Adelaide Hills, a cool climate wine region in the Mount Lofty Ranges east of Adelaide, is home to about 40,000 residents with an asset base of approximately $20,000 worth of infrastructure per resident. This high per capita infrastructure compared to larger municipalities creates unique pressures on maintaining service standards.
The Council, located near Adelaide but within the watershed for Adelaide's water supply, faces growth limitations, adding pressure to provide services over an 800 sq km region. To address this, the Council shifted from a "last year plus or minus 5%" approach to a more strategic spending optimization, aiming to achieve better outcomes with the same or less expenditure.
This was achieved by using rule-based models to test and simulate various scenarios, providing councillors and stakeholders with choices. For example, they evaluated the long-term impact of fixing the worst assets first (BAU), adjusting intervention levels based on asset utilization, and increasing funding by 20% to determine the return on investment.
The Council has successfully applied this method to roads and plans to extend it to buildings, open spaces, and drainage as they gain more confidence in asset performance. Their short-term vision includes modeling asset functionality, climate impact, and social cohesion targets. Eventually, they aim to unlock more value by balancing investments across different asset classes to maximize the effectiveness of ratepayer dollars.
As part of their maturity development, within 12 months, they plan to test simulations and scenarios for planned obsolescence. This involves making informed decisions on rationalizing, divesting, or relocating services when the life cycle cost of a facility exceeds 25% of its replacement cost.