Asset Management Plan

Transcription

1 City of Mitcham Stormwater Asset Management Plan Scenario 1 Version 8 June 2015 FINAL City of Mitcham STORMWATER ASSET MANAGEMENT PLAN

2 Document Control Document ID : Mitcham SW AMP Dec14.doc Rev No Date Revision Details Author Reviewer Approver 1 30/9/14 Initial incomplete draft SW (AE) 2 12/11/14 Draft complete plan less annexures SW (AE) 3 12/12/14 Input amended to account for all Capital expenditure as new rather than previous split of new / renew 4 21/01/15 Amended organisational structure, minor changes to exec summary 5 5/03/15 Definitions added for pits and pipes in section 2.1 SW (AE) SW (AE) JR JR SW (AE) JR JR 6 17/08/15 Approved as final by Council on 23 June, 2015 SW (AE) JR JR Copyright 2012 All rights reserved. The Institute of Public Works Engineering Australia.

3 - 1 - TABLE OF CONTENTS 1. EXECUTIVE SUMMARY... 2 What does it Cost?... 2 What we will do... 2 Managing the Risks... 2 Confidence Levels... 2 The Next Steps INTRODUCTION Background Goals and Objectives of Asset Management Plan Framework Core and Advanced Asset Management Community Consultation LEVELS OF SERVICE Customer Research and Expectations Legislative Requirements Current Levels of Service Desired Levels of Service FUTURE DEMAND Demand Forecast Changes in Technology Demand Management Plan Asset Programs to meet Demand LIFECYCLE MANAGEMENT PLAN Background Data Risk Management Plan Routine Maintenance Plan Renewal/Replacement Plan Creation/Acquisition/Upgrade Plan Disposal Plan FINANCIAL SUMMARY Financial Statements and Projections Funding Strategy Valuation Forecasts Key Assumptions made in Financial Forecasts ASSET MANAGEMENT PRACTICES Accounting/Financial Systems Asset Management Systems Information Flow Requirements and Processes PLAN IMPROVEMENT AND MONITORING Performance Measures Improvement Plan Monitoring and Review Procedures REFERENCES APPENDICES Appendix A Maintenance Response Levels of Service Appendix B Projected 10 year Capital Renewal Works Program Appendix C Planned Upgrade/Exp/New 10 year Capital Works Program Appendix D Abbreviations Appendix E Glossary... 34

4 EXECUTIVE SUMMARY Context This Asset Management Plan (AMP) represents Councils first dedicated stormwater AMP. Stormwater was previously covered in the 2008 edition of the Transport AMP. It is estimated that the useful life of Councils stormwater pipes (which form the dominant asset type on this plan) is at least 100 years. The oldest current pipes have been identified at 80 years and accordingly renewal of stormwater infrastructure is not expected within the 20 year term of this plan. The Stormwater Service The Stormwater network comprises: 3415 pits (includes all stormwater inlet pits and pipe junction pits) 3780 pipe segments These infrastructure assets have a replacement value of $91.45m. What does it Cost? The projected outlays necessary to provide the services covered by this Asset Management Plan (AM Plan) includes operations, maintenance, renewal and upgrade of existing assets over the 10 year planning period is $12,835,000 or $1,283,000 on average per year. Estimated available funding for this period is $12,714,000 or $1,271,000 on average per year which is 99% of the cost to provide the service. This is a funding shortfall of $12,000 on average per year. Projected expenditure required to provide services in the AM Plan compared with planned expenditure currently included in the Long Term Financial Plan are shown in the graph below. What we will do We plan to provide Stormwater services for the following: Operation, maintenance, renewal and upgrade of pits & pipes to meet service levels set by Council in annual budgets. $10.5m of upgrades to stormwater infrastructure within the 10 year planning period. Managing the Risks There are risks associated with providing the service and not being able to complete all identified activities and projects. We have identified major risks as: Existing system being under capacity in places Potential under estimation of funding required to upgrade network where appropriate Unknown condition of network Changing environment We will endeavour to manage these risks within available funding by: Preparing a stormwater management plan Undertaking some planned CCTV inspections of stormwater conduits Confidence Levels This AM Plan is based on moderate level of confidence information. The Next Steps The actions resulting from this asset management plan are: Undertaking the development of a stormwater management plan Reviewing the stormwater asset database Incorporation of WSUD and quality measures in asset renewals and upgrades Initiate controls on development for stormwater runoff

