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Table of Contents

1. EXECUTIVE SUMMARY ...2.. . ..........................a ...............a

2. INTRODUCTION...... 3.. . . . . .. .. .

3. LEVEL OF SERVICE 8. . . . . . b . .

4. FUTURE DEMAND 15.........

5. LIFECYCLE MANAGEMEMT PLAN .........16.. . . . ........» . . . ...... . ........ . . . ........ . . .. .

6. FINANCIAL SUMMARY: 21. . . . . . . . . . .

7. IMPROVEMENT PLAN: .21. . . . . ...»............ . . . . . . ........ ........

8. APPENDICES 22.................................,,,,, ............ .........................................a . .. . . ...........

Appendix 1: Upper Lachlan Shire Council's Asset Management Policy.........................................24

Appendix 2: Upper Lachlan Shire Council's Accounting Policy and Procedure......................................... 39

Appendix 3: Upper Lachlan Shire Council's Unfunded Works list 2012/2013........................................... 40

1. EXECUTIVE SUMMARY

The _ Upper Lachlan Shire Council provides an extensive range of infrastructure assets comprisingroads, footpaths, kerb and gutter, stormwater, water and sewerage, buildings, recreation facilitiesand plant and equipment to provide a safe environment for all to enjoy the unique character of thisarea of New South Wales.

The Infrastructure assets consist of:

. Roads Approx. 1,950 kmBridges / Culverts 220 structures.

Footpaths 15.8 km.

Kerb and Gutter 38.8 km

Reticulation (Water Supply/Sewerage Services) 107.7 km.

Other assets; including Stormwater, Drainage.

VALUE OF THE INFRASTRUCTURE:

The values of the infrastructure covered by this Plan are identified in the following.

table:

INFRASTRUCTURE FAIR VALUE

30 June 2011

Roads-Sealed Roads $197,428,000Roads- Unsealed Roads $157,814,000Bridges - Concrete, Timber and Culvert $46,391,000Water Supplies $24,434,000

Sewerage Services $22,112,000Buildings $33,679,000Other Structures $3,592,000Urban Stormwater $2,346,000Kerb and Gutter $2,787,000Footpath $1,555,000Land - Operational and Community $4,175,000TOTAL $496,313,000

There are two key indicators of cost to provide the Infrastructure Asset services:

The life cycle cost being the average cost over the life cycle of the asset, and.

The total maintenance and capital renewal expenditure required to deliver existing service.

levels in the next 10 years covered by the Council's long term financial plan.

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2. INTRODUCTION

Infrastructure management is a proactive, rather than reactive, discipline for the management ofCouncil Assets and Facilities and utilises data to determine:

What infrastructure Council has?.

What condition the infrastructure is in, and therefore its expected life?.

How much is required to maintain a certain service level?.

Can Council afford this level of service with current funding levels?.

If not, how does Council intend to manage this Gap (i.e. reduce service levels, increase funding,.

dispose of assets, or lobby for additional grants from other tiers of Government)

A ftxmal approach to the management of infrastructure assets is essential in order to provideservices in the most cost-effective manner, and to demonstrate this to customers, investors andother stakeholders.

This infrastructure management plan covers the following infrastructure assets:

ITEM INFRASTRUCTURE GROUP

All the components and facilities associated with the Road network. These can beTransport categorised into the following groups:

Roads (components include Surface, Pavement, and Earthworks).

Footpaths.

Bridges and Culverts.

Kerb and Guttering.

Council has a large water network that distributes water from various dams and bore fieldsWater Supply to the villages of Gunning, Dalton, Crookwell and Taralga.

The components for water include:

. Bores

. Dams

Pump stations.

. Reticulation

. Water Treatment Plants

. Reservoirs

. Telemetry

Council runs Sewerage systems at Gunning, Crookwell and Taralga.Sewerage The components for sewer include:

Sewerage Treatment Works.

. Reticulation

Pump stations.

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Council has a significant number of buildings. These buildings can be categorised into theBuildings following groups:

Offices / Chambers.

. Halls

. Amenities

. Residential

RFS / Emergency Services.

. Museums

. Libraries

. Recreation

Community Centres.

Although land is an asset that generally does not depreciate, it is important to know whatLand land Council has, and to determine if they provide a continuing benefit to the community.

Land can be defined in the following categories:

Freehold - Operational Land.

Trust - Community Land.

Crown - Community Land.

Land Under Roads.

rhe recreation category includes sporting fields, parks and swimming pools.Recreation

Swimming pools.

Sporting fields.

. Parks

Play equipment.

Landscaping.

. Irrigation

. Paths

Furniture (includes bins, signs, tables, chairs, etc).

Urban rhe Urban Stormwater portfolio includes all the urban networks to carry water flows. ThisStormwater portfolio includes:

. Kerb and Gutter

Stormwater pipes.

. Culverts

rhis final group captures the assets that are not recorded in the other portfolios. Each of theseOther may have their own Asset Management Plan.

Airport.

. LightingFencing.

. Communications and TelecommunicationsComputers and Office Equipment.

Plant Fleet - Light and Heavy vehicles.

. Cemeteries

Open space.

Irrigation.

Trees and Landscaping.

Furniture and Fittings.

. Caravan Parks

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STRATEGIC OBJECTIVES

The Council intends to operate and maintain the infrastructure network to achieve the followingstrategic objectives:

Ensure the infrastructure assets are maintained at a safe and functional standard as set out.

in this Infrastructure Plan.

To achieve optimal use of resources by ensuring maximum life is obtained from an asset.

without compromising safety.

Capital and maintenance activities are undertaken in a manner to extend/prolong the life of.

the original asset and ensure its suitability to current user requirements.

INFRASTRUCTURE PLAN GOALS

The Goal of infrastructure management is to meet a required level of service in the most costeffective manner through the management of assets for present and future customers.

The key elements of infrastructure management are:

Take a lifecycle approach.

Developing cost-effective management strategies for the long-term.

Providing a defined level of service and monitoring performance.

Understanding and meeting the impact of growth through demand management and.

infrastructure investment

Managing risks associated with asset failures.

Sustainable use of physical resources.

Continuous improvement in asset management practices.

INFRASTRUCTURE MANAGEMENT BENEFITS

The benefits of an improved infrastructure management strategy are;

Improved governance and accountability

Enhanced service management and customer satisfaction.

Improved risk management.

Improved financial efficiency

. More sustainable decisions

Council's vision is:

To be a diverse local government area that provides various lifestyle, business enterprise,leisure and recreation alternatives, whilst ensuring environmental sustainability, preservationof our history a sense of belonging in our community

Council's mission is:

To provide services and facilities to enhance the quality of life and economic viability within theCouncil area.

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INTEGRATED FRAMEWORK

The Independent Inquiry into the Financial Sustainability of Local Government found that the LocalGovernment Sector is potentially facing a real infrastructure funding crisis. The Report examinedwhether NSW local councils are sustainable as presently constituted and funded.

The following extract from the report highlights the situation:

"... a number of pressing problems that need urgent attention. The biggest of these is a hugebacklog in infrastructure renewals (over $6 billion), which is expected to grow to almost $21billion within 15 years if the annual renewals gap (the difference between the rate at whichcouncils' physical assets are depreciating and the rate at which they are being replaced) stays ataround $500 million per annum. "

The results of this report is the legislation by the Department of Local Government that mandatesthe valuation of Council's Assets at fair value, and the creation of a new planning and reportingframework for NSW Local Government generally as depicted below

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ASSET MANAGEMENT MATURITY OF Upper Lachlan Shire Council

Section Maturity Description

Minimum - Corporate expectations expressed informally andAM Policy Development simply e.g. "all departments must update AM Plans very three

//years

Levels of Service and Performance Minimum -Asset Contribution to organisation's objectivesManagement and some basic levels of service have been defined

Minimum - Demand forecasts based on experienced staffDemand Forecasting predictions with consideration of known past demand trends

and likely future growth patternsCore - Sufficient information to complete asset valuation-asfor 'minimum' plus replacement cost and asset age/life. AssetAsset Register Data

hierarchy, asset identification and asset attribute systemsdocumented

Minimum -Condition assessment at asset group level ('top-Asset Condition down). Supports minimum requirements for managing critical

assets and statutory requirements (e.g. safety)Minimum - Critical assets understood by staff involved inRisk Management

maintenance / renewal decision

Minimum - AM decisions based largely on staff judgment andDecision Makingagreed corporate priorities

Minimum - Operational responses are understood by keystaff, but plans may not be well-documented, mainly reactiveOperational Planningin nature. Asset utilization is measured of some key assets buy

is not routinely ana lysedMinimum- Organisational Objectives and how asset functions

Maintenance Planning support these are understood. Compliant with legislation andregulations. Maintenance records maintained

Minimum -There is a schedule of proposed capital projectsCapital Works Planning and associated costs, based on staff judgment of future

.

requirements

Minimum - Assets re-valued in compliance with financialreporting and accounting standards. 10 year financial

Financial and Funding Strategic forecasts are based on extrapolation of past trends and broadassumptions about the future. Expenditure categories

compliant with FRS

Minimum-AM allocated primarily to one or two people whoAM Teamshave AM experience

Minimum - Plan contains basic information on assets, serviceAM Plans levels, planned works and financial forecast (5-10 years) and

future improvementsMinimum -Asset register can record core asset attributes -

Information System size, material, etc. Asset information reports can be manuallygenerated for AMP input

Minimum -Service delivery roles clearly allocated (internalService Delivery Mechanismsand external), generally following historic approachesMinimum - Simple process documentation in place forQuality Management

service-critical activities

Minimum - Improvement actions identified and allocated toImprovement Planningappropriate staff.

