Property Asset Management Plan - Palmerston NorthProperty Asset Management Plan This Asset Management Plan (AMP) is based on the best information available when it was completed in

Property Asset Management Plan This Asset Management Plan (AMP) is based on the best information available when it was completed in December 2017. Council decision making both with regard to which projects are implemented and the timing of the projects in the context of the 2018-28 10 Year Plan has yet to be finalised. The programmes in this AMP have been used as a planning tool to inform the 10 Year Plan planning process. The actual programme of work that Council plans to implement will be that in the adopted 2018-28 10 Year Plan following formal public consultation.

This document was prepared by Palmerston North City Council, City Networks, Parks & Property Division.

Name Signature Date

Prepared by: John Brenkley, Aaron Phillips, Jocelyn Broderick, Ian Stuart

December 2017

Reviewed by: Phil Walker February 2018

Peer Reviewed by: AECOM New Zealand March 2018

Approved for Issue by: John Brenkley

Version No. Reason for Amendment Date

1 Original Issue

1 a Peer Review feedback incorporated April 2018

PNCC Reference No: Oasis # 9667736

Table of Contents Executive Summary i

1 Overview 3

1.1 Purpose of this Plan 3 1.2 Relationship with Other Plans 3 1.3 AMP Review Process 5 1.4 Changes to AMP Since 2014 5 1.5 Navigating the AMP 6

2 The Activity 9

2.1 Activity Description 9 Operational Properties 9 2.1.1 Cultural Facilities 9 2.1.2 Social Housing 9 2.1.3 Strategic Properties 9 2.1.4 Investment Properties 9 2.1.5 Reserve Leasehold Properties 9 2.1.6 Community Centre and Community Agency Housing 9 2.1.7

2.2 Activity Rationale 10 2.3 Significant Negative Effects of the Activity 11 2.4 LGA s17A Review 11

Libraries and Community Centres 11 2.4.1 Arts and Culture Facilities 12 2.4.2 Social Housing 12 2.4.3

2.5 Significant Changes to the Activity 12

3 Strategic Environment 13

3.1 Council Vision, Goals & Strategic Direction 13 Community Services and Facilities Plan 14 3.1.1 Social Housing Plan 15 3.1.2 Energy Plan 15 3.1.3 Arts Plan 15 3.1.4 Culture and Heritage Plan 16 3.1.5 Infrastructure Strategy 16 3.1.6

3.2 Statutory and Regulatory Requirements 16 3.3 Asset Management Policy 17

Objectives 17 3.3.1 Asset Management Strategy 17 3.3.2

4 Level of Service 21

4.1 Introduction 21 4.2 Community Input and Decision Making Process 21 4.3 Communication of Levels of Service and Performance Measures 23

4.4 Current and Future Levels of Service & Performance Measures 25 Customer Segmentation 25 4.4.1 Key Performance Indicators 27 4.4.2 Future Changes to Current Level of Service 29 4.4.3 Service Level Gaps 29 4.4.4

5 Growth and Demand 31

5.1 Future Demand Drivers 31 5.2 Growth Projections 31

Population Growth 31 5.2.1 National Policy Statement – Urban Development Capacity 32 5.2.2 Household Growth 32 5.2.3 Residential Development Type 33 5.2.4

5.3 Residential Growth Strategy 33 5.4 Office and Retailing (Commercial) Land Use Strategy 37 5.5 Operational Properties 38 5.6 Cultural Facilities, Including Libraries 38 5.7 Social Housing 38 5.8 Investment Properties 39 5.9 Community Centres and Community Agency Houses 39 5.10 Demand Management 39 5.11 Sensitivity to Demand Changes 40 5.12 Climate Change – Impact on Demand 40

6 Assets and Lifecycle Management 41

6.1 Overview 41 6.2 Life Cycle Activities 42

Asset Operations 42 6.2.1 Asset Maintenance 42 6.2.2 Asset Renewal 42 6.2.3 Asset Development 42 6.2.4 Asset Disposal 42 6.2.5

6.3 General Lifecycle Management Strategies 43 Operations and Maintenance Strategies 43 6.3.1 Renewals Strategies 43 6.3.2 Development Strategies 44 6.3.3 Disposal Strategies 45 6.3.4

6.4 Asset Management Systems 47 General Standards and Specifications Used 48 6.4.1

6.5 Lifecycle Management - Operational Properties 48 Asset Information 48 6.5.1 Asset Condition 51 6.5.2 Capacity and Performance 53 6.5.3 Operations and Maintenance Plan 55 6.5.4

Renewal Plan 57 6.5.5 Development Plan 59 6.5.6 Disposal Plan 60 6.5.7 Risk Management 60 6.5.8 Delivery of Services 60 6.5.9

6.6 Lifecycle Management - Cultural Properties 61 Asset Information 61 6.6.1 Asset Condition 65 6.6.2 Capacity and Performance 67 6.6.3 Operations and Maintenance Plan 69 6.6.4 Renewals Plan 71 6.6.5 Development Plan 73 6.6.6 Disposal Plan 73 6.6.7 Risk Management 74 6.6.8 Delivery of Services 74 6.6.9

6.7 Lifecycle Management - Social Housing (formerly Community and Public Rental Housing) Properties 75

Asset Information 75 6.7.1 Asset Condition 81 6.7.2 Capacity and Performance 83 6.7.3 Operations and Maintenance Plan 84 6.7.4 Renewals Plan 85 6.7.5 Development Plan 87 6.7.6 Disposal Plan 87 6.7.7 Risk Management 87 6.7.8 Delivery of Services 87 6.7.9

6.8 Lifecycle Management - Community Centres and Community Agency Housing 89 Asset information 89 6.8.1 Asset Condition 89 6.8.2 Capacity, Utilisation and Performance 91 6.8.3 Operations and Maintenance Plan 91 6.8.4 Renewal Plan 92 6.8.5 Development Plan 94 6.8.6 Disposal Plan 95 6.8.7 Risk Management 95 6.8.8 Delivery of Services 95 6.8.9

6.9 Lifecycle Management - Investment Properties 97 Asset Information 97 6.9.1 Asset Condition 100 6.9.2 Asset Capacity and Performance 101 6.9.3 Operations and Maintenance Plan 102 6.9.4 Renewal Plan 103 6.9.5 Development Plan 105 6.9.6

Disposal Plan 105 6.9.7 Risk Management 105 6.9.8 Delivery of Services 105 6.9.9

6.10 Lifecycle Management - Forestry 107 Asset Information 107 6.10.1 Asset Condition 107 6.10.2 Capacity, Utilisation and Performance 107 6.10.3 Operations and Maintenance Plan 107 6.10.4 Renewal Plan 108 6.10.5 N Development Plan 108 6.10.6 Disposal Plan 108 6.10.7 Risk Management 109 6.10.8 Delivery of Services 109 6.10.9

6.11 Reserve Leasehold 111 Asset Information 111 6.11.1 Asset Condition 111 6.11.2 Capacity, Utilisation and Performance 111 6.11.3 Operations and Maintenance Plan 111 6.11.4 Renewals Plan 111 6.11.5 Development Plan 111 6.11.6 Disposal Plan 111 6.11.7 Risk Management 111 6.11.8 Delivery of Services 111 6.11.9

6.12 Lifecycle Management - Strategic Properties 113 Asset Information 113 6.12.1 Asset Condition 113 6.12.2 Capacity, Utilisation and Performance 114 6.12.3 Operations and Maintenance Plan 114 6.12.4 Renewals Plan 114 6.12.5 Development Plan 114 6.12.6 Disposal Plan 114 6.12.7 Risk Management 114 6.12.8 Delivery of Services 114 6.12.9

6.13 Key AMP Improvement Projects for the Assets and Lifecycle Management section 115

7 Risks and Resilience 117

7.1 Corporate Risk Management Framework 117 Risk Management Policy 117 7.1.1 Strategic risks 117 7.1.2 Operational risks 117 7.1.3 Project risks: 120 7.1.4 Risk Management Hierarchy 120 7.1.5 Asset Criticality 120 7.1.6

Resilience 121 7.1.7 Risk Management Process 121 7.1.8

7.2 Activity Risk Management 122 Approach for the Activity 122 7.2.1 Role of Activity as a Lifeline Utility 123 7.2.2 Critical Assets 123 7.2.3 Resilience 124 7.2.4 Sources of Risk 125 7.2.5 Reference Documents 125 7.2.6

7.3 Key Risks to the Property Activity 125 Operational Failure 125 7.3.1 Asset Failure 126 7.3.2 Project and Planning Risks 126 7.3.3 Natural Disasters 126 7.3.4 Events and Incidents 126 7.3.5