5 INTRODUCTION 2.1 Background This asset management plan is to demonstrate responsive management of assets (and services provided from assets), compliance with regulatory requirements, and to communicate funding needed to provide the required levels of service over a 20 year planning period. The asset management plan follows the format for AM Plans recommended in Section of the International Infrastructure Management Manual 1. The asset management plan is to be read with Council s Asset Management Policy, Asset Management Strategy and the following associated planning documents: City of Mitcham, Strategic Plan City of Mitcham, Long Term Financial Plan City of Mitcham, Business Plan This infrastructure assets covered by this asset management plan are shown in Table 2.1. Table 2.1: Assets covered by this Plan Asset category Dimension Replacement Value Pits (includes all stormwater inlet pits and pipe junction pits) 3415 off $11.88m Pipes 3780 off $79.57m TOTAL Where: $91.45m Pits; are typically comprised of side entry pits, junction boxes and headwalls. The purpose of which are to convey stormwater into or out of the underground system or direct stormwater from one underground pipe into another. Some pipe junction pits also act as a means of maintenance access to the underground system. Pipes; are underground conduits through which the stormwater flows. They are generally circular or rectangular (box culverts) in cross section. 2.2 Goals and Objectives of Asset Management The Council exists to provide services to its community. Some of these services are provided by infrastructure assets. Council has acquired infrastructure assets by purchase, by contract, construction by council staff and by donation of assets constructed by developers and others to meet increased levels of service. Council s goal in managing infrastructure assets is to meet the required level of service in the most cost effective manner for present and future consumers. The key elements of infrastructure asset management are: Taking a life cycle approach, Developing cost-effective management strategies for the long term, Providing a defined level of service and monitoring performance, Understanding and meeting the demands of growth through demand management and infrastructure investment, Managing risks associated with asset failures, Sustainable use of physical resources, Continuous improvement in asset management practices. 2 1 IPWEA, 2011, Sec 4.2.6, Example of an Asset Management Plan Structure, pp

6 - 3 - The goal of this asset management plan is to: Document the services/service levels to be provided and the costs of providing the service, Communicate the consequences for service levels and risk, where desired funding is not available, and Provide information to assist decision makers in trading off service levels, costs and risks to provide services in a financially sustainable manner. This asset management plan is prepared under the direction of Council s vision, mission, goals and objectives. Council s vision is: A healthy, inclusive and prosperous community, living and working in harmony with the environment Relevant organisation goals and objectives and how these are addressed in this asset management plan are: Table 2.2: Organisation Goals and how these are addressed in this Plan Goal Objective How Goal and Objectives are addressed in Asset management plan Healthy Environment A green and bio diverse City characterised by clean air, land, water and responsible consumption Objective 14. Water Smart (we save water) Healthy Catchments and waterways that protect the environment, people and property Objective 15. Responsible Consumption and Waste Minimisation (we make the most of what we have) Natural resources are conserved and waste is minimised through avoidance, reuse, recycling or recovery. Facilitate the development of a strategic City-wide approach to the identification, funding and implementation of new and improved stormwater infrastructure projects, including the development of Stormwater Management Plans Facilitate the extension of stormwater systems at various location to address inundation and property flooding Enterprising City A strong and resilient local economy that supports business and attracts investment Excellence in Government A Council with strong leadership that values its people, customers and partners Objective 18. Strategic Projects and Infrastructure Objective 19. Financial Sustainability (we are good with money) Responsible management of Council s financial resources and community assets, and the equitable distribution of costs now and in the future Facilitate the Brown Hill Keswick Creek Stormwater Management Project to reduce flooding and improve stormwater reuse in accord with the approved Stormwater Management Plan (SMP) Review service delivery in consultation with the community to drive service level change Ensure appropriate funding is available to enable timely woodland asset renewal and maintenance Renew or refurbish open space assets as required to ensure effective and 2 IPWEA, 2006, IIMM Sec 1.1.3, p 1.3.

7 - 4 - Goal Objective How Goal and Objectives are addressed in Asset management plan Objective 20. Service efficiency & effectiveness (we provide value for money) Services, facilities and infrastructure assessed for community need and provided where Council is in the best position to do so efficiently and cost effectively or through partnerships Objective 21. Good Governance (we do things right) Accountable governance and robust corporate systems for decision making and risk management Objective 23. Customer Focus (we focus on you) An organisation focused on its internal and external customers efficient management and use of resources 2.3 Plan Framework Key elements of the plan are Levels of service specifies the services and levels of service to be provided by council. Future demand how this will impact on future service delivery and how this is to be met. Life cycle management how the organisation will manage its existing and future assets to provide the required services Financial summary what funds are required to provide the required services. Asset management practices Monitoring how the plan will be monitored to ensure it is meeting the organisation s objectives. Asset management improvement plan 2.4 Core and Advanced Asset Management This asset management plan is prepared as a first cut core asset management plan in accordance with the International Infrastructure Management Manual 3. It is prepared to meet minimum legislative and organisational requirements for sustainable service delivery and long term financial planning and reporting. Core asset management is a top down approach where analysis is applied at the system or network level. 2.5 Community Consultation This core asset management plan is prepared to facilitate community consultation initially through feedback on public display of draft asset management plans prior to adoption by Council. Future revisions of the asset management plan will incorporate community consultation on service levels and costs of providing the service. This will assist Council and the community in matching the level of service needed by the community, service risks and consequences with the community s ability to pay for the service. 3 IPWEA, 2006.

