ASSET MANAGEMENT STRATEGY 2015/16 – 2024/25 REVISED JUNE 2015
Our Vision Ku-ring-gai will be a creative, healthy and liveable place where people respect each other, conserve the magnificent environment and society for the children and grandchildren of the future. Community Strategic Plan 2030
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This Plan has been prepared by Ku-ring-gai Council to support the delivery of its long-term strategic direction. It forms part of the Resourcing Strategy for the Community Strategic Plan and Delivery Program and should be read in conjunction with these documents. For more information on this document contact: Ku-ring-gai Council 818 Pacific Hwy, Gordon NSW 2072. Locked bag 1056, Pymble 2073 Ph. (02) 9424 0000 F (02) 9424 0001 kmc@kmc.nsw.gov.au
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Contents Our Vision ................................................................................................................................................................................................................ 2 Summary .................................................................................................................................................................................................................. 5 Introduction .............................................................................................................................................................................................................. 5 Asset Management Planning Process ..................................................................................................................................................................... 7 Asset Management Policy and Objectives ............................................................................................................................................................... 8 Where are we now? ............................................................................................................................................................................................... 10 Current Situation .................................................................................................................................................................................................... 10 Council’s Vision, Goals and Objectives – Our Future ............................................................................................................................................ 19 Life Cycle Management ......................................................................................................................................................................................... 21 How will we get there? ........................................................................................................................................................................................... 39 Reporting and Assessment .................................................................................................................................................................................... 47 Conclusion ............................................................................................................................................................................................................. 48 Appendix A Asset Management Policy 2014 ......................................................................................................................................................... 49
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Summary The Asset Management Strategy has been prepared following engagement with our community on Council’s service delivery practices, financial sustainability indicators, asset management maturity and the objectives identified in the Community Strategic Plan. The Strategy also includes an asset management improvement plan, which details a program of tasks and nominated resources required as part of our commitment to the continuous improvement of the organisation. This Asset Management Strategy for Ku-ring-gai has been developed in accordance with the Integrated Planning and Reporting Framework Guidelines. 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 Policy to be achieved ensure the integration of Council’s asset management with its long term strategic plan
Introduction Council delivers a variety of services to the community and in doing so, must ensure that the assets supporting these services are managed with a whole of life asset management approach. The life cycle management approach optimises asset acquisition, maximises use of assets and manages service and operational costs. Ku-ring-gai Council’s infrastructure assets represent a vast investment over many generations that support modern living in the community. Millions of dollars are spent annually managing Council’s infrastructure and it is imperative that Council employs the best asset management skills and practices to ensure that related services are delivered economically and sustainably. Council demonstrates its commitment to asset management the Asset Management Policy, Asset Management Strategy and a suite of Asset Management Plans, which apply to all infrastructure assets owned by Council.
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Community and organisational goals and objectives have guided the development of this Strategy to ensure the management of Council’s assets reflect the broader community long term objectives contained in the Community Strategic Plan ‘Our Community, Our Future’ 2030. The Community Strategic Plan ‘Our Community, Our Future’ 2030, provides strategic direction, addressing the community’s issues to achieve the long term objectives under the following themes;
Community, People and Culture Natural Environment Places, Spaces and Infrastructure Local Economy and Employment Access, Traffic and Transport Leadership and Governance
The Asset Management Strategy can be viewed as a first tier plan being supported by more detailed Asset Management Plans. It provides direction to guide asset management actions into the future and ensures the Council continually improves the management of its infrastructure. It is vital that Council develops and maintains rigorous asset management processes, as asset management is a key driver of the 10 Year Long Term Financial Plan through its renewal and capital works program
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Asset Management Planning Process
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 plans and operational plans, linked to a long-term financial plan.
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Asset Management Policy and Objectives Purpose The purpose of Council’s Asset Management Policy is to guide the strategic management of council’s assets. The Asset Management Policy defines the Council’s vision and service delivery objectives for asset management in accordance with legislative requirements, community needs and affordability. The Asset Management Strategy has been developed to support the Asset Management Policy. The Policy was adopted by Council on the 26 August 2014. A copy of the policy is attached at Appendix A.
Objectives 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 develops and maintains asset management governance, skills, processes, data and systems in order to provide services to our present and future community in the most cost-effective and sustainable manner. 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. improve the condition of our assets over a ten-year period by implementing optimised maintenance and renewal programs based on the remaining useful life, condition and allocated funding. manage assets in a poor and failed condition with appropriate risk management strategies.
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Improve our existing data by ensuring that all assets are assessed and appropriate useful lives and conditions assigned to each component. any future projects that aim to create or upgrade assets are done with a full understanding of the whole of life costing for the asset. Asset Management Plans are developed into advanced plans that provide detailed service levels, funding and future maintenance and capital works for each asset group. the Asset Management Strategy and Plans are reviewed to ensure alignment with Council’s Integrated Planning & Reporting documents. 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. 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 Group. reporting to Council on the development, revision and implementation of the Asset Management Strategy, Asset Management Plans and Resourcing Strategy.
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Where are we now? Current Situation In developing the Asset Management Strategy, we needed to understand the current situation of Council’s assets and their management. This included consideration of the following:
What assets do we have and where are they?
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What is the current condition of assets? Do they meet Council’s and community current and forecast needs? Is the funding base for operation, maintenance and renewal appropriate and affordable? What is the state of Council’s asset management practices, procedures and training?
In 2013 the NSW Government released the Local Government Infrastructure Audit Report which reviewed all NSW councils infrastructure management and infrastructure financial planning. The independent report determined Ku-ring-gai Council’s infrastructure management as Strong.
Asset cost, condition and value The cost, condition and value of assets are reported each year in financial statements within the Annual Report. The infrastructure assets are valued at $927Million1 and the carrying amount (WDV) is $518Million. Currently financial and technical asset registers do not align as the technical registers are updated on a more regular basis. The integration between registers will improve due to the revaluation of our stormwater drainage and roads and transport assets are to be completed by 30 June 2015. 8
1
Ku-ring-gai Council Annual Report 2013/2014 – Financial Statements Note 9a Infrastructure, Property, Plant & Equipment
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Infrastructure Backlog Ratio
Infrastructure Backlog
Benchmark <2%
Council’s infrastructure backlog represents the cost to bring assets in a poor and failed condition up to an acceptable standard.
