New South Wales
City of Canada Bay Council
The City of Canada Bay was faced with the challenge of providing fit for purpose assets over the long term while remaining financially sustainable. To achieve this, Council engaged Morrison Low to work with them to assist them in this journey.
As with all NSW councils, the City of Canada Bay’s annual rate income is pegged and, as such, faces on-going financial pressure from a range of costs increasing above the rate peg, along with changing community demands. The starting point was an independent assessment of Council’s long term financial sustainability. Although Council was in a strong financial position with high cash reserves and low debt levels, it had on-going operating deficits and was only funding around 60% of its long term asset requirements.
Working with Council, Morrison Low was able to provide a sustainability road map which will ultimately shift the operating result back into sustained operating surpluses. The two key elements of the road map were asset management and a horizontal service review.
Firstly, a review of Council's asset management plans (AMPs) was undertaken, with some realignment to Council's community strategy required. With Morrison Low’s improved asset modelling ten year 'Fit for Future' ratios where incorporated in each AMP and integrated with Council’s LTFP, identifying a range of funding issues.
Secondly, a horizontal service review (HSR) was completed. Opportunities for additional revenue and productivity were identified by developing a questionnaire surveying all departments for any opportunities along with their appropriate costs/benefits. Over 150 responses were received and evaluated, alongside Morrison Low's own recommendations and in workshops with senior management. Realistic benefits of $3 million per year were identified through this process.
Incorporating the results of the sustainability road map back into the LTFP Council was in a position to adequately fund their asset management requirements while achieving operating surplus within three years. This ensured Council could maintain service levels without the need for a special rate variation.
City of Canada Bay’s General Manager, Peter Gainsford, said “Morrison Low’s Horizontal Service Review increased the awareness of our financial position across our organisation. The process enabled 20 senior leaders in our organisation to work with their staff and identify savings and revenue opportunities that Council will now implement over the next three years. The Review not only helped Council’s bottom line – it successfully highlighted that all staff have a role in ensuring our long term financial sustainability.”
Council has subsequently endorsed the revised LTFP incorporating the asset and horizontal service review improvements.
For further information please contact Greg Smith on firstname.lastname@example.org.