7.4 Resilience of Infrastructure to Natural Disaster 127 Introduction 127 7.4.1 Seismic Hazard 127 7.4.2 Flooding Hazard 128 7.4.3 Volcanic Hazard 128 7.4.4 Other Natural Hazards (landslides, wind, snow, lightning etc) 128 7.4.5 Interdependencies 128 7.4.6

7.5 Risk Management Strategy 129 7.6 Risk Management Programme 129 7.7 Civil Defence Preparedness 130

Emergency Events 130 7.7.1 Emergency Response Plan 130 7.7.2 Business Continuity Plan 131 7.7.3 Recovery 131 7.7.4 Lifeline Utilities Coordination 132 7.7.5

7.8 Risks and Resilience Improvement Plan 132

8 Sustainability 133

8.1 Eco City Strategy 133 8.2 Key Sustainability Issues and Approaches 133 8.3 Climate Change 133

9 Financial Projections and Trends 135

9.1 Long Term Financial Forecast 135 9.2 Asset Valuation 138 9.3 Confidence Levels 139 9.4 Reliability of Financial Forecasts 139 9.5 Funding Policy 140

Operation and Maintenance 140 9.5.1

Capital Renewal 140 9.5.2 Capital Development 141 9.5.3

10 Asset Management Plan Assumptions 143

10.1 Asset Ownership and Provision of Service 143 10.2 Population Growth 143 10.3 Residential Growth 144 10.4 Retail Growth 144 10.5 Rural Residential Growth 144 10.6 Levels of Service 144 10.7 Construction Costs 145 10.8 Maintenance and Operational Costs 145 10.9 Inflation 145 10.10 Depreciation 146 10.11 Vested Assets 146 10.12 Service Potential 146 10.13 Asset Lives 146 10.14 Natural Disasters 146 10.15 Council Policy 146 10.16 Interest Rate 146

11 Continuous Improvement 147

11.1 Overview 147 11.2 Programme Planning and Implementation 147 11.3 Project Status 147 11.4 Development Works Planning 147

Residential Growth and Industrial Growth Planning (refer to Section 5) 147 11.4.1 Demand Projections (refer to Section 5) 147 11.4.2 Risk and Resilience (refer to AMP Section 7) 148 11.4.3 Council Strategies (refer to AMP Section 3) 148 11.4.4

11.5 Renewal works planning 148 Condition data 148 11.5.1

11.6 Operations and Maintenance 148 Operations and Maintenance Strategy 148 11.6.1 Internal Service Level Agreements 148 11.6.2 Market Comparability Procedure 148 11.6.3

11.7 Asset Information 149 Data Quality Processes 149 11.7.1 Asset Management Plan Improvement 149 11.7.2

11.8 Asset Management Resources 149 Loss of Key AM Knowledge 149 11.8.1 Skill Gaps 149 11.8.2

11.9 Levels of Service Review 149 11.10 AMP Improvement Plan (2017) 150

Appendices Glossary 155 Appendix A. Requirements of Local Government Act 2002 161 Appendix B. Activity Performance Measures 167 Appendix C. Risk Analysis/Framework and Register 179 Appendix D. Detailed Financial Information 223 Appendix E. SPM Component Base Lives 241 Appendix F. Location of Housing Properties 247 Appendix G. Summary Component Categories and Average Remaining Useful Lives 251 Appendix H.

Management and Reliability of Data 277 Appendix I. 10 Year Asset Renewal Programme 285 Appendix J. Peer Review Report 293 Appendix K.

Table of Figures

Figure 1: Planning and Processes Relationship within Council 4 Figure 2: AMP Structure 7 Figure 3: Residential Development Map 36 Figure 4: Summary of Property Portfolio Values 41 Figure 5: Operational Properties Values 49 Figure 6: Condition Grade Profile - Civic Administration Building 51 Figure 7: Condition Grade Profile - Convention Centre 52 Figure 8: Condition Grade Profile - Depot 52 Figure 9: Operational Properties - Projected Operations and Maintenance Costs 57 Figure 11: Operational Property - 30 Year Renewal Forecast Profile 58 Figure 12: Operational Property - 50 Year Age Based Renewal Profile 59 Figure 13: Cultural Properties Values 61 Figure 14: Condition Grade Profile for Cultural Properties 66 Figure 15: Detailed Assessments – Condition Grade Breakdown for Cultural Facilities 66 Figure 16: Cultural Properties – 30 Year Operations and Maintenance Costs 71 Figure 17: Cultural Properties - 30 Year Renewal Forecast Profile 72 Figure 18: Cultural Property - 50 Year Age Based Renewal Profile 73 Figure 19: Social Housing Fair Value 76 Figure 20: Condition Grade Breakdown for Community Housing (Excluding Papaioea Place) 82 Figure 21: Detailed Assessments – Condition Grade Breakdown for Community Housing 82 Figure 22: Average Monthly Occupancy Rates for Community Housing 83 Figure 23: Community Housing 30 Year Expenditure Forecast Summary 85 Figure 24: Community Housing 30 Year Renewals Profile 86 Figure 25: Community Housing 50 Year Age Based Renewals Profile 86 Figure 26: Condition Grade Profile - Community Centres 90 Figure 27: Detailed Assessments - Condition Grade Breakdown for Community Centres 90 Figure 28: Community Centres – Operational 30 Year Financial Summary 92 Figure 29: Community Centres 30 Year Renewal Profile 93 Figure 30: Community Centres 50 Year Age Based Renewal Profile 94 Figure 31: Community Centre and Agency Housing - Capital New 95 Figure 32: Investment Properties Fair Value 97 Figure 33: Condition Grade Profile – Holiday Park 101 Figure 34: Investment Properties 30 Year Operations and Maintenance Forecast 103 Figure 35: Investment Properties – 30 Year Renewal Profile 104 Figure 36: Investment Properties Age based 50 Year Renewal Profile 104 Figure 37: Risk Management Hierarchy 120 Figure 38: Risk Management Process (AS/NZS ISO 31000:2009) 122 Figure 39: Property 30 year Financial Summary – Operations, Interest and Revenue 135 Figure 40: Property 30 Year Financial Summary – Renewals 136 Figure 41: Property 30 Year Financial Summary 137

Figure 42: Property Fair Value as at 30 June 2016 138 Figure 43: Risk Management Process 181 Figure 44: Location of Social Housing Complexes 249

Table of Tables

Table 1: Activity Linkages to City Goals 10 Table 2: Property Activity contribution to City Goals 13 Table 3: AMP Linkages to the Infrastructure Strategy 16 Table 4: Matters raised at Councillor LoS Workshop 22 Table 5: LoS actions arising from Council Strategy Plans 23 Table 6: Customer segmentation, levels of service and linkage to goals 25 Table 7: Key Performance Indicators 27 Table 8: Future changes to Level of Service by Property Activity 29 Table 9: Service Level Gaps 29 Table 10: Population Projections for Palmerston North 32 Table 11: Household Projections for Palmerston North 33 Table 12: Residential Development Type 33 Table 13: Staging and timing of residential greenfield areas 35 Table 14: CAB Occupation 54 Table 15: Convention Centre User Numbers 54 Table 16: Operational Building 5 year renewal programme 57 Table 17: Operational Buildings Capital programme 59 Table 18: Operational Property - High Risks and Their Controls 60 Table 19: Square Edge Foot Traffic Counts 68 Table 20: Overall Library Use 69 Table 21: Regent Theatre Attendance 69 Table 22: Cultural Buildings 5 year renewal programme 71 Table 23: Cultural Facilities 5 Year Development Programme 73 Table 24: Cultural Properties High Risks and Existing Controls 74 Table 25: Social Housing 5 year renewal programme 85 Table 26: Social Housing Development programme 87 Table 27: High Consequence Risks – Community Housing 87 Table 28: Community Centres - Size, Year Built and Value 89 Table 29: Community Centres 5 year renewal programmes 93 Table 30: Community Centres Development programme 94 Table 31: High Severity Risks relevant to Investment Properties 105 Table 32: Forestry Operational Expenditure Forecast 108 Table 33: Forestry Development Expenditure Forecast 108 Table 34: Operational Risks 117 Table 35: Resilience Definition 121 Table 36: Critical Property Assets 123 Table 37: Critical Assets 124 Table 38: Operational Failure 125 Table 39: Asset Failure 126 Table 40: Project and Planning Risks 126

Table 41: Events and Incidents 126 Table 42: Earthquake Prone Buildings Remediation Costs 127 Table 43: Seismic Hazard - Council Buildings 128 Table 44: Seismic Hazard - Community Housing 128 Table 45: Interdependencies 129 Table 46: Risk Management Programme 129 Table 47: Growth versus capital works 137 Table 48: Property Value by Activity as at 30 June 2016 138 Table 49: Confidence grading scale 139 Table 50: Data reliability 139 Table 51: Property Asset Funding Source Allocation 141 Table 52: Indicative AM Improvement Programme 151 Table 53: Risk Register 184 Table 54: Risk Impact Guide 186 Table 55: Risk likelihood Guide 187 Table 56: Risk Events 188 Table 57: High Risk Consequence Summary 192

Executive Summary Asset Management Plan 2017 – Property

EXECUTIVE SUMMARY

Purpose of the Plan The purpose of this plan is to demonstrate how the assets are being managed so as to deliver services to the community in a sustainable and cost effective way.