8 LEVELS OF SERVICE 3.1 Customer Research and Expectations Council has not carried out any research on customer expectations. This will be investigated for future updates of the asset management plan. 3.2 Legislative Requirements Council has to meet many legislative requirements including Australian and State legislation and State regulations. Relevant legislation is shown in Table 3.2. Legislation Local Government Act Local Government ( Stormwater Management ) Amendment Act 2007 Table 3.2: Legislative Requirements Requirement Sets out role, purpose, responsibilities and powers of local governments including the preparation of a long term financial plan supported by asset management plans for sustainable service delivery. Establishes the Stormwater Management Authority which facilitates and coordinates stormwater management planning in councils. NRM Act Natural resource management requirement to manage catchments, including stormwater. Environment Protection Act (Marine and Water quality) Development Act 1993 Highways Act 1926 Coastal Protection Act 1972 Occupational Health, Safety and Welfare Act Current Levels of Service Council has defined service levels in two terms. To provide for the protection of the environment and related areas and legal obligations relating to stormwater pollution prevention. Development and building approval and requirements to control stormwater from developments. State Government and Council responsibility for infrastructure relating to State Government Arterial Roads and Council Roads abutting the Arterial Road network. An Act to make provision for the conservation and protection of the beaches and coast of the State Proactive in occupational health, safety and welfare practices in all undertakings of Council. Community Levels of Service relate to the service outcomes that the community wants in terms of safety, quality, quantity, reliability, responsiveness, cost effectiveness and legislative compliance. Community levels of service measures used in the asset management plan are: Quality Function Safety How good is the service? Does it meet users needs? Is the service safe? Technical Levels of Service - Supporting the community service levels are operational or technical measures of performance. These technical measures relate to the allocation of resources to service activities that the council undertakes to best achieve the desired community outcomes. Technical service measures are linked to annual budgets covering:

9 - 6 - Operations the regular activities to provide services such as opening hours, cleansing frequency, mowing frequency, etc. Maintenance the activities necessary to retain an assets as near as practicable to its original condition (eg road patching, unsealed road grading, building and structure repairs), Renewal the activities that return the service capability of an asset up to that which it had originally (eg frequency and cost of road resurfacing and pavement reconstruction, pipeline replacement and building component replacement), Upgrade the activities to provide an higher level of service (eg widening a road, sealing an unsealed road, replacing a pipeline with a larger size) or a new service that did not exist previously (eg a new library). Council s current service levels are detailed in Table 3.3. Table 3.3: Current Service Levels Key Performance Measure Level of Service Objective COMMUNITY LEVELS OF SERVICE Quality Function Safety Provide an efficient method of collection and environmentally friendly disposal of stormwater runoff Provide an effective stormwater drainage network Provide a safe stormwater drainage network TECHNICAL LEVELS OF SERVICE Operations & Maintenance Programmed maintenance to clean drain and pit, street sweeping and empting GPTs. Performance Measure Process Annual community consultation feedback The Council provides and maintains stormwater drainage and gutters Frequency of property flooding. Number of customer requests/complaints, related to drain hazard Number of customer requests/complaints, related to drain cleaning Number of customer service requests relating to maintenance of drains Desired Level of Service Performance gap 20% Reduce the potential for inundation through construction of targeted stormwater upgrade works Current Level of Service Performance gap % % % Potential for isolated properties to become inundated in extreme events 110 9/ / / / / / / / /13 91 Budget $243k by 2013 (indexed for new infrastructure) $220k Renewal Activities that review the existing condition and capacity of the drainage network CCTV survey Targeted CCTV inspections CCTV inspections ad hoc

10 - 7 - Key Performance Measure Level of Service Objective Performance Measure Process Desired Level of Service Current Level of Service Upgrade/New Activities that improve/upgrade the existing drainage network to meet 1 in 5 ARI storm design requirements and to reduce hazardous flooding from 1 in 100 ARI storm. Stormwater Management Plan and Flood Plain Mapping to identify drainage network deficiencies. Implement capital works program based on LTFP New infrastructure as identified in Councils LTFP Budget $914k 2022 (varies between) $1,026k Desired Levels of Service At present, indications of desired levels of service are obtained from various sources including residents feedback to Councillors and staff, service requests and correspondence. Council has yet to quantify desired levels of service. This will be done in future revisions of this asset management plan.

