Capital Asset Management Plan

1. Introduction

The objective of the Capital Asset Management Plan is to provide the physical infrastructure necessary to enable the University to achieve its goals in teaching and research. More specifically the plan aims to optimise the efficient and effective use of the funds provided by the Commonwealth and the University for capital works through a balanced programme of maintenance, minor works and major building expenditure and to optimise the use of available campus and building space.

2. Relationship to the Strategic Plan

The Capital Asset Management Plan covers buildings, grounds and services and aims to support a number of key statements in the University’s Strategic Plan.

The University’s primary mission is to:

"advance, transmit and sustain knowledge and understanding through the conduct of teaching, research and scholarship at the highest international standard, for the benefit of the international and national communities and the state of Western Australia."

This is reinforced by the University’s key role statements:

"The University of Western Australia is a high quality, research intensive university with a broad and balanced coverage of disciplines in the arts, sciences and major professions. It is characterised by a strong research and postgraduate emphasis linked to a high quality undergraduate education, across the range of its disciplines; by selected areas of research concentration; and by an international focus for its activities and standards."

Both of these statements set the guiding parameters for the Capital Asset Management Plan in that they require a physical environment that is commensurate with:

• high quality,
• international standards,
• a broad discipline base,
• a teaching – research nexus,
• areas of research concentration.

These are the underlying values that drive capital asset planning and management.

Capital Asset Planning also needs to take notice of two major planning documents previously submitted to Senate. These are:

• The Campus Development Plan 2000. The plan was based on the Stephenson Principles.  It provides a guide to where development could take place and identifies a number of planning principles to be followed including principles relating to aesthetics and parking.
  
• The Landscape Development Plan which was prepared in 1992., concentrates on the gardens and green spaces.  The plan is in the process of being updated following the completion of the Campus Development Plan 2000. 

In addition the Senate has a policy on green spaces and permanent green reserves that can impact directly on Capital Asset Planning. This is important in view of the University’s policy of providing access to members of the local community, particularly with respect to grounds and buildings.

Planning Framework

The following table shows how the University’s Strategic Values and Goals make up the planning parameters to be reflected in the strategies adopted by the Accommodation Committee and subsequently the Facilities Development Steering Group and Facilities Management. The quotes are taken from Section 5 of the "UWA Strategic Plan" (updated December 2001).

3. The Management Framework

Structural Arrangements

Implementation of the Capital Asset Management Plan is the responsibility of a number of different sections of the University, including the Planning and Budget Committee,  the Facilities Development Steering Group, Sporting Facilities Board and Facilities Management.
 
The University’s Executive has identified six objectives from the Strategic Plan that are considered to be of the highest priority. Five of them have the potential to exercise a direct influence on the Capital Asset Management Plan. They are:
 

• To recruit, develop and retain the highest quality staff;
• To attract, develop and graduate the highest quality students;
• To direct resources preferentially to areas of particular strength and opportunity;
• To increase the amount and proportion of non-government funding available to the University;
• To improve collaboration between faculties and departments within the University and with other Universities.
   

One outcome of the adoption of these principles has been the decision to retain central control of the capital budget. This allows the Facilities Development Steering Group to make funding recommendations that are in accordance with the overall academic direction of the University and the priorities of the Planning and Budget Committee.

The Facilities Development Steering Group is responsible for advising the Planning and Budget Committee and Vice-Chancellor on the provision of accommodation for departments and faculties in existing, new or refurbished buildings. It establishes the amount of space to be allocated to departments and recommends to the Planning and Budget Committee the allocation of funds from the Capital Works Programme for building work to be undertaken. 

The Sporting Facilities Board is charged with overseeing the use and maintenance of the various sporting facilities which are located at the UWA Sports Park and on campus at Riley Oval and James Oval. These are major venues that are available to various University and community groups. To a large extent the University contribution towards capital developments is met from rental income although the previous Accommodation Committee has provided capital works funding in the past. However, most of the maintenance costs are met from the general maintenance budget.

Facilities Management is responsible to the Executive Director, Finance and Resources for the efficient expenditure of Capital Works Programme funding. It is also responsible for the expenditure of the maintenance budget allocated to it. Within the office, expenditure on new and refurbished buildings is the responsibility of the Planning and Design Section, while expenditure on maintenance is the responsibility of the Operations and Maintenance Section. Facilities Management also provides support for the various University committees with an interest in improving accommodation and related services (Ventilation Committee, Radiation and Bio-Safety Committees, Health and Safety Committee and Equity and Diversity Advisory Committee). Finally, Teaching and Infrastructure Services (TIS) are located within this section. Staff in TIS are responsible for preparing the University Timetable, booking central teaching facilities and the provision of audio visual support.

Deans are responsible for the equitable distribution of accommodation allocated to departments within their faculty. They also have responsibility for the following activities:

• alert Facilities Management to accommodation problems, either existing or potential that cannot be resolved within the faculty’s "envelope of space",
• assign a priority to competing accommodation needs and advise Facilities Management,
• assign a priority to applications for funding under programmes administered by the Facilities Development Steering Group,
• ensure that accommodation within the faculty complies with Occupational Health and Safety standards.

Decision making criteria to be followed

Improving the quality of accommodation

Many of the University's highly serviced scientific and medical buildings were built in the 1960's and early 1970's and these have reached the point where major refurbishment/replacement is now required. Other important factors such as new occupational health and safety standards, changes in departmental requirements for teaching and the need for more sophisticated research facilities have also added to the requirement for building refurbishment. The University's services - both below and above ground - are in need of constant upgrading and refurbishment to ensure that the campus infrastructure keeps pace with the demands placed on it.

The Facilities Development Steering Group has to determine priorities to refurbish or replace buildings. In this it is assisted by Facilities Management which provides professional advice.

Replacement

The criteria for determining whether buildings should be replaced rather than refurbished are:

• built of very lightweight materials such as fibro-cement, wood and/or iron;
• single storey;
• no historical value;
• occupies a prime building site suitable for a multistorey development;
• no longer economic to maintain,
• restoration cost exceeds 75% of the Capital Replacement Value and structure of the building does not readily lend itself to adaptation.

Refurbishment

The criteria used in determining priorities for refurbishment include:

• occupational health and safety requirements;
• disabled access;
• age of building, historic value, excessive maintenance costs;
• changing departmental and campus requirements;
• changes in building occupants;
• suitability of building for refurbishment
• excessive energy consumption.
   
  Departments are encouraged to apply for Minor Works Programme funding to undertake small improvements to accommodation. The applications are awarded a priority by faculties before they are submitted to the Facilities Development Steering Group. The final funding decisions are made by the Group after it has considered the needs of the whole University.

Maintenance

Facilities Management monitors expenditure on a building-by-building basis for comparison with life-cycle costing data and to highlight over and under expenditure on maintenance. This expenditure information is supplemented by information obtained from building audits which is used to establish priorities for maintenance expenditure and develop a preventive maintenance programme. In 2000-2001 the Office commenced a programme to identify and quantify deferred or backlog building maintenance.  In December 2005  the value of deferred maintenance was estimated at $53.6m.

The University has embarked on a strategy to reduce this deferred maintenance backlog, which involves the development of a strategic asset maintenance system. The identified backlog is being scoped and estimates prepared to support detailed funding submissions, and the development of a maintenance project schedule.  Funds are being applied to the projects on the schedule to reduce the risk and overall backlog.

The proportion of the deferred backlog cost to the overall asset replacement value will be monitored to ensure that maintenance funding is adequate to conduct validated life cycle replacements and reduce the existing backlog.  The Strategic Asset Maintenance Plan is being developed to detail the supporting procedures for this strategy.

Insurance

The insurance programme for the University is continuously reviewed in line with national and international trends in the insurance market.  Asset limits and limits of liability are set to provide maximum indemnity to the University based upon declared asset values and risk assessment of the liability and indemnity exposures on an annual basis.  A full review of asset values by an external provider was completed in 2004.

Policy Framework

Need to comply with legislation

Facilities Management must ensure that all work on buildings and services complies with relevant legislation that includes the Building Code of Australia, relevant Australian Standards, Occupational Health and Safety requirements, Heritage Act of WA,  requirements of statutory bodies, requirements of the Health Act and requirements for disability access. These requirements are published in a variety of documents and may also be found on the Web. (See appendix for details).

Specific University accommodation policies

In recent years the now disbanded Accommodation Committee established a number of policies, such as the air-conditioning policy, and a number of precedents and procedures to be followed when buildings are refurbished or in design. These policies and precedents are contained within the minutes of the meetings and are available on the Web. (See appendix for details.)

Evaluation and review of the accommodation policies, precedents and procedures is undertaken on an ongoing basis. Each new capital works project is unique and building occupants often question how the work is to be undertaken. The Facilities Development Steering Group will consider academic arguments and also employs professional consultants to provide advice on policy matters.

