City of Canning Asset Management Strategy 2015 2018
Document Control Version No Version Date Description TRIM Reference 1.0 11 December 2012 Asset Management Strategy D12/68776 2.0 23 September 2015 Updated Asset Management Strategy 2015-2018 D15/230757 3.0 8 October 2015 Updated Asset Management Strategy 2015-2018 with October 2015 Agenda Settlement Briefing comments D15/230757 City of Canning Asset Management Strategy 1
TABLE OF CONTENTS Document Control... 1 Executive Summary... 3 Strategy Outlook... 3 1. Introduction... 4 1.1 Legislative reform... 5 1.2 Asset Management Planning Process... 6 2. Overview of Council Assets... 6 3. The Organisation s assets and their management... 8 3.1 State of the Assets... 8 3.2 Life Cycle Analysis... 9 3.3 The Financial Ratios... 10 3.4 Asset Management Structure... 13 3.5 Corporate Asset Management Team... 13 3.6 Financial & Asset Management Core Competencies... 14 3.7 Strategy Outlook... 16 4. Where do we want to be?... 17 4.1 Council s Vision, Mission, Goals and Objectives... 17 4.2 Asset Management Policy... 18 4.3 Asset Management Vision... 18 5. How will we get there?... 19 6. Asset Management Improvement Plan... 20 7. Review Date and Audit... 21 Tables Table 1: Infrastructure assets and services provided... 6 Table 2: Financial status of assets (values derived from audited 2013/2014 Annual Report)... 8 Table 3: Operation & Maintenance and Capital Renewal Expenditure (values extracted from financial system)... 8 Table 4: Life Cycle Indicators (values derived from audited 2013/2014 Annual Report)... 10 Table 5: Financial Ratios explanation... 11 Table 6: Goals and Strategies for Infrastructure Assets... 17 Table 7: Asset Management Strategies... 19 Table 8: Asset Management Improvement Plan... 20 Figures Figure 1: Asset Replacement Costs (values derived from audited 2013/2014 Annual Report)... 9 Figure 2: Asset Consumption Ratio (values derived from audited 2013/2014 Annual Report)... 12 Figure 3: Asset Sustainability Ratio (values derived from audited 2013/2014 Annual Report)... 12 Figure 4: National Assessment Framework Asset Management Maturity Assessment (August 2015) 15 City of Canning Asset Management Strategy 2
Executive Summary This update of the City of Canning Asset Management Strategy has been prepared in accordance with the Department of Local Government and Communities Integrated Planning and Reporting Framework requirements. The Asset Management Strategy assists Council in improving the way it delivers services to the community via its infrastructure assets. These infrastructure assets include, but are not limited to, roads, bridges, footpaths, stormwater drainage, parks and recreation, buildings and fleet, which have a current replacement value of approximately $900 million. The Asset Management Strategy: Sets out the affordable level of asset service provision over the next 10 years, given projected available funding; Outlines how the Council s assets will be effectively managed to achieve agreed levels of affordable service; Outlines the requirements to ensure this Asset Management Strategy is achieved including implementation of an Asset Management Improvement Programme; Discusses the Asset Management Improvement Program that details the tasks required to achieve a core asset management maturity; Ensures the integration of Council s asset management system with council s Community Strategic Plan and Long Term Financial Plan; and Enables Council s Asset Management Policy to be achieved. Adopting this Asset Management Strategy will assist Council with the implementation of the Local Government Financial Sustainability Nationally Consistent Frameworks (LGPMC Financial Sustainability Frameworks) that were initiated by the Local Government and Planning Ministers Council (LGPMC) and adopted in 2007. This Asset Management Strategy has been prepared following a review of the Council s existing Asset Management Strategy, performance against the National Assessment Framework (NAF) and Strategic Community Plan. The Strategy outlines the improvements required in current asset management practices to bring Council within a core level of asset management maturity as per the National Assessment Framework criteria. Strategy Outlook 1. The City is committed to renew and upgrade key assets in order to address service levels that support achievement of the City s Community Strategic Plan. 2. The allocated annual budget for renewal of infrastructure assets is below the current annual life cycle cost of the assets, as shown in table 5. This indicates that the City either provides additional funding for asset renewals in order to maintain the delivery of current service levels or, alternatively there is a reassessment of the agreed service levels. 3. The City has an improvement plan to move above a core level of asset management maturity, as per the National Assessment Framework criteria, in the next four years. Achieving a core level of maturity will assist in aligning of the City s asset management practices with the LGPMC Financial Sustainability Frameworks. City of Canning Asset Management Strategy 3
