• Challenges for the Organisation
• Challenges for the City

Current Issues facing BMCC

MODULE 10

Challenges for the Organisation

The Council's Financial Sustainability

While the Council's current financial position is relatively sound, there will be a decline in the financial position over the next 10 years if there is no change in the availability of resources to deliver the Council's services. The Council's financial position is being driven by the following factors:

• Continuing increases in levels of service across the City (as a result of community demand);
• A static rate base and the below estimated rate increase for 2008-09 of 3.2%;
• High costs associated with servicing a stable and aging population, widely dispersed over 27 settlements;
• High costs associated with managing impacts of urban activity on a World Heritage environment including ensuring that the objectives of Local Environment Plans 2005 and 1991 are maintained while responding to proposed local government reforms;
• Inadequate resources available to renew and maintain built assets with a corresponding deterioration in asset value and loss of service potential;
• Increasing price of goods and services such as construction materials, labour, energy and water with these price increases being at a higher level than the Council's ability to raise rates; and
• Cost shifting from other levels of Government to Local Government and a reduction in State and Federal Government funding - we are being asked to do more with less.

The Council's Built Assets

• A key service Blue Mountains City Council provides for the City is the provision, renewal and maintenance of several hundred million dollars worth of built assets (facilities such as community buildings and infrastructure such as roads and footpaths). Like local Councils all over NSW, the Council continues to face significant financial challenges in funding the provision, renewal and maintenance of built assets for use by its community. Many of these assets are important social infrastructure elements or provide assistance in managing environmental impacts of urban communities;
• Given that the Council makes no change in the existing level and means of service delivery, it is forecast that between $7 million to $10 million will be required on average per year over 2008-2012 in order for the Council to renew its assets to satisfactory levels. It is estimated that the Council is currently expending $5 million per year on asset renewal leaving an annual average gap in renewal funding of $2 million to $5 million. In addition to the funding gap for renewal of assets, it is estimated that Council will also be facing a gap in asset maintenance funding of $1.5 million to $1.8 million per year over 2008-2012; and
• The projected asset renewal and maintenance funding gaps identified above need to be continually tested against the following questions:
  • Is Council delivering the range and level of services needed (not just wanted by community) and required by the Local Government Act? In other words who is getting what level of service where, when and why?;
  • How can we ensure equitable distribution of limited resources across the City?;
  • Have we got the right mix and type of built assets to support delivery of services and facilities determined as being needed?;
  • Is it necessary for Council to own all existing built assets/ facilities?; and
  • Are there more innovative and cost effective ways to deliver needed services e.g. through partnerships with other service providers, through new technologies?

The high costs associated with maintaining and renewing aging built infrastructure continue to increase. If this challenge is not addressed the financial sustainability of the Council and the City will increasingly be under threat which could lead to a reduction in service delivery to the community.

Integrated Planning and Reporting

Council has actively responded to the new Integrated Planning and Reporting Reforms for NSW Local Government. These reforms require all council's in NSW to adopt a strong sustainability focus with at least a 10 year strategic business planning framework relative to their Local Government Areas and the activities of the council. The Council is aiming to implement the reforms in 2010- with the first wave of councils doing so.

This will require BMCC to have adopted by March 2010 a:

• Community Strategic Plan (minimum 10 years)
• Resourcing Strategy (minimum 10 years)

And by June 2010 (replacing the Management Plan) a:

• Three year Delivery Program (including 3 year service activities and budgets); and
• A one year Operational Plan

The Reforms require an integrated and longer-term strategic approach to business planning which means the way we capture information from across the Organisation will vary from the previous years.

More information on the Integrated Planning and Reporting Reforms can be found at: www.dlg.nsw.gov.au/dlg/dlghome/dlg_generalindex.asp?sectionid=1&mi=6&ml=9&AreaIndex=IntPlanRept

To see how the Council is responding to these challenges please refer to Management Plan www.bmcc.nsw.gov.au/yourcouncil/integratedplanningforservices/managementplan.