bridges - asset management plan

Bridges - Asset ManagementPlan

S2_V1 Capital - Forward Estimates Works Program

Endorsed May 2017

Reviewed December 2018

CITY OF VICTOR HARBOR – BRIDGES ASSET MANAGEMENT PLAN of 69

Document Control

Document ID: 59.299.130925 nams.plus2 amp template v4

RevNo

Date Revision Details Author Reviewer Approver

1 November 2016 NAMS PLUS2 Asset Plan and ExpenditureBridges S2_V1 Capital Works Program

DEIS - GS DEIS - GSSMTMF - KKSIO - JSMI - BH

2 21 November 2016 Elected Members Workshop – Cancelled DEIS3 5 December 2016 Finance Audit Committee DEIS Audit

Committee4 6 December 2016 Elected Members Workshop DEIS EM5 6 December 2016 Item: 5.1.4 Asset Valuations

Amend Depreciable AmountDEIS

6 9 December 2016 Remove Operating Projects from Capital DEIS7 January 2017 Public Consultation DEIS

8 February 2017 Review and Amend Renewal and New/UpgradeProjects – Percentage Amounts

DEIS

9 1 May 2017 Finance Audit CommitteeResolution No. AC212017

That the Audit Committee recommends:

That Council approve the Infrastructure AssetManagement Policy, Strategy and Plans asattached and provided.

That the Infrastructure Asset ManagementPlans as presented are incorporated intoCouncil's Long Term Financial Plan.

DEIS FinanceAuditCommittee

10 22 May 2017 Ordinary Council MeetingResolution No. OC2682017

That Council approve the Infrastructure AssetManagement Policy, Strategy and Plans(provided to Elected Members on 27 April 2017under separate cover to the agenda). That theInfrastructure Asset Management Plans aspresented are incorporated into Council’s LongTerm Financial Plan.

DEIS Council Council

11 December 2018 Review & Amend Condition Assessment /Forward Estimate Works Program

DEIS SMT/MI/MER/MO/BFO/MI/MF

SMT

© Copyright 2012 – All rights reserved.

The Institute of Public Works Engineering Australia.

www.ipwea.org.au/namsplus


Table of Contents1. Executive Summary 5

Context 5What does it cost? 5What we will do 5What we cannot do 5Managing the risks 5Confidence levels 5The next steps 5Questions you may have 6

2. Introduction 72.1 Background 72.2 Goals and Objectives of Asset Management 92.3 Plan Framework 92.4 Core and Advanced Asset Management 112.5 Community Consultation 11

3. Levels of Service 113.1 Customer Research and Expectations 113.2 Strategic and Corporate Objectives 123.3 Legislative Requirements 123.4 Current Levels of Service 133.5 Desired Levels of Service 15

4. Future Demand 154.1 Demand Drivers 154.2 Demand Forecast 154.3 Demand Impact on Assets 154.4 Demand Management Plan 164.5 Asset Programs to meet Demand 17

5 Lifecycle Management Plan 185.1 Background Data 185.2 Infrastructure Risk Management Plan 225.3 Routine Operations and Maintenance Plan 235.4 Renewal/Replacement Plan 265.5 Creation/Acquisition/Upgrade Plan 295.6 Disposal Plan 305.7 Service Consequences and Risks 31


6. Financial Summary 326.1 Financial Statements and Projections 326.2 Funding Strategy 356.3 Valuation Forecasts 366.4 Key Assumptions made in Financial Forecasts 376.5 Forecast Reliability and Confidence 38

7. Plan Improvement and Monitoring 407.1 Status of Asset Management Practices 407.2 Improvement Program 407.3 Monitoring and Review Procedures 427.4 Performance Measures 42

8. References 43

9. Appendices 44Appendix A Maintenance Response Levels of Service 45Appendix B Projected 10 year Capital Renewal and Replacement Works Program46Appendix C Projected Upgrade/Exp/New 10 year Capital Works Program 49Appendix D Budgeted Expenditures Accommodated in LTFP 53Appendix E Gifted Assets 2010 - 30 June 2018 54Appendix F Aerial Plans - Existing Bridge Locations 55Appendix G Abbreviations 61Appendix H Glossary 62


1. Executive SummaryContextCouncil provides a Bridge network to enable asafe, well maintained, fit for purpose crossing inaccordance with Councils service deliveryobjective.

The Bridge services cannot be provided withoutthe proper construction and maintenance of thesupporting assets. The renewal andmaintenance of these assets is critical tosuccessful service delivery.

The Bridge network comprises: 17 Vehicle Bridges, 5 Pedestrian

Footbridges and 9 Major Culverts under thecare, control & management of the City ofVictor Harbor.

These infrastructure assets have a replacementvalue of $26,348,000

What does it Cost?

The projected outlays necessary to provide theservices covered by this Asset ManagementPlan (AM Plan) includes operations,maintenance, renewal and upgrade of existingassets over the 10 year planning period is$1,369,000 or $137,000 on average per year.

Estimated available funding for this period is$1,368,000 or $137,000 on average per yearwhich is 100% of the cost to provide the service.This is a funding of $-0 on average per year.Projected expenditure required to provideservices in the AM Plan compared with plannedexpenditure currently included in the Long TermFinancial Plan are shown in the graph below.

What we will doWe plan to provide Bridge services for thefollowing: Operation, maintenance, renewal and

upgrade of bridges to meet service levels setin annual budgets.

Carry out annual bridge repair andconstruction works that align with our latestcondition assessments of bridges within the10 year planning period.

What we cannot doWe do not have enough funding to provide allservices at the desired service levels or providenew services. Works and services that cannot beprovided under present funding levels are: Create new bridges

Managing the RisksThere are risks associated with providing theservice and not being able to complete allidentified activities and projects. We haveidentified major risks as: Lack of or no guard railing Structural integrity

We will endeavour to manage these risks withinavailable funding by: Action Plan Understand the ongoing costs through the

audit committee & council

Confidence LevelsThis AM Plan is based on High level ofconfidence information.

The Next StepsThe actions resulting from this assetmanagement plan are: Review Works Program Ongoing review of service levels Advise audit committee Advise Council Annually review useful lives


Questions you may have

What is this plan about?This asset management plan covers theinfrastructure assets that serve the City of VictorHarbor community’s Bridge’s needs. Theseassets include all bridges throughout thecommunity area that enable vehicles to use thebridge network in safe manner.

What is an Asset Management Plan?Asset management planning is a comprehensiveprocess to ensure delivery of services frominfrastructure is provided in a financiallysustainable manner.

An asset management plan details informationabout infrastructure assets including actionsrequired to provide an agreed level of service inthe most cost effective manner. The plandefines the services to be provided, how theservices are provided and what funds arerequired to provide the services.

Why is there a funding shortfall?Most of the organisation’s bridges network wasconstructed by developers and from governmentgrants, often provided and accepted withoutconsideration of ongoing operations,maintenance and replacement needs.

Many of these assets are approaching the lateryears of their life and require replacement,services from the assets are decreasing andmaintenance costs are increasing.

Our present funding levels are insufficient tocontinue to provide existing services at currentlevels in the medium term.

What options do we have?Resolving the funding shortfall involves severalsteps:1. Improving asset knowledge so that data

accurately records the asset inventory, howassets are performing and when assets arenot able to provide the required servicelevels,

2. Improving our efficiency in operating,maintaining, renewing and replacing existingassets to optimise life cycle costs,

3. Identifying and managing risks associatedwith providing services from infrastructure,

4. Making trade-offs between service levelsand costs to ensure that the communityreceives the best return from infrastructure,

5. Identifying assets surplus to needs fordisposal to make saving in future operationsand maintenance costs,

6. Consulting with the community to ensurethat bridges services and costs meetcommunity needs and are affordable,

7. Developing partnership with other bodies,where available to provide services,

8. Seeking additional funding fromgovernments and other bodies to betterreflect a ‘whole of government’ fundingapproach to infrastructure services.

What happens if we don’t manage theshortfall?It is likely that we will have to reduce servicelevels in some areas, unless new sources ofrevenue are found. For bridges, the service levelreduction may include a lower standard of bridgethat requires higher levels of maintenance due toa longer renewal period.

What can we do?We can develop options, costs and priorities forfuture bridge services, consult with thecommunity to plan future services to match thecommunity service needs with ability to pay forservices and maximise community benefitsagainst costs.

What can you do?We will be pleased to consider your thoughts onthe issues raised in this asset management planand suggestions on how we may change orreduce the bridges mix of services to ensure thatthe appropriate level of service can be providedto the community within available funding.


2. Introduction2.1 BackgroundThis asset management plan is to demonstrate responsive management of assets (and servicesprovided from assets), compliance with regulatory requirements, and to communicate fundingneeded to provide the required levels of service over a 20 year planning period.

The asset management plan follows the format for AM Plans recommended in Section 4.2.6 ofthe International Infrastructure Management Manual1.

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

Community Plan 2036 and Strategic Directions 2016-2020 Long Term Financial Plan (LTFP) City of Victor Harbor Pedestrian Strategy Victor Harbor Urban Growth Strategy Past Population Growth & Future Projections Report 2005 Victor Harbor Traffic Management Strategy 2005 Victor Harbor Coastal Management Study 2013 WGA 2017 – Level 2, Bridge Condition Assessment Report

The infrastructure assets covered by this asset management plan are shown in Table 2.1. Theseassets are used to provide safe and efficient pedestrian and vehicles services to its community.

Table 2.1: Assets covered by this PlansAsset category Number Replacement ValueBridge - Vehicle 17 $19,944,025.28Footbridge – Pedestrian 5 $2,515,080.52Major Culvert 9 $3,888,825.57TOTAL 51 $26,347,931.37

Key stakeholders in the preparation and implementation of this asset management plan are:Shown in Table 2.1.1.

Table 2.1.1: Key Stakeholders in the AM Plan

Key Stakeholder Role in Asset Management PlanElected Members Represent needs of community/shareholders,

Allocate resources to meet the organisation’s objectives in providingservices while managing risks,Ensure organisation is financial sustainable.

Chief Executive Officer Driver of council plans and directionCommunity Consumers of service

1 IPWEA, 2011, Sec 4.2.6, Example of an Asset Management Plan Structure, pp 4|24 – 27.


Visitors Consumers of serviceManager Infrastructure Capital Works ProgramManager Finance Long Term Financial Plan & Annual BudgetsManager Operations Capital Works and Maintenance Programs

Our organisation’s organisational structure for service delivery from infrastructure assets isdetailed below:


2.2 Goals and Objectives of Asset ManagementThe organisation exists to provide services to its community. Some of these services areprovided by infrastructure assets. We have acquired infrastructure assets by ‘purchase’, bycontract, construction by our staff and by donation of assets constructed by developers andothers to meet increased levels of service.

