Council Adopts Financial Management Strategy

Published on 27 April 2021

Council adopted the Financial Management Strategy 2031 (FMS) at its Council Meeting this evening.

The FMS is an important component of the Council’s financial planning process as it underpins financial sustainability, whilst meeting the needs and expectations of the community in delivering the Council’s strategic objectives.

Burnie City Council Mayor Steve Kons said “The FMS seeks to inform the community how Council intends to govern its financial decisions both now and into the future.”

Burnie is a regional centre and Council provides a broad range of services relative to its community and broader region. As such, rates in Burnie have for a number of years been higher than the state average.

Over the past four years Council has been actively working to decrease the rates burden to the community, providing rates reductions of 1% per annum from 2017-18 to 2019-20 and a 0% rate increase in 2020-21.

While the rate reduction strategy has been successful in achieving the intended aim of keeping the rates per capita to within 15% above the state average, it has had a negative impact on the overall financial sustainability for the Council. Coupled with expensive long-term service delivery challenges and the impacts of COVID-19, Council has experienced significant operational deficits in the 2018-19 to 2020-21 years and projects a further deficit of $1.330m in 2021-22.

Council recognises that as a manager of public funds and as steward of Council’s financial sustainability that ongoing deficits are not acceptable into the future. Modelling has shown that if Council were to not intervene, the Council is likely to incur operational deficits in the order of $16.4m over the next ten years.

Council has been considering a number of measures to achieve cost reductions through the introduction of more effective methods of service delivery. The anticipated operational savings targets, totaling $1.500m in the first two years, have been subsequently factored into the FMS. Essentially by identifying these savings, the Council has balanced the financial impact to ratepayers by keeping the rates burden to a minimum with the model reflecting rate increases of CPI plus 1% for both the 2021-22 and 2022-23 financial years.

From 2023-24 onward, Council projects that the rate burden be an increase of CPI only.

If not for the significant savings that have been identified by the Council, the likely rate rise for the next two year period would otherwise have been 5% per annum, in order to achieve the same financial result.

“The unanimous support, as shown tonight, puts the Council in good stead to achieve the outcomes detailed in the FMS. It is a demonstration of Council’s commitment to keeping the cost of services to the community as low as possible whilst maintaining financial sustainability and ensuring the ongoing ability to deliver services to the community.”