16. ASSET MANAGEMENT POLICY

16. ASSET MANAGEMENT POLICY

Asset Management Policy Document No.: WT-HRM-16.00 Approved By: Council Issue No.: 1.00 Approved On: 10 June 2014 Responsibility: Infrastructure Services Department Review Date: June 2016 CONTENTS 1. BACKGROUND... 2 2. COUNCIL S STRATEGIC PLAN... 2 3. COUNCIL S FINANCIAL PLAN... 2 4. COUNCIL S RISK MANAGEMENT POLICY... 2 5. DEFINITIONS... 2 6. ASSET DETAILS... 3 7. ASSET LIFE... 4 8. POLICY OBJECTIVE... 4 9. COUNCILLOR RESPONSIBILITY... 5 10. MANAGEMENT RESPONSIBILITY... 5 11. IMPLEMENTATION ACTIONS... 5 12. ASSET MANAGEMENT WORKING GROUP... 6 13. WORKING GROUP RESPONSIBILITIES... 6 14. TRAINING NEEDS... 7 15. REVIEW... 7 16. APPROVAL... 7 WT-HRM-16.00 Issue:1.00 Asset Management Policy Page: 1 of 7

1. BACKGROUND West Tamar Council is committed to implementing a systematic asset management methodology in order to introduce appropriate asset management best practices across all areas of its operations. This includes ensuring that assets are planned, purchased, created, operated, maintained, upgraded, replaced and disposed of in accordance with council s priorities for service delivery. 2. COUNCIL S STRATEGIC PLAN The effective management of council s assets will enable council to maintain its service delivery standards and therefore to deliver its Strategic Plan vision of enhancing the West Tamar as a desirable place to live and visit. The Infrastructure Management section of the Strategic Plan requires a strategic approach to ensure an efficient and effective infrastructure network is maintained within the limitations of council s resources. 3. COUNCIL S FINANCIAL PLAN Council s financial management strategy and long term financial plan deals with funding of infrastructure and includes outcomes to have a long term equitable plan for the adequate renewal of council assets as well as capacity for new infrastructure to cater for council s desired levels of service to the community. The strategy includes a number of options available for council to fund the maintenance and management of its infrastructure. 4. COUNCIL S RISK MANAGEMENT POLICY Council s Risk Management Policy recognizes that risk management is an essential tool for sound strategic and financial planning and the ongoing physical operations of the organisation. Council is committed to ensuring that the organisation, its employees and the community are protected against loss through the application of sound management principles and practices to minimize or eliminate exposure to risk and adverse impact on business objectives. This Asset Management Policy is complementary to councils Risk Management Policy and its implementation will assist in meeting the objectives of the Risk Management Policy. 5. DEFINITIONS Assets: A physical item that is controlled by council to provide or contributes to the provision of future economic benefits to the community. Fair value: The amount for which an asset could be exchanged between a knowledgeable, willing buyer and a knowledgeable, willing seller in an arms length transaction. Maintenance: The regular routine work required to keep an asset in suitable condition to maintain its service delivery requirements. WT-HRM-16.00 Issue:1.00 Asset Management Policy Page: 2 of 7

Renewal/Refurbishment: The restoration, rehabilitation or replacement of an asset to return it to its original service delivery capacity. Upgrade/Improvement: Modification of an asset to allow it to deliver a higher level of service. New assets: Assets created or purchased by council, or given to council for the purpose of delivering future economic benefits to the community, generally by the provision of services. Asset Management: The process applied to manage assets over each stage of their service life including asset needs analysis, creation, operation, maintenance, renewal and disposal. The objective of asset management is to ensure the assets deliver the required level of service in the most effective and efficient manner now and into the future. Service Level: A relevant measurable standard or target that reflects the required performance to meet agreed community expectations in relation to the type, quality and quantity of services delivered by Council. 6. ASSET DETAILS This policy applies to all of West Tamar Council s assets. These assets are essential for the delivery of services to meet the ongoing needs of our community. Council s asset groups and their approximate values as of May 2014 are as follows in the table below. Asset Group Gross Value Accumulated Depreciation WDV (Current Value) Transport services $191,918,519 $69,292,424 $122,626,095 Buildings $45,317,412 $16,427,712 $28,889,700 Stormwater $42,246,547 $13,057,005 $29,189,542 Parks and Recreation $9,020,792 $2,773,527 $6,247,265 Heritage $581,870 $0 $581,870 Land $12,288,500 $0 $ 12,288,500 Plant & Equipment $4,932,425 $1,757,790 $3,174,635 Furniture, fittings and office equipment $1,374,397 $835,907 $538,490 $295,391,962 $104,144,356 $191,247,597 WT-HRM-16.00 Issue:1.00 Asset Management Policy Page: 3 of 7

