building asset management plan

BUILDING ASSET MANAGEMENT PLAN

Building Asset Management Plan2

Building Asset Management Plan 3

CONTENTS

1. EXECUTIVE SUMMARY 4

Context 4

Whatdoesitcost? 5

Whatwewilldo 6

Whatwecannotdo 6

Managingtherisks 6

Confidencelevels 6

Thenextsteps 6

Questionsyoumayhave 7

2. INTRODUCTION 8

2.1 Background 8

2.2 GoalsandObjectivesofAssetManagement 11

2.3 PlanFramework 11

2.4 CoreandAdvancedAssetManagement 13

2.5 CommunityConsultation 13

3. LEVELS OF SERVICE 14

3.1 CustomerResearchandExpectations 14

3.2 StrategicandCorporateGoals 17

3.3 LegislativeRequirements 20

3.4 CommunityLevelsofService 21

3.5 TechnicalLevelsofService 22

4. FUTURE DEMAND 24

4.1 DemandDrivers 24

4.2 DemandForecast 24

4.3 DemandImpactonAssets 25

4.4 DemandManagementPlan 27

4.5 AssetProgramstomeetDemand 28

5. LIFECYCLE MANAGEMENT PLAN 30

5.1 BackgroundData 30

5.2 InfrastructureRiskManagementPlan 34

5.3 RoutineOperationsandMaintenancePlan 35

5.4 Renewal/ReplacementPlan 39

5.5 Creation/Acquisition/UpgradePlan 42

5.6 DisposalPlan 46

5.7 ServiceConsequencesandRisks 46

6. FINANCIAL SUMMARY 48

6.1 FinancialStatementsandProjections 48

6.2 FundingStrategy 53

6.3 ValuationForecasts 54

6.4 KeyAssumptionsMadeinFinancialForecasts 56

6.5 ForecastReliabilityandConfidence 56

7. PLAN IMPROVEMENT AND MONITORING 58

7.1 Accounting/FinancialSystems 58

7.2 ImprovementProgram 60

7.3 MonitoringandReviewProcedures 61

7.4 PerformanceMeasures 61

8. REFERENCES 62

9. APPENDICES 63

AppendixA:MaintenanceResponseLevelsofService 64

AppendixB:Projected10-yearCapitalRenewalandReplacementWorksProgram 68

AppendixC:ProjectedUpgrade/New10-yearCapitalWorksProgram 69

AppendixD:BudgetedExpendituresAccommodatedinLTFP 70

AppendixE:RiskRegister 72

AppendixF:Abbreviations 77

AppendixG:Glossary 78


1. EXECUTIVE SUMMARY

Context

AdelaideCityCouncil(Council)isthecustodianofinfrastructureassetsheldonbehalfofthecommunity.Councilholdsassetstodirectlyorindirectlysupportdeliveryofservicestothecommunity.

The City of Adelaide Strategic Plan 2016 - 20containsfourkeythemeswhichsupportthedeliveryofthevisionforAdelaidetobeasmart,green,liveable,boutiquecityfullofrichexperiences.Thefourthemescomprise:

• Smart;

• Green;

• Liveable;and

• Creative.

ThetargetssetthedirectionandroleforCouncilinthedeliveryoftheStrategicPlanwillresultinconsiderablechangeoverthenext10yearsinthedeliveryofbuildingassets.

Adaptationofnewtechnologies,identifyingmoreenvironmentalsustainablesolutionsandmeetingincreasedcommunitydemandthroughgrowthwillallbefactorsthatwillneedtobeconsideredtoensurebuildingassetsmeetcommunityneeds.

Council’sbuildingassetshelptodirectlyorindirectlycontributetothedeliveryoftheobjectivesandactionstodelivertheStrategicPlan.Thesebuildingsareprovidedforthebenefitofresidents,workers,andvisitorstothecity.

EffectivemanagementofassetsenablesCounciltomeetthesocial,safety,economic,environmental,andrecreationalneedsofthecommunitynowandinthefuture.

Assetplanningdecisionsarebasedonanevaluationofalternativeswhichassessesrisksandbenefitsaswellasvalueformoneyacrosstheasset’slifecycle.

Buildingassetsheldprovideaccommodationforthecivic,administrativeandoperationalfunctionsofCouncilaswellasprovidingcommunityservicessuchassportingandrecreationalactivitiessuchaslibraries,communitycentres,andpublictoilets.Thebuildingportfolioalsoincludesanumberofsitesusedforcommercial(incomegenerating)purposes.

ThepurposeofthisAssetManagementPlan(AMPlan)istoreviewthecurrentandongoingcostofprovidingbuildingassetsandsupportthefuturedeliveryofbuildingassetsthatmeettherequirementsofthecommunityandenduserswithintheavailablebudget.

The Building Asset Class

TheBuildingAssetClasscomprisesbuildingsallocatedforthefollowinguses:

• Corporateuse(includingtownhall,administration,anddepot);

• Community(sportingclubs,communitycentres,andlibraries);

• Commercialassets(leasedtothirdpartiesforacommercialreturn);and

• Facilities(includingpublictoiletsandpumphouses).

Theseinfrastructureassetshaveareplacementvalueof$425,232,540.

Whilstthemajorityofbuildingassetsaregenerallyingoodcondition,theirongoingsuitabilitytomeetfunctionalneedshasyettobefullyassessed.Thiswillincludeidentifyinghowwellparticularassetsmeetthefunctionalrequirementsofexistingandfutureusersofthebuildings.


What does it cost?

TheprojectedfinancialoutlaysnecessarytoprovidetheservicescoveredbythisAMPlan,includingoperations,maintenance,renewalandupgradeofexistingassetsoverthe10-yearplanningperiodis,onaverage,$13,874,000peryear.Thisfigureincludesprojectionsfornewassetsidentifiedtomeetgrowthindemand.Theforecastexpenditurecomprises,onaverage,thefollowing:

• Operational$4.6million(33%);

• Maintenance$3.8million(28%);

• Renewal$4.7million(34%);and

• Upgrade/new(5%)*.

*Upgrade/newworksareincludedintheAMPlan,butarenotincludedintheLong Term Financial Plan (LTFP).Fundingfortheseworkswillbesubjecttotheannualbusinessplanandbudgetprocess.

Estimatedavailablefundingforthisperiodis,onaverage,$13,274,000peryear,whichis95%ofthecosttoprovidetheservice.Thisisafundingshortfallof$600,000onaverageperyear,representingtheanticipatedexpenditureforneworenhancedbuildingassetsasidentifiedinthedemandsectionofthisAMPlan.

ProjectedexpenditurerequiredtoprovideservicesintheAMPlancomparedwithplannedexpenditurecurrentlyincludedintheLTFPareshowninthegraphbelow.

Figure 8: Projected and LTFP Budgeted Renewal Expenditure

$0

$1,000

$2,000

$3,000

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$5,000

$6,000

$7,000

$8,000

2034

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2032

2031

2030

2029

2028

2027

2026

2025

2024

2023

2022

2021

2020

2019

2018

2017

2016

2015

($’0

00)

Projected renewals Planned renewals

Year

Expenditure year 1


What we will do

Weplantoprovidebuildingassetservicesforthefollowing:

• Subjecttoadditionalfunding,provide10neworupgradedpublictoiletsbasedonaprioritisationplanoverthenext10years;

• RenewalofcarpetsandotherrestorationworksidentifiedintheAsset Maintenance PlanfortheAdelaideTownHall;

• Operateandmaintainallownedandoperatedbuildingstomeetlegislativerequirementsanduserrequirements;and

• Meetownerrequirementsundertherelevantlegislativeandcontractualobligationsforallcommercialassetsleasedtothirdparties.

What we cannot do

Thecurrent$600,000shortfallrepresentstheaverageexpenditurefornewbuildingassetsasidentifiedinthisAMPlan.Thisshortfallwillneedtobefundedthroughtheannualbusinessplanningprocess.

Managing the risks

Therearerisksassociatedwithprovidingtheserviceandnotbeingabletocompleteallidentifiedactivitiesandprojects.Wehaveidentifiedmajorrisksas:

• Unknownstructuralbuildingconditions;

• Changestolegislationwhichrenderbuildingsnon-compliant;and

• Inabilitytomeetchangingcommunitydemandfornewassets.

Wewillendeavourtomanagetheseriskswithinavailablefundingby:

• Regularinspectionandauditingofbuildingsincludingstructuralaudits;

• Prioritisingrenewal/replacementprograms;

• Monitoringcustomersatisfactionsurveysonbuildingcondition;

• Reviewingbuildingassetstoidentifyunder-utilisedorredundantassetsfordisposal;

• Managingcontractualarrangementswithbuildingoccupiers;and

• Reviewingproactivemaintenanceprograms.

Confidence levels

ThisAMPlanisbasedonlowlevelofconfidenceinformationastheconditiondataforallofthebuildingcomponentsisincompleteandtherehasbeenlimitedconsultationwiththecommunityandenduserstodeterminesatisfactionwithexistinglevelsofserviceforthebuildings.

The next steps

TheactionsresultingfromthisAMPlanare:

• ReviewandalignwithCouncil’sStrategic Plan 2016 - 20;

• ReviewandalignwiththeupdatedAdelaide Park Lands Management Strategy, Adelaide Design Manual,andotherkeystrategicdocuments;

• CompletePublic Toilet Action Plan;

• CompleteHorticultural Hub Action Plan;

• Improvefinancialreporting;


• ReviewandupdateAsbestos / Hazardous Material Management Plan;

• Reviewperformancebasedoncustomersatisfactionsurveys;

• Reviewmaintenanceandoperationalcoststoidentifyanyefficienciesorimprovementstoproactivemaintenanceprograms;

• Reviewstrategictargets/strategiesthatrelatetobuildingperformancethatmaybedevelopedorrevisedaspartofthestrategicplanningprocess;and

• Improvethesystemforcollecting,monitoringandreviewingbuildingconditiondata,structuralcondition,andbuildingperformance.

Questions you may have

What is this plan about?

ThisAMPlancoverstheinfrastructureassetsthatservetheCouncilcommunity’sbuildingneeds.Theseassetsincludebuildingsthatsupportsportingclubs,civicandadministrationbuildings,libraries,communitycentres,publictoilets,publicrealmdepots,andsheds.

What is an AM Plan?

Assetmanagementplanningisacomprehensiveprocesstoensuredeliveryofservicesfrominfrastructureisprovidedinafinanciallysustainablemanner.

AnAMPlandetailsinformationaboutinfrastructureassetsincludingactionsrequiredtoprovideanagreedlevelofserviceinthemostcosteffectivemanner.Theplandefinestheservicestobeprovided,howtheservicesareprovided,andwhatfundsarerequiredtoprovidetheservices.

What will we do?

Wewillcontinuetoreviewanddevelopoptions,costsandprioritiesforfutureBuildingservices,consultwiththecommunitytoplanfutureservicestomatchthecommunityserviceneedswithabilitytopayforservicesandmaximisecommunitybenefitsagainstcosts.

What can you do?

WewillbepleasedtoconsideryourthoughtsontheissuesraisedinthisAMPlanandsuggestionsonhowwemaychangeorreducetheBuildingmixofservicestoensurethattheappropriatelevelofservicecanbeprovidedtothecommunitywithinavailablefunding.


2.1 Background

Councilisthecustodianofinfrastructureassetsheldonbehalfofthecommunity.Councilholdsassetstodirectlyorindirectlysupportdeliveryofservicestothecommunity.

Assetplanningdecisionsarebasedonanevaluationofalternativeswhichassessesrisksandbenefitsaswellasvalueformoneyacrosstheasset’slifecycle.

ThepurposeofthisAMPlanistodemonstratetheresponsiblemanagementofbuildingassets(andservicesprovidedfromtheseassets),compliancewithregulatoryrequirements,andtocommunicatefundingneededtoprovidetherequiredlevelsofserviceovera20-yearplanningperiod.

ThisplanfollowstheformatforAMplansrecommendedinSection4.2.6oftheInternational Infrastructure Management Manual1.

TheAMPlanistobereadwiththeorganisation’sAsset Management Policyandthefollowingassociatedplanningdocuments:

• Draft City of Adelaide Strategic Plan 2016 - 20*

• Long Term Financial Plan

• Community Land Management Plans

• Adelaide Park Lands Management Strategy

• Adelaide Park Lands Master PlanandBuilding Guidelines

• Adelaide Park Lands Sports Infrastructure Master Plan

• *(andanyfuturestrategicplansadoptedbyCouncil)

TheinfrastructureassetscoveredbythisAMPlanareshowninTable2.1.Theseassetsareusedtoprovideaccommodationforcivic,corporate,commercial,andcommunitysportingandrecreationalusesaswellasaccommodatingthepublicrealmoperationalstaffandtheprovisionofpublictoiletstothecommunity.

Table 2.1: Assets Covered by this Asset Management Plan

Asset category Quantity 2013 Replacement value

BUILDINGS

• Corporate 4 $118,279,900

• Community 80 $101,184,630

• Commercial 12 $195,385,440

• Facilities 78 $10,382,900

TOTAL 174 $425,232,540

Note:Someassetsprovidemultiplesub-categoriese.g.asportingclub(community)andpublictoilet(facilities)locatedinthesamebuilding.

Examplesofbuildingsinthesesubcategoriesinclude:

Corporatebuildings: Civic(CouncilGovernance–Chamber/CommitteeRooms,MayorandElectedMembersOffices, CivicReception) Administrative(administrationoffices,nursery,depot)

1.IPWEA,2011,Sec4.2.6,ExampleofanAMPlanStructure,pp4|24–27.

2. INTRODUCTION


Communitybuildings: Sportingandcommunitybuildings(leasedbythirdparties) Librariesandcommunitycentres,visitorinformationcentres(operatedbyCouncilstaff) Sportingfacilities(operatedbyCouncilstaff)

Commercialbuildings: ParkLandsandnon-ParkLandbuildingsleasedtocommercialoperators

Facilities: Publictoilets Publicrealmfacilities(storagesheds,lunchrooms,changefacilities) Pumphousesandotherplantrooms

KeystakeholdersinthepreparationandimplementationofthisAMPlanare:ShowninTable2.1.1.

Table 2.1.1: Key Stakeholders in the Asset Management Plan

Key stakeholder Role in AM Plan

ElectedMembers • Representneedsofcommunity;

• Allocateresourcestomeettheorganisation’sobjectivesinprovidingserviceswhilemanagingrisks;and

• Ensureorganisationisfinancialsustainable.

CEO/Directors Allocatestaffingresources.

InfrastructureProgram Prioritiseandplanforrequiredworkstomeetrequiredservicelevelsforbuildingsbasedonenduserrequirements.Developmentofforwardbudgetstoenableworkstobefunded.

Lessees–commercialandcommunitylessees(sportingandcommunitygroups)

Providefeedbackonservices.

Communityandbuilderusers Providefeedbackonservices.

Internalusersofbuildingassets(e.g.libraries,communitycentres,administrativestaff,depot)

ProvideinputandadviceonfuturerequirementsandidentifyopportunitiestomaximiseendusersatisfactionwithBuildingAssetClass.

Council(internal)StrategicPlanners WorkwithAssetManagerstodevelopstrategiesthatcanbesupportedthroughtheAMPlans.

PublicRealmProgram ProvideinputandmaintaintheinfrastructuremanagedundertheAMPlantomeettechnicallevelsofservice,whetherinternallyorthroughthirdpartycontractors.

CapitalProjectManagementTeam Deliveryofthecapitalworksprojects.

DesignandStrategy Design,documentationsupportfordeliveringcapitalworksprojects,andstrategicoutcomes.

FinanceandBusinesses • FundingforLTFP;and

• Provideinputandadviceonfuturerequirementsforongoingoperationofcommercialcarparks.

Property Provideinputonpotentialacquisitionsanddisposalofinvestmentassetsand/orreviewofperformanceofbuildingassets,managebuildingoccupiers.

Governance Developmentofannualbusinessplanandbudget,StrategicManagementPlan,andotherkeystrategicplans.


Chief Executive

Officer

Director Community

Associate Director

DesignandStrategy

Asset Information

Services

Director Growth

Associate Director

Infrastructure

Infrastructure Assets

Director Operations

Associate Director

PublicRealm

Buildings and Park Lands

Assets

Director Services

Theorganisationalstructureforservicedeliveryfrominfrastructureassetsisdetailedbelow:


2.BasedonIPWEA,2011,IIMM,Sec1.2p1|7.

2.2 Goals and Objectives of Asset Management

Theorganisationexiststoprovideservicestoitscommunity.Someoftheseservicesareprovidedbyinfrastructureassets.Wehaveacquiredinfrastructureassetsby‘purchase’,bycontract,constructionbyourstaff,andbydonationofassetsconstructedbydevelopersandotherstomeetincreasedlevelsofservice.

EffectivemanagementofassetsenablesCounciltomeetthesocial,safety,economic,environmental,andrecreationalneedsofthecommunitynowandinthefuture.

Ourgoalinmanaginginfrastructureassetsistomeetthedefinedlevelofservice(asamendedfromtimetotime)inthemostcosteffectivemannerforpresentandfutureconsumers.Thekeyelementsofinfrastructureassetmanagementareasfollows:

• Providingadefinedlevelofserviceandmonitoringperformance;

• Managingtheimpactofgrowththroughdemandmanagementandinfrastructureinvestment;

• Takingalifecycleapproachtodevelopingcost-effectivemanagementstrategiesforthelongtermthatmeetthedefinedlevelofservice;

• Identifying,assessing,andappropriatelycontrollingrisks;and

• HavingaLTFPwhichidentifiesrequired,affordableexpenditure,andhowitwillbefinanced2.

