Larry. N. Mitchell Contact Details

1. Larry. N. MitchellContact Details Larry. N. Mitchell Finance & Policy Analyst(Local Government) © Larry.N. Mitchell 2004

2. The challenge of Long Term Council Community Plans as applicable to Asset Managers Larry Mitchell Finance & Policy Analyst (Local Government) © Larry.N. Mitchell 2004

3. Research Paper • A research paper entitled…'Some 'first principles' relating to the nature, extent and quality of the Long-Term Council Community Plan, (LTCCP) data…a forerunner to an Audit Guideline? • Many of the judgments stated in this study come out of years of personal experience in dealing with the data used for my 'Base Stats with Trendz'- 'NZLG Database' work • This has led me to the rationalizations even simplifications implicit in the judgments involved. This has been just a matter of common sense, particularly where other more rigorous techniques have in the past failed miserably • I am an unashamed disciple of the 'KISS' principle The 7th Annual Local Government Asset Management Conference

4. Scope • 1.1 Scope of the study • The study, as its title suggests, is focused upon the emerging issues surrounding the data that will be required for the LTCCP's of New Zealand Councils • 'Data' (the terms data and information are used interchangeably) within this study is very broadly defined and covers for example: • the data associated with the LTCCP framework • its relationship to outcomes affecting Community well-being • the data that will supplement the LTCCP processes including that derived from Community consultation and performance measurement • (service performance) The 7th Annual Local Government Asset Management Conference

5. Reference • 1.1(i) Whilst there are many references in this study…. • to audit matters the study by no means confines itself to the audit issues. The field of LTCCP data encompasses many other interests and non-audit practitioners and as far as has been possible, these have been covered as well • Finally the views expressed are those of the author…. • they are an attempt to initiate further discussion in the interests of the many parties vitally interested in the concepts and issues raised The 7th Annual Local Government Asset Management Conference

6. Objectives • 1.1(k) The objective of this initial study is to attempt to focus on the principles relating to LTCCP data, involving its identification, selection, collection and its fitness for the purposes of use within the LTCCP's of New Zealand Councils • The data requirements of the relevant legislation, the Local Government Act 2002, (the LGA 02 or the Act) are far-reaching and include the provision of information to support meaningful decision-making including Community consultation within the LTCCP processes The 7th Annual Local Government Asset Management Conference

7. Practice Guidelines • 1.1(p) Following the discussion and review of the concepts of this study, at a later stage detailed levels of the final practice guidelines can be written. [1] • The detailed guidelines would specify such matters as; the content of the data sets [2] of performance measures fitted to financial, economic, social and cultural outcomes, the make up of the data content to meet specific needs from the varying perspective of the users, data specifications that meet all legislative, conceptual and detailed specifications, including the disciplines of describing the data to relational database software, [3]data intended to meet specific user requirements and more precise variants of the LTCCP data as they relate to Regional [4] and Unitary Councils. The 7th Annual Local Government Asset Management Conference

8. Constituencies • 1.2(b) The data of importance to this study are contained within various identified and relevant areas of interest that is, the various so termed 'constituencies' • [1] Project;A project(s) should, at an early date identify the many stakeholders, for example engineering consultancies, (detailed later in this study), to begin to identify and accumulate the technical data of possible usefulness to the LTCCP. For example water quality benchmarks, Community health standards, road safety statistics and the like. More detailed argumentation on this matter follows later in this study The 7th Annual Local Government Asset Management Conference

9. “Technical Asset” Data • 1.2(c) For example the more technical performance measurement data 'constituencies,' are held by agencies, firms and groups and they could become involved with the LTCCP data issues, (subject to such commercial considerations as cost and intellectual property rights), by providing data to be used in the setting of benchmarks of local government performance • These persons and groups will be the sources for essential technical data that must be obtained for performance measurement purposes. Such data is held by engineering, economic, statistical, environmental, social and other agencies and consultancies or can be obtained from within existing local government databases. An identification process of these groups and an evaluation of the data on hand will be necessary • The difficulties faced with identifying available data are substantial. The tasks associated with the collection and then the management of the 'vast array' of potentially useful LTCCP data are complex. The storehouses of this data are at present and will continue to be diversified and heterogeneous. Excellent management of these issues will be essential The 7th Annual Local Government Asset Management Conference