11 FUTURE DEMAND 4.1 Demand Forecast Factors affecting demand include population change, changes in demographics, seasonal factors, vehicle ownership, consumer preferences and expectations, economic factors, agricultural practices, environmental awareness, etc. Demand factor trends and impacts on service delivery are summarised in Table 4.1. Table 4.1: Demand Factors, Projections and Impact on Services Demand factor Present position Projection Impact on services Catchment Management Climate Change Urban consolidation Direct stormwater discharge into watercourse environment with some pollution control measures and limited stormwater reuse. Awareness that climate change is occurring and its impact on water supply and usage, increase sea levels, changes in rainfall intensities and storm events. Much of the Council area is comprised of single dwellings on traditional 600m2 1000m2 allotments 4.2 Changes in Technology Regulated controls on quality of stormwater discharging into watercourse environment and stormwater reuse. Rising sea levels, decreasing water supply and increasing water demand. Onsite and catchment stormwater reuse and change to parks and gardens plantings due to water restrictions. Some urban consolidation is taking place, particularly in the western suburbs. This trend is likely to continue across the Council. There has been a demonstrated movement in site coverage from 1995 (45%) to 2013 (60%). Technology changes are forecast to have little effect on the delivery of services covered by this plan. Increase in infrastructure to control pollutants, capture and reuse stormwater. Impacts on coastal environment, reduction in stormwater outfall capacity, stormwater capture and reuse infrastructure. Greater impervious area through urban consolidation has the potential to cause local flooding problems 4.3 Demand Management Plan Demand for new services will be managed through a combination of managing existing assets, upgrading of existing assets and providing new assets to meet demand and demand management. Demand management practices include non-asset solutions, insuring against risks and managing failures. Non-asset solutions focus on providing the required service without the need for the council to own the assets. Examples of non-asset solutions include providing services from existing infrastructure such as aquatic centres and libraries that may be in another council area or public toilets provided in commercial premises. Opportunities identified to date for demand management are shown in Table 4.3. Further opportunities will be developed in future revisions of this asset management plan.

12 - 9 - Table 4.3: Demand Management Plan Summary Service Activity Improve drainage network to provide 5 year ARI, within existing drainage areas Demand Management Plan Undertake studies to determine areas prone to flooding Stormwater Management Plan Undertake study to look at potential for alternatives to traditional stormwater collection and disposal practices. 4.4 Asset Programs to meet Demand The new assets required to meet growth will be acquired free of cost from land developments and constructed/acquired by the organisation. New assets constructed/acquired by the organisation are discussed in Section 5.5. The cumulative value of new contributed and constructed asset values are summarised in Figure 1. The new assets required to meet growth will be acquired free of cost from land developments and constructed/acquired by Council. The cumulative new contributed and constructed asset values are summarised in Figure 1. Figure 1: Cumulative Upgrade and New Assets to meet The above graph reflects proposed construction of new stormwater infrastructure / upgrades to improve quality and function through new investment. Approximately $20m of new infrastructure is proposed to be constructed over the period of the plan. The graph does not include donated infrastructure which is considered to be minimal. Acquiring these new assets will commit the organisation to fund ongoing operations, maintenance and renewal costs for the period that the service provided from the assets is required. These future costs are identified and considered in developing forecasts of future operations, maintenance and renewal costs in Section 5.

13 LIFECYCLE MANAGEMENT PLAN The lifecycle management plan details how Council plans to manage and operate the assets at the agreed levels of service (defined in Section 3) while optimising life cycle costs. 5.1 Background Data Physical parameters The assets covered by this asset management plan are shown in Table 2.1. The network comprises predominately pits and pipes associated with an underground stormwater drainage network. The Council has two distinct topographies comprising the hills and plains. The hills network can in places be more informal and function via swales and overland flow paths to creek networks whereas the plains network comprises the more formal network of side entry pits and underground drainage pipes. The age profile of the assets include in this AM Plan is shown in Figure 2. Figure 2: Asset Age Profile The peak in age between 1968 and 1974 is associated with the construction of the South Western suburbs drainage scheme. Council maintains a GIS database of the stormwater network which requires updating and verification Asset capacity and performance Council s services are generally provided to meet design standards where these are available. Locations where deficiencies in service performance are known are detailed in Table

14 Table 5.1.2: Known Service Performance Deficiencies Location Stormwater drainage network Stormwater quality improvements Stormwater harvesting and reuse Service Deficiency Under capacity pipe and pit drainage, lack of drainage system and property flooding. Not all stormwater outlets have pollution control devices. Limited use of WSUD devices Limited infrastructure installed The above service deficiencies were identified from catchment studies or alternatively customer requests via flooding incidents Council proposes to undertake the preparation of a stormwater management plan which will identify in some detail required upgrades to stormwater infrastructure over the long term Asset condition Council does not currently have details on the condition of its stormwater drainage network Asset valuations The value of assets recorded in the asset register as at June 2013 covered by this asset management plan is shown below. Assets were last revalued at June Current Replacement Cost $91,450,000 Depreciable Amount $91,450,000 Depreciated Replacement Cost $59,200,000 Annual Depreciation Expense $914,000 Council s sustainability reporting reports the rate of annual asset consumption and compares this to asset renewal and asset upgrade and expansion. Asset Consumption 1% (Depreciation/Depreciable Amount) Asset renewal 0% (Capital renewal exp/depreciable amount) Annual Upgrade/New 1.1% (Capital upgrade exp/depreciable amount) Annual Upgrade/New 1.1% (including contributed assets) This AMP has identified that no renewals are required for stormwater assets within the next 20 years due to the age of the assets and predicted useful life of 100 years. Accordingly Council is currently renewing assets at 0% of the rate they are being consumed and increasing its asset stock by 1.1% each year associated with works that are improving Quality and Function through new investment.