1. Introduction Infrastructure Assets enable the delivery of important services to communities. A key issue facing local governments throughout Australia is the management of ageing assets in need of renewal and replacement. Infrastructure assets such as roads, bridges, footpaths, stormwater drainage, parks and recreation, buildings and fleet present particular challenges. Their condition and longevity can be difficult to determine. Financing needs can be large, requiring planning for large peaks and troughs in expenditure for renewing and replacing such assets. The demand for new and improved services adds to the planning and financing complexity. 1 The creation of new assets also presents challenges in funding the ongoing operating and replacement costs necessary to provide the needed service over the assets full life cycle. 2 The national frameworks on asset planning and management and financial planning and reporting endorsed by the Local Government and Planning Ministers Council (LGPMC) require councils to adopt a longer-term approach to service delivery and funding comprising: A strategic longer-term plan covering, as a minimum, the term of office of the councillors and: o bringing together asset management and long term financial plans, o demonstrating how council intends to resource the plan, and o consulting with communities on the plan Annual budget showing the connection to the strategic objectives, and Annual report with: o explanation to the community on variations between the budget and actual results, o any impact of such variances on the strategic longer-term plan, o report of operations with review on the performance of the council against strategic objectives. 3 Asset Management Policy Strategy & Planning o Asset Management Strategy o Asset Management Plan Governance and management Levels of service Data and systems Skills and processes, and Evaluation. 4 1 LGPMC, 2009, Framework 2 Asset Planning and Management 2 LGPMC, 2009, Framework 3 Financial Planning and Reporting 3 LGPMC, 2009, Framework 3 Financial Planning and Reporting 4 LGPMC, 2009, Framework 2 Asset Planning and Management City of Canning Asset Management Strategy 4
The Asset Management Strategy is to enable Council to show: How its asset portfolio will meet the service delivery needs of its community into the future, How Council s asset management policies are to be achieved, and The integration of Council s asset management with its Strategic Community Plan and Corporate Business Plan. The goal of asset management is to ensure that services are provided: In the most cost effective manner, Through the creation, acquisition, maintenance, operation, rehabilitation and disposal of assets, For present and future consumers. The objective of the Asset Management Strategy is to establish a framework to guide the planning, construction, maintenance and operation of the infrastructure assets that are essential for the provision of community services by Council. 1.1 Legislative reform In 2010 the Department of Local Government introduced the Integrated Planning and Reporting Framework for local governments. The framework required the council to prepare and adopt the Strategic Community Plan and Corporate Business Plan which needs to be supported by Long Term Financial Plan, Workforce Plan and Asset Management Plans. In accordance with the Department of Local Government and Communities Integrated Planning and Reporting Framework, an Asset Management Strategy outlines how the local government s asset portfolio will: Meet the service delivery needs of its communities into the future; Enable their Asset Management Policy to be achieved; and Ensure that asset management is established as part of the local government s plan for the future. It prioritises and articulates the delivery of community service needs through the development of Asset Management Plans for each major asset class. City of Canning Asset Management Strategy 5
1.2 Asset Management Planning Process Asset management planning is a comprehensive process to ensure assets are managed and maintained in a way that enables affordable services from infrastructure to be provided in an economically optimal way. In turn, affordable service levels can only be determined by assessing Council s financial sustainability by the comparison of various service level scenarios. Asset management planning commences with defining stakeholder and legal requirements, incorporating these requirements into the organisation s Strategic Community Plan and Corporate Business Plan, developing an Asset Management Policy, Asset Management Strategy, Asset Management Plans and Operational Plans, linked to a Long Term Financial Plan with a Funding Plan. 5 Asset Management Planning Process ASSET MANAGEMENT PLANNING Asset Management Philosophy & Framework Service Delivery Knowledge Legal and Stakeholder Requirements and Expectations Organisational Strategic Plan Vision, Mission, Goals & Objectives, Levels of Service, Business Policies, Risk ASSET MANAGEMENT POLICY ASSET MANAGEMENT STRATEGY Objectives, level of service target and plans ASSET MANAGEMENT PLANS Services & service levels to be provided, funds required to provide