City of Portland Asset Status and Conditions Report Decem ber 2006 Acknowledgements City Asset Managers Group Virgil Adderley, Environmental Services Aaron Beck, Management & Finance/Business Operations Patricia Bugas-Schramm, Transportation/Maintenance Bureau Bob Glascock, Planning (convener) Nancy Gronowski, Parks Louise Lauman, Portland Development Commission Jeff Leighton, Water Rodney O’Dell, Management & Finance/Accounting Thanh Xuan Nguyen, Management & Finance/Technology Services Casey Short and Bob Tomlinson, Management & Finance/Financial Management Portland Planning & Development Directors Gil Kelley, Bureau of Planning, Chair Susan Anderson, Office of Sustainable Development Rosie Sizer, Police Bureau Ken Rust, Office of Management and Finance Sue Keil, Portland Department of Transportation Dean Marriott, Bureau of Environmental Services Zari Santner, Parks & Recreation Paul Scarlett, Bureau of Development Services David Shaff, Water Bureau Dave Sprando, Portland Fire and Rescue Bruce Warner, Portland Development Commission Will White, Bureau of Housing and Community Development For more information on this report, please contact: Bob Glascock Portland Bureau of Planning 1900 SW 4th Avenue, Suite 4100 Portland, OR 97201 Phone: 503.823.7845 Fax: 503.823.7800 TDD: 503.823.6868 E-mail: bglascock@ci.portland.or.us Table of Contents Executive Summary 1 Introduction 3 I. Purpose of the Report 6 II. Improvements from Earlier Reports 6 III. Policy Drivers 6 IV. 2006 Findings 7 V. Recommendations 8 VI. Appendices 10 1. Interim Asset Management Definitions 2. Current Replacement Values of City Assets 3. Current Condition of Bureau Assets, by Confidence Level a. Transportation b. Environmental Services c. Water d. Parks e. Civic f. Affordable Housing 4. Annual Funding Gap Chart 5. Current Confidence Levels—Summary 6. Data Sheets a. Current Replacement Value b. Current Conditions c. Projected Conditions d. Annual Funding Gap 7. Bureau Observations a. Transportation b. Environmental Services c. Parks d. Water e. OMF/Fire/Police f. Portland Development Commission/Housing and Community Development Asset Status and Conditions Report – December 2006 City of Portland Asset Status and Conditions Report—December 2006 Executive Summary This is the fourth year of reporting on the status and condition of the City's physical infrastructure. In 2005, the City changed from focusing on a single condition of assets (deteriorating infrastructure) to a more holistic asset management approach. This approach seeks to ensure that the City’s assets are adequate to provide desired levels of service. This report describes the status of built improvements. Land/plants, rights-of-way, and human resources are excluded. The City’s infrastructure bureaus1 have partnered to collect and analyze data for the report, using internationally recognized asset management (AM) principles and practices to enable informed decisions that best meet customer needs. The City Asset Managers Group (the Group) is developing a coordinated Citywide AM program for all City assets, using a common approach, while allowing each bureau to strategically employ AM for their particular asset groups. This report supports City Council’s move toward that ‘whole-of-city’ decision- making, using readily available information. Starting with this year’s report, affordable housing is added as an asset category. For purposes of this report, affordable housing is defined as multi-family rental housing units with direct City investment (leveraged financing) and a regulatory agreement with the Portland Development Commission. This represents 9,000 housing units. The report includes current replacement value, current and projected physical condition, and annual funding gaps. Each bureau identifies their confidence in the information presented. In some cases, information is not yet available, or more time is needed for detailed data collection and analysis. Future reports will include information on desired levels of service and stakeholder needs. General Findings 1. A funding gap exists, both annually and one-time, between available funding and need. 2. Some of our assets will keep deteriorating at current funding levels. 3. Our assets are valued at $18.9 billion. This report includes, for the first time, affordable housing assets, currently valued at $1.4 billion. 4. Operations and maintenance costs are not always accounted for in proposed capital projects. 5. Bureaus are phasing in AM practices, addressing different needs. 6. Bureaus are working cooperatively to coordinate asset management methods and practices. 