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3. LEVEL OF SEVICE

CUSTOMER RESEARCH AND EXPECTATIONS

Council participates in a number of community consultative processes to develop future direction ofthe wider community.

The Social and Community plan incorporates issues that have an impact on the community well being,

^^^êa^n/tetrî^^T^h^îTsî^S^ce^l^^mti^^î^fau(ei?iâ^c^î^5^^^The plan has been formulated in accordance with the requirements of Local Government Act 1993.With the assistance from the Greater Southern Area Health Service and use of various data source

^r^^^Tt^lYeîteî îa^ iis^^?F^by»^n.cJL^'^5^ît-a^L0^ w^^rûJÔU-t-tê-îr_e".J!le-Pla.nJ5le_ntifi. thecommunity's priorities and expectations for thenext ten years and outlines strategies to achieve those goals.The community Strategic plan is a long tern visioning document that expresses community' slong term aspirations.

LEGISLATIVE REQUIREMENTS

Council has to meet many legislative requirements including Australian and State Legislation andRegulations.

These include:

Legislation Requirement

Local Government & Planning Minister' To develop a nationally consistent asset managementCouncil - Local Government financial framework, including the elements of an assetSustainability Nationally Consistent Frame management plan, to support improvement in localworks - Framework 2 - Asset Planning and governments' asset management performance andManagement May 2009 sustainabilityDLG Integrated Planning NSW the Local The specific aims of the Integrated Planning andGovernment Amendment (Planning and Reporting framework are to:Reporting) Act 2009 was assented to on 1October 2009.

improve integration of various statutory.

planning and reporting processes undertaken bycouncils as required by the Local Government Act1993, the Department's Guidelines and theEnvironmental Planning and Assessment Act 1979

strengthen councils' strategic focus.

streamline reporting processes.

. ensure that the Local Government Act 1993and the Integrated Planning and Reoortina

Guidelines support a strategic and integratedapproach to planning and reporting by localcouncils

Local Government Act 1993 The purposes of this Act are as follows:(a) to provide the legal framework for an effective,

efficient, environmentally responsible and opensystem of local government in New South Wales,

(b) to regulate the relationships between the peopleand bodies comprising the system of localgovernment in New South Wales,

(c) to encourage and assist the effective participationof local communities in the affairs of localgovernment,

(d) to give councils:

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the ability to provide goods, services and facilities,.

and to carry out activities, appropriate to thecurrent and future needs of local communities andof the wider publicthe responsibility for administering some regulatory.

systems under this Acta role in the management, improvement and.

development of the resources of their areas,e) to require councils, councillors and councilemployees to have regard to the principles ofecologically sustainable development in carrying outtheir responsibilities.

Roads Transport (Safety and Traffic Facilitates the adoption of nationally consistent roadmanagement) Act 1999 rules in NSW, the Australian Road Rules. IT also makes

provision for safety and traffic management on roadsand road related areas including alcohol and otherdrug use, speeding and other dangerous driving,traffic control devices and vehicle safety accidents

Roads Act 1993 The objects of this Act are:a) to set out the rights of members of the public to

pass along public roads, andb) to set out the rights of persons who own land

adjoining a public road to have access to thepublic road, and

c) to establish the procedures for the opening andclosing of a public road, and

d) to provide for the classification of roads, ande to provide for the declaration of RMS and other

public authorities as roads authorities for bothclassified and unclassified roads, and

f) to confer certain functions (in particular, thefunction of carrying out road work) on RMS andon other roads authorities, and

g) to provide for the distribution of the functionsconferred by this Act between RMS and otherroads authorities, and

h) to regulate the carrying out of various activitieson public roads.

Work Health and Safety Act 2011 Aims to secure the health, safety and welfare ofpeople at work. It lays down general requirementswhich must be met at places of work in NSW. Theprovisions of the Act cover every place of work inNSW. The Act covers self employed people as well asemployees, employers, students, contractors andother visitors.

Work Health and Safety Regulation 2011 Regulation on the control and management of risk inthe work place

Protection of the Environment Operation The objects of this Act are as follows:Act 1997 (POEO Act) a) to protect, restore and enhance the quality of the

environment in New South Wales, having regard tothe need to maintain ecologically sustainabledevelopment,

(b) to provide increased opportunities for publicinvolvement and participation in environmentprotection,

(c) to ensure that the community has access torelevant and meaningful information about

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pollution,(d) to reduce risks to human health and prevent the

degradation of the environment by the use ofmechanisms that promote the following:

(i) pollution prevention and cleaner production,ii) the reduction to harmless levels of the dischargeof substances likely to cause harm to theenvironment,

ii) the elimination of harmful wastes,(iii) the reduction in the use of materials and the re-

use, recovery or recycling of materials,(iv) the making of progressive environmental

improvements, including the reduction of pollutionat source,

(v) the monitoring and reporting of environmentalquality on a regular basis,

(e) to rationalise, simplify and strengthen theregulatory framework for environment protection,

(f) to improve the efficiency of administration of theenvironment protection legislation,

(g) to assist in the achievement of the objectives ofthe Waste Avoidance and Resource Recovery Act2001.

Disability Services Act 1993 The objects of this Act are:(a) to ensure the provision of services necessary to

enable persons with disabilities to achieve theirmaximum potential as members of the community,and

(b) to ensure the provision of services that:(i) further the integration of persons with disabilities

in the community and complement servicesavailable generally to such persons in thecommunity, and

(ii) enable persons with disabilities to achieve positiveoutcomes, such as increased independence,employment opportunities and integration in thecommunity, and

(iii) are provided in ways that promote in thecommunity a positive image of persons withdisabilities and enhance their self-esteem, and

(c) to ensure that the outcomes achieved by personswith disabilities by the provision of services for themare taken into account in the granting of financialassistance for the provision of such services, and

(d) to encourage innovation in the provision ofservices for persons with disabilities, and

(e) to achieve positive outcomes, such as increasedindependence, employment opportunities andintegration in the community, for persons withdisabilities, and

(f) to ensure that designated services for personswith disabilities are developed and reviewed on aperiodic basis through the use of forward plans.

Australian Accounting Standards. Sets out the financial reporting standards relating toinfrastructure assets. Standards of particular relevanceto Infrastructure Assets include:

AASB116 Property, Plant & Equipment - prescribes.

requirements for recognition and depreciation o fproperty, plant and equipment assets

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AASB136 Impairment of Assets-Aims to ensure.

that assets are carried at amounts that are not i in

excess of their recoverable amountsAASB1021 Depreciation of Non-Current Assets -.

Specifies how depreciation is to be calculatedAAS1001 Accounting Policies - specifies the policies.

that council is to have for recognition of assets anddepreciationAASB1041 Accounting for the reduction of Non-.

Current Assets specifies the frequency and basis ofcalculating depreciation and revaluation basis usedfor assets

AAS1015 Accounting for acquisition of assets -.

method of allocation the value to new assets onacquisition

Upper Lachlan Road Management Policy Sets out the criteria for maintenance, level of service,Response time and Grade time based on RoadHierarchy

Upper Lachlan Footpath Policy Set out the priority for maintaining and upgrading offootpaths

Austroads Guides, Commentaries and Austroad works with local government to improveReports Australia's roads and transport systems, recognizing

the value and importance of developing the local roadcomponent of the national road network

Australian Standards Include;Australian Standard 1742.3-1996 - Manual of.

uniform traffic control devices - Traffic controldevices for works on roadsGuide to Traffic Engineering Practice (part 14.

Bicycles)Integrated Asset Management Guidelines for Road.

Networks APR202:2002 Austroads

AS/NZS ISO 31000:2009 - Risk Management.

Principles and guidelines

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CURRENT AND DESIRED SERVICES LEVELS

The following levels of service have been adopted for this Plan:

(i) Sealed Roads

Notes:

a) The level of service documents referred to hereunder have been developed in conjunction withthe key performance indicators included in Council's 2012/2013 Operational Plan.

b) Council's response to customer requests will be recorded using Council's Customer RequestManagement (CRM) system.

c) Road Safety issues relate to road related issues only (will not include speed, alcohol and otherdrug related incidents).

