Canning worst in Perth for financial health

Canning worst in Perth for financial health

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Courtesy: MyCouncil.

Updated: May 2, 3.05pm

The City of Canning had the worst financial health of any Perth metropolitan council in 2014-15 and an employee cost growth 10 per cent above the Perth average, according the new MyCouncil website.

The Financial Health Indicator measures local government financial health from seven financial ratios including its ability to fund short-term financial obligations, asset renewal and replacements.

In 2014-15 the city received a score of 48 out of 100, down from the 63 in 2013-14 and the same as the 48 it received in 2012-13.

The benchmark is 70, with the highest possible score 100.

The second worst metropolitan council for 2014-15 was the Town of Mosman Park, which scored 49, while the City of Mandurah in the Peel region performed even poorer than Canning with a score of 43.

In comparison, Canning’s neighbour Melville was the highest performing council in the state receiving a score of 99.

The City of South Perth and City of Belmont both received 97 while the City of Gosnells received 87 and the City of Cockburn 68.

The metropolitan average for the indicator for 2014-15 was 80 while the state average was 73.

Canning’s expenditure on employees has skyrocketed above the Perth average.

In 2012-13, at the height of the resources boom, the city had almost a 16 per cent growth in employee costs – well above the metropolitan area and state wide average growths of 8.5 and 9.4 per cent respectively.

In 2013-14 Canning employee costs experienced a more modest 10 per cent growth but in 2014-15 they grew by 16.8 per cent – 10 per cent above the 6.5 per cent metro average.

In comparison, the City of Melville’s employee cost growth rate has remained under seven per cent for the past four financial years while the City of Gosnells has remained under 10 per cent for the same period.

The City of Canning was also the only council with a population under 100,000 (96,000) with more than 691 full-time equivalent employees in 2014-15.

The only cities with more full time employees were the City of Stirling with 854 employees for 223,287 residents and the City of Wanneroo with 844 employees for 178,000 residents.

The City of Gosnells had 442 full-time equivalent employees for its 121,000 residents while the City of Melville had 482 for its 106,000 residents.

City of Canning chief executive Lyn Russell questioned the accuracy of the FHI because it used data from a number of financial ratios that she said did not truly reflect the city’s financial position.

“Some of these ratios do not truly take into account differing financial approaches across local governments,” she said.

“For example, the city’s score on operating surplus ratio does not take into account the city’s practice of funding current operations from prior year’s surplus or savings to minimise rate increases.

“It should be noted that the city’s financial operations are supported by a balanced budget, established cash backed reserves and the consistent delivery of budget surpluses at year end.”

She said the city continued to be one of the lowest rating local governments in Perth and was in a ‘healthy financial position’.

Ms Russell said the budget had also been adversely affected by the cost of State Government inquiries into the city and the ‘significant additional burden’ of preparing for the failed reform process.

She defended staffing levels and said other local governments had smaller staff numbers because they ‘outsourced’ services that the city delivered in-house such as care and waste services.

She said the levels were also as a result of the city’s two leisure centres, patrol and security services and four full libraries.

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MyCouncil website launches today.