Agenda of Council Meeting - 3 September 2019

ORANGE CITY COUNCIL

MINUTES OF THE

Ordinary Council Meeting

HELD IN Council Chamber, Civic Centre, Byng Street, Orange

ON 20 August 2019

COMMENCING AT 7.00pm

Attendance

Cr R Kidd (Mayor), Cr K Duffy, Cr J Hamling, Cr J McRae, Cr T Mileto, Cr S Munro, Cr S Nugent, Cr M Previtera, Cr G Taylor, Cr R Turner, Cr J Whitton

Acting General Manager, Acting Director Corporate and Commercial Services, Acting Director Development Services, Director Community, Recreation and Cultural Services, Director Technical Services, Manager Corporate and Community Relations, Legal and Property Officer (Hyde), Divisional Administration Officer – Community, Recreation and Cultural Services (Meacham)

1.1 APOLOGIES

RESOLVED - 19/406 Cr S Munro/Cr M Previtera

That the apology be accepted from Cr S Romano (Deputy Mayor) for the Council Meeting of Orange City Council on 20 August 2019.

For: Kidd, Duffy, Hamling, McRae, Mileto, Munro, Nugent, Previtera, Taylor, Turner, Whitton

Against: Nil

Absent: Romano

1.2 LIVESTREAMING AND RECORDING

The Mayor advised that the meeting was being livestreamed and recorded.

1.3 ACKNOWLEDGEMENT OF COUNTRY

1.4 Declaration of pecuniary interests, significant non-pecuniary interests and less than significant non-pecuniary interests

Nil

2 Mayoral Minutes

Nil

GOOD NEWS FOLDER

1 Letter from Lifeline Central West thanking Council for donation of $2,000. This donation will enable Lifeline to continue to provide the community with services and support programs.

2 Andrew Cole was awarded the Tom Knowles Award today at a Macquarie Valley Weeds Committee regional meeting for his contribution to weed management in the Macquarie Valley region over the past 12 months. Tom was a former chairman of the Macquarie Valley Weeds Committee and passed away back in 2011. Very prestigious award for the MV region. Well done Andrew!

3 Alex Thomas narrowly missed on the Skillset Apprentice of the Year award in Bathurst today – well done, great effort to be nominated.

MATTER ARISING

That a letter of condolence be sent to the family of Margaret Love.

THE MAYOR DECLARED THE ORDINARY MEETING OF COUNCIL ADJOURNED FOR THE CONDUCT OF THE OPEN FORUM AT 7.05PM

OPEN FORUM

Item 5.11 – Orange Sustainable Living Expo

Mr John Mills, Rotary Club of Orange, spoke on the Sustainable Living Expo.

THE MAYOR DECLARED THE ORDINARY MEETING OF COUNCIL RESUMED AT 7.10PM

3 Confirmation of Minutes of Previous Meeting

RECOMMENDATION

That the Minutes of the Ordinary Meeting of Orange City Council held on 6 August 2019 (copies of which were circulated to all members) be and are hereby confirmed as a true and accurate record of the proceedings of the Council meeting held on 6 August 2019.

For: Kidd, Duffy, Hamling, McRae, Mileto, Munro, Nugent, Previtera, Taylor, Turner, Whitton

Against: Nil

Absent: Romano

4 Notices of Motion/Notices of Rescission

Nil

5 General Reports

5.1 Recommendations and Resolutions from Policy Committees

TRIM Reference: 2019/1673

RESOLVED - 19/407 Cr J Whitton/Cr S Nugent

1 That the resolutions made by the Planning and Development Committee at its meeting held on 6 August 2019 be noted.

2 That the resolutions made by the Employment and Economic Development Policy Committee at its meeting held on 6 August 2019 be noted with a change to the apologies to remove Cr Turner and replace with Cr Taylor.

3 That the resolutions made by the Infrastructure Policy Committee at its meeting held on 6 August 2019 be noted.

4 That the resolutions made by the Services Policy Committee at its meeting held on 6 August 2019 be noted.

For: Kidd, Duffy, Hamling, McRae, Mileto, Munro, Nugent, Previtera, Taylor, Turner, Whitton

Against: Nil

Absent: Romano

5.2 Update on Outstanding Resolutions of Council including Questions Taken on Notice and Notices of Motions.

TRIM Reference: 2019/1717

RESOLVED - 19/408 Cr S Nugent/Cr S Munro

That the information provided in the report by the Manager Corporate Governance on Outstanding and Completed Notices of Motion, Questions of Notice and Matters arising be acknowledged.

For: Kidd, Duffy, Hamling, McRae, Mileto, Munro, Nugent, Previtera, Taylor, Turner, Whitton

Against: Nil

Absent: Romano

MATTERS ARISING

Cr Taylor requested Council ensure that disabled and other restricted parking be clearly marked.

Cr Duffy requested Council ensure there are permitted drop off zones for disabled persons that organisations such as Live Better can utilise.

5.3 Statement of Investments - July 2019

TRIM Reference: 2019/1633

RESOLVED - 19/409 Cr J Whitton/Cr S Munro

That Council resolves:

1 To note the Statement of Investments as at 31 July 2019.

2 To adopt the certification of the Responsible Accounting Officer.

For: Kidd, Duffy, Hamling, McRae, Mileto, Munro, Nugent, Previtera, Taylor, Turner, Whitton

Against: Nil

Absent: Romano

5.4 Code of Conduct Complaint Reporting

TRIM Reference: 2019/1566

RESOLVED - 19/410 Cr J Hamling/Cr M Previtera

That the report on Code of Conduct Complaint Reporting be acknowledged.

For: Kidd, Duffy, Hamling, McRae, Mileto, Munro, Nugent, Previtera, Taylor, Turner, Whitton

Against: Nil

Absent: Romano

5.5 Sister Cities Community Committee

TRIM Reference: 2019/1632

RESOLVED - 19/411 Cr S Nugent/Cr J Whitton

That Council resolves a member of the Sister Cities Committee be supported to attend the national Sister Cities Association forum in Perth in September.

For: Kidd, Duffy, Hamling, McRae, Mileto, Munro, Nugent, Previtera, Taylor, Turner, Whitton

Against: Nil

Absent: Romano

MATTER ARISING

Cr Turner requested a report be prepared to review the activities and future of the Sister Cities Committee.

5.6 Orange LEP Amendment 17 - Post Exhibition Report

TRIM Reference: 2019/1511

RESOLVED - 19/412 Cr G Taylor/Cr J Whitton

1 That Council note the contents of this report and the submissions received from both the public and government agencies.

2 That Council advise the proponents of in-principle support for the LEP amendment subject to:

I. The matter being deferred to allow the preparation, exhibition and adoption of a contributions plan in relation to the horse and rider underpass and separation fencing.

II. The conceptual master plan being amended to provide separation fencing from the underpass to the Ring Road Arc in the west and the intersection of James Road and Pinnacle Road in the east.

3 That Council resolve to prepare an amendment to the Development Contributions Plan so as to ensure that the financial costs associated with the horse and rider underpass and associated separation fencing be at full cost to developers within the proposed Equine Precinct area.

4 That when prepared the Development Contributions Plan be placed on public exhibition for 28 days.

5 That the draft DCP provisions be amended as follows:

I. The minimum setback for stables in section 6.13.4 be changed to 20m, other than for secondary road frontages which is to be changed to 10m.

II. The minimum stables setback in section 6.13.4 be required to include a 5m wide landscaped area along the boundary comprising trees that mature to between 4 – 8 metres planted densely and protected from grazing during establishment.

III. The maximum stocking rate for horses in section 6.13.3 be changed to 1 horse per 4,000m²

IV. The minimum paddock size for each horse in section 6.13.6 be changed to 3,000m²

6 That upon successful completion of the contributions plan, DCP and concept plan amendments the matter be reported back to Council for finalisation.

For: Kidd, Duffy, Hamling, McRae, Mileto, Munro, Nugent, Previtera, Taylor, Turner, Whitton

Against: Nil

Absent: Romano

5.7 Development Application - DA 99/2019(1) - Lot 5 Calton Road

TRIM Reference: 2019/1713

RESOLVED - 19/413 Cr T Mileto/Cr S Munro

That Council resolves to consent to development application DA 99/2019(1) for Dwelling, Garage (detached), Farm Building, Solar Energy System (10kw) and 3 x 30,000L Rainwater Tanks at Lot 5 DP 1098110 – Calton Road, Orange pursuant to the conditions of consent in the attached Notice of Approval.

Division of Voting
Voted For	Cr R Kidd (Mayor), Cr K Duffy, Cr J Hamling, Cr J McRae, Cr T Mileto, Cr S Munro, Cr S Nugent, Cr M Previtera, Cr G Taylor, Cr R Turner, Cr J Whitton
Voted Against	Nil
Absent	Cr S Romano (Deputy Mayor)

5.8 Development Application DA 174/2019(1) - 500 Cecil Road

TRIM Reference: 2019/1732

RESOLVED - 19/414 Cr J Whitton/Cr G Taylor

That Council resolves to consent to development application DA 174/2019(1) for Educational Establishment (multi-purpose facility) at Lot 100 DP 1165434 - 500 Cecil Road, Orange pursuant to the conditions of consent in the attached Notice of Approval.

Division of Voting
Voted For	Cr R Kidd (Mayor), Cr K Duffy, Cr J Hamling, Cr J McRae, Cr T Mileto, Cr S Munro, Cr S Nugent, Cr M Previtera, Cr G Taylor, Cr R Turner, Cr J Whitton
Voted Against	Nil
Absent	Cr S Romano (Deputy Mayor)

5.9 Requests for Financial Assistance - Quarter 1 of 2019/20 - Event Sponsorship - Businesses Acting For Profit Applications

TRIM Reference: 2019/1736

RESOLVED - 19/415 Cr J Whitton/Cr S Munro

The Council resolves:

1 That funding of $600 from the Major Promotions Event Funding Program to the Fire and Ice Orange Incorporated (Council venue and cleaning fees reimbursement) be withdrawn as the event moved to a private location.

2 That funding of $3,000 be made from the Major Promotions Event Funding Program to the Central West Mums Group (seed funding for event promotion).

For: Kidd, Duffy, Hamling, McRae, Mileto, Munro, Nugent, Previtera, Taylor, Turner, Whitton

Against: Nil

Absent: Romano

5.10 Event Sponsorship Program

TRIM Reference: 2019/1716

RESOLVED - 19/416 Cr S Nugent/Cr J McRae

That Council adopt the draft Event Sponsorship Program guidelines, online application questions and Event Sponsorship Policy.

For: Kidd, Duffy, Hamling, McRae, Mileto, Munro, Nugent, Previtera, Taylor, Turner, Whitton

Against: Nil

Absent: Romano

5.11 Orange Sustainable Living Expo 2019

TRIM Reference: 2019/1731

RESOLVED - 19/417 Cr S Nugent/Cr R Turner

The Council resolves:

1 To approve funding of $6,000 to the Rotary Club of Orange (seed funding for event promotion).

2 That $3,000 be allocated from the Major Promotions Event Funding Program and $3,000 be allocated from Councils existing budget in water conservation.

