Case study: How asset management protected a regional council from litigation

By intouch posted 06-02-2018 14:09


With the development of new technologies in the past decade or so, there has been exponential growth in the implementation of advanced asset management information systems.

However, local councils have been undertaking different approaches to asset management, depending on their willingness and capacity to adapt to the challenges being faced. Councils have generally opted for a blend of enhanced manual and automated systems that recommend recognised standards and specifications, depending on the size and experience of the Council and its reporting requirements.
AUS-SPEC is a specification system for the life cycle management of community assets, and was developed by IPWEA based on the collective knowledge of many local councils, with input from various industry bodies. It is aligned to the NATSPEC National Classification System, which is used widely by the construction industry and is maintained and updated by NATSPEC, a not-for-profit organisation owned by government and industry bodies.

In this case study taken from their new report The Necessity of Local Government Specification, AUS-SPEC investigates how asset management practices saved thousands of dollars in insurance claim costs for a small, western NSW council. 

The case

In the 1990s, Bogan Shire Council was sued for $25,000 by a ratepayer who was injured tripping on a footpath.

The Council lost in the Dubbo Local Court but appealed to the Orange District Court, arguing that they had an inspection system in place to manage repairs, but were limited to an extent by allocated budget funds.

The Council used an annual spreadsheet recording system for ranking footpath tripping defects as Condition 1 to 5, with 5 being the most severe or unsafe. The cost to eliminate all tripping points was $300,000, and the Council’s annual budget allocated $50,000 for rectification of defects rated Conditions 4 and 5.

The District Court accepted the Council’s appeal and overturned the Local Court’s judgement. Only as a result of the stringent maintenance and management system that they had in place to record and address the footpath tripping points, was the Council able to make an appeal to the District Court.

Now, the Council maintains the resources to sufficiently execute its asset management and maintenance plan. The Bogan Shire Council still uses the self-developed spreadsheet as part of the asset management and maintenance system, and it has:

• An asset management engineer for its local roads and other assets
• A Roads and Maritime Services contract for the highways
• Two highway inspectors to report defects using dedicated Asset Management Information Software (AMIS) and iPads

Bogan Shire and three other neighbouring councils were successful in acquiring a 100% grant from the State and Federal Governments for training, software, and the purchase of devices such as iPads, to be utilised for proactive asset inspections.

This case study was first published in AUS-SPEC’s report The Necessity of Local Government Specification. Read it here.



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