ASSET MANAGEMENT STRATEGY - West Coast Council

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ASSET MANAGEMENT STRATEGY2020 – 2030

Document ControlNAMS.PLUS Asset ManagementDocument Controlwww.ipwea.org/namsplusDocument ID: 140527 nams.plus3 core am strategy template v1.1RevNoDateRevision DetailsAuthorAMay 2015Draft version createdG.BoydBAug 20162016 UpdateG.BoydCAug 2016Updated Draft PlanDOct 20202020 UpdateNAMS.PLUS Asset ManagementThe Institute of Public Works Engineering Australasia.www.ipwea.org/namsplus Copyright 2012 – All rights reserved.West Coast Council Asset Management StrategyReviewerSeniorLeadership Teaminc GeneralManagerG.BoydApprover

West Coast Council Asset Management Strategy

Table of ContentsExecutive Summary. 11.0 INTRODUCTION . 41.2Asset Management Planning Process . 63.0 THE ORGANISATION”S ASSETS AND THEIR MANAGEMENT . 83.1 State of the Assets . 83.2Life Cycle Cost . 103.3Asset Management Structure . 113.4Corporate Asset Management Team . 123.5Financial & Asset Management Core Competencies . 133.6Strategy Outlook . 134. WHERE DO WE WANT TO BE? . 154.1Council’s Vision, Mission, Goals and Objectives . 154.2Asset Management Policy . 174.3Asset Management Vision . 175. HOW WILL WE GET THERE? . 176. ASSET MANAGEMENT IMPROVEMENT PLAN . 18TablesTable 1: Assets used for providing Services. . 7Table 2: Financial Status of the Assets . 8Table 3: Life Cycle Cost for Council Services . 10Table 4: Life Cycle Expenditure for Council Services . 10Table 5: Life Cycle Indicators. 11Table 6: Strategies and objectives for Infrastructure Services from the West Coast Community Plan2025 and West Coast Council Corporate Plan 2020-2030 . 16Table 7: Asset Management Strategies . 18Table 8: Asset Management Improvement Plan . 19FiguresFigure 1: Asset Replacement Values . 8Figure 2: Asset Consumption Ratio . 9Figure 3: Asset Condition Profile. 9West Coast Council Asset Management StrategyPage i

This page is left intentionally blankWest Coast Council Asset Management StrategyPage ii

Executive SummaryThis asset management strategy is prepared to assist council is improving the way it delivers servicesfrom infrastructure including bridges, buildings, open space, plant, roads, footpaths, andstormwater. These infrastructure assets have a replacement value of approximately 145 million.The asset management strategy is to enable Council to show: how its asset portfolio will meet the service delivery needs of its community into the future, enable Council’s asset management policies to be achieved, and ensure the integration of Council’s asset management with its long-term strategic plan.1Adopting this asset management strategy will assist council in meeting the requirements of nationalsustainability frameworks, the Local Government Act 1993 and providing services needed by thecommunity in a financially sustainable manner.The asset management strategy is prepared following a review of the council’s service deliverypractices, financial sustainability indicators, asset management maturity and fit with council’s visionfor the future outlined in the West Coast Council Community Plan 2025 (As revised). The strategyoutlines an asset management improvement plan detailing a program of tasks to be completed andresources required to bring council to a minimum ‘core’ level of asset maturity and competence.Strategic Outlook1. Service level expectations are increasing in many areas requiring additional investment andinfrastructure over the medium- to long-term. Examples of this are the intention to move fromopen to piped stormwater, increasingly sealed roads, increases in requirements for footpathquality and increases in desired sport and recreation infrastructure.2. There are increasing statutory requirements, primarily relating to building, safety, andenvironmental standards that will necessitate increases in infrastructure in some asset classes(for example in waste areas and building compliance improvements).3. The funding for new and improved infrastructure will come from a mixture of Council allocationsand external grant funding.4. In accordance with the Long-term Financial Plan Council intends to no raise rates at levelssignificantly above relevant indexes and therefore cannot absorb the cost of increasedinfrastructure.5. Assets and services in some areas will need to be reduced to offset the increases identifiedabove while aligning with Council’s Long-term Financial plan of not increasing rates at levelssignificantly above relevant indexes.1LGPMC, 2009, Framework 2 Asset Planning and Management, p 4.West Coast Council Asset Management StrategyPage 1

6. The organisation’s current asset management maturity is below ‘core’ level and investment isrequired to improve information management, lifecycle management, service management andaccountability and direction.Asset Management StrategiesNoStrategyDesired Outcome1Move from Annual Budgeting to Long Term Financial Planning2Develop and annually review Asset Management Plans covering atleast 10 years for all major asset classes (80% of asset value).3Develop Long Term Financial Plan covering 10 years incorporatingasset management plan expenditure projections with asustainable funding position outcome.Incorporate Year 1 of Long-Term Financial Plan revenue andexpenditure projections into annual budgets.Review and update asset management plans and long-termfinancial plans after adoption of annual budgets. Communicateany consequence of funding decisions on service levels andservice risks.Report Council’s financial position at Fair Value in accordancewith Australian Accounting Standards, financial sustainability, andperformance against strategic objectives in Annual Reports.Ensure Council’s decisions are made from accurate and currentinformation in asset registers, on service level performance andcosts and ’whole of life’ costs.Report on Council’s resources and operational capability todeliver the services needed by the community in the AnnualReport.Ensure responsibilities for asset management are identified andincorporated into staff position descriptions.Implement an Improvement Plan to realise ‘core’ maturity for thefinancial and asset management competencies within 2 years.The long-term implications ofCouncil services are considered inannual budget deliberations.Identification of services neededby the community and requiredfunding to optimise ‘whole of life’costs.Sustainable funding model toprovide Council services.4567891011Report six monthly to Council by GM on development andimplementation of Asset Management Strategy, AM Plans andLong-Term Financial Plans.West Coast Council Asset Management StrategyPage 2Long term financial planning drivesbudget deliberations.Council and the community areaware of changes to service levelsand costs arising from budgetdecisions.Financial sustainability informationis available for Council and thecommunity.Improved decision making andgreater value for money.Services delivery is matched toavailableresourcesandoperational capabilities.Responsibilityforassetmanagement is defined.Improved financial and assetmanagement capacitywithinCouncil.Oversight of resource allocationand performance.

Asset Management Improvement PlanThe program of tasks and resources required to achieve a minimum ‘core’ asset managementmaturity was developed in the asset management strategy. The tasks and program are shownbelow.RefTaskTarget Date12Complete Stormwater data collection to enable valuationPublish online public map of Stormwater network as per the Urban Drains Act2013Asset Management Strategy for Footpaths ready for adoptionComplete Stormwater Asset ValuationAdopt Asset Management Plan for StormwaterConduct Building Asset condition assessmentUpdate Asset Management Plan for BuildingsConduct Road Asset Condition AssessmentComplete Road Asset ValuationUpdate Road / Transport Asset Management PlanDec 2020Dec 2020345678910West Coast Council Asset Management StrategyPage 3Dec 2020Feb 2020Mar 2020Apr 2020May 20202021/222021/222021/22

1.0INTRODUCTIONAssets deliver important services to communities. A key issue facing local governments throughoutAustralia is the management of ageing assets in need of renewal and replacement.Infrastructure assets such as roads, drains, bridges, water and sewerage and public buildings presentchallenges. Their condition and longevity can be difficult to determine. Financing needs can belarge, requiring planning for large peaks and troughs in expenditure for renewing and replacing suchassets. The demand for new and improved services adds to the planning and financing complexity.2The creation of new assets also presents challenges in funding the ongoing operating andreplacement costs necessary to provide the needed service over the assets’ full life cycle.3 This isparticularly of concern on the West Coast where there are significant new assets being created (forexample MTB trails, gyms, and sealed roads).The national frameworks on asset planning and management and financial planning and reportingendorsed by the Local Government and Planning Ministers’ Council (LGPMC) require councils toadopt a longer-term approach to service delivery and funding comprising: A strategic longer-term plan covering, as a minimum, the term of office of the councillors and:o bringing together asset management and long-term financial plans,o demonstrating how council intends to resource the plan, ando consulting with communities on the plan Annual budget showing the connection to the strategic objectives, and Annual report with:o explanation to the community on variations between the budget and actual results,o any impact of such variances on the strategic longer-term plan,o report of operations with review on the performance of the council against strategicobjectives.4Framework 2 Asset Planning and Management has seven elements to assist in highlighting keymanagement issues, promote prudent, transparent, and accountable management of localgovernment assets and introduce a strategic approach to meet current and emerging challenges. Asset management policy, Strategy and planning,o asset management strategy,o asset management plan, Governance and management arrangements, Defining levels of service, Data and systems, Skills and processes, and Evaluation.52LGPMC, 2009, Framework 2 Asset Planning and Management, p 2.LGPMC, 2009, Framework 3 Financial Planning and Reporting, pp 2-3.4LGPMC, 2009, Framework 3 Financial Planning and Reporting, pp 4-5.3West Coast Council Asset Management StrategyPage 4

The asset management strategy is to enable Council to show: how its asset portfolio will meet the service delivery needs of its community into the future, to enable Council’s asset management policies to be achieved, and to ensure the integration of Council’s asset management with its long-term strategic plan.6The goal of asset management is to ensure that services are provided: in the most cost-effective manner, through the creation, acquisition, maintenance, operation, rehabilitation, and disposal of assets, for present and future consumers.The objective of the Asset Management Strategy is to establish a framework to guide the planning,construction, maintenance, and operation of the infrastructure essential for council to provideservices to the community.1.1.Legal ContextThe Local Government Act 1993 – Section 70D states that:1. A council is to prepare an asset management strategy for the municipal area.2. An asset management strategy for a municipal area is to –a. be consistent with the strategic plan for the municipal area; andb. contain at least the matters that are specified in an order made under section 70F (of theLocal Government Act 199) as required to be included in an asset management strategy.56LGPMC, 2009, Framework 2 Asset Planning and Management, p 4.LGPMC, 2009, Framework 2 Asset Planning and Management, p 4.West Coast Council Asset Management StrategyPage 5

