Presentation Objective
To provide information on the STEP Finance
Program so that what has been learnt can be
applied to increase Community Buy-in to
Council Plans
STEP Finance Program Consultant
Peter Smith
STEP Finance Program Consultant
Peter Smith
STEP Finance Program Consultant
Peter Smith
STEP Finance Program Consultant
Peter Smith
STEP Finance Program Key Themes
Main thrust of the STEP Finance visit:
 Council Plan objectives being funded in the LTFP (Council
Plan not full of wish lists)
 To promote the linkage between asset renewal funding
requirements (ensuring they are recognised in the LTFP)
 Council makes sound decisions for long term sustainability
 Council understands the long term cost implications of
The services it delivers – service planning
The assets it manages – Capital investment plus “Whole of Life” costs
 Council is sustainable into the long term – the LTFP has
integrity, includes all appropriate assumptions and shows a
sustainable future
STEP Finance Program Consultant – Peter Smith
STEP Finance Program
Interim Summary of Results from this Program so far are;
 There are still “gaps” in the data being presented by
councils to their community during the annual budget
preparation process.
 Budget information is moving slowly towards clearer
details on service levels so that the community can
judge whether it is receiving value for money
 The community is getting closer to a position whether it can
judge whether Budget decisions are made in the context of
informed improvement plans for a more sustainable future
STEP Finance Program Consultant – Peter Smith
STEP Finance Program
Interim Overall Score Summaries from this Program are as
follows (24 No.):
STEP Finance Program Consultant – Peter Smith
STEP Finance Program
Interim Individual Score Summaries from this Program are
as follows (24 No.):
Question 1.1. Council has adopted financial
sustainability, as one of its key strategies in its Council
Plan.
Rationale. Council has discussed the issues around
sustainability, developed and adopted a policy. This
policy has also been presented to the community or
consultation was completed as part of its development.
Highest: 85
Lowest: 30
Average: 76
STEP Finance Program Consultant – Peter Smith
STEP Finance Program
Interim Individual Score Summaries from this Program are
as follows (24 No.):
Question 3.3. When proposing new assets in the capital
works program the operating costs over the assets life
(maintenance and operations ) are accounted for in
Council's capital evaluation process
Highest: 85
Lowest: 30
Average: 67
STEP Finance Program Consultant – Peter Smith
STEP Finance Program
Interim Individual Score Summaries from this Program are
as follows (24 No.):
Question 5.1. Council has prepared its annual budget
based on the requirements of its long term financial
plan supported by its Service Plans and Asset
Management Plans.
Highest: 85
Lowest: 30
Average: 70
STEP Finance Program Consultant – Peter Smith
STEP Finance Program
Interim Individual Score Summaries from this Program are
as follows (24 No.):
Question 6.1. Council has adopted a 10 year Long Term
Financial Plan, including a 10 year capital works
program with renewal demand meeting renewal
investment within the planning timeframe.
Highest: 85
Lowest: 30
Average: 67
STEP Finance Program Consultant – Peter Smith
STEP Finance Program
Interim Individual Score Summaries from this Program are
as follows (24 No.):
Question 6.3. Council has determined its "critical
renewal" level of service and has funded this over the
next 10 years in its long term financial plan.
Highest: 85
Lowest: 30
Average: 71
STEP Finance Program Consultant – Peter Smith
STEP Finance Program
Interim Individual Score Summaries from this Program are
as follows (24 No.):
Question 7.3. Council has undertaken an
assessment/review of the range of services provided
and funding mechanisms to determine the level of
service provided.
Highest: 85
Lowest: 30
Average: 55
STEP Finance Program Consultant – Peter Smith
STEP Finance Program
Interim Individual Score Summaries from this Program are
as follows (24 No.):
STEP Finance Program Consultant – Peter Smith
Towards Increasing Community Buy In
What is needed for the community to want to “Buy
in” more to what the Council is doing?
Councils need to take more of a lead role to get the
community on the same page, or as near to it as
possible
What options are plausible?
