APPLICATION OF THE NAMAF (NATIONAL ASSET MANAGEMENT ASSESSMENT FRAMEWORK) TO IMPROVE ASSET MANAGEMENT IN DUBBO, NSW

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1 APPLICATION OF THE NAMAF (NATIONAL ASSET MANAGEMENT ASSESSMENT FRAMEWORK) TO IMPROVE ASSET MANAGEMENT IN DUBBO, NSW Abstract Stewart McLeod Director Technical Services, Dubbo City Council, NSW Mark Loaney Director, Oranasoft, Mudgee NSW Dubbo City Council, a major regional City in central NSW with a population of 41,000 people, has long been focused on responsibly managing its asset base. In 2009/10 it sought to improve the management of infrastructure by engaging Review Today to undertake a financial sustainability review of the whole Council. This review included an assessment of the state of Council Infrastructure together with estimated costs to address funding gaps. An important outcome was the creation of a Superior Asset Management project to undertake a full review of Council s asset management practices and processes to ensure accurate and up to date information is available. The consultancy Core Business facilitated a self-assessment (July 2012) using the 11 elements of the National Asset Management Assessment Framework (NAMAF). This assessment indicated that Council had 43% compliance, with significant opportunities for improvement. The NAMAF allowed Council to develop a detailed improvement plan that resulted in Council achieving 87% compliance by March 2015, and has now moved it from a Core competency level to Advanced competency. This paper details the activities and improvements achieved over the past two and a half years by creating and updating responsibilities, processes, data management, asset condition and renewal modelling. Details on the infrastructure backlog and funding gaps across all the major asset groups have been quantified and used to develop the Council s latest Asset Management Strategy. Keywords: NAMAF, asset management, strategy, backlog, funding gap, improvement program Introduction Asset management as a discipline was introduced to NSW Councils in The new Local Government Act of that year required all Councils for the first time to recognise their assets on a balance sheet, with a due by date of 1 July 1995 for all classes of assets. Australian Accounting Standard (AAS) No. 27 Financial Reporting By Local Government detailed how this was to be done. The earliest technical guidance for the industry was that provided by the NSW Department of Public Works. They published Strategic Business Planning Guidelines for use with water supply and sewerage assets in November 1993, which included very detailed chapters on asset management as we know it today. One of us (McLeod) was on the steering committee set up by the Department to oversee these Guidelines as they progressed from Draft to Final form. This exposure made Mr McLeod an early adopter and champion of asset management within NSW Local Government. The second major resource made available to industry was the IPWEA (then IMEA) National Asset Management Manual published in October This has now become the widely read and used IIMM. Dubbo City Council (DCC) duly completed its first cut of asset registers for roads, water supply, sewerage, drainage, parks, gardens and buildings by 1995 as required. ROCOND rating of roads was undertaken between 1993 and 1995, updated again in 2001, and then periodically thereafter up to the present day. Mr McLeod has a history of working with identified industry leaders to update and

