INTERNATIONAL IDEA EXCHANGE

New Zealand Community Engagement: Asset Risk Assessment and Stakeholder Tradeoffs

Patricia Bugas-Schramm
Transportation Asset Management Coordinator
Portland Office of Transportation, Portland, Oregon
2006 APWA Jennings Randolph Fellow

The United States is facing challenges in understanding and communicating risk associated with funding public infrastructure needs. Available funding is inadequate to meet all needs and choices must be made. Engaging communities in these decisions using asset information and risk as an element in the decision process is needed to improve credibility and assign appropriate confidence in these difficult decisions.

The April 2005 international scan of best asset management practices noted New Zealand as a world leader in best asset management practice.(1) New Zealand mandates involvement by citizens and businesses in choosing levels of affordable service prior to distribution of national funds. Inventory, condition and defined risks associated with various funding levels inform the discussion. As a participant on the scan, questions remained about New Zealand's community consultation process.

  1. What exactly do these risk strategies entail?
  2. What factual information is used to evaluate associated risk?
  3. How are these strategies presented to transportation service stakeholders so funding priorities can be set?

The 2006 APWA Jennings Randolph International Fellowship provided an opportunity to return to document detailed examples of New Zealand's successful community engagement, tradeoffs and accountability at the local government level. Lessons of the fellowship were presented at the APWA Oregon Chapter's 2006 conference and will also be presented at the chapter's 2007 conference and the 2007 APWA International Public Works Congress and Exposition in San Antonio.

INGENIUM President Richard Kirby (left) and then-APWA President Bob Freudenthal attended the INGENIUM Board luncheon. President Freudenthal presented the U.S. response to the Hurricane Katrina disaster at the INGENIUM Conference. The opportunity to meet Mr. Freudenthal in Auckland was another opportunity of the New Zealand fellowship.

The Fellowship Approach
The timing of the fellowship could not have been better. The Local Government Act of 2002 mandates each local authority consult and seek participation with their communities on decisions being made. This consultation process was completed in June 2006. Community outcomes and priorities result in the Long Term Council Community Plan, a ten-year plan which describes the activities of the local authority and the community outcomes they contribute to.

The two-week fellowship in New Zealand was generously guided by INGENIUM, APWA's sister organization in New Zealand/Australia. Their annual conference was held in June 2006 in Auckland, New Zealand's largest city of 1.2 million on the North Island. The trip involved meeting:

  • The primary author of Creating Customer Value from Community Assets: Guidelines for Agreeing Service Levels with Customers, a New Zealand manual of community engagement(2)
  • Several Auckland area local councils
  • Transfield Services, a road contractor operating under an innovative performance specified maintenance contract (PSMC)
  • New Zealand's Auditor General who was completing an audit of the information used in the nationally legislated Long Term Council Community consultation process
  • Transit New Zealand who manages the government's side of the PSMC contracts of national highways
  • Auckland's Regional Transport Authority (ARTA)

Midway in the trip, the INGENIUM Conference presented various case studies on local government's consultation process, risk-based decision making and asset management.

Traveling with 11 Australian engineers prior to the INGENIUM Conference was an unexpected delight. Representing each of Australia's states, they were also studying New Zealand's community engagement process that defines community preferences.

Institute of Public Works Engineering Australia (IPWEA) members, including David Abbott, President (far right) and Chris Champion, CEO (middle row, center) and APWA's Jennings Randolph fellow, Patricia Bugas-Schramm (front row, right) on Level of Service Study Tour, Auckland, New Zealand

Regular, Mandated Community Engagement on Strategic Decisions
U.S. cities develop community-based 20- to 50-year visions. New Zealand mandates refreshing this conversation every six years and annually reporting council's activities in measurable ways to indicate how community outcomes of the vision are achieved. Transportation agencies must compete with other non-government services for resources. This "whole of government" perspective requires greater justification of funding requests.

New Zealand's Local Government Act of 2002 requires local councils to consult and seek participation with the communities on decisions being made. It sets out a framework that each council must follow in developing its long-term community consultation plans (LTCCP) to reflect sustainable social, economic, environmental and cultural decisions. Timelines include:

  • Each six years - identify community outcomes
  • Each three years - consult and develop an LTCCP
  • Each year - report any changes to the LTCCP

The LTCCP must be audited prior to the draft going out for consultation.

This process seeks to develop an agreed level of service based on community preferences and priorities for council's significant decisions. The LTCCP describes the kind of community that residents want, the local council activities that will achieve the community vision and includes costs and funding for a 10-year period. The second round of LTCCPs for 2006-2016 was being completed and information audited in 2006.

A Culture of Sustainability
Asset management plans are primary inputs to the LTCCP. These contain more detailed information on council activities and assets. They explicitly link levels of service to LTCCP strategies and outcomes.

