Asset Management Team March 2012

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1 March 2012

2 1 SECTION ONE EXECUTIVE SUMMARY SECTION TWO PENINSULA WAY BEST PRACTICE PURPOSE & METHODOLOGY SECTION THREE FINDINGS MORNINGTON PENINSULA SHIRE ASSET MANAGEMENT TEAM Overview & Purpose Shire Strategic Plan Implications Legislation Accounting Standards Team Structure s Operating Budget SERVICE PROFILE SWOT Analysis Best Practice Asset Management Sustainable Infrastructure Asset Management Policy Asset Management Principles Asset Management Framework RESPONSIVENESS TO THE COMMUNITY Community Benefits of Best Practice Asset Management KEY ACHIEVEMENTS & SUCCESSES LINES OF BUSINESS Asset Management System Asset Valuations Co-ordinate the Development of Asset Management Plans Collate Data on the Condition of Assets Developing Asset Management Processes for Emerging SLR Issues Ensuring Compliance with SLR contract Pavement Performance A Framework for the Processes, Documentation & Specifications of Asset Data Supply GIS System Asset Display Identify Shire Assets Reconciliation of Capital Works Accounts for Contracts Reporting Review of Useful Life of Assets Validation of Assets Page 2 of 86

3 3.6 PERFORMANCE MEASURES AND BENCHMARKING CONSULTATION Internal Stakeholder Consultation SECTION FOUR OUTCOMES CONTINUOUS IMPROVEMENT PLAN SECTION FIVE APPENDICES APPENDIX 1 NATIONAL FRAMEWORK CORE COMPETENCY REPORT CARD APPENDIX 2 NATIONAL FRAMEWORK CORE COMPETENCY REPORT CARD APPENDIX 3 INTERNAL STAKEHOLDERS APPENDIX 4 INTERNAL CONSULTATION FEEDBACK SHEET APPENDIX 5 INTERNAL CONSULTATION FEEDBACK RESULTS APPENDIX 6 POTENTIAL IMPROVEMENTS REFERENCES LEGISLATION, REGULATIONS AND CODES OF PRACTICE MPSC DOCUMENTS PUBLICATIONS Page 3 of 86

4 1 SECTION ONE EXECUTIVE SUMMARY The Asset Management team is a part of the Infrastructure Unit and is located in Rosebud. The purpose of the team is to manage the Shires infrastructure asset portfolio including the management of data and information relating to $1.5 billion of Shire infrastructure assets to ensure accurate financial modelling (predictions) supporting sustainable and cost efficient management. The Asset Management team underwent a Best Practice review to examine and improve its services as well as its overall performance during The review involved all team members analysing service delivery and work outputs, their alignment with the Shire Strategic Plan and responsiveness to both organisational and community needs. It also involved comparing the team s service delivery with Best Practice Asset Management, internal consultation and benchmarking with other municipalities. The review resulted in a Continuous Improvement Plan (CIP) being developed which comprises seven improvement initiatives and respective strategies for completion, timelines and responsible officers. The CIP will be incorporated into the Infrastructure Strategy and business plans and its progress reported through the monthly reporting process. Page 4 of 86

5 2 SECTION TWO PENINSULA WAY BEST PRACTICE 2.1 PURPOSE & METHODOLOGY The is a strategically focused yet community-responsive and flexible way of functioning, tailored to the needs and expectations of the Mornington Peninsula and its diverse communities. The Best Practice is consistent with the Mornington Peninsula Shire commitment to do everything we do the best way it can be done. The Best Practice aims to continuously examine and improve all services delivered by, or on behalf of the Shire, as well as overall organisational performance. An integral part of the Best Practice is the value adding program review process which is completed by team members who are directly involved in the service delivery. The Best Practice review of the Asset Management team involved all team members analysing service delivery and work outputs and their alignment with the Shire Strategic Plan, performance measures and responsiveness to community needs. It also involved internal consultation and benchmarking with other municipalities. Throughout the review a Continuous Improvement Plan (CIP) was developed which comprises improvement initiatives and respective strategies for completion, identification of responsibilities and timelines. The CIP will be incorporated into the Infrastructure Strategy and business plans and its progress reported through the monthly reporting process. Page 5 of 86

