A Council’s budget dilemma

Any organisation must set a sound and defensible budget. This must be founded upon a prescription comprising a set of assumptions, the integrity of which, depends upon their rationale and the supporting evidence.

In a New Zealand Council context, TLA’s long-term financial plans rarely fit this prescription. Year after year, cost plus, status quo or status quo + budget assumptions survive with very little debate.

Recently though, to meet the covid-19 financial challenges, many Councils are being asked to re-examine their budget process and content. Budget assumptions in place are being scrutinised in search of the evidence that they are based on sound principles operating under optimal conditions.

Targets are being set to reach best in class or at least improved levels of performance. Better performance is measured against benchmarked evidence which can be drawn from what other “peer” Council’s have been able to achieve.

For example: If “Council A” has run consistently much lower expenditures per ratepayer on say Library overheads including payroll, then a peer Council B might set a similar benchmark as a desirable future budget outcome. Field research into library operations and staff levels would naturally follow and “the coming year’s” planned actual expenditure budgets will adjust accordingly.

If this case study seems all too hard for some, then this comes as no surprise. Many Councils do not have the economic means and the tools by which such a budget process can be run. Here lies their dilemma. How then to proceed?

 Councils need the right tools

It is a tall order for any single Council to satisfactorily address themselves these budget process requirements. The resources required to set up a benchmark framework of Council performance are prohibitive for any single Council to attempt. Starting from scratch is difficult, with merely just alone (say); the collection of the necessary underlying and relevant evidence of a Council’s existing …. let alone, its future measures.

Councils need a ready to run benchmark package, one which provides reliable relevant evidence-based data-numbers to set up a measurement process.

The method cprlifesaver has chosen for best results, to make Council-to- Council comparisons thus deriving benchmarks which are are reported on to this level of detail: :

• Reports for all NZ TLA councils of a comparable size & character;
• Presented on a “per ratepayer” basis … used to normalise all comparisons and;
• Coupled to client-driven judgments and adjustments made after making allowance for Council’s experiencing:
  • similar “difficulty” of service delivery factors;
  • including allowances for varying population densities;
  • distances of roading networks;
  • and varying levels of service and so on.

cprlifesaver Version II 2021 … is a little gem … that provides the answers

The cprlifesaver performance reporting reports and databases meet all Council budget setting and performance measurement needs. See www.cprlifesaver.co.nz

Improvements have been made this year, notably, Version II 2021 adds five years of comparative data for all 75 of the cprlifesaver economic and financial measures.

The new visual-graphical presentation of these time series, is a powerful readily interpreted presentation suited to annual plan and other Council public documentation.

Council Revenues, Expenditures, Debt, Payroll, Rates and Charges plus a number of Composite Indices for Difficulty and Affordability of service delivery all within a comparative context, deliver the essential benchmarks needed for budget-setting.

Other improvements have been made, in particular, the ease of access to your own Council’s findings.

Drop down web -based menus for all of your Councils data are enabled on your mobile and other devices and can quickly be used to answer media and ratepayer’s difficult questions … like the usual “your rates are too high”.

Your verifiable answers are backed … taken from, credible, independent, audited, official and reliable data.  

Quite a package … and all at a very modest cost.

Subscription details are at Subscribe – Kauri Glen (cprlifesaver.co.nz)

All enquiries to Larry Mitchell Phone:  0274 792 328

657 words 24/01/2021