ASSET MANAGEMENT STRATEGY
Version 2.2: September 2017
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 2 OF 48
Document Control
Document ID: 110817-ESC AMS v2-2 (Final Draft).docx
Rev No Date Revision Details Author Reviewer Approver
1 2011 Original Strategy - superseded ESC
2.1 August 2017 Draft incorporating comments and
review by Asset Management
Group
CLM Civil
Engineering
Warren
Sharpe
Rob Burke
ELT
Warren
Sharpe
2.2 September 2017 Final document incorporating
review comments by the Executive
Leadership Team & General
Manager
CLM Civil
Engineering
Warren
Sharpe
Rob Burke Warren
Sharpe
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 3 OF 48
Table of Contents 1 Executive Summary ........................................................................................................................................ 5
2 Introduction ................................................................................................................................................... 9
2.1 Community Infrastructure and Operational Assets ............................................................................ 10
2.2 Goals and Objectives of Asset Management ...................................................................................... 11
2.3 Integrated Planning and Reporting Framework .................................................................................. 12
2.4 Office of Local Government – Financial Ratios ................................................................................... 13
3 Management of Councils Assets .................................................................................................................. 17
3.1 Asset Management Policy ................................................................................................................... 17
3.2 Managing Our Assets .......................................................................................................................... 17
4 State of the Assets ....................................................................................................................................... 20
4.1 General Fund Infrastructure Assets .................................................................................................... 21
4.2 Asset Consumption Ratio .................................................................................................................... 24
4.3 Asset Condition/Functionality/Capacity and Utilisation ..................................................................... 25
4.4 Community Research .......................................................................................................................... 26
4.5 Asset Life Cycle Costs and Financial Status ......................................................................................... 29
4.6 Asset Performance Ratios ................................................................................................................... 29
5 Asset Management Plan Dashboards .......................................................................................................... 31
5.1 Transport Infrastructure Assets .......................................................................................................... 32
5.2 Stormwater Infrastructure Assets ....................................................................................................... 34
5.3 Community and Operational Facilities Infrastructure Assets ............................................................. 35
5.4 Recreational Facilities Infrastructure Assets ....................................................................................... 37
5.5 Marine Infrastructure Assets .............................................................................................................. 38
5.6 Waste Services Assets ......................................................................................................................... 39
6 Asset Management Improvement Plan ....................................................................................................... 40
6.1 Asset Management Planning elements ............................................................................................... 40
6.2 Asset Management Improvement Plan .............................................................................................. 42
6.3 Monitoring and Review ....................................................................................................................... 44
6.4 Performance Measures ....................................................................................................................... 44
7 References ................................................................................................................................................... 44
8 Abbreviations ............................................................................................................................................... 45
9 Glossary........................................................................................................................................................ 46
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 4 OF 48
List of Figures and Tables
Figures: Figure 2-1 Distribution of Asset Groups by Gross Replacement Cost .................................................................. 10
Figure 2-2 Integrated Planning and Reporting Framework .................................................................................. 13
Figure 4-1 Asset Condition by Gross Replacement Value ..................................................................................... 25
Figure 4-2 Quadrant Analysis of Transport Infrastructure ................................................................................... 27
Figure 4-3 Quadrant Analysis of 'Other Assets' .................................................................................................... 27
Figure 4-4 LTFP Expenditure - All Asset Classes .................................................................................................... 29
Tables:
Table 2-1 Fit For The Future benchmarks – General Fund ................................................................................... 16
Table 4-1 Asset Consumption Ratios .................................................................................................................... 24
Table 4-2 Micromex 2016 Performance Gap Ranking for Infrastructure Assets .................................................. 26
Table 4-3 Asset Performance Indicators – General Fund ..................................................................................... 30
Table 6-1 Asset Management Improvement Plan ................................................................................................ 43
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 5 OF 48
1 Executive Summary
Introduction
Eurobodalla Shire Council is responsible for a wide range of infrastructure assets required to service
residents and visitors. These assets have a combined current replacement value of $1.71B (as at 30
June 2016) and an annual depreciation estimated at $29.5M (for the 2017-18 financial year).
Depreciation represents 28.4% of the consolidated budget position within Council’s financial
Operating Statement for the 2016-17 financial year.
Water and sewer infrastructure assets have a current replacement value of $827M. These assets are
managed within the Water and Sewer Funds respectively. The long-term planning and funding needs
for Water and Sewer infrastructure assets are addressed in the Integrated Water Cycle Management
Strategy 2016 (adopted by Council on 13 December 2016) http://www.esc.nsw.gov.au/inside-
council/community-and-future-planning/strategies/integrated-water-cycle-management. The
funding for these services are provided through a combination of access and user charges in accord
with the NSW Best Practice Pricing Guidelines. The information pertaining to the asset management
of these assets is therefore not duplicated within this Asset Management Strategy.
The remaining infrastructure assets are funded through the General and Waste Funds with a current
replacement value of $874.4M and $6.25M respectively.
Office of Local Government Requirements
For infrastructure within the General and Waste Funds, Council should continue to demonstrate that
it can meet the Fit for The Future financial ratios including the Asset Maintenance Ratio, Building and
Infrastructure Renewal Ratio and Infrastructure Backlog Ratio.
Council must also report on the cost to bring assets to agreed service level ratio from 2016-17 onwards.
Funding for General and Waste Fund infrastructure assets is subject to the constraints of rate pegging,
which is set annually by the Independent Pricing and Regulatory Tribunal (IPART). The rate pegging
amount is often set at a rate below the real cost of operations and maintenance and capital
construction increases, all which are influenced by aspects such as the cost of labour, materials,
energy, increasing community expectations and higher standards (e.g. work health and safety,
environmental approvals, disability inclusion). These latter items are all worthy pursuits to improve
outcomes, however this has increased the cost of undertaking works.
Managing Assets
To meet the needs of our community, Council must provide for the whole of life costs of all
infrastructure assets under its care in both the short and long term including the cost of;
i) Adequate provision for maintenance and operations including inspections, recurring and
planned maintenance, repairs, energy, water and the like,
ii) Capital renewal works to replace asset components in poor or very poor condition,
iii) Capital renewal or upgrade works to improve the functionality of assets to meet
community need (e.g. accessible buildings),
iv) Capital upgrades or new infrastructure to meet current and future capacity needs (e.g. a
new by-pass road or a new building),
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 6 OF 48
v) Disposal of infrastructure assets at the end of their useful life to eliminate any future
liability costs, where required.
Sound financial management requires that Council considers the financing of the whole of life costs
of existing assets as a priority over the construction of new infrastructure assets. It is important to
recognise that as soon as an asset is built, the maintenance, operation and annual depreciation costs
impact Council’s financial Operating Statement (the budget).
The proper care and maintenance of infrastructure assets also has a significant impact on the risk to
the community, particularly community safety. Council is required to demonstrate the sound
management of infrastructure assets to mitigate these risks to the community and Council, and to
ensure legislative compliance, particularly with the Civil Liability Act, 2002 and Roads Act, 1993.
Council has adopted sound asset management principles for many years developing and
implementing;
i) key infrastructure strategies, studies, plans, point score systems and developer
contribution plans to identify and prioritise capital works,
ii) sound maintenance management systems in line with appropriate risk management
policies and frameworks.
This has been further enhanced through the development of formal asset management plans for the
following infrastructure assets categories;
i) Transport infrastructure such as local and regional roads, bridges, pathways, car parks, bus
stops and ancillary infrastructure,
ii) Stormwater infrastructure,
iii) Marine infrastructure such as boat ramps, wharves, jetties and rockwalls,
iv) Recreation facilities such as playing fields, reserves and aquatic centres,
v) Community (such as halls and libraries) and Operational Facilities (such as the main
administration office and depots),
vi) Waste facilities (under development).
Key Challenges
This Asset Management Strategy identifies the challenges that Council faces and provides a strategic
framework within which Council will work to manage its assets for the benefit of the community.
These challenges include;
i) the rate variation significantly improved Council’s financial resources to sustain infrastructure
assets into the future. However, Council is still required to find significant savings and
efficiencies, and pro-actively pursue grants to deliver the outcomes the community seeks.
Council’s Long Term Financial Plan includes additional allocations of funding toward
infrastructure asset renewal from 2019-20.
ii) managing demand for new and improved services. Council must weigh up the benefits of any
new infrastructure assets against the longer term financial sustainability and affordability
taking account of the ‘whole of life costs’ including financing, maintenance, operating and
replacement costs. It should also pursue well planned growth to better utilise and support
existing infrastructure which has the capacity to service a greater permanent population.
iii) the lack of formal pathways across Eurobodalla has been identified by the community as a
specific high priority gap. This gap is a result of changing subdivision requirements with only
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 7 OF 48
23% of Council’s urban road network having a pathway on at least one side. Council has
adopted the Eurobodalla Pathways Strategy 2017 to identify higher priority pathways and is
pursuing grant funding to assist deliver the $11.7M worth of pathways identified.
iv) an estimated population during peak holiday periods of 120,000 creates significant challenges
from an infrastructure management perspective, particularly for roads, parking, water, sewer
and high profile public reserves.
v) the management of ageing infrastructure assets in need of renewal and/or upgrade.
Infrastructure assets such as roads and stormwater drains present particular challenges. Many
were constructed at the time of the original subdivision and are in declining condition, and/or
do not satisfy current functionality and/or capacity requirements.
vi) Council is currently working through the process of determining solutions for the Mackay Park
Precinct which will to have an impact going forward and the Asset Management Strategy
should be reviewed once an outcome is determined.
Key Strategies
To provide for the sound management of our infrastructure assets Council has implemented a wide
range of actions including;
i) Fully funding the required maintenance and operation at the agreed level of service,
ii) Fully funding the annual infrastructure renewal cycle for short lived assets (i.e. useful life
less than 20 years) to progressively lower the overall cost to bring assets to a satisfactory
condition over time. For instance, resealing bitumen roads or replacing the carpet in a
building,
iii) Budgeting for capital works to renew or rehabilitate long lived assets (i.e. useful life
greater than 20 years) typically taking account of risks (e.g. replacement of a structural
road pavement in poor condition),
iv) Prudent use of loan funding, typically for infrastructure assets with a long useful life (e.g.
a new library exhibition center),
v) Partnering with Government through grants to fund infrastructure replacement and/or
upgrades (e.g. replacing a timber bridge with a new concrete bridge capable of carrying
higher productivity vehicles),
vi) Adjusting the level of service in consultation with the community (e.g. removing one of
the two halls in Tuross Head to enable a higher quality building that provides an accessible
inclusive community space),
vii) Strategic review of assets to optimise the asset portfolio under Council’s care including
clustering of assets, improving what we have instead of building new facilities and/or
removal of poorly positioned assets (e.g. as per the Recreation and Open Space Strategy
2010),
viii) Recycling of assets no longer required (e.g. sale of land to fund new and upgraded
recreation infrastructure as per the adopted Recreation and Open Space Strategy),
ix) Integration of works to optimize re-use of materials (e.g. re-use of old road pavement
materials to build components of new assets),
x) Use of new technologies (e.g. re-lining of pipes in-situ rather than digging them up to
replace the pipe, where appropriate),
xi) Implementation of targeted risk management strategies (e.g. higher inspection regime,
signposting or temporarily closing assets in poor condition),
xii) Improving asset management (e.g. by progressively improving the quality of asset data,
condition assessments and the like),
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xiii) Identifying new sources of income other than rates (e.g. provision of a gym at an aquatic
centre or through increased utilisation with the associated payment of fees),
xiv) Actively pursuing planned growth to increase the number of ratepayers and people
utilising the capacity of existing infrastructure assets (more people paying for the cost of
infrastructure assets),
xv) Ensuring land use planning optimises the infrastructure assets required to support
development,
xvi) Requiring developers to build appropriate infrastructure at their cost and/or pay
appropriate developer contributions as part of the development approval.
The strategies adopted by Council are considered best practice and many have now been adopted by
the sector as outlined within current guidelines produced by the Office of Local Government.
The outcomes of this Asset Management Strategy are guided by Council’s Community Strategy Plan.
The funding flowing from this Asset Management Strategy have been incorporated into Council’s
2017-21 Delivery Program, 2017-18 Operational Plan and the 2017-26 Long Term Financial Plan.
This Asset Management Strategy also includes an improvement plan to guide future actions to
improve the asset management planning with time. The resources allocated to this work need to be
balanced against the improvements gained compared to the allocation of resources to undertake
works and services. The improvement plan is included under Section 6 of this plan.
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 9 OF 48
2 Introduction
Eurobodalla Shire Council is a rural council based on the NSW south coast, covering an area of 3,403
square kilometres. It is located on over 110km of coastline, stretching from Durras Lake in the north
to Wallaga Lake in the south. Eurobodalla encompasses the catchments of the Clyde, Tomaga,
Deua/Moruya and Tuross Rivers as well as Wagonga Inlet. Eurobodalla includes the major towns of
Batemans Bay, Moruya and Narooma as well as a number of smaller towns and villages spread along
the coastal strip.
Known for its pristine waterways, the Eurobodalla region is a major tourist destination. Eurobodalla
has a resident population of 37,701 (2016), although more detailed analysis indicates a typical
population of approximately 50,000 at any given time due to visitation. The estimated population
during peak holiday periods is 120,000 creating significant challenges from an infrastructure
management perspective, particularly for roads, parking, water, sewer and high profile public
reserves.
The Eurobodalla Shire has had a number of significant growth periods since the 1970’s. Economic
activity has moved from agriculture to tourism based, whilst state forests and national parks account
for approximately 80% of the Shire’s land area. The gross domestic product of Eurobodalla is now
estimated at $1.3B with $408M of this related to the visitor market.
This Asset Management Strategy identifies the challenges that Council faces and provides a strategic
framework within which Council will work to manage its assets for the benefit of the community.
A key issue facing Council is the management of ageing infrastructure assets in need of renewal and/or
upgrade. Infrastructure assets such as roads and stormwater drains present particular challenges.
Many were constructed at the time of the original subdivision and are in declining condition, and/or
do not satisfy current functionality and/or capacity requirements.
To ensure a sustainable future Council has implemented a strong regime of infrastructure asset
planning and maintenance management aligned to long term financial plans to effectively allocate
limited resources to sustain and where necessary, improve its infrastructure assets. This includes
addressing the outstanding list of infrastructure renewal through innovative strategies such as
differentiating between short lived and long-lived infrastructure assets in combination with taking a
longer term financial planning.
There is however also a demand for new and improved services which add to the challenges in
planning and financing infrastructure assets to deliver the social, economic and environmental
outcomes sought by the community.
Council must therefore weigh up the benefits of any new infrastructure assets against the longer term
financial sustainability and affordability taking account of the ‘whole of life costs’ including financing,
maintenance, operating and replacement costs. It should also pursue well planned growth to better
utilize and support existing infrastructure which has capacity to service a greater permanent
population. Council will need to make strategic decisions on infrastructure to help drive this growth
and deliver social, economic and environmental outcomes.
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An example of this is the development of the Mackay Park Precinct. Council is currently working
through the process of determining solutions for the Mackay Park Precinct which will to have an
impact going forward and The Asset Management Strategy should be reviewed once an outcome is
determined.
2.1 Community Infrastructure and Operational Assets
Eurobodalla’s extensive asset portfolio includes;
Infrastructure including roads, bridges, carparks, pathways and stormwater drainage,
Community & operational buildings such as libraries, community centres, public toilets and public
halls,
Recreational assets including sporting fields, parks and reserves, skate parks and netball facilities,
Marine infrastructure such as wharves and jetties, boat ramps and ocean rockwalls,
Water and sewer assets including distribution and collection mains, treatment plants and
reservoirs.
Waste Services
The proportion of infrastructure assets (based on Gross Replacement Costs) in each of the Asset
Management groups is shown in Figure 2.1 below. Further details are shown in Section 4.2.
Figure 2-1 Distribution of Asset Groups by Gross Replacement Cost (Source: 15/16 SS7)
These infrastructure assets under Council’s care and control, directly and indirectly impact our social
and economic well-being and the environment in which we live. This includes risks to our community’s
health and safety, the desirability of Eurobodalla as a place to live, work and invest, and social equity
outcomes across Eurobodalla.
Careful and strategic management of these infrastructure assets in the context of our long term
financial plan is required to ensure our infrastructure delivers the required services within the limited
Community & Operational
Facilities14%
$120.55M
Transport69%
$605.05M
Marine1% - $8.89M
Waste Services1% - $6.25M
Stormwater11%
$95.81M
Recreational Facilities
5% - $44.1M
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resources available to Council. The NSW and Australian Government legislative framework must also
be considered, with many minimum requirements to be met.
Often Council will need to make decisions on priorities taking account of the outcomes sought by the
current community, yet with a view to the intergenerational equity. It is critical that our Council and
community, leaves a positive legacy, rather than a debt for our children.
This Asset Management Strategy details proposals for the management of infrastructure assets in the
six major Asset Management Groups (Transport, Stormwater, Community and Operational Facilities,
Recreational Facilities, Marine and Waste Services) only. The Gross replacement cost of these six asset
groups is about $880M with a written down value of $606M.
It should be noted that these Asset Management Groups do not necessarily follow the financial reporting groups of Council’s annual financial reporting. These asset groups are for asset management purposes only.
Water and Sewer are not considered further in this version of the Asset Management Strategy as these infrastructure assets are managed through the ‘Integrated Water Cycle Management Strategy and Strategic Business Plan’ adopted by Council at its Ordinary meeting on 13 December 2016. http://www.esc.nsw.gov.au/inside-council/community-and-future-planning/strategies/integrated-water-cycle-management/Integrated-Water-Cycle-Management-Strategy.pdf
2.2 Goals and Objectives of Asset Management
The Local Government Act 1993, Chapter 13, Part 2, Section 403, clauses 1 and 2 requires that ‘a
council must have a long-term strategy (called its Resourcing Strategy) for the provision of the
resources required to implement the strategies established by the community strategic plan that the
council is responsible for. The Resourcing Strategy is to include long-term financial planning, workforce
management planning and asset management planning’.
This Asset Management Strategy is in response to the above requirement and sets the broad framework for undertaking Asset Management in a structured and coordinated way, outlines why and how Asset Management will be undertaken and provides key principles that underpin Asset Management at Eurobodalla Shire Council.
In resourcing the implementation of Council’s Community Strategic Plan – One Community, this Asset Management Strategy shows how the Council’s existing asset portfolio will contribute to the service delivery requirements of the community both now and into the future. In particular it;
Sets out the affordable level of asset service provision over the next 10 years, given projected available funding,
Outlines how the Council’s assets will be effectively managed to achieve agreed levels of affordable service,
Outlines the risks associated with the provision of an affordable level of service and how they will be responsibly managed,
Outlines the requirements to ensure this Asset Management Strategy is achieved including implementation of an Asset Management Improvement Program that details the tasks required to achieve an appropriate level of asset management maturity,
Ensures the integration of the Council’s Asset Management with its long term Community Strategic Plan – One Community, Resourcing Strategy and four-year Delivery Program.
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 12 OF 48
2.3 Integrated Planning and Reporting Framework
A new planning and reporting framework for all Councils in NSW was introduced in 2010. The
Integrated Planning and Reporting Framework, is an integrated framework which ensures that
Councils take a longer term approach taking account of the whole of life costs of infrastructure assets,
and that Councils are reflecting community aspirations in the work they do.
The Integrated Planning and Reporting framework consists of a Community Strategic Plan, a four year
Delivery Program and one year Operational Plan (or budget). These are accompanied by a Resourcing
Strategy consisting of a Long Term Financial Plan, Asset Management Strategy and Workforce
Management Plan consistent with the direction set by the elected Council for the four-year term.
Importantly, this Asset Management Strategy is consistent with the Long Term Financial Plan.
