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Guidance for Developing The Strategic FrameworkPreparing a Community Infrastructure Services Plan Updated 2021

ContentsThis document is provided for information purposes only and does not constitute legal or technical advice. The Naut’sa mawt Tribal Council (NmTC) endeavours to keep the information in this document current with periodic updates. However, laws, regulations, policies and programs relevant to buildings and infrastructure on reserve change frequently and as a result NmTC makes no representations regarding the accuracy of any such informa-tion contained in this document. No legal liability or other responsibility is accepted by or on behalf of the NmTC or its ocers, employees, advisors or funding organizations for any errors, omissions, or statements contained in the document.The NmTC, including its ocers, employees, advisors or funding organizations, accept no responsibility for any loss, damage or inconvenience caused as a result of reliance on information provided in this document. All persons, First Nations and organizations who use this document are responsible for obtaining their own inde-pendent legal, nancial and other advice. By using this document, the user expressly agrees that the NmTC, its ocers, employees or advisors, shall not be liable in any way for damages that may result from its use.The views and opinions expressed in this document do not reect any ocial policy or position of the NmTC, funding organizations or participating First Nation Communities or First Nations organizations.CopyrightThis document and all included and associated documents are protected by copyright in accordance with the Copyright Act of Canada. This document is expressly intended for the purposes of research, private study, review, and education by and of First Nation Communities and First Nation organizations interested in developing and/or enhancing on-reserve programs, policies, procedures and/or agreements.In accordance with the fair dealing provisions of the Copyright Act of Canada, this document may only be used if reproduced accurately, not in an inappropriate or misleading context, and is not distributed to others or repro-duced for sale or prot.The NmTC administers the copyright of this document. For information on permission to copy material in a man-ner that exceeds the fair dealing provisions of the Copyright Act of Canada, please contact:Naut’sa mawt Tribal Council

Table of Contents1. Introduction ................................................................................................................................................................................ 12. Community Infrastructure Services Planning – Overview ............................................................................................... 13. CISP Community of Practice ................................................................................................................................................... 34. Developing the CISP Strategic Framework .......................................................................................................................... 35. CISP Strategic Framework – Inputs & Outputs .................................................................................................................. 76. Developing the CISP Strategic Framework – Tips and Tricks ..........................................................................................7

Guidance for Developing the Strategic Framework11. IntroductionThis manual was produced by Consensus Infrastruc-ture Solutions Ltd. for the Naut’sa Mawt Tribal Coun-cil. It provides guidance on developing the Strategic Framework component of a Community Infrastruc-ture Services Plan (CISP). This guidance should be considered in conjunction with the document “Preparing a Community Infrastructure Services Plan – User Manual and Sample Plan – 2021”. Preparing the Strategic Framework is Step 2 of the 14 step CISP process set out in that Manual. 2. Community Infrastructure Services Planning – OverviewA Community Infrastructure Services Plan (CISP) sup-ports First Nations in achieving their Community Plan through the successful and ecient delivery of com-munity infrastructure services such as: water supply and distribution; sewage collection and treatment; storm drainage; roads; solid waste management; and community buildings. The CISP is more comprehensive than and distinctly dierent to the process described in the Infrastruc-ture Planning Guide (IPG) published by the Naut’sa Mawt Tribal Council in 2019. The IPG is high-level, and is intended to promote infrastructure discus-sions during preparation of a Comprehensive Com-munity Plan (CCP).By contrast, as shown in Figure 1, the CISP supports the Comprehensive Community Plan (CCP) by incor-porating all strategic, tactical and operational aspects of delivering Community Infrastructure Services. The CISP provides the context for strategic, administra-tive, nancial, operational and capacity building ac-tivities. It also provides the basis for getting the right balance between the quantity and quality of service (levels of service), risk and cost.The CISP process is performance based - as the saying goes, “you can’t manage what you don’t mea-sure.” Performance based planning and management involves: establishing measurable, feasible perfor-mance targets; monitoring and measuring actual per-formance; and developing and implementing strate-gies and action plans to resolve performance gaps.The CISP is a cyclical, continuous improvement pro-cess that should be updated regularly (at least yearly) to accommodate current year results and new or changing circumstances. In eect, the process rep-resents a rolling 5- to 10-year infrastructure service business plan in which a year is dropped and a year is added with each annual update.A Community Infrastructure Services Plan (CISP):a. Adopts for direction, the Community Vision and Objectives (outcomes to be achieved).b. Establishes, for each objective (outcome), one or more measurable, key performance indicators (KPIs) and meaningful performance targets.c. Identies the scope and cost of infrastructure services to achieve target performance, including how those services should be delivered.d. Identies and scopes capacity building require-ments.e. Identies multi-year nancial requirements (cap-ital and O&M), sources of funds and necessary nancial policies and strategies (e.g. debt; user charges; reserves).f. Documents key strategies and a prioritized action plan for improving performance.This manual addresses the CISP Strategic Framework – namely items (a) and (b) above. Other aspects of the CISP are set out comprehensively in the document “Preparing a Community Infrastructure Services Plan – User Manual and Sample Plan – 2021”.