This plan details information about:

The strategic outcomes that Council is seeking to achieve related to Property infrastructure.

The level of service to be provided. The infrastructure that need to be

maintained, renewed and developed to meet the demands placed on it over the next 30 years.

How these services are to be provided. What funding is required to meet these

demands. The associated risks.

Activity & Assets The services that are provided to the community through the assets in this plan are as follows:

Provide for accommodation needs of Council activities.

Provide for cultural events. Encourage visitors and business to the City. Provide housing options for low and limited

income residents. Maintain strategic options available to the

Council.

The assets that contribute to providing these services are:

Asset type Quantity

Operational properties 5

Cultural properties including libraries

12

Social housing 403 units

Investment Properties 6

Asset type Quantity

Leasehold property 1

Community centres 8

Community Agency Housing 3

Strategic properties (for CET Arena Manawatu future development)

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These assets have a replacement value of $149.8 million (including land value).

Asset Condition & Performance

The maintenance and renewal regime has kept properties in overall good condition, although a number of buildings require work to meet the new seismic strengthening standards. Other performance issues of note are:

The City Library is due for some renewal work, particularly on its roof and HVAC systems, and is proposing major upgrades.

The rear areas of Square Edge are nearing end of life.

Social housing has some quality shortcomings, with bed-sit units needing conversion to one bedroom units. The programme is now stopped in favour of construction of new additional social housing units.

Milson Community Centre, as a converted post office, is not generally in keeping with other centres and performs to a lower standard.

Some of the Holiday Park cabins are in poor condition.

The Strategic Environment The strategic environment is set by the Council’s desired outcomes, as given by its Vision of ‘Small city benefits, Big city ambition’, and its Goals and Strategy Plans. Of particular importance to this AMP are the Creative and Liveable City Strategy, and the Connected Community Strategy, under which Strategy Plans for Arts, Culture, and Heritage,


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Community Services and facilities, and Social housing have been developed. This AMP gives effect to the actions and programmes identified in these plans following a sustainable practices approach.

Levels of Service Council provides:

Operational and cultural properties suitable for their intended use.

Community centres and hubs to cater to the diverse needs of local communities.

Warm and safe housing units for people in line with Council priorities.

Investment properties that meet business needs at a market related price.

Council properties are managed in a financially sustainable way.

A 30 year Asset Management Plan is in place for Council properties.

The level of service is expected to increase / change in the following areas over 30 years.

Seismic strengthening and fire safety upgrades of various operational and cultural buildings (standards changed – legal requirement).

Additional and improved Social Housing units at the Papaioea complex (strategic direction).

New community hubs/centres in Kelvin Grove, Bunnythorpe, and in the City West Urban growth area (strategic direction and urban growth).

Te Manawa redevelopments – subject to external funding (seismic strengthening and partly strategic).

Future Demand The main demand for property provision in the future will be driven by:

Demand for services with an increasing population.

Development in new residential growth areas.

Council strategic goals for social housing. Strategic direction including higher, and

changing, LoS expectations.

This AMP is based on following a specific Palmerston North high population growth population scenario for years 1-10 that equates to 1.0% annum growth, and then a medium growth scenario for years 11-30 that gives an overall population growth of 0.6% p.a. over 30 years.

The main areas for residential growth are Whakarongo in the short term, and City West in the longer term, supported by other smaller developments.

The demand for services is to be met through a combination of managing existing assets, upgrading of existing assets, providing new assets, and demand management.

Lifecycle Management Property assets are managed to so as to meet the required levels of service while minimising costs on a whole of life cycle basis.

An important consideration in this plan is the focus given to achieving the Council’s strategic outcomes.

The maintenance and renewal plans maintain the service potential of the Property assets through the 30 year period, while the development plan provides mainly for programmes to achieve specific outcomes desired by the Council and providing some capacity for growth. Particular aspects and funding required for each of the plans are as follows:

Operations and Maintenance Plan

Operations and maintenance is generally steady across the Property portfolio. Additional costs are allowed for in years where new facilities are developed, e.g. additional social housing units and new community hubs.

Total 30 year O&M forecast - $175.9 M (On average $5.86 M p.a.)

Renewals Plan

Renewals planning includes some smoothing of work to spread workloads, avoid major disruption to the services, and coordinate with capital work, e.g. seismic strengthening and fire upgrades.


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Key features of the renewals plan are:

Operational properties – $690,000 per year on average across the five facilities.

Cultural properties – Library HVAC and roof renewal work features. Renewals at Te Manawa off-set by facility development plans. The renewal levels ramp up from years 11 to 17 but will need amending if development plans for a new Te Manawa facility are achieved.

Social Housing – general renewals planned over the 30 years including Papaioea Housing upgrades. The renewal profile will change as the Papaioea Housing project is developed.

Investment properties – steady routine renewal, with development of a Holiday Park masterplan planned for next AMP.

Community centres and agency housing – Ashhurst Village Valley Centre re-roof in 2020/21.

Strategic Properties – no significant renewal plans – maintenance only until properties required for other activities uses, e.g. Arena Manawatu.

Total 30 year Renewal forecast - $77.4M (On average $2.6 M p.a.)

Development Plan

Operational properties – seismic (earthquake) strengthening of the Civic Administration Building (CAB) $3.1 million.

Cultural properties – Te Manawa major rebuild proposed from 2022 to 2026 $54.7 million ($15.7 million from Council). City Library redevelopment plan $7.5 million.

Social Housing – Papaioea complex unit modernisation and additional units developed $9 million.

Investment properties – none planned, but a review of the holiday park facilities to be completed to inform the 2020/21 AMP.

Community centres and agency housing – New Community hubs in Kelvin Grove $4 million ($2 million externally funded) and the City West Urban growth area $4 million ($2 million externally funded), as well as a Bunnythorpe Centre $1.14 million ($720,000 externally funded).

Strategic Properties – there are properties held for long term development of other assets e.g. CET Arena Manawatu. No specific development of these properties.

Total 30 year Development forecast - $96.7 M

Financial Summary The following graphs show the projected operating and capital expenditure associated with the management and development of the assets as set out in the O&M, Renewals, and Development Plans Annual expenditure shown annually for the first 10 years and then in 5 yearly bands for years 11-30 of the plan. Forecasts are shown as present day costs (uninflated).

Operations and Maintenance

Figure A: Operational Expenditure Property

Operational expenditure is generally steady, with increases for new facilities in some years. A $1.2 million CAB building refurbishment programme features from 2020 to 2023. Net costs of social housing are expected to decrease once the Papaioea upgrades are complete and new units tenanted in 2023.

Renewals

Figure B: Renewal Expenditure Property

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Many of the building structures have considerable lives left meaning that renewal requirements are less than depreciation over the period. Additionally, major redevelopments proposed at Te Manawa will renew the entire facility (demolishing the current facility valued at $16.6 million) and seismic strengthening work will lengthen building lives.

Capital Development

Figure C: Capital New Expenditure Property

Peak capital spend in 2025 - 2027 is Te Manawa $54.7 million rebuild, which includes $39 million externally funded

Financial forecasts are based on generally good asset information although extrapolation of information has been used in some places. Projects in the first few years are more fully scoped than in later years.

Risk and Resilience Critical assets for the Property activity having the highest consequences should they fail are identified as:

Operational and Cultural properties - Major building failure resulting in closure for weeks to months (Operational).

Operational and Cultural properties - Frequent ingress of water causing moderate damage or inconvenience.

Social Housing - Fire destroys building(s) and results in serious injuries or deaths.

The risk around asbestos, both in terms of health and unforeseen future costs, is also

recognised and mitigated with a progressive survey of all buildings.

Mitigation measures to address the above risks are outlined in this plan.

The plan is also focussed on increasing the resilience of the infrastructure to natural hazards so as to minimize the disruption to essential services. Initiatives in this plan that increase the resilience of the Property infrastructure are seismic (earthquake) strengthening of the relevant Operational and Cultural properties.

Reliability of Data The data on which this plan is based is considered reliable with a good level of data confidence for condition of assets and operational forecasts and an average level of data confidence for renewal and development forecasts.

