Asset Management Strategy

Asset Management Strategy City of Stonnington April 2011 Odysseus-imc Pty Ltd

APPROVAL FUNCTION NAME DATE Checked by S. Muir 4 Mar 2011 Reviewed by T. Griffin 6 Mar 2011 Approved by S. Muir 4 April 2011 AMENDMENT RECORD. ISSUE AMENDMENT DESCRIPTION NAME DATE A Original Issue -Draft S. Muir 6 Mar 2011 B Final S. Muir 4 Apr 2011 DISTRIBUTION RECORD Maintained copies of this document are made available by the Responsible Manager. The details of the issue of each copy are recorded below for the particular copy and in the Project Document Register. When an update is issued, it is the responsibility of the holder to replace superseded material with the later issue. Superseded material should be marked "SUPERSEDED", or should be "DESTROYED", as appropriate. DOCUMENT NUMBER SCC0001 ISSUE B ISSUE DATE April 2011 CONTROL STATUS (Unmaintained if not indicated otherwise) This work is the property of the CoS and is protected by copyright. The work and information herein is confidential and may not be copied, used or disclosed except with the current written authority of and in a manner permitted by CoS. Odysseus-imc Pty Ltd

TABLE OF CONTENTS Corporate Context... 5 Introduction... 5 Corporate Strategy and Vision... 5 Asset Management Policy... 6 Asset Portfolio and Context... 6 Drivers for Asset Management... 6 Organisational Framework... 8 Key Stakeholders... 8 Operating Environment... 9 Corporate Relationships... 9 Asset Management... 11 Asset Management Overview... 11 Asset Management within CoS... 11 Step Program (National Asset Management Framework)... 13 National Framework Findings... 13 Future of Asset Management within Council... 15 Key Challenges... 15 Current Asset Management Initiatives... 15 Desired Future for CoS... 15 CoS s AM Strategies... 16 1. Implement the Operating Structure for AM... 16 2. Undertake Effective Decision Making... 16 3. Deliver Sustainable Services and Communities... 16 4. Establish Appropriate Data and Systems... 17 5. Achieve the Requirements of the National Framework... 17 Implementing this AM Strategy... 18 Asset Management Implementation Plan... 18 Improvement Activities... 19 Odysseus-imc Pty Ltd

Implementing the AM Strategy... 21 AM Steering Committee (AMSC)... 21 Manager Infrastructure Services... 21 Manager Finance... 22 Managers and Staff... 22 Capacity Building... 22 Change Management... 22 Recommendations... 23 Appendix A AM Improvement Plans Odysseus-imc Pty Ltd

CORPORATE CONTEXT INTRODUCTION The asset management (AM) strategy provides the City of Stonnington (CoS) with the actions necessary to improve its AM capabilities. The primary objective of this strategy is to provide a framework that assists the CoS to deliver sustainable and effective services. The strategy describes the core functional actions required to support the CoS s objectives and provides a framework for delivering efficient and effective services. The strategy has a five year outlook that accommodates the City s future AM direction, the stakeholders and the assets within the City. Above all, the strategy supports the business objectives of CoS. CORPORATE STRATEGY AND VISION The Corporate Vision for CoS is: Stonnington will be a place of community, individuality and business where an environment is created that fosters the hopes, wellbeing and aspirations of all people. CoS is committed to providing roads, drainage, parks and buildings along with high quality services that meet the needs of its community. Within our Council Plan CoS identifies the following Infrastructure and Service Delivery Goals: 1. Maintain and upgrade the infrastructure and services necessary for the seamless day to day operations of the city; 2. Celebrate the municipality s heritage and diverse buildings by balancing its existing character with complementary and sustainable developments; 3. Maintain the quality and enhance the use of our facilities, amenities and open space to encourage community participation and cater for the interests and needs of the whole community; 4. Identify and action community safety initiatives that address real and perceived safety issues; 5. Support Council and the community to move towards sustainable energy options by leadership and the adoption of environmental design practices; 6. Maintain and enhance the public realm to provide safe, accessible, usable, clean and attractive spaces and streetscapes; 7. Balance recreation and sporting use with sustainable environmental principles; 8. Support Council and the community to move towards sustainable energy options by leadership and the adoption of environmental design practices; 9. Use water conservation and drought management best practice principles to manage Council s natural assets in the public realm; 10. Manage and strengthen the local bio-diversity and protect and increase the flora and fauna of the natural and riparian environment; and 11. Understand the uniqueness of Stonnington s shopping strips to promote their attraction to a diverse community. CoS has a focus on the sustainability of its assets and intends to manage them through ongoing integrated strategic planning and review. This principle will determine the direction of asset management for all services and the implementation of the asset management plans and strategies. Odysseus-imc Pty Ltd 5

