Federation Council’s Financial Sustainability Journey

Council embarked on its current and ongoing financial sustainability journey over three years ago when CT Management were engaged in mid-2019, to lead in the development of Federation Council's first new Long Term Financial Plan (LTFP).   The first version of this plan was adopted in 2020/21 and has been updated each year with a draft exhibited, and also updated at other stages as required through each year, for example to reflect new major grant income being received, including for new or updated projects.   

Prior to this, the LTFP was a combination of the two former Councils (Corowa and Urana’s) LTFP’s, since being formed in May 2016, as required in order to deliver services immediately on the creation of Federation Council.

 As part of the development of the new LTFP, Council also completed Business Service Plans including service mapping and costings for the 45 service areas of Council. 

Council currently has 45 services  that it delivers. Of these, 31 are customer focused (external) services and 14 are support (internal) services required mainly to deliver the external services, and also ensure Council meets legislative requirements and community expectations.

The Business Plans undertaken had various outcomes including -

  • to ensure services are more clearly defined into individual service listings,
  • to ensure the investment in services is targeted at the correct customer segment,
  • to allow efficiencies to be found on an ongoing basis where possible,
  • to allow the true cost of each service to be more clearly identified to ensure the public can be more aware of Councils services and their costs, and Council can then on an ongoing basis, engage with the community to ensure informed decisions on service delivery can be made as and when considered appropriate,
  • to allow services to more clearly align with the organisational Management structure (this was updated as part of and parallel to this process), and
  • to ensure Council services support the achievement of the outcomes sought in the Community Strategic Plan (10 year) and Four-Year Delivery Program and the Annual Operational Plans, including any related strategies. 

The business-as-usual approach was determined not financially sustainable. Council knew the status quo needed to be challenged if it wanted to support the Federation Council LGA to grow and thrive into the future.  This will also assist the LGA to continue to evolve as a thriving area containing many livable communities, a vast array of community assets, and a wide range of services delivered by Council. 

Council through many engagement forums including community satisfaction surveys, have been encouraged to maintain existing services, and of course improve service levels of some of our services that most need it, such as the road network, where possible.  Council has since its inception in May 2016, been on a continuous improvement journey, balancing the immediate running of an entirely new organisation delivering the day-to-day services of the two former Councils from day 1, with the demands of significant new funding, and ensuring a sound financial base into the future.

The prior Council elected in 2017 initiated the work that led to the Councils first entirely new LTFP, adopted in 20/21. The 2016/17, 18/19 and 19/20 LTFPs were basically combined versions of each former Council.

Federation like most forced mergers did not have the luxury of planning and preparing these plans, months or years earlier, like some of the city Councils who were already proposing and preparing for the merger.

The first entirely new LTFP flagged the need for SRV in future years in order to maintain financial sustainability if the current services, and their service levels, were to be maintained at similar levels.

This was primarily to ensure Council can manage its cash reserves to a suitable level and borrowing commitments, and also to be able to provide services and manage assets responsibly into the future for users.

Each new adoption of the LTFP, across 21/22, and now most recently the 22/23 plan, has further improved and refined the financial information, especially as new assets came on line, and road revaluations in particular placed a major increase in Councils non cash operating expense of depreciation.

Council engaged extensively throughout this process and at its June 2022 meeting, unanimously supported Scenario one within the LTFP, which contains a SRV that was publicly exhibited.  The intent of this SRV is to provide capacity for Council to address the asset management demands of existing infrastructure over an extended period and support Council to deliver its 45 services including improving the levels of service in some key required areas such as roads.

In the LTFP, Council adopted the scenario that provides a $48 million annual operating program and $18.6m capital program for 2022/23 and a $104m total capital program over the 10 years. It contains rate increases at 2.5% for 2022/23, followed by , if approved by IPART, the SRV for four years from 2023/24 and including the 2026/27 year, being 19%, 17%, 14% & 10%, inclusive of any rate peg increase allowed by IPART for all Councils.  For example, if IPART in 23/24 approve all NSW Councils to apply a 2% increase to rates, Council’s SRV component would be 17% plus the allowable 2%, being then 19% in total.

The SRV increase proposed will be subject to an application to and approval by IPART and involve further community engagement opportunities for ratepayers when the application is on exhibition by IPART.  This is expected to be in early to mid-2023.  IPART make their determination around May 2023.  Council will extensively communicate these opportunities to provide submissions to IPART when the application is lodged.

Interested people should also ensure they stay engaged with Council during this process, including via keeping up to date with Council’s monthly meeting agenda items.

View our Long-Term Financial Plan for further information.