1 Participating bureaus include the Bureau of Environmental Services (BES), the Office of Management & Finance (OMF) for City-owned buildings, Portland Parks and Recreation, Portland Development Commission (PDC), Portland Office of Transportation (PDOT) and the Water Bureau. The Bureau of Planning organizes the group’s meetings and reporting. OMF budget and finance staff attend to ensure overall coordination with City Council priorities and budgeting. December 2006 Directors’ Draft -- 1/19/07 Page 1 of 40 Asset Status and Conditions Report – December 2006 Recommendations In January 2006, the Planning and Development Directors endorsed seven recommendations for citywide asset management practices (#1-7 below). Those recommendations appeared in last year’s report. In June 2006, the Planning and Development Directors discussed three of those recommendations—whole-of-city approach, existing service levels, and affordable housing. In November 2006, the City Asset Managers Group identified a new recommendation (#8 below). An update of these recommendations follows: 1. Continue with ‘whole-of-city’ approach (supported by Planning and Development Directors)—two parts: ƒ bureaus working together, consistent data ƒ impact on public and tax base 2. Continue annual asset reports, and improvements. 3. Make the annual asset report available to the Community Visioning team and Citywide Strategic Plan staff. 4. Review service levels—identify options and costs. 5. Pursue community consultation (linked to Community Visioning)—to select service levels. 6. Prepare strategies to match revenues with planned service levels (in Citywide Strategic Plan). 7. Keep reporting on affordable housing in future citywide asset reports (first reported with this report). 8. Track regional discussions on public finance system for infrastructure (Metro New Look process). December 2006 Directors’ Draft -- 1/19/07 Page 2 of 40 Asset Status and Conditions Report – December 2006 Introduction This fourth report on the status and condition of the City's physical infrastructure takes a holistic approach to ensure that the City’s assets are adequate to provide desired levels of service. A wide range of asset categories is tracked over the lifecycle of assets (new, operation, maintenance, and renewal). Background In 2003, asset managers from the City’s infrastructure bureaus formed a City Capital Maintenance Committee to collaborate on asset management issues and prepare an annual report on the City’s physical assets. Their reports to City Council in 2003 and 2004 focused on the current and projected condition of infrastructure, not on the strategies needed to manage assets over their whole life. Efforts to describe assets and needs varied from bureau to bureau as did confidence in the information. This made it difficult for City Council to make decisions using that information. In 2005, this committee became the City Asset Managers Group, adopting a more holistic approach to asset management and looking for ways to collaborate on common asset management issues. While Transportation had an existing program of asset management, other bureaus were just beginning to adopt asset management principles and techniques. By joining forces, the Group identified common long-term asset management needs and helped frame asset management throughout the City using a consistent approach. The City Asset Managers Group met throughout 2006 to share best practices and to produce this City of Portland Asset and Conditions Status Report—December 2006. In January 2006, the Planning and Development Directors endorsed seven recommendations on citywide asset management. The recommendations appeared in last year’s citywide assets report. The updated recommendations sort into current/ongoing and future efforts. The original recommendation number appears in ( )s below: Current and ongoing efforts (2007, 2008) From 2005 ƒ Use ‘whole-of-city’ approach (#1)—two parts: o Bureaus working together, consistent data o Impact on public and tax base ƒ Added affordable housing, starting with this 2006 asset report (#7) ƒ Continue annual asset reports (#2) ƒ Share the annual asset reports with the Community Visioning team (#3) From 2006 ƒ Define service levels; identify options and costs ƒ Apply triple bottom line approach to decision-making process and reporting (where possible) ƒ Clarify annual funding gap, consistent across asset groups and over the years Efforts for 2009 and beyond ƒ Define alternative service levels—identify options and costs (#4) ƒ Pursue community consultation (linked to Community Visioning)—to select service levels (#5) December 2006 Directors’ Draft -- 1/19/07 Page 3 of 40 Asset Status and Conditions Report – December 2006 ƒ Prepare strategies to match revenues with planned service levels (in Citywide Strategic Plan) (#6) ƒ Track Metro on financing infrastructure Progress on the immediate recommendations follows: ƒ ‘Whole-of-city’ approach. In the short-term, the City Asset Managers Group has focused on sharing