City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET...

64
City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN City of Mitcham Open Space Asset Management Plan Scenario 1 Version 1 June 2015 FINAL

Transcript of City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET...

Page 1: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

City of Mitcham

Open Space

Asset Management Plan

Scenario 1 Version 1

June 2015 FINAL

Page 2: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Document Control

Document ID: 59.299.130925 nams.plus2 amp template v4

Rev No Date Revision Details Author Reviewer Approver

1 Jan 24, 2014 First draft, working document T Johnson

2 Mar 28, 2014 Initial draft extensively revised, including provision of graphs and financials

SW (AE)

3 4 June 2014 Edited Revision no. 2. Included textual information to place the plan in the Mitcham context. All figures, tables, graphs etc left unchanged.

T Johnson SW (AE) D Deere

4 16 June 2014 Annexures added SW (AE)

5 21 Jan 2015 Organisation chart updated SW (AE)

6 5 March 2015 List of reserves added as Appendix G SW (AE)

7 17/08/15 Approved as final by Council on 23 June, 2015 SW (AE) DD DD

© Copyright 2012 – All rights reserved.

The Institute of Public Works Engineering Australia.

www.ipwea.org.au/namsplus

Page 3: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

TABLE OF CONTENTS

1. EXECUTIVE SUMMARY ......................................................................................................................... 1 Context ................................................................................................................................................ 1 What does it Cost? ............................................................................................................................... 1 What we will do ................................................................................................................................... 1 What we cannot do ............................................................................................................................. 1 Managing the Risks .............................................................................................................................. 1 Confidence Levels ................................................................................................................................ 2 The Next Steps ..................................................................................................................................... 2

2. INTRODUCTION .................................................................................................................................... 4 2.1 Background ................................................................................................................................ 4 2.2 Goals and Objectives of Asset Management.............................................................................. 6 2.3 Plan Framework ......................................................................................................................... 6 2.4 Core and Advanced Asset Management .................................................................................... 8 2.5 Community Consultation ........................................................................................................... 8

3. LEVELS OF SERVICE .............................................................................................................................. 9 3.1 Customer Research and Expectations ........................................................................................ 9 3.2 Strategic and Corporate Goals ................................................................................................. 10 3.3 Legislative Requirements ......................................................................................................... 12 3.4 Current Levels of Service .......................................................................................................... 14 3.5 Desired Levels of Service .......................................................................................................... 18

4. FUTURE DEMAND .............................................................................................................................. 19 4.1 Demand Drivers ........................................................................................................................ 19 4.2 Demand Forecast ..................................................................................................................... 19 4.3 Demand Impact on Assets ........................................................................................................ 19 4.4 Demand Management Plan ..................................................................................................... 20 4.5 Asset Programs to meet Demand ............................................................................................ 21

5. LIFECYCLE MANAGEMENT PLAN ........................................................................................................ 22 5.1 Background Data ...................................................................................................................... 22 5.2 Open Space Risk Management Plan ......................................................................................... 25 5.3 Routine Operations and Maintenance Plan ............................................................................. 25 5.4 Renewal/Replacement Plan ..................................................................................................... 29 5.5 Creation/Acquisition/Upgrade Plan ......................................................................................... 34 5.6 Disposal Plan ............................................................................................................................ 35

6. FINANCIAL SUMMARY ....................................................................................................................... 36 6.1 Financial Statements and Projections ...................................................................................... 36 6.2 Funding Strategy ...................................................................................................................... 40 6.3 Valuation Forecasts .................................................................................................................. 40 6.4 Key Assumptions made in Financial Forecasts ......................................................................... 42 6.5 Forecast Reliability and Confidence ......................................................................................... 43

7. PLAN IMPROVEMENT AND MONITORING ......................................................................................... 44 7.1 Status of Asset Management Practices .................................................................................... 44 7.2 Improvement Program ............................................................................................................. 46 7.3 Monitoring and Review Procedures ......................................................................................... 46 7.4 Performance Measures ............................................................................................................ 46

8. REFERENCES ....................................................................................................................................... 47 9. APPENDICES ....................................................................................................................................... 48

Appendix A Maintenance Response Levels of Service ..................................................................... 49 Appendix B Projected 10 year Capital Renewal and Replacement Works Program ........................ 50 Appendix C Projected Upgrade/Exp/New 10 year Capital Works Program ..................................... 51 Appendix D Budgeted Expenditures Accommodated in LTFP.......................................................... 52 Appendix E Abbreviations ................................................................................................................ 53 Appendix F Glossary ......................................................................................................................... 54 Appendix G Reserve List

Page 4: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 1 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

1. EXECUTIVE SUMMARY

Context

This open space Asset Management Plan demonstrates responsive management of Council’s open space assets, services provided from these assets and compliance with regulatory requirements. The plan also communicates funding needed to provide Council’s required levels of service at current standards over a 20 year planning period.

This plan has been compiled using the best information available, including valuation data not strictly intended for developing asset renewal programs. It is therefore likely that the predicted renewal costs are understated.

The Open Space Service The Open Space network comprises:

Parks, gardens, woodland reserves and other public open space

Park infrastructure including walls, paths, fences signs and lighting

Sports infrastructure including tennis courts, ovals and playing fields, cricket pitches, fences, scoreboards, irrigation

Park furniture including picnic settings, flagpoles, monuments, drinking fountains

Open space infrastructure includes:

188 fences

104 irrigation systems

65 lighting systems

497 items of park furniture

35 paths

61 playgrounds

92 tennis courts These open space assets have a replacement value of $15.2m.

What does it Cost?

The projected outlays necessary to provide the services covered by this asset management plan includes operations, maintenance, renewal and upgrade of existing assets over the 10 year planning period is $11,953,000 or $1,195,000 on average per year.

Estimated available funding for this period is $11,751,000 or $1,175,000 on average per year which is 98% of the cost to provide the service. This is a funding shortfall of $20,000 on average per year. Projected expenditure required to provide services in the asset management plan compared with planned

expenditure currently included in the Long Term Financial Plan are shown in the graph below.

What we will do

We plan to provide Open Space services for the following:

Operation, maintenance, renewal and upgrade of open space assets to meet service levels set in annual budgets.

$7.51m of renewals within the 10 year planning period.

What we cannot do

We do not have enough funding to provide all services at the desired service levels or provide new services. Works and services that cannot be provided under present funding levels are:

Renewal of existing assets to a higher standard than is currently in place, which is generally the norm for playgrounds by example

Provision of new assets other than that provided by the limited budget within the Long Term Financial Plan

Managing the Risks

There are risks associated with providing the service and not being able to complete all identified activities and projects. We have identified major risks as:

Open space assets -inadequate funds available for maintenance and renewal

Sport & recreation assets -inadequate funds available for maintenance and renewal

We will endeavour to manage these risks within available funding by:

Undertaking condition and extent data collection exercise for open space assets

Defining appropriate service levels to assets

Page 5: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 2 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Confidence Levels

Asset information on which this asset management plan is based has a relatively low level of confidence as the asset database is incomplete in some aspects.

The Next Steps

The actions resulting from this asset management plan are:

Review existing database of open space assets

Conduct condition assessment

Undertake revaluation of assets

Make greater use of AMS

Develop open space strategy

Develop sport & recreation plan

Create master plans for reserves to be upgraded

Develop linkages with other strategic planning documents

Page 6: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 3 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Questions you may have

What is this plan about?

This asset management plan covers open space assets that contribute to the attractive amenity desired by the community, serve the community’s recreational and sporting needs, sustain local habitats and deliver environmental and ecosystem services to local and widespread populations. These assets support passive and active community involvement and interaction leading to improved socialisation and enabling people to better enjoy life in Mitcham.

What is an Asset Management Plan?

Asset management planning is a comprehensive process which ensures delivery of services from assets is provided in a financially sustainable manner.

An asset management plan details information about assets including actions required to provide an agreed level of service in the most cost effective manner. Asset management plans define the services to be provided, how the services are provided and what funds are required to provide the services.

Why is there a funding shortfall?

The City of Mitcham’s open space assets were largely purchased and constructed by Council, occasionally with external funding support from the state and federal governments, or were gifted by developers as required by planning legislation. Many of these assets are approaching the end of their expected serviceable life and they require replacement. As a result, service provision through these assets is decreasing and maintenance costs are increasing. Our present funding levels are insufficient to continue to provide existing services at current levels in the medium term.

What options do we have?

Resolving the funding shortfall involves several steps: 1. Improving asset knowledge so that data

accurately details the asset inventory, how assets are performing and when assets are not able to provide the required service levels

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

3. Identifying and managing risks associated with providing services from open space assets

4. Making trade-offs between service levels and costs to ensure that the community receives the best return from open space assets

5. Identifying assets that are surplus to needs, so disposal may deliver savings in future operations and maintenance costs

6. Consulting with the community to ensure that open space services and costs meet community needs and are affordable

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

8. Seeking additional funding from governments and other bodies to better reflect a ‘whole of government’ funding approach to open space assets and services

What happens if we don’t manage the shortfall?

It is likely that we will have to reduce service levels in some areas unless new sources of revenue are found. For open space assets, the service level reduction may necessitate consideration of reductions in the area of community land available and provision of fewer sporting and recreational facilities. Inadequate resourcing may also result in the inability to remove or replace assets which have exceeded their useful life, are unable to be effectively maintained and which may present or develop hazards, thus increasing corporate and community risk.

What can we do?

We can develop options, costs and priorities for future open space assets and consult with the community to plan future services to match the community service needs with ability to pay for services and maximise community benefits against costs.

Page 7: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 4 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

2. INTRODUCTION

2.1 Background

This plan demonstrates responsive management of assets and services derived from them. It complies with regulatory requirements. It identifies the funding required to deliver desirable levels of service from open space infrastructure over the next 20 years. It follows the format for asset management plans recommended in Section 4.2.6 of the International Infrastructure Management Manual1. It to be read in conjunction with the City of Mitcham’s asset management policies and strategies and the following associated planning documents:

Planning For Tomorrow’s Community Today, City of Mitcham Strategic Plan 2013 – 2022

City of Mitcham Corporate Plan 2009 – 2014

City of Mitcham Business Plan 2013-2015

City of Mitcham 2013/14 Long Term Financial Plan

Community Land Management Plans Management of open space assets requires adequate financial resources. The practices developed for managing ‘hard assets’ have historically been less rigorously applied to open space infrastructure assets or ‘green infrastructure’. Consequently, green infrastructure databases require ongoing development so that they can accurately document these assets and reflect their real costs and benefits.

The open space assets covered by this asset management plan are shown in Table 2.1. These assets are used to provide sport and recreation services to the Mitcham community.

Table 2.1: Assets covered by this Plan

Asset category Dimension Replacement Value ($)

Fences 188 off (not incl. tennis court fences) 1,799,938

Irrigation Systems 104 of 1,648,624

Lighting Systems 65 of 1,141,492

Park Furniture 497 of 4,456,304

Pathways 35 of 413,155

Playgrounds 61 of 2,235,363

Tennis Courts 92 of 3,514,288

TOTAL $15,209,164*

* The replacement value shown in the above table and used in development of this asset management plan does not necessarily reflect Councils audited replacement valuation. As an example, tennis court values have been separated into their components (surface treatment, seal and base) which each have different useful lives and replacement costs. When comparing their grouped cost to Councils valuation (for the overall court) the grouped cost is higher. In other cases the valuation figures reflect the audited valuation.

Annexure G contains a list of reserves with infrastructure on them that is covered by this Asset Management Plan.

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

Page 8: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 5 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

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

Table 2.1.1: Key Stakeholders in the Asset Management Plan

Key Stakeholder Role in Asset Management Plan

Councillors Represent needs of community/shareholders,

Establish the strategic vision and budget

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

Ensure organisation is financially sustainable.

CEO/ Directors Inform elected Council with regard to setting strategic direction and budgets

Implement the strategic vision and budget set out by the elected Council

Establish operational vision and policy

Empower, support and oversee delivery of services

Engineering & Horticulture department

Monitoring of assets and advising of asset management obligations, needs and community desires

Development of the open space asset management plan

Budget preparation

Project delivery

Financial reporting

Community Establish service delivery levels through consultation & representation

The City of Mitcham’s organisational structure for service delivery from open space assets is detailed below:

This Asset Management Plan has been developed under the Engineering and Horticulture department.

Page 9: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 6 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

2.2 Goals and Objectives of Asset Management

The City of Mitcham exists to support and serve the local community. Some of the services delivered by Council require open space assets. Council acquires open space assets through direct purchase, through construction by staff or contractors, and through donation of assets by community groups, individuals, developers and others. Mitcham’s goal in managing open space assets is to sustain the desired level of service, as amended from time to time, in the most cost effective manner for present and future citizens.

The key elements of open space asset management are:

Providing a defined level of service and monitoring performance,

Managing the impact of growth through demand management and strategic 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 Open Space Asset Management Plan Framework

Key elements of the Asset management plan are

To specify the services and levels of service to be provided by Council (levels of service)

To plan for continued and future service delivery (future demand)

To ensure our existing and future asset life cycles are optimised to provide defined levels of service and the best possible value for money (life cycle management)

To determine the resources necessary to deliver the defined services, to communicate this information with stakeholders and then obtain the required funding (financial summary)

To review Council’s open space asset management practices, to streamline and continuously improve them

To specify how the plan will be monitored and its various aspects reported to ensure it meets required 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.

Page 10: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 7 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

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

IS THE PLAN

AFFORDABLE?

CORPORATE PLANNING

Confirm strategic objectives and establish AM

policies, strategies & goals.

Define responsibilities & ownership.

Decide core or advanced AM Pan.

Gain organisation commitment.

REVIEW/COLLATE ASSET INFORMATION

Existing information sources

Identify & describe assets.

Data collection

Condition assessments

Performance monitoring

Valuation Data

ESTABLISH LEVELS OF SERVICE

Establish strategic linkages

Define & adopt statements

Establish measures & targets

Consultation

LIFECYCLE MANAGEMENT STRATEGIES

Develop lifecycle strategies

Describe service delivery strategy

Risk management strategies

Demand forecasting and management

Optimised decision making (renewals, new works,

disposals)

Optimise maintenance strategies

FINANCIAL FORECASTS

Lifecycle analysis

Financial forecast summary

Valuation Depreciation

Funding

IMPROVEMENT PLAN

Assess current/desired practices

Develop improvement plan

ITERATION

Reconsider service statements

Options for funding

Consult with Council

Consult with Community

DEFINE SCOPE &

STRUCTURE OF PLAN

INF

OR

MA

TIO

N M

AN

AG

EM

EN

T, a

nd

DA

TA

IM

PR

OV

EM

EN

T

AM PLAN

REVIEW AND

AUDIT

IMPLEMENT

IMPROVEMENT

STRATEGY

ANNUAL PLAN /

BUSINESS PLAN

INF

OR

MA

TIO

N M

AN

AG

EM

EN

T, a

nd

DA

TA

IM

PR

OV

EM

EN

T

Page 11: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 8 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

2.4 Core and Advanced Asset Management

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

Future revisions of this asset management plan will move towards ‘advanced’ asset management using a ‘bottom up’ approach for gathering asset information for individual assets to support the optimisation 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 through feedback on public display of draft asset management plans prior to adoption by Council. Future revisions will incorporate community consultation on service levels and costs of providing the services, to assist Council to match the level of service needed by the community, service risks and consequences with the community’s ability and willingness to pay for services.

3 IPWEA, 2011, IIMM.

Page 12: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 9 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

3. LEVELS OF SERVICE

3.1 Customer Research and Expectations

The City of Mitcham has not recently researched customer expectations specifically with regard to levels of service in the provision of open space assets. Such consultation should become a regular process in reviewing Council’s service delivery, and specific public consultation may be necessary to inform future updates of this asset management plan.

In the interim however, given the time constraints and the ‘top down’ approach being implemented, knowledge of customer expectations is based on current knowledge and responses to Council’s Annual Residents Survey. In 2012 this telephone survey polled a sample of 400 residents on their level of satisfaction with Council’s services; it identified the service satisfaction levels detailed in Table 3.1. Council uses this information in developing its Strategic Plan and in allocation of resources in the budget.

Table 3.1: Community Satisfaction Survey Levels

Performance Measure Important (2012)

Satisfied (2012)

Performance Gap - 2010

Performance Gap - 2011

Performance Gap - 2012

That Council provides and maintains sport and recreational areas and parks and gardens

87% 67% 29% 25% 20%

That Council provides and maintains playgrounds

80% 63% 25% 23% 17%

That Council provides access to community services, activities and facilities

68% 52% N/A 14% 16%

That Council provides access to youth activities

58% 41% 37% 25% 17%

These figures clearly show that the community highly values the open space and associated assets which Council provides, with 87% seeing the provision of sporting and recreational areas as highly important. As this figure far exceeds the participation level in active formal sports it is assumed that many in the community value open space for its passive uses and general amenity.

The high percentage (80%) of respondents to the survey who value playgrounds highly exceeds the numbers who use them. This possibly reflects increasing importance on these assets due to changing family structures, parenting and grand-parenting responsibilities.

The importance the community places of general provision of amenities, facilities and activities particularly with regard to youth is also identified in the survey. Continuing to fund the provision and appropriate maintenance of these assets and the services they provide reflects not only the wishes of local communities but also broader goals of other levels of government with regard to community health and wellbeing.

Link between Rates and Service Levels

With the understanding that the level of Council’s rates income is directly related to the number and quality of services provided, residents were also asked if they thought that Council should concentrate on keeping rates as low as possible (even if this affects the services provided) or if maintaining and improving the present level of services was more important. Almost three in five (59% in 2012, increasing from 57% in 2011 and 56% in 2010) residents stated that maintaining the present level of services was more important than keeping rates as low as possible. These results are illustrated in Graph 3.4:

Page 13: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 10 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Graph 3.1: Rates v Levels of Service

Resident responses demonstrate that open space services provided by Council are highly valued by the community. They also indicate that in the opinion of the community Council is under performing in this area. It would appear from the survey results that there may also be an opportunity to increase rates to fund service improvements in this area.

3.2 Strategic and Corporate Goals

This asset management plan is prepared under the direction of the City of Mitcham’s vision, mission, goals and objectives.

Our vision is:

A healthy, inclusive and prosperous community, living and working in harmony with the environment

Relevant organisation goals and objectives and how these are addressed in this asset management plan are:

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

Goal Objective How Goal and Objectives are addressed in Asset management plan

Accessible City

Streets, open spaces, community buildings and facilities will be accessible, connected and people friendly

Objective 2. Connected Community Places (we have places to meet).

High quality, well serviced and accessible public places and community facilities where people can meet, learn and connect with one another.

Objective 3. Open Space Recreation Facilities (we have places to relax and play)

Ensure the effective and sustainable management of Council’s open space assets

Undertake regular, timely and cost effective maintenance of Council’s open space

Renew or refurbish open space assets to maintain acceptable service

Regularly review service delivery in consultation with the community to drive service level change

Page 14: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 11 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Goal Objective How Goal and Objectives are addressed in Asset management plan

Open space, parks and gardens and sporting and recreational facilities that provide opportunities for relaxation, leisure, physical activity and play

Ensure appropriate funding is applied to enable timely open space asset renewal and maintenance

Liveable City

A well-designed and safe City responsive to lifestyle, heritage, environment and landscape

Objective 5. Green Streetscapes (we have street appeal)

Functional streetscapes that enhance amenity and are sensitive to the built form, landscape and local environmental conditions

Objective 7. Safe Public Realm (we are a safe place to live and visit)

People feel safe in their homes, on local streets, in parks and when dining and travelling throughout the City.

Ensure effective and sustainable management of streetscapes’

Undertake effective maintenance of streetscapes

Renew or refurbish streetscape assets to maintain acceptable service

Review service delivery in consultation with the community to drive service level change

Ensure appropriate funding is available to enable timely streetscape asset renewal and maintenance

Healthy Environment

A green and biodiverse City characterised by clean air, land, water and responsible consumption

Objective 12. Biodiversity (we have unique areas of bush habitat)

Natural habitat protected and expanded by reconnecting vegetation corridors along waterways, linear reserves, open space and the streetscape

Objective 14. Water Smart (we save water)

Healthy Catchments and waterways that protect the environment, people and property

Objective 15. Responsible Consumption and Waste Minimisation (we make the most of what we have)

Natural resources are conserved and waste is minimised through avoidance, reuse, recycling or recovery.

Renew or refurbish woodland assets to maintain acceptable service

Review service delivery in consultation with the community to drive service level change

Ensure appropriate funding is available to enable timely woodland asset renewal and maintenance

Renew or refurbish open space irrigation systems to ensure effective water use

Renew or refurbish open space WSUD devices to ensure effective ongoing harvesting of stormwater to keep reserves green

Excellence in Government

Objective 19. Financial Sustainability (we are good with money)

Review service delivery in consultation with the community to drive service level change

Page 15: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 12 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Goal Objective How Goal and Objectives are addressed in Asset management plan

A Council with strong leadership that values its people, customers and partners

Responsible management of Council’s financial resources and community assets, and the equitable distribution of costs now and in the future

Objective 20. Service efficiency & effectiveness (we provide value for money)

Services, facilities and infrastructure assessed for community need and provided where Council is in the best position to do so efficiently and cost effectively or through partnerships

Objective 21. Good Governance (we do things right)

Accountable governance and robust corporate systems for decision making and risk management

Objective 23. Customer Focus (we focus on you)

An organisation focused on its internal and external customers

Ensure appropriate funding is available to enable timely woodland asset renewal and maintenance

Renew or refurbish open space assets as required to ensure effective and efficient management and use of resources

The City of Mitcham will exercise its duty of care to ensure public safety in accordance with its risk management plan prepared in conjunction with this asset management plan. Management of risks is covered in Section 5.2

3.3 Legislative Requirements

Numerous legislative, regulatory and industry requirements govern and inform and in some cases restrict Council’s asset management practices, these include:

Table 3.3: Legislative Requirements

Governing Document Requirement

Local Government Act Sets out role, purpose, responsibilities and powers of local governments including the preparation of a long term financial plan supported by asset management plans for sustainable service delivery.

Aboriginal Heritage Act 1988 Constraint:

Provides for the protection and preservation of aboriginal heritage and includes legislation for the discovery, acquisition, damage or sale of sites, objects or remains of aboriginal significance.

Development Act 1993 & Regulations Requires the provision of open space areas and controls the type and form of development that can be placed on them and the building rules that control design

Disability Discrimination Act 1992 & Regulations

Ensures accessibility of open space and the facilities provided on it

Environment Protection Act 1993 Controls activities which might impact on the environment of open space sites,

Page 16: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 13 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Governing Document Requirement

possibly limiting or restricting the use which may be made of open space areas

Environment Protection and Biodiversity Conservation Act 1999

Affords protection for flora, fauna and habitats which may exist on open space and other lands under Council’s care and control

Fences Act 1975 Prescribes conditions under which Council is obliged to partially fund common boundary fencing

Fire and Emergency Services Act 2005 Prescribes Council’s duties and responsibilities with regard to preventing the outbreak and spread of fire on lands including public open space

Local Government Act 1999 & Regulations

Sets out role, purpose, responsibilities and powers of local governments including the preparation of a long term financial plan supported by asset management plans for sustainable service delivery

National Parks and Wildlife Act 1972 Defines controls on endangered, rare and vulnerable animal and plant species which may impact on management of open space reserves

Native Vegetation Act 1991 Details Council’s responsibilities in preserving native vegetation on lands under its control

Natural Resources Management Act Prescribes controls to ensure the sustainable management of land, water resources, animals and plants

Recreational Greenways Act 2000 Empowers the Government of South Australia to construct trails for recreational purposes

Work, Health and Safety Act & Regulations (2012)

Sets out roles and responsibilities to secure the health, safety and welfare of persons at work, including those engaged in constructing or maintaining assets on public open space

Mitcham (City) Development Plan Outlines the objectives and principles of development control for the whole Council area and individual zones.

Australian Standards AS/NZS4422 – 1996 Playground Surfacing AS4685-2004 Playground Equipment AS4486-1-1997 Playground Inspection & Maintenance

Sets out requirements for surfacing to be used in children’s playgrounds Details standards for playground equipment and requirements for the development, installation, inspection and maintenance of playgrounds and playground equipment

Community Land Management Plans Identify and categorise all of Council’s open space land, the purpose for which it is held and general maintenance requirements

City of Mitcham State of the Environment Report

Identifies key environmental and biodiversity assets

Specific Precinct and Open Space Reserve Management and Maintenance Plans

Quarry Reserves

Conservation Reserves

Identify management priorities for specific open space reserves

Historic Area conservation Management Plans

Springfield Estate Management Plan

Colonel Light Gardens Conservation Management Plan

Mitcham Village Heritage Implementation Plan

Set out objectives for construction and maintenance of open space assets in historic conservation areas

Page 17: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 14 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

3.4 Current Levels of Service

Service levels are defined in two distinct terms: community levels of service and technical levels of service.

Community Levels of Service measure how the community receives and perceives the service and whether the organisation 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 technical measures of performance. These technical measures relate to the allocation of resources to service activities that the organisation undertakes to best achieve the desired community outcomes and demonstrate effective organisational performance.

Technical service measures are linked to annual budgets covering:

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

Maintenance – the activities necessary to retain an asset as near as practicable to an appropriate service condition (eg road patching, unsealed road grading, building and structure repairs),

Renewal – the activities that return the service capability of an asset up to that which it had originally (eg frequency and cost of road resurfacing and pavement reconstruction, pipeline replacement and building component replacement),

Upgrade – the activities to provide an higher level of service (eg widening a road, sealing an unsealed road, replacing a pipeline with a larger size) or a new service that did not exist previously (eg a new library).

Asset managers plan, implement and control technical service levels to influence the customer service levels.4

Our current service levels are detailed in Table 3.4.

4 IPWEA, 2011, IIMM, p 2.22

Page 18: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 15 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Table 3.4: Current and Desired Service Levels

Key Performance

Measure

Level of Service Objective

Performance Measure Process

Current Level of Service Optimal Level of Service

COMMUNITY LEVELS OF SERVICE

Quality Quality standard of service provided to the community

Customer service requests, relating to: BBQ Maintenance Furniture Irrigation Lights Play equipment Rubbish bins Dog bags

4year average 9/10 to 12/13 4 27 37 18 84 24 21

4 15 37 14 35 25 18

Function Provision & maintenance of sport, recreation areas & parks / gardens Provision & maintenance of playgrounds

Customer satisfaction survey Customer satisfaction survey

20% performance gap 17% performance gap

10% gap 10% gap

Access Community services, activities & facilities are accessible Council provides access to youth facilities

Customer satisfaction survey Customer satisfaction survey

16% performance gap 17% performance gap

10% gap 10% gap

TECHNICAL LEVELS OF SERVICE

Operations Operations have not been considered in the preparation of this AMP

Maintenance Open Space expenditure

Budget $389k (2.56% CRC) $389k (2.56% CRC)

Renewal Renewal expenditure Unfunded renewals $401k in 2012 (current) $137k in 2022 $3,084k in 2032

$401k in 2012 (current) $0k in 2022 $0k in 2032

Budget (av over 10 years)

$751k $765k

Upgrade/New Upgrade / new expenditure

Budget (av over 10 years)

$35k $35k

Council has classified its reserves into the following hierarchy:

Sports and Recreation

Category one

Category two

Category three

Category four

Category five Council has also developed detailed performance measures and targets for its reserves hierarchies. The following table details the performance measures for Category One reserves.

Page 19: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 16 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Management Issues Proposals Performance Targets Performance Measures

Landscape Character and Heritage Value

Maintain area in keeping with the character of the surrounding area. Heritage Litter Fences and park furniture including gazebos Lighting Paths Graffiti Foot Bridges Signage

Maintain existing character of the neighbourhood while providing an amenity for the local community. Reflect the values of the CLG Conservation Management Plan. Bins/grounds checked regularly. State of furniture checked on a regular basis. Regular checks to replace faulty/broken lights. Checked and repaired as required. Offensive graffiti to be removed in 24 hours. All highly visible graffiti to be removed from Council property. Checked on a regular basis and repaired as required. Checked and maintained on a regular basis.

Reduction in the level of complaints regarding misuse of grounds or maintenance of area. Compliance with the CLG Conservation Management Plan. Area to be free of litter. Located in suitable areas and kept in good repair. Lights are operational. Paths are in an appropriate location, are safe to use and clear of obstructions. Highly visible park structures and surrounds to be graffiti free. Bridges are safe for community use and comply with regulations. Signage is legible and in good repair.

Page 20: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 17 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Management Issues Proposals Performance Targets Performance Measures

Playground Equipment Provide a public recreation facility to the community. Create challenging and interesting opportunities that cater for development requirements of playground users. Provide equipment specifically designed for toddlers, early childhood, junior and senior groups. Provide some active play structures suitable for use by the wider community.

Minor repairs that are undertaken during this routine inspection are to be recorded on an appropriate inspection sheet. Major repairs or maintenance required is to be recorded on the inspection sheet and handed to the coordinator for appropriate action. Soft fall areas are to be included in the six weekly check and appropriate action taken to keep them clear of weeds, litter, broken glass and other sharp objects. Install new equipment in accordance with Council’s replacement program. Any parts replaced will be with genuine parts (which adhere to Australian Standards) from an appropriate manufacturer. Up to date inventory of all playground facilities maintained.

Soft fall area to be maintained at the required depth and in an appropriate condition. All soft areas will be clear of foreign objects (such as broken glass). All playgrounds shall be audited every ten years in respect to condition, safety, maintenance standards & longevity.

Irrigation To provide a suitable automatic irrigation service that makes best possible use of resources while providing acceptable standards of turf.

Automatic systems should be programmed to match the needs of a particular area in relation to soil types, grass type, use of area, climatic conditions and Government restrictions. Minor repairs to be undertaken as soon as possible. Major repairs to be included in scheduled works. Turf maintained to best level within relevant water restrictions

Efficient use of water while delivering a quality grass surface. All watering carried out according to relevant prescribed water restrictions.

Page 21: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 18 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Management Issues Proposals Performance Targets Performance Measures

Barbecue Facilities Provide BBQs where there has been extensive consultation and agreement with the community.

Maintained in a condition suitable for local community use.

BBQs to be cleaned regularly. Fat tins replaced/cleaned weekly. Regular checks on plates to ensure they are in good working order and faults reported. All electric BBQs to be checked on a regular basis.

Car Park Provide off road car parking for community use.

Car park is safe, accessible and maintained in a good condition.

Car park is clearly defined for community use, is free of pot holes and is easily accessible.

Skate Park / BMX track (where applicable)

Provide a skate park/ BMX track where there has been extensive consultation with the community over location, hours of use and age of users. Maintain a facility that is suitable for use by skate boarders and bike riders.

Site checked and cleared of sand, stones etc on weekly basis. Routine inspection undertaken six weekly. Major repairs or maintenance required is to be recorded on an inspection sheet and handed to the coordinator for appropriate action.

Area free of cans, bottles, paper and foreign matter. Signs clear and easy to read ie. no graffiti or damage. Facility checked for cracks and structural damage.

3.5 Desired Levels of Service

Desired levels of service are determined through community engagement with regard to both assets associated with Council’s open space and setting annual budgets and long term financial plans. Higher levels of service generally have a higher cost of provision, so ambitious desires are often moderated during budget deliberations.

This asset management plan aims to sustain existing levels of service, unless specifically noted elsewhere, and is focussed on financially sustainable service levels.

Page 22: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 19 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

4. FUTURE DEMAND

4.1 Demand Drivers

Continuing to provide the community with easily accessible quality open and public spaces, recreation and sporting facilities provides a number of challenges. These challenges include increasing population and changes in demographics, land division and development including urban consolidation, vehicle ownership rates, consumer preferences and expectations, technological change, economic factors, horticultural practices, environmental awareness, legislative change with respect to native vegetation management and tree protection, etc.

Mitcham is an ageing community, with a higher proportion of people in the older age groups compared to other areas of Adelaide. Along with the Australian population as a whole, we are living longer, with life expectancy predicted to increase further over coming years. A recent survey revealed that residents of Mitcham have the longest life expectancy of any Council in South Australia. Facilities, assets and services provided on and through our open space network must change to remain relevant to this changing community and environment.

The human health benefits of quality public and open space are well documented and of themselves justify the professional management of green infrastructure. Green infrastructure and open space also underpin vibrant commercial and business activity, afford synergies with built infrastructure and sustain ecosystem services delivered through our natural environment, further highlighting their value and the wisdom of applying effective asset management processes and adequate resources to their provision.

Increasing population density and reduced private green space is increasing demands on public open space. This was highlighted in the recent drought when water restrictions limited Council’s capacity to irrigate sports fields and reserves. Negative community response to the widespread decommissioning of irrigation systems served to reveal the high demand for effective and efficient systems and alternative means of supply. Many of Mitcham’s irrigation systems were installed in the 1980s and are reaching the end of their service life, enabling their replacement with more efficient systems using alternative supplies over the coming decades.

4.2 Demand Forecast

Demand drivers that may impact future service delivery and asset utilisation 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 are shown in Table 4.3.

Table 4.3: Demand Drivers, Projections and Impact on Services

Demand drivers Present position Projection Impact on services

Ageing population Status quo General ageing of the population

Increases need for open spaces with assets and amenities suited to the aged. May require additional open spaces within shorter walking distances of population catchment areas.

Playground and playspace upgrades

Status quo Demand for increasingly complex, elaborate and expensive playground equipment

Substantially increased requirements for both capital and operational financial resources

Playground and playspace upgrades

Status quo Increasing demand for natural and creative play areas with additional nature based facilities

Increased need for targeted maintenance of natural play areas (e.g. weeding, litter & debris, tree management)

Page 23: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 20 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Demand drivers Present position Projection Impact on services

Increasing awareness of the health and wellbeing benefits of nature and exercise

Demand driven, e.g. exercise equipment installation on Riverside Reserve

Urban consolidation and climate change combined will increase need for readily accessible passive and active recreation and exercise areas

Increased need to include exercise equipment on pen space reserves, increased need for lighting to enable its use during evenings

Increasing awareness of flood mitigation responsibilities

Investigations and plans indicate Brownhill Creek and Sturt River are multi-issue corridors with massive multi-use potential

Demand to manage and upgrade flood mitigation, conservation and recreational aspects of riparian corridors will increase though tightened legislative requirements. External funding opportunities may arise

Increased connectivity of reserves will be required along creeks and the Sturt River. Creek channel upgrading must provide for environmental and human aspects as much as hydrological engineering necessities.

Increase living density Status quo Urban consolidation through housing renewal will increase demands placed on environmental, cultural and recreational assets and open spaces.

Need to increase the number and/or scale of open space areas and green streetscape linkages

Increase living density Status quo Increased hard surface area & resulting increased stormwater discharge

Demand for multiple uses within open space areas e.g. to include more stormwater management capacity through water sensitive urban design

Changing climate Adaptation through resilience programs etc.

Open space areas and assets will need to suit more extreme weather events and climatic conditions

Reserve development concepts must focus more on shade and water provision, water harvesting and re-use,

4.4 Demand Management Plan

Demand for new or upgraded 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 managing failures.

Non-asset solutions focus on providing the required service without the need for the organisation to own the assets and management actions including reducing demand for the service, reducing the level of service (allowing some assets to deteriorate beyond current service levels) or educating customers to accept appropriate asset failures5. Examples of non-asset solutions include providing services from existing infrastructure such as aquatic centres and libraries that may be in another community area or public toilets provided in commercial premises.

Opportunities identified to date for demand management are shown in Table 4.4. Further opportunities 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

Upgrade to playground assets

High cost of installing and maintaining upgraded equipment

Undertake analysis of existing equipment locations in relation to community demand and investigate upgrades of only identified high usage sites

5 IPWEA, 2011, IIMM, Table 3.4.1, p 3|58.

Page 24: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 21 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

4.5 Asset Programs to meet Demand

Some of the new assets required to meet growth will be gifted to Council following land division and development. New assets constructed and acquired by the City of Mitcham are discussed in Section 5.5. The cumulative value of new contributed and constructed asset values are summarised in Figure 1.

Figure 1: Upgrade and New Assets to meet Demand

Upgrade / new assets have only been considered in years 2014, 2015 and 2016 of Councils current long term financial plan with no new assets considered in the period 2017 – 2022. For the later half of the asset management plan period (2023-2032) it has been assumed that an average of expenditure for new assets over the first half of the plan will be provided on an annual basis.

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

Page 25: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 22 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

5. LIFECYCLE MANAGEMENT PLAN

The lifecycle management plan details how the organisation plans to manage and operate the assets at the agreed levels of service (defined in Section 3) while optimising life cycle costs.

5.1 Background Data

5.1.1 Physical parameters

The City of Mitcham covers an area of 76 square kilometres and contains a mix of suburban, rural and natural landforms. The City is generally residential but with commercial development along arterial roads and major retail precincts in Torrens Park and Blackwood. Light industrial areas exist on the eastern side of South Road in Clarence Gardens, Melrose Park and Saint Marys. Flinders Medical Centre, Flinders Private Hospital and The Repatriation Hospital are located in the City. Aged care and retiree residential facilities are located both in the “Hills” and “Plains” areas. Two university campuses: Flinders University and the University of Adelaide’s Waite Campus are located within the City, as are a number of public and private schools.

The Hills Face Zone divides the suburban plains areas from the Mitcham Hills. Hills areas include some of Adelaide’s greenest suburbs. Formal avenues, green reserves and recreational facilities add to the amenity and desirability of the plains suburbs, while Hills areas support more rural outlooks with lower density development and natural woodland areas of national and local significance. Plains areas support approximately 65% of Mitcham’s population, with the remaining 35% living in the hills. The value Mitcham’s community places on these natural and built assets reflects the enviable lifestyles they underpin.

The assets covered by this asset management plan are shown in Table 2.1. These assets are distributed throughout the community across the urban plains and hills areas. Asset acquisition and constructed has occurred across a wide span of time in response to progressive development, community and political foci, external agency goals and funding. These factors have contributed to an irregular asset age profile.

The age profile of the assets included in this Asset management plan is shown in Figure 2.

Figure 2: Asset Age Profile

The ages shown in the above graph have generally been calculated by using the remaining life and assumed useful life of the asset concerned i.e. age = useful life – remaining life.

Page 26: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 23 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

5.1.2 Asset capacity and performance

The City of Mitcham’s services are generally provided to meet design standards where these are available. 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

Fencing on tennis courts and reserves < ha in size

Generally in poor condition, historically overlooked in the asset inventory

Fencing around quarry faces Historically overlooked in asset inventory

Internal paths within parks Occasionally overlooked in renewal programs with many now in poor condition

Monuments Overlooked within renewal programs and many now in poor condition

Non-traditional open space assets such as detention basins

Maintenance (de-silting) has been overlooked

Bores / pumps (irrigation) Not all units have been identified in the asset register

The above service deficiencies were identified from internal consultation.

5.1.3 Asset condition

Much of the data used in the preparation of this AMP has its source from an audit done by licenced valuers for the purpose of asset financial compliance rather than renewal modelling. In undertaking this audit the valuers placed a condition rating (ranging from 1 to 5) against most assets. The condition profile of from this audit is shown in Figure 3.

Fig 3: Asset Condition Profile

Condition is measured using a 1 – 5 grading system6 as detailed in Table 5.1.3.

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

Page 27: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 24 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Table 5.1.3: Simple Condition Grading Model

Condition Grading Description of Condition

1 Very Good: only planned maintenance required

2 Good: minor maintenance required plus planned maintenance

3 Fair: significant maintenance required

4 Poor: significant renewal/rehabilitation required

5 Very Poor: physically unsound and/or beyond rehabilitation

5.1.4 Asset valuations

The value of assets recorded in the asset register as at 30 June 2013 covered by this asset management plan is shown below. Assets were last revalued at 1 July 2012. Assets are valued at brownfield rates

Current Replacement Cost $15,209,000

Depreciable Amount $15,209,000

Depreciated Replacement Cost7 $6,998,000

Annual Depreciation Expense $781,000

Useful lives were reviewed in 2011 by Council’s valuers.

Key assumptions made in preparing the valuations were:

accuracy of unit rates

accuracy of useful lives

assumptions made in determining the remaining life of assets through the condition assessment and valuation process

Completeness of the valuation audit in identifying all assets Various ratios of asset consumption and expenditure have been prepared to help guide and gauge asset management performance and trends over time.

Rate of Annual Asset Consumption 5.1% (Depreciation/Depreciable Amount)

Rate of Annual Asset Renewal 3% (Capital renewal expense/Depreciable amount)

Rate of Annual Asset Upgrade/New 0% (Capital upgrade expense/Depreciable amount)

Rate of Annual Asset Upgrade/New 0% (including contributed assets)

In 2013 the organisation plans to renew assets at 58.2% of the rate they are being consumed and will be increasing its asset stock by 0% in the year.

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

Residual

Value

Depreciable

Amount

Useful Life

Current

Replacement

Cost

End of

reporting

period 1

Annual

Depreciation

Expense

End of

reporting

period 2

Accumulated

Depreciation Depreciated

Replacement

Cost

Page 28: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 25 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

5.2 Open Space Infrastructure Risk Management Plan

An assessment of risks associated with service delivery from open space assets has identified critical risks that will result in loss or reduction in service or a ‘financial shock’ to the organisation. The risk assessment process identifies credible risks, the likelihood of the risk event occurring and the consequences should the event occur. From this, risks can be rated, and evaluated and a risk treatment plan for non-acceptable risks can be developed.

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

Table 5.2: Critical Risks and Treatment Plans

Service or Asset at Risk

What can Happen Risk Rating (VH, H)

Risk Treatment Plan Residual Risk *

Treatment Costs

Community open space

Inadequate funds allocated for maintenance and timely replacement of community open space assets **

H Collect condition, extent and service level data against community open space assets, upload and reconcile asset register with this new data

If data is not collected property then risk remains

$60,000

Sport and recreation

Inadequate funds allocated for maintenance and timely replacement of sport and recreation assets**

H Collect condition, extent and service level data against sport and recreation assets, upload and reconcile asset register with this new data

If data is not collected property then risk remains

$60,000

Notes: * The residual risk is the risk remaining after the selected risk treatment plan is operational. ** This AMP has identified only a marginal shortfall between required renewals and budgeted funds using the valuation data that is available. It has been acknowledged that the existing data has shortfalls in many areas and can generally not be used to support proactive management of the asset base. Anecdotal evidence suggests that the shortfall is greater than has been identified.

5.3 Routine Operations and Maintenance Plan

Operations include regular activities to maintain services that are safety, attractive and functional, e.g. grass mowing and specialist sports turf management, irrigation repairs, playground inspections and maintenance including replenishment of soft-fall materials, bushfire fuel reduction, graffiti removal, waste collection, cleaning toilet and other facilities, and lighting maintenance.

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 asset operational again. Routine operations can sustain service levels and user satisfaction and achieve a long and useful asset life.

5.3.1 Operations and Maintenance Plan

Operations and maintenance activities affect service levels and life cycle costs. Maintenance includes all actions necessary for retaining an asset as near as practicable to an appropriate service condition including regular ongoing day-to-day work necessary to keep assets operating, eg road patching but excluding rehabilitation or renewal. Maintenance may be classifies into reactive, planned and specific maintenance work activities.

Reactive maintenance is unplanned repair work carried out in response to service requests and management or supervisory directions. Planned maintenance is repair work that is identified and managed through a maintenance management system (MMS). MMS activities include inspection, assessing the condition against failure/breakdown experience, prioritising, scheduling, actioning the work and reporting what was done to develop a maintenance history and improve maintenance and service delivery performance.

Page 29: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 26 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

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

Actual past maintenance expenditure is shown in Table 5.3.1 and has been compiled from the following budget lines:

Playground maintenance

Sporting facilities – accident / vandalism

Park furniture

General maintenance

Playground equipment

Sport & recreation

Irrigation systems Table 5.3.1: Maintenance Expenditure Trends

Year Maintenance Expenditure (actual)

2009/10 $294k

2010/11 $304k

2011/12 $267k

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 levels are such that will result in a lesser level of service, the service consequences and service risks have been identified and service consequences highlighted in this Asset management plan and service risks considered in the Open Space Risk Management Plan.

