asset management strategy - home - …€“ asset management strategy 2 july 2015 – v6 - 3 -...

Mornington Peninsula Shire Council

ASSET MANAGEMENT STRATEGY

2015 Version - Draft 2 July 2015 – V6

Attachment 2

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Attachment 2

– ASSET MANAGEMENT STRATEGY

2 July 2015 – V6 - i -

ContentsExecutive Summary ................................................................................................................. 11. Introduction ....................................................................................................................... 4

1.1 Legislative Requirements .......................................................................................... 51.2 Asset Management Planning Process ...................................................................... 6

2. What Assets Do We Have? .............................................................................................. 63. Council’s Assets and Their Management ......................................................................... 7

3.1 State of the Assets .................................................................................................... 73.2 Life Cycle Cost ........................................................................................................ 143.3 Asset Management Structure .................................................................................. 183.4 Corporate Capital Works and Asset Management Steering Committee ................. 203.5 Financial & Asset Management Core Competencies .............................................. 213.6 Strategy Outlook ...................................................................................................... 22

4. Where Do We Want To Be? ........................................................................................... 234.1 Council’s Vision, Mission, Goals and Objectives ..................................................... 234.2 Sustainable Infrastructure Asset Management Policy ............................................. 294.3 Asset Management Vision ....................................................................................... 29

5. How Will We Get There? ................................................................................................ 316. Asset Management Improvement Plan .......................................................................... 32Appendix A – Asset Management Maturity Assessment ....................................................... 34

TablesTable 1: Assets Used For Providing Services ........................................................................ 6Table 2: Financial Status of the Assets .................................................................................. 7Table 3: Life Cycle Cost for Council Services ....................................................................... 14Table 4: Life Cycle Expenditure for Council Services ........................................................... 14Table 5: Life Cycle Sustainability Indicators ......................................................................... 15Table 6: Goals and Objectives for Infrastructure Services ................................................... 25Table 7: Asset Management Strategies ................................................................................ 31Table 8: Asset Management Improvement Plan ................................................................... 32

Figures Figure 1: Asset Replacement Costs ....................................................................................... 7Figure 2: State of the Assets .................................................................................................. 8Figure 3: Asset Condition Profiles .......................................................................................... 8Figure 4: Proposed and Predicted Renewal Expenditure for All Assets ............................... 17Figure 5: Annual Renewal Gap – All Assets ......................................................................... 17Figure 6: Cumulative Total Renewal Gap – All Assets ......................................................... 18Figure 7: Core Asset Management Maturity MPSC 2013 ..................................................... 22

Attachment 2


2 July 2015 – V6 - 1 -

Executive Summary

This asset management strategy is prepared to assist Council in improving the way it delivers services from infrastructure including roads, bridges, pathways, stormwater drainage, parks and open space and buildings. These infrastructure assets have a current replacement value of $1,660,000,000.

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,

enable Council’s asset management policies to be achieved, and ensure the integration of Council’s asset management with its long term strategic

plan.1

Adopting this asset management strategy will assist Council in meeting the requirements of national sustainability frameworks, and providing services needed by the community in a financially responsible manner.

The asset management strategy is prepared following a review of the Council’s service delivery practices, financial indicators, asset management maturity and fit with Council’s vision for the future outlined in the Shire’s Strategic Plan. The strategy outlines an asset management improvement plan detailing a program of tasks to be completed and resources required to bring council to a level that exceeds the ‘core’ level of asset maturity and competence as measured by the National Asset Management Assessment Framework.

Strategy Outlook

1. The Shire is well positioned to maintain current service levels for the next 10 years. The infrastructure renewal expenditure requirements are linked to the Shire’s Long Term Financial Plan and annual budgeting processes.

2. Increased investment above that nominated in the Shire’s LTFP is not currently needed to improve information management, lifecycle management, service management and accountability and direction for existing infrastructure assets.

3. The Shire’s Service Plans & Asset Management Plans for each major asset class will endeavour to set out the optimal schedule of proposed asset maintenance and renewal to achieve specified service levels while minimising asset life cycle costs.

4. Council is able to fund current infrastructure life cycle cost at current levels of service and available revenue.

5. Council’s current asset management maturity has achieved ‘core’ level as measured in accordance with the National Asset Management Assessment Framework.

1 LGPMC, 2009, Framework 2 Asset Planning and Management, p 4.

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2 July 2015 – V6 - 2 -

Asset Management Strategies

No Strategy Desired Outcome 1 Move from Annual Budgeting to Long Term Financial Planning The long term implications of

Council services are considered in annual budget deliberations

2 Develop and annually review Asset Management Plans covering at least 10 years for all major asset classes (80% of asset value).

Identification of services needed by the community and required funding to optimise ‘whole of life’ costs

3 Develop Long Term Financial Plan covering 10 years incorporating asset management plan expenditure projections with a sustainable funding position outcome

Sustainable funding model to provide Council services

4 Incorporate Year 1 of Long Term Financial Plan revenue and expenditure projections into annual budgets

Long term financial planning drives budget deliberations

5 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

Council and the community are aware of changes to service levels and costs arising from budget decisions

6 Report Council’s financial position at Fair Value in accordance with Australian Accounting Standards, financial sustainability and performance against strategic objectives in Annual Reports

Financial sustainability information is available for Council and the community

7 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

Improved decision making and greater value for money

8 Report on Council’s resources and operational capability to deliver the services needed by the community in the Annual Report

Services delivery is matched to available resources and operational capabilities

9 Ensure responsibilities for asset management are identified and incorporated into staff position descriptions

Responsibility for asset management is defined

10 Implement an Improvement Plan to exceed ‘core’ maturity for the financial and asset management competencies.

Improved financial and asset management capacity within Council

11 Report annually to Council by CEO on development and implementation of Asset Management Strategy, AM Plans and Long Term Financial Plans

Oversight of resource allocation and performance

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2 July 2015 – V6 - 3 -

Asset Management Improvement Plan

A program of tasks has been developed that will allow the Shire to exceed a ‘core’ level of financial and asset management maturity. The tasks are shown below.

Ref Task Responsibility Target Date Budget

1. Adoption by Council of a sustainable Long Term Financial Plan covering the period of at least 10 years.

Mgr Finance June 2015

2. Executive to adopt an expanded “roles and responsibilities” matrix as summarised in the Asset Management Policy to identify officers responsible for specific asset management activities.

Mgr Infra Strategy June 2015

3. Develop Condition Rating Assessment Manuals for critical asset types.

Manager Infra Maintenance

June 2015

4. Expand use and develop improvements to GeoMedia Smart Client, including ability to access photos and documents in the field.

Mgr Infra Strategy June 2015 $5,000

5. Record data for playgrounds at a “unit” level. Mgr Infra Strategy June 2015

6. Implement process for collection of attribute and spatial data for “open drains”.

Mgr Infra Strategy & Mgr Infra Prjct

Mngmnt

June 2015

7. Develop an intelligent corporate asset notification process to electronically and spatially record discovered, modified and new assets for use by staff and service providers.

Mgr Infra Strategy Dec 2015 $20,000

8. Provide Executive and Council with an annual “State of the Shire’s Assets” report covering asset quantities, asset replacement costs, asset condition, and future financial sustainability options and consequences.