information (on managing assets). In June 2006, the City Asset Managers Group briefed the Planning and Development Directors on bureau initiatives in asset management. Initiatives were sorted into three performance measures (processes and practices, data management, and organizational). The Directors group responded that it wants to clarify high-level, citywide asset management goals, such as: o improving confidence in asset management data on service delivery o giving City Council a sense of priorities/directions on how to invest (multi- year) o some uniformity of approach (across bureaus) ƒ Annual asset reports. This report continues that process. The scope of future reports will reflect progress on the recommendations (including direction from the future Citywide Strategic Plan). ƒ Make the annual asset report available to the Community Visioning team and Citywide Strategic Plan staff. The visionPDX team has the 2005 report, and this 2006 report will be shared with the Citywide Strategic Plan staff. The Citywide Strategic Plan will frame the vision’s implementation. ƒ Affordable housing in the 2006 asset report. This report adds affordable housing to the annual assets reports. The focus is multi-family rental housing units with direct City investment (leveraged financing) and a regulatory agreement with the Portland Development Commission. The Directors chose not to report on public housing units owned and operated by the Housing Authority or “federal preservation” properties owned and operated privately under regulatory agreements with HUD. Staff from PDC and BHCD worked together, and convened an advisory committee, to provide affordable housing data that fits the key measures of these annual assets reports. More details on affordable housing are found in Appendix 7 of this report. The City Asset Managers Group has followed discussions at Metro on infrastructure and finance needs. The staff group now proposes to track regional discussions on public finance system for infrastructure (in Metro New Look process). Goal and Objectives of Asset Management The goal of strategic asset management is to develop a sustainable asset base that responds to social, economic, and environmental needs. It focuses on how the asset provides an appropriate level of service. Asset Management informs: ƒ asset acquisition; ƒ maintenance and operations; ƒ renewal and adaptation; and ƒ asset disposal. December 2006 Directors’ Draft -- 1/19/07 Page 4 of 40 Asset Status and Conditions Report – December 2006 Applying AM principles and practices will: ƒ reduce dependence on assets (for example, disconnecting downspouts); ƒ support the efficient delivery of services with assets that are cost-effective, well maintained, accessible, energy efficient and safe; ƒ improve the ability to make sound business and planning decisions at all levels; ƒ promote effective use of resources; ƒ improve bureau support and accountability; ƒ develop a culture of service throughout the City; and ƒ improve and coordinate City asset management planning across bureaus. Asset management activities will differ for each asset type based on maintenance management techniques, scheduling and priorities of activities, failure modes, treatment options, renewal strategies, equipment and practices, and renewal techniques. However, a whole-of-city approach ensures that the most innovative and cost-effective techniques are employed as each bureau’s practice improves. Using this cross-bureau effort will continually improve performance-based information that is available to citizens, bureaus, and city leaders as they make choices in the types and levels of service desired. A prerequisite for sound asset management is relevant, reliable, and timely information about asset resources. As much as possible, information provided in this report is comparable across bureaus and asset groups, and the confidence levels for the information were assigned using a common scale. Common elements for managing assets include: ƒ information systems that provide data on asset inventories and their condition; ƒ good documentation of life cycle costs, and optimum renewal strategies that ensure the lowest life cycle cost; ƒ a needs assessment to evaluate current practices, asset risks, and opportunities; ƒ links between service outcomes, bureau programs, asset management plans, and performance measures; ƒ community engagement to better define desired and affordable levels of service; and ƒ clear assignment of roles and responsibilities to guide asset management efforts. In December 2006, the Group’s progress and tentative findings were reported to the Planning and Development Directors The Planning and Development Directors endorsed the Group’s work. As asset management improves across the bureaus, so will the ability of City Council, bureau