NARACOORTE LUCINDALE COUNCIL
ASSET MANAGEMENT STRATEGY 2012
SUMMARY
Naracoorte Lucindale Council - Asset Management Strategy 2012 – Summary
At its 24 July 2012 meeting, Naracoorte Lucindale Council adopted
the Asset Management Strategy 2012.
This document is a summary of the Asset Management Strategy.
The complete Asset Management Strategy is available from
Council’s web site.
2
Naracoorte Lucindale Council - Asset Management Strategy 2012 – Summary
1. Purpose of the Asset Management Strategy
•
Council’s ability to fulfil the five Community Objectives in its
Be able to assign appropriate levels of funding for operational
actions on this asset class in line with service level targets;
Strategic Management Plan 2009-2030 is critically dependent on
•
its ability to provide and maintain the community infrastructure at
Being able to clearly define what service levels we can deliver
to our customers, the rate-payers and users.
a reasonable level, commensurate with resident expectations and
2. Strategic Asset Management
affordability.
Strategic Asset Management is a process of logic used to guide the
The objective of the Asset Management Strategy (AMS) is to
planning, acquisition, operation and maintenance, renewal and
provide an accurate assessment of the current maturity of
disposal of assets. Its objective is to maximise asset service delivery
Strategic Asset Management at Naracoorte Lucindale Council and
potential and manage related risks and costs over their entire lives.
then to develop a structured set of actions with the aim of
In simplest terms, Strategic Asset Management is about the way in
enabling Council to improve its asset management practices.
which Council looks after its assets, both on a day-to-day basis (i.e.
maintenance and operations) and in the medium to long term (i.e.
The key benefits of implementing the Asset Management Strategy
strategic and forward planning).
are:
•
•
•
Ability to provide better outputs with fewer resources by
The approach of Strategic Asset Management (SAM) is to focus on
better aligning our resources and needs;
ensuring that the assets are capable of providing services, of an
Ability to understand what standards our assets are in and
agreed quality, in a sustainable manner, for present and future
by monitoring the effect our actions are having on them;
communities. This is not merely a matter of spending more money
Having a key set of actions that will allow us to manage the
but instead is spending money wisely in a targeted manner to
provision of these assets into the future at lowest long-
achieve the service levels that the community both needs and can
term cost;
afford.
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Naracoorte Lucindale Council - Asset Management Strategy 2012 – Summary
Strategic Asset Management practices are aligned with the:
•
National Frameworks for Financial Sustainability in Local
Government;
•
Local Government Act 1999 and associated regulations;
•
Local Government Association of South Australia (LGA)
Financial Stability Program.
Infrastructure Asset Category
Replacement
Value
Roads
$283,283,670
$224,304,834
Bridges & Drainage
$9,452,841
$4,612,586
Community Waste Water
$2,738,635
$1,781,045
$20,291,823
$10,739,437
Recreation Facilities
$2,419,892
$1,667,215
Livestock Exchange (NRLE)
$6,562,396
$3,674,649
Swimming Lake
$2,956,173
$1,345,880
Buildings and Other Structures
3. Asset Management Tools
Currently Council is using Excel spreadsheets and its GIS as the
basis Asset Management record keeping. While Excel is a low-cost
Carrying
Value
solution, it carries risks and limitations that can be overcome with
dedicated Asset Management System solutions.
Table 1 - Asset Stock Replacement Values as at 30 June 2011
The high initial acquisition cost of an Asset Management System is
no longer an impediment to their adoption with vendors offering a
Table 1 above sets out the Replacement and Carrying Values, as at
range of alternatives such as bureau based solutions. Bureau
30 June 2011, for the major infrastructure asset categories that
based solutions are ideally suited to Council acquiring different
Council is responsible for.
functions on a staged basis as its needs and capacity to use them
5. The Health of Council’s Assets
grows.
By understanding the condition of Council’s assets and the various
types of distresses that affect them, Council can:
4. Council’s Asset stock
The Asset Management Strategy is designed to take into
•
Maintain the level of service the community desires;
consideration the principle infrastructure assets of Council. These
•
In the context of affordability, provide intergenerational
benefits;
assets are the physical objects owned and/or maintained by
Council to support the community’s social and economic activities.
•
4
Minimise the risk of asset failure.
Naracoorte Lucindale Council - Asset Management Strategy 2012 – Summary
Ideally, the health of an asset portfolio is best assessed using a
7. Strategic Actions
numerical scoring scheme that allows for comparison between
While Council is well placed on its Strategic Asset Management
individual assets and for forecasts to be made of future asset
journey, the journey is far from finished. The Asset Management
performance and budget requirements.
Strategy sets out 13 Strategies that will assist Council move closer to
the Target Good Practice levels shown on the Asset Management
Council is currently working towards adopting suitable schemes
Maturity Diagnostic chart (Figure 1). These Strategies are:
across all of its infrastructure asset portfolios. Until this work is
•
Asset Management Policy Review
•
Establish Corporate Asset Data Structure
•
Levels of Service
•
Adopt a Corporate Asset Assessment Methodology
A detailed assessment of Council’s infrastructure asset portfolios
•
Corporate Risk Management
identified that over 83% of the assets have at least 60% of their
•
Work History Recording
useful life remaining (as determined by value). From this it has
•
Corporate Asset Valuation Methods
been concluded that Council is currently in a reasonably sound
•
Corporate Asset Valuation and Revaluation
position.
