audit committee notice of meeting - ahc home€¦ · 29/10/2012 7.3 internal audit programme...

AUDIT COMMITTEE

NOTICE OF MEETING

To: Presiding Member Peter Brass

Members Peter Robertson Allen Bolaffi Kate Hosking Jan Loveday

Notice is hereby given pursuant to the provisions under Section 88 of the Local Government Act 1999 that the next meeting of the Audit Committee will be held on:

Monday, 17 June 2013 63 Mt Barker Road, Stirling

6.00pm A copy of the Agenda for this meeting is supplied under Section 88 of the Act. Meetings of the Council and Committees are open to the public and interested members of this community are welcome to attend.

Andrew Aitken Chief Executive Officer

AGENDA FOR AUDIT COMMITTEE MEETING Monday, 17 June 2013

63 Mt Barker Road, Stirling 6.00pm

ORDER OF BUSINESS Council Vision To value our diversity, our landscape and our people Council Mission To improve services and protect our landscape for the people who live and

visit our area by providing quality and appropriate infrastructure, planning, community services and good governance

1. COMMENCEMENT

2. APOLOGIES

3. MINUTES OF PREVIOUS MEETINGS

3.1. Audit Committee Meeting held on 29 April 2013 Recommendation That the minutes of the Audit Committee meeting held on 29 April 2013, as distributed, be confirmed as an accurate record of the proceedings of that meeting.

4. DELEGATION OF AUTHORITY The Audit Committee operates in accordance with the relevant sections of the Local Government Act 1999, and its Terms of Reference.

5. DECLARATION OF INTEREST BY MEMBERS OF COMMITTEE

6. REPORTS

6.1. Audit Committee Action Report ............................................................

6.2. 2012/2013 Budget – Budget Review 3 .................................................

6.3. 2013/2014 Annual Business Plan and Budget .....................................

6.4. Business Excellence Update ...............................................................

6.5. 2013 Audit Plan ...................................................................................

6.6. Revised Capitalised Assets Policy .......................................................

7. NEXT MEETING The next Audit Committee meeting will be held at 6.00pm on Monday, 30 September 2013, at 63 Mount Barker Road, Stirling

8. CLOSE AUDIT COMMITTEE MEETING

ADELAIDE HILLS COUNCIL AUDIT COMMITTEE MEETING Monday 17 June 2013

AGENDA BUSINESS ITEM

Item: 6.1 Originating Officer: Tim Piper, Director Finance Subject: Audit Committee Action Report File No: 09.14.1 SMP: Goal 5: Open Effective and Efficient Governance SMP Key Issue: 5.4: Financial Responsibility

1. SUMMARY

A formal Audit Committee Action Report is maintained to record the items requiring ‘actioning’ resulting from each of the Audit Committee meetings.

2. DISCUSSION The Audit Committee Action Report is attached (Appendix 1). There is currently one action outstanding.

3. RECOMMENDATION That the Action Report be noted.

4. APPENDICES (1) Audit Committee Action Report

Appendix 1 Audit Committee Action Report

Date Item Topic Action Responsible

Officer

Progress

6/02/2012 6.1 Internal Audit Report - Elections, June 2010 Council Management to report the status of the internal audit report

recommendations to the Audit Committee at each meeting until completed

Tim Piper Completed

6/02/2012 6.3 Whistleblowers Protection Policy Recommend the Whistleblowers Protection Policy & Procedures to Council for

adoption

Tim Piper Completed

6/02/2012 6.4 Revised Capitalised Assetts Policy Recommend the revised Capitalised Assets Policy to Council for adoption Tim Piper Completed

6/02/2012 6.4 Revised Capitalised Assetts Policy Use the revisded Capitalised Assets Policy for the accounting treatment of

capitalised assets for future General Purpose Financial Statements

Paul Francis Completed

6/02/2012 6.5 Business Excellence Provide Audit Committee with six monthly verbal updates Tim Piper Completed

2/04/2012 6.4 Internal Audit Programme Management prepare a further revised programme until 2014/15 for the next

meeting

Tim Piper Completed

29/10/2012 7.3 Internal Audit Programme Management to develop a risk based internal Audit 3 year plan covering both

strategic and operational areas, and report back to the Audit Committee in

February 2013

Tim Piper Completed

29/10/2012 8.1 Banking and Bill Payment Services, Contract

No. 28/12 – Exclusion of the Public

Awarding of Contract No. 28/12 endorsed adoption by Council supported.

Prepare report for Council.

Tim Piper Completed

12/11/2012 6.1 2011/12 Annual Financial Statements Advise Council's external auditor Tim Piper Completed

12/11/2012 - Matter Arising That staff compile a tender document to be used for the purpose of appointing an

Auditor and refer back to the Audit Committee.

Tim Piper Completed

11/02/2013 6.2 Long Term Financial Plan - Public

Consultation

Prepare report for Council adoption Tim Piper Completed

11/02/2013 6.3 Procurement & Purchasing Policy Provide information on purchasing volume & value profiles & the operation of

internal controls over the last two years

Tim Piper Completed

11/02/2013 7.1.1 External Audit Services Prepare report for Council adoption Tim Piper Completed

29/04/2013 6.2 Procurement & Purchasing Policy A further review of the Policy to be scheduled for the second half of 2013, and

again in 2014 - refer minute

Tim Piper

ADELAIDE HILLS COUNCIL AUDIT COMMITTEE ACTION REPORT

http://teams.ahc.sa.gov.au/finance/Audit Committee/Action Report/Audit Committee Action Report.xls Page 1


AGENDA BUSINESS ITEM Item: 6.2 Originating Officer: Paul Francis, Financial Controller Responsible Director: Tim Piper, Director Finance Subject: 2012/13 Budget – Budget Review 3 File No: 07.11.13 SMP Goal: Goal 5: Open, Effective & Efficient Governance SMP Key Issue: 5.4: Financial Responsibility

1. SUMMARY

Under the requirements of the Local Government Act 1999, a Council must undertake a review of its Budget at least four times throughout the financial year, the final review being the actual results for the prior financial year. This review considers actual results for the third quarter ended 31 March 2013, and adjusts capacity for the remainder of the 2012/13 Budget Period accordingly.

2. GOVERNANCE � Strategic Management Plan / Council Policy The Strategic Management Plan recognises the importance of good governance and responsible financial management. � Legislation The undertaking of formal budget reviews is a requirement of the Local Government Act 1999, and the Local Government (Financial Management) Regulations 2011. � Sustainability

Economic Social Environmental Governance

Sustainability indicators and performance measures are included in the attached reports.

Adelaide Hills Council Audit Committee Meeting 17 June 2013 2012/13 Budget – Budget Review 3

Page 2

� Budget

This report presents the relevant information in the required format, consistent with the adopted financial statements. � Consultation

Not Applicable

3. BACKGROUND Section 9(1)(b) of the Local Government (Financial Management) Regulations 2011 requires quarterly consideration of the Council’s budget for a particular financial year. Council’s customary practice is to include Budget Reviews as an agenda item at Audit Committee meetings. Due to timing of Audit Committee meetings and the prescribed timelines required by Section 9(1)(b) of the Local Government (Financial Management) Regulations 2011 it is not always possible for the Audit Committee to receive and note the Budget Review prior to Council’s adoption. This Budget Review was considered by Council at a Special Meeting on 28 May 2013 where it was resolved:

That the favourable Operating Budget Variations presented in Budget Review 3 (2012/13) totalling $120k, bringing the Adjusted 2012/13 Budget Operating Surplus for the year to $180k, and adverse Capital Budget Variations totalling $89k be adopted.

4. DISCUSSION The budget review and quarterly reports (Appendix 1) have been prepared in consultation with Directors and Managers to obtain detailed information for each budget area. Budget Review 3 Variations During the first quarter, some items have been identified that require consideration as part of Budget Review 3. Council’s administration has reviewed the 2012/13 budget and proposes an alteration to the Adjusted Budgeted Operating Surplus of $60k by $120k favourable to show an Adjusted Operating Surplus of $180k. This generation of this additional surplus during the year will help to meet the increased capital costs also identified during the year, $89k in this period Operating Extra materials for Infrastructure maintenance of $123k (total related budget $649k), extra tree limbing costs of $44k (total related budget $327k) and property maintenance of $25k (total related budget $120k) are more than offset by savings in waste disposal of $(146)k (total related budget $886k), weed spraying $(51)k (total related budget $131k) and CWMS Maintenance $(60)k (total related budget $169k).. A detailed “walkthrough” of BR2 Operating items is disclosed in Appendix 2.

Adelaide Hills Council Audit Committee Meeting 17 June 2013 2012/13 Budget – Budget Review 3

Page 3

Capital During this period the following amendments to the capital budget have been required: • Avenue Road Roundabout Cycle Track construction $135k, offset by

additional Federal grant funding of $90k, so net $45k cost to Council. • Library stock, Council funded purchases, DVDs $19k, books $19k and CDs

$6k. (These were identified during preparation of the new 2013/14 budget, having been incorrectly deleted from the adopted 2012/13 budget summary. This item represent Council’s recurrent purchasing programme and effectively corrects an error in the current year capital budget.)

A detailed “walkthrough” of BR2 Capital items is disclosed in Appendix 3.

5. RECOMMENDATION

That the Audit Committee note the favourable Operating Budget Variations presented in Budget Review 3 (2012/13) totalling $120k, bringing the Adjusted 2012/13 Budget Operating Surplus for the year to $180k, and adverse Capital Budget Variations totalling $89k.

6. APPENDIX (1) Budget Review 3 – Statutory Financial Statements (2) Budget Review 3 – Operating Detailed Walkthrough

Appendix 1 Budget Review 2 – Statutory Financial Statements

2012/13

Original

Budget BR1 BR2 BR3

2012/13

Adjusted

Budget

$'000

OPERATING INCOME

Rates 29,719 (2) 29,717

Statutory Charges 965 (58) 907

User Charges 1,045 25 21 9 1,100

Grants and Subsidies 3,182 285 382 3,849

Investment Income 85 (10) 75

Reimbursements 222 12 (17) (1) 216

Other Income 1,122 23 50 (3) 1,192

Joint Ventures

TOTAL INCOME 36,340 343 368 5 37,056

OPERATING EXPENSES

Employee Costs 12,661 (29) 90 (2) 12,720

Materials,Contracts & Other Services 15,727 401 274 (113) 16,289

Finance Costs 587 (5) 582

Depreciation 7,285 7,285

Joint Ventures

TOTAL OPERATING EXPENDITURE 36,260 367 364 (115) 36,876

NET BUDGETED SURPLUS/ (DEFICIT) 80 (24) 4 120 180

BEFORE CAPITAL AMOUNTS

Less: Net Outlays on Existing Assets Capital Expenditure on Renewal and Replacement of

Existing Assets 10,288 (93) 520 179 10,894

Unwind Waste Remediation -

Provision for Waste Remediation - -

Proceeds from Sale of Replaced Assets - -

Depreciation (7,285) - - - (7,285)

NET OUTLAYS ON EXISTING ASSETS 3,003 (93) 520 179 3,609

Less: Net Outlays on new and Upgraded Assets Capital Expenditure on New and Upgraded Assets &

Remediation costs 370 676 1,046

Capital Grants and Monetary Contributions for New and

Upgraded Assets (625) (423) (520) (90) (1,658)

Proceeds from Sale of Surplus Assets (250) (70) (320)

NET OUTLAYS ON NEW AND UPGRADED ASSETS (505) 183 (520) (90) (932)

Other Comprehensive Income

Asset Revaluations - -

Joint Ventures - -

- - - - -

Repayment of borrowings

GST Adjustment

Net Lending/ (Borrowing) for Financial Year (2,418) (114) 4 31 (2,497)

ADELAIDE HILLS COUNCIL

BUDGETED FUNDING STATEMENT

2012/13 Adopted Budget

2012/13

Original Budget BR1 BR2 BR3

2012/13

Adjusted

Budget

$'000

OPERATING INCOME

Rates 29,719 (2) - - 29,717

Statutory Charges 965 - (58) - 907

User Charges 1,045 25 21 9 1,100

Grants and Subsidies 3,182 285 382 - 3,849

Investment Income 85 - (10) - 75

Reimbursements 222 12 (17) (1) 216

Other Income 1,122 23 50 (3) 1,192

Joint Ventures

TOTAL INCOME 36,340 343 368 5 37,056

OPERATING EXPENSES

Employee Costs 12,661 (29) 90 (2) 12,720

Materials, Contractual & Other Services 15,727 401 274 (113) 16,289

Finance Costs 587 (5) - - 582

Depreciation 7,285 - - - 7,285

Joint Ventures

TOTAL OPERATING EXPENDITURE 36,260 367 364 (115) 36,876

OPERATING SURPLUS/ (DEFICIT) 80 (24) 4 120 180

Asset Disposal and Fair value adj 250 70 - - 320

Amounts received for new/upgraded assets 625 423 520 90 1,658

Physical resources received free of charge

NET BUDGETED SURPLUS/ (DEFICIT) 955 469 524 210 2,158

Other Comprehensive Income Asset Revaluation - - - - -

Joint ventures

- - - - -

TOTAL COMPREHENSIVE INCOME 955 469 524 210 2,158


BUDGETED COMPREHENSIVE INCOME STATEMENT


2012/13 Original

Budget BR1 BR2 BR3

2012/13

Adjusted

Budget

$'000

CURRENT ASSETS

Cash and cash equivalents 1,407 1,407

Trade & other receivables 1,479 1,016 958 95 3,548

Inventories 23 23

TOTAL CURRENT ASSETS 2,909 1,016 958 95 4,978

NON-CURRENT ASSETS

Infrastructure, Property, Plant & Equipment 248,174 583 520 179 249,456

Financial Assets 1,051 1,051

TOTAL NON-CURRENT ASSETS 249,225 583 520 179 250,507

TOTAL ASSETS 252,134 1,599 1,478 274 255,485

CURRENT LIABILITIES

Borrowings 5,455 5,455

Trade & Other Payables 8,936 367 364 (115) 9,552

Short term Provisions 1,456 1,456

TOTAL CURRENT LIABILITIES 15,847 367 364 (115) 16,463

NON-CURRENT LIABILITIES

Long- term Borrowings 5,000 5,000

Long- term Provisions 645 645

TOTAL NON-CURRENT LIABILITIES 5,645 - - - 5,645

TOTAL LIABILITIES 21,492 367 364 (115) 22,108

NET ASSETS 230,642 1,232 1,114 389 233,377

EQUITY

Accumulated Surplus 128,930 1,232 1,114 389 131,665

Asset Revaluation Reserve 96,358 - - - 96,358

Reserves beginning of year - -

Transfers to Reserves - -

Transfers from Reserves - -

Reserves at end of year 5,354 5,354

TOTAL EQUITY 230,642 1,232 1,114 389 233,377


BUDGETED BALANCE SHEET


2012/13 Original

Budget BR1 BR2 BR3

2012/13

Adjusted

Budget

CASH FLOWS FROM OPERATING ACTIVITIES $'000 $'000 $'000 $'000 $'000

RECEIPTS

Rates 29,719 (2) - - 29,717

Statutory Charges 965 - (58) - 907

User Charges 1,045 25 21 9 1,100

Grants and Subsidies 3,182 285 382 - 3,849

Interest Received 85 - (10) - 75

Reimbursements and Donations 222 12 (17) (1) 216

Other 1,122 23 50 (3) 1,192

GST Adj

TOTAL RECEIPTS 36,340 343 368 5 37,056

PAYMENTS

Employee Costs (12,661) 29 (90) 2 (12,720)

Materials, Contracts & Other Services (15,727) (401) (274) 113 (16,289)

Finance costs (587) 5 - - (582)

Investment Payments

TOTAL PAYMENTS (28,975) (367) (364) 115 (29,591)

NET CASH USED IN OPERATING ACTIVITIES 7,365 (24) 4 120 7,465

CASH FLOWS FROM FINANCING ACTIVITIES

RECEIPTS

Proceeds from Borrowings -

Proceeds from Aged Care facility deposits -

PAYMENTS

Repayment from Borrowings -

NET CASH USED IN FINANCING ACTIVITIES - - - - -

CASH FLOWS FROM INVESTING ACTIVITIES

RECEIPTS

Grants for new or upgraded assets 625 423 520 90 1,658

Sale of replaced/ new assets & other investment 320 70 - - 390

Repayment of loans to Community Groups

PAYMENTS

Expenditure on new/ upgraded assets (370) (676) (520) - (1,566)

Expenditure on renewal/ replacement of assets (10,288) 93 (10,195)

Contribution to Associated entities - - - - -

NET CASH USED IN INVESTING ACTIVITIES (9,713) (90) - 90 (9,713)

NET INCREASE (DECREASE) IN CASH HELD (2,348) (114) 4 210 (2,248)

CASH AT BEGINNING OF YEAR (3,735) (3,735)

CASH AT END OF YEAR (6,083) (114) 4 210 (5,983)



BUDGETED CASHFLOW STATEMENT

Asset

Accumulated Revaluation Other Total

Surplus Reserve Reserves Equity

2013 $'000 $'000 $'000 $'000

Balance at end of Previous Period 128,930 96,358 5,354 230,642

Net Surplus / (Deficit) for year 2,735 2,735

Other Comprehensive Income -

Asset Revaluation -

Joint Ventures -

Transfers between reserves -

131,665 96,358 5,354 233,377

2012


Net Surplus / (Deficit) for year -


Asset Revaluation -

Joint Ventures -


-

128,930 96,358 5,354 230,642

Key Performance Indicators Acceptable Range 2011/12 Actuals

2012/13

Original

Budget

2012/13

Adjusted

Budget

Operating Surplus 337 80 180

$(200)k to $1,200k

Operating Surplus Ratio

Operating Surplus 0.0% to 10.0% 0.95% 0.22% 0.50%

Rates - general & other less NRM levy

Net Financial Liabilities $k $0k to $20,000k 16,702 18583 17,130

Net Financial Liabilities Ratio

Net Financial Liabilities 20.0% to 60.0% 47% 52% 47%

Total Operating Revenue less NRM levy

Asset Sustainability Ratio

Net Asset Renewals 80.0% to 110.0% 137% 141% 150%

Depreciation Expense


STATEMENT OF CHANGES IN EQUITY


Appendix 2 Budget Review 2 – Detailed Walkthrough

DETAILED BR3 (OPERATING) A/(F) ie brackets

= favourable Adjusted Total

Department Section Dexcription BR3 ($'000) ($'000)

Asset Management Community Wastewater Management System (CWMS)Maintenance - STEDS : Consultants 4 15

Asset Management Community Wastewater Management System (CWMS)Maintenance - STEDS : Other Contractual Services (10) 20

Asset Management Community Wastewater Management System (CWMS)Maintenance - STEDS : Other Materials (2) 0

Asset Management Community Wastewater Management System (CWMS)Compulsory Pump Out : Contractor Payments (3) 38

Asset Management Community Wastewater Management System (CWMS)Maintenance - STEDS : Contractor Payments (10) 10

Asset Management Community Wastewater Management System (CWMS)Maintenance - STEDS : Contractor Payments (40) 26

(60) 109

Works Services Depot Management Maintenance - Buildings : Contractor Payments (4) 5

Works Services Depot Management Maintenance - Buildings : Signs (1) 0

Works Services Depot Management Maintenance - Buildings : Other Materials (2) 1

Works Services Depot Management Maintenance - Land : Materials - Direct Purchase (3) 2

Works Services Depot Management Miscellaneous Expenses : Materials - Direct Purchase (2) 0

Works Services Depot Management Miscellaneous Expenses : Equipment (1) 1

Works Services Depot Management Miscellaneous Expenses : Other Materials (5) 15

Works Services Depot Management Miscellaneous Expenses : Other Expenditure - Miscellaneous (3) 0

(21) 24

Works Services Infrastructure Field Services Maintenance : Contractor Payments 10 110

Works Services Infrastructure Field Services Maintenance : Materials - Direct Purchase 50 191

Works Services Infrastructure Field Services Maintenance : Materials - Direct Purchase (5) 5


Works Services Infrastructure Field Services Maintenance : Other Contractual Services (26) 0

Works Services Infrastructure Field Services Maintenance : Materials - Direct Purchase 85 170

Works Services Infrastructure Field Services Maintenance : Signs (3) 0


Works Services Infrastructure Field Services Maintenance : Other Contractual Services (4) 7

Works Services Infrastructure Field Services Maintenance : Materials - Direct Purchase (7) 11

Works Services Infrastructure Field Services Maintenance : Contractor Payments (40) 63

Works Services Infrastructure Field Services Maintenance : Other Expenditure - Miscellaneous (2) 0

Works Services Infrastructure Field Services Sweeping : Contractor Payments 10 70

Works Services Infrastructure Field Services Line Marking : Materials - Direct Purchase (15) 0

Works Services Infrastructure Field Services Signs : Contractor Payments 29 33

Works Services Infrastructure Field Services Signs : Materials - Direct Purchase (3) 6

Works Services Infrastructure Field Services Signs : Materials - Inventories (6) 0

Works Services Infrastructure Field Services Signs : Plant / Vehicle Charge (10) 16

Works Services Infrastructure Field Services Vandalism/Graffiti : Other Contractual Services 5 5

123 772

Works Services Parks & Gardens Field Services Maintenance : Contractor Payments (20) 27

Works Services Parks & Gardens Field Services Maintenance : Materials - Direct Purchase (4) 3

Works Services Parks & Gardens Field Services Tree Limbing and Removal : Contractor Payments 100 290

Works Services Parks & Gardens Field Services Tree Limbing and Removal : Other Contractual Services (50) (8)

Works Services Parks & Gardens Field Services Tree Limbing and Removal : Materials - Direct Purchase (6) 1

Works Services Parks & Gardens Field Services Maintenance : Contractor Payments (4) 2

Works Services Parks & Gardens Field Services Maintenance : Materials - Direct Purchase (3) 6

Works Services Parks & Gardens Field Services Water : Other Materials 7 28

Works Services Parks & Gardens Field Services Maintenance - Reserves : Contractor Payments 25 40

Works Services Parks & Gardens Field Services Maintenance - Reserves : Consultants (4) 0

Works Services Parks & Gardens Field Services Maintenance - Reserves : Other Contractual Services (15) 20

Works Services Parks & Gardens Field Services Slashing Reserves : Contractor Payments (10) 85

Works Services Parks & Gardens Field Services Contractor Weed Spraying : Contractor Payments (45) 80

Works Services Parks & Gardens Field Services Contractor Weed Spraying : Other Contractual Services (6) 0

Works Services Parks & Gardens Field Services Water : Other Materials 12 16

Works Services Parks & Gardens Field Services Township Gardens - Aldgat : Other Contractual Services 8 9

Works Services Parks & Gardens Field Services Township Gardens - Aldgat : Materials - Direct Purchase 5 7

Works Services Parks & Gardens Field Services Township Gardens - Bridge : Materials - Direct Purchase 9 11

Works Services Parks & Gardens Field Services Township Gardens - Crafer : Contractor Payments (2) 0

Works Services Parks & Gardens Field Services Township Gardens - Birdwo : Materials - Direct Purchase (2) 0

Works Services Parks & Gardens Field Services Township Gardens - Gumera : Other Contractual Services (2) 0

Works Services Parks & Gardens Field Services Township Gardens - Mylor : Other Contractual Services (2) 0

Works Services Parks & Gardens Field Services Township Gardens - Stirli : Other Contractual Services (9) 3

(18) 620

Works Services Waste Services Miscellaneous Expenses : Other Contractual Services (25) 2

Works Services Waste Services Miscellaneous Expenses : Other Materials (15) 20

Works Services Waste Services Illegally Dumped Rubbish : Contractor Payments 7 16

Works Services Waste Services Street & Park Litter Bins : Contractor Payments 14 14

Works Services Waste Services Street & Park Litter Bins : Plant / Vehicle Charge (17) 46

Works Services Waste Services Area Disposal Hartley Lan : Contractor Payments (100) 552

Works Services Waste Services Hard Rubbish Collection : Contractor Payments (10) 90

(146) 740

Library Services Library Services Management Stationery : Materials - Direct Purchase (4) 11

Library Services Library Services Management Courier Costs : Freight 6 30

Library Services Stirling Library Cleaning : Other Contractual Services 6 44

Library Services Stirling Library Power : Other Materials 4 27

Library Services Woodside Library Power : Other Materials 4 10

Library Services Gumeracha Library/Service CentreCleaning : Other Contractual Services 5 10

Library Services Gumeracha Library/Service CentrePower : Other Materials 1 6

Library Services Gumeracha Library/Service CentreMaintenance - Buildings : Contractor Payments 3 3

Library Services Gumeracha Library/Service CentreMaintenance - Buildings : Other Contractual Services 2 5

25 145

Human Resources Occupational Health & Safety & WelfareTraining : Other Contractual Services (2) 8

Human Resources Occupational Health & Safety & WelfarePrograms : Other Materials (2) 5

Human Resources Occupational Health & Safety & WelfareRisk Coordinator : Contractor Payments (8) 0

(12) 13

maintenance

Works Services Private Works Private Works General Inc : Other Fees (7) (28)

Works Services Private Works Private Works General Exp : Materials - Direct Purchase 2 8

(5)

Subtotal (113)

Immaterial items (7)

BR3 Total (120)


AGENDA BUSINESS ITEM Item: 6.3 Originating Officer: Tim Piper Subject: Adoption of 2013/14 Annual Business Plan &

Budget File No: 09.14.1 SMP/Council Policy: Goal 5: Effective and Efficient Governance

1. SUMMARY

This report updates the Committee on the 2013/14 Annual Business Plan and Budget prepared for adoption at the Council meeting on 25 June 2013. The tighter timelines for this year’s process have precluded the preparation of a fully updated Annual Business Plan including the latest budget in time for inclusion with this report. The Plan issued for community consultation is provided, which contains a budget surplus of $190k. A supplementary budget attachment then details the revised budget surplus of $351k which is expected to be adopted instead.

2. BACKGROUND

The 2013/14 Annual Business Plan and Budget has been prepared by Finance staff working together with Council at a series of workshops held since March. A final workshop is scheduled for Tuesday 18 June, when it is anticipated that minor budget changes may be made, but that the key performance indicators, as required to be reported by the Financial Management Reporting Regulations will not alter materially. The final workshop will also provide Councillors with the chance to consider any changes to the Annual Business Plan (or budget) arising from the results of the community consultation undertaken during May. The budget has been prepared in conjunction with a revised Long Term Financial Plan which has enabled decisions to be made with reference to their long term impact as well as the current and following year result.

Adelaide Hills Council Audit Committee Meeting 17 June 2013 Adoption of 2013/14 Annual Business Plan & Budget

Page 2

3. DISCUSSION

Council’s proposed 2013/14 budget is showing an operating surplus of $351k. Council was mindful of the Audit Committee’s position on pursuing increasing surpluses in line with the Long Term Financial Plan when setting the budget, and has preserved the originally proposed rate increase of 3.8% (based on the then forecast CPI for 2012/13) accordingly. Delivering ongoing operating surpluses will increase Council's capacity to address the asset backlog and, ultimately, to fund new assets without increasing borrowing levels unnecessarily. Particularly, more funds are again directed into addressing the infrastructure asset backlog, with renewals expenditure of $9.3M in line with the adopted Asset Management Plan for almost every class of asset. New assets are again minimised, restricted to $520k of carefully prioritised key projects and capable of being funded primarily by operating surpluses and grant funds rather than continued additional borrowing. Interaction with Long Term Financial Plan Council noted that the Long Term Financial Plan predicated by this budget again avoids any future deficits, and directs surpluses into reducing the asset backlog followed by reducing long term loans. Council’s Long Term Financial Plan had always envisaged operating surpluses in 2012/13 and beyond. Since its adoption, the budget review process during 2012/13 has demonstrated that the positive trend of recent years has continued. The 2012/13 budgeted surplus has already been increased from $80k to $180k, reflecting an underlying capacity to generate the surpluses required to fund the renewal of existing Council infrastructure (presently subject to a well-documented backlog) and the construction or acquisition of new infrastructure as required.. Income & Expenditure Operating revenue is $36.4M, which has increased by $0.4M (2.5%), funded by increases in rate revenue but offset by reduced grant income and fees & charges. The operating expenditure budget for 2013/14 is $37.6M, which includes $7.3M of depreciation. Operating expenditure excluding depreciation has increased by 2.6%. Significant changes are discussed below. • Rate revenue is forecast to increase by $1.3M due to an average rate

increase of 3.8% (being 2012/13 CPI estimated at 2.8% plus 1.0% per the Long Term Financial Plan);

• Fixed rate element of $405 per qualifying property, and • Staffing costs are forecast to increase by $0.5M (4.2%) including 0.25% for

additional superannuation contributions mandated by the Commonwealth. The balance is due to variances in grant funded staff and the annual indexation of costs and leave entitlements

Financial Assistance grant timing In recent years it has been the case that 25% of the Financial Assistance Grant (FAG) was paid early, on 30 June of the previous year. Accounting standards and legislation require Council to recognise this as income in the earlier year, and this remains a recurrent factor requiring no further adjustment. This means the

Adelaide Hills Council Audit Committee Meeting 17 June 2013 Adoption of 2013/14 Annual Business Plan & Budget

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2013/14 budget has not been materially affected, and assumes that a full four quarters’ grant instalments will be received during the year. This assumption has been maintained even though Council has now effectively been prepaid six months of FAG instalments following the unexpected late advance in the 2011/12 financial year. For the sake of clarity, Council will continue to budget for a full four quarters’ grant instalments in each financial year, but one has to assume that there will eventually be a year when this factor catches up and Council receives only 50% of the budgeted FAG in that year. That will have a material effect upon reported results when it happens. Capital Expenditure (Total spend of $8.6M net from Council’s funds, plus 2012/13 projects to be carried forward, estimated to be less than $1.0M) Significant capital expenditure is budgeted for:

• Sealed Roads $3.9M (12/13 - $3.8M) • Unsealed Roads $1.8M (12/13 - $1.3M) • Kerbing/Retaining Walls $0.4M (12/13 - $0.3M) • CWMS $0.4M (12/13 - $0.9M) • Footpaths and Cycle Tracks $0.5M (12/13 - $0.3M) • Buildings and Property $0.3M (12/13 - $0.3M) • Bridges $0.1M (12/13 - $0.2M) • AHBTC $0.2M (12/13 - $0.2M) • Stormwater Drainage $0.3M (12/13 - $0.2M) • Plant Operations $0.6M (12/13 - $0.7M)

A detailed listing of capital expenditure items is contained in the 2013/14 Budget and Business Plan. Note that the budget also assumes $650k of surplus asset sales proceeds, which includes the expected sale proceeds of the Morialta Barns.

4. RECOMMENDATION

That the Audit Committee review and endorse the 2013/14 Annual Business Plan and Proposed Budget (including an operating surplus of $351k) and support its adoption by Council.

5. APPENDICES

(1) 2013/14 Annual Business Plan & Budget issued for Community Consultation – see http://www.ahc.sa.gov.au/page.aspx?u=1365&c=11290

(2) Revised Budget Supplement with budget proposed for adoption

Appendix 1 2013/14 Annual Business Plan & Budget issued for

Community Consultation

Adelaide Hills Council Annual Business Plan & Budget 2013/14 2

Contents

Introduction .................................................................................................... 3

About the Adelaide Hills ................................................................................. 4

Our Strategic Directions ................................................................................... 6

Our Priorities .................................................................................................... 8

Measuring our Success................................................................................... 11

2012/13 Achievements .................................................................................. 14

Financial Sustainability ................................................................................... 18

Key Objectives for 2013/2014 ........................................................................ 19

Activities for 2013/2014 ................................................................................. 22

Continuing Services ........................................................................................ 24

What it means for Rates ................................................................................ 25

Funding the Business Plan .............................................................................. 29

Budget 2013/14 ............................................................................................. 33

Capital Projects .............................................................................................. 38

Assets Report Card Grades 2012/13 .............................................................. 40

Capital Project Listings ................................................................................... 41

Operating Budget Summary ........................................................................... 50

Operating Budget by Service Areas ................................................................ 51

» Waste Services

» Planning & Development Services

» Community Recreation/Leisure

» Community Services

» Infrastructure Assets (incl Environment & Natural Resources)

» Governance

» Corporate Support

Three Year Financial Forecast ........................................................................ 55

Cover photograph

Yarn Bombing, Coventry Library, March 2013 - ANON


Introduction

Welcome to the Adelaide Hills Council Annual

Business Plan and Budget for 2013/2014.

This document sets out the services, programs

and projects the Council proposes to provide in

the forthcoming financial year, and how it plans

to allocate its budget

The Annual Business Plan has been developed to

ensure consistency with Council’s Vision of

nurturing our unique place and people

and its Mission,

delivering activities and services which build a

resilient community, sustain our built and

natural environment and promote a vibrant

economy.

The Annual Business Plan aims to maintain

efficient services for the community and continue

progress towards the long-term objectives

outlined in Council’s Strategic Plan.

2013/14 will be an exciting year as the National

Broadband Network is rolled out and switched on

in the Southern part of the region, reaching up to

a quarter of residents. Council is revising both its

internal systems and its website to make the

most of this opportunity.

Across the whole district, Council is continuing its

drive to bring all roads, both sealed and unsealed,

up to an acceptable standard. In 2012/13 Council

will have spent over $5.3M on road renewal

projects. For 2013/14 the planned spend is

$5.7M, which will set Council firmly on its way to

eliminate the $24M backlog in infrastructure

renewal over the next ten years.

Community Consultation

A community consultation period is undertaken

from 29 April to 29 May 2013. During this time

the community is asked to tell Council what it

thinks about the Draft Annual Business Plan and

Budget for 2013/2014:

» Two Information sessions are held at locations

in Stirling and Lobethal

» A public meeting of the Council is held on

Tuesday 28 May at which the community is

invited to ask questions and make

submissions in relation to the Annual Business

Plan and Budget.

» Information and a questionnaire is published

in the Hills Voice, distributed to all ratepayers

in the region by delivery to residences or post

offices and PO Boxes from the end of April

» An online questionnaire featuring the same

questions can be completed at council’s

website at www.ahc.sa.gov.au

» Written comments can be forwarded to

Adelaide Hills Council, PO Box 44, Woodside

SA 5244, or Email: [email protected].

Council considers the community consultation

feedback at its meeting on 25 June 2013. The

outcomes of the consultation are taken into

account in setting the rate increase which forms

the basis of both the Annual Business Plan and

the Annual Budget.

Copies of this Annual Business Plan can be

downloaded from www.ahc.sa.gov.au or viewed

at any of Council’s Customer Service Centres.

Adelaide Hills Council Annual Business Plan

& Budget 2013/14 4

About the Area The Adelaide Hills Council (AHC) area is

located to the east of metropolitan Adelaide

and encompasses an area of 795 square

kilometres.

The physical character of the area reflects the

geological history and includes Hills Face and

Foothills, Central Range and the Eastern Range

and Escarpment. The Council district is within

the traditional lands of the Kaurna, Ramindjeri

and Peramangk Aboriginal peoples. The

traditional lands of each of these peoples are

thought to extend into the Adelaide Hills

district.

The district holds special significance as a

major environmental and recreational asset.

The majority of AHC (89%) lies within the Mt

Lofty Ranges Watershed, which supplies

around 60% of metropolitan Adelaide’s water

supply. The district has a wide range of land

uses including agriculture, residential, retail,

conservation and tourism.

Residential development varies from the

suburban areas of the foothills, to the country

living areas around Stirling, to the large towns

of Woodside and Lobethal, to the smaller

towns and settlements. There are over 50

towns and localities within the Council area.

European settlement in the Adelaide Hills

began soon after the establishment of colonial government in 1836. The Hills were one of the earliest

settled areas in South Australia due to their close proximity to the City of

Adelaide, high annual rainfall and fertile valleys.

In recent decades, parts of the district have become quite urbanised due to increasing demand for the

district’s “country location” quality of life in such close proximity to metropolitan Adelaide. Improved

access through the Heysen Tunnel and the upgraded South Eastern Freeway have lead to development

pressure around the towns of Stirling, Aldgate, Bridgewater, Balhannah and Woodside. Improved

transportation routes have also influenced population growth in the district’s northern towns of

Birdwood, Gumeracha and Kersbrook.

Local industries include apple, pear and cherry growing, vineyards, mixed farming, quarries, nurseries,

market gardening, grazing, forestry, horses and cattle.

Major tourist attractions in the AHC district include Cleland Wildlife Park, the Mt Lofty Summit,

Birdwood National Motor Museum, Gumeracha Toy Factory and Big Rocking Horse, Warrawong Wildlife

Sanctuary, Melba’s Chocolate Factory, Mt Lofty Botanic Gardens and the Gorge Wildlife Park.

Adelaide Hills Council Annual Business Plan

& Budget 2013/14 5

About the Area At the 2011 Census, Adelaide Hills Council’s (AHC) resident population was 38,633, a 2% increase on the

2006 Census. The median age of the area was 42, up from 39 in 2006.

In the AHC, 27% of the population was 19 years or younger and 13.4% 65 years or older, compared with

24.3% and 15.4% respectively for metropolitan Adelaide. Future increase in the proportion of residents

65 years and over will necessitate further improvements in aged services and physical infrastructure to

maximise accessibility.

In the preceding five years to 2011, a fifth of the population moved in to the Council area from another

part of South Australia, Australia or overseas, representing a significant turn over in resident population.

The district continues to experience comparable changes in family composition and household

structure. Couples with children make up 38.9% of the Council’s households, with one parent families

comprising 7.7% of households. Couples without children represent 30.9% of households and lone

person households make up a majority of the remainder (18.7%), reflecting the ageing of the population

and general changes in life pattern trends.

The district has a higher percentage of tertiary educated residents and employed people than the State

average (96% employed compared to 94%). A higher proportion of residents earn a high income in

comparison to metropolitan Adelaide, 16.3% of the population compared to 10.2% in Greater Adelaide.

In 2011, approximately two-thirds of employed people worked outside the area, with the remainder

employed locally.

For more information about the Adelaide Hills area and communities you can see further analysis of the

2011 census results at www.id.com.au/ in the .id community section.

AHC has a Mayor and 12 Councillors elected to represent the community, across 5 Wards: Manoah (2

Councillors), Marble Hill (2 Councillors), Mount Lofty (3 Councillors), Onkaparinga Valley (3 Councillors),

Torrens Valley (2 Councillors). The Mayor is elected across the entire Council area. .

Manoah Elected Members:

Ron Nelson

Jan-Claire Wisdom

Mount Lofty Elected Members:

Kate Hosking

John Kemp

Simon Jones

Marble Hill Elected Members:

Ian Bailey

Jan Loveday

Onkaparinga Valley Elected Members:

Robert (Bill) Gale

Lynton Vonow

Andrew Stratford

Torrens Valley Elected Members:

Linda Green

Malcolm Herrmann

Mayor Bill Spragg

Adelaide Hills Council is currently (May 2013 onwards) undertaking a Representation Review to deliver the

best model of representation for our community. This review will examine whether to reduce the number

of Councillors and whether to abolish or reduce the number of wards.

The first step in the review process is an options paper to inform and seek the views of the community,

which is available on the Council website www.ahc.sa.gov.au or in printed form from Council Service

Centres. You are invited to provide written comments on this review by 30th May 2013.


Our Strategic Directions

The Strategic Plan was developed through an extensive consultation process at the beginning of 2011 and

sets out the high level Strategic Directions for the Adelaide Hills Council for the period from 2011 to 2021.

Two years into the term of this Council and following the arrival of a new CEO, Council is presently refining

the issues and objectives of the Plan to produce clearer strategies and outcomes. For the purposes of this

Annual Business Plan, all references to the current Strategic Plan refer to the document adopted by Council

on 9 August 2011.

The Strategic Plan still comprises five goal areas that collectively encompass all of Council’s activities,

operations and responsibilities. All items in the Plan have been nominated by Council as issues that need to

be addressed. No priority should be inferred by the order or numbering of the key focus areas.

Also identified in the Plan are the Key Issues facing the Adelaide Hills Council and the specific long-term

goals and 10 year outcomes that will address these challenges. It provides a platform from which Council

can collaborate with its communities and other partners to identify and work towards common outcomes.

Following a series of community workshops during April 2013, the Strategic Plan is being rewritten to

capture the lessons of the last two years and to address recent changes including the introduction of the

National Broadband Network. This Annual Business Plan includes some preparatory steps for the revised

Strategic Plan, but continues to employ the existing goals and objectives until revised ones are finalised.

Goal 1: A Healthy, Safe, Engaged and Connected Community

The Adelaide Hills Council area offers a wonderful rural and township lifestyle on the fringe of metropolitan

Adelaide. Its established communities provide support and social engagement with a strong tradition of

volunteering.

A changing population, however, brings new challenges and opportunities. A growing proportion of

residents have a commuter lifestyle working and using facilities in the city and with less time for

involvement in the local community. Expectations are changing. At the same time, lack of transport,

financial difficulties, mental health issues and disabilities can leave some people isolated and vulnerable.

Unexpected new challenges test the capacity of the community to adapt and respond positively to the

opportunities that arise.

Goal 2: Sustainable Natural, Built & Agrarian Environments

Council recognises its important role in protecting the beautiful environment in which we live.

We have a role in community leadership/education, supporting volunteers and conducting our own

business in an environmentally responsible way.

We also recognise that we need to work together with other bodies and tiers of Government, such as the

Natural Resource Management Boards, State and Federal Departments and Community and Volunteer

Organisations.


Goal 3: A Prosperous and Vibrant Economy

The Adelaide Hills Council District has vibrant primary production and tourism industries. We are home to

niche agricultural, tourism and other businesses and retailers, and seek to attract other value-adding

commercial activities which will boost local economic activity and take advantage of our unique location

and products.

Council has a role in supporting the economy of the area. Also, Council’s Development Plan seeks to

support the important economic benefits from these opportunities in a responsible and sustainable

manner.

In addition, direct support is provided to the local District’s economy through Adelaide Hills Tourism,

Regional Development Australia and Council’s Adelaide Hills Business and Tourism Centre at Lobethal.

Goal 4: Well Managed and Maintained Community Infrastructure

The community uses an extensive array of Council-owned infrastructure as part of its daily life. This

includes assets such as roads, bridges, footpaths, sports grounds, stormwater, wastewater systems,

community facilities and buildings. In many cases, these infrastructure assets provide basic services for our

community.

While there have been significant advances in asset management planning and investment over recent

years, there is still a $24M backlog of improvements needed to bring the condition and performance of

Council’s infrastructure to an acceptable level. The large, dispersed nature of the Council area represents a

further significant challenge for Council’s infrastructure investment program.

The initiatives for 2013/14 are aimed at continuing to provide overall improvements in infrastructure

condition and service levels and aim to increase resources in some areas. The revised asset Management

Plan adopted in April 2013 sets out the longer term strategy.

Goal 5: Open, Effective & Efficient Governance

The Governance role can easily be overlooked, but is critical to the achievement of Council’s objectives.

Good Governance ensures that the foundation stone for all other activities is sound, thereby providing for

effective leadership of the Council and management of the Organisation and proper financial management,

with trained and motivated staff delivering high quality services to our community. Recognising the recent

introduction of an Independent Commissioner Against Corruption for South Australia and the heightened

attention now being given to this area, Council is planning to restructure elements of its management layer

during 2013/14 to enable the appointment of a specialist Governance manager. The new role will be

designed to reinforce Council’s ability to handle future governance challenges without diverting attention

from day to day management.


Our Priorities The Annual Business Plan and Budget is a statement of how Council proposes to translate the goals and key

issues contained in its Strategic Plan into services, programs and project that will be delivered in 2013/14.

Acknowledging that it would be difficult to deliver on all Key Issues immediately, at the end of 2011 Council

identified the following six Key Issues to focus on in the first three years of the life of the Strategic Plan:

Top Priority

Key Issue 5.4, Financial Responsibility

Strategies

a) Undertake council operations in a financially sustainable manner with appropriate key performance

indicators to measure performance

b) Ensure the provision of appropriate services and maintenance of assets by:

- cost containment

- income generation

- rating policy review

- exploring cost recovery mechanisms

- adopting a suitable rating structure

c) Use financial risk management strategies and take appropriate action to manage these risks across

the organisation

d) Implement strategies to ensure that infrastructure replacement and maintenance liabilities are not

passed to future generations


Our Priorities

High Priority

Key Issue 4.1, Infrastructure Planning and Maintenance

Strategies

a) Infrastructure will be planned and maintained to meet, as far as practicable, the community’s social,

economic, environmental and financial needs

b) Update Asset Management Plans (AMPs) on a regular basis and define outcomes, service standards,

condition and performance, maintenance and investment requirements for each asset class

c) Integrate infrastructure plans with surrounding Councils, State and national plans and programs

d) Develop annual work programs to reflect maintenance and investment priorities, risk and available

resources and link them to Council’s long term financial plan

e) Maintain capital funding across all asset classes, (in line with recommendations in Council’s Asset

Management Plans), but with particular emphasis on:

- maintaining the condition of sealed and unsealed roads

- upgrading CWMS to meet statutory, compliance and environmental standards

- drainage works to protect at risk communities

f) Continue to look for opportunities to dispose of surplus assets in order to reduce long-term

operating costs

g) Progressively move from reactive to planned maintenance in order to improve effectiveness and

cost efficiency

h) Monitor and review Service Standards to inform infrastructure service planning and provide a basis

of service delivery to customers

i) Where infrastructure backlogs or deficiencies emerge, attempt to address these within a reasonable

timeframe and maximise the ’whole of life‘ benefits to current and future citizens

j) Manage asset information through an integrated asset management and GIS system which links to

Council’s corporate customer, rating and financial data

Key Issue 4.4, Managing Open Space & Infrastructure for Sustainability

Strategies

a) Actively support:

- preservation and improvement of biodiversity and high value habitats

- eradication of pest weeds and feral animals

- soil conservation, catchment management and improvement of water quality

b) Maintain management plans for all parks, reserves and conservation areas with stakeholders and

experts according to Council’s policies

c) Balance management plans for parks, reserves and conservation areas with Council’s support for

active & passive recreation and the need for protecting and enhancing the District’s biodiversity,

environmental values and natural beauty


Our Priorities

Priority

Key Issue 1.3, Community Participation and Support

Strategies

a) Support events and festivals which bring the community together

b) Act as advocate and information-provider linking to other agencies eg State Government

c) Actively encourage and support volunteering

d) Pursue the development of an online community noticeboard

Key Issue 2.1, Natural Environment

Strategies

a) Develop and apply an Environmental and Nature Conservation Strategy

b) Identify and protect areas of high natural environmental value from encroachment by development.

c) Set measurement methods and targets for the programs implemented.

d) Develop and implement community education programs targeting the District’s environmental

issues

Key Issue 5.2, Effective and Efficient Services & Infrastructure

Strategies

a) Ensure services and infrastructure are properly managed and legally compliant

b) Delegate decisions to an appropriate level to be effective, responsive and timely

c) Aim for continuous improvement in all sections of Council , including the investigation of alternative

service delivery options

d) Monitor and report on organisational, social, environmental and economic outcomes and

performance

e) Have a contemporary and responsive Development Plan and a high quality Development

Assessment service

The Strategic Plan is continuing to evolve to ensure Council responds effectively to the changing

circumstances and needs of the District and is subject to annual monitoring and review, and measured

against targets developed within Council’s Annual Business Plans.


Measuring our Success

Adelaide Hills Council uses a Triple Bottom Line reporting framework, which means we use performance

measures for our services that go beyond just financial performance. This is how it works:

Financial Performance - This details financial indicators such as whether the service has operated within

Budget.

Social Performance - Performance measures under this heading are all about meeting customer

expectations. They will vary depending on the nature of the service.

Environmental Performance - These measures deal with the environmental impact of our activities.

Depending on the nature of the service, some will have little or no direct environmental impact and will not

have performance measures.

The Financial, Social and Environmental indicators for the Annual Business Plan and Budget 2013/14, based

on the Key Performance Indicators established for the organisation as a whole, are outlined below.

Financial

Indicator Target Target Date 12/13

Forecast

(BR2)

13/14

Budget

Operating (Deficit before

Capital Revenue ($,000)

Break- even over next 2

years. Average between 0

& $1.2m surplus

Achieved in

2011/12

(previously

2010/11)

$60k $190k

Operating Surplus Ratio 0<>5% 2013/14 0.16% 0.51%

Net Financial Liabilities 0<>$20m Achieved $17,660k $17,155k

Net Financial Liabilities Ratio 20%<> 60% Achieved 49% 46%

Interest Rate Cover (Interest

Rates as a percentage of

operating revenue)

0<>10% Achieved 1.6% 1.9%

Asset Sustainability Ratio1 90%-110%

(long term average)

110% - 125% (short term)

Achieved in

2011/12 102% 97%

Note 1: The basis for calculating the Asset sustainability ratio has now been revised to comply with the Financial Management

Regulations (Model Financial Statements) Financial Indicators. Instead of expressing asset renewal spend as a percentage of

depreciation, it now requires comparison with the planned spend in the adopted Asset Management Plan. This will give rise to a

percentage nearer to 100% than in the past, as the Plan has been set above depreciation levels to address the accumulated backlog.

During 2012/13 Council has managed to maintain the improvement in underlying performance achieved in

2011/12 despite further cost increases identified in waste management. Waste disposal costs to landfill are

continuing to increase as forecast last year. The operating surplus is still expected to be about $60k, having

budgeted for a surplus of $80k.


Measuring our Success

Council continues to seek ways to reduce unavoidable ongoing costs, and 2012/13 has seen several

initiatives bear fruit. Comparing the 2013/14 budgeted costs with those actually incurred last year

(2011/12), the following savings have been achieved:

• Switch banks: over $30k per annum in fees and charges

• Revise Microsoft licensing model for basic office software: $38k per annum

• Replace phone line data links between offices with wireless transmissions: $48k per annum in land

line fees

• Replace library management system with One Library: over $50k per annum in licensing costs

• Replace core business system: over $80k per annum in licensing costs (Adelaide Hills Council is the

first in South Australia to move to the My Community system, and aims to lead the Local

Government sector in making smarter use of modern technology wherever possible.)

Not only do all these changes add up to ongoing cost savings of almost $0.25M annually, but in every case

the service provided by the replacement supplier offers considerably better performance and smoother

integration with other technology. The benefits are operational as well as financial.

Council’s capital programme has made significant progress in 2012/13, with over $10M worth of

infrastructure projects scheduled for completion during the year. Most importantly, Council has met

almost all of its asset renewal targets for transport related assets. Additionally, Federal grant funding has

been secured so that additional new projects totalling over $0.5M could be completed. The backlog if

unstarted and uncompleted projects is now at its lowest for several years, offering far greater transparency

and certainty for future planning.

Social

Indicator Target Target Date Annual Score

2011 2012

Community understanding and input

into Council Strategic Objectives (as

measured by LGA Comparative

performance survey)

Satisfaction rating of

80 or more.

Ongoing 75 74

Community Consultation Satisfaction

(measured by LGA Comparative

performance survey)

Satisfaction rating

improvement over

previous year

Ongoing 79 80

General Satisfaction with Council’s

services and facilities (measured by LGA

Comparative performance measurement

survey)

Performance score of

100 or greater

(100 indicates

satisfactory)

Ongoing 95 97

Community satisfaction with Council’s

performance in providing community

and cultural services(measured by LGA


survey)

Satisfaction rating

improvement over

previous year

Ongoing 5.6 5.9


The scores above have been taken from the 2012 LGA Community Survey conducted by Roy Morgan

Research and released in July 2012. Unfortunately the survey has not been repeated for 2013 and so we

are now identifying alternative measures to gauge performance in future. It is, however, pleasing to see

improvements in two of the three key scores monitored.

Environmental

Indicator Target Target Date Annual Score

2011 2012

Community satisfaction with the

performance in maintaining parks,

gardens and sporting facilities

(measured by LGA Comparative

performance measurement survey)

Improvement on

previous year with a

goal in achieving the

State Average of 7.2

out of 10

Ongoing 6.4 6.6


performance in providing environmental

management services (measured by LGA


survey)

Improvement on




out of 10

Ongoing 5.6 5.7


performance in providing safe public

places (measured by LGA Comparative

performance measurement survey)

Improvement on




out of 10

Ongoing 5.9 6.1

In 2012-13 the Council commenced implementing actions under its new Environmental Sustainability

Framework. Key achievements included:

• Development of a Biodiversity Strategy, involving extensive community engagement

• Development of a plan for the management of vegetation in Stirling Linear Park

• Reducing household waste being consigned to landfill through introducing green organics waste

collection and undertaking an at-call hard waste collection trial

• Mitigating against the risk of environmental harm caused by Community Wastewater Management

Schemes by lining the largest of the Council’s wastewater lagoons at Birdwood and entering into a

new water reuse agreement with a private landholder

• Understanding the Council’s corporate energy use and potential for energy use reduction following

an energy audit


2012/13 Achievements

2012/13 has seen Council make steady progress towards most of its key objectives. At the beginning of the

year the search for a new CEO was in progress, and Andrew Aitken was appointed to the role at the

beginning of October 2012.

Under his leadership Council staff have pushed ahead with the introduction of Business Excellence

principles to reorganise Council’s key processes in line with its goals. New and more efficient systems have

been identified and acquired which will take effect during 2013/14. A culture of consultation is being

developed, with more emphasis on securing community input for all major projects and a reinvigorated

round of Community Forums commencing at the end of April.

Of note is that the Annual Business Plan is

current until the end of the 2012/2013

financial year or 30 June 2013. Therefore

achievement of the Plan is based on progress

made to date and overall progress may vary at

the end of the financial period. Performance

indicators with no status are either not

measured until the end of the financial year

2012/2013 or are no longer in use. Comment

is provided by way of further explanation of

each performance indicator.

Goal 1: A Healthy, Safe, Engaged and Connected Community

Key Issue Achievements

1.1 Sense of Belonging Fostered/supported new events including Santos Tour Down Under (STDU)

stage finishes celebrations in Lobethal and Stirling.

1.2 Community Planning Two schools involved in Way to Go Travelsmart projects to encourageg safer,

greener and more active travel to school. Developed Regional Youth Strategy

across AHC, DCMB & Strathalbyn part of Alexandrina

1.3 Community

Participation Partnership

& Support

Torrens Valley Community Centre and Gumeracha Library implement ‘shared

space’ model to extend access. TVCC moves upstairs in the shared space with

Gumeracha Library and starting more programs within back of library.

NBN Digital Hub grant received $335k approximately and hub started at

Coventry Library Stirling in January 2013.

Adult Community Education Foundation Skills funding received for programs

across TVCC and the Summit Community Centres $100k until June 2013.

1.4 Village” Amenity &

Character

Completed the third year of successive main street rejuvenation works in

Stirling, enhancing the village character and creating ‘places’ for people.

Progressed the Townships & Urban Areas Development Plan Amendment (DPA)

which will include opportunities for the provision of a range of housing options

in appropriate locations; and prepared desired character statements to ensure

new development does not negatively impact on the desired character and

amenity of the locality in which they are located.


2012/13 Achievements 1.5 Quality of Life Positive Ageing Centre revitalised with programs moved to areas of Council with

need.

Home and Community Care program grown to now service over 800 older

residents and secured grant funding for additional domestic assistance and

home maintenance.

Hills Youth Mental Wellness Project commenced; to conclude Sept 2013

Further development of, and support for, community initiatives for young

people, including Lobethal Outdoor Movie Night, annual youth festival

GumaROCKa!, XitH Xbox & PC gaming events, and the successful revival of The

Lounge (regular drop-in nights for young people at the Aldgate RSL Hall)

Upgraded all antennas at the Gumeracha Retirement Village and all residents

across all sites are now receiving a full digital television signal

1.6 Community Safety Council continued the Red Cross Redi Plan Project and subscribed to the SES

Flood Safe Project

1.7 Culture & Arts Supported funding application for Adelaide Hills Sculpture Trail through the

Regional Development Australia Fund

Goal 2: Sustainable Natural, Built & Agrarian Environments


2.1 Natural Environment Undertook development of Environment & Nature Conservation Strategy to

guide the Council’s future investment and priorities in natural asset

management; completed study and mapping of precincts to identify biodiversity

values of Council's Conservation Reserves; progressed Primary Production Lands

DPA

2.2 Sensitive

Development

Staff continue to apply the principle of developments achieving a neutral or

beneficial impact when assessing development applications.

2.3 Agrarian Environment Progression of the Primary Production Lands DPA. Reviewed Council’s Buffers

Policy with regard to spray drift management.

The Rural Land Management Advisory Group work continues to review matters

such as carbon pricing impacts on farmers, value adding industries and the issue

of abandoned orchards.

2.4 Water Quality Staff continue to consider and address water quality issues when assessing

development applications.

Completed negotiations for further wastewater reuse at Birdwood.

2.5 Scenic Beauty Procedures developed to minimise the impact of development upon the scenic

beauty.

2.6 Climate Change Commenced Council office modifications at Stirling and Woodside to improve

energy efficiency . Car purchases continued with smaller turbo diesel vehicles

where practicable.

2.7 Built Environment Progression of the Townships & Urban Areas DPA which includes desired

character statements for each of the 24 main townships to ensure retention of

the village character of these towns.

2.8 Green Education Provided financial support to community groups working on Council land to

enable them to become educated in best practice bushcare methods.

Participated in the Solar Councils project to promote solar panels.


2012/13 Achievements Goal 3: A Prosperous and Vibrant Economy


3.1 Promoting and

supporting the District’s

Economy

Strong liaison maintained with Stirling & Lobethal businesses. Support for local

Regional Development Authority reconfirmed during year.

World Heritage Status bid progressed.

3.2 Sustainable Agrarian

Enterprises

Progression of the Primary Production Lands DPA which will protect and

enhance primary production land.

Council endorsed the Feasibility Study & Economic Impact Analysis Report for

the World Heritage Listing of the Mount Lofty Ranges Agrarian Landscape

Project, and agreed to proceed with Stage 1 of the Project which aims to achieve

National Heritage Listing of the area in question.

3.3 Tourism Progressed Adelaide Hills Tourism Committee regional activities in conjunction

with District Council of Mt Barker and Regional Development Australia (RDA).

Successfully hosted 2 Race Finishes in Lobethal and Stirling for 2013 STDU.

Provided event application training to the community in Gumeracha, Norton

Summit and Stirling.

Continued to promote local events and populated the Adelaide Hills Tourism

website.

3.4 Economic

Sustainability

Secured NBN related funding in excess of $800k from Department of Broadband

Communications and Digital Economy to develop NBN readiness in all affected

areas through Digital Hub and Digital Local Government programmes.

3.5 Economic

Infrastructure

Operate Adelaide Hills Business & Tourism Centre (AHBTC) at Lobethal

Goal 4: Well Managed and Maintained Community Infrastructure


4.1 Infrastructure

Planning & Maintenance

Completed a major review of the Infrastructure & Assets Management Plan,

leading to the development and adoption of a strategy to eliminate the asset

renewal backlog in 10 years.

4.2 Waste Management Ongoing improvements at the Heathfield Resource Recovery centre with sales of

mulch returning, Finding Workable Solutions commencing recycling activities

and the commencement of crushing and recycling of used concrete and bricks

into road making material. Commencement of the green bin domestic

collection in townships and the commencement of a limited hard waste

collection.

4.3 Community

Wastewater

Management Systems

Undertook works to line the largest of the Council’s wastewater lagoons, at

Birdwood, to minimise environmental risks. Entered into a water reuse

agreement for excess water from the Birdwood Treatment Plant.

4.4 Managing Open

Space & Infrastructure

for Sustainability

Incorporated water sensitive urban design elements in infrastructure

improvement works in Stirling and Balhannah.

Completed a master plan, incorporating environmental demonstration features,

for Bridgewater Institute Reserve.

4.5 Managing

Community Facilities

Continued to improve all Council cemeteries, including renewal of path works

and grounds, and provision of on-site utility sheds for ground staff.


2012/13 Achievements Goal 5: Open, Effective & Efficient Governance


5.1 Leadership Commenced review of ten year Strategic Management Plan including

stakeholder consultations with elected members, council staff and ratepayers

and residents across the district

5.2 Effective & Efficient

Services & Infrastructure

Implemented new phone system that links in with customer relationship

management system to further improve responsiveness. Moved onto state wide

library management system to increase customer access to resources and

achieve cost and performance efficiencies.

5.3 Risk Management Development of a risk assessment matrix to define a process for determining if

previous land uses pose a site contamination risk for residential use.

Review of Council’s Building Inspection Policy.

Preparation of a Building Fire Safety Bushfire Protocol to ensure residential

buildings such as hotels, hostels, B&Bs, hospitals and nursing homes meet the

requirement for building fire and bushfire safety.

Undertook a fire safety audit of all of Councils workplaces.

Workplace Health & Safety systems updated to leading sector standards

5.4 Financial

Responsibility

Recorded a 3rd consecutive surplus while keeping the total average rates

increase to 3.6% and adhering to an LTFP that incorporates a responsible AMP.

5.5 Promote Community

Engagement

Conducted community engagement in regard to Strategic Plan Review.

Conducted Engagement strategy for Council On line project, which is funded

through the Digital Local Government program. Further development of Youth

Advisory Committee Terms of reference & positioning closer to Council

Produced Adelaide Hills Community Calendar at no cost to Council. Continued

Twitter feed and grew to over 500 followers.

5.6 Management &

Administration

Expanded Business Excellence programme based on the European Framework

for Quality Management (EFQM). Completed Self Assessment process

Commenced work on 6 key organisational improvement projects..

5.7 Effective Partnerships Continued partnerships with Gawler River Flood Management Authority, East

Waste and Adelaide Hills Regional Waste Management Authority and additional

outsourcing of operations at Heathfield Waste Transfer Station to Finding

Workable Solutions


Financial Sustainability In order for Adelaide Hills Council to be Financially Sustainable it is essential for Council to:

» Maintain the net operating surpluses achieved for the last three years, and particularly to preserve the

ability to generate an underlying surplus if Accounting Standards and one off events result in a reported

deficit in any one year.

» Achieve small operating surplus (up to 10%) in the medium term if present spending and revenue

policies remain unchanged and the asset renewal backlog is to be addressed

» Maintain a margin of comfort sufficient to absorb the impact of any unexpected developments without

the necessity for substantial increases in rates or service reductions.

» Continue to measure and monitor indicators for financial performance,

» Continue to review and track medium to long term financial planning,

» Provide a more rigorous policy framework for service definition, service levels and funding services.

Long Term Financial Plan

During the development of the 2013/14 Budget, Council has considered its 10 year Long Term Financial

Plan. This plan is critical in maintaining the long term financial health of Adelaide Hills Council. The

following assumptions within the current Long Term Financial Plan have been considered in formulating the

2013/14 Budget:

Key Long Term Financial Plan Objectives Link to 2013/14 Budget

Careful consideration prior to significantly

expanding any service provision

No service provisions have been expanded within

the 2013/14 Budget except for minor extensions to

the third bin green waste collection service

introduced during 2012/13.

Maintain long term borrowings at sustainable

levels so that the capacity to service debt does not

reduce.

Council originally adopted a long term financial

strategy to reduce debt. This has proved

inconsistent with the requirement to renew assets

and address the backlog, now demonstrated to be

considerably greater than was thought when the

strategy was originally formulated.

Council now has more sophisticated long term

financial planning capacity which must be used to

balance debt reduction with responsible asset

management.

Consideration of required rate levels, with average

rate increases, above CPI and capital growth due

to development, of 1% for2012/13 and 2013/14.

Rates are proposed to increase by 3.8% in the

2013/14 Budget comprising:

- CPI (estimated at 2.8%)

- Additional Capital Renewal Expenditure of 1.0%

1.0% of rates will contribute approximately $290k

towards this year’s capital renewal budget of

$9.4M Gross. It is consistent with the Long Term

Financial Plan adopted and followed for the last

three years.


Key Objectives for 2013/2014 Maintaining and growing the underlying operating surplus

Council’s budget has achieved another underlying surplus. In order to meet Council’s top priority of

financial sustainability, the key objective for 2013/14 will be to introduce further operating efficiencies and

generate financial savings to better enable Council to meet its high priority objectives (expanded upon

below). Unless Council generates an operating surplus of up to 5% of income, it will never achieve those

objectives.

Reducing the infrastructure renewal backlog

Council continues to face a substantial backlog renewing infrastructure, notably sealed and unsealed roads.

For 2013/14 the capital budget has continued to focus on these areas of need, and new infrastructure

projects have again been kept to a minimum.

Council’s portfolio of assets has been re-assessed to identify underused and potentially surplus assets for

sale, as well as opportunities to combine facilities and realise other opportunities. The budget includes

expected sales proceeds from the disposal of Morialta Barns at Norton Summit and a number of unused

road reserves which have previously represented a burden on council’s ongoing maintenance costs

The Council will pursue government funding to assist in the renewal of identified local roads of regional

economic importance and for projects aimed at reducing the risk of casualty road crashes on the local road

network. The Council will also advocate for improvements to known ‘black spots’ on the state road

network throughout the district.

Improving open space and infrastructure management for sustainability

Council continues to pay attention to the long term consequences of its stewardship of public open spaces

and infrastructure. Sustainability principles are observed managing both asset types, balancing

management plans with protecting the environment and promoting active recreation. To assist the long

term sustainability of its land and linkages to other public and private land Council has commenced

development of an environment and nature conservation strategy which will provide structure to the

ongoing management of these places. A program of assessing the environmental benefit and conservation

value of reserves and roadside areas containing native vegetation will continue. This will assist in the

prioritisation of efforts to conserve biodiversity and will help develop protocols to apply to infrastructure

works where there are potential environmental impacts.

The Council will continue to explore ways to incorporate water reuse and solar generation in infrastructure

improvements where possible. Research and trials will continue on the development of a suitable road

building material sourced from construction and demolition waste.

Encouraging community participation and support

The development of a Community Engagement Strategy is a key goal for this year. This will outline why

council engages with the community and the various methods and approaches that will be used.


