Asset Valuation Manual

From Corowa Shire Council
Jump to: navigation, search

Revision: 20161012103308

Last Published: October 2016

Contents

Overview

The principle reason for this manual is to facilitate the financial reporting of Corowa Shire Council's infrastructure assets. This manual conforms to the NSW Division of Local Government (DLG)'s mandate, that NSW councils commence valuing infrastructure assets at fair value in accordance with Australian Accounting Standard 116 (AASB 116).

Council's valuations are recorded at the depreciated replacement cost (i.e. written-down value) using the fair value approach. National Asset Management Strategy (NAMS) Financial Reporting Guidelines have been used to determine the formulae applied in calculating depreciation. Periodically Council's infrastructure assets will be re-valued, according to the principles and guidelines of AASB 116.

Assets Covered

Corporate Data Storage

Corowa Shire currently uses PostgreSQL, an open source object-relational database system, to maintain its Corporate Asset Register. This system stores all asset information securely in network based module which is backed up nightly.

With sophisticated trigger functions the annual valuation of an asset is recalculated as soon as any relevant attribute is changed, eg. width, length, diameter, material, etc. Trigger functions are also used to ensure that any time an asset is added, changed, or deleted from the Register an audit trail is kept.

Being ODBC compliant, information in the PostgreSQL database can be accessed and/or edited using a wide selection of software applications. These applications include IntraMaps, SQL Server, Microsoft Access and Quantum GIS, which are all used by Council for this purpose.

The Register also has the ability to:

  • Assign global formulae for calculating remaining life based on age or condition.
  • Perform audit trails for changes between valuations.
  • Import inventory changes and export reports.
  • Apply a range of unit replacement costs across asset categories.
  • Classify each asset type into various sub-types.
  • Componentise the assets in accordance with AAS16.

Asset Valuation Methodology

In accordance with the requirements of the NSW DLG, Corowa Shire Council has completed a program of revaluing its infrastructure assets. Community land was the final asset class to be revalued, and this was completed in the 2010-11 financial year. Assets are now valued using fair value i.e. not on a cost basis. The valuations undertaken comply with the requirements of the professional accounting standards Financial Reporting for Local Government (AAS 27) and International Financial Reporting Standards (IFRS).

How do we define Infrastructure Assets at Corowa Shire Council?

Our definitions are based on the Australian Accounting Standards (AAS), which define assets as 'future economic benefits' controlled by the entity as a result of past transactions or other past events. As an example a road will provide ability to users to travel from one point to another for a long period of time (future economic benefit) as a result of council building that road (past transaction).

Infrastructure assets may not have a market value i.e. a market price does not always exist. As an example, roads and footpaths are not bought and sold on open markets like sheds or properties. Therefore under accounting guidelines, an infrastructure asset is valued on the basis of its 'replacement cost of the asset's future economic benefits'. This is its fair value.

How have we developed Replacement Costs and Unit Rates?

The 'Replacement Cost' method is the most common method for non-commercial infrastructure assets such as Council assets. It requires detailed asset component information. Using the standard estimation approach, standard unit rates for replacement have been derived and applied.

Refer to Section 3 for Council's unit rates.

How do we define Depreciation?

Depreciation is the measure of 'using up' or consumption of the asset, in providing that asset to the community and is measured on an annual basis. Therefore, simply put, it is part of the cost of providing the future economic benefits, which is expensed along with other charges like maintenance through a charging system to the Annual Financial Statement.

Replacement Value = Unit Rate for Replacement × Asset Quantity
Written Down Value = Replacement Value × (Remaining Life ÷ Useful Life)
Accumulated Depreciation = Replacement ValueWritten Down Value
Annual Depreciation = Written Down Value ÷ Remaining Life

Depreciation values have been determined using the change in written down value over a time period, based on the asset's consumption profile. Over the course of an asset's life there are a number of points where the value will be known including the date of purchase, the expected end of life and any dates where condition or value have been assessed. Using these points along with the asset's applied consumption pattern, a formula for calculating value at any point in time can be derived. This formula in turn can be used to calculate asset value at the start and end dates of a period, the difference being the depreciation for that period. This is in line with the new IFRS.

What Depreciation is not

It is not a measure of the expenditure required to maintain or renew assets. It is also not cash, it does not generate cash.

Depreciation is important to reflect the appropriate carrying value and has been recorded in Council's Corporate Asset Register to provide a statement of financial position.

How do we define the Useful Lives of Corowa's Assets?

Useful Life is an estimate or expected duration between placing the asset into service and removing it from service on the basis of obsolescence or when it ceases to provide the 'minimum benefits' that it was intended to provide. In short it is the period between which the future economic benefits embodied in that asset are expected to be consumed by the users.

We have interpreted the standards to mean that the useful life is not a static figure but can vary over time.

Factors which may vary the estimated useful life of an asset are:

  • Maintenance practices – the quantity and quality of both routine and periodic maintenance.
  • Original quality of construction.
  • Types of use, e.g. heavy vehicles or light traffic affect the life of a road.
  • Environment, e.g. reactive soils may lead to early deterioration of footpaths.
  • Technical obsolescence.

AAS requires that the initial estimate of useful life should be based on evidence that is specifically drawn from the assessment of:

  • Physical use.
  • Wear and tear.
  • Technical and physical obsolescence.
  • Legal and other restrictions on the use of the asset.

Lives of assets will be reviewed at least annually in accordance with IFRS.

How do we determine the Written Down Value of Corowa's Assets?

The methodology for determining written down value varies depending on the physical characteristics of a given asset. Assets can be categorised into three broad categories.

No Depreciation

For valuation purposes these assets are said to have infinite useful life. The written down value of these assets is not affected by use or the passing of time, and is always equal to the replacement value.

Figure 1: Consumption Chart - Non-depreciable Asset
Non-depreciable Asset Consumption Chart.jpg

Examples include land and landscaping.

Straight Line Depreciation

These assets are consumed consistently through the course of their useful life. A daily depreciation can be calculated by dividing the replacement value by the number of days in the asset's useful life. Subsequently the accumulated depreciation can be calculated by multiplying this daily depreciation by the number of days since the asset was acquired. The written down value is equal to the replacement value minus this calculated accumulated depreciation.

Figure 2: Consumption Chart - Linear Depreciation Asset
Straight-line Depreciation Asset Consumption Chart.jpg

Examples include electrical and mechanical equipment that have relatively short useful lives.

Non-Linear Depreciation

Most of Council's long-life infrastructure assets fall into this category. The daily depreciation of these assets vary depending on what stage of life they are in. In most cases asset life stages are defined as:

Mint
Brand new. No visible defects. Condition 1 in a 5-step condition rating. For a short period of time the asset maintains pretty much all of its original value.
New
Still new in appearance, however minor defects are becoming evident. Condition 2 in a 5-step condition rating. This is when an asset is in its prime and loses little value over a large portion of its life.
Rapid Deterioration
On the decline. Protective barriers are beginning to wear off, so minor defects rapidly accelerate to become major. Conditions 3 and 4 in a 5-step condition rating. Over a moderate amount of time, a large proportion of an asset's value is lost.
Acquiescence
Beyond repair. Condition 5 in a 5-step condition rating. The asset has lost just about all of its original value. Most of the damage has been done, so an asset in this stage can maintain a low service level for a relatively long time.

Figure 3: Consumption Chart - Non-Linear Depreciation Asset
Non Linear Depreciation Asset Consumption Chart.jpg

Two variations of this consumption model have been developed by Corowa Shire to replicate real-life asset performance. The "Medium-life Infrastructure" model is most commonly used for medium to long life assets and is a moderate pattern that deviates only slightly from straight line depreciation. For very long life assets the "Long-life Infrastructure" model is used. This pattern is much more extreme and implies that an asset incorporates significant barriers to prevent degradation. Once these barriers have been breached a period of rapid depreciation will ensue for these assets.

Figure 4: Consumption Chart - Degradation Models
Asset Degradation Models.jpg

To calculate the written down value for a given asset, the consumption curve needs to be derived for the relevant model using a known point in the asset's life and the prescribed useful life of the asset. The known points are as follows for asset valued by:

Age
Purchase or construction date and replacement value (100% written down value).
Valuer
Date of valuation and value given (both replacement & fair value) by valuer.
Condition
Date of condition assessment and condition as a written down value percentage. (See tables below)

Once the consumption curve has been determined the required valuation date (end of financial year) can be plugged into the formula as a percentage of the asset's useful life to calculate the written down value.