Asset plans include:

  • Demand - estimated additional capacity and the associated costs and funding sources, including infrastructure maintenance, renewal and upgrades.
  • Levels of service options, growth assumptions, associated risks, and maintenance, renewal and development projects to address risks.
  • Intended level of service (LOS) performance targets and other measures by which actual LOS provisions may be meaningfully assessed, and the estimated cost of achieving and maintaining identified LOS, including sources of funding.

Asset management plans are the more technical examination of risk assessment and need. Waikato Council showed the relationship to level of service and the hierarchy of communicating what must be done (legal and engineering standards) with community preferences. Moving from the more technical language of levels of service in the asset plan to more general, clear descriptions of community service choices are shown in the following diagram.

Successful Community Engagement
The core tenet of New Zealand's asset management is to provide the level of service that the community wants and is prepared to pay for.(3) Levels of service are the manner in which communities understand their choices.

Successful consultations in Auckland area councils like Waitakere and North Shore limited choices to those that represent significant changes to existing services. Council activities (services) are described in terms of their cost and location. Options are given—reduced, current and increased—with the outcomes and cost per household. For example, Waitakere City Council describes a "Do Less" Option for the Parks activity which provides "no new fields in new areas, converting existing sports parks to four new sand fields by 2016" which would reduce the average annual rates by $2.28 from current rates.

Taupo, a community to the southeast of the Auckland region, used a three-tiered consultation process. A series of focus groups from seven stakeholder geographic areas were told what service was currently provided and how much it cost per ratepayer. These groups were asked what service changes (more or less) were desired. Costs were attached to these preferences and taken back to these focus groups. Focus group participants were paid nominal amounts to ensure participation. At this point, general public feedback was also sought through surveys in newspaper inserts. Finally, council was advised on desired outcomes. The public was informed of service levels to be delivered and their cost per average household. Significant changes were highlighted (increases, reductions, elimination, and postponement). Information was displayed at an exposition center and published in the community's newspaper. Similar detailed consultation was used in Waitakere and North Shore City.

Councils don't presume to know what their communities want. Waikato Council, representing both rural and urban areas south of Auckland, indicated through their consultation process that a rural area desired and was willing to pay for public toilets. This is a service change council officials were unaware of until consulting with specific stakeholders.

Publishing outcomes, linking these to location and cost, completes the consultation process. All results of the consultation process are available on each council's website, and are published and available at libraries or sent to citizens' homes on request.

From the consultation process, the council develops strategic priorities and platforms to guide all work programs. The priorities are critical needs that must be taken into account in all council work. Platforms are made up of "bundles" of similar activities used to develop different aspects of the city (Integrated Transport and Community, Strong Innovative Economy). These describe what the local community thinks is important to achieve in social, economic, environmental and cultural terms in the present and in the future (also referred to as the "well-beings"). Activity Plans that contribute toward the outcomes are spelled out (e.g., Parks, Arts and Culture). How progress is to be measured in achieving activity plans is stated.

Informed Decision Making and Risk
New Zealand's targets define desired levels of service through community consultation. Outcomes are reflected in asset management plans so the community can see where change will occur. Asset plans seek to optimize the cost for a defined and sustainable level of service over the lifecycle of an asset to meet long-term community needs. This helps ensure "value for money." The asset plans contain a risk register, which ranks and weighs risk in terms of its likelihood and impact. This results in 20-year financial forecasts that identify expenditures for operations, maintenance, renewals and new assets that mitigate high priority risks.

Based on a culture of sustainability (economic, environment, culture and social), risk assessment is a tool used to enhance decision making so that organizational goals are more likely to be achieved by mitigating threats and using opportunities. The process relies on the Australia/New Zealand Risk Standard.(4)

The Local Government Act of 2002 requires councils to identify and involve the community in understanding decisions that are "significant" to the community. A funded 10-year plan is included in the LTCCP based on these agreed levels of service. In intervening years, an annual report is issued which tracks progress in achieving community outcomes using measures identified in the LTCCP.

The assessment process is used to identify risk and results in a definition of levels of service, or mitigating actions, which address risks. Criteria defined by cross-functional teams set the framework for consistent risk-based decision making. North Shore City uses financial, public and staff, human resources, legal, political, image and operational criteria to assess risk. Sources of risk evaluated against these criteria included asset management, business continuity, change management, communication, contracting performance, environmental hazards, financial, funding, fraud, governance, human resources, information management, legislative compliance, liability, planning, strategy, growth, and project/program management.

Most councils are focused on risk within an asset class (transportation) or service (libraries), not across services. Efforts to develop a common risk assessment process for all council assets was presented at the INGENIUM Conference by the Wairoa District Council. The diagram above indicates how the LTCCP and asset management plan incorporate risk assessment.

Benefits
New Zealand's experience developing the long-term council community plan provides a good example of one country's efforts to resolve the public works funding crisis through increased consultation, transparency of decision making and accountability. The fellowship provided an opportunity to understand how New Zealand helps communities understand options for funding public infrastructure needs and the service level tradeoffs stakeholders experience given various funding levels.