2 improve DCC s asset management practices. Ballarat City Council won the 1997/98 Australia and New Zealand Asset Management Quality Competition, so a visit was made there to absorb new and better ideas. In 1999 Max Anderson of the Melbourne consultancy MWH was engaged to introduce advanced asset management techniques for Council s water utility function (water supply and sewerage), and continued to carry out that role until In 2000 Council engaged Jeff Roorda of JRa to prepare a Transport Asset Management Strategy for Dubbo (published 2001), and this was updated at various intervals in 2005, 2007, 2008 and Also in 2009 DCC became a NAMS.Plus Council and migrated all of its existing Asset Management Plans into that new format. In December 2008 Professor Percy Allan of Review Today was invited to Dubbo to undertake a Sustainability Review of DCC including its asset management capability. This latter component was sub-contracted to GHD Pty Ltd. The result in 2010 was a Review which warned of apparent backlogs in Council s asset renewals which needed to be addressed urgently to avoid the Council becoming unsustainable. Road funding was reported by Prof Allan as the elephant in the room, most of the other is mice and rats. Improvements to Council s existing asset management processes were also recommended. In 2010 Mr McLeod became aware that the NAMAF was under development by the Australian Centre of Excellence for Local Government (ACELG). It was recognised immediately by him that this new conceptual framework/checklist represented a step change in Councils ability to implement asset management more holistically than previously. Superior Asset Management Project After lengthy consideration of the Percy Allan Review, Dubbo City Council formally committed in July 2012 to what it termed a Superior Asset Management Project. Mr McLeod commenced the project by engaging Bruce Lorimer and his Core Business consultancy team from Western Australia. Lorimer s initial action was to facilitate a workshop with key internal staff to complete a self assessment using the NAMAF at a Core level. This tool provides a nationally consistent approach and enables an assessment on progress in implementing the LGPMC Financial Sustainability Framework. Further details on the NAMAF are available on the LGAM Knowledge Base website ( A self-assessment tool is also now available via the NAMS Plus web portal. Essentially, the assessment consists of eleven (11) elements and at core level seventy six (76) objectives to achieve core compliance. The elements are: 1. Strategic Long Term Planning 2. Annual Budget 3. Annual Report 4. Asset Management Policy 5. Asset Improvement Strategy 6. Asset Management Plans (AMPs) 7. Governance and Management 8. Defining Levels of Service (LOS) 9. Data & Systems 10. Skills and Processes 11. Evaluation The result of the self-assessment in 2012 indicated that DCC had a 43% compliance with these objectives. An improvement plan (Appendix A) was developed and recommended by the Asset Management Working Group (AMWG) to the Executive Staff Committee (ESC). This plan was adopted in December The implementation of the plan is being project managed by Mark Loaney from Oranasoft and is being overseen by the Asset Management Working Group, which consists of 20 representatives from across the organisation. From this a core team of 7 have been undertaking most project tasks.

3 Monthly reports are presented to the ESC who have provided strong leadership to ensure progress of the project. Council has improved significantly since the original assessment and achieved 87% overall compliance by March Strategic Long Term Planning Dubbo City Council already had a robust framework in 2012 around the development of a strategic long term plan having finalised development of its Community Strategic Plan (CSP) Dubbo A gap existed in the alignment of the AMP s with the CSP. The asset plans developed originally did not contain long term renewal modelling or forecasting of operations, maintenance and other capital works. Over the past two years with the capture of condition ratings on all major asset components, and completion of the asset registers, Long Term Financial Plans (LTFPs) have been included in each AMP and summarised in the Asset Management Strategy (AMS). For the first time, this analysis is being used to assist in the development of the Council LTFP, and is now available to link into the Delivery Programs. Any changes made to the LTFP during the adoption of the budget will be reflected in the next round of AMP s and the AMS. This element has improved from 80 to 95%. Annual Budget Due to the lack of integration between long term forecasts for asset expenditure and the LTFP, Council did not have the integration expected under the NAMAF for budgeting. Work has focused on updating the Operational Plan template to clearly explain the assumptions and methodologies used to underpin the estimates included, and how these align with the CSP and AMP s. The element has improved from 75 to 100%. Annual Report The annual report produced by Council met the requirements of the NSW Office of Local Government (OLG), however under the NAMAF there was a gap in reporting how variations between actual and budget figures impact on the LTFP. The poor linkages between AMPs and LTFP affected the performance within this criteria. Development of the AMP LTFP can now be used to assess the impact of these changes. This element has improved from 70 to 100%. Asset Management Policy Council had adopted a policy as part of the CSP which met most of the requirements of the NAMAF. Improving the policy required detailing linkages with the Strategic Long Term Plan and LTFP. The updating of the policy to ensure it complied with these requirements was straightforward with the updated policy adopted by Council in April This element has improved from 70 to 100%. Asset Improvement Strategy Originally the Asset Management Strategy didn t include most of the elements required under the NAMAF. It had poor linkage to the policy and lacked integration with strategic longer term planning and annual budgets. The NAMAF workshop and gap analysis helped focus the development of an improvement plan which was subsequently incorporated into the AMS. The AMS (Appendix B) was completely rewritten focusing on the requirements of the NAMAF and setting the requirements for the development of the AMP s. The improved AMS was adopted by Council in June From discussions with Councillors and General Managers in recent years, it has become obvious that the Executive Summary in the AMS needs to be a punchy document

4 that provided a good overview of the findings of the AMPs and forecasted financial data. The following table and graphs extracted from the AMS highlight the high level information sought, focusing on the funding gap and backlog as well as the overall asset condition based on replacement value. The rolling backlog is the shortfall in funding in any year, it is not a cumulative figure. This element has improved from 42 to 100%. Asset Management Plans Dubbo City Council has had a suite of Function Plans since the early 1990 s that cover each business unit within Council. As a result details on the management of assets were scattered throughout a number of these documents. The most impacted were buildings which had minimal asset information scattered across 24 Function Plans. Under the NAMAF, 22 core objectives are identified to assist in developing robust asset management plans.