When age or a valuer is used for an asset's valuation, exact values and dates can be entered into the depreciation models. However, condition assessments usually only provide an index between 1 and 5 or 1 and 10 as an indication of where the asset sits in its life cycle. In order to calculate written down values, condition levels have been translated as a percentage of remaining useful life. These percentages are presented in the following tables.

Initially these tables are confusing as it appears that there are actually 7 and 12 condition categories in the 5 and 10 condition step models respectively. The reasons for this are:

  • Condition 0 only represents a brand new asset and is not used in a condition assessment.
  • The "End of Life" category is never assigned. Any asset that is assessed is assumed to have some value if it is still in service.

Table 1: Five-Step Condition Remaining Useful Life
Condition Medium-life Infrastructure Long-life Infrastructure
0 100% 100%
1 90% 95%
2 70% 60%
3 50% 35%
4 35% 28%
5 20% 15%
End of Life 0% 0%

Table 2: Ten-Step Condition Remaining Useful Life
Condition Medium-life Infrastructure Long-life Infrastructure
0 100% 100%
1 95% 97%
2 88% 92%
3 77% 73%
4 66% 55%
5 55% 42%
6 46% 33%
7 38% 29%
8 30% 23%
9 21% 16%
10 11% 8%
End of Life 0% 0%

These consumption profiles have been confirmed by an independent review with other Councils of similar nature, and industry recommendations from the International Infrastructure Management Manual (2006) [1] . Corowa's consumption models therefore provide a real consumption profile and Council is in a good position to determine defendable remaining life profiles in accordance with IFRS guidelines. It is considered that the above methodology is in accordance with the requirements of current AAS.

Lives of assets and the consumption patterns (models) will be reviewed at least annually in accordance with IFRS.

How do we calculate Condition Ratings for Assets?

Generally speaking it is difficult for an assessor to observe an asset and then be able to assign an overall condition rating of 1 to 5. This is because an overall rating requires a series of judgements to be made and combined together in a consistent manner. It is preferable that the assessor looks at individual aspects of an asset and assigns them literal conditions in a repeatable manner. The final overall condition can then be computed by combining these literal conditions using a uniform algorithm.

The literal condition classifications referred to above vary depending on what is being assessed. In most cases a four-step condition classification has been used, but occasionally a five-step condition classification is used. These two rating systems have been detailed in the tables below along with the rating score that is used when calculating the overall condition.

Table 3: Four-Step Condition Classification
Rating Observed Defects Rating Score
Excellent None 100%
Good Slight 80%
Fair Moderate 20%
Poor Extensive 0%

Table 4: Five-Step Condition Classification
Rating Rating Score
Excellent 100%
Good 80%
Fair 50%
Poor 20%
Very Poor 0%

Corowa Shire employs two distinct techniques for assessing asset condition using these classification systems.

The first involves observing the asset and then listing what percentage of the asset is in each rating step (eg. Excellent, Good, Fair or Poor conditions). Obviously these percentages need to add together to give 100%. These values are multiplied by the rating score, tallied to give a total score and finally converted to condition rating of 1 to 5 (or 1 to 10 depending on the depreciation model used).

For example, say a segment of footpath is classified as 10% Excellent, 50% Good, 30% Fair and 10% Poor Condition in the Four-step Condition Classification system. The overall condition rating calculation is as follows:

Total Score = (% Excellent * Excellent Rating Score) + (% Good * Good Rating Score) + (% Fair * Fair Rating Score) + (% Poor * Poor Rating Score)
Total Score = (10% * 100%) + (50% * 80%) + (30% * 20%) + (10% * 0%)
Total Score = 10% + 40% + 6% + 0%
Total Score = 56%
Overall 5-Step Condition Rating = 5 - Round(Total Score * 5)
Overall 5-Step Condition Rating = 5 - Round(56% * 5)
Overall 5-Step Condition Rating = 5 - Round(2.8)
Overall 5-Step Condition Rating = 5 - 3
Overall 5-Step Condition Rating = 2

The second technique for assessing condition involves individually classifying the condition of physical elements of an asset. These physical elements are each assigned a weight as to how important that element is in determining the overall asset condition. The weighting is multiplied by the rating score for each physical elements and these products are added together to give a total score. Once again the total score is converted to a condition rating of 1 to 5 (or 1 to 10).

As an example the condition of the gravel on an unsealed road is assessed by looking at the road's Subgrade Visibility (55% weight), Shape Loss (35% weight) and Profile (10% weight). If a segment of unsealed road has Slight Subgrade Visibility, Moderate Shape Loss and Excellent Profile then following overall condition rating calculation applies:

Total Score = (Subgrade Visibility Weight * Subgrade Visibility Score) + (Shape Loss Weight * Shape Loss Score) + (Profile Weight * Profile Score)
Total Score = (55% * 80%) + (35% * 20%) + (10% * 100%)
Total Score = 44% + 7% + 10%
Total Score = 61%
Overall 5-Step Condition Rating = 5 - Round(Total Score * 5)
Overall 5-Step Condition Rating = 5 - Round(61% * 5)
Overall 5-Step Condition Rating = 5 - Round(3.05)
Overall 5-Step Condition Rating = 5 - 3
Overall 5-Step Condition Rating = 2

Status of Corowa Asset Data – Currency and Reliability

A program to progressively update Council's Asset Register was commenced in the 2006-07 financial year. Asset categories were updated as follows:

2006-07 and 2011-12
Sewer and Water
2007-08 and 2012-13
Operational Land, Plant & Equipment and Buildings
2008-09 and 2013-14
-
2009-10 and 2014-15
Bridges, Sealed Roads, Unsealed Roads, Footpath, Carparks, Stormwater and Playground Equipment
2010-11 and 2015-16
Community Land

With the completion of this program in June 2011, the currency and reliability of Council's information is very good. In the future this program will be continued in a cyclic manner to ensure the information is maintained to a high standard. Asset categories will be completely reviewed at least every five years, but more frequently as required.

The currency and reliability of Corowa Shire's asset inventory can be summarised in the following table.

Table 5: Confidence Rating
Asset Class Asset Type Inventory Condition Age Performance Overall
Aerodrome Buildings A B B D B
Aerodrome Equipment B C C D C
Aerodrome Land A N/A N/A N/A A
Aerodrome Runways A C C D C
Equipment Balldale Water A C B D B
Equipment Furniture and Fittings B B C D B
Equipment Land Improvement C B C D C
Equipment Office Equipment A A A D A
Equipment Other Equipment C B C D C
Facilities Amenities Blocks A C B D B
Facilities Community Buildings A C B D C
Facilities Community Land A N/A N/A N/A A
Facilities Operational Buildings A C B D C
Facilities Operational Land A N/A N/A N/A A
Facilities Playground Equipment A A B D B
Saleyards Buildings A B B D B
Saleyards Equipment B B B D B
Saleyards Land A N/A N/A N/A A
Sewer Sewer Equipment B B A D B
Sewer Sewer Mains A C B D B
Sewer Sewer Pits A C B D B
Stormwater Kerb and Gutter A A B D B
Stormwater Stormwater Drains B C B D B
Stormwater Stormwater Pits B C B D B
Transport Bridges A A C D C
Transport Carparks B C C D C
Transport Footpaths A A B D B
Transport Rural Sealed Roads A B B D B
Transport Rural Unsealed Roads A B B D B
Transport Urban Sealed Roads A B B D B
Transport Urban Unsealed Roads A B B D B
Water Water Equipment B B A D B
Water Water Mains A C B D B

Table 6: Confidence Definitions
Confidence Grade General Meaning
A Highly Reliable < 2% Uncertainty
Data based on sound records, procedure, investigations and analysis which is properly documented and recognised as the best method of assessment.
B Reliable 2-10% Uncertainty
Data based on sound records, procedures, investigations, and analysis which is properly documented but has minor shortcomings’ for example the data is old, some documentation is missing and reliance is placed on unconfirmed reports or some extrapolation.
C Reasonably Reliable 10 – 25 % Uncertainty
Data based on sound records, procedures, investigations, and analysis which is properly documented but has minor shortcomings’ for example the data is old or incomplete, some documentation is missing and reliance is placed on unconfirmed reports or significant extrapolation.
D Uncertain 25 –50% Uncertainty
Data based on uncertain records, procedures, investigations and analysis which is incomplete or unsupported, or extrapolation from a limited sample for which grade A or B data is available.
E Very Uncertain > 50% Uncertainty
Data based on unconfirmed verbal reports and/or cursory inspection and analysis.

Note that uncertainty is cumulative. Therefore the uncertainty limits in financial forecasts will be the sum of the inaccuracies of the data and quality of assumptions that is used to produce it.

