Roads - Asset Management Plan · SMT MF - KKS IO - JS MI - BH 2 21 November 2016 Elected Members...

Roads - Asset Management Plan

S2_V1 Capital - Forward Estimates Works Program

Endorsed May 2017

Reviewed December 2018

CITY OF VICTOR HARBOR – ROADS ASSET MANAGEMENT PLAN

Document Control

Document ID: 59.299.120815 nams.plus2 amp template v2

Rev No Date Revision Details Author Reviewer Approver1 November 2016 Asset Plan & Expenditures

Roads S2_V1 Capital Works ProgramDEIS - GS DEIS - GS

SMTMF - KKSIO - JSMI - BH

2 21 November2016

Elected Members Workshop – Cancelled DEIS

3 5 December2016

Finance Audit Committee DEIS AuditCommittee

4 6 December2016

Elected Members Workshop DEIS EM

5 9 December2016

Adjust Capital New & Renewal ProjectsRe-Model

DEIS

6 January 2017 Public Consultation DEIS

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

DEIS

8 1 May 2017 Finance Audit CommitteeResolution No. AC212017

That the Audit Committee recommends:

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

That the Infrastructure Asset Management Plansas presented are incorporated into Council's LongTerm Financial Plan.

DEIS FinanceAuditCommittee

9 22 May 2017 Ordinary Council MeetingResolution No. OC2682017

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

DEIS Council Council

10 December 2018 Review & Amend Condition Assessment / ForwardEstimate Works Program

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

SMT

© Copyright 2012 – All rights reserved.

The Institute of Public Works Engineering Australia.

www.ipwea.org.au/namsplus


Table of Contents1. Executive Summary 5

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

2. Introduction 72.1 Background 72.2 Goals and Objectives of Asset Management 82.3 Plan Framework 92.4 Core and Advanced Asset Management 112.5 Community Consultation 11

3. Levels of Service 113.1 Customer Research and Expectations 113.2 Strategic and Corporate Objectives 123.3 Legislative Requirements 133.4 Current Levels of Service 143.5 Desired Levels of Service 17

4. Future Demand 204.1 Demand Drivers 204.2 Demand Forecast 204.3 Demand Impact on Assets 204.4 Demand Management Plan 244.5 Asset Programs to meet Demand 24

5. Lifecycle Management Plan 255.1 Background Data 255.2 Infrastructure Risk Management Plan 315.3 Routine Operations and Maintenance Plan 315.4 Renewal/Replacement Plan 355.5 Creation/Acquisition/Upgrade Plan 375.6 Disposal Plan 395.7 Service Consequences and Risks 39


6. Financial Summary 406.1 Financial Statements and Projections 406.2 Funding Strategy 446.3 Valuation Forecasts 446.4 Key Assumptions made in Financial Forecasts 466.5 Forecast Reliability and Confidence 46

7. Plan Improvement and Monitoring. 477.1 Status of Asset Management Practices 477.2 Improvement Program 497.3 Monitoring and Review Procedures 497.4 Performance Measures 49

8. References 50

9. Appendices 51Appendix A Maintenance Response Levels of Service 52Appendix B Projected 10 year Capital Renewal and Replacement Works Program 53Appendix C Projected 10 year Capital Upgrade/New Works Program 60Appendix D Budgeted Expenditures Accommodated in LTFP 67Appendix E Gifted Assets 2010 – 30 June 2018 68Appendix F Abbreviations 72Appendix G Glossary 73

CITY OF VICTOR HARBOR – ROADS ASSET MANAGEMENT PLAN Page 5 of 78

1. Executive SummaryContextCouncil provides a road network in partnership withthe State Government to enable a safe, wellmaintained, fit for purpose transport access inaccordance with Councils service delivery objective.

The Road services cannot be provided without theproper construction and maintenance of thesupporting assets. The renewal and maintenance ofthese assets is critical to successful servicedelivery..The road network comprises:

Road Seal Road Pavement (sealed) Road Pavement (unsealed)

These infrastructure assets have a replacementvalue of $105,486,000

What does it Cost?The projected outlays necessary to provide theservices covered by this Asset Management Plan(AM Plan) includes operations, maintenance,renewal and upgrade of existing assets over the 10year planning period is $29,555,000 or $2,955,000on average per year.

Estimated available funding for this period is$28,944,000 or $2,894,000 on average per yearwhich is 98% of the cost to provide the service. Thisis a funding shortfall of $61,000 on average peryear. Projected expenditure required to provideservices in the AM Plan compared with plannedexpenditure currently included in the Long TermFinancial Plan are shown in the graph below.

What we will doWe plan to provide Road services for the following:Operation, maintenance, renewal and upgrade ofPavement and Seal to meet service levels set inannual budgets.

Carry out annual re-seals and pavement structuralrepairs that align with our latest conditionassessments of road pavement and seals within the10 year planning period.

What we cannot doWe do not have enough funding to provide allservices at the desired service levels or provide newservices. Works and services that cannot beprovided under present funding levels are: Bitumen seal rural unsealed roads Manage the creation of new assets

Managing the RisksThere are risks associated with providing theservice and not being able to complete all identifiedactivities and projects. We have identified majorrisks as:

Surface condition (potholing) Surface Roughness Corrugations (unsealed roads)

We will endeavour to manage these risks withinavailable funding by:

Action Plan Understand the ongoing costs through the

audit committee & council

Confidence LevelsThis AM Plan is based on high level of confidenceinformation.The Next StepsThe actions resulting from this asset managementplan are:

Review Works Program Ongoing review of service levels Advise audit committee Advise Council Annually review useful lives


Questions you may have

What is this plan about?This asset management plan covers theinfrastructure assets that serve the City of VictorHarbor community’s road’s needs. These assetsinclude both sealed and unsealed roads throughoutthe community area that enable people to travel byvehicle in a safe manner.

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

An asset management plan details informationabout infrastructure assets including actionsrequired to provide an agreed level of service in themost cost effective manner. The plan defines theservices to be provided, how the services areprovided and what funds are required to provide theservices.

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

Many of these assets are approaching the lateryears of their life and require replacement, servicesfrom the assets are decreasing and maintenancecosts are increasing.Our present funding levels are insufficient tocontinue to provide existing services at currentlevels in the medium term.

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

accurately records the asset inventory, howassets are performing and when assets are notable to provide the required service levels,

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

3. Identifying and managing risks associated withproviding services from infrastructure,

4. Making trade-offs between service levels andcosts to ensure that the community receivesthe best return from infrastructure,

5. Identifying assets surplus to needs for disposalto make saving in future operations andmaintenance costs,

6. Consulting with the community to ensure thatroad services and costs meet communityneeds and are affordable,

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

8. Seeking additional funding from governmentsand other bodies to better reflect a ‘whole ofgovernment’ funding approach to infrastructureservices.

What happens if we don’t manage theshortfall?It is likely that we will have to reduce service levelsin some areas, unless new sources of revenue arefound. For roads, the service level reduction mayinclude a lower standard of road that requires higherlevels of maintenance due to a longer renewalperiod.

What can we do?We can develop options, costs and priorities forfuture road services, consult with the community toplan future services to match the community serviceneeds with ability to pay for services and maximisecommunity benefits against costs.

What can you do?We will be pleased to consider your thoughts on theissues raised in this asset management plan andsuggestions on how we may change or reduce theroads mix of services to ensure that the appropriatelevel of service can be provided to the communitywithin available funding.


2. Introduction2.1 Background

This asset management plan is to demonstrate responsive management of assets (and servicesprovided from assets), compliance with regulatory requirements, and to communicate fundingneeded to provide the required levels of service over a 20 year planning period.The asset management plan follows the format for AM Plans recommended in Section 4.2.6 of theInternational Infrastructure Management Manual1.The asset management plan is to be read with the organisation’s Asset Management Policy, AssetManagement Strategy and the following associated planning documents:

Community Plan 2036 and Strategic Directions 2016-2020 Long Term Financial Plan (LTFP) Victor Harbor Urban Growth Strategy Past Population Growth & Future Projections Report 2005 Victor Harbor Traffic Management Strategy 2005 Victor Harbor Coastal Management Study 2013

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

Table 2.1: Assets covered by this Plan

Asset Category Dimension Replacement ValueSealed Road Surface 260 km $26,692,678.80Sealed Road Pavement Base 260 km $48,951,677.70Sealed Road Pavement Subbase 260 km $20,983,683.74Total $96,628,040.24Unsealed Road Pavement Base 122 km $6,199,946.59Unsealed Road Pavement Subbase 122 km $2,657,934.79Total $8,857,881.38TOTAL 382 km $105,485,921.62

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

Table 2.1.1: Key Stakeholders in the AM Plan

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

Allocate resources to meet the organisation’s objectives in providingservices while managing risks,

Ensure organisation is financial sustainable.Chief Executive Officer Driver of council plans and directionCommunity Consumers of serviceVisitors Consumers of serviceManager Infrastructure Capital Works Program

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


Manager Finance Long Term Financial Plan & BudgetsManager Operations Capital Works and Maintenance Programs

Our organisation’s organisational structure for service delivery from infrastructure assets is detailedbelow:

2.2 Goals and Objectives of Asset Management

The organisation exists to provide services to its community. Some of these services are providedby infrastructure assets. We have acquired infrastructure assets by ‘purchase’, by contract,construction by our staff and by donation of assets constructed by developers and others to meetincreased levels of service.

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

Providing a defined level of service and monitoring performance, Managing the impact of growth through demand management and infrastructure investment, Taking a lifecycle approach to developing cost-effective management strategies for the long-

term that meet the defined level of service,


Identifying, assessing and appropriately controlling risks, and Having a long-term financial plan which identifies required, affordable expenditure and how

it will be financed.2

2.3 Plan Framework

Key elements of the plan are:

Levels of service – specifies the services and levels of service to be provided by the organisation,Future demand – how this will impact on future service delivery and how this is to be met,Life cycle management – how we will manage our existing and future assets to provide definedlevels of service,Financial summary – what funds are required to provide the defined services,Asset management practices,Monitoring – how the plan will be monitored to ensure it is meeting the organisation’s objectives,Asset management improvement plan.

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

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


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


2.4 Core and Advanced Asset Management

This asset management plan is prepared as a ‘core’ asset management plan over a 20 year planningperiod in accordance with the International Infrastructure Management Manual3. It is prepared tomeet minimum legislative and organisational requirements for sustainable service delivery and longterm financial planning and reporting. Core asset management is a ‘top down’ approach whereanalysis is applied at the ‘system’ or ‘network’ level.

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

2.5 Community Consultation

This ‘core’ asset management plan is prepared to facilitate community consultation initially throughfeedback on public display of draft asset management plans prior to adoption by the Council. Futurerevisions of the asset management plan will incorporate community consultation on service levelsand costs of providing the service. This will assist the Council and the community in matching thelevel of service needed by the community, service risks and consequences with the community’sability and willingness to pay for the service.

3. Levels of Service3.1 Customer Research and Expectations

Community Consultation - RoadsCommunity consultation was undertaken form Friday 21 March 2014 to Friday 11 April 2014.

The number of responses received (approximately 63) is below what would normally be deemed asa valid sample size of the population (i.e. 5% or 715 in total), notwithstanding this however the resultsprovide some indications and highlight potential areas for improvement.

