Version 2 April 2019 - cdn.mitchellshire.vic.gov.au...the service experience of user groups, ... Space asset condition audits and ensure they ... The south of the Shire falls within

Version 2 April 2019

Mitchell Shire Council – PARKS AND OPEN SPACE ASSET MANAGEMENT PLAN 2

Document Control

Asset Management Plan

Document ID : NAMS>PLUS Concise Asset Management Plan Template v 3.116

Rev No Date Revision Details Author Reviewer Approver

1 2008

2 April 2019 Use of NAMS>Plus templates MF NM LE

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

http://www.ipwea.org/namsplus


TABLE OF CONTENTS

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

2. INTRODUCTION ........................................................................................................................... 4 2.1 Background ............................................................................................................................ 4 2.2 Goals and Objectives of Asset Ownership ......................................................................... 5

3. LEVELS OF SERVICE ................................................................................................................. 6 3.1 Customer Research and Expectations................................................................................ 6 3.2 Strategic and Corporate Goals ............................................................................................ 6 3.3 Legislative Requirements ..................................................................................................... 9 3.4 Customer Levels of Service ............................................................................................... 10 3.5 Technical Levels of Service ............................................................................................... 13

4. FUTURE DEMAND ..................................................................................................................... 15 4.1 Demand Drivers................................................................................................................... 15 4.2 Demand Impact on Assets ................................................................................................. 15 4.4 Demand Management Plan ............................................................................................... 17 4.5 Asset Programs to meet Demand ..................................................................................... 19

5. LIFECYCLE MANAGEMENT PLAN .......................................................................................... 19 5.1 Background Data ................................................................................................................. 20 5.2 Operations and Maintenance Plan .................................................................................... 22 5.3 Renewal/Replacement Plan ............................................................................................... 24 5.4 Creation/Acquisition/Upgrade Plan.................................................................................... 26 5.5 Disposal Plan ....................................................................................................................... 28

6. RISK MANAGEMENT PLAN ...................................................................................................... 28 6.1 Critical Assets ...................................................................................................................... 28 6.2 Risk Assessment ................................................................................................................. 29

7. FINANCIAL SUMMARY.............................................................................................................. 30 7.1 Financial Statements and Projections ............................................................................... 30 7.2 Funding Strategy ................................................................................................................. 31 7.3 Valuation Forecasts ............................................................................................................ 31 7.4 Key Assumptions Made in Financial Forecasts ............................................................... 33 7.5 Forecast Reliability and Confidence .................................................................................. 33

8. PLAN IMPROVEMENT AND MONITORING ........................................................................... 34 8.1 Status of Asset Management Practices ............................................................................ 34 8.2 Improvement Plan ............................................................................................................... 35 8.3 Monitoring and Review Procedures .................................................................................. 36 8.4 Performance Measures ...................................................................................................... 36

9. REFERENCES ............................................................................................................................ 36


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1 EXECUTIVE SUMMARY

1.1 The Purpose of the Plan This asset management plan (AMP) details information about Parks and Open Space (P&OS) infrastructure assets including the actions required to provide an agreed level of service in the most cost-effective manner while outlining associated risks.

The plan defines P&OS services to be provided, how the services are provided, and what funds are required to provide the services over a 10-year planning period.

1.2 Asset Description The P&OS Asset Management Plan (AMP) will focus on outdoor services provided to the community and the assets that support these services located in Council’s Parks, Recreation Reserves, Sporting Grounds and in street scapes. The range of services vary considerably from facilities provided for formal sporting competitions to services in public areas such as waste management (provision of public waste bins), or security/convenience services supported by assets such as public lighting or water bubblers. The common denominator which defines the grouping of these services is that they are outdoor public assets that support sports, recreation, leisure, public art (memorials or statues), safety, and public convenience services.

The Park and Open Space network comprises the following asset types:

• Playgrounds and Reserves

• BMX Facilities

• Park and Reserve Lighting

• Electric BBQ’s

• Open Space Furniture

• Outdoor Tennis and Netball Courts

• Sporting Ovals

• Rubbish Bins

• Memorials and Statues

• Irrigation

• Fencing

• Skate Park Facilities

• Signage These infrastructure assets have significant replacement value estimated at $18.13M replacement value as at 30 June 2018.

1.3 Levels of Service Our present funding levels are not currently sufficient to continue to provide existing services at current levels in the medium term.

The main services consequences are:

• Deteriorating P&OS assets which will impact the service experience of user groups, residents and visitors to Mitchell Shire.

• Council’s renewal gap will continue to increase making it more difficult over time to provide sustainable services to a quality that meets our customer expectations.

• Council’s overall long-term sustainability is impacted when the percentage of assets reaching end of life, but not funded for replacement, continues to increase.

• Generational cost shifting where future residents must wear the cost of renewing current day assets.

• Inability to meet demand for new services through provision of new, expanded or upgraded facilities.

1.4 Future Demand There are quite disparate communities within the Mitchell Shire and the patterns of change are not uniform across the Shire. The Shire is identified as a growth Council and its two most southern townships of Wallan and Beveridge fall within the Urban Growth Area (UGA). These communities are experiencing rapid change and there is an identified gap in P&OS services now.

While Kilmore and Broadford are outside the UGA they are starting to attract funding from the Growing Suburbs Fund. They are growing rapidly and their services are being stretched by population pressures and aging assets. The other townships of the Shire vary with regard to existing services, and levels of growth, but have in common aging infrastructure which also presents challenges for long term management of services and assets.

Mitchell Shire has developed several strategies, master plans and feasibility studies covering Shire population centres with regard to P&OS services. There is a good understanding of future requirements and the Shire is working hard to manage these demands within constrained budgets. An ongoing challenge will be increasing demand over and above what available levels of funding can currently provide for.

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The main demands for new services are created by:

• Increasing population

• Meeting demands from differing community groups for services

• Changing demographics, and diverse demographical areas throughout the Shire.

• Aging and inadequate infrastructure which is no longer fit for purpose.

• Changing participation levels in organised sports and the subsequent impact of service provision.

• Increase in the number of service users

These demands will be managed through a combination of managing existing assets, upgrading of existing assets and providing new assets to meet demand. Demand management practices also include non-asset solutions, insuring against risks and managing failures.

Demand Management Practices include

• Formal planning and community consultation to identify where demand is greatest and of highest priority.

• Regular inspection of assets to ensure they remain in good condition and fit for purpose whilst still in service.

• Council is working hard to attract external funding through Government Grants to increase the available sources of funding for upgrade and new capital works.

• Continue to work on shared use of facilities and sustain relationships with non-Council asset owners to access and increase utilisation of P&OS assets within the municipality.

1.5 Lifecycle Management Plan

What does it Cost? The projected outlays necessary to provide the services covered by this Asset Management Plan (AM Plan) includes operations, maintenance, renewal, upgrade and new assets over the 10-year planning period is $103M or $10.3M on average per year.

1.6 Financial Summary

What we will do Estimated available funding for this period is $68.6M or $6.8M on average per year as per the long term financial plan or budget forecast. This is

67% of the cost to sustain the current level of service at the lowest lifecycle cost.

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

The allocated funding leaves a shortfall of $3.4M on average per year of the projected expenditure required to provide services in the AM Plan compared with planned expenditure currently included in the Long-Term Financial Plan. This is shown in the figure below.

Projected Operating and Capital Expenditure

Figure Values are in current (real) dollars.

