1. 1 Town of Tillsonburg Lifecycle/Capital/Debt Strategy

2. 2 Asset Management Long-term goals: Assess on an enterprise wide basis, asset life cycle, the condition, useful life and replacement cost of assets Stabilize the required funding levels Be able to respond to residents on the timing of capital projects Assets to tie to GIS database

3. 3 Asset Management Short-term goals: Identify the infrastructure Gather asset information such as age, location, construction material, etc. Assess timing of major repairs and replacements Assess financing needs and funding options on a macro scale

4. 4 Asset Management Project overview Data gathering began in the first half of 2005 for roads (which includes curbs and gutters), sidewalks, storm sewers, facilities, and fleet Use of WorkTech for compiling detailed data Provincial borrowing cap is $1.5 million There has been a significant learning curve for all Objective of this presentation is to begin discussions on capital funding needs and options for the 2006 budget and beyond

5. 5 Asset Management WorkTech – Approach to Roads Block: a section of road between two intersecting functioning roads Data collected: Block lengths Existing widths of each block Assigned each block an asset class: UP50 – urban, paved, 50 yr. life; UP42 – 42 yr. life; UP35 – 35 yr. life; RP50 – rural, paved, 50 yr. life; RP42; RP35; GR1 – gravel surface

6. 6 Asset Management Data collected con’t: Assigned each block a subtype according to OGRA standards: LCI - local commercial industrial; L/R - local residential; CCI - collector commercial industrial; C/R - collector residential; ART - arterial roadway Year road sections and storm sewers were built Determined surface types: HCB - high class bituminous; ICB - intermediate class bituminous; LCB - low class bituminous; GR - gravel

7. 7 Asset Management Data collected con’t Determined class of each block of road according to Provincial Minimum Maintenance Standards Determined whether the block has curb and gutter Determined the location and the OPSD of each section of curb and gutter Determined Length, width and location of all sidewalks

8. 8 Asset Management Established benchmark costs Our reconstruction prices from the past 3 years Recent subdivision construction prices For the remaining items supplier prices were used with the addition of estimated installation costs

9. 9 Asset Management Data was summarized from WorkTech or the existing five year capital plan to arrive at the average annual requirements for all departments over a 10 year time horizon Note that a 10 year time period may not cover the full life cycle of an asset and an averaging approach does not take into account asset replacement spikes Average annual requirements are $4.88 million Based on what we currently collect from taxation for capital, a deficit of $4.13 million potentially exists

10. 10 Asset Management Assumptions: 5% cost of capital 15 year term for debt 10 year time horizon Data requirements are averaged Federal Gas Tax revenue of $1.14 million reduces the annual debt requirement over 5 years No inflation factor

11. 11 Asset Management Assumptions con’t: Real assessment growth estimated to be 1% for each of the 10 years relating to residential, commercial and industrial growth Remaining reserve balances are either phased in over a 11 year period or topped up (applies to Roads) New strategic projects anticipated, such as capital costs for medical center, golf course, industrial land acquisition and potential oil clean up No other funding sources considered

12. 12 Asset Management Estimated Enterprise Wide Asset Values: Fleet: $15.7 million Facilities: $37.8 million Roads: $84.5 million IT: $0.2 million Total: $138.2 million

13. 13 Asset Management Scenarios

14. 14 Asset Management Results for proposed scenario: Total expenditures Total deficit Principal and interest payments Outstanding debt Fleet department Roads department

15. 15 Asset Management Choices: Define required capital service level Defer projects % increase in taxation for capital assets Pursue other funding sources, such as RED, Tobacco transition, COMRIF, etc

16. 16 Asset Management Discussion - other scenarios? Next steps: Ongoing annual project to refine data, getting better use from WorkTech software and keep the data current Phase 2, 2006, refine condition assessments and additional areas to be inventoried (Hydro, bridges, water, sanitary, etc. and completion of storm) Analyze asset spikes and consider options to create uniform asset replacement and stable funding levels