Mgr Infra Strategy Dec 2015

9. Link spatial data for kerbs in GIS with attribute data in Asset Register.


10. Refine data cleansing and data validation processes for data in Asset Register.


11. Inclusion of specific renewal program for 2 year period and general program for 10 years with associated cash flow forecasts into Asset Management Plans.


12. Consolidate condition inspection program for major asset types

Mgr Infra Maintenance

Dec 2015

13. Implement a trial, for an asset type to be selected, of measuring the state of an asset based not only on its condition, but also on an assessment of its functionality and capacity.


14. Collect condition data for pathways, k&c, retaining walls and street & park furniture.


June 2016 $60,000

15. Develop asset degradation graphs for major asset types based on local condition data


16. Expand Asset Register to include “Living Assets” (trees, vegetation, grass surfaces, etc).

Mgr Infra Strategy & Mgr Infra

Maintenance

June 2016

17. Clarify responsibilities for maintenance and renewal of assets on Crown land where the Shire is the Committee of Management.


18. Develop an asset rationalisation and disposal process for park furniture and fences.


19. Review community levels of service for the Service Plan and Asset Management Plan for Buildings.


20. Review current asset management information system to ensure alignment with Shire’s future needs.

Mgr Infra Strategy & Mgr Finance

June 2017 $15,000

21. Include in annual community satisfaction surveys questions targeted at asset management performance of specific asset classes.


Attachment 2


2 July 2015 – V6 - 4 -

1. Introduction

Assets deliver 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, drains, bridges, parks and community buildings 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.2

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.3

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.4

Framework 2 Asset Planning and Management has seven elements to assist in highlighting key management issues , promote prudent, transparent and accountable management of local government assets and introduce a strategic approach to meet current and emerging challenges.

Asset management policy, Strategy and planning,

o asset management strategy, o asset management plan,

Governance and management arrangements, Defining levels of service, Data and systems, Skills and processes, and Evaluation.5

2 LGPMC, 2009, Framework 2 Asset Planning and Management, p 2. 3 LGPMC, 2009, Framework 3 Financial Planning and Reporting, pp 2-3. 4 LGPMC, 2009, Framework 3 Financial Planning and Reporting, pp 4-5.

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2 July 2015 – V6 - 5 -

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,

To demonstrate how Council’s asset management policies are to be achieved, and To ensure the integration of Council’s asset management with its long term strategic

plan.6

The goal of asset management is to ensure that services are provided:

in the most cost effective manner, through the creation, acquisition, maintenance, operation, monitoring, 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 essential for council to provide services to the community.

1.1 Legislative Requirements

Local Government Act 1989 Aboriginal Heritage Act 2006 Electricity Safety Act 1998 Flora and Fauna Guarantee Act 1988 Occupational Health and Safety Act 2004 Public Health and Wellbeing Act 2008 Rail Safety Act 2006 Road Management Act 2004 Road Safety Act 1986 Transport Integration Act 2010 Water Act 1989 Wrongs Act 1958

5 LGPMC, 2009, Framework 2 Asset Planning and Management, p 4. 6 LGPMC, 2009, Framework 2 Asset Planning and Management, p 4.

Attachment 2


2 July 2015 – V6 - 6 -

1.2 Asset Management Planning Process

Asset management planning is a comprehensive process to ensure that 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 financially sustainability under scenarios with different proposed service levels.

Asset management planning commences with defining stakeholder and legal requirements and needs, incorporating these needs into the organisation’s strategic plan, developing an asset management policy, strategy, asset management plan and operational plans, linked to a long-term financial plan with a funding plan.7

2. What Assets Do We Have?

Council uses infrastructure assets to provide services to the community. The range of infrastructure assets and the services provided from the assets is shown in Table 1.

Table 1: Assets Used For Providing Services

Asset Class Description Services Provided Roads Roads, bridges, pathways, kerb

& channel and associated assets

Transportation of goods and services from production to market and to consumers, movement of people around the Shire for business, education, recreation and leisure.

Stormwater Drainage Underground pipe and pit network, open channels, detention basins, stormwater quality improvement devices.

Collection of stormwater runoff, conveyance and return to the environment to allow continued and safe use of private and public property.

Parks & Open Space Active and passive recreation reserves, playgrounds.

Community recreation and leisure.

Buildings Community, cultural, commercial and recreation facilities.

Community interaction and development.

7 IPWEA, 2009, AIFMG, Quick Guide, Sec 4, p 5.

Asset Management Planning Process

Attachment 2

2 July 20

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Attachment 2


2 July 2015 – V6 - 8 -

The asset consumption ratios of Council’s assets (average proportion of ‘as new’ condition left in assets) are shown in Figure 2.

Figure 2: State of the Assets

[ *** Figures as of 01/07/2014 *** ]

The condition graphs for various asset types that Council are responsible for are shown in Figure 3 .

Figure 3: Asset Condition Profiles

Roads

Sealed Urban Roads Sealed Rural Roads

Using PCI Condition Data Data collected in 2011 and adjusted for 2014 Weighted Average Condition Score: 3.19 – Good


0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

Roads StormwaterDrainage

Parks & Open Space Buildings Total

Asset Consumption Ratio

76%

21%

3%

Condition Distribution (Urban Roads)

Good/Very Good (0 4)

Fair (5 6)

Poor/Very Poor (7 10)80%

18%

2%

Condition Distribution (Rural Roads)


Fair (5 6)

Poor/Very Poor (7 10)

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

0 1 2 3 4 5 6 7 8 9 10

%of

AssetB

asewith

inCo

ndition

0 Good Asset Condition Rating Poor 10

Asset Condition Distribution by % Value and Number within ConditionRange

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

0 1 2 3 4 5 6 7 8 9 10

%of

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inCo

ndition



Attachment 2


2 July 2015 – V6 - 9 -

Unsealed Roads Carparks

Default Condition Distrubtion from Moloney Model Weighted Average Condition Score: 3.51 – Satisfactory


Pathways Bridges

Using Condition Data collected from IMG Data collected in 2010 and adjusted for 2014 Weighted Average Condition Score: 3.78 – Satisfactory

Condition Distriubtion derived from age as of 1/7/2014 Weighted Average Condition Score: 3.70 – Satisfactory

71%

22%

7%

Condition Distribution (Unsealed Roads)


Fair (5 6)


22%

6%

Condition Distribution (Carpark)


Fair (5 6)


0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

0 1 2 3 4 5 6 7 8 9 10

%of

AssetB

asewith

inCo

ndition



0.00%

5.00%

10.00%

15.00%

20.00%

0 1 2 3 4 5 6 7 8 9 10

%of

AssetB

asewith

inCo

ndition



64%

30%

6%

Condition Distribution (Pathway)


Fair (5 6)

Poor/Very Poor (7 10) 70%

25%

5%

Condition Distribution (Bridge)


Fair (5 6)


0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

0 1 2 3 4 5 6 7 8 9 10

%of

AssetB

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inCo

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0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