What we cannot do We currently do not allocate enough funding to sustain all services at the desired standard or to provide all new services being sought.

Council will continue to work with partners and stakeholders within the Community and in Government to press for more funding to ensure Mitchell Shire can continue to grow and service existing and newly established residents.

Council has not included swimming pools in this AMP. Council will consider a separate Aquatics AMP to manage these facilities apart from a P&OS AMP.

Managing the Risks Our present funding levels are insufficient to continue to manage risks in the medium term.

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The main risk consequences are:

• Community safety where assets fall below acceptable service standards.

• Community dissatisfaction with Council where unrepaired damage to assets and facilities may render them unusable by the public

• Where assets are not adequately maintained their useful life can be reduced increasing medium and long-term costs for Council.

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

• Proactively inspecting our P&OS space assets and carry out maintenance or other actions to ensure public safety is a priority.

• Work with community, sporting and user groups to receive information about service levels currently being experienced

• Ensure Council insurance policies are adequate to cover any incidences of damage, or harm in public spaces.

• Retiring assets that are no longer required for service delivery.

1.7 Asset Management Practices Our systems to manage assets include:

• Conquest III – Asset Management System

• MapInfo/Exponare – GIS

• Summit – Rapid Maps (Asset Inspections)

• TechnologyOne - FinanceOne

Council utilises asset data, inspections, and determines priorities based on both documented and undocumented levels of service to drive its

asset management practices in conjunction with the systems that support capture and management of asset information.

1.8 Monitoring and Improvement Program The next steps resulting from this asset management plan to improve asset management practices include but are not limited to:

• Update and complete level of service documentation for all services relating to P&OS.

• Undertake Service Planning for P&OS services to inform future budget and asset requirements.

• Establish a formal ranking process for capital renewal projects based on condition, risk, strategic importance, function and capacity

• Review and update asset useful (standard) lives to reflect their current performance and required levels of service.

• Establish an asset maintenance management system to be able to measure maintenance delivery performance against the Open Space Maintenance Service Standards

• Determine additional operational and maintenance requirements as a result of new and upgraded assets and as determined through service planning

• Investigate if all Park and Open Space assets have been captured and recorded in the asset register complete with attribute information.

• Review and update the process for conducting and delivering Park and Open Space asset condition audits and ensure they are delivered on a cyclical basis


2. INTRODUCTION

2.1 Background

Mitchell Shire is experiencing significant changes within its population centres. The south of the Shire falls within the Urban Growth Area of metropolitan Melbourne and is experiencing rapid growth. This growth is occurring around old population centres of Beveridge and Wallan. While these townships are not without services, the rate of growth has seen service demand rise to exceed what is currently available to accommodate the new and existing residents.

Other larger townships of Kilmore, Broadford and Seymour are also experiencing growth at a lesser rate but have long standing services where infrastructure is beginning to age. At the same time expectations of these communities are changing with communities wanting existing services maintained and enhanced.

The Shire also has a number of small townships who have expectations that services will continue to be provided and improved over time.

Service changes are also being driven by groups such as sports governing bodies; the AFL, Cricket Australia or Netball Australia to improve standards of community facilities. Sporting groups must meet guidelines to facilitate organised local sporting competitions.

The combination of growth, changing demand and aging assets provide for challenging circumstances to manage P&OS services across the short medium, and long-term.

This asset management plan communicates the actions required for the responsive management of assets (and services provided from assets), compliance with regulatory requirements, and funding needed to provide the required levels of service over a 10-year planning period.

The asset management plan is to be read with the Mitchell Shire planning documents. This should include the Asset Management Policy and Asset Management Strategy along with other key planning documents:

• Integrated Community Services and Infrastructure Plan 2013 (currently being revised)

• Mitchell Open Space Strategy 2013 – 2023

• Mitchell Play Space Strategy 2015

• Sports Development Plan 2011

• Sports Field Feasibility Study 2014

• Goulburn Park Master Plan 2014

• Kings Park Master Plan 2014

• Chittick Park Master Plan 2010

• JJ Clancy Reserve Master Plan 2010

• Harley Hammond Reserve Master Plan 2009

• Tennis/Netball Court Audits 2017

• Sportsground Assessment Audits 2017

• Sports Lighting Audit 2019


The infrastructure assets covered by this asset management plan are shown in Table 2.1. These assets are used to provide numerous Park and Open Space services.

Table 2.1: Assets covered by this Plan

Asset Category Replacement Value

Playground Equipment $2,917,840

Running Tracks $107,065

Swimming Pool Equipment $13,812

BMX Facilities $50,856

Park and Reserve Lighting $2,049,368

Public BBQs $148,785

Open Space Furniture $338,462

Outdoor Tennis/Netball Courts $2,534,939

Sporting Ovals $5,000,695

Rubbish Bins $59,181

Obelisks, Memorials and Statues $1,306,066

Irrigation $543,674

Fencing $1,856,191

Skate Park Facilities $1,038,367

Signage $92,289

TOTAL $18,057,588

It should be noted that some of the assets within a given P&OS area will be covered by the asset management plan relating to that asset class, for example a fully enclosed building would be covered under Buildings Asset Management Plan.

At present, swimming pools are not covered in any AMP. Mitchell Shire will undertake further feasibility studies around its aquatic assets to make clear the future management of these assets and then include them in the next iteration of the P&OS AMP (or develop a standalone Aquatic Facilities AMP).

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

• Providing a defined level of service and monitoring performance,

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

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

• Identifying, assessing and appropriately controlling risks, and

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


3. LEVELS OF SERVICE

3.1 Customer Research and Expectations Mitchell Shire participates in the annual Department of Environment, Land , Water and Planning Community Satisfaction Survey which provides State wide benchmarking for Council service performance to better understand our strengths and challenges in service delivery as informed by our residents. Community satisfaction information is used in developing the Strategic Plan and in the allocation of resources in the budget.

The following results provided in table 3.1 relate to Park and Open Space services delivered by Council.

Table 3.1: DELWP Community Satisfaction Survey 2018

Performance Measure Satisfaction Level (%)

Very good Good Average Poor Very Poor Can’t Say

Recreational Facilities 16 37 27 12 4 4

Community and Cultural

9 32 34 13 3 10

Appearance of Public Areas

13 43 29 9 4 1

Community Activities 9 32 34 13 3 10

Overall results are weighted toward the community being satisfied with Council P&OS services and the results have shown a shift toward more satisfaction since 2012. From 2010 Council has been actively working to develop and deliver on Park and Open Space strategies which have been listed in section 2.1. These strategies were drafted with participation from the community. With better plans and processes in place Council has been able to target priority services and facilities for new investment. Many elements of these P&OS strategies and plans have been delivered over recent years which demonstrates commitment from Council to listen and act on community values.

Council is currently preparing a new updated Integrated Community Services and Infrastructure Plan which will drive the next phase of Council and community conversations around P&OS asset priorities.

3.2 Strategic and Corporate Goals This asset management plan is prepared under the direction of the Mitchell Shire’s vision, mission, goals and objectives.

Our vision is:

Together with the community, creating a sustainable future.

Our mission is:

Working with our communities to build a great quality of life

Relevant goals and objectives and how these are addressed in this asset management plan are:


Table 3.2: Goals and how these are addressed in this Plan

Strategic Objective Key Strategy Action Measure

Advocacy – To relentlessly advocate for funding to benefit our community

Support and collaborate with local groups and organisations to access potential funding and identify joint advocacy priorities.

Work in partnership with community groups to identify and prioritise opportunities for funding support

Regular engagement with community groups about advocacy priorities

Community Participation – To actively explore all opportunities for community involvement and participation in Council decisions

Provide opportunities for inclusive participation across the Shire

Promote and support community participation in programs across Council services including community development, youth, early years, ageing, library, leisure and recreation

Improved participation across a range of services and programs.

Increased diversity of participants in Council services, events and engagements.

Ensure our services are accessible and inclusive of all community members.

Regular promotion and provision of AAA Accessibility, telephone typewriter and translator service.

Responsible Planning - To demand best practice outcomes when planning for future growth

Plan for growth and change through best practice design of services, infrastructure, open space and recreation facilities.

Develop clear processes and expectations in relation to the ongoing review, management and implementation of Developer Contributions. Ensure Council’s agreed service levels and design guidelines are addressed in applications for new developments.

Council’s views are accepted and incorporated into the PSPs and ICPs by Government.

Support safe communities through best practice design and planning standards.

Incorporate principles of Crime Prevention Through Environmental Design (CPTED) into planning processes for the development of new/redeveloped public spaces and structures.

CPTED principles are adopted in the design of Council’s public spaces for Council and developer led projects.

Improve the liveability of Mitchell Shire.

Develop and adopt ‘liveability’ indicators to monitor improvements in the liveability of the Shire.

Liveability indicators are developed, measured and reported to the community.


Strong Communities - To build and nurture strong and vibrant communities where people are proud to live

Establish and maintain high quality roads, footpaths, parks, recreation facilities, streetscapes, bike paths and public open spaces

Implement priority actions to establish, maintain and improve parks and open spaces under the Mitchell Open Space Strategy.

Improved community satisfaction with parks and open spaces in the Shire.

Develop and prioritise streetscape and public space improvements for townships across the Shire.

Streetscape improvements implemented.

Ensure parks, open spaces and other assets provided by developers are fit for purpose and meet Council’s design and service standards.

Fit for purpose assets are delivered which comply with Council’s standards.

Review the service standards for open space maintenance across the Shire.

Service Standards Review is completed and changes implemented.

Provide adaptable community infrastructure and participation opportunities for all ages, cultures and abilities.

Continue to deliver priority actions under the: > Life Stages Plan > Open Space Strategy > Play Space Strategy > Social Justice Framework > Sports Development Plan including the provision and upgrade of accessible active and passive recreational facilities, footpaths, bike paths and play spaces.

Actions are delivered under the annual plans.

Promote a safe and secure environment throughout the Shire.

Implement planned CCTV projects.

Planned CCTV projects are implemented in public spaces.

Empower our volunteer community.

Encourage and support Committees of Management to enable greater use of Council facilities.

Improved use of Council facilities.

Continue to strengthen partnerships with Committees of Management operating facilities on behalf of Council.

Level of satisfaction of the Committees with the Council partnership.

Supporting Local Jobs and Quality Investment - To identify, encourage and actively promote investment, business and tourism.

Facilitate a high level of civic pride in the presentation of public and private land in our towns and communities.

Establish an annual program aimed at improving the appearance of public and private land in the Shire.

Increased satisfaction levels in the ‘Appearance of public areas’ in the Community Satisfaction Survey.


Financial and Organisational Management – To be leaders in Financial and organisational management

Deliver high quality projects that benefit our community

Strengthen project management and decision making frameworks to ensure Council’s project delivery reflects identified service priorities

Projects are delivered effectively in line with agreed strategies and budgets.

Caring for Our Environment - To be responsible custodians, by managing and enhancing our environment, minimising the impacts of development, waste, natural disasters and climate change.

Provide opportunities for the community to experience nature in their everyday lives.

Enhance and promote environmental reserves through implementing priority actions under the Mitchell Open Space Strategy.

Visitation to environmental reserves is increased. Biodiversity of environmental reserves is improved.

Undertake a feasibility study to establish a Southern Regional Park based on the old Hernes Swamp.

Partnerships established to prepare and undertake a feasibility study. Feasibility investigated and outcomes implemented.

Actively seek opportunities to increase the extent of environmental parks in accordance with strategic priorities.

Opportunities for new bushland reserves are sought.

3.3 Legislative Requirements Council acknowledges and complies with the various Acts and Regulations that relate to and affect Council’s Park and Open Space operations. These are listed in the below table.

Table 3.3: Legislative Requirements

Legislation Requirement

Local Government Act 1989 Sets out the role, purpose responsibilities and powers of local government including the preparation of a long term financial plan supported by infrastructure and asset management plans for sustainable service delivery

Australian Accounting Regulations

Sets out the financial reporting standards relating to the re-valuation and depreciation of infrastructure assets

Building Act 1993 & Building Regulations 2006

The Act sets out the legal framework for the regulation of construction of Park and open spaces, Park and open space standards and maintenance of specific Park and open space safety features in Victoria. The Regulations call up the Building Code of Australia (BCA) as a technical reference that must be complied with.


Building Code of Australia (BCA)

A uniform set of technical provisions for the design and construction of building and other structures.

Crown Land (Reserves) Act 1978

Provide for the reservation of Crown Lands for certain purposes including the management of such reserves and their purposes.

Disability Discrimination Act 1992

To ensure that persons with disabilities have the same rights to equality before the law as the rest of the community and to eliminate discrimination in areas such as access to public open space and sport facilities/clubs.

Environmental Protection Act 1970

A framework for the protection of the environment in Victoria, in accordance with the principals of environmental protection. Includes the establishment of environmental objectives and programs to prevent pollution and environmental damage.

Heritage Act 1995 Provides for the protection and conservation of places and objects of cultural heritage significance and the registration of such places and objects.

Planning and Environment Act 1987

Occupational Health and Safety Act 2004

Governs the key principles, rights and duties in relation to occupational health and safety.

Occupational Health and Safety Regulations

Includes Asbestos 2003; Manual Handling 1999; Noise 2004; Prevention of Falls 2003; and Lead 2000.

Planning and Environment Act 1987

Establish a framework for planning the use, development and protection of land in Victoria in the present and long term interests of all Victorians.

Public Health and Wellbeing Act 2008

Enact a new legislative scheme which promotes and protects public health and wellbeing in Victoria.

Subdivision Act 1988 Sets out the procedure for subdivision and consolidation of land including open space, and describes the requirement of developer contribution of open space where it is not included within the Planning Scheme.

Wrongs Act 1958 Applies to common law claims for damages for personal injury in public places and medical negligence. The Act excludes workplace or transport accidents.

3.4 Customer Levels of Service Service levels are defined as customer levels of service and technical levels of service.

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

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

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

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

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

The current and expected customer service levels are detailed in Tables 3.4 and 3.5. Table 3.4 shows the expected levels of service based on resource levels in the current long-term financial plan.

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


Table 3.4: Customer Level of Service

Expectation Performance Measure Used

Current Performance Expected Position in 10 Years based on the current budget.

Service Objective: Mitchell Shire is committed to providing open spaces that serve the needs of people of all ages, cultural backgrounds and abilities. Our public spaces will be visually inviting and encourage healthy lifestyles for current and future generations, as they will be well planned, well maintained and accessible to the community.