2.3 Plan Framework

Keyelementsoftheplanareasfollows:

• Levelsofservice–specifiestheservicesandlevelsofservicetobeprovidedbytheorganisation;

• Futuredemand–howthiswillimpactonfutureservicedeliveryandhowthisistobemet;

• Lifecyclemanagement–howwewillmanageourexistingandfutureassetstoprovidedefinedlevelsofservice;

• Financialsummary–whatfundsarerequiredtoprovidethedefinedservices;

• Assetmanagementpractices;

• Monitoring–howtheplanwillbemonitoredtoensureitismeetingtheorganisation’sobjectives;and

• AssetManagementImprovementPlan.

AroadmapforpreparinganAMPlanisshownonthefollowingpage.


Road Map for preparing an Asset Management Plan

Source:IPWEA,2006,IIMM,Fig1.5.1,p1.11.

AM Plan review

and audit

Define scope and structure

of plan

Implement improvement

strategy

Annual Plan / Business Plan

Is the plan affordable?

Corporate Planning

ConfirmstrategicobjectivesandestablishAMpolicies,strategiesandgoals

DefineresponsibilitiesandownershipDecidecoreoradvancedAMPlan

Gainorganisationcommitment

Review / Collate Asset Information

ExistinginformationsourcesIdentifyanddescribeassets

DatacollectionConditionassessmentsPerformancemonitoring

Valuationdata

Establish Levels of Service

EstablishstrategiclinkagesDefineandadoptstatements

EstablishmeasuresandtargetsConsultation

Financial Forecasts

LifecycleanalysisFinancialforecastsummary

ValuationdepreciationFunding

Improvement Plan

Assesscurrent/desiredpracticesDevelopImprovementPlan

Lifecycle Management Strategies

DeveloplifecyclestrategiesDescribeservicedeliverystrategy

RiskmanagementstrategiesDemandforecastingandmanagement

Optimiseddecisionmaking(renewals/newworks/disposals)OptimisemaintenancestrategiesIn

form

atio

n m

an

agem

ent

an

d d

ata

imp

rove

men

t

IterationReconsiderservicestatements

OptionsforfundingConsultwithCouncil

Consultwithcommunity


2.4 Core and Advanced Asset Management

ThisAMPlanispreparedasa‘core’AMPlanovera20-yearplanningperiodinaccordancewiththeInternational Infrastructure Management Manual3.Itispreparedtomeetminimumlegislativeandorganisationalrequirementsforsustainableservicedeliveryandlongtermfinancialplanningandreporting.Coreassetmanagementisa‘topdown’approachwhereanalysisisappliedatthe‘system’or‘network’level.

FuturerevisionsofthisAMPlanwillmovetowards‘advanced’assetmanagementusinga‘bottomup’approachforgatheringassetinformationforindividualassetstosupporttheoptimisationofactivitiesandprogramstomeetagreedservicelevels.

2.5 Community Consultation

This‘core’planispreparedtofacilitatecommunityconsultationinitiallythroughfeedbackonpublicdisplayofdraftAMPlanspriortoadoptionbytheCouncil.FuturerevisionsoftheAMPlanwillincorporatecommunityconsultationonservicelevelsandcostsofprovidingtheservice.ThiswillassisttheCouncilandthecommunityinmatchingthelevelofserviceneededbythecommunity,servicerisks,andconsequenceswiththecommunity’sabilityandwillingnesstopayfortheservice.

3.IPWEA,2011,IIMM.


3. LEVELS OF SERVICE

3.1 Customer Research and Expectations

InMay2015,CouncilundertookacustomerservicesurveytomeasurethesatisfactionofcustomersusingCouncilservicesdeliveredbyinfrastructureassets.

Over2,000cityusersweresurveyedviaan‘onstreetintercept’methodatvariouslocationsacrossthecity.Toensurethatinformationwascapturedfromabroadrangeofcityusers,surveyswereconductedatvarioustimesthroughoutthedayandintheeveningaswellasonweekdaysandweekends.

UsersofthecitywereaskedontheirperceptionsofCouncil’sperformanceonvariousaspectsofpublicrealm.Respondentswereaskedtoprovideascoreofzeroto10where‘zero’meantCouncilwasperformingalotworsethanexpectedand‘10’meantthatCouncilwasperformingalotbetterthanexpected.

Forbuildings,thesurveymeasuredthesatisfactionwiththeprovisionofadequatepublictoilets.Thissurveyresultedinanaveragescoreof5.8.Thismidwaypointshowsthatthemajorityofrespondentsseemedtofeelthattheprovisionofadequatepublictoiletswasneitherworsenorbetterthanexpected.Only20%ofcityusersprovidedascoreofeightandaboveforthiscategory.

Provide Adequate Public Toilets

Source:2015AdelaideCityCouncilCustomerUserPerception(CUP)survey

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BetweenMarchandJuly2015,publicengagementontheAdelaideParkLandswasundertakentoidentifycommunityexpectationstoassistinthedevelopmentoftheAdelaide Park Lands Management Strategy.FeedbackreceivedfromthisengagementidentifiedsupportforprovisionoffacilitiesthatwillenablepeopletostaylongerandfeelmorecomfortableintheParkLands.Forthebuildingportfolio,thisprimarilyrelatestotheprovisionofpublictoilets,whilstthesportingandrecreationalbuildingssupporttheongoingactivationandvibrancyoftheParkLands.

InNovember2015,consultationonthedraftAMPlancommunitylevelsofservicewasundertaken.TheresultsofthisconsultationwereconsistentwithboththeearliercustomersatisfactionsurveyandParkLandsconsultationwiththedeliveryofpublictoiletstheonlyareawhereanincreaseintheservicedeliverywasidentified.

Table 3.1: Levels of Service

Asset Decrease Adequate Increase Comments

BUILDINGS

Library ✔ Thequalityoflibrariesisconsideredtobeverygood.

Sportingfacilities ✔ Sportingfacilitiesareconsideredtobepredominantlywellmaintained.

Publictoilets ✔ ✔ Satisfactionwithpublictoiletsvaries.Someareconsideredadequateandothersneedimprovedmaintenanceandsignagetowardsthem.

Communitycentres ✔ Communitycentresareconsideredtobepredominantlywellmaintained.

Other ✔ Otherfacilities,suchastheAquaticCentreandTownHallareconsideredadequate.


Figure 22: Council Buildings Most Regularly Used

Source:2015AdelaideCityCouncilsurveyonAMPlancommunitylevelsofservice

Library

Sporting facilities

Public toilets

Community Centre

Other

0 20 40 60 80 100

Never

Once a year

1 - 6 times / year

Monthly

Weekly

Daily

Library

Sporting facilities

Public toilets

Community Centre

Library

Sporting facilities

Public toilets

Community Centre

Other

0 20 40 60 80 100

Never

Once a year

1 - 6 times / year

Monthly

Weekly

Daily

Library

Sporting facilities

Public toilets

Community Centre

Figure 23: Utilisation of Council Buildings

Source:2015AdelaideCityCouncilsurveyonAMPlancommunitylevelsofservice


3.2 Strategic and Corporate Goals

ThecontentofthisAMPlanwaspreparedinearly2014underthedirectionofThe City of Adelaide Strategic Plan 2012 - 16andassociatedCorporation Plan 2012 - 16andreflectsthegoalsandaspirationsofthepreviousCouncilterm(November2010-October2014).

WiththeelectionofthenewCouncilinOctober2014,anewCouncil Strategic Plan 2016 - 20wasunderdevelopmentduringthefinalisationofthisAMPlan.ObjectivesandActionsfromtheupdatedplanhavebeenidentifiedinTable3.2below.

Fromtheinformationavailable,thefollowingvision,objectivesandactionsinThe City of Adelaide Strategic Plan 2016 - 20associatedwithcommunityservicesprovidedbybuildinginfrastructureassetshavebeenidentified.

Ourvisionis:Adelaide is a smart, green, liveable, boutique city full of rich experiences

Ourprimarygoalis:To strengthen the City economy by growing the number of people living, working, playing, visiting and studying in the City every day

AsthecapitalcityofSouthAustralia,Adelaidehasavitalroletoplayinshapingthefutureofourstate.

Wefaceunprecedentedchangesarisingfrommajorglobal,national,andlocaltrends.Reassuringly,ourprovenrecordofcreativity,innovation,andsocialtransformationseesourcitywellplacedtoleadthestateinmeetingthesechanges.

OurplanistoenrichAdelaide’slifestyleandboostitsgrowthbybecomingoneoftheworld’ssmartestcitieswithagloballyconnectedandopportunityricheconomy.

Wewillbeoneoftheworld’sfirstcarbonneutralcitiesandagloballeaderinsustainabilityandrespondingtoenvironmentalchange.

Adelaidewillalwaysbeadistinctivelyuniquecapitalcitythatsupportsabalancedlifestyleandastrongcommunity.Ourauthenticanddiverserangeofexperienceswillbeinternationallyrenowned.

Ourmission:

Toachievethevision,Councilhasadoptedfourkeyoutcomeswhichwillguidetheorganisationsprojects,plans,policiesandstrategiesincludingthisAMPlan.Thefouroutcomes/missionstatementsare:

• Smart–Aworldsmartcitywithagloballyconnectedandopportunityricheconomy;

• Green–Oneoftheworld’sfirstcarbonneutralcitiesandaninternationalleaderinenvironmentalchange;

• Liveable–Adiverseandwelcomingcapitalcitywithanenviablelifestyleandstrongcommunity;and

• Creative–Acityofauthenticandinternationallyrenownedexperiences.

RelevantobjectivesandactionsfromThe City of Adelaide Strategic Plan 2016 - 20andhowtheseareaddressedinthisAMPlanareidentifiedbelow.


ThereviewoftheStrategicPlanhasonlybeenundertakenatahighlevel,withagreateranalysisrequiredtoidentifyanybudgetmodificationorchangestoservicedelivery.

ThisreviewwillcommenceoncethenewStrategicPlanhasbeenformallyadoptedbyCouncil.

Table 3.2: Strategic Plan 2016 - 20 Objectives and Actions and how these are addressed in this Asset Management Plan

Aspiration Objective Action How aspirations and objectives are addressed in AM Plan

Smart By2020,ourcity’seconomyisgrowingfasterthantheAustralianeconomy,onthewaytoanannualgrowthof5%by2040.

Promoteopportunitiesanddevelopprojectstoshowcasethecity’suniqueheritageandcharacterasacatalystforsustainablegrowthandtogrowtheheritagetourismmarket.

Regularmaintenanceandinspectionofbuildings.Settingappropriatemaintenancestandardsforheritagelistedbuildings.

Totalbusinessesinthecitywillgrowfrom5,000toover5,300andworkersfrom89,000to94,000by2020,onthewayto7,000businessesandover102,000workersby2040.

By2017,reviewCouncil’scommercialoperationstodeterminethebestmanagementmodels.

Workwithbuildingoccupierstodetermineappropriatemaintenancestandardstosupportoperationalrequirements.

Green Reducecitycarbonemissionsby35%fromthe2006-07baseline,onthewaytoan80%realreductionby2040.

ImproveenergyperformanceanduseofrenewableenergyinCouncilandprivatelyownedbuildings,includingconsiderationofhightechwindturbines,solarheatingandsolarenergygenerationandbatterystorage.

Supportenvironmentallysustainabledesign,constructionandmanagementofcitybuildings.

By2020,theenergyrequirementforallCouncilbuildingswillbesourcedfromrenewableenergysources.

Buildingmaintenancetoincludefocusonreplacingbuildingcomponentswithsustainableandmoreenergyandwaterefficientsolutions.

Greenspaceandgreeneryinthebuiltupareasofthecitytoincreaseby100,000squaremetersby2020onthewaytoarealreductionincitytemperaturesby2040.

Increasepublicandprivatecitygreeningwithstreettrees,gardens,communitygardens,greenwallsandroofs,vegetablegardensonstreetverges,providingincentiveswhereappropriate.

Exploreopportunitiestoincluderoofgardens,greenwallsonexistingandnewbuildings.


Table 3.2: Strategic Plan 2016 - 20 Objectives and Actions and how these are addressed in this Asset Management Plan continued

Aspiration Objective Action How aspirations and objectives are addressed in AM Plan

Liveable Thenumberofpeoplelivinginthecitywillgrowfrom23,000to28,000by2020,onthewayto50,000by2040.

Createworld-classinfrastructurebyadoptingathree-yearrollingcapitalworksprogramforthecityandParkLandstoensureallnewandexistinginfrastructurearedeliveredandmaintainedtohighqualitystandards,incorporatingtechnology,heritage,artsandgreenelements.

Maintainathree-yearrollingcapitalworksprogramtoensureallnewandexistinginfrastructurearedeliveredandmaintainedtohighqualitystandards.

Regularmaintenanceandinspectionofbuildings.Settingappropriatemaintenancestandardsforheritagelistedbuildings.

Adelaideislistedinthetopthreemostliveablecitiesintheworldby2020,onthewaytobeingthemostliveablein2040.

By2017,endorseaCentralMarketArcadeRedevelopmentPlanandcommenceworksby2019.

Workwithstakeholderstoplanforanyidentifiedenhancementstobuildingsthatmaysupportthedeliveryofthisobjective.

WorkwiththeStateGovernmenttotackleaffordabilityanddeliverarangeofhousinginitiatives,suchasadaptivebuildingre-useandnewbuildingtechnologies.

ExploreopportunitiesinCouncil’scurrentpropertyholdingsorpursuestrategicopportunitiestoleadorpartnerinfuturepropertydevelopments.

FuturedemandisincludedinSection4.The Lifecycle Management Plan(Section5)includesthedevelopmentofanongoingassetrenewalprogram.

Creative ThenumberofpeopleattendingeventsinthecityandParkLandshasgrownby5%by2020,onthewayto15%growthby2040.

By2020,developbuildandupgradeinfrastructurethatsupportseventsandissensitivetotheenvironmentwithinkeyeventspacesinthecityandParkLands.

FuturedemandisincludedinSection4.

Ongoingconsultationwithkeystakeholderswillidentifyanychangestothedeliveryofcommunityassets.


3.3 Legislative Requirements

TheorganisationhastomeetmanylegislativerequirementsincludingAustralianandStatelegislationandStateregulations.Theseinclude:

Table 3.3: Legislative Requirements

Legislation Requirement

Local Government Act 1999 Setsoutrole,purpose,responsibilities,andpowersoflocalgovernmentsincludingthepreparationofaLTFPsupportedbyassetmanagementplansforsustainableservicedelivery.

Building Code of Australia MeetrequirementsforoccupationundertheapprovedBuildingClass.

Development Act 1993 Regulatestheuseandmanagementofbuildingsincludingtheirdesignandconstruction,ongoingmaintenance,andconservation.

Disability Discrimination Act 1992

Toensurepersonswithdisabilitieshaveaccesstothebuildingandfacilities.

Heritage Act 1993 and Heritage Places Act 1993

TheportfolioincludesbuildingsthatareStateandLocallyHeritagelistedbuildings.TheseActssetouttheresponsibilitiesofthelandownertomaintainandpreservetheheritagevalueofthebuildings.

Work Health and Safety Act 2012

Provideasafeworkenvironmentforworkersonthesite.

Environment Protection Act 1993

Responsibilitynottocauseenvironmentalharm(e.g.noisepollution,contaminationofwater).

Public Health Act 2011 Maintenanceofcoolingtowers.

Food Act 2001 Setsoutstandardsforfoodhandling.

Liquor Licensing Act 1997 Setsoutresponsibilitiesforholdersofliquorlicence.

Adelaide Park Lands Act 2005 SpecificrequirementrelatingtothemanagementanduseoftheAdelaideParkLands.

City of Adelaide Act 1998 SetsouttoestablishmechanismstoenhancetheroleofthecityofAdelaideasthecapitalcityofSouthAustralia;tomakespecialprovisioninrelationtothelocalgovernanceofthecityofAdelaide;andforotherpurposes.

Retail and Commercial Leases Act 1995

AnActregulatingtheleasingofcertainproperties.

TheCouncilwillexerciseitsdutyofcaretoensurepublicsafetyinaccordancewiththeInfrastructure Risk Management PlanpreparedinconjunctionwiththisAMPlan.ManagementofinfrastructurerisksiscoveredinSection5.2.


3.4 Community Levels of Service

Levelsofservicearemeasuresthatcanidentifytheservicequalityofanactivity.Levelsofservicecanbeclassifiedintodifferentcategories.InthisAMPlan,twocategorieshavebeenused:communitylevelsofserviceandtechnicallevelsofservice.Theselevelsofserviceidentifywhatwillbeprovidedtothecommunity.

Levelsofservicearedeterminedfromthepublicconsultationprocessandcustomersatisfactionsurveys.TheyreflectthestrategicobjectivesofCouncilandarebasedon:

• Customerexpectationsforqualityofserviceandwillingnesstopay;

• Legislativerequirements:environmentalstandards,regulations,andlegislationthatimpactsthewayassetsaremanaged;

• Council’smissionandobjectivesasstatedintheStrategicPlan;

• Availableresources,particularlyfinancialconstraints;and

• DesignStandardsandCodesofPractice.

Communitylevelsofservicemeasurehowthecommunityreceivestheserviceandwhethertheorganisationisprovidingcommunityvalue.

CommunitylevelsofservicemeasuresusedintheAMPlanare:

Quality How good is the service?

Function Does it meet users’ needs?

Capacity / utilisation Is the service over or under used?

ThecurrentandexpectedcommunityservicelevelsaredetailedinTables3.4and3.5.Table3.4showstheagreedexpectedcommunitylevelsofservicebasedonresourcelevelsinthecurrentLTFPandcommunityconsultation/engagement.Currentperformanceisbasedontheresultsofthecustomersatisfactionsurveyundertakenin2015(CUPsurvey).