5 In the first year, the information from the Function Plans was collated to develop 6 Asset Management Plans: 1. Transport 2. Water 3. Sewer 4. Drainage 5. Buildings 6. Parks & Landcare Within each a hierarchy was developed, linkages made to the AMS and CSP, and a first cut renewal model developed based on very high level data and average lifecycle costs. These plans were adopted by Council in June Over the next 12 months, the team spent considerable time improving the knowledge of their assets and ensuring that asset registers were complete and accurate. A Condition Assessment Manual was developed that contained photographs of all the major asset components in each condition on a 0 to 10 scale. This information was then used to rate these assets. The next key element was the determination and documentation of useful lives. A review of the actual life being achieved indicated that water, sewer and drainage pipes were lasting much longer than originally modelled. Road pavements in residential areas were increased to 90 years and collector roads to 60 years. The AMP template was modified to capture the core elements of the NAMAF, with a focus on making the plans more readable. Their length reduced to around 30 pages, with a 1-½ page executive summary. Each AMP has sections dedicated to renewals, upgrade/new, maintenance and also operational expenditure. One of the main challenges in bringing this information together was the ability to extract historical information from the Financial System. The separation of renewal and maintenance was particularly challenging. Work is currently underway to code the General Ledger so that historical costs and future budgets can be extracted for development of AMPs. Each AMP now incorporates a 20 year LTFP for each of these programs which is rolled up into the AMS. This information is also being used to assist in the development of the Corporate LTFP. The intent is that the information from the AMP s will be finalised in October and used to assist in the development of forward budgets. The Council will determine spending during April and June. This information will then be used in the next suite of AMP s. Future focus is on improving knowledge of the assets and their rate of deterioration, incorporating the corporate ERM (risk) analysis and improving details on Levels of Service. This element has improved from 13 to 84%. Governance and Management Dubbo already had a strong corporate asset focus with an Asset Management Working Group (AMWG) having been established in The existence of this group has enabled the excellent progress on the NAMAF improvements detailed in this paper. The first task was reviewing the roles and responsibilities for Assets within the organisation. A matrix of asset responsibilities were workshopped, together with the assets and those staff having asset responsibility. Position Descriptions were updated and assisted in identifying training needs. A Capital Works Evaluation Framework was developed that uses the Council Intranet to score and prioritise future capital projects. This element has improved from 71 to 100%. Levels of Service The 2014 AMP s included a review of the LOS previously identified. We decided that there were too many indicators that didn t tie clearly to the LOS we considered the community were seeking.

6 The LOS were simplified and presented in a format that tightened the linkage to the CSP, however more work is still required. The IPWEA training on the Practice e (8) has helped the team identify the improvements required. The final phase will be the development of Service Plans in consultation with the community and investigating the cost of providing services at differing levels. This element has improved from 31 to 56%. Data & Systems Good detail was held on water and sewer pipe network data in PipePak, however the data for Transport and Park s whilst detailed was only captured within spreadsheets. The drainage network is also captured in PipePak, however there had previously been a period where the data was not kept up to date, hence some time has been needed completing this data set. Of all the data, buildings were the most incomplete. The only information available was either contained within insurance registers or the capital value register. As part of our project all buildings were inspected, components measured, condition rated, and captured in the Buildings Plus system by a contractor working with staff. This system had the flexibility to also capture Parks information and due to the facility structure we were using, this became a good option for Council. To enable validation of the Transport data and undertake modelling, the spreadsheets were imported into the Civica AM system. Linking this system with the GIS made it easier to identify data gaps. Council worked with the supplier of PipePak to modify that system to undertake renewal modelling (updates delivered mid 2014). While there is a common framework for the capture of data and the information needed, none of these systems apart from Civica s can easily integrate with the financial system. The process to import asset data into the corporate Capital Value Register is an arduous one and can currently only contain a snapshot of information at the time. Council is considering an option to investigate a single corporate asset management system. If that doesn t occur, the project identifies the need for a more formal linkage between the systems. As part of this element, a number of processes are required. Rather than have a disparate range of policies, procedures and flow charts, a decision was made to develop an Asset Management Manual (AMM). The intention is that this will be the go to source of information for all asset management activities required within Council. It continues to be a work in progress, with the following sections in a final draft form (March 2015): 1. Roles & Responsibilities 2. Governance and Management 3. Consultation & Communication 4. Data & Systems 5. Life Cycle Analysis & Costing 6. Capital Evaluation Preliminary flow charts have been developed for operations, maintenance, project management, and asset creation processes for inclusion in the AMM. At present unit rates are stored in the individual asset management systems, however the process for determining and updating these rates will also be included in the AMM. This element has improved from 44 to 91%. Skills & Processes Processes have been developed to ensure that the AMS and AMP s are updated and adopted by Council at least on a 5 yearly cycle, with the last plans adopted in A number of informal processes exist for the handover of new assets and ensuring that

