Willoughby City Council Asset Management Improvement Strategy

Transcription

1 Page 1 of 102

2 Willoughby City Council Asset Management Improvement Strategy Contents: 1 Executive summary Introduction Purpose Asset Management Framework Purpose of Asset Management Role of Local Government Integrated Planning & Reporting Framework Asset Management Policy Asset Management Plans Link to Council s Community Strategic Plan: The Willoughby City Strategy Basic vs. Advanced Asset Management Current Status of Asset Management Practices Data & information Business Processes Asset Management System Implementation Tactics Improvement & Action Plan Strategy Review References Appendix A Asset Management Framework Appendix B Project Roles & Responsibilities Flowchart Appendix C Maturity Assessment Tables Appendix D Council s Assets Appendix E Renewal & Rehabilitation Modelling Appendix F Life Cycle Gap Analysis & Required Funding Page 2 of 102

3 Document Control Willoughby City Council Asset management Improvement Strategy Rev No Date Revision Details Author Approver 1 1/9/2010 First draft not submitted for formal adoption, as Kellie Adlam - awaiting summary of more mature asset data. 2 21/2/ Second draft updated based on asset data Kellie Adlam - as summarised for Councillor workshop on Tues Feb 21st. 3 15/4/ Third draft for adoption by Asset Management Kellie Adlam Nick Tobin Strategy Group and then Councillors 4 12/6/ Draft Adopted Kellie Adlam Nick Tobin Page 3 of 102

4 1 EXECUTIVE SUMMARY The purpose of this Strategy is to establish an action plan to achieve strategic, ongoing improvement of asset management practices throughout the organisation for the vast pool of assets under the care and control of Council a total asset portfolio with a replacement cost of at least $599.5M. Achieving optimal asset management practices involves all of the following aspects of council operations: strategic planning for service provision; long-term financial planning; maintenance activites and capital works; prioritisation of asset improvement, acquisition and disposal; monitoring of asset performance and service delivery; risk management; and corporate systems. The term asset management is used to describe the process by which councils manage physical assets to meet current and future levels of service. Under the Asset Management Standard PAS 55, asset management is defined as: the systematic and coordinated activities and practices through which an organisation optimally manages its physical assets and their associated performance, risks and expenditures over their lifecycle for the purpose of achieving its organisational strategic plan (Division of Local Government 2006). This strategy has been based on the template provided in the International Infrastructure Management Manual (IIMM). The document is exists in the context of the asset management framework, forms an integral part of the resourcing strategy within the Integrated Planning and Reporting Framework, and relates to several other Council plans and policies, as indicated. Progress made to date by Council in asset management are explored in detail in Section 5. These are explored within the four main improvement areas identified by the IIMM, which are also assessed on an annual basis by external consultant. The results of the assessment show that the greatest level of maturity in asset management is in the collection of data and information, and more specifically relates to road pavements, footpaths and kerb and gutter. All four improvement areas and all nine principal asset classes have shown continuous improvement over the assessment period. Section 6 provides a comprehensive action plan, including timeframes and responsibilities for all tasks, for continuing to improve asset management practices. Some gaps in current resourcing have been identified and these are indicated in the action plan. The appendices provided in this strategy, whilst lengthy, provide a snap shot of Council s asset stock in terms of current value and condition, target levels of service provision, projected expenditure and overall financial sustainability. All asset information has been summarised from Council s most recent and more detailed asset management plans. This strategy will be reviewed on a yearly basis until such time as Council s asset management practices are deemed to be advanced/mature by an external party, from which time the strategy will be reviewed every four years in conjunction with Council s Delivery Program and Asset Management Policy & Plans. Asset Management Plans may also be subject to review on an annual basis. Whilst the Asset Management Plans will produce information for a ten year planning horizon, modelling of future asset expenditure will, wherever possible, be based on a greater time period such as years. This is because major asset renewals due to occur just outside the ten year planning horizon often need to be budgeted and planned for several years in advance. Council has developed an overarching Community Engagement Strategy, which was completed in November and is due to be renewed in. The strategy addresses various approaches to engagement from information share to consultation. Importantly any meaningful engagement with the community around asset practices and service provision can only occur if the community is well informed of the services provided by Council. To ensure our stakeholders know about our current status in Asset Management and service provision, available resources and priority issues it is necessary to first produce asset management plans. An engagement program specific to asset management has been drafted in line with the Community Engagement Strategy. Page 4 of 102

5 2 INTRODUCTION In order to provide various services to the community, Willoughby Council is responsible for a vast pool of assets and is therefore faced with the challenge of funding their management in the most efficient way possible. Limited funding, community pressure and legislative changes have meant that Council needs to review its asset management practices and devise a strategy for their continuous improvement. The total replacement cost of Council s asset civil infrastructure asset portfolio is approximately $599.5M and is spread amongst the principal asset classes as shown in Figure 2.1. It should be noted that Council is responsible for several asset classes which have not yet been valued at Fair Value and these are therefore not included in Figure 2.1, including retaining walls, LATM devices, street furniture, signage, plant and fleet, artworks and library books. Information on these asset classes and others will continue to be collected. $139.7 $18.3 $16.5 $1.9 $94.3 $10.3 $59.1 $179.6 $79.8 Road Pavements Kerb and Gutter Footpaths Bridges Stormwater Buildings Passive Rec (Parks) Sportsgrounds Playgrounds Figure 2.1 Distribution of replacement values by asset class ($Millions) Current maintenance and renewal expenditure may be adequate to maintain assets so that an acceptable level of service may be provided. In some cases, however, the level of funding that is appropriate in the short term may fall short in the longer term resulting in a loss of service for the community. In other cases a short fall already exists and strategies need to be devised to address real and potential short falls. Long term planning based on detailed knowledge of current and future asset performance, as well as strategic analysis of the service provision needs of the community, are essential for the long term financial sustainability of local government. Asset management refers to many activities that are already undertaken within Council, such as road pavement maintenance, park landscaping and the provision of high-need services such as cultural centres. Asset management, therefore, is not a new concept but rather something that has been undertaken implicitly for as long as services have been provided by Councils. Improvement in asset management involves formalising the knowledge about asset performance, maintenance levels and community expectations in order to optimise both expenditure and service provision over a much longer time scale. This long term planning requires much more detail about assets and their relative services than has previously been available. 3 PURPOSE The purpose of this Strategy is to establish an action plan to achieve strategic, ongoing improvement of asset management practices throughout the organisation, by: adopting a framework within which asset management takes place; evaluating current status of asset management practices; endorsing intended future directions (within available resources). Achieving optimal asset management practices involves all of the following aspects of council operations: Page 5 of 102

6 strategic planning for service provision; long-term financial planning; maintenance activites and capital works; prioritisation of asset improvement, acquisition and disposal; monitoring of asset performance and service delivery; risk management; and corporate systems. A whole of organisation approach is therefore essential for asset management practices to improve. A corporate strategy for improvement in asset management will ensure that cost-benefit analyses are reconciled against Council and community needs, enabling Council to deliver the best possible service from its asset base within the limits of available funding. 4 ASSET MANAGEMENT FRAMEWORK 4.1 Purpose of Asset Management The term asset management is used to describe the process by which councils manage physical assets to meet current and future levels of service. Under the Asset Management Standard PAS 55, asset management is defined as: the systematic and coordinated activities and practices through which an organisation optimally manages its physical assets and their associated performance, risks and expenditures over their lifecycle for the purpose of achieving its organisational strategic plan (Department of Local Government 2006). Optimised asset management promises the following advantages: An inventory of all assets controlled by Council and their location Up-to-date condition information through regular inspection regimes Delivery of appropriate levels of service to the community A history of all works undertaken on assets Records of all asset-related expenditure Life-cycle costing of assets, from acquisition to disposal Risk management Prioritisation of capital works, asset acquisition and asset disposal Long-term financial planning for all asset-related expenditure Linkage between the Willoughby City Strategy, asset planning and management In summary, effective asset management means maximising the service provided to the community by all Council assets over the asset s life, given the funding available. 4.2 Role of Local Government Councils in NSW are to operate in accordance with the Local Government Act. The Act provides a legal framework that assists us in providing effective, safe and efficient infrastructure that supports community need. In the instances when an asset is not within the control or jurisdiction of Council, such as RTA controlled roads and Sydney Harbour Foreshores Authority for harbour foreshores, Council will work in partnership with the relevant controlling body to provide advice about the service levels. 4.3 Integrated Planning & Reporting Framework In 2009 the NSW State Government introduced the Integrated Planning and Reporting framework. The framework requires that all NSW Councils prepare a community strategic plan, resourcing strategy, delivery program and operational plan (see Figure 3.1). Page 6 of 102

7 Willoughby Council s over-arching strategic plan is the Willoughby City Strategy, Together Towards, Tomorrow, which is due to be renewed in. This plan provides us with a long term vision for the future and sets the foundations for the planning of key services. The City Strategy acknowledges that there are a wide variety of services and programs that are important to the community. As Council has limited resources it is imperative that we appropriately prioritise our activities. This includes ensuring that we resource our activities in accordance with good governance principles. With this in mind Council will often have to make difficult decisions about what we can and cannot deliver in any given financial year. Council s Delivery Program and our annual Operational Plan provide the details of what Council has prioritised for action based on the outcomes identified in the City Strategy and available resources. The resourcing strategy is perhaps one of the most challenging and important components of the new model. It requires that we produce an asset management plan (min 10 years), long term financial plan (min 10 years), and a workforce plan (min 4 years) in order to ensure that we are adequately resourced to deliver our services. The asset strategy therefore does not exist in isolation and must inform and be informed by the other resourcing considerations. The Asset Management Improvement Strategy should be reviewed every four years in line with the development of Council s Delivery Program. While in its early years, however, it is anticipated the strategy will be updated annually until fully integrated within the planning framework. Page 7 of 102

8 ASSET MANAGEMENT FRAMEWORK Asset Management Policy WILLOUGHBY CITY STRATEGY Asset Management Improvement Strategy RESOURCING STRATEGY Asset Management Plans DELIVERY PROGRAM WORKFORCE PLAN OPERATIONAL PLAN LONG TERM FINANCIAL PLAN Figure 4.1 Asset Management Framework showing the relationship between Policy, Improvement Strategy and Plans. Note that this framework is embedded within the overall framework of the Integrated Planning and Reporting model (dotted lines). See Appendix A for details on the various documents comprising the Asset Management Framework. 4.4 Asset Management Policy In September 2009 Council adopted an Asset Management Policy, the purpose of which is to provide Willoughby City Council with a framework for managing its large portfolio of assets. The policy identifies key roles and responsibilities around asset management, and established principles for strategic asset management practices throughout the organisation. The principles established by the Policy are translated into actions, whose purpose is to maximise efficiency in asset management practices. While this Improvement Strategy provides us with our current status and directions for asset management over the next four years the policy provides the over-arching approach and framework within which the strategy will be actioned. A full copy of the Asset Management Policy is provided on Council s website. Page 8 of 102

9 4.5 Asset Management Plans Council developed first drafts of Asset Management Plans (first generation) for each of the major asset classes at the end of 2010, whose progress was gradually adopted in principle by Council in early, as the Plans were tabled in groups of two or three. Second generation drafts have now been completed based on more advanced data and modelling techniques. These plans outline actions and resources to provide a defined level of service in the most cost-effective way (Department of Local Government, 2009). For each class of asset the Plan provides, where available, the following information: Dimensions and attributes of assets Condition (physical, capacity, fitness-for-purpose) Levels of service Risk analysis Financial summary Future demand forecasts Goals for future service delivery through assets Actions to achieve desired service delivery Funding for future maintenance (10+ years planning) Funding for future capital works (10+ years planning) Decision-making methodologies and supporting documentation The Asset Management Plans produce information for 20 year planning horizon, despite the fact that long term financial planning must be based on a minimum of ten years. This is because major asset renewals due to occur just outside the ten year planning horizon often need to be budgeted and planned for several years in advance. Development of the Asset Management Plans thus far has occurred in conjunction with budget allocation as part of an iterative process, since the two are mutually dependent. 4.6 Link to Council s Community Strategic Plan: The Willoughby City Strategy This Strategy, by seeking to maximise efficiency in asset management, addresses the key challenge in section 4.2 of the Willoughby City Strategy, ensuring sustainable practices in the provision of infrastructure. More specifically, the Improvement Strategy is integral to achieving the following outcomes: Efficiently operated and managed infrastructure assets Sustainable provision and use of infrastructure Many other outcomes of the Willoughby City Strategy, in all key strategic directions, will be helped by improved asset management practices. The specific applications of these outcomes to planning in individual asset classes is indicated within each respective Asset Management Plan. Community and cultural life: Public spaces are attractive and inclusive and offer a variety of recreational and creative experiences Available relevant services and facilities for all members of the community Council s works and services programs are current and appropriate to the recreational needs of the community Affordable and accessible open space and recreational facilities for all members of the community Existing open space, recreation areas and sportsgrounds are protected and enhanced Safe buildings, public domain, open space areas and facilities Page 9 of 102

10 Natural environment: Homes: Willoughby City Council leads by adopting sustainable practices 3.1 Housing demand and diversity (all outcomes) Transport, Mobility and Infrastructure: Increased use of active and alternative transport 4.2 Infrastructure (all outcomes) Economic Activity Civic leadership 5.2 Central business districts (all outcomes) A Council that is open and honest and represents its constituents An engaged, participatory community with knowledge of local community services, activities and events Council maintains a strong and sustainable financial position Council services are delivered to a high quality standard and are responsive to community needs 4.7 Basic vs. Advanced Asset Management The International Infrastructure Management Manual (IIMM, 2002) differentiates between basic and advanced asset management. Basic asset management practices permit Councils to transition to a longer-term, strategic approach to planning for asset management and to meet the minimum legislative requirements without the need for computerised systems or detailed asset data. Basic asset management is typically characterised by: A time-averaged, life cycle approach; Asset management plans based on currently available or sampled data; Assumptions that existing levels of service are sufficient; Identification of opportunities for improvement in current practices; and Cash flow projections based on local knowledge. The transition from basic, above, to advanced asset management relies upon a comprehensive analysis of existing weaknesses in data, systems and practices, and a plan for improvement in those areas. This Asset Management Improvement Strategy provides both the gap analysis and the strategies to address the gaps in an incremental fashion. As asset management practices become more advanced, planning should be based on the following: Well-defined target levels of service, developed in consultation with the community; Accurate and detailed asset data with high confidence levels; Predictive modelling based on asset deterioration; Optimised decision making techniques; Impacts of other existing Council plans; and Reviews of relevance of implementation of asset management practices to community strategic plan. Page 10 of 102

11 Gaps and improvement in asset management practices are measured in four broad categories which are addressed in the below order throughout the following section: 1. Data & information 2. Processes 3. Information systems 4. Asset management plans 5. Implementation tactics 1. Data & information 3. Systems 2. Business processes 4. Asset management plans 5. Implementation tactics Page 11 of 102

12 5 CURRENT STATUS OF ASSET MANAGEMENT PRACTICES This section provides an analysis of overall progress in asset management followed by a detailed discussion of all aspects of the project. Council has engaged external asset management expertise since 2008 to provide guidance and regularly assess improvements in asset management practices. Council s overall progress has been measured for each major asset class on a percentage scale of maturity where 0% indicates that Council is unaware of the need for, or current status of, each constituent task and a value over 85% represents excellence in that area. A number of criteria are considered when measuring maturity in asset management, and these are listed in Table 5.1. Table 5.1 Assessment scale used to measure asset management maturity Rating Unaware Aware Syst. Approach Competence Excellence Frequency Emphasis Formality Systems Results Never do this Occasionally do this Sometimes done on an as needed basis for critical programs and activities Often do this on many programs Usually do this; omitted only in exceptional circumstances Always do this; standard operating procedure Not emphasised Receives minimal emphasis; some efforts under way Moderately emphasised; try to adhere to this Generally emphasised; something that is done and checked Strongly emphasised; used to measure and reward by Heavily emphasised; one of the principles by which business is done No formal process No system exists No results seen Done informally only; ad hoc procedures; minimal documentation Semi formal process; some routine procedures exist Formal process exists; modestly documented; good but still evolving Formal, documented process; well tested and well followed Strict, formal process exists; well documented; not deviated from Manual system exists; plans for automated systems are in place Automated systems exists; meets basic user needs Good system in place; widely available; meets all key user needs Strong system in place; meets nearly all user needs State of the art system in place Minimal results; long way to go Some results; still below expectations Good results; getting there Excellent results; still some room to improve Unparalleled results a total success The improvement areas that constitute the assessments, which are carried out annually, include all of the broad categories introduced in the previous section except for the asset management plans themselves ( governance is considered to adequately represent implementation tactics): 1. Data and information; 2. Processes and plans; 3. Systems & tools; 4. Governance; Across all asset classes and improvement areas, Council has achieved maturity ratings that are, on average, 70% of the target ratings. A summary of the results of the maturity assessment are provided here, whilst the tasks that constitute each improvement area are discussed in detail throughout the remainder of this section. The latest maturity tables are provided in Appendix C Maturity Assessment Tables. Figure 5.1 displays Council s maturity in each improvement area for each year from 2010 to. The maturity in each improvement area is calculated by dividing the total assessment score by the total target score to obtain a percentage (refer to Appendix C Maturity Assessment Tables for target scores). The figure shows that Council s maturity in data and information has been consistently higher than the other improvement areas. Within this category, the asset registers for most asset classes have been assigned a score of 90 (excellence) from a target of 95, while overall knowledge of assets has been assigned 80 (high competence) from a target of 85. Stormwater, buildings, open space and other assets received lower scores (systematic approach through to competence) and will be targeted for improvement in the future. Page 12 of 102

13 It is logical that each improvement area would show slightly reduced maturity, in the order in which they are displayed in Figure 5.1, as it reflects the order in which progress is likely to be made in the project. Whilst business processes are generally subject to scrutiny first, it is increased quality of data and information which facilitates further improvements in those business processes. System implementation cannot reliably progress until business processes in the relevant areas are improved to a certain level, and governance measures rely on those systems and tools. There is, of course, significant feedback between each of the improvement areas throughout the project. Figure 5.1 Council s maturity in asset management from 2010 to for each improvement area, expressed as a percentage of the total target score. 100% 80% 60% 40% 20% 0% Data & information Processes Systems & tools Governance 2010 The greatest progress in recent years has been seen in the processes area, which is a direct result of much of the asset management planning that has taken place. Systems and tools were assessed as relatively mature quite early in the project due to existing corporate systems related to asset management, whilst progress in this area has been slow due to the limited implementation of Council s asset management system (AMS). The comparatively low maturity in governance is not presently of great concern as this is expected to be the last area to exhibit improvement following the compilation and implementation of asset management plans. A break-down of total maturity scores by asset class gives a clearer indication of where Council s gaps in knowledge and processes lie, and is provided in Figure 5.2. In the figure, the scores for each asset class include all four of the improvement areas from Figure 5.1. Road pavements, footpaths, and kerb and gutter assets exhibit the highest overall maturity scores with some improvement still in documentation of service levels, demand analysis and works management processes. Larger gaps exist for buildings, stormwater and open space asset classes, whose main areas of weakness are focussed around asset data, objective planning processes and works management processes respectively. Figure 5.2 Council s maturity in asset management from 2010 to for each asset class 100% 80% 60% 40% 20% 0% Road pavements Footpaths Kerb & gutter Bridges Buildings Stormw ater Open Space Miscellaneous 2010 The following sections will summarise in detail Council s progress to date within the four improvement areas identified above. Page 13 of 102

