE.

ANY THOUGHT OF SERVICE DELIVERY MANAGEMENT BECAUSE THAT'S WHAT IT IS.

YOU SAY AN ASSET FOR SERVICE, AND IF I TALK ABOUT SERVICE DELIVERY, I THINK RESIDENTS MIGHT BE A BIT MORE INTRIGUED.

JUST WONDERING IF THERE'S A NON-JARGON WAY THAT'S BEING CIRCULATED IN THE ASSET MANAGEMENT WORLD [LAUGHTER] TO TALK ABOUT THEMSELVES, MS. BESSIE KAYLA.

>> I'LL ASK MR. HOOVER TO TAKE THIS ONE.

>> THAT'S A GOOD QUESTION. [LAUGHTER] IN AUSTRALIA, THEY'VE USED THE TERM SERVICE MANAGEMENT, BUT AT THE END OF THE DAY THEY'VE REALIZED THAT ONCE YOU START CALLING IT SERVICE MANAGEMENT YOU ARE COMPARTMENTALIZING IT TO A CERTAIN AREA, BUT WE ARE SEEING ASSET MANAGEMENT IT'S INTEGRATED ACTIVITIES WITHIN THE ORGANIZATION SO YOU ARE TRYING TO PUT TOGETHER DIFFERENT FUNCTIONS.

ASSET MANAGEMENT BECOMES THE ONLY WAY THAT WE CAN USE, I THINK AT THIS STAGE.

HOWEVER, IF WE ARE TALKING TO THE COMMUNITY, THERE'S NO HARM IN STARTING THE CONVERSATION AROUND SERVICE AND TALK MORE AROUND SERVICE MANAGEMENT, SERVICE PLANS, BECAUSE WE KNOW THOSE SERVICE PLANS CAN BE INTERPRETED AS ASSET MANAGEMENT PLANS.

TALKING TO THE COMMUNITY, YES, THE WORD SERVICE I THINK IS A BETTER WAY THAT THEY WOULD UNDERSTAND MORE THAN JUST ASSET MANAGEMENT AS A TERM.

SOME MAY ACTUALLY THINK IT'S A FINANCIAL ASSET MANAGEMENT SYSTEM.

>> FIRST OFF, I WOULD JUST LIKE TO SAY THAT, YES, ASSET MANAGEMENT DOES COME ACROSS AS VERY JARGONY.

I'M QUITE ENJOYING THIS CONVERSATION BECAUSE I LIKE TALKING ABOUT ASSET MANAGEMENT AND THEY'RE NOT VERY MANY PEOPLE THAT ARE INTERESTED IN TALKING ABOUT IT.

HOWEVER, THERE ARE LOTS OF PEOPLE THAT ARE INTERESTED IN TALKING ABOUT THE SERVICES THEY RECEIVE AND HOW MUCH THEY COST.

IF YOU CAN TALK ABOUT ASSET MANAGEMENT WITHIN THE CONTEXT OF WHAT PEOPLE RECEIVE AND WHAT THEY'RE WILLING TO PAY FOR IT, I THINK THAT'S WHERE YOU CAN CONNECT TO THE PUBLIC.

NOW, YOU WILL LIKELY FIND THAT THERE IS A KNOWLEDGE GAP REGARDING HOW MUCH THINGS ACTUALLY COST AND HOW MUCH RISK MANAGEMENT COSTS.

BECAUSE RISK MANAGEMENT IS NOT SOMETHING THAT MANY PEOPLE DEAL WITH ON A DAY-TO-DAY BASIS IN TERMS OF WHAT THEY PAY FOR.

LEVEL OF REGULATION, THE LEVEL OF RISK THAT THE CITY IS REQUIRED TO CONTROL IS NOT RELATABLE TO MANY PEOPLE'S DAY-TO-DAY EXPERIENCE.

TALKING ABOUT RISK AND TALKING ABOUT SERVICES AND TALKING ABOUT COSTS IS PROBABLY THE BEST WAY TO APPROACH THAT CONVERSATION.

ASSET MANAGEMENT IS REALLY JUST ABOUT TRYING TO CONNECT OUR ASSETS TO THOSE THREE THINGS TO MAKE SURE THAT THEY GET WHAT THEY THINK THEY'RE PAYING FOR.

>> FOR SURE, AND I RECOGNIZE WE'RE NOT GOING TO FIND ONE TERM EVEN CAN'T TALK TO A COUNCIL ABOUT THE BUDGET. I'M NOT GOOD AT MATH.

WHAT SERVICES DO YOU WANT AND WHAT ARE YOU WILLING TO PAY FOR? PEOPLE WANT TO HAVE THAT CONVERSATION.

THAT'S WHAT THEY EMAIL US MULTIPLE TIMES A WEEK IS, I WANT THIS NEW SERVICE, I WANT THAT AND GOES INTO GENERALLY LIKE NO, IT WON'T COST THAT MUCH, YOU COULD DO IT THIS WAY.

LOOK FORWARD TO HAVING THIS CONVERSATION WITH THE COMMUNITY.

WE STARTED I THINK A LOT IN THE LAST COUNCIL AND CONTINUING WITH THIS COUNCIL.

