Local Board Agreement - Adoption meeting briefing June 2011 - 14 June ...

Local Board
Agreement
Adoption meeting briefing

June 2011

Agenda
1.   Context / Key challenges
2.   Progress made
3.   Impact on your agreement budget
4.   Next steps
5.   Roadmap for future improvement

Context
Long term plan 2010-2019
• Developed by ATA
• 3.9% rates increase (underlying 7.3%)
• Assumed $47 million of savings
• Compiled from previous council LTPs
  – All budgets transferred from previous councils
  – Mapping by staff in previous councils to new structures
  – Adjusted for new governance/org structure
• Ambitious capital programme inherited

Context
Draft annual plan
•   4.9 per cent rates increase
•   $62 million savings target
•   Retain all service levels set out in LTP
•   Assumed level of capital expenditure deferrals
•   Challenging environment
    – Prepared in 12 weeks
    – New systems/staff/elected representatives
    – Limited understanding of budgets

Context
Consultation process
• 1 month consultation
• 1800 submissions themed in 10 days, summaries
  distributed within 2 weeks
• 1 regional / 21 local hearings over 9 days
• Further information requested – reported back in May
• Local board and CCO workshops
• Deliberations by Strategy and Finance on 25/27 May

Key challenges
• Geographical mapping – new
• Service provision not aligned to local board
  boundaries – pragmatic vs accurate allocations
• New staff, new financial planning system
• Asset information limited
• Challenging timeframes and environment

Key challenges
• Transitional year:
  – Full rating mechanisms not available
  – Absence of an integrated Revenue and Financing and
    Local Boards Funding policy
  – Local board plans not yet in place
• Completely new governance structure and
  operating model
  – Mapping of budgets by previous councils inconsistent
  – Revise budgets as model is clarified

Progress made - overall
• Savings of $81 million identified
  – Local component flows through to individual budgets
  – Same level of service for lower overall cost

• More realistic capital programme
  – Rephased based on deliverability/progress to date
  – $948m programme (excl Watercare) – largest ever
  – Incorporates net $60m deferral assumption

Progress made - overall
• Lower rates increase confirmed
  – 3.94 per cent
  – Includes new local and regional initiatives

• Retains anticipated service levels from previous
  long-term plans
  – Delivering the same or more for less

Progress made – local boards
• Local board priorities investigated and
  categorised (30 May letter from Cr Webster):
  – Can be met from existing budget
  – Departments/CCOs to seek to reprioritise and will
    report back on implications
  – Policy needs to be developed across region to guide
    expenditure
  – LTP – should be considered during development of
    long-term plan

Progress made – local boards
• Identified and allocated more discretionary
  funding for local boards:
  – Enables progress on priorities if can’t be met in
    existing/reprioritised budgets
  – Double the draft Annual Plan’s opex fund to $2 per
    head of population
  – New Capex fund $4 per head of population
  – New local community grants budgets
  – Identified and remapped ex ACC and NSCC SLIPs
    budgets for Northern and Central boards

Progress made – local boards
• Mapping corrections
  – All budgets from previous councils transferred in LTP
  – Focussed efforts to ensure “mapped correctly”
     • Department/CCO
     • Activity
     • Location – e.g. regional or specific board area

  – Unallocated operating expenditure reduced from
    $13m in LTP to $4.9m (depreciation on unallocated
    capex)

Implications for your budget
• Savings – “same or more for less”
• Capital programme changes
• Discretionary funding – increased local
  governance and advocacy opex and capex
• Movements between sub activities
  – Mapping corrections (activities or local boards)
  – Allocated costs – overheads
• Walk through key changes after presentation

Next steps
• Today - consider revised agreements and
  indicate whether to:
  – adopt in full
  – adopt in part, indicating those areas not agreed, why
    not, and what needs to change for you to adopt in full

• 28 June - governing body to adopt annual plan
  – publish agreements in final annual plan
  – if not adopted in full, document must explain why not

Roadmap to improvement
• Unallocated capital expenditure
  – $49m in LTP reduced to $47m in Annual plan
  – Work programme for remaining amount to be
    prioritised based on:
     • Sub activity and source council
     • Essential asset maintenance
     • Local board priorities inform remaining spend
  – Where possible, posting actual spends against these
    budgets to local board areas

Roadmap to improvement
• Departmental briefings to local boards on work
  programmes in early 2011/2012
  – What can be done in allocated and unallocated
    budgets
  – Impact of reprioritising work programme
  – Options for discretionary funding
  – Further information on cost implications of
    progressing priorities
  – To be completed by end of August 2011

Roadmap to improvement
• More involvement by boards in work programme and
  budget discussions:
   – Early involvement in long-term plan process
   – 11/12 process informing council’s operating model

• Improve budget and actuals data quality

• Implement reporting capabilities starting with high level
  report on July results (same level of service as governing
  body)

Summary
• Extensive budget refresh exercise – impacts your budget
• Walk through key variances next
• Today need to agree whether to adopt in full
• Governing body adopts on 28 June – will publish
  reasons for not adopting in full
• Future work planned to improve information and budgets
  available to boards
• Focus on Local Board Plans and next LTP