Our goal in managing infrastructure assets is to meet the defined level of service (as amendedfrom time to time) in the most cost effective manner for present and future consumers. The keyelements of infrastructure asset management are:

Providing a defined level of service and monitoring performance, Managing the impact of growth through demand management and infrastructure

investment, Taking a lifecycle approach to developing cost-effective management strategies for the

long-term that meet the defined level of service, Identifying, assessing and appropriately controlling risks, and Having a long-term financial plan which identifies required, affordable expenditure and

how it will be financed.2

2.3 Plan FrameworkKey elements of the plan are

Levels of service – specifies the services and levels of service to be provided by theorganisation,

Future demand – how this will impact on future service delivery and how this is to be met, Life cycle management – how we will manage our existing and future assets to provide

defined levels of service, Financial summary – what funds are required to provide the defined services, Asset management practices, Monitoring – how the plan will be monitored to ensure it is meeting the organisation’s

objectives, Asset management improvement plan.

A road map for preparing an asset management plan is shown below.

2 Based on IPWEA, 2011, IIMM, Sec 1.2 p 1|7.


Road Map for preparing an Asset Management PlanSource: IPWEA, 2006, IIMM, Fig 1.5.1, p 1.11.


2.4 Core and Advanced Asset ManagementThis asset management plan is prepared as a ‘core’ asset management plan over a 20 yearplanning period in accordance with the International Infrastructure Management Manual3. It isprepared to meet minimum legislative and organisational requirements for sustainable servicedelivery and long term financial planning and reporting. Core asset management is a ‘top down’approach where analysis is applied at the ‘system’ or ‘network’ level.

Future revisions of this asset management plan will move towards ‘advanced’ asset managementusing a ‘bottom up’ approach for gathering asset information for individual assets to support theoptimisation of activities and programs to meet agreed service levels.

2.5 Community ConsultationThis ‘core’ asset management plan is prepared to facilitate community consultation initially throughfeedback on public display of draft asset management plans prior to adoption by the Council.Future revisions of the asset management plan will incorporate community consultation on servicelevels and costs of providing the service. This will assist the Council and the community in matchingthe level of service needed by the community, service risks and consequences with thecommunity’s ability and willingness to pay for the service.

3. Levels of Service3.1 Customer Research and ExpectationsCouncil participated in the 2012 Local Government Roy Morgan Customer Satisfaction survey.This telephone survey polls a sample of residents on their level of satisfaction with theorganisation’s services. The most recent customer satisfaction survey reported satisfaction levelsfor the following services.

Table 3.1: Community Satisfaction Survey Levels

Performance Measure Satisfaction LevelVery

SatisfiedFairly

SatisfiedSatisfied Somewhat

satisfiedNot

satisfiedImportance that Council provides& maintains roads, footpaths &cycle tracks.

√

Mean (outof 10) 9.22

Performance in providing &maintaining roads, footpaths &cycle tracks.

√

Mean (outof 10) 5.94

The organisation uses this information in developing its Strategic Plan and in allocation ofresources in the budget

3 IPWEA, 2011, IIMM.


3.2 Strategic and Corporate ObjectivesThe Victor Harbor Community Plan 2036 will help shape the future of Victor Harbor for the next20 years. It highlights the opportunities that have shaped our thinking and describes in broadterms how we plan to achieve our vision - A city that offers opportunity and lifestyle.

To achieve the Vision Council has identified five broad, interlinked objectives.

Objective 1 - Healthy environments

Objective 2 - Attractive lifestyle and inclusive community

Objective 3 - A thriving local economy

Objective 4 - Services and infrastructure supporting the community

Objective 5 - An innovative Council empowering the community

The Strategic Directions inform Council’s annual business plans, work plans and budgets whichdetail what Council will do to achieve its objectives. Council’s Long Term Financial Plan andAsset Management Plan are also informed by the Community Plan.

Table 3.2: Organisation Goals and how these are addressed in this Plan

Goal Objectives

Assets & Infrastructure that are developed,managed and maintained so that they providethe levels of service needs to the community.

Objective 1 - Healthy environments

Objective 2 - Attractive lifestyle and inclusive community

Objective 3 - A thriving local economy

Objective 4 - Services and infrastructure supporting thecommunity

Objective 5 - An innovative Council empowering the community

The Council will exercise its duty of care to ensure public safety in accordance with theinfrastructure risk management plan prepared in conjunction with this AM Plan. Management ofinfrastructure risks is covered in Section 5.2

3.3 Legislative RequirementsWe have to meet many legislative requirements including Australian and State legislation andState regulations. These include:

Table 3.3: Legislative Requirements

Legislation RequirementLocal Government Act 1999 Sets out role, purpose, responsibilities and powers of local governments

including the preparation of a long term financial plan supported by assetmanagement plans for sustainable service delivery.

Environmental Protection Act Sets out role, purpose, responsibilities of local government in protecting theenvironment.


WHS Act Sets out role, purpose, responsibilities of local government in providing safework practices and worksites.

Australian Road Rules and RoadSafety Act

Set of model road rules developed by the National Road TransportCommission (NRTC) which form the platform for State and Territory roadrules across Australia. The first edition of the Rules was published on 19October 1999, and marked a milestone in road safety policy and legislationacross Australia.

Native Vegetation Act Provides incentives and assistance to landowners in relation to thepreservation and enhancement of native vegetation; to control the clearanceof native vegetation; and for other purposes.

River Murray Act Provides for the protection and enhancement of the River Murray and relatedareas and ecosystems; and for other purposes.

Coastal Protection Act Provides provision for the conservation and protection of the beaches andcoast of this State; and for other purposes.

Mutual Liability Scheme Sets out role, purpose, responsibilities of local government in managing riskand liabilities.

AAS27 Sets out responsibilities of local government for maintaining accountingstandards.

Australian Standards and AUS PEC Covers minor civil works NATSPEC’s major service is providing a nationalmaster specification to the construction industry.

3.4 Current Levels of ServiceWe have defined service levels in two terms.

Community Levels of Service measure how the community receives the service and whetherthe organisation is providing community value.

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

Quality How good is the service?Function Does it meet users’ needs?Capacity/Utilisation Is the service over or under used?

Technical Levels of Service - Supporting the community service levels are operational ortechnical measures of performance. These technical measures relate to the allocation ofresources to service activities that the organisation undertakes to best achieve the desiredcommunity outcomes and demonstrate effective organisational performance.

Technical service measures are linked to annual budgets covering:

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

Maintenance – the activities necessary to retain an asset as near as practicable to an appropriateservice condition (eg road patching, unsealed road grading, building and structure repairs),

Renewal – the activities that return the service capability of an asset up to that which it hadoriginally (eg frequency and cost of road resurfacing and pavement reconstruction, pipelinereplacement and building component replacement),

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


Asset managers plan, implement and control technical service levels to influence the customerservice levels.4

Our current service levels are detailed in Table 3.4.

Table 3.4: Current and Desired Service LevelsKey

PerformanceMeasure

Level of ServiceObjective

PerformanceMeasureProcess

Current Level ofService

Optimal Level ofService

COMMUNITY LEVELS OF SERVICE

Quality Well maintained bridgeassets.

LGA AnnualCustomerSurvey

ConditionAssessment

CustomerRequestSystem

Achieve the Stateaverage satisfaction levelof 6.89, 2012

Condition rating <3

<1 requests per annum

Maintain current stateaverage

Condition rating <3

<1 requests per annum

Function Fit for purpose. Meetingstandards anddesigns

Meeting compliance Meeting compliance

Capacity/Utilisation

Meeting traffic capacityas well as rain events.

CustomerRequestSystem

Meeting compliance Meeting compliance

TECHNICAL LEVELS OF SERVICE

Quality ConditionStructural Defects

VisualInspection

Revaluation andcondition assessmentcarried out every 4 years

Revaluation andcondition assessmentcarried out every 4years

Quantity Prevent Flooding Inspections Eliminate safety issuesidentified from theinspection

Eliminate safety issuesidentified from theinspection

Safety Condition ConditionAssessment

Condition rating <3 Condition rating <3

Function Fit for Purpose Compliancewith DesignStandards

Meeting of standardrequirements

Meeting of standardrequirements

4 IPWEA, 2011, IIMM, p 2.22


3.5 Desired Levels of ServiceIndications of desired levels of service are obtained from community consultation/engagement.The asset management planning process includes the development of 3 scenarios to developlevels of service that are financially sustainable.

4. Future Demand4.1 Demand DriversDrivers affecting demand include population change, changes in demographics, seasonalfactors, vehicle ownership rates, consumer preferences and expectations, technologicalchanges, economic factors, agricultural practices, environmental awareness, etc.

4.2 Demand ForecastThe present position and projections for demand drivers that may impact future service deliveryand utilisation of assets were identified and are documented in Table 4.3.

4.3 Demand Impact on AssetsThe impact of demand drivers that may affect future service delivery and utilisation of assets areshown in Table 4.3.

Table 4.3: Demand Drivers, Projections and Impact on ServicesThe Department of Planning, Transport and Infrastructure (DPTI) recently released the officialpopulation projections for local government areas across the State based on the 2011 Censusreport.

The following table shows that latest population projections for Victor Harbor and compares theseto the previous projections.

Table 1: ABS Population

2006 Census

Projections

2011 Census

Projections

2016 Victor Harbor base population – 14,670

2016 16,171 15,607

2021 17,673 17,319

2026 19,343 19,204


2031 21,231

These figures indicate that Victor Harbor’s population is not expected to grow as quickly as initiallythought. Of particular note is the significant reduction in population growth anticipated between2011 and 2016, which when projected over subsequent five-year periods, results in a slightly lowerpopulation for the City by 2026 (by 139 persons or 0.8%). The number of people aged 65 and overwas projected to be in the order of 35.5% of the total population by 2026. The most recentprojections indicate that by 2031, the number of people aged 65 and over in Victor Harbor willmake up nearly 40% of the total population.

Demand drivers Present position Projection Impact on services

Population 14,670 21,231 in 2031 Increase in demand forservices.

Demographics The increase in population isexpected to occur mainly inthe older demographic of65+.

The increase in populationof 1.5% per annum isexpected to continue in thebuilt up area of the cityrather than in the ruralareas.

The infrastructure willincreasingly have to caterfor additional traffic,involving upgradingexisting and supplying newinfrastructure includingfootpaths, pedestrianaccess locations andparking.

Climate Change Coastal Erosion Sea Level Rise – 3mm/year Before year 2050 Sea levelinundation is likely to showsome impact on Councilsinfrastructure. Refer to2013 AWE CoastalManagement Study.

Climate Change Coastal Erosion Sea Level Rise – 3mm/year Before year 2100 Sea levelinundation is likely to cause‘significant’ impact onCouncils infrastructure.Refer to 2013 AWECoastal ManagementStudy.

4.4 Demand Management PlanDemand for new services will be managed through a combination of managing existing assets,upgrading of existing assets and providing new assets to meet demand and demand management.Demand management practices include non-asset solutions, insuring against risks and managingfailures.

