Enhancing Stormwater Asset Management Strategies to strengthen financial sustainability at Logan at IPWEAQ conference in 2015

1. Enhancing Stormwater Asset Management
strategies to strengthen financial sustainability
at Logan City Council
By Ashish Shah

2. Logan City
– Heart of South East
Queensland
– In between Brisbane and Gold
Coast
– 6th
largest Council in Australia
– 293,000 residents*
– Population is increasing by 2%
each year
– 960 sq km land area

3. Logan City Council
– $775.5 million 2013/2014
annual budget
– $4.28 billion in assets
– 2,138 kilometres of roads
(including 85 kilometres of
unsealed roads) and 1200 km
of Stormwater Concrete pipes
– 50* bridges
– 871 parks and reserves

4. At Logan
• Logan City Council's (LCC) Financial Sustainability Strategy
identifies and plans to address some concerns over
Council's future forecast net operating surplus/deficits which
have been and are forecast to be in deficit for a number of
years.
• Council's forward estimates presented in the strategy
indicate that due to the levels of depreciation, Council's
operating revenues will need to be increased even further to
match Council's operating costs.
• As it stands throughout the 10 year time horizon of the
model, Council is not fully funding depreciation.

5. Why SW AM Project?
• to assist with Council’s financial
sustainability in the era of demanding
funding priorities, growing and expanding
asset bases and increasing community
expectations
• to understand the abnormality between
the renewal expenditure trend and
demand in comparison to historical
financial reporting which was based on
traditional accepted useful lives.

6. SW Asset Mgmt
• Improving the data quality, confidence and
performance expectation of SW Assets.
• The significance of the asset data, current
replacement costs and life expectancy has
drastically increased as Australian Local
Governments have been required to adopt
accrual accounting practices and meet related
regulations.
– Advanced maturity/ research/ modelling in road
space but SW still poor cousin!!

7. Focus
Enhancing asset management strategies to
strengthen financial sustainability
– Asset management strategies towards the long term viability
– Reflecting on the strategies of optimal treatments and asset
performance through improved knowledge/ confidence and
evidence

8. Replacement Value of Stormwater Drainage Assets
as at 30 June 2015
Sub Class Count (no) Length
Written Down Value
$ million
Total Replacement Value
$ million
Pipes <600mm
33,988 688 km $153.8 $203.8
Pipes 600mm to <1200mm
9,496 297 km $188.6 $245.3
Pipes >=1200mm
2,829 104 km $174.2 $229.5
Culverts<600mm
37 477 m $0.1 $0.2
Culverts 600mm to <1200mm
247 3,841 m $2.5 $3.3
Culverts > =1200mm
897 23 km $78.6 $101.5
Channels
175 22 km $2.9 $17.9
Drainway 5,895 N/A $21.3 $48.7
Field Gully 624 N/A $1.3 $1.5
Gross Pollutant Trap 420 N/A - -
Gully 21,258 N/A $84.7 $101.9
Headwall 4,944 N/A $1.8 $2.3
Manhole 13,290 N/A $29.5 $33.9
Total Pipes Length 1089km Total Culverts
Length 49.318 km
Total Stormwater Drainage $739.3 $989.8

9. How - Methodology
• Know me to be informed:
– Review of asset register & componentization*,
– unit rates,
– renewal project data and condition data to
recommended appropriate useful lives,
– unit rates and valuation methodology to be
supported by additional condition data capture/
assessment
• Simple analogy to Roads (Seal/ Surface,
Pavement, Subbase, Earthworks)

10. SW pipe make up
Image Courtesy from
Structural design - Melbourne Water

11. Key ingredients
• Stormwater Pipes, Pits, Headwalls and Culverts
better aligns with modern asset management
practices
• Renewal (relining, part pit rehab) from no.
of projects and industry research
– Greater than 1m deep, 600m or larger, a good
economical candidate of renewal treatment
• Pipe, trench (incl of base)

12. Continue…
• incorporating asset performance observations
(CCTV, age and historical field knowledge)
– 6km of 1200km pipe network
• Risk based sampling
– Visual validation (of no significant issues)
• Unit rates review
– National benchmarking (JRA and associates)

13. Useful life phase 1
Asset Category
Previous
Useful Life
Adopted
Useful Life
Box Culvert 100 100
Headwall 50 100
Pipe 100 100
Pipe (Large Dia Pipe) 100 100
Pipe (Large Dia Trench) 100 200
Stormwater Pits (Longer performing
Component) 15 - 100 200
Stormwater Pits (Renewed/able Component) 15 - 100 50 - 100

14. Summary
Revaluation
Category
Revaluation
Dimensions Dimension Unit
Current
Replacement
Cost
Written Down
Value
Annual
Depreciation
Pipes 1,091,166.39 Length (m) $678,768,692 $516,696,610 $6,415,072
Pits 44,322.00 Quantity $191,186,699 $161,401,583 $1,274,765
Channels
Not provided for
Valuation
Box Culverts 29,182.62 Length (m) $105,096,225 $81,311,211 $1,044,154
Headwalls 4,974.00 Quantity $2,363,440 $1,789,447 $23,419
Totals (2015 Revaluation Closing Balances) $977,415,057 $761,198,851 $8,757,410
Totals (Pre-Revaluation Figures Closing Balance 30 June
2014) $1,408,379,378 $995,374,873 $15,499,370
% Variation -31% -24% -43%

15. Outcome
• The improved alignment of Asset
Management practices and financial
reporting of stormwater assets has
resulted in a $6.4 Million reduction in
annual reported depreciation.
• This is a material reduction in
depreciation expense for this asset
portfolio.

16. Next phases
Collaboration, resource sharing and open
data (across Public Sector)
• Further componentation (reflection of design,
construction and asset life cycle practices)
• Seeking support and collaboration from many
Councils for additional evidence and calibration
• Opendata standard for asset management data
sharing
• Industry collaboration and research partners
• Learning and knowledge share with other pipe
asset owners (water, wastewater and gas)

17. SW pipe make up
Image Courtesy from Structural design -
Melbourne Water
D B
A
C

18. Collaboration
The larger the
•benchmarking base,
•asset performance data,
•supporting analysis and input
for collective intelligence from industry, the
broader and robust would be the methodology
and outcomes for all of us to share and benefit
from

19. Questions
Thanks very much
Contact: Ashish Shah
ashishshah@logan.qld.gov.au
M: 0434 327 923
Acknowledgement:
Jeff Roodra, Cherie Lee
David Lovell, Robert Strachan and David Lyness