Present on a Standard Format for Financial Sustainability that is defined as below.
a. Meet Sustainability Benchmarks – Council will aim to exceed the financial sustainability indicators provided by the Office of Local Government.
b. Intergenerational Equity – The financial effects of Council decisions should not be borne entirely by present-day ratepayers, but be contributed to by future ratepayers who will also benefit.
c. Borrowings – Are only utilised for assets that have an asset life exceeding 20 years or projects that can generate a payback to Council within 5 years.
d. Renewal – Council renewal is based on Council’s intervention point which is condition 3. Council renewal will be planned on the basis of overall condition, asset characteristics and service criticality.
e. Fully Funded Depreciation (renewal ratio)– Council will include in its annual budget sufficient funds to cover the full costs of depreciation for all of its assets.
f. Fully Funded Operating Position – Council must collect enough revenue to fund operational expenditure, the repayment of debt, and depreciation.
g. Fully Funded Capital Works Program – The source of capital works is identified and secured for both capital renewal (general fund), upgrades (general or restricted funds) and new capital work (general or restricted funds)
Points
The implications for Asset Management how Council should prioritise the recurring budget.
Introduce the Service planning example I have worked on to re-prioritise budgeting that looks at Service Importance and Service Satisfaction that shows that asset maintenance will fall in the Highly Satisfied and Highly Important service category.
Discuss the Challenges around Upgrades and the ability to over-invest in Council asset upgrades.
Impacts the Condition Based Priority
Borrowing between asset classes for renewals from across asset classes but balancing this over the 10 year plan
Sustainable Funding Model.