Local Government Authority Sustainability Model
The Western Australian Treasury Corporation (WATC) has developed a Local Government Authority Sustainability Model (Model) to help local governments (LGs) evaluate their solvency and sustainability.
The financial Model provides LGs with the ability to assess how adjustments to the following might impact their financial position over a future 10-year period
- current rating structures;
- usage of reserves; and
- planned capital expenditure programs.
The Model takes the long-term financial plan (LTFP) and actual financial data of a local government – provided to WATC as part of regular accounting and reporting – as a starting point to provide a 10-year forecast of financial performance.
The Model then provides the Local Government Authority (LGA) with the capability to adjust key financial “levers” and consider a range of scenarios, in order to assess long term outcomes, solvency and sustainability.
Three elements combine to gauge the effective financial sustainability of an LGA:
A central tenant for an LGA’s long term sustainability is the need to ensure that:
- Cash inflows (primarily supported by property rates income) are sufficient to fund operating expenses, capital expenditure programs and scheduled debt service obligations; and
- Its planned capital expenditure is adequate to fund the scheduled renewal of its asset base (for which depreciation can be used as a proxy).
For more information download the PowerPoint on the Local Government Authority Sustainability Model.
Register to participate
Local governments (LGs) are invited to register to participate in the Western Australian Treasury Corporation (WATC) Local Government Authority Sustainability Model.
LGs can register to participate by contacting:
Senior Project Officer
Department of Local Government Sport and Cultural Industries
Phone: (08) 6552 1422
Local governments are requested to express their interest in participating in the model by Friday, 21 July 2020 to allow support resources to be effectively allocated.
Enquiries or for more information on the Local Government Authority Sustainability Model contact:
Director Strategic Coordination and Delivery
Planning and Service Delivery
Phone: (08) 9492 9752