Transcript Recipient Purpose Australian Capital Territory Development of an asset and financial management planning framework Local government asset management and financial management project Local government capacity building project New.

Recipient
Purpose
Australian Capital Territory
Development of an asset and financial management
planning framework
Local government asset management and financial
management project
Local government capacity building project
New South Wales Government
Northern Territory Government and the
Local Government Association of the NT
Queensland Government and Local
Government Association of Qld
South Australian Government and Local
Government Association of SA
Local Government Association of
Tasmania
Southern Tasmanian Councils Authority
Tasmanian Government and Southern
Tasmanian Councils Authority
Victorian Government and the Municipal
Association of Victoria
Western Australian Government
Value (GST
Exclusive)
$437,000
$3,250,000
$1,350,000
Advancing asset management in local government
$2,695,000
Improving SA councils’ asset and financial
management practices
Adelaide integrated design strategy
Long term asset and financial management planning
for all Tasmanian councils
Independent review of structures for local governance
and service delivery in southern Tasmania
Future-proofing Tasmania’s councils: a regional and
land use based approach to climate change adaptation
Local government sustainability project
Local government regional asset management services
project
Integrated strategic planning, financial management
and asset management in local government
$1,650,000
$1,000,000
$870,000
$150,000
$400,000
$964,000
$1,404,000
$2,351,000
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Objectives
◦ maximise the financial sustainability of Victoria’s regional
councils to support continued provision of services to their
communities over the long term by increasing collaboration
between them; and
◦ increase councils’ ability to effectively manage their assets
using more collaborative and efficient delivery models and
improved asset management practices.
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Council visits
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Regional workshops
◦ Support each Council
◦ Develop solutions – tools and templates
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Web site
◦ Collect and disseminate information
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4,900 hours of program delivery
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Asset Management Policy
Asset Management Strategy
Terms of Reference for an Asset Management Steering Committee
Asset Management Roles and Responsibilities Matrix
Asset Management Skills Matrix
Capitalisation and Valuation Policies (Work in progress)
Asset Management Plan Templates
Long Term Financial Plan asset forecasting criteria
Capital Works Evaluation Framework
Asset Categorisation Hierarchy
Asset Handover Process
Levels of Service Framework (Work in progress)
Community Consultation Guidelines (Work in progress)
Region
North East
North West
South West
Gippsland
Central
Overall Average
Average Asset Management Improvement
22.52%
24.32%
17.54%
10.37%
19.80%
19.57%
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Objectives
◦ maximise councils’ financial sustainability to support
continued provision of services to their communities over the
long term; and
◦ increase councils’ ability to effectively manage their current
and future performance using a consistent ‘whole of council’
perspective which brings together their financial and asset
management operations for reporting and management
purposes.
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Strategic Analysis
◦ Council visits
◦ Self Assessment
◦ Assessment Report
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Strategic Review
◦ Financial Analysis - Historical
◦ Strategic Report
◦ Long Term Financial Plan assistance
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If a Council consistently achieves a modest positive operating surplus, and
has soundly based projections showing that it can continue to do so in
future, having regard to asset management and its community’s service
level needs, then it is financially sustainable.
◦ (Underlying Operating Position/Underlying Revenue)
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51 of the 76 Councils (67%) have averaged negative ratios with
respect to their underlying operating position over the last 4 years.
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10 of these Councils averaging below - 10 percent.
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Taking account of their projections a high proportion of Councils’
positions are worsening over the 10 year forecast period.
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Councils are the custodians of over $28.2 billion of infrastructure
and other assets.
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Accounting Standards
◦ define depreciation as ‘the systematic allocation of the
depreciable amount of an asset over its useful life’-(AASB 116).
◦ require that depreciation methods reflect “the pattern in which
the asset’s future economic benefits are expected to be
consumed.”
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For most Councils, depreciation is amongst the largest expenditure
item.
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Average Depreciation Rate
◦ 3 Councils less than 1.5 percent
◦ 11 Councils less than 2 percent
◦ 45 Councils between 2 and 3 percent
◦ 20 Councils greater than 3 percent
◦ 2 Councils above 4.2 percent
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Employee Costs /Total Adjusted Expenditure
◦ Small Rural:
36 percent
◦ Large Rural
37 percent
◦ Regional Cities
40 percent
◦ Inner Metro
45 percent
◦ Outer Metro
40 percent
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Working Capital Ratio (Current Assets/Current Liabilities)
◦ Small Rural
280 percent
◦ Large rural
240 percent
◦ Regional Cities
245 percent
◦ Inner Metro
180 percent
◦ Outer Metro
255 percent
Renewal Investment ($'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
70%
65%
12,000
$' 000
6,000
Renewal Investment
60%
5,000
3,000
6,000
50%
49%
44%
Upgrade Investment
8,000
56%
54%
4,000
10,000
38%
37%
40%
36%
31%
30%
2,000
20%
1,000
10%
Expansion/New Investment
4,000
2,000
2009 2011 2013 2015 2017 2019 2021
2021
65%
14,000
Total Interest Bearing Loans and
Borrowings
2019
7,000
16,000
Current Interest Bearing Liabilities
2017
Roads
Capital Works Statement ($'000)
Borrowings ($'000)
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
-
2011
-
0%
2013
2009
2011
2013
2015
2017
2019
2021
2014 2015 2016 2017 2018 2019 2020 2021
Renewal Investment - Roads
Upgrade Investment - Roads
Expansion/New Investment - Roads
Renewal Expenditure/Renewal Demand - Works in Progress
2022
Underlying Operating Position
1.
a)
b)
In many Councils the underlying operating position is in decline with
growing deficits or minimal change.
Operating deficits are creating the need to defer and under spend on
renewal of infrastructure creating additional renewal backlog
Working Capital
2.
a)
High correlation between Councils with high working capital
levels and low delivery of the annual capital works program
Renewal Funding
1.
a)
b)
c)
The projected renewal demand in the next 15 years, in most of the
Councils in Victoria is increasing.
The renewal gap in most instances, is also increasing due to deferral
of renewal investment.
With the estimated renewal gap at $2.3 billion over the next 15
years and a lowering of Councils capacity to fund in the same period
the sector is heading for real decline in service levels.
Ian Mann
Director
CT Management Group
Mob:
0429 941 435
Email:
[email protected]
CT Management Group
152 Lt Malop Street
PO Box 1374
Geelong 3220
Ph: (03) 5221 2566