ASSET MANAGEMENT POLICY Sound asset management is required to effectively and efficiently manage Council s infrastructure to: Provide an asset base which is responsive to community s needs within the context of the Strategic Resource Plan by ensuring that o resources are dedicated to MEET COUNCILS asset renewal requirements as a priority; o the asset base is managed effectively, by focussing on asset renewal, rationalising underutilised assets and limiting asset expansion unless justified; Ensuring the services currently provided are available for future generations; Providing infrastructure in a condition that supports the services provided; and Managing locally while planning regionally. Asset Management is a key element of council s long term sustainable financial plan. ASSET PORTFOLIO AND CONTEXT CoS has responsibility for a portfolio of assets with a replacement value of approximately $1.374 billion. The assets managed by Council include: Buildings such as town halls, aquatic centre s, kindergartens etc.; Roads such as pavements, footpaths, kerb and channel and road furniture; Bridges pedestrian and road; Parks and Recreation such as sports ovals, playgrounds, trees, park furniture, sports courts etc; and Drainage such as underground and over land. Other asset groups such as fleet and art work are also managed by CoS. The above list indicates the array of infrastructure that Council manages and has responsibility for. It is critical for the long-term sustainability of the assets that the CoS engages in practices that optimise the asset s useful lives for the benefit of CoS s community. DRIVERS FOR ASSET MANAGEMENT In addition to the assets, Council s operations are influenced by external drivers that establish, either directly or indirectly the performance requirements of the business from a service delivery perspective. These external drivers include the following: Extensive population growth within the City; Melbourne s 2030 Strategy; Funding the renewal gap; National framework; MAV Step program; DVC AM Performance Measures; State Legislation Road Management Act; Insurance premiums: influenced by Council being part of the STEP program; Accounting standards (Fair Value); OH&S Legislation; and Amended Disability Discrimination Act 1992. Odysseus-imc Pty Ltd 6

As well as external drivers, there are internal drivers within Council that influence the manner in which Council will operate as a business. These drivers result from a recognised need at various levels within the business. The internal drivers include: Need for a consistent and uniform approach to asset related decisions across the business; Connectivity between stakeholder requirements, service delivery and asset solutions; Competing funding requirements; Recognition of the need for long term planning and demonstrable sustainability; Performance of infrastructure; and Drive for efficiency without impacting on safety and reliability. Odysseus-imc Pty Ltd 7

ORGANISATIONAL FRAMEWORK KEY STAKEHOLDERS Council is responsible for the operations of the infrastructure and the management of the assets to ensure the delivery of services to its stakeholders. The key stakeholders of Council are: Government; Councillors; Local residents (community); Industrial and business operators; Emergency services; Enforcement agencies; Other Government Departments; Tourists and visitors to the area; Utilities; Insurers; Employees and volunteers; and Contractors and suppliers. The following table identifies perceived stakeholder requirements: STAKEHOLDER Government Councillors Community Visitors LIKELY EXPECTATIONS Well Managed Infrastructure, Transparency of information, Provide Service to the Community, Accountability Community needs are met, Sound financial management, Good governance Environment improvements e.g. Quality of life, Rural lifestyle, Equitable service provision, Value for money Availability of Services, Ease of access, Good ambience, Safe environment Utilities/Developers Regular business, Sound working relationship, Timely decisions, Simple processes Employees/Volunteers Contractors/Suppliers Insurers Businesses Continuity of Employment, Safe Working Environment, Sound relationship with management Continuity of Employment, Safe Working Environment, Sound working relationship with Council Demonstrated ability to capably manage risk Sound working relationship, Timely decisions, Efficient and Effective processes TABLE 1- STAKEHOLDER EXPECTATIONS Odysseus-imc Pty Ltd 8

OPERATING ENVIRONMENT CoS manages the City s assets with support from contractors to manage the assets and deliver the services required. As such, CoS has implemented an organisational structure to suit the current operations. The management lines are identified below. FIGURE 1 - ORGANISATION OPERATING STRUCTURE Contractors are used for the delivery of operations and maintenance services across Council. Areas in which contractors provide support are listed below: Building operations; Building maintenance; Street and road tree maintenance; Park structures inspections; CCTV inspections; Drain relining; and Bridge inspections. Council also commissions consultants to advise and support the operations on an as needed basis. CORPORATE RELATIONSHIPS For Council to effectively implement AM it needs to recognise the relationships between each of the services and implement processes to support them. The following table summarises the high level communications and inter-dependencies that need to be accommodated within CoS s asset management activities. Odysseus-imc Pty Ltd 9

SERVICES Finance Human Resources Marketing and Communications Information Technology Operations and Maintenance Internal Audit Committee Governance and Corporate Support Economic and Cultural Development Strategic Planning Planning and Development Infrastructure Services/Environment and Public Places Chapel off Chapel Social Development ACTIVITIES Coordinate with Finance to provide input into business planning. E.g. Provide finance with long term investment scenarios that demonstrate the trade offs between capital and maintenance. Assist in aligning infrastructure investment needs with long term financial plans. Coordinate with OD to ensure asset management training becomes an integral part of corporate training. Develop a skills matrix and co-ordinate AM training to close gaps in skill levels. Work with OD to ensure timing and type of AM training complements AM implementation. Coordinate with marketing to ensure that stakeholders are informed of the progress made with this strategy and the benefits obtained in implementing the strategy. Coordinate with IT to ensure that AM tools are supported, personnel are trained in the use of the tools, GIS is implemented to provide for the needs of staff involved in AM. Input infrastructure questions into customer surveys, obtain results of customer surveys, identify community needs and develop strategies to respond to demands. Provide support for daily operations and maintenance; obtain feedback from the service providers to input into strategy development and long term infrastructure planning. Coordinate with audit committee to ensure AM implementation is audited and outcomes reported. Implement an infrastructure risk framework aligned with the corporate risk framework; with the objective of Council committing resources to the completion of identified actions to support risk mitigation/control. Manages OH&S and workcover. Identify potential development and provide input into the infrastructure planning process. Provide high level input into the infrastructure planning process. Provide direct input into the planning and capital works programming process. Provide Council with the advice needed to ensure Council has sustainable services and infrastructure both now and in the future. Supports the activities undertaken and decisions made in regard to the Chapel off Chapel facility. Support the communities well being by providing and maintaining recreation, libraries, aged, children and family services facilities both now and in the future. Table 2 - Role of Asset Management in supporting Services Odysseus-imc Pty Ltd 10