1.2Asset Management Planning ProcessAsset management planning is a comprehensive process to ensure that assets are managed andmaintained in a way that enables affordable services from infrastructure to be provided in aneconomically optimal way. In turn, affordable service levels can only be determined by assessingCouncil’s financially sustainability under scenarios with different proposed service levels.Asset management planning commences with defining stakeholder and legal requirements andneeds, incorporating these needs into the organisation’s strategic plan, developing an assetmanagement policy, strategy, asset management plan and operational plans, linked to a long-termfinancial plan with a funding plan.7Asset Management Planning ProcessOrganisational Strategic PlanStrategicPlanningLegal and Stakeholder Requirementsand ExpectationsVision, Mission, Goals & Objectives,Levels of Service, Business Policies, RiskASSET MANAGEMENT POLICYASSET MANAGEMENT STRATEGYASSET MANAGEMENT PLANSTacticalPlanningObjectives, level of service target and plansServices & service levels to be provided,funds required to provide servicesServiceDeliveryOPERATIONAL PLANSService delivery in accordance with assetmanagement plansAsset solutions – operate, maintain, renew,enhance, retireNon-asset solutions – partnerships, demandmanagement, insurance, failure managementKnowledgeKNOWLEDGE MANAGEMENTOperationalPlanningASSET MANAGEMENT PLANNINGAssetManagementPhilosophy &FrameworkAsset data and information systemsFor some assets Council will manage assets using a specific strategy. These include: westcoast.tas.gov.au/ data/assets/pdf ps://www.westcoast.tas.gov.au/ data/assets/pdf tation-Report-Copy-final.pdf ttps://www.westcoast.tas.gov.au/ data/assets/pdf egy-and-Business-Plan-120917.pdf7IPWEA, 2009, AIFMG, Quick Guide, Sec 4, p 5.West Coast Council Asset Management StrategyPage 6

8)https://www.westcoast.tas.gov.au/ data/assets/pdf n-infrastructure-2018-2018-2.pdf .tas.gov.au/ data/assets/pdf Coast-2019-FINAL-public.pdf.2.0-WHAT ASSETS DO WE HAVE?Council uses infrastructure assets to provide services to the community. The range of infrastructureassets and the services provided from the assets is shown in Table 1.Table 1: Assets used for providing Services.Asset ClassDescriptionRoadsAll road assets including roadpavements, road surfaces, roadformations, kerb and channel,footpaths, cycle ways, retaining walls,stormwaterassetsandstreetfurnitureBridges (pedestrian and vehicular),jetties, boardwalks, viewing platformsand major culverts (as per GrantsCommission ces ProvidedPublicbuildings,operationalinstallations, cultural, recreationalfacilities and leased buildings, pools.andLandGenerallymovableinternalfurnishings which are carried at coston Council’s balance sheetCouncil owned LandOther StructuresInfrastructure assets which do notreadily fit into another asset categoryPlantEquipmentPlant and equipment used to supportthe operational activities of Council.andWest Coast Council Asset Management StrategyPage 7Transportation of goods and services fromproduction to market and to consumers.Movement of people around the Councilarea for business, education, recreation andleisure.Provides for the safe passage of vehiclesand pedestrians.Designed to permit the safe passage ofstorm and flood flowsSupports the delivery of a range of servicesand infrastructure to the community.Facilitates a large range of culture andcommunity activities.Land for Council Buildings, Facilities, OpenSpace and RoadsSupport the provision of a range of servicesto the community.

3.0THE ORGANISATION’S ASSETS AND THEIR MANAGEMENT3.1State of the AssetsThe financial status of the organisation’s assets is shown in Table 2.Table 2: Financial Status of the AssetsAsset ClassReplacementCost( 000)DepreciableAmount( 000)DepreciatedReplacementCost ( 000)DepreciationExpense( 5118,272437Furniture & Fittings85685634883Land (inc. land under roads)8,57208,5720Other Structures1,8311,8311,68831Plant & Equipment5,5225,5222,946471Roads (inc. stormwater 2,3902,422* Figures do not include WIP or leased assetsFigure 1 shows the replacement values of Council’s assets.Figure 1: Asset Replacement ValuesWest Coast Council Asset Management StrategyPage 8

The asset consumption ratios of Council’s assets (average proportion of ‘as new’ condition left inassets) are shown in Figure 2.Figure 2: Asset Consumption RatioAccording to figure 2 all asset classes have not been consumed past 45% this is a good indication that WestCoast Council assets have a significant amount of useful life remaining.The condition of Council’s assets is shown in Figure 3.Figure 3: Asset Condition ProfileFigure 3 shows average asset condition for each class of asset.Bridge assets were conditionally assessed by AusSpan - Bridge Asset Management specialists in2020. AusSpan conduct condition and safety assessments of Coun

The asset management strategy is to enable Council to show: how its asset portfolio will meet the service delivery needs of its community into the future, to enable Council’s asset management policies to be achieved, and to ensure the integration of Council’s asset management

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