Key Performance Level of Service Performance Performance CurrentIndicator Measure Process Target PerformanceQuality Provide a smooth Customer service < 5 per month > 5 per month

ride requestsFunction Ensure roads Customer service < 2 per month > 2 per month

meet user requestsrequirements fortravel time and

availabilitySafety Provide safe Number of injury < 2 per month < 2 per month

roads free from accidentshazards

Maintenance Ensure condition Inspection State Roads State RoadsInspections of asset records inspected every inspected every

week. Regional week. RegionalRoads inspected Roads inspectedevery 3 months. every 3 months.Local roads Local roads

inspected every 3 inspected every 3months months

Maintenance Ensure road Work records State and State andResponse safety Regional Roads Regional Roads

within 1 day. within 1 day.Local roads within Local roads within5 days 5 days

Cost Provide services Maintenance cost Within budget Within budgetin a cost effective per kmmanner

(ii) Unsealed Roads

Notes:



c) Road Safety issues relate to road related issues only (will not include speed, alcohol and otherdrug related incidents).

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ride requestsFunction Ensure roads Customer service < 2 per month > 2 per month

meet user requestsrequirements fortravel time and

availabilitySafety Provide safe Number of injury < 2 per month < 2 per month

roads free from accidentshazards

Maintenance Ensure condition Inspection State Roads State RoadsInspections of asset records inspected every inspected every

week. Regional week. RegionalRoads inspected Roads inspectedevery 3 months. every 3 months.Local roads Local roads

inspected every 6 inspected every 6months months

Maintenance Ensure road Work records State and State andResponse safety Regional Roads Regional Roads

within 1 day. within 1 day.Local roads within Local roads within

5 days 5 daysCost Provide services Maintenance cost Within budget Within budget

in a cost effective per kmmanner

(iii) Footpaths

Notes:



c) Council's footpath maintenance policy also applies.

d) Works carried out in this area are limited to the available budget.


surface requestsFunction Provide access to Access not All residential Not all residential

and from CBD and provided areas serviced and commercialpublic facilities areas serviced

Safety Provide footpaths Number of trips < 2 per month < 2 per monthfree from hazards and falls

Maintenance Ensure condition Inspection Inspected InspectedInspections of asset records annually annuallyMaintenance Ensure public Work records Within two days Within two daysResponse safetyCost Provide services Maintenance cost Within budget Within budget

in a cost effective per kmmanner

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(iv) Kerb and Gutter and Stormwater

Notes:

fi!J^..IT^fLfJ^VJ5T-d^5".m.e-r!ts,.reêê(:l^,h-e,r-e-u."-d^1' have been developed in conjunction withthe key performance indicators included in 2012/2013 Operational Plan.


c) Council's footpath maintenance policy also applies.

d) Works carried out in this area are limited to the available budget.

Key Performance Level of Service Performance Performance CurrentIndicator Measure Process Target PerformanceQuality Provide barrier to Customer service < 2 per month < 2 per month

stormwater requestsentering property

Function Provide Access not All stormwater Not all residentialmechanism to provided directed to water and commercialtransport of course areas servicedstormwater

Safety Provide unbroken Number of trips < 2 per month < 2 per monthkerb and gutter and fallsand drainagestructures

Maintenance Ensure condition Inspection Annually Annuallynspections of asset records

Maintenance Ensure public Work records State and State andResponse safety Regional Roads Regional Roads

within 1 day. within 1 day.Local roads within Local roads within2 days 2Jays

Cost Provide services Maintenance cost Within budget Within budgetin a cost effective per kmmanner

(V) Alternative Landing Area

Notes:

?2711T..ITêL5f-servicT-d,?CLlments referredto herûrlderl?_avebeen developed in conjunction withthe key performance indicators included in Council's 2012/2013 Operational Plan.

b).cou"c"'s.response to customer requests wi" be recorded using councN's Customer RequestManagement (CRM) system.

Key Performance Level of Service Performance Performance CurrentIndicator Measure Process Target PerformanceQuality Provide a smooth Customer service Nil per month Nil per month

surface requestsFunction Provide aircraft Access not Nil customer Nil customer

access and egress provided service requests [ service request.

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Safety Provide runway Number of Nil accidents Nil accidentsfree from hazards accidents

Maintenance Ensure condition Inspection As per policy As per policyInspections of asset recordsMaintenance Ensure public Work records As per policy As per policyResponse safety

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Cost Provide services Maintenance cost Within budget Not within budgetin a cost effective per annummanner

(vi) Buildings

Key Performance Level of Service Performance Performance CurrentIndicator Measure Process Target PerformanceQuality Buildings suitable Customer service < 2 per asset per < 2 per asset per

for purpose requests month monthFunction Easy access and Customer service < 2 per asset per < 2 per asset per

suitable for use requests month monthSafety Provide buildings Number of < 2 per asset per < 2 per asset per

free from hazards accidents month monthMaintenance Ensure condition Inspection Buildings No scheduledInspections of asset records inspected once inspections

each year undertakenMaintenance Ensure public Work records Within 3 days. Within 5 daysResponse safetyCost Provide services Maintenance cost Within budget Not within budget

in a cost effective per annummanner

4. FUTURE DEMAND

WHAT IS OUR CURRENT SITUATION

In the early 90's, with the introduction of the accounting standard AAS27, Councils, including theUpper Lachlan Shire Council (and former Councils), were required to record and value their assets.This asset collection was undertaken within a number of different departments of Council resulting indifferent levels of detail and different storage locations throughout the organisation. There was noneed to revalue the assets, so an end-of-year process of adding new assets and applying another yearof depreciation was carried out. Inaccuracies were introduced over time, and these inaccuracies aredifficult to locate. At the same time, the original valuation that was calculated for the asset groups hasbecome inaccurate due to CPI, new standards, expectations, and regulatory requirements. As the databecame less relevant, there was less importance placed on keeping the data up to date.

However, the Division of Local Government (DLG) determined that all asset classes would be valuedat fair value in accordance with AASB 116 in a staged approach as follows:

2006/2007 - Water and Sewerage;

2007/2008 - Buildings, Operational Land, and Plant and Equipment;

2009/2010 - Roads, Bridges, Footpaths, Drainage Assets and Land under Roads;

2010/2011 - Community Land, Land improvements, other structures and other assets.

An Asset Management Policy was adopted by Council during October 2009 and a copy is attachedas Appendix 1.

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DEMAND FORECASTING

Factors affecting demand include population change, changes in demographics, seasonal factors,vehicle ownership, consumer preference and expectations, economic factors, agricultural practices,environmental awareness, etc.

Demand factor trends and impacts on service delivery have been adopted as shown it table below:

Demand factors Present position Projection Impact on ServicePopulation 7,559 7,800 by 2015 Minimal impact on

current servicesDemographics 18% of population 24% of population Increase in demand of

aged over 65 aged over 65 in 2015 paved and smooth

footpathsRegional roads Increase in Tree Traffic volumes Increase on regional

change work travelling increase by 10% 2015 roads &usageto large regional towns concerns on condition

CHANGES IN TECHNOLOGY

Technology changes are forecast to affect the delivery of services covered by this plan

Technology changes, more particularly those related to climate change, energy consumption patternsand water usage are forecast to have some effect on service delivery.

Specific technology changes for Transport infrastructure are outlined in the table below, futuredevelopment with Asset Management will deliver matrix for other asset categories.

Fechnology Change Effect on Service DeliveryIncreased tonnage allowed on Semi-trailer and B Increase maintenance costs due to impact fromDoubles increased weight.Introduction of new machinery Reduced costs, increased productivity, $, WHSRoad and renewal Treatments Increased residual life and decreased lifecycle

cost

Improvements in road design and pavement Increased resheet / seal lifematerials

Asset data capture by video inspection and the Spatial location and condition of assets able to betransfer to GIS verified from GIS reducing the need for reactive

inspectionsIncrease development of deterioration models Increase accuracy in predicting failure modesfor Australian conditions & roads based on local weather and traffic patterns

5. LIFECYCLE MANAGEMENT PLAN

The lifecycle management plan details how Council plans to manage and operate the assets at theagreed levels of service while optimizing life cycle costs

CONDITION RATING

The table above indicates that the Upper Lachlan Shire Council has a significant number ofinfrastructure categories. There is a lot of information to be collected prior to an accuratedetermination of the condition of this infrastructure; however, an assessment based on availableinformation of the condition can be made based on experience, local knowledge, and age profiles thathave been collected. There is also a considerable cost in the collection of condition information.