WE HAVE REACHED OUR PAST 90 MINUTES MARK BUT FOR THE SECOND ROUND OF QUESTIONS I JUST HAVE COUNCIL FEQUET SO FAR, SO I THINK WE CAN POWER THROUGH, COUNCIL FEQUET.

>> I'LL BE SUPER QUICK. FALLING UPON COUNCIL HENDRICKSON'S EARLIER COMMENT, MY RECOLLECTION WAS THAT THE BUDGET WE APPROVED IN THE FALL OF 2023 DID NOT INCLUDE ANY REPLACEMENT COSTS FOR SOME OF OUR LARGER ASSETS LIKE CITY HALL THAT WE WERE JUST TALKING ABOUT.

NOTING THE ASSESSMENT THAT THE CITY MANAGER

[01:40:03]

>> MS. BASSI-KELLETT?

>> THANK YOU VERY MUCH. WE WOULD LOVE TO START TO DO THAT AND CERTAINLY, THAT'S BEEN A WAKE-UP FOR US AROUND THE ISSUE AROUND CITY HALL AND THE STATE OF CITY HALL.

WHETHER WE CAN DO IT GIVEN SOME OF THE EXPONENTIAL COSTS ARE FACING ON EXISTING PROJECTS, WE'RE GOING TO NEED TO DO SOME DEEP THINKING ON THAT TO SEE WHAT IS REASONABLE AND AT WHAT POINT WE'RE GOING TO START TO DO THIS.

I'D LOVE TO SEE IF MR. HOOVER AND MR. MCLUHAN WOULD LIKE TO WEIGH IN ON THIS ON BEST PRACTICES. THANK YOU.

>> YES, I SUPPORT THAT.

IT'S SOMETHING THAT WE NEED TO START DOING. BEST PRACTICE.

YES, IS DONE IN MOST MUNICIPALITIES, BUT FOR US IT WILL BE THE BEGINNING.

WE NEED TO START DOING IT. YES, I AGREE. YOU CAN TELL HER MORE.

>> I JUST WANT TO ADD THAT, IT'S AN ITERATIVE PROCESS.

FIRST STEP, FIGURE OUT EVERYTHING YOU HAVE, FIGURE OUT HOW LONG IT WAS SUPPOSED TO BE WHEN YOU'RE ESTIMATING TO REPLACE IT AND TRY AND PRODUCE THOSE TYPES OF LONG-TERM CHARTS.

THEN YOU LOOK AT THAT AND THEN YOU SAY, IS IT GOING TO HAPPEN OR NOT? WHAT CAN WE DO INSTEAD? WHAT'S THE RISK IF WE DON'T DO IT? CAN WE PUSH IT OUT? WHAT'S ITS CURRENT CONDITION? SHOULD WE REPLACE IT? IF IT'S DOING ITS JOB, IT'S DOING ITS FUNCTION, MAYBE WE PUSH THAT OUT ANOTHER FIVE YEARS.

THAT'S THE FIRST STEP, IT'S ALWAYS TO GET YOUR ASSETS INTO THE INVENTORY, THE REGISTRY.

THAT'S PART OF THE NEXT STEPS WITH THAT PARTICULAR ASPECT OF THE WORK.

RIGHT NOW AS I SAID, WE HAVE FLEET ASSETS IN, TO BRING MORE ASSET TYPES INTO THE REGISTRY TO GIVE THAT SAME FIRST PASS AT WHAT THE FUTURE LOOKS LIKE.

>> THANKS FOR THAT. I JUST WANTED TO VOICE MY STRONG SUPPORT FOR UNDERSTANDING AGAIN, WE DON'T HAVE FULSOME DATA, WE DON'T HAVE THE INVENTORY IS COMPLETE.

DEFINITELY SEEMS LIKE WE SHOULD START INCLUDING SOME BALANCE OF COSTS KNOWING THAT THEY WILL CHANGE AND BE MORE REFINED OVER THE YEARS TO START SETTING ASIDE FOR A RAINY DAY.

>> THANK YOU. HOW WAS THE TERRITORIAL ELECTION COMING UP? HOPEFULLY, RESIDENTS ALSO VALUE THEIR WATER AND WE'LL BE ASKING THEIR CANDIDATES WHETHER THEY'LL BE SUPPORTING THE YELLOWKNIFE UNDERFUNDED FOR CAPITAL PROJECTS $9 MILLION A YEAR, AND WE'VE GOT SOME BIG YEARS.

IF WE HAD NINE MORE MILLION A YEAR, WE COULD ACTUALLY START SAVING AND APPROPRIATELY BEING ABLE TO SOFTEN THE BLOW FOR THE FUTURE, BECAUSE IT'S NOT JUST THE WATER PIPES THAT ARE GOING TO NEED TO BE REPLACED AND JUST THAT ALONE HURTS THE STOMACH THAT'S FOR SURE.

SEEING NOTHING FURTHER, THAT'S IT TILL 7:00 PM WHEN WE HAVE OUR COUNCIL MEETING.

IF I'M GIVEN A MOTION TO ADJOURN, MOVED BY COUNCILOR HENDRICKSON, SECOND BY COUNSELOR PAYNE.

ANYBODY OPPOSE? SEEING NONE.

AGAIN, THANKS FOR THE PRESENTATION AND WE CAN BE ADJOURNED.

* This transcript was compiled from uncorrected Closed Captioning.