Table 3.4: Community Levels of Service

Service attribute

Service objective Performance measure process

Current performance (2015)

Expected position in 10 years based on current LTFP

COMMUNITYLEVELSOFSERVICE

Quality(Condition)

Providebuildingsofanappropriatestandard.

CustomerSatisfactionSurvey

Customerservicerequests

2%disagreethatbuildingsareofsatisfactorystandard.

Lessthan5%ofcustomersdissatisfied.

Function(Suitability)

Meetuserrequirements. CustomerSatisfactionSurvey


4%disagreethatbuildingsmeettheirneeds.


Function(Accessibility)

Buildingsaccessibleandavailabletomeetdemand.



4%disagreethatbuildingsareeasilyaccessible.


Capacity(Quantity)

AvailabilityofCouncilbuildingsacrossthecitymeetsdemand.



5%disagreethatbuildingsareeasilyaccessible.


Capacity(Quantity)

ProvidepublictoiletsatregularintervalsacrosstheCBDandParkLands.

Customerrequests/consultationfeedback

Undersupplyofpublictoiletsacrosscity.

Undersupplyofpublictoilets.


3.5 Technical Levels of Service

Technicallevelsofservice-supportingthecommunityservicelevelsareoperationalortechnicalmeasuresofperformance.Thesetechnicalmeasuresrelatetotheallocationofresourcestoserviceactivitiesthattheorganisationundertakestobestachievethedesiredcommunityoutcomesanddemonstrateeffectiveorganisationalperformance.

Technicalservicemeasuresarelinkedtoannualbudgetscovering:

• Operations–theregularactivitiestoprovideservicessuchasopeninghours,cleansing,andenergy;

• Maintenance–theactivitiesnecessarytoretainanassetasnearaspracticabletoanappropriateservicecondition(e.g.guttercleaning,equipmentservicing,minorrepairs);

• Renewal–theactivitiesthatreturntheservicecapabilityofanassetuptothatwhichithadoriginally(e.g.frequencyandcostofpaintingandbuildingcomponentreplacementsuchasairconditioners);and

• Upgrade–theactivitiestoprovideahigherlevelofservice(e.g.)oranewservicethatdidnotexistpreviously(e.g.anewlibrary).

ServiceandAssetManagersplan,implement,andcontroltechnicalservicelevelstoinfluencethecustomerservicelevels4.

Table3.5showsthetechnicallevelofserviceexpectedtobeprovidedunderthisAMPlan.TheagreedsustainablepositionintheTabledocumentsthepositiontobeagreedbytheCouncilfollowingcommunityconsultationandtrade-offofservicelevelsperformance,costs,andriskwithinresourcesavailableintheLTFP.

4.IPWEA,2011,IIMM,p2.22


Tab

le 3

.5: T

ech

nic

al L

evel

s o

f S

ervi

ce

Ser

vice

at

trib

ute

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vice

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ty m

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ent

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ed f

or

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le c

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on

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VE

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FS

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ratio

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uild

ings

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tnee

ds

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and

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.

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ualc

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ules

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ere

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get

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g(In

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bish

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$92

,000

;

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urity

$38

5,00

0;

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ctric

ity$

1,48

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0;

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$88

,300

;and

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re$

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00.

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4.1 Demand Drivers

Driversaffectingdemandincludepopulationchange,demographicchanges,seasonalfactors,vehicleownershiprates,consumerpreferencesandexpectations,technologicalchanges,economicfactors,andenvironmentalfactors.

Asacapitalcity,buildingassetsmustserveboththelocalresidentpopulationneedsaswellasthedailycommuterandvisitorneedstothecity.Demandfortheservicessupportedbythebuildingassetswillthereforebeinfluencedbyfactorsexternaltothefixedresidentbase.

Theinfluenceofothertiersofgovernment,particularlytheStateGovernmentisanotherdriverthatcanimpactonthedemandforbuildingassetsorthelevelofserviceprovidedthroughthoseassets.

Furtherresearchtoinformthedevelopmentofplansfortheupgrade,renewalorprovisionofnewfacilitiestomeetfuturedemandhasbeenidentifiedintheimprovementprogram(Section7.2)ofthisAMPlan.

4.2 Demand Forecast

ThepresentpositionandprojectionsfordemanddriversthatmayimpactfutureservicedeliveryandutilisationofassetsareidentifiedandaredocumentedinTable4.3.Themaindrivers(discussedindetailin4.3)arisefromtheprojectedincreaseinthecitypopulationandincreasedactivationandutilisationoftheParkLands.

4. FUTURE DEMAND


4.3 Demand Impact on Assets

TheimpactofdemanddriversthatmayaffectfutureservicedeliveryandutilisationofassetsareshowninTable4.3.

Table 4.3: Demand Drivers, Projections, and Impact on Services

Demand drivers Present position Projection Impact on services

Populationgrowth(asidentifiedinStateStrategy)

Estimatedpopulationin2014–22,000.

The30-year Plan for Greater Adelaideincludesatargettoincreasethecity’sresidentialpopulationto48,000by2040.

Councilresearchforecastdominantincreaseinpopulationby2034iswithinthe20-24agegroupandthisgroupwillrepresentover20%oftotalpopulation,with36%ofthepopulationinthe20-29yearagegroup,predominantlyinsolepersonhouseholds.

Increaseddemandforsocialinfrastructureassetssuchaslibraries,recreational,andcommunityfacilities.

The City of Adelaide Strategic Plan 2016 - 20

ObjectivesandactionshaveyettobeendorsedbyCouncil.

Increasetheuseof‘green’technologytoincreasethesustainabilityofCouncilownedbuildingsandreducecarbonemissions.

Additionalcapitalandongoingmaintenanceandoperationalcoststoimprovesustainabilityofbuildingsandinstallationofgreenroofs/greenwallsincludingadditionalcoststomonitorongoingperformance.

RedevelopmentoftheCentralMarketArcade.

Redevelopmentorenhancementofbuildingsmayincreaseoperationalandmaintenancecosts.

Enhancehistoricbuildingstoencouragetourism.

RedevelopmentofkeyCouncilsitestodeliverStrategicPlanobjectives.

Additionalinfrastructuretosupporteventsmayincludeadditionalfixedbuildings(suchaspublictoilets)whichwillincreaseongoingmaintenanceandoperationalcosts.

Upgradeinfrastructuretosupportevents.

Adelaide City Retail Strategy 2015 - 20

ThirteenCouncilbuildingsprovideretailaccommodation.

MajorrefurbishmentofCentralMarketArcadeandupgradetoothercommercialbuildingstoalignwiththeguidingprinciplesoftheretailstrategy.

Improveservices(suchasfreeWIFI)andprovidingflexibleretailspacesmayincreasemaintenanceandoperationalcostsinCouncilownedretailbuildings.

Park Lands Management Strategy

Consultationundertaken.

FeedbackhasidentifiedmorepublictoiletsforParkLandsarerequired.

Changeinoperatingandmaintenancecostsandfuturereplacementcosts.


Table 4.3: Demand Drivers, Projections, and Impact on Services continued

Demand drivers Present position Projection Impact on services

Communitydemandforsportandrecreationalbuildings

Sports Infrastructure Master Plan for West and South Park Landsidentifies41buildingswithinParks.

17,18,19,20,21,23,24,25,and30areprimarilyforsporting/recreationalclubuse.

IncreaseddemandforsportingfacilitieswithinParkLandsRenewalofmajorbuildingswithinWestandSouthParkLands.

UnderMaster Plan for West and South Park Lands–efficienciesareexpectedthroughprovisionoffacilitiesthataremulti-functionalandshared.

Adelaide Park Lands Visitor Research Study 2014notes20%ofthe8.9millionvisitstotheParkLandseachyeararefororganisedsportsandschooluse,primarilyintheSouthernandWesternParkLands.Thehighestvisitation(21%)isforinformaluses,

Amalgamationofsites.Significantupgradeofbuildingswithhigheroverallutilisation.

DemandinotherpartsoftheParkLandsmayrequireredevelopmentofexistingfacilities.

IncreaseddemandforfacilitieswithinbalanceofParkLandstomeetcommunitydemand.

Public Toilet Operating Guidelines / Good Evening Adelaide

Currently41PublicToiletsitesacrossthecity.Targettoencourageeveningactivationinthecityincludingsmallerentertainmentvenues/popupbusinesses/events.

Additionaltoiletfacilitiestomeetspatialdistributionproposedinguideline.Additionalinfrastructuremayberequiredtosupportpopups/smallervenues.

Additionaloperatingandmaintenancecostsandfuturereplacementcosts.

Workforce Strategy CurrentlyworkforceaccommodatedacrossTownHall,administrationcentre,depot,nursery,libraries,communityandrecreationalfacilities,andpublicrealmsheds.

Potentialchangeintypeofaccommodationtomeetneedsofadministrationandoperationalstafftosupportthedeliveryofservicestothecommunityinthefuture.

Accommodationprovidedcanassistwithsupportingthedeliveryofservicestothecommunity–anychangesmustidentifytheassociatedimpactonservicedelivery.


4.4 Demand Management Plan

Demandfornewserviceswillbemanagedthroughacombinationofmanagingexistingassets,upgradingofexistingassets,andprovidingnewassetstomeetdemandanddemandmanagement.Demandmanagementpracticesincludenon-assetsolutions,insuringagainstrisks,andmanagingfailures.

Non-assetsolutionsfocusonprovidingtherequiredservicewithouttheneedfortheorganisationtoowntheassetsandmanagementactionsincludingreducingdemandfortheservice,reducingthelevelofservice(allowingsomeassetstodeterioratebeyondcurrentservicelevels)oreducatingcustomerstoacceptappropriateassetfailures5.Examplesofnon-assetsolutionsincludeprovidingservicesfromexistinginfrastructuresuchasAquaticCentresandlibrariesthatmaybeinanothercommunityareaorpublictoiletsprovidedincommercialpremises.

OpportunitiesidentifiedtodatefordemandmanagementareshowninTable4.4.FurtheropportunitieswillbedevelopedinfuturerevisionsofthisAMPlan.

Table 4.4: Demand Management Plan Summary

Demand driver Impact on services Demand Management Plan

Additionalsporting,events,andrecreationalfacilitieswithintheParkLands.

Increasedoperational,maintenance,andrenewalcosts.

Park Lands Management Strategy.

Sports Infrastructure Master Plan for West and South Park Landsidentifiedpartneringwithsportingorganisationsorotherlesseestoco-fund/fullyfundnewassets.

Victoria Park Master Plan.

Park Lands Event Plan.

MasterplanstobedevelopedforotherrecreationalareaswithinParkLands.

Additionalpublictoilets. Increasedoperational,maintenance,andrenewalcosts.

PrioritisedImplementation/ActionPlan(tobefinalised).

Disability Discrimination Act. Improveaccessibilitytobuildings.

DisabilityDiscriminationActManagementPlantobedevelopedtoprioritiserectificationofidentifieddeficienciesthroughplannedscheduleofworkormanagementstrategies.

The City of Adelaide Strategic Plan 2016 - 20–redevelopmentofkeyCouncilsitestodeliverStrategicPlanobjectives.

Increasedoperational,maintenance,andrenewalcosts.

Feasibilityassessmentoffuturepropertydevelopmentprojectswillbeusedtoinformdecisionmakingandprioritisation.

5.IPWEA,2011,IIMM,Table3.4.1,p3|58.


4.5 Asset Programs to meet Demand

Thenewassetsrequiredtomeetgrowthmaybeacquiredfreeofcostfromlanddevelopmentsorconstructed/acquiredbytheorganisation.Newassetsconstructed/acquiredbytheorganisationarediscussedinSection5.5.ThecumulativevalueofnewcontributedandconstructedassetvaluesaresummarisedinFigure1.

Figure 1: Upgrade and New Assets to meet Demand

$0

$3,000

$6,000

$9,000

$12,000

$15,000

2034

2033

2032

2031

2030

2029

2028

2027

2026

2025

2024

2023

2022

2021

2020

2019

2018

2017

2016

2015

Ass

et v

alue

($’0

00)

ConstructedContributed

Year


Someofthenewassetsidentifiedtomeetgrowthinclude:

Year Projected capital upgrade and new projects Estimate

2016 Newpublictoilets $250,000

2017 ProvisionofChangingPlacesfacility $1,400,000

2017 ProvisionfordeliveryofPark Land Building Strategy/newpublictoilets $750,000








Fundingforthesenewassetswillbesubjecttotheannualbusinessplanandbudgetprocess.

Acquiringthesenewassetswillcommittheorganisationtofundongoingoperations,maintenance,andrenewalcostsfortheperiodthattheserviceprovidedfromtheassetsisrequired.Thesefuturecostsareidentifiedandconsideredindevelopingforecastsoffutureoperations,maintenance,andrenewalcostsinSection5.


TheLifecycleManagementPlandetailshowtheorganisationplanstomanageandoperatetheassetsattheagreedlevelsofservice(definedinSection3)whileoptimisinglifecyclecosts.

5.1 Background Data

5.1.1 Physical parameters

TheassetscoveredbythisAMPlanareshowninTable2.1.

Thebuildingportfolioincludescorporate,commercial,community,andinfrastructureassets,rangingfromStateHeritagelistedbuildingssuchastheTownHalltosmallstructuresaccommodatinginfrastructureequipment.ThemajorityofbuildingsareclassifiedascommunityandmostlocatedwithintheAdelaideParkLands.ThelegislativerequirementofbuildingslocatedwithintheAdelaideParkLandsprovidesadditionalcomplexitiesforthemanagementofthesesitesincludingrequirementsincludedincommunitylandmanagementplansandotherParkLandstrategies.

TheageprofileoftheassetsincludedinthisAMPlanisshowninFigure2.

Figure 2: Asset Age Profile

5. LIFECYCLE MANAGEMENT PLAN

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

Gra

nd t

otal

2010

- 1

4

2005

- 1

0

2000

- 0

5

1995

- 0

0

1990

- 9

5

1985

- 9

0

1980

- 8

5

1975

- 8

0

1970

- 7

5

1965

- 7

0

1955

- 6

0

1950

- 5

5

1945

- 5

0

1940

- 4

5

1935

- 4

0

1930

- 3

5

1925

- 3

0

1920

- 2

5

1915

- 2

0

1910

- 1

5

CR

C ($

’000

)

Year acquired

Theageprofilehasbeendeterminedbytakingtheestimatedremaininglifeofbuildingcomponents(includingmechanicalandelectricalcomponents,waterservices,fireservices,security,lifts,gasservices,interiorfinishes,andequipment)fromtheconditioncapturedduringaudits.Theusefullifeforbuildingassetsvarieswidelybasedonthetypeofbuilding,rangingfrom25-30yearsforahorticulturalshedto50-75yearsforamoresubstantialbuilding.Whereas,conservationworkstohistoricbuildings,suchastheTownHallwhichwasconstructedin1863,hasextendedthebaselifeforthisassetbeyondtheexpectedmaximumlife.


5.1.2 Asset capacity and performance

Council’sservicesaregenerallyprovidedtomeetlegislativeordesignstandardswheretheseareavailable.

LocationswheredeficienciesinserviceperformanceareknownaredetailedinTable5.1.2.

Table 5.1.2: Known Service Performance Deficiencies

Location Service deficiency

Publicrealmsheds Noregularlyscheduledguttercleaning.

Noregularlyscheduledairconditioningservices.

Noprogrammedpaintingschedule.

Publictoilets Undersupplywithinsomeareasacrossthecity.

Noregularlyscheduledguttercleaning.

Noprogrammedpaintingschedule.

Deficienciesinserviceperformancewillbereviewedandidentifiedbasedoncommunitydemandandasbuildingscontinuetobeassessedagainstexistingandfuturestrategiesandoperatingguidelines.

Technicalserviceperformancedeficiencieswillbefurtheridentifiedfollowinganalysisandreviewofthebuildingconditionauditdataundertakenin2014andoutcomeofadditionalstructuralconditionaudits.

5.1.3 Asset condition

Conditionismonitoredthroughanauditconductedeverythreetofiveyearstodeterminetheinfrastructureassetsofeachbuildingcomponenttomonitordeteriorationoftheassetstock.Conditionisalsoreviewedpriortoanupcomingrenewal.

Theconditionauditundertakenin2014capturedthemajorityofbuildingcomponents(internalandexternalfinishes,lifts,mechanicalandelectricalcomponents,fireservices,andstructuralcomposition)butdidnotincludeacomprehensivereviewofthemechanicalandelectricalcomponentsofthebuildingnorthestructuralintegrity.Datafromanearlierinvestigationintothesecomponentsforthelargerownedbuildingswasincorporatedintothedatapriortothefinalconditiongradebeingidentifiedforthosesites.Theconditionauditwasalsodeficientinitsassessmentofthemajorstructuralcomponentsofthebuildings,andthisfurtherassessmentwillbeundertakenaspartoftheimprovementprogramandtheconditiongradeswillbeadjustedtoreflecttheoutcomeoftheseinvestigations.

TheconditionprofileofourassetsisshowninFigure3.

Table 5.1.3: Simple Condition Grading Model

Condition grading Description of condition

1 Very Good:onlyplannedmaintenancerequired.

2 Good:minormaintenancerequiredplusplannedmaintenance.

3 Fair:significantmaintenancerequired.

4 Poor:significantrenewal/rehabilitationrequired.

5 Very Poor:physicallyunsoundand/orbeyondrehabilitation.


Figure 3: Asset Condition Profile

Theconditionratingintheabovetable(Figure3)isthereplacementvalueforassessedcomponents(partsofbuildings)whereastheassetvaluationsnotedin5.1.4belowarebasedonthefullpropertyvaluation.