Quality Provide quality Park and Open Space Services

Customer Service Requests measured on a monthly basis

Not currently available. From all defect notices (from either customer complaints or internal inspections) Council attends to an average 26 P&OS defects per month (Data source Conquest III Defects report)

Maintenance defects of assets are attended to by Council prior to customer complaints 80% of the time

Overall Asset Condition for P&OS assets

Percentage assets at condition level

Where Condition 1 is very good and condition 5 is very poor; The greatest percentage of Council P&OS assets are currently in condition 1 with only 1 % in condition four and five.

Council will have no assets in condition 5 and less than 2% of overall value in condition 4.

Park and Open Spaces are safe

Absence of significant Health and safety hazards

Not currently measured but inspections and maintenance processes in place.

Measured and detailed process identifying unique defects in order to inform number of, and response time, to OHS issues.

Confidence levels

Medium Medium


Function Council is providing the appropriate assets and levels of service to meet user needs.

Customer service requests relating to the functionality and accessibility of P&OS services

Not currently available. Council does liaise with community groups but no method to currently measure (score) satisfaction against “function” performance of services.

Service requests relating to function are measured and maintained at below 10 requests per week. Council will need to monitor community demographics to ensure services continue to meet needs of the community across abilities, cultures and age groups.

Council will deliver more open space services to meet population increases, while also ensuring fit for purpose services and assets

Customer Satisfaction Survey (DELWP)

Customer feedback suggests general level of satisfaction with current performance. Majority feedback rates Council as “good”

Community survey feedback maintaining current numbers in “good” and “very good” categories while levels of dissatisfaction decrease.

Confidence levels

Medium Medium

Capacity and Use

Council is providing adequate provision of P&OS assets

Community Satisfaction Survey

Good capacity rating in the north Low capacity rating in the South

Increase provision of P&OS assets in the South of the Shire to meet growing population demand.

Council has identified and is meeting provision targets set in existing plans

Council will deliver new and upgrade capital works programs to meet needs of growing communities.

SRP identifies next 4 years expenditure LTFP will be matched to long term capital works plan to deliver new and upgrade assets.

Confidence levels

Medium Low


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

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

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

• Maintenance – the activities necessary to retain an asset as near as practicable to an appropriate service condition. Maintenance activities enable an asset to provide service for its planned life (e.g. repair to playground components, repair to path and bike track networks, tree pruning),

• Renewal – the activities that return the service capability of an asset up to that which it had originally (e.g. replacement of lighting towers, street litter bins, playground components or renewal of hardcourt surfaces),

• Upgrade/New – the activities to provide a higher level of service (e.g. bespoke playgrounds, adding drainage to football fields, new or improved sport field lighting, increasing the numbers of trees in parks,) or a new service that did not exist previously (e.g. a new swimming pool).

Service and asset managers plan, implement and control technical service levels to influence the customer service levels.1

Table 3.5 shows the technical levels of service expected to be provided under this AM Plan. The ‘Desired’ position in the table documents the position being recommended in this AM Plan.

Table 3.5: Technical Levels of Service

Service Attribute

Service Activity

Objective

Activity Measure Process

Current Performance * Desired for Optimum Lifecycle Cost **

TECHNICAL LEVELS OF SERVICE

Operations

Appropriate and safe P&OS services Clean and tidy P&OS areas. P&OS areas are inviting and attractive

See Parks and Environment Service Standards for Mitchell Shire for Council requirements

Currently not measured against timeframes but delivered to standards.

Resourcing to meet timeframes and standards at 80% of requirements

Legal Compliance

Number of notices of non-compliance issued against the service; either internally or by other agencies.

Not currently measured Zero non-compliance notices.

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


Budget $4,132M pa 3 to 5% increase per annum based on rate of asset growth for P&OS

Maintenance

Respond to maintenance requests as per Parks and Environment Service Standards.

Provision of appropriate maintenance service, to reduce risk to user groups, and ensure longevity of assets and services.

See Parks and Environment Service Standards for Mitchell Shire for Council requirements

Currently not measured against timeframes but delivered to standards

Resourcing to meet timeframes and standards at 80% of requirements

Budget $1,221M p.a 3 to 5% increase per annum based on rate of asset growth for P&OS

Renewal

Infrastructure meets user needs

Condition rating of P&OS assets

99% of existing assets are currently sitting in condition 1-3 “very good” to “fair”

Maintain current performance of 99% assets within condition 1-3.

Budget Council will average just over $470,000 in renewal per annum over the next 10 years based on LTFP.

LTFP to be reviewed with intention to increase renewal funding.


Service Attribute

Service Activity

Objective

Activity Measure Process

Current Performance * Desired for Optimum Lifecycle Cost **

Upgrade/New

Mitchell Shire residents have appropriate provision of and access to P&OS services supported by good quality assets.

Provision and Delivery Levels of service as outlined in Council’s Open Space Strategy and other P&OS planning documents noted in Section 2.1.

Planning, Design and Development occurring as per standards outlined in Open Space Strategy

Council continues to review, update and then meet development standards in its provision of P&OS infrastructure.

Budget The 4 year capital works plan identifies $6.4M in new and upgrade projects.

$3.9M identified in the LTFP for years 5 to 10 which is unlikely to keep pace with rate of growth and demand. Increase in budget required as part of Capital works program.

It is important to monitor the service levels provided regularly as these will change. The current performance is influenced by work efficiencies and technology, and customer priorities which will change over time. Review and establishment of the agreed position which achieves the best balance between service, risk and cost is essential and must involve public consultation.

4. FUTURE DEMAND

4.1 Demand Drivers Drivers affecting demand include things such as population change with a broader social and cultural mix of people, changing regulations, changes in demographics, seasonal factors, changes in service standards, customer preferences and expectations, and economic factors.

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

Table 4.3: Demand Drivers, Projections and Impact on Services

Demand drivers Present position Projection Impact on services

Population Change Approximately 46,038 residents of Mitchell Shire (data source Mitchell Shire Community Profile, forecast.id.)

Mitchell Shire’s population is forecast to grow to 128,727 by 2041 (forecast.id)

Population growth will mean an increase in the utilisation of existing P&OS services and increasing demand for more services as capacity thresholds are exceeded.


Demographic Change

Median age of the current population of Mitchell is 37 which is consistent with the Victorian average. The Shire has a lower median household income than the state average which can impact participation in Recreational activities. Our population is largely born in Australia with just 12% born overseas.

The projected growth which will occur mostly in the south is likely to be young couples and young families which is expected to generate demand for Park and open space activities and formal sports playing fields. Families with children under 9 years of age are the primary users of playgrounds and open space areas. Families with children between 10 and 19 are the main users of recreational and sporting areas, however with the increase in participation in Auskick, Ready Net Go and soccer and cricket equivalents, numbers will rise as more children can use a single sports field when compared against teenagers and adults

Greater demand for services which at current levels of provision will not address future demand requirements

Vehicle Ownership Uncertain Increasing number of mobile families willing to travel to participate in recreation activities both formal and informal

Premier “Regional” facilities will be well utilised as the community is prepared to travel. Users from outside the Shire may also attend these facilities. Demand for vehicle parking spaces, which limit access to the service in many instances. Increasing parking can also reduce available open space footprint. Parking can impact on residential areas where popular services have inadequate available parking

Changing Facility Guidelines

Playground equipment is regulated. Competition sports have guidelines for playing surfaces to meet for entry into competition

Council will be required to construct more Sports fields to meet competition standards, particularly in the south

Overuse of playing surfaces. Access and availability of outdoor courts and playing surfaces


Land Use Changes Increasing urban density with new developments

Increased density is reducing available private play spaces in the home environment requiring more public open space.