Valuation Methodology by Asset Category

Bridges

Methodology

Bridge assets are valued using condition-based methodology.

Last Revaluation Date

2014/15 Financial Year

Categories

Bridge assets have been categorised as follows:

Table 7: Bridge Categories
Category Definition
Bridge >=6m length
Culvert <6m length

These categories do not relate to unit rates or useful life and are only recorded for reporting purposes.

Components

Bridge assets are not componentised. All components that make up a bridge including; culvert, substructure, abutment, deck, approach, and rail are grouped together as one.

While it would be better if bridges were componentised, the major elements that make up a bridge (earthworks, concrete, steel) have very long useful lives, so the variation in depreciation and useful lives would be minimal.

Condition

The condition of a bridge is assessed using a number of criteria. These criteria are weighted to give a total condition rating as follows:

Table 8: Bridge Condition Ratings
Condition Criteria Total Condition Weight (%)
Concrete degradation 15
Concrete cracking 15
Culvert separation 15
Structural condition 35
Abutment condition 15
Rail condition 4
Approach rail condition 1

For further details of bridge condition assessments refer to the Council's Bridge Condition Assessment Manual.

Depreciation Method

Long-life Infrastructure.

Unit Rates

Although there are many variables that can affect the cost of building a bridge, the dominant factor is considered to be bridge height.

Two bridges have been constructed in Corowa Shire in recent times, Hume Bridge on Hopefield Road and the bridge at Daysdale Curves on Federation Way. The actual costs for these two jobs and their respective heights has been used as a benchmark to determine unit rates for all other bridges.

Although the relationship between height and cost is most likely exponential, with the lack of data to evaluate the actual relationship, a linear relationship has been assumed. The points in the table below represent the height and replacement unit cost of the Hume and Daydale bridges.

Table 9: Bridge Unit Rates
Description Unit Rate ($/sqm)
Bridge height 0.3m 1,200
Bridge height 1.5m 2,000

Useful Life

100 years.

Assumptions

  • Bridge components generally degrade at a similar rate and have comparable useful lives.
  • Replacement cost for bridges is directly related to their height.

Notes

  • Construction of new bridges and repair of existing bridges occurs relatively infrequently, so collecting benchmark information on unit rates, useful life and degradation is difficult.
  • Where applicable actual costs for asset acquisition or work done are used to determine unit rates. When this information is not available local engineering knowledge and benchmark data contained in the International Infrastructure Management Manual (2006)[1] has been applied.
  • Local engineering knowledge and benchmark data contained in the International Infrastructure Management Manual (2006)[1] has been used to assign asset's useful lives and depreciation models.

Improvement Plan

  • Componentise bridges to enable more accurate reporting of depreciation, useful lives and unit rates.
  • Collect more actual costs to benchmark unit rates more accurately.

Buildings

Methodology

Building assets are valued using valuer-based methodology.

AssetVal Pty Ltd were contracted to perform an insurance and added value assessment of all of Corowa Shire's buildings in June 2013. This valuer's report has been used as the basis for replacement costs and the ongoing calculation of depreciation.

Last Revaluation Date

2012/13 Financial Year

Categories

Building assets have been categorised as follows:

Table 10: Building Categories
Category Definition
Specialised Structure has a unique purpose that it was built for.
Non-specialised Structure can be re-purposed for another use.

These categories do not relate to unit rates or useful life and are only recorded for reporting purposes.

Components

As suggested by AssetVal building assets have only been broken down into lower level components when the replacement cost exceeded $1,000,000. In all other cases a single "Total" asset component is used.

Table 11: Building Components
Component Definition
Structure Structure includes both the substructure and the superstructure. The substructure is the structurally sound and watertight base upon which to build including all work up to the lowest floor finish. The superstructure includes columns, stairs, external walls, windows, external doors, internal walls, internal screens and internal doors built upon the before mentioned base.
Floor Coverings Provides a satisfactory finish to upper floors and substructure for walking on, including all preparatory work and finishing; skirtings; screeds; timber floor finishes; dividing strips; mats and matwells; duct and pit covers; carpeting used as a permanent floor finish; timber and other finishes to concrete floors.
Internal Finishes Comprises of wall and ceiling finishes. Wall finishes consist of the decorating of interior faces of columns and walls. Ceiling finishes provide for the finish and decoration of all internal undersides of upper floors including suspended false ceilings.
Roof To provide a structurally sound and watertight covering over the building.
Services – Mechanical Comprises air conditioning, evaporative cooling, mechanical ventilation, reticulated steam and hot water systems.
Services - Electrical To provide all light and power and emergency light and power. Included are systems such as telephone, public address and closed circuit TV.
Services - Fire/Security To detect and or extinguish fires including sprinklers and other automatic extinguishing systems; fire indicator board; manual and automatic fire alarm installations; fire fighting equipment; hydrant installations and hose reels.
Services – Transport To transport personnel and or goods from floor to floor or area to area including all lifts, hoists and conveyor systems, escalators and associated equipment other than structural building work.

Condition

Condition of building assets is not assessed by Council.

Depreciation Method

Medium-life Infrastructure.

Unit Rates

As determined by AssetVal Pty Ltd.

Useful Life

While AssetVal provided useful lives as a part of their building assessment, Corowa Shire has chosen to use these only as a guide for our depreciation calculations. In the initial draft valuation provided by AssetVal the useful lives specified were on the whole significantly less than what had been used in the past and what we had experienced on the ground. After extensive consultation many of these values were revised up, however in many instances they still fell short of what was expected and as a result have not been used.

The main reasons for Council's objection to these values are as follows:

  • AssetVal cited functional and economic obsolescence as a significant factor in the reduced useful lives. While it would be ideal to replace our building assets when physical and/or economic obsolescence was reached, in many cases with the restricted funding available to Council this simply is not possible. Unless there is significant drive within the community to replace an asset that has reached obsolescence, factors such as public safety and physical deterioration are much more likely to result in the renewal of an asset.
  • As long as an asset is in service it still has value.
  • The useful lives used should reflect the real world situation. If an asset is assigned a useful life that is too low, Council will be forced to double-account for some depreciation when the asset remains in service and the useful life is extended on the next valuation.
  • Some of the useful lives originally specified were less than the asset's actual life.

Table 12: Building Useful Lives
Component Useful Life (years)
Historical building or monument designed for long life with quality construction. 100
Brick and concrete buildings. 80
Steel sheds. Amenity blocks. Quality timber construction. Roofs. 60
Steel and brick BBQ shelters. Pre-fabricated bus shelters. 50
Timber BBQ shelter. Basic steel shelters. 40
Boat ramps, concrete sporting courts. Internal finishes. 30
Mechanical, electrical, fire & security services. 25
Synthetic sporting fields or courts. Floor covering. 20
Shade sails. 15

Notes

  • In the future, actual costs may be used for the components of new buildings.
  • Local engineering knowledge and benchmark data contained in the International Infrastructure Management Manual (2006)[1] has been used to assign asset's useful lives and depreciation models.

Improvement Plan

  • Implement condition-based valuation either by undertaking internal assessments, or in collaboration with valuers.
  • Investigate expanding and improving components used to split building assets.

Carparks

Methodology

Carpark assets are valued using condition-based methodology.

Last Revaluation Date

2014/15 Financial Year

Categories

Carpark assets have not been categorised.

Components

Table 13: Carpark Components
Component Definition
Surface (Final Seal) Wearing surface that seals the pavement from the elements, particularly moisture. Also provides a smooth, durable and dust free all weather layer to drive on.
Primer Seal Initial wearing course applied to pavement on construction. Should be covered with a final seal within a year of application.
Pavement Road base that gives the road it's strength.
Formation Earthworks that establish the road's profile and drainage.

Condition

The condition of a carpark's surface is assessed using a number of criteria. These criteria are weighted to give a total condition rating as follows:

Table 14: Carpark Surface Condition Ratings
Condition Criteria Total Condition Weight (%)
Cellular cracking 30
Linear cracking 30
Surface texture 10
Potholes 30

The condition of a carpark's pavement is assessed using a number of criteria. These criteria are weighted to give a total condition rating as follows:

Table 15: Carpark Pavement Condition Ratings
Condition Criteria Total Condition Weight (%)
Cellular cracking 20
Linear cracking 10
Shape loss 50
Potholes 20

Carpark condition assessments are done using the same criteria as sealed roads. For further details of carpark condition assessments refer to the Council's Sealed Road Condition Assessment Manual.

Depreciation Method

Table 16: Carpark Depreciation Methods
Component Depreciation Method
Surface Medium-life Infrastructure
Primer Seal Long-life Infrastructure
Pavement Long-life Infrastructure
Formation No depreciation

Unit Rates

Table 17: Carpark Unit Rates
Component Unit Rate ($/sqm)
Surface (all chip seals) 4.00
Surface (asphalt) 18.00
Surface (slurry) 8.00
Primer Seal 4.00
Pavement 18.00
Formation 6.00

Useful Life

Table 18: Carpark Useful Lives
Component Useful Life (years)
Surface (excl asphalt) 20
Surface (asphalt) 30
Primer Seal 80
Pavement 80
Formation n/a

Notes

  • As part of the 2014-15 revaluation a number of changes were made to the revaluation methodology. These include:
    • Unit rate calculations have been simplified. Recent fluctuation in the Australian dollar and oil prices have shown how market forces can have a significant impact on the replacement costs of some asset classes. As a result spending too much time and energy calculating exact rates is unlikely to improve the accuracy of information.
    • All chip seal rates have been consolidated to the price for using 10mm stone - while different size stone does cost more or less, the stone used rotates on any given road, so it is best to use the average.
    • The condition calculation for pavement has been altered to reflect that shape loss is the main driver for replacement. Linear cracking has also been added as it can have a slight influence.
    • The condition calculation for surface has been altered to reflect that surface texture (ie. too much or too little bitumen) while not great for safety, generally is not a major driver for replacement. Cellular cracking and linear cracking have been given greater weighting in the calculation.
  • As of the 2012-13 financial year a primer seal component was added to all sealed car park assets. This component was given the same useful life and depreciation profile as the pavement component to reflect its role as a part of the construction process. Prior to this car park surfaces were reported as a single component at $8.00/m2, which caused problems when the final seal was applied only one year after the primer seal was applied (resulting in the primer seal being erroneously written off). Now when a car park is reconstructed the surface asset component is disposed of and only replaced when the final seal is applied.
  • Where applicable actual costs for asset acquisition or work done are used to determine unit rates. When this information is not available local engineering knowledge and benchmark data contained in the International Infrastructure Management Manual (2006)[1] has been applied.
  • Local engineering knowledge and benchmark data contained in the International Infrastructure Management Manual (2006)[1] has been used to assign asset's useful lives and depreciation models.

Improvement Plan

  • Investigate pavement depth as a criteria for establishing more accurate unit rates.
  • This asset class needs a stocktake as information collected is still not comprehensive.

Equipment & Plant

Methodology

Equipment and plant assets are valued using age-based methodology.

Last Revaluation Date

2012/13 Financial Year

Categories

Equipment and plant assets have been categorised as follows:

Table 19: Equipment and Plant Categories
Category Definition
Office equipment Any equipment used to perform office duties, e.g. computers, printers, desks, office chairs.
Furniture & fittings Self explanatory.
Land improvements Most often takes the form of landscaping, e.g. sprinkler systems, power supply, lighting.
Other equipment Any equipment that does not fit in one of the other three categories.

These categories do not relate to unit rates or useful life and are only recorded for reporting purposes.

Components

Equipment and plant assets are not componentised.

Condition

Condition of equipment and plant assets is not assessed by Council.

Depreciation Method

Straight-line depreciation.

Unit Rates

Unit rates are applied on an individual basis, due to the varying types and capacities of the equipment. In most instances the initial purchase price has been used as the unit rate for equipment and plant items. In the future items with a longer lifespan may need to be revalued to reflect current costs.

Useful Life

The useful life for equipment and plant items has been determined on a case-by-case basis. Suggested values in the Local Government Asset Accounting Manual (1993) [1] and local knowledge have been applied to determine effective useful lives. Some indicative values have been included in the table below:

Table 20: Equipment and Plant Useful Lives
Component Useful Life (years)
Personal IT hardware 3
IT network hardware & software 5
Network cabling 10
Basic furniture & fittings 10
Quality furniture & fittings 20
Antique & metal furniture & fittings 80
Plumbing & irrigation 20
Fencing 60
Basic hardware tools 5
Quality hardware tools 10
Outdoor furniture & equipment 10
Landscaping & power supply 90

Notes

  • Motorised plant has been excluded because it was already accounted for in the Fujitsu system, and the methods of calculating depreciation and value are different to un-motorised plant.
  • Generally plant and equipment assets with replacement values of less than $1,000 will be expensed. Although personal computers can be purchased for less than $1,000, these assets will be recorded mainly as a means of keeping stock. Items that are purchased in bulk lots (e.g. chairs and tables) will also be included in the asset register. Although these objects do not have a significant individual value, as a bulk lot the value does become substantial.
  • Condition-based depreciation was not used for equipment and plant for a number of reasons:
  • Equipment and plant items (particularly office equipment and furniture and fittings) tend to have relatively short useful lives, and relatively inexpensive replacement costs. In these cases, the difference in depreciation between the two methods is negligible.
  • Land improvements tend to have very long useful lives, but it is difficult to consistently measure condition, e.g. an electricity supply or some landscaping.
  • With such a large variety of items that can be included in this category, it would make it very difficult to manage a condition rating system to include all of the different types of items.
  • Where applicable actual costs for asset acquisition or work done are used to determine unit rates. When this information is not available local engineering knowledge and benchmark data contained in the International Infrastructure Management Manual (2006)[1] has been applied.
  • Local engineering knowledge and benchmark data contained in the International Infrastructure Management Manual (2006)[1] has been used to assign asset's useful lives and depreciation models.

Improvement Plan

  • Collect more comprehensive data on Council's fencing.

Footpaths

Methodology

Footpath assets are valued using condition-based methodology.

Last Revaluation Date

2014/15 Financial Year

Categories

Footpath assets have been categorised as follows:

Table 21: Footpath Categories
Category Definition
Footpath Regular footpath.
Bikepath Footpath that also acts as a bicycle track.
Walkway Thoroughfare usually in shopping strips.

These categories do not relate to unit rates or useful life and are only recorded for reporting purposes.

Components

Footpath assets are not componentised.

Condition

Footpath condition is determined using a five-step rating system. The percentage of an asset that is in each of the four rating categories is assessed and this is combined into an overall score.

For further details of footpath condition assessments refer to the Council's Footpath Condition Assessment Manual.

Depreciation Method

Long-life Infrastructure.

Unit Rates

Table 22: Footpath Unit Rates
Construction Material Unit Rate ($/sqm)
Asphalt 50
Insitu Concrete 80
Brick Pavers 100
Gravel 35
Bitumen 50

Useful Life

Table 23: Footpath Useful Lives
Construction Material Useful Life (years)
Asphalt 25
Insitu Concrete 50
Brick Pavers 35
Gravel 35
Bitumen 25

Notes

  • Useful lives and unit rates were both reviewed in the most recent revaluation. Due to the fact that the calculated costs of new assets were still reasonably close to actual costs, and without any better information, the existing values were retained.
  • Where applicable actual costs for asset acquisition or work done are used to determine unit rates. When this information is not available local engineering knowledge and benchmark data contained in the International Infrastructure Management Manual (2006)[1] has been applied.
  • Local engineering knowledge and benchmark data contained in the International Infrastructure Management Manual (2006)[1] has been used to assign asset's useful lives and depreciation models.

Improvement Plan

  • The number of metres of unsatisfactory asset may be collected in the next condition assessment (as with kerb and gutter). Going forward this information could be incorporated into the condition rating and also the development of renewal programs.

Kerb & Gutter

Methodology

Kerb & gutter assets are valued using condition-based methodology.

Last Revaluation Date

2014/15 Financial Year

Categories

Kerb & gutter assets have been categorised as follows:

Table 24: Kerb & Gutter Categories
Category Definition
Kerb & gutter Concrete kerbing that is used to channel water from road sides.
Traffic island Structure used to separate traffic lanes in a road.
Roundabout Self explanatory.

Components

Kerb & gutter assets are not componentised.

Condition

Kerb & gutter condition is determined using a four-step rating system. The percentage of an asset that is in each of the four rating categories is assessed and this is combined into an overall score.

For further details of kerb & gutter condition assessments refer to the Council's Kerb & Gutter Condition Assessment Manual.

Depreciation Method

Long-life Infrastructure.

Unit Rates

Table 25: Kerb & Gutter Unit Rates
Category Unit Rate
Kerb & gutter $140/m
Traffic island $250/sqm
Roundabout $300/sqm

Useful Life

80 years.

Assumptions

  • Cost of traffic islands and roundabouts is uniform across the area of the structure.

Notes

  • Useful lives and unit rates were both reviewed in the most recent revaluation. Due to the fact that the calculated costs of new assets were still reasonably close to actual costs, and without any better information, the existing values were retained.
  • Where applicable actual costs for asset acquisition or work done are used to determine unit rates. When this information is not available local engineering knowledge and benchmark data contained in the International Infrastructure Management Manual (2006)[1] has been applied.
  • Local engineering knowledge and benchmark data contained in the International Infrastructure Management Manual (2006)[1] has been used to assign asset's useful lives and depreciation models.

Improvement Plan

  • The number of metres of unsatisfactory asset was collected in the last condition assessment. Going forward this information may be incorporated into the condition rating and also the development of renewal programs.

Land

Methodology

Land assets are valued using valuer-based methodology.

Where possible the land value assigned by the Office of the NSW Valuer General has been used. When a value is not available from the Valuer General either actual purchase price, or a unit rate calculated from similar nearby property is used.

Last Revaluation Date

2012/13 Financial Year for Operational Land
2015/16 Financial Year for Community Land

Categories

Land assets have been categorised as follows:

Table 26: Land Categories
Category Definition
Community Land that exists primarily for the community's use and maintained by Council. This land cannot be sold by Council.
Operational Land owned to contain Council's operational infrastructure, e.g. Council offices, water treatment plant, sewer pump stations, drainage land.

These categories do not relate to unit rates or useful life and are only recorded for reporting purposes.

Components

Land assets are not componentised.

Condition

Not applicable.

Depreciation Method

No depreciation.

Unit Rates

As determined by the Office of the NSW Valuer General.

Useful Life

Not applicable.

Notes

  • Fair value replacement cost for land is totally driven by current market forces. As such only a qualified land valuer can provide an accurate assessment of the land's value.
  • The value of land will be maintained between valuations.

Playground Equipment

Methodology

Playground equipment assets are valued using condition-based methodology.

Last Revaluation Date

2014/15 Financial Year

Categories

Playground equipment assets have been categorised as follows:

Table 27: Playground Equipment Categories
Category Definition
Modular Large piece of equipment with multiple parts connected together.
Slide Self explanatory.
Swing Self explanatory.
Carousel Self explanatory.
Climbing frame Self explanatory.
Rocker See-saw or rocking piece with large spring.
Other Other piece of playground equipment not included in the categories above.

Components

Playground equipment assets are not componentised.

Condition

The condition of playground equipment is assessed using a number of criteria. These criteria are weighted to give a total condition rating as follows:

Table 28: Playground Equipment Condition Ratings
Condition Criteria Total Condition Weight (%)
Structural condition 65
Surface damage 30
Softfall condition 5

For further details of playground equipment condition assessments refer to the Council's Playground Equipment Condition Assessment Manual.

Depreciation Method

Medium-life Infrastructure.

Unit Rates

The unit rates for playground equipment have been determined on a case-by-case basis. With a great assortment of equipment pieces available, it is difficult to establish costs. Some indicative values have been included in the table below:

Table 29: Playground Equipment Unit Rates
Component Unit Rate ($)
Large modular 40,000
Medium modular 30,000
Small modular 20,000
Climbing frame 10,000
Swing 5,000
Slide 5,000
Rocker 2,000
Carousel 5,000

Useful Life

15 years.


Notes

  • As a part of the most recent revaluation, the condition calculation was altered slightly to reflect that softfall has a very limited relationship to the equipment's overall condition.
  • Where applicable actual costs for asset acquisition or work done are used to determine unit rates. When this information is not available local engineering knowledge and benchmark data contained in the International Infrastructure Management Manual (2006)[1] has been applied.
  • Local engineering knowledge and benchmark data contained in the International Infrastructure Management Manual (2006)[1] has been used to assign asset's useful lives and depreciation models.

Improvement Plan

  • Collect more actual costs to benchmark unit rates more accurately.

Sealed Roads

Methodology

Sealed road assets are valued using condition-based methodology.

Last Revaluation Date

2014/15 Financial Year

Categories

Sealed road assets have been categorised in a number of different ways including; hierarchy, purpose, usage, vehicle counts and region. The tables below provide a summary (incomplete) of these classifications.

Table 30: Sealed Road Hierarchy
Hierarchy Definition
Class 1 State roads and highways.
Class U2 Urban - regional and collector roads.
Class U3 Urban - access roads.
Class R2 Rural - regional and link roads.
Class R3 Rural - collector roads.
Class R4 Rural - primary access with bus routes.
Class R5 Rural - primary access.
Class R6 Rural - secondary access.

Table 31: Sealed Road Purpose
Purpose Definition
State highway/road Roads that are control by the RTA.
Regional road Roads classified as "Regional" by the State Government.
Link road Roads that link town and village centres.
Collector road Roads that collect primary access roads to link roads.
Primary access Roads servicing inhabited dwellings.
Secondary access Roads servicing farming properties (non-inhabited).

Table 32: Sealed Road Usage (not mutually exclusive)
Usage Definition
Bus route Self explanatory.
Agricultural Is used by agricultural traffic (classified into high, medium & low traffic levels).
Heavy vehicle route Self explanatory.

Table 33: Sealed Road Region
Region Definition
Urban Roads inside urban centres that are usually defined by the start of the 100km/h zones.
Rural Roads outside urban centres that are usually defined by the start of the 100km/h zones.

These categories do not relate to unit rates or useful life and are only recorded for reporting purposes.

Components

Table 34: Sealed Road Components
Component Definition
Surface (Final Seal) Wearing surface that seals the pavement from the elements, particularly moisture. Also provides a smooth, durable and dust free all weather layer to drive on.
Primer Seal Initial wearing course applied to pavement on construction. Should be covered with a final seal within a year of application.
Pavement Road base that gives the road it's strength.
Formation Earthworks that establish the road's profile and drainage.
Land under roads Land under road formation.

Condition

The condition of a sealed road's surface is assessed using a number of criteria. These criteria are weighted to give a total condition rating as follows:

Table 35: Sealed Road Surface Condition Ratings
Condition Criteria Total Condition Weight (%)
Cellular cracking 30
Linear cracking 30
Surface texture 10
Potholes 30

The condition of a sealed road's pavement is assessed using a number of criteria. These criteria are weighted to give a total condition rating as follows:

Table 36: Sealed Road Pavement Condition Ratings
Condition Criteria Total Condition Weight (%)
Cellular cracking 20
Linear cracking 10
Shape loss 50
Potholes 20

For further details of sealed road condition assessments refer to the Council's Sealed Road Condition Assessment Manual.

Depreciation Method

Table 37: Sealed Road Depreciation Methods
Component Depreciation Method
Surface Medium-life Infrastructure
Primer Seal Long-life Infrastructure
Pavement Long-life Infrastructure
Formation No depreciation
Land under roads No depreciation

Unit Rates

Table 38: Sealed Road Unit Rates
Component Unit Rate ($/sqm)
Surface (all chip seals) 4.00
Surface (asphalt) 18.00
Surface (slurry & Ecoflex) 8.00
Primer Seal 4.00
Pavement 18.00
Formation 6.00
Land under roads 2.00

Useful Life

Table 39: Sealed Road Useful Lives
Component Useful Life (years)
Surface (excl asphalt) 20
Surface (asphalt) 30
Primer Seal 80
Pavement 80
Formation n/a
Land under roads n/a

Notes

  • As part of the 2014-15 revaluation a number of changes were made to the revaluation methodology. These include:
    • Unit rate calculations have been simplified. Recent fluctuation in the Australian dollar and oil prices have shown how market forces can have a significant impact on the replacement costs of some asset classes. As a result spending too much time and energy calculating exact rates is unlikely to improve the accuracy of information.
    • All chip seal rates have been consolidated to the price for using 10mm stone - while different size stone does cost more or less, the stone used rotates on any given road, so it is best to use the average.
    • The condition calculation for pavement has been altered to reflect that shape loss is the main driver for replacement. Linear cracking has also been added as it can have a slight influence.
    • The condition calculation for surface has been altered to reflect that surface texture (ie. too much or too little bitumen) while not great for safety, generally is not a major driver for replacement. Cellular cracking and linear cracking have been given greater weighting in the calculation.
  • As of the 2012-13 financial year a primer seal component was added to all sealed road assets. This component was given the same useful life and depreciation profile as the pavement component to reflect its role as a part of the construction process. As an interim measure, in the two years prior, primer seals had been applied to road reconstructions, however the methodology had not been formalised and the useful life given to these seals was too short and the surface wasn't disposed of correctly. Prior to this road surfaces were reported as a single component at $8.00/m2, which caused problems when the final seal was applied to a road segment only one year after the primer seal was applied (resulting in the primer seal being erroneously written off). Now when a road is reconstructed the surface asset component is disposed of and only replaced when the final seal is applied.
  • Council has chosen to only value land under roads for new sealed road assets. Existing sealed roads will not have this component added.
  • Where applicable actual costs for asset acquisition or work done are used to determine unit rates. When this information is not available local engineering knowledge and benchmark data contained in the International Infrastructure Management Manual (2006)[1] has been applied.
  • Local engineering knowledge and benchmark data contained in the International Infrastructure Management Manual (2006)[1] has been used to assign asset's useful lives and depreciation models.

Improvement Plan

  • Traffic counts and usage could also be used as factors in determining useful lives.
  • Investigate pavement depth as a criteria for establishing more accurate unit rates.

Sewer Mains

Methodology

Sewer mains assets are valued using age-based methodology.

Last Revaluation Date

2011/12 Financial Year

Categories

Sewer mains assets have been categorised as follows:

Table 40: Sewer Mains Categories
Category Definition
Gravity mains Pipes that use gravity to transport sewerage.
Rising (pressure) mains Pipes that are attached to a pump station and transport sewerage uphill.

Components

Sewer mains assets are not componentised.

Condition

Condition of sewer mains assets is not assessed by Council.

Depreciation Method

Long-life Infrastructure.

Unit Rates

The unit rates for sewer mains are adjusted annually using the Australian Bureau of Statistics's (ABS) Consumer Price Index [2]. The initial unit rates set in June 2008 were:

Table 41: Sewer Mains Unit Rates
Unit Rate ($/m)
Pipe Diameter Mains Depth
0-1m 1-2m 2-3m 3-4m 4-5m 5-6m 6-7m
Rising main 60
100mm 100 100 110 140 170 200 260
150mm 100 100 110 140 170 200 260
225mm 120 120 130 160 190 220 280
300mm 140 140 150 180 210 240 300
375mm 200 170 170 180 210 240 270
450mm 200 200 210 240 270 300 360

The index applied to these rates is 1.1919, so the unit rates as of May 2016 are:

Table 42: CPI Adjusted Sewer Mains Unit Rates
Unit Rate ($/m)
Pipe Diameter Mains Depth
0-1m 1-2m 2-3m 3-4m 4-5m 5-6m 6-7m
Rising main 71.52
100mm 119.19 119.19 131.11 166.87 202.63 238.39 309.9
150mm 119.19 119.19 131.11 166.87 202.63 238.39 309.9
225mm 143.03 143.03 154.95 190.71 226.47 262.22 333.74
300mm 166.87 166.87 178.79 214.55 250.31 286.06 357.58
375mm 238.39 202.63 202.63 214.55 250.31 286.06 321.82
450mm 238.39 238.39 250.31 286.06 321.82 357.58 429.09

Useful Life

Table 43: Sewer Mains Useful Lives
Material Useful Life
UPVC (Unplasticised Polyvinyl Chloride) 70
VC (Vitrified Clay) 90
RCP (Reinforced Concrete Pipe) 90
AC (Asbestos Cement) 45
DI (Ductile Iron) 50
CI (Cast Iron) 50
HDPE (High Density Polyethylene) 70

Notes

  • Where applicable actual costs for asset acquisition or work done are used to determine unit rates. When this information is not available local engineering knowledge and benchmark data contained in the NSW Reference Rates Manual (2011)[3] has been applied.
  • Local engineering knowledge and benchmark data contained in the NSW Reference Rates Manual (2011)[3] has been used to assign asset's useful lives and depreciation models.
  • Prior to the 2012 revaluation useful life was set at 60 years regardless of material. Since this revaluation, material has been taken into account as is specified in the NSW Reference Rates Manual (2011)[3]. The useful lives used for RCP, VC, DI and CI pipes is slightly longer than those specified in the Manual as this reflects the local experience.

Sewer Manholes

Methodology

Sewer manhole assets are valued using age-based methodology.

Last Revaluation Date

2011/12 Financial Year

Categories

Sewer manhole assets have been categorised as follows:

Table 44: Sewer Manhole Categories
Category Definition
Manhole Manhole for conventional sewer pit.
Pump station well Well housing sewer pump.

Components

Sewer manhole assets are not componentised.

Condition

Condition of sewer manhole assets is not assessed by Council.

Depreciation Method

Long-life Infrastructure.

Unit Rates

The unit rates for sewer manholes are adjusted annually using the Australian Bureau of Statistics's (ABS) Consumer Price Index[2]. The initial unit rates set in June 2008 were:

Table 45: Sewer Manhole Unit Rates
Unit Rate based on Depth ($/m)
Manhole Type Manhole Depth
0-1m 1-2m 2-3m 3-4m 4-5m 5-6m 6-7m 7-8m 8-9m
Manhole 1,800 1,800 2,100 2,400 2,800 3,400 4,200 n/a n/a
Pump Station Well 10,000 10,000 18,000 22,000 26,000 28,000 30,000 32,000 40,000

The index applied to these rates is 1.1919, so the unit rates as of May 2016 are:

Table 46: CPI Adjusted Sewer Manhole Unit Rates
Unit Rate ($/m)
Manhole Type Manhole Depth
0-1m 1-2m 2-3m 3-4m 4-5m 5-6m 6-7m 7-8m 8-9m
Manhole 2145.47 2145.47 2503.05 2860.63 3337.4 4052.56 5006.11 n/a n/a
Pump Station Well 11919.3 11919.3 21454.74 26222.46 30990.19 33374.05 35757.91 38141.77 47677.21

Useful Life

70 years

Notes

  • Where applicable actual costs for asset acquisition or work done are used to determine unit rates. When this information is not available local engineering knowledge and benchmark data contained in the NSW Reference Rates Manual (2011)[3] has been applied.
  • Local engineering knowledge and benchmark data contained in the NSW Reference Rates Manual (2011)[3] has been used to assign asset's useful lives and depreciation models.
  • Prior to 2012 revaluation useful life was set at 60 years, this has been adjusted to 70 years to reflect the value specified in the NSW Reference Rates Manual (2011)[3].

Sewer Equipment

Methodology

Sewer equipment assets are valued using age-based methodology.

Last Revaluation Date

2011/12 Financial Year

Categories

Sewer equipment assets have been categorised as follows:

Table 47: Sewer Equipment Pump Station Categories
Category Definition
IT Information technology used for the management of the Sewer Treatment Works.
Mechanical/Electrical Pumps, telemetry systems, switchboards, etc.
Odour Control Equipment used to control odour.
Safety Equipment Safety harnesses and Safe-T-Nets.
Structural Buildings, dams, tanks, metalwork, valves and associated pipe works.
Tree Lot Trees used to absorb processed sewage.

Components

Sewer equipment assets are not componentised.

Condition

Condition of sewer equipment assets is not assessed by Council.

Depreciation Method

Straight-line depreciation.

Unit Rates

Unit rates are applied on an individual basis, due to the varying types and capacities of the equipment. In most instances the initial purchase price has been used as the unit rate for equipment and plant items. In the future items with a longer lifespan may need to be revalued to reflect current costs.

Useful Life

Table 48: Sewer Equipment Useful Lives
Component Useful Life (years)
IT 5
Mechanical/Electrical 25
Odour Control 20
Safety Equipment 10
Structural 60
Tree Lot 30

Notes

  • Where applicable actual costs for asset acquisition or work done are used to determine unit rates. When this information is not available local engineering knowledge and benchmark data contained in the NSW Reference Rates Manual (2011)[3] has been applied.
  • Local engineering knowledge and benchmark data contained in the NSW Reference Rates Manual (2011)[3] has been used to assign asset's useful lives and depreciation models.
  • For the 2012 revaluation the replacement value of all equipment was reassessed by Council's Water & Sewerage Engineer. As a result some assets were added, some were deleted and many were revalued to more accurately reflect current costs.

Improvement Plan

  • The useful lives of this asset class needs to be reviewed. With the large variety of assets in this class, more categories need to be added to enable more flexibility in assigning useful life.

Stormwater Drains

Methodology

In the past stormwater drain assets were all valued using age-based methodology. As a part of the most recent revaluation a large number of culverts were identified and added to the asset register. It would be impractical to attempt to estimate the age of all of these culverts, and unlike underground stormwater pipes which are usually much longer, it is relatively simple to determine the condition of a culvert. As a result all of the new culverts were given a condition and valued accordingly.

Last Revaluation Date

2014/15 Financial Year

Categories

Stormwater drains assets have been categorised as follows:

Table 49: Stormwater Drains Categories
Category Definition
Mains Pipes that use gravity to transport stormwater.
Culverts Culverts that use gravity to transport stormwater.
Rising Mains Pipes that are attached to a pump station and transport stormwater uphill.

Components

Stormwater drains assets are not componentised.

Condition

For the stormwater assets that were assessed for condition (culverts) a simple five-step rating system was applied to the asset as a whole.

For further details of stormwater drain condition assessments refer to the Council's Stormwater Drains Condition Assessment Manual.

Depreciation Method

Long-life Infrastructure.

Unit Rates

Table 50: Stormwater Drains Unit Rates
Component Unit Rate ($/m)
Mains – 100mm (UPVC) 105.86
Mains – 150mm (UPVC) 138.02
Mains – 225mm (UPVC) 192.29
Mains – 300mm (RCP) 250.58
Mains – 375mm (RCP) 337.68
Mains – 450mm (RCP) 432.82
Mains – 525mm (RCP) 515.90
Mains – 600mm (RCP) 589.60
Mains – 750mm (RCP) 763.80
Mains – 900mm (RCP) 1,054.58
Mains – 1200mm (RCP) 1,594.60
Box culverts – 375mm x 225mm 247.90
Box culverts – 600mm x 450mm 428.80
Box culverts – 750mm x 600mm 696.80
Box culverts – 1200mm x 900mm 1,192.60
Box culverts – 1200mm x 1200mm 1,474.00

Useful Life

Table 51: Stormwater Drains Useful Lives
Component Useful Life (years)
Mains 100
Culverts 80

Notes

  • Over 1000 culverts under roads were identified and assessed in the 2014-15 revaluation, primarily under rural roads.
  • Useful lives and unit rates were both reviewed in the most recent revaluation. Due to the fact that the calculated costs of new assets were still reasonably close to actual costs, and without any better information, the existing values were mostly retained. The useful life for stormwater mains was meant to be increased from 100 to 120 years, however this has not been applied consistently across the data set. This will be rectified in the coming valuation.
  • Where applicable actual costs for asset acquisition or work done are used to determine unit rates. When this information is not available local engineering knowledge and benchmark data contained in the NSW Reference Rates Manual (2011)[3] has been applied.
  • Local engineering knowledge and benchmark data contained in the NSW Reference Rates Manual (2011)[3] has been used to assign asset's useful lives and depreciation models.
  • Due to limited information being available for the stormwater assets in Howlong many of the mains have been assigned a default diameter of 100mm. With capital works being undertaken in Howlong, the true diameters of these pipes are gradually being determined in the field. In some cases these pipes are significantly larger which results in a noticeable increase in the valuation of the Shire's stormwater drains.

Improvement Plan

  • Review useful life information. Currently inconsistent.
  • This asset class needs a stocktake as initial information collected wasn't comprehensive especially in Howlong.

Stormwater Pits

Methodology

Stormwater pit assets are valued using age-based methodology.

Last Revaluation Date

2014/15 Financial Year

Categories

Stormwater pit assets have been categorised as follows:

Table 52: Stormwater Pit Categories
Category Definition
Headwall Entrance or exit point for a stormwater mains or culvert.
Junction pit Pit that joins stormwater mains together.
Pump station Stormwater pump station.
Side entry pit Pit where water enters from the side, often used in combination with kerb & gutter.
Surface inlet pit Pit where water enters from above.

Components

Stormwater pit assets are not componentised.

Condition

Condition of stormwater pit assets is not assessed by Council.

Depreciation Method

Long-life Infrastructure.

Unit Rates

Table 53: Stormwater Pit Unit Rates
Component Unit Rate ($/m)
Junction pit – 600mm x 600mm (ungrated) 1,340
Junction pit – 600mm x 600mm (grated) 1,943
Junction pit – 900mm x 900mm (ungrated) 1,675
Junction pit – 900mm x 900mm (grated) 2,278
Side entry pit – 900mm x 600mm 1,675
Side entry pit – 1800mm x 600mm 2,412
Surface inlet pit 1,675
Headwall – 450mm 469
Headwall – 600mm 643
Headwall – 750mm 938
Headwall – 900mm 1,099
Headwall – 1050mm 2,211
Headwall – 1200mm 2,546
Headwall – 1350mm 2,948
Headwall – 1500mm 3,390
Headwall – 1650mm 4,087
Headwall – 1800mm 4,422
Pump stations 50,000

Useful Life

Table 54: Stormwater Pit Useful Lives
Component Useful Life (years)
Pits 100
Pump stations 30

Notes

  • Where applicable actual costs for asset acquisition or work done are used to determine unit rates. When this information is not available local engineering knowledge and benchmark data contained in the NSW Reference Rates Manual (2011)[3] has been applied.
  • Local engineering knowledge and benchmark data contained in the NSW Reference Rates Manual (2011)[3] has been used to assign asset's useful lives and depreciation models.

Improvement Plan

  • This asset class needs a stocktake as initial information collected wasn't comprehensive especially in Howlong.

Stormwater Equipment

Methodology

Stormwater equipment assets are valued using age-based methodology.

Last Revaluation Date

2014/15 Financial Year

Categories

Stormwater equipment assets have been categorised as follows:

Table 55: Stormwater Equipment Categories
Category Definition
Mechanical/Electrical Pumps, telemetry systems, switchboards, etc.
Earthworks Retention basins.
Structural Buildings, tanks, metalwork, valves and associated pipe works.

Components

Stormwater equipment assets are not componentised.

Condition

Condition of stormwater equipment assets is not assessed by Council.

Depreciation Method

Straight-line depreciation.

Unit Rates

Unit rates are applied on an individual basis, due to the varying types and capacities of the equipment. In most instances the initial purchase price has been used as the unit rate for equipment and plant items. In the future items with a longer lifespan may need to be revalued to reflect current costs.

Useful Life

Table 56: Stormwater Equipment Useful Lives
Component Useful Life (years)
Mechanical/Electrical 25
Earthworks 100
Structural 60

Notes

  • Local engineering knowledge and benchmark data contained in the NSW Reference Rates Manual (2011)[3] has been used to assign asset's useful lives and depreciation models.

Improvement Plan

  • This asset class was added as a part of the 2014-15 revaluation, in order to store information for stormwater pump stations. Currently most of this equipment is registered in the Equipment & Plant category, so this will have to be transferred as a part of a future valuation.

Unsealed Roads

Methodology

Unsealed road assets are valued using condition-based methodology.

Last Revaluation Date

2014/15 Financial Year

Categories

Unsealed road assets have been categorised in a number of different ways including; hierarchy, purpose, usage, vehicle counts and region. The tables below provide a summary (incomplete) of these classifications.

Table 57: Unsealed Road Hierarchy
Hierarchy Definition
Class U4 Urban - access roads.
Class U5 Urban - laneways
Class R2 Rural - regional and link roads.
Class R3 Rural - collector roads.
Class R4 Rural - primary access with bus routes.
Class R5 Rural - primary access.
Class R6 Rural - secondary access.
Class R7 Rural - unformed fire tracks.

Table 58: Unsealed Road Purpose
Purpose Definition
Regional road Roads classified as "Regional" by the State Government.
Link road Roads that link town and village centres.
Collector road Roads that collect primary access roads to link roads.
Primary access Roads servicing inhabited dwellings.
Secondary access Roads servicing farming properties (non-inhabited).

Table 59: Unsealed Road Usage (not mutually exclusive)
Usage Definition
Bus route Self explanatory.
Agricultural Is used by agricultural traffic (classified into high, medium & low traffic levels).
Heavy vehicle route Self explanatory.

Table 60: Unsealed Road Region
Region Definition
Urban Roads inside urban centres that are usually defined by the start of the 100km/h zones.
Rural Roads outside urban centres that are usually defined by the start of the 100km/h zones.

These categories do not relate to unit rates or useful life and are only recorded for reporting purposes.

Components

Table 61: Unsealed Road Components
Component Definition
Gravel Wearing surface that provides a smooth and durable all weather layer to drive on.
Formation Earthworks that establish the road's profile and drainage.
Land under roads Land under road formation.

Condition

The condition of a unsealed road's gravel is assessed using a number of criteria. These criteria are weighted to give a total condition rating as follows:

Table 62: Unsealed Road Gravel Condition Ratings
Condition Criteria Total Condition Weight (%)
Subgrade visibility 55
Shape loss 35
Profile condition 10

For further details of unsealed road condition assessments refer to the Council's Unsealed Road Condition Assessment Manual.

