Asset Management

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Un-assumed assets in a Municipality and Asset Management Plans.

  • 1.  Un-assumed assets in a Municipality and Asset Management Plans.

    Posted 11-12-2020 13:35
    Hi, folks.  I'm looking to get some input as to what other Municipalities are doing when it comes to assets that have not yet been assumed by the Municipality.  When new subdivision are built by a developer, it's not uncommon for those assets to remain the responsibility of the developer.  My question is, should they be included in the Asset Management plan?  The AMP for our core assets is legislated to be completed by July, 1 2021, which includes roads, storm, and bridges in our case.  I'm struggling with the question of leaving out assets that are still the responsibility of the  developers, (for financial reasons) but a letter of acceptance has been issued by the town.

    Any feedback would be greatly appreciated.

    Claudia Puchalski

    Asset Management Supervisor
    Town of Tillsonburg
    519-688-3009 Ext 4413
    cpuchalski@tillsonburg.ca



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    Claudia Puchalski
    Town of Tillsonburg
    Asset Management Supervisor
    Tillsonburg ON
    Canada
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  • 2.  RE: Un-assumed assets in a Municipality and Asset Management Plans.

    Posted 15-12-2020 10:56
    Hi Claudia

    We have an option in our AM system to include assets, but aren't owned or valued by Council. You could do something similar. Have a date when the letter of acceptance was issued, and when the maintenance period expires. That way the assets are registered, but not financially recognised until the formal hand over. It also ensures that when a problem arises, you can easily check and see who is responsible for repairs. Tie that in with your GIS system.



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    Ricky Luke
    Team Leader - Design & Assets
    Glenelg Shire Council
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  • 3.  RE: Un-assumed assets in a Municipality and Asset Management Plans.

    Posted 16-12-2020 13:08
    Hello,
    I would be tempted to recognise them as soon as practical as well as the associated land under roads, stormwater, kerb and gutter and the other component assets.
    Essentially, if the community is using the assets, then you already "own" the assets, just that they are under a warranty agreement with the constructor.
    Your accounting friends can show you clause 20 in AASB-116 where it essentially says that once an asset is able to provide the expected service, (Once in the location and condition necessary to be operating) then it is to be recognised.
    If you delay the recognition, then the value that is being consumed is not being recognised in your financial processes.

    There is "value" being consumed that represents a future commitment of Council to perform the renewal and by delaying the recognition it is probable that this portion of the asset life will never be recognised or will need you to introduce a shorter useful life for the assets.
    This impact will be most noted for "seal" that has the shortest life.
    It would also be rather handy to have them as assets so that operations/maintenance works can be correctly attributed to the specific localities. For instance, if you don't have the road recognised, then how do you allocate resources for street-sweeping, how do you negotiate garbage collection routes and soon.

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    Lance Scriven
    Dubbo Regional Council
    Corporate Asset specialist
    DUBBO
    Australia
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  • 4.  RE: Un-assumed assets in a Municipality and Asset Management Plans.

    Posted 17-12-2020 13:33

    Hi Everyone,

    At Melton City Council these assets are captured and brought in as soon as Practical Completion is issued, but with On/Off maintenance dates clearly stated.  



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    RIMA ZREIKAT
    Melton City Council
    STRATEGIC ASSET MANAGEMENT OFFICER
    MELTON
    Australia
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  • 5.  RE: Un-assumed assets in a Municipality and Asset Management Plans.

    Posted 17-12-2020 13:32
    Roads & Maritime deal with toll road concessions in their accounts which would be similar.
    For example
    https://www.rms.nsw.gov.au/documents/about/corporatepublications/annual-report-2017-18-vol2.pdf
    page 49
    13. Non-current assets - intangibles assets and other
    "RMS values each right to receive asset by reference to RMS' emerging share of the written down replacement cost of each asset apportioned using an annuity approach. Under this approach, the ultimate value of the right to receive the property is treated as the compound value of an annuity that accumulates as a series of equal annual receipts together with an amount representing notional compound interest(refer note 3(f)).
    RMS initially accounts for any up-front contribution to the private sector operator for the construction of the PSPI (private sector provided infrastructure) as prepayment, and recognises them progressively as expense over the concession period.

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    GrantSheldon
    Sheldon Consulting Pty Ltd
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