2017—2021
54 The Hills Shire Council Resourcing Strategy 2017-2021
Contents
ASSET MANAGEMENT STRATEGY 55 Asset Management Policy 55 Assets critical to Council Operations 57 Risk Management Strategies 59 Specific Actions required to improving Council’s asset
management capabilities 60 Projected resource requirements
and timeframes 61
Future Demand 62
ASSET MANAGEMENT PLANS 64
Current State of Our Assets 64
Buildings 67
Civil Infrastructure 69 Waterways & Stormwater 73 Parks & Recreational Facilities 75
Pathways 78
WORKS PROGRAM 80
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Asset Management Strategy
Council’s Asset Management Policy defines Council’s vision and service delivery objectives for asset management in accordance with the Strategic Plan and applicable legislation.
The purpose of this Policy is to:
• Establish Council’s principles for asset management in terms of providing a platform for service delivery
• Integrate asset management with Council’s strategic planning
• Maximise value for money by adoption of lifecycle costing, combined with performance measurement
• Assign accountability and responsibility for service delivery together with asset management
• Promote sustainability to protect the needs of future generations
VISION
To ensure the long-term financial sustainability of Council, it is essential to balance the community’s expectations for services with their ability to pay for the infrastructure assets used to provide the
services. To achieve this, Council will develop and maintain asset management governance, skills, processes, systems and data to provide the level of service the community needs. Decisions based on this vision will result in the most cost-effective and fit for purpose assets, both now and in the future.
POLICY STATEMENT
Council acknowledges that assets are fundamental to its overall service delivery to The Hills community.
Council is committed to ensuring they are
appropriate for the needs of the community and are maintained at the agreed levels of service within the financial capacity of Council. A full life cycle cost approach will be taken when acquiring future assets, deciding on asset renewal projects and the disposal of existing assets.
Council’s assets will be managed through the strategic asset management plan using technology and data, appropriate methodologies and
consultation with our community to make sound decisions regarding the allocation of resources in providing, maintaining, renewing and disposing of assets.
Infrastructure assets are fundamental to overall Council service delivery and planning. Taking effective responsibility for asset planning requires a strong and informed Council, management team and an engaged community. The long-lived nature of many assets and the need for their ongoing renewal means that planning must be based on an understanding of the full costs throughout each asset’s lifecycle, and address both the short and long-term planning needs.
Key to effective asset management is the preparation of an asset management policy and strategy supported by Asset Management Plans
that focus on value for money and support Council in engaging with the community to find a balance between service levels, risk and cost.
This document accounts for Council’s infrastructure assets and outlines how we will responsibly manage the assets over time and how those assets contribute to meeting the needs of the community.
It has been prepared following a review of Council’s service delivery practices, financial sustainability indicators, asset management maturity and fit with Council’s vision for the future, as outlined in the Community Strategic Plan.
Asset Management Policy
56 The Hills Shire Council Resourcing Strategy 2017-2021
PRINCIPLES
1. Council is committed to providing assets that enable it to deliver meaningful local government services and facilities at the required level of service in the most cost effective manner.
2. Council’s asset management methodologies are based upon the The Institute of Public Works Engineering Australia (IPWEA) and the International Infrastructure Management Manual prepared by the Association of Local Government Engineering New Zealand.
3. All relevant legislative requirements are to be taken into account in managing our assets.
4. Asset management is to be integrated into Council’s budgeting, planning and operational processes.
5. Our assets will be inspected to assess condition.
6. Community needs decide priorities for asset provision, maintenance, renewal and disposal.
7. The acquisition of new assets have regard to the community’s needs as well as Council’s ability to fund future life cycle costs.
8. Risk is considered in the development of asset management strategies and actions.
9. Each category of assets will identify the weighted average ranking score to determine priorities.
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Asset Class Description Service Standards Buildings Aged & Disabled Service Facilities,
Amenities and Sports Facilities, Childcare and Baby Health Centres, Community Centres, Library Facilities, Rural Fire Service & SES Headquarters, Council Operational Centres, Recreational and Cultural Centres, Rented Properties, Scout and Guide Halls and Swimming Pool Buildings
Provide a portfolio of public buildings and facilities required for a range of functional, social, educational and recreational activities across the Shire.
Civil
Infrastructure
Bridges, Bus Shelters, Carparks, Kerb and Gutter, Roads, Traffic Management Devices and Street Furniture, Ferry
Provide well maintained roads and bridges which allow convenient and safe access to all. An efficient transportation system which provides economic and social benefits for residents, businesses and visitors.
Waterways &
Stormwater Systems
Culverts, Gross Pollutant Traps, Open Channels, Stormwater Pipes, Stormwater Pits and Structures
Improve road safety and the management of stormwater to control local overland flooding and reduce adverse environmental impacts from stormwater runoff.
Parks and Recreational Facilities
Irrigation, Open Space Furniture, Water Tanks, Park Lighting, Play Equipment, Playground Facilities and Recreational Facilities
Provides a variety of physical, social and environmental activities via a network of open space (passive and active recreational areas) to support the health and wellbeing of the community.
Pathways Footpaths, Cycleways, Walkways and Tracks
Provides a safe and accessible pathway network that connects pedestrians to facilities in their community. Promotes and facilitates walking as an alternative to private vehicle usage and as a form of exercise and recreation.
Assets Critical to Council’s Operations
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Risk Management Strategies
Buildings
• Changing usage requirements
• Potential hazards to the community
• Population increase & changing demographics
• Under or over utilisation of some buildings
• Legislative requirements
• Aging infrastructure
• Increase in community expectations
a
• Disaster Recovery Plan which focuses on buildings which are considered critical for the on-going delivery of Council’s services
• Routine asset assessments & defect inspections
• Proactive maintenance programs
• Planned renewal programs
• Community engagement & service level agreements
• Sustainability & cost reduction initiatives
• Continuous improvement of Asset Management Plans
Civil Infrastructure & Pathways
• Asset defects potentially creating hazards to the community
• Population increase and additional loading on roads
• Legislative requirements
• Increase in community expectations
• Ongoing development & construction work impacting assets.
• Increase in heavy truck movements
a
• Use of automated pavement data collection for detailed assessments
• Routine asset assessments & defect inspections
• Proactive maintenance programs
• Planned renewal programs
• Community engagement & service level agreements
• Continuous improvement of Asset Management Plans
Waterways & Stormwater
• Flooding or scour and surcharge due to insufficient hydrological capacity
• Sinkholes, subsidence or blockages to network
• Ongoing development & construction work impacting assets & waterways
a
• Asset condition assessment through a CCTV and physical inspection program
• Investigation of the system to determine the hydrologic level of service
• Ongoing overland flow and flood investigations
• Proactive maintenance programs
• Planned renewal programs
• Continuous improvement of Asset Management Plans
Parks & Recreation
• Playgrounds exceeding recommended useful lives
• Potential hazards to the community
• Population increase & changing demographics
• Legislative requirements
• Over utilisation of some parks facilities, particularly sportsfields
• Increase in community expectations
• Growth in non-traditional sports
a
• Routine asset assessments & defect inspections
• Safety audits of playgrounds
• Proactive maintenance programs
• Planned renewal programs
• Agreed service level agreements
• Sustainability & cost reduction initiatives
• Continuous improvement of Asset Management Plans
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Specific Actions Required to Improving Council’s Asset Management Capabilities
NO ACTION DESIRED OUTCOME
1 Develop and annually review Asset Management Plans covering at least 10 years for all major asset classes.
Identification of services needed by the community and required funding to optimise ‘whole of life’
costs.
2 Develop a Long Term Financial Plan covering 10 years incorporating asset management plan expenditure projections with a sustainable funding position outcome.
Sustainable funding model to provide Council services.
3 Incorporate Year One of the Long Term Financial Plan revenue and expenditure projections into annual budgets.
Long term financial planning drives budget deliberations.
4 Review and update asset management plans and long term financial plans after adoption of annual budgets. Communicate any consequence of funding decisions on service levels and service risks.
Council and the community are aware of changes to service levels and costs arising from budget decisions.
5 Report Council’s financial position at Fair Value in accordance with Australian Accounting Standards, financial sustainability and performance against strategic objectives in Annual Reports.
Financial sustainability information is available for Council and the community.
6 Ensure Council’s decisions are made from accurate and current information in asset registers, on service level performance and costs and ’whole of life’ costs.
Improved decision making and greater value for money.
7 Report on Council’s resources and operational capability to deliver the services needed by the community in the Annual Report.
Services delivery is matched to available resources and operational capabilities.
8 Ensure responsibilities for asset management are identified and incorporated into staff position descriptions.
Responsibility for asset management is defined.
9 Implement an Improvement Plan to realise ‘core’ maturity for the financial and asset management competencies within five years.
Improved financial and asset management capacity within Council.
10 Meet six monthly with Group Manager - Finance and
Organisational Performance and Principal Coordinator - Asset Management on development and implementation of Asset Management Strategy, Asset Management Plans and Long Term Financial Plans.
Oversight of resource allocation and performance.
The Asset Management Strategy proposes strategies to enable the objectives of the Strategic Plan, Asset Management Policy and Asset Management Vision to be achieved.
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P roject ed R esour ce R equir ements & T ime F rames A SSET MANA GEMENT S TRA TE GY 20 1 7-2021
AssetMaintenance&RenewalsFY19/20FY20/21FY21/22FY22/23FY23/24FY24/25FY25/26FY26/27FY27/28FY28/29 Buildings AssetMaintenance4,179,879$4,272,629$4,375,060$4,480,033$4,589,847$4,732,664$4,928,805$5,072,211$5,190,493$5,311,356$ AssetRenewals4,010,000$4,090,200$4,172,004$4,255,444$4,340,553$4,427,364$4,515,911$4,606,230$4,698,354$4,792,321$ Buildings8,189,879$8,362,829$8,547,064$8,735,477$8,930,400$9,160,028$9,444,716$9,678,441$9,888,847$10,103,677$ CivilAssets(Roads,Traffic,Bridges,Pathways&Waterways) AssetMaintenance6,452,076$7,411,683$7,938,354$8,544,794$9,326,486$10,143,009$10,779,036$11,030,042$11,383,710$11,760,257$ AssetRenewals13,969,083$14,677,575$15,364,919$16,093,882$16,860,694$17,731,362$18,658,471$19,585,036$20,272,213$20,984,860$ CivilAssets(Roads,Traffic,Bridges,Pathways&Waterways)20,421,159$22,089,258$23,303,273$24,638,676$26,187,180$27,874,371$29,437,507$30,615,078$31,655,923$32,745,117$ ParksInfrastructure AssetMaintenance2,462,579$3,168,698$3,801,841$4,593,577$5,159,795$5,433,780$6,004,424$6,583,491$6,936,689$7,128,156$ AssetRenewals1,865,000$1,902,300$1,949,858$1,998,604$2,048,569$2,099,783$2,152,278$2,206,085$2,261,237$2,317,768$ ParksInfrastructure4,327,579$5,070,998$5,751,699$6,592,181$7,208,364$7,533,563$8,156,702$8,789,576$9,197,926$9,445,924$ ALLASSETS(excludingLand) AssetMaintenance13,094,534$14,853,010$16,115,255$17,618,404$19,076,128$20,309,453$21,712,266$22,685,745$23,510,892$24,199,769$ AssetRenewals19,844,083$20,670,075$21,486,781$22,347,930$23,249,816$24,258,509$25,326,660$26,397,351$27,231,804$28,094,949$ ALLASSETS(excludingLand)32,938,617$35,523,085$37,602,036$39,966,334$42,325,944$44,567,962$47,038,926$49,083,096$50,742,696$52,294,718$
62 The Hills Shire Council Resourcing Strategy 2017-2021 Drivers affecting demand include things such as population change, regulations, changes in demographics, seasonal factors, vehicle ownership rates, consumer preferences and expectations, technological changes, economic factors and environmental awareness.
NORTH WEST GROWTH CENTRE The Hills Shire forms part of the Central City District of the Greater Sydney Region together with Parramatta, Cumberland and Blacktown local government areas. The district has a significant role to play in delivering housing and driving economic growth with the population of the district expected to reach 1,521,500 people by 2036, an increase of close to 60% (550,500 people) on the current district population of 971,000.
The Western Sydney Airport will cater for ongoing growth in demand for air travel for existing and future residents of the district and is vital to facilitating the longer term growth of the region.
Council supports the planning and delivery of key infrastructure items that will improve both vehicular and public transport connections to the Western Sydney Airport, including:
•
The M9 Motorway (Outer Sydney Orbital) extending from the Central Coast through to the Illawarra, west of the future airport;•
The M12 Motorway providing a link to the airport by connecting the M7 Motorway and the Northern Road; and•
Continuation of the Sydney Metro Northwest south, from Cudgegong Road to St Marys and the Western Sydney Airport. This rail infrastructure would connect into the South West Rail Link extension and would complete this ‘missing link’ in the rail network.These items are identified as initiatives for investigation over the next 10 years in the Future Transport 2056 Draft Services and Infrastructure Plan recently released by the NSW Government for Greater Sydney and the Central City District.
Other key infrastructure projects that warrant a higher level of commitment to unlock potential, improve access to employment opportunities and support population growth include:
•
Western Sydney light rail, including a connection between Parramatta & Castle Hill;and
•
An arterial road connection via Annangrove Road to connect the North West Growth Centre to Hornsby or the Sydney CBD. Based on recent work completed by the Department of Planning and Environment for the North West Priority Growth Area, there is capacity for the release area to accommodate 90,000 dwellings (20,000 more dwellings than originallyidentified). Given the impending population increase and the additional demands this will place on the existing transport network, it is important that priority is given to investigating and setting aside land for this arterial link.
Traffic congestion is a major problem and it will worsen over the next 10 to 15 years as more than 60,000 planned dwellings are constructed in the North West Growth Centre. Other than trains, investment in regional infrastructure through links and better direct access to motorways will become critical to free up capacity on local roads.