Continuous Improvement Asset management processes and practices are continually being assessed and improved in order to provide more cost effective asset management. The priority improvement tasks for the next 3 years are as follows:

Capital renewal and development project planning – further development of processes to take into account a sustainable development approach.

Continue to develop predictive modelling and risk based approaches to help prioritise renewal programmes and better manage risks and costs in achieving the desired outcomes.

Asset information – on-going development of asset systems and collection and analysis of data to meet all asset management needs.

Resource planning to ensure the recruitment, retention and development of sufficient and suitably qualified staff.

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Section 1 – Overview Asset Management Plan 2017 – Property

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1 Overview

1.1 Purpose of this Plan

This AMP is the basis for the Property asset planning. The objective of asset management is to:

“Deliver the required level of service to existing and future customers in the most cost-effective way.”

In this context the specific objectives for this AMP are:

To define the services to be provided, the target service standards that Council aims to achieve, and the measures used to monitor the performance of the Property asset.

To translate Council’s Strategic Vision and Goals into activity strategies and action plans, that align to National and Regional transport policies and strategies. The plan identifies forward works programmes based on strategic outcomes sought and financial forecasts required to meet agreed service levels and cater for growth.

To demonstrate responsible management of the Property assets to stakeholders, ensuring that public funds are optimally applied to deliver cost effective services to meet customer expectations.

To document current asset management practices used by PNCC based on clear evidence as part of a sustainable and optimised lifecycle management strategy for the Property infrastructure, and identify actions planned to enhance management performance.

To comply with the requirements of relevant legislation.

The key outputs of this AMP are input into the 2018-28 10 Year Plan process, which will be the subject of a special public consultative procedure.

The intention of this AMP is to set out how Council manages Property assets and services in a way that is appropriate for a readership including elected members of the Council, executive management, interest groups and business partners associated with the management of the Property activity along with interested members of the community. It covers the services that are provided from ownership and management of the associated assets.

This AMP covers a period of 30 years commencing 1 July 2018. Operational, maintenance and renewal programmes for the first 3 years are generally well defined with reasonable certainty of being implemented to budget as planned. Beyond this period, work programmes are generally based on projected trends and demands and there is less certainty with respect to scope and timing of the projects. All expenditure forecasts are based on unit costs as at 1 July 2018.

1.2 Relationship with Other Plans

AMPs are a key component of the Council planning process, linking with the following plans and documents:

10 Year Plan: A plan required by the Local Government Act (2002) to cover a period of at least 10 years and provide a long-term focus for the decisions and activities of the Council. This AMP contains key information about the Council’s activities, assets, levels of service and cost of providing services. This AMP provides key inputs to the 2018-28 10 Year Plan


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Infrastructure Strategy: A local authority must, as part of its long-term plan, prepare and adopt an infrastructure strategy for a period of at least 30 consecutive financial years. This AMP is an integral document in informing the Infrastructure Strategy.

Annual Budget: Provides the programmes and funding plan for each year of the 10 Year Plan including reporting on variances.

Draft Arts Plan: Shows how the Palmerston North City Council AMP will contribute to the goal developing the city into an arts powerhouse with a national reputation for creativity and the arts as an innovative and growing city.

Draft Community Services and Facilities Plan: Shows how Palmerston North City Council will achieve its goal to develop, provide, and advocate for services and facilities that create a connected, welcoming and inclusive community, where people are connected with each other and the services, facilities, and support they need to prosper (Priority 1, Connected Community Strategy).

Draft Social Housing Plan: Shows how Palmerston North City Council will achieve its goal to ensure PNCC has a healthy community where everyone has access to healthy, safe and affordable housing and neighbourhoods (Priority 2, Connected Community Strategy).

Draft Energy Plan: Shows how Palmerston North City Council will achieve its goal to contribute to demonstrating leadership and best practice by developing and implementing an environmental sustainability plan for the Council, Council run events, and facilities.

Draft Culture and Heritage Plan: Shows how Palmerston North City Council will achieve its goal to celebrate the city's history and diversity, and build on the strength of being a city of many cultures and languages (Priority 2, Creative and Liveable Strategy).

Contracts and Service Level Agreements: The service levels, strategies, and information requirements contained in AMPs are translated into contract specifications, internal service level agreements, and reporting requirements.

Bylaws, standards and policies: These tools for asset creation and subsequent management are needed to support AM tactics.

Figure 1 depicts the relationship between the various processes and levels of planning within the Council required to deliver on Council’s vision and goals.

Figure 1: Planning and Processes Relationship within Council

TACTICAL PLANNING e.g. Asset Management Plans

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COUNCIL VISION & GOALS

OPERATIONAL PLANNING e.g. Annual Budget

Annual Budget Programme

STRATEGIC PLANNING e.g. Council’s strategic direction &

10 Year Plan

Long term programmes

(5-30yrs)

Medium term programmes

(2-5yrs)


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1.3 AMP Review Process

This AMP review has been a 12 month project undertaken by Council’s asset management (AM) team, led by the Special Projects Manager, covering all Palmerston North City Council (PNCC/Council) AMPs.

Linkages were established early in the process with other Council planning teams, including the 2018-28 10 Year Plan team, strategic planning, and corporate finance teams, to ensure an integrated approach to consistency of information and assumptions across the organisation.

The stages of the review have been as follows:

Assessment of Council’s strategic direction as it has developed over the period February – October 2017 to determine the asset implications of delivering the community outcomes that the Council is seeking and developing programmes accordingly.

Level of service review – to determine what level of service the Council considered affordable and what changes are required. The Councillors were informed about current levels of service and workshopped the issues and options at a workshops (building from current levels of service, and presenting the issues and options to a Councillor workshop (30 October 2017).

Review of critical assets and key risks, assessment of critical asset resilience to natural hazards and interdependencies, review of risk management strategies and updating of risk management programmes.

Assessment of growth and demand projections to determine future property requirements (July – November 2017).

Preparation and review of AMP budget forecasts to inform the 10 Year Plan (July - November 2017).

Internal Peer Review and finalisation of AMPs (December 2017 to January 2018). External peer review (February 2018). Formal reporting of AMPs to the Council.

Any variations between the respective AMPs and the 2018-28 10 Year Plan will be the subject of a report to Council following adoption of the 10 Year Plan in June 2018.

This AMP has been prepared as a team effort by officers dedicated to and trained in AM Planning. This team has been supervised and the AMP internally reviewed by professional Council staff having over 10 years’ experience in preparing AMPs. An external peer review has been undertaken by AECOM Ltd.

1.4 Changes to AMP Since 2014

Asset management is a process of continuous improvement, contiguous with development of and changes to Council’s strategic environment and improved knowledge of asset condition and performance to achieve agreed levels of service.

Key changes to the AMP since 2014 are as follows:

Development of capital new and operational programmes to align with Council’s new Vision, Small city benefits, Big city ambitions and associated goals and strategies and the outcomes that the Council is seeking to achieve. (Section 3)


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Adjustments to the levels of service to be delivered to the community through level of service review and development of Council’s strategy plans. (Section 4)

Revised schedule of development works for growth for both residential and industrial growth arising out of higher population growth projections - a high growth scenario for years 1-10 and a medium growth scenario for years 11-30. This requires infrastructure for a greater number of households over 30 years than previously. (Section 5)

Reassessment of demand for services as a result of higher population and household projections. (Section 5)

Updating of the risk and resilience section. (Section 7) Improvements to asset management processes, particularly the introduction of the Programme

Planning and Implementation process. This is to ensure that the programmes in this plan are supported by more robust information.

1.5 Navigating the AMP

This AMP comprises a series of logical steps that sequentially and collectively build the framework for sustainable asset management for the activity it serves. The plan contains three main sections. It first describes what the plan is about and the activity it relates to. The second section is about the drivers that influence and set the direction for asset management. The third section describes out the level of service and strategic outcomes are achieved through managing and developing the assets.


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AMP at a Glance(Executive Summary)

Overview (Section 1.0)Purpose of AMP, relationship to other planning documents, AMP review processes &

navigation

The Activity (Section 2.0)Purpose, description & rational of activity, Custemers/Users, Key relationships for

management of activity, significant changes and negative effects associated with activity.

The Strategic Environment (Section 3.0)Strategic context (internal & external) to determine key outcomes sought.

Strategic assessment to identify problems and benefitrs within the overall strategic context & the outcomes desired.

Levels of Service (Section 4.0)The review process followed and the qualities of the service that Council intends to deliver to

the Community

Growth & Demand (Section 5.0)The growth and demand factors impacting on the capacity and levels of service provided by

the assets over 30 years

Assets & Lifecycle Management (Section 6.0)Plans detailing how the assets are to be managed, operated, maintained, renewed and

developed to provide the required level of service over the asset life.

