Essential public assets
Assistance is provided to councils when they perform emergency debris clean-up and/or restoration works to eligible, essential public assets. The following are examples of assets that would generally be considered to be essential public assets:
- road infrastructure, for example road signs, guard rails and traffic lights
- local government offices
- stormwater infrastructure.
Emergency debris clean-up
Clean-up work from essential public assets (e.g. debris removal, tree pruning, drain clearing etc.), must be completed within 21 days of the disaster declaration. Financial assistance is only available to cover additional external resources that council had to use to perform the work (e.g. overtime hours, agency staff, contract services, external plant hire, etc.). Council cannot claim for work performed by its usual salary and wages staff within normal operating hours nor any internal plant hire charges.
Councils should submit documentation to Public Works Advisory that shows that the costs they are claiming are additional to normal operating costs, as defined above.
For asset repair and replacement work to essential public assets, financial assistance is only available to cover additional resources council had to use to perform the work (e.g. overtime hours, extra shifts, backfilling positions, agency staff, contract services etc.). Council cannot claim for work performed by its usual council’s salary and wages staff within normal operating hours nor any internal plant hire charges.
Councils should submit documentation to Public Works Advisory that demonstrates the costs they are claiming are additional to normal operating costs, as defined above. Councils have the balance of the financial year in which the disaster occurred plus two full financial years to complete the works.
Pre Disaster Condition
Financial assistance may be available to councils to help return essential public assets to their pre-disaster condition. Before seeking a grant for essential public assets restoration or replacement, councils are expected to have implemented the Integrated Planning and Reporting Guidelines for local government in NSW and the Local Government Code of Accounting Practice and Financial Reporting.
Under these guidelines, councils are required to establish a Community Strategic Plan and a Resourcing Strategy, which includes an Asset Management Plan. They are also required to report on the overall condition of each class of assets in their annual financial statements, in line with the Local Government Code of Accounting Practice and Financial Reporting.
When applying for a grant for the restoration or replacement of damaged essential public assets, councils are expected to provide:
- A copy of their Asset Management Policy, with evidence of its endorsement by council
- The relevant Asset Management Plan for the asset
- A copy of the Annual Financial Statement for the previous financial year (including asset condition reports)
- The most recent documentation available that shows the pre-disaster condition of the asset. This documentation should be either the same documents used to inform asset condition reporting in the Annual Financial Statement, or more recent documentation (including photographic evidence) about the condition of the asset, where it exists.
Very Poor Condition
If the most recent asset condition documentation indicates that prior to the Natural Disaster, the asset was in ‘Very Poor’ condition (as defined in the Integrated Planning and Reporting Manual for local government in NSW — March 2013), a grant to restore or replace the asset will not be given.
Average or Poor Condition
If the most recent asset condition documentation indicates that prior to the Natural Disaster, the asset was in ‘Average’ or `Poor’ condition (as defined in the Integrated Planning and Reporting Manual for local government in NSW— March 2013), the council must provide evidence to show that it had allocated funding within the last 12 months to return the asset to ‘Good’ or ‘Excellent’ condition. If this funding has been allocated but not yet spent, any grant that might be given to restore or replace the asset will be reduced by the amount of the unspent funding.
Where the most recent asset condition documentation indicates that the asset was in ‘Average’ or Poor’ condition and the council has not allocated funding to return the asset to ‘Good’ or `Excellent’ condition, the administering agency will first make a determination as to whether there were reasonable grounds for not allocating such funding. Reasonable grounds would include consideration of consultation with and acceptance by the community of a lower asset condition and consequent level of service. If the grounds for not allocating funding were unreasonable, a grant to restore or replace the asset will not be given. If the grounds for not allocating funding were reasonable, any grant that is eventually given to restore or replace the asset will be reduced by the amount that would have been required to bring the asset to `Good’ condition. This amount will be determined by agreement between the administering agency and the council. If agreement cannot be reached, then an independent and appropriately qualified third party will be selected by the administering agency and engaged at council’s expense to provide an estimate.
For the period up to 30 June 2016, if a Council is unable to provide the documents listed above, it will be given an opportunity to provide other evidence about the pre-disaster condition of the asset (e.g. via photos, video footage or witness testimony). If such evidence is presented, the General Manager of the council must attest to the veracity of the evidence. If such evidence cannot be provided, then a grant to restore or replace the asset will not be given.
In situations where the cost of damage to the asset has been exacerbated by pre-existing damage or poor condition, any grant that may eventually be given to restore or replace the asset will also be reduced by the additional cost of damage that is attributable to the pre-existing damage or poor condition.
Insurance and self-help
Assistance is not to supplant or operate as a disincentive for self-help by way of either commercial insurance or appropriate strategies of disaster mitigation and asset maintenance and planning. Councils are expected to take out prudent insurance cover and assistance given under the Natural Disaster Relief and Recovery Arrangements is net of any insurance recoveries, including insurance excess. Future increases in insurance premiums brought about by council claiming against their existing policy or policies for a particular disaster are not covered by the Natural Disaster Relief Arrangement program guidelines.
Damage to any asset must be directly attributed to the declared disaster event and should not include normal maintenance operations, particularly for those assets which were in a poorly maintained state at the time of the disaster. Council may be required to supply records of maintenance on items and assets in question.
Insurance and insurance excess is not covered. Council must claim on insurance where available for any damaged item. The financial assistance will cover the gap or difference between the insurance payout (including the insurance excess) and the total cost to restore the item.
NDRRA Cover = Cost to restore item – (Insurance claim + Insurance excess)
Restoration of damage to uninsured council assets will be considered. However claims relating to items that could reasonably be expected to be insured, such as major council buildings, may be disallowed as financial assistance is not to take the place of normal insurances.
Assistance is provided to councils to restore a public asset to the equivalent of its pre-disaster standard, subject to current planning and developmental controls and building standards.
Council trading undertakings that recover less than 50% of their costs may be eligible for financial assistance. Councils are to provide Public Works Advisory with statements regarding: a trading undertaking’s production and recovery costs, the extent council has recourse to reimbursement via any lease/rental agreement, and relevant insurance policies.
Eligible public trading undertakings include local government bodies or other bodies which provide community, social or economic service free of charge outside the normal market mechanism.
However, it excludes a public financial undertaking which is primarily engaged in financial transactions in the market involving the incurring of liabilities and the acquisition of financial assets. It also excludes a public trading undertaking which is permanently engaged in the production of goods and services for sale in the market with the intention of recovering all or a significant proportion of its operating costs.
Claims relating to crown reserves that are entrusted to councils should be referred to Crown Lands who has responsibility for managing financial assistance relating to these areas.