Asset Management Plan - Weddin Shire · The Asset Management Plan in conjunction with Long Term Financial Plan and the Community Plan are the tools by which Council assesses the long

WEDDIN SHIRE COUNCIL – ROADS AND TRANSPORT ASSET MANAGEMENT PLAN

Weddin Shire Council

Roads and Transport

Asset Management Plan

Version 5

May 2017

Adopted 15 June 2017

WEDDIN SHIRE COUNCIL –ROADS AND TRANSPORT ASSET MANAGEMENT PLAN

Document ControlAsset Management for Small, Rural or Remote Communities

Document ID: wsc_am4srrc transport_120228_s1v1.doc

Rev No Date Revision Details Author Reviewer Approver

1.0 29/3/2012 Version 1 – Draft for Comment CL, JR,

JH, AM

MN

2.0 17/5/2012 Version 2- Adopted Council

3.0 13/5/2013 Version 3 – Review MN

4.0 14/5/2015 Reviewed MN

5.0 Version 5 – Review MN

Dec 2015 Next Review - Comprehensive

Asset Management for Small, Rural or Remote Communities Practice Note

The Institute of Public Works Engineering Australia.

www.ipwea.org.au/AM4SRRC

© Copyright 2011 – All rights reserved.

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WEDDIN SHIRE COUNCIL – ROADS AND TRANSPORT ASSET MANAGEMENT PLAN

TABLE OF CONTENTS

1. EXECUTIVE SUMMARY .................................................................................................................................. iii2. INTRODUCTION.............................................................................................................................................. 1

2.1 Background ........................................................................................................................................... 12.2 Goals and Objectives of Asset Management ........................................................................................ 12.3 Plan Framework .................................................................................................................................... 32.4 Core and Advanced Asset Management ............................................................................................... 42.5 Community Consultation ...................................................................................................................... 4

3. LEVELS OF SERVICE ........................................................................................................................................ 43.1 Customer Research and Expectations................................................................................................... 43.2 Legislative Requirements ...................................................................................................................... 43.3 Current Levels of Service....................................................................................................................... 53.4 Desired Levels of Service..................................................................................................................... 12

4. FUTURE DEMAND ........................................................................................................................................ 134.1 Demand Forecast ................................................................................................................................ 134.2 Changes in Technology........................................................................................................................ 134.3 Demand Management Plan ................................................................................................................ 144.4 New Assets for Growth ....................................................................................................................... 15

5. LIFECYCLE MANAGEMENT PLAN.................................................................................................................. 165.1 Background Data................................................................................................................................. 165.2 Risk Management Plan........................................................................................................................ 195.3 Routine Maintenance Plan.................................................................................................................. 195.4 Renewal/Replacement Plan ................................................................................................................ 215.5 Creation/Acquisition/Upgrade Plan .................................................................................................... 245.6 Disposal Plan ....................................................................................................................................... 26

6. FINANCIAL SUMMARY ................................................................................................................................. 266.1 Financial Statements and Projections ................................................................................................. 266.2 Funding Strategy ................................................................................................................................. 346.3 Valuation Forecasts............................................................................................................................. 346.4 Key Assumptions made in Financial Forecasts.................................................................................... 37

7. ASSET MANAGEMENT PRACTICES ............................................................................................................... 387.1 Accounting/Financial Systems............................................................................................................. 387.2 Asset Management Systems ............................................................................................................... 387.3 Information Flow Requirements and Processes ................................................................................. 397.4 Standards and Guidelines ................................................................................................................... 39

8. PLAN IMPROVEMENT AND MONITORING ................................................................................................... 408.1 Performance Measures....................................................................................................................... 408.2 Improvement Plan............................................................................................................................... 408.3 Monitoring and Review Procedures.................................................................................................... 41

REFERENCES.......................................................................................................................................................... 42APPENDICES.......................................................................................................................................................... 43

Appendix A Planned Expenditures (From Long Term Financial Plan)............................................................. 44Appendix B Projected 10 year Capital Renewal Works Program ................................................................... 45Appendix C Planned Upgrade/Exp/New 10 year Capital Works Program...................................................... 51Appendix D Alternate Ratio Calculations ....................................................................................................... 54Appendix E Abbreviations ............................................................................................................................... 54Appendix F Glossary ....................................................................................................................................... 55

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1. EXECUTIVE SUMMARY

Context

Weddin Shire Council is based in Grenfell which is inthe Central West Region of New South Wales withintwo hours' drive of Orange, Canberra, Wagga Waggaand Dubbo. The Council has a strong service emphasisand is held in high regard by the community. Councilsupports its strong agricultural base by providing forlarge-lot residential development and assisting lightindustrial developments.

Roads and Transport Infrastructure

The roads and transport assets (depreciable assets)under control of the Council have a total replacementvalue of $106 M, which excludes the value forearthworks/formations.

What does it Cost?

The projected cost to provide the services covered bythis Asset Management Plan includes operations,maintenance, renewal and upgrade of existing assetsover the 10 year planning period is $30,403,000 or$3,040,000 per year.

Council’s estimated available funding for this period is$34,216,000 or $3,422,000 per year which is 113% ofthe cost to provide the service. This is an additionalfunding shortfall of 381,000 per year.

Councils’ present funding levels are sufficient tocontinue to provide existing services at current levelsin the medium term.

What we will do

Council will continue to provide road and transportservices for the following:

Operation, maintenance, renewal of road andtransport assets to meet service levels set by theCouncil in annual budgets and the long termfinancial plan.

Managing the Risks

There are risks associated with providing the serviceand not being able to complete all identified activitiesand projects. We have identified major risks as:

Highly variable and unpredictable extremeweather events, and the impact this will have ontransport assets. What seemingly is a manageableposition can change very quickly.

The dependence on grants from other tiers ofgovernment.

We will endeavour to manage these risks withinavailable funding by:

Manage the existing infrastructure

Manage the expansion of any transportinfrastructure based on the priorities establishedin the Community Plan

Expand transport infrastructure in a financiallyresponsible manner and as funded in Council’sLong Term Financial Plan.

Seek additional funding in the form of grantswherever possible.

The Next Steps

The actions resulting from this asset management planare:

Continue to improve asset information andknowledge.

Develop a single corporate asset register forfinancial and reporting purposes

Monitor the provision of roads and transportinfrastructure alongside the communityexpectations for roads as expressed in the WeddinShire Community Plan.

Questions you may have

What is this plan about?

This asset management plan covers the infrastructureassets that serve the Weddin Community’s roads andtransport needs. These assets include sealed, graveland formed road network, bridges & culverts,footpaths, kerbs & gutters and traffic facilitiesthroughout the Council area that enable services to beprovided to the community.

What is an Asset Management Plan?

Asset management planning is a comprehensiveprocess to ensure delivery of services frominfrastructure is provided in a financially sustainablemanner.

An asset management plan details information aboutinfrastructure assets including actions required toprovide an agreed level of service in the most costeffective manner. The Plan defines the services to beprovided, how the services are provided and whatfunds are required to provide the services.

What options do we have?

As Council has sufficient funding to maintain, renewand improve the assets to current level of service,Council will look in to the improve levels of serviceprovided to the community. Council will do acommunity survey and a technical investigation to seewhat assets need immediate improvement in levels ofservice.

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What can we do?

Council can develop options and priorities for futureroads and transport services with costs of providingthe services, consult with the community to planfuture services to match the community servicesneeds with ability to pay for services and maximisebenefit to the community for costs to the community.

What can you do?

Council will be pleased to consider your thoughts onthe issues raised in this asset management plan andsuggestions on how Council may change or reduce itstransport services mix to ensure that the appropriatelevel of service can be provided to the communitywithin available funding.

.

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2. INTRODUCTION

2.1 Background

This asset management plan is to demonstrate responsive management of assets (and services provided from assets),compliance with regulatory requirements, and to communicate funding needed to provide the required levels ofservice.

The asset management plan is to be read with Council’s Asset Management Policy, Asset Management Strategy andthe following associated planning documents:

Weddin Shire Council Community Strategic Plan

Weddin Shire Council Operational Plan

Council Budget Estimates

This infrastructure assets covered by this asset management plan are shown in Table 2.1.Table 2.1: Depreciable Assets covered by this Plan

Asset Sub-Category Asset Register Replacement Cost Depreciated Replacement Cost

Roads - Surface (Seal) $23,259,430 $19,333,487

Roads – Base* $41,273,550 $30,016,720

Bridges $4,897,326 $4,083,599

Culverts $25,078,393 $18,995,656

Causeway/Floodway $1,978,797 $1,335,082

Traffic Facilities $1,748,906 $920,971

Footpaths $1,116,679 $646,237

Kerb and Gutter $5,906,114 $3,994,098

TOTAL $84,359,195 $79,325,850

* It is assumed that only the regional roads have sub bases and they are considered non-depreciable. The other non-depreciable assets such as earthworks and table drains are also not included in this table. The figures are estimatedfor 30 June 2015.

2.2 Goals and Objectives of Asset Management

The Council exists to provide services to its community. Some of these services are provided by infrastructure assets.Council has acquired infrastructure assets by ‘purchase’, by contract, construction by Council staff and by donation ofassets constructed by developers and others to meet increased levels of service.

Council’s goal in managing infrastructure assets is to meet the required level of service in the most cost effectivemanner for present and future consumers. The key elements of infrastructure asset management are:

Taking a life cycle approach,

Developing cost-effective management strategies for the long term,

Providing a defined level of service and monitoring performance,

Understanding and meeting the demands of growth through demand management and infrastructureinvestment,

Managing risks associated with asset failures,

Sustainable use of physical resources,

Continuous improvement in asset management practices.1

The goal of this asset management plan is to:

Document the services/service levels to be provided and the costs of providing the service,

1 IPWEA, 2006, IIMM Sec 1.1.3, p 1.3.

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Communicate the consequences for service levels and risk, where desired funding is not available, and

Provide information to assist decision makers in trading off service levels, costs and risks to provideservices in a financially sustainable manner.

Council’s overarching community objective is:To grow our total resident population to in excess of 4,700 people by 2023

Council’scommunity vision is:In 2023 Weddin Shire will be:

A progressive rural locality with a vibrant and welcoming community, rich in both heritage and the naturalenvironment, with a diverse and resilient economy that supports local employment.

Council’sstrategic objectives are:To attain our overarching objective of population growth we will work together on achieving the following strategicobjectives, listed in priority order:

1. Strong, diverse and resilient local economy (Economic)2. Healthy, safe, and educated community (Social)3. Democratic and engaged community (Civil Leadership)4. Culturally rich, vibrant and inclusive community (Social)5. Cared for natural, agricultural and built environments (Environment)6. Well maintained and improving Shire assets and service (Economic)

Relevant strategic objectives and strategies and how these are addressed in this asset management plan are shown inTable 2.2.

Table 2.2: Organisation Goals and how these are addressed in this Plan

Strategic Objective Strategy How Goal and Objectives are addressed in AMP

Democratic andengagedcommunity (CivilLeadership)

Fully implement theintegrated planning andreporting process(Co-ordinate strategic/longterm planning, providesound financial planningand reporting)

The Asset Management Plan in conjunction with Long TermFinancial Plan and the Community Plan are the tools bywhich Council assesses the long term financial sustainabilityof Council’s infrastructure assets. Planning long termsustainable infrastructure is important to enable

- the appropriate resources to be identified andprovided.

- Council to meet its statutory Council governance.

Strong, diverseand resilient localeconomy

Maintain a strong andprogressive agriculturalsector (progressiveupgrade of roads),provide infrastructuresto support businessactivity (main streetupgrade/renewal)

The Roads and Transport Asset Management Plan is aformalised and structured way for Council to communicateand set strategies for the provision of transportinfrastructure for the community.

Asset management principles are used to assess thetransport infrastructure assets managed by Council and theimplementation of works programs are linked to achievingthe corporate objectives and service levels targets.

Compliance with regulations is a principle theme of theasset planning process, and is considered in the context ofQuality, Function and Safety (Risk).

Well maintained &improving Shireassets and services

Maintain and improveCouncil’s transportinfrastructure (roads,bridges, footpaths)

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A Road Map for preparing an asset Management Plan is shown below.

Source: IPWEA, 2006, IIMM, Fig 1.5.1, p 1.11.

2.3 Plan Framework

Key elements of the plan are

Levels of service – specifies the services and levels of service to be provided by council.

Future demand – how this will impact on future service delivery and how this is to be met.

Life cycle management – how the organisation will manage its existing and future assets to provide therequired services

Financial summary – what funds are required to provide the required services.

Asset management practices

Monitoring – how the plan will be monitored to ensure it is meeting the organisation’s objectives.

Asset management improvement plan

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2.4 Core and Advanced Asset Management

This asset management plan is prepared as a first cut ‘core’ asset management plan in accordance with theInternational Infrastructure Management Manual2. It is prepared to meet minimum legislative and organisationalrequirements for sustainable service delivery and long term financial planning and reporting. Core asset managementis a ‘top down’ approach where analysis is applied at the ‘system’ or ‘network’ level.

2.5 Community Consultation

This ‘core’ asset management plan is prepared to facilitate community consultation initially through feedback onpublic display of draft asset management plans prior to adoption by Council. Future revisions of the assetmanagement plan will incorporate community consultation on service levels and costs of providing the service. Thiswill assist Council and the community in matching the level of service needed by the community, service risks andconsequences with the community’s ability to pay for the service.

3. LEVELS OF SERVICE

3.1 Customer Research and Expectations

Council has not carried out any research on customer expectations. This will be investigated for future updates of theasset management plan.

3.2 Legislative Requirements

Council has to meet many legislative requirements including Australian and State legislation and State regulations.Relevant legislation is shown in Table 3.2.

Table 3.2: Legislative Requirements

Legislation Requirement

Local Government Act Sets out role, purpose, responsibilities and powers of local governmentsincluding the preparation of a long term financial plan supported by assetmanagement plans for sustainable service delivery.

Roads Act 1997 To provide public access to roads, to classify roads, to act as the local roadauthority, to carry out certain functions e.g. road works and to regulateactivities on public roads.

Work Health, Safety and WelfareAct & Regulations

Sets out roles and responsibilities to secure the health, safety and welfareof persons at work.

Native Vegetation Act To manage native vegetation, to prevent broad scale clearing, to protectnative vegetation, to improve native vegetation and to encouragerevegetation of land.

AS 1742 (Traffic)

Australian Road Rules To ensure compliance and uniformity with road rules in the State andelsewhere in Australia

The Australian AccountingStandards

The Australian Accounting Standards Section 27 (AAS27) requires thatassets be valued, and reported in the annual accounts, which also includesdepreciation value (i.e. how fast are these assets wearing out).

2IPWEA, 2006.

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Legislation Requirement

Environmental Planning andAssessment Act 1979

Sets out guild lines for land use planning and promotes sharing ofresponsibilities between various levels of government in the state.

Environmental Planning andAssessment Amendment Act 2008

Sets out guidelines for land use planning and promotes sharing ofresponsibilities between various levels of government in the state.

Protection of the EnvironmentOperations Act 1997

Sets out Council responsibility and powers of local area environment and itsplanning functions.

3.3 Current Levels of Service

Council has defined service levels in two terms.

Community Levels of Service relate to the service outcomes that the community wants in terms of safety, quality,quantity, reliability, responsiveness, cost effectiveness and legislative compliance.

Community levels of service measures used in the asset management plan are:

Quality How good is the service?Function Does it meet users’ needs?Safety Is the service safe?

Technical Levels of Service - Supporting the community service levels are operational or technical measures ofperformance. These technical measures relate to the allocation of resources to service activities that the councilundertakes to best achieve the desired community outcomes.

Technical service measures are linked to annual budgets covering:

Operations – the regular activities to provide services such as opening hours, cleansing frequency, mowingfrequency, etc.

Maintenance – the activities necessary to retain an assets as near as practicable to its original condition (egroad patching, unsealed road grading, building and structure repairs),

Renewal – the activities that return the service capability of an asset up to that which it had originally (egfrequency and cost of road resurfacing and pavement reconstruction, pipeline replacement and buildingcomponent replacement),

Upgrade – the activities to provide an higher level of service (eg widening a road, sealing an unsealed road,replacing a pipeline with a larger size) or a new service that did not exist previously (eg a new library).

Council’s current service levels are detailed in Tables 3.3.1, 3.3.2, 3.3.3, 3.3.4 and 3.3.5.

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Table 3.3.1: Current Service Levels for Sealed Roads

KeyPerformance

Measure

Level of ServiceObjective

PerformanceMeasure Process

Desired Level ofService

Current Level of Service

(2010)

COMMUNITY LEVELS OF SERVICE

Quality Rideability Customer servicerequests relating torideabilityCustomer SurveysCommunity Planning

To be determined

12 (2010) service requestsreceived for pothole/edgepatching, restoring tabledrain

Function Meets usersrequirements for

-road width

-accessibility

-traffic control

Customer servicerequests for functionCustomer SurveysCommunity Planning

To be determined

Nil (2010)

Safety Roads are safe Number of InjuryAccidents (AccidentHistory/Reports)

To be determined Nil (2010)

TECHNICAL LEVELS OF SERVICE

Operations Street cleaning

InspectionsManagementSystems

CustomerSurveys/RequestsCommunity Planning

(Frequencies)

Requires furtherassessment toidentify anddeterminewhether basicservice levelexpectations beingmet

Street SweepingUrban Town - 4 times/ yr.Rural Town -2 times/ yr.Inspections, ManagementSystems - Require furtherassessment to identify anddetermine whether basicservice level expectationsbeing met

Budget To be determined Street SweepingUrban & Rural - $18,000Street LightingUrban & Rural - $68,000OtherTotal $190,000 p.a (average)

Maintenance Remove Hazards Respond toComplaints/requests

RegularInspectionsPlannedMaintenance

Reactive Maintenance tolimit to budget

Budget Identified andfunded in LTFP

$684,000 p.a (average)

Renewal Reseals Frequency The works programand LTFP havebeen developed todeliver asatisfactory servicestandard.Verification andimprovement of

Regional Roads 30 yrs.Local Roads 30 yrs.

Condition of sealedpavements

6.7% with condition 4 or 5Note: The works programand LTFP have beendeveloped to deliver asatisfactory service standard.Verification and

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useful lives forvaluationpurposes,matching theseactual servicesstandards willassist to improvefinancial reportingand planning

improvement of useful livesfor valuation purposes,matching these actualservices standards will assistto improve financialreporting and planning

Budget ResealsPavementRenewalsOtherTotal



$1053,000 p.a (average)

Upgrade/New Provide Services in acost effectivemanner

Cost, CorporateStrategy

Achieved by acombination ofCouncil and grantfunded works

Achieved by a combination ofCouncil and grant fundedworks



Note: Grenfell Town streets swept four times a year (before Easter, Henry Lawson Festival, October Long Weekendand Christmas). Quandialla, Greenethorpe and Caragabal Streets are swept twice a year.

Table 3.3.2: Unsealed Roads

KeyPerformance

Measure






Quality Provide smooth allweather access

Customer servicerequests relating toroughnessCustomer SurveysCommunity Planning

To be determined 4.5/month average(2010)service requestsreceived for grading, patchgravelling, restoring tabledrains

Function Access is available atall times

Customer servicerequests relating tonon-accessCustomer SurveysCommunity Planning


Safety Roads are safe Number of InjuryAccidents (AccidentHistory/Reports)



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Operations Unsealed roadsmeet users’ needs

Annual condition &defects inspection

Requires further

assessment to

identify and

determine

whether basic

service level

expectations being

met

Requires further assessmentto identify and determinewhether basic service levelexpectations being met


$50,000

Maintenance MaintenanceGrading

Maintenance gradingfrequency

Requires further

assessment to

identify and

determine

whether basic

service level

expectations being

met

0.3/yr.