0 1 2 3 4 5 6 7 8 9 10

%of

AssetB

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inCo

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Attachment 2


2 July 2015 – V6 - 10 -

Road Inventory

Condition Distriubtion dervied from age as of 1/7/2014 and Condition data collected from transfield in 2014 Weighted Average Condition Score: 2.99 – Very Good

Parks & Open Space

Parks & Street Furniture Play Equipment

Condition Distriubtion derived from age as of 1/07/2014 Weighted Average Condition Score: 4.27 – Fair

Using Condition Data provided by Transfield Data collected in 2014 Weighted Average Condition Score: 4.75 – Poor

88%

6%6%

Condition Distribution (Road Inventory)


Fair (5 6)


0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

0 1 2 3 4 5 6 7 8 9 10

%of

AssetB

asewith

inCo

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48%

39%

13%

Condition Distribution (Parks & Street Furniture)


Fair (5 6)


41%

52%

7%

Condition Distribution (Play Equipment)


Fair (5 6)


0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

0 1 2 3 4 5 6 7 8 9 10

%of

AssetB

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inCo

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0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

0 1 2 3 4 5 6 7 8 9 10

%of

AssetB

asewith

inCo

ndition



Attachment 2


2 July 2015 – V6 - 11 -

Active Reserves Structures

Condition Data provided by Transfield in 2014 Weighted Average Condition Score: 5.06 – Very Poor

Condition Distriubtion derived from age as of 1/07/2014 Weighted Average Condition Score: 4.44 – Fair

Marine Structures Reticulation

Condition Data provided by Rod Hogan in 2014 Weighted Average Condition Score: 5.52 – Extremely Poor

Condition Distriubtion derived from age as of 1/07/2014 Weighted Average Condition Score: 2.87 – Very Good

39%

29%

32%

Condition Distribution (Active Reserves)


Fair (5 6)


49%47%

4%Condition Distribution (Structures)


Fair (5 6)


0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

0 1 2 3 4 5 6 7 8 9 10

%of

AssetB

asewith

inCo

ndition



0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

0 1 2 3 4 5 6 7 8 9 10

%of

AssetB

asewith

inCo

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27%

44%

29%

Condition Distribution (Marine Structures)


Fair (5 6)


79%

18%

3%

Condition Distribution (Reticulation)


Fair (5 6)


0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

0 1 2 3 4 5 6 7 8 9 10

%of

AssetB

asewith

inCo

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0.00%5.00%

10.00%15.00%20.00%25.00%30.00%35.00%40.00%

0 1 2 3 4 5 6 7 8 9 10

%of

AssetB

asewith

inCo

ndition



Attachment 2


2 July 2015 – V6 - 12 -

Stormwater Drainage

Pipes & Box Culverts Pits & Drainage Structures



WSUD

Buildings

All Buildings


Condition Distribution dervied from component condition data collected by Transfield in 2014 Weighted Average Condition Score: 3.67 – Satisfactory

90%

10%

0%

Condition Distribution (Underground Drains)


Fair (5 6)


10%

0%

Condition Distribution (Drainage Structures)


Fair (5 6)


0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

0 1 2 3 4 5 6 7 8 9 10

%of

AssetB

asewith

inCo

ndition



0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

0 1 2 3 4 5 6 7 8 9 10

%of

AssetB

asewith

inCo

ndition



98%

2%

Condition Distribution (WSUD)


Fair (5 6)


85%

11%

4%

Condition Distribution (Buildings)


Fair (5 6)


0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

0 1 2 3 4 5 6 7 8 9 10

%of

AssetB

asewith

inCo

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0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

0 1 2 3 4 5 6 7 8 9 10

%of

AssetB

asewith

inCo

ndition



Attachment 2


2 July 2015 – V6 - 13 -

Condition is measured using a 0 – 10 rating system.8

Rating Generalised Generic Description of Condition

0 A new asset or an asset recently rehabilitated back to new condition.

1 A near new asset with no visible signs of deterioration often moved to condition 1 based upon the time since construction rather than observed condition decline.

2 An asset in excellent overall condition. There would be only very slight condition decline but it would be obvious that the asset was no longer in new condition.

3 An asset in very good overall condition but with some early stages of deterioration evident, but the deterioration still minor in nature and causing no serviceability problems.

4 An asset in good overall condition but with some obvious deterioration evident, serviceability would be impaired very slightly.

5 An asset in fair overall condition deterioration in condition would be obvious and there would be some serviceability loss.

6 An asset in fair to poor overall condition. The condition deterioration would be quite obvious. Asset serviceability would now be affected and maintenance cost would be rising.

7 An asset in poor overall condition deterioration would be quite severe and would be starting to limit the serviceability of the asset. Maintenance cost would be high.

8 An asset in very poor overall condition with serviceability now being heavily impacted upon by the poor condition. Maintenance cost would be very high and the asset would at a point where it needed to be rehabilitated.

9 An asset in extremely poor condition with severe serviceability problems and needing rehabilitation immediately. Could also be a risk to remain in service.

10 An asset that has failed is no longer serviceable and should not remain in service. There would be an extreme risk in leaving the asset in service.

8 Adopted from the Moloney Model from the Municipal Association of Victoria’s Step Program.

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2 July 2015 – V6 - 14 -

3.2 Life Cycle Cost

Life cycle costs (or whole of life costs) are the average costs that are required to sustain the service levels over the longest asset life. Life cycle costs include operating and maintenance expenditure and asset consumption (depreciation expense). The life cycle cost for the major asset classes are shown in Table 3.

Table 3: Life Cycle Cost for Council Services

Service MaintenanceExpenditure

OperationExpenditure

DepreciationExpenditure Life Cycle Cost

Roads $ 7,586,433 $ 3,089,256 $ 10,916,510 $ 21,592,199

StormwaterDrainage $ 1,021,140 $ 3,377,064 $ 4,913,608 $ 9,311,812

Parks & OpenSpace $ 3,080,141 $ 2,246,390 $ 3,589,939 $ 8,916,470

Buildings $ 4,652,483 $ 3,385,316 $ 4,225,857 $ 12,293,656

Total $ 16,340,197 $ 12,098,026 $ 23,675,914 $ 52,114,137

[ *** Figures as of 01/07/2014 *** ]

Life cycle costs can be compared to life cycle expenditure to give an indicator of sustainability in service provision. 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 is shown in Table 4.

Table 4: Life Cycle Expenditure for Council Services

Service MaintenanceExpenditure

OperationExpenditure

Capital RenewalExpenditure

Life CycleExpenditure

Roads $ 7,586,433 $ 3,089,256 $ 7,744,400 $ 18,420,089

StormwaterDrainage $ 1,021,140 $ 3,377,064 $ 700,000 $ 5,098,204

Parks & OpenSpace $ 3,080,141 $ 2,246,390 $ 1,723,743 $ 7,050,274

Buildings $ 4,652,483 $ 3,385,316 $ 4,196,586 $ 12,234,385

Total $ 16,340,197 $ 12,098,026 $ 14,364,729 $ 42,802,952

[ *** Figures as of 01/07/2014 *** ]

The life cycle costs and life cycle expenditure comparison highlights any difference between present outlays and the average cost of providing the service over the long term, If the life

Attachment 2


2 July 2015 – V6 - 15 -

cycle expenditure is less than the life cycle cost, it is most likely that outlays will need to be increased or cuts in services made in the future.

