Strategic issues for a city roadways re-engineering project

Doug Drever
Manager Public Works
Engineering Department
City of Saskatoon, Saskatchewan

Raymond J. Gerke
Principal & Managing Partner
VEMAX Management Inc.
Edmonton, Alberta

This article discusses the issues arising from a re-engineering project that was successfully completed by the City of Saskatoon last year.

The project's objectives were to develop and implement needs-based budgeting tools, data, and business processes for the road network in Saskatoon. The project implemented network and project level Pavement Management Systems, a Maintenance Management System, a zero-based budgeting business process, and a method to annually assess the impact of decisions on the value of the road network.

This required the City to:

  • Design and implement a detailed condition rating process for the street network from expressways down to local streets;
  • Develop performance models and cost models for the actual physical performance of the network;
  • Develop modern business practices that would enable the City's budgetary and accounting processes to fully maximize the advantage of the new technology. This paper focuses on the processes used to develop the new business practices.
Key Issues
After initial implementation of the tools and technology, the City identified that the core business processes of the City would have to change. Otherwise the new technology could not be successfully implemented.

The key issues that needed to be addressed were:

  • There were varying levels of understanding of asset management principles and practices;
  • There were no uniform systematic methods for work planning and delivery;
  • No uniform process for reporting outcomes of expenditure;
  • No program objectives or performance measures;
  • No meaningful uniform measures of efficiency and effectiveness.
The Challenge
Council was faced with similar decisions on an annual basis about the level of investment in preserving the road assets of the City. The only measure of this core activity was the financial expenditures. There was no measure of outcomes of the expenditure of the previous year's preservation budget (a mixture of a variety of budgets including parts of Capital and Operating). A new process had to include performance measures that would ensure accountability for the budgetary decisions of the City.

Change Management Structure
The stakeholder input for this project that institutionalized the end product with maximum buy-in from the internal stakeholders consisted of:

Stakeholder Group: Works Committee Change Management Role: Ensured direction of project was consistent with City goals; promoted asset management at executive level of City; provided support for the project.

Stakeholder Group: Steering Committee Change Management Role: Confirmed the strategic direction of the project; removed internal/external "roadblocks" for project team.

Stakeholder Group: Project Manager Change Management Role: Managed project budget, deliverables, and time; coordinated project activities; reported to Steering Committee; provided direction on impacts across the Department.

Stakeholder Group: Project Team Change Management Role: Reviewed all starting point documents for task groups; reviewed all outputs from task groups; primary force of change; assessed progress of project.

Stakeholder Group: Task Groups Change Management Role: Determined "fit for purpose" solution for specific asset management needs; Starting Point defined by Project Team, reviewed by Steering Committee.

Stakeholder Group: Operational Groups Change Management Role: Performed specific activities.

The above stakeholder input required in excess of 30 personnel from across the City to be involved in all aspects of the project.

Task Groups
Overall, eight task groups were identified as being needed to ensure input from the internal stakeholders regarding specific issues related to the City's processes. Task groups were given a starting point document developed by the consultant and the project team and they met for several days in a closed setting to ensure unobstructed focus on the task. They were the working groups for the project and tended to have strong ownership of the results.

The task groups identified the following issues:

  • Roadway preservation business must compete with all other service areas;
  • Business of preservation was different from all other business in the City of Saskatoon;
  • Current budget processes had absolutely nothing to do with the condition of the network;
  • City needed re-engineering of the budget process and not just tinkering with budget process.
All task groups came up with a final report or business process for their allocated tasks.

Implementation Objectives
At the very start of the re-engineering project the project team and steering committee believed it was important that the overall project have firm and universally agreed-to implementation objectives that were to become the guiding principles of the project. The consultant brought to the project implementation objectives from similar re-engineering projects around the world. Those objectives were then reviewed by the project team and finalized into the nine discussed in this paper. The steering committee and the Council of the City agreed to the implementation objectives. The implementation objectives are as follows:

1. Understand Asset Management Principles and Practices
This would result in all levels from Maintenance Supervisor to Director Works and Utilities and External Stakeholders having a more uniform and modern knowledge of the practices and principles of Asset Management.

2. Be Able to Develop a Needs-Based Budget for all Preservation Works
This would enable the City to determine the cost of maintaining, or of improving and degrading, the current network condition or any part of the network. It was recommended that the budget should include maintenance and rehabilitation works into one preservation program.

3. Communicate the Benefits of Asset Management to External Stakeholders
The City would be in a position after the implementation to articulate what had been done by the City to improve its accountability for asset management. Capitalization of the asset (determining the written-down replacement cost of the asset annually) was an example of increased accountability to external stakeholders.

4. Present Budget in an Understandable and Relevant Way to External Stakeholders
The budget must be able to be defended. Therefore, the supporting information for the budget must be able to be audited and understood by the decision-makers.

5. Develop and Implement Asset Management Policies and Procedures to Institutionalize Asset Management
Large organizations require documented policies and procedures for good things to work in the long-term. Once the initial enthusiasm has diminished and the immediate organizational priorities change, documented policies and procedures ensure the core business continues to function.

6. Respond Positively to an External Audit
Some Provincial Departments had already been subjected to a value for money audit. An external audit is an opportunity to demonstrate the level of control an organization has over its activities. At the completion of the project, the City was able to demonstrate the logic of all decisions and the links between decisions and the City's goals.

7. Fully Account for the Outcomes of the Expenditure of Asset Management Funds
This would enable the City to compare expected performance with actual performance. As an example, short- and long-term targets were set for condition of the network based on various budget scenarios. After the budget had been spent, the City was able to compare the condition expected with the condition achieved.

8. Develop a Five-Year Network Level Maintenance Plan
The plan would include expected improvements in decision-making as well as the predicted performance of the network. As an example, if funding were to be increased in the short-term to improve the condition of certain types of pavements, there may be a net reduction in overall preservation costs in the long-term. The plan needed to be able to be understood by non-technical people such as politicians.

9. Be More Objective in Asset Management Processes
A high level of subjectivity appeared to be associated with many of the asset management processes within the City. This subjectivity may be the best way of making the best decisions; however, as this cannot be proved, there will always be some doubt. An example of improved objectivity was the manual condition rating system that was implemented. The maintenance workforce had always inspected road conditions; however, now they were able to all do it in a more systematic and uniform way. This minimized personal bias associated with subjective decision-making. The goal was to be more objective, not totally objective. Skilled peoples' opinions will always be of value in a well-run business. However, the more people involved in the process, the greater the need for Quality Assurance of processes.

Conclusions
Due to the massive scale of change and the vast level of resources required to deliver the project effectively, the project was identified as a long-term project. This meant that the overall project of re-engineering was to occur over multiple years. The complete re-engineering project commenced in 1995 and, at the stage of writing this paper, all the business processes have been designed and charted. Many of the policies and procedures have been documented and a full quality-assured condition rating process has been implemented. Also, the City has moved towards documented standard work practices for all of the operational field staff covering all the physical assets of the City from Roadways to Water & Sewer, Parks, and Transportation branches.

The work that the Roadways branch of the City has done in the re-engineering project has been seen as a showcase for other branches. Much of the work that has been done for Roadways is now being reviewed and adapted to the other branches of the City.

It is worth noting that much of the new approach to managing the asset has already been implemented by City management, prior to finalization of all the details.

To reach Doug Drever, call (306) 975-2869 or send e-mail to doug.drever@city.saskatoon.sk.ca. To reach Raymond J. Gerke, call (403) 463-9501 or send e-mail to ray.gerke@vemax.com.