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CfMP submission to proposed MPSC 2020/21 budget

Posted by Alina Tooley | May 7, 2020

CfMP submission to proposed MPSC 2020/21 budget

The Committee for Mornington Peninsula (CfMP) appreciates the opportunity to make a submission in relation to the proposed 2020/2021 Mornington Peninsula Shire (MPS) Budget.

These are tumultuous times and financial forecasting will unavoidably be uncertain and risk conveying some false precision at this time as circumstances and learnings continue to unfold. What is known is that the COVID-19 pandemic has already had a significant impact on Council’s operations and resource allocation from the Council measures taken to date.

The CfMP continues to urge Council to take additional steps to buffer the local economy and the livelihoods that depend on it from the most severe impacts. The CfMP recommends that the budget process be delayed, and the budget be reshaped on what is already known in terms of COVID-19 pandemic impacts. We would encourage a ‘retooling’ of the Budget to allow for further measures related to the crisis, abatement of the severe economic and social impacts and the development of a local economy recovery action plan.

The CfMP has commissioned some economic modelling that will be completed in the coming weeks. Early findings point to severe impacts on our community, local businesses and employment arising from the nature and structure of our economy and consumer and investor responses to the pandemic. Key economic and employment strengths of the Peninsula and leading sectors of future opportunities, are worryingly, where the most severe adverse consequences are anticipated.

It is noted that Local Government Minister Adem Somyurek recently announced an extension to the deadline for 2020/21 Council budget adoption to 31 August, and for annual reports a due date of 30 November. The CfMP would encourage Council to utilise the extension to review the MPS budget and reshape it to include measures for responding to COVID-19 and greater support for the local economy.

In terms of the budget as proposed, the CfMP notes an encouraging ‘hold’ on employee costs as a percentage of total income of 34.4% in 2019-20 to a proposed 34.8% for the coming year. Overall operational costs as a proportion of total income appear to step up from 82.3% (2019/20) to 85.3% for the budget year. The reasons for the substantial increase in the IT, consultancy and contractor costs are not apparent from the material available.

However, CfMP encourages Council to provide clarification on the scope, levels of service, project elements and input costs, and how these expenditures may be impacted by the COVID-19 economic consequences.

The CfMP raises these ratios, as they significantly impact on the Council’s scope to fund additional capitals works while maintaining a manageable level of borrowings. The Somerville Recreation Centre and commencement of the Rosebud Aquatic Centre contributed to very substantial up-ticks in capital works in recent years and make year-on-year comparisons of the underlying capital works program over time quite difficult. Capital works for 2019/20 is recorded at 23.57% of total revenue. The proposed budget foreshadows a capital works program at 17.3% of total revenue, considerably greater than the out-years published in the budget papers (14.6% for 2021/22 & 15.47% for 21/22). Many of the projects foreshadowed for the 2020/21 capital works budget appear to be well within the capacity of local contractors and can play an important role in softening the anticipated downturn for local construction firms and contractors. CfMP would encourage more of these projects and a suitable local procurement policy for these projects.

CfMP member feedback suggests that the substantial investment in the signature Somerville and Rosebud major projects has had an impact on new construction, maintenance and improvement works at other leisure and recreation facilities and locations. The CfMP believes that the local construction industry, one of the largest industries on the Mornington Peninsula, could benefit significantly from continued expenditure on local capital works during the recovery phase of the COVID-19 pandemic.

Economic growth is going to be crucial for the Mornington Peninsula in the recovery phase from COVID-19. The CfMP has previously provided MPS with the report “Industrial Land Analysis”. Ensuring an adequate supply and improving access to developable industrial land in the Mornington Peninsula that accommodates forecast demand and technology-led opportunities and meets the desired location and quality requirements of industry, is critical to ongoing economic vitality and growth for the region. The CfMP would like to see a commitment in the budget to progress this project as a matter of urgency given the COVID-19 pandemic and the need for projects that will stimulate local economic activity, employment renewal and support investment in the recovery phase.

The CFMP are aware that the federal Infrastructure Minister Michael McCormack sent a letter to all 537 councils seeking information on projects that could be bought forward as part of a federal stimulus program to fast-track spending on road projects in a bid to save jobs. The CfMP seek a copy of the MPS response that has been provided in relation to this.

In the 2019 Local Government Community Satisfaction Survey a number of service areas were identified where the MPS should focus in terms of improving performance and public perception, particularly:

It was identified areas warranting Council attention where current MPS performance levels are low and remain significantly lower than the State-wide and Interface group council averages. These areas included planning and building permits (index score of 45) and town planning policy (index score of 50). The CfMP is keen to understand what has occurred since the survey results to address these issues of underperformance and also to understand if there are any specific measures that respond to these assessments brought forward for consideration in the proposed budget.

On the Budget income side, even greater than the foreshadowed increase in the waste management charge (15.49%) and Service rates and charges (16.17%) is a projected increase of 18.84% increase in infringement and costs revenue. As the CfMP has previously brought to the attention of MPS Officers, the apparent combative and adversarial approach to planning and land- use enforcement in recent times has caused devastating costs and consequences for many local business owners.

Many examples of great hardship contributed too by overzealous enforcement are clearly at odds with the more collaborative, problem-solving and educative approach the CfMP has been advocating. CfMP has consistently advocated for a ‘facilitation/compliance concierge’ capacity to assist business owners and applicants navigate the Shire’s comparatively complex, burdensome and ‘particular’ approvals and permissions regime.

On the expenditure side, the proposed budget foreshadows an increase in staff from 712.5 FTE to 727.7 FTE. The CfMP is keen to learn if the ‘facilitation/compliance concierge’ capacity is contained within this staffing increase or is able to be achieved by a reassignment of the Planning & Building 100.1 FTE, particularly from the 25 enforcement personnel.

The CfMP contends that; without additional cost, an adjustment in disposition, a more thoughtful use of enforcement discretion and preparedness to work with local businesses and employers, will be even more important to support local prosperity and the economic and livelihoods recovery phase of the COVID-19 pandemic.

The CfMP is pleased the Council continues to assert ‘Our Prosperity’ as one of the four strategic themes that underpin the strategic framework for the Council Plan 2017-2021.

While not diminishing the other three (3) strategic themes of ‘Our Place’, ‘Our Connectivity’ and ‘Our Wellbeing’, the CfMP is concerned that the ‘Our Prosperity’ theme continues to attract a meagre share of Council resources. The proposed budget commits less than 1% (0.939%) of total services outlays to ‘Our Prosperity’ programs or just over half of 1% (0.664%) of total income.

The CfMP believes this to be a gross underinvestment in pursuing a key objective that goes to the capacity of the municipality to generate the employment and economic activity needed to sustain livelihoods, living standards, services and the quality of life for the Peninsula community.

The CfMP contends that more demonstrable action is required to support, encourage and enable the local business community so as to foster employment and create the right conditions for investment and sustainable growth. This need should be unquestionably be part of ‘the business’ of Council.

The proposed Budget provides for no new initiative, program or priority project to advance the stated ‘Our prosperity’ objectives. This is even more concerning in the COVID-19 recovery context, given the disproportionate harm the pandemic will cause our economy and employment opportunities, compared to other comparable regions which will compete for and invest in recovery.

The CfMP has proposed a number of specific actions we believe the Council should take to support business and employment preservation during the pandemic response and containment phase:

Council is urged to make Budget provisions for: