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Go figure

4/5/2018

9 Comments

 
Picture
It’s almost $100 million and it’s our money … but try talking about the Bass Coast budget and watch the eyes glaze over, writes Mayor Pamela Rothfield.

By Pamela Rothfield

AT LAST month’s council meeting, Item H.1 on the agenda attracted some 200 people. Item H.1 was, of course, the Cowes to Stony Point car ferry business case.  Afterwards the gallery emptied out – leaving a mere handful of people to witness the next item: the draft annual budget, which provides for total expenditure of some $99 million in Bass Coast in 2018-19.

Yes, I know, that word – budget. When I mention it, I see the eyes glaze over and the heads slowly bow and I know interest has flown out of the window. I have lost the audience, as was evidenced in our April council meeting.

Our draft budget has been available for public inspection since the April 18 meeting. We have held and continue to hold, community sessions across the shire. We’ve also called for submissions. The attendances at our sessions have been less than colossal. It would be fair to say that at some we’ve felt a little lonely.

Whilst the subject of finance can be dry and uninspiring, it’s imperative that we all, to some extent, have an understanding of it.

Every day I come across people who have questions and suggestions but lack an understanding of council finances. They may have heard of profit and loss statements and even perhaps have a mild understanding of a balance sheet in the normal commercial world, but when it comes to local government they’re not aware of the anomalies we face.

For instance, the State Government provides councils with grants to assist with the operations of council. It also reimburses councils for some of the expenses incurred in providing State Government services such as school crossing supervisors and home care services.  Sometimes this funding is made in advance.  Council is obliged to account for such “pre-payment” in the year the amount is actually received. That year the revenue (and resulting surplus) looks great. But what about the year that follows? That doesn’t look so good.

Sometimes Council resolves to fund an asset for the benefit of the community on land that we don’t own. We've allocated funding to the Wonthaggi Highball Stadium and the Cape Paterson Surf Lifesaving Club, which are both on Crown land. This money is treated as an expense on our profit and loss sheet instead of a community asset (which it really is).  Again that affects the bottom line in 2017-18 and 2018-19.

These are just two of the challenges we face when trying to explain why in any one year we might not achieve a surplus in accounting terms.  The overall trend, however, is positive and Council’s ongoing financial position remains strong. 

Of course, there are some in the community who feel that Council should not operate as a commercial enterprise, focussing purely on a bottom line surplus, but instead look to improving infrastructure and delivering services to the community.

Another challenge is explaining our rates. We often hear complaints that Bass Coast is a high-rating council – mainly due to a comparison with metropolitan councils’ rates.

Going back to amalgamation in 1994, the commissioners who established the new combined Bass Coast council worked out how much was required annually to operate a new larger council. That is, all the staffing costs, materials and services to be provided and the capital projects. The total was then divided across the shire, proportionally, based on the value of your property. This is how all municipalities initially formed their respective rate base.

It’s pretty easy to see that the more properties, the less each property has to pay – economies of scale relating to increased density have a distinct advantage! The added advantage for the inner city councils is the fees and parking fines which can add millions to their budgets each year.

The most appropriate comparison for Bass Coast rates is not with large city councils but with similar-sized rural councils. The Know Your Council website clearly shows our rates are below the average.

If you have stayed with me thus far – I congratulate you. Maybe we’ll see you at the next budget session, if only to offer you a cup of coffee and biscuit.
Budget submissions

​View the
draft budget online or at customer service centres in Wonthaggi, Cowes, Inverloch and Grantville. Community information sessions will be held in:
  • Wonthaggi – Monday, May 7, 6.30-7.30pm, Old Wonthaggi Post Office, corner Watt Street and McBride Avenue
  • Facebook – Tuesday, May 8. 6.30-8pm,  www.facebook.com/basscoastshire 
 Submissions on the draft budget close on May 22. 
9 Comments
Walter BroussArd
5/5/2018 08:32:39 am

Mayor Rothfield

As a former accountant (now retired) and, inter alia, the Budget Accountant at Heinz Australia for 4 years (with a then annual expenditure budget of $400m), I believe that I still know something about P&Ls, BSs and Budgets. It seems to me that the most urgent financial need for BCSC is to benchmark its staffing numbers, average levels of salaries, and individual levels of salaries for like positions, and rate levels (and other) revenues against other Rural municipalities. My 'gut' feel (and gut feels in budgeting are invariably right on the money) is that if Council did that exercise it would find: a degree of overstaffing, average salary levels and salary levels for 'like' positions overpaid in BCS. The possible recurrent savings from correcting those anomalies could then be directed to increased capital expenditure within the Shire. I know that Councilor Les Larke, seems to 'get up the nose' of other Councillors with his concern about financial matters, but, in my mind, he has the experience and expertise to undertake such an analysis. Does anyone else on Council have similar expertise?

Re the level of Rates metropolitan Councils vs Rural Councils, I accept your basic premise that the correct comparison is Rural vs Rural, but, having moved from Yarra Council's jurisdiction to BCS 6 years ago I was very surprised at the then level of rates in BCS, for a property valued at less than 60% of the property value in Yarra.