For: Kidd, Duffy, Hamling, McRae, Mileto, Munro, Nugent, Previtera, Taylor, Turner, Whitton

Against: Nil

Absent: Romano

6 Closed Meeting

In accordance with the Local Government Act 1993, and the Local Government (General) Regulation 2005, in the opinion of the General Manager, the following business is of a kind as referred to in Section 10A(2) of the Act, and should be dealt with in a Confidential Session of the Council meeting closed to the press and public.

In response to a question from the Mayor, the General Manager advised that no written submissions had been received relating to any item listed for consideration by the Closed Meeting of Council.

The Mayor extended an invitation to any member of the public present at the meeting to make a presentation to the Council as to whether the meeting should be closed for a particular item.

RESOLVED - 19/418 Cr S Munro/Cr R Turner

That Council adjourn into a Closed Meeting and members of the press and public be excluded from the Closed Meeting, and access to the correspondence and reports relating to the items considered during the course of the Closed Meeting be withheld unless declassified by separate resolution. This action is taken in accordance with Section 10A(2) of the Local Government Act, 1993 as the items listed come within the following provisions:

6.1 Investment Policy and Procedures

This item is classified CONFIDENTIAL under the provisions of Section 10A(2) of the Local Government Act 1993, which permits the meeting to be closed to the public for business relating to (c) information that would, if disclosed, confer a commercial advantage on a person with whom the Council is conducting (or proposes to conduct) business.

6.2 Supply of Coagulant Chemical to Icely Road Water Treatment Plant

6.3 Write off Bad Debt >$5,000.00 - Michael Sieders Presents Pty Ltd - Debtor Account No 5964.57

This item is classified CONFIDENTIAL under the provisions of Section 10A(2) of the Local Government Act 1993, which permits the meeting to be closed to the public for business relating to (b) the personal hardship of any resident or ratepayer.

For: Kidd, Duffy, Hamling, McRae, Mileto, Munro, Nugent, Previtera, Taylor, Turner, Whitton

Against: Nil

Absent: Romano

The Mayor declared the Ordinary Meeting of Council adjourned for the conduct of the Closed Meeting at 8.00pm.

The Mayor declared the Ordinary Meeting of Council resumed at 8.15pm.

7 Resolutions from Closed Meeting

The Manager Corporate Governance read out the following resolutions made in the Closed Meeting of Council.

6.1 Investment Policy and Procedures

TRIM Reference: 2019/1550

RESOLVED - 19/419 Cr J Whitton/Cr S Nugent

That the report on Council investment policy and procedures be noted.

For: Kidd, Duffy, Hamling, McRae, Mileto, Munro, Nugent, Previtera, Taylor, Turner, Whitton

Against: Nil

Absent: Romano

6.2 Supply of Coagulant Chemical to Icely Road Water Treatment Plant

TRIM Reference: 2019/1423

RESOLVED - 19/420 Cr R Turner/Cr S Munro

That Council resolves:

1 That the tender for aluminium chlorohydrate be awarded to IXOM Operations Pty Ltd for supply and delivery of the product PAC23 at the submitted price of $679.00 per tonne (excluding GST) for a two year period from the time of contract execution, with the option to extend the contract for one additional year subject to performance.

2 That permission be granted for the use of the Council Seal on any relevant document if required.

For: Kidd, Duffy, Hamling, McRae, Mileto, Munro, Nugent, Previtera, Taylor, Turner, Whitton

Against: Nil

Absent: Romano

6.3 Write off Bad Debt >$5,000.00 - Michael Sieders Presents Pty Ltd - Debtor Account No 5964.57

TRIM Reference: 2019/1602

RESOLVED - 19/421 Cr K Duffy/Cr G Taylor

The Council resolves to write off the bad debt for Debtor Account 5964.57, Invoice 59463 in the sum of $8.040.00.

For: Kidd, Duffy, Hamling, McRae, Mileto, Munro, Nugent, Previtera, Taylor, Turner, Whitton

Against: Nil

Absent: Romano

The Meeting Closed at 8.25pm

This is Page Number 9 and the Final Page of the Minutes of the Ordinary Meeting of Orange City Council held on 20 August 2019.

Council Meeting 3 September 2019

5.5 2019-2020 Asset Management Strategy

RECORD NUMBER: 2019/1688

AUTHOR: Jason Theakstone, Manager Engineering Services

EXECUTIVE Summary

Council, at its meeting held on 25 June 2019, resolved to adopt the draft Delivery/Operational Plan 2019/20 – 2022/23 and draft Resourcing Strategy documents (Long Term Financial Plan, Workforce Management Plan and Asset Management Policy and Strategy).

As of adopting of these documents, Council needs to understand the future implications on its asset stock of adopting these documents.

This report serves to explain the future renewal backlog of Council’s assets due to the adoption of the Delivery/Operational Plan 2019/20 – 2022/23.

Link To Delivery/OPerational Plan

The recommendation in this report relates to the Delivery/Operational Plan strategy “17.2 Collaborate - Ensure financial stability and support efficient ongoing operation”.

Financial Implications

This report explains the financial implications in adopting the Delivery/Operational Plan 2019/20 – 2022/23.

Policy and Governance Implications

Nil

Recommendation

That Council resolves to:

1 Note the body of the report – 2019-2020 Asset Management Strategy;

2 Change its budget process timeline as to allow a relevant Asset Management Strategy to be presented to Council when adopting future Delivery and Operational Plans;

3 Adopt the intervention levels shown within Table 5.1 of the Asset Management Strategy as a committed level of service to the community for the 2019/2020 financial year; and

4 Hold an “Asset Management 101” workshop for each and every new Council within three months of being elected.

further considerations

Consideration has been given to the recommendation’s impact on Council’s service delivery; image and reputation; political; environmental; health and safety; employees; stakeholders and project management; and no further implications or risks have been identified.

SUPPORTING INFORMATION

Council resolved to adopt the draft Delivery/Operational Plan 2019/20 – 2022/23 and draft Resourcing Strategy documents (Long Term Financial Plan, Workforce Management Plan and Asset Management Policy and Strategy) at its 25 June 2019 meeting.

Adoption of these documents and their funding scenarios has a direct bearing on the future performance of Council’s Asset stock by addressing the current and predicted backlog of required works.

Council’s Engineering Department has generated Asset Management Plans (AMPS) and an Asset Management Strategy (AMS) that serves to show the future implications of asset improvement and/or deterioration when adopting an annually indexed budget such as the Delivery/Operational Plan 2019/20 – 2022/23.

Council should note the AMS presented to Council at its 25 June 2019 meeting contained a rudimentary sensitivity analysis showing the consequence of adopting the previous year’s budget and not the 2019/2020 budget in its present form.

Orange City Council has five full time staff dedicated to asset management. Its asset management practices are admired by surrounding councils and adopts the current best practices. Whilst Council’s asset management practices provide excellent information on its $1.56 billion inventory of assets, it is not considered when adopting a budget. In its current form, the AMS tells us the consequence of the budget.

Best practice asset management uses asset management information to inform the budget rather than the current practice of indexing a historical budget.

People use the best practice asset management method almost subconsciously when budgeting for their personal lives and Council should do the same. An example is people renew the tyres on their car when they need to be renewed rather than every three years or people buy a pack of toilet paper when they are running low on toilet paper rather than buying 20 rolls of toilet paper every fortnight religiously.

The adoption of the draft Delivery/Operational Plan 2019/20 – 2022/23 and draft Resourcing Strategy documents (Long Term Financial Plan, Workforce Management Plan and Asset Management Policy and Strategy) has the following implications/consequences on its $1.56 billion asset inventory,

1. Water assets will experience a $48M renewal backlog in 20 years;

2. Sewer assets will experience a $27M renewal backlog in 20 years;

3. Transport assets will experience a $14M renewal backlog in 20 years;

4. Building assets will experience a $14M renewal backlog in 20 years;

5. Parks assets will experience a $11M renewal backlog in 20 years;

6. Aerodrome assets will experience a $3M renewal backlog in 20 years

7. Water assets will experience a $4M renewal backlog in 20 years.

Council should note a backlog is a lack of renewal funding and will have lasting effect on the levels of service Council provides. Council should expect significant decay and failures of its assets in future years if the backlog is not addressed.

Table 1.1 below of the AMS shows the value, annual spend, funding gap and future backlog as of adopting the Delivery/Operational Plan 2019/20 – 2022/23 and draft Resourcing Strategy documents (Long Term Financial Plan, Workforce Management Plan and Asset Management Policy and Strategy).

($1000’s)

Asset	Fair Value	Operation & Maintenance	Renewal (Budget)	Upgrade & New	Renewal Funding Gap	Backlog Year 1	Backlog Year 10	Backlog Year 20
Water	317,587	16,584	1,845	2,770	2,397	9,507	9,246	47,936
Sewer	231,840	14,343	1,863	1,951	1,346	7,480	6,627	26,922
Sub Total (Water & Sewer)	549,427	30,927	3,708	4,721	3,743	16,987	15,873	74,858
Transport	407,425	8,638	2,187	16,220	719	9,998	12,704	14,378
Buildings	166,000	3,258	714	870	717	5,540	9,004	14,341
Parks	21,500	6,916	40	2,462	541	1,565	6,098	10,828
Drainage	149,200	647	26	534	0	440	0	0
Aerodrome	15,076	682	25	1,129	169	324	1,927	3,382
Aquatic Centre	13,200	1,916	20	100	208	270	2,340	4,165
Other	241,504
Sub Total (General Fund)	1,013,905	22,057	3,012	21,315	2,354	18,137	32,073	47,094
Total	1,563,332	52,984	6,720	26,036	6,097	35,124	47,946	121,952

Table 1.1

This Strategy is presented at a high level to provide key information that can be used in the determination of levels of service and funding required. Table 1.1 above provides a snapshot of the Council asset groups, twenty (20) year average costs, the funding gap between the available renewal budget and predicted renewal requirements and the projected backlog of works as at years 1, 10 and 20.

The backlog in year 1 of the plan is calculated by determining the value of works that are due as at 1 July 2019 that cannot be funded in the 2019/20 financial year. Deferring renewal backlog over the longer term creates intergenerational debt. Note a funding analysis has not yet been undertaken on the ‘Other’ assets.

Attached to this report is the 2019 – 2038 Orange Asset Management Strategy which outlines that the 2019/20 budget does not allow sufficient funding to cover the rate at which Council’s infrastructure assets are being consumed. As a result, the budget delivers an immediate renewal backlog of $35.1M and an annual average Renewal Funding Gap of $6.1M pa for which future generations will become liable if remedial action is not taken. The renewal backlog is projected to increase to $47.9M in year 10 of this plan and $121.9M in year 20.