Conditionismeasuredusingaonetofivegradingsystem6asdetailedinTable5.1.3.

Theassetconditionprofileshowninthetableaboveshowsthevalueofbuildingcomponentsthatareratedbetweenoneandfive,ratherthanawholeofbuildingrating.AspartoftheimprovementprogramfortheAMPlan,buildingswillberatedoverall,ratherthanatcomponentlevel,tomoreeasilyidentifywhichbuildingsareoverallinverypoorcondition.

$0

$10,000

$20,000

$30,000

$40,000

$50,000

543210

Valu

e ($

’000

)

Rating

6.IPWEA,2011,IIMM,Sec2.5.4,p2|79.


5.1.4 Asset valuations

Thevalueofassetsrecordedintheassetregisterasat1July2014coveredbythisAMPlanisshownbelow.Assetswerelastrevaluedat1July2012andasmallnumberofpropertieswererevaluedasat1July2013.AssetsarevaluedatMarketValuetosatisfyFairValue.

Current replacement cost $425,232,540

Depreciable amount $425,232,540

Depreciated replacement cost7 $243,754,000

Annual depreciation expense $9,270,000

Current Replacement

CostAccumulated Depreciation

Annual Depreciation

Expense

Depreciable Amount

Residual

Value

Depreciated Replacement

Cost

End of reporting period 1

End of reporting period 2

Useful Life

UsefulliveswerereviewedinJuly2014usingbuildingconditiondata.

Keyassumptionsmadeinpreparingthevaluationswere:

• Asbestoscontainedwithinbuildingswasstableandnotdelaminating;

• Buildingswouldcontinuetobeoccupiedonthesamebasisinthefuture;

• PropertieswerenotsubjecttoanyNativeTitleclaim;and

• Buildingswereassumedtobestructurallysoundandfitforpurpose.

Majorchangesfrompreviousvaluationsareduetochangeswiththecompositionofthebuildingportfolio(followingdisposalsorrenewals)andpreviousvaluationswereundertakenatabuildinglevel,whilstthecurrentvaluationswereundertakenatacomponentlevel.

Variousratiosofassetconsumptionandexpenditurehavebeenpreparedtohelpguideandgaugeassetmanagementperformanceandtrendsovertime.Theseratiosarebasedonthe2012propertyvaluationand2014capitalrenewalexpenditure.

Rate of annual asset consumption 2.2% (Depreciation / depreciable amount)

Rate of annual asset renewal 1.8% (Capital renewal expenditure / depreciable amount)

Rate of annual asset upgrade / new 0% (capital upgrade expenditure / depreciable amount)

Rate of annual asset upgrade / new 0% (including contributed assets)

Theseratiosindicatethatassetsarebeingconsumed(2.2%)atagreaterratethancurrentlyplannedforrenewal(1.88%),althoughnottoanoverlysignificantlevel.ThesefigureswillbemonitoredandreassessedthroughoutthelifeofthisAMPlan.

In2015theorganisationplanstorenewassetsat80.7%oftheratetheyarebeingconsumedandwillbeincreasingitsassetstockby0.1%intheyear.

7.AlsoreportedasWrittenDownCurrentReplacementCost(WDCRC).


5.1.5 Historical data

HistoricaldataisincludedintheBuildings Asset Management Plan 2008.

5.2 Infrastructure Risk Management Plan

Anassessmentofrisks8associatedwithservicedeliveryfrominfrastructureassetsidentifiedcriticalrisksthatcouldresultinlossorreductioninservicefrombuildingassetsora‘financialshock’totheorganisation.Theriskassessmentprocessidentifiescrediblerisks,thelikelihoodoftheriskeventoccurring,theconsequencesshouldtheeventoccur,developsariskrating,evaluatestherisk,anddevelopsaRiskTreatmentPlanfornon-acceptablerisks.TheriskregisterisshownatAppendixE.

Criticalrisks,beingthoseassessedas‘VeryHigh’–requiringimmediatecorrectiveactionand‘High’–requiringprioritisedcorrectiveactionidentifiedintheInfrastructure Risk Management Plan,togetherwiththeestimatedresidualriskaftertheselectedTreatmentPlanisoperationalaresummarisedinTable5.2.TheserisksarereportedtomanagementandCouncil.

Table 5.2: Critical Risks and Treatment Plans

Service or asset at risk

What can happen Risk rating (VH, H)

Risk Treatment Plan Residual risk*

Treatment costs

Building Totalloss High MaintaininsurancesandBusiness Continuity Plan.Preventativemaintenancecontracts(suchasfire).

Low $765,000perannum

Buildings Personalinjury High Conditionofbuildingstoberegularlyauditedandnecessaryworksidentifiedandactioned.

Medium $65,000perannum

Buildings Hazardousmaterials High Ensurecorrectidentification,storage,andtreatmentofhazardousmaterials.Traininganduseofstandardworkpracticestominimisedisturbance.Plannedremovalprogram.

Low Variable

Buildings Structuralfailure High Undertakestructuralaudits.Regularinspection.

Low $200,000

Buildings Legislativenon-compliance

High Inspectionandmaintenancecontractsforfireandsafetyprovisionsandotherlegislativecompliance.

Low $950,000perannum

NocriticalriskswereidentifiedfromtheriskassessmentundertakenonthebuildingassetsinusingtheexistingRiskTreatmentPlan.

*TheresidualriskistheriskremainingaftertheselectedRiskTreatmentPlanisoperational.

8.Adelaide City Council Enterprise Risk Management Framework


5.3 Routine Operations and Maintenance Plan

Operationsincluderegularactivitiestoprovideservicessuchaspublichealth,safety,andamenity,e.g.cleaning,energyconsumption.

Routinemaintenanceistheregularon-goingworkthatisnecessarytokeepassetsoperating,includinginstanceswhereportionsoftheassetfailandneedimmediaterepairtomaketheassetoperationalagain.

5.3.1 Operations and maintenance plan

Operationsactivitiesaffectservicelevelsincludingqualityandfunctionthroughcleaningfrequency,intensityandspacingoflights,andopeninghoursofbuildingandotherfacilities.

Maintenanceincludesallactionsnecessaryforretaininganassetasnearaspracticabletoanappropriateserviceconditionincludingregularongoingday-to-dayworknecessarytokeepassetsoperating,e.g.servicingofequipmentexcludingrehabilitationorrenewal.Maintenancemaybeclassifiedintoreactive,planned,andspecificmaintenanceworkactivities.

Reactivemaintenanceisunplannedrepairworkcarriedoutinresponsetoservicerequestsandmanagement/supervisorydirections.

PlannedmaintenanceisrepairworkthatisidentifiedandmanagedthroughaMaintenanceManagementSystem(MMS).MMSactivitiesincludeinspection,assessingtheconditionagainstfailure/breakdownexperience,prioritising,scheduling,actioningthework,andreportingwhatwasdonetodevelopamaintenancehistoryandimprovemaintenanceandservicedeliveryperformance.

Specificmaintenanceisreplacementofhighervaluecomponents/sub-componentsofassetsthatisundertakenonaregularcyclesuchasrepaintingorreplacingairconditioningunits.Thisworkfallsbelowthecapital/maintenancethresholdbutmayrequireaspecificbudgetallocation.

ActualpastmaintenanceexpenditureisshowninTable5.3.1.

Table 5.3.1: Maintenance Expenditure Trends

Year Maintenance expenditure

Planned and specific Unplanned

2011-12 $757,277 $1,732,105

2012-13 $912,013 $1,165,324

2013-14 $703,278 $1,029,921

Maintenanceexpenditurevariesfromyeartoyear,particularlywithintheunplannedcategory.Furtherinvestigationoncausesofthevariationandplanstoestablishmoreproactivemaintenanceschedulesisincludedaspartoftheimprovementprogramforthisplan.Variationsmayalsoariseduetoalterationstoleasingarrangementswiththirdpartieswhereresponsibilitiesvaryforundertakingmaintenancemaychange.Areviewofthehistoricexpenditureidentifiedsomemaintenanceexpenditurehadbeenincludedincapitalrenewal.Asubsequentincreaseinthemaintenancebudgetcanbeseenfrom2016,withthecorrespondingreductioninthecapitalrenewalforecast.

Plannedmaintenanceworkiscurrently41%oftotalmaintenanceexpenditure.

Maintenanceexpenditurelevelsareconsideredtobeadequatetomeetcurrentservicelevels,butmaybelessthanorequaltodesiredoroptimalservicelevels.

Wheremaintenanceexpenditurelevelswillresultinalesserlevelofservice,theserviceconsequencesandserviceriskshavebeenidentifiedandserviceconsequenceshighlightedinthisAMPlanandservicerisksconsideredintheInfrastructure Risk Management Plan.

ReactivemaintenanceiscarriedoutinaccordancewithresponselevelsofservicedetailedinAppendixA.


5.3.2 Operations and maintenance strategies

Theorganisationwilloperateandmaintainassetstoprovidethedefinedlevelofservicetoapprovedbudgetsinthemostcost-efficientmanner.Theoperationandmaintenanceactivitiesinclude:

• Schedulingoperationsactivitiestodeliverthedefinedlevelofserviceinthemostefficientmanner;

• Undertakingmaintenanceactivitiesthroughaplannedmaintenancesystemtoreducemaintenancecostsandimprovemaintenanceoutcomes.Undertakecost-benefitanalysistodeterminethemostcost-effectivesplitbetweenplannedandunplannedmaintenanceactivities(50–70%planneddesirableasmeasuredbycost);

• MaintainacurrentInfrastructureRiskRegisterforassetsandpresentservicerisksassociatedwithprovidingservicesfrominfrastructureassetsandreporting‘VeryHigh’and‘High’risksandresidualrisksaftertreatmenttomanagementandCouncil;

• Reviewcurrentandrequiredskillsbaseandimplementworkforcetraininganddevelopmenttomeetrequiredoperationsandmaintenanceneeds;

• Reviewassetutilisationtoidentifyunder-utilisedassetsandappropriateremedies,andover-utilisedassetsandcustomerdemandmanagementoptions;

• Maintainacurrenthierarchyofcriticalassetsandrequiredoperationsandmaintenanceactivities;

• Developandregularlyreviewappropriateemergencyresponsecapability;and

• Reviewmanagementofoperationsandmaintenanceactivitiestoensuretheorganisationisobtainingbestvalueforresourcesused.

Asset hierarchy

Anassethierarchyprovidesaframeworkforstructuringdatainaninformationsystemtoassistincollectionofdata,reportinginformation,andmakingdecisions.ThissystemiscurrentlybeingrefinedanddevelopedaspartoftheoverallAssetManagementsystem.

Thecurrentorganisation’sservicehierarchyisshowninTable5.3.2.

Table 5.3.2: Asset Service Hierarchy

Service hierarchy Service level objective

AdelaideTownHallCivicArea StandingOrder27.30isforthedefinedcivicareastobelaidout,decorated,andfurnishedinaccordancewithresolutionsofCouncilmadefromtimetotimeandtobemaintained,repaired,andprotectedfromdamageatalltimes.

General Tobemaintained,renewed,andupgradedbasedonsafetyandriskconsiderations.Potentialdisposal,obsolescence,legalorcontractual(suchaslease)obligationsareoverridingconstraintsforalltreatments,classifications,andhierarchies.


Critical assets

Criticalassetsarethoseassetswhichhaveahighconsequenceoffailurebutnotnecessarilyahighlikelihoodoffailure.Byidentifyingcriticalassetsandcriticalfailuremodes,organisationscantargetandrefineinvestigativeactivities,maintenanceplans,andcapitalexpenditureplansattheappropriatetime.

Operationsandmaintenancesactivitiesmaybetargetedtomitigatecriticalassetsfailureandmaintainservicelevels.Theseactivitiesmayincludeincreasedinspectionfrequencyorhighermaintenanceinterventionlevels.CriticalassetsfailuremodesandrequiredoperationsandmaintenanceactivitiesaredetailedinTable5.3.2.1.

Table 5.3.2.1: Critical Assets and Service Level Objectives

Critical assets Critical failure mode Operations and maintenance activities

Firesafetyequipment Failureresultsinbuildingnotbeingsafeforoccupation.

MaintenanceandrepairsinaccordancewithAustralianStandardsandEssentialSafetyProvisions.

Electricalinfrastructure Failureresultsinbuildingnotbeingsafeforoccupation.


Airconditioningandhydraulics

Failureresultsinbuildingnotbeingsafeforoccupation.


Lifts Failureresultsinbuildingnotbeingsafeforoccupation.


Standards and specifications

MaintenanceworkiscarriedoutinaccordancewiththefollowingStandardsandSpecifications:

• Minister’s Specification SA 76;

• AustralianStandards(astheyrelatetobuildingconstructionoroccupation);

• National Construction Code;and

• CouncildevelopedStandardsandSpecifications.


5.3.3 Summary of future operations and maintenance expenditures

FutureoperationsandmaintenanceexpenditureisforecasttotrendinlinewiththevalueoftheassetstockasshowninFigure4.Notethatallcostsareshownincurrent2014dollarvalues(i.e.realvalues).From2016,plannedmaintenanceexpenditure,whichwaspreviouslyincludedincapitalrenewal,hasbeenallocatedtothemaintenancebudget.

Figure 4: Projected Operations and Maintenance Expenditure

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00) p

er y

ear

Maintenance Operations

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Budget

Deferredmaintenance,i.e.worksthatareidentifiedformaintenanceandunabletobefundedaretobeincludedintheriskassessmentandanalysisintheInfrastructure Risk Management Plan.

Maintenanceisfundedfromtheoperatingbudgetwhereavailable.ThisisfurtherdiscussedinSection6.2.


5.4 Renewal / Replacement Plan

Renewalandreplacementexpenditureismajorworkwhichdoesnotincreasetheasset’sdesigncapacitybutrestores,rehabilitates,replacesorrenewsanexistingassettoitsoriginalorlesserrequiredservicepotential.Workoverandaboverestoringanassettooriginalservicepotentialisupgrade/expansionornewworksexpenditure.

5.4.1 Renewal plan

Assetsrequiringrenewal/replacementareidentifiedfromoneofthreemethodsprovidedinthe‘ExpenditureTemplate’:

• Method1usesassetregisterdatatoprojecttherenewalcostsusingacquisitionyearandusefullifetodeterminetherenewalyear;or

• Method2usescapitalrenewalexpenditureprojectionsfromexternalconditionmodellingsystems(suchasPavementManagementSystems);or

• Method3usesacombinationofaveragenetworkrenewalsplusdefectrepairsintheRenewalPlanandDefectRepairPlanWorksheetsonthe‘ExpenditureTemplate’.

Method1wasusedforthisAMPlan.

TheusefullivesofassetsusedtodevelopprojectedassetrenewalexpendituresareshowninTable5.4.1.Assetusefulliveswerelastreviewedon2014aspartoftheconditionaudit.

Table 5.4.1: Useful Lives of Assets

Asset subcategory Useful life

Structure 30,40,50,60or80+yearsdependingonbuildingtype.

Roofing 30or40yearsdependingontypeofroof.

Buildingservices 30,40or50yearsdependingontypeofequipment.

Fitout 15or30yearsdependingonindividualcomponent.

5.4.2 Renewal and replacement strategies

Theorganisationwillplancapitalrenewalandreplacementprojectstomeetlevelofserviceobjectivesandminimiseinfrastructureservicerisksby:

• EnsuringthatCouncil’sservicesandinfrastructureareprovidedinasustainablemanner,withtheappropriatelevelsofservicetoresidentsandvisitorsandhavingregardtotheenvironmentaloutcomes;

• Demonstratingtransparentandresponsibleassetmanagementprocessesthatalignwithdemonstratedbestpractice;

• Planningandschedulingrenewalprojectstodeliverthedefinedlevelofserviceinthemostefficientmanner;

• Undertakingprojectscopingforallcapitalrenewalandreplacementprojectstoidentify:

– alignmentwithCouncil’sstrategicdirection,

– theservicedelivery‘deficiency’,presentrisk,andoptimumtimeforrenewal/replacement,

– theprojectobjectivestorectifythedeficiency,

– therangeofoptions,estimatedcapital,andlifecyclecostsforeachoptionsthatcouldaddresstheservicedeficiency,

– evaluatetheoptionsagainstevaluationcriteriaadoptedbytheorganisation,

– selectthebestoptiontobeincludedincapitalrenewalprograms;


• Using‘lowcost’renewalmethods(costofrenewalislessthanreplacement)whereverpossible;

• MaintainacurrentInfrastructureRiskRegisterforassetsandservicerisksassociatedwithprovidingservicesfrominfrastructureassetsandreporting‘VeryHigh’and‘High’risksandresidualrisksaftertreatmenttomanagementandtheCouncil;

• Reviewcurrentandrequiredskillsbaseandimplementworkforcetraininganddevelopmenttomeetrequiredconstructionandrenewalneeds;

• Maintainacurrenthierarchyofcriticalassetsandcapitalrenewaltreatmentsandtimingsrequired;and

• Reviewmanagementofcapitalrenewalandreplacementactivitiestoensuretheorganisationisobtainingbestvalueforresourcesused.

Renewal ranking criteria

Assetrenewalandreplacementistypicallyundertakentoeither:

• Ensurethereliabilityoftheexistinginfrastructuretodelivertheserviceitwasconstructedtofacilitate(e.g.maintainelectricalinfrastructure);or

• Toensuretheinfrastructureisofsufficientqualitytomeettheservicerequirements(e.g.airconditioninginfrastructure).