Cost effectiveness($/km)

$942/km (maintenancegrading of 6m wide and 1kmlong road)

Budget Requires furtherassessment toidentify anddeterminewhether basicservice levelexpectations beingmet

Reactive Main $200,000Planned MainTotal $200,000

Renewal Gravel Resheeting ResheetingFrequency

The works programand LTFP havebeen developed todeliver asatisfactory servicestandard.Verification andimprovement ofuseful lives forvaluationpurposes,matching theseactual servicesstandards willassist to improvefinancial reportingand planning

32 yrs. The works programand LTFP have beendeveloped to deliver asatisfactory service standard.Verification andimprovement of useful livesfor valuation purposes,matching these actualservices standards will assistto improve financialreporting and planning

Cost effectiveness ofresheets ($/km oflength treated)

$10,353 (6m wide and 1kmlong)



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Upgrade/New Provide Services in acost effectivemanner





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Table 3.3.3: Bridges and Culverts (Bridges, Culverts and Causeways/Floodways)

KeyPerformance

Measure






Quality Well MaintainedBridges/Culverts/Causeways/Floodway

Customer servicerequestsCustomer SurveysCommunity Planning

To be determined To be determined

Function Operating at itsoptimum capacityduring flooding



Safety Bridges and Culvertsare free fromhazards

Number of InjuryAccidents (AccidentHistory/Reports



Operations Infrastructure meetsusers’ needs


Requires further

assessment to

identify and

determine

whether basic

service level

expectations being

met


Budget To be identified

Maintenance Remove Hazards Respond tocomplaints/requests


Reactive Maintenance tolimit of budget allocation


Renewal Asset is suitable forpurpose

Condition of theasset

The worksprogram and LTFPhave beendeveloped todeliver asatisfactory servicestandard.Verification andimprovement ofuseful lives for

The works program and LTFPhave been developed todeliver a satisfactory servicestandard. Verification andimprovement of useful livesfor valuation purposes,matching these actualservices standards will assistto improve financialreporting and planning

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valuationpurposes,matching theseactual servicesstandards willassist to improvefinancial reportingand planning


Upgrade Provide Services in acost effectivemanner



Achieved by a combinationof Council and grant fundedworks


Table 3.3.4: Footpaths

KeyPerformance

Measure






Quality Provide even surfacefor pedestrians


To be determined 3 (2010)service requestsreceived related to thecondition

Function Meets users’ needsfor accessibility


To be determined 0 (2010)

Safety Footpaths are safe Reported injuryincidents

To be determinedor Nil/ yr.

2 (2010) service requestsnotifying the incidentshappened by fall


Operations Footpaths meetusers’ needs


Requires furtherassessment toidentify anddeterminewhether basicservice levelexpectations beingmet


Maintenance Footpaths aresuitable for purpose

Respond tocomplaints/requests




Reactive Main $3,000Planned Main $0Total

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Renewal Footpaths aresuitable for purpose

Condition offootpaths

The works programand LTFP havebeen developed todeliver asatisfactory servicestandard.Verification andimprovement ofuseful lives forvaluationpurposes,matching theseactual servicesstandards willassist to improvefinancial reportingand planning

7.7% with condition 4 or 5.The works program and LTFPhave been developed todeliver a satisfactory servicestandard. Verification andimprovement of useful livesfor valuation purposes,matching these actualservices standards will assistto improve financialreporting and planning


$107,000 –Weddin/Camp/Church St -Over next 10 years

Upgrade/New Urban residentshave paved footpathaccess to shops andschools

No of urbandwellings withoutpaved footpathaccess to shops andschools





Table 3.3.5: Kerb and Gutter

KeyPerformance

Measure






Quality Provide roaddrainage andcollection system


To be determined 5 (2010)service requestsreceived for fixingstormwater issues

Function Meets users’ needsfor drainage control



Safety Kerbs are safe Reported injuryincidents



Operations K & G meet users’needs


Requires furtherassessment toidentify anddeterminewhether basicservice level


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expectations beingmet

Maintenance K & G are suitablefor purpose

Respond tocomplaints/requests



Cost effectiveness $130/m


Renewal K & G meets users’needs

Condition of K & G The works programand LTFP havebeen developed todeliver asatisfactory servicestandard.Verification andimprovement ofuseful lives forvaluationpurposes,matching theseactual servicesstandards willassist to improvefinancial reportingand planning

15.7% with condition 4 or 5.The works program and LTFPhave been developed todeliver a satisfactory servicestandard. Verification andimprovement of useful livesfor valuation purposes,matching these actualservices standards will assistto improve financialreporting and planning


Upgrade/New Urban (Grenfell)residents have K & Gat frontage

No of urbandwellings withoutK & G at frontage


Budget $30,000 p.a (average)

3.4 Desired Levels of Service

At present, indications of desired levels of service are obtained from various sources including residents’ feedback toCouncillors and staff, service requests and correspondence. Council has yet to quantify desired levels of service. Thiswill be done in future revisions of this asset management plan.

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4. FUTURE DEMAND

4.1 Demand Forecast

Factors affecting demand include population change, changes in demographics, seasonal factors, vehicle ownership,consumer preferences and expectations, economic factors, agricultural practices, environmental awareness, etc.

Demand factor trends and impacts on service delivery are summarised in Table 4.1.

Table 4.1: Demand Factors, Projections and Impact on Services

Demand factor Present position Projection Impact on services

Population 3,641 (30 June 2006) The overall population ofWeddin Shire Council isprojected to remainreasonably stable over thecourse of the planningperiod

The minimum projectedchange to overall populationfigures is expected to havelittle impact on the need forservices.

Demographics Children (0-11) - 595Young people (12-24) - 537Older people (55 years andover) - 995People with disabilities - 389

Slight shift towards agingpopulation

Increasing

Costs

The cost to construct, maintain

and renew infrastructure is

increasing at a rate greater

than council’s revenue

Anticipated to continue Increasingly difficult to

maintaining the current level

of service

Climate

Change

Higher frequency of extreme

weather events

Unknown, but changes

likely.

Major damage to road

infrastructure. Cannot be

anticipated or planned for.

Availability of disaster relief

funding to assist council will

be important.

Addition costs may be

imposed to fund

environmental initiatives e.g.

carbon tax

Road

Construction

Costs

Current costs Costs anticipated to

increase

The shortage of skilled labour,

high labour costs and

increasing material costs, and

availability of quality road

making materials will impact

on the future management of

roads

4.2 Changes in Technology

Technology changes forecast to affect the delivery of services covered by this plan are detailed in Table 4.2.

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Table 4.2: Changes in Technology and Forecast effect on Service Delivery

Technology Change Effect on Service Delivery

Change in road construction methods and the

materials used

May increase the life of road components, reducing the

susceptibility to damage, or by reducing the cost of

construction or maintenance

4.3 Demand Management Plan

Demand for new services will be managed through a combination of managing existing assets, upgrading of existingassets and providing new assets to meet demand and demand management. Demand management practices includenon-asset solutions, insuring against risks and managing failures.

Non-asset solutions focus on providing the required service without the need for the council to own the assets.Examples of non-asset solutions include providing services from existing infrastructure such as aquatic centres andlibraries that may be in another council area or public toilets provided in commercial premises.

Opportunities identified to date for demand management are shown in Table 4.3. Further opportunities will bedeveloped in future revisions of this asset management plan.

Table 4.3: Demand Management Plan Summary

Service Activity Demand Management Plan

Communicate options and

capacity to fund road

infrastructure with the

community

Monitor community expectations and communicate service levels and financial

capacity with the community to balance priorities for infrastructure with what the

community is prepared to pay for

Funding priority works Continue to seek grant funding for projects identified in the Community Plan and Asset

Management Plans

Improve understanding of

costs and capacity to

maintain current service

levels

Continue to analyse the cost of providing service and the capacity to fund at the

current level of service

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4.4 New Assets for Growth

The new assets required to meet growth will be acquired free of cost from land developments andconstructed/acquired by Council. The new contributed and constructed asset values are summarised in Figure 1.

Figure 1: New Assets for Growth

The additional new assets being created are being constructed by Council. There are no assets being generated bydevelopment and being donated to Council.

Council proposes to provide $492, 000 of additional assets in Year 1 of this Asset Management Plan. (Detailed inAppendix C).

Acquiring these new assets will commit council to fund ongoing operations and maintenance costs for the period thatthe service provided from the assets is required. These future costs are identified and considered in developingforecasts of future operations and maintenance costs.

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5. LIFECYCLE MANAGEMENT PLAN

The lifecycle management plan details how Council plans to manage and operate the assets at the agreed levels ofservice (defined in Section 3) while optimising life cycle costs.

5.1 Background Data

5.1.1 Physical parameters

The assets covered by this asset management plan are shown in Table 2.1.

The age profile of the assets include in this AM Plan is shown in Figure 2.

Figure 2: Asset Age Profile

The information basis for the roads and transport assets are:

Financial Valuations

Technical Inventory

Maintenance and Renewal Plans

5.1.2 Asset capacity and performance

Council’s services are generally provided to meet design standards where these are available.

Locations where deficiencies in service performance are known are detailed in Table 5.1.2.

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Table 5.1.2: Known Service Performance Deficiencies

Location Service Deficiency

In this first Asset Management Plandetailed performance deficiencieshave not been identified

In the development of next asset management plans, and in particular asthese plans are developed and integrated along with the Long Term FinancialPlans and Community Plans service deficiencies will be identified

5.1.3 Asset condition

The condition profile of the assets include in this AM Plan is shown in Figure 3.