managers, and citizens to make informed decisions about asset-related services. December 2006 Directors’ Draft -- 1/19/07 Page 5 of 40 Asset Status and Conditions Report – December 2006 I. Purpose of the Report This report seeks to provide coordinated, integrated, fact-based information about the City of Portland’s physical assets that will enhance a ‘whole-of-city’ approach to asset management (AM). It provides an accounting of the number of assets, condition, replacement value, current service levels, and cost of unmet needs. Information in the report will assist the City's efforts to ensure infrastructure is in good condition and that operation, maintenance, rehabilitation, and development programs are as efficient and effective as possible. II. Improvements from Earlier Reports This report advances a process started in the FY 2005-06 budget process, to assess the accuracy of data. At the time, City Commissioners asked for better data on the funding gap in capital maintenance. There were questions about the quality and completeness of the data, and doubts about bureaus’ stated funding needs. To address Council’s concerns and to reflect the current state of City asset management, this report now includes: ƒ common definitions for basic asset management terms (see Appendix 1)2; ƒ confidence levels by asset group (see Appendices 3 and 5); ƒ bureau ‘notes’ on the data sheets to provide additional information about the standard data (see Appendix 6); and ƒ bureau observations on their asset management activities (see Appendix 7). The City Asset Managers Group continues to work collaboratively on asset management. Aside from this annual report, the group shares training opportunities and AM literature, and participates in a statewide AM user group. Bureaus have invited one another to attend workshops on advanced asset management. In September 2006, PDOT participated in a national scan of best transportation asset management practices. In December 2006, members were invited to hear results of the Water Bureau’s benchmarking with international best practices. Bureaus participate in the Pacific Northwest Asset Management Users Group, a peer exchange of asset management case studies and training. Participating bureaus are committed to expanding this collaborative effort and making continuous improvements in the City’s AM process. III. Policy Drivers In FY 2001–02, City Council set strategic priorities as part of a Managing for Results exercise. The Council identified the City’s deteriorating physical infrastructure as an immediate strategic priority. The deteriorating infrastructure remains a top Council strategic priority. For the FY 2006–07 budget, full Council named “infrastructure” as a primary Council concern and focus area, and urged bureaus to collaborate and involve stakeholders in the budget process. 2 The definitions and confidence levels draw on several AM sources, including GHD Consultants (used by PDOT and Water Bureau), trained bureau staff, and literature searches. December 2006 Directors’ Draft -- 1/19/07 Page 6 of 40 Asset Status and Conditions Report – December 2006 Other policy drivers (federal, state and City) underscore the importance of the condition of municipal infrastructure in supporting a community’s economic health, active neighborhoods, and environmental stewardship: ƒ State and federal regulations. ƒ Public Facilities Plan—long-range, citywide plan requires major projects list, for use in annual capital budgets. ƒ Portland Comprehensive Plan—preserve infrastructure for future generations. ƒ Municipal bonded debt covenants—BES cites this. ƒ City CIP budget manual—analyze O&M costs/savings in new projects. ƒ U.S. Governmental Accounting Standards Board 34—capitalize costs that extend an asset’s useful life. IV. 2006 Findings This report includes data on three key measures: current replacement value, current and projected physical condition, and annual funding gap. The confidence level in the data is included. In some cases, data is not available or is pending more detailed data collection and analysis. Most of these “not available” responses are for projected condition. 1. Similar to other countries and U.S. cities facing this challenge, asset management is the best immediate way to ensure maximum use of existing assets, understand tradeoffs, and optimize decision-making and investment planning while other initiatives examine shared services. 2. The bureaus are in different phases of applying asset management: ƒ Transportation and Water are integrating stakeholder involvement in choosing affordable levels of service. ƒ Parks, Water, Transportation and PDC have assigned AM roles and responsibilities. ƒ Parks and Water have completed inventories and determined condition for part of their inventories. ƒ Transportation and OMF have completed inventories and initial condition assessments for major asset classes. ƒ This year, Water is looking at capital and base budgets as one process. ƒ BES applies AM practices of asset inventory, condition assessment and maintenance management to the wastewater collection and treatment system, including pump stations. 