Transport Asset Management Plan

Transport Asset Management Plan 2018-2038

Adopted June 2018

Inner West Council Transport Asset Management Plan 2018

Document Control Asset Management Plan – Transport assets

Document ID : Iwc Draft Transport Asset Management Plan 2018 June 6 Ver 2 - Tg

Rev No Date Revision Details Author Reviewer Approver

V1 30 May 2018 Draft Version 1 RJ/TG

V2 6 June 2018 Draft Version 2 RJ/TG

NAMS.PLUS Asset Management Plan Templates

NAMS.Plus offers two Asset Management Plan templates – ‘Concise’ and ‘Comprehensive’.

The Concise template is appropriate for those entities who wish to present their data and information clearly and in as few words as possible whilst complying with the ISO 55000 Standards approach and guidance contained in the International Infrastructure Management Manual.

The Comprehensive template is appropriate for those entities who wish to present their asset management plan and information in a more detailed manner.

The concise Asset Management Plan is used as a supporting document to inform the overarching Strategic Asset Management Plan.

This Asset Management Plan is based on the Concise Asset Management Plan template.

© Copyright 2017 – All rights reserved. The Institute of Public Works Engineering Australasia.www.ipwea.org/namsplus

http://www.ipwea.org/namsplus


TABLE OF CONTENTS

1 EXECUTIVE SUMMARY .................................................................................................................... 1 1.1 The Purpose of the Plan ............................................................................................................ 1 1.2 Asset Description ...................................................................................................................... 1 1.3 Levels of Service ....................................................................................................................... 1 1.4 Future Demand ........................................................................................................................ 1 1.5 Lifecycle Management Plan ...................................................................................................... 1 1.6 Financial Summary ................................................................................................................... 2 1.7 Asset Management Practices .................................................................................................... 2 1.8 Monitoring and Improvement Program..................................................................................... 3

2. INTRODUCTION .............................................................................................................................. 2 2.1 Background ............................................................................................................................ 2 2.2 Goals and Objectives of Asset Ownership ............................................................................... 2 2.3 Core and Advanced Asset Management .................................................................................. 3

3. LEVELS OF SERVICE ......................................................................................................................... 4 3.1 Customer Research and Expectations ..................................................................................... 4 3.2 Strategic and Corporate Goals ................................................................................................ 5 3.3 Legislative Requirements ........................................................................................................ 5 3.4 Customer Levels of Service ..................................................................................................... 8 3.5 Technical Levels of Service ...................................................................................................... 8

4. FUTURE DEMAND......................................................................................................................... 11 4.1 Demand Drivers ................................................................................................................... 11 4.2 Demand Forecasts ................................................................................................................ 12 4.3 Demand Impact on Assets .................................................................................................... 12 4.4 Demand Management Plan .................................................................................................. 13 4.5 Asset Programs to meet Demand ......................................................................................... 13

5. LIFECYCLE MANAGEMENT PLAN ................................................................................................... 15 5.1 Background Data .................................................................................................................. 15 5.2 Operations and Maintenance Plan ........................................................................................ 20 5.3 Renewal/Replacement Plan .................................................................................................. 21 5.4 Creation/Acquisition/Upgrade Plan ...................................................................................... 23 5.5 Disposal Plan ........................................................................................................................ 25

6. RISK MANAGEMENT PLAN ............................................................................................................ 26 6.1 Critical Assets ....................................................................................................................... 26 6.2 Risk Assessment ................................................................................................................... 26 6.3 Infrastructure Resilience Approach ....................................................................................... 27

7. FINANCIAL SUMMARY .................................................................................................................. 28 7.1 Financial Statements and Projections ................................................................................... 28 7.2 Funding Strategy .................................................................................................................. 32 7.3 Valuation Forecasts .............................................................................................................. 32 7.4 Key Assumptions Made in Financial Forecasts ....................................................................... 33 7.5 Forecast Reliability and Confidence ...................................................................................... 34

8. PLAN IMPROVEMENT AND MONITORING ..................................................................................... 35 8.1 Status of Asset Management Practices ................................................................................. 35 8.2 Improvement Plan ................................................................................................................ 35 8.3 Monitoring and Review Procedures ...................................................................................... 37 8.4 Performance Measures ........................................................................................................ 37

9. REFERENCES ................................................................................................................................. 38 10. APPENDICES ................................................................................................................................. 38

Appendix A: Forward Capital Works Program – 4 years ................................................................. 39 Appendix B: Budgeted Expenditures Accommodated in LTFP ........................................................ 40


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1 EXECUTIVE SUMMARY

1.1 The Purpose of the Plan Asset management planning is a comprehensive process to ensure delivery of services from infrastructure is provided in a financially sustainable manner.

This asset management plan details information about infrastructure assets including actions required to provide an agreed level of service in the most cost effective manner while outlining associated risks. The plan defines the services to be provided, how the services are provided and what funds are required to provide the services over a 20-year planning period.

The analysis considers the condition and remaining life of the assets to estimate the year when renewal is due in order to project renewal expenditure that will be required at the end of their useful life.

This plan covers the transport infrastructure assets that provide roads and road related services.

1.2 Asset Description These assets include:

The Transport network comprises:

Road Pavement

Kerb and Gutter

Footpaths

Bridges

Other Structures

Cycleways and other Road Assets

Carparks

Bulk Earthworks These infrastructure assets have a significant replacement value estimated at $1,097,600,000.

1.3 Levels of Service Our present funding levels are sufficient to continue to provide existing services at current levels for the duration of the Long Term Financial Plan (LTFP).

The main services consequences are:

The need to align levels of services to community requirements

The overall condition of the network is being held stable with minor improvements

1.4 Future Demand The main demands for new services are created by:

High car ownership

Traffic congestion

Parking demand

Cycleways

Town Centre Improvements

Road Safety Population density

These 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.

The main demand management practices are:

Static road network extent;

Encouraging alternate travel modes;

Parking restrictions.

1.5 Lifecycle Management Plan

What does it Cost?

The Long Term Financial Plan does consider a funding scenario over a 10 year period to address the infrastructure renewal backlog, being the value of assets rated as poor (condition 4) and very poor condition (condition 5). As the assets predominantly have long useful lives, the analysis applied in this Plan refines the relatively coarse condition rating by considering renewal to occur in the year at the end of the assets useful life.

It is important to note that asset management projections are carried out in present value or today’s dollars with no indexing for future inflation, material or labour increases. Council’s Long Term Financial Plan uses future values which include assumed increases in the cost of services.

The analysis prepared for this Plan considers the following provisions of funding:

Scenario 1: Long Term Financial Plan: Business as Usual Applying existing asset data and the planned funding provided in Council’s Long Term Financial Plan.

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In this scenario the projected renewal expenditure is aligned to Special Schedule 7 in the 2016/17 Inner West Council Annual Report which identifies condition 4 and 5 assets as an infrastructure backlog and are partially addressed as a part of this scenario.

Scenario 2: Infrastructure Renewal Backlog Scenario 2 in Council’s Long Term Financial Plan aims to address Council’s infrastructure renewal shortfall (aligned with Special Schedule 7) within the life of the LTFP. This scenario is not modelled in this iteration of this Asset Management plan. Unconstrained Funding This iteration of funding modelling presumes that all asset expenditure shortfalls (operational, maintenance, Renewal, upgrade and new) will be funded. This is not modelled in the current iteration of Council’s Long Term Financial Plan. The projected outlays necessary to provide the services covered by this Asset Management Plan (AM Plan) includes operations, maintenance, renewal and upgrade of existing assets over the 10-year planning period is $697,596,000, or $69,759,600 on average per year.

