Why is Asset Management important?
Municipalities rely on their assets, to help them deliver on their strategic and operations goals. An Asset is something that has current value to an organization and can come in a wide range of forms ranging from roads and bridges, to fire halls and community centres. In the case of Municipalities, Assets must be cared for and managed, to ensure an Administration can make meaningful community improvements.
At a high level, Asset Management is a coordinated effort to maximize value received from an asset. In other words, how can a municipality care for an Asset to ensure that it delivers the most amount of value to a community over its lifetime? In the case of a road, this means providing a traffic-free and smooth ride, while in the case of a water main, this means providing an uninterrupted supply of clean water.
When a Municipality properly administers Asset Management, they will be able to extract the maximum amount of value out of their assets, thus improving the value that they receive from their investments.
Asset Management Objectives
Exact Asset Management goals vary from Municipality to Municipality, because challenges are not uniform across all Municipal Governments. For this reason, Municipalities should be focused on developing their own, unique Asset Management Objectives. Clearly identifying and outlining these objectives are critical for ensuring that all Asset Management activities are aligned towards achieving progress. Common types of objectives include, but are not limited to:
- Customer – to maximize the level of service that municipal constituents receive from Municipal Assets
- Technical – to ensure that assets meet technical standards in terms of safety, the environment, etc.
- Regulatory – to remain compliant with Federal or State/Provincial regulations
Without clear, and concise Asset Management Objectives, a Municipality will not be able to administer a sustainable Asset Management program.
What is an Asset Management Plan?
An Asset Management Plan details how a Municipality plans to achieve its Asset Management Objectives. As discussed, Asset Management Objectives vary from Municipality to Municipality, and therefore so do Asset Management Plans. With that said, most Asset Management Plans are organized around the following four considerations:
- Asset Management Objectives – a clear statement of Asset Management Objectives
- Asset Inventory – what assets does the municipality posses, and where are they?
- State of Inventory – what is the physical condition of these assets?
- Level of Service – what amount of value is required from the assets, with respect to various evaluation criteria?
- Asset Risk – which assets are at risk of failure, and what is the consequence of such failure?
- Resource Requirements – what resources are required to achieve the outlined objectives?
When considering resource requirements, a Municipality should consider how to deploy a broad range of resources including financial, environmental, and personnel. Without proper resource support, no Asset Management Plan can be successful.
Plans are typically in the form of long-form written documents and are built with feedback from various Municipal Stakeholders. It should also be noted that an Asset Management Plan is a living document, and should be continuously updated and maintained, to keep up with the ever-changing objectives in a Municipality.