Mines better than yours Local Government Property Contracting.

Mines better than yoursLocal Government Property Contracting


TodayIntroductionsBackgroundMines better than yoursConversationOpportunities for collaboration?


Introductions

Ann Clark • Horowhenua District Council

Ken Price• Kapiti Coast District Council

Doug Tate• Manawatu District Council

Background

• In 2012 $382 million spent nationally on Property Opex• Value is likely to be much higher, when other services are included• Government Rules of Sourcing

– Recommended rules for local government– All of Government Contracts– Regional Shared Services

• ‘Better Local Government’– LGA Amendment Act


Background

• ‘Better Local Government’– LGA Amendment Act

The Amendment Act key changes:• provide for greater encouragement to local authorities to collaborate and cooperate;• enable the Local Government Commission to create council-controlled organisations

and joint committees as part of a re-organisation scheme;• provide for greater transparency, clarity and accountability in contracting for delivery

of services by council-controlled organisations;• broaden the scope of the triennial agreement between councils within each region;• provide a clearer framework for joint committees;

• Section 17A Review of Service Delivery Requirement


Background

Operational Expenditure by Activity30 June 2012

Source: http://www.localcouncils.govt.nz/LGIP.nsf/wpgURL/Profiles-Local-Government-Statistical-Overview-Operational-Expenditure



Background

Capital Expenditure by Activity30 June 2012

Source: http://www.localcouncils.govt.nz/LGIP.nsf/wpgURL/Profiles-Local-Government-Statistical-Overview-Capital-Expenditure

Manawatu District CouncilMines better than yoursLocal Government Property Contracting

Manawatu District• Geographically very spread – difficult country• Many assets in a range of conditions

– Not high volume, but large and important

• Annual Property Activity Budget of $1.2 million• Community Facilities Contract - 3910

– Provides some cover for afterhours

• Direct engagement with Plumbers, Builders, Glaziers


Better?

• Sound understanding of what is going on• Historical and long standing relationships

– Existing Tacit knowledge of assets

• Flexibility in who can be used– Limited procurement methodology

• No ‘on cost’ – low cost?• Local Content

– What is local?– Community view that not being ‘ripped off’


Or not?

• Lots going on –hard managing multiple contractors• Very hands on – limited resourcing• What is NEC3 – new language, no one knows it• Limited ability to scale up in events• Procurement?• Health and Safety Implications

– Health and Safety Reform Bill

• Limited structured Asset Management Information• Low cost or low value?



Maybe? The future

• Structured approach to how services are procured and implemented – Service Review

• Service Contracts for some larger activities• Retaining the ‘local’ content• Increased Health and Safety and procurement processes• Looking to other Councils locally for collaboration

Horowhenua District CouncilMines better than yoursLocal Government Property Contracting

Horowhenua District

• Budget of $1.5 million• Previously low levels of asset condition

– Shifted to high levels of planned maintenance, unplanned low

• Service provider across assets– Hub for all things building across the Council, Pools to Water Plants– 115 Pensioner Housing Units, Commercial Property

• NEC3 Contract– New Engineering Contract 3 (Collaborative)

• Single large Facilities Management Contract– All services are bundled together


Better?

• 2010 FM Contract put together– ‘De-risking’ the Property Activity, not sufficient resource

• Private Contractors had the knowledge of assets• Allowed for significant volumes of work to be undertaken in a

systematic, programmed way– Organisationally Resource Poor

• Provided a consistent approach to managing property assets across the District

• Shifted from a pattern of high risk, high cost unplanned work to a high level of planned work


Or not?

• Shift in knowledge base back to Council• FM Contractor an obstacle to resolving many issues

– Unneccessary step, opportunity to remove ‘the middle man’– Unable to deal directly with subcontractors

• On-cost made some project and maintenance work unviable and costly

• Political view of ‘Local’ Contractors– Yet over 70% of Contractor spend was local– What is ‘local’


Maybe? The future

• Smaller function contracts– Building washdowns, cleaning, mechanical and HVAC, Fire Services

• Shift away from NEC3, back to traditional forms of contract• Panels of preferred suppliers

– Approved ‘local’ builders, plumbers and other trades

• Increased Resources to manage contract internally• More structured approach to data and asset management

– Development of Registers– Exploring RAMM for Property Contract Management

Kapiti Coast District CouncilMines better than yoursLocal Government Property Contracting

Kapiti Coast District Council

• Geographically spread• Four very distinct local communities with quite different characteristics and

demographics• Annual Property Activity budget of 2.6 million• Multiple contractors, annual or 3 yearly most typical• Small, focused Property resource/good control over Property portfolio• Recent organisational move to Activity Plans, previously Asset Plans• In-house Property Asset Management System – live asset info, very accessible

and utilised daily• Specialist contractors can be an issue, e.g. Lift Maintenance (Wellington-based

generally)


Better?

• A very good understanding of assets• A challenge is capturing the long term needs of building

occupiers (e.g. Libraries)• Day to day management of Operational and Renewal work

enhances asset knowledge and ensures ‘finger on pulse’• Strong long term relationships with some of contractors is a

feature • Don’t have eggs in one basket (cleaning example), flexibility is

critical


Or not?

• Multiple contractors are a challenge to manage when resources are limited

• After hours coverage is an additional pressure on internal resources


Maybe? The future

• Regional amalgamation?• Larger contracts, e.g. Security have potential to be ‘super-

sized’ into a regional setup approach• Central and Local Government moves towards review of assets

(efficiencies)• Further development of asset management practice (new

asset system?), and embedding health & safety changes • Earthquake strengthening works may require expertise not

currently available within Kapiti (Engineering/Contractor)


Conversation

Share with each other your contracting modelBetter or not? Maybe?

Is it working for you?Anything we can share?


ConversationBetter or not? Maybe?


Opportunities for collaboration?Better or not? Maybe?

Share with each other things you may be doing now

Should we be promoting anything as an industry?


Opportunities for collaboration?Better or not? Maybe?


Thankyou

Mines better than yours Local Government Property Contracting.

Documents

Transcript of Mines better than yours Local Government Property Contracting.