Assessment and prioritisation of reactive maintenance is undertaken by Council’s staff using experience and judgement.

5.3.2 Operations and Maintenance Strategies

The City of Mitcham will operate and maintain assets to provide the defined level of service to approved budgets 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 maintenance costs and improve maintenance outcomes. Undertake cost-benefit analysis to determine the most cost-effective split between planned and unplanned maintenance activities (50 – 70% planned desirable as measured by cost),

Maintain a current open space risk register for assets and present service risks associated with providing services from open space assets and reporting Very High and High risks and residual risks after treatment to management and Council,

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

Review asset utilisation to identify underutilised assets and appropriate remedies, and over utilised assets 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 is obtaining best value for resources used.

Asset hierarchy

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

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

Page 30: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 27 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Table 5.3.2: Asset Service Hierarchy

Service Hierarchy Service Level Objective

Category 1 reserves They are strategically important regional facilities They have high utilisation rates by both Mitcham residents and the wider community They can be areas of historic significance. They provide for a range of activities including playgrounds, manicured turf, garden beds, toilets, BBQ facilities etc Some include memorials that are considered to be significant to the general community

Category 2 reserves They are strategically important for local open space They have high local community use - and there are correspondingly high community expectations about their maintenance They have irrigated and/or manicured turf They provide for a range of passive recreational activities

Category 3 reserves They are smaller neighbourhood parks They have minimal community use but are of high amenity value and importance due to their close proximity to urban development The reserves offer a limited range of recreational activities They usually have non irrigated turf areas with no manicured grasses

Category 4 reserves They have limited public access They are largely undeveloped areas There is little or no irrigation of the reserves Some of the reserves are small areas with minimal recreational potential, but with amenity value and community benefits

Category 5 reserves They often contain important remnant native vegetation, in particular Eucalyptus macrocarpa (Grey Box) They provide an opportunity for preserving unique flora and fauna They are in danger of becoming severely degraded by community use and the invasion of introduced species

Critical Assets

Critical assets are those assets which have a high consequence of failure but not necessarily a high likelihood of failure. By identifying critical assets and critical failure modes, organisations can target and refine investigative activities, maintenance plans and capital expenditure plans at the appropriate time.

Operations and maintenances activities may be targeted to mitigate critical assets failures and maintain service levels. These activities may include increased inspection frequency, higher maintenance intervention levels, etc. Critical assets failure modes and required operations and maintenance 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 Activities

Fences Access to inappropriate areas (e.g. quarry faces or equipment – bores/electrical etc) may result in personal injury and corporate liability

Maintain appropriate fencing standards at high risk sites

Playgrounds Inadequate assessment and maintenance practices may lead to personal injury of users or staff and may result in corporate liability

Consistent with Australian Standards for playgrounds and playground equipment: AS/NZ 4422:1996, AS/NZ 4486.1:1997, AS 1924.1-1981, AS 4685:1-6 2004

Page 31: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 28 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Critical Assets Critical Failure Mode Operations & Maintenance Activities

Irrigation Systems Systems failures may result in failure to comply with policy requirements (IPOS – Irrigation of public open space) may lead to injury of sports participants or other park users. Prolonged system failure may also incur turf restoration costs in addition to asset repairs/renewals.

Monitor turf as an indicator of irrigation system effectiveness, ensure compliance with IPOS irrigation requirements, maintain systems as required

Bore Pumps & Equipment Systems failures may result in failure to comply with policy requirements (IPOS – Irrigation of public open space) may lead to injury of sports participants or other park users. Prolonged system failure may also incur turf restoration costs in addition to asset repairs/renewals.

Monitor turf as an indicator of irrigation system effectiveness, maintain systems as required

Drinking fountains Service failure may result in contamination of water main or supply

Ensure backflow prevention system maintenance is compliant with regulations

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 asset stock as shown in Figure 4. Note that all costs are shown in current 2012/13 dollar values (ie real values).

Figure 4: Projected Operations and Maintenance Expenditure

The data from the above graph indicate that the operations and maintenance budgets will need to grow from a combined $389k to $406k (an increase of only $17k) over the period of 20 years to support identified new assets proposed to be constructed over the period 2013/14 to 2015/16 totalling $350k.

Deferred maintenance, that is works that are identified for maintenance and unable to be funded are to be included in the risk assessment and analysis in the open space asset risk management plan.

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

Page 32: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 29 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

5.4 Renewal/Replacement Plan

Renewal and replacement expenditure is major work which does not increase the asset’s design capacity but restores, rehabilitates, replaces or renews an existing asset to its original or lesser required service potential. Work over and above restoring an asset to original service potential is considered as upgrade, expansion or new works expenditure.

5.4.1 Renewal plan

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

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

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

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

Method 1 was used for this asset management plan. The useful lives of assets used to develop projected asset renewal expenditures are shown in Table 5.4.1. Asset useful lives were last reviewed in 2012.

Table 5.4.1: Useful Lives of Assets

Asset (Sub)Category Useful life (yrs)

Fence 40

Irrigation 25

Lighting 40

Park Furniture Varies between 10 & 80

Pathway 40

Playground 15 or 20, depending upon use

Tennis Crt Between 6 and 50, depending upon component

5.4.2 Renewal and Replacement Strategies

The City of Mitcham will plan capital renewal and replacement projects to meet service objectives and minimise open space asset service risks by:

Planning and scheduling renewal projects to deliver the defined level of service in the most efficient manner,

Undertaking project scoping for all capital renewal and replacement projects to identify: o the service delivery ‘deficiency’, present risk and optimum time for renewal/replacement, o the project objectives to rectify the deficiency, o the range of options, estimated capital and life cycle costs for each options that could address the

service deficiency, o and evaluate the options against evaluation criteria adopted by the organisation, and o select the best option to be included in capital renewal programs,

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

Maintaining a current open space risk register for assets and service risks associated with providing services from open space assets and reporting Very High and High risks and residual risks after treatment to management and the Council,

Reviewing current and required skills bases and implementing workforce training and development to meet required construction and renewal needs,

Maintaining a current hierarchy of critical assets and capital renewal treatments including timings required ,

Reviewing management of capital renewal and replacement activities to ensure the organisation is obtaining best value for resources used.

Page 33: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 30 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Renewal ranking criteria

Asset renewal and replacement is typically undertaken to either:

Ensure the reliability of the existing assets to deliver the required service or

To ensure the asset is of sufficient quality to meet the service requirements8 It is possible to get some indication of capital renewal and replacement priorities by identifying assets or asset groups that:

Have a high consequence of failure,

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

Have total value representing a substantial net value to the organisation,

Have the highest average age relative to their expected lives,

Are identified in the Asset management plan as key cost factors,

Have high operational or maintenance costs, and

Where replacement with modern equivalent assets would yield material savings.9 The ranking criteria used to determine priority of identified renewal and replacement proposals is detailed in Table 5.4.2.

Table 5.4.2: Renewal and Replacement Priority Ranking Criteria

Criteria Weighting

risk 25

technical 30

social 10

environmental 15

corporate 20

Total 100%

Where;

Risk priority is assessed in accordance with the AU/NZ risk management standard

Technical priority is based on the condition of the asset

Social priority is based on whether the particular initiative contributes toward objectives of Council’s Plans

Environmental priority is linked to whether the particular initiative contributes toward the objectives of Council’s environmental programs

Corporate priority is based on whether the project represents commitments through a Council resolution or being in the strategic plan.

5.4.3 Summary of future renewal and replacement expenditure

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

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

8 IPWEA, 2011, IIMM, Sec 3.4.4, p 3|60. 9 Based on IPWEA, 2011, IIMM, Sec 3.4.5, p 3|66.

Page 34: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 31 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Fig 5: Projected Capital Renewal and Replacement Expenditure

The above graph (which is based on poor data) reflects an average required annual capital renewal of $910k pa (over 20 years) or a total of $18.191m to support the defined levels of service of the open space assets. This can be compared against the current budgeted renewals of $15.104m over the same period and represents a shortfall in the budget of $3.084m over the period of the plan.

The following graphs indicate the renewal expenditure required to support subcategories of assets within the portfolio that make up the total in Fig 5.

Page 35: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 32 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Page 36: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 33 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

The tennis court renewal data, unlike the other datasets, was founded on recent condition information collected against Councils courts. In the analysis of this data the courts were broken down into components i.e. surface, asphalt, pavement etc. each with their own useful life and renewal cost.

Page 37: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 34 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Deferred renewal and replacement, that is those assets identified for renewal or replacement but which are not scheduled in capital works programs, are to be included in the risk analysis process in the risk management plan.

Renewal and replacement expenditure in the City of Mitcham’s capital works program will be accommodated in the long term financial plan. This is further discussed in Section 6.2.

5.5 Creation/Acquisition/Upgrade Plan

New works are those which create a new asset (one which did not previously exist) or works which upgrade or improve an existing asset beyond its existing capacity. New works may result from growth, social or environmental needs. Assets may also be acquired at no cost to Council from land development. These assets from growth are considered in Section 4.4.

5.5.1 Selection criteria

New asset requirements and upgrading or expansion needs of existing assets are identified from various sources such as councillor or community requests, proposals identified by strategic plans or partnerships with other organisations. Candidates for renewal or upgrading are inspected to verify need and to develop a preliminary renewal estimate. Verified proposals are ranked by priority and available funds and are scheduled in future works programmes. The priority ranking criteria is detailed in Table 5.5.1 below.

Table 5.5.1: New Assets Priority Ranking Criteria

Criteria Weighting

risk 25

technical 30

social 10

environmental 15

corporate 20

Total 100%

5.5.2 Capital Investment Strategies

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

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

Undertaking project scoping and analysis for all capital upgrade/new projects to: o identifyservice delivery ‘deficiency’, current risk and required timeline for delivery of the

upgrade/new asset, o identifyobjectives to rectify the deficiency including value management for major projects, o consider the range of options and the estimated capital and life cycle costs for each option that

could address the service deficiency, o identifyrisks associated with alternative options and their management requirements, o evaluate the options against evaluation criteria adopted by Council, and o select the best option to be included in capital upgrade/new programs,

Reviewing current and required skills bases and implementing training and development to meet required construction and project management needs,

Reviewing management of capital project activities to ensure Council is obtaining best value for resources used.

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

Page 38: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 35 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

5.5.3 Summary of future upgrade/new assets expenditure

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

Fig 6: Projected Capital Upgrade/New Asset Expenditure

It has been assumed in preparing the expenditure on new assets in the preparation of this plan that the budget for the last 10 years of the plan is an average of the first 10 years expenditure.

Expenditure on new assets and services in the organisation’s capital works program will be accommodated 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. No open space assets have currently been identified for disposal.

Page 39: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 36 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

6. FINANCIAL SUMMARY

This section presents the financial resources required to deliver the open space assets presented in the previous sections of this asset management plan. These financial projections will be improved as further information becomes available on desired levels of service and current and projected future asset performance.

6.1 Financial Statements and Projections

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

Fig 7: Projected Operating and Capital Expenditure

The data table for the above graph is as follows:

Year Maintenance ($'000) Upgrade/New ($'000) Capital Renewal ($'000)

Budgeted Expenditure ($'000)

2013 389 0 768 843

2014 389 190 945 1,182

2015 394 80 421 1,224

2016 396 80 404 1,295

2017 398 0 175 1,157

2018 398 0 968 1,341

2019 398 0 1,068 1,105

2020 398 0 1,517 1,203

2021 398 0 568 1,182

2022 398 0 817 1,218

2023 398 35 3,216 1,218

2024 399 35 289 1,140

2025 399 35 634 1,140

2026 400 35 1,127 1,140

2027 401 35 1,199 1,140

2028 402 35 2,007 1,140

2029 403 35 362 1,140

2030 404 35 29 1,140

2031 405 35 393 1,140

2032 406 35 1,284 1,140

Page 40: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 37 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

6.1.1 Sustainability of service delivery

There are four key indicators for service delivery sustainability that have been considered in the analysis of the services provided by this asset category, these being the asset renewal funding ratio, long term life cycle costs/expenditures and medium term projected/budgeted expenditures over 5 and 10 years of the planning period.

Asset Renewal Funding Ratio

Asset Renewal Funding Ratio10 98%

The Asset Renewal Funding Ratio is the most important indicator and reveals that over the next 10 years, the City of Mitcham is forecasting that it will have 98% of the funds required for the optimal renewal and replacement of its assets.

Long term - Life Cycle Cost

Life cycle costs (or whole of life costs) are the average costs ofsustaining the required service levels over the asset life cycle. Life cycle costs include operations and maintenance expenditure and asset consumption (depreciation expense). The life cycle cost for the services covered in this AM plan is $1,176,000 per year (average operations and maintenance expenditure plus depreciation expense projected over 10 years).

Life cycle costs can be compared to life cycle expenditure to give an initial indicator of affordability of projected service levels when considered with age profiles. Life cycle expenditure includes operations, maintenance and capital renewal expenditure. Life cycle expenditure will vary depending on the timing of asset renewals. The life cycle expenditure over the 10 year planning period is $1,140,000 per year (average operations and maintenance plus capital renewal budgeted expenditure in LTFP over 10 years).

A shortfall between life cycle cost and life cycle expenditure is the life cycle gap. The life cycle gap for services covered by this asset management plan is -$36,000 per year (-ve = gap, +ve = surplus).

Life cycle expenditure is 97% of life cycle cost.

The long term life cycle cost and life cycle expenditure comparison highlights any difference between present outlays and the average cost of providing the service over the long term. If the life cycle expenditure is less than the life cycle cost, it is most likely that outlays will need to be increased or cuts in services made in the future.

Knowing the extent and timing of any required increase in outlays, and the service consequences if funding is not available, will assist Council in providing services to the community in a financially sustainable manner. This is the ultimate purpose of asset management and long term financial planning.

Medium term – 10 year financial planning period

This asset management plan identifies the projected operations, maintenance and capital renewal expenditures required to provide an agreed level of service to the community over a 10 year period. This then informs 10 year financial and funding plans which aim to provide the required services in a sustainable manner. These projected expenditures may be compared to budgeted expenditures in the 10 year period to identify any funding shortfall. In a core asset management plan, a gap is generally due to increasing asset renewals for ageing assets.

The projected operations, maintenance and capital renewal expenditure required over the 10 year planning period is $1,160,000 on average per year.

Estimated (budget) operations, maintenance and capital renewal funding is $1,140,000 on average per year giving a 10 year funding shortfall of $20,000 per year. This indicates that the organisation expects to have 98% of the projected expenditures needed to provide the current level of services documented in the asset management plan.

10 AIFMG, 2009, Financial Sustainability Indicator 8, Sec 2.6, p 2.18

Page 41: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 38 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Medium Term – 5 year financial planning period

The projected operations, maintenance and capital renewal expenditure required over the first 5 years of the planning period is $935,000 on average per year.

Estimated (budget) operations, maintenance and capital renewal funding is $1,070,000 on average per year giving a 5 year funding shortfall of $135,000. This indicates that the organisation expects to have 114% of projected expenditures required to provide the services shown in this asset management plan.

Asset management financial indicators

Figure 7A shows the asset management financial indicators over the 10 year planning period and for the long term life cycle.

Figure 7A: Asset Management Financial Indicators

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

Figure 8 shows the projected asset renewal and replacement expenditure over the 20 years of the Asset management plan. The projected asset renewal and replacement expenditure is compared to renewal and replacement expenditure in the capital works program, which is accommodated in the long term financial plan

Page 42: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 39 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Figure 8: Projected and LTFP Budgeted Renewal Expenditure

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

Table 6.1.1: Projected and LTFP Budgeted Renewals and Financing Shortfall

Year Projected Renewals ($000)

LTFP Renewal Budget ($000)

Renewal Financing Shortfall ($000) (-ve Gap, +ve Surplus)

Cumulative Shortfall ($000) (-ve Gap, +ve Surplus)

2013 $768 $455 -$313 -$313

2014 $945 $604 -$342 -$655

2015 $421 $755 $335 -$320

2016 $404 $826 $422 $102

2017 $175 $769 $593 $695

2018 $968 $952 -$16 $679

2019 $1,068 $716 -$352 $327

2020 $1,517 $815 -$703 -$375

2021 $568 $793 $225 -$150

2022 $817 $830 $13 -$137

2023 $3,216 $830 -$2,386 -$2,523

2024 $289 $751 $462 -$2,061

2025 $634 $751 $117 -$1,944

2026 $1,127 $751 -$375 -$2,319

2027 $1,199 $751 -$447 -$2,766

2028 $2,007 $751 -$1,256 -$4,022

2029 $362 $751 $389 -$3,633

2030 $29 $751 $722 -$2,911

2031 $393 $751 $359 -$2,552

2032 $1,284 $751 -$532 -$3,084

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 and replacement expenditure to meet agreed service levels with the corresponding capital works program accommodated in the long term financial plan.

Page 43: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 40 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

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

The City of Mitcham will manage the ‘gap’ by developing this asset management plan to provide guidance on future service levels and resources required to provide these services, and review future services, service levels 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 2012/13 real values.

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

Year Operations

($000) Maintenance ($000)

Projected Capital Renewal ($000)

Capital Upgrade/ New ($000)

Disposals ($000)

2013 $0.00 $388.69 $767.76 $0.00 $0.00

2014 $0.00 $388.69 $945.00 $190.00 $0.00

2015 $0.00 $393.54 $420.90 $80.00 $0.00

2016 $0.00 $395.59 $403.56 $80.00 $0.00

2017 $0.00 $397.63 $175.48 $0.00 $0.00

2018 $0.00 $397.63 $968.49 $0.00 $0.00

2019 $0.00 $397.63 $1,067.63 $0.00 $0.00

2020 $0.00 $397.63 $1,517.24 $0.00 $0.00

2021 $0.00 $397.63 $568.09 $0.00 $0.00

2022 $0.00 $397.63 $816.73 $0.00 $0.00

6.2 Funding Strategy

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

6.3 Valuation Forecasts

Asset values are forecast to increase as additional assets are added to the asset stock from construction and acquisition. Figure 9 shows the projected replacement cost of asset values over the planning period in real values.

Page 44: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 41 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

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 of addition of new assets, disposal of old assets and consumption and renewal of existing assets. Forecast of the assets’ depreciated

Page 45: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 42 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

replacement cost is shown in Figure 11. The depreciated replacement cost of contributed and new assets is shown in the darker colour and in the lighter colour 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 asset management plan and in preparing forecasts of required operating and capital expenditure and asset values, depreciation expense and carrying amount estimates. It is presented to enable readers to gain 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 shown in Table 6.4.

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

Key Assumptions Risks of Change to Assumptions

Data – Condition assessment The condition assessment has been carried out for valuation rather than asset planning purposes with little regard to the levels of service that are provided by the asset – conservative useful lives

Data – Unit Rates The unit rates contained with the valuation database appear low compared to actual renewal rates – it is likely that actual cost will be much higher

Data – Extent accuracy It has been shown that the valuation database does not cover all assets on reserves – conservative renewal costs

Page 46: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 43 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

6.5 Forecast Reliability and Confidence

The expenditure and valuations projections in this asset management plan are based on best available data. Currency and accuracy of data is critical to effective asset and financial management. Data confidence is classified on a 5 level scale11 in accordance with Table 6.5.

Table 6.5: Data Confidence Grading System

Confidence Grade Description

A Highly reliable Data based on sound records, procedures, investigations and analysis, documented properly and recognised 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 but has minor shortcomings, for example some of the data is old, some documentation is missing and/or reliance is placed on unconfirmed reports or some extrapolation. Dataset is complete and estimated to be accurate ± 10%

C Uncertain Data based on sound records, procedures, investigations and analysis which is incomplete or unsupported, 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. Dataset may 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 asset management plan is shown in Table 6.5.1.

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

Data Confidence Assessment Comment

Demand drivers C Demand by the community for asset upgrades is largely unknown

Growth projections B

Operations expenditures E Operations expenditure has not been considered in the development of this plan

Maintenance expenditures B Councils records are detailed

Projected Renewal exps. - Asset values

C Low confidence in existing datasets

- Asset residual values E Residual values are not applicable to open space assets

- Asset useful lives C Low confidence in existing datasets

- Condition modelling C Low confidence in existing datasets

- Network renewals N/A

- Defect repairs N/A

Upgrade/New expenditures C

Disposal expenditures N/A

Over all data sources, the data confidence is assessed as low confidence level for data used in the preparation of this asset management plan.

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

Page 47: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 44 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

7. PLAN IMPROVEMENT AND MONITORING

7.1 Status of Asset Management Practices

7.1.1 Accounting and financial systems

Council uses the “Authority” general ledger and land information system and has in March 2012 implemented the “Assetic” asset management system.

Accountabilities for financial systems

The Manager Finance is accountable for the financial systems

Accounting standards and regulations

The following standards and regulations apply

Australian Accounting Standards

AASB101 – Presentation of financial statements

AASB116 – Property, Plant and Equipment

Local Government Act 1999, Section 122(1a) – Strategic Management Plans

Local Government (Financial Management) Regulations 1999 – Part 3 – Accounting Principles

Capital/maintenance threshold

Page 48: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 45 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

7.1.2 Asset management system

Council in March 2012 implemented the “Assetic” asset management system for the management of all its asset categories.

The “Assetic MyData” system currently holds data relating to the asset’s inventory; Condition and fair value. Implementation of “MyPredictor”, the forecast modelling module of Assetic, is currently in progress. Spatial data relating to the transport assets is located within the MapInfo Graphical Information System. “Assetic MyData” has a static link to MapInfo GIS via “Exponare”.

Asset registers

The asset register is contained within the “Assetic MyData” asset management system and contains all relevant data for open space assets including asset inventory; Condition and fair value .

Linkage from asset management to financial system

The “Assetic MyData” asset management system is an independent system from Council’s “Authority” Financial system. Asset values including “CRC”; DRC; and Accumulated Depreciation are transferred to “Authority” via a journal entry.

Accountabilities for asset management system and data maintenance

The “Assetic MyData” asset management system; as well as the Infrastructure GIS data bases, are managed by the “Principal | Infrastructure Asset Planning”.

Page 49: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 46 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

7.2 Improvement Program

The asset management improvement plan generated from this asset management plan is shown in Table 8.2.

Table 7.2: Improvement Plan

Task No Task Responsibility Resources Required Timeline

1 Review existing database of open space assets for completeness

Mgr. Natural Environment

Internal Jan 2015

2 Conduct condition assessment of open space assets Mgr. Natural Environment

$35k Jan 2015

3 Conduct valuation of open space assets Mgr. Natural Environment

$65k Jan 2015

4 Further develop ‘Assetic’ as a tool for management of open space assets

Mgr. Natural Environment

Internal June 2015

5 Develop Open Space Strategy Mgr. Natural Environment

$40k Jan 2017

6 Develop sport and recreation plan Mgr. Natural Environment

$50k Jan 2017

7 Develop master plans for reserves identified through the sport and recreation plan

Mgr. Natural Environment

$60k Jan 2017

8 Develop linkages with Councils Health Plan, currently under development

Mgr. Natural Environment

Internal Jan 2017

9 Develop linkages with Council Aged Care Plan (yet to be developed)

Mgr. Natural Environment

Internal Jan 2017

7.3 Monitoring and Review Procedures

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

The asset management 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 asset disposal expenditures and projected expenditure values incorporated into the organisation’s long term financial plan.

The asset management plan has a life of 4 years (Council election cycle) and is due for complete revision and updating 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 plan are incorporated into the organisation’s long term financial plan,

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

The degree to which the existing and projected service levels and service consequences (what we cannot do), risks and residual risks are incorporated into the organisation’s Strategic Plan and associated plans,

The Asset Renewal Funding Ratio achieving the target of 1.0.

Page 50: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 47 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

8. REFERENCES

IPWEA, 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 Works Engineering Australia, Sydney, www.ipwea.org.au/AIFMG.

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

City of Mitcham, Strategic Plan 2013 – 2022

City of Mitcham, Annual Residents Survey, 2012

City of Mitcham, 2013/14 Draft Long Term Financial Plan

City of Mitcham, 2013/14 Draft Annual Business Plan

Page 51: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 48 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

9. APPENDICES

Appendix 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 Budgeted Expenditures Accommodated in LTFP

Appendix E Abbreviations

Appendix F Glossary

Appendix G List of Reserves

Page 52: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 49 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Appendix A Maintenance Response Levels of Service

DRAFT Work in progress

Page 53: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 50 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Appendix B Projected 10 year Capital Renewal and Replacement Works Program

Page 54: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 51 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Appendix C Projected Upgrade/Exp/New 10 year Capital Works Program

BLANK

Page 55: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 52 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Appendix D Budgeted Expenditures Accommodated in LTFP

Page 56: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 53 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Appendix E 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 management systems

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

Page 57: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 54 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Appendix F Glossary

Annual service cost (ASC) 1) Reporting actual cost The annual (accrual) cost of providing a service

including operations, maintenance, depreciation, finance/opportunity and disposal costs less revenue.

2) For investment analysis and budgeting An estimate of the cost that would be tendered,

per annum, if tenders were called for the supply of a service to a performance specification for a fixed term. The Annual Service Cost includes operations, maintenance, depreciation, finance/ opportunity and disposal costs, less revenue.

Asset A resource controlled by an entity as a result of past events and from which future economic benefits are expected to flow to the entity. Open space assets are a sub-class of property, plant and equipment which are non-current assets with a life greater than 12 months and enable services to be provided.

Asset category Sub-group of assets within a class hierarchy for financial reporting and management purposes.

Asset class A group of assets having a similar nature or function in the operations of an entity, and which, for purposes of disclosure, is shown as a single item without supplementary disclosure.

Asset condition assessment The process of continuous or periodic inspection, assessment, measurement and interpretation of the resultant data to indicate the condition of a specific asset so as to determine the need for some preventative or remedial action.

Asset hierarchy A framework for segmenting an asset base into appropriate classifications. The asset hierarchy can be based on asset function or asset type or a combination of the two.

Asset management (AM) The combination of management, financial, economic, engineering and other practices applied to physical assets with the objective of providing the required level of service in the most cost effective manner.

Asset renewal funding ratio The ratio of the net present value of asset renewal funding accommodated over a 10 year period in a long term financial plan relative to the net present value of projected capital renewal expenditures identified in an asset management plan for the same period [AIFMG Financial Sustainability Indicator No 8].

Average annual asset consumption (AAAC)* The amount of an organisation’s asset base consumed during a reporting period (generally a year). This may be calculated by dividing the depreciable amount by the useful life (or total future economic benefits/service potential) and totalled for each and every asset OR by dividing the carrying amount (depreciated replacement cost) by the remaining useful life (or remaining future economic benefits/service potential) and totalled for each and every asset in an asset category or class.

Borrowings A borrowing or loan is a contractual obligation of the borrowing entity to deliver cash or another financial asset to the lending entity over a specified period of time or at a specified point in time, to cover both the initial capital provided and the cost of the interest incurred for providing this capital. A borrowing or loan provides the means for the borrowing entity to finance outlays (typically physical assets) when it has insufficient funds of its own to do so, and for the lending entity to make a financial return, normally in the form of interest revenue, on the funding provided.

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

Capital expenditure - expansion Expenditure that extends the capacity of an existing asset to provide benefits, at the same standard as is currently enjoyed by existing beneficiaries, to a new group of users. It is discretionary expenditure, which increases future operations and maintenance costs, because it increases the organisation’s asset base, but may be associated with additional revenue from the new user group, eg. extending a drainage or road network, the provision of an oval or park in a new suburb for new residents.

Page 58: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 55 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Capital expenditure - new Expenditure which creates a new asset providing a new service/output that did not exist beforehand. As it increases service potential it may impact revenue and will increase future operations and maintenance expenditure.

Capital expenditure - renewal Expenditure on an existing asset or on replacing an existing asset, which returns the service capability of the asset up to that which it had originally. It is periodically required expenditure, relatively large (material) in value compared with the value of the components or sub-components of the asset being renewed. As it reinstates existing service potential, it generally has no impact on revenue, but may reduce future operations and maintenance expenditure if completed at the optimum time, eg. resurfacing or resheeting a material part of a road network, replacing a material section of a drainage network with pipes of the same capacity, resurfacing an oval.

Capital expenditure - upgrade Expenditure, which enhances an existing asset to provide a higher level of service or expenditure that will increase the life of the asset beyond that which it had originally. Upgrade expenditure is discretionary and often does not result in additional revenue unless direct user charges apply. It will increase operations and maintenance expenditure in the future because of the increase in the organisation’s asset base, eg. widening the sealed area of an existing road, replacing drainage pipes with pipes of a greater capacity, enlarging a grandstand at a sporting facility.

Capital funding Funding to pay for capital expenditure.

Capital grants Monies received generally tied to the specific projects for which they are granted, which are often upgrade and/or expansion or new investment proposals.

Capital investment expenditure See capital expenditure definition.

Capitalisation threshold The value of expenditure on non-current assets above which the expenditure is recognised as capital expenditure and below which the expenditure is charged as an expense in the year of acquisition.

Carrying amount The amount at which an asset is recognised after deducting any accumulated depreciation / amortisation and accumulated impairment losses thereon.

Class of assets See asset class definition

Component Specific parts of an asset having independent physical or functional identity and having specific attributes such as different life expectancy, maintenance regimes, risk or criticality.

Core asset management Asset management which relies primarily on the use of an asset register, maintenance management systems, job resource management, inventory control, condition assessment, simple risk assessment and defined levels of service, in order to establish alternative treatment options and long-term cashflow predictions. Priorities are usually established on the basis of financial return gained by carrying out the work (rather than detailed risk analysis and optimised decision- making).

Cost of an asset The amount of cash or cash equivalents paid or the fair value of the consideration given to acquire an asset at the time of its acquisition or construction, including any costs necessary to place the asset into service. This includes one-off design and project management costs.

Critical assets Assets for which the financial, business or service level consequences of failure are sufficiently severe to justify proactive inspection and rehabilitation. Critical assets have a lower threshold for action than non-critical assets.

Current replacement cost (CRC) The cost the entity would incur to acquire the asset on the reporting date. The cost is measured by reference to the lowest cost at which the gross future economic benefits could be obtained in the normal course of business or the minimum it would cost, to replace the existing asset with a technologically modern equivalent new asset (not a second hand one) with the same economic benefits (gross service potential) allowing for any differences in the quantity and quality of output and in operating costs.

Deferred maintenance The shortfall in rehabilitation work undertaken relative to that required to maintain the service potential of an asset.

Depreciable amount The cost of an asset, or other amount substituted for its cost, less its residual value.

Page 59: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 56 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Depreciated replacement cost (DRC) The current replacement cost (CRC) of an asset less, where applicable, accumulated depreciation calculated on the basis of such cost to reflect the already consumed or expired future economic benefits of the asset.

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

Economic life See useful life definition.

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

Expenses Decreases in economic benefits during the accounting period in the form of outflows or depletions of assets or increases in liabilities that result in decreases in equity, other than those relating to distributions to equity participants.

Fair value The amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties, in an arms length transaction.

Financing gap A financing gap exists whenever an entity has insufficient capacity to finance asset renewal and other expenditure necessary to be able to appropriately maintain the range and level of services its existing asset stock was originally designed and intended to deliver. The service capability of the existing asset stock should be determined assuming no additional operating revenue, productivity improvements, or net financial liabilities above levels currently planned or projected. A current financing gap means service levels have already or are currently falling. A projected financing gap if not addressed will result in a future diminution of existing service levels.

Heritage asset An asset with historic, artistic, scientific, technological, geographical or environmental qualities that is held and maintained principally for its contribution to knowledge and culture and this purpose is central to the objectives of the entity holding it.

Impairment Loss The amount by which the carrying amount of an asset exceeds its recoverable amount.

Infrastructure assets Physical assets that contribute to meeting the needs of organisations or the need for access to major economic and social facilities and services, eg. roads, drainage, footpaths and cycleways. These are typically large, interconnected networks or portfolios of composite assets. The components of these assets may be separately maintained, renewed or replaced individually so that the required level and standard of service from the network of assets is continuously sustained. Generally the components and hence the assets have long lives. They are fixed in place and are often have no separate market value.

Investment property Property held to earn rentals or for capital appreciation 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 indicator A qualitative or quantitative measure of a service or activity used to compare actual performance against a standard or other target. Performance indicators commonly relate to statutory limits, safety, responsiveness, cost, comfort, asset performance, reliability, efficiency, environmental protection and customer satisfaction.

Level of service The defined service quality for a particular service/activity against which service performance may be measured. Service levels usually relate to quality, 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) is average cost to provide the service over the longest asset life cycle. It comprises average operations, maintenance expenditure plus asset consumption expense, represented by depreciation expense projected over 10 years. The Life Cycle Cost does not indicate the funds required to provide the service in a particular year.

Page 60: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 57 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Life Cycle Expenditure The Life Cycle Expenditure (LCE) is the average operations, maintenance and capital renewal expenditure accommodated in the long term financial plan over 10 years. Life Cycle Expenditure may be compared to average Life Cycle Cost to give an initial indicator of affordability of projected service levels when considered with asset age profiles.