Knowing the extent and timing of any required increase in outlays and the service consequences if funding is not available will assist Council in providing service to the community in a financially sustainable manner. This is the purpose of the AM Plans and long term financial plan.

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 and long term financial plan.

The life cycle gap and sustainability indicator for services covered by this asset management plan is summarised in Table 5.

Table 5: Life Cycle Sustainability Indicators

Service Average Life CycleCost

CurrentExpenditure

Potential LifeCycle Gap

LC SustainabilityIndex

Roads $ 21,592,199 $ 18,420,089 $ 3,172,110 0.85

StormwaterDrainage

$ 9,311,812 $ 5,098,204 $ 4,213,608 0.55

Parks & OpenSpace

$ 8,916,470 $ 7,050,274 $ 1,866,196 0.79

Buildings $ 12,293,656 $ 12,234,385 $ 59,271 1.00

Total $ 52,114,137 $ 42,802,952 $ 9,311,185 0.82

[ *** Figures as of 01/07/2014 *** ]

Note: * A life cycle gap is reported as a positive value

Roads are funded at 85% of life cycle cost. Under the renewal and maintenance arrangements of the Safer Local Roads contract, the levels of funding are considered adequate for sealed and unsealed road pavements and surfaces for the next 10 years. The expenditure level for bridges and footpaths is also considered adequate.

Increases in capital renewal expenditure requirements for concrete kerbs and guard rails are also expected over the next decade. Increases up to $500,000 and $200,000 per annum are forecast respectively.

Present funding for drainage assets is 55% of life cycle costs. As the Shire’s drainage assets are relatively new (with an estimated useful life of approximately 100 years), little need for renewal expenditure is forecast in the near future. The present level of funding for drainage renewal is considered adequate for the next 10 years.

Present funding for Parks & Open Space assets is 79% of life cycle costs. Operating expenditure is largely operations and maintenance. Assets types requiring some increases in renewal expenditure over the next decade include Street & Park Furniture (Signs, Fences, Retaining Walls, Table/Seats), Playgrounds and Marine Structures (Jetties and Boat Ramps).

Attachment 2


2 July 2015 – V6 - 16 -

While funding levels for buildings are currently adequate, there are forecast substantial increases in the requirements for expenditure on the Shire’s existing building stock, particularly in the area of building fit out. To maintain existing service levels will require increases above existing funding levels for renewal in the order of $1 million per annum during the next decade. This will need to be confirmed with more detailed building condition assessments than is currently available.

Detailed work will need to be undertaken over the next decade to determine the long-term likely affects of climate change on the Shire’s infrastructure assets. Changes in increasing rainfall frequency and intensity along with rising sea levels and storm surges are expected to have long-term detrimental affects on some infrastructure assets.

Financial Sustainability for Asset Renewal

The Shire uses the Moloney Model to predict asset renewal demand requirements for the Shire’s infrastructure assets.

The Moloney Model was developed to assist Local Government authorities gain a better understanding of the future renewal demand associated with their infrastructure assets. The use of the Model is supported by the MAV’s Step Asset Management Program.

To predict the future renewal demand the following variables are needed for each asset set to be modelled:

Present condition distribution Degradation curve Unit renewal costs Renewal intervention condition

The financial modelling functions within the Moloney Model have been used to predict the required renewal expenditure. Any renewal gap (or funding shortfall) can be identified as the difference between the required renewal expenditure (from the Model) and the proposed renewal expenditure.

Figure 4 plots over a 10 year period the predicted demand for infrastructure renewal expenditure (red bars) for all asset classes. It also plots the proposed level of renewal expenditures (blue bars). The extent of the total asset base that is predicted to rise above the intervention level is shown by the green line.

Attachment 2


2 July 2015 – V6 - 17 -

Figure 4: Proposed and Predicted Renewal Expenditure for All Assets

[ *** Figures as of 01/07/2014 *** ]

The current long term financial plan extends over a 10 year period. In 2023-24 less than 0.1% of assets are predicted to be above the adopted intervention level (level of service) if the proposed infrastructure renewal funding is provided.

Figure 5 shows a graph over a 10 year period of the annual predicted infrastructure renewal funding gap for all combined asset classes in the Shire.

Figure 5: Annual Renewal Gap – All Assets

[ *** Figures as of 01/07/2014 *** ]

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

$

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

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$2,000,000

$1,500,000

$1,000,000

$500,000

$

$500,000

$1,000,000

$1,500,000

$2,000,000Total Annual Renewal Gap

Attachment 2


2 July 2015 – V6 - 18 -

Under current long term funding arrangements the graph shows a near equalisation of projected and proposed infrastructure renewal funding.

The graph in Figure 6 shows a desirable outcome for the cumulative total renewal gap over a 10 year period based on present renewal demand.

Figure 6: Cumulative Total Renewal Gap – All Assets

[ *** Figures as of 01/07/2014 *** ]

Based on the Shire’s existing asset inventory, the Shire appears to be in a sound financial position capable of meeting its infrastructure renewal expenditure requirements from current funding sources.

3.3 Asset Management Structure

Extract from Asset Management Policy, [insert amended date].

Responsibilities

Council

Exercise stewardship over infrastructure assets; Set levels of service, risk and cost within available resources; Approve Council AM policy, strategy and plans; Ensure appropriate allocation of AM resources; Approve Best Value program and annual plan; Establish and monitor Capital Works and Asset Management steering committee; Establish and operate Council audit committee; Evaluate AM improvement.

$2,000,000

$1,500,000

$1,000,000

$500,000

$

$500,000Cumulative Total Renewal Gap

Attachment 2


2 July 2015 – V6 - 19 -

Chief Executive Officer

Develop an asset management strategy and plans; Report on the status and effectiveness of asset management within Council.

Executive

Implement the AM strategy with agreed resources. Implement approved AM plans within budget and service parameters; Monitor and review the performance of the organisation in achieving the AM strategy; Ensure that accurate and reliable information is presented to Council for decision

making. Evaluate and report to Council on AM improvement; Support the Capital Works and Asset Management Steering Committee.

Capital Works and Asset Management Steering Committee

Management of the Shire’s assets is overseen by the CWAMSC.

Membership is comprised of:

Director Sustainable Infrastructure Director Sustainable Organisation Director Sustainable Communities Director Sustainable Environment Manager Infrastructure Strategy Manager Finance Manager Infrastructure Project Management Team Leader Asset Management

Supported by:

Manager Infrastructure Maintenance Manager Corporate Planning and Projects Manager Economic Development Manager Strategic Planning Manager Recreation and Leisure Infrastructure Planning Officer Infrastructure Accountant

The committee has an over-viewing role to:

Develop the strategic direction for asset management; Monitor and review the AM Policy, AM Strategy and individual AM Plans for major

asset classes. Review the asset management roles and responsibilities of managers across the

organisation. Coordinate the asset management activities across all asset classes; Advocate a consistent approach to AM across asset classes; Monitor the performance of assets and report to Council; Report asset management activities to Executive and Council;

Attachment 2


2 July 2015 – V6 - 20 -

Develop a capital works program.

Manager Infrastructure Strategy

Develop and review Shire policy, objectives, guidelines practices, procedures and systems for AM.

Raise awareness throughout the organisation of the benefits of sound asset management.

Integrate the Shire’s AM policy, strategy and plans into the corporate governance framework.

Oversee the progress of individual AM activities including data capture and preparation of AM plans.

Review and disseminate AM information to interested stakeholders; Oversee development and implementation of AM Plans; Oversee the condition monitoring assessments for all infrastructure assets.

Managers and Staff

Assist in the development and review of the AM policy and strategy. Implement AM Strategy with agreed resources; Develop and implement AM Plans for individual asset classes using principles of

lifecycle analysis. Implement operational plans (such as maintenance programs, capital works

programs) in accordance with AM Plans and budget. Implement Improvement Plans for individual asset classes; Manage assets in consideration of long term sustainability; Present information to Council and Executive in terms of life cycle risks and costs.

Asset Management Team

Ensure data accuracy and currency; Coordinate AM systems.

Audit Committee

Monitor compliance with delegated responsibilities; Ensure that legal and statutory obligations are met.

3.4 Corporate Capital Works and Asset Management Steering Committee

A ‘whole of organisation’ approach to asset management can be developed with a corporate asset management team. The benefits of a corporate Capital Works and Asset Management Steering Committee include:

demonstrate corporate support for sustainable asset management, encourage corporate buy-in and responsibility, coordinate strategic planning, information technology and asset management

activities,

Attachment 2


2 July 2015 – V6 - 21 -

promote uniform asset management practices across the organisation, information sharing across IT hardware and software, pooling of corporate expertise championing of asset management process, wider accountability for achieving and reviewing sustainable asset management

practices.

The role of the Capital Works and Asset Management Steering Committee will evolve as the organisation maturity increases over several phases.

Phase 1 strategy development and implementation of asset management improvement

program,Phase 2

asset management plan development and implementation, reviews of data accuracy, levels of service and systems plan development,

Phase 3 asset management plan operation evaluation and monitoring of asset management plan outputs ongoing asset management plans review and continuous improvement.

3.5 Financial & Asset Management Core Competencies

The National Frameworks on Asset Planning and Management and Financial Planning and Reporting define 10 elements. 11 core competencies have been developed from these elements9 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

Council’s maturity assessment for the core competencies is detailed in Appendix A and summarised in Figure 7. The current maturity level is shown by the blue bars.

To achieve a ‘core’ financial and asset management competency, as measured by the National Asset Management Assessment Framework, a total score of over 1,000 needs to be achieved, with a minimum score of 90% for each of the 11 elements

9 Asset Planning and Management Element 2 Asset Management Strategy and Plans divided into Asset Management Strategy and Asset Management Plans competencies.

Attachment 2

2 July 2015 – V6

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Attachment 2


2 July 2015 – V6 - 23 -

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 Shire Strategic Plan.

Our Vision

The Mornington Peninsula’s unique characteristics and community lifestyles will be maintained and enhanced through our shared commitment to creating a ‘Sustainable Peninsula’, achieving outcomes that are environmentally, economically and socially sustainable.

A sustainable environment

minimises the use of non-renewable resources and the generation of waste improves water, soil and air quality reduced impacts on climate change prevents the loss of biodiversity

A sustainable economy

is competitive and able to adapt to change over the longer term provides meaningful employment for all who seek it provides fair access to economic resources

A sustainable community

is safe is healthy has vibrant and diverse networks of support provides fair access to services, facilities and transport encourages active citizenship and inclusive local democracy.

Council’s purpose or reason for existence is set out in the adopted mission statement,

Our Mission

- What we will do to achieve this vision:

Building on a sound understanding of community needs and expectations we will:

ENGAGE with and represent the community and govern in a responsive, open and accountable manner.

PROVIDE sustainable services and infrastructure that respond to the needs of our diverse communities.

FACILITATE a sustainable local economy. SUSTAIN and enhance the biodiversity of our unique natural environment, while

managing and accommodating appropriate development.

Attachment 2

2 July 2015 – V6

Our Value

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- 24 -

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ATEGYAttachment 2


2 July 2015 – V6 - 25 -

The Strategic Plan sets goals and objectives to be achieved in the planning period. The goals set out where Council wants to be. The objectives are the steps needed to get there.

Goals and objectives relating to the delivery of services from infrastructure are shown in Table 6.

Table 6: Goals and Objectives for Infrastructure Services

Goals Objectives

Strategic Long Term Plan

To prepare a Long Term (10 years) Financial Plan (LTFP) that is based on the resource requirements and strategic objectives detailed in Shire’s Strategic Plan and Asset Management Plans.

Ensure the Shire’s Asset Management framework provides links between the AM Policy, AM Strategy, AM Plans and the Strategic Resource Plan, consistent with the Council’s vision and goals for asset management.

Asset Management Plans are used as the basis for 10 year financial forecasts.

10 year LTFP is formally adopted by Council.

Asset Management Policy

To have in place an Asset Management Policy that defines Council’s vision and service delivery objectives for asset management.

AM Policy to have a direct linkage with the Shire’s Strategic Plan and Long Term Financial Plan.

AM Policy describes the Shire’s key AM principles.

The AM Policy defines asset management roles, responsibilities and reporting framework.

AM Policy is formally adopted by Council. AM Policy available on Shire website.

Asset Management Strategy

To develop this Asset Management Strategy to show how the asset portfolio can meet the service delivery needs of the community and define the future vision of asset management practices within Council.

AM Strategy is linked to Council's AM Policy and integrated into Council’s Strategic Longer Term planning and annual budgeting processes.

AM Strategy is formally adopted by Council.

To develop this Asset Management Strategy to document the current status of asset management practices (processes, asset data and information systems) within the Shire and what actions must be taken to implement the Asset Management Policy, including resource requirements, timeframes and accountabilities.

AM Strategy is formally adopted by Council.

Attachment 2


2 July 2015 – V6 - 26 -

Goals Objectives

Asset Management Plans

To document Asset Management Plans for the 4 major asset classes in a consistent format in accordance with industry best practice.

AM Plans are prepared in accordance with Appendix A of the International Infrastructure Management Manual (IIMM).

AM Plans are prepared with appropriate levels of community consultation.

AM plans are made available to all relevant staff across the organisation.

To review Asset Management Plans on a regular basis.

Include requirement in Strategy to review and update Asset Management Plans on an annual basis.

Governance and Management

To have mechanisms in place to provide high level oversight by the Council and Executive for development and implementation of the Asset Management Strategy and Asset Management.

Regular reporting to Council and Executive by Capital Works and Asset Management Steering Committee.

To clearly define “roles and responsibilities” in a matrix or policy, identifying positions responsible for determining levels of service and positions responsible for managing the assets to meet service delivery needs.

Identify activities associated with Asset Management.

Identify positions responsible for determining levels of service.

Identify positions responsible for managing the assets to meet service delivery needs

To document a process for making capital investment decisions that is driven by the Shire’s Strategic Plan and Long Term Financial Plan.

Documented process explicitly details the impacts on the future operations and maintenance budgets, “Whole of Life” costs and risk management assessments.