15 Risk Management Plan An assessment of risks 4 associated with service delivery from infrastructure assets has identified critical risks that will result in loss or reduction in service from infrastructure assets or a financial shock to the organisation. The risk assessment process identifies credible risks, the likelihood of the risk event occurring, the consequences should the event occur, develops a risk rating, evaluates the risk and develops a risk treatment plan for non-acceptable risks. Critical risks, being those assessed as Very High - requiring immediate corrective action and High requiring prioritised corrective action identified in the Infrastructure Risk Management Plan are summarised in Table 5.2. Table 5.2: Critical Risks and Treatment Plans Service or Asset at Risk Asset service is below Technical Level of Service/Community expectation Urban infill & development Climate change resilient south plan What can Happen -Under design capacity of drainage system causing flooding -Under estimated funding for upgrading and renewal capital works -Under estimated or unknown condition and life cycle performance of asset resulting in structural failure -Under estimated funding for asset renewal or major maintenance -Under design of asset -Changing environmental and traffic loading condition -Maintenance level below Technical Level of Service/Standard Risk Rating (VH, H) H Risk Treatment Plan Prepare Stormwater Management Plan (SWMP) which addresses these issues Link SWMP outcomes with Strategic Plan, IAMP,LTFP, Development and Operational Plan Annual CCTV inspection and condition rating of stormwater assets. Associated Costs $40,000 pa (SWMP) $10,000 (annual CCTV) 5.3 Routine Maintenance Plan Routine maintenance is the regular on-going work that is necessary to keep assets operating, including instances where portions of the asset fail and need immediate repair to make the asset operational again Maintenance plan Maintenance includes reactive, planned and specific maintenance work activities. Reactive maintenance is unplanned repair work carried out in response to service requests and management/supervisory directions. Planned maintenance is repair work that is identified and managed through a maintenance management system (MMS). MMS activities include inspection, assessing the condition against failure/breakdown experience, prioritising, scheduling, actioning the work and reporting what was done to develop a maintenance history and improve maintenance and service delivery performance.

16 Specific maintenance is replacement of higher value components/sub-components of assets that is undertaken on a regular cycle including repainting, building roof replacement, etc. This work generally falls below the capital/maintenance threshold but may require a specific budget allocation. Actual past maintenance expenditure is shown in Table Year Table 5.3.1: Maintenance Expenditure Trends Maintenance Expenditure 2013/14 $357, /13 $337, /12 $289,600 Current maintenance expenditure levels are considered to be adequate to meet required service levels. Future revision of this asset management plan will include linking required maintenance expenditures with required service levels. Assessment and prioritisation of reactive maintenance is undertaken by operational staff using experience and judgement Standards and specifications Maintenance work is carried out in accordance with the following Standards and Specifications. Local Government, Road Traffic, Australian Road Rules, Environmental Protection, Native Vegetation. Occupation Health and Safety, Coastal Protection, NRM and Highways Acts where applicable. DTEI Transport Services Division Standards and Specifications where applicable Relevant Australian Standards Council Standards and Specifications for works Summary of future operations and maintenance expenditures Future operations and maintenance expenditure is forecast to trend in line with the value of the asset stock as shown in Figure 4. Note that all costs are shown in 2013 dollar values.

17 Figure 4: Projected Operations and Maintenance Expenditure Deferred maintenance, i.e. works that are identified for maintenance and unable to be funded are to be included in the risk assessment process in the infrastructure risk management plan. Maintenance is funded from the operating budget and grants where available. This is further discussed in Section Renewal/Replacement Plan Renewal expenditure is major work which does not increase the asset s design capacity but restores, rehabilitates, replaces or renews an existing asset to its original service potential. Work over and above restoring an asset to original service potential is upgrade/expansion or new works expenditure Renewal plan Assets requiring renewal are identified from one of three methods provided in the Expenditure Template. Method 1 uses Asset Register data to project the renewal costs for renewal years using acquisition year and useful life, or Method 2 uses capital renewal expenditure projections from external condition modelling systems (such as Pavement Management Systems), or Method 3 uses a combination of average network renewals plus defect repairs in the Renewal Plan and Defect Repair Plan worksheets on the Expenditure template. Method 1 was used for this asset management plan. The ranking criteria used to determine priority of identified renewal proposals is detailed in Table