The following summarises the responses to key questions provided by residents and members ofthe community who participated in the survey, refer to table 3.1

Service Levels and StandardsAn assessment against customer request profiling (e.g. volumes by request types; conclusivehandling of outstanding requests; aged profile of requests, etc) is an area that will provide furthervalidation in this dimension.

From an effectiveness and efficiency perspective, a detailed review of Roads’ activities andprocesses will also contribute to the development and validation of future and optimum levels ofservice.

3 IPWEA, 2011, IIMM.


Table 3.1: Community Satisfaction Survey Levels

Community Consultation – Roads*

Level of Satisfactionwith Condition of

Victor HarborRoads?

(Sealed & Unsealed)

Level of Satisfactionwith Levels of

Service?

Accept a Decreasein Service Levels?

Pay more toMaintain or HaveHigher Service

Levels?

Road Rates $ Valuefor Money?

Positive Improve Positive Improve Yes No Yes No Positive Improve

65 36 33 19 2 50 8 43 26 27

64.4% 35.6% 63.5% 36.5% 3.8% 96.2% 15.7% 84.3% 49% 50.1%

Total Responses =101

Total Responses =52

Total Responses =52

Total Responses =51

Total Responses =53

* Notes: Summarised and aggregated results from Survey Response Summary Positive results = aggregate of Strongly Agree; Agree and Neither Agree nor Disagree categories Improve results = aggregate of Disagree and Strongly Disagree categoriesOverall, the level of satisfaction (with Council’s Roads) can be considered to be above the averagewhen compared to the outcomes of community satisfaction surveys across municipalities wheretraditionally lower records of satisfaction are recorded.

In terms of perceptions of value for money (i.e. % of rates spent on Roads), there is a mixed viewpointwith almost an almost equal level of responses received ranging from Strongly agree to StronglyDisagree categories.

The organisation uses this information in developing its Strategic Plan and in allocation of resourcesin the budget. A service review on roads is currently being undertaken to gauge the communities’opinion on our current service standards and their expectations.

3.2 Strategic and Corporate Objectives

The Victor Harbor Community Plan 2036 will help shape the future of Victor Harbor for the next 20years. It highlights the opportunities that have shaped our thinking and describes in broad terms howwe plan to achieve our vision - A city that offers opportunity and lifestyle.

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

Objective 1 - Healthy environments

Objective 2 - Attractive lifestyle and inclusive community

Objective 3 - A thriving local economy

Objective 4 - Services and infrastructure supporting the community

Objective 5 - An innovative Council empowering the community


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

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

Goal Objectives

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

Objective 1 - Healthy environments

Objective 2 - Attractive lifestyle and inclusive community

Objective 3 - A thriving local economy

Objective 4 - Services and infrastructure supporting thecommunity

Objective 5 - An innovative Council empowering the community

The Council will exercise its duty of care to ensure public safety in accordance with the infrastructurerisk management plan prepared in conjunction with this AM Plan. Management of infrastructure risksis covered in Section 5.2.

3.3 Legislative Requirements

We have to meet many legislative requirements including Australian and State legislation and Stateregulations. These include:

Table 3.3: Legislative Requirements

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

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

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

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

Australian Road Rules and RoadSafety Act

Set of model road rules developed by the National Road TransportCommission (NRTC) which form the platform for State and Territory road rulesacross Australia. The first edition of the Rules was published on 19 October1999, and marked a milestone in road safety policy and legislation acrossAustralia.

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

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

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

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

AAS27 Sets out responsibilities of local government for maintaining accountingstandards.


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

3.4 Current Levels of Service

We have defined service levels in two terms.

Community Levels of Service measure how the community receives the service and whether theorganisation is providing community value.

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

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

Technical Levels of Service - Supporting the community service levels are operational or technicalmeasures of performance. These technical measures relate to the allocation of resources to serviceactivities that the organisation undertakes to best achieve the desired community outcomes anddemonstrate effective organisational performance.

Technical service measures are linked to annual budgets covering:

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

Maintenance – the activities necessary to retain an asset as near as practicable to anappropriate service condition (e.g. road patching, unsealed road grading, building andstructure repairs),

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

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

Service and asset managers plan, implement and control technical service levels to influence thecustomer service levels.4

4 IPWEA, 2011, IIMM, p 2.22


Our current service levels are detailed in Table 3.4.

Table 3.4: Current and Desired Service Levels (Sealed Roads)

KeyPerformance

Measure

Level of ServiceObjective

PerformanceMeasure Process

Current Level ofService

Optimal Level ofService

COMMUNITY LEVELS OF SERVICEQuality Roads are smooth Customer service

requests relating toroughness

2011 - 22012 - 32013 - 2

<3/yr.

Function Accessible at alltimes

Customer servicerequests relating tonon-access

2011 - 02012 - 02013 - 0

<0/yr.

Capacity(Utilisation)

Capacity is matchedto need (roads/streetsare appropriate forusage)

Customer servicerequests related toover or under capacity

2011 – 1 (undercapacity)2012 – 1 (undercapacity)2013 – 1 (undercapacity)

<0/yr.

TECHNICAL LEVELS OF SERVICEOperations Servicing and

management –streets are clean

Street sweepingfrequency

3 times/year or asneeded (storm)

3 times/year or asneeded (storm)

Street lighting tousers needs

Compliance withAustralian Standards

100% 100%

Budget fy 2012/13 Street sweeping:$77,000Street lighting:$245,000

Street sweeping: AnnualCPI increaseStreet lighting: AnnualCPI increase

Maintenance Pothole repairs Customer servicerequests relating topotholes

2012 - 62014 - 4

<5/year

Budget Total: $250,000 Total: $250,000Cost effectiveness Budget 2010/11 - $236,770

$921 /km2011/12 - $196,075$763 /km2012/13 - $272,445$1,060 /km

2013/14 - $250,000increased annually byabout CPI

Renewal Reseals Useful life ofinfrastructure assets

Sealed surfacesresealed at about20 years

Sealed surfaces resealedat 16 years

Condition weighting ofsealed and unsealedpavements

27% of asset valuebeing poor/verypoor

<25%


Upgrades Streets/roads areconstructed to meetusers needs

Percentage ofdwellings alongsealed roads;Traffic volume;Road hierarchy;Other.

Refer unsealedroads managementplan

Refer unsealed roadsmanagement plan

Table 3.4: Current and Desired Service Levels (Unsealed Roads)

KeyPerformance

Measure

Level of ServiceObjective

PerformanceMeasure Process

Current Level ofService

Optimal Level ofService

COMMUNITY LEVELS OF SERVICEQuality Provide smooth all

weather accessCustomer servicerequests relating toroughness

1/year <1/year

Function Access is available atall times

Customer servicerequests relating tonon-access

0/year 0/year

Capacity(Utilisation)

Street/roads areappropriate for usage

Customer servicerequests relating toroad capacity

1/year 1/year

TECHNICAL LEVELS OF SERVICEOperations Servicing and

managementAnnual condition anddefects inspection

Yearly Yearly

Maintenance Grading of unsealedroads

Average gradingfrequency (subject tosuitable weather)

Collectors 2-3/yearLocal 1 to 2/year

Unsealed roads arenot graded unlessthere is a need.

Collectors 1-2/yearLocal 1-2/year

Unsealed roads are notgraded unless there is aneed.

Cost effectiveness($ / km / yr.)

$240,000 annualbudget124km unsealedroad$1,935/km

$240,000 increase byannually by CPI

Renewal Resheeting of gravelroads

Useful life of sheetedpavement assets

15 years @3.0km/year2015/16 budget -$140,000

15 years @ 8.3km /yrAnnual budget $300,000

Budget2015/16 - $140,000

Collector: $60,000Local: $80,000Total - $140,000

Collectors: $60,000Local: $80,000Total - $140,000


3.5 Desired Levels of Service

Indications of desired levels of service are obtained from community consultation/engagement. Theasset management planning process includes the development of 2 or 3 scenarios to develop levelsof service that are financially sustainable.

Assets not maintained by Council

There are a number of assets associated with the roadway for which Council is not the responsiblemaintenance authority. These include:

Vehicle crossovers and driveways for that portion of a vehicle crossing, other than thefootpath, located between the carriageway and the property boundary is the responsibility ofthe adjoining property owner to maintain.

Nature strips and infill areas within urban areas which are those residual areas between theedge of the road or back of the kerb and the property boundary not occupied by the pathwayand private road crossings. The responsibility for maintenance of grassed areas and footpathverges rests with the adjoining property owner.

Single property stormwater drains that are constructed within the reserve from the propertyboundary to a discharge outlet in the kerb or into the drain. They are there to benefit theproperty and as such are the responsibility of the owner of the property being served tomaintain.

Private or illegal landscaping works on the road reserve that are not in accordance with anyCouncil policy on such landscaping or have a potential of causing obstruction orinjury/damage to pedestrian or traffic movement.

Street lighting (Standard) – maintenance of all utility timber and concrete power poles is theresponsibility of power companies however maintenance of decorative poles in streetscapesis a council responsibility. Council is responsible for the cost of operating the street lightingservice on local road reserves and contributes to the cost of lighting on arterial roads.

Bridges/culverts/overpasses – some may be maintained by the Department of PlanningTransport & Infrastructure (DPTI) and some are by agreement with the adjoining Council.

Private roads driveways, laneways and car parks (Common Property) associated with privatedevelopments.

Rail crossings and associated structures (bridges) are maintained by the Rail authority.

Service Authority temporary/permanent reinstatements to the road and pathways and otherroad reserve assets organised by the authority directly.

Service Authorities Assets - Utility assets such as service pits (communications, water,sewerage, gas, electricity).

Crown and Service Authority Land/Easements – unless specified.


State Arterial Roads managed by the Department of Planning, Transport & Infrastructurecomprising of the following roads within the City of Victor Harbor:

o Victor Harbor Road (Adelaide Road)

o Port Elliot Road

o Hindmarsh Road

o Torrens Street

o Victoria Street

o George Main Road

o Inman Valley Road

o Hindmarsh Tiers Road


Map showing the Department of Planning, Transport & Infrastructure detailed road network markedin Red.


4. Future Demand4.1 Demand Drivers

Drivers affecting demand include population change, changes in demographics, seasonal factors,vehicle ownership rates, consumer preferences and expectations, technological changes, economicfactors, agricultural practices, environmental awareness, etc.

4.2 Demand Forecast

The present position and projections for demand drivers that may impact future service delivery andutilisation of assets were identified and are documented in Table 4.3.

4.3 Demand Impact on Assets

The impact of demand drivers that may affect future service delivery and utilisation of assets areshown in Table 4.3.

Table 4.3: Demand Drivers, Projections and Impact on Services

The Department of Planning, Transport and Infrastructure (DPTI) recently released the officialpopulation projections for local government areas across the State based on the 2011 Censusreport.

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

Table 1: ABS Population

2006 CensusProjections

2011 CensusProjections

2016 Victor Harbor base population – 14,670

2016 16,171 15,6072021 17,673 17,3192026 19,343 19,2042031 21,231

These figures indicate that Victor Harbor’s population is not expected to grow as quickly as initiallythought. Of particular note is the significant reduction in population growth anticipated between 2011and 2016, which when projected over subsequent five-year periods, results in a slightly lowerpopulation for the City by 2026 (by 139 persons or 0.8%). The number of people aged 65 and overwas projected to be in the order of 35.5% of the total population by 2026. The most recent projectionsindicate that by 2031, the number of people aged 65 and over in Victor Harbor will make up nearly40% of the total population.