6 3 SECTION THREE FINDINGS 3.1 MORNINGTON PENINSULA SHIRE ASSET MANAGEMENT TEAM Overview & Purpose The Asset Management team is a part of the Infrastructure Strategy unit and is located at the Shires Rosebud office. The purpose of the team is to manage the Shires infrastructure asset portfolio including the management of data and information relating to $1.5 billion of Shire infrastructure assets to ensure accurate financial modelling (predictions) supporting sustainable and cost efficient management. Shire Infrastructure Assets are grouped into four major classes as follows: Roads 1,700 km Drains 1,250 km Buildings 600 No. Other Infrastructure Other infrastructure includes most Shire assets within its 1,730 ha of parks and open space, some foreshore assets, waste management assets and some road assets. Examples of other infrastructure assets include: Barbecues Basketball courts Bike racks Bins Bollards Bus shelters Fences Memorials Netball courts Seats Signs Stairs Street lights (non-standard) Tables Tennis courts Watering systems Page 6 of 86

7 3.1.2 Shire Strategic Plan Implications The Asset Management team supports the achievement of the following Shire Strategic Plan goals, outcomes and strategies: Goal 3 - Creating safe, healthy and engaged communities Outcome 3.3 Accessible, valued and well utilised community resources To develop and manage community facilities and spaces according to community needs and values To effectively manage and maintain our road and path network To prioritise investment in maintenance and refurbishment of community buildings to meet agreed service levels. Goal 5 - Being responsive, accountable and forward looking Outcome 5.1 Quality service To provide high-quality service outcomes by ensuring that Council processes and systems are effective and efficient To encourage innovation and continuous improvement to meet new and emerging needs Implement and support technology and communication systems to deliver services more efficiently and provide improved public access to Council information. Outcome 5.5 Responsible financial management To sustainably manage the Council s finances and resources To effectively develop and manage the capital works program. Page 7 of 86

8 3.1.3 Legislation Council has to meet many legislative requirements relating to Asset Management including: Legislation Local Government Act 1989 Requirement The primary objective of a Council is to endeavour to achieve the best outcomes for the local community having regard to the long term and cumulative effects of decisions. In seeking to achieve its primary objective, a Council must have regard to a number of facilitating objectives, including to promote the social, economic and environmental viability and sustainability of the Shire; to ensure that resources are used efficiently and effectively and services are provided in accordance with the Best Value Principles to best meet the needs of the local community; to improve the overall quality of life of people in the local community; to ensure that services and facilities provided by the Council are accessible and equitable The role of a Council includes: maintaining the viability of the Council by ensuring that resources are managed in a responsible and accountable manner. [LGA, s. 3D(2)(c)] The functions of a Council include: planning for and providing services and facilities for the local community; [LGA, s. 3E(1)(b)] providing and maintaining community infrastructure in the Shire. [LGA, s. 3E(1)(c)] A Council must implement the principles of sound financial management. The principles of sound financial management are that a Council must manage financial risks faced by the Council prudently, having regard to economic circumstances. [LGA, s. 136(2)(a)] Aboriginal Heritage Act 2006 The risks include risks relating to the management and maintenance of assets; [LGA, s. 136(3)(c)] A Council has a financial management duty to do all things necessary to ensure that adequate control is maintained over assets owned by or in the custody of the Council; [LGA, s. 140(2)(d)] A Council must comply with the Best Value Principles that include ensuring that all services provided by a Council are responsive to the needs of its community. [LGA, s. 208B(b)] achieving continuous improvement in the provision of services for its community; [LGA, s. 208B(d)] The main purpose of this Act is to provide for the protection of Aboriginal cultural heritage in Victoria [AHA, s. 1.] Page 8 of 86

