Using community consultation to determine affordable and acceptable levels of service

By intouch posted 27 January 2016 22:29

  

More than ever before, councils are being called on to do more with less and find ways to engage their communities in a discussion about acceptable service levels.


Many local government areas are facing (sometimes rapidly) growing populations, requiring bigger and better public infrastructure. In addition, there is an ongoing need for asset maintenance and renewal of existing assets. The Australian Local Government Association’s 2015 State of the Assets Report, prepared by asset management consultants JRA, estimates that the gross replacement value of local government assets is $438 billion and that approximately 11%, or $47 billion, of these assets are in poor or very poor condition.

With NSW councils facing amalgamations under Fit for the Future and a rate cap of 2.5% set to be imposed on Victoria’s councils during the upcoming financial year, defining acceptable and affordable levels of service (LoS) within the community has never been more vital.

In this environment, community consultation has been flagged as “the new black”. Recognising its importance, IPWEA offered a two-part webinar titled Improve Your Community Engagement, presented by JRA and informed by IPWEA’s publication Practice Note 8: Levels of Service and Community Engagement. 

Webinar presenter, JRA Associate Steve Verity points to the Blue Mountains City Council’s (BMCC) Resourcing Our Future program as a successful model for community engagement, which resulted in almost 80% of the community supporting a rate variation above the rate cap, and a majority of these supporting the highest variation option.

BMCC’s need for community consultation

BMCC Group Manager, Integrated Planning and Finance Rosemary Dillon explains that in 2014, it was estimated 21% of the city’s $1 billion worth of built assets were in poor condition and that this would likely increase to 37% by 2024 without corrective action and a rebalancing of service levels.

In 2015, BMCC applied to the NSW arbitrator, the Independent Pricing and Regulatory Tribunal (IPART) for a rate variation. The council made its application to IPART with a view to securing the funding the city required to be financially sustainable, reverse the decline in the city’s $1 billion worth of built infrastructure and be Fit for the Future.

The application was informed by comprehensive engagement with community on required levels of service which resulted in the majority of ratepayers opting for a rate increase to improve, rather than reduce or merely maintain, existing service levels.

Dillon outlines the actions the council took to effectively consult with its community.

What did the community consultation process for Resourcing Our Future involve?

The proposed rate variation formed part of the Council’s Six Strategies for Financial Sustainability, adopted in 2012, namely:

1.Avoid Shocks;
2.Balance the Budget;
3.Manage Borrowings Responsibly;
4.Increase Income;
5.Review and Adjust Services, and
6.Increase Advocacy and Partnerships.

Under Strategy 4: Increase Income, a carefully planned two-stage approach to phasing in special variations was developed in close consultation with community, taking into consideration capacity and willingness to pay additional rates. This approach to phased variations was also supported by a major review and reform of the city’s complex rating structure, so that it met with requirements of the Local Government Act to be simple, fair and broadly uniform, and provided a better foundation for community engagement on options for achieving affordable and acceptable LoS, including possible rate increases.

Defining LoS – Service Dashboards

In order to effectively engage the community on options for achieving acceptable and affordable LoS, it was essential that the council was able to communicate the impact of different revenue scenarios (with and without rate variations) on LoS able to be provided. In 2012 and 2013, working in partnership with and assisted by JRA, a methodology for defining LoS was developed that resulted in a Service Dashboard tool that integrated the council’s financial, asset, service and risk management planning (supported by NAMS.PLUS).

The Dashboard also showed the 10-year impact of different revenue scenarios on service levels – conveyed through text, pictures, figures and diagrams. This work was supported by the council having developed a consistent approach to the way “services” were defined across the business, having linked service aims to the Community Strategic Plan objectives and recognising that assets were a subset of particular services and the importance of engaging community on services and service levels, rather than just on particular assets.

Initially, the methodology focused on assessing built and natural “asset condition” under different revenue scenarios. In 2014 the definition of LoS used in the Service Dashboards was broadened beyond asset condition to also include:

  • Service quality – community or customer satisfaction;
  • Service function – i.e. fitness of the service to fulfil its purpose; and
  • Service capacity/ utilisation. 