Non-asset solutions focus on providing the required service without the need for the organisationto own the assets and management actions including reducing demand for the service, reducingthe level of service (allowing some assets to deteriorate beyond current service levels) or educatingcustomers to accept appropriate asset failures5. Examples of non-asset solutions include providing

5 IPWEA, 2011, IIMM, Table 3.4.1, p 3|58.


services from existing infrastructure such as aquatic centres and libraries that may be in anothercommunity area or public toilets provided in commercial premises.

Opportunities identified to date for demand management are shown in Table 4.4. Furtheropportunities will be developed in future revisions of this asset management plan.

Table 4.4: Demand Management Plan SummaryDemand Driver Impact on Services Demand Management Plan

Development of newresidentialsubdivisions

Can affect future capacityand utilisationrequirements

To meet requirements of township developmentplans.

Creation of newassets

Increased service level Utilisation and demand.

4.5 Asset Programs to meet DemandThe new assets required to meet growth will be acquired free of cost from land developments andconstructed/acquired by the organisation. New assets constructed/acquired by the organisationare discussed in Section 5.5. The cumulative value of new contributed and constructed assetvalues are summarised in Figure 1.

Figure 1: Upgrade and New Assets to meet Demand

Acquiring these new assets will commit the organisation to fund ongoing operations, maintenanceand renewal costs for the period that the service provided from the assets is required. These futurecosts are identified and considered in developing forecasts of future operations, maintenance.


5 Lifecycle Management PlanThe lifecycle management plan details how the organisation plans to manage and operate theassets at the agreed levels of service (defined in Section 3) while optimising life cycle costs.

5.1 Background Data

5.1.1 Physical parametersThe assets covered by this asset management plan are shown in Table 2.1.

Asset category Number Replacement ValueBridge - Vehicle 17 $19,944,025.28Footbridge – Pedestrian 5 $2,515,080.52Major Culvert 9 $3,888,825.57TOTAL 51 $26,347,931.37

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

Figure 2: Asset Age Profile

5.1.2 Asset capacity and performanceThe organisation’s services are generally provided to meet design standards where these areavailable.

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


Table 5.1.2: Known Service Performance Deficiencies

Location Service Deficiency

General Maintenance toBridges

Without addressing Council’s bridge assets appropriately to ensurethat they were maintained ‘fit for purpose’ to minimise potential liabilityclaims. We are now in position to better manage these assets, subjectthat funds are provided for ongoing maintenance requirements.

Capital expenditure is also required to continue the renewal / newupgrade of guard railing to appropriate standards.

The above service deficiencies were identified from the past bridge revaluations whichincorporated a condition assessment during 2018.

5.1.3 Asset conditionCondition is monitored in accordance with methods developed by IPWEA outlined in theInternational Infrastructure Management Manual (IIMM).

This approach was adopted here as the methods used in systems available locally at reasonableprices either did not rate the key attributes or attempted to force fit those attributes collected intoother fields which obscured the output. This had resulted in some practitioners adopting paralleland somewhat independent databases based upon experience with their networks and to achieveoutputs which more closely matched the actual field conditions.

The approach at City of Victor Harbor was to incorporate all relevant attribute criteria at the datacollection with allowance for possible future changes and to accommodate system upgrades.

Refinements are continuing on the bridge asset register database.

The condition profile of our assets is shown in Figure 3.

Fig 3: Asset Condition Profile


Condition CRC ($'000) Weight (%)0 $0 0%1 $21,952 83%2 $4,259 16%3 $137 1%4 $0 0%5 $0 0%

*all dollar values in ($'000)'s

Not Rated 0 % 100 % 100 %

Good /Very Good

99.5 % 0 % 0 %

Fair 0.5 % 0 % 0 %

Poor /Very Poor

0 % 0 % 0 %


Condition is measured using a 0 – 6 grading system6 as detailed in Table 5.1.3.

Table 5.1.3: Simple Condition Grading Model

ConditionGrading

Description of Condition

0 Brand New: Asset is brand new.1 Very Good: Near as new condition with no defects.2 Good: Superficial deterioration. No issue with reliability. No maintenance is required.3 Fair: Minor deterioration present. Routine maintenance may be required.4 Poor: Significant deterioration present. Requires maintenance to keep the asset serviceable and

programming for renewal/rehabilitation on forward 5 year works program.5 Very Poor: Extensive deterioration present. Requires significant maintenance to keep the asset

serviceable and programming for renewal/rehabilitation within the following year.6 End of Life: Asset is unserviceable and provides no service. Asset cannot be used.

5.1.4 Asset valuationsThe value of assets recorded in the asset register as at December 2018 covered by this assetmanagement plan is shown below. Assets were last revalued financial year 2017-18. Assets arevalued at fair-value asset accounting based on AASB116 (Australian Accounting Standard Board).Refer to Attachment Valuation Methodology.

Current Replacement Cost $26,348,000

Depreciable Amount $26,348,000

Depreciated Replacement Cost7 $22,245,000

Annual Depreciation Expense $256,000

Useful lives were reviewed during financial year 2017-18 by detailed condition analysis.

Key assumptions made in preparing the valuations were:

Using local projects or from else where Using local data (metric unit rates) That the Bridge Asset Register is a true reflection of the actual network dimensions & composition

Major changes from previous valuations are due to better knowledge of the current networkprofile and history of works completed as well as the impact of market forces of materialsrequired for construction and renewal.

Various ratios of asset consumption and expenditure have been prepared to help guide andgauge asset management performance and trends over time.

Rate of Annual Asset Consumption 1%(Depreciation/Depreciable Amount)

Rate of Annual Asset Renewal 0.2%(Capital renewal exp/Depreciable amount)

6 IPWEA, 2011, IIMM, Sec 2.5.4, p 2|79.7 Also reported as Written Down Current Replacement Cost (WDCRC).


Rate of Annual Asset Upgrade/New 0.1%(Capital upgrade exp/Depreciable amount)

Rate of Annual Asset Upgrade/New 0%(Including contributed assets)

In 2018 Council plans to renew assets at 15.6% of the rate they are being consumed and will be increasingits asset stock by 0% in the year.

5.1.5 Historical Data

Capital Expenses

2018-19

Budget

2017-18

Actual

2016-17

Actual

2015-16

Actual

2014-15

Actual

2013-14

Actual

$40,000 $000 $76,000 $000 (movedto operatingbudget line)

$55,476 $167,104

Total $40,000 $000 $76,000 $000 $55,476 $167,104

Maintenance Expenses

Account

Number

2018-19

Budget

2017-18

Actual

2016-17

Budget

2015-16

Actual

2014-15

Actual

2013-14

Actual

63750

Maintenance

$12,800 $000 $81,835 $21,599 $34,770 $000

63799

Other Expenses

$000 $000 $500 $000 $000 $1,311

Total $12,800 $000 $82,335 $21,599 $34,770 $1,311

Operation Expenses (Bridge Insurance)

Account

Number

2018-19

Budget

2017-18

Actual

2016-17

Actual

2015-16

Actual

2014-15

Actual

2013-14

Actual

63723

Insurance

$58,800 $57,223 $56,378 $54,833 $54.833 $51,723

Total $58,800 $57,223 $56,378 $54,833 $54,833 $51,723


5.2 Infrastructure Risk Management PlanAn assessment of risks8 associated with service delivery from infrastructure assets has identifiedcritical risks that will result in loss or reduction in service from infrastructure assets or a ‘financialshock’ to the organisation. The risk assessment process identifies credible risks, the likelihood ofthe risk event occurring, the consequences should the event 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’– requiring prioritised corrective action identified in the Infrastructure Risk Management Plan,together with the estimated residual risk after the selected treatment plan is operational aresummarised in Table 5.2. These risks are reported to management and Council.

Table 5.2: Critical Risks and Treatment Plans

Service orAsset at Risk

What canHappen

RiskRating

(VH,H)

Risk Treatment Plan ResidualRisk *

TreatmentCosts

Guard railing Vehicle fallingover the side ofa bridge.

H Replace & place newguard railing

M $200 L/Metre(approx.)

StructuralIntegrity

Bridge failing,not fit forpurpose.

H Ongoing bridge structuralintegrity inspectionsundertaken every 3-4years, whilst, undertakingrevaluations.

L $45,000

Note * The residual risk is the risk remaining after the selected risk treatment plan is operational.Sample above, Refer to Bridges Infrastructure Risk Management Plan

5.3 Routine Operations and Maintenance PlanOperations include regular activities to provide services such as public health, safety and amenity,eg street sweeping, grass mowing and street lighting.

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

5.3.1 Operations and Maintenance PlanOperations activities affect service levels including quality and function through street sweepingand grass mowing frequency, intensity and spacing of street lights and cleaning frequency andopening hours of building and other facilities.

Maintenance includes all actions necessary for retaining an asset as near as practicable to anappropriate service condition including regular ongoing day-to-day work necessary to keep assets

8 Organisation’s Infrastructure Risk Management Plan


operating, e.g. road patching but excluding rehabilitation or renewal. Maintenance may beclassifies into reactive, planned and specific maintenance work activities.

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 maintenancemanagement system (MMS). MMS activities include inspection, assessing the condition againstfailure/breakdown experience, prioritising, scheduling, actioning the work and reporting what wasdone to develop a maintenance history and improve maintenance and service deliveryperformance.

Specific maintenance is replacement of higher value components/sub-components of assets thatis undertaken on a regular cycle including repainting, replacing air conditioning units, etc. This workfalls below the capital/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 ExpenditurePlanned and Specific Unplanned

2013-14 $1,311 $0002014-15 $34,700 $0002015-16 $21,599 $0002016-17 $82,335 $0002017-18 $000 $0002018-19 (Budget) $12,800 $000

Planned maintenance work is currently 100% of total maintenance expenditure.

Maintenance expenditure levels are considered to be adequate to meet projected service levels,which may be less than or equal to current service levels. Where maintenance expenditure levelsare such that will result in a lesser level of service, the service consequences and service riskshave been identified and service consequences highlighted in this AM Plan and service risksconsidered in the Infrastructure Risk Management Plan.

Assessment and prioritisation of reactive maintenance is undertaken by the organisation’s staffusing experience and judgement.

5.3.2 Operations and Maintenance StrategiesThe organisation will operate and maintain assets to provide the defined level of service toapproved budgets in the most cost-efficient manner. The operation and maintenance activitiesinclude:

Scheduling operations activities to deliver the defined level of service in the most efficientmanner,

Undertaking maintenance activities through a planned maintenance system to reducemaintenance costs and improve maintenance outcomes. Undertake cost-benefit analysisto determine the most cost-effective split between planned and unplanned maintenanceactivities (50 – 70% planned desirable as measured by cost),

Maintain a current infrastructure risk register for assets and present service risks associatedwith providing services from infrastructure assets and reporting Very High and High risksand residual risks after treatment to management and Council


Review current and required skills base and implement workforce training and developmentto meet required operations and maintenance needs,

Review asset utilisation to identify underutilised assets and appropriate remedies, and overutilised assets and customer demand management options,

Maintain a current hierarchy of critical assets and required operations and maintenanceactivities,

Develop and regularly review appropriate emergency response capability, Review management of operations and maintenance activities to ensure the organisation

is obtaining best value for resources used.