Council has again benefitted from an increased amount of Community feedback during 2012/13. Even

adverse feedback is welcome when it is constructive and directs activities to better meet the community’s

needs. Following the 2020 Vision Survey which informed the Strategic Management Plan and community

feedback on key issues such as animal management and car rallies, Council will continue to expand its

consultation using new technologies and opportunities.

The AHC Online initiative will be completed with funding from the Federal Digital Local Government project

and will go live by the end of October. This will include a range of online services delivered through the

revised Council website, and the seamless integration of videoconferencing. Training delivered through the

Stirling Digital Hub (funded by the Commonwealth Government) is empowering the community and

bridging the digital divide one resident at a time, increasing digital access to services and resources

Supporting and developing community arts and culture will again be a high priority as the second Adelaide

Hills International Sculpture Symposium is held in April 2014, and as more local arts festivals and

competitions are encouraged across the district.

The Summit and Torrens Valley Community Centres will continue to develop outreach or ‘pop up’ programs

in different locations. A Positive Ageing Strategy will be developed for Adelaide Hills Council which will

outline approaches to the development of age friendly communities. Acting upon recommendations of a

Grant Giving review, changes to grants programs will be progressively implemented. The Recreation and

Sport Policy and Strategy will be reviewed and refined, in consultation with relevant community groups.

A Community Shed will be built at Uraidla and programs there will be commenced. A Solar Panel project

for the Woodside retirement village will be fully assessed, and if viable, implemented.

Promoting environmental stewardship, protecting & rehabilitating the

environment

Council is committed to both practising and promoting environmental stewardship. The Biodiversity

Strategy will be finalised and this will provide guidance for investment and prioritisation for natural asset

management initiatives over the next 5 – 10 years.

Partnerships with community groups undertaking work on conserving and enhancing biodiversity on

Council land will be strengthened and supported through a communication and networking forum,

incentive funding and a focus on achieving strategically important outcomes identified in vegetation

management plans for high priority sites.

The Council will continue to partner with the Barossa Council to deliver a major federally funded program

to restore grassy woodland areas in the northern parts of the district. The Council will pursue a similar

major grant to enhance and protect habitat for the endangered Southern Brown Bandicoot in the southern

and central parts of the district.

Aligning Council’s long, medium and short term plans with objectives

The key objectives in the 10-year plan are currently under review by the Strategic Management Review

Team. The review includes wide consultation with the community and other stakeholders. The Review is

following the concepts of the Business Excellence program Council is applying to its operations.

Each key objective will be reviewed to show specific goals council plans to achieve with the goals linked to

performance management reports clearly showing goal achievement progress.

Following the Strategic Plan Review, the key objectives will be broken down into goals for each relevant

Council department operational areas. The Corporate Plan will put in place a performance management

framework to monitor the performance progress of the key objectives and goals.


Key strategic objectives with their operational goals will be developed for each of the five strategic plan

areas of focus which are:

1. A healthy, safe, engaged and connected community.

2. Sustainable natural, built and agrarian environments.

3. A prosperous and vibrant economy.

4. Well managed and maintained community infrastructure.

5. Open, effective and efficient governance.

Work Health and Safety

Managing WH&S is a core part of the way we do things at Adelaide Hills Council. The Council has a broad

risk profile associated with its work in the community and in the organisation. AHC is committed to

providing a workplace that:

1. Is safe and healthy for all employees, volunteers, contractors and visitors;

2. Minimises, manages and controls risks within the work environment;

3. Minimises the risk of injury and ill health at work;

4. Complies with the Work Health and Safety (WH&S) Act 2012 and the Performance Standards for Self-

Insured employers.

AHC strives to fully integrate work health and safety into all aspects of its activities and planning through:

» Leadership commitment

» Planning and implementing WH&S policies, procedures, safe operating procedures and the WH&S

Improvement Plan

» Exercise due diligence to ensure WH&S obligations are met

» Effectively implementing controls and corrective actions

» Effectively communicating and consulting with employees

» The provision of training and awareness on WH&S issues

» Proactively managing rehabilitation and early return to work

» Measuring and evaluating the effectiveness of the implementation

» Reviewing and revising the system to enable continual improvement

» Encouraging innovative solutions.

During 2012/13 Council was subject to an independent assessment and benchmarking exercise by the Local

Government Mutual Liability Scheme which sets and monitors the Performance standards for Self Insured

Employers. Council’s performance during 2012, and particularly the improvements achieved since the

previous assessment at the beginning of 2011, were reported to be amongst the best in South Australia.


Activities for 2013/2014 Road Reconstruction

During 2013/14 Council will again concentrate upon a wide

ranging programme to reconstruct both sealed and unsealed

roads across the district. This is assisting in reducing reactive

maintenance costs in future. The combined renewals budget for

transport infrastructure is expected to be maintained in the

region of 85% higher than in 2011/12 once finalised, with over

$5.0m of projects again being planned.

Waste Services

Having successfully transferred the Heathfield Waste transfer station to Adelaide Hills Regional Waste

Management Authority, Council will continue to implement its Waste Management strategy during

2013/14. Third bin (green waste) collection services introduced last year across the required areas will be

extended where cost effective to include additional ratepayers who have requested the service. A limited

“at call” hard waste service has been trialled at the beginning of 2013 and will be continued in line with

demand (expected to be at a reduced level) in 2014. Other means to reduce the increasingly costly waste

stream going to landfill will again be actively pursued.

Also in the area of Waste Services, Council is preparing to complete the works to enhance the Birdwood

Community Wastewater Management System (CWMS) and ensure total compliance with EPA standards.

The remaining investment in CWMS is expected to reach $425k in 2013/14.

Environmental Sustainability

Council continues to implement its new Environmental Sustainability Framework. Strategies being

implemented include energy reduction in Council offices and buildings, energy efficient fleet purchasing,

development of a biodiversity strategy for native vegetation management and increased waste water

recycling for agricultural purposes.

Council continues to manage its 17 cemeteries utilising well-practiced industry strategies for water saving

measures like mulching, drippers and irrigation for its lawn and ornamental areas. It also works with

volunteer groups to enhance the biodiversity value of the native vegetation through:

protecting remnant indigenous flora eg fencing and buffer zones

encouraging natural regeneration of indigenous flora eg manual/ hand removal weeds

revegetating areas with locally indigenous plants to increase the habitat value for local fauna

improving water quality through management of catchment areas and

providing safe and accessible pathways for walkers. eg Pruning trees/bushes, installation of steps

Home & Community Care

Under the Home and Community Care program operated by Council ongoing negotiations with

Commonwealth Government will be undertaken to ensure continued and hopefully growth funding for this

important service to older residents. Review and modify our system for the provision of in home client

services which includes the development of a business case and if approved the recruitment and training of

staff


Activities for 2013/2014 Business Information Systems

During 2013/14 Council will reach the conclusion of the three year programme of Information Technology

updates launched in 2010/11. New customer relationship management and digital telephone systems will

be augmented by a works management system and ultimately a new core business system to link them all

together, while our libraries will be part of the state wide system allowing access to materials across the

state. The underlying annual cost savings to operate these new systems in 2013/14 are calculated to

exceed $175k when compared with the cost of operating their predecessors in 2011/12.

Business Excellence

In August and September 2012, Council conducted a self-assessment of the organisation according to the

European Framework for Quality Management (EFQM). This is a business model successfully used by local

government and public sector organisations all across the world over the past twenty years. In January

2011 it was officially endorsed by the Australian Commonwealth Government. The results of the self-

assessment prioritised six improvement projects which commenced in 2013. These Projects address

Strategy, Corporate Planning, Leadership & People, Partnerships, the Business Operating System and

Process Improvement.

The Process Improvement projects began in February 2013 with the training of a pool of “Facilitators”

made up of employees from across the organisation. Their role is to work with teams to improve processes

by making them more efficient and improving customer service. They will do this through established D-M-

A-I-C problem solving techniques and methods based on the principles of Lean and Six Sigma. This initiative

will continue in the 2013/2014 period, extending to all areas of Council.

The key feature of process Improvement projects is that they allow staff to develop and apply their own

improvements with support from their trained facilitator peers. This in turn begets a far greater sense of

ownership and commitment to the revised processes – they are built and used by teams, not imposed upon

them.

The same self-help principles support the other five projects, with consultation for the Strategic Plan

extending beyond councillors and Staff and out to community consultations. The goals identified by the

Strategic plan will inform the Corporate Plan, which will be prepared to co-ordinate all of the initiatives that

increase the organisation’s ability to deliver those goals


Continuing Services All Councils have basic responsibilities under the Local Government Act 1999 and other relevant legislation.

These include:

» Regulatory activities e.g. maintaining the voters roll and supporting the elected Council;

» Setting rates, preparing an annual budget and determining longer-term strategic management plans for

the area;

» Management of basic infrastructure including roads, footpaths, parks, public open space, street lighting

and storm-water drainage;

» Street cleaning and rubbish collection;

» Development application assessment, building fire safety assessment and formulation of planning

policies and strategies, including the preparation of Development Plan Amendments to update the

Adelaide Hills Development Plan

» Development planning and control, including building safety assessment;

» Various environmental health services.

» Managing internal resources including our people

In response to community needs the Council also provides further services and programs including:

» Aged and Disability Services including Home and Community Care

» Community Development and Support

» Community Centre operations

» Grant making to community organisations

» Community Engagement

» Community Use Buildings

» External Relations and Marketing

» Economic Development and Tourism

» Financial Management and Treasury

» Fire Mitigation

» Information Systems & Information Communication Technology (ICT)

» Library & Customer Services, including Arts & Culture

» Natural Resources

» Cemetery Management

» Other Corporate Support

» Plant and Vehicle Replacement

» Records Management

» Retirement Villages

» Sporting Facilities

» Transport

» Youth Development activities

Council seeks to be responsive to changing needs and conducts regular community surveys to check levels

of satisfaction and areas for improvement.


What it means for Rates

The 2013/14 Budget comprises an increase in general rates of no more than 3.8% (excluding growth from

new development). The 3.8% figure is based upon forecast CPI for the 2012/13 year plus 1% to fund capital

renewal. This equates to an increase of around $60 per annum for the average ratepayer.

In its 2011/12 Annual Report, Council recorded the following trend in rate increases for the last five years,

to which the proposed rates 2013/14 have been added.

2008/09 2009/10 2010/11 2011/12 2012/13 2013/14

To meet inflation (CPI) 4.6% 2.8% 2.9% 3.0% 2.6% 2.8% (est)

To fund capital renewal 2.3% 4.0% 3.0% 2.5% 1.0 1.0

Underlying increase 6.9% 6.8% 5.9% 5.5% 3.6% 3.8%

Additional Maintenance - - - 1.25%

Total 6.9% 6.8% 5.9% 6.75% 3.6% 3.8%

Throughout this period Council has maintained services and met increased demand levels at the same time

as reducing operating deficits and managing rate increases downwards. 2011/12 was an aberration due to

extreme weather events during the preceding year. Through managing and adhering to its Long Term

Financial Plan, Council has been able to implement the third bin program mandated by the EPA within the

previously determined sequence of rate increases and without any additional uplifts.

When determining the rate in the dollar for 2013/14, Council will perform a calculation to allocate the total

rates to be raised across all rate payers according to their property values, as set by the Valuer General. So

Council sets the rate per $ of property value, but the value set by the Valuer General also affects the rate

rise for each individual property. This means that if all property values fall at the same time, rate payer’s

relative shares will stay the same, that is, it will not necessarily result in lower rates bills. It also means that

few if any individual properties will see their rates rise by the 3.8% average amount.

Rating Equity Changes

Since 2008/09 Council has invited general primary producers to apply for a 10% discretionary rebate on

their rates. Approximately 230 ratepayers have lodged applications, all of which expire on 30 June 2013.

The average rebate is $72 per assessment for those ratepayers receiving a Notional Capital Value from the

Valuer General. The average rebate is worth $182 to the 111 assessments not receiving a Notional Capital

Value.

Council is presently considering whether to invite ratepayers to lodge new applications for the rebate

(which would cost the Community about $40k) or whether to apply the funds instead to a Revitalisation

Fund for Primary Production Land. This would be consistent with the original purpose of the discretionary

rebate (“an incentive to keep primary production land use properties in use”), but would increase the

impact of the funds. Possible initiatives would include matters such as:

• Provide training opportunities for Primary Producers (eg marketing, business planning)

• Funding specific research for the benefit of Primary Producers

• Organising Primary Producer forums to discuss common concerns

• Establishing a Primary Producer shopfront to market local produce and products.

Ratepayers and residents with comments on this proposal are invited to make them during the

Consultation process.



Fixed Charge System

The rating system provides for a fixed charge and a rate in the dollar which is applied against the property

value. This has been set at $405 for 2013/14, having been $390 in 2012/13.

The fixed charge is generally recognised as a device to enhance equity among ratepayers. It ensures that

the services that benefit all properties (or people) are recovered from them equally. It avoids the inherent

penalties imposed on our lowest value properties by a minimum rate, and on our highest value properties

by a variable rate only. Fixed charges are particularly appropriate to (and prevalent in) rural and regional

areas such as the Adelaide Hills.

Rate Capping

Capping limits the increase in the rates paid on a principal place of residence to no more than 15%, subject

to certain conditions. Rate capping application forms are provided each year with the annual rates notice,

and applications are invited from all ratepayers who are eligible. Note that where recent improvements to

the property have exceeded $20,000 or the ownership or land use have changed recently, capping will not

be available. It is intended only to relieve existing ratepayers from the impact of sharp upwards capital

revaluations, which are assumed to have been outside their control.

Rate Deferment for Retirees

A Rate Deferral Policy is in place, consistent with the requirements of the Local Government Act 1999. The

policy is aimed to alleviate the “asset rich, income poor” scenario which affects many retirees.

Section 182A of the LG Act requires councils to provide eligible senior ratepayers (i.e. those eligible to hold

a Seniors card) the option to postpone a prescribed proportion of their council rates on their principal place

of residence each financial year.

Regulation 13A(1) of the Local Government (General) Regulations 1999, sets the “prescribed proportion of

rates” that may be postponed as:

» any amount in excess of $500, and

» the property must be the home of the qualifying senior

» interest applies on the deferred rates, (accruing on the deferred rates at 1% over the cash advance

debenture rate, calculated monthly)

The Seniors Postponement Scheme is meant to be applied in a consistent manner across the State to

promote its availability under Section 182 of the Local Government Act 1999. Council can also allow the

postponement of Rates payments, if those payments would cause financial hardship.

Rebate of Rates

The Local Government Act Division 5 requires council to rebate the rates payable on some land. These can

be either mandatory or discretionary rebates.



Mandatory Rebates

A Mandatory rebate of 100% applies to:

» Land predominantly used for service delivery or administration by a hospital or health centre

incorporated under the South Australian Health Commission Act 1976.

» Land containing a church or other building used for public worship, or land used solely for religious

purposes.

» Land being used for the purposes of a public cemetery.

» Land (other than land used as domestic premises) owned by, or under the care, control and

management of, the Royal Zoological Society of South Australia Inc.

A Mandatory rebate of 75% applies to:

» Land occupied by a government school under a lease or licence & being used for educational purposes.

» Land occupied by a non-government school registered under Part 5 of the Education Act 1972 and being

used for educational purposes.

» Land being used by a University or University college to provide accommodation and other forms of

support for students on a not-for-profit basis

» Land predominantly used for service delivery or administration by a community service organisation as

defined under Section s 161(3) & 161(4) of the Local Government Act 1999 (as amended).

» All properties owned by registered community housing associations

The power to determine applications for mandatory rates rebates is delegated to the Chief Executive

Officer. Where a mandatory rebate of 75% applies, Council will not consider any further rebates for that

property.

If Council is aware of an organisation entitled to a mandatory rebate, and that eligibility is not in doubt for

that rebate, then the Chief Executive Officer can grant a rebate without first receiving an application.

Discretionary Rebates

Council has the power (under Section 166 of the Local Government Act 1999 (as amended)) to grant

discretionary rebates as follows:

» The rebate is desirable for the purpose of securing the proper development of the Council area (or part

thereof).

» The rebate is desirable for the purpose of assisting or supporting business within the Council area.

» The rebate will conduce to the preservation of buildings or places of historic significance.

» The land being used for educational purposes.

» The land being used for agricultural, horticultural or floricultural exhibitions.

» The land is being used for a hospital or health centre.

» The land is being used to provide facilities or services for children or young persons.

» The land is being used to provide accommodation for the aged or disabled.

» The land is being used for a residential aged care facility that is approved for Commonwealth funding

under the Aged Care Act 1997 (Cwlth) or a day therapy centre.

» The land is being used by a organisation which, in the opinion of Council, provides a benefit to the local

community.


» The rebate relates to common property or land vested in a community corporation under the

Community Titles Act 1996 over which the public has free and unrestricted access and enjoyment.

» The rebate is considered by Council to provide relief against what would otherwise amount to

substantial changes in rates payable by a ratepayer due to changes in the basis or structure of the

Council’s rates, or a change in the basis of valuation, rapid changes in valuation or anomalies in

valuations.

» A liability to pay a rate or charge that is inconsistent with the liabilities that were anticipated by the

Council in its annual business plan.

» The power to determine applications for discretionary rebates of rates has been delegated to the Chief

Executive Officer.

Applications for a rates rebate must be made in writing and accompanied by the appropriate supporting

documentation.


Funding the Business Plan Adelaide Hills Council Budgeted Funding Statement

2013/14 Budget

2011/12

Actuals

$’000

2012/13

Adjusted Budget

$’000

2013/14

Budget

$’000

OPERATING INCOME

28,758 Rates 29,717 31,140

824 Statutory Charges 907 852

1,320 User Charges 1,091 1,073

3,711 Grants and Subsidies 3,849 3,302

69 Investment Income 75 77

376 Reimbursements 217 201

997 Other Income 1,195 1,185

251 Joint Ventures

36,306 TOTAL INCOME 37,051 37,830

OPERATING EXPENSES

12,139 Employee Costs 12,722 13,255

16,199 Materials,Contracts & Other Services 16,402 16,430

690 Finance Costs 582 689

6,906 Depreciation 7,285 7,266

35 Joint Ventures

33,756 TOTAL OPERATING EXPENDITURE 35,991 37,640

337 NET BUDGETED SURPLUS/ (DEFICIT) BEFORE CAPITAL

AMOUNTS 60 190

Less: Net Outlays on Existing Assets

9,454

Capital Expenditure on Renewal and Replacement of

Existing Assets 10,195

9,425

Unwind Waste Remediation - -

Provision for Waste Remediation - -

(501) Proceeds from Sale of Replaced Assets - -

(6,906) Depreciation (7,285) (7,266)

2,047 NET OUTLAYS ON EXISTING ASSETS 2,910 2,159

Less: Net Outlays on new and Upgraded Assets

378 Capital Expenditure on New and Upgraded Assets &

Remediation costs 1,566

390

(1,357) Capital Grants and Monetary Contributions for New and

Upgraded Assets (1,568)

(625)

Proceeds from Sale of Surplus Assets (320) (500)

(979) NET OUTLAYS ON NEW AND UPGRADED ASSETS (322) (635)


(4,127) Asset Revaluations

-

(7) Joint Ventures - -

(4,134)

-


3,403 Net Lending/ (Borrowing) for Financial Year (2,528) (1,334)


Funding the Business Plan Budgeted Funding Statement Explanations

Operating Income

Rates (Total increase of $1.3m or 3.8% + growth 0.5%)

The 2013/14 budget has been based on the assumptions of the long term financial plan, including a General

Rate increase of CPI plus 1.0%. The General Rates are therefore budgeted to increase as follows:

CPI (estimated) 2.8%

Capital Renewal 1.0%

3.8%

Statutory Charges (Total decrease of $49k or 5.5%)

This reflects decreasing activity in respect of Planning and Development areas and a “levelling off” of

penalty charges in a number of areas relating to Health & Regulatory activities (eg. Parking and dog

registration fees)

Grants and Subsidies (Operating) (Total decrease of $(283)k or 7.9%)

The decrease is primarily due to the completion or discontinuation of several grant funded services and

projects. Associated costs for employee, contractor or materials costs have therefore been excluded from

the budget and contribute to some of the expense decreases below..

Other Income (Total decrease of $(92)k or 9.7%)

Council has sought to contain charge increases wherever possible, and has also budgeted for reduced usage

in some areas as a consequence of prevailing economic conditions.

Operating Expenditure

Wages and Salaries (Total increase of $(462)k or 3.6%)

The main changes to salaries and wages are summarised as follows:

» EDA increase estimated at 2.5% applicable to both annual salaries and accrued entitlements

» Compulsory additional Superannuation Contributions of 0.25% effective from 1 July 2013

» Three short term (12 month, 1.8FTE) positions, funded by the Department of Broadband

Communications and Digital Economy , to operate the Digital Hub at Coventry Stirling Library.


Operating Expenditure

Contractors (Total decrease of $154k or 2.6%)

The decrease is despite inflation driven by the Local Government Price Index in excess of 3.0% and reflects

a reduction in contractors from 2012/13 following the discontinuation of some grant funded programmes

and the impact of ongoing process improvements expected to reduce the amount of work required to be

outsourced to contractors during 2013/14.

Waste Contractors (Total increase of $(140)k or 3.8%)

The increase is primarily driven by cost increases due to increasing land fill charges and price increases

driven by the carbon tax. These have been offset by reductions in the volume of waste sent to landfill,

which are attributed to the introduction of a third green waste bin during the year and increased recycling

and specialist electronic waste collection programmes started during 2012/13.

Fuel (Total increase of $35k or 7.0%)

For 2012/13 Council budgeted for fuel costs in in expectation of savings being generated as Council

switches to more fuel efficient cars and trucks. Whilst these have been realised, further price increase in

excess of CPI are anticipated, hence the slightly increased budget for 2013/14.

Finance Costs (Total increase of $(107)k or 16.0%)

The increase again reflects Council’s increased reliance on interest bearing loans to fund capital

expenditure addressing the infrastructure renewal backlog and accumulated operating deficits.

Depreciation provisions and recent surpluses have yet to generate sufficient cash to contain or reduce

borrowing requirements.

Other Costs (Total increase of $(49)k or 1.7%)

Council incurs a range of other costs in providing services, and these are largely unchanged from 2011/12.

Depreciation (Total decrease of $(48)k or 0.6%)

Council continues to experience benefits from the revised policy for Plant and vehicles adopted in 2009 and

particularly the calculation of more representative depreciation charges for these categories of asset.

Additionally, Council has been advised to adopt a new fixed asset policy in regard to its library collection

following the introduction of the One Library state wide system. Whilst the collection of materials will

continue to be fully controlled within the library system, for financial purposes the collection will be written

down to zero value and no further depreciation charged. These two factors explain the lower than

anticipated depreciation provision budgeted for 2013/14


Funding the Business Plan Budgeted Funding Statement Explanations

Operating Expenditure continued…

Operating Surplus

The operating surplus of $190k is the extent to which Council will exceed its operating costs with income in

the year. Council continues to operate at or about breakeven (in the context of its $38M turnover), which

means that no significant funds are being generated to pay for asset renewal in excess of the depreciation

provision. Similarly, no funds are being generated to pay for any new (rather than replacement)

infrastructure. Items such as new footpaths have to be paid for with increased borrowings.

In this proposed budget Council has allowed for $390k of new (ie additional) assets, of which approximately

half will be funded by the operating surplus for the year.

Net Outlays on Existing, New or Upgraded Assets

This maintains the considerable reduction in new infrastructure and the increased emphasis on replacing

and upgrading existing infrastructure which Council introduced in the 2012/13 budget. Overall capital

expenditure is again forecast to exceed depreciation, which means adding more to the value of Council’s

assets than is consumed. A detailed itemisation of the capital works programme may be found later in this

document.


Budget 2013-14 Adelaide Hills Council Budgeted Comprehensive Income Statement

2011/12

Actuals

$’000

2012/13

Adjusted Budget

$’000

2013/14

Budget

$’000

OPERATING INCOME

28,758 Rates 29,717 31,140


1,320 User Charges 1,091 1,073




997 Other Income 1,095 1,085

251 Joint Ventures 100 100

36,306 TOTAL INCOME 37,051 37,830

OPERATING EXPENSES

12,139 Employee Costs 12,722 13,255

16,199 Materials, Contractual & Other Services 16,402 16,430



35 Joint Ventures


337 OPERATING SURPLUS/ (DEFICIT) 60 190

123 Asset Disposal and Fair value adj

1,357 Amounts received for new/upgraded assets 1,568 625

Physical resources received free of charge

1,817 NET BUDGETED SURPLUS/ (DEFICIT) 1,628 815


(4,127) Asset Revaluation

(7) Joint ventures

(4,134) -

(2,317) TOTAL COMPREHENSIVE INCOME 1,628 815


Budget 2013-14 Adelaide Hills Council Budgeted Balance Sheet

2011/12

Actuals

$’000

2012/13

Adjusted Budget

$’000

2013/14

Budget

$’000

CURRENT ASSETS

1,266 Cash and cash equivalents 1,407 1,341

2,573 Trade & other receivables 3,133 2,628

19 Inventories 23 19

3,858 TOTAL CURRENT ASSETS 4,563 3,988

NON-CURRENT ASSETS

244,736 Infrastructure, Property, Plant & Equipment 248,174 248,223

1,228 Financial Assets 1,051 1,327

245,964 TOTAL NON-CURRENT ASSETS 249,225 249,550

248,822 TOTAL ASSETS 253,788 253,538

CURRENT LIABILITIES

5,168 Borrowings 5,455 5,181

9,104 Trade & Other Payables 9,667 9,460

989 Short term Provisions 1,456 999

15,261 TOTAL CURRENT LIABILITIES 16,578 15,640


5,292 Long- term Borrowings 5,000 5,292

211 Long- term Provisions 645 211

5,503 TOTAL NON-CURRENT LIABILITIES 5,645 5,503

20,764 TOTAL LIABILITIES 22,223 21,143

229,058 NET ASSETS 231,565 232,395

EQUITY

128,225 Accumulated Surplus 129,853 130,683

96,358 Asset Revaluation Reserve 96,358 96,358

0 Reserves beginning of year - -

0 Transfers to Reserves - -

0 Transfers from Reserves - -

4,475 Reserves at end of year 5,354 5,354

229,058 TOTAL EQUITY 231,565 232,395


Budget 2013-14 Adelaide Hills Council Budgeted Cashflow Statement

2011/12

Actuals

$’000

2012/13

Adjusted Budget

$’000

2013/14

Budget

$’000

CASH FLOWS FROM OPERATING ACTIVITIES

RECEIPTS

28,454 Rates 29,717 31,140


1,561 User Charges 1,091 1,073


69 Interest Received 75 77

414 Reimbursements and Donations 217 201

2,846 Other 1,195 1,185

38,104 TOTAL RECEIPTS 37,051 37,830

PAYMENTS

(12,209) Employee Costs (12,722) (13,255)

(18,524) Materials, Contracts & Other Services (16,402) (16,430)

(665) Finance costs (582) (689)

(97) Investment Payments

(31,495) TOTAL PAYMENTS (29,706) (30,374)

6,609 NET CASH USED IN OPERATING ACTIVITIES 7,345 7,456


RECEIPTS

98 Proceeds from Borrowings - -

504 Proceeds from Aged Care Facility Deposits

PAYMENTS

(147) Repayment from Borrowings - -

455 NET CASH USED IN FINANCING ACTIVITIES - -


RECEIPTS

1357 Grants for new or upgraded assets 1,568 625

501 Sale of replaced/ new assets & other investment 390 400

PAYMENTS

(9,454) Expenditure on new/ upgraded assets (1,566) (390)

(378) Expenditure on renewal/ replacement of assets (10,195) (9,425)

(82) Contribution to Associated Entities - -

(8,056) NET CASH USED IN INVESTING ACTIVITIES (9,803) (8,790)

(992) NET INCREASE (DECREASE) IN CASH HELD (2,458) (1,334)

(2,743) CASH AT BEGINNING OF YEAR (3,735) (6,193)

(3,735) CASH AT END OF YEAR (6,193) (7,527)


Budget 2013-14 Adelaide Hills Council Statement of Changes in Equity

Accumulated

Surplus

$’000

Asset

Revaluation

Reserve

$’000

Other

Reserves

$’000

Total

Equity

$’000

2014


Net Surplus / (Deficit) for year 815 815


Asset Revaluation -

Joint Ventures -


130,668 96,358 5,354 232,380

2013




Asset Revaluation

-

Joint Ventures -


129,853 96,358 5,354 231,565

Key Performance Indicators 2011/12

Actuals

2012/13

Adjusted

Budget

2013/14 Draft

Budget

Operating Surplus 337 60 190`


Operating Surplus 0.95% 0.16% 0.51%


Net Financial Liabilities $k 16,702 17,660 17,155


Net Financial Liabilities 47% 49% 46%



Net Asset Renewals 137% 140% 97%

Depreciation Expense

Asset Consumption Ratio

Carrying value of depreciable assets 57% 59% 59%

Gross value of depreciable assets


Budget 2013-14 Wages & Staff Numbers Summary

Department

2012/13 Forecast 2013/14 Budget

Total FTE Gross

Salary $k Total FTE

Gross

Salary $k

Waste Services 2.0 113 2.0 117

Domestic Refuse Collection 2.0 113 2.0 117

Planning & Development Services 18.7 1,396 18.7 1,438

Development Assessment & Compliance 18.7 1,396 18.7 1,438

Environmental & Natural Resources 15.1 1,094 15.1 1,127

Fire Mitigation 4.0 248 4.0 255

Natural Resources 3.0 238 3.0 245

Regulatory Services 8.1 609 8.1 627

Community Recreation and Leisure 13.0 789 13.0 813

Community Use Buildings 5.0 364 5.0 375

Economic Development and Tourism 1.0 62 1.0 64

Parks and Reserves 7.0 363 7.0 374

Community Services 39.5 2,472 41.3 2,650

Community Support/Retirement Villages 2.0 159 3.8 268

Home and Community Care 12.5 803 12.5 827

Library & Customer Services 25.0 1,510 25.0 1,555

Corporate Support 26.1 2,122 26.6 2,238

Financial Management and Treasury 5.3 424 5.3 437

Information Technology 6.0 463 6.5 529

Other Corporate Support 13.2 1,132 13.2 1,166

Rates Administration 1.6 103 1.6 107

Infrastructure Assets 59.2 3,619 59.2 3,728

Bridges 1.0 50 1.0 52

Footpaths and Trails 4.0 204 4.0 210

Infrastructure Support 18.2 1,495 18.2 1,540

Roads - Sealed 19.0 984 19.0 1,014

Roads - Unsealed 9.0 470 9.0 484

Stormwater Drainage 1.0 53 1.0 54

Transport 7.0 363 7.0 374

Grand Total 173.7 11,606 176.0 12,110

Note: total headcount and gross salary cost include staff employed on capital projects Increased FTE from 2012/13 reflects NBN Project related staff for Digital Hub and AHC Online.


Capital Projects Asset Renewal Projects

Each year, the Council must replace existing assets as their condition deteriorates or they become

unserviceable. Replacing assets in a planned and timely fashion is key to ensuring they remain fit for use by

the community.

Asset Type Asset Management Plan

Provision for 13/14 ($k)1

Proposed 2013/14

Renewal Budget ($k)2

Road Resealing 2,000 1,969

Road Pavements 1,550 1,556

Road Shoulders 650 366

Unsealed Roads Resheeting 1,850 1,840

CWMS components 500 425

Bridges 50 107

Footbridges 0 0

Footpaths 550 548

Kerbing 350 351

Retaining walls 25 25

Guardrail 125 105

Stormwater infrastructure 320 320

Community and civic buildings 358 192

Adelaide Hills Business & Tourism Centre 80 155

Retirement villages 62 155

Playgrounds 25 25

Traffic control devices 50 63

Bus stops & shelters 10 45

Street furniture 15 30

Plant & equipment / vehicles 590 600

Information & communication systems 200 239

Library stock 130 206

Cemeteries 23 0

Furniture & fittings 23 0

Sport & recreation 135 104

TOTAL 9,671 9,425

Notes:

1. The asset Management Plan prepared during 2012 and adopted in April 2013 sets out the planned

renewal spend required for each asset category in order to eliminate Council’s asset renewal backlog

by 2021. It is therefore greater than the associated depreciation charge for several categories.

Council’s Asset Sustainability ratio KPI is now required to be calculated by comparing budgeted asset

renewal spend with the amount in the Plan, and so the KPI should now average 100% again over

time.

2. For some asset types, the proposed renewal expenditure is significantly higher than the amount

estimated in the Asset Management Plan because urgent renewal needs have been identified since

the plan was prepared. Likewise, some asset types have lower proposed renewal expenditure

where the overall condition of those assets has not deteriorated as much as expected.


Capital Projects New Assets and Initiatives

In addition to renewing existing assets, the Council is required to create new assets or embark on new

initiatives to address changing community needs and comply with statutory requirements.