Council should note the following in regards to funding for the following asset groups,

Water,

· $3M held in reserve for asset renewal in 2019 /2020 which has been allocated over subsequent years. It also includes a balloon payment held in reserve of $8M for an interest only loan from the sewer fund;

· 100% of funds from renewal, operations and maintenance sourced from water rates that are adjusted to keep up with expenditure (No rate pegging); and

· No real concern here as there is a supplementary 30 year financial plan that underpins the planned asset renewals and there are three sources of funding through the State Governments Safe and Secure Water program, developer contributions and water rates that can be indexed above inflation if the 30 year plan supports the increase.

Sewer,

· $1.6M held in reserve for asset renewal in 2019 /2020 as well as nearly $9M of internal loans from the sewer fund;

· 100% of funds from renewal, operations and maintenance sourced from sewer rates that are adjusted to keep up with expenditure (No rate pegging); and

All other Assets,

· 100% of funds from operations and maintenance sourced from general rates that are indexed annually in line with Council determination and rate pegging handed down from the State, often not keeping up with inflation;

· We receive some general and tied to roads ($1.3M) assistance from the Federal Government in the form of Federal Assistance Grants;

· We are often relying on Federal and State Assistance for renewal, new and replacement infrastructure;

· That is why with projects like the Conservatorium, it is important Council also considers (as it has done) retiring or disposing of the older asset in the funding mix; and

· It is also important that Council has a part to play in setting the intervention levels within the Asset Management Plans as these too can hide the true picture of the Asset Renewal Backlog.

Attachments

1 Orange Asset Management Strategy 2019 - 2038, D19/46861 ⇩

TABLE OF CONTENTS

1. Executive Summary. 2

2. Strategic Framework. 6

3. Services Provided. 8

4. Levels of Service. 9

5. Condition of Our Assets. 12

6. Operations. 14

7. Maintenance. 15

8. Capital Renewal / Rehabilitation. 17

9. Capital Upgrades & New Assets. 19

10. Disposal Plan. 21

11. Financial Plan. 22

12. Key Performance Measures. 23

13. Plan Improvements. 24

14. Risk Management Plan. 25

15. Appendix A: Example of Annual Service Costs. 27

16. Appendix B: Asset Management Implementation Strategy Action Pan. 28

17. Appendix C: 20 Year Financial Plan (2019 $,000) 30

18. Appendix D: 20 Year Renewal Backlog Projections (2019 $,000) 31

Document Control
Rev No	Date	Revision Details	Author	Verifier	Approver
1	01/06/2019	Draft Budget	AL	JT	IG
2	30/06/2019	Final Budget	AL	JT	IG
3	30/06/2019	Website Version	AL	JT	IG

1. Executive Summary

A high-level review of Council’s Asset Management policies, practices and systems has been completed in conjunction with the development of this document to provide a strategic direction and guidance for improving asset management planning and performance. Council is responsible for infrastructure and other assets that have a fair value of approximately 1.56 billion dollars at 30 June 2018.

This plan assists Council in the decision making process and is presented at a high level to provide key information that can used in the determination of levels of service and funding required. Table 1.1 identifies the asset groups in this plan, the twenty (20) year average costs and funding gap if one exists between the available renewal budget and predicted renewal requirements. The figures used in Table 1.1 are derived from the 2019-20 budget. Note a funding analysis has not been undertaken on the ‘Other’ assets.

Table 1.1: Council’s Asset Portfolio Overview ($,000)

Asset	Fair Value	Operation & Maintenance	Renewal (Budget)	Upgrade & New	Funding Gap	Backlog Year 1	Backlog Year 10	Backlog Year 20
Water	317,587	16,584	1,845	2,770	2,397	9,507	9,246	47,936
Sewer	231,840	14,343	1,863	1,951	1,346	7,480	6,627	26,922
Sub Total (Water & Sewer)	549,427	30,927	3,708	4,721	3,743	16,987	15,873	74,858
Transport	407,425	8,638	2,187	16,220	719	9,998	12,704	14,378
Buildings	166,000	3,258	714	870	717	5,540	9,004	14,341
Parks	21,500	6,916	40	2,462	541	1,565	6,098	10,828
Drainage	149,200	647	26	534	0	440	0	0
Aerodrome	15,076	682	25	1,129	169	324	1,927	3,382
Aquatic Centre	13,200	1,916	20	100	208	270	2,340	4,165
Other	241,504
Sub Total (General Fund)	1,013,905	22,057	3,012	21,315	2,354	18,137	32,073	47,094
Total	1,563,332	52,984	6,720	26,036	6,097	35,124	47,946	121,952

Notes:

1. Budget Figures are based on the Corporate Long Term Financial Plan (LTFP).

2. Capital Upgrade & New costs relate to projects identified in the 2019/20 budget, expressed as short-term (5 year) averages

3. Other assets in the fair value column include but aren’t limited to land, plant and equipment & library books

This Strategy is presented at a high level to provide key information that can be used in the determination of levels of service and funding required. Table 1.1 provides a snapshot of the Council asset groups, twenty (20) year average costs, the funding gap between the available renewal budget and predicted renewal requirements and the projected backlog of works as at years 1, 10 and 20.

Water and Sewer Fund Assets

Comparing renewal requirements extracted from Councils asset renewal modelling to allocated renewal expenditure delivered in the 2019/20 budget, Table 1.1 suggests that, keeping within the parameters of current service levels, Councils current total Water and Sewer renewal expenditure of $3.71M pa represents 42% of the $7.45M pa. required. The current level of water and sewer renewal expenditure, however, appears to be holding the backlog from increasing over the next 10 years, suggesting that, for the medium term, projected annual renewals are catered for. Long-term (20 yr) analysis suggests a significant increase in the volume of assets requiring renewal through the 10 to 20 year timeframe.

Water renewal expenditure was increased in 2017 by $500K pa. This followed a scenario analysis that revealed reserves within the Water fund were sufficient to finance both the annual increase in water main renewal expenditure and additional plant, staff and equipment for a new Water Main renewal crew, all without having to raise water charges.

General Fund Assets

Comparing general fund renewal requirements, generated from Councils asset renewal modelling, to allocated renewal expenditure, delivered in the 2019/20 budget, Table 1.1 suggests that, keeping within the parameters of current service levels, Councils current total general fund renewal expenditure of $3.01M pa represents 56% of the $5.366M pa. required.

An alternate method of analysing Council’s asset renewal expenditure is to use Note 9 (a) in Councils most recent financial statements (2017/18). An analysis of Note 9 (a) shows that, for the assets covered in this strategy, the Annual Depreciation Expense (ADE) amounts to $9.457M. ADE represents the cost of asset consumption, or the annual cost of assets wearing out. Comparing ADE to Council’s current asset renewal budget of $3.012M, Note 9 (a) suggests that Council is recovering only 32% of the annual asset consumption of assets funded by councils general fund.

Either way the analysis highlights that, depending on decisions regarding the condition at which assets are maintained or renewed over the next 10 years, the 2019/20 budget does not allow sufficient funding to cover the rate at which councils infrastructure assets are being consumed. As a result, the budget delivers an immediate general fund renewal backlog of $18.1M and an annual average Renewal Funding Gap of $2.35M pa for which future generations will become liable if remedial action is not taken. The renewal backlog is projected to increase to $32.1M in year 10 of this plan and $47.1M in year twenty.

Renewal Deferral

Long-term infrastructure renewal deferral creates an accumulation of intergenerational debt, which at some point, will need to be addressed. Financing this debt has real consequences on current ratepayers and customers. A recent example can be found within the NSW Electricity supply industry.

In a 2017 submission by “Energy Works Australia” to the New South Wales Legislative Council’s Select Committee Inquiry into Electricity Supply, Demand and Prices in NSW, one of the key drivers identified for the significant increases in electricity prices through 2007 to 2012 was:

“The need to replace aging infrastructure, given that much of Australia’s electricity infrastructure was built in the 1960,s and 1970’s with a working life of 30 – 40 years.”

As a result, the nation’s independent regulator, the Australian Energy Regulator (AER) implemented a number of mitigating initiatives. In relation to the aging infrastructure issue, the AER implemented changes in the price modelling structure, including infrastructure life cycle charges. The impact on customers through 2007 to 2012 was a doubling in household electricity prices over 5 years to finance asset consumption that occurred from previous generations of customers, up to 40 years prior.

2019/20 Budget Analysis

With respect to the 2019/20 Council budget, and keeping in mind the backlog and annual renewal shortfalls identified previously, the budget aims to deliver approximately $106.6M in new Infrastructure over the next 5 years (see Figure 9.1).

As these newly acquired assets age, additional operational, maintenance and renewal expenditure will be required to ensure these assets perform to community expectations. If not adequately funded, this projected renewal backlog will continue to grow resulting in an increasing volume of infrastructure performing below the standards expected by the community.

Using Table 1.1 as a guide, the 5 year planned new asset acquisitions represent an increase of 10.5% to the current asset stock. Increasing the current Operational and Maintenance (O & M) costs proportionally indicates an additional $2.3M pa would be required in O & M to maintain these new assets and an additional $316K pa in renewal over the longer term. These figures are in excess of any maintenance and/or renewal funding gaps already identified in this plan.

It needs to be stressed that we are considering long-term averages in this strategy and accordingly in some years the cost to renew will be higher and some years’ lower dependant on the number of assets that are due for renewal in each particular year. With the current modelling, in certain years there may be a small surplus shown in the analysis. The intention is that appropriate work will be ‘smoothed’ to provide a more consistent workflow and the Long Term Financial Plan adjusted to more closely match the timing of specific works.

Figure 1.1 below shows the rolling 10-year backlog for each asset category. (The rolling backlog is the renewal works identified as being required, that cannot be funded in the year they are due).

Figure 1.1: Anticipated Rolling Backlog over the next 10 years

Figure 1.2 provides an indication of the total annual expenditure for all asset categories in each of the major program areas together with the backlog that is expected in any one year based on the currently available funding.

Figure 1.2: Forecast Expenditure over the next 10 years

A number of options are available to address this funding gap including adjustment to service levels, extending asset life (i.e. changing the acceptable condition levels prior to renewal), obtaining increased grant funding, increases in rate revenue (i.e. Special Rate Variation) and borrowing strategies.

Levels of Service, Intervention Levels, Condition Rating and Useful Life

The determination of Levels of Service (LOS) is crucial in the calculation of the gap between required funds for asset service delivery and available budgets. The levels will be determined by defining the outcomes as agreed with the community, identifying the services required to meet those outcomes and the infrastructure required to support those services. Details on proposed LOS are contained within each of the eight Asset Management Plans.

In order to allocate limited funds responsibly, renewal or rehabilitation of assets will only be undertaken once they reach a certain condition, referred to as the intervention level. Typically, assets will not be renewed until they are between a condition 6 and 9 depending on the utilisation, function and / or criticality of the asset. Condition Rating assessments on individual assets are undertaken on a regular basis depending on the component, its current age, previous condition and criticality.

