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Performance Measures
from Resourcing Strategy
The Plan is reviewed and updated annually as part of the development of the annual Operational Plan and multi-year Delivery Program. Other scenarios are also developed and considered where proposals are likely to have a major impact on the Council’s overall financial sustainability.
This is the third major review of the Long Term Financial Plan developed by Mid-Coast Council and covers a ten year timeframe commencing in the 2021/2022 financial year.
Objectives and Structure of the Plan
• Provide a transparent account of Council's financial position to the community • Analyse the cumulative financial effects of Council's high level plans and policies • Identify the financial opportunities and challenges confronting Council • Provide a basis for sound and strategic decision making • Achieve a balanced budget over the long term, and • Meet the requirements of the Office of Local Government's (OLG) Integrated Planning and Reporting Framework
The Plan has been structured in five main sections.
Section 1 - Provides a brief introduction to the Plan, the objectives it aims to meet and the service structure and costs of Council.
Section 2 - Details the policy context within which the Long Term Financial Plan has been developed. It provides an overview of other strategies, plans, policies and other documents which have implications for the long term financial future of the Council.
Section 3 - Details the financial scenarios developed by Council. A single scenario for General Fund has been developed using the 2021/2022 budget as the starting position. The draft 20222023 budget has been included in the modelling with all indexation projected forward based on this draft budget. A single scenario for both the water and sewer funds has been developed.
This Section sets out:
• the assumptions by which each scenario was created • the value added by each scenario • the financial outcomes which result from the application of the relevant assumptions • any opportunities and threats which may make the scenario sensitive to variation
Section 4 - Draws conclusions from the financial modelling and proposes methods for resolving financial shortfalls.
Section 5 – Provides the principal Financial Statements (Income Statement, Balance Sheet, Cash Flow Statement, Financial Performance Indicators) on a Consolidated basis as well as for each of the 3 Funds operated by Council. These cover the 10 year period from 2021/2022 to 2031/2032.
Section 1
Current Financial Position of Council
As mentioned above Mid-Coast Council was created on 12 May 2016, being an amalgamation of 3 former councils. Responsibility for the provision of water and sewerage services was transferred to Council from 1 July 2017 following the dissolution of the former MidCoast County Council (Midcoast Water).
Council is required to produce Consolidated Financial Reports that comply with Australian Accounting Standards, the Local Government Act 1993 and associated Regulations and the Office of Local Government’s Code of Accounting Practice and Financial Reporting.
Council is also required to prepare Special Purpose Financial Reports that provide relevant stakeholders and users with financial information about its Water and Sewer operations.
To enable this separate reporting (and to comply with legislative requirements) Council operates 3 Funds – a General Fund, Water Fund and Sewer Fund.
The Consolidated result is the sum of the individual fund results. The Fund results for the financial period to 30 June 2021 are set out in the tables below.
This indicates that the General Fund recorded a deficit Net Operating Result before Capital Grants & Contributions. The modelling conducted over the term of this Long Term Financial Position (set out in Section 5) confirms that this is a long term trend. The Financial Performance Indicators that flow from this modelling highlight that Council will not meet the OLG Operating Performance Ratio benchmark.
The Operating Performance Ratio is the key indicator for long term financial sustainability. Action is required over the term of this Long Term Financial Plan to address this position.
The Water and Sewer Funds recorded positive (or surplus) Net Operating Results before Capital Grants & Contributions during 2020-2021. This is projected to continue across the term of the Long Term Financial Plan. However those funds have large capital works programs to be delivered over a long period of time and this will require careful management of ongoing budgets to ensure that funding is available when required.