Condition is measured using a 1 – 5 rating system3as detailed in Table 5.1.3.

Table 5.1.3: IIMM Description of Condition

Condition Rating Description - IIMM Council

1 Excellent condition: Only planned maintenance required. Very Good/Excellent

2 Very good: Minor maintenance required plus planned maintenance. Good

3 Good: Significant maintenance required. Fair

4 Fair: Significant renewal/upgrade required. Poor

5 Poor: Unserviceable. Very Poor

5.1.4 Asset valuations

The value of assets recorded in the asset register as at 30 June 2015 (estimation only) covered by this assetmanagement plan is shown below. Assets were last revalued at 30 June 2010. The next revaluation is due on 30 June2015.

3IIMM 2006, Appendix B, p B:1-3 (‘cyclic’ modified to ‘planned’, ‘average’ changed to ‘fair’’)

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Current Replacement Cost $ 105,586,000

Depreciable Amount $ 79,767,000

Depreciated Replacement Cost $ 79,497,000

Annual Depreciation Expense $ 1,247,000

Council’s sustainability reporting reports the rate of annual asset consumption and compares this to asset renewaland asset upgrade and expansion.

Asset Consumption 1.60%(Depreciation/Depreciable Amount)

Asset renewal 1.90%(Capital renewal exp/Depreciable amount)

Annual Upgrade/New 0.60%(Capital upgrade exp/Depreciable amount)

Annual Upgrade/New 0.60%(including contributed assets)

Council is currently renewing assets at 120.70% of the rate they are being consumed and increasing its asset stock by0.60% each year.

To provide services in a financially sustainable manner, Council will need to ensure that it is renewing assets at therate they are being consumed over the medium-long term and funding the life cycle costs for all new assets andservices in its long term financial plan.

5.1.5 Asset hierarchy

An asset hierarchy provides a framework for structuring data in an information system to assist in collection of data,reporting information and making decisions. The hierarchy includes the asset class and component used for assetplanning and financial reporting and service level hierarchy used for service planning and delivery.

Council’s service hierarchy is shown is Table 5.1.5.

Table 5.1.5: Asset Service Hierarchy

Service Hierarchy Roads, Bridges & Culverts and

Traffic Facilities FootpathsKerbs &Gutters

1 State Highways CBD CBD

2 Main Roads (Regional) High Volume - Residential Residential

3 Residential Streets Medium Volume -

Residential

Rural

4 Collector Roads Low Volume - Residential

5 Local Roads-Sealed Rural

6 Local Roads-Unsealed

7 Local Roads-Formed

8 Local Roads-Unformed

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5.2 Risk Management Plan

An assessment of risks4 associated with service delivery from infrastructure assets has identified critical risks that willresult in loss or reduction in service from infrastructure assets or a ‘financial shock’ to the organisation. The riskassessment process identifies credible risks, the likelihood of the risk event occurring, the consequences should theevent occur, develops a risk rating, evaluates the risk and develops a risk treatment plan for non-acceptable risks.

Critical risks, being those assessed as ‘Very High’ - requiring immediate corrective action and ‘High’ – requiringprioritised corrective action identified in the Infrastructure Risk Management Plan are summarised in Table 5.2.

Table 5.2: Critical Risks and Treatment Plans

Service or Asset atRisk

What can Happen RiskRating(VH, H)

Risk Treatment Plan Associated Costs

Kerb and Gutter Subsidence andponding causingpavement damage,aquaplaning,mosquito breedingenvironment, trip andcycling hazards.

High Develop defect rectificationprogramme and kerb defectregister. Complete risk assessmentof all condition 5 kerb and highpriority defects.

Ongoing staff time

Unsealed Roads Roughness,corrugation, potholesand gravel losscausing lower travelspeed and increasedrisk of traffic crashes.They will also causehigher road user costsand discomfort.

High Determine and apply optimalmaintenance strategies.Formalise inspection andmaintenance programme

Ongoing staff time

Sealed Roads Weaker sub-base andbase causingpavement damageand reducingpavement life

High Inspect regularly and apply reactiveand proactive maintenance workswithin budget constraint.Investigate frequently occurringfailures

Ongoing staff time

Sealed Roads andUnsealed Roads

Inadequate hydrauliccapacity and low levelapproach roads

High Install a prioritised rollingprogramme of requiredmaintenance works; ensure thebudget is adequate to meet themaintenance requirement of theasset.

Ongoing staff time

5.3 Routine Maintenance Plan

Routine maintenance is the regular on-going work that is necessary to keep assets operating, including instanceswhere portions of the asset fail and need immediate repair to make the asset operational again.

5.3.1 Maintenance plan

Maintenance includes reactive, planned and specific maintenance work activities.

4WSC_AMSRRC Core Risk Register_Transport_120228

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Reactive maintenance is unplanned repair work carried out in response to service requests andmanagement/supervisory directions.

Planned maintenance is repair work that is identified and managed through a maintenance management system(MMS). MMS activities include inspection, assessing the condition against failure/breakdown experience, prioritising,scheduling, actioning the work and reporting what was done to develop a maintenance history and improvemaintenance and service delivery performance.

Specific maintenance is replacement of higher value components/sub-components of assets that is undertaken on aregular cycle including repainting, building roof replacement, etc. This work generally falls below thecapital/maintenance threshold but may require a specific budget allocation.

Actual past maintenance expenditure is shown in Table 5.3.1.

Table 5.3.1: Maintenance Expenditure Trends

Year Maintenance Expenditure

2014/15 $909,750

Current maintenance expenditure levels are considered to be adequate to meet required service levels. Futurerevision of this asset management plan will include linking required maintenance expenditures with required servicelevels.

Assessment and prioritisation of reactive maintenance is undertaken by operational staff using experience andjudgement.

5.3.2 Standards and specifications

Maintenance work is carried out in accordance with the following Standards and Specifications.

RMS and Council specifications.

5.3.3 Summary of future operations and maintenance expenditures

Future operations and maintenance expenditure is forecast to trend in line with the value of the asset stock as shownin Figure 4. Note that all costs are shown in 2015 dollar values.

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Figure 4: Projected Operations and Maintenance Expenditure

Deferred maintenance, ie works that are identified for maintenance and unable to be funded are to be included in therisk assessment process in the infrastructure risk management plan.

Maintenance is funded from the operating budget and grants where available. This is further discussed in Section 6.2.

5.4 Renewal/Replacement Plan

Renewal expenditure is major work which does not increase the asset’s design capacity but restores, rehabilitates,replaces or renews an existing asset to its original service potential. Work over and above restoring an asset tooriginal service potential is upgrade/expansion or new works expenditure.

5.4.1 Renewal plan

Assets requiring renewal are identified from one of three methods provided in the ‘Expenditure Template”.

Method 1 uses Asset Register data to project the renewal costs for renewal years using acquisition year anduseful life, or

Method 2 uses capital renewal expenditure projections from external condition modelling systems (such asPavement Management Systems), or

Method 3 uses a combination of average network renewals plus defect repairs in the Renewal Plan andDefect Repair Plan worksheets on the ‘Expenditure template’.

Method 1 was used for this asset management plan.

The ranking criteria used to determine priority of identified renewal proposals is detailed in Table 5.4.1.

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Table 5.4.1: Renewal Priority Ranking Criteria

Criteria Weighting

Community - Function 30%

Community – Quality 5%

Technical – Condition 10%

Technical – Risk of Failure 40%

Technical – Operating/Maintenance and lifecycle costs 15%

Total 100%

Renewal will be undertaken using ‘low-cost’ renewal methods where practical. The aim of ‘low-cost’ renewals is torestore the service potential or future economic benefits of the asset by renewing the assets at a cost less thanreplacement cost.

Examples of low cost renewal include bitumen reseals.

5.4.2 Renewal standards

Renewal work is carried out in accordance with the following Standards and Specifications.

• RMS and Council specifications.

5.4.3 Summary of projected renewal expenditure

Projected future renewal expenditures are forecast to increase over time as the asset stock ages. The costs aresummarised in Figure 5. Note that all costs are shown in 2015 dollar values.

The projected capital renewal program is shown in Appendix B.

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Figure 5.1: Projected Capital Renewal Expenditure (Scenario 1 - from Asset Register)

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Figure 5.2: Projected Capital Renewal Expenditure (Scenario 2 - from Average Network Renewal Estimates)

Deferred renewal, ie those assets identified for renewal and not scheduled for renewal in capital works programs areto be included in the risk assessment process in the risk management plan.

Renewals are to be funded from capital works programs and grants where available. This is further discussed inSection 6.2.

5.5 Creation/Acquisition/Upgrade Plan

New works are those works that create a new asset that did not previously exist, or works which upgrade or improvean existing asset beyond its existing capacity. They may result from growth, social or environmental needs. Assetsmay also be acquired at no cost to the Council from land development. These assets from growth are considered inSection 4.4.

5.5.1 Selection criteria

New assets and upgrade/expansion of existing assets are identified from various sources such as councillor orcommunity requests, proposals identified by strategic plans or partnerships with other organisations. Candidateproposals are inspected to verify need and to develop a preliminary estimate. Verified proposals are ranked bypriority and available funds and scheduled in future works programmes. The priority ranking criteria is detailed inTable 5.5.1.

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Table 5.5.1: Upgrade/New Assets Priority Ranking Criteria

Criteria Weighting

Safety 35%

Community Expectation 15%

Lifecycle Costs 25%

Community Benefits ( Usage, Population, Bus Routes,Future Development)

25%

Total 100%

5.5.2 Standards and specifications

Standards and specifications for new assets and for upgrade/expansion of existing assets are the same as those forrenewal shown in Section 5.4.2.

5.5.3 Summary of projected upgrade/new assets expenditure

Projected upgrade/new asset expenditures are summarised in Figure 6. The projected upgrade/new capital worksprogram is shown in Appendix C. All costs are shown in current 2013 dollar values.

