CAPITAL BUDGET Proposed 2019-2022
Transcript of CAPITAL BUDGET Proposed 2019-2022
Proposed 2019-2022 CAPITAL BUDGET
THE CITY OF EDMONTONCITY COUNCILOctober 23, 2018
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OUR CAPITAL BUDGET
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Opening Comments - City Manager
● Good morning - We’re pleased to present the 2019-2022
proposed Capital Budget.
● The City of Edmonton’s Capital and Operating Budgets are
about building a great city.
● They work together as two parts of an overall commitment
to imagining and animating Edmonton.
● This Capital Budget is about the “stuff” that we build and
maintain.
● It’s about the new - and renewal of - roads, bridges,
sidewalks, parks and facilities that we use every day.
● It’s a mix of maintaining the infrastructure we have and
building the infrastructure we need - all in benefit to
● Edmontonians and their quality of life.
● It was thoughtfully prepared to help City Council make
informed decisions on how best to prioritize and allocate
available funding.
● I’m enormously proud of the work done by City of
Edmonton employees across the corporation to give you
the most accurate data and analysis possible.
● And now I’d like to hand the presentation over to Barry
McNabb, Branch Manager of Financial Strategies and
Budget.
PRESENTATION OUTLINE
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1. Overview & Economic Context 2. Available Capital Funding & Debt Capacity3. Capital Investments in 2019-2022 ($4.3B)
a. New Infrastructure Growth ($2.3B)i. Previously Approved Transformational/Growth ($1.8B)
ii. New Growth Projects ($0.3B Constrained/$0.2B Unconstrained)
b. Renewal of Existing Infrastructure ($2.0B)
4. Next Steps & Closing Remarks4
Thank you Ms. Cochrane and Good Morning Mr. Mayor and
members of Council
● In this presentation of the Proposed 2019-2022 Capital
Budget, I will begin by providing a brief overview of the
development of the budget including the economic
context in which it was prepared.
● I will then review the projected available capital funding
over the 2019-2022 timeframe, with Ms. Padbury then
discussing the debt capacity of the City of Edmonton to
finance capital investments.
● Mr. Meliefste and Mr. Leeman will then review at a high
level the $4.3 Billion of capital investments recommended
by Administration as part of the 2019-22 Capital Budget
● including:
○ the continuation of transformational and other
growth projects during the 2019-2022
timeframe in the amount of $1.8 billion that
were previously approved by City Council
○ the proposed new growth projects
Administration is recommending for 2019-2022
based on $306 million of constrained and $241
million of unconstrained available funding, and
○ the renewal of the City’s existing infrastructure
in the amount of $2 billion.
● and then finally we’ll look at next steps following today’s
presentation working towards Council deliberations and
approval of the budget in late November and early
December,
● with Ms. Cochrane providing closing remarks.
OVERVIEW OF CAPITAL BUDGET
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● Capital Investment Outlook (Council April 2018)○ Limited available funding for new projects○ Council reconfirmed priority on renewal
● Proposed 2019-22 Capital Budget Guided by:○ Council's strategic goals ○ Principles & prioritization criteria (Council June 2018)○ Capital Project Governance (C591)
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● The foundation for the development of the Proposed
2019-2022 Capital Budget is the 10-year Capital
Investment Outlook that was presented to Council in April
2018.
● The Capital Investment Outlook identified a potential
funding gap of $3.8 billion over the next 10 years, with $15
billion of projected funding being available for $18.8 billion
of potential infrastructure investment.
● As part of the guidance and direction received during the
discussion of the Capital Investment Outlook, Council
reinforced the need to continue to invest in the renewal
and maintenance of the City’s existing infrastructure.
○ This direction has been reflected in the Proposed
○ 2019-2022 Capital Budget, as Mr. Leeman will
discuss further in this presentation.
● The development of the Proposed 2019-2022 Capital
Budget has also been guided by:
○ the City’s strategic planning framework and four
strategic goals which were approved by Council
earlier in the year
○ the capital planning principles and prioritization
criteria used in prior budget cycles which were
reaffirmed by Council on June 26, 2018, and
○ the Capital Project Governance Policy
● A key element of the 2019-2022 Capital Budget is its
alignment with the Capital Project Governance policy and
in particular the project development and delivery model,
which Mr. Meleifste will be reviewing in a few moments
● Constrained Capital Budget○ Continued economic uncertainty (oil prices, tariffs)○ Moderate population (1.9%)/economic growth (2.5%)
○ Rising interest rates & borrowing costs
● Emerging Issues Could Impact Budget○ Metropolitan region, annexation, grant funding
In depth Economic Presentation (2019-2022 Operating Budget Nov 7/18)
CONTEXT FOR CAPITAL BUDGET (Economic Outlook/Emerging Issues)
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● The development and execution of the proposed 2019-22
Capital Budget is very much dependent on the state of the
municipal, provincial and global economies.