•
Establish Financial Planning and Reporting structures in line
completed, Council’s understanding of the health of its assets is
based on a combination of the knowledge and experience of its
staff and assessments based on asset valuations.
with NAMF reporting requirements
6. Asset Management Maturity
Best practice service centric Strategic Asset Management is best
envisaged as a destination with the process of adopting it as being
a journey. Where an organisation is on that journey is measured
as its Asset Management Maturity.
The results of an Asset
•
Asset Management Plans
•
Integrated Budgeting
•
Asset Management System Procurement
•
Asset Management System Implementation
Management Maturity diagnostic for Council are shown in Figure
Commencing on page 12, Table 2 breaks the 13 Strategies into a total
1 on page 6. Overall, this shows Council to be well placed on its
of 33 separate Improvement Actions.
Strategic Asset Management journey.
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Naracoorte Lucindale Council - Asset Management Strategy 2012 – Summary
National Guideline Awareness
Plans and Strategies (Status)
Target Good
Practice
Position
Levels of Service (Awareness)
Asset Data (Holistic List)
Asset Data (Componentisation)
Condition Assessment (Methodology)
Condition Assessment (Practice)
Condition Assessment (Collection Process)
Asset Inspections - Risk and Maintenance
Capital Works Planning and Annual Budgeting
Maintenance Planning
Asset Accounting
Systems and Tools (Basic)
Staff Skills
Resource Levels
Resource Morale
GIS Functionality
0%
10%
20%
Current Assessment
30%
40%
Good Practice Gap
50%
60%
Excellence Gap
Figure 1 – Asset Management Maturity Diagnostic Results
6
70%
80%
90%
100%
Naracoorte Lucindale Council - Asset Management Strategy 2012 – Summary
Strategy
Improvement Action
Comments
Asset
Management
Policy Review
Current Policy Review
Establish
Corporate Asset
Data Structure
Importance
Urgency
Target
Budget*
Update in line with new SA
format
5
5
June 2012
In House
Determine Asset
Hierarchy Model.
Includes corporate business
process for asset IDs, asset
componentisation, master and
slave data silos and associated
attribute structure.
5
3
August 2012
Clean and validate
existing Asset Inventory
Data to match the Asset
Hierarchy Model.
Establish sources of data silos,
connect silos and prepare a
master list of line in sand registry
– Master list for NLC.
5
3
December
2012
10-12 person
weeks
September
2012 for
Roads and
Parks
6-8 person days
Develop service hierarchies and
core levels of service as per
Document current
NAMF guidelines and
practices as draft Levels of International Infrastructure
Service.
Manual. Note that NLC format to
be mindful of a small rural
Levels of Service
council.
5
5
Utilise a template based on
importance/satisfaction based on
broad customer criteria in the
core level survey.
4
2
Survey community on
satisfaction with current
level of service delivery.
7
6-8 person days
October 2012 $12-$30,000
Naracoorte Lucindale Council - Asset Management Strategy 2012 – Summary
Strategy
Adopt a
Corporate Asset
Assessment
Methodology
Improvement Action
Comments
Importance
Urgency
Target
Council adoption of Levels
of Service.
To include both Strategic LoS and
Operational LoS so that this
activity links to the AM plans and
the core maturity assessments as
per NAMAF in SA.
3
2
December
2012
Council staff
Prepare Condition
Assessment Manual for
Roads, Bridges and
Footpaths.
Localise the National Guidelines
to a small council environment
using NAASRA and Austroads and
adopt a 0-5 rating matrix.
3
3
July 2012
3-4 person days
Prepare Condition,
Capacity and Functionality
Assessment Manuals for
Buildings, Parks,
Stormwater and
Community Wastewater.
Localise the National Guidelines
to a small council environment
using the recent NAMS guidelines
for component structure and
adopt a 0-5 rating matrix.
2
2
July 2013
3-4 person days
Undertake a “desk top”
assessment of all assets.
Utilise any assessments made by
recently valued infrastructure.
3
3
December
2012
Council staff
Prepare a 15 year
assessment schedule.
Based on individual asset classes
to be assessed / revalued.
5
5
June 2012
Council staff
Complete a field
assessment of Roads and
Footpaths.
In-house staff; trained in
condition measurement and an
in-house QA process.
3
3
April 2013
Council staff
Complete field
assessment of all other
assets.
In-house staff; trained in
condition measurement and an
in-house QA process.