7 they are captured in the appropriate systems (AMS / GIS). Work is underway this year to investigate the implementation of ACDC to automate the capture of data and support formal asset handover. As a result of defining responsibilities in the Governance element, training needs for key staff were identified. Meetings were held in each division to confirm whether skills needed were already held or whether they would benefit from training. Based on these sessions, 3 priority areas were identified for the first round of training. Sessions were facilitated by Mark Weller from Core Business over 5 days in October 2013 with over 40 staff attending at least one of the following sessions: Conduct Asset Inspections (2 x 1 day) Coordinate Asset Maintenance (2 x 1) Whole of Lifecycle Analysis (1 day) A second round of training was held on Project Management in April 2014 with a 2- day course attended by 25 people. These 4 courses covered the highest priority areas within Council, however additional training needs have been identified and courses scoped (Appendix C). This element has improved from 45 to 80%. Evaluation The final element included in the NAMAF is the evaluation of the improvement processes. At this stage minimal formal work has been undertaken on documenting the evaluation process. However monthly reports are presented to the AMWG and ESC for review and feedback. As part of the finalisation of the 2014 AMS and AMP s, Council engaged Morrison-Low to undertake an audit of the plans and Council s overall progress in its Asset Management Process. The results of this audit were very pleasing with Council achieving a score of 7.2, just below Morrison-Low s assessment of an advanced level of competence (requiring 7.5). Since the audit, a major gap being the identification of critical assets has been addressed in the AMS and AMP s. This would move the overall score up to 7.5. This element has improved from 17 to 42% Conclusion Measuring the maturity of Dubbo s asset management processes and documentation against the NAMAF enabled the development of a clear project plan to ensure effective improvements were achieved. Over a period of some 30 months Dubbo City Council was able to progress from Core competency to Advanced competency in its asset management. Successful delivery of the project required exceptional support and direction from the General Manager and Directors. This enabled the allocation of resources and time to complete the tasks necessary. The project required the focus of a project manager to keep activities moving along and to provide mentoring to staff undertaking the activities. For a project of this size and with the timeframes defined, it s important to recognise that external help may be required, especially if there isn t an asset team whose sole focus is on Asset Management. As with all projects, it was important to define tasks, timeframes and responsibilities, then monitor and report on progress. The easy tasks were the long term financial plan, annual budget and annual report as these tasks were already operating at a mature level within Council. The development of the Policy was also an easy target. Most time has been spent improving the knowledge of our assets and developing robust AMP s. With detail information on our assets, the revaluation of transport and drainage was a far less arduous process. Over the coming months the focus will be on improving details relating to LOS, risk management, system integration and

8 updating condition assessments and the AMS and AMP s. The following figure from the AMS highlights the progress made at Dubbo and compares this performance to benchmarked Councils from Core Business obtained in late Figure 1.3 Status of the NAMAF Improvement Program