Demand drivers Present position Projection Impact on services

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


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

The increase in population of1.5% per annum is expectedto continue in the built uparea of the city rather than inthe rural areas.

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

Climate Change Coastal Erosion Sea Level Rise – 3mm/year Before year 2050 Sea levelinundation is likely to showsome impact on Councilsinfrastructure. Refer to 2013AWE Coastal ManagementStudy.

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




4.4 Demand Management Plan

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

Non-asset solutions focus on providing the required service without the need for the organisation toown the assets and management actions including reducing demand for the service, reducing thelevel of service (allowing some assets to deteriorate beyond current service levels) or educatingcustomers to accept appropriate asset failures. Examples of non-asset solutions include providingservices from existing infrastructure such as aquatic centres and libraries that may be in anothercommunity area or public toilets provided in commercial premises.

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

Table 4.4: Demand Management Plan Summary

Demand Driver Impact on Services Demand Management Plan

Development of newresidentialsubdivisions

Can affect future capacityand utilisation requirements To meet requirements of township development

plans.

Sealing of unsealedroads

Increased service level Utilisation and demand.

Black Spot/SafetyImprovement Plan

Reduces risk associatedwith major crash injury

Upgrades of network to improve road user safety –to be developed further within the next reviewperiod.

4.5 Asset Programs to meet Demand

The new assets required to meet growth will be acquired free of cost from land developments andconstructed/acquired by the organisation. New assets constructed/acquired by the organisation arediscussed in Section 5.5. The cumulative value of new contributed and constructed asset values aresummarised in Figure 1.


Figure 1: Upgrade and New Assets to meet Demand

Acquiring these new assets will commit the organisation to fund ongoing operations, maintenanceand renewal costs for the period that the service provided from the assets is required. These futurecosts are identified and considered in developing forecasts of future operations, maintenance andrenewal costs in Section 5.

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

5.1 Background Data

5.1.1 Physical parameters

The assets covered by this asset management plan are shown in Table 2.1.

Sealed Roads Surface 260 kmSealed Road Pavements 260 kmUnsealed Road Pavements 122 km

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


Figure 2: Asset Age Profile

5.1.2 Asset capacity and performance

The organisation’s services are generally provided to meet design standards where these areavailable.

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

Table 5.1.2: Known Service Performance Deficiencies

Location Service Deficiency

Road Surfacing Lag in expenditure during the 1990’s has led to a backlog of workrequired and this has resulted in a spike in expenditure arising withinthe next 10 years, which we are now trying to address with anappropriate increase in annual resealing and pavement structurerepairs. This lag has meant a drop in service level achievement dueto increasing roughness and failure of some pavements.

Road Pavements The lag in expenditure created during the 1990’s has also impactedon pavement condition as seals have failed and moisture infiltrationoccurred together with traffic changes. Again a service level decreasehas required greater financial input to address the shortfall.

The above service deficiencies were identified from the results of the road condition assessmentsurveys undertaken during financial year 2017-18

5.1.3 Asset condition

Condition is monitored in accordance with methods developed by the Department of Planning,Transport and Infrastructure which included measurement of key attributes which were missing fromother systems in use and yet which represented the actual condition of the road assets better. The


systematic approach was also in line with procedures outlined in the International InfrastructureManagement Manual (IIMM).

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

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

Refinements are continuing on the road asset register database.

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

Fig 3: Asset Condition Profile

Condition CRC ($'000) Weight (%)0 $0 0%1 $8,779 8%2 $59,031 56%3 $32,388 31%4 $4,286 4%5 $1,001 1%

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


Not Rated 0 % 100 % 100 %

Good /Very Good 64.3 % 0 % 0 %

Fair 30.7 % 0 % 0 %

Poor /Very Poor 5 % 0 % 0 %

Condition is measured using a 0 – 6 grading system5 as detailed in Table 5.1.3

Table 5.1.3: Simple Condition Grading Model

ConditionGrading

Description of Condition

0 Brand New: Asset is brand new.

1 Very Good: Near as new condition with no defects.

2 Good: Superficial deterioration. No issue with reliability. No maintenance is required.

3 Fair: Minor deterioration present. Routine maintenance may be required.

4 Poor: Significant deterioration present. Requires maintenance to keep the asset serviceable andprogramming for renewal/rehabilitation on forward 5 year works program.

5 Very Poor: Extensive deterioration present. Requires significant maintenance to keep the assetserviceable and programming for renewal/rehabilitation within the following year.

6 End of Life: Asset is unserviceable and provides no service. Asset cannot be used.

5 IPWEA, 2011, IIMM, Sec 2.5.4, p 2|79.


5.1.4 Asset valuations

The value of assets recorded in the asset register as at 2018 covered by this asset managementplan is shown below. Assets were last revalued during financial year 2017-18. Assets are valuedat fair-value asset accounting based on AASB116 (Australian Accounting Standard Board). Referto Attachment Valuation Methodology.

Current Replacement Cost $105,486,000

Depreciable Amount $105,486,000

Depreciated Replacement Cost6 $78,966,000

Annual Depreciation Expense $2,408,000

Useful lives were reviewed in 2018 by detailed condition analysis.

Key assumptions made in preparing the valuations were:

Using local projects Using local data (metric unit rates) That the Roads Asset Register is a true reflection of the actual network dimensions &

composition

Major changes from previous valuations are due to better knowledge of the current network profileand history of works completed as well as the impact of market forces of materials required forconstruction and renewal.

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

Rate of Annual Asset Consumption 2.3%(Depreciation/Depreciable Amount)

Rate of Annual Asset Renewal 1.2%(Capital renewal exp/Depreciable amount)

Rate of Annual Asset Upgrade/New 1.4%(Capital upgrade exp/Depreciable amount)

Rate of Annual Asset Upgrade/New 2%(Including contributed assets)

In 2018 the organisation plans to renew assets at 53.2% of the rate they are being consumed andwill be increasing its asset stock by 2% in the year.

5.1.5 Historical Data

Unsealed Roads - Capital Expenses

UnsealedRoads

AccountNumber

2018-19

Budget

2017-18

Actual

2016-17

Actual

2015-16

Actual

2014-15

Actual

2013-14

Actual

6 Also reported as Written Down Current Replacement Cost (WDCRC).


GravelResheeting

62400 $140,000 $139,946 $139,878 $120,329 $137,056 $123,787

TOTAL $140,000 $139,946 $139,878 $120,329 $137,056 $123,787

Sealed Roads - Capital Expenses

SealedRoads

2018-19

Budget

2017-18

Actual

2016-17

Actual

2015-16

Actual

2014-15

Actual

2013-14

Actual

$1,981,000 $1,896,135 $2,113,362 $2,301,829 $1,076,752 $1,178,006

TOTAL $1,981,000 $1,896,135 $2,113,362 $2,301,829 $1,076,752 $1,178,006

Unsealed Roads – Maintenance Expenses

Unsealed Roads

AccountNumber

2018-19

Budget

2017-18

Actual

2016-17

Actual

2015-16

Actual

2014-15

Actual

2013-14

Actual

UrbanMaintenance

62550 $8,400 $12,102 $8,575 $5,692 $8,094 $7,344

Patrol Grading 62555 $214,100 $194,271 $223,854 $209,485 $230,424 $229,517

TOTAL $222,500 $206,373 $232,429 $215,177 $238,518 $236,861

Sealed Roads – Maintenance Expenses

Sealed Roads AccountNumbers

2018-19

Budget

2017-18

Actual

2016-17

Actual

2015-16

Actual

2014-15

Actual

2013-14

Actual

UrbanMaintenance

62150 $135,900 $137,368 $145,321 $120,062 $120,623 $133,045

RuralMaintenance

62155 $56,600 $57,139 $59,609 $57,216 $55,166 $58,482

Ring RdMaintenance

62154 $5,600 $7,046 $5,396 $1,599 $3,881 $6,449

Rural RdShoulderMaintenance

62160 $46,500 $42,384 $34,814 $38,720 $28,836 $37,194

Crack SealingMaintenance

62165 $27,600 $27,763 $27,597 $27,386 $20,419 $17,134

MinorMaintenanceProjects

62175 $000 $000 $000 $4,324 $000 $000


OtherExpenses

62199 $3000 $2,747 $593 $1,351 $2,228 $4,738

TOTAL $275,200 $274,447 $273,330 $250,658 $231,153 $257,042

5.2 Infrastructure Risk Management Plan

An assessment of risks7 associated with service delivery from infrastructure assets has identifiedcritical risks that will result in loss or reduction in service from infrastructure assets or a ‘financialshock’ to the organisation. The risk assessment process identifies credible risks, the likelihood ofthe risk event occurring, the consequences should the event occur, develops a risk rating, evaluatesthe risk and develops a risk treatment plan for non-acceptable risks.

Critical risks, being those assessed as ‘Very High’ - requiring immediate corrective action and ‘High’– requiring prioritised corrective action identified in the Infrastructure Risk Management Plan,together with the estimated residual risk after the selected treatment plan is operational aresummarised in Table 5.2. These risks are reported to management and Council.

Table 5.2: Critical Risks and Treatment Plans

Service orAsset at Risk

What can Happen RiskRating(VH, H)

Risk Treatment Plan ResidualRisk *

TreatmentCosts

Sprayed SealSurfacingFailure

Increase in sealfailures leadingto pavementfailures

H Increase cyclicalmaintenanceexpenditure to matchasset depreciation

L $6.40/M2(seal)$16.40/M2(asphalt)

PavementsFailure

Increase inpavementreconstructiondue to lack ofmaintenance andpatching

H Increase inmaintenanceinspections and repairs

L $44.10/m2(pavement)

$16.40/M2(asphalt)

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

5.3 Routine Operations and Maintenance Plan

Operations include regular activities to provide services such as public health, safety and amenity,e.g. street sweeping, grass mowing and street lighting.

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

7Organisation’s Infrastructure Risk Management Plan


5.3.1 Operations and Maintenance Plan

Operations activities affect service levels including quality and function through street sweeping andgrass mowing frequency, intensity and spacing of street lights and cleaning frequency and openinghours of building and other facilities.

Maintenance includes all actions necessary for retaining an asset as near as practicable to anappropriate service condition including regular ongoing day-to-day work necessary to keep assetsoperating, eg road patching but excluding rehabilitation or renewal. Maintenance may be classifiesinto reactive, planned and specific maintenance work activities.

Reactive maintenance is unplanned repair work carried out in response to service requests andmanagement/supervisory directions.

Planned maintenance is repair work that is identified and managed through a maintenancemanagement system (MMS). MMS activities include inspection, assessing the condition againstfailure/breakdown experience, prioritising, scheduling, actioning the work and reporting what wasdone to develop a maintenance history and improve maintenance and service delivery performance.

Specific maintenance is replacement of higher value components/sub-components of assets that isundertaken on a regular cycle including repainting, replacing air conditioning units, etc. This workfalls below the capital/maintenance threshold but may require a specific budget allocation.

NB. City of Victor Harbor report all road Operations & Maintenance activity expenses as “RoadMaintenance.”