Asset hierarchy

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

The organisation’s service hierarchy is shown is Table 5.3.2.

Table 5.3.2: Asset Service Hierarchy

Service Hierarchy Service Level ObjectiveCollector Road - Bridge High Service LevelDistributor Road - Bridge High Service LevelMinor Roads / Streets High Service Level

Critical Assets

Critical assets are those assets which have a high consequence of failure but not necessarily ahigh likelihood of failure. By identifying critical assets and critical failure modes, organisations cantarget and refines investigative activities, maintenance plans and capital expenditure plans at theappropriate time.

Operations and maintenances activities may be targeted to mitigate critical assets failure andmaintain service levels. These activities may include increased inspection frequency, highermaintenance intervention levels, etc. Critical assets failure modes and required operations andmaintenance activities are detailed in Table 5.3.2.1.

Table 5.3.2.1: Critical Assets and Service Level Objectives

Critical Assets Critical Failure Mode Operations & Maintenance ActivitiesState Arterial Roads Bridges – Hindmarsh Road

and Victoria StreetState Government responsibility to manage andmaintain

Standards and specifications

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

ARRB Unsealed Roads Manual AAPA National Sealing Specification Austroads Guide to Spray Sealing ARRB Sealed Local Roads Manual City of Victor Harbor Work Method Statements City of Victor Harbor Service Levels Australian Standard 2150 Hotmix Asphalt


5.3.3 Summary of future operations and maintenance expendituresFuture operations and maintenance expenditure is forecast to trend in line with the value of theasset stock as shown in Figure 4. Note that all costs are shown in current 2018 dollar values (iereal values).

Figure 4: Projected Operations and Maintenance Expenditure

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

Maintenance is funded from the operating budget where available. This is further discussed inSection 6.2.

5.4 Renewal/Replacement PlanRenewal and replacement expenditure is major work which does not increase the asset’s designcapacity but restores, rehabilitates, replaces or renews an existing asset to its original or lesserrequired service potential. Work over and above restoring an asset to original service potential isupgrade/expansion or new works expenditure.

5.4.1 Renewal planAssets requiring renewal/replacement are identified from one of three methods provided in the‘Expenditure Template’.

Method 1 uses Asset Register data to project the renewal costs using acquisition yearand useful life to determine the renewal year, or

Method 2 uses capital renewal expenditure projections from external condition modellingsystems (such as Pavement Management Systems), or

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

Method 2 was used for this asset management plan.


The useful lives of assets used to develop projected asset renewal expenditures are shown inTable 5.4.1. Asset useful lives were last reviewed 2018.9

Table 5.4.1: Useful Lives of Assets

Asset (Sub)Category Useful lifeTimber Bridge 40 YearsConcrete Bridge 100 YearsComposite Bridge 100 YearsMajor Culverts 80 Years

5.4.2 Renewal and Replacement StrategiesThe organisation will plan capital renewal and replacement projects to meet level of serviceobjectives and minimise infrastructure service risks by:

Planning and scheduling renewal projects to deliver the defined level of service in the mostefficient manner,

Undertaking project scoping for all capital renewal and replacement projects to identify:o the service delivery ‘deficiency’, present risk and optimum time for

renewal/replacement,o the project objectives to rectify the deficiency,o the range of options, estimated capital and life cycle costs for each options that

could address the service deficiency,o and evaluate the options against evaluation criteria adopted by the organisation,

ando select the best option to be included in capital renewal programs,

Using ‘low cost’ renewal methods (cost of renewal is less than replacement) whereverpossible,

Maintain a current infrastructure risk register for assets and service risks associated withproviding services from infrastructure assets and reporting Very High and High risks andresidual risks after treatment to management and the Council,

Review current and required skills base and implement workforce training and developmentto meet required construction and renewal needs,

Maintain a current hierarchy of critical assets and capital renewal treatments and timingsrequired ,

Review management of capital renewal and replacement activities to ensure theorganisation is obtaining best value for resources used.

Renewal ranking criteria

Asset renewal and replacement is typically undertaken to either:

Ensure the reliability of the existing infrastructure to deliver the service it was constructedto facilitate (eg replacing a bridge that has a 5 t load limit), or

To ensure the infrastructure is of sufficient quality to meet the service requirements (egroughness of a road).10

It is possible to get some indication of capital renewal and replacement priorities by identifyingassets or asset groups that:

Have a high consequence of failure,

9 Report documenting Review of Useful Life of Assets10 IPWEA, 2011, IIMM, Sec 3.4.4, p 3|60.


Have a high utilisation and subsequent impact on users would be greatest, The total value represents the greatest net value to the organisation, Have the highest average age relative to their expected lives, Are identified in the AM Plan as key cost factors, Have high operational or maintenance costs, and Where replacement with modern equivalent assets would yield material savings.11 The ranking criteria used to determine priority of identified renewal and replacement

proposals is detailed in Table 5.4.2.

Table 5.4.2: Renewal and Replacement Priority Ranking Criteria

Criteria WeightingCondition Rating (4 and 5) 50%Risks – (residual high or extreme risks) 30%Utilisation 10%Public Need 10%Total 100%

Renewal and replacement standards

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

Australian Standards Bridge Guidelines AUS-SPEC Specification #2 Austroads Pavement Design Guide to the Structural Design of Road Pavements

5.4.3 Summary of future renewal and replacement expenditureProjected future renewal and replacement expenditures are forecast to increase over time as theasset stock increases from growth. The expenditure is summarised in Fig 5. Note that allamounts are shown in real values.

The projected capital renewal and replacement program is shown in Appendix B.

Fig 5: Projected Capital Renewal and Replacement Expenditure

11 Based on IPWEA, 2011, IIMM, Sec 3.4.5, p 3|66.


Deferred renewal and replacement, ie those assets identified for renewal and/or replacement andnot scheduled in capital works programs are to be included in the risk analysis process in the riskmanagement plan.

Renewals and replacement expenditure in the organisation’s capital works program will beaccommodated in the long term financial plan. This is further discussed in Section 6.2.

5.5 Creation/Acquisition/Upgrade PlanNew works are those works that create a new asset that did not previously exist, or works whichupgrade or improve an existing asset beyond its existing capacity. They may result from growth,social or environmental needs. Assets may also be acquired at no cost to the organisation fromland development. These assets from growth are considered in Section 4.4.

5.5.1 Selection criteriaNew assets and upgrade/expansion of existing assets are identified from various sources such ascouncillor or community requests, proposals identified by strategic plans or partnerships with otherorganisations. Candidate proposals are inspected to verify need and to develop a preliminaryrenewal estimate. Verified proposals are ranked by priority and available funds and scheduled infuture works programmes. The priority ranking criteria is detailed below.

Table 5.5.1: New Assets Priority Ranking Criteria

Criteria WeightingPublic Need 50%Risks – (residual high or extreme risks) 10%Utilisation 10%Whole of Life Costing Analysis Considered 30%Total 100%

5.5.2 Capital Investment StrategiesThe organisation will plan capital upgrade and new projects to meet level of service objectivesby:


Planning and scheduling capital upgrade and new projects to deliver the defined level of service inthe most efficient manner,

Undertake project scoping for all capital upgrade/new projects to identify:o the service delivery ‘deficiency’, present risk and required timeline for delivery of the

upgrade/new asset,o the project objectives to rectify the deficiency including value management for major

projects,o the range of options, estimated capital and life cycle costs for each options that

could address the service deficiency,o management of risks associated with alternative options,o and evaluate the options against evaluation criteria adopted by Council, ando select the best option to be included in capital upgrade/new programs,

Review current and required skills base and implement training and development to meet requiredconstruction and project management needs,

Review management of capital project management activities to ensure the organisation isobtaining best value for resources used.

Standards and specifications for new assets and for upgrade/expansion of existing assets are thesame as those for renewal shown in Section 5.4.2.

5.5.3 Summary of future upgrade/new assets expenditureProjected upgrade/new asset expenditures are summarised in Fig 6. The projected upgrade/newcapital works program is shown in Appendix C. All amounts are shown in real values.

Fig 6: Projected Capital Upgrade/New Asset Expenditure

Expenditure on new assets and services in the organisation’s capital works program will beaccommodated in the long term financial plan. This is further discussed in Section 6.2.

5.6 Disposal PlanDisposal includes any activity associated with disposal of a decommissioned asset including sale,demolition or relocation. Assets identified for possible decommissioning and disposal are shown in


Table 5.6, together with estimated annual savings from not having to fund operations andmaintenance of the assets. These assets will be further reinvestigated to determine the requiredlevels of service and see what options are available for alternate service delivery, if any. Anyrevenue gained from asset disposals is accommodated in the organisation’s long term financialplan.

Where cashflow projections from asset disposals are not available, these will be developed infuture revisions of this asset management plan.

Table 5.6: Assets Identified for Disposal

Asset Reason for Disposal Timing Disposal Expenditure Operations &Maintenance AnnualSavings

Bridges None Proposed N/A N/A N/A

5.7 Service Consequences and RisksThe organisation has prioritised decisions made in adopting this AM Plan to obtain the optimumbenefits from its available resources. Decisions were made based on the development of 3scenarios of AM Plans.

Scenario 1 - What we would like to do based on asset register data.

Scenario 2 – What we should do with existing budgets and identifying level of service and riskconsequences (ie what are the operations and maintenance and capital projects we are unableto do, what is the service and risk consequences associated with this position). This may requireseveral versions of the AM Plan.

Scenario 3 – What we can do and be financially sustainable with AM Plans matching long-termfinancial plans.

The development of scenario 1 and scenario 2 AM Plans provides the tools for discussion withthe Council and community on trade-offs between what we would like to do (scenario 1) and whatwe should be doing with existing budgets (scenario 2) by balancing changes in services andservice levels with affordability and acceptance of the service and risk consequences of thetrade-off position (scenario 3).

5.7.1 What we cannot doThere are some operations and maintenance activities and capital projects that are unable to beundertaken within the next 10 years. These include:

Creation of New Assets

5.7.2 Service consequencesOperations and maintenance activities and capital projects that cannot be undertaken willmaintain or create service consequences for users. These include:

Increase in expenditure to manage maintenance and operations.

5.7.3 Risk consequencesThe operations and maintenance activities and capital projects that cannot be undertaken maymaintain or create risk consequences for the organisation. These include:


Bridge Failures

These risks have been included with the Infrastructure Risk Management Plan summarised inSection 5.2 and risk management plans actions and expenditures included within projectedexpenditures.

6. Financial SummaryThis section contains the financial requirements resulting from all the information presented in theprevious sections of this asset management plan. The financial projections will be improved asfurther information becomes available on desired levels of service and current and projectedfuture asset performance.

6.1 Financial Statements and ProjectionsThe financial projections are shown in Fig 7 for projected operating (operations andmaintenance) and capital expenditure (renewal and upgrade/expansion/new assets). Note thatall costs are shown in real values.

