Sustainable Infrastructure Replacement Plan
About City of Colwood, BC
The City of Colwood is located on the south coast of Vancouver Island in beautiful British Columbia. Colwood is a fast growing, family-friendly seaside community with an approximate population of 17,000, and enjoys a shared connection to nature and a rich heritage. The City has prioritized strategic asset management as a financial best practice, and recently adopted a new Official Community Plan (OCP) as the community is poised to experience significant growth and development. The City of Colwood's 50-year sustainable infrastructure plan ("Plan") forecasts capital spending on current services so that Colwood can proactively plan and fund future infrastructure replacement obligations. Also included in the Plan was a preparation of a condition assessment for all $375 million in City assets. The Plan calculated the difference between sustainable annual infrastructure funding and current annual infrastructure funding. This analysis found that the City was funding approximately 40% of sustainable funding levels. This Plan seeks to remedy the funding gap via proactive infrastructure investment, saving approximately $86 million in taxpayer dollars and ensuring the preservation of capital services and natural assets that define the community of Colwood. A long-term funding strategy will help the City obtain best value for capital service over the long term, avoid sudden sharp tax increases when assets are due for replacement, and create community resilience.
Implementation of Best Practice
The process for implenting GFOA's best practice on Capital Asset Management was broken into 7 steps.
- The Plan was supported by expertise in finance and engineering, integrating two recently conducted engineering studies: a stormwater master plan, and the pavement condition assessment. The Plan also utilizes a complete inventory of physical assets and condition, going above and beyond by preparing an inventory of natural assets such as trees and coastline.
- The Plan establishes conditional and functional performance standards. It utilizes a modified American Society of Civil Engineers method of condition assessment, and breaks down capital assets into an Infrastructure Report Card (pictured below).
- Evaluation and capital asset optimization are a key policies in the City's annually adopted budget principles. The Plan assumes that capital services will be provided in perpetuity, however, the Council has directed staff to view the Plan's assumptions annual and adjust as necessary.
- The Plan identifies necessary dedicated fees or other revenue sources for each capital asset class. For instance, the Plan advocates for the creation of a sewer infrastructure replacement user fee. This fee would replace the local area service tax paid by taxpayers once related debt has expired.
- Sufficient funding will be allocated in the multi-year capital Plan. The City's adopted Plan recommends 12 years of increasing taxes by 1%, and dedicates $900K in new funding starting in 2019. These measures add over $3.6M in capital funding over the life of the 2019-2023 financial Plan. The Council adopted these recommendations on the condition that they are reviewed annually.
- The Plan prioritizes monitoring and communicating progress toward progress. The asset condition rating contained within the Plan included the assessment of "funding vs. need." The City has forecasted its performance compared to 100% sustainable funding.
- The Plan creates a plain language report on capital assets - this is the City's first report on capital assets. Staff have been directed to review the Plan annually and report to Council. The City adopted the Plan-recommended policies that will be integrated into the City's financial plan bylaw to be reviewed annually.
The City of Colwood's Infrastructure Report Card Key:
City of Colwood's Infrastructure Asset Report Card:
Tools and Resources
GFOA Best Practice: Capital Asset Management
GFOA recommends that local, state and provincial governments establish a system for assessing their capital assets and then appropriately plan and budget for any capital maintenance and replacement needs.