Risk and Resilience (Section 7.0)Risks identified that may affect the ongoing delivery of services from Council’s infrastructure

and resilience to natural disaster

Sustainability (Section 8.0)Identification of key sustainability issues and linkage to Council’s strategies

Financial Projections (Section 9.0)Outlines the long-term (30yr) financial projections for operating, maintaining, renewing and

developing the assets. Asset valuation and reliability of estimates.

Assumptions (Section 10.0)Key assumptions used in developing asset lifecycle programmes and impact of variations from

these assumptions

Improvement Plan (Section 11.0)Initiatives to make improvements to asset management planning over the next 3 years and to

inform the next AMP review

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Figure 2: AMP Structure

Section 2 – The Activity Asset Management Plan 2017 – Property

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2 The Activity

2.1 Activity Description

The Council owns, maintains, and manages a range of property around the City. They have a range of purposes including:

Meeting accommodation needs of Council activities. Providing for cultural events. Encouraging visitors and business to the city. Providing housing options for low and limited income residents. Maintaining strategic options available to the Council.

The property activities comprises of owning, maintaining and managing a range of properties around the City. This AMP covers all of the assets outlined below:

Operational Properties 2.1.1 Civic Administration Building Convention Centre Information Centre

Dog Pound Depot

Cultural Facilities 2.1.2 Regent Theatre Te Manawa Science Centre, Museum and

Art Gallery Libraries – Central, Ashhurst and Te

Pātikitiki Keith Street Power Station

Globe Theatre Caccia Birch Square Edge including the Old Workshop Creative Sounds (aka The Stomach)

Social Housing 2.1.3 403 units in 18 locations around the city.

Strategic Properties 2.1.4 84 Waldegrave Street. 7, 9 and 11 Oakley Street. Council is currently in the process of investigating purchasing 103 Cuba Street and 78, 80

Waldergrave Street as strategic holdings for future Central Energy Trust Arena Manawatu development in addition to the holdings on Oakley and Waldergrave Streets above.

Investment Properties 2.1.5 Regent Theatre shops. Library Shops. Civic Centre Shops.

Holiday Park. Gordon Kear Forest.

Reserve Leasehold Properties 2.1.6 553 Ruahine Street.

Community Centre and Community Agency Housing 2.1.7


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Womans Centre - 53 Waldegrave Street Red Cross Building – Works Pit Ashhurst

Hancock House – King Street

Community Centres: Ashhurst Village Valley Centre Awapuni Highbury Whanau Centre Kelvin Grove

Milson Rangiora Palmerston North Leisure Centre Westbrook

2.2 Activity Rationale

Local authorities exist principally to meet the current and future needs of communities for good-quality local infrastructure, local public services, and performance of regulatory functions in a way that is most cost-effective for households and businesses. Core services in performing this role include libraries, museums, reserve, and other recreational facilities and community amenities.

The services provided, and how they are provided, depend on the level of service required by the community.

The Council has identified its strategic assets as:

Social Housing as a whole. That portion of the Civic Administration Building sited on the Square. Te Manawa. The Regent Theatre. City Library (including branch libraries and mobile library) as a whole. Community Centres as a whole.

Under the provisions of the Local Government Act 2002, Council cannot transfer ownership or control of a strategic asset, or construct, replace, or abandon a strategic asset unless it has first consulted with the community and included the proposal in its operative 10 Year Plan.

Council intends to continue with its present involvement in the Property assets and this AMP has been developed on the basis of continuing Council ownership of the assets.

The objectives for the Property assets are to:

Provide accommodation needs of Council activities so that key services can be delivered; Provide, maintain, and promote spaces and facilities for people to pursue arts and cultural activities; Promote the City as a whole by providing venues for arts, culture, entertainment, and business

facilities which attract visitors to the City; Provide places to meet and foster community identity, including housing options for low and limited

income residents; Provide a revenue stream to offset the cost of other Council activities; and Ensure the maintenance of strategic options available to Council.

The services provided by the Property activities contribute to the goals adopted by Council for the City in the following manner:

Table 1: Activity Linkages to City Goals


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City Goals Activity Contribution

An innovative and growing city – Goal 1 Investment Properties provide an income stream to offset some of the costs of other activities.

Operational Properties provide facilities that allow Council to carry out activities that support businesses.

A Creative and exciting city – Goal 2 Cultural properties house art galleries, museums, theatres, libraries, and other learning and leisure activities.

Operational Properties provide the capacity for Council to provide various activities that improve safety and provide cultural, social, and recreational opportunities.

A connective and safe community – Goal 3 Social Housing provides sustainable accommodation for selected groups that need assistance.

Community facilities enable people to come together and enhance their lifestyle and opportunities.

An eco-city – Goal 4 Property upgrade designs seek to improve long term environmental sustainability.

A driven and enabling council – Goal 5 Operational properties support delivery of council services and customer service.

The key goal areas are Goals 2, 3 and 4 which are expanded on in Section 3

2.3 Significant Negative Effects of the Activity

The potential significant negative effects of the property activity are:

Increased built environment and resource consumption. Periodic increase in demand on the transportation network (increased traffic flows and parking

needs). Buildings susceptibility to major earthquake damage.

Council mitigates these potential adverse effects through a mix of planning, regulatory measures, public education, monitoring, corrective work, and emergency response procedures.

Overall, the significance of the above negative effects is minor. The majority of Property assets are existing with new capital development relatively minor. Transportation and parking requirements associated with the property assets are already catered for within the Transport Activity.

The negative effects of earthquake prone buildings will be managed by a strengthening programme over the next 7 years, meeting or exceeding the minimal legislated standards.

2.4 LGA s17A Review

Under s17A of the LG Act Local Authorities have to review the cost effectiveness of their arrangements for meeting the needs of their communities for good quality local infrastructure, public services and regulatory functions. This includes considering options for the governance, funding and delivery of infrastructure and services.

Libraries and Community Centres 2.4.1

In June 2016 Council decided that they would carry out a s17A review for Libraries and Community Centres by 7 August 2017.

Section 2 – The Activity Asset Management Plan 2017 - Property

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After undertaking a high level review the Council decided that a more resource intensive review was not warranted and that Library and Community Centres as whole should be governed and funded by the Council.

Arts and Culture Facilities 2.4.2

In June 2016 Council decided that they would carry out a s17A review for Arts and Culture facilities centres by 7 August 2017.

After undertaking a high level review the Council decided that further review be carried out into the best governance, funding and service delivery model for Arts and Culture. That review is still to be carried out.

Social Housing 2.4.3

In June 2016 Council decided that previous reviews of social housing met the intent of s17A and no further review before August 2017 was required.

2.5 Significant Changes to the Activity

No significant changes to the Property activities are proposed in this plan.

Section 3 – Strategic Environment Asset Management Plan 2017 – Property

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3 Strategic Environment This section sets out the strategic environment within which the property assets are managed outlining the:

Internal Strategic Context (Palmerston North City Council Vision, Goals, Strategies & Plans) External Strategic Context (Legislative environment, Statutory requirements) Asset Management Strategy and Policy

3.1 Council Vision, Goals & Strategic Direction

The Council Vision for Palmerston North is:

“Small city benefits, Big city ambition.”

Supported by 5 strategic goals:

Goal 1: An innovative and growing city. Goal 2: A creative and exciting city. Goal 3: A connected and safe community. Goal 4: An eco-city. Goal 5: A driven and enabling council.

To achieve the vision and goals, the Council has developed a number of strategies, each with specific priorities and associated strategy plans (including actions that link to specific programmes). The Plans most relevant to this AMP are highlighted in Table 2.

Table 2: Property Activity contribution to City Goals

City Goals City Strategies Priorities Strategy Plans

An innovative and growing city

Economic Development Strategy

Create and enable opportunities for employment and growth.

Provide infrastructure to enable growth, and a transport system that links people and opportunities.

Diversify the economy to reduce reliance on our traditional industries.

Support an ‘innovative economy’ to underpin growth into the future.

Transform the economy to a low carbon economy.

Economic Development

International Relations

City Development Strategy

Create and enable opportunities for employment and growth.

Provide infrastructure to enable growth, and a transport system that links people and opportunities.

District plan Housing and future

development Strategic partnerships Urban design Heritage

management Infrastructure Strategic transport

A creative and exciting city

Creative and Liveable City Strategy

Create a city that has great places for all people, and particularly families.

Celebrate the city’s history and diversity, and build on the strength of being a city of many cultures and languages.

Develop the city into an arts powerhouse with a national reputation for creativity and the arts.

