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Fit for the Future

Fit for the Future is the NSW Government's plan to revitalise and strengthen local government.

The program provides councils with benchmarks to measure and improve their performance and give communities the assurance that their councils' finances are being well managed.

The NSW Government has appointed the Independent Pricing and Regulatory Tribunal (IPART) to assess councils' proposals and make recommendations to the government.

Councils that are assessed as Fit for the Future will have access to a range of benefits including access to a streamlined rate variation process and a NSW Government borrowing facility, priority for other government funding and grants, and eligibility for additional devolved planning powers.

Fit for the Future will also introduce new joint organisations for councils. When these groups are established, Eurobodalla Shire Council will actively partner in this, with the aim of identifying savings and improving efficiencies through shared services.

Latest news

October 2015

IPART released its findings on 20 October 2015.

The tribunal assessed Eurobodalla Shire Council as being a stand-alone council that is 'fit for the future'.

To be fit, a council must have demonstrated in their proposal that they have sufficient scale and capacity and are financially sustainable.

IPART assessed 139 proposals from 144 NSW councils. Just 52 proposals (37%) were assessed as being fit.

June 2015

At its Ordinary Meeting on 23 June 2015, Council agreed that Eurobodalla's draft Council Improvement Proposal be submitted to IPART.

We submitted our Council Improvement Proposal to IPART on 30 June 2015.

Background

Fit for the Future has been developed from the three year independent review of local government that assessed the structure and performance of 152 local government areas in NSW to determine their ability to be financially sustainable now and into the future.

Of the 152 councils assessed in the independent review, Eurobodalla was one of the 38 regional councils identified as having the scale and capacity to progress towards being financially sustainable in the future as a standalone council. Our neighbouring councils, Bega and Shoalhaven, are also in the group recommended to continue as standalone councils.

You can read more about Fit for the Future here:

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What does this mean for our council?

Each council has been asked to look at its current situation and consider the future needs of its community as well as the recommendations of the Independent Local Government Review Panel. We submitted our Council Improvement Proposal, which shows how we plan to be Fit for the Future, on 30 June 2015.

Eurobodalla Shire Council has been assessed as 'fit', having sufficient scale and capacity to operate as a stand alone council, without the need for amalgamation or boundary adjustments.

Based on the panel's recommendation and our own assessment, Council determined not to pursue amalgamation or boundary adjustments with neighbouring councils, which is the position that our neighbouring councils Bega and Shoalhaven have also taken.

In many areas, Eurobodalla's Fit for the Future Improvement Proposal does not identify a significant change in direction for our community, because many of the strategies Council already has in place are on track with the NSW Government's recommendations for how councils can deliver the services and infrastructure their communities need, in a financially sustainable way.

Fit for the Future assessment and benchmarks

The Independent Pricing and Regulatory Tribunal has assessed NSW councils against these seven benchmarks that are designed to show how councils are working towards long term financial sustainability.

    Scale and capacity

    A council must demonstrate that it has strong organisational and regional capacity to mobilise resources to engage effectively across community, industry and government.

    Financial sustainability

    A council must generate sufficient funds over the long term to provide the agreed level and scope of services and infrastructure for communities, as identified through the Integrated Planning and Reporting (IPR) process.

    Benchmarks used to measure financial sustainability are:

  1. Operating ratio: indicates capacity to meet ongoing operating expenditure requirements.
  2. Own source operating revenue ratio: councils with higher own source revenue have greater ability to control their own operating performance and financial sustainability.
  3. Infrastructure renewal ratio: measures whether a council's assets are deteriorating faster than they are being renewed and indicates whether a council's infrastructure backlog is likely to increase.
  4. Infrastructure and service management

    Councils must maximise the return on resources and minimise unnecessary burden on the community and business. Councils must also work strategically to leverage economies of scale and meet the needs of communities as identified in the IPR process.

    Benchmarks used to measure infrastructure and service management are:

  5. Infrastructure backlog ratio: measures how effectively a council is managing its infrastructure. Increasing backlogs can affect a council's ability to provide services and remain sustainable.
  6. Asset maintenance ratio: measures whether a council is spending enough on maintaining its assets to avoid increasing its infrastructure backlog.
  7. Debt service ratio: indicates whether a council is using debt wisely to share the lifelong cost of assets and avoid excessive rate increases.
  8. Efficiency

    A council must provide efficient service and infrastructure delivery, achieving value for money for current and future ratepayers.