14 5.1 Data & information Council has collected detailed inventories and, where relevant, condition data for the following asset classes: Buildings; Land; Road pavements; Footpaths (within road reserves); Kerb & Gutter; Bridges (including culverts and minor structures); Stormwater; Open space assets (including playground equipment and sportsgrounds). Of these, buildings, road pavements and bridges have been recorded at the component level. Road pavements consist of up to three components: seal, base and formation. Buildings may consist of up to eight components: envelope, floor, roof, floor covering, fit-out, mechanical services, fire systems and vertical transport. Bridge-like structures that fall into the categories of either major bridge or major culvert, of which Council is responsible for 21 and 8, respectively, may consist of up to 41 or 12 different components, respectively, whereas minor structures are not componentised. In all cases componentised assets are condition rated, valued and depreciated at the component level, since constituent components may vary in replacement costs, consumption patterns and useful lives. The approximate location of all stormwater conduits and pits is known with a moderate degree of certainty, however CCTV inspection footage to fully confirm the location, attributes and condition of stormwater conduits has been collected for only 52% of the network so far. This is, nonetheless, considered to be a high percentage when compared to many other Councils, and provides a reliable sample size from which to extrapolate condition information to conduits that have not yet been inspected on the basis of conduit size. This extrapolation allows Council to achieve long term financial planning for the stormwater network despite the lack of a complete inventory. Fair value reporting for all of the above asset datasets has been completed based on a formally documented process detailed in Council s Asset Valuation Methodology. One exception exists for data within open space which has not yet been reported at Fair Value since data collection had only very recently been completed by the time of compilation of this Improvement Plan. Assumptions regarding materials, useful life, replacement cost and degradation patterns have, however, been collected in consultation with external Valuers (in a method consistent with Council s existing valuation methodology) and will be applied to the recently collected data so that open space assets may be reported at Fair Value from June 30,. Data regarding fleet and plant assets have not yet been collected as part of the asset management project, however Council s fleet management system is currently used to maintain most of this data, so it can still be accounted for from a financial reporting perspective. An inventory of IT equipment exists but has not yet been integrated into the wider asset management project. The same applies to library books. The attributes collected for each asset class vary depending on the usefulness of that data in financial valuations, day-to-day operations, inspections and works prioritisation. The attribute data collected so far has been carefully scoped and in some cases refined over the years through direct use where regular works and inspection programs are already in place (stormwater and footpath assets, for instance). It is possible that further attributes will be as asset management processes become more advanced, however it is more likely that some attribute data will turn out to be unnecessary. Council has purchased an Asset Management System (AMS) which will become the corporate system for all asset inventory data. Until such time as the system is fully implemented, however, Council s Geographic Information System (GIS) serves as the repository for all asset data, which is actively used and maintained in that system, and verified by Council s GIS coordinator. Go live of asset inventories in Council s GIS relies on further integration between Council s GIS viewing software and the AMS, which is discussed further in Section 5.3 alongside interfaces between the Page 14 of 102

15 AMS and other Council systems. A complete data audit will also need to take place in the future before handover can occur. Regardless of whether asset data is maintained in Council s GIS (now) or AMS (in the future), datasets reside on Council s virtual servers that are subject to Council s existing IT backup schedule. This occurs on a nightly basis. A series of additional asset classes have been identified that will be subject to data collection, condition rating and valuation as time permits and on a risk-focussed priority basis. These include, but are not limited to: Retaining walls and sea walls; Footpaths within open space; Bushland assets; Artworks and sculptures; Guard rails, safety fencing, pram ramps and LATMs; Street furniture and LATM streetscapes. Condition assessments are performed during collection of asset attribute data and in many cases is kept up to date with regular inspections. For example road pavements, footpaths, kerb and gutter, bridges and stormwater assets are inspected under an established schedule, and defect information is historicised rather than overwritten. Backups are taken of road pavement data before updated condition information is loaded to the pavement management system. Defect information for footpaths and kerb and gutter is held in Council s GIS in a cumulative fashion so that historical defects are marked as repaired rather than removed from the file. Bridge condition data is obtained via formal reports which are registered in Council s document management system. Individual stormwater CCTV inspections are retained in an excel database where the most recent inspection results are used to update the stormwater attributes. Prior to, building inspection data was loosely maintained in a works order system, but a historical record of condition ratings did not exist except for the high-level evaluation carried out in 2008 by Valuers for compliance with fair value financial reporting. Beginning in a third party was engaged to collect detailed data and condition information for Council s major buildings in stages. To date this data collection is ongoing and has not yet been repeated for any buildings, however it is intended to be the beginning of an ongoing inspection regime that is yet to be finalised. Currently inspection information for open space assets is not retained, with the exception of playground equipment where quarterly inspection reports are commissioned from third party consultants. In the future all inspections, regardless of the source of information, will be entered into Council s AMS and will therefore all be historicised and accessed from a single location. Hierarchies have been established within each asset class where asset data has been collected to date. Specific details regarding these hierarchies can be found within the relevant asset management plans. These hierarchies often represent the first level of works prioritisation and may be combined with other factors as asset management practices become more advanced for each individual asset class. It is also possible for Council s defined acceptable levels of service to differ within a single asset class based on hierarchy. Predictions of the future expenditure for each asset class have been based on Council s asset valuation methodology, since this methodology already takes current condition, degradation, replacement cost and expected life into account. Rather than establishing life cycle costs on an individual asset basis, these have been integrated into the long term financial planning for assets. The predictions were generally divided into four types of expenditure: 1. Operational & maintenance; 2. Renewal of existing; 3. Upgrade/expansion; and 4. New assets. Page 15 of 102

16 Whilst operational and maintenance expenditure are considered as distinct, Council s current financial reporting system means that their separation is impractical. In addition, for some asset classes such as footpaths, drawing a line between of maintenance and renewal costs is difficult and the two are often considered together as rehabilitation costs. Formalisation of thresholds separating capital from maintenance for these ambiguous works is underway and will minimise complications in the future. Of the above four expenditure types only the second, renewal of existing, was varied based on target levels of service (read on for further details), while the other three types of expenditure remained fixed within a given asset class. A lack of knowledge about how level of service and asset condition affect maintenance costs prevented Council from varying the first expenditure type, above, and a lack of approved objective prioritisation systems and service provision scenarios prevented the third and fourth types from being varied. In the future it is hoped that all four expenditure types will be linked to levels of service. Renewal expenditure in financial projections was varied, as mentioned immediately above, based on levels of service and therefore presented in three scenarios, which are listed in Table 5.2. These scenarios are likely to be reshaped in the next generation of asset management plans so as to better align with the logic contained within Council s long term financial plan. Table 5.2 Scenarios used for financial projections of renewal expenditure Scenario name Assumptions Scenario 1 Base Case Scenario 2 Meeting levels of service Scenario 3 Exceeding levels of service Funding levels remain unchanged from the current trend, except for inflation Funding is sufficient to meet the minimum level of service deemed acceptable. Funding is sufficient to meet a slightly higher than acceptable level of service In both the first and second scenarios, projections of asset expenditure and condition were modelled based on an intervention point that was considered acceptable. It is important to note that the definition of acceptable is currently an informed estimate and may change as a result of community consultation in the near future. A single intervention point was applied to entire asset classes in some cases, whilst in others the intervention point was varied depending on asset hierarchy and even component type. The target level of service could therefore differ greatly from one asset class to the next, however in all cases the draft level of service provision was deemed acceptable. The third scenario was modelled based on a level of service that exceeded acceptable for the sake of comparison, and to demonstrate the magnitude of the costs to achieve a higher level of service provision. The replacement costs used in both Fair Value reporting and financial projections were either provided by third party consultants or calculated internally in consultation with relevant contractors, neighbouring Councils, manuals and, where available, benchmark data. 5.2 Business Processes Whilst documentation of Council s business processes and implementation of systems is incomplete and continually progressing, a large number of crucial business processes have been entrenched in Council s day-to-day mode of operation which ensure sound management of existing assets in accordance with the needs of the community. This section identifies existing business processes and potential areas for improvement. First and most importantly, regular consultation with the community takes a variety of forms and, whilst often informal, plays an important role in Council s service provision. From a reactive perspective, Council has a widely used system for customer service requests which gives an approximate picture of the areas that most concern members of the community where programs might be put in place to effect a shift away from reactive works. All of the branches within Council that are involved in service provision to the community have direct contact with the community and take on board a large amount of feedback. Sportsground maintenance provides one example where sporting groups are very active in making known their expectations and communicating them directly to the relevant Council staff. Similarly there is an opportunity for Council staff to educate these groups somewhat in how their services are provided. Page 16 of 102

17 As such, it is a fairly valid assumption that the current level of service provision by Council is acceptable. Based on the existing number and condition of assets provided, Council has therefore drafted target levels of service for all asset classes which have formed the basis for predicting future expenditure. Existing informal community consultation needs to be supplemented by more formal means so that appropriate levels of service can be confirmed at a more technical level. Similarly, maintenance of Council s assets and operational costs associated with provision of services are assumed to be sufficient unless indicated otherwise by the relevant staff, since those staff are generally made aware of the community s expectations. In the current version of expenditure projections, therefore, maintenance expenses are held constant except for inflation. In some asset classes where planned capital works will significantly increase the asset portfolio, projected maintenance costs have been increased accordingly over time. In reality however, maintenance costs are higher for assets that have been allowed to deteriorate further towards end of life. This means that a higher level of service provision ought to produce lower maintenance costs, however in many cases this is likely to be complicated by greater asset usage as a result of the improved quality. In the future, maintenance and operational costs need to be linked to the level of service provision. Council s Operational Procedures Manual describes safe work method statements, risk assessments, work procedures and traffic plans, and therefore is an essential manual for all maintenance, renewal and capital work. It is the responsibility of the Works Service Branch and was last reviewed in March This comprehensive document is currently undergoing review by the Human Resources Branch to ensure version control is possible for future updates and that safe work method statements are adhered to as closely as possible. This involves transferring the document electronically to Council s document management system in consultation with the Works Services Branch. Manuals regarding condition assessment, levels of service, objective prioritisation and asset valuation are all at various stages of completion, but exist as first drafts as a minimum for all asset classes. These are all held within Council s document management system and can be obtained by contacting the relevant Branch. Condition assessment manuals include a definition of Council s 0-5 condition rating, a list of aspects to be considered when inspecting the various asset types, as well as photographs to clarify how condition ratings should be applied. These are intended to reduce, if not remove entirely, the subjectivity associated with asset assessment. More advanced asset classes such as footpaths and roads have progressed beyond a single condition rating and take a number of factors into account to produce an overall condition. Currently these manuals are restricted to physical condition assessment, however in the future attempts will be made to assess asset functionality, capacity and accessibility which are crucial for decision-making around medium-term planning of major upgrades and new works. Condition ratings will serve for both asset valuations and long term financial planning of maintenance and capital works. Service level manuals seek to document community expectations as currently understood by Council staff (and soon to be formally refined through Council s community engagement strategy), as well as more technical measures of service provision. These include response times and triggers for reactive maintenance, intervention levels for renewal and objective prioritisation scoring systems for future projects. Response times have been based on Council s existing customer service charter in the first instance, where the majority of request types relating to assets require a response within 14 days. Depending on the specific problem (or trigger ), these have been refined for the various asset classes, with an interim make safe time added for safety issues requiring immediate attention. Until Council s AMS is implemented, it will not be clear whether these refined response times are achievable. Similarly, it is currently unknown whether the draft intervention points discussed in the previous section are achievable, although they have been drafted based on staff experience. Objective prioritisation scoring systems are in active use for footpath assets, where the condition rating and a risk and need score that varies throughout the LGA are combined in an algorithm to determine overall priority of works. This is displayed on a map which is provided to the Works Services Branch monthly. For other asset classes, a series of questions and answers have been devised that contribute to an overall, weighted score. So far the system has been tested and found to align fairly well with Council priorities in the playground area, but has yet to be tested for parks and recreation, and for buildings. These prioritisation systems will be formalised in the future and submitted to Council for adoption, probably following the period of community engagement. Page 17 of 102

18 A period of transition will apply to the move away from reactive maintenance and towards the use of the above described prioritisation systems. It is expected that expenditure on reactive maintenance will lessen over time but is likely to continue to account for a small portion of the budget for most asset classes. Demand analysis for services such as passive and active recreation, child care and youth services have taken demand into account for some time. As part of compiling Council s asset management plans, even those Branches that were not directly concerned with demand analysis were given the opportunity to comment on projected demographic changes, and the potential impacts on those asset classes. A more advanced approach, however, would be appropriate for the future. Council s principal consultant in asset management has provided examples of services, such as libraries, where combining benchmark figures regarding unit area of floor space per capita with current and projected usage data can help Council plan more specifically for future population increases or changes in demographics. Currently usage data of that kind is not available for most asset types to enable such an analysis. This sort of data would be particularly useful for identifying opportunities for asset rationalisation based on under-use, and for planning strategically for new service provision before existing services reach their full capacity. As part of the asset management planning process, long term capital works programs were compiled over 20 years. This included project descriptions, funds and estimated timing. For many asset classes it was the first time projects had been considered beyond the recently implemented four year planning requirement. Whilst it is acknowledged that most of the detail beyond four years is quite uncertain, it is beneficial to have an understanding of the total quantity of outstanding works and the feasible time period over which they can be completed. In addition, any large projects lying outside the four year period, or even the minimum ten year period, may need to be planned and/or budgeted for well in advance. For these reasons it is preferable to accept the uncertainties associated with long term planning and continue to work with a twenty year planning horizon. Improvements to Council s capital works planning processes will require linking the capital program with target levels of service and demand analysis, implementing the draft objective prioritisation scoring systems and incorporation of asset additions and disposals into the current renewal modelling. The design and project management processes associated with major works have not been reviewed as part of this asset management improvement strategy, but ought to be included as part of the overall assessment in future revisions. Prior to, Council s budgets for maintenance and renewal of assets remained relatively fixed from one year to the next except for inflation, while funding for new and upgrade capital works was generally allocated on a project-by-project basis. Most of the latter were kept to an approximate limit that remained relatively constant over time, with some exceptions where government grants were available. Since, the budgets for some asset classes have been based around the asset management planning process, and the uptake of this approach is expected to increase over time. A limiting factor in the short term is the total funding available, which in some cases prevents major budget increases that may be to reduce the funding gaps that have been identified. Funding for road pavements and footpaths was shown to be adequate based on 20 year planning, however kerb and gutter, bridges, playgrounds and, in particular stormwater and sportsgrounds were shown to be significantly under-funded. Strategies to improve this situation include pursuing grants, working with investors, applying for loans such as the Local Infrastructure Renewal Scheme, increasing rates and, if funding is still insufficient, redistributing existing funds based on target levels of service so that the burden is shared more equally amongst asset classes. The life cycle costing that has been carried out to date (i.e. renewal modelling) has assumed a single path of action that is, all assets are replaced or repaired when they have degraded to a specified intervention point. Whilst this is a very advanced approach for this stage in the process, as it considers individual assets in terms of their current and projected physical condition, it is not an optimised strategy. Focussing on treatments for high priority assets earlier in their lives and allowing lower priority assets to degrade slightly, or any combination of the two, might provide a more efficient long term strategy, particularly under limited funding. Achieving these optimised strategies will take several years and will rely on constant refining of asset hierarchies, intervention points, treatment Page 18 of 102

19 types and costs. Software based on Council s current approach to renewal modelling is being investigated that may greatly reduce the manual effort to optimise funding distribution within a single asset class (e.g. running a large number of scenarios in the background based on parameters specified by the user, and displaying the lowest cost long term solution). Accounting for assets within Council is undergoing a shift away from straight-line depreciation as a result of fair value reporting requirements that were introduced in stages from 2008 onwards. Since valuations are now based on asset consumption and degradation patterns, the asset registers and associated valuation records need to be the responsibility of the relevant branches, such as Open Space, Property Maintenance & Construction and Engineering Services. All major asset classes for which data collection, including condition ratings, has been completed are reported at fair value. The fair value and depreciation information for these classes is provided by staff within Engineering Services and the Asset Management team to Financial Services for inclusion in financial statements. As part of this transition process, a series of meetings have taken place between Engineers and Accountants, where the asset valuation methodology and the reporting procedures are explained, respectively. These are continuing, and as part of these sessions capital thresholds and revaluation schedules are being determined, which will be formally documented in Council s asset valuation methodology at the end of the process. These are considered interim measures that may change slightly with the introduction of a works management system that is integrated with Council s financial system, as part of the AMS implementation. The greatest temporary challenge appears to relate to asset acquisition and disposal, which will similarly be addressed with implementation of Council s AMS. A regular inspection schedule exists for several asset classes. This practice has been entrenched for some time for road pavements, playgrounds and open space generally, and has recently become more prominent for other asset classes such as footpaths and buildings. This is an area that requires improvement in the future, and schedules will need to be refined over a period of several years whilst Council seeks to establish a balance between the frequency with which up-to-date inspection data will be used and an inspection schedule that is feasible. The minimum frequency will be dictated by fair value reporting legislation, which requires complete revaluation every 5 years for most entire asset classes. Well-defined works management systems are used by approximately half of the relevant supervisors. This includes road pavement works, footpath and kerb & gutter works, stormwater works and building works. The systems have been developed due to a need to both historicise completed works and communicate those works to the relevant administration staff so that their attributes and spatial information can be updated by administration staff. These are basic systems at present that should translate very easily into an AMS when implementation of the works management module takes place. The main variation to existing business processes will involve the selection of precise assets rather than descriptions of approximate descriptions of works locations. Asset classes where work order processes currently do not exist will need to undergo a significant period of consultation to determine where works orders might provide useful historical and financial information and where the extra administrative load might instead prove inhibitive. Approaches to works orders will be investigated to maximise efficiency for these areas (predominantly within the open space branch) and will include automatic work order creation based on customer service requests, inspection results, or defined schedules, pre-filled work order templates for common jobs and standing work orders to group multiple small jobs. Scheduled work orders provide a particular advantage to the organisation because existing works and inspection schedules would all be captured in a central location First generation plans were completed at the beginning of for each of the asset classes listed at the beginning of 5.1. A second iteration of asset management plans (i.e. second generation) is currently being compiled with projected expenditure that has already been completed for all asset classes. The financial and condition data associated with these plans has already been presented to Councillors at a dedicated workshop on February 21 st and is contained in Page 19 of 102

