Q. What does "unsustainable" mean for the future of the council?
In 2008, Professor Percy Allan calculated that some 23% of our City's infrastructure ($148 million worth) had reached the point where it needed major reconstruction or replacement.
He also predicted that this percentage would continue to increase over the years if we continued to under-invest in maintenance. The figure has now grown to about $170 million worth of infrastrcuture and we are starting to see major examples of what Professor Allan predicted - such as the recent problems with Marlee and Duffs bridges.
If nothing changes, then in 20 years time our infrastructure backlog will have grown to $422 million and 70% of infrastructure will be at a point where it needs major repair or replacement.
This essetnially means that most of our communities will be isolated - the roads and critical bridges that link these communities will be gone. We won't be able to get supplies delivered to our supermarkets, collect produce from our farms, or get the kids to school on the bus.
At 70% infrastructure failure, our valley would come to a standstill.
Financially unsustainable
Professor Allan also found that Council was not financially sustainable if it continued at its current level of income.
Council has since undertaken more detailed financial modelling and believes that the "crunch time" will arrive even sooner than Professor Allan predicted.
At present, Council just manages to cover its bills and is struggling to keep pace with rising costs. Each year, the rate peg limits rate increases to a maximum of about 3.5%. However, the actual cost of running a local council and carrying out major infrastructure works increases by more than 3.5% per year.
Australian Bureau of Statistics figures for local government indicate that the real annual increase in day-to-day operational costs for councils is 4.4% and the real annual increase in capital costs is 5.5%.
So the amount we collect in rates each year does not keep pace with the amount it costs for services and road works council provides.
Q. Why can't Council just be more efficient?
Like most households, Council can help to bridge the gap by reducing its spending and trying to make savings. But there is only so much that can be done before this starts to impact on services.
The current state of our infrastructure is a direct result of cost cutting and underspending over the years. Further reductions would speed up the rate at which our roads and brdges will utlimately fail.
Many people say that Council should "just be more efficient" and save money. While it's true that all organisations can become more efficient, these savings alone will not be enough.
For example, Council currently collects some $20 million in rates, per year. It needs to spend all of that money on infrastructure maintenance, just to stop the problem getting worse - that doesn't include rebuilding the roads and bridges on the critical list, or providing services such as libraries, health inspections and building assessment.
GTCC already running lean
Although Council can become more efficient and is working towards that end, there will still never be enough to go around when it comes to addressing our infrastructure backlog. As a follow-on from Professor Allan's review of its financial situation, Council also commissioned a Corporate Overheads Study from an independent assessor. This study was designed to show if Council was over-staffed compared to industry standards. The study showed that GTCC is currently running leaner than similar sized councils.
This doesn't mean that there aren't savings to be made through improving work practices, but it does give us an indication that the potential savings available through this will not be sufficient to make a dent in our infrastructure backlog.
Organisation review and restructure
As part of its move towards greater efficiency, Council has recently started a comprehensive review and restructure of the organisation.Part of this work will be a full review of the services it offers and the assets it currently maintains. The review will identify any potential savings that could be made through changing service delivery arrangements or rationalising assets.
Although there are savings to be made trhough "working harder and smarter" at the end of the day, the equation is fairly simple: Council needs to increase its income if it is going to increase the amount of resources it can devote to fixing our infrastructure. Otherwise, the state of our roads and bridges will continue to decline.
Q. How do our Council's rates compare to other Councils?
Compared to other regional councils, GTCC's average residential rates are 17% lower and commercial rates are 18% lower.
Residential rates of Mid North Coast Councils (taken from the Department of Local Government's figures for 2007-08 rates):
Port Macquarie - $750
Kempsey - $581
Greater Taree - $606
Great Lakes - $774
Coffs Harbour - $669
Clarence - $685
Q. How did the infrastructure problem develop?
The Manning Valley has a large amount of infrastructure per head of population. This is because of the fragmented nature of settlement in our area, with two major centres, three smaller urban centres and numerous villages. Our current network represents an investment of $15,300 worth of infrastructure for every man, woman and child in our city. "Infrastructure" includes things such as roads, bridges, parks and sports fields, stormwater drains, kerb and gutter, footpaths and buildings.
A 50 year problem
Professor Percy Allan in his report on Council's sustainability found that, while all councils in Australia were suffering form failing infrastructure, Greater Taree had one of the most serious problems in the State.
It's a problem that has grown over more than 50 years and there are a number of reasons for it.
One of these is the large amount of infrastructure our council "inherited" when it was amalgamated in 1981. before that, the area was governed by three local councils, as well as a county council. With the formation of Greater Taree, all the infrastructure was transferred to the new council's care. This included a series of bridges that were already some 80 years old. Council also took on the operation of the airport, which was previously run by the county council. At the time of the transfer, the airport received Federal monies towards its operation. However, this scheme was later abolished by the government.
Other reasons for the infrastructure problem developing:
State cost shifting of services onto local councils
Constraints on Council's ability to raise revenue through rate pegging
A reduction in State and Federal Government funding
No adequate whole of life costings for infrastructure
Q. Why didn't Council spend the Federal Government's infrastructure funding on roads and bridges?
Unfortunately, the criteria of the Federal Government's Community Infrastructure Program - both rounds, including the strategic project round, did not permit expenditure on roads and bridges.
Council did, however, submit an application for rebuilding the Taree Regional Airport runway, and Council was informed that this project did not meet the criteria. A different strategic project was then submitted - the upgrade of the Taree Regional Recreation Centre and this was successfully funded with $2.47 million towards the $2.96 million upgrade.
Q. Why doesn't Council amalgamate with surrounding councils and wouldn't that be more efficient?
As outlined in Professor Allan's Report, Greater Taree City Council's sustainability issues are strongly related to the vast area it has to maintain, e.g the size of the road network and the population ratio to the size (3752 sq km:47,000).
Professor Allan in his report refers to the "large infrastructure stock relative to population - $15,300 of roads and other assets per resident."
To amalgamate with other surrounding councils (who also have infrastructure backlogs) would not fix the infrastructure backlog levels and more than likely would exacerbate the problem by creating a much larger area to service.
Q. Why doesn't Council build better roads and bridges that will last longer?
Council currently maintains 742km of sealed roads, 950km of unsealed roads, 105 timber bridges, 114 concrete bridges, 9 sporting complexes, 6 swimming pools, 5 libraries and 1 regional airport.
As a city, we've also tried to spread the dollars too thinly, particularly our roadworks. The result has been poorer quality roads that don't stand the test of elements. But, because we don't have enough money to rebuild the roads, we have to keep patching them up as best we can.
What it costs to build a road
To reconstruct an existing rural two lane road (2 coat bitumen seal) - $500,000 per km
To reconstruct an existing urban two lane road (hotmix seal) - $1 million per km
To construct a new four lane divided hgihway (concrete) - $10 million per km
These figures are based on average weather, labour, materials supply, equipment and services adjustments.