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Item 7.1 - Attachment 4 |
Asset Management
Policy |
Asset Management Policy
A better service, not a better asset,
is a key indication of successful asset management
Background
Assets
play a vital role in enabling services to fulfil the environmental, social,
cultural (including governance) and economic outcomes for the community.
Parramatta City Council (PCC) is responsible for ensuring that the multi
billions of dollars of community assets under its ownership, care and control
are cost effective in achieving the long term community objectives of the city.
Having
sustainable assets requires PCC to be accountable in maintaining and wisely
using existing assets to meet required levels of service throughout the assets
life.
Asset
management requires the planning and acquisition of assets to meet current and
future service delivery demands. Informed decisions are required about which
assets are needed, where and in what numbers and at what cost. Asset investment
decisions are made with careful consideration about the needs, costs and risks of
maintaining and operating assets over their useful lives, including the
ultimate retirement of assets. This approach recognises that the effects of
decisions made during any phase of an asset’s life will affect performance and
costs in another phase.
Best
practice across PCC’s asset portfolio will result in:
· Assets that meet the requirements of the community at
minimal cost.
· Knowledge about the impact that assets will have on
Council’s budget over the long term.
· Informed asset investment decisions based on sound knowledge
of asset performance.
· A program that minimises the risks of asset ownership.
· Cost effective management and operation of existing
assets.
Asset management planning is a relatively new ongoing
business discipline that will need to be embedded into Councils planning,
budgeting, operation and reporting frameworks. Council will need to adopt a continuous
business improvement program to realise the substantial benefits that can be
expected from strategic asset planning.
The Asset Life Cycle
Relationship to Legislation
Due to the significant risks to Council associated
with assets and the impact that assets can have in supporting the objectives of
Council, the NSW Department of Local Government is passing legislation[1]
to mandate that a Strategic Asset Management Plan be integrated into Councils
planning and budget processes as one of the resource plans.
The legislation is consistent with the national
financial sustainability framework. The legislation requires that a four year
delivery program be developed to move closer to the objectives and strategies
in the long term community plan. The resourcing strategy of assets, funds and
workforce need to inform and support the long term community plan and the four
year delivery program of the Council.
The Strategic Asset Management Plan will inform
Council on the most cost effective use of assets. The plan will include all
assets owned by Council and any new asset solutions proposed in the Community
Service Plan and four years Delivery Program. The asset acquisition, operation,
maintenance, renewal and disposal schedules in the Strategic Asset Management
Plan will form an input to the Long Term Financial Plan.
Scope
This
policy applies to all physical assets and their components with a useful life
of more than one year.
PCC
has developed an asset hierarchy for the management, planning and reporting of
assets. The asset hierarchy can be found in attachment 1.
The
asset hierarchy may be modified as the requirements of the community change and
/ or the cost benefit of managing an asset a particular level deems it
necessary to change the hierarchy.
Purpose
This
policy provides the overall framework to guide the sustainable management of
Council’s asset portfolio as a resource for service delivery or as an
investment portfolio for revenue. The policy will ensure that:
· Assets are effectively and efficiently managed through
the course of their life cycles;
· There is a clear direction for informed decision
making;
· Community needs and expectations are met;
· Best value practices are incorporated into asset
management strategies and implementation activities;
· Exposure to risk is managed through the application of
sound operational principles and practices;
· Sustainable development is based on the recognition
that planning must include social, ecological, economic and cultural
principles;
· There is continual improvement in asset management and
service delivery;
Asset Policy Statements
It is a
policy that:
· Council will comply with all asset related legislation
and guidelines including the development of an annual Strategic Asset
Management Plan;
· Council’s assets will be managed using a “life cycle”
approach in accordance with recognised best practice asset management
techniques;
· Council’s assets will be utilised to their fullest
potential to maximise usage and economic performance;
· Council will continually monitor, audit and review its
asset portfolio to ensure it is responsive to service delivery needs and meets
the objectives set by Council;
· Council’s assets will be regularly maintained to
ensure that they continue to function as built for the duration of their life;
· Council’s asset class management plans (included in
the Strategic Asset Management Plan) will guide the funding allocations for all
asset purchase, maintenance, rehabilitation and replacements.
· Council will establish acceptable risk tolerances for
assets;
· Prior to the approval of any significant asset
acquisition or renewal a detailed demand study, financial appraisal, risk
assessment and community consultation will be undertaken.
· Returns will be maximised from Council’s asset investment
portfolio;
· The disposal of any asset shall be in accordance with
Council’s asset disposal policies and procedures;
· Council will undertake regular community engagements
to determine satisfaction with the levels of service.
Roles and Responsibilities
The
roles and responsibilities for the management of assets to be followed within
PCC are detailed in the PCC Asset Roles and Responsibilities document (TRIM
Reference: D01063500). Key positions in
asset management are:
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The Council: |
Owns
all assets and acts as a steward for the assets. The Council will set the
asset management policy and vision.
Ensures that resources are available for asset management activities. |
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Executive Team: |
Reviews
the Strategic Asset Management Plan (including the four year asset delivery
program) and asset business cases in line with this policy. Advises Council
on asset matters. |
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Leadership Team: |
Provides
input and advice in the development of the Strategic Asset Management Plan
(SAMP) and asset management practices within Council to improve the quality
of asset management. In PCC the leadership team has delegated this role to
the Strategic Asset Management Project Board. |
|
Strategic Asset Manager: |
Is
delegated by Council to act in the capacity of asset owner and make
recommendations to Council. Responsible for the development of the Strategic
Asset Management Plan which recommends the most sustainable use of available
funds across the asset portfolio. Reviews all new asset acquisitions to
ensure they are consistent with Council’s long term objectives, that the life
cycle costs have been considered and that the asset can be funded within
agreed risk tolerances. |
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Service Manager: |
Uses
assets to provide a service to the community. Provides the level of service
requirements, maximises asset utilisation and reports on asset performance. |
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Asset Manager: |
The
person in Council who is in the best position to manage an asset with the
required skills and experience. The asset manager may be a service manager or
the service manager may allocate the management of an asset to an individual
in a specialist role (e.g. facility manager). |
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Asset Service Provider: |
Is
appointed by the asset manager to undertake work in relation to an asset.
Some examples include design engineers, surveyors, maintenance officers,
security officers. |
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Tenant |
A
person or entity that rents or occupies a property. |
Policy Guidelines
Assets that support the community and operational
performance of PCC
These
policy guidelines outline the strategies to be employed in achieving best
practice in meeting the policy statements. The guidelines are in two sections.
The first set of guidelines applies to assets throughout all stages of their
lives. The second set of guidelines applies to the requirements at each stage
of an assets life.
Guidelines
for assets at all stages of their lives:
· Engage the community on their expectations (levels of
service) for all asset classes.
· Use the community expectations (levels of service) to
drive the development of the asset strategy and its implementation.
· Assign roles and responsibilities for all assets at
the various stages of their lives.
· Define the level of detail required to plan, operate,
manage and report on each class of assets to maximise the benefit to Council.
· Capture and maintain relevant data in one location for
use in asset planning, operation, management and reporting.
· Establish business rules and processes by asset class to
comply with PCC’s asset capitalisation policy to support the planning,
operation and management of assets.
· Adhere to PCC’s environmental, social and cultural
standards for assets within acceptable risk tolerances and costs.
· Undertake a continuous business improvement process in
the management of assets.
There
are specific requirements for PCC to address as assets pass though the various
stages of their lives.
During
the asset planning life stage the level of detail required will be dependant
upon the business rules established for each asset class and the level of risk
exposure. Planning guidelines are:
· Undertake a demand study for the acquisition or
creation of the asset.
· Establish what is valued by the community (levels of
service).
· Though community engagement ensure that the asset
renewal or new asset investment is a community priority.
· Undertake an options analysis of the various asset
solutions outlining the benefits and disadvantages of each option with a
recommended solution to maximise the levels of service within identified risk
tolerances and lifecycle costs.
· Identify the funding sources for the asset over its
life.
· Undertake a lifecycle cost analysis detailing the acquisition,
operation, planned and unplanned maintenance, renewal and disposal costs of the
asset over its life in the current year’s values. The NSW Department of
Treasury’s Policy Paper (TPP 07-4) or its revisions provides the guidelines for
financial appraisals of new assets;
· Ensure that the asset design or asset purchase
recommendation complies with legislated standards and building codes.
· Ensure that the asset design or asset purchase
recommendation complies with PCC’s asset environmental policy and standards.
· Clearly define the roles and responsibilities for the
management of the asset following acquisition. In particular the service
manager, asset manager, planned and unplanned maintenance responsibilities.
· Evaluate the planned acquisition against all other
planned acquisitions considering the priorities of all of Councils assets to
ensure that the best use of funds is being applied.