Itispossibletogetsomeindicationofcapitalrenewalandreplacementprioritiesbyidentifyingassetsorassetgroupsthat:

• Haveahighconsequenceoffailure;

• Haveahighutilisationandsubsequentimpactonuserswouldbegreatest;

• Thetotalvaluerepresentsthegreatestnetvaluetotheorganisation;

• Havethehighestaverageagerelativetotheirexpectedlives;

• AreidentifiedintheAMPlanaskeycostfactors;

• Havehighoperationalormaintenancecosts;or

• Wherereplacementwithmodernequivalentassetswouldyieldmaterialsavings9.

TherankingcriteriausedtodeterminepriorityofidentifiedrenewalandreplacementproposalsisdetailedinTable5.4.2.

Table 5.4.2: Renewal and Replacement Priority Ranking Criteria

Criteria Weighting

Notapplicable

TOTAL 100%

AllrenewalsinthisassetClassareprioritisedbasedonsafety,risk,andcondition.Nohierarchyforprioritisingrenewalscurrentlyapplies.

Renewal and replacement standards

RenewalworkiscarriedoutinaccordancewiththefollowingStandardsandSpecifications:

• Minister’s Specification SA 76;

• AustralianStandards;

• Building Code of Australia;and

• CouncildevelopedStandardsandSpecifications.

9.BasedonIPWEA,2011,IIMM,Sec3.4.5,p3|66.


5.4.3 Summary of future renewal and replacement expenditure

Projectedfuturerenewalandreplacementexpendituresareforecasttoincreaseovertime.TheexpenditureissummarisedinFigure5.Notethatallamountsareshowninrealvalues.

TheprojectedcapitalrenewalandreplacementprogramisshowninAppendixB.

Figure 5: Projected Capital Renewal and Replacement Expenditure

Theproportionofunfundedshownin2015representscapitalrenewalidentifiedtobeundertakenin2012-14butweredeferred.

Deferredrenewalandreplacement,i.e.thoseassetsidentifiedforrenewaland/orreplacementandnotscheduledincapitalworksprogramsaretobeincludedintheriskanalysisprocessintheRisk Management Plan.

Renewalsandreplacementexpenditureintheorganisation’scapitalworksprogramwillbeaccommodatedintheLTFP.ThisisfurtherdiscussedinSection6.2.

$0

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ewal

co

st ($

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)

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Maintenance Operations Unfunded


5.5 Creation / Acquisition / Upgrade Plan

Newworksarethoseworksthatcreateanewassetthatdidnotpreviouslyexist,orworkswhichupgradeorimproveanexistingassetbeyonditsexistingcapacity.Theymayresultfromgrowth,socialorenvironmentalneeds.Assetsmayalsobeacquiredatnocosttotheorganisationfromlanddevelopment.TheseassetsfromgrowthareconsideredinSection4.4.Newbuildingassetswillgenerallyrequireanincreaseinoperationalandmaintenanceexpenditureacrosstheusefullifeofthebuilding.Aspartoftheplanningprocessforthecreation/acquisitionorupgradeofassets,opportunitiestoreduceongoingoperationalormaintenancecostsshouldbeconsidered.

5.5.1 Selection criteria

Newassetsandupgrade/expansionofexistingassetsareidentifiedfromvarioussources,suchascouncillororcommunityrequests,proposalsidentifiedbystrategicplans(suchasPlace-making Strategy, City Safety)orpartnershipswithotherorganisations(e.g.StateGovernment,RiversidePrecinctAuthority).Candidateproposalsareinspectedtoverifyneedandtodevelopapreliminaryrenewalestimate.Verifiedproposalsarerankedbypriorityandavailablefunds,andscheduledinfutureworksprograms.

Assetsproposedforacquisition(includingassetsproposedtobegifted)willbeassessedinaccordancewiththeprinciplesoftheAcquisition and Disposal of Land and Infrastructure Assetspolicy,againstthefollowingcriteria:

Criteria

Strategicimportance Strategicrelevance(alignmentwithStrategicPlanorotherkeystrategies–e.g.Park Lands Master Plan).

Benefit/riskanalysis(includingpoliticaldrivers,developmentopportunities/higheruse).

Communitybenefit Needanalysis(isitrequired/isthereanalternateassetthatdeliversbetteroutcomesthanproposedacquisitionor‘gift’).

Currentutilisationand/orlevelofexistingcommunityownershipofasset.

Culturalorhistoricalsignificance(communityimportance).

Cost Annualcostofoperation/maintenance.

Wholeoflifecostanalysis.

Suitabilityofasset(i.e.doesitmeetrequiredservicelevelstandards).

Abilitytocommercialisetheasset(positivefinancialreturn).

Covenantsorlimitationsonownership,useorapplicability(e.g.abilitytoalterordisposeofassetonceacquired/gifted).


Thefollowingdecisionmatrixwillguidetherecommendationfollowingtheassessment:

Strategic importance High community benefit Low cost Recommendation

✔ Reject

✔ Review

✔ Reject

✔ ✔ Acquirewithconditions

✔ ✔ Review

✔ ✔ Acquirewithconditions

✔ ✔ ✔ Acquire

Reject

Whereavailablefundsarenotavailabletomeetallverifiedproposals,apriorityrankingisrecommendedtoenableacquisitionstobeprioritisedagainstthefollowingcriteria:

Criteria Weighting

Safety/risk 40%

Strategicimportance 20%

Communitybenefit 20%

Costbenefit 20%

TOTAL 100%

Table 5.5.1: New Assets Priority Ranking Criteria

Criteria Weighting

Notapplicable

TOTAL 100%


5.5.2 Capital investment strategies

Theorganisationwillplancapitalupgradeandnewprojectstomeetlevelofserviceobjectivesby:

• Planningandschedulingcapitalupgradeandnewprojectstodeliverthedefinedlevelofserviceinthemostefficientmanner;

• Undertakingprojectscopingforallcapitalupgrade/newprojectstoidentify:

– theservicedelivery‘deficiency’,presentriskandrequiredtimelinefordeliveryoftheupgrade/newasset,

– theprojectobjectivestorectifythedeficiencyincludingvaluemanagementformajorprojects,

– therangeofoptions,estimatedcapitalandlifecyclecostsforeachoptionsthatcouldaddresstheservicedeficiency,

– managementofrisksassociatedwithalternativeoptions,

– andevaluatetheoptionsagainstevaluationcriteriaadoptedbyCouncil,

– selectthebestoptiontobeincludedincapitalupgrade/newprograms;

• Reviewcurrentandrequiredskillsbaseandimplementtraininganddevelopmenttomeetrequiredconstructionandprojectmanagementneeds;and

• Reviewmanagementofcapitalprojectmanagementactivitiestoensuretheorganisationisobtainingbestvalueforresourcesused.

Standardsandspecificationsfornewassetsandforupgrade/expansionofexistingassetsarethesameasthoseforrenewalshowninSection5.4.2.

5.5.3 Summary of future upgrade / new assets expenditure

Projectedupgrade/newassetexpendituresaresummarisedinFigure6.Theprojectedupgrade/newcapitalworksprogramisshowninAppendixC.Allamountsareshowninrealvalues.Theseassetswillbesubjecttosecuringfundingthroughtheannualbusinessplanandbudgetprocess.

Someofthenewassetsidentifiedtomeetgrowthinclude:

Year Projected capital upgrade and new projects Estimate

2016 Newpublictoilets $250,000

2017 ProvisionofChangingPlacesfacility $1,400,000









DemandforthesenewassetshasbeenidentifiedwithinCouncilstrategicdocumentsincludingThe City of Adelaide Strategic Plan 2016 – 20andPark Lands Management Strategy.


FundingfornewassetstomeetgrowthisnotcurrentlyrecognisedintheLTFPandfundingfortheseprojectsaresubjecttotheannualbusinessplanandbudgetprocess.

Figure 6: Projected Capital Upgrade / New Asset Expenditure

$0

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00)

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Expenditureonnewassetsandservicesintheorganisation’scapitalworksprogramisnotcurrentlyallocatedintheLTFP.ThisisfurtherdiscussedinSection6.2.


5.6 Disposal Plan

Disposalincludesanyactivityassociatedwithdisposalofadecommissionedassetincludingsale,demolitionorrelocation.AssetsidentifiedforpossibledecommissioninganddisposalareshowninTable5.6,togetherwithestimatedannualsavingsfromnothavingtofundoperationsandmaintenanceoftheassets.Theseassetswillbefurtherreinvestigatedtodeterminetherequiredlevelsofserviceandseewhatoptionsareavailableforalternateservicedelivery,ifany.Anyrevenuegainedfromassetdisposalsisaccommodatedintheorganisation’sLTFP.

Wherecashflowprojectionsfromassetdisposalsarenotavailable,thesewillbedevelopedinfuturerevisionsofthisAMPlan.

Table 5.6: Assets Identified for Disposal

Asset Reason for disposal Timing Disposal expenditure

Operations and maintenance annual

savings

VealeGardensConservatory

Dilapidatedandredundantoncenewsatellitehubisconstructed.

2016-17 $15,000 $2,000

5.7 Service Consequences and Risks

TheorganisationhasprioritiseddecisionsmadeinadoptingthisAMPlantoobtaintheoptimumbenefitsfromitsavailableresources.DecisionsweremadebasedonthedevelopmentofthreeScenarios.

Scenario 1–Whatwewouldliketodobasedonassetregisterdata.

Scenario 2–Whatweshoulddowithexistingbudgetsandidentifyinglevelofserviceandriskconsequences(i.e.whataretheoperationsandmaintenanceandcapitalprojectsweareunabletodo,whatistheserviceandriskconsequencesassociatedwiththisposition).ThismayrequireseveralversionsoftheAMPlan.

Scenario 3–WhatwecandoandbefinanciallysustainablewithAMplansmatchingLTFPs.

ThedevelopmentofScenario1andScenario2AMplansprovidesthetoolsfordiscussionwiththeCouncilandcommunityontrade-offsbetweenwhatwewouldliketodo(Scenario1)andwhatweshouldbedoingwithexistingbudgets(Scenario2)bybalancingchangesinservicesandservicelevelswithaffordabilityandacceptanceoftheserviceandriskconsequencesofthetrade-offposition(Scenario3).

ThisversionoftheAMPlanincorporatesScenarios1and2,andfutureversionswillincludethethirdScenario.

5.7.1 What we cannot do

Projectedoperationalandmaintenanceexpenditureispredictedtoreachcapacityby2022,onthebasisthatnoadditionalexpenditureisrequiredforthebuildings.Theremaybesomeoperationalandmaintenanceactivitiesorcapitalprojectsthatwillbeunabletobeundertakenwithinthenext10yearsshouldthiseventuate.Furtherinvestigationandplanningwillidentifywhetherthisisalikelyoutcome.


5.7.2 Service consequences

Operationsandmaintenanceactivitiesandcapitalprojectsthatcannotbeundertakenwillmaintainorcreateserviceconsequencesforusers.Theseinclude:

• Non-compliancewithlegislativerequirements;

• Enduserdissatisfaction;

• Increasedvacancyratesincommercialbuildings;and

• Communitydissatisfaction.

5.7.3 Risk consequences

Theoperationsandmaintenanceactivitiesandcapitalprojectsthatcannotbeundertakenmaymaintainorcreateriskconsequencesfortheorganisation.Theseinclude:

• Riskofbreachofcontractualarrangementwiththirdparties;

• RiskofbreachofEssentialSafetyProvisions;and

• Furtherdeteriorationorfailureofbuildingstructureorservices.

TheseriskshavebeenincludedwiththeInfrastructure Risk Management PlansummarisedinSection5.2andRisk Management Plan’s actionsandexpendituresincludedwithinprojectedexpenditures.


6. FINANCIAL SUMMARY

ThissectioncontainsthefinancialrequirementsresultingfromalltheinformationpresentedintheprevioussectionsofthisAMPlan.Thefinancialprojectionswillbeimprovedasfurtherinformationbecomesavailableondesiredlevelsofserviceandcurrentandprojectedfutureassetperformance.

6.1 Financial Statements and Projections

ThefinancialprojectionsareshowninFigure7forprojectedoperating(operationsandmaintenance)andcapitalexpenditure(renewalandupgrade/expansion/newassets).Notethatallcostsareshowninrealvalues.From2016identifiedplannedmaintenancehasbeenincludedinmaintenanceratherthancapitalrenewalcategories.

Figure 7: Projected Operating and Capital Expenditure

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Maintenance Operations Disposals


6.1.1 Sustainability of service delivery

Therearefourkeyindicatorsforservicedeliverysustainabilitythathavebeenconsideredintheanalysisoftheservicesprovidedbythisassetcategory,thesebeingtheAssetRenewalFundingRatio,longtermlifecyclecosts/expenditures,andmediumtermprojected/budgetedexpendituresoverfiveand10yearsoftheplanningperiod.

Asset Renewal Funding Ratio

AssetRenewalFundingRatio10 104%

TheAssetRenewalFundingRatioisthemostimportantindicatorandrevealsthatoverthenext10years,theorganisationisforecastingthatitwillhave104%ofthefundsrequiredfortheoptimalrenewalandreplacementofitsassets.

ThisratioiswithinCouncil’scurrentfinancialsustainabilitytargetof90%-110%.

Long term - lifecycle cost

Lifecyclecosts(orwholeoflifecosts)aretheaveragecoststhatarerequiredtosustaintheservicelevelsovertheassetlifecycle.Lifecyclecostsincludeoperationsandmaintenanceexpenditureandassetconsumption(depreciationexpense).ThelifecyclecostfortheservicescoveredinthisAMPlanis$17,967,000peryear(averageoperationsandmaintenanceexpenditureplusdepreciationexpenseprojectedover10years).

Lifecyclecostscanbecomparedtolifecycleexpendituretogiveaninitialindicatorofaffordabilityofprojectedservicelevelswhenconsideredwithageprofiles.Lifecycleexpenditureincludesoperations,maintenance,andcapitalrenewalexpenditure.Lifecycleexpenditurewillvarydependingonthetimingofassetrenewals.Thelifecycleexpenditureoverthe10-yearplanningperiodis$13,274,000peryear(averageoperationsandmaintenancepluscapitalrenewalbudgetedexpenditureintheLTFPover10years).

Ashortfallbetweenlifecyclecostandlifecycleexpenditureisknownasthelifecyclegap.Thelifecycle‘gap’forservicescoveredbythisAMPlanis-$4,694,000peryear(-ve=gap).Thisgapmaybeasaresultofassetexpenditurebeingundertakenbythirdpartyoccupiers(tenants)ofsomeofCouncil’sbuildingassets.

Lifecycleexpenditureiscurrently74%oflifecyclecosts.

Thelifecyclecostsandlifecycleexpenditurecomparisonhighlightsanydifferencebetweenpresentoutlaysandtheaveragecostofprovidingtheserviceoverthelongterm.Ifthelifecycleexpenditureislessthanthelifecyclecost,itismostlikelythatoutlayswillneedtobeincreasedorcutsinservicesmadeinthefuture.

Knowingtheextentandtimingofanyrequiredincreaseinoutlays,andtheserviceconsequencesiffundingisnotavailable,willassistorganisationsinprovidingservicestotheircommunitiesinafinanciallysustainablemanner.ThisisthepurposeoftheassetmanagementplansandLTFP.

Medium term – 10-year financial planning period

ThisAMPlanidentifiestheprojectedoperations,maintenance,andcapitalrenewalexpendituresrequiredtoprovideanagreedlevelofservicetothecommunityovera10-yearperiod.Thisprovidesinputinto10-yearfinancialandfundingplansaimedatprovidingtherequiredservicesinasustainablemanner.

Theseprojectedexpendituresmaybecomparedtobudgetedexpendituresinthe10-yearperiodtoidentifyanyfundingshortfall.InacoreAMPlan,agapisgenerallyduetoincreasingassetrenewalsforageingassets.

Theprojectedoperations,maintenance,andcapitalrenewalexpenditurerequiredoverthe10-yearplanningperiodis$13,169,000onaverageperyear.

Estimated(budget)operations,maintenance,andcapitalrenewalfundingis$13,169,000onaverageperyear,givinga10-yearfundingshortfallof$105,000peryear.Thisindicatesthattheorganisationexpectstohave105%oftheprojectedexpendituresneededtoprovidetheservicesdocumentedintheAMPlan.Asmoredetaileddataiscollectedontheconditionofthebuildingassets,thegapinfundingandprojectedexpendituremaynarrow.

10.AIFMG,2009,Financial Sustainability Indicator 8,Sec2.6,p2.18


Medium term – 5-year financial planning period

Theprojectedoperations,maintenance,andcapitalrenewalexpenditurerequiredoverthefirstfiveyearsoftheplanningperiodis$12,652,000onaverageperyear.

Estimated(budget)operations,maintenance,andcapitalrenewalfundingis$13,361,000onaverageperyeargivingafive-yearfundingshortfallof$210,000.Thisindicatesthattheorganisationexpectstohave102%ofprojectedexpendituresrequiredtoprovidetheservicesshowninthisAMPlan.Asmoredetaileddataiscollectedontheconditionofthebuildingassets,thegapinfundingandprojectedexpendituremaynarrow.

Asset management financial indicators

Figure7Ashowstheassetmanagementfinancialindicatorsoverthe10-yearplanningperiodandforthelongtermlifecycle.

Figure 7A: Asset Management Financial Indicators

0%

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planned outlays)

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Comparison of LTFPoutlays as a % of projected requirements

Providingservicesfrominfrastructureinasustainablemannerrequiresthematchingandmanagingofservicelevels,risks,projectedexpenditures,andfinancingtoachieveafinancialindicatorofapproximately1.0forthefirstyearsoftheAMPlan,andideallyoverthe10-yearlifeoftheLTFP.