Examples include:

» Investing in sustainability initiatives such as the installation of solar panels

» Creating new community buildings and facilities

» Installing new visitor facilities in parks and reserves

» Building new footpaths

» Sealing unsealed roads

» Installing new guard rail to roads and bridges

» Upgrading sporting facilities

» Building new stormwater drains and kerbing

» New information and communication technology

» Upgrading the capacity of Community Wastewater Management Schemes

» Providing fencing around playgrounds and creeklines

The creation of new assets has an impact on future costs because they generally require ongoing

maintenance and servicing. The Council also needs to allow for the eventual renewal of those assets

through depreciation. These factors, on top of the upfront cost, restrict the amount of new assets and

initiatives that the Council can fund.

New asset or initiative type Proposed expenditure ($k)

Road safety improvements (bridge guardrails) 175

CWMS improvements – water re-use at Birdwood 150

CWMS improvements – surge prevention at

Woodside 65

TOTAL 390

Carried-forward Projects

Each year, some projects that were committed in the last Budget & Business Plan cannot be completed due

to unforseen events or unavoidable delays. These projects are still important and the funding

commitments, other than what has already been spent, are carried forward into the next financial year.

Carried Forward Project Proposed carried forward expenditure ($k)

Information & communication system projects 210

Infrastructure asset projects 95

Building asset projects 54

Plant, equipment and library related projects 15

TOTAL 374


Assets Report Card Grades 2012/13 The following table represents the results of Adelaide Hills Councils Asset Report Card assessment of all of

its key assets for 2012/13. This assessment was conducted for the first time in 2011/12 using data from

councils asset management register together with assessment of other key aspects of each asset. The

assessments were undertaken by the staff responsible for the assets in question. The key assessment areas

were; Condition, technical, community, environmental, sustainability, safety and economic.

The Report Card has been re-graded on an annual basis in order to assist in prioritising works and tracking

the effect of council’s improvement strategies on the performance of our assets. It is used in conjunction

with the Asset Management Plan to help substantiate any departures from that Plan.

A similar Report Card process has been conducted for several years for each of the States and Territories in

Australia by Australia’s peak Engineering body in order to determine how effective the infrastructure

systems are at coping with current and future demands.

Asset

Category

Asset Description Weighted

2013 Score

(%)

Weighted

2012 Score

(%)

2013

Report

Grade

2012 Asset

Replacement

Value ($k)

% of Total

Asset Value

8 Sealed Roads 59 57 C 162,427 49.6%

12 Stormwater Drainage 42 41 D 26,721 8.2%

9 Unsealed Roads 63 61 C+ 18,986 5.8%

13 CWMS 52 48 D+ 16,095 4.9%

14 Bridges 56 56 C 13,792 4.2%

18 S&R Facilities 48 51 C- 13,359 4.1%

25A AHBTC Buildings 51 57 C 11,785 3.6%

19 Halls 45 47 D+ 10,781 3.3%

23 Libraries 66 66 B- 8,650 2.6%

10 Footpaths Towns 52 51 C- 7,209 2.2%

29 Fire Trails 56 56 C 7,000 2.1%

22 Aged Accommodation 60 73 B 5,940 1.8%

17 Administration Buildings 59 74 B 5,398 1.6%

15 Retaining Walls 54 50 C- 3,120 1.0%

11 Footpaths Outside Towns 36 36 D- 3,000 0.9%

20 Fires Services 64 66 B- 2,960 0.9%

27 Ovals 78 78 B+ 2,950 0.9%

21 Depots 56 56 C 1,614 0.5%

1 Cemeteries 64 65 B- 1,544 0.5%

16 Public Toilets 57 67 B- 1,236 0.4%

24 Community Centres 61 61 C+ 1,000 0.3%

25 Historical Buildings 40 40 D- 1,000 0.3%

7 Playgrounds 74 66 B- 690 0.2%

30 Dog Kennels 71 57 C 12 0.0%

2 Parks North 59 58 C -

3 Parks South 64 64 C+ -

4 Reserves North 59 59 C -

5 Reserves South 62 60 C+ -

6 Reserves Crown 51 57 C -

26 Recreation Centres 55 55 C - 0.0%

28 Unmade Road Reserve 34 47 D+ - 0.0%

Overall Grade/Total 56 55 C 327,270 100%


DRAFT Capital Projects Listing Capital Asset Renewal Budget 2013-14 (Detailed)

Reseals to Renewal Seal

Road Name Locality Name $k

Lindner Av Basket Range 27.6

Ridge Road Bradbury 50.7

Murray Road Inglewood 58.5

Range Road North Upper Hermitage 60.0

Churchett Rd Paracombe 32.8

Murphy Road Paracombe 18.0

Blackhill Rd Houghton 107.7

Nichols Road Norton Summit 29.3

Pimpala Rd Ironbank 16.2

Aldgate Valley Rd Aldgate 71.5

Nation Ridge Rd Aldgate 51.1

Quarry Rd Charleston 15.0

Plummers Rd Forrest Range 67.0

Vista Court Gumeracha 4.9

Gores Road Piccadilly 56.3

Tree Trimming pre-reseal All 45.0

Fowler Street Woodside 52.3

Lauterbach Av Woodside 16.4

Robert Street Woodside 34.8

William Street Woodside 67.7

Margaret St Woodside 42.8

Valley Drive Teringie 89.7

Nairne Road Balhannah 55.0

Carawa Av Balhannah 39.0

Darkana Rd Balhannah 21.4

Malanilla Crt Balhannah 10.1

Mamara Crt Balhannah 11.2

Arrawa Crt Balhannah 14.6

Illinga Avenue Balhannah 28.7

Unkuala Rd Balhannah 25.3

John Street Oakbank 23.2

Birch St Oakbank 10.7

Oak Ave Oakbank 32.9

Debenys Road Norton Summit 45.9

Thomas Street Mt Torrens 17.7

Sinkinson Road Mt Torrens 20.9

Tuck St Mt Torrens 44.1

Oval Rd Mt Torrens 17.6



Reseals to Renewal Seal continued…..


Nichols Rd Inglewood 19.2

Milbianca Rd Inglewood 19.2

Bartholomew Rd Lobethal 54.6

Sharrad Court Crafers 7.4

South St Mylor 22.5

Johnson Street Stirling 32.9

Schocroft Road Piccaddilly 6.4

Sturt Valley Rd Ironbank NDI

Swamp Road Lenswood NDI

Boundary Drive Carey Gully NDI

Red Rd Verdun NDI

Riverview Rd Stage 2 Woodside NDI

Coldstore Road Lenswood NDI

Checkers Hill Road Kersbrook NDI

1969.1

Road Pavements Reconstructions to Renew


Sturt Valley Road Ironbank 275.4

Coldstore Road Lenswood 283.5

Riverview Rd Stage 2 Woodside 94.5

Swamp Road Lenswood 392.0

Checkers Hill Road Kersbrook 336.0

Heathfield Road Heathfield NDI

Sturt Valley Road Stirling NDI

Pfieffer Rd Woodside NDI

Churinga Rd Aldgate NDI

Druid Ave Park Bays Stirling NDI

Corkscrew Road Montacute NDI

Montacute Road Montacute NDI

1,556.4



Reseals to Renew Traffic Control


Suffolk Rd Aldgate NDI

Blackhill Rd Houghton NDI

Ayers Hill Rd Roundabout Stirling NDI

Nation Ridge Aldgate NDI

62.5

Shoulders


Oval Road Mount Torrens NDI

Nation Ridge Road Aldgate NDI

Ridge Road Lobethal NDI

Sturt Valley Road Ironbank NDI

Coldstore Road Lenswood NDI

Riverview Rd Stage 2 Woodside NDI

Deviation Road Forrest Range NDI

Swamp Road Lenswood NDI

Checkers Hill Road Kersbrook NDI

366.2

Unsealed Road Resheets to Renew


Unsealed Intersection Safety Improvements 75.0

LUCKY HIT ROAD BIRDWOOD 26.9



WHITEHEAD ROAD MYLOR 23.4

WILSON ROAD MYLOR 17.4

WILSON ROAD MYLOR 38.3

BOYLE SWAMP ROAD MYLOR 19.2

RATHJEN ROAD BIRDWOOD 38.0



Unsealed Road Resheets to Renew (continued)


LESKE ROAD BIRDWOOD 79.1

MOUNT GAWLER ROAD KERSBROOK 69.3

RAKE ROAD KERSBROOK 52.0

RAKE ROAD KERSBROOK 44.4

AIRSTRIP ROAD LOWER HERMITAGE 64.0

AIRSTRIP ROAD LOWER HERMITAGE 56.4

WARMINGTON RUN MT TORRENS 31.9

LIHOU ROAD LOBETHAL 46.8

MAIDMENT ROAD LOBETHAL 55.7



SUTHERLAND ROAD BASKET RANGE 11.0

MERCHANTS ROAD BASKET RANGE 23.0

MERCHANTS ROAD BASKET RANGE 40.1

ILLERT ROAD MYLOR 31.6

WOTTON LANE SUMMERTOWN 10.4

WOOLY BUTT ROAD IRONBANK 21.2

HOOPER ROAD KERSBROOK 20.0

HOOPER ROAD KERSBROOK 13.5

FIDLERS HILL ROAD INGLEWOOD 22.9

FIDLERS HILL ROAD INGLEWOOD 68.5

WOODLANDS ROAD LOBETHAL 71.2

MUELLERS ROAD BIRDWOOD 38.2

WATTLE ROAD KERSBROOK 33.9



WOOLSHED ROAD KERSBROOK 61.0

WOOLSHED ROAD KERSBROOK 43.6

CRISPIN ROAD KERSBROOK 25.9

BULMAN ROAD KERSBROOK 16.2

CROFT ROAD LOBETHAL 11.6






HAWTHORNE ROAD MYLOR 24.7

1,839.6



CWMS Renewals – Condition/Capacity

Asset Locality Name $k

Gravity Main Woodside NDI

Gravity Main Kersbrook NDI

Gravity Main Charleston NDI

Gravity Main Mt Torrens NDI

Gravity Main Birdwood NDI

PS Pump Stations Mt Torrens NDI

425.0

Bridge Renewals of Components


Burtons Road

Repair wingwall support & concrete

ceiling NDI

Camac Road Repair steel beams, patch floor NDI

Kemp Road Clean & treat rusted steel girders NDI

Bonython Road Repair abutments / wing walls NDI

Cyanide Road Repair concrete culverts & wingwall NDI

07.0

Guard Rail Renewals


Springhead Road MT TORRENS NDI

Milbianca Road LOWER HERMITAGE NDI

Hollands Creek Road PARACOMBE NDI

Post office Road LOBETHAL NDI

125.0


DRAFT Capital Projects Listing Capital Asset Renewal Budget 2013-14 (Detailed

Footpath Renewals


David Street LOBETHAL NDI

Church Street LOBETHAL NDI

Ayers Hill Rd STIRLING NDI

Wattle St LOBETHAL NDI

Union St LOBETHAL NDI

Tuck St MOUNT TORRENS NDI

Main Street (southern side) CRAFERS NDI

Piccadilly Rd CRAFERS NDI

Mt Barker Rd STIRLING NDI

Mt Barker Rd BRIDGEWATER NDI

Mt Barker Rd ALDGATE NDI

Greenhill Road SUMMERTOWN NDI

Greenhill Road URAIDLA NDI

Pine Street STIRLING NDI

Thomas Street MOUNT TORRENS NDI

Anderson Street BRIDGEWATER NDI

Druid Ave STIRLING NDI

Main St adjacent Nairne Rd BALHANNAH NDI

DDA Access Ramp Upgrades VARIOUS NDI

547.6

Bus Stop Renewals


Bus Stops Pad Works Various NDI

Arkaba Rd/Kemp Rd Bus Stop ALDGATE NDI

Bus Stops Pad Works Various 50.0

Street Furniture & Retaining Walls Renewals


Longwood Road Post & Rail STIRLING NDI

Crafers School Retaining Wall CRAFERS NDI

55.0



Kerb Renewals


Driffield St Bridgewater NDI

Dunn St Bridgewater NDI

Orontes Ave Bridgewater NDI

Osterley Ave Bridgewater NDI

Fleet Street Bridgewater NDI

Fleet Street Bridgewater NDI

Avoca Ave Bridgewater NDI

Orsova St Bridgewater NDI

Cross Street Mylor NDI

Onkaparinga Valley Rd Balhannah NDI

Onkaparinga Rd Aldgate NDI

Ridge Rd Lobethal NDI

Langbein Ave Woodside NDI

Fenchurch Rd Aldgate NDI

Kingsland Rd Aldgate NDI

Eves Place Heathfield NDI

Violet Ave Crafers NDI

Fairview Rd Aldgate NDI

350.8

Stormwater Renewals


Kumnick Street/Ridge Rd NDI

Woodside Main Street NDI

Union/Rose Street Kerb and Pits NDI

Shannon St Birdwood Orifice NDI

Copeland Ave 100yr Capture NDI

St Barberie Way Pit Upgrades NDI

320.0



Buildings Component Renewals

Building Locality Name $k

Birdwood Hall - kitchens Birdwood NDI

Birdwood Hall - ceilings Birdwood NDI

Birdwood Hall - floors Birdwood NDI

Unallocated – Halls component renewals Various NDI

Unallocated – Office component renewals Various NDI

Lenswood Heritage Park Lenswood NDI

Swimming Centre - pool heaters Woodside NDI

Upper Hermitage bldgs /courts Upper Hermitage NDI

192.0

Building 14 Lobethal NDI

Building B19 Lobethal NDI

Building 23 Lobethal NDI

Building 5a Lobethal NDI

Building 5c Lobethal NDI

All Buildings Lobethal NDI

Site Roadways to Buildings Lobethal NDI

155.0

Sport & Recreation Various NDI

Playgrounds Various NDI

129.0

External Painting Balhannah, Gumeracha,

Woodside Retirement Villages Various NDI

General RV (vacant units) Various NDI

Crafers Retirement Village Crafers NDI

External/Internal Painting Various NDI

Hot water service replacements Various NDI

155.0

Information and Business Systems

Description $k

Integrate Mapping software to Core Business System NDI

Renewal of Organisation-wide electronic data management (records) system NDI

239.0


DRAFT Capital Purchases Listing Capital Asset Renewal Budget 2013-14 (Detailed)

Plant and Equipment (Works Staff) Renewals

Plant/Vehicle $k

Isuzu 3 tonne tipper NDI

Mower Kubota F3680 72" NDI

Roller Ingersol Rand DD24 2.5t NDI

Kubota GR2110 Mid Mount Mower NDI

Isuzu NPR 300 NDI

Isuzu NPR 300 NDI

Mitsubishi FK600 NDI

Truck Isuzu Flocon NDI

Various Light fleet vehicles changeover budget NDI

600.0

Library Stock and Fittings Renewals

Stock/Fitting $k

Books, CD's, etc funded by Govt Grant 127.4

DVDs (from specific grant) 12.0

Refurbish mobile library NDI

Solar Funding (Stirling) NDI

Materials Replacement NDI

Ongoing shelving replacement (Woodside) NDI

Rework children's area shelving (Stirling) NDI

Re-upholster bases/centre areas (Stirling) NDI

Blinds for Library windows (Woodside) NDI

Dividers to split library/TVCC (Gumeracha) NDI

Grant income central purchasing -127.4

Grant income DVDs -12.0

66.9

TOTAL Gross 9,425.4

NOTE: line items marked "NDI" (Non-Disclosed Information) are likely to be subject to competitive tender

and have therefore not been disclosed. Some similar competitive tenders in recent years appear to have

been influenced by budgetary disclosures, compromising Council's ability to secure value for money.


Operating Budget Summary

Detailed below is the operating budget for the whole of Council expanded across the key income and

expense areas monitored by Council’s internal management reporting and Long Term Financial Plan.

Whole of Council

Summary

Summary of

2011-12

Actual

Summary of

2012-13

Forecast

Summary of

2013-14

Budget

Revenue 36,270 36,996 37,830

Rates 28,739 29,858 31,140

Statutory Charges 821 902 852

User charges 1,332 1,086 1,073

Grants 3,757 3,584 3,302

Investment Income 66 75 78

Reimbursements 365 217 204

Other Revenues 1,189 1,274 1,183

Expense (35,932) (36,936) (37,640)

Staff Costs (12,326) (12,802) (13,264)

Contractors (5,654) (6,016) (5,862)

Waste Contractors (2,885) (3,732) (3,872)

Consultants (461) (463) (444)

Materials (2,253) (1,901) (1,966)

Fuel (476) (506) (542)

Finance charges (687) (582) (689)

NRM Levy (784) (750) (788)

Other Costs (3,500) (2,898) (2,947)

Depreciation (6,907) (7,285) (7,266)

Grand Total 337 60 190

All figures in $'000s

Note for some categories of income and expense, Council’s internal management reporting adopts a

different treatment to offsets (eg reimbursements or refunds) to that reported in the Uniform Presentation

of Finances required by the Local Government Act 1999. This is why some income and expense totals differ

from the summary information reported above. In each case the net result for council is unchanged.


Operating Budget by Service Areas

Detailed below is the operating budget for each of the for the individual service areas expanded across the

key income and expense areas monitored by Council’s internal management reporting and Long Term

Financial Plan. The following service areas are reported:

» Waste Services

» Planning & Development Services

» Community Recreation/Leisure

» Community Services

» Infrastructure Assets (incl Environment & Natural Resources)

» Governance

» Corporate Support

Waste Services

Waste Services Summary

Summary of

2011-12

Actual

Summary of

2012-13

Forecast

Summary of

2013-14

Budget

Revenue 1,565 1,238 1,293

Rates 1,166 1,213 1,266

User charges 298 0 0

Grants 0 0 0


Other Revenues 68 0 0

Expense (4,392) (4,621) (5,266)

Staff Costs (324) (137) (147)

Contractors (577) (739) (701)

Waste Contractors (2,885) (3,732) (3,872)

Consultants (19) (30) (31)

Materials (307) (302) (308)

Fuel 0 0 0

Finance charges 0 0 0

Other Costs (14) (18) (25)

Depreciation (330) (333) (342)

Grand Total (2,891) (4,052) (4,134)



Planning & Development Services

Planning & Development

Services Summary

Summary of

2011-12

Actual

Summary of

2012-13

Forecast

Summary of

2013-14

Budget

Revenue 499 511 459

Rates 0 0 0



Grants 0 0 0




Expense (2,390) (2,662) (2,905)

Staff Costs (1,787) (2,196) (2,259)

Contractors (1,350) (1,651) (1,722)

Consultants (108) (100) (83)

Materials (31) (93) (109)


Other Costs (188) (239) (232)

Depreciation 0 0 0

Grand Total (1,288) (1,685) (1,800)


Community Recreation & Leisure

Community Recreation &

Leisure Summary

Summary of

2011-12

Actual

Summary of

2012-13

Forecast

Summary of

2013-14

Budget

Revenue 1,939 2,322 2,081



Grants 567 840 624




Expense (3,107) (3,337) (3,604)

Staff Costs (1,946) (2,678) (2,826)

Contractors (2,123) (2,303) (2,341)

Consultants (206) (80) (104)

Materials (1,355) (1,652) (1,740)

Fuel (2) (9) (9)

Other Costs (629) (569) (599)

Depreciation (1,091) (1,160) (1,193)

Grand Total (5,412) (6,129) (6,732)



Library, Community & Customer Services

Library, Community &

Customer Services Summary

Summary of

2011-12

Actual

Summary of

2012-13

Forecast

Summary of

2013-14

Budget

Revenue 1,551 1,606 1,424

Rates 4 12 4


Grants 984 1,093 891



Expense (4,569) (5,166) (4,912)

Staff Costs (2,387) (2,957) (2,923)

Contractors (548) (575) (525)

Consultants (12) (71) (12)

Materials (298) (321) (335)

Fuel 0 0 0


Other Costs (736) (656) (642)


Grand Total (3,019) (3,561) (3,488)


Infrastructure Assets

Infrastructure & Asset

Services Summary

Summary of

2011-12

Actual

Summary of

2012-13

Forecast

Summary of

2013-14

Budget

Revenue 1,024 911 1,024


Grants 955 872 985



Expense (7,575) (8,336) (8,650)

Staff Costs (1,356) (1,858) (1,917)

Contractors (612) (481) (512)

Consultants 0 0 0

Materials (1,606) (1,383) (1,475)

Fuel (0) (1) (0)

Other Costs (17) (7) (7)

Depreciation (3,983) (4,607) (4,739)

Grand Total (6,551) (7,426) (7,626)



Governance

Elected Members &

Governance Summary (incl

election costs)

Summary of

2011-12

Actual

Summary of

2012-13

Forecast

Summary of

2013-14

Budget

Expense (384) (389) (402)

Staff Costs 0 0 0

Contractors (4) (10) (10)

Materials (26) (26) (27)

Other Costs (354) (353) (365)

Depreciation 0 0 0

Grand Total (384) (389) (402)


Corporate Support

Corporate Support Services

Summary

Summary of

2011-12

Actual

Summary of

2012-13

Forecast

Summary of

2013-14

Budget

Revenue 29,693 30,409 31,550

Rates 27,599 28,650 29,887



Grants 1,251 780 802




Expense (9,809) (7,105) (7,176)

Staff Costs (4,961) (3,519) (3,728)

Contractors (1,682) (1,809) (1,689)

Waste 0 0 0

Consultants (193) (189) (189)

Internal cross charges 1,449 1,898 2,035

Fuel (474) (497) (533)


NRM Levy (in rates) (784) (750) (788)

Other Costs (1,562) (1,056) (1,077)


Grand Total 19,884 23,304 24,375



Three Year Financial Forecast

Draft Budgets for 2014/15 and 2015/16

The Annual Business Plan and Budget is a statement of how Council sets out proposals for 2012/13 in

detail. Local Government best practice, however, continues to develop, and as part of its strategic forward

planning Council has this year prepared a detailed three year forecast for the first time.

The operating budget forecasts set out below are prepared from Council’s Long Term Financial Plan

adjusted for likely inflation levels in 2012/14 and 2014/15. Preserving Council’s aim of increasing rates by

1% above CPI in each year, it is forecast that 2013/14 will see a return to a small surplus, and 2014/15

should generate $263k surplus to assist with asset renewal.

Long Term Financial Plan – Prepared 2013

Forecasts based on CPI shown

CPI

2.8% 2.5% 3.0%

Year Ending 2013 2014 2015 2016

$'000 $'000 $'000 $'000

STATEMENT OF COMPREHENSIVE INCOME

INCOME

Rates 29,717 31,140 32,399 33,863

Statutory charges 907 852 961 990

User charges 1,091 1,073 1,144 1,178

Grants, subsidies and contributions 3,849 3,302 3,384 3,486

Investment income 75 78 80 82

Reimbursements 217 201 225 232

Other income 1,095 1,086 1,246 1,286

Net gain - joint ventures & associates 100 100 100 100

Total Income 37,051 37,830 39,539 41,217

EXPENSES

Employee costs 12,722 13,255 13,812 14,375

Materials, contracts & other expenses 16,402 16,430 17,114 17,509

Finance costs 582 689 736 758

Depreciation, amortisation & impairment 7,285 7,266 7,539 8,064

Net loss - joint ventures & associates

Total Expenses 36,991 37,641 39,202 40,706

OPERATING SURPLUS / (DEFICIT) 60 190 337 512

Asset disposal & fair value adjustments - 250 250 250

Amounts received specifically for new or upgraded assets 1,568 625 625 625

Physical resources received free of charge - - - -

Operating result from discontinued operations

NET SURPLUS / (DEFICIT)

transferred to Equity Statement 1,628 955 1,026 1,343

Appendix 2 Revised Budget Supplement with budget

proposed for adoption

2011/12

Actuals Notes

2012/13

Adjusted

Budget

2013/14 Draft

Budget

$'000 $'000 $'000

OPERATING INCOME

28,758 Rates 29,717 31,170


1,320 User Charges 1,100 1,073




997 Other Income 1,092 1,067

251 Joint Ventures 100 100

36,306 TOTAL INCOME 37,056 37,920

OPERATING EXPENSES

12,139 Employee Costs 12,720 13,342

16,199 Materials,Contracts & Other Services 16,289 16,345



35 Joint Ventures


337 NET BUDGETED SURPLUS/ (DEFICIT) 180 351

BEFORE CAPITAL AMOUNTS

Less: Net Outlays on Existing Assets

9,454

Capital Expenditure on Renewal and

Replacement of Existing Assets 1 10,374 9,260

Unwind Waste Remediation -

Provision for Waste Remediation -

(501) Proceeds from Sale of Replaced Assets -

(6,906) Depreciation (7,285) (7,266)

2,047 NET OUTLAYS ON EXISTING ASSETS 3,089 1,994

Less: Net Outlays on new and Upgraded Assets

378

Capital Expenditure on New and Upgraded

Assets & Remediation costs 1 1,566 520

(1,357)

Capital Grants and Monetary Contributions

for New and Upgraded Assets (1,658) (625)

- Proceeds from Sale of Surplus Assets (320) (400)

(979)

NET OUTLAYS ON NEW AND UPGRADED

ASSETS (412) (505)


(4,127) Asset Revaluations - -

(7) Joint Ventures - -

(4,134) - -


GST Adjustment

3,403 Net Lending/ (Borrowing) for Financial Year (2,497) (1,138)


BUDGETED FUNDING STATEMENT

2013/14 Draft Budget

2011/12

Actuals

2012/13

Adjusted

Budget

2013/14 Draft

Budget

$'000 $'000 $'000

OPERATING INCOME

28,758 Rates 29,717 31,170


1,320 User Charges 1,100 1,073




997 Other Income 1,192 1,067

251 Joint Ventures 100

36,306 TOTAL INCOME 37,056 37,920

OPERATING EXPENSES

12,139 Employee Costs 12,720 13,342

16,199 Materials, Contractual & Other Services 16,289 16,345



35 Joint Ventures


337 OPERATING SURPLUS/ (DEFICIT) 180 351

123 Asset Disposal and Fair value adj 320

1,357 Amounts received for new/upgraded assets 1,658 625

- Physical resources received free of charge

1,817 NET BUDGETED SURPLUS/ (DEFICIT) 2,158 976


(4,127) Asset Revaluation -

(7) Joint ventures

(4,134) -

(2,317) TOTAL COMPREHENSIVE INCOME 2,158 976


BUDGETED COMPREHENSIVE INCOME STATEMENT


2011/12

Actuals

2012/13

Adjusted

Budget

2013/14 Draft

Budget

$'000 $'000 $'000

CURRENT ASSETS

1,266 Cash and cash equivalents 1,407 1,341

2,573 Trade & other receivables 3,548 2,628

19 Inventories 23 19

3,858 TOTAL CURRENT ASSETS 4,978 3,988

NON-CURRENT ASSETS

244,736 Infrastructure, Property, Plant & Equipment 249,456 250,181

1,228 Financial Assets 1,051 1,327

245,964 TOTAL NON-CURRENT ASSETS 250,507 251,508

249,822 TOTAL ASSETS 255,485 255,496

CURRENT LIABILITIES

5,168 Borrowings 5,455 5,181

9,104 Trade & Other Payables 9,552 9,460

989 Short term Provisions 1,456 999

15,261 TOTAL CURRENT LIABILITIES 16,463 15,640


5,292 Long- term Borrowings 5,000 5,292

211 Long- term Provisions 645 211

5,503 TOTAL NON-CURRENT LIABILITIES 5,645 5,503

20,764 TOTAL LIABILITIES 22,108 21,143

229,058 NET ASSETS 233,377 234,353

EQUITY

128,225 Accumulated Surplus 131,665 132,641

96,358 Asset Revaluation Reserve 96,358 96,358

0 Reserves beginning of year - -

0 Transfers to Reserves - -

0 Transfers from Reserves - -

4,475 Reserves at end of year 5,354 5,354

229,058 TOTAL EQUITY 233,377 234,353


BUDGETED BALANCE SHEET


2011/12

Actuals

2012/13

Adjusted

Budget

2013/14

Draft Budget

$'000 CASH FLOWS FROM OPERATING ACTIVITIES $'000 $'000

RECEIPTS

28,454 Rates 29,717 31,170


1,561 User Charges 1,100 1,073


69 Interest Received 75 77

414 Reimbursements and Donations 216 204

2,846 Other 1,192 1,067

GST Adj

38,104 TOTAL RECEIPTS 37,056 37,820

PAYMENTS

(12,209) Employee Costs (12,720) (13,342)

(18,524) Materials, Contracts & Other Services (16,289) (16,345)

(665) Finance costs (582) (616)

(97) Investment Payments

(31,495) TOTAL PAYMENTS (29,591) (30,303)

6,609 NET CASH USED IN OPERATING ACTIVITIES 7,465 7,517


RECEIPTS

98 Proceeds from Borrowings - -

504 Proceeds from Aged Care facility deposits - -

PAYMENTS

(147) Repayment from Borrowings - -

455 NET CASH USED IN FINANCING ACTIVITIES - -


RECEIPTS

1357 Grants for new or upgraded assets 1,658 625

501 Sale of replaced/ new assets & other investment 390 400

Repayment of loans to Community Groups

PAYMENTS

(378) Expenditure on new/ upgraded assets (1,566) (520)

(9,454) Expenditure on renewal/ replacement of assets (10,195) (9,260)

(82) Contribution to Associated entities -

(8,056) NET CASH USED IN INVESTING ACTIVITIES (9,713) (8,755)

(992) NET INCREASE (DECREASE) IN CASH HELD (2,248) (1,238)

(2,743) CASH AT BEGINNING OF YEAR (3,735) (5,983)

(3,735) CASH AT END OF YEAR (5,983) (7,221)



BUDGETED CASHFLOW STATEMENT

Asset

Accumulated Revaluation Other Total

Surplus Reserve Reserves Equity

2014 $'000 $'000 $'000 $'000


Net Surplus / (Deficit) for year 976 976


Asset Revaluation -

Joint Ventures -


132,641 96,358 5,354 234,353

2013




Asset Revaluation -

Joint Ventures -


131,665 96,358 5,354 233,377

Key Performance Indicators 2011/12 Actuals

2012/13

Adjusted Budget

2013/14

Draft Budget

Operating Surplus 337 180 351


Operating Surplus 0.95% 0.50% 0.95%


Net Financial Liabilities $k 16,702 17,130 17,155


Net Financial Liabilities 47% 47% 46%



Net Asset Renewals 137% 142% 96%

Depreciation Expense or AMP total

Asset Consumption Ratio

Carrying value of depreciable assets 57% 59% 60%

Gross value of depreciable assets


STATEMENT OF CHANGES IN EQUITY



NEW CAPITAL ITEMS - BUDGET 2013/14

Project Number Description Amount

10002 Shannon Street/Pflaum Rd Stormwater Design $20,000

10049 Lenswood Primary School footpath to recreational park $20,000

10075 Sealing of Bridgewater Oval carpark and conversion to park and ride $40,000

20001 Bridge Guardrail Safety Upgrades Stage 1 (as per Bridges LTFP and Asset Management Plan) $90,000

20002 Construction of a Rising Main From Birdwood lagoons to Edwards dam $130,000

20003 Design and Construction of overflow protection for Woodside Pump Station $35,000

20011 WW1 Memorial Matched Grant Funding $20,000

20015 Stirling Office and Library - external fire services upgrade $125,000

20030 Lights of Lobethal Undergrounding audio $20,000

20033 Bridgewater Primary School Morella Gr/Shannon St Pedestrian Crossing $20,000

$520,000

BIS prog (All)

BIS sub prog (All) COMPARISON OF LATEST PROPOSED BUDGET WITH OTHERS

Row Labels

Sum of 2011/12

Total Actuals $000

Sum of 2012/13

Revised Budget

$000

Sum of 2013-14

Proposed Budget

$000

Variance

to 12/13

$'000

Variance

to 12/13

%age

Recent

Movement

$'000

Original 2013-14

Consult Budget

$000

Revenue 36,270 37,000 37,920 89 37,830

Rates 28,769 29,875 31,170 1,295 4.33% 30 31,140

Statutory Charges 821 902 852 50- -5.49% 0 852

User charges 1,332 1,095 1,073 22- -2.04% 0 1,073

Grants 3,757 3,584 3,377 208- -5.79% 75 3,302

Investment Income 66 75 78 2 2.80% 0 78

Reimbursements 365 216 204 12- -5.57% 0 204

Other Revenues 1,160 1,253 1,167 86- -6.90% (16) 1,183

Expense (35,932) (36,820) (37,569) 71 (37,640)

Staff Costs (12,326) (12,805) (13,342) 537- 4.19% (78) (13,264)

Contractors (5,654) (5,932) (5,930) 2 -0.04% (68) (5,862)

Waste Contractors (2,885) (3,641) (3,697) 56- 1.55% 175 (3,872)

Consultants (461) (455) (444) 10 -2.28% 0 (444)

Materials (2,253) (1,963) (1,991) 27- 1.40% (25) (1,966)

Fuel (476) (506) (542) 36- 7.15% 0 (542)

Finance charges (687) (582) (616) 34- 5.81% 73 (689)

NRM Levy (784) (750) (788) 38- 5.02% 0 (788)

Other Costs (3,500) (2,902) (2,953) 52- 1.79% (7) (2,947)

Depreciation (6,907) (7,285) (7,266) 19 -0.26% 0 (7,266)

Grand Total 337 180 351 161 190

14/06/2013 10:43 AM Post Consultation detailed Opex Total

Transition to 2013/14 Budget

NB: (brackets) denote "bad" news Gross Income

Operating

cost base

Operating

Surplus/

(Deficit)

$k $k $k

Consultation Budget for 2013/14 $37,830 $(37,640) $190

Things we missed in assembling consultation budget:

Increase carbon reduction spend from $60k to $150k $(90) $(90)

Eliminate 11/12 S&R one off projects b/fwd to 12/13 (BR1) $140 $140

Primary Prod rebate o'stated ar $52k cost - s/be $40k $12 $12

Add Community/Customer Services Director $(193) $(193)

Add Governance Manager (12 mths) $(117) $(117)

Release Property Manager role (unfilled) $117 $117

Release outside positions (unfilled - team leader + 1) $107 $107

Release one customer service position (unfilled) $54 $54

Release half regulatory services position (retirement) $32 $32

Other Factors to reflect

Additional Cost Pressures

Ashton Landfill landslip remediation $(150) $(150)

Additional Arts funding (Natural Arts Prize) $(3) $(3)

Additional Arts funding (AHISS request) $(5) $(5)

Additional Youth funding - Operation Flinders $(5) $(5)

Additional Trees for Life funding $(5) $(5)

Potential Cost Savings/Income

Reduce EWMA collection costs $100 $100

Reduce AHRWMA disposal costs $75 $75

Reduce Hard Waste collection costs $0 $0

Adjust 13/14 STDU budget to "finish only" 5 $10 $15

ACE Funding secured for TVCC/Summit 75 $(75) $0

Revise overdraft interest to reflect rate cuts (5% - 3%) $73 $73

Other $4 $4

Predicted 2013/14 Result if all materialise $37,910 $(37,559) $351

14/06/2013 10:44 AM 2012-14 Walk through 2012-13 Walkthrough


AGENDA BUSINESS ITEM Item: 6.4 Originating Officer: Paul Francis, Financial Controller Subject: Business Excellence Update File No: 09.65.1 SMP Goal: 5: Open, Effective & Efficient Governance SMP Key Issue: 5.6: Management & Administration

1. SUMMARY

Adelaide Hills Council continues to pursue its Business Excellence initiative The program is intended to optimise the efficiency and effectiveness of Council’s operations. There will also be significant impacts on the internal controls and risk management systems at Council as all business processes are mapped and then optimised. This report is to inform the members of the Audit Committee about progress so far and invite further comments and advice.

