AN INTEGRA TED APPROACH TO CAPITAL BUDGETING: THE CITY OF PRINCE GEORGE by Donald Steven Parent B.Sc., University of Guelph, 2000 PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION UNIVERSITY OF NORTHERN BRITISH COLUMBIA April2011 © Donald Parent, 2011 UNIVERSITY of NORTHERN BRITISH COLUMBIA UBRARY Prince George, B.C. ii Executive Summary The approval of myPG part 1 by the City of Prince George Council is a catalyst for change with respect to a number of City actions, including capital budgeting. The availability of social, environmental and economic goals specific to the community provides an opportunity to align capital decision framework with a revised information structure which separates community from municipal service goals. The separation of community and municipal service goals creates the need for goals specific to the City at an organizational level. I have collaborated with the myPG implementation team to develop four preliminary municipal service goals that leverage existing objective data specific to the City. The revised information structure also provides the opportunity to integrate the core focus areas identified in City Council's three year strategic plan into the capital budget decision framework. Review of the existing capital budget decision framework identified other opportunities to improve the structure and scoring systems. Consolidating the score recording document with the goal document improves the framework structure by increasing the connection between each goal and the score assigned by the user. This reduces the likelihood that the user will assign an arbitrary value to a goal category. A Likert scale was used to improve the previous pass I fail scoring system by allowing the user to communicate the magnitude a project will contribute towards each goal. Unlike community goals and Council's core focus areas; municipal service goals did not exist and were developed for the purpose of this paper. Accordingly, I tested the impact of these goals by evaluating the types of projects selected by each goal category when I D. Parent iii ranked the 2011 capital project list for each goal category independently. The results show that the newly created municipal service goals selected less new asset projects than community and strategic goals. Since new asset projects create long term maintenance and renewal liabilities, the addition of the municipal service goals increase the sustainability of the framework. I have recommended the development of tools to assist operating managers with project development and submission using the same criteria as the capital decision framework. A project development template will make this framework more effective, and will facilitate further development toward quantitative analytical evaluation using net present value and return on investment. D. Parent iv Table of Contents Executive Summary ........................... ...... ...... ..... .... ... ........ ... ...... .... .. ...... .... ..... .......... ii List of Tables .... ..... ....... ........................................ ... ........ .... ......... ............................ vii List of Figures ................................................. ..... ..... .. .... ....... ............... ... ................ viii 1.0 Introduction .......... ............................................................................................ 1 2.0 Existing Capital Budget Framework ......................... .... ............. ....................... 3 2.1 Pre Selection Conditions ............................................................................... 3 2.2 Selection Categories and Criteria ........................... ...................................... 4 3.0 Problem Statement .......................... .. .... ...... ....... ....... ....... .... .... ....... ..... ........... 5 4.0 Literature Review ... .... .............................. .................. ...................................... 6 4.1 Municipal Sustainability Plans, Decision Tools and Checklists ..................... 6 4.1.1 Municipal Sustainability Plans ................................................................ 6 4.1.2 Municipal Capital Budget Decision Tools ............. ................. ................. 8 4.1.3 Municipal Sustainability Checklists for Development. ........... ........ ... .... . 10 4.2 Industry Journals ........................................................................................ 11 4.2.1 Long Range Planning .... .... ....... ......... .. ... ............. .......... ....................... 13 4.2.2 Asset Management ....... ................ ............. ... .......... .... ...... ................... 14 4.2.3 Reporting Requirements ............................................ ...... ....... ............. 16 4.2.4 Indicators .............................................................................................. 18 4.2.5 Relative Weighting ......... ............................................. ..... ... ................. 19 D. Parent v 4.2.6 Selection Process ........................................................... ..... .. .... ....... ... 20 4.2.7 Political Influence ..... ...................... .... .................................................. 22 4.2.8 Impact on Operating Budget ................ .. ............... ....... .... .................... 25 5.0 Methodology .. ............ .... ................. ... ... .... ... ....... .. .... .... ..... .... ... ..................... 26 6.0 Results ........................................................................ .................................. . 26 6.1 Pre Selection Conditions ...... .... ............. ....... .... ... .... ....... ...... .... ............ ....... 26 6.2 Goal Categories ......... .. ...... .. ... .. .................... ......... ... .. ....... ......................... 27 6.2.1 Community Categories, Goals, and Criteria ..... .................................... 28 6.2.2 Municipal Goals and Criteria .... ........................................... .... ... ........ .. 30 6.2.3 Strategic Plan Goals ......................................... ... ................................. 31 6.3 Scoring System .............................. ......... .... ........... ... ... .... .......................... 31 6.4 Proposed Capital Budget Decision Framework ........ .................................. 33 7.0 Testing ................................ .. ... ..................................... ....... ..................... ..... 35 7.1 Expected Results ...... ... ..... ....... ................ ............................. ...... ................ 36 7.2 Limitations ......... ..................................... ............................................... ...... 36 7.3 Results ..... .... .... ........................................................................ ................... 37 8.0 Discussion ..................................................... ............................. ....... .. ........... 40 8.1 Pre-Selection Conditions ............................................................................ 40 8.2 Goals .......................................................................................................... 40 8.2.1 Community Goals ................................ ... ............ ..... .......................... ... 40 D. Parent vi 8.2.2 Municipal Service Goals ....... .............. ..... .. .... ........... ............................ 41 8.2.3 Strategic Plan Goals ..... ......... ......... ................ ...................................... 42 8.3 9.0 Weighting ....... ..... ...... ... ..... ................ ...... ................... ......... ..... ... ... ...... ....... 42 Conclusion and Recommendations ............ .................................................... 43 References ........................... ....... ................................................................... ........ . 45 Appendix A- Existing Framework .............................................................. ............. 48 Appendix B- MyPG Bubble (Venn) Diagram ................................ .................. ..... ... 51 Appendix C - MyPG Goals ............................................................................ .......... 52 Appendix D - Strategic Plan Core Focus Areas ....... .......................................... .... 53 Appendix E- City of Calgary Goals & Targets ...................................... ... ........... .... 56 Appendix F - City of Kelowna ............... .......... ... ..... ........ .. ......... ... ........................... 66 Appendix G - City of Port Coquitlqm Decision Matrix ........ ...................................... 70 Appendix H- City of Nelson Assessment Tool. ...... ....... ........ .................................. 71 Appendix 1- NRC Criteria, Indicators & Metrics ............................ ....... ... ................ 73 Appendix J- 2011 Capital Projects ..... ...... ........ ..................................... ... .... ... ... .... 74 D. Parent vii List of Tables Table 1 - Social Goals ............................................................................................. . 29 Table 2- Environmental Goals ...................................................................... ...... .... 29 Table 3 - Economic Goals ................... ..................... .. ..... ... ........ ...... .. ...................... 29 Table 4 - Municipal Goals and Criteria .................. ... ... ....... .. ..... .......... ..................... 30 Table 5- Strategic Plan Goals ................................................................................. 31 Table 6- Capital Project Types for the City of Prince George ................... .......... .... 35 D. Parent viii List of Figures Figure 1 - Information Structure ...... ... ............ ............. .... ..................................... ... 28 Figure 2 - Project Types Selected by Community Goals ......................................... 37 Figure 3 - Project Types Selected by Municipal Service Goals .. ... .. .. .. .................... 38 Figure 4- Project Types Selected by Strategic Plan Goals .. ........ .... ....................... 38 Figure 5 - New Asset Projects Selected by each Goal Category .. ........ .......... .. ...... 39 D. Parent 1 1.0 Introduction Municipalities play an important role in communities across Canada by providing services through infrastructure. In recent years there has been increased awareness among decision makers and the public regarding the sustainability of infrastructure in our communities. Capital spending on new infrastructure creates maintenance and renewal liabilities that span many decades throughout the assets service life. Incorporating sustainability principals in capital budgeting is an effective approach to ensuring the sustainability of infrastructure. Like most municipalities, the availability of capital in Prince George must accommodate demands from development through formal long range and master infrastructure planning as well as emergent informal ad-hoc negotiating to service new development (Nunn, 1996). At the same time community goals have now joined the Prince George Council's strategic plan in the influence over capital spending. Municipalities faced with diverse competing priorities and goals create the need for a capital budget guidance framework to optimize the effectiveness of capital spending toward community, municipal service, and strategic goals. Senior management is responsible for the prioritization of capital projects for Council's consideration. While political influence and emergent demands for infrastructure by developers play a major role in the prioritization of capital projects, a rational method of project evaluation allows senior management to consider the impact each project will have toward a desired outcome. The desired outcome includes both community goals and municipal service goals. Community goals D. Parent 2 represent a community vision while municipal service and strategic plan goals reflect a strategic organizational vision that is specific to the City of Prince George. The myPG Sustainability Plan 1 was produced through a community engagement program to develop a long term vision for the City of Prince George. The myPG public engagement produced the long term social, environmental and economic goals of the community. Integration of these community specific goals into the evaluation criteria which defines the desired outcome in allocating capital is an important part of the implementation of myPG. The existing capital budget decision framework has significant overlap between community goals and municipal service goals. The utilization of myPG goals creates the need for goals specific to the City at an organizational level, as shown in figure 1 (page 28). Working with the myPG implementation team I have developed four municipal service goals using measures and tools available to the organization. The revised information structure facilitates the inclusion of strategic goals into the framework. Included in this paper is a review of the existing framework structure and scoring system. The existing scoring system does not allow the user to express the degree in which they feel capital projects contribute toward goals. A traditional 5 point Likert scale was utilized to increase the ability of the framework to measure the magnitude of the contribution a project will have towards each goal. Using the framework I have created, I evaluated the 2011 capital projects and compared the types of projects selected by each goal category. The results of this 1 City of Prince George, myPG , 2010 D. Parent 3 comparison show that the newly created municipal service goals recommended less New Asset projects than community and strategic plan goals. 2.0 Existing Capital Budget Framework The capital budgeting framework currently utilized by the City of Prince George is a "suggested scoring system for Capital Expenditure Plan projects to assist in ranking of items for Council's consideration" (see Appendix A). The current framework includes pre selection conditions which give priority to required projects and selection categories and criteria developed by senior management to evaluate project benefits: 2.1 • Pre selection conditions • Selection categories and criteria Pre Selection Conditions Projects that fall into the following categories are considered necessary, and are placed at the top of the funding priority list: 1) Mandated by senior government legislation 2) Subject to a court order 3) Required by City bylaw 4) Constitutes a fulfillment of a Council approved obligation 5) Contains significant 3rd party or senior government funding D. Parent 4 2.2 Selection Categories and Criteria The selection categories originated from the preliminary myPG bubble (Venn) diagram which was the starting point of the myPG public engagement process (see Appendix B). The bubble diagram shows the current information structure which has significant overlap between community and municipal service goals. The current information structure was used to create the following categories in the framework: 1. Economic Development and Diversification 2. Environmental Stewardship 3. Social Development Strategy 4. Land use planning 5. Transportation, Civic Facilities and Infrastructure 6. Corporate Support and Financial System Management Selection categories 1 through 4 each represent one area on the Venn diagram while selection categories 5 and 6 each represent two areas on the Venn diagram . Transportation is consolidated with Civic Facilities and Infrastructure, and Corporate Support is consolidated with Financial System Management. Each category in the framework has 9 criteria. Projects are scored by assigning 1 point for contributing or 0 points for not contributing to each of the 9 criteria within the 6 categories. The project score is used to rank all projects that are not pre selected for consideration in the capital budget. D. Parent - - - - - - - - - - - - - - ------- 5 The existing framework includes environmental, social, economic and three municipal service categories , significant overlap exists between the criteria used in community and municipal service criteria. 3.0 Problem Statement The myPG Sustainability Plan 2 was produced through a community engagement program to develop a long term vision for the City of Prince George. Approved by City Council in June of 2010, it is intended to provide direction to the City, partner organizations and community members to achieve the vision created by the community. Part 1 of the myPG plan presents 19 Social, Environmental, and Economic goals (see Appendix C). Now that the myPG public engagement is complete, it is necessary to revise the framework to represent the community goals provided by myPG as part of the implementation process. The existing framework has significant overlap between community and municipal service goals. With the replacement of community goals, the existing municipal service goals must be reviewed and revised to establish goals specific to the City of Prince George as an organization . The existing framework does not include the core focus areas identified in the 3 year strategic plan approved by City Council in December of 2009 (see Appendix D). Council's strategic plan is important because it represents the way in which Council has decided to achieve a desired outcome and should be included in the framework. 