Fig 7: Projected Operating and Capital Expenditure

6.1.1 Sustainability of service delivery

Two key indicators for service delivery sustainability that have been considered in the analysis ofthe services provided by this asset category, these being the:

asset renewal funding ratio, and


medium term budgeted expenditures/projected expenditure (over 10 years of the planningperiod).

Asset Renewal Funding Ratio

Asset Renewal Funding Ratio12 100%

The Asset Renewal Funding Ratio is the most important indicator and indicates that over the next10 years of the forecasting that we expect to have 100% of the funds required for the optimalrenewal and replacement of assets.

Medium term – 10 year financial planning period

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

These projected expenditures may be compared to budgeted expenditures in the 10 year periodto identify any funding shortfall. In a core asset management plan, a gap is generally due toincreasing asset renewals for ageing assets.

The projected operations, maintenance and capital renewal expenditure required over the 10 yearplanning period is $129,000 on average per year.

Estimated (budget) operations, maintenance and capital renewal funding is $129,000 on averageper year giving a 10 year funding shortfall of $000 per year. This indicates 100% of the projectedexpenditures needed to provide the services documented in the asset management plan. Thisexcludes upgrade/new assets.

Providing services from infrastructure in a sustainable manner requires the matching andmanaging of service levels, risks, projected expenditures and financing to achieve a financialindicator of approximately 1.0 for the first years of the asset management plan and ideally over the10-year life of the Long Term Financial Plan.

Figure 8 shows the projected asset renewal and replacement expenditure over the 20 years of theAM Plan. The projected asset renewal and replacement expenditure is compared to renewal andreplacement expenditure in the capital works program, which is accommodated in the long termfinancial plan.

Figure 8: Projected and LTFP Budgeted Renewal Expenditure

12 AIFMM, 2015, Version 1.0, Financial Sustainability Indicator 3, Sec 2.6, p 9.


Table 6.1.1 shows the shortfall between projected renewal and replacement expenditures andexpenditure accommodated in long term financial plan. Budget expenditures accommodated inthe long term financial plan or extrapolated from current budgets are shown in Appendix D.

Table 6.1.1: Projected and LTFP Budgeted Renewals and Financing Shortfall

Year End Projected LTFP Renewal Financing Cumulative Shortfall($'000)Jun-30 Renewals Renewal Budget Shortfall ($'000) (- gap, + surplus)

($'000) ($'000) (- gap, + surplus)2019 $40 $40 $0 $02020 $45 $45 $0 $02021 $76 $76 $0 $02022 $75 $75 $0 $02023 $89 $89 $0 $02024 $0 $0 $0 $02025 $75 $75 $0 $02026 $62 $62 $0 $02027 $60 $60 $0 $02028 $73 $73 $0 $02029 $60 $60 $0 $02030 $60 $60 $0 $02031 $60 $60 $0 $02032 $60 $60 $0 $02033 $60 $60 $0 $02034 $60 $60 $0 $02035 $60 $60 $0 $02036 $60 $60 $0 $0


2037 $60 $60 $0 $02038 $60 $60 $0 $0

Note: A negative shortfall indicates a financing gap, a positive shortfall indicates a surplus for that year.

Providing services in a sustainable manner will require matching of projected asset renewal andreplacement expenditure to meet agreed service levels with the corresponding capital worksprogram accommodated in the long term financial plan.

A gap between projected asset renewal/replacement expenditure and amounts accommodated inthe LTFP indicates that further work is required on reviewing service levels in the AM Plan(including possibly revising the LTFP) before finalising the asset management plan to managerequired service levels and funding to eliminate any funding gap.

We will manage the ‘gap’ by developing this asset management plan to provide guidance on futureservice levels and resources required to provide these services, and review future services, servicelevels and costs with the community.

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

Expenditure projections are in 2018 real values.

Table 6.1.2: Projected Expenditures for Long Term Financial Plan ($000)

Year Operations MaintenanceProjected Capital

DisposalsCapitalRenewal Upgrade/New

2019 $59.00 $13.00 $40.00 $0.00 $0.002020 $59.00 $24.00 $45.00 $0.00 $0.002021 $59.00 $12.00 $76.00 $0.00 $0.002022 $59.00 $22.00 $75.00 $0.00 $0.002023 $59.00 $9.00 $89.00 $0.00 $0.002024 $59.00 $17.00 $0.00 $75.00 $0.002025 $59.17 $9.03 $75.00 $0.00 $0.002026 $59.17 $2.03 $62.00 $0.00 $0.002027 $59.17 $0.03 $60.00 $0.00 $0.002028 $59.17 $0.03 $73.00 $0.00 $0.002029 $59.17 $10.83 $59.50 $7.50 $0.002030 $59.18 $10.83 $59.50 $7.50 $0.002031 $59.20 $10.84 $59.50 $7.50 $0.002032 $59.22 $10.84 $59.50 $7.50 $0.002033 $59.24 $10.84 $59.50 $7.50 $0.002034 $59.25 $10.85 $59.50 $7.50 $0.002035 $59.27 $10.85 $59.50 $7.50 $0.002036 $59.29 $10.85 $59.50 $7.50 $0.002037 $59.30 $10.86 $59.50 $7.50 $0.002038 $59.32 $10.86 $59.50 $7.50 $0.00


6.2 Funding StrategyAfter reviewing service levels, as appropriate to ensure ongoing financial sustainability projectedexpenditures identified in Section 6.1.2 will be accommodated in the organisation’s 10 year longterm financial plan.

6.3 Valuation ForecastsAsset values are forecast to increase as additional assets are added to the asset stock fromconstruction and acquisition by the organisation and from assets constructed by land developersand others and donated to the organisation. Figure 9 shows the projected replacement cost assetvalues over the planning period in real values.

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

The depreciated replacement cost will vary over the forecast period depending on the rates of addition ofnew 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 depreciated replacement cost of contributed andnew assets is shown in the darker colour and in the lighter colour for existing assets.

Figure 11: Projected Depreciated Replacement Cost

6.4 Key Assumptions made in Financial ForecastsThis section details the key assumptions made in presenting the information contained in this assetmanagement plan and in preparing forecasts of required operating and capital expenditure and


asset values, depreciation expense and carrying amount estimates. It is presented to enablereaders to gain an understanding of the levels of confidence in the data behind the financialforecasts.

Key assumptions made in this asset management plan and risks that these may change are shownin Table 6.4.

Table 6.4: Key Assumptions made in AM Plan and Risks of Change

Key Assumptions Risks of Change to AssumptionsAll expenditure is stated in dollar values as at 2018with no allowance made for inflation over the 10-year planning period.

All values are in today’s dollars no % increase has beenincluded.

Initial renewal and new costs have been reviewedon the basis of historical costs, conditiondeterioration work, and compared to thedepreciation provision and the funding available.Renewal costs typically increase by an average of3-4% per annum over the life of the Plan to allow forthe impact of an enlarged asset base.

Cost assumptions based on past and known costs.

Similarly, Maintenance costs typically increase byabout 3% per annum to allow for the increase intotal asset value (reflecting the higher costsassociated with managing a larger network base).Again, as asset value is predicted to increase bysome 0% over the life of the Plan, this assumptionwill need to be closely monitored to ensure thatsufficient maintenance funds are available tooptimise long term expenditure and not create abacklog.

Cost assumptions based on past and known costs.

Continuation of the current rate and pattern of urbandevelopment.

Population growth factor of 1.5% per year has beenincluded.

Capital forecast costs for ‘Renewal’ &‘Upgrade/New’ have been placed into theirrespective categories; this was based on limitedinformation.

Cost assumptions are based on past and known costsincluding the break-down costs to reflect ‘Renewal’ &‘Upgrade/New’ Capital costs.

6.5 Forecast Reliability and ConfidenceThe expenditure and valuations projections in this AM Plan are based on best available data.Currency and accuracy of data is critical to effective asset and financial management. Dataconfidence is classified on a 5 level scale13 in accordance with Table 6.5.

13 IPWEA, 2011, IIMM, Table 2.4.6, p 2|59.


Table 6.5: Data Confidence Grading System

ConfidenceGrade

Description

A Highly reliable Data based on sound records, procedures, investigations and analysis, documented properlyand recognised as the best method of assessment. Dataset is complete and estimated to beaccurate ± 2%

B Reliable Data based on sound records, procedures, investigations and analysis, documented properly buthas minor shortcomings, for example some of the data is old, some documentation is missingand/or reliance is placed on unconfirmed reports or some extrapolation. Dataset is complete andestimated to be accurate ± 10%

C Uncertain Data based on sound records, procedures, investigations and analysis which is incomplete orunsupported, or extrapolated from a limited sample for which grade A or B data are available.Dataset is substantially complete but up to 50% is extrapolated data and accuracy estimated ±25%

D Very Uncertain Data is based on unconfirmed verbal reports and/or cursory inspections and analysis. Datasetmay not be fully complete and most data is estimated or extrapolated. Accuracy ± 40%

E Unknown None or very little data held.

The estimated confidence level for and reliability of data used in this AM Plan is shown in Table6.5.1.

Table 6.5.1: Data Confidence Assessment for Data used in AM PlanData Confidence Assessment Comment

Demand drivers Reliable Regional trends available

Growth projections Highly Reliable Trends available

Operations expenditures Highly Reliable Extrapolated from previous years

Maintenanceexpenditures

Highly Reliable Extrapolated from previous years

Projected Renewal exps.- Asset values

Reliable Valuation completed in 2018

- Asset residual values Reliable Identified in Condition assessment but not applied toregister

- Asset useful lives Reliable Identified in Condition assessment but not applied toregister

- Condition modelling Reliable Comprehensively completed in 2018

- Network renewals Highly Reliable Based on Condition assessment and operationalexperience

- Defect repairs Reliable Scheduled maintenance is approx. 100% of totalmaintenance

Upgrade/Newexpenditures

Reliable Align to LTFP – Capital Works Program

Disposal expenditures Reliable Not Applicable

Over all data sources, the data confidence is assessed as High confidence level for data used inthe preparation of this AM Plan.


7. Plan Improvement and Monitoring7.1 Status of Asset Management Practices

7.1.1 Accounting and financial systemsThe finance system used by the City of Victor Harbor includes:

SynergySoft (IT Vision)

o Actual and historical transactionso Budgetingo Inventorieso Recording of Infrastructure, including plant, property and equipmento Depreciation of the assets, including useful and remaining lives of assetso Creditors payments systemo Debtors receiptingo Banking and reconciliation with the general ledger

Magic Performance (Magiq Software Pty Ltd)

o Preparation of budgetso Budget Reviewso Reporting and analysiso Import / export of data from SynergySoft

MyData (Assetic Pty Ltd)

o Recording of infrastructure, land & building assetso Depreciation of infrastructure, land & buildingso Condition rating, useful lives and unit rates of infrastructure, land & buildingso Reporting and analysis

Accountabilities for financial systems

The responsibility for the integrity of the finance system is with the Finance Manager and the Team LeaderFinance.