ASSET MANAGEMENT ASSET MANAGEMENT OVERVIEW The CoS must ensure that it manages all assets on a lifecycle basis, with full knowledge of the social, environmental and financial costs, benefits and risks associated with the asset. The lifecycle model must give consideration to each phase of an asset s life from the planning phase through to disposal. This lifecycle model is illustrated below. FIGURE 2 - LIFECYCLE MANAGEMENT PHILOSOPHY Underpinning the above model is the use of risk management techniques to support decision making through each of the above phases. ASSET MANAGEMENT WITHIN COS Council commenced its participation in the MAV STEP program in 2003 in recognition of its current and future responsibility for the sustainable management of those assets operated and maintained on behalf of the community. The aim of the program is to assist Council in improving its overall asset management capabilities. Since 2004 Council has taken significant steps in this direction by implementing the following: Preparation of Asset Management Plans (AMPs) for key infrastructure assets; Ongoing participation and involvement in the MAV Asset Management Step Program to improve Council s overall performance and systems which support its strategic decision making; Continued use of the GIS for spatial data representation i.e. flooding overlay, defect recording; Continued active involvement in regional and local asset management forums and committees to share knowledge and identify trends and issues across the local government sector; and Good ongoing performance in delivering on road management commitments by meeting specific measures for Road Management Plan compliance. The following figure identifies Council s past and present achievements and future asset management focus. Odysseus-imc Pty Ltd 11

Where we have come from (pre 2010) Asset Management Policy and Strategy 2003 Draft AM plans for some asset groups Active GIS with varying levels of up to date data and confidence Condition inspections on roads, footpaths, playgrounds Disparate asset registers No future planning Reactive maintenance on most assets Where we are now (2010) AM Strategy 2010 in progress AM Policy 2010 Completed AM plans for roads, drainage, parks and buildings Qualitative asset condition information Active GIS with varying levels of up to date data and confidence No centralised asset register No future planning Reactive maintenance on most assets Where we are going (2010-2015) Adopted AM Policy and Strategy Adopted AM plans for roads, drainage, parks and buildings Asset condition for major asset groups Current and accurate asset data represented in the GIS AM system implemented for all asset groups Predictive modelling capabilities and future planning based on condition Planned maintenance activities Documented processes supporting information transfer, systems and data Improved AM skills and knowledge within Council FIGURE 3 - ASSET MANAGEMENT DIRECTION Odysseus-imc Pty Ltd 12

STEP PROGRAM (NATIONAL ASSET MANAGEMENT FRAMEWORK) CoS s active involvement in the MAV Step Program has seen continuous improvement since 2003. Monitoring of a series of improvements as part of the score card approach has allowed CoS to grow its AM capability. The Maloney Model has highlighted CoS s renewal gap which now allows Council to appropriately plan and fund the short fall in its future expenditure. In parallel to the Moloney Model assessment Council undertook renewal modelling on its road surfaces using SMEC and footpaths and drainage assets using ENIGMA. NATIONAL FRAMEWORK FINDINGS An analysis of the current asset management practices (using the National Framework) compared to accepted long term management practices for Council assets has resulted in the development of a listing of improvements recommended to achieve sound asset management practice. In undertaking the National Framework assessment, it was recognised that the data, processes and systems vary across the asset groups. By default some asset management functions will improve once the data becomes available and analysis of the results can be undertaken. However, other functions will not improve unless specific processes are implemented and data identified and collected. The following maturity scores were achieved for each performance area as a result of the National Framework assessment: FIGURE 4 CORE ASSET MANAGEMENT MATURITY Opportunities for improvement have been identified below. The priority improvement opportunities include: AMP 1 - Review and update the AM Policy to reflect the needs of the National Asset Management Framework; AMS 2 - Review and update the AM Strategy to reflect the needs of the National Asset Management Assessment Framework; G&M 3 - Review mechanisms to provide high level oversight / governance by the Council, CEO/GM and Executive Management Team, for development and implementation of the Asset Management Strategy and Asset Management Plans; 1 Asset Management Plans 2 Asset Management Strategy 3 Governance and Management Odysseus-imc Pty Ltd 13

SLTP 4 - Complete Asset Management Plans and incorporate the Asset Renewal Demand in the LTFP; and AB 5 - Incorporate Asset Renewal Demand & Council Plan Objectives in the Annual Budget. Detailed improvement plans for roads, drains, buildings and parks are provided in the Asset Management Plans. 4 Strategic Long Term Planning 5 Annual Budgetting Odysseus-imc Pty Ltd 14

