Asset Management - A Strategic Corporate Objective For Campbelltown City Council

IPWEA NSW Division Annual Conference 2005

ASSET MANAGEMENT - A STRATEGIC CORPORATE OBJECTIVE FOR CAMPBELLTOWN CITY COUNCIL

Garry Mitchell [email protected] Asset and Supply Manager, Campbelltown City Council, NSW, Australia

Paper Summary

The paper provides information on an approach by Campbelltown City Council towards managing and raising the importance of asset management as a corporate objective of Senior Management and the Elected Members of Council.

Campbelltown City Council embarked on this journey in 2001, which focused on the development of a policy towards centralising asset management functions. This activity highlighted a the need to adopt a system that would provide a central asset register, asset value, condition assessment standards, continuous review, long-term financial, integration to corporate strategies and systems across all asset types as a total asset management system.

Introduction

Local, State and Federal Governments have inconsistent approaches to asset management and in many cases it is left to the individual government authority to adopt an approach to asset management that meets their requirements.

In 2000, Campbelltown City Council was facing the same dilemma regarding the management of its assets. The asset types were segmented, under different software systems, condition assessment practices were inconsistent, accuracy of information was questionable, no prioritisation of funding, and budgets were historically based.

The paper identifies important elements that Campbelltown City Council considered in elevating Asset Management as a corporate objective. These are:

 Asset Management Culture within the organisation  Asset Management Project Approach  Objectives, Action Plans, Performance Measures and Responsibilities  Assets Standards  Assessment to Levels of Service  Campbelltown Levels of Service Examples  Asset System Selection  Asset System  Benefits of a Corporate Asset Management System  Summary

Campbelltown City Council's Attitudinal Culture Change

During 2001, Campbelltown City Council management acknowledged that it needed to focus on an asset system therefore it elected to form a Asset Management Taskforce that included nine representatives from areas within Council. Taskforce representation included staff from Council's Senior Executive Management group as well as prominent users of Council's assets.

The charter of the Taskforce was to implement a Total Asset Management system, which would provide accurate information on Councils assets for now and into the future.

Campbelltown City Council had also embarked on a variety of community consultation processes, which emphasised the concern of the community that condition of Council's assets would be maintained.

Asset Management Project

The corporate approach to Council's Asset Management project was:-

 Outcomes of 2025 Vision, Community Consultations, and existing Management Plans relative to Council's Assets  Identify Structure and Generic Asset systems  System Selection, Design, Implementation and Integration  Data Collection and Valuations  Identify Council’s Asset Standards  Apply Asset Condition Assessment  Produce Financial Impacts Against Agreed Standards  Model Financial Impacts of Consequence of Deprival  Develop Asset Management Plan to Objectives and Corporate Goals Asset Management Plan is a key component of the Council planning process and will be linked with the following documents.

Strategic Plan Cultural Plan Financial Plan Social Plan

Objectives, Action Plans, Performance Measures and Responsibilities

To enable Council to proceed with its Total Asset Management plan, the taskforce developed objectives and then linked the objectives to actions, performance measures and responsibilities. An example of some of the objectives that Campbelltown City Council has adopted are:-

Objectives Action Plan Performance Responsible Measure Officer To effectively manage a Review Levels of Levels of Services Assets Manager, level of service and Service, Standards for for each category Director City condition for Council’s all asset categories in of asset should be Works, Asset infrastructure assets. conjunction with available Management Task community expectations, Force. funding availability. To minimise ongoing Review Processes and Two reviews to be Asset Manager, replacement and procedures twice a year undertaken each Assets Coordinator maintenance costs. so as to introduce financial year. improvements. To determine future cash Whole of life Cycle Life Cycle Assets flows requirements for approach should be Modelling to be Coordinator, replacement and considered to determine completed prior to Manager Assets, rehabilitation of budget budget Manager Finance. infrastructure assets determination Process.

