Capital Works Prioritisation Model
( A framework to support Capital Works Planning as part of an
integrated approach to Long Term Financial Planning )
TCC experience
Kerry Phillips
Executive Manager , Finance
Townsville City Council
Queensland
Australia
Capital Works Prioritisation Model
Acknowledgments
Visionary and Designer - Vivek Kangesu – Executive Manager Corporate
Asset Management TCC
Maintenance and Facilitator - Roderick Wright – Senior Advisor Corporate
Asset Management
Leadership - Ray Burton – CEO TCC
Townsville City Council (TCC)
Queensland
› Population: Approx 200,000
› 13th Largest City in Australia
› Households: Approx 80,000
› Area: Approx 3,750Sq. km
› Staff: Up to 1700
› Services include:
›Water Supply
›Sewerage
›Roads
›Stormwater
›Waste
›Recreational & Community
Townsville
Kerry Phillips – a long history with Townsville
( past, present and future)
1984 – backpacker – Magnetic Island
– Ferry Terminal in Flinders St East and delivered us to Picnic
Bay
– Mini mokes and beautiful walking trails
– perceived to be the most beautiful destination I had ever
visited
- no view about Council
Kerry Phillips – a long history with Townsville
( past, present and future)
1991 – 1993 – home
- before amalgamation
- before the Strand redevelopment
- before Jezzine
- Bushland Beach – lots of vacant land
– Thuringowa an outpost,
- before Riverway
- CBD thriving
- Before Gabul walkway Magnetic Island
- Amazing sailing
- Maggie still as beautiful as ever
- Council quietly seemed to go about it’s business
Kerry Phillips – a long history with Townsville
( past, present and future)
2013-15 – return for more
– CBD struggling from depletion
- CBD higher residential density
- Strand revitalised
- Riverway rivals the Strand
- Bushland Beach and North Shore urban sprawl with more that
3500 households
- Gabul Way – a safe stairway to heaven
- Jezzine – award winning gift to the community
- Ferry terminal opposite Jupiters
- Nelly Bay the new delivery point
- High rise on Maggie
– a progressive amalgamated council with a CEO with financial
acumen
Strand
Riverway
Jezzine Barracks
https://www.youtube.com/watch?v=st9n6Yhe
V14
Future- project pressure- the ribbon cutting
projects
Waterfront Precinct
https://www.youtube.com/watch?v=mL1MNhGyYy0&feature=yout
u.be
Vs BAU future- project pressure
1. Disaster Resilience- Dalrymple road bridge
2. Urgent landfill capping and new
waste management strategies
– particularly for Maggie
3. Water and wastewater licensing
requirements – Cleveland Bay
4. Drought management
5. Strand, Jezzine, Riverway – renewal
6. Growth – density – urban sprawl
7. Limited funds and capacity to repay borrowings
HOW DO WE BALANCE IT ALL ???????
Capital Works Prioritisation Model - Intent
Priority based on sound decision making framework
All perspectives considered across Council
Commitment to a way forward
Planned to ensure that strategy aligns with financial sustainability
Recommendations have integrity which aims to simplify approval
process for Executive and elected members
Personnel involved in capital works planning and
decision points
Today’s focus
The process of Capital Works Prioritisation
A Quadruple Bottom Line (QBL) Approach
Teams of experts assess the Council’s New and Upgrade CapEx plan, focusing on four areas
(Strategic/ Governance, Social, Environmental and Finance/Service Delivery ) at Program level
and the scores are combined to give an overall “Average Priority Score” (APS), which ranks
projects at program level.
An additional area is assessed for Renewal Projects, and the scores give an overall “Average
Priority Score” (APS), which ranks projects at program level by importance.
The Average Priority Score system is used as an aid in the decision-making process to identify
imperative projects that should be completed.
5 Prioritisation Teams
QBL teams and a Renewal Team
• Team 1 - Strategic and Governance
• Team 2 – Financial and service delivery
•Team 3 - Environmental
•Team 4 - Social
•Team 5 - Renewals
The scores are weighted
Team 1 - Strategic/Governance
Criteria
Capital Type / PAB Approval
Capital Type / PAB Approval
Score
PAB Approved New/Upgrade ( PIP / ICs / funding)
5
Not PAB Approved New/Upgrade
1
PAB Approved New/Upgrade
2
Not PAB Approved New/Upgrade (PIP / ICs / funding)
5
Strategic/Governance Criteria
Business Case Details
Business Case Details
Score
Strategy/Governance - New / Upgrade_ Approved business case
5
Strategy/Governance - New/Upgrade_Not approved business case
1
Strategy/Governance - New/Upgrade _Approved business case (PIP / ICs / funding)
5
Strategy/Governance - New/Upgrade_Not approved business case (PIP / ICs / funding)
3
Strategic/Governance Criteria
Political Commitment
Political Commitment
Score
Yes Council endorsement of the project
5
No
1
Strategic/Governance Criteria
Smart Growth Strategy
Smart Growth Strategy
Score
Encourages / promotes growth in the CBD
5
Encourages / promotes growth in the Activity Centres
3
Encourages / promotes growth in low density areas
1
Strategic/Governance Criteria (also
considered by Finance, Environmental, Social,
Renewals )
Risk Assessment if Project Not Undertaken
Risk Assessment if Project Not Undertaken
Score
EH - extreme risk
5
H - High risk
4
M- Moderate risk
3
L- Low risk
2
LF- Leave to Fail
1
Team 2 - Finance Criteria
Main financial Factor