FUTURE OF ASSET MANAGEMENT WITHIN COUNCIL KEY CHALLENGES The key challenges for Council in the future will be: Improved data capture and recording; Seamless information flow for management and reporting purposes; Documented and implemented asset management processes; Reliable and integrated Asset Management systems; Understanding future financial asset liabilities; Managing risk; and Managing the balance between maintenance, renewal and new work expenditure. In addition, the following key challenges will need to be addressed: Data required for advanced asset management purposes Assets Knowledge Accurate and current data availability Ongoing data collection Centralised AM system Information Systems Seamless information transfer between Councils systems Ongoing improvement of Councils GIS Understand Councils maintenance and renewal requirements into Strategic Planning the future Develop Councils Long Term Financial Plan supported by confident data Capital Planning Developing 20 year capital programs that align with the financial plan Organisational Issues Establish and implement ongoing AM training programs CURRENT ASSET MANAGEMENT INITIATIVES TABLE 3 - KEY CHALLENGES The work being undertaken to improve asset management within CoS includes: Completion of AM plans; Review of the governance structure; and Improved focus on defining the roles and responsibilities surrounding the management of buildings. DESIRED FUTURE FOR COS In moving forward, CoS will need to become skilled with respect to asset management functions and their use on the infrastructure. In particular they will need to: Whole of organisational approach to AM; Improved AM skills and knowledge within Council; Commitment to document and implement supporting AM processes; and Procure a centralised AM system. Odysseus-imc Pty Ltd 15

COS S AM STRATEGIES The following strategies have been identified as a result of undertaking the gap analysis, discussions about infrastructure issues and the needs of Council personnel. They are aligned with Council s corporate vision and infrastructure goals in particular: 1. Maintain and upgrade the infrastructure and services necessary for the seamless day to day operations of the city; 2. Maintain the quality and enhance the use of our facilities, amenities and open space to encourage community participation and cater for the interests and needs of the whole community; and 3. Maintain and enhance the public realm to provide safe, accessible, usable, clean and attractive spaces and streetscapes. All strategies and initiatives identified below are aimed at providing the skills, processes and data to achieve the above goals. 1. IMPLEMENT THE OPERATING STRUCTURE FOR AM Identify resources required to support the implementation of asset management; Improve information flow across the organisation; Improve skills & knowledge in asset management across the organisation; Understanding roles and responsibilities for asset management and data management; Set up the Asset Management Steering Committee (AMSC); Document an AM accountabilities & responsibilities matrix; and Ensure relevant Council staff are aware of AM accountabilities & responsibilities. 2. UNDERTAKE EFFECTIVE DECISION MAKING Risk management incorporated into asset management practices; Develop a Capital Works Evaluation Framework; Improve the alignment with Assets in the development of the Budget; Capture categories of expenditure against assets e.g. Capital (Renewal, New, Upgrade, Expansion) and Operating including Maintenance; and Asset management practices comply with asset and accounting standards. 3. DELIVER SUSTAINABLE SERVICES AND COMMUNITIES Progress towards Whole of Life costing for Capital Projects to capture ongoing recurrent costs (maintenance and operations); Ensure recurrent maintenance budget is linked to capital provision; Undertake programmed condition assessments of all asset classes; Odysseus-imc Pty Ltd 16

Understanding treatment standards as applied to asset renewal (long term implications of adopted treatments); Establish a Long Term Capital Works Program (10 years); Establish a process to identify community expectations related to levels of service; Implement an asset handover process; and Improve processes supporting the creation and disposal of assets. 4. ESTABLISH APPROPRIATE DATA AND SYSTEMS Procure a corporate Asset Management System that includes functionality such as predictive modeling and maintenance management; Asset Management System to interface with other corporate systems supported with appropriate processes e.g. GIS and Technology One; and Improve the confidence in asset data through implementing a data collection process for all major assets with appropriate data management processes. 5. ACHIEVE THE REQUIREMENTS OF THE NATIONAL FRAMEWORK Achieve CORE asset management requirements within 1 year 6 ; Achieve ADVANCED asset management requirements within 5 years with scores of 80 or better; and Adopt an improvement plan to achieve the above as defined by the National Framework. 6 It should be noted that to achieve this objective would require condensing the five year improvement actions and costs into one year. Odysseus-imc Pty Ltd 17

IMPLEMENTING THIS AM STRATEGY ASSET MANAGEMENT IMPLEMENTATION PLAN CoS s long term objectives for asset management are based on a three stage process being: Achieve the national asset management framework (NAMAF) requirements; Improved decision making capability; and Service excellence and sustainability. This is illustrated in the following figure. Long Term Planning Horizon Stage 3 Improvements Stage 1 2010 to 2014 Stage 2 2015 to 2019 Improved Decision 2020 onwards Service excellence and sustainability Achieve NAMAF Making Capability Awareness Time FIGURE 5 COS ASSET MANAGEMENT EVOLUTION This strategy represents the commencement of Stage 1; Achieve NAMAF. This strategy establishes the initiatives for CoS to enhance its asset management capabilities while building efficiencies into Council operations. CoS commenced this process with a vision to implement new asset management processes and build the foundation for the future direction of the organisation. Stage 1 will be a period of change driven by this strategy. Through this strategy and the identified improvements, CoS will be able to demonstrate improved asset management capability through the introduction of new systems, training and processes. The improvement plans for each asset group indicates the areas of improvement to be addressed. Stage 2 will focus on using the asset management improvements to analyse the infrastructure and provide improved decision making capabilities. Stage 3 will deliver ongoing improvement, sustainable outcomes with respect to service delivery and affordability. Odysseus-imc Pty Ltd 18

IMPROVEMENT ACTIVITIES The improvement actions identified in Appendix A are intended to achieve the objectives of this strategy. The improvement actions have been compiled into a gantt chart, linked and sorted by priority recognising the need for Council personnel to complete some asset management activities before undertaking others. The gantt chart appears on the following page. Odysseus-imc Pty Ltd 19