To ensure Council has reflected the community aspirations, extensive community engagement has
been undertaken to develop Council’s Community Strategic Plan, Delivery Program and Operational
Plan. This culminated in Council adopting these plans as follows:
i) One Community Eurobodalla Community Strategic Plan 2017 adopted by Council at the
meeting held 13 June, 2017. The adopted CSP is available on Council’s web-site at:
http://www.esc.nsw.gov.au/inside-council/community-and-future-planning/community-
strategic-plan
ii) Delivery Program 2017-21 & Operational Plan 2017-18 adopted by Council at the meeting
held on 27 June, 2017. The adopted DP/OP is available on Council’s web-site at:
http://www.esc.nsw.gov.au/inside-council/community-and-future-planning/delivery-
program-and-operational-plan
This Asset Management Strategy takes account of the direction set by the current Council. It is intended that this Asset Management Strategy be updated on an annual basis to support the activities and decision making of Eurobodalla Shire Council into the future.
A more significant review will be undertaken every four years following each election of a new Council to take account of the strategic direction established by each new Council in developing the Community Strategic Plan and the associated four-year Delivery Program.
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 13 OF 48
Figure 2-2 Integrated Planning and Reporting Framework
The Integrated Planning and Reporting amendments to the Local Government Act contain ten
essential elements which must be included within the Asset Management Planning component of the
Resourcing Strategy. Council, through this Asset Management Strategy and other Asset Management
documentation, has achieved compliance with the legislative requirements of all ten essential
elements.
2.4 Office of Local Government – Financial Ratios
The Office of Local Government has overseen the NSW Government’s Fit for Future program.
Council submitted a Fit for Future Improvement Proposal in June 2015. This proposal was underpinned
by the sound long term financial and infrastructure planning already in place
Eurobodalla Shire Council has been assessed as 'fit', having sufficient scale and capacity to operate as
a stand-alone council.
Council was assessed against seven benchmarks when being considered as Fit For Future. The
benchmarks show how Council works towards long term sustainability.
Scale and Capacity
Council must demonstrate that it has strong organisational and regional capacity to mobilise resources
to engage effectively across community, industry and government.
Financial Sustainability
Council must generate sufficient funds over the long term to provide the agreed level and scope of
services and infrastructure for communities, as identified through the Integrated Planning and
Reporting process.
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Benchmarks used to measure financial sustainability are:
1. Operating ratio: indicates capacity to meet ongoing operating expenditure requirements.
2. Own source operating revenue ratio: Councils with higher own source revenue have greater
ability to control their own operating performance and financial sustainability.
3. Infrastructure renewal ratio: measures whether Council's assets are deteriorating faster than
they are being renewed and indicates whether Council's infrastructure backlog is likely to
increase.
Infrastructure and Service Management
Benchmarks used to measure infrastructure and service management are:
4. Infrastructure backlog ratio: measures how effectively Council is managing its infrastructure.
5. Asset maintenance ratio: measures whether Council is spending enough on maintaining its
assets.
6. Debt service ratio: indicates whether Council is using debt wisely to share the lifelong cost of
assets and avoid excessive rate increases.
Since the Fit for Future assessment, the Office of Local Government has introduced a new
infrastructure ratio. This applies from the 2016-17 Annual Financial Statements and Council will be
required to report on the cost to bring assets to agreed service level ratio. This ratio will provide a
snapshot of the proportion of outstanding renewal works compared to the total gross replacement
value of infrastructure assets under Council’s care and stewardship. This ratio is reported along with
other in its annual financial statements, in particular, Special Schedule 7 (SS7) and has been mandated
from 2017-18. This new ratio may in time replace the Infrastructure Backlog Ratio and is seen as more
valuable in aiding collation of the future infrastructure funding need.
Efficiency
Council must provide efficient service and infrastructure delivery, achieving value for money for
current and future ratepayers.
The benchmark used to measure efficiency is:
7. Real operating expenditure per capita: indicates how well Council is utilising economies of
scale and managing service levels to achieve efficiencies.
This benchmark can be affected by a range of factors outside of the efficiency of undertaking works.
For example, changes in population will obviously impact the ratio. Eurobodalla has a high non-
resident population, with 38% of landowners identified as living outside of Eurobodalla. The efficiency
ratio is measured based on the permanent population measured by the Bureau of Statistic which
excludes a large percentage of the non-resident population.
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 15 OF 48
Fit for Future Improvement Proposal
Council's Fit for the Future Improvement Proposal explains how it will maintain and improve Council's
performance against all seven Fit for the Future benchmarks.
In implementing its Improvement Action Plan, Council will:
support economic growth and development through a new Integrated Economic Growth
and Development Strategy
collaborate with our community to review services as part of the Integrated Planning and
Reporting process
implement a prioritised renewals funding strategy to improve performance against the
Building and Infrastructure Asset Renewal and Infrastructure Backlog ratios
redirect surplus funds into a new restricted infrastructure renewals fund and an increased,
targeted renewals program
strengthen and diversify Council's revenue streams to continue to meet the Own Source
Revenue Ratio and achieve modest operating surpluses to be redirected into infrastructure
renewal
further increase our capacity and focus on long term planning and organisational sustainability
invest in improved community relationships through the development of a robust community
engagement framework
advocate for improved funding and financing arrangements, to meet community service and
infrastructure needs.
Table 2.1 below shows Council’s performance against the mandatory benchmarks compared to the
starting position in 2013-14. The ratios shown relate to general fund assets only and are an average
over three years (a requirement of Fit for The Future reporting). Infrastructure Asset Performance
Ratios for 2015-16 only are shown in Section 4.6 – Asset Performance Ratios.
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 16 OF 48
Ratio Benchmark 2014/15
result
2015/16
result
2016/17
projected
2017/18
projected
Meet benchmark
Operating performance
ratio
Greater than or equal to break-even (0.00%)
average over 3 years
0.047 0.03 0.07 0.06
meet
Own source revenue
ratio
Greater than 60% average over 3 years 77.47% 68.70% 65.19% 66%
meet
Building and
infrastructure asset
renewal ratio
Greater than 100% average over 3 years 54.14% 119.71% 95.13% 124%
meet
Infrastructure backlog
ratio
Less than 2% 8.73% 8.51% 8.60% 6.91%
improving
Asset maintenance ratio Greater than 100% average over 3 years 100% 100% 100% 100%
meet
Debt service ratio Greater than 0% and less than or equal to 20%
average over 3 years
2.55% 6.83% 8.33% 8%
meet
Real operating
expenditure per capita
Decrease over time 0.95 1.49 1.51 1.42
meet
Agreed Service Level
Ratio
Decrease over time 3.35% 5.85% 5.85% 4.87%
improving
Table 2-1 Fit For The Future benchmarks – General Fund (Source: General Purpose Financial Statements 14-15, 2014-15 Annual Report, 2015-16 Annual Report, 2014-15 SS7, 2015-16 SS7, DPOP 16-17, 2017-21 DP, 2017-18 OP)
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 17 OF 48
3 Management of Councils Assets
3.1 Asset Management Policy
The Asset Management Policy aims to ensure that Council’s assets are managed effectively to deliver
the level of service our community is prepared to pay for in the short, medium and long term taking
account of the social, economic and environmental consequences of Council’s decisions.
The policy aims to promote an integrated framework for dealing with the management, renewal and
upgrading of infrastructure assets and to ensure consistency and fairness in the manner in which the
Council deals with infrastructure assets.
Following public exhibition of the draft policy, Council adopted a new Asset Management Policy at the
meeting held on 25 July, 2017. The policy is available on Council’s web-site at:
http://www.esc.nsw.gov.au/inside-council/council/council-policies
This Asset Management Strategy is developed in accord with the Asset Management Policy. The
Strategy enables Council to show how its asset portfolio will meet the affordable service delivery
needs of the community in the future and ensure the integration of Council’s asset management with
its long term strategic and financial plans.
3.2 Managing Our Assets
Council’s long term financial plan outlines the funding required to sustain Council’s existing
infrastructure assets and agreed new infrastructure assets outlined in Council’s various strategic plans.
The funding available to Council from rate income is subject to the constraints of rate pegging, which
is set annually by the Independent Pricing and Regulatory Tribunal (IPART). The rate pegging amount
is often set at a rate below the real cost increase of maintenance, operation and capital construction
increases which are influenced by aspects such as the cost of materials and energy, labour, increasing
community expectations and increasing standards (e.g. work health and safety, environmental
approvals, disability inclusion). These latter items are all worthy pursuits to improve outcomes
however this has increased the cost of undertaking works.
To meet the needs of our community, Council must provide for the whole of life costs of all
infrastructure assets under its care in both the short and long term including the cost of;
i) Adequate provision for maintenance and operations including inspections, recurring and
planned maintenance, repairs, energy, water and the like,
ii) Capital renewal works to replace asset components in poor or very poor condition,
iii) Capital renewal or upgrade works to improve the functionality of assets to meet
community need (e.g. accessible buildings),
iv) Capital upgrades or new infrastructure to meet current and future capacity needs (e.g. a
new by-pass road or a new building),
v) Disposal of infrastructure assets at the end of their useful life to eliminate any future
liability costs, where required.
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 18 OF 48
Sound financial management requires that Council considers the financing of the whole of life costs
of existing assets as a priority over the construction of new infrastructure assets. It is important to
recognise that as soon as an asset is built, the maintenance, operation and annual depreciation costs
impact Council’s financial Operating Statement (the budget).
The proper care and maintenance of infrastructure assets also has a significant impact on the risk to
the community, particularly community safety. Council is required to demonstrate the sound
management of infrastructure assets to mitigate these risks to the community and Council, and to
ensure legislative compliance, particularly with the Civil Liability Act, 2002 and Roads Act, 1993.
Council has adopted sound asset management principles for many years developing and
implementing;
i) key infrastructure strategies, studies, plans, point score systems and developer
contribution plans to identify and prioritise capital works,
ii) sound maintenance management systems in line with appropriate risk management
policies and frameworks.
