Building Asset Management Plan 2017 revision · Through review of common customer requests and...
Transcript of Building Asset Management Plan 2017 revision · Through review of common customer requests and...
REVISION HISTORY
Revision Description Date
1.0 Final AMP approved by Council following community consultation November 2016
1.1 Updates to ARRE and LTFP figures based on updated condition data, and in line with reviewed LTFP November 2017
EXECUTIVE SUMMARY
The objective of infrastructure asset management is to ensure that assets provide their required levels of services in the most cost effective manner to
cater for both present and future customers1. This Asset Management plan focuses on the management of the City of Burnside’s building assets,
which includes community, utility, amenity, sport, heritage, special and business buildings. This plan specifies the requirements for effective
management of this asset group and the corresponding financial implications. This plan is reviewed annually, with a formal update completed every 4
years.
Effective asset management of the City of Burnside’s building assets will contribute towards achievement of the following strategic objectives2:
> Fit for purpose and cost-effective infrastructure that meets community needs.
> A financially sound Council that is accountable, responsible and sustainable.
> Conservation and enhancement of the historic character of the City.
The contribution towards achievement of theses strategic goals and asset management objectives will be achieved by:
> Stakeholder consultation to establish and confirm service standards.
> A regular program of inspections and monitoring activities to assess asset condition and performance.
> Application of a systematic analysis to prioritise renewals and establish the most cost effective works programs.
> Continuously reviewing and improving the quality of Asset Management practices.
The total current replacement cost of the City of Burnside’s building assets is around $112m. The projected expenditure necessary to meet the service
standards for these building assets averages around $1.6m per year over the next 10 years. This is the average annual level of spend required to
ensure all assets are maintained in accordance to current standards and renewed at appropriate times, in line with endorsed strategies. Actual annual
expenditure requirements will differ from year to year as specific assets are due to be renewed.
1 Institute of Public Works Engineering Australia, 2015, 'International Infrastructure Management Manual'
2 City of Burnside, 2012, 'Be the Future of Burnside - Our Strategic Community Plan 2012-2025'
FREQUENTLY ASKED QUESTIONS
What is an asset?
An asset an item of property owned by the Council regarded as having
value. Council’s assets range from roads and footpaths to buildings,
playgrounds, stormwater infrastructure and street furniture.
What is an asset management plan?
The purpose of an asset management plan is to help an organisation
manage their infrastructure and other assets to an agreed standard of
service. The plan outlines what needs to be invested in each of our
asset classes in order to meet these defined service standards over
the next ten years.
This asset management plan is prepared as a core asset management
plan in accordance with the International Infrastructure Management
Manual3. It is prepared to meet legislative and organisational
requirements for sustainable service delivery and long term financial
planning and reporting.
What are the objectives of asset management?
The basic premise of infrastructure asset management is to intervene
at strategic points in an asset’s life cycle to extend the expected
3 Institute of Public Works Engineering Australia, 2015, 'International
Infrastructure Management Manual'
service life, and thereby maintain its performance. Generally speaking,
the cost of maintaining an asset decreases with planned maintenance
rather than unplanned maintenance, however, excessive planned
maintenance increases costs. An objective of asset management is to
strategically time infrastructure renewals before unplanned
maintenance costs become excessive, but not so soon that assets are
renewed before it is really needed.
Council’s goal in managing infrastructure assets is to meet the required
levels of service in the most cost effective manner for present and
future customers. The key elements of asset management are4:
> Taking a life cycle approach.
> Developing cost-effective management strategies for the long
term.
> Providing a defined level of service and monitoring
performance.
> Understanding and meeting the demands of growth through
demand management and infrastructure investment.
> Managing risks associated with asset failures.
> Sustainable use of physical resources, and
> Continuous improvement in asset management practices.
4 Institute of Public Works Engineering Australia, 2015, 'International
Infrastructure Management Manual'
How do we determine when renewals are required?
Renewals are determined by considering the ability of an asset to meet
an agreed standard of service. This is done by regularly reviewing the
condition of assets and using this information as a basis to prioritise
renewals.
How do we determine our levels of service?
Our levels of service have been developed based on legislative
requirements, customer research and expectations, and strategic
goals.
Why does Council need an Asset Management Plan?
Under section 122 of the Local Government Act, the City of Burnside
has a legislative requirement to develop Asset Management Plans. In
addition to the legislative requirement, there is a need for the Council
to ensure effective investment in assets which need it most by having a
planned, systematic approach to Asset Management.
How does Council include community feedback into the Plan?
Council includes community feedback into Asset Management Plans in
a number of ways:
Through information provided via our annual community survey.
Through review of common customer requests and complaints in
our Customer Request Management (CRM) system, and
Through a formal community engagement process where the
community is invited to provide feedback on draft Asset
Management Plans, which is then incorporated into the final
documents.