Figure 6: Projected Capital Upgrade/New Asset Expenditure

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New assets and services are to be funded from capital works program and grants where available. This is furtherdiscussed in Section 6.2.

5.6 Disposal Plan

Disposal includes any activity associated with disposal of a decommissioned asset including sale, demolition orrelocation. Assets identified for possible decommissioning and disposal are shown in Table 5.6, together withestimated annual savings from not having to fund operations and maintenance of the assets. These assets will befurther reinvestigated to determine the required levels of service and see what options are available for alternateservice delivery, if any.

Where cash flow projections from asset disposals are not available, these will be developed in future revisions of thisasset management plan.

Table 5.6: Assets identified for Disposal

Asset Reason for Disposal Timing Net DisposalExpenditure (Expend

+ve, Revenue –ve)

Operations &Maintenance Annual

Savings

No assets identified for

disposal in this asset

management plan

6. FINANCIAL SUMMARY

This section contains the financial requirements resulting from all the information presented in the previous sectionsof this asset management plan. The financial projections will be improved as further information becomes availableon desired levels of service and current and projected future asset performance.

6.1 Financial Statements and Projections

The financial projections are shown in Figure 7 for projected operating (operations and maintenance) and capitalexpenditure (renewal and upgrade/expansion/new assets), net disposal expenditure and estimated budget funding.

Note that all costs are shown in 2015 dollar values.

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Figure 7.1: Projected Operating and Capital Expenditure and Budget (Scenario 1 - from Asset Register)

Figure 7.2: Projected Operating and Capital Expenditure and Budget (Scenario 2 - from Average Network Renewal

Estimates)

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The expenditure projections (forecast) for Scenario2 show that further review needs to be done to scenario 2 figuresto ensure that they are in alignment with the long term financial plan budget figures.

6.1.1 Sustainability of service delivery

There are four key indicators for service delivery sustainability that have been considered in the analysis of theservices provided by this asset category, these being the asset renewal funding ratio, long term life cyclecosts/expenditures and medium term projected/budgeted expenditures over 5 and 10 years of the planning period.

Asset Renewal Funding Ratio

Asset Renewal Funding Ratio5 132%

The Asset Renewal Funding Ratio is the most important indicator and reveals that over the next 10 years, theorganisation is forecasting that it will have 132% of the funds required for the optimal renewal and replacement of itsassets.

Long term - Life Cycle Cost

Life cycle costs (or whole of life costs) are the average costs that are required to sustain the service levels over theasset life cycle. Life cycle costs include operations and maintenance expenditure and asset consumption (depreciationexpense). The life cycle cost for the services covered in this asset management plan is $2,350, 000 per year (averageoperations and maintenance expenditure plus depreciation expense projected over 10 years).

Life cycle costs can be compared to life cycle expenditure to give an initial indicator of affordability of projectedservice levels when considered with age profiles. Life cycle expenditure includes operations, maintenance and capitalrenewal expenditure. Life cycle expenditure will vary depending on the timing of asset renewals. The life cycleexpenditure over the 10 year planning period is $2,732, 000 per year (average operations and maintenance pluscapital renewal budgeted expenditure in LTFP over 10 years).

A shortfall between life cycle cost and life cycle expenditure is the life cycle gap. The life cycle gap for services coveredby this asset management plan is + $381, 000 per year (-ve = gap, +ve = surplus).

Life cycle expenditure is 116% of life cycle costs.

The life cycle costs and life cycle expenditure comparison highlights any difference between present outlays and theaverage cost of providing the service over the long term. If the life cycle expenditure is less than that life cycle cost, itis 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 notavailable will assist organisations in providing services to their communities in a financially sustainable manner. This isthe purpose of the asset management plans and long term financial plan.

Medium term – 10 year financial planning period

This asset management plan identifies the projected operations, maintenance and capital renewal expendituresrequired to provide an agreed level of service to the community over a 10 year period. This provides input into 10 yearfinancial and funding plans aimed at providing the required services in a sustainable manner.

These projected expenditures may be compared to budgeted expenditures in the 10 year period to identify anyfunding shortfall. In a core asset management plan, a gap is generally due to increasing asset renewals for ageingassets.

The projected operations, maintenance and capital renewal expenditure required over the 10 year planning period is$2,350,000 on average per year.

5 AIFMG, 2009, Financial Sustainability Indicator 8, Sec 2.6, p 2.18

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Estimated (budget) operations, maintenance and capital renewal funding is $2,732, 000 on average per year giving a10 year funding shortfall of +$381,000 per year. This indicates that Council expects to have 116% of the projectedexpenditures needed to provide the services documented in the asset management plan.

Medium Term – 5 year financial planning period

The projected operations, maintenance and capital renewal expenditure required over the first 5 years of the planningperiod is $2,318, 000 on average per year.

Estimated (budget) operations, maintenance and capital renewal funding is $2,631, 000 on average per year giving a 5year funding shortfall of +$312,000. This indicates that Council expects to have 113% of projected expendituresrequired to provide the services shown in this asset management plan.

Asset management financial indicators

Figure 7A shows the asset management financial indicators over the 10 year planning period and for thelong term life cycle.

Figure 7A.1: Financial Sustainability Indicators (Scenario 1 - from Asset Register)

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Figure 7A.2: Financial Sustainability Indicators (Scenario 2 - from Average Network Renewal Estimates)

Providing services from infrastructure in a sustainable manner requires the matching and managing of service levels,risks, projected expenditures and funding to achieve a financial sustainability indicator of 1.0 for the first years of theasset management plan and ideally over the 10 year life of the AM Plan.

Figure 8 shows the projected asset renewals in the 10 year planning period from Appendix B. The projected assetrenewals are compared to budgeted renewal expenditure in the capital works program and capital renewalexpenditure in year 1 of the planning period in Figure 8.

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Figure 8.1: Projected and Budgeted Renewal Expenditure (Scenario 1 - from Asset Register)

Table 6.1.1.S1 shows the surplus between projected and budgeted renewals

Table 6.1.1.S1: Projected and Budgeted Renewals and Expenditure Surpluses or shortfalls (Scenario 1 - from AssetRegister)

Weddin SC - Report 4 - Table 6.1.1 Renewals Financing (Roads and Transport_2015_S1_V1)

Year End Projected LTFP Renewal Financing Cumulative Shortfall($'000)

Jun-30 RenewalsRenewalBudget

Shortfall ($'000) (- gap, + surplus)

($'000) ($'000) (- gap, + surplus)

2015 $5,900 $1,505 -$4,395 -$4,395

2016 $219 $1,850 $1,631 -$2,764

2017 $32 $1,438 $1,406 -$1,358

2018 $35 $1,385 $1,350 -$7

2019 $100 $1,680 $1,579 $1,572

2020 $213 $1,668 $1,455 $3,027

2021 $437 $1,708 $1,271 $4,298

2022 $204 $1,814 $1,611 $5,909

2023 $224 $1,786 $1,562 $7,471

2024 $113 $1,741 $1,628 $9,099

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2025 $2,196 $1,741 -$455 $8,644

2026 $37 $1,658 $1,621 $10,264

2027 $172 $1,658 $1,486 $11,750

2028 $711 $1,658 $947 $12,697

2029 $200 $1,658 $1,457 $14,154

2030 $553 $1,658 $1,105 $15,259

2031 $2,420 $1,658 -$762 $14,496

2032 $293 $1,658 $1,364 $15,861

2033 $286 $1,658 $1,372 $17,233

2034 $491 $1,658 $1,167 $18,399

Note: An negative shortfall indicates a funding gap, a positive shortfall indicates a surplus for that year.

Figure 8.2: Projected and Budgeted Renewal Expenditure (Scenario 2 - from Average Network Renewal Estimates)

Table 6.1.1.S2 shows the shortfall between projected and budgeted renewals

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Table 6.1.1.S2: Projected and Budgeted Renewals and Expenditure Surplus or shortfall (Scenario 2 - from AverageNetwork Renewal Estimates)

Weddin SC - Report 4 - Table 6.1.1 Renewals Financing (Roads and Transport_2015_S2_V1)

Year End Projected LTFP Renewal Financing Cumulative Shortfall($'000)

Jun-30 RenewalsRenewalBudget

Shortfall ($'000) (- gap, + surplus)

($'000) ($'000) (- gap, + surplus)

2015 $1,247 $1,505 $258 $258

2016 $1,247 $1,850 $603 $861

2017 $1,247 $1,438 $192 $1,053

2018 $1,247 $1,385 $138 $1,191

2019 $1,247 $1,680 $433 $1,624

2020 $1,247 $1,668 $421 $2,046

2021 $1,247 $1,708 $461 $2,507

2022 $1,247 $1,814 $567 $3,074

2023 $1,247 $1,786 $539 $3,613

2024 $1,247 $1,741 $494 $4,107

2025 $1,247 $1,741 $494 $4,601

2026 $1,247 $1,658 $411 $5,012

2027 $1,247 $1,658 $411 $5,423

2028 $1,247 $1,658 $411 $5,833

2029 $1,247 $1,658 $411 $6,244

2030 $1,247 $1,658 $411 $6,655

2031 $1,247 $1,658 $411 $7,065

2032 $1,247 $1,658 $411 $7,476

2033 $1,247 $1,658 $411 $7,887

2034 $1,247 $1,658 $411 $8,298

Note: A negative shortfall indicates a funding gap; a positive shortfall indicates a surplus for that year.

Providing services in a sustainable manner will require matching of projected asset renewals to meet agreed servicelevels with planned capital works programs and available revenue.

A gap between projected asset renewals, planned asset renewals and funding indicates that further work is requiredto manage required service levels and funding to eliminate any funding gap.

