Capital Works Policy

Purpose and Intent

This Policy applies to all requests for capital works approved within the City of Casey’s 1 Year Capital Works Program and 10 Year Indicative Capital Works Program where capital expenditure is used to renew, improve and attain new assets to enable Council to achieve its strategic objectives and support the delivery of services identified in service and asset plans.

Requests for capital works will be reviewed, and capital works projects evaluated, prioritised and completed using effective processes and sound financial management practices giving due consideration to the Council's ongoing operational requirements and strategic priorities.

Scope

This Policy applies to all capital projects which constitute expenditure under the general categories of capital works (Council owned assets) and capital works (assets owned by others) delivered by, or on behalf of, the City of Casey.
The development of strategic documents by, or on behalf of, the City of Casey are not considered capital works projects within this policy. An allocation of funds, sufficient for this purpose, is to be provided in Council's annual budget.

Definitions

Policy

This Policy follows the standards set out in the City of Casey Project Management Framework (PMF) which incorporates processes, procedures and relevant controls to govern the concept, initiate, plan and design, implementation and close phases of projects.
This policy is also supported by a range of Council adopted and organisation Strategies, Policies and Master Plans which guide infrastructure development for service areas. This includes the Property Strategy which guides decision making in relation to the acquisition, leasing, use, maintenance and disposal of Council land assets and the Service and Asset Management Policy in relation to informing where financial investment is made to ensure Council is delivering on the community’s priorities.

Request for Capital Works

Requests for projects to be considered in capital works programs may be generated in any of the following ways:

• From the community, community groups and organisations
• By resolution of Council
• From an individual Councillor
• From a Council officer

Requests for projects are to be reviewed to establish whether the proposal is consistent with Council’s strategic objectives and relevant strategies, service and asset plans; that their whole-of-life cost (both capital and operational) are effective value for the required funds; and if the project is the responsibility of the City of Casey.

Evaluation and Prioritisation

For preparation of the 1 Year Capital Works Program and 10 Year Indicative Capital Works program through the annual budget cycle and capital project requests received outside this cycle, evaluated projects are to be prioritised against principles defined under this policy or by Council resolution.

Requests are evaluated against the following principles:

• Capital works for existing and new assets will be evaluated for their whole-of-life costs, that the projects/assets are an effective spend and use of funds for the outcomes being achieved and on a relative benchmarked basis, i.e. that they are effective value, economically viable and suitable solutions to meet Council’s defined levels of services
• Council will demonstrate long term financial sustainability by prioritising the above evaluated projects to optimise short and long-term planning needs, service levels and standards, risks and costs and community expectations
• Capital works programming must be directly linked to Council’s strategic objectives and adopted Service and Asset Management Plan priorities which consider feedback through community consultation
• Capital works will be prioritised to meet legislative and contractual requirements
• Priority will be given to projects where most of the funding comes from sources other than Council (e.g. Developer Contributions and grants)
• The Capital Works Program must be fully funded for renewal and new works or the source of funding identified and secured
• Capital works must be delivered by the required completion date and within approved budgets.

Project Governance

The City of Casey’s PMF provides a clear structure, defined roles and responsibilities, and levels of authority during the life cycle of a project particularly with respect to the achievement of the expected value or benefits from the project and its link to Council’s strategic objectives.

Capital Expenditure and Variation Approval

Expenditure on proposed projects is to be authorised by the Executive Leadership Team and Council prior to the commitment of that expenditure. Once approved, the project will be included in the Council’s budget for the year(s) the project is scheduled for delivery. 

Where the duration of an approved project goes over more than one fiscal-year, the total project budget is approved, and funding committed in Council’s forward capital works program and subsequent annual budget cycles.

Where expenditure on current projects exceeds the approved project budget allocation, authorisation is to be by the Chief Executive Officer or Council officer delegated responsibility for that purpose by the Chief Executive Officer.

Where the potential for over-expenditure is identified, actions should be taken to adjust project spending. Where changes to project scope, timelines and resources will result in a budget variation, reasons for the variation should be formally defined, evaluated and approved prior to implementation. The process and procedures associated with project variations are found in the PMF.

To ensure it is maximising value through the selection, optimisation, and oversight of programming investment, Council may use resources to bring forward other projects that are already on the forward capital works program.  Resources may come from deferring a planned project that cannot be delivered within approved resources and/or specified time, leveraging other funds or program savings. 

Projects are to be managed in accordance with contract processes and project supervision processes contained in the Casey Procurement Policy which is a companion document to this Policy.

Project and program funding

Funding can be from internal or external sources or a combination of both to undertake capital projects and programs.

Internal Funding
Internal funding comes from Council cash reserves allocated to capital. Internal funds are limited so prioritisation is applied when funds are distributed across different projects and programs through Council’s annual corporate planning cycle.

External Funding

External funding of projects and programs takes many forms. This includes grants and contributions from State and Federal Government and developers.

A Memorandum of Understanding must be developed for projects delivered through collaborative partnerships between Council and other agencies or community groups to ensure the partnership has defined clear roles and responsibilities and service outcomes.

The Community Investment Strategy, which is under development and includes Advocacy and Grant (Seeking), seeks to optimise all external funding (including by developers) for both capital works and projects and also for operating programs and services. Through the Strategy, Council will strategically target external funding opportunities to better leverage its capital works delivery capability to help meet the growing needs of the community.

Realistic assessments on the potential external funding solutions for projects, and/or consideration of alternate positioning and scope of proposed projects to assist optimisation of external funding, should occur at an early stage to avoid Council potentially incurring unnecessary costs. Such assessments should occur for significant, complex and or new types of projects.

Funding by service levels

Priority will be given to maintaining renewal and capital expenditure profiles that have been determined for adopted levels of service through Service and/or Asset Management Plans. 

Non-Council owned assets

Throughout the City of Casey there are various non-Council owned community assets that are managed by Council or a third party/organisation, including community facilities, recreation reserves and indoor stadiums.

Council may fund and undertake works or make a contribution to a third party/organisation for capital projects on non-Council owned assets or land where those projects provide benefits to the community that would otherwise be provided directly by Council on Council owned land.

Before the level of Council contribution is determined, an assessment should be made regarding the potential for other external funding support.

A Joint Use Agreement will be negotiated on a project by project basis prior to Council making a financial contribution. The terms and conditions of these contributions are contained in the Joint Use Agreement Policy.

Council has a range of grants and assistance available to community groups, organisations and individuals to improve or repair a community facility or recreation reserve which can be viewed on Council’s website.

Responsibilities

Breaches

NA

Relevant Forms

NA

Document History