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A 1 to 5 condition assessment has been developed and applied for each infrastructure category. Thefollowing table provides the general descriptions for the assigned rank:

RANK DESCRIPTION OF CONDITION

1 Excellent Condition: Only cyclic maintenance required

2 Very good: Minor maintenance required plus cyclic maintenance3 Good: Significant maintenance required to return to accepted level of service4 Average: Significant renewal/upgrade required

5 Poor: Asset unserviceable

A condition assessment table has been developed for each infrastructure category so that aconsistent evaluation of the condition of each item can be applied during routine inspections and overtime the condition assessments will give an indication of the lifecycle of the item and provide abetter indication when renewal of the asset is required.

TRANSPORT INFRASTRUCTURE:

The condition of transport infrastructure is available for the whole Transport network and thefollowing table indicates the condition based on local knowledge:

CATEGORY RANK RANK RANK RANK RANK LENGTH/1 2 3 4 5 NUMBER

Regional Main 10% 36% 19% 29% 7% 207kmRoadssealed

Regional Main 0% 63% 37% 0% 0% 46kmRoads unsealed

Bridges 0% 75% 25% 0% 0% 8

(Concrete)Regional MainRoads

Bridges 0% 0% 50% 50% 0% 2(Timber)Regional Main

Roads

Drainage 0% 57% 43% 0% 0% 37Structures

Regional Main

Roads

Local Roads 31% 40% 23% 5% 1% 552kmsealed

Local Roads 3% 26% 48% 19% 5% 1177 kmunsealed

Bridges 0% 43% 50% 4% 4% 32

(Concrete) LocalRoads

Bridges 0% 9% 43% 30% 17% 23(Timber)Local Roads

Drainage 0% 39% 52% 8% 1% 115Structures LocalRoads

Footpaths 0% 44% 34% 22% 0% 15,765m

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WATER INFRASTRUCTURE:

The following table is based on the age profiles and local knowledge of the condition of each item:CATEGORY RANK RANK RAM K RANK RANK LENGTH/

1 2 3 4 5 NUMBERBores 63% 22% 12% 3% 0% 14

Dams 0% 100% 0% 0% 0% 2

Pump Stations 45% 30% 12% 13% 0% 8Water 0% 55% 35% 10% 0% 4Treatment

Plants

Reservoirs 36% 32% 24% 8% 0% 6

Reticulation 63% 22% 12% 3% 0% 65,897m

Felemetry 65% 45% 0% 0% 0% 3

The recording of main breaks is carried out to give an indication of the mains that are approachingthe end of their useful life. A number of main breaks within an area becomes a nuisance to theneighbouring properties and indicates that a main may be at, or below the level of service expectedby the community. A register of main breaks provides an indicator that mains, that have had anumber of breaks, are required to be renewed.

SEWER ASSETS:

The following table is based on the age profiles and local knowledge of the condition of each item:

CATEGORY RANK RANK RAMK RANK RANK LENGTH/1 2 3 4 5 NUMBER

Sewerage 25% 45% 20% 10% 0% 3TreatmentPlants

Pump Stations 63% 22% 12% 3% 0% 8Reticulation 45% 30% 12% 13% 0% 41,770m

Sewer chokes are an indicator that a sewer main may be approaching the end of its useful life and asewer choke register has been developed to record the occurrences and to provide reports.

BUILDING ASSETS:

The following table shows the building infrastructure and a condition rank based on the age profilesand local knowledge:


Offices / 0% 0% 25% 75% 0% 6Chambers

Halls 0% 0% 20% 80% 0% 10

Residences 0% 80% 20% 0% 0% 4

Amenities 10% 25% 25% 30% 10% 9

RFS/ 25% 65% 5% 5% 0% 32

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EmergencyServices

Museums 0% 0% 75% 25% 0% 8

Libraries 0% 50% 50% 0% 0% 2

Water / Sewer 50% 30% 10% 10% 0% 13

Recreation 5% 15% 60% 20% 0% 31

Community 20% 25% 35% 20% 0% 7Centres

Other 25% 60% 10% 5% 0% 7

URBAN STORMWATER INFRASTRUCTURE:

A condition assessment based on physical inspection has been carried out and the following tableshows condition rank.


Kerband Gutter 0% 65% 19% 16% 0% 38,776mCulverts 0% 59% 28% 13% 0% 304.6m

Pipes 0% 36% 18% 27% 0% 3,537m assessedTotal 4,387m

Note: Pipe culverts 850m have not been condition ratedRECREATION INFRASTRUCTURE:

The following table is based on local knowledge of the condition of the item:


Swimming pools 0% 50% 50% 0% 0% 2

Sporting fields/ 67% 13% 15% 5% 0% 41

Parks/Reserves

LAND ASSETS:

Land Assets do not need a condition assessment as works on land involves maintenance items (such asmowing, weed control and boundary fence maintenance) or assets identified in other AssetPortfolios.

OTHER INFRASTRUCTURE:

Infrastructure registers are to be developed for each portfolio in this group and conditionassessments can be carried out at that time.

ASSET VALUATION

The financial reporting ratio as of 30 June 2011 covering Building and infrastructure Renewals - Ratioat 1.00% and averaging 1.33% over the last four (4) years. Asset consumption rate and Asset upgrade/ expansion rate to be develop in revised plans.

19

RISK MANAGEMENT

The risk Management process identifies credible risk, the likelihood of the risk event occurring, theconsequence should the event occur. Future plans will use these factors to develop risk ratings, anddevelop a risk management plan for non- acceptable risks.

Critical risks are those assessed as:

Extreme (23-25) - requiring immediate stop work and corrective action and;

High (20 -22) - requiring prioritized corrective action with immediate supervision

Refer to critical risks in the Risk Register

MAINTENANCE PLAN

Maintenance includes reactive, planned and specific maintenance work activities.

Reactive maintenance is unplanned repair work carried out in response to service requests andmanagement/supervisory directions.

Planned maintenance is repair work that is identified and managed through a maintenancemanagement ^system (MMS). MMS activities include inspection, assessing the condition againstfailure/breakdown experience, prioritising, scheduling, actioning the work and reporting what wasdone to develop a maintenance history and improve maintenance and service delivery performance.

Specific maintenance is replacement of higher value components/sub-components of assets that isundertaken on a regular cycle including repainting, building roof replacement, etc. This work generallyfalls below the capital/maintenance threshold but may require a specific budget allocation.

RENEWAL PLAN

Renewal 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 andabove restoring an asset to original service potential is upgrade/expansion or new works expenditure.

Assets requiring renewal are identified from one of three methods:

Method 1 uses Asset Register data to project the renewal costs for renewal years using.

acquisition year and useful life, or

Method 2 uses capital renewal expenditure projections from external condition modelling.

systems (such as Pavement Management Systems), orMethod 3 uses a combination of average network renewals plus defect repairs in the.

Renewal Plan and Defect Repair Plan worksheets on the 'Expenditure template'.

Renewal will be undertaken using 'low-cost' renewal methods where practical. The aim of 'low-cost /

renewals is to restore the service potential or future economic benefits of the asset by renewing theassets at a cost less than replacement cost.

20

6. FINANCIAL SUMMARY:

The long term financial modelling comprising part of Councils Financial Plan contains the financialrequirements resulting from all the information presented in the previous sections of thisInfrastructure Plan.

The financial projections will be improved as further information becomes available on desiredlevels of service and current and projected future infrastructure performance.

Providing services in a sustainable manner will require matching of projected infrastructurerenewals to meet agreed service levels with planned capital works programs and available revenue.

This Infrastructure Plan will be utilised to provide guidance on future service levels and resourcesrequired to provide these services.

Council will also consider a range of service level scenarios that predict the likely serviceconsequences of the current funding level, the target funding level and options to extendinfrastructure life.

7. IMPROVEMENT PLAN:

To deliver the goals and objectives of Council's Plans Council will to commit to a number of keyactions.

Objective 1

Ensure the infrastructure assets are maintained at a safe and functional standard as set out in thisInfrastructure Plan.

Key Actions Responsibility Time FrameReview inspection schedules for Manager of Works and Assets December 2012all asset groups & Risks Co-Ordinator

Develop and implement an Manager of Works June2013

action report base oninspection fault information,Risk rate the at faults utilizingReflect software systemDevelop standard practices & Manager of Works June2013capacity to be used formaintenance and repairactivities

Objective 2

To achieve optimal use of resources by ensuring maximum life is obtained from an asset withoutcompromising safety.

Key Actions Responsibility Time FrameImplementation of The Reflect Manager of Works and Asset & June 2013Database in ULSC Risks Co-Ordinator

Framing of employees in the Manager of Works June 2013use of MMS & new hardware

Implementation of risk based Manager of Works and Asset June2013decision making techniques to &Risks Coordinator

increase resource efficiency

21

Objective 3

Capital and maintenance activities are undertaken in a manner to extend/prolong the life of theoriginal asset and ensure its suitability to current user requirements.