Community = $23m
Utility = $16.2m
Amenity = $1.4m
Sport = $4.9m
Heritage = $58.8m
Special = $3.6m
Business = $4.2m
0
10
20
30
40
Amenity Business Community Heritage Special Sporting Utility
OUR BUILDING INFRASTRUCTURE
PROJECTED CAPITAL
EXPENDITURE
TOTAL CURRENT
REPLACEMENT COST OF
BUILDING ASSETS =
$112,072,297
16
2
72
6 6
8
34
BUILDING CONDITIONS
very good
good
average
poor
very poor
LTFP = long term financial plan ARRE = annual required renewal expenditure
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
ARRE
averageARRE
LTFP
TABLE OF CONTENTS
EXECUTIVE SUMMARY ....................................................................................................................................................................................................... ii
FREQUENTLY ASKED QUESTIONS .................................................................................................................................................................................. iii
INTRODUCTION .................................................................................................................................................................................................................... 8
GOALS AND OBJECTIVES ............................................................................................................................................................................................... 9
LEVELS OF SERVICE ......................................................................................................................................................................................................... 11
BUILDING HIERARCHY .................................................................................................................................................................................................. 11
FUTURE DEMAND .............................................................................................................................................................................................................. 15
DEMAND FORECAST ..................................................................................................................................................................................................... 15
DEMAND MANAGEMENT PLAN ..................................................................................................................................................................................... 16
NEW ASSETS FROM GROWTH ..................................................................................................................................................................................... 16
ASSET MANAGEMENT PRACTICES ................................................................................................................................................................................. 17
STANDARDS AND GUIDELINES .................................................................................................................................................................................... 17
ACCOUNTING/FINANCIAL SYSTEMS ........................................................................................................................................................................... 17
ASSET MANAGEMENT SYSTEMS ................................................................................................................................................................................. 17
RISK MANAGEMENT ...................................................................................................................................................................................................... 19
LIFECYCLE MANAGEMENT PLAN .................................................................................................................................................................................... 22
PHYSICAL PARAMETERS .............................................................................................................................................................................................. 22
COMPONENTISATION .................................................................................................................................................................................................... 23
USEFUL LIVES AND UNIT RATES ................................................................................................................................................................................. 25
ASSET VALUATIONS ...................................................................................................................................................................................................... 26
MAINTENANCE PLAN ........................................................................................................................................................................................................ 28
RENEWAL PLAN ................................................................................................................................................................................................................. 30
RENEWAL PRIORITISATION .......................................................................................................................................................................................... 30
RENEWAL STANDARDS ................................................................................................................................................................................................. 30
REQUIRED RENEWAL EXPENDITURE ......................................................................................................................................................................... 30
REQUIRED RENEWAL EXPENDITURE ............................................................................................................................................................................ 31
.......................................................................................................................................................................................................................................... 31
IMPACT OF DEFERRING RENEWAL WORKS .............................................................................................................................................................. 32
ENHANCEMENT PLAN ....................................................................................................................................................................................................... 32
FORECAST UPGRADE/NEW ASSETS EXPENDITURE ............................................................................................................................................... 32
DISPOSAL OF ASSETS ...................................................................................................................................................................................................... 33
FINANCIAL SUMMARY ....................................................................................................................................................................................................... 34
FINANCIAL STATEMENTS AND PROJECTIONS .......................................................................................................................................................... 34
FUNDING STRATEGY ..................................................................................................................................................................................................... 35
MONITORING AND REVIEW PROCEDURES ................................................................................................................................................................ 37
IMPROVEMENT PLAN .................................................................................................................................................................................................... 37
GLOSSARY ......................................................................................................................................................................................................................... 38
BIBLIOGRAPHY .................................................................................................................................................................................................................. 44
8 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
INTRODUCTION
The current building stock of the City of Burnside consists of 148 individual buildings that have a range of uses under the broad groupings of:
> Amenity e.g. public toilets
> Business e.g. Depot administration building
> Community e.g. Community Centres
> Heritage e.g. Regal Theatre
> Special e.g. Burnside CFS Fire Station
> Sporting e.g. Bowling clubs
> Utility e.g. Depot sheds
Each of these uses are determined by a range of services delivered by the building and its surrounds at the most basic level, however, all buildings
provide the service of accommodation. The type and level of this accommodation is then typically determined by the service needs of the end users of
the building.
The types and levels of service that are catered for in the City of Burnside property portfolio include:
> Highly regulated services such as kindergartens and food preparation areas.
> High profile community and operational services such as libraries, theatres, council meetings rooms and function spaces.
> Public sporting and recreational facilities at a variety of levels.
> Public toilets.
> Council field operations facilities, and
> Storage facilities and shelters.
Council’s goal is to ensure that these buildings can deliver the type and level of accommodation required now and into the future.
9 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
This Asset Management Plan provides:
> Details of what building stock Council currently owns and operates, the current state of that stock, and how much they cost to own, operate,
and maintain.
> An overview of the levels of service provided by these buildings.
> A summary of the expenditure required and planned for over the next 10 years to ensure buildings continue to provide a satisfactory level of
service.
GOALS AND OBJECTIVES
The primary objective of this Plan is to ensure that the current building stock owned and operated by the City of Burnside is managed in terms of
ongoing maintenance and renewal expenditure such that all desired levels of service are met now and into the future.
Achieving this objective will require the meeting of a number of goals in line with Councils Vision including:
> The effective management of Council’s building and facility assets in line with corporate policies, strategies and objectives, statutory and legislative requirements and regulations.