1.6 Financial Summary

What we will do Estimated available funding for this period is $700,823,000 or $70,082,300 on average per year as per the long term financial plan or budget forecast. This is 100.5% of the cost to sustain the current level of service at the lowest lifecycle cost.

The infrastructure reality is that only what is funded in the long term financial plan can be provided. The emphasis of the Asset Management Plan is to communicate the consequences that this will have on the service provided and risks, so that decision making is “informed”.

The allocated funding leaves no shortfall on average per year in the projected expenditure required to provide services in the AM Plan compared with planned expenditure currently included in the Long Term Financial Plan. The result of this allows Council’s backlog to be reduced over the duration of the LTFP. The projected expenditure is shown in the figure below.

Figure Values are in current (real) dollars. Refer to Section 5.4 for a more detailed figure.

We plan to provide Transport services for the following:

Operation, maintenance, renewal and upgrade of roads, footpaths, kerb and gutter, other structures and road related assets to meet service levels set by in annual budgets, for the 10-year planning period.

What we cannot do We currently allocate enough funding to maintain existing services at the current standard including an amount to provide for some new services being sought. Works and services that cannot be provided under present funding levels are those beyond the scope of the current budget.

Managing the Risks

Our present funding levels are adequate to continue to manage risks in the medium term.

The main risk consequences are:

Reductions in the serviceability of assets

Severance of service Rising costs of managing infrastructure

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

Manage the existing infrastructure with priority to items which could result in increased risks

Continue to provide optimal asset renewal treatments

Ensure the adequacy of maintenance treatments

1.7 Asset Management Practices Our systems to manage assets include:

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Technology One Finance

Technology One - Strategic Asset Management

MapInfo Geographic Information System

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

• Method 1 uses Asset Register data to project the renewal costs using acquisition year and useful life to determine the renewal year, 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 2 was used for this asset management plan.

1.8 Monitoring and Improvement Program The next steps resulting from this asset management plan to improve asset management practices are:

Condition data improvements;

Analytical capability to monitor and predict performance;

A methodology for, and predictions of asset life based on condition and asset consumption rates.

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2. INTRODUCTION

2.1 Background This asset management plan communicates the actions required for the responsive management of assets (and services provided from assets), compliance with regulatory requirements, and funding needed to provide the required levels of service over a 20-year planning period.

The asset management plan is to be read with the Inner West Council planning documents. This should include the Asset Management Policy and Asset Management Strategy, along with the following key planning documents:

Inner West Council Community Strategic Plan “Our Inner West 2036”

Delivery Program – 4 years

Operational Plan – 1 year

Workforce Management Plan

Long Term Financial Plan – 10 years

The infrastructure assets covered by this asset management plan are shown in Table 2.1. These assets are used to support a broad range of services to the community that provides for transport, trade, delivery of utility services and communications services.

Table 2.1: Assets covered by this Plan

Asset Category Quantity Current Replacement Value

Road Pavements 40.8 km Regional Roads 346 km Local roads 77.4 km Lanes 464.2 km Total

$290,001,000

Kerb and Gutter 907 km of kerb and gutter $98,605,000

Footpaths 845 km $108,633,000

Bridges 8 Road bridges 11 Pedestrian bridges

$14,830,000

Other Structures Retaining structures, safety barriers, fences, rock faces

$20,266,000


Cycleways and Traffic Facilities $42,159,000

Car Parks 23 surface car parks $10,761,000

Bulk Earthworks Road Formation $512,345,000

TOTAL: $1,097,600,000

2.2 Goals and Objectives of Asset Ownership Our goal in managing infrastructure assets is to meet the defined level of service (as amended from time to time) in the most cost effective manner for present and future consumers. The key elements of infrastructure asset management are:

Providing a defined level of service and monitoring performance,

Managing the impact of growth through demand management and infrastructure investment,

Taking a lifecycle approach to developing cost-effective management strategies for the long-term that meet the defined level of service,

Identifying, assessing and appropriately controlling risks, and

Linking to a long-term financial plan which identifies required, affordable expenditure and how it will be allocated.

Other references to the benefits, fundamentals principles and objectives of asset management are:

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• International Infrastructure Management Manual 2015 1

• ISO 550002

2.3 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. Core asset management is a ‘top down’ approach where analysis is applied at the system or network level. An ‘advanced’ asset management approach uses a ‘bottom up’ approach for gathering detailed asset information for individual assets. This Plan uses a bottom up approach blended with a top down approach where the asset data is inadequate for detailed analysis.

1 Based on IPWEA 2015 IIMM, Sec 2.1.3, p 2| 13

2 ISO 55000 Overview, principles and terminology 3 IPWEA, 2015, IIMM.

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3. LEVELS OF SERVICE

3.1 Customer Research and Expectations This ‘core’ asset management plan is prepared to inform Council about the infrastructure assets covered by this plan. Future revisions of the asset management plan will incorporate community consultation on service levels and costs of providing the service. This will assist the Senior Management, Councillors and stakeholders in matching the level of service required, service risks and consequences with the community’s ability and willingness to pay for the service.

Following the amalgamation of three Councils to form Inner West Council, the levels of service provided by infrastructure assets is yet to be aligned. We have prior and current research on customer expectations which reflect the former provision of services. This subject will be investigated in more detail for future updates of the asset management plan.

Community Satisfaction Survey – Background Inner West Council sought to examine community attitudes and perceptions towards current and future services and facilities provided by Council. Key objectives of the research included:

Assessing and establishing the community’s priorities and satisfaction in relation to council activities, services, and facilities

Identifying the community’s overall level of satisfaction with Council’s performance

Identifying the community’s level of agreement with prompted statements surrounding wellbeing/connectedness

Identifying methods of communication and engagement with Council

Identifying priority areas for Council to focus on

The sample consisted of a total of 1,002 residents. 850 of 1,002 respondents were selected by means of a computer based random selection process using the electronic White Pages. The remaining 152 respondents were recruited via face-to-face intercept at a number of areas around the Inner West Council local government area, i.e. Addison Road Markets, Ashfield railway station, Marrickville railway station, and Woolworths Balmain.

The survey was conducted during the period 26th July – 12th August 2017.

The full survey is published and available on the Council’s website: www.innerwest.nsw.gov.au. The survey results for the infrastructure Service Area are summarised in Table 3.1.

Table 3.1: Community Satisfaction Survey Levels - Infrastructure

Performance Measured

Response for Importance

Satisfaction Level

Very Important

Important Somewhat Important

Not Very Important

Not at all Important

Management of Parking 50% 22% 14% 8% 6%

Cycleways 32% 19% 18% 12% 18%

Maintaining Footpaths 60% 27% 9% 2% 1%

Maintaining Local Roads 63% 25% 10% 2% 1%

Traffic Management and Road Safety 68% 21% 8% 1% 2%

Response for Satisfaction

Very Satisfied

Satisfied Somewhat Satisfied

Not Very Satisfied

Not at all Satisfied

Management of Parking 6% 19% 35% 23% 17%

Cycleways 10% 27% 29% 22% 12%

Maintaining Footpaths 9% 26% 38% 18% 9%

Maintaining Local Roads 9% 30% 38% 16% 8%

Traffic Management and Road Safety 12% 31% 31% 14% 12%

http://www.innerwest.nsw.gov.au/

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Community satisfaction information is used in developing the Strategic Plan and in the allocation of resources in the budget.