To reinforce the message that Asset Management is a “whole of organisation” responsibility.

Capital Works & Asset Management Steering Committee has cross-functional representation.

Internal processes promote AM across the organisation.

Attachment 2


2 July 2015 – V6 - 27 -

Goals Objectives

Levels of Service

To develop Service Plans for each service in consultation with the community.

Demonstrated consultation and engagement with the community on their ability and willingness to pay for desired services and assets.

Levels of Service are incorporated into “Service Plans & Asset Management Plans”.

Levels of Service to include complementary “Community Levels of Service” and “Technical Levels of Service”.

Technical Levels of Service are incorporated into service agreements and capital renewal procedures.

Data and Systems

To ensure that asset register is consolidated, integrated, accurate, up to date and complete.

A common corporate data framework is used across all asset groups.

Asset register separates data into asset classes and splits complex assets into components.

To document repeatable methodologies to carry out consistent asset condition surveys and defect identification assessments.

Condition Rating Assessment Manuals are developed for critical asset types.

To ensure the Shire’s asset financial reporting functionality is comprehensive.

Combined asset and financial system includes audit trails, depreciation calculations, reporting thresholds and records of acquisition and disposal of assets.

Procedures for determining asset replacement and treatment unit rates are defined and documented.

Asset replacement and treatment unit rates are stored in Shire’s Asset Management system.

To ensure that defined processes for operations, maintenance, renewal and upgrade planning for existing assets are in place.

Maintenance Plans, Renewal Plans and Creation /Acquisition /Upgrade Plans included in Asset Management Plans for each major asset class.

Decisions based on infrastructure life cycle considerations.

Attachment 2


2 July 2015 – V6 - 28 -

Goals Objectives

Skills and Processes

To include in Asset Management Strategy a requirement to review and update the Strategy on a regular basis.

Include requirement in Strategy to review and update on a maximum 4 year cycle.

AM Strategy to be formally adopted by Council.

To include in Asset Management Strategy a requirement to review and update the Asset Management Plans on a regular basis.

Include requirement in Strategy to review and update Asset Management Plans on a maximum 4 year cycle.

To review and update the financial forecasts for all asset classes and update the Long Term Financial Plan.

Incorporation of long term financial forecasts for infrastructure renewal into Long Term Financial Plan on an annual basis.

To refine process to identify operational risks, assign responsibilities and monitor risk treatment actions all recorded within a risk register.

Include identified risks associated with AM in Shire’s Risk Register.

To ensure that Shire personnel are adequately trained to acquire the skills and knowledge required to perform asset data management activities, conduct financial reporting valuations and develop Asset Management Plans.

Develop an asset management skills matrix. Identify training needs and develop training

programs for councillors, managers and officers.

To utilise defined methodology for assessing the Remaining and Useful Life, Residual Value and Depreciation Method of assets.

Review the “Remaining and Useful Life, Residual Value and Depreciated Value” of the Shire’s infrastructure assets at the end of each annual reporting period.

To adopt formal processes for the handover of assets to asset custodians / owners.

Asset handover processes include: o Management of asset creation/acquisition

to registers. o Data hand over documented with the

appropriate format. o Appropriate data /information for

handover clearly specified for new works in contract documents.

o Processes in place to accept data and record in appropriate systems e.g. AMS, GIS.

o Incorporation of asset creation management into planning permits.

Evaluation

To document and evaluate processes where asset management improvements are identified, timeframes established, resources allocated, actioned, monitored and reported.

Annual report on asset management activities provided to the Executive.

Attachment 2


2 July 2015 – V6 - 29 -

Goals Objectives

To monitor and report on the performance of the levels of service.

Both “community” and “technical” levels of service be monitored and reported to Executive.

To monitor and report on the implementation of the Shire’s Service Plans and Asset Management Plans.

Monitoring by the Capital Works and Asset Management Steering Committee of the effectiveness of implementation of Asset Management Plans.

4.2 Asset Management Policy

Council’s Asset Management Policy (adopted insert date) defines the Council’s vision and service delivery objectives for asset management in accordance with the Strategic 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 long term strategic

plans.

4.3 Asset Management Vision

To ensure the long-term financial sustainability of Council, it is essential to balance the community’s expectations for services with their ability 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 futures, in the most cost-effective and fit for purpose manner.

In line with the vision, the objectives of the asset management strategy are to:

ensure that the Council’s infrastructure services are provided in an economically optimal way, with the appropriate level of service to residents, visitors and the environment determined by reference to Council’s financial sustainability,

safeguard Council’s assets including physical assets and employees by implementing appropriate asset management strategies and appropriate financial resources for those assets,

adopt the long term financial plan as the basis for all service and budget funding decisions,

Attachment 2


2 July 2015 – V6 - 30 -

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 CEO reporting to council on development and implementation of Asset Management Strategy, Asset Management Plans and Long Term Financial Plan.

Strategies to achieve this position are outlined in Section 5.

Attachment 2


2 July 2015 – V6 - 31 -

5. How Will We Get There?

The Asset Management Strategy proposes strategies to enable the objectives of the Strategic Plan, Asset Management Policy and Asset Management Vision to be achieved.

Table 7: Asset Management Strategies

No Strategy Desired Outcome

1. Move from Annual Budgeting to Long Term Financial Planning

The long term implications of Council services are considered in annual budget deliberations

2. Develop and annually review Asset Management Plans covering at least 10 years for all major asset classes (80% of asset value).

Identification of services needed by the community and required funding to optimise ‘whole of life’ costs

3. Develop Long Term Financial Plan covering 10 years incorporating asset management plan expenditure projections with a sustainable funding position outcome

Sustainable funding model to provide Council services

4. Incorporate Year 1 of Long Term Financial Plan revenue and expenditure projections into annual budgets

Long term financial planning drives budget deliberations

5. 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

Council and the community are aware of changes to service levels and costs arising from budget decisions

6. Report Council’s financial position at Fair Value in accordance with Australian Accounting Standards, financial sustainability and performance against strategic objectives in Annual Reports

Financial sustainability information is available for Council and the community

7. 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

Improved decision making and greater value for money

8. Report on Council’s resources and operational capability to deliver the services needed by the community in the Annual Report

Services delivery is matched to available resources and operational capabilities

9. Ensure responsibilities for asset management are identified and incorporated into staff position descriptions

Responsibility for asset management is defined

10. Implement an Improvement Plan to exceed ‘core’ maturity for the financial and asset management competencies.

Improved financial and asset management capacity within Council

11. Report annually to Council by CEO on development and implementation of Asset Management Strategy, AM Plans and Long Term Financial Plans

Oversight of resource allocation and performance

Attachment 2


2 July 2015 – V6 - 32 -

6. Asset Management Improvement Plan

A program of tasks has been developed that will allow the Shire to exceed the ‘core’ level of financial and asset management maturity. The tasks are shown in chronological order in Table 8.

Table 8: Asset Management Improvement Plan


1. Adoption by Council of a sustainable Long Term Financial Plan covering the period of at least 10 years.

Mgr Finance June 2015

2. Executive to adopt an expanded “roles and responsibilities” matrix as summarised in the Asset Management Policy to identify officers responsible for specific asset management activities.