7. ASSET LIFE Council s assets having a limited useful life are depreciated over their useful lives in a manner which reflects the consumption of the service potential of those assets. Land is not a depreciable asset and council does not depreciate heritage assets. Adopted asset group lives are: ASSET GROUP LIFE (years) Roads 3-100 Bridges 20-100 Buildings 20-100 Stormwater Drainage 50-100 Parks, Recreation & Community Facilities 5-100 Plant and Machinery 3-20 Furniture, Fittings, Office Equipment 2-20 It is noted that all asset lives show a wide range of years corresponding to a range of assets types for example the road asset group indicates a range of useful life of 3 to 100 years this is due to the fact that gravel roads are resheeted every 3 years and road pavement is expected to last 100 years. Similarly bridges have a range of 20 100 years. Timber bridge decks have a life of 20 years and a concrete bridge structure has a life of 100 years. Buildings range is the difference between a garden type shed 20 years and concrete structure like Windsor Precincts 100 years. 8. POLICY OBJECTIVE West Tamar Council will implement asset management practices to meet the following objectives: Establish and maintain an asset management strategy (minimum 10 year period) as the primary framework to provide and maintain asset services to current and future generations Manage council s assets in a systematic and sustainable manner Maintain assets in a suitable condition to deliver an affordable and reliable level of service to the community Allocate adequate resources to allow the timely maintenance and renewal of assets Take account of whole of life costs when deciding to create, purchase or accept new assets Develop transparent and responsible asset management processes in accordance with best practice standards Maintain affordable and financially sustainable asset management plans for each major asset group Planning for climate change adaption and mitigation Meeting legislative requirements for asset management WT-HRM-16.00 Issue:1.00 Asset Management Policy Page: 4 of 7

9. COUNCILLOR RESPONSIBILITY The functions of councillors under section 28 of the Local Government Act 1993 include: To develop and monitor the implementation of strategic plans and budgets To determine and monitor the application of policies, plans and programs To determine and review the council s resource allocation and expenditure activities To monitor the manner in which services are provided by the council The policies, plans and programs specifically include: 1. The efficient and effective provision of services and facilities 2. The efficient and effective management of assets In undertaking the above functions council represents the community as the asset owner and has a role in ensuring that assets continue to deliver the appropriate level of service to the community into the future within the limitations of council s resources. In order for council to effectively undertake its functions with respect to the management of its assets council will: Maintain an asset management policy and asset management strategy Provide appropriate resources for effective asset management Approve and review asset management plans Consider asset management principles in decision-making 10. MANAGEMENT RESPONSIBILITY The General Manager has a number of functions and powers under the provisions of the Local Government Act including the following that are relevant to asset management: To implement the policies, plans and programs of the council To implement the decisions of the council To manage the resources and assets of the council In implementing these powers the General Manager will: Promote asset management principles throughout the organization Allocate adequate resources to implement councils approved asset management policy Ensure that an asset management strategy is prepared and implemented Report to council on the implementation of the asset management policy and strategy 11. IMPLEMENTATION ACTIONS In order to implement this policy the general manager will ensure that: An asset management working group is maintained A strategy for the implementation of asset management practices within the organization is developed Detailed asset management registers for all asset groups are maintained Detailed asset management plans are prepared for all major asset groups Asset management impacts are highlighted in reports to council WT-HRM-16.00 Issue:1.00 Asset Management Policy Page: 5 of 7

An integrated long-term capital works priority list based on the asset management plans prepared for each asset group is prepared Specific funds are allocated in annual budgets for the maintenance of the service potential of existing and new assets Budgets specifically identify the funds allocated for the routine maintenance of assets, the renewal of assets, the upgrading of assets, and the creation of new assets Asset management plans identify critical assets in each asset group and assess the risks to those assets The service levels for all assets are regularly reviewed Assets are regularly inspected to minimise the risk of harm to the community and to establish the condition of assets Appropriate accounting methods are used to reflect the true consumption of assets Asset accounting methods comply with current accounting standards Levels of service and maintenance standards are defined for asset groups Asset management plans integrate with risk management plans Mitigate climate change effects on council s assets 12. ASSET MANAGEMENT WORKING GROUP Council s asset management working group shall comprise: Infrastructure Services Manager Works Manager Senior Accountant Design Engineer Asset Management Coordinator Asset Recording Officer Risk Management Supervisor Information Systems Coordinator Corporate Services Manager Other staff may be added to the group when dealing with specific issues regarding assets in their area of operation. 13. WORKING GROUP RESPONSIBILITIES The asset management group shall have the following responsibilities: Annually review this asset management policy Review resource requirements for asset management and make recommendations to the management team Promote and foster asset management practices in the workplace Review Asset management plans and strategies as required Review the format of asset registers and data requirements Review asset management software Define responsibility for management of asset groups Review asset gap analysis data WT-HRM-16.00 Issue:1.00 Asset Management Policy Page: 6 of 7

14. TRAINING NEEDS To fulfil its asset management obligations, the organisation will conduct familiarisation sessions for Councillors and staff in financial and asset management practices including the importance of service planning and property risk exposure minimisation. Where a need is identified, it will undertake relevant training to those requiring a higher level of skill. 15. REVIEW This Asset Management Policy and the Asset Management Strategy developed under the policy shall be reviewed biannually by the Asset Management Working Group. The group shall report to the management team on implementation of the policy and any recommended changes to the policy. 16. APPROVAL Approved by the Council on 10 June 2014 Signed: General Manager WT-HRM-16.00 Issue:1.00 Asset Management Policy Page: 7 of 7