3. A gap exists between the funding required to maintain the City’s infrastructure in a sustainable way, and existing funding. For 2006 alone, there is a sustainable level investment gap of $84 million for these assets. 4. As a City enterprise, the physical infrastructure has a current replacement value of $18.9 billion, including affordable housing (valued at $1.4 billion). By bureau, the infrastructure value is: PDOT ($7.1 billion); BES ($4.7 billion); Water ($4.2 billion); Parks ($0.8 billion); Civic ($0.8 billion); and Affordable Housing ($1.4 billion). December 2006 Directors’ Draft -- 1/19/07 Page 7 of 40 Asset Status and Conditions Report – December 2006 5. At current funding levels, Portland’s infrastructure will continue to deteriorate. In 10 years, 5 asset groups (from PDOT, Water and Civic) are projected to remain or shift into mostly poor condition. They are traffic signals, the Water Bureau terminal storage, Union Station, the 800 MHz radio system, and IT operations. Transportation pavement, street lights, and curbs shift significantly from good to fair condition. 6. Historically, City bureaus address new capital projects apart from existing system needs. The Water Bureau has begun to integrate capital and operating needs and staff functions. The AM practices will enable bureaus to consider operations, maintenance and new capital needs as program options. 7. The City Budget Guidelines require that bureaus identify ongoing operating and maintenance requirements prior to funding capital projects. 8. Unfunded federal mandates and external funding of capital works drive the expansion of the number and type of physical assets which, although primarily built with leveraged monies, become the long-term obligation of the City to maintain and operate. Typically, there is little or no set-aside for ongoing operating or maintenance funding for these assets prior to their construction. V. Recommendations In January 2006, the Planning and Development Directors endorsed seven recommendations for citywide asset management practices. Those recommendations appeared in last year’s report. In June 2006, the Planning and Development Directors discussed three of those recommendations--whole-of-city approach, existing service levels, and affordable housing. In November 2006, the City Asset Managers Group identified a new recommendation. An update of recommendations follows (# 1 – 7 are last year’s; #8 is from the staff group). 1. Continue with “whole-of-city” approach. The City should use the “whole-of-city” approach to asset management, working across bureaus and systems. This approach will be used for data gathering, analysis, and reporting as well as for the preparation of recommendations on program modifications, funding strategies, and impact analysis. 2. Continue annual reports and improvements. The City Asset Managers Group will continue to produce an annual report on the City’s physical assets and the asset management system used to evaluate them. With this report, affordable housing is added as an asset category. Each year, bureaus work to improve confidence levels in the available data. 3. Make the annual asset report available to the Community Visioning team and Citywide Strategic Plan staff to increase the public’s understanding of the City’s assets and to serve in the development of the future City Strategic Plan. 4. Review service levels. The 2005 and 2006 asset reports assume adopted levels of service, which affects findings of current condition and annual funding gap. The City Asset Managers Group will refine consistent terms and methods for annual funding gap. In future years, the City Asset Managers Group will develop some alternative scenarios December 2006 Directors’ Draft -- 1/19/07 Page 8 of 40 Asset Status and Conditions Report – December 2006 for levels of service as one approach to reducing the funding gap. In addition, the bureaus will develop Operating and Maintenance cost information and alternatives to support decisions about new infrastructure. 5. Pursue community consultation. Setting service levels and/or revising the current service levels can only be done with public involvement. Some infrastructure bureaus discuss service levels in their individual budget plans. Linked to the Community Visioning process, the community can discuss a “whole-of-city” approach to desired service levels and willingness to pay. 6. Prepare strategies. The Planning and Development Directors propose making recommendations to the Council on asset management, service levels and funding reallocation/measures as part of the Citywide Strategic Plan. The recommendations may include strategies to match revenues with planned service levels. 