Actual past maintenance expenditure is shown in Table 5.3.1.

Table 5.3.1: Maintenance Expenditure Trends

Year Maintenance ExpenditurePlanned and Specific Unplanned

2013-14 $484,025 $9,8782014-15 $460,278 $9,3932015-16 $456,519 $9,3162016-17 $495,644 $10,1152017-18 $471,204 $9,6162018-19 $487,746 $9,954

Planned maintenance work is currently 98% of total maintenance expenditure.

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

Assessment and prioritisation of reactive maintenance is undertaken by the organisation’s staff usingexperience and judgement.

5.3.2 Operations and Maintenance Strategies

The organisation will operate and maintain assets to provide the defined level of service to approvedbudgets in the most cost-efficient manner. The operation and maintenance activities include:


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

Undertaking maintenance activities through a planned maintenance system to reduce maintenancecosts and improve maintenance outcomes. Undertake cost-benefit analysis to determine the mostcost-effective split between planned and unplanned maintenance activities (50 – 70% planneddesirable as measured by cost),

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

Review current and required skills base and implement workforce training and development to meetrequired operations and maintenance needs,

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

Maintain a current hierarchy of critical assets and required operations and maintenance activities,

Develop and regularly review appropriate emergency response capability,

Review management of operations and maintenance activities to ensure the organisation isobtaining best value for resources used.

Asset hierarchy

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

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

Table 5.3.2: Asset Service Hierarchy

Service Hierarchy Service Level ObjectiveGravel Road (Unsealed) CollectorGravel Road (Unsealed) Major LocalGravel Road (Unsealed) Minor LocalBitumen Road (Sealed) CollectorBitumen Road (Sealed) Major LocalBitumen Road (Sealed) Minor Local

Critical Assets

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

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


Table 5.3.2.1: Critical Assets and Service Level Objectives

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

and Victoria Street /George Main Rd

State Government Responsibility to Maintain

Standards and specifications

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

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

5.3.3 Summary of future operations and maintenance expenditures

Future operations and maintenance expenditure is forecast to trend in line with the value of the assetstock as shown in Figure 4. Note that all costs are shown in current 2018 dollar values (ie realvalues).

Figure 4: Projected Operations and Maintenance Expenditure

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

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


5.4 Renewal/Replacement Plan

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

5.4.1 Renewal plan

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

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

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

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

Method 2 was used for this asset management plan.

The useful lives of assets used to develop projected asset renewal expenditures are shown in Table5.4.1. Asset useful lives were last reviewed during 2018 for financial year 2017-18.8

Table 5.4.1: Useful Lives of Assets

Asset (Sub)Category Useful life of YearsDistributor Pavement 60Collector and Local Pavement 70Gravel Road Pavement 15Asphalt (Hotmix) 30Flush/Spray Seal 16

5.4.2 Renewal and Replacement Strategies

The organisation will plan capital renewal and replacement projects to meet level of serviceobjectives and minimise infrastructure service risks by:

Planning and scheduling renewal projects to deliver the defined level of service in the most efficientmanner.

Undertaking project scoping for all capital renewal and replacement projects to identify:

the service delivery ‘deficiency’, present risk and optimum time forrenewal/replacement,

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

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

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

8 Road & Kerb Assets Valuation Methodology - Review of Useful Life of Assets 30 June 2014


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

Maintain a current infrastructure risk register for assets and service risks associated with providingservices from infrastructure assets and reporting Very High and High risks and residual risks aftertreatment to management and the Council.

Review current and required skills base and implement workforce training and development to meetrequired construction and renewal needs,

Maintain a current hierarchy of critical assets and capital renewal treatments and timings required.

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

Renewal ranking criteria

Asset renewal and replacement is typically undertaken to either:

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

To ensure the infrastructure is of sufficient quality to meet the service requirements (e.g. roughnessof a road).

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

Have a high consequence of failure,

Have a high utilisation and subsequent impact on users would be greatest,

The total value represents the greatest net value to the organisation,

Have the highest average age relative to their expected lives,

Are identified in the AM Plan as key cost factors,

Have high operational or maintenance costs, and

Where replacement with modern equivalent assets would yield material savings.

The ranking criteria used to determine priority of identified renewal and replacement proposals isdetailed in Table 5.4.2.

Table 5.4.2: Renewal and Replacement Priority Ranking Criteria

Criteria WeightingCondition Rating (4 and 5) 30%Risks – (residual high and/or extreme risks) 30%Utilisation 20%Public Need 20%Total 100%

Renewal and replacement standards

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


AUS-SPEC Specification #2Austroads Pavement Design Guide to the structural Design of Road PavementsAAPA Sprayed Sealing SpecificationAustroads Practitioners Guide to the Design of Sprayed SealsAAPA National Asphalt Specification

5.4.3 Summary of future renewal and replacement expenditure

Projected future renewal and replacement expenditures are forecast to increase over time as theasset stock increases from growth. The expenditure is summarised in Fig 5. Note that all amountsare shown in real values.

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

Fig 5: Projected Capital Renewal and Replacement Expenditure

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

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

5.5 Creation/Acquisition/Upgrade Plan

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

5.5.1 Selection criteria

New assets and upgrade/expansion of existing assets are identified from various sources such ascouncillor or community requests, proposals identified by strategic plans or partnerships with otherorganisations. Candidate proposals are inspected to verify need and to develop a preliminary


renewal estimate. Verified proposals are ranked by priority and available funds and scheduled infuture works programmes. The priority ranking criteria is detailed below.

Table 5.5.1: New Assets Priority Ranking Criteria

Criteria WeightingSocial 40%Environment 30%Economic 30%Total 100%

5.5.2 Capital Investment Strategies

The organisation will plan capital upgrade and new projects to meet level of service objectives by:

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

Undertake project scoping for all capital upgrade/new projects to identify:

the service delivery ‘deficiency’, present risk and required timeline for delivery of theupgrade/new asset,

the project objectives to rectify the deficiency including value management for majorprojects,

the range of options, estimated capital and life cycle costs for each options that couldaddress the service deficiency,

management of risks associated with alternative options, and evaluate the options against evaluation criteria adopted by Council, and select the best option to be included in capital upgrade/new programs, Review current and required skills base and implement training and development to

meet required construction and project management needs, Review management of capital project management activities to ensure the

organisation is obtaining best value for resources used.

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

5.5.3 Summary of future upgrade/new assets expenditure

Projected upgrade/new asset expenditures are summarised in Fig 6. The projected upgrade/newcapital works program is shown in Appendix C. All amounts are shown in real values.

Fig 6: Projected Capital Upgrade/New Asset Expenditure


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

5.6 Disposal Plan

Disposal includes any activity associated with disposal of a decommissioned asset including sale,demolition or relocation. Assets identified for possible decommissioning and disposal are shown inTable 5.6, together with estimated annual savings from not having to fund operations andmaintenance of the assets. These assets will be further reinvestigated to determine the requiredlevels of service and see what options are available for alternate service delivery, if any. Any revenuegained from asset disposals is accommodated in the organisation’s long term financial plan.

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

Table 5.6: Assets Identified for Disposal

Asset Reason for Disposal Timing Disposal Expenditure Operations &Maintenance Annual

SavingsRoad Pavements None Proposed N/A N/A N/ASeal None Proposed N/A N/A N/A

5.7 Service Consequences and Risks

The organisation has prioritised decisions made in adopting this AM Plan to obtain the optimumbenefits from its available resources. Decisions were made based on the development of 3 scenariosof AM Plans.

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

Scenario 2 – What we should do with existing budgets and identifying level of service and riskconsequences (i.e. what are the operations and maintenance and capital projects we are unable to


do, what is the service and risk consequences associated with this position). This may requireseveral versions of the AM Plan.

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

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

5.7.1 What we cannot do

There are some operations and maintenance activities and capital projects that are unable to beundertaken within the next 10 years. These include:

Bitumen Sealing of Rural Unsealed Roads – Capital Expense

5.7.2 Service consequences

Operations and maintenance activities and capital projects that cannot be undertaken will maintainor create service consequences for users. These include:

Rural residents that utilise unsealed roads may have some concern if their access road is notbitumen sealed.

5.7.3 Risk consequences

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

Little consequences – road safety will be maintained Dust may be of a concern to residents that live along unsealed rural roads

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

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

6.1 Financial Statements and Projections

The financial projections are shown in Fig 7 for projected operating (operations and maintenance)and capital expenditure (renewal and upgrade/expansion/new assets). Note that all costs are shownin real values.


Fig 7: Projected Operating and Capital Expenditure

6.1.1 Sustainability of service delivery

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

asset renewal funding ratio, and

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

Asset Renewal Funding Ratio

Asset Renewal Funding Ratio9 100%

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

Medium term – 10 year financial planning period

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

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

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


The projected operations, maintenance and capital renewal expenditure required over the 10 yearplanning period is $1,512,000 on average per year.

Estimated (budget) operations, maintenance and capital renewal funding is $1,451,000 on averageper year giving a 10 year funding shortfall of $61,000 per year. This indicates 96% of the projectedexpenditures needed to provide the services documented in the asset management plan. Thisexcludes upgrade/new assets.

Providing services from infrastructure in a sustainable manner requires the matching and managingof service levels, risks, projected expenditures and financing to achieve a financial indicator ofapproximately 1.0 for the first years of the asset management plan and ideally over the 10-year lifeof the Long Term Financial Plan.

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

Figure 8: Projected and LTFP Budgeted Renewal Expenditure

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

Table Projected and LTFP Budgeted Renewals and Financing Shortfall 6.1.1

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

($'000) ($'000) (- gap, + surplus)2019 $1,281 $1,281 $0 $02020 $1,645 $1,645 $0 $0


2021 $705 $705 $0 $02022 $1,359 $1,359 $0 $02023 $1,100 $1,100 $0 $02024 $774 $774 $0 $02025 $935 $935 $0 $02026 $785 $785 $0 $02027 $180 $180 $0 $02028 $180 $180 $0 $02029 $894 $894 $0 $02030 $894 $894 $0 $02031 $894 $894 $0 $02032 $894 $894 $0 $02033 $894 $894 $0 $02034 $894 $894 $0 $02035 $894 $894 $0 $02036 $894 $894 $0 $02037 $894 $894 $0 $02038 $894 $894 $0 $0

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

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

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

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

6.1.2 Projected expenditures for long term financial plan

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

Expenditure projections are in 2018 real values.

