CITY OF VANCOUVER

ADMINISTRATIVE REPORT

 

Date:

December 3, 2004

 

Authors:

Brian Willock/Jody Andrews

 

Phone No.:

(604)873-7315/(604) 873-7280

 

RTS No.:

04586

 

CC File No.:

5768

 

Meeting Date:

December 14, 2004

TO:

Vancouver City Council

FROM:

General Manager of Engineering Services

SUBJECT:

Infrastructure Management Strategy

RECOMMENDATION

CITY MANAGER'S COMMENTS

This is an important corporate project that builds on existing systems and positions the City to meet upcoming legislative requirements for asset valuation and reporting. This is an excellent model for the City of a well planned and integrated corporate initiative. It is a timely and necessary investment in the long range financial planning and sustainment of Vancouver's public works infrastructure and services. Engineering has taken a sound and pragmatic approach to the strategy, and the implementation and funding plans. I recommend approval of Recommendations A, B, and C.

GENERAL MANAGER'S COMMENTS

The Infrastructure Management Strategy is a significant initiative that will enable Engineering Services to improve the way it builds, maintains and replaces Vancouver's public works infrastructure and provides public works services. The strategy improves decision making and long range planning capabilities and enhances our ability to provide customer service, coordinate field work, and minimize negative impacts on the residential and business communities. The implementation of this project is being funded from existing sources and will not impact property taxes.

COUNCIL POLICY

City Council approves new capital expenditures.

Contracts with a value over $300,000 require public tenders and approval of City Council.

PURPOSE

The purpose of this report is to seek City Council's endorsement of the Infrastructure Management Strategy to help achieve excellence in public service delivery and the management of public works assets including water, sewer, sidewalk, streets, transportation, and street lighting infrastructure. The report seeks Council approval of funding from existing sources totalling $5.0 million. This report enables the City to issue a public Request for Proposals to the vendor community for the provision of solutions detailed in the Strategy.

BACKGROUND

Council has consistently demonstrated support for methodical long-term strategies to protect and improve service to the public through public works infrastructure replacement programs and through the development of the City's information systems.

Starting in the early 1970's, and reaffirmed in 1981 and 1991, Council approved a 1% life cycle replacement policy for sewer mains. A similar life cycle replacement policy, as well as system capacity and fire protection considerations, are the basis of the Waterworks Long Range Plan.

In May 1995, Council approved the Better City Government - Next Steps report which refined a strategy to deploy information systems to enhance customer service, improve communications and openness with the community, and to improve staff effectiveness.

In July 1996, Council approved a long-term strategy to provide communications and service to the public through the internet.

In July 1998, Council approved a joint report from Community Services, Corporate Services, and Engineering Services to enhance use of the Geographic Information Systems. VanMAP was first released to staff in September 1999. In February 2001, Council approved extending VanMAP access to the public through the City's website.

In September 2001, Council approved a joint report from Community Services, Corporate Services, and Engineering Services to consolidate public services from the various floors of City Hall by creating the Client Service Centre on the ground floor.

In October 2003, the City's Business Applications Committee (BAC) reviewed the Infrastructure Management Strategy for overall compliance with corporate objectives and integration with corporate systems and, on November 10, 2004 endorsed the project and the funding plan.

On November 25, 2004 the City's Corporate Management Team (CMT) reviewed and endorsed the Infrastructure Management Strategy and the proposed funding plan.

The proposed Infrastructure Management Strategy compliments corporate initiatives including the Geographic Information System (GIS), Property Information Management System (PIMS), permitting and licensing system (Amanda), enterprise resource planning (SAP), proposed City 311 initiative, and workforce and succession planning.

DISCUSSION

THE NEED

Engineering Services spends approximately $180 million in capital and operating funds annually to provide municipal services to the public and to plan, design, operate, maintain, and replace public works infrastructure. The Department is responsible for 1,400 km of roads, 15,000 block faces of sidewalks, 2,000 km of sewer mains, 1,500 km of water mains, 51,000 street lights, 7,500 traffic signals, and collects 58,000 tonnes of garbage and 23,000 tonnes of recyclables each year.

