Victoria State Emergency Service Unit Costing Review
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Transcript of Victoria State Emergency Service Unit Costing Review
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Victoria State Emergency ServiceUnit Costing Review
Mary BarryChief Executive OfficerVictoria State Emergency Service
September 2008
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VICSES FUNDING
VICSES Output Price Review 2006/2007
• Delivered $40million to VICSES over 4 years– Systems Development and Implementation (OIMS/SAP)– Broadband to all Units– Volunteer Support Officers X 6– OH&S and HR Support to staff and volunteers– Funding to establish Statutory Authority to meet
legislative and statutory obligations
OPR Terms of Reference did not include Unit funding
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Unit funding
• Funding Agreement 1990 - operating costs of VICSES Units shared by State Government and Local Councils.
• $5,000 per annum (1990) to cover power, lighting, heating, phone, pager services, fuel and consumables.
• Increased by CPI - $10,780 p.a. in 2008/09• Many Local Councils pay over and above the
minimum subsidy including the provision of cash, fuel, insurance and maintenance.
• All units irrespective of size or ERAS outcome are allocated the same minimum funding
• The level of funding to Units has not been The level of funding to Units has not been reviewed since 1990reviewed since 1990
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Unit activity has increased by 50% since 2005/06
Changing weather patterns have seen a significant increase in VICSES response to storms/floods
• Tasks have increased from 8,436 in 2005/06 to 15,538 in 2007/08, 85% increase
• Total Unit activity has increased: 13,317 tasks in 2005/06 19,890 tasks in 2007/08 49% increase
• Unit activity is expected to increase further as the incidents of severe weather conditions continue to rise (Climate change).
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VICSES REVIEW OF UNIT FUNDING
• The Unit costing project was initiated to get a better understand of Unit cost drivers and pressures.
• Grant Thornton appointed in February 2008 to:– Do analytical review of small, medium,large
Units based on audited data for 2006/2007– Detailed Unit costing model incorporating:
• Identification of cost drivers for Unit costs• In-Kind support provided by Councils• Identification of minimum/standard costs
involved in running unit and a $ range• Consideration of relationship of cost to variables
Unit tasks (RCR), Membership, and ERAS.
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The project approach involved a number of key steps:
• Selected sample of Units representative of the Unit population: 3 small, 20 medium, 5 large – 20% of all units = 28Total Units: 20 small, 95 medium, 25 large = 140
• Survey to collect key financial and activity information for 2006/07. Information collected via the survey was cross-checked to 2006/07 Unit financial statements where possible.
• Liaise with key stakeholders at Units to clarify elements of financial statements and activity.
• Identification of cost drivers for Unit costs and minimum/standard costs involved in running a VICSES Unit and a $ range.
• Determine relationship of cost to variables such as Unit tasks, Membership, ERAS and Road Crash Rescue.
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In many cases representations made by Units have been relied upon in the compilation of the results
• Surveys were circulated to participating Units for completion based on their operating results for 2006/07.
• Where possible the information provided by Units was cross checked to Unit Financial Statements.
• Units were also asked to provide details, including an estimate of the value, of "in-kind" support provided by the Local Council or other organisations. Unit representations on the level and value of "in-kind" support were relied upon when reporting the value of support provided.
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The current Unit subsidy is meeting less than 50% of the operating costs of medium and large Units
• SES Unit operating costs increase substantially as the size of the Unit increases, this is mainly in the area of Vehicle expenses.
• Unit subsidy is only meeting 49% of the costs of medium Units and 39% of the costs of large Units.
• The operating costs of large Units are greater than medium Units by 24%.
• Whilst the subsidy is generally meeting the operating costs of small Units these comprise only 15% of VICSES Unit population.
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Operating costs per volunteer are comparable between Units, indicating the number of volunteers is a driver of cost
• Operating costs per volunteer are comparable between Units indicating that the number of volunteers per SES Unit is a driver of cost.
• The number of volunteers per Unit is also indicative of the size and number of tasks completed by each Unit.
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The operating costs of metropolitan Units are slightly higher than regional Units
• Metropolitan Unit costs average 4% higher than regional Unit operating costs.
• Regional Units comprise 77% (108) of the total population of 140 Units.
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The operating costs of Units providing Road Crash Rescue services are higher than those that don't
• Operating costs for those Units providing Road Crash Rescue services are 11% higher than for those Units not providing those services.
• Units providing Road Crash Rescue services comprise 72% (101) of the total population of 140 Units.
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The composition of operating expenditure was reasonably consistent regardless of the size of the Unit
For all three types of Units the largest expenditure items were: – motor vehicle expenses and
overheads (at least 60% of total operating costs).
– Overhead costs comprise rent, office supplies, insurance etc.
• The percentage of operating costs spent on overhead and motor vehicle costs is higher for the medium and large Units.
• This is expected due to the increased levels of equipment and vehicles held by these Units.
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In-Kind Support from Councils
• The nature of in-kind support varied greatly between Units.
• The level of in-kind support is not correlated to the size of the Unit but is dependent on the relationship between the Unit and their local council & community.
• Medium sized Units receive the largest percentage of in-kind support from councils and local communities
• The types of in-kind support provided included:
– Rent, Rates– Equipment, Fuel– Repairs & Maintenance– Insurance – Utilities and Water
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Participating Units
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WHERE TO FROM HERE?
VICSES submission to 2009 ERC funding round:
Current minimum Subsidy all Units $10,780 $ 5,390 matched
New proposed subsidy:• Small Units 20 $12, 052 $ 6026 matched• Medium Units 98 $23,349 $11,674 matched• Large Units 25 $28,726 $14,363 matched• Total 143 (includes 3 new units)
• Total Subsidy Cost to State Government$1,623,682• Less Existing Subsidy Funding $ 754,600• Total Additional Funding$ 869,082