20 Appendix E Renewal & Rehabilitation Modelling. A detailed assessment of the Plans themselves, other than the fact that they are progressing, seems unnecessary here, since they are merely the compilation of all of the information discussed in detail throughout this document. Council has engaged an external auditor in collaboration with a number of other Councils in the area, and a high-level report is already pending on the integration between Council s asset management plans and the long term financial plan. It is anticipated that Council s asset management plans will be the subject of a more detailed audit later in the year. Review of all documents constituting the asset management framework has been set at a yearly interval until such time as Council is considered mature in its asset management practices (i.e. reached target levels of maturity in the assessment tables), after which time all documents are expected to fall into a four-yearly revision cycle in line with other aspects of the integrated planning and reporting framework. It is anticipated that minor interim revisions of asset management plans will be within that four year period. Thus far the yearly revision schedule has been both achievable and appropriate. Monitoring of improvement in asset management practices will principally take place through the maturity assessment tables in, whilst improvements in service provision and asset effectiveness are unlikely to be tracked with ease for most asset classes until Council s AMS is completely implemented. At present a form of monitoring is possible for road pavements, stormwater, footpaths and kerb and gutter because inspection data is archived, but reporting and analysis will be greatly facilitated by a fully functioning AMS. In line with DLG recommendations, Council has prepared an overarching Community Engagement Strategy which addresses various approaches to engagement, from information sharing to consultation. Importantly any meaningful engagement with the community around asset practices and service provision can only occur when: Council can clearly demonstrate the tangible link between a defined level of service and the associated cost of delivery; and The community is well informed of the type and nature of services provided by Council in light of available resources. As such, the specific nature of community engagement around asset management will be determined throughout as a direct consequence of financial projections and renewal modelling outputs, and subject to prior approval of Council. 5.3 Asset Management System Council is currently implementing Hansen 8 as its corporate Asset Management System (AMS). Once fully implemented, this software will be used for: Storage of asset inventory data such as: - Location - Dimensions/quantity - Condition - Valuations (including depreciation) Asset-related service requests & inspections Work management - Issue of work instructions - Historical record of completed works - Associated costs Risk management Life-cycle analysis Expenditure projections Asset data for all major asset classes except open space and stormwater is held in Hansen 8. Datasets for all asset classes are also held in Council s GIS and are therefore available to view spatially. A GIS interface will synchronise the two systems (GIS and Hansen8) and eventually Page 20 of 102

21 eliminate the need for duplicate data entry. Currently Council s GIS-viewing software, Exponare, allows users to combine the spatial view of all assets with their attributes in the Hansen system on a single screen by extracting information from the database. The bulk of project resources throughout and have been dedicated to meeting legislative deadlines for asset management plans and valuation of assets. As these deadlines pass and responsibilities for asset management plans are handed over to the relevant branches, implementation of Council s AMS will progress more quickly. At this stage there are no live users of the software as significant training and documentation is before this first milestone can be achieved. The next phase of Hansen 8 implementation will therefore involve: Audits and updates of all existing asset inventories; Loading asset inventories for all open space assets; Loading the detailed buildings data that has been collected; and Loading data for asset classes for which data has not yet been collected (see Section 5.1). Timeframes and responsibilities for these tasks can be found in Section 6. The first two phases, above, will be relatively straight forward. The third, on the other hand, will require significant scoping and consultation due to the intricacy and sheer size of the datasets, to ensure that data can be maintained before it is loaded, and establish the implications for works management and inspections. Asset valuations are to be calculated entirely within Hansen 8 once asset registers are complete, however at present an unresolved miscalculation in the Valuation module means that all valuations are calculated outside the system. Resolving this system issue is a high priority and must be addressed before asset inventories are completed. Council s pavement management system will continue to be the primary system for management of road pavements; however summary data will be stored in Council s Corporate AMS for the purpose of consistency/completeness of data and financial reporting. An interface between Council s customer service request software, Pathway, and Hansen 8 will allow all asset-related requests to be distributed to staff via Hansen 8, since the AMS is also capable of handling service requests. In this way, staff dealing with work orders will not need to deal with 2 different systems. A financial interface will allow all costs associated with work orders to be reported against both the relevant project and the asset. Asset inspections and work management are to be implemented following finalisation of the Pathway and financial interfaces, with the advanced asset management modules (Risk Management and Lifecycle analysis) to follow thereafter. It is anticipated that photos associated with inspections, safe work method statements, procedural manuals and any other documents relating to inspections and work orders will be stored in Council s document management system, Dataworks, and be accessible from the Hansen 8 interface. An interface between Dataworks and Hansen 8 has been developed in-house by a neighbouring Council, and investigations so far have found it to be a robust solution. Council is working to resolve acquisition and support issues for this interface. Council understands that a well-implemented AMS will allow for more effective management of assets and therefore superior prioritisation of works and financial savings in data maintenance. The following interfaces ensure consistency with existing core Council systems (note there is currently no interface with Council s name and address register, since changes would have little impact on the AMS and would therefore be more efficiently updated manually as needed) Interface with GIS Integration between Hansen 8 and Council s GIS, MapInfo, is on two levels: (i) viewing; and (ii) editing data. In both cases the integration needs to be bidirectional between the two systems. In the case of viewing data, this has so far been made possible in one direction for Council s GIS viewing software, Exponare, by displaying data from the Hansen database within the Exponare map Page 21 of 102

22 window. The reverse direction requires the ability to view spatial information about asset location from the Hansen 8 system, which will require some minor development and has not yet taken place. Infor, the software company that supports Hansen 8, have given indications that future software releases may include the ability to embed GIS viewers within the Hansen 8 window. This option is certainly preferable and further investigation needs to take place before Council pursues development. The case of integrating data editing between GIS and Hansen 8 is more difficult, given Council uses MapInfo as its primary GIS and Exponare as its primary viewer of spatial data. An interface exists for users of the ESRI suite of GIS products which allows users to edit data within their GIS and have changes reflected in Hansen 8, however no such interface exists for users of MapInfo products. Councils whose GIS viewing software permits users to edit data have managed to develop their own solutions for editing asset data, however this is not currently possible with Exponare since the product does not permit editing. The lack of such an interface is a big disadvantage, since users would need to maintain data within two different systems. To minimise the amount of data maintenance, business decisions have been made where appropriate to either hold all data within Hansen 8 and use GIS data for spatial representation purposes, or to maintain all data within GIS and do periodic data audits to update Hansen Interface with customer request system The interface between Pathway and Hansen 8 involves all of the information captured within the Pathway service request being passed directly to Hansen, and a link being maintained between the two systems so that any updates to the service request made in Hansen are transferred back to the original Pathway service request. Only requests of a certain types will be duplicated within Hansen 8, and received by the appropriate supervisor who will decide whether to create an inspection, a work order or to reject the request. This interface has been developed but was deemed incomplete after testing, and as a result is undergoing some major adjustments before it can be implemented Interface with finance system A scope for a financial interface has been finalised and is in the later stages of development. Due to the aforementioned reallocation of resources over the past months, implementation of this interface was delayed and now may need to be completely redeveloped, depending on decisions surrounding the future replacement of Council s current financial system. The interface will transfer all costs associated with each generated work order from the finance system to the AMS to allow reporting on expenses by asset attributes, by activity and spatially. All depreciation and revaluation of assets will be performed in the asset system and transferred to the appropriate ledger. Given the importance of financial interfacing, it is work noting that at least one other asset management system, provided by TechnologyOne, integrates fully with the same provider s finance system. Given that a formal partnership, and therefore a fully developed interface, also exists between TechnologyOne Enterprise Asset Management system and an advanced asset management tool provided by Assetic, it may be worth considering the costs and benefits of moving to Technology One in an enterprise agreement. This analysis will only take place if TechnologyOne is the chosen provider of Council s finance system in the future, and no action will be taken on the matter until that decision is reached Interface with document management system The interface between Hansen 8 and Dataworks that Council intends to acquire will allow Hansen 8 users to register documents to the appropriate indexes within Dataworks directly from the Hansen 8 system, through individual assets, inspections and work orders. Users will also be able to easily locate all documents registered to a particular record, for example a single work order, directly from that work order within Hansen 8. The interface appears to comply with the information management requirements under the State Records Act. 5.4 Implementation Tactics Given the early stage of asset management planning within the organisation, the knowledge around its implementation is fairly limited, which is a significant gap in itself that needs to be addressed. The implications of asset management plans, supporting documentation and system implementation for Page 22 of 102

23 roles and responsibilities within Council is to be discussed in detail in the near future as a direct result of Council s current maturity status. Since Council has reached the point where gaps in information, processes and systems are clearly identifiable, the roles and responsibilities around bridging these gaps and implementing the various aspects of asset management planning can now be formalised. Currently much of the work that could be the responsibility of individual branches has been completed by the Asset Management Controller and Officer. This has probably been appropriate in the short term to ensure consistency, comprehensiveness and transparency in the initial preparation of asset management plans. In the future, however, these responsibilities need to be handed over so that the Asset Management team can adopt a more central, coordination role. Once the discussion about how this will occur has taken place, this section will be updated further to reflect the following points: Corporate sponsorship & commitment to asset management; Asset management roles & responsibilities; Training programmes, staff skill and knowledge retention; Governance (accountability, risk management, monitoring and performance, compliance); Identification of core/non-core activities; Contract management. 6 IMPROVEMENT & ACTION PLAN The improvement plan and action items that constitute it are the crucial part of this Asset Management Improvement Strategy. The plan has been developed from: Existing (and continually revised) project plans; Monthly meetings with the multi-divisional Asset Management Strategy group; Suggestions from the providers of Council s AMS, Hansen 8; Workshops with an Asset Management expert from ACEAM; Feedback from Councillors and staff. The plan was informed by the maturity analysis presented in Appendix C Maturity Assessment Tables. Ultimately the Key Performance Indicators in Asset Management will be the achievement of ideal targets in the matrix. A recent and more detailed matrix is yet to be developed. The improvement and action plan is presented in tabular form on the following page A proposed organisational structure within the asset management project has been constructed and includes roles and responsibilities across several branches of the Infrastructure Services, Financial Services and Corporate Support & Performance Divisions. This structure highlights the current known resourcing gaps and provides a long-term view of the new responsibilities that should be taken into account in future staffing decisions within those divisions. It is acknowledged that the proposed structure is only hypothetical at this point and should be revisited in conjunction with future changes in Council staff for the relevant branches. It is not expected that this structure will be achieved in the immediate term, but that it represents the minimum resourcing requirements for the project to proceed. The chart can be found in Appendix B Project Roles & Responsibilities Flowchart. 7 STRATEGY REVIEW This strategy will be reviewed on a yearly basis until such time as Council s asset management practices are deemed to be advanced/mature by an external party, from which time the strategy will be reviewed every four years in conjunction with Council s Delivery Program and Asset Management Policy & Plans. Asset Management Plans may also be subject to review on an annual basis. Page 23 of 102

24 1. Data collection and analysis Task # Data type Actions Responsible officer Predecessor Resourced? Target Comments Consulting /software costs Buildings Ongoing collection of detailed buildings inventory including condition information Property & sustainable works officer?? Ongoing $15,000/yr til complete Buildings Buildings Parks & reserves Parks & reserves Discuss intended future use for detailed buildings inventory, considering data maintenance, valuations, reporting and works management. Detailed inventory to be carried out for The Concourse including an ongoing maintenance and renewal schedule with projected expenditure estimates. Complete parks & reserves data collection using hand-held GPS device Manually enter remaining spatial data for parks and reserves Property & sustainable works officer, Property operations & assets coordinator & AM controller/officer Property & sustainable works officer Open space asset planner Open space asset planning officer July 31, June 30, Complete July 31, Preliminary discussions to occur in-house, follow up with Infor business analyst in early June, in the context of the Hansen system. Finished in early February. Challenge is now to keep data up to date as works are carried out in open space. Commenced. $4,000 $10, Parks & reserves Parks & reserves Apply valuation assumptions to parks and reserves data and produce fair valuation, according to Council's formal asset valuation methodology. Estimate fair value of footpaths in Parks & Reserves based on existing GIS data, ahead of more detailed data validation in the field. AM controller/officer AM controller/officer Aug 31, June 30 Assume an average replacement cost based on existing staff knowledge, to be refined with data validation later Parks & reserves Long term expenditure projections for all parks and reserves asset types AM controller/officer November 30, Replicate existing modelling technique, plus build in an assumed embellishment factor Parks & reserves Discuss intended future use for detailed open space inventory, considering data maintenance, valuations, reporting and works management. Open space asset planner Sept 30, Preliminary discussions to occur in-house, follow up with Infor business analyst in early June, in the context of the Hansen system Parks & reserves Field data validation of footpaths in parks and reserves, followed by application of valuation assumptions. Open space asset planner October 31, Investigate assistance from Engineering students. Page 24 of 102

25 1. Data collection and analysis Task # Data type Artworks Actions Review inventory of Council artworks. Engage external valuers to provide valuations for artworks. Review playground equipment data from inspection reports Review replacement costs and "current value" of playground equipment as presently supplied by Playfix Responsible officer Jacky Talbot AM controller/officer Open space asset planner & Asset management controller/officer Predecessor Resourced? Playgrounds Playgrounds Target June 30, June 30, June 30, Comments Cost to perform valuations unknown. May be done in house. Depending on approach, could be much more costly than indicated. Will need to be reloaded to Hansen with Willoughby ID as main Hansen ID, and Playfix ID as a reference number. Consulting /software costs If necessary, apply valuation assumptions to playground equipment data and produce fair valuation, according to Council's formal asset valuation methodology. Open space asset planner & Asset management controller/officer Playgrounds June 30, Discuss refining the condition rating formula for playground equipment with the existing (or new) inspection contractors. Agree upon a format for data supply that will allow easy upload to AMS. Open space asset planner & Asset management controller/officer Playgrounds July 31, Consult with Jason Baker about future of playground inspection contractors Retaining walls Complete preliminary inventory or retaining walls within Willoughby LGA, regardless of ownership. Paul Gomez Sept 30, Collate information from several sources, including /12 open space data collection Retaining walls Confirm ownership of preliminary retaining wall inventory. Prioritise investigations using a risk management approach. Paul Gomez Feb 28, Retaining walls Formalise condition assessment methodology and conduct inspections of retaining walls. Use consultants for high risk walls and basic condition assessment for low risk ones. Paul Gomez 30 June, Inspections to include retaining walls where ownership could not be established during prior investigation. Page 25 of 102

26 1. Data collection and analysis Task # Data type Actions Responsible officer Predecessor Resourced? Target Comments Consulting /software costs Buildings Incorporate projected expenditure for The Concourse into asset management plan Property & sustainable works officer No October 31, Buildings Engage external valuers to provide updated replacement costs of all Council buildings (2nd complete revaluation, 5 years after 1st) Bill Lofthouse June 30, $100,000 (based on 08 APV vals) Bushland Bushland Collect bushland data Street trees Street trees Street signs LATMS Discuss future use of bushlands data including data maintenance, visualisation, reporting, etc. Discuss intended future use for detailed tree inventory, considering data maintenance, valuations, reporting and works management. Clean up inventory of street trees and establish responsibilities & processes for maintaining data. Adopt an approach to recording street signs and implement. Check whether RTA has valuations for speed limit signs on their books. Review existing information about LATMS and update as necessary Review existing information about streetscapes and update as necessary Open space asset planner & Asset management controller/officer Open space asset planner Open Space projects officer Open Space projects officer Transport & traffic group leader Transport & traffic group leader Open space asset planner Streetscape February 28, June 30, February 28, June 30 June 30 June 30 June 30 Possibly discuss data collection & use with a consultant used by Hornsby Council Potential assistance from student engineers Preliminary discussions to occur in-house, follow up with Infor business analyst in early June, in the context of the Hansen system. So far this is progressive using a risk-based approach (i.e. tree species most at risk of failing). May consult with Newcastle Council. Approach may be slightly different for high-risk signs such as stop signs. Need to confirm which signs included. Compliance audits have been carried out and a preliminary GIS data layer will need updating May consult with Newcastle Council IT & library If necessary, review data for IT assets and library books AM controller/officer June 30 Page 26 of 102

27 2. Modifications to business processes within asset management framework Task # Prede cssor Process type AM framework Actions AM Policy to be adopted with framework clearly defined. Responsible officer Asset Management Strategy Group Resour ced? Target Comments Complete Policy adopted Sept 2009 Consulting or software costs Inspect-ions Create condition inspection manuals for all asset classes including a physical condition rating system, example photos and a guide for which aspects to consider during condition assessment AM Controller/Officer Complete All developed in-house and/or based on existing manuals, with contractor assistance for buildings and pavements only, due to lack of resources there Levels of service Levels of service Strategic planning AM framework Prioritisation Levels of service documented - response times, maintenance & inspection frequencies, asset hierarchies, acceptable condition levels Complete first generation "top-down" asset management plans with the best available 2010 data Levels of service costed based on maintaining existing asset stock to provide an "acceptable" level of service Develop works program for 2010/11 and beyond - 10 year program with consideration for longer term renewals that need to be saved for in advance Develop scoring systems to prioritise capital projects under constrained budget scenarios and document for all major asset classes ("criticality matrix") Property & sustainable works officer, open space asset planner, asset engineer with assistance from AM Controller Complete AM Controller/Officer Complete AM Controller/Officer Complete Property & sustainable works officer, open space asset planner, asset engineer with assistance from AM Controller Property & sustainable works officer, open space asset planner, asset engineer with assistance from AM Controller Complete Drafted Some gaps in certain areas, but mostly complete. Unsure at this stage whether targets are achievable as no reporting tools available. Will need to be reviewed and adopted by Council following community engagement. Completed in April, initial data presented to Councillors. Required for AM Plans first generation will be based on past maintenance expenditure and benchmark replacement costs Detailed 4 yr program and general program for remaining 6 years Drafted for Buildings, Open Space, Footpaths, Kerb and Gutter. Yet to be tested against real projects. Page 27 of 102