To adopt appropriate Establish prioritised Provision of a Assets Specialists, renewal and maintenance maintenance programs prioritised Assets Coordinator programs to maintain the for all categories of maintenance low life cycle costs for the assets program. communities. To maintain infrastructure Prepare project wise Issuing project Assets assets at all times in briefs and tender specific contracts Coordinator, accordance with adopted documents for approved rather than Annual Works Contract maintenance rules and program maintenance. contracts Officer. procedures to maximise Council’s maintenance dollars.

To develop rational and Develop long-term asset Strategy and Policy Assets Manager, realistic strategies for management Strategies available by the Asset community assets to using Conquest data for end of 2004-05. Management achieve maximum value asset rationalisation Taskforce, from the infrastructure Executive, Elected assets Members

Assets Standards It is important that Council's elected members have reassurance that asset maintenance and refurbishment activities are linked to accredited standards for the purposes of assessment and quality.

Standards adopted by Campbelltown City Council are:-

Asset Type Council Standard Roads Pavement Condition Index using SMEC System to ARRB and RTA specifications Buildings Department of Public Works and Conquest Asset Management System Drainage Condition Assessment based on using Sydney Water and CCTV inspection Parks and Sporting Fields Condition Assessment to Ausspec standard and Conquest Asset Management system Bridges ARRB and AustRoads specifications using Bridge Assyt Condition assessment system Fleet and Plant IPWEA Fleet and Plant Management system incorporated into Conquest asset management system Signs Pavement Condition Index using SMEC System to ARRB and RTA specifications Kerb and Gutter Condition Assessment to Ausspec standard and Conquest Asset Management system Footpath Condition Assessment to Ausspec standard and Conquest Asset Management system

Assessment to Levels of Service Council has determined that within it's "Standards" there are levels of service that have been accepted by the elected members as representatives of the community. These levels of service have been generated through the consultative process such as the 2025 vision, the development of Council's Corporate Strategic Plan and Social Plan as mentioned previously.

A key objective of asset management is to match the level of service provided by the asset, with customer expectations. This enables the relationship between the level of service and cost of the service to be determined. This level and cost of service can be evaluated in consultation with the community and stakeholders to determine the optimum level of service they are prepared to commit to expenditure. Defined levels of service can then be used to: 1. Inform the public of the proposed level of service to be offered 2. Develop AM strategies to deliver the required level of service 3. Measure performance against these defined levels of service 4. Identify the costs and benefits of the service offered 5. Enable customers to assess suitability, affordability and equity of the services offered

Current levels of services may not entirely meet customer expectations in terms of cost and/or quality. However, it is important to begin the process of documenting the current levels of service. As further information becomes available on customer expectations and costs, asset management strategies and plans can be altered and adjusted.

Infrastructure assets within the municipality have different levels of service requirements. The current service levels (for routine maintenance) and agreed standards are those adopted after the most recent Best Value review of the service. Budgetary constraints often determine the optimum level of service in relation to maintenance and rehabilitation works.

Council Levels of Service Examples

Road Network Assets (Road Pavement)

For the purpose of summarising the road pavement condition for Council's consideration and agreement the SMEC’s Pavement Condition Index (PCI) has been used. Up to sixty Councils use this system to access road pavement condition that defines the rehabilitation treatment to RTA or ARRB standards

This system provides a scale of 0 to 10 with 10 representing a pavement in excellent condition and 0 representing a pavement in a failed condition. In this paper, road sections have been categorised in terms of PCI as follows:

Poor Category Roads with PCI less than or equal to 4.0 Fair Category Roads with PCI greater than 4.0 but less than or equal to 7.9 Good Category Roads with PCI greater than 7.9 but less than or equal to 10

Council has accepted a PCI of 7.0 therefore on average Campbelltown City Road Pavement condition would be rated as "Fair". The average network PCI is 6.71 Fair.

Council's Asset management database has recently been linked with a financial modelling tool for use with asset types like footpaths, bridges, kerb & gutter, storm water pipes for future years based on current condition, useful life and expenditure level. The system calculates average condition on the basis of condition score.