The importance of maintaining the public works infrastructure is illustrated by the number of claims made each year against the City. Engineering receives an average of 510 claims or lawsuits per year related to its infrastructure or work performed on its infrastructure, which is 67% of all claims received by the City. Having well maintained infrastructure and accurate records and inspection programs allows the City to successfully defend claims such as these, and is a key consideration when weighing the value of future investments in this area.

Like much of North America, the City's public works infrastructure is nearing a critical point in maintenance and funding lifecycles. While the City aggressively manages it public works infrastructure, as the City continues to grow and develop so do the demands and expectations placed on public works infrastructure and services. We face the same challenges as other cities to apply limited resources to satisfy increasing public expectations, minimize the risk of critical infrastructure failure, and plan for the long-term financial sustainability of public works infrastructure and services.

The public works infrastructure and the related public services are managed by a Department of 1,800 staff using more than 100 software applications and extensive paper and manual systems. Some of the computer applications still reside on the City's mainframe computer. As the infrastructure ages, so do the people and the systems employed to manage that infrastructure, which puts these systems at risk as people start to retire. Engineering staff and managers recognize the need to change in order to continue to provide taxpayers with the best value, and are helping to drive this change process.

In the summer of 2003, Engineering Services retained a consultant to help articulate and document the department's infrastructure management needs. The resulting strategic plan consolidates existing strategies to improve service delivery in a customer focused, incremental, and integrated way.

The Infrastructure Management Strategy identifies four needs:

Customer Service and Work Management

Engineering Services needs to improve the way many of its customer service calls are handled. Although the staff in our Client Service Call Centre do an excellent job, if a caller does not get the right person on the first call there can often be confusion leading to multiple call transfers and frustration for the customer. Some customers do not get a timely response to their requests. One of the challenges for staff is that current work order systems, dispatch operations, and content-management systems are not well integrated. There is no system in place to systematically process, track, and link service requests to work done in the field. So, when a customer calls a staff person not involved in a particular project, there is no system in place that staff person can refer to for information. Staff rely primarily on experience to find the information requested. In the current environment, it would be difficult for Engineering to meet the objectives of the proposed City 311 initiative.

Furthermore, Engineering does not have the ability to monitor and track service requests on an ongoing basis and perform trend analysis as a means of planning future work and capital investment.

Coordination of Work

Customer service must be linked to how we manage our work in the field, which in turn must be coordinated with third party activities. Existing work management tools and processes are not integrated across the Department and rely on ad-hoc processes to plan, schedule, approve, coordinate, and report field work. Our staff do not have the tools to coordinate all activities on City streets and rights-of-way to minimize impacts to traffic, neighbourhoods, businesses, and the infrastructure itself. For example, growth in the telecommunication industry has introduced stress and degradation to our streets as existing ducts are upgraded and moved and new ducts are installed. Heightened development activity has increased development-related activities on City streets. City staff produce good results, but it requires significant effort and diligence to manage and coordinate the many construction, maintenance, and third party activities that occur on City streets. On those few occasions when things go wrong, the impacts on traffic, neighbourhoods, and businesses can be significant.

Tools to Share Information

There is a pressing need to take steps to strengthen the Department's corporate memory. Like the rest of the City, demographics and turnover statistics indicate that over the next five years, Engineering Services will see up to 40% staff turnover. One of the strengths of the Department is our people, but without strong tools in place we stand to lose a lot of corporate memory when those people leave. Much of the information is stored in the more than 100 software applications and the paper and manual systems throughout the Department. As the staff who created and manage those systems retire, there is a risk that access to our information and our resulting efficiency and effectiveness diminish significantly. This risk can be addressed by eliminating many of these systems and consolidating their data, integrating the remaining systems, and make the date more accessible to more staff.

Performance Measurement

There are pending legislative requirements for valuing and recording assets and the financial liabilities for their replacement. There are outstanding corporate commitments to improve Engineering's reporting tools and methodologies for capital project costing. Engineering has an outstanding need to evaluate infrastructure and work performance over time and improve its forecasting and long range planning. The risks of critical infrastructure failure need to be quantified by recording and looking at factors such as infrastructure age, condition, service levels and effectiveness of operations, maintenance, and replacement practices.

