Long term financial plan 2017/18 to 2026/27
E-Publications; E-Books; PublicationNT
'This Long Term Financial Plan is designed to ensure that the financial sustainability of Litchfield Council continues to improve over the next 10 Years by supporting sound financial decision making. Sustainability in the context of Litchfield means the community has well maintained facilities and infrastructure and receives good quality services at an affordable level of property rates both now and into the future. The Local Government Act requires Council to prepare and maintain a Long Term Financial Plan (LTFP). The Plan must cover a minimum period of four years however, many of the decisions that Council makes have impacts that go well beyond this time horizon. Litchfield Council has therefore developed a ten-year plan to ensure that the decisions made today are truly sustainable in the long term.' - Executive summary and Introduction; Made available via the Publications (Legal Deposit) Act 2004 (NT).
Executive summary -- Introduction -- Current financial position -- Emerging issues -- The way ahead - improving long term sustainability -- Attachments
Appropriations and expenditures; Public finance; Municipal budgets; Regional planning
16 pages : tables ; 30 cm.
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5 Depreciation is a measure of the deterioration of the Councils asset stock during the year. An Operating deficit implies that Council is not raising sufficient revenue to fund the renewal of existing assets. Litchfield is consistently running large operating deficits and the recent change to the calculation of depreciation has worsened the situation substantially. The size of the operating deficit does raise concerns about long term sustainability and the ability of Council to adequately fund the renewal of its infrastructure in the future. Current Ratio The current ratio compares current assets to current liabilities and is an indicator of Councils capacity to meet its short term financial obligations. The ratio should be greater than 1 to provide assurance that Council has sufficient funds to meet short term debts. Council has strong cash reserves and minimal short term liabilities. This is represented in the graph below which shows that Litchfield Council has current ratio in excess of 10. Debt To assess an organisations exposure to interest on debt the Interest Coverage Ratio would normally be used. Council currently has no debt and therefore no interest expense. There is a role for debt in financing large, long lasting community assets as the repayments spread the cost to ratepayers both now and in the future who will enjoy the benefits of the asset created by the debt. However, loans need to be repaid with interest and this has an impact on Councils operating result which must be funded. The debt free positon of Litchfield does provide flexibility to allow for future borrowings for critical community infrastructure. 0 2 4 6 8 10 12 14 13/14 14/15 15/16 16/17 bud 17/18 bud Financial Year Current Assets to Current Liabilities