This has been further enhanced through the development of formal asset management plans for the
following infrastructure assets categories;
i) Transport infrastructure such as local and regional roads, bridges, pathways, car parks,
bus stops and ancillary infrastructure,
ii) Stormwater infrastructure,
iii) Marine infrastructure such as boat ramps, wharves, jetties and rockwalls,
iv) Recreation facilities such as playing fields, reserves and aquatic centres,
v) Community (such as halls and libraries) and Operational Facilities (such as the main
administration office and depots),
vi) Waste facilities (under development).
To provide for the sound management of our infrastructure assets Council has implemented a wide
range of actions including:
i) Fully funding the required maintenance and operation at the agreed level of service,
ii) Fully funding the annual infrastructure renewal cycle for short lived assets (i.e. useful life
less than 20 years) to progressively lower the overall cost to bring assets to a satisfactory
condition over time. For instance, resealing bitumen roads or replacing the carpet in a
building,
iii) Budgeting for capital works to renew or rehabilitate long lived assets (i.e. useful life
greater than 20 years) typically taking account of risks (e.g. replacement of a structural
road pavement in poor condition),
iv) Prudent use of loan funding, typically for infrastructure assets with a long useful life (e.g.
a new library exhibition center),
v) Partnering with Government through grants to fund infrastructure replacement and/or
upgrades (e.g. replacing a timber bridge with a new concrete bridge capable of carrying
higher productivity vehicles),
vi) Adjusting the level of service in consultation with the community (e.g. removing one of
the two halls in Tuross Head to enable a higher quality building that provides an accessible
inclusive community space),
vii) Strategic review of assets to optimise the asset portfolio under Council’s care including
clustering of assets, improving what we have instead of building new facilities and/or
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 19 OF 48
removal of poorly positioned assets (e.g. as per the Recreation and Open Space Strategy
2010),
viii) Recycling of assets no longer required (e.g. sale of land to fund new and upgraded
recreation infrastructure as per the adopted Recreation and Open Space Strategy),
ix) Integration of works to optimize re-use of materials (e.g. re-use of old road pavement
materials to build components of new assets),
x) Use of new technologies (e.g. re-lining of pipes in-situ rather than digging them up to
replace the pipe, where appropriate),
xi) Implementation of targeted risk management strategies (e.g. higher inspection regime,
signposting or temporarily closing assets in poor condition),
xii) Improving asset management (e.g. by progressively improving the quality of asset data,
condition assessments and the like),
xiii) Identifying new sources of income other than rates (e.g. provision of a gym at an aquatic
centre or through increased utilisation with the associated payment of fees),
xiv) Actively pursuing planned growth to increase the number of ratepayers and people
utilising the capacity of existing infrastructure assets (more people paying for the cost of
infrastructure assets),
xv) Ensuring land use planning optimises the infrastructure assets required to support
development,
xvi) Requiring developers to build appropriate infrastructure at their cost and/or pay
appropriate developer contributions as part of the development approval.
The strategies adopted by Council are considered best practice and many have now been adopted by
the sector as outlined within current guidelines produced by the Office of Local Government.
The outcomes of this Asset Management Strategy are guided by Council’s Community Strategy Plan.
The funding flowing from this Asset Management Strategy have been incorporated into Council’s
2017-21 Delivery Program, 2017-18 Operational Plan and the 2017-26 Long Term Financial Plan.
Rate variation
Council’s application for a rate variation of 6.5% per annum for three years cumulative and on-going,
including the rate peg amount, was approved by IPART in May 2015. Council adopted the rate variation
at the 23 June 2015 Council Meeting for incorporation in the 2015-16, 2016-17 and 2017-18 budget.
The rate variation significantly improved Council’s financial resources sustain infrastructure assets into
the future. However, Council is still required to find significant savings and efficiencies, and pro-
actively pursue grants to deliver the outcomes the community seeks. Council’s Long Term Financial
Plan includes additional allocations of funding toward infrastructure asset renewal from 2019-20.
Council will need to be mindful of the whole of life cost impacts of any new infrastructure built,
including that ‘gifted’ through development and/or by community groups, to ensure it weighs up the
cumulative long-term impacts of its decisions on Council’s financial sustainability.
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 20 OF 48
4 State of the Assets
The infrastructure assets Council provides for the community have an estimated gross replacement
value of $880.65M (exclusive of Water and Sewer) based at 30 June, 2016.
The following table provides detailed information on;
What assets support the service,
A description of the asset and how they deliver related services,
Financial information including gross replacement cost (GRC) and written down values (WDV).
The state of the assets is also represented by other indicators, including;
The consumption of assets indicating their remaining service potential,
The overall status of infrastructure assets for condition, capacity/utilisation and functionality.
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 21 OF 48
4.1 General Fund Infrastructure Assets
Service Assets supporting the service Description Replacement
value (GRC)
Carrying
Value (WDV)
Transport
57.5km of regional roads
529.6km of local sealed roads
419km of local unsealed roads
22 concrete/Steel bridges
38 timber bridges
54 major culverts
22.69km of road drainage
67 bus shelters
151 carparks
39.3km of shared paths
66.9km of footpaths
The transport network enables the safe and efficient movement of people and
goods into and throughout Eurobodalla. The network provides for all modes of
transport from pedestrians, wheelchairs and bicycles to family cars, buses and
transport operators.
Transport infrastructure includes sealed and unsealed urban and rural roads,
bridges, causeways, culverts, pathways, footpaths, car parks, bus shelters and
traffic management facilities such as roundabouts, traffic lights and signs.
Council also works in partnership with Roads and Maritime Services and receives
grant funding to maintain the Kings Highways, one of the main routes into and out
of Eurobodalla.
$605.05M $428.77M
Stormwater
7664 stormwater pits
179.2km of stormwater pipes
3.2km of box culverts
476m of open channel
904 headwalls
1 detention basin
21 gross pollutant traps
8 quality control basins
28 tide flaps
The stormwater network collects, controls and manages stormwater. It addresses
safety, risk and amenity issues, protects property and maintains the quality of our
waterways by managing discharge.
$95.81M $71.71M
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 22 OF 48
Service Assets supporting the service Description Replacement
value (GRC)
Carrying
Value (WDV)
Buildings
Community Buildings
o 3 libraries
o 2 community centres
o 3 after-school care
o 4 surf clubs
o 7 public halls
o 16 sporting facilities
49 public toilets
26 emergency services buildings
1 botanic gardens centre
1 race course
Operational Buildings
o 1 administration
o 3 depots
o 13 cemeteries
o 1 saleyards
o 1 pound
o 5 telecommunications
towers
o 2 tourist centres
1 airport
3 swimming pool complexes
1 caravan park
3 campgrounds
Buildings enable residents and visitors to participate in activities and events within our community. They also provide for commercial and Council operations.
$120.55M $66.09M
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 23 OF 48
Service Assets supporting the service Description Replacement
value (GRC)
Carrying
Value (WDV)
Recreation
16 sporting facilities
151 parks and reserves
5 skate parks
4 netball facilities
The recreation network enables community and visitors to actively enjoy
Eurobodalla’s natural areas and participate in active outdoor activities and events.
Facilities are used for activities such as group sports, events, markets, play and
exercise.
$44.10
million
$27.87 million
Marine
20 wharves, jetties, pontoons and
piers
Boat ramps
o 22 concrete
o 2 gravel
15 launching facilities (informal)
10 wash down facilities
25 fish cleaning tables
33 river rockwalls
3 ocean rockwalls
Marine facilities provide access to Eurobodalla’s waterways for recreation, tourism
and commercial users. They also assist in managing and protecting sensitive
riverbank and foreshore environments.
$8.89 million $5.71 million
Waste
Services
2 waste management facilities
1 waste transfer station
Our waste facilities enable the efficient and sustainable management of waste within Eurobodalla. They provide handling and management of waste to maintain amenity and meet environmental compliance and legislative requirements.
$6.25 million $5.52 million
Total Replacement Value of General Fund Assets $880.65
million
$605.67
million
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 24 OF 48
4.2 Asset Consumption Ratio
The asset consumption ratios of Council’s assets (average proportion of ‘remaining service potential’
left in assets, being the WDV divided by GRC) are shown in Table 4.1 – Asset Consumption Ratios.
Asset Class Gross Replacement Cost
($M)
Written Down Value
Cost ($M)
Asset Consumption
(% life remaining)
Transport $605.05 $428.77 71%
Community &
Operational Facilities
$120.55 $66.09 55%
Stormwater $95.81 $71.71 75%
Recreation $44.10 $27.87 63%
Marine $8.89 $5.71 64%
Waste Services $6.25 $5.52 88%
Total $880.65 $605.67 Average all assets = 70%
Table 4-1 Asset Consumption Ratios (Source: 15/16 SS7)
The data shown in Table 4.1 demonstrates, that on average, when considering all of Council’s
infrastructure assets that they have consumed around 30% of their original construction/purchase
costs. This indicates that Council is managing its assets effectively and that it ensures that the majority
of assets are in good to excellent condition. Further details regarding asset consumption can be found
in individual asset management plans. It is worth noting that this information however does not
indicate the current renewal need which must be based on further detailed analysis of the specific
infrastructure assets, and infrastructure assets components, requiring renewal and/or upgrade (refer
to Table 4.3).
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 25 OF 48
4.3 Asset Condition/Functionality/Capacity and Utilisation
Levels of service and community satisfaction are fundamentally linked to asset physical condition
(quality), asset functionality and asset capacity/utilisation. Figure 4.1 below shows the value (based
on gross replacement cost) of the infrastructure assets in various conditions.
Figure 4-1 Asset Condition by Gross Replacement Value (Source: 2015-16 SS7)
Substantial work has be done in the transport asset class in determining required functionality and
capacity upgrades going forward. These have been incorporated into Council’s Long Term Financial
Plan and guide grant applications.
There are limited functionality and capacity upgrades required in other assets classes however upon
completion of the Recreation and Open Space Strategy review further work is required to quantify
these requirements.
Functionality and capacity upgrades are also considered at the time of asset renewal works which
enables upgrades to be undertaken in a more cost effective manner.
Council will need to monitor rates of development which will also drive the need and location of
upgrades.