Infrastructure Backlog Ratio
10% 8%
Council has recently engaged a consultant to review the asset registers and the backlog figure, which was previously reported in Special Schedule 7, 2013/2014 as $165Million. Council’s asset data such as unit rates, condition ratings and useful lives were revised and a new methodology for determining the infrastructure backlog has been applied. The infrastructure backlog after review, based on 2013/2014 replacement cost is $24.5million.
6% 4% 2% 0% ‐2% ‐4%
The infrastructure backlog ratio compares the backlog figure to the written down value of our assets (WDV). Figure 1 shows how the ratio decreases from 2014/2015 and reaches the benchmark of 2% in 2016/2017.
Figure 1 Infrastructure Backlog Ratio
Figure 2 shows the Infrastructure backlog for each asset class over a ten-year period. The projections each year are based on the previous year’s backlog, adding depreciating and deducting renewal expenditure. The renewal expenditure is adopted in the Long Term Financial Plan and will be revised each year to ensure that we reallocate renewal to asset groups with a higher backlog figure. Infrastructure Backlog $'000 Roads and Transport Buildings
Budget 2015/16
Projected 2016/17
Projected 2017/18
Projected 2018/19
Projected 2019/20
Projected 2020/21
Projected 2021/22
Projected 2022/23
Projected 2023/24
Projected 2024/25
10,620
4,462
1,761
1,701
733
694
432
400
50
0
4,616
1,170
126
65
115
20
0
62
18
0
Stormwater Drainage
3,051
2,570
1,092
1,031
492
306
137
77
28
0
Recreational Facilities
3,719
2,226
129
267
77
355
256
48
27
0
22,007
10,428
3,107
3,065
1,417
1,376
825
586
123
0
Total Backlog
Figure 2 Financial status of each asset class (identified in the long‐term financial model)
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Maintenance expenditure
Asset Maintenance Ratio (3 Yr Average) Benchmark >100%
Maintenance is the activities required or undertaken by Council to preserve the original condition of the assets. The required maintenance, which is reported in Special Schedule 7, is the amount that Council should be spending on their assets and is based on a percentage of the replacement cost. Actual maintenance includes the budgeted amount that Council will spend on preventative, corrective and reactive maintenance annually.
Below Benchmark Asset Maintenance Ratio (3 Yr Average) 140% 120% 100% 80%
Figures 3 and 4 compare the required maintenance to the projected maintenance budget. The asset maintenance ratio compares the figures and demonstrates how Council meets the benchmark of 100% in each year of the Long Term Financial Plan. Maintenance expenditure will have to be revised each year to ensure that Council continues to meet the 100% benchmark.
60%
Figure 3 – Asset Maintenance Ratio REQUIRED MAINTENANCE BY ASSET CLASS Roads and Transport
Budget 2015/16 3,796
Projected 2016/17
Projected 2017/18
Projected 2018/19
Projected 2019/20
Projected 2020/21
Projected 2021/22
Projected 2022/23
Projected 2023/24
Projected 2024/25
3,815
3,988
4,196
4,217
4,285
4,490
4,687
4,722
4,756
Buildings
2,568
2,470
2,354
3,301
3,255
3,248
3,218
3,218
3,218
3,218
Stormwater Drainage
1,900
1,904
1,910
1,914
1,919
1,923
1,927
1,931
1,935
1,939
Recreational Facilities
2,779
2,961
3,226
3,823
4,007
4,254
4,339
4,350
4,363
4,409
Total Required Maintenance
11,043
11,151
11,478
13,233
13,399
13,710
13,973
14,186
14,237
14,320
Actual Maintenance (CPI increase)
11,509
11,843
12,127
13,393
13,715
14,044
14,381
14,726
15,079
15,441
466
692
649
160
316
334
408
540
842
1,121
Gap
Figure 4 Asset Maintenance Ratio
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Renewal Expenditure
Building & Infrastructure Asset Renewal Ratio (3 Yr Average) Benchmark >100%
Renewal is the activities to refurbish or replace assets with assets of equivalent capacity or performance capacity. Renewal works are included in Council’s Capital Works Program. Figure 5 displays the asset renewal ratio. The asset renewal ratio compares renewal expenditure to the depreciation of assets. The graph demonstrates that Council exceeds the benchmark of 100% over the next five years. This begins to level out at approximately 100% from 2020/2021.
Below Benchmark Building & Infrastructure Asset Renewal Ratio (3 Yr Average) 200% 180% 160% 140% 120% 100% 80% 60% 40% 20% 0%
Figure 6 shows the ten year renewal expenditure forecasts identified in Council’s ten year Long Term Financial Plan.