18 Table 5.4.1: Renewal Priority Ranking Criteria Where; Criteria Weighting risk 25 technical 30 social 10 environmental 15 corporate 20 Total 100% Risk priority is assessed in accordance with the AU/NZ risk management standard Technical priority is based on the condition of the asset Social is based on whether the particular initiative contributes toward the objectives of Council s Social / Community Plan Environmental priority is linked to whether the particular initiative contributes toward the objectives of Council s environmental programs Corporate is based on whether the project represent commitments through a Council resolution or being in the strategic plan Renewal standards Renewal work is carried out in accordance with the following Standards and Specifications. Local Government, Road Traffic, Australian Road Rules, Environmental Protection, Native Vegetation. Occupation Health and Safety, Coastal Protection, NRM and Highways Acts where applicable. DTEI Transport Services Division Standards and Specifications where applicable Relevant Australian Standards Council Standards and Specifications for works Summary of projected renewal expenditure A useful life of 100 years has been assumed for all stormwater assets contained within this plan. Since Council s stormwater network is not older than 80 years no projected renewals are predicted over the length of this plan. It is acknowledged however that some side entry pits will be replaced during road reconstruction works which may from time to time also include the opportunistic renewal the stormwater drainage system before its time is due from condition predictions. Funds spent on renewal are unpredictable and have not been considered in this Aseet Management Plan. Renewals are to be funded from capital works programs and grants where available. This is further discussed in Section 6.2.

19 Creation/Acquisition/Upgrade Plan New works are those works that create a new asset that did not previously exist, or works which upgrade or improve an existing asset beyond its existing capacity. They may result from growth, social or environmental needs. Assets may also be acquired at no cost to the Council from land development. These assets from growth are considered in Section Selection criteria New assets and upgrade/expansion of existing assets are identified from various sources such as councillor or community requests, proposals identified by strategic plans or partnerships with other organisations. Candidate proposals are inspected to verify need and to develop a preliminary estimate. Verified proposals are ranked by priority and available funds and scheduled in future works programmes. The priority ranking criteria is detailed in Table Standards and specifications Standards and specifications for new assets and for upgrade/expansion of existing assets are the same as those for renewal shown in Section Summary of projected upgrade/new assets expenditure Projected upgrade/new asset expenditures are summarised in Figure 6. The projected upgrade/new capital works program is shown in Appendix C. All costs are shown in current 2013 dollar values. Figure 6: Projected Capital Upgrade/New Asset Expenditure New assets and services are to be funded from capital works program and grants where available. This is further discussed in Section Disposal Plan Disposal includes any activity associated with disposal of a decommissioned asset including sale, demolition or relocation. No significant stormwater assets have been identified for disposal in the preparation of this plan.

20 FINANCIAL SUMMARY This section contains the financial requirements resulting from all the information presented in the previous sections of this asset management plan. The financial projections will be improved as further information becomes available on desired levels of service and current and projected future asset performance. 6.1 Financial Statements and Projections The financial projections are shown in Figure 7 for projected operating (operations and maintenance) and capital expenditure (renewal and upgrade/expansion/new assets), net disposal expenditure and estimated budget funding. Note that all costs are shown in 2013 dollar values. Figure 7: Projected Operating and Capital Expenditure and Budget Financial sustainability in service delivery There are four key indicators for service delivery sustainability that have been considered in the analysis of the services provided by this asset category, these being the asset renewal funding ratio, long term life cycle costs/expenditures and medium term projected/budgeted expenditures over 5 and 10 years of the planning period. Asset Renewal Funding Ratio Asset Renewal Funding Ratio 5 0% The Asset Renewal Funding Ratio is calculated as: required renewals/budgeted renewals (over 10 years) In the preparation of this AMP it has been identified that no stormwater assets will require renewal based on age. 5 AIFMG, 2012, Version 1.3, Financial Sustainability Indicator 4, Sec 2.6, p 2.16

