The announcement of the 2022/23 rate peg sees further financial pressure on councils, with some 88 councils across NSW receiving a rate peg increase of less than 1% - over two-thirds of councils. This has an immediate impact on councils’ long term financial resource planning, as many councils were estimating increases around 2%. Councils will need to reconsider the budgeting and financial forecast implications for the 2022/23 year and beyond.
Project management experts often say that the majority of project failures are caused by poor planning. This can sound like the words of a Monday-morning quarterback - only wise in hindsight. If projects that fail are those that experience the biggest unforeseen risks, how can you plan for risks you didn’t foresee? How can you improve project planning without a crystal ball?
The new NSW Integrated Planning and Reporting (IP&R) guidelines have introduced some new requirements and mandated features of the next IP&R round. A big change is the requirement to link all adopted strategies and plans to the IP&R framework and make provision to include the implementation of strategies in the delivery program and therefore flow into the resourcing strategy.
It’s that time of the year, where councils are well into preparing their end of financial year reporting and will need to report on the condition of their infrastructure assets in Special Schedule 7 (SS7). Working with NSW councils year on year, we observe inconsistencies with how councils are reporting SS7 between themselves and across financial years. At its core SS7 is an essential document for local government, as not only does it tell you what your asset expenditure and condition is, it also clearly articulates what you should be spending on your assets in any given year.
NSW IPART is expected to hand down its decision on the domestic waste management charge (DWMC) review in September. This will require councils to review their current DWM pricing methodology and understand the long-term impact on both the general rate and the DWMC. Morrison Low is currently working with NSW councils to fully understand these impacts.
The implications of not accurately and consistently assessing asset fair value can have significant adverse effects on the financial position of council. One of the key drivers for financial sustainability is the cost and investment in infrastructure assets. These assets represent a significant component of a council’s equity, and it is critical that the carrying value of these assets reflect the current value.
In discussions with councils, the burning bridge is the challenge of ongoing organisational sustainability in terms of adequate funding to deliver services, assets, management systems and governance requirements.
Councils are heading into another Integrated Planning and Reporting cycle and one of the things that we frequently find, and most councils acknowledge, is the difficulty in integrating the Resourcing Strategy and, as a result, it is often the weak link.
Following an eligible disaster, state and federal funding is available to help councils to restore essential public assets through the Disaster Recovery Funding Arrangements (DRFA).
The fifth round of the Federal Government’s Building Better Regions Fund, which is aimed at projects that create jobs, drive economic growth and build stronger regional communities, opened for applications on 12 January.