Belleville Asset Management Contribution

Background

Ontario Regulation 588/17 Asset Management Planning for Municipal Infrastructure was introduced on December 27, 2017 and will require the City to significantly increase its efforts and governance surrounding asset management. On June 27, 2019 the City passed the Strategic Asset Management Policy as required under the first phase of O.Reg 588/17. The policy not only provides a consistent framework for implementing asset management throughout the organization, but it provides transparency, accountability and demonstrates to stakeholders the legitimacy of decision-making processes which combine strategic plans, budgets, service levels and risks.

In June 2022, Council approved the 2020 City of Belleville Comprehensive Citywide Asset Management Plan, which was updated from the 2014 version to meet the new O.Reg 588/17 standards. At that time the Replacement Value of the City’s infrastructure had grown to $2.3 billion, representing a $1.2 billion, or nearly 100%, increase since 2014.

Over the years it has become very apparent that Municipalities have significant infrastructure gaps, and the successful delivery of their
services is deeply tied to proper asset management.

A critical component of capital funding is the Asset Management contribution from the Operating budget. These contributions are added to the Asset Management Reserve funds maintained by the City, and moving forward will provide the majority of the funding for the City’s Capital Budget. This is consistent with the approach utilized in User funded areas.

Funding requirements

The Belleville Asset Management Plan (2020) outlines the contributions required (2020-2029):

2024 contribution

For 2024 the proposed contribution to capital (inclusive of Police) amounts to $12,627,300 as outlined below:

As shown, to fund the shortfall over the period 2024-2029, an annual contribution of $22.4 million is required. To reach that optimal level immediately in 2024, this would mean adding $11.3 million to the Operating Budget, which represents a municipal tax levy increase of 9.61%. To mitigate the tax impact, the following contribution schedule is recommended:

It is critical to maintaining existing service levels that these contributions continue to increase annually as outlined above. These contributions will be reviewed and updated annually in conjunction with asset management plan updates, and all future increases will require council approval.