● The Province and City are gradually recovering from the
significant and prolonged downturn in the economy that
began in mid 2014...and this gradual improvement and
growth is expected to continue over the next four years
with moderate population and economic growth of 1.9%
and 2.5% respectively.
● However, economic uncertainty and volatility is also
expected to continue with fluctuating oil prices and
potential US trade restrictions and tariffs.
● This economic uncertainty could impact the projected
● capital funding over the next four years, including the
timing and amount of federal and provincial grants.
● This economic uncertainty, along with rising interest rates,
could also impact the cost and delivery of projects
included in the 2019-2022 capital budget.
● And finally there continues to be emerging issues that
could impact the proposed 2019-2022 Capital Budget
going forward, including potential shared investment in
the greater metropolitan region and the growth in City
boundaries through annexation
● Administration will be providing a more in-depth analysis
of the economic outlook and the continued growth of the
City on November 7 as part of the presentation to City
Council of the Proposed 2019-2022 Operating Budget.
CAPITAL FUNDING & DEBT
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● This next slide provides a breakdown of the projected
available capital funding and debt included in the Proposed
2019-2022 Capital Budget.
● It is important to note that debt is not a funding source in
itself but rather a method of financing capital projects.
● The issuance of debt is an important tool to allow the City to
complete its capital infrastructure, including providing
matching funding in order to qualify for provincial & federal
grants.
● The Capital Budget includes $824 million of debt financing in
2019-2022 with an additional $94 million in 2023 & beyond.
● This debt financing is for the continuation of
transformational and other growth projects previously
● approved by City Council.
● Given the current economic and funding constraints, and the
need to maintain sufficient debt capacity for future
transformational and emerging projects including the
continued build-out of LRT, Administration has not included
the issuance of debt to finance any new proposed projects
in the 2019-2022 Capital Budget.
● Administration has provided a list of unfunded projects in
the Proposed Capital Budget that were rated as important to
the City through the Corporate Prioritization Process that
would be eligible under the City’s debt funding policy if
Council chose to do so.
○ Mr. Melifste will be reviewing these projects in a few
moments later in this presentation.
● So as also shown on this slide, the City’s ability to execute on
its capital program is very dependent on obtaining funding
from the federal and provincial governments which
comprise $2.1 billion, or nearly 50% of the total $4.3 billion
of funding excluding debt financing.
● this grant funding will assist with the continued renewal and
maintenance of the $30 billion of existing infrastructure and
facilities as well as the completion of other transformational
projects including Yellowhead Trail and the LRT buildout.
GRANT FUNDING
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● Provincial MSI ○ $244M reduction for 2018 to 2021 ($61M/yr)○ Impacts both renewal (90%) & new growth projects
● Grant Funding Not Included in 2019-2022 Budget○ Future LRT Buildout
■ Federal PTIF - $878M; Provincial - $1.5B○ Green Infrastructure and Affordable Housing
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● Notwithstanding this, the City continues to be challenged
by reductions in Provincial funding.
● As part of the 2018 Provincial Budget announced in March,
the Province reduced the MSI funding to the City of
Edmonton by $244 million in total from 2018 to 2021.
○ this equates to an average decrease of $61 million
per year from the $270 million of MSI funding
previously projected for 2018.
○ This projected reduction in MSI funding has a direct
impact on the Proposed 2019-2022 Capital Budget.
■ This includes renewal investment being held to
90% of the ideal recommended levels, and
limited unconstrained funding being available
■ to execute on a number of important new
growth projects.
○ The City is engaged in discussions with the Province
on a new fiscal framework that would commence
when MSI ends in March 2022.
○ At this time it is uncertain how much funding will be
provided under the new framework or what projects
would be eligible.
● There are also a number of Federal and Provincial grant
funding programs that the City will be eligible for in
coming years that have not been incorporated into the
Proposed 2019-2022 Budget:
○ This includes the $878 million of PTIF Phase II
funding (public transit infrastructure funding)
announced by the Federal Government as well at the
City of Edmonton’s $1.5 billion share of the $3 billion
of LRT funding announced by the Province for
Edmonton and Calgary over the next 10 years.
○ This also includes Green Infrastructure and
Affordable Housing funding as part of the bilateral
agreement between the federal and provincial
government.