2. BACKGROUND Council has chosen to follow the European Framework for Quality Management (EFQM) approach. With the switch of core business systems, from Civica Authority to Open Office My Community package, the opportunity was taken to align the storage of financial data by process. Broadly a process is what Council does, as opposed to a departmental view which is based on organisational structure. The 2012 Business Excellence Self-Assessment highlighted the following issues which confirm that there is a gap between how Council operates now and how Council would like to operate: • We don’t communicate very well across the organisation • Some people don’t feel empowered at work • We don’t have a clear picture of what all our processes are • The Strategic Plan has some gaps • We can’t easily articulate the results we achieve Following on from this assessment, six projects are concurrently running that are based on the “Enabler” criteria in the European Framework for Quality Management (EFQM) model: • Leadership and People • Corporate Plan

Adelaide Hills Council Audit Committee Meeting 17 June 2013 Business Excellence Update

Page 2

• Strategic Plan • Partnerships • Process

- Process Improvement Project - Business Operating Structure

These six projects involve change for everyone in Council and aim to improve results by: • Strengthening our Strategic and Corporate Plans • Developing our leaders • Building a framework for excellent partnerships • Structuring our processes and improving how they are mapped and

documented • Focussing on “quick wins” with Process Improvement • Working with a new core business system – Open Office My Community • Ongoing self-assessments to measure improvement

3. DISCUSSION A benefits realisation analysis has been undertaken, which provides management with some target savings to work toward. We have used the original 2013/14 Consultation (Operating) Budget totalling $190k surplus and mapped it into processes and sub processes which have been uploaded into My Community’s General Ledger. The My Community product enables many views of the same $190k budgeted surplus. It is easily possible to subtotal the amounts proposed in the budget for the Procurement process. Council management has proposed that focussing on the Procurement process offers the quick wins mentioned above in terms of process re-engineering. Examining procurement is perceived as a relatively quick and painless way of generating efficiencies. Appendix 1 discloses the 2013/14 Operating budget by Procurement category. Management has set a target process saving of 2.5% on Consultants ($461k: save $12k), Contractors ($13,300k: save $333k) and Materials ($2,493k: save $74k). There is also a targeted increase in staffing productivity of 2.5% which translates to a $317k increase in service capacity without needing to increase rates by 1% to pay for it. In short, it’s what we want to achieve. A $419k reduction in costs, and an an extra $317k worth of staff hours without needing to increase rate income. 2.5% is the target savings amount. Management currently believes the worst case scenario would be 1.0% ($166k saved) and best case is 5.0% ($838k saved). Importantly, it gives a target to aim for. Appendix 2 is a list of which processes should be investigated first. All the amounts are from the same 2013/14 consultation budget. The Business Operating Structure Transformational Team has proposed a schedule, in priority, of processes to be mapped and improved so that Council can access the savings in procurement.

Adelaide Hills Council Audit Committee Meeting 17 June 2013 Business Excellence Update

Page 3

This approach has been reviewed and endorsed by Council’s Business Excellence Steering Committee (BXSC).

4. RECOMMENDATION

That the Audit Committee notes the progress of the Business Excellence program.

5. APPENDICES

(1) 2013/14 Consultation Budget by Procurement Category (2) Business Excellence Process Priority Table

Appendix 1 2013/14 Consultation Budget by

Procurement Category

Procurement Category

13/14

Budget

Process

Saving Cash Saving

Increase in

Productivity

Consultants 461,126 2.5% 11,528

Contractors 13,300,136 2.5% 332,503

Depreciation 7,266,410

Finance (interest) 661,725

Fleet heavy 1,360,312

Fleet light 642,923

Plant Recovery -1,744,407

Income -39,023,839

Insurance B&C 227,362

Insurance MV 63,369

Insurance Other & Excess 46,128

Insurance P/L 358,330

Materials 2,942,987 2.5% 73,575

Salaries & Wages 12,687,530 2.5% 317,188

Salaries & Wages - On costs 1,457,996

Salaries & Wages - Other Employee costs 82,608

Salaries & Wages - Recovery -980,420

Opex -189,724 417,606 317,188

Appendix 2 Business Excellence Process Priority Table

Process (KFC) (All)

Subject (All)

Driver (All)

Procurement Detail (All)

Process (BOS) (All)

Sum of 26/04/2013 Consult Column Labels

Row Labels Consultants Contractors Materials

Grand

Total

Considered - Double tick

ENVIRONMENTAL MANAGEMENT 25,000 388,023 394,381 807,404

INFRASTRUCTURE - BUILDINGS 1,211 538,297 129,137 668,645

INFRASTRUCTURE - ROADS : SEALED 101,439 178,243 279,682

INFRASTRUCTURE - SPORT & REC 15,000 217,498 13,860 246,358

INFRASTRUCTURE - STORMWATER 211,269 90,966 302,235

INFRASTRUCTURE - TRAFFIC CONTROL 127,766 231,468 359,234

PARKS AND RESERVES 3,000 282,000 45,382 330,382

PLANNING AND DEVELOPMENT 108,570 273,579 8,570 390,719

PLANT, EQUIPMENT AND STORES 424,794 543,886 968,680

Rates (includes rebates, VG, NRM & SBA) 1,519,571 552 1,520,123

Considered - Double tick Total 152,781 4,084,237 1,636,444 5,873,461

Considered - Tick

FINANCIAL MANAGEMENT 28,421 275,446 2,205 306,071

GOVERNANCE 451,876 21,851 473,727

INFRASTRUCTURE - FOOTPATHS 20,979 19,584 40,563

INFRASTRUCTURE - MANAGEMENT 49,000 174,150 4,850 228,000

INFRASTRUCTURE - ROADS : UNSEALED 45,960 103,105 149,065

PUBLIC HEALTH 42,452 6,652 49,104

Considered - Tick Total 77,421 1,010,863 158,246 1,246,530

Considered - Perhaps

COMMUNITY - GRANTS & PARTNERSHIPS 258,660 258,660

Considered - Perhaps Total 258,660 258,660

Considered - No

COMMERCIAL ACTIVITIES - PRIVATE 0 8,500 8,500

INFRASTRUCTURE - BRIDGES 0 5,029 5,029

INFRASTRUCTURE - BUS SHELTER 1,299 1,177 2,476

INFRASTRUCTURE - PLAYGROUNDS 5,892 9,009 14,901

INFRASTRUCTURE - TOWNSHIP GARDENS 22,543 37,276 59,819

Considered - No Total 29,734 60,991 90,725

Grand Total 230,202 5,383,493 1,855,681 7,469,376


AGENDA BUSINESS ITEM

Item: 6.5 Originating Officer: Tim Piper, Director Finance Subject: 2013 Audit Plan SMP Goal: 5: Open, Effective & Efficient Governance SMP Key Issue: 5.3: Risk Management

1. SUMMARY

After completing the 2011/12 Financial Year, Council advertised an open tender for the supply of external Audit Services following the conclusion of the previous auditor’s five year term. Following a selection criteria endorsed by Audit Committee, BDO Australia were selected to perform external audit and assurance services to Council for a period of five years commencing 2012/13. This report presents the information received from BDO setting out how they will undertake their work.

2. DISCUSSION Council’s new external Auditors, BDO Australia, wrote to Council on 4 April 2013 outlining their terms of engagement (Appendix 1). The letter explains their audit scope, responsibilities and fee structure. Council has since received an Audit Plan from BDO (Appendix 2) which supplements the Engagement Letter. The Audit Plan communicates the approach being taken by the Auditors and their understanding of the scope of work required to express a legitimate opinion on Council’s financial reports and the environment they are composed in.

3. RECOMMENDATION That the Audit Committee notes the Letter of Engagement and Audit Plan received from BDO.

4. APPENDICES (1) BDO Letter of Engagement (2) BDO Audit Plan

Appendix 1 BDO Letter of Engagement

Appendix 2 BDO Audit Plan


AGENDA BUSINESS ITEM Item: 6.6 Originating Officer: Paul Francis Subject: Revised Capitalised Assets Policy File No: 09.24.2.71 SMP/Council Policy: Goal 5: Effective & Efficient Governance

1. SUMMARY

This report presents a Capitalised Assets Policy for consideration. This policy provides guidelines on the following: • Asset Classes • Revaluations • Impairment • Useful lives • Capitalisation • Residual Values It is intended that this policy be referred to when preparing the Council’s Financial Statements.

2. BACKGROUND

The Capitalised Assets policy was initially adopted at a Special Council Meeting on 22/9/2009. It was first updated and those changes were adopted on 14/6/2011. The changes were administrative in nature, and some small corrections made on graphs and tables. A second revision was adopted on 28/2/2012 which included updates to depreciation on light fleet (Plant & Equipment, not Infrastructure). Management is now seeking to amend the accounting treatment of Library lending media: specifically, to write all lending media down to zero value..

3. POLICY

Development of the Capitalised Assets policy was undertaken using information gathered from other councils, the AASB accounting standards and LGA reporting regulations. When comparing all of the information, a gap was identified between the requirements and Council’s current policy. The policy has been developed in conjunction with the Asset program that has seen Conquest populated with Council’s infrastructure assets database.

Adelaide Hills Council Audit Committee Meeting 17 June 2013 Revised Capitalised Assets Policy

Page 2

4. DISCUSSION The Australian Accounting Standards Board (AASB) prescribes how to account for fixed assets in AASB 116 Property Plant & Equipment. Each year, Council’s external Auditors give an opinion about the Annual Financial Statements and whether they have been composed in accordance with the Accounting Standards. In 2011/12 the Auditor’s opinion read:

“In our opinion, the financial report presents fairly, in all material respects, the financial position of the Adelaide Hills Council as of 30 June 2012, and its financial performance and cash flows for the year then ended in accordance with the Local Government Act 1999, Local Government (Financial Management) Regulations 2011 and the Australian Accounting Standards (including Australian Accounting Interpretations).

This opinion was signed by the then Auditors, Dean Newbery and Partners, on 22 November 2012. Management has the opportunity to revise the Capitalisation of all Library lending media The most recent Audited Financial Statements (2011/12) contain Library lending media (disclosed as Library Books) with a Current Replacement Cost (CRC ) of $1,383k, an Accumulated Depreciation of $(1,078)k, giving a Written Down Value (WDV) of $350k. The Library Books class is held on the revaluation model, and to date there has been an upward increment in the value of these media totalling $907k. This is called the Revaluation Reserve. AASB 116 40 and Aus40.1 permit the write off as a net revaluation decrease, essentially closing the WDV $305 into the Library Books ARR of $907k with no impact on Council’s Operating statement (P&L)

40 If an asset’s carrying amount is decreased as a result of a revaluation, the decrease shall be recognised in profit or loss. However, the decrease shall be recognised in other comprehensive income to the extent of any credit balance existing in the revaluation surplus in respect of that asset. The decrease recognised in other comprehensive income reduces the amount accumulated in equity under the heading of revaluation surplus. Aus40.1 Notwithstanding paragraph 40, in respect of not-for-profit entities, if the carrying amount of a class of assets decreased as a result of a revaluation, the net revaluation decrease shall be recognised in profit or loss. However, the net revaluation decrease shall be recognised in other comprehensive income to the extent of any credit balance existing in any revaluation surplus in respect of that same class of asset. The net revaluation decrease recognised in other comprehensive income reduces the amount accumulated in equity under the heading of revaluation surplus.

Adelaide Hills Council Audit Committee Meeting 17 June 2013 Revised Capitalised Assets Policy

Page 3

It is important to note that if Library lending media are written off then all associated book grants and expenditure will be accounted for as operating. Library Capital grants (2011: $144.7k 2010: $149.9k) will become operating in nature, as will the expenditure on lending media that these grants were for. It also means that depreciation (2011: $128k, 2010 $139k) will cease for the Library Books class. Additionally, there will be savings on employees’ time in Library, IT, and Finance. In the past two years it is estimated that Council’s staff have spent more than 5 working days (each year) to build the models that support the disclosures in the Financial Statements. Finally, the timing of the change is also consistent with a change in the nature of Council’s library service operations following the introduction of the new One Card Library system, a greater proportion of Council’s media will be loaned through other libraries, and will spend far less time under Council’s control or in the hands of Adelaide Hills residents. Hence the new accounting method is more appropriate to what actually happens to the assets concerned.

5. RECOMMENDATION

That:

1. The Audit Committee recommends the revised Capitalised Assets Policy to Council

2. The Revised Capitalised Assets Policy be used for the accounting treatment of capitalised assets for future General Purpose Financial Statements

6. APPENDICES (1) Revised Capitalised Asset Policy

COUNCIL POLICY

CAPITALISED ASSETS (ACCOUNTING POLICY)

Policy Number: GOV-02

Responsible Department(s): Finance

Relevant Delegations: None

Other Relevant Policies: None

Relevant Procedure(s): None

Relevant Legislation: Local Government Act 1999

Policies and Procedures Superseded by this policy on its Adoption:

Asset Accounting 22 September 2009, Item 3.1, 321 28 June 2011, Item 10.13, 195

Adoption Authority: Council

Date of Adoption: 28 February 2012

Minute Reference for Adoption: Item 10.5, 55

Next Review February 2014 or as and when required

Capitalised Assets (Accounting Policy) Page 2

TABLE OF CONTENTS 1 ACCOUNTING POLICY ..............................................................................................4

1.1 ASSET CLASSES DEFINED ..............................................................................4 1.2 ASSET DESCRIPTION ......................................................................................8

1.2.1 Roads .........................................................................................................9 1.2.2 Bridges (Vehicular & Pedestrian) ................................................................9 1.2.3 Footpaths ....................................................................................................9 1.2.4 Retaining Walls ...........................................................................................9 1.2.5 Guardrails .................................................................................................10 1.2.6 Kerbs & Gutters (K&G)..............................................................................10 1.2.7 Traffic Controls .........................................................................................10 1.2.8 Street Furniture .........................................................................................10 1.2.9 Land..........................................................................................................11 1.2.10 Buildings ...................................................................................................11 1.2.11 Parks & Reserves .....................................................................................12 1.2.12 Sports & Recreation ..................................................................................12 1.2.13 Playgrounds ..............................................................................................12 1.2.14 Cemeteries ...............................................................................................12 1.2.15 TV Transmitter ..........................................................................................12 1.2.16 Stormwater Drainage ................................................................................13 1.2.17 Water Supply ............................................................................................13 1.2.18 CWMS (Community Waste Water Management System) .........................13 1.2.19 Library Resources .....................................................................................13 1.2.20 Plant & Equipment ....................................................................................13 1.2.21 Furniture & Fittings ....................................................................................13 1.2.22 Software & Licenses .................................................................................14

1.3 CAPITALISATION THRESHOLDS ...................................................................14 1.3.1 Materiality .................................................................................................14

1.4 CAPITAL v. MAINTENANCE ............................................................................17 1.4.1 Maintenance .............................................................................................17 1.4.2 Capitalisation ............................................................................................20

1.5 DEPRECIATION BUSINESS RULES ...............................................................24 1.5.1 Depreciation ..............................................................................................24 1.5.2 Residual Value ..........................................................................................24 1.5.3 Condition Rating .......................................................................................30 1.5.4 Roads .......................................................................................................30 1.5.5 Bridges .....................................................................................................31 1.5.6 Footpaths ..................................................................................................31 1.5.7 Retaining Walls .........................................................................................32 1.5.8 Guardrails .................................................................................................32 1.5.9 Kerb & Gutters (K&G) ...............................................................................32 1.5.10 Traffic Controls .........................................................................................32 1.5.11 Street Furniture .........................................................................................32 1.5.12 Land..........................................................................................................32 1.5.13 Buildings ...................................................................................................32 1.5.14 Parks & Reserves .....................................................................................33 1.5.15 Sports & Recreation. .................................................................................33 1.5.16 Playgrounds. .............................................................................................33 1.5.17 Cemeteries. ..............................................................................................33 1.5.18 TV Transmitter ..........................................................................................33 1.5.19 Stormwater Drainage ................................................................................33 1.5.20 Water Supply ............................................................................................33 1.5.21 CWMS ......................................................................................................34 1.5.22 Library Resources .....................................................................................34 1.5.23 Plant & Equipment ....................................................................................34


1.5.24 Furniture & Fittings ....................................................................................34 1.5.25 Software & Licenses .................................................................................34

1.6 USEFUL LIFE OF ASSETS ..............................................................................34 1.6.1 Roads .......................................................................................................35 1.6.2 Bridges .....................................................................................................35 1.6.3 Footpaths ..................................................................................................36 1.6.4 Retaining Walls .........................................................................................36 1.6.5 Guardrails .................................................................................................36 1.6.6 Kerb & Gutters (K&G). ..............................................................................36 1.6.7 Traffic Controls .........................................................................................36 1.6.8 Street Furniture .........................................................................................37 1.6.9 Land..........................................................................................................37 1.6.10 Building .....................................................................................................37 1.6.11 Parks & Reserves .....................................................................................37 1.6.12 Sports & Recreation. .................................................................................37 1.6.13 Playgrounds ..............................................................................................37 1.6.14 Cemeteries ...............................................................................................38 1.6.15 TV Transmitter ..........................................................................................38 1.6.16 Stormwater Drainage ................................................................................38 1.6.17 Water Supply ............................................................................................38 1.6.18 CWMS ......................................................................................................39 1.6.19 Library Resources .....................................................................................39 1.6.20 Plant & Equipment ....................................................................................39 1.6.21 Furniture & Fittings ....................................................................................39 1.6.22 Software Licenses .....................................................................................39

1.7 IMPAIRMENT ...................................................................................................39 1.8 DISPOSALS .....................................................................................................41 1.9 ASSET REVALUATIONS .................................................................................42

1.9.1 Methodology .............................................................................................42 1.9.2 Accounting for Revaluations .....................................................................44

1.10 INITIAL RECOGNITION OF PREVIOUSLY CONSTRUCTED ASSETS ...........45 1.10.1 Accounting for Unrecorded Assets ............................................................45

2 SYSTEMS AND CONTROLS ...................................................................................47 APPENDICES ANNEXURES


CAPITALISED ASSETS (ACCOUNTING POLICY)

1. ACCOUNTING POLICY Upon review of neighbouring councils and the methods and systems that have been adopted in the Local Government sector (refer to Table 1 – Annexure), this document provides a comprehensive understanding and guide towards developing best practice principles in the recording and valuing of fixed assets, while maintaining compliance with AASB 116 – Property, Plant & Equipment (relating to tangible assets) and AASB 138 – Intangible Assets, and other relevant accounting standards. 1.1 ASSET CLASSES DEFINED

An asset class is determined by the nature in use of the asset components. Assets within a class display a similar consumption pattern and / or provide services of a similar nature. Asset classes adopt capitalisation thresholds that help manage like assets where the value of each asset is small in comparison to the value of the total asset class. Individual assets, whose value is or becomes significant in comparison to the total asset class, should be disclosed and depreciated separately. Reviews of capitalisation thresholds maybe done on an annual basis, with attention given to thresholds that are too low or too high:

1.1.1 HIGH threshold; if the threshold is too high, enhancements to assets within a class maybe expensed, only to be capitalised at a later date on revaluation of the asset class. This will give rise to an over-stated Asset Revaluation Reserve (ARR) and an under-stated operating result.

1.1.2 LOW threshold; if the threshold is too low, more items will be captured as part of the asset class and maybe further expensed on revaluation at a later date. This may give rise to an under-stated Asset Revaluation Reserve (ARR) and an over-stated operating result.

Components of an item that are individually is significant in cost in relation to the total cost of the item as a whole must be depreciated separately to that item1. These components may be similar in characteristics to other significant components, such as their useful life over which they provide economic value, and thus similar methods of depreciation. Such assets maybe grouped and depreciated together2. The remaining components of an item that are insignificant in cost in relation to the total cost of the item as a whole, and where the components have varying expectations in consumption patterns, approximations to assess the useful life and depreciation methods maybe necessary to accurately represent their useful life3.

1 AASB 116.43

2 AASB 116.45

3 AASB 116.46


1.1.3 ASSET CLASS STRUCTURE

No. ASSET GROUP No. ASSET CLASS No. ASSET TYPE

1 Transport

1 Roads

1 Sealed 2 Unsealed 3 Pavement 4 Formation 5 Fire Track 6 Line Marking 7 Signage

2 Bridges

1 Bridge 2 Culvert 3 Footbridge 4 Traffic Signs

3 Footpaths 1 Footpath 2 Cycle Track

4 Retaining Walls 1 Retaining Wall 2 Embankment 3 Cutting

5 Guardrails 1 Guardrails 6 Kerb & Gutter 1 Kerb & Gutter

7 Traffic Controls

1 Traffic Signals 2 Pedestrian Structure 3 Parking Structure 4 Speed Humps 5 Roundabouts 6 Guideposts

8 Street Furniture

1 Seats & Benches 2 Rubbish Bins 3 Dog Bag Dispenser 4 Bus Stops 5 Fencing & Railings 6 Lighting 7 Ornaments 8 Drainage 9 Signage

2 Community

Facilities

9 Land

1 Conservation Resrv 2 Passive Recreation 3 Community Use 4 Recreation & Sport 5 Civic Purpose 6 CFS 7 Commercial

10 Buildings

1 Office & Libraries 2 Depots 3 Halls & Community 4 Retirement Villages 5 Public Toilets 6 Commercial 7 Air-conditioning 8 Security Systems 9 Car Park

11 Parks & Reserves

1 Picnic facilities 2 Furniture 3 Rubbish Bins 4 Ornaments 5 Drainage 6 Car Park


No. ASSET GROUP No. ASSET CLASS No. ASSET TYPE

Community

Facilities

12 Sports & Recreation

1 Sports Ovals 2 Swimming Centre 3 Courts 4 BMX Tracks 5 Skate Parks 6 Bowling Greens 7 Golf Course 8 Cricket Nets 9 Grass/Quality Soil

10 Drainage 11 Car Park

13 Playgrounds

1 Equipment 2 Shelter 3 Furniture 4 Rubbish Bins 5 Drainage 6 Car Park

14 Cemeteries

1 Structures 2 Furniture 3 Plinths 4 Roads / Paths 5 Drainage 6 Car Park

15 TV Transmitter

1 Footings / Tower 2 Aerials / Dishes 3 Signal Station 4 Fences

3 Infrastructure

16 Stormwater 1 Pipes / Pits 2 Trash Racks 3 Detention Basins

17 Water Supply 1 Bores 2 Reticulation Pipes

18 CWMS

1 Reticulation 2 Nodes 3 Pumping Stations 4 Treatment System 5 Reuse System

4 Plant & Equipment

19 Library Resources

1 Audio Visual 2 Books 3 Talking Books/CD’s 4 Videos / DVD’s

20 Plant &

Equipment

1 IT Hardware 2 Light Vehicles 3 Heavy Vehicles 4 Office Equipment

21 Furniture &

Fittings

1 Workstations 2 Storage 3 Furniture 4 Floor Coverings 5 Kitchen 6 Lighting

5 Intangible 22 Software & Licences

1 Software Licences 2 Patents / TM 3 Intellectual Property 4 Database


A Class of Assets, being a group of like assets that are similar in nature and characteristics, are revalued simultaneously to avoid ambiguity in the reporting of values in the financial statements4. To identify a meaningful asset class structure, although beneficial from a reporting point of view, maybe cumbersome and draining on field and administrative staff from a works and budgeting perspective. This is because in the case of establishing too few asset classes, these classes may be home for a large number of accumulated assets to be identified under that class, and may result in a heavier than usual burden to revalue all assets within the class in the period of time available. On the other hand, too many asset classes may disjoint assets within a network, thus making the process of revaluation repetitive (e.g., a building complex may have many asset classes, each having a few asset components. Revaluing all asset classes at the same time may not be possible, therefore a selection may mean revaluing the complex many times to account for all the asset classes). This in mind, asset classes may benefit from a further level to the hierarchy – an asset group identity that takes into account the practicalities of asset description, location, and function. This hierarchical structure is represented in the following diagram: Diagram 1:

4 AASB 116.37, 38

Asset Class #1

Asset Class #2

Asset Class #3

Asset Class

Asset Group (Complex)


1.2 ASSET DESCRIPTION

An item that meets the DEFINITION of an Asset shall be measured at cost in accordance with AASB 1165:

The cost of an asset will include: • Purchase price less deductions (rebates, discounts etc.) • Costs directly attributable to bringing the asset to a location where it can be

used as intended. This would include: � Employee compensation

- This includes costs of employee benefits arising directly from the construction or acquisition of the asset: eg outside wages, inside project management costs, and “on costs” such at superannuation, workers compensation and personal income protection as incurred by Council.

� Site preparation and/or restoration � Assembly costs � Professional fees

• Purchase Costs excluded from in the cost of an asset include: � Marketing and advertising costs incurred when opening a new facility. � Costs incurred after the date an asset is deemed in use (upgrades,

maintenance, etc.). � Avoidable costs.

These accumulated costs represent the value of the asset at cost as at the date in which the asset is deemed to be complete and available for use. Not-for-profit entities may acquire assets at zero or at a nominal value, the asset is deemed to be valued at its fair value at date of acquisition6. This initial valuation does not constitute a revaluation, a revaluation will only occur when it is the expressed decision of management to revalue a class of assets due to a change in the future economic benefits of that class (refer to “Asset Revaluations”). A resource may gain RECOGNITION as an Asset when it is expected that the future economic benefits will flow from their utilisation by the entity that exhibits control over them, and that expectation results from a past event. An asset is recognised only when the following conditions are met7: • It is probable the future economic benefits associated with the item will flow to

the entity; • These benefits can be reliably measured.

The council takes the view that an item or resource that meets the above recognition criteria, as defined by both AASB 116 (Property, Plant & Equipment) and AASB 138 (Intangible Assets), are available to be consumed by the council over the asset’s useful life. At any time when an asset no-longer meets the requirements set out above, the resource is deemed to no-longer be of a capital nature and is expensed in the reporting period in which the change occurred (refer to “Impairment”).

5 Refer to AASB 116.15

6 Refer to Aus 15.1

7 Refer to AASB 116.7


The definition and recognition of each asset class is outlined as follows:

1.2.1 Roads – a road is defined as an area of land (often public) used for the primary purpose of accommodating motor vehicle traffic for transportation from one point to another. Often defined by a name, but is broad enough to include fire tracks.

Roads are recognised as; a pavement (which includes the road base, sub-base, and sub-grade) and a surface type (either sealed or unsealed), measured with reference to a road running distance (RRD) or length, a width, line markings (stop bars, road boundary markings, road centre lines, kerb edging, road and rail-crossing lettering), traffic signage, cost of equipment, professional fees, labour costs and the date in which the assets are available for use.

1.2.2 Bridges (Vehicular & Pedestrian) – a bridge is defined as a structure designed to link a distance over an obstacle, such as rivers, drains, roads or railway lines.

A bridge is recognised as having; a deck, beams, piers, abutments, barriers, floor, wing, apron, bearings, a seal, traffic signage, cost of equipment, professional fees, labour costs, and the date in which the assets are available for use (design types include: concrete bridge, box culvert, pipe culvert, or composite bridge design).

Bridges and Major Culverts are directly linked to roads and footpaths, however the Council recognises over 70 bridge and culvert designs within the district, and as such Bridges (including major culverts) are recognised as a separate asset class.

1.2.3 Footpaths – a footpath is defined as a trodden track for people to walk along, often found but not restricted too, the side of a road. The definition also includes tracks for the specific purpose of riding bicycles, and may be constructed to accommodate both pedestrian and bicycle traffic.

A footpath is recognised as; a segment length, a width, a design type (rubble, hot mix, spray sealed, concrete, concrete block paved, and clay brick paved), cost of equipment, professional fees, labour costs, and the date in which the assets are available for use.

1.2.4 Retaining Walls – a retaining wall is defined as a wall that is built to resist sideways pressure caused by the unstable properties of a mass of earth. The definition also includes earth embankments and cuttings.

A retaining wall is recognised as; a wall length, a height, a design type (timber, concrete filled block, geo fibre mass concrete block, soil re-enforced concrete block, precast concrete crib, a gabion basket wall, and a reinforced earth wall), an agricultural drainage line, concrete footings (if required), cost of equipment, labour costs, and the date in which the asset is available for use.

Retaining walls are used in the construction of roads, bulk earthworks, footpaths, garden beds, and various park lands.


1.2.5 Guardrails – a guardrail is defined as a structure placed alongside an

area of infrastructure (often associated but not restricted to roads) due to safety reasons to protect users from dangerous areas, such as cliff edges and embankments.

Guardrails are recognised as; a length, a design type (post and rail with either a fish tail or drum end type), cost of equipment, professional fees, labour costs, and the date in which the asset is available for use.

In most cases guardrails are recognised as components of roads and bridges, the council however chooses to recognise guardrails as a separate asset class due to its use in other areas (e.g., walking tracks, car parks, and sporting grounds).

1.2.6 Kerbs & Gutters (K&G) – a kerb is defined as an edging found between a footpath and a road, often incorporating a gutter by which rainwater is channelled into stormwater drains.

A kerb is recognised as; a design (median, rollover, island, barrier, and layback) embodying materials for each type, cost of equipment, professional fees, labour costs, and the date in which the assets are available for use.

Kerb & Gutters in most cases is linked to a road segment, but the council chooses to recognise Kerb & Gutters separately due to the nature of the Adelaide Hills geological environment and the need for Kerb & Guttering assets in areas other than a component of a road.

1.2.7 Traffic Controls – is defined as the traffic control devices used to control the flow of vehicular and pedestrian traffic, and are found on road assets.

Traffic controls are recognised as; traffic chicanes, speed humps, pedestrian crossings, traffic signals, pedestrian refuges, roundabouts, parking protuberance, roadside steel reflective guideposts, professional contractors, labour costs, and the date in which the assets are available for use.

1.2.8 Street Furniture – is defined as park bench seats secured to a concrete footing, information signage (graph, picture or words), bins, dog bag dispensers, bike racks and fencing and railings (not attached to any other asset class infrastructure).

Park bench seats are made from a combination of materials including cast iron, timber and steel. Signs are recognised as; warning signs, directional signs, regulatory signs, guide (eg street) signs, tourist signs, service signs, and advisory signs. All components of Street Furniture consist of; cost of equipment, labour costs, and the date in which the assets are available for use.


1.2.9 Land – land is defined as being the territory over which control can be

legally exercised, and differs from other assets in that it can neither be created nor destroyed, relating specifically to the land area to which a dwelling resides.