Numerous workshops were held with staff from each external service delivery area to assess how best to measure current and future service levels under different financial scenarios relative to quality, condition, function, capacity and utilisation of services and assets. A range of community and technical performance measures underpinned this assessment. In many cases quality data was not available to inform the work (due to resource constraints) and it was critical that an assessment of “data confidence” was made and that this was included for each service area presented in the Dashboards.

The Service Dashboards were developed as a tool to ensure the council achieves its goal of long-term financial sustainability as it plans the provision of services to the community and the necessary maintenance and renewal of the assets that support services. They present a snapshot view of the council’s current and projected position relative to affordable LoS at a given time, based on different financial scenarios and the best available data and information.

In 2014 the council updated its Service Dashboards: Summary Service and Asset Plans. This document was extensively drawn upon to support the Resourcing Our Future community engagement process. From a governance perspective, it provided the required evidence base to support the development and framing of options for Resourcing Our Future in a transparent manner. The 2014 Service Dashboard detailed how the three options for Resourcing Our Future impacted on service levels, in particular on the condition, quality, function and capacity of services – including built and natural assets. The information was presented against the six Key Directions of the Councils Community Strategic Plan. Services provided by the council in support of each key direction were summarised with the following information:

  • Service aims and activities and how the service links with the Community Strategic Plan (Sustainable Blue Mountains 2025);
  • Assets supporting service delivery and their value;
  • Percentage of total council expenditure on the service and service budget in 2014-2015;
  • Community survey – trend data on satisfaction with service activities;
  • Outline of service risks and proposed mitigating strategies within current funding;
  • 20-year projected summary expenditure required to manage risk and maintain service levels, against the available funding in three different financial scenarios/ options for Resourcing Our Future;
  • Affordable LoS currently and in 10 years time for quality /condition, function and capacity under each of the three funding options

The diagrams below provide a sample of the 2014 Service Dashboards developed in partnership and with the assistance of JRA and informed by NAMs.PLUS data:

Resourcing Our Future consultation


In 2014-2015 the council implemented an extensive engagement process to hear the voice of the community on three alternative options for Resourcing Our Future, two of which included rate increases and one which did not. These options were:

Option 1: Service Levels Improved – included a special rate variation over four years that would provide funding to reverse the decline in the city’s $1 billion worth of built assets from an estimated 21% in poor condition to 17% by 2024. The city’s emergency preparedness and response would be improved, the current capacity of the council to protect and restore the natural environment would be retained, and community services and facilities improved.

Option 2: Service Levels Maintained – included a lesser special rate variation over four years that would stabilise the decline in the city’s built assets, with the proportion in poor condition remaining at an estimated 21% by 2024. The emergency preparedness and response would be maintained, the current capacity of the council to protect and restore the natural environment retained, and community services and facilities maintained, with funding targeted to managing risk and with possible closure of unsafe facilities.

Option 3: Service Levels Reduced – included no special rate variation, rates increase by rate peg only and discontinuation of environment programs previously funded by an expiring special variation. Under this option there would be significant reduction in service levels, with deterioration in our built assets from the current 21% in poor condition to 37% by 2024. The city’s capacity to prepare for and respond to emergencies would be reduced and existing levels of community services and facilities would also be reduced.

Methods of Engagement in 2014

To support the community engagement process, a comprehensive package of information was provided on the council’s website, with hard copies of key documents available for viewing at libraries and the council’s office. The consultation and engagement process included:

  • Public exhibition of updated Integrated Plans over an extended 43 day period, including the Council’s 10-year Resourcing Strategy, a companion document titled Service Dashboards: Summary Service and Asset Plans, and a Supplementary Delivery Program – with all of these documents detailing the impact of the three alternative funding options on service levels overall, and the Service Dashboards detailing the impact on each council service in terms of condition, function and capacity/utilisation;
  • A letter from the Mayor and four-page brochure with cut-off submission strip and reply-paid envelope sent to every ratepayer, making it easy for ratepayers to make a submission on their preferred option relative to service levels and associated possible rate increases. The four page brochure was designed to show in words, pictures and tables the comparative trade-offs, impacts, costs and benefits between the three options for Resourcing Our Future;
  • A rating calculator provided on the Have Your Say - Resourcing Our Future website – allowing residential, business and farmland ratepayers to determine the actual impact of each funding option on their rates themselves or have Council staff do it in their behalf;
  • Comprehensive Information sheets were available online, at the council’s head office and branch libraries at Blackheath, Katoomba, Lawson and Blaxland including: Information Sheet 1: A Better Blue Mountains including rates calculation tables by land value ranges for residential, business and farmland properties; Information Sheet 2: Your Environment Levy; Information Sheet 3: BMCC Cost Savings, Efficiencies and Revenue Initiatives; and Resourcing Our Future Frequently Asked Questions;
  • Three half-page display ads and four public notices in the Blue Mountains Gazette;
  • Business cards with details on how to find more information were provided to Councillors to hand out to members of the community; and
  • An independent firm, IRIS Research, being engaged to implement:
  1. A telephone survey of a statistically representative sample of ratepayers; and
  2. Five three-hour, area-based Community Workshops with a randomly selected cross-section of residents, taking into consideration age, gender and location. These workshops explained the impact of the three options on service levels using information from the Service Dashboards: Summary Service and Asset Plans and obtained feedback from participants on their preferred level of service provision for each service activity area of the council.

What was the outcome of the community consultation?

The overall outcome was majority community support for Option 1: Service Levels Improved. This resulted in a successful special rate variation application to IPART that will provide an additional $30.4 million over the next four years to improve financial sustainability and reverse the decline in the condition of the council’s $1billion worth of built assets, continue environment programs, improve emergency response and recovery and improve community services. Expenditure of special variation funding and all asset works expenditure is now being assessed through a best value business case process introduced as an integral part of the annual planning and budgeting process.

Resourcing Our Future community engagement was highly successful, relative to the scale of response from the broader community – with more than 4,300 public submissions were received and many articles and letters written to the editor in the local newspaper. As shown in the Table below, each method of engagement showed a strong preference for Option 1, and significantly less support for Option 3.

Just under 80% of all submissions supported the council in seeking a special variation to rates. This result was reinforced by the outcome of an independently conducted survey of ratepayers which showed 84.5% support for a special variation, and through the area-based community workshops which indicated 94% support.

The key messages from consultation were that most residents did not want service levels to reduce and they were willing to pay the additional rates for this to be achieved. This had been a consistent community response since consultation began in 2012.

However, there was a strong expectation that the council needs to continue its focus on delivering best value services that meet assessed needs of the community as cost effectively and efficiently as possible.

 Summary of preferred option from each engagement method

OPTION

Public Exhibition Valid Submissions

(n=4,312) 

Independent Telephone Survey of Ratepayers*

(n=504)

Area Community 

Workshops

(n=90)

SUPPORT FOR DIFFERENT OPTIONS (%)

Option 1

Service Levels Improved

54.6%

48.8%

58.3%

Option 2

Service Levels Maintained

23.3%

35.7%

35.7%

Option 3 

Service Levels Reduced

20.4%

15.5%

6.0%

Comments Only

1.7%

-

-

Total

100.0%

100.0%

100.0%

What were the most important considerations BMCC had when entering into Resourcing Our Future and community engagement?

Neutrality
Importantly, the council took a neutral stance on the matter of how best the city could achieve acceptable and affordable LoS within available revenue, into the future.

The council sought to present information on different options objectively, including impact of each option on service levels, and to understand the views of the community on which option they preferred for Resourcing Our Future.

This neutral position taken by the Council was supported and informed by extensive work involving numerous workshops with staff to create a language that conveyed the impact of each funding and revenue scenario on LoS, given the necessity for the council to live responsibly within its means.


Governance framework
To ensure a fair and equitable community engagement process, a comprehensive set of guidelines was developed to provide transparency, accountability and evidence-based outcomes. These guidelines underpinned the requirement for transparent and evidence based options and detailed the roles and responsibilities for staff involved in the process, and provided protocols for determining the validity of submissions received from community (e.g. removing duplicates) and defining enquiry response procedures.