services OPERATIONAL PLANS Service delivery in accordance with asset management plans Asset solutions operate, maintain, renew, enhance, retire Non-asset solutions partnerships, demand management, insurance, failure management KNOWLEDGE MANAGEMENT Asset data and information systems Operational Tactical Strategic Planning Planning Planning 2. Overview of Council Assets Council provides services to the community via its infrastructure assets. The range of infrastructure assets and the services they provide are shown in Table 1. Table 1: Infrastructure assets and services provided Asset Class Description Outcomes Transport Road network Path network Bridges Street lights Street signs Parking signs - Provide choices for moving around the City that are sustainable, safe, inclusive and efficient. - Support development of an integrated transport network that meets the needs of pedestrians, cyclists, private vehicles, freight and public transport. 5 IPWEA, 2009, AIFMG, Quick Guide, Sec 4, p 5. City of Canning Asset Management Strategy 6
Asset Class Description Outcomes Stormwater Drainage Parks & Reserve Buildings & Property Fleet, Plant & Equipment ICT & Equipment Stormwater pipes Manholes/gullies/traps Sump/lake/compensating basins Open channels Park areas Includes Active and Passive park facilities Parks Furniture Includes benches, barbeques, bins, signs Playgrounds Includes play equipment and associated soft fall materials Parks Infrastructure Includes path network, carparks, retaining walls, fences, sport field lights, reserve lights Community Buildings Commercial Buildings Public Halls Libraries Sporting Buildings Leisureplexes Heritage Building Public Toilets Carparks Fleet - includes car, bus, utility, van, truck Plant - includes excavator, loader, mower, roller, forklift, back hoe Equipment includes auger, blower, compactor, compressor, spreader, sweeper, trimmer, welder Hardware and software to support service delivery - Control local flooding. - Improved road safety via the controlled management of stormwater runoff. - Reduce adverse environmental impacts from stormwater runoff. - Avoid flood damage to built assets through efficient stormwater runoff management. - Provide sport and recreation opportunities that suit the City of Canning community to help maintain a fit, active and social lifestyle. - The sport and recreation facilities the City provides are safe, accessible, appropriate, sustainable and support the City s economy and community lifestyle. - Coordinate the development of the services and facilities required to promote social wellbeing. - Preserve heritage and heritage values. - Develop libraries as community hubs for information, recreation and lifelong learning for people of all ages, backgrounds and education. - Preservation of the City s cultural and historical resources for future generations. - Provide fleet, plant and equipment to City staff to assist in meeting operational needs. - Provide fleet, plant and equipment at a cost that represents value for money. - Provide fleet, plant and equipment that minimises emissions and use of finite resources. - Provide Information and Communication Technology to City staff to assist in meeting operational needs. - Provide online services to the Community. City of Canning Asset Management Strategy 7
3. The Organisation s assets and their management 3.1 State of the Assets The financial status of the City s assets, as per the audited 2013/2014 Annual Report are shown in Table 2. Table 2: Financial status of assets (values derived from audited 2013/2014 Annual Report) Asset Class Replacement Cost ($000) Residual Value ($000) Depreciable Amount ($000) Depreciated Replacement Cost ($000) Depreciated Replacement Cost of Depreciable Assets ($000) Annual Depreciation ($000) Transport 458,415 146,698 311,717 308,416 161,718 7,506 Stormwater 61,626 109,414 0 109,414 61,226 1,368 Drainage Park & Reserve 62,214 34,684 29,530 47,792 13,108 989 Building & Property Fleet, Plant & Equipment 228,826 0 228,826 127,619 21,019 4,557 16,462 10,198 127,619 5,641 4,491 2,221 ICT & Equipment 19,070 0 19,070 1,766 1,766 553 TOTAL 900,958 185,939 715,019 557,417 371,478 17,128 The City s Operation & Maintenance and Capital Renewal Expenditure are shown in Table 3. Table 3: Operation & Maintenance and Capital Renewal Expenditure (values extracted from financial system) Asset Class 2013/2014 Operations & Maintenance Expenditure ($000) 2013/2014 Capital Renewal Expenditure ($000) Transport 4,387 6,766 Stormwater Drainage 903 319 Park & Reserve 13,530 525 Building & Property 5,267 494 Fleet, Plant & Equipment 3,691 4,100 ICT & Equipment 0 0 TOTAL 27,778 12,204 City of Canning Asset Management Strategy 8
