One of the challenges of local government is a tight budget, mixed with an ever-increasing demand for services.
Roads, parking, planning and building approvals. Sport and recreation, waste and resource recovery. They all demand a piece of the budget pie. Then there are rural councils juggling the metropolitan expectations of residents. So how do councils ensure there is no financial leakage?
Waste management consultancy Resource Hub is working with councils across Australia to improve efficiency and reduce costs, whether it be optimising opening hours, repurposing staff or investing in cost-effective technology.
Lacey Webb, Resource Hub Founder and Director, and former industry Chief Financial Officer, says proactive management to avoid financial gaps can improve decision-making and ultimately lead to better services and environmental outcomes.
“Some work we’ve been doing is really highlighting areas where money is disappearing into the ether, and it’s just from a lack of priority or a lack of focus on back-office functions. It’s the boring admin stuff,” says Lacey.
“Everybody does well to have a fresh set of eyes now and then, just to make sure things are ticking over. Because sometimes the closeness to a situation, of being constantly in it, means you can’t see the challenges directly under your nose.”
When councils overspend in key areas and are not capturing revenue within others, the thing that often goes by the wayside is investment in waste, education and circular economy outcomes, says Oscar Gallagher, Resource Hub Senior Consultant.
It’s difficult to deliver recyclable opportunities such as mattress processing or improving textile recycling when there is no spare cash flow to invest in that space.
Those cash flow difficulties can come down to a lack of understanding of processes and systems, a lack of resources, including staff shortages, and familiarity.
“It’s a challenge we’re seeing not only in local government, but also in commercial facilities, where you have long-term tenures and long-term positions and there’s a perception that things just work,” Oscar says.
“So, if they’re ‘just working’, we sometimes focus on putting out the fires without realising that the thing isn’t actually working as effectively anymore.
“There are often better quality processes and support systems available. Better tools in the market.”
Resource Hub recently undertook a business case for a Far North Queensland council. With 12 small regional transfer stations and landfills to operate, the council’s waste management department was under resourced with no budget to hire more staff.
Lacey says not investing in staff meant that the transfer stations and landfill were non-compliant, and the council wasn’t capturing data, so it couldn’t make good decisions. It was also failing to meeting its data compliance obligations.
Resource Hub worked through an audit of current opening hours, looked at how the council could redeploy staff, and the possibility of bringing in additional technology to meet its obligations, without adding another salary.
With some adjustments, the council is now meeting all its obligations for a one-off $10,000 investment instead of $90,000 annually for a salary.
“Loss area number one is often identified by asking, ‘How do we manage our opening hours?” says Lacey.
“How do we manage maximising small changes and small reviews of what we do with our equipment, our people, and our software systems to make sure that we’re getting the best bang for our buck? Often, we can take a small amount of time to reinvigorate that and save a significant amount of money.
“It’s especially important these days for councils because ratepayers want to know where their money’s going.”
She says councils are often surprised by how much opportunity is found.
Case in point. A western New South Wales council was unclear on volumes and visit numbers at its facilities because it had no data. The team wanted support to understand what systems were available and what was fit for purpose. It was also looking at a $50,000 investment in a camera system attached to a movable trailer to suit the size of their site and stockpile locations.
Following a review by Resource Hub, instead of spending $50,000, the council is now looking to invest $8000 and mount the cameras on a plinth, moving it with a forklift that it already owned.
“Their investment was reduced by $32,000 but with the same outcome,” Oscar says. “And the council is better utilising equipment it already has on the ground. It’s simple, easy and effective.”
Similarly, a metro regional fringe council wanted to outsource some work entirely. The Resource Hub team is currently managing the council’s weighbridge database and acting as a ‘call centre’ for its gatehouse team. Lacey describes it as an extra set of hands, eight hours a month, that is already delivering results. The council now has 18 months of data that’s clean and reliable, and is saving a minimum four per cent each month on waste levy returns.
“Four per cent doesn’t seem like a huge number, but when you’re paying $200,000 a month in waste levies, that’s $8000 every month back in your pocket, and the cost of our team member is less than $1100 per month,” she says.
“If you’ve got a four per cent saving every month, that might be something that could be reinvested into another program. In this council’s case, it is reinvesting in targeted training for its team.”
One of the primary functions of local government waste and resource recovery teams is managing kerbside bins. It’s also a common area of revenue loss and one that councils are increasingly addressing.
Oscar and the team have helped Wollondilly Shire Council, a large council on the south-west fringe of Greater Sydney, understand its collection services, including how much residents are being charged, how many bin services are offered, and how many collections the council is paying for.
“We are seeing more and more councils where kerbside bin collection contracts have been in place for a long time, and there can be a disconnect between where premises are and where those bins actually sit,” Oscar says. “Wollondilly has 60,000 bin services. Customers have the option of an 80-litre bin, a 120-litre bin, a 240-litre bin and a 360-litre bin in mixed waste, organics and the yellow-lidded bin. All up, there are 12 bin types that residents can have.
“Finding the time for a waste coordinator or administrator, who has 45,000 other jobs to do, to audit these systems is near impossible, or it’s just not their jam.”
Which begs the question. Why is it Resource Hub’s jam?
“Because we’re data and process geeks,” Lacey says. “All day long we look at process efficiency and good quality data for decision-making, and we ask the most important question: Why do we do that?
“Once you know the why, you ask the how and could it be more effective? That’s usually where that financial leakage occurs.
“Our company slogan is More Business, Less Waste. But a customer recently told us that we should make it Resource Up with Resource Hub. Because both are what we’re about! To help local governments get away from being reactive and start to plan, make good decisions and put programs, infrastructure, and systems in place to make sure they are delivering the service they’re meant to…with a helping hand from the data and process guru on the behind-the-scenes magic.”
For more information, visit: www.resourcehub.com.au