3.2 Strategic and Corporate Goals This asset management plan is prepared under the direction of the Inner West Council vision, mission, goals and objectives.

Vision Statement We are the Inner West, land of the Gadigal and Wangal peoples, whose rich cultures, heritage and history we acknowledge and respect. We are defined by our diversity of people, places and ideas. We are an inclusive, vibrant,caring and progressive community where everyone is welcome, people and nature live in harmony and creativity is a way of life.

Relevant strategic directions and outcomes relating to the delivery of services from infrastructure are shown in Table 3.2.

Table 3.2: Strategic Directions and Outcomes for Infrastructure Services

Strategic Direction Outcomes

1. An ecologically sustainable Inner

West

1.1 The people and infrastructure of Inner West contribute

positively to the environment and tackling climate change

1.3 The community is a water sensitive, with clean, swimmable

waterways

1.4 Inner West is a zero emissions community that generates and

owns clean energy

2. Unique, liveable and networked

neighbourhoods

2.1 Development is designed for sustainability and makes life better

2.2 The unique character and heritage of neighbourhoods is

retained and enhanced

2.3 Public spaces are high-quality, welcoming and enjoyable places,

seamlessly connected with their surroundings

3. Creative communities and a strong

economy

3.5 Urban hubs and main streets are distinct and enjoyable places

to shop, eat, socialise and be entertained

4. Caring, happy, healthy communities 4.4 People have access to the services and facilities they need at all

stages of life

5. Progressive local leadership 5.1 People are well informed and actively engaged in local decision

making and problem-solving

Council’s Asset Management Policy defines the council’s vision and service delivery objectives for asset management in accordance with legislative requirements, community needs and affordability.

Inner West Council will exercise its duty of care to manage public safety in accordance with the infrastructure risk management plan prepared in conjunction with this AM Plan. Management of infrastructure risks is covered in Section 6.

3.3 Legislative Requirements There are many legislative requirements relating to the management of assets. These include:

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Table 3.3: Legislative Requirements

Legislation Requirement

Local Government Act 1993 Sets out role, purpose, responsibilities and powers of local governments. The purposes of this Act are as follows: (a) to provide the legal framework for an effective, efficient, environmentally responsible and open system of local government in New South Wales, (b) to regulate the relationships between the people and bodies comprising the system of local government in New South Wales, (c) to encourage and assist the effective participation of local communities in the affairs of local government, (d) to give councils: • the ability to provide goods, services and facilities, and to carry out activities, appropriate to the current and future needs of local communities and of the wider public • the responsibility for administering some regulatory systems under this Act • a role in the management, improvement and development of the resources of their areas, (e) to require councils, councillors and council employees to have regard to the principles of ecologically sustainable development in carrying out their responsibilities. The land management provisions of the Act require that Council prepare plans of management for all community land. The plan of management identifies the management objectives for the land category, performance indicators and performance measures to meet the objectives identified.

Local Government Amendment (Planning and Reporting) Act 2009

Local Government Amendment (Planning and Reporting) Act 2009 includes the preparation of a long term financial plan supported by asset management plans for sustainable service delivery.

Local Government Act - Annual Reporting Section 428(2)(d)

A report of the condition of the public works (including public buildings, public road and water sewerage and drainage works) under the control of council as at the end of that year; together with • An estimate (at current values) of the amount of money required to bring the works up to a satisfactory standard; and • An estimate (at current values) of the annual expense of maintain the works at that standard; and The Council’s programme for maintenance for that year in respect of the works.

Disability Discriminations Act, 1992 The Federal Disability Discrimination Act 1992 (D.D.A.) provides protection for everyone in Australia against discrimination based on disability. It encourages everyone to be involved in implementing the Act and to share in the overall benefits to the community and the economy that flow from participation by the widest range of people. (a) to eliminate, as far as possible, discrimination against persons on the ground of disability in the areas of: (i) work, accommodation, education, access to premises, clubs and sport; and (ii) the provision of goods, facilities, services and land; and (iii) existing laws; and (iv) the administration of Commonwealth laws and programs; and (b) to ensure, as far as practicable, that persons with disabilities have the same rights to equality before the law as the rest of the community; and to promote recognition and acceptance within the community of the principle

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that persons with disabilities have the same fundamental rights as the rest of the community.

Work Health & Safety Act 2011 Sets out roles and responsibilities to secure the health, safety and welfare of persons at work and covering injury management, emphasising rehabilitation of workers particularly for return to work. Council is to provide a safe working environment and supply equipment to ensure safety.

Environmental Planning and Assessment Act 1979

An Act to institute a system of environmental planning and assessment for the State of New South Wales. Among other requirements the Act outlines the requirement for the preparation of Local Environmental Plans (LEP), Development Control Plans (DCP), Environmental Impact Assessments (EIA) and Environmental Impact Statements.

Plant Protection Act 1989 This act sets out requirements in respect to Flora Protection

Environmental Protection Act 1994 This act sets out requirements in respect to environmental protection

Threatened Species Conservation Act, 1995

An Act to conserve threatened species, populations and ecological communities of animals and plants. Under the terms of this Act Council is required to ensure the long term survival of the species identified.

Protection of the Environment Operations Act 1997

Council is required to exercise due diligence to avoid environmental impact and among others are required to develop operations emergency plans and due diligence plans to ensure that procedures are in place to prevent or minimise pollution.

National Parks and Wildlife Act (1974)

An Act relating to the establishment, preservation and management of national parks, historic sites and certain other areas and the protection of certain fauna, native plants and Aboriginal objects

Public Works Act 1912 Sets out the role of Council in the planning and construction of new assets.

Road Transport (General) Act 2005 Provides for the administration and enforcement of road transport legislation. It provides for the review of decisions made under road transport legislation. It makes provision for the use of vehicles on roads and road related areas and also with respect to written off and wrecked vehicles.

Road Transport (Safety and Traffic Management) Act 1999

Facilitates the adoption of nationally consistent road rules in NSW, the Australian Road Rules. It also makes provision for safety and traffic management on roads and road related areas including alcohol and other drug use, speeding and other dangerous driving, traffic control devices and vehicle safety accidents.

Roads Act 1993 Sets out rights of members of the public to pass along public roads, establishes procedures for opening and closing a public road, and provides for the classification of roads. It also provides for declaration of the RTA and other public authorities as roads authorities for both classified and unclassified roads, and confers certain functions (in particular, the function of carrying out roadwork) on the RTA and other roads authorities. Finally it provides for distribution of functions conferred by this Act between the RTA and other roads authorities, and regulates the carrying out of various activities on public roads.

Local Government (Highways) Act 1982

An Act to consolidate with amendments certain enactments concerning the functions of the corporations of municipalities with respect to highways and certain other ways and places open to the public.

Valuation of Land Act 1916 This act sets out requirements in respect Land Valuation

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Crown Lands Act, 1989 An Act to provide for the administration and management of Crown land in the Eastern and Central Division of the State of NSW. Council has large holdings of Crown land under it care, control and management.

Heritage Act, 1977 An Act to conserve the environmental heritage of the State. Several properties are listed under the terms of the Act and attract a high level of maintenance cost, approval and monitoring.

Fire and Rescue Service Act 1990 This act sets out requirements in respect to Emergency Services for Fire and Rescue

Public Records Act 2002 This act sets out requirements in respect maintaining Public Records

Surveillance Devices Act This act sets out requirements in respect use of Surveillance Devices

Civil Liability Act, 2002 An Act to make provision in relation to the recovery of damages for death or personal injury caused by the fault of a person

Rural Fires Act, 1997 An Act to establish the NSW Rural Fire Service and define its functions; to make provision for the prevention, mitigation and suppression of rural fires. Under the terms of this Act Council is required to mitigate any fire that emanate from bushland.

3.4 Customer Levels of Service Service levels are defined service levels in two terms, customer levels of service and technical levels of service. These are supplemented by organisational measures.

Customer Levels of Service measure how the customer receives the service and whether value to the customer is provided.

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

Quality How good is the service … what is the condition or quality of the service?

Function Is it suitable for its intended purpose …. Is it the right service?

Capacity/Use Is the service over or under used … do we need more or less of these assets?

The current and expected customer service levels vary between the former council areas and are to be aligned through a process to redefine the levels of service and applied in the development of a works programs.

Organisational measures are measures of fact related to the service delivery outcome e.g. number of occasions when service is not available, condition %’s of Very Poor, Poor/Average/Good, Very good.

These Organisational measures provide a balance in comparison to the customer perception that may be more subjective. The charts in Section 5 indicate the current asset condition percentages referred to above.

3.5 Technical Levels of Service Technical Levels of Service - Supporting the customer service levels are operational or technical measures of performance. These technical measures relate to the allocation of resources to service activities to best achieve the desired customer outcomes and demonstrate effective performance.

Technical service measures are linked to the activities and annual budgets covering:

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Operations – the regular activities to provide services (e.g. opening hours, cleansing, mowing grass, energy, inspections, etc.

Maintenance – the activities necessary to retain an asset as near as practicable to an appropriate service condition. Maintenance activities enable an asset to provide service for its planned life (e.g. 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 (e.g. road resurfacing and pavement reconstruction, pipeline replacement and building component replacement),

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

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

Table 3.4 shows the technical levels of service expected to be provided under this AM Plan. The ‘Desired’ position in the table documents the position being recommended in this AM Plan.

Table 3.4: Technical Levels of Service

Service Attribute

Service Activity Objective

Activity Measure Process

Current Performance * Desired for Optimum Lifecycle Cost **

TECHNICAL LEVELS OF SERVICE

Operations

In Service as & when required

Continuity of service availability

Service Available Continue to provide Service Available

Budget $31,789,000 $31,393,000

Maintenance

Safe for users Extent of short term exclusions of service for repairs

Routine and reactive activities to assure service continuity

Timely maintenance of identified activities. Planned maintenance actives completed to schedule.

Budget $19,850,000 $19,355,000

Renewal

Renewal at or approaching very poor condition

Renewal Programs Long Term Planned Program matching demand

Timely renewal of high risk and poor condition assets

Budget $12,422,000 $12,143,000

Upgrade/New

Creation as new or Upgrading to contemporary requirements

Timely response to new requirement

Programmed annually in response to demand

Develop programs to meet future demands

Budget $6,837,000 $7,189,000

Note: * Current activities and costs (currently funded 2018/19). ** Desired activities and costs to sustain current service levels and achieve minimum life cycle costs (10 year average funding 2018/28).

4 IPWEA, 2015, IIMM, p 2|28.

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It is important to monitor the service levels provided regularly as these will change. The current performance is influenced by work efficiencies, innovations, and emergent technology, and customer priorities will change over time. A process of review and the establishment of an agreed position which achieves the best balance between service, risk and cost is essential.

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4. FUTURE DEMAND

4.1 Demand Drivers 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, agricultural practices, environmental awareness, etc.

Figure 1: Inner West Population Age Distributions

Source: Australian Bureau of Statistics – 2016

As only those aged less than 18 years in the 2036 population are yet to be born, the pattern of the majority of the population is already existent. The parents of these future residents are already in the population, and barring catastrophic population loss events, the pattern of population growth could be expected to follow current trends. Figure 1 shows the medium population forcast for the purposes of this Plan.

Table 4.1: Inner West Vehicle Ownership – 2016

Vehicle Ownership

Number of Motor vehicles at a Dwelling Number of Households

% of Households

None 11,931 17.3%

1 motor vehicle 33,604 48.9%

2 motor vehicles 16,655 24.2%

3 or more motor vehicles 4,282 6.2% Not stated 2,332 3.4%

TOTAL: 68,804 100.0%

Source: Australian Bureau of Statistics – 2016

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Figure 2: Vehicle Ownership - 2016, Comparing Inner West to Greater Sydney

Source: Australian Bureau of Statistics - 2016

4.2 Demand Forecasts The present position and projections for demand drivers that may impact future service delivery and use of assets were identified and are documented in Table 4.2.

4.3 Demand Impact on Assets The impact of demand drivers that may affect future service delivery and use of assets are shown in Table 4.2.

Table 4.2: Demand Drivers, Projections and Impact on Services

Demand drivers Present position Projection Impact on services

Population Growth Increasing population in recent years

Minor population increase forecast

Minor increase in demand for services provided utilising transport network

Rising proportion of elderly residents

Growing cohort of mobile seniors

Larger mobile population Mobility and safety related requirements for assets

Adoption of new transportation technologies

Safety and efficiency improved

Autonomous vehicles to enter fleet

Reduction in ownership, reduced fleet, traffic efficiency gains

Alternate forms of transport

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Increasing Car Ownership

Multiple cars per dwelling

Increase in fleet of share vehicles

Trend of more vehicles per census district is continuing, but disruption is likely (refer New Technology).

Usage patterns impacted by peak travel time and destination user charges

Increased pressure on road capacity, street parking and the demand for additional traffic devices.

Increase in travel outside peaks.

Road Construction Costs

Current costs Costs anticipated to increase in near to medium term.

The shortage of skilled labour, high labour costs and increasing material costs, and availability of quality road making materials will impact on the future management of roads.

Climate Change / Energy Economics

Vehicle energy source: Petroleum fuels dominance may reduce due to increase in electric propulsion.

Electric vehicles growing market share. Autonomous and electric vehicles increasingly common

Reduced petroleum demand may cause the collapse of the fuel price - resulting in cheaper petroleum products including bitumen. Reduction in fleet size -journey specific use of vehicles.

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

Opportunities identified to date for demand management are shown in Table 4.3. Further opportunities will be developed in future revisions of this asset management plan.

Table 4.3: Demand Management Plan Summary

Demand Driver Impact on Services Demand Management Plan

Increase in local car population

Traffic congestion Road Safety

Traffic facilities program

Increase in local car population

Parking demand increases Parking Policies

Increase in cycling travel and cycling users

Increase in the number of cyclists

New and improved cycleway infrastructure

4.5 Asset Programs to meet Demand The new assets required to meet demand can be acquired, donated or constructed. Additional assets are discussed in Section 5.4. The summary of the cumulative value of additional asset is shown in Figure 3.

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Figure 3: Upgrade and New Assets to meet Demand – (Cumulative)

Figure Values are in current (real) dollars.

Creating or acquiring new assets will create demand for, and commit ongoing additional funding of operations, maintenance and renewal costs for the period that the service provided from the assets is required.

Acquiring these new assets will commit 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 for inclusion in the long term financial plan is further discussed in Section 5.