City centre Manawatu River Place making Arts Events and festivals Palmy Unleashed


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City Goals City Strategies Priorities Strategy Plans

Develop a national and international reputation as an exciting city that has plenty of things to do at night and on the weekend.

Have the most active community in New Zealand.

Active Communities Culture and heritage Public and active

transport

A connected and safe community

Connected Community Strategy

Develop, provide, and advocate for services and facilities that create a connected, welcoming, and inclusive community.

Ensure we have a healthy community where everyone has access to health, safe and affordable housing, and neighbourhoods.

Build community capacity to take ownership and encourage community leadership of solutions, including better co-ordination between community organisations and groups.

Become a city where people feel safe and are safe.

Community services and facilities

Social housing Healthy community Community support Active citizenship Safe community

An eco-city Eco City Strategy Respect and enhance the mauri of the Manawatu River.

Work with the community to reduce carbon emissions. Regenerate native biodiversity. Invest in infrastructure that serves to protect, enhance,

and preserve our environment. Use our legislative powers and policies to ensure that

urban development is sustainable now and into the future.

Educate the community, in particular, property owners, on the benefits of investing in sustainable building design and green buildings.

Demonstrate leadership and best practice by developing and implementing an environmental sustainability plan for the Council.

Biodiversity Three Waters Waste Energy Sustainable practices

plan

Underpinning the city’s vision, goals, strategies, and plans are the following strategic themes that guide the way in which the outcomes and actions are delivered:

Smart city practices – use smart systems, processes, and tools. Sustainable practices – embed sustainable design and behaviours. Iwi partnerships – work collaboratively with iwi partners. Strategic Partnerships – work collaboratively with key strategic partners.

The Property activities support Council achieving its strategic goals through the strategy plans identified in the Table 2 as follows:

Community Services and Facilities Plan 3.1.1

The purpose of Community Services and Facilities Plan is:

“To develop, provide and advocate for services and facilities that create a connected, welcoming and inclusive community where people are connected with each other and the services, facilities and support they need to prosper (Priority 1, Connected Community Strategy).”

The Community Services and Facilities Plan identify where Council is now, where Council wants to be, and how Council is going to get there, through specific actions and programmes (linking to Council’s 10 Year Plan).

The Key directions from this plan for this AMP include:

Providing library spaces that are accessible, suit the community, and are well maintained.


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Any new facilities are developed in partnership to provide integrated services. Bunnythorpe, Kelvin Grove and Te Pātikitiki Community Facilities are developed. Implement the Library of the Future redevelopment.

Social Housing Plan 3.1.2

The purpose of the Social Housing Plan is:

“To ensure we have a healthy community where everyone has access to healthy, safe and affordable housing and neighbourhoods (Priority 2, Connected Community Strategy).”

The Social Housing Plan identifies where Council is now, where Council wants to be, and how Council is going to get there, through specific actions and programmes (linking to Council’s 10 Year Plan).


Providing housing that is cost effective. Increasing (directly or in partnership) the amount of social housing in Palmerston North. Upgrade the Papaioea housing complex. Build new social housing. Agree a future model of social housing delivery.

Energy Plan 3.1.3

The purpose of the Energy Plan is:

“To contribute to demonstrating leadership and best practice by developing and implementing an environmental sustainability plan for the Council, Council run events and facilities.”

The Energy Plan identifies where Council is now, where Council wants to be, and how Council is going to get there, through specific actions and programmes (linking to Council’s 10 Year Plan).


New buildings are designed to be energy efficient. Building upgrades target improved energy efficiency. Facilities are comfortable, fit for purpose and meet relevant technical standards.

Arts Plan 3.1.4

The purpose of this Arts Plan is:

“To develop the city into an arts powerhouse with a national reputation for creativity and the arts (Priority 3: Creative and Liveable Strategy).”


Deliver property asset management, maintenance, and renewal of arts facilities. Provide a resilient and cutting edge space(s) for Te Manawa that is fit for the purpose of housing

and displaying arts, heritage, Toi Māori and treasures, and science public assets. Develop plans for the seismic strengthening and enhancing the city’s existing arts and cultural

buildings to achieve the Council’s aspirations and meet the community’s needs.


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Culture and Heritage Plan 3.1.5

The purpose of the Culture and Heritage Plan is:

“To celebrate the city's history and diversity, and build on the strength of being a city of many cultures and languages (Priority 2, Creative and Liveable Strategy).”

The key directions from this plan for the AMP include:

Adopt the value of cultural heritage awareness in the delivery of Council activities, whether place making, plan making, or asset management.

Investigate opportunities to develop and add value to Council heritage buildings and sites. Include heritage conservation principles in Council Asset Management decisions. Include heritage story-telling in the delivery of major Council projects.

Infrastructure Strategy 3.1.6

The Local Government Act 2002 Amendment Act 2014 introduced a requirement for Council to prepare and adopt, as part of its 10 Year Plan, an infrastructure strategy covering a 30 year planning period.

This AMP is an integral document in informing the Infrastructure Strategy. Table 3 describes the linkages between this AMP and the component parts of the Infrastructure Strategy.

Table 3: AMP Linkages to the Infrastructure Strategy

Infrastructure Strategy s.101B LGA 2002 Asset Management Plan

Paragraph No. Description Reference

2a & b Significant infrastructure issues & options Sections 4.0, 5.0, 6.0 & 9.0

3a Renewals and replacements Sections 6.0 & 9.0

3b Growth or decline Sections 5.0, 6.0 & 9.0

3c Changes to LOS Sections 4.0 and 6.0

3d Maintain or improve public health & environmental outcomes or mitigate adverse effects

Sections 3.0, 4.0, 6.0, 7.0, 8.0 & 9.0

3e Resilience of infrastructure relating to natural hazards Sections 6.0, 7.0, 9.0 and 11.0

4a Estimates of capital and operating expenditure Section 9.0

4b Significant decisions about capital expenditure Sections 6.0 and 9.0

4c & d Assumptions & uncertainty Section 10.0

3.2 Statutory and Regulatory Requirements

The key legislation relating to the management of the Property activities are listed below. The statutory requirements provide Council with a minimum level of service standard and have been reflected in the levels of service shown in Section 4 and Appendix C. Council is currently complying with all legislative requirements:

Local Government Act 2002 Amendment Act 2014. Resource Management Act 1991. Health and Safety Amendment Act 2002 Building Act. Public Works Act 1981. Public Bodies Contracts Act 1959 - confers on a local authority similar powers to enter contracts as

enjoyed by corporate bodies or natural persons.


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Resource consent requirements for example issued by the Manawatu-Wanganui Regional Council for the Gordon Kear Forest.

Palmerston North Reserves Empowering Act (1966). Residential Tenancies Act1986 (reprinted 2014).

There are no current bylaws enacted by Council relating to property services.

3.3 Asset Management Policy

Asset are managed so as to meet the asset management objectives set out below by applying the AM Strategy.

Objectives 3.3.1 To have a consistent approach across all asset classes within the Council. AMPs reflect the strategic direction of the Council (including the financial strategy). To manage the assets in a sustainable manner in order to deliver the required level of service to the

present and future generations. Assets are managed cost effectively in accordance with sound risk management, environmental

management practice, and statutory and regulatory requirements. That there is continual improvement of asset management practice in the organisation. To have up to date AMPs that reflect a multidisciplinary approach across the organisation to inform

the 10 Year Plan process. That asset management performance can be demonstrated to the Council and community. That AM Policy and Strategy is approved by Management Team and that AMPs are adopted by the

Council to inform the 10 Year Plan.

Asset Management Strategy 3.3.2

This Asset Management Strategy sets out the approach to organising and practising asset management so as to achieve the asset management objectives for the different Asset Management inputs as set out below.

Planning strategy

30 Year Infrastructure Strategy

A 30 year Infrastructure Strategy will be completed as part of the 10 Year Plan process and will reflect the Council’s vision and strategy and provide a combined view of the asset programmes that are required to achieve this. It will show a clear linkage between the strategies and the programmes required to achieve the strategies. The Strategy will reflect the decisions made by the Council through the 10 Year Plan process.

Asset Management Plans

AMPs will be reviewed at 3 yearly intervals to align with the 10 Year Plan planning process and cover a 30 year planning period. AMPs will reflect the strategic and financial direction of the Council and be integrated with other Council planning documents. Differences to AMP programmes and those approved in the 10 Year Plan will be reported to the Council, together with the asset and service implications.


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There will be further development of the concept of maintaining the AMP as a ‘living document’ that more accurately reflects the current policies and decisions of the Council.

