Council's action plan for funding

 
The news that the Federal government plans to freeze indexation to the Federal Assistance Grants (FAGs) program was unwelcome news at Greater Taree City Council.
 
It is proposed that Government will achieve savings of $925.2 million over four years by freezing FAGs indexation for three years commencing 1 July 2014. In the preparation of its 2014-15 budget and long-term financial plan, Council was conservative in estimating the FAGs indexation component, capping it 2%.
 
As many budgeted for an indexation much higher, this places Council in a better position than most in terms of realising the gap. However, it still represents a direct impact over the three-year period of $450,000 at a minimum. If indexation is reintroduced in 2017-18, the lost income opportunity in those three years creates a gap that will compound year after year. 
 
“It is disappointing for staff who have been working hard since the 2009 restructure to reduce the deficit and improve efficiencies in the operations of Council,” said Gerard José, General Manager.  “The flow-on effect of this will likely be in service levels.  Councillors will have some difficult decisions ahead of them in the current term and into the next. “
 
On receiving the news, Mayor Paul Hogan wrote to the local Member for Lyne, Dr David Gillespie, imploring him to advocate on behalf of “our shared constituents, because it is the communities of the Manning that will suffer in the end.”
 
Mayor Hogan is confident that the positive rapport and shared concern that he and Dr Gillespie have for the area will prevail. “Dr Gillespie knows me well, he knows that when he goes in to battle for this community, I’ll be right there behind him,” said the Mayor.
 
Senior staff met firstly with the Financial and Investment Advisory Committee of Council last week and then the Councillors in full on Wednesday to discuss strategy.
 
“We don’t want to be reactive in addressing this issue year-in, year-out, always searching for savings to match the gap,” said Laura Black, Executive Leader Corporate Support. “Our intention is to be strategic, to have a game plan and to stick to it.”
 
“We have spent considerable effort reducing our deficit and this places us in a better operational position with a greater focus on our infrastructure, than we were four years ago,” continued Ms Black.  “The hard work and big decisions are not over and we are still faced with the significance of our infrastructure backlog. We acknowledge that it’s impossible for us, or any local government authority to overcome this backlog, but we don’t want to add to it unnecessarily and we don’t want to add this latest funding blow to our deficit either.”
 
It is proposed that over the next 12 months significant work be undertaken to ensure mitigation and no reduction in Council’s focus on infrastructure. A 12-month action plan for 2014-15 is currently being prepared that includes investigating a special rate variation (SRV) focussed on infrastructure maintenance and capital construction. 
 
The action plan also features a service review that determines by business case a service profile that is sustainable. Progressing Council’s process improvement plan to identify any procedural efficiencies that relate to financial gain, and examining opportunities for improvement and efficiencies in our income streams, are also included.
 
The main goal of the action plan is to fill the financial cap created by the indexation freeze. “Strategy over reactivity is supported 100 per cent by our Councillors,” said Ms Black. “If we are to go to the community requesting support for an infrastructure SRV or changed service profiles and we are asking our elected members to make difficult decisions about these things, those decisions need to be informed.”

For more information visit Greater Taree City Council