Integration Easy to Say Easy to Achieve?

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Integration Easy to Say Easy to Achieve?
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Integrated Decision Making

• A competent long-term plan will contain
  information that tells a consistent, coherent
  story to the community.
• A great long-term plan serves as the basis for
  aligning the whole decision-making process
  towards promoting community well-being.

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In the LTCCP context

• Integration means that all of the content of the
  LTCCP should tell a consistent, coherent story
  for the community about the local authority and
  communitys current situation and the local
  authoritys future intentions.
• Every piece of information in the LTCCP should
  line up

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Well beings
Community Outcomes
Other Strategic processes
Councils response to Community outcomes
Councils Activities Including rationale
Levels of service
Asset Management Plans
Non Asset Activity Plans or Strategies
Corporate Forecasting assumptions
Financial policies
Schedule 10 information
Financial information
Non Financial information
Operations Maintenance Revenue Depreciation Capi
tal expenditure Renewal Development
Performance Measures
LTCCP Trade offs and engagement
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The How

• First steps
• Where is your community and authority at now?
• Where do they want to get to?
• How is it going to get there?

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Before you start

• Develop your own integration process

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• LTCCP process framework

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Before you start

• Develop your own integration process
• What is the existing LTCCP saying
• Overall message
• Dollars
• What are the levels of service
• How do these link to when the community what to
  go
• What are the messages from the AMPs

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Where is your community and authority at now?

• Funding and Financial Policies
• State of Asset Management Plans
• Levels of Service

• Often there will some degree of trading-off of
  levels of service and cost and this process of
  trading off is another means for ensuring
  integration of the information

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Financial strategy

• Explains your local authoritys
• Application of the section 101 requirements to
  manage finances prudently
• Application of the section 100 requirement to
  operate a balanced budget
• Application of section 102 - funding and
  financial policies
• Projected Financial Position
• What does your community see

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Development of Financial Strategy
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Content of a Financial Strategy

• Existing Financial Position
• Debt investments
• Position relative to Asset Management Lifecycle

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(No Transcript)
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Content of a Financial Strategy

• Existing Financial Position
• Debt investments
• Position relative to Asset Management Lifecycle
• Overall revenue financing policy
• user pays versus every one pays
• Application of Balanced budget requirement
• Be honest!!!!

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Considering the Financial Strategy
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The first loop
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The second loop
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Balanced Budget Requirement

• Section 100 (1) A local authority must ensure
  that each year's projected operating revenues are
  set at a level sufficient to meet that year's
  projected operating expenses.
• You must make a surplus of 1
• At the Council level NOT at the activity
• However there are some good exceptions.

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LGA Section 100

• (2) Despite subsection (1), a local authority may
  set projected operating revenues at a different
  level from that required by that subsection if
  the local authority resolves that it is
  financially prudent to do so, having regard to-
• (a) the estimated expenses of achieving and
  maintaining the predicted levels of service
  provision set out in the long-term council
  community plan, including the estimated expenses
  associated with maintaining the service capacity
  and integrity of assets throughout their useful
  life and
• (b) the projected revenue available to fund the
  estimated expenses associated with maintaining
  the service capacity and integrity of assets
  throughout their useful life and
• (c) the equitable allocation of responsibility
  for funding the provision and maintenance of
  assets and facilities throughout their useful
  life and
• (d) the funding and financial policies adopted
  under section 102.

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Facts

• There is NO legal or Audit requirement to
• fund depreciation!
• or have a depreciation reserve.
• You need to have a surplus
• But
• You need to act prudently in setting revenues
• Complex
• Each Council will have different drivers

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It is OK to

• Fund depreciation and to allocate those funds to
  reserve when there is a good case to do.
• But be clear why you are doing it.

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Balanced Budget Flow
Are you showing a surplus?
Yes
Have you got non cash income e.g. vested assets,
unrealised gains.
Do you still have a surplus?
No
Yes
Have you got revenue (excluding rates) for
capital. E.g. grants or subsidy
Do you still have a surplus?
No
Yes
Yes
No
Is the surplus excessive?
No
Disclose and link to financial Strategy
Disclose and link to financial Strategy
No Action
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Levels of service financial policies linkage

• Useful lives one of the most overlooked impacts
  of a change in level of service is the change in
  useful lives
• Balanced budget levels of service are crucial
  to resolving how your local authority approaches
  the balanced budget requirement

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Summary of linkages

• Councils response to Outcomes
• Rationale for Activities
• Financial strategy
• Levels of service
• Activity Plans and or Asset Management Plans
• Performance Measures
• Funding financial policies
• Financial Statements

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Summary

• Start from a common understanding
• All pointing in the same direction
• Check progress along the way
• Is all the information telling the same story
  or does the story have to change
• What is the message you are trying to say
• Write it down
• Is the message you have written down the same
  message in your Plan