© CT Management Group Pty Ltd 2015 Municipal Association of Victoria Rate Cap Forum 25 th November 2015 Ian Mann CT Management Group

© CT Management Group Pty Ltd 2015 COUNCIL FINANCES Rates & Charges - $5,203 million Employee Costs - $3,208 million Materials and Services - $2,444 million

© CT Management Group Pty Ltd 2015 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%

© CT Management Group Pty Ltd 2015 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$1,088,874 New, Upgrade, Expansion$1,268,032 Total Capital Works$2,356,906 Additional Expense - New CW – Depreciation (1.8%)$22,824 Additional Expense - New CW – Operations and Maintenance (1.2%)$15,216 Total Additional Expenses$38,040 Impact on Rates – New Cap Works0.73% Total Percentage of Rates – Salaries & New Cap Works3.33%

© CT Management Group Pty Ltd 2015 FINANCIAL SUSTAINABILITY ASSESSMENT LTFP Services (??) Assets (AM Plans Renewal Programs CW Programs) Management Approaches Revenue Management (seek additional income) Expenditure Management (drive efficiencies) Service Management (service delivery options) Asset Management (renewal, new, upgrade)

© CT Management Group Pty Ltd 2015 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?

© CT Management Group Pty Ltd 2015 PAGE 7 Time $ All Services 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

© CT Management Group Pty Ltd 2015 SRP LTFP Asset Renewal Capital Works (New/Upgrade) Services YEARS FINANCIAL PLANNING INFORMATION LTFP 10 yr CW Program

© CT Management Group Pty Ltd 2015 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 Operations Asset Management Financial Sustainability Capital Works (New, Upgrade, Expansion) Capital Works Evaluation

© CT Management Group Pty Ltd 2015 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 Operations Asset Management Financial Sustainability Capital Works (New, Upgrade, Expansion) Capital Works Program Infrastructure Operations & Maintenance Capital Works Evaluation

© CT Management Group Pty Ltd 2015 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 Service Stage 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

© CT Management Group Pty Ltd 2015 SERVICE PROFILE PAGE 12

© CT Management Group Pty Ltd 2015 RELATIVE IMPORTANCE Self Assessment Community Surveys

© CT Management Group Pty Ltd 2015 PAGE 14 Parks ICT Road Maintenance Youth Services Environmental Health Regulatory Services Children’s Services Aerodrome Management Aged Services Statutory Planning Parks ICT Road Maintenan ce Youth Services Environme ntal Health Regulatory Services Children’s Services Aerodrome Manageme nt Aged Services Statutory Planning Stage 1 – Summary Service Profile for each Service (Tactical Level) Other Services High Low Relative Importance COMPARATIVE CHOICE Later Stage - Detailed Service Plan for each Service (Operational Level) -Efficiency

© CT Management Group Pty Ltd 2015 FINANCIAL FORECASTS

© CT Management Group Pty Ltd 2015 FINANCIAL FORECASTS

© CT Management Group Pty Ltd 2015 CAPITAL / ASSETS

© CT Management Group Pty Ltd 2015 LONG TERM FINANCIAL PLAN C an Council sustain its current range of services at the current level of service? PAGE 18

© CT Management Group Pty Ltd 2015 STANDARD REPORTING

© CT Management Group Pty Ltd 2015 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 Program New, 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)

© CT Management Group Pty Ltd 2015 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

© CT Management Group Pty Ltd 2015 End Ian Mann CT Management Group