The Holdfast Bay Residents Alliance Inc. (HBRA) has been formed from the amalgamation of the former Glenelg and Southern Holdfast Bay Residents Associations to provide representation and an advocacy service on behalf of all Residents right across Holdfast Bay.
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COMMUNITY MEANS UNITY -- The goal of HBRA is to unite our community focus for the whole of Holdfast Bay (merged from Brighton and Glenelg Councils in 1997). This new Alliance can provide information and advocacy and ensure all residents are represented uniformly and have an individual voice on the local government issues that affect our community.
In recent times, there have been several instances of unpopular Council decisions, insufficient information, and inadequate community consultation that could have been avoided if a group like HBRA had existed to ensure appropriate representation of the community interests and concerns.
An information and advocacy group such as HBRA ensures we can work productively and constructively with our Council and other community organisations, rather than simply react in anger once a decision has been made.
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Holdfast Bay Business Plan 2014-15 - Below is a copy of HBRA's Submission to Council as part of the consultation process.
23 May 2014
Chief Executive Officer
The City of Holdfast Bay
PO Box 19
BRIGHTON SA 5048
SUBMISSION RE 2014-15 ANNUAL BUSINESS PLAN
Holdfast Bay Residents Alliance Inc. (HBRA) is an incorporated association formed on the amalgamation
of the Glenelg Residents Association Inc. and the Southern Holdfast Bay Residents Association Inc. The
goal of HBRA is to unite our community focus for the whole of Holdfast Bay (merged from Brighton and
Glenelg Councils in 1997).
HBRA makes this submission regarding the Holdfast Bay 2014-15 Annual Business Plan on behalf of
its members who are represented right across the breadth of the City of Holdfast Bay Council area. This
submission is made in the spirit of being constructive and at the same time representing the concerns of
the Holdfast Bay rate paying community in general.
1 Prudential Management
HBRA is concerned that the prudential guidelines approved by elected members and adopted by Council
have not been followed in the 2014-15 Annual Business Plan. There are many examples of Government
and Corporate failures where due regard for established prudential guidelines have been ignored by those
who have been elected by taxpayers or shareholders to oversee the financial affairs of the organisation.
Financial failures frequently are preceded by attempts to achieve outcomes that overstretch the
organisation’s financial capacity, operating capabilities and most importantly, formally approved
guidelines for financial prudence.
2 Debt Management
In the 2015 budget, it is Council’s intention to increase debt beyond the existing 35% planned prudential
level to 44%. For 2015/2016 the expected level is further deteriorated to 60%. HBRA considers this
approach as seriously lacking credibility.
HBRA believes that Council should respect its own approved net financial liabilities ratio of 35% at all
times. In essence, this means that Council would effectively be managing its operations in line with
carefully planned objectives.
It is noted (page 39) that the projected Long-term Liabilities at 30 June 2015 will be $13,024,927.
Council has not disclosed the purpose of these borrowings, the interest rate of the loans, or the date of
each loan. It would be of great concern if any of this amount related to borrowings to fund operating
deficits or other non-capital expenditure, as distinct from borrowings for inter-generational infrastructure
to provide a long term benefit to the community.
Another indication of cash flow concerns is the lack of liquidity disclosed in the Balance Sheet. For 30
June 2015 Council expects Current Liabilities of $10,874,997 with Current Assets of $4,607,013 to meet
those liabilities. At 30 June 2009, Council was in a far better position with $7,334,945 of Current Assets
to meet $4,814,114 of Current Liabilities. The reasons for this deterioration are not identified or
HBRA recognises the role of the External Auditor to form an opinion on whether the Financial Report of
Council gives a true and fair view of Council’s financial position at balance date and of its performance
for the year then ended.
It is not a Management Audit. No external opinion is given on the management of the resources available
to Council to perform its services, manage its assets, liabilities or staff. The external auditor has no role
in providing advice or strategic foresight to Council including any disposal of Council assets.
Corporate Governance and Financial Prudence is a responsibility of Council and elected members. This is
an area that HBRA believes should be strengthened by stronger control by Council and the setting and
keeping management performance at best practice key performance indicators.
