asset management plan - walgett shire · 1. revised walgett shire community strategic plan (2 6...

ASSET MANAGEMENTPLAN

OPERATIONAL LAND AND BUILDINGS

2011/12 – 2020/21

May 2012

Part of Walgett Shire Council’s Resourcing Strategy

operational land and buildings_47DA74D.doc of 77

Prepared For: Walgett Shire Council By: Focus Business Group Pty Ltd

Document Control

DOCUMENT I.D.Version Date Version Details Author Reviewer Approver

1 31/01/2012 Asset Management Plan Template S.Jones

S. Holland

2 4/04/2012 Asset Management Plan ( Version 3.0) .

3 7/05/2012 Asset Management Plan ( Version 3.1)

4 Adopted minute No. 000 Council

All rights reserved. No part of this document may be copied, removed,electronically stored or modified without the express permission of Walgett ShireCouncil.


TABLE OF CONTENTS

EXECUTIVE SUMMARY 6

1. INTRODUCTION 11

2. LEVELS OF SERVICE 14

3. FUTURE DEMAND 19

4. LIFECYCLE MANAGEMENT PLAN 28

5. FINANCIAL SUMMARY 37

6. ASSET MANAGEMENT PRACTICES 50

7. PLAN IMPROVEMENT AND MONITORING 54

APPENDIX 1 – LEGISLATIVE REQUIREMENTS 57

APPENDIX 2 – SUSTAINABILITY RATIOS 59

APPENDIX 3 – DEFINITIONS 61

APPENDIX 4 – STRATEGIC LIFECYCLE MODEL 65

APPENDIX 5 – PLANNED CAPITAL EXPENDITURE BY ASSET CATEGORY 69

APPENDIX 6 – PLANNED CAPITAL EXPENDITURE BY TOWN 72


LIST OF TABLES

TABLE 1 – COUNCIL’S ASSET MANAGEMENT PLANS 6

TABLE 2 - OVERVIEW OF WALGETT SHIRE COUNCIL’S OPERATIONAL ASSETS 7

TABLE 3 - OPERATIONAL LAND & BUILDINGS ASSETS FUNDING AND CONDITIONTRENDS 7

TABLE 4 – OPERATIONAL LAND AND BUILDINGS PORTFOLIO CONDITION 9

TABLE 5 - COUNCILS ASSET MANAGEMENT PLANS 11

TABLE 6 - LEVEL OF SERVICE PERFORMANCE MEASURES 14

TABLE 7 - ASSET CONDITION RATING SYSTEM 15

TABLE 8 - WORKS COMPLETED IN 2010 /11 FINANCIAL YEAR 17

TABLE 9 - WORKS IN PROGRESS FOR 2011 /12 FINANCIAL YEAR 17

TABLE 10 - PLANNED WORKS FOR 2012 /16 FINANCIAL YEARS 18

TABLE 11 - OPERATIONAL LAND AND BUILDINGS ASSET PORTFOLIO CONDITION 18

TABLE 12 - ABS POPULATION DATA FOR WALGETT SHIRE COUNCIL 19

TABLE 13 - POPULATION GROWTH PROJECTIONS CALCULATED FOR THIS PLAN 20

TABLE 14 - ABS NATIONAL DEMOGRAPHIC TRENDS 21

TABLE 15 - 2006 CENSUS DATA 22

TABLE 16 – COUNCIL’S ASSET MANAGEMENT DATA (OPERATIONAL LAND / BUILDINGS)23

TABLE 17 - COUNCIL'S ASSET MANAGEMENT DATA (OFFICE EQUIPMENT) 23

TABLE 18 - EFFECT OF TECHNOLOGY CHANGES ON SERVICE DELIVERY 25

TABLE 19 - NEW ASSETS CURRENTLY PLANNED FOR 2012/16 26

TABLE 20 - DEMAND MANAGEMENT STRATEGIES 26

TABLE 21 - LEVEL 1 ASSETS 31

TABLE 22 - AVERAGE ASSET CONDITION (TECHNICAL MEASURE) 32

TABLE 23 - ASSETS FOR DISPOSAL 35

TABLE 24 – CRITICAL RISKS AND TREATMENT PLANS (UNDER DEVELOPMENT) 36

TABLE 25 – OPERATIONAL ASSET VALUES AS AT 30 JUNE 2011 37

TABLE 26 - ASSET MANAGEMENT PLAN IMPROVEMENT PROGRAM 55

TABLE 27 - LEGISLATIVE REQUIREMENTS 57

TABLE 28 - SUMMARY ACCOUNTING AND COST ESTIMATE DATA 59

TABLE 28 - CONSUMPTION, RENEWAL AND UPGRADE RATIOS 59

TABLE 29 - LIFE CYCLE SUSTAINABILITY INDEX 60

TABLE 30 - 10 YEAR SUSTAINABILITY RATIO 60


LIST OF FIGURES

FIGURE 1 - INTEGRATED PLANNING AND REPORTING PROCESS 13

FIGURE 2 - EXAMPLE - ASSET CONDITION RATING 16

FIGURE 3 - EXAMPLE - ASSET HIERARCHY 30

FIGURE 4 - DEPRECIATION PROJECTIONS (10 YEARS) 38

FIGURE 5 - FORECAST ASSET PORTFOLIO TOTALS (10 YEARS) 39

FIGURE 6 - PLANNED NEW CAPITAL EXPENDITURE (5 YEARS) 39

FIGURE 7 - PLANNED RENEWAL CAPITAL EXPENDITURE (5 YEARS) 40

FIGURE 8 - FORECAST TOTAL CAPITAL EXPENDITURE (10 YEARS) 40

FIGURE 9 - ASSET DISPOSAL PROJECTIONS (10 YEARS) 41

FIGURE 10 - PROJECTED MAINTENANCE EXPENDITURE (10 YEARS) 43

FIGURE 11 - PROJECTED OPERATIONS EXPENDITURE (10 YEARS) 43

FIGURE 12 - AVERAGE ANNUAL LIFECYCLE COSTS (10 YEARS) 44

FIGURE 13 - PROJECTED ASSET EXPENDITURE AS A % OF ASSET VALUE 44

FIGURE 14 - 5 YEAR TOTAL CAPITAL WORKS PROGRAM BY ASSET CATEGORY 69

FIGURE 15 - 5 YEAR NEW CAPITAL WORKS PROGRAM BY ASSET CATEGORY 70

FIGURE 16 - 5 YEAR RENEWAL CAPITAL WORKS PROGRAM BY ASSET CATEGORY 71

FIGURE 17 - 5 YEAR TOTAL CAPITAL WORKS PROGRAM BY TOWN 72

FIGURE 18 - WALGETT - 5 YEAR TOTAL CAPITAL WORKS PROGRAM 73

FIGURE 19 - LIGHTNING RIDGE - 5 YEAR TOTAL CAPITAL WORKS PROGRAM 74

FIGURE 20 - COLLARENEBRI - 5 YEAR TOTAL CAPITAL WORKS PROGRAM 74

FIGURE 21 - BURREN JUNCTION - 5 YEAR TOTAL CAPITAL WORKS PROGRAM 75

FIGURE 22 - CARINDA - 5 YEAR TOTAL CAPITAL WORKS PROGRAM 75

FIGURE 23 - CUMBORAH - 5 YEAR TOTAL CAPITAL WORKS PROGRAM 76

FIGURE 24 - ROWENA - 5 YEAR TOTAL CAPITAL WORKS PROGRAM 76

FIGURE 25 - POKATAROO - 5 YEAR TOTAL CAPITAL WORKS PROGRAM 77


Executive SummaryWalgett Shire Council has a significant portfolio of community assets under itscare and control. Council’s Asset Management Plans (AMP’s) assist Council toplan for the future, allocate our financial and human resources efficiently andensure that assets are managed according to the changing needs of ourcommunity.

This AMP should be read in conjunction with following guiding Council plans.

1. Revised Walgett Shire Community Strategic Plan (26 March 2012).

2. Council’s Strategic Asset Management Plan (Version 1 - May 2012)

3. Council’s Asset Management Policy (Version 1 - April 2010)

The key elements of this Asset Management Plan are as follows:

LEVELS OF SERVICE - specifies levels of service to be provided by Council.

FUTURE DEMAND – impact on future service delivery and how this will be met.

LIFE CYCLE MANAGEMENT – managing our assets to meet agreed levels of service.

FINANCIAL SUMMARIES - what funds are required to meet agreed levels of service.

COUNCIL’S ASSET MANAGEMENT PRACTICES - our systems and processes.

MONITORING - how this plan will be monitored to ensure it is meeting Council’sobjectives.

AMP IMPROVEMENT PLAN – how we plan to improve our asset managementcapability.

Council’s Integrated Planning and Reporting Process

By 1st July 2012, Walgett Shire Council will have in place our new “IntegratedPlanning and Reporting Process” which is required by the local Government Act1993. Council’s Asset Management Plans are an integral component of the newPlanning and Reporting Process and this plan is one of eight individual assetmanagement plans that collectively cover all Council owned assets. Council’sAMP’s are divided into Essential Services and Operational/Social categories asshown in Table 1 below.

Table 1 – Council’s Asset Management Plans

ESSENTIAL SERVICES OPERATIONAL / SOCIAL SERVICES

1. Roads & Bridges AMP 5. Operational Land and Buildings AMP2. Storm Water AMP 6. Plant and Equipment AMP3. Water and Sewer AMP 7. Economic Affairs AMP4. Solid Waste AMP 8. Recreation and Culture AMP


Operational Land and Buildings AMP

This Asset Management Plan covers all Council owned Land (except Roads andFootpaths), Operational Buildings, and Office Equipment.

An overview of Walgett Shire Council’s Operational Asset Portfolio is provided inTable 2 below.

Table 2 - Overview of Walgett Shire Council’s Operational Assets

Council Owned Assets Number of:Council Depots 4Tourist Centres 1

- Internet Centre 1- Library 1

Car Parks/Parking Areas 4Public Amenities (standalone) 3Cemeteries 7Council Chambers 1SES Facilities 4RFS Facilities 8VRA Facilities 1TV Transmitters 2Radio Transmitters 2Meeting Room 1Aged Care Facilities 2Staff Dwellings 15Residences – Facility Manager 1Bus Stops 2

Notes:

1. The Walgett Tourist Centre also houses the Library and Internet Centre.

2. Office Equipment is included in this asset management plan.

Detailed portfolio information and asset locations are contained in Section 4 ofthis plan (Lifecycle Asset Management).

Financial Summary

Council will review funding and asset condition trends each year when this assetmanagement plan is updated. The trends for 2011 /12 are as follows:

Table 3 - Operational Land & Buildings Assets Funding and Condition Trends

Asset Category Funding Trend Asset Condition Trend

Operational Land andBuildings

Declining DecliningSteady Steady

Increasing Improving

The current depreciated value of the portfolio is $8,128,412 with plans toincrease this to $10,842,073 over the next 10 years. The increase is due tosignificant planned investment to rejuvenate or replace aging assets, and plansto construct some new facilities.


Analysis of the existing portfolio and planned capital works has considered fourkey ratios:

The rate at which we are consuming our assets;

The rate at which we are renewing our assets;

The rate at which we are expanding the portfolio; and

The sustainability of the portfolio.

For Operational Land and Building assets, we are renewing our Buildings atroughly 1/5 of the rate at which we are consuming them (at a portfolio level),and we are increasing the size of the portfolio by an average of 7.4% per yearover the next 5 years. In this instance, the poor consumption ratio will be offsetby the high upgrade ratio since we are replacing the Walgett Depot and thisasset constitutes 1/10 of the operational buildings asset portfolio.

Lifecycle Sustainability Index

The sustainability index for the Operational Land and Buildings Portfolio is 0.9.In real terms, a ratio between 0.8 and 1.2 is adequate and at best this ratioshould be used as a guide to indicate whether we need to further investigate thesustainability of our asset portfolio. The ratio is simply the relationship betweenCouncil’s budget expenditure for the current year and the expenditure that weestimate is required to maintain our Economic Affairs assets portfolio over itslifecycle.

In other words, Sustainability Ratio of 1.0 indicates that Council’s budget is equalto the estimated average expenditure required to maintain our assets to agreedstandards. Details of how sustainability ratios are calculated are contained inAppendix 2.

The reader will note that maintenance costs have spiked in the 2012 FY to date.This is largely due to flood repairs and clean-up, and these costs are expected toreturn to historical trends going forward.

Financial Projections are detailed in Section 5 (Financial Summary) of this AssetManagement Plan.

NOTE: Asset Lifecycle Costs are forecast in today’s dollars, meaning thatinflation is not incorporated into these figures to allow comparative analyses andcalculation of meaningful ratios. This differs from the Long-Term Financial Planwhich does allocate CPI to all forecasts. Consequently, forecasts contained inthis Asset Management Plan will of necessity be less than those in the LTFP.


Levels of Service

‘Levels of Service’ measures describe the safety, quality, quantity, reliability,responsiveness, cost/efficiency and legislative compliance of Council-providedservices. Levels of service delivered by our current Operational Land andBuildings asset portfolio are measured through our community engagement andfeedback process and by Council-generated technical and operational measures.

