Asset Management Improvement Strategy

2010

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Version Control

Version No. Date Details Author/s

1.0 July 2009 Adopted Strategy AMWG

2.0 October 2010 Update AMWG

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TABLE OF CONTENTS

OF CONTENTS 3

4

4

OF THE ASSET MANAGEMENT IMPROVEMENT STRATEGY 5

OF THE ASSET MANAGEMENT IMPROVEMENT STRATEGY 5

TO OTHER CORPORATE DOCUMENTATION 5

5

6

7

8

ASSET MANAGEMENT FRAMEWORK 9

AUSTRALIAN ASSET MANAGEMENT IMPROVEMENT PROGRAM 9

11

11

12

MANAGEMENT PLANS 12

13

SYSTEMS 13

MANAGEMENT 13

MAINTENANCE 14

ANALYSIS 15

PLAN 17

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INTRODUCTION The Serpentine Jarrahdale Shire is the custodian of an extensive range of community assets

which represents a vast investment over many generations. In order to fulfil its obligations in

delivering a variety of services to the community, the Shire must ensure that the assets

supporting these services are managed in a way that guarantees maximum performance for the

lowest 'whole of life' cost. In addition millions of dollars are spent annually managing and

maintaining the Shire's infrastructure and it is imperative that the best management skills and

practices are utilised to ensure related services are delivered economically and sustainably.

Asset management is critical as it aims to create linkages between levels of service, asset

condition, asset replacement and budgetary provisions. This strategy deals specifically with the

5 largest infrastructure classes of the Serpentine Jarrahdale Shire. These are:

• Roads

• Drainage

• Buildings

• Parks

• Bridges

In the past, local governments have met community needs through investment in creation of

new infrastructure without recognising the long-term life cycle costs associated with the ongoing

operation, maintenance and renewal. Improving the management of infrastructure can bring

major benefits by ensuring that scarce resources are used in the most cost effective manner.

This will enhance economic growth and improve environmental sustainability.

Along with customer service delivery and governance, asset management is one of the core

business activities of local government. The organisation recognises that asset planning is an

organisational responsibility and requires the commitment of the Executive and Senior

Management within the Shire, for it to succeed. The clarity of roles and responsibilities for all

those involved in asset management right across the organisation is also a critical success

factor.

Council has embarked on a program to improve its asset management practices and processes

through a planned approach that addresses community needs and expectations. Council is

determined to ensure that its assets are managed in ways that ensure that the quality and

standard of all its assets meets the community’s requirements and expectations now and in the

future.

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OBJECTIVE OF THE ASSET MANAGEMENT IMPROVEMENT STRATEGY The objective of this strategy is to set out in a structured way, the key tasks that the Serpentine

Jarrahdale Shire intends to resource over the next 3 years in order to ensure that the Shire’s

assets are managed on a sustainable basis. This will assist in ensuring that services continue to

be delivered in line with community expectations.

AIM OF THE ASSET MANAGEMENT IMPROVEMENT STRATEGY This strategy aims to:

• Ensure an organisational commitment to asset management is ongoing.

• Ensure that the Serpentine Jarrahdale Shires commitment to asset management is

adequately resourced.

• Develop a prioritisation of tasks to ensure the progress of asset management.

• Continually improve the quality of infrastructure asset data held.

LINKS TO OTHER CORPORATE DOCUMENTATION This strategy links to the following corporate documents;

• The Shire’s Plan for the Future

• The Shire’s long term Financial Plan (pending)

• The Shire’s Risk Management Plan (pending)

• The Shire’s Community Facilities & Services Plan

ROADS Roads data is held in the Roman software package that is used by the majority of Local

Governments in Western Australia. The inventory includes condition ratings and relevant data

that enables valuations of the current network. There is also a GIS capability both as part of,

and external to Roman. Roman II, a significantly improved version in terms of both capability

and efficiency, is expected to be released in February 2011. Regular updates of inventory data

have not occurred over the past few years due to resource constraints, however some inventory

data has been updated in conjunction with the condition assessments which are undertaken by

independent contractors every 3 years. The last condition rating was carried out in August 2008.