Regards

Walter Broussard

Reply
Frank W Schooneveldt
5/5/2018 08:39:13 am

Pamela,
Thank you for acknowledging that the Bass Coast financial position remains strong.

I have read the 2018/2019 Draft Financial Budget and forward estimates and conclude that the Draft Financial Budget is very conservative and I would like to see the Capital Works program (infrastructure) significantly increased and rather than paying down debt.
I have outlined my reasons to the CEO of the Bass Coast Shire and expect a response in due course.
The good news is that this is a Draft Budget so Council has some time to amend them into something that is more realistic.

Cheers

Reply
Phyllis Papps
5/5/2018 11:29:34 am

AT WHAT PRICE ?
Dear Madam Mayor,
an excellent article that outlines all the issues that Bass Coast Shire Council has to face and juggle every year.
It's very simple: Increase Rates or reduce services. You don't need to be an Accountant to work that out.
Whenever Rates are increased, people complain.
Whenever services are reduced, people complain.
Cutting back on staff and salaries means reduced services to the community. Then people complain AGAIN.
Having worked in Local Government for many decades I truly believe that Bass Coast Shire Council is doing the best it possibly can (despite limitations related to lack of State and Federal funding/grants)
I would really appreciate reading some constructive and practical comments related to how Bass Coast Shire Council can continue to provide quality services for its residents, instead of the usual whinging and criticism.

Reply
Frank W Schooneveldt
5/5/2018 12:30:23 pm

Phyllis,
While I agree with most of your comments however budgets must meet the needs of the community and this budget can be improved.
I recently wrote to Cr Brett Tessari regarding the huge puddle in the Cuttriss Street Angling Club Car Park. A Council Officer wrote back that the site has been inspected and that maintenance work would be done on the drains that are blocked to remove the water.
Council advised that this car park is of a bad design and is scheduled to be upgraded in 2025/2026.....that’s right 2025/2026. We need to fix this car park problem now and no doubt there are other areas that are equally in need across Bass Coast that need fixing. I don’t see the need to pay own debt by $6.662 million in the 2018/2019 year when the Shire has so much pressing work.
Also the State and Federal Governments are in election mode which will create opportunities.
Cheers




Reply
Lorrie Read
5/5/2018 09:15:21 pm

Thanks for an excellent article, it is amazing how people's eyes glaze over at the mention of budgets, when they underpin all decisions made by the Shire. But I although think it is worth mentioning the great advocacy work undertaken by the shire in recent years. The state government's contribution to Wonthaggi Colledge, The Hospital, and the new Health Hub in Cowes. Keep up the God work.

Reply
Cr Geoff Ellis
6/5/2018 08:54:54 am

A great article that I fully support. However:

A question for the Editor – is The BCP about to start an employment section? There seems to be some need for such a page. I often see resumes posted in response to articles and I would be disappointed if the only purpose was patriarchal measurement or man-splaining.

Without focusing on any particular narrative I’d just like to point out that our Council consists of nine adults who all have the good of The Shire at the core of their reason for being in the Chamber.

As a semi-random cross section of society (it’s currently almost impossible for some sectors of the community, such as working parents or single parents, to find the time and resources to even run for council) we all bring a distinctive voice to the table.

Media portrayal of the personalities, and personal interaction, of councillors says more about the readership than the councillors. As nine adults we treat each discussion as a fresh conversation.

Recently I received a series of abusive emails from a ratepayer who was trying to convince me to attend a presentation he had organised. I was already pre-committed elsewhere and his final fling was an inference that I was ‘in flat out supine denial about climate change.’ We're both on the same side of that debate but is that effective communication?

Getting back to Mayor Rothfield’s well-honed article - I would like to point that ongoing service review has been a fundamental pillar of Council’s direction for at least the last four years and I have yet to find an officer who isn’t doing their utmost to deliver the services that the community, especially the all too often silent majority, need us to provide.

My gut feeling: The Cats will win the Grand Final – but I wouldn’t gamble other people’s money on it.

Reply
Frank W Schooneveldt
6/5/2018 09:58:10 am

Geoff, a nice refelective deflective piece. On my resume is clearly states that I am an AFL fan.....that’s a member of the anti football league.
Cheers

Reply
Cr Geoff Ellis
6/5/2018 04:53:46 pm

Thanks Frank.

Don't tell anyone - I have never been to a footy game and I am very glad to hear of the Anti Football League.
Cheers from Western Port Ward !

Phyllis Papps
6/5/2018 10:44:11 am

Bravo Cr Geoff Ellis !!! An excellent summation of what the reality of life is like being a Councillor of Bass Coast Shire Council. You all deserve gold medals rather than the meager amount you are paid (which by the way is less than the Minimum wage)

As you rightly point out, it is all about effective communication. BUT having to cope with the rants of disgruntled residents is totally in-appropriate behavior.

I have the greatest respect for all of the nine Councillors of BCSC who are dedicated, passionate individuals who contribute their expertise and their time. AND together as a whole make decisions on behalf of their community. Keep up the good work.

Reply



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