○ The City has submitted a number of applications and
is continuing to assess civic priorities and other
○ potential projects that may be eligible for funding
under these programs going forward.
● Ms. Padbury will now discuss the CIty’s debt levels and
debt capacity in further detail.
DEBT LEVELS AND AVAILABLE CAPACITY
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● The graph on this slide shows the City’s total outstanding
debt forecast for the next 10 years. The top of the bars
represents the Municipal Government Act debt limit. The
bottom three bars represent all debt previously approved
by City Council. The striped bar represents the impact of
the potential new projects identified in the capital budget
as being debt eligible. While this graph identifies debt
eligible projects the operating impacts of those projects
(including debt servicing) has not been contemplated in
the operating budget. The light green bar shows a range
of total debt room that must be considered and reserved
for future LRT expansion. The range shown for LRT
expansion allows for uncertainties relating to the projects,
● including delivery methods and funding.
● The solid purple bar represents remaining room available.
You can see from the graph the available future debt
room is constrained after 2022 which could limit future
capital decisions, fiscal flexibility and the City’s ability to
use debt for emergent items and constrain the City’s
ability to match future federal and provincial funding.
DEBT LEVELS AND AVAILABLE CAPACITY
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● This next graph illustrates the impact of approved capital
on the City’s internal tax-supported debt servicing limit as
defined by the Debt Management Fiscal Policy. Again the
top of the bars represent the total internal debt servicing
limit in millions of dollars. The portions of the graph
beneath the striped bar represent tax-supported debt
servicing for approved capital projects. The striped bar
represents projected debt servicing for new projects
identified in the capital budget as debt eligible. While
identified on this graph, the debt servicing for these
projects has not been identified in the operating budget.
The light green line again represents the range of debt
servicing required for LRT expansion allowing for
● uncertainties relating to the projects, including delivery
methods and funding.
● Once again the solid purple bar represents the available
future debt servicing room. You can see from the graph
that debt servicing under the City’s current Debt
Management Fiscal Policy becomes constrained in 2022
and depending on the level of funding and method of
procurement for future LRT Projects the use of debt in the
next capital cycle may be constrained by the current
policy. The impact of this constraint, as indicated earlier,
could limit future capital decisions, fiscal flexibility and the
City’s ability to use debt for emergent items as well as
constrain the City’s ability to match future federal and
provincial funding.
● I will now turn the presentation backover to Mr. McNabb.
PROPOSED 2019-2022 CAPITAL INVESTMENTS
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Having now discussed the available capital funding and debt
capacity, the next set of slides will focus on the capital
investments included in the proposed 2019-2022 Capital
Budget:
● This initial slide provides a breakdown of the $4.3 billion of
proposed capital investments for 2019 to 2022 into
renewal and growth:
○ $2.0 billion (or 45%) of the total capital investment
has been earmarked for the renewal of the City’s
existing infrastructure, of which Council has
approved $0.1 billion in previous decisions.
○ The remaining $2.3 billion (or 55%) of the total
capital investment is for the design and delivery of
○ new growth projects.
■ This includes $1.8 billion in 2019-2022 for the
continuation of transformational and other
growth projects previously approved by City
Council
○ And $0.5 billion for proposed new growth projects of
which $306 million is tied to constrained funding and
$241 million is available from unconstrained funding
sources.
● So of the $4.3 billion of total investments included in the
Proposed 2019-2022 Capital Budget, City Council has
previously approved $1.9 billion with the remaining $2.4
billion of proposed investments being requested for
approval as part of this 2019-2022 Budget.
● I will now turn the presentation over to Mr. Meliefste and
Mr. Leeman to discuss these proposed growth and
renewal investments in further detail.
NEW INFRASTRUCTURE GROWTH PROJECTS
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This next part of the presentation focuses on the Project
Considerations and General Overview as it relates to GROWTH.
PREVIOUSLY APPROVED GROWTH PROJECTS
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● Previously Approved Growth Projects○ $1.806B in 2019-2022; $0.825B in 2023 & Beyond
● Transformational Projects○ Yellowhead Trail Freeway Conversion○ LRT Expansion
■ Valley Line Southeast ○ Blatchford Redevelopment
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● In developing the approach to the Capital Budget for
2019-22, Administration started with a review of the
previously approved projects.
● City Council has previously approved funding for initiatives
that extend beyond the 2015-18 budget for either;
○ 1) Transformation Projects where the Delivery span
multiple budget cycles, or
○ 2) Key Projects that were advanced to take
advantage of specific grants available, or
○ 3) to align with co-funded or Partner projects.
