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w.sw

an.wa.gov.au

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w.sw

an.wa.gov.au

Governance 2015

STRATEGIC COMMUNITY PLAN REVIEWDiscussion Paper

 

1. Background

Civic leadership is about providing guidance to make informed decisions for the good of the community through public participation, strategic long term planning and an effective governance structure. The City of Swan acknowledges that responsible decision making involves the elected Council, appointed staff and community leaders. There are multiple roles for local government in demonstrating civic leadership in the community, with three key aspects of leadership for the City of Swan being covered here.

1.1 Governance

Good governance is about being accountable, participatory, transparent, effective, efficient and compliant with legislation. To demonstrate good corporate governance the City of Swan has policy, process and plans in place which provide direction and control in making transparent and accountable decisions. All local governments in Western Australia are regulated by the Local Government Act 1995 (the Act) which prescribes how to manage civic and decision making responsibilities in an ethical and accountable manner. The City of Swan has a long history of stable governance under the Act.

1.2 Public Participation

A vital contribution to innovative and democratic leadership is being made through public participation, where citizens and governments work together on the issues that affect local communities. Public participation occurs in a decision making context and can be seen in any part of civic life, such as policy, budgeting, the planning of public places and the use of local amenities. While a good relationship with the community is understood as necessary for responsible governance, an ongoing challenge for many governments is how to progress from a relationship of consultation with the community, towards more participative community involvement in the leadership of the community.1

1.3 Finance

The City’s financial sustainability is measured by its ability to be financially viable whilst meeting community demands and promoting growth, prosperity and liveability. Managing exposure to risk and uncertainties is important when striving to meet the objectives set out in the annual budget or strategic plans. Strategies to manage financial risk are becoming increasingly important for local government, especially ‘growth councils’ such as the City of Swan.2

Key factors contributing to financial sustainability and risk include revenue autonomy, intergenerational funding, debt level and servicing, infrastructure maintenance and asset replacement requirements. A local government's annual operating financial performance is sustainable only if the Council avoids both excessive borrowing and operating deficits over the medium to long term; continuing long term financial planning mitigates some of the risk involved.3

 

2. Trends

A number of key international and national trends can be seen in the field of civic leadership that have the potential to influence the approach of the City of Swan and its civic leadership in the future.

2.1 Governance

2.1.1 Changing role of government from service provision to facilitation

Community services and activities are funded and delivered by an increasingly complex array of government (local, state and federal) and non-government organisations. This is the result of broad trends over the past two decades towards the devolution of services from state and federal governments to local government and the non-government sector.

2.1.2 Network governance

As the role of government is changing, authority for decision making is decentralising with a trend of state government reducing service provision. There is a growing reliance on partnerships and cross-sector collaborations as a result of the shifting role of local government from provider of public services to coordinator of local services. With the sharing of resources comes the sharing of responsibilities between levels of government, not-for-profit agencies, the corporate sector, and communities.4

2.2 Public Participation

2.2.1 Information and Communication Technology (ICT)

The emergence of new opportunities for participative democracy and direct communication between government and citizens (e.g. ‘e-government’ and ‘e-democracy’) is a significant global trend in public participation. This is especially the case with the rise of social media and the ability it gives for local governments to engage with the community. The increased coordination and integration between different areas of government jurisdiction and administration through the use of technology also means better use of existing resources and higher quality services for citizens.

2.2.2 Active Participation and Empowerment

The Organisation for Economic Cooperation and Development (OECD) identifies three levels of public participation which are; information, consultation, and active participation.5 It is this third level that is considered the ultimate goal, where community members take an active role as decision makers in the local government. The International Association for Public Participation (IAP2) Australasia promotes the values and leading practices associated with involving the public in decisions that impact their lives.6 The IAP2 Spectrum of Participation promotes collaboration and empowerment as the highest goals of public participation. These two models represent a global trend towards more participative democratic models in public decision making.

 

2.3 Finance

2.3.1 Economic Indicators

Financial planning for the local government is set against economic uncertainty. In order for financial planning to be effective a number of assumptions are adopted based on a series of economic indicators. The current global economic climate is volatile and closer to home, in Western Australia, we are seeing the mining industries fluctuations influencing the commodity prices and labour market. Nationally, the Reserve Bank continues to use monetary policy and interest rates to maintain the Australian Consumer Price Index in the 2 to 3% range.7 Although interest rates have recently reduced there is a strong likelihood that rates will progressively rise as the inflation rate is kept in check.

