Has Council Got the Financial Capacity to Maintain its Assets?

Hepburn Shire has released its Asset Plan for review by the community. A key question is whether the Council has the financial capacity to maintain good quality assets for the community over the next decade.

The plan covers road, kerb and channel, bridge and culverts, storm water drainage, buildings and open space facilities including recreation, playgrounds pools and sporting venues valued at around $440 million.

As the table below indicates more than half the assets, except for buildings, are rated as being in only fair or poor condition.

The Asset Plan has a ten-year outlook and addresses how the Council proposes to manage its portfolio of assets to ensure they are developed, renewed or maintained to facilitate the delivery of Council services. It is strongly linked to the Council Plan and Financial Plan and is critical to the service planning and delivery along with the efficient use of available resources.

“Good asset management is the cornerstone to good decision making and sustainability. This is a chance for the community to see a snapshot of Council’s infrastructure assets and how we will make informed decisions over the next ten years,” said Bradley Thomas, CEO of Council. “We know community assets are very important to residents and ratepayers, so we encourage you to take a look at the draft plan and provide feedback,” he said.

Making sure that rural communities like Hepburn have good quality assets like roads, bridges, buildings, recreational facilities and footpaths is a critical role for local government. Unfortunately, as a recent Victorian parliamentary review found, small rural Council’s like Hepburn do not have sufficient financial resources to manage this responsibility properly.

Hepburn Shire was identified as one of the least sustainable councils and the review suggested that one option to improve services and facilities for Hepburn would be an amalgamation to form a Greater Ballarat Council. But this option is unlikely to be popular with either Ballarat or Hepburn residents.

Other recommendations included a new funding model for rural shires that makes them viable, a review of Council responsibilities to align their financial capacity with their responsibilities, and improvements in their efficiency through strategies like sharing services with other Councils.

Under arrangements negotiated when the Goods and Services Tax was introduced by the Howard Government, the Commonwealth is responsible for providing the States with Financial Assistance Grants for Local Government. These grants are currently too low to meet the needs of small rural shires to adequately cover their responsibilities.

The draft asset management plan is silent on a number of important issues. The plan does not set targets for the percentage of assets that should meet good or very good standards. It does not provide an analysis of gaps and priorities for new assets that are likely to be needed in the next 10 years.  It does not provide any commentary on whether the comparatively low levels of expenditure on operating, renewal and maintenance will be adequate over the next decade. Nor does it discuss whether Council has sufficient financial capacity to adequately maintain its assets for future generations.

The parliamentary review recommended that it was important for Councils to manage community expectations. It will be important that following consultation with the community, the final plan makes it clear  whether the Council has the capacity to acquire, maintain and operate good quality assets to meet the projected needs for the community over the next 10 years.

The plan is available for inspection at Council offices in Daylesford, Clunes, Creswick and Trentham, the Daylesford Library and the Participate Hepburn website at https://participate.hepburn.vic.gov.au.

Submissions are due to Council by 5pm on Tuesday 10 May.

Address your submission to the Chief Executive Officer, Hepburn Shire Council, PO Box 21, Daylesford VIC 3460, email to shire@hepburn.vic.gov.au