Case study 3.13

Asset management for public entities: Learning from local government examples.

Wellington City Council – Greater certainty in financial projections comes from considering and forecasting for the factors likely to have an effect on maintenance and operating expenditure

Wellington City Council's forecast maintenance budgets reflect the age profile of the assets. For example, in its Wastewater asset management plan, the Council has assumed a "marginal increase over the planning period to reflect additional unplanned maintenance needs as the network ages". Consideration has been made for the maintenance and operations impact of adding to or changing the asset base, although the Council is working to the principle of accommodating work within existing budgets by improving efficiencies.

The Council is also clear on the factors that may affect the reliability of its planning. It states where maintenance and operating cost forecasts are consistent with historical spending and is clear in its assumptions. Among the Council's assumptions is one that: "Maintenance costs are based largely on historical expenditure and assume there are no significant changes in contract rates". Should rates change, it is therefore clear that forecasts will similarly need to change to reflect this.

Financial forecasts with breakdown by spending category

financial forecasts