Parkes Shire Council. Stormwater. Asset Management Plan

Transcription

1 Parkes Shire Council Stormwater Asset Management Plan Scenario1 Version 5 Dec 2012

2 Document Control Document ID: Stormwater Asset Management PlaN V.1 Rev No Date Revision Details Author Reviewer Approver 1 Dec 2012 Draft H.K. C.F./A.F. S.B. Copyright 2012 All rights reserved. The Institute of Public Works Engineering Australia.

3 TABLE OF CONTENTS 1. EXECUTIVE SUMMARY... 2 Context... 2 What Council Provides... 2 What does it Cost?... 2 What we will do... 3 What we cannot do... 3 Managing the Risks... 3 Confidence Levels... 3 The Next Steps INTRODUCTION Background Assets Covered By This Plan Stormwater Asset Management within Council Goals and Objectives of Asset Management Plan Framework Core and Advanced Asset Management Community Consultation LEVELS OF SERVICE Customer Research and Expectations Strategic and Corporate Goals Legislative Requirements Current Levels of Service Desired Levels of Service Demand Drivers Demand Forecast Demand Impact on Assets Demand Management Plan Asset Programs to meet Demand LIFECYCLE MANAGEMENT PLAN Background Data Infrastructure Risk Management Plan Routine Operations and 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 Forecast Reliability and Confidence PLAN IMPROVEMENT AND MONITORING Status of Asset Management Practices Improvement Program Monitoring and Review Procedures Performance Measures REFERENCES APPENDICES Appendix A Maintenance Response Levels of Service Appendix B Projected 10 year Capital Renewal and Replacement Works Program Appendix C Projected Upgrade/Exp/New 10 year Capital Works Program Appendix D Budgeted Expenditures Accommodated in LTFP Appendix D.1 Stormwater asset condition profile Appendix E Abbreviations Appendix F Glossary... 81

4 2 1. EXECUTIVE SUMMARY Context This Infrastructure and Asset Management plan focuses on the management of stormwater drainage assets of Parkes Shire Council. This plan specifies the life cycle requirements for effective management, inspection and replacement of this asset group and outlines the financial implications and standards to be adhered to. This plan is intended to demonstrate how Council will achieve this outcome by applying the principles of responsible Asset Management Planning, the object of which is to: Deliver the required level of service to existing and future customers in the most cost effective way Council plans to operate and maintain the existing stormwater drainage network to achieve the following strategic objectives. What Council Provides the Infrastructure and Asset Management Plan as a result. Council provides a stormwater and drainage network that provides flood protection and water quality services. This network comprises stormwater mains, stormwater inlet pits and pipes, stormwater manholes, stormwater nodes, stormwater channels, stormwater storage basins and gross pollutant traps. Head wall Stormwater Pipes Concrete ends/head Walls Pipe Open Pipe RCBC RCPC upvc Ensure the stormwater network contributes to the strategic objectives of residential, student, worker and visitor growth by providing the required drainage services. Ensure the stormwater network is maintained at a safe and functional standard as set out in this infrastructure and asset management plan. Stormwater Stormwater Pits Grate Headwall Junction box Kerb inket kerb inlet gutter Ensure the stormwater network renewal program is sufficient to provide the required levels of service and that this profile is linked to other asset renewal profiles (roads, footpaths etc) to minimise impact on surrounding assets and the community at large. The contribution of stormwater services towards the strategic goals and asset management objectives will be achieved by: o Ongoing stakeholder consultation to establish and confirm service o standards. o Implementing a program of inspections and monitoring activities to assess asset condition and performance. o Identifying operational, maintenance, renewal and upgrade requirements and applying economic analysis to establish the most cost effective o works programs. Ensuring services are delivered at the right price and quality. o Continuously reviewing and improving the quality of Asset Management practices and updating Figure A: Stormwater Asset Management Category Sub Category What does it Cost? Retention Besin Retention Tank Man hole Earthwork Pumps Wetland Infrastructure Tank Pipes 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 $369,000 on average per year. Council s estimated available funding for this period is $337,000 on average per year which is 91% of the cost to provide the service. This is a funding shortfall of $32,000 on average per year. This ratio however, does

5 3 not take into account the increase demand due to growth of Parkes, climate change, and works deferred in the past (e.g townships). 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. 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: Stormwater pipe blockage and collapse Trench subsidence Headwall element failure or foundation settlement Gross Pollutant traps malfunctioning Drainage or basin overflow We will endeavour to manage these risks within available funding by: Establish routine inspection CCTV Inspection Implementation of asset management plan Confidence Levels This AM Plan is based on B level of confidence information. This significant investment to council must be maintained and rehabilitated over the useful life of the assets, and future replacements must be forecast and financed. The current value includes the capitalised book value of built assets only, and excludes the value of natural assets. Some of the natural assets are currently not identified. Unidentified assets include: channel armouring; levee banks; weirs; flood bypass channels; drainage reserves; overland flow paths; bio retention systems; and penstocks. What we will do Council plans to provide Stormwater services for the following: Operation, maintenance, renewal and upgrade of Stormwater Pipes, Pits, Headwalls, Gratings, Basins to meet service levels set by Council in annual budgets. Airport stormwater drainage network will reach it's "designed life time" within the next 10 year planning period. Council will perform an extensive condition survey on the airport stormwater drainage network to measure the actual remaining life. What we cannot do Council does not have enough funding to provide all services at the desired service levels or provide new services. The Next Steps The actions resulting from this asset management plan are: Improving asset knowledge so that data accurately records the asset inventory, how assets are performing and when assets are not able to provide the required service levels, Improving our efficiency in operating, maintaining, replacing existing and constructing new assets to optimise life cycle costs, Identifying and managing risks associated with providing services from infrastructure, Making trade offs between service levels and costs to ensure that the community receives the best return from infrastructure, Identifying assets surplus to needs for disposal to make savings in future operations and maintenance costs. Refine levels of services through customer consultations and questionnaires. Develop lifecycle plans for Council's assets, so that a better understanding of the costs of ownership is understood. Develop Policies/Procedures to better manage Council's Assets. Develop inspection regimes that identify, and address risks. Develop Maintenance Management Systems (MMS). Develop 30 year financial plans for input into Council's Management Plan. Rationalise the ownership of Council's Assets. Developing partnership with other bodies, where available to provide services;

6 4 Seeking additional funding from governments and other bodies to better reflect a whole of government funding approach to infrastructure services. Promote Asset Management Plans as public documents that explain the role and services of Council. Review and update Stormwater Asset Management Plan. Questions you may have What is this plan about? This asset management plan covers the infrastructure assets that serve the Parkes Shire Council community s Stormwater needs. These assets include Stormwater Pipes, Pits, Headwalls, Gratings, Basins throughout the Council area that enable people to have a safe and effective stormwater drainage system. What is an Asset Management Plan? Asset management planning is a comprehensive process to ensure delivery of services from infrastructure is provided in a financially sustainable manner. 2. Improving our efficiency in operating, maintaining, renewing and replacing existing assets to optimise life cycle costs, 3. Identifying and managing risks associated with providing services from infrastructure, 4. Making trade offs between service levels and costs to ensure that the community receives the best return from infrastructure, 5. Consulting with the community to ensure that Stormwater services and costs meet community needs and are affordable, 6. Developing partnership with other bodies, where available to provide services, 7. Seeking additional funding from governments and other bodies to better reflect a whole of government funding approach to infrastructure services. What happens if we don t manage the shortfall? If Council does not provide funding for new Stormwater infrastructure, there may be increasing incidents of localised stormwater events, causing nuisance flooding Asset management plan details information about infrastructure assets including actions required to provide an agreed level of service in the most cost effective manner. The plan defines the services to be provided, how the services are provided and what funds are required to provide the services. Why is there a funding shortfall? Most of the Council s Stormwater network was constructed by developers and from government grants, often provided and accepted without consideration of ongoing operations, maintenance and replacement needs. Many of these assets are approaching the later years of their life and require replacement, services from the assets are decreasing and maintenance costs are increasing. Councils present funding levels are insufficient to continue to provide existing services at current levels in the medium term. What options do we have? Resolving the funding shortfall involves several steps: 1. Improving asset knowledge so that data accurately records the asset inventory, how assets are performing and when assets are not able to provide the required service levels, Water clogging after heavy rain in Parkes Township What can we do? Council can develop options, costs and priorities for future Stormwater services, consult with the community to plan future services to match the community service needs with ability to pay for services and maximise community benefits against costs. What can you do? Council will be pleased to consider your thoughts on the issues raised in this asset management plan and suggestions on how Council may change or reduce its Stormwater mix of services to ensure that the appropriate level of service can be provided to the community within available funding.

7 5 2. 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: In 2005, Parkes Shire Council developed the Parkes Integrated Water Cycle Management (IWCM) plan, providing the framework for the management and planning of water supply, sewerage and stormwater services for the council area in integrated way to ensure water is used efficiently. The IWCM process has identified the need for an upto date assessment of stormwater infrastructure. 1. Parkes Shire Council 2010 Community Plan This plan was initiated by, and is owned by the Community. To ensure that aspirations are realised a concerted effort from all sectors of the Community is required to ensure its effectiveness. The plan contains a vision for Parkes Shire and recommends strategic objectives and eight specific future directions to bring these about. We live in an uncertain world both economically and environmentally. There will be significant challenges to face over the 10 year period of the plan. The Community will need to consider if sufficient resources are available to meet ever increasing needs for services and infrastructure. The Community Plan identifies Council's role in the realisation of Future Directions and strategic objectives. Where Council has a responsibility the actions and tasks to be undertaken will be contained within Council's three year delivery program and annual operational plan. The Community will be able to monitor achievements. The Delivery Program is supported by strategies for Long Term Financial Planning, Asset and Human Resource Management. It also provides linkages to other Council and Government planning documents, in particular the NSW Government State Plan. 2. Parkes Shire Council Delivery Program : This Delivery Program addresses the Future Directions in the Community Plan in which Council has a specific role. It will also assist in planning work programs and schedules over the next three years. This delivery plan will be in operation from financial years to The Delivery Program has the following components: A Delivery Plan to guide Council's actions in the achievement of the strategic objectives from the Community Strategic Plan (Including linkages to other Council and Government planning documents in particular the NSW Governments State Plan) 1 IPWEA, 2011, Sec 4.2.6, Example of an Asset Management Plan Structure, pp

8 6 A Long Term Financial Plan and a Delivery Program Financial Forecast to guide the funding of the work required by the Delivery Program, that includes the projections of Council's financial position for the life of the Delivery Program. An Asset Management Strategy that guides the management of Council's existing and proposed assets A Workforce Management Strategy to ensure Council has the people and skills needed to achieve the Delivery Program Council's newly developed Community Engagement Strategy. This management tool will ensure that Community Engagement responses match the complexity or impact of decisions being made. 3. Parkes Shire Council Operational Plan This Operational Plan addresses the Future Directions and Strategic Objectives in the Community Plan It has a direct flow on from the planed work over the next three years outlined in Councils Delivery Program. This Operational Plan will be reviewed every six months at a minimum. 4. Risk assessment documents Stormwater Core infrastructure risk management plan ; Climate risk assessment plan; and Enterprise Risk Management Establishment Plan. The ultimate objective of this Risk Management Plan is to further embed the principles of risk management in all aspects of Council s operations. It is recognised that this is a long term goal, and will require a phased implementation to ensure that risk management is effective and sustained across all of Council s operations. 5 Parkes Transportation Hub, Local Environment Study (2003) This describes the proposed transport hub, and related infrastructure including the 'Ring Road' concept. 6 Contracts The service levels, strategies and information requirements contained in the Asset Management plans are translated into contract specifications and reporting requirements. 7 By Laws, standards and policies These tools for asset creation and subsequent management are needed to support Asset Management tactics. 8 Aus Spec This specification covers the contractual requirements for the Quality System documentation and operation. The following Aus Spec documents apply: Aus Spec #1 Development Design and Construct Design and Construction specifications for subdivision works developers, conditions on community title development and to comply with any planning reforms for private certification. Aus Spec #2 Asset Owners Roadwork's Specifications Set of specifications for the capital works program. Aus Spec #3 Standard Contract Documents Guidelines and the basis of a policy for contract documentation preparation.

9 7 Aus Spec #4 Road Reserve Maintenance Guide to Use, a technical specification with various maintenance activity specifications together with the associated processes to facilitate a more proactive approach to road reserve maintenance in a quality environment. 9 Business Plans These service levels policies, processes and budgets defined in Asset Management plans are incorporated into business plans as activity budgets, management strategies and performance measures. 2.2 Assets Covered By This Plan The stormwater assets covered by this asset management plan are shown in Table 2.1. These assets are used by Council to provide "Stormwater drainage" services to its community. Table 2.1: Assets covered by this Plan Asset Category Dimension Replacement Value ($) June 2012 Value Unit Head Wall 4 Nos 2203 Open Pipe m 527,923 Pipe m 18,679,239 Remark Stormwater Pit Retention Basin Retention Tank 210 Nos 4 Nos 2 Nos 2,157, ,800 Replacement value for 3 Retention Basin 72,000 Replacement value for 1 Retention Tank TOTAL 21,827,528 Key stakeholders in the preparation and implementation of this asset management plan are: Shown in Table Table 2.1.1: Key Stakeholders in the AM Plan Council s organisational structure for service delivery of infrastructure assets is detailed below, Key Stakeholder Role in Asset Management Plan Government Systems in place to sustain building infrastructure, accountability, transparency and to deliver acceptable levels of service to the Community. RMS LPI DPI Councillors/Board Members Represent needs of community/shareholders, Allocate resources to meet the organisation s objectives in providing services while managing risks, Ensure organisation is financial sustainable. Assess and approve Asset Management Plan CEO/General Manager Director Engineering Services Manager Assets Executive Management Endorsement, Sign Off and Executive Ownership Ensure structure and resources are allocated to perform Asset Management Asset Management Plan development, Long term Planning (20yrs), Asset

10 8 database development and Maintenance, Maintenance Management Systems (MMS), condition inspections, valuations, resource and change management Community Visitors Utilities/Developers Employees/ Volunteers Contractors/ Suppliers Insurers Feedback on performance and Service Levels Well maintained assets, accessible services, safe facilities Buried Services Gas, electricity, telecommunication etc Safe working environment, well maintained assets. Safe working environment, well maintained assets. Some components of the system has state cover 2.3 Stormwater Asset Management within Council Council s organisational structure for service delivery from infrastructure assets is shown in Fig B. Fig B: Parkes Shire Council Organization Structure

11 9 The Engineering Services Department of Council is responsible for Stormwater planning, Design, Asset planning and management functions. The Asset management team has high level strategic asset management responsibilities across all of Council s infrastructure assets including stormwater assets. The role of the Assets team is to develop and oversee asset management development and practice within the organisation. The current focus is on assets management systems. The Natural Resources Department of Council provides asset maintenance services along with supporting departments as shown in Fig C. Support Services General Manager Director Engineering Services Manager Natural Resources Finance Human & Resources Accounting Asset Management Tech. & Info Stormwater operation and maintenance Stormwater renewal and upgrade Customer complaint resolutions Environmental issue resolutions Legislative and regal matters Design Services Customer Services Risk Management 2.4 Goals and Objectives of Asset Management Fig C: Stormwater Assets service delivery structure 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 defined level of service (as amended from time to time) in the most cost effective manner for present and future consumers. The key elements of infrastructure asset management are: Providing a defined level of service and monitoring performance, Managing the impact of growth through demand management and infrastructure investment, Taking a lifecycle approach to developing cost effective management strategies for the long term that meet the defined level of service, Identifying, assessing and appropriately controlling risks, and Having a long term financial plan which identifies required, affordable expenditure and how it will be financed. 2 2 Based on IPWEA, 2011, IIMM, Sec 1.2 p 1 7.

