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Determining agreed service levels

"We need to talk"

December 2016

One of the required changes to infrastructure reporting in Special Schedule 7 is a new ratio, the cost to bring assets to an agreed service level. The inclusion of this ratio is mandatory in the Financial Statements to be reported in November 2017.

This is a shift away from a technical condition rating as the basis for calculating the funding backlog, requiring a completely different approach to decision-making about how infrastructure will be managed and reported. It also represents a very real challenge for councils that have never engaged with their community about asset service levels, or clearly defined the levels at which their assets are currently being managed and maintained.

Whether undertaken as part of or separate to community engagement for the next round of Integrated Planning and Reporting, councils will need to consider how conversations with the community about asset service levels will be conducted. Clear, accessible and visual information is essential for this process to be undertaken effectively. Service levels need to be defined in common language, in a way that residents can understand and engage with, moving away from technical engineering terms to the outcomes they deliver for communities.

There also needs to be a clear link between service levels and funding requirements to enable residents to appreciate the impacts in financial terms of moving asset service levels up or down. Demonstrating the impact not just on Council’s budget but on how these decisions effect average rates is a very powerful engagement technique enabling residents to determine how their assets are to be delivered and what they are prepared to pay for them.

Regardless of the tools and techniques, engaging with the community in this way requires planning and effort and councils need to be thinking about this now.

To talk about community engagement and asset service levels contact j.franke@morrisonlow.com