Depreciation Method

Table 63: Unsealed Road Depreciation Methods
Component Depreciation Method
Gravel Medium-life Infrastructure
Formation No depreciation
Land under roads No depreciation

Unit Rates

Table 64: Unsealed Road Unit Rates
Component Unit Rate ($/sqm)
Gravel 5.00
Formation 6.00
Land under roads 2.00

Useful Life

Table 65: Unsealed Road Useful Lives
Component Useful Life (years)
Gravel 20
Formation n/a
Land under roads n/a

Notes

  • As a part of the 2014-15 revaluation, the useful life of the gravel component of unsealed roads was extended from 15 to 20 years.
  • Council has chosen to only value land under roads for new unsealed road assets. Existing unsealed roads will not have this component added.
  • Where applicable actual costs for asset acquisition or work done are used to determine unit rates. When this information is not available local engineering knowledge and benchmark data contained in the International Infrastructure Management Manual (2006)[1] has been applied.
  • Local engineering knowledge and benchmark data contained in the International Infrastructure Management Manual (2006)[1] has been used to assign asset's useful lives and depreciation models.
  • The condition of unsealed roads is very transient and can be dramatically affected by weather and traffic. As a result the valuation of unsealed roads is only really a snapshot at the time a condition assessment is undertaken.

Improvement Plan

  • Traffic counts and usage could be used as factors in determining useful lives.
  • Collect more actual costs to benchmark unit rates more accurately.

Water Mains

Methodology

Water mains assets are valued using age-based methodology.

Last Revaluation Date

2011/12 Financial Year

Categories

Water mains assets have been categorised as follows:

Table 66: Water Mains Categories
Category Definition
Reticulation mains Mains that distribute water to individual properties.
Trunk mains Large pipes that are primarily used for transporting water from the water towers into reticulation mains.
Rising (pressure) mains Mains that are attached to a pump station and transport water from the water source to the water filtration plant or from the filtration plant to a reservoir.
Firelines Pipes that are used for fire services to properties.

Components

Water mains assets are not componentised.

Condition

Condition of water mains assets is not assessed by Council.

Depreciation Method

Long-life Infrastructure.

Unit Rates

The rates for water mains allow for pipe supply, excavation, laying, backfilling, restoration, fittings and thrust blocks. They also include allowances for survey and design, construction difficulty in urban environments, and other contingencies. Reticulation mains have an in-built cost for service connections, isolating valves and hydrants.

The unit rates for water mains are adjusted annually using the Australian Bureau of Statistics's (ABS) Consumer Price Index[2] for Sydney. The initial unit rates set in June 2003 were:

Table 67: Water Mains Unit Rates
Mains Diameter Unit Rate based on Material & Use ($/m)
UPVC Reticulation DICL Reticulation UPVC Trunk DICL Trunk
50mm 72 - 58 -
80mm 85 - 72 -
100mm 100 135 83 112
150mm 150 175 115 150
200mm 190 220 155 190
250mm 245 265 200 230
300mm 300 300 242 273
375mm 380 380 348 355
450mm - - - 445
500mm - - - 493
600mm - - - 605
750mm - - - 770

The index applied to these rates is 1.376574, so the unit rates as of May 2016 are:

Table 68: CPI Adjusted Water Mains Unit Rates
Mains Diameter Unit Rate based on Material & Use ($/m)
UPVC Reticulation DICL Reticulation UPVC Trunk DICL Trunk
50mm 99.11 - 79.84 -
80mm 117.01 - 99.11 -
100mm 137.66 185.84 114.26 154.18
150mm 206.49 240.9 158.31 206.49
200mm 261.55 302.85 213.37 261.55
250mm 337.26 364.79 275.31 316.61
300mm 412.97 412.97 333.13 375.8
375mm 523.1 523.1 479.05 488.68
450mm - - - 612.58
500mm - - - 678.65
600mm - - - 832.83
750mm - - - 1059.96

Useful Life

Useful life for water main assets are determined by the material that the main is constructed of.

Table 69: Water Mains Useful Lives
Material Useful Life
AC (Asbestos Cement) 60
BB (Blue Brute) 70
CI (Cast Iron) 80
Cu (Copper) 80
DICL (Ductile Iron Cement Lined) 80
Gal (Galvanised Iron) 80
PE (Polyethylene) 70
UPVC (Unplasticised Polyvinyl Chloride) 70

Notes

  • Where applicable actual costs for asset acquisition or work done are used to determine unit rates. When this information is not available local engineering knowledge and benchmark data contained in the NSW Reference Rates Manual (2011)[3] has been applied.
  • Local engineering knowledge and benchmark data contained in the NSW Reference Rates Manual (2011)[3] has been used to assign asset's useful lives and depreciation models.
  • Prior to 2012 revaluation useful life was set at 80 years regardless of material (as specified in the NSW Reference Rates Manual (2011)[3]. This does not really reflect the real-world situation (it has been noticed that AC pipes in particular have significantly shorter lives), so as with sewer mains the useful life has been adjusted according to pipe construction material. Depreciation has been impacted for this financial year as a result of this change of methodology.
  • When water mains were revalued in June 2008 unit rates from NSW Reference Rates Manual (2011)[3] were used and indexed using Australian Bureau of Statistics's (ABS) Producer Price Index [4]. In subsequent years ABS's Consumer Price Index[2] for Sydney has been used to revalue these assets as suggested in the NSW Reference Rates Manual (2011)[3]. In order to take a consistent approach and as a part of the 2012 revaluation the initial rates defined for 2003 in the NSW Reference Rates Manual (2011)[3] have been indexed using ABS's Consumer Price Index[2] for the entire period from 2003 to 2012. While a CPI of 1.3% for the 2012 financial year was applied, the net result of this review has been a slight reduction in unit rates because the PPI previously applied was a larger index than CPI.

Water Equipment

Methodology

Water equipment assets are valued using age-based methodology.

Last Revaluation Date

2011/12 Financial Year

Categories

Water equipment assets have been categorised as follows:

Table 70: Water Equipment Categories
Category Definition
Bores Equipment including pumps and pipes used to extract bore water.
Dam/Reservoir Self explanatory.
Mains Pipework within pump stations and filtration plants.
Mechanical/Electrical Pumps, telemetry systems, switchboards, etc.
Structural Buildings, tanks, metalwork and valves.

Components

Water equipment assets are not componentised.

Condition

Condition of water equipment assets is not assessed by Council.

Depreciation Method

Straight-line depreciation.

Unit Rates

Unit rates are applied on an individual basis, due to the varying types and capacities of the equipment. In most instances the initial purchase price has been used as the unit rate for equipment and plant items. In the future items with a longer lifespan may need to be revalued to reflect current costs.

Useful Life

Table 71: Water Equipment Useful Lives
Component Useful Life (years)
Bores 30
Dam/Reservoir 100-150
Mains 80
Mechanical/Electrical 25
Structural 50

Notes

  • Where applicable actual costs for asset acquisition or work done are used to determine unit rates. When this information is not available local engineering knowledge and benchmark data contained in the NSW Reference Rates Manual (2011)[3] has been applied.
  • Local engineering knowledge and benchmark data contained in the NSW Reference Rates Manual (2011)[3] has been used to assign asset's useful lives and depreciation models.
  • For the 2012 revaluation the replacement value of all equipment was reassessed by Council's Water & Sewerage Engineer. As a result some assets were added, some were deleted and many were revalued to more accurately reflect current costs.

Improvement Plan

  • The useful lives of this asset class needs to be reviewed. With the large variety of assets in this class, more categories need to be added to enable more flexibility in assigning useful life.

References

  1. ^ a b c d e f g h i j k l m n o p q r s International Infrastructure Management Manual (3rd ed.), Sydney, NSW: Institute of Public Works Engineering of Australia (IPWEA), 2006 
  2. ^ a b c d e "Table 5. CPI: Groups, Index Numbers by Capital City (All groups CPI - Sydney)", 6401.0 - Consumer Price Indexes, Australia, Jun 2016 (Australian Bureau of Statistics), http://www.abs.gov.au/ausstats/abs@.nsf/mf/6401.0, retrieved September 15, 2016 
  3. ^ a b c d e f g h i j k l m n o p q r s t u Samra, S.; Essery, C. (2011), NSW Reference Rates Manual for Valuation of Water Supply, Sewerage & Stormwater Assets, Sydney, NSW: NSW Ministry of Energy & Utilities, ISBN 0-7347-5069-2 
  4. ^ "Table 15. Selected output of division E construction, subdivision and class index numbers (Non-residential building construction - New South Wales)", 6427.0 - Producer Price Indexes, Australia, Jun 2012 (Australian Bureau of Statistics), http://www.abs.gov.au/ausstats/abs@.nsf/mf/6427.0, retrieved August 29, 2012 
Personal tools
Namespaces

Variants
Actions
Navigation
Toolbox