12 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 Council will manage its existing and future assets to provide defined levels of service, Financial summary what funds are required to provide the defined services, Asset management practices, Monitoring how the plan will be monitored to ensure it is meeting Council s objectives, Asset management improvement plan. A road map for preparing an asset management plan is shown below.

13 11 Road Map for preparing an Asset Management Plan Source: IPWEA, 2006, IIMM, Fig 1.5.1, p 1.11.

14 Core and Advanced Asset Management This asset management plan is prepared as a core asset management plan over a 20 year planning period 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. Future revisions of this asset management plan will move towards advanced asset management using a bottom up approach for gathering asset information for individual assets to support the optimisation of activities and programs to meet agreed service levels. 2.7 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 and willingness to pay for the service. 3 IPWEA, 2011, IIMM.

15 13 3. LEVELS OF SERVICE 3.1 Customer Research and Expectations Customer Service Requests Council's current Customer Request Management (CAIR) System allows for processing of individual customer complaints and requests. Currently there is no overall statistical summary report format that allows for useful reporting of the nature and types of requests made of Council. However requests/complaints recorded in duration have been extracted from the CAIR system and analysed to provide some information and guidance on the areas of Council operations that generate most requests/complaints. Asset related customer requests/complaints recorded in CAIR in period of related to Stormwater asset are as follows: Request Type Count Percentage (%) Ponding / Flooding / Drainage Problem at property Road drainage SW Asset improvement/maintenance Others Total 163 Council uses this information in developing its Strategic Plan and in allocation of resources in the budget. Community Surveys Council has carried out research on customer expectations during the process of IP&R. For the complete survey detail refer to community engagement Strategy Document. Stormwater Asset Management Plans is integrated with the Community Strategic Plan and the Long Term based on recent community engagement process. Relevant extracts from the 2010 community survey are as follows: Summary In May June 2012 the community engagement process generated 947 projects and initiatives for the delivery plan. The projects and initiatives have been grouped into 61categories within the eight future directions of Parkes Shire Community Strategic Plan. The direction attracting the largest number of projects and initiatives was Improve Health and Wellbeing The table and chart below shows the distribution of the projects and initiatives and the comparative percentage for each future direction. Caring for the natural environment had the fewest number of projects and initiatives. Where possible the categories have been aligned with the strategic outcomes in the community strategic plan. Some of the 61 categories may be able to be combined. Allocating projects and initiatives into years for completion has not been done

16 14 Future direction Count % Categories Improve health and well being Enhance recreation and culture Maintain and improve the Shire's assets and infrastructure Promote support and grow our communities Grow and diversify the economic base Develop lifelong learning opportunities Develop Parkes as a national logistics hub Care for the environment in a changing climate Totals Care for the environmentin a changing climate Develop Parkes as a national logistics hub Develop lifelong learning opportunities % of suggestions by Future Direction Grow and diversify the economic base Promote support and grow our communities Maintain and improve the Shire's assets and infrastructure Enhance recreation and culture % Improve health and well being A survey was conducted during the last week of July and the first week of August 2012 to find out the importance of thirty five council services to the citizens of Parkes Shire and to seek their satisfaction with service delivery. It also gathered information on gender, age and place of residence for people participating in the survey surveys were completed. This equates to a response rate, per person of 9.9%. Assuming a few households returned multiple forms, the response per household is closer to 20%. The general conclusion is that the survey is slightly underweight with regard to young, town dwellers but the discrepancies are not large enough to invalidate the survey. The top ten services rated as very important by respondents are: Local Roads Order Cleanliness Water Supply Food Safety

17 15 Main Roads Public Toilets Sewer Road Safety Rubbish Signage The top ten services that respondents were very satisfied with are: Library Festivals Parks Sewerage Cemeteries Sports grounds Food safety Children s services Playgrounds Tourism The top ten services that respondents were most not satisfied with are: Local roads Footpaths Animal weeds and pests management Gutters Youth services Public toilets Car parking Main roads Nature strips Development approvals There is a trend throughout the survey, that the year age group to be not satisfied (as a percentage of the other age groupings) with services rated as very important. The outputs from the community consultations held in May 2012 echoed the areas of concern shown by the survey Methodology: The survey was distributed to all households in paper form and was also available for completion electronically through Survey Gizmo web based Survey tool households were sent a paper survey forms. Respondents could either use the online survey tool or complete the paper form, and use the reply paid envelope to return to Parkes Shire Council. 119 were completed online and 943 were completed on paper. A total of 1,062 responses had been received by the cut off date of August 14. Response Analysis In summary, the survey respondents are sufficiently similar to the population as a whole that even with a response rate of 9.9%, the findings can be generalised to the population as a whole.

18 16 Response analysis Census Survey 100.0% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Male Female Parkes town Villages Farms etc Yes No Sex Age Location ATSI Response Analysis Importance of Services Table 2 below shows the frequency responses to the question Is this service very important to you, somewhat important or not important. The Services have been sorted by the percentage of Very Important The following services are perceived as the most important. More than 75% of respondents said each service was very important Local Roads Order Cleanliness Water Supply Food Safety Main Roads Public Toilets Sewer Road Safety Rubbish Signage Table 2 - Service sorted by percentage indicating Importance for All respondents Service Very Important Somewhat important Not important Local Roads 91.5% 8.0% 0.6% Order Cleanliness 86.2% 13.0% 0.8% Water Supply 84.5% 11.8% 3.8%

19 17 Service Very Important Somewhat important Not important Food Safety 83.8% 14.0% 2.2% Main Roads 83.1% 15.2% 1.7% Public Toilets 77.6% 19.8% 2.6% Sewer 76.8% 12.8% 10.3% Road Safety 76.5% 21.0% 2.6% Rubbish 75.9% 21.9% 2.2% Signage 74.8% 22.2% 3.1% Attractiveness 73.5% 23.4% 3.1% Airport 72.8% 22.0% 5.2% Council Customer Service 72.0% 25.4% 2.6% Footpaths 71.8% 24.2% 4.0% Industry Support 70.1% 24.5% 5.4% Aged Disabled 70.0% 23.7% 6.3% Tourism 68.0% 26.3% 5.7% Animals Weeds Pest 66.4% 29.2% 4.4% Town Planning 66.2% 28.7% 5.1% Cemeteries 66.0% 28.0% 6.0% Gutters 65.2% 29.5% 5.3% Library 61.2% 31.7% 7.1% Development Approvals 58.7% 31.4% 10.0% Nature Strips 58.3% 36.0% 5.7% Car Parking 58.1% 33.1% 8.8% Parks 55.9% 38.4% 5.7% Sports Grounds 55.3% 32.8% 11.9% Children Services 54.5% 29.3% 16.2% Youth 54.2% 33.1% 12.7% Festivals 50.6% 38.2% 11.2% Swimming Pools 48.7% 36.3% 15.0%

20 18 Service Very Important Somewhat important Not important Playgrounds 47.4% 40.0% 12.5% Caravan Park 44.2% 39.9% 15.9% Museums 32.5% 47.1% 20.4% Indigenous 31.9% 36.5% 31.6% Satisfaction with services Table 3 shows the satisfaction ratings for services. The table is sorted by not satisfied. The percentages are based on Valid responses i.e. the null and the Not Applicable (NA) responses are excluded. From the table it can be seen that some services (e.g. Child Services, Indigenous services, Youth services have quite high numbers of Not Applicable. Some of these high levels of NA s may be related to location e.g. Sewer is not an issue for rural/farm dwellers. Respondents are most satisfied with Library, Festivals, Parks and Sewer services Respondents are least satisfied with gutters, animals and pest management, footpaths and local roads Table 3: Satisfaction level: sorted by percentage for ALL respondents Service Not satisfied (Percentage of Valid responses) Valid responses (Number) Not Applicable (Number) Library 6.0% Sewer 6.2% Festivals 7.0% Parks 8.6% Food Safety 8.7% Cemeteries 9.5% Water Supply 9.8% Tourism 11.4% Children Services 11.4% Sports Grounds 11.9% Playgrounds 14.1% Airport 14.4% Swimming Pools 14.4% Caravan Park 15.8%

21 19 Service Not satisfied (Percentage of Valid responses) Valid responses (Number) Not Applicable (Number) Council Cust Service 16.7% Signage 17.0% Rubbish 17.1% Museums 17.1% Order Cleanliness 17.3% Aged Disabled 19.5% Road Safety 20.4% Industry Support 22.0% Attractiveness 23.2% Indigenous 24.5% Town Planning 25.1% Development Approvals 26.8% Main Roads 27.0% Nature Strips 27.9% Public Toilets 32.8% Car Parking 36.0% Youth 37.9% Gutters 39.6% Animals Weeds Pest 45.2% Local Roads 51.0% Footpaths 57.5% Satisfaction with a service rated as very important This information is shown in table 4. People are most satisfied with the library i.e. of the people who rated library services, as very important only 6% were not satisfied with service delivery. People are least satisfied with footpaths: Of the people who rated footpaths, as most important 58.2% were not satisfied with service delivery Table 4 Service Satisfaction sorted by percent not satisfied for those who say that service is very important

22 20 Service Not Satisfied Somewhat Satisfied Very Satisfied Number Not Applicable Library 6.0% 23.0% 71.0% 14 Sewer 6.0% 37.9% 56.1% 31 Festivals 6.3% 27.2% 66.5% 8 Parks 8.5% 39.6% 52.0% 3 Food Safety 8.6% 52.4% 39.0% 12 Cemeteries 9.1% 42.9% 48.1% 10 Water Supply 10.4% 44.8% 44.8% 19 Tourism 11.0% 43.6% 45.5% 23 Sports Grounds 11.5% 38.5% 50.0% 12 Children Services 12.0% 47.3% 40.7% 76 Playgrounds 13.4% 43.8% 42.7% 12 Caravan Park 14.4% 43.3% 42.3% 35 Airport 15.1% 47.0% 38.0% 34 Swimming Pools 15.6% 42.7% 41.7% 19 Signage 16.7% 49.9% 33.4% 4 Order Cleanliness 16.9% 52.6% 30.5% 4 Council Customer Service 17.0% 37.5% 45.5% 15 Museums 17.8% 25.3% 56.9% 21 Rubbish 17.9% 39.1% 43.1% 10 Aged Disabled 19.3% 51.6% 29.1% 46 Road Safety 20.3% 53.7% 26.0% 10 Industry Support 21.8% 52.3% 26.0% 41 Attractiveness 22.9% 50.4% 26.7% 5 Indigenous 24.0% 49.6% 26.4% 56 Town Planning 25.2% 53.0% 21.9% 17 Development Approvals 27.2% 51.7% 21.0% 30 Nature Strips 28.0% 44.1% 28.0% 6 Main Roads 28.6% 57.9% 13.5% 3

23 21 Service Not Satisfied Somewhat Satisfied Very Satisfied Number Not Applicable Public Toilets 33.1% 43.9% 23.0% 14 Car Parking 36.3% 47.5% 16.2% 9 Youth 39.2% 45.4% 15.4% 63 Gutters 39.3% 44.6% 16.1% 14 Animals Weeds and Pest management 45.1% 40.2% 14.7% 15 Local Roads 51.6% 42.8% 5.6% 5 Footpaths 58.2% 36.0% 5.8% 9 The statistics show in the above tables, that it is very important to improve our level of service in categories that have high level of dissatisfaction among the respondents. The areas within the stormwater category that were very important to the community point will have a high priority in funding strategies. 3.2 Strategic and Corporate Goals This asset management plan is prepared under the direction of Council s vision, mission, goals and objectives. Council s vision is: In 2020 Parkes Shire will be: A progressive regional centre, embracing a national logistics hub, with vibrant communities, diverse opportunities learning and healthy lifestyles". Council s value is: Parkes Shire Council is committed to an organisational philosophy in which the staff have nominated that INTEGRITY, SAFETY, CARING & RESPECT, TEAMWORK, INNOVATION and COMMUNITY FOCUS are aspired to at all time The above values are Parkes Shire Council internal attitudes about what is right and wrong, ethical and unethical. They influence our preferences, our perception of problems and our choice of behaviour which translate into day to day actions. Table 3.2: Council Goals and how these are addressed in this Plan Goal Objective How Goal and Objectives are addressed in AMP 1. Develop Lifelong Learning Opportunities - Provide access to Tertiary Education - Support and Promote TAFE - Promote Early intervention in education - Provide lifelong learning This AMP is does not address this Council Goal

24 22 2. Improve health and wellbeing 3.Promote, support and grow Our communities 4. Grow diversify the economic base 5. Develop Parkes as a national logistics Hub 6. Enhance recreation and culture Opportunities - Encourage the provisions of medical facilities and services - Promote and develop health education and encourage people to take personal responsibility for their health - Provide Community Transport - Maximise Public Safety - Develop and implement individual township plans - Develop strategies to work with and support the townships endeavours - Strengthen Council s relationship with the smaller townships - Utilise and integrated planning framework to guide the development of our communities - Provide equitable access to community services - Support Mining Operations and Development - Increase visitation and length of stay across the Parkes shire - Maintain a strong innovative agriculture sector - Improve the availability and accessibility of new technology - Increase the number of residents and work opportunities across Parkes Shire - Promote and develop, industry, retail and Government Services in the Parkes Shire - Develop and promote the Parkes National Logistics Hub - Develop a ring road to divert heavy vehicle traffic - Promote the development of the inland rail corridor - Make Parkes Regional Airport progressive and profitable - Improve road access to Sydney - Improve Aquatic Recreation Facilities - Develop and implement pedestrian access and cycling mobility facilities - Maintain and develop sporting, recreational and cultural facilities - Ensure the library is an ongoing cultural, recreational, learning centre This AMP contributes to this Council Goal by: Reduce flooding & removing stagnant water which promotes health issue This AMP contributes to this Council Goal by: Improves natural environment & reduce flooding This AMP is does not address this Council Goal This AMP is does not address this Council Goal This AMP is does not address this Council Goal

