1. Future of Local Government Summit Local Government Sustainability

2. 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

3. Council Capacity Continuum
Where does your Council sit now?
Where will it be in 10 years time?
Financially Secure
Wants
Regional Aquatic Centres, Community Centres, Performing Arts Centres
Financially Capable
Intermediate Needs
Infant Welfare Services, Home Help, Preschool, Parks & Gardens
Financially Challenged
Basic Needs
Roads, Garbage, Health Services

4. 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

5. Challenges – Local Environment
Two Speed Local Government Sector
Rural
Population decline (22/47 Councils recorded negative pop growth )
Low median household income (35/47 Councils median less than $700/wk)
81% of the Communities registered an increase in disadvantage between (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 )
Higher median household income (4/32 Councils median less than $700/wk)
66% of the Communities registered an increase in disadvantage between (as measured by the socio-economic disadvantage index)
Average age of population more stable
Increase in population
Growth in properties

6. Local Environment - Rural

7. 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

8. 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

9. 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

10. Council Finances

11. Employee Costs
Annual Increase 5.0~5.5%

12. Materials & Services
Annual Increase 3.9~4.5%

13. Operating Expenses Annual Increase ~4.4%
Reduction managed by lowering service standards each year

14. Capital Investment

15. Total Income
Annual Increase 4.4~4.6%

16. Rates & Charges
Inflation Rate (CPI) – 2.5~2.9%

17. 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)

18. 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

19. Underlying Operating Position

20. 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

21. Council Finances

22. Service Driven View Customers/Residents/Community Council Services
External Focused Services
Asset Support Services
Internal Services

23. Service Delivery 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)

24. 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

25. 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

26. Summary Management & Financial Systems of the future must be:
Customer focused
Responsive
Adaptive
Robust
Flexible
Integrity

27. End Presenter Ian Mann CT Management Group ianm@ctman.com.au