ID Task Name Duration Start Finish 2011 2012 2013 2014 2015 2016 1st Half 2nd Half 1st Half 2nd Half 1st Half 2nd Half 1st Half 2nd Half 1st Half 2nd Half 1st Half 2nd Half Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 1 City of Stonnington AM Improvement 805 days Mon 2/05/11 Fri 30/05/14 Actions 2 Provide AM improvement focus to 50 days Mon 2/05/11 Fri 8/07/11 the Asset Management Steering Committee (AMSC) City of Stonnington AM Strategy Improvement Actions 3 Develop Project Charter including roles and responsibilities. 20 days Mon 2/05/11 Fri 27/05/11 4 Develop 12 month agenda for AMSC based on AM Strategy 5 Appoint an external facilitator for the AMSC. 10 days Mon 30/05/11 Fri 10/06/11 0 days Fri 10/06/11 Fri 10/06/11 10/06 6 AMSC to review AM improvement actions and prioritise. 20 days Mon 13/06/11 Fri 8/07/11 7 Procure and implement a centralised AM system having ability to generate maintenance and renewal programs with associated cashflows 755 days Mon 11/07/11 Fri 30/05/14 8 Develop an AM system 80 days Mon 11/07/11 Fri 28/10/11 specification. Tender for AM 9 system and procure 30 days Mon 31/10/11 Fri 9/12/11 system. 10 Evaluate tenders. 30 days Mon 12/12/11 Fri 20/01/12 11 Contract negotiations. 100 days Mon 23/01/12 Fri 8/06/12 12 Procure and implement AM system. 0 days Fri 8/06/12 Fri 8/06/12 8/06 13 Asset Management System 515 days Mon 11/06/12 Fri 30/05/14 implementation 14 Data cleansing. 120 days Mon 11/06/12 Fri 23/11/12 15 Link AM system to GIS 120 days Mon 14/01/13 Fri 28/06/13 16 Link AM system to Finance 120 days Mon 1/07/13 Fri 13/12/13 system Link AM 17 system to Customer 120 days Mon 16/12/13 Fri 30/05/14 request system 18 Document science behind AMS 140 days Mon 4/06/12 Fri 14/12/12 19 Document data framework for major 80 days Mon 4/06/12 Fri 21/09/12 asset classes 20 Document condition manual for 80 days Mon 4/06/12 Fri 21/09/12 major asset classes 21 Develop and document a defined 60 days Mon 24/09/12 Fri 14/12/12 methodology for assessing the remaining and useful life, residual value and depreciation method 22 Undertake condition assessments for 120 days Mon 17/12/12 Fri 31/05/13 input into AM system Development of a GIS strategy 23 80 days Mon 24/09/12 Fri 11/01/13 encompassing asset management and associated data requirements. Document roles and responsibilities for 24 each 60 days Mon 11/07/11 Fri 30/09/11 AM function. 25 Complete buildings AM Plan. 40 days Mon 11/07/11 Fri 2/09/11 26 Long Term Financial Planning 100 days Mon 3/06/13 Fri 18/10/13 27 Incorporate asset renewal demand 40 days Mon 3/06/13 Fri 26/07/13 forecast for all asset classes into Long term Financial Plan. 28 Incorporate asset renewal demand 60 days Mon 29/07/13 Fri 18/10/13 forecast for all asset classes into annual budget. Review and update Long term Financial 29 40 days Mon 3/06/13 Fri 26/07/13 Plan in line with updates of AM Plans. Incorporate asset renewal demand & 30 30 days Mon 3/06/13 Fri 12/07/13 Council plan objectives in the annual budget. Identify how technical service levels can be 31 40 days Mon 14/01/13 Fri 8/03/13 used for performance monitoring and asset modelling. 32 Use levels of service as a decision tool. 830 days Mon 11/03/13 Fri 13/05/16 33 Develop reporting framework that monitors and reports on performance. 34 Undertake annual review of service levels and update budget process. 60 days Mon 11/03/13 Fri 31/05/13 572 days Thu 6/03/14 Fri 13/05/16 38 Update AM Plans to reflect levels of service status at that time. 341 days Thu 15/05/14 Thu 3/09/15 41 Identify positions responsible for 60 days Mon 3/06/13 Fri 23/08/13 managing the assets to meet service delivery needs. 42 AM Capacity building 240 days Mon 23/01/12 Fri 21/12/12 43 Identify gaps in asset management 120 days Mon 23/01/12 Fri 6/07/12 skillsets. 44 Develop asset management training 80 days Mon 9/07/12 Fri 26/10/12 program for Council personnel. Develop and document asset 45 120 days Mon 9/07/12 Fri 21/12/12 management responsibilities at personnel level. Promote asset management across 46 90 days Mon 24/12/12 Fri 26/04/13 Council. Develop 47 a communication strategy for 90 days Mon 24/12/12 Fri 26/04/13 asset management. 48 Implement communication strategy 0 days Fri 26/04/13 Fri 26/04/13 49 Asset Handover 310 days Mon 29/04/13 Fri 4/07/14 50 Document asset handover process 100 days Mon 29/04/13 Fri 13/09/13 for gifted and internal assets. 51 Workshop and document asset 60 days Mon 29/04/13 Fri 19/07/13 handover processes for major asset classes. 52 Review and improve existing 40 days Mon 22/07/13 Fri 13/09/13 processes. Document updated processes. 53 Implement asset handover process. 210 days Mon 16/09/13 Fri 4/07/14 26/04 54 Define responsible personnel 40 days Mon 16/09/13 Fri 8/11/13 involved in collation of gifted and internal assets. Establish processes to ensure 55 80 days Mon 11/11/13 Fri 28/02/14 assets are input into asset management system. Train all personnel involved 56 with 90 days Mon 3/03/14 Fri 4/07/14 gifted and internal assets. 57 Review capital evaluation framework 120 days Mon 14/07/14 Fri 26/12/14 58 Develop capital evaluation framework incorporating risk, lifecycle costs, cashflows, financial implications and business case. 59 Develop asset categories and business rules for implementing capital evaluation process within a project hierarchy. 80 days Mon 14/07/14 Fri 31/10/14 40 days Mon 3/11/14 Fri 26/12/14 60 Ensure capital projects are budgetted 110 days Tue 10/01/12 Mon 11/06/12 under renewal, upgrade and new classifications. 61 Develop definitions for the categories. 30 days Tue 10/01/12 Mon 20/02/12 62 Assign future projects under these 80 days Tue 21/02/12 Mon 11/06/12 categories. 63 Report projects against categories. 0 days Mon 11/06/12 Mon 11/06/12 64 Link capital projects to ongoing 120 days Mon 29/12/14 Fri 12/06/15 recurrent expenditure. Identify capital projects 65 and implications 60 days Mon 29/12/14 Fri 20/03/15 to recurrent expenditure as part of capital evaluation process. 11/06 66 Budget for additional maintenance as part of capital evaluation process. 67 Develop business rules associated with maintenance costs and train personnel on application of business rules. 30 days Mon 23/03/15 Fri 1/05/15 30 days Mon 4/05/15 Fri 12/06/15 68 Establish long term capital works programs (10 Years). 69 Based on asset management planning processes develop long term capital programs by asset class. 180 days Mon 1/07/13 Fri 7/03/14 120 days Mon 1/07/13 Fri 13/12/13 70 Incorporate in asset management plans. 60 days Mon 16/12/13 Fri 7/03/14 71 Understand treatment standards as applied to asset renewal (long term implications of adopted treatments. 72 Identify standard treatments identifed within Council. Based on historical evidence qualitatively identity life extension and work triggers. 466 days Mon 10/03/14 Mon 21/12/15 30 days Mon 10/03/14 Fri 18/04/14 73 Undertake research to validate or modify treatment lives. 40 days Mon 21/04/14 Fri 13/06/14 74 Document and adopt outcomes of 20 days Mon 16/06/14 Fri 11/07/14 research. 75 Update AM Strategy 80 days Tue 1/09/15 Mon 21/12/15 Sun 6/03/11 5:34 PM Page 1