28 2. Modifications to business processes within asset management framework Task # Prede cssor Process type AM framework Valuat-ions AM framework AM framework AM framework Actions Complete second generation asset "bottom up" asset management plans for based on life cycle costing for individual assets, where data is available. Hand over final sign off to each Branch before publishing to Council s website. Adopt interim capitalisation thresholds and valuation frequencies prior to implementation of asset management system (will automate process) Identify roles within each branch (engineering, property maintenance and open space) that will have principal responsibility for documenting processes, maintaining data and keeping asset management plans in sync with works programs. Roles identified should not be the decision makers themselves, but must be in close communication with day-to-day Council business and planning of works. Adopt an AM Improvement Strategy with clear actions for an improvement plan over at least 4 years or until maturity in Advanced Asset Management Practices, and clear funding/resourcing implications. Establish a firm review schedule and deadlines for all resourcing strategy components. Responsible officer Property & sustainable works officer, open space asset planner, asset engineer with assistance from AM Controller Tony Pizzuto & asset accountant Steven Head AM Controller/Officer Kathryn Ridley Resour ced? Roles exist for all branches except open space, where resourcing is Target June 30, June 30, May 30 4th June, 30th June Comments Completed for all major assets except parks and reserves. Detailed data presented to Councillors and well received. Representatives from each of the relevant branches to carry out some analysis of existing expenditure and make some suggestions that suit their current work practices, Tony Pizzuto to sign off on final decision. The total allocation of resources to implementation of the asset management framework (not including Hansen8) was recommended to be approximately 2.7 FTE by Ashay Prabhu, Council's asset management consultant. Additional roles to be identified for Hansen implementation with responsibilities setting in within 6 months to a year. Review by Steering group on May 23 followed by Council adoption at C&T committee June 4 (agenda close May 30). e.g: (i) AMPs finalised by end each year; (ii) budget submissions based on AMPs & modelling; (iii) outcomes of budget fed back to AMPs, adjust long term projections of asset condition; (iv) budgets and projections passed to LTFP. Consulting or software costs Page 28 of 102

29 2. Modifications to business processes within asset management framework Task # Prede cssor Process type Actions Responsible officer Resour ced? Target Comments Consulting or software costs AM framewok Hand over data analysis and strategic planning (i.e. AMP writing) responsibilities to Open Space, buildings and engineering technical officers. AM Controller/Officer Still missing open space resource July 31, Dependent on any relevant recruitment processes being complete. Not resourced yet but hopefully will be by handover target date Valuat-ions Update existing asset valuation methodology with capital and maintenance thresholds and revaluation schedules for all major asset classes. AM Controller/Officer June 30 These thresholds are crucial for future budgeting and planning (AMP, annual budget and LTFP) Service delivery - record keeping Service delivery - record keeping AM framework Prioritisation Assess the suitability of current methods of recording and communicating completed works to the relevant staff, to enable those staff to keep data up to date. Develop works management practices where not present (i.e. an interim works order type system). Seek to make method and content of information transfer consistent between different asset classes. Prepare and present an education pogram for managers around links between components of integrated planning and resourcing (delivery plan, AMP, LTFP, annual budgets) Test out prioritisation scoring systems on real projects AM Controller/officer & branch technical officers Property & sustainable works officer, open space asset planner, asset engineer with assistance from AM Controller Kathryn Ridley Property & sustainable works officer, open space asset planner, asset engineer with assistance from AM Controller July 31, Sept 30, September 30, October 31, Where design plans exist, these could be marked up and sent back to data maint. officers. Property & open space need to review. Field staff working on reactive (CSR) vs. prioritised work needs to be addressed. How much time/budget to allocate? Needs to be completed immediately before budget preparation begins to that the links involved in the IP&R framework are fresh in the minds of managers. Involve consultants? This should be done in the initial phase of budget preparation so that projects provided in budget applications have all been assessed and ranked accordingly. $5,000 Page 29 of 102

30 2. Modifications to business processes within asset management framework Task # Prede cssor Process type Prioritisation Inspect-ions Inspect-ions Actions Review prioritisation scoring after 12 months to be sure that the system still aligns with Council's priorities. Adjust accordingly and report changes to Council. Review risk assessment for all major asset classes. Use results to inform inspection schedules and work programs. Inspection schedules to be developed for all asset classes and documented in AMPs Review inspection schedules after 12 months to determine if they are feasible and assess resources. Responsible officer Property & sustainable works officer, open space asset planner, asset engineer with assistance from AM Controller Property & sustainable works officer, open space asset planner, asset engineer with assistance from AM Controller Branch managers Property & sustainable works officer, open space asset planner, asset engineer with assistance from AM Controller Resour ced? Risk management Target October 31, October 31, November 30, November 30, Comments Branch managers to sign off but schedules to be developed in consultation with Branch technical officers. Consulting or software costs Strategic planning Refine demand forecasting used in asset management plans. Analyse data and tie in with community strategic plan to refine long term CAPEX program. Branch managers November 30, Strategic planning Complete 3rd generation asset management plans, ensuring that projected expenditure aligns with budgets and the long term financial plan. First draft only to be completed by target date so that budget requests can be submitted in time. Review AMP based on revised budget, with levels of service and prioritisation methodology in mind AM Controller/Officer Branch managers AM framework about open space December 31, Feb 28, Plans to be mostly completed by technical officers in conjunction with AM Controller/officer only when. Final review will be by (i) Branch managers and then (ii) AM Controller/officer to ensure consistency. Show impact of any changes to requested budget on long term capital program, service delivery and average asset condition. Page 30 of 102

31 2. Modifications to business processes within asset management framework Task # Prede cssor Process type Prioritisation Strategic planning Inspect-ions Asset acquis-ition & disposal AM framework Actions Improve the prioritisation methodology in line with budget submissions to consider additional criteria Provide all financial information to the LTFP so that it aligns with Asset Management Plan Maintenance schedules for all treatments that do not fall under strict "asset renewal" to be compiled and costed Asset assessment manuals to be amended to incorporate ratings for capacity, functionality, etc. May fall into demand management strategies. Develop policies and procedures around asset acquisition and disposal as per internal audit recommendations. Review requirements of new accounting standards simultaneously. Annual review of Asset Management Improvement Strategy and Action Plan until Asset Management practices are deemed "advanced" or "mature" Responsible officer Property & sustainable works officer, open space asset planner, asset engineer with assistance from AM Controller AM Controller/Officer Property & sustainable works officer, open space asset planner, asset engineer with assistance from AM Controller Property & sustainable works officer, open space asset planner, asset engineer with assistance from AM Controller Tony Pizzuto & AM Controller/Officer Steering group Resour ced? Service delivery maintenance for open space Target March 31, March 31, March 31, May 31, + ongoing for SW June 30, June 30, Comments If necessary. Data to be supplied mostly by branches and compiled by AM team. Rating factors currently considered anecdotally. Quantification will be challenging and take some time Unsure whether financial recognition of assets is the most significant part of this process - may change responsibility for policies depending on outcome of internal audit Frequency = annual, in line with LTFP & resourcing strategy Consulting or software costs Levels of service Educate community on asset management Steven Head & Kathryn Ridley TBC Engagement Program already in train Levels of service Formalise community expectations and LoS Steven Head & Kathryn Ridley TBC Community Satisfaction Survey completed with next steps in process to be reviewed after June 30 Page 31 of 102

32 2. Modifications to business processes within asset management framework Task # Prede cssor Process type Levels of service Strategic planning Strategic planning Strategic planning Actions Community engagement Levels of Service to be adjusted in response to community feedback Seek to base future funding distribution between asset classes on the current ability to provide an acceptable level of service. Increase the portion of funding going to higher risk, lower-performing asset classes. Also review QBL process and require life-cycle costing for all new projects. Investigate a way to tie maintenance expenditure projections to target levels of service Refine CAPEX programs further by taking into account priority scoring, levels of service, demand analysis, risk analysis. Include life cycle costing Produce 4th generation asset management plans based on the most advanced information available. Plans to be entirely completed within relevant branches with assistance from AM Controller/officer only when. Responsible officer Property & sustainable works officer, open space asset planner, asset engineer with assistance from AM Controller MANEX Property & sustainable works officer, open space asset planner, asset engineer with assistance from AM Controller Property & sustainable works officer, open space asset planner, asset engineer with assistance from AM Controller Property & sustainable works officer, open space asset planner, asset engineer with assistance from AM Controller Resour ced? for open sapce, AM framework about open space Target TBC October 31, August 31, October 31, December 31, Comments Community engagement strategy to be developed to guide this process community must be adequately informed Workshop will be so that the proposed budget allocation process is transparent. This is a fundamental shift in budget allocation so will require significant preparation. Final review will be by (i) Branch managers and then (ii) AM Controller/officer to ensure consistency. Consulting or software costs AM framework Complete first generation "top-down" asset management plans for retaining walls and road reserve misc assets with best available info. Asset engineer December 31, Complete first generation "top-down" asset management plans for bushland. Open Space asset management technical officer AM framework December 31, Page 32 of 102

33 2. Modifications to business processes within asset management framework Task # Prede cssor Process type Strategic planning Actions Demand analysis for individual services based on benchmarks, e.g. floor space per unit population of libraries. Develop failure management plans for assets identified as "high risk" in risk assessment section of Plans Responsible officer Property & sustainable works officer, open space asset planner, asset engineer with assistance from AM Controller Property & sustainable works officer, open space asset planner, asset engineer with assistance from AM Controller Resour ced? Risk management Target October 31, October 21, Comments Some preliminary work done by risk management coordinator Consulting or software costs Page 33 of 102

34 3. Implementation of Asset Management System (AMS) System Task Prede or Actions # cessor module Valuat-ions Test valuation module for core reducing balance functionality and custom valuation formulas. Responsible officer AM Controller/officer Resourc ed Target June 30, Comments/sub-tasks Module currently un-usable until this issue resolved Consulting or software costs Parks inventory Reload playgrounds data with updated IDs AM Controller/officer June 30, Valuat-ions Load all asset valuations and build reports so that Fair Value data can be extracted directly from Hansen AM Controller/officer July 30, Config-ured assets Analyse need for configured asset licences and purchase as AM Controller/officer July 31, (i) establish asset classes that do not currently have modules within Hansen (ii) look at quantities of each type to determine whether they truly count as separate assets or just sub-classes $15, Config-ured assets Set up configured asset classes according to decision reached prior to purchase of licences AM Controller/officer August 31, GIS integrat-ion GIS viewing - ensure all assets in GIS have a hyperlink that leads directly to the Hansen asset info viewer GIS coordinator August 31, GIS integrat-ion GIS viewing - develop PLP button to jump to Exponare GIS coordinator, AM Controller/Officer, Infor & software provider August 31, $5, Inventory (all assets) Document naming conventions for all asset types AM Controller/officer September 30, To be maintained by technical officers within each branch Parks inventory Load open space asset data AM Controller/officer Sept 30, Inventory (all assets) Inventory (all assets) Complete an audit of all existing asset data so that Hansen is up to date Hand over responsibility for data maintenance to asset custodians AM Controller/officer AM Controller/officer & branch technical officers Sept 30, October 31, Page 34 of 102

35 3. Implementation of Asset Management System (AMS) System Task Prede or Actions # cessor module Responsible officer Resourc ed Target Comments/sub-tasks Consulting or software costs Inventory (all assets) Schedule periodical data audits to ensure integrity of asset inventories AM Controller/officer December 31, Inventory (all assets) Document all Hansen customisations and formalise business processes to ensure all future changes are captured. AM Controller/officer December 31, Advan-ced asset management Acquire software to conduct renewal modelling and generate forward works programs AM Controller/officer July 31, Currently aware of an Infor Hansen AAM module, and an Assetic MyPredictor program. Demonstration to be arranged in mid-late June for purchase using /12 budget. $50, Set up modelling software to replicate existing renewal modelling including asset replacement costs, degradation patterns, expected lives and treatment costs (for first cut, treatment is total replacement) AM Controller/officer Advan-ced asset management November 30, Consulting will be to write formulas or set up models initially (2 weeks). Ability to continue work in-house should then exist, but time constraints likely to be a problem. $20, Develop interim method to record asset works, such as a custom grid on a detail page for each asset. E.g. Consider Work Order implementation at a basic level without financial integration (as a first step). If deemed appropriate, adjust action plan accordingly AM Controller/officer & Infor Work management November 30, 2-3 days of consulting to set up initially, can then customise in-house $5, Buildings inventory GIS integrat-ion Load detailed buildings data to Hansen and hand over responsibility GIS editing - review functionality of existing integration with other GIS systems. Scope and develop according to Willoughby's specific needs. AM Controller/officer & buildings technical officer GIS coordinator & AM Controller/Officer January 30, March 31, Data maintenance will be intricate and time consuming, depending on the decision reached at this task's predecessor. Unsure whether existing resource will be allowed to dedicate time to data maintenance. (i) conduct webex in early to see existing GeoAdmin functionality as it exists with ESRI products; (ii) liaise with Newcastle, Kingston and Maroondah Councils to see their Intramaps integration; (iii) scope and pursue solution Page 35 of 102

36 3. Implementation of Asset Management System (AMS) System Task Prede or Actions # cessor module Valuat-ions Valuat-ions Valuat-ions Valuat-ions ECM integration Translate complete valuation methodology into AMS through rates tables and formulas to eliminate need for excel spreadsheets. Perform fair valuation of all assets in AMS though formulas, eliminate need to upload revaluations every year. Write all relevant reports by finance for valuations Complete user manuals and training programs for staff in Valuations. Responsible officer AM Controller/officer AM Controller/officer AM Controller/officer & Infor AM Controller/officer Acquire ECM interface and test AM Controller/officer Resourc ed Target April 30, June 30, July 31, July 31, June 30, Comments/sub-tasks Developer assistance for one week assumed, development will probably be ongoing for rates tables Developer assistance will be to write formulas and build rates tables in database, at least initially and to test functionality - assume 2 weeks, 1 at beginning, 1 at end Draw upon developer assistance in previous task but complete in-house using SQL skills Consider using Infor resources to conduct training - unknown cost. Update when further decisions made. Custom interface developed by Gosford Council Consulting or software costs $10,000 $10, ECM integrat-ion ECM integrat-ion CSR integration CSR integrat-ion CSR integrat-ion Customise ECM interface, build update routines between Hansen asset register and ECM asset index Go live with ECM interface Receive updated Pathway CSR interface and test Customise Hansen CRM module to enable interface to be implemented Complete user manuals and training programs for staff in customer service requests, IT manager or officer? AM Controller/officer AM Controller with Infor assistance AM Controller/officer AM Controller December 30, March 31, August 31, December 31, January 31, TechOne building blocks software (Connect) used by Gosford Council to build interface - acquisition relies on Willoughby having the skills to customise and maintain this. Resource is budgeted for but not yet has been supplied and is currently undergoing testing (i) identify relevant CSR types in Pathway; (ii) build workflows, including auto s and escalations, in Hansen (iii) test all workflows (iv) train relevant supervisors & staff Best done over the quiet school holiday period Page 36 of 102

37 3. Implementation of Asset Management System (AMS) System Task Prede or Actions # cessor module Responsible officer Resourc ed Target Comments/sub-tasks Consulting or software costs CSR integrat-ion Go live with Pathway CSR interface AM Controller/officer April 30, Wait for a stable period when all staff present - after Easter? Set up modelling software to perform more advanced modelling to produce detailed forward works programs. Run a number of scenarios to find the optimised budget scenario to achieve the desired level of service over the projection period. Includes testing different methods of prioritisation. Property & sustainable works officer, asset engineer and open space asset planner assisting AM Controller/officer AM Controller/officer and branch technical officers Property & sustainable works officer Advan-ced asset management Advan-ced asset management March 31, April 30, Assume 2 weeks to write all formulas based on our preexisting models. Must decide on all processes before engaging consultants. $20, Investigate implementation of asset acquisition and disposal policies through Hansen system and other integrated systems (reqs, finance) AM Controller/officer & IT manager Work management TBC (pending audit report) More detail for this task - depends on outcome of internal audit Financial integrat-ion Financial integrat-ion Financial integrat-ion Revisit Smartstream integration and re-test AM Controller/officer Engage consultants to make changes to Chris 21 to enable staff time to be costed to work orders. Go live with Smartstream financial interface Chris 21 AM Controller/officer February 28, March 31, June 30, Integration related exclusively to work orders at this stage, but deadlines flexible as work order implementation will lag well behind. (i) develop the option to enter a work order number instead of a project or GL; (ii) develop an automatic update of all project/wo numbers in Chris 21 that is run prior to processing pay each week Unlikely that work management will be live at the same time, but this milestone is necessary nonetheless. $1,000 $5, Financial integrat-ion Load default project numbers (Hansen budget numbers) against all assets and develop the ability to auto-populate these for work orders and override where necessary. AM Controller/officer June 30, Page 37 of 102

38 3. Implementation of Asset Management System (AMS) System Task Prede or Actions # cessor module GIS integrat-ion Inspect-ions Inspect-ions Hansen (general) Fleet GIS viewing - enable asset selection in Exponare (starting from Hansen and jumping to Exponare using PLP button) to be used in inspection or work order Implement work management for a single, straight forward asset class as a pilot study (and champion). Responsible branch officer must be capable of championing the system. Scope, prepare and implement work management within the AMS system based on revised processes (see task in AM framework section). May occur in a staged implementation depending on the results of preceding work management tasks. Complete user manuals and training programs for staff in work management Write Hansen reports on response times and LoS generally, are we meeting our targets? Are they feasible? Scope, prepare and implement inspections within Hansen. Develop observation types, condition indexes and inspection schedules. May include a large percentage of auto-load inspection data. Complete user manuals and training programs for staff in inspections Establish rolling program for staff training. Ensure regular contact and support is maintained, e,g. through the Hansen working group. Develop system for fleet management and fleet tendering (expand on this item closer to date). Responsible officer GIS coordinator, AM Controller/Officer, Infor & software provider AM Controller/officer and branch technical officers Property & sustainable works officer AM Controller and works depot supervisors with assistance from Infor consultants AM Controller/officer AM Controller/officer AM Controller/officer AM Controller/officer AM Controller/officer AM Controller/officer Resourc ed Work management Work management Work management Work management Target March 31, August 31, June 30, June 30, July 31, December 30, January 30, January 30, December 31, Comments/sub-tasks Potential for complicated development, but unsure until scoped in more detail between Infor & Lagen spatial Unsure which asset class will be the 1st to implement. Contenders may be parking meters, buildings, footpaths - all have established processes. Assume 2-3 days of Infor consulting to scope and build. Target date iexpected to be the last of the main implementation. Extra minor processes may continue to go live over time. Assume 1 mth Infor consulting for scoping and dev ment. Consider using Infor resources to conduct training - unknown cost. Update when further decisions made. Infor assistance may be, though good chance in-house expertise will suffice Will include ability to bulk load out-sourced inspections such as quarterly playground audits & GPS footpath defect data, plus manual input of inspection data. Assume 1 mth consulting total. Best done over the quiet school holiday period Intended purchase of Hansen CDR module Consulting or software costs $10,000 $5,000 $40,000 $40,000 $30,000 Page 38 of 102