Explanatory note on financial data: Capital renewal expenditures are reported based on the 2013/14 financial system approved budgets and expenditure information and are not from the asset management system financial information. There is a reasonably low confidence in the data in that the expenditure classifications should have been improved across operations, maintenance renewals and new for correctness of placement. Operations, maintenance and renewal expenditures are not recorded separately for ICT & Equipment, hence the $0 in table 3 & 4. Currently the ICT & Equipment financial data is captured amongst Furniture & Equipment. Asset Replacement Cost 2% 2% 26% 7% 51% Transport Stormwater Drainage Park & Reserve Building & Property Fleet, Plant & Equipment ICT & Equipment 12% Figure 1: Asset Replacement Costs (values derived from audited 2013/2014 Annual Report) 3.2 Life Cycle Analysis Life cycle costs (or whole of life costs) are the average costs that are required to sustain the delivery of the agreed levels of service over the longest asset life. Life cycle costs include operating and maintenance expenditure and asset consumption (depreciation). The life cycle costs for the Asset Classes covered in this Asset Management Strategy are shown in Table 4. Life cycle expenditure includes operating, maintenance and capital renewal expenditure in the previous year or preferably averaged over the past 3 years. Life cycle expenditure will vary depending on the timing of asset renewals. The life cycle expenditure of 2013/2014 is shown in Table 4. City of Canning Asset Management Strategy 9
The life cycle costs and life cycle expenditure comparison highlights the differences between present expenditure and the average cost of providing the service over the long term. If the life cycle expenditure is less than the life cycle cost, it is likely that the current levels of service are unable to be sustained. In order to maintain the current service levels expenditure will need to be increased. Alternatively, consideration can be given to adopting changes to the agreed levels of service which fall in line with Council s financial position. Knowing the extent and timing of required expenditure and required change to levels of service if funding is unavailable will assist Council in providing services to the Community in a financially sustainable manner. A shortfall between life cycle cost and life cycle expenditure gives an indication of the life cycle gap to be addressed in the Asset Management Plans and Long Term Financial Plan. The life cycle gap and life cycle indicator for Asset Classes covered by this Asset Management Strategy are shown in Table 4. Table 4: Life Cycle Indicators (values derived from audited 2013/2014 Annual Report) Asset Class Life Cycle Cost ($000/year) Life Cycle Expenditure ($000/year) Life Cycle Gap ($000/year) Life Cycle Indicator Transport 11,893 11,153-740 0.94 Stormwater Drainage 2,271 1,222-1,049 0.54 Park & Reserve 14,519 14,055-464 0.97 Building & Property Fleet, Plant & Equipment 9,758 5,761-3,997 0.59 5,912 7,791 1,879 1.32 ICT & Equipment 553 0-553 0.00 TOTAL 44,906 36,921-4,924 0.89 Note: The Life Cycle Indicators are a snapshot summary and are best read in conjunction with the Asset Financial Ratios. The integrity of this snapshot is directly dependent on data sourced from the Financial System, i.e. how expenditure information is accounted for amongst asset classes and expenditure types as operation, maintenance and capital renewal. 3.3 The Financial Ratios Government of Western Australia, Department of Local Government and Communities Local Government Operational Guidelines Number 18 published in June 2013 gives explanation of Financial Ratios. They are explained in table 5. City of Canning Asset Management Strategy 10
Table 5: Financial Ratios explanation Financial Ratio Description Standards Ratio Calculation Asset Consumption Ratio This ratio seeks to highlight the aged condition of a local government s stock of physical assets. Standard met if ratio >50%. Standard improving if ratio 60% - 75%. Asset Consumption Ratio = Depreciated Replacement Cost of Depreciable Assets Current Replacement Cost of Depreciable Assets Asset Sustainability Ratio This ratio is an approximation of the extent to which assets are being replaced as these reach the end of their useful lives. Standard met if ratio 90%. Standard improving if ratio is between 90% - 110%. Asset Sustainability Ratio = Capital Renewal and Replacement Expenditure Depreciation Asset Renewal Funding Ratio This ratio indicates the financial capacity to fund asset renewal as required and can continue to provide existing levels of services in future without additional operating income; or reductions in operating expense. Standard met if ratio 75% - 95%. Standard improving if ratio is between 95% - 105%. Asset Renewal Funding Ratio = NPV of Planned Capital Renewals over 10 years NPV of Required Capital Expenditure over 10 years City of Canning Asset Management Strategy 11
The City s Financial Ratios as derived from 2013/14 Annual Report are illustrated below. Asset Consumption Ratio 80% 70% 60% 50% 40% 30% 20% 67% 56% 74% 56% 49% 50% 10% 0% Transport Stormwater Drainage Park & Reserve Building & Property Fleet, Plant & Equipment ICT & Equipment Asset Consumption Ratio Standard Met Standard Improving Figure 2: Asset Consumption Ratio (values derived from audited 2013/2014 Annual Report) Asset Sustainability Ratio 200% 180% 160% 140% 120% 100% 80% 185% 60% 40% 20% 0% 90% Transport 23% Stormwater Drainage 53% Park & Reserve 11% Building & Property Fleet, Plant & Equipment 0% ICT & Equipment Asset Sustainibility Ratio Standard Met Standard Improving Figure 3: Asset Sustainability Ratio (values derived from audited 2013/2014 Annual Report) City of Canning Asset Management Strategy 12