25 23 for the community 7. Care for the environment in a changing climate 8. Maintain and improve the shire assets and infrastructure - - Improve the environmental outcomes of Council s operations - Raise awareness of sustainable practices in the community - Encourage recycling and the reduction of waste - Implement environmental regulations and controls on Council s sphere of operation - Ensure the Shire water management is in line with best practice - Manage Road Assets - Ensure Shire liquid waste management is in line with best practice - Ensure Shire Storm Water management minimises negative impacts and maximises reuse - Maintain and Operate Parkes Regional Airport - Manage, maintain and update Council owned buildings and property This AMP contributes to this Council Goal by: - Improving the environmental out comes by constructing and maintaining efficient and adequate drainage facility to cope with climatic changes. - Council intend to introduce water harvesting technology to utilize rain water. This AMP contributes to this Council Goal by: - Adopt annual planning of maintenance, rehabilitation and upgrading programs. - Develop Maintenance Management Systems (MMS) for optimised maintenance cost through next 3 5 years - Develop 20 year financial plans for input into Council's Management Plan. - Develop lifecycle plans for Council's assets, so that a better understanding of the costs of ownership is understood. - Asset management plans will define outcomes, service standards, and condition, performance, maintenance and investment requirements. - Annual infrastructure works programs will be developed to reflect maintenance and investment priorities, risk and available resources and will link to council s long term financial plan. Council will exercise its duty of care to ensure public safety is accordance with the infrastructure risk management plan prepared in conjunction with this AM Plan. Management of infrastructure risks is covered in Section Legislative Requirements Council has to meet many legislative requirements including Australian and State legislation and State regulations. These include: Table 3.3: Legislative Requirements Legislation Local Government Act WH&S Act 2011 Environmental Planning & 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. Secures and promotes health, safety and welfare of people at work Encourage the proper management, development and conservation of natural and

26 24 Assessment Act 1979 Catchment Management Authorities Act 2003 Protection of the Environment Operations Act 1997 Water Management Act 2008 (Federal) Water Management Act 2000 (State) artificial resources Provide for proper natural resource planning at a catchment level Protect, restore and enhance the quality of the environment in NSW, having regard to the need to maintain ecologically sustainable development. Rationalise, simplify and strengthen the regulatory framework for environment protection. Provide for sustainable and integrated management of water sources of the State for the benefit of both present and future generations. Provide for the orderly, efficient and equitable sharing of water from water sources Provide for sustainable and integrated management of water sources of the State for the benefit of both present and future generations. Provide for the orderly, efficient and equitable sharing of water from water sources Council will exercise its duty of care to ensure public safety in accordance with the infrastructure risk management plan linked to this AM Plan. Management of risks is discussed in Section Current Levels of Service Council has defined service levels in two terms. Community Levels of Service measures how the community receives the service and whether the organisation is providing community value. Community levels of service measures used in the asset management plan are: Quality Function Capacity/Utilisation How good is the service? Does it meet users needs? Is the service over or under used? 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 and demonstrate effective organisational performance. Technical service measures are linked to annual budgets covering: 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 an appropriate service 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). Asset managers plan, implement and control technical service levels to influence the customer service levels. 4 Council s current service levels are detailed in Table 3.4. Table 3.4: Current and Desired Service Levels 4 IPWEA, 2011, IIMM, p 2.22

27 25 Key Performance Measure Level of Service COMMUNITY LEVELS OF SERVICE Quality Provide a safe method of collection and disposal of stormwater facilities Provide a safe method of collection and disposal of stormwater facilities Function Ensure that stormwater drainage services meets user requirements Safety Provide safe suitable stormwater drainage system, free from hazards Performance Measure Process Annual customer satisfaction survey Customer requests service Customer service requests relating to flooding of property Number of injury accidents Performance Target Current Performance > 90% satisfaction level To be provided in next version of Asset Management Plan Less than 5 per month Less than 5 per annum Less than 1 per annum To be provided in next version of Asset Management Plan To be provided in next version of Asset Management Plan To be provided in next version of Asset Management Plan Condition Periodic visual assessment to determine condition Periodic visual assessment to determine condition Stormwater traps or GPTs to be cleaned/maintained after rainfall event Provide appropriate stormwater drainage facilities to meet user requirements Function Provide flood protection services to meet community requirements Availability Ensure stormwater drainage services are available to all residential and commercial properties Safety Provide safe suitable stormwater drainage services, free from hazards CCTV inspection 5% inspected each year Routine clearing of drains Cleaning rate response Average age of pipe network Customer requests relating of property flooding Number of properties able to connect to stormwater drainage services Insurance claim history 100% of flood risk areas cleaned each year 100% of works identified by audit completed within 2 working days < 5% of assets > 95% of useful life <5% residential <2% commercial per year Facilities are available to 98% of residential and commercial properties Less than 1 per month To be provided in next version of Asset Management Plan To be provided in next version of Asset Management Plan To be provided in next version of Asset Management Plan To be provided in next version of Asset Management Plan To be provided in next version of Asset Management Plan To be provided in next version of Asset Management Plan To be provided in next version of Asset Management Plan 3.5 Desired Levels of Service In this plan a level of service will be set, below which it will be unacceptable for the condition of the specific asset to fall. Intervention would be expected to occur before this minimum level is achieved. Initially this level of service will be set by council's current practices, and local knowledge. In future Asset Management Plans, a community consultation process will be incorporated into the Asset Management Plan. It will be during these

28 26 community consultations that negotiations will allow for adjustments to these levels of service in line with public expectations and willingness to pay for the service. Council's activities will be set to maintain this level 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. The following principles are adopted in delivering levels of service in relation to stormwater: (a) Safe for use for the community; (b) Appearance is acceptable; (c) Regular maintenance is undertaken; (d) Facilities are appropriate and in good condition; (e) Facilities are operational; (f) Regular asset inspections are carried out; (g) Signage is appropriate; (h) Council responds to complaints and issues.

29 27 4. FUTURE DEMAND 4.1 Demand Drivers Drivers affecting demand include population change, changes in demographics, seasonal factors, vehicle ownership rates, consumer preferences and expectations, technological changes, economic factors, agricultural practices, environmental awareness, etc. 4.2 Demand Forecast The present position and projections for demand drivers that may impact future service delivery and utilisation of assets were identified and are documented in Table Demand Impact on Assets The impact of demand drivers that may affect future service delivery and utilisation of assets are shown in Table 4.3. Table 4.3: Demand Drivers, Projections and Impact on Services Demand factor Population Present position Projection (2020) Impact on services of Stormwater Assets 15,267 (Census 2011) 15,967 (Calculated based on the growth percentage ) Age Group Population Percentage Age Group Population Percentage - Continued new development adding to inventory, maintenance & management requirements 0 to % 0 to % 15 to % 15 to % Demographics ( By Age Group ) 25 to to to to to % 25 to % 12.6% 35 to % 13.4% 45 to % 11.9% 55 to % 9.1% 65 to % 75 to % 75 to % 85 +and over % 85 and over %

30 28 Employment opportunities Parkes has employment opportunities in the Agricultural, Mining and Transport industries. Additionally with the development of large chain stores in the Parkes CBD, Parkes has set itself up as a retail hub for the surrounding Central West area. This has created a number of retail employment opportunities for the town of Parkes. Increase in job availability Land use Councils development plan maintains control of areas for future development Proportion of impervious land increasing Increase pressure on existing stormwater drainage network Environmental Awareness Climate change Range of climatic condition from prolonged drought to major flooding events Greater legislative requirement to comply with water saving initiatives such as WSUD. More intense rainfall and longer dry periods between. Required disposal of obsolete assets and construction of additional assets to ensure compliance. Lower awareness leading to complacency in maintenance. or Or Rise of sea level 7-11mm per year Reduction in capacity nof outfall stormwater drainage lines from submerged discharged conditions. Low level areas may not drain at high tide levels. Consumer preferences Trending to more house holds with fewer residents. More granny flats and multi-unit developments. Increased impervious areas such as roofs and drive ways resulting in higher stormwater flows. 4.4 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 and management actions including reducing demand for the service, reducing the level of service (allowing some assets to deteriorate beyond current service levels) or educating customers to accept appropriate asset failures 5. 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 4.4. Further opportunities will be developed in future revisions of this asset management plan. Table 4.4: Demand Management Plan Summary Demand Driver Impact on Services Demand Management Plan Climate Change Elongated dry period and Increase in flash flooding with a greater number of rain intensity Monitoring rain events. 5 IPWEA, 2011, IIMM, Table 3.4.1, p 3 58.

31 29 Population growth New Subdivision are being developed CAIR request Introduction of Environment friendly technology, example: Stormwater harvesting events Increasing impervious lands causing more surface run off Important indicator to identify problems which need maintenance or new facility construction. New wetlands, ponds, pipe networks, pump station needed to be constructed to develop Stormwater harvesting 2 retention basins and 2 retention tanks constructed and also council have plan to construct 2 nos of retention basins to accommodate excess run off. Individual water holding facility is constructed with each new business development. CAIR request will be investigated and work identified and /or programmed within available budget. Council has initialized a project on stormwater harvesting which is in planning stage now. 4.5 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 Council. New assets constructed/acquired by Council are discussed in Section 5.5. The cumulative value of new contributed and constructed asset values are summarised in Figure 1. Figure 1: Upgrade and New Assets to meet Demand Fig 1 shows the value of assets constructed by developers and donated or contributed free of cost to council plus the value of assets associated with growth that are constructed and funded by council. The above graph is only a projection of asset value increase. The above graph will be updated when exact costing for new works become available. Acquiring these new assets will commit Council 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.

32 30 5. 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 & Fig A Headwalls Stormwater Pipes Stormwater Pits Retention Tank Retention Basin Concrete End / Head Walls RCBC RCPC upvc/pe Open pipe Grating Head wall Junction box Kerb inlet Kerb inlet gutter Man hole Tank Pipes Earthworks Pumps Wetland Infrastructure The age profile of the assets include in this AM Plan is shown in Figure 2. Figure 2: Asset Age Profile

33 31 Note: Acquisition dates of assets and financial asset write on process needs to be reviewed as a part of the improvement plan, especially for the year It is evident that a large quantity of existing assets were recorded into the asset register under this year, this appears to be based on the asset recognition date and not the date that the assets were constructed Asset capacity and performance Council s services are generally provided to meet design standards where these are available. Asset Group Headwalls Stormwater Pipes Stormwater Pits Performance Monitoring Activities Structural Inspection Foundation/Subsoil inspection Routine inspections Road Condition Rating Visual drain/pipe inspections Routine Inspection Trap inspection after heavy rain Retention Tank Routine Inspection Retention Basin Routine Inspection Locations where deficiencies in service performance are known are detailed in Table Table 5.1.2: Known Service Performance Deficiencies Location Service Deficiency Danilenko / Noonan St Hazelbank Avenue Bogan Street near McDonalds Insufficient inlets Insufficient current infrastructure Creek capacity insufficient Older parts of the town Kerbs lowered to 110mm as per standard which are not adequate to accommodate overland flow Currently only reactive inspection and maintenance is done. Implementation of Stormwater asset inspection Routine inspection is necessary. The above service deficiencies were identified from CAIR request database and Asset Inspection reports Asset condition Council do not have any condition data yet on stormwater assets. Council going to adopt CCTV to facilitate further investigation in this asset class.

34 32 The condition profile of Council s assets (based on "asset age assessment") is shown in Figure 3. Fig 3: Asset Condition Profile This graph is available on the NAMS.PLUS web site where Method 1 (Asset Register) is used and condition data is entered

35 33 Condition is measured using a 1 5 grading system 6 as detailed in Table Table 5.1.3: Simple Condition Grading Model Condition Grading Description of Condition 1 Very Good Condition: Only planned maintenance required 2 Good Condition: Minor maintenance required plus planned maintenance 3 Fair Condition: Significant maintenance required 4 Poor Condition: Significant renewal/upgrade required 5 Very Poor Condition: The asset is physically unsound and/or not performing as originally intended Asset valuations The value of assets recorded in the asset register as at June 2011 covered by this asset management plan is shown below. Assets were last revalue at June Assets are valued at Accounts Fair Value Pattern. Current Replacement Cost $ 21,827,528* Depreciable Amount $ 21,827,528 Depreciated Replacement Cost 7 $ 14,634,984 Annual Depreciation Expense $ 216,645 The current value includes the capitalised book value of built assets only and excludes the value of natural assets. Many of the natural assets are currently not identified, and therefore not listed as assets which require future maintenance and rehabilitation. These include natural drainage lines and informal retardation and sediment basins. Other unidentified assets include: levee banks, weirs, flood bypass channels, drainage reserves, overland flow paths, bio retention systems and penstocks. Consequently it is likely that these have not previously been fully recognised by the financial management system and have therefore not been properly funded. Although a basic estimate of their maintenance and rehabilitation requirements has been provided in this plan, the data requires verification. Useful lives were reviewed in June 2010 by following guidelines in NSW Reference Rate Manual Key assumptions made in preparing the valuations were: 6 IPWEA, 2011, IIMM, Sec 2.5.4, p Also reported as Written Down Current Replacement Cost (WDCRC). 8 Core infrastructure Risk Management Plan for Stormwater Climate Change Risk Assessment adaption report 2011 Parkes Shire Council Enterprise Risk Management Policy 2010 Parkes Shire Council Enterprise Risk Management Establishment Plan 2010/ /2014

36 34 Followed rate charts provided in NSW Reference Rate Manual. Comparison with actual costing will be done in next versions. Supervisor's knowledge is used for some old Storm water assets which do not have proper construction record. Various ratios of asset consumption and expenditure have been prepared to help guide and gauge asset management performance and trends over time. Rate of Annual Asset Consumption 1.00% (Depreciation/Depreciable Amount) Rate of Annual Asset Renewal 0.30% (Capital renewal exp/depreciable amount) Rate of Annual Asset Upgrade/New 0.80% (Capital upgrade exp/depreciable amount) Rate of Annual Asset Upgrade/New 0.80% (including contributed assets) In 2013 Council plans to renew assets at 33.80% of the rate they are being consumed and will be increasing its asset stock by 0.80% in the year. Most of the storm water assets were designed for years of life time, functioning to date with more than 50% of remaining life, except Airport drainage components which have 10 years of remaining life. Council will perform an extensive condition survey and will take initiatives to renew/maintain those components(if necessary). 5.2 Infrastructure Risk Management Plan An assessment of risks 8 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 nonacceptable risks. This Asset Management plan is supported by a Core infrastructure Risk Management Plan for stormwater (Parkes Shire Council) and a high level Risk Management Plan ( Parkes Shire Council Enterprise Risk Management Establishment Plan and Parkes Shire Council Enterprise Risk Management policy) which defines the risk process and identifies risk management strategies to minimise risks associated with the provision of council s services. Council has implemented many management practices and procedures and document to identify and manage risks associated with providing services from infrastructure assets. As an example in December 2011, Parkes Shire council has undertake an assessment of climate change impacts through risk assessment adaption report by Echelon, It was agreed that Local Government has an important "climate change" role to play given its responsibility for a wide range of issues, such as planning and development, promotion of renewable energy, land use, transport planning, asset and infrastructure management, vegetation clearance and stormwater management amongst others.the objectives of the project was to; Undertake a risk assessment process that aligns with the AS/NZS 4360 and ISO 3100 Develop strategies that focus on adaptation to potential climate change impacts Provide State wide (NSW Local government mutual insurance ) and Council with Climate Change and risk assessment data Identify strategies that can be used for Councils' strategic and Integrated Planning processes.