Figure 5 Asset Renewal Ratio
Asset Renewal Expenditure $'000
Budget 2015/16
Roads and Transport Buildings
Projected 2016/17
Projected 2017/18
Projected 2018/19
Projected 2019/20
Projected 2020/21
Projected 2021/22
Projected 2022/23
Projected 2023/24
Projected 2024/25
14,587
14,352
11,164
8,840
9,780
8,991
9,544
9,630
9,998
10,056
5,824
6,099
3,572
3,605
3,446
3,582
3,474
3,393
3,499
3,564
Stormwater Drainage
2,229
2,886
3,890
2,477
2,962
2,615
2,602
2,498
2,491
2,543
Recreational Facilities
5,079
5,424
6,380
4,936
5,510
5,369
5,859
5,983
5,813
6,082
27,719
28,761
25,005
19,858
21,698
20,557
21,480
21,504
21,802
22,245
Total Renewal
Figure 6 Renewal Expenditure
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New/Upgrade Expenditure Capital new expenditure creates assets which will deliver a service to community that didn’t exist beforehand whilst capital upgrade enhances an existing asset to provide a higher level of service to the community. New and upgrade works are included in Council’s Capital Works Program and are mostly funded by Section 94. Figure 7 shows the ten year capital new and upgrade expenditure forecasts identified in Council’s Long Term Financial Plan. New & Upgrade Asset Expenditure Roads and Transport
Budget 2015/16
Projected 2016/17
Projected 2018/19
Projected 2019/20
Projected 2020/21
Projected 2021/22
Projected 2022/23
Projected 2023/24
Projected 2024/25
13,276
16,132
1,780
7,801
17,681
17,369
2,674
3,566
5,627
1,654
48,589
188
172
-
-
-
-
-
477
724
471
699
448
460
525
485
497
510
Recreational Facilities
9,128
13,255
29,818
9,242
12,344
4,231
570
643
2,279
431
Total New & Upgrade
11,871
28,908
95,010
11,909
20,766
22,372
18,464
3,803
6,342
6,568
Buildings
1,139
Projected 2017/18
1,127
Stormwater Drainage
Figure 7 – Capital New and Upgrade expenditure
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Risk Management In 2011, Council developed and implemented a Risk Management Framework, which meets the requirements of the International Risk Management Standard ISO31000. Key to this process was the identification of significant risks, which required action to reduce the level of risk presented to Council and the Community. Asset Management was one area that was identified as presenting a significant risk to Council – in particular the risk presented by the age of assets, condition and available resources for asset maintenance and renewal. The Risk Management Procedure sets out the principles and processes the organisation uses to identify assess and manage risks in a broad context. Essentially, Council’s asset management practices integrate risk management principles throughout both strategic and operational processes. However, it is important that the risk management practices are consistent and documented across all of these processes. To ensure this consistency with minimal duplication, the Asset Management Risk Guide (shown in flow chart below) defines how the risk management processes are integrated both strategically and operationally. Each group of asset custodians are responsible for maintaining a risk register to assist in the identification of significant risks for their asset class. These detailed Risk Registers feed relevant risk information and risk treatment actions into both the Asset Management Strategy and Asset Management Plans. Those significant or critical risks with unacceptable levels of uncontrolled risk will be monitored via the Significant Risk Register, which requires a detailed risk treatment plan to be completed for each significant risk to assist in bringing the risk to an acceptable level. This Asset Management Strategy defines high level significant risks, which impact across asset management in general. Each asset overview has a summary of the key significant risks and risk controls for the asset class/group/type. The Asset Management Plans for each asset class have a detailed evaluation of the significant risks, risk treatments and risk monitoring activities that are carried out by asset custodians. Council’s Risk Management Coordinator provides ongoing assistance to the asset custodians, including training and technical assistance throughout the risk management process.
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Critical Assets
Asset Management/Risk Management Processes
Critical assets are those assets where the financial, business or service level consequences of failure are sufficiently severe to justify proactive inspection and rehabilitation. The following buildings are essential for Council’s operations and outcomes and are considered critical assets;
Council’s administration buildings located at 818 Pacific Highway Gordon, 31 Bridge Street Pymble;
Council works depot located at 5 Suakin St Pymble
The risks associated with these assets include public health and safety, business continuity and emergencies. With the revision of the current suite of asset management plans further investigation of critical assets and the required maintenance strategies will be developed.
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Community Levels of Service Council regularly conducts customer satisfaction surveys to determine community attitudes towards the services and facilities provided, and the quality and appropriateness of each of its services. Throughout 2012, Council consulted with the community on improving our infrastructure assets. The ‘Closing the Gap’ survey asked the community to respond on the importance and satisfaction over a range of asset classes. The consultation identified that in addition to roads, the assets most important to our community are footpaths, drainage and buildings. In 2013-2014, Council engaged an independent research company to complete a survey with ratepayers. The purpose of the community survey was twofold, firstly to measure the support for the continuation of the special rate variation to fund the roads renewal program in Ku-ringgai, and secondly to explore community opinions on expected levels of service and to future funding options for priority assets. The community consultation carried out in 2013-2014, and the survey results indicated that there was a high level of support for the continuation of the special rate variation, with 81% of all respondents indicating they supported it. Further community consultation was conducted through a deliberative forum with ratepayers who had participated in the survey. The objectives of the forum were to discuss the outcomes of the survey and to gauge community opinions on the options for future funding of other footpaths, drainage and building assets. The community consultation assisted with determining priorities and understanding the community’s desired service levels. This information has been incorporated into the Strategy and assists with funding decisions identified in the LTFP to deliver the community’s outcomes. We also need to measure our performance to know whether we are achieving or making progress towards achieving these outcomes and to make choices about the services we deliver and what service level is required. There may even be new services required and we need to look at the full program of services to ensure they are affordable and sustainable. Until recently the ‘Level of Service’ provided by Council’s assets was primarily governed by the condition of these assets. Currently, there are limited formally adopted service levels. Council will further develop service levels in the next revision of its Asset Management Plans for each asset group and link these service levels with community priorities. To do this we plan to undertake regular surveys with our residents to ensure the services we provide are important to them, and that they are satisfied with those services.
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Council’s Vision, Goals and Objectives – Our Future This Asset Management Strategy is prepared to achieve the vision, aspiration and long term objectives of our community and identified in our Community Strategic Plan. The table below shows the link between the community strategic plan and this Strategy; Theme
Community Aspiration
Long Term Objective
Integration with asset class
A healthy, safe, and inclusive community that respects our history, and celebrates the contributions of a diverse culture through learning about our differences
An equitable and inclusive community that cares and provides for its members
Buildings
Community, People and Culture
A community that embraces healthier lifestyle choices and practices
Recreational Facilities
Working together as a community to protect and enhance our natural environment and resources
Our natural waterways and riparian areas are enhanced and protected.
Natural Environment
Stormwater Drainage Recreational Facilities
A community addressing and responding to the impacts of climate change and extreme weather events. Places, Spaces and Infrastructure
A range of well planned, clean and safe neighbourhoods and public spaces designed with a strong sense of identity and place
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Recreation, sporting and leisure facilities are available to meet the community’s diverse and changing needs
Recreational Facilities
Multipurpose community buildings and facilities are available to meet the community’s diverse and changing needs
Buildings
An improved standard of infrastructure that meets the community’s service level standards and Council’s obligations as the custodian of our community assets.