2.3.2 Commonwealth, State and Local Government

Australian community interests are represented by more than one form of government. The challenge posed by this system is ensuring that government planning of services and infrastructure are coordinated and that programs are delivered seamlessly to communities.

The widespread operating deficits and their frequent co-existence with substantial infrastructure backlogs are evidence of deficiencies in Council spending and revenue policy frameworks as much as they are of shortfalls in the level and escalation of grants from other governments and any past cost shifting.8

2.3.3 Financial Sustainability and Strategies

The analysis of current ratios, financial trends and assumptions to determine resourcing requirements assist the City to achieve its strategic objectives and ensure financial sustainability. The City of Swan strives for early identification of financial issues and any longer term impacts, linkages between specific plans and strategies, and enhancing the transparency and accountability of the Council to the community. Principles in continuous improvement in the financial capacity include diversity of revenue, prudent use of debt and the accumulation of reserve funds to meet future cash flow demands. The local government’s financial planning is to be consistent with the financial management principles.

 

3. Key Considerations

In relation to key trends, a number of considerations could arise for the City of Swan.

3.1 Governance

The local government sector of WA is in a constant state of change focusing on improvement and development. The Department of Local Government & Communities (DLGC) has a key role in promoting and supporting good governance in the sector through its administration of the Act.9 Proposed changes to the Act will place an obligation on Councils to demonstrate responsible decision making and planning through requirements such as the development of a Strategic Community Plan (and its subsequent reviews), Asset Management Plans and Long Term Financial Plans.

3.2 Public Participation

The IAP2 Spectrum of Participation describes the levels of community engagement that could be employed by governments in public decision making processes, ranging from low impact (weak) to high impact (strong) engagements. The highest impact levels (involvement, collaboration, and empowerment) are difficult to achieve in practice, due to constraints of time, resources and differing priorities of governments and communities. However, the City of Swan will strive to achieve to the highest levels while understanding what is practicable.

3.3 Finance

The Australian Local Government Association (ALGA) commissioned PricewaterhouseCoopers (PwC) in 2006 to complete a National Financial Sustainability Study of Local Government.10

The study identifies that local governments in Australia are responding to rising community expectations by providing a growing range of essential services and infrastructure. This expansion in roles and service quality, coupled with growth in input prices is generally exceeding the average rate of revenue growth and has seen a significant number of local governments develop financial operating deficits.

Local governments have limited mechanisms to raise revenue which are prescribed under the Act, so to moderate the size of these deficits, some have deferred or reduced expenditure on infrastructure renewals. Consequently, many local governments across the country have sizable financial sustainability challenges which require major reform to the way local government is funded and the way Councils operate. In the absence of such reform, there may be no option but to cut back on the level of local community services and infrastructure provided.

The matter is explored further under Section 4, below.

 

4. What this means for the City of Swan

4.1 Impact and Implications

4.1.1 Governance

The Act prescribes a number of statutory requirements in relation to the above elements of an effective governance framework. The City of Swan has developed a number of strategies, plans and policies that comply with the legislative requirements of the Act, thus ensuring a high level of corporate governance is maintained by the City.

4.1.2 Public Participation

Local governments have an important role to play in empowering citizens through public participation. This is an issue of good governance and an ethical or social justice consideration.11

The City of Swan has a Community Engagement Policy (POL-C-153). The framework and processes associated with this policy are used to guide public participation in decision making on key projects.

4.1.3 Finance

Accommodating for a high level of uncertainty adds to the complexities of financial processes, including but not limited to cash management, budgeting and financial planning. The Council is confident that its financial planning, including its Long Term Financial Plan, will allow the City to set priorities within its resourcing capabilities and deliver the assets and services required by the community.

4.2 The City’s current approach, future requirements, gaps and opportunities

4.2.1 Governance

The City of Swan has a commitment to responsible and transparent decision making on all matters affecting the community, consistent with best practice, governance frameworks and legislative requirements. The City has endorsed a Governance Statement, which embeds a governance framework in all business functions through the following measures:

• Defined roles, responsibilities and relationships of Councillors, the CEO and staff;

• A cultural framework that conveys the City's desired behavioural characteristics including a Code of Conduct;

• An effective consultation and engagement framework with communities and stakeholders;

• Defined strategic and operational planning strategy to meet the needs of the community and achieve sustainable development; and

• An effective decision making function that exhibits transparency, accountability and probity.

The City of Swan Governance Committee was convened in March 2008 (revised in 2014) and is responsible for considering and advising Council on corporate governance issues, including matters relating to local laws, council and town planning policy, delegation of authority, codes of conduct, strategic plans and decision making structures.