10. Constituencies – Examples • 1.4(c)The various 'constituencies'The users of LTCCP data comprise an extensive list including: - • Councils themselves, LA's communities and Community groups including Iwi, the regulators, including audit interests, departments of central government extending over 'numerous' interests and involvements with the local government sector, business associates, trade associations of the local government sector including professional consultancies and numerous special interests groups and individuals including local sub-LA level communities such as submitters to their local Council's LTCCP's The 7th Annual Local Government Asset Management Conference

11. Engineers • 1.4(j) The data needs of other constituencies no doubt will develop over time including for example market-driven provision of data to the merchant banking sector, engineering performance measures from engineering consultancies and financial ratios derived from private firm's survey data • All will over time greatly assist in developing better data although initially their needs are secondary to those of LTCCP planners, report preparers and audit The 7th Annual Local Government Asset Management Conference

12. Standard of Care • 1.6(a)+(b)A standard of care related to the LTCCP dataThe LTCCP data is important enough to warrant the efforts involved in developing standards and guidelines and where appropriate to manage the imposition of the disciplines associated with a set of LTCCP data related guidelines. After all, given that the LTCCP is built upon its data, if the content of the LTCCP, that is the data underpinning the plan is inadequate then the actions of the Council based upon its defective LTCCP could be judged as being unlawful. • The LTCCP data is therefore critical to defensible and effective plans and a high standard of care must be brought to its development The 7th Annual Local Government Asset Management Conference

13. Outcomes – informing these • 1.7(a)Essential LTCCP data that directly supports and informs outcomes… and the 'other' – more discretionary data, • there will still remain in the field other less directly relevant (or less essential) data to the LTCCP. There will be large knowledge and information silos, that is, related data and information about Councils and their communities that will require the exercise of judgments as to their use • This will usually involve Council-determined discretions associated with their LTCCP data choices. These discretionary data areas are likely to be related to information that may well be supplementary to the major uses of LTCCP data, which is principally the informing of the top-level outcomes of the LTCCP The 7th Annual Local Government Asset Management Conference

14. LTCCP Guidelines • 1.8 [6] The notion of LTCCP guidelines is more than just a good idea, they will prove to be essential if the whole LTCCP process and its data are to gain credibility and currency.Already the Know-How,MDH (Brian Sharplin), NRB 'Communitrak' 'satisfaction' surveys, the deprival statistics etc and the authors 'NZLG Database‘, 'Base Stats with Trendz' contributions are gaining de facto local government sector standard status. • …. The imprimatur given already to the National Asset Management (NAM's) manual is possibly some precedent for this suggestion. The OAG's big (green) tick could have a similar impact upon LTCCP data guidelines, (facilitated by the OAG and produced with the help of others) The 7th Annual Local Government Asset Management Conference

15. LTCCP Data Process LTCCP Data The 7th Annual Local Government Asset Management Conference

16. “Asset Management“data “Asset Management“data LTCCP Data Process The 7th Annual Local Government Asset Management Conference

17. “Asset Management“data “Asset Management“data LTCCP Data Process • LGA02 • ‘Schedule 10’ • activities • ‘AMP’s’ • Council-centric • Community based • Performance • Measurement • Monitoring • Improvement • Service levels • CAPEX The 7th Annual Local Government Asset Management Conference

18. P.C.F. Submissions P.C.F. Submissions P.C.F. Submissions P.C.F. Survey P.C.F. Survey P.C.F. Survey P.C.F. Submissions The NZLG Database Outcomes Overview RDC - Road Safety Co-ordinator LTSA Rodney District Traffic Police RDC LTCCP Road Safety Police – National Traffic RDC Public Safety Outcome Rodney District Fire Service Fire Service – National Lions & Rotary – Local NFPO's The 7th Annual Local Government Asset Management Conference

19. The “NZLG Database” • LTCCP data … who you gunna call? • Wheel out the “NZLG Database” • See www.ltccp.net & www.kauriglen.co.nz The 7th Annual Local Government Asset Management Conference