● The total value of these pre-approved projects represents
a total of $1.8B in cashflow in the 2019-22 and a further
$825M cashflowed in 2023 and beyond.
● In addition to the Transformation projects listed in the
slide (which includes Yellowhead, Valley Line, and
Blatchford), this funding is also represented by other large
significant projects such as;
○ 50 Street / CPR Underpass ~$100M
○ Coronation Rec Centre $112M
○ PTIF Program - Phase 1 $288M
CAPITAL BUDGET PROCESS FLOW
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CAPITAL INVESTMENT
OUTLOOK
CORPORATE PRIORITIZATION
PROCESS
DEPARTMENT CONSULTATIONS/
DISCUSSIONSCOUNCIL
DISCUSSIONS
CURRENT PROJECT LIST
Health and Safety
Integration with Renewal
Provincial Coordination
Leveraging Funding (Partner & Governments)
Limited Funding for New Growth Projects Constrained = $306M; Unconstrained = $241M
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● In terms of available funding, Administration has been
able to confirm $306M of available Constrained Funding.
Constrained Funding is funding that has specific
parameters in terms of how it can be applied as a capital
funding source. This is primarily attributed to CRLs (with
projects restricted within a geographic area) and Land
Enterprise (which includes restrictions in terms of its use
land assembly and development). It also includes other
smaller reserve accounts included in this category.
● This leaves approximately $241M of unconstrained
funding available over the total 4 years of the capital
budget, or approximately $60M per year.
● This amount of funding has presented challenges in terms
● of the approach in recommending projects to put forward
for consideration. This isn’t to suggest that projects not
funded, are not a priority, but simply a rationalization of
approximate $18B of needs identified in the 10-year CIO
against $241M (or $547M including constrained funding)
available for this 4-year Capital Budget. The Corporate
Prioritization has been helpful in establish a first cut of
ranking of projects best aligned with Council’s Priorities.
That said, there are further considerations or filters that
have been applied to rationalize the recommendations
included in the budget presented today.
● The first is health & safety and other legislative changes.
This includes providing essential provisions for the very
basic needs of a safe work environment for employees as
well as responding to various new safety codes or safety
legislation. An example of this is can be found in City
Operations where projects are being advanced that
provide basic washrooms at various sites or in Citizen
Services where improvements to the chlorination systems
in pools are being recommended..
● The second is integration with renewal. This has to with
the risk of Renewal Investments and Growth Investments
being properly integrated to take advantage of
opportunities to sequence/program the work in a cost
● effective manner. An example of this is related to Imagine
Jasper Avenue or the Fire Station Gear Rooms where these
projects are cross-referenced with high priority renewal
locations..
● The third relates to provincial coordination. This includes
examples such as parkland base level development to
correspond with funded school construction. It similarly
includes roadway planning coordination with Provincial
Roadway projects.
● The last filter speaks to leveraging funding with Partner
groups.. This includes programs like Roots for Trees,
Neighbourhood Park Development Program, Shared Park
Development Program, or River Valley Alliance all which
contribute to achieving outcomes at a discounted rate.
CAPITAL PROJECT GOVERNANCE POLICY (C591)
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Project Develop & Deliver Model (PDDM)● Checkpoint 1 - Capital Investment Outlook● Checkpoint 2 - Authorization for Design Expenditure● Checkpoint 3 - Capital Budget Approval● Checkpoint 4 - Authorization to Construct● Checkpoint 5 - In-Service
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● This budget looks and functions significantly different than
past capital budgets. This is largely as a result of the
recently approved Capital Project Governance Policy C591
which is designed to improve the information that Council
receives from Administration as it relates to project Scope,
Schedule, and Budget. This approach is consistent with
other public utilities or private companies with large
capital investments. The result is anticipated to improve
project performance and improve Council’s ability to make
informed decisions.
● Policy 591 translates to an administrative process referred
to as the Project Develop & Deliver Model. Many of the
projects listed in the capital budget are currently at
● various levels of maturity represented by checkpoints
described in this Model as shown on the slide and
referenced in the budget document. These checkpoints
correspond to the various phases of the project lifecycle
spanning from Strategy to Operate. In past Capital
Budgets, many of the projects approved were at
approximately checkpoint 1. Council approved them once.
The intent with the model is that Council will approve
projects twice, once representing the “Develop” phase
(checkpoints 1->3), and a second for the “Deliver” phase
(checkpoint 3>5).
● With this enhanced approach, it’s important that Council
not only provide direction as it relates to “Deliver” or Build
priorities, but provide similar thoughtful consideration to
the priorities related to “Develop” or Planning & Design.