9 Legislation Electricity Safety Act 1998 Flora and Fauna Guarantee Act 1988 Occupational Health and Safety Act 2004 Public Health and Wellbeing Act 2008 Rail Safety Act 2006 Requirement Some of the purposes of this Act are to address the safety of electricity of electricity supply and the reliability and security of electricity supply. The Act includes provisions relating to bushfire mitigation requirements for certain operators and electric line clearance. [ESA, Part 8.] The purpose of this Act is to establish a legal and administrative structure to enable and promote the conservation of Victoria's native flora and fauna and to provide for a choice of procedures which can be used for the conservation, management or control of flora and fauna and the management of potentially threatening processes. [FFGA, s. 1.] The objects of this Act are (a) to secure the health, safety and welfare of employees and other persons at work; and (b) to eliminate, at the source, risks to the health, safety or welfare of employees and other persons at work; and (c) to ensure that the health and safety of members of the public is not placed at risk by the conduct of undertakings by employers and self-employed persons; and (d) to provide for the involvement of employees, employers, and organisations representing those persons, in the formulation and implementation of health, safety and welfare standards having regard to the principles of health and safety protection. [OHSA, s. 2(1).] The purpose of this Act is to promote and protect public health and wellbeing in Victoria. [PHWA, s. 1.] The main purpose of this Act is to provide for safe rail operations. [RSA, s. 1.] A rail operator must develop and implement an interface co-ordination plan in relation to any potential risks to the safety of the rail operations. Interface co-ordination plan means a plan developed by a rail operator that identifies and specifies the potential risks to the safety of rail operations that may be contributed by the activities of another person Page 9 of 86

10 Legislation Road Management Act 2004 Requirement The primary object of this Act is to establish a coordinated management system that will promote safe and efficient road networks at State and local levels and the responsible use of road reserves for other legitimate purposes. The Act establishes a new statutory framework for the management of the road network. sets out certain rights and duties of road users. establishes the general principles which apply to road management. provides for the role, functions and powers of a road authority. provides for the making of Codes of Practice to provide practical guidance in relation to road management. facilitates the making of road management plans. enables the declaration and discontinuance of roads. provides a process for the declaration and classification of roads and the allocation of management responsibility for roads. provides for a road authority to keep a register of public roads. provides for the construction, inspection, maintenance and repair of public roads. sets out the road management functions of road authorities. sets out the road management functions of infrastructure managers and works managers in providing infrastructure or conducting works. provides for issues relating to civil liability arising out of road management. The Act facilitates the making of a Road Management Plan (RMP) by a Council in its role as a Road Authority. [RMA, s. 49] Conformance with the RMP provides the Council with a policy defence in the event of a legal challenge. [RMA, s. 103] The RMP is an operational document but needs to be supported by sound tactical Asset Management planning. Road Safety Act 1986 The purposes of this Act include to provide for safe, efficient and equitable road use; and to set out the general obligations of road users in relation to responsible road use; and to ensure the equitable distribution within the community of the costs of road use. [RSA, s. 1] A person who drives a motor vehicle on a highway must drive in a safe manner having regard to all the relevant factors, including (without limiting the generality) the physical characteristics of the road; prevailing weather conditions; level of visibility; condition of the motor vehicle; prevailing traffic conditions; relevant road laws and advisory signs; physical and mental condition of the driver. [RSA, s. 17A(1)] Page 10 of 86

11 Legislation Transport Integration Act 2010 Requirement A road user must have regard to the rights of the community and infrastructure managers in relation to road infrastructure and non-road infrastructure on the road reserve and take reasonable care to avoid any conduct that may damage road infrastructure and non-road infrastructure on the road reserve. [RSA, s. 17A(3)(b)] The Act provides a common policy framework for use by state and local government bodies when making decisions about the transport system. The Act ensures that transport agencies work together towards an integrated and sustainable transport system. [TIA, s. 6.] Water Act 1989 Some of the purposes of this Act are (b) to provide for the integrated management of all elements of the terrestrial phase of the water cycle. (j) to provide formal means for the protection and enhancement of the environmental qualities of waterways and their in-stream uses. Melbourne Water has drainage and flood management powers and functions and can declare flood levels, flood areas, building lines and control developments adjacent to waterways. [WA, Part 10] Wrongs Act 1958 One of the purposes of this Act is to address liability of public authorities. A public authority s duty of care is limited by the financial and other resources available to the authority. [WA, Part XII] Page 11 of 86