20. LTCCP Data Process The 7th Annual Local Government Asset Management Conference

21. Wake Up Call The 7th Annual Local Government Asset Management Conference

22. Transfund Road Funding – ‘Trendz’ The 7th Annual Local Government Asset Management Conference

23. Niceties to Amenities – ‘Trendz’ The 7th Annual Local Government Asset Management Conference

24. ‘Measures’ – Variance in Household Expenditure The 7th Annual Local Government Asset Management Conference

25. Council-Centric Data • 1.11(b)+(c)'Council's' internal data, as contained within its asset management plans will inform the detailed engineering and operational issues associated with Council-owned or managed assets • A sub-set of this internal, operational data, invariably in a highly summarized form can be extracted to meet the Council's own outcome requirements, for example the data associated with the assets of Schedule 10 of the Act included within the groups of 'Activities' The 7th Annual Local Government Asset Management Conference

26. Trade-Offs • Other relevant content of the research paper dealing with Asset Management interests/ responsibilities for LTCCP data….. • 2.2(a)The first of the first principlesTo reach the level of rationalisation implicit in defining the more discrete LTCCP data from the vast amount of information available, that is, the selection process for LTCCP data, (it is submitted) should be simplified, provided nothing of major significance is lost arising from such simplifications…. The 7th Annual Local Government Asset Management Conference

27. Quality • 2.2(d) A-G 4, 'Quality.‘[4] • 3.60. Quality has at least two possible meanings or dimensions – ‘stakeholder or customer perception’ and ‘technical quality’: Stakeholder or customer perception. These measures of quality reflect the ‘eye of the customer and indicate the extent to which a product or service meets or exceeds stakeholder expectations. To establish customer perceptions of quality, a public entity needs, at least, to consult stakeholders and ask what they value. • Technical quality. These measures of quality reflect the ‘eye of the expert’. They report on the degree of conformity to standards and specifications, or the expectations about a product or service that an expert would hold. Technical quality may apply technical standards, expert knowledge, or peer assessment. To judge the standard of products or services, both categories of quality may use: acceptability of the product or service delivered; speed of response or turnaround time; The 7th Annual Local Government Asset Management Conference

28. Six Criteria for the Data Sets • 2.3(c)Top level criteria used to select LTCCP data. • fit for specific LTCCP purposes • decision-usefulness • comprehensibility • case specificity • data availability • cost-effective collection The 7th Annual Local Government Asset Management Conference

29. Decision Usefulness • 2.5(d) A 'useful' list of what determines decision–usefulness was produced by Audit New Zealand (a presentation titled 'Non-Financial Reporting and Costing in the Public sector') and listed the following: • Good Practice – Measurement • Appropriate and reliableNot about how many, but how representative“Pool” of measurementMulti-layered measurement and reportingIntegrated internal and externalVariety of frameworks and tools“Horses for Courses” The 7th Annual Local Government Asset Management Conference

30. Halloooooooo!!! The 7th Annual Local Government Asset Management Conference

31. ‘Measures’ – Building Consents Issued 2003 The 7th Annual Local Government Asset Management Conference

32. ‘Measures’ – Building Consents Issued 5 Year Trend The 7th Annual Local Government Asset Management Conference

33. ‘Measures’ – Expenditure per Ratepayer The 7th Annual Local Government Asset Management Conference

34. Good Consultation • 2.6(f) The Act is very specific in requiring Councils to make the information supplied within the LTCCP 'understandable', S. 82 (1) [a] Principles of Consultation reads: • 'Consultation that a local authority undertakes… must be in accordance… with the principle that… persons affected or who have an interest in the decision or matter should be provided with reasonable access to relevant information in a manner and format that is appropriate to the preferences and needs of those persons’ [5] The 7th Annual Local Government Asset Management Conference

35. Cost Benefits • 2.9(e) There will be times when the cost of obtaining data are high, they may be associated with critical information needed within LTCCP data requirements and their importance is also high enough to warrant the expenditures • Data gatherers should always be on the lookout for cheaper alternatives if possible. This for example may involve the use of surrogates or with the use of correlations of different data elements that judgmentally rather than empirically meet the above tests. For example a surrogate wealth statistic, just one of a number of measures concerned with 'wealth', (see also for further examples the author’s site at www.measures.net.nz)…. The 7th Annual Local Government Asset Management Conference

36. Sources & Authorities • 3.1(f) • The Local Government Act 2002, its prescriptive content requirements • The Quadruple, (financial, economic, social and cultural) Bottom Line (QBL) view of the data connected to 'sustainability' concepts • Data specific to Council Outcomes sourced from within each Council and 'Macro' data related to each Council's Community Outcomes but external to each • Performance data based on local and internationally recognized benchmarks for standard setting and measurement of performance The 7th Annual Local Government Asset Management Conference

37. Council Outcomes • 3.4(a)Data specific to Council outcomes sourced from within each Council • The Council specified 'internal' data needed for LTCCP purposes is also progressing well. Councils are dealing with their own data as they see fit aided by the many in-house teams working on the problem along with a number of consultancy initiativesThe chief challenges faced by this constituency have mostly already been mentioned and include: - • the 'holistic' requirement of integrating management, asset, general ledger/budget and other plans with LTCCP processes, • the linkages between the various 'views' of the same data involving outcomes at the top level with the Council's actions that support them, • the liaisons with other arms of government, local organizations and the Community at large central to LTCCP development, • the cultural change management of Council attitudes as demanded by the Act's LTCCP requirements, including the provision of meaningful information to their Community's consultative processes, and • the availability and use of people and the tools (including software) necessary to control the processes The 7th Annual Local Government Asset Management Conference

38. Project - Guidelines • 1.2(a) Footnote 3 • Guidelines containing the results of a properly scoped and comprehensive project could involve the Office of the Auditor General, (the OAG) and others? in defining the standards and practice relating to LTCCP data and all of its complexities The 7th Annual Local Government Asset Management Conference

39. Project – ID Stakeholders • 1.2(a) Footnote 4 • A project(s) should, at an early date identify the many stakeholders, for example engineering consultancies, (detailed later in this study), to begin to identify and accumulate the technical data of possible usefulness to the LTCCP • For example water quality benchmarks, Community health standards, road safety statistics and the like • More detailed argumentation on this matter follows later in this study The 7th Annual Local Government Asset Management Conference

40. Project - Software • 1.2(a) Footnote 5 • The matter of identifying suitable software tools to enable Councils to properly manage the LTCCP process and its multi-dimensional data is a major issue • Very significant efforts will be needed soon, if particularly the small to medium-sized Councils are to rise to the challenge • Some may not cope in time, or at all. Both attitudinal and operational organization-wide change processes are involved The 7th Annual Local Government Asset Management Conference

41. Project - Monitoring • 3.7(a) Footnote 6 • Performance measurement, monitoring: - • A paper produced by Brian Sharplin – “The Idea Outlined” - highlights not just the concerns for integrating internal and LTCCP monitoring but implies that there will be economies flowing from better Council internal management performance and improvement that will flow from 'doing them once and doing them right' The 7th Annual Local Government Asset Management Conference

42. The Last Word • 3.6(e) The last word can be left to another on this subject; Brian Sharplin in his recent 'The Idea Outlined' boldly and squarely put the case: - • Para 2. (d). Use the LTCCP preparation process to also help the Council to manage its affairs ‘smarter’, and in a more integrated form.In particular, the possibility of the Council being able to merge (or at least consider together) the outcomes process / the LTCCP preparation process / the Asset (Activity) Management Plans’ preparation process / and the future extensive obligations that the Council has for monitoring and reporting, in order to eliminate unnecessary duplication that will occur if each task is addressed separately, and to strengthen both strategic and day-to-day management decision-making – relating to everything that the organisation does. The 7th Annual Local Government Asset Management Conference

43. And now… Day 1 is complete and the bar is open ... The 7th Annual Local Government Asset Management Conference

44. Larry. N. MitchellContact Details Larry. N. Mitchell Finance & Policy Analyst(Local Government) © Larry.N. Mitchell 2004