Working towards a Sustainable MRC

Like all councils, we are funded through the rates we collect and grants we receive, but have little means to create additional income beyond this. The NSW Government has also put a cap on rate rises, which means rate income is no longer in line with inflation.

As a result, the cost of delivering essential services such as roadworks, rubbish collection, water supply, sewer removal plus our steadily expanding service list is becoming too expensive for us to continue to wear the costs.

So, over the last 2 years we’ve been looking at ways to improve the financial sustainability of the council. We’ve called this project “Sustainable MRC”.

Firstly, we looked internally to improve many of our own practices. You can find out more about this via the ‘Our actions’ tab on this page.

Now the conversation needs to continue around our services, our assets and avenues to increase income over the longer term.


The conversation around ‘services’

The Parks

With an expanding list of services and no expansion to our income, we have had to undertake rigorous reviews of our operations and identify areas where we could develop savings over the longer term.

A major piece of work in this space focused on our Parks and Open Spaces.

Over the past few years, council staff and consultants have collated and sorted a large amount of data relating to all Parks and Open Spaces that Council owns or manages across the region. We called this our ‘Needs and Demands Assessment’.

This work then supported the development of a Parks and Open Spaces Strategy which acts as a top-level guide for the ongoing monitoring and management of existing spaces, and any future open space development.

But an even more important plan needed to sit under this: The Service Delivery Plan.

The Service Delivery Plan is a detailed operational document that sits underneath the Strategy and considers current and future service delivery standards for council’s parks and open spaces. Importantly, it leans into the organisation’s financial sustainability goals by making ongoing service adjustments based on our current resourcing levels. The Service Delivery Plan was developed from the ground up; with input from all parks and gardens staff who complete the day-to-day maintenance works.

You can find out more about this project here.


Customer Service

Council has also taken action to reduce face-to-face opening hours at our customer service locations with the view to becoming more efficient over the longer term.

Whilst this action will not reduce hours of our employees, it will free up a set number of hours each week for current staff to undertake work on services that are either lacking attention or have been added to council’s growing service list (by way of cost-shifting from Government or community expectations).

More information on new hours will be available soon.


Waste sites

Included in these recent service level amendments are the following changes relating to Waste sites:

  • Closure of Bunnaloo/ Womboota free waste drop-off stations
  • Closure of Wakool Waste Facility
  • Reduce opening days at Mathoura’s Waste and Resource Recovery Facility


The conversation around ‘assets’

The Parks

When undertaking the Needs and Demands Assessment Project, we discovered that there are a number of assets within Council’s portfolio that may not be providing value to the community like they once did. There are 412 pockets of land that council oversees, with some spaces now offering reduced benefit to the community as larger spaces with more amenities pop-up in nearby developments. The issue here is that our effort is duplicated in maintaining these areas or we are overservicing spaces that now have little use.

As a first step, we have commenced a process to reclassify 22 parcels of Community Land to Operational Land as the intended use is different to the current classification. This allows us to reduce maintenance (costs) on things like drainage basin and road reserves.

You can find out more about this project here.

There was also a proposal to reclassify 18 lots of Community Land that are currently used as park spaces: Council resolved to not proceed with these specific reclassifications.


Buildings

When undertaking the Needs and Demands Assessment Project , we also reviewed al council-owned and managed buildings.

Currently, we maintain one building for every 26.5 rate notices, or one building for every 38 residents. This is not financially sustainable and has the potential to worsen as Council seeks to provide new or upgraded assets to meet changes in regulation, standards and community need. Put simply: we own too much of just about everything, all of which is required to be maintained, insured, depreciated, and eventually replaced.

To support this, we delivered a Building Strategy which offers maintenance hierarchies, covering facilities such as public halls, offices, libraries, public toilets and sports pavilions.

The hierarchy classifications are defined by the current state of building, frequency of use, community visibility and the visitation rates for each site.

