Municipal Association of Victoria Rate Cap Forum 25th November 2015 Ian Mann CT Management Group 0429 941 435 ianm@ctman.com.au

COUNCIL FINANCES Rates & Charges - $5,203 million Employee Costs - $3,208 million Materials and Services - $2,444 million

17 Councils show future rate increase at less than 3% RATE CAP IMPACT Forecast Max Rate Increase (16/17) (17/18) (18/19) 3.05% 2.85% 2.8% 2015/16 – SRP 17 Councils show future rate increase at less than 3% Remaining Councils retained rate increases on average at ~5% Assumption: Rate increases 5% pa - Rate cap 3.05%, 2.85%, 2.80%, 2.75%.. Impact: Year 4 – 9% reduction Year 10 – 21% reduction PAGE 3 3

Salaries and Wages CONTEXT Employee Cost growth next 4 years (pa) 4.1% Rate Impact of Employment growth (pa) 2.6% 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 Works 0.73% Total Percentage of Rates – Salaries & New Cap Works 3.33%

FINANCIAL SUSTAINABILITY ASSESSMENT Services (??) LTFP 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)

SUSTAINABLE SERVICE DELIVERY 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? PAGE 6 6

SERVICE MANAGEMENT OPTIONS Capacity to deliver services in a revenue constrained environment $ All Services Discretionary Services “like to do” Efficiency Gains Business as Usual Preferred Services “should do” Mandatory Services “must do” Time PAGE 7 7

FINANCIAL PLANNING INFORMATION Services Capital Works (New/Upgrade) 10 yr CW Program Asset Renewal LTFP SRP LTFP 1 5 10 15 YEARS

SERVICE AND FINANCIAL MANAGEMENT FRAMEWORK COUNCIL PLAN Financial Sustainability Service Management Service Strategies Strategic Resource Plan Service Plans Long Term Financial Plan Service Operations Capital Works (New, Upgrade, Expansion) Capital Works Evaluation Capital Works Program Asset Management AMP (Roads) AMP (Drainage) Capital Works (Renewal) AMP (Buildings) Infrastructure Operations & Maintenance AMP (Bridges) AMP (Open Space)

SERVICE PLANNING FIT Financial Sustainability Service Management COUNCIL PLAN Financial Sustainability Service Management Service Strategies Strategic Resource Plan Service Planning Service Plan Reviews Long Term Financial Plan Service Comparative Choice Evaluation Service Summaries Service Operations Capital Works (New, Upgrade, Expansion) Capital Works Evaluation Capital Works Program Asset Management AMP (Roads) AMP (Drainage) Capital Works (Renewal) AMP (Buildings) Infrastructure Operations & Maintenance AMP (Bridges) AMP (Open Space)

SERVICE PLANNING Stage 1 - Current Position Stage 2 - Options 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

SERVICE PROFILE PAGE 12

RELATIVE IMPORTANCE Self Assessment Community Surveys

All Council Services COMPARATIVE CHOICE Parks ICT Road Maintenance High Relative Importance Low Stage 1 – Summary Service Profile for each Service (Tactical Level) Parks Parks ICT ICT Road Maintenance Road Maintenance Youth Services Youth Services Environmental Health Environmental Health Regulatory Services Regulatory Services Children’s Services Children’s Services Aerodrome Management Aerodrome Management Aged Services Aged Services Statutory Planning Statutory Planning Other Services Other Services Later Stage - Detailed Service Plan for each Service (Operational Level) -Efficiency All Council Services PAGE 14 14

FINANCIAL FORECASTS

FINANCIAL FORECASTS

CAPITAL / ASSETS

LONG TERM FINANCIAL PLAN Can Council sustain its current range of services at the current level of service? PAGE 18

STANDARD REPORTING

PROCESS Service Profiles Integrated Solution Community Input Service Profiles “Profile” of each Service (Contextual Information) Understand Current Position Investigate Options (Co-design) Decide on a course of Action Assessment of each Service (Relative Importance) Integrated Solution LTFP (10yr) Services ($ Forecasts) Service provided (Co-produce options) Capital Works Program New, upgrade expansion ($ Forecasts) Asset Renewal ($ Forecasts) Understand what you do, what it costs and the benefits to the community

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

End Ian Mann CT Management Group 0429 941 435 ianm@ctman.com.au