2 City of Prince George, myPG, 2010 D. Parent 6 The existing framework uses a pass or fail scoring system to evaluate whether a project contributes to each goal. This is a problem as the user cannot communicate how strongly they feel the contribution a project has towards each goal. Allowing the user to communicate the magnitude of the contribution increases the resolution in the scoring system . Scoring is recorded on a separate document from goals in the existing framework. This separation increases the likelihood that the user will assign arbitrary values to goal categories, instead of scoring each goal. Improving the implementation of the framework design will increase the consistency and completeness of the evaluation by users. 4.0 Literature Review 4.1 Municipal Sustainability Plans, Decision Tools and Checklists 4.1.1 Municipal Sustainabilitv Plans In 2005 British Columbia became the first province in Canada to sign an agreement with the federal government to transfer gas tax revenues to BC cities and communities. The Gas Tax Agreement details how the funds should be used in the province to support sustainable municipal infrastructure, including the creation of sustainability plans. The Gas Tax Agreement has provided the resources for municipalities across Canada to develop Integrated Community Sustainability Plans for their communities. Indeed, there is an abundance of sustainability plans in the public domain. The focus of this paper is the application of sustainability plans to capital budgeting and an effort was made not to fall into 'the black hole of indicators'. D. Parent 7 Of the numerous sustainability plans reviewed, the City of Calgary's, Imagine Calgary3 , stood out as having the most developed criteria that could be used for capital budget decision making. City of Calgary In June 2006 the City of Calgary approved a long range urban sustainability plan called Imagine Calgary4 . Calgary's 100 year vision is presented in 5 system categories: • Built Environment and infrastructure system • Economic system • Governance system • Natural Environment system • Social system Each system has 100 year goals to achieve the vision. The 28 goals have a total of 114 year targets over 30 years to achieve goals (see Appendix E). Imagine Calgary5 states that "the targets were developed using a wide range of research, expert analysis and collective wisdom of participants in the multidisciplinary working group process". Targets that contribute to the achievement of one goal may support a number of other goals across other systems. Well developed targets offer significant metrics to benchmark and evaluate progress toward goals in framework. 3 City of Calgary, Imagine Calgary, 2006 City of Calgary, Imagine Calgary, 2006 5 City of Calgary, Imagine Calgary, 2006 4 D. Parent 8 4.1.2 Municipal Capital Budget Decision Tools Capital Budgeting decision tools were less common or at least less available than sustainability checklists during the research for this paper. Kelowna, Port Coquitlam and Nelson have a formalized structure for evaluating projects. City of Kelowna In March of 2010 the City of Kelowna approved a Sustainable Infrastructure Policy6 . The policy applies 2 pre selection conditions, and 16 goals identified in their Official Community Plan and strategies in their sustainability action plan (see Appendix F). The policy contains the following pre selection conditions that projects must satisfy to be evaluated : 1) Minimum service level of existing infrastructure must be met first 2) Projects $1 million and greater must be evaluated The 16 goals represent 7 categories of community capital: 6 • Natural (Environmental) Capital • Built Capital (Physical) • Economic Capital • Social Capital • Cultural/ Creative Capital • Financial Capital • Governance and Organizational Capital City of Kelowna , Sustainable Infrastructure Policy, 2010 D. Parent 9 Each of the 16 goals has a 10 year target indicator. Projects are evaluated on how well they contribute to each of the 10 year target indicators for all goals. Each project is scored on a scale from -2 to +2 for all 16 target indicators for a maximum score of 32. The benefit scores for each goal are added and compared with the cost of the project. Quantitative evaluation framework provides a measurement of the benefits that can be compared with the project cost to assist with capital budgeting. City of Port Coquitlam In 2006 the City of Coquitlam implemented a budget decision matrix 7 for both operating and capital budgeting. All budgeting decisions are by departments and initially assessed by the senior management team using a triple bottom line (TBL) matrix. TBL accounting balances economic, social and environmental criteria. Two additional criteria are used , which are alignment with the Corporate Strategic Plan and Risk (see Appendix G). The City of Nelson In December of 2010 the City of Nelson approved a sustainability strategy- Nelson Path to 2040 8 (see Appendix H). The strategy is comprised of three components: 7 8 • 5 Sustainability Principals and associated Directions, • 10 Focus Areas, and • 2040 assessment tool. City of Port Coquitlam, Decision Matrix, 2006 City of Nelson, Nelson Path to 2040, 20 10 D. Parent 10 The 2040 Assessment tool is designed to align financial, policy, strategic planning, and large capital investment decisions with the 2040 sustainability strategies. Projects are scored between -3 and 3 for the projects direct and indirect impact toward each sustainability principal and its related, directions, and objectives. Incremental scoring is defined by: • Strong Impact (-3 or 3)- This initiative will move Nelson significantly 'closer' or 'away' from meeting the related principals, directions, and objectives. Example: the initiative puts Nelson more than 10 years 'ahead' or 'behind' of where we are now. • Moderate Impact (-2 or 2) - This initiative will move Nelson somewhat 'closer' or 'away' from meeting the related principals, directions, and objectives. Example: the initiative puts Nelson more than 5 years 'ahead' or 'behind' of where we are now. • Minor Impact (-1 or 1) - This initiative will move Nelson slightly 'closer' or 'away' from meeting the related principals, directions, and objectives. Example: the initiative puts Nelson more than 1-2 years 'ahead' or 'behind' of where we are now. 4.1.3 Municipal Sustainabilitv Checklists for Development A related application of sustainability plans across Canada is development checklists. Sustainability checklists are used by local government through the development approval process to evaluate how a specific development will contribute to the community goals and vision. Sustainability checklists are the most common application of sustainability plans by local government; however the focus D. Parent 11 of this paper is the application of sustainability plans to capital budget decisions. A number of sustainability checklists were encountered including : • City of Port Coquitlam - Sustainability checklist • Town of Canmore- Sustainability screening report • The District of Saanich - Sustainability statement guidelines for rezoning and development permits 4.2 • The City of Kelowna - Sustainability checklist • Regional District of Okanagan-Similkameen - Sustainability checklist • City of Kamloops - Development checklist • City of Nelson - Sustainability checklist Industry Journals Private corporations have a 'single bottom line' and can easily apply a variety of analytical techniques such as payback, discounted payback, accounting rate of return, internal rate of return, modified internal rate of return , profitability index and net present value (Burns, 1997). Quantification techniques have yet to reconcile to the qualitative influences on the budget process. The major issue is that costs tend to be fairly clear whereas it can be difficult to define the benefits of capital projects in the public sector (Farazmand and Neill, 1996). Neither empirical evidence nor theoretical insights have indicated an optimal way or even a totally non-subjective way for local governments to prioritize capital projects (Millar, 1988). In the private sector, profitability is the key to financial management and success with respect to capital investments. For municipal governments, profitability is not an D. Parent -- - - --- - -- - ----------------------. 12 objective, but holistic capital budgeting techniques using a balanced score card can and will help administrators in evaluating competing priorities and projects (Chan, 2004). Capital budgeting is an essential and important component of the municipal budgeting and planning processes. Traditionally, the literature on capital budgeting has been focused on rational decision-making (Forrester, 1993). However, in the last twenty to thirty years new theories have emerged to reflect the differences in capital demand and approaches to local policy (Nunn, 1990). According to Snyder (1977) and Wiggins (1981 ), alternative capital budgeting proposals should be compared using benefit cost ratios, net present values, and internal rate of return . Such criteria may not be useful or appropriate to governments as it is limited by the fact that the analyses do not reflect the possibilities of failure (McKenna, 1980), an unequal distribution of actuarial benefits over time (Neenan, 1981 ), an understatement of the opportunity cost of capital (Snyder, 1977) and other constraints such as management priorities and legal obligations (Millar, 1988). Historically, the literature and theoretical evidence for capital budgeting has been weak with little empirical evidence (Forrester, 1993). While there has been some longitudinal and crosssectional analyses, the research has been constrained by methodological limitations and small sample sizes (Millar, 1988), as well as measurement inconsistencies (Kamensky, 1984; Pagano, 1984; Huq, Taylor and Whritenour, 1986; Millar, 1988). In addition, the historical research that examined the capital side of local government budgeting and finance focused more on debt finance , underwriters, and insurers rather than on the process of capital budgeting, project prioritization/selection, D. Parent ------ - -- - --- ~-~- - - -- - - - - - - - - - - - --. 13 funding projects from capital reserves, or maintaining assets (more commonly operating budget concerns) (Mullins and Pagano, 2005). The criteria used in most municipalities are often so general and ambiguous that their interpretations by different reviewers create problems that result in highly subjective selection procedures and difficulties in selecting projects (Millar, 1988). These gaps in the research on capital budgeting can hinder local government officials in selecting among diverse and competing capital projects and while studies suggest that the need to prioritize and select capital projects are important aspects of capital budgeting, there is very little clear policy direction on how to do this, suggesting that further guidance is needed in priority-setting. 4.2.1 Long Range Planning Capital budgeting should be important for planners because of the impact that expenditures have on issues such as community and economic developments, environmental planning and the urban form (Elmer, 2005). Capital budgeting can also prove to be a more powerful tool than zoning to implement comprehensive land use plans (Elmer, 2005). The availability of servicing plays an important role in the viability of development of competing areas. Developers determine whether to accept or reject a project based on cost and revenue, which is sensitive to servicing requirements and which can be significant if City infrastructure is not adjacent to the area being considered. The budgetary process is essential to the implementation of public policy and the capital budget is a path for bringing the long-term plans of a municipality into actions (Prakesh , 1969). D. Parent - - - -- -- - - - - - --- - - - - ~--- 14 4.2.2 Asset Management Public facilities are deteriorating faster than they can be replaced and maintenance has been deferred for too long (Pagano, 1984 ). Even with the studies on best infrastructure-management practices, it was not until the Public Sector Accounting Board 's (PSAB) 3150 that municipalities were required to report spending and depreciation of assets. PSAB 3150 plays a significant role in the area of infrastructure renewal as it requires governments to report information on infrastructure depreciation and recommends reporting on asset condition. The renewal of public facilities which has long been a neglected area of study for academics or concern for elected officials has finally come to the forefront (Mullins and Pagano, 2005). Asset or risk management is defined as a set of activities, procedures, methods and systems used to identify, quantify and mitigate undesirable exposure to loss in capital and/or quality of service (Federation Canadian Municipalities, 2006). Asset management has been used by all levels of government to provide the framework for rehabilitation or replacement of infrastructure. Risk is a combination of the probability and the severity of a particular circumstance that negatively impacts the ability of infrastructure assets to meet the objectives of the municipality (Federation Canadian Municipalities, 2006). Sophisticated accounting and budgeting systems that better inform public managers of the cost implications of their decisions is the basis for a structured management approach in managing capital allocations, administering government services and supporting infrastructure assets (Wooldridge, Garvin and Miller, 2001 ). Only after D. Parent 15 more precise inventory and more projections of investment needs can we adequately begin to make informed decisions regarding future expenditures (Huq, et al., 1986; Wooldridge, et al. , 2001 ). The Integrated Infrastructure Assets Management System (IIMS), proposed by Lerner and Wright ( 1997) and Lerner ( 1998), identifies the potential problems on integrating asset management data for decision-making. These problems include the lack of complete data regarding facilities , the difficulty in establishing replacement values for facilities, the establishment of the 'non-financial' value of assets, and the integration with GIS. Lerner (1998) stresses the need for proper data collection, performance modeling, decision analysis, as well as, management reporting. Vanier and Danylo (1998) researched innovative, decision making tools for assisting city engineers and managers to make choices between long-term alternatives related to the maintenance, repair and capital renewal of mixed urban infrastructure assets. Their investigation found a limited number of applications for decisionmaking related to municipal infrastructure, and did not find any comprehensive solution that addressed the current and future needs for investment planning. Integration with corporate legacy systems such as computerized maintenance management systems and GIS is seen as the most challenging problem for using decision-making tools in the area of municipal infrastructure planning . Asset management focuses on the costs of infrastructure but rarely gives equal consideration to revenues and historically asset managers have not been involved with evaluating the life cycle costs of new planned development (Burns, 2011 ). D. Parent 16 However, if the acceptance of new developments was based on whether or not they could demonstrate that their life cycle costs could be off-set by their life cycle revenues it would encourage the design of sustainable developments (Burns, 2011 ). Life cycle costing tools, such as the excel based program produced by CMHC, allow communities to estimate life cycle costs which can be used to compare anticipated costs to revenues, providing an estimate of the long term financial burden, (or surplus), a development will place on the community. 4.2.3 Reporting Requirements Millar (1988) discusses and addresses the inherent difficulties that occur in reducing competing but widely diverse projects to some common denominator for comparison . According to Millar (1988), a significant part of the problem is the lack of assessment criteria and data. Often, central agencies passively accept information provided by the operating departments, because of insufficient staffing resources or unfamiliarity with technical data or aspects of many proposals (Millar, 1988). The availability of data for using assessment criteria is another obstacle for many operating departments that do not have the ability or expertise to generate and analyze sophisticated data systems (Millar, 1988). Without the data, municipalities must begin with crude estimates for criteria assessment. While this information may be considered judgmental, it can assist governments and decision makers in focusing on the most important issues and projects with future improvements in the quality of the data to follow. Qualitative data should be provided but reinforced, where possible, with quantitative data (Millar, 1988). D. Parent 17 According to Am mar, Duncombe and Wright (2001 ), research on capital budgeting shows that while most cities prepare some type of capital improvement plan to be used in developing the capital budget relatively few have either a formal set of criteria for ranking capital projects or a formal process that involves citizens in project selection. As a result, less attention is being paid to the content of the plan, the planning and project selection process, the project management process, and maintenance planning and funding. Thus, project selection often falls to political pressures that do not use formal criteria (Ammar, et al., 2001; Mullins and Pagano, 2005). Ideally, to facilitate a systematic selection process, municipalities need to be more assertive in establishing (prior to beginning the capital budget process) and adhering to requirements for project submissions from various operating departments (Millar, 1988). All capital requests should include clear and detailed supporting documentation, including the estimated benefits of the project and projected life cycle costs (Am mar, et al., 2001 ). Once received, proposals should not only be reviewed for actual assessment but also for accuracy and adequacy of data with deficient proposals being returned for modification, or at least having their weakness noted (Millar, 1988). Project selection should then be based on formal criteria matching framework objectives (Am mar, et al., 2001 ). Performance measures make criteria evaluation meaningful to decision makers. Project development must focus on performance measures that reflect respective value toward criteria, and assess progress (Felio and Potkins, 2000). D. Parent 18 4.2.4 Indicators Indicators allow decision makers to evaluate the current status or progress toward a desired outcome. The following are highlights indicators encountered. The Model Framework set forth by Felio and Lounis (2009) is composed of three building blocks: objectives, assessment criteria and performance indicators. Felio and Potkins (2000) published Canada's guide to sustainable municipal infrastructure and set forth a decision-making framework that presents 6 decision criteria, related goals, and metrics (see Appendix 1). Mosteanu and Semenescu (2009) state that the modeling of social benefits (defined as social and environmental) of public investment projects can be very difficult due to various methodology issues: • The effects of a project can be measured only by specific indicators and the aggregation of the results is not simple. • The social benefit should allow comparison between public investment with different lifetimes • The social benefit should allow comparison of public investment of different types Hence, Mosteanu and Semenescu (2009) introduced a concept of social benefit as an indicator quantifying the satisfaction of a community as a method of valuing the effectiveness of public investments, allowing the positive non-monetary external effects to be taken into account. This methodology is grounds on the monetary D. Parent 19 quantification of all positive effects, allowing aggregation in order to obtain an expression of social benefit (Mosteanu and Semenescu, 2009). However, there are specialists considering that the measurement in monetary terms of the effects of public investments is not accurate and therefore not able to reflect the complexity of the results (Mann and Wustemann , 2008). 4.2.5 Relative Weighting The assignment of weights to the rating systems for each criterion is not a technical matter but a political task reflecting a municipality's values and priorities. Such value judgments are likely to be dynamic and thus, weights should be reviewed regularly (Millar, 1988). The selection of weighting is the purview of the decision maker who must implement their own values and assumptions (Felio and Potkins, 2000). The analytical hierarchy process which involves the assignment of ranking or scoring to qualitative goals of capital projects as well as the financial implications and an asset replacement measure may prove to be an adequate decision-making tool for municipal capital budgets (Mullins and Pagano). The analytical hierarchy process is a methodology that helps management set priorities on capital investment projects. It provides a method of including tangible and intangible, quantitative and qualitative items for decision making (Chan, 2004 ). Developed by Saaty (1980), the analytic hierarchy process is an alternative to rational measurement - the assignment of values. This process uses pair wise comparisons for decision making which in reality is how the human mind conceptualizes and structures a problem. The analytic hierarchy process provides a D. Parent 20 fundamental scale of relative magnitudes expressed in dominance units to represent judgments in the form of paired comparisons. The analytic hierarchy process as a descriptive theory encompasses procedures leading to outcomes as would be ranked by normative theory (Saaty, 1980). The analytic hierarchy process is superior to ad hoc weighting schemes when multiple criteria are involved because the procedure enforces transitivity and improves consistency in responses. It also allows for synthesis of multiple viewpoints on multiple criteria into a unified result (Chan, 2004 ). The use of the analytic hierarchy process does require educating participants in the method, which can be time consuming. 4.2.6 Selection Process In the absence of publicly available information regarding infrastructure conditions, needs, depreciation and use, one's choice of project might be just as good as another (Mullins and Pagano, 2005). In smaller communities when a capital investment project such as a library or a replacement for city hall has been long anticipated and debated extensively in the political arena, very little reporting or analysis may be necessary (Elmer, 2005). The selection process for most municipalities is initiated by the submission of capital requests by operating departments that include project justification, description and costs (Millar, 1988; Ammar, et al., 2001 ). Each operating department should be responsible for generating appropriate and meaningful data for each proposal according to assessment criteria specified by the municipality (Millar, 1988). Prior to D. Parent --~~~~-~~-~~-~--------- 21 submission each proposal should be scored by the submitting operating department to encourage critical thinking regarding their own priorities and proposals (Millar, 1988). Ideally, departments should also look at alternative capital strategies, such as rehabilitation versus replacement options and evaluate the estimated benefits and projected life cycle costs of each project (Millar, 1988; Ammar, et al. , 2001). This information can be helpful in determining the effectiveness of long-run cost (Millar, 1988). One of the most important requirements for an effective selection process is the conception of clearly-defined , pre-specified criteria from which the assessment and subsequent selection of capital projects will be based (Millar, 1988). To select projects, the first level of review is against (either numerically or qualitatively) the criteria that was established at the beginning of the process. Projects with existing funding should also be evaluated (Elmer, 2005). For this purpose, capital projects need to be accompanied by reasonably accurate and realistic data that can be examined (Millar, 1988). Performance measurement has the potential to provide relevant data on what is working well and what is not, and therefore, may support decision on where to direct funding (Frank and D'Souza, 2004). Using measures for allocating funds may be more appropriate for decisions of some levels than others. Behn (2003) argues that using measures to allocate funds between departments can be dangerous and while measures may communicate the level of a department's performance, they cannot by themselves explain the reason for the level of performance and thus cannot dictate whether poor performance should be met with decreased or increased D. Parent 22 funding. Instead, Behn (2003) suggests that measures can be appropriately used to make allocation decisions between programs within individual departments. The purpose of an asset prioritization framework is to evaluate infrastructure alternatives of projects under consideration and to augment the capacity of political decision makers to convert information into knowledge (Felio and Potkins, 2000). Each proposal is given an overall score using its individual criterion scores and the criteria weights making it easier for comparisons among widely diverse proposals from a range of departments (Millar, 1988). 4.2.7 Politicallnfluence The politics of infrastructure play a significant role in growth management initiatives (MacManus, 2004 ). With the condition and demand of infrastructure playing a significant role to voters' quality of life, they evidently command much of our electorate's attention (Mullins and Pagano, 2005). If political debate on budgeting can proceed in a manner which integrates outlays for specific capital projects with annual operations and maintenance requirements, the maintenance deferral problem may be mitigated (Pagano, 1984 ). Extensive citizen participation requires considerable time from government staff that assist citizen groups; however, such participation can make it much easier for financially strapped municipalities to finance and implement much needed improvements to infrastructure (Millar, 1988). The nature of public spending suggests a rational process in which infrastructure projects are analyzed, prioritized, and implemented according to technical engineering and financial objective; however, contemporary decision making is more D. Parent 23 likely to satisfy rather than maximize the decision maker's objective criteria (Lindbloom, 1959; Beulens and van Hood land , 1987). There are several obstacles to the use of systematic procedures. According to Millar (1988) local governments are vulnerable to political and fiscal limitations and create an environment that discourages the use of systematic rational procedures thus leading to deteriorating infrastructures caused by: • Deferred maintenance patterns • Inadequate attention to operating and capital costs • Insufficient data and information on trade-offs Technical data can also be highly political. While it can mediate the effect of strong political views, it can also be distorted to satisfy another thus should only form a part of the basis for political judgments (Millar, 1988). Technical data can also be used to sell projects to the public and media by providing evidence that a capital investment project will result in major reductions in future operating costs or capital expenditures (Millar, 1988). Demand for public capital can be generated formally by capital improvement plans, or informally by developers (Butler and Myers, 1984; Nunn, 1990). While the conditions of each developer-city agreement may differ, each one can influence negotiations with other developers (Butler and Myers, 1984 ). Public managers are often caught between formal and informal approaches to infrastructure investment and while they may still use sequential, systematic planning techniques in approaching capital budgeting, they must also recognize how a comprehensive D. Parent 24 infrastructure plan can be quickly altered by a single development or the persistent negotiating tactics of certain business interests (Nunn, 1990). The frequency of informal negotiating in the provision of public capital facilities and in response to business interests, has often led to bargaining as the strategy of choice for public officials making infrastructure decisions (Fulton, 1989). However, they must also understand the complex dynamics infrastructure construction, how will it be funded and who will benefit from it (Nunn, 1990). Cities with strong administrative policies generally have a more formalized approach to capital improvement plans as they have more provisions for over sizing and cost sharing between the City and developers; while cities with strong political policies tend to be more informal, driven by developers on a 'case by case' basis (Nunn, 1996). The outcomes for capital spending are then quite different between cities with strong administrative policies and those with strong political policies (Nunn, 1996). As a result of these differences, cities with strong administrative policies tend to spend significantly more on water, sewer, and road infrastructure per capita than those with strong political policies (Mullins and Pagano, 2005). Strong political policies will continue to play a significant role in allocations often deferring or ignoring maintenance in favour of more immediate or visible operating concerns despite any reporting or analysis criteria and requirements (Mullins and Pagano, 2005). D. Parent 25 4.2.8 Impact on Operating Budget Prakash (1969) utilized a cost-based approach to budgeting , in which the capital and operating costs are considered elements of one system . His paper focused on the determination of the overall size of municipal budgets and did not deal specifically with the allocation of resources among different projects. His approach was aimed at overcoming some of the major shortcomings in existing capital budgeting practices at the municipal level. Typically, the municipal capital program focuses on capital outlays and rarely considers the long term impact that these projects might have on future operating budgets. As a result, related maintenance and operating costs are often not given enough attention nor are certain capital costs present in the capital budget. For example, projects which are not customarily tax supported, (self liquidating or revenue producing) may be excluded from the capital budget. Most municipalities preparing capital improvement plans have dual budgetary systems. This dual system has been justified because of the long range planning required for capital, however, such systems can also lead to the neglect of regular maintenance (Pagano, 1984). In order to make a link between capital and operating budgets, municipalities with dual budgetary systems need to reassess their definitions of maintenance and establish annual general fund transfers to the capital budget (Pagano, 1984 ). A maintenance fund could ensure that the full cost of a capital facility is incorporated into the budgetary process by requiring annual payments not only for construction purposes but also for upkeep, repair, and maintenance (Pagano, 1984 ). D. Parent 26 In many large municipalities capital spending decisions are often made independent of operating decisions with managers making long-term capital commitments without understanding the repercussions for operations (Bland and Nunn, 1992). As a result, municipal services (most notably those with labour intensive services such as police and fire protection) are affected by past years capital expenditures (Bland and Nunn, 1992). 5.0 Methodology I have reviewed and revised the existing capital budget framework to reflect the current information structure used by the City. The myPG goals and Council's core focus areas were used in the proposed framework. I have worked with the myPG implementation team and used criteria presented by the NRC to develop municipal service goals specific to the City of Prince George. Various options for scoring systems and framework structure were researched using industry journals and sustainability implementation tools used by municipalities across British Columbia. Lastly, I scored and ranked the 2011 capital projects to investigate the impact of the proposed municipal service goals by evaluating the types of projects selected by each goal category independently. 6.0 Results 6.1 Pre Selection Conditions Existing pre selection conditions 1, 2, 3, and 4 represent legal or contractual obligations and pre selection condition 5 represents financial leveraging of municipal investment. While the existing pre selection conditions are required and therefore D. Parent 27 will remain, I considered the addition of a condition similar to Kelowna's sustainable infrastructure policy. Kelowna's sustainable infrastructure policy uses the condition that all minimum service levels must be met before investments in new assets are considered. This pre selection condition would address the challenge of comparing capital expenditure to increase the useful life of existing infrastructure with new assets. However the nature of municipal capital budgeting is both formal and informal (Nunn, 1990). Investment in new assets may be required to accommodate or generate economic growth; therefore, framework should be flexible given the political environment. Ultimately, capital budget framework allows senior management and elected officials to be aware of the impact capital budget decisions have on pre determined desired outcomes. The addition of such a rigid pre selection condition is not appropriate. Therefore, the proposed framework does not alter the existing pre selection conditions. 6.2 Goal Categories The approval of myPG part 1 by City Council is the catalyst for change in a number of City actions, including the capital budget framework. The 19 myPG goals are entirely community specific, allowing a clear differentiation between community, municipal service and strategic plan goals. D. Parent ---- ------ - ~-- --- ---------- -- 28 Figure 1 - Information Structure - Community & Shared CPG Only Set by Council Community goals represent a community vision while municipal service and strategic plan goals reflect a strategic organizational vision that is specific to the City of Prince George. Achievement of organizational goals (municipal service and strategic) should not be at the detriment of another broader community goal. Capital budgeting framework must not only reflect City specific goals but contribute to the broader social, environmental, and economic goals of the community. 