Service Asset Management Plan - A Guide to the Bule City Council

Transcription

1 1 st Cut AMP Draft Version 1.00 June 2014 Services Asset Management Plan Part A General Information Incorporated with: Part B Road Network Part C Pathways Part D Bridges Part E Stormwater Drainage System Part F Playgrounds Part G Open Space Assets Prepared by CT Management Group for the Banyule City Council

2 DOCUMENT CONTROL CT Management Group PO Box 1374 GEELONG VIC 3220 Phone: (03) Web: Document: Project Manager: Ian Mann Author: Services Asset Management Plan Part A General Information Banyule City Council Jim Henshelwood Date: June 2014 Synopsis: Services Asset Management Plan for Banyule City Council s infrastructure assets developed in accordance with the International Infrastructure Management Manual guidelines. CONSULTANTS DISTRIBUTION SCHEDULE Version No. Date Distribution Reference Version 1.00 SCHEDULE OF ADOPTION Version No. Date Comment Authority Reference Disclaimer: This document may be of assistance to you but CT Management Group Pty Ltd do not guarantee that the document is without flaw of any kind and therefore disclaims all liability for any errors, loss or other consequence which may arise from you relying on any information in this publication. It should be noted that information provided in this document may change at short notice. Banyule SAMP Part 'A' General Version 1- Draft docx Page 2 of 27

3 Table of Contents 1.0 EXECUTIVE SUMMARY INTRODUCTION PURPOSE OF THE SERVICES ASSET MANAGEMENT PLAN ROLE OF LOCAL GOVERNMENT IN ASSET OWNERSHIP SAM PLAN FRAMEWORK LINKAGES TO CORPORATE STRATEGIES CORE & ADVANCED ASSET MANAGEMENT ASSET DATA MANAGEMENT & INFORMATION SYSTEMS LEVELS OF SERVICE FUTURE DEMAND RISK MANAGEMENT RISK ASSESSMENT ASSET INSPECTIONS Inspection Arrangements Response to Customer/Reactive Requests Inspection Reporting & Recording STRATEGIC LONG-TERM FINANCIAL NEEDS FINANCIAL MODELLING PREDICTED 10-YEAR RENEWAL FUNDING REQUIREMENTS PREDICTED 10-YEAR MAINTENANCE FUNDING REQUIREMENTS FINANCIAL MANAGEMENT PRACTICES FINANCIAL MANAGEMENT REQUIREMENTS Asset Capitalisation Policy Asset Valuations Asset Depreciation NEW CAPITAL WORKS FUNDING ASSESSMENTS ASSET EXPENDITURE DEFINITIONS LGPRF SERVICE PERFORMANCE INDICATORS STANDARDS, MANUALS & GUIDELINES COUNCIL REFERENCE DOCUMENTS ATTACHMENTS APPENDICES APPENDIX 1 CUSTOMER REQUEST/INSPECTION PROCESS FLOW CHART APPENDIX 2 INSPECTION MANAGEMENT FLOW-CHART APPENDIX 3 GLOSSARY Banyule SAMP Part 'A' General Version 1- Draft docx Page 3 of 27

4 List of Figures Figure 1: Structure of a SAM Plan... 7 Figure 2: Asset Management Plan Relationship to the Business Planning Framework... 9 Figure 3: Asset Management Plan Progression... 9 Figure 4: Asset Management Practices Figure 5: Level of Service Concept Figure 6: LGPRF Development & Implementation Stages List of Tables Table 1: Estimated Resident Population, Banyule LGA (ABS March 2010) Table 2: Asset Expenditure Definitions Table 3: LGPRF Indicator & Measure for Asset Management Plans Council Services Asset Management Plan Part A General Information Part B Road Plan Part C Pathways Plan Part D Bridges Plan Part E Drainage Plan Part F Playgrounds Plan Part G Open Space Assets Plan Road Management Plan Components of the Services Asset Management Plan Banyule SAMP Part 'A' General Version 1- Draft docx Page 4 of 27