    The benchmark used to measure efficiency is:

  9. Real operating expenditure per capita: indicates how well a council is utilising economies of scale and managing service levels to achieve efficiencies.

Eurobodalla Shire Council's Improvement Proposal

Council's Fit for the Future Improvement Proposal explains how we will maintain and improve Council's performance against all seven Fit for the Future benchmarks.

The proposal shows:

  • that we will meet five of the seven benchmarks required in 2016-17
  • how we will realise efficiency savings and productivity improvements
  • how we will redirect funds to address the Building and Infrastructure Asset Renewal and Infrastructure Backlog Ratios to improve performance within five years
  • meet all seven benchmarks within 10 years.

Fit for the Future is an opportunity to review our operations and how we consult and engage with our community to plan for our future. Collaboration will be key to ensuring community infrastructure and services are financially sustainable and meet the stated needs of our community, now and into the future.

How our community will benefit from what we deliver in a financially responsible way has been considered in every step of our Fit for the Future proposal, which builds on the work that has already been completed in recent years.

Eurobodalla in a robust position to meet all the benchmarks without significant cuts to service and infrastructure and our proposal makes sure that we retain scale and capacity, strengthen sustainability and deliver value for our community, while meeting or exceeding the Fit for the Future benchmarks.

In implementing our Improvement Action Plan, Council will:

  • support economic growth and development through a new Integrated Economic Growth and Development Strategy
  • collaborate with our community to review services as part of the Integrated Planning and Reporting process
  • implement a prioritised renewals funding strategy to improve performance against the Building and Infrastructure Asset Renewal and Infrastructure Backlog ratios
  • redirect surplus funds into a new restricted infrastructure renewals fund and an increased, targeted renewals program
  • strengthen and diversify Council's revenue streams to continue to meet the Own Source Revenue Ratio and achieve modest operating surpluses to be redirected into infrastructure renewal
  • further increase our capacity and focus on long term planning and organisational sustainability
  • invest in improved community relationships through the development of a robust community engagement framework
  • advocate for improved funding and financing arrangements, to meet community service and infrastructure needs.

We submitted our Council Improvement Proposal to IPART on 30 June 2015. IPART announced that it had assessed Eurobodalla as 'fit for the future' on 20 October 2015.

Benchmark forecast

The table below shows the benchmarks that we meet now and when we expect to meet and show improvements toward benchmarks in the future. It compares our starting position in 2013-14 with our forecasts up to 2024-25. Fore more information about these figures, please download and read our Council Improvement Proposal.

Ratio Benchmark 2013-14 result 2016-17 2017-18 2019-20 2024-25 Meet benchmark
Operating performance ratio Greater than or equal to break-even (0.00) average over 3 years -0.0004 -0.02 0.01 0.02 0.02 2017-18
Own source revenue ratio Greater than 60% average over 3 years 69.49% 69.51% 70.87% 74.99% 79.59% now
Building and infrastructure asset renewal ratio Greater than 100% average over 3 years 62.40% 108.50% 121.03% 93.55% 100.25% 2016-17
Infrastructure backlog ratio Less than 2% 14.62% 13.15% 12.26% 9.82% 1.94% 2024-25
Asset maintenance ratio Greater than 100% average over 3 years 68.58% 100% 100% 100% 100% 2016-17
Debt service ratio Greater than 0% and less than or equal to 20% average over 3 years 8.21% 8.14% 8.93% 10.15% 9.81% now
Real operating expenditure per capita Decrease over time 1.41 1.37 1.36 1.36 1.33 now

What has Council done so far?

Eurobodalla's Council Improvement Proposal builds on actions that we have already taken to improve our financial position in an environment where revenue is reducing, costs are rising, demand for services is increasing and there is an infrastructure backlog.

Some of the steps that have supported and are detailed in our proposal include:

Service reviews

Council is currently undertaking a number of service reviews to ensure that our services are efficient, effective, meet community needs, support the strategic direction of the organisation and avoid duplicating services from other service providers.

The reviews consider the resources required to deliver each service, statutory obligations, opportunities to improve our efficiency and alternate methods of delivering the service.

Internal audit program

We are facilitating an internal audit program to monitor ongoing efficiencies. Council's Audit Committee is independently chaired and includes qualified and experienced community members.

