Perth South updates asset management plan to reduce long-term infrastructure funding gap

By Galen Simmons

The Township of Perth South has adopted an updated asset management plan that charts a more sustainable path for maintaining roads, bridges, buildings and other municipal infrastructure over the next decade while significantly reducing its long-term infrastructure funding gap.

Council approved the 2025 Asset Management Plan following a presentation from Andrew Mirabella, associate partner with Hemson Consulting, at its July 7 meeting. The provincially required plan evaluates the township’s infrastructure, its current condition, desired service levels and the investment needed to maintain those assets over time.

“Part of that requirement is to ensure when grant opportunities do come along, the municipality has an asset management plan demonstrating the requirement for the infrastructure and the needs,” Mirabella told council. “You use that to support your applications.

“Aside from the grant side of things, this is obviously a fiscally prudent document to understand how municipalities manage their infrastructure, the quantum of the infrastructure they own, the conditions and so on.”

Rather than aiming to replace every asset at the end of its expected lifespan, the updated plan uses a lifecycle approach that prioritizes maintenance, rehabilitation and replacement based on the level of service residents expect.

According to Mirabella, Perth South owns approximately $401.3 million worth of municipal assets, including roads, bridges, buildings, vehicles, water systems and equipment. Nearly 34 per cent of those assets are rated in good or very good condition, 25 per cent in fair condition and 41 per cent in poor or very poor condition. Roads, buildings, vehicles and machinery account for most of the infrastructure requiring attention.

“We do have a lot of assets that are in very poor condition and are overdue by virtue of design life,” Mirabella said. “So, you will see in those instances and your condition for vehicles, for example, the current average condition is poor. The intention over the next 10 years is to address some of that backlog and bring up our overall weighted condition. And that increase is built into the financial strategy.

“Similarly on the machinery and equipment, there are a number of assets that are overdue, the intention being to improve that and decrease the number of assets that are overdue and improve the overall condition of your equipment.”

The lifecycle approach to addressing the infrastructure funding gap proposed in the plan focuses on extending the useful life of municipal infrastructure through regular maintenance and rehabilitation before full replacement becomes necessary. The plan also considers expansion projects, operational improvements and, where appropriate, non-infrastructure solutions to help manage costs while maintaining service levels.

Using a traditional benchmark approach, the township would need to spend about $93.3 million on tax-supported infrastructure over the next 10 years, compared to projected funding of $41.3 million, leaving a funding gap of roughly $52 million. Closing that gap would require an estimated 19.6 per-cent increase to the municipal tax levy over the decade – equating to a nearly $945,000 increase to the levy annually.

However, by adopting proposed levels of service that emphasize lifecycle management and strategic investment, the township’s projected infrastructure need falls to approximately $51.1 million over the same period. With projected funding remaining at $41.3 million, the funding gap is reduced to about $9.8 million. According to the presentation, closing that remaining gap would require an estimated 3.7 per cent tax levy increase over the 10-year period – a roughly $178,000 annual increase to the levy – rather than a nearly 20 per-cent levy increase under the benchmark scenario.

The proposed service levels generally maintain current standards for roads, bridges, culverts, buildings and other municipal assets, while identifying targeted improvements for areas such as vehicles and machinery and equipment where replacement backlogs currently exist.

The plan also outlines several strategies to further reduce the remaining funding gap, including continued investment in infrastructure, seeking funding from senior levels of government, improving asset data quality, refining service-level measures, assessing the township’s tolerance for infrastructure risk and continuing to coordinate capital projects.

“What you’ve presented here is exactly the same as is being presented to every municipality in Ontario; none of them have enough money unless we raise taxes 25 per cent a year forever,” Coun. Jim Van Nes said. “What’s the solution?”

“That’s why there’s the second option we put in here where the tax levy isn’t impacted as drastic, right?” Mirabella responded. “This is about trying, as a municipality, to put yourselves on a path forward to recognize that we are slowly addressing the infrastructure needs. We know a municipality your size, or an even bigger municipality, can’t address all the needs today or even in the next five to 10 years. But if we try to think about the investment strategy in line with the levels of service, which I think was a great provincial direction there; if we look at it more from how we want to see our service levels and where we want to go and manage our finances toward that, that’s what that second strategy does and at least we can continue those levels of service and where we are relative to that, and then we can kind of pivot accordingly.

“But it’s still going to require investments from the province, and this is still relying on posted funding for the next five years. If the province does pull the plug on some of those grant monies, that’s going to put a bigger hole in your investment strategy. So, part of this is to continue to say to the province, ‘We’re trying to do our part, but we do, very much, need continued assistance in order to carry out these needs.’ ”

Council ultimately approved the updated asset management plan, which will guide future infrastructure investment decisions and help the township maintain municipal assets while managing long-term financial sustainability.