Fit for the Future - Regional Workshop Slides

Report
Preparing your council’s
Fit for the Future proposal
Templates and
Self-Assessment Tool
November 2014
Agenda
Fit for the Future overview
Understanding the Criteria
Choosing your Template
Completing the Templates
Key issues and questions
Where have we come from?
The journey so far…
2011
Destination
2036
Councils came
together to plan
how local
government
could meet the
challenges of the
future.
2012
2013
2014
TCorp Sustainability Review
Conducted a comprehensive,
independent analysis into the financial
sustainability of every council in NSW.
Local Government Infrastructure Audit
Provided information in relation to the
infrastructure backlog in NSW and identified
infrastructure needs by area and asset type.
Independent Local Government Review
Conducted wide consultation to develop key
recommendations regarding local government
structures, governance models and boundary
changes.
Local Government Acts Taskforce
Looked at ways to modernise legislation, to ensure
that it would meet the future needs of councils and
communities.
Today
Fit for the
Future –
Local
Government
Will lay the
foundations for a
stronger system
of local
government
and stronger
local
communities.
Where are we going?
Scale and
capacity
Financially
sustainable
Efficient
Effective
services and
infrastructure
Total reform package
Legislative reform
Cutting red tape, streamlining
procurement. A new Local
Government Act from 2016
Fit for the Future
Proposals
Councils review structural options and
develop improvement plans by June
2015
Financial reforms
A new State borrowing facility,
rating review and FAGs
redistribution
State Government
support
Help with preparing proposals,
support for merging councils, seed
funding for Joint Organisations,
Small Councils Innovation Fund
Joint Organisations
New council organisations for
Regional NSW. Pilots begin
February 2015. Roll-out to all
regions by September 2016
What’s on offer for councils?
 $10.5m - $22.5m for Sydney council mergers
 $5m - $13.5m for regional & rural council mergers
 $13m state wide for Transition Committees
 $4 million Small Councils Innovation fund
Progress to date . . .
Program
launch
Regional
workshops
Joint
Organisations
EOI
Facilitators
available
Templates
released
September – October 2014
Rural Council
workshops
JO Pilots
announced,
design begins
Regional visits
Technical
Panel
available
November – December 2014
Far West
forum
What are we asking
councils to do?
Assess scale and
capacity
Prepare a Proposal
Make the transition,
access the benefits
Fit for the Future criteria
Sustainability
1. Operating
Performance Ratio
2. Own Source Revenue
3. Building &
Infrastructure Asset
Renewal Ratio
Service &
Infrastructure
Management
1. Infrastructure Backlog Ratio
2. Asset Maintenance Ratio
3. Debt Service Ratio
.
Scale and Capacity
Use the Independent Panel
recommendations as a starting
point
Efficiency
1. Real Operating Expenditure
per capita
How were the criteria and measures
developed?
TCorp analysis &
recommendations
Accounting Code
Infrastructure audit
FFTF
Criteria
Some TCorp
calculations refined
following input from
LG sector
Input from OLG
and specialist
consultants
Independent Panel
research and
recommendations
Some criteria refined
following review and
recommendations
from IPART
Why were these measures chosen?
Sustainability
Operating Performance
Ratio
Own Source Revenue
Core measure of financial sustainability – indicates council’s capacity to meet
ongoing operating expenditure requirements
Benchmark: TCorp recommended at least break-even over the longer term –
ongoing deficits are unsustainable
Councils with higher own source revenue have greater ability to control their own
operating performance and financial sustainability.
Benchmark: TCorp recommended 60% as the minimum level to ensure councils
have sufficient flexibility to manage external shocks & challenges
Building & Infrastructure
Asset Renewal Ratio
Measures whether council’s assets are deteriorating faster than they are being
renewed – indicator of whether council’s infrastructure backlog is likely to increase.
Benchmark: Ratio of greater than 100% ensures community assets are managed in
a sustainable way.
Why were these measures chosen?
Infrastructure and service management
Measures how effectively councils are managing their infrastructure. Increasing
backlogs may affect council’s ability to provide services and remain sustainable.
Infrastructure Backlog
Ratio
Benchmark: The benchmark of less than 2% ensures infrastructure backlogs are at
manageable levels
Measures whether council is spending enough on maintaining its assets to avoid
increasing its infrastructure backlog.
Asset Maintenance Ratio
Benchmark: A ratio of greater than 100% ensures council’s infrastructure position is
not deteriorating
Indicates whether council is using debt wisely to share the life-long cost of assets
and avoid excessive rate increases.
Debt Service Ratio
Benchmark: It is appropriate that councils should carry some level of debt to ensure
inter-generational equity in funding major infrastructure.
Efficiency
Real Operating Expenditure
per capita
Indicates how well councils are utilising economies of scale and managing service
levels to achieve efficiencies.
Benchmark: Focuses on each council’s individual performance over time, rather
than comparing with others. Decline in real expenditure per capita indicates
improved efficiency (all things being equal).
Becoming Fit for the Future . . .
• Becoming Fit for the Future is a process
• Involves asking where are we now, how can we improve, what will
success look like?
• Some councils will take longer than others to
improve their situation
• Your Fit for the Future Proposal shows how you
will move towards this goal
• Once your Proposal is assessed as Fit for the
Future, you will have access to a range of benefits
The Fit for the Future toolkit
Self-Assessment Tool
Template 1
Council Merger Proposal
Template 2
Council Improvement Proposal
Template 3
Rural Council Proposal
(Existing structure)
(to be released following further development)
Toolkit available at: www.fitforthefuture.nsw.gov.au
Deciding which template to use . . .
Deciding on Scale and Capacity . . .
The Panel’s final report is the starting point for all Fit for the
Future proposals
 The Independent Panel carried out extensive research and consultation
on the subject of scale and capacity – no “one size fits all” approach.
 It is up to each council to decide whether it has sufficient scale and
capacity, based on the Panel’s recommendations and your own
assessment
 If the Panel recommended a merger for your council, this should be the
first option that you consider
 You do not have to adopt the Panel’s exact recommendations, but your
proposal should demonstrate that your council has sufficient scale and
capacity
Completing the template
The Templates all follow the same basic process . . .
Where are we
now?
Does our council have the
appropriate scale and
capacity?
(Use the Panel’s report as a
starting point)
How are we performing
against the other FFTF
Criteria?
(Use the Self-Assessment Tool
to review your performance)
What other challenges do we
face?
(Use your IP&R documents)
How can we
improve our
situation?
Choose the appropriate pathway
(Merger? Rural Council?
Performance Improvement Plan?)
Prepare a plan
Your plan will vary, depending on
the Template chosen
How do we
measure
success?
Model the outcomes
Different levels of modelling
required, depending on the
Template chosen.
How long will it take you to
achieve the benchmarks?
Template 1
Section 1 – The proposed merger
 Identify the agreed merger and any boundary
changes
 Explain how it will provide scale and capacity (if
different from Panel recommendation)
Section 2 – The outcome
 How will the merger help meet priorities and
challenges?
 Identify the costs and benefits
Only
complete if
the merger
is agreed
Section 3 – Community involvement
 How has the community been informed?
 What has the response been?
Section 4 – Achieving the benchmarks
 Estimate the expected improvement in
performance
Template 2
Section 1 – About your proposal