3
In line with
15 year
schedule
Council staff
8
3
Budget*
Naracoorte Lucindale Council - Asset Management Strategy 2012 – Summary
Strategy
Improvement Action
Comments
Importance
Urgency
Target
Corporate Risk
Management
Work History
Recording
Undertake evidence
based risk assessments on
assets
Asset Class specific risk
assessment that is linked to
forward work programs as per
Naracoorte Lucindale Region –
Risk Management Improvement
Action Plan - 2011
4
3
December
2012
Council staff
Record inspections and
work done on assets
Works Register that is an
electronic record of inspections
and work history.
4
3
December
2012
Council staff
Corporate Asset
Valuation
Methods
Review and update the
Asset Accounting Policy as
deemed necessary.
Based on AIFMG (Australian
Infrastructure Financial
Management Guidelines). This
includes NLC methods for unit
rates calculations, useful life
benchmarks and depreciation
rates.
5
5
July 2012
2 person days
Corporate Asset
Valuation and
Revaluation
Apply Valuations and
Revaluations
progressively as the Asset
Data is updated into a
Corporate Asset
Management Register
(Core Module).
3
June 2013
onwards in
line with a
15-year
schedule
One class at a time to ensure
resources are not stretched.
9
3
Budget*
10-15 person
days per
annum internal
Naracoorte Lucindale Council - Asset Management Strategy 2012 – Summary
Strategy
Establish
Financial
Planning and
Reporting
structures in
line with NAMF
reporting
requirements
Improvement Action
Comments
Importance
Urgency
Target
Adopt Consumptionbased Depreciation for
Roads and Footpaths
based on assessed asset
condition.
Will require change of policy.
2
2
June 2013
Council staff
Adopt Consumptionbased Depreciation for all
other assets based on
assessed asset condition.
Will require change of policy.
2
2
June 2014
Council staff
Implement a Financial
Reporting scheme to
identify Capital
Expenditure as:
a. Renewal
b. Upgrade
c. Expansion
d. New.
This is to enable reporting out of
the Core Asset Management
System in these classifications of
expenditure.
4
4
August 2012
Council staff
Adopt targets for core
Financial KPIs.
Sustainability Ratio, Renewal
Ratio, Asset Consumption Rate,
Funding Gaps.
3
3
March-June
2013
Council staff
Undertake 20-Year
Financial Modelling as
asset portfolios.
To meet the requirements of the
Long Term Financial Planning in
SA as per the NAMF.
3
3
10
Budget*
$20-25,000
October 2014
consultants
progressively
bureau
Naracoorte Lucindale Council - Asset Management Strategy 2012 – Summary
Strategy
Asset
Management
Plans
Integrated
Budgeting
Improvement Action
Comments
Importance
Urgency
Target
Prepare separate Asset
Management Plans for:
Roads & Footpaths
Buildings
Parks
Stormwater & CWMS
Waste Management.
Based on the SA template for
small councils.
3
4
November
2014
progressively
$30-40,000
consultants
bureau
Council endorsement of
Asset Management Plans
to proceed to Community
Consultation.
Includes presenting scenario
modelling to councillors for each
asset class. These are core AM
plans.
3
3
December
2014
Council staff
Community Consultation
about Asset Management
Plans.
Moving from ‘Informing
Community’ to ‘Engaging the
Community’ under the NAMAF
framework model.
2
2
April 2015
Council staff
Council adoption of
finalised Asset
Management Plans.
These are advanced AM plans
with a service planning model in
consultation with the community.
3
3
June 2015
Council staff
Integrated the Asset
Management Plans as a
key input for Council’s
Corporate Budgeting and
Resource Planning.
1. Budgets informed by AM
plans.
2. LTFP updated each year based
on service planning.
3. Capital Works is based on
budget prioritisation.
2
2
April 2014
Council staff
11
Budget*
Naracoorte Lucindale Council - Asset Management Strategy 2012 – Summary
Strategy
Asset
Management
System
Procurement
Asset
Management
System
Implementation
Improvement Action
Comments
Importance
Urgency
Target
Prepare statement of
functional requirements –
Core Asset Register and
Accounting Modules.
Core Level Module that complies
with the NAMF framework and is
able to deliver compliance
reporting for asset accounting.
4
3
September
2012
Council staff
Prepare statement of
functional requirements Advanced Long Term
Prediction Module.
Advanced Module that complies
with NAMF and SA Integrated
Planning requirements of Long
Term Financial Planning.
4
3
September
2012
Council staff
Prepare statement of
functional requirements –
Core Maintenance
Module.
Including Customer Request and
Works Planning.
4
4
September
2012
Council staff
Investigate product
options and costs
(including bureau based
solutions).
Recent diagnostic suggests that
Council may only need Core
modules at this stage.
4
3
September
2012
Council staff
3
3
June 2013
$47-$55,000
3
3
September
2013
$20,000
3
3
June 2014
$27-$35,000
Implement Core Asset
Register and Accounting
Modules.
Implement Advanced
Long Term Prediction
Module.
Implement Core
Maintenance Module.
Embed the asset hierarchy
structure and clean line in sand
data. Progressive asset class
upload. Ensure and maintain
unique links between AMS, GIS
and FMS.
Table 2 – Improvement Actions
* External consultants and Council staff as appropriate
12
Budget*