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Case Study - Government

Municipal Infrastructure

Technology Solution
In recent years, managers of Municipal Infrastructure have come under increasing pressure to develop new strategies to manage public assets in a way that ensures their long-term sustainability. Typically, and until the introduction of TCPS® and one of its four Capital Planning modules, ReCAPP®, into this market, there were few (if any) commercially available technology solutions that could project the potential future capital renewal needs of assets such as water and wastewater facilities, roads and bridges, and other civil infrastructure. There was also real concern expressed by managers as to the continued accumulation of capital maintenance backlog issues. It was generally acknowledged that if future renewal requirements could be properly quantified within specific timeframes, municipalities would be in a much stronger position to accurately estimate future rate structures for water and sewer use.

Business Solution
By combining the theory of lifecycle analysis with industry standard components and values, Altus Capital Planning Solutions (CPSI) evolved a high-level renewal profile for a major regional municipality. Specifically targeted for analysis was the water and wastewater network for the entire region. Some original components were approaching 150 years since their initial install date, and the combined network represented approximately $12 billion in invested capital.

Since there was very little historical information available as to how and when the asset base evolved, CPSI relied on population demographics to determine the probable age and amount of centralized infrastructure. This defined (by decade) the lifecycle "start point" on which the forward model projections could be driven. From this point, theoretical cost and renewal assumptions were introduced, and a profile created that describes expected renewal costs for the next 100 years in, 10 year increments. The entire process required approximately three months to complete.

Highlights
ReCAPP® has assisted the municipality in gaining a fuller and more accurate appreciation of the downstream renewal costs that will need to be addressed in order to ensure long-term sustainability of their working infrastructure. With this information, the regional municipality can now begin to develop a future rate structure that will be much more aligned with the aging reality of these critical assets. The model, now that the basic parameters have been set, can also be used to estimate the future funding impact of new infrastructure construction.