6.1.2 Expenditure projections for long term financial plan

Table 6.1.2 shows the projected expenditures for the 10 year long term financial plan.

Expenditure projections are in current (non-inflated) values. Disposals are shown as net expenditures (revenues arenegative).

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Table 6.1.2: Expenditure Projections for Long Term Financial Plan ($000) (Scenario 2 - from Average NetworkRenewal Estimates)

YearOperatio

nsMaintena

nce

Projected CapitalDisposals

Capital Renewal Upgrade/New

2015 $190.00 $853.02 $1,246.84 $491.62 $0.00

2016 $190.88 $877.14 $1,246.84 $734.05 $0.00

2017 $192.21 $883.29 $1,246.84 $687.22 $0.00

2018 $193.44 $889.04 $1,246.84 $610.53 $0.00

2019 $194.54 $894.15 $1,246.84 $603.80 $0.00

2020 $195.63 $909.21 $1,246.84 $685.29 $0.00

2021 $196.86 $924.95 $1,246.84 $710.34 $0.00

2022 $198.14 $930.89 $1,246.84 $676.49 $0.00

2023 $199.36 $946.56 $1,246.84 $869.71 $0.00

2024 $200.92 $973.84 $1,246.84 $831.04 $0.00

2025 $202.42 $980.77 $1,246.84 $690.01 $0.00

2026 $203.66 $947.57 $1,246.84 $690.01 $0.00

2027 $204.90 $953.35 $1,246.84 $690.01 $0.00

2028 $206.14 $959.13 $1,246.84 $690.01 $0.00

2029 $207.38 $964.90 $1,246.84 $690.01 $0.00

2030 $208.62 $970.68 $1,246.84 $690.01 $0.00

2031 $209.87 $976.46 $1,246.84 $690.01 $0.00

2032 $211.11 $982.24 $1,246.84 $690.01 $0.00

2033 $212.35 $988.01 $1,246.84 $690.01 $0.00

2034 $213.59 $993.79 $1,246.84 $690.01 $0.00

Note: All projected expenditures are in 2015 values

6.2 Funding Strategy

Projected expenditure identified in Section 6.1 is to be funded from future operating and capital budgets. The fundingstrategy is detailed in the organisation’s 10 year long term financial plan.

6.3 Valuation Forecasts

Asset values are forecast to increase as additional assets are added to the asset stock from construction andacquisition by Council and from assets constructed by land developers and others and donated to Council. Figure 9shows the projected replacement cost asset values over the planning period in 2015 dollar values.

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Figure 9: Projected Asset Values

Depreciation expense values are forecast in line with asset values as shown in Figure 10.

Figure 10: Projected Depreciation Expense

- 36 -


The depreciated replacement cost (current replacement cost less accumulated depreciation) will vary over theforecast period depending on the rates of addition of new assets, disposal of old assets and consumption and renewal

of existing assets. Forecast of the assets’ depreciated replacement cost is shown in Figure 11. The effect ofcontributed and new assets on the depreciated replacement cost is shown in the light colour bar.

Figure 11: Projected Depreciated Replacement Cost

- 37 -


6.4 Key Assumptions made in Financial Forecasts

This section details the key assumptions made in presenting the information contained in this asset management planand in preparing forecasts of required operating and capital expenditure and asset values, depreciation expense andcarrying amount estimates. It is presented to enable readers to gain an understanding of the levels of confidence inthe data behind the financial forecasts.

Key assumptions made in this asset management plan are:

That road and transport assets will remain in Council’s ownership throughout the planning period andthat levels of service remain unchanged.

Required maintenance is assumed to take place in accordance with relevant guidelines/standards

Natural disasters, accidents and other unplanned events are not considered in the asset lifecycles

That assets will actually be replaced at the end of their respective useful lives

Assets are assumed to have reached their allocated useful lives even though actual condition will varydepending on actual usage and prevailing conditions

All expenditure is stated in 2015 dollar values.

Maintenance expenditure is based on historical expenditure and assumes there will no significantchange.

Maintenance and operations allocations are based on maintaining current service levels and utilisation.

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It is assumed that regulations/standards relating to roads and transport will remain the same over theplanning period (i.e. the 10 years until June 2025)

7. ASSET MANAGEMENT PRACTICES

7.1 Accounting/Financial Systems

7.1.1 Accounting and financial systems

Council uses Civica financial management system.

7.1.2 Accountabilities for financial systems

The Director - Corporate Services is responsible for the accounting and financial system.

7.1.3 Accounting standards and regulations

Council works under Australian Accounting Standards and State Legislation/Regulations and Directives issued by theLocal Government Department.

7.1.4 Capital/maintenance threshold

A capital threshold policy has to be created, once all of the asset registers linked with Civica financial managementsystem or any relevant financial management system.

7.1.5 Required changes to accounting financial systems arising from this AMPlan

Changes to accounting and financial systems identified as a result of preparation of this asset management plan are:

All asset registers has to be linked with Civica or relevant financial management system.

Identification of capital expenditures as renewal and upgrade/new,

Development of a single corporate asset register,

Linking of the customer service system to the corporate asset register to link requests to asset records, oncethe asset registers linked with Civica or any relevant financial management system

7.2 Asset Management Systems

7.2.1 Asset management system

Council uses Asset Edge asset management system for highways (RMS). Council owned assets are currentlymaintained in spread sheets and these assets should be linked with an appropriate asset management system.

7.2.2 Asset registers

Asset data is held in summary form in the financial system supported by spread sheet technical asset registers formajor asset classes. The technical asset register is updated annually.

7.2.3 Linkage from asset management to financial system

Linkage from the technical asset registers to the financial system in a manual process.

7.2.4 Accountabilities for asset management system and data

The assistant engineer is responsible for the asset management systems and its associated data.

7.2.5 Required changes to asset management system arising from this AMPlan

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Changes to asset management systems identified as a result of preparation of this management plan are:

Review of accuracy of asset data,

Development of a single technical asset register as the corporate asset register,

Development of works costing and maintenance management system to improves works planning and costrecording,

Improved project cost according to record costs against the asset component and develop valuation unitrates.

7.3 Information Flow Requirements and Processes

The key information flows into this asset management plan are:

Council strategic and operational plans,

Service requests from the community,

Network assets information,

The unit rates for categories of work/materials,

Current levels of service, expenditures, service deficiencies and service risks,

Projections of various factors affecting future demand for services and new assets acquired by Council,

Future capital works programs,

Financial asset values.

The key information flows from this asset management plan are:

The projected Works Program and trends,

The resulting budget and long term financial plan expenditure projections,

Financial sustainability indicators.

These will impact the Long Term Financial Plan, Strategic Longer-Term Plan, annual budget and departmental businessplans and budgets.

7.4 Standards and Guidelines

Standards, guidelines and policy documents referenced in this asset management plan are:

Australian Accounting Standards Board

Weddin Shire Council Asset Management Policy (currently being developed)

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8. PLAN IMPROVEMENT AND MONITORING

8.1 Performance Measures

The effectiveness of the asset management plan can be measured in the following ways:

The degree to which the required cashflows identified in this asset management plan are incorporatedinto the organisation’s long term financial plan and Community/Strategic Planning processes anddocuments,

The degree to which 1-5 year detailed works programs, budgets, business plans and organisationalstructures take into account the ‘global’ works program trends provided by the asset management plan;

8.2 Improvement Plan

The asset management improvement plan generated from this asset management plan is shown in Table 8.2.

Table 8.2: Improvement Plan

TaskNo

Task Responsibility ResourcesRequired

Timeline

1 Record and report on expenditures, with separatecosts for operations, maintenance and capturecapital expenditures as renewal or upgrade/new

Engineering &CorporateServices

Staff Time Ongoing

2 Development of a single corporate asset register,in which financial calculations includingcalculation of annual depreciation can beundertaken by council.


Staff Time June 2013

3 Linking of the customer service system to thecorporate asset register to link requests to assetrecords


Staff Time

Fund

As funds areavailable

4 A comprehensive review of the Plan must beundertaken after road asset revaluation on 30June 2015

Engineering Staff Time Dec 2015

5 Review methodology for determining remaininglife, with detail assessment for assets requiringrenewal in the medium term (next 10-20 years)

An outcome should be that the remaining livesfrom the asset register will generate a renewalscenario aligning with the Asset ReplacementProgram and Long Term Financial Plan. (Scenario1 described in this asset management plan willmatch Scenario 3)


Staff Time June 2013

6 Determine procedures for maintaining the Assetand Financial Registers


Staff Time Ongoing

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8.3 Monitoring and Review Procedures

This asset management plan will be reviewed during annual budget preparation and amended to recognise anymaterial changes in service levels and/or resources available to provide those services as a result of the budgetdecision process.

The Plan has a life of 4 years and is due for revision and updating within 12 months of each Council election.

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REFERENCES

DVC, 2006, Asset Investment Guidelines, Glossary, Department for Victorian Communities, Local Government Victoria,Melbourne, http://www.dpcd.vic.gov.au/localgovernment/publications-and-research/asset-management-and-financial.

IPWEA, 2006, International Infrastructure Management Manual, Institute of Public Works Engineering Australia,

Sydney, www.ipwea.org.au.

IPWEA, 2008, NAMS.PLUS Asset Management Institute of Public Works Engineering Australia, Sydney,

www.ipwea.org.au/namsplus.

IPWEA, 2009, Australian Infrastructure Financial Management Guidelines, Institute of Public Works Engineering

Australia, Sydney, www.ipwea.org.au/AIFMG.

IPWEA, 2011, Asset Management for Small, Rural or Remote Communities Practice Note, Institute of Public Works

Engineering Australia, Sydney, www.ipwea.org.au/AM4SRRC.