21 Long term - Life Cycle Cost Life cycle costs (or whole of life costs) are the average costs that are required to sustain the service levels over the asset life cycle. Life cycle costs include operations and maintenance expenditure and asset consumption (depreciation expense). The life cycle cost for the services covered in this asset management plan is $1,134k per year (average operations and maintenance expenditure plus depreciation expense projected over 10 years). Life cycle costs can be compared to life cycle expenditure to give an initial indicator of affordability of projected service levels when considered with age profiles. Life cycle expenditure includes operations, maintenance and capital renewal expenditure. Life cycle expenditure will vary depending on the timing of asset renewals. The life cycle expenditure over the 10 year planning period is $220k per year (average operations and maintenance plus capital renewal budgeted expenditure in LTFP over 10 years). A shortfall between life cycle cost and life cycle expenditure is the life cycle gap. The life cycle gap for services covered by this asset management plan is -$914k per year (-ve = gap, +ve = surplus). Life cycle expenditure is 19% of life cycle costs. The life cycle costs and life cycle expenditure comparison highlights any difference between present outlays and the average cost of providing the service over the long term. In the case of this stormwater asset group however renewals on the network are not required within the term of the AMP and accordingly the funding scenario proposed is prudent. Knowing the extent and timing of any required increase in outlays and the service consequences if funding is not available will assist organisations in providing services to their communities in a financially sustainable manner. This is the purpose of the asset management plans and long term financial plan. Medium term 10 year financial planning period This asset management plan identifies the projected operations, maintenance and capital renewal expenditures required to provide an agreed level of service to the community over a 10 year period. This provides input into 10 year financial and funding plans aimed at providing the required services in a sustainable manner. These projected expenditures may be compared to budgeted expenditures in the 10 year period to identify any funding shortfall. In a core asset management plan, a gap is generally due to increasing asset renewals for ageing assets. The projected operations, maintenance and capital renewal expenditure required over the 10 year planning period is $232k on average per year. Estimated (budget) operations, maintenance and capital renewal funding is $220k on average per year giving a 10 year funding shortfall of $12k per year. This indicates that Council expects to have 95% of the projected expenditures needed to provide the services documented in the asset management plan. Medium Term 5 year financial planning period The projected operations, maintenance and capital renewal expenditure required over the first 5 years of the planning period is $232k on average per year. Estimated (budget) operations, maintenance and capital renewal funding is $220k on average per year giving a 5 year funding shortfall of $6k per year. This indicates that Council expects to have 97% of projected expenditures required to provide the services shown in this asset management plan. The 10 year and 5 year underfunding identified above is due to Council not currently budgeting additional maintenance funds commensurate with the expansion of the network through the construction of new assets.

22 Asset management financial indicators Figure 7A shows the asset management financial indicators over the 10 year planning period and for the long term life cycle. Figure 7A: Financial Sustainability Indicators Providing services from infrastructure in a sustainable manner requires the matching and managing of service levels, risks, projected expenditures and funding to achieve a financial sustainability indicator of 1.0 for the first years of the asset management plan and ideally over the 10 year life of the AM Plan. Figure 8 would normally show the projected asset renewals in the 10 year planning period. Both the projected asset renewals and the budgeted renewal expenditure in the capital works program are zero however and accordingly the graph is blank. Figure 8: Projected and Budgeted Renewal Expenditure BLANK

23 Table shows the relationship between projected and budgeted renewals, both of which are zero. Year Table 6.1.1: Projected and Budgeted Renewals and Expenditure Shortfall Projected Renewals ($000) Planned Renewal Budget ($000) Renewal Funding Shortfall ($000) (-ve Gap, +ve Surplus) Cumulative Shortfall ($000) (-ve Gap, +ve Surplus) Note: A negative shortfall indicates a funding gap, a positive shortfall indicates a surplus for that year. As previously noted in this AMP no projected renewals have been identified through interrogation of the asset database due principally to the long life of stormwater assets and their relative young age. Accordingly no budget has been allocated for asset renewal, although on occasions some assets are prematurely replaced as part of stormwater capacity upgrade works Expenditure projections for long term financial plan Table shows the projected expenditures for the 10 year long term financial plan. Expenditure projections are in current (non-inflated) values. Disposals are shown as net expenditures (revenues are negative).

24 Year Table 6.1.2: Expenditure Projections for Long Term Financial Plan ($000) Operations ($000) Maintenance ($000) Projected Capital Renewal ($000) Capital Upgrade/ New ($000) Disposals ($000) , , , , , , , , , , ,043 0 Note: All projected expenditures are in 2012/13values Council s budget for stormwater maintenance is currently only $220k per year and at the point of preparing this AMP has not been indexed up in accordance with the proposed capital upgrade / new expenditure allocated within the long term financial plan. The Capital Upgrade / New expenditure is improving Quality and Function of the stormwater network through new investment.

25 Funding Strategy Projected expenditure identified in Section 6.1 is to be funded from future operating and capital budgets. The funding strategy is detailed in the organisation s 10 year long term financial plan. 6.3 Valuation Forecasts Asset values are forecast to increase as additional assets are added to the asset stock from construction and acquisition by Council and from assets constructed by land developers and others and donated to Council. Figure 9 shows the projected replacement cost asset values over the planning period in 2012/13 dollar values. Figure 9: Projected Asset Values Depreciation expense values are forecast in line with asset values as shown in Figure 10. Figure 10: Projected Depreciation Expense