Loans / borrowings See borrowings.

Maintenance All actions necessary for retaining an asset as near as practicable to an appropriate service condition, including regular ongoing day-to-day work necessary to keep assets operating, eg road patching but excluding rehabilitation or renewal. It is operating expenditure required to ensure that the asset reaches its expected useful life. • Planned maintenance

Repair work that is identified and managed through a maintenance management system (MMS). MMS activities include inspection, assessing the condition against failure/breakdown criteria/experience, prioritising scheduling, actioning the work and reporting what was done to develop a maintenance history and improve maintenance and service delivery performance.

• Reactive maintenance Unplanned repair work that is carried out in response to service requests and management/ supervisory directions.

• Specific maintenance Maintenance work to repair components or replace sub-components that needs to be identified as a specific maintenance item in the maintenance budget.

• Unplanned maintenance Corrective work required in the short-term to restore an asset to working condition so it can continue to deliver the required service or to maintain its level of security and integrity.

Maintenance expenditure * Recurrent expenditure, which is periodically or regularly required as part of the anticipated schedule of works required to ensure that the asset achieves its useful life and provides the required level of service. It is expenditure, which was anticipated in determining the asset’s useful life.

Materiality The notion of materiality guides the margin of error acceptable, the degree of precision required and the extent of the disclosure required when preparing general purpose financial reports. Information is material if its omission, misstatement or non-disclosure has the potential, individually or collectively, to influence the economic decisions of users taken on the basis of the financial report or affect the discharge of accountability by the management or governing body of the entity.

Modern equivalent asset Assets that replicate what is in existence with the most cost-effective asset performing the same level of service. It is the most cost efficient, currently available asset which will provide the same stream of services as the existing asset is capable of producing. It allows for technology changes and, improvements and efficiencies in production and installation techniques

Net present value (NPV) The value to the organisation of the cash flows associated with an asset, liability, activity or event calculated using a discount rate to reflect the time value of money. It is the net amount of discounted total cash inflows after deducting the value of the discounted total cash outflows arising from eg the continued use and subsequent disposal of the asset after deducting the value of the discounted total cash outflows.

Non-revenue generating investments Investments for the provision of goods and services to sustain or improve services to the community that are not expected to generate any savings or revenue to the organisation, eg. parks and playgrounds, footpaths, roads and bridges, libraries, etc.

Operations Regular activities to provide services such as public health, safety and amenity, eg street sweeping, grass mowing and street lighting.

Operating expenditure Recurrent expenditure, which is continuously required to provide a service. In common use the term typically includes, eg power, fuel, staff, plant equipment, on-costs and overheads but excludes maintenance and depreciation. Maintenance and depreciation is on the other hand included in operating expenses.

Page 61: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 58 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Operating expense The gross outflow of economic benefits, being cash and non cash items, during the period arising in the course of ordinary activities of an entity when those outflows result in decreases in equity, other than decreases relating to distributions to equity participants.

Operating expenses Recurrent expenses continuously required to provide a service, including power, fuel, staff, plant equipment, maintenance, depreciation, on-costs and overheads.

Operations, maintenance and renewal financing ratio Ratio of estimated budget to projected expenditure for operations, maintenance and renewal of assets over a defined time (eg 5, 10 and 15 years).

Operations, maintenance and renewal gap Difference between budgeted expenditures in a long term financial plan (or estimated future budgets in absence of a long term financial plan) and projected expenditures for operations, maintenance and renewal of assets to achieve/maintain specified service levels, totalled over a defined time (e.g. 5, 10 and 15 years).

Pavement management system (PMS) A systematic process for measuring and predicting the condition of road pavements and wearing surfaces over time and recommending corrective actions.

PMS Score A measure of condition of a road segment determined from a Pavement Management System.

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

Rate of annual asset renewal * The ratio of asset renewal and replacement expenditure relative to depreciable amount for a period. It measures whether assets are being replaced at the rate they are wearing out with capital renewal expenditure expressed as a percentage of depreciable amount (capital renewal expenditure/DA).

Rate of annual asset upgrade/new * A measure of the rate at which assets are being upgraded and expanded per annum with capital upgrade/new expenditure expressed as a percentage of depreciable amount (capital upgrade/expansion expenditure/DA).

Recoverable amount The higher of an asset's fair value, less costs to sell and its value in use.

Recurrent expenditure Relatively small (immaterial) expenditure or that which has benefits expected to last less than 12 months. Recurrent expenditure includes operations and maintenance expenditure.

Recurrent funding Funding to pay for recurrent expenditure.

Rehabilitation See capital renewal expenditure definition above.

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

Renewal See capital renewal expenditure definition above.

Residual value The estimated amount that an entity would currently obtain from disposal of the asset, after deducting the estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life.

Revenue generating investments Investments for the provision of goods and services to sustain or improve services to the community that are expected to generate some savings or revenue to offset operating costs, eg public halls and theatres, childcare centres, sporting and recreation facilities, tourist information centres, etc.

Risk management The application of a formal process to the range of possible values relating to key factors associated with a risk in order to determine the resultant ranges of outcomes and their probability of occurrence.

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

Service potential The total future service capacity of an asset. It is normally determined by reference to the operating capacity and economic life of an asset. A measure of service potential is used in the not-for-profit sector/public sector to value assets, particularly those not producing a cash flow.

Page 62: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 59 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Service potential remaining A measure of the future economic benefits remaining in assets. It may be expressed in dollar values (Fair Value) or as a percentage of total anticipated future economic benefits. It is also a measure of the percentage of the asset’s potential to provide services that is still available for use in providing services (Depreciated Replacement Cost/Depreciable Amount).

Specific Maintenance Replacement of higher value components/sub-components of assets that is undertaken on a regular cycle including repainting, replacement of air conditioning equipment, etc. This work generally falls below the capital/ maintenance threshold and needs to be identified in a specific maintenance budget allocation.

Strategic Longer-Term Plan A plan covering the term of office of councillors (4 years minimum) reflecting the needs of the community for the foreseeable future. It brings together the detailed requirements in the Council’s longer-term plans such as the asset management plan and the long-term financial plan. The plan is prepared in consultation with the community and details 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 the outcomes and how the plan will be resourced.

Sub-component Smaller individual parts that make up a component part.

Useful life Either: (a) the period over which an asset is expected to be

available for use by an entity, or (b) the number of production or similar units expected

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

Value in Use The present value of future cash flows expected to be derived from an asset or cash generating unit. It is deemed to be depreciated replacement cost (DRC) for those assets whose future economic benefits are not primarily dependent on the asset's ability to generate net cash inflows, where the entity would, if deprived of the asset, replace its remaining future economic benefits.

Source: IPWEA, 2009, AIFMG Glossary

Additional and modified glossary items shown *

Page 63: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 60 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Appendix G List of Reserves

The following are a list of reserves that have infrastructure in them covered by this Asset Management Plan:

AA Bailey Reserve

Abercrombie Reserve

Adelaide Terrace

Albert Street Reserve

Alexander Ross Reserve

Apex Park

Archibald Park

Avenue Road Reserve

Bailey Reserve

Balham Reserve

Barrans Reserve

Barrens Reserve

Batchelor Reserve

Belair Community Centre

Bermuda Way Reserve

Betty Long Garden

Birksgate Reserve

Blackwood Business District Streetscape

Blythwood Reserve

Bonython Formal south

Branson Reserve

Brownies Reserve

Burbank Reserve

CC Hood Dog Reserve

Chelaston Reserve

Chellaston Reserve

Clapham Reserve

Colonel Light Gardens

Coromandel Parade Reserve

Crozier Reserve

Cumming coromandel corner Reserve

Cunard Reserve

Davies Thomas Reserve

Days/Harvey Hayes Reserve

Delwood Reserve

Deneland Drive Reserve

Denman Community Centre

Depot

Donald Street Reserve

Doncaster Avenue Reserve (Broadway Anzac Day only)

Donnybrook Reserve

Downer Avenue Reserve

Eliza Place Reserve

Eve Road Reserve

Eynesbury Reserve

Fergusson Road Reserve

Florida Court Reserve

Francis Reserve

Frank Smith Reserve

Frome Reserve

Gamble Park

Gibbs Park

Gloucester Avenue

Godden Reserve

Goodale Avenue Reserve

Grand Boulevard South Entrance

Grant Jacob Reserve

Grenache Circuit Reserve

Gulfview Reserve

Gully Reserve

Haddington Reserve

Hannaford Reserve

Harvey Hayes/Days Reserve

Hawthorn Bowling Club

Hewett Sports Ground

Highfield Drive Reserve

Hill View Reserve

Hillrise Reserve

Hillview/Penang reserve

Hope Ward Tennis Club

J W S Morris Reserve

Jackson Reserve

Karinya Reserve

Kegworth Reserve

Keith W Pearson Reserve

Kenny Park

Kent Road Reserve

Kentucky Avenue Reserve

Kiley Court Reserve

Kinedana Reserve

Kingswood Oval

Knofel Park

Knoffel Park

Laffers Road Reserve

Light Place Reserve

Lincoln Ave garden Beds

Ludgate Reserve

Page 64: City of Mitcham | City of Mitcham - Asset …...June 2015 FINAL City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN Document Control Document ID: 59.299.130925 nams.plus2 amp template

- 61 -

City of Mitcham – OPEN SPACE ASSET MANAGEMENT PLAN

Macs Flat Reserve

Magdalene Reserve

Mandalay Reserve

Manson Oval

Marion Street Reserve

Martlesham Reserve

McElligotts Reserve

McTaggarts Reserve

Meadowbank Reserve

Minnow Reserve

Mitcham Army Camp Reserve

Monalta Reserve

Mortlock Park

Myrtle Reserve

Naomi Reserve

Netherby Reserve

Nieass Tennis Club

Norman Reserve

O'Deas Quarry Reserve

Osborne Street Reserve

Ossie Goldsworthy Reserve

Oxford Circus Reserve

Panorama Sea Scouts

Pasadena Reserve

Pembroke Place Reserve

Perry/Day traffic Aid

Petherick Street Reserve

Piazza Crescent Reserve

Portland Place Reserve

Price Memorial Oval

Quinlan Avenue Reserve

Ragless Reserve

Reade Park

Ritz Boulevard

Riverside Reserve

Rochester Avenue Reserve

Roselle Reserve

Rozelle Reserve

Shepherds Court Reserve

Sherwood Drive Reserve

Sierra Nevada Reserve

Skitch Reserve

Sleeps Hill Quarry Reserve

SMG Reserve

Soldiers Memorial Gardens

South Road Reserve

St Marys Oval

Strathcona Reserve

Suffolk Road Reserve

Sun Dew Avenue Reserve

Sutton Gardens

Tafquinn Reserve

The Broadway Reserve

The Main Reserve

The Strand

Thiselton Reserve

Thorngate Drive Reserve

Thurles Street Reserve

Tidworth Crescent Lot 53

Vancouver Avenue Reserve

Waite Street Reserve

Wattlebury Road Lot 56

Waverley Street Reserve

Wescombe Reserve

Westbourne Park Senior Citizens

Wetland Reserve

Whicker Park

Willunga Street Reserve

Windy Point Reserve

Winns Bakehouse

Woeks depot (Winston Crt)

Woodlake Reserve