6.2.1 Community Categories, Goals, and Criteria Community goals and criteria are shown in tables 1, 2, and 3. These goals were taken directly from myPG part 1 and are entirely community based. D. Parent - --- ---- - - -- --- -- --- - - - - - - - - - - - - - - - - - - - - - 29 Table 1 - Social Goals Goal Affordable, Accessible Housing Clear Identity and Pride Culturally Rich Equitable Community Healthy and Active Safe Community Supportive and Engaged Description Offer accessible, affordable and safe housing for all, and eliminate homelessness Have a clear identity that the community can be proud of, with a strong downtown and connection to its rivers and natural surroundings Have a rich cultural life, with more events, facilities, education, and community involvement in the arts to support economic and social growth People of all backgrounds, ethnicities and income levels can access services that help to meet their needs and improve their quality of life Be a community that encourages and supports health and wellness Create an environment where all citizens feel safe Be a friendly and engaged community with strong social connections Table 2 - Environmental Goals Goal Clean Air Clean Water Green City, Green Practices Green Energy Reduce Carbon Emissions and Adapt to Climate Change Reduce Waste Description Enjoy clean air Protect the water supply and waterways, and reduce consumption Be a green city with healthy habitat and forests, and a strong environmental consciousness, led by government and local organizations that demonstrate sustainable practices Be a leader in green energy Reduce carbon emissions and dependence on fossil fuels, and be prepared for climate change Reduce solid waste production and land-filling Table 3 - Economic Goals Goal Diverse Economy Fiscal Responsibility International Connections Job Diversity and Accessibility Sustainable Business Vibrant Economy Description Have a diverse economy to augment our forestry base, responding well to global trends, and offering a good local return on investment through a focus on local food, service, green energy, and a knowledge-based resource economy connected to the world Carefully budget to ensure effective and responsible resources Have well established international connections and international partners Have many good jobs to suit the diversity and aspirations of people in Prince George, with programs that support developing the skills and knowledge needed to fill them Be a model for northern cities in green and local business, and bioenergy Be a centre for vibrant economic growth in Northern BC, attracting newcomers and business and service choice D. Parent 30 6.2.2 Municipal Goals and Criteria Significant overlap existed between community and municipal service goals in the existing framework. The inclusion of community goals that are entirely community based creates the need for municipal service goals that reflect the sustainability of critical attributes of service provided by the City. While myPG part 1 has provided community goals and City Council has provided strategic plan goals, municipal service goals do not exist. I have worked with the myPG implementation team to develop municipal service goals specific to the City at an organizational level. Municipalities have developed varying complexities of goal indicators. While some municipalities like Whistler have developed hundreds of such indicators, the feedback received by most sustainability managers was that the number of goals should be limited to no more than 5 or 6 to avoid complexity. I have supplemented the 4 preliminary goals developed by the implementation team with criteria presented in the NRC- Canada 's guide to sustainable municipal infrastructure, (Felio and Potkins, 2000; Felio and Lounis, 2009) (see Appendix 1). These municipal service goals and criteria leverage metrics and tools available to the City and are shown in table 4. Table 4 - Municipal Goals and Criteria Goal Efficient and Cost Effective Core Services Sustainable Finance - Use of Funds I Taxation Sustainable InfrastructureStrategic Asset Management Sustainable Planning and Development - Growth Management Criteria Above average service performance and below average cost per capita in BC municipal benchmarking, NQI Excellence Lifecycle costs, return on investment through direct and indirect revenue Renewal and replacement of priority assets based on Risk Management framework Development of new infrastructure consistent with Official Community Plan and Master Infrastructure Plans D. Parent 31 6.2.3 Strategic Plan Goals The existing framework does not include City Council's strategic plan. Council's strategic plan is important because it represents the way in which Council has decided to achieve a desired outcome and should be included in the framework. City Council's 2009 strategic plan highlights core focus areas and priority projects. Since priority projects represent projects that have already been prioritized, the 10 core focus areas were selected for strategic plan criteria and taken directly from Council's strategic plan . The 10 core focus areas are shown in table 5, with the corresponding criteria listed in Appendix D. Table 5 -Strategic Plan Goals Goals Create a Better Downtown Build Stronger Neighborhoods Improve Health and Safety Take care of our Air, Water and Land Resources Strengthen and Diversify our Economy Increase Civic Pride Continue Progressive and Responsible Fiscal Management Create an Inclusive Community Strengthen Intergovernmental Relations Build a Strong and Committed City Team 6.3 Scoring System The myPG program has not developed short term quantitative targets for community goals. Short term quantitative targets for municipal service and strategic plan goals have also not been developed. The absence of measureable quantitative targets and quantification of benefits a project will have toward goals limits the use of quantitative evaluation. A qualitative scoring system is appropriate at this time. D. Parent 32 The nature of the relationship between goals suggests that while a project may have a positive contribution toward one goal, there may be a negative contribution toward another goal. A scoring system similar to Kelowna's Sustainable Infrastructure Policy that would allow a negative contribution to be recorded was considered, as shown below: Which statement best defines the project's contribution toward/away from each goal: o Strong negative contribution (-2) o Negative Contribution (-1) o No Contribution (0) o Positive Contribution ( 1) o Strong Positive Contribution (2) However, this scale requires the user to answer two questions simultaneously. The user must determine if the project contributes positively or negatively and the magnitude of the contribution. Since this would add a variable to how individuals approach the question, a traditional Likert scale is more appropriate. The Likert scale is the most commonly used interval-based multiple-choice style of question used in questionnaires. The format of a 5 point traditional Likert scale is: The project will contribute toward achieving the goal. o Strongly disagree (1) o Tend to disagree (2) o Neither agree nor disagree (3) D. Parent 33 o Tend to agree (4) o Strongly agree (5) The Likert scale removes the variable of an individual answering two questions simultaneously. However, either scale could be used as the numerical spectrum of both scoring systems is identical, and should yield identical prioritization of projects. The replacement of the previous pass (1) or fail (0) scoring system is a substantial improvement in the framework since it allows the user to communicate the magnitude of the contribution . The Likert scale moves the framework closer to quantitative analytical evaluation . 6.4 Proposed Capital Budget Decision Framework My proposed framework is shown on page 34. Scoring previously recorded on a separate document from goal criteria is now recorded on one document. This change is intended to reduce the possibility that users may enter arbitrary scores for goal categories instead of evaluating each goal. D. Parent 34 Suggested scoring system for CEP projects to assist in ranking of items for Council's consideration Project Name: Project Score: % A) Projects that fall into the following categories are considered necessary, and are placed at the top of the list: § Yes I No 1) Mandated by senior government legislation 2) Subject to a court order 3) Required by City bylaw 4) Constitutes a fulfillment of a council approved obligation 5) Contains significant 3'd party or senior government funding B) The project will contribute toward achieving each goal: Strongly Disagree % % % % % % % % Neither Agree or Disagree Tend to Disagree 1 2 Tend to Agree 4 3 Strongly Agree 5 Social Goals Affordable, Accessible Housing Clear Identity and Pride* Culturally Rich* Equitable Community* Healthy and Active* Safe Community* Supportive and Engaged* 100% % % % % % % Environmental Goals Clean Air* Clean Water Green City, Green Practices* Green Energy Reduce Carbon Emissions and Adapt to Climate Change Reduce Waste 100% % % % % % % Economic Goals Diverse Economy* Fiscal Responsibility International Connections Job Diversity and Accessibility Suitable Bussiness Vibrant Economy* 100% % % % % 100% % % % % % % % % % % I I I I I I I I I I I I Municipal Service Goals Provision of Efficient and Cost Effective Core Services Sustainable Finance- Use of Funds, Lifecycle Costs, Taxation Infrastructure - Strategic Asset Management and Risk Planning and Development- OCP I Master Infrastructure Plans Council Strategic Plan Goals Create a Better Downtown Build Stronger Neighbourhoods Improve Health and Safety Take care of our Air, Water, and Land Resources Strengthen and Diversify our Economy Increase Civic Pride Continue Progressive and Responsible Fiscal Management Create an Inclusive Community Strengthen Intergovernmental Relations Build a Strong and Committed Team 100% D. Parent 35 7.0 Testing The municipal service goals I have proposed leverage existing metrics and tools available to the City. These municipal service goals are intended to evaluate the impact of capital budgeting decisions on the sustainability of critical attributes of services provided by the City. I investigated the impact of the addition of these municipal service goals to the framework by evaluating the types of projects selected by each goal category independently. The City of Prince George 2011 capital project list contains 102 projects listed by project types shown in table 6 (see Appendix J). Table 6 -Capital Project Types for the City of Prince George Project Type New Asset Replacement Betterment Maintenance Operating Description An addition to the asset inventory through construction or purchase of a capital asset. Replacement of an asset that has been in use with a new or similar asset. It is the cost of replacing an asset with another that will render the same service. Costs incurred to enhance an asset's service potential including: extending the asset's life beyond its original expected life, reducing operating costs, improving the quality of the assets output, or increases the asset's physical output or capacity. Maintaining the pre-determined service potential of an asset for a given useful life to keep the assets in their usual condition and at their expected operating standard. These expenses are recurring in nature and do not extend the asset's life, reduce operating costs, improve the quality of the output, or increase the output. Projects not tangible asset related (i.e. programs, plans, or studies) I scored and ranked each project based on each of the community, municipal service and strategic plan goal categories independently. Projects were selected based on goal criteria, independent of pre-selection conditions . This allowed a direct comparison of the 28 highest priority projects for each goal category, without the D. Parent 36 constraint of pre-selection conditions. All goals within each category were given equal weighting. Projects selected by each goal category were then sorted by project type. 7.1 Expected Results Strategic plan goals are expected to select the most New Asset projects. Municipal service goals are expected to select the least New Asset projects. 7.2 Limitations Difficulty applying financial analysis to qualitative goals and project information prevented analysis using project costs. Project costs were also excluded from the amount of projects funded , allowing a direct comparison of how many of the top 28 projects are New Asset projects. Further testing would benefit from using project costs to improve scoring precision and the impact of project costs on the number of projects funded. Project selection is undoubtedly effected by the source of funding , which was not considered in this paper. Source of funding is project specific and can be considered in future testing using pre selection condition 5 - contains significant 3 rd party or senior government funding. The metrics used to evaluate a project's contribution toward a goal were qualitative, based solely on project information presented (see Appendix J). Validity of future testing could be improved with more project information related to goals. Scoring was completed entirely by me, using the project and goal information presented. My personal values assumptions and beliefs bias the results . Future D. Parent 37 testing could see community goals evaluated by citizens, strategic goals evaluated by Councilors, and municipal service goals evaluated by senior management. 7.3 Results Project types selected by each category of goals are shown in figures 2, 3, and 4. The number of New Asset projects selected by each goal category are shown in figure 5. Figure 2- Project Types Selected by Community Goals Community Goals 14 .--------------------------------------------- 12 10 8 6 4 2 0 New Asset Betterment Replacement Maintenance Operating D. Parent 38 Figure 3- Project Types Selected by Municipal Service Goals Municipal Service Goals 14 .--------------------------------------------12 +--------------------10 +--------------------- 8 +-------------------6 ---------~ 4 2 0 New Asset Betterment Replacement Maintenance Operating Figure 4 - Project Types Selected by Strategic Plan Goals Strategic Plan Goals 14 ,--------------------------------------------12 10 8 6 4 2 0 New Asset Betterment Replacement Maintenance Operating D. Parent 39 Figure 5 - New Asset Projects Selected by each Goal Category New Assets 14 ~------------------------------------------12 +-------1 10 +--_____, 8 +--6 +--- 4 +--2 +--- 0 +--Community Goals Municipal Service Goals Strategic Plan Goals As expected, municipal service goals selected 4 New Asset projects which is less than the 13 New Asset projects selected by the community and strategic plan goals (see figure 5). Although community and strategic plan goals both selected 13 New Asset projects, community goals selected 4 betterment projects compared with 6 betterment projects selected by the strategic plan goals. Since betterment projects contain both replacement and New Assets components, an argument can be made that strategic plan goals selected slightly more New Asset projects which was the expected outcome. Municipal service goals also generated more betterment, replacement and maintenance projects, and less operating projects than community or strategic plan goals (see figures 2, 3, and 4). D. Parent 40 8.0 Discussion The underlying theme for any myPG policy implementation tool must be to make the end decision better, make the process faster and more transparent, and not be seen as red tape , cause delay and/or confusion. 8.1 Pre-Selection Conditions Early in the development of this paper the appropriateness of pre selection condition 5 - contains significant 3rd party or senior government funding was questioned. Certain projects that otherwise might not be funded do get funded because they will leverage significant funding from federal or provincial governments (Svendsen , 2003). While all 102 projects were evaluated independently of pre-selection conditions, it is clear that the economic development benefits associated with 3rd party funding and senior government funding warrant a pre selection condition. Future work on this issue could compare project benefits with the City's portion of project lifecycle costs. 8.2 Goals 8.2.1 Community Goals Short term targets can be used to measure a project's contribution towards a goal in qualitative terms. Imagine Calgary9 and Kelowna's Sustainable Infrastructure Policy 10 listed specific 10 year targets for each goal. Quantitative target indicators on a shorter time horizon and details of the specific benefits a project will have toward each goal are required to measure project benefits. Refinement of 9 City of Calgary, Imagine Calgary, 2006 °City of Kelowna , Sustainable Infrastructure Policy, 2010 1 D. Parent 41 community goals and the creation of targets are required to move the framework further toward quantitative analytical evaluation. 8.2.2 Municipal Service Goals The City of Prince George is participating in benchmarking initiatives such as the National Quality Institute, NQI, quality of service, costs per capita, and other measures of our performance compared to other municipalities and goals specific to Prince George. The proposed framework compliments existing work by leveraging objective project data in capital decisions. This project has identified the need for these metrics to be part of project development. Use of consistent financial metrics across operating departments is required to assess the financial impact of diverse projects. Return on investment should be calculated using lifecycle costs and revenue projections to determine the long term deficit or surplus a project will yield. The proposed framework provides a scorecard to evaluate financial sustainability. This project has identified the need to develop tools to support the use of consistent financial metrics. The integration of RIVA- Real time Infrastructure Valuation Assessment with capital budgeting activities offers a condition assessment comparison between operating departments. Asset management should also be an integral part of the decision making process both at the strategic corporate level and at the tactical and operational levels (Federation of Canadian Municipalities, 2006). Inclusion of risk and condition assessment in the framework provides a clear picture of existing D. Parent 42 assets allowing capital spending to focus on priorities and allocate funds where they will have the greatest impact. Capital budgeting can also prove to be a more powerful tool than zoning to implement comprehensive land use plans (Elmer, 2005). The proposed framework increases the understanding of long term obligations of fringe development by requiring more information about future costs. This work contributes to the growing understanding of this issue by decision makers. 