Land is recognised as; areas used in conjunction with a dwelling, areas that may include a dwelling but primarily are used for recreational purposes, areas that may include a dwelling but primarily are used for sporting activities, areas that may include a dwelling but primarily are used as a playground, areas that may include a dwelling but primarily used as a nature reserve, areas that may include a dwelling but primarily are used as a park, and areas used as a cemetery.

Parcels of crown land where the council exhibits limited control (maintains the land) but cannot sell the land nor use the land willingly without government resolution (specific community purpose) is deemed to have no value as it cannot be reliably measured.

Land Under Roads - The Local Government Authority of South Australia (LGA) has offered their recommendation that land under roads should not be recognised as an asset. This decision relates to the period after 1 July 2008, the decision being based on the Council’s inability to reliably measure the value of such land accurately. As the term “Reliably Measured” is a major component of asset recognition principals, recognising Land under Roads fails to meet the asset recognition test. Adelaide Hills Council (AHC) has elected to adopt this recommendation and has will not recognise “Land under Roads” acquired before or after 1 July 20088.

1.2.10 Buildings – buildings are defined as a permanent structure comprising walls and a roof.

Buildings are recognised as; dwellings for which the Council assumes responsibility over, to maintain for the use and / or benefit of the community. Buildings are closely linked to land assets, however the council chooses to separate Land and Buildings for the purpose of better assessment of asset class revaluations (refer to “Asset Revaluations”). Buildings are comprised of; a structure (timber frame and walls, brick walls, cement coverings, glass walls and windows), a foundation (support piers, structural columns, concrete slab), a roof structure (tiles, timber support structure, colour bond steel), cost of equipment, professional fees, labour costs, and the date in which the asset is available for use.

8 AASB 1051 – 1 July 2008


1.2.11 Parks & Reserves – Parks and reserves are defined as the use of land

to which control can be legally exercised, for the specific purpose of accommodating passive recreational facilities as well as the housing of monuments intended to symbolise community spirit and memorials. These parcels of land differ from “Land” as a separate asset class as they are not for the specific purpose of occupying a dwelling.

Parks & reserves are recognised as; parks catering for BBQ and picnic areas, main street nature areas, and parks declared as nature reserves for the protection of wildlife habitats and native vegetation. Parks & Reserves may comprise; shelters, paths, BBQ facilities, furniture, cenotaphs, plaques, statues, water fountains, historical engravings, irrigation systems, and any professional fees and labour costs associated with bringing the asset to the time of being available for use.

1.2.12 Sports & Recreation – Sport & recreation assets are defined as parks specifically designed to cater for sporting activities, and may include sporting infrastructure differentiating them from Parks & Reserves.

Sports & Recreation assets are recognised as; sporting ovals, swimming centres, tennis courts, sporting facilities (e.g., netball courts, skate parks, BMX tracks, bowling greens), golf course, cricket nets, trails (used for walking, running, and cycling), professional fees, labour costs and the date in which the asset is available for use.

1.2.13 Playgrounds – playgrounds are defined as areas of land zoned for the

specific purpose of accommodating recreational facilities for children. These parcels of land differ from “Sports & Recreation” as a separate asset class as they are not for the specific purpose of providing sporting activities.

Playgrounds are recognised as; outdoor areas designed for children’s’ play time activities, and include the cost of various types of playground infrastructure, costs of equipment, professional fees, labour costs, and the date of being available for use.

1.2.14 Cemeteries – cemeteries are defined as the use of land set aside for the

specific purpose of burials and internments.

Cemeteries are recognised as; plinths, structures, irrigation, tools, furniture, landscaping, service roads and paths, cost of equipment, professional fees, labour costs, and the date the assets are available for use.

1.2.15 TV Transmitter – TV transmitters are defined as communication transmitting structures located in high isolated topographical areas licensed and controlled by the Adelaide Hills Council.

TV Transmitters are recognised as; steel structures supporting transmitting and receiving dishes, aerials and antennas, a signal station, fences, equipment, professional fees, labour costs, and the date in which the asset is available for use.


1.2.16 Stormwater Drainage – a stormwater drainage network is defined as a

system by which rainwater runoff is channelled into pits, pipes and storage ponds, aimed at controlling flooding and water contamination.

A stormwater drainage network is recognised as; a length of pipe or series of pipes, pits or nodes (joins), ponds, cost of equipment, labour costs, and the date the assets are available for use.

1.2.17 Water Supply – water supply is defined as the supply of treated water from active bores for re-use by the community.

Water Supply is recognised as; a length of pipe or series of pipes, nodes, a pump station, a filtration process, holding dams, cost of equipment, professional fees, labour costs, and the date the assets are available for use.

1.2.18 CWMS (Community Waste Water Management System) – a CWMS is defined as an intricate pipe, pump and storage network by which community effluent can be redirected to treatment lagoons or waste water treatment plants for water treatment.

A CWMS infrastructure asset is recognised as; a length of pipe or series of pipes, nodes, a pump station, pits and lagoon ponds, design materials, cost of equipment, professional fees, labour costs, and the date the assets are available for use.

1.2.19 Library Resources – library resources are defined as items made available to the community on a loan basis, returnable within a set period.

Library resources are recognised as; audio visuals, CD’s, DVD’s, books, and talking books. These resources are now treated as operating expense items and written down to zero value upon acquisition.

1.2.20 Plant & Equipment – is defined as being tangible (physical properties) in nature, and used in the production of goods and services, supply of goods and services, or for administrative purposes.

Plant & equipment is recognised as; IT hardware (including computers, monitors, servers, switches, routers, etc.), security systems, motor vehicles, machinery (trucks, heavy earth equipment, lawn mowers, tools, etc.), photocopiers & printers, presentation devices, telephony systems, and air conditioning units (ducted, split).

1.2.21 Furniture & Fittings – is defined as being tangible (physical properties) assets that include all remaining assets not captured under any of the above asset class definitions.

Furniture & Fittings is recognised as; workstations, storage (shelving, compactor unit), office furniture, floor coverings, lighting (internal, external), kitchen items (refrigerator, microwave, oven, water filter, cutlery, tables & chairs, etc.), and professional fees.


1.2.22 Software & Licences – is defined as being intangible (without physical

properties) assets, used in the production of goods and services, supply of goods and services, or for administrative purposes9. Often associated with IT hardware and capitalised labour, may include software, intellectual creativity, and other non physical items. Software & Licences is identified as a separate asset class due to the restrictions of the definition of “Property, Plant & Equipment” limited to tangible assets.

Software & Licences is recognised as; those intangible assets not covered under AASB 116, such as; software programs, licences (a right to a service over a finite period and / or a right to a service in perpetuity), patents, trademarks, intellectual property, and the cost of labour from development10.

The recognition principles identified above are a guide only, all new additions and existing items are required to meet the recognition test and identified into the correct asset class. Any queries should be addressed to Finance who as custodians have ultimate responsibility.

1.3 CAPITALISATION THRESHOLDS

1.3.1 Materiality In accordance with AASB 1031 – Materiality, the inclusion or exclusion of information may affect the users’ ability to make decisions, therefore increasing the risk of the overall result being impaired.

Information is deemed material if by its omission there is significant influence to the decision making process of the users, and the discharge of accountability by the owners.

Often measured based on quantitative thresholds, these thresholds are a guide only and need to be assessed in light of individual factors in making a determination. These measures are as follows:

• an amount which is equal to or greater than 10 per cent of the

appropriate base amount may assume to be material11, • an amount which is equal to or less than 5 per cent of the appropriate

base amount may be presumed not to be material12.

The Capitalisation Threshold applies to expenditure of a capital nature (refer “Capital v. Expenditure”), whereby expenditure exceeding the relevant threshold is recognised as a fixed asset. Expenditure that falls below the relevant threshold maybe fully expensed in the period in which it occurred, however if individual items operate as components of a cohesive whole and the overall cost exceeds the relevant threshold, the total value would be recognised as a fixed asset.

9 AASB 138.9

10 AASB 138.21

11 AASB 1031.15(a)

12 AASB 1031.15(b)


The Capitalisation Thresholds for each asset class is as follows:

ASSET CLASS ASSET COMPONENT THRESHOLD $

1 Roads

Sealed 5,000 Unsealed 5,000 Pavement 5,000 Fire Track 5,000 Line Markings 5,000 Traffic Signage 5,000

2 Bridges

Bridge 5,000 Culvert 5,000 Footbridge 5,000 Traffic Signage 5,000

3 Footpaths Footpaths 5,000 Cycle Tracks 5,000

4 Retaining Walls Retaining Walls 5,000 Embankment 5,000 Cutting 5,000

5 Guardrails Guardrails 5,000 6 Kerb & Gutters Kerb & Gutter 5,000

7 Traffic Controls

Traffic Signals 5,000 Pedestrian Structure 5,000 Parking Structure 5,000 Speed Humps 5,000 Roundabouts 5,000 Guideposts 5,000

8 Street Furniture

Seats & Benches 1,000 Rubbish Bins 1,000 Dog Bag Dispensers 1,000 Bus Stops 1,000 Fencing & Railings 1,000 Lighting 1,000 Ornaments 1,000 Information Signage 1,000

9 Land

Conservation Reserve 1 Passive Recreation 1 Community Use 1 Sport & Recreation 1 Civic Purposes 1 CFS 1 Commercial 1

10 Buildings

Office & Libraries 5,000 Depot 5,000 Halls & Comm’ty Bldgs 5,000 Retirement Villages 2,000 Public Toilets 5,000 Security Systems 5,000 Air-conditioning 5,000 Commercial 5,000

11 Parks & Reserves

Picnic Facilities 5,000 Furniture 5,000 Rubbish Bins 5,000 Ornaments 5,000


ASSET CLASS ASSET COMPONENT THRESHOLD $

12 Sports & Recreation

Sports Ovals 5,000 Swimming Centre 5,000 Courts 5,000 BMX Tracks 5,000 Skate Parks 5,000 Bowls 5,000 Golf Course 5,000 Cricket Nets 5,000 Trails 5,000

13 Playgrounds

Equipment 5,000 Shelter 5,000 Furniture 5,000 Rubbish Bins 5,000

14 Cemeteries

Structures 5,000 Furniture 5,000 Plinths 5,000 Roads 5,000 Footpaths 5,000 Drainage 5,000

15 TV Transmitter

Footings 5,000 Tower 5,000 Aerials / Dishes 5,000 Signal Station 5,000 Fences 5,000

16 Stormwater

Pipes 5,000 Pits 5,000 Trash Racks 5,000 Detention Basins 5,000

17 Water Supply

Pipes 5,000 Dam 5,000 Pump Station 5,000 Filtration 5,000

18 CWMS

Reticulation 5,000 Nodes 5,000 Pumping Stations 5,000 Treatment System 5,000 Reuse System 5,000

19 Library Resources

Audio Visual Expensed Books Expensed Talking Books / CD’s Expensed Video / DVD’s Expensed

20 Plant & Equipment

IT Hardware 1,000 Motor Vehicles 1,000 Machinery 1,000 Office Equipment 1,000

21 Furniture & Fittings

Workstations 1,000 Storage 1,000 Furniture 1,000 Floor Coverings 1,000 Kitchen 1,000 Lighting 1,000

22 Software & Licences

Software Licences 1,000 Patents / TM 1 Intellectual Property 1 Database 1


1.4 CAPITAL v. MAINTENANCE

1.4.1 Maintenance Maintenance refers to the costs incurred to retain or restore the utility of the asset to its new condition, or maintain the utility of an asset as a result of the natural wear and tear over the course of the assets useful life. A condition rating based on physical assessment of the asset is used to determine what degree of intervention is required to maintain service value (refer to “Condition Rating”).

MAINTENANCE EXPENSE RECOGNITION

ASSET CLASS CYCLICAL PLANNED REACTIVE

Roads

Line markings are maintained between the time of installation and replacement, due to factors such as; weather and usage causing the loss of the markings reflective properties.

Fixed intervals are agreed upon based on historical data and agreed service levels where the interval is used to express the maximum time between maintenance tasks. Works include: Patrol grading (remove potholes, dig outs, minor resurfacing), edge breaks, drainage, erosion and vegetation control, line re-marking, and traffic signage.

Based on a predetermined condition score where service levels are agreed upon to trigger intervention. Data is collected from customer complaints and routine inspections. Works include: Potholes, dig outs, minor resurfacing, edge breaks, drainage, erosion and vegetation control, line re-marking, and traffic signage.

Bridges NOT cyclical in nature

Fixed intervals are agreed upon based on historical data and agreed service levels where the interval is used to express the maximum time between maintenance tasks. Works include: structural repairs, and traffic signage.

Based on a predetermined condition score where service levels are agreed upon to trigger intervention. Data from customer complaints and routine inspections. Works include: structural repairs, and traffic signage.

Footpaths NOT cyclical in nature

Planned repairs to defects such as; vertical displacement, holes, smoothness, pits, washouts, silt deposits, edge break and tree roots to small sections.

Urgent repairs needed when safety is compromised, predecessor to other work, or risk of future cost blow out.




Retaining Walls

Regular site inspections of walls in areas of high water pressure and soil degradation.

Programme of maintenance to minimise deterioration to walls in high water pressure and soil degradation.

Repairs are required to maintain structural integrity to walls in areas of high water pressure and soil degradation.

Guardrails NOT cyclical in nature

Maintenance planned for minor oxidisation from exposure to weathering, i.e., replacement of bolts.

Repairs required due to damage to guardrail structure.

Kerbs & Gutters NOT cyclical in nature

Planned repairs for minor lifting, sinking or cracking of small sections of structure.

Unexpected but minor lifting, sinking or cracking of small structure.

Traffic Controls NOT cyclical in nature

Programme of maintenance to minimise deterioration

Repairs needed to rectify affected traffic flows

Street Furniture NOT cyclical in nature

Programme of maintenance to minor deterioration and vandalism.

Repairs required due to wear and tear, defects and vandalism.

Land NOT cyclical in nature.

NOT proactive in nature.

NOT reactive in nature.

Buildings NOT cyclical in nature

Programme of maintenance to minimise deterioration.

Repairs required to maintain building integrity

Parks & Reserves NOT cyclical in nature

Programme of maintenance to minimise deterioration. Planned works to cover lawn mowing, fertilisation, and irrigation repairs.

Repairs required due to wear and tear. Urgent repairs needed to maintain safety requirements

Sports & Recreation

NOT cyclical in nature


Urgent repairs needed to maintain safety requirements

Playgrounds NOT cyclical in nature

Programme of maintenance to minimise deterioration and audit requirements.

Repairs required due to wear and tear. Urgent repairs needed to maintain safety requirements

Cemeteries NOT cyclical in nature


Repairs required to maintain and respect the solemn ambience




TV Transmitter NOT cyclical in

nature


Urgent repairs needed to maintain safety and serviceability.

Stormwater Drainage

NOT cyclical in nature

Regular flushing of pits and pipes to remove debris/leaf litter to prevent blockages and overflows.

Urgent maintenance required when risk of flooding properties due to blockages or drain damage.

Water Supply NOT cyclical in

nature

Maintenance programme aimed at minimising the risk of contamination. Servicing to pump station and filtration process.

Urgent maintenance required when risk of contamination is high. Servicing to pump station and filtration process.

CWMS NOT cyclical in

nature

Maintenance programme aimed at minimising the risk of discharge to the environment. Flush sedimentation points, flush pipe lines, dislodge pits, servicing to pump station.

Urgent maintenance required when risk of discharge to the environment is high. Flush sedimentation points, flush pipe lines, dislodge pits, servicing to pump station.

Library Resources NOT cyclical in

nature All expensed All expensed.

Plant & Equipment NOT cyclical in

nature.


Repairs required due to wear and tear.

Furniture & Fittings

NOT cyclical in nature.


Repairs required due to wear and tear.

Software & Licences

NOT cyclical in nature.

NOT proactive in nature.

Required to debug or repair defects in applications.

When restoring an assets economic value based on a condition rating of one (1) to three (3), the activity is deemed to be maintenance and therefore Operating in nature, thus will not meet the definition of an asset. Such costs are therefore expensed in full when incurred.


Journal 1.1

The recommended accounting treatment for the cost of maintaining an asset is as follows:

DR Capitalised Assets Expense (P&L) $??

CR Creditor / Cash at Bank (BalSht) $??

Being cost incurred to restore service value of asset.

DR Asset Maintenance Expense (P&L) $??

CR Capitalised Assets Expense (P&L) $??

Being transfer to expenses.

1.4.2 Capitalisation

CAPITAL EXPENSE RECOGNITION

ASSET CLASS RENEWAL/

REPLACEMENT UPGRADE/

IMPROVEMENT NEW

Roads

Failure of existing road segment to meet the established needs and safety requirements of road users. Re-marking of lines due to road surface repairs or profiling.

Failure of existing road segment to meet the increased volume needs and safety requirements of road users. Re-marking of lines due to road surface repairs or profiling.

Creation of new road segment to service high volume vehicular access not previously available

Bridges

Critical safety implications of bridge or culvert structure components failing due to rust, vandalism, or structural deterioration

Critical safety implications of bridge or culvert structure components failing due to structural deterioration and increased usage volume

New bridge or culvert structure being built for the purpose of providing vehicular or pedestrian access not previously available

Footpaths

Failure due to defects to significant portion of segment (vertical displacement, holes, smoothness, pits, washouts, silt deposits, edge break and tree roots).

Failure due to increased pedestrian traffic and environmental impact on structure.

New footpath structure required where increased pedestrian traffic is evident, and pedestrian safety a concern.

Retaining Walls

Structure failure due to weathering, water course destabilisation and soil degradation.

Structure failure due to weathering, water course destabilisation and soil degradation.

A new structure required due to surveyed land subsidence.





IMPROVEMENT NEW

Guardrails

Failure due to deterioration (rust),

or damage to structure.

Failure due to deterioration (rust),

or damage to structure.

Accommodate increased safety

needs.

Kerbs & Gutter

Failure of segment structure to convey water run-off into

stormwater drains.

Failure of segment structure to convey water run-off into stormwater drains.

Meet additional water management

needs.

New infrastructure required due to the building of a new

road, or where there is a need to direct stormwater run-off.

Traffic Controls

Failure of traffic devices to effectively

control the flow of vehicular and

pedestrian traffic.

Failure of traffic devices to effectively control the flow of vehicular and pedestrian traffic due to increased volume usage.

Traffic devices needed to effectively

control the flow of vehicular and

pedestrian traffic due to increased volume

usage.

Street Furniture

Safety implications as a result of the park bench seat

being in poor condition and not meeting minimum

service level requirements.

Increased strength, stability and safety expected from park bench seats as expressed from the general public and elderly patrons.

Increased public and elderly patronage

creates a demand for park bench seats to

provide safe areas to rest and relax.

Land NOT replaceable in

nature NOT renewable in nature.

New land areas acquired for use by

the council.

Buildings

Safety implications as a result of

deterioration of the building structure.

Upgrade to the existing building structure to increase capacity.

New building extension to cater for

increased service and capacity

demands.

Parks & Reserves

Renewing assets due to damage or

vandalism, failure to meet minimum level

requirements.

Upgrade assets to meet changes in public interest and requirements, failure to meet minimum level requirements.

New assets to meet public interest and

requirements.

Sport & Recreation


vandalism, failure to meet minimum level safety requirements.

Upgrade assets to meet changes in public interest and perception, failure to meet minimum level safety requirements.


perception.

Playgrounds


vandalism, failure to meet minimum

safety and service level requirements.

Upgrade assets to meet changes in public interest and requirements, failure to meet minimum safety and service level requirements.


requirements for the recreation of children.





IMPROVEMENT NEW

Cemeteries


vandalism, failure to meet minimum level

requirements.

Upgrade assets to meet increased capacity needs, failure to meet minimum level requirements.

New assets to meet public needs and

expectations.

TV Transmitter Renewing assets

due to damage and wear and tear.

Upgrade assets to meet changes in

service capabilities and requirements.

New asset infrastructure to meet

community and general public service

requirements

Stormwater Drainage

Failure of system due to age and

deterioration of pipe system

Failure of system due to capacity constraints of

existing infrastructure.

New infrastructure required to capture excess stormwater

run-off.

Water Supply

Failure of system due to age and deterioration of storage facilities

Failure of system due to storage

facility being under capacity

New infrastructure required to store

clean water reserves

CWMS

Failure of system due to age and

deterioration of pipe system and pump

station infrastructure.

Failure of system due to age and deterioration of pipe system and pump station infrastructure. Increased need for

increased pipe capacity.

New infrastructure required where new housing allotments have been zoned.

Library Resources Operating Expense Operating Expense Operating Expense

Plant & Equipment

Renewing assets due to wear and

tear, failure to meet minimum service

level requirements.

Upgrade assets to meet increased service needs.

New assets to meet service needs and

employee expectations.


Renewing assets due to wear and

tear, failure to meet minimum service

level requirements.

Upgrade assets to meet increased service needs.

New assets to meet service needs and

employee expectations.

Software & Licences

Renewing services to prolong the

usability of existing intangible assets.

Upgrade assets to remain viable as a result of changes to intangible assets.

New intangible assets to meet

system and service needs.


When the condition of the asset’s serviceability reaches four (4) or five (5), the maintenance programme is insufficient to remedy detection or the beginning of asset failure. Costs incurred to replace or upgrade the asset are capital in nature and will either; replace the asset and restore future economic value, or renew the asset and add additional economic value to the overall asset base. Where a need is identified and an asset does not currently exist to meet that need, new acquisitions that provide future economic benefits may increase the asset base (no condition rating applies before existence).

Journal 1.2

The recommended accounting treatment for the cost of replacement, upgrade or new acquisition of an asset is as follows:

DR Capitalised Assets Expense (P&L) $??

CR Creditor / Cash at Bank (BalSht) $??

CR Capitalised Assets Expense (P&L) $??

DR Work in Progress – Asset (BalSht) $??

Being cost incurred to replace, upgrade or acquire service value of the asset.

DR Fixed Assets at Cost (BalSht) $?? AASB 116, 138

CR Work in Progress – Asset (BalSht) $??

Being transfer of costs incurred on completion to replace, Upgrade or acquire service value of the asset.

For an asset that is being replaced or upgraded, the existing asset maybe “Impaired”. To account for the impairment, the following accounting entry is required (see “Impairment” – Journal 2.1).

For an asset that is being replaced or upgraded where the asset may have previously been re-valued, the following accounting entry is required (see “Asset Revaluation” – Journal 4.2).

(NB: to the extent that the impairment loss does not exceed the amount in the revaluation reserve, any excess loss is written off against the Profit & Loss.)

The capital v. expenditure principles identified above is a guide only. All new additions, upgrades and replacements are required to meet the asset recognition test before selecting an asset class. All other expenditure is maintenance and is therefore operating in nature and fully expensed in the period in which it occurs. Any queries should be addressed to Finance who as custodians have ultimate responsibility.


1.5 DEPRECIATION BUSINESS RULES

1.5.1 Depreciation Capitalised assets, whose economic benefits in most cases are consumed over a definable period, are systematically depreciated (tangible assets) or amortised (intangible assets) over the assets useful life in a manner that best reflects the consumption of service embodied in the asset. The depreciable value will be the cost of the asset less any residual value (salvage, scrap) deemed to be appropriate for that asset. The method and rate of depreciation will be based on accepted patterns of useful life by Local Government, the experience of localised conditions to assess any environmental impact on those assets, and the verification from an independent valuer. Councils may as a result, form a structured approach to achieve a sustainable rate of deterioration of asset classes through their maintenance programs. This is a decision where the cost of maintenance and the speed of depreciation have to be assessed and verified to gain the best outcome and financial result.

The depreciation method adopted by the Adelaide Hills Council (AHC) is as follows: • Straight-line Depreciation – consumption of benefits in a uniform

manner over the life of the asset, calculated on asset cost less residual value. (Refer to Appendix for rate tables)

The nature of the asset in use is a major factor in determining the rate in which an asset is to be depreciated, and this rate will best reflect the useful life that economic benefits are expected to be consumed. A review of charges to the consumption patterns of assets is an ongoing process to ensure fair representation of financial valuations.

1.5.2 Residual Value Residual Value refers to the price at which a fixed asset is expected to be sold at the end of their useful life. Tangible assets that can be broken down into components such as steel, timber, road base and hardware, are often seen as possessing residual value at the end of their useful life due to these materials being used or reworked for other uses. Intangible assets such as obsolete software and labour hours have a zero residual value as they do not possess components that are re-useable, and are consumed in full over the period in which they are in service.


The Adelaide Hills Council recognises that many components consume materials that can be re-used or sold. These residual values are defined as follows:

SCHEDULE OF RESIDUAL VALUES

ASSET CLASS ASSET TYPE VALUATION

BASE RESIDUAL VALUE (%)

COMMENT

Roads

Asphalt / Spray Seal

Current Replacement

value Immaterial

No salvageable materials. Cost of cartage.

Re-sheeting and Line Marking

Current Replacement

value Immaterial


Urban Road Pavement - Distributor - Collector - Municipal

Current Replacement

value 25

Distributor Collector Municipal

Roads

Urban Distributor Deep-lift Pavement

Current Replacement

value 25


Urban Road Formation - Distributor - Collector - Municipal

Current Replacement

value 100


Rural Road Pavement - Distributor - Collector - Municipal

Current Replacement

value 33


Rural Distributor Deep-lift Pavement

Current Replacement

value 33


Rural Road Formation - Distributor - Collector - Municipal

Current Replacement

value 100


Traffic Signage Current

Replacement value

Immaterial No salvageable materials. Cost of cartage.

Bridges

Vehicular Bridges

Current Replacement

value Immaterial


Footbridges Current

Replacement value


Culverts Current

Replacement value


Traffic Signage Current

Replacement value






COMMENT

Footpaths

Pedestrian Path / Ramp

Current Replacement

value Immaterial


Cycle Track Current

Replacement value


Retaining Walls

Retaining Wall Current

Replacement value


Embankment Current

Replacement value


Cutting Current

Replacement value


Guardrails Guardrail (Post & end)

Current Replacement

value Immaterial


Kerb & Gutter Kerb & Gutter Current

Replacement value


Traffic Controls

Chicanes, speed humps, & roundabouts

Current Replacement

value Immaterial

No salvageable materials.

Pedestrian crossings / Island Refuge

Current Replacement

value Immaterial


Signs

Aid and guidance Information Signage

Current Replacement

value Immaterial

No salvageable materials.

Street Furniture

Bench Seats Current

Replacement value


Rubbish Bins Current

Replacement value


Dog Bag Dispenser

Current Replacement

value Immaterial


Bus Stops Current

Replacement value


Fencing & Railings

Current Replacement

value Immaterial


Lighting Current

Replacement value


Street Furniture Information Signage

Current Replacement

value Immaterial






COMMENT

Land Land available for Use

Current Replacement

value 100

Asset is NOT depreciable, residual value equals market value.

Buildings

Offices & Libraries

Current Replacement

value

I30% of UNsegmented

structure

Some salvageable materials.

Depots Current

Replacement value

I30% of UNsegmented

structure


Halls & Community

Current Replacement

value

I30% of UNsegmented

structure


Public Toilets Current

Replacement value

Immaterial No salvageable materials.

Retirement Villages

Current Replacement

value

I30% of UNsegmented

structure


Commercial Properties

Current Replacement

value

I30% of UNsegmented

structure


Parks & Reserves

Passive Reserve Facilities

Current Replacement

value 100

Asset is NOT depreciable, residual value equals full replacement cost

Furniture Current

Replacement value



Replacement value


Ornaments Current

Replacement value

100 Asset is NOT depreciable

Sports & Recreation

Active Reserves Facilities

Current Replacement

value 100

Asset is NOT depreciable

Furniture Current

Replacement value


Structures Current

Replacement value



Replacement value


Playgrounds Play equipment within reserve

Current Replacement

value Immaterial






COMMENT

Cemeteries

Plinths Current

Replacement value


Structures Current

Replacement value


Furniture Current

Replacement value


Paths Current

Replacement value


TV Transmitter

Structures Current

Replacement value


Paths Current

Replacement value


Aerial equipment

Current Replacement

value Immaterial


TV Transmitting Licence

Current Replacement

value 100

Residual value equals market value.

Stormwater Drains

Pipes, grates and Pits (nodes)

Current Replacement

value Immaterial

Not considered to be salvageable materials. Cost of cartage. Re-usable pipes

Water Supply Pipes, grates and Pits (nodes)

Current Replacement

value Immaterial

Not considered to be salvageable materials. Cost of cartage. Re-usable pipes

CWMS

Pump Station Current

Replacement value


Pipes and Pits (nodes)

Current Replacement

value Immaterial

Not considered to be salvageable materials. Cost of cartage.





COMMENT

Library Resources

Audio Visual Operating Expense

Operating Expense

Operating Expense

Books Operating Expense

Operating Expense

Operating Expense

Talking Books Operating Expense

Operating Expense

Operating Expense

DVD’s Operating Expense

Operating Expense

Operating Expense

CD’s Operating Expense

Operating Expense

Operating Expense

Plant & Equipment

IT Hardware Current

Replacement value

Immaterial No salvageable materials. Cost of Cartage

Motor Vehicles Current

Replacement value

25 Trade in (market) Value

Machinery Current

Replacement value

25 Trade in (market) Value

Plant & Equipment

Telephony System

Current Replacement

value Immaterial

No salvageable materials. Cost of Cartage

Security System

Current Replacement

value Immaterial


Air Conditioning Current

Replacement value



Workstations Current

Replacement value


Office Furniture Current

Replacement value


Kitchen Current

Replacement value


Floor Coverings Current

Replacement value


Software & Licences

Software & licenses

Current Replacement

value Immaterial


Trademarks Current

Replacement value


Patents Current

Replacement value


Intellectual Property

Current Replacement

value Immaterial



1.5.3 Condition Rating

The development of an Asset Management regime is aimed at detecting and scheduling the appropriate levels of intervention to secure the current sustainability of assets in question. This approach provides understanding of how to maintain and plan for the desired rates of consumption of assets employed, and creates clarity to the budgeting process with greater potential for savings. With regard to council assets that adopt a long term useful life profile, Adelaide Hills Council (AHC) chooses to use a condition rating schedule to identify the levels of intervention by imposing a rating test from 0 – 10. The rating table is as follows:

Rating Description of Intervention 0 - 1 Excellent condition Only planned maintenance required 2 - 3 Very good Minor maintenance required plus planned

maintenance 4 - 5 Good Significant maintenance required 6 – 7 Average Significant renewal/upgrade required. 8 – 9 Poor Unserviceable. 10 Totally Consumed Total consumption - hazardous

From this table, an assessed rating of 0 – 5 indicates the need to maintain the serviceability of the asset in an effort to reduce the speed of deterioration and rate of consumption. As the assets consumption rate increases so too does the level of intervention, which results in an increase in costs. Asset Management policies are vital in assessing when the cost of maintaining an asset, plus the cost of accounting for impairment, outweigh the cost of renewing the asset (refer to “Impairment”). Where an asset is assessed at a rating of 6 – 10, the asset is assessed as having significant levels of deterioration requiring capital investment to restore or replace economic value. This rating level reveals the cost to maintain the asset has now outweighed the cost of renewing the asset, and any remaining benefits from the impaired asset would be insignificant. Rates of Depreciation (based on a useful life) and Condition Ratings of applicable asset classes are discussed below. Condition data is used to assess the assets defect rating, a combination of visual and physical inspection to determine changes in the expected service life:

1.5.4 Roads –Roads are complex structures consisting of two distinct components, the pavement and the surface (where sealed). The network consists of different structural makeup’s each of which has differing useful lives. As such the rates of deterioration for each of the types has been separately shown in Table 3 (Appendices).


Defects that are considered for Roads include: • Rutting - rippled effect of road surface • Roughness – uneven surface • Stripping – exposed patches of wear • Edge Break – crumbling of surface edge • Cracking – cracks exposing sub-base.

Roads also consist of line markings involving reflective paint applied in various formats. The useful life of the line markings is consistent over all formats, however due to usage and environmental factors, the rate of deterioration for each format may differ. As such the rates of deterioration for each identifiable line marking format has been separately shown in Table 7 (Appendices). Signs are purchased as a whole item made up of components such as the sign, pole and footings. The rate of deterioration for each identifiable sign and their reflective quality has been separately shown in Table 11 (Appendices).

1.5.5 Bridges – Bridges are a cohesive and complex structure of asset components used for both vehicle and pedestrian passage, which hold different useful lives. As such the rates of deterioration for each identifiable component has been separately shown in Table 4 (Appendices).

Defects that are considered for Bridges include:

• Rotting – of decking and support timbers • Oxidisation – of bolts and steel due to exposure • Storm Damage – often close to major watercourses

Signs are purchased as a whole item made up of components such as the sign, pole and footings. The rate of deterioration for each identifiable sign and their reflective quality has been separately shown in Table 11 (Appendices).

1.5.6 Footpaths – Footpaths may be constructed from a number of different materials, each of which has differing useful lives. As such the rates of deterioration for each identifiable component has been separately shown in Table 5 (Appendices).

