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Putting a price on nature

Eco Assets Strategy

The Town of Gibsons is considering a strategy to incorporate the natural assets of the Town into the value of the Town’s asset infrastructure. And the project has garnered national interest.

Chief administrative officer Emanuel Machado presented the draft proposal, which is in its final phase, at the Feb. 3 committee of the whole meeting.

The proposal was received enthusiastically by councillors who approved moving forward with the strategy.

“This has been an interesting question, but it’s also a challenging question, which is: What is the asset worth?” asked Machado. “We’re not necessarily trying to find a value to nature, what we’re trying to find is: What is the value of the service we receive? That’s important because we’re dependent on those services. So how do we prepare from a risk and liability perspective?”

To help determine this value, students from BCIT led by Michelle Molnar from the David Suzuki Foundation are using Gibsons as a model to develop a formula for determining the value of services provided by natural assets.

The benefits of using natural assets, as explained in the study, are: no up-front costs, no replacement costs, lower operating costs, and a natural asset could last indefinitely if properly managed. The results of this project could be implemented into communities across Canada.

A team led by the Town’s director of engineering Dave Newman has been using the National Asset Management System (NAMS) and Assetfinda, softwares that integrate and manage the engineered assets of a town.

Last June, Gibsons council approved development of their own asset management policy, which is the first of its kind to consider data from natural assets as well as engineered assets.

A natural asset, as described by the policy, is a “naturally occurring land or surface feature, which performs or supports service delivery to the Town.” This includes man-made resources, like ditches.

One of the primary examples is the Gibsons aquifer. It is a confined aquifer, which supplies the wells and springs of Gibsons. An extensive study conducted between 2009 and 2013 found that the aquifer stores and filters enough water to provide for the estimated 4,400 local residents, as well as the projected future populations of Gibsons.

Currently the Town spends $28,000 annually on monitoring the aquifer. To replace, maintain and operate a water treatment plant of equivalent capabilities, “the cost would be in the millions,” said Newman.

An asset inventory shows that Gibsons owns about $60 million in engineered assets. To maintain their assets, the Town must spend or set aside between $2 and $2.5 million each year for asset replacement alone. The Town’s annual revenue for operating, maintaining and replacing assets is about $6.5 million.

After the operation and maintenance costs, there isn’t a lot of room left for any replacements that need to be done, so an alternative had to be found.