All asset classes
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Theme
Community Aspiration
Long Term Objective
Access, Traffic and Transport
Access and connection to, from and within Ku-ring-gai provides safe, reliable and affordable public and private travel, transport and infrastructure
An accessible public transport and regional road network that meets the diverse and changing needs of the community
Integration with asset class
Roads and Transport
The local road network is managed to achieve a safe and effective local road network.
Local Economy and employment
Leadership and Governance
Developing partnerships and create opportunities that attract investment and business innovation to stimulate local economic growth and employment
Our centres offer a broad range of shops and services and contain lively urban village spaces and places where people can live, work, shop, meet and spend leisure time
Roads and Transport Buildings Recreational Facilities
Ku-ring-gai is ethical, well led and managed and delivers and facilities the delivery of projects and services to the community by listening, advocating and responding to their needs.
Council rigorously manages its financial resources and assets to maximise delivery of services.
Roads and Transport Stormwater Drainage Buildings Recreational Facilities
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Life Cycle Management Roads and Transport Council’s road and transport network comprises of roads, footpaths, car parks, kerb and gutter, bridges and road structures and street furniture assets. These assets are maintained by Councils Engineering Services section of the Operations Department. All asset information pertaining to each group is contained within Councils asset registers and further detailed information on our roads is held within Council’s Pavement Management System (SMEC). Council’s road and transport assets are currently being revalued and the updated registers will be imported into Council’s corporate asset system by 30 June 2015. Council has also engaged an independent consultant to review Council’s asset data and infrastructure backlog. The infrastructure backlog for roads and transport assets has been reviewed and the backlog is currently $16.9Million based on 2013/2014 data. Specific details for each asset group are outlined on the following pages.
Community Objective The Roads and Transport asset class supports the long term objectives of our Community Strategic Plan through the following Themes;
Access, Traffic and Transport - An accessible public transport and regional road network that meets the diverse and changing needs of the community and the local road network is managed to achieve a safe and effective local road network.
Places, Spaces and Infrastructure - An improved standard of infrastructure that meets the community’s service level standards and Council’s obligations as the custodian of our community assets.
Local Economy and employment - Our centres offer a broad range of shops and services and contain lively urban village spaces and places where people can live, work, shop, meet and spend leisure time
Leadership and Governance - Council rigorously manages its financial resources and assets to maximise delivery of services.
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Roads Available data and funding The roads data reported in Note 9a of Councilâ&#x20AC;&#x2122;s Financial Statements 2013/2014, is based on the previous revaluation completed in 2010. The data has been reviewed by a consultant who provided a recommendation for Council to complete a full condition assessment of the road components. The major issue with our road data is that the road pavement and surface condition were previously given the same condition rating. The conditon assesment will be completed as part of the revaluation and the data will be imported into the new corporate asset system by 30 June 2015 in line with revaluation requirements. Future Infrastructure Backlog Backlog Backlog figure
Budget 2015/16 7,580
Projected 2016/17 2,982
Projected 2017/18 1,361
Projected 2018/19
Projected 2019/20
1,261
Projected 2020/21
Projected 2021/22
Projected 2022/23
493
527
260
235
Projected 2023/24
Projected 2024/25
15
0
Future Funding Allocation Capital Renewal
Budget 2015/16 9,787
Projected 2016/17 9,237
Projected 2017/18
Projected 2018/19
Projected 2019/20
Projected 2020/21
Projected 2021/22
Projected 2022/23
Projected 2023/24
Projected 2024/25
6,324
4,844
5,512
4,832
5,204
5,029
5,224
5,307
New/upgrade
123
3,530
2,302
0
6,736
4,013
3,679
0
2,309
528
Maintenance
1,219
1,254
1,285
1,419
1,453
1,488
1,523
1,560
1,597
1,636
The tables above show the projected capital and maintenance expenditure and the backlog figures for roads. The projected backlog figures are based on revised condition percentages applied to the road pavement and surface by an independent consultant.
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Service Level Expectations Community consultation confirmed that our roads are a high priority and our residents support reducing any funding gaps to improve the condition of our roads. Further consultation has also revealed that the community supports the continuation of the special rate variation which has been in place since 2001. The communityâ&#x20AC;&#x2122;s high expectation of our roads influences the substantial investment in renewal funding.
Future directions Council will be completing a full condition assessment of our roads to identify the actual condition rating for the pavement and surface. The asset register will be updated and imported into the corporate system to reflect these new values. The completion of condition assessments will establish more accurate required future funding. Council will continue to review operational and capital expenditure and where necessary reallocate funding to ensure these assets are maintained to community expectations and the infrastructure backlog is reduced. The condition of the roads will continue to be assessed and updated on a regular basis.
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Footpaths Avaliable data and funding The footpath data reported in Note 9a of Council’s Financial Statements 2013/2014, is based on the previous revaluation completed in 2010. The data has been reviewed by a consultant who determined that the asset register was well established and recommended that condition assessments continue on an ongoing basis. Council’s footpath assets are being revalued as part of the fair valuation requirements. The register will be imported into the new corporate asset system by 30 June 2015 in line with revaluation requirements. Future Infrastructure Backlog Backlog Backlog figure
Budget 2015/16 1,556
Projected 2016/17 447
Projected 2017/18 135
Projected 2018/19
Projected 2019/20
113
Projected 2020/21
Projected 2021/22
Projected 2022/23
97
97
84
34
Projected 2023/24
Projected 2024/25
11
0
Future funding allocation Capital Renewal
Budget 2015/16
Projected 2016/17
Projected 2017/18
Projected 2018/19
Projected 2019/20
Projected 2020/21
Projected 2021/22
Projected 2022/23
Projected 2023/24
Projected 2024/25
1,666
2,412
1,696
1,474
1,468
1,455
1,495
1,542
1,522
1,523
New/upgrade
572
2,785
2,332
0
121
903
356
267
0
150
Maintenance
843
867
888
981
1,005
1,029
1,053
1,079
1,105
1,131
The tables above show the projected capital and maintenance expenditure and the backlog figures for footpaths. The projected backlog figures are based on the revised figures from the consultant.