● Briefly expanding on this, if a project is currently at
checkpoint 1, the initial funding to be considered for
approval would be for the Develop work. Once a project
has completed this work and advanced to checkpoint 3
the project would then presented to Council for approval
for Delivery. At this point the project would be created as a
standalone profile to ensure transparency and allowed for
improved oversight and accountability by Council to
Administration as it relates to project performance. The
● project and associated funding could be presented as an
emerging priority for Delivery funding in a future SCBA, or
the funding can be held in both the Develop and Delivery
composite profiles as part of this 4-year capital budget
process.
RECOMMENDED NEW GROWTH PROJECTS
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● All things considered, Administration has recommended a
portfolio of projects across various lines of business
including Infrastructure, IT, Fleet, and Partner. The funding
put forward includes, where applicable, funding distinctly
for either Develop and Delivery.
● In Building Great Neighbourhouds there are items to
continue work on the concept of Community Hubs, and
Industrial Neighbourhoods, as well as continuing the core
work of Building Great Neighbourhoods integrated with
the Neighbourhood Renewal program as aligned with
separate reports to Council earlier this year.
● Facilities primarily includes projects responding to Health
& Safety, such as addressing the risk of Chlorinated gas in
● pools, and off-gassing from Fire Gear Rooms.
● Transportation includes the first/initial stage of Jasper
Avenue (109-114 Street) and the next phase of 105 Avenue
(109-116 Street). Both sections of road are in poor
condition. The investment identified in the growth
category corresponds with the base renewal funding
found in other programs.
● Open Spaces includes base level park development for
various sites where Schools are under construction or will
be built in the next 3 years. It also includes basic core
programs such as tree canopy growth, and continuing
work with cemetery development to keep the supply of
services in alignment with demand.
● Information Technology includes amounts primarily for
the implementation of eProcurement and Information
Security and Disaster Recovery Enhancements, as well as
other IT growth.
● Fleet includes new apparatus for Fire Rescue Services, as
well as additional snow plow clearing equipment.
● The total of these recommendations makes up the $241
million made available from Unconstrained sources.
● Projects funded by Constrained Sources accounts for $306
million and is mainly comprised of land acquisition and
development ($188M as well as projects funded through
● community revitalization levies ($94M) (Jasper Avenue
New Vision, Green & Walkable Downtown, Warehouse
Campus Nbhd Central Park)
● More information on the complete list of projects can be
found in each of the corresponding profiles listed on this
slide.
POTENTIAL DEBT FINANCED PROJECTS
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PROJECT● Lewis Farms Recreation Centre, Library and District Park● Terwillegar Drive - Expressway (Phase 1)● Edmonton Soccer Association - South Soccer Centre Expansion● Valley Zoo Nature’s Wild Backyard - Phase 2● Stadium LRT Station Upgrade● EPS Firearms Facilities● On-Site Microgeneration Solar Photovoltaics● LED Streetlight Conversion● Ambleside Integrated Operation Site (Stage 1)
STATUSCheckpoint 4Checkpoint 2Checkpoint 4Checkpoint 3Checkpoint 2Checkpoint 2Checkpoint 1Checkpoint 1Checkpoint 2
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● This still leaves some large funding decisions on other
Council high priority projects that have been advancing
over the past few years. The combined value of the
projects listed on this slide are in excess of $600M, or
almost 3 times the amount of the available unconstrained
funding available.
● Administration worked through the balance of high
priority projects and reconciled them against the Debt
Policy to come up with this initial list. This list is not
complete or extensive and could vary based on the
considerations and decisions by City Council.
● For projects that have not advanced to Checkpoint 3, the
initial funding through Debt would include the remaining
● funding to complete the Planning & Design, whereafter
the results would be presented to Council and the
borrowing bylaw would be updated to reflect the Delivery
amount.
RENEWAL OF ASSETS
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I will now turn things over to Mr. Leeman to discuss the Renewal Program
WHY RENEWAL?
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• We renew to ensure the asset is performing for its intended use
• We ensure existing infrastructure is operating in an efficient manner and condition
• We renew to extend the service life of our infrastructure • Renewal is guided by the Infrastructure Strategy and the
Infrastructure Asset Management Policy (C598)
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● There are many reasons we, as a municipality, reinvest in
our infrastructure. To provide services, our infrastructure
needs to be in good working order; operating in an
efficient manner, and condition. We renew our assets to
extend the service life, essentially ensuring we get the
most we can out of our investment. By continuing to
renew our assets throughout their lifecycle, we will save
resources, and maximize the value of our assets as it
relates to the services they provide. Our latest reports
indicate that 49.2% of our assets are in Good and Very
Good physical condition. However, 40.5% are in Fair
condition with the remaining 10.2% in Poor and Very Poor
condition.