Defects that are considered for footpaths include: • Vertical Displacement – raised section of surface • Holes – surface wear • Smoothness – surface wear and sedimentation • Pits & Washouts – deterioration from weathering • Silt Deposit – unstable footing. • Edge Break – crumbling of surface edge • Tree Roots – surface breakage from tree roots


1.5.7 Retaining Walls – Retaining Walls, Embankments and Cuttings are

formed from various materials used to create a structure, including earth foundations (bulk earth works), timber, concrete and steel. These structures are made from different primary materials each have differing useful lives, and as such the rates of deterioration for each structural type has been separately shown in Table 6 (Appendices).

1.5.8 Guardrails – Guardrails are designed with essentially two (2) components, W Beam Rail, and either a drum (Melt) or fishtail (trailing) terminal end. As such the rates of deterioration for each identifiable component has been separately shown in Table 8 (Appendices).

1.5.9 Kerb & Gutters (K&G) – Kerbs are made up of different construction

types which hold differing useful lives. As such the rates of deterioration for each identifiable component has been separately shown in Table 9 (Appendices).

Defects that are considered for Kerb & Gutters include:

• To convey excess water run-off into stormwater drains.

1.5.10 Traffic Controls – Traffic Controls are made up of several components which hold differing useful lives. As such the rates of deterioration for each identifiable component has been separately shown in Table 10 (Appendices).

1.5.11 Street Furniture – is made up of park bench seats and footing components which are treated as a single asset. However depending on the materials used in the bench designs, each design may possess a different useful life, therefore the rates of deterioration for each design of bench seat has been separately shown in Table 12 (Appendices).

Signs are purchased as a whole item made up of components such as the sign, pole and footings. The rate of deterioration for each identifiable sign and their reflective quality has been separately shown in Table 11 (Appendices).

1.5.12 Land – Land is identified as areas of earth that can be made available for

other controlled assets, but remain independent from those assets and are valued independently. Unlike other assets, land cannot be consumed and become obsolete, its use is unlimited and therefore has an ongoing useful life, and is not depreciable. Land revaluations are assessed on a regular basis geared to the Valuer Generals assessment each year with valuation adjustments made periodically (refer to Asset Impairment and Asset Revaluation Reserve). Council parcels of land are shown in Table 13 (Appendices).

1.5.13 Buildings – Buildings are a cohesive and complex structure of asset

components used to provide a secure and sheltered area to conduct general council, specialised council, or Adelaide Hills Council (AHC) community based activities. These separately identifiable assets hold differing useful lives and as such the rates of deterioration for each identifiable component has been separately shown in Table 14 (Appendices).


1.5.14 Parks & Reserves – Parks & Reserves contain many assets made from

various materials exhibiting various lengths of economic life. Other factors affecting these assets include; environmental factors, volume of use, and the natural wear and tear from the assets intended use. These components therefore have differing useful lives, and as such the rates of deterioration for each identifiable component has been separately shown in Table 15 (Appendices).

1.5.15 Sports & Recreation – Sports & Recreation zones contain many assets made from various materials exhibiting various lengths of economic life. Other factors affecting these assets include; environmental factors, volume of use, and the natural wear and tear from the assets intended use. These components therefore have differing useful lives, and as such the rates of deterioration for each identifiable component has been separately shown in Table 16 (Appendices).

1.5.16 Playgrounds – Playgrounds contain many assets made from various materials exhibiting various lengths of economic life. Other factors affecting these assets include; environmental factors, volume of use, and the natural wear and tear from the assets intended use. These components therefore have differing useful lives, and as such the rates of deterioration for each identifiable component has been separately shown in Table 17 (Appendices).

1.5.17 Cemeteries – Cemeteries accommodate many assets, and these assets are used for arrange of purposes, and made from various materials. The assets found in cemeteries therefore have differing useful lives, and as such the rates of deterioration for each identifiable component has been separately shown in Table 18 (Appendices).

1.5.18 TV Transmitter – TV Transmitters contain many assets made from various materials exhibiting various lengths of economic life. Other factors affecting these assets include; environmental factors and the natural wear and tear from the assets intended use. These components therefore have differing useful lives, and as such the rates of deterioration for each identifiable component has been separately shown in Table 19 (Appendices).

1.5.19 Stormwater Drainage – Stormwater Drainage Systems is made up of a series of pipes and pits (nodes) forming a web like structure of asset components that have differing useful lives based on size and structural makeup. As such the rates of deterioration for each identifiable component has been separately shown in Table 20 (Appendices).

Aged as opposed to conditioning data is used to assess the assets defect rating, the effective life of Stormwater pipes is one hundred (100) years13. Based on accepted Australian Standards, it can be assumed that once the assets useful life has been consumed in full, the asset will need to be replaced.

1.5.20 Water Supply – the Water Supply system is made up of an intricate web

of pits and pipes that contain a number of asset components that have differing useful lives. As such the rates of deterioration for each identifiable component has been separately shown in Table 21 (Appendices).

13

Australian Standard AS4058 and AS3725


1.5.21 CWMS – Community Waste Water Management Systems is a cohesive

and complex structure of asset components that have differing useful lives. As such the rates of deterioration for each identifiable component has been separately shown in Table 22 (Appendices). Aged as opposed to conditioning data is used to assess the assets defect rating. Based on advice provided by Wallbridge and Gilbert, it can be assumed that once the assets useful life has been consumed in full, the asset will need to be replaced.

1.5.22 Library Resources – Library Resources are not subject to condition ratings, being initially recorded as an Operating Expense

1.5.23 Plant & Equipment – Plant & Equipment includes various assets,

including; IT hardware, motor vehicles, machinery, security systems, and telephony systems. Due to the assets intended use and the materials associated with that asset, these assets exhibit differing useful lives, and as such the rates of deterioration for each identifiable component has been separately shown in Table 24 (Appendices).

1.5.24 Furniture & Fittings – Furniture & Fittings includes various assets, including; workstations, storage, office furniture, kitchen furniture, and floor coverings. Due to the assets intended use and the materials associated with that asset, these assets exhibit differing useful lives, and as such the rates of deterioration for each identifiable component has been separately shown in Table 24 (Appendices).

1.5.25 Software & Licences – intangible assets are essentially a single asset component which is assessed as being of a finite or indefinite useful life (perpetual life cycle). As such the rate of deterioration follows the councils understanding of the assets use and the regularity of renewals by the developer, thus if the asset is deemed to be finite in nature, the asset is amortised over the period in which services are expected to be consumed. If the asset is deemed to be indefinite, it is not14.

Remaining future economic benefits available to the council is subject to asset version development and replacement, and is therefore deemed to be fully utilised at the date the asset reaches obsolescence. These assets exhibit differing useful lives, and as such the rates of deterioration for each identifiable component has been separately shown in Table 25 (Appendices).

1.6 USEFUL LIFE OF ASSETS

The useful life of an asset is defined as the passage of time that the expected consumption of asset services is available to an entity. Over this period the useful life maybe reviewed on a regular basis taking into account new information about future economic value, any adjustments resulting from this review will be made prospectively (i.e., adjustments to depreciation charges will be made to future periods with no allowable adjustment to prior periods)15.

14

AASB 138.89 & 97 15

AASB 116.51 with reference to AASB 108.32 - 40


A change in accounting estimates is not necessarily deemed an error if the adjustment to the estimate is a result of new information or developments. The interpretation of such an event will result in no restatement of accounts16. When referring to the life of an asset, a distinction is made between the terms “Useful Life” and “Economic Life”. This distinction is as follows: • Useful Life – the period in which the entity deems the asset to be available for

use, based on an entities assessment of the service value of like assets and / or past experience, and should be reviewed as part of the entities normal policies and procedures.

• Economic Life – the natural life cycle of the asset from which service value would be available if the asset were allowed to be used without entity interference or bias.

An entity may choose to dispose of an asset prior to all future economic benefits having been consumed, this decision will be based on the most economical or opportunistic time an entity deems appropriate to dispose or replace the asset. There are many factors that contribute to the assessment of an assets useful life. The overall performance and life expectancy of these assets is influenced by external as well as internal factors, these are identified in Table A (Appendices). The useful life will be further influenced by the type of materials used in construction, usage volume, normal wear and tear, damage, and known industry standards and established consultancy studies17. Factors that are particular to each asset are discussed as follows:

1.6.1 Roads – are valued at the segment level (refer to Table B), each segment is determined by the road type or design, and / or geographical features such as intersections or road ends. The useful life of a segment of road (whether it be seal, or pavement) is assumed to be the time that the asset is expected to be is use before renewal of the whole segment is required.

If the pavement requires renewal, the seal and line marking will be renewed at the same time. However when the seal requires renewal, the pavement is not necessarily required to be renewed. The useful life of a pavement is largely affected by water ingress, a good maintenance regime and seal renewal scheduling ensures that this effect is controlled. Traffic signage is valued individually (refer to Table B) and assessed based on their reflective properties and pole and footing strength. Refer Table 3, Table 7 & Table 11 (Appendices).

1.6.2 Bridges – are valued as both vehicle and pedestrian bridges as well as major culverts (refer to Table B), each structure is determined by the type or design, and materials used in the structure. The useful life of a bridge or culvert is assumed to be the time that the asset is expected to be in use achieving the highest level of safety before renewal of the whole asset is required. The overall performance and life expectancy of bridges and major culverts is further influenced by external factors such as weathering, vandalism, breakage, and oxidisation.

16

AASB 108.5 17

IIMM (2006) reference document


Traffic signage is valued individually (refer to Table B) and assessed based on their reflective properties and pole and footing strength. Refer Table 4 & Table 11 (Appendices).

1.6.3 Footpaths – are valued at the segment level (refer to Table B), each segment is determined by the footpath type or design, and / or geographical features such as intersections. The useful life of a segment of footpath is assumed to be the time that the asset is expected to be in use before renewal of the whole segment is required.

Refer Table 5 (Appendices).

1.6.4 Retaining Walls – are valued at the item or single structure level (refer to Table B), each structure is determined by the type or design of Retaining Wall or Embankment. The useful life of a structured Retaining Wall or Embankment is assumed to be the time that the asset is expected to be in use before renewal of the whole structure is required. The rates applied to Concrete crib walls are based on the likelihood that they will be replaced by another design.


1.6.5 Guardrails – are valued as a length of guardrail (refer to Table B), made up of the following asset components; W-Beam Australian Standard Approved steel guardrail sourced from S.A. Guardrailers, attachment bolts and concrete footings. The useful life of a guardrail is assumed to be the time that the road asset is expected to be in use before renewal of the whole asset is required.


1.6.6 Kerb & Gutters (K&G) – are valued at the segment level (refer to Table B), each segment is determined by the road type that the kerb is constructed on, geographical features such as intersections, and where the kerb design has changed. The useful life of a segment of kerbing is assumed to be the time that the asset is expected to be in use before renewal of the whole segment is required.


1.6.7 Traffic Controls – are valued as pedestrian crossings and refuges,

chicanes and other motor vehicle speed inhibitors. The useful life of traffic controls is valued at the individual item level (refer to Table B), and is assessed on their ability to control traffic, calm the flow of traffic, and to protect pedestrians.



1.6.8 Street Furniture – is valued as a combination of assets that including

park bench seats and information signage (refer to Table B for other component details).

The useful life of bench seats and information signs is assumed to be the time that the asset is expected to be in use before replacement of the whole asset is required.

Refer Table 11 & Table 12 (Appendices).

1.6.9 Land – is valued as land areas zoned for the use by the Adelaide Hills Council (refer to Table B) to establish dwellings, parks, reserves and sporting facilities for the enjoyment of the community. The useful life of Land is assumed to be indefinite, only when control over the use of that land ceases that land becomes finite.


1.6.10 Buildings – is valued as a structure or dwelling made up of a number of

components (refer to Table B) for the purpose of providing a safe and covered place to facilitate community activities. The useful life of building assets is assumed to be the time the asset continues to be in use before renewal of the whole asset is reached.


1.6.11 Parks & Reserves – is valued as array of asset components (refer to Table B) that cater for passive leisure activities for the residents and visitors for their enjoyment, as well as providing an account of history that reflects on the positive contributions of the local community. The useful life of these assets is assumed to be the time that the asset components continue to provide enjoyment before renewal of the whole asset is required.


1.6.12 Sports & Recreation – is valued as array of asset components (refer to Table B), that cater for sporting and leisure activities (not included under “Parks & Reserves”) for the residents and visitors for their enjoyment. The useful life of these assets is assumed to be the time that the asset components continue to provide enjoyment before renewal of the whole asset is required.


1.6.13 Playgrounds – is valued as a number of specific asset components (refer to Table B), that cater for the playing activities of children. The useful life of these assets is assumed to be the time that the asset components continue to provide enjoyment and meets minimum safety requirements before renewal of the whole asset is reached.



1.6.14 Cemeteries – is valued as array of asset components (refer to Table B),

that when combined provide ambient surroundings for friends and loved ones to grieve. The useful life of these assets is assumed to be the time that the asset components continue to provide a safe and comfortable environment before renewal of the whole asset is required.


1.6.15 TV Transmitter – is valued as a number of specific asset components (refer to Table B), that provide communication services to the community and general public. The useful life of these assets is assumed to be the time that the asset components continue to provide this service before renewal of the whole asset is reached.


1.6.16 Stormwater Drainage – stormwater infrastructure assets are valued at the segment level (refer to Table B), segments are determined by lengths of pipe between nodes (pits). For pipes and pits, there are two proven ways of reaching the end of their useful life;

• Capacity – when the asset no longer achieves the capacity needs of

increased volume flows (for example, a pipe no longer has the necessary dimensions to handle increased waste water).

• Structural – when the asset fails due to inadequate strength or age, and renewal is required (for example, a pipe develops cracks due to increased volume pressure).

Refer to Table 20 (Appendices).

1.6.17 Water Supply – water supply assets are valued at the asset level (refer to Table B), and are valued by their ability to transport treated water for reuse by the community;


increased volume flows (for example, the storage dam no longer has the capacity to hold increased water reserves).




1.6.18 CWMS – assets are valued at the segment level (refer to Table B),

segments are determined by lengths of pipe between nodes (pits). For pipes and pits, there are two proven ways of reaching the end of their useful life;


increased volume flows (for example, a pipe no longer has the necessary dimensions to handle increased waste water).



1.6.19 Library Resources – Initially valued at cost but written down immediately to zero value and reported as Operating expenditure.

1.6.20 Plant & Equipment – is valued as array of asset components (refer to

Table B) that are used by the Council for administrative, work team and community based activities. The useful life of these assets is assumed to be the time that the asset components continue to provide a service to the needs of the user before renewal of the whole asset is required.


1.6.21 Furniture & Fittings – is valued as array of asset components (refer to Table B) that are used by the administrative offices and libraries of the Adelaide Hills Council. The useful life of these assets is assumed to be the time that the asset components continue to provide a service to the needs of the user before renewal of the whole asset is required.


1.6.22 Software Licences – valued as a single item (refer to Table B), the

useful life of intangible assets such as; computer application software, licences, patents, trademarks, and intellectual property, shall be assessed to whether the assets useful life is finite or indefinite (perpetual in nature). The usefulness of the asset is subject to the availability of new intellectual releases in the market that render the asset obsolete with a finite term of serviceability18.


1.7 IMPAIRMENT All assets recognised under AASB 116 and AASB 138 is required to be reviewed for impairment on an annual basis. Impairment of an asset refers to the difference between the “Carrying Amount” (recorded book value) of an asset and how much it exceeds its “Recoverable Amount” (the higher of the assets “Fair Value” less costs to sell and its “Value in Use”)19.

18

AASB 138.88 19

AASB 136.8, 9, 12


“Value in Use” has two recognised definitions, for not-for-profit entities “Value in Use” refers to the depreciated “Replacement Cost”20. For commercial entities “Value in Use” refers to the present value of future cash flows expected to be derived from the assets use. As this policy is limited to Not-for-Profit entities, current replacement cost test needs to be satisfied. Impairment should be reviewed in terms of the following factors:

• Decline in “Recoverable Amount”. • Changes to the technological, marketing, economic, and legal environments. • Increase in cost of capital (interest rates). • Physical damage or observed obsolescence. • Changes to the entities corporate structure or financial well being.

The accounting for the impairment of assets as per AASB 136 is as follows:

Journal 2.1

The recommended accounting treatment for the impairment of an asset within an asset class is as follows:

(NB: assume non re-valued impaired assets)

DR Asset Depreciation Expense (P&L)

$?? AASB 136.60

CR Accumulated Depreciation (BalSht)

$??

Being additional depreciation to reflect a reduction In the carrying amount of the asset, due to impairment based on independent valuation.

Following entry required where the impaired asset no-longer exists in the financial records.

DR Accumulated Depreciation (BalSht)

$??

CR Asset at cost (BalSht) $??

Being de-recognition of impaired asset no-longer existing as a recorded asset.

If the asset is sold for a net gain after associated costs of sale, the following entry applies.

DR Cash (BalSht) $??

CR Gain on Sale (P&L) $??

Being sale of impaired asset net of expenses.

20

AASB 136 Aus 6.1


Journal 2.2

For an impaired asset where the asset may have previously been re-valued, the following accounting entry is required (see “Asset Revaluation” – Journal 4.2)21.

(NB: to the extent that the impairment loss does not exceed the amount in the revaluation reserve, any excess loss is written off against the Profit & Loss.)

When impairment is found, the asset is deemed to have been consumed at a faster rate than original estimates, resulting in the expected useful life being shorter. This change in expected useful life may be as a result of an event (for example; flood, fire, and other acts of God) or a higher than expected natural rate of deterioration. As a result of a natural increase in the rate of deterioration, and deemed to be beyond the initial consumption rate expectations of the Council’s engineers department and independent valuers, adjustment to the rate of consumption is required to be made in the period the change is known. Refer to 1.6 “Useful Life of Assets” where it says;

“… the useful life maybe reviewed on a regular basis taking into account new information about future economic value, any adjustments resulting from this review will be made prospectively (i.e., adjustments to depreciation charges will be made to future periods with no allowable adjustment to prior periods)”.

Discipline is required when assessing impairment of an asset. Regular review of an assets consumption rate and the environmental factors that may influence change, may avoid retrospective adjustments being made in the current reporting period.

1.8 DISPOSALS

On disposal of an asset, control of the asset ceases to exist and the right to any future economic benefits that may otherwise be available. Further, when the recognition criteria for an asset ceases, the item must be removed from the asset register. On disposal, if compensation is received and differs from the carrying amount (i.e., cost less residual less accumulated depreciation) at the date of disposal, the variance is recorded in the Profit and Loss as a Gain or Loss on Disposal of Asset. When a disposed asset has been re-valued in a prior period and an Asset Revaluation Reserve exists for that asset class, the balance pertaining to the disposed asset in the revaluation reserve will be transferred to the Accumulated Surplus / Deficit account brought forward (refer to “Asset Revaluation”).

21

AASB 136 Aus 61.1


The accounting for disposals as per AASB 116 and AASB 138 is as follows:

Journal 3.1

The recommended accounting treatment for the disposal of an asset within an asset class is as follows:

(NB: assume non re-valued asset disposed of at a surplus)

DR Cash at Bank (BalSht) $??

DR Accumulated Depreciation (BalSht)

$??

CR Fixed Assets at Cost (BalSht) $??

DR Loss on Disposal of Asset (P&L) $??

OR …

CR Gain on Disposal of Asset (P&L) $??

Being the recognition of a gain on disposal

Journal 3.2

For a disposed asset within an asset class that has previously been re-valued, the following additional accounting entry is required (see “Asset Revaluation” – Journal 4.2).

(NB: assume previously re-valued asset disposed of at a surplus)

1.9 ASSET REVALUATIONS

1.9.1 Methodology Assets are to be recorded at “Fair Value”, this term is defined as :

“… the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.”22

However due to the lack of liquidity in the trading of capital assets, the standard does allow an estimate to be used based on the “Depreciable Replacement Cost”.

“…current replacement cost of an asset less, where applicable, accumulated depreciation calculated on the basis of such cost to reflect the already consumed or expired future economic benefits of the asset.”23

22

AASB 116.6 (Definitions) 23

AASB 136 (Aus 6.2)


On the premise that all Assets are to be recorded at their “Replacement Cost” (Fair Value), all Assets are required to be re-valued on a regular basis to assess the assets carrying value against the assets fair value at reporting date. When the assessment reveals a material difference24, the entire class to which the asset belongs will be re-valued25 and the increment adjustment taken to equity. Diagram 2:

“Revaluations shall be made with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined using fair value at the reporting date.”26

To ensure the components of an asset class are not materially different from their fair value, annual desktop reviews based on an appropriate market index (e.g., LGPI) or independent valuer (e.g., Southwick and Goodyear, Wallbridge and Gilbert etc.) need to be implemented to identify an increase in capital value. A full physical revaluation is required to be carried out, as per Council resolution, where current valuations of all reported asset classes materially differ from what has been reported; usually over a period not greater than five (5) years. The adoption of an annual review approach may reduce the impact of large depreciation adjustments offset against future operating results, a past practice adopted by many councils resulting in inaccurate management planning behaviours.

24

AASB 1031 25

AASB 116.36 26

AASB 116.31


1.9.2 Accounting for Revaluations

On revaluation of an asset, both the gross amount (historical cost + adjust for fair value) and accumulated depreciation are to be restated separately. This creates a better comparison of the asset consumption ratio, and is required under the standard27 (Refer to Appendix “Worked Example”) Any increase in asset valuations will give rise to the creation of an Asset Revaluation Reserve, and will become part of equity unless reversing a previously recognised decrease write off to expenses28. A decrease in asset value may be written back to the Profit & Loss, this decrement however will be offset against any previously recognised revaluation increments that exist in the Asset Revaluation Reserve29. The standard permits the transfer of the Asset Revaluation Reserve to Retained Earnings once the asset has been de-recognised. An entity may choose to transfer some of the balance in the Asset Revaluation Reserve to Retained Earnings by taking the differential between depreciation (based on the re-valued carrying amount) and the depreciation on original cost30 (refer to “Option Entry” – Journal 4.1).

Journal 4.1

The recommended accounting treatment when revaluing an asset for the first time is as follows (refer to “Appendix – 3.1.5” for worked example):

(NB: assume an incremental revaluation)

DR Fair Value Increment (BalSht) $??

CR Accumulated Depreciation (BalSht) $?? AASB 116.35

CR Asset Revaluation Reserve (Equity) $??

Being incremental revaluation of asset class as per independent valuer’s recommendation.

Subsequent period entries to account for the continual consumption of the asset after revaluation.

DR Depreciation Expense - Historical Cost (P&L)

$??

DR Depreciation Expense – Re-valued increment (P&L)

$??

CR Accumulated Depreciation - Historical Cost (BalSht)

$??

CR Accumulated Depreciation – Re-valued increment (BalSht)

$??

Being the accounting of depreciation of the asset at historical cost and revaluation increment.

27

AASB 116.35(a) 28

AASB 116.39 29

AASB 116 (Aus 40.1) 30

AASB 116.41


Additional Entries – accounting for de-recognition of the asset over time and the reduction to the Asset Revaluation Reserve.

DR Asset Revaluation Reserve (Equity) $?? AASB 116.41

CR Accumulated Surplus / Deficit B/F (Equity)

$??

Being the gradual release of the ARR increment pertaining to the asset over the useful life.

OR …

DR Asset Revaluation Reserve (Equity) $?? AASB 116.41

CR Accumulated Surplus / Deficit B/F (Equity)

$??

Being the full release of the ARR increment pertaining to the asset upon de-recognising the asset.

Journal 4.2

For all entries where an asset has been REPLACED / UPGRADED, DISPOSED or assessed as IMPAIRED, and where the asset may have previously been re-valued, the following accounting entry is required:

(NB: to the extent that the value of the deregistered asset does not exceed the amount in the revaluation reserve, any excess write back is offset against the Profit & Loss.)

DR Asset Revaluation Reserve (Equity) $??

CR Accumulated Surplus / Deficit B/Fwd (Equity)

$??

Being adjustment to ARR to reflect deregistering of the asset brought about due to replacement / Upgrade, disposal or impairment.

1.10 INITIAL RECOGNITION OF PREVIOUSLY CONSTRUCTED ASSETS

1.10.1 Accounting for Unrecorded Assets Due to the volume of complex infrastructure assets controlled by the Adelaide Hills Council accumulated over many years, and as a result of council amalgamation, it has been observed that prior year records may be incomplete with the omission of some assets.


Where previously constructed assets are recognised in the accounts for the first time, the initial recognition adjustment is made in the current reporting period off-set against prior year asset revaluation reserves relating to that asset class. Any amounts exceeding the reserve are expensed to the profit and loss, thus showing; fair value at the date of acquisition, an adjustment to the accumulated depreciation over the relevant period of consumption, and the difference against reserves (ARR) or P&L. As the asset has been in existence over several reporting periods, it is necessary that an adjustment be made to the asset revaluation reserve as this asset class has in effect been revalued (or impaired) due to the correct recording of the omitted asset(s). The proposed accounting treatment to correctly recognise the asset(s) is as follows:

Journal 5.1 The recommended accounting treatment when valuing a previously constructed asset for the first time:

DR Gross Asset Value (BalSht) $??

DR Depreciation Expense – relating to the

current period (P&L) $??

CR Accumulated Depreciation – Current Year (BalSht)

$??

CR Asset Revaluation Reserve – only to

the extent of the balance available (BalSht) $??

DR Depreciation Expense – only where no

ARR is available (P&L) $??

Being valuation of asset class as per independent valuer’s recommendation.

The initial recognition of a previously constructed asset may give raise to an asset revaluation, as the adjustment serves to account for the existence of an asset not previously valued. Revaluation is where the assessment of the assets recoverable amount exceeds the carrying value; this is possible for assets not previously recorded as their carrying value is a direct influence to the related asset class. Once the asset has been brought to account for the first time, the asset is required to be reviewed as part of the normal annual asset maintenance program. These adjustments to depreciation, due to impairment of the asset, are made against either reserves (ARR) and/or current depreciation expense.


2. SYSTEMS AND CONTROLS

The Conquest Asset Management system is a proprietary software system database that offers extensive data management, analytical and reporting functionality for capitalised assets. The system is functionally rich, employs open-system relational database technology, and links with a range of industry standard GIS applications. The combination of powerful data management and GIS technology provides a sophisticated asset management platform with capabilities across the following areas: • Core Asset Register – the storage hub for physical and non physical asset

data.

• Condition Module – retains current condition assessments of the asset stock, including maintaining an asset’s condition history.

• Valuation Module –retains current replacement cost, service life information, unit rates and depreciation schedules.

• Maintenance Management Module – contains maintenance schedules and maintenance task data. This module also records details of the maintenance work performed and the costs and resource usage that occur in executing maintenance tasks.

• Work Management Module – provides a platform for managing the flow of work arising from maintenance requests, customer action requests and fault reports. This module provides a list of current work, provides details of available resources, manages work allocation and reporting on completed tasks.

• Analysis & Reporting Modules – provide tools and reporting capability to interrogate, analyse and report on data within the system.

• Various System Utilities – these provide the means to configure the system, to undertake changes to the core asset registers and to manage the database and user administration. Utilities are also available to import bulk data into and out of the Conquest system.

• GIS Links – the Conquest system links seamlessly with Council’s MapInfo GIS system and its simplified GIS presentation tool; Exponare. The integrated system allows users to interrogate the Conquest system using map based enquiries and to display the resulting data on maps with relative ease. The integration between Conquest and MapInfo can also be used to initiate contextual map displays based on data in the Conquest system.

The Conquest system is widely used by Local Government in South Australia and nationally. The Conquest system was originally developed by Tonkin Engineering, but is now marketed, developed and supported by a separate Adelaide based company. Tonkin retains Development Partner status with Conquest and provides expert asset management advice to the system developers.


APPENDICES

TABLE 3

ROADS

Sealed Roads (Seal)

Seal (Surface) Types:

Description Traffic

Volumes Useful

Life (yrs) Condition at end of life

10mm Asphalt 25 8 10mm Sprayed Seal 20 8 14mm Sprayed Seal 20 8 7mm Sprayed Seal 20 8 10/5mm Two Coat Sprayed Seal 20 8 14/7mm Two Coat Sprayed Seal 20 8 10mm Polymer Modified Sprayed Seal

20 8

10/5mm Polymer Modified Sprayed Seal

20 8

Deep Lift Seal Layer (40mm AC10)

25 8

Sealed Roads (Pavement)

Pavement Types:

Urban Distributor 2000 and upwards

65 8

Rural Distributor 65 8 Urban Collector 700 and

2000 80 8

Rural Collector 80 8

Urban Municipal Local Road 150 and 700

95 8

Rural Municipal Local Road 95 8 Urban 150mm Deep Lift 65 8 Rural 80mm Deep Lift 65 8

Sealed Roads (Formation)

Formation Types:

Urban Distributor - n/a Rural Distributor - n/a Urban Collector - n/a Rural Collector - n/a Urban Municipal Local Road - n/a Rural Municipal Local Road - n/a

Unsealed Roads

Unsealed Roads

Usage Class Materials

Good Average Poor Class 1 – High 10 8 6 Class 2 – Med 14 12 10 Class 3 - Low 16 14 12

Tracks

Tracks TR $0.33 3 8


TABLE 4

BRIDGES

FOOTBRIDGES

Location Structural Notes Useful Life

(Yrs) Condition at

end of life All Footbridges 80 8

VEHICULAR BRIDGES

Location Structural Notes Useful

Life Condition at

end of life Glades Lane Concrete 100 8

Somerset Rd Concrete 100 8

Forbes Rd Concrete/Steel/Timber 60 8

Forreston Rd Concrete 87 8

Posen Rd Concrete 75 8 Corkscrew Rd Concrete 100 8 Kemp road Concrete/Stone 75 8 Oval road Concrete 100 8 Lower Hermitage Rd Concrete 87 8 McVitties Rd Concrete/Stone 97 8 Nether Hill Rd Box Culvert 87 8 Tiers Rd Concrete/Steel 87 8 McLean road Pipe Culvert 90 8 Shanks Road Multi box Culvert 90 8 Sturt Valley Rd Concrete 77 8 Camac Rd Concrete/Stone 72 8 Blocks Road Box Culvert 77 8 Kingsland Rd Timber/Steel/Masonry 62 8 Oakwood Rd Pipe Culvert 77 8 Spoehr Rd Concrete/Steel/Stone 82 8 Watts Gully Rd Concrete/Steel/Stone 67 8 Glover Street Box Culvert 97 8 Pfitzners Road Pipe Culvert 87 8 Alexander Forrest Rd Box Culvert 82 8 Aldgate Valley Road Concrete 92 8 Norsworthy Rd Box Culvert 92 8 Old Carey Gully Road Concrete/Stone 92 8 Cromer Road Box Culvert 80 8 Cyanide Road Box Culvert 82 8 Langley Road Box Culvert 87 8 Wenzel Road Pipe Culvert 77 8 Old Mt Barker Road concrete/Stone/Steel 87 8 Valley Road Multi box Culvert 74 8 Adelaide Gully Road Concrete 87 8 Burfords Hill Road Box Culvert 77 8 Euston Rd concrete/Steel 77 8 Paracombe Rd Pipe Culvert 67 8 Stevens Rd Concrete/Stone 87 8 Burns Rd Concrete 97 8 Burtons Rd Concrete 67 8

BRIDGES


VEHICULAR BRIDGES

Location Structural Notes Useful

Life Condition at

end of life Graeber Rd Concrete/Steel 87 8 Maidstone Rd Box Culvert 77 8 Shillabeer Rd Multi Box Culvert 82 8 Beaumonts Rd Concrete/Steel 91 8 Merchants Rd Concrete/Steel/Stone 82 8 Stentiford Rd Multi box Culvert 87 8 Clisby Road Pipe Culvert 87 8 Walters Road Pipe Culvert 77 8 Pfeiffer Rd Pipe Culvert 90 8 Hunters Road Box Culvert 92 8 Tiers Rd Multi box Culvert 97 8 Onkaparinga Road Concrete/Steel/Timber 52 8 Peacock Road Box Culvert 87 8 Western Branch Road Multi box Culvert 87 8 Gould Road Armco Pipe Culvert 52 8 Ross Rd Multi box Culvert 80 8 Bonython Rd Concrete 87 8 Knotts Hill Rd Concrete/Stone 82 8 Kurla Rd Multi box Culvert 87 8 Post Office Rd Box Culvert 82 8 Ridge Rd Multi box Culvert 92 8 Swamp Rd Concrete 50 8 Knotts Hill Rd Concrete/Stone 87 8 Milan Tce Box Culvert 80 8 Avenue Rd Concrete/Steel/Stone 97 8 Checker Hill Rd Pipe Culvert 86 8 Bridgewater-Carey Gully Road Concrete 96 8 Holland Creek Road Pipe Culvert 55 8 Leslie Road Multi box Culvert 87 8 Muellers Road Multi box Culvert 82 8 Winton Road Multi box Culvert 67 8 Montacute Rd. Pipe Culvert 87 8 Kain Avenue Stone/Timber 62 8 Snows Road Multi box Culvert 87 8