Main Financial Factor
Score
Lifecycle costs
4
Cost recovery
3
Business case
3
Operating and maintaining Cost
5
Cost of service/rate impact
1
All of the above
5
Finance Criteria
Capacity to Deliver Project
Capacity to Deliver Project
Score
Internal Capacity
5
External Capacity
5
Limited Capacity
3
No Capacity
0
Finance Criteria
Financial Impact
Financial Impact
Score
Not applicable
5
Unknown
3
Positive impact
5
Negative impact
1
Team 3 - Environmental Criteria
Main Environmental Factor
Main Environmental Factor
Score
Energy Consumption & Demand
4
Water Consumption & Demand
3
Prevention of Pollution
4
Impact on Natural Resources
4
Waste Minimisation
2
Greenhouse Gas Emissions
4
All of the above
5
Environmental Criteria ( also
considered by Strategic/Governance)
Environmental Impact
Environmental Impact
Score
Not applicable
5
Unknown
3
Positive impact
5
Negative impact
1
Team 4 - Social Criteria
Main Social Factor
Main Social Factor
Score
Community Diversity
3
Public Amenity
4
Public Health and Safety
5
Cultural and Heritage Values
4
Community Services
2
Operational Efficiency
2
Social & Civic Pride
5
All of the above
5
Social Criteria
Social Impact
Social Impact
Score
Not applicable
5
Unknown
3
Positive impact
5
Negative impact
1
Team 5 - Renewal Criteria
AMP Development | Review | Update
Approved AMP | Bus. Case in the current f/year
5
Not approved AMP | Bus. Case
3
Operational request with justification docs
4
Operational request without justification docs
2
Stakeholder | Customer request
2
Approved AMP | Bus. Case but not in the current f/year
4
Renewal Criteria
Renewal Modelling / Delivery Programs
Renewal Modelling/Delivery Programs
Score
Renewal program | sub-program list at least to the year one
5
Renewal Program | without sub-program list
3
The Program | sub-program should not be included (listed already | new/upgrade)
0
Renewal Criteria
Service Levels
Service Levels
Score
Service levels listed and renew to maintain agreed level of services
5
Service levels listed and renew to improve the current level of services: back-log
5
Service levels listed and renew to achieve the agreed level of services
5
Service levels not listed and renew to maintain the current services
3
How we collect and interpret Community
Engagement data
 92.5% of all Townsville
residents were either satisfied
or very satisfied with Council’s
delivery of services and
facilities in the past 12
months.
 Total of 1000 interviews
were conducted
 53 services and facilities
measured in this survey
Further analysis of the survey data was conducted
Importance Scale:
Importance
oCrucial – Must Have
oImportance – Certainly
Expect
oNice to have – but not
important
oNot Very Important
oUnnecessary
Community Attitude Survey 2013
Results
e.g.: Public Toilets Service Levels Index
Suburbs within 15 km from
Flinders Square
Importance Scale:
oCrucial – Must Have
oImportance –
Certainly Expect
oNice to have – but not
important
oNot Very Important
oUnnecessary
Community Attitude Survey 2013
Results
e.g.: Public Toilets Service Levels Index
Suburbs > 15km and < 30km
from Flinders Square
Importance Scale:
oCrucial – Must Have
oImportance –
Certainly Expect
oNice to have – but not
important
oNot Very Important
oUnnecessary
Community Attitude Survey 2011
Results
e.g.: Public Toilets Service Levels Index
Suburbs > 30km from
Flinders Square
Community Attitude Survey 2011 - 2013
Results
e.g.: Public Toilets Service Levels Index
Renewal Criteria
Cost Impacts
Cost Impacts
Score
Lifecycle costs analysed to the renewal
4
Will minimise reactive maintenance
4
Operational and maintenance cost impact analysed
3
Quality and cost consequences by delaying renewal
3
All of the above
5
Low Scores
Projects
CapEx Cost Running Total
Medium Scores
Projects
High Scores
Projects
Once the scores are in
Financial
Services
Budgeting
High Priority
Projects
CapEx
Performance
Medium Priority
Projects
> Performance Indicators
>Services distribution %
> O&M Impact
Councillors
Workshop
EMT Approved
Draft CapEX
Executive
Management
Team Review
Council Affordability (LTFMP)
Low Priority
Projects
Re-distribution of
non-approved
projects
Councils’ Roles
Integrated Financial & Asset Management
COUNCIL
TO PROVIDE THE LEVEL OF
SERVICES, THE CURRENT AND
FUTURE COMMUNITY WANT AND
AGREED TO PAY FOR…
TO ENSURE TOWNSVILLE HAS
THE INFRASTRUCTURE IN PLACE
TO DELIVER THE SERVICES AT
PRESENT AND IN THE FUTURE,
SUSTAINABLY …
Service Delivery
Community
Engagement
Cost of Services
Level of Services
Capital Investment
New | Upgrade Capital
Renewal Capital
Operations and Maintenance
TO OPERATE AND MAINTAIN
ASSETS AND SERVICES AT LOWEST
LIFECYCLE COST
TO MAKE DECISIONS REGARDING
LEVEL OF RATES, COST
EFFECTIVENESS, LEVEL OF DEBT,
TIMING AND LONG TERM
SUSTAINABILITY
Operational Cost
Maintenance Cost
Long Term Financial Management Plan (LTFMP)
Budget
Integrating Financial & Asset Management
CEO Roles & Challenges
Integrating Financial & Asset Management
Capital Works Prioritisation Model
Questions…
Alison Bethune and Chris Watts from TCC are in
the audience here today , they are members of
the Finance and Service delivery prioritisation
team with me and will be able to field questions
and discuss our experience with you when we
break for networking
Kerry Phillips
Executive Manager Finance , Townsville City Council