Best practice in asset management

The eighth national Local Government Asset Management Conference was held in Melbourne in May. As well as attracting delegations from both Abu Dhabi and Dubai, once again this event attracted asset managers and elected members from councils around the nation.

With the Federal Government warning that within the next four to five years infrastructure funding will be based on asset management compliancy with councils' strategic planning linked into this, all three spheres of government have been working together to achieve national consistency in asset management processes and practices.

Hosted by the Municipal Association of Victoria, this conference continues to grow in importance with the sharing of common practices and best practice vital.

Over the past decade Local Government has moved to address a situation where many councils had incomplete asset registers so didn't know what they owned or the current condition of their assets. Without plans in place for regular maintenance of assets, having lifecycle costs and the ultimately replacement of each asset factored in, this in turn seriously threatens a council's long term financial sustainability.

Speaking at the conference, Michael Courtney from CT Management Group told delegates that the key is the Council Plan.

He said the Council Plan is a reflection of the corporate vision a Council has for its community. But it is vital that this vision has the support of the community and all this must then be lined up with council's resource base.

"Find out what the community wants, and is prepared to pay for, and then determine what your council can do," Michael Courtney said.

He said if you can get the community to agree that rates need to rise by say 15 per cent to achieve a particular level of service, then you must deliver on this. People need to see the need for the additional rates and the results.

Ian Mann from CT Management Group said that some councils are doing very well with their Asset Management plans while other are struggling.

He said that councils need to review each of their assets and services and then ask the question, is it contributing to the sustainability of the organisation?

"Put simply if you can't afford it, get rid of it," he said.

Councils need to have asset management plans in place for each of its major asset categories. Assets are there to provide a service delivery to the community but there is often a lack of understanding of the link between services and assets, and the alignment of strategies and operations. All of this is then in competition for resources and funding.

"Everyone in the organisation needs to have a commitment to asset management," Ian Mann said. "It requires strong leadership and support from Councillors, the CEO and executive. The asset manager, services manager and finance manager must be working together."