39 8 REFERENCES Willoughby City Council acknowledges that the following documents helped to inform this improvement strategy; Asset Management Planning for NSW Local Government, A Department of Local Government Position Paper, The Local Government Planning and Reporting Guidelines, A Department of Local Government Manual, IIMM (International Infrastructure Management Manual), the Association of Local Government Engineering New Zealand Inc (INGENIUM) and the Institute of Public Works Engineering of Australia (IPWEA), Willoughby City Council Asset Valuations Methodology Willoughby City Council Operational Procedures Manual, 2010, Works Services Branch Page 39 of 102

40 APPENDIX A ASSET MANAGEMENT FRAMEWORK Willoughby City Strategy AM Policy Vision Goals Objectives Roles/responsibilities Governance/accountability AM Strategy Addresses broad actions like: - Staffing - Resources - IT - Tools - Data capture - AM Training - Business process endorsement - Development of framework/science Strategy Asset Management Plan Plan document Supporting documentaion Where are we now? Condition Assessment Manual - Asset portfolio dimensions & attributes - Physical Condition - Asset condition - Functionality/Capacity - Levels of service - Legislative Compliance (ratings only, not standards) - Financial summary Reactive maintenance/risk LoS manual Where do we want to be? - Hierarchies How can we achieve goals? - Intervention levels Future demand/utilisation/growth - Response times Maintenance level funding to achieve LoS Programmed maintenance LoS manual Capital project funding to achieve LoS Capital decision matrix manual Decision-making methodologies - Renewal - Refer supporting documents > - Upgrade/expansion Improvement plan (for AM processes) Criticality Matrix Manual (to prioritise capital works) - Multi-criteria, includes/replaces TBL Figure 0.1 Asset Management Framework and supporting documentation. For context within the Integrated Planning and Reporting Guidelines, see Figure 3.1. Page 40 of 102

41 APPENDIX B PROJECT ROLES & RESPONSIBILITIES FLOWCHART Page 41 of 102

42 APPENDIX C MATURITY ASSESSMENT TABLES Legend 2010 assessment: assessment: assessment: Ideal Target ROAD PAVEMENTS Unaware Aware Syst. Approach Competence Excellence (Processes & Plans) Asset Register Knowledge of Assets Service Level Specs & Measurement Demand Analysis & Management Strategic Planning & Lifecycle Analysis Asset Costing & Budgeting Works Management Performance Measurement Objective Capex Planning KPI (Systems & Tools) Asset Register System Strategic Planning Systems Works Management Systems Asset Costing Systems Customer Management Systems Plans & Records Management Spatial Mapping Systems Governance Accountability Risk Management Monitoring & Performance Compliance Page 42 of 102

43 FOOTPATHS Unaware Aware Syst. Approach Competence Excellence (Processes & Plans) Asset Register Knowledge of Assets Service Level Specs & Measurement Demand Analysis & Management Strategic Planning & Lifecycle Analysis Asset Costing & Budgeting Works Management Performance Measurement Objective Capex Planning KPI (Systems & Tools) Asset Register System Strategic Planning Systems Works Management Systems Asset Costing Systems Customer Management Systems Plans & Records Management Spatial Mapping Systems Governance Accountability Risk Management Monitoring & Performance Compliance Page 43 of 102

44 KERB & GUTTER Unaware Aware Syst. Approach Competence Excellence (Processes & Plans) Asset Register Knowledge of Assets Service Level Specs & Measurement Demand Analysis & Management Strategic Planning & Lifecycle Analysis Asset Costing & Budgeting Works Management Performance Measurement Objective Capex Planning KPI (Systems & Tools) Asset Register System Strategic Planning Systems Works Management Systems Asset Costing Systems Customer Management Systems Plans & Records Management Spatial Mapping Systems Governance Accountability Risk Management Monitoring & Performance Compliance Page 44 of 102

45 BRIDGES Unaware Aware Syst. Approach Competence Excellence (Processes & Plans) Asset Register Knowledge of Assets Service Level Specs & Measurement Demand Analysis & Management Strategic Planning & Lifecycle Analysis Asset Costing & Budgeting Works Management Performance Measurement Objective Capex Planning KPI (Systems & Tools) Asset Register System Strategic Planning Systems Works Management Systems Asset Costing Systems Customer Management Systems Plans & Records Management Spatial Mapping Systems Governance Accountability Risk Management Monitoring & Performance Compliance Page 45 of 102

46 STORMWATER Unaware Aware Syst. Approach Competence Excellence (Processes & Plans) Asset Register Knowledge of Assets Service Level Specs & Measurement Demand Analysis & Management Strategic Planning & Lifecycle Analysis Asset Costing & Budgeting Works Management Performance Measurement Objective Capex Planning KPI (Systems & Tools) Asset Register System Strategic Planning Systems Works Management Systems Asset Costing Systems Customer Management Systems Plans & Records Management Spatial Mapping Systems Governance Accountability Risk Management Monitoring & Performance Compliance Page 46 of 102

47 BUILDINGS Unaware Aware Syst. Approach Competence Excellence (Processes & Plans) Asset Register Knowledge of Assets Service Level Specs & Measurement Demand Analysis & Management Strategic Planning & Lifecycle Analysis Asset Costing & Budgeting Works Management Performance Measurement Objective Capex Planning KPI (Systems & Tools) Asset Register System Strategic Planning Systems Works Management Systems Asset Costing Systems Customer Management Systems Plans & Records Management Spatial Mapping Systems Governance Accountability Risk Management Monitoring & Performance Compliance Page 47 of 102

48 OPEN SPACE ASSETS Unaware Aware Syst. Approach Competence Excellence (Processes & Plans) Asset Register Knowledge of Assets Service Level Specs & Measurement Demand Analysis & Management Strategic Planning & Lifecycle Analysis Asset Costing & Budgeting Works Management Performance Measurement Objective Capex Planning KPI (Systems & Tools) Asset Register System Strategic Planning Systems Works Management Systems Asset Costing Systems Customer Management Systems Plans & Records Management Spatial Mapping Systems Governance Accountability Risk Management Monitoring & Performance Compliance Page 48 of 102

49 'OTHER' ASSETS - ARTWORKS ETC Unaware Aware Syst. Approach Competence Excellence (Processes & Plans) Asset Register Knowledge of Assets Service Level Specs & Measurement Demand Analysis & Management Strategic Planning & Lifecycle Analysis Asset Costing & Budgeting Works Management Performance Measurement Objective Capex Planning KPI (Systems & Tools) Asset Register System Strategic Planning Systems Works Management Systems Asset Costing Systems Customer Management Systems Plans & Records Management Spatial Mapping Systems Governance Accountability Risk Management Monitoring & Performance Compliance Page 49 of 102

50 K. Adlam Willoughby City Council 15/06/ APPENDIX D COUNCIL S ASSETS Council has been gathering data on the location, dimensions and condition of infrastructure assets in order to simultaneously fulfil Fair Value reporting requirements (AASB 116) and implement a corporate Asset Management System (AMS). As a consequence, knowledge on the state of Council s assets is being constantly refined. A summary of asset quantities, conditions and valuations is provided in Table 0.1. Given condition data, expected lives and patterns of degradation are available for almost all asset classes it is preferable, and more realistic financially, to estimate the costs of renewing these assets when they reach a defined intervention level, rather than simply the cost of renewal at end of life. This is an advanced variation of the information under Council s financial reporting requirements Section 428(2d) of the Local Government Act. The defined intervention level is the minimum acceptable level of service provision that is appropriate to each asset and is defined on a whole-of-class or individual basis as appropriate. It should be noted that when the minimum acceptable condition is adhered to, the average asset condition for that class would be much higher than the intervention level. Table 0.1 Summary of asset quantities and conditions, with actual and asset expenditure. Roads Asset Quantity 211 Footpaths open space Kerb & Gutter Bridges & culverts Stormwater pits Stormwater conduits / Buildings The Concour se Parks & furniture Sports grounds Units km km km no. no. km no. ha no. sites Average condition Acceptable condition (intervention level) *Before danger ** year renewal cycle 4 Total replacement value ($M) $179.6 $59.1 $79.8 $10.3 $2,181 $94.3 $139.7 (+ $180) $18.3** $16.5 *Condition rating scale used for bridges differs from other asset classes **Data has been extrapolated from a small sample set of assets The remainder of this appendix provides a text summary of the inventory attributes of each asset class in turn, including information regarding asset quantity, types, hierarchy distributions, average condition, gaps in knowledge or asset management practices and any other notable issues. Page 50 of 102

51 K. Adlam Willoughby City Council 15/06/ Road Pavements The total length of the sealed road network in Willoughby is 234 km. Of this, 23 km are classified as State Roads and Freeways and are maintained by the NSW Roads and Traffic Authority (RTA). Council is responsible for the care and control of the remaining 211 km of sealed roads, of which 12 km are classified as Regional whilst the remainder are Local roads. The total replacement cost of the road network under Council s control is $179.6M, valued at the component level. Road pavements generally consist of three components: seal, base and formation. The identification of ravelling, cracking, potholes and patching are good indicators of an aging pavement. Both ravelling and cracking are at acceptable levels and generally rare. There are no areas of major concerns with respect to the condition of the pavement. The level of roughness across all road classes is fairly uniform and representative of a road network that is predominantly subject to a low speed environment. Rutting across the network is very low. Some notable points about road pavements: Knowledge about the sealed road network in terms of quantity, type, condition, usage and treatment plans is much higher than any other asset class. A dedicated system (PARMMS Road Manager Pavement Management System) is used to store data collected from visual condition assessments, laser profilometry surveys and structural assessments, and optimises expenditure/work programs based on detailed intervention levels to produce models of future pavement degradation under a variety of budget scenarios. Kerb and Gutter The kerb and gutter network provided by Council conveys stormwater run-off from roads, adjoining footpaths and property into the stormwater network, supports the edge of the road pavement and prevents vehicles parking on footway areas. Excluding those constructed of in-situ materials, Council is responsible for 372 km of kerb and gutter with a total replacement cost of $79.8M. The average condition rating of the kerb and gutter network is 1.5 using Council s 0-5 rating scale. The majority of kerb and gutter is therefore considered to be in a good to very good condition. However, approximately one-third of the 2.5km of sandstone kerb within the Griffin conservation area is currently found with defects. Some notable points about kerb and gutter assets: Funding is available from two types of sources for kerb and gutter works: (a) a general funding pool allocated for kerb and gutter works; and (b) a portion of the funding allocated to road pavement works, allowing kerb and gutter works to be carried out simultaneously. An additional budget of $24,000 has been allocated for the replacement of sandstone kerbs in the Griffin conservation area starting from the / financial year. The risk map applied to works prioritisation of footpaths is also used for kerb and gutter. Footpaths Council is responsible for approximately 436 km of footways, 387 km of which is located within road reserves. The replacement cost of this portion of the network is $59.1M. The remaining 49 km is located within open space areas. The types of footpaths provided by Council include: concrete, bitumen and paved footpaths; unsealed footpaths of turf or natural materials; shared paths for pedestrians and cyclists; and stairs (excluding suspended stairs, which are treated as bridges for structural inspection purposes). The average condition of the footpath network is 1.8, based on Council s 0-5 rating scale. The adopted service level for footpaths is a minimum condition of 2. Those footpaths rated worse than 2 are considered to be beyond the threshold for intervention and should be addressed through Page 51 of 102

52 K. Adlam Willoughby City Council 15/06/ rehabilitation works or replacement. Although approximately 44% of the footpath segments trigger an intervention, less than 20% of the total area of these footpaths is actually affected by defects. Some notable points about footpaths within road reserves include: A risk map is used both to identify and to prioritise works, which combines condition assessment with risk management by applying weightings to areas surrounding high-use attractors and by taking age data into account. Footpaths within open space areas have not yet been assessed to the same extent as those in road reserves, and will be subject to different intervention thresholds and levels of service criteria. These will be addressed following a final audit of recently collected open space asset data. Bridges As of 30 June, Council is responsible for 71 bridges which facilitate geographical links as part of the greater transport network in the Willoughby LGA. The asset class of bridges includes the following types of structures: 21 major bridges; 8 major culverts (sewer or drain crossings under a road or embankment); and 42 minor structures with cross-sectional areas less that 3m 2, including boardwalks and suspended stairways. The total replacement cost of all three structure types and related components is $10.3M. Condition rating methodologies vary for each of the types of structures. Most major bridges are in a fair to good condition, with none having been assessed as poor or very poor. Major culverts are in a similar condition, with only one culvert placed in the worst category of critical. This culvert is being monitored and repairs have been budgeted for over two consecutive financial years. Minor structures are condition rated according to Council s 0-5 rating scale, and 80% of these are in good condition, with a rating of 2, whilst none receive an end-of-life rating of 5. Some notable points about bridges and other structures include: Prior to the 2010/11 financial year, no dedicated budget was available for bridges; Ownership is still being finalised for a handful of structures. Stormwater Council is responsible for the care and control of approximately 162 km of stormwater conduits, and 4,815 various stormwater pit types with a combined replacement cost of $94.3M. In addition, there are also Gross Pollutant Traps and detention basins in the Willoughby LGA with a combined estimated total replacement value of $7M. Since 2005, Council has undertaken closed circuit television (CCTV) inspections of 52% of all stormwater conduits (i.e. pipes and culverts). The remaining 48% of the network will take longer to survey as some resources will be directed towards re-inspecting other portions of the drainage network to allow validation of degradation patterns and increase confidence in future projections. Adopting a service level that is consistent with other assets, i.e. a minimum condition of 2, shows that approximately 58% of the stormwater conduits are considered to be beyond the threshold for intervention. However, as the current condition rating methodology is focused on severity and not the extent of the defects, the total length of conduits actually affected by defects is less significant than it appears. Some notable points about the stormwater drainage network: The average age of the stormwater network is greater than 70 years; Page 52 of 102

53 K. Adlam Willoughby City Council 15/06/ Currently, only 52% of the network has been inspected (although this is high compared to other Councils); A funding strategy improvement plans for gross pollutant traps and detention basins will be developed in the future. Integration of asset management planning with stormwater flood risk management plans will be developed in the future. Buildings Council owns 130 buildings and is responsible for their maintenance unless specified otherwise in lease agreements. The total replacement cost of Council s buildings portfolio is currently reported at $139.7M, including other asset types that may exist on Council-owned properties, such as fences and footpaths but not including The Concourse which was not brought on the books at the last valuation date. Buildings may fall into any of the following functional classifications: amenities; child care centres; commercial premises; community centres; council halls; council housing; council libraries; council offices; depots; and other facilities. For the purposes of determining the levels of service provision and prioritisation of future works, Council s buildings are divided into three hierarchical levels: Premium (8 buildings) High (50 buildings) Standard (72 buildings) The average condition of Council s buildings is 1.7, based on a comprehensive assessment (at the component level) of all buildings in Construction dates of Council s buildings range from 1910 to, with the most concentrated period of construction being between 1970 and 1990 ($70M), and then again from 2000 to the present ($50M + The Concourse). Some notable points about Building assets include: Confidence in condition data is relatively low as it serves the purposes of valuation only; Detailed data collection is currently underway and will continue; Buildings acquired between 1970 and 1990 account for 54% of the total portfolio replacement value, and those from 2000 to 2010 (excluding The Concourse) are 38%; The average expected life for the various types of building components is 60 years, so 54% and 38% of buildings would be due for renewal before 2040 and 2060, respectively; The Concourse, at $180M, will more than double the value of Council s building portfolio when it is reported on Council s financial statements in June. Passive Recreation (Parks) The total area of all open space areas within the Willoughby LGA is 424 hectares. Subtracting bushland areas, approximately 130 hectares of passive recreation spaces exist across 78 sites. Parks are divided into three hierarchical levels for the purposes of determining the levels of service provision and prioritisation of future works: A High (12 parks) B Medium (41 parks) C Low (25 parks) A variety of asset types are provided within these parks and reserves to meet the leisure and recreational needs of the community, including seating, barbecues, bins, footpaths, fencing, skate parks, dirt bike tracks, water features and extensive landscaping such as lawns and garden features. The total replacement cost of park assets is estimated to be $18.3M. The average condition rating for these assets is 3, based on an initial assessment of all assets within a representative sample of parks. This is considered to be broadly acceptable. Some notable points about assets in Parks include: Page 53 of 102

54 K. Adlam Willoughby City Council 15/06/ Comprehensive data collection has been completed, but assets have yet to be reported at Fair Value A shift from new assets to upgrade of existing assets is desired by the community Masterplan actions yet to be completed total $13.5M Sportsgrounds Council provides sporting facilities at 18 sites throughout the LGA in both open space areas and state government school grounds. The types of facilities include: ovals; basketball and netball courts; cricket pitches and practice nets; tennis courts, croquet greens, bocce courts and an athletics field. The provision of these facilities is possible due to the installation and maintenance by Council of various types of assets such as playing surfaces, fencing, goalposts and lighting. A comprehensive inventory of these asset types has been undertaken, showing an estimated total replacement value of $16.5M. Most of these assets have been assigned a condition rating of 2 on Council s 0-5 rating scale, indicating that they are in good condition. The major exception to this is the sub-surfaces of ovals which have been assigned condition ratings of 3 and 4 indicating they are due for replacement within the next 10 years. The replacement value of these sub-surfaces has been estimated at over $7.5 M. Some notable points about sports grounds include: Demand on fields over capacity Lighting does not meet current Australian Standards Maintenance expenses are high because of the high use of fields Limited ability to purchase new land for sports grounds. Strategies to address the issue of population growth and demand include: Synthetic turf at 3 fields - $3.3M; Upgrade existing lighting at 10 sites and install lighting at remaining 11 - $4.8M; Convert 5 existing courts into multi-use training spaces - $750K; Investigate alternative uses of other existing sports facilities. Playgrounds Council is responsible for 50 playgrounds, of which 39 fall within Open Space and 11 are associated with Council-owned child care centres and buildings. Only Open Space playgrounds are covered under this heading whilst all others have been captured as part of building assets. Playgrounds are divided into two categories, as follows: District (14 playgrounds) Local (25 playgrounds) Fencing, safety gates and undersurfacing are considered in conjunction with playground equipment. Playgrounds are inspected quarterly by a third party and receive at least one site visit per week from Council staff. The majority of playgrounds are rated 2 on Council s 0-5 condition rating scale, with no playgrounds receiving a rating of 5, which would indicate end of life. The expected life for playground equipment is 15 years. Whilst condition is used as the primary driver for asset renewal works, age may provide an additional means by which works can be prioritised. A number of playgrounds have been identified where all items of equipment are older than 15 years, and have been prioritised in the list of future renewals. Some notable points about assets in playgrounds include: Page 54 of 102

