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Virginia
strategic AM, including serving as the secretariat of the committee or task force, maintaining a central asset register, providing basic information for decisions from the central asset register or other sources, coordinating communication across stakeholders, and conducting or contracting out analytic work to support informed strategic decisions.
SGAM should also include establishing an asset management strategy, policy, plan, guidelines, and rules, and then adopting and publishing them as local bylaws that all sectoral entities with an AM mandate must follow. For example, rules may stipulate that leasing and sales of county property should be allowed only through open, competitive tender procedures (auctions), and perhaps requiring preapproval by county executives above a certain value threshold. Likewise, rules may stipulate that procuring debt above a certain threshold for financing asset acquisition or development requires a referendum to authorize the County Assembly and/or executive to approve debt financing.
Citizens also have a role in SGAM decisions. Figure 1.6 shows an example from Fairfax County, Virginia, USA, of a 10-page document sent to county residents to inform them about a county referendum to approve issuance of a US$182 million bond. (County voters approved the bond in November 2018.) This shows that citizens also have a role in the highest-level strategic AM decisions; in turn, the vote authorized the county to raise taxes if revenues appeared to be insufficient for serving the bond debt a few years later.
SGAM is related to and overlaps with both life-cycle management and accounting AM, since all strategic decisions should be properly accounted for
FIGURE 1.6
Information letter to citizens on a bond issuance vote in Fairfax County, Virginia
FAIRFAX COUNT Y BOARD OF SUPERVISORS 2018 Public Safety Bond Referendum Information
Bond Issue on the Ballot on Nov. 6
In the Nov. 6 general election, Fairfax County voters will be asked to vote YES or NO on a public safety bond referendum question. e referendum question asks voters to allow the county to borrow up to $182 million to fund the cost of constructing, reconstructing, enlarging, renovating, equipping and acquiring land for public safety facilities. If the majority of voters approves the question, the county currently plans to issue general obligation bonds to fund improvements to:
• Five re stations • ree police facilities
• Adult Detention Center • Existing courtrooms as described below
e county may in the future alter these speci c plans, but in such a case the county would have to use the funds for a purpose described in the ballot question.
and fit well into the other parts of accounting and financial management (for example, planning; budgeting; asset-financing actions such as divestiture, refurbishment, or acquisition; and debt and liability management). Life-cycle AM (LCAM) and financial AM also support strategic decision-making by helping valuation and comparison of investment alternatives, but LCAM also follows strategy with effective life-cycle management of strategic assets.
Capital improvement planning. Development of a medium-term development framework (MTDF) or planning is mandated and is practiced in various forms and quality in most developing countries. However, most of MTDFs are static, adopted for five years and not revised despite changing circumstance. As a result, such plans increasingly lack reality and fail to provide guidance for strategic decisions. CIP (also known as capital acquisition planning) is a procedure for selection and prioritization of asset development projects systematically and with inherent connection between demand and technical and financial aspects of the projects. Despite donor promotion and available guidebooks (Kaganova et al. 2018; Kaganova 2011) many local governments in the developing world are reluctant to commence CIP; some argue that they prefer obeying the national regulation that stipulates a simple, less consistent, and less useful MTDF. Robust strategic AM requires rigorous selection of a priority investment process in harmony with life-cycle AM, that is, CIP. Substandard AM and poor service quality are often determined by the ill-managed selection of priority projects or technical or financial modalities. CIP helps avoid such common mistakes.
Life-cycle asset management is an integrated approach to maintain and optimize the useful life of a particular asset, from the conceptual design through daily operation, maintenance, and refurbishment to decommissioning or disposal. LCAM is a holistic approach that addresses an individual asset (a plant, an office building, and so forth) or an associated group of assets (public transport fleet) with a scope to cover, not only technical aspects, but also the required financial resources, business processes, data, and enabling technologies that are critical to best use, best service, or best functioning of an asset. The LCAM approach supports both strategic and short-term or daily operation and maintenance of assets but it is also relevant for the medium to long term and could include risk-based preventive maintenance.
LCAM plays vital roles at the strategic level. Most municipal fixed assets have a long useful life with proper repair and maintenance, depending on technology and asset specificity. Buildings can be used for 50 to 100 years or longer with proper refurbishments, roads can be used for decades or centuries, a metrorail system works for 50 to 100 years, and solid waste landfills are often designed for a 20- to 30-year useful life. Investments in such assets are not only long term but also immense in value; they are strategic because of their big size, long life, and importance in public services.
LCAM is vital in a medium-term investment planning CIP (or capital acquisition planning) and in supporting specific high-level investment decisions on asset acquisition, development, or refurbishment of assets with strategic importance (figure 1.2). However, LCAM is applicable to and important for all assets that have a medium- to long-term useful life (for example, compactor trucks).
