FAQ

• The LTFP is a financial model that aims to achieve long term financial sustainability using the key financial indicators and benchmarks for guidance projected over time
• The LTFP provides a financial forecast for next 10 years using inputs from the Strategic Plan, Asset Management Plans and other key Strategies
• The LTFP is based on continuing existing service levels including infrastructure renewal and upgrade.
• The LTFP is regularly updated to account for any changes

The Local Government Act 1999 requires Council to prepare a Long Term Financial Plan (LTFP) as part of its Strategic Management Plans. Council considers that its Long Term Financial Plan (LTFP) is a fundamental instrument of accountability and provides projections for Council’s planned activities over a ten year timeframe.

It ensures that financial resources are deployed in areas that align with Council’s Strategic Management Plans, are affordable and supported within the Council’s LTFP.

The LTFP provides Council with a decision making tool that ensures there is an understanding of the impact of decisions made today on future sustainability. This means ensuring the cost effective delivery of works and services, and the appropriate maintenance and renewal of our asset base in a financially sustainable manner.

The LTFP contains estimated financials over a ten year period and includes estimates of the key ratios which are operating surplus, net financial liabilities and asset renewal funding ratios. This projection of estimates creates a model that illustrates the expected long term financial performance of the Council, and hence whether financial sustainability is being achieved.

The model is a complex and fluid document, continually reviewed, modified and refined as new information is discovered. This is usually at each quarterly Budget Review and during the construction and adoption of Council’s Annual Budget.

The plan does not provide specific detail about individual works or services, as this level of detail is addressed in the Annual Business Plan and Budget.

How does Council prepare the plan?

The 10 year LTFP is prepared using a number of assumptions about projected rate income, projected fees, charges and grants and also includes assumptions about future operational and capital expenditure. As the plans are derived from an estimate of future performance, the actual results are likely to vary from the information contained in this LTFP.

Calculating a sustainable Long Term Financial Plan

The LTFP calculations are based on a complex model which is built on a very large range of variables applied to its performance in recent years. In order to use it to guide each year’s budget setting process, the key variables have been divided into two groups:

• Controllable variables – items that Council and or / Council's Administration can control such as service levels, capital expenditure, rate increases and wage increases
• Non-controllable variables – items outside Council’s control, such as interest rates, inflation and economic growth (eg. residential development, new businesses, etc) as well as Government fees and charges / imposts such as the Solid Waste Levy.

For controllable variables, Council is able to change different variables up or down to see what effect they have on financial performance. The long term effects of each decision can then be assessed.

For non-controllable variables, the plan uses reasonable long term estimates which do not change (except to update them at the beginning of each budget cycle). In this way the impact of different choices about the controllable variables can be better assessed.

For example: Inflation which is measured by the Local Government Price Index (LGPI) for Councils has fluctuated substantially in recent years. Because inflation works differently on different elements of Council’s income and expense it can easily distort the LTFP, especially in later years. If the distortion negatively impacted the LTFP, Council could assess which controllable variables could be adjusted to keep the plan sustainable.

You can Have Your Say by:

1. Preferably using the online feedback form
2. Sending an email to engage@ahc.sa.gov.au
3. Writing a letter to Community Engagement Coordinator 63 Mount Barker Road, Stirling SA 5152
4. Phoning 8408 0400
5. Collecting a hardcopy information sheet and feedback form from any Council Service Centre or Library at Stirling, Gumeracha or Woodside and return to the customer service centre, email or postal address as indicated above.

Opportunity to provide feedback closes 4pm, Tuesday 22 March 2022.

A Council’s long-term financial performance and position is sustainable where planned long-term service and infrastructure levels and standards are met without unplanned increases in rates or disruptive cuts to services.

It is measured by:

• Key financial ratios
• Driven by agreed indices and assumptions
• More than 1 year’s results (10+ years)
• Reported in our Long Term Financial Plan (LTFP)

Council is looking to make $830k of saving initiatives:  

• The inclusion of $600k in administrative savings (ongoing). This is in addition to the $650k of ongoing savings captured in the last LTFP review
• The inclusion of service improvement changes that will achieve savings of $230k in 2023-24 and be ongoing