37 35 Parkes Shire Council has a Risk Register that acts as a central repository for all risks identified by Parkes Shire Council through any project and activity. It includes information such as risk probability, impact, countermeasures, risk owner and so on. The Risk Register documents the evaluation procedure for individual risks, as well as records current controls and risk action plans for each. 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, together with the estimated residual risk after the selected treatment plan is operational are summarised in Table 5.2. These risks are reported to management and Council. Table 5.2: Critical Risks and Treatment Plans Service or Asset at Risk Stormwater Pipes What can Happen Risk Rating (VH, H) Risk Treatment Plan Blockage M Establish routine inspection Residual Risk * Low Treatment Costs To be determined Stormwater Pipes Subside trenches are likely to cause injuries and property damage M Establish planned inspection Low To be determined Stormwater Pipes Stormwater pits Collapsed pipes or heavy rain events cause upstream overflowing with potential health and environmental impact Misplaced lids and covers are major hazard for traffic and pedestrians Headwalls An element collapse injuring people or other species Gross Traps Pollutant Stormwater Drainage Design Drainage network The failure of stormwater quality control devices Drainage or basin overflow H Regular CCTV inspection Medium To be determined H Establish routine inspection M Regular maintenance, Erosion protection and stabilization H Regular maintenance & inspection Lack of upgrade/renewal H Asset management planning M Moderate Moderate High Moderate Note * The residual risk is the risk remaining after the selected risk treatment plan is operational. To be determined To be determined To be determined To be determined 5.3 Routine Operations and Maintenance Plan Operations include regular activities to provide services such as public health, safety and amenity, eg street sweeping, grass mowing and street lighting. 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 Operations and Maintenance Plan Operations activities affect service levels including quality and function through street sweeping and grass mowing frequency, intensity and spacing of street lights and cleaning frequency and opening hours of building and other facilities.

38 36 Maintenance includes all actions necessary for retaining an asset as near as practicable to an appropriate service condition including regular ongoing day to day work necessary to keep assets operating, eg road patching but excluding rehabilitation or renewal. Maintenance may be classifies into 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. Specific maintenance is replacement of higher value components/sub components of assets that is undertaken on a regular cycle including repainting, replacing air conditioning units, etc. This work falls below the capital/maintenance threshold but may require a specific budget allocation. Actual past maintenance expenditure is shown in Table Table 5.3.1: Operation/Maintenance Expenditure Trends Year Operation/Maintenance Expenditure 2011/12 $ 151,000 Separate operation and maintenance (Planned specific and unplanned) cost will be provided in next versions of asset Management Plan. Maintenance expenditure levels are considered to be adequate to meet projected service levels, which may be less than or equal to current service levels. Where maintenance expenditure levels are such that will result in a lesser level of service, the service consequences and service risks have been identified and service consequences highlighted in this AM Plan and service risks considered in the Infrastructure Risk Management Plan. Currently council crews inspecting Gross pollutant traps and pits after heavy rainfall. Also reactive inspection and maintenance is undertaken. Assessment and prioritisation of reactive maintenance is undertaken by Council staff using experience and judgement Operations and Maintenance Strategies Council will operate and maintain assets to provide the defined level of service to approved budgets in the most cost efficient manner. The operation and maintenance activities include: Scheduling operations activities to deliver the defined level of service in the most efficient manner, Undertaking maintenance activities through a planned maintenance system to reduce maintenance costs and improve maintenance outcomes. Undertake cost benefit analysis to determine the most costeffective split between planned and unplanned maintenance activities (50 70% planned desirable as measured by cost), Maintain a current infrastructure risk register for assets and present service risks associated with providing services from infrastructure assets and reporting Very High and High risks and residual risks after treatment to management and Council, Review current and required skills base and implement workforce training and development to meet required operations and maintenance needs, Review asset utilisation to identify underutilised assets and appropriate remedies, and over utilised assets and customer demand management options, Maintain a current hierarchy of critical assets and required operations and maintenance activities, Develop and regularly review appropriate emergency response capability,

39 37 Review management of operations and maintenance activities to ensure Council is obtaining best value for resources used. Asset hierarchy An asset hierarchy provides a framework for structuring data in an information system to assist in collection of data, reporting information and making decisions. The hierarchy includes the asset class and component used for asset planning and financial reporting and service level hierarchy used for service planning and delivery. Currently council do not have service hierarchy on Stormwater asset, will be adopted in next versions. Critical Assets Critical assets are those assets which have a high consequence of failure but not necessarily a high likelihood of failure. By identifying critical assets and critical failure modes, organisations can target and refines investigative activities, maintenance plans and capital expenditure plans at the appropriate time. Operations and maintenances activities may be targeted to mitigate critical assets failure and maintain service levels. These activities may include increased inspection frequency, higher maintenance intervention levels, etc. Critical assets failure modes and required operations and maintenance activities are detailed in Table Table : Critical Assets and Service Level Objectives Critical Assets Critical Failure Mode Operations & Maintenance Activities To be defined after reviewing the detail risk assessment TBA TBA Standards and specifications Maintenance work is carried out in accordance with the following Standards and Specifications. Australian Rainfall Runoff 4 th Edition. AS/NZS Plumbing and Drainage Part 3: Stormwater Drainage. AS Guide to noise control on construction maintenance and demolition sites. National Capital Planning Authority 1993, Designing Subdivisions to Save and Manage Water. AS General Conditions of contract for the provision of asset maintenance and services. Argue J.R. Stormwater Management in Australian residential developments towards a common practice. ACT Government 1994, Urban Stormwater; Standard Engineering Practiced. Soil & Water management for urban development 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 current 2011 dollar values (ie real values).

40 38 Figure 4: Projected Operations and Maintenance Expenditure Fig 4 shows the total maintenance expenditure over the planning period. Note: $15000 has been budgeted to avail CC camera in order to perform an extensive survey on Airport Stormwater drainage assets to estimate their present condition, as Airport Stormwater drainage assets are 10years away from their life time. Deferred maintenance, i.e. works that are identified for maintenance and unable to be funded are to be included in the risk assessment and analysis in the infrastructure risk management plan. Maintenance is funded from the operating budget where available. This is further discussed in Section Renewal/Replacement Plan Renewal and replacement 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 or lesser required 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/replacement are identified from one of three methods provided in the Expenditure Template. Method 1 uses Asset Register data to project the renewal costs using acquisition year and useful life to determine the renewal year, 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.

41 39 Method 1 was used for this asset management plan. The useful lives of assets used to develop projected asset renewal expenditures are shown in Table Asset useful lives were last reviewed on 30 June Table 5.4.1: Useful Lives of Assets Asset (Sub) Category Estimated Life (yrs) Current Age (yrs) Remaining Life (yrs) Head Wall Open Pipe Pipe Storm water pit Retention basin Unlimited NA Retention tank Renewal and Replacement Strategies Council will plan capital renewal and replacement projects to meet level of service objectives and minimise infrastructure service risks by: Planning and scheduling renewal projects to deliver the defined level of service in the most efficient manner, Undertaking project scoping for all capital renewal and replacement projects to identify: o the service delivery deficiency, present risk and optimum time for renewal/replacement, o the project objectives to rectify the deficiency, o the range of options, estimated capital and life cycle costs for each options that could address the service deficiency, o and evaluate the options against evaluation criteria adopted by Council, and o select the best option to be included in capital renewal programs, Undertake in depth study and cost analysis to select the procedure of renewal (eg. Trenching or relining). Using low cost renewal methods (cost of renewal is less than replacement) wherever possible Maintain a current infrastructure risk register for assets and service risks associated with providing services from infrastructure assets and reporting Very High and High risks and residual risks after treatment to management and Council, Review current and required skills base and implement workforce training and development to meet required construction and renewal needs, Maintain a current hierarchy of critical assets and capital renewal treatments and timings required, Review management of capital renewal and replacement activities to ensure Council is obtaining best value for resources used. Renewal ranking criteria Asset renewal and replacement is typically undertaken to either: Ensure the reliability of the existing infrastructure to deliver the service it was constructed to facilitate (eg replacing a bridge that has a 5 t load limit), or To ensure the infrastructure is of sufficient quality to meet the service requirements (eg pipe failure) Parkes Shire Council Drainage asset register

42 40 It is possible to get some indication of capital renewal and replacement priorities by identifying assets or asset groups that: Have a high consequence of failure, Have a high utilisation and subsequent impact on users would be greatest, The total value represents the greatest net value to the organisation, Have the highest average age relative to their expected lives, Are identified in the AM Plan as key cost factors, Have high operational or maintenance costs, and Where replacement with modern equivalent assets would yield material savings. 11 The ranking criteria used to determine priority of identified renewal and replacement proposals is detailed in Table Table 5.4.2: Renewal and Replacement Priority Ranking Criteria Criteria Weighting Hierarchy 30% Condition 20% Risk 50% Total 100% Council will adopt renewal and replacement priority ranking criteria in next version of stormwater asset management plan Renewal and replacement standards Renewal work is carried out in accordance with the following Standards and Specifications. Council s Engineering Design Standards AS/NZS4058 Precast concrete pipes AS/NZS3725 Design for installation of buried concrete pipes NATSPEC Australian Rainfall and Runoff (AR&R) Summary of future renewal and replacement expenditure Projected future renewal and replacement expenditures are forecast to increase over time as the asset stock increases from growth. The expenditure is summarised in Fig 5. Note that all amounts are shown in real values. The projected capital renewal and replacement program is shown in Appendix B. 10 IPWEA, 2011, IIMM, Sec 3.4.4, p Based on IPWEA, 2011, IIMM, Sec 3.4.5, p 3 66.

43 41 Fig 5: Projected Capital Renewal and Replacement Expenditure Note: Drainage assets available in Parkes Airport need to be renewed by 2020 although acquisition dates of assets need to be reviewed as a part of the improvement plan. All other stormwater drainage assets are servicing in good condition. Deferred renewal and replacement, ie those assets identified for renewal and/or replacement and not scheduled in capital works programs are to be included in the risk analysis process in the risk management plan. Renewals and replacement expenditure in the Council s capital works program will be accommodated in Council s long term financial plan. This is further discussed in Section 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 4.4. Projects (including land purchase) for the extension or upgrading of assets required to cater for growth or additional levels of service, including: Works which create an asset that did not exist in any shape or form, or Works which improves an asset beyond its original size or capacity, or Upgrade works which increase the capacity of an asset, or Works designed to produce an improvement in the standard and operation of the asset beyond its original capacity.

44 42 New works create an asset that did not exist, or extend an asset beyond its original size or capacity. New works can be split up into two groups: 1. Capital upgrade 2. Capital new 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 renewal estimate. Verified proposals are ranked by priority and available funds and scheduled in future works programs. The priority ranking criteria is detailed below. Table 5.5.1: New Assets Priority Ranking Criteria Criteria Weighting Expansion of Stormwater assets is made based on corporate priorities to meet community expectations and as identified in the Community Strategic Plan Assessed on Community Plan Priority and the availability of funding (either from Council s Capital Works Program or by grants) to build and prepare lifecycle costs. Total 100% Council will adopt new asset priority ranking criteria in next version of stormwater asset management plan Capital Investment Strategies Council will plan capital upgrade and new projects to meet level of service objectives by: Planning and scheduling capital upgrade and new projects to deliver the defined level of service in the most efficient manner, Undertake project scoping for all capital upgrade/new projects to identify: o the service delivery deficiency, present risk and required timeline for delivery of the upgrade/new asset, o the project objectives to rectify the deficiency including value management for major projects, o the range of options, estimated capital and life cycle costs for each options that could address the service deficiency, o management of risks associated with alternative options, o and evaluate the options against evaluation criteria adopted by Council, and o select the best option to be included in capital upgrade/new programs, Review current and required skills base and implement training and development to meet required construction and project management needs, Review management of capital project management activities to ensure Council is obtaining best value for resources used. Standards and specifications for new assets and for upgrade/expansion of existing assets are the same as those for renewal shown in Section

45 Summary of future upgrade/new assets expenditure Projected upgrade/new asset expenditures are summarised in Fig 6. The projected upgrade/new capital works program is shown in Appendix C. All amounts are shown in real values. Fig 6: Projected Capital Upgrade/New Asset Expenditure Note: New or upgrades totalling $2.7 M over 20 years ($0.135 M per annum) have been included in this asset management plan. New assets and services are to be funded from capital works program and grants where available. Expenditure on new assets and services in Council s capital works program will be accommodated in Council s long term financial plan. This is further discussed in Section Disposal Plan Disposal includes any activity associated with disposal of a decommissioned asset including sale, demolition or relocation. Assets identified for possible decommissioning and disposal are shown in Table 5.6, together with estimated annual savings from not having to fund operations and maintenance of the assets. These assets will be further reinvestigated to determine the required levels of service and see what options are available for alternate service delivery, if any. Any revenue gained from asset disposals is accommodated in Council s long term financial plan. There is currently no policy and plan to dispose Stormwater assets.

46 44 6. 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 Fig 7 for projected operating (operations and maintenance) and capital expenditure (renewal and upgrade/expansion/new assets). Note that all costs are shown in real values. Note: Fig 7: Projected Operating and Capital Expenditure Figure 7 indicates that the council is in surplus for short term but the spike in 2020 represents the stormwater assets at the airport reaching the end of their lifecycle which requires a fund of $0.88 M for renewal. The total surplus amount from the year 2013 to 2019 is $ M. Overall by considering several demanding factors for spending on stormwater assets such as, improvement of drainage network due to town growing, climate change, deferring works over number of years, the actual surplus(53,000 p.a.) might not be sufficient to meet assets renewal and upgrading requirements. In addition some of the Stormwater assets are expected to reach the end of their life after 20 years of planning period which need to scheduled a renewal and maintenance program to prevent failure of assets. Knowing that the airport assets are approaching predicted end of life in 2020, provides Parkes Shire Council to validate the data and plan for the renewal of the assets. Acquisition dates of assets need to be reviewed as a part of the improvement plan Sustainability of 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

47 45 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 12 74% The Asset Renewal Funding Ratio is the most important indicator and reveals that over the next 10 years, Council is forecasting that it will have 74% of the funds required for the optimal renewal and replacement of its assets. 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 $357,000 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 $197,000 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 $160,000 per year ( ve = gap, +ve = surplus). Life cycle expenditure is 55% 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. If the life cycle expenditure is less than that life cycle cost, it is most likely that outlays will need to be increased or cuts in services made in the future. 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 $230,000 on average per year. Estimated (budget) operations, maintenance and capital renewal funding is $197,000 on average per year giving a 10 year funding shortfall of $32,000 per year. This indicates that Council expects to have 86% of the projected expenditures needed to provide the services documented in the asset management plan. Medium Term 5 year financial planning period 12 AIFMG, 2009, Financial Sustainability Indicator 8, Sec 2.6, p 2.18

48 46 The projected operations, maintenance and capital renewal expenditure required over the first 5 years of the planning period is $130,000 on average per year. Estimated (budget) operations, maintenance and capital renewal funding is $178,000 on average per year giving a 5 year funding surplus of $48,000. This indicates that Council expects to have 137% of projected expenditures required to provide the services shown in this asset management plan. 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: Asset Management Financial Indicators Providing services from infrastructure in a sustainable manner requires the matching and managing of service levels, risks, projected expenditures and financing to achieve a financial indicator of approximately 1.0 for the first years of the asset management plan and ideally over the 10 year life of the Long Term Financial Plan. Figure 8 shows the projected asset renewal and replacement expenditure over the 20 years of the AM Plan. The projected asset renewal and replacement expenditure is compared to renewal and replacement expenditure in the capital works program, which is accommodated in the long term financial plan