8.2.3 Strategic Plan Goals Strategic plans should be formulated based on a SWOT analysis - that is based on the strengths, weaknesses , opportunities and threats. The strategic plan should have a clear and focused direction. Ideally, the strategic plan would include metrics and timelines so that the benefits of a project can be measured. The addition of strategic plan goals in the framework provides a catalyst for further development and contributes to the understanding of how these goals will affect capital spending outcomes. 8.3 Weighting The existing framework does not apply any priority between goal categories or goals within each category. Goal category and goal weighting would allow their relative importance to be reflected in the overall project score. The use of weighting would allow decision makers to focus efforts toward specific goals they feel are paramount. Weighting of goal categories and goals within each category are significant components of the framework that remains incomplete. The assignment of category D. Parent 43 weighting is not a technical matter, but a political task reflecting a municipality's values and priorities. Such value judgments are likely to be dynamic, and thus weights should be reviewed regularly (Millar, 1988). The selection of weighting is the purview of the decision maker who must implement their own values and assumptions (Felio and Potkins, 2000). While the assignment of weighting should be determined by decision makers and approved by Council, the analytical hierarchy process (Saaty, 1980) provides a starting point to rank the importance of each category, goal , and criteria . However the complexity of this theory requires education of participants, which can be time consuming (Chan, 2004) and may be seen as 'red tape'. 9.0 Conclusion and Recommendations The proposed framework has addressed the following four weaknesses in the existing framework: • Community and municipal services have been separated • Council's strategic plan goals are included in the framework • The Likert scale allows the magnitude of contribution to be recorded • Scoring is recorded on the same document as goals The results show that the newly created municipal service goals selected less New Asset projects than community and strategic goals. Since New Asset projects create long term maintenance and renewal liabilities, the addition of the municipal service goals increase the sustainability of the framework. D. Parent 44 Project development should be completed by all operating departments using the same criteria as the decision framework. Use of consistent financial and nonfinancial metrics across departments assist senior management in project prioritization. A project development template would focus proposals toward decision framework, facilitating comparison across departments. The template should: • Identify capital, annual operating and renewal costs • Identify tangible and intangible benefits • Provide guidelines for intangibles • Capture assumptions and supporting documentation The development of tools to assist operating managers with project development and submission will not only make the proposed framework more effective, it will also facilitate further development of the framework toward quantitative analytical evaluation using net present value and return on investment. D. Parent 45 References Ammar, S., Duncombe, W. and Wright, R., 2001. Evaluating capital management: a new approach. Public Budgeting and Finance, Winter, pp.47-69. Behn, R., 2003. Why measure performance? Different purposes require difference measures. Public Administration Review, 63(5), pp.586-606. Beulens, M. and van Hooland, B., 1987. The public manager as decisionmaker. In J. Kooiman and K.A. Eliassen (Eds. ), Managing Public Organizations: Lessons from Contemporary European Experience. London , England: Sage Publications. Bland, R. and Nunn, S., 1992. The impact of capital spending on municipal operating budgets. Public Budgeting and Finance, 12(2), pp.32-47. Burns, P., 2011 . The infrastructure deficit. AMQ International: Strategic Asset Management, 3(9), pp.1-8. Burns, R.M . and Walker, J., 1987. Capital budgeting techniques among the Fortune 500: a rationale approach. Managerial Finance, 23(9), pp.3-15. Butler, K.S. and Myers, D., 1984. Boomtime in Austin , Texas: negotiating growth management. Journal of the American Planning Association, 50, pp.447-458. Chan, Y.L., 2004. Use of capital budgeting techniques and an analytic approach to capital investment decisions in Canadian municipal governments. Public Budgeting and Finance, Summer, pp.40-58. Elmer, V., 2005. Capital improvement plans and budgets. Workshop on Curriculum for Graduate Planning Programs: The Nuts and Bolts of Development Finance. Lincoln Institute of Land Policy. Farazmand, A. and Neill, J.P., 1996. Capital decision-making: analysis and judgement. Public Budgeting and Financial Management, 8(3), pp.428-452. Federation of Canadian Municipalities, 2006. Decision making and investment planning. lnfraGuide, pp.1-42. Felio, G.Y. and Lounis, Z., 2009. Model framework for assessment of state, performance, and management of Canada's core public infrastructure. Infrastructure Strategies and Research Inc. NRTSI and National Research Council- NRC, pp .1-38. Felio, G.Y. and Potkins, J.B., 2000. Canada's guide to sustainable municipal infrastructure: decision-making framework. ~ International Conference on Decision Making in Civil and Urban Engineering, Lyon, France, http://nrc.ca/irc/ircpubs. D. Parent 46 Forrester, J.P., 1993. Municipal capital budgeting: an examination. Public Budgeting and Finance, Summer, pp.85-103. Frank, H. and D'Souza, J., 2004. Twelve years into the performance measurement revolution: where we need to go in implementation research. International Journal of Public Administration, 27(8), pp.701-718. Fulton, W. , 1989. The Twilight of Vision. Governing, 2(9), pp.52-59. Huq, A.M., Taylor, G.T., Jr., and Whritenour, R.L., Jr., 1986. Structural deficits and infrastructure investment in the U.S. economy: an emerging policy and management crisis in capital expenditure. International Journal of Public Administration, 8(2), pp.145-169. Kamensky, J.M., 1984. Budgeting of state and local infrastructure: developing a strategy. Public Budgeting and Finance, 4(3), pp.3-17. Lerner, A.C., 1998. Progress toward integrated infrastructure-assets-management systems: GIS and beyond. APWA International Public Works Congress: NRCC/CPWA Seminar Series Innovations in Urban Infrastructure, Los Vegas, Nevada, USA, Available from : Institute for Research in Construction, National Research Council Canada, 1500 Montreal Road, Ottawa, Ontario, Canada K1A OR6, (613) 993-9699. Lerner, A.C. and Wright, J.R., 1997. Developing a comprehensive infrastructure management system. APWA International Public Works Congress: NRCC/CPWA Seminar Series Innovations in Urban Infrastructure, Minneapolis, Minnesota, USA, Available from: Institute for Research in Construction, National Research Council Canada, 1500 Montreal Road , Ottawa, Ontario, Canada K1A OR6, (613) 993-9699. Lindbloom, C., 1959. The science of muddling through . Public Administration Review, 19, pp.79-88. McKenna, C.K., 1980. Quantitative methods for public decision making. New York: McGraw-Hill. MacManus, S.A., 2004. Brick and mortar' politics: how infrastructure decisions defeat incumbents. Public Budgeting and Finance, 24(1 ), pp.96-112. Mann, S. and Wustemann, H., 2008. Multifunctionality and a new focus on externalities. The Journal of Socio-Economics, 37, pp.293-307. Millar, A., 1988. Selecting capital investment projects for local governments. Public Budgeting and Finance, 8(3), pp.63-77. Mosteanu, T. and Semenescu, A., 2009. An alternative methodology of analysing public investments efficiency. Economic Computation and Economic Cybernetics Studies and Research, 49 (1), pp.183-196. D. Parent 47 Mullins, D.R., and Pagano, M.A., 2005. Local budgeting and finance: 25 years of developments. Local Budgeting and Finance, 25, pp.3-45. Neenan, W.B., 1981. Urban Public Economics. Belmont, CA: Wadsorth. Nunn, S., 1990. Budgeting for public capital: reinterpreting traditional views of urban infrastructure provision. Journal of Urban Affairs, 12(4), pp.327-344. Nunn , S., 1996. Urban infrastructure policies and capital spending in city manager and strong mayor cities. American Review of Public Administration, 26 (1 ), pp.93-111. Pagano, M.A., 1984. Notes on capital budgeting. Public Budgeting and Finance, 4(3), pp.31-40. Prakash, V., 1969. A suggested approach to municipal investment planning. Land Economics, 45(3), pp.350-358. Saaty, T.L., 1980. The Analytic Hierarchy Process: Planning, Priority Sessing, Resource Allocation. New York: McGraw-Hill. Snyder, J.C., 1977. Fiscal Management and Planning in Local Government. Lexington, MA: D.C. Heath. Svendsen , K., 2003. Notes on capital budgeting . Anne Arundel County, MD. Vanier, D. and Danylo, N. , 1998. Municipal infrastructure investment planning: managing data. First International Conference on New Information Technologies for Decision Making in Civil Engineering, Montreal, Quebec, http://nparc.cisti-icist.nrc-cnrc.gc.ca/npsi/ctrl?lang=en. Wiggins, C.D. , 1981. A case study in government capital budgeting . Governmental Finance, June, pp .19-22. Wooldridge, S.C., Garvin, M.J., and Miller, J.B., 2001. Effects of accounting and budgeting on capital allocation for infrastructure projects. Journal of Management in Engineering, April, pp.86-94. D. Parent 48 Appendix A - Existing Framework Suggested scoring system for CEP projects to assist in ranking of items for council's consideration. Projects which Call into the following categories are considered necessary. and arc placed at the top of the list: • • • • • Mandated by senior gov't legisl ation Subject to a Court order Required by city by-law Constitutes a 1\.iltillmenl or a council approved obligation Contains significant 3'd party or senior gov't funding All other projects would be scored by assigning one point for each of the criteria satistied by the project within each of the 6 categories. The categories and criteria are as follows : 1. Economic Development & Divet·sification • • • • • • • • • 2. Money invested in private sector is increased Long term jobs are created Wage level ofjobs created is medium to high Spending retained in local economy Ex ported product is created Local expertise is created Consistent with !PG strategies Adds Ill the city's tax base Improves the economic sustainability ol'thc community En\'ironmental Stewardship • • • • • • • Addresses \ovildtire threat to property and public safety Supports the city's community forest agreement Contributes to the programs and /or strategies to improve air quality Contributes towards measurable reduction in GI IG emission (wrporately or community wide). Contributes towards measurable reduction in energy usc (corporately or community wide). Increases public awareness and understanding environmental stewardship to may lead to positive changes in behaviour Will lead to increase in use of' best management practices in riparian or other environmentally sensitive areas Doc#l42499 vl 49 o o Protects, restores or enhances important natural and environmental features that contributes to healthy ecosystems and biological diversity within the city. Improves the environmental sustainability of the city 3. Social Development Strategy • • • • o • o • • Contributes to improved livability and quality oflilc for citizens Contributes to civic and community energy management plans Contributes to improved public safety Contributes to city aJtordable housing plans or options Contributes to city heritage, arts and culture 1ncreases pub! ic awareness and understanding of social capital and will lead to changes in behaviour towards harm reduction. social avvareness Leads to improved health and wellness and life skills Contributes to improved emergency response Improves social sustainability of the city 4. Land Usc Plans • • • • • • • • • Encourages sustainable growth and development within the city Contributes to etkctive transportation systems and encourages multiple fcm11s of transportation Satisfies/consistent with Smart Growth on the Ground objectives. contributes to rejuvenation ofthe downtown Encourages redevelopment. densi1ication and inti!! Protects people and property fl·om natural hazards Provides for a high standard for residential. commercial. industrial and/or institutional form and character Engages citizens and stakeholders in early and ongoing consultation Maintains and enhances farming and local food production Satisties specitic objectives of the OCP and/or a neighbourhood plan 5. Transportation, Civic Facilities an<.l Infrastructure • • • o • Improves public inl'rastructurc. services and facilities: contributes to the creation of high value amenities Contributes to sustainable and active forms of transportation Contributes to improvements to transit system. increased ridership Supports asset management system development Supports coordination of asset management program Doc# I 42499 vI 50 • • • • Prevents failure of asset where risk of failure is medium or high based on lifccycle of asset Prevents failure of asset where criticality of failure is medium or high Consistent with cost elTectivc renewal and/or replacement strategy. supported by RIV A outputs. Maintains an established service level (i.e .. PCMS) 6. Corporate Support and Financial Svstcms Evaluation • • • • • • • • • Project leverages funding from grant programs or developer contributions Project can be funded hom a sustainable reserve fund Project can be funded within the liability limit Evaluation of the certainty factors is done Project has been evaluated on the basis of ROI or NPV Supports corporate tinaneial system for asset tracking and reporting Improves corporate efficiencies through enhanced information technologies Improves service to the public through enhanced intC.mnation technologies Contributes to the tinancial sustainability of the city Each category has nine criteria. The maximum unweightcd score IC.n· any project \Yould be 54 Doc# \42499 vl Official Community Plan Zoning Bylaw Neighbourhood Plans Significant Landowners (CN, BC Rail Properties) Brownfield Development Strategy -- Customer Service Infrastructure and Services Asset Management and Development Plan Infrastructure Investment Strategy Civic Facilities & Infrastructure Land and Resource Management Plans RDFFG Industrial Land Study RDFFG OCP and Zoning Lheidli T'enneh Treaty Settlement Lands LAND USE PLANS __,... .------~ People Technology Procurement Communications & Engage' Quality Practices Strategic Planning Performance Measurement Risk Management Engagement Corporate Support Appendix B - MyPG Bubble (Venn) Diagram Authority Regional Hospital District Business Small & Medium Housing Public Safety Health & Well ness Heritage Arts/ Culture Learning Recreation Civic Participation SOCIAL DEVELOPMENT STRATEGY Education University of Northern British Columbia College of New Caledonia School District #57 - City of Prince George- INTEGRATED COMMUNITY SUSTAINABILITY PLAN Provincial First Nations Regional District of Fraser-Fort George Transportation and Logistics Development Global Prince George Downtown Redeveloment Economic Development Partnerships Spirit of BC DIVERSIFICATION STRATEGY Initiatives Prince George Business Plan Life in Perfect Balance Economic Performance Measurement Infrastructure and Services Transportation Air Quality Strategy Riparian Areas Protection Strategy Aquatic Life Protection Strategy Soil Management Strategy Community Forest Plan Water Supply and Consumption Plan Stormwater Management Plan Wastewater Treatment Plan Climate Change Strategy Sustainable Energy Management Plan Climate Change- Mitigation Climate Change- Adaptation Community Energy System Solid Waste Management Plan Greenspace and Whitespace Financial Planning Revenue Diversification including Enterprise Development -->. (J1 52 Appendix C - MyPG Goals Goals Summary This table lists all of the community goals alphabetically within each sustainability area. The top ten goals as identified by the community are marked with a star ( * * * * * * * * * * 8 *) Goal Description Affordable, Accessible Housing Offer accessible, affordable and safe housing for all, and eliminate homelessness. Clear Identity and Pride Have a clear identity that the community can be proud of, with a strong downtown and connection to its rivers and natural surroundings. Culturally Rich Have a rich cultural life, with more events, facilities, education, and community involvement in the arts to support economic and social growth. Equitable Community People of all backgrounds, ethnicities and income levels can access services that help to meet their needs and improve their quality of life. Healthy and Active Be a community that encourages and supports health and well ness. Safe Community Create an environment where all citizens feel safe. Supportive and Engaged Be a friendly and engaged community with strong social connections. Clean Air Enjoy clean ai r. Clean Water Protect the water supply and waterways, and reduce consumption. Green City, Green Practices Be a green city with healthy habitat and forests, and a strong environmental consciousness, led by government and local organizations that demonstrate sustainable practices. Green Energy Be a leader in green energy. Reduce Carbon Emissions and Adapt to Climate Change Reduce carbon emissions and dependence on fossil fuels, and be prepared for climate change Reduced Waste Reduce solid waste production and landfilling. Diverse Economy Have a diverse economy to augment our forestry base, responding well to changing global trends, and offering a good local return on investment through a focus on local food, service, green energy, and a knowledgebased resource economy connected to the world. Fiscal Responsibility Carefully budget to ensure effective and responsible use of financial resources. International Connections Have well established international connections and international partners. Job Diversity and Accessibility Have many good jobs to suit the diversity and aspirations of people in Prince George, with programs that support developing the skills and knowledge needed to fill them. Sustainable Business Be a model for northern cities in green and local business, and bioenergy. Vibrant Economy Be a centre for vibrant economic growth in Northern BC, attracting newcomers and business and service choice. 