Community Based Levels of Service

Council completed our community engagement and feedback process in 2011. Asa final step in the consultation process a community workshop was held inWalgett on Wednesday 21 March 2012. Participants at the workshop, whorepresented all sections of the community, worked through the latest draft of theCommunity Strategic Plan. Council’s Operational Land and Buildings areprimarily assets the Council utilises to provide services to our community.Community feed back tends toward the services and facilities Council providesrather than the assets used to provide Council Services. In other words, Council’sOperational Land and Buildings are the platform through which Council servicesare delivered to our community.

If for example, our community tells us we need improved maintenance ofrecreation and culture assets, we may need to look at improving our CouncilDepots (Operational Land and Buildings) to improve assets in our other assetcategories. This is discussed in detail in Section 2 of this plan (Levels of Service).

Technical and Operational Measures of Levels of Service

Council’s primary measure of levels of service is asset condition andserviceability. Our medium term goal is to assess the condition of all Councilassets using a 1-5 rating system in line with Council’s Asset Management Policy.Each individual asset across all Council’s assets will be rated as we move fromCore to Advanced Asset Management systems and processes. Council’s currentassessment of the overall condition of our Operational asset portfolio is level 2 asindicated in table 4 below.

Table 4 – Operational Land and Buildings Portfolio Condition

LEVEL CONDITION DESCRIPTION1 Excellent - No Work Required (normal maintenance)2 Good - Only minor maintenance required3 Average - Maintenance work required4 Poor - Renewal required5 Very Poor - Urgent renewal / upgrading required.

Source: Walgett Shire Council Asset management Policy 5.3.1 - 1st April 2010

Council’s community feedback and technical and operational measures of levelsof service are discussed in Section 2 (Levels of Service).


Asset Management Achievements

Council has reached significant asset management milestones in the lead up tothe implementation of our new ‘Integrated Planning and Reporting Process’.

1. Council has completed 5 capital works renewal and upgrade projects in ouroperational asset portfolio in the last 12 months.

2. A significant amount of detailed asset data has been collected and enteredinto our asset management data base over the last 36 months.

3. Council is developing a solid asset management core capability with ourasset management systems and processes.

4. Eight detailed Asset Management Plans covering a significant portfolio ofCouncil assets have been completed in 2012.

Recently completed operational capital works projects are detailed in Section 2(Levels of Service) of this asset management plan.

Our Plans for the Future

Council’s overarching or high-level ‘Community Strategic Plan’ (CSP) guides allplans produced by Council as part of our new ‘Integrated Planning and ReportingProcess’. This asset management plan addresses the specifics of the CSP higherlevel planning objectives and also informs the CSP from an asset managementperspective.

Council plans to continue maintaining and upgrading the condition, serviceabilityand relevance to our community of our Operational Land and Buildings assets.Upgrading our Council Depots and reducing the amount of maintenance wecontract to external service providers is a prominent component of Council’sAsset Management Strategy over the next ten years.

Details of maintenance and capital works projects planned for the next 5 yearsare detailed in Section 2 (Levels of Service) of this asset management plan.


1. IntroductionAsset Management Plans are important documents that provide clear directionsand guidelines for the effective short and long-term management of assets underCouncil’s control.

Development of all Council’s Asset Management Plans began as early as 2008with the acquisition of asset management software and the collection andmigration of a large amount of asset data. These plans mark the first time anattempt has been made to look at the entire portfolio of assets owned by Councilin a comprehensive and holistic manner.

Eight (8) asset management plans have been produced for 2012 and these aredivided into Essential Services AMP’s and Operational/Social AMP’s as listed intable 5 below.

Table 5 - Councils Asset Management Plans


1. Roads & Bridges AMP 5. Operational Land and Buildings AMP2. Storm Water AMP 6. Plant and Equipment AMP3. Water and Sewer AMP 7. Economic Affairs AMP4. Solid Waste AMP 8. Recreation and Culture AMP

Each Asset Management Plan lists, describes and accounts for all assets within aparticular asset category and provides Council with valuable information formanaging our community’s assets into the future.

Operational Land and Buildings AMP

The Operational Land and Buildings Asset Management Plan seeks to provideCouncil Staff, the Executive Management team, Utility Authorities, GovernmentAgencies, Developers, Councillors and all interested members of the WalgettShire community with easy-to-read and informative asset managementinformation.

Council seeks to –

1. Bring visibility to the costs and benefits associated with providing theagreed levels of service to our community.

2. Communicate the benefits of introducing the ‘asset management’ disciplineinto Council operations.


Asset Management

Council is the custodian of several thousand individual assets within the WalgettShire Local Government Area. Each asset is in the process of being documentedand entered into Council’s asset management systems.

For each of these assets, Council is required to -

ensure the asset meets agreed ‘levels of service’;

make cost effective maintenance, renewal and replacement decisions;

ensure the asset remains relevant to the needs of our community;

ensure the asset meets operational and legislative standards;

identify and mitigate environmental, financial and public risks of assetfailure;

cost, budget and obtain funding for asset maintenance, renewal andupgrade; and

plan and budget for asset write off and disposal.

Asset Management is both a discipline and a tool to assist Council decision-makers and staff to meet the requirements listed above. Key objectives of theasset management planning process itself are to –

assist with cost reductions where possible by optimising whole-of-life assetcosts;

provide ‘on request’ database generated reports for higher level planning;

directly support the long term financial planning and workforcemanagement planning components of Council’s Resourcing Strategy; and

provide a documented basis for assigning priorities in work programmingand budgeting.

Asset Management Plans

Asset Management Plans are living documents that evolve with the needs of ourcommunity. Asset Management Plans must also respond to Government Policy,and economic and demographic change.

Sister plans to our Asset Management Plans are Council’s ‘Long Term FinancialPlan’ and ‘Workforce Management Plan’. Each of the three plans support andinform each other.

A pictorial representation of the entire ‘Integrated Planning and ReportingProcess’ appears in figure 1 over leaf.


Integrated Planning and Reporting Process

The Walgett Community Strategic Plan (CSP) is Council’s most senior plan. TheCSP is developed in consultation with residents, service providers, governmentand non -government agencies and community groups. The CommunityStrategic Plan guides Council’s Resourcing Strategy which includes Council’sasset management plans.

Figure 1 - Integrated Planning and Reporting Process


1. Roads & Bridges AMP 5. Operational Land and BuildingsAMP2. Storm Water AMP 6. Plant and Equipment AMP

3. Water and Sewer AMP 7. Economic Affairs AMP4. Solid Waste AMP 8. Recreation and Culture AMP

RESOURCING STRATEGY

Workforce Management Plan (4 Year Plan)Long Term Financial Plan (10 Year Plan)

Asset Management Plans(10 Year Plans)

WalgettCommunity Strategic

Plan(10 Year Plan)

DeliveryProgram

(4 Year Plan)

AnnualOperations

Plan

Council’sAnnualReport


2. Levels of ServiceCommunity-based Levels of Service are measures that describe the safety,quality, quantity, reliability, responsiveness, cost/efficiency and legislativecompliance of Council provided services. The Technical and Operationalperformance measures Council may use to measure these Levels of Servicenecessarily vary across each of our asset management plans due to the differentnature of the assets in question. For example, we are less concerned about theappearance and attractiveness of our underground water mains than we areabout the appearance of our parks, gardens and streets.

Council is developing technical and operational measures specific to each of ourasset management plans that will help us to assess the levels of service weprovide. For our Operational Land and Buildings assets, these are represented intable 6 below.

Table 6 - Level of Service Performance Measures

PerformanceMeasure

Level ofService

Technical and OperationalMeasures

SafetyProvide safe suitable

facilities, free fromHazards.

1. Asset Condition Level ( 1-5 rating system)2. Community Engagement and Feedback Data.3. Council Employee Feedback Data.4. Frequency of inspection and defect reporting.5. Number of reported incidents.6. Number of insurance claims.7. Number of Vandalism Incidents.

Quality

Provide qualityoperational facilitiesand equipment, andsupporting services.

1. Asset Condition Level ( 1-5 rating system)2. Community Engagement and Feedback Data.3. Number of service requests.4. Number of breakdowns per annum.5. % of useful life remaining.

Quantity Provide sufficientnumber of assets

1. Community Engagement and Feedback Data.2. Frequency of use of existing assets by community and/or

Council.3. Optimal use of existing facilities.

Reliability Facility Availability1. Facilities are fully operational.2. Facilities are open or available for use (95%).3. Accessibility of facilities to all potential users.

ResponsivenessProvide response tocomplaints to satisfy

users

1. Complaints investigation within agreed timeframes.2. Action taken within agreed timeframes.3. Method of communication if no action will be taken.

Cost / Efficiency

Assets meet agreedservice levels.

Cost MinimisationEfforts.

1. Maintenance costs within budget.2. Cost effective asset management decisions (renew,

upgrade or disposal decisions).

LegislativeCompliance

Compliance withRelevant Standards

1. Annual inspections for legislative compliance completed.2. Required actions to meet legislative compliance initiated /

completed.


Community Engagement and Feedback

Council’s Community Strategic Plan (CSP or the Plan) is our Community’s mostsignificant guiding document. The CSP requires the highest level of communityengagement before its recommendations and plans are implemented. Counciladopted a Community Consultation Procedure at its meeting on 24 November2009 and as a final step in the consultation process a community workshop washeld in Walgett on Wednesday 21 March 2012.

Council’s Operational Land and Buildings support the Council itself and theCouncil’s ability to provide overall services to the community. The response to‘levels of service’ provided by Council that relate to Operational Land andBuildings were as follows:

Our community’s desired levels of service listed above have been incorporatedinto Council’s Community Strategic Plan which guides this asset managementplan.

Technical Measures of Levels of Service

Council’s primary measure of Levels of Service is the condition of our OperationalAssets. Condition is measured using a 1 -5 rating system in line with Council’sAsset Management Policy.

Table 7 - Asset Condition Rating System


Source: Walgett Shire Council Asset Management Policy 5.3.1 - 1st April 2010

1. A clear need for more emphasis on economic development and “hard”infrastructure with a focus on that infrastructure that has been allowed todeteriorate due to ongoing funding constraints including rate pegging.

2. A continuation of our communities desire to improve the appearance of ourtown centres.

3. A clear desire for improved efficiency and cost effectiveness of counciloperations by improving our Asset Management capabilities.

Source: Walgett Shire Revised Community Strategic Plan - 26 March 2012


The 1-5 rating system is used to rate our Operational Land and Buildings assetsboth at the individual asset level and the portfolio level as illustrated in figure 2below.

Figure 2 - Example - Asset Condition Rating

Operational Land and Buildings Asset PortfolioOVERALL PORTFOLIO CONDITION RATING = 2

AGED CAREFACILITIESCAR PARKS

PUBLICAMENITIES

OVERALLCONDITIONRATING = 2

CEMETERIES


STAFFDWELLINGS


SES / RFS / VRAFACILITIES


COUNCIL CHAMBERSTOURIST CENTRE

COUNCIL DEPOTS

OVERALLCONDITION RATING = 3

Lightning Ridge DepotButterfly Avenue, Lightning Ridge

OVERALL CONDITION RATING = 2Economic Life

(EL)Used life

(UL)Condition

LevelWorkshop 40 8 1

Offices and Stores 40 19 2

Tea Room 40 20 3

Parking Shade Structure 20 10 3

Container 35 20 3

Water Tank 20 10 3

2 x Water Towers 100 20 1

Fence 25 20 4

Asset condition is currently recorded in spreadsheet format and will berecorded in Council’s Asset Register as shown in the extract above in

future revisions of this plan.


Rating the Condition of our Assets

Assessing the condition level of our Operational Land and Buildings assets isultimately a subjective judgment exercise which uses the 1-5 rating system as aguide.

Council uses a combination of visual inspection and technical information such asasset useful life data to make Renewal, Upgrade or Disposal decisions. This isthe key to effective asset management and decision making.

As we develop our asset management database, systems and processes we willbe able to generate reports quickly and easily that will flag areas that mayrequire inspection/maintenance/renewal/upgrade or disposal well ahead of time.These reports are a valuable tool for budgeting, formulating maintenanceprograms and for establishing priorities for our maintenance programs. Council’scurrent asset management systems and processes are discussed in Section 6(Asset Management Practices) of this plan.

Improving Operational Land and Buildings Levels of Service

Walgett Shire Council is currently in the process of enhancing our maintenanceand capital works systems and processes. Central to this process is thedevelopment of our asset management systems which will allow us to produceon-demand reports covering all Council’s maintenance and capital worksactivities. Council’s asset renewal, upgrade and new facilities initiatives continueto move forward. Capital Works completed in the 2010/11 financial year aresummarized in table 8 below.

Table 8 - Works completed in 2010 /11 Financial Year

YEAR LOCATION CAPITAL WORKS PROGRAMS STATUS2010/11 Walgett Staff Dwellings x 3 - Painting completed2010/11 Lightning Ridge New Amenities Block (standalone) completed2010/11 Carinda New Toilet Block (standalone) completed2010/11 Walgett Bus Shelter completed2010/11 Lightning Ridge Bus Shelter completed

(Source: Annual Report (2010 /11)

Works in Progress

Works underway for the 2011/12 Financial Year are listed in table 9 below.