49 47 Figure 8: Projected and LTFP Budgeted Renewal Expenditure Fig 8 shows the asst renewals projected from data in the asset register compare this to asset renewal planned in forward capital programs and planned (year1) renewal expenditures as a proxy for current renewal expenditure. The planned renewal expenditures are sourced from the planned expenditure template. Table shows the shortfall between projected renewal and replacement expenditures and expenditure accommodated in long term financial plan. Budget expenditures accommodated in the long term financial plan or extrapolated from current budgets are shown in Appendix D. Year Table 6.1.1: Projected and LTFP Budgeted Renewals and Financing Shortfall Projected Renewals ($000) LTFP Renewal Budget ($000) Renewal Financing Shortfall ($000) ( ve Gap, +ve Surplus) Cumulative Shortfall ($000) ( ve Gap, +ve Surplus) 2013 $0 $73 $73 $ $0 $48 $48 $ $0 $45 $45 $ $0 $45 $45 $ $0 $38 $38 $ $0 $38 $38 $ $0 $89 $89 $ $888 $68 $820 $445

50 $0 $90 $90 $ $0 $68 $68 $ $0 $60 $60 $ $0 $60 $60 $ $0 $60 $60 $ $0 $60 $60 $ $0 $60 $60 $ $0 $60 $60 $ $0 $60 $60 $ $0 $60 $60 $ $0 $60 $60 $ $0 $60 $60 $312 Note: A negative shortfall indicates a financing gap, a positive shortfall indicates a surplus for that year. Providing services in a sustainable manner will require matching of projected asset renewal and replacement expenditure to meet agreed service levels with the corresponding capital works program accommodated in the long term financial plan. A gap between projected asset renewal/replacement expenditure and amounts accommodated in the LTFP indicates that further work is required on reviewing service levels in the AM Plan (including possibly revising the LTFP) before finalising the asset management plan to manage required service levels and funding to eliminate any funding gap. We will manage the gap by developing this asset management plan to provide guidance on future service levels and resources required to provide these services, and review future services, service levels and costs with the community Projected expenditures for long term financial plan Table shows the projected expenditures for the 10 year long term financial plan. Expenditure projections are in 2011 real values. Year Table 6.1.2: Projected Expenditures for Long Term Financial Plan ($000) Operations ($000) Maintenance ($000) Projected Capital Renewal ($000) Capital Upgrade/ New ($000) Disposals ($000) 2013 $23.80 $95.20 $0.00 $ $ $39.50 $97.96 $0.00 $ $ $25.26 $ $0.00 $ $0.00

51 $26.40 $ $0.00 $ $ $27.32 $ $0.00 $87.50 $ $28.23 $ $0.00 $87.50 $ $29.17 $ $0.00 $ $ $30.29 $ $ $ $ $31.38 $ $0.00 $ $ $32.55 $ $0.00 $ $ $30.49 $ $0.00 $ $ $30.68 $ $0.00 $ $ $30.86 $ $0.00 $ $ $31.05 $ $0.00 $ $ $31.23 $ $0.00 $ $ $31.42 $ $0.00 $ $ $31.61 $ $0.00 $ $ $31.79 $ $0.00 $ $ $31.98 $ $0.00 $ $ $32.17 $ $0.00 $ $ Funding Strategy After reviewing service levels, as appropriate to ensure ongoing financial sustainability projected expenditures identified in Section will be accommodated in the Council s 10 year long term financial plan. Achieving the financial strategy will require: Increasing revenue streams, rates and user charges; Cost analysis from a reduced service level and implementation; Deferring capital upgrades/new works and reallocates funds to capital renewal work; and It is assumed that mining boom will increase the population of Parkes Shire thus increasing the need for capital expenditure (new works and renewals), Use of loans to fund renewal could be an option. In order to reduce/eliminate the funding gap and provide the required funds for the renewal/replacement of stormwater assets, the following measures need to be undertaken: 1. Rationalization of asset renewal/replacement it is very important to thoroughly investigate asset conditions, estimate the remaining of their useful life and prioritize maintenance/renewal/replacement works accordingly. Asset renewal/replacement to be carried out based on asset conditions, rather than asset age.

52 50 2. Monitor the fees and charges for maintenance/operations tasks and adjust them based on the actual cost, 3 Allocatation of Separate job number for maintenance, operation and renewal and capital in our finance system (practical) in order to correctly separate these costs in the analysis. 4. Cost analysis from a reduced service level and implementation 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 real 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

53 51 The depreciated replacement cost 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 depreciated replacement cost of contributed and new assets is shown in the darker colour and in the lighter colour for existing assets. Note: Figure 11: Projected Depreciated Replacement Cost The decline in depreciated replacement cost (written down value) is indicative of the longer term decline in these assets. This will physically be evident by reducing service levels along with increasing maintenance and risk. 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: Asset inventory is correct as at 30 January 2011 for the purpose of providing annual depreciation costs for the asset class. Maintenance allocations are largely based on maintaining current level of expenditure Accuracy of future financial forecasts may be improved in future revisions of this asset management plan by the following actions. Refining level of service. Refining useful lives for assets Refining planned maintenance and renewal for asset classes Improving the accuracy of the current asset register Improving asset inspection procedures Refinement of growth forecasts used in the current plan Refining accurate unit rates for asset classes Key assumptions made in this asset management plan and risks that these may change are shown in Table 6.4.

54 52 Table 6.4: Key Assumptions made in AM Plan and Risks of Change Key Assumptions Rate used for valuation of asset are based on council investigation and estimation of current cost from existing projects Financial forecasts are based on maintaining current Levels of Service According to Council s long term Financial Plan, Council is not able to increase operational funding and expenditure to maintain the current level of services. Council may be required to borrow for stormwater infrastructure renewal Assets will remain in Council ownership throughout the planning period. Risks of Change to Assumptions Valuations will need to be updated regularly, from existing projects, otherwise there will be an increased risk of uncertainty in the valuation Current level of service cannot be maintained Not enough funding for renewal of ageing assets, will affect asset prices, asset conditions, and risk failures of assets. Forecasts are based on current equipment and construction cost and will be influenced by cost increases in materials and labour Asset renewal costs are generally based on staff assessment of renewal needs, and the life expectancy of the asset. Wages may increase above CPI and/or construction cost index may increase higher than CPI. (e.g. Bitumen costs are linked to petrol prices) Misestimating of the assessment 6.5 Forecast Reliability and Confidence The expenditure and valuations projections in this AM Plan are based on best available data. Currency and accuracy of data is critical to effective asset and financial management. Data confidence is classified on a 5 level scale 13 in accordance with Table 6.5. Table 6.5: Data Confidence Grading System Confidence Grade A Highly reliable B Reliable C Uncertain D Very Uncertain E Unknown Description Data based on sound records, procedures, investigations and analysis, documented properly and recognised as the best method of assessment. Dataset is complete and estimated to be accurate ± 2% Data based on sound records, procedures, investigations and analysis, documented properly but has minor shortcomings, for example some of the data is old, some documentation is missing and/or reliance is placed on unconfirmed reports or some extrapolation. Dataset is complete and estimated to be accurate ± 10% Data based on sound records, procedures, investigations and analysis which is incomplete or unsupported, or extrapolated from a limited sample for which grade A or B data are available. Dataset is substantially complete but up to 50% is extrapolated data and accuracy estimated ± 25% Data is based on unconfirmed verbal reports and/or cursory inspections and analysis. Dataset may not be fully complete and most data is estimated or extrapolated. Accuracy ± 40% None or very little data held. The estimated confidence level for and reliability of data used in this AM Plan is shown in Table Table 6.5.1: Data Confidence Assessment for Data used in AM Plan 13 IPWEA, 2011, IIMM, Table 2.4.6, p 2 59.

55 53 Data Confidence Assessment Comment Demand drivers B Growth projections B Operations expenditures B Maintenance B expenditures Projected Renewal exps. B Asset values Asset residual values C Asset useful lives B Condition modelling B Network renewals B Defect repairs C Upgrade/New B expenditures Disposal expenditures D Over all data sources the data confidence is assessed as B confidence level for data used in the preparation of this AM Plan.

56 54 7. PLAN IMPROVEMENT AND MONITORING 7.1 Status of Asset Management Practices Accounting and financial systems Council currently has Practical as its Corporate Accounting Software. Practical has developed an Asset Management module, but this may not provide the required level of information required by a dedicated Asset Management System. Accountabilities for financial systems In Parkes Shire Council, the Finance manager and is a responsible for supervising and handling financial reports, accounting and all kind of financial analysis for the council. Council's Director Technology and Corporate Services oversee all finance work and financial System accountabilities. Accounting standards and regulations The Local Government Act 1993 requires that Council prepare and maintain all accounting records, accounts and financial statements in accordance with all relevant Australian Accounting Standards. The following accounting standards and guidelines must be complied with: AASB 116 Property, Plant & Equipment prescribes requirements for recognition and depreciation of property, plant and equipment assets AASB 136 Impairment of Assets aims to ensure that assets are carried at amounts that are not in excess of their recoverable amounts AASB 1021 Depreciation of Non Current Assets specifies how depreciation is to be calculated AAS 1001 Accounting Policies specifies the policies that Council is to have for recognition of assets and depreciation AASB 1041 Accounting for the reduction of Non Current Assets specifies the frequency and basis of calculating depreciation and revaluation basis used for assets AAS 1015 Accounting for acquisition of assets method of allocating the value to new assets on acquisition AAS 27 Financial reporting by Local Government AAS 1010 Recoverable Amounts of Non Current Assets specifies requirement to test the reasonableness of valuations Capital/maintenance threshold Council's financial thresholds and activities are developed to assist in determining when expenditure is capitalised or operationalized (popularly known as CAPEX and OPEX budgeting). The objective of the Accounting/ Capitalization Policy is to provide guidance around identifying, classifying, valuing, recording and disposing of non current physical assets. As capitalization policy is under process, currently the above information presented in Parkes Shire Council General Purpose financial statements each year ended 30 June. It provides greater understanding and accuracy of council s capital requirements and depreciation expenses in the context of financial sustainability and intergenerational equity as well as ensuring that Council is meeting its statutory reporting obligations. Required changes to accounting financial systems arising from this AM Plan

57 55 Capitalisation policy needs to be developed in order to describe in financial and non financial terms what is considered to be a new asset (capital expenditure) and what is considered to be just maintenance. This will also require to make changes to Job Cost Numbers in Practical to reflect both split between CAPEX (Renewals and Capital Works) and OPEX (Operation and Maintenance Works) Asset Management systems The AM role in PSC encompasses most of the AM Planning and analysis required to define what need to be delivered at the operational and project level. The other teams that are illustrated in following chart focus on operational delivery of those projects and programs. Corporate and Strategic Planning Strategic plans/goals Financial management/am Plan approval Corporate risk management/performance monitoring Asset Management Team level of service and demand planning O&M and CAPEX strategy/planning Forward works programs and budgets Asst risk management and performance monitoring prepare AM plan Works/Operation Transport, Open Space Support Services Aerodrome Swimming pool Natural Resource Management Water, Sewer, Drainage, Storm Water Environmental Planning &Building Buildings Cemeteries Waste Disposal Finance Accounting and Asset Management Team Role and supporting team The figure below follows the step by step logic of the Asset Management planning process. Parkes Shire Council Asset management system needs to excel in some area such as; defining asset condition, risk management, splitting maintenance, operation and capital works and quality management

58 56 Define Requirements Developing Lifecycle Strategies AM Enablers AM Policy Financial and Funding Strategies AM Team Level of Service Future Demand Asset Knowledge Asset Condition Decision Making Techniques Capital Works Strategies Maintenance Strategies Operational Strategies AM Plans Systems and Tools Service Delivery Quality Management Asset and Business Risk Continuous Improvement Source: International Infrastructure Management Manual( IIMM) Figure 1.3.1: The asset Management Process

59 57 Existing Asset Management System: Currently, the Asset data is recorded in Council s Geographical Information System (GIS) MapInfo. It is intended to import this data into Assetic to improve Council s data integrity and reporting capabilities. This data will link to MapInfo to provide a geographical representation of the asset. The data has been collected by a few methods over the past few years, and continues to be a resource intensive process to maintain and improve the integrity of the data. Careful consideration of data requirements and collection procedures are required to ensure accuracy (and reliability) of the data, but not to become so onerous that the system becomes unmanageable. Data for the Stormwater group has been collected by the following methods: Field data collection using mobile collection devices such as; GPS, field computers and PDA s Desktop data collection (digitising of visible assets on aerial images within the GIS). Council s historical records. A data collection program should capture information on assets and infrastructure, and accurately store information about the assets attributes. With this information the program user can easily and confidently interrogate the information for quick and useful reports. Currently PSC uses MapInfo, for this purpose. Council is in the process of educating and implementing Assetic software to assist in Asset Management Systems. The key information flows into the asset management plan are: The asset register data on size, age, value, remaining life of the network; The unit rates for categories of work/material; The adopted service levels; Projections of various factors affecting future demand for services; Data on new assets acquired by council. The key information flows from the asset management plan are: The assumed Works Program and trends; The resulting budget, valuation and depreciation projections; The useful life analysis. These will impact the Long Term Financial Plan, Strategic Business Plan, annual budget and departmental business plans and budgets. New assets can be realised in any one of the following ways: Donated to Council from developers Constructed as part of a project The Asset Team identifies new assets through the following processes: Notification of new subdivisions by the Design and Traffic Team Notification of Council projects through the Project Management and Risk Working Party (and PIMP) Works Team 2 week schedule Financial analysis of the job costing system It is important that good As Constructed information is supplied by developers. To improve the quality, Council will need to adopt standards to ensure consistent and reliable plans are submitted. As Parkes Shire does not have a large growth rate, Council s Technical Officers may be able to collect new Assets as they are constructed. This will require a close working relationship with the Design and Traffic Team to receive notification of current works. In times of higher growth, this may not be sufficient and Council will be more reliant on information received by Developers. At the end of each financial year, The Asset Team is responsible for reviewing construction projects, and split the assets into categories. Capital items need to be reported in the end of year financial reports, so a close working

60 58 relationship is required with the Finance Team. Council recognises the sensitivity of new asset creation as opposed to maintenance or repair. Future Asset Management System (Under process): Snapshot of council New Asset Management System Assetic Assetic has a long track record in providing specialist Asset Management Solutions specific to government authorities needs and requirements. Following figure shows the general structure of software. Structure of Assetic Software My Data is a central register for all asset classes and includes in built reporting, works tracking & life cycle costing. My Valuer is a central asset account owned or managed by an agency. My Benchmark is a national corporate benchmark and modelling system that can be applied for national standardisation of Asset Management Practice. My Predictor is a performance modelling tool that is designed to cater for long term planning of infrastructure assets. It is based on the recommendations in the international Infrastructure Manual (IIMM). Assetic s philosophy is to be industry centric. Recent developments such as NAMS Guidelines, BCA codes, Austroads updates, WASA guidelines and NGER reporting for calculating emissions are now part of the continuous improvement in Assetic software. Assetic product development has been based on strong industry partnerships among asset management team, finance department of organization and different related departments.

