Independent Review of The City of Greater Bendigo - Final Recommendations Report

Independent Review of the City of Greater Bendigo Final Recommendations Report
Reference: 235138 Prepared for: Greater Bendigo City Council Revision: 3 28 June 2013
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Final Recommendations Report

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235138
P:\Advisory\Projects\235138 - City of Greater Bendigo Independent Review\Key Deliverables\Recommendations Report\Final Recommendations Report.docx Greater Bendigo City Council
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Project 235138 File Final Recommendations Report.docx 28 June 2013 Revision 3
Contents
Glossary 1. 2. Report synopsis Introduction 2.1 2.2 2.3 2.4 2.5 2.6 3. Background Review governance Review scope Collection and synthesis of data Report structure Important things you should know about this Report 1 2 7 7 7 7 8 9 9 11 11 11 12 13 15 16 17 18 19 19 19 22 23 25 27 28 28 28 29 9. 8. 7. 6.
5.4 5.5 5.6 5.7 5.8
Financial and budget observations Rating strategy Economic development Benchmarking Conclusion
30 43 45 47 51 52 52 52 52 57 63 66 75 76 76 76 76 79 80 80 83 84 84 84 85 86 87 88 90 93 94 98
Quality of service delivery, management and staffing, structure and innovation 6.1 6.2 6.3 6.4 6.5 6.6 6.7 Context Background Quality of service delivery Organisation structure and delegation Innovation in service and/or structure Benchmarking Conclusion
General themes 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 Introduction and approach Background Governance Communication Council Vision and direction Organisation commitment Councillor commitment Vocal minority
Prioritising capital and major works 7.1 7.2 7.3 7.4 7.5 7.6 7.7 Introduction and approach Background Asset management framework Prioritising capital works Data and systems Cost estimates and project budgets Conclusion
4.
Governance 4.1 4.2 4.3 4.4 4.5 4.6 Introduction and approach The role of Local Government Structure and relationships Setting the councils direction Overarching good governance principles Occupational Health and Safety
Communication and community engagement 8.1 8.2 8.3 8.4 8.5 8.6 8.7 Introduction and approach Background Communication vs. engagement Documentation review Communication practices Community engagement practices Opportunities for improvement
5.
Income and expenditure and economic development 5.1 5.2 5.3 Introduction and approach Background CoGB financial and economic profile
Case Study Introduction
10. Golden Square Pool 11. Edward Street Car Park
12. Grace Kelly Exhibition 13. CoGB office consolidation 14. Recommendations
102 106 114
Figure 27 | Working capital Figure 28 | Indebtedness Ratio Figure 29 | Renewal gap Figure 30 | Facts and Figures relating to Asset Construction and Maintenance as outlined in the 2011-12 Annual Report (page 54) Figure 31 | Facts and Figures relating to Community Engagement for Strategy Development as outlined in the 2011-12 Annual Report (page 68) Figure 33 | CoGB organisation structure as at February 2013. Note that this does not include the Mayor and Councillors who sit above the CEO
50 50 50 53 54 57
Appendices
A1 Stakeholder list A2 Submissions record
Index of Figures
Figure 1 | Meetings undertaken and submissions received during the Review Figure 2 | Meetings undertaken and submissions received during the Review Figure 4 | Media outlets in Bendigo Figure 5 | CoGB strategic planning hierarchy Figure 6 | Council considerations within the decision making process Figure 7 | Local Government Representative Bodies Figure 8 | Council decision-making process Figure 9 | Levels of Councillor Misconduct Figure 10 | Value Add Framework Figure 11 | Key CoGB assets Figure 12 | Three forms of return from council expenses and investment 8 11 15 16 19 20 24 26 29 30 31
Figure 33 | Comparison of employee benefit costs as a percentage of total operating expenditure for 2010-11, 2011-12 and 2012-13 (forecast estimates). 67 Figure 34 | Comparison of average percentage salary increase in current Local Government Enterprise Agreements as at December 2012 67
Figure 3 | General themes as outlined during stakeholder discussions and subsequent investigation 12
Figure 38 | Outline of the structure of strategic visions, objectives and operational KPIs, derived from http:--www.dmreview.com-issues-20040901-1009207-1.html 70 Figure 36 |LGPRF indicator sets and objectives. Figure 37 | Percentage of planning applications completed within statutory requirement of 60 days (2011-12), sourced from Planning Permit Activity Reporting System, DPCD Figure 38 | Percentage of application decisions made under delegation (2011-12), sourced from Planning Permit Activity Reporting System, DPCD Figure 39 | Benefits of effective community engagement Figure 40 | Influences of internal and external communication Figure 41 | Components of community engagement 71 73 73 84 85 85
Figure 13 | Department of Planning and Community Development endorsed financial sustainability principles 33 Figure 14 | Selected CoGB VAGO indicators over a 10 year forecast Figure 15 | Graphical summary of the financial position for CoGB as at 30 June 2012 Figure 16 | Actual and forecast sources of CoGB revenue as sourced from 2012-13 Budget data, 2009-10 through 2014-15 Figure 17 | Top 10 revenue sources (2013-14 financial year) Figure 18 | Cumulative difference from budget for the top 10 revenue streams (2008-09 through 2011-12 financial years) Figure 19 | Expense items aggregate to identify the key areas of cost to CoGB, sourced from the 2013-14 Budget Figure 20 | Top 10 expenditure sources (2013-14 financial year) Figure 21 | Cumulative difference from budget for the top 10 revenue streams (2008-09 through 2011-12 financial years) Figure 22 | Expenditure per head of population Figure 23 | Full-time equivalent staff per 100 population Figure 24 | Return on equity Figure 25 | Employee cost of expenses Figure 26 | Underlying result 34 35 36 37 37 39 40 41 49 49 49 49 50
Figure 42 | Community - Stakeholder Engagement Spectrum (representation of the Public Participation Spectrum developed by IAP2, discussed within the CoGB Community Engagement Guidelines and Toolkit) 86 Figure 43 | Guiding values for CoGB staff and Councillors to support good communication Figure 44 | Themes from Council Plan 2014-2017 Figure 45 | Tools to assist CoGB Councillors and staff in the implementation of community engagement Figure 46 | Staff, CoGBs three-phase approach to community engagement Figure 47 | Examples of community engagement techniques employed by CoGB Figure 48 | Drivers for improved communication at CoGB Figure 49 | Existing Communications and Media Team structure Figure 50 | Recent improvements in communication at CoGB Figure 51 | Golden Square Pool recent events Figure 52 | Proposed Kangaroo Flat Leisure Centre Figure 53 | Edward Street Car Park and Office Complex Figure 54 | Cash result forecast to CoGB over a 30 year period (left) and sensitivity analysis modeling the discount rate and project value to CoGB (right) Figure 55 | ROE and D-E Comparisons for the top 8 Australian listed property companies over the past 5 years Figure 56 | Option 1 construction staging Figure 57 | Option 2 construction staging 87 87 88 89 89 90 90 90 95 96 98 99 99 108 108
Figure 58 | Option 3 construction staging Figure 59 | Hierarchy of policy context
109 110
Table 25 | Unit cost comparison 2008-2009, source Report on public swimming pools in City of Greater Bendigo, Councillors Forum, 31 August, 2009 Table 26 | Bendigo Civic Precinct Feasibility Analysis (2010) delivered accommodation and car parking facilities for each option Table 27 | City of Greater Bendigo office costs ONLY
96 107 109 109
Index of Tables
Table 1 | Council peer analysis referred to throughout this section Table 2 | Revenue sources and relative proportions over the 4 years from 2011-12 to 2014-15, sourced from 2013-14 Budget 29 36
Table 28 | Cost of stages two and three including the total Net Present Value cost
Table 3 | % change by Revenue item over the 5 years from 2009-10 to 2014-15, sourced from 201314 Budget 37 Table 4 | Comparison of rate escalations over the next four fiscal periods Table 5 | Expense items and relative proportions over the four years from 2011-12 to 2014-15, sourced from the 2013-14 Budget 38 40
Table 6 | Expense item rates of change over the 5 years from 2009-10 to 2014-15, sourced from the 2013-14 Budget 40 Table 7 | Historical movements in CPI, Construction Costs and Local Government Cost Index (e) 2012-13 estimates not including the carbon tax 41
Table 8 | Comparison of predicted rate escalations over the 2013-14 to 2016-17 financial years and Treasury Inflation Forecast 43 Table 9 | Historical rate escalations over the 2013-14 to 2016-17 financial years Table 10 | Rate revenue forecast for 2011-12 and 2012-13 Table 11 | Municipal charge over the past three fiscal periods Table 12 | Key customer satisfaction rankings (scores out of 100) compared to Victorian councils, Community Satisfaction Survey Results 2013. Table 13 | Facts and Figures relating Tourism as outlined in the 2011-12 Annual Report (page 63) Table 14 | Facts and Figures relating to Customer Services as outlined in the 2011-12 Annual Report (page 79) Table 15 | Service provision model options (Aged and Disability Services Review, Draft Report for CoGB, HDG Consulting Group, 22 February 2013). Table 16 | Participation statistics for Bendigo Inventor Awards Table 17 | Weekly salary comparison of regional and metropolitan councils based on latest Enterprise Agreement figures (as at December 2012) Table 18 | Categorisation of councils in the National Remuneration survey Report conducted by McArthur. CoGB falls within Category Two. 44 45 45 53 54 55 59 66 67 68
Table 19 | Comparison of CEO and Director salariy packages based on the McArthur 2012-13 Local Government National Remuneration Survey Report. 69 Table 20 | Councillor and Mayor annual allowances as published in the Victoria Government Gazette S360 (26 October, 2012) 69 Table 21 | Comparison of Manager:Staff ratios, 2011-12 annual revenue and population numbers Table 22 | Comparison of organisational structures as at May 2013 Table 23 | Community satisfaction survey results, May-June 2012 Table 24 | Regional comparison of per-capita pool statistics 69 70 87 94
Glossary
Glossary
Throughout the document, various terminologies are used to describe people, places and organisations. For clarity, the following glossary is included. Term Business Unit Definition A functional area of CoGB representing a distinct business function. A Directorate consists of a number of Business Units. The City of Greater Bendigo, the organisation headed by CEO Craig Niemann. It is also referred to as the organisation in this Report. The community within the Greater Bendigo Local Government Area. A reasoned deduction or inference made as a result of an Observation or Finding. A body of people elected to manage the affairs of a municipal district. In this Report, the term refers to other Local Government councils across Victoria and Australia. Greater Bendigo City Council of elected members representing the Bendigo Local Government Area. Group of nine elected Councillors that make up the Greater Bendigo City Council. CoGB staff member in charge of a Directorate. A section of CoGB in charge of a particular activity. CoGB currently has five Directorates: City Futures, Community Wellbeing, Planning and Development, Presentation and Assets, and Organisation Support. Department of Planning and Community Development. Plays a central role in managing Victorias growth and development and building stronger communities. A person not employed by or representing CoGB with an interest or concern in the organisation. An issue or problem that was uncovered during consultation and, to the extent of Aurecons professional judgment, could be verified through analysis of documented evidence supplied to Aurecon (as further defined in section 2.3). These are highlighted throughout the Report. Home and Community Care. Services provided by CoGB and jointly funded by all levels of government that support older people to stay at home and to be more independent in the community An employee of CoGB or Councillor. Independent Review Committee. Committee selected by Council to oversee the governance and process of the Independent Review. The committee consists of three Councillors and three community members.
Term KPI
Definition Key performance indicator. An organisation may use KPIs to evaluate its performance, or to evaluate the success of a particular activity in which it is engaged. Local Government Act. The LGA provides a legal framework for the establishment and administration of councils and defines the purposes and functions of local government. Local Government Professionals. LGPro is the peak body for Local Government professionals in Victoria Local Government Victoria. Unit within DPCD concerned with Local Government in Victoria. CoGB employee in charge of a Business Unit. Municipal Association of Victoria. The legislated peak body for Victorias 79 councils. MAV's role is to advocate local government interests, build the capacity of councils, and promote the role of local government. An issue or problem that was uncovered during consultation with internal and/or external stakeholders but could not be verified through analysis of documented evidence supplied to Aurecon (as further defined in section 2.3). These instances were considered by Aurecon using its professional judgment and are highlighted throughout the Report. Recommendations were formulated by Aurecon based on the Observations and Findings in this Report (as further defined in section 2.3). These are based on professional judgement, given the scope of the Review, time available, discussions and meetings undertaken and documents provided and reviewed. This report being the output-deliverable of the Independent Review of the CoGB conducted by Aurecon. Independent Review of CoGB operations undertaken by Aurecon. Victorian Local Government Association. VLGA advocates for social change and empowers local governments by strengthening their capacity to engage with their communities
LGA
CoGB
LGPro LGV Manager
Community Conclusion
council
MAV
Council Councillors Director
Observation
Directorate
DPCD
Recommendation
external stakeholder
Report Review
Finding
VLGA
HACC
internal stakeholder
IRC
Project 235138 File Final Recommendations Report.docx 28 June 2013 Revision 3 Page 1
Report synopsis
1. Report synopsis
The role of Local Government in Australia is highly complex, often not well understood, and most importantly, has changed significantly in recent decades.
This Report Synopsis provides a high level introduction to the Independent Review of the City of Greater Bendigo and the resulting Final Recommendations Report (the Report). This Report Synopsis provides an insight and thematic summary of the full Report to enable readers to quickly develop a meaningful understanding of the Independent Review process and aid readers in appreciating the context and analysis provided in the Report. Whilst this Report Synopsis provides the reader with a comprehensive overview of the Independent Review process, readers are encouraged to read and refer to the comprehensive Report. All terms used in this Report Synopsis are consistent with the definitions provided in the Glossary of the Report
1.2
Structure of the Final Recommendations Report
The Report structure evolved during the course of the Independent Review (Review) process and was formalised in consultation with the Independent Review Committee (IRC). The primary sections of the Report are: Section 2 Introduction Statement outlining the scope of the Review, Methodology and Project Governance. Section 3 General themes A summary of the general, overarching themes identified during the Review. Section 4 Governance An in depth discussion of Governance, specifically relating to the Council and CoGB. Section 5 Income and expenditure and economic development Review of CoGB financial processes, income and expenditure trends and economic development and the role CoGB. Section 6 Quality of service delivery, management and staffing, structure and innovation Review of CoGB service delivery and quality of service, current organisational structure and innovation. Section 7 Prioritising capital and major works Review of the Capital Works and Asset Management practices engaged by CoGB. Section 8 Communication and community engagement Review of communications and community engagement processes undertaken by CoGB. Section 9 - Section 13 - Case studies Four case studies are presented to provide context to the Review, highlighting areas of success and improvement relevant to each workstream. Section 14 Recommendations Recommendations and areas of improvement identified during the Review.
1.1
The challenge to Local Government
Historically, Local Government has been focussed on what are defined as essential or core services, being roads, rates and rubbish. Today, Local Government has become much more complex. The concept of essential or core services has moved beyond the historic definition and today includes strategic planning, childcare, waste, community development and recreation. In addition to an evolving definition of services is the expectation that Local Government is not just a provider of services but should also facilitate and promote economic growth and development within the municipality and wider region. The challenges of this evolving definition are compounded by legacy and emerging pressures. Increasingly aging asset and infrastructure portfolio, liabilities in servicing defined benefits superannuation schemes and changing constituency demographics place seemingly ever increasing demands on Local Government at a time of limited financial resources. Clearly this evolving definition, compounding legacy and emerging pressures generates a tension in how to best fund Local Governments. Whilst Federal and State Governments directly, or indirectly via grants, fund up some Local Government activities, the balance of funding is generated through levies on the local community through rates and other charges. Councillors, as the duly elected members of the community, advocate for and protect the goals, vision and expectations of the constituents they represent and face the task of balancing and resolving these issues. Working in partnership with the council as an organisation, councillors are required to make decisions on which services are indeed essential, choosing between competing investment priorities, each with committed advocacy groups, ultimately deciding how to best target investment. This all needs to be achieved whilst councillors continue to represent and advocate for their constituents, and as necessary, advocate for decisions made by the council to their constituents that may be contrary to constituent expectations. The City of Greater Bendigo (CoGB) typifies an organisation coming to terms with and balancing these pressures. Like its peers across Victoria and nationally, CoGB is a complex organisation seeking to balance competing goals and priorities within a funding envelope that cannot meet all the demands made of it. Ultimately, this Independent Review of CoGB is a step to supporting Councillors, the organisation, and the community they both represent and serve, in understanding the service and financial environment in which CoGB operates and critically, ask the question; what can we do to improve?
Within each section, Observations, Findings, Conclusions and Recommendations are included in the narrative as relevant to the analysis undertaken. A consistent approach has been applied across the Report in that:
Observations are made in each section where the weight of opinion provided stakeholders, either verbally or in written form, during the Review period merited inclusion, but where the Review team could not independently validate the opinion provided Findings are made where an Observation made in the course of the Review could be independently validated by the Review team or where the Review team identified issues and themes independently of the stakeholder engagement Conclusions and Recommendations build on Observations and Findings as appropriate. It should be noted that not all Observations and Findings attract a Conclusion or Recommendation.
Case Studies are also included in the Report to highlight the themes identified through the Review process and to substantiate Findings, Conclusions and Recommendations. The final section in the Report is a consolidation of the Recommendations made in each section with relevant priority identified.
1.3
The genesis of the Independent Review
The concept for this Review was initially brought to the attention of the then Mayor in August 2010 and then the Council, through a petition supported by 25 signatories in November 2011. Whilst the Council at the time did not support the petition, the call for such a Review formed an important campaign platform during the 2012 Council election. The basis for the Review identified in the petition and during the election campaign was, among other issues, that CoGB needed to be more transparent, CoGB was over-staffed and that there were cost efficiencies to be found. Following the election, the balance in Council moved towards those favouring the Review and accordingly, a Council resolution was passed in December 2012 which called for this Review to be undertaken. The resolution required that the Review be governed by an IRC, comprising of three elected Councillors and three independent Bendigo constituents. The appointment of an IRC to govern the conduct and implementation of the Review is to be commended as representing best practice. Through the active participation of the IRC, the process of the Review was able to develop without the risk, real or perceived, of a particular agenda driving the Recommendations and the Report.
of preparing this Report, these separate investigations were yet to be completed. Accordingly, whilst this Review addresses broad issues associated with these areas, it is acknowledged that these separate investigations will provide a depth and focus of analysis not envisaged by this Review; and The scope of the Review was to provide a broad and holistic assessment of CoGB across all its activities. The Review was not envisaged as a forensic financial investigation of Directorate or Business Unit activities. As such this Review does not address issues such as detailed financial control, fraud prevention or other such matters.
1.6
The key questions
As noted, the genesis of this Review was a petition submitted to Council and the subsequent election campaign in 2012. The key issues during the Review included a belief that CoGB operations and decision making lack transparency, CoGB is overstaffed and that cost efficiencies could be found. Whilst the Report addresses these points in detail, some high level matters merit brief commentary.
Transparency
A number of the key Recommendations arising from this Review are concerned with transparency and as an adjunct to transparency, themes surrounding governance. Key themes emerging during the Review process, and addressed in the Report, include:
1.4
The Review process
After a public tender process, Aurecon Australia Pty Ltd (Aurecon) was awarded the role of Review consultant and commenced the Review in March 2013. Aurecon conducted the Review between April and June 2013 and the Observations, Findings, Conclusions and Recommendations of the Review are outlined in this Report. In conducting the Review, Aurecon investigated six key areas of operation which were identified by the IRC that broadly related to economic development, capital works, organisation service levels and stakeholder engagement. Aurecon also identified another key area, governance, which became a recurring theme throughout the Review process. During the Review period, over 120 individuals and groups, both internal and external to CoGB, were interviewed by Aurecon and 129 written submissions were reviewed with respect to the key areas identified by the IRC. Some of the individuals or groups were interviewed more than once. The external individuals or groups interviewed were chosen by Aurecon in conjunction with the IRC and represented a diverse cross section of demographic in the Bendigo community. Unless agreed otherwise by the individual or group, all information and anecdotal evidence provided to Aurecon has not been attributed to its source.
The need for CoGB as an organisation to provide timely and more detailed information to Councillors in respect of ongoing and emerging issues. Particular attention is required in providing notification to Councillors of potential issues and risks, including financial trends as they emerge. A balance will need to be struck between providing such information and not overwhelming or providing onerous amounts of information to Councillors. The need for an improvement in the working relationship between Councillors, CoGB leadership and broader council staff so that each recognises the contribution and dedication of the other. Through improved working relationships, CoGB can be confident that Councillors are informed, while CoGB is empowered and entrusted to act appropriately. The need for improvements in engagement strategies with the community in respect of major initiatives, such as the closure of the Golden Square Swimming Pool. The need for improved financial reporting and transparency at Business Unit level, notably the Economic Development Unit, Tourism, the Bendigo Art Gallery, The Capital and Major Events including strong consideration of the establishment of standalone entities based on a clear business need to manage these activities.
1.5
Limitations of the Review
In conducting this Review, it is acknowledged that the scope of the Review itself, the process of stakeholder engagement, timescale involved and other ongoing concurrent Council and CoGB activities to a degree limited the depth of analysis undertaken. Two key points should be noted:
A critical element to enable transparency is a clear understanding of the roles and obligations of Councillors and CoGB staff. Fundamentally, Councillors are responsible to their constituents for setting the Vision for CoGB and making investment decisions that support that Vision. Individual Councillors have the freedom to advocate for their constituents while also acknowledging when their position has not attracted majority support from Council without undermining the decision. Equally, the CoGB as an organisation is accountable to Councillors for how investment decisions are implemented. The role of Council in implementing the investments and activities that support the Vision of CoGB over the long term is complex and time consuming. Critically, for Council to be accountable, it must have the freedom to actively manage the investments within its mandated portfolio of activities.
Prior to commencing this Review, Council had commissioned three separate investigations into; Waste Strategy, Aged and Disability Services and Early Childhood Services by independent subject matter experts respectively. At the time
This Review has established that there are challenges in the relationship between Councillors and CoGB that are acting as a barrier to effective and transparent communication both internally and externally to the wider community.
Staffing
A recurring theme throughout the Review process was a belief of stakeholders that CoGB is overstaffed and as a consequence, a financial burden on the community. Assessing this theme is complex as it incorporates two distinct themes, namely:

That in absolute terms CoGB is believed to be systemically overstaffed to deliver the services and investments that support Councils Vision That CoGB is delivering services and investments, subject to the Council Plan, that are not believed to be essential or core services and as a consequence has engaged staff to deliver those services leading to perceived inflated costs.
Major Events may deliver cost efficiencies if such changes are based on a strong business case clearly linking the need for change with defined outcomes Ongoing reviews into Waste Strategy, Aged and Disability Services and Early Childhood Services should be completed and the resulting recommendations carefully considered with any changes in service delivery clearly explained to the wider community Long term asset strategies and capital investment decisions need to be provided with clear context and justification within a business case format, identifying the linkage between the investment cost and the ultimate benefits the investment would realise (i.e. investment value). Currently, capital asset investment decision making does not sit within a wider asset strategy
In the narrow sense of this question, the salient points identified in the Report include:

In absolute terms, through benchmarking with other comparable Local Government organisations to form a relevant data set, there are no grounds to suggest that CoGB is systemically overstaffed. The Review identified for the financial year 2011-12 that:
Total CoGB Chief Executive Officer (CEO) and Director remuneration as a percentage of total remuneration costs is below the average of the benchmark data set Total CoGB labour cost as a percentage of annual budget is the lowest of the benchmark data set at 32.5% compared to a high of 44% CoGB manager to staff ratio is in the mid-quartile of the benchmark data set at 1:20 with a low of 1:18 and a high of 1:44 CoGB expenditure per head of population in 2011-12 was in the lowest quartile of the benchmark data set at $1,484 per head of population compared to a low of $1,239 and a high of $1,848 CoGB total staff per 100 of population was the lowest of the benchmark data set at 0.67 staff per 100 compared to a high of 1.01
The consolidation of certain activities, in particular media and communications (including purchasing) would deliver a more cost effective outcome A comprehensive review of position descriptions, role titles and function would assist in identifying both duplication in roles and gaps in delivery The development of a robust position description allied to a detailed staff performance and development process would enable the appointment of the most appropriately skilled individuals to particular roles, whilst providing all staff with clear development objectives. The lack of a comprehensive performance and development process is concerning, not least as succession planning is not well defined as a consequence Current user charges are inconsistently applied. This issue is primarily concerned with operating costs incurred from damage and rectification to Council assets after use not recovered in user charges or condition bonds
The points noted above do not require significant CoGB investment to realise the potential cost efficiencies subject to the recommendations made by the three independent investigations. A potentially greater opportunity to seek cost efficiencies is addressed within the Report through Case Study 4 CoGB office consolidation. Whilst representing an investment in the first instance, a case can be made that significant operational efficiencies may be gained through consolidation of Council activities into a single facility. Whether such efficiencies are directly related to operating cost through consolidation of functions and resources, or efficiencies in service delivery improvements, should be explored through a detailed business case. The lack of robust analysis and community engagement around wider organisational benefits (including efficiencies, communication and cultural improvements) is symptomatic of the themes identified in this Report.
Whilst noting the above, these absolute measures cannot address the second question of whether CoGB is delivering services that some believe not to be essential. Accordingly, the extent to which a service is not deemed essential, then an alternative delivery mechanism (outside of direct CoGB delivery) can be considered or the service effectively exited entirely. Whilst the scope of this Review did not extend to this second question, it is noted that CoGB current service delivery is consistent with the current Council Vision. However, the concurrent external reviews into Waste Strategy, Aged and Disability Services and Early Childhood Services may identify additional areas of opportunity.
1.7
Recommendations
Cost efficiency
As with the discussion surrounding the level of staff, potential cost efficiencies is equally complex, again drawing on two themes:

In the broad sense, have maximum cost efficiencies been achieved to mitigate cost incurred by business and residents? In the narrow sense, can services be delivered with greater cost efficiency?
The Report identifies 69 individual Recommendations across the areas of investigation forming the scope of the Review. The Recommendations are not evenly distributed between the sections and Recommendations are only made to the extent the Review team believed a change in process or policy was merited and would benefit CoGB if implemented.
In the broad sense of this question, the salient points identified in the Report include:
Changes and improvements in the management of certain council activities, including Economic Development Unit, Tourism, the Bendigo Art Gallery, The Capital and
The top ten Recommendations (in no particular order of priority) made are: Ref 1 Recommendation Create and continually update an implementation strategy and Communications Plan to address and action the recommendations of this Review. Outcome Continued progress in actioning the recommendations of the Independent Review. Efficient and effective implementation of recommendations. Consistent salary banding across the organisation. Clearly defined roles and responsibilities. Increased operational performance across the organisation. 3 Create a standardised Matter for Decision template for investment and business case proposals (capital works, operational expenditure, service provision, upgrades/renewals, direct requests from Council and asset maintenance) to be applied across all Directorates. The Matter for Decision template must include:
Ref 5
Recommendation Facilitate the development and finalisation of the Waste Strategy to determine the best way to manage waste going forward, and undertake analysis to determine the cost and requirements for the rehabilitation of historic sites and current sites once they reach capacity. Following completion of the Aged and Disability Services review, implement and complete the recommendations adopted by Council in a timely manner. Following completion of the Early Childhood Services Review, implement and complete the recommendations adopted by Council in a timely manner. Investigate the option to separate the Economic Development Unit, Tourism, the Bendigo Art Gallery, The Capital and Major Events from City Futures into a separate entity. This investigation must include an implementation plan which would provide strategies and direction for the entity and underlying Business Units to aspire to become a self-funding operation within five years of separation. It must also include a plan to incorporate Major Projects into another Directorate of CoGB.
Outcome Clear strategy for the future of waste management in the municipality and a clear understanding of the costs associated with landfill rehabilitation and a plan from Council as to how this should be funded. Restructure of the unit in a timely and cost effective manner.
Undertake an organisation-wide review of all classifications and work structures to formalise and document consistent roles, responsibilities and salary banding.
Restructure of the unit in a timely and cost effective manner.
Clear and transparent matter for decision process implemented across the organisation. This will enable transparent decisions to be collated and assessed.
Increased and sustained economic development in the region. Increased transparency and reporting on the income and expenditure of these units.
Information on the project, the need and purpose, and budget implications The outcome for and benefit to the community Clearly link the expense to the Asset Management Register (if appropriate) A clear link between the Councils Vision, strategy, Plan and the project
Engage with Local Government Victoria regarding the program to streamline and benchmark KPIs across local governments. Implement a performance management: Framework; Change management plan; and, an information technology software system
Quantitative and qualitative comparisons around themes such as engagement techniques, process timeframes and managing referrals. Clear and transparent organisation performance and a high performance culture Capacity to track and monitor organisation and individual performance.
10
A monetary and risk threshold and decision making process to define the extent and depth of the business case and reporting required, and level of approval (similar to a procurement policy). Create a formal asset management and infrastructure project ranking and evaluation framework.
A structured and transparent approach to selecting the programs and infrastructure investments that provides the greatest value to the community.
which is capable of facilitating performance management for all levels of the organisation (CoGB, Directorate, Business Unit and individuals).
In addition, the Review team identified a further three Recommendations as meriting mention in this synopsis: Ref 11 Recommendation Strongly advocate and plan for the consolidation of CoGB offices. Outcome A high performance culture in the organisation. Increased organisational efficiencies. 12 Review CoGBs instrument of delegation for Planning Permit Applications (including the Surf Coast Shires approach to delegation to a skills based, volunteer, Council appointed Special Committee). Review CoGBs Statutory Planning Unit consultation and mediation process and policy. Increased focus on customer service.
Westminster system of government. However, an adverse consequence can be that debate in respect of individual issues becomes narrow and focused on means rather than outcomes. There is an obligation and duty on both Councillors and CoGB as an organisation, to be mindful of the wider community and how debate over issues is framed and communicated. In being mindful of this duty and in preparing this Report, Aurecon and the IRC acknowledge that not all the Recommendations made will be accepted by all stakeholders and that this Review is just one step in a process of continued improvement. Finally, and as noted in the introduction to this Report Synopsis, the preceding narrative is only a high level overview to the background, process, analysis and outcome of the Review. The reader is encouraged to continue their engagement with CoGB with the support of the full Report.
13
Increased focus on customer service. Increased skills in mediation for Planning staff. Increased transparency in Planning Permit Application decision making.
Given the complexity and diversity of service delivery of CoGB, there are few quick wins to be had. The Recommendations above, and the balance of Recommendations made in the Report, will require careful consideration by Councillors and Council prior to implementation. In many cases, detailed analysis of costs and benefits should be undertaken prior to implementation as additional investigation may uncover further efficiencies, or indeed result in a Recommendation being found to be invalid.
1.8
A closing observation by the Review team
During the conduct of the Review, several holistic themes developed that whilst outside of the strict scope of the Review, merit brief commentary:
A consequence of the evolving role of Local Government is complexity. As a result of this complexity, the demands made and workload placed on Councillors has increased beyond the limited and assumed part time function of Councillors described in the Local Government Act. Whilst Councillors openly assume this role through the electoral process, the scale of the task should not be underestimated. Throughout the Review process, the Aurecon team engaged with the CEO, all Directors, and staff from across the organisation. It was evident from this engagement that the current CEO is held in a positive light across the organisation and by wider stakeholders. Additionally, the dedication of all staff and Councillors, beyond his/her individual roles and duties was often raised. This level of dedication and a culture of positive engagement, allied with an open and genuine commitment to seek organisational improvement is to be commended The commitment to Bendigo demonstrated by Councillors and Council was equally reflected in our engagements with local business, community groups and individual residents. The engagement with and dedication to Bendigo as a community was overwhelmingly positive and constructive.
A consequence of this dedication to Bendigo is open and healthy debate across all CoGB activities. The nature of this debate is essentially positive and a function of the
Introduction
2. Introduction
2.1
Background
The role of the IRC is to oversee the Review process, including the following :

The role of Local Government in Australia is highly complex, often not well understood, and most importantly, has changed significantly over the last few decades. Historically, Local Government has been focused on what are considered essential or core services, being roads, rates and rubbish. Today, Local Government has become much more complex in both its diversity of service delivery, an increasing and aging asset and infrastructure portfolio, changing constituency demographics and pressures, and the concept that Local Government should not only be a provider of essential services, but should also facilitate and promote economic growth and development within the municipality. While Local Governments attempt to respond to, and be balanced in addressing often competing challenges, these responses can be compounded or exacerbated by the increased community expectations of an individual Council. Aurecon were engaged by the Greater Bendigo City Council (the Council) to conduct a review of the City of Greater Bendigo (CoGB) operations and activities. This Review investigated historical issues and trends in information and data as well as current themes and trends.
Call for submissions from the community, Councillors and staff Evaluate the submissions received in response to the request for tender to appoint a consultant to undertake the project Shortlist tenderers if required Interview shortlisted tenderers if appropriate Make a recommendation to Council regarding the appointment of a consultant for the Review Meet with the successful consultant to approve all plans for the Review In conjunction with the consultant, hear any submitters who request to be heard in support of his/her submission
Monitor the scope, quality, expenditure and timing performance of the Consultant in undertaking the Review

Receive reports from the consultant appointed to undertake the Review and make recommendations to Council by 30 June 2013 Prepare and monitor a Risk Management Plan Make recommendations to Council for approval in respect to any proposed changes to project scope (finance and non-financial)
2.2
Review governance
This Report is the summary of findings and outcomes of the Independent Review of the CoGB, prepared by Aurecon for CoGB under a process managed by the Independent Review Committee (IRC). According to CoGB website: On December 19 2012 Council resolved to undertake an Independent Review of the CoGB's operations as follows: a) That Council conduct an external independent public review of Council to be completed by 30 June 2013. b) That an estimated amount of $250,000 be referred to the mid-year budget review in late January to carry out the Review. c) That a Review Committee be established comprising of an independent Chairman, three Councillors and two other community members. The IRC comprises the following members:

Aurecon was appointed on 6 March 2013 as the independent consultant engaged to undertake the Review. Aurecon met with the IRC weekly to discuss project progress. The IRC approved Aurecons Review methodology at each step of the Review process. The external individuals or groups interviewed were chosen by Aurecon in conjunction with the IRC and represented a diverse cross section of demographic in the Bendigo community. Aurecon provided documentation to the IRC throughout the Review and was responsible for all stakeholder engagement, data collection and analysis, review of all applicable documentation and the collation of the final Report and Recommendations.
2.3
Review scope
According to the scope set out in Aurecons engagement (and as set out in the Tender Documents issued by CoGB), the Project Objective was to identify improvements in each of the six key review areas including: 1. 2. 3. 4. 5. 6. Council income and expenditure Quality of service delivery by Council Innovative strategies in management, staffing and structure of Council Prioritising Capital and Major works Greater Bendigos economic development and CoGBs role associated with it CoGBs communication and community engagement strategies
Rod Hanson (Community Member and Chair) Nigel McGuckian (Community Member) Margaret ORourke (Community Member) Mayor Cr Lisa Ruffell Cr James Williams Cr Peter Cox
1
Greater Bendigo City Council Independent Review Committee Terms of Reference
Aurecons methodology coupled these areas into four concurrent working streams, with the addition of the remit to also consider and comment on any other issues identified during the Review:
2.4
Collection and synthesis of data
Workstream One
Successful Independent Review Report
Key Area 1: Key Area 2:
Council income and expenditure Greater Bendigos economic development and Councils role associated with it
During the four month Review period, Aurecon met with 120 groups or individuals and reviewed 129 written submissions.
31 CoGB Organisation Leadership Team 23 additional CoGB staff 9 Councillors 129 written submissions 33 Verbal submissions 24 external stakeholder groups/individuals
Figure 1 | Meetings undertaken and submissions received during the Review
Workstream Two
Key Area 3: Key Area 4:
Quality of service delivery by Council Innovative strategies in management, staffing and structure of Council
Workstream Three
Key Area 5:
Prioritising Capital and Major works
Workstream Four
Key Area 6:
Councils communication and community engagement strategies
The other issues identified include a number of overarching themes that were consistently raised, but did not necessarily fit within the workstreams above. These themes have been identified by Aurecon as falling into one or more of the categories outlined below: Impacting on the running of the organisation or its reputation in the community Impacting on more than one workstream Impacting on the multiple stakeholder groups
The methodology for the review of all documentation was established and agreed by the IRC, and is summarised below.
Council documentation

Identification of documentation required to undertake the Review completed by Aurecon List of documents sent to CoGB for collation Information received in bulk from CoGB (electronic and hard copies) Electronic and hard copy documentation processed as follows:

Information and data relevant to these themes was requested and reviewed according to the process outlined below.
Broad assessment of folder contents (raw documentation) to understand and identify relevance to each workstream Extraction and printing of documentation Review and assessment of documentation Identification of supplementary documentation/information required Extraction of supplementary documentation/information from existing folders where possible Request sent to CoGB for supplementary documentation/information if not already obtained Review and assessment of supplementary information
Continual monitoring/recording of electronic and hard copy documentation as required
Submissions

Submissions received and collated by Peter Davies on behalf of the IRC, or by Aurecon or the IRC Chair if submission was confidential Submissions scanned and sent to Aurecon electronically (if received by Peter Davies) Submission content assessed for content and themes Submissions classified according to submitter (internal (Staff or Councillor) and external (community submissions)) All submissions saved electronically, printed and filed by Aurecon All submissions reviewed and allocated to a workstream(s)
During meetings relevant to each theme or workstream, anecdotal evidence was provided to Aurecon highlighting themes and issues warranting further investigation. It was important to determine whether the claims made by some stakeholders were able to be verified. In such cases documented evidence was requested either during the meeting or to be supplied electronically to Aurecon. Where this documentation was supplied, Aurecon reviewed that information and used its professional judgement to assess that information. Such instances are highlighted in the text and reported as a Finding. Where documentation could not be sourced or was not supplied, Aurecon made efforts to evaluate these claims through discussions with appropriate individuals or parties within or external to CoGB. Where such claims have not been able to be verified, but were given genuine consideration by Aurecon using its professional judgment, then these instances are highlighted in the text and reported as an Observation. Aurecon has formed a Conclusion for each relevant Finding or Observation and these are highlighted through the text. Recommendations were formulated by Aurecon based on the Observations, Findings and Conclusions in this Report. These are based on Aurecons professional judgement as an experienced and qualified professional consultant, and taking into account the scope of the Review, time available, discussions and meetings undertaken and documents provided and reviewed. The Review was undertaken between March and June 2013. Findings, Observations and Recommendations therefore relate to both current issues and those discovered through analysis of historical information. Verbatim quotations are used throughout this report to signify the differing views often encountered during discussions or in written submissions. They do not convey Aurecons opinion, but rather highlight the diversity of public opinion.
In summary, the review of data and documentation was a dynamic process, with multiple requests for information sent to CoGB as discussions raised themes and issues that warranted further investigation. This process was followed to ensure themes and Recommendations are balanced and based on factual evidence where possible.
2.5
Report structure
The Report is divided into the following Sections: Section 0 - Glossary Glossary outlining common terms used throughout the Report. Section 1 - Report synopsis Concise summary of the Report and primary Recommendations. Section 2 - Introduction Statement outlining the scope of the Review, Methodology and Project Governance. Section 3 - General themes A summary of the general, overarching themes identified during the Review. Section 4 - Governance An in depth discussion of Governance, specifically relating to the Council and CoGB. Section 5 - Income and expenditure and economic development Review of CoGB financial processes, income and expenditure trends and economic development and the role CoGB. Section 6 - Quality of service delivery, management and staffing, structure and innovation Review of CoGB service delivery and quality of service, current organisational structure and innovation. Section 7 - Prioritising capital and major works Review of the Capital Works and Asset Management practices engaged by CoGB. Section 8 - Communication and community engagement Review of communications and community engagement processes undertaken by CoGB. Section 9 - Section 13 Case studies Four case studies are presented to provide context to the Review, highlighting areas of success and improvement relevant to each workstream. Section 14 Recommendations Recommendations and areas of improvement identified during the Review.
2.6 Important things you should know about this Report

Exclusive Use This Report has been prepared by Aurecon at the request of CoGB exclusively for the use of CoGB.
Limited Scope The basis of Aurecons engagement by the CoGB is that Aurecons scope, or any liability whether under the law of contract, tort, statute, equity or otherwise, is limited as set out in its terms of engagement. The nature of Aurecons scope in this matter, including the limited time requested by CoGB (between March and June 2013) for the completion of the Review, means that the report necessarily concentrates on readily apparent major issues.
Limits on Investigation and Information The Report is also based on information provided to Aurecon by other parties. The Report is provided strictly on the basis that the information that has been provided is accurate, complete and adequate. Aurecon takes no responsibility and disclaims all liability whatsoever for any loss or damage that the CoGB or any other party may suffer resulting from any conclusions based on information provided to Aurecon, except to the extent that Aurecon expressly indicates in the Report that it has verified the information to its satisfaction.
Third Parties It is not possible to make a proper assessment of this report without a clear understanding of the terms of engagement under which the Report has been prepared, including the scope of the instructions and directions given to and the assumptions made by Aurecon. The Report is a report scoped in accordance with instructions given by or on behalf of CoGB. The Report may not address issues which would need to be addressed with a third party if that partys particular circumstances, requirements and experience with such reports were known and may make assumptions about matters of which a third party is not aware. Aurecon therefore does not assume responsibility for the use of, or reliance on, the Report by any third party and the use of, or reliance on, the Report by any third party is at the risk of that party.
Legal Documents The report may contain various remarks about and observations on legal documents, such as contracts, and arrangements or regulatory processes. A consultant can make remarks and observations about the technical aspects and implications of those documents or processes and general remarks and observations of a non-legal nature about the contents or nature of those matters. However, as a professional services consultancy, Aurecon is not qualified, cannot express and should not be taken as in any way expressing any opinion or conclusion about the legal status, validity, enforceability, effect, completeness or effectiveness of those arrangements or documents or whether what is provided for is effectively provided for. They are matters for legal advice.
Data During the Review, financial information and organisational data was provided to Aurecon by CoGB. To the extent that this data has been presented graphically within this Report, no further validation or verification of the information has occurred following receipt.
If the reader should become aware of any inaccuracy in or change to any of the facts, findings or assumptions made either in Aurecons report or elsewhere, the reader should inform Aurecon so that it can assess its significance and review its comments and recommendations. This Introduction must accompany every copy of this Report.
General themes
3. General themes
3.1
Introduction and approach
31 CoGB Organisation Leadership Team 23 additional CoGB staff 9 Councillors 129 written submissions 33 Verbal submissions 24 external stakeholder groups/individuals
Figure 2 | Meetings undertaken and submissions received during the Review
This section outlines the major overarching themes identified during discussions undertaken throughout the Review. Each major theme identified is outlined in this Section, as follows: Section 3.2 Background
Section 3.3 Governance: A summary of the Governance themes uncovered and how they impact on CoGB Section 3.4 Communication: A summary of the Communication themes uncovered and how they impact on CoGB and the community Section 3.5 Council Vision and direction: A major theme uncovered is a current lack of a clear Vision and direction for Council and the organisation Section 3.6 Organisational commitment: Many internal and external stakeholders indicated that CoGB staff are committed to the organisation and community Section 3.7 Councillor commitment: Many internal and external stakeholders indicated that the nine Councillors are committed to the organisation and community Section 3.8 Vocal minority: Some internal and external stakeholders indicated that there is a vocal minority in Bendigo who frequently criticise CoGB.
During these discussions, a number of general or overarching themes were identified. These themes have been identified by Aurecon as falling into one or more of the following categories:

Impacting on the running of the organisation and/or its reputation in the community Impacting on more than one workstream Impacting on the multiple stakeholder groups
3.2
Background
These themes are outlined here, as they set the context for the rest of the Report and are summarised in Figure 2. The following Sections outline themes in detail.
A significant number of meetings and discussions were held with internal and external stakeholders during the four month Independent Review. In addition, a large number of written and verbal submissions were provided by staff and members of the community. This included:
Bendigo, because of its size and what the city now offers, is often in the spotlight.
Submission to the Independent Review Committee
Trust and relationship between Councillors and CoGB Code of conduct Roles and responsibilities Clear protocols Local Govt Act Role as a Regional City
Internal communication CoGB and the media Core services vs. Major projects
Induction process of new Councillors

Council elections were last held in October 2012 with four of the nine Councillors being elected to office for the first time. The last seven months have been a steep learning curve for some of these Councillors as they progressively understand his/her roles and responsibilities and that of CoGB as an organisation.
Governance
Communication
Finding: A number of Councillor training courses and induction programs have been held, however documentation provided to Aurecon indicates that this was relatively high level in nature. In addition, little, if any, formal mentoring of new Councillors currently occurs.
Unclear Vision Who sets the Vision? What is the direction of Council? How do the current strategies fit into this vision?
Highly motivated workforce Community minded Many are both employees and ratepayers
Conclusion: Significant training of new Councillors is required, as is ongoing support during his or her term.
Council Vision and direction
Organisational commitment
Recommendations: Develop and facilitate a formal mentoring program for newly elected Councillors that will provide them with guidance from experienced Councillors in Bendigo and/or other councils across the state. Develop an education series for Councillors to provide ongoing guidance and assistance on relevant subjects (such as planning, HACC services, relevant legislation changes, cost shifting by the Federal and State Government, asset management and capital works, roles and responsibilities, Code of Conduct).
Highly motivated Significant time commitment Community minded
Small group of citizens who regularly criticise Council Some claims not accurate or based on fact
Committment of Councillors
Vocal minority
Protocols and Code of Conduct and relationship between Council and CoGB
Part of the training provided to all Councillors when they are first elected relates to protocols and the Councillor Code of Conduct. This Code has been unanimously endorsed and signed by all Councillors. It outlines how Councillors should behave towards other Councillors, CoGB staff and the community. The Code of Conduct and protocols also outline how Councillors relate to the media.
Figure 3 | General themes as outlined during stakeholder discussions and subsequent investigation
3.3
Governance
Governance is currently an issue of concern. In summary, the following topics were raised in discussions.
Role of Council and CoGB