Table 9 - Works in progress for 2011 /12 Financial Year

YEAR LOCATION CAPITAL WORKS PROGRAMS STATUS2011/12 Walgett Cemetery Extension In Progress2011/12 Walgett Council Chambers – Exterior rehabilitation In Progress2011/12 Burren Junction Bore Baths – new evaporation ponds In Progress2011/12 Lightning Ridge Bore baths Perimeter Fence In Progress2011/12 Cumborah New Meeting Room In Progress


Additionally, Council has committed to replacing one third of its computerhardware each year for three years and we have commenced this program in the2012 financial year.

Planned Works (2012 – 2016)

Council’s medium-term objective is to reduce the long-term maintenance andoperating costs by renovating or upgrading a selection of older buildings whichare at condition level 4 or 5. A program of proposed works over the next fiveyears has been formulated by Council guided by our ‘Community Strategic Plan’.

The program consists of maintenance; capital renewal and capital upgradeprojects across the Shire such as the new Council Depot and new Aged CareFacility in Walgett, Renovations to Council Chambers, and extensions to theWalgett Cemetery and Library. These planned works will be reviewed forapproval by Council and are listed in Table 10 below.

Table 10 - Planned Works for 2012 /16 Financial Years

YEAR LOCATION CAPITAL WORKS PROGRAMS STATUS2012/13 Walgett Staff Dwellings x 6 – Remodel and refurbish older buildings Planned2012/13 Walgett Cemetery – Expand Site Planned2012/13 Walgett Medical Centre Public Toilets – Toilet and drainage repairs Planned2012/13 Walgett Woolsley House – Extend Library Planned2012/14 Walgett Council Chambers – Replace roof & ducting, rehabilitate facade,

reconstruct main entryPlanned

2012/14 Collarenebri Cemetery – Water Systems Planned2012/16 Rowena RFS Shed – Installations to new fence Planned2014/15 Walgett New Depot – Workshop, Stores, etc Planned2016/17 Walgett New Aged Care Facility Planned

Overall Condition of our Operational Land and Buildings Assets

This Plan is the first Operational Land and Buildings Asset Management Planproduced by Council under the new Integrated Planning and ReportingFramework. As such, historical ratings using the same methodology areunavailable.

Council’s assessment is that our Operational Asset portfolio condition hasimproved slightly within Level 2 over Financial Years 2008/09 through 2010/11.

Operational Land and Buildings Asset Portfolio Condition (2011 /12)

Table 11 - Operational Land and Buildings Asset Portfolio Condition



3. Future DemandThere are a number of potential drivers of future demand for our community’sOperational Land and Building Assets. Generally, these drivers place higherdemands on infrastructure provision and associated maintenance costs.However, they may also reduce demand for a particular asset or class of assets.

In this asset management plan, we consider the following influences on futuredemand for operational assets.

Population growth

Demographic changes

Changes in ‘Desired Levels of Service’

Economic factors

Changes in technology

Demand Management Strategies for these influences are considered later in thissection of the operational asset management plan.

Population Growth

There is potential for population growth to place higher demands on CouncilServices and hence some of our operational assets over the next ten years.

The most recent population data for the Walgett Shire Local Government Area isthe 2010 Australian Bureau of Statistics Regional Profile Data. The updated dataindicates reasonably stable population numbers in our Local Government Areabetween 2006 and 2010.

Table 12 - ABS Population Data for Walgett Shire Council

Historical ABS Data Most Recent Revised ABS Data

Year 2002 2003 2004 2005 2006 2007 2008 2009 2010

Population 8,106 7,852 7,560 7,353 7,273 7,169 7,124 7,209 7,235

While the ABS data is useful as a guide, the population of Walgett Shire isdifficult to collate due to the high number of people in the mining areas andAboriginal communities who choose not to complete the census and/or are notcounted through other data collection mechanisms.


Population Growth in our Aboriginal Communities

Our Indigenous population has increased by approximately 30% since the year2000, especially in younger age groups. As a percentage of total populationacross the Walgett Shire Local Government Area, our Indigenous population wasestimated to be 30.1% in 2006 (ABS Data).

The Department of Families, Housing, Community Services and IndigenousAffairs (FaHCSIA) studies forecast Indigenous population growth of 43 percentbetween 2006 and 2026. Further, the number of Indigenous people in the under-20 age bracket is forecast to increase by 19 per cent over the same period.

Interpolation of the best available data suggests that our 2012 Indigenouspopulation is now 33% of our community’s total population. This trend will haveminimal impact on either the Level of Demand or Desired Levels of Service forour Operational assets over the next ten years. It will however impact othercategories of assets, covered in other asset management plans.

Table 13 - Population Growth Projections calculated for this plan

Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

1.Born Overseas 531 533 535 537 540 542 544 546 548 550 5532.Born in Australia 4,382 4,400 4,417 4,435 4,453 4,470 4,488 4,506 4,524 4,542 4,5603.Born in Australia

(Indigenous) 2,437 2,481 2,526 2,572 2,618 2,666 2,714 2,763 2,813 2,864 2,916

Total 7,358 7,414 7,478 7,544 7,610 7,678 7,746 7,815 7,885 7,957 8,029

Population Distribution Projections (%)

1.Born Overseas 7.2 7.2 7.2 7.1 7.1 7.1 7.0 7.0 7.0 6.9 6.92.Born in Australia 59.6 59.3 59.1 58.8 58.5 58.2 57.9 57.7 57.4 57.1 56.83.Born in Australia

(Indigenous) 33.2 33.5 33.8 34.1 34.4 34.7 35.0 35.4 35.7 36.0 36.3

Notes to table 13:

1. Data points 1 & 2 above are projected forward at a 0.4% per annum growth rate (interpolated estimate).2. Data point 3 is projected forward at a 1.8% per annum (geometric average of the FaHCSIA 20 year data).3. Total Population Growth over the next ten years is 9.1%.4. Indigenous population growth over the next ten years is 19.5%5. Our Indigenous population will increase from 33.2 % to 36.3% of total population over the next ten years.6. The proportion of our indigenous people less than 20 years of age will increase by 10% over the period.7. 2011 Census Data will be available in June 2012 and will be updated with future revisions of this plan.

Changes in Demographics

Walgett Shire Local Government Area has an aging population. This is anAustralia-wide demographic trend which is clearly reflected in our owncommunity. The most recent ABS data on the age distribution of our communityis tabulated below.


Table 14 - ABS National Demographic Trends

Historical ABS Data (2006 data) Revised ABS Data (2010 data)

AGE 2002 2003 2004 2005 2006 2007 2008 2009 20100 - 14 21.7% 21.5% 21.4% 21.4% 21.8 % 21.0 % 20.6 % 20.4 % 19.9 %

15 - 24 11.2% 10.9% 10.3% 9.8% 9.8 % 10.3 % 10.6 % 10.4 % 10.4 %25 - 44 29.0% 28.4% 28.0% 27.6% 26.4 % 25.3 % 25.0 % 25.0 % 25.2 %45 - 64 27.5% 27.9% 28.6% 29.0% 29.2% 29.6 % 29.7 % 29.8 % 29.7 %65 plus 10.6% 11.3% 11.7% 12.1% 12.2% 13.7% 14.1% 14.4% 14.8%

Our 65-plus community has grown from 10.6% of our population to 14.8%between 2002 and 2010. For comparison and context, the Australia-wide ABSdata shows a growth in the 65-plus community of 11.1% to 13.6% over a twentyyear period (30 June 1990 - 30 June 2010). This comparison highlights thesignificance of the trend in the Walgett Shire Local Government Area.

However, the FaHCSIA study suggests that there is significant population growthoccurring within our indigenous community that may not be captured in the ABSdata. There is a particular emphasis on the growth in the number of people lessthan 20 years of age.

Council is aware of and planning for the impact on demand for age-appropriateCouncil Services and corresponding operational assets in line with these trends.In particular, the HACC Centre in Lightning Ridge and the new Aged Care Centreplanned for Walgett are addressing this trend.

Changes in ‘Desired Levels of Service’

Council’s Operational Land and Buildings Portfolio includes a number of highvisibility assets such as Council Chambers, Cemeteries, Tourist and InternetCentres and Aged Care facilities as well as low visibility assets such as ourCouncil Depots, SES and RFS facilities. Community feed back therefore impactsour Operational Land and Buildings assets directly in terms of high visibilityassets and indirectly in terms of low visibility assets. For example, we may needto improve assets such as Council Depots and Computer Equipment to improveour overall maintenance capabilities.

Our communities Desired Levels of Service have changed over the last five yearswith a desire for programs and infrastructure that will support economicdevelopment and our aging population coming to the fore.

Council will continue to monitor these trends and continue to plan and actionboth asset and non-asset based programs in our Operational Land and Buildingsportfolio.


Non asset based improvements being actioned by council are -

Improving management of operational assets so as to minimise thelifecycle costs of these assets, particularly yearly maintenance andoperating costs.

Asset based improvements currently planned by council are -

Upgrading our Council Works Depot in Walgett.

Extending the Walgett Cemetery.

New Aged Care Facility planned to be built in 2016

Key to the success of these programs is gaining a reliable understanding changesin our communities Desired Levels of Service as we move into the future. Ourfuture Community Engagement and Feedback programs are a critical part of thisprocess.

Technical Indicators of Changes in ‘Desired Levels of Service’

Technical indicators provide valuable information which can be balanced andweighted against local knowledge and community feedback. The value of localknowledge and community feedback in Walgett Shire Local Government Area isheightened by the fact that detailed data is difficult to locate.

The data in table 15 comes from the 2006 Census. 2011 census data will beavailable mid to late 2012 and will be reflected in future revisions of this plan.

Table 15 - 2006 Census Data

ITEM DIMENSIONTOTAL HOUSEHOLDS 2,661TOTAL FAMILIES 1,634

- Couple families with children under 15 and/or dependent students 519- One parent families with children under 15 and/or dependent students 236

INTERNAL MIGRATION - WALGETT SHIRE LOCAL GOVERNMENT AREA- Persons who lived in a different region of Australia 1 year ago ( Outside the Walgett LGA) 16.0 %- Persons who lived in a different region of Australian 5 years ago ( Outside the Walgett LGA) 34.5 %

POPULATION CENCENTRATION- Urban 62.4%- Within a Bounded Shire Locality 6.9%- Rural Balance 30.7%

The ABS data in the table above assists Council to look at the physical location ofCouncil Service facilities as a function of population concentration.

Asset management technical indicators are also supported by information weobtained through our asset management systems. Table 16 below indicateswhere capital and maintenance expenditure is allocated across our towns andvillages.


Table 16 – Council’s Asset Management Data (Operational Land / Buildings)

Town Current CapitalInvestment

Share ofTotal

Investment

ForecastAverage YrlyCapital Works

% of TotalCapitalWorks

ForecastAverage Yearly

Expenses% of TotalExpenses

LandWalgett $ 760,439 48%

Lightning Ridge $ 679,368 43%

Collarenebri $ 44,434 3%

Burren Junction $ 29,400 2%

Carinda $ 52,750 3%

Rowena $ 2,940 0%Pokataroo $ 300 0%BuildingsWalgett $ 10,271,983 79% $ 593,050 97% $ 773,900 88%

Lightning Ridge $ 1,978,319 15% $ 1,150 0% $ 42,664 5%

Collarenebri $ 369,301 3% $ 1,950 0% $ 30,703 4%

Burren Junction $ 175,400 1% $ 2,550 1% $ 14,943 2%

Carinda $ 136,750 1% $ 1,550 0% $ 3,563 1%

Cumborah $ 44,000 0% $ 9,000 2% $ 2,058 0%Rowena $ 47,940 1% $ 450 0% $ 0 0%Come By Chance $ 32,000 0% $ 0 0% $ 0 0%

$ 13,055,693 100% $ 609,700 100% $ 867,831 100%

Additionally, the Council invests capital in and maintains a range of OfficeEquipment, most of which is located in the Walgett Council Chambers.

Table 17 - Council's Asset Management Data (Office Equipment)

Current Capital Investment Forecast Average YrlyCapital Works

Forecast Average YearlyExpenses

$ 1,074,366 $ 70,000 $ 564,207

Economic factors

Council has completed a tourism strategy based on a study commissioned in2009 and continues to resource and develop tourism activities within the Shire.Significant progress has been made with tourism promotion through attendingindustry workshops, shows and conferences; developing merchandise for thevisitor’s centre, developing and updating tourism brochures, auditing signageand beginning signage upgrades, supporting web promotion of the shire as atourism destination and participating in joint promotions with other areas andorganisations.


Council has applied for Federal Government funding to enable the developmentof the Australian Opal Centre at Lightning Ridge and plans to continue tourismdevelopment which includes developing a detailed tourism strategy for the Shireas a primary strategy for stimulating the local economy.

Council plans that will have an impact on our economy over the next ten yearsand hence need to be assessed for the impact on our Operational Land andBuildings assets are listed below.

Improving road infrastructure under the Federal Government’s fundingprograms;

Developing a plan for long term asset financial management;

Developing a detailed tourism strategy for the Shire as a key way ofstimulating the local economy;

Working to become an employer of choice in the region;

Lobbying governments to ensure that appropriate levels of support areprovided for health, education, law and order, employment, housing andinfrastructure development and maintenance;

Developing new and innovative ‘blue sky’ ideas and strategies, andadopting programs that have worked in other rural and remotecommunities;

Improving the appearance of the main streets in the Shire’s three towns;

Improving tourism infrastructure, including expanding and furtherdeveloping tourism centers;

Developing the next stage of the Shire Tourism Strategy to acceleratetourism growth in the Shire, empower local organisations, provide Councilwith clear directions on the actions needed to ensure sustainable tourismgrowth and promote Walgett Shire as a unique outback destination; and

Developing a Chamber of Commerce for Walgett Shire LGA to activelypursue and support economic development.