The Useful Life of an asset is the period from when it is constructed until it reaches its defined intervention level. The modelling undertaken is based on this information, which is a ‘best estimate’, with the actual life dependant on numerous factors that influence the rate of deterioration of the asset (e.g. construction methods, materials, weather, usage, and worker skill). Appendix A provides an example calculation of this.

The graph in Figure 1.3 presents a 2019 snapshot of the current condition of Councils assets based on the value of each asset component in each of 10 conditions ranging from 1 being near new to 10 as a completely failed component or asset. Note that this only includes the assets that have been condition rated and modelled in the 2019/20 Asset Management Plans.

Figure 1.3: Councils Asset Condition Profile Based on Value

Risk Management

Section 14 outlines the management of risk in delivery of assets to the community with their delivery considered in the Enterprise Risk Management Program. Critical assets are identified in each AMP with those most critical listed in this Strategy.

Improvement Program

The process of managing assets is one of continually improving the knowledge Council has including maintaining up to date asset registers, condition ratings, and the cost of work on the asset and the rate at which assets deteriorate and reach their intervention level.

To manage that process Council has undertaken a number of self-assessments against the National Asset Management Assessment Framework (NAMAF), which assisted in developing a plan of action to improve Council’s Asset Management knowledge, practices and benchmark performance. The benchmarking information has been taken from data made available on a number of Western Australia Councils that have completed an assessment. Future improvements to activities associated with the management of assets is contained in Appendix B. Council’s next NAMAF assessment will be undertaken in November 2019.

An Asset Management Long Term Financial Plan has been developed for each of the assets reviewed in the strategy with the details contained in Appendix C based on current (2019) dollars. The 20 year forecasts presented are based on the modelling undertaken and achieving the levels of service presented in the plan, and is intended to assist Council when considering future Community Strategic Plan, Delivery Program and Operational Plans. If changes are made to the Corporate Long Term Financial Plan, those changes will be reflected in the next AMS and Asset Management Plans.

In addition a 20 year renewal backlog projection is contained in Appendix D, detailing modelled renewal requirements, current budget forecasts and the resulting immediate, medium and long term backlog projected delivered by renewal expenditure contained within the 2019/20 budget.

2. Strategic Framework

Orange City Council developed a comprehensive community engagement strategy to ensure a broad range of opinions; ideas and visions were captured to help shape the Orange Community Strategic Plan. From this Plan a number of key outcomes are supported by the effective management of Assets including:

· 1.2 Live – Maintain and renew recreational spaces and infrastructure to encourage an active and healthy lifestyle.

· 5.2 Live - Ensure the community services provided by Council are professionally managed, integrated and meet demonstrated needs

· 8.1 Preserve - Identify and deliver essential water, waste and sewer infrastructure to service the community into the future

· 9.1 Preserve - Construct and maintain a road network meets the community’s transport and infrastructure needs

To assist in delivering these outcomes, Council will operate and maintain its assets to:

1. Ensure adequate provision is made for the long-term management of assets, the delivery of new assets and the renewal or upgrading of existing assets to meet service delivery objectives.

2. Ensure that assets are maintained in a safe and functional condition.

3. To encourage and support the economic and social development in and around Orange.

4. Ensure that Infrastructure is managed to deliver the requirements of Council’s Asset Management Policy and Community Strategic Plan.

We will achieve these objectives by:

· Maximising the service potential of existing assets by ensuring that they are appropriately used and maintained

· Identifying opportunities to reduce demand for new / upgraded assets by implementing demand management techniques and considering alternative service delivery options (e.g. water restrictions)

· Increasing value for money in the identification and delivery of new works by considering life cycle costing and / or alternative construction techniques

· Focusing attention on results by clearly assigning responsibility, accountability and reporting requirements in relation to asset management.

The key principles guiding the development of our Asset Management Strategy are:

· Sound information and systems are needed to inform decision making;

· Comprehensive asset management planning is required to ensure decisions are based on an evaluation of alternatives that take into account life cycle costs, benefits and risks of assets;

· The Community will be informed and have an opportunity to have involvement in establishing level of service standards based on a willingness to pay;

· Responsibility for asset management, including accountability and reporting requirements, is clearly established, communicated and implemented;

· An effective policy framework is established for the strategic management of assets.

The Strategy will be influenced by the following factors:

1. The increasing community expectations for a higher quality of service to be provided by Council.

2. An increasing focus on lifestyle and environmental issues.

3. The combination of ageing asset stock and increased community expectations will make risk management an increasingly important asset management activity.

4. The trend for the cost of materials, labour, and risk management will continue to be much greater than CPI in the short to medium term due to:

a) The cost of materials due to a range of factors - increasing: production, wages, cartage, insurances, quality assurance and other ancillary costs.

b) Escalations in the price of petroleum products will continue to have a significant impact because of the high proportion of the budget allocated to maintaining the road network, an area highly sensitive to the price of oil;

c) The continuing increased cost of risk management processes and public liability insurance;

d) The increased cost of occupational health and safety regulation and superannuation contributions.

5. The impact weather patterns have upon the pace of deterioration.

6. The ageing of infrastructure will require renewal at some time in the future if service levels are to be maintained.

7. Council’s 2016/17 Financial Statements indicate that the Orange City Council is in a sound financial position, however an asset renewal ratio of less than 100% indicates that insufficient funds are being allocated to adequately maintain infrastructure.

To effectively manage the long term financial impact of new assets developed as the City grows, an increase in maintenance, operational and renewal costs will be factored into the plan.

The City’s population is projected to grow at 0.8% per annum, based on the latest projections developed for the Community Strategic Plan. This will require new areas for housing, which are being staged through City planning to provide for logical and economic provision of suitable, serviced land. The population at the 2016 Census was estimated to be 42,356.

To assist in the delivery of the objectives in this plan, a number of key documents & systems have been prepared and should be referred to in considering the findings presented:

Table 2.1: Where can I find additional information?

Document / System	Content
Community Strategic Plan	Outcomes and Strategies identified by the community and includes the delivery, operational plan, annual report and resourcing strategy – published annually on the Orange City Council website
Council Asset Policy (ST007 – Asset Management)	How we manage assets – located in Councils Electronic filing system TRIM and on Council’s intranet and Council’s website
Asset Management Plans	Detailed analysis for each asset portfolio including Transport, Buildings, Water, Sewer, Urban Stormwater, and Parks & Landcare – reviewed annually and published on the OCC website
Asset Management Manual	Procedures and Processes the guide the management of assets – located in Councils Electronic filing system TRIM
Condition Assessment Manual	Details on the process of assessing condition, including photographic examples of various conditions– located in Councils Electronic filing system TRIM
Enterprise Risk Management Plan	The identification and management of risks across Council operations – Council staff Access through Councils Intranet
Civica Asset Management System (AM)	Electronic system that contains the asset register, condition ratings and used to model future renewals
Enlighten GIS	Geographical information system that produces maps of assets

3. Services Provided

Council recognises the importance of asset management planning. The preparation of this Asset Management Strategy is another step in providing guidance to Council on improving its asset management systems and practices.

Situated approximately 250 kilometres west of Sydney, the City of Orange is centrally located within the region commonly known as Central West of New South Wales. The City has an area of 286 square kilometres, and is located within the Tablelands climatic region of New South Wales.

Whilst the area is predominantly rural, about 90% of the population lives in the urban areas. The establishment of a classification system for asset groups will be included in each asset management plan (AMP) to ensure the efficient allocation of resources to maintain levels of service appropriate to their function. These classifications will be developed within each AMP specifically based on functionality, utilisation, and community requirements.

The infrastructure assets managed by Council are detailed in Table 3.1.

Table 3.1: What assets does Council manage ($M, June 2017)?

Asset Category	Component	Dimension / Scale	Fair Value
Transport	Roads (incl ancillaries)	479 km	407,425
	Kerb & Gutter	454 km
	Pathways	148 km
	Bridges & Ancillaries	41 bridges
Drainage		215 km	149,200
Drainage		215 km	149,200
Parks		33 playgrounds, >850 Ha	21,455
Buildings	Amenity	36	166,057
	Commercial	63
	Community	58
	Corporate	39
	Emergency Services	12
	Residential	20
	Storage	75
	Water & Sewer	54
Sewer		440km pipes, 61,000 EP S.T.P	231,840
Sewer		440km pipes, 61,000 EP S.T.P	231,840
Water		530 km pipes, 38.8 ML/d W.T.P	317,587
Water		530 km pipes, 38.8 ML/d W.T.P	317,587
Aerodrome	Includes runways & Internal Roads		15,076
Aerodrome	Includes runways & Internal Roads		15,076
Aquatic Centre	FV included in buildings		13,200
Aquatic Centre	FV included in buildings		13,200
Other	(Includes Plant, office equipment, land and other assets)		241,492
Other	(Includes Plant, office equipment, land and other assets)		241,492
Total			$1,563,332

4. Levels of Service

One of the basic tenets of sound asset management practice is to provide the level of service the current and future community want and are prepared to pay for, in the most cost effective way (NZ NAMS 2007). The final determination of service levels will be undertaken in conjunction with the community as the Superior Asset Management Project progresses. This will enable Council to make informed decisions on the allocation of community resources in accordance with community priorities and willingness to pay.

Figure 4.1 – How do we develop Level of Service?

The level of service and the cost to deliver services at that level is an essential component in strategic asset management planning. Council must know the true cost of service delivery, priorities placed by the community on infrastructure, the service levels that are desired by the community and at what level they are willing to pay.

Figure 4.2 – How can we determine a sustainable level of service?

As work on developing acceptable levels of service are underway, for the development of each Asset Management Plan, historical defined levels of service will be identified together with options to increase or decrease these levels and the cost savings / increases associated with those options. This will provide an excellent starting point for the consultation required as indicative costs for various service levels will be available.

Council will continue to develop service levels in the future revisions of each Asset Management Plans and link these service levels to the Delivery Program. This will provide the link between service levels and costs of service delivery, providing a tool for community consultation on these levels to enable Council to make decisions on service levels and costs in setting budgets and rate levels.

To assist in this process, consideration of life cycle costing and funding models is required to better inform Council and the Community.

Figure 4.3 – How do Levels of Service influence the Delivery Program?

Two primary types of level of service are defined in the AMP’s:

· Community LOS – relates to how the community receives the service in terms of safety, quality, quantity, reliability responsiveness, cost efficiency and legislative compliance; and

· Technical LOS – are the technical measures of performance developed to ensure the minimum community levels of service are met.

5. Condition of Our Assets

Council maintains a Condition Assessment Manual that details the frequency of inspection and condition rating to be used for all assets. This data is recorded in the Council Asset Management System and used to predict the timing of renewal / maintenance requirements in the Long Term Financial Plan.