The road network has a replacement value in excess of $190M and is made up of

approximately 717 kilometres broken down into the following classes:

• Sealed Roads 555km

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• Unsealed Roads 162km

Maintenance and renewal planning consists of various programs that relate to improvement or

rehabilitation of the network and involve both a construction and reseal program which is

formulated by officer knowledge and reference to an improvement program developed by a

consultant several years ago.

Maintenance inspections are carried out on a continuous basis by officers as they travel

throughout the Shire. Maintenance issues that require attention are documented in the Leading

Hand minutes and on the Records system. Replacement valuations and depreciation

calculations are determined external to Roman on a straight-line basis and unit rates are

maintained external to Roman.

Councils first Road Asset Management Plan was adopted in April 2010. This plan included a

formal hierarchy which is based on the latest edition of the Subdivisional Guidelines for

Development. Target levels of service have been defined setting minimum technical and

community standards for the provision of road infrastructure. Asset life definitions have been

based on industry standard and local knowledge of the performance of the Shire’s road network.

DRAINAGE The drainage network within the Serpentine Jarrahdale Shire requires improved documentation

to obtain a full representation of the extent of drainage infrastructure. The process to record the

physical attributes of the network is currently underway with the commencement of GIS

mapping and data gathering activities. The most complete information exists in relation to new

developments, however the Shire does not have an Asset Management software program

which would allow this data, including materials, dimensions, quantity, construction dates and

condition, to be used to manage the asset. Roman II is expected to be able to fulfil this

requirement.

No formal hierarchy, level of service definitions or asset life definitions have been developed,

but this process will form part of the drainage asset management plan preparation, scheduled to

be undertaken in the second half of 2010.

Currently each townsite is assessed with regard to the level of service required and whether

additional drainage is warranted to meet basic urban standards. Overall, designs for each

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townsite are being formulated to enable a future improvement plan, yet existing assets are not

documented and therefore minimal maintenance management currently takes place. As

drainage assets can have a life approaching 80 or 100 years, this is common in Local

Government entities.

BUILDINGS The Shire holds a current complete inventory of its buildings. A basic audit and condition report

of all building was conducted during the period July - October 2009. The results of this

inspection confirmed that building stock is generally in a satisfactory condition, however several

buildings have deteriorated past intervention level and require attention.

No long term renewal or maintenance plan exists for the majority of the Shire’s buildings. Funds

are allocated to building maintenance and capital works annually as a result of officer requests

and/or reactive works. The amount of municipal funds allocated has not changed for many

years although building costs have risen substantially. In the absence of a renewal plan,

strategic management of buildings is minimal, however preventative maintenance is carried out

as part of the annual maintenance program.

Replacement valuations have previously been determined by external valuations, however it is

considered that for the purposes of cyclic renewal, the values should be based on the

Rawlinsons construction guide. Future updates of the Building Asset Management Plan will

therefore used this valuation method.

The Asset Management department currently maintain a building asset management database

which contains physical and condition data of each building. This database contains all known

buildings and is continually being updated as more information is obtained.

As part of the development of the Building Asset Management Plan, a formal hierarchy has

been developed allowing prioritisation of works. Target levels of service have been defined

setting minimum technical and community standards for the provision of building infrastructure.

Asset life definitions have also been adopted which are based on the range utilised within the

industry and knowledge of how buildings perform in the local environment.

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PARKS Significant progress has been made in the last 10 months in the collection of data of parks

infrastructure items. Data gathering activities have encompassed infrastructure classes such as

hard surface sporting areas, sealed and unsealed carparks, passive and active reserves,

lighting and bores.

Hard landscaping, eg retaining walls, fencing and raised garden beds are not quantified or

assessed. These areas are maintained on an ‘as needs’ basis, with reliance placed on service

staff reporting required works. Budget details are recorded on spreadsheets however actual

maintenance costs in relation to service level requirements are not available as while service

levels are now defined, the Shire does not utilise a system which is efficient in reporting on

these targets.