Comparison to Other Cities

Vancouver is not in a unique situation. Other Canadian municipalities face the same challenges and are responding with similar strategies. The City of Calgary (2003 population 922,000) established an infrastructure management program with dedicated resources in 2002 and recently acquired an integrated customer service and work management system. Calgary identifies and tracks specific performance measures such as the elapsed time from when a service request is presented to when a response is satisfactorily completed.

The City of Edmonton (2001 population 666,000) established an Office of Infrastructure that reports annually on the status of the City's assets. It provides overall direction to the asset management program by developing principles and policies to guide stewardship of infrastructure assets. Edmonton has adopted a uniform approach to comparing performance of different infrastructure types to allow senior management and Council to make budget decisions requiring trade-offs across infrastructure types.

Emerging Legislative Requirements

Examples of emerging legislative requirements are the Governmental Accounting Standards Board Statement No. 34 (GASB 34) in the United States and the Municipal Performance Measurement Program (MPMP) in the Province of Ontario. Both require local governments to report annually on infrastructure asset valuation and performance. It is expected that similar legislative requirements are coming for British Columbia. Implementation of the proposed solution will position the City to respond to these requirements.

THE STRATEGY

The Infrastructure Management Strategy includes four initiatives:

Customer Service and Work Management

An integrated customer service and work management system will improve service by allowing staff to systematically process and track service requests and create work orders for action in the field. Work orders will be used to plan, schedule, track, and report on all field work, and will become the primary source of data collection to feed other processes such as payroll, materials management, and project costing. Work orders will also be related back to service requests, capital projects, and maintenance programs. A significant benefit will be that service requests will be monitored and analysed for trends as a means of planning future work and capital investment.

Right-of-Way Management

Work and activities on streets, lanes and other public rights-of-way will be linked to GIS to coordinate construction, maintenance, third party work, and special event activities. This will help optimize resources across the Department and better manage competing and conflicting activities in the field by taking into account local conditions and neighbourhood impacts such as service interruptions and traffic congestion. For example, information about current and future work and special event activities could be made available to staff, the public, and businesses through VanMAP.

Information Repository

A strategy for accessing the Department's information will help coordinate work across all branches of Engineering and across all infrastructure types. It will enable staff to access a wide range of queries and reports for analysis and modelling. It will provide tools to help make better decisions, as well as help capture and organize staff knowledge and local expertise for succession planning.

Performance Measurement

Staff will be given high-level planning and reporting tools to provide feedback on the performance of the City's infrastructure and the effectiveness of long range capital planning. Examples of performance indicators include costs, response time, service interruptions, capacity monitoring, financial liabilities, risks, and infrastructure condition.

Business Case Benefits

The Infrastructure Management Strategy addresses the needs of Engineering Services and positions the City to continue to be among the leading cities in North America in terms of public works infrastructure and services. The benefits will be realized through better decision making and will accrue to the residential and business communities and the corporation itself. The benefits include:

Customer Service Benefits

Performance Benefits

Corporate Benefits

helps meet pending · legislative requirements for asset valuation and quantifying financial liabilities for infrastructure replacement

THE PROCESS FOR MOVING FORWARD

A Steering Committee comprised of the senior managers from Engineering Services, the Director of Corporate Business Support, and the corporate Director of Information Technology provides guidance to the project. A group of stakeholders from across the Department has worked over the past 18 months to document business needs, create the Strategic Plan, and develop a Project Charter that lays out the process for moving forward.

To ensure the Infrastructure Management Strategy is consistent with corporate objectives and priorities and integrates with existing corporate systems, the strategy was reviewed and endorsed by the City's Business Applications Committee (BAC) and the Corporate Management Team (CMT).

The strategy has also been reviewed with CUPE Local 1004, CUPE Local 15, and IBEW Local 216. Our key unions are involved in this project from the ground up. Concerns and input will be addressed as they arise to ensure this project meets everyone's needs.