Weddin Shire Council Community Strategic Plan

Weddin Shire Council Operational Plan

Weddin Shire Council Budget Estimates

- 43 -


APPENDICES

Appendix Budgeted Expenditures accommodated in Long Term Financial Plan

Appendix B Projected 10 years Capital Renewal Works Program

Appendix C Planned Upgrade/Exp/New 10 year Capital Works Program

Appendix D Abbreviations

Appendix E Glossary

- 44 -


Appendix A Planned Expenditures (From Long Term Financial Plan)

- 45 -


Appendix B Projected 10 year Capital Renewal Works Program

Weddin SC

Projected Capital Renewal Works Program - Roads and Transport_2015_S2_V1

($000)

Year Item Description Estimate

2015 Network Renewals

1 Average Annual Renewal $1,247

2

3

4

5

6

7

8

9

10

2015 Defect Repairs

1

2

3

4

5

6

7

8

9

10

2015 Total $1,247



2

3

4

5

6

7

8

9

10

2016 Defect Repairs

1

2

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3

4

5

6

7

8

9

10

2016 Total $1,247

($000)




2

3

4

5

6

7

8

9

10

2017 Defect Repairs

1

2

3

4

5

6

7

8

9

10

2017 Total $1,247

2018 Network Renewals Estimate


2

3

4

5

6

7

8

- 47 -


9

10

2018 Defect Repairs

1

2

3

4

5

6

7

8

9

10

2018 Total $1,247

($000)




2

3

4

5

6

7

8

9

10

2019 Defect Repairs

1

2

3

4

5

6

7

8

9

10

2019 Total $1,247



2

3

- 48 -


4

5

6

7

8

9

10

2020 Defect Repairs

1

2

3

4

5

6

7

8

9

10

2020 Total $1,247

($000)




2

3

4

5

6

7

8

9

10

2021 Defect Repairs

1

2

3

4

5

6

7

8

9

10

2021 Total $1,247

- 49 -




2

3

4

5

6

7

8

9

10

2022 Defect Repairs

1

2

3

4

5

6

7

8

9

10

2022 Total $1,247

($000)




2

3

4

5

6

7

8

9

10

2023 Defect Repairs

1

2

3

4

5

6

- 50 -


7

8

9

10

2023 Total $1,247



2

3

4

5

6

7

8

9

10

2024 Defect Repairs

1

2

3

4

5

6

7

8

9

10

2024 Total $1,247

- 51 -


Appendix C Planned Upgrade/Exp/New 10 year Capital Works Program

($000)


2015 1 Upgrading Roads, New Footpaths, New Kerbs and Gutters and Causeways $492

2

3

4

5

6

7

8

9

10

2015 Total $492

($000)



2

3

4

5

6

7

8

9

10

2016 Total $734

($000)



2

3

4

5

6

7

8

9

10

2017 Total $687

- 52 -


($000)



2

3

4

5

6

7

8

9

10

2018 Total $611

($000)



2

3

4

5

6

7

8

9

10

2019 Total $604

($000)



2

3

4

5

6

7

8

9

10

2020 Total $685

($000)


- 53 -



2

3

4

5

6

7

8

9

10

2021 Total $710

($000)



2

3

4

5

6

7

8

9

10

2022 Total $676

($000)



2

3

4

5

6

7

8

9

10

2023 Total $870

($000)



2

- 54 -


3

4

5

6

7

8

9

10

2024 Total $831

Appendix D Abbreviations

AAAC Average annual asset consumption

AMP Asset management plan

ARI Average recurrence interval

BOD Biochemical (biological) oxygen demand

CRC Current replacement cost

CWMS Community wastewater management systems

DA Depreciable amount

EF Earthworks/formation

IRMP Infrastructure risk management plan

LCC Life Cycle cost

LCE Life cycle expenditure

MMS Maintenance management system

PCI Pavement condition index

RV Residual value

SS Suspended solids

vph Vehicles per hour

- 55 -


Appendix E Glossary

Annual service cost (ASC)1) Reporting actual cost

The annual (accrual) cost of providing a serviceincluding operations, maintenance, depreciation,finance/opportunity and disposal costs lessrevenue.

2) For investment analysis and budgetingAn estimate of the cost that would be tendered, per

annum, if tenders were called for the supply of aservice to a performance specification for a fixedterm. The Annual Service Cost includesoperations, maintenance, depreciation, finance/opportunity and disposal costs, less revenue.

AssetA resource controlled by an entity as a result of pastevents and from which future economic benefits areexpected to flow to the entity. Infrastructure assetsare a sub-class of property, plant and equipmentwhich are non-current assets with a life greater than12 months and enable services to be provided.

Asset classA group of assets having a similar nature or function inthe operations of an entity, and which, for purposes ofdisclosure, is shown as a single item withoutsupplementary disclosure.

Asset condition assessmentThe process of continuous or periodic inspection,assessment, measurement and interpretation of theresultant data to indicate the condition of a specificasset so as to determine the need for somepreventative or remedial action.

Asset management (AM)The combination of management, financial, economic,engineering and other practices applied to physicalassets with the objective of providing the requiredlevel of service in the most cost effective manner.

Average annual asset consumption (AAAC)*The amount of an organisation’s asset base consumedduring a reporting period (generally a year). This maybe calculated by dividing the depreciable amount bythe useful life (or total future economicbenefits/service potential) and totalled for each andevery asset OR by dividing the carrying amount(depreciated replacement cost) by the remaininguseful life (or remaining future economicbenefits/service potential) and totalled for each andevery asset in an asset category or class.

BorrowingsA borrowing or loan is a contractual obligation of theborrowing entity to deliver cash or another financialasset to the lending entity over a specified period oftime or at a specified point in time, to cover both theinitial capital provided and the cost of the interestincurred for providing this capital. A borrowing or loanprovides the means for the borrowing entity tofinance outlays (typically physical assets) when it hasinsufficient funds of its own to do so, and for thelending entity to make a financial return, normally inthe form of interest revenue, on the funding provided.

Capital expenditureRelatively large (material) expenditure, which hasbenefits, expected to last for more than 12 months.Capital expenditure includes renewal, expansion andupgrade. Where capital projects involve a combinationof renewal, expansion and/or upgrade expenditures,the total project cost needs to be allocatedaccordingly.

Capital expenditure - expansionExpenditure that extends the capacity of an existingasset to provide benefits, at the same standard as iscurrently enjoyed by existing beneficiaries, to a newgroup of users. It is discretionary expenditure, whichincreases future operations and maintenance costs,because it increases the organisation’s asset base, butmay be associated with additional revenue from thenew user group, eg. extending a drainage or roadnetwork, the provision of an oval or park in a newsuburb for new residents.

Capital expenditure - newExpenditure which creates a new asset providing anew service/output that did not exist beforehand. As itincreases service potential it may impact revenue andwill increase future operations and maintenanceexpenditure.

Capital expenditure - renewalExpenditure on an existing asset or on replacing anexisting asset, which returns the service capability ofthe asset up to that which it had originally. It isperiodically required expenditure, relatively large(material) in value compared with the value of thecomponents or sub-components of the asset beingrenewed. As it reinstates existing service potential, itgenerally has no impact on revenue, but may reducefuture operations and maintenance expenditure ifcompleted at the optimum time, eg. resurfacing orresheeting a material part of a road network, replacinga material section of a drainage network with pipes ofthe same capacity, resurfacing an oval.

- 56 -


Capital expenditure - upgradeExpenditure, which enhances an existing asset toprovide a higher level of service or expenditure thatwill increase the life of the asset beyond that which ithad originally. Upgrade expenditure is discretionaryand often does not result in additional revenue unlessdirect user charges apply. It will increase operationsand maintenance expenditure in the future because ofthe increase in the organisation’s asset base, eg.widening the sealed area of an existing road, replacingdrainage pipes with pipes of a greater capacity,enlarging a grandstand at a sporting facility.

Capital fundingFunding to pay for capital expenditure.

Capital grantsMonies received generally tied to the specific projectsfor which they are granted, which are often upgradeand/or expansion or new investment proposals.

Capital investment expenditureSee capital expenditure definition

Capitalisation thresholdThe value of expenditure on non-current assets abovewhich the expenditure is recognised as capitalexpenditure and below which the expenditure ischarged as an expense in the year of acquisition.

Carrying amountThe amount at which an asset is recognised afterdeducting any accumulated depreciation /amortisation and accumulated impairment lossesthereon.

Class of assetsSee asset class definition

ComponentSpecific parts of an asset having independent physicalor functional identity and having specific attributessuch as different life expectancy, maintenanceregimes, risk or criticality.

Cost of an assetThe amount of cash or cash equivalents paid or thefair value of the consideration given to acquire anasset at the time of its acquisition or construction,including any costs necessary to place the asset intoservice. This includes one-off design and projectmanagement costs.

Current replacement cost (CRC)The cost the entity would incur to acquire the asset onthe reporting date. The cost is measured by referenceto the lowest cost at which the gross future economicbenefits could be obtained in the normal course ofbusiness or the minimum it would cost, to replace theexisting asset with a technologically modernequivalent new asset (not a second hand one) with thesame economic benefits (gross service potential)allowing for any differences in the quantity and qualityof output and in operating costs.

Depreciable amountThe cost of an asset, or other amount substituted forits cost, less its residual value.

Depreciated replacement cost (DRC)The current replacement cost (CRC) of an asset less,where applicable, accumulated depreciationcalculated on the basis of such cost to reflect thealready consumed or expired future economic benefitsof the asset.

Depreciation / amortisationThe systematic allocation of the depreciable amount(service potential) of an asset over its useful life.

Economic lifeSee useful life definition.

ExpenditureThe spending of money on goods and services.Expenditure includes recurrent and capital.

Fair valueThe amount for which an asset could be exchanged, ora liability settled, between knowledgeable, willingparties, in an arms length transaction.