61 59 Asset registers A Geographical Information System (GIS) is a database that also contains spatial (location) information. Therefore can be displayed on a digital map. Parkes Shire Council currently uses a product called MapInfo as a asset Register and each asset category has an unique identification number in the council asset register. The purpose of an asset identification system is to provide a unique identifier for each asset for assigning and retrieving information. Asset Identification under the Stormwater group identify with following numbering system: D PI PK 1A 0001 The first alpha character is D which represents the Drainage asset group. The next two characters refer to the asset component: PI = Pipe PT = Pit OP = Open pipe RB = Retention basin RT = Retention Tank The next two characters refer to the location of the assets: PK: Parkes AR: Air Port The next two digits represent Catchment Area ID which are denoted as 1A, 1C, 2A, 2B etc. The last four digits represent component ID. Linkage from asset management to financial system Currently asset data is held within MapInfo and exported to Excel for Valuation calculations. A summary page is developed and manually transferred (at a high level) into the General Ledger (Practical). The finance system is the responsibility of the Financial Services Group. The life cycle asset management database is the joint responsibility of the civil maintenance and information management function. Council s long term Financial Model included in the Resource Strategy demonstrates Council s financial position and its capacity to fund additional major capital expenditure, continued asset renewal and any potential increase in services or service levels. It has been prepared in accordance with the provisions of the Local Government Amendment (Planning and Reporting) Act 2009 and the associated guidelines and manual.

62 60 Financial data analysis shows that Council is in surplus in short term but in long term council is in shortfall. This is because all drainage assets in Parkes Airport are due for renewal in 2020 which will need a fund of $0.88 M and the total surplus amount over the year 2013 to 2019 is $0.375 M. Therefore, Council is in shortage of $0.505 M which affects long term planning. Thus clearly the Council, with its current income, has no capacity to fund additional facilities or upgrades. This has particular relevance given that there is already a gap identified between planned stormwater asset renewals and projected stormwater asset renewals. The following options will be suggested: Option 1 Services or service levels are decreased, The stormwater asset capacity, hierarchy, serviceability, and usage must be studied, with the possibility for disposal of some assets or reducing the level of service for underutilised assets. Option 2 Additional funding sources are identified. One of the effective sources of funding could be a rate rise. Parkes Shire Council has conducted a comprehensive community information and engagement campaign during May August 2012 to measure community support for a rate variation. The Community Engagement process generated 947 projects and initiatives for the delivery plan. The projects and initiatives have been grouped into 61 categories within the eight future directions of Parkes Shire Community Strategic Plan. It was distributed to all households in paper form and was also available for completion electronically through Survey Gizmo web based Survey tool. The Special Rate Variation Process and how it will be managed Parkes Shire Council has made the difficult decision to seek a Special Rate Variation (SRV) from the NSW Independent Pricing and Regulatory Tribunal(IPART) in line with the funding model to support the Progressive Delivery Program. This has been made with the realisation that this is the most responsible means by which the objectives of this CSP can be met and adequately resourced This sees a cumulative 10% increase a year for four years above the existing rate cap estimated at 3%. This would after the four years total a 63%. The adopted draft IP & R Planning documentation including this Community Strategic Plan will be placed on display for submissions for a period of 28 days from the 30th of January Council will consider any submissions made and has until March 14th to submit a finalised Special Rate Variation application under Section 508A of the Local Government Act 1993 to IPART. IPART will then consider this application and Council will be advised in June 2013 of the decision of IPART and the approved General Rate level set. Although Council believes it has a strong case to support its application ultimately IPART have the discretion to refuse any rise above the cap that was set on the 26th of November 2012 being 3.4%, or alternatively a percentage increase anywhere from the level of the cap up to and including the full amount sought being 13% each year for 4 years. This means some of the projects, initiatives or items in Delivery Program and Operational Plan that support this plan may be impacted. Council will have to review these documents after the determination of IPART to see which of these items will be subject to adjustment or elimination. Similarly the items as they appear in the Capital Works Programs in both the 4 Year Financial Forecasts and the Operational Budget will have t o be reviewed. The following options and characteristics of each scenario as well as possible variations and refinements were discussed and the community were asked to vote for the best options. Scenario 1 Current Situation Minimum CPI Scenario 2 Static 10% for four (4) years

63 61 Scenario 3 Progressive 13% for four (4) years The Long Term Financial Plan (LTFP) also provides a means for determining service levels and the rate of infrastructure renewal possible, based on different funding scenarios (i.e. Current Situation Static Progressive) Asset Management planning enables the relationship between cost of service and level of service to be explored, so that the local, regional and national community can decide what they are prepared to pay for. The current Asset Management Plan and Strategy has been developed based on the current funding situation (Scenario 1). Capital upgrade and renewal plans, and maintenance projects, have been identified and forecasted for Scenario2 (Static 10% for four (4) years), and Scenario 3 (Progressive 13% for four (4) years). If the Community and Councillors elect to proceed with the static or progressive scenario there will be a flow on effect with the Workforce Plan (i.e. a need to increase capacity to respond to renewal and capital projects). Comparison of Current and Progressive Scenario of funding: This asset management plan is based on Scenario 1 of funding. The following graphs and tables shows the impact of Scenario 3 funding (Progressive) and the forecasts of how and where to spend additional funding to decrease the gap identified between planned Stormwater asset renewals and projected Stormwater asset renewals. Following Projects has been forecasted for Stormwater Assets if The Progressive Scenario of funding is successful. Year Progressive parkes shire drainage maintenance program P* Drainage Stormwater Management Planning Tullamore P* Drainage Stormwater Management Planning Bogan Gate $ 50,000 $ 10,000 $ 40,000 Total Year 1 Stormwater $ 100,000 Year P* Drainage Progressive Parkes shire drainage maintenance program $ 50, P* Drainage Stormwater Management Planning Tullamore $ 40,000 Flood Management Plan Cookamidgera $ 10,000 Total Year 2 Stormwater $ 100,000 Year Progressive Parkes shire drainage maintenance program P* Drainage $ 50,000 Drainage Stormwater Management Planning Peak Hill $ 60, P* Drainage Flood Management Plan Cookamidgera $ 5,000 Drainage Drainage Network Capacity Enhancement $ 185,000

64 62 Total Year 3 Stormwater $ 300,000 Year Progressive Parkes shire drainage maintenance program P* Drainage $ 50,000 Drainage Drainage Network Capacity Enhancement $ 450,000 Total Year 4 Stormwater $ 500,000 * The Action number in a delivery plan Replacement program Additional funding has been added to current renewal funding for the years , as it has been forecasted in above table, and the following model has been created for progressive Scenario of funding.

65 63

66 64 Current Projected Operating and Capital Expenditure Current Progressive Projected Operating and Capital Expenditure Progressive Drainage Network Capacity Enhancement Airport Stormwater Drainage Assets Airport Stormwater Drainage Assets Parkes SC: Projected Operating and Capital Expenditure (Stormwater_S1_V8) Data Capital Capital Budget Category Yr Maintenance Operations Disposals Upgrade Renewal Expenditure StormwaterS1_V $95 $24 $0 $171 $0 $363 StormwaterS1_V $98 $40 $0 $113 $0 $297 StormwaterS1_V $101 $25 $0 $104 $0 $273 StormwaterS1_V $105 $26 $0 $105 $0 $279 StormwaterS1_V $109 $27 $0 $88 $0 $258 StormwaterS1_V $113 $28 $0 $88 $0 $262 StormwaterS1_V $116 $29 $0 $207 $0 $436 StormwaterS1_V $121 $30 $0 $158 $888 $371 Parkes SC: Projected Operating and Capital Expenditure (Stormwater Progressive_S1_V9) Data Capital Capital Budget Category Year Maintenance Operations Disposals Upgrade Renewal Expenditure ProgressiveS1_V $145 $24 $0 $171 $0 $413 ProgressiveS1_V $148 $40 $0 $113 $0 $347 ProgressiveS1_V $151 $25 $0 $289 $0 $508 ProgressiveS1_V $157 $27 $0 $555 $0 $779 ProgressiveS1_V $113 $28 $0 $88 $0 $258 ProgressiveS1_V $117 $29 $0 $88 $0 $262 ProgressiveS1_V $121 $30 $0 $207 $0 $436 ProgressiveS1_V $125 $31 $0 $158 $888 $371

67 65 StormwaterS1_V $125 $31 $0 $210 $0 $450 StormwaterS1_V $130 $33 $0 $158 $0 $380 StormwaterS1_V $116 $30 $0 $140 $0 $337 StormwaterS1_V $116 $31 $0 $140 $0 $337 StormwaterS1_V $117 $31 $0 $140 $0 $337 StormwaterS1_V $118 $31 $0 $140 $0 $337 StormwaterS1_V $118 $31 $0 $140 $0 $337 StormwaterS1_V $119 $31 $0 $140 $0 $337 StormwaterS1_V $120 $32 $0 $140 $0 $337 StormwaterS1_V $121 $32 $0 $140 $0 $337 StormwaterS1_V $121 $32 $0 $140 $0 $337 StormwaterS1_V $122 $32 $0 $140 $0 $337 *all Dollar Values in ($'000)'s* ProgressiveS1_V $130 $32 $0 $210 $0 $450 ProgressiveS1_V $135 $33 $0 $158 $0 $380 ProgressiveS1_V $141 $31 $0 $203 $0 $421 ProgressiveS1_V $142 $32 $0 $203 $0 $421 ProgressiveS1_V $143 $32 $0 $203 $0 $421 ProgressiveS1_V $144 $32 $0 $203 $0 $421 ProgressiveS1_V $145 $32 $0 $203 $0 $421 ProgressiveS1_V $147 $33 $0 $203 $0 $421 ProgressiveS1_V $148 $33 $0 $203 $0 $421 ProgressiveS1_V $149 $33 $0 $203 $0 $421 ProgressiveS1_V $150 $33 $0 $203 $0 $421 ProgressiveS1_V $151 $34 $0 $203 $0 $421 *all Dollar Values in ($'000)'s* Executive Summary What does it cost? Current *all Dollar Values in ($'000)'s* 10 year total cost [10 yr Ops, Maint, Renewal & Upgrade Proj Exp] $3, Year Average Cost $ year total LTFP budget [10 yr Ops, Maint, Renewal & Upgrade LTFP Budget] $3, year average LTFP budget $ year AM financial indicator 91% 10 year average funding shortfall $32 Valuations Current Executive Summary What does it cost? Progressive *all Dollar Values in ($'000)'s* 10 year total cost [10 yr Ops, Maint, Renewal & Upgrade Proj Exp] $4, Year Average Cost $ year total LTFP budget [10 yr Ops, Maint, Renewal & Upgrade LTFP Budget] $4, year average LTFP budget $ year AM financial indicator 92% 10 year average funding shortfall $36 Valuations Progressive Asset Values ('$000) Current Replacement Value $21,828 Depreciable Amount $21,828 Depreciated Replacement Cost $14,635 Annual Depreciation Charge $217 Asset Values ('$000) Current Replacement Value $21,828 Depreciable Amount $21,828 Depreciated Replacement Cost $14,635 Annual Depreciation Charge $217 Rate of Annual Asset Consumption 1% Rate of Annual Asset Renewal 0.30% Rate of Annual Asset Upgrade 0.80% Rate of Asset Upgrade (Including Contributed Assets) 0.80% Rate of Annual Asset Consumption 1% Rate of Annual Asset Renewal 0.30% Rate of Annual Asset Upgrade 0.80% Rate of Asset Upgrade (Including Contributed Assets) 0.80%

68 66 Asset renewals as percentage of consumption 33.80% Percentage Increase in asset stock 0.80% Sustainability Current Asset Renewal Funding Ratio Asset Renewal Funding Ratio 74 % Life Cycle Cost (long term)'($000) Life Cycle Cost [average 10 years projected ops, maint exp and deprn.] $357 Life Cycle Exp [average 10 years LTFP budget ops, maint & capital renewal exp] $197 Life Cycle Gap [life cycle expenditure life cycle cost [ ve = gap] $164 Life Cycle Indicator [life cycle expenditure / life cycle cost] 55 % Asset renewals as percentage of consumption 33.80% Percentage Increase in asset stock 0.80% Sustainability Progressive Asset Renewal Funding Ratio Asset Renewal Funding Ratio 74 % Life Cycle Cost (long term)'($000) Life Cycle Cost [average 10 years projected ops, maint exp and deprn.] $381 Life Cycle Exp [average 10 years LTFP budget ops, maint & capital renewal exp] $217 Life Cycle Gap [life cycle expenditure life cycle cost [ ve = gap] $164 Life Cycle Indicator [life cycle expenditure / life cycle cost] 57 % Medium Term (10 yrs) Sustainability 10 yr Ops, Maint & Renewal Projected Expenditure $ yr Ops, Maint & Renewal LTFP Budget Exp $ year financing shortfall [10 yr proj exp LTFP Budget exp] $32 10 year financing indicator [LTFP Budget exp / 10 yr proj exp] 86 % Short Term (5 yrs) Sustainability 5 yr Ops, Maint & Renewal Projected Expenditure $130 5 yr Ops, Maint & Renewal LTFP Budget Exp $178 5 year financing shortfall [10 yr proj exp LTFP Budget exp] $48 5 year financing indicator [LTFP Budget exp / 5 yr proj exp] 137 % Medium Term (10 yrs) Sustainability 10 yr Ops, Maint & Renewal Projected Expenditure $ yr Ops, Maint & Renewal LTFP Budget Exp $ year financing shortfall [10 yr proj exp LTFP Budget exp] $36 10 year financing indicator [LTFP Budget exp / 10 yr proj exp] 86 % Short Term (5 yrs) Sustainability 5 yr Ops, Maint & Renewal Projected Expenditure $172 5 yr Ops, Maint & Renewal LTFP Budget Exp $218 5 year financing shortfall [10 yr proj exp LTFP Budget exp] $47 5 year financing indicator [LTFP Budget exp / 5 yr proj exp] 127 %

69 67 Accountabilities for asset management system and data maintenance Council's Asset Manager oversees all matters relating to asset management system and data maintenance on a day to day basis. While he and his team has direct involvement, other relevant Council staff, external consultants, contractors and agencies provided necessary assistance as and when required. The following chart shows PSC Asset Management Team structure: Manager Assets GIS Officer Assets Property Officer Assets Engineer Technical Officer Technical Officer PSC Asset Management Team structure Required changes to asset management system arising from this AM Plan As a result of this asset management plan, the following changes are proposed for the asset management system: Full implementation of Assetic Tighter integration with the GIS so that all assets can be located easily with accuracy and confidence; Transition to a work order system for work planning and control; Add additional asset data to the asset register to make the system more useful for staff ; Link customer requests with specific assets or asset types; Identify new and innovative ways to reduce renewal costs; Rationalise Council s asset needs, or identify non asset solutions to providing services; and Continually revise the Stormwater Asset management plan as Council s financial situation changes (i.e. if the progressive scenario rate rising is approved). 7.2 Improvement Program The asset management improvement plan generated from this asset management plan is shown in Table 8.2. Table 7.2: Improvement Plan Task No 1 Record and report on expenditures, with separate costs for operations, maintenance and capture capital expenditures as renewal or upgrade/new Task Responsibility Resources Required Asset Natural Resources Finance Staff Time from Finance and Assets to develop costing codes Timeline Commenced, completed by end March