The staff in the Department are engaged and are pushing for this project to move forward. Our staff recognize the need to stay competitive through better tools and better access to information. A change management consultant was retained early to help harness the energy and ideas and to assist senior managers and staff prepare for the changes ahead. Staff is currently working to craft detailed business requirements for the public Request for Proposal that will be issued to the vendor community in early 2005. The preliminary timeline for the next steps is as follows:

TABLE ONE: PROPOSED IMPLEMENTATION SCHEDULE

Objective

Target Date

issue Request for Proposal

early 2005

evaluate & test proposals

spring/summer 2005

seek Council approval for contract with successful vendor

summer/fall 2005

start phased implementation

fall/winter 2005

Customer Service and Work Management

2005 through 2008

Information Repository

2005 through 2008

Right-of-Way Management

2005 through 2008

Performance Measurement

2006 through 2008

FINANCIAL IMPLICATIONS

This report seeks approval from Council for implementation funding estimated at $5 million. This estimate is based on the consultant's figures in the Strategic Plan and will be refined once the solution has been selected. The sustainment budget, likely in the order of $700,000 per year, is not part of this report and will be prepared once the solution has been selected. Engineering will present a refined implementation budget and seek approval of the sustainment budget from Council when we report back on the award of the tender in spring or summer of 2005.

TABLE TWO: PROPOSED IMPLEMENTATION BUDGET

Component

Estimated Cost

Customer Service

$1,100,000

Work Management

$2,000,000

Information Repository

$1,400,000

Right-of-way Management

$100,000

Performance Measurement

$200,000

Contingency

$200,000

Total

$5,000,000

The implementation funding plan has been developed with two underlying principles:

Council is not being asked to provide new funding to this initiative. All implementation funding is being provided from existing sources. This funding plan has been reviewed and endorsed by the City's Business Application Committee (BAC) and the Corporate Management Team (CMT).

Table Three summarizes the funding sources for the proposed implementation, which are described in more detail below.

TABLE THREE : PROPOSED IMPLEMENTATION FUNDING PLAN

Funding Source

Capital Budget

Utility Rate Stabilization Reserves

2004 Operating Budget

Total Funding

2003 - 2005 Capital Plan

$1,500,000

      

GST savings on Capital

$610,000

      

Investigation Accounts 2003-05

$270,000

      

Water & Sewer Combined Connections

$200,000

      

Sewer Rate Stabilization Reserve

  

$700,000

    

Water Rate Stabilization Reserve

  

$700,000

    

Solid Waste Capital Reserve

  

$520,000

    

Engineering 2004 Operating Budget

   

$500,000

  

Subtotals

$2,580,0001.

$1,920,000

$500,000

$5,000,000

Approximately $1.1 million of the funding is to be provided from the Engineering Capital Budget through re-allocation of existing funding and $0.61 million of savings from the increased GST rebate. A further $1.9 million is to be drawn from the Utility Rate Stabilization Reserves. The adequacy of these reserves is reviewed on an annual basis when user fees are established, and there is currently sufficient funding available for this project. The Engineering Operating budget experience an over-recovery in 2004 and it is proposed to utilize this as a source of funding for the project. Finally, the 2003 - 2005 Capital Plan included $4.0 million for replacement and enhancements to corporate information systems, and it is proposed to utilize $1.5 million of this funding to implement the Infrastructure Management Strategy.

PERSONNEL IMPLICATIONS

Implementation of the Infrastructure Management Strategy is being recommended on the basis of the significant benefits it will yield, and will not be funded through staff reductions. It is anticipated that additional resources will be needed during implementation, which will be funded from the implementation budget and from within existing operating budgets.

There will be a report back to Council to recommend award of the solution and approve the sustainment budget, and will include recommendations for any regular full and part time positions required on an ongoing basis to sustain the project. Details of these positions will become clear once a solution has been selected.

CUPE 15, CUPE 1004, and IBEW 216 have been consulted and will continue to be included and consulted on an ongoing basis.

CONCLUSION

The Infrastructure Management Strategy is a significant and necessary move forward for Engineering Services to be able to continue to build, maintain and replace Vancouver's public works infrastructure and provide public works services. It will result in a solution that gives staff the tools they need to improve decision making, improve customer service, better coordinate work, and minimize negative impacts on the residential and business communities. It has been developed within the corporate and emerging legislative context and will position Engineering to meet its corporate obligations with respect to capital project costing, asset valuation and recording, and risk and liability management. The implementation of the project is being funded from existing sources and will not impact property taxes. Engineering will report back to Council in spring or summer of 2005 with a recommended solution, sustainment budget, and ongoing regular and part time staffing needs.

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