The primary focus for the Council and CoGB is to serve its community and act as an enabler and provider of services. Although required to maintain strong financial reporting practices and results, CoGB is not a profit-making business.
Finding: Reports from internal and external stakeholders, documented evidence in the form of email correspondence and media reports indicate that the behaviour of some Councillors has, on occasions, not followed the Code of Conduct or protocols in place.
Recent events and issues have developed a challenging operating environment for Councillors and CoGB staff. The following may have contributed to this environment:
Bendigos role as a Regional City

Bendigos population base gives it larger scale compared to many other regional communities, as the population serves as a producer and attractor of goods, services, infrastructure and events. This scale provides employment and other opportunities for those living in Bendigo and the surrounding area. Due to the importance Bendigo plays in the region and Victoria, responsibilities and obligations of CoGB often extend past its municipal boundaries. Senior officers and Councillors (for all municipalities in the area) are increasingly focussed on undertaking an advocacy role for the region to lift decision making to a higher level focussing on regional (and beyond) rather than simply local issues. For example, CoGB staff played a vital role in preparing a Regional Strategic Plan and providing inputs into the Regional Growth Plan (Loddon Mallee South) released in April 2013. Such strategies cannot be developed, read or interpreted without considering factors beyond Bendigos municipal boundary. CoGB is a member of Regional Cities Victoria. This group consists of the Mayors and CEOs from the municipalities of Ballarat, Greater Bendigo, Greater Geelong, Horsham, Latrobe, Mildura, Greater Shepparton, Wangaratta, Warrnambool and Wodonga, the ten largest cities outside metropolitan Melbourne. The mandate of this group is to consistently work to increase the liveability of Victoria's regional cities: We do this so our population continues to grow and economic investment in regional centres remains strong.
There is very limited marketing to our ratepayers of all the wonderful opportunities that are available to them as well as what we actually provide for them. We seem to promote in one burst at the time but not throughout the year so the messages are continuous.
New councillors still finding their feet, asserting themselves and understanding his/her role and that of CoGB, whilst wishing to demonstrate to the community his/her involvement and drive. Councillors becoming involved in operational issues (in addition to the general advocacy role on behalf of citizens) rather than playing a strategic and visionary role. CoGB staff is therefore involved in preparing reports on specific issues and items for Council in addition to undertaking his/her usual duties, causing angst among staff. CoGB staff respect for Councillors has diminished due to perceived interference. Golden Square Pool. A lack of clear communication between CoGB staff and the community and poor community engagement lead to an ongoing and protracted debate. CoGB staff and Council were perceived to work against each other, rather than as a cohesive team. Councillors making comments in the media about specific staff and his/her actions. Apparent public disunity of Councillors after decisions have been made and announced. Observation: The relationship and level of trust between some Councillors and CoGB staff has degraded since the October 2012 elections.
Conclusion: The Code of Conduct and related protocols should be understood and followed by all Councillors and relevant staff. This will improve the working relationship between these groups and increase the level of trust.
Observation: CoGB is seen as a successful and progressive organisation by people and organisations outside Bendigo and the envy of many other regional councils. CoGB is seen as a leader in the field of tourism, major events (such as the Grace Kelly Exhibition), and the delivery of major projects (for example The Capital, the Art Gallery redevelopment, the Edward Street Multi-Level Carpark, the new Performance Theatre that is about to be constructed and its role in the planned Bendigo Hospital construction). In addition, external stakeholders indicated during discussions with Aurecon that CoGB is also seen to act as a mentor for other councils in terms of its vision, quality of service delivery and the role it plays in the community.
Recommendation: Mandate ongoing training and education in Governance, roles and responsibilities, communication protocols (internal and external), and the Code of Conduct for all Councillors and Directors. Educate all Councillors and senior CoGB staff in CoGB Communication and Engagement protocols.
3.4
Communication
Communication within CoGB

The size, operating locations and diversity in staff operating locations present communication challenges for CoGB.
The community knows more about Grace Kellys dresses than the big planning issues facing the City. The question is why?
Staff are located in a number of different office buildings around the CBD, making day-to-day communications difficult. Staff reported that inefficiencies occur due to the time required to get between office buildings for meetings and potential efficiencies that could be gained through increased communication and by removing role overlap if offices were consolidated. This is investigated further in the Office Consolidation Case Study on page 106. The Executive Management Team, including the CEO, meets weekly to discuss communication and other organisational matters. All Business Unit managers meet once a month. Many managers hold regular meetings with his/her staff to update them on major events and communicate relevant messages.
the establishment of an online community engagement calendar and the development of a Community Engagement Framework.
Observation: A common theme identified during discussions and the review of relevant documentation was that the go to person for community engagement advice is unclear. While a Framework has been developed, many CoGB staff are unsure of where this Framework sits and who owns it.
Observation: During discussions with Aurecon, CoGB staff indicated that communication between the higher levels of management is generally good, however day-to-day communication between staff could be improved.
Conclusion: Community engagement roles need to be better defined across the organisation and staff advised of a go to person or resource for matters regarding community engagement.
Conclusion: Consolidation of CoGB offices would enhance efficiencies and reduce duplication of infrastructure and roles, whilst assisting in daily communication.
Recommendation: Explore opportunities to use the services of an inhouse Community Engagement Officer resource.
CoGB Communications team

Recommendation: Advocate and plan for the consolidation of CoGB offices. A restructure approximately 12 months ago resulted in the centralisation of a Communications and Media team within the Executive Services Unit. Notionally, this team is responsible for all corporate (internal) and external communication for CoGB. Throughout the Review, it became evident to Aurecon that not all external communications for CoGB currently originate from this team. For instance, the City Futures Directorate has directly released communications to the public regarding major events.
Over the last 12 months, CoGBs intranet site has been updated. This upgrade encourages the sharing of information, providing a tool from which organisation-wide communications can be launched. Due to operating locations or activities, some employees do not have regular access to emails or the intranet and may be missing organisation messages. For these employees, it is important to ensure communication is maintained through the use of hardcopy information sheets, noticeboards and pamphlets. In addition, an extranet site is planned to be rolled out to Councillors. This will provide Councillors with some of the information contained on the staff intranet (primarily information relevant to the Councillors role). This will improve the way Councillors are provided with information such as reports, data and will potentially streamline the Councillor Request process.
Finding: Advertising budgets currently remain the responsibility of individual Business Units. In 2011-12, Directorates budgeted for $854,158, but spent $1,144,668 (primarily due to the Grace Kelly Exhibition).
Community engagement
Council and CoGB are committed to improving the way they engage with the Bendigo community. This focus has led to improvements being made in recent times, including
Observation: During discussions with Aurecon, some CoGB staff mentioned that they believe that this exceeding of the budget may be because some Units do not appreciate the costs associated with communications, including advertising costs (i.e. purchasing media).
Conclusion: Advertising costs may be saved by consolidating advertising spend through a centralised Unit.
Print
Radio
Recommendations: Centralise the advertising budget and resources within the Communications and Media Team to improve buying power and negotiating influence.
118,503 Home and Community Care (HACC) service hours were provided to the community 479,000 Childcare hours were provided to the community 30,763 requests for services were received by the customer support team Small Township Grants totaling $151,030 were allocated to be utilised over two financial years, assisting community groups and agencies to undertake activities strengthening communities The following funds were spent on capital works (being for the maintenance and upgrade of existing assets): Roads: $10.6 million Drains: $2.4 million; Land improvements: $4.1million Buildings: $23.6 million
Television
Social Media
Formalise and mandate a Communications Policy so media releases are reviewed by the Communications and Media Team prior to release.
CoGB and the media

There are a number of media outlets that have a strong local presence in Bendigo (Figure 4). Given the current news environment has a strong digital focus, each outlet regardless of its medium, is competing to break news first. The appetite for news is fiercely competitive and local media outlets admit to looking for a different angle when reporting news. The advent and proliferation of social media is putting pressure on organisations such as CoGB. For instance, with the increased use of web comments on newspaper websites, Facebook and Twitter, members of the public are now able to express his/her opinions in an immediate and widely read forum. The inherent danger in this type of media is that those making comment can use any name, rather than his/her own in effect, one person could post 20 negative comments on an issue but under 20 different names, resulting in the perception is reality effect. Ultimately, this has the ability to inaccurately distort public opinion. Observation: There appears to be a focus by CoGB to widely publicise major projects being undertaken throughout the municipality. Public and media perception of the delivery of traditional services may be affected by a lack of good news stories relating to these services.
Figure 4 | Media outlets in Bendigo
It is acknowledged that the media plays an important role in disseminating the information released by CoGB. For instance, a total of 316 media releases were published by CoGB in 2011-12, however not all of these were reported by the local media. CoGB uses a variety of media formats for the communication of this information, such as the CoGB Website, advertisements placed in the Bendigo Advertiser, the quarterly gb Magazine, Twitter and Facebook.
Finding: During the Review, Aurecon became aware of a number of online comments and reports regarding the same issue or event which were erroneous and not based on fact.
Communicating core services vs. major projects

CoGB provides a wide array of services to the community. The demand for these services and the expectations from the community regarding quality and timeliness of delivery are increasing. As a result, significant funds in the annual budget are allocated to these services each year. For example, the 2011-12 Annual Report indicates that:
2
Greater Bendigo Magazine gb Magazine is a quarterly publication distributed to approximately 55,000 homes within the region. In response to community consultation, it has recently been revamped into a magazine format spanning 32 pages. The purpose of this magazine is to provide the community with more information on CoGB services, infrastructure projects and longer term strategies.
3.5
Council Vision and direction
During discussions with Councillors, staff and external stakeholders, Aurecon investigated the extent to which CoGBs successfully communicates its Vision.
City of Greater Bendigo 2011-2012 Annual Report, Final After Council Meeting
Council Plan
How well does the organisation communicate the Council Vision? Is it something you think your team considers much in their work? What do you think is your groups role in helping achieve this Vision?
The Vision contained in the 2009-13 Council Plan is : Greater Bendigo will be the best place to live, work and visit, where:
Observation: Throughout many of the discussions held with internal and external stakeholders, a lack of communication by current Councillors around Vision and direction was identified as an issue for CoGB. Many internal and external stakeholders (and many of the Councillors themselves) indicated that the nine elected representatives were yet to articulate a clear Vision and strategies for Bendigo. Many also commented on the fact that, in their opinion, many of the Councillors spend a lot of their time on the operational issues facing CoGB, rather than focussing on the strategic direction of the community and organisation. Several internal and external stakeholders believe that there are likely to be many reasons for this hands on, operational approach by the Councillors, including experience levels, previous experience in the workforce, their expectations and understanding regarding their role as a Councillor, trust, considerations of re-election and the current relationship(s) between the Council and CoGB.
Place based plans
Strategies

growth and living standards are managed to sustain and enhance quality of life a regional culture of learning, creativity and innovation allows people to flourish its rich natural and built cultural heritage is conserved for today and tomorrow resilience, local spirit and identity are proudly celebrated.
Figure 5 | CoGB strategic planning hierarchy
A number of strategy documents have been produced during the previous Council term to achieve this Vision. These strategies then form place based plans (Figure 5). Examples of the comprehensive strategies referred to in the 2009-2013 Council Plan include: Arts and Cultural Strategy Bendigo CBD Parking Strategy Commercial Land Strategy Customer Service Strategy Economic Development Strategy Eaglehawk Township Strategy Greater Bendigo Walking and Cycling Strategy Health and Wellbeing Strategy Industrial Land Strategy Natural Environment Strategy Positive Ageing Strategy Residential Development Strategy
Conclusion: Regardless of the reasons, the fact remains that in the absence of a clearly enunciated Vision, CoGB as an organisation cannot consistently update strategy documents, placed based plans, structure resources or prioritise necessary projects, infrastructure or implement the corresponding policies and procedures.
3.6
Organisational commitment
Some submissions to the Independent Review Committee indicated a level of disappointment with senior staff at CoGB. This was therefore investigated during the Review. Discussions with internal and external stakeholders indicated that the level of commitment of CoGB staff is high. External stakeholders in particular, indicated that the CEO and Executive Management Team acted as leaders for the region, not just CoGB. Discussions with the Directors did indicate that at times, it was difficult for them to allocate time to strategic leadership tasks as time required for day-to-day management tasks and requests for information was significant. This balance does increase the time taken for staff to respond to Councillor requests on occasions.
The 2013-2017 Council Plan was adopted on 19 June 2013. The Vision adopted in 4 that document is as follows : Our residents can live healthy and satisfying lives in our vibrant City and region, confident in its growth and future Once finalised, Council Strategy documents currently in development will reflect this Vision, as will subsequent Place Based Plans.
3 4
CoGB, 2009-2013 Council Plan, 2012 Update, page 2. CoGB, 2013-2017 Council Plan, page 5.
The Council has some wonderfully committed employees that I have had the pleasure of meeting and working with in the past both as a contractor and as a resident. As a whole I am pleased with the level of service I receive as a resident.
Observation: General feedback from managers and stakeholders is that there is a culture within CoGB, where staff members often go above and beyond what would be reasonably expected of them in order to ensure a positive outcome for their community. This is summarised by the CEOs submission to the Independent Review Committee: I am particularly proud of the Executive Management Team (EMT) at the CoGB and consider them to be the best executive team in the state. They are supported by an excellent group of Managers who with the EMT, make up the Organisation Leadership Team. Their passion for their work, their willingness to support each other and their commitment to the CoGB and the Community that they serve is outstanding. I am continually inspired by the commitment that all of the staff make to their work, going above and beyond the requirements of their role to deliver great outcomes to the community. There are significant 'extras' that are delivered but not measured however this is a large part of the culture of the organisation. The staff culture is about delivering the best outcome for the community. The above statement was supported by a number of external stakeholders during the engagement exercise. For example, this is further supported by an external stakeholder who stated: My view is that when dealing with Senior Officers at various state departments, Bendigos (council) Executive team are considered the best in the state.
difficult as he or she finds their feet and understands the role of a Councillor. This is an on-going process and some Councillors have indicated that having support of his/her colleagues and CoGB staff makes this process easier.
Observation: The workload of Councillors is significant with significant reading required in preparation for Council meetings and forums, attendance at meetings and community events. Councillors also act as an advocate for their local community. Additional time is spent understanding concerns and raising these with the appropriate Directors at CoGB.
Conclusion: Councillors representing the Greater Bendigo City Council are highly committed individuals. They would benefit from additional support from CoGB.
Recommendations: Develop and facilitate a formal mentoring program for newly elected Councillors that will provide them with guidance from experienced Councillors in Bendigo and/or other councils across the state. Develop an education series for Councillors to provide ongoing guidance and assistance on relevant subjects (such as planning, HACC services, relevant legislation changes, cost shifting by the Federal and State Government, asset management and capital works, roles and responsibilities, Code of Conduct). Explore opportunities to create the position of an in-house Councillor Research Officer, dedicated to assisting Councillors.
Conclusion: External stakeholders and senior managers within the organisation generally believe that CoGB has a team of highly capable, committed, and motivated staff. The CEO and Executive Management Team have developed a strong working relationship where trust and communication is paramount. This is evident through the feedback received from external stakeholders within the Greater Bendigo community.
3.7
Councillor commitment
There are nine Councillors representing three Wards across the Bendigo Local Government Area. These individuals have a wide range of experience and interests, however all indicated they one of the primary reasons for running for Council was his/her interest in and dedication to the community in which they live and the desire to make a difference. Submissions indicated that this group of Councillors were highly committed to his/her community. Feedback from some Councillors indicated that the first term is often
3.8
Vocal minority
During the course of the Review, Aurecon investigated the issue of a small group of citizens who regularly criticise the Council and CoGB in the public domain. This causes frustration among some Councillors and staff.
Observation: Discussions held with numerous internal and external stakeholders including staff, Councillors and local business representatives indicated that a small number of individuals regularly and publically criticise the Council and CoGB. These discussions indicated that the criticisms were often unwarranted and misleading. A number of stakeholders also indicated that these comments can at times be based on incomplete or erroneous information.
Finding: A review of recent comments by readers left on newspaper sites indicated that criticisms of CoGB posted are often from individuals using a range of names with the same email address. This may make it appear there are many more opposed to the CoGB than is actually the case.
Conclusion: Comments made by individuals in the public domain regarding poor CoGB performance can be based on erroneous or incomplete information. This can damage CoGBs reputation in the Bendigo community and the wider region.
Governance
4. Governance
The Code of Conduct has been unanimously endorsed by council and signed by all councillors. The Code of Conduct sets out how councillors should behave, including treating each other with respect and courtesy and acting with integrity and honesty. As mayor, I work hard to ensure that all councillors are supported in their role and that all councillors are given an opportunity to have they say. I do not expect everyone to agree on everything, but once a decision has been made by council, councillors should respect the decision and not be publicly questioning it.
Mayor Lisa Ruffell as quoted in Council row revealed, Bendigo Weekly, 29 April, http://www.bendigoweekly.com/news/co uncil-row-revealed-1
4.1
4.2
The role of Local Government
Good governance is vital in order for a council to work in a coherent and coordinated manner towards achieving its strategic objectives and vision. The community demands and expects it. A breakdown in communication or understanding of roles, responsibilities or relationships will prove detrimental to the operation of a council. To mitigate this risk, the roles, responsibilities and expectations of individuals within the organisation (including Councillors) need to be clearly defined, understood and respected. Due to the importance of good governance for the successful operation of a council and council organisation, this Section of the Review concentrates specifically on this theme and considers existing governance practices by CoGB Councillors and staff. The structure of this Section is as follows: Section 4.2 The role of Local Government: Outlines the role of Local Government, the legal framework in which it sits and the roles of the Mayor acting as the head of a council and the CEO acting as the head of the council organisation Section 4.3 Structure and relationships: Outlines the structure and roles of councillors and the council organisation and their interactions Section 4.4 Setting the councils direction: Outlines the role of a council to plan and maintain a strong vision and direction and how these decisions should be made Section 4.5 Overarching good governance principles: Outlines general principles of good governance, including Code of Conduct, Councillors Oath and training Section 4.6 Occupational health and safety: Outlines appropriate workplace behaviours according to the Occupational Health and Safety Act
Objectives of Local Government

Within the State of Victoria, councils are established under the Constitution Act 1975 5 and the Local Government Act (LGA) 1989 to provide leadership for, and ensure effective governance of, their municipal districts. The LGA provides a legal framework for the establishment and administration of councils and defines the purposes and functions of local government. Long-term, positive community outcomes need to be the key driver for any council. In working towards this objective, councils will consider a number of factors as part of the process of making decisions on behalf of their community.
Social and economic viability Environmental sustainability
Efficient and effective use of resources Accessible and equitable services
Quality of life of local residents Transparency in decision making
Figure 6 | Council considerations within the decision making process
The Local Government (Democratic Reform) Act 2003 made fundamental changes to the LGA 1989 to: Increase democratic representation within councils Improve financial management and reporting to the public Provide greater transparency and levels of probity
Victorian Government 1989, Local Government Act, Melbourne.
The following roles and functions of a council are outlined within the Local Government Charter of the LGA: Roles Provide leadership for good governance of the municipal district Consider diverse community needs in decision making Establish strategic objectives and monitor the achievement of these Responsible and accountable management of resources Advocate community interests to other communities and governments Account for the needs of other communities Encourage community cohesion and civic participation Functions Advocate and promote proposals which reflect the communitys best interests Plan and provide services and facilities for the local community Maintain community infrastructure Carry out strategic and land use planning Raise revenue to allow Council to perform its functions Make and enforce appropriate local laws Exercise the duties under the Local Government Act and other applicable legislation
Role of the Mayor

As the leader of a council, the mayor has a number of legislative and functional roles. In addition to presiding over all municipal proceedings and chairing council meetings, the mayor must provide leadership to the council, foster strong relationships, adhere and support the Best Value Framework and exemplify good governance. Although the mayor may not be elected unanimously, he/she is the leader of all councillors, regardless of support from individuals. The leadership of a mayor should reflect his/her responsibility for, and accountability to, all elected members of a council. He/she should encourage active and respectful participation by all councillors throughout each stage of the decision-making process, ensuring the council drives towards its strategic objectives. The mayors leadership role extends to the wider community. He/she acts as a spokesperson for the council and promotes development opportunities for his/her municipality. It is vital that the mayor builds and maintains robust relationships with community networks and key stakeholders.
Some Councillors are very operational and really challenged by the need to be policy makers, strategic leaders and visionary thinkers for the community that they represent. This strategic work is very much led by the executive and key staff.
In line with State Government legislation, CoGBs Best Value Program is based on six principles: Regular community consultation Responsiveness to community needs Accessible and appropriately targeted services Quality and cost standards for all services Continuous improvement Frequent reporting to the community
Observation: Discussions with internal and external stakeholders have generally indicated that Cr Lisa Ruffell has grown into the role of Mayor since being elected last year. She is active in the community and is seen to have a strong working relationship with most Councillors, the CEO and the organisation.
Best Value provides an excellent opportunity to enhance community involvement and facilitate the provision of services that are responsive to community needs and values. Victorian councils are represented by four main bodies:
Finding: Council policy is that Cr Ruffell should be the Council spokesperson in the media, although it should be noted that a number of Councillors have had significant media attention and made numerous remarks in the media about topical issues that may be perceived by some as being out of step with Council and CoGB.
Municipal Association of Victoria (MAV) Victorian Local Governance Association (VLGA) Local Government Professionals (LGPro) Australian Services Union (ASU)
Represents and advocates for local governement Provides policy advice and insurance services Improves the profile of the local government sector
Promotes the interests of councils and communities Strengthens local government capacity to engage with the community
Conclusion: Although Councillors are publicly elected members, acting as a spokesperson to the media can result in the perception of a less unified, dysfunctional or even contradictory Council. Without express permission from the Mayor, this becomes a breach of the CoGB Councillor Code of Conduct (see Section 4.5).
Facilitates positive communication between Local, State and Federal Governement Represents views of officers during the consultation process
Role of Councillors
As stated within the LGA, councillors, as individuals, have no authority to make decisions on behalf of the council. The role of elected council members is to:

The National Local Government Division of the ASU consists of individual council employees within the trade union
Figure 7 | Local Government Representative Bodies
Be active participants in the decision-making process of the council Advocate for his/her constituents
Mayor Councillors CEO Organisation
Review and debate community matters Support the Best Value Framework Assess the alignment of policies and objectives with community requirements Assess councils delivery of services and allocation of resources Contribute to financial and rating policy decisions Employ a CEO
Role of the CEO

The CEO plays a vital role in the development and maintenance of a positive culture of good governance within the council, assisting councillors in governing effectively. The CEO is crucial to ensuring that council officers understand the structure of local government and operate within the context of democratic governance. Appointed by the council, the responsibilities of the CEO include, but are not limited to, the following:

Fundamentally, the role of the elected council is to provide a vision for the municipality and to develop strategic objectives and strong policies that guide actions towards achieving that vision. However, this is always balanced by the fact that councillors are elected members of the council; elected by the community, for the community.
Given that I, and my colleagues, take such pride in what we do, it is insulting to read in papers certain comments from our Councillors. Comments such as they need to be reminded that they are not the ones voted in are hurtful and in my opinion ignorant. So many people who work for this organisation do it to make a difference an (sic) help people and to be battling those sort of hurtful remarks is intolerable and insulting. It is not the first time a Councillor has made a generalised remark in the press that has been insulting to employees and we dont ever seem to address it.
Observation: Some Councillors of CoGB are perceived to be very focussed on operational issues, and do not appear to have formally communicated a clear Vision and strategy to the community and the organisation.
Day to day management of council operations Fostering efficient and robust decision making by council Overseeing the development and maintenance of a strong organisational structure Establishing and promoting adherence to a code of conduct for all council staff Providing information to the community on the councils policies, services and programs
It is important that the CEO drives acknowledgement within the organisation that councillors are the voice of the community and that they play an important role in realising the vision, goals and objectives of the municipality.
Finding: Council is currently undertaking preparation of the 2013-14 Budget, and some Councillors have raised concerns in submissions to Aurecon that this process is difficult to follow, confusing and that there is little opportunity to debate and understand some of the details of the Budget. A number of Councillors have also mentioned to Aurecon that some CoGB staff are hesitant to provide the necessary information. This has caused frustration to a number of Councillors. Conversely, there is frustration from some CoGB staff that Councillors request to be involved in day-to-day operational matters, and seek great detail, rather than focussing on more high level details.
Observation: CoGB CEO, Craig Niemann, is almost unanimously respected as a successful and competent leader both within the organisation, and by individuals and groups external to CoGB
Role of the Organisation

Although not outlined within the LGA, the organisation can play an important role in upholding the practice of good governance. By acting in a support role to the mayor, councillors and the CEO, the organisation undertakes the implementation of councils vision, provides recommendations to council and takes responsibility for the delivery of services to the community. The organisation leads the day to day operational activities of CoGB and provides advice and support to Council or individual Councillors as and when required to assist them with constituent matters. The organisation employs staff that are subject matter experts and so this advisory support to Councillors is crucial to enable effective engagement and alleviate community or constituent pressures. The organisation can support good governance by:

Conclusion: The expectation for Councillors to research and understand a particular subject matter has increased considerably, as CoGBs provision of services has also increased. This presents an onerous task for Councillors which does not always appear to be fully appreciated by CoGB staff.
Recommendation: Explore opportunities to create the position of an inhouse Councillor Research Officer, dedicated to assisting Councillors.
Developing robust systems to deal efficiently and effectively with complaints and community feedback Providing appropriate advice for engagement and consultation with constituents and the wider community Being responsive in providing high quality services
CoGB service delivery, the quality of this service and community engagement issues are outlined later in this Report.
4.3
Structure and relationships
allow strong and enduring relationships to be established, keeping the focus on municipality wellbeing Robust discussion and debate is part of any local government environment and disputes between councillors will always arise. Council debate should always focus on the community issues at hand and conflicts should be managed in a constructive manner that demonstrates good governance. The current CoGB Councillors have a wide variety of local government experience. Some are experienced Councillors (in his/her role in Bendigo, other Shires prior to amalgamation or elsewhere), while for others, this is his/her first term.
Understanding the governance structure

To empower all members of a council to fulfill his/her role, it is essential for them to understand:

The governance structure of local government His/her own roles and responsibilities The roles and responsibilities of others within the organisation The importance of maintaining healthy, productive and professional relationships with all members of the organisation
The elected body and the administration must have a clear and sophisticated understanding of their roles and the fact that these operate within a hierarchy.
Good Governance Guide MAV, VLGA, LGV, LGPro
Mayor and councillors

Proactive participation and positive contribution by councillors is dependent on strong mayoral leadership. The relationship between the mayor and councillors is integral to good governance and ensuring that community respect for the council is developed and maintained. As the leader of the councillors, the mayor is responsible for creating an environment where the council works collaboratively towards achieving the best outcomes for the wider community. Although differences in personal and political opinion are inevitable, if managed appropriately and respectfully, these do not need to be an impediment to council working as a cohesive group. A high level of mutual respect between the mayor and councillors will empower a council to make decisions that reflect a communitys best interests. A mayor who promotes constructive debate, and provides each councillor with the opportunity to voice his/her concerns, will create an environment where councillors are engaged and feel equipped to debate, and in some circumstances accept, decisions that they may not necessarily agree with. A mayor plays an important role in the onboarding of new councillors. It is essential that he/she provides advice, support and direction to councillors who may be challenged by the local government environment. Assistance for new councillors, particularly in terms of building effective communication links to other councillors and the organisation, will enable them to represent his/her constituents more effectively and will produce best-for-community results for the municipality.
Observation: Discussions with CoGB Councillors indicated that Councillors are in the process of forming an effective working relationships with each other, and that some Councillors can get too deeply involved in operational matters.
Councillors and CEO

Clear communication and a thorough understanding and respect for each others roles and responsibilities will build a trusting relationship between all councillors and the CEO. A strong working relationship between the mayor, CEO and councillors will allow all parties to have a clear understanding of each others expectations and the processes by which these can be met and exceeded. The expectations of a CEO must be clearly set by councillors at the commencement of the employment term. A comprehensive performance management plan provides an opportunity to provide regular and constructive feedback. The relationship between the mayor and the CEO is of particular importance. This partnership should exemplify the characteristics of a productive working relationship, especially in regard to communication, trust, respect and understanding. The CEO must comprehend the leadership role of the mayor and provide a high level of support which allows the mayor to steer the council effectively. Conversely, the mayor must acknowledge that the CEO holds a position of authority outside the council chamber and is instrumental to establishing a coordinated organisational approach to achieving councils vision.
Observation: Recent media reports and anecdotal evidence from the Mayor and Councillors have indicated that there are currently some strained working relationships.
Observation: The working relationship between Councillors and the CEO was generally referred to as being respectful and productive. The Mayors relationship with the CEO was found to be particularly strong.
Relationship between councillors

All councillors must recognise the value and importance of each others work. The role of a councillor is complex and challenging; it is vital that, despite personal agendas, each councillor respects his/her colleagues. A high level of respect will
Councillors and the Organisation It was disappointing that the Councillors were continually making comment that the organisation is inefficient, campaigning for the independent review, and imposing a $600,000 efficiency target on the organisation when the Council continue to make decisions that increase costs unnecessary (reopening Golden Square Swimming Pool), decrease revenue (limiting user fee and charge increases) and other additional costs ...
The importance of a highly cohesive councillor-organisation relationship cannot be overstated. It is because of the complexity of this interaction that some fundamental attributes are critical to achieving good governance. These include: Finding: Some correspondence from Councillors to CoGB staff (and provided to Aurecon) was considered to be unprofessional by the staff members involved. Such correspondence was the result of these Councillors frustration with respect to the service they received from staff. This type of communication has been detrimental to the relationship between the Council and the organisation.
Understanding of roles
Open communication
Mutual respect
Conclusion: Relationships between the CoGB Mayor, Councillors, CEO and staff are generally functional with many best-for-community outcomes being achieved as a result of information sharing and positive interaction. However, the diversity and complexity of specific services CoGB as an organisation delivers, has tested some relationships. Throughout the course of the Review, some Councillors and staff have demonstrated a fundamental misunderstanding of each others roles and responsibilities which in some cases has led to communication and relationship breakdowns.
Trust and confidence
Accountability
The key role of the councillors is to provide a clear overarching vision for the municipality. There is a responsibility on the organisation to have an understanding of this function and to support the council in working towards achieving this vision. Similarly, there should be an appreciation by the organisation of the complex political environment in which elected councillors operate. In turn, councillors must respect the onerous and diverse challenges faced by the organisation in providing comprehensive support and high-quality advice to council. The Victorian Good Governance Guide (MAV, VLGA, LGV, LGPro) specifies that both councillors and the organisation must be acutely aware that perceived shortcomings in the performance of the other should, at no stage, be acted upon by individuals. Rather, robust systems and processes need to be adhered to in order to enable both parties to undertake his/her roles in a manner that has maximum benefit for the wider community and demonstrates good governance.
Recommendations: Develop robust and detailed governance training for both Councillors and CoGB staff. Mandate ongoing training and education in Governance, roles and responsibilities, communication protocols (internal and external), and the Code of Conduct for all Councillors and Directors.
4.4
Setting the councils direction
Corporate vision and strategic planning

Observation: Recent issues have strained the relationship between some Councillors and some CoGB staff. Anecdotal evidence from Councillors suggests that it can sometimes be difficult for Councillors to obtain the entirety of information from CoGB staff. Throughout the Review, a number of Councillors referred to the sell it, dont tell it approach to information sharing by some staff members. This can leave Councillors feeling that all of the facts have not necessarily been presented to them in a clear and concise manner. Readers are referred to Case Studies on the Golden Square Pool, Edward Street Car Park and the Grace Kelly Exhibition, within this report, for specific examples of where this has occurred. A clearly defined, coherent and communicable corporate vision allows an organisation to:

Prioritise its strategic objectives Become resistant to failure Foster strong relationships between all areas through an environment of common purpose
The current relationship between a few Councillors and staff is having a negative impact on our team. Morale of the team during this period of uncertainty and with the negative criticism targeting staff across the organisation is taking a toll. Staff are not as willing to volunteer for events when there is a lack of trust and respect for officers
The Council Plan and the Strategic Resource Plan are important documents in ensuring that the corporate vision remains the focus of the organisation and that good governance is maintained. The Council Plan outlines the strategic objectives for the municipality and the relevant actions and strategies that the council will employ to achieve these. The Council Plan can be reviewed and updated as required and formal consideration of the plan by the council must occur each year. The Strategic Resource Plan outlines the resource requirements for a council to achieve its strategic objects and forms part of the Council Plan. The Plan includes both financial and non-financial resource requirements for the next four financial years. The complexity of strategic planning for a municipality presents significant challenges for a council. Following proper process will assist all voices within the council to have equal opportunity to be heard and that the best interests of a community prevail over personal agenda. When processes are inclusive and transparent, the relationship between councillors and the organisation will encourage respect and the sharing of information for general betterment of the municipality. The Council Plan 2013-17 was adopted on 19 June 2013 and outlined a Vision statement, included in this Report in Section 3.5. Current strategic planning undertaken by CoGB aligns with the previous Councils Vision. Reassessment of Councils strategic planning, following finalisation of the Council Plan 2013-2017, will provide alignment with the new Councils Vision.
What is the decision making process?

Continual review of the decision making process, and the extent to which it is followed, is likely to:

Reduce the levels of complaints received by councillors and the organisation Assist in meeting community consultation expectations Mitigate the risk of inappropriate behaviour by any councillor or officer
The process that needs to be followed is clearly outlined within the Victorian Good Governance Guide includes five stages. These are explained within Figure 6.
Setting the Agenda
What are the issues that will be considered? Thorough strategic planning processes must be followed Councillors must be prepared to negotiate and compromise
Gathering Information
What are the objectives of a council?

There is often disagreement over whether the purpose of a council is to primarily provide essential services or to take on the role of economic enabler within the municipality. The reality is that council must strike a balance between the two objectives that allows the community to thrive. Regardless of the balance that may suit a particular community, the emphasis of council should remain high level, focusing on strategy and policy without getting disorientated by the minutia of operations.
Preparation of unbiased information for councillors by the organisation The Council Report should be clear and concise, providing councillors with options and the appropriate tools to make good decisions Stakeholder consultation
Forming an Opinion
Councillors given an opportunity to form an opionion based on the information, data and recommendations provided to them Council briefings to assist councillor understanding Council meetings to accommodate robust debate
Budget process Currently, Councillors are formulating the 2013-14 CoGB Budget. This process highlights the problems faced when trying to achieve a balance between service provision and economic enablement. Reports in the media and from internal and external stakeholders have indicated that Councillors have requested that CoGB staff indicate ways to reduce operational expenditure (reported to be 10%) in order to increase capital expenditure. As a result of this internal expenditure request becoming public, angst amongst the community, CoGB Councillors and staff has developed. This puts CoGBs governance arrangements into question.
Making the Decision
Formal decisions made at council meetings Where possible, meetings should remain open to ensure accountability and transparency Meetings should be chaired impartially by the mayor and each councillor demonstrate good conduct to maximise the productivity of the meeting
Implementing the Decision
The organisation will prepare reports for the council, establishing a process for the efficient and effective implementation of a decision Informing constituents and the community of formal decisions and the process by which they will be implemented
Figure 8 | Council decision-making process
4.5
Overarching good governance principles

Fortuna Villa Fortuna Villa is a Victorian mansion in Golden Square. The site was, until its sale on 12 April 2013, owned by the Commonwealth Government. The Commonwealth had owned the site since 1942 and had used the site as a base for the Army Survey Regiment and defence mapping. Since becoming surplus to the Commonwealth needs in 2008, there have been several unsuccessful proposals and plans to convert the site into a public space. Recently several high profile members of the Bendigo community indicated publically that they were formulating plans to ensure Fortuna was retained as a community-owned asset. According to media reports and minutes from the Ordinary Meeting of Council held on 27 March 2013, the plan involved significant monetary contributions from the CoGB, State and Federal Governments for purchase of the property, its development and ongoing maintenance. It also involved the development of a former mining site opposite the Fortuna Villa. Concerns were raised that the development of this land was not a viable option due to the number of mine shafts present and the level of contamination. While this proposal was being considered, the Department of Defence (DoD) announced that the auction of the property would occur on 12 April, 2013. A number of Councillors continued to lobby the Defence Department to delay the auction while the proposal and alternate funding arrangements were considered. This included a Special Meeting of Council on 11 April, 2013. The Fortuna auction process has raised a number of issues for CoGB to consider: Financial and resourcing impacts: A significant amount of time, effort and money was spent by CoGB to lobby both the State and Federal Governments regarding this issue. This included meetings with State Government official and a trip to Canberra for the Mayor and CEO to meet with DoD representatives to lobby for a delay to the auction. Governance: There are clear guidelines and media protocols in place for Councillors. These were not followed leading up to the Fortuna Villa auction. CoGBs role as a region leader / Bendigos perception in the media: A number of stakeholders interviewed indicated that the Fortuna issue caused concern to them as it indicated that the Council was acting in a highly reactionary manner. They considered actions by some Councillors to be unprofessional. Community consultation and communication: Regardless of the community consultation undertaken by CoGB prior to the auction, it would appear that there was an apparent lack of planning and communication of strategy by CoGB regarding Fortuna. CoGB should have clearly articulated its visions and strategy for this site to the community. It would appear that the position of Council and CoGB was unknown or not clearly communicated, which led to individual Councillors taking up the cause once the auction was announced. The position of Council and CoGB should have been made clear and this position maintained by all individual Councillors.
Good conduct
Good governance of an organisation is not achievable without the good conduct of its members. This is vital for the success of any council and therefore it is of paramount importance that each councillor and member of the organisation has a thorough understanding of how they can demonstrate, promote and encourage positive behaviour within his/her working environment.
Good Conduct
Good Relationships
Good Governance
According to the Victorian Good Governance Guide, good conduct requires the demonstration of the following attributes by councillors:

These actions have also led to an unproductive disconnect between the councillors group and senior staff. There is now an adversarial tension between the two most important groupings within the council which should be ended.
Impartiality Integrity Honesty Diligence Respect Leadership Avoidance of conflicts of interest Acting within the law
It is important that good conduct is embraced by councillors as it gives an indication of both his/her ability as leaders within the community and the effectiveness, or otherwise, of the council as a whole. The level of respect shown towards a particular councillor by fellow councillors, the organisation, his/her constituents and the wider community, hinges on the extent to which he/she demonstrates good conduct. Councillors must also acknowledge the profile of his/her position and his/her ability to influence the behaviour of the general public within his/her constituency. The ability of an organisation to demonstrate good governance can be closely related to an individuals understanding of his/her role and what it does, and does not, entail. Section 76E of the LGA clearly states that a councillor is not permitted to improperly direct or influence a member of the organisation while acting in his/her role as an elected member of the council. Put simply, councillors cannot direct a member of the organisation and can only influence council officers using the formal processes in place.
Councillors Oath there needs to be clear separation of duties and responsibilities between Councillors, the CEO and the staff of the organisation.
Submission to the Independent Review Committee Following his/her election, councillors must take the Oath of Office in the presence of the CEO, as outlined within the LGA. They have no ability to act as a councillor until this has been completed. By taking the oath, councillors are swearing to undertake his/her duties in accordance with the principles of good conduct and good governance. Conclusion: On occasions, the behaviour of some Councillors has put the good reputation of Council as a whole into question. This has impacted on levels of trust both within Council and between Councillors and CoGB staff, and needs to be addressed to ensure CoGB can work cohesively towards achieving best-for-community outcomes.
Codes of conduct
The LGA requires that codes of conduct are developed and implemented for both the councillors and the officers within the organisation. These codes outline the behavioural expectations of both parties and the consequences for any breach. Recommendation: Reiterate the process for Councillors obtaining information, providing guidance on what is considered reasonable in relation to the matter under consideration.
Codes of conduct help councils and the administration think about their culture and articulate the desired standards of good behaviour.
A code of conduct is also developed for council officers and is a useful tool in aligning all staff with the expectations of the organisation. Allegations of breach of the Councillor Code of Conduct are a serious matter and require investigation, rather than mediation, which may be required for a dispute. The various levels of misconduct, and the processes for dealing with these, are outlined within Section 81 of the LGA and illustrated within Figure 9.
The Councillor Code of Conduct is reviewed within 12 months of the local government elections and provides councillors with the opportunity to become familiar with the underlying principles of good conduct and good governance. As stipulated by the LGA, the Councillor Code of Conduct:

Misconduct
Basic breach of the Councillor Code of Conduct
Serious misconduct
More disruptive behaviour and repeated misconduct
Gross misconduct
Highest level of misconduct - includes breaches on conduct principles and the LGA
Must include councillor conduct principles May set out processes for resolving internal disputes - conflicts Must be consistent with any Act or regulation Must be given to each councillor and be available for public inspection Observation: Some Councillors have indicated that the following behaviours may have occurred in the past, which do not align with CoGBs Councillor Code of Conduct:
A Councillor Conduct Panel may apply sanctions or require training or counselling
Dealt with by Victorian Civil Administrative Tribunal (VCAT)
Processed through VCAT following application for a hearing by the Secretary
Contacting junior officers directly by phone or email regarding an issue to obtain information when Councillors are required to contact the CEO or the relevant Director Making statements to the media when directed not to do so Speaking out about decisions made by Council in the media and public forums On some occasions, Councillors feel a lack of trust toward CoGB staff where Councillors feel they are not receiving the full story or have information requests denied or delayed.
Figure 9 | Levels of councillor misconduct
Councillor liability for actions and statements

Under the LGA, a councillors misuse of his/her position is a serious offence. Throughout his/her term, councillors must:

Not seek personal advantage for themselves or another person Not seek to disadvantage another person or party Use information for the purpose in which it was intended
Councils main responsibilities are to set the overall directions and goals for the municipality and then monitor their implementation and success.
Use and account for public funds in a lawful and transparent manner Not seek to improperly influence a member of council staff.
4.6
Occupational health and safety
Councillors are not protected by parliamentary privilege and are therefore exposed to the potential of civil action should they act outside the principles of good conduct. According to the Victorian Good Governance Guide, action can be taken by any person who believes they have been improperly harmed or defamed by a councillor. To act as protection against such action, the LGA requires councils to indemnify councillors when conducting their duties in good faith. However, this does not protect a councillor to the extent that parliamentary privilege protects members of State or Federal Parliament. It is crucial that councillors are constantly aware of his/her behaviour and his/her liability and the implications of inappropriate actions or statements.
Appropriate workplace behaviours

Employees at any organisation, public or private, have the right to feel safe and supported in his/her workplace. It is an expectation that each member of the council and the organisation treats his/her colleagues with respect, creating a healthy working environment, free from harassment, discrimination, bullying and political bias. Implementation of the codes of conduct is fundamental to instilling appropriate workplace behaviours of mutual respect, fairness and natural justice within the council and the organisation. Embedding these behaviours and values will strongly promote good governance and create a workplace that is safe, inclusive and focused on the community.
Governance and conduct training for councillors

Training conducted for Councillors at the CoGB includes the following topics:

The various roles within the Council and the CoGB, as an organisation Council decision making Councillor conduct principles and expectations Types and levels of misconduct Misuse of position, information and powers Investigations Conflicts of interest
Observation: CoGB has policies and training in place relating to bullying, discrimination and harassment prevention. This training is generally selfassessed and the frequency is often ad hoc and, in some cases, reactive in nature.
Review of this material and discussions with staff has indicated that the training provided was insufficient, particularly for Councillors beginning his/her first term. Internal and external stakeholders indicated that the whole induction process for Councillors should be improved, as there is evidence to suggest that some Councillors do not understand his/her role and responsibilities, nor how to interact with the community, media and organisation. Some Councillors receive support from other Councillors; however this is ad-hoc and does not apply to all new Councillors. Training and education of Councillors should be an ongoing process during his/her term of office. For example, ongoing, targeted refresher training should be undertaken on topical issues or interesting areas of CoGB, or areas where changes are occurring. Examples of such training may include:

Conclusion: Whilst no formal complaints or concerns have been raised to Aurecon regarding CoGBs existing policies and training relating to these matters, it would be pertinent of CoGB to conduct a review to ensure these align with best practice and individual performance and development goals.
Recommendation: Review CoGBs policies and training relating to bullying, discrimination and harassment prevention, and how individual training needs are assessed and align to performance and development goals.
Statutory planning; Planning scheme amendments; Home and Community Care and Early Childhood Services legislative changes; Asset management and capital works assessment framework; and, Budget process.
Income and expenditure and economic development
5. Income and expenditure and economic development