Increased demand for a variety of open space facilities to meet different recreational and social activities.

Water Irrigation of Council open spaces and sports fields in a changing climate

Increase in use of water and increase in cost of water

Increases the cost of service, or alternatively service levels must be lowered or;

• Require a change of grass species used on playing surfaces and parks

• Require better harvesting of water for re-use.

Partnerships Council has partnerships with schools for public access to sporting ovals

Council has negotiated two JUA’s

Has the effect of increasing facilities to the public at otherwise reduced cost to Council if Council had to construct new ovals.

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

Opportunities identified to date for demand management are shown in Table 4.4. Further opportunities will be developed in future revisions of this asset management plan.

Table 4.4: Demand Management Plan Summary

Demand Driver Impact on Services Demand Management Plan

Population Change Reduce capacity of existing services and cause over utilisation of existing services

Plan to identify and develop strategically located P&OS assets to accommodate growing communities.

Demographic Change Pressure on existing facilities to provide more capacity for user groups. Increased maintenance and reduced expected life from over use of facilities

In the first instance, undertake strategic planning to identify change in service demand across all services, who will use the services, and identify the best location for future services.

Vehicle Ownership People can travel to ‘more attractive’ facilities which can see increased use of premier facilities and decreased use of smaller facilities. In some instances Council will be encouraging greater visitation of its regional facilities Impact on availability of

Planning must identify utilisation patterns and new and upgrade facilities will need to consider vehicle parking as part of design. Work with public and state public transport providers to ensure high use facilities are part of main public transport routes. Undertake studies for car parking across all facilities to identify future demand and plan for new and upgrades as required.


vehicle parking at high use facilities

Changing Facility Standards

Standards will determine if facilities can host competition sports. Where facilities fail to meet standards, this will be a future demand issue based on asset condition and function. Community has higher standards and expectations regarding services in public open space such as lighting, walking tracks, waste management and amenities such as potable drinking water, BBQs and public toilets. Demand for more Open Space for informal recreation.

Functional criteria to be formed in order to assess quality of facilities to host competition sports. Upgrade and new facilities will need to be built to current standards. Continue to use documents such as Public Open Space Strategy and the Integrated Community Services and Infrastructure Management Plan to guide Levels of Service, and assist delivering consistent outcomes to community based on defined service hierarchies. Planning Scheme to ensure the provision of adequate public space as part of growing and new residential areas.

Land Use Change Changing Urban Growth Areas with Wallan, Beveridge and Kilmore all experiencing significant growth with higher density housing – creates need for more public spaces

Planning for Park and Open Spaces in greenfield sites to be able to meet demand over many decades to come. Provision for a balanced mix of both passive and active/structured Park and public open space with appropriate distribution throughout population centres.

Water Maintenance of public parks, gardens and sporting fields could be adversely affected during times of water restrictions. Increasing quantity of open space puts pressure on water availability and cost to purchase water for these facilities

Increased effort to build sustainability features into open space design to limit the demand on water and provide increased water retention and water harvesting options.

Leisure Trends Population decreasing in smaller townships. Areas of underutilisation of Park and Open Space facilities due to changing service demands, lack of interest from certain age groups, accessibility issues, and alternative new options for people to choose.

Service Planning is used to identify best mix of provision and development in order to provide best possible services at a sustainable level; which can include some shifts in service levels, both up and down across the municipality.

Partnerships Provide additional capacity for services without requiring large investment in land and infrastructure.

Identify opportunities and form partnerships with shared investment in non-Council facilities to meet short to medium term demands in a sustainable manner.


4.5 Asset Programs to meet Demand

The new assets required to meet demand are either contributed to Council as part of new developments, or are planned and constructed by Council. Council is also entering partnerships to share non-council owned assets such as school sports ovals. In these instances Council will not be the asset owner.

With our growing population (currently around 3-4% pa), the demand for increased public open space and improved facilities for open space will continue to be a high priority for Council.

While Council can to some extent manage demand by optimising utilisation and performance of existing assets it also places requirements on developers to make provision for public open space, under s18 of the Subdivision Act 1988. This process is undertaken in the planning and development stage and is support by the Mitchell Shire Planning Scheme and Mitchell Open Space Strategy.

As new subdivisions come on line they will be formally handed over to the Assets unit to be incorporated into the Asset Management system.

The summary of the forecast cumulative value of additional assets is shown in Figure 1.

Figure 1: Upgrade and New Assets to meet Demand – (Cumulative)


Acquiring these new assets will commit ongoing operations, maintenance and renewal costs for the period that the service provided from the assets is required. These future costs are identified and considered in developing forecasts of future operations, maintenance and renewal costs for inclusion in the long term financial plan further in Section 5.

5. LIFECYCLE MANAGEMENT PLAN

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


5.1 Background Data 5.1.1 Physical parameters

The assets covered by this asset management plan are shown in Table 2.1.

Mitchell Shire has a complex mix of P&OS facilities. The Shire has rapid growth in the south where new facilities are not keeping pace with service requirements, and existing services were designed for much smaller populations. Council has a significant focus on this area and has been planning and developing new facilities in the south to cater for this growing population. The facilities are constructed with future growth considered. This will be reflected in the table below as facilities will have been constructed very recently (in the past 10 years) and will have been constructed at significant cost to ensure long term capacity and to mitigate short term redundancy.

In the north and for older established communities there is much higher provision of facilities in public spaces, developed a long time in the past on substantial land sites. The provision service levels (amount of available open space) are more than adequate, but the development levels of service (quality of facilities) are mixed as Council works through planning and delivery processes to renew and upgrade the facilities in these communities.

The age profile of the assets included in this AM Plan are shown in Figure 2. It can be seen from the table that considerable effort has been made in the past 17 years to substantially increase investment in open space facilities. Of the 1154 captured assets for P&OS in Mitchell Shire’s asset register 92% have been developed since 2002.

Figure 2: Asset Age Profile


5.1.3 Asset condition

The condition of many P&OS assets have been assessed in accordance with the Moloney 0-10 rating system. This data is held in the Conquest Asset Management System and is used for financial modelling of future asset renewal requirements. When using the NAMS>Plus modelling tools this data is converted to a 1-5 rating score (as per figure 5.1.3), and the outcomes are provided in Figure 3.

An audit and condition assessment of many of Mitchell Shire’s park and open space assets has been undertaken in the past four years. The average condition of P&OS assets is rated “very good”. There is an extremely low percentage of P&OS assets below intervention thresholds at just 1%.


Condition is monitored largely by in-house inspectors who perform maintenance on asset components as required. The assets have only been assessed for condition, not function or capacity. When the latter two measures are considered the overall condition score may not be as positive as that demonstrated in the below figure (figure 3).

The condition profile of our assets is shown in Figure 3.

Fig 3: Asset Condition Profile by Value ($)

An improvement action will be to reassess all P&OS assets giving consideration to condition, function and capacity to ensure we are also measuring an assets “fit for purpose” state alongside its physical integrity.


Fig 3.1: Asset Condition Profile as percentage (%)

This condition data is used in the predictive modelling of future renewal expenditure requirements contained in this Plan. As new or updated data becomes available the financial models will be further refined.