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Service level expectations The community consultation identified our footpaths as a medium to high priority and residents support reducing any funding gaps to improve the condition of our footpaths. The communityâ&#x20AC;&#x2122;s high expectation of our footpaths influences our investment in renewal funding.
Future directions Council will continue to review operational and capital expenditure and where necessary reallocate funding to ensure these assets are maintained to community expectations and the infrastructure backlog is reduced. The condition of the footpaths will continue to be assessed and updated on a regular basis.
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Kerb and Gutter Available data The kerb and gutter data reported in Note 9a of Council’s Financial Statements 2013/2014, is based on the previous revaluation completed in 2010. This data has been reviewed by a consultant who determined that the asset register data was outdated and there was no inspection program in place. A subsequent condition assessment has been undertaken and the results indicate that the conditon of the kerb and gutter is of a higher standard than previously documented. Council’s kerb and gutter assets are being revalued as part of the fair valuation requirements. The register will be imported into the new corporate asset system by 30 June 2015 in line with revaluation requirements. Infrastructure Backlog Backlog Backlog figure
Budget 2015/16
Projected 2016/17
1,163
Projected 2017/18
712
Projected 2018/19
181
Projected 2019/20
172
Projected 2020/21
Projected 2021/22
Projected 2022/23
62
67
58
76
Projected 2023/24
Projected 2024/25
15
0
Future Funding Allocation Capital Renewal
Budget 2015/16
Projected 2016/17
Projected 2017/18
Projected 2018/19
Projected 2019/20
Projected 2020/21
Projected 2021/22
Projected 2022/23
Projected 2023/24
Projected 2024/25
2,700
2,346
2,427
1,904
2,006
1,890
1,904
1,878
1,957
1,919
New/upgrade
0
17
0
0
0
0
0
0
0
0
Maintenance
251
258
265
292
299
306
314
321
329
337
The tables above show the projected capital and maintenance expenditure and the backlog figures for kerb and gutter. The projected backlog figures are based on the revised figures from the consultant.
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Service level expectations The community consultation identified kerb and gutter as a low priority and there was lack of support to reduce the funding gap. The communityâ&#x20AC;&#x2122;s low expectation of our kerb and gutter influences the investment in renewal funding.
Future directions Council will continue to review operational and capital expenditure and where necessary reallocate funding to ensure these assets are maintained to community expectations and the infrastructure backlog is reduced. A condition assessment program will be developed and the asset register will need to be updated on a regular basis.
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Car Parks, Road Structures and Bridges Available data The bridges, road structures and car park asset data reported in Note 9a of Council’s Financial Statements 2013/2014, is based on the previous revaluation completed in 2010. This data was not reviewed by a consultant as the infrastructure backlog was insignificant. Council has separate asset registers for these assets which are not updated on a regulary basis. Council’s car park, road structures and bridges assets are being revalued as part of the fair valuation requirements. The register will be imported into the new corporate asset system by 30 June 2015 in line with revaluation requirements. Infrastructure Backlog Backlog $000 Backlog figure
Budget 2015/16 322
Projected 2016/17 321
Projected 2017/18 85
Projected 2018/19 155
Projected 2019/20
Projected 2020/21
Projected 2021/22
Projected 2022/23
81
4
29
55
Projected 2023/24
Projected 2024/25
9
0
Future Funding Allocation Capital $000
Budget 2015/16
Projected 2016/17
Projected 2017/18
Projected 2018/19
Projected 2019/20
Projected 2020/21
Projected 2021/22
Projected 2022/23
Projected 2023/24
Projected 2024/25
Renewal
434
357
717
618
794
815
942
1,180
1,296
1,307
New/upgrade
443
6,943
11,498
1,780
944
12,765
13,334
2,408
1,257
4,949
Maintenance
120
124
126
140
143
146
150
154
157
161
The tables above show the projected capital and maintenance expenditure and the backlog figures for these assets. The projected backlog figures are based on the revised figures from the consultant.
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Itâ&#x20AC;&#x2122;s important to note that the substantial amount of the capital new/upgrade funding is partially funded through Section 94 and will be spent on upgrading our business centre structures over the next ten years.
Service level expectation The community consultation identified car parks as a moderate priority and there was no community consultation for bridges and road structures.
Future directions Council will continue to review operational and capital expenditure and where necessary reallocate funding to ensure these assets are maintained to community expectations and the infrastructure backlog is reduced. A condition assessment program will be developed for these asset groups and the asset register will need to be updated on a regular basis.
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Buildings Council’s building asset class is separated into operational, community and commercial asset groups. Operational buildings include Council offices and depot while commercial assets consist of council owned and leased residential properties and retail services. Community buildings comprise of public toilet amenities, libraries, child care centres, halls, community centres, clubhouses and shelters. All asset information pertaining to each group is contained within Council’s fair valuation register.
Community Objective The Buildings asset class supports the long term objectives of our Community Strategic Plan through the following Themes; Community, People & Culture – An equitable and inclusive community that cares and provides for its members Places, Spaces and Infrastructure - Multipurpose community buildings and facilities are available to meet the community’s diverse and
changing needs - An improved standard of infrastructure that meets the community’s service level standards and Council’s obligations as the custodian or our community assets. Local Economy and Employment - Our centres offer a broad range of shops and services and contain lively urban village spaces and places where people can live, work, shop, meet and spend leisure time Leadership and Governance - Council rigorously manages its financial resources and assets to maximise delivery of services
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Council Buildings Available data Council’s building asset data, reported in Note 9a of Council’s Financial Statements 2013/2014, is based on the previous revaluation completed by a registered valuer in 2013. Buildings over $500,000 were valued at a component level whilst buildings below $500,000 were giving an overall value and an average condition rating. . The Building Register was recently reviewed by an independent consultant who recommended a re-assessment of condition ratings and the useful lives of heritage buildings, and buildings over $500,000. This assessment was completed by a registered valuer and resulted in a significant improvement of builidng asset conditon and an increase in useful lives which has decreased Council’s depreciation. Council is still completing an internal condition assessment of all buildings at a component level and this is due for completion late 2015. Future Infrastructure Backlog Backlog $000
Budget 2015/16
Backlog figure
4,616
Projected 2016/17 1,170
Projected 2017/18 126
Projected 2018/19 65
Projected 2019/20
Projected 2020/21
Projected 2021/22
Projected 2022/23
115
20
0
62
Projected 2023/24
Projecte d 2024/25
18
0
Future Funding Allocations Expenditure
Budget 2015/16
Projected 2016/17
Projected 2017/18
Projected 2018/19
Projected 2019/20
Projected 2020/21
Projected 2021/22
Projected 2022/23
Projected 2023/24
Projected 2024/25
Renewal
5,824
6,099
3,572
3,605
3,446
3,582
3,474
3,393
3,499
3,564
New/upgrade
1,127
1,654
48,589
188
172
0
0
0
0
0
Maintenance
2,055
2,115
2,165
2391
2449
2508
2568
2629
2693
2757
The tables above show the projected capital and maintenance expenditure and the backlog figures for these assets. The projected backlog figures are based on the revised figures from the consultant.