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5. LIFECYCLE MANAGEMENT PLAN The lifecycle management plan details how Council plans to manage and operate the assets at the agreed levels of service (defined in Section 3) while managing life cycle costs.

5.1 Background Data 5.1.1 Physical parameters

The assets covered by this asset management plan are shown in Table 5.1.

Table 5.1: Assets covered by this Plan

Asset Category Quantity Current Replacement Value

Road Pavements 40.8 km Regional Roads 346 km Local roads 77.4 km Lanes 464.2 km Total

$290,001,000

Kerb and Gutter 907 km of kerb and gutter $98,605,000

Footpaths 845 km $108,633,000

Bridges 8 Road bridges 11 Pedestrian bridges

$14,830,000

Other Structures Retaining structures, safety barriers, fences, rock faces

$20,266,000


Cycleways and Traffic Facilities $42,159,000

Car Parks 23 surface car parks $10,761,000

Bulk Earthworks Road Formation $512,345,000

TOTAL: $1,097,600,000

The roads network of the area was initially developed before motor vehicles and has further developed through the first half of last century. Changes have occurred to the major roads since the removal of the Sydney wide tram network, but changes to the local roads are limited to traffic management changes. So the network is a legacy of prior planning. The network is a mature asset, with a diversity of age and lifecycle status for assets, which has distributed renewal demand across the decades.

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The age profile of the assets included in this AM Plan are shown in Figure 4.

Figure 4: Asset Age Profile

Figure 4 Values are in current (real) dollars.

The assets are a mature network, at a full range of life cycle ages and condition between as new to very poor. The spikes in the graph are likely to represent assumed common creation dates for long lived assets. In reality the age is more distributed. However, due to the maturity of the assets, the use of age is not a reliable proxy for condition. Many assets are in second and subsequent life cycles, and condition is no longer a function of age since acquisition. Age is simply an indicator of the planning parameters and construction techniques applicable at its creation.

5.1.2 Asset capacity and performance

Assets are generally provided to meet design standards where these are available.

Locations where deficiencies in service performance due to the planning parameters applied to the physical attributes at the asset’s creation are common, as discussed in Section 5.1.1 above.

5.1.3 Asset condition

Condition is monitored on a cyclic program for each asset group, ensuring an inspection of each asset on an appropriate cycle to detect changes in performance.

The currency of condition data for road pavements was variable when the asset register was amalgamated, and a program of data collection has been commenced to update and extend the data coverage to at least 90-95% reliability within three years. The first data collection contract is in progress and will result in reliable data for half of the road pavement network. The refreshed condition data will permit the detailed analysis using the pavement management system to predict pavement maintenance and renewal requirements for the network.

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The condition profile of our assets is shown in Figure 5.

Figure 5: Transport Assets Current Condition Profile


Figure 5.1: Transport Assets Current Condition Profile

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Figure 5.2: Road Pavement Assets Current Condition Profile

Road pavements are distributed across the condition spectrum indicating a balanced population of condition readily managed by a continuing stable renewal program, which generates a clockwise cycle of life of pavement, which are renewed from very poor and poor to very good, and thereafter slowly deteriorate through good and fair to poor.

Figure 5.3: Footpath Assest Current Condition Profile

Footpaths are substantially at better than fair condition with one third at fair condition. A small proportion are in poor condition and thereby candidates for renewal in accordance with the level of service requirement. Point defects are also identified in footpaths, requiring renewal of the immediate defective vicinity of the pavement. Point defects are mostly treated in routine planned maitenance.

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Figure 5.4: Other Road Assets Current Condition Profile

Other road assets are recorded as good and very good condition.

Figure 5.5: Current condition of Other Structures Assets

Other structures have a well distributed condition profile, with a similar proportion of assets in very good, good and fair condition, and a smaller quantity in poor condition, which are candidates for renewal.

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Condition is measured using a 1 – 5 grading system5 as detailed in Table 5.2.

Table 5.2: 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

5.2 Operations and Maintenance Plan Operations include regular activities to provide services such as public health, safety and amenity, e.g. cleaning, street sweeping, utilities costs and street lighting.

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

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.

Maintenance expenditure is shown in Table 5.3.

Table 5.3. Maintenance Expenditure Trends

Year Maintenance Budget $

Current year 2017/18 $19,300,000

Next year 2018/19 $19,850,000

Average 2018/19 to 2027/28 -in current (real) dollars $19,355,000

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 they will result in a lesser level of service, the service consequences and service risks have been identified and is highlighted in this AM Plan and service risks considered in the Infrastructure Risk Management Plan.

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 6. Note that all costs are shown in current 2018 dollar values (i.e. real values).

5 IPWEA, 2015, IIMM, Sec 2.5.4, p 2|80.

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Figure 6: Projected Operations and Maintenance Expenditure

Figure 6 values are in current (real) dollars.

Operations expenditures are commonly stable when the quantity of assets are generally stable. There is little growth in new assets or asset upgrades, so a stable expenditure on operations is predicted. Maintenance costs are minimal for very good condition assets, and increase as the condition of assets deteriorate. As the network has a distributed condition range which is planned to remain a stable distribution of condition for the period of this Plan, no significant increase in maintenance is predicted.

The priority of maintenance expenditures is determined on the basis of risk. Deferred maintenance, that is works that are identified for maintenance and unable to be funded in the current program, are to be included in the risk assessment and analysis as described in the infrastructure risk management plan.

Maintenance is funded from the operating budget. This is further discussed in Section 7.

5.3 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 service potential. Work over and above restoring an asset to original service potential is considered to be an upgrade/expansion or new work expenditure resulting in additional future operations and maintenance costs.

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

• Method 1 uses Asset Register data to establish the renewal costs using acquisition year and useful life to determine the renewal year, or

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• Method 2 uses capital renewal expenditure projections from external condition modelling systems including the Pavement Management System operated by Council, 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’.

The majority of renewal is determined using Method 2 for this asset management plan. 5.3.1 Renewal ranking criteria

Asset renewal and replacement is typically undertaken to either:

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

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

6

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

Have a consequence of added damage for associated assets if renewal is deferred,

Have a high consequence of failure,

Have high use and subsequent impact on users would be greatest,

Have a total value representing the greatest net value,

Have the highest average age relative to their expected lives,

Are identified in the AM Plan as key cost factors,

Have high operational or maintenance costs, and Have replacement with a modern equivalent asset that would provide the equivalent service at a saving.7

The ranking criteria used to determine priority of identified renewal and replacement proposals is established by determining the relative additional cost of deferral, such that the least additional cost is incurred if projects are deferred.

5.3.2 Summary of future renewal and replacement expenditure

Projected future renewal and replacement expenditures are forecast to increase over time when the asset stock increases. The distribution indicated in the chart is clustered in a few distributed years. This distribution has arisen from the application of predicted life cycles to the condition rankings asset register. This produces clusters of renewal years, as the 5 classes of condition are not sufficiently discriminating for long life assets. Note that all amounts are shown in current (real) dollars.

The renewal demand is distributed across the period of this plan to deliver a steady rate of annual expenditure demand. Analysis using more detailed assessments of condition of assets recorded as approaching the time for renewal permits a finer graded rating of condition and failure risk. For example, the Pavement Management System ranks individual pavement segments in priority order.

The forward capital works program – 4 years is shown in Appendix A.

