‘Asset Management – It’s not just Renewal’ Clare Gibson Manager Assets City of Port Phillip May 2013 Good Morning. I have been watching presentations on Asset Management and Capital Works Planning for the past 8 years but rarely have I seen the two discussed in one presentation, except when discussing renewal funding. Also in 8 years I swore if I presented that I would keep it short. As we all know Renewal is only one of the expenditure types in the Capital Works Program. Where do the new, upgrade and expansion requests come from? Generally the Service Managers. Unless of course you have linked [Click]

Long Term Financial Plan Asset Management Plans Long Term Financial Planning Page 2 Long Term Financial Plan Service Plans OPEX - Recurrent Asset Management Plans CAPEX - New & Upgrade CAPEX - Renewal Renewal Modelling Comparative Choice Modelling OPEX – New Initiatives Capital Works Program Resource and Funding Needs Integrated Service (Business) Plan External Factors External Influences *Source: CT Management Group 2012 your Service Plans and your Asset Management Plans which then directly feed into your Capital Works Program and then your Long Term Financial Plan. As detailed in this slightly modified diagram, prepared by CT Management Group. Can I get a quick show of hands of who has successfully done this? About this many people... I’d love this to be the case at City of Port Phillip but, we’re not there yet. So what are we doing to ensure that this important link between services, assets and finance exists?   My speech this morning is to share with you three lessons that I’ve learnt when trying to establish and maintain the connection with services, asset management and capital works planning.

Lesson One: We can’t and shouldn’t do it alone – we need buy in. First Lesson: I'll start with where I started, the "the asset planner can do it all approach" - I started as an Asset Planner - I was given the task of writing the Building Asset Management Plan - Sounded easy enough... - Find out what we've got, surely we have one asset register with all of the attributes - understand the lifecycle costs associated with the Assets - yep, dump from finance system - understand the levels of service - too easy, this will be in the contracts How wrong was I! -But Hang on I'm an engineer, I'll put some spreadsheets and processes together and I'll create a plan that way. - Yeah, that could work if I wanted a document that would just sit on a shelf.  [Click] Lesson one, we can't do it alone and we shouldn't if we want buy in. We need to work with the organisation. Page 2

Not everyone is excited about Asset Management - Buy in isn’t easy Lesson Two: Not everyone is excited about Asset Management - Buy in isn’t easy Second Lesson – A pretty quick one   How many of you have experienced watching others in the organisation roll their eyes and nod off when you discuss Asset Management? I’m sure we’ve all experienced it.  [Click] Lesson two: not everyone is as excited about asset management as we are – getting buy in isn’t easy. Page 2

This one takes a bit longer... Lesson Three: This one takes a bit longer... Third Lesson: This one takes a bit longer...   How do we get the organisation involved in Asset Management? What is the organisation interested in when it comes to assets? Answer: Capital Works, Everyone wants a piece of the Capital Works budget! Time to link the two. [Breathe] We were using the [click] Page 2

Local Government Asset Investment Guidelines “Local Government Asset Investment Guidelines." Released in 2006 by the then DVC, who then became the DPCD, and are now the DTRLI (Department of Transport, Planning and Local Infrastructure) for our Capital works Planning. I’m not sure how many of you remember this document or have never seen it before, so I thought that it was worth referencing.   This document is still very relevant and is the document we use as our Capital Works Planning Framework. How could we use this document to bring CW and AM together? For starters, the name of the document hints at it: Asset Investment, bringing together asset management and budget decisions. Page 2

Phases of the Asset Investment Process The asset investment processes detailed in the document describes the eight phases with planning and criteria selection for the initial appraisal through to post project evaluation. Then there’s the [click] Page 2

Phases of the Asset Management Lifecycle Phases in the asset management life cycle from any AM document: Page 2

Common Stakeholders Asset Owner Asset Manager Service Manager Page 2 Asset Owner Service Manager Asset Manager Projects Manager Finance Manager Maintenance Manager Who are the common stakeholders involved in the decision making processes for both: Asset Owner, Service Manager, Finance Manager, Maintenance Manager, Project Manager and Asset Manager So why not bring these people together to inform our asset management and capital works planning decisions.

Asset Management Teams The Objectives of these teams are to participate in: Strategy development and implementation AM Plan development and implementation AM Plan operation Capital Works Planning process Capacity building We have done this by creating Asset Teams for all of our Asset Classes. These teams have staff from all across Council, which represent a part of the asset life cycle. Including staff from areas that work with all of our assets, like Sustainability and City Strategy. The objectives of these teams are to participate in the following: Strategy development and implementation AM Plan development and implementation AM Plan operation Capital Works Planning process Capacity building

Asset Team Conversations Services Manager – “Anyone thought about the waste management trucks that we use the roads for and how we are going to access the bins?” Maintenance Manager – “Is that building finally planned to be completed this year? We will have to include an increased budget bid for the maintenance.” Service Manager – “Can we incorporate some of the works into one program – we have renewal, safety and sustainability programs, can we combine them, so that they're coordinated and lessen the impact on the service. When discussing the capital works program, including the new submissions with each of the Asset Teams, we gave them a fairly informal evaluation criteria. - is the project ready? - how good is the budget estimate? - is the project in the right year? Can it be moved or removed? Or is there a risk if it doesn't proceed? - has design and construction been separated into separate years?   The conversations started and before we knew it the team's were having Asset Management conversations without us needing to say anything more: Examples were: Waste Services Manager - Anyone thought about the waste management trucks that we use the roads for and how we are going to access the bins? - Building Maintenance Manager – Is that building finally planned to be completed this year? We will have to include an increased budget bid for the maintenance. -Roads Service Manager- Can we incorporate some of the works into one program – we have renewal programs, safety and sustainability, can we combine them, so that they're coordinated and lessen the impact on the service. Project Managers: That budget looks a bit underdone. Finance Manager - Is it balanced yet? In having the staff from all of the stages of the asset lifestyle together, Asset Management happens. We have buy in and more informed decisions.

– Buy in makes everything easier. Lesson Three: Bringing people together is more powerful than any spreadsheet or document. – Buy in makes everything easier. Lesson Three: Bringing people together is more powerful than any spreadsheet or document. – Buy in makes everything easier.   Asset Management is by definition an organised way of using resources, finances and skills to deliver a target level of service at lowest long term cost for the present and future communities. By working together, we can achieve this. I hope that my presentation today has shown you that we can. I'm excited about Asset Management and I hope you now are too. [Click] Page 2

Thank You! Page 2