With urban development and population growth of this scale, The Hills Shire faces significant challenges maintaining its rural character and lifestyle, accommodating this growth and creating a sustainable environment, community and economy for the benefit of our current and future populations.
Future Demand
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IMPACTS OF TRENDS
The expected growth in population, residential, business and commerce has a direct impact on the demand for services and ultimately the number and size of assets to support those services.
Some of the challenges facing Council include:
•
Ensuring sufficient ongoing funds are available to operate, maintain and eventually replace new assets•
Maintaining existing infrastructure to an acceptable level of service•
Keeping up with the demand for new and improved services from our growing community•
Upgrading assets to comply with new environmental and safety standards•
Increased traffic congestion and dependence on motor vehicles•
Maintaining the quality of our environment including open spaces and rural settings The projected increase in population will have a significant impact on existing and future assets of Council. The most obvious impact will be in the form of increased usage commensurate with the increase in population. The less obvious challenge will be ensuring that the asset base is appropriate and necessary to meet the demands andrequirements of the changing LGA profile. These challenges will not only centre on the capacity of the asset but also its appropriateness to provide a service to the community.
DEMAND MANAGEMENT STRATEGIES Demand management strategies provide
alternatives to the creation of new assets. In order to meet future demand these strategies provide ways of modifying customer demands in order to maximise utilisation of existing assets.
Community Buildings
•
Develop a Buildings and Facilities Management Strategy•
Encourage sharing of facilities with government agencies (i.e. schools) Civil Infrastructure•
Continue lobbying the NSW Government to improve the capacity of the State Road network•
Promotion of public transport•
Encouraging alternate modes of transport including cycling and walking•
Conducting community education Waterways and Stormwater Systems•
Onsite stormwater retention (i.e. rain gardens and bio-swales)•
Improvements in water quality control•
Water sensitive urban design•
Stormwater harvesting Parks and Recreational Facilities•
Development of a Recreation Strategy•
Multi use of recreational facilities•
Improved/upgraded lighting to maximise training opportunities•
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64 The Hills Shire Council Resourcing Strategy 2017-2021
Asset Management Plans
Council’s infrastructure assets are valued approximately $1.6B as at 30 June 2018. Council also has $1.5B worth of land consisting of operational land, community land and land under roads. These assets support the delivery of services to the community.
$1.6 B *
COMMUNITY ASSETS
Current State of our Assets
PERCENTAGE OF TOTAL REPLACEMENT COST
The graph to the right shows the value of Council’s built assets by asset class, expressed as a percentage of the $1.6B total asset value.
17.43% 14.97% 63.74%
3.86% CIVIL INFRASTRUCTURE - BRIDGES & PATHWAYS
BUILDINGS
WATERWAYS & STORMWATER SYSTEMS
PARKS & RECREATIONAL FACILITIES
While a large portion of Council’s asset base is relatively young and not requiring significant renewal at this stage, a change in the way these assets are managed will be required as they start ageing. An understanding of how these assets fit into the provision of services will help Council maximize its investment and ensure money is being spent in the right place.
Each year Council allocates approximately 10%
of the recurrent budget for capital improvements and renewal. This amount is over and above those funds provided for asset maintenance and transfers to asset replacement reserves.
Funds will be allocated to infrastructure based on the following objectives as set out in Council’s adopted Financial Charter:
•
Asset renewals to be given priority over new projects so that existing infrastructure can be maintained at expected service levels - (Financial Charter 3).•
Lifecycle cost evaluations including construction, maintenance, operations and transfer to reserves for replacement to be carried out on all capital expenditure project proposals - (Financial Charter 3).•
Identify the source of funds of new capital expenditure projects to reflect the timing of the receipt of funds - (Financial Charter 3).•
Consider borrowing for new capital projects if a continuous income source can be identified to service the debt - (Financial Charter 3).ASSET VALUATION
Council’s non-current assets are progressively revalued to fair value in accordance with a staged approach as advised by the Office of Local Government.
Valuations undertaken on Council’s infrastructure assets have been carried out in accordance with the Australian Accounting Standards including:
•
AASB13 – Fair Value Measurement•
AASB116 – Property Plant and Equipment•
AASB5 – Assets Held for Sale•
AASB136 – Impairment of Assets•
Local Government Code of Accounting Practice and Financial Reporting.The Hills Shire Council is undertaking community buildings revaluations in 2018-19. Council is also planning to undertake current replacement cost revaluations for all of the asset classes in civil infrastructure, pathways, waterway and stormwater systems in 2019-20.
ASSET CLASSES SHOWN
* Book value as at 30 June 2018
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