9 Appendix A : NAMAF Improvement Plan e that the improvement plan has been continually updated over the past 30 months, with new tasks identify to assist in the effective management of assets. The scoring in the body of the report reflects Council s achievement of the key elements in each objective. # Details Status Due 1 Strategic Long Term Planning On Track 31/03/ Council has a Strategic Longer Term Plan (planning horizon of at least 5 years) that incorporates a vision, strategic outcomes, mission, values and service outcomes that Council wants to achieve. 1.2 The development of the Strategic Longer Term Plan included community consultation and reflects community needs. 1.3 The Strategic Longer Term Plan incorporates priorities and performance measures and indicates how they will be monitored and measured. 1.4 Council has a sustainable Long Term Financial Plan covering the period of the Strategic Longer Term Plan (at least 5 year) supporting the implementation of its Long Term Plan. 1.5 The Long Term Financial Plan has been prepared based on the resource requirements and strategic objectives detailed in Council s Long Term Plan and Asset Management Plans. Completed 30/01/2013 On Track 31/03/2017 Completed 9/04/2013 Completed 1/12/2012 On Track 31/03/ Annual Budget Completed 16/03/ The Annual Budget contains estimates of revenue and expenditure with an explanation of the assumptions and methodologies underpinning the estimates, an explanation of the financial performance and position of the Council and has been prepared based on the resource requirements and strategic objectives detailed in Council s Strategic Longer Term Plan, Asset Management Plans and Long Term Financial Plan. 2.2 The Annual Budget reflects the Council's strategic objectives and contains a statement of how Council will meet the goals and objectives of its Strategic Longer Term Plan. 2.3 The Annual Budget aligns with Year 1 of the Long Term Financial Plan, and was adopted following community consultation 2.4 Council s Annual Budget includes resources to implement Strategic Longer Term Plan strategies. Completed 16/03/2015 Completed 16/03/2015 Completed 16/03/2015 Completed 16/03/ Annual Report Completed 1/10/ The Annual Report complies with all statutory requirements including publication by the due date and is made widely available to the public. 3.2 The Annual Report includes independently audited financial statements that are prepared on an accrual basis in accordance with the Australian Accounting Standards. 3.3 The Annual Report reviews the performance of the Council against its strategic objectives and explains variations between the budget and actual results and how these variations impact on the Strategic Longer term plan 3.4 The Annual Report includes details of any major changes in functions of the Council, organisation structure and/or policy initiatives and how these changes might impact on Council s Strategic Longer Term Plan Completed 1/09/2013 Completed 31/10/2013 Completed 31/10/2013 Completed 30/10/2013

10 # Details Status Due 3.5 In relation to the financial reporting framework in the Annual Report, the Annual Report addresses the following issues in accordance with relevant state policies, Australian Accounting Standards and other best practice guidelines: a. Asset valuations and revaluations b. Asset acquisitions including capitalisation policy c. Asset disposals Completed 1/10/ Asset Management Policy Ongoing 30/3/ Council has an adopted Asset Management Policy which defines the Council s vision and service delivery objectives for asset management. 4.2 The Asset Management Policy has a direct linkage with Council s Strategic Longer Term Plan and Long Term Financial Plan. 4.3 The Asset Management Policy requires the adoption of Asset Management Plans informed by community consultation and local government financial reporting frameworks. 4.4 The Asset Management Policy defines asset management roles, responsibilities and reporting framework. 4.5 The Asset Management Policy identifies a process for meeting training needs in financial and asset management practices for councillors and staff. Completed 1/04/2013 Completed 13/02/2013 Completed 13/02/2013 Completed 15/02/2013 Completed 1/03/ Asset Improvement Strategy Ongoing 6/10/ Council has an Asset Management Strategy which shows how the asset portfolio can meet the service delivery needs of the community and defines the future vision of asset management practices within Council 5.2 Council s Asset Management Strategy is linked to Council's Asset Management Policy and integrated into Council s Strategic Longer Term planning and annual budgeting processes. 5.3 Council's Asset Management Strategy documents the current status of asset management practices (processes, asset data and information systems) within the Council and what actions Council must take to implement the Asset Management Policy, including resource requirements, timeframes and accountabilities. Completed 13/02/2013 Completed 13/04/2013 Completed 18/12/ Asset Plans Ongoing 30/11/ There are documented Asset Management Plans for all material asset groups in a consistent format in accordance with industry best practice (E.g. Appendix A of the International Infrastructure Management Manual (IIMM)) available to all relevant staff across the organisation. 6.2 The Asset Management Plans define which asset groups are covered by each Plan in accordance with a clearly documented Infrastructure Asset Hierarchy. 6.3 a. AMP refers to Council's Asset Management Policy and Asset Management Strategy; 6.4 b. AMPs Include all assets and document asset inventory information for the asset group/category as recorded in the asset register; Completed 1/02/2013 Completed 1/02/2013 Completed 1/02/2013 Completed 1/02/ c. AMPs Document the asset hierarchy within each asset group; Completed 1/02/ d. AMPs Document the current condition of assets; Completed 31/07/ e. AMPs Document the adopted useful lives of assets; Completed 3/10/ f. AMPs Include risk assessment and criticality profiles; On Track 25/09/2015

11 # Details Status Due 6.9 g. AMPs Provide information about assets, including particular actions and costs to provide a defined (current and/or target) level of service in the most cost effective manner; 6.10 h. AMPs Include demand management forecasts; Completed 1/08/2015 1/08/ i. AMPs Address life cycle costs of assets; Completed 27/05/ j. AMPs Include forward programs identifying cash flow forecasts projected for i. Asset Renewals; 6.13 j. AMPs Include forward programs identifying cash flow forecasts projected for ii. New Assets and Upgrades of existing assets; 6.14 j. AMPs Include forward programs identifying cash flow forecasts projected for iii. Maintenance expenditure 6.15 j. AMPs Include forward programs identifying cash flow forecasts projected for iv. Operational expenditure (including depreciation expense); 6.16 k. AMPs Address asset performance and utilisation measures and associated targets as linked to levels of service; 6.17 l. AMPs Include an asset rationalisation and disposal program; and Completed 14/08/2014 Completed 1/09/2014 Completed 30/06/2014 Completed 30/06/2014 On Track 6/10/ /09/ m. AMPs Include an asset management improvement plan. Completed 30/09/ n. AMPs Include consideration of non-asset service delivery solutions (leasing private/public partnerships) 6.20 o. AMPs Recognise changes in service potential of assets through projections of asset replacement costs, depreciated replacement cost and depreciation expense The Asset Management Plans link to the Council s Asset Management Policy, Asset Management Strategy, Strategic Longer Term Plan, Long Term Financial Plan and other relevant Council Policy objectives The Asset Management Plans have all been prepared in association with community consultation. 30/09/2016 Completed 3/10/2014 Completed 1/10/ /11/ Governance and Management Ongoing 31/07/ Council has mechanisms in place to provide high level oversight by the Council, CEO/GM and Executive Management Team, for development and implementation of the Asset Management Strategy and Asset Management Plans. 7.2 Roles and responsibilities are clearly defined in a matrix or policy, identifying positions responsible for determining levels of service and positions responsible for managing the assets to meet service delivery needs 7.3 The staff structure and position descriptions clearly define asset management functions, responsibilities and skill requirements for managing all asset classes. Completed 6/08/2013 Completed 25/03/2013 Completed 30/04/2013

12 # Details Status Due 7.4 Council has a documented process for making capital investment decisions, which is driven by Council s Strategic Longer Term Plan, Long Term Financial Plan and the Council Plan and explicitly details the impacts on the future operations and maintenance budgets, Whole of Life costs and risk management assessments. Completed 31/07/ Council involves all its departments in Asset Management. Completed 5/02/ Council has an Asset Management Steering Committee, with cross functional representation and clearly defined and documented terms of reference, focussed on coordinating the linkages between service delivery and asset management implementation. Completed 1/12/ There are internal processes to promote Asset Management across Council Completed 29/11/ Levels of Service On Track 30/09/ Council has Service Plans for each of its services which have been developed in consultation with the community. 8.2 Council has undertaken the process of defining, quantifying and documenting current community levels of service and technical levels of service, and costs of providing the current levels of service. 8.3 Current and target levels of service (for both community levels of service and associated technical levels of service) are clearly defined in each Asset Management Plan. 8.4 Technical levels of service are incorporated into service agreements and/or maintenance, operational and capital renewal procedures. 30/09/ /09/2015 On Track 30/09/ /09/ Data & Systems On Track 30/06/ Council has a consolidated, integrated, accurate, up to date and complete componentised asset register with the required functionality to ensure security and data integrity, which includes all information about each asset sorted by asset group. 9.2 There is a common corporate data framework used across all asset groups, which is defined by Council s Infrastructure Asset Hierarchy. 9.3 Council has documented repeatable methodologies to carry out consistent asset condition surveys and defect identification assessments, as documented in a Condition Rating Assessment Manual for applicable asset classes 9.4 Council's asset financial reporting functionality is comprehensive and includes audit trails, depreciation calculations, reporting thresholds and records of acquisition and disposal of assets 9.5 Council's systems, procedures and processes allow it to benchmark its asset management performance against like Councils over time. 9.6 Asset Management systems have the functionality to generate maintenance and renewal programs and produce associated cash flow forecasts. 9.7 Council has defined and documented procedures for determining asset replacement and treatment unit rates, which are then stored in Council s Asset Management system. 9.8 Council has a defined process for operations, maintenance, renewal and upgrade planning for its existing assets. On Track 31/03/2015 On Track 30/06/2015 Completed 18/10/2013 Completed 30/03/2014 Completed 30/08/ /06/2016 Completed 28/04/2014 On Track 1/12/2015