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

Year Operations MaintenanceProjected Capital

DisposalsCapitalRenewal Upgrade/New

2019 $52.00 $498.00 $1,281.00 $1,490.00 $0.002020 $53.05 $508.16 $1,645.00 $2,670.00 $0.002021 $54.68 $593.99 $705.00 $2,395.00 $0.002022 $56.17 $538.53 $1,359.00 $2,661.00 $0.002023 $57.80 $554.35 $1,100.00 $1,775.00 $0.002024 $59.00 $565.95 $774.00 $1,635.00 $0.002025 $60.12 $576.90 $935.00 $1,165.00 $0.00


2026 $61.02 $585.62 $785.00 $120.00 $0.002027 $61.41 $589.35 $180.00 $54.00 $0.002028 $61.76 $592.79 $180.00 $465.00 $0.002029 $62.32 $605.21 $894.40 $1,443.00 $0.002030 $63.36 $615.34 $894.40 $1,443.00 $0.002031 $64.41 $625.48 $894.40 $1,443.00 $0.002032 $65.45 $635.65 $894.40 $1,443.00 $0.002033 $66.50 $645.83 $894.40 $1,443.00 $0.002034 $67.55 $656.03 $894.40 $1,443.00 $0.002035 $68.60 $666.25 $894.40 $1,443.00 $0.002036 $69.66 $676.50 $894.40 $1,443.00 $0.002037 $70.72 $686.76 $894.40 $1,443.00 $0.002038 $71.77 $697.04 $894.40 $1,443.00 $0.00

6.2 Funding Strategy

After reviewing service levels, as appropriate to ensure ongoing financial sustainability projectedexpenditures identified in Section 6.1.2 will be accommodated in the organisation’s 10 year long termfinancial plan.

6.3 Valuation Forecasts

Asset values are forecast to increase as additional assets are added to the asset stock fromconstruction and acquisition by the organisation and from assets constructed by land developers

and others and donated to the organisation. Figure 9 shows the projected replacement cost assetvalues over the planning period in real values.

Figure 9: Projected Asset Values


Depreciation expense values are forecast in line with asset values as shown in Figure 10.

Figure 10: Projected Depreciation Expense

The depreciated replacement cost will vary over the forecast period depending on the rates ofaddition of new assets, disposal of old assets and consumption and renewal of existing assets.Forecast of the assets’ depreciated replacement cost is shown in Figure 11. The depreciatedreplacement cost of contributed and new assets is shown in the darker colour and in the lightercolour for existing assets.

Figure 11: Projected Depreciated Replacement Cost


6.4 Key Assumptions made in Financial Forecasts

This section details the key assumptions made in presenting the information contained in this assetmanagement plan and in preparing forecasts of required operating and capital expenditure and assetvalues, depreciation expense and carrying amount estimates. It is presented to enable readers togain an understanding of the levels of confidence in the data behind the financial forecasts.

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

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

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

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

Initial renewal and new costs have been reviewed onthe basis of historical costs, condition deteriorationwork, and compared to the depreciation provisionand the funding available. Renewal costs typicallyincrease by an average of 3-4% per annum over thelife of the Plan to allow for the impact of an enlargedasset base.

Cost assumptions based on past and known costs.

Similarly, Maintenance costs typically increase byabout 3% per annum to allow for the increase in totalasset value (reflecting the higher costs associatedwith managing a larger network base). Again, asasset value is predicted to increase by some 2% overthe life of the Plan, this assumption will need to beclosely monitored to ensure that sufficientmaintenance funds are available to optimise longterm expenditure and not create a backlog.

Cost assumptions based on past and known costs.

Continuation of the current rate and pattern of urbandevelopment.

Population growth factor of 1.5% per year has beenincluded.

Capital forecast costs for ‘Renewal’ & ‘Upgrade/New’have been placed into their respective categories;this was based on limited information.

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

6.5 Forecast Reliability and Confidence

The expenditure and valuations projections in this AM Plan are based on best available data.Currency and accuracy of data is critical to effective asset and financial management. Dataconfidence is classified on a 5 level scale10 in accordance with Table 6.5.

Table 6.5: Data Confidence Grading System

ConfidenceGrade

Description

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

B Reliable Data based on sound records, procedures, investigations and analysis, documented properly buthas minor shortcomings, for example some of the data is old, some documentation is missing

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


and/or reliance is placed on unconfirmed reports or some extrapolation. Dataset is complete andestimated to be accurate ± 10%

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

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

E Unknown None or very little data held.

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

Table 6.5.1: Data Confidence Assessment for Data used in AM Plan

Data Confidence Assessment CommentDemand drivers Highly Reliable Regional trends available

Growth projections Highly Reliable

Operations expenditures Reliable Extrapolated from previous years

Maintenanceexpenditures

Highly Reliable Extrapolated from previous years

Projected Renewal exps.- Asset values

Highly Reliable Valuation completed in 2018

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

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

- Condition modelling Highly Reliable Comprehensively completed in 2018

- Network renewals Highly Reliable Based on Condition assessment and operationalexperience

- Defect repairs Highly Reliable Scheduled maintenance is approx. 98% of totalmaintenance

Upgrade/Newexpenditures

Reliable Capital Works Program

Disposal expenditures Reliable Capital Works Program

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

7. Plan Improvement and Monitoring.7.1 Status of Asset Management Practices

7.1.1 Accounting and financial systems

The finance system used by the City of Victor Harbor includes:

SynergySoft (IT Vision)

o Actual and historical transactionso Budgeting


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

Magic Performance (Magiq Software Pty Ltd)

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

MyData (Assetic Pty Ltd)

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

Accountabilities for financial systems

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

Accounting standards and regulations

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

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

Capital/maintenance threshold

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

7.2.1 Asset management system

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

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

Accountabilities for asset management system and data maintenance

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


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

7.2 Improvement Program

The asset management improvement plan generated from this asset management plan is shown inTable 7.2

Table 7.2: Improvement Plan

TaskNo

Task Responsibility ResourcesRequired

Timeline

1 Annually Review 10 Year Capital WorksProgram

GS, JR Staff October/November eachyear

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

GS, JS, JR,KKS,Assetic

Staff, Assetic As per revaluationrequirements

3 Review Levels of Service GS Staff October/Novembereach year

4 Continue to maintain and quality check theasset register

JS, JR Staff On-going

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

7.3 Monitoring and Review Procedures

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

The AM Plan will be updated annually to ensure it represents the current service level, asset values,projected operations, maintenance, capital renewal and replacement, capital upgrade/new and assetdisposal expenditures and projected expenditure values incorporated into the organisation’s longterm financial plan.

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

7.4 Performance Measures

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

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

The degree to which 1-5 year detailed works programs, budgets, business plans and organisationalstructures take into account the ‘global’ works program trends provided by the asset managementplan,


The degree to which the existing and projected service levels and service consequences (what wecannot do), risks and residual risks are incorporated into the organisation’s Strategic Plan andassociated plans.

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

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

IPWEA, 2008, ‘NAMS.PLUS Asset Management’, Institute of Public Works Engineering Australia,Sydney, www.ipwea.org.au/namsplus.

IPWEA, 2009, ‘Australian Infrastructure Financial Management Guidelines’, Institute of Public WorksEngineering Australia, Sydney, www.ipwea.org.au/AIFMG.

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

Community Plan 2036 and Strategic Directions 2016-2020

IPWEA, Practice Note 9, Roads

Organisation, ‘Annual Plan and Budget’

Roads Infrastructure Risk Management Plan

Victor Harbor Urban Growth Management Strategy

Victor Harbor Coastal Management Study 2013


9. AppendicesAppendix A Maintenance Response Levels of Service

Appendix B Projected 10 Year Capital Renewal and Replacement Works Program

Appendix C Projected 10 Year Capital Upgrade/New Works Program

Appendix D LTFP Budgeted Expenditures Accommodated in AM Plan

Appendix E Gifted Assets 2010 – 30 June 2018

Appendix F Abbreviations

Appendix G Glossary


Appendix A Maintenance Response Levels of Service

Refer to Works Service Requests


Appendix B Projected 10 year Capital Renewal and Replacement Works Program

Yr 2019 Renewal New/Upgrade Total

Pine Avenue, Stage 1 of 2 - Construction (Hindmarsh to Riverview) $310,000

$135,000

$445,000

Resheeting Unsealed Roads $140,000

$-

$140,000

Bitumen Reseals / Asphaltic Works $300,000

$-

$300,000

Waitpinga Road, Stage 3 of 4 - Range Rd to End of Stage 2, Project subject to SLRP 66% GrantFunding

$180,000

$120,000

$300,000

Armstrong Rd, Leading to Henderson Road, Design (Left Hand Turn) $15,000

$-

$15,000

Martha Close Road, Design $15,000

$-

$15,000

The Parkway (Riverview to Field) Construction $321,000

$-

$321,000

Mainstreet (Ocean Street) Stage 2 Construction Coral to Torrens St - CommenceCONSTRUCTION

$-

$847,500

$847,500

Mainstreet (Ocean Street) Stage 2 Construction Coral to Torrens St - FINALISE DESIGN $-

$50,000

$50,000

Mainstreet Precinct Master Plan, Stage 3, Commence Design & Documentation - DESIGN $-

$232,000

$232,000

Railway Terrace - Design $-

$105,000

$105,000

$1,281,000

$1,489,500

$2,770,500

Renewal New/Upgrade


Yr 2020

Pine Avenue, Stage 2 of 2 (Final) Construction (Riverview towards Warland) $100,000

$350,000

$450,000


$-

$160,000

Bitumen Reseals/Asphaltic Works $400,000

$-

$400,000

Passat Street, Construction $250,000

$255,000

$505,000

Mainstreet Precinct Master Plan - Stage 4 - Commence DESIGN $-

$213,000

$213,000

Waitpinga Road, Stage 4 of 4 - Near Blockers/Curve (subject to SLRP 66% Grant Funding) $200,000

$-

$200,000

Mainstreet Precinct Master Plan - Stage 3 - Commence CONSTRUCTION $-

$790,000

$790,000

Mainstreet Precinct Master Plan - Stage 2 - Finalise CONSTRUCTION $-

$847,000

$847,000

Ridge Avenue, Construction (Battye to Clair) $500,000

$40,000

$540,000

Oakham Street, Full Length Stormwater (Design) $35,000

$-

$35,000

Martha Close Road, Construction $-

$175,000

$175,000

$1,645,000

$2,670,000

$4,315,000

Yr 2021 Renewal New/Upgrade


$-

$160,000


$-

$400,000


Sturt Street, (Burke to Oval Road) Design $35,000

$-

$35,000

Valley View Rd - Waggon Rd to End - distance about 286m - Design $35,000

$-

$35,000


$90,000

$90,000


$790,000

$790,000


$710,000

$710,000

‘Railway Tce Stormwater & Urban Design Project’ - Commence Construction, also ReferStormwater IAM Plan Upgrade

$-

$700,000

$700,000

Resolution No. OC1672017 - Jagger Rd (between Bluff Rd & Passatt St, western side), placebarrier kerb & channel & deep lift asphalt

$-

$30,000

$30,000

Harbourview Tce - Road Reconstruction with Developer $75,000

$75,000

$150,000

$705,000

$2,395,000

$3,100,000



$-

$160,000


$96,000

$480,000

Sturt Street, Construction (Burke to Oval Rd) $295,000

$295,000

$590,000

Valley View Rd - Waggon Rd to End - distance about 286m - Construction $180,000

$-

$180,000

Mainstreet Precinct Master Plan - Stage 6 - Commence DESIGN $240,000

$240,000


Mainstreet Precinct Master Plan - Stage 4 - Finalise CONSTRUCTION $710,000

$710,000

Mainstreet Precinct Master Plan - Stage 5 - Commence CONSTRUCTION $300,000

$300,000

Oakham Street, Full Length Stormwater, Construction $220,000

$100,000

$320,000

Ring Route, Repair Road Bridge Approach's $120,000

$-

$120,000


$-

$220,000

$220,000

‘Railway Tce Stormwater & Urban Design Project’ - Finalise Construction, also Refer toStormwater IAM Plan Upgrade