IMPLEMENTING THE AM STRATEGY AM STEERING COMMITTEE (AMSC) The AM Steering Committee (AMSC) monitors the AM improvement programme across Council. The group is responsible for providing direction and resolving issues related to all activities in the improvement programme. Consistent bi-monthly meetings create an environment where key staff are able to discuss and resolve AM issues as well as plan for the way forward. Implementation of the improvement program including regular progress reports, target tracking and activity monitoring should be programmed as a regular agenda item for discussion. A key aspect of the implementation of AM improvements is to have: A management decision making group responsible for the overall improvement programme; and Asset management support responsible for delivery of required projects within budget and timeframe. The AMSC assists with the formulation and monitoring of the asset management improvement program across Council. The key roles of the AMSC include: Management decision making responsible for delivery of the overall improvement program; Provision of advice and assistance to ensure the necessary resources (business, technical, financial & other) are available; Ensuring a cross organisational approach to the delivery of asset management objectives. Council ; Setting corporate AM policy and vision; Monitoring the implementation Council s AM Plans; and Ensuring appropriate resources are provided to support AM activities. The implementation of asset management requires commitment from all parties involved and resources to be allocated to specific functions. In infrastructure rich organisations historically they have consisted of: Steering Committee to provide direction; Coordinator to co-ordinate and monitor activities; and Team Leaders to undertake the improvement activities. The AMSC will provide active direction with respect to this Strategy. To achieve this, the AMSC should set an agenda for the next twelve months in line with the improvement plan. An initial task is to develop the project charter that articulates the goals and objectives and the rules associated with the AMSC. The committee should then prioritise all tasks for the year it intends to have implemented. MANAGER INFRASTRUCTURE SERVICES The Manager Infrastructure Services will provide leadership and direction to support the: Development of AM plans for individual asset groups, using principles of lifecycle analysis; Implementation of improvement plans for individual asset groups; Implementation of maintenance programs, capital works programs, operational plans etc. in accordance with the AM plan and annual budget; Reporting to the General Manager City Works and EMT on the progress of the implantation of Asset Management and ongoing infrastructure performance. Odysseus-imc Pty Ltd 21

MANAGER FINANCE The Manager Finance will provide leadership and direction to: Work with the asset managers to align the asset management and financial management practices within council; Support the development of a long term financial plan that reflects the state of the assets; Support the development of a long term financial plan that recognises asset consumption; Provide guidance and direction to asset managers where asset management and financial management requirements overlap e.g. revaluations; Ensure financial reporting systems are in place which appropriately track expenditure on assets under the following categories; Operational, Maintenance, Renewal, Upgrade, New MANAGERS AND STAFF To ensure that the objectives established in the Asset Management Framework and Asset Management Plans are integrated into the development and implementation of maintenance, refurbishment and capital works programs in accordance with the Council s Strategic Resource Plan, Annual Plan and Budget. CAPACITY BUILDING Council recognises that asset management needs a whole of organisation approach. The organisation will support implementation of asset management with appropriate resources, systems, and training as appropriate. CHANGE MANAGEMENT This plan should be seen as a change management opportunity and vehicle for achieving significant gains in effectiveness and efficiency in managing and maintaining the network of assets. A key and critical element of any change management program initiative is an effective communication plan and strategy. It is also essential for the communication strategy to be aligned with the knowledge of the underlying culture, associated values, attitudes and behaviours. The developed communications strategies need to integrate this knowledge to ensure organisation wide receptiveness to, and understanding of the message being communicated. It is essential that initiatives resulting from this project be implemented with a strong emphasis on communication, consultation, participation and collaboration. Odysseus-imc Pty Ltd 22