Source: Revised Walgett Shire Community Strategic Plan - 26 March 2012

Demand Management Strategies for the above are considered later in thissection of the Operational Land and Buildings Asset Management Plan.

Impact of Technology

Changes in technology and the degree of take up within Council operations andour Community can increase or decrease the costs associated with managing ourOperational Land and Buildings assets. Council will continue to add to andmonitor the following changes in technology for impact on costs and usage of ouroperational assets.


Table 18 - Effect of Technology Changes on Service Delivery

Change In Technology Effect on Service DeliveryBuilding Structures and Utilities

More durable building materials

Design techniques which make the most efficient use ofnatural heating and cooling, and air flow

More sophisticated utility and security systems

- Reduction in maintenance activities, less interruptions toservice

- Less reliance on mechanical systems may marginallyimprove service delivery

- Less hands-on management, potentially longer down-timefor repairs

Information Technology Hardware and Software

Increasing functionality and power of PCs and laptopcomputers.

More automated software available for administration,management, and maintenance activities; Increased datacollection and data analysis tools

- More uniformity possible, easier tracking of service issues,improved real-time information available relevant to servicesand issues.

Household Internet Access Increasing.

Of the 2661 Households within the Walgett Shire LocalGovernment Area, 39.5% have internet Access (Census2006).

- Internet based social networking growing - no physicalassets required, age bracket specific – impact on demandfor Council’s Internet Centre likely to involve tourists ratherthan residents.

- Options for disseminating council information to residentsgenerally and to those who are geographically isolated.

World Wide Web

Information isolation and anonymity is declining.

- Council and Non-Council Web presence - attracting activityto the Shire.

- Positive image for Walgett Shire on the World Wide Webwill lead to increased consumption of some operational Landand Buildings Assets.

National Broadband Network

Access, speed and reliability Internet improved.

Increase in Wireless Networks.

- Less potential down-time for Council services due to floodwhere staff can access information and systems from homeand other remote locations.

- Specialised or difficult to attract skill sets can be accessedwith remote access to Councils Systems.

Management TechnologyAsset Management Systems and Processes improving.

Customer Relationship Management Systems

Knowledge of assets, component lives and costs iscontinually being improved. Systems to monitor usage ofour Recreation and Cultural Assets to ensure communitydesired levels of service match usage.

New Assets

Acquiring new assets will commit council to fund ongoing operations andmaintenance costs over the period the asset is retained. These future costs areidentified and considered in developing forecasts of future operating andmaintenance costs.

Council proposes to increase annual asset maintenance and operating budgets by1 - 2% of the cost (in real terms) of all new capital expansion projects to ensuresufficient maintenance funds over the lifecycle of all newly created assets.


Significant Capital Expenditure is planned over the next five years for thefollowing Operational Land and Buildings assets.

Table 19 - New Assets Currently Planned for 2012/16

New Asset> $50,000.

Location Early Estimate ofCapital Cost

Cemetery Expansion Walgett $100,000.00Aged Care Facility Walgett $1,000,000.00Council Depot Walgett $3,000,000.00Library Extension Walgett $280,000.00TOTAL $4,380,000.00

Demand Management Strategies

Demand for new services will continue to be managed as follows –

1. Look for non-asset solutions to any forecast increases in demand.

2. Maximize the number of uses and flexibility of our existing assets.

3. Upgrade existing assets when it is clear 1. and 2. above will not suffice.

4. Provide new assets when possible for changes in demand that cannot bemet through 1., 2. or 3. above.

Council’s Demand Management practices also include risk assessment of anyproposed solution from 1 – 4 above. Managing failures is an important part ofany Demand Management Strategy. Reviewing this asset management planannually for the success or failure of Council’s response to future demand is animportant part of our process.

Opportunities identified to date for demand management are shown in Table 20below. Further opportunities will be developed in future revisions of this assetmanagement plan.

Table 20 - Demand Management Strategies

DEMAND FACTOR IMPACTS STRATEGYPopulation Growth

Forecast 9.1% over next tenyears.

Demand on entire range ofCouncil Services.Increased maintenance andcapital costs.Increased frequency ofmaintenance due to higheruse of assets.

- Multi Purpose use of existing Assets.- Develop Council’s Maintenance Policy and Program- Approve Planned New Assets Program.

Demographic Changes

- Ageing Population- Growing Indigenous Population- Increase in Indigenous

population less than 20 Years of

Change in mix of operationalland and building assets andsupporting services required.

Increased maintenance and

- Create or increase age appropriate CouncilServices.- Approve Age Care facility in Walgett- Dementia Centre (LR)- Approve Cemetery Extension / Upgrade


DEMAND FACTOR IMPACTS STRATEGYage. capital costs.

Desired Levels of Service

- More emphasis on economicdevelopment.

- Town beautification.

Need for appropriateIntellectual capital.

Maintenance costs increase.Capital Costs increase.

- Use existing assets for alternative Operational Landand Buildings activities.- Capital expansion where clear need for new facilitiesand or services is identified.- Develop Web based business skills and knowledgewithin Council to promote web based businessopportunities for opal and indigenous art.

Economic factors

Tourism GrowthAgriculture SteadyMining DecliningWeb based BusinessOpportunities.Council Services and Funding

Increase in Visitors to Shire.Increased maintenance andcapital costsAccommodation Restraints.Agricultural product transportrestraints.Mining industry flagging.Need to promote onlinebusinesses for opal andindigenous art.More effective lobbying offederal Government.

- Continue to monitor need for additional campinggrounds and associated amenities and reviewassociated operational maintenance programs.- Promote Mining Industry by approving New OpalCentre initiative in Lightening Ridge.- Lobby for Road funding to facilitate better transportoutcomes for our critically important agricultural baseand quantify impact on maintenance requirements.- Develop programs within Council operations topromote industry, commerce within the Walgett LGAand fund same.

Changes in technology Proposed Web Presenceattracting Visitors.Improved AssetManagement.Internet has opened upbusiness opportunity for opaland indigenous art.

- Promote Web based Business as a key opportunityfor Walgett.


4. Lifecycle Management PlanCouncil’s lifecycle management plan details how Council plans to manage andoperate our operational assets at the agreed levels of service discussed inSection 3. Lifecycle Management is simply a methodology that asks us toconsider and then answer to the following questions.

1. How can we minimize our costs while meeting our agreed levels of serviceto our community?

2. How can we minimise the risks associated with our operational assets?

3. How can we maximise the benefits of our operational assets?

4. How do we ensure that we are spending money on assets that are mostrelevant to our community?

Generically, the information relevant to answering these questions comes from –

1. Physical inspections and assessments of asset condition and performance

a. Planned and reactive maintenance activities

b. Cyclical asset inspections

c. Feedback from operations

d. Community reporting of issues

2. Assessments of future asset wear and tear and the means of maintainingthe assets.

a. Input from maintenance crews

b. Analysis of historical information for trends

3. Asset risk assessments and plans for managing identified risks

a. Actual and forecast costs of providing these assets

b. Historical data from financial systems

c. Budget activities for planned costs

4. Input from the community on current and future suitability.


Management of the entire portfolio of Operational Assets uses the aboveinformation to indicate where and how we should invest the money we haveavailable. Understanding the physical and cost parameters of an asset over itsentire lifecycle allows us to make more informed and cost effective decisions onmaintenance and capital works programs.

Core and Advanced Asset Management

Council’s 2012 Asset Management Plans are the first to be prepared under thenew Integrated Planning and Reporting Process required by the ‘LocalGovernment Act 1993’. As such, they have been prepared as ‘core’ assetmanagement plans guided by the International Infrastructure ManagementManual.

‘Core’ asset management is a ‘top down’ approach which relies on general assetinformation and asset management systems and processes. ‘Advanced’ assetmanagement describes an operation where very detailed asset information hasbeen gathered, collated and categorized over a number of years. Advancedasset management also describes an operation that has developed assetregisters and a data base that can produce detailed reports on demand. Insummary ‘Core’ asset management can be described as a reactive approach tomanaging assets while advanced asset management is a proactive approachsupported by highly evolved data, systems and processes.

Council is well underway in developing its asset management data base, and aconsiderable amount of data gathering has taken place prior to the preparationof this asset management plan. Further information on Council’s AssetManagement Practices is contained in Section 6 (Asset Management Practices) ofthis plan.

The information developed and gathered by Council and how we use thisinformation is outlined below.


Physical Parameters

An asset hierarchy has been developed to segment our assets into simplefunctional classifications. This helps us to formalise the levels at which decisionstake place and also the levels at which data collection and reporting can takeplace. Council delineates all its operational functions between Urban and Ruraland this is reflected in our asset hierarchy.

Figure 3 - Example Asset Hierarchy

A level 1 Asset such as the Walgett Shire Council Office Building contains anumber of Level 2 Assets as illustrated below.

Level 1 Asset

Walgett Shire Council Building

Level 2 Assets

RTA OfficesMale and Female AmenitiesCouncil Offices (Ground Floor)Building Security SystemOffice and Computer EquipmentFlag PolesFencingShipping Container (Storage)

Level 1 Assets as currently recorded in our Asset Register are listed below. Theasset hierarchy will be reviewed for relevance and practicality each year onreview of this asset management plan.

Urban / Rural

Level 1 Asset

Level 2 AssetLevel 2 Asset

Level 2 AssetLevel 2 Asset

Level 2 Asset

Level 2 Asset Level 2 Asset


Table 21 - Level 1 Assets

LEVEL 1 - OPERATIONAL ASSETSNo. COUNCIL OPERATIONAL BUILDINGS LOCATION Type

1 WSL Council Chambers Walgett Office2 Works Depot Walgett Depot/Workshop3 Works Depot Lightning Ridge Depot/Workshop4 Works Depot Collarenebri Depot/Workshop5 Works Depot Burren Junction Depot/Workshop6 Works Depot Carinda Depot/Workshop

No. CEMETERIES LOCATION1 Walgett Cemetery Walgett Cemetery2 Lightning Ridge Cemetery Lightning Ridge3 Collarenebri Cemetery Collarenebri4 Aboriginal Cemetery Collarenebri5 Burren Junction Cemetery Burren Junction6 Carinda Cemetery Carinda7 Cumborah Cemetery Cumborah8 Come By Chance Cemetery Come By Chance

No. COMMUNITY AREAS / FACILITIES LOCATION1 CBD Car park Walgett Car park2 Medical Centre Public Toilets Walgett Toilet3 Montkeila St Toilets Walgett Toilet4 Woolsley House (Library/Internet/Tourist Centre) Walgett Services5 TV Transmitters Walgett Services6 Radio Transmitters Walgett Services7 Bus Shelter Walgett Services8 HACC Dementia Centre Lightning Ridge Services9 TV Transmitters Lightning Ridge Services10 Radio Transmitters Lightning Ridge Services11 Toilet Block Lightning Ridge Services12 Bus Shelter Lightning Ridge Services13 Parking Area Burren Junction Car park14 Parking Area Carinda Car park

No. EMERGENCY SERVICES LOCATION1 SES Headquarters Walgett SES2 RFS Shed Walgett RFS3 SES Shed Lightning Ridge SES4 RFS Shed Lightning Ridge RFS5 SES Shed Collarenebri SES6 RFS Shed Collarenebri RFS7 RFS /SES Shed Carinda RFS/SES8 RFS Shed Cumborah RFS9 RFS Shed Rowena RFS10 RFS Shed Come By Chance RFS

No. STAFF DWELLINGS / MANAGER RESIDENCES LOCATION1 O’Neil Court Walgett House2 Euroka St Walgett Unit3 Euroka St Walgett Unit4 Euroka St Walgett Unit5 Albert St Walgett House6 Montkeila St Walgett House7 Namoi St Walgett House8 Euroka St Walgett House9 Vaughan Pl Walgett House10 Gilbert St Walgett Unit11 Gilbert St Walgett Unit12 Gilbert St Walgett Unit13 Gilbert St Walgett Unit14 Gilbert St Walgett Unit15 Arthur St Walgett Unit16 Racecourse/Showground Residence Walgett House


Workshops, Car parking shelters, Water tanks, Fences and other Level 2 Assetsthat are located within the Level 1 Assets above are recorded in the assetregister.

Asset Condition and Performance

The most reliable information on the asset condition and performance comesfrom physical inspections and assessments. At present, this occurs inconjunction with regular maintenance and operating activities.

Future improvements to Council’s asset management practices will assesswhether scheduled inspections for some assets would provide cost and/orperformance benefits.

Technical Measures of Asset Condition

Useful Life and Asset Age data contained in the Asset Register is a usefulindicator of asset condition, and also as a guide for ongoing maintenanceexpenditure and future capital works to renew, upgrade or replace assets.

At present, the Asset Register contains the only documented indicator of assetcondition. Table 22 below is a summary of the average asset condition ofCouncil’s Operational assets as at June 2011.

Table 22 - Average Asset Condition (Technical Measure)

TownAverage

RemainingLife

AverageCondition

Walgett 47% 3

Lightning Ridge 69% 1

Collarenebri 60% 2

Burren Junction 55% 2

Carinda 46% 2

Cumborah 61% 1

Rowena 78% 2

Come By Chance 54% 1

Note: The condition rating above has been calculated using remaining useful lifeweighted by each asset’s initial capital cost.

This information is valuable for directing the attention of staff responsible forasset management. However, decisions on specific work required to maintain orimprove asset condition will be based on the assessment of individual assets orstructures.


Financial Parameters

In financial terms, lifecycle asset management considers all of the costsassociated with owning, operating and disposing of an asset over its life. Thesecost categories are:

1. Capital or Investment expenditure

2. Maintenance and Operating expenditure

3. Disposal or Demolition expenditure

The lifecycle costs of an asset are reduced by any revenue generated by theasset. For example, dwelling rental paid by staff and Cemetery internment feeswould help offset the costs of owning these assets. Future revisions of this planwill incorporate the revenue-generating aspects of relevant assets.

Financial parameters will be used to aid asset management decision-making,support business cases and grants for capital works, and help forecast and justifybudgets for asset management activities.

Council currently accumulates asset financial information at a reasonable level ofdetail. Practical enhancements to the identification, categorization and trackingof financial information will contribute to a better understanding andmanagement of our asset portfolio.

Asset management information from financial sources is documented in the nextsection 5 (Financial Summary) of this plan.

Maintenance and Operations

Routine maintenance is the regular on-going work that is necessary to keepassets operating, including instances where portions of the asset fail and needimmediate repair to make the asset operational again.

Reactive maintenance is unplanned repair work carried out in responseto service requests and management/supervisory directions.

Planned maintenance is repair work that is identified and managedthrough a maintenance management system (MMS). MMS activitiesinclude inspection, assessing the condition against failure/breakdownexperience, prioritising, scheduling, actioning the work and reporting whatwas done to develop a maintenance history and improve maintenance andservice delivery performance.

Cyclic maintenance is replacement of higher value components/sub-components of assets that is undertaken on a regular cycle includingrepainting, building roof replacement, etc. This work generally falls belowthe capital/maintenance threshold.


At present maintenance expenditures are not separated into reactive, plannedand cyclic maintenance. Council is currently in the process of reviewingmaintenance processes and developing inspection and condition rating regimes.Council will separate our maintenance program into reactive, planned and cyclicin future revisions of this plan.

Formalising these maintenance processes will enable Council to increase theamount of planned and cyclic maintenance within existing budget allocations andassist in developing a more proactive approach to maintenance. This in turnshould reduce the total maintenance costs over time, and enhance the life ofsome assets such that refurbishment or replacement is delayed.

Deferred maintenance activities (i.e. works that are identified for maintenanceand unable to be funded) are to be included in the risk assessment process in theinfrastructure risk management plan.

Current and planned maintenance expenditure levels are considered to beadequate to meet Council’s target of maintaining the overall condition rating ofour operational asset portfolio at Level 2.

Capital Works

Capital works are asset works that renew or improve an existing asset, or createa new asset.

To date, Council has forecast and planned capital works for the next five years.To contribute to a 10 year plan, another 5 years of projected renewals have beenincluded based on expiration of useful lives from the asset register. Current andplanned Capital Works programs are listed in Section 2 (Levels of Service) of thisplan.

Renewal / Replacement Plan

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

Assets requiring renewal are identified from estimates of remaining life obtainedfrom the asset register. These assets are inspected to verify accuracy ofremaining life estimate and to develop a preliminary renewal estimate. Verifiedproposals are ranked by priority and available funds, and scheduled in futureworks programs.

Projected future renewal expenditures are forecast to increase over time as theasset stock ages. Renewals are to be funded from Council’s capital worksprogram and grants where available.

This is further discussed in our Financial Summary in Section 5 of this plan.


New Works Plan – Creation / Acquisition / Upgrading

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

New assets and upgrade/expansion of existing assets are identified from varioussources such as councillor or community requests, proposals identified bystrategic plans, or a general need to meet future demand. The assets areinspected to verify need and to develop a preliminary renewal estimate. Verifiedproposals are ranked by priority and available funds and scheduled in futureworks programs.

New assets and services are to be funded from Council’s capital works programand grants where available. The planned upgrade/new capital works program isshown in the Financial Summary section.

Depreciation

Capital or Investment expenditure usually involves major expenditure topurchase, build or renew an asset that is used over a number of years. Theaverage life of our Operational Buildings assets is approximately 54 years, andOffice Equipment approximately 14 years. When we consider how much it coststo own and operate an asset on a yearly basis, we allocate the original cost of anasset over its estimated life via depreciation expense (an asset that cost $10,000and has an estimated life of 10 years will have costs allocated of $1,000 peryear). This depreciation expense then, rather than the full capital cost, is addedto other yearly expenditures when evaluating costs per year of an asset.

Disposal Plan

Disposal includes any activity associated with disposal of an asset no longer inuse including sale, demolition or relocation.

Council is reviewing assets that have been identified as potential candidates fordisposal over the next four years based on useful life data. Council will inspectthese assets and develop the disposal plan if appropriate. A disposal plan will beincorporated in future versions of this plan.

Table 23 - Assets for Disposal

Asset Reason for Disposal Timing Cash-flow from disposalTBATBATBATBA


Risk Management Plan

In general, risk management inspections are based on inspection at time ofmaintenance servicing to detect risks arising from unforeseen breakdown orvandalism. Customer complaints are also a source of information for assetbreakdown or hazard. Standards for public buildings are met through annualhazard and condition audits such as fire and pest control.

An assessment of risks associated with service delivery from Operational Landand Buildings assets is being developed to assess risks to Council. Council’s riskassessment process seeks to identify credible risks, the likelihood of the riskevent occurring, the consequences should the event occur, develop a risk rating,evaluate the risk and develop a risk treatment plan for non-acceptable risks.Future revisions of this plan will incorporate Risk Assessment and RiskManagement Plans.

Operational Land and Buildings Risk Management Table

Table 24 – Critical Risks and Treatment Plans (Under Development)

OPERATIONAL LAND

Asset What can Happen RiskRating

Risk Treatment Plan

?

1. Fire2. Weed Control3. Pest Control4. Flooding5. Pollution6. Vandalism7. Public Liability

High,Medium or

Low

OPERATIONAL BUILDINGS

Asset What can Happen RiskRating Risk Treatment Plan

?

1. Electrical Fault2. Fire (internal)3. Injury to Staff4. Injury to Public5. Building Equipment6. Security/Vandalism7. Pest Infestation

High,Medium or

Low

OFFICE EQUIPMENT

Asset What can Happen RiskRating Risk Treatment Plan

Software Data LossApplications fit for purpose.Poor Service Provision bySoftware Vendor.Loss of intellectual capital onsoftware systems through staffturnover.

High,Medium or

Low

ComputerEquipment

Data LossFire

High,Medium or

Low


5. Financial SummaryThe financial costs of owning, operating and maintaining an asset are importantconsiderations for asset management.

While it is possible to document and classify the costs of asset management to amicro-level, the extent of data gathering and analysis must delivercommensurate benefits to be worthwhile. The extent to which the Council willimprove and adapt systems and procedures for asset financial management willdepend on legislative and/or regulatory requirements and then practicality.

This section contains the financial analyses and inputs referred to in previoussections of this asset management plan. The financial projections will beimproved as further information becomes available on desired levels of serviceand current and projected future asset performance.

Asset Values

Walgett Shire Council manages a medium-sized portfolio of Operational Assets.The following table shows the value of these assets across the Shire as at 30June 2011.

Table 25 – Operational Asset Values as at 30 June 2011

TownCurrent

ReplacementCost

AnnualDepreciation

AccumulatedDepreciation

Current WrittenDown Value

Land

Walgett $ 760,439 $ 760,439

Lightning Ridge $ 679,368 $ 679,368

Collarenebri $ 44,434 $ 44 434

Burren Junction $ 29,400 $ 29,400

Carinda $ 52,750 $ 52,750

Rowena $ 2,940 $ 2,940

Pokataroo $ 300 $ 300

Buildings

Walgett $ 10,271,983 $ 175,623 $ 5,966,826 $ 4,305,157

Lightning Ridge $ 1,978,319 $ 46,492 $ 383,569 $ 1,594,750

Collarenebri $ 369,301 $ 8,347 $ 169,316 $ 199,986

Burren Junction $ 175,400 $ 3,586 $ 82,493 $ 92,907

Carinda $ 136,750 $ 2,345 $ 80,850 $ 55,900

Cumborah $ 44,000 $ 1,302 $ 12,712 $ 31,288

Rowena $ 47,940 $ 965 $ 12,581 $ 35,359


TownCurrent

ReplacementCost

AnnualDepreciation

AccumulatedDepreciation

Current WrittenDown Value

Come By Chance $ 32,000 $ 800 $ 6,750 $ 25,250

Office Equipment $ 1,113,437 $ 81,524 $ 218,186 $ 895,251

TOTALS $15,738,760 $ 320,983 $ 6,933,283 $ 8,805,477

The depreciated replacement cost/current written down value (currentreplacement cost less accumulated depreciation) will vary over the forecastperiod depending on the rates of addition of new assets, disposal of old assets,and consumption and renewal of existing assets.

Depreciation is the allocation of the cost of the original investment over the lifeof the asset. Depreciation expense values for Operational Buildings are forecastbelow and are in line with projected asset values in the following section.

Figure 4 - Depreciation Projections (10 years)

Additions and Disposals

Asset values are forecast to increase as additional assets are added to the assetstock from construction and acquisition by Council. The graph below shows anestimate of the total cost of the Operational Buildings portfolio incorporatingprojected replacement cost asset values over the planning period, and theconsequent disposals.


Figure 5 - Forecast Asset Portfolio Totals (10 years)

Investment in all proposed Capital works (new assets and refurbishment ofexisting assets) over the next 10 years would mean an increase in the value ofthe portfolio of Operational Land and Buildings of nearly 26%. Of this increase,4% will be asset renewals and 96% new assets.

Detailed plans for Building Capital Works have been forecast for the next fiveyears. The following graphs show the plan total split between New Assets andRenewal of existing assets.

Figure 6 - Planned New Capital Expenditure (5 years)

The large capital expenditures in 2011/2012 and 2014/2015, respectively, arefor the completion of the fully funded HACC Centre in Lightning Ridge and theconstruction of a new Works Depot in Walgett. Other significant expenditures in2012/2013 are for extensions to the Walgett Library and Cemetery.


Figure 7 - Planned Renewal Capital Expenditure (5 years)

As indicated by the graph, there is little refurbishment of assets planned over thenext 5 years.

Figure 8 - Forecast Total Capital Expenditure (10 years)

In forecasting 10 year financial figures, we analysed an additional 5 years ofuseful life expiration to determine if any buildings or structures requiredreplacement. There were none.

The value of $3M in 2014/2015 is for the construction of the planned new CouncilDepot in Walgett.


The value of $1M in 2016/2017 is for the construction of a new Aged CareFacility in Walgett which will be fully funded.

All disposals forecast in Operational Buildings are based on the projectedreplacement of the above assets within the next 10 years.

Figure 9 - Asset Disposal Projections (10 years)

Additionally, Council currently owns a total of 28 properties (Land Only) inLightning Ridge and Walgett with a book value of $663,800, which areearmarked for sale in the future. No forecasts have been made for the expectedrevenue these sales will generate.

As Office Equipment is replaced, old assets will be disposed of. Council forecastsdisposals of primarily end-of-life technology assets over the next 10 years ofapproximately $64,000 per year.

Current Financial Ratios and Trends

Asset Usage and Replenishment

Council reports the rate of annual asset consumption and compares this to assetrenewal and asset upgrade and expansion.

(The ratios below have been calculated for Operational Buildings onlyusing annual averages across 2011 FY actual figures and 5 yearprojections for Capital Expenditure and Depreciation.)


Annual Asset Consumption is the rate at which we are using up our assets.

Annual AssetConsumption

= Depreciation

Depreciable Amount

= $273,631

$14,912,842

= 1.8%

To maintain the status of our asset portfolio and continue to deliver existingservices, the trending rate of Annual Asset Renewal needs to be greater thanconsumption.

This ratio is roughly 1/5 of the Consumption Ratio. This would normally indicate theneed to increase spending over the next 10 years to maintain existing assets andservice levels at a Shire level. However, considering the healthy Upgrade/Expansionratio below, indications are that the Council is replacing some of these assets ratherthan renewing them.

Annual Asset Renewal = Renewal ExpenditureDepreciable Amount

= $51,800$14,912,842

= 0.4%

The trending rate of Annual Upgrades or Expansions indicates at what rate we areexpanding our asset portfolio.

Council’s plans mean an increase in Operational Buildings of more than 7% over thenext 5 years.

AnnualUpgrade/Expansion

= Ann Upgrade ExpansionDepreciable Amount

= $1,101,316$14,912,842

= 7.4%

The above ratios are not consistent across all towns in the Shire, and only havesignificance for Walgett and Lightning Ridge. Overall, the condition ratios forother towns indicate the Operational Buildings are in good condition and shouldnot need renewal or upgrade in the near future. Yearly reviews of this plan willinclude forecasts beyond this period and further consider the need for assetrenewals by individual assets.