The building strategy also offers a clear rationalisation plan moving forward for various buildings and sites than may offer little value to the community or are at ‘end-of-life.”

Council has already offloaded some assets (like council housing) that had little impact on the community.

You can find out more about this project here.


The conversation around rates

At the June 2024 Council meeting Council endorsed a Mayoral Minute seeking to commence investigation into a Special Rates Variation (SRV).

An SRV would allow the council to raise rates above the annual rate peg increase, a limit set by the Independent Pricing and Regulatory Tribunal (IPART).

The motion put forward at the council meeting is to progress with consultation around a potential SRV, with conversations likely to commence in early 2025.

At this stage, this is only conversations with the community, to look at various income options to ensure we can maintain our services and to gauge the community’s thoughts around this.

If an SRV application was successful it would come into effect in the 2026/27 financial year.

Like all councils, we are funded through the rates we collect and grants we receive, but have little means to create additional income beyond this. The NSW Government has also put a cap on rate rises, which means rate income is no longer in line with inflation.

As a result, the cost of delivering essential services such as roadworks, rubbish collection, water supply, sewer removal plus our steadily expanding service list is becoming too expensive for us to continue to wear the costs.

So, over the last 2 years we’ve been looking at ways to improve the financial sustainability of the council. We’ve called this project “Sustainable MRC”.

Firstly, we looked internally to improve many of our own practices. You can find out more about this via the ‘Our actions’ tab on this page.

Now the conversation needs to continue around our services, our assets and avenues to increase income over the longer term.


The conversation around ‘services’

The Parks

With an expanding list of services and no expansion to our income, we have had to undertake rigorous reviews of our operations and identify areas where we could develop savings over the longer term.

A major piece of work in this space focused on our Parks and Open Spaces.

Over the past few years, council staff and consultants have collated and sorted a large amount of data relating to all Parks and Open Spaces that Council owns or manages across the region. We called this our ‘Needs and Demands Assessment’.

This work then supported the development of a Parks and Open Spaces Strategy which acts as a top-level guide for the ongoing monitoring and management of existing spaces, and any future open space development.

But an even more important plan needed to sit under this: The Service Delivery Plan.

The Service Delivery Plan is a detailed operational document that sits underneath the Strategy and considers current and future service delivery standards for council’s parks and open spaces. Importantly, it leans into the organisation’s financial sustainability goals by making ongoing service adjustments based on our current resourcing levels. The Service Delivery Plan was developed from the ground up; with input from all parks and gardens staff who complete the day-to-day maintenance works.

You can find out more about this project here.


Customer Service

Council has also taken action to reduce face-to-face opening hours at our customer service locations with the view to becoming more efficient over the longer term.

Whilst this action will not reduce hours of our employees, it will free up a set number of hours each week for current staff to undertake work on services that are either lacking attention or have been added to council’s growing service list (by way of cost-shifting from Government or community expectations).

More information on new hours will be available soon.


Waste sites

Included in these recent service level amendments are the following changes relating to Waste sites:

  • Closure of Bunnaloo/ Womboota free waste drop-off stations
  • Closure of Wakool Waste Facility
  • Reduce opening days at Mathoura’s Waste and Resource Recovery Facility


The conversation around ‘assets’

The Parks

When undertaking the Needs and Demands Assessment Project, we discovered that there are a number of assets within Council’s portfolio that may not be providing value to the community like they once did. There are 412 pockets of land that council oversees, with some spaces now offering reduced benefit to the community as larger spaces with more amenities pop-up in nearby developments. The issue here is that our effort is duplicated in maintaining these areas or we are overservicing spaces that now have little use.

As a first step, we have commenced a process to reclassify 22 parcels of Community Land to Operational Land as the intended use is different to the current classification. This allows us to reduce maintenance (costs) on things like drainage basin and road reserves.

You can find out more about this project here.