7. Keep reporting on affordable housing. Building on this report, PDC and BHCD should update and improve AM data for future citywide assets reports. 8. Track regional discussions. (New) In October 2006, Metro convened regional leaders to consider a presentation from former Eugene City Manager Mike Gleason. Mr. Gleason used Metro data to estimate a regional $33 billion funding gap in infrastructure needs (new assets, deferred maintenance and future deferred maintenance). Metro expects the regional population to grow by 1 million by 2035. Metro will discuss regional needs for the infrastructure as part of the New Look process, though Metro President David Bragdon reminded that any form of public infrastructure and debt finance system would likely exceed Metro’s present authority. Portland should participate in these regional discussions. December 2006 Directors’ Draft -- 1/19/07 Page 9 of 40 Asset Status and Conditions Report – December 2006 VI. Appendices 1. Interim Asset Management Definitions 2. Current Replacement Values of City Assets 3. Current Condition of Bureau Assets by Confidence Level a. PDOT b. BES c. Water d. Parks e. Civic f. Affordable Housing 4. Annual Funding Gap Chart 5. Confidence Levels by Bureau (for Current Replacement Value, Current Conditions, and Annual Funding Gap) 6. Data Sheets a. Current Replacement Value b. Current Conditions c. Projected Conditions d. Annual Funding Gap 7. Bureau Observations a. Transportation b. Environmental Services c. Parks d. Water e. OMF/Fire/Police f. Portland Development Commission December 2006 Directors’ Draft -- 1/19/07 Page 10 of 40 Asset Status and Conditions Report – December 2006 Appendix 1: Interim Asset Management Definitions Asset: A physical component of infrastructure or a facility which has value and has an expected useful life of more than one year, that would be replaced if destroyed, and is not surplus to needs. Asset Management: The continuous cycle of asset inventory, condition, and performance assessment that has as its goal the cost-effective provision of a desired level of service for physical assets. Investment decisions consider planning, design, construction, maintenance, operation, rehabilitation, and replacing assets on a sustainable basis that considers social, economic, and environmental impacts. Backlog: The sum of deferred activities, such as maintenance, operations, and rehabilitation, needed to achieve the lowest life cycle cost for an asset. Backlog results from lack of money, materials, or staff to perform the needed work. (See Funding Gap.) Capital Expansion: Projects or facilities that create new assets, increase the capacity of existing assets beyond their original design capacity or service potential, or increase the size and service capability of a current service area, including service to newly annexed, undeveloped, or under-served areas. Generally increases the total maintenance requirements because it is increasing the total asset base. Condition Assessment: The method used to quantify the deterioration rate and remaining useful life of an asset. Methods of condition assessment vary by asset classification and range from use of industry estimates for deterioration rates up to documented physical inspection regimens on established cycles that ensure optimum economic life of an asset. Condition Measure /Rating: A means of classification using information from periodic inspections or measurements to indicate the ability of an asset to deliver a particular level of service. Confidence Levels (in data/information): The expression of accuracy and reliability in the areas of information (source and reliability), process (ad hoc or repeatable) and documentation (documented or not documented). December 2006 Directors’ Draft -- 1/19/07 Page 11 of 40 Asset Status and Conditions Report – December 2006 The following chart addresses this information: Inventory completeness Condition assessment method and frequency Process and documentation Resulting confidence level 1 No inventory No assessment method No process No confidence 2 Partial inventory Condition estimate based on manufacturer’s estimate or other reliable source Process not documented Low confidence 3 Inventory complete Condition estimated and certain % tested on regular schedule Process verbally documented Moderate confidence 4 Inventory complete Condition based on visual inspection by qualified personnel on regular schedule Process partially documented High confidence 5 Inventory complete Condition based on inspections and testing by qualified personnel on regular schedule Process well documented