Fit For the Future Update

Fit For the Future Update

Many Shires across NSW are verging on financial non sustainability and the time has come to reckon with the facts.

For many years now, the ERA has been trying to get the ESC to confront a reality that they continue to ignore.

The Independent Pricing and Regulatory Tribunal  (IPART) has been engaged by NSW Government to assess whether ESC is Fit for the Future. IPART has written to the ERA inviting us to make a submission, and we are now asking the Eurobodalla ratepayers and residents for their views.

Some background beforehand:

On June 30^th this year, the NSW government will be making a decision on what form the future ESC local government will take. If you are unaware of this, it is because our council has failed to engage the community early enough to bring residents and ratepayers with them on this important journey. Many other Shires, by contrast, have engaged early and actively with their affected communities to ensure that their residents are fully informed and involved in the process. 

By the 16^th of October this year, the NSW Government, based on the assessment of Eurobodalla Council by IPART, will have made a decision about the financial viability and ongoing sustainability of the Eurobodalla Council as a local government entity.  

The conversation before June end, and October the 16^th must NOT be just between IPART and Council staff and Councilors behind closed doors.

The ERA has been demanding a major external efficiency review for some years. A review that is open, transparent and above all honest. Council has lost the communities trust to honestly and critically review itself.

Currently, ESC has admitted that it will fail the long term IPART criteria fitness tests that relate to operating performance and own source revenue. IPART will propose in their report that if these benchmarks are not met within five years, then the ESC may not be viable.

Even if IPART grant approval of the 21% SRV application to the Council this month, the next increase application in three years’ time will have to be considerably higher for the council to reach its financial targets. That money will once again come from already burdened ratepayers who can ill afford these rate rises. We are nowhere near ‘Fit for the Future.’ 

Our ability to fund Infrastructure has been rated as poor. There is a real problem when Council are given $11 million to finish the Spine Road in early 2014 and the Council responds saying they may be able to start the project in the latter half of 2016!

There are, however, other ways of meeting these benchmarks. Council could dramatically reduce its 120 plus delivery operations to just a core number of programs – remember the good old days of Rates, Roads, and Rubbish?  This is what the Community told ESC via the Micro-mex community surveys not so long ago. 

On 16 October, there could be 4 possible verdicts that will change our local government:

1. We remain a Shire in our own right but implement significant structural changes to ensure that we meet the benchmarks for sustainability. E.g.:    We could reduce the number of service delivery programs that now stand at over 120. (Should we really be showing people how to cook and walk, building worm farms, and learning how to ride a motor bike?)
2.  We could dramatically reduce indoor staff numbers.


3.  We merge all / part of Eurobodalla Shire with either / both Shoalhaven or Bega Valley Shire 


4.  We enter into Joint Organization arrangements with neighboring Shires in an attempt to reduce operating costs -e.g. we could radically reduce costs by amalgamating many of our backroom services with other councils e.g. IT services.

The community need Eurobodalla Shire Council to lead the discussion on this. The ERA are listening, writing and organizing, but nobody at ESC seems to be interested, unless you read a weak article about the subject published by the Bay Post.

Surely, by now, the Mayor and Council should be organizing community meetings. The three casual drop in sessions at local markets and malls are not public consultation and Council is not taking any public submissions on the matter.

There is to be a meeting on May the 9^th in the Bay to discuss many of these issues, organized by a group of concerned Batemans Bay citizens. The ERA will be attending to listen to people’s views.

However let us have your comments on WHAT YOU WANT to happen to your council ASAP and we will include them in our Submission to IPART. This has to be completed by the third week of May.

Sincerely the ERA team

Eurobodalla – Not fit for the future?

Eurobodalla – Not fit for the future?

Eurobodalla Shire currently fails 4/5 criteria set by IPART for independent viability. Our Shire has an inadequate rate-able base to sustain its infrastructure and even basic essential council services, AND THIS SITUATION WILL WORSEN if jobs are lost and income generating residents are forced to leave.

Analysis of current and projected ABS economic data reveal that Eurobodalla fails the "Fit for the Future" fitness test and the forecast is for a downward spiral into poverty, business closures, forced relocations and community fragmentation. 

Eurobodalla residents have little to no capacity to sustain increased economic pressure:

Our economic profile:

55% of residents have an income < $1250 a fortnight
30% are retired, many are on fixed incomes 
< 10% of the Shire population earns over $2000 a fortnight, compared with the state average of almost 30% (2011 census). 
40% youth unemployment above NSW state average
30% of residents are employed (13300 out of 37600)

The average yearly income comparison:
NSW =$68000
Bega Valley = $45000 
Eurobodalla = $33000

Rates in the Eurobodalla:

Despite a compromised capacity to pay, our charges are higher than Bega and Shoalhaven. Councils’ debt projections are set to increase by $40 million over the next ten years, unless they are permitted to keep putting up the rates. This means repeated increases of 26% plus every four years. On top of the base average $800 p.a. rate are the other 43% of charges which include water and sewerage availability.