2Guidance for Developing the Strategic FrameworkComprehensive Community Plan (CCP) ▪ A Community led Roadmap to sustainability, self-suciency and improved governance ▪ High level master plan that sets out Community vision, objectives, guiding principles and concepts for planning and development – including lifestyle, economic, social, environmental and cultural expectationsCommunity Infrastructure Services Plan (CISP) ▪ Strategic and high level business plan for delivering infrastructure services to enable the Community Plan; CISP projects: “How much should a FN spend, on what, when and why to ensure sustainable delivery of enough, good quality infrastructure services for the Community at the lowest life cycle cost?”Figure 1. CISP Structure & ContentService DeliveryWhat type, quantity & quality of services do we deliver & how?Financial ManagementHow much money do we need & when?Where will money come from & on what terms & conditions?Infrastructure ManagementWhat infrastructure do we require, where & when?How will we manage our infrastructure? ▪ Services to be delivered ▪ Service delivery policies & practices » Levels of service » In-house or contract out ▪ Service risk management ▪ Demand forecasts ▪ Service regulation ▪ Customer service ▪ Communications & education ▪ Capacity Building » Organization structure » HR policies & practices » Stang & contracting out » Training ▪ Emergency response ▪ Insurance ▪ Service delivery monitoring & reporting ▪ Service delivery information management ▪ Financial policies & practices » Financial Administration Law » Tangible capital assets ▪ O&M expenditure projections ▪ Capital expenditure projections » Existing assets » Future assets ▪ Financing – amounts, sources, terms & conditions ▪ Revenues – amounts & sources ▪ Operating & capital reserves ▪ Financial risk management ▪ Financial monitoring & reporting » Income » Balance sheet » Tangible Capital Asset report » Cash ow ▪ Financial information management ▪ Infrastructure management policy » Asset management policy » Own vs. rent/contract-out » O&M policies » Safety & security policies » Infrastructure standards ▪ Asset Management » Asset inventory » Asset monitoring, inspections » Asset replacement forecast » Service life forecasts ▪ Infrastructure operations & maintenance ▪ Projected infrastructure additions, deletions, alterations ▪ Infrastructure risk management ▪ Infrastructure monitoring & reporting ▪ Infrastructure information management » O&M » Assets