RECOMMENDATIONS It is recommended that CoS: Adopt this strategy as a factual statement regarding the status of asset management; Adopt the findings with respect to current status of asset management; Adopt the recommended improvements detailed in Appendix A; Immediately implement the program; and Annually review the progress of the improvement programme. Odysseus-imc Pty Ltd

Appendix A AM Improvement Plans LEGEND NAMAF ASSET MANAGEMENT ELEMENTS SLTP - Strategic Long Term Plan AB - Annual Budget AMP - Asset Management Plans G&M - Governance and Management LoS - Levels of Service D&S - Data and Systems S&P Eval - Skills and Processes - Evaluation Odysseus-imc Pty Ltd

Task No. NAMAF AM Element 1 G&M Provide AM improvement focus to the Asset Management Steering Committee (AMSC) Task Approach Resource Start Date End Date Develop Project Charter including roles and responsibilities. AMSC to review AM improvement actions and prioritise. Develop 12 month agenda for AMSC based on AM Strategy improvement actions. Estimated External Cost (Excl. GST) Deliverable Internal May-11 Jul-11 $- Establishment of direction, roles and responsibilities, first year s actions and agenda. 2a D&S Procure and implement a centralised AM system having ability to generate maintenance and renewal programs with associated cash flows Appoint an external facilitator for the AMSC. Develop an AM system specification. Tender for AM system and procure system. 2b D&S Tender for AM system and evaluate tenders. Internal & External Internal & External Jul-11 Dec-11 $20,000 Documented AM specification. Oct-11 Jan-12 $10,000 Selection of preferred tender. 2c D&S Contract negotiations. Internal Jan-12 Jun-12 $- Agreed contract terms. Odysseus-imc Pty Ltd

Task No. NAMAF AM Element Task Approach Resource Start Date End Date 2d D&S Procure and implement AM system. Internal & External Estimated External Cost (Excl. GST) Deliverable Jun-12 May-14 $350,000 Operating AM system with appropriate functions. Documented AM system implementation program. 2e D&S Data cleansing. Internal Jun-12 Nov-12 $- Data cleansed and ready for migration. 2f D&S Link AM system to GIS Internal Jan-13 Jun-13 $- Use of AMS and GIS with appropriate data interfaces. 2g D&S Link AM system to Finance system 2h D&S Link AM system to Customer request system Internal Jul-13 Dec-13 $- Use of AMS and Finance with appropriate data interfaces. Internal Dec-13 May-14 $- Use of AMS and Customer request system with appropriate data interfaces. Odysseus-imc Pty Ltd

Task No. NAMAF AM Element 3 D&S Document data framework for major asset classes Task Approach Resource Start Date End Date Incorporate with data cleansing process and undertake a gap analysis of existing data. Identify data needs by asset class and AM functions. Internal & External Estimated External Cost (Excl. GST) Deliverable Jun-12 Sep-12 $40,000 Documented business rules regarding data to be collected. 4a D&S Document condition manual for major asset classes 4b D&S Develop and document a defined methodology for assessing the remaining and useful life, residual value and depreciation method 4c D&S Undertake condition assessments for input into AM system Document condition criteria and definitions. Document process of collecting asset condition. Work with Finance to define remaining and useful life, residual value and depreciation method and link to asset condition. Annual condition assessments. Internal & External Jun-12 Sep-12 $25,000 Completed business rules for undertaking condition assessment. Internal Sep-12 Dec-12 $- Completed business rules for assessing the remaining and useful life, residual value and depreciation method. Internal & External Dec-12 April-13 $100,000 Annual update of condition for select assets. 4d D&S Input condition assessments into AM system. Generate renewal programs and asset depreciation. Internal Feb-13 May-13 $- Condition based renewal programs and asset depreciation. Odysseus-imc Pty Ltd

Task No. NAMAF AM Element 5 D&S Development of a GIS strategy encompassing asset management and associated data requirements. Task Approach Resource Start Date End Date Facilitate ideas and vision for GIS/AMS interface. Work with I.T. to document future direction and actions. Appoint external facilitator to assist GIS personnel and review strategy. Internal & External Estimated External Cost (Excl. GST) Deliverable Sep-12 Jan-13 $25,000 Clear direction of using GIS to support asset management activities. 6 G&M Document roles and responsibilities for each AM function. Facilitate with each department and business group the identification of AM functions undertaken documenting roles and responsibilities. 7 AMP Complete buildings AM Plan. Complete condition assessments for buildings portfolio and incorporate outcomes in the buildings AM Plan. Internal Jul-11 Sep-11 $- Documented roles and responsibilities. External Jul-11 Sep-11 $10,000 Completed first version buildings AM Plan. 8 SLTP Incorporate asset renewal demand forecast for all asset classes into Long term Financial Plan. Update AM Improvement section. Review implications of asset renewal forecasts, consolidate and add to Long term Financial Plan. Internal Jun-13 Jul-13 $- Updated Long term Financial Plan. Odysseus-imc Pty Ltd