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Important to note that a substantial amount of the capital new/upgrade funding in 2017/2018 is partially funded through Section 94 and will be spent on the redevelopment of our local centres for the provision of new community facilities.
Service level expectations The community consultation identified our buildings as an asset priority support reducing any funding gaps to improve the condition of the buildings. The communityâ&#x20AC;&#x2122;s high expectation of our buildings influences the investment in renewal funding.
Future directions Council will continue to review operational and capital expenditure and where necessary reallocate funding to ensure these assets are maintained to community expectations and the infrastructure backlog is reduced. Council will continue to complete the componentisation of our buildings and this will provide an accurate assessment of these assets and the infrastructure backlog.
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Stormwater Drainage Council’s stormwater drainage network includes underground assets such as pits and pipes and surface drainage assets including detention basins and open channels. The stormwater drainage asset components are maintained by Council Engineering Services section within the Operations Department. Council levies a stormwater management levy and this funding source is used to improve the drainage system and the maintenance of Council’s drainage systems.
Community Objective The Stormwater Drainage asset class supports the long term objectives of our Community Strategic Plan through the following Themes;
Natural Environment – Our natural waterways and riparian areas are enhanced and protected.
Places, Spaces and Infrastructure - An improved standard of infrastructure that meets the community’s service level standards and Council’s obligations as the custodian or our community assets.
Leadership and Governance - Council rigorously manages its financial resources and assets to maximise delivery of services.
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Stormwater Drainage Available data Council’s stormwater drainage data reported in Note 9a of Council’s Financial Statements 2013/2014, is based on the previous revaluation completed in 2010. Council conducted CCTV inspections on a small percentage of the drainage network as a representative sample to determine the overall condition of our stormwater drainage infrastructure. At present Council inspects drainage on a reactive basis or through customer requests. The data has been reviewed by a consultant who recommended that useful lives and unit rates be revised and this has been updated as part of the revaluation requirements 2015. Infrastructure Backlog Backlog $000 Backlog figure
Budget 2015/16 3,051
Projected 2016/17 2,570
Projected 2017/18 1,092
Projected 2018/19 1,031
Projected 2019/20
Projected 2020/21
Projected 2021/22
Projected 2022/23
492
306
137
77
Projected 2023/24
Projected 2024/25
28
0
Future Funding Allocation Capital $000 Renewal
Budget 2015/16
Projected 2016/17
Projected 2017/18
Projected 2018/19
Projected 2019/20
Projected 2020/21
Projected 2021/22
Projected 2022/23
Projected 2023/24
Projected 2024/25
2,229
2,886
3,890
2,477
2,962
2,615
2,602
2,498
2,491
2,543
New/upgrade
477
724
471
699
448
460
525
485
497
510
Maintenance
661
680
697
769
788
807
826
846
866
887
The tables above show the projected capital and maintenance expenditure and the backlog figures for these assets. The projected backlog figures are based on the revised figures from the consultant.
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Service level expectations The community consultation identified our stormwater drainage assets as a priority and supported reducing funding gaps to improve the condition of these assets. The communityâ&#x20AC;&#x2122;s high expectation of our stormwater drainage influences the investment in capital and operational funding.
Future directions Council will continue to review operational and capital expenditure and where necessary reallocate funding to ensure these assets are maintained to community expectations and the infrastructure backlog is reduced. The independent consultant also recommended that Council continue to monitor asset condition utilising cost effective measures where possible and that CCTV inspections should only be used where there is an identified problem or when other methods of assessment are not practical.
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Recreational Facilities The Recreational Facilities asset class comprises of all assets within our sports fields, parks and bushland locations. Asset groups within these areas include ovals, golf courses, playgrounds, playing courts, walking tracks and fire trails. The assets are maintained by the Open Space Section within the Operations Department. The recreational facilities asset register is contained within a coporate assets system and technical and finanical asset imformation is integrated in this system.
Community Objective The Recreational Facilities asset class supports the long-term objectives of our Community Strategic Plan through the following Themes;
Community, People and Culture – A community that embraces healthier lifestyle choices and practices
Natural Environment - A community addressing and responding to the impacts of climate change and extreme weather events.
Places, Spaces and Infrastructure - Recreation, sporting and leisure facilities are available to meet the community’s diverse and changing needs - An improved standard of infrastructure that meets the community’s service level standards and Council’s obligations as the custodian or our community assets.