Note: The Asset Sustainability Ratio provides a snapshot of the asset classes capital renewal expenditure compared to their depreciation value. The two significant variables are how the capital renewal expenditure is recorded in our financial system, as well as the decision making around Useful Lives which influences the depreciation amounts. It has been highlighted in the Improvement Plan that a review of Useful Lives across various asset classes be completed to ensure that the City s Assets are being depreciated appropriately. The high Asset Sustainability Ratio for Fleet, Plant & Equipment could be accounted by either a relatively long useful life of Fleet, or there is further reconciliation required between useful life and fleet replacement protocols. Asset Renewal Funding Ratio In absence of reliable data on asset renewal funding, the Asset Renewal Funding Ratio has not been populated and will be included as a part of Asset Management Improvement Programme. 3.4 Asset Management Structure The Chief Executive Officer has formed an Asset Management team to execute this Strategy. 3.5 Corporate Asset Management Team The City of Canning has implemented a whole of organisation approach to asset management with a corporate asset management team. The benefits of a corporate asset management team include: Demonstrated corporate support for sustainable asset management, Encourage corporate buy-in and responsibility, Coordinating strategic planning, information technology and asset management activities, Promoting uniform asset management practices across the organisation, Information sharing across information technology hardware and software, Championing of the asset management process, and Wider accountability for achieving and reviewing sustainable asset management practices. The role of the asset management team evolves as the organisation maturity increases over several phases. Phase 1 Asset Management Policy and Strategy update and the implementation of an asset management improvement program, Asset Management Plan development and implementation, Reviews of data accuracy, levels of service and systems plan development. Phase 2 Asset Management Plan operation, Evaluation and monitoring of Asset Management Plan outputs, Ongoing Asset Management Plan review and continuous improvement. City of Canning Asset Management Strategy 13
3.6 Financial & Asset Management Core Competencies The National Frameworks on Asset Planning and Management and Financial Planning and Reporting define 10 elements. Eleven core competencies have been developed from these elements 6 to assess core competency under the National Frameworks. The core competencies are: Financial Planning and Reporting Strategic Longer Term Plan Annual Budget Annual report Asset Planning and Management Asset Management Policy Asset Management Strategy Asset Management Plan Governance & Management Levels of Service Data & Systems Skills & processes Evaluation The City s maturity assessment for the core competencies in asset management as per National Assessment Framework (NAF) is shown below in a spider diagram. The assessment score ranges from 0-5 with a score of 3 indicating achievement of core maturity, and a score of 5 indicating advanced maturity. The City s current maturity level is shown by the green line. The City s target is to achieve maturity above 3, as shown by the red line, by the end of the 2018-2019 financial year and progress towards achieving an advanced level of maturity. 6 Asset Planning and Management Element 2 Asset Management Strategy and Plans divided into Asset Management Strategy and Asset Management Plans competencies. City of Canning Asset Management Strategy 14
Figure 4: National Assessment Framework Asset Management Maturity Assessment (August 2015) City of Canning Asset Management Strategy 15
3.7 Strategy Outlook 1. The City is committed to renew and upgrade assets to address service levels that support achievement of the City s Community Strategic Plan. 2. The budget allocation for infrastructure asset renewal is below current infrastructure life cycle cost as shown in table 5. This means, additional funding is required for asset renewal to maintain the current level of services. An alternative is to reassess the service level delivery commitment to better fit with the financial sustainability of the City. 3. A number of recommendations from the previous Asset Management Strategy have been implemented including the installation of centralised Asset Management software system and establishing a dedicated asset management team. The Finance team will support the asset management team with asset accounting services. With this integrated approach the City is expected to be able to achieve the targeted level of asset management maturity. City of Canning Asset Management Strategy 16