70 68 2 Linking of the customer service system to the corporate asset register to link requests to asset records 3 Continue to Improve project cost accounting to record costs against the asset component and develop valuation unit rates Asset Natural Resources 4 Review the accuracy and currency of asset data Asset Natural Resources 5 Review methodology for determining remaining life, with detail assessment for assets requiring renewal in the medium term (next years). Staff Time, implementation of AM system (Assetic) Asset Finance Staff Time, Improve Project Management process, so that projects can be closed prior to the end of year Asset Natural Resources Finance Staff Time Staff Time To commence after migration of data from MapInfo into Assetic. June 2013 Continuing, TBA An outcome should be that the remaining lives from the asset register will generate a renewal scenario aligning with the Works Program and Long Term Financial Plan. 6 Continue to review the procedures for maintaining the Asset and Financial Registers 7 Develop procedures to inspect and capture CCTV images of Stormwater networks and update Condition Assessments. 8 Develop a regular inspection & maintenance plan for Stormwater assets 9 Plan and allocate budget for implementation of projects defined in investigation of CAIR requests on drainage problems (Ref Sec 3.1) 10 Develop a schedule for renewal of Airport drainage assets Asset Finance Natural Resources Asset Natural Resources Assets Natural Resources Asset Finance Design Natural Resources Asset Support Services Finance Design Natural Resources 11 Update capital works program Asset Finance Natural Resources Staff Time, Develop quarterly financial reports, improve Project Management practices to include asset collection Staff Time and Contractor Staff time, CC camera Staff contractor Staff contractor time time Staff time identify capital/new projects, prepare Finance has implemented financial reporting software (BIS). Project Management practices have been implemented and need continual monitoring and improvement, particularly the closing of projects TBA TBA TBA TBA TBA

71 69 estimates, schedule & budget for implementation 7.3 Monitoring and Review Procedures This asset management plan will be reviewed during the annual budget planning process and amended to recognise any material changes in service levels and/or resources available to provide those services as a result of budget decisions. The AM Plan will be amended annually to ensure it represents the current service level, asset values, projected operations, maintenance, capital renewal and replacement, capital upgrade/new and asset disposal expenditures and projected expenditure values incorporated into the Council s long term financial plan. The AM Plan has a life of 4 years (Council election cycle) and is due for complete revision and updating within four years of each Council election. 7.4 Performance Measures The effectiveness of the Asset Management Plan can be measured in the following ways: The degree to which the required projected expenditures identified in this asset management plan are incorporated into Council s long term financial plan, 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, The degree to which the existing and projected service levels and service consequences (what we cannot do), risks and residual risks are incorporated into the Council s Strategic Plan and associated plans, The Asset Renewal Funding Ratio achieving the target of 1.0.

72 70 8. 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, Parkes Shire Council Strategic Plan Parkes Shire Council Community Plan Parkes Shire Council Annual Plan and Budget

73 71 9. APPENDICES Appendix A Appendix B Works Program Appendix C Appendix D Appendix E Appendix F Operation and Maintenance Response Levels of Service Projected 10 year Capital Renewal and Replacement Projected 10 year Capital Upgrade/New Works Program Budgeted Expenditures Accommodated in LTFP Abbreviations Glossary

74 72 Appendix A Maintenance Response Levels of Service To be developed.

75 73 Appendix B Projected 10 year Capital Renewal and Replacement Works Program Parkes SC Report 6 Appendix B 10 year Renewal & Replacement Program (Stormwater_S1_V8) Asset ID Sub Rem Planned Renewal Useful Category Asset Name From To Life Renewal Cost Life (Years) Year ($) (Years) DPIAPA001 DRAIN PI RCPC $8, DPIAPA002 DRAIN PI RCPC $22, DPIAPA007 DRAIN PI RCPC $7, DPIAPA008 DRAIN PI RCPC $7, DPIAPA009 DRAIN PI RCPC $8, DPIAPA010 DRAIN PI RCPC $4, DPIAPA011 DRAIN PI RCPC $2, DPIAPA012 DRAIN PI RCPC $4, DPIAPA013 DRAIN PI RCPC $6, DPIAPA014 DRAIN PI RCPC $6, DPIAPA015 DRAIN PI RCPC $5, DPIAPA032 DRAIN PI RCPC $8, DPIAPA033 DRAIN PI RCPC $8, DPIAPA036 DRAIN PI RCPC $ DPIAPA037 DRAIN PI RCPC $5, DPIAPA038 DRAIN PI RCPC $ DPIAPA039 DRAIN PI RCPC $5, DPIAPA040 DRAIN PI RCPC $ DPIAPA042 DRAIN PI RCPC $ DPIAPA044 DRAIN PI RCPC $ DPIAPA046 DRAIN PI RCPC $ DPIAPA048 DRAIN PI RCPC $ DPIAPA051 DRAIN PI RCPC $6, DPIAPA052 DRAIN PI RCPC $6, DPIAPB001 DRAIN PI RCPC $7, DPIAPB002 DRAIN PI RCPC $7, DPIAPB003 DRAIN PI RCPC $7, DPIAPA003 DRAIN PI RCPC $10, DPIAPA004 DRAIN PI RCPC $10, DPIAPA016 DRAIN PI RCPC $11, DPIAPA017 DRAIN PI RCPC $10, DPIAPA034 DRAIN PI RCPC $11, DPIAPA035 DRAIN PI RCPC $11, DPIAPA041 DRAIN PI RCPC $6, DPIAPA043 DRAIN PI RCPC $5, DPIAPB004 DRAIN PI RCPC $10, DPIAPB005 DRAIN PI RCPC $9, DPIAPB006 DRAIN PI RCPC $10, DPIAPA005 DRAIN PI RCPC $6,565 80

76 74 DPIAPA006 DRAIN PI RCPC $6, DPIAPA018 DRAIN PI RCPC $14, DPIAPA019 DRAIN PI RCPC $9, DPIAPA020 DRAIN PI RCPC $11, DPIAPA045 DRAIN PI RCPC $6, DPIAPA047 DRAIN PI RCPC $8, DPIAPA049 DRAIN PI RCPC $8, DPIAPA050 DRAIN PI RCPC $7, DPIAPA053 DRAIN PI RCPC $14, DPIAPB007 DRAIN PI RCPC $12, DPIAPB008 DRAIN PI RCPC $12, DPIAPB009 DRAIN PI RCPC $12, DPIAPA021 DRAIN PI RCPC $19, DPIAPA022 DRAIN PI RCPC $17, DPIAPA023 DRAIN PI RCPC $16, DPIAPA024 DRAIN PI RCPC $16, DPIAPB010 DRAIN PI RCPC $17, DPIAPB011 DRAIN PI RCPC $17, DPIAPB012 DRAIN PI RCPC $16, DPIAPB013 DRAIN PI RCPC $19, DPIAPB014 DRAIN PI RCPC $25, DPIAPA025 DRAIN PI RCPC $1, DPIAPA026 DRAIN PI RCPC $ DPIAPA027 DRAIN PI RCPC $ DPIAPA028 DRAIN PI RCPC $2, DPIAPA029 DRAIN PI RCPC $25, DPIAPA030 DRAIN PI RCPC $31, DPIAPA031 DRAIN PI RCPC $130, DPTAPA001 DRAIN PT GR $2, DPTAPA002 DRAIN PT GR $2, DPTAPA003 DRAIN PT GR $2, DPTAPA004 DRAIN PT GR $2, DPTAPA005 DRAIN PT GR $2, DPTAPA006 DRAIN PT GR $2, DPTAPA008 DRAIN PT GR $2, DPTAPA009 DRAIN PT GR $2, DPTAPA010 DRAIN PT GR $2, DPTAPA011 DRAIN PT GR $2, DPTAPA012 DRAIN PT GR $2, DPTAPA013 DRAIN PT GR $2, DPTAPA014 DRAIN PT GR $2, DPTAPA015 DRAIN PT GR $2, DPTAPA016 DRAIN PT GR $2, DPTAPA017 DRAIN PT GR $2, DPTAPA018 DRAIN PT GR $2, DPTAPA019 DRAIN PT GR $2,088 80

77 75 DPTAPA020 DRAIN PT GR $2, DPTAPA021 DRAIN PT GR $2, DPTAPA022 DRAIN PT GR $2, DPTAPA023 DRAIN PT GR $2, DPTAPA024 DRAIN PT GR $2, DPTAPA025 DRAIN PT GR $2, DPTAPA026 DRAIN PT GR $2, DPTAPA027 DRAIN PT GR $2, DPTAPA028 DRAIN PT GR $2, DPTAPA029 DRAIN PT GR $2, DPTAPA030 DRAIN PT GR $2, DPTAPA031 DRAIN PT GR $2, DPTAPA033 DRAIN PT GR $2, DPTAPA034 DRAIN PT GR $2, DPTAPA035 DRAIN PT GR $2, DPTAPA050 DRAIN PT GR $2, DPTAPA051 DRAIN PT GR $2, DPTAPA052 DRAIN PT GR $2, DPTAPA053 DRAIN PT GR $2, DPTAPB001 DRAIN PT GR $2, DPTAPB002 DRAIN PT GR $2, DPTAPB003 DRAIN PT GR $2, DPTAPB004 DRAIN PT GR $2, DPTAPB005 DRAIN PT GR $2, DPTAPB006 DRAIN PT GR $2, DPTAPB007 DRAIN PT GR $2, DPTAPB008 DRAIN PT GR $2, DPTAPB009 DRAIN PT GR $2, DPTAPB010 DRAIN PT GR $2, DPTAPB011 DRAIN PT GR $2, DPTAPB012 DRAIN PT GR $2, DPTAPB013 DRAIN PT GR $2, DPTAPB014 DRAIN PT GR $2, DPTAPA036 DRAIN PT GR $2, DPTAPA038 DRAIN PT GR $2, DPTAPA040 DRAIN PT GR $2, DPTAPA042 DRAIN PT GR $2, DPTAPA044 DRAIN PT GR $2, DPTAPA046 DRAIN PT GR $2, DPTAPA048 DRAIN PT GR $2, DPTAPA007 DRAIN PT HW $ DPTAPA054 DRAIN PT HW $ DPTAPB015 DRAIN PT HW $ DPTAPA032 DRAIN PT HW $ DPTAPA037 DRAIN PT JB $1, DPTAPA039 DRAIN PT JB $1,440 80

78 76 DPTAPA041 DRAIN PT JB $1, DPTAPA043 DRAIN PT JB $1, DPTAPA045 DRAIN PT JB $1, DPTAPA047 DRAIN PT JB $1, DPTAPA049 DRAIN PT JB $1, Subtotal $887,566 Program Total $887,566

79 77 Appendix C Projected Upgrade/Exp/New 10 year Capital Works Program Year Capital Upgrade and New Projects Estimate 2013 Planned upgrade/new (Projects to be advised) $ 171, Planned upgrade/new (Projects to be advised) $ 113, Planned upgrade/new (Projects to be advised) $ 104, Planned upgrade/new (Projects to be advised) $ 105, Planned upgrade/new (Projects to be advised) $ 88, Planned upgrade/new (Projects to be advised) $ 88, Planned upgrade/new (Projects to be advised) $ 207, Planned upgrade/new (Projects to be advised) $ 158, Planned upgrade/new (Projects to be advised) $ 210, Planned upgrade/new (Projects to be advised) $ 158,000

80 78 Appendix D Budgeted Expenditures Accommodated in LTFP

81 79 Appendix D.1 Stormwater asset condition profile Location Catch ment Asset type Compo nent Descripti on Current age Estimat ed Life Remain ing life Age as % of useful life Condition Parkes 1A, 1C, 3M, 3V Drain OP OP < 25% E Parkes 1A, 1B, 1C, 3A, 3C, 3D, 3E, 3J, Drain PI RCPC, RCBC, < 25% E 3L, 3M, 3N, 3O, 3P, 4A upvc 1A, 1B, 1C, 2A, Parkes 3A, 3C, GR, HW, 3D, 3E, Drain PT JB, KI, KIG, 3J, 3L, MH 3M, 3N, < 25% E 3O, 3P, 3V, 4A 1A, 2A, 2B, 2C, Parkes 3F, 3K, Drain OP OP < 50% Very Good 3M, 3O, 3S, 3U Parkes 1A, 1B, 2A, 2B, 2C, 2D, 3C, 3D, 3E, 3F, 3G, 3H, Drain PI RCPC, RCBC, < 50% Very Good 3I, 3J, 3K, 3L, 3M, 3N, 3O, 3Q, 3R, 3S, 3U upvc Parkes 1A, 1B, 2A, 2B, 2C, 2D, 3C, 3D, 3E, 3F, 3G, 3H, Drain PT GR, HW, JB, KI, KIG, < 50% Very Good 3I, 3J, 3K, 3L, 3M, 3N, 3O, 3Q, 3R, 3S, 3U MH Airport A, B Drain HW HW % Average Parkes 2D, 3U Drain OP OP % Good Parkes 3S Drain PI RCPC % Good Parkes 3S, 3U Drain PT HW, JB, KI % Good Airport A, B Drain HW HW % Average Airport A, B Drain PI RCPC % Average Airport A, B Drain PT GR, JB % Average Parkes 2A, 3B, 3B Drain RB OP Unlimite d 10 na E

82 80 Appendix E Abbreviations AAAC AM AM Plan ARI ASC BOD CRC CWMS DA DRC EF IRMP LCC LCE LTFP MMS PCI RV SoA SS vph WDCRD Average annual asset consumption Asset management Asset management plan Average recurrence interval Annual service cost Biochemical (biological) oxygen demand Current replacement cost Community wastewater management systems Depreciable amount Depreciated replacement cost Earthworks/formation Infrastructure risk management plan Life Cycle cost Life cycle expenditure Long term financial plan Maintenance management system Pavement condition index Residual value State of the Assets Suspended solids Vehicles per hour Written down current replacement cost