There was also a proposal to reclassify 18 lots of Community Land that are currently used as park spaces: Council resolved to not proceed with these specific reclassifications.


Buildings

When undertaking the Needs and Demands Assessment Project , we also reviewed al council-owned and managed buildings.

Currently, we maintain one building for every 26.5 rate notices, or one building for every 38 residents. This is not financially sustainable and has the potential to worsen as Council seeks to provide new or upgraded assets to meet changes in regulation, standards and community need. Put simply: we own too much of just about everything, all of which is required to be maintained, insured, depreciated, and eventually replaced.

To support this, we delivered a Building Strategy which offers maintenance hierarchies, covering facilities such as public halls, offices, libraries, public toilets and sports pavilions.

The hierarchy classifications are defined by the current state of building, frequency of use, community visibility and the visitation rates for each site.

The building strategy also offers a clear rationalisation plan moving forward for various buildings and sites than may offer little value to the community or are at ‘end-of-life.”

Council has already offloaded some assets (like council housing) that had little impact on the community.

You can find out more about this project here.


The conversation around rates

At the June 2024 Council meeting Council endorsed a Mayoral Minute seeking to commence investigation into a Special Rates Variation (SRV).

An SRV would allow the council to raise rates above the annual rate peg increase, a limit set by the Independent Pricing and Regulatory Tribunal (IPART).

The motion put forward at the council meeting is to progress with consultation around a potential SRV, with conversations likely to commence in early 2025.

At this stage, this is only conversations with the community, to look at various income options to ensure we can maintain our services and to gauge the community’s thoughts around this.

If an SRV application was successful it would come into effect in the 2026/27 financial year.

  • Our business actions

    When looking at ways to improve the financial sustainability of the council, we first and foremost had to look internally at our own practices:

    • We met with all staff and asked them to reduce all ‘discretionary expenditure.’ The ‘bottom up’ approach was an amazing success, taking $100,000 off our operational expenditure per month.
    • We formed a new council committee titled the ‘Revenue Task Force,’ chaired by the mayor. Over the last year we recycled many underutilised assets, gaining $1,128,100 in revenue (with a further $800,000 about to eventuate). Not only has an unrestricted $2 million been gathered, but there is also a significant reduction in maintenance costs, and an increase in rateable premises.
    • We built a matrix that tracked all actions by every single staff member to determine the exact expenditure in the Water, Sewer and Waste Funds. Some of the direct costs were correctly allocated (via time and plant sheets), approximately $1.2 million in costs were incorrectly attributed – inadvertently being subsidised by the General Fund. The correct allocation of indirect costs as a ‘charge’ to Water, Sewer and Waste Funds made an incredible difference to being able to maintain our assets paid for by General Rates.
    • We investigated all our energy costs and discovered there was opportunities to reduce expenditure on power bills. We reviewed our tariff categories and identified locations where installation of on-site solar generation would provide a good payback. Currently we have applied for a grant to implement this project.
    • We entered a collaborative effort with two JOs (RAMJO and HunterJO) for establishing a new Power Purchase Agreement, which is expected to save between $60,000 and $70,000 per year.
    • We did a complete review of our depreciation. This was a huge project which turned out to be one of the most rewarding. We discovered that we’d over allocated $4,500,000 against our depreciation for roads assets.
    • We also looked at what additional skills some of our staff have and how we can better utilise them versus bringing in expertise from outside the organisation.
    • We looked very carefully at our ‘Yellow Fleet,’ increasing utilisation overall, and retiring plant that was not cost effective.
    • Largely through natural attrition we reduced permanent staffing levels from 216.7 to 191.5 FTEs.

    All these actions reduced operational costs without compromising services. Our Operating Performance Ratio has now improved by a massive 84% (-31% to -5%). There has been a lot of planning, conversations and fact checking undertaken to make sure these decisions and their outcomes have the best results for our community.

Page last updated: 26 Aug 2024, 10:19 AM