As we approach the council elections, now is a good time to think about this council’s performance and achievements. We have managed to achieve a remarkable, largely unrecognised turnaround. A good way to illustrate this and respond to the nay-sayers, who are cherry picking the numbers, is with a graph. The graph tracks dollars spent by council per $100 paid by ratepayers. This measurement is a useful way of comparing apples with apples over time. Essentially it shows the quite dramatic shift in the way council spends your money.
Your rates get spent in two ways: operational expenditure (mostly salaries) and capital expenditure (maintenance, renewal and building of community assets). It was immediately clear to me on taking my position on council, that very few dollars had been spent on capital expenditure, over a long time. Streets looked shabby, very few new community assets built, existing assets run down.
Although there appeared to be capital expenditure increases, these were largely only keeping up with inflation, really just holding a very tenuous position, with distribution of funds quite ad hoc; one year a bit of maintenance, the next a minor contribution to a new project. So with rates increasing between 6.5% and 8.5% annually for many years we were still only barely treading water. Arguably this has influenced a steady decline in community confidence and optimism for the future.
In order to address the situation we needed to do some research into what was happening at other similar councils (benchmarking). This revealed how inadequate previous financial management had been. An average, over the previous four years, of only $6.74 in every $100 of your rates was spent on capital where other similar councils were spending around $20. In addition, finances were so grim we couldn’t get significant grants as we had no money to put on the table for matching state and federal money.
The new CEO was charged with addressing the situation of inadequate capital expenditure versus excessive operational expenditure. This couldn’t mean, ‘slashing and burning’ staffing numbers, because that would involve massive payouts and we’d be no better off. The objective was to see the graph grow toward that $20 per $100 of rates.
Every service council delivers is being reviewed; we are over half way through that process now.
Thus far operational savings of $3 to $3.5 million have been achieved and are likely to reach $5 million within a year.
Currently we are spending two and a half times as much on capital compared to the previous council ($16.23 per $100). This represents close to a 10% turnaround inside three years. Conversely operational expenditure (main component salaries) has decreased by the same nearly 10%. It’s important to note that this is a saving which continues year on year, freeing up finances for important community asset building and maintenance.
What does this mean?
We now have a forward capital works financing plan for the first time, which includes developments like a Wonthaggi aquatics and courts complex ($24m), Cowes Civic Complex and foreshore works ($17.5m), Bass Valley Children’s Centre and tourism projects, etc. This has never been possible before.
We can now propose some big community projects to government as financial partners. We can commit to meet fully, our asset maintenance plans and renewal as needed: road and footpath repairs; drains working; painting toilet blocks; re-roofing halls and so on.
Our research shows Bass Coast a low rating council, with low operational costs compared with other similar councils. Even staying within the State Government 2.5% rate cap has barely compromised our forward plans for a positive future.
Contributed by Neil Rankine