5 1.0 Executive Summary Banyule City Council is located between 7 and 21 kilometres north-east of central Melbourne and is made up of 21 suburbs. The City covers an area of approximately 63 square kilometres and is bounded in the south by the Yarra River and in the west by the Darebin Creek. The City is primarily a residential area. While separate houses dominate, increasing numbers of semidetached houses, townhouses and units are being built. Retaining the neighbourhood character of these residential areas is very important to the local community. Banyule also has a number of commercial centres, the largest being the Greensborough Principal Activity Centre and the Heidelberg and Ivanhoe Major Activity Centres. There are significant industrial areas in Heidelberg West, Greensborough/ Briar Hill and Bundoora, and a number of large institutions such as the Austin and Repatriation Medical Centre and Simpson Army Barracks. Banyule City Council is responsible to provide a number of community-focussed services and in doing so must ensure that its infrastructure assets and community facilities are maintained in accordance with well-developed asset management programs and strategic forward plans to enable these services to meet the community needs. Asset management is seen as a practical and financially responsible means of managing Council s assets by ensuring that the assets continue to provide a specified level of service delivery to defined standards over their entire life. Banyule City Council s Services Asset Management Plan provides the framework to deliver optimum operational performance of Council s infrastructure assets in a cost effective manner. The Plan aims to provide a more formalised and transparent approach to asset management. It provides mechanisms to clearly define its asset refurbishment and asset maintenance practices and to mitigate risk. The prime guidance used for development of this Services Asset Management Plan (SAM Plan) is the International Infrastructure Management Manual (IIMM) developed jointly by the NZ National Asset Management Steering Group and the Institute of Public Works Engineering of Australia. This manual is highly recognised around the world as one of, if not the leading Infrastructure Management Manual for public works authorities such as municipal councils. The Plan has been broken into several parts. Part A - General Information associated with managing all asset groups Part B - Road Network Plan Part C - Pathways Plan Part D - Bridges Plan Part E - Stormwater Drainage Plan Part F - Playgrounds Plan Part G - Open Space Assets Plan Each of these Parts will have their own Executive Summary to highlight issues specific to that asset group. Most importantly, the SAM Plan is intended to provide advice to Council on the financial requirements for long-term sustainability of each asset group. This means understanding the impact of any funding gap and a plan to manage that gap where it exists. Banyule SAMP Part 'A' General Version 1- Draft docx Page 5 of 27

6 2.0 Introduction 2.1 Purpose of the Services Asset Management Plan The Services Asset Management Plan is a means of outlining the key elements involved in managing the asset to those people who need to understand the detail. It combines management, financial, engineering and technical practices to ensure that the level of service required by user groups is provided at the lowest long term cost to the community within the limits of any fiscal constraints that may be imposed by Council. This Management Plan is a key element of Council s strategic asset management planning. The specific purpose of the Asset & Service Management Plan is to: Demonstrate responsible stewardship by the Council; Define and articulate how the infrastructure is and will be managed to achieve the organisation s objectives; Provide a basis for customer consultation to determine the appropriate levels of service; Manage risk of asset failure; Achieve savings by optimising whole of life costs; and Support long term financial planning. The outcomes of the Asset & Service Management Plan will identify the future funding requirements service delivery accounting for the following factors: Adopted Levels of Service; Future demand for infrastructure; Current asset performance; Asset Failure; Risk; Required works; and Funding constraints. Council s performance in providing the funding necessary to meet lifecycle renewal needs through asset depreciation will be measured. In addition, such funding has to meet any backlog of works. The plan will endeavour to separate the ongoing annual lifecycle renewal needs from any backlog. 2.2 Role of Local Government in Asset Ownership Municipal councils exist principally to supply various core and non-core services that meet the needs of their communities. The type of services provided and how they are provided depends on the level of service required by the community. Good Governance is enhanced where Councils are able to focus on long-term strategies/policies for asset function as well as day-to-day asset maintenance. The development of this Services Asset Management Plan is considered an important component to enable the long-term planning of its infrastructure. Banyule SAMP Part 'A' General Version 1- Draft docx Page 6 of 27

7 2.3 SAM Plan Framework The prime guidance used for development of Council s Services Asset Management Plan is the framework set out in the Institute of Public Works Engineering Australia s (IPWEA) International Infrastructure Management Manual (IIMM). The IIMM Framework basically sets out how the Council s assets are managed from a Strategic, Tactical and Operational point of view. Then structure of each Plan, including Part A which is common to all plans, is outlined in the following diagram. Figure 1: Structure of a SAM Plan Part A General Information Section 1 Executive Summary Outline of content Key Issues Section 2 Introduction Purpose & Scope of the Plan Role of Local Government Plan Format Section 3 Levels of Service Background to Levels of Service Section 4 Future Demand Background to the Impact of Demand on Assets Section 5 Risk Management Risk Assessment Inspections Section 6 Long Term Financial Needs Use of Moloney Financial Modelling Section 7 Financial Management Practices Financial Management Requirements Work Category Definitions Part B, C etc Individual Group Asset Management Plans Demand Management & Levels of Service Current Levels of Service Community Needs & Expectations Target Community Levels of Service Life Cycle Management Plan Asset Details & General Information Maintenance Maintenance Arrangements Inspection Arrangements Defect Intervention Levels Renewals & Replacements Renewal strategy & plan New, Upgrade, Disposal Planning criteria Financial Management & Management Issues Current financial position Funding capacity Funding options & strategy Management Responsibilities AM Improvements Banyule SAMP Part 'A' General Version 1- Draft docx Page 7 of 27