Figure8showstheprojectedassetrenewalandreplacementexpenditureoverthe20yearsoftheAMPlan.Theprojectedassetrenewalandreplacementexpenditureiscomparedtorenewalandreplacementexpenditureinthecapitalworksprogram,whichisaccommodatedintheLTFP.

FundingrequirementswillbereviewedannuallyandchangesmadetotheLTFPwhereappropriatetoreflectdeliveryagainstagreedlevelsofservice.


Figure 8: Projected and LTFP Budgeted Renewal Expenditure

Table6.1.1showstheprojectedrenewalandreplacementexpendituresandexpenditurecurrentlyintheLTFP.BudgetexpendituresaccommodatedintheLTFPorextrapolatedfromcurrentbudgetsareshowninAppendixD.

Inyearswhereprojectedrenewals(darkpurple)areaboveexpenditure(currentbudget),buildingcomponentswillbereviewedandprioritisedbasedonriskandsafetyfactors.Thiswillenablenoncriticalrenewalstobedeferredtoafuturefinancialyear.

Thegapsshownbetweenprojectedrenewals(darkpurple)andexpenditure(currentbudget)representsthecurrentbudgetforrenewalsandmaybeadjustedinfutureyearstomorecloselyalignwiththeplannedrenewals.Thesurplusin2019isaresultofasignificantcapitalrenewalitemthathasbeenreallocatedtoafutureyearpendinganalysisofthefuturestrategicdirectionoftheasset.

ThereisasignificantcumulativesurplusinthelateryearsofTable6.1.1.ThisisaresultoflowerprojectedrenewalsinlateryearscomparedtotheLTFPrenewalbudgetusedfrom2025beingtheaverageofthefirst10yearsofthisplan.

$0

$1,000

$2,000

$,3000

$4,000

$5,000

$6,000

$7,000

$8,000

2034

2033

2032

2031

2030

2029

2028

2027

2026

2025

2024

2023

2022

2021

2020

2019

2018

2017

2016

2015

($’0

00)

Projected renewals Planned renewals

Year

Expenditure year 1


Table 6.1.1: Projected and LTFP Budgeted Renewals and Financing Shortfall

Year Projected renewals ($,000)

LTFP renewal budget ($,000)

Renewal financing shortfall ($,000) (-ve gap, +ve surplus)

Cumulative shortfall ($,000) (-ve gap, +ve surplus)

2015 $7,642 $7,483 -$159 -$159

2016 $3,106 $3,100 -$6 -$164

2017 $6,159 $6,100 -$59 -$223

2018 $3,175 $3,100 -$75 -$297

2019 $4,590 $6,100 $1,510 $1,213

2020 $3,570 $3,600 $30 $1,242

2021 $6,905 $7,000 $95 $1,337

2022 $4,200 $4,200 $0 $1,337

2023 $3,228 $3,400 $172 $1,508

2024 $2,141 $2,400 $259 $1,767

2025 $3,358 $4,648 $1,290 $3,058

2026 $2,057 $4,648 $2,591 $5,649

2027 $2,501 $4,648 $2,147 $7,796

2028 $5,524 $4,648 -$876 $6,920

2029 $2,562 $4,648 $2,086 $9,006

2030 $7,454 $4,648 -$2,805 $6,201

2031 $2,979 $4,648 $1,669 $7,870

2032 $3,333 $4,648 $1,315 $9,185

2033 $2,337 $4,648 $2,311 $11,497

2034 $1,643 $4,648 $3,005 $14,502

Note:Anegativeshortfallindicatesafinancinggap;apositiveshortfallindicatesasurplusforthatyear.

ProvidingservicesinasustainablemannerwillrequirematchingofprojectedassetrenewalandreplacementexpendituretomeetagreedservicelevelswiththecorrespondingcapitalworksprogramaccommodatedintheLTFP.

Identifyingagreedlevelsofservicehasstilltobefinalisedandthismayaltertheprojectedrenewalandreplacementexpenditure.Asdiscussedearlierinthisplan,thesefiguresmayberevisedastheresultsofthedetailedinvestigationintotheconditionofstructuralelementsoftheBuildingAssetClassarerevealed.


6.1.2 Projected expenditures for LTFP

Table6.1.2showstheprojectedexpendituresforthe10-yearLTFP.Note:From2016,plannedmaintenancehasbeenreallocatedfromProjectedCapitalRenewaltoMaintenance.

Expenditureprojectionsarein2014-15realvalues.

Table 6.1.2: Projected Expenditures for LTFP ($000)

Year Operations ($,000)

Maintenance ($,000)

Projected capital renewal

($,000)

Capital upgrade / new ($,000)

Disposals ($,000)

2015 $4,823 $1,734 $7,642 $0 $0

2016 $4,851 $4,004 $3,106 $750 $0

2017 $4,860 $4,011 $6,159 $2,150 $0

2018 $4,884 $4,030 $3,175 $1,150 $0

2019 $4,897 $4,040 $4,590 $500 $0

2020 $4,903 $4,044 $3,570 $500 $0

2021 $4,909 $4,049 $6,905 $500 $0

2022 $4,914 $4,053 $4,200 $500 $0

2023 $4,920 $4,058 $3,228 $500 $0

2024 $4,926 $4,062 $2,141 $500 $0

2025 $4,929 $3,840 $3,358 $705 $0

2026 $4,937 $3,846 $2,057 $705 $0

2027 $4,945 $3,852 $2,501 $705 $0

2028 $4,953 $3,858 $5,524 $705 $0

2029 $4,961 $3,865 $2,562 $705 $0

2030 $4,969 $3,871 $7,454 $705 $0

2031 $4,977 $3,877 $2,979 $705 $0

2032 $4,985 $3,883 $3,333 $705 $0

2033 $4,993 $3,890 $2,337 $705 $0

2034 $5,001 $3,896 $1,643 $705 $0

6.2 Funding Strategy

Afterreviewingservicelevels,asappropriatetoensureongoingfinancialsustainabilityprojectedexpenditures(excludingnewassets)identifiedinSection6.1.2willbeaccommodatedintheorganisation’s10-yearLTFP.

Note:Thiswillnotincludetheidentifiedfundingforprovisionofnewassetswhichiscurrentlysubjecttotheannualbusinessplanandbudgetprocess.


6.3 Valuation Forecasts

Assetvaluesareforecasttoincreaseasadditionalassetsareaddedtotheassetstockfromconstructionandacquisitionbytheorganisationandfromassetsconstructedbylanddevelopersandothersanddonatedtotheorganisation.Figure9showstheprojectedreplacementcostassetvaluesovertheplanningperiodinrealvalues.

Figure 9: Projected Asset Values

$0

$100,000

$200,000

$300,000

$400,000

$500,000

2034

2033

2032

2031

2030

2029

2028

2027

2026

2025

2024

2023

2022

2021

2020

2019

2018

2017

2016

2015

CR

C ($

’000

)

Year

DepreciationexpensevaluesareforecastinlinewithassetvaluesasshowninFigure10.

Figure 10: Projected Depreciation Expense

$0

$2,000

$4,000

$6,000

$8,000

$10,000

2034

2033

2032

2031

2030

2029

2028

2027

2026

2025

2024

2023

2022

2021

2020

2019

2018

2017

2016

2015

Ann

ual d

epre

ciat

ion

($’0

00)

Year


Thedepreciatedreplacementcostwillvaryovertheforecastperioddependingontheratesofadditionofnewassets,disposalofoldassets,andconsumptionandrenewalofexistingassets.Forecastoftheassets’depreciatedreplacementcostisshowninFigure11.Thedepreciatedreplacementcostofcontributedandnewassetsisshowninthelighterpurplecolourandinthedarkerpurplecolourforexistingassets.

Figure 11: Projected Depreciated Replacement Cost

$0

$50,000

$100,000

$150,000

$200,000

$250,000

2034

2033

2032

2031

2030

2029

2028

2027

2026

2025

2024

2023

2022

2021

2020

2019

2018

2017

2016

2015

DR

C ($

’000

)

Existing assets New assets

Year


6.4 Key Assumptions Made in Financial Forecasts

ThissectiondetailsthekeyassumptionsmadeinpresentingtheinformationcontainedinthisAMPlanandinpreparingforecastsofrequiredoperatingandcapitalexpenditureandassetvalues,depreciationexpense,andcarryingamountestimates.Itispresentedtoenablereaderstogainanunderstandingofthelevelsofconfidenceinthedatabehindthefinancialforecasts.

KeyassumptionsmadeinthisAMPlanandrisksthatthesemaychangeareshowninTable6.4.

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

Key assumptions Risks of change to assumptions

Ratesadoptedforcomponentsareaccurate. Insufficientbudgettomeetrequiredexpenditure.

Nosignificantchangeindemand. Unabletomeetcommunityexpectationsorenduserrequirements.

Nosignificantchangesinlegislation. Changesmayincreaseoperational/maintenancecosts.

Budgetallocationwillbesufficienttoenabletheagreedservicelevels(bothcommunityandtechnical)tobemet.

Non-complianceofbuildingsduetoessentialmaintenancenotbeingcompleted.

Inabilitytosatisfyneedsofendusers/community.

Inabilitytousebuildingsduetofailureofcomponents(suchasairconditioning,lifts).

Reductioninservicesbeingavailabletocommunity.

6.5 Forecast Reliability and Confidence

TheexpenditureandvaluationsprojectionsinthisAMPlanarebasedonbestavailabledata.Currencyandaccuracyofdataiscriticaltoeffectiveassetandfinancialmanagement.Dataconfidenceisclassifiedonafivelevelscale11inaccordancewithTable6.5.

Table 6.5: Data Confidence Grading System

Confidence grade Description

AHighlyreliable Databasedonsoundrecords,procedures,investigations,andanalysis,documentedproperlyandrecognisedasthebestmethodofassessment.Datasetiscompleteandestimatedtobeaccurate±2%.

BReliable Databasedonsoundrecords,procedures,investigations,andanalysis,documentedproperlybuthasminorshortcomings,forexamplesomeofthedataisold,somedocumentationismissing,and/orrelianceisplacedonunconfirmedreportsorsomeextrapolation.Datasetiscompleteandestimatedtobeaccurate±10%.

CUncertain Databasedonsoundrecords,procedures,investigations,andanalysiswhichisincompleteorunsupported,orextrapolatedfromalimitedsampleforwhichGradeAorBdataareavailable.Datasetissubstantiallycompletebutupto50%isextrapolateddataandaccuracyestimated±25%.

DVeryUncertain Dataisbasedonunconfirmedverbalreportsand/orcursoryinspectionsandanalysis.Datasetmaynotbefullycompleteandmostdataisestimatedorextrapolated.Accuracy±40%.

EUnknown Noneorverylittledataheld.

TheestimatedconfidencelevelforandreliabilityofdatausedinthisAMPlanisshowninTable6.5.1.

11.IPWEA,2011,IIMM,Table2.4.6,p2|59.


Table 6.5.1: Data Confidence Assessment for Data used in Asset Management Plan

Data Confidence assessment

Comment

Demanddrivers Reliable BasedoncurrentCouncilstrategiesincludingThe City of Adelaide Strategic Plan 2016 - 20andAdelaide Park Lands Management Strategy.

Growthprojections Reliable BasedontargetsintheStateGovernment’s30-year Plan for Greater AdelaideandCouncil’sStrategicPlan.

Operationsexpenditures Reliable Directlysourcedfromfinancesystem.

Maintenanceexpenditures Reliable Directlysourcedfromfinancesystem.

Projectedrenewalexpenditures

Assetvalues Reliable Basedon2014conditionaudit.

Assetresidualvalues Notapplicable Noassetresidualvalueshavebeenusedinthisplan.

Assetusefullives Reliable Basedon2014conditionauditandassetvaluation.

Conditionmodelling Uncertain Furtheranalysisandconditionmodellinghasyettobecompleted.

Defectrepairs Reliable Basedon2014conditionaudit.

Upgrade/newexpenditures Uncertain Onlybasedonconceptualdesigndata.

Disposalexpenditures Reliable Basedonknownconditions.

Overalldatasources,thedataconfidenceisassessedasmediumconfidencelevelfordatausedinthepreparationofthisAMPlan.


7.1 Accounting / Financial Systems

7.1.1 Accounting and financial systems

Since2004,CouncilhaveusedtheTechnologyOneFinanceOneSystem.Itisafinancesystemwhereallincomeandexpendituresarerecorded.TheGeneralLedgercapturesallfinancialactivitiesforCouncil,andiscomprisedofthreesubledgers:

• CapitalWorksLedgerforallcapitalbudgets;

• PropertyLedgerforpropertybudgets;and

• PublicRealmLedgerforalldepotworks.

AllthreeledgersareconsolidatedintotheGeneralLedger.

TheCapitalWorksLedgerrecordsallthebudgetsfortherenewalsprogram.Allcostsforrenewalsaretrackedthroughthisledger.ThroughtheXLOnetool,reportscanbegeneratedonanindividualprojectaswellasassetcategorylevel.Thisallowsprojectmanagersandassetmanagerstokeeptrackoftheirprojectspendonaregularbasis.OnceprojectsarecompletedandtheyarethencapitalisedintotheHANSENAssetManagementSystem.

Accountabilities for financial systems

Allfinancialinformationinrelationtoallassetclasses(buildings,land,roads,footpaths,stormwater,bridges,trafficsignals,kerbs,landscaping,lighting,andappurtenances)arestoredintheCorporateAssetManagementSystem–Hansen.ITEquipmentandPlantandFleetassetsarestoredinFinanceOne.

FinanceOnealsostoresGeneralLedgerinformation,AccountsPayable/Receivable,BankReconciliation,andBalanceSheet.

Accounting standards and regulations

Therearevariousregulationsandaccountingstandardsthatwemustcomplywith;however,thosethatarespecificallyrelatedtoassetmanagementare:

• South Australian Local Government Act 1999andLocal Government (Financial Management) Regulations 2011;

• AASB116PropertyPlantandEquipment;and

• AASB13FairValueMeasurement.

Capital / maintenance threshold

Councilmaintainanassetaccountingpolicywhichsetsthethresholdofmaterialityforallassetclassesat$5,000.Whereanindividualassetfallsbelowthethresholdamountbutthoseindividualassetsformpartofanetwork,e.g.stormwaterassets,streetandParkLandsfurniture,thenthoseassetsarecapitalisedbasedontheaggregatedvalueoftheassetsabovethethreshold.

Required changes to accounting financial systems arising from this AM Plan

CounciliscurrentlyimplementingRAMMAssetMaintenanceManagementSystemacrossallassetclasses.ItisanticipatedthatsomechangestothefinancialsystemsarisingfromtheintegrationofFinanceOnewithRAMM.

Improvementstothereportingofrenewal/enhancement/newassetcapitalexpenditure,reactiveandplannedmaintenance,andoperatingexpenseshavebeenidentifiedtoenhancefutureversionsofthisAMPlan.

7. PLAN IMPROVEMENT AND MONITORING


7.1.2 Asset management system

CouncilcurrentlyusesHansenasitsAssetManagementSystem.ThissystemislinkedtoArcGIS.

CouncilisintheprocessofimplementingRAMMmaintenancemanagementsoftwarewhichhassomecorefunctionalityasanAssetManagementSystem.

CouncilalsousesSPMassetssoftwareforconditionauditsandlongtermplanningofbuildingassets.

Asset registers

Currentlyallinfrastructureassets(excludingbridgesandtrafficsignals)havebeenestablishedinRAMM.BuildingsandPlantandFleetassetsaremanagedinHansen.

Linkage from asset management to financial system

Thereisnodirectinterfacebetweentheassetmanagementsystemsandthefinancialsystems.AspartoftheRAMMimplementationthishasbeenscheduledtooccurinlaterfinancialyearforinfrastructureassets.BuildingsandPlantandFleetwillnotbeincludedinthisimplementationinthefirstinstance.

Accountabilities for asset management system and data

Processeshavebeenestablishedtoensurethatdataintheassetmanagementsystemsareup-to-dateandauditprocessesareinplacetomaintainandimprovethedataintegrity.

Required changes to asset management system arising from this AM Plan

Councilhasrecognisedthatimprovedanalysisofdataforlongtermpredictivemodelling,andintegrationofvaluationsandunitratesintoassetinformationsystemsisverycrucialtoachieveassetmanagementoutcomes.


7.2 Improvement Program

TheAssetManagementImprovementPlangeneratedfromthisAMPlanisshowninTable7.2.

Table 7.2: Improvement Plan

Task no. Task Responsibility Resources required Timeline

1 Improvefinancialreportingtoenablecapital/maintenance/operationalcoststobecapturedandidentifiedperbuilding.

Finance Finance March2017

2 DevelopAsbestosRemovalProgram. InfrastructureManagement

AssetOfficers June2016

3 DevelopPublicToiletActionPlantoplanfortheupgrade/renewalandnewfacilitiesrequiredtomeetthestandardsintheOperating Guideline for Public Toilets.