Building and Facilities

Current standards and desired levels of service provided by each asset type are tabulated below.

Category of Building Standard (DPWS) A Exceptional As New (Council Chambers) B High Quality (Council Civic Building) C Medium Quality (Council Hall) D Low Quality (Council Toilet Amenity Block) E Mothball (Demolition or (Removal)

Assessment Priority Rating Service Level 1 OH & S Related (Must Fund in Budget) 2 High Risk Business Affecting (Must Fund in Budget) 3 Asset Refurbishment (to agreed Standard ) 4 Low Risk (Only Consider if Funding Available) 5 No action(Consider only if any OH & S issues for funding)

Eg Sampling of buildings

Facility Required Number of Number Number of NOTES Name Standard Facilities of Facilities Facilities Below Meeting Required Required Standard Standard All Civic Centre buildings except the Disabled Resource Centre meet Civic Centre C 4 3 1 required standard Ingleburn BHC meets required standard however Campbelltown & Baby Health Macquarie Fields centres are showing Centres B 3 1 2 signs of age and deterioration

Important Elements of Asset System Campbelltown City Council undertook an assessment of many asset systems with the aim of selecting a program that provided elements which were considered critical for the development of Campbelltown City Council's Asset Management are as follows: -  Asset Register  Flexibility for Self Design  High Benefit Cost Ratio  Ease of Use  Prioritisation Capability  Centralisation of Data  Condition Weighting  Financial Modelling Over Time

Asset System

Benefits of a Centralised Corporate Asset Management System

Having selecting the appropriate asset management system, Campbelltown City Council have experienced the following benefits:-

 Asset Information Under One System  Minimisation of System Support  Complete Condition Assessment and Review Process  Prioritise Funding over all Asset Categories  Location and Condition based Assets Reporting  Minimised Training and Implementation  Integration to other Corporate Systems (SQL Server)  Work Order Systems used across all Assets  Better Legislative Reporting (AAS27, 428 (d))  Added Value Functionality (eg. IT, Security, Electrical Tagging, Artworks)  Better Risk Management  Maintenance Prediction on agreed Standards  Assist Determination of Asset Stock (both new and disposal)  System can be Audited and Verified  Provide “What If” Scenarios for Asset considerations

Conclusion

Assets are extensive and complex. Effective management with a focus on ongoing continuous improvement requires an appropriate level of skilled and qualified resources with a corporate focus.

Future resource management should include recruitment and training of appropriate staff, whole of life approach to asset cost, asset rationalisation programs, asset system enhancements and the utilisation of technology.

This corporate approach will need to be reviewed at regular intervals and take into consideration the effects of legislative requirements, other corporate system implementations, as well as the ongoing development of Council polices directly related to the management of assets in a changing and aging community.

Correct approach at a corporate level that considers asset management elements such as outlined in this paper will assist Councils in meeting their objectives and provide an effective corporate asset management system.

References

1. International Asset Management Manual 2. Campbelltown City Council Asset Management Plan 3. Asset Management Plan for Road Assets, Bankstown City Council. 4. Facilities Maintenance Planning, Advanced Asset Solutions. 5. Local Government Asset Accounting Manual 6. Local Roads Bridge Management Manual

Author Biography

Garry Mitchell Asset Manager for Campbelltown City Council, responsible for Asset, Contract, Fleet and Supply management functions. Major role is to provide asset management activities across all asset types covering an asset base of approximately $600M. Occupied the position for a period of three and half years. Main responsibility of employment with Campbelltown City Council was to implement an centralised Asset Management section. Have formal Qualifications in Logistics and Materials Management. Previous experience includes Australian and Asia Pacific logistics management positions with AT &T, Lucent Technologies and Contract management positions with NSW Supply Department, now known as the Department of Commerce .

Postal Address: Campbelltown City Council, PO Box 57, Campbelltown NSW 2560

Tel: 02 46454664 Fax: 02 46454381 Mobile: 0407298795 E-mail: [email protected] Website: www.campbelltown.nsw.gov.au