Summarise your proposal
Explain how you meet the scale and capacity criteria
Section 2 – Current position


Provide an overview of your council and community – key
features, challenges, opportunities
Identify your current and forecast performance against the
benchmarks and explain why
Section 3 – Becoming Fit for the Future

Only complete if
your council has
sufficient scale and
capacity and you do
not intend to merge
or become a Rural
Council

Identify strategies and outcomes (including ones not
implemented), and explain assumptions
Prepare an action plan
Section 4 – Expected outcomes

Identify if the strategies and actions will help you meet the
benchmarks by 2019/20
Section 5 – Implementation

Explain how you will put your plan into action
Meeting the benchmarks
 There may be reasons why your council finds it difficult to meet
the benchmarks – the Template provides room to explain your
situation
 You do not have to meet all the benchmarks by 2020 to become
Fit for the Future – but you need to have a plan in place to
continue working towards these goals.
 Some councils may not be able to achieve the own source
revenue targets – but you must show that you are trying to
improve your situation
Help with your proposal
Relationship
Manager
Expert assistance
with mergers
ONE
STOP
SHOP
Technical
support
Facilitators
A single point of contact and assistance
Next steps. . .
Template 3
available
Template 3
workshops
JO Pilots
begin
Expert Panel
appointed
FFTF
proposals due
30 June
January – July 2015
Expert Panel’s
recommendations
Councils begin
implementation
JO Pilots
review
Merger
transitions in
progress
November 2015 – September 2016
JOs rolled out
across
regional NSW
Questions…
Feedback form

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