Space Planning Standards

In 2000  the University's initiated a space benchmarking activity against the G08 universities.  It was completed at the end of 2001 and provided a valuable reference for Deans and the Facilities Development Steering Group showing space allocations per academic staff member by discipline.

Space Utilisation Surveys commenced in 2001 and have continued since then.  During a survey,  nominated departmental rooms are checked every hour over a 40 hour period (eg Monday to Friday 9 - 5).  The results have proved to be particularly valuable and have helped improve the use of the University's Capital assets.

Space Modelling

A Project Officer was appointed to investigate options for a formula to help ensure that space is distributed equitably.  The report was tabled in December 2002, and adopted by the Planning and Budget Committee in March 2003 as one of three sets of information to be used in the determination of efficient/rational useage of space.

Funding Arrangements

Funding is provided from a number of different sources which will be considered separately.

1. Maintenance

A 1990 survey of buildings undertaken by a firm of Quantity Surveyors indicated that annual maintenance expenditure on University buildings should be in the range of 0.7% to 1.4% of the capital replacement value (crv) of buildings depending on the quantity and complexity of services. One of the primary objectives of the University's Capital Management Plan is still to progressively raise the level of maintenance expenditure on University buildings to 1.25% of the capital replacement value of buildings and site services. Maintenance funding is provided as part of the annual budget process.

2. Capital Works Programme

The funds for this come from three sources:

• DEST funding on an EFTSU basis – the Capital Roll-in component of the Operating Grant. When this funding was introduced a decision was made to deduct this component from the operating funds before any other allocations are made. This ensures that the allocation is preserved for operating purposes. In 2005 $7.89 million was received from DEST.  The allocation for 2006 is  $8.03 million.
  
• University investment income. In 2006 this will amount to $6.90 million.
  
• An allocation from the income derived from overseas student fees. In 2005 the allocation was $2.95 million. For 2006, budget papers indicate that it will be $3.29 million.

The Capital Works Programme appropriation in 2006 will be approximately $19.47 million.

3. Minor Works Programme

The Programme funding received for 2006 is $3.05 million.

This funding has not been devolved to faculties because of the strategic importance of the University’s buildings and grounds and the necessity to ensure that work is undertaken in accordance with the University’s strategic priorities.

Expenditure patterns

Expenditure patterns tend to fluctuate because building work must be undertaken to fit with University teaching and research activities. In addition, it is difficult to accurately timetable expenditure on new or refurbished buildings because many external factors (such as delays in design, poor weather, industrial difficulties) may delay the expenditure process.

It is usual for Minor Works and Maintenance funds to be committed each year. However, the Capital Works Programme expenditure fluctuates from year to year. The result is that the Programme may appear to be in surplus one year and deficit the next.

4. Priorities, Issues, Initiatives

In 2002 the University started to build a new   Molecular and Chemical Sciences Building which will require most of the available capital funds to the Year 2007.  The result will be that there will be little opportunity to either build new space or undertake major refurbishment of existing space.

A Working Party of the Facilities Development Steering Group will annually consider the priority of Capital Works to be undertaken post 2007.  In undertaking this review it has been agreed that the following criteria will be considered:

• Health, safety and other regulatory requirements
  
• Satisfactory return on invested capital demonstrated by
• The activity being central to UWA role and mission, strategic plan and priority access
• Impact on staff and students - the new building serves a large number of students and staff
• Expected future student growth -eg growth in designated academic profile areas; growth in fee-paying students
• The activity being capable of generating contract research, research commercialisation
• A reduction in future operating and maintenance costs - merits of continuing maintenance vs replacement of buildings
  
• Current space needs demonstrated by
• National/International best practice, G08 benchmarking
• Recent review(s) of space requirements
• Space planning/allocation model
• Utilisation study
• Demonstrated overcrowding
  
• Efficiency grounds
• Staff proximity to one another (eg from new amalgamation of departments)
• Services to be provided in one area.
  

Sources of Relevant Information

Accommodation Committee Minutes http://committees.uwa.edu.au/noncurrent_committees/accommodation/minutes

Accommodation Committee Agendas           http://committees.uwa.edu.au/noncurrent_committees/accommodation/agendas

Safety and Health Office
http://www.safety.uwa.edu.au/

WorkSafe WA's Safety Line
http://www1.safetyline.wa.gov.au/

Building Code of Australia
Copies available in Facilities Management

Australian Standards
Copies available in University Library 
 

Reviewed May 2006