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 26 OF 48
4.4 Community Research
Quadrant analysis
Quadrant analysis is a useful tool for assisting planning future directions. This compares the
community’s views on the importance and satisfaction of various infrastructure assets under Council’s
care and stewardship.
Micromex Research undertook community research in April 2016 surveying a random and
representative sample of the Eurobodalla community to measure the satisfaction and views on
importance on a wide variety of service delivery areas (total 49). Table 4.2 highlights responses against
the service delivery areas that relate to infrastructure assets.
The higher the differential between importance and satisfaction, the greater the difference is between
the provision of that service by Council and the expectation of the community for that service/facility.
Performance Gap Ranking
Infrastructure Assets Importance Mean
Satisfaction Mean
Performance Gap
2 Capacity of infrastructure, including traffic management and congestion at peak times
4.21 2.54 1.67
3 Provision and maintenance of sealed roads 4.53 2.96 1.57
6 Provision and maintenance of unsealed roads
4.23 2.79 1.44
9 Provision and maintenance of public toilets 4.56 3.27 1.29
14 Provision and management of parking facilities
4.21 3.11 1.10
18 Appearance of public spaces, such as town centres
4.32 3.28 1.04
20 Provision and maintenance of stormwater and flood mitigation infrastructure
4.37 3.36 1.02
25 Provision and maintenance of footpaths and shared pathways
4.37 3.46 0.91
26 Accessibility of public facilities and places 4.26 3.40 0.85
29 Road safety programs 4.17 3.41 0.76
31 Provision and maintenance of pools and aquatic facilities
3.97 3.40 0.57
32 Provision and maintenance of parks and playgrounds
4.28 3.73 0.56
39 Provision of street lighting 4.09 3.65 0.44
43 Provision and maintenance of bus shelters 3.81 3.50 0.31
44 Provision and maintenance of community centres and halls
3.99 3.73 0.26
45 Provision and maintenance of sports grounds and sporting amenities
3.99 3.75 0.24
46 Library services including buildings and lending collections
4.17 4.11 0.06
47 Provision and maintenance of boating facilities such as boat ramps and fish cleaning tables
3.65 3.69 -0.04
Table 4-2 Micromex 2016 Performance Gap Ranking for Infrastructure Assets (Source: ESC Micromex Community Survey, April 2016)
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 27 OF 48
The following quadrant analysis looks at the cumulative responses to questions posed about the
satisfaction and importance of infrastructure. For clarity, the results have been placed into two charts;
the first dealing with Council’s largest asset group, our transport infrastructure, and the second chart
deals with all other infrastructure.
Figure 4-2 Quadrant Analysis of Transport Infrastructure
(Source: ESC Micromex Community Survey, April 2016).
Figure 4-3 Quadrant Analysis of 'Other Assets' (Source: ESC Micromex Community Survey, April 2016).
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 28 OF 48
Micromex provided the following interpretations of the quadrants.
Attributes in the top left quadrant, IMPROVE, such as ‘traffic congestion’, ‘sealed roads’, ‘unsealed
roads’, ‘public toilets’, ‘stormwater’ and ‘appearance of public spaces’ are key priorities in the eyes of
our community.
Attributes in the top right quadrant, MAINTAIN, such as ‘pathways’, ‘accessibility’, ‘parks and
playgrounds’, are our core strengths. Council will maintain and attempt to improve its position in these
areas as they are influential and address community needs.
Attributes in the bottom right quadrant, COMMUNITY, such as ‘pools’, ‘sports grounds’, ‘community
centres and halls’, and ‘road safety’ are core strengths, but in relative terms they are deemed less
overtly important than other directly obvious areas. However, the occupants of this quadrant tend to
be the sort of services and facilities that deliver to community livability, i.e. make it a good place to
live and will often be in higher demand for improvement by user groups.
Specific Strategic Infrastructure Planning Engagement
Council has undertaken specific engagement in developing various strategic infrastructure plans. The
associated community engagement typically includes a greater level of input from those using or
directly impacted by the infrastructure assets. It is common for feedback from users to be more
specific to user needs. These considerations also need to be considered by Council in making decisions
about the infrastructure to be provided.
Council has the following strategic infrastructure plans in place:
i) Northern Area of Eurobodalla Transport Study March 2011
ii) Batemans Bay Traffic and Transport Study 2010
iii) Batemans Bay Parking Study 2011
iv) Moruya and Narooma Parking Study 2011
v) Eurobodalla Pathways Strategy June 2017
vi) Recreation and Open Space Strategy 2010 (currently under review in 2017-18)
vii) Asset Management Plans
These strategies and studies and the approved rate variation identify the future capital works required
to meet community need over the next 20-year horizon. These strategies and studies will be updated
considering the rate of change and/or development at the appropriate time.
The development of strategies, plans and studies required significant community engagement prior
to adoption by Council. Council considered the outcomes of these strategies in developing and
adopting the 2017-21 Delivery program and 2017-18 Operational Plan.
To achieve many of the additional new capital works outlined in these strategies, plans and studies,
Council actively pursues grant funding, appropriate developer and landowner contributions. Council
works closely with community groups to deliver infrastructure services that otherwise could consume
Council’s own source revenue alone. This often means the precise timing of works is dependent upon
current NSW and Australian Government grant programs and/or other funding availability.
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 29 OF 48
4.5 Asset Life Cycle Costs and Financial Status
Figure 4.4 shows the funding required to manage Council’s infrastructure assets for the next 10 years.
A large renewal component in 2017-18 and 2018-19 can be seen and is due to an injection of revenue
from secured grant funding and the approved rate variation. 2017 and 2018 also shows a large capital
upgrade/new component and represents currently secured grant funded projects including $6.5M in
election commitments from the Federal Government. The step up in renewals from 2019-20 onwards
is attributable to the injection of renewal funding associated with Council’s Renewal Funding Strategy.
Figure 4-4 LTFP Expenditure - All Asset Classes
4.6 Asset Performance Ratios
Section 2.4 introduces Fit for Future and its associated reporting ratios. The Fit for Future ratios are
the average ratio over the preceding 3 years.
Asset performance ratios, as reported in Special Schedule 7 of Council’s Annual Financial Reports, are
for the past year and are an indicator on how well Council is funding appropriate care of infrastructure
assets. The debt/service ratio and operating position also provide an indication of Council’s ability to
borrow to fund new and upgraded capital works.
Special Schedule 7 uses five ratios to report on infrastructure assets annually to the Office of Local
Government including:
1. Infrastructure renewal ratio – to assesses the rate of renewal expenditure compared to the annual
depreciation of infrastructure assets
2. Infrastructure backlog ratio – shows what proportion the backlog is against the total value of a
infrastructure assets
3. Asset maintenance ratio – compares actual to required cost of operating and maintaining
infrastructure assets
$-
$5
$10
$15
$20
$25
$30
$35
$40
17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27
LTFP
Exp
end
itu
re Mill
ion
s
Financial Year
All Infrastructure Assets
Maintenace Renewal Upgrades/New
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 30 OF 48
4. Cost to bring assets to agreed service level – this ratio is mandatory from 2017-18 onwards. This
ratio provides a snapshot of the proportion of outstanding renewal works compared to the total
gross replacement value of infrastructure assets
5. Capital expenditure ratio – assesses the extent to which a Council is expanding its asset base
through capital expenditure on both new assets (including gifted) and the replacement and
renewal of existing assets.
Table 4.3 shows Council’s Asset Performance Ratios for June 30, 2016 and only includes those assets
funded by the General Fund. Whilst a consolidated ratio is reported on all assets in Special Schedule
7, including water and sewer, they have been omitted from this document.
Infrastructure Asset Performance Indicator Ratio for
June 30,
2016
Benchmark 2015/16
Performance
1. Infrastructure renewals ratio 119.71% Minimum >=100.00%
meet
2. Infrastructure backlog ratio 8.51% Maximum <2.00% improving
3. Asset maintenance ratio 1.0 Minimum >1.00
meet
4. Cost to bring assets to agreed service level 5.85% Yet to be set by OLG
5. Capital expenditure ratio 1.49 Minimum >1.10
meet
Table 4-3 Asset Performance Indicators – General Fund (Source: 15/16 SS7)
Council has consciously funded maintenance at the current level of service to ensure the Asset
Maintenance Ratio is maintained at the benchmark. Council is also fully funding the required annual
infrastructure renewal expenditure through a combination of funding sources including own source
revenue, low interest loans from the NSW Government, grants and contributions from other sources.
Council has adopted an approach to fully fund the average annual infrastructure renewal cycle of short
lived infrastructure asset components (e.g. reseals, resheeting, playgrounds, carpets and the like being
assets typically having a useful life less than 20 years). To achieve this Council has fully allocated grant
funding programs such as Roads to Recovery toward road and bridge renewal.
Council has also targeted larger scale works such as bridge replacements through use of loans and
grant funding programs significantly reducing the risk to the community and Council, as well as
removing these works from the outstanding renewal works. This has also resulted in addressing
capacity constraints allowing the opportunity for improved transport efficiency across the network.
This strategic approach will see the amount of outstanding renewal work further reduce steadily over
the next ten years, providing a safer and more sustainable network of transport and community
infrastructure assets.
This strategic approach also means that Council met all requirements under the Fit for Future analysis
contributing positively to the decision by the NSW Government to deem Eurobodalla Shire Council as
‘fit’.
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 31 OF 48
5 Asset Management Plan Dashboards
This section contains the ‘Asset Management Plan Dashboards’ relating to each of the major asset
groups. The dashboards are snapshots of relevant information on each of the asset groups. By
scanning the dashboard, you are provided with information about what the community sees as
important, the key programs for delivering the service, the linkage to the current Delivery
Plan/Operational Plan, what assets support the service, the annual funding available to deliver the
service, the longer-term lifecycle expenditure (10 years) and how sustainable the assets are. All of this
information is critical allowing informed decisions to be made on the management of Council’s $1.71
billion asset portfolio.
Detailed information on asset attributes, budgets, programs, condition, etc. can be found in the
associated Asset Management Plans. The information contained in each dashboard has been derived
from Council’s annual financial statements (Special Schedule 7), associated Asset Management Plans
and Council’s current Delivery Plan/Operational Plan.
