Kiama Municipal Council has announced a Financial Sustainability Plan to refine and deliver its Long Term Financial Plan, which is designed to address Council's operational deficit and set out a roadmap to financial stability and transparency.
"Our financial plans are not just about fixing the deficit but also aim to create stability and sustainability across Council. To get this right, we are leaving no stone unturned. We're assessing everything," said Kiama CEO Jane Stroud.
Kiama Council, along with many other councils across the country in the past 18 months, has had a challenging time financially. The economic impacts of environmental disasters and COVID-19 have affected Council's budget, with a reported operational loss of $7.956 million in 2020 and an estimated loss of $6.621 million in 2021.
"I see Council's budget as no different from a household budget in many ways. You can't spend more than you earn and we can't keep doing more with less. We need a sensible plan to move forward and achieve stability," said Ms Stroud.
The operational loss for the 2022 budget is $2.748 million, with early foundations being laid to continue the trend of bringing Council's budget back into surplus.
These foundations involve some key policy documents, including the Restricted Assets Policy (adopted at the June 2021 Council meeting), which looks at intergenerational funding of assets into the future, and the draft Financial Sustainability Plan (FSP) which will be peer reviewed through both community consultation and independent experts.
Kiama Council's 2021/22 budget focuses on future financial sustainability, with greater transparency and engagement across the organisation. The budget seeks to continue to improve Council's operating performance ratio and will target a minor cash surplus.
The FSP includes projects and strategies to be progressively implemented and actioned from 2021/22 over a three-year financial period.
Key strategic projects that will drive financial sustainability for Council over the coming years and form the backbone of Council's Long Term Financial Plan include the following:
- Greater community engagement
- Review of current land holdings
- Review of current procurement practices and policy
- Asset management plan to develop levels of service targets for the community
- Review of Council's fees and charges
- Sustainable resourcing allowing Council to obtain its strategic directions
- Focus on future grant opportunities
- A review of Council's future borrowing costs
Kiama Council Chief Financial Officer (CFO) Jason Galloway said the FSP provides a roadmap to financial sustainability for Council over the short, medium and longer term. The FSP will be used to inform the scenarios in the Long Term Financial Plan (LTFP) 2021-2031.
"The Financial Sustainability Plan is the core strategic document to focus on continuing to improve Council's financial position. It will also ensure we are in good financial shape for the future, with a greater focus on transparency and community engagement," said Mr Galloway.
New proposals under the FSP include the creation of an expert community working group and an independent review into Council's historical budget process and investment decisions.
If approved, the FSP community working group will include the Mayor, Kiama's CEO, CFO, Director Infrastructure Services (formerly Engineering and Works), and four members of the Kiama community.
"Our Financial Sustainably Plan and Long Term Financial Plan show we are actively working to address the operational deficit and ensure a wise use of funds in all areas of Council," said CEO Jane Stroud.
Kiama Mayor Mark Honey said: "Our organisation is committed to deliver for our community and to work together to ensure that we have a bright future. I know that the Kiama community will support us through this process as we work with you on financial sustainability."
Council approved the Financial Sustainability Plan and Long Term Financial Plan at its meeting on 17 August 2021. A core component of this is community involvement and the details of how community members can nominate and get involved in the working group will be released early next week.