8 2.4 Linkages to Corporate Strategies Asset Management Plans as component parts of the Services Asset Management Plan will be developed to account for the assets in each category, to monitor the condition of those assets and forecast expenditure requirements for maintenance in the short term and capital replacement in the long term. They are a crucial component of the Council Planning process linking with the following corporate strategies. Long Term Financial Plan (LTFP) - is the key ten year financial planning document of Council that is governed by a series of financial strategies and accompanying performance indicators that Council considers and adopts. It establishes the financial framework upon which sound financial decisions are made. Input to the development of the LTFP is from the Asset Management Plans as each AM Plan will develop its own 10-year financial needs plan. Council Plan is a key strategic document which outlines at a high level what Council intends to achieve over the next four years. The resources required to achieve this plan are detailed in the Strategic Resource Plan. Strategic Resource Plan - outlines the resources required to achieve the objectives detailed in the Council Plan over the next four years. Council Budget - sets out in detail the objectives contained in the Strategic Resource Plan, for the forthcoming financial year. This document is a management level document and is short to medium-term forward looking. It also provides a basis for management to prepare reports to Council to monitor achievement of performance targets. Asset Management Policy the stated intent of this Policy is to provide the guiding principles for current and future management of infrastructure assets, in accordance with the Council Plan and Council s Long-Term Financial Plan. Asset Management Strategy supports the AM Policy and details specific actions to be undertaken by Council to improve asset management capability and achieve specific strategic objectives. Annual Report is intended to inform the community, including residents, ratepayers, and businesses, visitors, government agencies and interested groups. It shows Council s highlights and achievements, along with its issues and challenges of the past year. It aims to inform the community of Council s performance against the commitments set out in the Council Plan. Management Practices - are the administration and management activities required to fulfil Council s philosophy in regards to whole of life asset management as contained within the Asset Management Policy. Contracts the service levels, strategies and information requirements contained in the Asset Management Plans are translated into contract specifications and reporting requirements. Underpinning these strategic documents are numerous processes, methodologies and practices which are undertaken within the day to day activities of the City s administration and management duties. The Asset Management Plan details those activities that relate to managing the network of assets within an asset group. Banyule SAMP Part 'A' General Version 1- Draft docx Page 8 of 27

9 The following chart outlines the linkages between the various components involved in Council s strategic planning process and progression of development of the Services Asset Management Plan. The Asset Management Strategy provides guidance to Council s Financial Strategy and to the City Plan. The Services Asset Management Plan in turn provides input to the Road Management Plan, Financial Management Plan and the Annual Business Plan & Budget. From this the Annual Works Programs for infrastructure maintenance and renewals are developed. Figure 2: Asset Management Plan Relationship to the Business Planning Framework Corporate Strategic Direction City Plan Council Plan Council s Asset Management Policy Council s Asset Management Strategy Various Corporate Strategies & Policies Financial Strategy Annual Business Plan & Budget Legislative Requirements Community Expectations The Asset Management Team Asset & Service Management Plan Review and Audit Asset & Service Management Improvement Planning Service Level Reviews Implementing the Asset & Service Management Plan Services Asset Management Plan Figure 3: Asset Management Plan Progression Asset Management Policy Approved by Council: November 2003 Road Management Plan Approved by Council: December 2004 Asset Management Strategy Approved by Council: November 2003 Services Asset Management Plan Currently in progress Road Network Pathways Bridges Stormwater Drainage Buildings & Facilities Open Space assets Playgrounds Banyule SAMP Part 'A' General Version 1- Draft docx Page 9 of 27

10 2.5 Core & Advanced Asset Management This Services Asset Management Plan has been prepared as a core Asset & Service Management Plan in accordance with the International Infrastructure Management Manual. Its preparation meets 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. Core asset management: takes a lifecycle approach utilises best available current information and random condition and/or performance sampling utilises simple risk assessment to identify critical assets utilises existing levels of service prioritises capital works using simple ranking criteria presents a provisional long-term (10-20 year) Cash-flow predictions based on current knowledge provides financial and critical service performance measures against which trends and AM Plan implementation and improvement can be monitored Future revisions of this Services 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. Advanced Asset Management (AAM) employs predictive modelling, risk management and optimised decision-making techniques to establish life-cycle treatment options and related long term cash flow predictions. The following is a figure of asset management practices. Figure 4: Asset Management Practices Corporate Data Information Systems Corporate Financial System Data analysis and evaluation processes Asset Information System Asset Data Geographic Information System Asset Management Plan Stores Inventory System Corporate Public Request System Implementation Strategies to facilitate service delivery Banyule SAMP Part 'A' General Version 1- Draft docx Page 10 of 27