$-

$700,000

$700,000

$1,359,000

$2,661,000

$4,020,000



$-

$160,000


$-

$570,000

Whalers Road from Franklin Parade to White Crescent - 7900m2 - Construction $380,000

$380,000

$760,000


$300,000

$300,000


$800,000

$800,000


$250,000

$250,000

Glenvale Road (road design) $-

$45,000

$45,000

$1,110,000

$1,775,000

$2,885,000




$-

$170,000

Bitumen Reseals $550,000

$-

$550,000

Hart Avenue - Battye Rd to Lot 1 - distance about 125m - Design $27,000

$-

$27,000

River Road - Baudin Rd to Canterbury Rd - distance about 225m - Design $27,000

$-

$27,000


$800,000

$800,000


$835,000

$835,000

$774,000

$1,635,000

$2,409,000



$-

$170,000


$-

$550,000

River Road - Baudin Rd to Canterbury Rd - distance about 225m - Construction & Bitumen Seal $125,000

$-

$125,000


$835,000

$835,000

Lincoln Road - Lincoln Rd Change of Seal to End - Length about 230m - Design $30,000

$-

$30,000

Glenvale Road, Contruction & Bitumen Seal $60,000

$330,000

$390,000

$935,000

$1,165,000

$2,100,000




$-

$170,000


$-

$550,000

Hart Avenue - Battye Rd to Lot 1 - distance about 125m - Construction & Bitumen Seal $65,000

$-

$65,000

Lincoln Road - Lincoln Rd Change of Seal to End - Length about 230m - Construction $-

$120,000

$120,000

$785,000

$120,000

$905,000



$-

$180,000

Resolution No. OC4292018 - Day Road, Design $-

$27,000

$27,000

Resolution No. OC4292018 - Fuller East Road, Design $-

$27,000

$27,000

$-

$-

$-

$180,000

$54,000

$234,000



$-

$180,000

Resolution No. OC4292018 - Day Road, Construction & Bitumen Seal $-

$220,000

$220,000


Resolution No. OC4292018 - Fuller East Road, Construction & Bitumen Seal $-

$245,000

$245,000

$180,000

$465,000

$645,000


Appendix C Projected 10 year Capital Upgrade/New Works Program

Yr 2019 Renewal New/Upgrade Total

Pine Avenue, Stage 1 of 2 - Construction (Hindmarsh to Riverview) $310,000

$135,000

$445,000


$-

$140,000


$-

$300,000

Waitpinga Road, Stage 3 of 4 - Range Rd to End of Stage 2, Project subject to SLRP 66% GrantFunding

$180,000

$120,000

$300,000

Armstrong Rd, Leading to Henderson Road, Design (Left Hand Turn) $15,000

$-

$15,000

Martha Close Road, Design $15,000

$-

$15,000

The Parkway (Riverview to Field) Construction $321,000

$-

$321,000

Mainstreet (Ocean Street) Stage 2 Construction Coral to Torrens St - CommenceCONSTRUCTION

$-

$847,500

$847,500

Mainstreet (Ocean Street) Stage 2 Construction Coral to Torrens St - FINALISE DESIGN $-

$50,000

$50,000

Mainstreet Precinct Master Plan, Stage 3, Commence Design & Documentation - DESIGN $-

$232,000

$232,000

Railway Terrace - Design $-

$105,000

$105,000

$1,281,000

$1,489,500

$2,770,500


Pine Avenue, Stage 2 of 2 (Final) Construction (Riverview towards Warland) $100,000

$350,000

$450,000



$-

$160,000

Bitumen Reseals/Asphaltic Works $400,000

$-

$400,000

Passat Street, Construction $250,000

$255,000

$505,000


$213,000

$213,000

Waitpinga Road, Stage 4 of 4 - Near Blockers/Curve (subject to SLRP 66% Grant Funding) $200,000

$-

$200,000


$790,000

$790,000


$847,000

$847,000

Ridge Avenue, Construction (Battye to Clair) $500,000

$40,000

$540,000

Oakham Street, Full Length Stormwater (Design) $35,000

$-

$35,000

Martha Close Road, Construction $-

$175,000

$175,000

$1,645,000

$2,670,000

$4,315,000



$-

$160,000


$-

$400,000

Sturt Street, (Burke to Oval Road) Design $35,000

$-

$35,000


Valley View Rd - Waggon Rd to End - distance about 286m - Design $35,000

$-

$35,000


$90,000

$90,000


$790,000

$790,000


$710,000

$710,000

‘Railway Tce Stormwater & Urban Design Project’ - Commence Construction, also ReferStormwater IAM Plan Upgrade

$-

$700,000

$700,000


$-

$30,000

$30,000

Harbourview Tce - Road Reconstruction with Developer $75,000

$75,000

$150,000

$705,000

$2,395,000

$3,100,000



$-

$160,000


$96,000

$480,000

Sturt Street, Construction (Burke to Oval Rd) $295,000

$295,000

$590,000

Valley View Rd - Waggon Rd to End - distance about 286m - Construction $180,000

$-

$180,000

Mainstreet Precinct Master Plan - Stage 6 - Commence DESIGN $240,000

$240,000

Mainstreet Precinct Master Plan - Stage 4 - Finalise CONSTRUCTION $710,000

$710,000


Mainstreet Precinct Master Plan - Stage 5 - Commence CONSTRUCTION $300,000

$300,000

Oakham Street, Full Length Stormwater, Construction $220,000

$100,000

$320,000

Ring Route, Repair Road Bridge Approach's $120,000

$-

$120,000


$-

$220,000

$220,000

‘Railway Tce Stormwater & Urban Design Project’ - Finalise Construction, also Refer toStormwater IAM Plan Upgrade

$-

$700,000

$700,000

$1,359,000

$2,661,000

$4,020,000



$-

$160,000


$-

$570,000

Whalers Road from Franklin Parade to White Crescent - 7900m2 - Construction $380,000

$380,000

$760,000


$300,000

$300,000


$800,000

$800,000


$250,000

$250,000

Glenvale Road (road design) $-

$45,000

$45,000

$1,110,000

$1,775,000

$2,885,000




$-

$170,000


$-

$550,000

Hart Avenue - Battye Rd to Lot 1 - distance about 125m - Design $27,000

$-

$27,000

River Road - Baudin Rd to Canterbury Rd - distance about 225m - Design $27,000

$-

$27,000


$800,000

$800,000


$835,000

$835,000

$774,000

$1,635,000

$2,409,000



$-

$170,000


$-

$550,000

River Road - Baudin Rd to Canterbury Rd - distance about 225m - Construction & Bitumen Seal $125,000

$-

$125,000


$835,000

$835,000

Lincoln Road - Lincoln Rd Change of Seal to End - Length about 230m - Design $30,000

$-

$30,000

Glenvale Road, Contruction & Bitumen Seal $60,000

$330,000

$390,000

$935,000

$1,165,000

$2,100,000




$-

$170,000


$-

$550,000

Hart Avenue - Battye Rd to Lot 1 - distance about 125m - Construction & Bitumen Seal $65,000

$-

$65,000

Lincoln Road - Lincoln Rd Change of Seal to End - Length about 230m - Construction $-

$120,000

$120,000

$785,000

$120,000

$905,000



$-

$180,000

Resolution No. OC4292018 - Day Road, Design $-

$27,000

$27,000

Resolution No. OC4292018 - Fuller East Road, Design $-

$27,000

$27,000

$-

$-

$-

$180,000

$54,000

$234,000



$-

$180,000

Resolution No. OC4292018 - Day Road, Construction & Bitumen Seal $-

$220,000

$220,000


Resolution No. OC4292018 - Fuller East Road, Construction & Bitumen Seal $-

$245,000

$245,000

$180,000

$465,000

$645,000

CITY OF VICTOR HARBOR– ROADS ASSET MANAGEMENT PLAN Page 67 of 78

Appendix D Budgeted Expenditures Accommodated in LTFP

Projected Expenditure 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028Capital Expenditure on Renewal/Replacementof existing assets

$1,281.00 $1,645.00 $705.00 $1,359.00 $1,100.00 $774.00 $935.00 $785.00 $180.00 $180.00

Capital Expenditure on Upgrade/New assets $1,490.00 $2,670.00 $2,395.00 $2,661.00 $1,775.00 $1,635.00 $1,165.00 $120.00 $54.00 $465.00Operational cost of existing assets $52.00 $52.00 $52.00 $52.00 $52.00 $52.00 $52.00 $52.00 $52.00 $52.00Maintenance cost of existing assets $498.00 $498.00 $568.00 $498.00 $498.00 $498.00 $498.00 $498.00 $498.00 $498.00Operational cost of New assets $0.00 $1.05 $2.68 $4.17 $5.80 $7.00 $8.12 $9.02 $9.41 $9.76Maintenance cost of New assets $0.00 $10.16 $25.99 $40.53 $56.35 $67.95 $78.90 $87.62 $91.35 $94.79Disposal of Surplus Assets $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

All dollar values in ($'000)'s


Appendix E Gifted Assets 2010 – 30 June 2018

AssetID Asset Name Segment/Group Name Asset

TypeSurfaceType 1

Pavement BaseDate of Recognition

SurfaceRecognitionType

TotalReplacementValue ($)

RD.1537.05

AquamarineBoulevard 05-Ocean Road to Emerald Drive Boule

vard Asphalt 5/04/2011 Gifted 242,576.14

RD.1538.05 Royal Court 05-Aquamarine Drive to end Court Asphalt 5/04/2011 Gifted 17,957.57

RD.1539.05 Mint Drive 05-Aquamarine to Junction of

Indigo Way Drive Asphalt 5/04/2011 Gifted 42,017.03

RD.1539.10 Mint Drive 10-Junction of Indigo Way to end Drive Asphalt 5/04/2011 Gifted 13,041.64

RD.1540.05 Indigo Way 05-Mint Drive to Emerald Drive Way Asphalt 5/04/2011 Gifted 42,504.12

RD.1541.05

EmeraldDrive 05-Change of Seal to end Drive Asphalt 5/04/2011 Gifted 70,963.66

RD.1542.05 Cobalt Drive 05-Aquamarine Drive to end Drive Asphalt 5/04/2011 Gifted 16,245.91

$445,306.07As of30/06/2011

RD.1547.05

StrathmoreCourt 05-Harbour View Terrace Court Asphalt 23/12/2011 Gifted 76,848.07

RD.1548.05

StirlingCourt 05-Welch Road to End Court Spray

Seal 17/02/2012 Gifted 83,871.78

RD.1541.10

EmeraldDrive 10-Change of Seal to Cobalt Drive Drive Asphalt 1/06/2012 Gifted 71,465.38

RD.1543.05

SapphireWay 05-Emerald Drivel to end Way Asphalt 1/06/2012 Gifted 16,917.04

City of Victor Harbor – ROADS ASSET MANAGEMENT PLAN Page 69 of 78

RD.1542.20 Cobalt Drive 20-Change of Seal to end Drive Asphalt 1/06/2012 Gifted 41,291.18