During
the asset purchase or construction life stage:
· Ensure the project manager responsible for the
construction or purchase of the asset certifies that he is satisfied with the
quality of the brief before construction or purchase commences.
· Comply with any legislated requirements or relevant
PCC policies or procedures.
· Regularly report the acquisition costs against a project
budget with reasons for variances.
· Regularly report the completion date against proposed
completion times with reasons for variances.
· Ensure that an asset record by relevant component is
created in Council’s asset register on completion with all data elements
completed.
· Ensure that the manager funding the asset signs off
that the asset meets the project brief (with any agreed variances) on
completion.
· Ensure that funds are made available in Councils
maintenance and asset operational budgets for the new asset over its life.
· Complete a “lessons learned” report for continual
improvement.
· Evaluate the asset six months after completion to
determine if the asset is fulfilling the planned requirements.
During
the asset operation life stage:
· Ensure that all assets are in a condition that meets
community expectations, legislated and PCC standards.
· Minimise the operational costs and environmental
footprint of assets within acceptable risk tolerances and costs.
· Maximise the utilisation of the assets (where
appropriate) to increase the community benefit or financial return to Council.
· Renew assets as close as possible to the optimal time
to minimise the total life cycle costs.
· Extend the remaining life, revalue the asset and
report disposals by component for all renewals.
· Ensure that assets are valued and depreciated in
accordance with the accounting standards.
· Ensure that all asset records remain up to date.
During
the asset disposal life stage:
· Disposal of the asset maximising the return to Council
· Comply with PCC’s disposal policy, process and
guidelines.
· Remove of the asset from Council’s asset registers.
Assets that provide a commercial return to Council
· Maximise the return of assets in the asset investment
portfolio.
· Reinvest investment property disposal incomes back
into the asset investment portfolio.
· Establish a method by which the asset investment
portfolio can be managed to capitalise on market changes with minimal risk to
the Council.
· Regularly report on the asset investment portfolio
returns against industry benchmarks.
· Fund the cost of maintenance and renewal of assets from
the properties in the asset investment portfolio.
· Invest a percentage of the net returns from the asset
investment portfolio back into the portfolio for increased growth.
Attachment
1: PCC Asset Hierarchy
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Asset Class |
Asset Category |
Asset Group |
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Infrastructure |
Roads,
Bridges and Footpaths |
Bridges |
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Footpaths |
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Cycle
ways |
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Roads |
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Other
Infrastructure |
Street
Furniture |
|
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Public
Lighting |
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Parking
Meters |
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Laneways |
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Other
Infrastructure |
|
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Stormwater
Infrastructure |
Flood
Control |
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Natural
Water Courses |
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Drains |
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Park
Infrastructure |
Park
Infrastructure |
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Trees |
Trees |
Trees |
|
Buildings |
Administration
and Operation Buildings |
Administration
Buildings |
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Operation
Buildings |
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Civic
Place Buildings |
Council
Chambers |
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Administration
Building |
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Connection
|
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Community,
Library and |
Child
Care Buildings |
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Baby
Health Centres |
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Buildings
Leased for Community Services |
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|
Libraries |
|
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Culture,
Tourism and |
Heritage
and Visitor Information Centre |
|
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|
Town
Halls and Community Halls |
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Park
Buildings |
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Swimming
Pools |
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Riverside
Theatre |
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|
Property
Investment Portfolio Buildings |
Property
Investment Portfolio Buildings |
|
|
Multi-Story
Car Parks |
Multi-Story
Car Parks |
|
Land |
Community |
Open
Space (park) |
|
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Land
Under Administration and |
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Civic
|
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Land
Under Roads |
|
Plant
and Equipment |
Small
Plant |
Small
Plant |
|
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Heavy
Plant Non-Motorised |
Heavy
Plant Non-Motorised |
|
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Light
Commercial Vehicles |
Light
Commercial Vehicles |
|
|
Passenger
Vehicles |
Passenger
Vehicles |
|
Office
Equipment |
Computer
Equipment and Software |
Computer
Equipment and Software |
|
|
Other
Electronic Equipment |
Other
Electronic Equipment |
|
Furniture
and Fittings |
Furniture
and Fittings |
Furniture
and Fittings |
|
Library
Books |
Library
Books |
Library
Books |
|
Heritage
and Cultural Collections |
Heritage
and Cultural Collections |
Artefacts |
|
|
|
Cultural
Documents |
|
|
|
Art
Collection |