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 32 OF 48
5.1 Transport Infrastructure Assets
Community Satisfaction Survey (April 2016)
Service/Facility Rank
of 49 Importance Satisfaction Gap
Traffic congestion 2 4.21 2.54 1.67
Sealed roads 3 4.53 2.96 1.57
Unsealed roads 6 4.23 2.79 1.44
Parking 14 4.21 3.11 1.10
Pathways 25 4.37 3.46 0.91
Road safety 29 4.17 3.41 0.76
Street lighting 39 4.09 3.65 0.44
Bus shelters 43 3.81 3.50 0.31
Key Transport Programs
Service Description: The transport service provides the
infrastructure like roads and paths that enables the
movement of people, vehicles and goods into and
throughout Eurobodalla. The following key transport
programs need to be continued to ensure the integrity of
a safe and reliable transport network.
Transport Maintenance Local Roads New Capital
Works Program
Road Safety Officer
Program
Bridges & Causeways
Maintenance
Reseal Program Bridges Renewal Program
Pavement Rehabilitation
Program
Bridges New Capital Works
Program
Gravel Resheeting Program Regional Road Operations
& Maintenance
Urban Roads Program Regional Roads Renewal
Program
Rural Roads Reconstruction
Program
Regional Roads New Capital
Works Program
Footpaths/Cycleways
Capital & Renewal Program
Kings Highway Routine
Maintenance Contract
Traffic Facilities Kings Highway Non-routine
Maintenance
Car Parks Kings highway Contracts
Works
Bus Shelters
Links to DP/OP
1. Strong Communities Desirable Lifestyle:
1.1.1.2 Provide road safety programs and activities
7. Connected and Accessible Places:
7.1.1.1 Partner with peak bodies to advocate for improved
and on-going funding programs for local transport
infrastructure.
7.1.1.2 Seek grant and other funding to sustain and improve
the local and regional transport network.
7.1.2.1 Build, renew and maintain the road network.
7.1.2.3 Provide traffic management planning.
7.1.2.5 Coordinate the Local Traffic Committee.
7.2.1.1 Build, renew and maintain pathway network.
7.2.1.2 Leverage existing funding to accelerate expansion of
the pathway network.
7.3.1.1 Advocate for improved public transport.
7.4.2.1 Work with key partners to advocate for the
progressive upgrade of the Princes and Kings Highway
Assets Supporting the Service
Sealed local roads 529.6km
Unsealed local roads 419km
Regional roads 57.5km
Bridges & major culverts 114
Causeways 19
Pathways 106.2km
Carparks 151
Bus shelters 67
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 33 OF 48
Transport Infrastructure Assets (cont.)
10 Year Projected Operating and Capital Expenditure
Current Condition
Data Confidence High Moderate Low
Budgeted Expenditure 17/18
$-
$2
$4
$6
$8
$10
Operations &Maintenance
Renewal New/upgrade
$ $5,327,397 $8,893,710 $9,232,614
Bu
dge
t Ex
pen
dit
ure
Mill
ion
s
Value of Transport Assets $605.05 million
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 34 OF 48
5.2 Stormwater Infrastructure Assets
Community Satisfaction Survey (April 2016)
Service/Facility Rank
of 49 Importance Satisfaction Gap
Stormwater 20 4.37 3.36 1.01
Budgeted expenditure 17/18
Key Stormwater Programs
Service Description: The stormwater network collects,
controls and manages stormwater. It addresses safety, risk
and amenity issues, protects property and maintains the
quality of our waterways by managing discharge.
Drainage Maintenance Drainage New Capital
Works
Drainage Renewals
Links to DP/OP
3. Protected and Valued Natural Environment
3.1.1.2 Manage lake openings
7. Connected and Accessible Places:
7.1.2.2 Build, renew and maintain the stormwater network
Current Condition
Confidence
in data
High Moderate Low
Value of Stormwater Assets
$95.81 million
Assets Supporting the Service
Pipes, culverts & channels 179.2km
Pits, headwalls & similar
structures
8,568
Tide flaps 28
Pollution control devices 29
Detention basins 1
10 Year Projected Operating and Capital Expenditure
$-
$200
$400
$600
$800
$1,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
LTFP
Exp
end
itu
re
Tho
usa
nd
s
Financial Year End
Stormwater
Maintenance Renewals Upgrades/new
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 35 OF 48
5.3 Community and Operational Facilities Infrastructure Assets
Community Satisfaction Survey (April 2016)
Service/Facility /49 Importance Satisfaction Gap
Public toilets 9 4.56 3.27 1.29
Accessibility of public
facilities and places
26 4.26 3.40 0.85
Provision of pools and
aquatic facilities
31 3.97 3.40 0.57
Provision & maint. of
community centres
and halls
44
3.99 3.73 0.26
Provision of
sportsgrounds and
sporting amenities
45
3.99 3.75 0.24
Library buildings 46 4.17 4.11 0.06
Key Community and Operational Facilities Programs
Service Description: Council provides a range of buildings
and facilities across the Shire for the community’s benefit
and usage that enable residents and visitors to participate
in community life. Council also has a number of facilities
that enables it to operate or undertake a limited range of
commercial activities.
Public halls and Rec.
buildings renewals
Swimming Pools - Capital &
Renewal
Botanic Gardens Swimming Pools Operations
Sporting Complex - Capital
& Renewal Works
Botanic Gardens New
Works
Other Sport & Recreation Cultural Projects
Sporting Complex
Amenities Mtce/Operation
Library Projects
Public Halls - Maintenance
& Operation
Public Toilets Maintenance
Community Centres -
Maintenance & Operation
Public Toilets Construction
Public Buildings - Capital &
Renewal
Other Public Amenities
Capital Projects
Public Safety Bushfire & Emergency
Services
Office/Depot/Support
Maintenance
Office/Depot/Support -
Capital & Renewal
Other economic services Other economic services -
capital & renewal
Links to DP/OP
1. Strong Communities, Desirable Lifestyles
1.3.2.4 Manage public swimming pools
2. Celebrated Creativity, Culture and Learning
2.1.1.1 Collaborate with strategic partners for creative arts
infrastructure and sector development
2.2.1.2 Provide and manage Out of School Hours and
Vacation Care centres and activities
2.2.2.3 Maintain and improve library buildings and
collections
7. Connected and Accessible Places
7.4.1.1 Operate and maintain the Moruya Airport
7.4.1.2 Commence implementation of stage 1 and 3 of the
Moruya Airport Master Plan
9. Innovative and Proactive Leadership
9.2.3.2 Provide depots and workshops
Assets Supporting the Service
Community buildings
including Libraries,
Community Centres & Halls
38
Public toilets 46
Emergency Services buildings 24
Botanic gardens 1
Moruya Racecourse 1
Operational buildings 26
Airport 1
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 36 OF 48
Community and Operational Facilities Infrastructure Assets (cont.)
Budgeted Expenditure 17/18
10 Year Projected Operating and Capital Expenditure
Current Condition
Confidence in data High Moderate Low
Value of Community and Operational Facilities Assets $120.55 million
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 37 OF 48
5.4 Recreational Facilities Infrastructure Assets
Community Satisfaction Survey (April 2016)
Service/Facility Rank Importance Satisfaction Gap
Appearance of
public spaces
18 4.32 3.28 1.04
Provision and
maintenance of
parks and
playgrounds
32
4.28 3.73 0.56
Provision and
maintenance of
sportsgrounds
45
3.99 3.75 0.24
Budgeted Expenditure 17/18
Key Recreation Programs
Service Description: The recreation network enables community
and visitors to actively enjoy Eurobodalla’s natural areas and
participate in active outdoor activities and events. Facilities are used
for activities such as group sports, events, markets, play and
exercise.
Sporting complex – capital &
renewal works
Parks, reserves & ovals
maintenance
Parks new works
Link to DP/OP
1. Strong Communities, Desirable Lifestyle
1.3.2.2 Review the recreation and open space strategy
1.3.2.3 Build, renew operate and maintain recreation and
community facilities
Current Condition
Confidence in
data
High Moderate Low
Value of Recreation Assets $44.1 million
Assets Supporting the Service
Sporting facilities 27
Parks & Reserves 103
Skate parks 5
Netball facilities 4
10 Year Projected Operating and Capital Expenditure
$-
$1
$2
$3
$4
2017201820192020202120222023202420252026LTFP
Exp
end
itu
re
Mill
ion
s
Financial Year End
Recreation Assets
Maintenance Renewals Upgrades/new
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 38 OF 48
5.5 Marine Infrastructure Assets
Community Satisfaction Survey (April 2016)
Service/Facility Rank Importance Satisfaction Gap
Provision and maintenance of boating facilities such as boat ramps and fish cleaning tables
47 3.65 3.69 0.04
Budgeted Expenditure 17/18 Key Marine Programs
Service Description: Marine assets provide access to Eurobodalla’s waterways for recreation, tourism and commercial users. They also assist in managing and protecting sensitive riverbank and foreshore environments.
Boatramps, wharves and jetties maintenance
Boatramps, wharves and jetties capital renewals
Boatramps, wharves and jetties new capital works
Link to DP/OP
7. Connected and Accessible Places:
7.4.3.1 Advocate for NSW Government boating and marine infrastructure and ongoing dredging of navigation channels 7.4.3.2 Seek additional funding for local boating and marine infrastructure 7.4.3.3 Maintain, renew and upgrade boating and marine infrastructure
Current Condition
Confidence in
data
High Moderate Low
Value of Marine Assets $8.89million
Assets Supporting the Service
Wharves, jetties and pontoons 20
Boat ramps and launching facilities 39
Fish cleaning tables 25
Riverbank structures 33
Ocean rockwalls 3
Shark nets 1
10 Year Projected Operating and Capital Expenditure
$-
$500
$1,000
$1,500
$2,000
2017201820192020202120222023202420252026
LTFP
Exp
end
itu
re
Tho
usa
nd
s
Financial year End
Marine Assets
Maintenance Renewals Upgrades/new
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 39 OF 48
5.6 Waste Services Assets
Community Satisfaction Survey (April 2016)
Service/Facility Rank Importance Satisfaction Gap
Kerbside
collection
32 4.61 4.05 0.56
Budgeted Expenditure 17/18
Key Waste Programs
Service Description: Responsible for waste collection,
disposal, recycling, illegal dumping, infrastructure and
education. Providing sustainable waste services and
infrastructure for the community. Participating in regional
collaboration and develop strategic partnerships. Delivering
community education on waste minimisation.