11 2.6 Asset Data Management & Information Systems The data information systems used for the management of assets involves a combination of processes, data and software. These are applied to provide the essential information outputs for effective asset management of risk and optimum infrastructure maintenance and refurbishments. The systems in use are described in detail in the Asset Management Strategy document. There are three Customer Request Management Systems in use which include Merit CRM (for historic purposes), NOMAD & eservices CRM. Merit CRM System (for historic purposes) captures request types for Infrastructure Maintenance, Graffiti, Older Adult Bookings, Community Safety, Pre-booked collections for Waste Management, Engineering Developments / Drainage & Traffic Engineering. NOMAD Parks & Buildings Request System manages requests for Buildings, Parks Maintenance, Bushland Management, Horticultural Services, and Tree Care & Administration. e-services browser based CRM module manages request for Waste Management (excluding pre-booked collections), Local Laws, Cleansing, Health, Revenue and Risk. The Corporate Accounting System utilised at Council is Civica s Authority Financials. Some of the financial modules include General Ledger, Accounts Receivable, Accounts Payable, Bank Reconciliation, and Requisitioning & Purchasing. Council s Geographic Information System is Exponare (MapInfo). Council uses the SMEC Pavement Management System which captures the road network, including road surface & pavement, pathway and kerb & channel details. The system also assists with modelling which the new e-services AIM (Asset & Infrastructure Management) system does not do. For more information on AIM refer to The table below summarises the current data systems as described above: Module CRM Financials GIS Pavement Management System Merit CRM (for historic purposes), NOMAD & e-services CRM Corporate Authority System, Purple Octopus & Powerbudget Exponare SMEC Council has implemented the Civica Asset & Infrastructure Management System, AIM, as its Corporate Asset Information System. AIM provides full lifecycle analysis of assets within an enterprise wide asset management solution and delivers cohesive processing and reporting requirements to fully meet Council workflows. The system is designed to improve the management of Council s Infrastructure by applying best practice principles to support the delivery of services to its community and customers. The AIM system is a separate application which utilises modules within Authority & uses e-services as a medium to deliver a single consistent environment. Banyule SAMP Part 'A' General Version 1- Draft docx Page 11 of 27

12 3.0 Levels of Service The International Infrastructure Management Manual describes Levels of Service (LOS) as defined service quality for an activity or service area against which service performance may be measured. What do we mean by Levels of Service? VISION What are the community outcomes that Council wants to achieve? SERVICE What services (including their performance levels) are required to meet this vision? INFRASTRUCTURE What infrastructure assets are required to support the service? Figure 5: Level of Service Concept Level of Service (LOS) is the defined quality of service of an asset. Understanding the required level of service is vital for lifecycle management, as this largely determines an asset s development, operation, maintenance, replacement and ultimate disposal. Levels of service are pivotal in asset management as they have a direct financial impact due to their importance in both operational and risk-based prioritisation. An objective of asset management planning is to match the level of service provided by an asset with the expectations of its customers. Asset management Planning will enable a relationship between level of service and cost of service to be determined. This relationship can then be evaluated in consultation with customers to determine the optimum level of service customers are willing to pay for. Levels of service can be broken down into three basic aspects: Function its purpose for the community Design Parameters what is required of and from the asset itself Performance & Presentation - the effectiveness of delivery of the service Levels of Service are determined from the public consultation process and customer satisfaction surveys. They reflect the strategic objectives of Council and are based on: Customer expectations for quality of service and willingness to pay Legislative requirements; environmental standards, regulations and legislation that impacts the way assets are managed Council s mission and objectives as stated in the strategic plan Available resources, particularly financial constraints Organisational delivery mechanisms Design Standards and Codes of Practice Banyule SAMP Part 'A' General Version 1- Draft docx Page 12 of 27

13 Defined levels of service can then be used to: Inform customers of the proposed level of service to be offered Develop AM strategies to deliver the required level of service Measure performance against those defined levels of service Identify the costs and benefits of the services offered Enable customers to assess suitability, affordability and equity of the services offered. Tables in each asset group part of this Services Asset Management Plan will outline what it is assumed to be community expectations in terms of that asset group (eg road & footpath network, buildings & facilities, stormwater drainage system, open space assets, etc) in terms of maintenance and presentation and general levels of service. Levels of service to date have been developed on the basis of available funding through the annual budget process. 4.0 Future Demand The following statistical data on growth within the City of Banyule has been sourced from the Australian Bureau of Statistics. Table 1: Estimated Resident Population, Banyule LGA (ABS March 2010) Local Government Area ERP at 30 June r 2008r 2009p no. no. no. no. no. no. no. no. no. Banyule (C) Annual change: % -0.05% -0.56% 0.46% 0.68% 1.19% 0.94% 1.49% 8 Year change: 4.07% Average over 8 years: 0.51% Population growth over the past 8 years has been averaging around 0.5% so is minimal and in itself is not causing a significant pressure for increasing service demands. Impacts that can cause changes to the existing management environment such as the magnitude of the asset base, levels of service and required funding include changes in growth patterns and also demographics. Other changes include environmental pressures, climatic change and a general desire for the community for changes to services and also service levels. Council has to be able to sustain the level of maintenance & renewals of its infrastructure assets over the long term if it is to provide the community with the services provided by those assets that it wants. The community has to recognise that to do so may well require additional funding. The component individual group asset management plans will outline the specific demand issues relating to that group. Banyule SAMP Part 'A' General Version 1- Draft docx Page 13 of 27