Levels of Service

A review of the Levels of Service (LoS) that is to be provided will be undertaken in conjunction with the AMP review to reflect any changes that Council may wish to make. The review will be informed by community satisfaction and submissions received over the previous 3 years, and Council direction. Engagement with the community on options will be undertaken for specific significant projects as they arise in accordance with the Council’s Community Engagement Strategy. The review will inform the levels of service adopted by the Council.

Capital New Planning

Capital works planning will be based on a sound understanding of the need and timing for the asset, based on demand forecasts and implementation of Council’s strategic and financial direction. Documentation will be provided for justification of each programme.

Programme estimating will incorporate full project costs to complete the asset, identify full life cycle costs, and risks associated with the programme. The need for works to accommodate growth will be reviewed on an annual basis to take into account any changes to the anticipated growth rates or other demand drivers.

Capital Renewal Planning

Renewal planning will be based on a sound understanding of the condition and performance of the asset and aim to maintain the current overall service potential of the asset. The renewal programme will also aim to smooth out, where possible, the financial impact from year to year.

Maintenance and Operational Planning

Maintenance and operational planning will be reviewed on an annual basis, but with particular focus at the AMP review as to whether the most cost effective delivery mechanisms are in place. This will also take account of any Council direction arising out of the LGA 17A reviews.

Service agreements with contractors will contain performance measures consistent with the AMP and Activity KPIs to achieve alignment from the operational level to the 10 Year Plan KPIs.

Demand forecasts

Demand forecasts will take into account population, household and economic growth projections, social and demographic data, technological advances, and other relevant data.

Demand management

Demand management options will also be considered when planning to meet growth and to ensure projects qualify for any external financial assistance.

Optimised decision making

ODM techniques will be used for decisions related to significant projects.


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Risk & Resilience

Risk exposure will be managed through:

An annual review of the risk management plan and implementing risk mitigation measures where risk exposure is incompatible with corporate risk policy.

Undertaking performance and condition monitoring of critical assets.

Resilience of Council’s critical assets to natural hazards will be assessed and programmes prepared to mitigate risk to an acceptable level.

Information systems

Data collection programmes (condition, asset performance, registers, and service performance) will be closely aligned to the nature and scale of the assets, and to tracking achievement of service targets.

Asset management system functionality will be progressively developed to meet the requirements of advanced asset management planning.

Asset Revaluation

Asset revaluation will be undertaken in conjunction with City Corporate staff on a 3 yearly timeframe.

Continuous Improvement

An improvement programme will be included with each AMP review, setting out the areas of improvement required to practices, systems, processes, and plans in the following 3 years with identified tasks and budgets. This will be part of the ongoing improvement programme in the City Networks Unit.

Organisational Capacity and Development

Adequate resources will be allocated to asset management to ensure that asset management practices can be undertaken to meet the requirement for robust asset management plans and work programmes. Asset management capabilities will be developed to practice advanced asset management techniques.

Monitoring and reporting on level of service performance measures.

Those level of service measures that are adopted by the Council as KPIs will be reported through quarterly Annual Budget reports. Other LoS performance measures will be reported quarterly to the City Networks Executive Team (CNET).

Section 4 – Level of Service Asset Management Plan 2017 – Property

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4 Level of Service This section defines the level of service, or the qualities of the service, that the Council intends to deliver, and the measures used to monitor this. The adopted levels of service are used to define the programmes to achieve the Council’s strategic goals and are based on user expectations and statutory requirements.

4.1 Introduction

A key objective of this AMP is to match the level of service provided by the asset with the expectations of the users of the service. This requires a clear understanding of user needs and preferences. The levels of service defined in this section will be used:

To inform users of the proposed type and level of service to be offered. As a focus for the AM strategies developed to deliver the required level of service. As a measure of the effectiveness of this AMP. To identify the costs and benefits of the services offered. To enable users to assess the suitability, affordability and equity of the services offered.

Levels of Service for the Property activity are based on:

Strategic goals (See Section 3.1). The adopted levels of service indicators and measures presented in Appendix C have been

grouped into two categories: Customer performance measures: These are measures of the overall activity, covering the

aspects of service that are of most interest to the community, and community satisfaction indicators. They include the government mandated non-financial performance measures to be included in the 2018-2028 10 Year Plan. Some of the customer performance measures presented in Section 4.4 are expected to be included for community consultation in the consultation document and publicly reported against in each Annual Report.

Technical performance measures: These are additional measures adopted to ensure that the customer performance measures are robustly achieved. They are used as a management tool and measured and reported internally.

4.2 Community Input and Decision Making Process

The levels of service upon which this plan is based have been derived from an on-going process of community consultation and consideration of levels of service (LoS) options by the Council over a significant period of time.

During 2005, an extensive LoS review was undertaken, which engaged with a broad cross-section of the community to understand how well existing services were meeting user needs, and what improvements were desired for the future. Specifically, the review set out to ascertain views on:

The current levels of service provided by the Council. The desired future levels of service. Aspects of the services by which the quality of the services can be assessed.


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At that time, a greater user focus was introduced to the measures. This was reflected by having statements of the service provided to each of the key user groups, and performance measures that reflected the user view of the services provided.

Subsequently LoS reviews have been undertaken for each AMP review, in which information about LoS received from the community through local, Communitrak surveys, service requests, and Annual Budget submissions, has been presented to the Council in order to inform any changes that it may wish to make to the LoS delivered to the community. Generally, only minor adjustments have been made since 2005.

For this AMP level of service workshops were held with Councillors on 30th October 2017. Information about the current LoS, together with community feedback, was presented to the Councillors. Councillors were asked to:

Consider whether the current LoS was about right, and what changes, if any, were required Give direction on some specific LoS issues important to the activity

Generally, the Councillors considered the LoS to be about right. However, the following LoS matters were raised during the workshop and are taken account of in this AMP, as indicated in Table 4.

Table 4: Matters raised at Councillor LoS Workshop

Matters raised at Councillor LOS workshops 30 October How these are included in this AMP

Review of the efficiency and options for use of several underused or potentially inefficiently used properties including: Alberts Street Depot. Totara Road Industrial site. Civic Administration Building. Affordable housing options viability needs to be

considered at Opie Reserve and former Kelvin Grove Cemetery.

Operational Programmes added to prepare feasibility and business case work: Prog 1507 Albert St depot. Prog 1508 Totara Road. Prog 1509 Civic Admin Building. Prog 1511 Affordable housing development. Prog 1505 Papaioea Housing Stage 2 investigations

added.

Review of the Holiday Park and planning for it future. Prog 1510 plan development added.

Communication with tenants needs to be improved. Referred to relevant staff.

Assets need to be assessed for hazards including asbestos, fire protection and seismic restraints.

Programme 1405 added for citywide property asbestos surveying.

Fire protection is covered by building WOF and consent requirements.

Programmes 902 and 1016 cover seismic strengthening of Council owned Property buildings.

As part of the development of Council’s strategic direction, a number of Strategy Plans were developed during July and August 2017 (see Section 3). Some of the actions set out in these Strategy Plans have LoS implications for this AMP. These are shown in Table 5.


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Table 5: LoS actions arising from Council Strategy Plans

LOS actions arising from Council Strategy Plans

July – August 2017 How these are included in this AMP

Community Services and Facilities Plan

Any new facilities are developed in partnership to provide integrated services.

Bunnythorpe, Kelvin Grove, and Te Pātikitiki Facilities are developed.

Implement the Library of the Future redevelopment.

Kelvin Grove Community Hub feasibility work covered integrated services assessments.

Programme 234 Changing room renewal budget combined with new capital budget in Programme 1413 for community hall development in Bunnythorpe.

Renewals assumptions for the Te Patikitiki current building on Monrad Park will be reviewed when decisions confirmed on its future use or sale when library relocated into leased space.

Social Housing Plan

Increasing (directly or in partnership) the amount of social housing in Palmerston North.

Upgrade the Papaioea housing complex. Build new social housing. Agree a future model of social housing delivery.

Programme 1219 added to develop additional social housing units at the Papaioea complex.

Programme 357 for Papaioea upgrades. Programme 1459 amended from bedsit conversion

redevelopment work to additional social housing units.

Energy Plan

New buildings are designed to be energy efficient. Building upgrades target improved energy efficiency. Facilities are comfortable, fit for purpose, and meet

relevant technical standards.

Significant housing renewal and capital development programmes allow for energy efficiency, e.g. insulation and glazing.

Arts Plan

Provide a resilient and cutting edge space(s) for Te Manawa that is fit for the purpose of housing and displaying arts, heritage, Toi Māori and treasures, and science public assets.

Develop plans for the seismic strengthening and enhancing the city’s existing arts and cultural buildings to achieve the Council’s aspirations and meet the community’s needs.

Programme 1460 covers Option A of the proposed Te Manawa upgrade.

