By John Howard*
The City of Devonport is typical of provincial Cities in Australia. Devonport is located on the north west coast of Tasmania and has a population of 25,000. The services provided by Council include roads, drainage, water supply, sewerage, parks, recreation facilities and public buildings.
To improve the return to the City from its investment of $270 million in infrastructure assets, Council has implemented a comprehensive asset management system. The first report to Council on asset management was in 1988. It introduced the concept of asset management and recognition of the consumption of physical assets by a depreciation charge against operating expenses.
A second report in 1989 valued the City’s infrastructure assets at $220 million. The rate of consumption was estimated at $5.6 million per annum which equated to 30% of Council’s total income. Council agreed to engage consultants to prepare a Needs Analysis Report on asset management. The Needs Analysis Report was completed in 1990. It recommended that Council implement a formal asset management program with a two year data collection phase. This involved employment of two staff and purchase of computer processing capacity, estimated to cost $320,000.
Council adopted the report recommendations and an action plan. The objective was to extend the life of infrastructure assets to reduce the present rate of asset consumption to a level that the community was able and willing to pay. To date, most of the action plan has been completed and asset management principles have been incorporated into Council’s activities. Use has been made of the principles outlined in the Institute of Municipal Engineering Australia’s National Asset Management Manual.
Infrastructure assets were first recognised in the 1993/94 financial reports. The 1994/95 financial reports showed the replacement value of infrastructure assets at $273 million, written down current cost of $152 million and rate of consumption of assets shown by depreciation at $5.1 million per annum. Depreciation was 23% of total income and 32% of rate income.
Council elected to develop its existing WANG Datamation computer system, rather than purchase stand alone PC based asset management software. The development of the computer system has been in conjunction with Townsville in Queensland and Lillydale in Victoria, now part of Yarra Ranges Shire. Council now has a fully integrated Local Government computer system incorporating asset management, job costing, works and maintenance, planning and a GIS with the financial and property systems.
Devonport’s computer system received the 1995 Excellence Award for Financial Management awarded by the Local Government Association of Tasmania. Asset management is a process of continuing improvement for Devonport, as the Council and staff strive to improve the return on the community’s investment of $250 million in infrastructure assets.
*John Howard is Manager Technical Services at Devonport City Council.