Current (2019/20) Park and Open Space renewal allocations in the annual budget are less than the modelled renewal requirements and the Long-Term Financial Plan will need to be reviewed to address the predicted increasing renewal requirement after 2020. Assets will factor in any assets being “retired” out of service, where service adjustments are required to meet changing demands of residents. Examples of this would be


the Tooborac Football Oval or Tennis Courts in Seymour. By not modelling the renewal of retired assets (change of service) will improve the position of renewal V budget requirement.

It has been noted that the southern region of Mitchell Shire is incorporated into the Urban Growth Boundary (UGB). With the Shires population expected to exceed 60,000 within the next 5 years, this will have a large impact on Councils modelling due to new service related assets being created.

Maintenance expenditure levels may need to be increased to support current service levels and consideration will need to be given to increase funding and resources as new assets come on line.

Condition is measured using a 1 – 5 grading system2 as detailed in Table 5.1.3.

Table 5.1.3: Simple Condition Grading Model

Condition Grading

Description of Condition

1 Very Good: only planned maintenance required

2 Good: minor maintenance required plus planned maintenance

3 Fair: significant maintenance required

4 Poor: significant renewal/rehabilitation required

5 Very Poor: physically unsound and/or beyond rehabilitation

5.2 Operations and Maintenance Plan Operations include regular activities to provide services such as public health, safety and amenity, e.g. mowing of public areas, inspection of playground facilities, water and provision of public lighting.

Routine maintenance is the regular on-going work that is necessary to keep assets operating, including instances where portions of the asset fail and need immediate repair to make the asset operational again, e.g. repair of playground components, replacing turf, repairs to irrigation systems. Council also undertakes planned maintenance which is programmed to occur at set times and frequencies throughout the year. Planned maintenance would include the asset inspection program, and grass mowing.

In the past Mitchell Shire combined operational and maintenance expenditure under a single operational budget. In order to be able to separately analyse operational and maintenance expenditure, Council will need to improve identification of these two streams separately. This is important as operations and programmed maintenance are generally fixed costs or tied to levels of service. Reactive maintenance is more ad hoc and unpredictable. This is an improvement action for the future.

Maintenance expenditure is shown in Table 5.2.1.

Table 5.2.1: Operations & Maintenance Expenditure Trends

Year Operations Maintenance

2017/18 $3,749,612 $1,120,013*

2018/19 $4,132,881 $1,221,712*

2019/20 $4,246,729 $1,268,501* (TBC) *Includes Leisure Centre Expenditure

The asset maintenance system for Parks and Open Spaces is based around the adopted Service Standards for Parks and Open Spaces.

Council relies on maintenance and inspections being undertaken by its own staff with appropriate skills and experience in this field, supported by contractors & subcontractors as and when required.

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


The maintenance service objectives are to:

• To maintain the parks and open spaces in a safe, serviceable, hygienic and aesthetic condition to the satisfaction of Council and the community;

• To maintain and preserve the functionality and value of the existing assets; and

• To provide and maintain a safe environment for the community within the constraints of Council’s financial capacity and resource capability, while displaying a reasonable “duty of care”; and

• To ensure the provision of excellent customer service and that customer requests are responded to quickly and efficiently.

Summary of future operations and maintenance expenditures

Future operations and maintenance expenditure is forecast to trend in line with the value of the asset stock as shown in Figure 4. Note that all costs are shown in current 2019/20 dollar values (i.e. real values).

Figure 4: Projected Operations and Maintenance Expenditure

Figure Values are in current (real) dollars. Figures include expenditure on Leisure Centres.

Maintenance and Operations expenditure levels are not sufficient to meet projected service levels. This is demonstrated in Figure 4. With an expected future increase in development and rising population, more and more assets will either be gifted by developers as required under the Planning Scheme, or be constructed by Council. The above table indicates the outcome of growth of assets to meet demand at less than 3% up to 2023, reaching 4% by 2026. These early estimates up to 2023 could be considered conservative, yet working from this lower estimate Council still faces a 100% increase in projected operations and maintenance expenditure by 2029.


5.3 Renewal/Replacement Plan Renewal and replacement expenditure is major work which does not increase the asset’s design capacity but restores, rehabilitates, replaces or renews an existing asset to its original service potential. Work over and above restoring an asset to original service potential is considered to be an upgrade/expansion or new work expenditure resulting in additional future operations and maintenance costs.

5.3.1 Renewal ranking criteria

Asset renewal and replacement is typically undertaken to either:

• Ensure the reliability of the existing infrastructure to deliver the service it was constructed to facilitate (e.g. renewing hard court playing surfaces to meet requirements for competition level sports), or

• To ensure the infrastructure is of sufficient quality to meet the service requirements (e.g. service requirements as defined in Councils Public Open Spaces Strategy – facilities hierarchy)

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

• Have a high consequence of failure,

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

• Have a total value representing the greatest net value,

• Have the highest average age relative to their expected lives,

• Are identified in the AM Plan as key cost factors,

• Have high operational or maintenance costs, and

• Have replacement with a modern equivalent asset that would provide the equivalent service at a savings.3

The ranking criteria used to determine priority of identified renewal and replacement proposals is detailed in Table 5.3.1.

Table 5.3.1: Renewal and Replacement Priority Ranking Criteria

Criteria Weighting

Asset Condition Not weighted

Risk Not weighted

Asset Hierarchy Not weighted

Asset Capacity Not weighted

Asset Function Not weighted

Strategic Goals and Objectives Not weighted

Total 100%

The Mitchell Shire has been developing more stringent decision making processes around renewal, especially in order to establish priority projects where financial resources are limited.

3 Based on IPWEA, 2015, IIMM, Sec 3.4.5, p 3|97.


A weighting system should look something like the following:

Criteria Weighting

Asset Condition 20

Risk 15

Asset Hierarchy 15

Asset Capacity 15

Asset Function 15

Strategic Goals and Objectives 20

Total 100%

The emphasis on asset renewal is to replace poor condition asset without changing existing levels of service. For this reason, capacity and function, which largely trigger upgrade, expansion and new assets are not given as great a weighting in an asset renewal program. Capacity and function must still be considered with regard to the service, but the funding source may change away from renewal, depending on the extent the asset can meet service requirements on a like for like basis, or whether upgrades/expansion is required.

5.3.2 Summary of future renewal and replacement expenditure

Projected future renewal and replacement expenditures are forecast to increase over time when the asset stock increases. The expenditure required is shown in Fig 5. Note that all amounts are shown in current (real) dollars.

Fig 5: Projected Capital Renewal and Replacement Expenditure


Council has a substantial proportion of aging assets that have survived past their estimated standard life while remaining in good condition. The unfunded portion of projected expenditure in 2020 will consist largely of these types of assets as the model works off age and useful life, more so than condition as the trigger for renewal.


As part of an asset system review Officers will need to review the applied useful lives in the context of levels of service. It really does not matter in many instances if an asset is old if it continues to provide an adequate level of service at low cost. Updating useful lives will be an improvement action.

Council will have an ongoing challenge when allocating capital expenditure. There is pressure to fund new assets to provide services in growth areas. At the same time existing assets (which is the majority of assets) require consistent allocations to ensure no major increase in the renewal gap (required renewal V funded renewal)

Overall the renewal profile for projected investment can be managed over the short term, but it cannot be left underfunded for too long or there will be growing concern and complaints from the community as services fail to meet customer expectations. At present levels of funding the renewal gap will be $2.2M within 10 years.