26 The depreciated replacement cost (current replacement cost less accumulated depreciation) will vary over the forecast period depending on the rates of addition of new assets, disposal of old assets and consumption and renewal of existing assets. Forecast of the assets depreciated replacement cost is shown in Figure 11. The effect of contributed and new assets on the depreciated replacement cost is shown in the darker colour. Figure 11: Projected Depreciated Replacement Cost 6.4 Key Assumptions made in Financial Forecasts This section details the key assumptions made in presenting the information contained in this asset management plan and in preparing forecasts of required operating and capital expenditure and asset values, depreciation expense and carrying amount estimates. It is presented to enable readers to gain an understanding of the levels of confidence in the data behind the financial forecasts. Key assumptions made in this asset management plan are: The assumed useful lives of the stormwater assets The assumed renewal funding v new/upgrade funding

27 ASSET MANAGEMENT PRACTICES 7.1 Accounting/Financial Systems Accounting and financial systems Council uses the Authority general ledger and land information system and has in March 2012 implemented the Assetic asset management system Accountabilities for financial systems The Manager Finance is accountable for the financial systems Accounting standards and regulations The following standards and regulations apply Australian Accounting Standards AASB101 Presentation of financial statements AASB116 Property, Plant and Equipment Local Government Act 1999, Section 122(1a) Strategic Management Plans Local Government (Financial Management) Regulations 1999 Part 3 Accounting Principles Capital/maintenance threshold The following Capitalisation Thresholds are contained in Note 1 of the Annual Financial Statements.

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29 Asset Management Systems Asset management system Council in March 2012 implemented the Assetic asset management system for the management of all its asset categories. The Assetic MyData system currently holds data relating to the asset s inventory; Condition and fair value. Implementation of MyPredictor, the forecast modelling module of Assetic, is currently in progress. Spatial data relating to the transport assets is located within the MapInfo Graphical Information System. Assetic MyData has a static link to MapInfo GIS via Exponare Asset registers The asset register is contained within the Assetic MyData asset management system and contains all relevant data for infrastructure transport assets including asset inventory; Condition and fair value Linkage from asset management to financial system The Assetic MyData asset management system is an independent system from Council s Authority Financial system. Asset values including CRC ; DRC; and Accumulated Depreciation are transferred to Authority via a journal entry Accountabilities for asset management system and data The Assetic MyData asset management system; as well as the Infrastructure GIS data bases, are managed by the Principal Infrastructure Asset Planning. 7.3 Information Flow Requirements and Processes The key information flows into this asset management plan are: Council strategic and operational plans, Service requests from the community, Network assets information, The unit rates for categories of work/materials, Current levels of service, expenditures, service deficiencies and service risks, Projections of various factors affecting future demand for services and new assets acquired by Council, Future capital works programs, Financial asset values. The key information flows from this asset management plan are: The projected Works Program and trends, The resulting budget and long term financial plan expenditure projections, Financial sustainability indicators. These will impact the Long Term Financial Plan, Strategic Longer-Term Plan, annual budget and departmental business plans and budgets.

30 PLAN IMPROVEMENT AND MONITORING 8.1 Performance Measures The effectiveness of the asset management plan can be measured in the following ways: The degree to which the required cashflows identified in this asset management plan are incorporated into the organisation s long term financial plan and Community/Strategic Planning processes and documents, The degree to which 1-5 year detailed works programs, budgets, business plans and organisational structures take into account the global works program trends provided by the asset management plan; 8.2 Improvement Plan The asset management improvement plan generated from this asset management plan is shown in Table 8.2. Task No 1 Undertake the preparation of a stormwater management plan Table 8.2: Improvement Plan Task Responsibility Resources Required Mgr. Natural Environments 2 Review the asset database for accuracy Principal Infrastructure Asset Planning 3 Undertake proactive CCTV inspections of stormwater conduits 4 Incorporate WSUD and stormwater quality improvements in asset upgrades 5 Undertake assessment of initiating controls on development associated with the volume of stormwater runoff Principal Infrastructure Asset Planning Mgr. Natural Environments Mgr. Natural Environments Timeline $40,000 Dec 2015 Internal Dec 2016 $10k pa annually Project based Project based Internal Dec Monitoring and Review Procedures This asset management plan will be reviewed during annual budget preparation and amended to recognise any material changes in service levels and/or resources available to provide those services as a result of the budget decision process. The Plan has a life of 4 years and is due for revision and updating within 2 years of each Council election.

31 REFERENCES IPWEA, 2006, International Infrastructure Management Manual, Institute of Public Works Engineering Australia, Sydney, IPWEA, 2008, NAMS.PLUS Asset Management, Institute of Public Works Engineering Australia, Sydney, IPWEA, 2009, Australian Infrastructure Financial Management Guidelines, Institute of Public Works Engineering Australia, Sydney, IPWEA, 2011, International Infrastructure Management Manual, Institute of Public Works Engineering Australia, Sydney, City of Mitcham, Strategic Plan City of Mitcham, Annual Residents Survey, 2012 City of Mitcham, 2013/14 Draft Long Term Financial Plan City of Mitcham, 2013/14 Draft Annual Business Plan