12 3.1.4 Accounting Standards Council has to comply with the accounting standards relating to Asset Management including: Standard Australian Accounting Standard AASB 116 Property, Plant and Equipment Australian Accounting Standard AASB 136 Impairment of Assets Requirement The objective of this Accounting Standard is to prescribe the accounting treatments for property, plant and equipment. Its purpose is to enable users of financial reports to discern information about the entity s investment in its property, plant and equipment and the changes is such investment. The principal issues in accounting for property, plant and equipment are the recognition of the assets, the determination of their carrying amounts and the depreciation charges and impairment losses to be recognised in relation to them. [AASB 116, cl. 1.] Infrastructure assets are classed as items of property, plant and equipment under accounting frameworks and standards. The objective of this Accounting Standard is to prescribe the procedures that an entity applies to ensure that its assets are carried at no more than their recoverable amount. An asset is carried at more than its recoverable amount if its carrying amount exceeds the amount to be recovered through use or sale of the asset. If this is the case, the asset is described as impaired and the Standard requires the entity to recognise an impairment loss. [AASB 136, cl. 1.] Page 12 of 86

13 3.1.5 Team Structure Colin Manage the AM Team incl budget. Develop AM policies, strategies & plans. Asset renewal analysis. Risk management & performance improvement. Provide advice on AM to Crs & snr management. Development & deployment of AM Team. Davey John Peter Anne Lauren Allan Alesha AM planning. Risk management & performance improvement. Asset knowledge management. Coordinate asset condition assessment & analysis. AM procedures. Data exchange with service providers. Design, implement and maintain the AM system software, documentation & training. Integration of AM system & GIS. Technical reporting. Technical & system support. Training of AM system users. SLR info exchange. Identify & develop processes to enable achievement of SLR contract objectives. Monitor road condition, PMS operation & audit SLR pave performance. Road seal revaluations and road assets remaining life. Assist in Road Policy development. Collect, verify and enter capital works projects merging data, reconciling there financial accounts, asset links between KMS & Geomedia for assets. Collect and enter recognised transport asset data as requested. Assist with the drainage verification project. Special projects. Prepare cost data for infrastructure assets. Annual revaluation of all infrastructure assets. Supply data to meet statutory requirements (MAV/DPCD). Collect, verify and enter contributed asset data. Facilitate the implementation of all A- Spec modules. Work towards completing the follow-up to drainage base map comparison. Merge culvert valuation tool into KMS. Provide facility to capture attribute data for open drains and input into KMS. Identify number of pits that have been validated, but no drawings exist. Collect, verify process and enter asset data into KMS and Geomedia. Integrate asset data between systems Assist with the provision of valuations for infrastructure assets. Provide department assistance for recording data. Page 13 of 86

14 3.1.6 s Operating Budget Salaries, Wages, Workcover 594,000 External Consultants 28,000 Software 21,000 Other 15,000 Recharges 66,000 TOTAL $728,000 Page 14 of 86

15 3.2 SERVICE PROFILE SWOT Analysis The team carried out a SWOT Analysis and identified a number of major strengths including experienced team members with extensive knowledge that are responsive to stakeholders and receptive to the implementation of new technology. A summary of the analysis is shown below: Strengths Experience Knowledge (including local) People Skills Gender Balance (M : F) Good Teamwork Dependable Sense of pride in our work. Hard Working Problem Solving Skills Innovative Approachable Responsive Adaptive to new technologies. Good Team Leader Mix of Ages Attention to detail Documenting some processes. Addressing issues previously deemed too difficult Opportunities CashFlow 5 National Asset Management Framework Review of Infrastructure Maintenance Contracts CIS Workflow Investigate / embrace new technology for data collection - including both hardware (visibility, processing speed & memory) and software (GPS accuracy, data collection validation). R & D (we probably have more data in some areas than many other authorities) Weaknesses Specialization Documentation - Processes GIS Specialist Knowledge Critical Data Maintenance Reporting Capabilities Knowing the Unknowable Tapping Prime Source Data Identifying Asset Ownership (i.e. Melbourne Water, VicRoads etc.) Complexity of Asset Management System (KMS) Succession Planning Attracting and retaining staff Threats Reliant on other Teams / Units / Contractors Asset Renewal Modelling: Financial categorization for current renewals. Continual annual increase in requirements and expectations Industry shortage of asset management/engineering/gis experience Unachievable increases in reactive requirements Lack of understanding by others of complexities of Asset Management Page 15 of 86