Information exists for 100% of the Shires playgrounds with regular condition inspections

undertaken by certified playground inspectors as required by Australian Standards.

Councils first Parks Asset Management Plan was adopted in November 2009. This plan

includes a formal hierarchy which allows for the prioritisation of reactive works. Target levels of

service are included that define minimum technical and community standards for the provision

of parks infrastructure. Asset life definitions have been developed and have been based on local

knowledge of the performance of the Shire’s parks assets.

BRIDGES Traffic bridge data is controlled by Main Roads Western Australia (MRWA). MRWA undertake a

full structural assessment of each bridge at least every 4 years. A condition report is forwarded

to the Shire and includes materials, dimensions and quantity and prioritised routine and specific

maintenance items. This data is held for 100% of traffic bridges.

In addition to the MRWA inspection reports, an annual inspection program is being developed

which will be carried out by Shire officers in order to identify routine maintenance.

The Serpentine Jarrahdale Shire also owns one pedestrian bridge. This bridge does not come

under the management of MRWA. Data exists in relation to materials, dimensions, quantity,

value and construction date of this asset.

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As part of the development of the Bridges Asset Management Plan, a formal hierarchy has been

developed allowing prioritisation of works. Target levels of service have been defined setting

minimum technical and community standards for the provision of bridge infrastructure. Asset life

definitions have also been adopted which are based on the MRWA standard.

STRATEGIC CONTEXT Across Australia over recent years there have been a number of reports analysing the

performance of Local Government in terms of asset management. While these reports have

noted that progress is being made, there is clear evidence that sustainable asset management

is a significant challenge for many councils. The Serpentine Jarrahdale Shire has recognised

this and adopted a strategic management approach to improvement planning, the development

of Asset Management plans, and implementing improvement processes & practices. This

Improvement Plan is integral to that approach, quantifying current business practice and

measuring progress toward an identified future position.

WESTERN AUSTRALIAN ASSET MANAGEMENT IMPROVEMENT PROGRAM The Serpentine Jarrahdale Shire has chosen to participate in the Western Australian Asset

Management Improvement (WAAMI) program to assist in the development of its strategic asset

management framework. WAAMI was developed by a Western Australian Industry working

group based on similar work undertaken in other states and seeks to facilitate local government

asset management in Western Australia. It achieves this by:

• Building awareness through presentations and workshops

• Providing tools such as templates for plans and policies and

• Developing a self assessment and improvement framework

Significant progress has been made under the WAAMI program. The following scorecard shows

the progress made from the first visit in June 2008 to the fourth visit in June 2010.

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This program has recently been updated to incorporate the draft National Framework which has

been developed by a number of leading asset management bodies and local government

representatives across Australia. The national framework has introduced new areas to ensure

that asset management is successfully implemented across the whole of the organisation.

These new measurable components include:

• Strategic planning

• Annual budget

• Skills & Processes

• Evaluation

• Annual report

• Governance and management

As a part of the fourth WAAMI visit in June 2010, scoring was undertaken according to the draft

national framework guidelines. The comparison with similar local governments in Victoria is an

extremely useful tool for benchmarking purposes and to specify where the priorities for actions

lie. The diamonds on the graph below indicate the status of Serpentine Jarrahdale’s practises,

and the rectangular areas indicate the range of results from all local governments surveyed.

Given that all other Councils were Eastern States outer metro / growth area Councils, who are

years ahead in asset management implementation, the results are considered to be excellent

and will provide a solid base for quality Asset Management in the Serpentine Jarrahdale Shire.

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POLICY The Shire’s Asset Management Policy was adopted in March 2010, and underpins the

organisation’s Plan for the Future. This policy ensures that the organisation undertakes a

structured, well resourced and co-ordinated approach to asset management and that

sustainable facilities are provided for both current and future generations.