53 Appendix D - Strategic Plan Core Focus Areas Core Focus Areas 1. Creating a Better Downtown The City has created the Mayor's Task Force for a Better Downtown to develop strategic recommendations, an action plan, critical partnerships and organizational methods to create a better downtown. The Task Force interim report made recommendations to Council in November 2009. Those recommendations incorporate and are complementary to the Smart Growth on the Ground Concept Plan and the Beyond Homelessness Standing Committee work. A clearly defined action plan with assignment of responsibilities to the City and partner agencies will ensure the plan's success, together with an effective and sufficiently resourced implementation system. 2. Building Stronger Neighbourhoods The strength, resilience and interconnectivity of neighbourhoods define a vibrant city. Strengthening neighbourhoods involves the recognition, celebration and protection of neighbourhood identities. Strong neighbourhoods give people a sense of ownership and responsibility. The myPG project will be used to find new ways for the City to engage with neighbourhoods. We will seek from them, opinions and advice about creating the future they desire and how neighbourhoods can play greater roles in shaping their futures. 3. Improving our Health and Safety The City with its partners, Northern Health, Fraser-Fort George Regional Hospital District and non-governmental organizations, will advocate for progressive and responsive health and wellness resources. The City will also continue to take a leadership role in promoting healthier lifestyles and better health outcomes for our citizens. The City will develop a comprehensive crime reduction strategy in conjunction with the RCMP. Wildfire interface risks will continue to be mitigated through the fuel treatment program and expansion of the Community Forest. The City will continue to develop its flood risk mitigation strategy in conjunction with the Provincial and Federal Governments. 54 4. Taking Care of our Air, Water, and Land Resources Protecting, preserving and improving our air, water and land resources are fundamental to community sustainability. The City will increase its efforts in these areas with a priority focus on air quality improvement. The City will invest in infrastructure and programs to reduce particulate and greenhouse gas emissions, including a District Energy System. The District Energy System will capture waste industrial heat and use renewable biomass fuel. The City will implement a Transportation Demand Management system including promotion of public transit and non-motorized transportation alternatives such as those proposed in the Trails Master Plan. The City will create a Brownfield Redevelopment Strategy to reclaim contaminated land. 5. Strengthening and Diversifying our Economy The City's plan to create a knowledge based resource economy, connected to the world, will be delivered through its economic development corporation, Initiatives Prince George (lPG). The City will also pursue strategic international relationships to further its economic strategy. The City will advocate for investment in critical provincial and national transportation infrastructure and leverage investment in new transportation investments such as the Boundary Road project. The City will evaluate and act on development, taxation and other policy advice arising from the Mayor's Task Force for a Better Downtown. The City will actively promote tourism opportunities through implementation of the major events hosting strategy and a cultural tourism strategy. An investment in Tourism Prince George will facilitate establishment of a Destination Marketing Organization (DMO) through City support of the Additional Hotel Room Tax and redirection of City funding from lPG, to the new DMO. 6. Increasing Civic Pride The City will improve its appearance through strategic investment in projects, programs and policies that enhance civic pride and civic participation. The City will invest in the beautification of public spaces through improved signage and other initiatives to make the City one of the cleanest and most welcoming communities in the country. The City will also develop and enforce policies aimed at establishing high standards of maintenance for private buildings. The City will support and encourage the contributions of volunteer organizations which build and sustain community and neighbourhood pride. 6 I CITY OF PRINCE GEORGE • STRATEGIC PLAN 55 7. Continuing Progressive and Responsible Fiscal Management The City will support effective integrated asset management policies which apply a lifecycle value approach to investment in infrastructure. The lifecycle approach will consider capital cost, operational and maintenance factors, rehabilitation needs and expense, replacement cycle and user rates . We will further evaluate methods to ensure that utility services are fully funded by user fees. The City will establish a new debt management policy, continue to seek ways to improve efficiency and evaluate options for new non-tax revenue generation. We will also develop and implement a comprehensive sustainable finance policy and a sustainable purchasing policy. We will develop new ways to engage citizens in the annual financial plan and budget processes, beginning with the myPG project. 8. Creating an Inclusive Community The City will create a healthy, inclusive and safe environment for all citizens, and continue to develop its Social Development Strategy as part of the myPG project. The City recognizes the responsibility and jurisdiction of senior levels of government within the social and multi-cultural areas. Our intention is not to assume those responsibilities but to collaborate in creative solutions at the community level with other government, advocacy organizations and service delivery providers. The City will enhance access to all types of housing and support the physicat mental and social well-being of all citizens through partnerships. The performing, visual, literary, and cultural arts will continue to be supported. 9. Strengthening Intergovernmental Relations The City will continue to work cooperatively and progressively with its partners in the government, education, health, and business sectors. The City will also continue to strengthen its relationship with the Lheidli T'enneh and other aboriginal organizations. 10. Building a Strong and Committed City Team The City understands that progress on its priorities is made possible by a strong team, with Council and Administration working closely together to achieve the corporate and community goals. The City will develop a strategy for communication, team building and elected official professional development. The City will also develop strategies to address challenges related to recruitment and retention of staft work space and equipment resources, succession planning and staff development. 7 I CITY OF PRINCE GEORGE • STRATEGIC PLAN 56 Appendix E - City of Calgary Goals & Targets 100 - YEAR VISION AND GOALS Built environment and infrastructure system 100-year goals Communications Calgarians are connected to each other and the rest of the world. Our communication systems are reliable and support the engagement of all people, information dissemination, social relationships, entertainment and economic activity. Energy The energy used by Calgarians comes from a diverse portfolio of resources that are renewable, have a low impact on the environment and contribute to the positive development of our society. Calgarians use energy in an efficient and responsible manner. Food Food sources derive from sustainable practices that provide us with a high quality, healthy, affordable and secure supply of food . Goods and services Calgarians access a wide variety of locally produced goods and services and consume these in a responsible manner. We support and consume responsibly produced goods and services from around the world. Housing Calgarians have a choice of housing options that are affordable, accessible and eco-efficient and that support a variety of lifestyles. Housing reflects local environmental conditions and resources and is adaptable over time to reflect changes in technology, climate and demographics. Transportation Calgary is built at a human scale with a transportation system that serves the access and mobility needs of all people through a choice of convenient. comfortable, affordable and efficient transportation modes. The transportation system connects people and goods locally, regionally and globally. Transportation needs are met safely and in a manner supportive of human and ecosystem health. Waste management Calgarians work toward zero waste by using matenals responsibly and minimizing consumption. We reuse, recycle and reduce the materials we consume. Wastes created are safely managed without harm to other species or systems. Economic system 100-year goals Economic well-being Calgary is a city with a vibrant, resilient, environmentally sound and sustainable economy that fosters opportunity for individual economic well -being. Meaningful work Through their work, all Calgarians have the opportunity and working conditions to contribute to their own and their community's economic and social well-being in a personally meaningful way. Sufficient income All Calgarians have sufficient income and other resources to meet their current and future needs and to provide for healthy lives. 2 imagineCALGARY- June 2006 Copyright 0 2006, The City of Calgary. All rights reserved. 57 100-YEAR VISION AND GOALS Governance system 1 00-year goals Access Calgary is a city in which individuals have access to all public information when they need it. They can and do participate in decisions that affect their well-being . Decision-making is an inclusive process in which broad-based support is actively sought and contributes to continual improvement in people's lives. Factors such as language, age, race, culture, gender, sexual orientation, time, finances, ability, knowledge and health are not barriers to public decision-making. Conflict resolution Calgary is a city in which conflicts are resolved peacefully and individuals' rights and responsibilities are accepted. Conflict resolution is seen as an opportunity to improve the fabric of the community- to ensure that all voices are heard in the resolution process. The community and local governments support mutual understanding and respect, harmony and co-operation among all peoples. Equity Calgary maintains and champions each person's right to a sustainable life and a sustainable environment in which to live. Diversity is valued and all voices are considered in the decision-making process. Factors such as language, age, race, culture, gender, sexual orientation. time, finances. ability, knowledge and health are not barriers to publicly provided goods and services. each decision results in the most effective and fair method of achieving mutually beneficial objectives. all decision-making enhances the value. vitality and sustainability of human and natural systems in both the present and future. Self-determination Calgary is a partner in creating and managing a sustainable region. We are empowered and actively engaged in our local community and beyond . The personal and collective freedoms that Calgarians enjoy are balanced by their responsibilities to each other and the world. Opportunities for improving quality of life are numerous and accessible, creating an environment in which Calgarians are able to decide their futures. Natural environment system 100-year goals Air Calgarians value the quality of clean air, recognizing it as the most basic need for survival. Treasuring clear, bright skies, we steward our airshed and responsibly address climate change. economic and social activities protect all living things by ensuring healthy air quality indoors and out. Land and soil Fertile soil is VItal to maintaining life. Calgarians are responsible stewards of land, maintaining the lifesupporting processes integral to healthy, intact ecosystems. We use and share our land wisely and equitably. Plant s and animals Calgary is rich with intact ecosystems. We protect and restore our natural heritage, valuing native biodiversity as the foundation of life. Our built environment is Integrated into and respects the natural environment we inhabit. Water Water is recognized as necessary for life. Calgarians value this precious resource and guarantee equitable access for all living things. We are stewards of water, protecting its quality and maintaining the integrity of the hydrologic cycle. Our water supply system is sufficiently secure, flexible and adaptable to changing conditions and circumstances. imagineCALGA RY - June 2006 Copyright @ 2006, The Cit y of Calgary. All rights reserved . 3 58 100-YEAR VISION AND GOALS Social system 100-year goals Aesthetic enjoyment All aspects of life in Calgary provide opportunities for aesthetic enjoyment. We recognize and protect our natural and built environments for their beauty. Our traditions, values and distinctive characteristics are used to enhance physical and human resources. Opportunities for aesthetic enjoyment are accessible to all. Creative self-expression Creative self-expression is cultivated and nurtured as part of everyone's life. We renew ourselves, using our unique gifts and talents, through creative self-expression. There is a wide range of opportunities for creative expression . Health and wellness Calgary is known for its attention to a healthy lifestyle. We sustain physical, mental and social well-being. In circumstances in which health is compromised, we can easily access knowledge and services. ecological, social and economic interconnectedness is reflected in our support for well-being. Lifelong learning We value opportunities for continuous personal growth and development. We are empowered by learning and, as a result. can make substantial improvements to our own and others' lives. The community is a learning ground for all. Meaning, purpose and connectedness We create individual meaning, purpose and connectedness in our lives for our own benefit and that of others. We respect and embrace the ways in which others choose to create meaning, purpose and connectedness. Peace, safety and security We live in peace. We are safe in our homes and throughout our city. We believe and behave in ways that reflect our respect and consideration for all life forms. We have adequate income and access to resources. We live with each other in unity. Recreation We are continually renewed by participating in activities that refresh our bodies and minds. active lifestyles contribute to our abilities to restore and enhance our senses of personal and community well-being. Relationships We participate in mutually supportive and generous relationships. Interactions are based on mutual respect: with oneself, other persons, other cultures, other beings and the larger whole of which all are a part. These healthy relationships help people understand their human, cultural, historic and natural systems. Self-esteem We are confident and satisfied. We know we are valued and respected. We collectively understand and act upon our inner potential so we can achieve sustainable development. Sense of community We have a sense of belonging, friendship and identity within the context of our groups and neighbourhoods. We honour and celebrate diversity. We act as collective stewards of our values, traditions, institutions and the natural environment. 4 imagineCALGARY- June 2006 Copyright ttl 2006. Th e City o f Calgary. All ~ reserved . 