14 5.0 Risk Management 5.1 Risk Assessment Council s risk assessment process is outlined in its Risk Management Policy & Guidelines 2004 document and in the 2006 edition of Council s Asset Management Strategy. The only practicable means of readily identifying risk is by undertaking regular inspections. This process should enable significant risks to be discovered and remedied in advance of possible injury. Risks are to be analysed in terms of consequence and likelihood in the context of those controls. The analysis should consider the range of potential consequences and how likely those consequences are to occur. Consequence and likelihood may be combined to produce an estimated level of risk. The risk assessment of a specific asset component is determined by the specific defect or hazard likely to occur and the function, location, types of users and user numbers. For instance, for footpaths, the risk assessment is determined by size of tripping hazards, slipperiness, unevenness and the location of the defect in terms of its asset hierarchy classification. Hierarchy itself is determined by function, types of users and user numbers. For roads, the risk assessment is determined by the size of various modes of failure and hierarchy classification of the location. In the case of Council buildings, the following are typical of the potential risks that need to be assessed and rated: Tripping or slipping incident where someone is injured. Injury resulting from contact with defect associated with the building (eg protruding nail, hole in floor, etc) Property damage due to vandalism or fire Faulty electrical system results in building user becoming electrocuted. Emergency lighting fails during an emergency Building users trapped in building - fatalities. Fire detection or suppression system fails during a fire, users trapped. Banyule SAMP Part 'A' General Version 1- Draft docx Page 14 of 27

15 5.2 Asset Inspections Inspection Arrangements Each asset group will have its own specific inspection requirements and these will be outlined in their plan. This covers actual requirements and frequencies of inspection types. In general, a four-tier inspection regime has been implemented covering safety, incidents, defects and condition. These requirements can be summarised as follows: Reactive Inspections - Response to customer enquiries or notifications. Inspections of all reported defects are undertaken following notification by members of the community or Council employees. The subsequent inspection will be conducted by an appropriate Council representative. Programmed Inspections determine if the asset complies with the specified levels of service. In the case of roads, they are to be undertaken by under a formal timetable regime. Safety issues may be detected either as the result of the programmed defect inspection or by observation followed by notification to council by members of the community or council employees while undertaking their normal work duties. A subsequent reactive safety inspection will then be conducted by an appropriate council officer. Incident Inspections enables an incident condition report to be prepared for use in legal proceedings and the gathering of information for the analysis of the causes of accidents and the planning and implementation of asset management and safety measures; Condition Inspections - identify deficiencies in the structural integrity of the infrastructure assets, which if untreated, are likely to adversely affect their values. The deficiencies may well impact short-term serviceability as well as the ability of the component to continue to perform for the duration of its intended life span. They are also under a formal timetable regime however at a lesser frequency than the abovementioned programmed inspections Response to Customer/Reactive Requests Currently Council s Customer Request System records dates that requests have been received, details pertaining to the request and dates applicable when those requests have been actioned and/or completed. It should be noted that actioning a request doesn t necessarily mean that the request has been fulfilled but simply that appropriate action has taken place. Appropriate action may well mean that an asset defect has been inspected and: repairs are straight-forward and a work order has been created - the appropriate action in this case is when the repair work has been completed; or repairs are significant and need to be programmed, the site has been made safe until such time as repairs are undertaken - the appropriate action is when the repair work has been listed on the future works program not when it has been completed; or the defect was found not to warrant any remedial action at that stage as it was below specified intervention levels - the appropriate action in this case is when the decision is made that no action is required. Whatever the response, it is noted against the original request. Banyule SAMP Part 'A' General Version 1- Draft docx Page 15 of 27

16 The Customer Request System enables the response times to be monitored to assess performance. This covers response times both for inspections and then the interval until appropriate action is undertaken. The target inspection response times, as outlined in the table below, are: Request for Service Inspection Safety Issues Specific Incident Inspections All Other Requests Target Response Times 24 hours 7 working days 10 working days In terms of maintenance activity, the target defect rectification response times are set out in the Defect Intervention Level Schedules in each of the Group Asset Management Plans covering intervention levels and response times Inspection Reporting & Recording Inspections will occur either as the result of the programmed scheduling or as a direct result of individual issues, notified both externally & internally, that are received & processed through the Customer Request System. To facilitate the inspection process, recording and data transfer mechanisms are utilised to ensure that the Asset Information System is populated with data that reflects as far as practicable the true situation of condition of the asset arising from inspections. Appendix 1 is a flowchart of Council s infrastructure asset inspection and data management process. Banyule SAMP Part 'A' General Version 1- Draft docx Page 16 of 27

17 6.0 Strategic Long-Term Financial Needs 6.1 Financial Modelling Financial modelling enables predictions for future funding requirements to be made based on available data and recent trends in asset life expectancies, condition, replacement costs, etc. Modelling outcome is very much dependent upon the accuracy of the input data and how assets are grouped for modelling. It is not a precise process but does provide a degree of certainty in the outcomes. Banyule City Council, along with a number of other councils in Victoria, under the guidance of the MAV STEP Program has utilised the Moloney Financial Modelling system to establish the order of magnitude of renewal needs of its infrastructure assets. The Moloney Modelling process compares the current renewal expenditure, the asset valuation and quantity, the existing condition of assets and the level at which the asset will be renewed (intervention level) in order to determine the required expenditure to meet the renewal targets. Both existing condition and intervention levels are based on a Moloney 0-10 rating. In the Moloney Renewal Model, the intervention point is known as the Retreatment Intervention Condition Level (RICL). The RICL is the point at which the asset component has deteriorated to such a condition that it is economically prudent to initiate restoration works to bring the condition of that component back to new (condition zero (0)). When performing the evaluation, the Council asset valuation was used in the model. The asset quantities were retrieved from both the Asset database and the Road and Pavements database. The existing asset condition was retrieved from condition audits undertaken annually for buildings and every four years for roads and footpaths. The renewal expenditure was based on the capital budget and works program as well as historical expenditure in maintenance budgets. Intervention levels were set in consultation with service managers and also by reviewing metro council averages. The financial modelling function within the Moloney system has two modelling paths The required capital expenditure model (RCEM) where the condition outcome is nominated and the model predicts capital expenditure. The Proposed Expenditure Model (PEM) where the proposed expenditure is nominated and the model predicts future condition. Each asset group plan within the Services Asset Management Plan has its strategic long-term financial needs assessed through the Moloney Model to enable a consistent outcome of needs to be presented to Council. The Table in Section 6.2 summarises the 10-year predicted asset renewal financial requirements for all major asset groups covered by this plan as determined by utilisation of the Moloney Financial Modelling System. These renewal needs are to be summarised and recorded in Council s Long Term Financial Plan. These figures are indicative and are currently under review in the Asset Category Plans. These Tables will be updated on the sign-off of the individual asset plans. Banyule SAMP Part 'A' General Version 1- Draft docx Page 17 of 27

18 6.2 Predicted 10-Year Renewal Funding Requirements Asset Component Part B Roads, K&C and Car Parks Part C Pathways Part D Bridges Part E - Stormwater Drainage Part F - Playgrounds Part G Open Space Assets TOTAL FOR ASSET RENEWALS 2013/14 Budget Funding Predicted 10-Year Capital Renewal Funding Requirements (Modelled) /15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/ Predicted 10-Year Maintenance Funding Requirements Asset Component Part B Roads, K&C and Car Parks Part C Pathways Part D Bridges Part E - Stormwater Drainage Part F - Playgrounds Part G Open Space Assets TOTAL FOR ASSET RENEWALS 2013/14 Budget Funding Predicted 10-Year Capital Renewal Funding Requirements (Modelled) /15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 Banyule SAMP Part 'A' General Version 1- Draft docx Page 18 of 27

19 7.0 Financial Management Practices 7.1 Financial Management Requirements Asset Capitalisation Policy Capitalisation refers to the level at which assets are recognised in the Council s financial statements. The values of assets to be included in the financial statements are summarised below. Thresholds will be reviewed in the finalisation of Asset Category Plans. The threshold limit for roads, streets and bridges has been split into three categories as shown below: Asset Category Threshold Limit Roads - surface and pavement All Roads - footpath and kerb and channel All Roads - bridges, medians and local area traffic management $10,000 Drainage $5,000 Parks and gardens $1,000 Playgrounds $1,000 Land All Buildings $5,000 Motor vehicles All Plant and equipment $1,000 Furniture and fittings $5,000 Waste management (Big bins) $10,000 Works of art All Asset Valuations Infrastructure and property are revalued at the 30 June in the year of each general biennial revaluation of property within the municipality and are assessed each year to ensure their values don t materially vary from their current values. Any revaluation increase is credited to an asset revaluation reserve except that, where the increase reverses a decrease previously recognised as an expense, it is recognised as revenue for the financial year. Any revaluation decrease is recognised as an expense except that, where the decrease reverses a revaluation increase previously credited to, and still included in the balance of the asset revaluation reserve, it is debited to the revaluation reserve. Asset Valuations: Land and buildings - determined by Council s Valuer in accordance with the Valuation of Land Act It is calculated using market value, as a fair value, based on existing use. Drainage, roads, streets and bridges assets - the valuation represents an estimate of written down current replacement costs determined by reference to engineering construction plans and Melbourne Water base maps after taking into account Banyule SAMP Part 'A' General Version 1- Draft docx Page 19 of 27

20 construction costs written down for the current condition of the assets and the impact of any economic or technical obsolescence. The following asset groups are valued at cost: Parks and gardens assets, motor vehicles, plant and equipment, furniture and fittings, art collection assets, and waste management big bins Asset Depreciation All non-current assets having a limited useful life are systematically depreciated over a period of time in a manner which reflects the useful life of the asset to Council. Land is not a depreciable asset. Council s art collection assets are not considered depreciable. Depreciation of all assets is provided using the straight-line basis with rates that are reviewed each reporting period. The depreciation rates have not changed from the previous year. Useful Lives will be reviewed in the finalisation of Asset Category Plans. Asset Category Depreciation Useful Life Rate % Years Roads, streets and bridges Roads seals Roads sub-structure Bridges Footpaths Kerb, channel and medians Drainage Parks and gardens Playgrounds 4 25 Buildings Motor vehicles Plant and equipment Furniture and fittings Waste management big bins Banyule SAMP Part 'A' General Version 1- Draft docx Page 20 of 27