Lifecycle Costs

Operational Land and Buildings

The following graphs show the 10 year projections of lifecycle costs forOperational Land & Buildings. That is, Maintenance, Operations, andDepreciation (shown earlier in this section).

Maintenance costs show a spike in 2012 due to flood damage and clean-up.Generally, however, future maintenance and operations costs have been forecastas slowly increasing. These figures are based on actual historical trends.

Figure 10 - Projected Maintenance Expenditure (10 years)

Operations expenditure has been forecast based on historical data. Futureexpenditure is expected to resemble historical expenditure trends.

Figure 11 - Projected Operations Expenditure (10 years)


From the graph below it is obvious that Operating Costs constitute more thanhalf the lifecycle costs. This reflects the high usage of Council buildings toprovide services to the community.

Figure 12 - Average Annual Lifecycle Costs (10 years)

The average annual costs, shown above, reveal that the overall cost per year ofproviding our Operational Land & Buildings will range from around $1.0 – $1.3 M.

The graph below shows forecast Maintenance and Operating Expenditure as apercentage of the Capital cost of all Recreation and Cultural Assets. Thegenerally consistent levels indicate the Operational Buildings Asset Portfolio isheld and maintained in a steady state.

Figure 13 - Projected Asset Expenditure as a % of Asset Value


Office Equipment

A major proportion of the cost of office equipment is and will be devoted toInformation Technology equipment, which has a lifecycle of 3 to 5 years. It istherefore replaced or upgraded regularly.

Maintenance and Support costs for Information Technology are the only ongoingexpense of owning these assets of any discernible value. These costs are highdue to the specialised skills that must be employed, using external serviceproviders.

These costs have been forecast using a 2% uplift applied to actual historicalcosts. Depreciation costs have been forecast based on actual assets plusaverage figures for forecast future purchases and disposals.

The forecast costs of maintaining and operating our Information TechnologyEquipment are shown in the graphs below. Such costs for other office equipmentare negligible.

Figure 14 - Projected Maintenance Expenditure (10 years)


Figure 15 - Projected Operations Expenditure (10 years)

Figure 16 - Average Annual Lifecycle Costs (10 years)

Sustainability of Service Delivery

There are two key indicators for financial sustainability that have beenconsidered in the analysis of the services provided by this asset category, thesebeing –


The effective use of capital to replenish and expand the asset portfolio;and

The management of lifecycle costs for cost minimization while maintainingthe required community service levels.

The previous section shows our forecasts which indicate that we will meet theseobjectives over the next 10 years. However, meeting these objectives relies on–

Capital budget approval and/or grants sufficient to fund these works; and

Implementing asset maintenance practices that result in ongoingreductions in maintenance costs.

Future iterations of this plan will incorporate further analysis of historical trendsand review any variances from the projections in this plan.

Funding Strategy

Projected expenditure identified above is to be funded from Council’s operatingand capital budgets. Council funds construction, maintenance and improvementsto infrastructure assets from a variety of sources, these will include recurrentincome, grant and loan funding or any combination of these depending on thesize and scope of the project.

Key Financial Forecast Assumptions and Confidence Levels

This section details the key assumptions made in presenting the informationcontained in this asset management plan and in preparing forecasts of requiredoperating and capital expenditure and asset values, depreciation expense andcarrying amount estimates.

It is presented to enable readers to gain an understanding of the levels ofconfidence in the data behind the financial forecasts.

Key assumptions made in this asset management plan are:

1. Current asset useful lives contained in the asset register are reasonableestimates of the value of the assets to the community over time.

2. Costs for planned capital works will be approved in future budgets.

3. Historical trends for operating and maintenance costs are a reasonableprediction of future costs, plus an uplift to allow for asset deteriorationover time.


4. The implementation of practical asset management practices will generatesome cost savings.

5. Future budgetary funding for operating and maintenance costs will beapproved.

6. There will be no extraordinary increases or decreases in costs due toeconomic factors (such as aberrant inflation) over the next 40 years.

Financial Forecast Parameters:

1. Depreciation forecasts on operational buildings calculated using anaverage portfolio useful life of 54 years, giving a depreciation rate of 1.8%

2. Depreciation forecasts on office equipment calculated using an averageportfolio useful life of 5 years, giving a depreciation rate of 20%

3. Capital or Investment Expenditure on Operational Buildings, forecast asfollows:

a. 5 years planned capital works (2012 – 2016 FYs)

These figures are further broken up into New or Replacementassets and Renewal/Refurbishment costs

b. 5 years of projected replacements based on expiration of usefullives (2017 – 2021 FYs)

4. Capital or Investment Expenditure on Office Equipment, forecast as anaverage of $70,000 per year for 10 years to cover replacement as assetsdeteriorate or reach obsolescence.

5. Estimated yearly maintenance and operating expenditures, extrapolatedfrom:

a. 4.5 years worth of actual costs, incorporating trends and significantchanges

b. Year on year uplifts of 2% to account for marginal cost increasesover time

c. Cost increases of 3.5% in 2012/2013 to account for council payrises

Accuracy of future financial forecasts may be improved in future revisions of thisasset management plan by the following actions:


1. Periodic reviews of useful lives/depreciation rates as improved conditionand asset consumption information becomes available.

2. Future projected expenditure to be modelled on asset condition.

3. More specific allocation of operating and maintenance costs to individualassets, to provide reliable historical trends.

4. More detailed collection of data for income-producing assets, to offsetagainst asset expenditure.


6. Asset Management PracticesCouncil staff are very familiar with the assets in our Operational Land andBuildings portfolio and the requirements for keeping these in a reasonablecondition. Currently there is little formalization nor documentation of thesepractices, and the Asset Register is used primarily as an accounting resourcerather than a tool for asset management.

The Council plans to address these gaps in the future.

Current Financial and Accounting Systems

Walgett Shire Council uses the ‘Authority’ by Civica software package foraccounting and reporting purposes. Authority has a number of general purposemodules including:

General Ledger

Purchasing

Debtors

Payroll

Rates

Water Billing

Project Costing

Financial reporting is prepared in accordance with the requirements of the LocalGovernment Act 1993 and relevant Australian Accounting Standards.

Current Asset Management Systems

Walgett Shire Council uses the Conquest Infrastructure Asset ManagementSoftware System. Conquest’s asset register supports both the operational andfinancial aspects of Asset Management, and the software integrates withMicrosoft project, Microsoft Office and allows seamless integration withGeographic Information Services (GIS).

The conquest software allows for quick ‘what-if’ analysis to rank assets and/orwork in order of importance based on risk, consequence of failure, economicbenefit or any other user definable parameter.

Council’s Asset Management systems are not integrated with our accounting andfinancial systems from a software interface perspective, however improvementsin this area would require substantial changes to the use of and level ofinvestment in the Authority which also has an asset management softwaremodule available.


Council prepares General Purpose Financial Reports on an annual basis. Thesereports are used in conjunction with our asset management system and datamodels to complete our asset management financials each year.

Accountabilities

Accountability for the operation and management of the asset managementsystem is corporate and requires both the technical, operational and financialareas of Council to be closely involved.

The Finance Manager is responsible for the operation and maintenance of theWalgett Shire Council’s Financial Reporting and Asset Management Systems.

Information Flow Requirements and Processes

The key information flows into this asset management plan are:

Asset register data on size, age, value, remaining life of the network;

Unit rates for categories of work/material;

Adopted service levels;

Projections of various factors affecting future demand for services;

Correlations between maintenance and renewal, including decay models;

Data on new assets acquired by council.

The key information flows from this asset management plan are:

Assumed Works Program and trends;

Resulting budget, valuation and depreciation projections;

Useful life analysis.

Estimate of costs to meet Council’s agreed service levels.

These will impact the Long Term Financial Plan, Workforce Management Plan andCouncil’s higher level Community Strategic Plan.

Planned Areas of Improvement

1. Briefly document current asset management practices.


2. Determine which current practices are suitable to the purpose and meetfundamental asset management principles and which would providebenefits through improvements.

3. Prepare a plan for improvements to be implemented over the next 3years, including

a. Documenting the Condition of all Level 1 and Level 2 assets basedon physical inspection.

b. Developing a 3-year Planned Maintenance Schedule based on AssetConditions from (a.) above.

c. Collecting a complete list of all facilities, structures and otherfixtures in the Operational category which are maintained oroperated by Council. (This is to extend the Asset Register listing,which has a financial basis, to the extent that it can be utilised forasset management purposes.)

d. Re-evaluating the useful lives (for depreciation purposes) of allassets which have been significantly refurbished within the last 5years.

e. Reviewing management and reporting of asset maintenanceexpenditure with a view to giving it more structure in line with thisasset management plan and more correlation to asset conditionsassessed at (a.) above.

f. Adjusting the financial recording of revenue from Operational assetsto permit allocation to all individual income-producing facilities.

4. Evaluate the Asset Register for its suitability in recording and reporting onAsset Management information, and its consequent application in AssetManagement decisions and funding.

5. Review the current structure for recording and reporting AssetManagement expenditure in Authority and determine whether changeswould make the data a more useful Asset Management tool.

6. Review Council’s Asset Management Funding Strategy and BudgetaryProcesses to incorporate information flows between these activities andchanges in Asset Management Practices.

Standards and Guidelines

‘International Infrastructure Management Manual’, Institute of Public WorksEngineering Australia, Sydney, 2006 / 2011


AAS27, ‘Financial Reporting by Local Governments’, Australian AccountingStandards, June 1996

AASB1031, ‘Materiality’, Australian Accounting Standards Board, July 2004

AASB116, ‘Property, Plant and Equipment’, Australian Accounting StandardsBoard, July 2007

In regard to Asset Management Planning, the financial regulations that apply areoutlined as part of the Integrated Planning Framework, especially with regard tothe Long Term Financial Plan.

Further reference may also be made to Council’s Asset Management Policy,Capital Threshold Policy, and planned changes to Financial Systems.


7. Plan Improvement and MonitoringThis document is the first version of the Council’s Operational Land, Buildingsand Office Equipment Asset Management Plan. It is based on knowledge anddata available from existing systems and practices. Throughout the document,there are references to improvements in asset management practices and datacollection as a move from Core to Advanced asset management.

It is important that Asset Management Practices and this overriding plan areused and enhanced as a means of –

Providing suitable Operational Assets to the community, and for use byCouncil;

Ensuring these assets meet criteria for safety, accessibility, and requiredlevels of service; and

Meeting these objectives cost-effectively.

Performance Measures

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

1. The degree to which Levels of Service and Asset Condition are maintainedor improved, evaluated each year as the plan is updated.

2. The degree to which Asset Data quality is improved and the ease withwhich it is collected and evaluated for incorporation in the yearly planupdates.

3. The degree of correlation between Forecast Asset Expenditures (Capitaland Ongoing) and Actual Expenditures improves as asset managementpractices are implemented.

4. The degree to which Maintenance Expenditure shifts from Reactive toPlanned Maintenance activities.

5. The degree to which Community Satisfaction in this area improves overtime.


Improvement Program

The improvement program for this asset management plan is shown in thefollowing table:

Table 26 - Asset Management Plan Improvement Program

Item Description Responsibility Resources Timeline

1 Update Asset Condition informationfor physical inspectionassessments.

Engineering Engineering /Finance /Services

Annual

2 Expand the Planned Capital Worksto cover a 10 year period.

Engineering 2013 FY

3 Prepare a Priority List for requiredCapital Works Renewals andinclude a comparison to thePlanned Capital Works.

Engineering Annual

4 Include Planned Disposals,encompassing aged assets that willbe replaced in the Capital WorksPlan.

Engineering Annual

5 Expand Maintenance andOperations expenditure trends formore detailed categorization, asthese become available.

Engineering TBA

6 Update Asset Lifecycle Costs toinclude the offset of incomegenerated by relevant assets.

Annual

7 Include yearly historical changes inFinancial Ratios and Trends withexplanations for any variances.

Annual

8 Expand the section on RiskManagement to encompass theplanned asset risk assessment.

2013 FY

9 Review improvements in AssetManagement Practices for theireffects on this plan.

Annual

10 Add Capital and MaintenanceFunding Plans (allocation ofpriorities) if future budgets areexpected to fall short of ForecastExpenditures.

Columns 2, 3 and 4 to be reviewed and completed by Council.


Monitoring and Review Procedures

This asset management plan will be reviewed during annual budget preparationand amended to recognise any changes in service levels and/or resourcesavailable to provide those services as a result of the budget decision process.

The Plan has a life of 10 years and is due for revision annually and updatingwithin 1 year of each Council election.


Appendix 1 – Legislative RequirementsCouncil is guided by many National and State level legislative and regulatoryrequirements. These include:

Table 27 - Legislative Requirements

Legislation RequirementLocal Government Act Sets out role, purpose, responsibilities and

powers of local governments including thepreparation of a long term financial plansupported by asset management plans forsustainable service delivery

The Australian Accounting Standards The Australian Accounting Standards BoardStandard, AASB 116 Property, Plant &Equipment, requires that assets be valued, andreported in the annual accounts, which alsoincludes depreciation value (i.e. how fast arethese assets wearing out).