55 K. Adlam Willoughby City Council 15/06/ Council s current rate of playground renewal (3 playgrounds per year) should be sufficient to renew all playgrounds, however a backlog exists which would require extra funding for a couple of years to get back on track; Increases in population (and consequently playground usage) will result in increased maintenance costs, however more frequent renewals are expected to offset this; Data confidence for playground equipment is extremely high due to quarterly inspections, however more information is needed on fencing and under-surfacing. Bushland, Streetscapes and LATMs Data on assets within streetscapes and LATMs (local area traffic management, i.e. roundabouts and traffic islands) is underway but has not been completed. An overview of the entire asset class is therefore not yet possible. Data on assets within bushland areas has not yet been completed, however these assets represent a very small portion of Council s overall pool of assets and would be eclipsed by the expenditure on bushland regeneration. Council is responsible for a total of 290 hectares of bushland throughout 68 parks and reserves. Approximately 44 of the reserves consist entirely of bushland, accounting for 260 hectares, whilst the remainder exists alongside park lands, playgrounds and sports grounds. Bushland areas have been classified according to a three level hierarchy for prioritisation purposes. This is based on usage and is intended to prioritise works on hard assets such as seating, signage, barbecues and formal walking tracks. A 16 sites (~246 ha) B 25 sites (~36 ha) C 26 sites (~8 ha) The above hierarchy is not appropriate for prioritisation of bushland rehabilitation, weeding, and similar work on green assets. Since these tasks represent a significant proportion of bushland expenditure, some form of prioritisation is currently under development. At present, the following factors are taken into account in the distribution of resources: Weed infestation Bushfire hazard Ecology/conservation needs Bush care groups and community partnerships Reserve action plans The prioritisation methodology is likely to be one of the first of its kind, since the vast majority of Council s are not considering bushland for asset management. The significant expenditure in this area does, however, justify an attempt at documenting Council s current approach. Data on the condition, age and replacement cost of hard assets within bushland is not yet available. A comprehensive inventory will be compiled in preparation for Fair Value reporting of these assets on 30 June. Some notable points about assets in bushland reserves Data collection is yet to take place, so long term expenditure plans are not possible Walking tracks represent the largest proportion of PIP expenditure Various factors compete in different ways for resources in bush vegetation Many other councils are simply ignoring assets in bushland Page 55 of 102

56 K. Adlam Willoughby City Council 15/06/ APPENDIX E RENEWAL & REHABILITATION MODELLING All financial projections were made under three scenarios which were broadly consistent amongst all asset classes. These scenarios relate to levels of service provision. The scenarios are: Scenario name Scenario 1 Base Case Scenario 2 Meeting levels of service Scenario 3 Exceeding levels of service Assumptions Funding levels remain unchanged from the current trend, except for inflation Funding is sufficient to meet the minimum level of service deemed acceptable. Funding is sufficient to meet a slightly higher than acceptable level of service It should be noted that the level of service deemed acceptable may vary between asset classes. For example, a well-defined intervention program exists for roads based on precise treatments (see Section 6) whereas assets within parks are assumed to be all replaced completely at a single intervention point, due to the limited availability of detailed data. The specific level of service that applies to each asset class is listed under the relevant heading, followed by the results of modelled projections of renewal funding and finally, if applicable, projected maintenance and capital expenditure. It should be noted that interpretation of the information provided in this section (and its presentation during the workshop) will be greatly assisted by close reading of Section 5 in this handout. Page 56 of 102

57 K. Adlam Willoughby City Council 15/06/ Road Pavements Modelling of projected expenditure for roads is the most advanced of all asset classes, since a range of software packages exists that has captured many years of experience in road pavement modelling. Deterioration of road pavements under defined conditions can therefore be predicted with greater certainty with respect to the remainder of Council s major asset classes. Intervention points for roads are relatively complex, however a simplified explanation is provided here. The condition rating for a segment of road is calculated based on a number of factors such as roughness, rutting and cracking. If the condition score exceeds the values in the below table, then a treatment is triggered. For example if a segment of road that is classified as Residential Access (a.k.a. NAASRA class 9) has a roughness score greater than 160, a treatment is triggered. Depending on the severity of roughness, rut depth, etc, a treatment is initially proposed by the software depending the magnitude. An example of this resolution for roughness is shown in the table below. The result from the treatment classification matrix above is then fed into a resolution matrix, which will determine the appropriate pavement maintenance works that is depending on the surface type, the overlay thickness, the scores for cracking and the age of the pavement seal. An example of this resolution matrix for NAASRA Class 9 roads is shown below. Page 57 of 102

58 K. Adlam Willoughby City Council 15/06/ This represents an extremely advanced method and, with regular inspections, allows Council to produce a detailed and fully costed program of works based on the current road network condition. In an unconstrained budget scenario in Council s pavement modelling system, the annual rehabilitation expenditure fluctuates somewhat from one year to the next. Averaged over 20 years, however, it almost exactly matches Council s current projected budget. As such, the unchanged funding scenario (Scenario 1) does achieve Council s target level of service (Scenario 2) according to above matrices and there is no need to present these scenarios separately. The projected expenditure for rehabilitation of road pavements is presented below and the same set of axis as the projected average network condition for both road pavements and road surface. Page 58 of 102

59 K. Adlam Willoughby City Council 15/06/ Millions $3.0 $ $2.0 $1.5 $ Average Condition $ $ Rehabilitation and maintenance funding Average Condition - Pavement Average Condition - Surface The condition spread throughout the network for Pavements is provided below 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Condition 1 Condition 2 Condition 3 Condition 4 Condition 5 Page 59 of 102

60 K. Adlam Willoughby City Council 15/06/ The condition spread throughout the network for road surface is also provided. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Condition 1 Condition 2 Condition 3 Condition 4 Condition 5 Maintenance funding is considered in conjunction with renewal works under the singular item of rehabilitation and maintenance funding. The estimated operating expenditure, however, is in addition to this. No significant new works are foreseen for the planning period for Council to construct due to the urbanised nature of Willoughby LGA. The total projected funding inclusive of operational expenditure is shown below. Millions $4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 Rehabilitation and maintenance funding Operating expenditure New works expenditure Life cycle costing and gap analysis is presented below based on the above three scenarios. This analysis is not representative of annual budgets; please consult Section 5 for further explanation. Scenario Life Cycle Cost p.a. ($ 000) Life Cycle Expenditure p.a. ($ 000) Life Cycle Gap p.a. ($ 000) $2,735K $2,743K -$8K It is recommended that Council maintains the current projected level of funding for road pavement assets. Page 60 of 102

61 K. Adlam Willoughby City Council 15/06/ Kerb and Gutter Renewal modelling for kerb and gutter includes expenses which may be regarded as maintenance, since these two expense types can be difficult to separate with linear assets such as these and are better grouped together as rehabilitation expenditure. The model involved a consistent intervention point for the entire asset class. As already explained in the previous section, as soon as an asset degrades to the relevant intervention point, a treatment is, which may be a partial or complete replacement of a number of slabs. Whether all treatments can be carried out is budget dependent. The adopted intervention level for kerb and gutter is a condition rating of 2, when more than 15% of the kerb and gutter segment length is affected by defects. The prioritisation of rehabilitation works is assisted by a risk and needs analysis based on the map below, where red represents areas of the highest priority. The same risk and need map is used for footpaths. Given the uncertainties in the modelling procedure and the difficulty of separating expenditure types for this asst class, the recommended scenario does not aim for a zero backlog within the planning period, but rather seeks to maintain the current network condition. As the effect of increased funding is seen on the network condition in the real world and modelling becomes more advanced, a zero backlog may become a more realistic goal. As such, only the third scenario exceeding an acceptable level of service aims for a zero backlog. The modelling outputs for projected renewal expenditure have been extracted from the kerb and gutter asset management plan, complete with commentary. These are displayed on the following three pages, one scenario at a time. Page 61 of 102

62 K. Adlam Willoughby City Council 15/06/ Rehabilitation and Maintenance Scenario 1: Base Case Funding Required Funding Expenditure and Funding Gap As presented in Council s adopted / budget Millions $20.0 $18.0 $16.0 $14.0 $12.0 $10.0 $8.0 $6.0 $4.0 $2.0 $0.0 Rehabilitation and maintenance funding Rehabilitation and maintenance backlog Average Condition Average Condition Network Condition 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Condition 0 Condition 1 Condition 2 Condition 3 Condition 4 Condition 5 Comments The average condition of the kerb and gutter will deteriorate at a constant rate with significant number of segments reaching condition 4 in, i.e. 50% to 70% of K&G length is affected by defects. This increase, along with the increase in the rehabilitation and maintenance gap funding, indicate that it is likely that the assets will fail sooner, resulting in a higher whole of life costs. At this funding level, it will not be possible to maintain the current service level. However, it should be noted that these charts have not taken into account factors such as future improvements in efficiency of maintenance and repair techniques. Page 62 of 102

63 K. Adlam Willoughby City Council 15/06/ Rehabilitation and Maintenance Scenario 2: Recommended Funding Required Funding Expenditure and Funding Gap Increase of funding for kerb and gutter rehabilitation in conjunction with pavement works from $12,000 in the base case to $100,000 in / followed by a 10% p.a. increase thereafter. This plan is approximately equivalent to a funding increase of 2% p.a. over the base case scenario. Millions $20.0 $18.0 $16.0 $14.0 $12.0 $10.0 $8.0 $6.0 $4.0 $2.0 $0.0 Rehabilitation and maintenance funding Average Condition Average Condition Rehabilitation and maintenance backlog Network Condition 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Condition 0 Condition 1 Condition 2 Condition 3 Condition 4 Condition 5 Comments On average, the network condition deteriorates slightly but starts to improve again in the last five years, which corresponds to the backlog of works that starts decreasing in the same period. Overall the network is maintained at a level similar to the current condition. At this current funding level, the target service level is not yet achieved but it is heading closer in that direction. If the pattern in the last few years continue, it is likely that the backlog of works may be closed in the next modelling period. Page 63 of 102

64 K. Adlam Willoughby City Council 15/06/ Rehabilitation and Maintenance Scenario 3: Ideal Scenario Funding Required Funding Expenditure and Funding Gap Increase of funding for kerb and gutter rehabilitation in conjunction with pavement works from $12,000 in the base case to $180,000 in / followed by a 10% p.a. increase thereafter. This plan is approximately equivalent to a funding increase of 3.6% p.a. over the base case scenario. Millions $20.0 $18.0 $16.0 $14.0 $12.0 $10.0 $8.0 $6.0 $4.0 $2.0 $0.0 Rehabilitation and maintenance funding Average Condition Average Condition Rehabilitation and maintenance backlog Network Condition 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Condition 0 Condition 1 Condition 2 Condition 3 Condition 4 Condition 5 Comments At this funding level, the last of the rehabilitation and maintenance backlog is closed in the last year of the forecast period. By the end of the period, there is no kerb and gutter with defects affecting more than 20% of its length. The average network condition declines in the first half of the period but then steadily increases in the last half. This is the minimum funding level that will achieve the target service level. Page 64 of 102

65 K. Adlam Willoughby City Council 15/06/ Maintenance expenditure, as already explained, is included in projected rehabilitation expenditure and therefore does not need to be treated separately. Operational expenditure, on the other hand, is considered in addition to the amounts already reported. The total projected expenditure, inclusive of operational costs, is displayed for each scenario below. No significant capital expenditure (i.e. asset creation) is projected. The total projected expenditure for this asset class is displayed for all three scenarios. Model scenario Scenario 1 Total annual expenditure by type Millions $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 Scenario 2 Millions Rehabilitation and maintenance funding Operating expendture New works expenditure $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 Scenario 3 Millions Rehabilitation and maintenance funding Operating expendture New works expenditure $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 Rehabilitation and maintenance funding Operating expendture New works expenditure Page 65 of 102

66 K. Adlam Willoughby City Council 15/06/ Life cycle costing and gap analysis is presented below based on the above three scenarios. This analysis is not representative of annual budgets; please consult Section 5 for further explanation. Scenario Life Cycle Cost p.a. ($ 000) Life Cycle Expenditure p.a. ($ 000) Life Cycle Gap p.a. ($ 000) 1 1,840 K 935 K 904 K 2 1,500 K 1,177 K 323 K 3 1,383 K 1,382 K 1.3 K Whilst scenario 2 does not display the lowest life cycle gap, nor does it completely eradicate the backlog of rehabilitation works with the planning period, it does indicate a steady decrease in the backlog after approximately 15 years. It is likely that this reduction will continue over time, and that a zero backlog may be achieved in the following planning period. As such it is recommended that Council aim to achieve scenario 2 over the long term, following further refinement of levels of service through community consultation. Page 66 of 102

67 K. Adlam Willoughby City Council 15/06/ Footpaths Renewal modelling for footpaths assets includes expenses which may be regarded as maintenance, since these two expense types can be difficult to separate with linear assets such as these and are better grouped together as rehabilitation expenditure. The model involved a consistent intervention point for the entire asset class. As already explained in the previous section, as soon as an asset degrades to the relevant intervention point, a treatment is such as grinding (a low-cost alternative to removing trip hazards without the need for total asset renewal), or the complete replacement of a number of slabs. Whether all treatments can be carried out is budget dependent. The intervention level adopted in this modelling is Condition 2, which is defined as when more than 5% of the footpath segment area is affected by defects. The prioritisation of rehabilitation works is assisted by a risk and needs analysis based on the map below, where red represents areas of the highest priority. Since the budget that has already been adopted and included in the long term financial plan was based on previous rehabilitation modelling, it is considered financially sustainable. The budget currently adopted by Council is therefore considered to be ideal and as such, represents all three scenarios. The modelling outputs for projected renewal expenditure have been extracted from the footpath asset management plan, complete with commentary. Page 67 of 102

68 K. Adlam Willoughby City Council 15/06/ Funding levels remain unchanged from present except for inflation, and target levels of service are achieved Funding $1.7M in the /12 financial year with CPI applied at 3% every year thereafter. 1.4M of the total amount Required consists of rehabilitation funding and the remaining 0.3M includes dedicated maintenance funds for specific areas and footway types. Funding Expenditur e and Funding Gap Asset Stock Condition Distribution Millions $5.0 $4.5 $4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 Rehabilitation and maintenance funding Average Condition 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Average Condition Rehabilitation and maintenance backlog Comments Condition 0 Condition 1 Condition 2 Condition 3 Condition 4 Condition 5 The current backlog in the rehabilitation and maintenance works will be reduced after the initial four years. After this period, the funds provided each year should be sufficient to undertake the works triggered by the intervention level, which are those segments classified as Condition 2 or worse shown in the Projected Network Condition. No change to current funding is thus. In this model, once the backlog has been cleared, a lot of the works triggered would be closer to Condition 2 which is more likely to be maintenance works. A footpath segment that has had numerous maintenance works done may be free of defects and in good physical condition, above the intervention level. However, in reality, it may no longer be aesthetically pleasing because of the patchwork nature of previous rehabilitation work. In such circumstances, it is not unusual to replace the whole segment, which would be more costly and is not reflected in the model. Page 68 of 102

69 K. Adlam Willoughby City Council 15/06/ Maintenance expenditure for footpaths is included in the rehabilitation plan, and incorporates dedicated maintenance funds for specific areas and footway types. Operational expenditure, which is an estimate only at this stage, is considered in addition to rehabilitation expenditure. A capital program exists in the for of the Missing Links program, and this is represented in addition to projected rehabilitation expenditure. The total projected expenditure for this asset class is displayed below. Millions $4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 Rehabilitation and maintenance funding Operating expendture New works expenditure Life cycle costing and gap analysis is presented below based on the above three scenarios. This analysis is not representative of annual budgets; please consult Section 5 for further explanation. Scenario Life Cycle Cost p.a. ($ 000) Life Cycle Expenditure p.a. ($ 000) Life Cycle Gap p.a. ($ 000) 1 only 2,888K 2,888K 0 It is recommended that Council continue to fund footpath rehabilitation at the rate currently adopted for the /12 budget and already included in Council s long term financial plan. Page 69 of 102

70 K. Adlam Willoughby City Council 15/06/ Bridges Renewal modelling for bridges includes expenses which may be regarded as maintenance, since these two expense types can be difficult to and are better grouped together as rehabilitation expenditure. The model involved a consistent intervention point for the entire asset class. As already explained in the previous section, as soon as an asset degrades to the relevant intervention point, a treatment is such as grinding (a low-cost alternative to removing trip hazards without the need for total asset renewal), or the complete replacement of a number of slabs. Whether all treatments can be carried out is budget dependent. It should be noted that prior to no specific budget existed for bridge renewal, and the inspections carried out in 2009 highlighted a large backlog of renewal works that cannot be funded immediately. Regardless of the funding scenario, therefore it is expected to take some time to address the existing backlog of renewal works. Those bridges that represented significant risk to Council, however, have already been identified and repair works are being scheduled within available budget constraints. The intervention point for all bridges is Condition 2. The long term planning goal is to achieve this level of service within 20 years. Currently modelling is based on the assumption of complete replacement of each bridge component when the intervention point is reached. This may be refined in future as lower cost alternatives or treatment methods are identified for certain bridge components. Prioritisation of works on bridge assets are currently based only on their condition scores. There are two main reasons for this: The number of bridge structures under Council s responsibility is comparatively low. Many of the structures have similar characteristics that are typically used to prioritise bridge works, e.g. environment, traffic type, alternative route. This means that these structures all appear to have a very similar score when using point-based prioritisation system. In addition, when Level 2 inspections of the major bridges and major culverts are undertaken, the bridge inspectors identify which structures are in need of urgent repair within the next 12 months within specified budget constraints. The same intervention level was used for all three scenarios for bridge rehabilitation modelling. Given the uncertainties in the modelling procedure and the difficulty of separating expenditure types for this asset class, the recommended scenario does not aim for a zero backlog, but rather for a significant backlog reduction. As the effect of increased funding is seen on the network condition in the real world and modelling becomes more advanced, a zero backlog may become a more realistic goal. As such only the third scenario, exceeding an acceptable level of service, aims for a zero backlog. The modelling outputs for projected renewal expenditure have been extracted from the Bridge asset management plan, complete with commentary. These are displayed on the following three pages, one scenario at a time. These have been presented differently from the majority of the other asset classes because of the division of the bridge asset class into major bridges, major culverts and minor structures, all of which are rated, componentised and deteriorated differently in the renewal modelling. Page 70 of 102