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

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

5.4 Creation/Acquisition/Upgrade Plan New works are those that create a new asset that did not previously exist, or works which will upgrade or improve an existing asset beyond its existing capacity. They may result from growth, social or environmental needs. Assets may also be acquired at no cost. These additional assets are considered in Section 4.4.

5.4.1 Selection criteria

New assets and upgrade/expansion of existing assets are identified from various sources such as community requests, proposals identified by strategic plans or partnerships with others. Candidate proposals are inspected to verify need and to develop a preliminary renewal estimate. Verified proposals are ranked by priority and available funds and scheduled in future works programmes. The priority ranking criteria is detailed in the Project Management Framework.

5.4.2 Summary of future upgrade/new assets expenditure

Projected upgrade/new asset expenditures are summarised in Fig 6. The information has been drawn from two sources; Council’s four-year capital works program which aligns to the Strategic Resource Plan, and Council’s Long-Term Financial Plan which is a 10 year planning document. Council will form service plans over the next two years which will become the basis of improved financial planning, as well as documents such as the updated ICSIP which will generate the priorities for Council’s P&OS long term capital works priorities.


Fig 6: Projected Capital Upgrade/New Asset Expenditure


It is understood that increasing Council’s asset base will also require additional resources for their ongoing operation and maintenance. Council’s growth forecast is set to exceed 4% per annum by 2026 and the outcome of this on the operating and maintenance budget was demonstrated in figure 4 above.

5.4.3 Summary of asset expenditure requirements

The financial projections from this asset plan are shown in Fig 7 for projected operating (operations and maintenance) and capital expenditure (renewal and upgrade/expansion/new assets). Note that all costs are shown in real values.

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

Fig 7: Projected Operating and Capital Expenditure



Council has a reasonable level of confidence that the first five years (2020 to 2024) reflect what is planned, and it is expected there will be State and Federal Government funding provided to achieve any shortfalls which are currently reflected in the graph. Council has been working hard to form solid relationships with Government stakeholders and has achieved considerable success in winning support for new capital works projects in light of the rapid growth of the Shire and Council’s challenge to provide new services to growing communities.

Each year Mitchell Shire is predicting its asset base to grow, so each year the maintenance and operation requirements are also increasing, and this is having the biggest impact on funding gaps in the short and medium term. Council will undertake service planning of Park and Open Space services and this will consider current and future levels of service to be provided; noting Council can only offer what it can afford through its own income generation, and external contributions/grants it can attract.

Confidence in the figures outside of 2025 is low as Service Planning is not yet complete. The LTFP will continue to be refined on an annual basis as further information and data become available.

5.5 Disposal Plan Disposal includes any activity associated with the disposal of a decommissioned asset including sale, demolition or relocation.

It is important to correctly dispose of any decommissioned asset both by physically removing the asset from P&OS areas and recording the assert as disposed in the asset register.

There is currently no asset disposal schedule in place. Council officers are informed of disposals through the capitalisation process, where assets being disposed of are reported as part of registering a replacement asset.

6. RISK MANAGEMENT PLAN

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

Risk Management is defined in ISO 31000:2009 as: ‘coordinated activities to direct and control with regard to risk’4.

An assessment of risks5 associated with service delivery from infrastructure assets has identified critical risks that will result in loss or reduction in service from infrastructure assets or a ‘financial shock’. The risk assessment process identifies credible risks, the likelihood of the risk event occurring, the consequences should the event occur, develops a risk rating, evaluates the risk and develops a risk treatment plan for non-acceptable risks.

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

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

No critical assets and their typical failure modes and the impacts on service delivery have been identified for this AMP. A future risk assessment of the Park and Open Space asset class will identify and prioritise critical assets. This is included as an improvement action.

4 ISO 31000:2009, p 2


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

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

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

Fig 6.2 Risk Management Process – Abridged

TREAT RISKS

- Identify options

- Assess options

- Treatment plans

ANALYSE &

EVALUATE RISKS

- Consequences

- Likelihood

- Level of Risk

- Evaluate

IDENTIFY RISKS

- What can happen ?

- When and why ?

- How and why ?

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

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

Table 6.2: Critical Risks and Treatment Plans

Service or Asset at Risk

What can Happen

Risk Rating

(VH, H)

Risk Treatment Plan Residual Risk *

Treatment Costs

Parks, Playgrounds and playing surfaces

Asset failure H Program of inspections and work processes to follow up on any complaints to intervene early to ensure assets remain in good serviceable condition

Low O&M expense item

Parks, Playgrounds and playing surfaces

Personal Injury H Regular inspections of site and facilities and maintenance/replacement of damaged components actioned.


Public Spaces Trips and Falls H Programmed inspections of assets and maintenance/replacement of damaged components actioned.



Service or Asset at Risk

What can Happen

Risk Rating

(VH, H)

Risk Treatment Plan Residual Risk *

Treatment Costs

Trees in Public Spaces

Falling limbs H Inspections by qualified arborist and pruning, felling trees where required.

Medium O&M Expense item

7. FINANCIAL SUMMARY

This section contains the financial requirements resulting from all the information presented in the previous sections of this asset management plan. The financial projections will be improved as further information becomes available on desired levels of service and current and projected future asset performance.

7.1 Financial Statements and Projections

7.1.1 Asset valuations

The best available estimate of the value of assets included in this Asset Management Plan are shown below. Assets are valued at fair value at cost to replace service capacity

Gross Replacement Cost $18.13M

Depreciable Amount $18.13M

Depreciated Replacement Cost6 $11.8M

Annual Average Asset Consumption $1.3M

7.1.1 Sustainability of service delivery

Two key indicators for service delivery sustainability that have been considered in the analysis of the services provided by this asset category, these being the:

• asset renewal funding ratio, and

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

Asset Renewal Funding Ratio

Asset Renewal Funding Ratio7 68%

The Asset Renewal Funding Ratio is the most important indicator and indicates that over the next 10 years of the forecasting that we expect to have 68% of the funds required for the optimal renewal and replacement of assets.

Medium term – 10 year financial planning period

6 Also reported as Written Down Value, Carrying or Net Book Value. 7 AIFMM, 2015, Version 1.0, Financial Sustainability Indicator 3, Sec 2.6, p 9.

Residual

Value

Depreciable

Amount

Useful Life

Gross

Replacement

Cost

End of

reporting

period 1

Annual

Depreciation

Expense

End of

reporting

period 2

Accumulated

Depreciation Depreciated

Replacement

Cost


This asset management plan identifies the projected operations, maintenance and capital renewal expenditures required to provide an agreed level of service to the community over a 10 year period. This provides input into 10 year financial and funding plans aimed at providing the required services in a sustainable manner.

The projected operations, maintenance and capital renewal expenditure required over the 10 year planning period is $8.9M on average per year.

Estimated (budget) operations, maintenance and capital renewal funding is $5.8M on average per year giving a 10 year funding shortfall of $3.1M per year. This indicates 65% of the projected expenditures needed to provide the services documented in the asset management plan. This excludes upgrade/new assets.

Providing services from infrastructure in a sustainable manner requires the matching and managing of service levels, risks, projected expenditures and financing to achieve a financial indicator of approximately 1.0 for the first years of the asset management plan and ideally over the 10-year life of the Long-Term Financial Plan.

7.1.2 Projected expenditures for long term financial plan

Table 7.1.2 shows the projected expenditures for the 10 year long term financial plan.

Expenditure projections are in 2018/19 real values.