Civil Liability Act 2002 and Civil LiabilityAmendment (Personal Responsibility)Act 2002

Protects the Council from civil action by requiringthe courts to take into account the financialresources, the general responsibilities of theauthority and the compliance with generalpractices and applicable standards.

Disability Discriminations Act, 1992 (a) to eliminate, as far as possible, discriminationagainst persons on the grounds of disability in theareas of:(i) work, accommodation, education, access topremises, clubs, and sport;(ii) the provision of goods, facilities, services andland;(iii) existing laws; and(iv) the administration of Commonwealth laws andprograms; and(b) to ensure, as far as practicable, that personswith disabilities have the same rights to equalitybefore the law as the rest of the community; and(c) to promote recognition and acceptance withinthe community of the principle that persons withdisabilities have the same fundamental rights asthe rest of the community.

Occupational Health and SafetyAct1983

Impacts all operations.

Note public safety – insurance.

Cost implications.

Council’s responsibility to ensure health, safetyand welfare of employees and others at places ofwork.

Public Works Act Role of DPWS in planning and construction ofnew assets.

Environmental Planning andAssessment Act 1979

Requirement for LEP and DCP’s.

Council control of service approvals.

Protection of the EnvironmentOperations Act 1997

This Act aims to prevent the degradation of theenvironment by minimizing the use ofmechanisms that promote various pollutants.

Fisheries Management Act 1994 The objects of this Act are to conserve, developand share the fishery resources of the State for


Legislation Requirementthe benefit of present and future generations

Native Vegetation Act 2003 The act accounts for management of nativevegetation on a regional basis.

Threatened Species Conservation Act1995

The object of this Act is to protect the criticalhabitat of those threatened species, populationsand ecological communities that are endangered.

AS1428-Pts 1-5 (2011)Design for Access and Mobility.

To ensure infrastructure provides access for all.

Work Health & Safety Act 2011 Sets out requirements for safe work practices.National Parks and Wildlife Act 1974 This Act provides the conservation of objects,

places or features (including biological diversity)of cultural value within the landscape.

Standards and Specifications

Insert any council policy standards for Operational Land and Buildings assets.


Appendix 2 – Sustainability RatiosThe accounting and cost estimate data used to calculate Council’s OperationalSustainability Ratios is tabulated below.

Table 28 - Summary Accounting and Cost Estimate Data

Financial Measure 6 Year Total Average Annual ExpenditureCapital Renewal $ 259,000 $ 51,800Capital Upgrade/Expansion $ 5,506,579 $ 1,101,316

10 Year TotalMaintenance Expenditure $ 3,520,201 $ 352,020Operating Expenditure $ 9,284,947 $ 928,495Depreciation $ 3,707,748 $ 370,775

Table 29 - Consumption, Renewal and Upgrade Ratios

Ratio Result Calculation1 Average Annual Asset Consumption 1.8% = Average Annual Depreciation / Depreciable Amount2 Average Annual Rate of Renewal 0.4% = Average Annual Renewal Expenditure / Depreciable Amount3 Average Annual Upgrade/expansion 7.4% = Average Annual upgrade expansion / Depreciable Amount4 Depreciable Amount $14,912,842 = See Depreciable Amount Definition below

NOTE: The above figures are calculated for Operational Buildings only.

1. Average Annual Asset Consumption

The percentage of the portfolio’s asset base consumed during a year. A measure of theaverage annual consumption of our asset portfolio (AAAC) which we express as apercentage of the depreciable amount (AAAC/DA). The Depreciable Amount is a measureof the total value of our asset base for the purpose of calculating this ratio. Depreciationmay be used for AAAC.

2. Average Annual Rate of Renewal

This number is the yearly average of planned renewal expenditure over the planningperiod (ten years). It is a measure of the rate at which assets are being renewed perannum expressed as a percentage of the depreciable amount (Average Capital RenewalExpenditure/DA).

3. Average Annual Upgrade/expansion

This number is the yearly average of planned capital upgrade expenditure over theplanning period (ten years). It is a measure of the rate at which assets are beingupgraded and expanded per annum expressed as a percentage of depreciable amount(Average Capital Upgrade/Expansion Expenditure/DA).

4. Depreciable Amount (DA)

The cost of an asset, or other amount substituted for its cost, less its residual value(AASB 116.6).


Life Cycle Sustainability Index

Table 30 - Life Cycle Sustainability Index

Ratio Result Calculation1 Portfolio Life Cycle Cost $ 1,490,389 = Average Yearly Total Cost of the Asset Portfolio2 Portfolio Life Cycle Expenditure $ 1,273,914 = Planned Expenditure (For Current Year)3 Portfolio Life Cycle Gap $ 216,475 = Difference between 1 & 24 Portfolio Life Cycle Sustainability Index 0.85 = 2 / 1 ( Life Cycle Expenditure / Lifecycle Cost)NOTE: The above figures are calculated for Operational Buildings only and use an Average asset Lifecycle of 40 years.

1. Life Cycle Cost

The life cycle cost is average cost to provide the service over the life of the asset. Itcomprises annual maintenance and asset consumption expense, represented bydepreciation expense. The Life Cycle Cost does not indicate the funds required to providethe service in a particular year. To calculate the Lifecycle Cost of an asset all cashflows,both positive (inflows) and negative (outflows) need to be identified for each year of theuseful life of the asset. Cashflows should be stated in actual cash terms, that is all costsand incomes are at the levels expected in that year. No allowance should be made forinflation.

2. Life Cycle Expenditure

The Life Cycle Expenditure is the actual or planned annual maintenance and capitalrenewal expenditure incurred in providing the service in a particular year. Life Cycle Costmay be compared to Life Cycle Expenditure to give an initial indicator of life cyclesustainability.

3. Life Cycle Gap

A gap between life cycle costs and life cycle expenditure gives an indication as towhether present consumers are paying their share of the assets they are consuming eachyear. The purpose of this Operational Land and Buildings asset management plan is toidentify levels of service that the community needs and can afford and develop thenecessary long term financial plans to provide the service in a sustainable manner.

4. Portfolio Life Cycle Sustainability Index

A sustainability ratio of 1.0 indicates that the current year Maintenance & RenewalExpenditure equals the estimated Annualised Lifecycle Cost. Given that there is a broadrange of variables across the asset network these ratios are reliable as a guide only.

10 Year Sustainability Index

Table 31 - 10 Year Sustainability Ratio

Ratio Result CalculationSustainability index (10 Year) TBA = Current Year LTFP Funding Allocation / 10 Yr Required Expenditure Estimate.

This ratio is identical to the lifecycle sustainability ratio above in concept. It simplyproduces an index calculated for the planning period (10 years) rather than the life of theasset which could be 60 years or more.

A sustainability index of 1.0 indicates that the current year Long Term Financial Planbudget allocation equals the estimated Annualised cost of maintaining the assets to meetagreed service levels over the next ten years.


Appendix 3 – Definitions

Annual Service CostAn estimate of the cost that would be tendered, perannum, if tenders were called for the supply of a serviceto a performance specification for a fixed term. TheAnnual Service Cost includes operating, maintenance,depreciation, finance/ opportunity and disposal costs,less revenue.

Asset CategoryGrouping of like assets, e.g. all Urban Parks.

Asset ClassGrouping of like asset categories, e.g. Parks, Gardens,Reserves, Sporting Facilities and Swimming Pools are allpart of the asset class of Recreation and Culture.

Asset Condition AssessmentThe process of continuous or periodic inspection,assessment, measurement and interpretation of the datato indicate the condition of a specific asset.

Asset ManagementThe combination of management, financial, economic,engineering and other practices applied to physicalassets with the objective of providing the required level ofservice in the most cost effective manner.

AssetsFuture economic benefits controlled by the entity as aresult of past transactions or other past events(AAS27.12).Property, plant and equipment including infrastructureand other assets (such as furniture and fittings) withbenefits expected to last more than 12 months.

Average Annual Asset ConsumptionThe amount of a local government’s asset baseconsumed during a year. This may be calculated bydividing the Depreciable Amount (DA) by the Useful Lifeand totalled for each and every asset OR by dividing theFair Value (Depreciated Replacement Cost) by theRemaining Life and totalled for each and every asset inan asset category or class.

Brownfield Asset ValuesAsset revaluation values based on the cost to replace theasset including demolition and restoration costs.

Capital Expansion ExpenditureExpenditure that extends an existing asset, at the samestandard as is currently enjoyed by residents, to a newgroup of users. It is discretional expenditure, whichincreases future operating, and maintenance costs,because it increases council’s asset base, but may be

associated with additional revenue from the new usergroup. e.g. provision of a new swimming pool in a newproperty development for new residents.

Capital ExpenditureRelatively large (material) expenditure which has benefitsexpected to last for more than 12 months. Capitalexpenditure includes renewal, expansion and upgrade.Where capital projects involve a combination of renewal,expansion and / or upgrade expenditures, the totalproject cost needs to be allocated accordingly.

Capital FundingFunding to pay for capital expenditure.

Capital GrantsMonies received generally tied to the specific projects forwhich they are granted, which are often upgrade and/orexpansion or new investment proposals.

Capital New ExpenditureExpenditure which creates a new asset providing a newservice to the community. As it increases servicepotential it may impact revenue and will increase futureoperating and maintenance expenditure.

Capital Renewal ExpenditureCapital renewal is expenditure on an existing asset,which increases asset service potential of an existingasset. This may be to the same or a lower level thaninitially provided (partial renewal). It is periodicallyrequired expenditure, relatively large (i.e. material) invalue compared with the value of the asset or assetcomponent being renewed. As it reinstates existingservice potential, it has no impact on revenue but mayreduce future operating and maintenance expenditure ifcompleted at the optimum time (e.g. replacing bridgedecking or resurfacing an oval). Where renewal worksinclude a significant upgrade, the renewal and upgradecomponents should be separately identified (e.g. if aswimming pool with a replacement cost of $2m isreplaced with a $9m leisure centre, then $2m is identifiedas renewal and $9m as upgrade).

Capital Upgrade ExpenditureExpenditure which enhances an existing asset to providea higher level of service or expenditure that will increasethe life of the asset beyond that which it had originally.Upgrade expenditure is discretional and often does notresult in additional revenue unless direct user chargesapply. It will increase operating and maintenanceexpenditure in the future because of the increase inCouncil’s asset base (e.g. enlarging a grandstand at a


sporting facility, replacing an existing bridge with onehaving a greater carrying capacity). Where capitalprojects involve a combination of renewal, expansion and/ or upgrade expenditures, the total project cost needs tobe allocated accordingly.

Carrying AmountThe dollar amount at which an asset is recorded afterdeducting any accumulated depreciation / amortisationand accumulated impairment losses thereon.

ComponentAn individual part of an asset which contributes to thecomposition of the whole and can be separated from orattached to an asset or a system.

Cost of an AssetThe amount of cash or cash equivalents paid or the fairvalue of the consideration given to acquire an asset atthe time of its acquisition or construction, plus any costsnecessary to place the asset into service. This includesone-off design and project management costs.

Current Replacement CostThe cost the entity would incur to acquire the asset onthe reporting date. The cost is measured by reference tothe lowest cost at which the gross future economicbenefits could be obtained in the normal course ofbusiness or the minimum it would cost, to replace theexisting asset with a technologically modern equivalentNEW asset with the same economic benefits (grossservice potential) allowing for any differences in thequantity and quality of output and in operating costs.

Current Replacement Cost “As New”The current cost of replacing the original service potentialof an existing asset, with a similar modern equivalentasset, i.e. the total cost of replacing an existing asset withan as NEW or similar asset expressed in current dollarvalues.

Cyclic Maintenance**Replacement of higher value components / sub-components of asset undertaken on a regular cycleincluding repainting, building roof replacement, cycle,replacement of air conditioning equipment, etc. This workgenerally falls below the capital / maintenance thresholdand needs to be identified in a specific maintenancebudget allocation.

Depreciable AmountThe cost of an asset, or other amount substituted for itscost, less its residual value (AASB 116.6)

Depreciated Replacement Cost

The current replacement cost of an asset less, whereapplicable, accumulated depreciation calculated on the

basis of such cost to reflect the already consumed orexpired future economic benefits of the asset

Depreciation / AmortisationThe systematic allocation of the depreciable amount ofan asset over its useful life.

Fair ValueThe amount for which an asset could be exchanged, or aliability settled, between knowledgeable, willing parties, inan arm’s length transaction.

Greenfield Asset ValuesAsset (re)valuation values based on the cost to initiallyacquire the asset.

Heritage AssetAn asset with historic, artistic, scientific, technological,geographical or environmental qualities that is held andmaintained principally for its contribution to knowledgeand culture and this purpose is central to the objectivesof the entity holding it.

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

Infrastructure AssetsPhysical assets of the entity or of another entity thatcontribute to meeting the public's need for access tomajor economic and social facilities and services, e.g.roads, drainage and sewerage. The components of theseassets may be separately maintained, renewed orreplaced individually so that the required level andstandard of service from the network of assets iscontinuously sustained. Generally the components andhence the assets have long lives. They are fixed in placeand are often have no market value.

Investment propertyProperty held to earn rentals or for capital appreciation orboth, rather than for:(a) use in the production or supply of goods or servicesor for administrative purposes; or(b) sale in the ordinary course of business (AASB 140.5)

Level of ServiceThe defined service quality for a particular serviceagainst which service performance may be measured.

