Infrastructure Asset Management in a Municipality

Infrastructure Asset Management in a Municipality

Ian Rae,Michael McQuillan
Auckland City Council Private Bag 92517 Wellesley Street
Auckland City New Zealand

Abstract
Auckland City Council is the largest multi-functional local authority in New Zealand. It has an annual turnover in excess of $400 million and has 1700 employees. Auckland City’s jurisdiction covers 592 square kilometres and includes approximately 380,000 residents. Legislative changes from the national Parliament in the late 1990’s required local authorities to adopt a significantly more disciplined approach to managing infrastructure assets which included accounting for depreciation.

Auckland City responded by setting up processes to produce asset management plans for all of Council’s assets. At the core of improved asset management are accurate asset registers to enable both asset planning and asset accounting.

Auckland City’s asset management system manages the City’s pipe networks (270,000 records in total), roading asset information (40,000 records) and parks and streetscapes asset records (15,000). It is tightly integrated with the Council’s GIS system and interfaces to the financial system for financial asset management and planning.

The system is now “live” and benefits realisation is beginning. It has been recognised that strategic I.T. planning, appropriate process design, information management principles and effective change management are all important contributing factors to address to ensure maximum delivery of benefits.

Introduction
Auckland is New Zealand's largest city, with a population of just under 382,000 within the city boundary and 1.18 million in the greater Auckland area. This represents about one third of the population of the whole country. The city and suburbs cover an area of 60 square kilometres, with many of the suburbs having their own unique character.

English is the main written and spoken language, with Maori, Polynesian and Asian languages also being spoken by ethnic communities. The climate is temperate, with warm summers (averaging over 24 degrees) and cooler winters (averaging 16 degrees). The summer months are between December and March. The prevailing wind is westerly.

The city is built on a narrow isthmus between two harbours, the Waitemata to the East and the Manukau to the West. The Waitemata is the main deep water shipping access, with extensive wharf facilities and the largest container port in the country. Water sports are a pastime enjoyed by a large number of Aucklanders and the city enjoys the reputation as being known as the 'City of Sails' due the number of yachts which sail in the harbours and the adjoining Hauraki Gulf. A Bill has passed through Parliament creating the Hauraki Marine Park and providing protection for a marine environment of national and international importance. Surrounded by extinct volcanoes and a myriad of picturesque islands in the Gulf, Auckland is presently home to the America's Cup yachting trophy.

Auckland is also the 'gateway' to New Zealand for tourism, with the country's largest airport serving 45 airlines. Cruise ships call each year especially during the summer period, with many of the passengers taking the opportunity to take tours of Auckland and the other tourist attractions of the country. The city of Auckland is the retail and commercial centre of New Zealand, with a number of head offices and businesses servicing commerce, manufacturing and tourism. Because it is the focal business centre for the region a large number of people commute daily into the city by bus, ferry, rail and private car.

Tourist attractions abound and the area is blessed with a number of spacious and clean beaches. The main tourist attractions within the city include: the Auckland Museum which houses one of the best Maori and Polynesian collections in the world, the Maritime Museum on the waterfront, Kelly Tarlton's Underwater World Aquarium, Auckland Art Gallery Toi o Tamaki, the Museum of Transport and Technology, the Auckland Zoo, Cornwall Park and the many ferry and scenic harbour cruises which operate to the North Shore and islands of the Hauraki Gulf. There are also a number of historic places and houses open for viewing. Fine views of the city can be obtained from the Sky Tower, Mt Eden and One Tree Hill.

Auckland City Council has embraced the use of technology to assist it in responsibly managing the diverse environment and the range of strategic infrastructure assets within it. From remote, sparsely populated islands in the Hauraki Gulf to the busy CBD, technology is exploited where possible to deliver enhanced service and operational efficiencies.

I.T. Strategic Planning
It would not be possible to adopt and use the opportunities available to us through technology without developing a strategic vision and plan of how technology can assist the organisation to achieve its strategic goals. Auckland City Council has developed an Information Technology Strategic Plan (ITSP) which provides the foundation for future technology direction and opportunities.

A number of key inputs were necessary in order to develop the ITSP. These were :

an environmental scan of key global and regional forces – attitudes and values, demographics, globalisation, environment and political
the strategic plan for Auckland City
the Auckland City Council business strategy

Examination of the driving forces led Auckland City to the conclusion that the local governments in New Zealand will have increasing demands put upon them by central government and their constituencies to take a leadership role and be active in:

creating the future
creating regional identity and cohesion
finding and implementing solutions to issues such as transport, environment, stormwater, wastewater and water supply.

For Auckland City Council to satisfactorily undertake the above roles, it was proposed that the ITSP be based on 3 foundation blocks:

effective regulation of citizenry
regional and national collaboration and cooperation for the common good
ffective and efficient management and delivery of services and information

Based on the foundation blocks a five-pronged strategy is proposed, based on a common theme of sharing both data and services, within and external to Auckland City Council:

Sharing or pooling of local government services.
Data sharing with other public and possibly private agencies.
Development of an efficient and effective regulatory system.
Data sharing within ACC.
Comprehensive, coordinated service delivery.