Programme 902 covers seismic strengthening of arts and culture buildings.

Culture and Heritage Plan

Adopt the value of cultural heritage awareness in the delivery of Council activities, whether placemaking, plan making, or asset management. Investigate opportunities to develop and add value to

Council heritage buildings and sites. Include heritage conservation principles in Council Asset

Management decisions. Include heritage story-telling in the delivery of major

Council projects.

Develop programmes in the 2020 AMP following outcomes of the opportunity investigations (within existing budgets).

Scoping stages of projects that involve heritage to include incorporation of heritage research and values.

Review major property projects for the 2020 AMP to include heritage storytelling.

4.3 Communication of Levels of Service and Performance Measures

Council’s adopted levels of service and key performance measures will be publicly communicated through the proposed 2018-28 10 Year Plan.


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4.4 Current and Future Levels of Service & Performance Measures

Customer Segmentation 4.4.1

Table 6 shows the linkage between customer user group, the level of service for each activity area, and the linkage to the programmes that link to the level of service.

Table 6: Customer segmentation, levels of service and linkage to goals

Activity area User Group Target Level of Service Programmes that Contribute to this Level of Service

Operational Properties General Public Operational buildings are accessible and well maintained. Cleaning and maintenance contracts in place and regularly monitored.

Council Staff/Tenants Provision of buildings which are suitable for their intended use, with support and maintenance provided by Council in accordance with agreed levels of service.

Cleaning and maintenance contracts in place and regularly monitored. Renewal programmes planned and implemented.

Cultural Facilities General Public Cultural Facilities are accessible and well maintained. Maintenance contracts are in place and regularly monitored.

Tenants Provision of buildings which are suitable for their intended use (i.e. Fit for Purpose), with support and maintenance provided by Council in accordance with agreed levels of service.

Maintenance contracts are in place and regularly monitored. Renewal Programmes planned and implemented.

Social Housing Tenants Housing units are warm and safe Maintenance contracts are in place and regularly monitored. Renewal Programmes planned and implemented.

Tenants Units are designed and maintained to meet tenants needs and tenants consider the unit they occupy to be their home.


Tenant’s family/ support persons

Tenants are well supported by Council’s tenancy services. 24 hour support/maintenance phone line for all Social Housing tenants. Annual maintenance inspections are scheduled and carried out.

Tenants Otago Medical School He Kainga Oranga Rental Warrant of Witness Standard is met.

Maintenance contracts are in place, including annual inspection of WOF standards.

Investment properties General Public Investment properties are accessible and well maintained. Maintenance contracts are in place and regularly monitored.

Tenants Provision of buildings that meet business needs at a market related price.

Dedicated Council Officer to manage this portfolio.

Reserve Leasehold Land

Leaseholders Council operates a fair and transparent process for setting lease rentals.

Dedicated Council Officer to manage this portfolio.

Forestry Recreation Public The forest is available for a recreational use on a restricted access basis.

A management agreement defines restricted public access.


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Activity area User Group Target Level of Service Programmes that Contribute to this Level of Service

Council/ partners The forest is managed in a manner which maximises potential future yields of quality timber for the least cost.

Operational management.

Community Centres and Community Agency Housing

All residents Provision of suitable buildings fitted out to meet local community needs.


Hall Management Committees

Maintenance of halls and support provided by Council is in accordance with agreed levels of service.

Maintenance contracts are in place and regularly monitored. Renewal Programmes planned and implemented. 24 hour maintenance phone line for all Community Centre buildings. Annual maintenance inspections carried out.


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Key Performance Indicators 4.4.2Table 7: Key Performance Indicators

Key Service Criteria User Group Customer Level of Service Customer Performance Measure Current Performance Performance Targets 2018 - 2028

Quality Tenants, user groups and general public

The Council’s building assets are maintained in good condition and are well presented, appropriate to the type and level of use.

% of tenants satisfied or very satisfied with the quality of the Council’s social housing.

97% satisfied in 2016 up from 89% in 2014.

>95%

% of tenants, user groups, and occupiers satisfied or very satisfied with the appearance and presentation of the Council’s public buildings.

Communitrak survey satisfaction in 2016 with: Regent – 99% Te Manawa – 98% Library – 98% For trends refer Appendix C.

>95%

% of tenants, user groups, and occupiers satisfied or very satisfied with the healthiness and safety of the Council’s public buildings.

Not measured 75%

% of tenants, user groups, and occupiers satisfied or very satisfied with the “fitness for purpose” of the Council’s public buildings.

Not measured 75%

% of tenants, user groups, and occupiers satisfied or very satisfied with accessibility to the Council’s public buildings.

Not measured 75%

Safety Tenants, user groups and general public

The Council’s buildings are safe to use and meet appropriate building standards.

Public buildings comply with building warrant of fitness requirements.

100% 100%

Availability Tenants, user groups and general public

The Council’s buildings are available for use by occupants in accordance with levels of service as set out in: Residential tenancy agreement; Deed of lease for Recreation and

Commercial properties; and Contractual arrangements with

Council Controlled Organisations.

Buildings are available for the agreed time.

Not measured 100%

Planned closures of Council’s buildings Amount of advance notice of closure or Not measured 90 clear days for


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Key Service Criteria User Group Customer Level of Service Customer Performance Measure Current Performance Performance Targets 2018 - 2028

that cause disruption to daily activities or living circumstance are communicated to occupants and/or public in a timely way.

partial closure to occupants or users. (N.B. planned closures or partial closures are undertaken outside of any hours of normal occupancy to the greatest practicable extent.)

residential properties, four weeks for all other properties

Sustainability Tenants, user groups and general public

The Council’s cultural, investment and operational properties, rental and social housing, and community facilities, are maintained for current and future needs.

A 30 year asset management plan is in place that has been reviewed and updated at 3-yearly intervals, and independently peer reviewed.

Asset Management Plan (AMP) reviewed in 2017

AMP in place (key projects from AMP will be outlined)

Responsiveness Tenants, user groups and general public

The Council responds to requests for service from tenants and occupants in a timely way.

Response time to requests for service (RFS) were responded to within the allotted times.

Overall averages of 89% were responded to within the time allocated, up from 81% in 2014. 2017 results were: Operational - 77% up from 74% Cultural – 93% up from 79% Housing 98% up from 91% Community Centres – 82% up from

81% Investment – 83% up from 68% Community Agency Housing 100%

up from 83% Refer Appendix C for trends.

95% within allotted time

Financial Management

Tenants, user groups and general public

The Council manages its property assets in a financially sustainable way.

The Council’s levels of service are delivered within net budget.

Overall Property 1% over budget in 2016/2017 Controllable budget $5,033,197 Actual spend $5,082,808 Refer Appendix C for detail by individual property activities and trends.

100% within budget

Legislative Tenants, user groups and general public

Building WoF requirements are met. Met Fire safety upgrades planned as part of renewals work.

100% WoF met

Section 5 – Growth and Demand Asset Management Plan 2017 – Property

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Future Changes to Current Level of Service 4.4.3Table 8: Future changes to Level of Service by Property Activity

Property activity Level of Service change

Operational Properties Improvements to the responsiveness to requests for service and complaints. Earthquake strengthening of CAB and Depot Programme 902 – $2.184 million. Possible relocation of the depot (subject to further feasibility).

Cultural Properties Earthquake Strengthening Programme 902 (Square Edge, Keith St Power Station) – $1.451 million.

Fire safety upgrades Programme 213 (Square Edge, Globe theatre, Te Manawa, Caccia Birch) – $280,000.

Library HVAC Programme 213 – $300,000. Programme 1460 covers Option A of the proposed Te Manawa upgrade. The previously planned “Library of the Future” upgrade project has been reduced to

watertightness HVAC work and seismic restraints.

Social Housing Upgraded Papaioea Complex – Programme 357 – $5 million. Provide additional Social Housing units – Programme 1219 – $4.0 million. Note: as per 2015, Social Housing Strategy Council no longer provides Public Rental Housing. The housing stock has been transferred to the Social Housing portfolio (previously described as Community Housing).

Investment Properties Development of a masterplan for the Holiday Park to be considered in the 2020 AMP.

Reserve Leasehold Properties

No change – Council policy is to sell the leasehold properties to the leases.

Strategic Properties Purchase of strategic properties for CET Arena Manawatu Masterplan implementation underway at time of writing this plan.

Forestry Properties No change.

Community Centres and Community Agency Housing

Providing two new centres in urban growth areas and a centre in Bunnythorpe. Kelvin Grove Programme 342 ($4 million of which $2 million is externally sourced and with

separate fitout under library budgets Programme 300 for $200,000). City West Programme 1130 – $4.875 million subject to $2 mi