1. Rate capping: implications for local government (strategic asset management)
Keith Baillie, CEO, Surf Coast Shire Council
8 June 2016

2. Fair Go Rates System Objectives
To promote the long-term interests of ratepayers and the community in relation to sustainable outcomes in the delivery of services and critical infrastructure.
To ensure that a council has the financial capacity to perform its duties and functions and exercise its powers.
Nearly all Councils’ asset management policy and strategies will include terms like:
long-term
Sustainable outcomes
Service delivery
Infrastructure
Financial capacity
But they are framed around the affordability to Councils in the first instance and ratepayers in the second instance (or not at all?)
The Fair Go Rates System bring the affordability to ratepayers to the forefront of Council’s attention
Sounds quite like the objectives of a strategic approach to asset management

3. Year 1 Outcome 79 councils prepared first budget under FGRS:
70 Councils did not apply for a variation (a strong response)
9 sought a variation:
3 not approved
6 were approved (full, qualified or in part)
Year 1 – not saying it was all easy but we did okay
Future years might be harder - but councils and communities together have a lot of control over their future

4. ESC Assessment - Guidance

5. Clear reliance on asset and financial planning
ESC Assessment - Application
Clear reliance on asset and financial planning

6. Other Outcomes Implications largely not yet visible – within 3 years?
However has brought on important discussions:
With communities:
Better awareness of affordability issues
Within local government:
Kick started next wave of reform
With other government:
Working through some long standing issues

7. Benefits for Asset Management
Is there possibly an upside to this …
Prudent Councils will invest in SAM
Help address the “too many assets”
Asset Management skills in demand
Promotes open discussions
Provides “burning platform” required for action

8. But we have come so far to risk it now ….
Risks to Asset Management
But we have come so far to risk it now ….
Renewal sacrificed for New/Upgrade
Short term or political decisions
Reliance on debt to fund renewal
Lower maintenance impact on asset life
Resources for strategic work may be cut back

9. Relationship well understood and always been essential
Integrated Planning
Fundamental to reform and any rate cap variations
Direct conversations with community about choices
Service Planning must factor in asset requirements
Service-check prior to approving any infrastructure
Be careful about Master Plans setting expectations
Service
Assets
Relationship well understood and always been essential

10. Essential to integrate Long Term Financial Plan
Integrated Planning (cont.)
Include explicit funding strategies and allocations
Factor in whole of life cost for new proposals
ESC want Councils to consider debt utilisation
Asset rationalising and funds re-use will be important
Link between supplementary rates & growth infrastructure
Service
Finances
Assets
Essential to integrate Long Term Financial Plan

11. Progressive and constructive reputation is essential
Working in Partnerships
Progressive and constructive reputation is essential

12. Digital Transformation
MAV has established Local Government Digital Transformation Task Force:
First multi-stakeholder group in Australia
Seeking business transformation enabled through digital means
Not about websites or transactions, it’s about reinventing Councils around needs of citizens
How might Digital Transformation assist efficiencies, engagement and planning?

13. Our Future Its here - we know the rules We need to apply our trade:
Strategic Asset Management is more important than ever
We have great SAM credentials
Talk to our community
Build partnerships
Drive innovation and reform