Accounting standards and regulations

The accounting standards and guidelines that must be complied with are as follows:

Local Government Act 1999 Local Government (General) Regulations 1999 Local Government (Financial Management) Regulations 2011 State and Federal Legislation (eg taxes) Australian Accounting Standards set by the Australian Accounting Standards Board (AASB) Australasian Equivalents to the International Financial Reporting Standards City of Victor Harbor Internal Control procedures

Capital/maintenance threshold

Capital thresholds vary between $1,000 and $10,000. If the improvements are below these amounts then itwould be included in the operating budget as maintenance.


7.2.1 Asset management systemThe council uses both SynergySoft and MyData software for asset maintenance. New infrastructure & openspace assets are created and maintained within the Environment and Infrastructure Department.

New land & building assets are created and maintained within the Corporate & Community ServicesDepartment. A single line entry for each asset class in MyData is recorded in SynergySoft and records fordepreciation, additions, disposals and adjustments are reconciled between the two systems. The assetregister is sourced from both systems and compiled on an annual basis.

Accountabilities for asset management system and data maintenance

While the responsibility of the financial data of the assets is with the Finance Manager and the Team LeaderFinance, the accountability for accuracy of the asset information is as follows:

o Manager Infrastructure – Infrastructure (excluding Open Space)o Manager Environment & Recreation – Open Space & Buildingso Manager Finance – Land


7.2 Improvement ProgramThe asset management improvement plan generated from this asset management plan is shownin Table 7.2

Table 7.2: Improvement PlanTaskNo

Task Responsibility ResourcesRequired

Timeline

1 Annually Review 10 Year Capital WorksProgram

GS, JR Staff October/November eachyear

2 Reflect actual useful lives in next valuation ofthe associated infrastructure assets (desk topreview)

GS, JS, JR,KKS,Assetic

Staff, Assetic As per revaluationrequirements

3 Review Levels of Service GS Staff October/Novembereach year

4 Continue to maintain and quality check theasset register

JS, JR Staff On-going

5 LTFP & Asset Management Plan to align KKS, GS Staff Commencement atthe end of eachfinancial year inreadiness for thenew FY

7.3 Monitoring and Review ProceduresThis asset management plan will be reviewed during annual budget planning processes andamended to recognise any material changes in service levels and/or resources available to providethose services as a result of budget decisions.

The AM Plan will be updated annually to ensure it represents the current service level, assetvalues, projected operations, maintenance, capital renewal and replacement, capital upgrade/newand asset disposal expenditures and projected expenditure values incorporated into theorganisation’s long term financial plan.

The AM Plan has a life of 4 years (council election cycle) and is due for complete revision andupdating within 2 years of each Council election.

7.4 Performance MeasuresThe effectiveness of the asset management plan can be measured in the following ways:

The degree to which the required projected expenditures identified in this assetmanagement plan are incorporated into the organisation’s long term financial plan,

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

The degree to which the existing and projected service levels and service consequences(what we cannot do), risks and residual risks are incorporated into the organisation’sStrategic Plan and associated plans.


8. ReferencesIPWEA, 2006, ‘International Infrastructure Management Manual’, Institute of Public Works

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

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

IPWEA, 2011, ‘International Infrastructure Management Manual’, Institute of Public WorksEngineering Australia, Sydney, www.ipwea.org.au/IIMM

Bridges Infrastructure Risk Management Plan

Connell Wagner Assessment of Bridge Structures August 2008

Organisation ‘Annual Plan and Budget’

Community Plan 2036 and Strategic Directions 2016-2020

Victor Harbor Urban Growth Management Strategy

Victor Harbor Coastal Management Study 2013

WGA 2017 – Level 2, Bridge Condition Assessment Report


9. AppendicesAppendix A Maintenance Response Levels of Service

Appendix B Projected 10 Year Capital Renewal and Replacement Works Program

Appendix C Projected 10 Year Capital Upgrade/New Works Program

Appendix D Budgeted Expenditures Accommodated in LTFP

Appendix E Gifted Assets 2010 – 30 June 2018

Appendix F Aerial Plans – Existing Bridge Locations

Appendix G Abbreviations

Appendix H Glossary


Appendix A Maintenance Response Levels of Service

Refer to Maintenance and Operation Budgets


Appendix B

Projected 10 year Capital Renewal and Replacement Works Program

Yr 2019 Renewal New/Upgrade TotalSwains Crossing Bridge repair works (No.13) $ 40,000 $ - $ 40,000

$ 40,000 $ - $ 40,000

Yr 2020 Renewal New/UpgradeStandard design to ensure compliance as identified in Level 2 Bridge ConditionAssessment Report $ 25,000 $ - $ 25,000Pearce Road Bridge (no. 6) repairs as identified in Level 2 Bridge Condition AssessmentReport $ 20,000 $ - $ 20,000

$ 45,000 $ - $ 45,000

Yr 2021 Renewal New/UpgradeWardle Bridge, Hutchinson Road (no. 7) repairs as identified in Level 2 Bridge ConditionAssessment Report $ 10,000 $ - $ 10,000Coote Rd Bridge, Coote Rd (no. 8) repairs as identified in Level 2 Bridge ConditionAssessment Report $ 31,000 $ - $ 31,000Keen Rd Bridge, Keen Rd (no. 15) repairs as identified in Level 2 Bridge ConditionAssessment Report $ 20,000 $ - $ 20,000Day Rd Overpass, Ring Rd – Day Rd (no. 23) repairs as identified in Level 2 BridgeCondition Assessment Report $ 15,000 $ - $ 15,000

$ 76,000 $ - $ 76,000


Yr 2022 Renewal New/UpgradeMemory Grove Bridge, Memory Grove (no. 14) repairs as identified in Level 2 BridgeCondition Assessment Report $ 46,000 $ - $ 46,000Pitkins Rd Bridge, Pitkins Rd (no. 21) repairs as identified in Level 2 Bridge ConditionAssessment Report $ 17,000 $ - $ 17,000Francis Rd Bridge 2, Francis Rd (no. 33) repairs as identified in Level 2 Bridge ConditionAssessment Report $ 12,000 $ - $ 12,000

$ 75,000 $ - $ 75,000

Yr 2023 Renewal New/UpgradeSawpit Rd Bridge, Sawpit Rd (no. 09) repairs as identified in Level 2 Bridge ConditionAssessment Report $ 53,000 $ - $ 53,000Kirk Rd Bridge, Kirk Rd (no. 16) repairs as identified in Level 2 Bridge ConditionAssessment Report $ 36,000 $ - $ 36,000

$ 89,000 $ - $ 89,000

Yr 2024 Renewal New/UpgradeFootbridge, Section 696 Inman River (no. 34) - New Bridge to replace existing $ - $ 75,000 $ 75,000

$ - $ 75,000 $ 75,000

Yr 2025 Renewal New/UpgradeA.H. Dennis Bridge, Waitpinga Rd (no. 04) repairs as identified in Level 2 Bridge ConditionAssessment Report $ 38,000 $ - $ 38,000Mont Rosa Bridge, Mont Rosa Rd (no. 10) repairs as identified in Level 2 Bridge ConditionAssessment Report $ 20,000 $ - $ 20,000


Cartwright Rd Bridge, Cartwright Rd (no. 12) repairs as identified in Level 2 BridgeCondition Assessment Report $ 17,000 $ - $ 17,000

$ 75,000 $ - $ 75,000

Yr 2026 Renewal New/UpgradePearce Bridge, Waitpinga Rd (no. 06) repairs as identified in Level 2 Bridge ConditionAssessment Report $ 22,000 $ - $ 22,000Wardle Bridge, Hutchinson Rd (no. 07) repairs as identified in Level 2 Bridge ConditionAssessment Report $ 20,000 $ - $ 20,000Nettle Hill Rd Bridge, Nettle Hill Rd (no. 11) repairs as identified in Level 2 BridgeCondition Assessment Report $ 20,000 $ - $ 20,000

$ 62,000 $ - $ 62,000

Yr 2027 Renewal New/UpgradeBack Valley Bridge 1, Back Valley Rd (no. 02) repairs as identified in Level 2 BridgeCondition Assessment Report $ 45,000 $ - $ 45,000Keen Rd Bridge, Keen Rd (no. 15) repairs as identified in Level 2 Bridge ConditionAssessment Report $ 15,000 $ - $ 15,000

$ 60,000 $ - $ 60,000

Yr 2028 Renewal New/UpgradeCoote Rd Bridge, Coote Rd (no. 08) repairs as identified in Level 2 Bridge ConditionAssessment Report $ 53,000 $ - $ 53,000Pitkins Rd Bridge, Pitkins Rd (no. 21) repairs as identified in Level 2 Bridge ConditionAssessment Report $ 20,000 $ - $ 20,000


$ 73,000 $ - $ 73,000

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

Yr 2019 Renewal New/Upgrade TotalSwains Crossing Bridge repair works (No.13) $ 40,000 $ - $ 40,000

$ 40,000 $ - $ 40,000

Yr 2020 Renewal New/UpgradeStandard design to ensure compliance as identified in Level 2 Bridge ConditionAssessment Report $ 25,000 $ - $ 25,000Pearce Road Bridge (no. 6) repairs as identified in Level 2 Bridge Condition AssessmentReport $ 20,000 $ - $ 20,000

$ 45,000 $ - $ 45,000

Yr 2021 Renewal New/UpgradeWardle Bridge, Hutchinson Road (no. 7) repairs as identified in Level 2 Bridge ConditionAssessment Report $ 10,000 $ - $ 10,000Coote Rd Bridge, Coote Rd (no. 8) repairs as identified in Level 2 Bridge ConditionAssessment Report $ 31,000 $ - $ 31,000Keen Rd Bridge, Keen Rd (no. 15) repairs as identified in Level 2 Bridge ConditionAssessment Report $ 20,000 $ - $ 20,000Day Rd Overpass, Ring Rd – Day Rd (no. 23) repairs as identified in Level 2 BridgeCondition Assessment Report $ 15,000 $ - $ 15,000

$ 76,000 $ - $ 76,000


Yr 2022 Renewal New/UpgradeMemory Grove Bridge, Memory Grove (no. 14) repairs as identified in Level 2 BridgeCondition Assessment Report $ 46,000 $ - $ 46,000Pitkins Rd Bridge, Pitkins Rd (no. 21) repairs as identified in Level 2 Bridge ConditionAssessment Report $ 17,000 $ - $ 17,000Francis Rd Bridge 2, Francis Rd (no. 33) repairs as identified in Level 2 Bridge ConditionAssessment Report $ 12,000 $ - $ 12,000

$ 75,000 $ - $ 75,000

Yr 2023 Renewal New/UpgradeSawpit Rd Bridge, Sawpit Rd (no. 09) repairs as identified in Level 2 Bridge ConditionAssessment Report $ 53,000 $ - $ 53,000Kirk Rd Bridge, Kirk Rd (no. 16) repairs as identified in Level 2 Bridge ConditionAssessment Report $ 36,000 $ - $ 36,000