The challenge for Council is to get the balance right so we can build for the future without placing too great a financial burden on our existing ratepayers
City of Greater Bendigo 2011-12 Annual Budget
5.1
This Section of the Review has assessed income and expenditure items and CoGBs rating strategy. It has also assessed CoGBs role in economic development in the region. The Review has highlighted areas of achievement and improvement for CoGB. A particular area of investigation has been the communication of budgetary objectives, guidance to and accountability of Business Unit managers across CoGB. The outline of this Section is as follows: Section 5.2 Section 5.3 Background: Brief background of the approach followed to assess CoGB financial and economic profile: A summary of the current
Children and family services including maternal and childrens health and long day care ($4.3 million) Operation and maintenance of leisure, sports and recreational facilities across the Bendigo region ($4.5 million)
Infrastructure currently maintained by CoGB includes: Road renewal and infrastructure projects ($15.3 million annually) Waste water and flood mitigation work ($5.0 million) Bikeways and footpaths ($1.1 million) Civic landmarks and building projects ($7.4 million) Waste and recycling ($18.8 million)
income and expenditure and economic development; financial and economic profile to provide context to the analysis including a description of peer councils used for comparative purposes; Section 5.4 Section 5.5 Section 5.6 Directorate; Section 5.7 Section 5.8 Benchmarking: Financial and budget observations are benchmarked Conclusion: Concluding remarks. against selected peer councils within Victoria and Australia; and Financial and budget observations: A trend analysis of CoGBs Rating strategy: An overview of the rating strategy and investigation Economic development: A review and analysis of the Bendigo financial and budget history, forecasts and investigation of areas of interest; into its structure and compliance; Economic Development Unit and associated business within the City Futures
The Customer Service Charter of CoGB indicates that the goal of the organisation is to provide quality customer service that responds to the needs of our whole 7 community . In meeting this charter, CoGB is focused on finding the right balance between building for the future without placing too great a financial burden on the existing rate payers. Key questions that this Review has attempted to answer include: What are the key revenue streams and what are the underlying risks? Why are rate rises significantly above CPI? What are the key expenditure items and are these Business Units operating efficiently? What are the budgeted services and programs? Is the Council transparent, sustainable and compliant in conducting its financial duties? How are the Councils Directorates performing financially? How is the Economic Development Unit performing? Are there improvements that can be made with respect to making CoGB more financially efficient, particularly to do with service and program costs?
During the Review, financial information and organisational data was provided to Aurecon by CoGB. To the extent that this data has been presented graphically within this Report, no further validation or verification of the information has occurred following receipt.
This section outlines Aurecons investigations into the financial and economic functions of CoGBs income, expenditure and economic development. The focus has been on CoGBs investment and expenditure efficiency, measured by three types of return (Figure 10).
5.2
Background
6
Revenue for the 2013-14 Annual Budget is expected to be $162.9 million . This will be used to undertake capital works and provide services and to maintain Councils assets and programs. Its main activities focus on the provision of services and the asset renewal of city infrastructure. Services provided by Council include: Aged and disability services including general home care, personal care and respite care ($3.0 million)
7
City of Greater Bendigo 2013-14 Annual Proposed Budget, page 58
It is a challenge to balance the demand for services and infrastructure with the community's ability to pay.
Equitable monetary return Economic return
Ensure the net cost of existing operations is efficient and transparent Monetary return from investments is adequate depending upon their risk profile All new programs and major investments have a robust business case
Enabling services and supporting growth and development activities in the region which usually have an indirect economic and/or social benefit to the community and are generally the responsibility of a governing association.
The budget efficiency in terms of profit should be within the reasonable bounds to ensure solvency of the organisation. Ultimately all profits should be driven into value adding programs and activities for the community.
Account for relevant direct and indirect economic benefits and impacts to CoGB Maximise economic benefits and minimise economic disbenefits Optimise competing priorities of economies of scale and level of service
5.3
CoGB financial and economic profile
This section profiles the financial and economic baseline for CoGB region including an overview of its assets and service provision. CoGB consists of the CBD and metropolitan area surrounded by large agricultural areas and small towns. The municipality covers a land area of 3,048 square kilometres and includes 51,467 rated properties. The region achieves a Gross Regional Product (GRP) of $5.01 billion which is equivalent to $50,520 per person or $111,116 per worker (the Victorian averages are $61,373 and $129,847 respectively). As at the 2011 Census, Bendigo had an unemployment rate of 5.5% which is 0.2% 9 less than the Victorian average of 5.7% . To add context and background to the financial and economic analysis, this Review uses comparisons and benchmarks against similar local councils to identify what things CoGB are doing well and areas for improvement (Table 1). CoGB owns and manages over $1.185 billion of assets of which $1.128 billion are property, plant, equipment and infrastructure. The finance function is facilitated through the Organisation Support Directorate which provides financial services including rating and property valuations.
Staff FTE Unemp. Rate GRP ($M) Council Revenue # ($M) Ratio of Revenue to FTEs Ratio of Revenue to Pop.
Social return
Practice effective community engagement and communication Overall solution and purpose must be relevant to community needs Maintain a benchmarked level of service as a minimum
Figure 10 | Value Add Framework
These types of return provide a Value Add Framework for CoGB when making finance and budgetary decisions. This framework is similar to the triple bottom line (Economic, Environmental, Social) endorsed by the Victorian Government. The framework is also used in conjunction with the Best Value Principles adopted by the Victorian Government in 1999.
Council expenditure value proposition

As a Council, a robust finance function and corporate governance principles are key to ensuring all revenue and expenditure decisions add value to the Bendigo region. As described previously, this value add proposition may be monetary, economic or social. It is important for the core finance function to instill this culture across the entire organisation.
Council Pop n
City of Greater Bendigo City of Ballarat Greater Shepparto n City Council City of Greater Geelong
663
100,618
5.50%
$5,083
$158.15
$225,189
$1,484
Budget efficiency
The primary aim of CoGBs finance function is to ensure the value proposition of every investment and expenditure decision is justified using this framework, without placing too great a financial burden on the community or at the expense of service quality. The mandate and role of a council is to provide either essential services or enabling 8 services as described below :
646
93,502
6.20%
$4,767
$146.40
$226,625
$1,566
483
60,449
5.80%
$3,129
$111.70
$231,263
$1,848
1414
210,875
6.00%
$10,111
$261.30
$184,795
$1,239
Table 1 | Council peer analysis referred to throughout this section10
Essential services are typically the provision of amenity and utility functions which are not commercially viable in their own right.
Local Government Performance Reporting Framework, Department of Planning and Community Development, 2012.
Australian Bureau of Statistics (ABS) 2011, Table Builder Pro, Census Data, Canberra. 10 Revenue information for this table based on 2011-12 Annual Reports. Throughout the Review, comparisons with these councils have been made using information that is publically available.
I am confident that this budget will continue the City of Greater Bendigos track record for delivering quality infrastructure and services through prudent financial management.
City of Greater Bendigo 2011-12 Annual Budget
All councils listed above have been identified as similar entities to be used for peer analysis. Except for Geelong, the councils chosen have similar population sizes, revenue and staff FTE. Due to the larger population base, the City of Greater Geelong has lower revenue to FTE and population ratios. For the 2011-12 financial year, CoGB had an operating surplus of $21.5 million and a liquidity ratio of 160% (from holding $46.6 million of current assets and $28.4 million of liabilities). CoGBs financial statements and budgets are analysed in more detail in Section 5.4. Key assets owned and maintained by CoGB are described in Figure 11.
Current reporting parameters The financial sustainability objectives indicate that the following key strategic parameters are to be met: Underlying result %: A positive result indicates a budget surplus (the larger the percentage, the stronger the result). A negative result indicates a budget deficit. Measures the ability to pay existing liabilities in the next 12 months. Measures the ability to replace assets using cash generated by the entitys operations. Comparison of non-current liabilities (mainly comprised of borrowings) to own-sourced revenue. The higher the percentage, the less able to cover non-current liabilities from the revenues the entity generates itself. Comparison of the rate of spending on infrastructure with its rate of depreciation.
Liquidity: Self-financing:
3,270 kilometres of roads 700 public buildings and structures 285 bridges 70 sporting reserves 14 garbage compactor trucks 12 swimming pools 1 art gallery
Figure 11 | Key CoGB assets
Indebtedness:
Capital replacement:
Operational efficiency: Improve organisational process to achieve financial efficiency. Conclusion: The current financial reporting meets the standard for the Victorian Auditor General Office (VAGO) and DFT guidelines, as indicated by VAGO. Additional reporting parameters The Local Government Performance Report Framework Directions Paper and 12 Draft Working Paper on Performance Report Framework and Indicators outlines a number of financial performance indicators which should be considered in developing financial governance parameters. The following parameters have been presented as a summary of the findings. These performance parameters would add value in terms of understanding asset renewal and understanding cost efficiency and are also used by a number of other councils around Australia.
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5.4
Financial and budget observations
At a high level, this Review has studied CoGBs financial history and forecasts to gain an understanding of the budgeting and financial reporting processes in place. To conduct the Review, a trend analysis was completed analysing income and balance sheet statements, internal budget records and the 10 year Long Term Financial Plan. This analysis then highlighted areas for further investigation and the formulation of Recommendations. The Review investigated the strategic planning framework as endorsed by Council to enable its planning, resourcing and reporting of capital and program expenditure.
Financial governance
Effective and transparent communication of the organisations financial objectives and governance is important. The Review has found that the current process of reporting is in accordance with the LGA 1989. Compliance with regulations and guidance of the Municipal Association of Victoria (MAV), Department of Planning and Community Development (DPCD) and Department of Treasury and Finance (DTF) has also been assessed.
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Local Government Performance Reporting Framework, Department of Planning and Community Development, 2012. 12 Draft Performance Report Framework and Indicators Working Paper, Department of Community Planning and Development, 2013
Performance of financial investments
The Strategic Resource Plan, included in the Council Plan, summarises the financial and non-financial impacts of the objectives and strategies and determines the sustainability of these objectives and strategies. The Annual Budget is developed taking into account the activities and initiatives which contribute to achieving the Councils strategic objectives.
City of Greater Bendigo 2011-12 Annual Budget .
Other than the revenue generation from rates, service charges and fees, councils have the advantage of conducting low risk financial investments using their equity to generate further value for the community in monetary, economic and social returns. Benchmarking asset cost efficiency The cost of maintaining and renewal of CoGB assets is an important function to control. This financial performance measure is similar to the capital replacement; however it goes a step further by setting annual targets for these costs which should be benchmarked against other councils and commercial enterprises. Asset consumption ratio Asset consumption ratio flags the written down value of infrastructure assets divided by gross current replacement cost of infrastructure assets. This measure identifies whether the council is under or over maintaining the assets. Asset sustainability ratio Asset sustainability ratio determines the proportion of capital expenditure to replace assets, which as a ratio the total renewals divided by depreciation expense. This measure identifies if the council is under or over spending on asset renewal programs.
Equitable monetary return
Economic return
Social return
Figure 12 | Three forms of return from council expenses and investment
On a project level, financial governance should include robust project feasibility and business case rationales based on the three value principles. Projects must also align with the purpose and mandate of CoGBs core business which supports the delivery of social infrastructure, services and act as a catalyst for business investment and economic activity. If CoGB plans to venture outside this core business realm, a robust business case assessment to determine return and benefits to Bendigo should be prepared and analysed. For an example of a Major Capital Investment project undertaken by CoGB which should have had a more robust business case, refer to the Case Study on the Edward Street Car Park (page 98).
Conclusion: While current financial reporting by CoGB is in accordance with LGA 1989, some improvements could be made in reporting based on current work being completed by DPCD. This is discussed further in the Section on Quality of Service, however is also mentioned here as it relates to additional financial reporting.
Observation: This Review has identified that there is an observed disconnect between the financial function of CoGB and the wider organisation with many managers and staff not understanding the financial goals of Council activities. This is evident in regard to periodic reporting of financial performance and principles of value managing strategies. Anecdotal evidence gathered during the Review has described this disconnect between the aspirations of the Finance Team and the delivery of these goals and aspiration through the Directorates. In addition, the Review has found that some of the financial documentation contains errors. An example of this is CoGBs Rating Strategy within the 2012-2013 Annual Budget which contains a number of typographical errors, particularly in reference to financial years. Meetings with the Finance team indicated that historically financial reporting was conducted within Finance, with minimal management accounting undertaken by the Directorates. The management accounting function within CoGB is being improved, with additional focus on tracking and accounting for variances in monthly reports.
Recommendation: Implement a performance management: Framework; Change management plan; and, an information technology software system
Governance principles and risk

To instil a culture of financial value-add strategies, periodic financial performance and accountability, CoGB could drive these behaviours through the publishing of an internal financial report with a familiar format each half-yearly period (as a minimum). This report should also discuss financial performance measures and understanding of the three value principles (Figure 12). Conclusion: The management accounting function within CoGB is being improved, and will lead to an increased level of understanding of financial reporting and financial goals across the organisation.
The City of Greater Bendigo continues to be in a strong financial position. Debt and working capital levels will be closely managed as significant investment in capital works are required.
City of Greater Bendigo 2011-12 Annual Report
Recommendation: Mandate the consistent completion of business cases (or other similar financial analysis documentation) to investment grade for all investment projects. DPCD also recommends that financial risks must be managed prudently according to Section 136 of the LGA. This legislation requires that Council must implement the 13 principles of sound financial management which include : Manage financial risks faced by the Council prudently, having regard to economic circumstances Pursue spending and rating policies that are consistent with a reasonable degree of stability in the level of the rates burden Making decisions and taking actions with regard to their financial effects on future generations Maintain full, accurate and timely disclosure of financial information relating to the Council
Finding: The Review has found that the current financial planning and budget forecasting process is a robust method to prioritise short term and long term objectives of CoGB. The following documents are used by CoGB to plan over a range of terms:

Long term: CoGB 2036 Plan and CoGB Long Term Financial Plan Medium term: Council Plan 2013-2017 and CoGB Strategic Resources Plan Short term: CoGB Annual Budget and CoGB Annual Report.
Figure 13 describes these short to long term principles to sustainable financial planning and management.
Financial risks include:

The level of Council debt The commercial or entrepreneurial activities of the Council The management and maintenance of assets The management of current and future liabilities Changes in the structure of the rates and charges base Finding: CoGB is following these financial and risk management principles. However, areas for investigation and concern in relation to the management and maintenance of assets and current and future liabilities will be identified in the following subsections. (Local Government: Results of the 2011-12 Audits November 2012, by Victorian Auditor Generals Office)
Conclusion: Some public service governing bodies can be dictated by elections and short term policy actions to create a short term horizon for planning and implementation. The framework employed by CoGB strives to overcome the short term priorities created through electoral cycles and plan for aspirations over a range of terms.
These plans are reported through the Annual Report and Audited Statements as required by the Victorian Auditor General guidelines. The CoGB Long Term Financial Plan covers the important financial performance parameters which provide certainty of the revenue and expenditure forecasts to the organisation and immediate stakeholders (i.e. contributors and state funding grants) of 14 the financial objectives . CoGBs budget influences can affect planning and forecasting, particularly when they are outside the control of the CEO, Directors and Managers. The 2011-12 Budget outlines the budget principles and related issues, and the significant components are 15 set out below .
Financial planning and forecasting

A high level Review of CoGBs financial planning and budget forecasting process was undertaken. Aspects investigated were: The financial planning mechanism and the method to adopt Council wide objectives, The elasticity of the financial planning process to cater for external and internal budget influences The strength to cater for special cases such as the Defined Benefits Superannuation Scheme.
Budget principles
Internal influences

A systematic method of ranking capital works projects and assessing the competing funding priorities between capital works projects Staffing numbers, staffing retention and career progression Increasing requirements to renew and maintain assets due to aging infrastructure
13
Financial Management 2013, Guide to Local Government, http://www.dpcd.vic.gov.au/localgovernment/guide-to-local-government/planningand-finance/financial-management, accessed 10 May 2013,
14 15
City of Greater Bendigo Long Term Financial Plan, November 2012 City of Greater Bendigo 2012-13 Annual Budget, Adopted 25 July 2012
External influences
There appears to be little publically released benchmarking of Bendigos expenditure, actions and achievements against Victorias other ten regional cities. Are our rates higher/lower or in the middle? Do other regional municipalities receive services that are not provided in Bendigo (e.g. green waste, recycling)? How does the percentage of wages expenditure in Bendigo compare to other regional Councils?
Constrained Federal and State Government fiscal environment Legislative changes to Federal support for Council contributions The increasing regulatory environment is creating higher compliance and capital works costs (landfill levies, bushfire levy, carbon tax, engineering compliance)
Critical Short-Term Sustainability

Working capital Cash liquidity Debt levels Adequate range and level of services Minimal capital expenditure
Medium-Term Sustainability
Long-Term Sustainability
Good range of services at an acceptable service level Adequate capital expenditure and working capital Adequate cash Operating surplus Asset renewal equals depreciation
Spending on more asset renewal than depreciation Fully funding replacement gap and Asset Management plans Significant capital expenditure Strong cash funds Operating surplus (not abnormal and capital funding)

Regional growth and sustainability of the Loddon Mallee region in terms of transformative projects such as the NBN, Bendigo Hospital development, road and rail upgrades, universities and planning for future sustainability of agriculture and businesses across the region Financial constraints being felt by Federal and State Governments are passed on to local government in the form of reduced grants Cost-shifting from other tiers of government impose a significant and increasing burden on local government brought about by changing legislation and regulation or where policies that are adopted and initially implemented across the nation or state are then passed to local government for ongoing application An increase in extreme weather events and increasing temperatures are already significantly impacting on CoGB planning and emergency preparedness. Councils are seen to be important role models and leaders in both of these areas because of their ability to reach their entire population and to make planning decisions to enhance the wellbeing of the majority. The expected significant and relatively rapid increase in the Greater Bendigo population is expected to provide both opportunities and challenges. One of the silver linings of this expected growth is the higher proportion of young families settling in Bendigo. The challenge is to facilitate sufficient growth in housing availability, education and employment opportunities and other family-centred infrastructure is significant. Access to high speed internet services is as much a business necessity as it is a social asset. The expected advantages brought about by NBN access in Bendigo is expected to facilitate further expansion of knowledge-based employment opportunities, a major opportunity in small towns and rural areas. Bendigo is experiencing an issue in terms of maintaining a healthy asset renewal program. CoGB will need to take major financial decisions to accommodate the future growth of the city and maintain its appeal as a place to live, work and visit.
Long term financial plan

Figure 13 | Department of Planning and Community Development endorsed financial sustainability principles
Aurecon has assessed the CoGB 10 year budget forecast against the Victorian Auditor Generals Office (VAGO) financial performance indicators.
Best Value Framework The Best Value Framework aligns with the legislative budgeting consideration requirements and includes two new budgeting considerations from the 2011-12 budget. These budgeting considerations value add by accounting for operational efficiency yields to improve service delivery and a social investment principle which will reduce the reliance on CoGB for community services. To maintain a sustainable operation, the best value framework must consider the short to long term horizons as presented in Figure 13. Current challenges and opportunities CoGB is currently facing a number of general council and regional specific issues 16 which are set out in the CoGB 2013-2017 medium term plan . These challenges and opportunities will affect financial planning and are summarised below:
Finding: All forecasts are generally in the acceptable region; however two indicators as described on Figure 14 are on-going concerns, namely the areas of liquidity and capital replacement forecasts.
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City of Greater Bendigo Draft Council Plan 2013-2017, May 2013
CGB could measure rates within a set quartile range of comparable local governments with similar total property values and rate of growth. Any movement outside the quartile should require justification to rate payers.
Special Note: Defined Benefits Superannuation Plan (DBP) The DBP that was setup in the 1982 remains a large liability on council balance sheets. The superannuation fund for approximately 5100 pensioners and 2200 beneficiaries has called on Victorian councils to make up contracted cash flow shortfalls. The superannuation plan contracted councils to make up any shortfalls in fund investment return. The causes for the shortfall are attributed to: fund investment performance well below the required earning rate of 8.5% p.a changes in actuarial assumptions, which reduced the future earning rate of the Fund salary growth of employers exceeded the actuarial assumption of 4.25%.
Last year, a shortfall liability of $10.5 million had been called from CoGB which required the contribution to come from funding across the Councils budget restricting future capital projects and increasing liabilities on Council. Important advice to CoGB from the MAV Defined Benefits Taskforce Final Report recommends the following: Councils should fund their shortfalls out of equity rather than debt Councils should be mindful of the impacts from delayed capital expenditures Give members the option for the Council to buy-out entitlements (early termination provision) Councils should only use the Vision Super payment plan option in the event they have exhausted other funding options Increase employee contributions, where feasible Councils should be mindful of above normal wage rate movements and educate members on non-cash remuneration options.
Figure 14 | Selected CoGB VAGO indicators over a 10 year forecast
Conclusion: The lack of liquidity can become an issue, particularly if revenue receipts from rates or fees and charges unexpectedly decrease or if costs, levies and fees unexpectedly rise. Strict monitoring is required.
Recommendation: Monitor working capital (liquidity) and the capital replacement financial ratios including any internal or external factors which will adversely affect these and, if necessary, take corrective action.
Adoption of these recommendations will improve how CoGB can meet the current shortfall and monitor the risk of future shortfalls and understand the influence of its management decisions. Please refer to the MAV Defined Benefits Taskforce Final Report (13 December 2012) for further detail.
To remediate liquidity issues on a long term basis, cash flow related to short term incomes and liabilities can be improved in either of two ways. The first is to tighten up payment and creditor terms on accounts receivables and payables and the second is to avoid transactions with high uncertainty or where contractual and financial hedging cannot be used to reduce risk, as they are outside the limitations of assets CoGB can own. An important budgeting topic which has led to a number of unexpected budgetary 17 challenges has been the Defined Benefits Superannuation Plan . The special note on the right discusses the liability issue for CoGB.
Conclusion: The Defined Benefits Plan is a significant issue for CoGB as there is potential for significant liability calls in the future.
Recommendation: Engage a specialist to define strategies for CoGB to reduce the burden of the Defined Benefits Superannuation Plan liability.
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Defined Benefit Plan Final Report, MAV Defined Benefit Taskforce, December 2012
Council operating result

Figure 15 describes the financial results and position for CoGB as reported in the 18 2011-12 Annual Report .
The key financial ratios for consideration are:
Indebtedness Ratio (Non Current Liabilities/Revenue) 2011-12 This ratio compares non-current liabilities (including loans and landfill provisions) to own source revenue. Own-sourced revenue is used because it does not include capital grants. The higher the percentage, the higher the amount of debt liability borne to the organisation. A ratio of 35% is desirable. A ratio above 60% is considered high risk to financial sustainability. CoGB has a lower debt liability than the desirable level, therefore is performing well against this metric.
CoGB Value
Current Assets
City of Greater Bendigos balance sheet accounts as of 30 June 2012

Non Current Assets Cash $38.4 million Property, infrastructure, plant and equipment $1.128 billion
Receivables $7.8 million
Trade and other payables $20.4 million
Provisions $4.9 million
Current Liabilities
Provisions $10.4 million
Loans $12.8 million
Non Current Liabilities
Level of Working Capital Ratio (Current Assets/Current Liabilities) 2011-12 This ratio measures the ability of a council to pay existing liabilities within 12 months. The lower the percentage, the higher risk to the organisation that it will be unable to pay for current liabilities. A ratio of 180% is desirable. A ratio less than 100% is considered high risk to financial sustainability. CoGB is below the desirable level, but not yet in the high risk category. Therefore, performance against this metric is midrange.
Council Equity
Asset Revaluation Reserve $601.2 million
Accumulated Surplus $530.7 million
CoGB Income and Expense

State of City of Greater Bendigos income statement as of 30 June 2012
Rates $73.8 million Income Contributions $14.4 million User fees and charges $23.7 million Government Grants $40.5 million Statutory Fees and Fines $3.4 million Operating Result Employee Benefits $55.3 million Expense Plant and Equipment Op Expenses $4.3 million
Contract & Service Payments $51.9 million Depreciation $26.1 million
Investment Gap (Total Capital Spending / Depreciation Expense) 2011-12 This is a measure of whether local governments are spending on infrastructure at a greater rate than the infrastructure is depreciating. The lower the percentage, the higher the risk to the organisation that it will not be investing enough in growing its asset base, creating an investment gap. A ratio of 200% is desirable. A ratio less than 100% is considered high risk to financial sustainability. CoGB is performing well in this measure, with a ratio slightly lower than the desirable level, but well above what would be considered high risk.
$16.3 million (ROA 1.37% ROE 1.42%)

NOTES - ROA: Return on Assets ROE: Return on Equity
Figure 15 | Graphical summary of the financial position for CoGB as at 30 June 2012
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CGB should evaluate business and residential relocation to Bendigo to identify trends and action available to CGB to sustain growth. CGB should seek to influence State and Commonwealth Government initiatives including NBN, regional rail, regional road and airport infrastructure.
Submission to the Independent Review Committee .
Renewal Gap (Total Renewal and Upgrade Spending / Depreciation Expense) 2011-12 This ratio is a comparison of the rate of spending on existing assets through renewing, restoring, and replacing existing assets with depreciation. The lower the percentage, the higher the risk to the organisation that it is not renewing its current assets, leaving a renewal gap. A ratio of 100% is desirable. A ratio less than 50% is considered high risk to financial sustainability. CoGB has a below average renewal gap compared to the desired level, but is not in the high risk category.
The financial overview in Figure 15 describes the financial status and performance of CoGB as of 30 June 2012. The figure confirms that a large proportion of assets are maintained as cash and are adequate to cover the working capital requirements of the non-current liabilities as described by the working capital ratio. Most of CoGBs long term assets are held in property, infrastructure and equipment, whilst long term liabilities are maintained as loans and provisions for various long term liabilities such as superannuation and long service leave. The large amount of property, infrastructure and equipment assets is typical of a council organisation. This can present a risk to its solvency since their true value can be subject to accountancy standards as many assets are intangible and there are no secondary markets for many of these assets. This is why asset management strategies which include condition assessments to evaluate future renewal costs must be periodically completed; rather than relying on the depreciation rate as a measure of asset value and renewal. The operating result return is $16.3 million indicating a Return on Assets (ROA) of 1.37% and Return on Equity (ROE) of 1.42%. A positive operating result indicates that the budget has achieved a surplus which is reinvested into capital projects that would otherwise not be funded. This result also indicates that CoGB has low levels of debt compared to the average Victorian council. VAGO indicators indicate that CoGB finances are healthy, with some areas identified for improvement. The following section discusses the key sources of revenues and expenses as well as which Business Units present the greatest risks to the operating result.
Figure 16 | Actual and forecast sources of CoGB revenue as sourced from 2012-13 Budget data, 2009-10 through 2014-15
Beyond 2011-12, it is forecast that most revenue increases will be sourced from an increase in rates and charges with a minimal change in revenue from user charges, fees and fines. Contributions and government grants are forecast to remain stationary. Table 2 presents the revenue items and relative proportions through to the 2014-15 forecast year. Table 3 shows the rate of change in each revenue item compared to the previous year.
Revenue Rates and Charges Statutory Fees and Fines User Charges, Fees and Fines Reimbursements Contributions Government Grants Interest on Investment Other Revenue 2011-12(a) ($) 73,809 3,409 23,758 401 14,425 40,587 1,759 155 158,148 % 47% 2% 15% 0% 9% 26% 1% 0% 100% 157,864 2012-13(f) ($) 79,814 3,172 21,134 274 13,462 38,536 1,472 % 51% 2% 13% 0% 9% 24% 1% 0% 100% 162,845 2013-14(f) ($) 86,492 3,286 24,071 334 15,795 31,047 1,820 % 53% 2% 15% 0% 10% 19% 1% 0% 100% 172,450 2014-15(f) ($) 93,295 3,424 24,941 347 16,239 32,284 1,920 % 54% 2% 14% 0% 9% 19% 1% 0% 100%
Council revenue
CoGB key sources of revenue are rates, user charges and statutory fees, fines and government grants. Figure 16 shows the sources of revenue as stated on the income statement for the historical period of 2009-10 to 2011-12 and forecast period of 2012-13 to 2014-15
Total Revenues
NOTE: (a) actual (f) - forecast

Table 2 | Revenue sources and relative proportions over the 4 years from 2011-12 to 2014-15, sourced from 2013-14 Budget
As a Government entity, it is imperative that COGBs financial status remains in the low to medium risk category as defined by the Victorian Auditor Generals Office. If COGB maintains Low Risk status, it has the ability to respond should the unexpected occur.
Year on year % change in Revenue

Rates and Charges Statutory Fees and Fines User Charges, Fees and Fines Reimbursements Contributions Government Grants Interest on Investment Other Revenue Total Revenues
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2009-10 to 2010-11(a)
8% 1% 9% -55% 82% -4% 36% 358% 12%
2010-11 to 2011-12(a)
8% 10% 27% 25% -35% 29% -16% -78% 8%
2011-12 to 2012-13(f)
8% -7% -11% -32% -7% -5% -16% NA 0%
2012-13 to 2013-14(f)
8% 4% 14% 22% 17% -19% 24% NA 3%
2013-14 to 2014-15(f)
8% 4% 4% 4% 3% 4% 5% NA 6% Figure 17 | Top 10 revenue sources (2013-14 financial year)
NOTE: (a) actual (f) forecast

Table 3 | % change by Revenue item over the 5 years from 2009-10 to 2014-15, sourced from 2013-14 Budget
The Rates and Valuations and Finance Units manage the largest revenue streams. Investigations have revealed that a number of revenue streams have high variability for the period 2008-09 through 2011-12. This indicates that some areas are consistently varying from actual budgets. A cumulative absolute variance measurement was used to quantify this variability (Figure 18). The variance measurement ignores whether this difference is positive or negative and is derived from cumulative historical data for the 2008-09 through 201112 financial years. A high cumulative difference indicates that the budgeting process is failing to accurately forecast the monetary provision for this revenue item which should be investigated further.
Finding: The historical and forecast rates of change in revenue are increasing for rates, user charges and statutory rates and charges income. Federal Government contributions are reducing.
Figure 17 describes the top 10 sources of revenue for the 2013-14 financial year.
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Year on year growth for rates and charges is 8%. This consists of a forecast rate increase of 6% and an additional 2% increase in revenue due to new land developments in Bendigo.
Figure 18 | Cumulative difference from budget for the top 10 revenue streams (2008-09 through 2011-12 financial years)
The level of human services and capital spending undertaken by councils means that shifts in related costs are the chief determinants of cost movement for the sector.
Local Government Cost Index 2011, Municipal Association of Victoria
Finding: The revenue streams with the highest cumulative difference from budget are the Community Service Unit, Debt Redemption Unit and BenCon income. The correlation between high variance and substantial income indicate the highest risk to the Council revenue forecasting. To this end, the Business Units which present the largest revenue risk to Council are the Community Services Unit, BenCon and the Finance Unit (which manages the fines fees and charges).
Financial Year
City of Greater Bendigo City of Ballarat Greater Shepparton City Council City of Greater Geelong
2013-14
6.0% 7.5% 4.4% 4.5% 5.1%
2014-15
6.0% 6.5% 4.9% 4.5% N/A
2015-16
6.0% 6.0% 4.9% 4.5% N/A
21
2016-17
6.0% 6.0% 4.9% 4.5% N/A
Revenue sources and Business Units of interest will be discussed in the following sections. Rates and charges Rates and charges from the Bendigo rateable properties and property service charges contribute the greatest revenue stream for CoGB. The rate increase is forecast to be 6% p.a. over the next four years which is on par with other equivalent 20 regional councils (Table 4). The average Victorian rate rise is 5.1% this coming financial year. Bendigo and Ballarat have both indicated their rate increase is above this average, with Shepparton and Geelong below. Data on upcoming rate increases was limited at time of writing. For the 2012-13 year, Shepparton indicated that one of the drivers behind the relatively low increase (compared to the Victorian average) is greater efficiency measures. It is likely that these measures will continue into this coming financial year and are one of the reasons behind the 4.4% rate increase. At time of writing, Geelong is yet to announce their Rating Strategy, however indications from the 201213 Strategy are that the residential capital improved values were reassessed in 2012, which when combined with a significantly larger population base, means the rate increase per property can be lower overall. These high rate increases compared to the CPI (Consumer Price Index) inflation of typically between 2% and 3% are due to the need to rectify the large asset renewal liability, increasing regulatory environment from the administration of State and Federal levies and the decreasing reliance on Federal Government contributions. Many councils are battling the same cost pressures. The rationale for these rate rises have been investigated in more detail in the Rating Strategy (Section 5.5).
Victorian Average
Table 4 | Comparison of rate escalations over the next four fiscal periods
For the same period, Bendigos dwelling and population growth forecasts are between 1.5% and 1.8% per year. Land valuations have experienced a recent annual property 22 price increase of between 5% and 6% . Components of the rating structure which present risks to CoGBs stream of revenue, include, but are not limited to:

Property value changes to the Capital Improved Valuation (CIV) of properties, particularly in the case of a decline in property prices in the region Determining the right mix between CIV and equitable allocation of municipal standard charge components on rated properties Justifying the forecast rate increases to the community at the risk of price gouging
Further analysis regarding rates is included in the Rating Strategy (Section 5.5). Statutory fees, user chargers and fines There is currently a phase change underway in the role of local government, with more emphasis on councils to administer Federal and State levies. This phase change includes decreasing Federal contributions which in effect are increasing rates for the short term. This cycle is forecast to end over the next 5 years. Revenue stream components of statutory fees, state appointed levy contributions, user charges for Council services and fines are forecast to rise by between 1% and 5% per year. . Statutory fees are typically set by legislation and therefore Council has no influence on the amount charged. These fees include the landfill levy and passing on the cost of the carbon pricing mechanism. An additional Victorian Government statutory levy is the fire services levy to fund fire services. As of June 2013, this levys implementation has been confirmed. It will be regulated by the State Government but collected by councils. This is due to begin in the 2013-14 financial year.
21 20
The rate increase is the % increase in the average rate charged to a property which is worth the median property price within the LGA.
Community service needs, taxes & levies hit council rates, Municipal Association of Victoria, 29 June 2012 22 RP Data Professional, Bendigo Suburb overview, https://rpp.rpdata.com, accessed 1 May 2013
CoGB generally charges nominal fees for use of CoGB assets. Examples include a full day hire fee of $270 (including GST) for the Queen Elizabeth Oval or $77 (including GST) for a day hire of any of the major parks around Bendigo. The Customer Support Unit handles the administration for bookings for CoGB facilities; however hire fees for facilities are set by the Unit in charge of the asset. For example, parks and gardens access fees are set by the Parks Unit; fees for sporting grounds are set by the Recreation Unit.
Incentive Pricing is utilised where certain behaviours are encouraged by pricing above full cost recovery. Full Cost Plus Margin Pricing or Market Pricing is applied to services considered discretionary and is without strong social benefit, or ancillary to the social benefit of the service.
Government grants and contributions CoGB has forecast no increase in government funding over the next few years. Councils are generally becoming less reliant on Federal Government contributions as they have been increasing at less than inflation over the past few years. Smaller rural councils typically rely upon rate income of around 40%, with metropolitan councils relying upon 60% of their income from rates. Therefore the rural councils receive a larger proportion of government contributions. This difference is typically aligned with population density and the fact that metropolitan councils can produce revenue through parking and developers.
Observation: Anecdotal evidence indicates that often fees and charges are waived for community groups or sporting clubs. In addition, a bond for use of these facilities is rarely, if ever, charged. Public events (for instance in the parks and gardens) can often cause significant damage to trees and plants. In addition, staff is used to collect litter at the end of an event. This often leads to staff being utilised for reactive tasks, rather than concentrating on programmed or planned maintenance. It is also contributes to large unplanned costs, which are covered by the Unit whose job it is to undertake the clean-up works.
Council expenditure
CoGB areas of expenses include employee labour payments and benefits, payments for materials, services, plant and equipment purchase and other operating expenses. This section profiles these expenditure items and investigates the trends and findings where there are higher levels of risks or particular areas of interest. Figure 19 and Table 5 describe the sources of expenses for the historical period of 2009-10 to 2011-12 and forecast period of 2012-13 to 2014-15.
Conclusion: User fees and charges are set at relatively low levels to allow access to public spaces for community events. Anecdotal evidence suggests that significant portion of these fees and charges are waived, limiting this revenue stream and increasing reactive maintenance costs.
Recommendation: Review user fees charged. Enforce their requirement. Mandate monetary bonds for medium to large events held in public spaces and gardens.
Council indicated in its March 2013 Ordinary Meeting that its focus should be on the full cost recovery for the major non-statutory fees and charges for services unless justification for another method is provided. These fees and charges (other than major fees and charges), are planned to be increased in line with CPI or market levels. This policy employed by CoGB includes four types of non-statutory fees these are : Full Cost Pricing which is applied where the objective is to achieve a financial return for CoGB; Accessible Pricing which is a discount on the full cost of providing the service. The discounted rate is determined based on the community benefit or social good, and can be set between 100% discount up to full cost recovery; and,
Figure 19 | Expense items aggregate to identify the key areas of cost to CoGB, sourced from the 2013-14 Budget
23
23
Minutes of the Ordinary Meeting of Council, 27 March 2013, City of Greater Bendigo
Over the forecast period beyond the 2011-12 financial year, most expense items increase. Their order of magnitude relative to other expense items is not expected to change through to the 2013-14 fiscal year. Table 5 presents the expense items and relative proportions for the four years from 2011-12 to 2014-15.
Too often Council does not take advantage of our purchasing power with one unit purchasing an item today, and another unit purchasing similar tomorrow. A dedicated purchasing team would work together to achieve value for money.
The annual change for the expense items for a four year historical and forecast period from 2009-10 to 2013-14 are presented in Table 6.
Expenses Employee 24 Benefits Contract Payments, Materials and Services Plant and Equipment Operating Expenses Net Loss on disposal of asset resale Depreciation Borrowing Costs Bad Debts Other expenses Total Expenses 141,991 2011-12 (a) ($) 55,313 51,949 % 39% 37% 2012-13 (f) ($) 48,612 52,265 % 36% 38% 2013-14 (f) ($) 51,110 63,838 % 33% 42% 2014-15 (f) ($) 55,562 57,274 % 36% 37%
Figure 20 shows the top 10 sources of expense over a five year period.
4,305
3%
4,027
3%
4,331
3%
4,543
3%
3,638
3%
2,537
2%
3,000
2%
3,000
2%
26,177 404 205
18% 0% 0% 0% 100%
27,717 821 100
20% 1% 0% 0%
29,839 1,432 124
19% 1% 0% 0%
30,850 1,735 110
20% 1% Figure 20 | Top 10 expenditure sources (2013-14 financial year) 0% 0%
As identified in the income statement analysis, the Asset Management and Renewal, Community Services and Waste incur the highest expenditure. Investigations have revealed that a number of expense streams have high variability for the period 2008-09 through 2011-12. This indicates that some areas are consistently varying from actual budgets. A cumulative absolute variance measurement was used to quantify this variability (Figure 21). The variance measurement ignores whether this difference is positive or negative and is derived from historical data for the 2008-09 through 2011-12 financial years. A high cumulative difference indicates that the budgeting process is failing to accurately forecast the monetary provision for this revenue item which should be investigated further.
136,079
100%
153,674
100%
153,074
100%
Table 5 | Expense items and relative proportions over the four years from 2011-12 to 2014-15, sourced from the 2013-14 Budget Year on year % change in Expense Employee Benefits Contract Payments, Materials and Services Plant and Equipment Operating Expenses Net Loss on disposal of asset resale Depreciation Borrowing Costs Bad Debts Other expenses Total Expenses 2009/102010/11(a) 12% 9% 14% 75% 11% -21% -47% NA 12% 2010/112011/12(a) 25% 8% -2% -33% 7% -26% 13% NA 12% 2011/122012/13(f) -12% 1% -6% -30% 6% 103% -51% NA -4% 2012/132013/14(f) 5% 22% 8% 18% 8% 74% 24% NA 13% 2013/142014/15(f) 9% -10% 5% 0% 3% 21% -11% NA 0%
NOTE: (a) actual (f) - forecast

Table 6 | Expense item rates of change over the 5 years from 2009-10 to 2014-15, sourced from the 201314 Budget
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In 2011-12 the Employee Benefits expense item consisted of employee benefits plus the shortfall liability of $10.5 million for the Defined Benefits Superannuation Scheme.
CGB should develop other income streams to recover infrastructure development costs from new property development consistent with the Melbourne Growth Area approach.
For most significant construction works in which BenCon is preferred, the CoGB Engineering Unit and BenCon estimators independently forecast prices for the packages of work. Typically, BenCon submits prices which are lower than the CoGB estimates. The volatility behind the revenue and expenses streams can be partially contributed to a number of issues currently experienced in the construction industry. Some of these issues are a labour skills and materials shortage from the peaking of the mining boom which in turn has increased construction costs, lack of private sector credit since the Global Financial Crisis to finance residential housing, non-residential and engineering construction and a reduction in business confidence to expand. During the past five years, construction costs have been highly volatile as described in Table 7 which compares Consumer Price Index (CPI), Council Construction Index (CCI) and the Local Government Cost Index (LGCI). % Growth CPI
Figure 21 | Cumulative difference from budget for the top 10 revenue streams (2008-09 through 2011-12 financial years)
2008-09 2.8% 2.4% 5.0%
2009-10 2.1% -3.6% 3.4%
2010-11 3.6% 2.3% 3.5%
2011-12 1.2% 2.3% 3.3%
2012-13(e) 2.3% 3.2% 3.3%
CCI LGCI
Finding: The expense items which have the highest variance compared with the budget forecast are BenCon, Debt Interest and Financing Cost, and Engineering and Public Space. This indicates that this group has the highest variability of forecasting and meeting the budgeted expenditure targets, presenting a risk to CoGB. The Business Units which present the largest risk to CoGB in terms of budgeted expenditure include BenCon, Asset Management and Engineering and Public Space. The expense items of most interest in terms of percentage change over time (Table 6) are the employee benefits and the plant and equipment hire. Both of these and the borrowing costs increased sharply over the 2011-12 and 2012-13 financial years. The following sections discuss some of these expenditure items and the underlying risks which may impact on the expenditure forecast. BenCon BenCon is a Business Unit at CoGB and is otherwise known as Bendigo Construction (BenCon). As a Council business, BenCon tenders for construction work from external organisations and also acts as a contractor to CoGB, internally charging CoGB for works undertaken. BenCon is also elected as the default supplier of construction services when the tender process has failed to find a supplier for CoGB. BenCon has minimal overheads, making it difficult for commercial enterprises to be competitive against it in the delivery of core construction (e,g. road resurfacing, general maintenance activities). For large technical projects such as bridges and buildings, BenCon or the CoGB will procure an experienced external contractor.
Table 7 | Historical movements in CPI, Construction Costs and Local Government Cost Index (e) 2012-13 25 estimates not including the carbon tax
Finding: BenCons cash flows are observed to have high volatility; however the operating result is relatively flat suggesting that BenCon does not profit or generate a loss liability on CoGB. This suggests that BenCon is dynamic in meeting demand by hiring subcontractors during periods of busy construction activity and maintaining a base level of staff during quiet periods. Submissions to the Independent Review Committee have indicated that there is some confusion regarding the level of transparency in revenue and expense (and overall viability) of a number of units within CoGB. Such units include the Livestock Exchange, Bendigo Airport and funding of the Arts (to be covered in later Sections of this Report).
Conclusion: It would be beneficial for CoGB to review the current financial reporting arrangements for BenCon and other Units such as the Livestock Exchange and Bendigo Airport with a view to increasing transparency and to allow more informed decision making.
25
Local Government Cost Index 2012-13, Municipal Association of Victoria, June 2012
is a connection between demands for funding of projects involving capital and major/minor works and economic development and associated administrative/staffing requirements, and, the fact that these demands drive the rates and other income required to meet these demands!
COGB Independent Review update raises concerns, Bendigo Advertiser, May 6 2013
There
Recommendation: Monitor the revenue and expenditure associated with BenCon, the Livestock Exchange and Bendigo Airport for annual reporting to Council. Asset maintenance and renewals Asset maintenance and renewals are becoming a prominent issue for local government as high labour and material costs have increased the cost of project delivery. As described in Table 7 the cost of construction and general expenses for council has consistently increased above the CPI rate for the past five years. As outlined previously, CoGB ranks worse than the Victorian council average for Investment Gap and Renewal Gap (included again below for completeness).
Finding: Bendigo has a renewal gap of approximately 77% compared to the desired level of 100%.
Conclusion: The renewal gap issue is common across local government in Victoria. It is considered that this gap of capital expenditure presents a risk to CoGB. If this gap remains below 100% for a prolonged period, the CoGB will face increasing costs gap in asset renewal which will require significant additional funding to keep assets, plant and equipment up to date and legally compliant, or suffer a community backlash from a decreased level of service, as assets are removed from service. To limit the impact of catch up funding to meet this growing renewal gap, finding savings within the budget by optimising the financial efficiency of services, programs and assets or increasing revenues may be required.
Investment Gap (Total Capital Spending / Depreciation Expense) 2011-12 This is a measure of whether local governments are spending on infrastructure at a greater rate than the infrastructure is depreciating. The lower the percentage, the higher the risk to the organisation that it will not be investing enough in growing itsr asset base, creating an investment gap. A ratio of 200% is desirable. A ratio less than 100% is considered high risk to financial sustainability. CoGB is performing well in this measure, with a ratio slightly lower than the desirable level, but well above what would be considered high risk.
Recommendation: Monitor working capital (liquidity) and the capital replacement financial ratios including any internal or external factors which will adversely affect these and, if necessary, take corrective action.
Other impacts to rising service delivery and capital replacement costs include:

Renewal Gap (Total Renewal and Upgrade Spending / Depreciation Expense) 2011-12 This ratio is a comparison of the rate of spending on existing assets through renewing, restoring, and replacing existing assets with depreciation. The lower the percentage, the higher the risk to the organisation that it is not renewing its current assets, leaving a renewal gap. A ratio of 100% is desirable. A ratio less than 50% is considered high risk to financial sustainability. CoGB has a below average renewal gap compared to the desired level, but is not in the high risk category.
Increasing population within the region, which places added pressures on infrastructure The regulatory environment around asset compliance and maintenance provisions with industry standards to maintain and encourage safety and an appropriate level of service. This can be manifested in tighter engineering standard compliance, increased premiums and conditions for insurance and impacts from legislative mechanisms like the carbon tax. Rising employee benefits, State and Federal imposed levies and materials 26 expenses have also impacted service delivery .
CoGB determines the cost of asset maintenance and renewals through a depreciation method. The assets are valued each year. The difference between this and the valuation from the year prior is known as the depreciation. This depreciation value is assigned to asset maintenance and renewal works in the budget.
26
Community service needs, taxes & levies hit council rates, Municipal Association of Victoria, 29 June 2012
We all hear people complain about rate costs, but people out here get very little for their rates. Perhaps a road grade once a year!
Finding: The cost of maintenance and renewal has become more variable as construction contractor rates have increased due to the mining boom. This increase is predicted to end in the coming year which should decrease these rates and evidence from cost estimates are indicating this phase change. The second reason behind this variability (and subsequent risk) is the undermanagement and maintenance of assets and the delay of capital renewal spend due to higher priority spending.
5.5
Rating strategy
28
Council has recently announced a 6% rate increase for the 2013-14 financial year and forecast 6% per year for the following 3 years. This rate rise forecast is in line with the Victorian average as many councils are dealing with a number of increasing cost issues including an increased regulatory environment and a growing asset renewal gap. Table 8 compares rate increases for a number of regional cities across Victoria.
Financial Year
CoGB Rate Increase (%) City of Ballarat Rate Increase (%)
2013-14
6.0% 7.5% 4.4% 4.5% 5.1% 2.25%
2014-15
6.0% 6.5% 4.9% 4.5% N/A 2.5%
2015-16
6.0% 6.0% 4.9% 4.5% N/A 2.5%
2016-17
6.0% 6.0% 4.9% 4.5% N/A 2.5%
Further information, analysis and recommendations regarding the CoGB asset maintenance and renewal process is presented in Section 7. Waste management expenses Decisions about long term waste management, including whether and where a new landfill is established and strategies for reducing domestic and industrial waste generation through policy and behaviour change need to be addressed in the near 27 future .
City of Greater Shepparton Rate Increase (%) City of Greater Geelong Rate Increase (%) Victorian Average Rate Increase (%) Australian Treasury Inflation Forecast (%)
Table 8 | Comparison of predicted rate escalations over the 2013-14 to 2016-17 financial years and 29 Treasury Inflation Forecast
Finding: The largest asset renewal issue to the CoGB as mentioned in the CoGB 2013-2017 medium term plan is the Eaglehawk landfill. Waste management is the single biggest budget item. Rehabilitation costs CoGB landfill sites is also a major issue for consideration by CoGB and funds are yet to be allocated to this issue.
Why 6 %?
Considering that the target inflation rate by the Reserve Bank of Australia is between 2% and 3%, the forecast rate rises by Victorian councils from now until the 2016-17 financial year appears high. Submissions to the IRC indicated a level of frustration and concern regarding these potential rate rises and questioned their validity. This level of rate rise has been scrutinised by rate payers and the State Government; however there are some valid reasons for this level of rate increase. The following outlines these reasons with specific reference to the 6% increase in Bendigo. Population growth Bendigo has experienced a significant and relatively rapid increase in population, which is expected to continue. This will provide both opportunities and challenges. One of the benefits of this expected growth is the higher proportion of young families settling in Bendigo. The significant challenge is to facilitate sufficient growth in housing availability, education and employment opportunities and other family-centred infrastructure. Many councils with shrinking and ageing populations would envy this challenge.
Recommendations: Undertake a review of current waste management contracts with a view to finding efficiencies. Facilitate the development and finalisation of the Waste Strategy to determine the best way to manage waste going forward, and undertake analysis to determine the cost and requirements for the rehabilitation of historic sites and current sites once they reach capacity.
Community and aged care expenses HACC services are also a large expense item for CoGB, as are early childhood services. Both areas are currently undergoing separate reviews; with a view to possibly consolidating these services in the future to provide improved value for money services to the community. This is discussed in Section 6.4.
28
27
The rate increase is the % increase in the average rate charged to a property which is worth the median property price within the LGA. 29 Rating Strategy 2012-13, City of Greater Bendigo 2012-13 Annual Budget, Adopted 25 July 2012
Asset renewal gap
The present structure of differentiated rates utilising the capital improved method used by the City of Greater Bendigo (CGB) does not fully utilise the range and rationale outlined by the Department of Planning and Community Development.
As mentioned several times throughout this Report, CoGB, like many Victorian councils, is currently experiencing an asset renewal and investment gap challenge. Councils are now in catch-up mode. CoGB may be able to reduce the impact of this gap and achieve its renewal rate by reducing costs elsewhere in their business through optimising Business Unit operations and asset consolidations. This will free-up revenue for allocation towards capital projects and renewal programs. For an example of an asset class which requires an asset consolidation and benchmarking exercise completed, readers are referred to the Case Study on the Golden Square Pool (page 94). Increasing regulatory environment Financial constraints being experienced by Federal and State Governments are passed on to local government in the form of reduced grants. Cost-shifting from other tiers of government imposes a significant and increasing burden on local government brought about by changing legislation and regulation or where policies that are adopted and initially implemented at a Federal or State level are passed to local government for ongoing implementation and operation. Increasing legislative requirements also impact on the work and resources of councils. For example, in the next 12 months, CoGB will be required to take on introduction and administration of the newly introduced fire services levy and statewide changes to the system of planning approvals. Property valuations Because the rate increase outlined by CoGB is defined as the percentage increase in the average rate charged to a property which is worth the median property price within the LGA, property valuations are important when considering rate increases. Property valuations are expected to increase in the medium term as forecast population and economic activity boost housing demand. Bendigo has experienced an average median house price rise of 7% since January 2011 (although this has 30 decreased in the past 6 months of the analysis) . This increase does not impact the rating increase, however a change in property prices changes the allocation of rate revenue as they are used as a tool to allocate the rate increase. For example, if a property valuation for a house in one area decreases by 2%, however the rate rise that year is 5%, the household will experience a rate increase of 3% for that component of the rating strategy. On the other hand, if a property valuation increases by 2% with the same rate rise, the applied rate experienced by the household will be 7%. The metric that is used is the Capital Improved Value (CIV) which evaluates the total market value of the land plus buildings and other improvements. The Net Annual Value or Site Value is used if the information to determine the CIV is not available.
This was evident in the 2011-12 to 2012-13 financial years as property prices rose 6% even though the CIV rate was reduced marginally. Since then the Bendigo property market has been flat with no significant gains.
Finding: The 6% rate rise can be attributed to population growth, cost shifting and the move to close the asset renewal gap which is now apparent. Rate rises are not attributed to property value rises; however property revaluations reallocate the rate revenue allocation.
Rating strategy development

Developing a rating strategy requires a council to strike a balance between competing principles to come up with a mixture of rates and charges that provides the income needed for its annual budget while meeting the tests of equity, efficiency and simplicity. The total amount of revenue to be raised in general rates is divided by the total value of all rateable properties. The rating strategy is generally determined using the following components:

Property valuation fluctuations Differential rates Service rates and charges Municipal charges Financial Year
CoGB Rate Increase (%)
2008-09
5.0%
2009-10
4.0%
2010-11
4.5%
31
2011-12
5.9%
Table 9 | Historical rate escalations over the 2013-14 to 2016-17 financial years
Over the past four fiscal periods, the average rate increase has been 4.9% as described in Table 9; however this will be increasing to an average of 6% over the next four fiscal periods, as described in Table 8. The Review has investigated each of the components of the rating strategy and investigated the rationale for rate increases against the CoGB long term financial position. The table below describes the rate revenue by category in the fiscal periods 2011-12 and 2012-13. The table describes that 69% of CoGB rates are paid by residential properties with 23% paid by businesses, reflecting that CoGB revenue has a very high reliance on these categories.
30
RP Data Professional, East Bendigo Suburb overview, https://rpp.rpdata.com, accessed 1 May 2013.
31
Rating Strategy 2012-13, City of Greater Bendigo 2012-13 Annual Budget, Adopted 25 July 2012
Rate increases must be capped. The current system lacks accountability.

Rate Category Residential Business Farm Vacant Recreational Total
2011-12 $ 38,636,543 $ 14,519,247 $ 1,915,099 $ 2,552,006 $ 38,472
2012-13 $ 44,061,279 $ 14,641,734 $ 2,119,631 $ 2,978,474 $ 38,472
2012-13 Proportion 69% 23% 3% 5% 0% 100%
Observation: The recently announced rate increase is higher than some other regional cities, although is justified by increased costs to Council for other tiers of government, population growth and recent, significant increases in property prices.
$ 57,661,367
$ 63,839,590
Conclusion: The rating strategy of Council is complex and misinformation exists in the community with respect to Councils reasoning and justification of rate increases.
Table 10 | Rate revenue forecast for 2011-12 and 2012-13
The following sections will analyse each of these components. To provide context to the rating strategy investigation, the following opportunities and challenges detailed 32 in the CoGB medium term plan (2013-2017) should be taken into consideration .
Uniform charges
Uniform charges are a per-property charge to pay for CoGBs administration costs, and are charged at the same rate for all rated properties. Uniform municipal charges on all properties have decreased over the past three fiscal periods as they are being phased out. This reduction has also been an effort by the CoGB to constrain rate rises. However, this decrease has a minimal effect, as uniform charges only make up between 3-5% of the total average residential property rate. The table below describes this phase out trend. Fiscal Period Municipal charge per property ($) Change in yield (% of 2010-11 value.)
Table 11 | Municipal charge over the past three fiscal periods
Recommendation: Ensure that a transparent explanation of rates charges and the rating strategy is provided to the community, particularly in reference to revaluation.
5.6
Economic development
2010-11 $ 129.60
2011-12 $ 97.20 -25%
2012-13 $ 64.80 -25%
Due to the size of CoGB, the services it provides, and the major capital works projects it delivers, it plays a critical role in economic development in Bendigo and the wider region. CoGB also has an acute responsibility to drive the direction of the regions business and industry activities. These roles and responsibilities are undertaken by many senior managers at CoGB and the Councillors. In addition, CoGB has a specialist Unit tasked with economic development in Bendigo. The primary responsibility of the Economic Development Unit (EDU) within the City Futures Directorate is to facilitate and support the growth of new and existing enterprises on behalf of CoGB. The EDU has a unique role within the CoGB structure as it has stakeholders both within and external to CoGB and performs proactive as well as reactive functions to meet the needs and expectations of the business community and local residents. The Review has assessed the effectiveness of this Business Unit and its contribution to economic development, including the identification of any Recommendations to improve its operation. These Recommendations have been formulated by comparing the current EDU operations with its mandate and comparing them against economic development units in similar sized councils elsewhere in Victoria.
Once the uniform charge is phased out, the rating strategy will only comprise the rating and user pays components.
User pays components

User pays components for the rating strategy has had the largest increase in payment for waste and recycling collection services. This charge has increased to reflect recovery of associated costs and to pass on the cost of the carbon pricing mechanism administered under the Clean Energy Act 2011.
EDU mandate
The EDU links with the broader organisation of CoGB. The EDUs mandate is to provide local business and the community with a conduit to instil innovation and be a catalyst to economic activity within the Bendigo region.
32
The Business Unit has the following service objectives :

33
To show leadership in regional economic development across Victoria and nationally To identify and deliver economic development projects to attract new business investment To deliver on economic development projects that contribute to the growth and sustainability of existing businesses To provide professional advice and support to the Bendigo business community through a focus on our major sectors: Manufacturing, Professional Services Retail Services, Health and Education; To develop and deliver the Bendigo Regional Skilled Migration Program To promote Bendigo as a place to work, live, invest and visit
Observation: The demand for EDU services, programs and projects is increasing.
Conclusion: With increased demand for services, the EDU will come under increasing pressure to report outcomes in a streamlined, consistent and transparent manner.
These objectives are facilitated through a number of activities which include consultancy and advisory services, facilitating and chairing business panels and community groups, initiating and managing economic development programs and providing linkages between civic decision makers and businesses.
Recommendation: Create an Economic Development Unit template document to produce generically branded reports with similar content and structure.
Business unit observations Current economic development activities

The current functions of the EDU include supporting the manufacturing sector through related projects such as the Marong Business Park, supporting business and professional services industry, delivery of annual Bendigo Inventor Awards and the delivery of workforce attraction for the manufacturing and mining support and equipment industries. Current projects which are indicated for implementation or 34 continued support in 2013-14 are :

Aurecon has conducted a Review of the operations and outcomes of the EDU. These 35 findings have also been reiterated by reviews recently published by others . The Review has identified the following observations:
Observations:
NBN for Bendigo Regional Living Expo Professional Services Business Sponsorships Economic Development Strategy Bendigo Inventor Awards Workforce Attraction Bendigo Manufacturing Group Marong Business Park Future Commercial and Industrial Land Bendigo Professional Services Group New Bendigo Hospital Goldfields Career Horizons Bendigo Airport and Business Park
The EDU staff have extensive and well established Business Networks allowing the latest current understanding of business issues to be utilised Significant work has been done to develop business hubs, particularly for the manufacturing sector Many EDU reports make recommendations and suggestions however the next steps to implementation are not prioritised or conveyed to the reader Sampled EDU reports make limited effort to assess the implementation of projects and strategies in terms of funds, staff numbers and the staff abilities to carry out the recommendations Some submissions to the Independent Review Committee suggest that more support to small or micro businesses could be provided by the EDU A number of submissions to the Independent Review Committee also indicated that an Entrepreneur in Residence program may help facilitate economic development and innovation in Bendigo There are no formal succession plans in place for this Unit
33
City of Greater Bendigo City Futures Directorate, Best Value Review - Business Development Unit, 2008.
34
City of Greater Bendigo City Futures Directorate, 2013-14 Economic Development Service Plan, 2013.
35
Clark. N. J, Review of economic development in Bendigo, Unpublished paper, 2013.
In establishing Enterprise Geelong the Council is signalling the high priority we place on sustainable employment growth and business investment in our region.
Current City of Greater Geelong Mayor, Keith Fagg, in http://www.geelongaustralia.com.au/ ct/news/item/8cfedea40bb16b7.aspx
Conclusion: The EDU has achieved strong levels of engagement with the business community in Bendigo to achieve significant outcomes. Some submissions indicated that the EDU is perhaps focussed too heavily on large enterprise and should renew its focus on smaller business.
that Enterprise Geelong will bring a fresh, innovative and focused approach to greater 37 Geelongs economic development . Greater Shepparton City Council The economic development department of the Greater Shepparton City Council is now the Investment Attraction Department. The aim of the department is to attract business investment to the area, developing employment and business opportunities to support sustainable economic growth. The department promotes private investment in the region and identifies opportunities for funding and community development initiatives. City of Ballarat The City of Ballarat operates Business Ballarat and the Ballarat Investment Facilitation Group to foster opportunities for investors and businesses to establish or expand in the Ballarat region. Business Ballarat is the Economic Development arm of the City of Ballarat, and is charged with sourcing funds for business growth, development site identification, site attraction and investment attraction. Business Ballarat operates under the councils Ballarat Today, Tomorrow, Together strategy, and supports business investment, population growth and job creation in the region. One of the projects of Business Ballarat is the revitalisation of the CBD, which includes redevelopment of the main street, civic hall, town hall and a number of other projects.
Recommendations: Create an Economic Development Unit template document to produce generically branded reports with similar content and structure. Promote clustering of local businesses into hubs to develop new opportunities as a low cost solution Facilitate local business opportunities in alternative energy, industrial waste, digital/advanced manufacturing, micro businesses and greater share of professional services spend. Improve use of Australian Business Registry information and demographic profiling products to capitalise on market intelligence. Improve use of Economic Development Australia membership to enhance benchmarking efforts and strategic planning. Work with local businesses to maximise benefits of the NBN rollout. Create a succession management plan for all senior management and other critical CoGB positions.
5.7
Benchmarking
Aurecon has carefully considered the appropriateness of comparing or benchmarking CoGB to other organisations. It is difficult to benchmark many metrics with private enterprise for a number of reasons, including: Drivers: unlike private enterprise, CoGB is not driven by profits. The primary role of CoGB is to delivery services to the community on behalf of the Greater Bendigo City Council. To this end, it is not entirely appropriate to compare salaries to those in private enterprise. This is particularly the case for senior management, where salaries in large private organisations are often linked to performance, with salaries made up of both a cash and bonus/incentive component. Scope of services delivered: as previously stated, the range of services delivered by CoGB is very broad. This broad range of service delivery means that the structure of the organization differs by Directorate and Business Unit. It is not appropriate to compare the structure of this organisation to others in private enterprise which have different service delivery profiles.
Comparative analysis
Aurecon has analysed other comparable councils operating similar departments to CoGBs EDU. City of Greater Geelong The City of Greater Geelong has recently established a Council owned but independently operated entity Enterprise Geelong. This company is what was formerly its Economic Development team and is headed by an Executive Director. Enterprise Geelong has established a team with extensive experience comprising relevant disciplines including business development, marketing, commercial property, international business and financing. This advisory board will provide strategic advice to help identify suitable employment, business and investment 36 opportunities for the Geelong region . Enterprise Geelong has $1 million of funding in its first year of operation and is currently focused on attracting new enterprises to Geelong from elsewhere in Australia and overseas. The City of Greater Geelong Mayor, Keith Fagg, recognises
37 36
http://www.geelongaustralia.com.au/ct/news/item/8cfedea40bb16b7.aspx, assessed 10 May 2013.
$1m splurge on jobs, Geelong Advertiser http://www.geelongadvertiser.com.au/article/2013/03/13/361000_news.html, assessed 10 May 2013.
Therefore this Review has conducted a benchmarking exercise comparing parameters and metrics of CoGB against comparable regional peers.
Benchmarking on alignment of units within other councils would be advantageous.

Metrics which were measured to identify similar Local Government Areas included population, geographical size, Gross Regional Product and council revenue. For the purposes of this Review, information relating to the following councils was considered (abbreviation shown in brackets): City of Ballarat (CoB) City of Greater Geelong (CoGG) Greater Shepparton City (GSC) Warnambool City (WC) Mildura Rural City (MRC) - where available Horsham Rural City (HRC) - where available
Conclusions: The following findings highlight important aspects of the benchmarking exercise:

The key ratios used in the benchmarking analysis are defined below: Return on equity (operating result / council equity) 2011-12 Return on equity measures the councils profitability by revealing how much profit a council generates with ratepayers equity. This profit is allocated to capital spending activities that would otherwise be unfunded. Employee cost proportion of expenses 2011-12 This is a percentage of an organisations total expenditure spent on employee costs, including direct remuneration, superannuation provisions and any benefits. Underlying Result (Operating Result/Revenue) 2011-12 The underlying result states the councils profit position of funds to be allocated to capital spending activities that would otherwise be unfunded. Working capital (current assets / current liabilities) 2011-12 This is a measure of an organisations ability to pay existing liabilities within a 12 month period. Indebtedness ratio (non-current liabilities / revenue) 2011-12 This ratio compares non-current liabilities (including loans and landfill provisions) to own source revenue. Own-sourced revenue is used because it does not include capital grants. Renewal gap (total renewal and upgrade spending / depreciation expense) 2011-12 This is a comparison of the rate of spending on existing assets through renewing, restoring, and replacing existing assets with depreciation. Ratios higher than 1:1 (100%) indicate that spending on existing assets is greater than the depreciation rate.

There is significant misinformation in the community regarding the financial status of CoGB, that is not supported by the analysis undertaken CoGBs expenditure and full-time equivalent staff per head of population is amongst the lowest of comparable Victorian councils CoGBs return on equity is within range of other comparable Victorian councils CoGBs working capital, renewal gap and underlying result are less favourable than most other comparable Victorian councils. It is considered that CoGBs current renewal gap presents a risk to the organisation. If this gap remains below 100% for a prolonged period, the CoGB will face increasing costs to close the gap in asset renewal which will require significant additional funding to keep assets, plant and equipment up to date and legally compliant, or suffer a community backlash from a decreased level of service, as assets are removed from service. To limit the impact of catch up funding to meet this growing renewal gap, finding savings within the budget by optimising the financial efficiency of services, programs and assets may be required. Readers are referred to Section 7 for further information and recommendations). CoGBs employee cost proportion of expenses and indebtedness ratio compares favourably with comparable Victorian councils
Council Expenditure per Head of Population

3%
WC CoGG $1,800
Return on Equity
$2,000
2.25% WC GSC CoGB CoB CoGG 0.75%
GSC $1,600
1.5%
$1,400
CoGB CoB
$1,200
0%
Figure 22 | Expenditure per head of population
Figure 24 | Return on equity
What does this show? This illustrates that CoGB expenditure per head of population is considerably less than most other comparable Victorian councils.
What does this show? This illustrates that approximately 1.5% of CoGB ratepayer equity is able to be allocated to capital spending. This figure is within the range of other Victorian councils
FTE Staff Per 100 Population
Employee Cost Proportion of Expenses
1.0
WC
45%
CoB CoGG
0.9
42% GSC
0.8 GSC 0.7 CoB CoGG CoGB 0.6
39% CoGB 36%
WC
33%
Figure 23 | Full-time equivalent staff per 100 population
Figure 25 | Employee cost of expenses
What does this show? This illustrates that CoGB has less full-time equivalent staff than comparable Victorian councils.
What does this show? This illustrates that at approximately 38%, CoGBs proportion of expenses allocated to employee costs is lower than most comparable Victorian councils.
Underlying Result
Indebtedness Ratio
HRC
20%
50%
High Risk
15%
MRC
40% WC HRC MRC GSC CoGG CoGB
10% GSC 5% CoB WC CoGB
30%
20%
0%
CoGG High Risk
10%
CoB
Figure 26 | Underlying result
Figure 28 | Indebtedness Ratio
What does this show? This illustrates that CoGBs ability to fund capital works, as a percentage of revenue, is lower than many comparable Victorian councils.
What does this show? CoGBs non-current liabilities equate to approximately 17% of its own source revenue, comparing favourably to other comparable Victorian councils.
Working Capital
Renewal Gap
300%
200% HRC
WC
250%
150%
MRC HRC GSC
200% GSC WC 150% CoGG CoB CoGB MRC
100%
CoGG CoB CoGB
50%
High Risk
100%
High Risk
0%
Figure 27 | Working capital
Figure 29 | Renewal gap
What does this show? CoGB is able fund liability payments over the next 12 months, however its working capital position is less favourable than many comparable Victorian councils.
What does this show? CoGBs spending on existing assets is around 80% of the depreciation rate. This is the lowest renewal gap the comparison group, indicating under-expenditure on asset renewal.
regional cities, but is justified by increased costs to Council from other tiers of government, population growth and recent, significant increases in property prices.
Council must make a decision on the future of waste disposal in Bendigo.

5.8
Conclusion
Evidence provided to the Review team and analyses undertaken indicates that CoGBs current process of reporting is in accordance with the LGA 1989. In addition CoGBs current financial planning and budget forecasting process is a successful method to prioritise short term and long term objectives of CoGB. Generally the finances of CoGB fall within acceptable limits as defined by the Victorian Auditor Generals Office. Two metrics identified as potential concern were CoGBs asset renewal gap and investment gap. These issues are common across local government in Victoria. If the asset renewal gap remains below 100% for a prolonged period, the CoGB will begin to face a large gap in asset renewal that may lead to decreased levels of service or a risk of removing assets from service. This Review has identified that there is an observed disconnect between the financial function of CoGB and the wider organisation with many managers and staff not understanding the financial goals of Council activities. This is evident in regard to periodic reporting of financial performance and principles of value managing strategies. Anecdotal evidence gathered during the Review has described this disconnect between the aspirations of the Finance Team and the delivery through the Directorates. In addition, the Review has found that some of the financial documentation contains errors. An example of this is CoGBs Rating Strategy within the 2012-2013 Annual Budget which contains a number of typographical errors, particularly in reference to financial years. Meetings with the Finance team indicated that historically, financial reporting was conducted within Finance, with minimal management accounting done by the Directorates. The management accounting function within CoGB is being improved, with additional focus on tracking and accounting for variances in monthly reports. It is recommended that a performance management system is implemented to all timely and efficient financial (and other) reporting to be completed and that this information is disseminated to staff in a manner which is easy to understand. The major revenue and expenditure items in the recent CoGB budgets have been identified in this Review. A number of areas have been identified where there is a significant cumulative difference between budgeted revenue and expenditure and actual figures reported. It is recommended that this is investigated further to determine the reasons behind these discrepancies. It is also recommended that the revenue and expense of Business Units such as BenCon, the Livestock Exchange and Bendigo Airport be tracked and monitored individually to provide Council with a detailed understanding of these units on an annual basis. This will improve transparency in financial reporting within these units and across the organisation generally. There is some criticism in the community and misinformation in the public realm regarding rate increases and the reasons why Council has selected a 6% increase for the coming financial year. The increase announced is higher than some other
It is recommended that further details regarding the recent rates proposal is provided to the community to improve public perception and increase the clarity around this issue. Finally, while it is acknowledged that CoGB plays an important role in economic development in the Bendigo region, the economic development component of this Review has focussed on the organisations Economic Development Unit. It was found that the EDU has strong links with many business and industry representatives in Bendigo and are currently working on a number of major initiatives, including:

NBN for Bendigo Regional Living Expo Professional Services Business Sponsorships Economic Development Strategy Bendigo Inventor Awards Workforce Attraction Bendigo Manufacturing Group Marong Business Park Future Commercial and Industrial Land Bendigo Professional Services Group New Bendigo Hospital Goldfields Career Horizons Bendigo Airport and Business Park
Whilst the EDU has accomplished much for business in Bendigo, a number of submissions to the Independent Review Committee expressed concern about its performance, particularly around the support of small and micro-business. A number of recommendations have been outlined to balance the focus of EDU between small and large business.
Quality of Service Delivery, Management and Staffing Structure and Innovation
6. Quality of service delivery, management and staffing, structure and innovation

The CoGB is committed to working in partnership with its community to deliver excellent service through dedication, innovation and continuous improvement
CoGB Complaints Handling Procedure, December 2012
6.1
Context
This information was also corroborated through discussions with external stakeholders and customers. Data and information that has informed the decision making in this area included:

This section outlines Aurecons investigations into the staffing and management structure of the organisation and the resulting quality of service delivery. The focus has been on the Best Value Principles adopted by the Victorian Government in 1999 and how or whether the current structure and services provided by CoGB achieve these outcomes. The structure of this Section is as follows: Section 6.2 Background: Brief background of the approach followed to assess customer service and organisation structure Section 6.3 Quality of service delivery: A summary of the Review of service delivery quality and relevant themes Section 6.4 Organisation structure and delegation: A summary of the Review of Structure and delegation and relevant themes Section 6.5 Innovation in service and/or structure: A summary of the Review of innovation in service and/or structure Section 6.6 Benchmarking: Benchmarking to other local councils and private enterprise where relevant Section 6.7 Conclusion: Concluding remarks regarding the quality of service delivery, management and staffing, structure and innovation
Services provided and costs involved - are services degraded or costs increased through inefficient delegation or organisational structure? Resources required to deliver the service - do current structures and delegation practices provide sufficient resources for service delivery? Customer service standards do current structures and delegation practices allow customer services standards and expectations to be met? Consultation mechanisms do staff members feel restricted or empowered under the current delegation and decision making processes in place? Manager / staff ratios is service delivery degraded through inefficient management structures (i.e. is the organisation top heavy and does it have sufficient numbers of operational staff)? Salaries are current salaries in line with industry standards?
From this Review, an understanding of current organisation structure was gained and recommendations for changes to this structure outlined.
6.3
Quality of service delivery
Themes are outlined below, with supporting remarks from Councillors, CoGB staff and other relevant documentation where appropriate.
Range of services delivered

A broad range of services are delivered by CoGB ranging from the more traditional waste, roads, animal management and parking through to strategic planning, building permits, health, community facility management, Home and Community Care (HACC), early childhood services, etc.
6.2
Background
The Customer Service Charter of CoGB indicates that the goal of the organisation is to provide quality customer service that responds to the needs of our whole community. All Business Units provide a service to a customer. These customers can range from a rate payer or community member, internal stakeholder (i.e. another Unit), external stakeholder (other Government departments, local businesses, or representative bodies), or contractor. As a consequence, it is vital that CoGB proactively manage service delivery to ensure that these services are accessible to and meet the needs of the community, are provided in a cost effective manner and are regularly assessed and continually improved or modified as appropriate. CoGBs corporate structure should facilitate and support the provision of these services. In an environment that is constantly changing, it is important that the structure regularly reviews and renews itself in order to be able to respond to new opportunities and efficiently address issues proactively. CoGB documentation, policies and procedures were reviewed to determine what customer service standards exist and their scope. Discussions were also held with a range of Business Unit Managers and staff to understand the breadth of services provided by CoGB, the quality of this service and potential improvement strategies.
Observation: As is common across Local Government, anecdotal evidence provided by staff indicated that CoGB has a culture of trying to be everything to everyone. While, this is to be commended, such a view is unrealistic and can, at times, be counterproductive. Further, it is becoming increasingly difficult to deliver the quality and diversity of services under tight economic conditions and a legislative environment that is becoming increasingly complex.
Conclusion: Often councils including CoGB review models and types of service provision in some areas. This is to respond to recent changes to legislation and funding arrangements to minimise cost (and risk exposure) to council, whilst maintaining or extending quality of service to clients in the community. In some instances, this has required councils to cut the breadth of services supplied.
Measuring performance and quality

Recommendations: Finalise the Aged and Disability Services and Early Childhood Services reviews by 31 July 2013. The 2011-12 Annual Report outlines a number of KPI metrics across the organisation that, when combined, give an overall indication of service levels and quality of service delivery. The 2011-12 Annual Report also includes detailed information on the results of the State Government Survey of Council Services relevant to each of the Goal Areas and facts and figures outlining spending and trends for each area. These figures, facts and comparisons are more useful in determining overall service quality and the perception of customer service and delivery in the wider community (see examples below). KPI metrics are broken into four Goal Areas. 1. Built and Natural Environment Working with the community to ensure Greater Bendigo continues to be a great place to live. KPIs under this Goal Area include: Proportion of CoGB tasks relating to urban development strategies to be completed within agreed timeframes Reduction in kilograms of domestic waste per capita to landfill, and increased volume of recyclables received at CoGB sorting facility The level of investment in all transport planning and infrastructure development to be maintained in real dollar terms
We are starting to get better at saying no being honest in our dealings and articulating what our capacity is. All too often councils have been criticised for overpromising and under delivering
Ensure that the recommendation adopted by Council regarding Aged and Disability Services and Early Childhood Services Reviews are implemented and completed. Review the services provided by each Business Unit and define the extent to which they are being subsidised by rates and other income. Report to be generated annually for Council.
Focus on customers
CoGB is currently in the process of enhancing its customer focus. This has resulted in CoGB having higher than average customer service scores in the State 38 Government survey of council services for the last two years . CoGB 2012 Overall performance Community consultation Customer service 63 55 74 CoGB 2013 63 57 75 Regional Cities 2013 60 57 73 State wide 2013 60 57 71
Table 12 | Key customer satisfaction rankings (scores out of 100) compared to Victorian councils, Community Satisfaction Survey Results 2013.
Observation: Overall customer service across the organisation is generally higher than the State average. This is supported and led by the Organisation Leadership Team. Customer service has become part of the culture of the organisation.
Conclusion: It would be valuable to set long term aspirations for customer service to support an improving upward trend in customer service survey scores.
Recommendation: Set long term aspirational goals for the Community Satisfaction Survey outcomes, execute appropriate plans and track progress annually. These goals should relate to organisational best practice.
Figure 30 | Facts and Figures relating to Asset Construction and Maintenance as outlined in the 2011-12 Annual Report (page 54)
38
Community Satisfaction Survey City of Greater Bendigo, Department of Planning and Community Development and JWS Research, May 2013.
Key features of better performing councils are a systematic approach, with regular consideration of performance reports by senior council officers, and where performance and trends are tracked over time.
Overview of local authority audits, Audit Scotland, 2007
2. Economic Development Being a key contributor to the regions economic development. KPIs under this Goal Area include: Increased number of visits to the Visitor Information Centres Delivery of Inventor Awards Value of planning and building permits issued Unemployment rate Percentage of actions completed by target data in the Economic Development Strategy 2007/08 104,632 20,000 8 2008/09 105,821 20,000 138 2009/10 111,100 17,023 76 2010/11 111,567 14,701 69 2011/12 105,910 16,224 62
4. People and Processes Providing high quality professional services. KPIs under this Goal Area include: Increased use of YoBendigo Website Implementation of the Community Engagement Strategy Customer Service telephone enquiry service levels met Annual operational surplus of a minimum of $10 million Working Capital Ratio of no less than 120% 1:1 Ratio of Capital Expenditure to Depreciation Sufficient cash funds available to negate use of overdraft Debt servicing cost to rate revenue is less than 10% Commence all actions in the What we will do in 2011-12 column in previous Annual Report, complete 90% of these
Visitor Centre Attendance Bendigo Heathcote Business events supported
Table 13 | Facts and Figures relating Tourism as outlined in the 2011-12 Annual Report (page 63)
3.
Community and Culture Working together to provide a diverse range of services that meet the needs to the community. KPIs under this Goal Area include:
It is acknowledged that CoGB is currently reporting performance in line with current Local Government guidelines and the KPIs outlined above are being tracked across time to show performance from 2007-08 through to 2011-12. The metrics provided in the 2011-12 Annual Report indicates that, generally, CoGB is performing well against the KPIs identified and levels of service across the organisation are increasing based on the data provided. However, the complexity of the Annual Report makes it difficult for community members to decipher this information. This issue is not isolated to CoGB, but is common across local government.
Proportion of CoGB tasks in Positive Ageing Strategy, Communication Access and Inclusion Plan, and Health and Wellbeing Strategy completed within agreed timeframes Performance targets under the Food Act (1984) met or exceeded
Figure 31 | Facts and Figures relating to Community Engagement for Strategy Development as outlined in the 2011-12 Annual Report (page 68)
The major causes for dissatisfaction firstly, the lack of follow-up information in particular and secondly, the perception of unreasonable delays in the work being carried out, or incomplete or poor quality work.
Customer Request System Satisfaction Survey 2010, Report to Councillors, 16 June 2010
Customer Services Incoming calls Requests for services Rates notices sent Value of rates notices ($million)
2007/08 131,500 22,540 49,230 53.8
2008/09 154,500 26,857 49,910 58.13
2009/10 115,000 28,864 50,739 61.92
2010/11 115,161 33,043 51,467 67.07
2011/12 116,173 30,736 52,462 71.89
Recommendations: Implement a performance management: Framework; Change management plan; and, an information technology software system
which is capable of facilitating performance management for all levels of the organisation (CoGB, Directorate, Business Unit and individuals). Engage with Local Government Victoria regarding the program to streamline and benchmark KPIs across local governments.
Table 14 | Facts and Figures relating to Customer Services as outlined in the 2011-12 Annual Report (page 79)
Closing the loop

Performance management and setting KPIs across local government in Victoria is an ongoing issue that is being reviewed by DPCD and LGV. A draft Local Government Performance Reporting Framework and Indicators (essentially KPIs for Local 39 Government) were released in May 2013 . These are to be piloted during the 201314 financial year. It is intended that these measures of quantity and quality will be assessed and then implemented across local government in the 2014-15 financial year. This is further discussed in the Benchmarking section. An improvement currently being developed and rolled out is a process to increase the number of customer or constituent enquiries that are closed out effectively. While this is a result of the Review of the Customer Service Charter undertaken in June 2011 for the Customer Service Unit, it should be noted that this is relevant, and should be applied to the entire organisation. The executive summary of this review stated that Staff generally agreed that keeping customers informed is an important aspect of customer service. However, there is not total agreement about how 40 and when information should be passed on to customers A number of process maps and written processes have been developed by the 41 Customer Support team to document and provide the following : 1. A clear decision making framework that, when implemented will result in a satisfactory discharge of responsibilities for responding to customer requests 2. Clearly identified communication steps that are required to ensure the customers are kept informed regarding the progress of their requests 3. Clear requirements as to what types of communication are required (verbal, letter or site visit) and guidelines to assist in determining under which circumstances these options apply These process maps need to ensure that there is clear role delineation so that the customer involved, Councillors, and CoGB staff are aware that the staff member assigned to the enquiry should take carriage of it and close out actions with the customer. It is not the responsibility of the Customer Support Staff to close the loop on an enquiry if it has been forwarded to a subject matter or technical expert.
Finding: Investigations of the Annual Report, Council Plan, and KPI documentation provided by some Directorates and Business Units indicate that metrics with respect to service quality are not clearly articulated, are not well summarised and it is difficult to see the clear link between Council vision, Council Plan, relevant strategy documents, and the KPIs of the Directorates and Business Units.
Conclusion: KPIs need to be developed for each Business Unit to reflect the role each unit has in delivering services to the Greater Bendigo region. These KPIs need to align with the Customer Service Charter where possible and each Directorate should summarise this information succinctly for inclusion into Annual Reports, Council Plans and other relevant documents.
40 39
Draft Performance Report Framework and Indicators Working Paper, Department of Community Planning and Development, 2013
City of Greater Bendigo Report of Review of Customer Service Charter Version 3, June 2011
41
City of Greater Bendigo Customer Service Process document.
These maps and processes should apply equally to internal or external enquiries and enquiries from Councillors. It was noted during the Review that although work has been done to break down silos of customer service and foster working relationships across the organisation, there were instances where this still had not occurred.
reporting is a key focus. There is a demand for additional capacity to analyse data for making decisions. These information demands are also creating demand for increased data storage and more sophisticated data storage systems. It is critical that system users can find information, access information and have confidence this information is accurate. Inefficient systems and inadequate staff training leads to inefficient data entry, decreased visibility and ability to track progress and decreased reporting accuracy and functionality. It appears from a review of numerous Customer Service Review reports that this is an ongoing issue, identified as early as 2005 in the Report on Consultation and Benchmarking undertaken for the Best Value Review of Customer Services
Observation: One issue highlighted for improvement was responding to a customer with an update on his/her complaint or enquiry and the outcome, even if this was not the outcome requested by the customer. The key for this process is to give the customer sufficient information so that he/she understands the outcome (i.e. closing the loop). This also applied to Councillor requests. There is also some confusion with respect to who should respond to customer complaints or enquiries namely the person who takes the call or the person to whom the call is referred. Another major cause of customer service dissatisfaction was the time taken for work to be completed following a customer logging a request, or incomplete or poor quality work (for example filling pot holes or road grading).
Observation: The Pathway system may not be used consistently or effectively across the organisation. An indication from some staff is that there is not enough training provided to CoGB staff with respect to the Pathway system and that staff may not know how to use this system to its full potential. It should also be noted that not all complaints received by CoGB are logged in the Pathway system. For example, any complaint received via letter (and some received via email and phone calls directly to Units may not always be captured in Pathway.
Conclusion: Whilst some work has been done to improve customer service request response times and closing the loop, there is still room for improvement. This needs to be a focus of the entire organisation and all customers (including the community, staff and Councillors). CoGB has a number of customer service request timeframes built into the Pathway system (the customer request and tracking system used by CoGB). This means that the timeframe for a request can be tracked and managed within the system and flagged when this request becomes overdue.
Observation: Discussions with customer service and IT staff have indicated a large number of software systems are used across the organisation for specific or discrete functionality. It is difficult to track customer enquiries and/or complaints across these systems, which dont integrate or talk to each other. This is supported in CoGB Report of Review of Customer Service Charter Version 3 (June 2011), which states that: Completion of requests on the Customer Request System and transfer of request to other systems has been subject to a degree of confusion and a need for staff training in the use of the systems is indicated. Difficulty with the use of the Customer Request Systems and various works programs that do not always talk to each other is an ongoing issue
Recommendations: Adopt and implement an organisation-wide policy and procedure for closing the loop on customer enquiries and complaints. Review and update the current complaint handling procedure to include complaints relating to Councillors.
Information technology
There is an increasing dependence on information technology systems within CoGB and increasing demands for information to make decisions. Management require information for managing staff and other resources. Financial performance and
Observation: The Bendigo and Heathcote customer service center phone systems are different, making it impossible for the Heathcote staff to assist their Bendigo colleagues during busy periods or emergencies (for example after storms).
Current organisation structure it is concerning to see the discrepancies between banding and wages of different officers who in dayto-day activities and responsibilities are otherwise equal. the inconsistencies in payments and banding are discouraging to long term fulfilment of my position and I believe that a review of the pay and conditions of staff is crucial to ensure that consistency and equality is achieved, as well as to ensure overall job satisfaction
Submission to the Independent Review Committee Conclusion: If these issues are resolved, a consistent, efficient and more streamlined approach to data and customer management could be achieved. This may result in efficiencies where less manual, or double handling of information is required. Structural alignment of the organisation has been undertaken to deliver projects more efficiently. Recent changes have seen the centralisation of contracts and project coordination under the Organisation Support Directorate based on recommendations from the Contracts Audit. The Communication Services team has also been consolidated under the Executive Services Unit. A current high level organisation structure diagram is below and is the version outlined on the CoGB website. The level of detail provided on the website is in line with what is generally provided by other similar councils and is sufficient to provide the community and external stakeholders with information relating to the major roles and responsibilities of CoGB. Some submissions to the Independent Review Committee indicated that some position titles were confusing and roles unclear. Some also indicated that there may be overlap in roles and responsibilities. There is no evidence suggesting that this second point is wide spread; however consolidation of CoGB offices would greatly assist in identifying any overlap and improving operational efficiency (see Case Study on page 106).
Recommendations: Develop and mandate a consistent process for logging and tracking enquiries and complaints received in Pathway. Consolidate the Bendigo and Heathcote Customer Support phone systems.
6.4
Organisation structure and delegation
The structure of CoGB and the delegation processes in place have been investigated. During this process, Aurecon undertook detailed discussions with the CEO, Directors and relevant Managers, whilst also reviewing submissions from the public which discussed this topic. Themes are outlined below, with supporting remarks from CoGB and other relevant documentation where appropriate.
Observation: Many staff believe that the recent organisation changes referred to above have helped re-focus the organisation and that the current group of Directors are generally very good with people and developing and maintaining the culture of the organisation. Discussions with staff indicated that some Units have reported that further, small changes are required to the structure to add a staff co-ordinator role, allowing Management to undertake a more strategic role.
Observation: The organisation prides itself on being an employer of choice and in recent years has worked hard to foster a culture of creativity and innovation. CoGB is focused on the structure of the organisation and this is being continually reviewed through monitoring of other local government organisations and through the feedback of customers and stakeholders.
Figure 32 | CoGB organisation structure as at February 2013. Note that this does not include the Mayor and Councillors who sit above the CEO
A reshaping of councils approach to Aged and Disability services could liberate council from day-today service provision to focus on higher order goals such as advocacy, urban planning for an age and disability friendly environment, and so forth, whilst enhancing the local economy and meeting community expectations.
Conclusion: The CEO has structured CoGB so that it is able to respond to the needs of the community, deliver adequate services of a high quality and align with the Vision and strategy of the elected Councillors. This structure is continually reviewed and updated as necessary. Better understanding of roles and responsibilities of staff could be gained through providing descriptions of each Business Units role on the website and reviewing Directorate and Business Unit names and role titles to better align with their functions. Efficiency of operations can be gained through physical office consolidation. This also includes benefits of working in close proximity to other Business Units where roles merge or crossover. These may only be small efficiency gains, however when considered in their entirety, would add to significant cost savings to CoGB.
Conclusion: Inconsistent role description and salary banding was also seen in other units such as Environmental Health. Investigations by Aurecon have indicated that this is not necessarily an organisation wide issue, but nonetheless, does occur in isolated cases. It is noted that the People and Performance Business Unit are working with Managers across the organisation to better define roles and responsibilities and to link this to remuneration.
Recommendation: Undertake an organisation-wide review of all classifications and work structures to formalise and document consistent roles, responsibilities and salary banding.
Aged and Disability Services Review, Draft Report for CoGB, HDG Consulting Group, 22 February 2013
Service reviews currently in progress

