Ontario's civic building inventory scrutinized for asset condition

Civic building inventory lags on capital repair

Ontario monitoring body examines condition of municipal infrastructure assets
Friday, August 20, 2021

Ontario’s civic building inventory has fallen the farthest behind on capital repair and renewal among seven categories of municipal infrastructure assets scrutinized in a newly released report from the Financial Accountability Office of Ontario (FAO). The analysis, which is part of the FAO’s efforts to identify vulnerabilities to climate change hazards, concludes that about 55 per cent of total municipal infrastructure is in a state of good repair, but fewer than 42 per cent of the assets in the “other buildings and facilities” category merit that rating.

That encompasses a varied roster of social housing, government administrative buildings, cultural/recreational/sports venues and solid waste handling facilities, with a current replacement value (CRV) pegged at nearly $75 billion. These assets represents about 15 per cent of the total value of locally held infrastructure throughout the province. Additionally, many large buildings such as transit terminals, water and wastewater treatment plants are itemized in other infrastructure asset categories.

The FAO estimates the current replacement value of all of Ontario’s municipal infrastructure at approximately $484 billion. Roads represent the largest share at that tally, at $130 billion or 27 per cent of CRV, followed by wastewater infrastructure (20 per cent) and potable water infrastructure (17 per cent). Transit accounts for the smallest portion — 2 per cent — of infrastructure value. However, nearly 30 per cent or $1.8 billion worth of assets in this category are identified as “building-type” structures, including commuter stations, route-side shelters, garages and other maintenance/storage depots.

Within the buildings/facilities category, approximately 122,770 social housing units are valued at more than $23 billion. Administrative headquarters and cultural/recreational/sports venues each carry a CRV of more than $19 billion, with the remaining assortment of buildings for justice, health, social services or solid waste management purposes estimated at $13 billion.

Reflective of broad-based municipal responsibilities, building/facility assets include 1,332 community centres, 813 libraries, 382 museums and archives, 76 galleries, 184 materials recovery facilities, 129 composting facilities and 18 anaerobic digestion facilities. Meanwhile, illustrative of the ongoing challenge to manage solid waste and resultant greenhouse gas emissions, Ontario municipalities currently own 242 dump sites, 181 active engineered landfills and 625 inactive engineered landfills and dumps, which are also tallied in this category.

Inconsistent data complicates interpretation

Province-wide, the FAO concludes there is a $52-billion backlog of required spending, based on 2020 costs for bringing assets to a state of good repair. That presumption is drawn from multiple sources: municipally supplied data and/or local asset management plans (AMPs) where available; Statistics Canada’s Canadian Core Public Infrastructure (CCPI) survey; the Ontario Ministry of Municipal Affairs’ Financial Information Return (FIR); and the Ontario Ministry of Infrastructure’s Municipal Asset Inventory. FAO researchers then derived their own scale to support more consistent interpretation. Notably, too, no condition data was available for more than $47 billion worth of infrastructure assets, or roughly 10 per cent of the total CRV.

“There is a considerable degree of uncertainty associated with the reported condition data. In some cases, reported condition data was based on engineering site inspections, while in other cases the data may be imputed based on the asset’s age or may simply reflect the municipality’s judgement in the absence of a site inspection. Additional uncertainty comes from the standards by which condition is assessed across municipalities. For example, an asset assessed to be in ‘Good’ condition in one municipality might be assessed as ‘Fair’ based on another municipality’s framework,” the report acknowledges. “To account for this uncertainty, the FAO defined a broader boundary for the condition of each asset. For instance, an asset reported as ‘Good’ could take on a condition from ‘Very Good’ to ‘Fair’. Based on this approach, the FAO developed a range of condition estimates.”

The report also reminds municipal officials that they now have less than 11 months to meet the first reporting deadline in a 2017 Provincial regulation, which mandates them to prepare publicly available asset management plans that report the condition of their current infrastructure assets, projects future needs and sets out a strategy for capital upkeep. These are to be filed by July 2022 for core assets related to water, wastewater, storm water, roads and bridges/culverts , and by July 2024 for non-core assets, which include other buildings/facilities.

Generally, the FAO analysis found that potable water, wastewater and storm water infrastructure is in the best condition, with more than two-thirds of assets in the three categories classified in good state of repair. After the civic building inventory, roads are the in next worst shape on a percentage basis with more than 56 per cent considered in an inadequate state of repair.

On a dollar basis, roads account for 41 per cent of the spending backlog, requiring an estimated $21.1 billion of capital investment to achieve a full state of good repair. Buildings/facilities are estimated to need a $9.5-billion capital injection, equating to 18 per cent of the spending backlog.

Backlog-to-CRV ratio a telling metric

Roads and buildings/facilities also emerge notoriously when viewed in terms of the ratio of required repair costs to the current replacement value of the assets in the infrastructure category. The average ratio across all assets in all categories is 11.9 per cent, while the ratio is 17.2 per cent for roads and 13.5 per cent for buildings/facilities.

“The backlog-to-CRV ratio indicates the relative state of disrepair of assets. The higher the share, the worse condition assets are in,” the FAO report explains.

Interestingly, too, while transit and bridges/culverts contribute relatively modestly to the overall spending backlog — with 2 per cent and 8 per cent quotients respectively — their backlog-to-CRV ratios are much more pronounced at 11.3 and 11 per cent. Potable water infrastructure has the lowest backlog-to-CRV ratio at 7.3 per cent, with ratios for wastewater (8.8) and storm water (9.8) on the next rungs up.

Regionally, the Greater Toronto Area boasts both the highest percentage of assets deemed to be in a good state of repair (62.3 per cent) and the lowest ratio of repair backlog to CRV (9 per cent). Ottawa has the most catching up to do with just 38.7 per cent of infrastructure assets considered in good repair, while the collection of counties making up the neighbouring Kingston-Pembroke region registers the highest backlog-to-CRV ratio at 19.7 per cent.

“Keeping assets in a state of good repair helps to maximize the benefits of public infrastructure, and ensures assets are delivering their intended services in a condition that is considered acceptable from both an engineering and a cost management perspective,” the FAO report advises. “Maintaining public infrastructure in a state of good repair is generally the most cost-effective strategy over an asset’s life cycle but is not the only consideration for asset managers with multiple budgetary priorities. However, further postponing repairs raises the risk of service disruption and increases the costs associated with municipal infrastructure over time.”

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