> Ensuring that building and facility assets are safe, accessible, well maintained and meet customers’ needs in a manner that is sustainable.
> Recognising appropriate sources of capital investment required to meet Council’s asset renewal and replacement needs.
> Maximising the service potential of current assets by ensuring they are used and maintained appropriately.
> Achieving better value for money through evaluation processes that take into account lifecycle costing.
> Minimising Council’s exposure to risk as a result of asset failures.
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LEVELS OF SERVICE – OUR DRIVERS
7.2/10
7.0/10
Overall satisfaction with council’s
performance
The overall planning of the City
CUSTOMER RESEARCH
3Source: City of Burnside Community Survey
November 2015
CUSTOMER EXPECTATIONS3
Heritage listed / historic buildings
maintained / preserved / communicate
heritage plans
Maintain public facilities / toilets
LEGISLATIVE
REQUIREMENTS Requirement Legislative Acts and Regulations
Safety Work Health and Safety Act 2012
Building Code of Australia
Dangerous Substances Act 1979
Electrical Safety Act 2001
Fire and Emergency Services Act 2005
Local Government Act 1999
Relevant Australian Standards
Accessibility Disability Services Act 1993
Disability Discrimination Act 1992
Building Systems Building Act 1975
Building Regulation 2003
Graffiti Control Act 2001
Building Work Contractors Act 1985
Environment Climate Change & Greenhouse Emissions
Reduction Act 2007
Water Conservation Act 1936
Heritage Structures Heritage Act 1993
Heritage Places Act 1993
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LEVELS OF SERVICE
A major focus of this Plan is to clarify the current levels of service relating to Council’s buildings. These levels of service will take into account factors
including quality, reliability, responsiveness, sustainability timeliness, accessibility and cost.
While the services delivered within each building are a primary driver of Building levels of service, they are not of themselves considered Building
Services (e.g. how well a customer is treated is not a reflection of the level of service of the building, whereas the level of comfort that customer felt in
the building is a service level that can be measured). The building levels of service relate to how well the building and its operation meet the needs of
the community and Council.5
BUILDING HIERARCHY
Levels of service reflect the hierarchical importance of a building, with an A1 building having the highest level of service & A4 the lowest.
In line with Council’s Property Strategy6, the following hierarchy has been adopted.
Building Type Building Information Description and Examples
A1 Owned and Operated Strategic importance
High visibility
High Expectation in presentation
Assets that showcase Council to the public.
Civic Centre, Library, Community Centres, Aquatic Centres
A2 Owned and operated Strategic Importance
Medium visibility
Function & Safety are critical
Assets that provide for public use.
Public Toilets, recreational assets
A3 Owned and operated Strategic Importance
Low visibility
Assets that maintain the operational activities of Council are
normally occupied.
5
6 Assetic, 2016, 'Property Strategy - City of Burnside'
12 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
Building Type Building Information Description and Examples
Function & safety are critical Works Depot, biodiversity nursery
A4 Owned and Operated Operational importance
Low utilisation
Assets that contribute to Council’s operations; are not normally
occupied.
Sheds etc
B1 Owned and Managed.
Operated by others
Medium visibility
Low use
Function & Safety are Important
Assets that are Council owned but used by others under various
leases and agreements.
Sporting and recreational clubs, community centres , kiosks
B2 Owned
Managed and operated by others
Low visibility
High use
Risk is outsourced
Assets that are fully leased to another entity and then sub leased
by that entity.
Hospitals, theatres, housing assets, sporting facilities, community halls,
B3 Owned, Managed and operated by others
Various Visibility
High use, cultural or heritage significance
Risk is outsourced
Assets that our completely outsourced include all risk in the
commercial terms.
Shops and other retail/commercial/industrial spaces. Kindergartens and sporting complexes
C1 Not owned but on council land
Land on Asset Register
Buildings not owned or maintained
Assets where the entity has a stake by means of land ownership.
Country Fire Service
LEVELS OF SERVICE ARE ESTABLISHED BASED ON:
Legislative Requirements
Customer Research and Expectations
Strategic Goals
13 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
TABLE 1: CURRENT LEVELS OF SERVICE
Service
Category
Community Service
expectation
Performance Measure Process Performance Target Current Performance
Quality Buildings and fixtures
that are in good
condition
Internal assessment annually;
independent assessment very 5
years
Condition ratings of 4 or better (out
of 5)
Will be achieved on all assets by
end of 2021 / 2022 financial
year, in accordance with the
Property Strategy Priority List
timeline
Function Buildings and fixtures
that suit their use
Annual Facility inspections and
incoming complaints highlight
issues
Less than 3 complaints annually
from a third party; less than 3
breach notices per issue; less than
3 complaints by users per issue
Compliant
Safety Buildings and fixtures
that are compliant with
legislation
Building services are contracted
externally to specialists in each
field; buildings are assessed
annually
Total compliance Current shortfalls in Essential
Safety Provisions and Disability
Discrimination Act compliance
(to be addressed in 2021 / 2022
financial year)
Continuous
Improvement
Asset management
continues to trend
towards best practice
and economic viability
Funds spent on maintenance,
operational and capital works
meet business model
requirements
Capital budget should match AMP
predicted expenditure
Compliant
14 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
TABLE 2: DESIRED LEVELS OF SERVICE
Levels of Service Performance
Measurement Process
Target Performance Actions to meet Target Performance
Assets comply with safety legislation Safety Audits 100% compliance with legislation Annual Audit
Provide safe assets to all users;
respond to unsafe conditions
appropriately
Measure time required to
respond to safety issues
reported by customers
98% of hazards made safe within
two hours for urgent safety issues.