Mgr Infra Strategy

June 2015

3. Develop Condition Rating Assessment Manuals for critical asset types.

Manager Infra Maintenance

June 2015

4. Expand use and develop improvements to GeoMedia Smart Client, including ability to access photos and documents in the field.

Mgr Infra Strategy

June 2015 $5,000

5. Record data for playgrounds at a “unit” level. Mgr Infra Strategy

June 2015

6. Implement process for collection of attribute and spatial data for “open drains”.

Mgr Infra Strategy & Mgr

Infra Prjct Mngmnt

June 2015

7. Develop an intelligent corporate asset notification process to electronically and spatially record discovered, modified and new assets for use by staff and service providers.

Mgr Infra Strategy

Dec 2015 $20,000

8. Provide Executive and Council with an annual “State of the Shire’s Assets” report covering asset quantities, asset replacement costs, asset condition, and future financial sustainability options and consequences.

Mgr Infra Strategy

Dec 2015

9. Link spatial data for kerbs in GIS with attribute data in Asset Register.

Mgr Infra Strategy

Dec 2015

10. Refine data cleansing and data validation processes for data in Asset Register.

Mgr Infra Strategy

Dec 2015

11. Inclusion of specific renewal program for 2 year period and general program for 10 years with associated cash flow forecasts into Asset Management Plans.

Mgr Infra Strategy

Dec 2015

12. Consolidate condition inspection program for major asset types


Dec 2015

13. Implement a trial, for an asset type to be selected, of measuring the state of an asset based not only on its condition, but also on an assessment of its functionality and capacity.

Mgr Infra Strategy

June 2016

Attachment 2


2 July 2015 – V6 - 33 -


14. Collect condition data for pathways, k&c, retaining walls and street & park furniture.


June 2016 $60,000

15. Develop asset degradation graphs for major asset types based on local condition data

Mgr Infra Strategy

June 2016

16. Expand Asset Register to include “Living Assets” (trees, vegetation, grass surfaces, etc).

Mgr Infra Strategy &Mgr Infra

Maintenance

June 2016

17. Clarify responsibilities for maintenance and renewal of assets on Crown land where the Shire is the Committee of Management.

Mgr Infra Strategy

Dec 2016

18. Develop an asset rationalisation and disposal process for park furniture and fences.

Mgr Infra Strategy

Dec 2016

19. Review community levels of service for the Service Plan and Asset Management Plan for Buildings.

Mgr Infra Strategy

June 2017

20. Review current asset management information system to ensure alignment with Shire’s future needs.

Mgr Infra Strategy &

Mgr Finance

June 2017 $15,000

21. Include in annual community satisfaction surveys questions targeted at asset management performance of specific asset classes.

Mgr Infra Strategy

Dec 2017

Attachment 2


2 July 2015 – V6 - 34 -

Appendix A – Asset Management Maturity Assessment

National Asset Management Assessment Framework

Core Competency – Self Improvement Questionnaire 2013

Strategic Long Term Plan

QUESTIONS

Stat

us

Over

allPe

rform

ance

Aggr

egat

e Sco

re

Council has a Strategic Longer Term Plan (planning horizon of at least 5 years) that incorporates a vision, strategic outcomes, mission, values and service outcomes that Council wants to achieve.

Complete 4

The development of the Strategic Longer Term Plan included community consultation and reflects community needs. Complete 4

The Strategic Longer Term Plan incorporates priorities and performance measures and indicates how they will be monitored and measured. Complete 4

Council has a sustainable Long Term Financial Plan covering the period of the Strategic Longer Term Plan (at least 5 year) supporting the implementation of its Long Term Plan.

Advanced 3

The Long Term Financial Plan has been prepared based on the resource requirements and strategic objectives detailed in Council’s Long Term Plan and Asset Management Plans.

Advanced 4

The Strategic Long Term Plan and Long Term Financial Plans incorporate review processes in accordance with relevant state requirements.

Not Started 3

Strategic Long Term Overall Score 22 91.67

Annual Budget

QUESTIONS

Stat

us

Over

allPe

rform

ance

Aggr

egat

e Sco

re

The Annual Budget contains estimates of revenue and expenditure with an explanation of the assumptions and methodologies underpinning the estimates, an explanation of the financial performance and position of the Council and has been prepared based on the resource requirements and strategic objectives detailed in Council’s Strategic Longer Term Plan, Asset Management Plans and Long Term Financial Plan.

Complete 4

The Annual Budget reflects the Council's strategic objectives and contains a statement of how Council will meet the goals and objectives of its Strategic Longer Term Plan.

Complete 4

The Annual Budget aligns with Year 1 of the Long Term Financial Plan, and was adopted following community consultation Complete 4

Council’s Annual Budget includes resources to implement Strategic Longer Term Plan strategies. Complete 4

Annual Budget Overall Score 16 100.00

Attachment 2


2 July 2015 – V6 - 35 -

Annual Report

QUESTIONS

Stat

us

Over

allPe

rform

ance

Aggr

egat

e Sco

re

The Annual Report complies with all statutory requirements including publication by the due date and is made widely available to the public. Complete 4

The Annual Report includes independently audited financial statements that are prepared on an accrual basis in accordance with the Australian Accounting Standards.

Complete 4

The Annual Report reviews the performance of the Council against its strategic objectives and explains variations between the budget and actual results and how these variations impact on the Strategic Longer Term Plan.

Complete 4

The Annual Report includes details of any major changes in functions of the Council, organisation structure and/or policy initiatives and how these changes might impact on Council’s Strategic Longer Term Plan.

Complete 4

In relation to the financial reporting framework in the Annual Report, the Annual Report addresses the following issues in accordance with relevant state policies, Australian Accounting Standards and other best practice guidelines: a. Asset valuations and revaluations b. Asset acquisitions including capitalisation policy c. Asset disposals

Complete 4

Annual Report Overall Score 20 100.00

Asset Management Policy

QUESTIONS

Stat

us

Over

allPe

rform

ance

Aggr

egat

e Sco

re

Council has an adopted Asset Management Policy which defines the Council’s vision and service delivery objectives for asset management. Complete 4

The Asset Management Policy has a direct linkage with Council’s Strategic Longer Term Plan and Long Term Financial Plan. Complete 4

The Asset Management Policy requires the adoption of Asset Management Plans informed by community consultation and local government financial reporting frameworks.

Complete 4

The Asset Management Policy defines asset management roles, responsibilities and reporting framework. Complete 4

The Asset Management Policy identifies a process for meeting training needs in financial and asset management practices for councillors and staff.

Complete 4

Asset Management Policy Overall Score 20 100.00

Attachment 2


2 July 2015 – V6 - 36 -

Asset Management Strategy

QUESTIONS

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Council has an Asset Management Strategy which shows how the asset portfolio can meet the service delivery needs of the community and defines the future vision of asset management practices within Council.

Complete 4

Council’s Asset Management Strategy is linked to Council's Asset Management Policy and integrated into Council’s Strategic Longer Term planning and annual budgeting processes.

Complete 4

Council's Asset Management Strategy documents the current status of asset management practices (processes, asset data and information systems) within the Council and what actions Council must take to implement the Asset Management Policy, including resource requirements, timeframes and accountabilities.