$ 89,000 $ - $ 89,000

Yr 2024 Renewal New/UpgradeFootbridge, Section 696 Inman River (no. 34) - New Bridge to replace existing $ - $ 75,000 $ 75,000

$ - $ 75,000 $ 75,000

Yr 2025 Renewal New/UpgradeA.H. Dennis Bridge, Waitpinga Rd (no. 04) repairs as identified in Level 2 BridgeCondition Assessment Report $ 38,000 $ - $ 38,000


Mont Rosa Bridge, Mont Rosa Rd (no. 10) repairs as identified in Level 2 BridgeCondition Assessment Report $ 20,000 $ - $ 20,000Cartwright Rd Bridge, Cartwright Rd (no. 12) repairs as identified in Level 2 BridgeCondition Assessment Report $ 17,000 $ - $ 17,000

$ 75,000 $ - $ 75,000

Yr 2026 Renewal New/UpgradePearce Bridge, Waitpinga Rd (no. 06) repairs as identified in Level 2 Bridge ConditionAssessment Report $ 22,000 $ - $ 22,000Wardle Bridge, Hutchinson Rd (no. 07) repairs as identified in Level 2 Bridge ConditionAssessment Report $ 20,000 $ - $ 20,000Nettle Hill Rd Bridge, Nettle Hill Rd (no. 11) repairs as identified in Level 2 BridgeCondition Assessment Report $ 20,000 $ - $ 20,000

$ 62,000 $ - $ 62,000

Yr 2027 Renewal New/UpgradeBack Valley Bridge 1, Back Valley Rd (no. 02) repairs as identified in Level 2 BridgeCondition Assessment Report $ 45,000 $ - $ 45,000Keen Rd Bridge, Keen Rd (no. 15) repairs as identified in Level 2 Bridge ConditionAssessment Report $ 15,000 $ - $ 15,000

$ 60,000 $ - $ 60,000

Yr 2028 Renewal New/UpgradeCoote Rd Bridge, Coote Rd (no. 08) repairs as identified in Level 2 Bridge ConditionAssessment Report $ 53,000 $ - $ 53,000


Pitkins Rd Bridge, Pitkins Rd (no. 21) repairs as identified in Level 2 Bridge ConditionAssessment Report $ 20,000 $ - $ 20,000

$ 73,000 $ - $ 73,000


Appendix D Budgeted Expenditures Accommodated in LTFP

Projected Expenditure 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028Capital Expenditure on Renewal/Replacement of existingassets

$40.00 $45.00 $76.00 $75.00 $89.00 $0.00 $75.00 $62.00 $60.00 $73.00

Capital Expenditure on Upgrade/New assets $0.00 $0.00 $0.00 $0.00 $0.00 $75.00 $0.00 $0.00 $0.00 $0.00Operational cost of existing assets $59.00 $59.00 $59.00 $59.00 $59.00 $59.00 $59.00 $59.00 $59.00 $59.00Maintenance cost of existing assets $13.00 $24.00 $12.00 $22.00 $9.00 $17.00 $9.00 $2.00 $0.00 $0.00Operational cost of New assets $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.17 $0.17 $0.17 $0.17Maintenance cost of New assets $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.03 $0.03 $0.03 $0.03Disposal of Surplus Assets $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

All dollar values in ($'000)'s


Appendix E Gifted Assets 2010 – 30 June 2018Nil


Appendix F Aerial Plans - Existing Bridge Locations


Appendix G Abbreviations

AAAC Average annual asset consumption

AM Asset management

AM Plan Asset management plan

ARI Average recurrence interval

ASC Annual service cost

BOD Biochemical (biological) oxygen demand

CRC Current replacement cost

CWMS Community wastewater management systems

DA Depreciable amount

DRC Depreciated replacement cost

EF Earthworks/formation

IRMP Infrastructure risk management plan

LCC Life Cycle cost

LCE Life cycle expenditure

LTFP Long term financial plan

MMS Maintenance management system

PCI Pavement condition index

RV Residual value

SoA State of the Assets

SS Suspended solids

vph Vehicles per hour

WDCRD Written down current replacement cost


Appendix H Glossary

Annual service cost (ASC)1) Reporting actual cost

The annual (accrual) cost of providinga service including operations,maintenance, depreciation,finance/opportunity and disposal costsless revenue.

2) For investment analysis and budgetingAn estimate of the cost that would betendered, per annum, if tenders werecalled for the supply of a service to aperformance specification for a fixedterm. The Annual Service Costincludes operations, maintenance,depreciation, finance/ opportunity anddisposal costs, less revenue.

AssetA resource controlled by an entity as a resultof past events and from which future economicbenefits are expected to flow to the entity.Infrastructure assets are a sub-class ofproperty, plant and equipment which are non-current assets with a life greater than 12months and enable services to be provided.

Asset categorySub-group of assets within a class hierarchyfor financial reporting and managementpurposes.

Asset classA group of assets having a similar nature orfunction in the operations of an entity, andwhich, for purposes of disclosure, is shown asa single item without supplementarydisclosure.

Asset condition assessmentThe process of continuous or periodicinspection, assessment, measurement andinterpretation of the resultant data to indicatethe condition of a specific asset so as todetermine the need for some preventative orremedial action.

Asset hierarchyA framework for segmenting an asset baseinto appropriate classifications. The assethierarchy can be based on asset function orasset type or a combination of the two.

Asset management (AM)The combination of management, financial,economic, engineering and other practicesapplied to physical assets with the objective ofproviding the required level of service in themost cost effective manner.

Asset renewal funding ratioThe ratio of the net present value of assetrenewal funding accommodated over a 10year period in a long term financial planrelative to the net present value of projectedcapital renewal expenditures identified in anasset management plan for the same period[AIFMG Financial Sustainability Indicator No8].

Average annual asset consumption(AAAC)*The amount of an organisation’s asset baseconsumed during a reporting period (generallya year). This may be calculated by dividing thedepreciable amount by the useful life (or totalfuture economic benefits/service potential)and totalled for each and every asset OR bydividing the carrying amount (depreciatedreplacement cost) by the remaining useful life(or remaining future economic benefits/servicepotential) and totalled for each and everyasset in an asset category or class.

BorrowingsA borrowing or loan is a contractual obligationof the borrowing entity to deliver cash oranother financial asset to the lending entityover a specified period of time or at a specifiedpoint in time, to cover both the initial capitalprovided and the cost of the interest incurredfor providing this capital. A borrowing or loanprovides the means for the borrowing entity tofinance outlays (typically physical assets)when it has insufficient funds of its own to doso, and for the lending entity to make afinancial return, normally in the form of interestrevenue, on the funding provided.


Capital expenditureRelatively large (material) expenditure, whichhas benefits, expected to last for more than 12months. Capital expenditure includes renewal,expansion and upgrade. Where capitalprojects involve a combination of renewal,expansion and/or upgrade expenditures, thetotal project cost needs to be allocatedaccordingly.

Capital expenditure - expansionExpenditure that extends the capacity of anexisting asset to provide benefits, at the samestandard as is currently enjoyed by existingbeneficiaries, to a new group of users. It isdiscretionary expenditure, which increasesfuture operations and maintenance costs,because it increases the organisation’s assetbase, but may be associated with additionalrevenue from the new user group, eg.extending a drainage or road network, theprovision of an oval or park in a new suburb fornew residents.

Capital expenditure - newExpenditure which creates a new assetproviding a new service/output that did notexist beforehand. As it increases servicepotential it may impact revenue and willincrease future operations and maintenanceexpenditure.

Capital expenditure - renewalExpenditure on an existing asset or onreplacing an existing asset, which returns theservice capability of the asset up to that whichit had originally. It is periodically requiredexpenditure, relatively large (material) in valuecompared with the value of the components orsub-components of the asset being renewed.As it reinstates existing service potential, itgenerally has no impact on revenue, but mayreduce future operations and maintenanceexpenditure if completed at the optimum time,eg. resurfacing or resheeting a material part ofa road network, replacing a material section ofa drainage network with pipes of the samecapacity, resurfacing an oval.

Capital expenditure - upgradeExpenditure, which enhances an existingasset to provide a higher level of service orexpenditure that will increase the life of theasset beyond that which it had originally.Upgrade expenditure is discretionary andoften does not result in additional revenueunless direct user charges apply. It willincrease operations and maintenanceexpenditure in the future because of theincrease in the organisation’s asset base, eg.widening the sealed area of an existing road,replacing drainage pipes with pipes of agreater capacity, enlarging a grandstand at asporting facility.

Capital fundingFunding to pay for capital expenditure.

Capital grantsMonies received generally tied to the specificprojects for which they are granted, which areoften upgrade and/or expansion or newinvestment proposals.

Capital investment expenditureSee capital expenditure definition.

Capitalisation thresholdThe value of expenditure on non-currentassets above which the expenditure isrecognised as capital expenditure and belowwhich the expenditure is charged as anexpense in the year of acquisition.

Carrying amountThe amount at which an asset is recognisedafter deducting any accumulated depreciation/ amortisation and accumulated impairmentlosses thereon.

Class of assetsSee asset class definition

ComponentSpecific parts of an asset having independentphysical or functional identity and havingspecific attributes such as different lifeexpectancy, maintenance regimes, risk orcriticality.


Core asset managementAsset management which relies primarily onthe use of an asset register, maintenancemanagement systems, job resourcemanagement, inventory control, conditionassessment, simple risk assessment anddefined levels of service, in order to establishalternative treatment options and long-termcashflow predictions. Priorities are usuallyestablished on the basis of financial returngained by carrying out the work (rather thandetailed risk analysis and optimised decision-making).

Cost of an assetThe amount of cash or cash equivalents paidor the fair value of the consideration given toacquire an asset at the time of its acquisitionor construction, including any costs necessaryto place the asset into service. This includesone-off design and project management costs.

Critical assetsAssets for which the financial, business orservice level consequences of failure aresufficiently severe to justify proactiveinspection and rehabilitation. Critical assetshave a lower threshold for action than non-critical assets.

Current replacement cost (CRC)The cost the entity would incur to acquire theasset on the reporting date. The cost ismeasured by reference to the lowest cost atwhich the gross future economic benefitscould be obtained in the normal course ofbusiness or the minimum it would cost, toreplace the existing asset with atechnologically modern equivalent new asset(not a second hand one) with the sameeconomic benefits (gross service potential)allowing for any differences in the quantity andquality of output and in operating costs.

Deferred maintenanceThe shortfall in rehabilitation work undertakenrelative to that required to maintain the servicepotential of an asset.

Depreciable amountThe cost of an asset, or other amountsubstituted for its cost, less its residual value.

Depreciated replacement cost (DRC)The current replacement cost (CRC) of anasset less, where applicable, accumulateddepreciation calculated on the basis of suchcost to reflect the already consumed orexpired future economic benefits of the asset.

Depreciation / amortisationThe systematic allocation of the depreciableamount (service potential) of an asset over itsuseful life.