STRATEGY The Shire of Serpentine Jarrahdale’s draft Plan for the Future commits to the development of

Asset Management Plans and Systems in the following areas:

Focus Area: Infrastructure

• Continually improve the accuracy of the long term financial Plan for the Future by

accommodating asset management plans that are developed.

• Ensure asset management plans extend to whole of life costings of assets and

reflect the level of service determined by Council.

• Develop and adequately fund a functional road network and bridges based on the

level of service set by Council.

Focus Area: Strategy and Planning

• Create innovative solutions and manage responsibly to aid our long term financial

sustainability

• Develop comprehensive governance policies and strategies

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Focus Area: Success and Sustainability

• The Shire will exercise responsible financial and asset management cognisant of

being a hyper-growth council.

This Asset Management Improvement Strategy outlines the specific actions to be undertaken by

the Shire to enhance its asset management capabilities and achieve its strategic objectives as

visioned in the Asset Management Policy. It develops a structured set of actions and also

identifies resources that together will enable improved organisational asset management.

IMPLEMENTATION To drive implementation of the AM Improvement Strategy the Shire has established the Asset

Management Working Group (AMWG) to drive and co-ordinate the development and

implementation of the Asset Management Improvement Strategy. The AMWG is a cross-

functional working group with representatives from each area of the organisation that has

involvement with assets associated with service delivery. The membership and terms of

reference of the AMWG are reviewed annually to ensure that key areas of the organisation are

represented on this group and the focus is relevant to the organisations current needs.

ASSET MANAGEMENT PLANS Serpentine Jarrahdale Shire has developed Asset Management Plans for roads, buildings,

parks and bridges. The preparation of the plan for drainage infrastructure has commenced and

is expected to be complete by November 2010.

These plans have identified the current status of the asset group, defined target levels of

service for future consultation and identified improvements to be made. All Asset Management

Plans are in the format developed by the Institute of Public Works Engineering Australia

(IPWEA) in line with the International Infrastructure Management Manual as follows:

• Executive Summary

• Introduction

• Levels of Service

• Demand Forecast

• Risk Management

• Lifecycle Management Plans

• Financial Forecast

• Asset Management Practices and Procedures

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The Asset Management Plans will be reviewed and improved annually, as data accuracy, detail

and knowledge of community expectations increases.

DATA Similar to many organisations, the Serpentine Jarrahdale Shire maintains infrastructure asset

data in numerous different databases to various quality standards. The most complete data is

contained within the road and building databases. It is a priority of this strategy to improve the

quality of data over the coming years.

INFORMATION SYSTEMS As mentioned above, the Shire maintains numerous asset databases. These range from

Roman, Excel spreadsheets, Access databases and various software systems. In order to

improve the integrity of the data, assist in managing data in a meaningful manner and to assist

in informed decision making, the use of existing and proposed systems will be investigated as

progress on the asset management plans is made. The ideal situation is to have all assets on a

single software system designed specifically for Asset Management purposes, enabling best

practise asset management to be implemented and meaningful outcomes delivered.

ASSET MAINTENANCE The asset management activities to date have identified a need to introduce better maintenance

programs and to work towards managed maintenance systems. This is particularly important for

risk management with respect to buildings, bridges, roads and footpaths.

The development of roads and buildings asset maintenance strategies has not yet commenced.

These documents will, when developed, ensure a consistent risk based approach to the

inspection, maintenance and renewal of assets. They will also ensure technical standards

employed for maintenance and renewal activities are consistent and documented which allows

for the set level of service to be sustained through employee changes.

RISK MANAGEMENT Risk Management is the process of thinking about the possible risks an organisation faces

either before they happen or as a result of an incident or outcome and setting up treatments that

will avoid the risk or minimise the impact of the risk. An enterprise wide Risk Management

Framework considers all facets of an organisation’s activities and aims to identify and deal with

risks the organisation may face strategically and in its day to day operations. Risk Management

is an integral part of good business practice and works in tandem with strategic and financial

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planning. Developing and maintaining a Risk Management Framework is an effective way to

identify, manage and respond to risks within an organisation. The Shire’s framework will be

holistic in approach and will be developed in accordance with the relevant International

Standard – AS/NZ/ISO:31000.

