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It will be mandatory for local councils to undertake strategic asset management planning; councils warn on costs

Posted in Property

The Government's intending law changes that will force local councils to undertake strategic asset management planning, including incorporating 30-year infrastructure strategies. But local government representatives are already warning on the financial costs of the new proposals.

Local Government Minister Chris Tremain said the intended changes "will ensure councils undertake longer-term infrastructure planning, while streamlining other planning requirements".

However, the body that represents the local councils is already warning that there may be "an extra cost burden" on councils and communities from the requirement to incorporate 30 year infrastructure strategies into councils’ long term plans. And the body, Local Government New Zealand is questioning "whether these mandatory requirements will have the desired effect".

Tremain said while many councils were managing their assets well, law changes were needed to ensure that all councils were taking "the long term perspective needed".

"The Government will make it mandatory for local councils to undertake strategic asset management planning. This is fundamental good practice.

"We will also require councils to incorporate 30 year infrastructure strategies into long term plans. These plans currently only cover a 10 year horizon. Councils will need to plan for growth and investment over a longer period and provide this information to their communities."

Tremain said local authorities owned $96 billion in fixed assets and infrastructure such as stormwater, sewerage, roading and flood protection. These assets have a very long life, with water pipes lasting for 60 to 100 years. These assets therefore needed to be managed well in order to provide communities with essential services.

Councils would now also need to disclose the value of the insurance cover they hold, any financial risk sharing arrangements, and any self-insurance schemes, he said.

“At the same time, we will remove other requirements that increase the costs and compliance burden on councils. This includes:

  • Streamlining annual plans and removing the need to re-consult on matters that have already been consulted on;
  • Introducing streamlined, focused consultation documents rather than basing public consultation on technical and overly detailed documents;
  • Providing greater flexibility about methods and frequency of consultation. 

“These changes are part of our programme of reform since 2010 to reduce red tape for local councils. The changes will also improve transparency and the quality of information available to local communities.”

Local Government New Zealand president Lawrence Yule said there were  "positive aspects" to the proposals. 

"LGNZ agrees with improving transparency to the community and supports the flexibility about methods and frequency of community consultation.  Streamlining plans and reducing unnecessary costs for councils and ratepayers is an important aspect of change for local government."

But he cautioned on the 30-year infrastructure plan and resultant extra cost burden, as well as whether the mandatory requirements would have the desired effect.

"At present, most councils already have strategic asset management processes in place across drinking, storm, waste water and roading infrastructure.  It’s unclear how adding a mandatory 30 year infrastructure strategy into long term plans will, on its own, lift the quality of asset management.  Instead it may incur an added cost burden and appears to be at odds with the streamlined approach.

"Additional disclosures on insurances and financial risk sharing arrangements are, again, another additional requirement which will cost councils and their communities.

"Instead, LGNZ considers it will be more effective to continue dialogue with the Government on infrastructure development strategy across the country, including national plans to develop housing, roading and local economies," Yule said.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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2 Comments

These proposals are sideshow

These proposals are sideshow tweaks that are designed to give the public a rosy glow knowing that our wonderful government are tackling the mare's nest of local government. Having said that I have no problem with any of the proposals and am disappointed with the drone from Lawrence Yule on costs to the community. This is one occasion where I will part with LGNZ and suggest they grow a pair.
 
If councils are managing assets according to the "black" book, NAMS Guidelines (something to do with Asset Management), the difference between producing a ten-year strategic asset plan and a thirty year one is trivial. There are councils such as New Plymouth DC that can produce an 80 year plan at the press of a button because they have already done the spade work. We are coming up to the twentieth anniversary of when councils started recording assets, assessing condition and projecting future expenditure - they should be capable of producing thirty year plans by now.
 
More interesting are the proposals around consultation. At the time of the implementation of LGA2002 councils often over-reacted to the provisions concerning consultation built into that act. Many  created or beefed up both policy analysis and public communications functions. They now regularly over-consult on every issue (presumably to justify all the staff they now employ for the very purpose). It's a shame that we now have to write laws to tell them to pull their heads in when the current law is already workable if you didn't make such a meal of it.
 
 

The Left Honourable

The Left Honourable President-for-life of the Union of Local Gubmint Drones, Larry Fool, has slammed the new 30-year planning horizon to be legislated for tomorrow lunchtime.
 
"This is a heedless, expensive and totally unwarranted intrusion into local democracy", he opined. 
 
"For half a century, Local Gubmints have not worried about this sort of expensive overhead.  We maintain infrastructure as best we can with the pittance we receive from an uncaring public by way of rates, fees, levies, contributions, charges, and not to mention dog registration imposts and library fines.  We are very proud of the fact that we manage to do so much with so little."
 
When your intrepid reporter reminded the Fool about a string of infrastructure accidents over the years - Abbotsford (leaking storm and potable water, at the top of a clay face), Wellington (leaking pipes at the top of inadequately consented gully infills), the occasional sinkhole when old, brick-barrel sewers unaccountably collapse, the more occasional water-main fountain when the termites stop holding hands, the frequent discharge of raw sewage into estuaries, rivers and harbours, and other small incidents, the Larry was quick to defend the status quo.
 
"Why", he said, splutteringly, "It isn't Every council who can actually afford to mount a cellphone camera on a child's radio-controlled Cat D9 model, and photograph every last blooming pipe.  This gear is Costly, takes teams of highly paid engineers Months to work through the images, and we can never be sure just where the so-called cracks and collapses are when we start digging, so we just start any old where.. 
 
We much prefer the time-tested, age-old methods:  we simply rely on our trusty ratepayers to drive into the holes or over the slips, or to notice nasty smells or the sudden absence of a key hillside road, they tell us and then we blame the dairy farmers for everything."
 
The interview was, unfortunately, cut short at that point.  It seems that the Fool had parked on a double yellow line, had been towed, but the towtruck and its precious cargo had then fallen down a large sinkhole caused by dairy farmers.
 
We promise to resume transmission once the offending agronomist has been dealt to.