Recommendations: Prepare Business Unit descriptions for inclusion on the CoGB website. Review Directorate and Business Unit names to increase clarity around roles and responsibilities. Advocate and plan for the consolidation of CoGB offices. Separate reviews of Aged and Disability Services and Early Childhood Services are currently being undertaken by external consultants and internal CoGB steering committees. These reviews are likely lead to further restructure of the Community Wellbeing Directorate, particularly if Council determines that different service delivery models should be adopted. Aged and Disability Services Many councils across Victoria are reviewing their service provision in this area for a variety of reasons, including: Changes to Federal legislation regarding funding and service provision requirements Cost pressures and costs of delivering service outstripping funding Increased demand for services and increased scope of these services Increased occupational health and safety risk exposure to council
Staffing levels and remuneration

Some submissions have indicated that some areas of CoGB are overstaffed and/or staff are employed on a higher band than they need to be and/or simply get paid too much.
Observation: For example, the Parks and Natural Reserves Team employ four employees at Band Five and five at Band Six who communicate the same messages to their staff. Anecdotal reports suggest that the team is over managed (i.e. top heavy) while becoming increasingly stretched for operational resources because of the increasing demand in services (for example new subdivisions). It was also reported to Aurecon that a model of having a number of crews undertaking reactive maintenance combined with a number of crews undertaking preventative maintenance could provide better coverage, deliver a higher quality service to the community and with minimal impact on budgets. This was mentioned with respect to the tree pruning crews, however would apply equally well to most other Business Units delivering services to the community.
According to the draft Aged and Disability Services Review report: Like many councils, the City of Greater Bendigo (CoGB) is facing a difficult decision in relation to its Aged and Disability Services and specifically the Home and Community Care (HACC) funded program. The broader planning and policy environment is changing and councils cannot assume that the Aged and Disability Service models of the past decades will continue to be the 42 preferable approach for the future.
42
Aged and Disability Services Review, Draft Report for City of Greater Bendigo, HDG Consulting Group, 22 February 2013
In 2011-12 the Aged and Disability Services Unit provided services to 3,956 people. These services were delivered by approximately 230 staff and 200 volunteers at a cost of $9.9 million. The CoGB budget for the HACC funded model continues to increase by approximately $100,000 per annum. In the draft report of the Aged and Disability Services Review, a number of service models were outlined and initially assessed using the CoGB risk assessment framework. These service options are outlined in Table 15 and include the current model (Option A), and five others (Options B thought F). At the time of writing, the preferred service model was yet to be determined. Options for HACC service delivery currently under consideration Option A Continuation of the current model whereby CoGB outsources (contracts) assessment to two geographical suppliers and council directly employs a large community care workforce to deliver services. Option B Separate the target group into older people and younger people with a disability, and outsourcing the assessment and service delivery functions to organisations with expertise and capacity in those segments. Council would no longer directly provide services. Option C Council focus is on the information and access (gateway), managerial and workforce capacity building functions only. All assessment and service delivery would be outsourced. Option D A blended approach whereby council undertakes the assessment, and service delivery is partially provided by Council and partially outsourced as the CoGB workforce reduces the outsourced service delivery increases. Option E Council provides assessment only and outsources all other service delivery. Option F Reshaped and reduced role cease provision of Aged and Disability services.
Table 15 | Service provision model options (Aged and Disability Services Review, Draft Report for CoGB, HDG Consulting Group, 22 February 2013).
The introduction of the National Quality Framework (NQF) from 1 January 2012 has significantly changed the policy context for these services and, as a result, the Community Wellbeing Directorate is currently reviewing its early childhood education and care services to ascertain how current and future resources should be allocated. Long and occasional day care facilities operated by CoGB has traditionally filled a gap in quality, low cost care. Traditionally, the fees charged for long and occasional day care have not covered the cost of this service provision (predicted loss for the 2012-13 44 financial year is $621,000) . This loss is expected to increase in the coming years due to the NQF staff-child ratios and qualification requirements. The review considers the cost versus the benefit of directly delivering these child care services and other alternatives. At time of writing this report, the draft of this review was still in preparation. Therefore Aurecon have not been able to assess the options outlined or potential recommendations. Animal control A review of Animal Control was completed approximately 18 months ago. During that review it was found that CoGB could manage delivering some of these services internally, increasing the ability to respond to the community.
43
Finding: Animal Control was previously outsourced, but is now an inhouse service (except the pound). This has decreased the number of complaints received about the unit and increased its ability to respond to issues in a timely and cost effective manner.
Observation: One of the concerns of staff involved in these review processes was that any restructure should only be undertaken after carefully considering the risks and benefits associated with a change in service delivery models. These risks and benefits include financial, reputational and quality of service. Early Childhood Services Local government has historically also been involved in direct delivery of early childhood services. This service is in place to assist in the provision of high quality, affordable services to families in the local community.
43
Conclusion: Councils including CoGB are reviewing models of service provision in some areas as a result of recent changes to legislation and funding arrangements to minimise cost (and risk exposure) to council, whilst maintaining or extending quality of service to clients in the community. In some instances, this has required councils to cut the range of services supplied.
http://deewr.gov.au/national-quality-framework-early-childhood-education-and-carelegislation-standards-and-progress, accessed 22 June 2013 44 City of Greater Bendigo, Early Childhood Services Review Background information for community consultation, February 2013
I wish to express my sincere disappointment and frustration regarding the manner in which Council have handled my applicationIn saying this, this correspondence is not made in an effort to influence your opinion on whether to grant a permit, but rather to pass on my frustration and disappointment in the decision making process itself.
Recommendations: Review of service delivery of each Business Unit to determine what services are being provided and how they are being subsidised by rates and other income. Report to be generated annually for Council. Finalise the Aged and Disability Services and Early Childhood Services reviews by 31 July 2013. Following completion of the Aged and Disability Services and Early Childhood Services reviews, implement and complete the recommendations adopted by Council in a timely manner. Develop a change management strategy to undertake any adopted structural changes to the Aged and Disability Services Unit. Develop a change management strategy to undertake any adopted structural changes to come from the Early Childhood Services Review.
Conclusion: There is room for improvement in individual performance planning and development at CoGB.
Planning permit process

Statutory planning generally refers to the management of land use and development in accordance with the objectives of a strategic plan, policy or other form of planning controls. The CoGB's Statutory Planning Unit is responsible for assessing and enforcing planning permit applications in accordance with the Greater Bendigo Planning Scheme. The department also coordinates the issue of subdivision permits and the release of plans of subdivision. Current delegations allow these Planners to make decisions on applications that do not have objections (or where these objections can be resolved through mediation). In 2011-12, approximately 95% of all Permits were issued by the Planning Unit without reference to Council, with the remainder going to Council. While the assessment process is the same for all Planning Permit Applications; different proposals will need to include different information in order to satisfy the application requirements and to address the relevant decision guidelines. The Statutory Planning Unit often receives criticism from the community regarding their work, as was reflected in a number of submissions received by the Independent Review Committee.
Individual performance planning and development

The Organisational Support Directorate has requested approximately $300,000 over the next two financial years to implement a new software system to facilitate the implementation of the Individual Performance Development process. The productivity release from an integrated performance monitoring and reporting system will mean that more time is available to focus on:

Delivering outcomes and outputs Improving engagement and communication with stakeholders Improving governance through increased levels of accountability and responsiveness in accordance with section 95 of the Local Government Act Attracting, developing and retaining the right people
Observation: Discussions with a number of Directors, Managers, the CEO and the Organisation Development Advisor also indicated that Individual Performance Planning and Development is an area of staff management that could be improved.
Finding: The link between the objectives set by Council in the Council Plan, Annual Reports and relevant strategies, through to Directorate and Unit Plans to Individual Performance Plans does not currently achieve clear line of sight from the Plan and strategies, to position titles and roles and responsibilities for individuals.
Observation: The community believe that the planning permit process at CoGB is under stress, the planning team provides inconsistent advice, and is not delivering timely decisions. As a result, a portion of the community say they have lost faith in the planning system, including some developers who point to increased costs and lost development opportunities associated with delays in the process.
These comments are not unique critiques of CoGBs planning system as these sentiments were generally echoed in submissions made to the State Governments Victorian Planning System Ministerial Advisory Committee in 2012.
Council advertised their intention to close the road in January 2013. There were 2 objectors who were given leave to appear. This meeting was scheduled on 28 March 2013 and was subsequently postponed hours before the meeting was due to commence. The new meeting date is 30 April 2013.
CoGB undertook an independent audit of the planning permit process in late 2008 which focused on improvements around giving notice, referrals, permit conditions and timing as well as non-statutory aspects of the process such as file allocation and 45 initial assessments . Some areas of concern outlined in that report have been addressed, with implementation of recommendations of the audit around greater consideration of the planning scheme strategic directions and planning controls. Some recommendations, specifically around delegation practices were put to Council, but not adopted. With respect to specific aspects of the planning process that submitters highlighted for Review, the areas of interest include:
The pre-application process: Currently, applicants are encouraged to meet with a member of the Planning Unit for a pre-application meeting. This meeting is an opportunity for the applicants to provide initial information to the Statutory Planning Unit and discuss documentation requirements, the application process and to have any questions answered. For small or simple applications, applicants can attend the Hopetoun Mill office and discuss his/her applications at the front counter with a member of the Planning Unit. For larger applications, a formal pre-application can be arranged. None of these meetings are currently mandatory requirements. A thorough pre-application process would provide guidance and support for stakeholders wishing to make a planning application. The quality of applications received by the Statutory Planning team varies greatly and significant effort is applied to working with applicants to improve his/her applications. Stringent and clear guidelines and an associated communications plan should be developed to improve the expectations of the applicants in terms of timeframes and improve the quality of applications received. If an application does not meet these minimum quality guidelines, CoGB should advise the applicant as soon as possible and the application should not be assessed in its current form. Councils request for further information: To assist Councillors understanding of the planning system and the decision making process, Councillors should undertake annual training in the planning system and be briefed on significant changes to the planning system or planning policy over the course of his/her term in office. Referrals (internal and external): CoGB may refer an application to other statutory bodies or internal departments for advice and comment. These referral authorities have 28 days to respond. They may impose conditions or object to an application. Little can be done by CoGB to improve the response times for external referrals. CoGB has recently improved internal referral response times for Engineering by adding an additional resource to assist with these requests. The mediation process: CoGB has seen improved results with a revised mediation process. Recent data indicates that one-third of all applications with objections are resolved through mediation using in-house consultation officers.
In conjunction with any revisions to CoGBs instrument of delegation, a review of the mediation process and policy should be undertaken to increase community and applicant input into the planning process. This review will also determine if mediation service is adequately resourced and that mediators are capably trained to provide this specialised professional service. Delegations: Currently, planning applications are a major agenda item at Council Forums and Council Meetings. Furthermore, each planning permit application that goes before Council for a decision requires significantly more reporting time by CoGB staff and attendance at Council meetings. This leads to inefficiencies in time for both Councillors and staff, particularly for minor proposals (e.g. 2 lot subdivisions requiring a decision from Council). Councils instrument of delegation was last amended in November 2009. In consideration of continuing increases to processing times for planning permits and planning scheme amendments, a full review of planning delegations should be undertaken to stem the unnecessary allocation of Council resources towards minor proposals (e.g. 2 lot subdivisions requiring a decision from Council) and the associated costs attributed to delays in the decision making process (e.g. holding costs). Study of the planning data provided by the DPCD, a review of planning delegations of other local governments, and examples of Special Committees of Council delegated to make planning decisions should be priority actions to initiate changes to Councils planning delegation.
Finding: The areas identified are generally non-statutory local government interventions that have a significant impact on the quality and timeliness of Councils decision. How CoGB chooses to prioritise and resource these elements of the planning process will have a significant impact on the effectiveness and timeliness of planning permit decisions. For example planning permit applications that receive one objection have to be referred to Council (approximately 5% of planning applications in 2011-12). This increases workload for CoGB staff and increases community frustrations due to extended turnaround times to make decisions.
Conclusion: Significant work has been done by the Statutory Planning Unit over the last five years to improve customer service and turnaround time of Planning Permit Applications. A number of recommendations are provided to continue the improvement of this Unit.
45
City of Greater Bendigo, Planning Permit and Planning Scheme Amendment Processes, Independent Audit, November 2008.
Recommendations: Consider opportunities to improve the relationship between the planning team and public / applicants. This may include educating the community on the planning process and timelines so as to manage community expectations. Benchmark planning practices and metrics with a minimum of two comparable councils (e.g. Ballarat City Council and the City of Greater Geelong) for annual reporting to Council. Review CoGBs instrument of delegation for Planning Permit Applications (including the Surf Coast Shires approach to delegation to a skills based, volunteer, Council appointed Special Committee). Review CoGBs Statutory Planning Unit consultation and mediation process and policy.
Observation: Submissions to the IRC regarding planning scheme amendments focused on the complicated requirements, high costs for preparation of supporting material, and lengthy timelines. CoGB staff primary concerns related to the quality of submissions, the resource intensive nature of the process and the minimal fees and extensive turnaround time associated with the assessment of planning scheme amendments. The State Governments Victorian Planning System Ministerial Advisory Committee in 2012 also included a review of the planning scheme amendment process in their report, covering many of the same issues raised in submissions to the CoGB Review. The State Government has made efforts in recent months to streamline the system and more recommendations from the Committee are expected to be implemented to provide clarity around required information and improve timelines. Issues raised in CoGBs 2008 audit led to recommendations focussed on quality of work prepared when initiating amendments, ensuring that proper notification processes were undertaken and that statutory processes were followed.
Planning scheme amendment process

According to the DPCD website : Planning schemes set out policies and provisions for the use, development and protection of land. Each local government area in Victoria, and some special planning areas, is covered by a planning scheme. Planning schemes are legal documents prepared by the local council or the Minister for Planning, and approved by the Minister. In addition to making decision on Planning Permit Applications, CoGBs Statutory Planning Unit is also responsible for the planning scheme amendment process on behalf of Council. The determination of planning scheme amendments are guided by not only State Government legislation but are also subject to State Government approvals processes, including independent review by a Panel and approval by the Minister for Planning. As a result, planning scheme amendment processes generally take between nine months to two or three years. Given these lengthy timelines and the extensive requirements associated with amendments, both staff and the development community flagged concerns, often across similar themes, on a range of issues.
46
Finding: While an amendment requires the support of the Minister to gain approval, Council has the authority to refuse to proceed with an amendment if it believes the proposal is not strategically justifiable. Council processes can also influence the processing time of a proposal though clear internal processes for accepting and supporting amendments as well as through creative resourcing to minimise the cost of the preparation of the amendment.
Conclusion: There are a significant number of outstanding planning scheme amendments requiring resources by CoGB staff. Currently, this resourcing is a problem as planning scheme amendments take resources away from Planning Permit Applications.
Recommendations: Formulate a clear and transparent set of priorities for planning scheme amendments for the coming financial year for approval by Council and communicate these and the associated processes to the community. Investigate the use of the DPCD Regional and Rural Planning Flying Squad to provide resources for high priority planning scheme amendments.
46
http://www.dpcd.vic.gov.au/planning/planningschemes/about-planning-schemes, accessed 18 June, 2013
maintaining the rage is the best way forward. Striving for mediocrity and a lowest cost cheap denominator should be avoided.
6.5
Innovation in service and/or structure
The strategies of Brisbane Marketing and Hunter Development Corporation (HDC) are discussed below. Brisbane City Council Brisbane City Council created Brisbane Marketing, a wholly-owned subsidiary with the responsibility to drive social and economic development in the Brisbane region and profile Brisbane as a new world city. Brisbane Marketing works closely with Brisbane City Council and is a key partner in driving the Brisbane City Council Economic 47 Development Plan (Brisbane Marketing, 2010 ). Brisbane Marketings projects are focused around the following areas:

Separation of City Futures from CoGB

A significant number of submissions to the Independent Review Committee have questioned the amount of money spent by CoGB on the arts and economic development. Numerous submissions have also questioned the effectiveness of the Economic Development Unit to facilitate economic development in the region, particularly for small business, and facilitate innovation to new and existing industries in Bendigo. Another concern raised in a number of submissions was a lack of transparency in the performance of the City Futures Directorate, specifically around the funding of the arts, economic development and major projects. Analysis undertaken for this Review indicated that it is difficult to assess financial performance of these functions and Business Units as revenue and expenditure data did not clearly represent their performance and could not be matched to the CoGB reported results. For example, there is some frustration and confusion in the community relating to the Grace Kelly Exhibition, the drivers behind holding an event of this scale and its cost. This is investigated further in Case Study Three, beginning on page 102 of this Report. A number of submissions to the Independent Review Committee also indicated frustration with funding of the Arts and confusion over the actual economic benefit this funding has for Bendigo. As part of this Review, the potential separation of some of the City Futures Business Units to increase transparency in performance has been investigated and is discussed below. A number of councils around Australia and the world have created separate Business Units, corporations or other legal entities to promote and undertake commercial, regional economic development and other activities such as marketing, tourism and culture. These entities assist councils in reducing resourcing and funding constraints and opening up new funding and investment avenues. Such entrepreneurial entities foster economic development through attracting and supporting investment, job creation, tourism and other strategies unique to their region. The entities promote investment opportunities as well as secure State and Federal grants for projects. The regional and city councils retain an economic development branch charged with developing long term economic development plans and the entities implement strategies that fulfil and drive these plans. Examples of successful Economic Development Units include:

CBD retail and the Queen St Mall Convention Bureau Export Investment Attraction Leisure Tourism for Brisbane and the surrounding regions of Logan, Ipswich, Scenic Rim, Lockyer Valley, Moreton Bay, Redlands and Somerset Major Events Study Brisbane
These projects are aimed at making Brisbane a leading destination for investment, export, international students, conventions, tourism, major events, retail and film and television production. Brisbane Marketing receives grants, subsidies and sponsorships from State and Federal Governments and private organisations. In addition to grants, Brisbane Marketing offers memberships and partner programmes through its Investment Attraction, Study Brisbane and Convention Bureau branches, as well as other corporate and essential membership programmes. Brisbane Marketing offers value to members through advertising, creative marketing initiatives; sector based events and networking opportunities, as well as offering these parties a voice and proactive role in shaping Brisbanes development. Hunter Development Corporation The Hunter Development Corporation (HDC) was formed by the New South Wales Government to revitalise a range of sectors and regions within the Hunter community. The main goal of the HDC is to revitalise the region and promote economic growth. HDCs key initiatives are to:

Brisbane Marketing: Economic Development Board (Brisbane City Council, Australia) Enterprise Geelong (City of Greater Geelong Council, Australia) Hunter Development Corporation (NSW Government, Australia) Maryland Economic Development Corporation (Baltimore City Council, USA) New York City Economic Development Corporation (New York City Council USA).
Broker development to drive renewal of key strategic State owned land Broker critical projects essential to the economic expansion of the region, particularly on strategically important lands (including port lands) Facilitate development and renewal of regional centres and renewal corridors identified in regional strategies Unlock the potential of industrial and employment lands through infrastructure works, remediation or re-zoning Unlock new opportunities for growth by attracting private sector investment Undertake investigations, master planning and rezoning of renewal sites
47
http://www.brisbanemarketing.com.au/About-Us/What-we-do.aspx, accessed 25 May 2013
Asset and property management of key public domain assets and employment lands noted above Coordinate the provision of key infrastructure Commission market research and conduct investigations that contribute to economic growth and sustainable development within the region (HDC 201248)
These functional areas are critical in driving economic development in Bendigo and the surrounding region. The new entity would still have a pivotal role in fostering economic development, developing the regional economic development plan and would play a significant role in infrastructure planning. The separate business entity would also assist in driving economic development in the region through attracting private business investment, developing and operating major city cultural assets including the convention centre, art gallery and town hall, promoting tourism in the region, major events and other special projects. Benefits There are a number of benefits to this approach, including:

Projects undertaken by the HDC facilitate private sector investment and drive economic growth, employment, commercial and industrial opportunities in the Hunter (HDC 2012). HDC receives funding and support from State and local government as well as local businesses and investors. HDC has also attracted private partnerships and investment for the redevelopment of certain areas such as the Honeysuckle precinct. Bendigo CoGB should investigate the option to separate some City Futures Business Units into an entity similar to Enterprise Geelong and Brisbane Marketing. This would be a new business promotion and innovation vehicle for the Bendigo region. This entity could be owned by CoGB, similar to Bendigo Trust, which was incorporated in October 1973. The Bendigo Trust works closely with the City of Greater Bendigo in the running of all of the Trusts tourism services. While The Bendigo Trust oversees the daily operations of these services, it is the City of Greater Bendigo which owns many of the physical assets. While this proposal should be subject to further detailed study, this organisational structure offers many advantages as the entity is separate to CoGB. It adds additional levels of financial and business transparency and increases the capability of the entity to independently focus on delivering economic initiatives for Bendigo. A separate entity would also assist with the management of risk associated with these initiatives. Finally, a separate business entity responsible for business promotion and innovation would also allow a greater entrepreneurial flavour to be developed. As indicated by a number of submissions to the Independent Review Committee, this could also include the implementation of an Entrepreneur in Residence program. The portfolio of units this entity could hold might include the City Futures Units as listed below. Major Projects would likely remain part of CoGB.

Financial accountability and reporting, leading to increased transparency Legislative provisions, e.g. freedom from public procurement and lengthy bid processes Improved efficiency Additional funding opportunities
Financial accountability and reporting These separate entities must operate as a business, and as such, must carry out transparent, accountable business processes. These entities will produce annual reports including governance, much like Bendigo Trust. The new entity should be arranged under a Board of Director structure with a senior management team responsible for day-to-day operations. This again is similar to Bendigo Trust. Due to the streamlined nature of the entity, grants will be easier to track. This will demonstrate the benefits generated from the grant directly, increasing the likelihood of future success in grant applications and in attracting business investment and partnerships. Increased transparency in reporting and accounts would also apply to funding requests from CoGB. It would be pertinent for the new entity to request funding from CoGB using a formal and documented funding request process. If these City Future Business Units were split from the CoGB to form a new Bendigo Marketing and Cultural vehicle, the increased transparency and confidence with business dealing in economic activities would improve the financial performance, with the view of the entity becoming self-funding within five years of separation from CoGB. Legislative provisions Private entities can form partnerships with local businesses to run major events or for redevelopment projects. They are also not subject to public procurement laws which often require a lengthy and costly bid process.
Tourism Major Events Economic Development The Capital, Bendigo Town Hall and Bendigo Exhibition Centre Bendigo Art Gallery
Service provision vs. economic enabler Elsewhere in this Report, the role of councils has been discussed. A key measure of a successful council is to balance the role of service provision for the community and that of acting as an economic enabler.
48
http://www.hunterdevelopmentcorporation.com.au/documents/Hunter_Region_Growt h_Centre_-_The_Scheme_September_2012.pdf, accessed 25 May 2013.
Improved efficiency
CoGBs overseas-born population has grown to 6.7% and is only marginally smaller than Ballarat at around 8-9 %. Shepparton has the largest at 19% and Mildura then at 15%.
These entities have financial independence and financial motivators enabling them to act like a business, attracting the key personnel for the job. A separate entity would be able to focus on long term improvement projects which may not be undertaken by government agencies with primarily political motivation, as they may not return immediate results. Additional funding opportunities CoGB could establish a membership and partnership programme as was done by Brisbane Marketing to attract additional private investment, creating business growth opportunities, increased tourism, infrastructure redevelopments and other major initiatives. The external entity will also be a catalyst for attracting government grants and forming partnerships with private business to deliver public-private investments. An example of a successful public private partnership of this nature is the Honeysuckle redevelopment project undertaken by HDC which was an urban renewal project including residential and commercial redevelopment. Summary As previously mentioned, CoGB should investigate the option to separate some City Futures Business Units into an entity similar to Enterprise Geelong and Brisbane Marketing and it would be a new business promotion and innovation vehicle for the Bendigo region. This separation would not include Major Projects, with this Unit remaining part of CoGB. The CEO and Executive Management Team would need to decide where this Unit best fits within the current structure. For this new entity to be successful, the following factors must be addressed: Objectives: the objective of the new entity should be to facilitate the economic development of Bendigo through the support of the arts, cultural initiatives and business. Structure: the structure should be independent of CoGB with a Board of Directors and senior management team appointed. Ultimately, the entity will be owned by CoGB, but should have an independent board and management structure. Timeframe: the new entity should aspire to be self-funding in the medium to long term (5-10 years). Transparency and efficiency: Transparency and accountability must be priorities of the entity. CoGB must be an informed and active owner. CoGB should be a clear and consistent owner and steering committee of the entity, guiding projects of the entity through the greater regional economic development plans.
Observation: A number of submissions to the IRC from members of the Bendigo community indicated that the general public are concerned that the City Futures Directorate is quite large and that they believe too much CoGB money is being spent on the arts, cultural events and major projects relating to these (for example the upgrade to the Art Gallery, the new Goal Theatre development, etc.). Separation of some parts of the City Futures Directorate into an entity owned by CoGB may help to allay some of these concerns and allow CoGB to concentrate on what are perceived to be core Council services.
Conclusion: There is significant merit in investigating the creation of a separate entity to act as CoGBs economic development and innovation driver resulting in transparent expenditure with respect to economic expenditure and City Futures generally.
Recommendation: Investigate the option to separate the Economic Development Unit, Tourism, the Bendigo Art Gallery, The Capital and Major Events from City Futures into a separate entity. This investigation must include an implementation plan which would provide strategies and direction for the entity and underlying Business Units to aspire to become a self-funding operation within five years of separation. It must also include a plan to incorporate Major Projects into another Directorate of CoGB.
Other initiatives
Continual improvement Continuous improvement training (Results Based Accountability) was provided to 15 members of staff, mostly managers in December 2010. In July 2011, a report entitled Improving the way we do things was published in the 2010-11 Annual Report, listing 64 continuous improvement initiatives implemented during the 2010-11 financial year.
Conclusion: Formal continual improvement practices have been identified as an area of improvement. The People and Performance Unit is currently evaluating different formal continuous improvement methodologies with a view to pilot implementation during the 2013-14 financial year. The Organisation Support Directorate has requested $30,000 in the 2013-14 financial year Budget to implement this pilot.
All councillors and senior staff work to the best of their ability within a system that has become more complex and bewildering to some. Even if our council were the best council in Australia it should still hunt down best practice improvement ideas
Recommendation: Undertake a formal organisation wide continual improvement program ensure agreed recommendations are assessed and implemented. Bendigo Inventor Awards CoGB has established and provided annual management and promotion of the Bendigo Inventor of the Year Awards and support programs. The intent of the Bendigo Inventor Awards is to encourage imagination through a competitive process that will identify, support and promote practical, original ideas that create employment and recognise Central Victoria as a center for invention and innovation - "A Thinking City". This initiative has been running for four years and has recently called for entrants for this years awards. Since 2010 there have been a total of 412 entries, of which 212 come from the Bendigo region. Year 2010 2011 2012 TOTAL
Total Entries CoGB entries % Other Victoria % Other Australia % Overseas
Conclusion: CoGB is the only council in Victoria with a population over 100,000 that does not have a Cultural Diversity Strategy or RAP. This Strategy is required as it will sustain and strengthen Bendigos continuously growing multicultural communities.
Recommendation: Develop a Reconciliation Action Plan and Cultural Diversity Strategy during the 2013-14 financial year.
Other innovative ideas from submissions Two other innovative ideas raised in submissions by the Independent Review Committee are included below for consideration by CoGB. Free Wi-Fi in Hargraves Mall Currently Flinders Street Station in Melbourne offers free Wi-Fi and indications from one submitter were that this should be considered for parts of the Bendigo CBD. This would demonstrate "a smart city", commitment to the evolution of the way we communicate and stimulate vitality in specific areas of the CBD. Advertising could be used as a revenue stream to help pay for the cost of this service to the community. Entrepreneur in residence One idea floated in submissions was for CoGB to employ an entrepreneur in residence to promote economic development in Bendigo and encourage the development of new businesses. This position would also try to encourage innovation.
% 0% 1% 2% 10%
121 170 121 412
91 57 64 212
75% 34% 53% 51%
29 101 47 177
24% 59% 39% 43%
1 10 8 19
8% 6% 7% 5%
0 2 2 4
Table 16 | Participation statistics for Bendigo Inventor Awards
Diversity Bendigo commenced European settlement with a thriving migrant community due to the local gold mining industry which also created its traditional links to the Chinese community. More recently, Bendigo is seen by stakeholders engaged during this Review to be primarily a white, homogenous Anglo Saxon community, which should embrace cultural diversity.
6.6
Benchmarking
Aurecon has carefully considered the appropriateness of comparing or benchmarking CoGB to other organisations. It is difficult to undertake benchmarking of many metrics with private enterprise for a number of reasons, including: Drivers: unlike private enterprise, CoGB is not driven by profits. The primary role of CoGB is to delivery services to the community on behalf of the Greater Bendigo City Council. To this end, it is not entirely appropriate to compare salaries to those in private enterprise. This is particularly the case for senior management, where salaries in large private organisations are often linked to performance, with salaries made up of both a cash and bonus/incentive component. Scope of services delivered: as previously stated, the range of services delivered by CoGB is very broad. This broad range of service delivery means that the structure of the organization differs by Directorate and Business Unit. It is not appropriate to compare the structure of this organisation to others in private enterprise which have different service delivery profiles.
Finding: Two strategies that CoGB have not developed in order to embrace diversity are a Reconciliation Action Plan (RAP) and a Cultural Diversity Strategy. A Reconciliation Action Plan is an agreement with the local Aboriginal Community that documents what CoGB will do within its sphere of influence to contribute to reconciliation in Australia. The Cultural Diversity Strategy is a strategy to plan and outline the provision of culturally appropriate services that will meet the diverse needs of the community and help attract and retain more migrants in the region.
Due to these reasons, benchmarking is limited to other similar local government organisations, some state government organisations and some private enterprise metrics. The strengths and limitations of these comparisons are outlined in the following sections.
Finding: The salaries offered by the organisation in the Enterprise Agreement are generally lower than regional competitors and metropolitan Melbourne councils.
Labour costs
Current labour expenses for CoGB are in the order of $48 million per annum or 49 35.7% of the organisations total operating expenditure in 2012-13 .
City of Greater Bendigo 1a 2a 3a 4a 5a 6a 7a 8a Annual % Increase $785.50 $831.62 $873.81 $936.52 $1,069.21 $1,308.98 $1,469.73 $1,709.62 3.90% Yarra Yanges Shire $838.95 $879.95 $814.85 $985.61 $1,091.05 $1,334.26 $1,498.30 $1,627.12 3.80% Ballarat Greater Geelong $840.21 $881.31 $917.84 $997.72 $1,098.97 $1,302.84 $1,446.50 $1,665.95 4.25% La Trobe Greater Manningham Shepparton $823.42 $867.77 $905.67 $978.35 $1,070.88 $1,289.02 $1,428.33 $1,636.43 4.00% $820.62 $869.40 $914.90 $1,008.04 $1,113.53 $1,358.10 $1,525.05 $1,773.70 4.00% Knox City Banyule City $853.72 $893.15 $926.71 $996.85 $1,098.26 $1,334.34 $1,493.21 $1,729.84 4.00%
$824.30 $865.36 $902.34 $979.72 $1,071.87 $1,278.31 $1,418.44 $1,627.12 3.80%
$820.26 $866.48 $914.82 $1,006.80 $1,111.77 $1,343.51 $1,499.09 $1,730.83 4.00%
$820.27 $869.63 $914.10 $1,007.71 $1,121.35 $1,376.83 $1,550.12 $1,808.24 3.20%
Table 17 | Weekly salary comparison of regional and metropolitan councils based on latest Enterprise Agreement figures (as at December 2012)
4.5
Average % Increase Per Annum
4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5
Figure 33 | Comparison of employee benefit costs as a percentage of total operating expenditure for 201011, 2011-12 and 2012-13 (forecast estimates)
Finding: Benchmarking to other Councils has shown that the labour costs of CoGB as a percentage of total operating expenditure is comparable to, or less than other similar Councils (Figure 33).
Annual % Pay Increase (Average) Industry Average
Enterprise Agreement salary comparison

Almost all staff are employed under the Greater Bendigo City Council Enterprise Agreement 2010. This agreement became operational on 1 September 2010 and has a nominal expiry date of 30 September 2013. Representatives from CoGB and the relevant unions are to begin negotiations on the new agreement shortly. The average salary increase for Local Government Enterprise Agreements as at December 2012 was 3.8% or $38.70 per week (approx. $10 per 1%). Figure 34 shows the 2012 Enterprise Agreements as at December 2012, indicating that CoGB is in line with the industry average on this benchmarking measure.
Figure 34 | Comparison of average percentage salary increase in current Local Government Enterprise Agreements as at December 2012
As the majority of CoGB staff are covered under an Enterprise Agreement, benchmarking is not appropriate against private enterprise where such agreements are not in place. In these organisations, salary and remuneration reviews are generally conducted on an individual basis once a year, with salary increases linked to an individuals performance.
49
of Greater Bendigo, 2013-14 Annual Proposed Budget, page 58
it is often stated that the City employs many, many hundreds of people. Whilst employment is good for the local area, the number of staff seems to continually grow. It also seems that some of the jobs are not locally advertised. Are the staffing levels appropriate and are they benchmarked against industry standards?
Aurecon has reviewed non-local government Enterprise Agreements across Victoria to determine the appropriateness of benchmarking to these. The following pay increases are included in the Victorian Public Service (VPS) 50 Enterprise Agreement : 3.25 per cent on 1 July 2012 1.25 per cent on 1 January 2013 1.50 per cent on 1 July 2013 1.75 per cent on 1 January 2014 1.50 per cent on 1 July 2014 1.75 per cent on 1 January 2015 1.50 per cent on 1 July 2015
Examples include the recent teachers pay dispute in Victoria, the current pay dispute between Paramedics and Ambulance Victoria and the often reported pay disputes between Qantas and the Australian Licenced Aircraft Engineers Association (ALAEA) and the Australian & International Pilots Association (AIPA).
CEO and Director salary comparison

CoGB has provided data for the independent salary package benchmarking survey for local governments around Australia conducted by McArthur Consulting. This industry data splits councils into categories based on their size, revenue and whether they are regional or metropolitan. CoGB falls within the Category Two band, with 21 similar councils (Table 18). McArthur has confirmed that of the 21 councils listed in Category Two, 16 are Victorian councils: Banyule, Bendigo, Cardinia, Casey, Darebin, Hobsons Bay, Hume, Kingston, Knox, Latrobe, Manningham, Maribyrnong, Moonee Valley, Moreland, Stonnington, and Yarra Ranges. Geelong is in Category One and Greater Shepparton, Melton, Nillumbik and Wangaratta fall into Category Three.
Category 1 2 3 4 5 Very Large Metropolitan/Regional Council Large Metropolitan /Regional Medium Metropolitan/Large Rural Small Metropolitan/Rural Small Rural Budget Greater than $160 million $100M - $160M $60M - $100M $30M - $60M Less than $30M No. of Councils 16 21 30 41 83
In addition, a lump sum payment of $1,500 (or equivalent pro-rata amount for part time employees) was payable to eligible VPS employees who received a salary on 1 July 2012 and were employed on 29 July 2012. Broadly speaking, the annual salary increase for VPS employees is in the order of 2.75-3.25% each year, with salaries incremented each 6 months. This is slightly lower than the CoGB Enterprise Agreement salary increase of 3.8% per year, although CoGB employees did not receive a lump sum payment at the commencement of the Agreement in 2010. It is important to remember that the CoGB Enterprise Agreement is almost three years old and based on parameters prevailing at the time it was negotiated. Other pay increases in Enterprise Agreements, or current offers under negotiation, noted in the public domain include: Victorian Paramedics - The State Governments current offer allows for a 2.5% 51 increase, without a reduction in any conditions . Victorian Public School Teachers State Government released figured indicate a pay increase of 3% in 2013, 2.75% in 2014 and 2.75 % in 2015. All staff will 52 receive a one-off lump sum of $1000 on top of his/her salary . Victorian Police - 4.72% pay rise each year until 2015 in exchange for 53 productivity gains .
Table 18 | Categorisation of councils in the National Remuneration survey Report conducted by McArthur. CoGB falls within Category Two
A positive sign for CoGB is that the negotiations undertaken for the current Enterprise Agreement were, according to senior staff, constructive and efficient. This compares favourably to a number of large private and public organisations where significant and protracted disputes arise each time an Agreement is negotiated.
Finding: Salary (total package including salary, superannuation and allowances) benchmarking information provided by McArthur reveals that the salaries of CoGB CEO and Directors are lower than the first quartile (i.e. bottom 25%) when compared to other similar councils (Table 19).
50
http://www.education.vic.gov.au/hrweb/employcond/pages/newagree.aspx, accessed 18 June 2013. 51 http://www.theage.com.au/victoria/paramedics-considering-action-after-pay-offer20130212-2eb5f.html, accessed 23 June 2013 52 http://www.theage.com.au/victoria/teacher-unions-claims-on-pay-deal-dont-quiteadd-up-20130418-2i32a.html, accessed 23 June 2013 53 http://www.tpav.org.au/_documents/Journals/2011/e758242c-81f9-426d-80e652249863edc1/TPAV_Journal_December_2011.pdf, accessed 23 June 2013
Structure and manager-staff ratio It would seem for the scope of work performed at the COGB there are too many management staff to the ratio of those who perform the work. If there were more skilled officers to perform the work it would allow for greater service delivery.
CoGB Position CEO Director A Director B Director C Director D Director E Median Salary % of CEO Salary CoGB. $305,000 $193,940 $199,328 $193,940 $193,940 $201,482 $193,940 64% 1st Quartile $300,000 $195,090 $200,000 $203,899 $209,494 $209,494 $203,899 68% Median $311,143 $212,022 $218,400 $220,000 $221,801 $221,801 $220,000 71% 3rd Quartile $352,000 $220,000 $233,867 $225,429 $232,960 $232,960 $232,960 66% Average $318,475 $210,131 $214,354 $217,517 $221,913 $221,913 $217,517 68%
The structure of the organisation is the responsibility of the CEO. This structure must be such that it is responsive to the needs of the community whilst also reflecting the Vision and strategy as outlined by the elected members of Council. Therefore, every local government organisation is structured differently.
Finding: Investigations by Aurecon have found that although there are differences between how local government organisations structure themselves, there are also some similarities. For example, Table 22 indicates that whilst CoGB, Greater Shepparton and Latrobe have five Directorates, Ballarat has six and Yarra Ranges, four. The total number of Direct Reports for the Directors and CEOs of these organisations ranges from 30 for CoGB down the 24 for Yarra Ranges. The Manager:Staff ratio is between 1:18 and 1:26, except for Geelong, which has a significantly higher ratio (mean 1:25.0, median 1:20.1, Table 21).
Table 19 | Comparison of CEO and Director salary packages based on the McArthur 2012-13 Local Government National Remuneration Survey Report
The median CoGB Director salary is 64% of the CEO, compared to 71% for the median salaries of all councils in Category Two. In the private sector, CEO and senior director salaries consist of three components:

Base Pay: Cash salary, flexible benefits, superannuation Annual Incentives: Bonus linked to business plan, delivered in cash and-or equity Long-term incentives: three to five year timeframe, this can be cash or shares
Council City of Greater Bendigo Greater Shepparton City Council Yarra Ranges
Directors/ Managers 30 25 24 31 25 32
FTE Staff 663 493 636 601 457 1418
Manager: Staff Ratio 1:22.1 1:19.7 1:26.5 1:19.4 1:18.3 1:44.3
Annual Revenue ($M) $148,495 $111,761 $146,472 $125,270 $113,545 $262,171
Population
For CEOs in the local government sector, only a base pay component is paid, which includes salary, and superannuation. A salary sacrifice vehicle amount can also be deducted from the total employment package.
103,000 59,972 148,754 94,000 73,500 223,047
Observation: Broadly speaking, a CEO of a company the size of CoGB in the private sector would have a base salary at least that of CoGBs CEO. However, he/she would likely have short and long term financial incentives, meaning that overall his/her take home salary would be far greater. This is a common theme for all levels of government.
Ballarat City Council Latrobe City Council City of Greater Geelong
Table 21 | Comparison of Manager:Staff ratios, 2011-12 annual revenue and population numbers
Councillor allowances
Councillor allowances are in line with those published by Local Government Victoria. CoGB falls within Category Three of councils (those councils other than Melbourne City Council). The following bands apply.
Category 1 2 3 Councillor Allowance (per year) $7,542-$17,969 $9,317-$22,405 $11,204-$26,843 Mayor Allowance (per year) Up to $53,684 Up to $69,325 Up to $85,714
Conclusion: CoGB falls mid-range in the manager:staff ratio comparison. This suggests that overall; CoGB is not over-managed when looking at Directors and Managers when compared to these benchmark councils. Readers are however directed to Section 6.4 that indicates that some restructuring may be required where there are larger numbers of leading hands and coordinators than may be required. In addition, Section 6.5 discusses the possibility of creating a separate entity for some City Futures Business Units.
Table 20 | Councillor and Mayor annual allowances as published in the Victoria Government Gazette S360 (26 October, 2012)
There are very few KPIs used to assess and monitor the performance of departments or units or the organisation as a whole. For example injuries are tracked but there is no target for improvement or any periodic monitoring of injuries by the units.
Position City of Greater Bendigo CEO Organisation Support (OS) Community Wellbeing (CW) Presentation & Assets (P&A) Planning & Development (P&D) City Futures (CF) Total Direct Reports Greater Shepparton City Council CEO Sustainable Development Infrastructure Community Business Services Organsation Total Direct Reports Yarra Ranges CEO Corporate Services Environment and Engineering Planning, Building & Health Social & Economic Development Total Direct Reports Ballarat City Council CEO Development & Infrastructure Growth & Economy People & Communities Destination & Connections Organisation Services & Development Finance (Exec Mgr) Total Direct Reports Latrobe City Council CEO Organisational Excellence Recreation & Culture Liveability Community Liveability Governance Economic Sustainability Total Direct Reports
# of Direct Reports
Comparable Position within CoGB N/A N/A N/A N/A N/A N/A
Position City of Greater Geelong
# of Direct Reports
Comparable Position within CoGB CEO P&A CW/P&D OS CF CF/CW/P&A
6 5 4 4 5 6 30 5 5 3 4 4 4 25 4 6 5 5 4 24 7 6 2 4 3 6 3 31 5 3 4 4 5 4 25
CEO City Services Community Services Corporate Services Economic Development, Planning & Tourism Projects, Recreation & Central Geelong Total Direct Reports
8 4 5 7 3 5 32
CEO CF P&A CW OS OS/CEO
Table 22 | Comparison of organisational structures as at May 2013
Performance monitoring across the organisation

Performance monitoring and reporting is an area of improvement flagged across all of local government in Victoria. Organisational and staff performance has traditionally not been clearly linked to the organisations vision, strategy and objectives. Private enterprises know if their customers are satisfied with the goods or services they offer. This is reflected in profit margins and share prices. The role of local governments are different as they are not profit seeking nor wealth driven organisations. As a councils bottom line is significantly different from that of corporate enterprise, or even not-for-profit organisations, it is often difficult to judge whether a council is doing well. Finding: Various works have been undertaken in the area of performance monitoring for local government. Reports by LGPro and DPCD indicate that for many councils, further work is still required to clearly articulate and report on metrics summarising the quantity and quality of service delivery for these organisations to embed a high performance culture. The diagram below shows the link between an organisations strategic direction and its strategic and operational KPIs.
Figure 35 | Outline of the structure of strategic visions, objectives and operational KPIs, derived from http:--www.dmreview.comissues-20040901-1009207-1.html
CEO OS P&A P&D CW/CF
CEO P&A/P&D CF CW CF/CEO OS OS
CEO OS CW/P&A CW OS/P&D/CEO CF/P&A
In order monitor the performance of council much more emphasis should be placed on the specifics of each functional area and provide measurable (not intangible) outcomes for each function/activity. These aims and objectives also need to be included in the employee duty statement/position description and performance review so we know that their position is essential and how they contribute to the overall performance of Council.
Councils are required to provide performance information in their Annual Reports. These legislative requirements should be taken as a minimum standard. This performance information should clearly articulate performance and progress against their vision, strategy and objectives. Councils need to carefully select these metrics to provide a balance between useful information and the cost associated with collecting it. According to the Best Value Framework, these metrics should also be selected to provide a clear link between individual, corporate and service objectives as outlined in the various plans and strategies within the organisation. They should be formulated to:

consider and rank priorities with reference to an organisations vision link priorities at different levels (i.e. the strategic and operational) monitor and measure priority achievement provide a balanced approach to measurement report only on the measures which are important
Governance Statutory planning Economic development Roads Libraries Waste collection Pools Street sweeping Sports grounds Animal management Food safety Home and community care Maternal and child health Immunisation
They are to be assessed against the criteria of service effectiveness, appropriateness, quality and cost. Financial performance indicators include:

Local Government Victoria is currently completing work on assisting councils selecting and reporting on meaningful KPIs. A pilot will be conducted in 2013-14, with a full roll out by the Minister currently planned for 2014-15. A draft working paper outlining the Local Government Performance Reporting Framework and Indicators (LGPRF) was released in May 2013. Draft indicators have been developed for three thematic areas to provide an overall depiction of council performance.
Operating position Liquidity Obligations Stability Efficiency
Service performance To provide relevant information about the effectiveness and efficiency of local government services.
Financial performance To provide relevant information about the effectiveness of financial management in local government.
There are no consistent assessment criteria across these indicators, rather measures are tailored for each.
Sustainability To provide relevant information about whether local governments have the capacity to deliver services, absorb changes and shocks and make decisions in the best interestes of the community over the long term.
Sustainability performance indicators include:

Financial performance Capacity Governance and management
Again, there are no consistent assessment criteria across these indicators at present and tailored metrics have been devised for each.
Individual performance planning

There is a strong link between monitoring the performance of an organisation and monitoring the performance and alignment of the individuals working within it. CoGB is currently working on improving its individual performance planning and management processes and practices and changing the culture of the organisation to more closely reflect high performance cultures generally seen within private enterprise. For private enterprise, increased goal achievement and performance is generally linked back to remuneration. For instance, if an employee meets or exceeds his or her KPIs in a given year, this is reflected in an above market salary increase or performance bonus.
Figure 36 |LGPRF indicator sets and objectives
54
For each theme a number of areas are flagged for assessment using multidimensional criteria. Services to be assessed include:
54
Draft Performance Report Framework and Indicators Working Paper, Department of Community Planning and Development, 2013
Currently COGB customer service model is not integrated over building sites and therefore very disjointed. This creates all sorts of issues with customer service delivery. One would assume that the customer service unit should operate within the one umbrella to ensure consistent, user friendly, cost effective customer service delivery.
This is not necessarily appropriate for the local government environment where salaries are linked to the Enterprise Agreement for the majority of staff and processes are in place to regulate salary increases. Other rewards for the individual concerned must therefore be considered, including:

Lean Thinking at the City of Melbourne The Lean Thinking system was implemented at the City of Melbourne in 2009 where the system was focused on 10 organisational processes, incorporating many areas of the organisation including parking meters, child care, council reports and the recruitment process. Details of the system provided by the City of Melbourne indicate that: Lean Thinking is an improvement system which focuses on improving the quality, timeliness and cost of services we deliver from the perspective of the customer. The system provides a structure, techniques and tools for carrying out improvements. Its ultimate goal is to deliver increased satisfaction for our customers and staff. The City of Melbourne has been a pioneer in local government in Australia, fully embracing Lean Thinking as the continuous improvement model. By applying the Lean methodology to its organisation, the City of Melbourne has identified a number of areas where inefficiencies existed that either decreased customer service levels, decreased the quality of services provided or increased cost to the organisation. For example, the Lean Thinking project identified 60% of payments at the City of Melbourne Childcare Centres were overdue at any one time. Strategies have been put in place to increase on time payments and provided staff more time to focus on the children. The Lean Thinking program is coordinated by a dedicated team who provide guidance and support to managers. Their aims for this system are to increase customer and staff satisfaction with improved services and processes, increase first time quality and timeliness, reduce costs and reduce the environmental impact. All process improvements must be measured against these outcomes.
Increased skill development for the individual Better career opportunities for the individual within the organisation Increased transparency and recognition of consistently high performers
One of the common features of private enterprises with a culture of high performance is that the performance of its individual staff links closely back to the performance of the organisation as a whole.
Finding: Currently, CoGB has an inconsistent process to systematically monitor, assess and report on individual performance, which is a critical driver of productivity. Individual performance management and the development of a high performance culture will assist CoGB to provide a vertical line of sight to the processes in place that support individual performance planning. This will facilitate full alignment with Business Unit Plans, corporate strategies, the Council Plan and Budget.
Conclusion: Individual performance planning and development at CoGB needs to be improved.
Finding: Many CoGB improvement projects are not co-ordinated centrally, but rather are small, ad-hoc pieces of work relevant to a particular Directorate or Business Unit. There are currently plans in place and Capital Expenditure requests pending to trial an organisation wide continuous improvement program next financial year (likely to be either Lean-Six Sigma or the Business Excellence Framework).
Continual improvement
Continuous improvement in the provision of services is one of six Best Value Principles introduced by the Victorian State Government in 1999. CoGB does identify and undertake some continual improvement projects, which are reported on in formal Council reports, for example the Annual Report. A number of private and government organisations use these systems and have found them to be ways in which service delivery, customer satisfaction and organisation performance can be improved significantly. City of Melbourne implemented the Lean-Six Sigma system in 2009, and its experience is outlined below.
Recommendation: Implement a formal organisation-wide continual improvement program.
Planning Permit Applications It is important to allocate correct funding for statutory and regulatory services, however these services more so than others, need to be highly effective and efficient and their level needs to be in accordance with minimum requirements.
% completed in 60 days
DPCD monitors planning permit activity as a key part of improving Victoria's planning system. Planning permit data is collected monthly from Victoria's local governments and is made available as a monthly or yearly report. These reports provide vital information on statutory planning processes and allow comparative assessments regarding permit activity levels, factors affecting permit workload volumes, and differences between and within local governments and regions across Victoria. A review of the data from the previous four financial years provides insight into continuing trends into statutory planning at CoGB and supports much of the anecdotal information gathered during consultation.
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
Finding: With respect to planning permit applications, despite efforts by the State Government to reduce requirements for planning permits, the number of permit applications with the CoGB is steadily increasing with a 23% jump in the previous four year period. Planning applications have also become more complex with more applications requiring referral to external authorities for advice, in addition to an increased number of requests by Council for further information and more applications requiring public notice. This rise in overall application numbers and complexity has also contributed to increased processing times for applications. Combined with Councils onerous planning delegation requirements, which requires all applications with one or more objections to be determined by Council, the number of applications determined within the 60 day statutory timeframe has fallen from 74% in 2008-09 to 62% in 2011-12. In addition the median processing time for applications in the same timeframe has increased from 55 to 64 days. Benchmarking data shows that while most councils are facing similar trends around increasing numbers and complexity of applications, some have undertaken proactive interventions to address growing processing times.
% completed within 60 days
Regional City Average
Figure 37 | Percentage of planning applications completed within statutory requirement of 60 days (201112), sourced from Planning Permit Activity Reporting System, DPCD
For example, within the grouping of Regional Cities, Ballarat City Council has been able to show a marked improvement in processing times. Significant progress has been made by Ballarat in both gross and median days to determine applications. One exceptional improvement made was around applications resolved within statutory timelines, rising from 54% in 2008-09 to 82% in 2011-12. Ballarat City Council gives some recognition for this improvement to increased staff resources and improved advertising and referral processes, with most of the credit going towards revised planning delegation, which results in less than 3% of applications going to Council. Justification for the revised delegation was to focus assessments and deliberations on significant proposals which can greatly impact upon the City rather than bog down the planning system in reporting processes and debate that was occurring in relation to minor applications.
100% 95% 90% 85% 80% 75% 70% 65% 60% 55% 50%
% decisions
% of decisions made under delegation
Regional City Average
Figure 38 | Percentage of application decisions made under delegation (2011-12), sourced from Planning Permit Activity Reporting System, DPCD
Special Planning Committee The Local Government Act 1989 allows council to delegate some of their decisionmaking powers to Special Committees of the council. Many local governments across Melbourne and regional Victorian have drafted their Instrument of Delegation to create Special Planning Committees, as an alternative to full meetings of council, to determine planning permit applications. Membership on these committees is not limited to councillors, as they can be constructed to also include council staff and community members. For example, the Surf Coast Shire Planning Committee consists of a panel of nine community members with full voting rights, four of whom will constitute the Committee when it meets on a fortnightly basis. The Committee is advised by one officer with the right to debate but not to vote on matters before the Committee. The benefit of these Special Committees is they assist a council by spreading a councils workload, allowing it to properly consider and debate key policy issues and decisions rather than get into the detail of more minor decisions that would otherwise take up valuable time in a formal meeting of the full council. A Special Committee also enables council decisions to be made more quickly as the committee can meet as often as council requires, ensuring statutory timelines can be met. Special Committees also enable decisions to be made at the appropriate level by people who are trained or have a great deal of skill or knowledge in area or profession. In the case of the Surf Coast Shire Planning Committee, it is comprised of residents with a range of expertise and experience across the planning, building and design professions. Their combined knowledge of the area and assessment requirements ensures decisions are made by people who both know the local planning environment and policy context and can make sound planning decisions based on strategies, policies and guidelines adopted by the council. With respect to further review, once the Special Committee has made a decision, both the applicant and the objectors have the right of appeal to The Victorian Civil and Administrative Tribunal (VCAT), if they are not satisfied with the decision.
Recommendations: Consider opportunities to improve the relationship between the planning team and public / applicants. This may include educating the community on the planning process and timelines so as to manage community expectations. Benchmark planning practices and metrics with a minimum of two comparable councils (e.g. Ballarat City Council and the City of Greater Geelong) for annual reporting to Council. Review CoGBs instrument of delegation for Planning Permit Applications (including the Surf Coast Shires approach to delegation to a skills based, volunteer, Council appointed Special Committee). Review CoGBs Statutory Planning Unit consultation and mediation process and policy.
Strategic planning
Strategic planning refers to the preparation of land use plans and associated documents which are used to guide land use decisions by setting out the overall vision, policies and plans for an area. Strategic planning at the CoGB is undertaken by the City Strategy Unit whose purpose is to plan, facilitate and coordinate the development of major Council strategies. City Strategy covers a wide range of planning functions, some which fall outside the typical structure for strategic planning units. The work for City Strategy includes disciplines relating to land use planning, social planning, place based planning, heritage planning, and transport planning as well as Council and Community planning functions. Given this diverse work program and the unique nature of the units policy and strategy development focus, benchmarking the units performance against other similar Business Units is a challenging task. Though the structure of City Strategy is unique, there are several work streams within the unit which are similar across local governments throughout Victoria. The development of the Council Plan, processing planning scheme amendments and the preparation of structure plans and heritage studies can all be benchmarked in against factors such as completion of projects within agreed-regulatory time frames, budget, and compliance with statutory requirements.
Conclusion: Significant work has been done by the Statutory Planning Unit over the last five years to improve customer service and turnaround time of Planning Permit Applications. A number of recommendations are provided to continue the improvement of this Unit.
Aged and Disability Services

Benchmarking against other councils indicates that some Aged and Disability Services (particularly HACC) may achieve increased financial efficiencies through outsourcing. For example Melbourne City Council only provides assessment services. Actual care is provided by contracted organisations. It has approximately 700 clients and assessment is carried out by a team of four (one team leader and three assessment officers). City of Wodonga is in the process of discontinuing its provision of services within the HACC environment and will shortly make its 70 HACC staff redundant. Reports 55 indicate that this will save approximately $1 million per year .
perceived by the person making the complaint or requesting the service). Work is currently being undertaken to provide staff with additional guidance, strategies, policy and procedures to improve performance in this area. It would appear that one of the main sticking points is requests moving across the organisation; hence an organisation wide response is encouraged. Statutory planning received a large number of complaints in the submissions sent to the Independent Review Committee. These complaints ranged from poor customer service, inconsistent messages by staff, time taken from application received to decision made and meditation practices. A number of these issues have been addressed in this section and recommendations are outlined. Performance management (for both the organisation and the individuals working within it) has been flagged as an area that requires improvement. Current KPIs in the Annual Report are only useful when read in conjunction with the metrics, data and survey results and it is difficult for the reader to clearly gauge the organisations overall performance. Further work needs to be conducted to set KPIs for the organisation that balance the need to track organisational performance with the cost associated with tracking this data. In addition, further investment needs to be made in systems and processes that will enable the organisation to track its performance that of its staff. This is currently a state-wide issue for Local Government and is being addressed at a state level by DPCD and the Minister for Local Government. The structure of the organisation was changed to better reflect the visions and objectives of the former councillors. This has seen CoGB become a regional leader in economic development, tourism and a leader in attracting and retaining talent. Benchmarking against other councils has indicated that the organisation structure is generally in line with other similar organisations across the state. The CoGB leadership team continues to monitor and make minor changes to the structure of the organisation as required. For example, the reviews currently being undertaken in the areas of Aged and Disability Services and Early Childhood Services are likely to lead to structural changes to the organisation caused by a change in the service delivery models for these areas. Continual improvement strategies have, to date, generally been deployed across single Directorates and/or Business Units. Aurecon therefore encourage the pilot of an organisation wide continuous improvement strategy in the next financial year.
Conclusion: Councils including CoGB are reviewing models of service provision in some areas as a result of recent changes to legislation and funding arrangements to minimise cost (and risk exposure) to council, whilst maintaining or extending quality of service to clients in the community. In some instances, this has required councils to cut the range of services supplied.
Recommendations: Finalise the Aged and Disability Services and Early Childhood Services reviews by 31 July 2013. Following completion of the Aged and Disability Services and Early Childhood Services reviews, implement and complete the recommendations adopted by Council in a timely manner. Review the services provided by each Business Unit and define the extent to which they are being subsidised by rates and other income. Report to be generated annually for Council.
6.7
Conclusion
The current CoGB leadership team have focussed staff on quality service delivery for the community that they support. CoGB is generally seen as an organisation that is focussed on its customer, provides good quality services to the community and is performing well overall compared to other local councils. Evidence would suggest that when CoGB get it right the first time the community is generally happy with the level of service provided, however there is evidence to suggest that repeated queries and complaints are sometimes necessary due to time delays, poor or inconsistent communication from CoGB staff, or poor quality work (as
55
http://www.bordermail.com.au/story/1313256/council-to-bow-out-of-communitycare/, accessed June 5, 2013.
Prioritising capital and major works
7. Prioritising capital and major works

A significant amount of time and energy is invested into the planning, design and documentation of a project. There are a number of risks in raising community expectations and then not being able to implement projects; design standards change, user groups change and so do their various needs.
Confidential submission to the Independent Review Committee
7.1
Management Strategy, should ultimately inform and assist in prioritising and the creation of the Capital Works Program. Therefore, this Review initially focussed on:
This section outlines Aurecons investigations the prioritisation of capital and major works at CoGB. The structure of this Section is as follows: Section 7.2 Background: Brief background of the approach followed to assess the process used to prioritise capital and major works Section 7.3 Asset management framework: A summary of best practice asset management framework and how CoGB compares Section 7.4 Prioritising capital works: A summary of the captial works prioritisation process used by CoGB Section 7.5 Data and systems: A summary of the data and systems in place at CoGB to manage assets and capital works Section 7.6 Cost estimates and project budgets: A summary of the cost estimation and budgeting process used by CoGB for capital and major works Section 7.7 Conclusion: Concluding remarks.
CoGB Asset Management Strategy and the sub strategies for each asset class Assessment of whether the capital works and asset management action plan is in line with the overall Strategy and sub strategies Whether the action plan clearly outlines potential projects and their preferred timing.
The Asset Management Strategy and its processes are pivotal to the creation of the Capital Works Program and Budget. Not only is the Asset Management Strategy and sub strategies important, it is equally important that CoGB has an effective surveillance process to capture the necessary data to continuously improve the Asset Management Strategies, Action Plans and the development of the next annual Capital Works Program. A high level review of this process was conducted. In summary, a high level review was undertaken of the effectiveness of CoGBs Asset Management System (the process) all of which contributes to the process of prioritising capital works and development of the Capital Works Program. Questions that have informed the decision making in this area included:

7.2
Background
Local government assets deliver infrastructure and services to the community. It is critical that the construction and operation of these assets are managed effectively to ensure services are delivered and community needs are met. Therefore, effectively managing assests is an issue for all local governments, and is not isolated to CoGB. CoGB has an asset portfolio valued at more than $1.2 billion. The Capital Works Program will come under increasing pressure in the future due to population growth and changing demographics. The problem of ageing assets in need of renewal will also be a significant contributor to the Capital Works Program. Intelligence gathering, forecasting, planning and prioritisation for this key challenge over the short and long term future will be paramount. The current CoGB Council Plan 2009-2013 recognises that long term infrastructure planning is an emerging issue for CoGB: Maintaining capital assets and meeting community needs for new assets is a key role for local government. The renewal of assets requires a sound understanding of the condition of all assets and a program of renewal when required. The communitys need for new assets requires an anlayis of need through understanding of population growth and changing needs. To meet these requirements, a plan which outlines funding for capital works is necessary. The CoGB has a five year capital works plan however, a 10 year financial plan is being developed which will include a capital works program in greater detail than currently exists, alongside operating projections. The Capital Works Program and associated Budget outlines the prioritisation of projects and stems from the development of the Council Corporate Plan. This overarching document in conjunction with various Strategies, particularly the Asset
Prioritisation of capital and major works- are works being prioritised in a robust and transparent manner? Budgeting process is current expenditure clear and are budgeting processes robust? Ongoing performance is performance of capital and major works projects reviewed? Asset mix how does CoGB consider the spend mix between new assets and repair/replacement of existing assets? Likewise, how are decisions made about expenditure in the CBD vs. regional areas?
7.3
Asset management framework
Council Plan
The overarching document and policy base is the Council Plan. It is the Council Plan that will set the tone for the development of the Asset Management suite of documents. Currently the 2013-2017 Council Plan is in draft format. This Plan outlines the key capital works and major projects planned for the next four years.
At present two main themes are described in the draft 2013-2017 Council Plan:
greater emphasis needs to be placed on alignment with adopted Strategies and Plans to support Business Case development for capital works and critically prioritisation by Council.
(i) a strong undertaking to complete detailed planning in important areas including transport, residential and economic development in preparation for the continued increase in population. (ii) the need for consolidation and concentration on asset maintenance, following a period where there have been a number of major new initiatives. A priority on completion of previously agreed priorities and maintenance if existing essential infrastructure, is paramount in the next period.
Finding: Although an Asset Management Steering Committee was formed at CoGB as a result of the previous policy, the committee was relatively inactive. In the new draft policy, the responsibilities of this committee are clearly defined and it is intended that the activities of the committee will increase to improve the development and implementation of asset management and thus prioritisation of capital works. The draft Asset Management Policy has been drafted in accordance with the International Infrastructure Management Manual (IIMM) 2011 and the National Asset Management Assessment Framework 2009.
Asset Management Policy

CoGB has an adopted Asset Management Policy which defines the Councils Vision and service delivery objectives for asset management. A draft Asset Management Policy is in preparation to reflect the upcoming completion of the 2013-2017 Council Plan. It outlines the proposed structure of Asset Management for CoGB and also outlines a framework for the sustainable management and care of CoGBs infrastructure assets. The draft Asset Management Policy has been prepared by the recently appointed Coordinator Strategic Asset Management. This appointment will provide a coordinated approach to Asset Management throughout the organisational structure of CoGB. There is currently a degree of a silo approach and asset management is not fully integrated across all asset types. Whilst the Asset Management Policy does not directly articulate any specifics regarding the prioritisation of Capital Works, it does discuss that the priorities will be based on the National Asset Management Assessment Framework and that CoGB should consider the:

Conclusion: On completion and implementation of the draft Asset Management Policy will be approaching current best practice.
Recommendation: Finalise the Asset Management Policy and form an active Asset Management Steering Committee to monitor progress.
Asset Management Strategy

An Asset Management Strategy should be a high level document that guides the overall asset management activities within an organisation. Being a strategy it is meant to explore long term issues and link the overall plan to key "strategic" issues of the organisation. The Asset Management Strategy should take at least a 20 year view. CoGB has adopted an Asset Management Strategy that guides the overall asset management activities within the organisation. It is a strategy for the implementation and documentation of asset management practices, plans, processes & procedures across the organisation. The current Asset Management Strategy (July 2011) details a series of actions based on the outcomes of the National Asset Management Assessment Framework (NAMAF) which is a nationally consistent asset management maturity assessment. The assessment conducted in July 2011 indicated a relatively low score for the maturity of the CoGBs Asset Management Strategy, Asset Management Plans and 56 Evaluation Framework .
Technical Financial Social Environmental Financial risk sustainability Community needs and benefits Fitness for purpose Future demands Lifecycle costs Any other impacts associated with the projects
It also discusses that the Asset Management Plans will be used to assist in determining the priorities for operational and maintenance expenditure, together with renewal, upgrade and new works in the capital works program. Asset Management is a multi-discipline function involving coordination between those that plan services, provide services, manage assets and manage financial functions. To ensure asset management is truly coordinated across the organisation, an Asset Management Steering Committee is required.
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Evaluation Framework refers to having a documented evaluation process by which asset management improvements are identified, timeframes established, resources allocated, actioned, monitored and reported to the Executive Management Team and/or CEO.
Asset Management Plans CGB should assess capital programs within a transparent and reported evaluation model based on the Public Accounts and Estimate Committee recommendations of 2012.
Submission to the Independent Review Committee Conclusion: Improvement in the process followed to prioritise and evaluate asset management works is required. Observation: Discussions with relevant CoGB staff indicated that improvement of these areas remains a work in progress. For example, the evaluation of asset management works and the prioritisation of these works were observed to be difficult to follow. Anecdotal evidence provided during discussions indicated that the reasons why some projects were prioritised ahead of others was unclear and should be made more transparent through the use of amended templates. Asset Management Plans describe the outcomes (and timing) that result in meeting key objectives. The detailed plans will include operational plans with medium term timeframes (e.g. Four Year plans). These should link back to the Asset Management Strategy. An Asset Management Plan is a plan developed for the management of one or more infrastructure asset classes with a view to operating, maintaining and renewing the assets within the class in the most cost effective manner possible, whilst providing a specific level of service. These plans should define levels of service within financial resource - risk constraints and establish the targets and measures that will be used for monitoring progress of implementation. It is these documents that will primarily set the priorities for Capital Works.
Recommendation: Create a formal asset management and infrastructure project ranking and evaluation framework.
Finding: CoGB has not completed Asset Management Plans for all asset classes. The Buildings Asset Management Plan (February 2013) is the most current and developed plan. The following primary Asset Management Plans are identified for development:

An independent Asset Management Maturity Assessment, following on from the July 2011 assessment, would provide CoGB with detailed information and advice to make a significant step change improvement. Many of the Asset Management practice areas would be assessed at both the organisation and asset class level, and the outcomes - recommendations would not only address the entire system but also the tools (including technology), processes and procedures.
Roads sealed - unsealed roads, footpaths, kerb and channel, street furniture, urban street trees Bridges and major culverts Drainage systems, flood levees and pump systems Parks and recreation facilities
The following secondary Asset Management Plans are also identified for development:

Finding: A draft Asset Management Strategy for 2013-2017 is currently being prepared. It addresses the NAMAF assessment conducted July 2011 and further identifies improvement opportunities. A summary action plan is included, which if implemented promptly, will meet CoGBs objective to achieve 80% Core Maturity for each of the NAMAF elements by December 2013 (Core maturity comprises the minimum asset management requirements for Council as custodian of community assets).
Waste disposal and resource recovery systems Plant and fleet Office systems and furniture
Conclusion: Once the plans are completed, the targets and measures identified in these plans can be monitored to determine progress of implementation. It is these documents that will primarily set the priorities for Capital Works.
Conclusion: CoGB is currently completing works to finalise an Asset Management Strategy. Implementation of, and adherence to, this strategy will see significant improvements in how the organisation manages its assets.
Recommendation: Finalise the Asset Management Strategy and implement action plan items to achieve 80% Core Maturity.
Whilst the gaol theatre may be a great and unplanned council asset, why was there money available for it whilst our roads remained unsealed as they have been since before amalgamation. So, the criteria for priority does seem to be unclear.
Recommendation: Finalise Asset Management Plans for the following assets:

Roads sealed/unsealed roads, footpaths, kerb and channel, street furniture, urban street trees Bridges and major culverts Drainage systems, flood levees and pump systems Parks and recreation facilities Waste disposal and resource recovery systems Plant and fleet Office systems and furniture
7.4
Prioritising capital works
Capital Works Evaluation Framework

A Capital Works Evaluation Framework (CWEF) is a system used to assist in prioritising projects for consideration within an organisation's Capital Works Program. The Local Government Asset Investment Guidelines provide councils with guidance on prioritising capital works. Currently, CoGB use a specific Project Rating System for 58 Transportation and Drainage Programs for the production of the entire Capital Works Program at CoGB. That is, this rating system is used, regardless of the asset type.
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Many councils have well developed Asset Management Plans entrenched in their overall asset management framework and over time would develop more individual plans as their asset management maturity improves. For example, Street Furniture would eventually standalone from Roads and Parking Meters and Ticket Machines may eventually standalone from Street Furniture. Some councils have created their suite of Asset Management Plans as web-based documents. Web-based Asset Management Plans have a number of advantages over a Microsoft Word Document or PDF based version:

Observation: Although this system appears appropriate for civil infrastructure, CoGB would benefit from reviewing the criteria and undertaking a possible upgrade of this approach. For instance, the need for capital works projects should be assessed through community engagement and Councillor/staff input. There is currently confusion and frustration from some community members, Councillors and staff regarding this process and its transparency. It should also be noted that grant funding can also influence the prioritisation process. For example, the Gaol Theatre development was reprioritised based on grant funding made available.
Multiple people are able to edit parts of the plans simultaneously; The most up-to-date version of the plan is instantly available to everyone; It is easy to get public and agency input about the plans as they are being developed; and It makes searching for information in the plan much easier.
A Long Term Financial Plan should be linked to the Council Plan and Asset Management Strategy and Asset Management Plans. This Financial Plan is a key instrument of accountability and financial sustainability and projects CoGBs proposed activities over a ten year timeframe.
Conclusion: Currently, as CoGBs Asset Management Plans have not been fully developed, the Council Plan and the Long Term Financial Plan are not likely to be fully informed. Completion of the Asset Management Plans and inclusion of this information into the Long Term Financial Plan will provide staff and Councillors with information to better determine what will be funded in the Budget. Councillors need to set criteria for appraisal of investment proposals within the context of community priorities. As indicated previously, the evaluation process has been identified as an area for improvement.
Finding: CoGB currently do not have an overarching CWEF that consolidates the approach to evaluation and prioritisation of capital works. Preparation of such a document would assist both Councillors and CoGB staff to apply a consistent approach to prioritisation, by considering:

Demonstrated need and asset function through consultation Level of service and community benefits Grant funding Overall community value of asset ownership Risk assessments and statutory obligations
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Local Government Asset Investment Guidelines, Local Government Victoria, August 2006 58 City of Greater Bendigo Project Rating System for Transportation and Drainage Programs, April 2009
Planning for Eaglehawk Open Space Master Plan implementation yet Theatre Project given priority in last budget. Again this year unbudgeted amount of $1.4million being considered on a project Council said it will spend $3million which takes the total to $4.4million. Additional expenditure on capital works have a dramatic effect on other smaller projects as there is little money left for works in the suburbs.
Conclusion: Evaluation criteria are currently not well defined and are specific to Transportation and Drainage Systems only.
Recommendation: Investigate the implementation of a new Asset Management System.
7.6
Cost estimates and project budgets
7.5
Data and systems
Information and data regarding the asset management portfolio is essential for the prioritisation of capital works. The NAMAF assessment conducted in July 2011 identified that the data and systems element was approaching the 80% Core Asset Management Maturity. Asset surveillance - inspections are continually undertaken in a programmed manner for civil infrastructure assets and this level of asset data has been collected for over 10 years. CoGBs current Asset Management System is currently used for the following:

Of particular importance to the prioritising of capital works is the cost of individual projects. At CoGB, the process followed is that on identification of a potential maintenance, renewal or capital works project, the project is logged through a CoGB designed MS Access Database. From this initial data entry, assessment of specified evaluation criteria is undertaken. Following the initial inspection, the project is scoped, risks assessed and a preliminary budget estimate prepared based on a concept design. Prior to the preparation of the Capital Works Budget, the higher risk projects (where an accurate cost is not obtainable without detailed design) are accurately surveyed and designed so that an accurate cost estimate can be prepared based on the designed quantities and unit rates. To crosscheck and verify the accuracy of this engineer prepared schedule of quantities, the quantities are provided to BenCon which develops construction estimates. Discussions between the engineer and estimator then determine the accuracy of the cost estimate. Through this process the Capital Works Budget is determined.
Asset register Conditions Valuations Inspections Defects Works
All major assets are mapped in CoGBs Geographic Information System (GIS), and fully integrated with the Asset Management System. The system is also integrated with CoGBs finance system for building maintenance works, including purchase orders, contractor and actual costs.
Observation: Discussions with relevant staff regarding this process have indicated that although the process of developing individual project budgets for civil infrastructure projects is not as well documented as it could be, the actual process undertaken by staff is robust.
Observation: The Asset Management System is not linked with CoGBs customer request management system. The current Asset Management System is age and condition based and takes no account of other asset criteria. Although the current system appears to be effective, a complete asset management system for the entire asset portfolio would assist with the robust prioritisation of projects based on asset condition, age, risk, criticality and funding availability. This work prioritisation could then be seamlessly transferred into finance systems for budgeting, costing and project management purposes.
For works being undertaken, cost estimates are compared to actual costs and the variance is tracked on a monthly basis.
Finding: In recent years the variance in budgeted costs to actual costs has been continually trending down, indicating that the designs and associated estimates are becoming very accurate.
Conclusion: While the budgeting process used for Capital Works appears robust, it should be documented to increase transparency and consistency. Conclusion: CoGB may realise benefits by updating the Asset Management System so that is links to the customer request system (Pathways) and covers the entire management portfolio.
Recommendation: Formalise and document the process used to develop individual project budgets for Capital Works. Readers are referred to Section 6 for more financial analysis on asset management in general and to the Case Studies presented on the Edward Street Carpark (page 98 and CoGB office consolidation (page 106). Numerous submitters to the Independent Review Committee indicated that they were unsure or unhappy with the prioritisation process for capital and major works undertaken by CoGB. To this end, recommendations are provided to improve this process by developing a formal priorisation process, whilst recognising that priorities can change due to external pressures such as grants. In addition, various submitters indicated that they were unclear of the decision making process of CoGB, particularly regarding asset renewals and upgrades. Examples of this include submitters questioning the renewal of assets in the CBD when assests in regional towns required upgrading. The following outlines the current process of documentation and decision making for such decisions at CoGB.
CoGB business case completion or matter for decision template Aurecon notes that CoGB has a Business Case template document which in accordance with CoGB Business Case Completion Guide January 2012, is to be completed for New CapEx submissions. CoGBs Budget Policy for Major Capital Works document also states that all major capital project submissions must have a supporting business case. The term New CapEx is not defined in either document, however the Budget Policy for Major Capital Works (CoGB Contract and Project Coordination Unit, September 2012) document states: This policy relates to all budget proposals for all major capital projects (single projects not programs) with a value of $3 million or more. This includes proposals for: New projects Additional funding for the next stage of existing projects Renewals and Upgrades to existing building, facilities and infrastructure.
However, there is some confusion between the above documents as to the circumstances in which projects, and indeed other procurements, require a business case to be completed. From reading the documents, it is understood by Aurecon that business cases used in the budgeting process for New Capital Works are not required for the following procurements: New capital works introduced directly by Councillors after the close of the bid submission deadline. Staff will undertake as much scoping work as practical on these items but there is usually insufficient time for a business case document to be completed before a decision is made on the draft budget. Asset renewals or upgrades which fall within relevant CoGB Asset Management Plans or where there is an asset condition assessment, resulting in the need for expenditure on that asset (e.g. Road reseals and asphalt resurfacing) Professional services which are included in the operational budgeting process. Professional services (if required for a capital project) are generally included in the business case for a new capital project and are identified in the original project scope (for example architect or design services for the Library project) Urgent services/ reactive maintenance works.
While CoGBs Procurement Policy (CoGB Procurement Policy, May 2012) clearly outlines its application, it does not refer or dovetail with the business case requirements.
Finding: CoGB does not have policy, procedure or templates in place to standardise the decision making process for investment decisions around new capital works, or items that fall under operational expenditure (including service provision, upgrades/renewals, direct requests from Council and asset maintenance). While these procurements are supposed to align and occur with the relevant asset management plans, it is not clear that is in fact occurs.
Conclusion: There is confusion in the community as seen from a number of submissions to the Independent Review Committee regarding the prioritisation of capital and major works and the decision making process followed by CoGB and Council.
Bendigo Airport Bendigo Airport is located in East Bendigo VIC approximately 4km from CBD. It is a registered airport owned and operated by CoGB. Current infrastructure on site includes a small business park and 19 hangars. Organisations such as Bendigo Aviation Services (charter and training), Bendigo Flying Club, Goulding Airmotive, Air Ambulance Victoria Helicopter Emergency Medical Services and part of the Department of Sustainability and Environment fire fighting operation operate from the Airport. Council has identified the airport redevelopment as a priority economic development initiative, which has been reinforced in the Loddon Mallee (Southern) Regional Strategic Plan. The proposed development includes the design and development of a parallel runway; and an updated layout, design and development of the Business Park. Councillors have endorsed the construction of a new 1,600 metre long, 30 metre wide runway and associated taxiways to cater for Code 3C aircraft operations (Dash 8 Q400 capable). For the purposes of the new runway length determination, the aircraft manufacturers aircraft performance charts were analysed to determine the critical (worst case) take off conditions. Based on these inputs (worst case), the critical aircraft is the Q400 which theoretically requires 1,355m minimum runway length for take-off at Maximum Take Off Weight. Therefore, providing a factor of safety to account for worse case individual aircraft operating procedures and performance, a minimum runway length for Code 3C of 1,600m may be necessary. The critical (worst case) conditions assumed for the runway length assessment (high temperatures, wet runway condition, large aircraft weights etc) are likely to occur infrequently. In such instances aircraft operators may need to reduce their payloads or vary their operating procedures to safely operate on a less than optimal runway length for a particular aircraft as required. With a runway length of 1,600m however, the potential operational restrictions on aircraft operators in the medium to long term will be minimal. CoGB has also attracted commitment for the Victorian Government for $5 million in funding for the development (approximately one third of the cost) and is currently seeking to attract a $5 million commitment from the Federal Government. Without this funding the project is unlikely to proceed in its current form. An application to Regional Development Victoria for collaborative funding for the business park is also being prepared. Once a planning scheme amendment is granted, and assuming State and Federal funding is approved, works will be staged over an 18 month period.
Recommendations: Create a standardised Matter for Decision template for investment and business case proposals (capital works, operational expenditure, service provision, upgrades/renewals, direct requests from Council and asset maintenance) to be applied across all Directorates. The Matter for Decision template must include:

Information on the project, the need and purpose, and budget implications The outcome for and benefit to the community Clearly link the expense to the Asset Management Register (if appropriate) A clear link between the Councils Vision, strategy, Plan and the project A monetary and risk threshold and decision making process to define the extent and depth of the business case and reporting required, and level of approval (similar to a procurement policy).
Mandate the completion of business cases to investment grade for all major investment projects.
The Airport development is currently still in the planning stages, however a number of potential issues identified by Aurecon include: Financial impacts: This is a significant piece of work and will cost in the order of $15 million over a period of 18 months (of which $5 million will need to be sourced from CoGB itself). This will need to be provided for in the budget. If funded from existing monetary assets, other capital works projects may need to be delayed, or re-scoped to fit within available budget. If funds are to be sourced from external parties (i.e. loans), then CoGB would have to factor this ongoing debt into its long term financial forecasts. CoGBs role as a region leader. This development is likely to place Bendigo Airport as a hub for air travel and aviation industry for North Central Victoria. Stakeholder engagement: A number of submissions to the IRC indicated that current users of the Airport were concerned that the upgrade would increase usage fees. CoGB must engage with these stakeholders to manage their concerns and to encourage strong, ongoing relationships.
7.7
Conclusion
Investigations have indicated that CoGB has begun significant works to improve and better document Asset Management across the organisation. An Asset Management Policy, Strategy and associated Plans for individual asset types are currently in preparation and should be completed as a matter of priority. The primary concern raised in submissions from the community and some Councillors is that the prioritisation and decision making process for expenditure on some new works, asset renewal and upgrades, urgent works and professional services spend (i.e. expenditure generally included in the operating budget) could be better managed and more transparent. Recommendations regarding the development of a formal asset management and infrastructure project ranking and evaluation framework, a matter for decision template and documented budgeting process will increase this transparency and increase community confidence in the area of prioritising Capital Works.
Finding: Bendigo Airport has been earmarked as an important major project for Bendigo and the wider region and initial works have begun to investigate potential designs, funding opportunities and planning scheme amendments.
Conclusion: CoGB has attracted partial funding from the Victorian Government for this development, and must now determine how it should go about funding the outstanding portion of total project cost.
Recommendations: Develop a detailed business case for the upgrade of Bendigo Airport to determine the most cost effective funding mechanism. Engage with stakeholders impacted by the future Bendigo Airport upgrade. Mandate the completion of business cases to investment grade for all major investment projects.
Communication and community engagement
8. Communication and community engagement

Everything we do communicates something about the CoGB
2013-2017 A plan for good communications, CoGB Draft Document
8.1
Improved quality and perception of service delivery
This section outlines Aurecons investigations into communication and community engagement at CoGB. The structure of this Section is as follows: Section 8.2 Background: Brief background of the approach followed to assess communication and community engagement Section 8.3 Communication vs. engagement: A summary on the distinction between communication and engagement and how CoGB should address this Section 8.4 Documentation review: A summary of the CoGB documents identified as relating to communication or community engagement Section 8.5 Communication practices: A summary of the observed and/or documented communication practices at CoGB Section 8.6 Community engagement practices: A summary of the observed and/or documented community engagement practices at CoGB Section 8.7 Opportunities for improvement: Further recommendations for improvement to communications and community engagement.
Better long-term solutions to complex problems
Trust, respect and understanding
Active participation by staff and the community
Accelerated progress towards achieving objectives and realising vision
Figure 39 | Benefits of effective community engagement
Review of formal submissions to the IRC

25 of the 129 submissions to the Independent Review were either solely or partially related to CoGBs communication and community engagement strategies. These submissions were analysed to support the observations made throughout the Review process and to inform a number of the recommendations within this Report.
8.2
Background
Strong communication and community engagement are essential to the success of any local government organisation. In order for a council to be supported by its wider community, that community must feel it is involved in the organisations decisionmaking processes. A member of the community who is engaged by his/her council:

Engagement with CoGB Staff and Councillors

Aurecon met with a large number of CoGB staff and with all nine Councillors individually to gain an appreciation of current communication and community engagement practices within the organisation. Many commented on how these practices could be improved both internally and externally.
Feels empowered to contribute to consultation processes Is likely to have a greater understanding of the short and long-term needs of the wider community Is likely to promote the region in a positive light
Engagement with external stakeholders

Aurecon conducted informal engagement with a range of external stakeholders and community members. The engagement process targeted stakeholders that represent specific demographics within the wider community, having a direct or indirect interest in the CoGB and its operations. A full list of these stakeholders is included in Appendix A. These discussions provided Aurecon with a background to the relationship between CoGB and the external stakeholders and identified both positive existing practices and opportunities for more effective communication.
Aurecons approach to the review of CoGBs communication and engagement strategies has been based on the following: Review of formal submissions received through the Independent Review Engagement with Councillors and CoGB staff Engagement with a range of external stakeholders Review of relevant CoGB documentation Communication and community engagement encompasses all areas of CoGB. The benefits of effective communication and engagement are immense; both internally and externally, and are outlined within Figure 39.

Review of relevant CoGB documents

Aurecon reviewed a range of documents with a direct relationship to internal and external communication and community engagement. These included:

Community Engagement Guidelines and Toolkit Communications Plan
The City of Greater Bendigo will use meaningful and effective communication and engagement with all sectors of the community as an input to decision-making.
2011 Community Engagement Guidelines and Toolkit, CoGB Document
Customer Service Charter Media Policy Social Media Policy Internet Policy Staff Code of Conduct Councillors Code of Conduct Corporate Style Guide Emergency Communications Manual 2012-2013 A Plan for Good Communications (Draft)
Observation: Throughout the Review, it became evident that there is significant scope for more structured and regular feedback to senior staff from Councillors and staff within CoGB. Strong internal feedback is crucial to the continual improvement of CoGB.
8.3
Communication vs. engagement
In order to understand the observations and recommendations made relating to CoGBs communication and community engagement, it is vital to understand the concepts of communication and community engagement, and how they inter-relate.
Recommendation: Undertake an annual organisational survey of all CoGB staff and Councillors to track and benchmark the level and quality of internal and external communication and community engagement.
Communication
Communication is the exchange of information with an aim to create a shared understanding. Good communication, both internally and externally, is crucial to the success of CoGB. Fundamentally, good communication demonstrated by Councillors and staff will ensure that governance is transparent and accountable, high levels of trust are established and the best outcomes for the wider community can be achieved. Communication is not just conversations. It involves mannerisms, body language and individuals reactions and responses to various situations, including complaints and criticisms. Figure 40 demonstrates the influences of CoGBs communication, both internally and externally.
Community engagement
As outlined within CoGBs Community Engagement Guidelines and Toolkit, community engagement involves a range of activities that allows community members to be informed of Council activities, to be involved with Council in improving the community and to have citizens providing input to Council on local issues. Community engagement may include one or more of the approaches outlined within Figure 41.
Informal Discussions
Targeted Stakeholder Contact
Group Meetings and Discussions
Formal Consultation
Council Support
Internal
Conduct of Councillors and staff Healthy professional relationships Trust between teams and Directorates Staff retention and engagement levels Clear and understood communication channels Constructive feedback
External
Perceived quality of services Perceived value for money Perceived leadership and decisionmaking ability Open and Accountable Positive media coverage Positive resident experiences
Figure 41 | Components of community engagement
Generally, a more informed community is a more engaged community. However, engagement is not merely the act of communicating a plan or action to a community. True community engagement occurs when a council is prepared to consider or implement, as a result of that engagement, a solution that may be different to the one it wanted or expected.
Figure 40 | Influences of internal and external communication
Observation: Discussions with internal and external stakeholders indicated that, for CoGB, engagement can often been seen by the community as an obligatory process rather than a way to truly engage with individuals or interested groups. For example, submissions to Aurecon and the IRC have indicated that for some individuals or groups, mediation and consultation on planning issues can, seem rigid and the outcome already determined.
Community engagement does not necessarily mean that the community, or a minority within it, gets its own way. The outcomes of community engagement must be collaborative and best-for-community, maximising long-term benefit to the municipality. A prime example of this is the Independent Review itself. The idea of a Review was put to the Mayor in August 2010 by an individual and discussed at a Governance Meeting, however was not supported. In November 2011 a petition was submitted to Council signed by 25 individuals in the Bendigo community. In January 2012 this was put to Council and again not supported. It was not until after the most recent Council election, where a number of individuals elected to Council ran on the platform of a review, that the Independent Review was 59 supported and a motion passed in favour in December 2012 . It could be said that it was not until the Review was supported by a large number of individuals in the community that it was deemed necessary to occur.
8.4
Documentation review
CoGB has developed a number of documents to assist in the development, implementation and review of communication and community engagement practices.
Community Engagement Guidelines and Toolkit

The Community Engagement Guidelines and Toolkit document, developed by CoGB in 2011, gives an introduction to what community engagement is, why it is important and the different types of engagement that can assist CoGB in generating better longterm solutions for the community. The document outlines the situations where community engagement is required and the appropriate levels and forms of engagement that may be applied to particular scenarios. The Community Engagement Framework outlines the three phases of CoGBs approach to community engagement (see Section 8.6 for further details).
Approaches to engagement
Community engagement is a complex and often time-consuming process. Difference of opinion should not be seen as a hindrance to community engagement, rather an opportunity for innovative solutions that can encourage community pride and ownership. In order to understand these differences in opinion and to extract meaningful information from constituents, councils employ a number of approaches to community engagement, each with a varying level of community participation. Figure 42 outlines these approaches, as developed by the International Association for Public Participation (IAP2).
Observation: The processes outlined within the Community Engagement Guidelines and Toolkit are appropriate. However, anecdotal evidence suggests that these processes are often not implemented throughout the organisation due to a general lack of awareness by Councillors and staff that this process has been developed, is documented and is available for use.
The way the City of Greater Bendigo communicates has undergone significant cultural change over the past year with the creation of a new Communications and Media Team within the Chief Executives Office.
Submission to the Independent Review
Inform
Consult
Involve
Collaborate
Empower
Recommendation: Implement training for use of the Community Engagement Guidelines and Toolkit by Councillors and senior staff to understand appropriate methods of engagement for various scenarios and the format and desired outcomes of these methods. A review of current engagement practices could inform such training by identifying particular areas of strength and/or weakness.
Communicate information to stakeholders
Seek the opinion of stakeholders
Stakeholders participate in decisionmaking and action
Stakeholders share decisionmaking
Support and empower stakeholders to implement their own actions
Communications Plan
Developed in accordance with the Council Plan, the CoGB Communications Plan 2013-14 outlines:

Low Community Participation
High Community Participation
Figure 42 | Community - Stakeholder Engagement Spectrum (representation of the Public Participation Spectrum developed by IAP2, discussed within the CoGB Community Engagement Guidelines and Toolkit)
The goals and responsibilities of the Communications and Media Team The individual roles and responsibilities of team members Recent achievements of the Communications and Media Team The actions and initiatives that will be delivered by the Communications Team over the next Financial Year Specific CoGB projects requiring communications support during the next Financial Year
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City of Greater Bendigo Independent External Public Review Discussion Paper, January 2013
A Plan for Good Communications (Draft) Simple, consistent and repetitive messaging is important if we are to ensure our community understands WHAT WE DO and WHY WE DO IT.
2013-2017 A Plan for Good Communications, CoGB Draft Document This plan was developed in response to reports that internal and external communication was not as effective or as structured as it could be. This document is a useful internal tool that assists Councillors and CoGB staff in:

Recent changes have seen the external communications and media requirements of each Directorate allocated to a specific member of the Communications and Media Team. This approach provides several benefits to CoGB, including:

Understanding the importance of good communication, both internally and externally Relating his/her values to his/her conduct and communication Managing his/her own communication to mitigate CoGBs reputational risks
A better understanding of business areas by the Communications and Media Team More positive communications and media opportunities A more collaborative and proactive approach to identifying and responding to issues
The draft document outlines current community perceptions of CoGBs communications, based on residents satisfaction levels and includes key messages and themes to be delivered within CoGBs communications. It also provides indicative advertising and marketing advice, including indicative budgets, for CoGB projects of various sizes.
Within A Plan for Good Communications 2013-2017, the Communications and Media Team has developed a series of key messages to assist CoGB to maintain appropriate content for the audience and a high level of consistency within all communications. These key messages relate to the themes within the 2013-2017 Council Plan and will be used as a basis for quotes and statements within external communications and media.
8.5
Communication practices
Planning for growth Liveability Productivity Sustainability Good governance and decision making
Figure 44 | Themes from Council Plan 2014-2017
As indicated within A Plan for Good Communications 2013-2017, CoGB aims for all communications to be timely, relevant, accurate, and simple and in plain English. The internal documentation develops a framework and provides staff and Councillors with the appropriate tools to assist them in being effective communicators, internally and externally. CoGB recognises that good communication is essential for the achievement of its strategic objectives. To support good communication with the community and between each other, CoGB staff and Councillors are guided by a set of values, illustrated within Figure 43.
CoGB Staff
Aspiring to quality and achievement in everything they do by: Embracing challenges Encouraging and respecting each other Nurturing creativity and diversity to make a difference to the community
CoGB Councillors
Achieve it's vision by working with the community and business Displaying leadership in its decision making Operating in an open manner Basing decisions on sound information
Public opinion is an excellent indicator of the status of communications at CoGB. CoGBs Overall Performance Index Score in the latest resident satisfaction surveys, 63 out of 100, is somewhat higher than the state average of 60. However, looking at specific areas relevant to communication can assist CoGB in better understanding the publics perception. A summary of resident satisfaction levels is illustrated within Table 23.
Category Customer Service CoGB Score 75 54 57 57 Regional Centres Average Score 73 54 57 56 Victorian Average Score 71 53 57 55
Figure 43 | Guiding values for CoGB staff and Councillors to support good communication
Council Direction Consultation Advocacy
The guiding values need to be applied to communication with all CoGBs stakeholders; from youth to the elderly, businesses to media, and tourists to State and Federal Government representatives.
Table 23 | Community satisfaction survey results, May-June 2012
We always attempt to engage with the community in innovative and interesting ways in order to capture as much information as possible.
Finding: These survey results indicate that CoGB performs somewhat favourably, when compared to other Victorian councils, in terms of customer service and advocacy. In terms of Consultation and Council Direction, CoGB performed comparably with other Victorian councils.
Community Engagement Policy Community Engagement Guidelines Community Engagement Toolkit Greater Bendigo Community Plan - Vision
Conclusion: It is important to recognise that, although CoGB may perform well in some areas of communication, this is only a comparison with other Victorian councils. Current results indicate that there is significant room for improvement across all areas. CoGB should be actively seeking opportunities for improvement, regardless of the perceived performance of other councils.
District Planning Process Communication and Media Policy Customer Service Strategy
Figure 45 | Tools to assist CoGB Councillors and staff in the implementation of community engagement
The form of community engagement that is adopted by CoGB depends on the issue being addressed or the sector of the community affected. Engagement may be: Recommendation: Set long term aspirational goals for the Community Satisfaction Survey outcomes, execute appropriate plans and track progress annually. These goals should relate to organisational best practice.