● Our renewal decisions are guided by the Infrastructure
Strategy and the Infrastructure Asset Management Policy.
These documents provide guidance to assist in a
systematic approach to asset management; ensuring we
realize value for our assets. The Policy provides 5 Key
principles that shape intent for the practice of asset
management in Edmonton - Service Delivery to
Stakeholders, Long Term Sustainability and Resiliency, An
Integrated, Holistic Approach, Investment Decision
Making, and Innovation and Continuous Improvement.
Keeping our Asset Management Strategy and Policy top of
mind as we identify and address our renewal needs for
the next four and 10 years assists to ensure we are
renewing the right assets, at the right time, using our
available resources as effectively as possible.
WHAT IS RIMS AND THE ALLOCATION METHODOLOGY?
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• RIMS is a “Made in Edmonton”, Risk-Based Infrastructure Management System
• RIMS is used to assess the rehabilitation needs of the City’s assets• RIMS uses basic asset information to support allocation of
available funding such as;• An asset’s current physical condition• The target physical condition• Renewal and investment options/costs• Expected lifecycle deterioration curve
• These inputs model the effect of different investment options and their timing throughout the life of an asset
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● One of the first steps in the development of this budget
was the use of RIMS to assess our renewal funding needs.
RIMS, or the Risk-based Infrastructure Management
System, is a made in Edmonton solution developed to
assist in the process of deciding what to fund, and to what
degree reinvestment is required.
● RIMS has been used since 2012 and uses an assets’
current physical condition, its target physical condition,
renewal investment options, and expected life cycle
deterioration curves to model the effect of different
investment options and their timing throughout the life of
the asset. Ideally, the condition of any asset will fall within
an acceptable tolerance range or standard. This tolerance,
● or conversely, the physical condition beyond which the
deterioration is unacceptable, differs for every asset. The
physical standard is dependent on the type of service the
asset is providing, the risk to the City if it fails, and the best
combination of investment and performance to maximize
the life of the asset, at a minimized cost.
INVESTMENT AND ASSET CONDITION
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● The graph you see in front of you provides a snapshot of
historical investment compared to the percent in poor and
very poor condition. As you can see, with significant levels
of reinvestment, we have been able to reduce the percent
in poor and very poor condition from a high of 17% in
2011 to 10.2 percent in 2017. Using RIMS, modeling was
performed to understand both ideal funding levels, and
reduced funding scenarios to determine the impact of
investment on asset performance.
● As Mr McNabb mentioned, administration is
recommending funding for renewal of approximately
$488M/year, or just under $2 billion for the 19-22 capital
cycle. To be clear, this is a reduction from the RIMS ideal
● allocation of $2.1 billion as discussed earlier this year in
the Capital Investment Agenda, and is based on the
premise of preserving the same amount of PAYG and MSI
funding dedicated to renewal in the proposed 2019-2022
Capital Budget as was used in the previous Capital Budget.
In the face of continued need to reinvest in our existing
assets, reduced Provincial MSI, and mounting growth
pressures, Administration believes this to be a prudent
compromise in the balancing of these risks. Funding
dedicated by Council to particular assets or programs,
namely Neighbourhood and alley renewal, and non-transit
fleet assets, is preserved in this budget.
● With this funding proposal, we project that the overall
condition of assets in poor and very poor condition will
increase again over time. Although Administration
believes this is manageable. In addition, in the coming
years Edmonton will experience an increase in the amount
of assets in Fair condition, as assets currently in Good and
Very Good condition deteriorate.
● Without reinvestment, these assets could continue their
downward trend to poor and very poor condition. The
longer the required renewal of municipal assets is
deferred, the more deterioration impacts are felt and the
more expensive it becomes to bring these assets back to
● an acceptable condition. As in previous budgets,
Administration will do all it can to find the optimum
balance of investment between poor and fair condition
assets in order to minimize long term costs and address
current risk.
● During the next set of slides, I will unpack how funding will
be distributed throughout the asset base, the extent of the
reductions to the RIMS ideal budget, and some of the
systemic improvements Administration is undertaking in
managing the renewal budget.