Table 7.1.2: Projected Expenditures for Long Term Financial Plan ($000)

Year Operations

($000) Maintenance

($000)

Projected Capital Renewal

($000)

Capital Upgrade/ New

($000)

Disposals ($000)

2020 $4,132 $1,221 $745 $3,645 $0

2021 $5,045 $1,491 $631 $706 $0

2022 $5,332 $1,576 $1,182 $885 $0

2023 $5,664 $1,674 $175 $1,285 $0

2024 $6,091 $1,800 $191 $2,897 $0

2025 $6,889 $2,036 $1,024 $500 $0

2026 $7,145 $2,111 $85 $800 $0

2027 $7,523 $2,223 $1,465 $800 $0

2028 $7,908 $2,337 $80 $800 $0

2029 $8,302 $2,453 $1,370 $800 $0

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

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

7.3 Valuation Forecasts Asset values are forecast to increase significantly as additional assets are added to services, and new services are provided.


Fig 8: MSC Projected Asset Values

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

Fig 9: MSC Projected Depreciation Expense


7.4 Key Assumptions Made in Financial Forecasts This section details the key assumptions made in presenting the information contained in this asset management plan. It is presented to enable readers to gain an understanding of the levels of confidence in the data behind the financial forecasts.

Key assumptions made in this asset management plan are:

• That the current SRP and LTFP are sufficiently accurate to be used for informing future investment in Park and Open Space assets.

• That the rate of asset growth for Park and Open Spaces will mirror population growth at an upper level of 4% in the short-term future.

• Maintenance and Operations expenditure will remain consistent despite an increasing asset base.

• That condition profiles documented in the asset register are accurate despite many of the assets having not had a recent condition inspection.

• That Council’s Asset Register is sufficiently accurate to use the Method 1 (Asset Register) modelling for Council’s financial asset management data

• That the useful lives applied against asset classes are accurate despite them not having been reviewed for many years.

• That existing levels of service are acceptable to the community and will continue to be achieved by Council

7.5 Forecast Reliability and Confidence The expenditure and valuation projections in this AM Plan are based on best available data. Currency and accuracy of data is critical to effective asset and financial management. Data confidence is classified on a 5 level scale8 in accordance with Table 7.5.

Table 7.5: Data Confidence Grading System

Confidence Grade

Description

A Highly reliable

Data based on sound records, procedures, investigations and analysis, documented properly and agreed as the best method of assessment. Dataset is complete and estimated to be accurate ± 2%

B Reliable Data based on sound records, procedures, investigations and analysis, documented properly but has minor shortcomings, for example some of the data is old, some documentation is missing and/or reliance is placed on unconfirmed reports or some extrapolation. Dataset is complete and estimated to be accurate ± 10%

C Uncertain Data based on sound records, procedures, investigations and analysis which is incomplete or unsupported, or extrapolated from a limited sample for which grade A or B data are available. Dataset is substantially complete but up to 50% is extrapolated data and accuracy estimated ± 25%

D Very Uncertain

Data is based on unconfirmed verbal reports and/or cursory inspections and analysis. Dataset may not be fully complete, and most data is estimated or extrapolated. Accuracy ± 40%

E Unknown None or very little data held.

The estimated confidence level for and reliability of data used in this AM Plan is considered to be overall Uncertain

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


Table 7.6: Confidence by Data type

Data Confidence Comment

Demand Drivers C Use of the ICSIP 2013 information is outdated. A 2019 ICSIP will be provided later in the year (currently being revised).

Rate of Growth B That the southern townships have been incorporated into the Urban Growth Area and the development is being supported at a State Govt level. Also Broadford and Kilmore are now attracting funding from the Growing Suburbs Fund.

4 Year Capex Program B Detailed planning underway to capture projects from multiple strategies and plans and to stage projects over multiple years or as required.

LTFP D No service planning or capital works 10-year plan.

Asset Useful Lives C Industry standards applied but no follow up to see how assets are holding up in the local environment

Asset Condition Data C/D While there have been some recent asset audits (e.g Sports Lighting) there remain many assets that have not been formally audited for condition, function and capacity to provide an overall condition score.

Asset Values D There has not been a revaluation for many of the assets within the asset class.

8. PLAN IMPROVEMENT AND MONITORING

8.1 Status of Asset Management Practices9 8.1.1 Accounting and financial data sources

Accounting and Financial data has been collected from the following sources;

• TechnologyOne Finance System

• Conquest III Asset management System

8.1.2 Asset management data sources

• Conquest III Asset Management System

• Integrated Community Services Infrastructure Plan

• Mitchell Shire Council 4 Year Capital Works Program

9 ISO 55000 Refers to this the Asset Management System


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

Table 8.1: Improvement Plan

Task No

Task Responsibility Resources Required

Timeline

1 Update and complete Level of Service documents for all services relating to

Park and Open Space

Service Managers Internal Dec 2020

2 Undertake service planning for Park and Open Space Services to inform future

budget and asset requirements.

Service Managers Internal/consultant support

Dec 2020

3 Establish a formal ranking process for capital renewal projects based on

condition, risk, strategic importance, function and capacity

Relevant Service Manager/Asset

Coordinator

Internal June 2020

4 Investigate and provide a list of critical assets explaining why they are critical and risk implications for their failure

Relevant Service Manager/ Risk

Coordinator/Asset Coordinator

Internal Dec 2019

5 Provide a process for capturing asset disposal information early in the financial

year.

Asset Coordinator/Asset

Officer

Internal Dec 2019

6 Review and update asset useful (standard) lives to reflect their current

performance and current levels of service.

Asset Coordinator Internal Mar 2020

7 Establish an asset maintenance management system in order to be able

to measure maintenance delivery performance against the Open Space

Maintenance Service Standards

Asset Coordinator/Manager

Operations and Parks

Internal Aug 2019

8 Determine additional operational and maintenance requirements as a result of

new and upgraded assets and as determined through service planning

Service Managers Internal Dec 2020

9 Undertake a revaluation of all Park and Open Space assets

Asset Coordinator Internal April 2020

10 Review and update the process for conducting and delivering Park and

Open Space asset condition audits and ensure they are delivered on a cyclical

basis

Asset Coordinator/Service

Manager

Internal/Contractor Mar 2020

11 Investigate how operation and maintenance expenditure can be

recorded separately for better understanding of fixed costs.

Management Accounting Coordinator

Internal June 2020

12 Investigate if all Park and Open Space assets have been captured and recorded

in the asset register complete with attribute information.

Asset Coordinator Internal Mar 2020


13 Prepare a formal asset renewal program, in conjunction with Service Managers which will be used to develop annual

capital works programs

Asset Coordinator/Service

Managers

Internal Dec 2020

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

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

The AM Plan has a life of 2 years and is due for complete revision and updating within 6 months of each Council election.

8.4 Performance Measures The effectiveness of the asset management plan can be measured in the following ways:

• The degree to which the required projected expenditures identified in this asset management plan are incorporated into the long term financial plan,

• The degree to which 1-5 year detailed works programs, budgets, business plans and corporate structures take into account the ‘global’ works program trends provided by the asset management plan,

• The degree to which the existing and projected service levels and service consequences (what we cannot do), risks and residual risks are incorporated into the Strategic Plan and associated plans,

• The Asset Renewal Funding Ratio achieving the target of 1.0.

9. REFERENCES

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

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

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

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

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

http://www.jr.net.au/Downloads/www.ipwea.org/namsplus

http://www.ipwea.org/AIFMM

http://www.ipwea.org/IIMM


Documents

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