59 TARGETS Built environment and infrastructure system targets Communications T1 By 2036, 75 per cent of Calgarians report that they are informed . T2 By 2036, all Calgarians have easy access to current forms of communications technology and resources. T3 By 2036, Calgarians increase their use of communications technology to support sustainability. T4 By 2036, Calgary increases the number of facilities and spaces that encourage human interaction, and they are widely distributed throughout the city. Energy T1 By 2036, 30 per cent of Calgary's energy derives from low-impact renewable sources. T2 By 2036, all new and retrofitted commun ities, buildings, vehicles, equipment and processes are built to be within five per cent of the highest energy-efficient design available out of all economically competitive products, as measured on a life cycle basis. Food T1 By 2036, Calgarians support local food production . T2 By 2036, Calgary maintains access to reliable and quality food sources. T3 By 2036, 100 per cent of Calgary's food supply derives from sources that practice sustainable food production . T4 By 2010, 100 per cent of Calgarians have access to nutritious foods. Goods and services T1 By 2036, over 50 per cent of Calgary businesses adopt a protocol for sustainable practices and report on it regularly. T2 By 2016, Calgary has a strong and diverse portfolio of locally based businesses. T3 By 2036, all Calgarians consume more responsibly. T4 By 2036, we are developing " complete communities" that, among other aspects, allow people to obtain daily goods and services within a reasonable walking distance from home. TS By 2036, all new commercial buildings are designed to encourage the use of alternative forms of transportation (e.g. walking, cycling and transit). T6 By 2036, all new and retrofitted non-residentia l bui ldings are built to be within five per cent of the highest energy- and water-efficient design available out of all economically competitive products, as measured on a life cycle basis. T7 By 2036, all commercial buildings are accessible to people w ith disabilities. Housing Tl By 2016, we are developing " complete communities" that enable people to meet most of their daily needs within a reasonable walking distance from home. T2 By 2036, all new and retrofitted residential buildings are built to be within five per cent of the highest energy-efficient design available out of all economically competitive products, as measured on a life cycle basis. imagineCALGARY - June 2006 Copyri ght @ 2006. The City of Calgary. All rights reserved . 5 60 TARGETS T3 By 2036, all Calgarians have the option of spending less than 30 per cent of their gross fam ily incomes on housing . T4 By 2036, the Calgary market can meet the housing needs of those below the Low-income Cut-off (LICO). Transportation T1 By 2036, we reduce the annual private vehicle kilometres travelled per capita by 20 per cent. T2 By 2016, we increase the residential population within walking distance (600 metres) of LRT stations and major transit nodes by 100 per cent. T3 By 2016, we increase the number of jobs within walk ing distance (600 metres) of LRT stations and major transit nodes by 35 per cent. T4 By 2036, there is a 50 per cent reduction from 1990 levels in the pollution (greenhouse gases) associated with automobiles . T5 By 2036, we increase peak period transit. walking and cycling and carpool travel to downtown by 50 per cent. 40 per cent and 20 per cent respectively. T6 By 2036, 100 per cent of public transit serv1ces (buses. CTrains and faci lities) are accessible to people with disabilities. T7 By 2036, transit trips per capita increase 40 per cent over 2006 levels. T8 By 2036, the number of on-street bikeways increases by 200 per cent, and the number of pathways by 100 per cent. T9 By 2036, fatal collisions per 100,000 people and injury collisions per 1,000 people decrease by 50 per cent. Waste management T1 By 2036, 85 per cent of the waste generated within Calgary is diverted from landfills. T2 By 2036, 75 per cent of construction industry waste materials are recovered for reuse and/or recycling. T3 By 2036, 85 per cent of waste materials are converted to other useful products. Economic system targets Economic well-being T1 By 2036, research and development intensity, both public and private, increases to five per cent of Calgary's gross domestic product . 6 T2 By 2036, the number of environmentally sustainable and commercially viable va lue-added products and technologies produced in Calgary increases by 100 per cent. T3 By 2036, Calgary's non-oil-related industries grow by 50 per cent. T4 By 2036, Calgary is ranked as the most favourable Canadian city in which to establish businesses that support sustainability practices. T5 By 2036, tourist visitations and expenditures grow by 90 per cent. imagineCALGARY - June 2006 Copyright © 2006, Th e Cit y of calgary. All rights res erved. 61 TARGETS T6 By 2036, alternative ways to measure economic well-being are commonly used to support sustainability principles in decision-making. Meaningful work By 2036, full employment of the labour force (defined as unemployment below five per cent) is sustained. Tl T2 By 2036, the h1gh school graduation rate for individuals up to age 2 1 increases to 95 per cent, and 75 per cent of adults aged 21 to 25 complete a post-secondary or vocational education program. T3 By 2036, 95 per cent of entrants in trades-related programs complete their programs and 98 per cent of graduates are employed in their fields of study w ithin six months of graduation . T4 By 2036, all adult immigrants to Calgary have the opportunity to integrate into the economy through employment or entrepreneurial activity at the same participation or success rate as other Calgarians. T5 By 2036, 85 per cent of employees express a high degree of j ob satisfaction. T6 By 2036, healthy seniors have the opportunity to be engaged in fulfilling work that contnbutes to the economy and/or the community. Sufficient income By 2036, 95 per cent of all people living in Calgary are at or above Statistics Canada's Low-income Cut-off (LICO) rates; there is no child poverty. T1 T2 By 2036, all children of low-income families who are residents of Calgary have the opportunity to complete post-secondary education or appropriate tra ining to enable them to fully participate in the economy. Governance system targets Access By 2016, 80 per cent of Calgarians report that they fee l government activity is open, honest, inclus1ve and responsive. T1 T2 By 2016, Calgary City Council establishes a participatory budgeting process. Conflict resolution By 2036, 100 per cent of non-criminal disputes are resolved by some form of collaborat ive process. T1 T2 By 2036, 80 per cent of non-violent criminal offences are handled in the community in which the victim lives. T3 By 2020, 100 per cent of regulatory offences are enforced by t he responsible governments, rather than through court processes. T4 By 2036, 100 per cent of personal conflicts among students, parents, teachers, administrators, support staff and elected representatives in the educat1on system are resolved through collaborative means. Equity By 2021, the makeup of elected and appointed bodies reflects the diversity of the community. T1 T2 By 2010, all public institutions and organizations implement sustainability principles (e.g. Melbourne Principles) in decision-making and reporting, using tools such as triple bottom line imagineCALGARY- June 2006 Copyright 1!:> 2006, The City of Cal gary. All ri ghts reserved . 7 62 TARGETS T3 By 2020, all public institutions and systems create and implement an urban Aboriginal policy that recognizes the detrimental colon ial history experienced by First Nations, Metis and Inuit people; reduces barriers to public participation and governance; and supports economic, social and polit ical advancement. T4 By 2036, racism and discrimination is dealt w ith by having public and private sector institutions and organizations throughout the city introduce meaningful and effective policies and processes and measurable outcomes. Self-determination T1 By 2036, there is a 75 per cent turnout in municipal elections. T2 By 2036, there is a citizen-to-municipal-politician ratio of 55,000:1. T3 By 2036, The City of Calgary reduces its dependence on property taxes to no more than 25 per cent of revenue. T4 By 2036, all general revenues are based on the principle of progressive taxation . TS By 2036, all publicly provided goods and services are affordable, accessible and priced in accordance with their public benefits. T6 By 2010, The City of Calgary has co-operative, supportive and mutually beneficial working relationsh ips with governments in the region . T7 By 2016, governance is restructured to allow governments to create or reallocate authority so that effective decisions are made at the geographical scale that matches the processes involved . T8 By 2008, beginning with the approval of the 100-year vision, all government decisions protect individual freedoms, ensure that people meet their obligations and improve quality of life. T9 By 2008, and every year thereafter, groups/organizations/government report on how they have considered and adopted the imagineCALGARY targets and strategies that are relevant to them and in wh ich they have been identified as having a role . Natural environment system targets Air T1 By 2036, energy consumption is reduced by 30 per cent based on 1999 use. 8 T2 By 2036, t he use of low-i mpact renewable energy increases by 30 per cent as a percentage of total energy use . T3 By 2012 , tota l community greenhouse gas emissions are reduced by six per cent from 1990 levels; by 2036, they're reduced by 50 per cent from 1990 levels and criteria air contaminants are also significantly reduced . T4 By 2036, indoor air contaminants are reduced to zero per cent. TS By 2036, Calgary's ecological decreases to below the 200 1 Canadian average of 7.25 hectares per capita . imagineCALGARY - June 2006 Copyrig ht © 2006, Th e City of Calgary. All rights rese rved 63 TARGETS land and soil T1 By 2036, land use efficiency increases by at least 30 per cent, as measured by public transit threshold and increased density. T2 By 2036, sustainable urban food production increases to five per cent. T3 By 2036, the consumption of urban- and reg ionally produced food by Calgarians increases to 30 per cent. T4 By 2036, there is zero per cent new soil contamination . T5 By 2036, at least 30 per cent of existing contaminated sites are remediated T6 By 2036, Calgary's ecological footprint decreases to below the 2001 Canadian average of 7.25 hectares per capita. Plants and animals T1 By 2036, native biological diversity increases to healthy levels, as measured through Habitat Suitability Index indices and local key indicator species. T2 By 2036, the number and/or size of protected or restored habitats increases to a state of health and functionality. Water T1 By 2036, per cap ita water consumption is reduced by 40 per cent. T2 By 2036, positive rates of flow in the Bow River Basin are maintained to keep aquatic ecosystems at these levels. T3 By 2036, effective impervious areas are reduced equal to or below 30 per cent to restore natural hydrograph and become less susceptible to flooding . T4 By 2036, watershed health- as measured by loss of wet lands, water quality, non-compliance with pollution standards, in-stream flow and groundwater levels - improves. T5 By 2036, Calgary's ecological footprint decreases to below the 2001 Canadian average of 7.25 hectares per capita. Social system targets Aesthetic enjoyment T1 By 2036, 90 per cent of citizens report that Calgary is a beautiful city. T2 By 2036, 95 per cent of Calgarians report that they have a range of opportunities for the aesthetic enjoyment of nature, arts and culture. Creative self-expression T1 By 2016, 90 per cent of Calgarians report that they have opportunities to express their unique gifts and talents . T2 By 2021, 90 per cent of Calgarians report that Calgary is a city that promotes creative freedom. T3 By 2026, 90 per cent of Calgarians report that participation in creative activities is an important part of their lives. imagineCALGARY- June 2006 Copyright ~ 2006, The City of Calgary. All rights reserved. 9 64 TARGETS Health and wellness By 2036, all Calgarians live in a safe and clean natural environment, as measured by the quality of its air, water, soil and food sources, plus by the lack of exposure to toxic waste. T2 By 2036, 95 per cent of Calgarians enjoy positive and supportive living conditions, as reflected by adequate income; high rates of employment; adequate food and appropriate nutrition; appropriate, adequate and affordable housing; and high levels of persona l safety. T1 T3 By 2036, 95 per cent of Calgarians receive sufficient information and supports to maintain and improve their health and foster their independence at all ages and stages of life. T4 By 2036, 100 per cent of Calgarians can obtain qual ity, affordable, timely and appropriate health information and services, as measured by satisfaction levels. T5 By 2036, the incidences of preventable illness, injury and premature death are significantly reduced . T6 By 2036, 85 per cent of Calgarians, in all age groups, maintain excellent or very good mental health. Lifelong learning By 2016, by the age of six years, 95 per cent of Calgary children exhibit school readiness, as reflected by physical well-being and appropriate motor development; emotional health and a positive approach to new experiences; age-appropriate social knowledge and competence; age-appropriate language skills; and age-appropriate general knowledge and cognitive skills. T1 T2 By 2016, 95 per cent of Calgary students succeed in elementary and junior high school, as measured by standardized achievement testing in grades three, six and nine and alternate education metrics. T3 By 2036, 95 per cent of Calgary youth complete high school by age 21 and complete some form of post-secondary education or training by age 25. T4 By 2016, 100 per cent of adult Calgarians have access to a full range of formal and informal quality learning opportunities and resource options that allow them to achieve their full potentials in life. T5 By 2016, 95 per cent of adult Calgarians have the minimum levels of literacy and numeracy- as defined by the International Adult Literacy and Skills Survey - required to fully participate in the economy and all aspects of life in Calgary. Meaning, purpose and connectedness T1 By 2036, 90 per cent of citizens agree that "Calgary is a city w ith soul," which is defined as citizens having meaning and purpose in life and experiencing ongoing feelings of connectedness with some form of human, historic or natural system. T2 By 2036, 100 per cent of Calgarians report that they feel respected and supported in their pursuits of meaning, purpose and connectedness, and that they extend respect and support to others who meet this need in ways different from their own. Peace, safety and security By 2016, 95 per cent of Calgarians report that they feel safe walking alone in their neighbourhoods and walking alone downtown after dark. Tl T2 10 By 2016, 95 per cent of Calgary parents report that they allow their children over six years old to play unsupervised on their own blocks. imagineCALGARY - June 2006 Copyright 1:> 2006. The City of (a/gary. All right< reserved 65 T ARG ETS T3 By 2036, given that crime rates are driven primarily by the number of males in the populat ion aged 15 to 24, the proportion of adolescents and young adults in conflict w ith the law decreases from 2006 levels of about one per cent to 0.01 per cent. T4 By 2036, the percentage of Calgary women who have been assaulted by their intimate partners at least once in the past f ive years is reduced from approximately 11 per cent to three per cent. Recreation T1 By 2036, 90 per cent of people living in Calgary report that they partici pate in active lifestyles that include informal and structured recreational opportunities. T2 By 2036, 100 per cent of Calgarians report that they can access a range of high-quality recreational experiences, regardless of gender, socio-economic status, age, ability, religion, race, sexual orientation or heritage. Relationships T1 By 2036, 95 per cent of Calgarians of every age and ability report that they value and have mutually supportive relationships in several settings, such as at home, school and work and in the community. Self-esteem T1 By 2036, 95 per cent of children aged two to five years exhibit high levels of emotional well-betng and age-appropriate levels of attention span and impulse control, as measured by t he Ages and Stages Questionnaire. T2 By 2036, 95 per cent of children aged six to 11 years report a high sense of self-worth, and 80 per cent of Calgary adolescents, both male and fema le, describe themselves as productive or potentially productive members of society, able to change themselves or their lives through t heir own actions, having the personal power to effect change in the world and being opti mistic about their futures . Sense of community T1 By 2010, 90 per cent of Calgarians agree that there is a strong sense of community in Calgary, and at least 80 per cent of Calgarians report high levels of satisfaction, sense of belonging, attachment and civic pride. T2 By 2010, 80 per cent of citizens experience a high sense of community in their neighbourhoods and affinity-related communities, as reflected by residents' reports of neighbourhood participation and volunteering, sense of belonging, neighbourliness and reciprocity, sense of efficacy, attachment. safety and voter turnout. T3 By 2010, at least 75 per cent of Calgarians report that they volunteer for the benefit of others who are outside t heir ci rcles of fam ily and friends. imag i ne C AL G A R Y - June 2 00 6 Copyrigh t g 2006. The Cit y of Calgary. All rig hts reser ved. 11 66 Appendix F - City of Kelowna Goals & Targets Table 1: INDICATORS OF SUSTAINABLE MUNICIPAL INFRASTRUCTURE and 2020 TARGETS FOR THE CITY OF KELOWNA "What gets measured gets done" ...John E. Jones, but, "Not everything that counts can be counted, and not everything that can be counted counts." .. . Albert Einstein Note: Indicators in shaded rows are the indicator measures to be developed and used for planning and reporting in 2010. Others will be phased in during subsequent years. ID INFRASTRUCTURE GOAL 2020 TARGET RATIONALE NATURAL (ENVIRONMENTAL) Capital provides the energy, raw materials and waste absorption/filtering that are critical to the modern human economy and a high quality of life. N1 Kelowna will contribute its fair share to moderate climate change and to achieve global GHG atmospheric levels below the IPCC recommended level (currently 350 ppm C02e). GHG emissions from all city-owned infrastructures will be reduced 33% from 2007 benchmark levels as measured by BC Provincial protocols. N2 Kelowna will reduce its ecological footprint to its global fair share. This would require more than 80% per-capita reduction in ecological resource consumption. Reduce the ecological footprint of municipal infrastructure by 33%. Further reductions to 80% by 2050 would be phased in after ZOZO. Included would be the reduction of water consumption levels below benchmark cities in Canada with fewer than 150,000 people. N3 Kelowna will protect its watershed. Kelowna will still be able to defer potable water filtration through source protection measures that satisfy IHA. 2010.02.22 Mayor and Council were signatories to the BC Climate Action Charter in 2008, which committed the City Corporation to carbon neutrality relative to ZOO? benchmark levels by 201 Z, a 33% reduction by ZOZO, and an 80% reduction by 2050. These are absolute numbers independent of population growth. Given that Kelowna is expecting to grow, a higher per-capita reduction is required to compensate for the additional GHG emissions created by growth. Note that community-wide GHG reductions are not mandatory, but need only be reported and voluntarily reduced. Kelowna ' s consumption of ecologically productive land and water, based on a Canadian average of 7.25 hal capita is more than 4 times the per-capita available global ecological footprint. Reducing this footprint inevitably requires a reduction in the consumption of resources such as material, water and non-renewable energy and the reuse of all waste streams; in other words, across-the-board eco-efficiency and a rapid transition toward 'regenerative design' in municipal infrastructure. Consequences of this goal would include local energy and water security. Municipal infrastructure both draws and discharges water, wastewater and stormwater into our sensitive water sources . The implementation of a rigorous water source protection plan is needed to maintain water source _quality. Multiple Bottom Line Framework 7 67 10 N4 INFRASTRUCTURE GOAL Kelowna will steward self-organizing natural habitats and facilitate bio-diversity and natural ecosystem succession and evolution . 