Key Actions Responsibility Time FrameIntroduce a culture of All Staff Ongoinginformation sharing andcontinuous work improvementto enable ready adoption ofnew technology and systemsImplementation of standard Manager of Works and Assets June 2013operating standards, with and Risks Coordinator.internal checks and sign offInspection and maintenance All Staff Ongoingcycles to match current servicestandards & communityexpectations

8. APPENDICES:

22

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Upper Lachlan Shire CouncUProjected Capital Upgrade/New Works Program - Infrastructure

($000)Year Item Description Estimate2013 Urban local roads -Bitumen Resealing, Pavement Rehab, reconstruction & sealing $415

2 Roads to recovery Gravel Resheeting program $8233 Rural local roads- Gravel Resheeting program $1504 Rural Local Sealed Rd - Bitumen Resealing $3905 Rural Local Sealed Rd - Pavement Rehabilitation $1506 Cullerin Road Rehabilitation - (funded by RMS (RTA) Payment) $507 Culvert Restoration - Hammond's Creek - Grabine Road $608 Relocate Greenmantle Rd $309 Regional Roads - Taralga Road, Ex3x3, repair & Block grant fund $111110 Regional Roads - Timber Bridge Replacement Program $011 Local Roads - Timber Bridge Replacement Program $012 Footpaths - Disabled access, Cycle way, construction $53

Kerb & Guttering - 50% towns / village contributions, Laggan Rd and Gram St & Laggan Rd and13 Clifton St $56.514 Other Infrastructure - Bus stops, Crookwell lighting upgrade Spring St car park $12.515 Waste Centres, Rubbish tips and Street Cleaning $4516 Public Cemeteries - land Acquisition , lawn plaque beams $12017 Storm water & Drainage - $8518 Public Conveniences and Amenities $2519 Engineering, Purchasing & Works Supervision $5020 Plant & Equipment $1,12921 Domestic Waste Management (DWM) - Truck GSP, facilities upgrade, Loan reduction $3522 Water supply - Dalton 405.4

23 Water supply - Taralga $906.6024 Water supply - Gunning ($6,900,000 over 2 years) $3,458.425 Water supply - Crookwell $13.2026 Sewerage fund - Taralga $3027 Sewerage fund - Gunning $16028 Sewerage fund - Crookwell $132.1

2013 Total $9,895.4

24

($000)Year Item Description Estimate

~»s

2014 Urban local roads -Bitumen Resealing, Pavement Rehab, reconstruction & sealing2 Roads to recovery Gravel Resheeting program

Rural local roads- Gravel Resheeting program4 Rural Local Sealed Rd - Bitumen Resealing5 Rural Local Sealed Rd - Pavement Rehabilitation6 Regional Roads - Taralga Road, Ex3x3, repair & Block grant fund7 Regional Roads - Timber Bridge Replacement Program8 Local Roads - Timber Bridge Replacement Program9 Footpaths - Disabled access, Cycle way, construction

Kerb & Guttering - 50% towns / village contributions, Laggan Rd and Gram St & Laggan Rd and10 Clifton St

11 Other Infrastructure - Bus stops, Crookwell lighting upgrade Spring St car park12 Waste Centres, Rubbish tips and Street Cleaning13 Public Cemeteries -

14 Storm water & Drainage -15 Public Conveniences and Amenities

16 Engineering, Purchasing & Works Supervision17 Plant & Equipment18 Domestic Waste Management (DWM) - Truck GSP, facilities upgrade, Loan reduction19 Water supply - Dalton20 Water supply - Taralga21 Water supply - Gunning ($6,900,000 over 2 years) $3,45022 Water supply - Crookwell23 Sewerage fund - Taralga24 Sewerage fund - Gunning25 Sewerage fund - Crookwell26

2014 Total

25

($000)Year Item Description Estimate2015 Urban local roads -Bitumen Resealing, Pavement Rehab, reconstruction&^ealing

2 Roads to recovery Gravel Resheeting program3 Rural local roads- Gravel Resheeting program4 Rural Local Sealed Rd - Bitumen Resealing5 Rural Local Sealed Rd - Pavement Rehabilitation

6 Regional Roads - Taralga Road, Ex3x3, repair & Block grant fund7 Regional Roads - Timber Bridge Replacement Program

Local Roads - Timber Bridge Replacement Program9 Footpaths - Disabled access, Cycle way, construction

Kerb & Guttering - 50% towns / village contributions, Laggan Rd and Oram St & Laggan Rd and10 Clifton St

11 Other Infrastructure - Bus stops, Crookwell lighting upgrade Spring St car park12 Waste Centres, Rubbish tips and Street Cleaning13 Public Cemeteries -


16 Engineering, Purchasing & Works Supervision17 Plant & Equipment18 Domestic Waste Management (DWM) - Truck GSP, facilities upgrade, Loan reduction19 Water supply - Dalton20 Water supply - Taralga21 Water supply - Gunning22 Water supply - Crookwell23 Sewerage fund - Taralga24 Sewerage fund - Gunning25 Sewerage fund - Crookwell26

2015 Total

26

($000)Year Item Description Estimate

?;

2016 Urban local roads -Bitumen Resealing, Pavement Rehab, reconstruction & sealing2 Roads to recovery Gravel Resheeting program3 Rural local roads- Gravel Resheeting program4 Rural Local Sealed Rd - Bitumen Resealmg5 Rural Local Sealed Rd - Pavement Rehabilitation6 Regional Roads - Taralga Road, Ex3x3, repair & Block grant fund7 Regional Roads - Timber Bridge Replacement Program8 Local Roads - Timber Bridge Replacement Program9 Footpaths - Disabled access, Cycle way, construction10 Kerb & Guttering - 50% towns / village contributions, Laggan Gram St & Laggan Clifton St11 Other Infrastructure - Bus stops, Crookwell lighting upgrade Spring St car park12 Waste Centres, Rubbish tips and Street Cleaning13 Public Cemeteries -


16 Engineering, Purchasing & Works Supervision17 Plant & Equipment18 Domestic Waste Management (DWM) - Truck GSP, facilities upgrade, Loan reduction19 Water supply - Dalton20 Water supply - Taralga21 Water supply - Gunning22 Water supply - Crookwell23 Sewerage fund - Taralga24 Sewerage fund - Gunning25 Sewerage fund - Crookwelt26

2016 Total

27

APPENDIX 1

ASSET MANAGEMENT POLICY

28

POLICY:-

Policy Title: ASSET MANAGEMENT POLICY

File reference: 1.2.3 and 1.11.3

Date Policy was adopted by Councilinitially: 15 October 2009

Resolution Number: 418/09

Other Review Dates: N/A

Resolution Number: N/A

Current Policy adopted by Council: 15 October 2009

Resolution Number: 418/09

Next Policy Review Date: 2010

PROCEDURES/GUIDELINES:-

Date procedure/guideline was N/A

developed;

Procedure/guideline reference number: N/A

RESPONSIBILITY:-

Draft Policy Developed by:

Committee/s (if any) consulted in thedevelopment of this policy::

Responsibility for implementation:

Responsibility for review of Policy:

29

Asset Manaeement Policy

POLICY STATEMENT

The focus of this policy is to enable informed decision-making on the provision ofservices. Whilst Council is the custodian of a large and diverse asset portfolio thathas been accumulated over a long period, the purpose of strategic asset managementis to determine the optimum method to provide the desired service levels for currentand future generations.

Upper_Lachlan Shire Council currently owns, controls, maintains and is responsiblefor substantial number of asset classes including property, buildings, plant andequipment, roads, bridges, footpaths, drainage, recreation facilities, wastemanagement facilities, parks and reserves, aerodrome, car parks, caravan parks, waterand sewerage assets. These assets make up the social and economic infi-astruchu-ethat enablesAe provision of services to the community and businesses, playing a vitalrole in the local economy and on quality of life. Asset management is a tool thatfacilitates corporate accountability and impacts on all areas of service planning anddelivery.A strong said sustainable local government system requires a robust planning processtoensurefeat those assets are maintained and renewed in the most appropriate way onbehalf of local communities. As custodian, Council is responsible to effectivelyaccount for and manage these assets and to have regard to the long-term andcumulative effects of its decisions. This is a core function of Councils and is reflectedin the Charter, in Section 8 of the Local Government Act 1993 CNSW).

Given the value and importance of infrastructure assets, it is essential that they arewell managed to ensure their future sustainability. Failure to adequately manageinfrastructure assets is a key risk that could prevent Council from achieving strategicgoals.

Council at present has a three year Management Plan that guides the activities ofCouncil and outlines the key performance measures for asset management, renewal,upgrades and maintenance works. Council will be implementing a long termCommunity Strategic Plan, four year Delivery Plan and one year Operational Planwithin the next two years.

Council's Community Strategic Plan expresses the desires of the community andprovides a resource to assist Council in the determination of appropriate andsustainable levels of service.

Council's Community Strategic Plan sets the desired services, and levels of service,that Council will provide to the community. The asset management processdetermines the life cycle cost and funding requirements of the target service levels forcurrent and future generations. The long-term financial plan is the mechanism bywhich the funding requirements of the asset management plan and other corporateobjectives in the Community Strategic Plan are tested and implemented.

This policy sets the principles that will govern the provision of asset related services.The asset management framework and strategy sets out the process to determine thelife cycle cost of each service and a funding model to achieve and sustain the targetservice levels. The framework will define accountabilities for service planning anddelivery

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Asset management relates directly to Council's Community Strategic Plan and LongTerm Financial Plan. A strategic approach to asset management ensures that theCouncil delivers the highest appropriate level of service through its assets. Thisprovides positive impact on:

Members of the public and staff;.

Council's financial position;.

The ability of Council to deliver the expected level of service and.

infrastructure;The political environment in which Council operates; and.

The legal obligations and liabilities of Council..

CORE PRINCIPLES

In order to achieve the objectives of this policy, Council adopts the following coreprinciples:

1. Understanding Customer Expectations

An inspection regime will be used as part of asset management to ensure agreed.

service levels are maintained and to identify asset renewal priorities.Infrastructure Services will be regularly reviewed to ascertain the community's.

expectations, andCouncil will employ a range of community engagement techniques to capture.

the views, opinions and expectations of the community in relation to assetquality, maintenance and renewal priorities and standards.

2. Asset Planning and Budgeting

Asset management principles will be integrated within existing planning and.

operational processes.Asset condition assessment will be carried out by Works & Operations.

Department, leading to a program of works based on risk matrix profile, roadhierarchy and road classification.Council will adopt life cycle cost analysis for the management of infrastructure.

assets.

Capital Works Projects and Asset Maintenance shall be subjected to technical.

and financial evaluation and prioritised using predetermined criteria and theprinciples outlined in Council's Asset Management Plans.Council will regularly review its asset inventory and identify opportunities for.

asset rationalisation.

Wherever possible, predictive modelling will be used to develop and implement.

. .

preventative maintenance programs to ensure that lowest net life cycle cost isachieved and asset potential is optimised.

3 Asset Operations and Management

A consistent Asset Management Strategy must exist for implementing.

»

systematic asset management and appropriate asset management best practicethroughout all departments of Council.

31

Maintenance plans shall be developed using asset condition data and shall.

incorporate a cost-benefit analysis.All services shall be regularly benchmarked to ensure Council is meeting best.

practice standards, andAll outsourced services will be procured through a competitive process..

4. Management of Risk

Council will maintain a program of regular inspection of assets under its control.

to minimise community's risk.Council will implement the principles of AS/NZS ISO 31000:2009 when.

identifying analysing, evaluating and treating risks presented by Council assetsand infrastructure, andCouncil will maintain a Work Health and Safety System for its employees and.

contractors working on Council assets.

5. Asset Accounting and Costing

Systematic, cyclic reviews will be applied to all asset classes ensuring assets are.

managed, valued and depreciated according to appropriate best practiceAustralian Standards.

Council will maintain a detailed asset management system of all owned assets..

Useful lives will be determined for each of these assets with the written down.

value determined in accordance with the current applicable accountingregulations.Depreciation charges will be calculated using a method that reflects the true.

consumption of the asset, or is an indication of the future cash flows necessaryto sustain asset condition and maintain the required service level. Whereverpossible, condition based depreciation method will be used to determine writtendown value, andCouncil will value all these current assets at Fair Value..

Council will revalue each asset class on a regular (3-5 years) basis..

Residual values will be determined based on value at the end of the economic.

life cycle.

6. Asset Management Plans

Council will develop Asset Management Plans for each asset Category..

Asset Management Plans will establish Levels of Service, Future Demand, Life.

Cycle Management Plans Financial Projections, Asset Management Practices,Performance Monitoring and Improvement.Asset renewal plans will be prioritised and implemented progressively based on.

agreed service levels and the effectiveness of the current assets to provide thatlevel of services.

The Asset Management Plans will be linked to the Community Strategic Plan.

and Long Term Financial Plan, andThe Asset Management Plans will be subjected to continuous improvement..

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OUTCOMES

Council recognises that assets must be planned, provided, maintained and renewed sothat they continue to meet the service delivery needs of the community, within thecontext of providing best value to the community.

This policy provides the framework for which Council will undertake the long-termmanagement of its assets.

By the implementation of comprehensive Asset Management practices, Council willachieve significant benefits including:

More informed decision-making,.

Improved efficiency,.

Ability to plan for the present and future generations, and.

Improved long term financial forecasting and management..

Council needs to ensure that asset management is an integral part of its business cycleand will:

Be consistent with its goals and objectives,Help Council to manage business risks,.

Provide tangible benefits,.

Be integrated with other components of the business, and.

. Be sustainable.

It is intended that the implementation of the policy will provide the impetus toimproving and guiding existing asset management practices in line with current best

.

practice.

The development of an Asset Management Policy closely links with developing aTotal Asset Management Strategy. The Total Asset Management Strategy Project isanothCTproject that will aim to provide guidance to Councillors, Senior Managementand staff on future asset needs to meet Council's service obligations.

The strategy will review Council's existing asset holdings, future sendce needs andmake recommendations regarding maintenance needs and future capital works.

BACKGROUND AND CONTEXT

Council's assets are made up of a wide range of different asset types all of which arefundamental in meeting the needs of the community. Assets may be physical (i.e.tangibke.g^plant, buildings) or non-physical (i.e. intangible e.g. intellectual property,good will). This policy only considers physical assets.

The major characteristics of an asset are:

There must be service potential or future economic benefits,.

The future economic benefits must be quantifiable, and.

Council must have control of the service potential..

33

Council's assets are categorised as follows:

Asset Type Asset Class Includes Assets such as:

Roads Sealed and unsealed roads, kerb and gutter, bus shelters,roadside furniture, signage, standpipes, and guard rails.

Bridges Includes major culverts & guard rails.

Footpaths Including shared footpath/cycle-ways.

Infrastructure Drainage Drains (underground), pipes, culverts, pits, litter traps,Assets retarding basins, table drains and wetlands.

Buildings, Libraries, public halls, community facilities, public toilets,Facilities and houses, museums, Council offices, pavilions, stadiums,

Other Structures preschools, maternal and child health centres, swimmingpools, aquatic centres, saleyards and waste facilities.

Recreation, Parks, gardens, sporting ovals, swimming pools, playLeisure & equipment, irrigation systems, skate parks, park furniture, and

» . * .

Community trees.

Facilities

Water Supply Water mains, reservoirs, pumping stations, chlorination plants,telemetry systems, water meters and land.

Sewerage Gravity mains, rising mains, pump stations, sewerageSystems treatment plant, telemetry systems and land.

Waste Including structures and signage, land-fills and transferManagement stations.

.

Plant and Motor vehicles, tmcks, construction equipment, gardeningEquipment equipment and computer systems and telecommunication

Non- equipment, fixtures, fittings & furniture, library books.infrastructure

Assets Property Council controlled and owned land assets.

Other Includes gravel pits, caravan parks and aerodrome.

The standard to which these assets are provided and maintained impacts on residents,the business community and visitors, as well as the amenity and safety aspects of the

»

community.

The long-lived nature of many assets and the need for their ongoing renewal meansthat planning must be based on an understanding of the full costs throughout eachasset's life cycle and address both short and long term planning needs.

DEFINITIONS

Asset - A physical component of a facility which has value and enables sendces to beprovided and has an economic life of greater than 12 months. They represent not only

34

physical objects or rights which have some monetary value, but also result fromexpenditure from which the benefit is yet to be derived.

Asset Life Cycle - This is the period of ownership of an asset from the planning anddesign phase through to decommissioning or disposal.

Asset Management - Asset Management is a systematic process to guide theplanning, acquisition, operation and maintenance, renewal and disposal of assets.

Asset Management Information System - An Asset Management InformationSystem is the foundation for all Asset Management practices. It is a combination ofprocesses, data and software applied to provide the essential outputs for effectiveasset management such as reduced risk and optimum infrastructure investment. TheAsset Management Information System links to other information systems withinCouncil such as the Property System, Geographic Information System, FinanceSystem^and Document Management System integrating Asset Management with therest of Council's operations.

Asset Management ^Strategy - A strategy for asset management coveringdevelopment and implementation of plans and programs for asset creation, operation,maintenance, rehabilitation, replacement, disposal and performance monitoring toensure desired level of sendce and other operational objectives are achieved atoptimum cost. The Community Strategic Plan typically has a 10-25 year horizon andaligns Asset Management with the corporate business plan (IPWEA, 2006).