4 Proposed Operating Losses
HBRA is concerned that there is a corporate presentation and implied acceptance of proposed operating
losses for the year ahead. Council has proposed this deficit approach in the Budget as being acceptable to
ratepayers. This is despite Council’s relatively healthy asset holding of community assets and land.
The potential disposal of a number of community assets is a short sighted cash flow technique to
counteract the inability of Council to operate at a surplus. Community assets belong to the people of
Holdfast Bay, and the disposal of those community assets for current short-term benefits, or at a loss, is
resented by the ratepayers who provided the funds in the first place. Despite prescribed community
consultation and the consequent orderly steps required to be taken by Council to arrange for the disposal
of these assets, the majority of Holdfast Bay residents have no idea of the intentions or actions of Council
in disposing of these assets. HBRA is opposed to the disposal of community assets for the purposes of
covering off operational losses and plugging cash flow deficiencies. Disposal of community land should
be an act of last resort.
The mantra of Local Government has for many years been “We will have to cut services to achieve a
budget surplus”. That is the soft option, indeed, a very soft option. The hard option is to manage all
operational costs more efficiently to produce the same services output at a lower cost. This has been the
scenario in the private sector for many years, as well as for Government employees. There is every
indication that the economic situation is not going to improve in the short term. A full review of the
operations of Council is not possible because Council has not put on display as part of the budget
evaluation process either of the following documents:
- The Draft Operational Budget, alternatively the Activity Budget, alternatively the Draft Budget
- Draft Labour Budget, or the Salary Register for the budget period.
The issue is not to cut services in general, or any specific service. The issue is that Council undertake a
rigorous assessment of every service to identify the cost savings which are possible without diminishing
the level of services.
The basis for the concern by HBRA, and which, with respect, elected members should also be concerned
is the following between the 2009 and 2015 Draft Budgets:
- Rate revenue up $8,089,774 to $30,229,324 which is up 37%
- Employee costs up $19,608,840 to $29,715,080 which is up 194%.
Holdfast Bay is now in the position where virtually all the revenue from ratepayers is expended on
5 Rate Revenue
HBRA acknowledges the attempts by Council to keep rates as low as possible in the coming year.
However, in this plan the rate revenue, and other various incomes, is barely enough to cover outgoings.
Despite the number of projects to which Council is financially committed to in the coming financial year,
HBRA believes that, at a minimum, a modest surplus of at least 0.5% of municipal assets should be
budgeted. There are also many financial contingencies related to current projects and litigations which
Council has not budgeted for. HBRA believes that these could be considerable and should be allowed for,
and declared now in the budget for 2014-15. Additionally, HBRA believes that only approved grant
monies should be included in the Business Plan financials for next year and that presumed grant money
receipts, shown after the surplus/deficiency line, should be more clearly explained.
HBRA believes that the change of Federal Government may lead to severe financial austerity measures in
the coming year which may affect the certainty for Local Government grant funding. Council should not
presume that these monies will be automatically available. Further, the grants should be clearly identified
as either re-current revenue grants or as capital and infrastructure grants.
HBRA appreciates the opportunity to make comment on the proposed 2014-15 Annual Business Plan for
the City of Holdfast Bay. We do so in the understanding that Council’s intent is to work more closely
with its community. However, HBRA perceives that there is a considerable communication gap between
constituents, Council Administration and its elected members. HBRA believes that much more work
needs to be done on behalf of Council to improve the relationship between Council and the community it
serves. We feel a community Budget Forum like the one being held by the City of West Torrens on 29
May 2014 would assist the communication and consultation process.
In this regard HBRA has established an issues register on its website which gathers the contributions of
concerns and comments from the HBRA membership. These issues are set out in the format of your
Council Business Plan Structure, highlighting each of Council’s four main critical objectives. No one
from Council has contacted HBRA in regard to these issues raised in considering and formulating
Council’s 2014-15 Annual Business Plan.
Council response to HBRA 2014-15 Annual Business Plan
CEO of Holdfast Bay Council provided a prompt response to HBRA's submission regarding the 2014-2015 Annual Business Plan on 29 May 2014 which has been circulated to members.
To obtain a copy of this response please email HBRA a on email@example.com and we will forward a copy of the response to you.