Guidance for Developing the Strategic Framework33. CISP Community of PracticeThe CISP vision is for widespread use of the practice among First Nations (FNs) across B.C. and, hopefully, across the Country to promote: ▪ Greater structure, consistency and accountability in service planning, budgeting and operations. ▪ Improved eciency, increased reliability and reduced costs. ▪ Stronger support for infrastructure investments and priority setting. ▪ Greater consistency and understanding through common language, terms and methods. ▪ Better integration & collaboration within and among FNs. ▪ More focused and eective capacity building.To that end, all participating FNs are encouraged to adopt a “core” strategic framework that incor-porates a set of “core” common objectives and key performance indicators (KPIs). Such a collaborative approach would: ▪ Reduce the eort required to prepare a CISP and keep it up to date. ▪ Facilitate work and knowledge sharing. ▪ Have a valid and more consistent way to bench-mark performance with other communities.Of course, FNs can expand beyond the “core” frame-work to include objectives and KPIs that reect spe-cial local circumstances.4. Developing the CISP Strategic FrameworkA sample Strategic Framework is in Appendix A. The following provides guidance on the role of the Stra-tegic Framework, how to develop it step-by-step and how to apply it to day-to-day activities.Purpose: ▪ The CISP Strategic Framework: » Describes how services should be perceived by the community – the Vision. » Identies specic service outcomes to be achieved – Service Objectives. » Identies metrics for service quantity/quality – Key Performance Indicators (KPIs).Applying the CISP Strategic FrameworkFirst and foremost, the scope and cost of services, as well as how they are delivered, need to align with the Comprehensive Community Plan (CCP). To accom-plish that, the infrastructure Service Vision must align and be compatible with the Community Vision as expressed in the CCP. The service objectives then must be clearly linked to their related CCP objectives. Figure 2 shows that the Community Objectives and related Service Objectives t on the top line and provide context for service delivery – e.g. what, how, when and at what cost. Once established, objectives should be relevant for 5 to 10 years and should provide a sound basis for To To be useful, objectives must be measurable through the use of Key Performance Indicators (KPIs). Section (e), below provides guidance on how to select appro-priate KPIs – often referred to as Levels of Service (LOS).

Guidance for Developing the Strategic Framework 41. COMMUNITY OBJECTIVES2. LEVELS OF SERVICE (LOS) (MEASURES & TARGETS)Service ObjectivesObjective 1 Objective 2 Objective 3 Objective 4 Objective “n”Figure 2. Community Infrastructure Services Plan - Practice Template3. PERFORMANCE (ACTUAL vs. LOS)4. PERFORMANCE GAPS (ACTUAL vs. LOS)5. STRATEGIES (ADDRESS GAPS)6. ACTIONS (ADDRESS GAPS)7. ONGOING SERVICE MEASUREMENT & REPORTING

Guidance for Developing the Strategic Framework5With objectives and LOS in place, ongoing manage-ment and operational activities identify key service issues. Dierences between actual and target per-formance represent gaps – line 4 in Figure 2 – to be addressed in work plans. Strategies and actions (lines 5 and 6 in Figure 2) are undertaken to address these gaps and to move performance closer to target. Usually, the most cost-eective work plan involves a combination of actions involving new policies, capacity building, new or upgraded facilities, new technology and changes in operations and maintenance practices.In eect, all infrastructure service strategies and actions – policy, technical, legal, nancial and opera-tional – should be identied and addressed through the CISP. The degree to which an individual strategy or action improves performance provides a basis for its cost eectiveness and priority.At any point in time, there is usually insucient funding to meet all needs. So, the CISP provides the means for deciding the most cost-eective program within available resources; appropriate trade-os have to be made between service quality, cost and risk.For example, if there are insucient funds, either the LOS must be reduced, some services must be cancelled and/or some investments must be delayed. Alternatively, if the LOS must be increased, then there must rst be sucient money to pay for both the capital and ongoing costs for operations and maintenance (O&M).Establishing the Community and Service VisionThe Service Vision describes how services should be perceived by users and stakeholders and provides the basis for identifying specic service outcomes to be achieved. The Vision reects community values and usually has Economic, Social and Environmental components.To ensure that the CISP properly links to the commu-nity plan, start by documenting, usually verbatim, the Community Vision, Mission, Objectives and Values from the Comprehensive Community Plan (CCP).Next, establish a Service Vision that links directly to and incorporates all key aspects of its CCP counter-part. For example:“Our Community Infrastructure Services are aordable and sustainable; services provide good value for money; we provide excellent customer service; we are innova-tive, transparent and accountable; we are good stew-ards of our lands and the environment; and we apply good management and operational practices.”Within the Vision, “stewardship” means doing more than the minimum to protect and enhance lands and the environment.Establishing Community and Service ObjectivesObjectives are the desired outcomes (“ends”) to be achieved through the work plan. To align with the Community and Service Vision, there are usually eco-nomic, social and environmental objectives.There should be at least one Service Objective estab-lished for each Community Objective.Care should be taken to distinguish between “ends” and “means” when setting objectives. For example: ▪ Meeting discharge standards is a “means” towards the “end” of achieving a healthy environment. ▪ Eective asset maintenance is a “means” towards the “end” of achieving lowest life cycle cost.Objectives are often competing and cannot all be completely achieved. Decision making must balance needs for one objective against another to get the most cost-eective result.Sample objectives are (CO = Community Objective; IO = Infrastructure Services Objective): ▪ CO #1 – Services are viable and sustainable over the long term ▪ CO #2 – Services enable sustainable economic development and prosperity