Life Cycle CostThe life cycle cost is average cost to provide the serviceover the longest asset life cycle. It comprises annualmaintenance and asset consumption expense,represented by depreciation expense. The Life CycleCost does not indicate the funds required to provide theservice in a particular year.


Life Cycle ExpenditureThe Life Cycle Expenditure is the actual or plannedannual maintenance and capital renewal expenditureincurred in providing the service in a particular year. LifeCycle Cost may be compared to Life Cycle Expenditureto give an initial indicator of life cycle sustainability.

Maintenance and Renewal GapDifference between estimated budgets and projectedexpenditures for maintenance and renewal of assets,totalled over a defined time (usually 10 - 20 years).

Maintenance and Renewal Sustainability IndexRatio of estimated budget to projected expenditure formaintenance and renewal of assets over a defined time(usually 10 - 20 years).

Maintenance ExpenditureRecurrent expenditure, which is periodically or regularlyrequired as part of the anticipated schedule of worksrequired to ensure that the asset achieves its useful lifeand provides the required level of service. It isexpenditure, which was anticipated in determining theasset’s useful life.

MaterialityAn item is material if its omission or misstatement couldinfluence the economic decisions of users taken on thebasis of the financial report

Modern Equivalent Asset.A structure similar to an existing structure and having theequivalent productive capacity, which could be built usingmodern materials, techniques and design. Replacementcost is the basis used to estimate the cost of constructinga modern equivalent asset.

Non-Revenue Generating InvestmentsInvestments for the provision of goods and services tosustain or improve services to the community that are notexpected to generate any savings or revenue to theCouncil, e.g. Parks, playgrounds, footpaths, roads andbridges.

Operating ExpenditureExpenditure on providing a service, which is continuouslyrequired including staff salaries and wages, plant hire,materials, power, fuel, accommodation and equipmentrental, on-costs and overheads. Operating expenditureexcludes maintenance and depreciation.

Planned MaintenanceRepair work that is identified and managed through amaintenance management system (MMS). MMS

activities include inspection, assessing the conditionagainst failure / breakdown criteria / experience,prioritizing scheduling, actioning the work and reportingwhat was done to develop a maintenance history andimprove maintenance and service delivery performance.

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

Rate of Annual Asset RenewalA measure of the rate at which assets are being renewedper annum expressed as a percentage of depreciableamount (capital renewal expenditure / DA).

Rate of Annual Asset UpgradeA measure of the rate at which assets are beingupgraded and expanded per annum expressed as apercentage of depreciable amount (capital upgrade orexpansion expenditure / DA).

Reactive MaintenanceUnplanned repair work that carried out in response toservice requests and management / supervisorydirections.

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

Recurrent ExpenditureRelatively small (immaterial) expenditure or that whichhas benefits expected to last less than 12 months.Recurrent expenditure includes operating andmaintenance expenditure.

Recurrent FundingFunding to pay for recurrent expenditure.

Remaining LifeThe time remaining until an asset ceases to provide therequired service level or economic usefulness. Age plusremaining life is useful life.

RenewalSee capital renewal expenditure definition above.

Residual ValueThe net dollar amount which an entity expects to obtainfor an asset at the end of its useful life after deducting theexpected costs of disposal.

Revenue Generating Investments


Investments for the provision of goods and services tosustain or improve services to the community that areexpected to generate some savings or revenue to offsetoperating costs.

Risk ManagementThe application of a formal process for the managementof risk which determines identifies a possible range ofoutcomes and their probability of occurrence.

Section or SegmentA self-contained part or piece of an infrastructure asset.

Service PotentialThe capacity to provide goods and services inaccordance with the entity's objectives, whether thoseobjectives are the generation of net cash inflows or theprovision of goods and services of a particular volumeand quantity to the beneficiaries thereof.

Service Potential RemainingA measure of the remaining life of assets expressed as apercentage of economic life. It is also a measure of thepercentage of the asset’s potential to provide a servicethat is still available for use in providing services(DRC/DA).

Useful lifeEither:(a) the period over which an asset is expected to beavailable for use by an entity, or(b) the number of production or similar units expected tobe obtained from the asset by the entity.It is estimated or expected time between placing theasset into service and removing it from service, or theestimated period of time over which the future economicbenefits embodied in a depreciable asset, are expectedto be consumed by the council. It is the same as theeconomic life.


Appendix 4 – Strategic Lifecycle ModelExpenditure Types

Expenditure on infrastructure works can be split into two types:

1. Operations and Maintenance

2. Capital

These can be further classified as shown below:

Maintenance Expenditure on an asset which maintains the asset in usebut does not increase its service potential or life, e.g.repairing a pothole in a road, repairing the decking on atimber bridge, unblocking a pipe, repairing the fencing in apark, repair work to prevent early failure of an asset or aportion of an infrastructure network.

Capital Renewal Expenditure on renewing an existing asset or a portion of aninfrastructure network which increases the service potentialor extends the life, e.g. rebuilding grandstands, re-sheetingpart of a road, renewing a section of a drainage network,major maintenance on bridge pylons, resurfacing an oval.

The Two Expenditures Below add to Future LiabilitiesCapital Expansion Expenditure on extending an infrastructure network, at the

same standard currently enjoyed by existing residents, to anew group of users, e.g. extending a drainage or roadnetwork, the provision of a sports oval or park in a new partof town.

Capital Upgrade Expenditure on upgrading the standard of an existing assetorinfrastructure network to provide a higher level of service tousers, e.g. widening the pavement and sealed area of anexisting road, replacing drainage pipes with pipes of agreater capacity, building a new grandstand at a sportingfacility, replacing an existing bridge with one having agreater carrying capacity, replacing a wood park bencheswith higher grade aluminium benches.

1. Capital upgrade and expansion commit council to fund ongoing budgetliabilities for operations, maintenance, depreciation and finance costs forthe life of the asset.

2. Capital renewal works restore existing service levels and do not add tobudget liabilities. Well-planned capital renewal works can reduce operatingand maintenance costs by reviewing service levels, use of automation andmore energy efficiency equipment.


About Useful Life Figures (also referred to as Economic Life)

The level of analysis behind the adopted useful life of assets is a critical to theaccuracy of the lifecycle model used by Asset Managers.

A lack of practical or realistic useful life information can create a situation wherelifecycle and sustainability ratios are questionable in terms of their meaning. Thiscan only be addressed over time through the accumulation of reliable useful lifedata.

Depreciation

Depreciation is the measure of the consumption of service potential (the rate atwhich an asset is “used up”. The two primary variables in the calculation ofdepreciation are:

1. The age of the asset (service potential consumed to date)

2. The remaining life of the asset (how much service potential remains)

The useful life of an asset is the sum of these two variables. The averagedepreciation over the life of the asset is the current replacement value per assetdivided by the useful life. The current depreciation is the written down currentreplacement cost divided by the remaining life.

The progressive failure and renewal of an asset means that the renewalexpenditure and useful life are distributions and not single values. Actual assetbehaviour needs to be understood and interpreted for useful asset managementand financial reporting.

Useful Life Information

The total economic life for most road asset pavements is unknown. Of a sampleof over 150 councils from SA, VIC, NSW and TAS, none have a statistical basisfor useful life.

Therefore, detailed analysis of useful life is critical to ensure financial reports donot dramatically either over or understate the actual depreciation. Errors likely tomaterially affect financial reports are caused by:

1. Over or underestimating useful life.

2. The limits of using condition based analysis to predict future remaining lifewhere there is not statistical basis to determine the relationship betweencondition and remaining life.

3. Over or understating the assets current replacement cost.


Breaking assets into components and having a realistic basis for assessing usefullife, remaining life and asset depreciation is the solution that will bring reliabilityand meaning to sustainability ratios.

Renewal Values

Asset valuation is an essential management tool. It assists in the determinationand allocation of costs and provides performance/rate of return reporting,resource allocation, shareholder equity and accountability.

Asset Consumption

The consumption of an asset is calculated as the current replacement value perasset divided by the economic life. This is described as the Average AnnualAsset Consumption (AAAC) and indicates the average annual renewalexpenditure required to sustain the asset.

Renewal Gaps

The renewal gap is the difference between current maintenance/renewalexpenditure and the estimated lifecycle cost. Ideally the Sustainability Ratio foran asset or asset group should be 1.0. A sustainability ratio of 1.0 indicates thatthe current Maintenance & Renewal Expenditure equals the estimated AnnualisedLifecycle Cost. Given that there is a broad range of variables across the assetnetwork these ratios are reliable for the purposes of indicating the overall statusof the current situation.

However they are indicative only, given the data used in the analysis and theunknowns relating to economic life of long life assets, a range of SustainabilityRatio between 0.8 and 1.2 is considered to represent a satisfactory situation.

Sustainability Ratios of less than 0.8 provide an indication that the long-termsustainability of the asset may not be possible and that more detailed review isrequired. The Council’s asset management position has been analysed todetermine how the assets are being consumed by present citizens and the rate ofasset renewal. This gives a snapshot of average age of the assets, and how therate of asset consumption compares to the rate of asset renewal.

The analysis undertaken in formulating this asset management plan indicatedthat the renewal of assets is significantly less than the consumption of assetsmeaning there is a funding gap. However, this gap will likely be offset by thereplacement of aging assets indicated by the high upgrade/expansion ratio.

Any funding gap in future years may be managed by:

Improving asset knowledge (performance, condition and remaining life)

Rationalising (disposing of) unnecessary and low-use assets


Improving maintenance to extend asset lives and defer projected renewal

Improving efficiency in delivery of maintenance and renewal

Developing and using low cost renewal methods

Lowering service levels

Increasing renewal funding


Appendix 5 – Planned Capital Expenditure by Asset CategoryThe 5-year capital works plan has been allocated to specific assets. The following graphs provide an overview of where thesefunds have been allocated.

Figure 17 - 5 Year Total Capital Works Program by Asset Category


Figure 18 - 5 Year New Capital Works Program by Asset Category

NOTE: Funding from Grants has not been included to offset total costs.


Figure 19 - 5 Year Renewal Capital Works Program by Asset Category


Appendix 6 – Planned Capital Expenditure by TownThe following graphs provide an overview of where these funds have been allocated.

Figure 20 - 5 Year Total Capital Works Program by Town

AssetCategory Walgett Lightning

Ridge Collarenebri BurrenJunction Carinda Cumborah Rowena Pokataroo Total CAPEX

Water $ 5,163,000 $ 762,477 $ 495,000 $ - $ 27,000 $ - $ 17,500 $ - $ 6,464,977Stormwater $ 10,335,000 $ 90,000 $ - $ - $ - $ - $ - $ - $ 10,425,000Solid Waste $ 6,100,000 $ 400,000 $ 100,000 $100,000 $100,000 $ - $100,000 $100,000 $ 7,000,000Sewerage $ 2,613,000 $ 169,000 $ 111,500 $ - $ - $ - $ - $ - $ 2,893,500Roads $ 200,000 $ 65,000 $ - $ - $ - $ - $ - $ 265,000Econ Af $ 1,525,000 $ 79,500 $ 121,731 $ - $ - $ - $ - $ - $ 1,726,231Op Bldg $ 4,677,000 $ 982,079 $ 12,000 $ - $ - $ 90,000 $ 4,500 $ - $ 5,765,579Rec & Cult $ 3,494,700 $ 3,323,000 $ 2,925,100 $480,584 $245,500 $ - $236,500 $ - $ 10,705,384Total CAPEX $ 33,907,700 $ 6,006,056 $ 3,830,331 $580,584 $372,500 $ 90,000 $358,500 $100,000 $ 45,245,671


While the total Capital Plan for Walgett looks extreme by comparison to the othertowns in the Shire, $31M is allocated to large one-off projects, and includes $4Mof external funding:

Levee rehabilitation

New Landfill

New Depot

PCYC Youth Centre (possibly fully funded)

New Aged Care Facility – 2016/2017 (fully funded)

Aerodrome upgrade (30% subsidised via grants)

Water reticulation and Sewerage systems

Namoi Sewerage improvement

Figure 21 - Walgett - 5 Year Total Capital Works Program


As discussed earlier in this plan, Lightning Ridge and Collarenebri capital planseach include $2M for a new Youth Centre, shown below in the large segments forRecreation and Culture. Final construction of the HACC centre in Lightning Ridgewill be completed in the 2011/2012 FY, explaining the large segment forOperational Buildings. Construction of this facility is fully funded by Grants.

Figure 22 - Lightning Ridge - 5 Year Total Capital Works Program

Figure 23 - Collarenebri - 5 Year Total Capital Works Program

The majority of the capital plans for Burren Junction involve the School of ArtsHall and the Evaporation Pond for the Bore Baths.


Figure 24 - Burren Junction - 5 Year Total Capital Works Program

Plans for Carinda include two new Toilet/Shower blocks for the Swimming Pooland the Showground/Racecourse.

Figure 25 - Carinda - 5 Year Total Capital Works Program

Construction of a Meeting Room is planned for Cumborah.


Figure 26 - Cumborah - 5 Year Total Capital Works Program

Significant work is planned for the Rowena Town Hall, and adaptation of theSports Oval to accommodate Camping Facilities.

Figure 27 - Rowena - 5 Year Total Capital Works Program


Figure 28 - Pokataroo - 5 Year Total Capital Works Program

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