Economic lifeSee useful life definition.

ExpenditureThe spending of money on goods andservices. Expenditure includes recurrent andcapital outlays.

ExpensesDecreases in economic benefits during theaccounting period in the form of outflows ordepletions of assets or increases in liabilitiesthat result in decreases in equity, other thanthose relating to distributions to equityparticipants.

Fair valueThe amount for which an asset could beexchanged, or a liability settled, betweenknowledgeable, willing parties, in an armslength transaction.

Financing gapA financing gap exists whenever an entity hasinsufficient capacity to finance asset renewaland other expenditure necessary to be able toappropriately maintain the range and level ofservices its existing asset stock was originallydesigned and intended to deliver. The servicecapability of the existing asset stock should bedetermined assuming no additional operatingrevenue, productivity improvements, or netfinancial liabilities above levels currentlyplanned or projected. A current financing gapmeans service levels have already or arecurrently falling. A projected financing gap ifnot addressed will result in a future diminutionof existing service levels.

Heritage assetAn asset with historic, artistic, scientific,technological, geographical or environmental


qualities that is held and maintained principallyfor its contribution to knowledge and cultureand this purpose is central to the objectives ofthe entity holding it.

Impairment LossThe amount by which the carrying amount ofan asset exceeds its recoverable amount.

Infrastructure assetsPhysical assets that contribute to meeting theneeds of organisations or the need for accessto major economic and social facilities andservices, eg. roads, drainage, footpaths andcycleways. These are typically large,interconnected networks or portfolios ofcomposite assets. The components of theseassets may be separately maintained,renewed or replaced individually so that therequired level and standard of service from thenetwork of assets is continuously sustained.Generally the components and hence theassets have long lives. They are fixed in placeand are often 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 orservices or for administrative purposes; or(b) sale in the ordinary course of business.

Key performance indicatorA qualitative or quantitative measure of aservice or activity used to compare actualperformance against a standard or othertarget. Performance indicators commonlyrelate to statutory limits, safety,responsiveness, cost, comfort, assetperformance, reliability, efficiency,environmental protection and customersatisfaction.

Level of serviceThe defined service quality for a particularservice/activity against which serviceperformance may be measured. Servicelevels usually relate to quality, quantity,reliability, responsiveness, environmentalimpact, acceptability and cost.

Life Cycle Cost *1) Total LCC

The total cost of an asset throughoutits life including planning, design,construction, acquisition, operation,maintenance, rehabilitation anddisposal costs.

2) Average LCCThe life cycle cost (LCC) is averagecost to provide the service over thelongest asset life cycle. It comprisesaverage operations, maintenanceexpenditure plus asset consumptionexpense, represented by depreciationexpense projected over 10 years. TheLife Cycle Cost does not indicate thefunds required to provide the service ina particular year.

Life Cycle ExpenditureThe Life Cycle Expenditure (LCE) is theaverage operations, maintenance and capitalrenewal expenditure accommodated in thelong term financial plan over 10 years. LifeCycle Expenditure may be compared toaverage Life Cycle Cost to give an initialindicator of affordability of projected servicelevels when considered with asset ageprofiles.

Loans / borrowingsSee borrowings.


MaintenanceAll actions necessary for retaining an asset asnear as practicable to an appropriate servicecondition, including regular ongoing day-to-day work necessary to keep assets operating,eg road patching but excluding rehabilitationor renewal. It is operating expenditure requiredto ensure that the asset reaches its expecteduseful life.

Planned maintenanceRepair work that is identified andmanaged through a maintenancemanagement system (MMS). MMSactivities include inspection, assessingthe condition againstfailure/breakdown criteria/experience,prioritising scheduling, actioning thework and reporting what was done todevelop a maintenance history andimprove maintenance and servicedelivery performance.

Reactive maintenanceUnplanned repair work that is carriedout in response to service requests andmanagement/ supervisory directions.

Specific maintenanceMaintenance work to repaircomponents or replace sub-components that needs to be identifiedas a specific maintenance item in themaintenance budget.

Unplanned maintenanceCorrective work required in the short-term to restore an asset to workingcondition so it can continue to deliverthe required service or to maintain itslevel of security and integrity.

Maintenance expenditure *Recurrent expenditure, which is periodically orregularly required as part of the anticipatedschedule of works required to ensure that theasset achieves its useful life and provides therequired level of service. It is expenditure,which was anticipated in determining theasset’s useful life.

MaterialityThe notion of materiality guides the margin oferror acceptable, the degree of precisionrequired and the extent of the disclosurerequired when preparing general purposefinancial reports. Information is material if itsomission, misstatement or non-disclosure hasthe potential, individually or collectively, toinfluence the economic decisions of userstaken 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 withthe most cost-effective asset performing thesame level of service. It is the most costefficient, currently available asset which willprovide the same stream of services as theexisting asset is capable of producing. Itallows for technology changes and,improvements and efficiencies in productionand installation techniques

Net present value (NPV)The value to the organisation of the cash flowsassociated with an asset, liability, activity orevent calculated using a discount rate toreflect the time value of money. It is the netamount of discounted total cash inflows afterdeducting the value of the discounted totalcash outflows arising from eg the continueduse and subsequent disposal of the asset afterdeducting the value of the discounted totalcash outflows.

Non-revenue generating investmentsInvestments for the provision of goods andservices to sustain or improve services to thecommunity that are not expected to generateany savings or revenue to the organisation,eg. parks and playgrounds, footpaths, roadsand bridges, libraries, etc.

OperationsRegular activities to provide services such aspublic health, safety and amenity, eg streetsweeping, grass mowing and street lighting.


Operating expenditureRecurrent expenditure, which is continuouslyrequired to provide a service. In common usethe term typically includes, eg power, fuel,staff, plant equipment, on-costs andoverheads but excludes maintenance anddepreciation. Maintenance and depreciation ison the other hand included in operatingexpenses.

Operating expenseThe gross outflow of economic benefits, beingcash and non cash items, during the periodarising in the course of ordinary activities of anentity when those outflows result in decreasesin equity, other than decreases relating todistributions to equity participants.

Operating expensesRecurrent expenses continuously required toprovide a service, including power, fuel, staff,plant equipment, maintenance, depreciation,on-costs and overheads.

Operations, maintenance and renewalfinancing ratioRatio of estimated budget to projectedexpenditure for operations, maintenance andrenewal of assets over a defined time (eg 5, 10and 15 years).

Operations, maintenance and renewal gapDifference between budgeted expenditures ina long term financial plan (or estimated futurebudgets in absence of a long term financialplan) and projected expenditures foroperations, maintenance and renewal ofassets to achieve/maintain specified servicelevels, totalled over a defined time (e.g. 5, 10and 15 years).

Pavement management system (PMS)A systematic process for measuring andpredicting the condition of road pavementsand wearing surfaces over time andrecommending corrective actions.

PMS ScoreA measure of condition of a road segmentdetermined from a Pavement ManagementSystem.

Rate of annual asset consumption *The ratio of annual asset consumption relativeto the depreciable amount of the assets. Itmeasures the amount of the consumable partsof assets that are consumed in a period(depreciation) expressed as a percentage ofthe depreciable amount.

Rate of annual asset renewal *The ratio of asset renewal and replacementexpenditure relative to depreciable amount fora period. It measures whether assets arebeing replaced at the rate they are wearing outwith capital renewal expenditure expressed asa percentage of depreciable amount (capitalrenewal expenditure/DA).

Rate of annual asset upgrade/new *A measure of the rate at which assets arebeing upgraded and expanded per annum withcapital upgrade/new expenditure expressedas a percentage of depreciable amount(capital upgrade/expansion expenditure/DA).

Recoverable amountThe higher of an asset's fair value, less coststo sell and its value in use.

Recurrent expenditureRelatively small (immaterial) expenditure orthat which has benefits expected to last lessthan 12 months. Recurrent expenditureincludes operations and maintenanceexpenditure.

Recurrent fundingFunding to pay for recurrent expenditure.

RehabilitationSee capital renewal expenditure definitionabove.

Remaining useful lifeThe time remaining until an asset ceases toprovide the required service level or economicusefulness. Age plus remaining useful life isuseful life.

RenewalSee capital renewal expenditure definitionabove.


Residual valueThe estimated amount that an entity wouldcurrently obtain from disposal of the asset,after deducting the estimated costs ofdisposal, if the asset were already of the ageand in the condition expected at the end of itsuseful life.

Revenue generating investmentsInvestments for the provision of goods andservices to sustain or improve services to thecommunity that are expected to generatesome savings or revenue to offset operatingcosts, eg public halls and theatres, childcarecentres, sporting and recreation facilities,tourist information centres, etc.

Risk managementThe application of a formal process to therange of possible values relating to key factorsassociated with a risk in order to determine theresultant ranges of outcomes and theirprobability of occurrence.

Section or segmentA self-contained part or piece of aninfrastructure asset.

Service potentialThe total future service capacity of an asset. Itis normally determined by reference to theoperating capacity and economic life of anasset. A measure of service potential is usedin the not-for-profit sector/public sector tovalue assets, particularly those not producinga cash flow.

Service potential remainingA measure of the future economic benefitsremaining in assets. It may be expressed indollar values (Fair Value) or as a percentageof total anticipated future economic benefits. Itis also a measure of the percentage of theasset’s potential to provide services that is stillavailable for use in providing services(Depreciated Replacement Cost/DepreciableAmount).

Specific MaintenanceReplacement of higher valuecomponents/sub-components of assets that isundertaken on a regular cycle includingrepainting, replacement of air conditioningequipment, etc. This work generally fallsbelow the capital/ maintenance threshold andneeds to be identified in a specificmaintenance budget allocation.

Strategic Longer-Term PlanA plan covering the term of office of councillors(4 years minimum) reflecting the needs of thecommunity for the foreseeable future. It bringstogether the detailed requirements in theCouncil’s longer-term plans such as the assetmanagement plan and the long-term financialplan. The plan is prepared in consultation withthe community and details where the Councilis at that point in time, where it wants to go,how it is going to get there, mechanisms formonitoring the achievement of the outcomesand how the plan will be resourced.

Sub-componentSmaller individual parts that make up acomponent part.

Useful lifeEither:(a) the period over which an asset is expectedto be available for use by an entity, or

(b) the number of production or similar unitsexpected to be obtained from the asset by theentity.

It is estimated or expected time betweenplacing the asset into service and removing itfrom service, or the estimated period of timeover which the future economic benefitsembodied in a depreciable asset, areexpected to be consumed by the organisation.


Value in UseThe present value of future cash flowsexpected to be derived from an asset or cashgenerating unit. It is deemed to bedepreciated replacement cost (DRC) for thoseassets whose future economic benefits are notprimarily dependent on the asset's ability togenerate net cash inflows, where the entitywould, if deprived of the asset, replace itsremaining future economic benefits.

Source: IPWEA, 2009, AIFMG Glossary

Additional and modified glossary items shown*

bridges - asset management plan

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