The majority of Oak Bay’s assets are near the end of their life or need substantial updates. Council is faced with difficult decisions for next spring’s budget discussions.
At Committee of the Whole on Nov. 20 Daniel Horan, Director of Engineering Services for Oak Bay, presented the committee with an abridged summary of the condition of District assets – assets being sewer infrastructure, water infrastructure, storm utility, roads, buildings, parks and recreational facilities.
The update was financially sobering.
Staff recommend that council immediately implement an annual savings plan by moving one per cent of tax revenue into Reserves to cover the upcoming asset renewal costs.
The report and staff recommendation stem from an initiative in Council’s Strategic Plan for 2015-2018 to implement a formal Asset Management Plan that would help develop, maintain and protect Oak Bay’s infrastructure.
To aid in the process, the District hired two consultant groups that specialize in asset management – one to create a high-level overview and assessment of the District’s current asset management practices, and one to assess the condition of the District’s 29 municipal buildings.
Opus International Consultants (Canada) conducted the high-level overview and assessment, and shared their conclusions and recommendations in the 2016 Asset Management Report.
Under financial findings, the report states: “an initial high-level review of the existing asset data indicates that a significant gap may exist between current revenues levels and sustainable funding over the life of the assets for the current level of service.”
The report notes that there is insufficient data available for some assets, but they were able to asses the sewer, water and storm utility assets.
The findings of the report were as follows:
Based on age data, the majority of sewer assets in Oak Bay are in Poor and Fair condition and need to be replaced as soon as possible.
Based on age data, the majority of Oak Bay water assets are in Poor and Fair condition and need to be replaced as soon as possible.
Based on age data, the majority of stormwater assets in Oak Bay are in Poor and Fair condition and need to be replaced as soon as possible.
A Pavement Management Study was completed in 2012, with a refresh done in 2013, for Oak Bay’s paved road network – approximately 105 km of roadway. It was recommended in that report that $2.8M per year should optimally be budgeted for in order to maintain the network properly. It concluded that the road network can’t be maintained at the current funding levels. Without a significant increase in funding, the network will continue to decline and the annual maintenance costs will continue to climb. The current budget for road infrastructure is only $450,000, significantly short of the recommended $2.8M.
The second consultant report, Building Asset Management Plan, was done by Moore Wilson Architects Inc. to assess the condition of Oak Bay’s 29 municipal buildings. The conclusion of that report was that “substantial building deficiencies exist and some critical decisions related to funding for increased upkeep or potential replacement is required now in order to sustain services over the next 20 years.”
In spring of 2017, staff recommended to council a savings program of one per cent of tax revenue to be set aside for asset renewal. Council did not support the recommendation at that time. The Committee of the Whole directed staff to hire a consultant to assist in developing an asset management plan that puts financial and asset information together in a way that allows Council to make evidence-based decisions on assets and funding priorities.
Staff are developing the Request for Proposals and have not yet hired a consultant. The expected timeline is early 2018.
In the meantime, staff recommends that in light of the information already available, Oak Bay council should start the saving process now.
In the Nov. 20 meeting, Coun. Kevin Murdoch acknowledged that funding aging infrastructure is “the single biggest issue that council will have to address in the coming years.”
Staff reported that the one per cent would not fully cover the needed upgrades but that it would be a start. Coun. Michelle Kirby asked if staff could put together something to show the public what one percent would cover, what two per cent would cover etc.
Mayor Nils Jensen discussed options to save, borrow, or use grants to cover the needs and suggested that Oak Bay needs to look at all options. Jensen agreed that putting 1.5 per cent or a higher amount might be necessary when the issue gets to the Estimates (budget) meeting in the spring.
According to the Official Community Plan (OCP), replacement and repair of aging infrastructure was one of the community’s major concerns and priorities expressed in the community survey – highlighting the community’s awareness of the issue.
The committee carried the motion to refer the issue of an immediate annual funding program for building renewal to Estimates.
Follow us on Instagram
Like us on Facebook and follow us on Twitter.