 

Further to this is the City’s desire to become a leader in the management of its Assets, both natural and built. Processes and systems in the management of the City’s assets are continually being updated and improved in order to give the best outcome for the community.

The City’s Place Management approach is another area where it is a leader in the governance space. By planning and delivering services for the community 'in Place' affords the City a greater opportunity to not only get feedback and engage with the community directly, but also deliver the specific services they want in a manner they need.

4.2.2 Public Participation

Active engagement with the community is considered to be an essential part of the City’s processes. The City has commenced work on the four yearly major review of the Strategic Community Plan, including community engagement and visioning sessions that this discussion paper will contribute to.

Several opportunities exist for greater public participation in the future:

• Continued improvement of the City's community engagement framework through lessons learnt from previous experiences;

• Commencing public consultation as early as practicable in planning processes;

• Improved evaluation of community engagements, to assess their effectiveness and usefulness to governance and decision making;

• Continued training for a range of City staff in community engagement techniques;

• Increasing the use of information and communication technologies, e.g. online surveys; and

• Improving inclusive practice in public participation - i.e. how to ensure the people who are seldom heard, have a voice (e.g. children, homeless people).

4.2.3 Finance

The City of Swan has a corporate responsibility to act on the findings of the Department of Local Government & Communities and continue to develop strong planning strategies to secure long term financial sustainability. The City is proactive beyond its legislative requirements in strategic long term financial planning. The City updates its ten year Long Term Financial Plan annually in the lead up to the annual budgeting process. The Long Term Financial Plan provides a framework, within which the Council can assess its revenue building capacity, establishes greater transparency and accountability to the community and demonstrates that the City can remain financially sustainable in the long term.

Challenges the City will need to consider for improving financial sustainability:

• The City controls assets with a replacement value of around $1.4 Billion.12 The challenge for the City within the current system will be to continue provision of services and maintenance of facilities, and factor in growth without adversely impacting local communities;

• The City of Swan is geographically the largest local government in the Perth Metropolitan area and one of the fastest growing urban corridors in Australia, balancing infrastructure requirements and services in these growth areas whilst maintaining established suburbs is an ongoing challenge for the City.

 

• There is a concern that even with greater than CPI increases in the growth of rate revenue the operational needs are consuming more and more of the rates/grants throughout the industry, leaving an insufficient level of funds to maintain the assets. The City may need to further diversify revenue streams to ensure long term sustainability.

In recent years, the City of Swan has placed a stronger focus on advocacy at the State and Federal Government levels, lobbying not only for funding for projects, facilities and services that are delivered by the City, but also for projects, facilities and services delivered by these tiers of government. These are seen as a priority for the City of Swan, and include projects such as the new Midland Health Campus and the Perth-Darwin National Highway (also known as NorthLink WA). Refinements to approaches to advocacy will be part of the City’s commitment to continued improvement.

 

Endnotes

1. Pugh, J & Saggers, S (2007) Cross-Sectoral Framework for Community Development in WA. http://www.walga.asn.au/ about/policy/community_development/documents/community/CrossSector_Framework_CD_30_11_07.pdf

2. WA Local Government Accounting Manual (no. 2, Feb 2011)

3. Local Government Advisory Board (2006) Ensuring the future sustainability of communities.

4. Painter, Prof. Martin (2009) Accountability challenges in the age of responsive governance. http://unpan1.un.org/intradoc/ groups/public/documents/un/unpan020466.pdf

5. http://www.oecd.org/LongAbstract/0,3425,en_2649_33735_2384034_1_1_1_1,00.html

6. www.iap2.org

7. House Standing Committee on Economics, Finance and Public Administration (2003) Rates & Taxes: A fair share for responsible Local Government.

8. WALGA (2006) Systemic Sustainability Study: Shaping the future of Local Government in Western Australia.

9. http://dlg.wa.gov.au/

10. ALGA (2006) National Financial Sustainability Study of Local Gov. http://www.alga.asn.au/policy/finance/pwcreport/

11. Pugh, J & Saggers, S (2007) Cross-Sectoral Framework for Community Development in WA. http://www.walga.asn.au/ about/policy/community_development/documents/community/CrossSector_Framework_CD_30_11_07.pdf

12. Estimated asset value $1.4billion, March 2015 (which includes; land, building, parks, landscaping, natural environment, roads, footpaths, bridges, infrastructure, drainage, and car parks).