16 3.2.2 Best Practice Asset Management The team, working with other shire departments, is continuously improving its asset management practices, in particular, utilising a life cycle approach where both the cost to design and construct assets are taken into consideration by Council as well as the costs to finance, maintain and manage those assets. In addition to this, depreciation costs are allowed for. The Shire s Asset Management practices always have service outcomes as a primary focus, rather than just physical asset maintenance and renewal. In applying a life cycle approach to asset management at MPS, cost effective long term management strategies are developed that include a defined level of service which is able to be both monitored and reported on. In endeavouring to ensure the sustainable use of both financial and physical resources, it is also critical that the impact of growth and demand of assets is understood and planned for as are risks associated with the failure of assets. At MPSC a Sustainable Infrastructure Asset Management Policy has been adopted that reflects best practice. The Policy demonstrates our Asset Management principles and outlines an Asset Management Framework. Page 16 of 86

17 3.2.3 Sustainable Infrastructure Asset Management Policy Policy No. 10/27 The MPS Sustainable Infrastructure Asset Management Policy reinforces the whole of Council responsibility for the sustainable management of infrastructure assets. The policy was adopted by Council in July, 2010 and provides organisational wide shire officers with the key asset management principles and an Asset Management framework (both detailed below) Asset Management Principles In pursuit of Infrastructure Asset Management best practice, the following key principles apply in relation to AM at the Mornington Peninsula Shire: ensuring service delivery needs form the basis of asset management; integrating asset management with corporate, financial, business and budgetary planning; informed decision-making, incorporating a life-cycle approach to asset management; establishing accountability and responsibility for asset condition, use and performance; and pursuing sustainability, providing for present needs while sustaining resources for future generations. Page 17 of 86

18 3.2.5 Asset Management Framework The framework shown below outlines the integral relationships between key asset management documents and Council planning documents: Asset Management Policy Shire Strategic Plan Asset Management Strategy (currently under review) Asset Management Plans (refer Key Achievements and Successes) Strategic Resource Plan (strong links to AM Plans) ASSET MANAGEMENT PLANNING Asset Management Philosophy & Framework Service Delivery Knowledge LEGAL AND STAKEHOLDER REQUIREMENTS AND EXPECTATIONS MPS STRATEGIC PLAN Vision, Mission, Objectives, Levels of Service, Business Policies, Risk Management ASSET MANAGEMENT POLICY ASSET MANAGEMENT STRATEGY Objectives, Level of Service Targets and Plans ASSET MANAGEMENT PLANS Services and Service Levels to be provided, funds required to provide services OPERATIONAL PLANS Services delivery in accordance with asset management plans. Asset solutions operate, maintain, renew, develop, retire. Non-asset solutions partnerships, demand management, insurance, failure management. KNOWLEDGE MANAGEMENT Asset data and information systems STRATEGIC RESOURCE PLAN Monitoring and Review Continual Improvement Operational Planning Tactical Planning Strategic Planning Page 18 of 86

19 Council Meeting 3.3 RESPONSIVENESS TO THE COMMUNITY Community Benefits of Best Practice Asset Management Effective management of Council s infrastructure networks and ensuring that we have in place good quality assets benefits Council and the community in a number of ways: Financial savings to Council Infrastructure networks provide the platform for economic and social development Infrastructure and property assets increasingly meet recreational and other needs of the community Good quality infrastructure is the cornerstone of public health and safety Good quality infrastructure mitigates adverse environmental impacts of society Asset management practices advance the sustainability of infrastructure services Benchmarking the condition and performance of assets promotes innovation and efficiencies Our roads and paths provide transport services Our drainage system mitigates flooding and drains land Our buildings provide the community with places to meet, obtain information, access community resources and enjoy arts and cultural activities Our parks and open spaces provide recreational services. Page 19 of 86

