© ct management group pty ltd 2014 ™ ™. ™™ to support the community and to continue to...

© CT Management Group Pty Ltd 2014

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Future of Local Government Summit

Local Government Sustainability


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Sustainability

To support the community and to continue to provide services the Council must remain sustainable

Future financial performance is an indicator of sustainability

Solutions are not always financial


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Council Capacity Continuum

Basic Needs

Intermediate Needs

Wants

Financially Capable

Financially Challenged

Financially Secure

Roads, Garbage, Health Services

Infant Welfare Services, Home Help, Preschool, Parks & Gardens

Regional Aquatic Centres, Community Centres, Performing Arts Centres

Where does your Council sit now?

Where will it be in 10 years time?


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Challenges – Broader Environment Globalisation Environment Changes Changing community and social expectations Decline of traditional industries – agriculture, food processing,

manufacturing Growth in communications – people want access to information ‘now’ Debt management (national, state & local) Demographic changes Smaller Government Low Carbon Future - Peak oil


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Challenges – Local Environment

Rural

Population decline (22/47 Councils recorded negative pop growth 2009-2012)

Low median household income (35/47 Councils median less than $700/wk)

81% of the Communities registered an increase in disadvantage between 2006 -2011 (as measured by the socio-economic disadvantage index)

Average age of population has increased

Aggregation of landholding operations

Peri-Urban Councils and Regional Cities fair better than rest of the Rural Councils

Urban

Population growth (2/32 Councils recorded negative pop growth 2009-2012)

Higher median household income (4/32 Councils median less than $700/wk)

66% of the Communities registered an increase in disadvantage between 2006 -2011 (as measured by the socio-economic disadvantage index)

Average age of population more stable

Increase in population

Growth in properties

Two Speed Local Government Sector


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Local Environment - Rural


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Challenges – Local Government Changing community and social expectations Pressure on Councils to retain their identity and

independence Tighter public sector funding in the future Community resistance to large rate increases Transfer of service provision Most Councils have an unfunded community infrastructure

gap over next 20 years $2.3 billion unfunded community infrastructure gap over next 10

years


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Challenges – Local Government

Rural Area of State – 217,000 km^2 (95.6%)

Population – 1,220,000

Pop Density – Min 0.5 h/km^2 – Max 360h/km^2

Road Length – 105,000 km

Urban Area of State – 10,100 km^2 (4.4%)

Population – 4,400,000

Pop Density – Min 61 h/km^2 – Max 4,860h/km^2

Road Length – 24,500 km


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Challenges – Organisational Changing community and social expectations Managing expectations Priority setting Aging Workforce Skill shortages Vested interests resist change Staff are struggling to find the time and resources to do their duties


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Council Finances


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Employee Costs Annual Increase 5.0~5.5%


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Materials & Services Annual Increase 3.9~4.5%


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Operating Expenses Annual Increase ~4.4% Reduction managed by lowering service standards each year


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Capital Investment


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Total Income Annual Increase 4.4~4.6%


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Rates & Charges Inflation Rate (CPI) – 2.5~2.9%


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Long Term Financial Plan

Objectives It should be based on an organisation achieving its

affordable service level objectives whilst maintaining its financial sustainability*

Strategy It should include a description of the financial strategy that

is based on

Review It should be reviewed annually

* Long Term Financial Planning – Practice Note 6 (IPWEA/ACELG) - 2012


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Financial Management

Sustainability Measures – The importance of a GOOD LTFP Must manage in a resource constrained environment Community will not continue to accept large rate increases Ensure that the financial modelling advice provided is

sound


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Underlying Operating Position


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Action Required

The current way of doing things is no longer sustainable Costs increasing above resident’s capacity to pay Service delivery under threat Asset degrading Risk of government intervention

Need a new way


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Council Finances


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Council Services

Service Driven View

Customers/Residents/Community

External Focused Services

Asset Support Services

Internal Services


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Service Planning (Effectiveness) Strategic integrated planning

Linked to other levels of government Customer/community focused Allocate available resources to highest need

Comparative choice Improve service outcomes Improve customer satisfaction Transparency and accountability

Procurement (Efficiency)

Service Delivery


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Support Services

Target efficiency gains of over 30%Efficiency considerations Build systems that are customer and service centric

Adaptive and responsive Integrated systems linked to other levels of government

Joined up Government Common systems and processes across Councils Shared Services

Regional Hubs Shared staff Contracts

Use of advanced technology Cloud computing (software as a service) Bureau Services

Common data sets Common systems and processes across Councils


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Capital Works Fund renewal demand New and Upgrades to support changes in service

delivery Account for all life cycle costs Decisions based on need within financial capacity


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Summary

Customer focused Adaptive Flexible

Responsive Robust Integrity

Management & Financial Systems of the future must be:


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EndPresenterIan MannCT Management [email protected] 941 435

mailto:[email protected]

© ct management group pty ltd 2014 ™ ™. ™™ to support the community and to continue to...

Documents

ct management group

financial slide

sound slide

year slide

new way slide

debt management national

councils median

community centres