Local Economy and Employment - Our centres offer a broad range of shops and services and contain lively urban village spaces and places where people can live, work, shop, meet and spend leisure time
Leadership and Governance - Council rigorously manages its financial resources and assets to maximise delivery of services
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Recreational Facilities Available data The recreational facilities asset data reported in Note 9a of Councilâ&#x20AC;&#x2122;s Financial Statements 2013/2014, is based on the revaluation completed in 2014 as part of the import into the new corporate system. The data has been reviewed by a consultant who determined that the asset register was well established and recommended that condition assessments continue on an ongoing basis. Future infrastructure backlog Backlog $000
Budget 2015/16
Backlog figure
3,719
Projected 2016/17 2,226
Projected 2017/18 129
Projected 2018/19 267
Projected 2019/20
Projected 2020/21
Projected 2021/22
Projected 2022/23
77
355
256
48
Projected 2023/24
Projected 2024/25
27
0
Future funding allocations Capital $000
Budget 2015/16
Projected 2016/17
Projected 2017/18
Projected 2018/19
Projected 2019/20
Projected 2020/21
Projected 2021/22
Projected 2022/23
Projected 2023/24
Projected 2024/25
Renewal
5,079
5,424
6,380
4,936
5,510
5,369
5,859
5,983
5,813
6,082
New/upgrade
9,128
13,255
29,818
9,242
12,344
4,231
570
643
2,279
431
Maintenance
6,360
6,544
6,702
7,401
7,579
7,761
7,947
8,138
8,333
8,533
The tables above show the projected capital and maintenance expenditure and the backlog figures for these assets. The projected backlog figures are based on the revised figures from the consultant.
Service level expectations Community consultation identified the sports field and playground assets as having moderate importance to our community. The level of support to reduce the funding gap was also moderate. The community considered bushland infrastructure to be of low priority.
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The communityâ&#x20AC;&#x2122;s high expectation of our sport fields, playgrounds and golf courses influences the investment in capital and operational funding.
Future directions Council will continue to review operational and capital expenditure and where necessary reallocate funding to ensure these assets are maintained to community expectations and the infrastructure backlog is reduced. Council will continue to undertake condition assessments and ensure that the asset register is updated on a regular basis.
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How will we get there? The Asset Management Strategy proposes the following strategies to enable the objectives of the Community Strategic Plan to be achieved. No
Strategy
Desired Outcome
1
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
Update Long Term Financial Plan to incorporate asset management Strategy expenditure projections.
Funding model to provide Council services.
4
Review and update asset management plans and long term financial plans after Council and the community are aware of changes to service adoption of annual budgets. Communicate any consequence of funding levels and costs arising from budget decisions. decisions on service levels and service risks.
5
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.
6
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.
7
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.
8
Ensure responsibilities for asset management are identified
Responsibility for asset management is defined.
9
Implement an Improvement Plan to realise ‘core’ maturity for the financial and asset management competencies within 2 years.
Improved financial and asset management capacity within Council.
10
Report to Council 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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Our options - Scenario planning Scenario 1 - Fit for the future (F4F) base case scenario with additional funding for infrastructure renewal This scenario assumes a new funding strategy for infrastructure assets renewal. All additional funds generated from loan funds will be allocated into Council’s renewal program for infrastructure assets. The new funding strategy was adopted by Council following the results of a recent independent review on all Infrastructure assets. The independent review assessed Councils asset and financial data to ensure a consistent organisational approach to infrastructure reporting. The review included an assessment of asset condition by asset class, Council’s methodology to determine cost to bring assets to a satisfactory condition, actual asset maintenance compared to required asset maintenance, current assets renewals and required assets renewal. Based on the revised condition assessment of Council’s infrastructure assets (i.e. buildings and roads) and the application of a new backlog methodology, the current backlog on infrastructure assets has been assessed at $32.7 million with a backlog ratio of 6.4% for 2014/15. The review also identified that Council had an annual shortfall of funding for assets renewal. If this shortfall is not addressed it is likely that the infrastructure backlog will continue to increase in future years. In addition, adequate funding needs to be directed towards assets maintenance. As a result of the infrastructure assets review Council further considered funding strategies that prioritises asset maintenance and renewal expenditure over new and upgraded assets expenditure. Council previously resolved to fund the relocation of staff into a new Administration Building (Service Relocation Project) through asset sales. The proceeds from asset sales will discharge the current loan obtained to fund the Services Relocation Project, and under the new funding strategy an equivalent amount of loan funds will be drawn for the purpose of asset renewal. The infrastructure loan funds will be used solely on the assets renewal program and will have an identified repayment source as described in Council’s adopted Long term Financial Plan.
Scenario 2 - Scenario without additional funding for infrastructure renewal This scenario represents a continuation of the current level of funding and expenditure. The funding strategy under this scenario assumes no additional funding is available for asset renewal. With insufficient asset renewal funding, over time, the infrastructure renewal backlog would increase and the condition of our infrastructure assets will deteriorate, impacting negatively on overall amenity and quality of life in Ku-ring-gai. Further this would unfairly defer or shift the financial burden for renewing assets to future generations. Asset Management Strategy 2015/16 – 2024/25
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Asset Management Improvement Plan To ensure the Asset Management Strategy is implemented effectively and efficiently, an Improvement Plan has been prepared. The actions required to undertake improvement of Council’s asset management capabilities are impacted by both internal and external influences and require resources or enablers. These enablers can be in the areas of people, processes, technology and information and data. The Improvement Plan prioritises specific capability areas which were identified through a gap analysis process, and where action is required to raise Council’s asset management capacity to the desired level of maturity. Implementation of these improvements requires resourcing and monitoring. The actions have been integrated into Council’s Delivery Program to ensure ongoing resourcing, implementation and performance monitoring.
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Roads and Transport Quality Elements
Action Item
Processes and Practices
Assets and procedures for cost and risk assessment documented.
Objectives
Timeframe
Responsible Officer
Ongoing
Director Operations Risk Management Coordinator
Review of processes and practices Continual maintenance of procedures Data and Knowledge
Improve data knowledge
Continue to develop data collection procedure and program for all assets
Ongoing
Consultant to assess the condition of all 2015/2016 road surface and pavement assets Inspect all road structures and street furniture assets and update in register
2015/2016
Director Operations Pavement Engineer Building Assets Coordinator and Team Leader Design and Projects Manager Engineering Services
2015/2016 Inspect all other assets on an ongoing Update Asset Management Plan
2015/2016
Director Operations Strategic Asset Coordinator Pavement Engineer
Transfer data to corporate system
2014/2015
Business System Analyst
People and Understanding of road asset Organisational Issues management
Provide staff training for all facets of road asset management
Ongoing
Director Operations Strategic Asset Coordinator
Implementation Tactics Outline of required road asset management activities
Review core and non-core activities
2015/2016
AMSG
Asset Management Plans
Asset Information Systems
Advanced asset management plans
Corporate Asset Management System
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Strategy and planning Advanced maintenance and renewal Develop advanced asset renewal and plans maintenance plans.