4. Where do we want to be? 4.1 Council s Vision, Mission, Goals and Objectives Council has adopted a Vision for the future in the Strategic Community Plan. In the City we are proud to protect and enjoy our unique natural environment and work together to enhance the health, wellbeing and sustainability of our community. Our civic leaders are innovative and receptive to our visions for our future. As a connected and inclusive community, we enjoy quality lifestyles and opportunities to live, work, play and do business locally. Council s adopted mission statement is; Above all Service The Strategic Community Plan sets goals and strategies to be achieved in the planning period. The goals set out where the organisation wants to be. The strategies are the steps needed to get there. Goals and strategies relating to the delivery of services from infrastructure assets are shown as below. Table 6: Goals and Strategies for Infrastructure Assets Goals Integrated, accessible, safe and sustainable transport options for the City Safe, well-designed and maintained roads in the City Protect and enhance the amenity and lifestyle within the City Landscaped Urban Spaces Strategies - Continue to improve pedestrian and cycling infrastructure and pathways. - Work with other stakeholders to improve linkages, accessibility, frequency and integration of public transport services. - Promote road safety for all users by providing a safe, efficient and well maintained road network. - Promote the integration of transport and housing. - Promote appropriate quality recreation and public open space for housing and urban development. - Strive to maintain attractive and diverse green spaces throughout the City to encourage outdoor activity, health and wellbeing. City of Canning Asset Management Strategy 17
4.2 Asset Management Policy Council s Asset Management Policy defines the purpose and service delivery objectives for asset management in accordance with the Strategic Community Plan and applicable legislation. The Asset Management Strategy is developed to support the Asset Management Policy and is to enable council to show: How its asset portfolio will meet the affordable service delivery needs of the community into the future, Enable Council s asset management policies to be achieved, and Ensure the integration of Council s asset management with its Strategic Community Plan and Corporate Business Plan. 4.3 Asset Management Vision To ensure the long term financial sustainability of the City, it is essential to balance the community s expectations for services with their willingness to pay for the infrastructure assets used to provide the services. Maintenance of service levels for infrastructure services requires appropriate investment over the whole of the asset life cycle. To assist in achieving this balance, Council aspires to: Develop and maintain asset management governance, skills, process, systems and data in order to provide the level of service the community need at present and in the future, in the most costeffective and fit for purpose manner. In line with the vision, the objectives of the Asset Management Strategy are to: Ensure that the services from the City s infrastructure assets are provided in an financially sustainable manner, with the appropriate level of service to the community, Safeguard Council s infrastructure assets by implementing appropriate asset management strategies and financial resources for those assets, Adopt the long term financial plan as the basis for all service and budget funding decisions, Meet legislative requirements for all Council s operations, Ensure resources and operational capabilities are identified and responsibility for asset management is allocated, Provide high level oversight of Financial and Asset Management responsibilities through the Asset Management Steering Committee. The Steering Asset Management Committee will be responsible for facilitating cross organisational availability of resources, ensuring the asset management implementation is linked to service delivery and provide direction for the organisation s progress on asset management maturity. Strategies to achieve this position are outlined in Section 5. City of Canning Asset Management Strategy 18
5. How will we get there? The City s current asset management maturity is below core level and investment is being made to improve information management, lifecycle management, service management and accountability and direction. The following strategies are proposed to achieve desired outcomes. Table 7: Asset Management Strategies ID Strategy and Actions Desired Outcome 1 2 3 4 5 6 7 8 9 10 Move from Annual Budgeting to Long Term Financial Planning Develop and annually review Asset Management Plans covering at least 10 years for all major asset classes (90% of asset value) which includes Transport (incorporating Stormwater Drainage), Parks & Reserve and Building & Property. Develop Long Term Financial Plan covering 10 years incorporating Asset Management Plan expenditure projections with a sustainable funding position outcome. Incorporate Year 1 of Long Term Financial Plan revenue and expenditure projections into annual budgets. Review and update Asset Management Plans and Long Term Financial Plans after