Risk Management allows for systemic change and continuous improvement in planning,

resource allocation, decision making and processes and delivers outcomes such as:

• Improved asset management

• Improved planning, performance and effectiveness

• Providing a basis for higher standards of accountability and sound governance

• Protecting the organisation from legal liability

• Reducing insurance premiums

• Protecting the Council’s corporate image as a professional, responsible and ethical

organisation and an employer of choice

• Capacity to respond to new opportunities

• Improved prioritisation of activities and projects

• Improved project outcomes and reporting by documenting objectives and key actions in

Councils Risk Register

All updated Asset Management Plans will consider risks relating to the class of infrastructure

and will rate them according to the following matrix:

Consequence

Insignificant Low Medium High Extreme 1 2 3 4 5

Like

lihoo

d

Almost Certain A M H H E E

Likely B M M H H E

Possible C L M M H H

Unlikely D L L M M H

Rare E L L M M H

E – Extreme Risk M – Moderate Risk H – High Risk L – Low Risk

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IMPLEMENTATION & REVIEW The Asset Management Working Group (AMWG) will be responsible for reporting progress

made in relation to the Action Plan, to the Leadership Team. This includes any barriers to

achieving objectives and proposed solutions or alternative actions. Council will also receive a

detailed update of the Asset Management Improvement Plan including financial and service

delivery implications.

The Asset Management Improvement Strategy will be updated annually and undergo a full

review every 3 years in conjunction with the Long Term Financial Plan and Plan for the Future.

GAP ANALYSIS The gaps identified in the Shire’s asset management processes have been significantly

reduced. The basic asset knowledge that existed 12 months ago has been built on to a level

where a good level of documentation is now evidenced.

Previously, the most significant gaps existed in long term planning. No asset management plans

had been developed and their was little knowledge regarding the long term renewal

requirements of the Shire’s infrastructure. A year into the formal implementation of Asset

Management has seen an Asset Management Policy, Improvement Strategy, and four Asset

Management Plans being adopted all with provisions for regular reviews. The WAAMI program

has also been completed with success in all areas.

The assessment of the Serpentine Jarrahdale Shire’s performance in accordance with the draft

national framework has also provided a clear indication of where the gaps in asset management

exist within the organisation. These are depicted in the following graph:

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ACTION PLAN

Task Timeline Responsible Officer / Group

Cost

Form an Asset Management Working Group Complete Leadership Team Internal

Develop Terms of Reference for the Asset Management Working Group

Complete AMWG Internal

Develop and recommend an Asset Management Policy

Complete Consultant Internal

Establish parks data Complete Parks & Gdns Supervisor, AM Officer, Administration

Officer Operations

Internal

Develop and adopt an Asset Management Improvement Strategy

Complete AMWG Internal

Update of bridge condition data Complete Design Team Leader, AM Officer, Operations Works

Coordinator

Internal

Prepare Complete cut AM Plan for parks Parks Gdns Supervisor, AM Officer, AM Co-

ordinator

Internal

Update road condition data Complete Design Team Leader, AM Officer

Internal

Prepare Complete cut AM Plan for bridges Design Team Leader, AM Officer, AM Coordinator

Internal

Prepare Complete cut AM Plan for roads Design Team Leader, AM Officer, AM Coordinator

Internal

Develop a financial “renewal gap” model for all infrastructure

Complete AM Officer, AM Coordinator Internal

Undertake a condition audit for buildings Complete Manager Building Services, AM Officer, Building Maintenance Officer

Internal

Prepare Complete cut AM Plan for buildings Manager Building Services, AM Officer, AM