83 81 Appendix F Glossary Annual service cost (ASC) 1) Reporting actual cost The annual (accrual) cost of providing a service including operations, maintenance, depreciation, finance/opportunity and disposal costs less revenue. 2) For investment analysis and budgeting An estimate of the cost that would be tendered, per annum, if tenders were called for the supply of a service to a performance specification for a fixed term. The Annual Service Cost includes operations, maintenance, depreciation, finance/ opportunity and disposal costs, less revenue. Asset A resource controlled by an entity as a result of past events and from which future economic benefits are expected to flow to the entity. Infrastructure assets are a sub class of property, plant and equipment which are non current assets with a life greater than 12 months and enable services to be provided. Asset category Sub group of assets within a class hierarchy for financial reporting and management purposes. Asset class A group of assets having a similar nature or function in the operations of an entity, and which, for purposes of disclosure, is shown as a single item without supplementary disclosure. Asset condition assessment The process of continuous or periodic inspection, assessment, measurement and interpretation of the resultant data to indicate the condition of a specific asset so as to determine the need for some preventative or remedial action. Asset hierarchy A framework for segmenting an asset base into appropriate classifications. The asset hierarchy can be based on asset function or asset type or a combination of the two. Asset management (AM) The combination of management, financial, economic, engineering and other practices applied to physical assets with the objective of providing the required level of service in the most cost effective manner. Asset renewal funding ratio The ratio of the net present value of asset renewal funding accommodated over a 10 year period in a long term financial plan relative to the net present value of projected capital renewal expenditures identified in an asset management plan for the same period [AIFMG Financial Sustainability Indicator No 8]. Average annual asset consumption (AAAC)* The amount of an organisation s asset base consumed during a reporting period (generally a year). This may be calculated by dividing the depreciable amount by the useful life (or total future economic benefits/service potential) and totalled for each and every asset OR by dividing the carrying amount (depreciated replacement cost) by the remaining useful life (or remaining future economic benefits/service potential) and totalled for each and every asset in an asset category or class. Borrowings A borrowing or loan is a contractual obligation of the borrowing entity to deliver cash or another financial asset to the lending entity over a specified period of time or at a specified point in time, to cover both the initial capital provided and the cost of the interest incurred for providing this capital. A borrowing or loan provides the means for the borrowing entity to finance outlays (typically physical assets) when it has insufficient funds of its own to do so, and for the lending entity to make a financial return, normally in the form of interest revenue, on the funding provided. Capital expenditure Relatively large (material) expenditure, which has benefits, expected to last for more than 12 months. Capital expenditure includes renewal, expansion and upgrade. Where capital projects involve a combination of renewal, expansion and/or upgrade expenditures, the total project cost needs to be allocated accordingly. Capital expenditure expansion Expenditure that extends the capacity of an existing asset to provide benefits, at the same standard as is currently enjoyed by existing beneficiaries, to a new group of users. It is discretionary expenditure, which increases future operations and maintenance costs, because it increases the organisation s asset base, but may be associated with additional revenue from the new user group, eg. extending a

84 82 drainage or road network, the provision of an oval or park in a new suburb for new residents. Capital expenditure new Expenditure which creates a new asset providing a new service/output that did not exist beforehand. As it increases service potential it may impact revenue and will increase future operations and maintenance expenditure. Capital expenditure renewal Expenditure on an existing asset or on replacing an existing asset, which returns the service capability of the asset up to that which it had originally. It is periodically required expenditure, relatively large (material) in value compared with the value of the components or sub components of the asset being renewed. As it reinstates existing service potential, it generally has no impact on revenue, but may reduce future operations and maintenance expenditure if completed at the optimum time, eg. resurfacing or resheeting a material part of a road network, replacing a material section of a drainage network with pipes of the same capacity, resurfacing an oval. Capital expenditure upgrade Expenditure, which enhances an existing asset to provide a higher level of service or expenditure that will increase the life of the asset beyond that which it had originally. Upgrade expenditure is discretionary and often does not result in additional revenue unless direct user charges apply. It will increase operations and maintenance expenditure in the future because of the increase in the organisation s asset base, eg. widening the sealed area of an existing road, replacing drainage pipes with pipes of a greater capacity, enlarging a grandstand at a sporting facility. Capital funding Funding to pay for capital expenditure. Capital grants Monies received generally tied to the specific projects for which they are granted, which are often upgrade and/or expansion or new investment proposals. Capital investment expenditure See capital expenditure definition Capitalisation threshold The value of expenditure on non current assets above which the expenditure is recognised as capital expenditure and below which the expenditure is charged as an expense in the year of acquisition. Carrying amount The amount at which an asset is recognised after deducting any accumulated depreciation / amortisation and accumulated impairment losses thereon. Class of assets See asset class definition Component Specific parts of an asset having independent physical or functional identity and having specific attributes such as different life expectancy, maintenance regimes, risk or criticality. Core asset management Asset management which relies primarily on the use of an asset register, maintenance management systems, job resource management, inventory control, condition assessment, simple risk assessment and defined levels of service, in order to establish alternative treatment options and longterm cashflow predictions. Priorities are usually established on the basis of financial return gained by carrying out the work (rather than detailed risk analysis and optimised decision making). Cost of an asset The amount of cash or cash equivalents paid or the fair value of the consideration given to acquire an asset at the time of its acquisition or construction, including any costs necessary to place the asset into service. This includes one off design and project management costs. Critical assets Assets for which the financial, business or service level consequences of failure are sufficiently severe to justify proactive inspection and rehabilitation. Critical assets have a lower threshold for action than noncritical assets. Current replacement cost (CRC) The cost the entity would incur to acquire the asset on the reporting date. The cost is measured by reference to the lowest cost at which the gross future economic benefits could be obtained in the normal course of business or the minimum it would cost, to replace the existing asset with a technologically modern equivalent new asset (not a second hand one) with the same economic benefits (gross service potential) allowing for any differences in the quantity and quality of output and in operating costs.

85 83 Deferred maintenance The shortfall in rehabilitation work undertaken relative to that required to maintain the service potential of an asset. Depreciable amount The cost of an asset, or other amount substituted for its cost, less its residual value. Depreciated replacement cost (DRC) The current replacement cost (CRC) of an asset less, where applicable, accumulated depreciation calculated on the basis of such cost to reflect the already consumed or expired future economic benefits of the asset. Depreciation / amortisation The systematic allocation of the depreciable amount (service potential) of an asset over its useful life. Economic life See useful life definition. Expenditure The spending of money on goods and services. Expenditure includes recurrent and capital outlays. Fair value The amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties, in an arms length transaction. Financing gap A financing gap exists whenever an entity has insufficient capacity to finance asset renewal and other expenditure necessary to be able to appropriately maintain the range and level of services its existing asset stock was originally designed and intended to deliver. The service capability of the existing asset stock should be determined assuming no additional operating revenue, productivity improvements, or net financial liabilities above levels currently planned or projected. A current financing gap means service levels have already or are currently falling. A projected financing gap if not addressed will result in a future diminution of existing service levels. Heritage asset An asset with historic, artistic, scientific, technological, geographical or environmental qualities that is held and maintained principally for its contribution to knowledge and culture and this purpose is central to the objectives of the entity holding it. Impairment Loss The amount by which the carrying amount of an asset exceeds its recoverable amount. Infrastructure assets Physical assets that contribute to meeting the needs of organisations or the need for access to major economic and social facilities and services, eg. roads, drainage, footpaths and cycleways. These are typically large, interconnected networks or portfolios of composite assets. The components of these assets may be separately maintained, renewed or replaced individually so that the required level and standard of service from the network of assets is continuously sustained. Generally the components and hence the assets have long lives. They are fixed in place and are often have no separate market value. Investment property Property held to earn rentals or for capital appreciation or both, rather than for: (a) use in the production or supply of goods or services or for administrative purposes; or (b) sale in the ordinary course of business. Key performance indicator A qualitative or quantitative measure of a service or activity used to compare actual performance against a standard or other target. Performance indicators commonly relate to statutory limits, safety, responsiveness, cost, comfort, asset performance, reliability, efficiency, environmental protection and customer satisfaction. Level of service The defined service quality for a particular service/activity against which service performance may be measured. Service levels usually relate to quality, quantity, reliability, responsiveness, environmental impact, acceptability and cost. Life Cycle Cost * 1. Total LCC The total cost of an asset throughout its life including planning, design, construction, acquisition, operation, maintenance, rehabilitation and disposal costs. 2. Average LCC The life cycle cost (LCC) is average cost to provide the service over the longest asset life cycle. It comprises average operations, maintenance expenditure plus asset consumption expense, represented by depreciation expense projected over 10 years. The Life Cycle Cost does not indicate the funds required to provide the service in a particular year.

86 84 Life Cycle Expenditure The Life Cycle Expenditure (LCE) is the average operations, maintenance and capital renewal expenditure accommodated in the long term financial plan over 10 years. Life Cycle Expenditure may be compared to average Life Cycle Cost to give an initial indicator of affordability of projected service levels when considered with asset age profiles. Loans / borrowings See borrowings. Maintenance All actions necessary for retaining an asset as near as practicable to an appropriate service condition, including regular ongoing day to day work necessary to keep assets operating, eg road patching but excluding rehabilitation or renewal. It is operating expenditure required to ensure that the asset reaches its expected useful life. Planned maintenance Repair work that is identified and managed through a maintenance management system (MMS). MMS activities include inspection, assessing the condition against failure/breakdown criteria/experience, prioritising scheduling, actioning the work and reporting what was done to develop a maintenance history and improve maintenance and service delivery performance. Reactive maintenance Unplanned repair work that is carried out in response to service requests and management/ supervisory directions. Specific maintenance Maintenance work to repair components or replace sub components that needs to be identified as a specific maintenance item in the maintenance budget. Unplanned maintenance Corrective work required in the short term to restore an asset to working condition so it can continue to deliver the required service or to maintain its level of security and integrity. Maintenance expenditure * Recurrent expenditure, which is periodically or regularly required as part of the anticipated schedule of works required to ensure that the asset achieves its useful life and provides the required level of service. It is expenditure, which was anticipated in determining the asset s useful life. Materiality The notion of materiality guides the margin of error acceptable, the degree of precision required and the extent of the disclosure required when preparing general purpose financial reports. Information is material if its omission, misstatement or non disclosure has the potential, individually or collectively, to influence the economic decisions of users taken on the basis of the financial report or affect the discharge of accountability by the management or governing body of the entity. Modern equivalent asset Assets that replicate what is in existence with the most cost effective asset performing the same level of service. It is the most cost efficient, currently available asset which will provide the same stream of services as the existing asset is capable of producing. It allows for technology changes and, improvements and efficiencies in production and installation techniques Net present value (NPV) The value to the organisation of the cash flows associated with an asset, liability, activity or event calculated using a discount rate to reflect the time value of money. It is the net amount of discounted total cash inflows after deducting the value of the discounted total cash outflows arising from eg the continued use and subsequent disposal of the asset after deducting the value of the discounted total cash outflows. Non revenue generating investments Investments for the provision of goods and services to sustain or improve services to the community that are not expected to generate any savings or revenue to the Council, eg. parks and playgrounds, footpaths, roads and bridges, libraries, etc. Operations Regular activities to provide services such as public health, safety and amenity, eg street sweeping, grass mowing and street lighting. Operating expenditure Recurrent expenditure, which is continuously required to provide a service. In common use the term typically includes, eg power, fuel, staff, plant equipment, on costs and overheads but excludes maintenance and depreciation. Maintenance and depreciation is on the other hand included in operating expenses.

87 85 Operating expense The gross outflow of economic benefits, being cash and non cash items, during the period arising in the course of ordinary activities of an entity when those outflows result in decreases in equity, other than decreases relating to distributions to equity participants. Operating expenses Recurrent expenses continuously required to provide a service, including power, fuel, staff, plant equipment, maintenance, depreciation, on costs and overheads. Operations, maintenance and renewal financing ratio Ratio of estimated budget to projected expenditure for operations, maintenance and renewal of assets over a defined time (eg 5, 10 and 15 years). Operations, maintenance and renewal gap Difference between budgeted expenditures in a long term financial plan (or estimated future budgets in absence of a long term financial plan) and projected expenditures for operations, maintenance and renewal of assets to achieve/maintain specified service levels, totalled over a defined time (e.g. 5, 10 and 15 years). Pavement management system (PMS) A systematic process for measuring and predicting the condition of road pavements and wearing surfaces over time and recommending corrective actions. PMS Score A measure of condition of a road segment determined from a Pavement Management System. Rate of annual asset consumption * The ratio of annual asset consumption relative to the depreciable amount of the assets. It measures the amount of the consumable parts of assets that are consumed in a period (depreciation) expressed as a percentage of the depreciable amount. Rate of annual asset renewal * The ratio of asset renewal and replacement expenditure relative to depreciable amount for a period. It measures whether assets are being replaced at the rate they are wearing out with capital renewal expenditure expressed as a percentage of depreciable amount (capital renewal expenditure/da). Rate of annual asset upgrade/new * A measure of the rate at which assets are being upgraded and expanded per annum with capital upgrade/new expenditure expressed as a percentage of depreciable amount (capital upgrade/expansion expenditure/da). Recoverable amount The higher of an asset's fair value, less costs to sell and its value in use. Recurrent expenditure Relatively small (immaterial) expenditure or that which has benefits expected to last less than 12 months. Recurrent expenditure includes operations and maintenance expenditure. Recurrent funding Funding to pay for recurrent expenditure. Rehabilitation See capital renewal expenditure definition above. Remaining useful life The time remaining until an asset ceases to provide the required service level or economic usefulness. Age plus remaining useful life is useful life. Renewal See capital renewal expenditure definition above. Residual value The estimated amount that an entity would currently obtain from disposal of the asset, after deducting the estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life. Revenue generating investments Investments for the provision of goods and services to sustain or improve services to the community that are expected to generate some savings or revenue to offset operating costs, eg public halls and theatres, childcare centres, sporting and recreation facilities, tourist information centres, etc. Risk management The application of a formal process to the range of possible values relating to key factors associated with a risk in order to determine the resultant ranges of outcomes and their probability of occurrence. Section or segment A self contained part or piece of an infrastructure asset. Service potential

88 86 The total future service capacity of an asset. It is normally determined by reference to the operating capacity and economic life of an asset. A measure of service potential is used in the not for profit sector/public sector to value assets, particularly those not producing a cash flow. Service potential remaining A measure of the future economic benefits remaining in assets. It may be expressed in dollar values (Fair Value) or as a percentage of total anticipated future economic benefits. It is also a measure of the percentage of the asset s potential to provide services that is still available for use in providing services (Depreciated Replacement Cost/Depreciable Amount). Value in Use The present value of future cash flows expected to be derived from an asset or cash generating unit. It is deemed to be depreciated replacement cost (DRC) for those assets whose future economic benefits are not primarily dependent on the asset's ability to generate net cash inflows, where the entity would, if deprived of the asset, replace its remaining future economic benefits. Source: IPWEA, 2009, Glossary Additional and modified glossary items shown * Specific Maintenance Replacement of higher value components/subcomponents of assets that is undertaken on a regular cycle including repainting, replacement of air conditioning equipment, etc. This work generally falls below the capital/ maintenance threshold and needs to be identified in a specific maintenance budget allocation. Strategic Longer Term Plan A plan covering the term of office of councillors (4 years minimum) reflecting the needs of the community for the foreseeable future. It brings together the detailed requirements in the Council s longer term plans such as the asset management plan and the long term financial plan. The plan is prepared in consultation with the community and details where the Council is at that point in time, where it wants to go, how it is going to get there, mechanisms for monitoring the achievement of the outcomes and how the plan will be resourced. Sub component Smaller individual parts that make up a component part. Useful life Either: (a) the period over which an asset is expected to be available for use by an entity, or (b) the number of production or similar units expected to be obtained from the asset by the entity. It is estimated or expected time between placing the asset into service and removing it from service, or the estimated period of time over which the future economic benefits embodied in a depreciable asset, are expected to be consumed by the Council.