TABLE 5

FOOTPATHS

Asset Type Useful Life Yrs Condition at end of life

Asphalt 30 8

Clay Brick Paved 60 8

Concrete Brick Paved 60 8

Concrete 60 8

Rubble 15 8

Spray Seal 20 8

Pedestrian Ramps 60 8


TABLE 6

RETAINING WALLS

Type Useful Life

(Years) Condition at End of

Life

Concrete Sleeper 70 8

Concrete Wall - Poured 80 8

Concrete Crib Wall 60 8

Dry Stone Wall 50 8

Gabion baskets 60 8

Hardwood Sleeper 40 8

Interlocking blocks 40 8

Metre blocks 80 8

Permapine Sleepers 50 8

Rip Rap bags 40 8

Sprayed Concrete 30 8

Steel Plates/Timber 50 8

Stone Retaining Wall 50 8

TABLE 7

LINE MARKING Capitalised when road is new. Recorded at WDV = $0

Unit Useful Life (Years)

100mm Solid Centre Lin.m 5

100mm Double No Overtaking Line Lin.m 5

100mm Single No Overtaking line Lin.m 5

Prohibited Area (Yellow) Lin.m 5

100mm Approach Line Lin.m 5

100mm Separation Line (3x9m) Lin.m 5

100mm Separation Line (6x6m) Lin.m 5

100mm Edge Line Lin.m 5

450mm Wide Stop Bar Lin.m 5

600mm Wide Stop Bar Lin.m 5

450mmx600mm Give way Blocks $5.13 Lin.m 5

600mmx600mm Give way Blocks Lin.m 5

100mm Perimeter Line Lin.m 5

Arrows (1.7) m2 5

Arrows (4) m2 5

Arrows (6) m2 5

Letters (1.2m height) Each 5

Letters (2.4m height) Each 5

Splays m2 5

Zig Zags Each 5

Railway Crossings m2 5


LINE MARKING


Car park Line Lin.m 5

Safety Bars (Repaint) Each 20

Safety Bars (Install) Each 20

Reflective Pavement Markers Each 20

TABLE 8

GUARDRAILS


W-Beam Guardrail Per m 50

8m MELT (Drum) Terminal End Each 50

4m Trailing (Fish) Terminal End Each 50

TABLE 9

KERBING

Type Useful Life

(yrs) Condition at end of

life Bitumen Rollover 55 8

100mm Concrete Rollover 60 8

150mm Concrete Kerb & Gutter 75 8

Spoon drain (600mm Wide) 60 8

TABLE 10

TRAFFIC CONTROLS


One Way Angled Chicanes Each 60

Speed Humps Each 16

Pedestrian Crossing (line marking only) Each 25

Pedestrian Crossing (signalised) Each 25

Pedestrian Crossing (25kph) Each 25

Traffic Signals Set 25

Pedestrian Refuge Each 60

Parking Protuberance Each 60

Roundabout Each 60

Roadside Steel Reflective Guideposts Each 15


TABLE 11

SIGNAGE

Asset Type Useful Life Yrs

Township Entry Sign (Large) 25

Township Entry Sign (Small) 25

Street Name Signs 25

Tourism Signs (Large) 25

Tourism Signs (Small) 25

Traffic - G Series (Guidance Signage) No through road 15

Trucks use low gear 15

Traffic - D Series (Hazard Signage)

Uni direction hazard marker 15

Uni directional hazard marker 15



Bi directional hazard marker 15


Width markers (L or R) 15

Width markers (L or R) 15

Obstruction marker 15

Chevron alignment marker 15


Traffic - R Series (Regulatory Signage)

Stop 15

Stop 15

Give way 15

Give way 15

Give way 15

Roundabout 15

All traffic turn (L or R) 15

One way 15

Keep left or right 15

Keep left or right 15

No entry 15

No entry 15

No U turn 15

No left (or) right turns 15

No turns 15

Speed restriction 15



Bridge load limit 15

Traffic - R Series (Regulatory Signage) Gross load limit 15

End load limit 15


SIGNAGE

Asset Type Useful Life Yrs

Traffic - T Series (Temporary Warning Signage)

Temporary lateral shift marker 15

Temporary lateral shift marker 15

Traffic - W Series (Warning Signage)

Turn (L or R) 15

Turn (L or R) 15

Reverse Turn (L or R) 15

Reverse Turn (L or R) 15

Curve (L or R) 15

Curve (L or R) 15

Curve (L or R) 15

Curve (L or R) 15

Curve (L or R) 15

Curve (L or R) 15

Reverse Curve 15

Reverse Curve 15

Reverse Curve 15

Winding Road 15

Winding Road 15

Winding Road 15

Hairpin Bend (L or R) 15

Hairpin Bend (L or R) 15

Cross Road 15

Cross Road 15

Cross Road 15


T-Junction 15

T-Junction 15

T-Junction 15

TABLE 12

STREET FURNITURE

Type Useful Life

(yrs) Condition at end of

life Park Bench (Cast Iron/Timber) 25 8

Park Bench (Steel/Timber) 25 8

Park Bench (Timber) 15 8

BUS STOPS

Bus Stop Paving (NO Shelter) 60 8

Bus Stop Paving (Shelter) 60 8

Bus Stop Shelter 30 8


TABLE 13

TABLE 14

BUILDINGS

Description Useful Life

Building - Lobethal Centennial Hall - Theatre 100

Building - AHBTC - AHBTC 5A 100

Building - AHBTC - AHBTC 5B 100

Building - AHBTC - AHBTC 5C 100

Building - AHBTC - AHBTC 5D 100

Building - AHBTC - AHBTC 19 105

Building - 1 Beavis Court - Abandoned Dwelling 105

Building - Aldgate Toy Library - Toy Library 110

Building - Balhannah Hall - Hall 115

Building - Mylor Institute - Hall 115

Building - Montacute Institute - Hall 120

Building - Longwood Hall - Hall 125

Building - Lobethal Centennial Hall - Hall 125

Building - Bridgewater Hall - Hall 125








Building - Norton Summit Post Office - Post Office 125

Building - Halliday Reserve - Dwelling 125

Building - 100 Old Mt Barker Rd - Hall 130

Building - Cherryville Old School House - Former School House 130

Building - Bradwood Park - Changeroom 130

Building - Gumeracha Hall - Hall / library / TVCC 135


Building - Crafers Institute/Tennis Courts - Institute 140

Building - Birdwood Institute - Hall 140

Building - Uraidla Institute - Hall 145

Building - Summertown Institute - Hall 150

Building - Stirling Community Theatre - Hall 150

Building - Woodside Institute - Institute 165

Building - Morialta Barns - Historic barns 165

Building - Lenswood CFS - CFS Station 50

Building - Kersbrook Public Toilets - Shed 50

Building - Kersbrook Public Toilets - Toilets 50

Building - Gumeracha Hall - Toilets 50

Building - Mt Torrens CFS - Shed 50

Building - Mylor CFS - CFS Station 50

Building - Montacute Institute - Toilets 50

Building - Woodside Office - Pergola 50

Building - Woodside Office - Transportable Office 50


BUILDINGS


Building - Woodside Office - Transportable Toilet 50

Building - Woodside Office - Verandah 50

Building - Woodside CFS - CFS Station 50

Building - Uraidla Institute - Shed 50

Building - Woodside Ambulance - Ambulance Station 50

Building - Upper Hermitage CFS - CFS Station 50

Building - Summertown Institute - Toilets 50

Building - Paracombe CFS - Pergola 50

Building - Paracombe CFS - Shed 1 50

Building - Paracombe CFS - Shed 2 50

Building - Norton Summit CFS - CFS Station 50

Building - Birdwood Institute - Shed 50

Building - Grasby Park Scout Hall - Scout Hall 50

Building - Forreston CFS - Shed 50

Building - Cudlee Creek CFS - Shed 50

Building - Crafers Inst/Tennis Courts - Toilets 50

Building - Carey Gully CFS - CFS Station 50

Building - Bridgewater CFS - CFS Station 50

Building - Birdwood Public Toilets - Toilets 50

Building - Bradbury CFS - CFS Station 50

Building - Balhannah Hall - Toilets 50

Building - Balhannah Hall - Youth Centre 50

Building - Aldgate Public Toilets - Toilets 50

Building - Aldgate Meals on Wheels - Meals on Wheels 50

Building - 7 Albert St Gumeracha - Carport 50

Building - 100 Old Mt Barker Rd - Shed 50



Building - Stirling Scout Hall - Carport 50

Building - Stirling Scout Hall - Garage 50

Building - Stirling Scout Hall - Scout Hall 50

Building - Stirling Scout Hall - Shed 50

Building - Stonehenge Reserve - Shelter 50

Building - Stonehenge Reserve - Toilets 50

Building - Steamroller Park - Toilets 50

Building - Mylor Tennis & Netball Courts - Shleter / verandah 50

Building - Mylor Tennis & Netball Courts - Toilets 50

Building - Norman Cole Reserve - Shelter 50

Building - Lenswood Park - Toilets 50

Building - Federation Park2 - Toilets 50

Building - Bushland Park2 - Pergola 50

Building - Federation Park - Tennis Court Shelter 50

Building - Cherryville Tennis Courts - Shelter 50

Building - Aldgate Tennis Club - Shelter 50

Building - Atkinson Reserve - Canteen 50

Building - Atkinson Reserve - Old Canteen 50

Building - Atkinson Reserve - Shelters / verandahs 50

Building - Atkinson Reserve - Toilets 50

Building - Stirling Oval - Toilets 50

Building - Scott Creek Oval - Shelter 50


BUILDINGS


Building - Scott Creek Oval - Toilets 50

Building - Heathfield Oval - Changeroom 50

Building - Heathfield Oval - Shed - Gym 50

Building - Heathfield Oval - Shed - Rotary 50

Building - Heathfield Oval - Toilets 50

Building - Gumeracha Oval - Shed 50

Building - Bridgewater Oval4 - Canteen 50

Building - Bridgewater Oval4 - Changeroom 50

Building - Bridgewater Oval4 - Storage shed 50

Building - Woodside Swimming Centre - Fixed verandahs & shelters

50

Building - Woodside Swimming Centre - Food Storage / verandah 50

Building - Woodside Swimming Centre - Chemical shed / workshop

50

Building - Woodside Swimming Centre - Storage Sheds 50

Building - Woodside Recreation Grounds3 - Oval Toilets 50

Building - Woodside Recreation Grounds3 - Pigeon Clubrooms 50

Building - Woodside Recreation Grounds3 - Shed 50

Building - Woodside Recreation Grounds3 - Shed 50

Building - Woodside Recreation Grounds3 - Shelter 50

Building - Woodside Recreation Grounds3 - Equipment Shed 50

Building - Woodside Recreation Grounds3 - Institute Toilets 50

Building - Woodside Recreation Grounds - Chemical shed 50

Building - Woodside Recreation Grounds - Clubroom verandah 50

Building - Hills Hawks Soccer Ground - Clubroom Verandah 50

Building - Highercombe Golf Links - Toilets 50

Building - Highercombe Golf Links - Workshop 50

Building - Upper Hermitage Tennis Courts - Sheds 50

Building - Tregarthen Reserve - Shelter 50

Building - Tregarthen Reserve - Toilets 50

Building - Tregarthen Reserve - Verandah 50

Building - Aldgate Oval - Playgroup Building 50

Building - Aldgate Oval - Shed 50

Building - Aldgate Oval - Toilets 50

Building - Ashton Oval - Shelters 50

Building - Ashton Oval - Storage Shed 50



Building - Ashton Oval - Toilets 50

Building - Ashton Oval - Toilets 50

Building - Ashton Oval - Verandah 50

Building - Mylor Oval - Shed 50

Building - Mylor Oval - Toilets 50

Building - Bridgewater Oval2 - Bridgewater Public Toilets 50

Building - Johnston Memorial Park - Toilets 50

Building - Johnston Memorial Park - CFS Shed 50

Building - Johnston Memorial Park - Clubroom verandah 50

Building - Johnston Memorial Park - Clubroom verandah / shelter 50

Building - Bridgewater Oval - Toilets 50

Building - Bradwood Park - Toilets 50

Building - Bradwood Park - Verandah 50


BUILDINGS


Building - Mylor Equestrian Park - Clubroom/shed 50

Building - Mylor Equestrian Park - Shed 50

Building - Stirling Community Shop - Stirling Community Shop 55



Building - AHBTC3 - AHBTC 28 55

Building - Mylor Tennis & Netball Courts - Shelter 55

Building - Uraidla Park - Toilets 55

Building - Ashton Oval - Changeroom 60

Building - Scott Creek Oval - Canteen 60

Building - Ashton Oval - Verandah 60

Building - Gumeracha Oval - Changeroom 60

Building - Aldgate Tennis Club - Toilets 60

Building - Birdwood CFS - Shed 60

Building - Gumeracha Hall - CWA Building 60

Building - Upper Sturt CFS - CFS Station 60

Building - Ironbank CFS - CFS Station 60

Building - Pound Reserve - Shed 65

Building - Cherryville Old School House - Shed 65

Building - 7 Albert St Gumeracha - Old Community Centre 65

Building - Woorabinda Reserve - Bunkhouse 65

Building - Woorabinda Reserve - Toilets 65

Building - Aldgate Oval - Hall 70

Building - Woorabinda Reserve - Admin Building 70


Building - Ashton Hall - Verandah 70

Building - Cherryville Old School House - Former School Room 70

Building - Pound Reserve - Shed 70

Building - Woodside RSL Hall - RSL 70








Building - AHBTC3 - AHBTC 27A 75

Building - AHBTC3 - AHBTC 27B 75

Building - AHBTC3 - AHBTC 33E 75








Building - AHBTC3 - AHBTC 33C 75

Building - AHBTC3 - AHBTC 33D 75

Building - AHBTC3 - AHBTC 27C 75

Building - AHBTC3 - AHBTC 27D 75


BUILDINGS


Building - AHBTC3 - AHBTC 27E 75




Building - Ashton Hall - Hall 80

Building - Gumeracha Depot - Chemical shed 80

Building - Gumeracha Depot - Main workshop 80

Building - Gumeracha Depot - Shed 80

Building - Gumeracha Depot - Shed 80

Building - Gumeracha Depot - Sign / storgae shed 80

Building - Gumeracha Depot - Staff amenities 80

Building - Gumeracha Depot - Truck canopy 80

Building - Crafers Retirement Village - Cottages (6) 80

Building - Crafers Institute/Tennis Courts - Clubroom 80

Building - Balhannah Retirement Village - Cottages (7) 80

Building - Balhannah Retirement Village - Shed 80

Building - Bridgewater Retirement Village - Cottages (6) 80

Building - Stirling West Wing Office - Old Stirling Library 80

Building - Norton Summit Office - Offices 80

Building - Stirling Office - Council Offices - East Wing 80

Building - Woodside Library - Library 80

Building - Woodside Retirement Village - Cottages (11) 80

Building - Woodside Retirement Village - Cottages (5) 80

Building - Gumeracha Retirement Village - Cottages (4) 80



Building - Heathfield Depot - Chemical shed 80

Building - Heathfield Depot - Office 80

Building - Heathfield Depot - Shed 80

Building - Heathfield Depot - Shed 80

Building - Heathfield Depot - Staff amenities 80

Building - Heathfield Depot - Vehicle shed 80

Building - Heathfield Depot - Vehicle shed 80

Building - Heathfield Depot - Washdown bay 80

Building - Heathfield Depot - Workshop 80



Building - Nairne Road Offices - Office & Community Centre 80

Building - Lobethal Retirement Village - Carport 80

Building - Lobethal Retirement Village - Cottages (4) 80



Building - Lobethal Centennial Hall - Toilets 80

Building - Mylor Tennis & Netball Courts - Clubroom 80

Building - Melville Park - Clubroom 80

Building - Plantation Reserve Oakbank - Clubroom 80

Building - Stonehenge Reserve2 - Clubroom 80

Building - Stirling RSL - RSL Hall 80

Building - Stirling East Tennis Club - Clubroom 80

Building - Aldgate Tennis Club - Clubroom 80


BUILDINGS


Building - Woodside Office - Bldg 80

Building - Bushland Park2 - Restaurant 80

Building - Tregarthen Reserve - Clubroom 80

Building - Upper Hermitage Tennis Courts - Clubrooms 80

Building - Mylor Oval - Clubroom 80

Building - Ashton Oval - Football Clubroom 80

Building - Bradwood Park - Clubroom 80

Building - Bridgewater Oval - Clubroom 80

Building - Johnston Memorial Park - Football clubrooms 80

Building - Johnston Memorial Park - Tennis Clubrooms 80

Building - Gumeracha Oval - Clubrooms 80

Building - Heathfield Oval - Clubroom 80

Building - Bridgewater Sports Club - Bridgewater Sports Club 80

Building - Stirling Oval - Clubroom 80

Building - Hills Hawks Soccer Ground - Soccer Clubroom 80

Building - Highercombe Golf Links - Clubrooms 80

Building - Woodside Recreation Grounds - Netball Clubrooms 80

Building - Woodside Recreation Grounds3 - Lions Clubrooms 80

Building - Woodside Recreation Grounds3 - Bowls / Cricket / Tennis Clubrooms

80

Building - Woodside Swimming Centre - Pool Admin & Changerooms

80







Building - AHBTC - AHBTC 22E 95




Building - AHBTC - AHBTC 20E 95



Building - Woodside Swimming Centre - Food Storage / Veranda 50

Building - New Stirling Coventry Library 80

Building - Woodside Recreation Grounds3 - Garage Shed 50

TABLE 15


TABLE 16

SPORT & RECREATION

Description Unit Useful Life

Access & Carpark - Asphalt /m2 45

Access & Carpark - Gravel /m2 10

Access & Carpark - Spray Seal /m2 30

Access Road - Asphalt /m2 45

Access Road - Gravel /m2 10

Access Road - Spray Seal /m2 30

Basketball Court ea 30

Basketball Ring ea 15

BBQ ea 15

Bowling Green ea 30

Bowling Green - lighting ea 30

Carpark - Asphalt /m2 45

Carpark - Gravel /m2 10

Carpark - Spray Seal /m2 30

Cricket Nets ea 20

Cricket Pitch - concrete ea 30

Cricket Pitch - turf ea 15

Fencing - 2.1 m high mesh /m 30

Fencing - 3 stand post & wire /m 20

Flood Lighting ea 15

Football Oval - large ea 85

Football Oval - lighting (large/high intensity) ea 30

Football Oval - lighting (small/low intensity) ea 30

Football Oval - mid sized ea 85

Football Oval - small ea 85

Footpath - concrete /m2 60

Irrigation & Drainage - Football Oval ea 50

Irrigation & Drainage - Soccer Oval ea 50

Irrigation System ea 50

Monument ea 80

Netball Courts - concrete ea 30

Netball Courts - lighting ea 30

Paving - clay brick /m2 50

Picnic Shelter ea 20

Picnic Table ea 15

Pool - 25m (incl filtration) ea 60

Pool - Cleaning Equipment ea 10

Pool - Thermal Covers ea 10

Pool - Toddler ea 60

Pool - Wading ea 60

Retaining Wall - Blocks /m2 60


SPORT & RECREATION

Description Unit Useful Life

Rotunda ea 30

Shade Sail ea 15

Skatepark ea 60

Soccer Pitch - large ea 85

Soccer Pitch - lighting (large) ea 30

Soccer Pitch - lighting (small)) ea 30

Soccer Pitch - mid ea 85

Tank - large ea 20

Tank - small ea 20

Tennis Courts - Bitumen ea 30

Tennis Courts - Concrete ea 30

Tennis Courts - concrete 1/2 court ea 30

Tennis Courts - lighting ea 30

Water Recycling System ea 30

TABLE 17

TABLE 18

CEMETERY COMPONENTS RATES

Component Item / Material Measurement

Carpark Rubble sqm

Footpaths

Rubble sqm

Cement Treated Rubble sqm

Asphalt sqm

Concrete sqm

Earth Track sqm

Screenings sqm

Driveway Rubble sqm

Columbarium Walls All types each

Fencing Fence Linear m

Gate each

Drainage

225mm m

300mm m

Ribloc m

SEP each

JB each

Street Furniture Park benches each

Bins each

Shelter All types each

Pergola One each

Shed All each


CEMETERY COMPONENTS RATES

Component Item / Material Measurement

Irrigation

Tap each

Sprinkler each

Control box each

1 Kenton Valley Baptist GUMERACHA

2 Norton Summit Grassy Flats NORTON SUMMIT

3 Norton Summit NORTON SUMMIT

4 Summertown SUMMERTOWN

5 Birdwood General BIRDWOOD

6 Houghton HOUGHTON

7 Kersbrook General KERSBROOK

8 Mt Torrens General MOUNT TORRENS

9 Birdwood Old, Cromer Road Lutheran BIRDWOOD

10 North Gumeracha General GUMERACHA

11 Mt Lofty Bible Christian URAIDLA

12 Montacute MONTACUTE

13 Scott Creek SCOTT CREEK

14 Stirling General ALDGATE

15 Cudlee Creek CUDLEE CREEK

16 Charleston Methodist CHARLESTON

17 Lobethal General LOBETHAL

TABLE 19

TABLE 20

STORMWATER DRAINAGE

Component Measure Useful Life

Pits Single Side Entry Pit Each 80

Double Side Entry Pit Each 80

Junction Box Each 80

Headwall Each 80

Grated Inlet Pit Each 80

Reinforced Concrete Pipe 150mm Concrete Lin.m 100

300mm Concrete Lin.m 100 375mm Concrete Lin.m 100 450mm Concrete Lin.m 100 525mm Concrete Lin.m 100 600mm Concrete Lin.m 100 675mm Concrete Lin.m 100 750mm Concrete Lin.m 100 825mm Concrete Lin.m 100 900mm Concrete Lin.m 100


STORMWATER DRAINAGE

Component Measure Useful Life

Reinforced Concrete Pipe 975mm Concrete Lin.m 100 1050mm Concrete Lin.m 100 1200mm Concrete Lin.m 100 1350mm Concrete Lin.m 100 1500mm Concrete Lin.m 100 1650mm Concrete Lin.m 100 1800mm Concrete Lin.m 100 150mm PVC Lin.m 50

225mm Earthenware (VC) Lin.m 50

225mm PVC Lin.m 50

300mm Ribloc Lin.m 50





525mm Ribloc Lin.m 50 Concrete Box Culvert

225x225 mm Concrete Lin.m 80

300x150 mm Concrete Lin.m 80 300x225 mm Concrete Lin.m 80 300x300 mm Concrete Lin.m 80 375x300 mm Concrete Lin.m 80 450x300 mm Concrete Lin.m 80 750x225 mm Concrete Lin.m 80 525x450 mm Concrete Lin.m 80 525x300 mm Concrete Lin.m 80 600x225 mm Concrete Lin.m 80 600x450 mm Concrete Lin.m 80 750x600 mm Concrete Lin.m 80 750x300 mm Concrete Lin.m 80 825x600 mm Concrete Lin.m 80 825x750 mm Concrete Lin.m 80 900x750 mm Concrete Lin.m 80 900x600 mm Concrete Lin.m 80 900x900 mm Concrete Lin.m 80 1050x525 mm Concrete Lin.m 80 1050x600 mm Concrete Lin.m 80 1050x900 mm Concrete Lin.m 80



1500x1500 mm Concrete / Stone Lin.m 80



1800x1800 mm Concrete / Stone Lin.m 80


STORMWATER DRAINAGE

Component Measure Useful

Life

Proposed Replacement Cost Value

Open Channel 750x500 mm Earth Channel Lin.m 50 $160

800x750 mm Stone Channel Lin.m 80 $335

900x750 mm Earth Channel Lin.m 50 $200


800x600 mm Stone Channel Lin.m 80 $180

800x700 mm Concrete Channel Lin.m 80 $400


Pollutant Devices Trash Rack/GPT Each 50 $30,000.00

TABLE 21

WATER SUPPLY

Component Measure Useful

Life


Pits Single Side Entry Pit Each 80 $1,440.00

Double Side Entry Pit Each 80 $1,680.00

Junction Box Each 80 $1,920.00

Headwall Each 80 $820.00

Grated Inlet Pit Each 80 $1,680.00

Reinforced Concrete Pipe 225mm Lin.m 100 $165.00

300mm Lin.m 100 $165.00

375mm Lin.m 100 $165.00

450mm Lin.m 100 $185.00

525mm Lin.m 100 $210.00

825mm Lin.m 100 $400.00

Concrete Box Culvert 300x150mm Lin.m 80 $185.00

375x225mm Lin.m 80 $280.00

450x300mm Lin.m 80 $280.00

Open Channel Concrete Rectangular Lin.m 80 $1,400.00

Concrete Trapezoidal Lin.m 80 $1,400.00


TABLE 22

COMMUNITY WASTE WATER MANAGEMENT (CWMS)

Component Measure

Current Replaceme

nt Cost Value

Useful Life


Pits

Manholes each $9,625.00 80 $10,760.75

Flushing Points each $367.67 70 $411.06

Connection Point (100mm) each $530.00 70 $592.54

Connection Point (150mm) each $540.00 70 $603.72

Air/Scour Valves each - 50 $1,000.00

Stop Valves each - 50 $1,500.00

Gravity Drains (Sewer Grade PVC)

100mm per linear metre $132.50 70 $150.00



Rising Mains (Pressure Grade PVC)

30mm per lineal metre $20.00 50 $65.00





Pump Stations Components

Sump Pump each $25,000.00 50 $27,950.00

Valve Chamber each $5,000.00 50 $5,590.00

Pump Controller each $20,000.00 50 $22,360.00

Pumps

Grundfos AP30 Mt Torrens $1,650.00 15 $1,672.00

Flygt DP3057 Mt Torrens $1,760.00 15 $1,909.00

Mono CAB12 Stirling $4,015.00 15 $4,724.00

Mono CEO42 Stirling $6,506.00 15 $6,805.28

ROTO RMAA661-R2C Woodside $12,650.00 15 $13,231.90

Flygt CP3057 Woodside $1,760.00 15 $1,909.00

Flygt DP3057 Verdun $1,760.00 10 $1,909.00

Flygt CP3057 Verdun $1,760.00 10 $1,909.00

Flygt MP3127 Kersbrook $4,950.00 10 $5,177.70

Flygt DP3057 Charleston $1,760.00 10 $1,909.00

Flygt CP3045 Birdwood $1,100.00 10 $1,518.00

Mono LL11 Birdwood $5,000.00 10 $5,590.00

Treatment Ponds

Clay Liner per m2 $8.25 20 $9.22

HDPE Liner per m2 $8.25 20 $10.50

Earthworks per m3 $16.50 100 $18.45


TABLE 23

LIBRARY ASSET STOCK

Component Measure Current

Replacement Cost Value

Useful Life


Books Per item / set Expensed Expensed Expensed Paperbacks Per item / set Expensed Expensed Expensed Talking Books / CD’s Per item / set Expensed Expensed Expensed Videos / DVD’s Per item / set Expensed Expensed Expensed Audio Cassette Per item / set Expensed Expensed Expensed

TABLE 24

PLANT & EQUIPMENT



Useful Life


Heavy Vehicles Per item <$300k 6.66 <$300k Light Vehicles Per item <$50k 10 <$50k

Equipment (Minor) Per item <$30k 5 <$30k Office Furniture Per item <$50k 5 <$50k Library Furniture Per item <$50k 5 <$50k

TABLE 25

INTANGIBLE ASSETS



Useful Life


Software Licences Licence / Suite 3 – 5 Patents / Trademarks Certificate ~ Intellectual Property Hours / Invoice 3 – 5 Capitalised Labour Timesheets 3 – 5

Database Hours / Invoice ~


TABLE A

FACTORS INFLUENCING AN ASSETS OVERALL PERFORMANCE

1 Adelaide Hills Council Strategic Management Plan 2008 – 2011

2 State Transport Master Plans & Regional Transport Master Plans

3 Compliance with Legislative requirements

4 Australian Standards

5 Customer Expectations

6 Geographic Limitations

7 Demographic Changes

8 Commercial / Industrial Changes

9 Climate Change

10 Risk Management


TABLE B

ASSET MEASURES DEFINED

Asset Class Method Mesure

Roads

Segment length – Urban 500 m Segment length – Rural 1,000 m

Natural segment length Intersection Road end

Line Marking – centre line Linear metre / 100mm Line Marking – stop bar and giveway blocks

Linear metre / 450 - 600mm

Line Marking – railway crossings Area (m2) Line Marking – letters Item Line Marking – reflective pavement markers

Item

Traffic Signage Item

Bridges Vehicular Bridge structure Item Footbridge structure Item Traffic Signage Item

Footpaths



Design type Retaining Walls Retaining Wall structure Item

Guardrails Guardrail Length (m) Terminal End (Drum, Fish) Item

Kerb & Guttering



Design type

Traffic Controls

Chicanes / speed humps Item Pedestrian Crossings Item Traffic Signals Per set (2) Pedestrian Refuge Item Parking Protuberance Item Roundabout Item Reflective Guidepost Item

Street Furniture

Park Bench Seats Item Information signs Item Bike Racks Item Dog waste dispenser / bins Item Fences & Rails Item

Land Area of Land Area (m2) Car Parks Area (m2)

Buildings Floor Area Area (m2) Parks & Reserves Area of Land Area (m2) Sports & Recreation Area of Land Area (m2) Playgrounds Individual component Item


ASSET MEASURES DEFINED

Asset Class Method Mesure

Monuments Monument Item

Cemeteries

Car Park Area (m2) Footpaths Area (m2) Driveway Area (m2) Columbarium Walls (Plinths) Item Fencing / Gate Linear metre / Item Drainage Length (m) Street Furniture Item Shelter Item Pergola Item Shed Item Irrigation Item

TV Transmitter Transmitter Whole Unit Item

Stormwater Drainage

Pits Item Reinforced Concrete Pipe Linear metre Concrete Box Culvert Linear metre Open Channel Linear metre Pollutant Devices Item

Water Supply

Segment length Pipe length Flushing point / manhole Node Pump Station (individual components)

Item

CWMS

Segment length Pipe length Flushing point / manhole Node Pump Station (individual components)

Item

Library Resources

Audio Visuals Item Pack

Books Item Pack

DVD’s Item Pack

CD’s Item Pack

Plant & Equipment Individual component Item Furniture & Fittings Individual component Item

Software & Licences Individual component Item

Suite Version


Worked Example

ASSET REVALUATION

Details Relating to Re-valued Asset

Year Acquired 2008

Historic Cost $100,000.00

Depreciation Rate 10yrs Expected Useful life

At end of 2 years (2010)

Historical Cost $100,000.00 Based on invoice plus related capitalised costs at date of acquisition

Depreciation Expensed $20,000.00 (i.e. ($100,000.00 / 10yrs) x2 years)

Accumulated Depreciation ($20,000.00)

Written Down Value (WDV)

$80,000.00 Historical cost less Accumulated Depreciation

Asset Valuation (new WDV)

$90,000.00 Based on independent review

Revaluation Incremental $10,000.00 Calculated as per Valuation Models below.

Current Replacement Cost $120,000.00 Market assessment

Accumulated Depreciation required

($30,000.00) Calculated as per Valuation Models below.

Revaluation $90,000.00

Valuation Models

Cost Model

Revaluation Incremental

Revaluation Model

Historical Cost (Gross Carrying Amount)

$100,000.00 $12,500.00 $112,500.00

Accumulated Depreciation ($20,000.00) ($2,500.00) ($22,500.00)

Written Down Value $80,000.00 $10,000.00 $90,000.00

AASB 116 35 a: Accumulated Depreciation is restated "PROPORTIONATELY" with the change in Gross Carrying Amount so that the Carrying Amount = Re-valued Amount.

Cost Base increased by Current Replacement Cost – Historical Cost ($112,000.00-$100,000.00) and Accumulated Depreciation increased from ($20,000.00) to ($22,500.00) accordingly.


Entries to Account for Revaluation

DR

Fair Value Increment

$12,500.00

CR

Accumulated Depreciation

($2,500.00)

CR

Asset Revaluation Reserve (ARR)

($10,000.00)

At End of Revaluation

Historical Cost $100,000.00

Fair Value Increment $12,500.00

Accumulated Depreciation (Cost)

($20,000.00)

Accumulated Depreciation (Re-valued)

($22,500.00)

WDV & FV $90,000.00

Subsequent Entries

DR

Depreciation Expense (Cost)

$10,000.00

DR

Depreciation Exps (Re-valued)

$1,563.00 8yrs remaining on $12,500, Depreciation Rate = 12.5%

DR

Accumulated Depreciation (Cost)

($10,000.00)

CR

Acc. Depreciation (Re-valued)

($1,563.00)


ANNEXURES ATTACHMENTS & REFERENCE MATERIALS

1. Refer to Table 1 (Council comparison analysis).

2. Refer to Table 2 (Account structure methodology).

3. Accounting Standards

• AASB 108 –Changes in Accounting Estimates and Errors • AASB 116 – Property, Plant & Equipment • AASB 136 – Impairment of Assets • AASB 138 – Intangible Assets • AASB 1031 – Materiality

4. Coalface - LGA Compliance Reporting (Note 7)

5. Procedures Manual – Accounting for Fixed Assets and the Development of Capital Works

audit committee notice of meeting - ahc home€¦ · 29/10/2012 7.3 internal audit programme...

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