STEP Finance Program Consultant – Peter Smith
Towards Increasing Community Buy In
Financial Frameworks and models for
Good Governance
STEP Finance Program Consultant – Peter Smith
Integrated Service Planning Framework
VISION
What are the community outcomes
Council wants to achieve?
What services are required to
meet the vision?
SERVICES
ASSETS
What assets are required to
support the services?
MANAGEMENT
What is the management regime
for assets and services?
STEP Finance Program Consultant – Peter Smith
Integrated Service Planning Framework
STEP Finance Program Consultant – Peter Smith
Role of the LTFP
Renewal Investment ($'000)
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
-
Renewal Investment
Flexed Renewal demand
2009
2013
2015
2017
2019
2021
Capital Works Statement ($'000)
Borrowings ($'000)
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
-
2011
16,000
14,000
Current Interest Bearing Liabilities
Total Interest Bearing Loans and
Borrowings
Renewal Investment
12,000
10,000
Upgrade Investment
8,000
6,000
Expansion/New Investment
4,000
2,000
2009 2011 2013 2015 2017 2019 2021
2009
2011
2013
2015
2017
2019
2021
STEP Finance Program Consultant – Peter Smith
Role of the LTFP
STEP Finance Program Consultant – Peter Smith
Conclusion and the Role of the SRP
The SRP should not be viewed as simply a tool to help Council comply with the four
year projections for the standard financial statements as per Section 126 of the Local
Government Act (1989).
As the custodians of more than $50 billion in assets, many having long lives, Victorian
councils have an obligation to make hard decisions that will safeguard our future
prosperity and provide a range of services that are acceptable to the community, as
well as affordable.
A service planning framework with an SRP informed by a robust LTFP that captures
accurately the cost impacts of service options will move the mindset toward a path of
reconciliation between short terms wants and long term needs.
The SRP establishes the strategic financial direction for Council to meet the funding
and investment challenges that lie ahead in the next 10-years. The SRP is prepared in
conjunction with the Council Plan to ensure the affordability of activities included in
the Council Plan
STEP Finance Program Consultant – Peter Smith
Conclusion and the Role of the SRP
The next step is to present the data in a manner that the users of the service can
understand, such as an Executive Summary of the SRP, and seek more information if
they so wish. An example here is the service plan template, a description of the
service, responsibilities for the service, links to Council strategy, levels of service,
current programs, activities and initiatives and the nett cost to ratepayers (now and
evolving over time).
There will always be many competing interests for scarce Council resources but the
full disclosure of the ongoing costs and benefits of services and their role in the
strategic aims of the council will ensure transparent decision-making for good
governance. The process will ensure accountability at all levels of the decision making
process and minimise waste in the form of non performing assets or services.
The process will enable the community to make a judgement call on whether it is
satisfied that decisions are being made with everyones best interests at heart.
Accusations that a council is making decisions for the short term gain of a special
interest group will be less plausible.
STEP Finance Program Consultant – Peter Smith
Conclusion and the Role of the SRP
Adopting this approach throughout the organisation will address many of the service
delivery priorities and in turn community perceptions of Council performance. This
will help move the Council to provide service outcomes, not just service outputs and
lead to community engagement or “buy in”, not just community consultation that
meets minimum statutory requirements.
STEP Finance Program Consultant – Peter Smith
Questions?
STEP Finance Program Consultant – Peter Smith
Membership Nos. 70,131
Family Membership $658
Ratepayers
44,852
Average Rate
$1,680
Renewal/Refurbishment: Restores, rehabilitates, replaces
existing asset to its original capacity, e. g. gravel resheets
Upgrade/Improvements: Enhances existing asset to provide higher
levels of service, e. g. widen seal
New: Creation of an new asset to meet additional service level
requirements, e. g. new building
Renewal/Refurbishment: Rehabilitates existing player to his
original capacity, e. g. shoulder surgery in the off season
Upgrade/Improvements: Enhances existing key position player to
provide higher levels of service, e. g. trading a player in for a
better performer from another club
New: Acquire a new player to meet additional service level
requirements such as longer life, e. g. No. 7 draft pick