Notes to and forming part of the financial statements - Glenorchy City ...

GENERAL MANAGER’S REPORT
This is the last annual report that I will be
making as General Manager of Glenorchy City
Council, as I will be retiring at the beginning of
July 2011. It has been a privilege to work with
the Council, my Council staff and the people of
Glenorchy over the last 10 years.
After the huge disruption in 2009/10 from
the State Government’s water and sewerage
reforms, in 2010/11 the Council was able to
focus much more on the provision of the nonwater
and sewerage programs and services
that it provides to its community. These are
summarised in the annual report.
The water and sewerage reforms have
continued to have a very severe impact on
Council’s financial situation, with the Council
still having to deal with significant net revenue
losses as a direct result of the reforms. This
is set to continue into the future, with the
quantum of dividend revenue from Southern
Water being the most significant financial risk
facing the Council.
Page 6 Glenorchy City Council Annual Report 2010/11
Before the water and sewerage reforms,
Council had put in place a set of strategic
financial policies to significantly increase the
amount of money spent on infrastructure
maintenance, renewal and replacement over
a 6 year period. The water and sewerage
reforms set this process back, and in 2009/10
Council undertook a major review of what
needed to occur to ensure its ongoing
financial sustainability. The very detailed
and comprehensive strategic financial model
developed in 2009/10 has continued to be
used in 2010/11 as a major tool to enable the
Council to forecast its financial situation 10
years out.
The Auditor-General has repeatedly
emphasised the need to move towards breakeven
or surplus budgets if Glenorchy City
Council is to be sustainable into the future.
It is clear that the imbalance between our
revenue and the costs of providing the current
range of programs and services needs to be
addressed, despite the Council over the last
few years exploring ways to further reduce
our costs, improve our efficiency and obtain
revenue from other sources. Unless additional
efficiencies can be identified, or services
are reviewed to see if some of them can be
stopped, or some service levels are reduced it
is clear that the Council’s general rates revenue
will remain too low and that, as a responsible
Council, Glenorchy will need to continue to
increase revenue above inflation for a number
of years to ensure that the Council is financially
sustainable into the future.
Frank Pearce
General Manager