Assets are rated on a 1 (Near New) to 10 (Completely Failed) scale consistent with the Maloney model and advanced asset management practices as outlined in the IPWEA International Infrastructure Management Manual. Details on how Council assesses condition and further information on the rating scale are contained in the Condition Assessment Manual.

The intent of Council is not to undertake renewal on an asset until it reaches its ‘Intervention Level’, that is the condition at which the community has determined renewal is required based on the LOS analysis. Typically, assets will be renewed between condition 6 & 9 which ranges from fair/poor to very poor depending on their classification.

Table 5.1: What are our Intervention Levels to Renew an Asset?

Component	Component and Class	Intervention Level	Useful Life
Transport	Collector Roads: Pavement	7	65
Water	All Reticulation water mains	9	70
Sewer	All DICL Sewer pipes	8	90
Drainage	All concrete pipes	9	165
Buildings	Premier Building Ducted Air Conditioners	8	30
Aerodrome	Runway Seal	5	15
Open Space	BBQ’s in Regional Parks	6	12

Each asset’s condition is maintained in the Asset Register and the graphs below gives the condition profile based on the dollar value assets in each condition. Note only modelled assets are graphed.

Figure 5.2: What Condition are Council’s assets in?

6. Operations

Operational activities are those regular activities that are required to continuously provide the service including asset inspection, electricity costs, fuel and overheads.

Table 6.1: When do we undertake Inspections?

Asset Group	Inspection	Frequency
Transport	Condition Assessments: Collector Roads	Annually
Water	Water Treatment Plant Checks	Daily
Sewer	CCTV Sewer Mains	5 Km per year
Drainage	CCTV Drainage Pipes	2% per year
Buildings	Condition Assessments	Annually
Aerodrome	Condition Assessments	Annually
Aquatic Centre	Condition Assessments	Annually
Open Space	Regional Facility Inspections	Annually

The expenditure on operational costs in each asset group are detailed in table 6.2 and graphed below.

Table 6.2: What are our Operational Costs? ($000)

Item	Budget
Transport	7,310
Water	14,970
Sewer	13,274
Buildings	2,139
Parks	4,639
Drainage	368
Aerodrome	591
Aquatic Centre	1,822
Total	45,113

Figure 6.1: What is the breakup of our Operational Costs?

7. Maintenance

Routine maintenance is the regular on-going work that is necessary to keep assets operating to ensure they reach their useful life. It includes work on an asset where a portion may fail and need immediate repair to make it operational again. It may be either planned where works are programmed in or cyclic in nature or reactive in response to storm damage, vandalism etc.

Maintenance is either planned or reactive, defined as:

· Reactive maintenance – unplanned repair work carried out in response to service requests.

· Planned maintenance – repair work that is identified and managed through a maintenance management system (MMS). MMS activities include inspection, assessing the condition against failure/breakdown experience, prioritising, scheduling, actioning the work and reporting what was done to develop a maintenance history and improve maintenance and service delivery performance.

Maintenance expenditure levels are considered to be adequate to meet required service levels. Future revision of this strategy will include linking required maintenance expenditures with required service levels in the CSP.

Table 7.1: What are our Maintenance Activities and the frequency we undertake them?

Asset Group	Activity	Class	Frequency
Transport	Jet patching pot holes	Collector	Daily
Water	Ozone servicing	All	Quarterly
Sewer	Blowers servicing	All	6 monthly
Drainage	Tree root removal	All	On inspection
Buildings	Cleaning	Premier Buildings	Daily
Aerodrome	Cleaning	Class A	Daily
Aquatic Centre	Exit Light Inspections	All	Weekly
Open Space	Mowing	Regional Parks	Weekly

Council’s proposed maintenance programs are detailed in each AMP, with the average annual costs detailed below:

Table 7.2: What are our Maintenance Costs?

Item	Budget
Transport	1,328
Water	1,614
Sewer	1,069
Buildings	1,119
Parks	2,277
Drainage	279
Aerodrome	91
Aquatic Centre	94
Total	7,871

Figure 7.1: What is the breakup of our Maintenance Costs? ($000)

Adjusting Maintenance Levels of Service

The opportunity to adjust the level of service provided by varying maintenance activities can be achieved primarily through reducing reaction time to repair defects, increasing the frequency of shoulder and other maintenance grading or other maintenance activities.

8. Capital Renewal / Rehabilitation

This includes work on an existing asset to replace or rehabilitate it to a condition that restores the capability of the asset back to that which it had originally. The intervention level and estimated useful lives are contained in Table 5.1.

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 the assets at a cost less than the full replacement cost.

This Asset Strategy contains an analysis based on broad assumptions and best available knowledge to date. Modelling is not an exact science so we deal with long term averages across the entire asset stock. Work will continue on improving the quality of our asset registers and systems to increase the accuracy of our renewal models.

Assets requiring renewal will be generally identified from estimates of remaining life and condition assessments obtained from the asset register and models. Candidate proposals will be inspected to verify the accuracy of the remaining life estimate and to develop a preliminary renewal estimate. Verified proposals are ranked by priority and available funds and scheduled in future works programmes.

Details of planned renewal activities proposed over the next 4 years are contained in each Asset Management Plan. The first year of the program will be considered in the development of the next Operational Plan and the remaining 3 years of work will be assessed each year to confirm that the asset has reached its intervention level prior to the work being scheduled.

The costs presented in the following table identifies the current level of funding for the required renewal programs and the funding required to maintain the asset to what is considered an appropriate standard. The required funding in that table is based on the intervention specified in Section 5.

For this asset group, an analysis has been undertaken to determine assets that are already at or above intervention level that are not able to be funded in the next Operational Plan. This work is quantified in the ‘Backlog’ column.

Table 8.1: What are our Renewal Costs, Gap and Backlog (20 Year Average $,000)?

Activity	Budget	Required	Gap	Backlog Year 1	Backlog Year 10
Transport	2,187	2,906	719	9,998	12,704
Water	1,845	4,241	2,397	9,507	9,246
Sewer	1,863	3,209	1,346	7,480	6,627
Buildings	714	1,431	717	5,540	9,004
Parks	40	582	541	1,565	6,098
Drainage	26	26	0	440	0
Aerodrome	25	194	169	324	1,927
Aquatic Centre	20	228	208	270	2,340
Total	6,718	12,815	6,098	35,124	47,946

It is clear from the initial analysis of each asset class that a gap in funding may exist depending on the condition at which renewal occurs. A number of options are available to manage this gap, including:

· Improving knowledge of the condition of assets and their remaining life, thereby deferring renewal as late as possible;

· Improving maintenance to extend the life of assets and defer projected renewal;

· Improving efficiency and introducing innovative practices for carrying out maintenance and renewal works;

· Using lower cost renewal / rehabilitation methods;

· Rationalising (disposing of unnecessary assets);

· Lowering service levels;

· Increasing Maintenance Operational and/or Renewal funding; and / or a

· Combinations of each option.

Asset Management Plans for each asset class consider these options in the analysis of service levels and the gap analysis.

It should also be recognised that the acquisition of additional assets (expansion and upgrade) will add to the funding gap for projected renewal and to annual operating and maintenance costs.

Figure 8.1: What will we spend over the next 10 years on Renewal

Adjusting Levels of Service using Renewal Intervention Scenarios

For all assets covered in this Strategy, a condition based “intervention level’ has been allocated representing the condition at which the renewal of an asset is proposed to be undertaken. Minimising the life cycle cost and indications of the desired level of service obtained through community engagement have been considered in setting intervention level conditions.

A phase up scenario raises the level of service so that the asset is renewed earlier in its life-cycle whilst it is performing at a higher standard. While a phase up scenario generally shortens the life of the asset and incurs more frequent renewal costs, it relieves the burden of additional maintenance and operational costs that would normally be required to ensure the asset remains in service longer.

A phase down scenario lowers the level of service forcing the asset to remain in use longer whilst performing to a lower standard. Phasing down reduces the renewal frequency, but generally incurs a higher level of maintenance and operational cost as the asset fails to meet the expected requirements of its service.

Table 4.1a and 4.1b details the possible cost of phasing up and the possible savings gained through phasing down of current intervention levels identified in each Asset Management Plan.

Table 4.1a – What is the cost of Phasing Up of 1 Condition Score? ($000)

Asset	Scenario	Avg Cost	Base Case	Movement
Transport	Ramp Up	4,201	2,906	1,295
Water	Ramp Up	5,884	4,280	1,604
Sewer	Ramp Up	4,504	3,180	1,324
Buildings	Ramp Up	1,592	1,293	299
Parks	Ramp Up	737	576	161
Drainage	Ramp Up	647	25	621
Aerodrome	Ramp Up	195	194	1
Aquatic Centre	Ramp Up	286	228	58
Total Phase Up Cost pa		18,046	12,683	5,363

Table 4.1b – What is the saving of Phasing Down by 1 Condition Score? ($000)

Asset	Scenario	Avg Cost	Base Case	Movement
Transport	Ramp Down	2,058	2,906	-847
Water	Ramp Down	2,417	4,280	-1,863
Sewer	Ramp Down	2,169	3,180	-1,012
Buildings	Ramp Down	1,159	1,293	-134
Parks	Ramp Down	508	576	-68
Drainage	Ramp Down	25	25	0
Aerodrome	Ramp Down	192	194	-2
Aquatic Centre	Ramp Down	200	228	-28
Total Phase Down Savings pa		8,728	12,683	-3,954

Lifecycle costs

The lifecycle costs are determined based on the total cost of ownership of each asset including operations, maintenance, renewal and disposal costs. The ten (20) year average annualised lifecycle costs for each component is presented in individual Asset Management Plan. The major asset components of each plan is shown in Table 8.2 below:

Table 8.2: What are the Lifecycle Costs of Council’s Major Asset Components

Asset Base	Asset	Quantity	Units	O&M ($000)	Renewal ($000)	Disposal ($000)	Average Annual ($000)	$/Unit p.a.
Transport	Sealed Urban Road	428	Km	7,202	3,513	187	10,902	25,471
Water	Reticulation	704	Km	8,445	828	41	9,314	13
Sewer	Reticulation	507	Km	4,253	869	43	5,165	10
Buildings	Roof	69,704	Sqm	173	241,108	36,166	277,447	4
Parks	Pedestrian Bridges	44	Each	374	29,381	4,407	34,162	776
Drainage	Pipes & Pits	212,453	Km	593	1,093,663	109,366	1,203,623	6
Aerodrome	Aircraft Movement Areas	112,172	Sqm	455	204,292	8,539	213,286	33
Aquatic Centre	Swimming Pool Structures	9,445	Sqm	1,758	118,007	14,161	133,926	46

9. Capital Upgrades & New Assets

Upgrades enhance an existing asset to provide a higher level of service, for example widening an existing road seal. New assets are those created to meet an additional service level requirement or increase the size of a network, for example, new subdivisions, or extension of the stormwater drainage network.