71 K. Adlam Willoughby City Council 15/06/ Scenario 1 Base Case: As presented to Council and adopted in / budget ($150,000 in / financial year, $100,000 in / and / followed by 3% p.a. increase thereafter) Funding Expenditure and Funding Gap Network Condition Millions $10.0 $9.0 $8.0 $7.0 $6.0 $5.0 $4.0 $3.0 $2.0 $1.0 $0.0 No. structures Condition: Major Bridges Good to fair Fair to poor Danger Rehabilitation and maintenance funding Rehabilitation and maintenance backlog 8 Condition: Major Culverts 7 Comments: At this funding level, the condition of bridge assets is expected to decline significantly over the 20-year horizon. By the end of this period, a significant proportion of the major bridges and culverts will be in poor/danger zone and approximately half the minor structures are past the intervention point of Condition 2. No. structures It should be noted that these charts have not taken into account factors such as future improvements in technology and efficiency of maintenance and repair techniques. Furthermore, some maintenance works may have been undertaken from other funding sources, e.g. track maintenance during the period that may prolong the useful lives, although it is envisaged that with funding for bridge maintenance should be centralised with the implementation of Asset Management Plan. No. structures Satisfactory Medium Danger Condition: Minor Structures Condition 1 Condition 2 Condition 3 Condition 4 Condition 5 Page 71 of 102

72 K. Adlam Willoughby City Council 15/06/ Scenario 2 Recommended ($200,000 for / financial year followed by 5% p.a. increase thereafter) Funding Expenditure and Funding Gap Network Condition Millions $10.0 $9.0 $ Condition: Major Bridges $7.0 $6.0 $5.0 $4.0 $3.0 $2.0 $1.0 $0.0 No. structures Good to fair Fair to poor Poor to very poor Rehabilitation and maintenance funding Comments: Rehabilitation and maintenance backlog At this funding level, the condition of bridge assets will still deteriorate over the 20-year-horizon, but the backlog is at a more steady level compared to the first scenario. One major bridge is forecasted to be in poor to very poor condition by the end of the period, but no culverts are in danger zone. Backlog amounts are generally kept level, but there is a sharp increase in year / due to a significant number of components reaching the intervention level at the same time. It should be noted that these charts have not taken into account factors such as future improvements in technology and efficiency of maintenance and repair techniques. Furthermore, some maintenance works may have been undertaken from other funding sources, e.g. track maintenance during the period that may prolong the useful lives, although it is envisaged that with funding for bridge maintenance should be centralised with this Asset Management Plan. No. structures No. structures Condition: Major Culverts Satisfactory Medium Danger Condition: Minor Structures Condition 1 Condition 2 Condition 3 Condition 4 Condition 5 Page 72 of 102

73 K. Adlam Willoughby City Council 15/06/ Scenario 3 Ideal (14% p.a. increase from / financial year onwards) Funding Expenditure and Funding Gap Network Condition Millions $10.0 $9.0 $8.0 $7.0 $6.0 $5.0 $4.0 $3.0 $2.0 $1.0 $0.0 No. structures Condition: Major Bridges Good to fair Fair to poor Poor to very poor Rehabilitation and maintenance funding Comments Rehabilitation and maintenance backlog At this funding level, the condition of bridge assets is significantly improved. At the end of the 20 year period, no major bridge is at poor to very poor condition and no major culvert is at danger zone. Backlog of works increases in the first half of the period, but progressively decreases thereafter and is finally closed in the final year. No. structures Condition: Major Culverts It should be noted that these charts have not taken into account factors such as future improvements in technology and efficiency of maintenance and repair techniques. Furthermore, some maintenance works may have been undertaken from other funding sources, e.g. track maintenance during the period that may prolong the useful lives, although it is envisaged that with funding for bridge maintenance should be centralised this Asset Management Plan. No. structures Satisfactory Medium Danger Condition: Minor Structures Condition 1 Condition 2 Condition 3 Condition 4 Condition 5 Page 73 of 102

74 K. Adlam Willoughby City Council 15/06/ Maintenance expenditure is considered simultaneously with renewal expenditure under the single heading rehabilitation and maintenance funding. The estimated operating expenditure is in addition to this, and inspection costs have also been distinguished in long term projects. The total projected expenditure under each scenario is provided below. Model scenario Total annual expenditure by type Scenario 1 $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 Thousands Scenario 2 Thousands Rehabilitation and maintenance funding Operating expenditure Inspection $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 Scenario 3 Thousands $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 Page 74 of 102

75 K. Adlam Willoughby City Council 15/06/ Life cycle costing and gap analysis is presented below based on the above three scenarios. This analysis is not representative of annual budgets; please consult Section 5 for further explanation. Scenario Life Cycle Cost p.a. ($ 000) Life Cycle Expenditure p.a. ($ 000) Life Cycle Gap p.a. ($ 000) K 472K 428K 793K 655K 138K 782K 782K 0K The three expenditure plans above show that even though Plan 2 and Plan 3 require higher life cycle expenditure, the increased rehabilitation and maintenance funding also means lower life cycle costs while the bridge assets condition is significantly improved. It is recommended that Scenario 2 be adopted, as a higher level of funding will reduce the life cycle gap. While this funding level will not remove the funding gap, and therefore will not, in the short term, achieve the target level of service, future assessment of the impact of this funding increase on bridge assets condition will be reviewed and the funding levels or target service levels adjusted for future years as necessary. Page 75 of 102

76 K. Adlam Willoughby City Council 15/06/ Stormwater Modelling of renewal expenditure had to be performed on a sampling basis for stormwater. Although Council has data on the location and type of stormwater conduits within the LGA, condition data is available only for the 52% of the network that has been surveyed using CCTV. This inspection rate is very high relative to many other Councils, so it is an acceptable portion of the network upon which to base sampling assumptions. The condition spread of the surveyed portion of stormwater the network was thus extrapolated and applied to the remaining, unsurveyed, portion based on conduit type and pipe size. The intervention level originally presented for stormwater was Condition 2, which had been revised upwards from the previous year (Condition 4) in order to be consistent with all other classes of civil assets. This shows that approximately 58% of the stormwater conduits are now considered to be beyond the threshold for intervention. The backlog of renewal works may therefore have seemed larger than expected, however the original intervention level has been restored (Condition 4). This discrepancy highlights the need for community consulting in defining the acceptable level of service. The current condition rating methodology is focused on severity and not the extent of the defects, hence the total length of conduits actually affected by defects is less significant than it appears. Given the large backlog of renewal works, a prioritisation system is essential for carrying out selected renewal works. A priority scoring system has been developed based on a combination of physical condition, conduit cross-sectional area and location, as shown below. Criteria Factor Priority Score Physical condition Conduit Area Location Excessive structural deterioration rendering asset unserviceable. 1 Conduit has collapsed or collapse is imminent. Extreme structural deterioration affecting the structural integrity of the asset. 2 Serious erosion with missing invert or localised damage, serious open or displaced joint. Major offset joints. 3 Conduit has major displaced joints or open joints. Significant cracking. 4 Conduit surface shows crocodile cracking or longitudinal cracks at each quadrant. Minor defects only. 5 Conduit shows no major distress but has open joints, displaced joints, minor cracking, minor invert erosion or multiple exposed reinforcement areas or minor pipe joint damage. Generally good condition. 6 Conduit may have minimal cracking, open or displaced joints, holes or defects requiring minimal works. Near perfect condition. 7 Conduit area > 636,173mm² (equivalent of pipe diameter > 900mm) 1 110,500mm² < conduit area 636,173mm² (equivalent of 375mm < pipe diameter mm) Conduit area 110,500mm² (equivalent of pipe diameter 375mm) 1.75 Crossing property boundary 1 In road reserve 1.2 All three scenarios for renewal modelling were based on the above described intervention level. Scenario 1, as usual, demonstrates the results of maintaining the current level of funding, Scenario 2 shows the projected cost to maintain the network at the current average condition rating, and Scenario 3 shows the projected cost to ensure there are no assets rated worse than condition 2 while increasing average network condition and actively reducing the backlog. The modelling outputs for projected renewal expenditure have been extracted from the Stormwater asset management plan, complete with commentary. These are displayed on the following three pages, one scenario at a time. Page 76 of 102

77 K. Adlam Willoughby City Council 15/06/ Scenario 1: Base case Funding Required Funding Expenditure and Funding Gap Network Condition Comment Based on Council s adopted / budget Millions $40 $35 $30 $25 $20 $15 $10 $5 $0 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Page 77 of 102 Rehabilitation and maintenance funding Average Condition - Conduits Stormwater conduits - condition distribution Average Condition - Stormwater Conduits Rehabilitation and maintenance backlog Condition 1 Condition 2 Condition 3 Condition 4 Condition 5 At the current planned funding level, the condition of stormwater assets is expected to decline significantly over the 20-year horizon. By the end of this period, over 70% of the conduits is in condition worse than condition 2 ( good condition ). The backlog of work is significant to begin with, and steadily increases over time, with a sharp increase in 17th and 18th year where a significant quantity of assets reaching the intervention level, as shown by the sudden drop in the average network condition. It should be noted that these charts have not taken into account factors such as future improvements in efficiency of maintenance and repair techniques.

78 K. Adlam Willoughby City Council 15/06/ Scenario 2: Recommended case Funding Required Funding Expenditure and Funding Gap Network Condition Additional $250k, $500k, $1m, then $750k+3% to the base case funding in the first four years, followed by 3% p.a. increase thereafter; Millions $60 $50 $40 $30 $20 $10 $0 Rehabilitation and maintenance funding Average Condition - Conduits Stormwater conduits - condition distribution Average Condition - Stormwater Conduits Rehabilitation and maintenance backlog Comment 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Page 78 of 102 Condition 1 Condition 2 Condition 3 Condition 4 Condition 5 In the recommended case, varying amounts of funding is added to the base level funding in the first three years, followed by a steady 3% p.a. increase thereafter. By the end of the 20 year period, just under 50% of the stormwater conduits are expected to be in less than good condition (condition 2). The pattern of increase of backlog is similar to that of the base scenario, but in a lesser amount. Overall the average condition of the network is maintained over the period. It should be noted that these charts have not taken into account factors such as future improvements in efficiency of maintenance and repair techniques.

79 K. Adlam Willoughby City Council 15/06/ Scenario 3: Ideal case Funding Required Funding Expenditure and Funding Gap Additional $4,000,000 p.a. on top of the current planned funding. Millions $60 $50 $40 $30 $20 $10 $0 Rehabilitation and maintenance funding Rehabilitation and maintenance backlog Average Condition - Conduits Average Condition - Stormwater Conduits Network Condition Stormwater conduits - condition distribution Comment 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Page 79 of 102 Condition 1 Condition 2 Condition 3 Condition 4 Condition 5 The ideal case shows that an additional $4m p.a. on top of the base case funding is to actively manage the backlog that, in the first two scenarios, kept increasing. The average condition of the stormwater conduit network actually improves over time, and all the segments are in either very good or good condition. There is still a backlog at the end of the 20 year period, but at a much lower level than the first two scenarios, and should be able to be managed like the first round of backlog.

80 K. Adlam Willoughby City Council 15/06/ Total projected expenditure including estimated operating costs are provided below. Note that operating costs will increase with higher budgets as more resources will be to administer them. Model scenario Scenario 1 Total annual expenditure by type Millions $7.0 $6.0 $5.0 $4.0 $3.0 $2.0 $1.0 $0.0 Scenario 2 Millions $7.0 $6.0 $5.0 $4.0 $3.0 $2.0 $1.0 $0.0 Scenario 3 $6,000 Thousands $5,000 $4,000 $3,000 $2,000 $1,000 $0 Page 80 of 102

81 K. Adlam Willoughby City Council 15/06/ Life cycle costing and gap analysis is presented below based on the above three scenarios. This analysis is not representative of annual budgets; please consult Section 5 for further explanation. Scenario Life Cycle Cost p.a. ($ 000) Life Cycle Expenditure p.a. ($ 000) Life Cycle Gap p.a. ($ 000) 1 $ 2,943 K $ 1,270 K $ 1,672 K 2 $ 2,711 K $ 2,136 K $ 575 K 3 $ 2,337 K $ 2,337 K $ 0 K From the table above, it is evident that despite Plan 2 and Plan 3 having higher life cycle expenditure, the increased funding means that more assets are being repaired before they deteriorate further, resulting in a lower life cycle cost. Even though there is still a backlog of works in all three plans, the gap reduces significantly with the additional funding. As the financial modelling relies on a number of assumptions that can only be verified after a number of years, it is recommended to increase the funding as per Plan 2 initially. Future assessment of the effects of these funding increases on the condition of stormwater drainage assets will be assessed and the funding levels or target service levels revised in future years as necessary. It should be noted that this forecast has not taken into account possible future improvements in efficiency of maintenance and repair techniques. Additionally, future improvements to asset management planning may show that the funding gap demonstrated is conservative. It is recommended that funding be increased as per Plan 2 and that, as additional funding becomes available, the future improvements to the plan be made and a review be carried out within the next 5 years to assess the impacts of this increased funding and changes to the plan. Page 81 of 102

82 K. Adlam Willoughby City Council 15/06/ Buildings Renewal modelling in all scenarios for building assets involved distinct intervention points for each functional classification and hierarchy of building. Further differentiation was made between building components that were considered to present a particularly high risk such as fire services and rooves. As already explained in the previous section, as soon as a building or component degrades to the relevant intervention point, a treatment (or in this case complete replacement) is. Whether all treatments can be carried out is budget dependent. Scenario 1 involved no adjustment to the current budget except for CPI increases, and therefore shows the effect on the renewal backlog and the overall condition of the asset stock of maintaining current funding levels. For scenario 2, the budget was adjusted to achieve a near-zero gap. The levels of service, or intervention points, that were considered appropriate and used for these two scenarios are presented in the table below. Scenario 3 involved a similar table with slightly earlier intervention points specified these were mostly condition 3, except for high risk buildings requiring intervention at condition 2. Functional classification Hierarchy Fire Services Fit out (Floors) Fit out (Internal Screens) Floor Envelope Mechanical Services Roof Vertical Transport Whole building Amenities Child Care Commercial premises Community Centres Council halls Council housing Standard N/A N/A High N/A N/A N/A Standard N/A N/A N/A N/A 4 N/A 3 N/A N/A High N/A Premium N/A Standard 3 N/A N/A N/A 4 N/A 3 N/A N/A High Premium High N/A Premium N/A Standard N/A Standard N/A High N/A High N/A Standard N/A 3 High N/A N/A N/A N/A N/A N/A N/A N/A 3 Council offices Premium N/A Premium N/A Depot High N/A Investment property High N/A N/A N/A N/A N/A N/A N/A N/A 3 Library High N/A Standard Other facilities Standard N/A Sale and Obsolescence are global overriding constraints for all treatments, classifications and hierarchies N/A indicates that the combination of building type and component type does not exist in Council s portfolio The modelling outputs for projected renewal expenditure have been extracted from the Buildings asset management plan, complete with commentary. These are displayed on the following three pages, one scenario at a time. Page 82 of 102

83 K. Adlam Willoughby City Council 15/06/ Scenario 1: Funding levels remain unchanged from the current trend, except for inflation. Funding $240,000 in renewal funding allocated for the /12 financial year (since this was the estimated true Required expenditure on asset renewal the previous year) and CPI applied at 3% every year thereafter. Funding Expenditure and Funding Gap Millions $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 Allocated renewal funds Gap (Cost to bring to acceptable) Average Condition Average Condition Asset Stock Condition Distribution 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Comments Condition 0 Condition 1 Condition 2 Condition 3 Condition 4 Condition 5 Whilst the current level of funding appears to be sufficient for the next decade, an increasing number of assets will be due for renewal between and, probably due to the intense period of construction in the 1980s and 2000s and the shorter-lived components from those buildings (expected life of building components ranges from 15 to 150 years, with an average of 60 years). The second decade of the projection period (from to ) exhibits a steady decline in average asset condition. Between 10 and 20% of the asset stock falls below Council s defined minimum level of service, with 5% considered to be no longer providing a service and needing to be shut down. As this continues towards, the amount to bring those assets considered as unacceptable back to an acceptable condition increases exponentially. It is likely, though not quantifiable, that maintenance expenses would increase as a result of the worsening overall condition of the asset stock. At this funding level, it will not be possible to maintain the current service level. Page 83 of 102

84 K. Adlam Willoughby City Council 15/06/ Page 84 of 102

85 K. Adlam Willoughby City Council 15/06/ Scenario 2: Meet the minimum level of service deemed acceptable Funding $240,000 in renewal funding allocated for the /12 financial year (equal to the estimated current renewal Required expenditure) increasing at a rate of 5% per year in addition to CPI, which is applied at 3% (total of 8% increase). Funding Expenditure and Funding Gap Millions $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 Allocated renewal funds Gap (Cost to bring to acceptable) Average Condition Average Condition Buildings and their Component s Condition Distribution Comments 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Condition 0 Condition 1 Condition 2 Condition 3 Condition 4 Condition 5 The level of funding in this scenario ensures that all buildings or components that exceed acceptable levels are renewed within one or two years, resulting in a fairly stable average condition over the projection period. It is inevitable for a small funding gap to arise every few years because large numbers of assets may reach intervention points within a single year. As such, the aim for this scenario was not to achieve a funding gap of zero, but to ensure that, when a gap does arise, it decreases rapidly and does not increase over the 20 years. In this scenario, no assets reach condition 5 (the point at which they are considered to be no longer providing a service and need to be shut down) and less than 5% are in condition 4 (which is considered acceptable as this is the intervention point for a small number of assets). This scenario represents the minimum funding projections to meet a minimum acceptable level of service, as defined. Page 85 of 102

86 K. Adlam Willoughby City Council 15/06/ Scenario 3: Meet a slightly higher than acceptable level of service Funding $240,000 in renewal funding allocated for the /12 financial year (equal to the estimated current renewal Required expenditure) increasing at a rate of 11.5% per year in addition to CPI, which is applied at 3% (total of 14.5%). Funding Expenditure and Funding Gap Millions $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 Allocated renewal funds Gap (Cost to bring to acceptable) Average Condition Average Condition Buildings and their Component s Condition Distribution 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Condition 0 Condition 1 Condition 2 Condition 3 Condition 4 Condition 5 Comments The level of funding in this scenario ensures that, based on a slightly higher level of service than Scenario 2, all buildings or components that exceed acceptable levels are renewed within one or two years. This results in a fairly stable average condition over the projection period. It is inevitable for a small funding gap to arise occasionally because large numbers of assets may reach intervention points within a single year. As such, the aim for this scenario was not to achieve a funding gap of zero, but to ensure that, when a gap does arise, it decreases within a couple of years rather than increasing, and does not exceed the current funding gap. No assets reach condition 5 (the point at which they are considered to be no longer providing a service and need to be shut down) and none are in condition 4 over the 20 year period. This is because the intervention level is much earlier under this scenario, i.e. no assets are allowed to progress to condition 4 in this scenario. This scenario represents the minimum funding projections to meet a level of service which is considered to be higher than acceptable, but may be useful for strategic decision making. Page 86 of 102