Coordinator, Building Maintenance Officer

Internal

Evaluate 2010/11 budget requirements for asset management

Complete AMWG Internal

Review existing risk management procedures across organisation

March 2010 Leadership Team Internal

Develop roles & responsibilities matrix May 2010

(commenced)

AMWG Internal

Develop capital evaluation model for projects: - develop model - Develop a process flow whereby

decision makers receive and consider lifecycle cost information in decisions relating to new or upgrade of services and assets

June 2010 (commenced)

March 2011

Asset Officer

Asset Officer

Internal

Develop asset register for drainage October 2010 Asset Officer Internal

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- quantity - age - value

Prepare 2010/2011 cut AM Plan for drainage

(commenced)

Asset Officer Internal

Update Asset Management Improvement Strategy Complete AMWG Internal

Roman II: - Adoption of new regional model by

MRWA to ensure alignment with road hierarchy

- Update existing roads data / conditions in a phased approach

November 2010

January 2011

Manager Infrastructure

Development

Asset Officer

Internal

Evaluate impact of National Assessment Framework

Within 3 months of release AMWG Internal

Develop workflows for: - the capture of new assets from

subdivisional development - the capture of new assets from

municipal construction - the disposal of assets

December 2010 Asset Officer, Technical

Officers Internal

Continue to increase detail of all assets at a component level

- roads - buildings - bridges - parks - drainage

Ongoing Asset Officer Internal

Develop Building Maintenance Strategy incorporating:

- Inspection frequencies - Hierarchies - Maintenance levels of service

February 2011 Asset Officer / Building

Maintenance Officer Internal

Document a process for reviewing the useful life of assets. February 2011 Asset Officer Internal Develop a building disposal strategy to take into consideration:

- condition of buildings - strategic requirements - current use

February 2011 AMWG Internal

Evaluate asset management resource requirements for 20010/2011 budget

- software - other resources

March 2011 AMWG Internal

Separate capital expenditure within financial reporting and budgeting processes into:

- renewal, upgrade, new - maintenance and operation

March 2011 Exec Manager Finance Internal

Develop condition assessment manual for the Shires footpath infrastructure. April 2011 Asset Officer Internal Develop Roads Maintenance Strategy incorporating:

- Inspection frequencies - Hierarchies - Maintenance levels of service

June 2011 Asset Officer / Manager

Operations Internal

Collect Footpath data - quantity - condition - value

June 2011 Asset Officer Internal

Develop Parks Maintenance Strategy incorporating:

- Inspection frequencies September 2011

Asset Officer / Manager

Operations Internal

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- Hierarchies - Maintenance levels of service

Investigate sustainability indicators for inclusion in future reporting September 2011

Asset Officer/ Exec

Manager Finance Internal

Risk Management - Develop risk framework to ensure a

common base for the assessment of risks

- Record infrastructure risks - Communicate infrastructure risks to

Leadership Team

October 2011 AMWG Internal /

LGIS

Develop Bridge Maintenance Strategy incorporating:

- Inspection frequencies - Hierarchies - Maintenance levels of service

December 2011 Asset Officer / Manager

Operations Internal

Document a work procedure for asset register maintenance to include update frequency.

- responsibility for asset register maintenance

- schedule asset register updates - develop monitoring procedure

December 2011 Asset Officer Internal

Develop Drainage Maintenance Strategy incorporating:

- Inspection frequencies - Hierarchies - Maintenance levels of service

March 2012 Asset Officer / Manager

Operations Internal

Develop a parks strategy to consider: - current provision levels of parks - strategic requirements - current use

March 2012 AMWG Internal

Annual Tasks Task Responsibility Review and update the AM Improvement Strategy

AMWG

Review the AMWG to ensure it reflects the “whole of organisation” approach

AMWG

Review the AMWG Terms of Reference

AMWG

Review the Roles & Responsibilities Matrix AMWG

Review and update building AM plan

AMWG

Review and update road AM plan

AMWG

Review and update parks AM plan

AMWG

Review and update bridges AM plan

AMWG

Review and update drainage AM plan

AMWG

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