Each of these five business strategies has a corresponding set of IT strategy streams associated with it. Collectively these streams form the framework for the organisation-wide ITSP as represented in Fig1.

The strategy streams are further broken into components, which identify existing and future initiatives for the application of information technology. The 2002 version of the ITSP prioritised four activities that leveraged off the investment in information systems and information. Key here, is that leveraging off previous investment for further gains has been possible because of previous strategic visioning and planning – both in the business and technology infrastructure. Two of the four priorities related to the evolution of the spatial systems environment which includes the management of city infrastructure assets – pipes, parks and roads.

A key learning in developing the ITSP was that all business units of the organisation will not necessarily have developed business strategic planning to a point that the ITSP could work with. In response to such information gaps, the ITSP needs to contain a provocative element. Auckland City achieved this within it’s ITSP by challenging the businesses to consider new technology opportunities by assigning a probability to them occurring (from an I.T. view). The challenge then lay with the business to partner with I.T. to recognise or modify the planned outcomes.

Infrastructure Strategic Planning
Using the Information Technology Strategic Plan as input, it becomes possible to design with confidence a strategic information technology infrastructure. As key business strategies and functions of the organisation are agreed, the technology to deliver to these functions can be visioned and planned strategically.

Auckland City has a strong organisation goal of working as and being seen as “one organisation”. A key enabler to this achieving this goal has been the recognition of the importance of sharing information. The technology infrastructure has been designed to provide enterprise systems and information repositories, discouraging the development of other wise standalone “feral” applications.

The resulting corporate I.T. infrastructure can be illustrated quite simply in Fig 2 below

Strategic selection of systems and partners to manage the majority of council’s information sets and to support business processes has allowed us to restrict the number of corporate system applications to four. While there do exist other specific “line of business” systems e.g. library catalogues, zoo animal management and art gallery collections, the four cornerstone systems above deliver to the enterprise requirements. While these systems do interface directly with one another (ODBC, COM), there also exists a layer across them all that is a suite of capability that can access all sets to deliver to numerous other business process requirements e.g. business intelligence which is based on source data retrieved from the 4 cornerstone systems. These systems became core to the development of enhanced asset management practices in Auckland City.

Asset Management

Asset Management Background
In the late part of the 1990’s New Zealand's Central Government enacted legislation that required local government (i.e. local Council’s) to develop and regularly update accurate long term financial plans. A large portion of a local Council’s expenditure and associated funding is related to infrastructural assets (pipes, roads, park features, water and wastewater treatment plants etc). At the time of this law change there was not within Auckland City Council standard asset management processes or centralised systems capable of efficiently producing the now required linked asset and financial plans.

To develop the required systems capabilities senior managers recommended to the Directors Group an integrated programme of activities be initiated. This programme was underpinned by two core projects

Asset Management Information System (AMIS)
Financial Management Information System (FMIS) SAP software

This paper focuses on the AMIS project.

Project AMIS

Why Invest in AMIS
The AMIS process allows for accurate information about assets to be collected, stored, maintained and used in calculating their value and useful life. When these asset matters are well understood increased confidence can be attributed to long term financial plans. Asset managers will be able to plan the timing of projects for asset renewal or enhanced service more precisely. The amount of depreciation funding needed to renew the assets will be regularly collected at the right level to ensure there is “money in the bank” to undertake works when needed.

What Does the AMIS Allow
AMIS is a database and set of software applications to manage information about infrastructure assets. The applications are custom developments to the Smallworld Geographic Information System (GIS). The City was just completing the staged introduction of Smallworld GIS at the time conceptual planning for AMIS commenced.

AMIS lets asset managers view the information about particular city owned assets they are interested in against the geographic (map) view of the city held in GIS. Using the core property boundary or cadastral base GIS layers such as aerial photographs, contours, zoning information etc can be selectively added to the display screen.

What Assets are Included in AMIS?
Initially information on assets owned by the City associated with the following activities is within AMIS:

Stormwater: manholes, pipelines, watercourse improvements
Wastewater: manholes, pipelines, pumpstations
Roading: top surface, pavement structure, formation, footpaths,
Parks & Streetscapes: includes pathways, bridges, barbeques, playgrounds, sportsfields, rubbish bins, park benches Assets not within the AMIS system are generally non infrastructural i.e. office furniture and fittings, computers and Council owned land and building assets. These assets are accounted for within the traditional financial system.

what Information is Held in AMIS
The information held in AMIS has some common data which is stored for all assets plus specific data which has been selected as being important for that particular asset type. Common data covers things like location, condition rating, installed date, installed cost. Examples of specific data are: for a manhole “lid reduced level”, for a playground “age group”. The inclusion of specific asset data in the database allows managers to use the system to better understand the unique behaviour of their assets. For example the condition and location of all playgrounds catering for a particular age group could be listed to assist in prioritising future years playground upgrade works.

Project Timeline
Conceptual planning and programme approval – May 1999 to Nov 1999
Initial scoping and preliminary design work – Dec 1999 to July 2000
Prototype development and functionality approval – August 2000
System development - November 2000 to May 2001
Business process design & implementation– March 2000 to May 2001
System testing & implementation – June to October 2000
Data population: stormwater assets – November & December 2000
Data population: roads & parks assets – January to May 2001

Learning from implementing AMIS

• Quality Business Input is Essential

key decisions about data and processes have to be made by individuals within the business units on behalf of their business
such business decisions must be rigorously questioned by experienced managers to drive out spurious or unsubstantiated requests.

• Businesses Must Accept Ownership

detailed business process design forced all business units involved to accept ownership for their part in the process.
defined and committed data ownership is essential to ensure data quality is maintained

• Roles and Responsibilities Must be Acknowledged

detailed business process design resulted in documented roles and responsibilities for all parties both prior to detailed project implementation and for post project go live to an operational level
Have an Information Management Strategy defined

• Limit development of custom software

restrict development of new asset management software applications – utilise reporting and querying software tools within base GIS system.

• Staff Training

the new end to end processes now required demand new tasks and skills of staff. A comprehensive staff training programme needs to be implemented both pre and post go live
ensure intellectual knowledge of temporary project staff is captured and transferred to ongoing operational staff.

• Prioritise Deliverables

don’t plan a “big bang” go live. Phase delivery for one business set of assets ahead of others. Advantages of this phasing include reducing peak numbers of temporary project personnel and enables phased learning’s to be applied to following business asset sets.
Establish Cross Functional Teams
Cross functional teams within the Project governance structure greatly assist in supporting a “one organisation” culture and expedite delivery of learnings into various Group management levels.

After the Project – What?
Senior management realise that the AMIS Project will not alone deliver an end-to-end asset management capability for Auckland City. AMIS – the system is just one component in a range of tools and processes which is planned for introduction to suit the City’s business plans. It will and has delivered a foundation to build upon. The FMIS Project, the AMIS Project and other asset management processes took Auckland City to a plateau in asset management. A preferred way forward was thus developed within an Asset Management Strategic Development Plan.

In this plan are new projects that pick up from the AMIS project. One such new project involved automating the accounting for Depreciation and Revaluation Treatment (DART). Depreciation and Revaluation Treatment Project (DART) Following AMIS go live in May 2001 a new project was scoped and subsequently initiated to create a new system to handle accounting tasks required for creation, disposal, valuation, renewal and depreciation of infrastructual assets.

The system approach selected left virtually all the financial record keeping within the SAP corporate financial system for Auckland City. AMIS data on asset value and remaining life are standard parameters for the SAP financial register and can be used by SAP to derive accumulated depreciation, handle revaluation etc. AMIS provides a physical asset register with spatial references and plotting capability for assets. It derives asset values and remaining lives from a special valuation engine developed to follow National Asset Management practices. Software linking the two registers on a batch transfer basis has been developed.

The DART system is now operating successfully and is likely to be the subject of a separate standalone paper. Project DART Key Benefits

Greater confidence in the integrity of financial records for assets
Accurate valuation and depreciation of assets
Funds needed for asset renewal more accurately known
Enhanced asset management planning capability through more accurate information
Complete process for accounting for infrastructure assets
Reduced effort to reconcile physical and financial information
Compliance with statutory requirements
Wider access to detailed asset financial information
Consolidation of systems into enterprise technology infrastructure

Conclusion
While the programmes of work described above to enhance asset management and planning processes have successfully completed implementation, it is Auckland City’s view that a Benefits Realisation Plan is imperative to ensure maximum return is recognised. Benefits will flow over a period of time as people learn to use the new technology and systems and integrate it into the business processes– it is a long-term process. Benefits rarely occur as planned and the organisation has to establish a process for measuring and monitoring the benefits and actively managing the realisation of benefits and the business processes.

A Results Chain for programmes of work needs to clearly articulate the outcomes delivered by execution of various initiatives. Key outcomes need to be monitored to ensure the capability to deliver the benefits exists. An Auckland City benefits realisation plan outlines the following:

Baseline and target measurements to be achieved for each key outcome and benefit;
A description of how each key outcome or benefit will be measured;
The expected delivery schedule for each key outcome and benefit;
An overview of the monitoring capabilities required to measure each specified key outcome and benefit, along with details pertaining to how that capability will be delivered;
An explanation of the risks that may threaten the achievement of each key outcome or benefit and how the threat will be handled.
An assigned accountability for the realisation of a benefit

The AMIS and DART programmes of work at Auckland City introduced significant business process and technology change. While change management was a key element of implementation, in order to ensure proposed benefits were on track to being achieved, it became imperative that a post implementation benefits realisation plan be implemented and managed.