PROGRAM AREAS
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Goods Movement● Interchanges● Rail Crossings● Safety● Minor Arterials● Major Arterials
Public Transit● LRT (bricks & mortar)● Park and Ride● Transit/LRT Centres● Bus Stops
Traffic Systems● Traffic Signals● Street lighting● Transit Priority Signal● Pedestrian Signals● ITS● Overhead Sign
Structures
Bridges & Structures● Bridges & Culverts● Noise Walls● Retaining Walls● Guardrails● Auxiliary Stairs
Active Modes● Main Streets● Complete Streets● Bike● Pedestrian
Soft Landscaping● Trees● Shrub & Flower Beds● Roadway Landscaping
Neighborhoods● LRT● Park and Ride● Transit Priority● Transit/LRT Centres
River Valley System● Trails● Staircases● River Access● Roads● Parking Lots
Environmental● Land Remediation● Slope Stability● Erosion Repairs● Snow Storage Facilities
Safety and Security● Fire Stations● Police Stations● Emergency
Management
Open Spaces / Facilities● Stormwater Facilities● Cemeteries● Golf Courses● Valley Zoo● Fort Edmonton
Parks● Parking Lots● Roads / Trails● Utilities● Site Amenities● Sportsfields● Artificial Turf
Service Support● Fleet Garages● Service Yards● Waste Facilities● Admin Offices &
Operational Centres● Training Centres● Transit Garages
Service Delivery● Transit/LRT Centres● ECO Stations● Recreation Centres● Arenas / Aquatic
Facilities● Seniors / Community
Cultural Centres
Information Technology
Fleet and EquipmentPartner● NPDP Renewal
TRA
NSP
ORT
ATI
ON
OPEN SPACES
FACI
LITI
ES
Public Transit● Bus Fleet● Transit
Communications & Signals
● LRV Fleet
Spec
ializ
ed E
quip
men
t
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● The groupings of assets shown on this slide represent the
service areas we considered as we allocated the renewal
dollars. This approach was taken to not only reflect how
we are managing our assets and provide service to
citizens, but to also achieve the best value for our
investment dollar. Currently, within Integrated
Infrastructure Services, assets are supported in three main
categories; Transportation, Open Spaces, and Facilities.
Other areas within the City are responsible for the asset
management needs of Specialized Equipment assets such
as Fleet, Equipment, Information Technology, and Transit
rolling stock. As we continuously improve, the
categorization of assets may be adjusted to improve their
● management and improve transparency to Council and
the Public.
● Renewal projects are prioritized within the program to
achieve the best results for the city overall. This is done by
building a priority list of renewal actions, then parsing and
optimizing these actions into an effective program of
projects.
● Individual asset current condition, while important to
prioritization, is not the only consideration when a
renewal project is considered. Administration looks at
several factors to determine renewal priorities, such as:
○ the long term plans for the asset,
○ the asset’s impact on level of service,
○ the consequence of failure,
○ and the capacity for the capital investment to reduce
or avoid future operational costs.
● Once a broad prioritization of projects has been
developed, Administration applies a strategic filter to the
list, optimizing the projects within the program. This
optimization considers factors such as:
○ timing of adjacent or connected projects,
○ geographic alignment of the work,
○ financial effectiveness,
○ strategic alignment,
○ and the assets functional adequacy and availability
of additional growth funding
● As renewal projects develop, information on scope,
scheduling, and cost are further refined, producing a
better picture of how the project impacts the overall
development of the renewal program. Throughout the
fiscal cycle, as projects advance and change from the
original assumptions, the program is adjusted to
accommodate these changes. Some projects will come in
under expected costs and some over expected costs.
Some projects will advance slower than planned, which
will impact when expenditures will be made, and some
new projects will emerge as high priority for the reasons
mentioned earlier. In consequence, one project might be
placed on hold, rescheduled, or phased to make room for
another project. Managing our infrastructure at a program
level allows us to be dynamic, in that we can adjust based
on asset needs, availability of funding, and project
readiness.
● Further information on some of these individual programs
can be found in Attachment 1 of the report in front of you.
Detailed lists of the prioritized projects can be found in
Appendix A for each proposed renewal composite, a first
in a proposed Capital Budget.
RENEWAL PROFILE FUNDING ALLOCATION COMPARED TO IDEAL RIMS ALLOCATION SCENARIO
| Financial and Corporate Services | Financial Strategies & Budget | 04.24.2018|46
● As mentioned, we completed a number of different
scenarios to find the optimal funding levels to support the
reinvestment needs of our infrastructure. Administration
is recommending today what was referred to as Scenario
1 in the CIO, which is a reduction to 91% of the
recommended ideal investment as allocated by RIMS for
assets funded with MSI and PAYG. Taking into account
constrained funding, unconstrained, and previous
commitments, the graph shown in this slide depicts the
percentage of funding levels relative to the ideal, that
Administration is recommending for the program areas.