Optimal confidence Current Replacement Value (CRV): The CRV is the total cost to replace the entire asset to meet current accepted standards and codes. Funding Gap: The difference between the funding needed to address infrastructure needs of an asset at a defined condition or level of service and the funding that is currently available. The funding gap varies with the funding level and affects the level of service. The funding gap is the amount of money needed to eliminate the backlog and/or maintain the asset to achieve its useful life. Given a certain funding level, the resulting level of service can be forecast; if a certain level of service is desired, the funds needed to achieve it can be estimated. Infrastructure: Consists of assets in two general networks that serve whole communities— transportation modalities (roads, rail, etc.) and utilities. These are necessary municipal or public services, provided by the government or by private companies and defined as long- lived capital assets that normally are stationary in nature and can be preserved for a significant number of years. Examples are streets, bridges, tunnels, drainage systems, water and sewer lines, pump stations and treatment plants, dams, and lighting systems. Beyond transportation and utility networks, Portland includes buildings, green infrastructure, communications, and information technology as necessary infrastructure investments that serve the community. Inventory: A list of assets and their principal components. Level of Service: A defined standard against which the quality and quantity of service can be measured. A level of service can include reliability, responsiveness, environmental acceptability, customer values and cost. December 2006 Directors’ Draft -- 1/19/07 Page 12 of 40 Asset Status and Conditions Report – December 2006 Life Cycle Cost: The sum of all costs throughout the life of an asset, including planning, design, acquisition, construction, operation, maintenance, rehabilitation/renewal and disposal costs. Maintenance: Activities that keep an asset operating as designed or prevent it from deteriorating prematurely, excluding rehabilitation or renewal which may extend asset life. Maintenance can be planned or unplanned. Planned maintenance is: ƒ Preventive – maintenance conducted at regular scheduled intervals based on average statistical/anticipated lifetime. ƒ Condition-based – maintenance based on objective evidence of need from tests, measurements and observations. ƒ Deferred – the shortfall created by postponing prudent but nonessential repairs to save money or materials. Generally, a policy of continuing deferred maintenance results in higher costs when repairs are eventually made, or failure that occurs sooner than if normal maintenance had been performed. Unplanned maintenance is: Reactive or Emergency – corrective actions taken upon failure or obvious threat of failure, usually at a higher cost than planned or preventive maintenance. Operations: The ongoing activities that allow the use of an asset for its intended function. Performance Indicator: A qualitative or quantitative measure used to compare actual performance against a defined standard. Indicators are commonly used to measure cost, performance, or customer satisfaction. Performance Monitoring: The periodic assessments of actual performance compared to specific objectives, targets, or standards. Rehabilitation / Renewal: Maintenance performed on an asset to restore it to its original level of service or capacity and achieve its useful life, which may result in an extension of the asset’s service life. Retirement/Removal: Decommissioning or removal of an asset through disposal, abandonment, demolition, or sale that may involve retiring deteriorated assets and recovering salvage value. Triple Bottom Line: A method to categorize the benefits and impacts an organization can expect from investing in its assets. The benefits are categorized into Social, Economic, and Environmental benefits to ensure a comprehensive evaluation in the decision-making process (measure, manage and report). Useful Life: The period of time over which an asset is expected to deliver efficient service with normal or appropriate maintenance (defined as accepted industry standard or documented local experience). December 2006 Directors’ Draft -- 1/19/07 Page 13 of 40 Asset Status and Conditions Report – December 2006 Appendix 2 December 2006 Directors’ Draft -- 1/19/07 Page 14 of 40 Current Replacement Values of City Assets December 2006 Affordable Housing Parks 01Y'5 toralCRVfor 2006 is S /8.9billion CIVICWaterBESPOOT ~billion ~SUPPORTSTREET LIGHTS ~ TRAFFIC SIGNALS STRUCTURES - - llY8TEM l. $4.7 )billion - $4.2~,.. SUPPORT - ~ ....... / TERMINALSTORAGE SUPPLY WASTEWATER TREATMENT - STREETS .....,.- ....... - $1.4-~",ru_ "'