Less urgent issues actioned within a
week
Continuous review and monitoring
responses and resources – Building
Management Requests, external
communications
Provide security as required by asset
group
Security checks, audits Provide intended security with
monitoring
Continuous review and monitoring
Maintain condition, accessibility and
appearance of assets at a rating 2 or
better
Condition appraisals Maintain all assets ratings at 4 or
better
Perform condition appraisals of all
assets to identify issues to upgrade
assets to target performance
Ensure essential services available are
in working order and meet legislative
requirements
Essential services &
performance audits of asset
components
100% compliance with legislation.
Report against maintenance plans
Plan programmed maintenance
Assets meet the users' requirements
regarding suitability, convenience etc.
Customer surveys,
legislative requirements
Targets to set according to
customer surveys. Audit against
legislation
Develop customer surveys to finalise
requirements. Schedule audits
Assets to have minimal impact on
environment
Legislative requirements 100% compliance with legislation Encourage environmental audits
15 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
Levels of Service Performance
Measurement Process
Target Performance Actions to meet Target Performance
Assets to deliver optimal service at
minimum cost to Council and end users
Customer surveys, audits Targets to set according to customer
surveys
Develop customer surveys to finalise
requirements; plan cost effective
solutions
Assets to cater future demand Customer surveys,
performance audit
Suitable renewal & upgrading of
assets
Plan in advance as per statistical data
Indications of desired levels of service are currently obtained from formal surveys, residents’ feedback to Councillors and staff, service requests and
correspondence.
FUTURE DEMAND
This section of the plan analyses potential factors effecting demand including population growth, social and technology changes. The impact of these
trends is examined and demand management strategies recommended as required to modify demand without compromising customer satisfaction.
DEMAND FORECAST
Factors affecting demand include (but are not limited to) population change, climate change, changes in demographics, seasonal factors, vehicle
ownership, consumer preferences and expectations, economic factors, agricultural practices and environmental awareness. The population for the City
of Burnside was 43,986 in 2014 and is projected to grow to around 45,245 by 2031, which may realise a small increase in maintenance of our building
assets.
16 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
DEMAND MANAGEMENT PLAN
Demand for new services will be managed through a combination of managing existing assets, upgrading of existing assets and providing new assets
to meet demand. Demand Management practices include non-asset solutions, insuring against risks and managing failures.
Opportunities identified to date for Demand Management are shown below. Further opportunities will be developed in future revisions of this
infrastructure and asset management plan.
NEW ASSETS FROM GROWTH
The City of Burnside is principally a fully developed urban area with relatively few opportunities for new assets as a result of growth. However, the
Council Property Strategy provides a means to continually assess the current utilisation condition and utilisation of buildings to identify opportunities to
reconfigure, enhance or repurpose buildings to meet changes in demand.
Service Activity Demand Management Plan
Procedural change: procurement and fiscal practices
Develop panels of contractors, increase resources to cope with contractor management, retrain staff for flexible roles
Utilisation Increase functionality and multiple use focus for assets to support increased utilisation
Corporate Policies Develop meaningful Strategies to guide future planning
Technology Continue to professionally network to ensure best practice and new technologies are anticipated and accommodated
17 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
ASSET MANAGEMENT PRACTICES
This section identifies the strategies, practices and guidelines supporting Asset Management at the City of Burnside.
STANDARDS AND GUIDELINES
Asset Management practices and processes are driven by a number of legislative requirements and assisted by developed guidelines:
> Local Government Act 1999 (sets out Council’s Asset Management responsibility and the requirement to develop Asset Management Plans).
> Australian Accounting Standard 27 Financial Reporting by Local Governments 1996 (sets out the asset accounting requirements).
> International Infrastructure Management Manual, NAMS (Provides guidance and direction on asset management policy and plan development).
ACCOUNTING/FINANCIAL SYSTEMS
Council utilises 'TechnologyOne' software as Council’s financial management and accounting system. Incorporated into 'TechnologyOne' are facilities
to manage fixed assets across the organisation with extensive functionality and reporting for the full lifecycle of assets that provides full transparency,
from acquisition to disposal. The system also offers a total and comprehensive purchasing solution, encompassing controlling, maintaining and
streamlining of purchasing activities across the organisation.
ASSET MANAGEMENT SYSTEMS
Council utilises 'TechnologyOne' software as Council’s asset management system. This ensures there is full integration between operating and
financial functions. Council utilises a combined Financial / Operational Asset register that avoids any reconciliation issues that arise from two separate
registers.
TechnologyOne IntraMaps is the corporate GIS. The GIS is predominantly used to show information such as cadastral, topographic, aerial information
and asset location. It is a computer mapping system that graphically represents the geographic component of data that is housed within
TechnologyOne.
Assetic myData and Predictor are used for extended data capture and predictive modelling of Council’s asset network.
18 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
INFORMATION FLOWS
ASSET MANAGEMENT
PLAN
Asset register data on size, age, value,
remaining life of the network
Unit rates for categories of
work/material
Adopted service levels
Projections of various factors affecting
future demand for services
Correlations between maintenance and
renewal, including decay models
Data on new assets acquired by
council
Assumed Works Program
and trends
Resulting budget,
valuation and
depreciation projections
Useful life analysis
Long term financial plan
Strategic business plan
Annual budget
Departmental business
plans and budgets
19 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
RISK MANAGEMENT
The objective of the risk management process with regards to building assets is to ensure that:
> All significant operational and organisational risks are understood and identified.
> The highest risks that need to be addressed in the short to medium term are identified.
> Strategies and treatments to address risks are identified and applied.
An assessment of risks associated with service delivery from infrastructure assets has identified the most critical risks to Council. The risk assessment
process identifies and assesses risks, develops a risk rating and develops a risk treatment plan for non-acceptable risks.
The key risk management criteria relating to Council’s building assets include:
> Public health and safety.
> Service provision.
> Environmental and legal compliance.
> Security, theft and vandalism.
> Business interruption.
> Financial risk (escalating costs in deterioration).
> Asset damage through storms, flooding, water damage or events such as accidents.
Risk identification for building assets can be identified from a number of resources such as:
> Cyclical and Routine inspections.
> Reports and complaints from general public.
> Information obtained from incidents.
> Advice from professional bodies.
> Past experience.
Risk ratings are determined using the City of Burnside’s risk matrix.
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TABLE 3: RISK RATING MATRIX
Consequence
Insignificant Minor Moderate Major Massive
Lik
elih
oo
d
Certain Moderate High High Extreme Extreme
Likely Moderate Moderate High Extreme Extreme
Possible Low Moderate Moderate High Extreme
Unlikely Low Low Moderate High High
Rare Low Low Low Moderate High
Once risks have been assessed and rated the most significant risks (those rated as high or extreme), are isolated for treatment/control. Those
identified as moderate or low will continue to be monitored and reviewed if circumstances change.
Options to treat risk posed by building assets include (but not limited to)7:
7 International Organization for Standardization, 2009, 'ISO 31000:2009 Risk Management – Principles and Guidelines'
> risk elimination
> reduction in the cause or likelihood of the event occurring
> reduction in the consequence or severity of the event if it were to occur
> increasing the maintenance regime
> initiating council improvements
> changing operating processes and procedures
> sharing the risk through insurance or contracts
> doing nothing and accepting the risk
21 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
TABLE 4: MAJOR RISKS RELATING TO BUILDING ASSETS
Risk Consequence Likelihood Risk Rating Proposed Treatment Responsibility Completion Date
Natural disaster Massive Unlikely High Manage through existing
systems and procedures
Emergency
Response Plan
n/a
Injury sustained as a
result of inadequate
asset management
Moderate Unlikely Moderate Robust asset management
policy and plans
Regular inspection program
Maintenance program to
address defects
Engineering, Strategy
& Assets
Open Space,
Recreation &
Property
Ongoing
Injury sustained whilst
work is occurring to
renew or replace a
building asset
Major Unlikely High Contractor management
procedures
Regular site inspections and
monitoring
Construction risk assessments
Open Space,
Recreation &
Property
Ongoing
Destruction of building
by fire
Massive Possible Extreme Regular building inspections
and tagging of electrical
equipment
Open Space,
Recreation &
Property
Ongoing
22 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
LIFECYCLE MANAGEMENT PLAN
This section outlines asset performance and condition information, and uses Asset Management principles to develop broad strategies and specific
work programs to achieve the service standards previously outlined.
It presents an analysis of available asset information and the life cycle management plans covering the three key work activities to manage the
building network;
> Operations and Maintenance Plan: Activities undertaken to ensure efficient operation and serviceability of the assets. This will ensure that the
assets retain their service potential over the course of their useful life.
> Renewal Plan: Provides a program of progressive renewal of individual assets. Deteriorating asset condition primarily drives renewal needs.
> Enhancement Plan: Provides a program of system enhancements to improve parts of the system performing below target service standards and
to develop the system to meet any future demand requirements. Sub-standard asset performance primarily drives asset development needs.
PHYSICAL PARAMETERS
Buildings are general defined as being a roofed structure with at least 2 enclosed walls. This definition covers the majority of assets in Council’s
Building Register.
Council has 148 buildings in its Building Register. These range from significant buildings such as the Civic Centre to storage sheds and shelters. It
also includes buildings over which Council exercises little or no control such as the Burnside Memorial Hospital Building.
23 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
COMPONENTISATION
The majority of Council’s habitable buildings have been componentised to the Following Levels:
Structure > Sub Structure (Below Floor elements) > Super Structure (Floor to underside of Roof)
Roof Fitouts & Fittings
> Floor Coverings > Fixtures Fittings & Screens
Services
> Electrical > Hydraulic > Fire > Mechanical > Transport (Lifts) > Security
24 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
Condition Rating Description
0, 1 Very Good: Only planned maintenance required
2 Good: Minor maintenance required plus planned maintenance
3 Fair: Maintenance required
4 Poor: Significant renewal/upgrade required
5 Very Poor: Unserviceable
OUR ASSET CONDITION
The condition of our Buildings is based on the Service
Potential Index (SPI) which has been derived from the most
recent valuation assessment (2015).
BUILDING CONDITIONS
very good
good
average
poor
very poor
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
THE CONDITION OF OUR BUILDING TYPES
25 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
USEFUL LIVES AND UNIT RATES
Useful Life and Unit Rate Calculation Methodology
Building values, useful lives and Accumulated Depreciation have been calculated by APV as at 30 June 2015.
Unit rates are not used for this valuation method.
The useful life ranges shown in the table below are a weighted average useful life as calculated by APV for valuation.
TABLE 5: COMPONENT USEFUL LIVES
Component Group Component Useful Life Range years)
Structure Sub Structure 40 -150
Super Structure 40 - 200
Roof Roof Cladding 15 - 125
Fitouts & Fittings Floor Coverings 15 - 45
Fixtures, Fittings & Screens 45 - 65
Services Electrical 64 - 90
Hydraulic 70 - 100
Fire 15 - 20
Mechanical 10 - 60
Transport (Lifts) 94
Security 10 - 20
26 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
ASSET VALUATIONS
The value of Council’s Building assets is summarised in the table below. These figures are derived from valuations undertaken by APV8 & Liquid
Pacific9 as at 30 June 2015, with new buildings commissioned since that date included at cost. Annual Depreciation is an estimate only and does not
take into consideration the impact of renewal or upgrade expenditure.
TABLE 6: ASSET VALUATION FIGURES
Note, the number of Buildings excludes buildings below the valuation threshold or those marked for demolition or disposal. There a four such buildings
on the register: Laurel Ave Nursery shade house, Newland Park toilets, Newland Park storage shed, and Conyngham St Depot storage areas (all are
below the valuation threshold).
8 APV Valuers and Asset Management, 2015, 'Valuation of City of Burnside Building Assets'
9 Liquid Pacific, 2015, 'Burnside City Council 2014 Fair Valuation'
Building Type Current Replacement Cost Depreciated amount Depreciated Replacement Cost Annual Depreciation
Community $22,961,976
$4,313,623
00
$18,648,352 $347,612
Utility $16,236,510 $2,432,257
$13,804,252 $246,224
Amenity $1,400,020 $186,019
$1,214,000 $16,848
Sport $4,886,415 $803,417
$4,082,997 $81,600
Heritage $58,793,926 $11,068,275 $47,725,650 $893,606
Special $3,584,050 $324,517 $3,259,532 $50,642
Business $4,209,400 $909,524 $3,299,875 $78,865
TOTAL: $112,072,297 $20,037,635 $92,034,658 $1,715,401
27 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
$0 $50,000,000 $100,000,000 $150,000,000
Community
Utility
Amenity
Sport
Heritage
Special
Business
Current Replacement Cost
Depreciated amount
Depreciated Replacement Cost
Annual Depreciation
28 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
MAINTENANCE PLAN
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.
Maintenance includes responsive and planned activities.
Responsive maintenance is unscheduled repair work carried out to rectify defects an remove hazardous situations in response to service requests
and management/supervisory directions.
Planned maintenance is work that is planned and scheduled often as a preventative measure against failure, activities include inspection, servicing of
plant and equipment and cleaning, this may include cyclical maintenance activities (undertaken on a regular cycle) such as replacing air conditioning
filters or repainting.
Maintenance expenditure trends are shown on the following page. These figures have been extracted from the Asset Management System.
29 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
$0
$50,000
$100,000
$150,000
$200,000
$250,000
2013/14 Expenditure 2014/15 Expenditure 2015/16 Budget
OUR MAINTENANCE EXPENDITURE
Average = $195,162
30 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
RENEWAL PLAN
Renewal expenditure is major work that does not increase the asset’s design capacity but restores, rehabilitates, replaces or renews an existing asset
or component to its original service potential. Work over and above restoring an asset to original service potential is considered enhancement or new
works expenditure.
Currently, assets requiring renewal are identified from estimates of remaining life and building inspections from which cost estimates for renewal are
prepared, prioritised and scheduled in future works programmes. These renewals currently make up the Long Term Financial Plan for Building
renewal shown on the following page.
Predictions are based on building component condition, treatment costs and component degradation profiles. Modelling has been undertaken using
condition measures derived from current asset valuation figures. The results of this modelling are shown on the following page. While these results
are the most accurate figures available at this stage, these figures will be revised after a full physical condition assessment of the buildings has been
undertaken.
RENEWAL PRIORITISATION
Prioritisation of renewals is based on asset importance and cost benefit.
RENEWAL STANDARDS
Renewal work is always carried out to current standards and capacity unless a reduced capacity can be justified.
REQUIRED RENEWAL EXPENDITURE
Required renewal expenditure is shown below. Note that identified investment may change based on the outcomes of a full physical condition
assessment of buildings.
31 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
REQUIRED RENEWAL EXPENDITURE
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
ARRE average ARRE LTFP
32 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
IMPACT OF DEFERRING RENEWAL WORKS
Renewal works identified in terms of renewal strategies may be deferred if the cost (or aggregate cost) is beyond the current financial ability to fund it.
This can occur when there are short term renewal profile peaks, or higher priority works are required on other infrastructure asset groups.
When renewal works are deferred, the impact of the deferral on the assets ability to still provide the required level of service will be assessed.
Although the deferral of some renewal works may not impact significantly on the short-term operation of the assets, repeated deferral will create a
liability (backlog) in the longer term.
ENHANCEMENT PLAN
New works are those works that create a new asset that did not previously exist, or works which upgrade or improve an existing asset beyond its
existing capacity. They may result from growth, social or environmental needs. Assets may also be acquired at no cost to the Council from land
development, or through ‘gifts’ provided to the Council.
FORECAST UPGRADE/NEW ASSETS EXPENDITURE
Planned upgrade/new asset expenditures are summarised in Figure 1.
33 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
FIGURE 1: FORECAST UPGRADE / NEW ASSET EXPENDITURE
New assets and services are to be funded from Council’s Capital Works Program and grants where available.
DISPOSAL OF ASSETS
Council has no building assets proposed to be decommissioned. As such, there is no funding required or expected from the decommissioning of any
assets at this point in time. The process to identify potential disposal of building assets is considered through the City of Burnside’s Property Strategy.
$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
34 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
FINANCIAL SUMMARY
This section contains the financial requirements resulting from all the information presented in the previous sections of this infrastructure and asset
management plan. The financial projections will be improved as further information becomes available on desired levels of service and current and
projected future asset performance.
FINANCIAL STATEMENTS AND PROJECTIONS
FIGURE 2: FORECAST EXPENDITURE FOR BUILDING ASSETS
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
New / Upgrade
Maintenance
Renewals
35 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
FUNDING STRATEGY
Asset renewal requirements for the next 10 years have been determined by utilising the APV valuation data to assess when the sub-components of
each building are due for renewal. These calculations are based on the year of construction and the estimated useful lives of these components.
It is expected that future revisions of this plan will refine this data further once condition assessments of all buildings and their associated components
have been undertaken.
As can be seen in Figure 3, the Long Term Financial Plan (LTFP) figures closely align with the Annual Required Renewal Expenditure.
FIGURE 3: LONG TERM FINANCIAL PLAN FUNDING AND ANNUAL REQUIRED RENEWAL EXPENDITURE (ARRE)
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
ARRE
average ARRE
LTFP
36 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Maintenance Cost
Major Rehabilitation
Other Services Renewal
Full Fitouts & Fittings Rehab
Roof Renewal
Superstructure Rehab
INVESTMENT REQUIRED BY RENEWAL TYPE
37 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
PLAN IMPROVEMENT & MONITORING
MONITORING AND REVIEW PROCEDURES
This infrastructure and asset management plan will be reviewed during annual budget preparation and amended to recognise any changes in service
levels and/or resources available to provide those services as a result of the budget decision process.
The Plan has a life of 4 years and is due for revision and updating within 2 years of each Council election.
IMPROVEMENT PLAN
The asset management improvement plan generated from this infrastructure and asset management plan is shown below.
TABLE 7: IMPROVEMENT PLAN
Item #
Task Importance Urgency Risk
Responsibility Resources Required
Start Date End Date
1.
Develop and Implement building
level 2 condition assessment
methodology and process
High High High Open Space, Recreation and
Property Operating Budget Dec 2016 Mar 2018
2.
Establish renewal forecasts based
on condition audits.
High High High Open Space, Recreation and
Property Operating Budget Dec 2016 July 2019
3.
Review update and improve
building asset data breadth &
depth
Moderate Medium Medium
Open Space,
Recreation and
Property
Internal Resources Aug 2017 July 2019
38 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
GLOSSARY Annual Required
Renewal Expenditure
(ARRE)
The amount needed to be spent in a given year to maintain assets to their agreed level of service.
Annual service cost
(ASC)
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 operating, maintenance, depreciation, finance/ opportunity and
disposal costs, less revenue.
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 group Grouping of assets of a similar nature and use in an entity's operations (AASB 166.37)
Asset management 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.
Assets Future economic benefits controlled by the entity as a result of past transactions or other past events (AAS27.12).
Property, plant and equipment including infrastructure and other assets (such as furniture and fittings) with benefits expected to
last more than 12 month.
Average annual asset
consumption (AAAC)
The amount of a local government’s asset base consumed during a year. This may be calculated by dividing the Depreciable
Amount (DA) by the Useful Life and totalled for each and every asset OR by dividing the Fair Value (Depreciated Replacement
Cost) by the Remaining Life and totalled for each and every asset in an asset category or class.
Capital expansion
expenditure
Expenditure that extends an existing asset, at the same standard as is currently enjoyed by residents, to a new group of users.
It is discretional expenditure, which increases future operating, and maintenance costs, because it increases council’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.
39 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
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 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
Refer capital expenditure
Capital new expenditure Expenditure which creates a new asset that is additional to Council’s previous asset complement.
Capital renewal
expenditure
Expenditure on an existing asset where a previously existing asset is replaced - giving a new asset with a new useful life -
without enhancement of the service capability except where this is incidental and unavoidable.