6 IPWEA, 2015, IIMM, Sec 3.4.4, p 3|91. 7 Based on IPWEA, 2015, IIMM, Sec 3.4.5, p 3|97.

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Figure 7: Projected Very Poor assets (condition 5 or end of useful life)


Deferred renewal and replacement, i.e. those assets identified for renewal and/or replacement and not scheduled in capital works programs are to be included in the risk analysis process in the risk management plan.

Renewals and replacement expenditure in the capital works program will be accommodated in the long term financial plan. This is further discussed in Section 7.

5.4 Creation/Acquisition/Upgrade Plan New works are those that create a new asset that did not previously exist, or works which will 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. The Asset Management Policy sets the criteria for assessing additions to the asset base. These additional assets are considered in Section 4.4.

5.4.1 Selection criteria

New assets and upgrade/expansion of existing assets are identified from various sources such as community requests, proposals identified by strategic plans or partnerships with others. Candidate proposals are inspected to verify need and to develop a preliminary cost estimate. Verified proposals are ranked by priority and available funds and scheduled in future works programmes. The Asset Management Policy sets out the following criteria:

AMP 6.2. Council will ensure the asset management of existing assets will not be compromised by the creation of new assets

AMP 6.4. Decisions on asset renewal, disposal, upgrade or new asset provision are carried out in accordance with asset management information that includes demonstrated need, life cycle costing, alternative modes of delivery, sustainability, equitable distribution of resources and social equity.

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The priority ranking for new assets, upgrades and expansions is determined on the criteria above.

5.4.2 Summary of future upgrade/new assets expenditure

Projected upgrade/new asset expenditures are summarised in Figure 8.

Figure 8: Projected Capital Upgrade/New Asset Expenditure

Figure 8 values are in current (real) dollars.

Expenditure on new assets and services in the capital works program will be accommodated in the long term financial plan but only to the extent of the available funds, and taking into account the Asset Management Policy criteria.

There is an impact of new assets on the forward programs. The acquisition of new assets will commit the Council to the funding of ongoing operations, maintenance and renewal costs for the life cycle period that the service provided from the assets is required. Hence, the burden of additional expenditures into the future is to be considered before the asset investment base is increased.

5.4.3 Summary of asset expenditure requirements

The financial projections from this asset plan are shown in Figure 9 for projected operating (operations and maintenance) and capital expenditure (renewal and upgrade/expansion/new assets). Note that all costs are shown in real values.

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The bars in the graphs represent the anticipated budget needs required to achieve lowest lifecycle costs, the budget line indicates what is currently available. The gap between these informs the discussion on achieving the balance between services, costs and risk to achieve the best value outcome.

Figure 9: Projected Operating and Capital Expenditure


The chart indicates that expenditure exceeds demand in most years, except where spikes in renewal occur. Redistribution of the renewal spikes across all 10 years of this Plan produces a stable funding scenario in which an average of $69,759,600 is required annually for 10 years. An average of $70,082,300 is funded under the Long Term Financial Plan, indicating that the proposed funding is adequate over the 10 year period of the Plan and assists in reducing Council’s infrastructure backlog.

The spikes of renewal projects will be distributed through the improvement of condition information proposed in the Asset Management Improvement Plan, and the application of more sophisticated needs analysis tools including the Pavement Management System and Strategic Assets Management System that is being implemented.

5.5 Disposal Plan Disposal includes any activity associated with the disposal of a decommissioned asset including sale, demolition or relocation. No assets are identified for possible decommissioning and disposal.

Apart from the remnant values of assets being renewed at the end of serviceable life, no specific assets are identified for disposal. As the physical road network is neither growing nor reducing, asset disposal is not predicted.

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6. RISK MANAGEMENT PLAN The purpose of infrastructure risk management is to document the results and recommendations resulting from the periodic identification, assessment and treatment of risks associated with providing services from infrastructure, using the fundamentals of International Standard ISO 31000:2009 Risk management – Principles and guidelines.

Risk Management is defined in ISO 31000:2009 as: ‘coordinated activities to direct and control with regard to risk’8.

An assessment of risks9 associated with service delivery from infrastructure assets has identified critical risks that will result in loss or reduction in service from infrastructure assets or a ‘financial shock’. The risk assessment process identifies credible risks, the likelihood of the risk event occurring, the consequences should the event occur, develops a risk rating, evaluates the risk and develops a risk treatment plan for non-acceptable risks.

6.1 Critical Assets Critical assets are defined as those which have a high consequence of failure causing significant loss or reduction of service. Similarly, critical failure modes are those which have the highest consequences.

Critical assets have been identified and their typical failure mode and the impact on service delivery are as follows:

Table 6.1 Critical Assets

Critical Asset(s) Failure Mode Impact

Bridges, retaining structures Deterioration of structural elements

Limitation or Severance of service

Road and Carpark pavements Surface deterioration and deformations, extensive potholes

Reduced serviceability

Footpath Pavements Planar discontinuities Trip hazards reduce the serviceability

Kerb and Gutter Surface wear, settlement deformations

Reduced serviceability, ponding

By identifying critical assets and failure modes investigative activities, condition inspection programs, maintenance and capital expenditure plans can be targeted at the critical areas.

6.2 Risk Assessment The risk management process used in this project is shown in Figure 10 below.

It is an analysis and problem solving technique designed to provide a logical process for the selection of treatment plans and management actions to protect the community against unacceptable risks.

The process is based on the fundamentals of the ISO risk assessment standard ISO 31000:2009.

8 ISO 31000:2009, p 2 9 Refer to the Corporate Risk Management Plan

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Figure 10 Risk Management Process – Abridged

TREAT RISKS

- Identify options

- Assess options

- Treatment plans

ANALYSE &

EVALUATE RISKS

- Consequences

- Likelihood

- Level of Risk

- Evaluate

IDENTIFY RISKS

- What can happen ?

- When and why ?

- How and why ?

The risk assessment process identifies credible risks, the likelihood of the risk event occurring, the consequences should the event occur, develops a risk rating, evaluates the risk and develops a risk treatment plan for non-acceptable risks.

An assessment of risks10 associated with service delivery from infrastructure assets has identified the critical risks that will result in significant loss, ‘financial shock‘ or a reduction in service.

Critical risks are those assessed with ‘Very High’ (requiring immediate corrective action) and ‘High’ (requiring corrective action) risk ratings identified in the Infrastructure Risk Management Plan. The residual risk and treatment cost after the selected treatment plan is implemented is shown in Table 6.2. These risks and costs are reported to management.

Table 6.2: Critical Risks and Treatment Plans

Service or Asset at Risk

What can Happen Risk Rating (VH, H,

M)

Risk Treatment Plan Residual Risk *

Bridges Structural deterioration

H Reduce loading and monitor structure Moderate

Road Pavements Surface deterioration and deformation

M Temporary repair, then structural repair or renewal

Low

Footpath Pavements

Surface discontinuities, trip hazards

M Temporary repair, then renewal Low

Note * The residual risk is the risk remaining after the selected risk treatment plan is operational.

6.3 Infrastructure Resilience Approach The resilience of our critical infrastructure is vital to our customers and the services we provide. To adapt to changing conditions and grow over time we need to understand our capacity to respond to possible disruptions and be positioned to absorb disturbance and act effectively in a crisis to ensure continuity of service.

Resilience is built on aspects such as response and recovery planning, financial capacity and crisis leadership.