Waste management facility
operational & maint. costs
Waste management facilities
capital renewal costs
Assets Supporting the Service
Waste Management Facilities 2
Transfer Stations 1
Link to DP/OP
4. Sustainable living:
4.2.1.1 Build, renew, operate and maintain waste landfill sites
and transfer stations,
4.2.1.2 Manage kerbside collection,
4.2.1.3 Undertake annual hazardous waste collection,
4.2.2.1 Review the Waste Strategy
4.2.2.2 Participate in regional collaboration and develop
strategic partnerships
4.2.2.3 Deliver community education on waste minimisation,
4.2.2.4 Utilisation of glass sand product in Council operations,
4.2.3.1 Coordinate Clean Up Australia day activities,
4.2.3.2 Investigate and manage illegal dumping incidents.
Current Condition
Confidence in
data
High Moderate Low
Value of Waste Assets $6.25 million
10 Year Projected Operating and Capital Expenditure
$-
$1
$2
$3
$4
$5
$6
$7
Mill
ion
s
Financial Year
Operations Maintenance Renewals
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 40 OF 48
6 Asset Management Improvement Plan
6.1 Asset Management Planning elements
The following commentary discusses each of the eleven asset management planning elements.
Strategic asset management planning
This Asset Management Strategy 2017 replaces the previous Asset Management Strategy 2011.
Council already links its infrastructure asset plans and strategy to the long term financial plan and
incorporates extensive community engagement as part of its decision making through the adoption
of the Community Strategic Plan, Delivery Program and Operational Plan, and various specific
infrastructure strategies, plans and studies.
Council also assesses the community’s view each four years based on a structured survey of our
community such as that undertaken by Micromex in 2016.
Council has commenced:
i) the review of the Recreation and Open Space Strategy 2010 (ROSS). This review is
scheduled for completion in 2017-18
ii) the review of the developer contributions plans. This review will follow the completion of
the ROSS and is scheduled for completion in 2017-18
iii) the preparation of a Waste Asset Management Plan which is scheduled for completion in
2017-18
Annual budget
Each year Council prepares an operational plan containing the annual budget. This is aligned to the
asset management plans and strategy and long term financial plan. Council undertakes community
engagement on the Operational Plan prior to consideration and determination.
Work in the Fit for Future area, particularly in the reporting of financial ratios and strategies to improve
ratios to the desirable levels as set by the OLG, demonstrates that we are beyond a core level in this
area. With some more work in the financial partitioning of operations, maintenance and capital
budgets, an advanced level of maturity will be achieved.
Annual Report
Each year we produce an Annual Report in accordance with the Australian Accounting Standards
which is made available to the community on Council’s web-site. The Annual Report is audited and
then tabled to Council. The report includes the measures achieved for financial performance against
short and long term financial sustainability indicators.
Asset Management Policy
Council has an adopted Asset Management Policy which defines the Council’s vision and service
delivery objectives for Asset Management. The policy has a direct linkage with Council’s Community
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 41 OF 48
Strategic Plan and the Long Term Financial Plan. The policy requires an Asset Management Strategy
to be developed in accord with the integrated planning and reporting framework.
Asset Management Strategy
Council has developed this Asset Management Strategy 2017. The Strategy is linked to the Asset
Management Policy, Asset Management Plans, specific infrastructure strategies, plans and studies,
and Council’s integrated planning and reporting requirements including the long term financial plan.
This demonstrates an advance level of maturity in this Asset Management planning element.
Asset Management Plans
Council has developed formal Asset Management Plans for all major asset groups. All AMPS were
updated in the 2016-17 financial year and are current. An asset management plan is currently being
developed for Waste Facilities.
Governance and Management
This strategy is approved through a Governance process incorporating referral and review by a cross-
organisation Asset Management Matrix Group prior to approval by the Executive Leadership Team.
This Asset Management Strategy was also referred to Council as part of the briefing held in November,
2017 on the Resourcing Strategy documents. Following input from Council, the Strategy is made public
and is available on Council’s web-site.
Levels of Service
We have undertaken the process of defining, quantifying and documenting the community levels of
service, the technical levels of service, and the costs of providing these levels of service in developing
the Asset Management Plans and through our extensive engagement processes undertaken in
developing our Community Strategic Plan, Delivery Program, Operational Plan and various specific
infrastructure asset strategies, plans and studies. These levels of service are defined in the Asset
Management Plans.
Data and Systems
We have a consolidated, integrated, accurate, up to date and complete componentised asset register
with the required functionality to ensure security and data integrity of the information. This includes
the required information about each asset, sorted by asset group. Documented repeatable
methodologies exist to carry out consistent asset condition surveys and defect identification
assessments. Our asset financial reporting functionality is comprehensive and includes audit trails,
depreciation calculations, reporting thresholds and records of acquisition and disposal of assets.
Council is currently undertaking a review of all software as part of the implementation of the new
corporate information technology solution.
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 42 OF 48
Skills and Processes
Processes are in place to review and update the Asset Management Strategy and Asset Management
Plans on a regular basis. There are also processes in place to identify asset and operational risks, assign
responsibilities and to monitor risk treatment actions. We have a process to annually review and
update the financial forecasts for all asset classes and update the associated long term financial plan.
Evaluation
This Asset Management Strategy provides a process by which asset management improvements are
identified, timeframes established, resources allocated, actioned, monitored and in some instances
reported to our Internal Audit Committee.
Council complies with annual reporting requirements established by the Office of Local Government
including through Note 9 and Special Schedule 7. The successful management of our assets is
demonstrated through meeting the NSW Government’s Fit for Future benchmark requirements.
6.2 Asset Management Improvement Plan
The Asset Management improvement plan tasks have been generated by considering each of the
eleven asset management planning elements. This assessment demonstrates that Council has
developed advanced processes for many elements whilst balancing the resources allocated to the
asset management task against the benefits gained. The focus will to continue to improve asset
management processes within the limits of the resources available as shown in Table 6.1 following.
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 43 OF 48
Planning element
description
Improvement Plan Tasks Priority Responsible
Service Area
Timeline
Strategic long-term
plan
Complete the review of the Recreation & Open Space Strategy (ROSS) High Recreation 2017-18
Strategic long-term
plan
Review and update developer contributions plan upon completion of the ROSS High Strategic
Planning
2017-18
Annual budget Continue to update the proposed annual budget taking account of Asset Management Plans and alternate
funding opportunities as part of preparing and adopting the annual Operational Plan
High Finance 2017-18
Annual report Consider the incorporation of a ‘State of the Assets’ statement into the Annual Report. Medium Technical
Services
2018-19
AM policy Continue to undertake a review of the Asset Management Policy every four years in line with each new
Council.
Low Technical
Services
Ongoing
AM Strategy Continue to undertake a minor annual update to incorporate revised financials and full review every four
years in line with each new Council.
Medium Technical
Services
Ongoing
AM Plans Continue to undertake a minor annual update to incorporate revised financials and full review every four
years in line with each new Council.
Medium Technical
Services
Ongoing
AM Plans Develop new Waste Services Asset Management Plan. High Technical
Services
2017-18
Levels of Service Following the completion of the South Batemans Bay bypass and the Batemans Bay Bridge undertake a new
traffic study and incorporate into future planning.
Medium Technical
Services
2019-20
Levels of Service Continue to undertake regular routine condition inspections for all asset classes. Medium Technical
Services
Ongoing
Levels of Service Quantify capacity and functionality upgrades for all asset classes following completion of the ROSS Medium Technical
Services
2018-19
Data & Systems Continue to review software as part of the implementation of the new corporate information technology
solution
Low Technical
Services
Ongoing
Evaluation Continue to identify improvements in all areas of asset management including planning and documentation Medium Technical
Services
Ongoing
Table 6-1 Asset Management Improvement Plan
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 44 OF 48
6.3 Monitoring and Review
This Asset Management Strategy will be reviewed annually with the updating of financial information.
A full review will be carried out every 4 years as a prelude to the development of each new four year
Delivery Program, which is established by each incoming Council. In the event of significant changes
in funding, this strategy will be amended to reflect changes in revenue and the associated renewal
and upgrade budgets.
This Strategy will be referred to during the preparation of each new Operational Plan and associated
annual budget. The selection of individual projects within each asset group will be detailed in the
related Asset Management Plans. The priorities for major works will be approved by Council through
the adoption of the annual Operational Plan.
This Strategy will be amended to recognise any significant changes in service levels and/or resources
available to provide those services as a result of the budget decision process.
6.4 Performance Measures
The effectiveness of this Asset Management Strategy can be measured by the degree to which the
required budgets identified are incorporated into Councils Long Term Financial Plan, Delivery Program
and Operational Plans.
Performance is also measured by Council making improvements to, and ultimately meeting, all
financial reporting ratios.
7 References
NSW Office of Local Government Integrated Planning and Reporting Framework Guidelines and Manual
Code of Accounting Practice and Financial Reporting Update #25 – Special Schedules
Eurobodalla Community Strategic Plan – One Community (2017)
Delivery Program 2017 - 21
Operational Plan 2017 – 18
IPWEA International Infrastructure Management Manual (2006, 2011, 2015)
IPWEA Financial Management Guidelines (2015)
Eurobodalla Shire Council Asset Management Policy (2017)
Eurobodalla Shire Council Methodology Document 2015 Revaluation of the Transport and Drainage network
Eurobodalla Shire Council Transport Asset Management Plan (v.7 Dec 2016)
Eurobodalla Shire Council Stormwater Asset Management Plan (v.5 Dec 2016)
Eurobodalla Shire Council Community and Operational Facilities Asset Management Plan (v.4 Dec 2016)
Eurobodalla Shire Council Recreational Facilities Asset Management Plan (v.4 Dec 2016)
Eurobodalla Shire Council Marine Asset Management Plan (v.6 Jan 2017)
Local Government Financial Sustainability Nationally Consistent Framework, Frameworks 1, 2 & 3 (May 2009)
Integrated Water Cycle Management Strategy and Strategic Business Plan (2016)
Eurobodalla Waste Strategy 2011 – 2018
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 45 OF 48
8 Abbreviations
AMP Asset Management Plan
AMS Asset Management Strategy
ESC Eurobodalla Shire Council
IPART Independent Pricing and Regulatory
Tribunal
LOS Level of Service
LTFP Long Term Financial Plan
NAF Australian National Assessment
Framework
OLG Office of Local Government
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 46 OF 48
9 Glossary
Asset Capacity/Utilisation: the ability of the
physical infrastructure to meet service needs.