InfrastructureManagement

CitySafety,Cleansing July2016

5 Undertakeconsultationtoidentifycustomersatisfactionwithbuildingassets.


ParkLandsStrategy,ActiveCity,PandC,Governance,CityCommunity,PublicRealm,UPark,Propertyandexternalstakeholders

April2016andannually

6 Assesspropertyportfoliotoidentifystrategicalignmentandfitwithadoptedstrategies.


PropertyDevelopment July2016andannually

7 ReviewinlinewithadoptedAdelaide Design Manual. InfrastructureManagement

AsADMisadopted

8 Undertakecostbenefitanalysisofimplementingapreventativemaintenanceprogram.


FacilitiesManagement December2016

9 ReviewannuallytoensurealignmentwithCouncilstrategies.


AssetOfficers Decembereachyear

10 Developinternalaudit/reviewprocesstoensureassetmanagementprocessesandimplementationareconsistentwiththeendorsedplan.


AssetOfficers December2016

11 Continuetoimproveassetdatacollectionincludingimprovementtotheassethandoverprocedure.


AssetOfficers December2016

12 Developplansfortheupgrade,renewal,andnewfacilitiestomeetforecastdemand.


AssetOfficers 2016-17

13 Reviewcommunitylevelsofserviceandtechnicallevelsofserviceagainstcustomersatisfactionresults.


AssetOfficers Ongoing

14 UpdateDisability Discrimination Act Management Plan. InfrastructureManagement

AssetOfficers/externalconsultants

2017

15 Reviewprioritisationrankingcriteriaforrenewal,enhancementornewassets.


Finance April2017

16 Identifyappropriateapproachforaddressingresidentialinvestmentpropertieswithinassetmanagementframeworkandgeneralpropertystrategy.

Property/InfrastructureManagement

PropertyOfficersandBuildingAssetOfficers

December2016


7.3 Monitoring and Review Procedures

ThisAMPlanwillbereviewedduringannualbudgetplanningprocessesandamendedtorecogniseanymaterialchangesinservicelevelsand/orresourcesavailabletoprovidethoseservicesasaresultofbudgetdecisions.

TheAMPlanwillbeupdatedannuallytoensureitrepresentsthecurrentservicelevel,assetvalues,projectedoperations,maintenance,capitalrenewalandreplacement,capitalupgrade/newandassetdisposalexpenditures,andprojectedexpenditurevaluesincorporatedintotheCouncil’sLTFP.

TheAMPlanhasalifeoffouryears(Councilelectioncycle)andisdueforcompleterevisionandupdatingwithintwoyearsofeachCouncilelection.

7.4 Performance Measures

TheeffectivenessoftheAMPlancanbemeasuredinthefollowingways:

• ThedegreetowhichtherequiredprojectedexpendituresidentifiedinthisAMPlanareincorporatedintotheCouncil’sLTFP;

• Thedegreetowhichonetofive-yeardetailedworksprograms,budgets,businessplans,andorganisationalstructurestakeintoaccountthe‘global’worksprogramtrendsprovidedbytheAMPlan;

• Thedegreetowhichtheexistingandprojectedservicelevelsandserviceconsequences(whatwecannotdo),risks,andresidualrisksareincorporatedintotheorganisation’sStrategicPlanandassociatedplans;and

• TheAssetRenewalFundingRatioachievingthetargetof1.0.


8. REFERENCES

TheCityofAdelaide,2012,The City of Adelaide Strategic Plan 2012 - 16,www.adelaidecitycouncil.com/assets/Policies-Papers/docs/STRATEGY-strategic-plan-july-2012-16.pdf

TheCityofAdelaide,2016,The City of Adelaide Strategic Plan 2016 - 20(draft),https://s3-ap-southeast-2.amazonaws.com/ehq-production-australia/27e8fc2d16bc92bd969fad6fe4f8dde8fc2a67ff/documents/attachments/000/032/665/original/ACC_Strategic_Plan_2016_2020.pdf?1456454116

TheCityofAdelaide,2012,Adelaide City Council - The Corporation Plan 2012 - 16,www.adelaidecitycouncil.com/assets/Policies-Papers/docs/PLAN-Corporation-Plan-2012-16.pdf

IPWEA,2006,International Infrastructure Management Manual,InstituteofPublicWorksEngineeringAustralia,Sydney,www.ipwea.org.au/IIMM

IPWEA,2008,NAMS.PLUS Asset Management,InstituteofPublicWorksEngineeringAustralia,Sydney,www.ipwea.org.au/namsplus

IPWEA,2009,Australian Infrastructure Financial Management Guidelines,InstituteofPublicWorksEngineeringAustralia,Sydney,www.ipwea.org.au/AIFMG

IPWEA,2011,International Infrastructure Management Manual,InstituteofPublicWorksEngineeringAustralia,Sydney,www.ipwea.org.au/IIMM


9. APPENDICES

Appendix A MaintenanceResponseLevelsofService

Appendix B Projected10-yearCapitalRenewalandReplacementWorksProgram

Appendix C Projected10-yearCapitalUpgrade/NewWorksProgram

Appendix D BudgetedExpendituresAccommodatedInLTFP

Appendix E RiskRegister

Appendix F Abbreviations

Appendix G Glossary


Appendix A: Maintenance Response Levels of Service

Maintenance and Inspection Program

Activity Type Frequency Comments Corporate Community Commercial Facilities

Airconditioning Inspection Monthly AustralianStandardsapply

Yes Councilwhenresponsible

Councilwhenlandlordresponsibility

Yes

Backflowpreventiondevices

Inspection Yearly AustralianStandardsapply

Yes Yes Yes Yes

BuildingMaintenanceSystem(BMS)

Inspection Monthly Yes Yes Yes Yes

Cleaning Maintenance Daily Dependantonusage

Yes Councilasoccupieronly


Yes

Cleaning(carpet) Maintenance Annually Dependantonusage



NA

Cleaning(hygieneservices)

Maintenance Monthly Yes Councilwhenresponsible


Yes

Cleaning(window) Maintenance Sixmonthly/annually

Dependantonusage



Yes

Clock Inspection Monthly TownHall Yes

Electricalcompliance(switchboards)

Inspection Annually AustralianStandardsapply


Yes Yes

Emergencyevacuationsystem




Yes

Exitandemergencylighting

Inspection Monthly AustralianStandardsapply



Yes

Fallrestraint/harnesssystem


Yes Yes Yes Yes

Fireemergencysystems

Inspection Yes Yes Yes Yes


Appendix A: Maintenance Response Levels of Service continued



Fireextinguishers/hosereels

Inspection Sixmonthly AustralianStandardsapply



Yes

Fireseparation/flameretardantspray


Yes Yes Yes Yes

Floorcoverings Replace Asrequired Dependantoncondition



Yes

Generalpropertyinspection

Inspection Sixmonthly/annually

Yes Yes

Greasetraps Maintenance Monthly/quarterly

Dependantonusage



NA

Lifts Maintenance Monthly AustralianStandardsapply

Yes Yes Yes Yes

Painting Maintenance 5-7years Adjustedbasedonhierarchyofbuilding



Yes

Pestcontrol Maintenance Monthly-sixmonthly

Dependantonlocationandusage



Yes

Rollerdoors/gates(automatic/manual)

Inspection Monthly Yes Councilwhenresponsible


Yes

Roofandguttercleaning

Maintenance Sixmonthly Yes Councilwhenresponsible

Yes Yes

Security(systemsandmonitoring)

Inspection Monthly AustralianStandardsapply



Yes

Testingandtagging Inspection Yearly AustralianStandardsapply



Yes





Thermostaticmixing Inspection Annually AustralianStandardsapply



Yes

Toilets(automatic) Inspection Quarterly Maintenancecontract

Yes

Watertesting(e.g.chlorine,drinkingfountains)




Yes

Note:Commercialandsomecommunitybuildingsareleasedtothirdparties-maintenanceresponsibilitiesvarybetweenlandlordandtenant-individualleasesshouldbecheckedtoverifyresponsibility.



Reactive Maintenance Response Times

Asset type Task Intervention level Make safe time Repair time (from notification)

Mechanical Airconditioningrepair/replace Inspection/report(repairtimedependsonextentofdamage/severity)

≤1hour-24hours ≤5workingdays(30daysfornon-urgent)

Mechanical Hotwatersystemsrepair/replace Upgradeormalfunction ≤1hour-24hours ≤5workingdays(30daysfornon-urgent)

Mechanical Liftbreakdown Inspection/report ≤1hour-24hours ≤5workingdays

Mechanical BuildingMaintenanceSystem(BMS) Inspection/report ≤1hour-24hours ≤5workingdays(30daysfornon-urgent)

Mechanical Lift(nonurgent) Inspection/report ≤1hour-24hours ≤30workingdays

Mechanical Automaticdoors Inspection/report ≤1hour-24hours ≤5workingdays(30daysfornon-urgent)

Plumbing Plumbingfailure Inspection/report(repairtimedependsonextentofdamage/severity)

≤1hour-24hours ≤5workingdays

Electrical Upgradeelectricalsystem Nolongercompliant ≤5workingdays ≤6months

Electrical Electricalrepairs(major) Inspection/report(repairtimedependsonextentofdamage/severity)


Electrical Electricalrepairs(minor) Inspection/report(repairtimedependsonextentofdamage/severity)


Electrical Lightsgeneralmaintenance(bulbs/tubes)excludingexitandemergencylighting

Inspection/report ≤1hour-24hours ≤30workingdays

Electrical Exitandemergencylightingrepairs Inspection/report ≤1hour-24hours ≤5workingdays

FireServices

Fireservices Inspection/report ≤1hour-24hours ≤5workingdays(30daysfornon-urgent)

Envelope Glazing Inspection/report(repairtimedependsonextentofdamage/severity)


Envelope Floorcoverings(replace/repair) Inspection/report(repairtimedependsonextentofdamage/severity)


Envelope Graffiti(offensive) Inspection/report ≤1hour-24hours

Envelope Graffiti(non-offensive) Inspection/report ≤5workingdays

Envelope Doors/windows(breakinresponse) Inspection/report(repairtimedependsonextentofdamage/severity)


Envelope Carpentryandjoinery Inspection/report(repairtimedependsonextentofdamage/severity)


Envelope Signage Inspection/report ≤1hour-24hours ≤5workingdays(30daysfornon-urgent)

Envelope Windowtreatments(blinds,etc) Inspection/report ≤1hour-24hours ≤5workingdays(30daysfornon-urgent)

Envelope Locks/openingsystems Inspection/report ≤1hour-24hours ≤5workingdays(30daysfornon-urgent)

Envelope Buildingstructure(roof,downpipes,etc) Inspection/report ≤1hour-24hours ≤5workingdays(30daysfornon-urgent)


Appendix B: Projected 10-year Capital Renewal and Replacement Works Program

Renewal cost

2016 $3,105,611

Commercial $656,500

Community $870,076

Corporation $1,030,015

Facilities $549,020

2017 $6,158,233

Commercial $3,026,013

Community $983,583


Facilities $457,694

2018 $3,174,533

Commercial $22,500

Community $103,115


Facilities $415,474

2019 $4,589,803


Community $288,371


Facilities $26,440

2020 $3,547,809


Community $729,737


Facilities $76,609

Renewal cost

2021 $6,882,843


Community $834,208


Facilities $124,135

2022 $4,177,686


Community $494,496


Facilities $32,134

2023 $3,205,998

Commercial $663,960

Community $1,619,241

Corporation $783,530

Facilities $139,267

2024 $2,118,658

Commercial $760,272

Community $424,412

Corporation $793,084

Facilities $140,890

GRAND TOTAL $36,961,174


Appendix C: Projected Upgrade / New 10-year Capital Works Program

Year Item Description Estimate ($,000)

2015 TOTAL $280

2016 1 TownHall-lightingbarandlights $30

2 Publictoilets $250

3 VictoriaParkchangeroomandtoilets $600

2016 TOTAL $880

2017 1 Publictoilets $250

2 ParkLandbuildings(MasterPlan) $500

2017 TOTAL $750

2018 1 ParkLandbuildings(MasterPlan) $500

2018 TOTAL $500


2019 TOTAL $500


2020 TOTAL $500


2021 TOTAL $500


2022 TOTAL $500


2023 TOTAL $500


2024 TOTAL $500


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2016

2017

2018

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2022

2023

2024

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2026

2027

2028

2029

2030

2031

2032

2033

2034

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2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

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pit

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2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

$000

$000

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alcu

late

d fr

om y

our

data

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over

wri

te th

e lin

ks.

Fina

ncia

l yea

r en

ding

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

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$000

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ma

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Appendix F: Abbreviations

AAAC Averageannualassetconsumption

AM Assetmanagement

AM Plan Assetmanagementplan

ARI Averagerecurrenceinterval

ASC Annualservicecost

BOD Biochemical(biological)oxygendemand

CRC Currentreplacementcost

CWMS Communitywastewatermanagementsystems

DA Depreciableamount

DRC Depreciatedreplacementcost

EF Earthworks/formation

IRMP Infrastructureriskmanagementplan

LCC Lifecyclecost

LCE Lifecycleexpenditure

LTFP Longtermfinancialplan

MMS Maintenancemanagementsystem

PCI Pavementconditionindex

RV Residualvalue

SoA Stateoftheassets

SS Suspendedsolids

vph Vehiclesperhour

WDCRD Writtendowncurrentreplacementcost


Appendix G: Glossary

Annual service cost (ASC)

1) Reportingactualcost

Theannual(accrual)costofprovidingaserviceincludingoperations,maintenance,depreciation,finance/opportunity, anddisposalcostslessrevenue.

2) Forinvestmentanalysisandbudgeting

Anestimateofthecostthatwouldbetendered,perannum,iftenderswerecalledforthesupplyofaservicetoa performancespecificationforafixedterm.Theannualservicecostincludesoperations,maintenance,depreciation, finance/opportunity,anddisposalcosts,lessrevenue.

Asset

Aresourcecontrolledbyanentityasaresultofpasteventsandfromwhichfutureeconomicbenefitsareexpectedtoflowtotheentity.Infrastructureassetsareasub-classofproperty,plant,andequipmentwhicharenon-currentassetswithalifegreaterthan12monthsandenableservicestobeprovided.

Asset category

Sub-groupofassetswithinaclasshierarchyforfinancialreportingandmanagementpurposes.

Asset class

Agroupofassetshavingasimilarnatureorfunctionintheoperationsofanentity,andwhich,forpurposesofdisclosure,isshownasasingleitemwithoutsupplementarydisclosure.

Asset condition assessment

Theprocessofcontinuousorperiodicinspection,assessment,measurement,andinterpretationoftheresultantdatatoindicatetheconditionofaspecificassetsoastodeterminetheneedforsomepreventativeorremedialaction.

Asset hierarchy

Aframeworkforsegmentinganassetbaseintoappropriateclassifications.Theassethierarchycanbebasedonassetfunctionorassettypeoracombinationofthetwo.

Asset management (AM)

Thecombinationofmanagement,financial,economic,engineering,andotherpracticesappliedtophysicalassetswiththeobjectiveofprovidingtherequiredlevelofserviceinthemostcosteffectivemanner.

Asset renewal funding ratio

Theratioofthenetpresentvalueofassetrenewalfundingaccommodatedovera10-yearperiodinaLongTermFinancialPlanrelativetothenetpresentvalueofprojectedcapitalrenewalexpendituresidentifiedinanAssetManagementPlanforthesameperiod[AIFMGFinancialSustainabilityIndicatorNo8].

Average annual asset consumption (AAAC)*

Theamountofanorganisation’sassetbaseconsumedduringareportingperiod(generallyayear).Thismaybecalculatedbydividingthedepreciableamountbytheusefullife(ortotalfutureeconomicbenefits/servicepotential)andtotalledforeachandeveryassetORbydividingthecarryingamount(depreciatedreplacementcost)bytheremainingusefullife(orremainingfutureeconomicbenefits/servicepotential)andtotalledforeachandeveryassetinanassetcategoryorclass.


Borrowings

Aborrowingorloanisacontractualobligationoftheborrowingentitytodelivercashoranotherfinancialassettothelendingentityoveraspecifiedperiodoftimeorataspecifiedpointintime,tocoverboththeinitialcapitalprovidedandthecostoftheinterestincurredforprovidingthiscapital.Aborrowingorloanprovidesthemeansfortheborrowingentitytofinanceoutlays(typicallyphysicalassets)whenithasinsufficientfundsofitsowntodoso,andforthelendingentitytomakeafinancialreturn,normallyintheformofinterestrevenue,onthefundingprovided.

Capital expenditure

Relativelylarge(material)expenditure,whichhasbenefits,expectedtolastformorethan12months.Capitalexpenditureincludesrenewal,expansion,andupgrade.Wherecapitalprojectsinvolveacombinationofrenewal,expansion,and/orupgradeexpenditures,thetotalprojectcostneedstobeallocatedaccordingly.

Capital expenditure - expansion

Expenditurethatextendsthecapacityofanexistingassettoprovidebenefits,atthesamestandardasiscurrentlyenjoyedbyexistingbeneficiaries,toanewgroupofusers.Itisdiscretionaryexpenditure,whichincreasesfutureoperationsandmaintenancecosts,becauseitincreasestheorganisation’sassetbase,butmaybeassociatedwithadditionalrevenuefromthenewusergroup,e.g.extendingadrainageorroadnetwork,theprovisionofanovalorparkinanewsuburbfornewresidents.

Capital expenditure - new

Expenditurewhichcreatesanewassetprovidinganewservice/outputthatdidnotexistbeforehand.Asitincreasesservicepotentialitmayimpactrevenueandwillincreasefutureoperationsandmaintenanceexpenditure.

Capital expenditure - renewal

Expenditureonanexistingassetoronreplacinganexistingasset,whichreturnstheservicecapabilityoftheassetuptothatwhichithadoriginally.Itisperiodicallyrequiredexpenditure,relativelylarge(material)invaluecomparedwiththevalueofthecomponentsorsub-componentsoftheassetbeingrenewed.Asitreinstatesexistingservicepotential,itgenerallyhasnoimpactonrevenue,butmayreducefutureoperationsandmaintenanceexpenditureifcompletedattheoptimumtime,e.g.resurfacingorresheetingamaterialpartofaroadnetwork,replacingamaterialsectionofadrainagenetworkwithpipesofthesamecapacity,resurfacinganoval.