8.6
Community engagement practices
Community engagement at CoGB

As outlined within the Community Engagement Guidelines and Toolkit, community engagement at CoGB is guided by 8 principles:
1. 2. 3. 4. 5. 6. 7. 8.
Political Partnership District Planning Community Involvement Consultation Information provision Complaints Day-to-Day
The applicable form guides the level of engagement adopted by CoGB and the tools used to assist in implementing the community engagement.
Existing practices
The Strategy Unit, which sits under the Planning & Development Directorate, has prepared the Community Engagement Policy which guides all community engagement processes and practices within CoGB. This policy is aligned with the IAP2 Community - Stakeholder Engagement Spectrum. The Unit is also integral to the development of:

Sincere Intent an up-front approach to the influence the community may have on a decision Focus supported by a Community Engagement Plan Inclusiveness, accessibility and diversity seeking diverse and representative perspectives to account for the demographics of the community Provision of information and feedback information that is concise, meaningful and comprehendible Timing to allow the views of the community to inform decisions Responsiveness and transparency to gain the trust of the community and to enforce the value of his/her contributions Evaluation to assess whether or not the objectives of the engagement have been achieved Resourcing to build confidence in the community that engagement is taken seriously, is well-supported and effective
Community engagement training for applicable staff Community and stakeholder engagement strategies Further policies relating to community engagement Observation: The Manager of Strategy also takes on the nominal responsibility of being the Manager of Community Engagement at CoGB. Staff within the organisation indicated during discussions that this causes confusion as this role and associated responsibilities are not clearly defined or communicated.
To support the practice of these principles, CoGBs Community Engagement Framework, has been developed with consideration to the following:
Conclusion: Coordination and outcomes of CoGBs community engagement activities could be improved through the centralisation of community engagement activities within the Communications and Media Team. Readers are referred to Section 1.7.
Town Walks Interactive Audience Response Online Surveys Listening Posts Design Charettes Industry Forums
Outlined within the Community Engagement Framework, community engagement at CoGB is implemented using a three-phase approach. This is illustrated in Figure 46.
Phase I
Planning the community engagement
Phase II
Designing and implementing the Engagement Plan
Phase III
Reporting and Evaluation
Figure 47 | Examples of community engagement techniques employed by CoGB
'community engagement' does not mean taking a few notes and allowing a steering committee of internal officers to override. Here's a simple step-by-step process: 1. actively seek and achieve input, 2. listen, 3. act on our behalf.
Objectives, information gathering, preparation selection of engagement level
Techniques / methods, approval, action
Collate and analyse response, provide feedback, report
Observation: Anecdotal evidence from CoGB Councillors and staff, presented throughout this Review, has indicated that some members of CoGB become concerned with the low attendance level of community engagement sessions.
Figure 46 | Staff, CoGBs three-phase approach to community engagement
It is important to recognise that more engagement does not necessarily mean better outcomes for the wider community. The value is in the quality of the engagement and using appropriate methods to extract the best information from the community and stakeholders. It is critical that a balance between what is the appropriate mechanism for engagement and what the level of engagement or attendance means is achieved during the engagement process. If the engagement method that has been selected is appropriate for the purpose, a low level of attendance or participation may in fact indicate that the majority of the residents and stakeholders affected by the specific policy or decision are comfortable with the actions being taken by CoGB. CoGB has employed a number of engagement techniques to involve the community in the decision making process, including those outlined within Figure 47.
Recommendation: Develop a tool (e.g. a checklist) to assist CoGB staff to determine the appropriate level of communication and engagement of stakeholders and community for future projects.
Strategy development- a motion was passed at Council last year to have a timetable for strategy engagement during 2013. Yet to be seen and important strategies on Waste, Heritage, Transport, Residential, Health & Well Being, Economic, Animal Welfare are all being developed at the same time. Reviews on Child Care, Age Care Services, Council Plan, Council Budget, Rosalind Park Master Plan also being considered. If Councillors do not know the timetable, how can the general community know?
8.7
Opportunities for improvement
Centralisation
In late 2011, a Communications and Media Team was formed within Executive Services, in late 2011. The existing structure of the Communications and Media Team is outlined within Figure 49.
CoGBs Reputation
Good communication at CoGB is dependent on the conduct of all Councillors and staff. As outlined within A Plan for Good Communications 2013-2017, the drivers for improved communication at CoGB need to be:
Prinipal Communications Advisor
Communication of the brand Employees as ambassadors Councillor support Communication with the media Communication with all stakeholders
Figure 48 | Drivers for improved communication at CoGB Figure 49 | Existing Communications and Media Team structure
Communications Officer
Media and Communications Specialist
Communications and Media Officer
Online Communications Officer
The responsibilities of the Team include:

To uphold high communication standards and to protect the reputation of CoGB, the following risks must be mitigated:

Non-compliance with CoGBs Media Policy, Social Media Policy and Codes of Conduct Councillors and staff sending mixed messages to the community through their behaviour and/or statements Public Councillor criticism of the quality of advice from staff Public staff criticism of Council decisions Breaches of confidentiality, particularly leaking of information to the media Inadequacy of information provided to the public Inadequacy of consultation and/or engagement with the community Release or publication of inaccurate information Inconsistency of message Observation: On occasions, some units within CoGB do not coordinate project promotion or communication using the appropriate channels, bypassing the Communications and Media Team and presenting a significant risk to CoGBs reputation.
Media relations and responding to media enquiries Development of communications plans across CoGB Public relations and speech writing Online communications Development of corporate and community publications Document design for CoGB Corporate marketing Advertising Internal communications
The formation of the Communications and Media Team has instigated a number of positive developments in communication at CoGB, including:
More strategic, service-orientated approach to communications
Account management client approach Alignment with CoGB's strategic objectives through development of a Communications Plan Development and integration of social media
Recommendation: Formalise and mandate a Communications Policy so media releases are reviewed by the Communications and Media Team prior to release.
Figure 50 | Recent improvements in communication at CoGB
Despite these positive developments, some inefficiencies relating to the existing decentralised arrangements still exist. This is particularly pertinent to CoGBs advertising/media expenditure, graphic design and community engagement.
External stakeholder relationships with CoGB

Throughout the Review, many external stakeholders referred to their relationship with CoGB as being very strong, both historically and at present. Stakeholders regularly referred to CoGB staff as being accessible, professional and positive.
Observations: External communications, including advertisements, are often underbudgeted by the responsible unit as a result of a lack of understanding and appreciation of the associated costs CoGBs buying power, when negotiating rates for advertising, is often diminished due to the decentralised approach and the resultant small account size. In addition, the right product may not always be purchased due to inexperience in negotiating media Graphic design is currently outsourced which results in difficulty in monitoring and coordinating graphic design expenditure, inconsistent design outcomes and greater costs to CoGB due to expenses incurred during editing. Individual units are currently responsible for the coordination of their own community engagement activities, often without support from appropriately skilled staff Observation: Business-related stakeholders referred to the value of the strategic round table discussions that are held between Council and business stakeholders and some recommended that these should be held more regularly to encourage regular discussion and alignment with strategic objectives.
Recommendation: Facilitate strategic roundtable discussions with key stakeholders on a regular basis.
The relationship between the business sector and the Economic Development Unit (EDU) was also considered to be healthy. The Network Booklet was referred as an example of CoGBs collaboration with the Bendigo Business Council (BBC). Other examples of collaboration and strong partnerships with the community include:
Council decisions need to be focused on what is best for the majority and not the minority interests.
Recommendations: Centralise the advertising budget and resources within the Communications and Media Team to improve buying power and negotiating influence. Explore opportunities to use the services of an in-house graphic design resource. Explore opportunities to use the services of an in-house Community Engagement Officer resource.
Multi-Agency Liquor Task Force Safer Communities Forum Liquor Licensing Accord Healthy Together Victoria The First Quarter
CoGB is aware of the ability of louder voices within the community to distort or misrepresent public opinion and the organisation is cognisant that it must not be swayed by these voices in situations where they advocate for outcomes that may be biased and not necessarily best for the community. It has also been noted that, throughout the Review, a vocal minority have made statements to the media and/or the IRC that are misinformed or based on insufficient evidence or information. External stakeholders consistently saw the roles and responsibilities of the CoGB as bigger than the traditional three Rs of roads, rates and rubbish. Stakeholders often referenced the critical lead, facilitation or support role Council plays in the advancement of Bendigo and the greater Region in terms of education, health, arts and culture, recreation and sport, tourism and economic development.
Observation: A number of external stakeholders mentioned that communication and engagement from CoGB around events can come too late, leaving insufficient time to maximise wider economic benefit to businesses and the community.
Conclusion: Increased economic activity and engagement with the local business community could be achieved through more proactive engagement around events supported or sponsored by CoGB.
Recommendation: Establish an appropriate framework to communicate all events to local business, to provide more time for them to gear up for the opportunities associated with the event.
Observation: CoGBs myriad external stakeholders are diverse in nature and representation. During the course of the Review, Aurecon noted that no comprehensive database of these stakeholders, including key contacts, was maintained by CoGB.
Recommendation: Identify and regularly maintain a comprehensive and representative cross-section stakeholder register.
Case Studies
9. Case Study Introduction
To highlight many of the observations, findings, conclusions and recommendations outlined throughout this Report, four Case Studies are presented and explored in depth within this section. The case studies explored include: Golden Square Pool This is a relatively recent issue dealt with by CoGB and Council. The pool was marked for closure at the completion of construction of the Kangaroo Flat Indoor Aquatic Centre development but was brought forward to November 2012 due to significant reported asset upgrade costs to ensure the facility met regulated safety compliance levels. The decision by Council to close the pool resulted in significant public backlash with 1,017 signatures received requesting the pool remain open, various meetings held to save the pool and media outlets regularly reporting on the issue. After much public debate and media coverage, Council voted to lease Golden Square Pool to the Save Our Pool Group on the basis that it raises the necessary funds to upgrade the asset to a standard compliant with AS 3600-2009 by the beginning of the 2013/14 season. This Case Study explores a number of issues including aging assets and the asset renewal gap (identified in the Income and expenditure and Prioritising capital and major works sections on page 28 and 76 respectively), Governance (page 19), and Communication and community engagement (page 84). Edward Street Car Park The Edward Street car Park and Office Complex development was a $16.3 million dollar project completed and opened for operation in July 2012.The development was funded primarily through available CoGB funds and a credit financier loan. Approximately $1.5 million was provided by the State Trustees which funded the fit out of its commercial space and will be a long term tenant. This Case Study explores a number of issues including CoGBs drive to develop major infrastructure projects and its role as a driver of economic development in Bendigo (identified in the Income and expenditure and Prioritising capital and major works sections on page 28 and 76 respectively). Grace Kelly Exhibition The Grace Kelly Exhibition was held at the Bendigo Art Gallery from 11 March through 17 June, 2012. The exhibition attracted approximately 152,706 attendees and returned a profit of approximately $1,357,000. Analysis shows there was approximately $16.31 million of indirect and direct economic benefits to the Bendigo region during the 99 days the Exhibition was open. Direct expenditure in the Bendigo region was in the order of $9 million during this period. Whilst the Grace Kelly Exhibition was a success, there is still debate in the community (as seen through a number of submissions to the IRC) as to the overall benefit of such events and the funding of the arts by CoGB. This Case Study outlines a number of themes identified throughout this report including: the role of Bendigo as a Regional City and a leader for the region (see General Themes on page 11) and better transparency in reporting by CoGB which is necessary to highlight the successes of CoGB to the community (see Income and expenditure on page 28 and Quality of service delivery on page 52). CoGB Office Consolidation Currently, CoGB staff are split across a number of office buildings in the Town Hall precinct. Whilst these office buildings are relatively close to each other, reports from many staff indicate that this disaggregation causes the following gaps: leadership is weakened, efficiency is compromised, information sharing is disjointed and difficult, and staff culture is formed in silos. For the community, office disaggregation causes confusion and frustration with respect to access to Directorates and specific Business Units. Consolidation of the CoGB offices has been considered previously by CoGB staff, but has not yet become a consideration of this Council. The key drivers of such a project would be to provide a single office building to improve efficiencies and provide a strong basis for positive organisational culture and growth into the future. It is possible that without adequate communications to the community regarding these drivers, there may be some community backlash on what may be perceived as Council spending money on itself at the expense of service delivery, however, depending on the mechanisms adopted significant financial benefits may accrue from a consolidation. This Case Study outlines the reasons why office consolidation should be strongly considered. Potential funding options are also presented. This relates to many issues discussed in the Report, including Quality of service delivery (page 52), Prioritising capital and major works (page 76) and Communication and community engagement (page 84). When read in conjunction with the body of this Report, these case studies highlight lessons learnt and areas of improvement for CoGB.
10. Golden Square Pool

Bendigo: The city of pools Prior to the closure of the Golden Square Pool, the City of Greater Bendigo Council had 11 pools or aquatic leisure centres for a population of approximately 100,618 people and 6 pools within a 10 minute drive of the city centre. This is double the number compared to Ballarat or Shepparton Council areas that have populations of 93,000 and 65,000 respectively.
Golden Square Swimming Pool Decommissioning

Cost saving: Closure Date: Capital expenditure of $885,000 and operating cost saving of $40,000 - $80,000 p.a. March 2013
The Golden Square Pool is located off Maple Street in Golden Square. The nearest aquatic facilities are the Bendigo Aquatic Centre (2.8 kilometres away) and the proposed Kangaroo Flat Leisure Centre (2.9km away), which has been earmarked for a redevelopment with indoor pool facilities. The level of service provided or to be provided at both these centres is far greater than the Golden Square Swimming Pool as they also have, or will have as in the case of the planned Kangaroo Flat upgrade, indoor pools to facilitate year round swimming. The CoGB Local Government Area (LGA) has the highest number of outdoor pools per capita of all regional LGAs. However, it also has the lowest number of indoor pools to promote year round swimming in the Victorian climate. This is an example of how a portfolio of aging infrastructure arguably has an irrelevant mix of assets to cater for the changing demands of the local community. The statistics describing the per capita data and the 2011-12 population estimates, comparing CoGB to Ballarat and Shepparton LGAs are shown in the table below. LGA Population Indoor Pools Outdoor Pools Popn per Pool Popn per Indoor Pool Popn per Outdoor Pool
City of Greater Bendigo City of Ballarat Greater City of Shepparton
100,618 93,502 60,449
1 2 1
11 4 4
8,385 15,584 12,090
100,618 46,751 60,449
9,147 23,376 15,112
Table 24 | Regional comparison of per-capita pool statistics
Golden Square Pool was originally targeted for decommissioning once the planned Kangaroo Flat Aquatic Centre opened. The commercial non-viability of the Golden Square facility became apparent in 2012 when the CoGB tendered for a pool managing contractor. When the tender responses were reviewed, it became apparent to CoGB that the cost to operate the pool was much higher than expected, and was deemed financially unsustainable. In light of this and the costs associated with bringing the pool up to the required Australian Standards, the decision to close the facility was first made by Council in November 2012. By closing Golden Square Pool, it is estimated that CoGB will save $40,000 - $80,000 per year in annual operating costs and one-off capital expenditure costs of $885,000, 60 required to ensure the facilities met the Australian Standard AS 3600-2009 Concrete Structures safety compliance .
Themes
Financials, Asset Management, Capital Expenditure The ongoing issue for the CoGB is the financial liability that some of the pool assets are placing on the CoGB. CoGB would have needed to spend $40,000 - $80,000 per year 2009 Concrete Structures safety compliance.
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in annual operation costs and $885,000 to ensure Golden Square Pool met the Australian Standard AS 3600-
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City of Greater Bendigo Long Gully and Golden Square Swimming Pools Report to Council, 14 November 2012 The actual operating cost for Golden Square 08/09 was $30,705 however this was due to subsidised costs from the YMCA. 2009/2010 forecast an operating cost of approximately $80,000, source Report on public swimming pools in City of Greater Bendigo, Councillors Forum, 31 August 2009.
Service delivery Prior to closure, the facility experienced many issues as identified in a number of CoGB reports on the indoor and outdoor pool portfolio between August 2009 and November 62 2012. In addition to the financial considerations outlined, another major issue flagged was low patronage . Over the full season, only 1,800 visits were recorded (November to March). Factors contributing to the low patronage numbers were:

Lack of modern facilities there is a lack of modern leisure components which will attract users Proximity close proximity to the modern Bendigo Aquatic Centre Limited operating hours 2pm to 7pm daily during summer
Communication The decision to close the Golden Square Swimming Pool attracted much public debate and media attention as there was a trade-off of convenience and condition for local residents against an increasing cost to operate an aging asset for CoGB. An issue was that this information was not communicated adequately to the affected users and these individuals believed that the Golden Square Pool would only close once the Kangaroo Flat leisure centre was opened. One of the outcomes from the closure is the consensus that it was not managed well and the capital expenditure upgrade cost of $885,000 was not soundly based, with the affected users and community believing CoGB did not provide adequate communication and justification for the closure. This lack of stakeholder management caused many disgruntled residents to petition against the closure and use local media outlets to raise his/her concerns. During the 3-4 month period when various motions relating to Golden Square Pool were put to Council the closure of the pool was vigorously debated by Councillors and CoGB officers, with some of this becoming public, and with the media highlighting the lack of cohesion between some Councillors and CoGB staff. Governance The issues surrounding the closure of the Golden Square Pool have been tabled at a number of Council meetings since 2009. Below is a timeline of major events regarding this matter.
Independent Engineer Report prepared on Bendigo pools Cost of new facilitiies, operating costs, upgrade costs 2009
Jan 2010 Indoor Aqatic Feasibliity Study completed
Indoor Aquatic Centre at Kangaroo Flat agreed to Golden Square, Kangaroo Flat and Long Gully pools to be closed'during the timeframe for construction Dec 2010
Jan/Feb 2013 Nov 2012 Council votes to close Golden Square and Long Gully pools 1,017 signatures received to save Golden Square pool Dec 2012 Various community meetings held to discuss Golden Square pool
Council votes again to close Golden Square pool based on engineer report Decommissi oning works begin 13 Feb 2013
27 Feb 2013 Notice of Motion to lease pool to Save Our Pool Group upheld 6 March 2013
Golden Square Save Our Pool Group offers to raise funds to operate pool and complete works for 2013/14 season
Figure 51 | Golden Square Pool recent events
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Report on public swimming pools in the City of Greater Bendigo, 31 August 2009
Council voted to decommission Golden Square Pool twice. On one of these occasions, Councillors indicated that they voted to close the pool based on a recommendation from an independent engineer. Subsequent to this vote, there was confusion as to who wrote this engineers report (the engineer who attended the Council Meeting or Aquatics Australia). The Golden Square Save Our Pool Group offered to lease the pool and raise the funds for the necessary upgrades to ensure it complies with safety and other standards before the upcoming 2013-14 season begins. Cr Chapman raised a Notice of Motion to lease the pool facility to this group on 6 March 2013, which was upheld by Council. The differing views of Councillors and CoGB staff have been the subject of vigorous and public debate, at times understandably generating emotional responses.
Issues
Figure 52 | Proposed Kangaroo Flat Leisure Centre
The ongoing issue for CoGB is the financial liability that some of the pool assets are placing on CoGB. An updated report, similar to the Report on public swimming pools within CoGB completed in August 20093, is required to provide current information for the further consolidation of the CoGBs aquatic infrastructure. One asset flagged in the August 2009 review was the Long Gully Swimming Pool, now closed which burdened the CoGB with a similar operating liability of approximately $32,000 per annum with relatively few patrons. When these cost items are rationalised on a per patron level, the cost inefficiency is clearly demonstrated by the amount that CoGB subsidises each patrons visit.
Pool Bendigo Aquatic Brennan Park Kangaroo Flat Long Gully Eaglehawk LC Bendigo East Golden Square
Operating Cost $125,918 $183,173 $90,016 $32,324 $5,925 $43,934 $30,705
Annual Attendance 2008-09 57,458 22,923 3,095 2,250 N-A 24,500 4,017
Compliance Cost $0 $448,000 $1,730,000 $655,000 N-A $275,000 $885,000
Net Subsidy per Visit $2.19 $7.99 $29.08 $14.37 N-A $1.79 $17.42
The actual operating cost for Golden Square 08/09 was $30,705 however this was due to subsidised costs from the YMCA. 2009/2010 forecast an operating cost of approximately $80,000
Table 25 | Unit cost comparison 2008-2009, source Report on public swimming pools in City of Greater Bendigo, Councillors Forum, 31 August, 2009
Opportunities
Bendigo has the highest ratio of public pools per population in Victoria; however only the Eaglehawk Aquatic Centre has an indoor facility. There may be an opportunity for CoGB to consolidate and rationalise its aquatic and leisure centre assets within the Bendigo region to decrease the operating expenditure, maximise the level of service to draw more patrons and thus increase revenue and free up funding for strategic spending to upgrade other facilities. The August 2009 CoGB report recommends that there is between $5 million and $6 million required to improve current facilities at the Golden Square, Bendigo East, White Hills, Kangaroo Flat, Long Gully and Brennan Park Swimming Pools to ensure they will be able to continue operating safely and in a compliant manner. This Report should be updated using three measures to rationalise the priority aquatic infrastructure required to upgrade or decommission. These criteria are outlined below.
Ensure the net cost of existing operations is minimised All new aquatic investments have a robust business case Practice close community engagement and communication Overall infrastructure solution is relevant to the community needs
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Value for Money
Economic Optimisation
Ensure competing priorities of economies of scale, cost benefit and level of service is optimised
Social Impact
The outcome for CoGBs pool portfolio recommended the closure of both the Golden Square and Long Gully pools. Both of these assets have experienced the same aging infrastructure problems and have been highly subsidised. This asset consolidation would save over $1.5 million in compliance expenditure and in the order of $130,000 in annual operating costs.
If the purpose of an asset is to primarily provide a service to the community in line with Councils strategy then a level of subsidy may be appropriate. However, it is highly recommended that this study and the related analysis is undertaken again using current data to determine the net subsidy per visit at each pool or aquatic centre. This information will update the recommendations and provide benchmarking for the commercial analysis of other infrastructure upgrades and investments, such as the proposed $30 million 63 Kangaroo Flat Aquatic Centre. At the Council meeting in November 2012 it was decided to close both the Golden Square and Long Gully Swimming Pools. Interestingly, there was limited/no public backlash regarding the closure of the Long Gully Pool. Attendance figures reveal that during the 2008/09 season, approximately 4,017 patrons attended the Golden Square Pool, compared to only 2,250 attendees at Long Gully. In addition, an excerpt from a CoGB media release made public on 4 March 2013 indicates that engagement with the Long Gully community regarding plans to develop a splash park at Long Gully Recreation Reserve was also likely to be a contributing factor: Council will this week consider a report recommending Long Gully Swimming Pool close in favour of continuing with plans to open a Water Splash Play Park in the area. In December 2010, Council endorsed the Aquatic Facility Strategy recommending the pool close in favour of opening the new Kangaroo Flat Aquatic Centre and open a splash park. At the time a taskforce was also established involving local Long Gully businesses and residents. It met on several occasions and determined the splash park should be placed at Long Gully Recreation Reserve. A stakeholder bulletin was distributed widely, outlining plans for the proposed splash park and the Long Gully pool would close within three years. The pool continued to deteriorate, so Council resolved to permanently close Long Gully Swimming Pool on November 14, 2012 and allocate funds in the 2013/14 budget for the splash park. It would be beneficial for CoGB to review the engagement undertaken with the Long Gully community to identify approaches that increased communication and buy in for residents.
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http://www.bendigo.vic.gov.au/News/Media_releases/Concept_Plans_for_proposed_Kangaroo_Flat_Aquatic_Leisure_Centre_released, accessed 1 May 2013 http://www.bendigo.vic.gov.au/News/Media_releases/Council_to_consider_Long_Gully_Pool_report, accessed 22 June 2013
11. Edward Street Car Park
Edward Street Multi Level Car Park

Capital Value: Completion Date: $16.3 million July 2012
2
The Edward Street Car Park and Office Complex was constructed on a 3,290m CoGB-owned site on the southern edge of the Bendigo CBD. This development is a model of a venture which has met both CoGB and private sector needs. The concept of developing a multi-story car park on the southern side of the Bendigo CBD was considered by CoGB and Council for approximately ten years prior to 2 commencement. In planning and designing the project, a key consideration was incorporating up to 1,800m for one or more commercial tenancies on the ground level, the purpose being to provide active street frontages wherever possible as well as provide CoGB with a revenue stream to help finance the development and help fund its wider operations once project debt-servicing is paid-off.
Figure 53 | Edward Street Car Park and Office Complex
Since opening in July 2012, the complex now has two key commercial tenants; State Trustees and The Coffee Club. It also has a target car park utilisation of 70% . Discussions with relevant CoGB staff have indicated that current utilisation of the car park is in the order of 50-70%.
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Themes Councils cost of capital Like in the private sector, the cost of council equity must always be considered when prioritising project investments by setting return targets. Involving the private sector in a public sector investment adds value in terms of productivity, certainty and meeting objectives, however it may eventuate in the scenario where the council is subsidising the activities of private sector and users.
Financials, Asset Management, Capital Expenditure The Edward Street Car Park Complex has been hailed by CoGB as a great success and local initiative to meet the defined objectives and enhance the CBD of Bendigo. Part of this success has been leveraged by the successful partnering with the commercial anchor tenant, State Trustees. The funding for the $16.3 million project was partially provided by the State Trustees who paid $1.5 million for the fit out of the commercial space and will be a long term lease holder. This long term lease and early involvement with the private sector is a great example of reducing the development risk of such an investment, since 58% of the revenue is forecast to be paid by the commercial leases. The remaining $14.8 million has been funded by an upfront payment by CoGB of $2.4 million cash and a $12.5 million credit financier loan with a 15 year maturity at an interest rate of 7.85%. This yields a project financing debt-equity ratio of 83%:17%. Upon analysis of the project financials, a key risk born to the CoGB is the cost of the facility over the next 15 years and the return on the $2.4 million cash investment. The following graphs investigate two aspects which describe and test the financial viability of the parking facility. Figure 54 (LHS) describes the cost to CoGB over the next 30 years and how the facility will take 15 years to begin generating revenue. Figure 54 (RHS) describes the project value to CoGB from their $2.4 million investment across a range of discount rates, showing that it breaks even at a discount rate of 6.7% which is the lower end of the return for a typical car park and office accommodation investment.
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City of Greater Bendigo Carpark excel model to Council, 27 April 2011
The complex includes the only public toilets with baby changing facilities available on the south side of the CBD as well as lifts, stair access, disabled parking and complimentary secure bike parking. This car park offers all motorists, including those living in the city a convenient and safe place to park their vehicle without being subject to various parking restrictions. This is the only secure car park in Bendigo that offers 24/7 access for reserved customers.
http://www.bendigo.vic.gov.au/Resid ents_and_Services/Parking/Car_Par king_Options
Actual return curve for increasing equity cost rates
Typical cost of equity for a commercial car parking business
Figure 54 | Cash result forecast to CoGB over a 30 year period (left) and sensitivity analysis modeling the discount rate and project value to CoGB (right) 66
An important issue identified within the financial modelling and documentation of the development is that there was no Return on Equity (ROE) or return targets attributed to the $2.4 million CoGB investment. These parameters are important as they are a true measure of project value to the CoGB as these types of investments can compete on a commercial basis. The 5 year comparison graph (see Figure 55) demonstrates that the ROE of the facility is less than the average of the top eight listed private sector Australian property firms. This yield of 6.7% is respectable considering the investment is made by a council rather than a private property firm. It should be noted however ,that one of the primary drivers of CoGB when deciding the construct this facility was to provide the community with additional carparking and increasing amenity in the CBD, not necessarily to make a return on Equity. This aligns with CoGBs role as a provider of services to the community and broader role of economic development.
ML Car park D/E Ratio (RHS)
ML Car park ROE (LHS)
Figure 55 | ROE and D-E Comparisons for the top 8 Australian listed property companies over the past 5 years
Another risk to the CoGB investment is the high proportion of debt funding and the repayment period of 15 years which does not return any cash to CoGB for 15 years. In fact, the investment will be cash negative to CoGB until 2025 as described in Figure 54. The debt-equity ratio applied to the funding structure is very high considering the Australian property group average and is considered highly risky since the interest cover ratios on the debt would not be accepted by the funders if CoGB had not guaranteed the loan. Ultimately, for the long term gain of CoGB ownership of the future revenues from this facility, participation in this transaction will see CoGB subsidising the investment in the short and medium term through a lower ROE, whilst accepting the downside revenue risk exposure from the 42% of the revenues from car parking that are variable and uncertain.
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City Futures Directorate, City of Greater Bendigo Edward Street Car Park and Office Complex Completion Report v11, 17 October 2012
Bendigo company, Ausform Pty Ltd has been appointed a $5 million plus sub-contract to build the main concrete structure (skeleton) for the Edward Street Car Park project. Ausform has been in operation for fifteen years and employs a local team of about fifty engineering, trade and administrative personnel.
However it must be noted that this downside in financial return maybe recouped through broader economic benefits to the CBD commercial operators and shoppers from the investment. In addition, CoGBs rate revenue will realise an increase from higher commercial property values surrounding the development, however these have already been included in the business case cashflows used for modelling the ROE above. Other non-monetised benefits will be time savings and decreased vehicle operating costs from congestion mitigation, an undercover and centrally located parking facility. The region will also realise an increased Gross Regional Product and commercial activity within the Bendigo LGA from the 100 jobs added from the arrival of the State Trustees and The Coffee Club. Service delivery In a general sense, it is CoGBs role to provide civic services to the community, paid mainly through the recouping of rates from the community. Many of these services may not be commercially viable to private investors as their return is measured socially through community benefits. An investment such as the Edward Street Car Park and Office Complex which has the objective of being a future revenue generator to CoGB should be measured against a private sector investment and derive the same value as if the asset was owned by the private sector. However, a number of community benefits have been achieved during the 67 development of the Edward Street Car Park and Office Complex, being :

The New Edward Street Car Park, Project Update 4, November 2011
Significantly increased the supply of short and long stay car parking for patrons and employees of the Bendigo CBD Help relieve parking pressure on commercial and residential areas surrounding the Bendigo CBD Provide public toilets and baby-change amenities for the CBD Provide major economic development benefits for the region (including direct employment benefits stemming from the attraction of the 100-employee Victorian Governments State Trustees office to Bendigo) Encourage the development and current and future growth of the CBD
In addition, the development of the Car Park and Office Complex was completed on time and within budget. Communication The Bendigo community was kept informed of the progress of development of the Edward Street site through frequent media releases, project update documents and stories published by local media outlets. These updates included information on the key project objectives, building progress, indicative timelines, announcements of key tenants, community involvement, etc. Overall, the level of communication between CoGB and the Bendigo community for this project was high and provided the community with frequent updates containing relevant information.
Issues
An issue which should be addressed is the funding structure for the Edward Street development as the high debt equity ratio is possibly detrimental to financial success. Since CoGB does not pay company tax, the leveraging effects of using debt to increase equity return is not effective and therefore in the case of this development, the cost of debt is higher than the cost of equity (equity 6.26% v debt 7.85%). The private sector can write the cost of interest off their bottom line and therefore the effective debt rate would be 30% less. Another observation made in regard to the project documentation was the lack of consultation with both the Victorian Department of Treasury and Finance (DFT) which provides guidance to local governments in regard to risk weighted discount rates, and from the transaction support consultants to provide a more robust financial analysis and commercial advice. That is, a more robust business case should have been developed prior to project approval. One possibility is for CoGB to sell the asset to the private sector once the parking utilisation rates and trends are confirmed. This solution may find that the asset has a higher value to the private sector since its weighted average cost of capital is less with CoGB making a small developer profit, freeing up cash and discharging the payment liabilities to be used on higher priority capital expenditure activities. A number of submissions to the Independent Review Committee indicated that transport in Bendigo has been a topic of conversation for a number of years. A draft Bendigo Road Transport Strategy was released for public comment in March 2011 and received 450 submissions from the community and high attendance at community forums. Since then, CoGB has employed a Transport Planner to begin work on an Integrated Transport and Land Use Strategy. In April 2013, Council endorsed a plan that details how the Strategy will be developed in stages, with a focus on engaging with the Bendigo community. It is clear that options for Bendigos future transport system are likely to include increased use of public transport, walking and cycling and decreased use of case, particularly in the CBD. This will potentially limit growth in parking revenue in the long term, although it is noted that Bendigos high reliance on car use is unlikely to change in the short to medium term and not all will switch to public transport, even in the long term.
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Opportunities
Opportunities for CoGB and the Bendigo community are to acknowledge the financial lessons outlined above from this otherwise successful investment within the Bendigo CBD. This success should be promoted to encourage similar developments within the CBD, delivering infrastructure with the use of public funding, with strong support from the private sector. A defining factor for the Edward Street development was the early involvement of the anchor tenant, as this can reduce the revenue risk of a commercial property development. In addition, CoGB has the advantage of generating social and economic benefits with its investments for the community; and these should be measured and reported against to add viability to the project business case, even if the monetary investment return is not equivalent to the private sector. Acknowledging the learnings and outcomes from this project, CoGB has the potential to attract more business and commercial enterprises to Bendigo to replicate the success the Edward Street Car Park and Office Complex investment.
12. Grace Kelly Exhibition
Grace Kelly Style Icon Exhibition, A success story

Value to Bendigo: Completion Date:
Financial profit of $1.3 million and economic benefit to the Bendigo economy of $16.31 million June 2012
The Grace Kelly: Style Icon exhibition (Exhibition) was presented at and by Bendigo Art Gallery between Sunday 11 March and Sunday 17 June, 2012 (99 days). The Bendigo Art Gallery team worked in collaboration with their colleagues at The Capital Bendigos Performing Arts Centre and the Tourism Unit which includes the Bendigo Visitor Centre. The organisation of the event also included the Bendigo Art Gallery Board and the Victorian Government, as well as a suite of major sponsors and a range of international exhibition presenting partners. The Grace Kelly: Style Icon exhibition was the third in a series titled Bendigo International Collections, supported by the Victorian Major Events Company which is owned by the Victorian Government. The securing and staging of the Exhibition was the culmination of years of collaboration and trust that has been developed between Bendigo Art Gallery and Londons Victoria and Albert Museum. The initial objectives of the Exhibition, as set out by Bendigo Art Gallery, were to

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Grace Kelly: Style Icon Exhibition
Attract at least 60,000 patrons and visitors to Bendigo for the economic and social benefit of the region Consolidate the reputation of Bendigo Art Gallery as one of, if not the most, progressive and ambitious gallery in regional Australia Attract significant sponsorship support and income through entry charges to offset costs and at very least break-even financially (excluding permanent staffing costs) Positively promote Bendigo far and wide Provide the community with the opportunity to experience an international standard exhibition locally Engender a sense of civic pride locally
This case study will demonstrate the positive impact that an event such as the Grace Kelly: Style Icon exhibition can have on the Bendigo community. The Exhibition was a great success for CoGB with positive economic impacts to the Bendigo community and economy. The Exhibition not only drew people to Bendigo, it also provided many direct economic benefits through increased spending with local businesses. The Exhibition attracted significantly more patrons than anticipated, an estimated 152,706 attendees, leading to a positive financial result of approximately $1,357,000 in direct profit. The Exhibition also delivered successful economic outcomes through increased spending at Bendigo businesses, as well as successful promotion of Bendigos culture and community.
Themes
Financials, Asset Management, Capital Expenditure The revenue generated for CoGB by the Exhibition event was approximately $ 3,318,000 and the direct expenditure cost to CoGB from organising the exhibition was approximately $1,961,000. The financial results below break down the revenue and expenditures into their various components. It is noted that the reporting on the expenditure items is unclear and there seems to be duplication in expense lines. For example, Internal General Expenditure Various, Visitor Services Special Costs, The Capital Additional Costs and Other Misc.
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City Futures Directorate, City of Greater Bendigo, Grace Kelly: Style Icon Post Event Summary and Evaluation, 15 August 2012
The economic benefits generated by the Grace Kelly exhibition including direct and indirect benefits was on the Bendigo economy more than $16.31 million dollars, with a direct expenditure in the Bendigo region of over $8.96 million.
Grace Kelly Exhibition: Bendigo Art Gallery Economic Impact and Market Research Report
Income-revenue generated for CoGB by the exhibition event: Revenue Tickets sales (income to Gallery) $2,250,000 $282,000 $240,000 $340,000 $120,000 $66,000 $20,000 $ 3,318,000
Expenditure incurred by CoGB directly from the exhibition: Expense Exhibition Fees (V&AM and Grimaldi Forum) Exhibition freight, logistics and associated etc. Advertising-Promotion-Marketing-Presentations-Publicity Exhibition design, hire and build Casual-part time staff (exhibition specific only) Openings and various functions Shop Merchandise Internal General expenditure - Various Accommodation, travelling, parking, couriers etc Postage Visitor Services special costs (inc. volunteer hub development support) The Capital additional costs (software etc.) Security services Other - Misc. Total Expenditure
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$277,000 $315,000 $520,000 $230,000 $240,000 $60,000 $165,000 $25,000 $44,000 $22,000 $22,000
Tickets commission and associated (income to The Capital) Sponsorships Various Shop sales (estimate only - exhibition associated only) Tourism Unit marketing contributions from industry Tourism Unit commissions etc. Misc. - General Various Total Revenue
$16,000 $7,000 $18,000 $1,961,000
In staging the event, CoGB achieved a financial profit of approximately $1,357,000. This is a very positive result, given that the event was budgeted to make a modest loss. Economic impact In addition to the financial results (above) for the actual income and expenditure for the event, an economic benefits analysis was undertaken by the Bendigo Art Gallery, in conjunction with Tourism Victoria and the Victorian Major Events Company who made contributions towards the budget. The analysis found that the economic benefits generated by the Grace Kelly exhibition including direct and indirect benefits to the Bendigo economy was more than $16.31 million dollars, with a direct expenditure in the Bendigo region of over $8.96 million. The economic assessment concluded that a total of 152,706 people attended the exhibition, with the average person attending the Exhibition for 1.09 days (i.e more than once). This therefore equates to a total of 140,097 individuals in attendance. Over 89% of attendees lived outside the Bendigo area with 80% visiting because of the Exhibition and 1.6% extending their stay. More than 91% of people who attended the Exhibition from Melbourne travelled to Bendigo for the purpose of attending the event, with 80% of overseas visitors to Bendigo attending because of the Exhibition.
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Wages for City Futures staff not included in the final figures as these were not dedicated Exhibition resources Grace Kelly Exhibition: Bendigo Art Gallery Economic Impact and Market Research Report, IER, July 2012.
This type of event, more often seen in an art gallery in a capital city was significant achievement for the City of Greater Bendigo and provokes a feeling of pride and community spirit for the local residents.
The economic assessment has estimated that the expenditure within Bendigo, by attendees who were motivated to visit or extend their stay in Bendigo because of the Exhibition, was more than $7.4 million. In addition, the Bendigo Art Gallery contributed approximately $1.5 million to the Bendigo economy using revenue sourced from outside the region. In total, the direct expenditure in the Bendigo economy generated by the Exhibition has been estimated to be $8.96 million with the total economic impact on the Bendigo economy estimated at more than $16.31 million. Social impact Although the social benefit to the community cannot be measured in economic terms, the Exhibition allowed the Bendigo community a chance to experience a major art exhibition in their own back yard. Interestingly, the majority of attendees to the exhibition were from outside of Bendigo, with approximately 15% residing in Bendigo. This is disappointing as this type of event, more often seen in an art gallery in a capital city was a third in a series of these exhibitions for Bendigo and should have provoked a feeling of pride and community spirit for the local residents. This impact is integral to creating a sense of community for a regional city such as Bendigo and sets a precident that the regional centre can successfully hold such renowned events. Service delivery The Bendigo Art Gallery team worked collaboratively with staff at The Capital Bendigos Performing Arts Centre and the Tourism Unit (include the Bendigo Visitor Centre). This collaboration also included the Bendigo Art Gallery Board, the Victorian Government and a suite of major sponsors and a range of international exhibition presenting partners. The event was supported by over 100 volunteers including Friends and Guides of the Gallery; Tourism Ambassadors roaming central Bendigo and Bendigo Train Station; and Bendigo Visitor Centre guides. Communication A significant media campaign was developed for this exhibition, with advertising costing $520,000. As well as the tangible and measurable economic benefits the Exhibition delivered to the region, these estimates do not account for the significant, but difficult to monetise positive promotional exposure provided to Bendigo through press coverage and other publicity in mainstream media on a local, regional and national level. The economic value is estimated to be at least several million dollars generated from the positive publicity through city branding (awareness-raising) and increased tourism, as well as indirectly through reputation, goodwill and progressive resident attraction. This is a significant benefit to the City and provides far-reaching benefits and opportunities for the region. One criticism of the Exhibition is that these tangible and intangible benefits to Bendigo should be communicated to constituents more thoroughly. Governance The Exhibition operated in the policy context of the Council Plan 2009-2013, through the Community and Culture goal area, which relates to Council programs, actions and 71 services, including advocacy and indirect community and cultural benefit : Specifically, the exhibition falls under Strategy 3.4 within the Council Plan, which aims to develop the cultural and creative aspirations of the community to make a significant contribution to the regions Social and Economic prosperity and quality of life for all. Within this Strategy, Action 3.4.1 aims to review and develop the Arts and Cultural Strategy, and Action 3.4.2 aims to support a diverse and vibrant arts, music and cultural program that challenges community thinking and encourages appreciation and participation. The lead responsibility for Action 3.4.1 is the Strategy unit within CoGB, and the Community and Cultural Development is responsible for Action 3.4.2. Within this policy framework, the overarching aim for Bendigo Art Gallery and associated cultural units is to continue to develop and grow as a leader in contemporary art.
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City of Greater Bendigo Council Plan 2009-13, Updated 2011
Issues
While the majority of attendees were reasonably to very happy with their visit to Bendigo Art Gallery and Bendigo more generally, there was some, although little, adverse feedback, specifically:

Some dissatisfaction from patrons with cafs and restaurants in the CBD being either too busy due to the influx of visitors or some cafes being closed at night and on weekends Venue over-crowding at times The gallery being sold out on some weekends Having to purchase tickets next door at The Capital and not the gallery itself (i.e. perceived double-handling)
However, this feedback was a significant improvement over the feedback received for a previous art exhibition in 2008-09 (Golden Age of Couture exhibition), particularly with regard to long outdoor queues and the city not being ready for the large influx of visitors.
Opportunities
The economic analysis found that the majority of visitors to Bendigo for the Exhibition did not choose to stay in Bendigo, but rather in other localities outside of Bendigo during their stay. Around 1 in 5 patrons from regional Victoria stayed overnight, 1 in 8 from Melbourne and 1 in 9 interstate attendees stayed in overnight accommodation in Bendigo. Overall, more than 17,218 bed nights were generated in Bendigo because of the Exhibition. This presents a possible opportunity to increase direct expenditure in Bendigo by encouraging people to visit future exhibitions and Bendigo generally who choose to extend their stay in Bendigo and stay in overnight accommodation in the city. Encouraging people to stay longer in Bendigo can be achieved by promoting the city as an attractive, vibrant regional centre, which has the necessary infrastructure and accommodation available to support an influx of out-of-region visitors. This may require an investment from CoGB and the Victorian Government in local infrastructure and community initiatives. However as previously discussed, the economic impact on Bendigo from out-of-region visitors, as well as Victoria from interstate tourists is significant, and suggests there will be a return on investment for CoGB. Given the success of the Exhibition, financially, economically and socially, CoGB should be encouraged to build on this success by continuing to invest in similar cultural events. CoGB is creating a vibrant CBD and arts precinct within Bendigo. This rejuvenation and revitalising of Regional Cities across Australia is a growing trend, which has the potential to attract visitors to Bendigo both during major exhibitions as well as throughout the year.
13. CoGB office consolidation
CoGB office consolidation

The consolidation of CoGB offices to a single facility has been considered a number of times in recent years with the most recent feasibility study into the proposal published in 2010. Anecdotal evidence, gathered from interviews with CoGB staff members during the course of this Review, has echoed the feasibility study finding that less than ideal levels of efficiency and organisational culture exist within CoGB. Inefficiencies noted by Aurecon include:
Figure 1 Bendigo Civic Centre land ownership
Project Objectives 1. Improve the communitys experience of accessing Council services 2. Achieve value for money for ratepayers and residents in the delivery of Council services 3. Meet the urgent accommodation space and quality needs of Council for the long term 4. Improve the efficiency of Council services and equipment through the concentration and co-location of staff 5. Enhance Bendigos urban realm consistent with the CBD Structure Plan 6. Reflect Councils environmental values in the sustainability of its accommodation
The location of CoGB staff within numerous offices in the Bendigo civic precinct, some owned by CoGB and some which are leased. This arrangement impacts on CoGBs ability to deliver services efficiently and conveniently to the community. The decentralised operation also impacts organisation culture of CoGB, as staff and the functions of CoGB are not fully integrated and communication among colleagues, as well as the public could be enhanced. A centralised government precinct would facilitate improved communication among the various functions of CoGB. High building leasing costs The present facilities are not suitable to accommodate future staff growth. In 2010, 285 staff working for CoGB were located across various offices in the city. This number is projected to increase by up to 1% per annum, to approximately 347 staff requiring 72 accommodation in the City by 2029 .
In summary, the current dispersed accommodation presents the following organisational culture gaps:

Civic leadership is weakened Organisation efficiency is compromised Corporate identity is fragmented Information sharing is disjointed and, in some instances, ineffective Public access in unclear Disaggregated isolation of staff across various office locations
The two key drivers for the project are to provide a single facility for current staff and cater for organisational growth; and to eliminate inefficiencies in communications and internal operations. This case study outlines the potential upgrade of the current CoGB site. It may be possible for CoGB to acquire office accommodation elsewhere in the CBD, and this should be considered as part of any business case and option analysis process going forward. For instance, one submission to the Independent Review Committee suggested that there were a number of disused TAFE buildings in the CBD that may be suitable for redevelopment into CoGB office accommodation.
Themes
Financials, Asset Management, Capital Expenditure The total area of office accommodation owned by CoGB is 2,906m (Lyttleton Terrace, St Andrews Avenue, Jaara Building and the Aged Services Building) and the amount of 2 2 2 accommodation leased is 2,512 m (Hopetoun Mill, Mundy Street and Myer Street), giving a total current floor space of 5,418m available to accommodate 285 staff (or 19m per staff member).
2
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Bendigo Civic Precinct Feasibility Analysis, Biruu Consulting, August 2010
The 2010 feasibility study undertook analysis to determine the feasibility of consolidating the current CoGB offices into one centralised civic precinct. This precinct is defined in the CBD Plan as the area bordered by Lyttleton Terrace, St Andrews Avenue, Mundy Street and Myers Street. Currently CoGB owns a large proportion of the land on this site, with the remainder privately owned. The precinct currently contains major civic buildings, CoGB offices and the library. It would therefore naturally suit an expansion of local government presence. As part of the feasibility, the option of sharing the facility with other levels of government was investigated; however no interest in co-location was indicated from other government agencies. The key objectives to develop the site are to cater for the future accommodation needs of CoGB, be a catalyst for the continued development of other professional office 73 accommodation for private enterprise and to regenerate the site as a central hub for government ancillary activities including a car parking facility . The 2010 feasibility study 2 identified three possible implementation options (based on 2010 CoGB office space requirements of 5,200m ) for the construction of the Bendigo Civic Centre which include the staged construction of CoGB and commercial offices as well as a car park. Table 26 describes the delivered office space and car parks for the three options across the proposed construction staging. Option 1 Features Simple construction with green space between office buildings
2
Option 2 Wrapped Car Parking with landscaped space
Option 3 Wrapped Car Parking and site potential maximised
Stage 1 CoGB Office Stage 2 CoGB Office Commercial Office Stage 3 Commercial Office CoGB Office Total Commercial Office Total New Built Car Parking 5,200m 7,180m
2 2
5,200m
5,200m
3,470m
7,180m
2
3,200m
2
1,730m 6,200m
2 2
2,400m
2 2 2
3,000m
2 2 2
5,200m 5,600m
5,200m 9,200m
271 spaces
235 spaces
300 spaces
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Table 26 | Bendigo Civic Precinct Feasibility Analysis (2010) delivered accommodation and car parking facilities for each option
For each option, the redevelopment of the precinct involves the demolition of the current premises, followed by the replacement with new office space, making staging and relocating of staff during construction, a key issue. The three options and their respective staging are briefly described as follows.
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Bendigo Civic Precinct Feasibility Analysis, Biruu Consulting, August 2010 Bendigo Civic Precinct Feasibility Analysis, Biruu Consulting, August 2010
Option 1 (refer Figure 56) has been separated into 2 stages. The first stage involves demolition of the current CoGB offices and construction of the new CoGB building, while Stage 2 involves the construction of a multi-storey car park and commercial office building. There will be a need to relocate some staff during the demolition and construction of the new building which will cause some disruption.
Stage 1 Demolition of old building and construction of new CoGB office
Stage2 Construction of a multi-storey car park and commercial office building
Completed Development
Figure 56 | Option 1 construction staging
Option 2 (refer Figure 57) has been separated in 3 stages. Stage 1 will involve the demolition of the Lyttleton Terrace building as well as one of the Mundy Street offices, to be replaced with a 3-level CoGB office building. Some staff will be able to shift into adjacent buildings during this phase, saving some time and inconvenience compared to Option1. The major difference is the split of commercial buildings and the wrapped car parking structure that now has minimal street frontage. Stage 2 involves the demolition of the final two CoGB owned buildings and the construction of the car park and commercial office building. Stage 3 includes the construction of the Mundy Street commercial offices.
Stage 1 Demolition of Lyttleton Terrace building and Mundy Street office, and replacement with new 3-level building Figure 57 | Option 2 construction staging
Stage 2 Demolition of the remaining two Council buildings and construction of car park and commercial office building
Stage 3 Mundy Street commercial offices constructed
Option 3 (Figure 58) represents the best use of the site, as well as an effort to minimise disruption to staff and provide an easy transition and decanting period between premises for CoGB. Similarly to Option 2, Option 3 is staged over three phases. The first stage involves the demolition of the building facing St Andrews Avenue. This phase will see the decanting of most staff into the new office building, prior to the commencement of Stage 2. Stage 2 involves the demolition of the remaining offices on the site and the completion of CoGBs offices. This stage also includes the completion of the car park and the commencement of the commercial office building. Stage 3 will construct a second commercial premise along Market Street pending market appetite for such a development.
Stage 1 Demolition of the building facing St Andrews Avenue
Stage 2 Demolition of remaining offices on the site, and completion of Councils offices. Car park is completed and construction begins on commercial office building.
Stage 3 Second commercial premise constructed along Market Street (when appropriate)
Figure 58 | Option 3 construction staging
The feasibility study undertaken in 2010 provided estimates of the cost to redevelop the site separated into CoGB office component and then the cost of the additional car park and commercial offices. The estimate to develop the CoGB office site only for each option is described in Table 27 and for the additional stages in Table 28. The total Net Present Value (NPV) cost is provided in Table 28 since the stages are planned to be constructed over a number of years. Option 1 Stage 1 - CoGB Offices External Works Total Cost (in 2010 dollars)
Table 27 | City of Greater Bendigo office costs ONLY Note: These costs do not include any multi-level car parking as all three options provide sufficient at-grade parking for CoGB staff prior to construction of the commercial building.
Option 2 $30,551,959 $1,038,044 $31,590,003
Option 3 $28,379,999 $1,167,185 $29,547,184
$31,328,604 $1,215,250 $32,543,854
Option 1 Stage 2 Commercial Offices Stage 3 Car Park and Commercial Office Total Cost (in 2010 dollars) Total Cost (staged escalation applied) NPV Analysis (in 2010 dollars) $38,048,569 $69,377,173 $75,470,310 $62,357,862
Option 2 $25,145,799 $9,553,584 $65,251,342 $71,328,342 $58,317,702
Option 3 $48,670,742 $11,689,217 $79,059,367 $87,206,209 $69,827,115
Table 28 | Cost of stages two and three including the total Net Present Value cost
The three shortlisted options for the civic precinct indicated a significant upfront capital cost for the Stage 1 construction of the CoGB office ranging from approximately $29.5 million to $32.5 million (in 2010 dollars). Total costs for the three options ranging from $58.3 million to $69.8 million (calculated in NPV costs in 2010 dollars). The Bendigo Civic Precinct Feasibility Analysis undertaken in 2010 did not offer any recommendations for possible procurement methods for the three options discussed above. It did however raise the option of financing the capital cost of the project through the private sector, with CoGB leasing the premises back. This arrangement is opposed to the traditional procurement model, whereby CoGB finances the construction, appoints a design team and tenders for a contractor to construction the facility. The study noted that CoGB considers the civic precinct to be strategically important and at this stage would like to remain on the site indefinitely. Therefore as at 2010, it is the preference of CoGB to remain landholders of the site and buildings rather than leasing the premises. Governance The project is governed through a number of State and Local Government policies. The project is an important component of policies such as Moving Forward: RDV Provincial Statement and Provincial Victoria Directions for the Next Decade, as well as Growing Victoria Together at a State level. The Bendigo Civic Centre also aligns with the Council 75 Plan and Bendigo CBD Structure Plan at a Local Government level. This policy context is outlined in Figure 5. Growing Victoria Together This policy is the Victorian Governments core policy document which describes the vision for the State. There are several key visions contained in this policy which are relevant to the project:
Figure 59 | Hierarchy of policy context
Growing & Linking All of Victoria vision consolidation of CoGB accommodation enables a more efficient means of providing the community with the necessary planning tools to meet the needs of an increasing population Thriving Economy vision aims for more quality jobs and thriving, innovative industries across Victoria which includes catalysing private sector investment through the creation of construction jobs for the development of the civic precinct Healthy Environment vision the possibility of building green star rated accommodation in Bendigo would enable a more efficient use of natural resources
Moving Forward: RDV Provincial Statement This policy provides a $502 million package of 72 initiatives designed to increase sustainable economic growth in provincial Victoria. The sustainable development and the responsibility of land management by CoGB strongly aligns with this initiative. Provincial Victoria: Directions for the Next Decade Through this policy, the State Government is undertaking the Regional Strategic Planning Initiative, which aims to develop regional plans to support the growth and success of provincial Victoria. This initiative will assist CoGB in planning for the next phases of growth, including land use and settlement planning and the provision of infrastructure and services. City of Greater Bendigo CBD Structure Plan The Civic precinct vision is to provide a site for the co-location of various government, CoGB and community based units. CBD Structure Plan will provide CoGB with a contextual framework when deciding on the most appropriate option for the redevelopment of the civic precinct.
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Issues and considerations

The three options identified in the 2010 feasibility study are high cost solutions for the consolidation of CoGB operations into a civic precinct, as outlined in Table 27 and Table 28. Developing a commercial office space is a high risk and high cost exercise and not in mandate of core services provided by CoGB. Significant communication of key project drivers and community consultation would be required by CoGB to limit negative community sentiment that may be associated with such a project. This would require tailored communication and engagement, and clear emphasis of the benefits versus the costs. Therefore, consideration to involve private sector investment should be given to the procurement of all three stages by comparing the benefits and issues of conducting an 76 entirely CoGB funded investment with a completely private funded investment; or a hybrid procurement solution which includes a mix of both . Potential procurement models which can be used to create a public-private funded investment:

Design and Construct (D&C) (which can be paid for both public and private funding) Build, Own, Operate and Maintain (BOOM) model Alliance model (with collective responsibility between the private and public sector to deliver the project and share project risk) Public Private Partnership (PPP) model
These procurement models can be used to within a spectrum of the two opposed procurement options. Either completely government funded or completely private sector funded within a build, own, operate and maintain model).
Public Influence
Private Influence
The appeal of such procurement models needs to be assessed against aspects including time, cost certainty, quality of design and construction, flexibility in delivery, risk allocation and responsibility, property market demand and funding availability. Each model supports a differing mix of government sector verse private sector influence on the project. Some key issues of a procurement model based on complete public involvement (e.g. a traditional procurement model) include:

Timing CoGB assumes the program risk for delivery of the project Cost High capital outlay upfront for CoGB which can cause budget constraints or high levels of borrowings Risk CoGB takes on developer risk Quality of design CoGB lacks property developer influence to maximise development site commercial value.
Some key issues with a completely private investment procurement model are:

Timing CoGB has no control over market and the final investment structure which generally has a longer negotiation period and procurement lead time Certainty CoGB has less control over the design of the buildings and precinct Quality of design CoGB will forego some control over design specifications Risk Community benefits may not be a high priority without strict specifications Funding availability Highly dependent on private investor access to property development funding
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As part of this review, CoGBs capacity to entirely fund a development such as this would be difficult due to the asset renewal and delayed capital expenditure concerns. Therefore assuming that a public-private Build, Own, Operate and Maintain model is selected, as preferred in the 2010 feasibility study, following aspects for the desired procurement process must consider the following points: 1. CoGB is a significant landholder of the site and therefore an arrangement such as a BOOM model would assign the construction of the facilities to a private investor who would lease back the office space to CoGB for up to a 99 year period. After the 99 years, the facility would become an asset of CoGB. A hybrid arrangement of the BOOM model may involve CoGB owning its offices through a contribution to the project but allocating the Car Park and Commercial Office accommodation funding to the private sector. The operating and maintenance agreements for a hybrid solution could take many forms. 2. Under a BOOM model, a large portion of the project is expected to be funded through the private sector. Given the current instability in the financial markets the appetite for such a development depends on the demand for professional office space within the Bendigo CBD. A market sounding exercise will be required to inform a procurement process that will involve an Expression Of Interest (EOI) and Request For Proposal (RFP) 3. A large cost risk is present with the proposed site as the geological conditions and foundation requirements are unknown. A geological testing and advisory service is required prior to reviewing the construction cost. This testing would be completed prior to the RFP stage and form part of the design specifications. 4. It is strongly advised that external consultants are engaged during the developer engagement and delivery stage to act on behalf of CoGB to negotiate the procurement model, conduct construction management supervision and owners engineering verification. 5. The opportunity to co-locate CoGB and Government tenants still exist as it has been 3 years since the 2010 feasibility study was completed. It is advisable that negotiations with any future Government tenant or commercial tenant for that matter begin early to ensure the optimal outcomes. A Memorandum Of Understanding (MOU) should be the first negotiation step towards signing up an anchor tenant prior to Financial Close (FC) with any development and reduces the risk and increases the investment appetite for private sector involvement. 6. It is recommended that community consultation be undertaken early to explain the benefits of the project.
Opportunities
Several opportunities are present for CoGB to benefit from the proposed consolidation of CoGB buildings, whether they are procured through the traditional model or involving private investment. Some key opportunities based on a complete public involvement procurement model are:

Timing CoGB has control over the procurement timeline, and can begin acquiring a D&C contract at a time of its choosing Cost Procurement cost of D&C contractor is relatively less costly than in a private investment model as the engagement time is less and development risk is with CoGB Certainty CoGB has complete control over the end design of the precinct Quality of design Precinct design entirely to CoGB specification Flexibility CoGB can retain a stake holding at a time of its choosing
Some key opportunities based on a completely private investment procurement model include:

Cost The Government can structure the public-private hybrid investment arrangement so it incurs minimal or no upfront capital costs depending on the risk sharing agreement Risk Lower risk procurement strategy for CoGB Time Appetite for private sector investment will increase with more anchor tenant commitments Funding No major upfront capital cost to Government and higher surety of cash flows and liabilities for CoGB
A recent example of a successful CoGB investment which involved public-private investment was the Edward Street Car Park and office complex. This project, which was 77 completed in July 2012, had a capital value of $16.3 million . The purpose of involving the private sector in the development of the car park was to provide active street frontages wherever possible as well as provide CoGB with a revenue stream to help finance the development and help fund its wider operations once project debt-servicing is paid-off. Part of the success of the project was based on the successful partnering with the commercial anchor tenant, State Trustees. The funding for the $16.3 million project was partially provided by the State Trustees, which paid a portion of the fit out of the commercial space and signed a long term lease holder agreement. This long term lease and early involvement with the private sector is a good example of reducing the development risk of such an investment, since over half the revenue is forecast to be paid by the commercial leases.
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A further opportunity presented by the proposed redevelopment of the civic precinct is the impact the consolidation of CoGB offices will have on the internal CoGB organisation integration and communication; and ultimately on productivity and efficiency. As discussed previously, a major problem with the current decentralised operation is the negative impact on organisational culture of CoGB. Renovating and modernising the interior design of the CoGB office facilities into a contemporary open plan floor layout offers an opportunity for higher density accommodation without a loss of amenity. This in turn improves communication among staff and engagement both within teams and among the various Directorates of CoGB, which would facilitate improved communication and efficiencies among the various functions of CoGB. Ultimately the Bendigo community will benefit from the increased capacity to conveniently approach CoGB in one centralised location.
Recommendations
14.
Recommendations
In response to Observations, Findings and Conclusions, Aurecon has provided Recommendations throughout this Report. These Recommendations are summarised within this Section and are grouped by level of priority and timeframe to assist CoGB in its assessment and in planning for implementation. Each Recommendation was assigned a LOW, MEDIUM or HIGH priority level, based on its value potential to CoGB in terms of operational efficiency or effectiveness. The following definitions were used. HIGH Associated finding(s), observation(s) or conclusion(s) showed a detrimental gap from optimum operational efficiency, impacting on all staff and/or the entire organisation. MEDIUM - Associated finding(s), observation(s) or conclusion(s) showed a moderate gap from optimum operational efficiency. LOW - Associated finding(s), observation(s) or conclusion(s) showed a relatively small gap in operational efficiency.
For the Review to be successful, the implementation of the recommendations will need to be resourced. As there is limited capacity for additional work to be undertaken with current workloads of existing staff, implementation will need to be achieved by access to additional resources or reprioritisation of other demands/resources
Confidential submission to the Independent Review Committee
Definitions of timeframes provided for implementation of recommendations are: Ongoing Implement within the next 0-6 months with ongoing monitoring and reporting as required. Immediate Implement within the next 0-6 months Short Implement within the next 6-12 months Medium Commence implementation within the next 12-14 months Long Implement over the next 24 months or more.
Aurecon recommends that an implementation and communication strategy, based on the recommendations of this Review, is produced, disseminated to relevant staff and regularly updated. This strategy should consider short, medium and long term implementation goals with realistic and robust measures for success. Item Number 1 Recommendation Create and continually update an implementation strategy and Communications Plan to address and action the recommendations of this Review. Outcome Continued progress in actioning the recommendations of the Independent Review. Efficient and effective implementation of recommendations. 2 Undertake an organisation-wide review of all classifications and work structures to formalise and document consistent roles, responsibilities and salary banding. Consistent salary banding across the organisation. Clearly defined roles and responsibilities. Increased operational performance across the organisation. HIGH Short Priority HIGH Time frame Ongoing
Item Number 3
Recommendation Create a standardised Matter for Decision template for investment and business case proposals (capital works, operational expenditure, service provision, upgrades/renewals, direct requests from Council and asset maintenance) to be applied across all Directorates. The Matter for Decision template must include:

Outcome Clear and transparent matter for decision process implemented across the organisation. This will enable transparent decisions to be collated and assessed.
Priority HIGH
Time frame Immediate
Information on the project, the need and purpose, and budget implications The outcome for and benefit to the community Clearly link the expense to the Asset Management Register (if appropriate) A clear link between the Councils Vision, strategy, Plan and the project A monetary and risk threshold and decision making process to define the extent and depth of the business case and reporting required, and level of approval (similar to a procurement policy). A structured and transparent approach to selecting the programs and infrastructure investments that provides the greatest value to the community. Clear strategy for the future of waste management in the municipality and a clear understanding of the costs associated with landfill rehabilitation and a plan from Council as to how this should be funded. Restructure of the unit in a timely and cost effective manner. Restructure of the unit in a timely and cost effective manner. Increased and sustained economic development in the region. Increased transparency and reporting on the income and expenditure of these units. HIGH Short
Create a formal asset management and infrastructure project ranking and evaluation framework.
Facilitate the development and finalisation of the Waste Strategy to determine the best way to manage waste going forward, and undertake analysis to determine the cost and requirements for the rehabilitation of historic sites and current sites once they reach capacity. Following completion of the Aged and Disability Services review, implement and complete the recommendations adopted by Council in a timely manner. Following completion of the Early Childhood Services review, implement and complete the recommendations adopted by Council in a timely manner. Investigate the option to separate the Economic Development Unit, Tourism, the Bendigo Art Gallery, The Capital and Major Events from City Futures into a separate entity. This investigation must include an implementation plan which would provide strategies and direction for the entity and underlying Business Units to aspire to become a self-funding operation within five years of separation. It must also include a plan to incorporate Major Projects into another Directorate of CoGB.
HIGH
Short
HIGH
Short
HIGH
Short
HIGH
Medium Long
Engage with Local Government Victoria regarding the program to streamline and benchmark KPIs across local governments.
Quantitative and qualitative comparisons around themes such as engagement techniques, process timeframes and managing referrals.
HIGH
Short
Item Number 10
Recommendation Implement a performance management: Framework; Change management plan; and, an information technology software system
Outcome Clear and transparent organisation performance and a high performance culture Capacity to track and monitor organisation and individual performance.
Priority HIGH
Time frame Short
which is capable of facilitating performance management for all levels of the organisation (CoGB, Directorate, Business Unit and individuals). 11 Advocate and plan for the consolidation of CoGB offices.
A high performance culture in the organisation. Increased organisation efficiencies. Increased focus on customer service.
HIGH
Long
12
Review CoGBs instrument of delegation for Planning Permit Applications (including the Surf Coast Shires approach to delegation to a skills based, volunteer, Council appointed Special Committee). Review CoGBs Statutory Planning Unit consultation and mediation process and policy.
HIGH
Immediate
13
Increased focus on customer service. Increased skills in mediation for Planning staff. Increased transparency in Planning Permit Application decision making.
HIGH
Immediate
14
Review user fees charged. Enforce their requirement. Mandate monetary bonds for medium to large events held in public spaces and gardens.
Identified trends in user fees and charges showing Council and CoGB the level of fee and charges compliance. A clear recommendation on the future of Aged and Disability Services and Early Childhood Services for consideration and approval by Council. Responsible investment in major infrastructure projects that achieve a positive financial return for the community. Transparent trends of the actual cost of service provision to the community. Transparent trends of the actual cost of service provision to the community. Value-for-money outcomes for CoGB. Strong engagement and ownership of the process by staff affected by the change.
HIGH
Immediate
15
Finalise the Aged and Disability Services and Early Childhood Services reviews by 31 July 2013.
HIGH
Immediate
16
Mandate the completion of business cases to investment grade for all major investment projects. Review the services provided by each Business Unit and define the extent to which they are being subsidised by rates and other income. Report to be generated annually for Council. Monitor the revenue and expenditure associated with BenCon, the Livestock Exchange and Bendigo Airport for annual reporting to Council. Undertake a review of current waste management contracts with a view to finding efficiencies. Develop a change management strategy to undertake any adopted structural changes to the Aged and Disability Services Unit.
HIGH
Ongoing
17
HIGH
Ongoing
18
HIGH
Ongoing
19 20
HIGH HIGH
Short Short
Item Number 21
Recommendation Develop a change management strategy to undertake any adopted structural changes to come from the Early Childhood Services Review. Ensure that a transparent explanation of rates charges and the rating strategy is provided to the community, particularly in reference to revaluation. Adopt and implement an organisation-wide policy and procedure for closing the loop on customer enquiries and complaints.
Outcome Strong engagement and ownership of the process by staff affected by the change. Increased transparency.
Priority HIGH
Time frame Short
22
HIGH
Immediate
23
Increased focus on customer service. Clear roles and responsibilities for resolving customer enquiries and complaints. Increased focus on customer service. Clear roles and responsibilities for resolving customer enquiries and complaints. A structured and transparent approach to selecting the programs and infrastructure investments that provides the greatest value to the community. Improved efficiency in asset management across the organisation A structured and transparent approach to selecting the programs and infrastructure investments that provides the greatest value to the community.
HIGH
Short
24
Develop and mandate a consistent process for logging and tracking enquiries and complaints received in Pathway.
HIGH
Short
25
Finalise the Asset Management Policy and form an active Asset Management Steering Committee to monitor progress.
HIGH
Immediate
26
Finalise the Asset Management Strategy and implement action plan items to achieve 80% Core Maturity. Finalise Asset Management Plans for the following assets:

HIGH
Short
27
HIGH
Short
Roads sealed/unsealed roads, footpaths, kerb and channel, street furniture, urban street trees Bridges and major culverts Drainage systems, flood levees and pump systems Parks and recreation facilities Waste disposal and resource recovery systems Plant and fleet Office systems and furniture.
28
Formalise and document the process used to develop individual project budgets for Capital Works. Implement training for use of the Community Engagement Guidelines and Toolkit by Councillors and senior staff to understand appropriate methods of engagement for various scenarios and the format and desired outcomes of these methods. A review of current engagement practices could inform such training by identifying particular areas of strength and/or weakness. Monitor working capital (liquidity) and the capital replacement financial ratios including any internal or external factors which will adversely affect these and, if necessary, take corrective action. Engage a specialist to define strategies for CoGB to reduce the burden of the Defined Benefits Superannuation Plan liability.
Improved transparency in asset management across the organisation Extraction of better outcomes from community engagement with the appropriate methods being selected for various engagement scenarios.
HIGH
Immediate
29
HIGH
Short
30
Improved transparency in working capital and capital replacement costs. Improved transparency in strategies to manage the Defined Benefits liability.
HIGH
Ongoing
31
HIGH
Immediate
Item Number 32
Recommendation Develop robust and detailed governance training for both Councillors and CoGB staff. Review Directorate and Business Unit names to increase clarity around roles and responsibilities.
Outcome Effective training tools and material for the implementation of ongoing training. Increased focus on customer service. Clear roles and responsibilities for resolving customer enquiries and complaints. The benchmarking will provide quantitative and qualitative comparisons around themes such as engagement techniques, process timeframes and managing referrals. Increased buy-in and ownership of the project by the community. A transparent and robust business case to provide a value-for-money outcome for the community. Tailored and appropriate levels of engagement with the community leading to increased levels of satisfaction. Streamlined advertising process. Decreased budget variations. Cost savings. Consistent messages being released to the community from a centralised location within CoGB. Increased efficiency. Up-skilled Councillors and Directors able to provide the community with strong leadership during his/her term in office. Up-skilled Councillors able to provide the community with strong leadership during his/her term in office.
Priority HIGH
Time frame Short
33
MEDIUM
Short
34
Benchmark planning practices and metrics with a minimum of two comparable councils (e.g. Ballarat City Council and the City of Greater Geelong) for annual reporting to Council.
MEDIUM
Ongoing
35 36
Engage with stakeholders impacted by the future Bendigo Airport upgrade. Develop a detailed business case for the upgrade of Bendigo Airport to define the most cost effective funding mechanism. Develop a tool (e.g. a checklist) to assist CoGB staff to define the appropriate level of communication and engagement of stakeholders and community for future projects. Centralise the advertising budget and resources within the Communications and Media Team to improve buying power and negotiating influence. Formalise and mandate a Communications Policy so media releases are reviewed by the Communications and Media Team prior to release. Mandate ongoing training and education in Governance, roles and responsibilities, communication protocols (internal and external), and the Code of Conduct for all Councillors and Directors. Develop an education series for Councillors to provide ongoing guidance and assistance on relevant subjects (such as planning, HACC services, relevant legislation changes, cost shifting by the Federal and State Government, asset management and capital works, roles and responsibilities, Code of Conduct). Consider opportunities to improve the relationship between the planning team and public / applicants. This may include educating the community on the planning process and timelines so as to manage community expectations.
MEDIUM MEDIUM
Immediate Short
37
MEDIUM
Short
38
MEDIUM
Short
39
MEDIUM
Immediate
40
MEDIUM
Ongoing
41
MEDIUM
Ongoing
42
A community that is well informed about the planning approval process, leading to better customer service outcome and level of satisfaction.
MEDIUM
Short
Item Number 43
Recommendation Educate all Councillors and senior CoGB staff in CoGB Communication and Engagement protocols.
Outcome Clear and transparent guidelines regarding who can speak to the media and when. Consistent Councillor and CoGB messages in the media. Clear and transparent process to follow in the event that inappropriate communications or behaviours are reported. Reduction in design costs and a more efficient process of developing CoGB publications. Better coordination of community engagement activities and provision of expert advice and assistance to staff across the organisation. Better engagement with, and support provided to, the local indigenous and migrant communities. Better inclusion of these groups into the wider Bendigo community.
Priority MEDIUM
44
Review and update the current complaint handling procedure to include complaints relating to Councillors.
MEDIUM
Short
45
Explore opportunities to use the services of an in-house graphic design resource.
MEDIUM
Short
46
Explore opportunities to use the services of an in-house Community Engagement Officer resource.
MEDIUM
Short
47
Develop a Reconciliation Action Plan and Cultural Diversity Strategy during the 2013-14 financial year.
MEDIUM
Short
48 49 50
Work with local businesses to maximise benefits of the NBN rollout. Create a succession management plan for all senior management and other critical CoGB positions. Undertake an annual organisational survey of all CoGB staff and Councillors to track and benchmark the level and quality of internal and external communication and community engagement. Set long term aspirational goals for the Community Satisfaction Survey outcomes, execute appropriate plans and track progress annually. These goals should relate to organisational best practice. Prepare Business Unit descriptions for inclusion on the CoGB website.
Increased and sustained economic development in the region. An organisation resilient to change. Maintenance of strong internal feedback and promotion of continual improvement.
MEDIUM MEDIUM MEDIUM
Ongoing Short Ongoing
51
Clear and transparent organisation performance and a high performance culture Increased focus on customer service. Clear roles and responsibilities for resolving customer enquiries and complaints. Decreased turnaround time for high priority planning scheme amendments. Increased customer service. Internal resources made available for other tasks.
MEDIUM
Short
52
MEDIUM
Short
53
Investigate the use of the DPCD Regional and Rural Planning Flying Squad to provide resources for high priority planning scheme amendments.
MEDIUM
Immediate
Item Number 54
Recommendation Formulate a clear and transparent set of priorities for planning scheme amendments for the coming financial year for approval by Council and communicate these and the associated processes to the community. Implement a formal organisation-wide continual improvement program. Explore opportunities to create the position of an in-house Councillor Research Officer, dedicated to assisting Councillors.
Outcome Understanding of high priority planning scheme amendments. Decreased turnaround time for high priority planning scheme amendments. Alignment with Best Value Framework
Priority MEDIUM
55
MEDIUM
Short
56
Efficient and effective provision and communication of key information to Councillors. Reduced need for Councillors to approach CoGB staff for specific information. Councillors able to allocate more time to strategic activities.
MEDIUM
Immediate
57
Review CoGBs policies and training relating to bullying, discrimination and harassment prevention, and how individual training needs are assessed and align to performance and development goals. Reiterate the process for Councillors obtaining information, providing guidance on what is considered reasonable in relation to the matter under consideration. Create an Economic Development Unit template document to produce generically branded reports with similar content and structure. Facilitate strategic roundtable discussions with key stakeholders on a regular basis. Identify and regularly maintain a comprehensive and representative cross-section stakeholder register. Establish an appropriate framework to communicate all events to local business, to provide more time for them to gear up for the opportunities associated with the event. Promote clustering of local businesses into hubs to develop new opportunities as a low cost solution. Facilitate local business opportunities in alternative energy, industrial waste, digital/advanced manufacturing, micro businesses and greater share of professional services spend. Improve use of Australian Business Registry information and demographic profiling products to capitalise on market intelligence.
More formalised and robust assessment and training in these areas will provide CoGB Councillors and staff with a better understanding of workplace expectations. Greater respect and understanding of each others roles and responsibilities by CoGB Councillors and staff. Consistent reporting structure Increased efficiency and transparency. Continued improvement of external stakeholder relationships and satisfaction levels. Streamlined processes around engagement and the identification of key contacts. Increased engagement with the local business community. Increased economic activity in the region. Increased and sustained economic development in the region. Increased and sustained economic development in the region.
MEDIUM
Medium
58
MEDIUM
Immediate
59
LOW
Short
60
LOW
Ongoing
61
LOW
Ongoing
62
LOW
Short
63
LOW
Ongoing
64
LOW
Ongoing
65
Increased and sustained economic development in the region.
LOW
Ongoing
Item Number 66 67
Recommendation Improved use of Economic Development Australia membership to enhance benchmarking efforts and strategic planning. Develop and facilitate a formal mentoring program for newly elected Councillors that will provide them with guidance from experienced Councillors in Bendigo and/or other councils across the state. Consolidate the Bendigo and Heathcote Customer Support phone systems. Investigate the implementation of a new Asset Management System.
Outcome Increased and sustained economic development in the region. A formal framework in place to support new Councillors in his/her transition into his/her role. Increased focus on customer service.
Priority LOW LOW
Time frame Ongoing Ongoing
68
LOW
Long
69
Improved efficiency in asset management across the organisation
LOW
Long
Appendices
A1 Stakeholder list
No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Stakeholder Bendigo and Adelaide Bank Bendigo Business Council La Trobe University Bendigo Advertiser Victoria Police Bendigo Health Group DPCD / Regional Development Victoria Rural Financial Counselling Service Damian Drum (State MP for Northern Victoria) Bendigo Traders Association VicRoads Bendigo Community Health Service Young Professionals Network Esmae Turner Dja Dja Wurrung Hon Maree Edwards MP (State MP for Bendigo West) Bendigo Chinese Association Bendigo Historical Society Monsignor Frank Marriott Bendigo Senior Secondary College St. Lukes Anglicare Bendigo Weekly Amicus Gay and Lesbian Film Festival

Representation Business Business Education Media Community Community Welfare Government / Community Rural Community / Business Government / Community Business/Community Government Community Welfare Young people Senior Citizens Indigenous Community Government / Community Chinese Community Community Community Youth / Education Community Media Community / Employment LGBT Community
A2 Submissions record
No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32
Issues Golden Square Pool YMCA Leisure Centre, Kangaroo Flat Verbal submission Office accommodation Speed limits/colourful signs Neglect of growth areas for CBD Art Gallery The Review, people behind the review and the media Promotion of submissions Submission - part 2 - six areas of the review and other Submission Part 1 - Background reference, Documents with improvements, ideas Economic Development, Research officers to assist Councillors with the Review Small town case studies, Performing Arts Centre, Enterprise Geelong, Mayor & Councillors The Mall, the Art Gallery, The Bendigo Gaol Development, Parking, Council Management Assistance from Council, Bendigo Tourism, Partnership with Council, Capital Works, Economic Development Priorities for Council works Marong Community Plan, Marong Strategic Plan, Cable Reel Company, Planning staff, Roads & rates, Capital works priorities Excessive annual rate increases Neighbourhood Houses Community development, container deposit scheme, student accommodation scheme, food industry incubator, hemp industry bio-containers Bendigo Campus, Bendigo an education city, Partnerships & Engagement, Initiatives & Opportunities, Campus Infrastructure needs Increased efficiency public space design, Quality of service, Management and staffing, Prioritising capital & major works Sustainable Building Policies Cross department integration, Inventor Awards, Community Engagement, Environmental upgrade change Changing role of Local Government, Demanding role of a Councillor, Importance of the Council Plan, and prioritising Promotion & Success of Achievements Prioritising capital and major works, Economic development Role of the unit, Challenges Funding the 'arts', Statutory planning, Cost-shifting to Local Government, Waste management Bendigo Aerodrome Six areas of the review Role of Local Government, Decision making, Service delivery, Technology, IT Software plan, Web strategy, IT strategic plan, Shared service business case, presentation Rates, staffing, Environmental policy
No. 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53
Issues Get Entrepreneurial, 21st Century engagement, Council income increase rates, Expenditure on landfill, Prioritising capital works, Bust silos Economic development Bendigo Aerodrome Ban smoking in public places CEO reappointment Cultural diversity Disability services Rates and charges Coordination of Australia Day events Rail and transport Planning process Waste disposal Staffing levels, classifications, review of duties of managers, remuneration, Council initiatives, targets, aims, objectives, Business case submissions Organisation structure, staffing, finances, Project Management Charge for overdue rates City planning/lack of implementation, cycling for transportation, Road transport strategy, Big ticket items, Child friendly city, Benchmarking Safer crossing in View Street, Parking, Childcare, Events, Children's Parks, Eaglehawk Town Hall, Recycling Economic Development Unit Vehicles, qualifications of staff, cost savings, tendering work, rezoning of land Cycling centre of Victoria, economic benefit, healthy living lifestyle, reduction in vehicle traffic Request system, Statutory planning, Airport, Lobbying with elected members, Business cases, Workloads, Priorities, Public involvement/ownership, Media, Workplace, Waste, Transport system/regional hub, Aged & Children's services, Credit cards, Councillors' allowances Vehicle access off Porter Drive 6 areas of the review, Governance, Regional role of Greater Bendigo, General comments, Improvements Verbal submission only Bendigo Tourism Free wireless internet Differential rates, Actual rates, Diversification of income, Capital expenditure, Special expenditure, 6 Areas of the Review Economic development Achievements and challenges of the unit Costs associated with use of the Bendigo Exhibition Centre Further submission: need to look outside Local Government for benchmarking Further submission: concern over workstreams
54 55 56 57 58 59 60 61 62 63 64
No. 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103
Issues Six areas of the review with an emphasis on town planning Directors' salary packages Organisation structure Home and Community Care Disability respite care All six review areas Staffing levels, motor vehicles, BenCon, Superannuation, Finances Staffing, Council decision-making, rates rises Planning application and decision process Bendigo Inventor Awards Councillor media comments; mutual respect and common goals Disability access to Council buildings Expenditure on CBD -vs- outlying areas Connections between State/Regional /Local economic development initiatives Approach of staff dealing with planning enforcement - Cable Reel Company, gravel roads & drains Role of the Directorate, Opportunities for improvement Proposed supermarket development: Heathcote and treatment by Council Pay & conditions, Counter roster, car systems HR issues Efficiency Workload for the review, issues for Workstreams 1-4 Systems, structure, resources, staffing Contract and project coordination Pay and conditions Expenditure and staff levels Innovative strategies in management, staffing and structure Mismanagement, lack of lawful implementation of Legislation, lack of transparent process for review of decisions Role of the Directorate, achievements, suggested improvements Statutory planning Verbal submission only Bendigo Airport upgrade Golden Square Pool Greater Bendigo leadership role in the region Staffing rationalisation Emergency management, fire management Verbal submission only Bendigo Airport Business Park (submission to come) - not received Inadequate, confusing consultation
No. 104
Issues All 6 areas of the review, case histories, car parking, industrial land, gaol/theatre, Rosalind Park master plan, traffic by-pass routes, aerodrome, Bendigo exhibition centre, former Advertiser building, Local Law No.8, motor vehicles, transport officer, sponsoring political debate, street works, waste management, street trees, attention to detail, thematic environmental history, Fortuna, Council meetings & agendas Staff, capital works, services, waste disposal, Economic Development, consultants, savings, Council performance, borrowings Loddon Murray Community Leadership Program Consultation process, waste of residents' money, rubbish disposal Management, staffing and structure Aboriginal and culturally diverse populations Hard waste collection, bus shelters, signage Staffing levels and structures, position embellishing, City Futures Directorate, credit cards, expenditure/accounts, bonuses Residential Strategy: Marong and Strathfieldsaye, frustration with budget & council plan, CVIP, Bendigo Easter Fair, Staff levels in Active & Healthy Communities, Community Partnerships, Community Services & Tourism, Priorities for Council Plan and Government wish list Role of the Directorate, new structure, what works well, six areas of the review, opportunities One administration building Centralise purchasing, salary & wages review, catering, greater accountability, employees vs contractors, Councillors' consistency, multiple facilities, information technology Children Services Review Mayor and Councillor allowances, number of Councillors, income & Expenditure, quality of services, capital & major projects, Marong Business Park, Food Precinct Planning Communications, Community engagement, Good governance Community partnerships, Coucillor/staff relationships, Vision super Council efficiencies Planning delegation CEO contract renewal, Councillor respect/authority Risk management, systems, performance objectives, communication re events Inventor Awards - non local encouragement EDU/tourism, Accommodation, Major events Planning/Mediation/VCAT HR matters, vehicles, poor use of funds, etc
105 106 107 108 109 110 111 112
113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129
Aurecon Australia Pty Ltd ABN 54 005 139 873 Aurecon Centre Level 8, 850 Collins Street Docklands VIC 3008 PO Box 23061 Docklands VIC 8012 Australia T +61 3 9975 3000 F +61 3 9975 3444 E melbourne@aurecongroup.com W aurecongroup.com
Aurecon offices are located in:

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Independent Review of the City of Greater Bendigo Final Recommendations Report

Document Control Record

Final Recommendations Report

City of Greater Bendigo

Katie Kandelaars Senior Research Analyst

Kate Wickett Associate

Project 235138 File Final Recommendations Report.docx 28 June 2013 Revision 3

5.4 5.5 5.6 5.7 5.8

Case Study Introduction

10. Golden Square Pool 11. Edward Street Car Park

Project 235138 File Final Recommendations Report.docx 28 June 2013 Revision 3

102 106 114

Project 235138 File Final Recommendations Report.docx 28 June 2013 Revision 3

Figure 58 | Option 3 construction staging Figure 59 | Hierarchy of policy context

96 107 109 109

Project 235138 File Final Recommendations Report.docx 28 June 2013 Revision 3

LGPro LGV Manager

Council Councillors Director

Structure of the Final Recommendations Report

The challenge to Local Government

The genesis of the Independent Review

The key questions

The Review process

Limitations of the Review

Restructure of the unit in a timely and cost effective manner.

A closing observation by the Review team

Greater Bendigo City Council Independent Review Committee Terms of Reference

Collection and synthesis of data

Successful Independent Review Report

Key Area 1: Key Area 2:

Key Area 3: Key Area 4:

Prioritising Capital and Major works

Councils communication and community engagement strategies

Continual monitoring/recording of electronic and hard copy documentation as required

2.6 Important things you should know about this Report

Introduction and approach

Induction process of new Councillors

Council Vision and direction

Highly motivated Significant time commitment Community minded

Role of Council and CoGB

Bendigos role as a Regional City

Communication within CoGB

CoGB Communications team

CoGB and the media

Figure 4 | Media outlets in Bendigo

Communicating core services vs. major projects

Council Vision and direction

Place based plans

Figure 5 | CoGB strategic planning hierarchy

Introduction and approach

The role of Local Government

Objectives of Local Government

Social and economic viability Environmental sustainability

Efficient and effective use of resources Accessible and equitable services

Quality of life of local residents Transparency in decision making

Figure 6 | Council considerations within the decision making process

Victorian Government 1989, Local Government Act, Melbourne.

Role of the Mayor

Figure 7 | Local Government Representative Bodies

Mayor Councillors CEO Organisation

Role of the CEO

Role of the Organisation

Structure and relationships