10 Refer to the Corporate Risk Management Plan

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7. FINANCIAL SUMMARY This section contains the financial requirements resulting from all the information presented in the previous sections of this 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.

7.1 Financial Statements and Projections

7.1.1 Asset valuations

The best available estimate of the value of assets included in this Asset Management Plan are shown below. Assets are valued at fair value, as reported in the Financial Statements at 30 June 2017.

Figure 11: Asset Management Valuation Structure

Residual

Value

Depreciable

Amount

Useful Life

Gross

Replacement

Cost

End of

reporting

period 1

Annual

Depreciation

Expense

End of

reporting

period 2

Accumulated

Depreciation Depreciated

Replacement

Cost

Table 7.1: Value of Transport Assets

Asset Class Gross

Replacement Cost ($000)

Depreciable Amount ($000)

Depreciated Replacement Cost ($000)

Depreciation Expense ($000)

Roads $388,606 $388,606 $256,055 $7,816

Bridges $14,830 $14,830 $10,371 $155

Footpaths $108,633 $108,633 $75,260 $1,523

Other Structures $20,266 $20,266 $12,132 $1,699

Other Road Assets $42,159 $42,159 $33,837 $1,139

Bulk Earthworks $512,345 $0 $512,345 $0

Car Parks $10,761 $8,338 $8,684 $154

Total $1,097,600 $582,832 $908,684 $12,486

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7.1.2 Sustainability of service delivery

Two 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, and

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

Asset Renewal Funding Ratio

Asset Renewal Funding Ratio11

120%

The Asset Renewal Funding Ratio is the most important indicator and indicates that over the next 10 years of the forecasting that we expect to have 120% of the funds required for the optimal renewal and replacement of assets.

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 provides input into 10 year financial and funding plans aimed at providing 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 $62,569,700 on average per year.

Estimated (budget) operations, maintenance and capital renewal funding is $62,892,400 on average per year giving a 10 year funding surplus of $322,700 per year. This indicates 100.5% of the projected expenditures needed to provide the services documented in the asset management plan.

Providing services from infrastructure 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.

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

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Table 7.2: Summary Of Current Service Sustainability Ratios

Sustainability Ratios Values

Asset Renewal Funding Ratio

Net present value of renewal funding accommodated over a 10 year period in the LTFP $121,436,000

Net present value of projected capital renewal expenditure over a 10 year period $101,248,000

Asset renewal Funding Ratio 120%

Medium Term – 10 year sustainability ratio

10 year Operations, Maintenance & Renewal Planned (LTFP Budget Funding) Expenditure* $628,924,000

10 year Operations, Maintenance & Renewal Projected Expenditure* $625,697,000

10 year funding Surplus (10 year Planned (LTFP Budget Funding) Expenditure – 10 year Projected Expenditure

$3,227,000

10 year Sustainability indicator (10 year Planned Expenditure / Projected Expenditure) 100.5%

*excludes upgrade and new assets

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7.1.3 Projected and LTFP Budgeted Renewals and Financing Shortfall

Table 7.3 shows the projected and the long term financial budgeted renewals and financing shortfalls for the 10 year long term financial plan. The table shows that although there are renewal financing gaps in 2 specific years, over the 10 year period there is a surplus. In the first 4 years the surplus is allocated to renewal projects identified in the Forward Capital Works Program – 4 years. The surplus in the later years will be allocated to renewal projects as the program is developed.

Expenditure projections are in 2018 real values, not inflated annually.

Table 7.3: Projected and LTFP Budgeted Renewals and Financing Shortfall ($000)

Year End June 30

Projected Renewals

($000)

LTFP Renewal Budget

($000)

Renewal Financing Shortfall

(- gap, + surplus) ($000)

Cumulative Shortfall (- gap, + surplus)

($000)

2019 $15,990 $12,422 -$3,568 -$3,568

2020 $10 $12,577 $12,566 $8,999

2021 $651 $14,998 $14,346 $23,345

2022 $9,474 $12,644 $3,169 $26,514

2023 $477 $12,665 $12,188 $38,702

2024 $88 $11,676 $11,588 $50,290

2025 $1,020 $11,466 $10,447 $60,737

2026 $1,050 $11,260 $10,210 $70,947

2027 $71,837 $10,998 -$60,839 $10,108

2028 $651 $10,730 $10,078 $20,187*

* The cumulative surplus of $20.2 million identified at the end of the 2028 year is attributed to the reduction to the infrastructure backlog of asset in poor and very poor condition.

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7.1.4 Projected expenditures for long term financial plan

Table 7.4 shows the projected expenditures required to fund transportation infrastructure. Expenditure projections are in 2018 real values, not inflated annually.

Table 7.4: Projected Required Expenditures ($000)

Year Operations

($000) Maintenance

($000)

Projected Capital Renewal

($000)

Capital Upgrade/ New

($000)

Disposals ($000)

2019 $31,789 $19,850 $15,990 6,837 $0

2020 $32,697 $19,857 $10 9,937 $0

2021 $31,802 $19,922 $651 13,358 $0

2022 $31,979 $20,051 $9,474 5,818 $0

2023 $32,199 $20,046 $477 5,848 $0

2024 $32,431 $20,044 $88 6,237 $0

2025 $32,649 $20,051 $1,020 6,142 $0

2026 $32,880 $20,059 $1,050 6,048 $0

2027 $32,983 $20,067 $71,837 5,909 $0

2028 $33,018 $20,075 $651 5,765 $0

Total $324,427 $200,022 $101,248 $71,899 $0

Average $32,443 $20,002 $10,125 $7,189 $0

7.2 Funding Strategy Funding for assets is provided from the budget and long term financial plan.

The financial strategy of the entity determines how funding will be provided, whereas the asset management plan communicates how and when this will be spent, along with the service and risk consequences of differing options.

7.3 Valuation Forecasts Asset values are forecast to increase as additional and upgraded assets are created Refer Figure 13.

Additional assets will generally add to the operations and maintenance needs in the longer term, as well as the need for future renewal. Additional assets will also add to future depreciation forecasts.

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Figure 13: Projected Asset Values

7.4 Key Assumptions Made in Financial Forecasts This section details the key assumptions made in presenting the information contained in this asset management plan. 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 are listed in Table 7.5.

Table 7.5: Key Assumptions made in AM Plan and Risks of Change

Key Assumptions in AM Plan Risk of Change

Use of current inventory data Low risk

Use of current condition data Low risk

Use of existing valuation 30 June 2017, useful life Low risk

Maintenance expenditure is based on current costs and market rates Medium risk

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7.5 Forecast Reliability and Confidence The expenditure and valuations projections in this AM Plan are based on best available data. Currency and accuracy of data is critical to effective asset and financial management. Data confidence is classified on a 5 level scale12 in accordance with Table 7.6.

Table 7.6: Data Confidence Grading System

Confidence Grade

Description

A Highly reliable Data based on sound records, procedures, investigations and analysis, documented properly and agreed 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 asset data used to inform the development of this AM Plan are tabulated below. The estimated confidence level for and reliability of data used in this AM Plan is considered to be C ‘Uncertain’.

