21 Nov 08 - Fresh Budget Approach for Council

A new budgeting strategy is to be used by Council to help identify its top priorities for spending and saving in 2009-2010.

"We have a new Council so we wanted to take a fresh look at the financial picture and priorities," said Stephen Sawtell, Council's General Manager.

"That's why we've adopted a zero based budgeting approach. With zero based budgeting, each manager scrutinises their projects - looking at need and resources - costs them in detail, makes a risk assessment and creates a priority list to present to Council. We're confident that zero based budgeting will assist us to identify the real priorities," he said.

Mr Sawtell said that the aim of the new approach was to ensure the Council was operating as efficiently as possible and to target potential savings. "We have a goal of finding up to $3m in savings, which will provide an extra $1m for new facilities and services and address current shortfalls," he said.

In addition, Council is establishing a ten-year financial model to plan into the future with more accuracy than ever before.

"This is part of the continuous improvement program for the organisation and will ensure that we continue to operate in the most efficient way possible," said Craig Milburn, Council's Director of Corporate Business.

"Coffs Harbour City Council has a good record in sound financial management, but we are all living through global financial uncertainty at present. There's no doubt that the international economic crisis will have direct and indirect impacts on local government.

"This is in addition to the range of financial pressures we have faced for some time. The property sector is depressed and still uncertain, while the construction boom in WA and Queensland has contributed to steep rises in materials costs, which have been sharpened by rises in commodity prices. Cost shifting - the transfer of responsibilities from other levels of government to local government without the necessary funding - is impeding all local councils' ability to deliver services to the community and maintain essential infrastructure.

"Councils are also shackled by an $8 billion infrastructure backlog - the amount of money needed to repair or replace ageing infrastructure. This is growing in NSW at a rate of around $500 million per year. In Coffs Harbour, we're looking at a $160m backlog. Plus years of State Government rate-capping have left councils with an unbridgeable gap between financial reality and the resources offered.

"There will be some tough decisions ahead, but by adopting clear financial strategies, we're making sure that we - and our community - are in the best possible position for the future," he said.