● You will note there are disproportionate deficits in funding
for technology equipment, transit, police, and library
● renewal. The deficits in those categories are due to the
reduction to 91%, as well as a recalculation of the RIMS
allocation due to better data becoming available after the
CIO was produced for police and transit, indicated by the
grey area. Further to that, in the transit program a further
reduction was applied, indicated in green, to compensate
for the increase in transit renewal spending in the
2015-2018 Capital cycle due to the PTIF program.
Edmonton Public Library elected to not use a portion of
the RIMS allocation of MSI and PAYG as they have other
dedicated sources of funding. With respect to Technology
Equipment, the top down RIMS approach was modified to
one where the proposed investment in technology
renewal was built project by project. The RIMS allocation
model is not as easily applicable to technology assets as
the rapid advancement of technology requires a unique
investment approach.
● As can be seen, assets that have dedicated, constrained
funding are proposed to receive their full allocation, as
indicated in yellow on this graph. The bridge renewal
program was also funded to the full RIMS allocation as this
category was deemed of the highest priority relative to the
others.
PROGRAM MANAGEMENT
| Financial and Corporate Services | Financial Strategies & Budget | 04.24.2018|
• Asset Renewal is managed as a program to maximize value to the City
• Renewal activities are prioritized and then optimized to build a full renewal program for the fiscal cycle
• The program is continually reviewed and adjusted to accommodate emerging priorities (cost, schedule, scope) while retaining the parameters of the program allocation.
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● The last graph I would like to draw your attention to is the
dollar breakdown of the recommended allocation per
program area. Similar to the previous graph, which
displayed the percentage of the program which would be
funded, this graph provides a clear picture of the relative
dollar values assigned to program areas.
● That concludes our presentation of the renewal program,
Mr. McNabb will now walk Council through the next steps
of the Capital Budget process.
CAPITAL BUDGET NEXT STEPS
| Financial and Corporate Services | Financial Strategies & Budget | 10.23.2018|
• Councillors’ written questions - Nov 1• Administration responses to written questions - Nov 9 • Non-statutory public hearing - Nov 15• Presentations from Civic Agencies - Nov 28• Council Deliberations - Nov 28-30 / Dec 3-7,12,14
Operating Budget - Released Nov 1 and presented Nov 7
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Looking forward to next steps in the Capital Budget process after today:
● Councillor written questions on the proposed 2019-2022 capital budget are due to the Office of the City Clerk by 4 pm on Nov 1
● Administration will then provide responses to the written questions by 4 pm on Nov 9.
● On Nov 15 there will be a non-statutory public hearing to allow the public to present and provide input on the proposed 2019-2022 Capital and Operating budgets
● Civic agency presentations on both the Capital and Operating budgets will occur on Nov 28
● After which Council will begin deliberations
And with that I will return the presentation back to Ms. Cochrane for closing remarks.
CITY BUILDING
| Financial and Corporate Services | Financial Strategies & Budget | 10.23.2018|25
CLOSING REMARKS - CITY MANAGER
We’ve just bombarded you with a lot of detail.
But allow me to remind you of the City-building story. As this
slide shows, each one of our Departments plays a critical role in
bringing Edmonton to life:
● Building on your vision, Urban Form imagines the City we
will become.
● Integrated Infrastructure Services builds that City.
● City Operations maintains your investments and
operates our City infrastructure for the good of all
Edmontonians.
● Citizen Services brings these spaces to life by animating
through programs and services, the spaces and places
● that we have built.
These are the foundations of City building.
Our other Departments and functions are enablers of
successful, integrated and accountable civic stewardship.
● Corporate Strategic Development Branch translates the
hopes and dreams of Edmontonians into a City Plan and
cascading strategies to stay the course.
● Financial and Corporate Services ensures that our
resources are properly deployed today and for the future.
● Employee Services creates the conditions for our 14
thousand staff to be successful as they do the important
work of serving almost a million Edmontonians.
● Communications and Engagement is, in many respects,
the connective tissue across the entire corporation that
tells our story internally to staff and externally to those we
serve.
When all of these components work harmoniously together, we
are truly doing our best work.
This Capital Budget is filled with the roads, bridges, sidewalks,
parks and facilities that build a great city. The Operating Budget
that you will be considering in a few weeks brings our City
structures to life. Together, these Budgets are not just building
a City, they are building a future.
It can be easy to lose sight of these things, so in closing we
wanted to share a short video on what we believe is the Capital
Budget.
And then we’re available to answer any questions you may have
today.
Thank-you.
| Financial and Corporate Services | Financial Strategies & Budget | 10.23.2018|
Questions?
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