Local Government Finance Forum LG fin’ 05 November 16 th 2005

1. Local Government Finance ForumLGfin’05November 16th 2005 Larry. N. Mitchell Finance & Policy Analyst(Local Government) ©Larry Mitchell 2005

2. Agenda • ‘Financial’ involvement in the LTCCP?(a poll) • Research paper … data requirements • A little bit of history • A case study for setting financial targets • A case study for monitoring outcomes • Future developments.

3. Women are from Venus …but are the LTCCP planners ‘of this world’? • The Community Plan conference - are we on the same planet? Have we left the planners a vacuum?

4. Financial involvement in the LTCCP (a poll) • Are Accountants really involved? Are they interested or have they been outflanked? • Evidence from Council’s surveyed …less than 1 in 5 (20%) have the Finance second tier ‘Director’ leading the LTCCP team • The place of the LTFS its prime purpose(s)

5. It all comes down to the $$$’s ‘We hope to achieve improvements to all well-being outcomes’

6. What is the purpose? • All of this (LTCCP) effort must (one hopes) be both pre-meditated and done for a reason …economic gains firstly • A research paper -Some 'first principles' relating to the nature, extent and quality of the Long-Term Council Community Plan, (ltccp) data … a forerunner to an Audit Guideline? www.kauriglen.co.nz/larry/marketing/LTCCPdataFirstPrinciples.doc

7. What is the purpose? • OAG’s LTCCP audit a ‘self assessment and compliance approach’ which is not very helpful for achieving ‘results’ … • So what do Councils really want? … and • Who is to lead? • Are we going to get social engineering or economic rewards? • How will we know?

8. What is the purpose? • The 80:20 rule, Council’s level of discretionary expenditures • Socio economic goals yes …but social engineering? … I think not. • The pivotal role of the AMP’s and the LTFS as the basic framework for the LTCCP • If we want improvements over all QBL outcomes • It all gets back to the $$$’s in the end …

9. Research paper LTCCP data requirements • LTCCP data requirements …why these need to be specified and are important • High expectations but nominal and sensible ones based on acquiring ‘data fit for the LTCCP purpose’ • An audit compliance ‘tick’ objective … or ‘meaningful and useful’ information serving Council and Community decision making?

10. The DIA do it … three cheers!

11. A little bit of history • Missing in action … the OAG, LGNZ and others? • DIA… excellent information …as far as it goes. • StatsNZ help the DIA but … • LTCCP needs not addressed by DIA and • No comparative sense …done deliberately • No sense of goal setting

12. A little bit of history • Other agencies …disappointing? • The OAG have not delivered • Other agencies have cooperated well but LGNZ and SOLGM have not assisted the sector in ‘performance’ and data terms • Regional Council groupings have shared outcomes and some shared data • The 80:20 rule applies to social indices

13. Why Comparative analysis? • The benchmarking alternative does not work • There is no better available option than some form of comparative analysis • Targets and Outcomes cannot be set in a vacuum • There is a need to ‘locate’ every Council’s present and planned positions using past results, desired results and achieved results whilst employing appropriate target setting, monitoring and reporting tools • Examples …

14. Two case studies… for setting financial and economic targets • Data Mining and • Monitoring Outcomes

15. First case study… Data Mining data

16. First case study… Data Mining report

17. Second case study… monitoring outcomes

18. Second case study… monitoring outcomes

19. Second case study… monitoring outcomes

20. Second case study… monitoring outcomes the ‘Outcomes-Results’

21. Future developments • Put yourself in the 2009 position or later • Ask the ‘thermos flask’ question… How will we know? … results • The actual results at an Outcomes level of Outcomes that directly affect Economic Well Being (including Financial Outcomes and Ability to Pay) including … • Why did this we get these results? • What were the influences over these results? • Were the results satisfactory or not? • Comparative assessments • Where do responsibilities lie for the results?

22. Where to now? • If you are on road without a map you are either lost, anywhere, nowhere and all of the above • Consider the need for targeting, monitoring, measurement and reporting tools • Consider the need for appropriate measurement tools.

23. A roadmap … or the bush • ‘If the Outcomes planned and hoped for do not eventuate (or are exceeded)… • Was this because the target needs adjusting or not? … comparisons at work • What were the major influences that produced this result? …and were these … • Due to a worse (or better) performance of NZ Inc or of our District …which one? and by how much?

24. A roadmap … or the bush … an example Our local District economy as measured in terms of local Incomes, the local Economy and its Wealth base has grown by say 10% over the three years to 2009 whilst NZ Inc and other similar Councils have grown by only say 6% … what has this been due to?, was it a result that we can take (some) credit for?, and to what degree do we now modify our 2009-2019 LTCCP Outcomes? Go figure.

25. And now for ….

26. PO Box, Puhoi, Auckland, NZ Ph: 09 422 0598 Fax: 09 422 0700 Mobile: 027 479 2328 All phones: 0800 784 648 Email: larry@kauriglen.co.nz Website: www.kauriglen.co.nz/larry Larry Mitchell is a Finance & Policy Analyst working with Local Government. His products include‘Base Stats with Trendz’reports, which now include‘Outcomes-Results’and‘Data Mining’benchmarks.