Annual report 2010 - 2011, Northern Territory Grants Commission
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Annual Report N O R TH ER N TER R ITO R Y G R A N TS CO M M ISSIO N 15 METHODOLOGY Previous reports have documented the methodology review in detail since its implementation in 2005-06. That review, now completed, highlighted the need for a regular process of continual improvement to further refine the revenue and expenditure categories and appropriate cost adjustors. A key outcome of the review was that the Commission determined that the cost adjustors of location, dispersion and Aboriginality are used, and appropriate data collection processes be implemented to ensure the adjustors can be explained and supported by meaningful and relevant information. These new cost adjustors were used for both the 2008-09 and 2009-10 allocations. During 2010-11, the Commission undertook further research into the possible refinement of the methodology in the following areas: Review of the location factor - With the revised location factor now being determined on the freight delivery costs of diesel (as provided by the PowerWater Corporation) to the majority of the remote communities within the Northern Territory, the Commissions attention turned to whether a further determinant for this factor should be explored. Some work commenced during 2010-11 around the types and standard of access to these communities with a view that this also significantly impacts on the service delivery costs of shire councils, particularly where the shires incorporate remote island communities. This work will be continued during 2011-12 and may see a further modified location factor adopted for the calculation of the 2012-13 general purpose and possibly road grants. Regional centre recognition - Over many years this Commission (and other Grants Commissions in Australia) have grappled with the concept of regional centre status and how it impacts on the expenditures and revenues of the relevant local government council. These deliberations were made with a view to determining whether a particular council should be financially compensated for being a regional centre where a number of its services are utilised by non-rate paying clientele. After extensive modelling, mainly around varying population numbers for katherine and Alice Springs, in line with extended visitation numbers, the Commission decided it was not possible to financially compensate councils affected by this population migration within the current methodology. The Commission did, however, develop a discussion paper for the consideration of the Northern Territory Minister for Local Government encouraging her to consider diverting funding from an appropriate local government funding program to these two councils in recognition of the cost imposts for such non-resident usage of council facilities and services. The Department of Housing, Local Government and Regional Services is now examining whether there could be another way of recognising the load on these councils through such a mechanism, particularly as it is believed that the majority of the visitors significantly impacting on service delivery costs are residents of the surrounding shires. Looking to the future, the Grants Commission has on its agenda a comprehensive review of its road funding methodology that has remained largely unchanged since the implementation of the direct roads funding arrangement in 1994-95. The trigger for the reviews commencement will be the successful negotiation of the transfer of approximately 6500 kilometres of roads, currently maintained by the Northern Territory Government, to the respective shire councils. NATIONAL CONFERENCE OF THE LOCAL GOVERNMENT GRANTS COMMISSIONS The National Conference of Local Government Grants Commissions was held at the Hotel Windsor in Melbourne, Victoria, from 12-14 October 2010. The conference covered financial assistance 35 years on, population growth and movement, livability, the role of councils and bushfire response and recovery. Papers were presented by Mr Robert Searle, former Secretary, Commonwealth Grants Commission; Professor Graeme Sansom, Director, Australian Centre of Excellence for Local Government: Ms kay Rundle, Chief Executive Officer, Port Phillip City Council; Ms Ruth Spielman, Executive Officer, National Growth Areas Alliance; Dr Bob Birrell, Centre for Population and urban Research; Mr Ben Hubbard, Chief Executive Officer, Victorian Bushfire Reconstruction and Recovery Authority; Mr Glenn Patterson, Chief Executive Officer, Yarra Ranges Shire Council; and Professor John McAneney, Director of Risk Frontiers. Delegates and partners were also invited to the official conference dinner in the Grand Ballroom at the Hotel Windsor.
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