Asset Management in Integrated Planning and Reporting for Local Governments

Troy Daniels, Project ManagerDepartment of Local Government and Communities

Drivers of Local Government Reform in Western AustraliaLGAB Ensuring the

Future Sustainability of

Communities Report

recommendations (2006)

(2008)WALGA Systemic

Sustainability Study

LGPMC Nationally Consistent

Frameworks on Local Government

Sustainability (2009)

(2010) Reform Steering

Committee Report

Drivers of Local Government Reform in Western Australia

• Estimated local government asset renewal gap = $110 million per annum (Allan, 2012)

• Estimated local government infrastructure renewal backlog = $1.75 billion (Allan, 2012)

• Pressure on local government to increase fees, charges, rates and borrowing

Tackling Asset Management Reform• Integrated Planning and Reporting (IPR) Framework developed in

2010 • Changes to ‘Plan for the Future’ regulations gazetted August 2011• Responded to capacity challenges in the sector• Integrated approach to planning based on meaningful

engagement with the community on significant choices• De-emphasized the annual budget cycle• Recognised diversity of the sector• Enhanced opportunities to engage with other agencies

Asset Management Framework and Guidelines

• Aligns with interstate and international frameworks and asset management practice.

• Developed with the sector through Asset Management Working Group.

• Aims to enhance the sustainable management of local government assets by encouraging a ‘whole of life’ and ‘whole of organisation’ approach to asset management.

Implementing Integrated Planning

• Frameworks• Guidelines• Toolkits• Regulations• Advisory Standard• Website & e-bulletin• Workshops• Master classes

The Local Government Sector Responds

Asset Management Challenges To DateGENERAL GAPS

• IPR alignment

• Cross-organisational responsibility

• Performance measurement

• AM Strategy

• AM Policy

Internal Challenges

Data management Condition and useful life

Service levels O&M, renewal and replacement

strategies

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

64% 64%

55%

32%

N = 22

Asset Management Challenges To DateChallenge What local governments may require help with….

Data management Methods to maintain data appropriately. Methodologies for carrying out consistent asset condition surveys and defect identification. Processes for quantifying maintenance expenditure into reactive and planned maintenance. Processes for and assistance in ‘horizon planning’; capital works justification & prioritisation for

implementing investments in new assets.

Condition and useful life Collection and management of condition data. Robust processes for condition ratings and modelling.

Service levels Determining asset performance targets and current performance. Determining the current utilisation levels of assets and remaining capacity.

O&M, renewal and replacement strategies

Developing formalised process for O&M. Documenting an O&M strategy. Documenting the renewal and replacement strategy. Documenting the capital investment strategy.

The Future of Asset Management in WA

AM Plans Completed.Implementation of AM Improvement Strategies commences.Fair Value accounting adopted.Condition and useful life data collected and complete.

AM Plans Reviewed and renewed where appropriate.Capital investment strategies and decision making criteria set.Monitoring of AM practice commences (through NAF).

AM Improvement Strategies implemented.Data Management improves.Renewal and replacement strategies in place.

Service Levels agreed with community as part of SCP review and renewal.LGs have confidence in setting and assessing achievement against asset performance targets.LG AM Plans inform State funding decisions.

Renewal funding strategies established through LTFPs to address funding gaps .AM practice consistently improving.

2013 – 2015 2016 – 2018 2018 +

The Future of Asset Management in WATimeframe DLGC Activities

Short Term (12-18 months)

• Advice and support• Review of IPR frameworks and guidelines• Review and renewal of IPR Advisory Standard• Update of the Performance Management Framework• Asset management support for country local governments• Support for National Assessment Framework

Medium Term(2-4 years)

• Training for elected members• Asset management support for country local governments• Support for National Assessment Framework• Engagement with State Agencies

Long Term(5 years +)

• Ongoing advice and support• Engagement with State Agencies

Thank you Department of Local Government and Communities

Gordon Stephenson House140 William Street

PERTH WA 6000

GPO Box R1250 PERTH WA 6844

Telephone: (08) 6551 8700http://www.dlgc.wa.gov.au

Integrated Planning enquiries: integratedplanning@dlgc.wa.gov.au

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