Given the foreseeable controversy that this engagement process could possibly create, it was important to ensure that strong governance processes were in place before consultation began.

Defining LoS in a way that community could understand
One of the most important considerations was how to communicate levels of affordable service under different financial scenarios (with and without rate variation), simply and clearly so that the general community would understand impacts and tradeoffs. Work completed on defining service levels and conveying this in the Service Dashboards tool was possibly the most important element contributing to the outcomes achieved from the engagement process.

Best value service delivery
An important consideration in entering into community engagement was being able to effectively communicate the extensive work undertaken by the council to ensure the service delivery was providing value for money to the community. In particular, it was important that the community understood that the council was committed to achieving cost savings, efficiencies, improved productivity and increased income where possible before considering any options for possibly increasing rates. An information sheet entitled Resourcing Our Future: Cost Savings, Efficiencies and Revenue Initiatives was prepared and made available to community documenting the council’s work to achieve and ensure best value service delivery within available means.

In 2013, the council adopted a Best Value Service Framework to ensure the provision of the best possible range of value for money services. A governance structure was developed with a Best Value Councillor Advisory Group established to lead and guide expenditure to get long term value; identify initiatives and innovations that reduce net long-term operating and maintenance costs; provide guidance and direction on engaging the community on how the council will live within its means; and consider business cases on the most effective service delivery model. This group was supported by an internal staff Best Value Project Control Group.

In addition, the council has been tracking cost savings, efficiency and revenue initiatives in a Continuous Improvement Database since 2010-11.

These initiatives proved invaluable in demonstrating the council’s commitment to reducing costs and delivering services efficiently and effectively. Several case studies showcasing recent cost saving and revenue initiatives were also highlighted in the engagement process.

What were the key lessons the council learned during Resourcing Our Future?

There were many lessons learned during the community consultation on options for Resourcing Our Future and relative to the work on affordable and acceptable LoS. Key lessons included:

  • A key contributor to the overall success of the project was the use of a sound and comprehensive project management approach for such a large, resource intensive and complex project of critical significance to the future financial, social, economic and environmental sustainability of the city;
  • The importance of working closely and under the leadership of the elected council and the executive leadership team (with regular project updates) – agreeing at a high level the approach, principles and timeline for community engagement;
  • The importance of tapping into required external expertise (e.g. JRA & Associates) and internal expertise (multi-disciplinary) at different times to support the project, particularly relative to developing the methodology for defining and then communicating levels of service and the complex integration of financial, asset, service (including levels of service) and risk management data underpinning this work;
  • The value of defining levels of service to create a consistent language which enabled meaningful conversations with community. Clear and consistent definition of council services and the assets supporting particular services was important. Linking levels of service with community values/ objectives of the Community Strategic Plan assisted the conversations with the community;
  • The immense value of the Service Dashboards as a key tool supporting community engagement and more informed, transparent and evidence based consideration and decision making on options for Resourcing Our Future. The development of the Service Dashboards generated a lot of data. Having one central coordinator and appropriate software to manage this data was essential;
  • The value of NAMs in supporting asset planning under different financial scenarios which informed the Service Dashboards;
    The council’s neutral position on which Resourcing Our Future option should be pursued, allowed the community to make their own informed view on which option they supported;
  • The importance of getting buy-in from staff on why the integrated planning work, including development of a consistent language around levels of affordable service, was important and a priority for the future sustainability of the city. Timelines did not always allow for the required investment in this and communicating effectively with staff from many different service areas can be resource and time intensive but on hindsight very important;
  • The success of the project was a reflection on staff from a range of disciplines – particularly finance, assets, corporate planning and communications and different service areas - working together effectively to support integrated planning underpinning the Resourcing Our Future project;
  • The importance of having a comprehensive communications strategy supporting and guiding engagement with different stakeholders; and
  • While the quality of asset and service data informing the work was not always perfect, the project proceeded by using best available data/ professional expertise with transparency on the data confidence – whether it was high, medium or low. This was communicated in the Service Dashboards. 

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