Capital expenditure - upgrade

Expenditure,whichenhancesanexistingassettoprovideahigherlevelofserviceorexpenditurethatwillincreasethelifeoftheassetbeyondthatwhichithadoriginally.Upgradeexpenditureisdiscretionaryandoftendoesnotresultinadditionalrevenueunlessdirectuserchargesapply.Itwillincreaseoperationsandmaintenanceexpenditureinthefuturebecauseoftheincreaseintheorganisation’sassetbase,e.g.wideningthesealedareaofanexistingroad,replacingdrainagepipeswithpipesofagreatercapacity,enlargingagrandstandatasportingfacility.

Capital funding

Fundingtopayforcapitalexpenditure.

Capital grants

Moniesreceivedgenerallytiedtothespecificprojectsforwhichtheyaregranted,whichareoftenupgradeand/orexpansionornewinvestmentproposals.

Capital investment expenditure

See‘capitalexpenditure’definition.


Capitalisation threshold

Thevalueofexpenditureonnon-currentassetsabovewhichtheexpenditureisrecognisedascapitalexpenditureandbelowwhichtheexpenditureischargedasanexpenseintheyearofacquisition.

Carrying amount

Theamountatwhichanassetisrecognisedafterdeductinganyaccumulateddepreciation/amortisationandaccumulatedimpairmentlossesthereon.

Class of assets

See‘assetclass’definition.

Component

Specificpartsofanassethavingindependentphysicalorfunctionalidentityandhavingspecificattributessuchasdifferentlifeexpectancy,maintenanceregimes,riskorcriticality.

Core asset management

Assetmanagementwhichreliesprimarilyontheuseofanassetregister,maintenancemanagementsystems,jobresourcemanagement,inventorycontrol,conditionassessment,simpleriskassessment,anddefinedlevelsofservice,inordertoestablishalternativetreatmentoptionsandlong-termcashflowpredictions.Prioritiesareusuallyestablishedonthebasisoffinancialreturngainedbycarryingoutthework(ratherthandetailedriskanalysisandoptimiseddecision-making).

Cost of an asset

Theamountofcashorcashequivalentspaidorthefairvalueoftheconsiderationgiventoacquireanassetatthetimeofitsacquisitionorconstruction,includinganycostsnecessarytoplacetheassetintoservice.Thisincludesone-offdesignandprojectmanagementcosts.

Critical assets

Assetsforwhichthefinancial,businessorservicelevelconsequencesoffailurearesufficientlyseveretojustifyproactiveinspectionandrehabilitation.Criticalassetshavealowerthresholdforactionthannon-criticalassets.

Current replacement cost (CRC)

Thecosttheentitywouldincurtoacquiretheassetonthereportingdate.Thecostismeasuredbyreferencetothelowestcostatwhichthegrossfutureeconomicbenefitscouldbeobtainedinthenormalcourseofbusinessortheminimumitwouldcost,toreplacetheexistingassetwithatechnologicallymodernequivalentnewasset(notasecondhandone)withthesameeconomicbenefits(grossservicepotential)allowingforanydifferencesinthequantityandqualityofoutputandinoperatingcosts.

Deferred maintenance

Theshortfallinrehabilitationworkundertakenrelativetothatrequiredtomaintaintheservicepotentialofanasset.

Depreciable amount

Thecostofanasset,orotheramountsubstitutedforitscost,lessitsresidualvalue.

Depreciated replacement cost (DRC)

Thecurrentreplacementcost(CRC)ofanassetless,whereapplicable,accumulateddepreciationcalculatedonthebasisofsuchcosttoreflectthealreadyconsumedorexpiredfutureeconomicbenefitsoftheasset.


Depreciation / amortisation

Thesystematicallocationofthedepreciableamount(servicepotential)ofanassetoveritsusefullife.

Economic life

See‘usefullife’definition.

Expenditure

Thespendingofmoneyongoodsandservices.Expenditureincludesrecurrentandcapitaloutlays.

Expenses

Decreasesineconomicbenefitsduringtheaccountingperiodintheformofoutflowsordepletionsofassetsorincreasesinliabilitiesthatresultindecreasesinequity,otherthanthoserelatingtodistributionstoequityparticipants.

Fair value

Theamountforwhichanassetcouldbeexchanged,oraliabilitysettled,betweenknowledgeable,willingparties,inanarm’slengthtransaction.

Financing gap

Afinancinggapexistswheneveranentityhasinsufficientcapacitytofinanceassetrenewalandotherexpenditurenecessarytobeabletoappropriatelymaintaintherangeandlevelofservicesitsexistingassetstockwasoriginallydesignedandintendedtodeliver.Theservicecapabilityoftheexistingassetstockshouldbedeterminedassumingnoadditionaloperatingrevenue,productivityimprovements,ornetfinancialliabilitiesabovelevelscurrentlyplannedorprojected.Acurrentfinancinggapmeansservicelevelshavealreadyorarecurrentlyfalling.Aprojectedfinancinggapifnotaddressedwillresultinafuturediminutionofexistingservicelevels.

Heritage asset

Anassetwithhistoric,artistic,scientific,technological,geographicalorenvironmentalqualitiesthatisheldandmaintainedprincipallyforitscontributiontoknowledgeandcultureandthispurposeiscentraltotheobjectivesoftheentityholdingit.

Impairment loss

Theamountbywhichthecarryingamountofanassetexceedsitsrecoverableamount.

Infrastructure assets

Physicalassetsthatcontributetomeetingtheneedsoforganisationsortheneedforaccesstomajoreconomicandsocialfacilitiesandservices,e.g.roads,drainage,footpaths,andcycleways.Thesearetypicallylarge,interconnectednetworksorportfoliosofcompositeassets.Thecomponentsoftheseassetsmaybeseparatelymaintained,renewedorreplacedindividuallysothattherequiredlevelandstandardofservicefromthenetworkofassetsiscontinuouslysustained.Generallythecomponentsandhencetheassetshavelonglives.Theyarefixedinplaceandareoftenhavenoseparatemarketvalue.

Investment property

Propertyheldtoearnrentalsorforcapitalappreciationorboth,ratherthanfor:

a) Useintheproductionorsupplyofgoodsorservicesorforadministrativepurposes;or

b) Saleintheordinarycourseofbusiness.


Key performance indicator

Aqualitativeorquantitativemeasureofaserviceoractivityusedtocompareactualperformanceagainstastandardorothertarget.Performanceindicatorscommonlyrelatetostatutorylimits,safety,responsiveness,cost,comfort,assetperformance,reliability,efficiency,environmentalprotection,andcustomersatisfaction.

Level of service

Thedefinedservicequalityforaparticularservice/activityagainstwhichserviceperformancemaybemeasured.Servicelevelsusuallyrelatetoquality,quantity,reliability,responsiveness,environmentalimpact,acceptability,andcost.

Lifecycle cost (LCC) *

1. Total LCCThetotalcostofanassetthroughoutitslifeincludingplanning,design,construction,acquisition,operation,maintenance,rehabilitation,anddisposalcosts.

2. Average LCC TheLCCisaveragecosttoprovidetheserviceoverthelongestassetlifecycle.Itcomprisesaverageoperations,maintenanceexpenditureplusassetconsumptionexpense,representedbydepreciationexpenseprojectedover10years.TheLCCdoesnotindicatethefundsrequiredtoprovidetheserviceinaparticularyear.

Lifecycle expenditure

Thelifecycleexpenditure(LCE)istheaverageoperations,maintenance,andcapitalrenewalexpenditureaccommodatedintheLong Term Financial Planover10years.LCEmaybecomparedtoaveragelifecyclecosttogiveaninitialindicatorofaffordabilityofprojectedservicelevelswhenconsideredwithassetageprofiles.

Loans / borrowings

See‘borrowings’.

Maintenance

Allactionsnecessaryforretaininganassetasnearaspracticabletoanappropriateservicecondition,includingregularongoingday-to-dayworknecessarytokeepassetsoperating,e.g.roadpatchingbutexcludingrehabilitationorrenewal.Itisoperatingexpenditurerequiredtoensurethattheassetreachesitsexpectedusefullife.

• Planned maintenance Repairworkthatisidentifiedandmanagedthroughamaintenancemanagementsystem(MMS).MMSactivitiesincludeinspection,assessingtheconditionagainstfailure/breakdown,criteria/experience,prioritisingscheduling,actioningthework,andreportingwhatwasdonetodevelopamaintenancehistoryandimprovemaintenanceandservicedeliveryperformance.

• Reactive maintenanceUnplannedrepairworkthatiscarriedoutinresponsetoservicerequestsandmanagement/supervisorydirections.

• Specific maintenanceMaintenanceworktorepaircomponentsorreplacesub-componentsthatneedtobeidentifiedasaspecificmaintenanceiteminthemaintenancebudget.

• Unplanned maintenanceCorrectiveworkrequiredintheshort-termtorestoreanassettoworkingconditionsoitcancontinuetodelivertherequiredserviceortomaintainitslevelofsecurityandintegrity.

Maintenance expenditure *

Recurrentexpenditure,whichisperiodicallyorregularlyrequiredaspartoftheanticipatedscheduleofworksrequiredtoensurethattheassetachievesitsusefullifeandprovidestherequiredlevelofservice.Itisexpenditure,whichwasanticipatedindeterminingtheasset’susefullife.


Materiality

Thenotionofmaterialityguidesthemarginoferroracceptable,thedegreeofprecisionrequired,andtheextentofthedisclosurerequiredwhenpreparinggeneralpurposefinancialreports.Informationismaterialifitsomission,misstatementornon-disclosurehasthepotential,individuallyorcollectively,toinfluencetheeconomicdecisionsofuserstakenonthebasisofthefinancialreportoraffectthedischargeofaccountabilitybythemanagementorgoverningbodyoftheentity.

Modern equivalent asset

Assetsthatreplicatewhatisinexistencewiththemostcost-effectiveassetperformingthesamelevelofservice.Itisthemostcostefficient,currentlyavailableassetwhichwillprovidethesamestreamofservicesastheexistingassetiscapableofproducing.Itallowsfortechnologychanges,andimprovementsandefficienciesinproductionandinstallationtechniques.

Net present value (NPV)

Thevaluetotheorganisationofthecashflowsassociatedwithanasset,liability,activityoreventcalculatedusingadiscountratetoreflectthetimevalueofmoney.Itisthenetamountofdiscountedtotalcashinflowsafterdeductingthevalueofthediscountedtotalcashoutflowsarisingfrome.g.thecontinueduseandsubsequentdisposaloftheassetafterdeductingthevalueofthediscountedtotalcashoutflows.

Non-revenue generating investments

Investmentsfortheprovisionofgoodsandservicestosustainorimproveservicestothecommunitythatarenotexpectedtogenerateanysavingsorrevenuetotheorganisation,e.g.parksandplaygrounds,footpaths,roadsandbridges,andlibraries.

Operations

Regularactivitiestoprovideservicessuchaspublichealth,safety,andamenity,e.g.streetsweeping,grassmowing,andstreetlighting.

Operating expenditure

Recurrentexpenditure,whichiscontinuouslyrequiredtoprovideaservice.Incommonusethetermtypicallyincludes,e.g.power,fuel,staff,plantequipment,on-costs,andoverheadsbutexcludesmaintenanceanddepreciation.Maintenanceanddepreciationisontheotherhandincludedinoperatingexpenses.

Operating expense

Thegrossoutflowofeconomicbenefits,beingcashandnon-cashitems,duringtheperiodarisinginthecourseofordinaryactivitiesofanentitywhenthoseoutflowsresultindecreasesinequity,otherthandecreasesrelatingtodistributionstoequityparticipants.

Operating expenses

Recurrentexpensescontinuouslyrequiredtoprovideaservice,includingpower,fuel,staff,plantequipment,maintenance,depreciation,on-costs,andoverheads.

Operations, maintenance, and renewal financing ratio

Ratioofestimatedbudgettoprojectedexpenditureforoperations,maintenance,andrenewalofassetsoveradefinedtime(e.g.five,10,and15years).

Operations, maintenance, and renewal gap

DifferencebetweenbudgetedexpendituresinaLongTermFinancialPlan(orestimatedfuturebudgetsinabsenceofaLongTermFinancialPlan)andprojectedexpendituresforoperations,maintenance,andrenewalofassetstoachieve/maintainspecifiedservicelevels,totalledoveradefinedtime(e.g.five,10,and15years).


Pavement management system (PMS)

Asystematicprocessformeasuringandpredictingtheconditionofroadpavementsandwearingsurfacesovertimeandrecommendingcorrectiveactions.

PMS score

Ameasureofconditionofaroadsegmentdeterminedfromapavementmanagementsystem.

Rate of annual asset consumption *

Theratioofannualassetconsumptionrelativetothedepreciableamountoftheassets.Itmeasurestheamountoftheconsumablepartsofassetsthatareconsumedinaperiod(depreciation)expressedasapercentageofthedepreciableamount.

Rate of annual asset renewal *

Theratioofassetrenewalandreplacementexpenditurerelativetodepreciableamountforaperiod.Itmeasureswhetherassetsarebeingreplacedattheratetheyarewearingoutwithcapitalrenewalexpenditureexpressedasapercentageofdepreciableamount(capitalrenewalexpenditure/DA).

Rate of annual asset upgrade / new *

Ameasureoftherateatwhichassetsarebeingupgradedandexpandedperannumwithcapitalupgrade/newexpenditureexpressedasapercentageofdepreciableamount(capitalupgrade/expansionexpenditure/DA).

Recoverable amount

Thehigherofanasset’sfairvalue,lesscoststosellanditsvalueinuse.

Recurrent expenditure

Relativelysmall(immaterial)expenditureorthatwhichhasbenefitsexpectedtolastlessthan12months.Recurrentexpenditureincludesoperationsandmaintenanceexpenditure.

Recurrent funding

Fundingtopayforrecurrentexpenditure.

Rehabilitation

See‘capitalrenewalexpenditure’definitionabove.

Remaining useful life

Thetimeremaininguntilanassetceasestoprovidetherequiredserviceleveloreconomicusefulness.Ageplusremainingusefullifeisusefullife.

Renewal

See‘capitalrenewalexpenditure’definitionabove.

Residual value

Theestimatedamountthatanentitywouldcurrentlyobtainfromdisposaloftheasset,afterdeductingtheestimatedcostsofdisposal,iftheassetwerealreadyoftheageandintheconditionexpectedattheendofitsusefullife.

Revenue generating investments

Investmentsfortheprovisionofgoodsandservicestosustainorimproveservicestothecommunitythatareexpectedtogeneratesomesavingsorrevenuetooffsetoperatingcosts,e.g.publichallsandtheatres,childcarecentres,sportingandrecreationfacilities,touristinformationcentres.


Risk management

Theapplicationofaformalprocesstotherangeofpossiblevaluesrelatingtokeyfactorsassociatedwithariskinordertodeterminetheresultantrangesofoutcomesandtheirprobabilityofoccurrence.

Section or segment

Aself-containedpartorpieceofaninfrastructureassetclass.

Service potential

Thetotalfutureservicecapacityofanasset.Itisnormallydeterminedbyreferencetotheoperatingcapacityandeconomiclifeofanasset.Ameasureofservicepotentialisusedinthenot-for-profitsector/publicsectortovalueassets,particularlythosenotproducingacashflow.

Service potential remaining

Ameasureofthefutureeconomicbenefitsremaininginassets.Itmaybeexpressedindollarvalues(FairValue)orasapercentageoftotalanticipatedfutureeconomicbenefits.Itisalsoameasureofthepercentageoftheasset’spotentialtoprovideservicesthatisstillavailableforuseinprovidingservices(DepreciatedReplacementCost/DepreciableAmount).

Specific maintenance

Replacementofhighervaluecomponents/sub-componentsofassetsthatisundertakenonaregularcycleincludingrepaintingorreplacementofairconditioningequipment.Thisworkgenerallyfallsbelowthecapital/maintenancethresholdandneedstobeidentifiedinaspecificmaintenancebudgetallocation.

Strategic Longer-Term Plan

Aplancoveringthetermofofficeofcouncillors(fouryearsminimum)reflectingtheneedsofthecommunityfortheforeseeablefuture.ItbringstogetherthedetailedrequirementsintheCouncil’slonger-termplanssuchastheAsset Management PlanandtheLong Term Financial Plan.TheplanispreparedinconsultationwiththecommunityanddetailswheretheCouncilisatthatpointintime,whereitwantstogo,howitisgoingtogetthere,mechanismsformonitoringtheachievementoftheoutcomes,andhowtheplanwillberesourced.

Sub-component

Smallerindividualpartsthatmakeupacomponentpart.

Useful life

Either:

a)Theperiodoverwhichanassetisexpectedtobeavailableforusebyanentity,or

b)Thenumberofproductionorsimilarunitsexpectedtobeobtainedfromtheassetbytheentity.

Itisestimatedorexpectedtimebetweenplacingtheassetintoserviceandremovingitfromservice,ortheestimatedperiodoftimeoverwhichthefutureeconomicbenefitsembodiedinadepreciableasset,areexpectedtobeconsumedbytheorganisation.

Value in use

Thepresentvalueoffuturecashflowsexpectedtobederivedfromanassetorcashgeneratingunit.Itisdeemedtobedepreciatedreplacementcost(DRC)forthoseassetswhosefutureeconomicbenefitsarenotprimarilydependentontheasset’sabilitytogeneratenetcashinflows,wheretheentitywould,ifdeprivedoftheasset,replaceitsremainingfutureeconomicbenefits.

Source:IPWEA,2009,AIFMGGlossary

Additional and modified glossary items shown *

building asset management plan

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