Asset Management Definitions

Asset Management 

Asset management is a practice that includes planning processes, approaches, plans, or related documents that support an integrated lifecycle approach to the effective stewardship of infrastructure assets to maximize benefits and effectively manage risk (AMO/Municipal Funding Agreement). It is a strategic approach to proactively manage and efficiently invest in infrastructure to meet pre-defined levels of service. Asset management is best practice for local governments seeking to manage community expectations, limit risk, and make cost-effective decisions with a long-term vision. 

Asset Management Plan

An asset management plan (AMP) is a publicly available strategic document used as a tool to communicate to the community and other levels of governments the municipality’s current state of infrastructure, potential risks to services, current and proposed levels of service, and anticipated funding needs. In Ontario, municipalities are expected to align their AMP with Ontario Regulation 588/17: Asset Management Planning for Municipal Infrastructure (O. Reg. 588/17). 

Asset management software solutions

Asset management software solutions include a variety of tools that support data collection and management, long-term budgeting, and proactive risk and lifecycle management strategies for assets. Software solutions can include: 

  • Asset inventories to store critical asset data such as quantity and measurements, in-service-dates and age, expected useful life, condition, etc.
  • Geographic information system (GIS) to identify asset location and support the coordination of maintenance and renewal/replacement activities.
  • Computerized maintenance management system (CMMS) to support work order management.
  • Asset maintenance tools to support lifecycle and risk modeling. 
  • Budgeting tools to enable long-term financial planning and developing budget scenarios.

Climate adaptation

In the context of asset management, climate adaptation refers to a variety of measures taken to reduce the impacts of climate change on the community, with a focus on municipal infrastructure and services. Examples of climate adaptation measures can include increasing the capacity of the storm management systems, constructing climate resilient roads, and creating shade protection in parks by planting trees or adding additional shade structures and shelters. 

Climate mitigation

In the context of asset management, climate mitigation refers to actions taken to reduce greenhouse has (GHG) emissions. Examples of climate mitigation measures can include, adopting renewable energy sources for buildings, upgrading to LED lighting, and purchasing electric vehicles and machinery. 

Current replacement value

Current replacement value (CRV) refers to the total cost (in today’s dollars) to replace all assets owned by the municipality. The replacement cost may be determined by inflating historical cost (the original cost paid upon acquisition) or it may be determined by user-defined costs based on current market value. The CRV represents a snapshot in time, it does not reflect future needs related to climate adaptation, growth, and inflation.

The average annual capital requirement (AACR) represents the average amount per year that the municipality should allocate towards funding rehabilitation and replacement needs based on current or proposed levels of service. The AACR does not always include considerations for inflation and growth or other factors such as climate change and green infrastructure (as defined in O. Reg. 588/17). 

Green infrastructure

Green infrastructure can include natural and human-made elements that provide ecological and hydrological functions and processes (Ontario Provincial Policy Statement). Green infrastructure can be divided into three different classes:

  • Natural assets, which can include wetlands, forests, parks, meadows, lands and gardens, soil.
  • Enhanced assets, which can include rain gardens, green roofs and walls, biosawales, urban trees, urban parks, naturalized stormwater ponds.
  • Engineered assets, which can include permeable pavement, rain barrels, cisterns, perforated pipes, infiltration trenches.

Resilience

In the context of asset management, resilience refers to the capacity of individuals, communities, institutions, businesses, and systems to survive, adapt, and grow no matter what kinds of chronic stresses and acute shocks they experience. Within the context of climate change, resilience refers to how the environment impacts us.

Sustainability

In the context of asset management, sustainability refers to the ability to meet the economic, environmental, and social needs of the present without compromising the needs of future generations. Within the context of climate change, sustainability refers to how we impact the environment.