We need to increase our rateable base:

As Council already subsidises thousands of dollars in rate subsidies for those that cannot afford their rates, those that who can will have to pay more, as will businesses. But what happens if those people who can pay decide to leave the shire? Some commentators believe that 100,000 people are now the minimum number of people to sustain a local government area. With our reputation for obstructive and unresponsive local government, it is unsurprising that prospective investors and potential residents opt for the neighbouring shires.

Examples of the anti- development attitude include the attempts by investors to open a retirement village and run the airport. The Bunnings development took nearly eight years of negotiations sending a message to other companies not to waste time, effort and money considering Eurobodalla.

Our shire is seen by others as lacking in both foresight and economic development, and the requisite fiscal responsibility to sustain our own communities and environment. A risky place to commit to or invest in. Move on, nothing to see here.

Which brings us to the big question - are we Fit for the Future?

T Corp, the government’s financial arm, told us in 2013 that the economic outlook for the Eurobodalla Shire was rated as MODERATE, versus SOUND for Bega and Shoalhaven. With the underlying financial statement of long term losses, many councils have been told that unless they improve, they will die. ESC tenuously meets only 1 of the 5 criteria for viability.

Economic activity and sustainable jobs growth are the ONLY way to ensure a viable future for the whole community - especially our youth. Councils’ blatant misrepresentation that we are “forging ahead” is starkly illustrated in the table below:

Residential Building approvals figures comparing the Eurobodalla with Bega Valley and Shoalhaven shires since the turn of the century:

Year                          ESC    Bega   Shoalhaven

13-14                         174      168        524

12-13                         122      136        499

11- 12                         95       150        399

10-11                          83       180        486

09-10                        127       138        504

08-09                          91       119        378

06-07                        163         90        434

05-06                        236       150        460

04-05                        292       189        734

03-04                        419       215        993

02-03                        445       244        1065

01-02                        407       270        1168

 ( ***Shoalhaven are about 2.4 x the size of our population, Bega just slightly smaller)

This data begs the question...What happened to our Shire between 2007 -14? What was the planning departments’ agenda and policy direction during this timeframe? Government cannot create wealth - at best through sound policy, and allowing adequate growth, they preserve the capacity for enterprising communities to realize their potential.

Ask yourself a few questions:

What happens to this equation if those who generate the wealth leave?

Are you currently getting more or LESS service for your increased outlay compared to 5 years ago?

What are the services we get actually worth? What do they COST? what should they ACTUALLY COST?

Which services are essential and can only be, and should continue to be, provided by the council?

Which services and operations should council axe? How many unnecessary services are jobs for the boys?

What is the ERA position?

ERA assures you that there will be a scare campaign that unless we stay ‘as we are’ things will only get worse - such as the unproven claims by the mayor that we would have to pay higher rates if we amalgamate. Many in the ERA would like to see the council maintained, but changed dramatically to become efficient. Good management is a start. Others passionately believe that amalgamations are the only way forward. The problem is there is NO debate.

Community debate on a sustainable future lacking:

Will council comply with the directive to engage with the community towards a sustainable future? Perhaps like Victoria, the State government will have to step in and force through change because the local vested interests are too strong. Allowing the council to solve the problem on their own will be a disaster, as they cannot recognise there is a problem. It is a problem that may require substantial staff reductions and the discontinuation of a range of services and operations.

By now, Council should be in full discussion with its community on how it sees the council in the future, if there is to be an adequate debate by June 30^th. However there has been an irresponsible silence on the issue, despite Council having been instructed to engage with the community, to discuss everything from mergers of backroom services to amalgamations. This amounts to a failure to recognize the gravity of the situation.  So called efficiencies in closing tourism offices and associated personnel will save about 1% of the budget. Why is trivia being discussed and not the big picture?

What is the solution?

We need more wealth generating people to come and live here, and more wealthy people to visit, live and spend money here - at the moment, both these groups are being diverted to shires north and south by the policies and attitudes of our council.

Our local wealth generation is dependent upon tourism and hospitality, building, manufacturing and primary production. We need council to desist from stifling economic growth by withholding building approvals and business development that create real, meaningful sustainable jobs. We need council to facilitate the development of local enterprises, value adding to existing resources, and the building of local infrastructure. We need to be unencumbered from developing existing markets, products and services that other people value.

Perhaps the best result for the community would be for Eurobodalla Shire Council to cease to exist, if it cannot respond to meet the needs of the community, and chart a course for a sustainable future.