Capital upgrade and expansion expenditure adds to future liabilities. These works commit Council to fund ongoing budget liabilities for operations, maintenance, depreciation and finance costs (where applicable) for the life of the asset. They are discretional expenditure, which increases future operating and maintenance costs because it increases Council’s asset base, but may be associated with additional revenue from the new user group.

The requirements for new assets may result from growth, social or environmental needs. The impact from growth is included will be further developed in the next suite of Asset Plans and this Strategy. At present growth is predicted to continue at 0.8% per annum.

Both capital types may be funded at least in part through Developer Contributions in the form of a Section 64 or 7.11 Contribution, a Voluntary Planning Agreement, or as part of a subdivision development.

New assets and upgrade/expansion of existing assets are identified from various sources such as councillor or community requests, proposals identified by strategic plans or partnerships with other organisations. Candidate proposals are inspected to verify need and to develop a preliminary renewal estimate. Verified proposals are ranked by priority and available funds and scheduled in future works programmes.

Council has developed a framework for the prioritisation of capital projects and that information is used in the consideration of all new projects above the threshold set in the framework. Included in the analysis is the identification of life cycle costs as outlined in Appendix A.

Table 9.1 – Summary of Planned 5 year Capital (New) Works for each asset group. ($000)

Asset Area	2019/20	2020/21	2121/22	2022/23	2023/24	Total
Transport	40,549	24,231	3,262	9,745	3,312	81,099
Water	3,625	4,740	660	750	4,073	13,848
Sewer	928	1,897	3,537	2,330	1,065	9,757
Buildings	4,308	33	3	3	3	4,350
Parks	5,154	240	342	50	6,525	12,311
Drainage	0	0	1,330	940	400	2,670
Aerodrome	2,787	667	1,197	477	519	5,647
Aquatic Centre	0	0	0	500	0	500
Total	57,351	31,808	10,331	14,795	15,897	130,182

Figure 9.1: What will we spend over the next 10 years on Upgraded or New Assets?

10. Disposal Plan

Disposal is any activity associated with disposal of a decommissioned asset including sale, demolition or relocation. Assets with a condition rating of 9 (poor condition), where Council has received no contact through the Customer Request System indicating that the community don’t require the asset (as they have raised concerns or complaints about the asset condition) may be considered to be a redundant asset or not utilised and therefore decommissioned and disposed unless it is considered critical infrastructure.

Prior to consideration of any proposed disposal a detailed report will be presented to Council.

Table 10.1: What assets are we planning to dispose of?

Asset	Reason	Year	Cost
March Street 75mm CI main	Approaching end of serviceable life	2020/21	34,000
Turner Crescent SPS	Asset is currently non- Asset is no longer required (further development has removed the need for this pump station – connected now via gravity sewer to North Orange 1 SPS)	2021/22	40,000
Orange Showground – Fence – Concrete/mesh – old trotting track	Condition and function failed	2019/20	$1,000
Perry Oval Amenities	Structural damage has deemed the building unsafe for use.	2022/23	35,000

11. Financial Plan

As part of its funding strategy, Council has the option to supplement any or all of the current or new Asset proposals that come into consideration for construction with borrowings. This strategy is heavily influenced by the monitoring of Councils Debt Service. The debt service ratio is a measure of the degree to which revenues are committed to servicing debt. The purpose of the ratio is to assess the impact of loan principal and interest repayments on the discretionary revenue of the Council. Council’s long term target is to maintain a ratio of less than 12%.

A summary of the income and expenditure over the next 20 years is included in Appendix C, with the projected budget amounts being based on 2018 dollars increased for growth by 0.9% per annum. It is important to recognise that the forecasts developed in each AMP and therefore this Strategy are based on delivering the levels of service identified in each Plan. This information will be used to assist in the development of the overall Council Long Term Financial Plan that is adopted with the Community Strategic Plan, Delivery Program and Operational Plan.

Any changes made to the overall Long Term Financial Plan adopted by Council will be reflected in the next Asset Management Strategy and AMP’s.

A summary of the funding requirements and expenditure over the next 20 years is included in Appendix C. Funding for management of assets can come from a variety of sources as detailed in the table below.

Table 11.1: Where does our Income come from ($,000)?

Item	Budget
Transport	17,262
Water	20,179
Sewer	17,930
Buildings	596
Parks	890
Drainage	954
Aerodrome	1,709
Aquatic Centre	1,152
Total	60,672

Figure 11.1: What is the breakup of our income streams?

12. Key Performance Measures

AMPs document the linkage between levels of service and life cycle costs. Performance Levels are target Levels of Service. The performance measures for engineering services typically are:

· The amenity of local retail and industrial areas - including signage, street furniture and gardens, car parking enhancements;

· Community safety and accessibility of the built environment - including reductions in road pavement roughness, and increases in accessibility including maintaining and extending network of sealed roads, footpaths, and bridges;

· Accessibility of footpaths, and levels of street lighting;

· Environmental amenity - including the cleaning of stormwater drainage pits, water quality works, public transport and bicycle way enhancements.

To monitor these performance standards the following asset knowledge needs to be assembled:

· Demand projections and forecasts;

· A description of the current asset portfolio;

· A broad description of the management activities (operations & maintenance, renewals, capital works and asset disposals) required to deliver the defined service levels;

· Identification of strategies and actions required to ensure service sustainability, including resources and timeframes;

· A cash-flow forecast outlining the asset related expenditure required over the term of the plan;

· Compliance and risk strategies and costs.

As part of identifying the best value mix of service, there needs to be a clearly understood link between the economic, social and environmental prosperity for the community and the asset stock needed and revenues needed to deliver these objectives.

This information allows Council to make better informed decisions on the allocation of limited resources based on community values of service and cost. It stands to reason that the provision of services providing the highest benefit at the least cost will give the greatest value.

An example of this is the delivery of recreation services to the various sporting activities. The provision of turf cricket wickets is a high cost service typically used by a small number of cricketers in the top grades of the sport. On the other hand, a netball court is a medium – low cost service typically used by a large number of netball players. Council can then consider the relative priorities in allocating community resources to a small number of top grade sportspersons, a larger number of general sporting participants, or both.

13. Plan Improvements

It is not the intention of this strategic document to identify recommendations for individual areas of Council’s operations, but to establish the key areas for asset management improvement. A review of Council’s asset management processes and data utilising the NAMAF undertaken by the Asset Management Working Group in May 2014 provided the following results, which have recently been updated, to June 2018 estimates. The next NAMAF is due to be undertaken in November 2019 as part of Centroc-wide Asset Management Maturity project.

ID	Details	Maximum	May 2014 Compliance	Jun 2018 Compliance
1	Strategic Long Term Planning	20	80%	100%
2	Annual Budget	16	94%	94%
3	Annual Report	20	90%	90%
4	Asset Management Policy	20	90%	90%
5	Asset Improvement Strategy	12	83%	100%
6	Asset Plans	88	47%	94%
7	Governance and Management	28	64%	82%
8	Levels of Service	16	25%	69%
9	Data & Systems	32	53%	97%
10	Skills & Processes	40	55%	87%
11	Evaluation	12	0%	25%
	TOTAL		61.5	84.4

Details of the review are contained in the Asset Improvement Plan (AIP) report and includes the following improvement actions:

· Integrate the Authority Asset Management and Capital Value Registers

· Link all AMP LTFP’s with the Corporate LTFP and expand Chameleon to allow for 30-year projections enabling the AMP’s to inform annual budgets

· Update condition assessments, verify asset register completeness and refresh renewal models for all asset bases

· Develop a Capital Evaluation Framework including life-cycle analysis for all capital works

· Continue to expand the Maintenance Module in Authority

· Continue to update the Asset Management Manual (AMM) and Condition Assessment Manual (CAM).

The action plan attached in Appendix B incorporates actions that will address these shortfalls and start to move Council towards a more Advanced level of competence.

The Maturity Assessment chart showing Original Score series, Current Result series.

14. Risk Management Plan

Orange City Council is committed to a structured and systematic approach to the management of risk and has committed resources to the implementation of an Enterprise Risk Management Program.

This program aims to embed the principles of risk management in all aspects of Council’s operations, which will ultimately:

· Increase the likelihood of Council achieving its objectives

· Create an environment where all employees have a key role in managing risk

· Encourage proactive management

· Improve the identification of opportunities and threats

· Improve stakeholder confidence and trust

· Improve financial stability and minimise losses

· Improve organisational performance

For assets with potentially long lives, risks associated with changing economic conditions, varying levels of demand for services, new competition and maintenance and disposal requirements needs to be analysed and managed to ensure the investment is worthwhile.

Size is not the only consideration. Projects or programs, which are inherently complex will also benefit from particular attention to Risk Management. This might occur when there are important economic or financial aspects, sensitive environmental or safety issues, or complex regulatory and licensing requirements.

Orange City Council has developed an Enterprise Risk Management process based on the Australian Standard AS/NZS ISO 31000:2009 Risk Management – Principals and Guidelines, as shown below:

The ongoing implementation of the ERM program will include a more comprehensive risk assessment and ongoing action plan to manage the risks associated with Council’s assets.

One of the outcomes of this risk assessment in each plan will be the determination of Critical Assets. Critical assets are specific assets which have a high consequence of failure but not necessarily a high likelihood of failure. By identifying critical assets and critical failure modes, Council can appropriately target and refine inspection regimes, maintenance plans and capital expenditure plans.

Operations and maintenances activities may also be targeted to mitigate critical assets failure and maintain service levels. These activities may include increased inspection frequency, higher maintenance intervention levels, etc.

The most critical assets in each group are identified in the individual Asset Management Plans, with examples presented in Table 14.1 below:

Table 14.1 Critical Assets

Asset Group	Critical Asset	Critical Failure Mode	Treatment Plan
Transport	Northern Distributer Road	Premature failure due to sub-standard design and / or construction. Traffic diverted back to CBD	Increased condition inspections to enable early intervention. Renewal scheduled at condition 7. Identify alternative routes to detour traffic.
Water	Icely Road Water Treatment plan	Mechanical / electrical failure	Shortened response times to outages and implementation of Business Continuity Plan.
Sewer	Sewage Treatment	Mechanical/Electrical failure affecting effluent quality	Operational procedures and BCP’s
Drainage	Covered Channel running through Robertson Park	Collapse leading to major disruption in the CBD.	Regular monitoring of condition and increased intervention levels / response times.
Buildings	Civic Centre	Loss of critical data	Ensure heat exchange HWS is functioning correctly and the air-conditioner unit in the PABX room is maintained.
Aerodrome	Airport Terminal Building	Destruction due to fire event.	Increased inspection regime on fire detection systems, business continuity planning.
Aquatic Centre	Pool System	Dosing system	Carry out regular inspections and maintenance by contractors to ensure that the dosing system is working correctly. Ensure staff are properly trained in the use of this system.
Parks & Landcare	Wade Park Playing Surfaces	Loss of natural playing surface from disease or pest attack	Increased inspection regime for pest/disease identification and implantation of contingency venues list

15. Appendix A: Example of Annual Service Costs

This example details the costs to provide, operate (including daily cleaning), and maintain a new public Barbeque that is expected to have a life of 10 years. The annual service cost is detailed in Table A.1.