21 7.2 New Capital Works Funding Assessments The LTFP has adopted a strategy that any new capital works (capital extension) proposals must include a lifecycle cost evaluation exercise that identifies and costs the asset construction, maintenance, operating and depreciation costs ie. Whole of lifecycle costs. Tables in the Asset Management Strategy, Section 5.6, establish the overall cost of each capital works item, including consequential maintenance and operations costs that will be incurred when the project is completed. 7.3 Asset Expenditure Definitions The following Table defines the type of asset expenditure as outlined in Council s Long Term Financial Plan Table 2: Asset Expenditure Definitions Type of Expenditure Definition Purpose/Example Maintenance Capital Renewal Capital Upgrade New/Expansion Capital Expenditure on an asset that maintains the asset in use, but does not increase its service potential or life. Expenditure on an existing asset or a portion of an infrastructure network which returns the service potential, or extends the life of the asset, to its original potential. Expenditure on upgrading the standard of an existing asset to provide a higher level of service, or to extend the life of the asset beyond its original standard. Expenditure on extending an infrastructure network at the same standard enjoyed by existing residents to a new group of users. Life extension: Extending asset lives by repair, reducing average annual consumption costs and renewal rates, eg. Repairing a single pipe in a drainage network or a pothole in a road. Retains an existing service level, eg. Road reseals, resurfacing a footpath. Increases the quality of service provided to ratepayers or provides new services, eg. Widening the pavement of a sealed area of an existing road. New or additional services to developing areas of the municipality or under serviced areas eg. Building a sporting facility. Banyule SAMP Part 'A' General Version 1- Draft docx Page 21 of 27

22 8.0 LGPRF Service Performance Indicators The Victorian Government is working with councils to develop a performance reporting framework to ensure that all councils are measuring and reporting on their performance in a consistent way. Local Government Victoria (LGV) will deliver the Local Government Performance Reporting Framework (LGPRF) in close collaboration with the local government sector. The LGPRF will become mandatory for implementation by councils as part of the planning and reporting cycle in FY The development and implementation of the LGPRF is being carried out in five stages: Figure 6: LGPRF Development & Implementation Stages Stages one to three are now complete with Council's to begin collecting data for the mandatory reporting period commencing 1 July The primary objective of the LGPRF is to provide comprehensive performance information that meets the needs of stakeholders. This is an objective that seeks to balance the needs and expectations of a number of audiences. In meeting this objective: councils will have information to support strategic decision-making and continuous improvement; communities will have information about council performance and productivity; regulators will have information to monitor compliance with relevant reporting requirements; and State and Commonwealth Governments will be better informed to make decisions that ensure an effective, efficient and sustainable system of local government. To provide a comprehensive picture of council performance, four indicator sets: service performance, financial performance, sustainable capacity and governance & management have been developed across three thematic areas: service performance, financial performance and sustainability. An objective for assessing performance against each thematic area has been established to inform the development of performance indicators. From an Asset Management perspective, the indicator to be achieved relates to the development of Asset Management Plans. Banyule SAMP Part 'A' General Version 1- Draft docx Page 22 of 27

23 Table 3: LGPRF Indicator & Measure for Asset Management Plans Dimension Indicator Rationale Measure Definition Computation Data Source Service Outcome Community engagement Indicator of the broad objective that community engagement is important for good decision-making. Having appropriate engagement policies and procedures suggests an improvement in decision-making Asset management plans Plans that set out the asset maintenance and renewal needs for key infrastructure asset classes for at least the next 10 years Assessment Plans, No Plans, or Other Where Council has plans it must also provide details of the date of operation of the current plans. Where Council has no plans it must provide a reason. Council Records Banyule SAMP Part 'A' General Version 1- Draft docx Page 23 of 27

24 9.0 Standards, Manuals & Guidelines Key standards, manuals & guidelines include: International Infrastructure Management Manual (IIMM), IPWEA. Australian Accounting Standards AAS27 and AASB116 Risk Management Standards AS/NZS 4360:2004 & update AS/NZS ISO 31000:2009 Local Government Asset Investment Guidelines DVC, August International Infrastructure Management Manual (2006) - IPWEA Australian Infrastructure Financial Management Guidelines (2009) - IPWEA Developing Levels of Service Performance Measures (Creating Customer Value from Community Assets) Version 2.0, NAMS (NZ) 2007 Sustaining Local Assets Policy Statement 2003, DVC Accounting for Infrastructure Assets Guidelines 2003, DVC 10.0 Council Reference Documents Key Council reference documents include: Banyule Asset Management Policy Banyule Asset Management Strategy Banyule Long Term Financial Plan 2010/ /21 Banyule Council Plan Banyule Strategic Resource Plan Banyule Moloney Renewal Gap Financial Modelling files 11.0 Attachments Part B - Road & Street Plan Part C Pathways Plan Part D Bridges Plan Part E - Stormwater Drainage Plan Part F Playgrounds Plan Part G Open Space Assets Plan 12.0 Appendices Appendix 1: - Customer Request/Inspection Flow Chart Appendix 2: - Inspection Management Flow Chart Appendix 3: - Glossary Banyule SAMP Part 'A' General Version 1- Draft docx Page 24 of 27