13 # Details Status Due 10 Skills & Processes On Track 30/10/ Council has a process to review and update the Asset Management Strategy on a maximum of a 5 year cycle. The Asset Management Strategy is to be formally adopted by Council Council has a process to review and update Asset Management Plans for all asset groups on a maximum of a 3 to 4 year cycle consistent with the Council election cycle. Asset Management Plans are formally adopted by Council 10.3 Council has a process to identify operational risks, assign responsibilities and monitor risk treatment actions all recorded within a risk register Council has a process to annually review and update the financial forecasts for all asset classes and update the Long Term Financial Plan Council has assessed the skills and knowledge required to perform asset data management activities, conduct financial reporting valuations and develop Asset Management Plans. Council has a current asset management skills matrix. Staff training needs have been identified and training scheduled Council has a defined methodology for assessing the Remaining and Useful Life, Residual Value and Depreciation Method of assets Council has a process to collect and record asset data into an Asset Management system upon the commissioning of new (and/or modified) assets, including built and contributed assets Council has formal processes for the handover of assets to asset custodians/owners Council has a process to communicate the financial implications of the Asset Management Plans to internal and external stakeholders Council provides ongoing training programs for councillors, council management and officers on key asset management topics. Completed 30/04/2013 Completed 1/10/2014 On Track 30/04/2015 On Track 30/09/2015 Completed 27/09/2013 Completed 28/03/2014 On Track 31/03/2015 On Track 30/03/ /03/ /10/ Evaluation On Track 15/07/ Council has a documented evaluation process by which asset management improvements are identified, timeframes established, resources allocated, actioned, monitored and reported to the Executive Management Team and /or CEO Technical levels of service are monitored and performance reported. Community levels of service are monitored and performance reported. Commence d On Track 15/07/2016 1/07/2016 1/07/2016

14 Appendix B: Asset Management Strategy Contents The contents of the AMP s reflect closely that contained in the strategy. The key difference is the inclusion of works programs (maintenance, renewal, and upgrade / new) in the AMP s. 1. Executive Summary 2. Strategic Framework 3. Services Provided 4. Levels of Service 5. Condition of Council s Assets 6. Operations 7. Maintenance 8. Capital Renewal / Rehabilitation 9. Capital Upgrades & New Assets 10. Disposal Plan 11. Financial Plan 12. Key Performance Measures 13. Plan Improvements 14. Risk Management Plan 15. Appendix A: Example of Annual Service Costs 16. Appendix B: Improvement Action Plan (Feb 2015) 17. Appendix C: 20 Year Financial Plan (2014 $,000)

15 Appendix C: Training Priorities The following table was used to assist in the determination of which training sessions to conduct initially. A course outline was developed for each course and then staff with those responsibilities rated as low medium or high their need for training. The first three courses that were held are shaded.

16 Author Biographies: Stewart McLeod has worked in public works engineering since 1974, initially with the NSW Department of Public Works and then in Local Government from Stewart has held Director Technical Services positions at both Orange and Dubbo City Councils over the last 21 years, and received a Public Service Medal in the 2011 round of Australian Honours for services to public works engineering in regional NSW. He was an early adopter of asset management principles and practices in NSW Local Government and as early as 1999 presented a paper on asset management at Dubbo City Council to the APWA Conference in Denver, Colorado. Contact: Stewart.McLeod@dubbo.nsw.gov.au Mark Loaney has over 25 years experience in Local Government, commencing at Dubbo City Council in 1988 then continuing at Brisbane, Mudgee and Orange City Councils until Mark held senior management positions for nearly 20 years in Local Government. At the end of 2011 he commenced his full time consulting practice assisting Dubbo, Orange and Parkes Councils with implementation of Asset Systems and Strategies. At Dubbo and Orange he successfully led teams at each Council to deliver a total of 12 Asset Management Plans and 2 Asset Management Strategies, identify asset responsibilities and implement training programs together with development of process improvements and implementation of asset systems. Contact: mloaney@oranasoft.com.au