Asset Management Plan - A plan developed for the management of one or moreinfrastructure assets that combines multi-disciplinary management techniques(including technical and financial) over the lifecycle of the assets in the most costeffective manner to provide a specified level of service. A significant component ofthe plan is long-term cash flow projection for the activities (IPWEA, 2006).

Capital Expansion - Providing a new asset - e.g. extending a footpath to an areawhere the footpath did not exist or was classified as "natural earth".

Capital Renewal - Renewing the existing asset to extend its serviceability, but notproviding a higher level of service - e.g. resealing, re-sheeting an unsealedroad (notwidening).

Capital Upgrade - Renewing the asset, thereby providing a higher level of servicee.g. sealing an unsealed road, upgrading a stormwater pipe with a larger size.

Infrastructure Asset - Infrastructure assets are typically large, interconnectednetworks or portfolios of composite assets, comprising components and sub-components that are usually renewed or replaced individually to continue to providethe required level of service from the network. Some examples are roads, footpathsand cycle ways, water and sewerage reticulation infrastructure, bridges and municipalbuildings.

Level of Service - Defining and meeting community expectations in relation to thequality and quantity of services delivered by Council. In the context of assetmanagement, this applies to assets such as roads.Maintenance - Does not upgrade or renew the asset, it just enables the asset to attainits planned lifespan - e.g. pothole repair, crack sealing and bitumen patching.

35

Operational Plan - Operational plans generally comprise detailed implementationplans and information with a 1-3 year outlook (short-term). The plans typically coveroperational conb-ol to ensure delivery of Asset Management Policy, Strategy andPlans. The plans also detail structure, authority, responsibilities, deliver definedlevels of service and emergency preparedness/response (IPWEA, 2006).

Useful Life of an Asset - The useful or economic life of an asset is the estimated orexpected time between placing the asset into service and removing it from service.

ROLES AND RESPONSIBILITIES

The responsibilities and relationships associated with Asset Management are:

The Council

To act as overall stewards for Council assets..

To adopt the corporate Asset Management Policy and Strategy..

To agree to levels of service, risk and cost standards via the annual Business.

Planning process, andTo approve appropriate resources for asset management activities in the Long.

Term Financial Plan and the annual budget.

Executive Management Group

To foster and support the cross-functional Asset Management Policy..

To ensure that accurate and reliable information is presented to Council for.

decision-making, andTo ensure that adequate resources are provided to implement approved Asset.

Management Strategies and plans.

Asset Managers/Senior Management

To monitor and review the implementation of the Asset Management Policy and.

Asset Management Strategy.To represent the key asset management functions, e.g. Infrastmrture Planning,.

Maintenance and Construction, Finance, Community Engagement and directservice provision such as Recreation and Community Services.To monitor the development and implementation of the Asset Management.

Practices Improvement Strategy.To provide guidance to develop long term (whole of life) Asset Management.

Plans for major asset groups.To ensure the community needs and expectations are considered in the.

development of Asset Management Plans.Maintain Asset registers and condition reporting systems for Council..

To review the performance of asset management programs such as maintenance.

programs and capital works programs.Ensure efficient and effective use of Council funds and optimising "life cycle".

cost of all assets.

Promote_and raise awareness of asset management to the Council, staff, key.

stake-holders and the community

36

To provide advice on City structure plans, land use planning and major.

(subdivision) developments, andTo evaluate and prioritise Capital Works projects on Council-owned and.

controlled land and recommend the annual and 10 year program to theExecutive Management Group.

ASSET MANAGEMENT FRAMEWORK

The management of Council's assets will be within the framework outlined below.The framework creates a logical sbructure for grouping asset management functions.When staff is working on tasks, it will be possible to easily determine whichprinciples are most relevant to the task at hand.

Figure 1 - Asset Management Framework

Asset Planning Asset Delivery Asset Management Asset Review

Asset Planning Asset Delivery Asset Management is Asset Reviewrefers to how Council includes the process the series of activities refers to the processresponds to the service and information to which occur once an of performanceneeds of the support Council's asset is acquired. review of CouncilCommunity. decision making. assets.

Included are:Included are: Included are: Maintenance Included are:.

. Assessment of . Acquisition options planning .Review fit fordemand . Objective options . Operations planning purpose

Detailed scoping analysis . Meeting legislative. .Review service

Risk analysis. . Involvement of needs levels. stakeholders in Information . Review life cycleLong term .

outlook considered design collection Consider

. . . Life cycle planning replacementIdentify Life cycle planning.potential options. Refurbishment or.

disposal.

The guideline detail areas of asset management to be addressed including:

Gathering background data of the asset (What is the asset, the capacity, the value).

Planning (The Big Picture).

Creation/Acquisition/AugmentationPlan (How can we gain assets).

Financial/Risk JVIanagement Plan (How we fund asset management).

Operational and Maintenance Plan (How we maintain assets and to what standard).

Condition and Performance Monitoring QVhat is asset performance against needs).

Rehabilitation/Replacement Plan (How and when we upgrade our assets).

. Consolidation/Rationalisation Plan (How we optimise oiu- management of assets)

. Audit Plan (Is the process working efficiently & effectively)

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GUIDING PRINCIPLES FOR ASSET MANAGEMENT DECISIONS

Council will take into consideration the following principles to determine assetmanagement decisions.

1. Level of Service

(a) In accordance with its long term Asset Management and Financial Plans,Council will provide quality infrastructure assets that support service levelsthat are appropriate, accessible, responsive and sustainable to the community.

(b) Consult with the community and key stakeholders on determining Levels ofService and asset service standards.

2. Demand Forecasting

(a) Developing sustainable and effective management strategies for the long termincluding demand analysis covering changes in legislations and demographics.

3. Life Cycle Planning

(a) Life Cycle Asset Management is fundamental to the achievement of theCouncil Plan and Council's Long Term Financial Strategy Plan.

(b) The decision to fund capital projects will be based on agreed criteria for theevaluation and prioritisation of Capital proposals. This will include thoseprojects suggested by the community.

(c) Setting the priority for asset management in descending order as follows:

1. Asset renewal,2. Asset upgrade, and3. Asset extension.

4. Risk Management

(a) Resources and priorities for asset management practices will include a riskassessment.

5. Financial Management

(a) The amount of renewal funding required to maintain minimum seryice levelswill be reflected in Council's 10 Year Long Term Financial Plan.

(b) The provision of funding for new projects will only be considered afterrenewal requirements are identified and considered.

(c) Prior to consideration of any major new works, renewal or up-grade to anasset, a critical review, based on demonstrated service needs will beundertaken and the "whole of life" costs of that asset will be reflected inCouncil's 10 Year Financial Plan.

(d) Decisions today impact on future generations.(e) Accounting procedures will follow Council's current Accounting Policy and

Procedure (see Appendix A).

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CONCLUSION

The implementation of the Asset Management Policy will assist Council to ensurethat assets are managed in a holistic and cost effective manner to meet the expectedservice levels.

Implementation of asset management principles will result in full integration with alllevels of corporate planning including Community Strategic Plan, Long TermFinancial Plan, Delivery Plan and Operational Plan and will align existing assetconditions with the approved budgets. This will be achieved by providing moreaccurate forecasting for renewal, upgrade and replacement of assets in the future andmatching resource requirements to suit. The information will be utilised in thedevelopment of the annual budgets and the Long Term Financial Plan for Council'sconsideration and adoption. This will ensure Council is aware of the asset renewalfunding requirements for the Council and will assist in the prioritisation of assetrenewal and asset creation projects.

The Asset Management Policy will be supported by the Asset Management Strategywhich will address the key criteria to provide successful implementation of assetmanagement within Council.

Variation

Council reserves the right to vary or revoke this policy

ATTACHMENT

Appendix A: Upper Lachlan Shire Council's Accounting Policy and Procedure.

Appendix 2:

UPPER LACHLAN SHIRE COUNCIL INFRASTRUCTURE, PROPERTY,PLANT AND EQUIPMENT ACCOUNTING POLICY AND PROCEDURE.

1.1 Materiality

Assets with an economic life, which is determined to be longer than one year, are onlycapitalised where the cost of acquisition/construction exceeds materiality thresholdsestablished by Council for each type of asset. In determining such thresholds, whichare reviewed annually, regard is given to the nature of the asset and its estimatedservice life.