RD.1515.20

CentralDrive 20- Causeway to End Drive Asphalt 6/06/2012 Gifted 60,917.77

RD.1515.30

CentralDrive 30- Driveway Link Drive Asphalt 6/06/2012 Gifted 22,251.17

$373,562.39As of30/06/2012

RD.1545.05

ScarlettCourt

05-Wishart Crescent toHammerhead End Court Asphalt 21/11/2012 Gifted 69,671.04

RD.1544.05 Kay Court 05-Wishart Crescent to Culdesac

End Court Asphalt 21/11/2012 Gifted 49,806.17

RD.1546.05 Jones Way 05-Wishart Crescent to End Way Asphalt 21/11/2012 Gifted 18,985.06

RD.1502.10

WishartCrescent 10-Change of Seal to Jones Way Cresc

ent Asphalt 21/11/2012 Gifted 62,547.75

RD.1502.15

WishartCrescent

15-Intersection Jones Way &Wishart Crescent to Change of Seal

Crescent Asphalt 21/11/2012 Gifted 157,100.14

RD.1494.10 White Close 10-Change of Seal to Temporary

Culdesac Close Asphalt 21/12/2012 Gifted 30,689.96

$388,800.12As of30/06/2013

RD.1549.05 Nation Court 05-Mill Road to Hammerheald Court Asphalt 30/06/2014 Gifted 20,746.53

RD.1549.10 Nation Court 10-Hammerhead Court Asphalt 30/06/2014 Gifted 33,162.81

$53,909.34As of30/06/2014


RD.1552.05

MurrayStreet

05-Inman Valley Road to ShieldsCrescent

Street Asphalt 1/05/2015 Gifted 34,545.23

RD.1553.05

CameronCourt 05-Shields Crescent to End Court Asphalt 1/05/2015 Gifted 53,086.90

RD.1554.05

ShieldsCrescent 05-Culdesac to Culdesac Cresc


RD.1542.10 Cobalt Drive 10-3 Cobalt Drive to 16 Cobalt Drive Drive Asphalt 15/05/2015 Gifted 77,033.10

RD.1550.05 Kleinig Drive 10-Cobalt Drive to End Drive Asphalt 15/05/2015 Gifted 13,185.89

RD.1551.05 Jade Court 05-Cobalt Drive to End Court Asphalt 15/05/2015 Gifted 58,710.00

RD.1555.05

KookaburraBoulevard 05-Tabernacle Road to Roundabout Boule


RD.1555.10

KookaburraBoulevard 10 - Roundabout to temporary end Boule


RD.1555.30

KookaburraBoulevard 30- Roundabout to temporary end Boule


RD.1556.05

KingfisherCrescent 05- Kookaburra to Temporary End Cresc


RD.1556.06

KingfisherCrescent 05- Kingfisher to End (access) Cresc


RD.1557.05

RosellaStreet 05- Kookaburra to Temporary End Stree

t Asphalt 18/05/2015 Gifted 73,244.54

RD.1557.06

RosellaStreet 05- Rosella Street to end (Access) Stree

t Asphalt 18/05/2015 Gifted 15,974.71

$689,976.61As of30/06/2015

RD.1558.05

BuchananCourt

05-Lincoln Park Drive TO End(Culdesac) Court Asphalt 16/02/2016 Gifted 214,601.42


RD.1494.15 White Close 15-Change of Seal to End of

Culdesac Close Asphalt 5/04/2016 Gifted 24,475.75

$239,077.17As of30/06/2016

RD.1517.10

DuttonCircuit 10-3 Dutton Circuit to End Drive Asphalt 20/09/2017 Gifted 31,645.37

RD.1517.15

DuttonCircuit(West)

15-4 Dutton Circuit to End Culdesac Drive Asphalt 20/09/2017 Gifted 32,391.79

RD.1550.10 Kleinig Drive 10-108 Kleinig Drive to 88 Kleinig

Drive Drive Asphalt 27/10/2017 Gifted 136,103.89

RD.1550.15 Kleinig Drive 88 Kleinig Drive to Sapphire Way Drive Asphalt 19/01/2018 Gifted 168,903.44

RD.1543.20

SapphireWay

20-Kleinig Drive to half way down52 Kleinig Drive Way Asphalt 19/01/2018 Gifted 6,317.76

$375,362.24As of30/06/2018

$2,565,993.94 Total


Appendix F Abbreviations

AAAC Average annual asset consumption

AM Asset management

AM Plan Asset management plan

ARI Average recurrence interval

ASC Annual service cost

BOD Biochemical (biological) oxygen demand

CRC Current replacement cost

CWMS Community wastewater managementsystems

DA Depreciable amount

DRC Depreciated replacement cost

EF Earthworks/formation

IRMP Infrastructure risk management plan

LCC Life Cycle Cost

LCE Life cycle expenditure

LTFP Long term financial plan

MMS Maintenance management system

PCI Pavement condition index

RV Residual value

SoA State of the Assets

SS Suspended solids

vph Vehicles per hour

WDCRD Written down current replacement cost


Appendix G Glossary

Annual service cost (ASC)1) Reporting actual cost

The annual (accrual) cost of providing aservice including operations, maintenance,depreciation, finance/opportunity and disposalcosts less revenue.

2) For investment analysis and budgetingAn estimate of the cost that would be

tendered, per annum, if tenders were called forthe supply of a service to a performancespecification for a fixed term. The AnnualService Cost includes operations,maintenance, depreciation, finance/opportunity and disposal costs, less revenue.

AssetA resource controlled by an entity as a result of pastevents and from which future economic benefits areexpected to flow to the entity. Infrastructure assetsare a sub-class of property, plant and equipmentwhich are non-current assets with a life greater than12 months and enable services to be provided.

Asset categorySub-group of assets within a class hierarchy forfinancial reporting and management purposes.

Asset classA group of assets having a similar nature or functionin the operations of an entity, and which, forpurposes of disclosure, is shown as a single itemwithout supplementary disclosure.

Asset condition assessmentThe process of continuous or periodic inspection,assessment, measurement and interpretation of theresultant data to indicate the condition of a specificasset so as to determine the need for somepreventative or remedial action.

Asset hierarchyA framework for segmenting an asset base intoappropriate classifications. The asset hierarchy canbe based on asset function or asset type or acombination of the two.

Asset management (AM)The combination of management, financial,economic, engineering and other practices appliedto physical assets with the objective of providing therequired level of service in the most cost effectivemanner.

Asset renewal funding ratioThe ratio of the net present value of asset renewalfunding accommodated over a 10 year period in along term financial plan relative to the net presentvalue of projected capital renewal expendituresidentified in an asset management plan for the sameperiod [AIFMG Financial Sustainability Indicator No8].

Average annual asset consumption (AAAC)*The amount of an organisation’s asset baseconsumed during a reporting period (generally ayear). This may be calculated by dividing thedepreciable amount by the useful life (or total futureeconomic benefits/service potential) and totalled foreach and every asset OR by dividing the carryingamount (depreciated replacement cost) by theremaining useful life (or remaining future economicbenefits/service potential) and totalled for each andevery asset in an asset category or class.

BorrowingsA borrowing or loan is a contractual obligation of theborrowing entity to deliver cash or another financialasset to the lending entity over a specified period oftime or at a specified point in time, to cover both theinitial capital provided and the cost of the interestincurred for providing this capital. A borrowing orloan provides the means for the borrowing entity tofinance outlays (typically physical assets) when ithas insufficient funds of its own to do so, and for thelending entity to make a financial return, normally inthe form of interest revenue, on the fundingprovided.

Capital expenditureRelatively large (material) expenditure, which hasbenefits, expected to last for more than 12 months.Capital expenditure includes renewal, expansionand upgrade. Where capital projects involve acombination of renewal, expansion and/or upgradeexpenditures, the total project cost needs to beallocated accordingly.

Capital expenditure - expansionExpenditure that extends the capacity of an existingasset to provide benefits, at the same standard asis currently enjoyed by existing beneficiaries, to anew group of users. It is discretionary expenditure,which increases future operations and maintenancecosts, because it increases the organisation’s assetbase, but may be associated with additionalrevenue from the new user group, eg. extending adrainage or road network, the provision of an ovalor park in a new suburb for new residents.

Capital expenditure - new


Expenditure which creates a new asset providing anew service/output that did not exist beforehand. Asit increases service potential it may impact revenueand will increase future operations andmaintenance expenditure.

Capital expenditure – renewal (forms part ofsustainably ratio %)Expenditure on an existing asset or on replacing anexisting asset, which returns the service capabilityof the asset up to that which it had originally. It isperiodically required expenditure, relatively large(material) in value compared with the value of thecomponents or sub-components of the asset beingrenewed. As it reinstates existing service potential,it generally has no impact on revenue, but mayreduce future operations and maintenanceexpenditure if completed at the optimum time, eg.resurfacing or resheeting a material part of a roadnetwork, replacing a material section of a drainagenetwork with pipes of the same capacity,resurfacing an oval.

Capital expenditure - upgradeExpenditure, which enhances an existing asset toprovide a higher level of service or expenditure thatwill increase the life of the asset beyond that whichit had originally. Upgrade expenditure isdiscretionary and often does not result in additionalrevenue unless direct user charges apply. It willincrease operations and maintenance expenditurein the future because of the increase in theorganisation’s asset base, eg. widening the sealedarea of an existing road, replacing drainage pipeswith pipes of a greater capacity, enlarging agrandstand at a sporting facility.

Capital funding

Funding to pay for capital expenditure.

Capital grantsMonies received generally tied to the specificprojects for which they are granted, which are oftenupgrade and/or expansion or new investmentproposals.

Capital investment expenditureSee capital expenditure definition.

Capitalisation thresholdThe value of expenditure on non-current assetsabove which the expenditure is recognised ascapital expenditure and below which theexpenditure is charged as an expense in the year ofacquisition.

Carrying amountThe amount at which an asset is recognised afterdeducting any accumulated depreciation /amortisation and accumulated impairment lossesthereon.

Class of assetsSee asset class definition

ComponentSpecific parts of an asset having independentphysical or functional identity and having specificattributes such as different life expectancy,maintenance regimes, risk or criticality.

Core asset managementAsset management which relies primarily on the useof an asset register, maintenance managementsystems, job resource management, inventorycontrol, condition assessment, simple riskassessment and defined levels of service, in orderto establish alternative treatment options and long-term cashflow predictions. Priorities are usuallyestablished on the basis of financial return gainedby carrying out the work (rather than detailed riskanalysis and optimised decision- making).

Cost of an assetThe amount of cash or cash equivalents paid or thefair value of the consideration given to acquire anasset at the time of its acquisition or construction,including any costs necessary to place the assetinto service. This includes one-off design andproject management costs.

Critical assetsAssets for which the financial, business or servicelevel consequences of failure are sufficiently severeto justify proactive inspection and rehabilitation.Critical assets have a lower threshold for action thannoncritical assets.

Current replacement cost (CRC)The cost the entity would incur to acquire the asseton the reporting date. The cost is measured byreference to the lowest cost at which the grossfuture economic benefits could be obtained in thenormal course of business or the minimum it wouldcost, to replace the existing asset with atechnologically modern equivalent new asset (not asecond hand one) with the same economic benefits(gross service potential) allowing for any differencesin the quantity and quality of output and in operatingcosts.


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

Depreciable amountThe cost of an asset, or other amount substituted forits cost, less its residual value.

