© CT Management Group Pty Ltd 2015 Municipal Association of Victoria Rate Cap Forum 25 th November 2015 Ian Mann CT Management Group 0429 941 435 [email protected]

© CT Management Group Pty Ltd 2015

Municipal Association of Victoria

Rate Cap Forum

25th November 2015Ian MannCT Management Group0429 941 [email protected]


COUNCIL FINANCES

Rates & Charges - $5,203 million

Employee Costs - $3,208 millionMaterials and Services - $2,444 million


PAGE 3

Assumption: Rate increases 5% pa - Rate cap 3.05%, 2.85%, 2.80%, 2.75%..Impact: Year 4 – 9% reduction

Year 10 – 21% reduction

Forecast Max Rate Increase (16/17) (17/18) (18/19) 3.05% 2.85% 2.8%

RATE CAP IMPACT

2015/16 – SRP

17 Councils show future rate increase at less than 3%

Remaining Councils retained rate increases on average at ~5%

http://www.google.com.au/imgres?q=anz&um=1&hl=en&sa=N&tbo=d&biw=1360&bih=673&tbm=isch&tbnid=rtGun-tbGprwjM:&imgrefurl=http://annystudio.com/misc/new-anz-logo/&docid=YwrcIilwVQnCUM&imgurl=http://annystudio.com/misc/new-anz-logo/new-anz-logo-building.jpg&w=400&h=400&ei=VaEIUdfCGsXPmAXTu4HwBA&zoom=1&ved=1t:3588,r:63,s:0,i:346


CONTEXT

Employee Cost growth next 4 years (pa) 4.1%

Rate Impact of Employment growth (pa) 2.6%

Salaries and Wages

Capital Works 2015/16 Budget($,000)

Renewal $1,088,874New, Upgrade, Expansion $1,268,032Total Capital Works $2,356,906

Additional Expense - New CW – Depreciation (1.8%) $22,824

Additional Expense - New CW – Operations and Maintenance (1.2%) $15,216Total Additional Expenses $38,040Impact on Rates – New Cap Works 0.73%

Total Percentage of Rates – Salaries & New Cap Works 3.33%


FINANCIAL SUSTAINABILITY ASSESSMENT

LTFP

Services(??)

Assets(AM Plans

Renewal ProgramsCW Programs)

Management Approaches• Revenue Management (seek additional income)• Expenditure Management (drive efficiencies)• Service Management (service delivery options)• Asset Management (renewal, new, upgrade)


SUSTAINABLE SERVICE DELIVERY

PAGE 6

KEY QUESTIONS● What are the current range of services that Council

provides to the community?

● Is Council delivering the most appropriate level of service

to the community within its financial capacity?

● Is Council delivering these services in the most efficient

manner? Is the current

service delivery

model sustainable?



PAGE 7Time

$

All S

ervi

ces

Efficiency Gains

Mandatory Services

“must do”

Preferred Services

“should do”

Discretionary Services

“like to do”

Capacity to deliver services in a revenue constrained environment

SERVICE MANAGEMENT OPTIONS

Business as Usual



SRP

0 10 1551

LTFP

Asset Renewal

Capital Works(New/Upgrade)

Services

YEARS

FINANCIAL PLANNING INFORMATION

LTFP

10 yr CW Program


Service Management

COUNCIL PLAN

Strategic Resource Plan

Long Term Financial

Plan

Capital Works

Program

SERVICE AND FINANCIAL MANAGEMENT FRAMEWORK

Capital Works

(Renewal)

Service Strategies

Service Plans

AMP (Roads)

AMP (Drainage)

AMP (Buildings)

AMP (Bridges)

AMP (Open Space)

Infrastructure Operations & Maintenance

Service Operatio

ns

Asset Management

Financial Sustainability

Capital Works (New, Upgrade,

Expansion)

Capital Works Evaluation


Service Planning

Service Management

COUNCIL PLAN

Strategic Resource Plan

Long Term Financial

Plan

SERVICE PLANNING FIT

Capital Works

(Renewal)

Service Strategies

Service Summaries

Service Plan Reviews

AMP (Roads)

AMP (Drainage)

AMP (Buildings)

AMP (Bridges)

AMP (Open Space)

Service Comparative

Choice Evaluation

Service Operation

s

Asset Management

Financial Sustainability

Capital Works (New, Upgrade,

Expansion)

Capital Works

Program

Infrastructure Operations & Maintenance

Capital Works Evaluation


SERVICE PLANNING

•Summarize details of all current Services•Define current Levels and Cost of Services •Prepare draft LTFP•Review capital works and services cost impact on LTFP•Assess financial sustainability of current Services

Stage 1 - Current Position

•Review alignment of current services with community needs•Internal review of the Levels of Service for each Service•Develop comparative options to improve alignment

Stage 2 - Options

•Community and customer engagement on comparative choice options between services and within services

•Identify services for review•Resolve associated affordability tradeoffs

Stage 3 - Consultation

•Document revised Levels of ServiceStage 4 - Revised Levels of Service

•Review efficiency of service delivery for each service•Revise Operations Plan for each Service•Train staff on new programs and processes

Stage 5 - Prepare to Implement

•Develop performance indicators to monitor changed Levels of Service and performance•Communicate changes to the community and service customers•Implement new service levels

Stage 6 - Implementation


SERVICE PROFILE

PAGE 12


RELATIVE IMPORTANCE

Self Assessment

Community Surveys


PAGE 14

Park

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aint

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odro

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Man

age

men

t

Age

d Se

rvic

es

Stat

utor

y Pl

anni

ngStage 1 – Summary Service Profile for each Service (Tactical Level)

Oth

er S

ervi

ces

Oth

er

Serv

ices

All Council Services

High

Low

Relative Importance

COMPARATIVE CHOICE

Later Stage - Detailed Service Plan for each Service (Operational Level) -Efficiency



FINANCIAL FORECASTS


FINANCIAL FORECASTS


CAPITAL / ASSETS


LONG TERM FINANCIAL PLAN

Can Council sustain its current range of services at the current level of service?

PAGE 18


STANDARD REPORTING


Service Profiles

PROCESS

Services ($ Forecasts)

LTFP(10yr)

Assessment of each Service(Relative Importance)

“Profile” of each Service(Contextual Information)

Understand Current Position

Decide on a course of

Action

Capital Works ProgramNew, upgrade expansion

($ Forecasts)

Asset Renewal($ Forecasts)

Understand what you do, what it costs and the benefits to the community

Community Input

Integrated Solution

Investigate Options

(Co-design)

Service provided

(Co-produce options)


With this framework you will:

Have a better understanding of the services that your Council provides

Have a strong foundation on which to engage with the community on a range of options

Be in a better position to make sound comparative choice decisions which provide the best outcomes for your community

Move towards a much stronger customer outcome focused organisation


End

Ian MannCT Management Group0429 941 [email protected]

Documents

© CT Management Group Pty Ltd 2015 Municipal Association of Victoria Rate Cap Forum 25 th November 2015 Ian Mann CT Management Group 0429 941 435 [email protected]