Study tour information will be shared with state and national APWA conferences in 2006 and 2007. APWA provides a valuable conduit for gathering and implementing successful international strategies for managing public infrastructure. Others interested in furthering their area of public works expertise should consider the Jennings Randolph International Fellowship.

Patricia Bugas-Schramm represents the Portland Transportation Maintenance Bureau on the Mayor's Strategic Visioning Project, Fleet Advisory Board, and the City Asset Managers Group. She can be reached at (503) 823-4588 or patricia.bugas-schramm@pdxtrans.org.

(1) FHWA/AASHTO/NCHRP, Transportation Asset Management in Australia, Canada, England, and New Zealand, November 2005

(2) Creating Customer Value from Community Assets: Guidelines for Agreeing Service Levels with Customers, National Asset Management Steering Committee, October 2002

(3) Ibid.

(4) AS/NZS 4360:2004. Risk Management Standard (www.standards.com.au)


Jennings Randolph Fellowship trip to the Czech Republic and Slovakia

John Lisenko
Management Consultant
Richmond, California
2006 APWA Jennings Randolph Fellow

As a recipient of the 2006 Jennings Randolph Fellowship I got to experience first-hand the workings of a public works conference in a foreign land and also to see how public works services have evolved in countries that formerly were part of the Soviet bloc.

The conference was described in some detail by Helena Allison in the September 2006 issue of the APWA Reporter. I would only add that for me one intriguing feature of the discussion at the conference during a Board of Directors meeting had to do with the use of the Czech Republic Public Works Association (CZPWA) logo in promotional advertising. Private business owners lobbied the Board for permission to use the CZPWA logo (and by inference, the prestige that came with being a part of the organization), but the Board resisted on the basis that the integrity of CZPWA could be compromised. It was an interesting and lively debate.

During my subsequent visit to Slovakia after the Czech conference, I spent some time observing how public works services are provided within the city of Bratislava and how a condominium infill project was being developed. Bratislava is a city in Slovakia with a population of more than 400,000, and is roughly a one-hour drive from Vienna. It is divided by the Danube River, and has a diverse character that combines the old with the new.

Public works improvement projects involving street renovation, utility installation and other infrastructure improvements were evident throughout Bratislava. Significant investment in new development is occurring as a result of Slovakia being integrated into the European Union. Public works services are provided through a combination of public and private enterprises. The lines between the two are somewhat blurred, since the evolution of "privatization" is still in progress and there is some carryover of the former Soviet system. It appears that the public sector consists primarily of administrators, while the actual work is done by various private and semi-private organizations that have "inherited" much of the physical inventory that used to belong to the government, such as trucks, graders and backhoes.

The public works corporation yard and several waste collection vehicles in Hradec Kralove, Czech Republic

Just as in the west, transportation planners are wrestling with the problems associated with growth and the dilemma of trying to accommodate people's need for independent travel vs. using public transportation. In both the Czech Republic and Slovakia I noted that the choice between the automobile as the preferred mode of travel vs. public transit is more a reflection of local tradition, convenience and availability of public transportation, and topography. In Hradec Kralove, in the Czech Republic where the CZPWA Conference was held, bicycles and public transit seemed to be the overwhelming preference; whereas in Bratislava, cars dominated the street scene. The former is predominantly flat while the topography in Bratislava is somewhat hilly.

I met with the owner of a company constructing a multi-unit condominium building in Bratislava. The target customers appear to be young professionals, both singles and families. Units varied in size from studios to two and three bedrooms. The lower floor included both covered parking and space for commercial development. Prices were in the $100,000 range. Although salaries are low, there is a growing minority of workers who are benefiting economically both from growth in the private sector as well as investment from abroad.

The trip was enjoyable, and the hosts both in the Czech Republic and Slovakia were extremely helpful and hospitable. My parents had spent many years between the two World Wars living in what was then Czechoslovakia, and one of the highlights of the trip for me on a personal level was to meet with a local resident who remembered them. This meeting was facilitated by my hosts and resulted in my being able to fill gaps in the family history that I subsequently filled in even more when I traveled from Slovakia across Austria (following my parents' route as they escaped from the communists) to Germany, where I was born.

Because of my background and knowledge of the Russian language I have been fortunate to have seen public works in operation in a variety of places, including different parts of Russia, Ukraine and Kazakhstan. What I have experienced is that while the language and culture may be different, the problems that public works professionals wrestle with, such as limited funding, aging infrastructure, growth-induced impacts to transportation, water and sewer systems and the growing need for sensitivity to sustainability of any improvements, seem to be universal. By sharing experiences through programs like the Jennings Randolph Fellowship, we all benefit from the collective wisdom and unique approach to problem solving that comes with communication between professionals from different parts of the world with similar issues and common goals.

John Lisenko can be reached at (510) 758-9767 or jlisenko@comcast.net.