87 K. Adlam Willoughby City Council 15/06/ Maintenance expenditure currently represents approximately 1.77% of the total replacement value of Council s building portfolio. As major new and upgrade works take place, maintenance expenditure is projected to increase at 1.77% of the value of those works. It is assumed that all projects listed in the capital program will be completed within 20 years. The total projected funding inclusive of maintenance expenditure and planned capital works is given below for each of the three scenarios. It is worth noting that the projected renewal expenditure on buildings is only a fraction of the maintenance expenditure. The difference in funding between each of the scenarios is due to differing levels of service and is mainly observed in the Renewal component of all expenditure. Model scenario Scenario 1 Total annual expenditure by type $35.0 $30.0 $25.0 $20.0 $15.0 $10.0 $5.0 $0.0 Millions Maintenance + Operational Renew al Upgrade New Scenario 2 Millions $35.0 $30.0 $25.0 $20.0 $15.0 $10.0 $5.0 $0.0 Maintenance + Operational Renew al Upgrade New Scenario 3 Millions $35.0 $30.0 $25.0 $20.0 $15.0 $10.0 $5.0 $0.0 Maintenance + Operational Renew al Upgrade New Page 87 of 102

88 K. Adlam Willoughby City Council 15/06/ Life cycle costing and gap analysis is presented below based on the above three scenarios. This analysis is not representative of annual budgets; please consult Section 5 for further explanation. Scenario Life Cycle Cost p.a. ($ 000) Life Cycle Expenditure p.a. ($ 000) Life Cycle Gap p.a. ($ 000) 1 9,997 9, ,899 9, ,456 10, Based on the above analysis, it is recommended that Council aim to achieve Scenario 2 over the long term, following further refinement of levels of service through community consultation. The Concourse does not form part of the above modelling procedure, since a detailed assessment of the building, complete with componentisation, has not yet been completed. Nonetheless, some attempt can be made to plan for long term expenditure for The Concourse based on the trends for Council s existing building portfolio and the known construction cost of The Concourse. A comparison of current budget amounts for The Concourse to current expenditure trends in Council s building portfolio for the different expense types is presented below. Expense type The Concourse /12 budget amount Budgets as % of total value of The Concourse Current expenses as % of total value of all building assets Comments Maintenance Operational $600, % 1.9% Based on itemised separation of Council s 2009/10 maintenance and operational expenditure. The ideal recommended maintenance expenditure for buildings is between 1 and 2% of the total replacement cost. $800, % 2.7% Based on itemised separation of Council s 2009/10 maintenance and operational expenditure. Renewal $0 0% 0.17% The current rate of renewal expenditure is considered sufficient in the short-term, but results in an increasing funding gap after 10 years. Council will conduct a detailed assessment of The Concourse in order to establish an itemised renewal schedule however, for the sake of this plan, it is assumed that some considerable time will pass before this brand new development requires significant renewal works. As such, Council will seek to gradually develop a renewal reserve fund over the 20 year planning horizon, as shown in the figure below, to avoid a potential funding gap. By the end of the 20 years Council should aim to allocate a renewal budget of approximately 1% of the total replacement cost of The Concourse. Millions $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 Page 88 of 102

89 K. Adlam Willoughby City Council 15/06/ Passive Recreation (Parks) Renewal modelling for Parks was not possible under the same method as has been carried out for other asset types, as asset data collection was not complete at the time of preparation of this information packs. This data collection has now been completed and will therefore be used for Fair Value financial reporting of assets and subsequently renewal modelling. In the interim, projected expenditure on assets within parks and reserves had been estimated based on a representative sample of parks and a basic assessment of the assets contained therein. These were extrapolated by park area and hierarchy to estimate the total value and condition distribution of Council s assets within parks. For selected asset types within parks, such as barbecues, bubblers and bins, a much higher level of confidence in the total inventory was possible due to inspection regimes and waste management contracts. The annual average renewal expense was calculated for each asset class, based on the total estimated replacement value and average expected life for that asset type. Projections were thus able to be made about the cost of renewing all assets at the end of their expected life, or at some earlier point, such as condition 4 or condition 3. The intervention level considered appropriate across the board for park assets was condition 4. The average annual renewal expenditure to achieve this level of service, and the frequency with which parks would then need to be completely upgraded, was calculated. Scenario 1 explores the effects of limited funding on the frequency of park renewals, compared with the desired level of service. Scenario 2 provides the funding to achieve that level of service, while scenario 3 assumes an earlier intervention level condition 3 and the funds to achieve this. The table below summarises the results. Number of complete park renewals possible each year by Hierarchy Scenario Driver Controlling factor for intervention level Required first year budget Ave. length of renewal cycle Ave. asset useful life A B C 1 1 st year budget $180,000 $180, Service level Condition 4 $612, Service level Condition 3 $816, Projection of the funding under each of these scenarios simply involves an increase for inflation. A capital program has been drafted based on actions identified in park Master Plans, landscape improvement plans and other plans relating directly to parks and reserves. This capital program assumes that all identified actions will be completed within the 20 year planning period. It is possible however, that some identified works may be deferred in favour of higher priority works that have not yet been identified. Maintenance and operational costs represent 7% of the total replacement value of the asset class, and are assumed to increase in line with new capital works. Projected renewal expenditure also increases as a result of new capital works. The total projected expenditure under each of the three scenarios described above is provided here. Page 89 of 102

90 K. Adlam Willoughby City Council 15/06/ Model scenario Total annual expenditure by type Scenario 1 Millions $8.0 $7.0 $6.0 $5.0 $4.0 $3.0 $2.0 $1.0 $0.0 Maintenance Renew al Upgrade New Scenario 2 Millions $8.0 $7.0 $6.0 $5.0 $4.0 $3.0 $2.0 $1.0 $0.0 Maintenance Renew al Upgrade New Scenario 3 Millions $8.0 $7.0 $6.0 $5.0 $4.0 $3.0 $2.0 $1.0 $0.0 Maintenance Renew al Upgrade New Page 90 of 102

91 K. Adlam Willoughby City Council 15/06/ Life cycle costing and gap analysis is presented below based on the above three scenarios. This analysis is not representative of annual budgets; please consult Section 5 for further explanation. Scenario Life Cycle Cost p.a. ($ 000) Life Cycle Expenditure p.a. ($ 000) Life Cycle Gap p.a. ($ 000) 1 2,630 2, ,609 3, ,094 4,094 0 It is recommended that Council aims to achieve Scenario 2 over the long term, following further refinement of levels of service through both community consultation and more advanced asset renewal modelling techniques. Page 91 of 102

92 K. Adlam Willoughby City Council 15/06/ Sportsgrounds Renewal modelling in all scenarios for sportsgrounds assets involved distinct intervention points for each combination of asset type and material. As already explained in the previous section, as soon as an asset degrades to the relevant intervention point, a treatment (or in this case complete replacement) is. Whether all treatments can be carried out is budget dependent. Scenario 1 involved no adjustment to the current budget except for CPI increases, and therefore shows the effect on the renewal backlog and the overall condition of the asset stock of maintaining current funding levels. For scenario 2, the budget was adjusted to achieve a near-zero gap. The levels of service, or intervention points, that were considered appropriate were uniform across almost the entire asset class, with the exception of Chatswood 1st grade cricket pitch, and were used for these two scenarios. Scenario 3 involved slightly earlier intervention points. Intervention points for all scenarios are summarised in the below table. Renewal scenario Intervention point Chatswood 1 st grade cricket pitch Intervention point all other assets Scenarios 1 & 2 Condition 3 Condition 4 Scenario 3 Condition 3 Condition 3 The modelling outputs for projected renewal expenditure have been extracted from the Sportsgrounds asset management plan, complete with commentary. These are displayed on the following three pages, one scenario at a time. Page 92 of 102

93 K. Adlam Willoughby City Council 15/06/ Scenario 1: Funding levels remain unchanged from the current trend, except for inflation. Funding $210,000 in renewal funding allocated for the /12 financial year (since this was the estimated Required expenditure on asset renewal the previous year) and CPI applied at 3% every year thereafter. Funding Expenditur e and Funding Gap Millions $6.0 $5.0 $4.0 $3.0 $2.0 $ Average Condition $0.0 Allocated renewal funds Gap (Cost to bring to acceptable) Average Condition 5.0 Asset Stock Condition Distribution 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Condition 0 Condition 1 Condition 2 Condition 3 Condition 4 Condition 5 Comments The rapid increase in the backlog of renewal works is mostly attributed to the subsurface component of playing surfaces, which represent the highest proportion, financially, of complete sportsground renewals. Renewal of these playing surfaces and subsurfaces have not been funded in previous years, so the condition of these assets is such that the majority of playing fields are already due for intervention, or will require intervention very soon, in order to provide the quality of playing surface deemed acceptable by Council. Without funding these high-cost renewals, the average asset condition is expected to fall steadily before stabilising, such that the condition of over 60% of assets are likely to be below Council s defined minimum level of service for sportsgrounds. Page 93 of 102

94 K. Adlam Willoughby City Council 15/06/ Scenario 2: Meet the minimum level of service deemed acceptable Funding $650,000 in renewal funding allocated for the /12 financial year increasing at a rate of 12% per year in Required addition to CPI,, which is applied at 3% (total of 15% increase) for 5 years to a maximum of $1.2M, then decreasing over 10 years to stabilise at $0.55M. Funding Expenditur e and Funding Gap Millions $6.0 $5.0 $4.0 $3.0 $2.0 $ Average Condition $0.0 Allocated renewal funds Gap (Cost to bring to acceptable) Average Condition 5.0 Asset Stock Condition Distribution 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Condition 0 Condition 1 Condition 2 Condition 3 Condition 4 Condition 5 Comments A significant boost in funding over 5 years is likely to address the existing backlog of costly sportsground renewals, permitting funding to stabilise at a lower level thereafter when complete renewals of playing surfaces can be undertaken on a cyclic basis. Under this scenario, no assets are considered unacceptable at the end of the 20 year planning period. It is possible however, that logistical difficulties with renewing several playing surfaces simultaneously would prevent Council from addressing the backlog in such a short period of time. The logistics of this scenario have yet to be further investigated. Page 94 of 102

95 K. Adlam Willoughby City Council 15/06/ Scenario 3: Meet a slightly higher than acceptable level of service Funding $1M in renewal funding allocated for the /12 financial increasing at a rate of 12% per year in addition to Required CPI, which is applied at 3% (total of 15%) over 5 years to a maximum of 1.5M, then decreasing steadily over 5 years and stabilising at 0.5M. Funding Expenditur e and Funding Gap Millions $6.0 $5.0 $4.0 $3.0 $2.0 $1.0 $0.0 Allocated renewal funds Gap (Cost to bring to acceptable) Average Condition Average Condition Asset Stock Condition Distribution 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Condition 0 Condition 1 Condition 2 Condition 3 Condition 4 Condition 5 Comments In order to meet a higher than acceptable level of service and maintain all assets at a condition 3 or above, a similar pattern of funding injection is as for scenario 2, however at a larger scale. At the end of the 20 year planning period, it is evident that there is no significant backlog of renewal works and that very few assets exist in a condition state worse than a 3. Page 95 of 102

96 K. Adlam Willoughby City Council 15/06/ Maintenance expenditure for sportsgrounds is not increased as a proportion of capital works, unlike some other asset classes, since the majority of works involve significant upgrades to assets that already undergo maintenance, and the upgrades should not represent a significant increase in existing expenses. The timing of all projects listed in the capital program has been varied slightly for each scenario within 20 years based on strategic goals in service provision for sporting facilities. Further detail on the three proposed capital programs is available upon request. The total projected funding inclusive of maintenance expenditure and planned capital works is given below for each of the three scenarios. The difference in funding between each of the scenarios is due to differing strategic levels of service and is observed in both the Renewal and Upgrade/New components total expenditure. Model scenario Scenario 1 Total annual expenditure by type $4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 Millions Maintenance + Operational Renew al Upgrade New Scenario 2 Millions $4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 Maintenance + Operational Renew al Upgrade New Scenario 3 Millions $4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 Maintenance + Operational Renew al Upgrade New Page 96 of 102

97 K. Adlam Willoughby City Council 15/06/ Life cycle costing and gap analysis is presented below based on the above three scenarios. This analysis is not representative of annual budgets; please consult Section 5 for further explanation. Scenario Life Cycle Cost p.a. ($ 000) Life Cycle Expenditure p.a. ($ 000) Life Cycle Gap p.a. ($ 000) 1 5,015 1,875 3, ,587 2, ,755 2, Based on the above analysis, it is recommended that Council aim to achieve Scenario 2 over the long term, following further refinement of levels of service through community consultation. Page 97 of 102

98 K. Adlam Willoughby City Council 15/06/ Playgrounds As for park assets, playground equipment has not yet been reported at Fair Value and therefore cannot be subject to the advanced technique of renewal modelling used elsewhere. A comprehensive inventory of playground equipment does, however, exist due to the rigorous quarterly inspection regime carried out by experts in playground safety. Based on the widely accepted average expected life for playground equipment of 15 years, scenarios were able to be prepared based on meeting, or exceeding, a level of service based on time of intervention. The intervention level considered acceptable was 15 years, and this was used to demonstrate any shortfall in current funding (scenario 1) and the funding in order to meet the level of service (scenario 2). An intervention level of 12 years was used in scenario 3, where the effect of a higher than acceptable level of service is demonstrated. For both scenarios 1 and 2, a detailed program of playground renewal and upgrade has been compiled for the 20 year planning period. This program is currently being adhered to and it is recommended that funding be provided to enable this to continue. The difference between scenarios 1 and 2 is that the latter includes an increase in renewal funding as new assets are built, with a 15 year time lag since those assets will not be due for renewal for that time. A summary of the capital program that has been prepared is below, however it should be noted that this graph does not represent projected total budgets, but only those expenses relating directly to identified and costed projects, Thousands $400 $350 $300 $250 $200 $150 $100 $50 $0 Renew al Upgrade New Scenario 3 differs from the first two because rather than using an established capital renewal program, the annual average renewal cost has been calculated based on a 12 year renewal cycle. Maintenance and operation expenses currently represent approximately 9% of the total replacement value of playground equipment. These maintenance costs increase as a result of new capital works in Scenarios 2 and 3.The total projected expenditure under each scenario is presented below, and is inclusive of maintenance costs. Page 98 of 102

99 K. Adlam Willoughby City Council 15/06/ Model scenario Scenario 1 Total annual expenditure by type $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 Thousands Maintenance Renew al Upgrade New Scenario 2 Thousands $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 Maintenance Renew al Upgrade New Scenario 3 Thousands $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 Maintenance Renew al Upgrade New Page 99 of 102

100 K. Adlam Willoughby City Council 15/06/ Life cycle costing and gap analysis is presented below based on the above three scenarios. This analysis is not representative of annual budgets; please consult Section 5 for further explanation. Scenario Life Cycle Cost p.a. ($ 000) Life Cycle Expenditure p.a. ($ 000) Life Cycle Gap p.a. ($ 000) It is recommended that Council aim to achieve Scenario 2 over the long term, following further refinement of levels of service through community consultation and more advanced renewal modelling techniques. Page 100 of 102

101 K. Adlam Willoughby City Council 15/06/ APPENDIX F LIFE CYCLE GAP ANALYSIS & REQUIRED FUNDING Life cycle costs have been calculated for each asset class based on the expenditure to meet a defined level of service. The difference between this expenditure, or life cycle cost and the actual projected expenditure under each scenario provides a life cycle gap which is an indicator of how well Council is able to achieve the target level of service over the long term. When expressed as a percentage of the life cycle cost, this gap can be compared between asset classes to show which are likely to be furthest from achieving desired levels of service. Life cycle gap analysis is presented for Scenario 1, 2 and 3 below, in that order. Life Cycle Cost p.a.($'000) Life Cycle Expenditure p.a. ($'000) Life Cycle Gap p.a.($'000) Gap as a percentage of Cost Road Pavements 2,735 2, % Kerb and Gutter 1, % Footpaths 2,888 2, % Bridges % Stormwater 2,943 1,270 1, % Buildings 9,997 9, % Passive Rec (Parks) 2,630 2, % Sportsgrounds 5,015 1,875 3, % Playgrounds % Life Cycle Cost p.a.($'000) Life Cycle Expenditure p.a. ($'000) Life Cycle Gap p.a.($'000) Gap as a percentage of Cost Road Pavements 2,735 2, % Kerb and Gutter 1,500 1, % Footpaths 2,888 2, % Bridges % Stormwater 2,711 2, % Buildings 9,899 9, % Passive Rec (Parks) 3,609 3, % Sportsgrounds 2,587 2, % Playgrounds % Life Cycle Cost p.a.($'000) Life Cycle Expenditure p.a. ($'000) Life Cycle Gap p.a.($'000) Gap as a percentage of Cost Road Pavements 2,735 2, % Kerb and Gutter 1,383 1, % Footpaths 2,888 2, % Bridges % Stormwater 2,337 2, % Buildings 10,456 10, % Passive Rec (Parks) 4,094 4, % Sportsgrounds 1,755 2, % Playgrounds % The additional funding each year to achieve the target levels of service under each scenario have been sub-totalled for all asset classes and are presented in the below table. These calculations are subject to the limitations the assumptions to predict future degradation, and will be continually refined over time. Page 101 of 102

102 K. Adlam Willoughby City Council 15/06/ Scenario 1 ($Millions) Scenario 2 =Scenario 1 +$Millions Scenario 3 =Scenario 1 +$Millions $19.9 $0.9 $1.5 $20.0 $1.5 $6.7 $20.7 $2.3 $7.2 $21.5 $2.6 $6.9 $23.7 $3.2 $6.7 $23.6 $2.8 $7.2 $23.5 $3.4 $6.7 $24.6 $3.0 $6.8 $25.6 $3.4 $7.3 $26.7 $3.7 $6.7 $28.2 $2.2 $6.6 $29.0 $2.9 $6.5 $28.6 $3.5 $7.0 $30.0 $3.1 $7.2 $31.0 $3.7 $7.5 $34.3 $3.8 $8.0 $35.7 $3.8 $8.6 $41.5 $4.2 $8.9 $42.8 $4.6 $9.6 $44.2 $5.2 $10.0 Page 102 of 102