© CT Management Group Pty Ltd 2014 ™ ™. ™™ To support the community and to continue to...
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Transcript of © 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
© CT Management Group Pty Ltd 2014
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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
© CT Management Group Pty Ltd 2014
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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?
© CT Management Group Pty Ltd 2014
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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
© CT Management Group Pty Ltd 2014
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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
© CT Management Group Pty Ltd 2014
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Local Environment - Rural
© CT Management Group Pty Ltd 2014
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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
© CT Management Group Pty Ltd 2014
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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
© CT Management Group Pty Ltd 2014
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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
© CT Management Group Pty Ltd 2014
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Council Finances
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Employee Costs Annual Increase 5.0~5.5%
© CT Management Group Pty Ltd 2014
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Materials & Services Annual Increase 3.9~4.5%
© CT Management Group Pty Ltd 2014
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Operating Expenses Annual Increase ~4.4% Reduction managed by lowering service standards each year
© CT Management Group Pty Ltd 2014
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Capital Investment
© CT Management Group Pty Ltd 2014
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Total Income Annual Increase 4.4~4.6%
© CT Management Group Pty Ltd 2014
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Rates & Charges Inflation Rate (CPI) – 2.5~2.9%
© CT Management Group Pty Ltd 2014
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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
© CT Management Group Pty Ltd 2014
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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
© CT Management Group Pty Ltd 2014
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Underlying Operating Position
© CT Management Group Pty Ltd 2014
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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
© CT Management Group Pty Ltd 2014
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Council Finances
© CT Management Group Pty Ltd 2014
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Council Services
Service Driven View
Customers/Residents/Community
External Focused Services
Asset Support Services
Internal Services
© CT Management Group Pty Ltd 2014
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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
© CT Management Group Pty Ltd 2014
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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
© CT Management Group Pty Ltd 2014
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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
© CT Management Group Pty Ltd 2014
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Summary
Customer focused Adaptive Flexible
Responsive Robust Integrity
Management & Financial Systems of the future must be: