Managing Living Parks Assets Jayson Kelly, F.R.I.H

What Are Living Assets

Amenity grass Sports turf Gardens Trees Hedges SQID’s Natural areas - bushland, wetland, coastal areas etc. “Green”, “Soft” or “Living”?

Good Practice YES They are no different than other infrastructure assets Should We Apply Asset Management Principles and Practices?

Is it practical to do so? Is it actually useful to do so? However….

Most organisations are not applying an asset management approach to their living assets If they do, it is usually limited to just street trees Current Situation

Lack of understanding Too hard Not enough resources Organisation resistance Other priorities Not thought to have a predictable “Life” Why Not?

How do you manage renewal of the following living assets: Street trees Gardens Sports turf Hedges Bushland Discussion

The information can be used to assist with: Asset valuation Renewal programs Identifying inefficiencies Undertaking parks operation reviews Benchmarking Contract schedules Why Collect a Living Asset Inventory

How long is a piece of string? Gardens Allow 5 minutes for a 50m2 garden bed in a park Allow 10 min for a 50m2 garden bed in a road Trees Allow 5 minutes for basic inventory information, but 10 minutes if more operational inspections are included, such as checking for structural integrity or programming maintenance work Grass Do this from aerial photographs. Allow 10 minutes per park, so that polygons of buildings, roads etc can be removed from the park area to derive the grassed area How Long Does it Take

Sports turf Measure area from aerial photographs - allow 5 minutes per park. Allow 20 minutes to assess condition for each field Hedges Allow 5 minutes for a 100m of hedge Bush Can be a very long process, depending on what detail is required. Requires walking over a substantial area of the site How Long Does it Take

Only determine a useful life for a living asset if you are planning to renew it. Typical living assets which are renewed include: Street trees Street gardens Sports surfaces Ornamental gardens such as rose or annual beds Useful Life

There is little or no guidance provided by the industry on what useful lives should or even could be. The Yardstick programme in Australia has been benchmarking lives being applied to the following: Useful Life living AssetLife RangeMedian LifeCommon Life Street tree years50 years Rose garden years15 years10 years Street garden years15 years10 years

In New Zealand, where the Yardstick programme has been operating for a longer period, and has more data, the following lives were benchmarked: Useful Life living AssetLife RangeMedian LifeCommon Life Street tree years50 years Rose garden years15 years Street garden years10 years Soil based sports field 7 – 50 years20 years Sand based sports field 10 – 50 years15 years10 years

When determining useful lives, the level of service being delivered influences when assets are renewed. So for example, a sports field with some undulations, that caters for junior sport, is likely to be renewed (if ever) on a longer cycle than the same sports field if used for representative play. Useful Life

What about useful lives for other living assets? Bushland areas? Hedges? General gardens? Park trees? Amenity lawns? Useful Lives

The is a LOT of confusion around placing a value on living assets. A living asset can have several values, depending on the use of the value: Environmental value Commercial value Insurance value Sale value Replacement value living Values

Value is a highly contentious area, even for hard assets Council accountants are a long way from accepting that living assets be included in Councils aggregated valuation figures – like many of our other park assets Don’t worry about it, we still need to do it, and seek the funding based on a repeatable methodology For many people value includes intrinsic benefits such as health, wellbeing, environmental etc For asset management, value is a monetary figure Monetary Value

Some accountants will argue that a tree appreciates and does not depreciate – they are correct in all of the above examples for value, except replacement value. For asset management purposes, we are only interested in the replacement value i.e. how much money do we need to remove the old living asset, and replace it with a new living asset. We are generally not able to replace like for like, so the replacement value is what we can practically replace the living asset with. Living Asset Values

For example, the replacement value of a typical suburban street tree would be worked out by: Cost of removal and stump grinding + replacement of growing medium + planting of a 3 - 4m tree The final sum is how much you need to replace the asset when it is at the end of its life. This value, x the number of street trees ÷ the useful life is, in theory, how much asset renewal funding you need each year for your street tree asset renewal program. Living Asset Values

living Asset Values A x B ÷ C = D A is the replacement value B is number of assets C is the useful life D is the theoretical annual funding needed for renewal

Another example for street gardens would be worked out by: Cost of new landscape design + excavation and removal of the garden + replacement of growing medium + planting of new plants and mulch Living Asset Values

Conclusion Asset management can reasonably be applied to some living assets Having an inventory of living assets makes sense as it can be used for more than just asset management Apply useful lives only to living assets you plan to include in a renewal program

Conclusion When valuing living assets for asset management purposes, focus on replacement value Walk before you run