Special rate variation

Council's application for a rate variation of 6.5% including the rate peg amount, for three years, was approved by IPART in May 2015.

Council adopted the rate variation at the 23 June 2015 Council Meeting.

The rate variation will improve Council's financial situation, but we will continue to look for and implement cost savings and efficiencies, and work with the community to develop more ways that we can be financially sustainable.

Community engagement on Fit for the Future

Our proposal builds on the conversations Council has already had with the community, the special rate variation, and further feedback from this year's exhibition of the draft Delivery Program 2013-17 and the draft Operational Plan 2015-16.

Community engagement so far

In Eurobodalla we started our community conversation about how to meet the needs and expectations of our residents in 2010 and developed our first Community Strategic Plan.

Our community let us know the services and infrastructure it expects Council to deliver by participating in surveys, focus groups, a community summit, and by making submissions about the Community Strategic Plan when it was on public exhibition, before it was adopted.

The Community Strategic Plan was reviewed with the community in 2012. Since then we have continued to ask for feedback through the annual exhibition of our plans and budgets, hosting public information sessions, and with regular opportunities to give your feedback on our strategies, proposals and policies, including:

This table provides a summary of the community engagement activities that helped us to prepare our Fit for the Future proposal:

TimingCommunity engagement methodReach
September 2010State of the Shire report public exhibitionShire wide
October 2010 to November 2011Community strategic plan engagementTotal: over 3,000 residents and ratepayers
Community visioning survey517 participants
Focus groups98 participants
Community summit99 participants
Community survey1,401 responses
November 2011 to January 2012Resourcing Options Paper and Delivery Program Information Paper
Long Term Resource Planning Community Survey733 participants
Focus Groups17 participants
March 2012Council Performance and Planning for the Future focus groups3 focus groups with 33 participants
May 2012 to June 2012Delivery Program 2012-16 and Operational Plan 2012-13 public exhibitionShire wide
July 2012Community satisfaction and service delivery survey400 participants
September 2012Community satisfaction and service delivery focus groups4 focus groups with 25 participants
February 2013 to April 2013Community Strategic Plan Review and Levels of Service discussion paper public exhibitionShire wide
Community satisfaction survey400 participants
Resourcing Strategy Levels of Service focus groups4 focus groups with 28 participants
May 2013 to June 2013Delivery Program 2013-17 and Operational Plan 2013-14 public exhibitionShire wide
May 2014 to June 2014Delivery Program 2013-17 and Operational Plan 2014-15 public exhibitionShire wide
September 2014 to November 2014: Funding our Future phase 1, inform and involveMail out21,700 rate payers
Community survey602 participants
Public information sessions<100 participants
Telephone hotline<70 contacts
Dedicated website1,180 visits
December 2014 to January 2015: Funding out Future phase 2, inform and consultRevised Delivery Program 2013-17 including Special Rate Variation public exhibitionShire wide
Mail out21,700 ratepayers
Telephone hotline<30 contacts
May 2015: Revised Delivery Program 2013-17, draft Operational Plan and Budget 2015-16 and Fit for the Future Improvement Proposal

Revised Delivery Program 2013-17 and draft Operational Plan and Budget public exhibition

Shire wide
Community information sessions3 sessions

Future community engagement

Our proposal to become Fit for the Future in the next ten years will involve ongoing conversations with our community as we work together to find the best way to continue to build a financially sustainable future for Eurobodalla.

The four yearly review of the Community Strategic Plan is due to start later in 2015, and this will start the next phase of community conversations.

What happens next?

Following IPART's assessment that Eurobodalla is 'fit for the future,' we will implement the Action Plan in our proposal, which includes actions that we will take over the next two years and in the future so we can:

  • satisfy the Fit for the Future requirements
  • continue to improve our efficiency and financial sustainability
  • continue providing services and facilities that meet the needs of our community.

The actions are included in our Delivery Program 2013-17 and Operational Plan and Budget 2015-16 and responsible officers have been identified to ensure accountable delivery for each item.

We will provide six-monthly progress reports on the action plan items, and will include the progress in the Annual Report.

Council's Audit Committee will monitor the financial outcomes and progress towards achieving the Fit for the Future benchmarks.

Who can I talk to in Council about Fit for the Future?

If you have any questions or would like to talk to us about our Fit for the Future proposal, please contact Anthony O'Reilly, Director Finance and Business Development: