Water New Zealand Web Forum

GMcgraw · Joined: 14 Jan 2010 Posts: 3 Location: Dannevirke

Hi guys, we have been completing a major update of our Stormwater AMP and looking to produce our CMP.
the question i have is one of Valuation and then Depreciation of stormwater Assets, especially Open Drains not lined with anything eg concrete plastic etc simply a earthern formed drain. these are both manmade and natural.

How do others go about valuing these and do you if at all depreciation them?

Cheers
_________________
Garry McGraw
Assets & Planning Manager
Tararua District Council

CluthaDC · Joined: 04 Apr 2007 Posts: 24 Location: Balclutha, NZ

Hi,
For asset management purposes, we neither value nor depreciate such drains, because we plan to maintain them ad infinitum rather than to eventually renew them. This approach is accepted by our auditors. Same for earthen structures such as water impoundment dams and oxidation ponds. cheers
_________________
Hank Stocker
Water Services Manager
Clutha District Council

Andy Irwin · Posted: Wed Jan 27, 2010 1:45 pm Post subject:

Hi
Same for North Shore City road drains - unlined channels (water tables) are not valued.

GMcgraw · Joined: 14 Jan 2010 Posts: 3 Location: Dannevirke

Hey thanks guys for that, do you include urban swales that had quite a few dollars construction cost.
one of the problems i face is without a valued asset any improvements eg widening regrading has to go against Maintenance and CAPEX otherwise it appears that we are spending capital dollars on a valuless asset?.
this the argument is the one i am having with the Finance Dept.
_________________
Garry McGraw
Assets & Planning Manager
Tararua District Council

Andy Irwin · Posted: Wed Jan 27, 2010 3:33 pm Post subject:

The point is that the asset does not depreciate to a renewal/replacement in the future. The asset will be maintained (ongoing OPEX) indefinitely. So it requires capital to create, opex to maintain, but no future capex to renew.

svenhanne · Joined: 28 Jun 2007 Posts: 2 Location: Tauranga

Hi Guys, this is consistent with how we manage these types of assets in Tauranga, they do have a value but an unlimited life expectancy as any work is carried out under maintenance. The unlimited life means there is no depreciation. With swales you can go two ways, either as above or if you have a fixed regime for full dig out and replace, you can consider this renewal of that component of the swale and depreciate that part over the matching time period. I feel you'd be better off doing it unter maintenance with an annual programme that covers a percentage of the city's swales each year. Cheers, Sven