2020 TARGET RATIONALE 12% of Kelowna's land base will be ecologically self-sustaining land and/or natural water habitats that are publically·owned or protected . Ecologically healthy habitat with abundant indigenous biodiversity provides ecological resilience in the face of environmental change. The number and quantity of indigenous selfsustaining species is an indicator of the health of local water- and air-sheds. Ready access to nature is a key community value. BUlLT CAPITAL is the physical municipal infrastructure that is necessary to deliver municipal services and support economic prosperity. B1 Ensure that future generations enjoy the same value of built capital in the form of public infrastructure. The total net asset value of infrastructure per capita will remain constant or increase. In addition, the average "condition index" of the entire stock of built infrastructure will be maintained at fair or better. Together, the two targets address "value" in quantitative and qualitative terms. Infrastructure needs to be maintained and replaced in accordance with an asset management plan to • ensure that it lasts for the full duration of its intended service life, and • provides mandated levels of service throughout its service life. If replacement is required prematurely or assets are not replaced at the natural end of their service life, an infrastructure deficit results and future generations may have less municipal infrastructure than their predecessors. ECONOMIC Capital is the infrastructure that produces goods and services, including land, labour & machinery. E1 Kelowna's infrastructure will provide a full range of reliable municipal infrastructure services. Council approved levels of service for infrastructure will be provided to all residents at all times. Levels of service reflect the quantity and quality expectations for the services that infrastructure provides. E2 Kelowna will achieve a positive return on investment (ROI) in public infrastructure. A reasonable target for this goal will need to follow research on achievements in the comparable urban contexts. See 'rationale' . Achieving levels of service is a function of a number of factors including the deployment of appropriate technologies, system capacity and redundancy, design and construction quality, operating procedures, maintenance regimes, etc., which require seamless interdepartmental coordination. Levels of service should be explicit in the asset management plan for each infrastructure type. The selection of appropriate infrastructure services can attract the knowledge sector and 'green' business. Appropriate municipal infrastructure development increases the market value of land and, subject to global economic conditions, stimulates private sector development. As an example, private returns on public investment associated with the revitalization of Bernard Avenue over the next few years should result in higher assessed values and associated property taxes, higher rents, higher sq. ft. sales and increased investment in downtown development measured by the value of nearby building permits and the achievement of maximum zoning envelopes. Successful public investments encourage further investment by others. SOCIAL Capital is the fundamental ingredient of a caring community. 2010.02.22 Multiple Bottom Line Framework 8 68 ID INFRASTRUCTURE GOAL 51 Infrastructure will connect people to goods and services, to their community and to the natural environment and provide universal accessibilit3l. 52 Kelowna's public domain will be and feel safe and secure. 2020 TARGET RATIONALE Residents in the urban core will be within 400 metres of public transit and public assembly places and green space, all of which will be accessible by pedestrian and bicycle infrastructure. Kelowna will have the lowest rates of crime against person and property i n the public domain relative to similarly-sized Canadian cities . A key element of a sense of belonging, of social i nclusion, of equity of service, of social and ecological literacy, of democratic participation, and of creative dialogue and innovation is face-to-face contact with other people and nature. Infrastructure can connect people to each other and to the amenities of the built and natural environment. The ability for residents to enjoy street life is essential for a caring community. The design of public infrastructure (CPTED principles), along with the health of the economy, and the abundance of opportunities for the investment of positive energy all contribute to personal safety and property security. CULTURAL/CREATIVE Capital is the ability to perceive and act in ways that work in changing circumstances. C1 Kelowna will invest in the creation and preservation of the distinct and meaningful features of its natural and built public environment. The number of culturally significant and publicly accessible natural and built 'landmarks' and public places per capita will remain constant or increase. C2 Kelowna will ensure that there are adequate venues to support a full range of active participation and enjoyment in recreation, sport and cultural activity. Kelowna will be recognized for innovation or design quality. Kelowna will provide areas/capita of both recreational and cultural spaces which are equivalent to cities with a reputation for active and creative living. C3 Kelowna's public infrastructure will attract awards for innovation and/or design quality. The sense of community and pride are supported by meaningful & memorable built embodiments of local social values and history and the geophysical and biotic features that provide a unique, distinctive character and sense of place. The continuing production of culturally significant landmarks is an indicator of creativity and local identity. A creative City attracts and retains talent by providing accessible venues for formal and informal performance, recreation and creative activity to all its citizens. This is a key success factor for healthy and engaged citizenship. A city that is recognized for the design quality and innovativeness of its infrastructure will attract and retain talented people, leading edge businesses and tourists. FINANCIAL capital provides fiscal liquidity so that the City is able to respond to and resume business following short-term emergencies (shocks), adapt to long-term stresses and pressures, and recognize and respond to unexpected opportunities as they arise. The preservation and enhancement of financial capital ensures that future generations have the same and greater resilience and adaptability to change. F1 Infrastructure services will be delivered at the lowest possible life-cycle cost per capita. 2010.02.22 Capital priorities and project options will be selected based on the achievement of all multiple bottom line targets at the least lifecycle cost investment per capita or per unit of service delivered. An integrated approach to infrastructure planning will identify the synergies where a single infrastructure investment will advance several sustainable infrastructure goals without having any negative impacts on the remaining goals. The highest benefit/cost ratio will have the highest return on investment. The goal is to achieve MBL targets at the least life-cycle cost, not to exceed MBL targets at any cost. Multiple Bottom Line Framework 9 69 ID F2 F3 INFRASTRUCTURE GOAL Capital Reserves will keep pace with capital renewal and replacement needs. Kelowna will attract external investments to reduce the burden on the local taxpayer I ratepayer. 2020 TARGET RATIONALE Capital reserves will be 75% of planned capital needs. Capital expenditures are easily diverted to new capital projects. If these are funded from reserves, the ability to steward and replace existing infrastructure is compromised. Innovative, leading edge and valued infrastructure will provide benefits to senior governments, businesses, private developers and institutions that can benefit th rough partnerships. Increased investment accelerates the achievement of infrastructure benefits. External financial contributions to infrastructure will be 20%/yea r. GOVERNANCE and ORGANIZATIONAL CAPACITY gives the community the ability to recognize changing circumstances, the shared knowledge to imagine appropriate responses, and the courage to risk timely action. G1 Kelowna will support an informed and inclusive public process regarding its infrastructure investment decisions to build transparency, accountability, partnerships and collective governance capacity. 80% of Kelowna 's residents, academic institutions and key stakeholders agree with Kelowna' s infrastructure investment decisions. Public commitment to develop and follow the results of a shared and responsive decision-making tool informs individual and collective behaviour and is critical to real sustainability. The expectation is that the City Corporation's annual capital investments must result in the achievement of all MBL targets at the level of the infrastructure system as a whole. At the capital project level, preferred solutions will be those that achieve the highest benefit to cost ratio. Currently there a re sixteen (16) indicators and targets in the MBL framework. It is acknowledged that reliable and cost-effective data collection protocols to measure the status of each goal and target in this MBL Framework are needed. Measures for seven (7) of the indicators are planned for 2010. The MBL measures will be tested through application to normal capital planning activities such as the annual capital plan, the 10-year capital plan and the 20-year Servicing Plan and Financial Strategy (DCC Bylaw). 2010.02 .22 Multiple Bottom line Framework 10 Financial/Economic Value Environmental Value Intangible benefits Social/Community Value space, reduce air emissions, encourage environmental stewardship, contribute to regional sustainability enhance citizen participation, strengthen neighbourhoods, improve service/image/decision making revenues, savings/ avoidance, productivity improvements, minimize risk , increase economic opportunities Strategic Plan Alignment Tangible benefits Protect Infrastructure, Complete Community, Safety, Customer Service, Strategic Alliances, Financial Stability, Strong Organization Area Appendix G- City of Port 20°/o 20% 20% 20% ~ ~~ ~ ~ 1 ~ ~ ~ ~ ~~ ~ I I i ~ -..,J 0 71 -~ Appendix H City of Nelson Assessment Tool '· -~ TOOL ' ... This tool is to be used for all communitv level actions. - ·"- 1. What is the proposed action item? tvbve forward on a completed Downtown Master Plan 2. Which current policies and plans does this action support? Policy(s): How : Path to 2040 Sustainability Strategy, Official Community The goals and objectives within the proposed downtown-waterfront plan strengthen policies Plan, ZOning Bylaw, Water Master Plan. Subdivision Bylaw, towards a long-term development and supports necessary infrastructure with efficiencies and Sewer Master Plan dem and. 3. What irlllact does this action have on Nelson's Sustainabilty Principles, Directions, and Objectives? 1. Review the Sustainability Principles and Directions sheets . Indicate which objectives are related and identify the impacts of the action . 2. Assign Impact Rating: 3 or -3 =strong impact; 2 or ·2 =moderate impact; 1 or -1 =minor impact: 0 =no impact or not applicable * Sustainablity Principle & Direction .,c .b en "§ E "5 Conservllg and enhancing our drverse recreational assets and opportunities , 0 0 -E:I 0 .0 J: "' ·;;; z,.. ;; ., iii J: AQ-Q . R eserve end celebra te heritage, ACH3: Buid cultura l VISJon fOf our Indirect Related Impact Rating 3 3 3 3 3 2 Notes ~ Eeconomc relationships NA R1.3: ~ a dis tnbuted , res tored natural areas network . W1: Reduce water consurrptJon. 0 ,"' Direct Related Impact Rating AQ-i1. Ptorrote arhslic and culh.Jral expression & celebratOn. J: c, Objectives LE2: Support en trepreneunal )eadershlp, TM1. Support hurran powered transportation h viting parks, comn.mity gardens and informal public spaces for gathering, AOQ. A'eserve and celebra te h errtage , ECC2 : Reduce energy consurrpton, and greenhouse gas emss10ns Overse hous111g opportunities n all neighbourhoods, rt.SW2 : Fos ter an 1nclusive and respectful comrunity, Developrrent rociJSed W"' specific, pre-denlWied rrixed use areas . rt.SW4 . M:lxnlze inlergenerationa l connections, Connected residential a reas v.a saf e, enjoyable wa !king and cyckng I-LS'W6: Support socially jusl econom c developrrenl, corridors and greenw ays. LUt . 81sure bylaws support susta(')a b•tity, Buildtngs that are susta ina ble 1n des.g n and operatiOn, tney TM1 ; Support hurren pow ered tran sportation, ncorpor ate green buiding practices and technologies when h'prove eyeing ~ re novatilg existing and construc bng new bu•ldtngs LU2: A"orro le a ff ordable mxed use housing n...o. ECC3: Encourage bcal green eCOIIClmf. t-l.SW1 : Support heallhy living , ~ ·;: "'a. Ill ~ 0. Supportflg new and existrtg indus tnes. businesses. and NGOs, Supporting err1cient rrov errent of p eople and resourc es . LE1; Support businesses and 111vestm:mt, ECC4 . A nticipa te and pla n to adapt to chrrate changes Supporting a vibran t, sa re dow nlow n and w aterfront as a LE3. M:t1ntain and f urther dev elop a drverse econOJl'¥. w elcotring s p ac e, LUS. Foc us new grow th in the downlow n end w a terf ront , Recogn iz i'lg srreUbus iness as a key dnver of our bcal corrrrunity ~ h"pf ove Inter and 1ntra c omrun ity transtt, Aa-14 . n tegra le A C&H into other sectors of the conm.mity . TMS: Foster connectivity downtow n * Strong Impact: This initiative will move Nelson significantly 'closer' or 'away' from meeting the related principle, directions, and objectives. Example: the initiative puts Nelson more ~ ahead or behind of where we are now. * Moderate Impact: This initiative will move Nelson somewhat 'closer' or 'away' from meeting the related principle, directions, and ~ ahead or behind of where we are now. objectives. Example: the initiative puts Nelson more * Minor Impact: This in itiative will move Nelson iligh!)y 'closer' or 'away' from meeting the related principle, directions, and objectives. Example: the initiative puts Nelson more than 1:2 years ahead or behind of where we are now. 24 72 ~ ... ECC2. Reduce energy consUt'l"pton. and greenhouse gas errissions prosperity, u 0:: ECC3. Encoorage local green econoity. LE3. MJintain and further develop a diVerse economt envronment . E .... Ftotect11g, restoring, and enhancing our natural assets by c011ti1uing to cultivate responsible envronrrentat practices ;. Using our natural resources eff iciBntly and conserving them to the ~ 0 greatest exleol possille .. u w Oesignflg Infrastructure that rmfltains natural syslerrs, and using natural system> to enhance lllfraslruclure perfomence. A-otecli-lg lhe natural areas on"'-" neighbourhoods, ..,iii" a: 0 Total ECC1 feduc e dependence on fossj fuels . Foster a dN'erse, flexible buSI"MtSS COfTJ'IlJf1ity that sustains our ~ ECC: Reduce energy consUf'Jl)tJon, and greenhouse gas enissllns . NARI.3: Estabish a distributed. reslored nawralareas netw or1<. ThQ. feduce personal vehicle use Ratings: Reflect on the ~ Rating and assign a net 4. Describe how to nitigate the negative ~ ~ (Highlight one): Net Negative Impact 2 -1 3 -1 14 6 Strong Moderate Minor errvironmental goals could be beller incO