Table A.1 Annual Service Cost for a Public BBQ

Cost Source	Capital Cost	Annual Service Cost	Remarks
Capital Cost	$8,000
Finance/Opportunity cost		$640	8% pa
Depreciation		$800	10 years
Operations (cleaning)		$7,300	Daily
Maintenance		$400
Demolition		$100	$1,000 @ 10 yrs
Revenue		$0
TOTAL	$8,000	$9,240

The Annual Service Cost for the provision of the public barbeque is $9,240 for the 10-year life required. The cost per use can be calculated by dividing the Annual Service Cost by the number of uses.

The Costs shown in bold are the ongoing budget commitments that the Council must fund in future budgets for the service provided by the new barbeque. These total $8,500 per annum for the next 10 years (depreciation, operations, and maintenance).

The Annual Service Cost is a tool for evaluating capital works projects and recognising the “Cost of Ownership” the new asset will generate. Council should be satisfied that it will obtain value or community benefits greater than $9,240 per annum for this project, otherwise the project should not be approved.

This information should be used when considering annual capital works programs to assist in assessing projects. This shows the project estimate, apportioned into renewal and new asset components, the budget commitment and equivalent rate increase required to fund the budget commitment and the annual service cost.

In determining its capital works program, Council will make a policy decision to allocate funds for asset renewal in accordance with its Asset Management Plans under the principle of allocating the value of depreciation expense progressively for asset renewals.

16. Appendix B: Asset Management Implementation Strategy Action Pan

ID	Details	Due
5	Asset Management Strategy	30/10/2018
5.1	Incorporate review of performance of CLOS and TLOS from NAMAF Element 11 within the AMS. [NAMAF 5.3]	30/10/2018
6	Asset Management Plans	Annually
6.1	Finalise details on the 'other assets' to be incorporated into AMP's, including a decision on whether additional AMP's are required.[NAMAF 6.1]	July
6.2	Identify opportunities for non-asset service delivery (leasing / PPP etc.). [NAMAF 6.19]	August
6.3	Identify and document any opportunities for asset rationalization and disposal. [NAMAF 6.17]	August
6.4	Update asset registers including capture of any missing asset components. [NAMAF 6.4]	September
6.5	Review Enterprise Risk Management findings and document, including an update to the details on Critical Assets. [NAMAF 6.8]	October
6.6	Review works identified in the previous AMP that are scheduled within the next 4 years to develop a schedule for condition assessments. [NAMAF 6.6]	October
6.7	Review Unit Rates, useful lives and deterioration curves for all components to be modelled. Document unit rates into an appendix in the AMP. [NAMAF 6.7, 6.11]	November
6.8	Review demand forecasts and their impact on Operational, Maintenance and Renewal Costs. [NAMAF 6.10]	November
6.9	Review draft / adopted budget and update Model spreadsheets in preparation for development of renewal models. [NAMAF 6.12]	December
6.10	Confirm with Building Owners the renewal / maintenance works approved within the budget	December
6.11	Review Maintenance activities including relationship with renewal modelling to develop zero based LTFP [NAMAF 6.14]	February
6.12	Review Operational activities and identify opportunities for cost savings or requirements for additional funds. [NAMAF 6.15]	February
6.13	Update Condition Assessments for modelled components, focusing on works identified for next 2-4 years and leasing with Asset Owners / Operators as required. [NAMAF 6.6]	February
6.14	Undertake Renewal Modelling and develop LTFP [NAMAF 6.11, 12, 13, 14, 15]	March
6.15	Review LOS and costs to provide agreed levels. Identify costs to increase / reduce LOS. [NAMAF 6.20]	March
6.16	Review performance measures from previous AMP, document, and develop next AM Improvement Plan. [NAMAF 6.18]	April
6.17	Review proposed works schedule with Asset Owners / Operators to confirm priorities	April
6.18	Draft Asset Management Plan. Year 1 based on draft budget and recommended works. [NAMAF 6.1]	April
6.19	Internal Review of AMP’s	May
6.20	Draft AMP’s submitted to Council for adoption	June
6.21	Complete budget submission for renewal gap funding, including asset id for each renewal not funded with current budget allocation	September
7	Governance and Management	30/06/2019
7.1	Develop capital works evaluation framework. [NAMAF 7.4]	30/06/2019
8	Levels of Service	30/06/2019
8.1	Develop a Level of Service Framework. [NAMAF 8.2]	30/10/2018
8.2	Develop a Service Plan template linking the CSP, LTFP and AMS to the approved levels of service identified. [NAMAF 8.1]	30/03/2019
8.3	Incorporate Technical LOS into service agreements with service providers. [NAMAF 8.4]	30/06/2019
9	Data & Systems	31/10/2018
9.1	Develop written lifecycle strategy to ensure appropriate data is available to asset custodian and this data is utilized in general day to day planning of assets.	29/06/2018
9.2	Improved documentation on useful lives of assets and suitability of use in the Orange context. Refer also 6.7	30/08/2018
9.3	Determine Assets that require an emergency / disaster response and recovery plan or Business Continuity Plan and prepare	30/09/2018
9.4	Investigate integration of existing Authority Systems (CRM, MM, AM, and CVR) as well as TRIM to ensure maximum capability is used to manage assets.	30/10/2018
10	Skills & Processes	30/03/2019
10.1	Review the overall roles and responsibilities framework for assets across the organisation utilizing information from the engagement process above.	30/09/2018
10.2	Document the procedure for determining the cost to bring assets back to satisfactory (as required in SS7 audit worksheet)	30/11//2018
10.3	Develop process for management strategies around critical assets including reporting on the condition and performance of these assets	30/03/2019
11	Evaluation	30/08/2019
11.1	Develop an AM Performance Framework that captures KPI's, risks, actions, accountabilities and resource implications and the organisations performance against those KPI. Undertake internal audit against the framework to ensure the entire Framework is being complied with and continuous improvement. [NAMAF 11.1]	30/07/2019
11.2	Develop a process and reporting format for the presentation of Community and Technical Levels of Service including frequency of reporting, to whom and measures to be reported on. [NAMAF 11.2, 11.3]	30/08/2019