Task No. NAMAF AM Element 9 AB Incorporate asset renewal demand forecast for all asset classes into annual budget. Task Approach Resource Start Date End Date Annual review of renewal forecasts as part of budget process. Estimated External Cost (Excl. GST) Deliverable Internal Jul-13 Oct-13 $- Funding of annual renewal needs. 10 SLTP Review and update Long term Financial Plan in line with updates of AM Plans. 11 AB Incorporate asset renewal demand & Council plan objectives in the annual budget. 12a LOS Identify how technical service levels can be used for performance monitoring and asset modelling. 12b LOS EVAL Use levels of service as a decision tool. On completion of ongoing updates of plans update Long term Financial Plan. Include words and renewal requirements in the annual budget. Incorporate technical levels of service into service agreements and align with asset modelling. Develop reporting framework that monitors and reports on performance. Undertake annual review of service levels and update budget process. Update AM Plans to reflect levels of service status at that time. Internal Jun-13 Jul-13 $- Two yearly Long term Financial Plan update. Internal Jun-13 Jul-13 $- Updated annual budget. Internal Jan-13 Mar-13 $- Documented performance monitoring process. Updated service agreements. Internal Mar-13 Ongoing $- Proactive approach to service delivery. Odysseus-imc Pty Ltd

Task No. NAMAF AM Element Task Approach Resource Start Date End Date 12c G&M Identify positions responsible for managing the assets to meet service delivery needs. 13 S&P Identify gaps in asset management skill sets. Undertake gap analysis in skills as per the roles and responsibilities matrix and document training needs. Estimated External Cost (Excl. GST) Deliverable Internal Jun-13 Aug-13 $- Individuals focussed on service delivery and levels of service. Internal Jan-12 Jul-12 $- Documented gaps and recommendations for improvement. 14 G&M Develop asset management training program for Council personnel. 15 G&M Develop and document asset management responsibilities at personnel level. 16 G&M Promote asset management across Council. Identify asset management training (individual and group) programme. Incorporate asset management functions in staff position descriptions and organisation structure. Develop a communication strategy for asset management. Internal & External Jul-12 Oct-12 $25,000 Individual and group training programmes to be implemented. Internal Jul-12 Dec-12 $- Documented organisational structure and staff position descriptions. Internal Dec-12 Apr-13 $- Documented communication strategy to be implemented. Odysseus-imc Pty Ltd

Task No. NAMAF AM Element 17a S&P Document asset handover process for gifted and internal assets. Task Approach Resource Start Date End Date Workshop and document asset handover processes for major asset classes. Review and improve existing processes. Document updated processes. Internal & External Estimated External Cost (Excl. GST) Deliverable Apr-13 Sep-13 $40,000 Documented asset handover process. 17b S&P Implement asset handover process. Define responsible personnel involved in collation of gifted and internal assets. Establish processes to ensure assets are input into asset management system. Train all personnel involved with gifted and internal assets. Internal Sep-13 Jul-14 $- Implemented asset handover process. Odysseus-imc Pty Ltd

Task No. NAMAF AM Element 18 G&M Review capital evaluation framework Task Approach Resource Start Date End Date Develop capital evaluation framework incorporating risk, lifecycle costs, cashflows, financial implications and business case. Develop asset categories and business rules for implementing capital evaluation process within a project hierarchy. Internal & External Estimated External Cost (Excl. GST) Deliverable Jul-14 Dec-14 $40,000 Documented capital evaluation framework ready for implementation. 19 SLTP Ensure capital projects are budgetted under renewal, upgrade and new classifications. Develop definitions for the categories. Assign future projects under these categories. Report projects against categories. Internal Jan-12 Jun-12 $- Asset expenditure associated with capital, renewal, operations and maintenance. Odysseus-imc Pty Ltd

Task No. NAMAF AM Element 20 AMP Link capital projects to ongoing recurrent expenditure. Task Approach Resource Start Date End Date Identify capital projects and implications to recurrent expenditure as part of capital evaluation process. Budget for additional maintenance as part of capital evaluation process. Estimated External Cost (Excl. GST) Deliverable Internal Jan-15 Jun-15 $- A process for the identification and budgetting of ongoing maintenance costs resulting from capital projects. 21 AMP Establish long term capital works programs (10 Years). Develop business rules associated with maintenance costs and train personnel on application of business rules. Based on asset management planning processes develop long term capital programs by asset class. Incorporate in asset management plans. Internal Jul-13 Mar-14 $- Rolling 10 Year Capital works program. Odysseus-imc Pty Ltd

Task No. NAMAF AM Element 22 AMP Understand treatment standards as applied to asset renewal (long term implications of adopted treatments. Task Approach Resource Start Date End Date Identify standard treatments identifed within Council. Based on historical evidence qualitatively identity life extension and work triggers. Undertake research to validate or modify treatment lives. Document and adopt outcomes of research. Estimated External Cost (Excl. GST) Deliverable Internal Mar-14 Dec-15 $- Treatment database by asset class identifying implications of treatments e.g. Asset lives and trigger points. 23 AMS Update AM Strategy Review status of above projects. Facilitate development of new strategy based on findings. Internal & External Sep-15 Dec-15 $40,000 5 Year AM Strategy Odysseus-imc Pty Ltd