Table 7.7: Data Confidence Grades

Asset Class Data Description Confidence Level

Road Asset Register The existence, location, and extent of all road corridor assets

A Highly reliable

Road Pavement Condition Condition Values are 60% reliable, and 40% uncertain

C Uncertain

Footpath, Kerb & Gutter Condition Values are 60% reliable, and 40% uncertain

C Uncertain

Traffic Facilities Condition Values are 60% reliable, and 40% uncertain

C Uncertain

Bridges Asset details, Condition A Highly reliable

Other Structures Condition Values are 60% reliable, and 40% uncertain

C Uncertain

12 IPWEA, 2015, IIMM, Table 2.4.6, p 2|71.

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8. PLAN IMPROVEMENT AND MONITORING

8.1 Status of Asset Management Practices13 8.1.1 Accounting and financial data sources

Inner West Council Annual Financial Statements 2017

Long Term Financial Plan 2018

8.1.2 Asset management data sources

Inner West Council Asset Register

Inner West Council Pavement Management System

Inner West Council Geographic Information System

8.2 Improvement Plan The asset management improvement plan generated from this asset management plan is shown in Table 8.1.

Table 8.1: Asset Management Improvement Plan

Ref Practice Area Task Responsibility Target Date

1 Strategic Longer

Term Plan

Council adopt a Community

Strategic Plan

Executive June 2018

2 Annual Budget Annual Budget based on the

Delivery Program, AM Plans and

LTFP

Deputy General

Manager Asset &

Environment

July 2018

3 Annual Report Annual Report reviews

performance against strategic

objectives

Deputy General

Manager Asset &

Environment

September 2019

4 AM Policy AM Policy Deputy General

Manager Asset &

Environment

June 2018

5 AM Strategy AM Strategy Deputy General

Manager Asset &

Environment

June 2018

6 AM Plans AM Plans Group Managers July 2018

Planning forecasts of renewal, new

assets and upgrades, maintenance

and operational costs,

rationalisation and disposal,

performance and utilisation,

Managers of

Assets, Asset

Management

Steering

Committee

June 2019

7 Governance and

Management

AM practices link to service

delivery

Managers of

Assets

June 2020

13

ISO 55000 Refers to this the Asset Management System

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Asset Management improvement

planning

Managers of

Assets

December 2019

8 Levels of Service Processes for determining current

and target levels of service and

costs

Managers of

Assets

June 2020

Levels of service measured,

monitored and performance

reported

Managers of

Assets

June 2020

Develop Service Plans, based on

community consultations;

Managers of

Assets

June 2020

9 Data and Systems Assessments of asset service Risk

and Criticality

Managers of

Assets

December 2019

Life cycle costs for assets, Asset

Management

Steering

Committee

June 2019

Consolidated integrated, accurate

asset database and analytical

capability to monitor and predict

performance

Asset

Management

Steering

Committee

September 2019

A methodology for, and predictions

of asset life based on condition and

asset consumption rates.

Managers of

Assets

June 2019

Documented data standards and

methodologies for asset condition

surveys and defect identification

identified in an Asset Knowledge

Management Plan

Managers of

Assets

June 2019

10 Skills and Processes Documented process for planning

needs for renewal and upgrade

Managers of

Assets

June 2019

Documented service rationalisation

process, and service delivery

reviews.

Asset

Management

Steering

Committee

June 2020

Documented structure of business

case justifications of capital

projects.

Asset

Management

Steering

Committee

December 2019

Asset custodianship handover

procedures

Asset

Management

Steering

Committee

September 2019

Documented processes for

planning operations and

maintenance

Managers of

Assets

September 2019

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Documented procedures for

determining asset treatment and

replacement cost rates;

Managers of

Assets

September 2019

Analysis of asset failures,

considering causes and identifying

trends

Managers of

Assets

June 2020

11 Evaluation Review and improvement

processes

Managers of

Assets

December 2019

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

The AM Plan will be updated annually to ensure it represents the current service levels, asset values, asset knowledge data, projected operations, maintenance, capital renewal and replacement, capital upgrade/new and asset disposal expenditures and projected expenditure values incorporated into the long term financial plan.

The AM Plan has a life of 4 years and is due for complete revision and updating within the following year of each Inner West Council election.

8.4 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 long term financial plan,

The degree to which 1-5 year detailed works programs, budgets, business plans and corporate 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 Strategic Plan and associated plans,

The Asset Renewal Funding Ratio achieving the target of 1.0.

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9. REFERENCES

Institute of Public Works Engineering Australasia, 2006, ‘International Infrastructure Management Manual’, Institute of Public Works Engineering Australasia, Sydney, www.ipwea.org/IIMM

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

Institute of Public Works Engineering Australasia, 2015, 2nd edn., ‘Australian Infrastructure Financial Management Manual’, Institute of Public Works Engineering Australasia, Sydney, www.ipwea.org/AIFMM.

Institute of Public Works Engineering Australasia, 2015, 3rd edn., ‘International Infrastructure Management Manual’, Institute of Public Works Engineering Australasia, Sydney, www.ipwea.org/IIMM

Institute of Public Works Engineering Australasia, 2012 LTFP Practice Note 6 PN Long Term Financial Plan, Institute of Public Works Engineering Australasia, Sydney

Inner West Council Community Strategic Plan, Our Inner West 2036.

10. APPENDICES

Appendix A Forward Capital Works Program – 4 years

Appendix B Budgeted Expenditure Accommodated in LTFP

http://www.ipwea.org/AIFMM

http://www.ipwea.org/IIMM

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Appendix A: Forward Capital Works Program – 4 years

Capital Program – Footpaths, Roads and Traffic 2018/19 ($'000)

2019/20 ($'000)

2020/21 ($'000)

2021/22 ($'000)

Road Renewal – Haberfield, Ramsay Street

(Dalhousie St To Wattle St)

420

-

-

-

Road Renewal – Ashfield, Arthur St – Road Reconstruction

(Holden St to Milton St)

850

-

-

-

Road Renewal – Summer Hill, Dover St – Road Reconstruction 375 - - -

Road Renewal – Dulwich Hill, Keith Street

(Macarthur Pde to Wardell Rd)

320 - - -

Booth Street Bridge Annandale – Investigation, Design and Replacement 840 - - -

Chester Street Footbridge Annandale – Replacement 300 - - -

Lilyfield Road Lilyfield – Cycleway 1,500 2,375 - -

Bike Route LR18 (Marrickville Station to Dulwich Hill) – Construction 600 - - -

Bike Route LR03 (Livingstone Rd to Frazer St) – Construction 500 1,100 - -

Ashfield Town Centre Upgrade 295 1,000 - -

Gateway Treatments (Ashfield Town Centre) 480 - - -

Outdoor Dinning Embellishments (Ashfield Town Centre) 600 - - -

Urban Amenity Improvement Program (Various Projects Leichhardt) 930 6,718 16,678 -

New Ashfield Town Centre Public Toilet 100 300 - -

Regional Roads Renewal 425 850 860 1,000

Local Roads Renewal 4,139 5,294 5,289 5,248

Kerb & Gutter Renewal 544 400 405 370

Roadside Furniture 100 100 188 100

Footpaths Renewal 2,342 2,200 2,130 2,511

Footpaths Upgrade 65 250 260 144

Traffic and Parking Management 160 165 165 165

Traffic Facilities 2,056 1,178 366 992

Bridges – Capital - 35 - 375

Cycleways 625 2,275 3,545 5,726

Car Parks - Capital 260 35 180 285

Town Centres Upgrade 749 140 1,090 3,020

Total 19,575 24,415 31,156 19,936

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Appendix B: Budgeted Expenditures Accommodated in LTFP

Transport Asset Management Plan

Documents

Transcript of Transport Asset Management Plan