Capital upgrade
expenditure
Expenditure, in where an upgraded asset replaces a previously existing asset with enhanced capability or functionality, where
an option existed for replacement without the enhanced capability or functionality. The replacement of a 300mm stormwater
pipe with a 500mm stormwater pipe results in an upgraded asset. The replacement of a model 135J grader with a model 135K
grader where the model 135J grader is no longer available, would not result in an upgraded asset, despite any improvement in
operational capability.
Component An individual part of an asset which contributes to the composition of the whole and can be separated from or attached to an
asset or a system.
Componentisation The practice of considering the components of a fixed asset individually, to account for the fact that these components have
unique physical and economic lives.
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, plus any costs necessary to place the asset into service. This includes one-off design and project
management costs.
40 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
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.
Current replacement cost
‘as new’ (CRC)
The current cost of replacing the original service potential of an existing asset, with a similar modern equivalent asset, i.e. the
total cost of replacing an existing asset with an as NEW or similar asset expressed in current dollar values.
Cyclic maintenance Replacement of higher value components/sub-components of assets that is undertaken on a regular cycle including servicing
and replacement of air conditioning equipment components etc. This work generally falls below the capital/ maintenance
threshold and needs to be identified in a specific maintenance budget allocation.
Depreciable amount The cost of an asset, or other amount substituted for its cost, less its residual value (AASB 116.6)
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 Refer useful life
Expenditure The spending of money on goods and services. Expenditure includes recurrent and capital.
Fair value The amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties, in an arms-
length transaction.
Group of assets Refer asset group
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.
41 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
Infrastructure assets Physical assets of the entity or of another entity that contribute to meeting the public's 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 market value.
Level of service The defined service quality for a particular service against which service performance may be measured. Service levels usually
relate to quality, quantity, reliability, responsiveness, environmental, acceptability and cost).
Maintenance and renewal
gap
Difference between estimated budgets and projected expenditures for maintenance and renewal of assets, totalled over a
defined time (eg 5, 10 and 15 years).
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.
Modern equivalent asset A structure similar to an existing structure and having the equivalent productive capacity, which could be built using modern
materials, techniques and design. Replacement cost is the basis used to estimate the cost of constructing a modern equivalent
asset.
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 Council, eg. parks and playgrounds, footpaths, roads and bridges, libraries, etc.
Operating expenditure Recurrent expenditure, which is continuously required excluding maintenance and depreciation, eg power, fuel, staff, plant
equipment, on-costs and overheads.
Pavement management
system
A systematic process for measuring and predicting the condition of road pavements and wearing surfaces over time and
recommending corrective actions.
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.
42 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
PMS score A measure of condition of a road segment determined from a Pavement Management System.
Rate of annual asset
consumption
A measure of average annual consumption of assets (AAAC) expressed as a percentage of the depreciable amount
(AAAC/DA). Depreciation may be used for AAAC.
Rate of annual asset
renewal
A measure of the rate at which assets are being renewed per annum expressed as a percentage of depreciable amount (capital
renewal expenditure/DA).
Rate of annual asset
upgrade
A measure of the rate at which assets are being upgraded and expanded per annum expressed as a percentage of depreciable
amount (capital upgrade/expansion expenditure/DA).
Reactive maintenance Unplanned repair work that carried out in response to service requests and management/supervisory directions.
Recoverable amount The higher of an asset's fair value less costs to sell and its value in use.
Remaining life The time remaining until an asset ceases to provide the required service level or economic usefulness. Age plus remaining life
is economic life.
Renewal Refer capital renewal expenditure
Residual value The net amount which an entity expects to obtain for an asset at the end of its useful life after deducting the expected costs of
disposal.
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 capacity to provide goods and services in accordance with the entity's objectives, whether those objectives are the
generation of net cash inflows or the provision of goods and services of a particular volume and quantity to the beneficiaries
43 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
thereof.
Service potential
remaining
A measure of the remaining life of assets expressed as a percentage of economic life. 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 (DRC/DA).
Strategic management
plan (SA)
Documents Council objectives for a specified period (3-5 yrs), the principle activities to achieve the objectives, the means by
which that will be carried out, estimated income and expenditure, measures to assess performance and how rating policy
relates to the Council’s objectives and activities.
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 council. It
is the same as the economic life.
Value in use The present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at
the end of its useful life. 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 new cash flows, where if deprived of the asset its future
economic benefits would be replaced.
Source: DVC 2006, Glossary
44 | BUILDING ASSET MANAGEMENT PLAN City of Burnside
BIBLIOGRAPHY
APV Valuers and Asset Management, 2015. Valuation of City of Burnside Building Assets.
Assetic, 2016. Property Strategy - City of Burnside.
City of Burnside, 2012. Be the Future of Burnside - Our Strategic Community Plan 2012-2025. Adelaide: City of Burnside.
Institute of Public Works Engineering Australia, 2015. International Infrastructure Management Manual. Wellington: National Asset Management
Steering Group.
International Organization for Standardization, 2009. ISO 31000:2009 Risk Management – Principles and Guidelines.
Liquid Pacific, 2015. Burnside City Council 2014 Fair Valuation.
New Focus, 2015. Annual Community Survey 2015 - City of Burnside.