Councillor Fay Hull was elected to the Rural City of Ararat Council in 2012, after having previously been a councillor between 2002 and 2008. Fay says that demystifying the budget requires you to draw on your own experiences with budgeting and be prepared to learn more.
“Getting a handle on council finances is not difficult. There are some similarities to your household budget, but the scale is much larger.
It’s really important to get your head around the financial issues – and management of multi-million budgets. Although I knew a lot about Community Services, I threw myself on the Audit Committee to grapple with different issues.
Budgeting begins at planning phase, before you start thinking about dollars. Councillors and senior staff develop a vision with the community for the municipality to achieve the optimum level of affordable services, infrastructure maintenance and development, and community initiatives for the coming years. From this process comes the Council Plan, which goes alongside the other important plans which guide the budget priorities – community plans and land use plans. These plans are the basis for all of council activities. The budget is then developed and, like all budgets, grand plans are limited to available income.
Management provides regular reports to council, detailing how the Plan objectives are being met. The financial report is one of the most important reports you will receive; take time to understand it. If you need clarification, ask management for help.
Check that incoming revenue is on target and understand fluctuations – council revenue is not a regular monthly amount, grants come in at different times of the year and rates are collected at different times. Like revenue, council expenditure also fluctuates due to major purchases or projects. If you have revenue-producing activities, check income against expenditure and the level to which council subsidises or doesn’t subsidise the activity. This knowledge is important for future planning and budgetary decisions.
Consider sitting in on the council Audit Committee meetings to help you understand the budgeting process better.”