17. Appendix C: 20 Year Financial Plan (2019 $,000)

Asset Group	2019/20	2020/21	2021/22	2022/23	2023/24	2024/25	2025/26	2026/27	2027/28	2028/29	2029/30	2030/31	2031/32	2032/33	2033/34	2034/35	2035/36	2036/37	2037/38	2038/39	Average
Income
Transport	(50,109)	(34,201)	(13,814)	(20,438)	(14,116)	(36,512)	(12,662)	(12,765)	(12,165)	(12,031)	(12,139)	(12,249)	(12,359)	(12,470)	(12,582)	(12,696)	(12,810)	(12,925)	(13,042)	(13,159)	(17,262)
Water	(19,343)	(19,394)	(19,535)	(19,585)	(19,638)	(19,745)	(19,839)	(19,884)	(19,946)	(19,953)	(20,016)	(20,158)	(20,332)	(20,482)	(21,074)	(20,298)	(20,917)	(21,016)	(21,127)	(21,294)	(20,179)
Sewer	(14,598)	(14,719)	(14,870)	(15,344)	(19,619)	(16,208)	(18,793)	(18,303)	(16,417)	(16,697)	(16,943)	(17,192)	(17,491)	(17,817)	(18,753)	(17,866)	(28,559)	(19,123)	(19,470)	(19,822)	(17,930)
Buildings	(5,703)	(2,923)	(155)	(159)	(163)	(167)	(171)	(175)	(180)	(184)	(186)	(187)	(189)	(191)	(192)	(194)	(196)	(198)	(199)	(201)	(596)
Parks	(3,828)	(146)	(424)	(137)	(6,637)	(4,655)	(139)	(130)	(134)	(137)	(138)	(140)	(141)	(142)	(143)	(145)	(146)	(147)	(149)	(150)	(890)
Drainage	(713)	(629)	(1,957)	(1,566)	(1,026)	(1,225)	(1,008)	(1,239)	(1,253)	(1,448)	(674)	(680)	(686)	(692)	(699)	(705)	(711)	(718)	(724)	(731)	(954)
Aerodrome	(1,354)	(1,387)	(2,172)	(1,958)	(1,494)	(1,531)	(1,570)	(1,609)	(1,649)	(1,690)	(1,706)	(1,721)	(1,737)	(1,752)	(1,768)	(1,784)	(1,800)	(1,816)	(1,832)	(1,849)	(1,709)
Aquatic Centre	(934)	(958)	(982)	(1,306)	(1,031)	(1,057)	(1,084)	(1,111)	(1,139)	(1,167)	(1,177)	(1,188)	(1,199)	(1,210)	(1,220)	(1,231)	(1,243)	(1,254)	(1,265)	(1,276)	(1,152)
Total Income	(96,582)	(74,357)	(53,909)	(60,493)	(63,724)	(81,100)	(55,266)	(55,216)	(52,883)	(53,307)	(52,979)	(53,515)	(54,134)	(54,756)	(56,431)	(54,919)	(66,382)	(57,197)	(57,808)	(58,482)	(60,672)
Operations
Transport	6,488	6,933	7,197	7,267	7,305	7,377	7,451	7,475	7,291	7,075	7,138	7,203	7,268	7,333	7,399	7,466	7,533	7,601	7,669	7,738	7,310
Water	14,466	14,492	14,534	14,595	14,627	14,881	14,929	15,001	15,040	15,183	15,023	15,072	15,104	15,152	15,329	14,964	15,149	15,242	15,287	15,327	14,970
Sewer	11,059	11,302	11,528	11,751	12,041	12,272	12,514	12,733	12,948	13,148	13,346	13,594	13,820	14,036	14,742	14,072	14,758	15,010	15,270	15,532	13,274
Buildings	1,773	1,815	1,858	1,902	1,947	1,994	2,041	2,090	2,140	2,191	2,211	2,231	2,251	2,271	2,291	2,312	2,333	2,354	2,375	2,396	2,139
Parks	3,910	3,960	4,037	4,135	4,230	4,346	4,430	4,524	4,631	4,742	4,784	4,828	4,871	4,915	4,959	5,004	5,049	5,094	5,140	5,186	4,639
Drainage	413	323	315	307	300	292	289	366	374	381	385	388	392	395	399	402	406	410	413	417	368
Aerodrome	638	614	589	564	554	548	548	557	567	578	583	588	593	599	604	609	615	620	626	632	591
Aquatic Centre	1,530	1,541	1,578	1,616	1,656	1,696	1,737	1,779	1,822	1,866	1,883	1,900	1,917	1,934	1,951	1,969	1,987	2,005	2,023	2,041	1,822
Total Operations	40,277	40,980	41,636	42,137	42,660	43,406	43,939	44,525	44,813	45,164	45,353	45,804	46,216	46,635	47,674	46,798	47,830	48,336	48,803	49,269	45,113
Maintenance
Transport	1,391	1,414	1,438	1,463	1,489	1,515	1,542	1,569	1,151	1,180	1,191	1,201	1,212	1,223	1,234	1,245	1,256	1,268	1,279	1,291	1,328
Water	1,392	1,417	1,443	1,469	1,495	1,522	1,549	1,577	1,606	1,635	1,649	1,664	1,679	1,694	1,710	1,725	1,740	1,756	1,772	1,788	1,614
Sewer	922	938	955	972	990	1,008	1,026	1,044	1,063	1,082	1,092	1,102	1,112	1,122	1,132	1,142	1,152	1,163	1,173	1,184	1,069
Buildings	920	943	967	991	1,016	1,041	1,067	1,094	1,121	1,149	1,160	1,170	1,181	1,191	1,202	1,213	1,224	1,235	1,246	1,257	1,119
Parks	1,940	1,929	1,966	2,015	2,064	2,115	2,168	2,221	2,276	2,333	2,354	2,375	2,396	2,418	2,440	2,462	2,484	2,506	2,529	2,551	2,277
Drainage	229	235	241	247	253	260	266	273	280	287	289	292	294	297	300	302	305	308	311	313	279
Aerodrome	70	98	74	102	78	105	81	109	86	88	89	89	90	91	92	93	93	94	95	96	91
Aquatic Centre	78	80	82	84	86	88	90	92	94	96	97	98	99	100	101	102	103	104	104	105	94
Total Maintenance	6,942	7,054	7,166	7,343	7,471	7,654	7,789	7,979	7,677	7,850	7,921	7,991	8,063	8,136	8,211	8,284	8,357	8,434	8,509	8,585	7,871
Renewal
Transport	1,680	1,624	1,918	1,963	2,010	2,057	2,106	2,156	2,208	2,260	2,281	2,301	2,322	2,343	2,364	2,385	2,407	2,428	2,450	2,472	2,187
Water	1,721	2,233	2,337	1,340	5,843	1,647	4,050	1,354	5,858	1,362	3,865	1,325	1,325	1,325	1,325	1,325	1,325	1,325	1,325	1,325	2,177
Sewer	2,295	3,395	3,495	1,395	3,195	1,395	1,495	1,395	1,395	1,395	3,245	3,995	3,395	1,395	1,395	1,395	1,395	1,395	1,395	1,395	2,063
Buildings	739	602	651	659	674	687	702	594	731	753	771	789	807	826	844	862	880	899	915	933	766
Parks	145	92	26	34	27	35	29	37	30	31	31	31	32	32	32	32	33	33	33	34	40
Drainage	70	71	71	72	73	73	80	0	0	0	0	0	0	0	0	0	0	0	0	0	26
Aerodrome	0	0	0	500	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	25
Aquatic Centre	5	5	269	5	5	19	5	5	6	6	6	6	6	6	6	6	6	6	6	6	20
Total Renewal	6,655	8,022	8,767	5,968	11,827	5,913	8,467	5,541	10,228	5,807	10,199	8,447	7,887	5,927	5,966	6,005	6,046	6,086	6,124	6,165	7,302
Upgrade / Expansion
Transport	40,549	24,231	3,262	9,745	3,312	25,563	1,564	1,565	1,515	1,516	1,530	1,544	1,557	1,571	1,586	1,600	1,614	1,629	1,643	1,658	6,438
Water	3,625	4,740	660	750	4,073	550	2,441	550	3,948	550	8,280	540	540	540	1,301	540	540	540	5,060	855	2,031
Sewer	928	1,897	3,537	2,330	1,065	5,154	2,040	2,045	432	45	45	899	2,045	45	45	1,623	45	45	45	45	1,218
Buildings	4,308	33	3	3	3	3	3	3	3	3	3	3	3	3	3	3	3	3	3	3	220
Parks	5,154	240	342	50	6,525	4,525	25	25	25	25	25	25	26	26	26	26	27	27	27	27	860
Drainage	0	0	1,330	940	400	600	373	600	600	780	0	0	0	0	0	0	0	0	0	0	281
Aerodrome	2,787	667	1,197	477	519	525	530	536	0	0	0	0	0	0	0	0	0	0	0	0	362
Aquatic Centre	0	0	0	500	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	25
Total Upgrade / Expansion	57,351	31,808	10,331	14,795	15,897	36,920	6,976	5,324	6,523	2,919	9,883	3,011	4,171	2,185	2,961	3,792	2,229	2,244	6,778	2,588	11,434
Total Expenditure	111,225	87,864	67,900	70,243	77,855	93,893	67,171	63,369	69,241	61,740	73,356	65,253	66,337	62,883	64,812	64,879	64,462	65,100	70,214	66,607	71,720

18. Appendix D: 20 Year Renewal Backlog Projections (2019 $,000)

Asset Group	2019/20	2020/21	2021/22	2022/23	2023/24	2024/25	2025/26	2026/27	2027/28	2028/29	2029/30	2030/31	2031/32	2032/33	2033/34	2034/35	2035/36	2036/37	2037/38	2038/39	Average
Renewal Required
Transport	11,678	522	1,156	567	2,169	3,113	2,839	3,670	3,119	3,854	3,402	1,061	2,588	2,197	3,273	3,252	2,448	1,716	1,160	4,330	2,906
Water	10,902	9,441	52	2,199	32	897	1,024	1,244	4,765	3,029	4,212	3,505	4,664	4,702	3,871	7,167	3,452	8,631	10,111	924	4,241
Sewer	9,575	5,425	832	863	196	474	653	2,701	991	3,766	1,641	803	1,949	808	6,174	1,426	17,874	3,373	2,253	2,393	3,209
Buildings	6,226	516	1,015	1,499	854	1,125	1,291	883	1,189	671	3,061	1,891	1,947	880	1,004	1,205	862	621	1,130	741	1,431
Parks	1,710	606	302	1,424	252	263	473	780	477	296	1,321	800	522	411	272	270	471	488	174	324	582
Drainage	510	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	26
Aerodrome	324	120	0	1	7	0	1,630	90	0	256	142	15	5	20	9	854	111	0	251	47	194
Aquatic Centre	275	405	415	139	237	664	77	25	152	279	71	0	64	77	262	891	356	54	70	40	228
Total Required	41,200	17,035	3,772	6,692	3,747	6,536	7,987	9,393	10,693	12,151	13,850	8,075	11,739	9,095	14,865	15,065	25,574	14,883	15,149	8,799	12,815
Renewal Budget
Transport	1,680	1,624	1,918	1,963	2,010	2,057	2,106	2,156	2,208	2,260	2,281	2,301	2,322	2,343	2,364	2,385	2,407	2,428	2,450	2,472	2,187
Water	1,395	1,905	2,005	1,005	5,505	1,305	3,705	1,005	5,505	1,005	3,505	1,005	1,005	1,005	1,005	1,005	1,005	1,005	1,005	1,005	1,845
Sewer	2,095	3,195	3,295	1,195	2,995	1,195	1,295	1,195	1,195	1,195	3,045	3,795	3,195	1,195	1,195	1,195	1,195	1,195	1,195	1,195	1,863
Buildings	686	549	598	606	621	634	649	541	681	703	721	739	756	774	792	809	827	845	861	878	714
Parks	145	92	26	34	27	35	29	37	30	31	31	31	32	32	32	32	33	33	33	34	40
Drainage	70	71	71	72	73	73	80	0	0	0	0	0	0	0	0	0	0	0	0	0	26
Aerodrome	0	0	0	500	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	25
Aquatic Centre	5	5	269	5	5	19	5	5	6	6	6	6	6	6	6	6	6	6	6	6	20
Total Budget	6,076	7,441	8,182	5,380	11,236	5,318	7,869	4,939	9,625	5,200	9,589	7,877	7,316	5,355	5,394	5,432	5,473	5,512	5,550	5,590	6,718
Renewal Gap
Transport	9,998	8,896	8,134	6,738	6,897	7,953	8,686	10,199	11,110	12,704	13,826	12,586	12,852	12,706	13,615	14,481	14,523	13,811	12,521	14,378	719
Water	9,507	17,043	15,090	16,285	10,812	10,404	7,723	7,962	7,222	9,246	9,953	12,453	16,112	19,809	22,675	28,837	31,285	38,911	48,017	47,936	2,397
Sewer	7,480	9,711	7,247	6,916	4,117	3,396	2,754	4,260	4,056	6,627	5,222	2,230	985	598	5,577	5,808	22,488	24,666	25,724	26,922	1,346
Buildings	5,540	5,506	5,924	6,817	7,051	7,542	8,185	8,527	9,035	9,004	11,343	12,496	13,686	13,792	14,003	14,399	14,434	14,210	14,478	14,341	717
Parks	1,565	2,079	2,355	3,745	3,970	4,197	4,641	5,385	5,832	6,098	7,388	8,157	8,647	9,026	9,266	9,503	9,942	10,397	10,538	10,828	541
Drainage	440	369	298	226	153	80	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
Aerodrome	324	444	444	0	0	0	1,581	1,672	1,672	1,927	2,069	2,084	2,089	2,109	2,118	2,972	3,083	3,083	3,334	3,382	169
Aquatic Centre	270	671	816	951	1,183	1,828	1,900	1,920	2,067	2,340	2,405	2,399	2,457	2,528	2,785	3,670	4,020	4,068	4,131	4,165	208
Total Gap	35,124	44,719	40,308	41,678	34,183	35,400	35,470	39,925	40,994	47,946	52,206	52,405	56,828	60,568	70,039	79,670	99,775	109,146	118,743	121,952	6,098

Nominator
	Name	Signed


Nominator
	Name	Signed


Nominator
	Name	Signed


Nominator
	Name	Signed


		Date 2019

Orange City Council
Policy Committees (comprise all Councillors only)
Employment and Economic Development	Finance	Services	Infrastructure	Sport and Recreation	Environmental Sustainability	Planning and Development
Community Committees reporting to the Policy Committees – Members include Councillors and members of the public
Economic Development Orange Health Liaison Sister Cities	Audit and Risk Management	Ageing and Access Clifton Grove Cultural Heritage Community Safety and Crime Prevention Lucknow NAIDOC Week Orange Regional Museum Orange Conservatorium and Planetarium Spring Hill	City of Orange Traffic (**statutory committee) Floodplain Risk Management Orange Airport Orange and Cabonne Road Safety	Sport and Recreation (incl Bicycling) Orange Showground Australia Day	Companion Animals Environmental Sustainability Parks, Trees and Waterways Tidy Towns

Nominator
	Name	Signed


Nominator
	Name	Signed


Nominator
	Name	Signed


Nominator
	Name	Signed



		Date 2019

Reference	Update
General	· Re-Written Policy