2015/2016
Director Operations Manager IP & R & Assets
2015/2016
Strategic Asset Coordinator
Life cycle cost analysis
Improve life cycle cost data knowledge
Service level review
Review and update service levels for each asset class
Quality Elements
Action Item
Objectives
Timeframe
Responsible Officer
Processes and Practices
Implement and/or improve building asset management processes
Review of processes and practices
(ongoing)
Director Operations Manager Engineering Services Manager IP & R & Assets
Civil Works Coordinator and Pavement Engineer
Buildings
Assets and procedures for cost and risk documented Data and Knowledge
C ti l database i t f Complete of assets
Asset Management Plans
Asset Information Systems
d
Develop an asset register that captures 2015/2016 all building components
Building Assets Coordinator
Advanced AMP
Update Asset Management Plan
2015/2016
Director Operations Strategic Asset Coordinator Building Assets Coordinator
Asset register
Update all asset components and assign
2015/2016
Engineering Services Coordinator
Transfer data to works and assets
Values, useful lives and conditions.
2015/2016
Business Systems Analyst
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People and Organisational Issues
Understanding of building asset management
Provide staff training for all facets of building asset management
Commenced (annually)
Director Operations
Manager Engineering Services Asset performance register
Review and measure asset
Implementation Tactics Outline of required building asset management activities
Review core and non-core activities
2015/2016
AMSG
Strategy and planning
Advanced maintenance and renewal plans
Develop advanced asset renewal and maintenance plans.
2015/2016
Building Assets Coordinator
life cycle costs analysis Service level review
Improve required life cycle costs
2015/2016
Manager IP & R & Assets Strategic Asset Coordinator Review and update all service levels Manager Engineering Services
Drainage Quality Elements
Action Item
Objectives
Processes and Practices
Implement and/or improve drainage asset management processes
Review of processes and practices
Timeframe
Responsible Officer
2015/2016
Strategic Asset Coordinator
Continual maintenance of procedures Data and Knowledge
Complete database of assets
Advanced Drainage AMP Asset Management Plans (AMP)
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Ongoing Ongoing development of data collection Ongoing procedure and program. Review useful lives, condition and capacity Update Asset Management Plan 2015/2016
Director Operations Strategic Asset Coordinator Drainage Engineer Director Operations Director Operations Strategic Asset Coordinator Drainage Assets Engineer
44
Asset Information Systems
Corporate asset management system Update data into corporate system
2016/2017
Business Systems Analyst
People and Organisational Issues
Understanding of drainage asset management
Ongoing
Director Operations Strategic Asset Coordinator
Review core and non-core activities
Annually Ongoing
Manager Engineering Director Operations
Develop advanced asset renewal and maintenance plans.
2015/2016
Director Operations Manager IP & R & Assets
Asset performance register Implementation Tactics Outline of required drainage asset management activities Strategy and planning
Advanced maintenance and renewal plans
Provide staff training for all facets of drainage asset management
Life cycle cost analysis
Strategic Asset Coordinator update required life cycle costs
Service levels
Drainage Assets Engineer
Recreational Facilities Quality Elements
Action Item
Processes and Practices
Objectives
Timeframe
Responsible Officer
Implement and/or improve recreational Review of processes and practices asset management processes
Ongoing
Strategic Asset Coordinator
Continual maintenance of procedures
Ongoing
Open Space Manager Asset Management Plans
Advanced RFAMP
Update Asset Management Plan
2015/2016
People and Organisational Issues
Asset performance register
Review and measure asset performance
Annually
Strategic Asset Officer Open Space Asset Supervisor Manager Open Space Operations
Training Ongoing support and training for asset procedures
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Strategic Asset Coordinator
45
Implementation Tactics Outline of required parks and recreation asset management activities Strategy and planning Advanced maintenance and renewal plans
Review core and non-core activities
Annually
Develop advanced asset renewal and maintenance plans.
2015/2016
Life cycle cost analysis
Improve life cycle costs
Service levels
Update service levels
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Manager Open Space Operations Manager Open Space Operations Strategic Asset Coordinator
46
Reporting and Assessment - Measuring our performance The approach to assessing performance in relation to asset planning and measurement will be both quantitative and qualitative. Councilâ&#x20AC;&#x2122;s Integrated Planning and Reporting processes form the core of our continuous improvement programs and are embedded within the organisation. The development of critical actions, tasks and key performance measures relating to the delivery of infrastructure asset programs are contained in the Delivery Program and annual Operational Plan, and subsequent reporting is conducted quarterly, bi-annually and annually to ensure progress and/or achievements are measured and reported. Reporting on these indicators is the responsibility of all Asset Managers who have control of specific asset classes. Regular periodic surveys with the community, gauging perceptions between satisfaction of built asset classes and services being provided will be required. The ongoing use of community surveys will be tailored to include specific asset management issues to ensure relevance of the programs at the required levels of service continue.
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Conclusion Whilst significant work has been undertaken in providing more consistent asset management planning, continued diligence is required to allow ongoing improvements for all infrastructure assets under the Councilâ&#x20AC;&#x2122;s control and management. This strategy, together with asset managers, custodians, staff and the community will allow a continued progression toward service excellence. Management techniques drawing on the financial, risk, environmental and social drivers will assist in providing an improved asset management performance by enabling Council to work with the community to ensure operations are better understood. Although adopted as a 10year Asset Management Strategy, annual revisions of the Strategy are carried out to ensure relevance in responding to government and our community. Specifically, with the review of the Community Strategic Plan, the development of each new Delivery Program and Resourcing Strategy every four years we need to ensure what we provide aligns with community objectives and priorities, and that the community understands the implications of these directions.
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Appendix A Asset Management Policy 2014 http://www.kmc.nsw.gov.au/files/9ba61f06-60f7-4131-ab28-a15000e056fb/Asset_Management_Policy.pdf
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June 2015