Depreciated replacement cost (DRC)The current replacement cost (CRC) of an assetless, where applicable, accumulated depreciationcalculated on the basis of such cost to reflect thealready consumed or expired future economicbenefits of the asset.

Depreciation / amortisationThe systematic allocation of the depreciable amount(service potential) of an asset over its useful life.

Economic lifeSee useful life definition.

ExpenditureThe spending of money on goods and services.Expenditure includes recurrent and capital outlays.

ExpensesDecreases in economic benefits during theaccounting period in the form of outflows ordepletions of assets or increases in liabilities thatresult in decreases in equity, other than thoserelating to distributions to equity participants.

Fair valueThe amount for which an asset could be exchanged,or a liability settled, between knowledgeable, willingparties, in an arm’s length transaction.

Financing gapA financing gap exists whenever an entity hasinsufficient capacity to finance asset renewal andother expenditure necessary to be able toappropriately maintain the range and level ofservices its existing asset stock was originallydesigned and intended to deliver. The servicecapability of the existing asset stock should bedetermined assuming no additional operatingrevenue, productivity improvements, or net financialliabilities above levels currently planned orprojected. A current financing gap means servicelevels have already or are currently falling. Aprojected financing gap if not addressed will resultin a future diminution of existing service levels.

Heritage assetAn asset with historic, artistic, scientific,technological, geographical or environmentalqualities that is held and maintained principally forits contribution to knowledge and culture and thispurpose is central to the objectives of the entityholding it.

Impairment LossThe amount by which the carrying amount of anasset exceeds its recoverable amount.

Infrastructure assetsPhysical assets that contribute to meeting the needsof organisations or the need for access to majoreconomic and social facilities and services, eg.roads, drainage, footpaths and cycleways. Theseare typically large, interconnected networks orportfolios of composite assets. The components ofthese assets may be separately maintained,renewed or replaced individually so that therequired level and standard of service from thenetwork of assets is continuously sustained.Generally the components and hence the assetshave long lives. They are fixed in place and areoften have no separate market value.

Investment propertyProperty held to earn rentals or for capitalappreciation or both, rather than for:(a) use in the production or supply of goods or

services or for administrative purposes; or(b) sale in the ordinary course of business.

Key performance indicatorA qualitative or quantitative measure of a service oractivity used to compare actual performanceagainst a standard or other target. Performanceindicators commonly relate to statutory limits,safety, responsiveness, cost, comfort, assetperformance, reliability, efficiency, environmentalprotection and customer satisfaction.

Level of serviceThe defined service quality for a particularservice/activity against which service performancemay be measured. Service levels usually relate toquality, quantity, reliability, responsiveness,environmental impact, acceptability and cost.

Life Cycle Cost *1. Total LCC The total cost of an asset throughout

its life including planning, design, construction,acquisition, operation, maintenance,rehabilitation and disposal costs.

2. Average LCC The life cycle cost (LCC) isaverage cost to provide the service over thelongest asset life cycle. It comprises average


operations, maintenance expenditure plusasset consumption expense, represented bydepreciation expense projected over 10 years.The Life Cycle Cost does not indicate the fundsrequired to provide the service in a particularyear.

Life Cycle ExpenditureThe Life Cycle Expenditure (LCE) is the averageoperations, maintenance and capital renewalexpenditure accommodated in the long termfinancial plan over 10 years. Life Cycle Expendituremay be compared to average Life Cycle Cost to givean initial indicator of affordability of projectedservice levels when considered with asset ageprofiles.

Loans / borrowingsSee borrowings.

MaintenanceAll actions necessary for retaining an asset as nearas practicable to an appropriate service condition,including regular ongoing day-to-day worknecessary to keep assets operating, eg roadpatching but excluding rehabilitation or renewal. Itis operating expenditure required to ensure that theasset reaches its expected useful life. Planned maintenance

Repair work that is identified and managedthrough a maintenance management system(MMS). MMS activities include inspection,assessing the condition againstfailure/breakdown criteria/experience,prioritising scheduling, actioning the work andreporting what was done to develop amaintenance history and improve maintenanceand service delivery performance.

• Reactive maintenanceUnplanned repair work that is carried out inresponse to service requests andmanagement/ supervisory directions.

• Specific maintenanceMaintenance work to repair components orreplace sub-components that needs to beidentified as a specific maintenance item in themaintenance budget.

• Unplanned maintenanceCorrective work required in the short-term torestore an asset to working condition so it cancontinue to deliver the required service or tomaintain its level of security and integrity.

Maintenance expenditure *Recurrent expenditure, which is periodically orregularly required as part of the anticipatedschedule of works required to ensure that the assetachieves its useful life and provides the requiredlevel of service. It is expenditure, which wasanticipated in determining the asset’s useful life.

MaterialityThe notion of materiality guides the margin of erroracceptable, the degree of precision required and theextent of the disclosure required when preparinggeneral purpose financial reports. Information ismaterial if its omission, misstatement or non-disclosure has the potential, individually orcollectively, to influence the economic decisions ofusers taken on the basis of the financial report oraffect the discharge of accountability by themanagement or governing body of the entity.

Modern equivalent assetAssets that replicate what is in existence with themost cost-effective asset performing the same levelof service. It is the most cost efficient, currentlyavailable asset which will provide the same streamof services as the existing asset is capable ofproducing. It allows for technology changes and,improvements and efficiencies in production andinstallation techniques

Net present value (NPV)The value to the organisation of the cash flowsassociated with an asset, liability, activity or eventcalculated using a discount rate to reflect the timevalue of money. It is the net amount of discountedtotal cash inflows after deducting the value of thediscounted total cash outflows arising from eg thecontinued use and subsequent disposal of the assetafter deducting the value of the discounted totalcash outflows.

Non-revenue generating investmentsInvestments for the provision of goods and servicesto sustain or improve services to the community thatare not expected to generate any savings orrevenue to the organisation, eg. parks andplaygrounds, footpaths, roads and bridges, libraries,etc.

OperationsRegular activities to provide services such as publichealth, safety and amenity, eg street sweeping,grass mowing and street lighting.

Operating expenditureRecurrent expenditure, which is continuouslyrequired to provide a service. In common use theterm typically includes, eg power, fuel, staff, plantequipment, on-costs and overheads but excludes


maintenance and depreciation. Maintenance anddepreciation is on the other hand included inoperating expenses.

Operating expenseThe gross outflow of economic benefits, being cashand non-cash items, during the period arising in thecourse of ordinary activities of an entity when thoseoutflows result in decreases in equity, other thandecreases relating to distributions to equityparticipants.

Operating expensesRecurrent expenses continuously required toprovide a service, including power, fuel, staff, plantequipment, maintenance, depreciation, on-costsand overheads.

Operations, maintenance and renewal financingratioRatio of estimated budget to projected expenditurefor operations, maintenance and renewal of assetsover a defined time (eg 5, 10 and 15 years).

Operations, maintenance and renewal gapDifference between budgeted expenditures in along term financial plan (or estimated future budgetsin absence of a long term financial plan) andprojected expenditures for operations, maintenanceand renewal of assets to achieve/maintain specifiedservice levels, totalled over a defined time (e.g. 5,10 and 15 years).

Pavement management system (PMS)A systematic process for measuring and predictingthe condition of road pavements and wearingsurfaces over time and recommending correctiveactions.

PMS ScoreA measure of condition of a road segmentdetermined from a Pavement Management System.

Rate of annual asset consumption *The ratio of annual asset consumption relative to thedepreciable amount of the assets. It measures theamount of the consumable parts of assets that areconsumed in a period (depreciation) expressed asa percentage of the depreciable amount.

Rate of annual asset renewal *The ratio of asset renewal and replacementexpenditure relative to depreciable amount for aperiod. It measures whether assets are beingreplaced at the rate they are wearing out with capitalrenewal expenditure expressed as a percentage ofdepreciable amount (capital renewalexpenditure/DA).

Rate of annual asset upgrade/new *A measure of the rate at which assets are beingupgraded and expanded per annum with capitalupgrade/new expenditure expressed as apercentage of depreciable amount (capitalupgrade/expansion expenditure/DA).

Recoverable amountThe higher of an asset's fair value, less costs to selland its value in use.

Recurrent expenditureRelatively small (immaterial) expenditure or thatwhich has benefits expected to last less than 12months. Recurrent expenditure includes operationsand maintenance expenditure.

Recurrent fundingFunding to pay for recurrent expenditure.

RehabilitationSee capital renewal expenditure definition above.

Remaining useful lifeThe time remaining until an asset ceases to providethe required service level or economic usefulness.Age plus remaining useful life is useful life.

RenewalSee capital renewal expenditure definition above.

Residual valueThe estimated amount that an entity would currentlyobtain from disposal of the asset, after deducting theestimated costs of disposal, if the asset werealready of the age and in the condition expected atthe end of its useful life.

Revenue generating investmentsInvestments for the provision of goods and servicesto sustain or improve services to the community thatare expected to generate some savings or revenueto offset operating costs, eg public halls andtheatres, childcare centres, sporting and recreationfacilities, tourist information centres, etc.

Risk managementThe application of a formal process to the range ofpossible values relating to key factors associatedwith a risk in order to determine the resultant rangesof outcomes and their probability of occurrence.

Section or segmentA self-contained part or piece of an infrastructureasset.


Service potentialThe total future service capacity of an asset. It isnormally determined by reference to the operatingcapacity and economic life of an asset. A measureof service potential is used in the not-for-profitsector/public sector to value assets, particularlythose not producing a cash flow.

Service potential remainingA measure of the future economic benefitsremaining in assets. It may be expressed in dollarvalues (Fair Value) or as a percentage of totalanticipated future economic benefits. It is also ameasure of the percentage of the asset’s potentialto provide services that is still available for use inproviding services (Depreciated ReplacementCost/Depreciable Amount).

Specific MaintenanceReplacement of higher value components/sub-components of assets that is undertaken on aregular cycle including repainting, replacement ofair conditioning equipment, etc. This work generallyfalls below the capital/maintenance threshold andneeds to be identified in a specific maintenancebudget allocation.

Strategic Longer-Term PlanA plan covering the term of office of councillors (4years minimum) reflecting the needs of thecommunity for the foreseeable future. It bringstogether the detailed requirements in the Council’slonger-term plans such as the asset managementplan and the long-term financial plan. The plan isprepared in consultation with the community anddetails where the Council is at that point in time,where it wants to go, how it is going to get there,mechanisms for monitoring the achievement of theoutcomes and how the plan will be resourced.

Sub-componentSmaller individual parts that make up a componentpart. Useful life

Either:

(a) the period over which an asset is expected tobe available for use by an entity, or

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

It is estimated or expected time between placing theasset into service and removing it from service, orthe estimated period of time over which the futureeconomic benefits embodied in a depreciable asset,are expected to be consumed by the organisation.

Value in UseThe present value of future cash flows expected tobe derived from an asset or cash generating unit. Itis deemed to be depreciated replacement cost(DRC) for those assets whose future economicbenefits are not primarily dependent on the asset'sability to generate net cash inflows, where the entitywould, if deprived of the asset, replace its remainingfuture economic benefits.

Source: IPWEA, 2009, AIFMG Glossary

Additional and modified glossary items shown *

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Roads - Asset Management Plan · SMT MF - KKS IO - JS MI - BH 2 21 November 2016 Elected Members...

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