How is Council achieving its efficiency savings
We are on track to realising a $10 million efficiency target during the next four years. Since February this year, we have saved $3.2 million in our general account (general fund) by taking a range of measures to increase income and reduce expenses. Of this amount, $2.5 million is recurring income or cuts to our expenses that will provide ongoing savings.
To date, these efficiencies have been achieved by reduction in events support, increase in fees and charges, changes to operating hours of services and facilities and sale of plant and fleet equipment.
- Reducing costs – plant and fleet
So far, $500,000 (of this $330,000 is general fund and $170,000 is Shoalhaven Water) has been received from plant and fleet auction sales, over and above the normal volume of plant and fleet auction sales received in a quarter. The sale of these under-utilised plant and fleet assets is expected to also reduce the annual operating costs by $200,000, and the actual saving will be reported in the next productivity and efficiency report.
- Changes to operating hours
The operating hours of more than 20 facilities and services in the Shoalhaven are reducing as part of the ongoing work to address Council’s financial position in the immediate and long term. The review of operating hours initially considered changes that would have resulted in operational savings of $1 million per annum, however some changes were not approved due to the adverse local community impact.
The approved changes will result in operational savings of $479,900 per annum.
- Reducing costs – other efficiency ideas
Council staff have implemented changes based on ideas developed by workers as part of the 3% Challenge. Across the organisation, a total of 442 ideas have been submitted to date and their implementation has resulted in operational savings of $822,934.
- Revenue generation
In the 2024-25 budget, the fees and charges were increased by 7.5% to support the organisation’s financial sustainability objective. During the last 5 years on average, Council has increased fees and charges between 4% and 5%. The net gain for general fund as a result of the additional 2.5% increase is $1.3 million. The 2024-25 additional fees and charges increase for Shoalhaven Water across water and sewer funds in 2024-25 is $12.2 million.
The 3% challenge is also identifying revenue generation opportunities and has so far delivered an increase in expected revenue of $78,000 ($50,000 general fund and $28,000 Shoalhaven Water fund).
Other measures supporting financial sustainability journey:
- Reducing debt – land sales
The land sales program is expected to generate between $7 million and $14 million, dependent on market conditions. This income will be used to fund critical capital works and repay existing debt.
- Staff numbers
The executive reviews each vacancy and any new positions to determine if and when they are required to fulfill operational, regulatory or required service levels.
As a result of this process, there has been a 43% decrease in the positions advertised this year as compared to the same timeframe last year.
- Increased cost controls
The increased cost controls established at the start of the financial sustainability project have continued into financial year 2024-25:
No discretionary spending
No consultants or contractors unless approved by Director
No overtime or leave in lieu unless necessary (such as emergency response)
Work with teams to reduce leave balances
Manage budgets closely with no over-spends
In addition, for financial year 2024-25, there is a pause on:
Conferences and external training
Professional memberships and subscriptions
So far since 1 July, the increased cost controls have provided one-off savings of $368,975 from general fund.
- Proposed restructure
A proposed organisational restructure is underway, which would provide $1.6 million in operational savings and a reduction of 19 FTE across Council.
Full details can be seen on the Financial Sustainability Project page on Council’s website.