Asset managers around New Zealand are beginning the process of reviewing and updating their asset management plans to support the 2021 Long Term Plan process. Here’s some great advice I picked up on asset management plan writing during a training day with Ross Waugh, of Waugh Infrastructure, which Ross has kindly allowed me to share.
Waugh Infrastructure provides infrastructure asset management services to local government (as well as to public and utility services clients). In the past 20 years, the company has helped 75% of New Zealand councils with a range of work across assets, information systems and strategic planning functions.
Asset management plans need to be aligned with other council documents
This means making sure there is good information flow and alignment between three different levels.
- strategic documents (10-15 years) such as infrastructure and financial strategies
- tactical plans (1-10 years) such as asset management plans
- operational activities (year to year) such as service delivery contracts.
As an example, if a contractor provides an agreed level of service as outlined in their contract with a council, this may need to be varied to match up with changes in the levels of service in an asset management plan.
Another example is the need for infrastructure strategies, financial strategies and activity management plans to be well aligned.
Asset management plans need to have an interesting and memorable executive summary
An asset management plan is a technical document, but the front end needs to tell a story. This story goes in the executive summary, which feeds into the Long Term Plan (LTP) and the LTP consultation document.
When thinking about what to include in an executive summary, ask yourself ‘if you had two minutes with a Councillor to talk about the AMP, what would you tell them?
Use photos to support good asset management
Helping people (including councillors) see the assets being discussed can help with decision-making (so it’s not just a line in a financial list). For this reason it’s a good idea to include photos.
Ross gave the example of run-down pensioner housing. Seeing the living conditions being experienced by elderly people living in council housing made the issue real for councillors, who then agreed to the proposed funding for maintenance.
Watch out for spikes in financial forecasts
When developing financial forecasts, aim to even out spikes in spending, recognising these represent a workload spike as well as a price spike.
Consider what’s happening across the boundary
Be aware of the context in which you will be seeking tenders for large projects. For example, if a neighbouring council is about to do something huge, it affects construction costs for other jobs. The aim should be to stagger significant work to reduce contractor costs.
Consider who is going to deliver the actions in your plan
An estimated 50% of provincial NZ engineers will retire in the next 10 years, so succession planning needs to be in place to ensure councils have the expertise they will need in future, both in terms of council staff and contractors delivering services on behalf of councils.
Make it easy for staff to access the information that’s most relevant to them
An asset management plan may cover many different types of facilities, so having collated information at the back of the document allows a manager (e.g. of libraries) to pick up the section that’s most relevant to their work.
Base decisions on good condition assessment data
The amount of effort needed to gather data on the condition of assets is not uniform over the life of those assets.
One condition assessment will be needed following the construction of the asset, but the next assessment is unlikely to be needed for 10 years. The frequency of assessments will need to increase as assets become older (as they move through the mid-life maintenance phase and closer to the end-of-life decommissioning phase).
When employing people to collect condition data, ensure they know that you are using the data they are providing. It is human nature that if someone doesn’t think you are going to look at the data, the quality of the data being collected will go down.
If you currently have poor quality data on the condition of your assets, you need to make data capture a priority in your asset management plan. This can be a 5-10 year project, focusing on the most critical risks first.
Invest in investigations and innovation at the planning stage of a project
You have the greatest opportunity to optimise assets at the planning stage (for best long term costs). This is why it is cost-effective to invest time in identifying innovations at the stage of the initial investigation and design.
Make decisions before assets begin to quickly deteriorate
Facilities enter an accelerated deterioration curve towards the end of their life, with rising maintenance costs. Therefore a decision is needed before an asset reaches this phase on whether to replace or maintain this asset. (This is called optimised decision making.)
Improvement plans need to be specific
Asset management improvement plans need to be realistic about what can be achieved within three years. They also need to include details on who is responsible for doing the work, the budget, and a timeframe.
Financial considerations and trade offs
The components of asset management that affect asset management costs are:
- levels of service
- future demand (e.g. population trends)
- managing risks
- climate adaptation and sustainability.
If a council decides it has to reduce costs associated with your asset management plan, frame the discussion on whether they wish to alter:
- levels of service
- provision for future demands
- how risks are managed.
Thanks for reading this article. Please feel welcome to pass it on to anyone you know who is writing an asset management plan.