Asset Condition: the condition of the physical
infrastructure that allows it to meet the intended
service.
Asset Condition Assessment: The process of
continuous or periodic inspection, assessment,
measurement and interpretation of the resultant
data to indicate the condition of a specific asset so
as to determine the need for some preventative or
remedial action.
Asset Function: the ability of the physical
infrastructure to meet program delivery needs.
Asset Lifecycle Costs: The life cycle cost is average
cost to provide the service over the longest asset
life cycle. It comprises annual maintenance and
asset consumption expense, represented by
depreciation expense. The Life Cycle Cost does not
indicate the funds required to provide the service in
a particular year.
Asset Maintenance ratio: This ratio compares
actual versus required annual asset maintenance. A
ratio of above 100% indicates that the council is
investing enough funds that year to halt the
infrastructure backlog from growing. The
benchmark is > 100%.
Asset Management: the combination of
management, financial, economic, engineering and
other practices applied to physical assets with the
objective of providing the required level of service
in the most cost effective manner.
Asset Management Code of Practice: Describes
generically how Council goes about managing its
assets. It is non-asset specific and provides the
technical background in managing infrastructure
assets.
Asset Management Improvement Program: Tasks
and actions identified in the Asset Management
Plan to improve and enhance the knowledge and
methodologies of Asset Management Practices.
Asset Management Plan: A documented plan to
demonstrate the management of assets,
compliance with regulatory requirements and to
communicate the funding needed for the
operations, maintenance, renewals, upgrades and
new assets providing the required levels of service
over a 10 year planning period.
Asset Management Policy: The AM policy ensures
that;
Council’s assets are managed effectively to
deliver the level of service our community is
prepared to pay for in the short, medium and
long term taking account of the social,
economic and environmental consequences of
Council’s decisions.
Costs are reasonably shared between those
using and consuming the assets today and
those who will be required to renew, replace,
upgrade or dispose of those assets in the future
(providing inter-generational equity),
and there is continuous improvement in asset
management and service delivery.
Asset Management Strategy: Is part of Council's
Resourcing Strategy covering a four year period.
The Plan outlines resources required to deliver the
community's vision in the community strategic
plan.
Asset Matrix Group: A group within Council that
uses a whole of organisation approach to oversee
improvements to Asset Management practices,
documentation and data.
Building and Infrastructure Renewals ratio: to
assess the rate at which assets are being renewed
against the rate at which they are depreciating.
Benchmark > 100%.
Capital new: Expenditure which creates a new asset
providing a new service to the community that did
not exist beforehand. As it increases service
potential, it may impact revenue and will increase
future operating and maintenance expenditure.
Capital upgrade: Expenditure, which enhances an
existing asset to provide a higher level of service or
expenditure that will increase the life of the asset
beyond that which it had originally. Upgrade
expenditure is discretional and often does not
result in additional revenue unless direct user
charges apply. It will increase operating and
maintenance expenditure in the future because of
the increase in the council’s asset base.
Community Strategic Plan: a 20 year community
plan which identifies the main priorities and
aspirations for the future of the Council area.
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 47 OF 48
Component: An individual part of an asset which
contributes to the composition of the whole and
can be separated from or attached to an asset or a
system.
Cost to bring assets to agreed service level: The
ratio indicates proportion of the gross replacement
cost of Council assets that have reached the
intervention level set by Council based on the
condition of the asset. This ratio is the sum of the
outstanding renewal works, valued as the work to
be undertaken, compared to the total replacement
cost of Council’s assets.
Critical Assets: Those assets that are likely to result
in a more significant financial, environment and
social cost in terms of impact on organisational
objectives.
Delivery Program: Details the initiatives and
projects to be undertaken by Council in a four year
period to deliver the community's vision in the
community strategic plan.
Depreciated replacement cost (DRC or WDV): The
current replacement cost (GRC) of an asset less,
where applicable, accumulated depreciation
calculated on the basis of such cost to reflect the
already consumed or expired future economic
benefits of the asset.
Fair value: The amount for which an asset could be
exchanged, or a liability settled, between
knowledgeable, willing parties, in an arm’s length
transaction.
Fit for the Future: Fit for the Future is the NSW
Government's plan to revitalise and strengthen
local government. The program provides councils
with benchmarks to measure and improve their
performance and give communities the assurance
that their councils' finances are being well
managed.
General Fund: The General Fund includes all
Council services that are funded by the General
Rate, the environment and stormwater levies and
waste charges. The primary sources of income for
this fund include rates, fees and charges. This fund
is what Council’s Fit for the Future performance is
based on.
Grant Funding: Monies received generally tied to
the specific projects for which they are granted,
which are often upgrade and/or expansion or new
investment proposals.
Gross Replacement Cost (GRC): The cost the entity
would incur to acquire the asset on the reporting
date. The cost is measured with reference to the
lowest cost at which the gross future economic
benefits could be obtained in the normal course of
business, or the minimum it would cost to
replace/construct the existing asset with a
technologically modern equivalent new asset with
the same economic benefits as the existing asset
had when it was new, allowing for any differences
in the quantity and quality of output and in
operating costs.
Impairment Loss: The amount by which the
carrying amount of an asset exceeds its recoverable
amount.
Infrastructure Assets: Physical assets of the entity
or of another entity that contribute to meeting the
public's need for access to major economic and
social facilities and services, e.g. roads, drainage,
footpaths and cycleways. These are typically large,
interconnected networks or portfolios of composite
assets. The components of these assets may be
separately maintained, renewed or replaced
individually so that the required level and standard
of service from the network of assets is
continuously sustained. Generally the components
and hence the assets have long lives. They are fixed
in place and are often have no market value.
Infrastructure Backlog ratio: This ratio shows what
proportion the infrastructure backlog is against the
total value of a council’s infrastructure. The
benchmark is < 2%.
Integrated Planning and Reporting: an integrated
framework which ensures that Councils are
reflecting community aspirations in the work they
do.
Level of service: The parameters or combination of
parameters that reflect social, political, economic
and environmental outcomes that the organisation
delivers. Levels of service statements describe the
outputs or objectives an organisation or activity
intends to deliver to customers.
Loans / borrowings: Loans result in funds being
received which are then repaid over a period of
time with interest (an additional cost). Their
primary benefit is in ‘spreading the burden’ of
capital expenditure over time. Although loans
enable works to be completed sooner, they are only
ASSET MANAGEMENT STRATEGY (FINAL DRAFT) PAGE 48 OF 48
ultimately cost effective where the capital works
funded (generally renewals) result in operating and
maintenance cost savings, which are greater than
the cost of the loan (interest and charges).
Long Term Financial Plan: Is part of Council's
Resourcing Strategy covering a ten year period. The
Plan outlines resources required to deliver the
community's vision in the community strategic
plan.
Maintenance: All actions necessary for retaining an
asset as near as practicable to its original condition,
but excluding rehabilitation or renewal.
Maintenance does not increase the service
potential of the asset or keep it in its original
condition. It slows down deterioration and delays
when rehabilitation or replacement is necessary.
Modern equivalent asset: A structure similar to an
existing structure and having the equivalent
productive capacity, which could be built using
modern materials, techniques and design.
Replacement cost is the basis used to estimate the
cost of constructing a modern equivalent asset.
Operation: The active process of utilising an asset
which will consume resources such as manpower,
energy, chemicals and materials.
Operational Plan: Details the specific actions,
budgets and capital works Council will undertake in
the financial year.
Pavement Management System (PMS): A
systematic process for measuring and predicting
the condition of road pavements and wearing
surfaces over time and recommending corrective
actions.
Rate Variation: A rate variation is a rate increase
approved by IPART for the purposes of providing an
additional revenue stream to Council. It is often
used to reduce a backlog of renewal works and to
bring assets to a satisfactory standard.
Remaining life: The time remaining until an asset
ceases to provide the required service level or
economic usefulness. Age plus remaining life is
economic life.
Renewal: Works to replace existing assets or
facilities with assets or facilities of equivalent
capacity or performance capability.
Residual value: The net amount which an entity
expects to obtain for an asset at the end of its useful
life after deducting the expected costs of disposal.
Resourcing Strategy: the provision of the resources
required to implement the strategies established by
the community strategic plan. The Resourcing
Strategy includes long-term financial planning,
workforce management planning and asset
management planning.
Risk Management: The application of a formal
process to the range of possible values relating to
key factors associated with a risk in order to
determine the resultant ranges of outcomes and
their probability of occurrence.
Special Schedule 7 (SS7): The Report on
Infrastructure Assets providing information on a
council’s assets. The nature of the information in
the Report on Infrastructure Assets is related to the
condition, maintenance and renewal of
infrastructure assets. Mandatory and included in
Council’s Annual Financial Statements.
Useful life:
Either:
(a) the period over which an asset is expected to be
available for use by an entity, or
(b) the number of production or similar units
expected to be obtained from the asset by the
entity.
It is estimated or expected time between placing
the asset into service and removing it from service,
or the estimated period of time over which the
future economic benefits embodied in a
depreciable asset, are expected to be consumed by
the council.
Work Force Plan: Is part of Council's Resourcing
Strategy covering a four year period. The Plan
outlines resources required to deliver the
community's vision in the community strategic
plan.