Complete 4

Asset Management Strategy Overall Score 12 100.00

Asset Management Plans

QUESTIONS

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There are documented Asset Management Plans for all material asset groups in a consistent format in accordance with industry best practice (E.g. Appendix A of the International Infrastructure Management Manual (IIMM)) available to all relevant staff across the organisation.

Complete 4

The Asset Management Plans define which asset groups are covered by each Plan in accordance with a clearly documented Infrastructure Asset Hierarchy.

Complete 4

With respect to the content of the Asset Management Plans, they: a. Refer to Council's Asset Management Policy and Asset Management Strategy;

Scores Derived from AM

Worksheet

4.0

b. Include all assets and document asset inventory information for the asset group/category as recorded in the asset register;


Worksheet

3.7

c. Document the asset hierarchy within each asset group; Scores Derived from AM

Worksheet

4.0

d. Document the current condition of assets; Scores Derived from AM

Worksheet

3.7

e. Document the adopted useful lives of assets; Scores Derived from AM

Worksheet

4.0

f. Include risk assessment and criticality profiles; Scores Derived from AM

Worksheet

3.4

g. Provide information about assets, including particular actions and costs to provide a defined (current and/or target) level of service in the most cost effective manner.;


Worksheet

4.0

h. Include demand management forecasts; Scores Derived from AM

Worksheet

4.0

i. Address life cycle costs of assets; Scores Derived from AM

Worksheet

4.0

Attachment 2


2 July 2015 – V6 - 37 -

QUESTIONS

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j. Include forward programs identifying cash flow forecasts projected for: i. Asset Renewals; Scores Derived

from AM Worksheet

4.0

ii. New Assets and Upgrades of existing assets; Scores Derived from AM

Worksheet

3.0

iii. Maintenance expenditure; Scores Derived from AM

Worksheet

4.0

iv. Operational expenditure (including depreciation expense); Scores Derived from AM

Worksheet

4.0

k. Address asset performance and utilisation measures and associated targets as linked to levels of service;


Worksheet

3.1

l. Include an asset rationalisation and disposal program; and Scores Derived from AM

Worksheet

4.0

m. Include an asset management improvement plan. Scores Derived from AM

Worksheet

4.0

n. Include consideration of non-asset service delivery solutions (leasing private/public partnerships)


Worksheet

1.4

o. Recognise changes in service potential of assets through projections of asset replacement costs, depreciated replacement cost and depreciation expense.


Worksheet

4.0

The Asset Management Plans link to the Council’s Asset Management Policy, Asset Management Strategy, Strategic Longer Term Plan, Long Term Financial Plan and other relevant Council Policy objectives.


Worksheet

4.0

The Asset Management Plans have all been prepared in association with community consultation.


Worksheet

4.0

Asset Management Plans Overall Score 82 93.67

Attachment 2


2 July 2015 – V6 - 38 -

Governance and Management

QUESTIONS

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Council has mechanisms in place to provide high level oversight by the Council, CEO/GM and Executive Management Team, for development and implementation of the Asset Management Strategy and Asset Management Plans.

Complete 4

Roles and responsibilities are clearly defined in a matrix or policy, identifying positions responsible for determining levels of service and positions responsible for managing the assets to meet service delivery needs.

Advanced 3

The staff structure and position descriptions clearly define asset management functions, responsibilities and skill requirements for managing all asset classes.

Complete 4

Council has a documented process for making capital investment decisions, which is driven by Council’s Strategic Longer Term Plan, Long Term Financial Plan and the Council Plan and explicitly details the impacts on the future operations and maintenance budgets, “Whole of Life” costs and risk management assessments.

Complete 4

Council involves all its departments in Asset Management. Complete 4Council has an Asset Management Steering Committee, with cross functional representation and clearly defined and documented terms of reference, focussed on coordinating the linkages between service delivery and asset management implementation.

Complete 4

There are internal processes to promote Asset Management across Council Complete 4

Governance & Management Overall Score 27 96.43

Levels of Service

QUESTIONS

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Council has Service Plans for each of its services which have been developed in consultation with the community. Complete 4

Council has undertaken the process of defining, quantifying and documenting current community levels of service and technical levels of service, and costs of providing the current levels of service.

Complete 4

Current and target levels of service (for both community levels of service and associated technical levels of service) are clearly defined in each Asset Management Plan.

Complete 4

Technical levels of service are incorporated into service agreements and/or maintenance, operational and capital renewal procedures. Complete 4

Levels of Service Overall Score 16 100.00

Attachment 2


2 July 2015 – V6 - 39 -

Data and Systems

QUESTIONS

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Council 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 sorted by asset group.

Complete 4

There is a common corporate data framework used across all asset groups, which is defined by Council’s Infrastructure Asset Hierarchy. Complete 4

Council 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.

Advanced 3

Council's asset financial reporting functionality is comprehensive and includes audit trails, depreciation calculations, reporting thresholds and records of acquisition and disposal of assets

Complete 4

Council's systems, procedures and processes allow it to benchmark its asset management performance against like Councils over time. Complete 4

Asset Management systems have the functionality to generate maintenance and renewal programs and produce associated cash flow forecasts.

Complete 4

Council has defined and documented procedures for determining asset replacement and treatment unit rates, which are then stored in Council’s Asset Management system.

Complete 4

Council has a defined process for operations, maintenance, renewal and upgrade planning for its existing assets. Complete 4

Data & Systems Overall Score 31 96.88

Attachment 2


2 July 2015 – V6 - 40 -

Skills and Processes

QUESTIONS

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Council has a process to review and update the Asset Management Strategy on a maximum of a 5 year cycle. The Asset Management Strategy is to be formally adopted by Council.

Complete 4

Council has a process to review and update Asset Management Plans for all asset groups on a maximum of a 3 to 4 year cycle consistent with the Council election cycle. Asset Management Plans are formally adopted by Council.

Complete 4

Council has a process to identify operational risks, assign responsibilities and monitor risk treatment actions all recorded within a risk register. Advanced 3

Council has a process to annually review and update the financial forecasts for all asset classes and update the Long Term Financial Plan. Advanced 3

Council has assessed the skills and knowledge required to perform asset data management activities, conduct financial reporting valuations and develop Asset Management Plans. Council has a current asset management skills matrix. Staff training needs have been identified and training scheduled.

Complete 4

Council has a defined methodology for assessing the Remaining and Useful Life, Residual Value and Depreciation Method of assets. Complete 4

Council 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.

Complete 4

Council has formal processes for the handover of assets to asset custodians/owners. Complete 4

Council has a process to communicate the financial implications of the Asset Management Plans to internal and external stakeholders. Advanced 3

Council provides ongoing training programs for councillors, council management and officers on key asset management topics. Complete 4

Skills & Processes Overall Score 37 92.50

Evaluation

QUESTIONS

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Council has a documented evaluation process by which asset management improvements are identified, timeframes established, resources allocated, actioned, monitored and reported to the Executive Management Team and/or CEO

Complete 4

Technical levels of service are monitored and performance reported. Advanced 3Community levels of service are monitored and performance reported. Complete 4

Evaluation Overall Score 11 91.67

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