LKS Quaero is offering a complete package of Council Transition Support for amalgamating NSW Councils. This is part of a series of interviews in which our transition expert team members pass on some key nuggets of advice.
Nick Tobin is an innovative and experienced General Manager with a depth of experience in senior positions in local government, excelling across property development, efficient service delivery, financial management, and stakeholder management. Nick led the delivery of one of the largest pieces of public infrastructure delivered and funded by local government: The Concourse, Chatswood’s entertainment and performing arts precinct. The unique funding model and project plan developed for the site by Nick and his team has become a leading model across local government. During Nick’s period as General Manager at Willoughby City Council, the City was awarded the A R Bluett Memorial Award, the highest accolade available to local government. Here is his advice for General Managers and CFOs of amalgamating Councils in NSW.
What are the key management challenges in upcoming amalgamations in NSW?
The biggest challenge will be putting aside previous beliefs as many GMs were clearly against amalgamations. There have been some perceived winners and losers in the process and bridges need to be built to create an inclusive environment. Interim GMs will also need to work very closely with the Administrators and the implementation committees of former elected members.
Another challenge will be keeping the public informed on what is and isn’t changing. Getting the public onside will be essential if the amalgamation is to be successful. Elections will be held in September 2017, so major changes will be difficult to implement prior to then, but there is an opportunity to develop a new Community Strategic Plan, which will be the blueprint for the new Council. It is unlikely that major asset sales and acquisitions will occur before the new Council is appointed, but an asset strategy should be developed, to be adopted by the new Council and integrated into the Long Term Financial Plan.
What are the key finance challenges in upcoming amalgamations in NSW?
The integration of multiple financial systems will be the number one priority. Early engagement with software suppliers will be essential to ensure a timely implementation of any new or larger package. Software suppliers have limited resources and will need to prioritise the work they have to do.
Amalgamations provide the opportunity for the new Councils to do away with the sacred cows: those deals, fee waivers, and so on that have been in place for many years. Whilst the rate structure of the new Councils cannot change for a number of years, a plan should be developed to ensure equity amongst ratepayers occurs in the future. This will entail reviewing minimum rates and any special rates levied.
If you were leading a NSW amalgamating Council, what would be in your 30 day “action plan” to launch the amalgamation process? What role would relationship management play in it?
- Communication communication communication: all staff are to be visited fortnightly for the first three months so that they can receive updates and be given the opportunity to question the process
- A combined senior management team with members from each legacy Council should be formed and any action plan should be distributed amongst the team
- The public relations team and any marketing staff need to be fully briefed and a set of community engagement rules needs to be established, including access to the media. This needs to be quickly disseminated to staff
- Development of a Community Strategic Plan and Operational Plan should be undertaken ASAP
- A systems review and plan needs to happen in the first 30 days to ensure that the new entity will be appropriately resourced
- Implementation teams need to be established around each plan. It is important that day to day things still occur, such as street cleaning and maintenance, so plans must not be at the expense of doing what needs to be done on a daily basis
What would be in your 30 day “finance action plan”?
- Review and create a software platform plan
- Get the issuing of rates under control with new entity stationery. Rates go out in July, so there is very little time to arrange this and every day it’s delayed costs money ie in investment income
- Develop a workplan for the completion of annual financial statements and the consolidation of these into one set of accounts. This will require a review of the accounting principles of each old entity (eg depreciation rates) and reference to the Office of Local Government’s accounting regulations
What else can GMs do right now to ensure the right choices are made for the long term? What about CFOs?
GMs should consult widely and not be set in their old ways. This is an opportunity to improve the way Councils do things and the sacred cows need to be eliminated. They should be making sure the legacy Councils are up to date and ready to work with the new entity. In particular, financials need to be completed ASAP and rates sent out soon.
CFOs can ground their organisations in financial sustainability by developing Long Term Financial Plans as soon as possible so that senior management can scenario test actions early. They can publish a set of financial goals that the new entity will strive for, for example, full cost recovery and commercial lease fees. CFOs should also make sure their own house is in order to allow a smooth consolidation of accounts and systems.
How can you help GMs and their Councils through the amalgamations?
Councils requiring assistance can utilise my skills in developing asset strategies to provide financial sustainability and can also utilise my stakeholder management skills to take new plans and policies to the community.
At LKS Quaero, we offer support to new Councils across culture and leadership, strategy development, financial analysis and advice, industrial relations, structure and recruitment. Transitioning to a new entity represents a massive opportunity. It’s a chance to re-set the vision, strategy, and culture for a new organisation. At the same time, there are pitfalls to be avoided across all areas of operations. See our Council Transition Support page for more information. If you’d like to know more, visit us at lksquaero.com or follow us on LinkedIn, Facebook, and Twitter.