Funding gapA funding gap exists whenever an entity hasinsufficient capacity to fund asset renewal and otherexpenditure necessary to be able to appropriatelymaintain the range and level of services its existingasset stock was originally designed and intended todeliver. The service capability of the existing assetstock should be determined assuming no additionaloperating revenue, productivity improvements, or netfinancial liabilities above levels currently planned orprojected. A current funding gap means service levelshave already or are currently falling. A projectedfunding gap if not addressed will result in a futurediminution of existing service levels.

- 57 -


Heritage assetAn asset with historic, artistic, scientific, technological,geographical or environmental qualities that is heldand maintained principally for its contribution toknowledge and culture and this purpose is central tothe objectives of the entity holding it.

Impairment LossThe amount by which the carrying amount of an assetexceeds its recoverable amount.

Infrastructure assetsPhysical assets that contribute to meeting the needsof organisations or the need for access to majoreconomic and social facilities and services, eg.roads,drainage, footpaths and cycleways. These are typicallylarge, interconnected networks or portfolios ofcomposite assets. The components of these assetsmay be separately maintained, renewed or replacedindividually so that the required level and standard ofservice from the network of assets is continuouslysustained. Generally the components and hence theassets have long lives. They are fixed in place and areoften have no separate market value.

Investment propertyProperty held to earn rentals or for capitalappreciation or both, rather than for:(a) use in the production or supply of goods or

services or for administrative purposes; or(b) sale in the ordinary course of business.

Key performance indicatorA qualitative or quantitative measure of a service oractivity used to compare actual performance against astandard or other target. Performance indicatorscommonly relate to statutory limits, safety,responsiveness, cost, comfort, asset performance,reliability, efficiency, environmental protection andcustomer satisfaction.

Level of serviceThe defined service quality for a particularservice/activity against which service performancemay be measured. Service levels usually relate toquality, quantity, reliability, responsiveness,environmental impact, acceptability and cost.

Life Cycle Cost1. Total LCCThe total cost of an asset throughout its

life including planning, design, construction,acquisition, operation, maintenance,rehabilitation and disposal costs.

2. Average LCCThe life cycle cost (LCC) is averagecost to provide the service over the longest assetlife cycle. It comprises annual operations,maintenance and asset consumption expense,represented by depreciation expense. The LifeCycle Cost does not indicate the funds required toprovide the service in a particular year.

Life Cycle ExpenditureThe Life Cycle Expenditure (LCE) is the actual orplanned annual operations, maintenance and capitalrenewal expenditure incurred in providing the servicein a particular year. Life Cycle Expenditure may becompared to average Life Cycle Cost to give an initialindicator of life cycle sustainability.

Loans / borrowingsSee borrowings.

MaintenanceAll actions necessary for retaining an asset as near aspracticable to its original condition, including regularongoing day-to-day work necessary to keep assetsoperating, eg road patching but excludingrehabilitation or renewal. It is operating expenditurerequired to ensure that the asset reaches its expecteduseful life.• Planned maintenance

Repair work that is identified and managedthrough a maintenance management system(MMS). MMS activities include inspection,assessing the condition against failure/breakdowncriteria/experience, prioritising scheduling,actioning the work and reporting what was doneto develop a maintenance history and improvemaintenance and service delivery performance.

• Reactive maintenanceUnplanned repair work that is carried out inresponse to service requests andmanagement/supervisory directions.

• Significant maintenanceMaintenance work to repair components orreplace sub-components that needs to beidentified as a specific maintenance item in themaintenance budget.

• Unplanned maintenanceCorrective work required in the short-term torestore an asset to working condition so it cancontinue to deliver the required service or tomaintain its level of security and integrity.

- 58 -


Maintenance and renewal gapDifference between estimated budgets and projectedrequired expenditures for maintenance and renewalof assets to achieve/maintain specified service levels,totalled over a defined time (e.g. 5, 10 and 15 years).

Maintenance and renewal sustainability index

Ratio of estimated budget to projected expenditurefor maintenance and renewal of assets over a definedtime (eg 5, 10 and 15 years).

Maintenance expenditure

Recurrent expenditure, which is periodically orregularly required as part of the anticipated scheduleof works required to ensure that the asset achieves itsuseful life and provides the required level of service. Itis expenditure, which was anticipated in determiningthe asset’s useful life.

MaterialityThe notion of materiality guides the margin of erroracceptable, the degree of precision required and theextent of the disclosure required when preparinggeneral purpose financial reports. Information ismaterial if its omission, misstatement or non-disclosure has the potential, individually orcollectively, to influence the economic decisions ofusers taken on the basis of the financial report oraffect the discharge of accountability by themanagement or governing body of the entity.

Modern equivalent assetAssets that replicate what is in existence with themost cost-effective asset performing the same level ofservice.It is the most cost efficient, currently availableasset which will provide the same stream of servicesas the existing asset is capable of producing. It allowsfor technology changes and, improvements andefficiencies in production and installation techniques

Net present value (NPV)The value to the organisation of the cash flowsassociated with an asset, liability, activity or eventcalculated using a discount rate to reflect the timevalue of money. It is the net amount of discountedtotal cash inflows after deducting the value of thediscounted total cash outflows arising from eg thecontinued use and subsequent disposal of the assetafter deducting the value of the discounted total cashoutflows.

Non-revenue generating investmentsInvestments for the provision of goods and services tosustain or improve services to the community that arenot expected to generate any savings or revenue tothe Council, eg. parks and playgrounds, footpaths,roads and bridges, libraries, etc.

Operations expenditureRecurrent expenditure, which is continuously requiredto provide a service. In common use the term typicallyincludes, eg power, fuel, staff, plant equipment, on-costs and overheads but excludes maintenance anddepreciation. Maintenance and depreciation is on theother hand included in operating expenses.

Operating expenseThe gross outflow of economic benefits, being cashand non cash items, during the period arising in thecourse of ordinary activities of an entity when thoseoutflows result in decreases in equity, other thandecreases relating to distributions to equityparticipants.

Pavement management systemA systematic process for measuring and predicting thecondition of road pavements and wearing surfacesover time and recommending corrective actions.

PMS ScoreA measure of condition of a road segment determinedfrom a Pavement Management System.

Rate of annual asset consumptionA measure of average annual consumption of assets(AAAC) expressed as a percentage of the depreciableamount (AAAC/DA). Depreciation may be used forAAAC.

Rate of annual asset renewalA measure of the rate at which assets are beingrenewed per annum expressed as a percentage ofdepreciable amount (capital renewal expenditure/DA).

Rate of annual asset upgradeA measure of the rate at which assets are beingupgraded and expanded per annum expressed as apercentage of depreciable amount (capitalupgrade/expansion expenditure/DA).

Recoverable amountThe higher of an asset's fair value, less costs to sell andits value in use.

Recurrent expenditureRelatively small (immaterial) expenditure or thatwhich has benefits expected to last less than 12months. Recurrent expenditure includes operationsand maintenance expenditure.

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Recurrent fundingFunding to pay for recurrent expenditure.

RehabilitationSee capital renewal expenditure definition above.

Remaining useful lifeThe time remaining until an asset ceases to providethe required service level or economic usefulness. Ageplus remaining useful life is useful life.

RenewalSee capital renewal expenditure definition above.

Residual valueThe estimated amount that an entity would currentlyobtain from disposal of the asset, after deducting theestimated costs of disposal, if the asset were alreadyof the age and in the condition expected at the end ofits useful life.

Revenue generating investmentsInvestments for the provision of goods and services tosustain or improve services to the community that areexpected to generate some savings or revenue tooffset operating costs, eg public halls and theatres,childcare centres, sporting and recreation facilities,tourist information centres, etc.

Risk managementThe application of a formal process to the range ofpossible values relating to key factors associated witha risk in order to determine the resultant ranges ofoutcomes and their probability of occurrence.

Section or segmentA self-contained part or piece of an infrastructureasset.

Service potentialThe total future service capacity of an asset. It isnormally determined by reference to the operatingcapacity and economic life of an asset. A measure ofservice potential is used in the not-for-profitsector/public sector to value assets, particularly thosenot producing a cash flow.

Service potential remainingA measure of the future economic benefits remainingin assets. It may be expressed in dollar values (FairValue) or as a percentage of total anticipated futureeconomic benefits. It is also a measure of thepercentage of the asset’s potential to provide servicesthat is still available for use in providing services(Depreciated Replacement Cost/Depreciable Amount).

Strategic Longer-Term PlanA plan covering the term of office of councillors (4years minimum) reflecting the needs of thecommunity for the foreseeable future. It bringstogether the detailed requirements in the council’slonger-term plans such as the asset management planand the long-term financial plan. The plan is preparedin consultation with the community and details wherethe council is at that point in time, where it wants togo, how it is going to get there, mechanisms formonitoring the achievement of the outcomes and howthe plan will be resourced.

Specific MaintenanceReplacement of higher value components/sub-components of assets that is undertaken on a regularcycle including repainting, building roof replacement,cycle, replacement of air conditioning equipment, etc.This work generally falls below the capital/maintenance threshold and needs to be identified in aspecific maintenance budget allocation.

Sub-componentSmaller individual parts that make up a componentpart.

Useful lifeEither:(a) the period over which an asset is expected to be

available for use by an entity, or(b) the number of production or similar units expected

to be obtained from the asset by the entity.It is estimated or expected time between placing theasset into service and removing it from service, or theestimated period of time over which the futureeconomic benefits embodied in a depreciable asset,are expected to be consumed by the council.Value in UseThe present value of future cash flows expected to bederived from an asset or cash generating unit. It isdeemed to be depreciated replacement cost (DRC) forthose assets whose future economic benefits are notprimarily dependent on the asset's ability to generatenet cash inflows, where the entity would, if deprivedof the asset, replace its remaining future economicbenefits.

Source: IPWEA, 2009, Glossary

Documents

Asset Management Plan - Weddin Shire · The Asset Management Plan in conjunction with Long Term Financial Plan and the Community Plan are the tools by which Council assesses the long