Examples of capitalisation thresholds applied during the year under review areprovided below:-

Land - Council Land - Operational and Community Capitalise- Open Space Capitalise- Land under Roads Not yet Capitalised

Roads, Bridges, and Footpaths- Construction/Reconstruction Capitalise

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- Reseal/Resheet/Major repairs Capitalise ifvalue>$5,000

1.2 Fair Valuation

The Division of Local Government (DLG) has determined that all asset classes willbe valued at fair value in accordance with AASB 116 in a staged approach. At balancedate the following classes of assets are stated at their fair value as follows:-

2006/2007 - Water Supply and Sewerage Networks;

2007/2008 - Buildings, Operational Land, and Plant and Equipment;

2009/2010 - Roads, Bridges, Footpaths, Stormwater, and Drainage Assets;

2010/2011 - Community Land, Land improvements, other structures and otherassets.

All water and sewerage assets were recognised at fau- value from 1 July 2007. Therevaluation of the asset classes to fair value of property, plant and equipment,operational land and buildings assets were recognised from 1 July 2008. The assetclasses of roads, bridges, footpaths, stormwater, and drainage assets were recognisedat fair value from 1 July 2010. The asset classes of community land," landimprovements, other structures and other assets were recognised at fair value from 1July 2011.

All assets revalued will be carried in the books at their revalued amount, being theirfair value at the date of revaluation less any subsequent accumulated dqireciation andsubsequent accumulated impairment costs.

All new assets and asset acquisitions made after the respective dates of valuation arerecorded at their initial cost of acquisition.

Water and Sewerage network assets are indexed annually between fall revaluations inaccordance with the latest indices provided in the NSW Office of Water - RatesReference Manual.

(i) Plant and Equipment, Office Equipment, Furniture and Fittings, Leased Plantand Equipment - Depreciation

These classes of assets are recognised at fair value, as approximated by depreciatedhistorical cost, from 1 July 2008. Prior to this date assets acquired after 1~ January1993 were recorded at cost.

Major depreciation periods are:-Plant and Equipment, Road Making Equipment 8 to 15 yearsOffice Equipment 5 to 10 yearsOffice Furniture and Fittings 10 to 20 yearsMotor Vehicles 5 years

Asset capitalisation thresholds include: -Office Equipment $1,000Furniture and Fittings $1,000Plant and Equipment $5,000

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(ii) Plant and Equipment, Office Equipment, Furniture and Fittings, Leased Plantand Equipment - Fair Value

Plant and Equipment, Office Equipment, Furniture and Fittings, Leased Plant andEquipment assets are valued at Fair Value under AASB 116 from 1 July 2008, as perthe Division of Local Government's directions, using the depreciated historical costmethod:-

'In light of the nature and value of Council plant and equipment the Department hasstated that NSW Councils may use depreciated historic cost as fair value as long asCouncil has undertaken a high level review to determine if there has been anyimpairment to the assets.'

All new assets and asset acquisitions made after the respective dates of valuation arerecorded at their initial cost of acquisition. Major depreciation periods andcapitalisation thresholds remain unchanged.

Land under Roads

Council has elected not to recognise land under roads acquired before 1 July 2008 inthe Balance Sheet in accordance with AASB 1051.

Land under roads acquired after 1 July 2008 is recognised in accordance with AASB116- Property, Plant and Equipment. No land under roads has been acquired after 1July 2008.

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Buildings and Operational Land

Land and Buildings were valued at Fair Value as per AASB 116 by indq)endentvaluer, Scott Fullarton during the reporting period ended 30 June 2007. Desktopupdates were provided as at 30 June 2008 and these values were recognised at fairvalue as at 1 July 2008.

All new assets and asset acquisitions made after the respective dates of valuation arerecorded at their initial cost of acquisition. Major depreciation periods andcapitalisation thresholds remain unchanged.

Major depreciation periods are:-Buildings 50 to 100 years

Asset capitalisation thresholds include:-Buildings construction/extensions/renovations $1,000

Community Land and Other Structures

Community Land and Other Structures were valued at Fair Value as per AASB 116by independent valuer, Scott Fullarton during the reporting period ended 30 June2007. Desktop updates were provided as at 30 June 2008 and these values wererecognised at fair value as at 1 July 2011.

All new assets and asset acquisitions made after the respective dates of valuation willbe recorded at their initial cost of acquisition.

Major depreciation periods are:-Other Structures 15 to 50 yearsOther Structures - Masonry 50 to 80 yearsPlayground Equipment 15 yearsCommunity Land Non depreciable

Asset capitalisation thresholds include: -Park Furniture and Playground Equipment $1,000Other Structures $1,000Community Land Valuation

Infrastructure Assets

Water and Sewerage Assets - Fair Value

Water and sewer infrastructure assets have been valued by Andrew Nock, anindependent plant, equipment and infrastructure valuer at fair value according toAASB 116 using the gross restatement method during the reporting period ended 30June 2007. All Council water and sewerage assets are now recorded at fair value. Allacquisitions made after the respective dates of valuation are also recorded at fairvalue.


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Council has assessed that there is no indication that the revalued asset's carryingamount differs materially from that which would be determined if the asset wererevalued at the rqwrting date. If any such indication exists, Council will determinethe asset's fair value and revalue the asset to that amount.

Major depreciation periods for future years determined following the revaluation are:-Dams 120 yearsReservoirs 100 yearsBores 25 - 50 yearsReticulation Pipes 80 yearsPump Stations 25 - 70 yearsPumps 25 yearsTelemetry 15 years

Augmentation works constructed subject to PWD schemes are recorded as follows:-Where the scheme has not been commissioned, works are recorded at cost (includingborrowing costs). Where the scheme has been commissioned but the final cost toCouncil has not been determined, the scheme has been recorded as a single asset anddepreciated from the date of commissioning. The depreciation period has beenselected, depending on the nature of the scheme, having regard to the depreciationperiod applicable to its major components as shown above. Where the final cost toCouncil has been determined, carrying value of the scheme has been apportionedbetween the individual components and depreciation periods adopted as shown above.

Asset capitalisation thresholds include: -

Reticulation extensions and new assets $1,000

Stormwater Drainage Assets

The Stormwater and Drainage asset classes were valued at Fair Value by an internalvaluation undertaken by Upper Lachlan Shire Council professional engineering staffand are recognised at fair value from 1 July 2010.


Previously, all stormwater and drainage assets were recorded at "deemed cost'" beingthe carrying amount of those assets at 30 June 2002 in accordance with AASB 1041

Major depreciation periods are:-Drainage Structures 100 yearsCulverts 100 yearsStormwater and Flood Control Structures 100 years

Asset capitalisation thresholds include:-Drains and Culverts $5,000All other Stonnwater assets $5,000

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Transportation Infrastructure Assets

The transportation infrastructure asset classes were valued at Fair Value by an internalvaluation undertaken by Upper Lachlan Shire Council professional engineering staffand are recognised at fair value from 1 July 2010.


Previously, all transportation assets were recorded at "deemed cost"' being thecarrying amount of those assets at 30 June 2002 in accordance with AASB 1041.

Major depreciation periods are:-Sealed Roads - Surface 20 yearsSealed Roads - Structure 100 yearsUnsealed Roads 100 yearsOther Road Structures 100 yearsDrainage Structures on Roads 100 yearsBridges - Concrete 100 yearsBridges -Timber 40-100 yearsBulk Earthworks Infinite

Kerb and Guttering 80 yearsFootpaths 80 years

Asset capitalisation thresholds include: -Road construction, gravel resheeting and reconstruction $5,000Bridge construction and reconstruction $5,000Footpaths and Kerb and Guttering $5,000

Other Assets

Other Assets are valued at Fair Value under AASB 116 from 1 July 2011 using thedepreciated historical cost method. All new assets and asset acquisitions made afterthe respective dates of valuation will be recorded at their initial cost of acquisition.

I

Previously, all assets acquired after 1 January 1993 were recorded at cost.

Major depreciation periods are indefinite.

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Appendix 3

EstimatedProgram Description of Works Cost $

Mclntosh Road - reconstruction & seal (subdivision 150,000Local Roads contribution pending)

Roslyn Road - rehabilitation 100,000

Montana Road - erosion control 15,000

Wheeo (Sapphire Road) Road reconstruction 100,000

Bevendale Road reconstruction 100,000

Improve Sandy Creek causeway

Seal remainder of Golspie Road

Warne Lane-drainage 5,000Drainage

Colyer Street - drainage railway end 3,000

Northcott St - drainage 65,000

Bond & Grosvenor Streets drainage culverts 5,000

Biala Street drainage 3,000

Warrataw Street - drainage improvements & s/seal 60,000

Church St, Dalton - Drainage rehab / gravel shoulder 25,000

Bigga Streets - drainage improvements 15,000

Queen St (Binda) - drainage improvements 5,000

Stormwater Drainage - Collector village 350,000

Stormwater Drainage - Taralga village 240,000Stormwater Drainage - Gunning Village 150,000Purchase building for Tourism Centre in Crookwell 200,000

Tourism

Install sewage dump point Crookwell Caravan Park 4,000Tourism

Underground Petroleum Storage Systems remediation 250,000Stores

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