25 Appendix 1 Customer Request/Inspection Process Flow Chart Customer Request In person or by phone By fax, letter and Banyule's website Yes Service authority authorisation for reinstatement Infovision DocManager Register document details No Service Authority Request System (SARS) registration MERIT CRM9 Registration of request Council responsibility? No Refer to service or responsible authority Yes No Personal injury has occured? Yes Infrastructure Maintenance Inspect Specific Incident Report (SIR) Site Photos Risk Management Documentation filed by Risk Management in case of Public Liability Claim Infrastructure Maintenance Inspect Schedule Hazardous Immediate repair Non-Hazardous Make safe, prioritise and program work No Action Can not locate reported defect or no work required Infrastructure Work Diary Details, completion date and costs Update MERIT CRM9 Database Finalise request including completion date Respond to Customer if required Banyule SAMP Part 'A' General Version 1- Draft docx Page 25 of 27

26 Appendix 2 Inspection Management Flow-Chart Customer / Officer Request Customer Request System Request recorded Record all Inspections Is a Priority Response Action Required? No Inspection Record Defect below intervention level Maintenance intervention Priority intervention Capital work (renewal, etc) Customer to be notified of action/no action if required Where required, Customer advised of action/no action to be taken Programmed Risk / Defect Inspection INSPECTIONS Yes MAKE SAFE (Signs, Barriers, etc) Can remedial work be undertaken immediately? No Completed work recorded against Inspection record Maintenance Defect Works (Prioritised) Capital Works Program (Prioritised) Implement Maintenance Program Implement Capital Works Program Life Cycle/Strategic Condition Inspection Yes Carry out remedial works Completed work Recorded against asset in Asset Register Customer Request/Inspection Recording Process Maintenance Management Process Banyule SAMP Part 'A' General Version 1- Draft docx Page 26 of 27

27 Appendix 3 Glossary Asset - Is an item owned and/or managed by Council. AAS27 - Asset Accounting Standard - Is financial accounting as it relates to assets. Hierarchy - A framework for segmenting an asset base into appropriate classifications. Asset Management - The combination of financial, economic, engineering management and other practices provided to maintain an asset at the required level of service. Benchmarking - Measuring performance or practices against recognised industry standards. Capital Evaluation Process - A process in Council s New Works and Services (Capital Works) Program where projects are evaluated according to certain criteria and prioritised for implementation. Capital Expenditure Creation of new assets or to increase the capacity of existing assets. Components Individual parts of an asset. Continuous Improvement - A program of review of service delivery, procedures, practices and plans to assess and implement improvement opportunities. Replacement - The cost of replacing the service potential of an existing asset, by reference to some measure of capacity, with an appropriate modern equivalent asset. GIS Geographic Information System - GIS is a computer based mapping system used to manipulate, analyse and present information that is tied to a ground location. Intervention Level - that stage of deterioration of the asset component at which it is no longer tolerable. It is impracticable for any defect to be remedied at the time it first appears, so a level of tolerance is required. Level of Service - Service level is standard to which an asset is maintained and relates to the quality, quantity, reliability, responsiveness, environmental acceptability and costs of related activities. Maintenance -Activities necessary to retain an asset as near as practical to its original condition for it to reach its expected life. Periodic - sustains the design life of an asset. Routine/Programmed condition monitoring activities used to predict failure. Preventive reactive maintenance through notification of defects. Pavement Management System (PMS) - An asset management (AM) system designed to model road condition data and provide the outputs for managing annual and long term maintenance activities. Performance - A measure of a service or activity used to compare actual performance against a standard. Rehabilitation - Works to rebuild or replace parts or components of an asset, to restore it to a required functional condition and extend its life, (ie heavy patching of roads) without significant upgrading or renewal. Renewal - Works to refurbish or replace existing facilities of equivalent capacity or performance quality. Repair - Action to restore an item to its previous condition after failure or damage. Replacement - Replacement of an asset that has reached the end of its life to an agreed level of service. Risk Assessment - The process used to determine the level of risk against predetermined standards. Risk Management - A management technique used to identify and analyse potential risks and responses. Road Register - A detailed listing of roads for which Council (the Responsible Authority) is responsible for maintaining. Strategy - A plan containing the long-term goals and strategies of an organization or function. Banyule SAMP Part 'A' General Version 1- Draft docx Page 27 of 27