Staff Report to Council — Asset Management Plan

Staff Report to Council — Asset Management Plan

DATE: Tuesday, September 8, 2026
DEPARTMENT: Finance
SUBJECT: Asset Management Plan

Executive Summary

Within Council’s 2023-2027 Strategic Plan, increasing infrastructure costs were identified as a significant challenge facing the community. Council specifically acknowledged the need to develop a Comprehensive Asset Management Plan as part of the City’s long-term planning framework. The Strategic Plan recognizes that continued population growth, rising construction costs, and increasing infrastructure obligations due to aging infrastructure require proactive planning and sound financial management to ensure services remain sustainable and affordable for current and future residents. Through the development and implementation of the Asset Management Plan, the City is advancing Council’s commitment to financial stability, sustainable growth, and informed decision making by establishing a framework to understand infrastructure needs, prioritize investments, and plan for long-term renewal and replacement requirements.

Background

As one of British Columbia’s fastest growing municipalities, Langford continues to experience significant population growth, development activity, and infrastructure expansion. This growth creates both opportunities and challenges, requiring careful planning to ensure that infrastructure, services and financial resources remain sustainable over the long-term. The Asset Management Plan provides a comprehensive overview of the City’s infrastructure portfolio, the services those assets support, and the lifecycle factors that influence future renewal and replacement needs. The Plan establishes a foundation for long-term capital planning by helping the City understand its infrastructure obligations, evaluate financial sustainability, prioritize future investments, and ensure that growth and infrastructure stewardship remain aligned with Council’s strategic objectives for financial stability and sustainable development.

Commentary

The City’s current infrastructure portfolio has an estimated replacement value of approximately $1.8 billion. If the City assumes ownership of the Langford sewer infrastructure currently owned by Westshore Environmental Services (WSES), the estimated replacement value increases to approximately $2.2 billion.

The City’s infrastructure portfolio remains relatively young, with only 26% of the useful life consumed and approximately 74% of the useful life remaining. As a result, the overall infrastructure portfolio is assessed to be in good condition, with most major asset classes in the early stages of their lifecycle. This provides an opportunity to establish proactive funding strategies before significant renewal and replacement requirements begin to emerge. Annual renewal requirements remain relatively modest in the near term but increase as infrastructure ages and major asset groups reach end of their useful life. Long term planning and prudent financial management is therefore required to ensure sufficient funding is available when assets require rehabilitation and replacement.

Based on the current Financial Plan, the current annual infrastructure funding is estimated at approximately $14.4 million, compared with a funding requirement of approximately $20.1 million, this difference results in an annual infrastructure funding gap of approximately $5.7 million. The $14.4 million includes the proposed plan to invest the annual funding currently being collected to pay for the debt servicing for the Langford Aquatic Centre debt and the Woodlands Park project, which makes up approximately $9 million of the $14.4 million that will be collected annually for infrastructure funding starting in 2031. Based on the current funding levels the City is projected to accumulate approximately $900 million in unfunded lifecycle infrastructure requirements over the planning period. It is worth noting that estimate does not include any additional assets being added to the City’s inventory over the same time period.

As mentioned above, and as staff highlighted when the various scenarios were presented to Council for the debt servicing for the purchase of the Langford Aquatic Centre, recent tax increases, future planned tax increases through 2030, and financial planning initiatives have materially improved the City’s long-term infrastructure funding position. Since 2022, additional infrastructure renewal funding has increased the projected asset management funding by approximately $742.5 million over the planning period. Put another way, the City’s current financial plan is forecast to improve asset management funding sustainability from approximately 20% in 2022 to approximately 57% in 2026, with the funding projected to approach 80% by 2030.

Legal Implications

No legal implications are identified. While there is no legislated requirement to have an Asset Management Plan, it is prudent both from a legal and financial perspective.

Financial Implications

A proactive funding strategy, where reserve contributions are made throughout an assets lifecycle, is the most cost-effective approach to managing future infrastructure replacement costs. By generating investment income and avoiding future borrowing costs, this approach is projected to save approximately $1.4 billion compared with funding replacements when assets reach the end of their service lives. The City’s 2026-2030 Financial Plan supports this approach by redirecting retired debt servicing payments into infrastructure reserves.

Should Council wish to pursue a fully funded infrastructure replacement plan, further tax increases will be required to close the current proposed funding gap. Additionally, as the City acquires new assets, lifecycle funding will be required in order to maintain the current projected funding percentage.

Strategic Plan Alignment

5bi - Ensure All Budgets Are Fiscally Sustainable.
5h - Finalize A Comprehensive Asset Management Plan.

Options

Option 1

THAT Council approve the City of Langford Asset Management Plan and Long-Term Financial Plan.

OR

Option 2

THAT Council not approve the City of Langford Asset Management Plan and Long-Term Financial Plan.

Submitted By

Michael Dillabaugh, CPA, CA, Director of Finance

Concurrence

Melisa Miles, Manager of Legislative Services
Donna Petrie, Senior Manager of Communications & Economic Development
Yari Nielsen, Director of Parks, Recreation and Facilities
Katelyn Balzer, P.Eng., Director of Engineering and Public Works
Marie Watmough, Director of Legislative & Protective Services
Darren Kiedyk, Chief Administrative Officer

Attachments: City of Langford Asset Management Plan & Long-Term Financial Plan