6Guidance for Developing the Strategic Framework ▪ CO #3 – A thriving community » IO #1 - Sucient Infrastructure services » IO #2 - Reliable Infrastructure services » IO #3 - Meet infrastructure service levels at the lowest sustainable cost » IO #4 – Infrastructure services are nancially viable long term » IO #5 - Protect public health » IO #6 – Protect public safety » IO #7 - Strong management organization and practices ▪ CO #4 – Services sustain lands and the environ-ment over the long term » IO #1 – Infrastructure services meet land man-agement policies and standards » IO #2 – Infrastructure services meet environ-mental standards ▪ CO #5 – The Community is pleased with commu-nity services » IO #1 – The community is satised with infra-structure services » IO #2 – The community is knowledgeable and current on infrastructure services » IO #3 – The community is actively engaged in key infrastructure service decisionsEstablishing Levels of Service (KPIs)Levels of Service (LOS) are key performance indica-tors (KPIs) that relate to the quantity and quality of services delivered to customers. LOS are the core of an eective performance management practice and can be set by policy and/or by regulation.Usually, there are one or more specic, measurable LOS for each service objective. ▪ Output LOS measure service quantity and quality – e.g. costs, compliance record, water pressures delivered, reliability and safety record. ▪ Input LOS measure the quantity and quality of ser-vice inputs – e.g. frequency of asset inspections; maintenance; safety training; capacity building; enhanced technology; and improved business practices and systems.Eective management involves an appropriate mix of output and input LOS.To promote eectiveness, there is typically a nested structure of LOS as follows: ▪ Strategic – for use by senior management for the whole business; typically, a dashboard with 1 to 3 output LOS for each objective. ▪ Tactical – for use by managers and operations sta; mainly output with some input LOS that “roll up” to the Strategic Level. ▪ Operational – for use by managers and operations sta; mainly input with some output LOS that “roll up” to the Tactical Level.LOS should meet the following six criteria: ▪ Accuracy – should accurately measure perfor-mance. ▪ Practicality – data for the measure should be ob-jective and easy to obtain. ▪ Understandability – the measure should have a clear meaning to customers, regulators, manage-ment and sta. ▪ Reliability – measurements are reliable. ▪ Relevance to Work Tasks – the measure should adequately describe the eects of a broad range of tasks so that the relative costs and benets can be assessed. ▪ Scalability – the measure should be meaningful at a variety of scales. ▪ Resistant to undesirable behaviour – the measure should not be vulnerable if people try to “beat the system.”Setting Performance TargetsPerformance targets are the quantied service out-comes to be achieved through good management and operational practices. Selected targets should be relevant and be reasonably achievable within the community’s policy, funding and capacity. Sample targets for each objective are in Appendix A.

