Presentation Rockdale City Council Asset Management Improvements - LG Financial Sustainability...

ROCKDALE CITY COUNCILOne Community, Many Cultures

Lady Robinsons Beach

Rockdale NSW

• 12kms from Sydney’s CBD

• Neighbours- Marrickville, Kogarah, Hurstville, Botany & Sutherland

• Over 108,000 residents

• 39% CALD backgrounds

• 3 NSW Govt Priority Growth Precincts: Banksia, Arncliffe and Cooks Cove

• Train routes to the Airport and City.

Corporate OverviewAnnual Operating Expenditure $86 million

Annual Capital Expenditure: $43 million

Incl Two Major Projects; Rockdale Aquatic Centre and Rockdale City Library

Infrastructure assets $800 Million (WDV)

Staff 361 FTE

Corporate Directorates • General Managers Unit• Corporate and Community

Services• City Operations• City Planning and Development

Improving Rockdale’s Asset Management:

….towards best practiceVery Poor

PoorAverage

Good

Excellent

Rockdale – A Historical Observation...•Lacked Long Term Financial Planning and Strategic Focus

•Funding was directed to reactive and short term projects

•There was a level of satisfaction with existing practices

•Limited impetus for improvement, change or growth• Introspective and silo activity•Simplified and theory based asset accounting practices

•Limited community engagement about assets

Asset Accounting

Issues

• Annual depreciation very high and asset renewals very low resulting in a significant asset backlog

• Operating Deficit• Business risks

– Outdated systems– Lack of detailed data and information supporting

methodologies applied– Critical assets

A gradual and growing recognition of the need for change….

Planets begin to align…

• 2009– NSW IPR requirements introduced

• 2011– New Senior Leadership and Political Dynamics– Organisational restructure –IP&R & Asset Mgt– New injection of Staff– Independent AM audits highlight need for

improvement (T-Corp, NSW Infrastructure Audit, Morrison Low)

• 2012/13– Creation of Executive Officer Role– IMT review – Investment in technology required– Customer Service and Document Management

improvements highlighted other challenges– Local Government Reviews

• 2013/14– Impending SS7 Audit– Fit for Future

2013 NSW Infrastructure Audit

Assessed Rockdale’s Infrastructure Management as weak.

• The overall score of C would indicate that the Council is at a Core level of competence in asset management

• Should be at an advanced level or above for a Urban Sydney Metropolitan Council

Morrison Low Audit

Category AssessmentAsset Knowledge/Data C – Core LevelAsset Knowledge Processes D – Basic Level

Strategic Asset Planning Processes C – Core Level

Operations and Maintenance Work Practices

D – Basic level

Information Systems C – Core LevelOrganisational Context D – Basic Level

Assessment Description

A At or near best practice

B Advanced level of competence

C Core level of competence

D Basic level of competence

E Awareness

F Nothing/limited

What did Rockdale Do?

• Organisational Importance and Focus• Agreed Purpose & Priorities• Expert advice and support• Barriers broken and trust developed• Agreed Common Language• Role & Responsibility Clarity• Revised Methodologies• New Systems

ImprovementsRecommendations Status

SRVs Implemented – 2007, 2010/11 & 2012/13

Annual efficiency target from operational budget to asset renewal

Ongoing

More regular and consistent assetreevaluations programmed

Completed

Review and update asset condition data (with community consultation)

Completed

Review of SS7 and Depreciation Methodologies

Completed

Improvements

Recommendations Status

Further clarification of maintenance and operational costs

Completed

De-commissioning of surplus assets

In progress:

Asset Renewal efficiencies In progress

Review of Roles and Responsibilities / Restructure

Implemented

Introduce an new finance and asset management system

Current project : Tender evaluation completedPreferred vendor endorsed by Council

Ratio Benchmark 2013/2014

2014/2015

2015/2016

2016/2017

2017/2018

2018/2019

1. Operational Performance

Greater or Equal to 0

-.116 -.083 -.013 .038 .063 .08

2. Own SourceRevenue

Greater than60% average over 3yrs

82.9% 82.2% 83.4% 86.3% 87.3% 87.6%

3. Building and InfrastructureRenewal

100% 32% 48% 85% 107% 119.4% 109%

4. InfrastructureBacklog

Less than 2% 2.98% 1.45% 1.39% 1.38% 1.37% 1.36%

5. Asset Maintenance Ratio

Greater than 100% average over 3yrs

52% 67% 106% 106% 106% 106%

6. Debt Service Ratio Great than zero and less than or equal to 20%

2% 2% 1.90% 1.80% 1.80% 1.70%

7. Real Operating Expenditure

Decreasing Trend

.66 .64 .62 .61 .60 .59

ROCKDALES POSITION AGAINST FFF BENCHMARKS

Improving Asset Management is a Continuous Voyage

Lessons Learnt

• AM needs organisational focus and leadership• Establish and apply a common language • Its not all theory - Be practical & realistic • Seek independent expert advice and help when

needed• Press pause on the treadmill and check what

others are doing• Bring back the curious child in you! - Ask WHY

a lot?

Lessons Learnt• Understand your organization's receptiveness to

change and work with it – bringing people along with the change

• Building Trust and relationship management crucial

• Foster and enable a culture of improvement, give people the opportunity and tools

• Acknowledge and celebrate successes

Thank You