The actions suggested below are consistent with the asset management elements required in the OLG Integrated Planning and Reporting Manual (1.7MB, PDF).
Generally, the amalgamated council would standardise and combine asset information and asset management processes and policies of the amalgamating councils, establish a transitional Asset Management Strategy for the merged council, and ultimately a final combined plan. An alternative is to use existing plans and align with an overall framework.
Ideally, the merged Asset Management Plan(s) would tightly align with the objectives and service levels of a council’s strategic planning process and be based on available resources identified in the Long Term Financial Plan. However, during the amalgamation process, the strategic service levels of the original councils may no longer be accurate for the new council. In the short term it would be better to focus on the tactical and operational aspects of asset management planning so as to ensure that the new council is well placed to commence the development of new strategic plans as soon as is practicable. The transitional Asset Management Strategy should also be closely aligned with the transitional resourcing strategy and Long Term Financial Plan.
Additional information and useful materials can be found on the Resources page.
Stage 1 - Review
- Establish an Asset Management (AM) working group within a project management framework and commence project planning. Critical paths and/or timelines to be established.
- Collate from the amalgamating councils and review:
Asset Management Plans (IPR Manual Element 2.15 to 2.17) – It might be useful to consider the following points:
- Asset information and data (asset register, asset valuation, asset condition, data systems). A worthwhile exercise will be to undertake a full asset data audit documenting (but not limited to): data source, date of capture, data quality and completeness assessment, data system, dataset version, data location and data custodian.
- Asset management policies (IPR Manual Element 2.12) – Review key asset management principles; policies on asset management practices and processes, definition of and policies on parameters (e.g. useful life, unit rates, intervention level, asset condition, service levels); accountabilities and responsibilities for asset management; performance measures; audit processes; asset information systems; policies on human resources and training. Check the accuracy of asset management registers.
- Risk management strategies for identified critical assets (IPR Manual Element 2.13) – Which assets are critical assets and why? What are the identified risks and management strategies?
- Plans to improve asset management capabilities (IPR Manual Element 2.14) – What actions have been identified?
- Financial reporting (IPR Manual Element 2.18) - Review application of asset and infrastructure specific reporting in financial statements pursuant to Local Government Code of Accounting Practice and Financial Reporting. Review asset/infrastructure reporting in annual report.
- Asset Management Plans (IPR Manual Element 2.15 to 2.17) - It might be useful to ask the following questions:
- What asset management plans are in place?
- Are all asset included? Are there plans for all asset groups/classes? What are the asset groups/classes?
- Are asset groups/classes linked to service areas? What are they?
- Do plans refer to/establish defined levels of services (link to Community Strategic Plan and Delivery Program)?
- Do plans include risk management plans that identify risks and management strategies?
- Do plans outline whole of lifecycle cost of assets (operational, maintenance, capital)?
- What are the asset lifecycle management and resourcing strategies to deliver defined levels of service? If available, refer to IPWEA's Australian Infrastructure Financial Management Manual.
- Do plans report on current services levels and include gap analysis to defined service levels? What condition assessments do they include?
- Do plans undertake modelling for future renewal and upgrade requirements? Do they undertake demand forecasting based on Community Strategic Plan and Delivery Program (e.g. population growth)?
- Identify all business systems and critical functions. Identify all contractual obligations.
Stage 2 - Plan
Data and Systems
- Review priorities for achieving Commencement Day requirements. For guidance regarding Commencement Day refer to additional material contained under 'Commencement Day' on the Resources page.
- Identify and document preferred framework i.e. combined best practice, future tasks and responsibilities, language, definitions and processes.
- Compare and analyse all current state business systems, critical functions and contractual obligations. Identify disparate and similar systems.
- Convert to common format asset information and data as well as underlying asset management policies from the merging councils (e.g. create standards for common asset register, standardise valuation systems and ensure accurate valuations, standardise asset groups/classes according to Local Government Code of Accounting Practice and Financial Reporting; standardise condition assessment, standardise parameters/definitions from asset management policies. Advise ICT of inventory of all asset management systems.
Policies and Planning
- Establish an overarching asset management framework according to the IPR requirements (IPR Manual Elements).
- Establish framework of asset management policy, risk management of critical assets, asset management capabilities improvement plan, asset management plans, financial reporting.
Commence preparation of a transitional Asset Management Strategy based on Asset Management Strategies of merging councils (or use existing plans and align with the overall framework). In the preparation of this:
- Commence identification of significant / critical assets across all asset classes.
- Consider/establish common defined levels of service. These might only be preliminary as, at this stage, the merged councils might not have a Community Strategic Plan and Delivery Program.
- Identify asset condition according to standardised processes and policies and identify current levels of service.
- Consider risk management, demand forecasting, lifecycle management strategies and costs including renewal and upgrade modelling, financial projections.
- Establish common accounting practices, and statutory and management reporting.
- Establish common training and improvement needs and actions.
- Identify possible asset disposal options.
- Identify backlog.
- Refer to the IPR Manual (PDF, 1.7MB), and if available, IPWEA's International Infrastructure Management Manual and/or Australian Infrastructure Financial Management Manual. The latter are often owned by councils as reference tools or are available for purchase on the IPWEA web site.
- Commence workforce planning requirements in line with proposed service delivery, structure and levels of service.
Stage 3 - Mobilise
Data and Systems
- In consultation with stakeholders, finalise and document combined and standardised asset information and data systems.
- Initiate merging of data including test runs.
- Liaise with key business units to ensure integration and understanding of revised information and data systems i.e. strategic service planning finances, procurement, etc.
- Ensure new systems are documented, accessible and communicated. Ensure training is delivered.
Policies and Planning
- Finalise new asset management policy and framework for the new entity.
- Commence mobilisation of resources if applicable.
- Review the asset management transition plan to ensure validity.
- Ensure integration with other strategic instruments of merged council; i.e.: Community Strategic Plan, Delivery Program, Long Term Financial Plan and Workforce Plan.
- Ensure integration with internal budgeting process and financial reporting.
Stage 4 - Implement
Data and Systems
- Implement the Commencement Day plan to support the council through key systems and operational change (noting actions that will need to be completed for day 1 of the new council and those which can be implemented over a period of time).
- Ensure new systems and procedures are documented, accessible and well communicated.
- Ensure training is delivered.
Policies and Planning
- Continue monitoring integration as above.
- Finalise and adopt new asset management framework for the new entity.
- Consider implementing National Assessment Frameworks (PDF, 1.25MB) for Asset Planning and Management; and Financial Planning and Reporting in local government.