Guidance for Developing the Strategic Framework75. CISP Strategic Framework – Inputs & OutputsTypical input information for the Strategic Frame-work is: ▪ Comprehensive Community Plan (CCP). ▪ Economic Development Plan. ▪ Land Use Plan. ▪ Asset management plan. ▪ Community engagement and stakeholder survey results.Typical outputs from developing the Strategic Frame-work are: ▪ Relevant Community Objectives – only some Com-munity Objectives will be relevant to infrastruc-ture services. ▪ Infrastructure Service Vision. ▪ Infrastructure Service Objectives – specic service outcomes to be achieved. ▪ Adopted Levels of Service (KPIs) to be met.6. Developing the CISP Strategic Framework – Tips and TricksKey things to consider when developing the CISP Strategic Framework include: ▪ Where there is no established Community Vision, establish a Service Vision anyway along the lines of the example provided here; that will get the process started on the right track. The Service Vision can be tweaked later as needed when a Community Vision is adopted. ▪ Always start simply with, at least, Strategic (whole business) LOS to ensure an eective link to the CCP; once a basic performance management approach is well established, the structure can be expanded to include tactical and operational LOS. Starting with a structure that is too complicated can be time consuming and discouraging. ▪ When starting o, carefully select meaningful LOS (KPIs) but don’t overthink the process; when un-derway, users will see what works and doesn’t and can adjust accordingly – including adding, deleting or changing LOS. ▪ When starting o, set initial performance targets that seem reasonable to test the process; if the targets are too high or too low they can be adjust-ed over time through experience.

8Guidance for Developing the Strategic FrameworkTable 1. SFN Community Infrastructure Service ObjectivesCO #1 – Services are viable and sustainable over the long termCO #2 – Services enable sustainable economic development and prosperityCO #3 – A thriving communitySucient infrastructure services ▪ 100% of residents and businesses are connected to water and sewer ▪ Water and sewer assets have capacity to handle > 5 years of planned growth in the Community ▪ Drainage has capacity for the 10-year storm without property damage ▪ Garbage pickup once/two weeks ▪ Green waste pickup once/week ▪ Recycling pickup once/week ▪ Buildings are aesthetically pleasing ▪ Buildings provide the right amount and quality of space to meet current and future demand ▪ All development is readily accessible by roadReliable infrastructure services ▪ Assets for each service have a combined condition index > 7 ▪ < 7 water main breaks/100km ▪ < 3 blocked sewers/100km ▪ Potholes > 8 cm repaired once/year ▪ Cracks > 5 cm sealed once/year ▪ Street lights repaired within 1 month of failure ▪ Buildings may be occupied 364 days/year ▪ Assets are protected against damage, unwanted access and theft ▪ All community infrastructure meets current earthquake standardsMeet infrastructure service levels at the lowest sustainable cost ▪ Unplanned maintenance costs < 15% of total maintenance costs ▪ Water O&M < $450/residential unit/year ▪ Sanitary sewer O&M < $260/residential unit/year ▪ Drainage O&M < $90/residential unit/year ▪ Garbage disposal < $160/residential unit/year ▪ Road maintenance < $9,000/lane km/year ▪ Street light O&M < $TBD/head/year ▪ Building maintenance < $160/sq.m/year ▪ Building energy < $TBD/sq.m/yearInfrastructure Service Vision:“Our Community Infrastructure Services are aordable and sustainable; services provide good value for money; we provide excellent customer service; we are innovative, transparent and accountable; we are good stewards of our lands and the environment; and we apply good management and operational practices.”

9Guidance for Developing the Strategic FrameworkInfrastructure services are nancially viable long termCost Recovery Ratio > 1.0 ***(total annual revenues eligible for O&M / total annual infrastructure operating costs) » Revenues are from all sources and must be eligible for O&M expenditures » Costs are all annual infrastructure direct & indirect expenses plus depreciationDebt Service Ratio > 1.0 *** (total annual revenues / (total annual infrastructure operating + debt service costs) » Revenues are from all sources and must be eligible for O&M and capital expenditures » Costs are all annual infrastructure operating direct & indirect expenses plus interest and principal repayments for long-term debt » Ratio value depends on debt policy and should be adjusted accordinglyCapital Investment Ratio: 5-year rolling avg. > 0.02 ****(total annual capital investment/total replacement cost of existing infrastructure) » Capital investment is total amount of capital spent, or contributed to reserves, for the current, or future, repair, rehabilitation or replacement of existing infrastructure » Total replacement cost is the estimated current cost of replacing all existing infrastruc-ture today to an equivalent standardDeferred Capital Maintenance Ratio – 5-year rolling average > 0.95 *****(Total net book value of existing infrastructure + total committed funding for repairing/replac-ing existing infrastructure) / total replacement cost of existing infrastructure) » Deferred capital maintenance (commonly known as “backlog”) is the total, accumulated liability (in current dollars) for the repair, rehabilitation or replacement of existing infra-structure. » Total replacement cost is the estimated current cost of replacing all existing infrastruc-ture today to an equivalent standard » In terms of Tangible Capital Asset (TCA) accounting: » Net book value is the undepreciated capital cost of existing infrastructure (net of any impairment recorded) measured relative to original construction cost (i.e. “cost base”) » Accumulated depreciation is the proportion of existing infrastructure capital cost “consumed” in providing services to the current date, measured in terms of service life and “cost base” ▪ The dierence between total book value and total replacement cost of existing infrastruc-ture represents an accumulated liability to be funded as and when infrastructure repairs, rehabilitation or replacement are required ▪ Total Committed Funding means the amount of secure capital that SFN can readily access as and when required for infrastructure repairs, rehabilitation and replacements – e.g. capi-tal reserves; access to approved debt

10Guidance for Developing the Strategic FrameworkProtect public health ▪ 100% compliance with public health standards ▪ Zero health hazardsProtect public safety ▪ Lost hours due to eld accidents < 5/1000 eld labour hours ▪ 100% compliance with Worksafe BC ▪ Zero safety hazardsStrong management organization and practices ▪ Eective organization structure ▪ Eective service policies and practices ▪ Eective working relationships among relevant Depts. ▪ Eective capacity building ▪ Sta are qualied for their jobs ▪ > 60% of service labour hours are by SFN MembersInfrastructure services meet land management policies and standards ▪ 100% compliance with land management policies and standardsInfrastructure services meet environmental standards ▪ 100% compliance with environmental standardsThe community is satis-ed with infrastructure services ▪ Surveys show > 75% satisfaction with Infrastructure ServicesThe community is knowl-edgeable and current on infrastructure services ▪ Community members can readily access up-to-date information on infra-structure servicesThe community is actively engaged in key infrastruc-ture service decisions ▪ Key infrastructure serve policies and projects are subject to sucient com-munity inputCO #4 – Services sustain lands and the environment over the long termCO #5 – The Community is pleased with community services

Guidance for Developing the Strategic Framework11*= Condition ratings:1-3 indicates Poor condition4-6 indicates Fair condition7-9 indicates Good condition10 indicates New condition**= Sta productivity measures the number of paid hours spent doing work tasks vs. hours spent for vacation, training, sick time, statutory holidays, etc.***= If total annual eligible revenues don’t cover total annual infrastructure operating costs, then any planned annual maintenance will typically need to be deferred to a future period when additional revenue is available. This deferral can result in reduced future service quality and premature infrastructure deterio-ration. Also, obligations to lenders may not be met.****= Insucient reinvestment results in one or more of: reduced service quality; premature in-frastructure deterioration; higher costs; spikes in funding requirements. The value – 0.02 – represents a 50-year weighted average infrastructure service life. Each First Nation should adopt a target specic to its community based on the weighted average service life of its infrastructure portfolio; for example, if the weighted average service life is 40 years, the target would be 0.025 (1/40). This would establish an annual capital investment target of at least 1/40th of the estimated replacement value of the First Nations infrastructure.*****= To sustain existing infrastructure, First Na-tions must have ready, secure access to sucient nancial capital as and when required to cover costs for infrastructure repairs, rehabilitation and replace-ments. So, Total Committed Funding should be as close as practical to the dierence between total replacement cost and total book value.The lower the Deferred Capital Maintenance (DCM) Ratio, the bigger the funding gap and the harder it becomes to catch up with sucient funds to keep infrastructure in good enough condition to deliver services of the quality the community requires.For context: ▪ DCM Ratio in the range 0.95 to 1.00 is good ▪ DCM Ratio in the range 0.90 to 0.95 is fair ▪ DCM Ratio in the range 0.70 to 0.90 is poor ▪ DCM < 0.70 is criticalDeferring capital maintenance results in one or more of: reduced service quality; premature infrastructure deterioration; higher future costs; unplanned spikes in funding requirements.