adoption of Annual Budgets. Communicate any consequence of funding decisions on service levels and service risks. Report Council s financial position at Fair Value in accordance with Australian Accounting Standards, financial sustainability and performance against strategic objectives in Annual Reports. Ensure Council s decisions are made from accurate and current information in asset registers, on service level performance and costs and whole of life costs. Ensure responsibilities for asset management are identified and incorporated into staff position descriptions. Implement an Improvement Plan to realise core maturity for the financial and asset management competencies within 2 years. Report six monthly to Council on development and implementation of Asset Management Strategy and Asset Management Plans. The long term implications of Council services are considered in annual budget deliberations. Identification of services needed by the community and required funding to optimise whole of life costs. Sustainable funding model to provide Council services. Long term financial planning drives budget deliberations. Council and the community are aware of changes to service levels and costs arising from budget decisions. Financial sustainability information is available for Council and the community. Improved decision making and greater value for money. Responsibility for asset management is defined. Improved financial and asset management capacity within Council. Provision of appropriate resources and performance monitoring. City of Canning Asset Management Strategy 19
6. Asset Management Improvement Plan A program of tasks and resources required to achieve a minimum core level of asset management maturity has been developed in the Asset Management Strategy. The tasks and resources are illustrated below. Table 8: Asset Management Improvement Plan Task ID Task Responsibility 1 2 3 4 5 6 7 8 9 Council s Asset Management Strategy is linked to Council's Asset Management Policy and it details where the Council wants to be. Annual Budget is adopted in consideration of the Strategic Community Plan. Explanation on variations between budget and actual results are reported annually. Asset owners for all assets are clearly identified. Roles and responsibilities are clearly defined, identifying the positions responsible for determining levels of service and the positions responsible for managing the assets to deliver the determined levels of service. Asset Management Plans for major asset classes are prepared and adopted by Council. Asset Management Plans include levels of service, a risk management plan and an asset management improvement plan. Asset Management Plans link to the Council s Asset Management Policy, Asset Management Strategy, Strategic Community Plan, Corporate Business Plan, Long Term Financial Plan and other relevant Council strategies and plans. City has documented repeatable methodologies to carry out consistent asset condition surveys and defect identification assessments, as documented in a Condition Rating Assessment Manual for applicable asset classes. Target Timeframe Chief Executive Officer 2015-16 Chief Executive Officer 2018-19 Chief Executive Officer 2018-19 Chief Executive Officer 2015-16 Chief Executive Officer 2015-16 Chief Executive Officer 2015-16 Chief Executive Officer 2015-16 Chief Executive Officer 2015-16 Chief Executive Officer 2016-17 City of Canning Asset Management Strategy 20
Task ID Task Responsibility 10 11 12 13 14 15 16 17 18 City has a process to collect and record asset data into an Asset Management system upon the commissioning of new (and/or modified) assets, including built and contributed assets. City has formal processes for the handover of assets to Facility/Asset Manager Following each Annual Budget cycle, Asset Management Plans are updated to reflect the current financial position and to maintain currency between all documents. The Long Term Financial Plan includes renewal programs derived from Asset Management Plans. The Long Term Financial Plan clearly identifies the ongoing maintenance/operational, renewal and new works. City has defined and documented procedures for determining asset replacement cost and unit rates. City has a defined methodology for assessing the Remaining and Useful Life, Residual Value and Depreciation Method of assets. City has a consolidated, integrated, accurate, up to date and complete componentised asset register with the required functionality to ensure security and data integrity, which includes all information about each asset. City records the results of asset condition surveys and defect assessments against individual assets, linked to the componentised inventory in the asset register. Target Timeframe Chief Executive Officer 2016-17 Chief Executive Officer 2016-17 Chief Executive Officer 2016-17 Chief Executive Officer 2017-18 Chief Executive Officer 2016-17 Chief Executive Officer 2016-17 Chief Executive Officer 2016-17 Chief Executive Officer 2017-18 Chief Executive Officer 2017-18 7. Review Date and Audit This Strategy has four years life and reviewed in two years. City of Canning Asset Management Strategy 21