20 3.4 KEY ACHIEVEMENTS & SUCCESSES Development of manuals to assist team members and contractors to provide and/or input correct asset information (example shown below). o The Fence Catalogue was developed as an aid to assist others to prepare condition assessment manuals Survey of roads on steep terrain in rural areas. o To comply with new requirements of the Victorian Grants Commission 20 year asset renewal expenditure program updated annually. o To link with Shire s Long Term Financial Plan. Page 20 of 86

21 Completion of drainage base map comparison. o To eliminate duplication of assets caused by amalgamation of drainage records from a variety of sources. Received positive feedback from external auditor o Preventing qualification by auditor and possibility of being named in Parliament. Capital Works Program (5 year back log eliminated). o Improving confidence in data recorded in AM System and shown on GIS. Adopted Sustainable Infrastructure Asset Management Policy. o Translates the Shire s broad strategic outcomes and plans into a policy framework that enables Council to deliver sustainable services that are underpinned by sound Asset Management practices. o Encourages the development and maintenance of a long-term financial plan based on a sound Asset Management Strategy and Asset Management Plans. o Promotes effective and efficient Asset Management processes and practices. Page 21 of 86

22 More defined structures for management of assets: o Asset Management Plan Template Providing consistency of Plans for various asset classes o Asset Catalogue Providing consistency of terms and definitions for various asset types. New Assets Form o Improving recording of asset ownership and liaison. Responded effectively to increased workload due to new developments. o Making records available in AM System and GIS in reduced timeframes. Page 22 of 86

23 Reconciliation of building audit results and linking to GIS. o Improving management of building assets Collection and recording of kerb and channel condition data. o Assisting with calculation of useful lives of assets and developing maintenance and renewal programs Page 23 of 86

24 Collection and recording of footpath condition data. o Assisting with calculation of useful lives of assets and developing maintenance and renewal programs. Completion of draft Asset Management Plans for: Roads Drainage Parks & Open Space o o Improving the management of infrastructure assets by combining multi-disciplinary management techniques (technical and financial). Communicating information about the Shire s infrastructure assets. Page 24 of 86

25 3.5 LINES OF BUSINESS 1. Asset Management System Description: Ensure that the AM System meets the needs of the Shire. The critical AM needs are: Asset register to store the primary asset attributes (type, material, dimensions, quantity, construction date, value). Asset condition. Asset performance. Asset criticality. Asset maintenance records. Reporting Mechanisms Ensure current, accurate information on Shire infrastructure assets for reporting, auditing and estimating future costs to Council. Target Customer Group / Key Stakeholders: Community members All internal departments Alignment with the Shire Strategic Plan: To develop and manage community facilities and spaces according to community needs and values To effectively manage and maintain our road and path network To prioritise investment in maintenance and refurbishment of community buildings to meet agreed service levels To manage and renew existing infrastructure assets To provide high quality service outcomes by ensuring that council processes and systems are effective and efficient To encourage innovation and continuous improvements to meet new and emerging needs Implement and support technology and communication systems to deliver services more efficiently and provide improved public access to Council information To demonstrate good corporate and democratic governance in our operations To manage Council property assets. Page 25 of 86

26 5.3.3 To monitor and minimise our risk exposure To sustainably manage the Council's finances and resources To effectively develop and manage the Capital Works Program. Main activities: Identify information needs for core Shire functions. Consider the Shire s longer term information needs. Development of a standard approach to: Asset hierarchy Asset categories Asset identification (compatible with GIS). Condition and performance grading. Estimated useful lives Asset criticality. Financial management. Treatment options and costs. Predictive modelling. Integrate AM and corporate information systems. Provide adequate specialist support. Key Steps: Initial collection of data may involve Asset Management or service providers - depending on the source if the funding (e.g. Capital Works would involve AM staff whereas Ordered Works would involve service providers) Data is collected on mobile data collection platforms (such as PDA) and returned to AM where it is uploaded (in the case of new data) or the old data is audited, a history or audit record completed, and the data altered to reflect its present state (condition may have deteriorated, colour may have changed or item may have been updated) What has worked well: Mobile data collection (using ArcPad and PDAs) has made the collection of new data and auditing of existing data easier and more accurate. The latest snapshot of data deployed to the PDA ensures that the service provider or AM have current data to compare with and report on. Page 26 of 86

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