The Standing Committee on Local Government Financial Management is working with a number of Victorian Councils to develop capital evaluation guidelines for use by Councils for assessment of capital projects.
The capital evaluation project will have a number of key outputs.
- Investment evaluation guidelines which will assist Councils to develop business cases for their proposed capital works projects.
- Design and delivery of a training program to assist Councils in applying the guidelines and using the manual.
- Design and delivery of a training program.
Consultants Coopers & Lybrand have been selected by the Standing Committee to develop the investment guidelines and capital rationing model. The project is being managed by a steering committee comprising representatives from IMM, IMEA and Municipal Valuers Group together with officers from the Office of Local Government and Treasury and Finance. It is chaired by Geoff Barrow from Hobsons Bay City Council.
According to Geoff Barrow the guidelines and software will give Councils the techniques, procedures and skills to vigorously analyse and prioritise their proposed capital works projects.
“While the project is a Victorian Local Government initiative, the guidelines and software will have broad applicability for Councils throughout Australia,” he said.
The consultants have developed a first draft of the evaluation guidelines and software which are being trialed by four Councils at Knox, Mornington, Moira and Hobsons Bay. The pilot Councils are trialing the software on a range of capital works projects.
The manual, which is being developed as part of the package, will cover issues such as capital budgeting within the Local Government planning cycle, business case preparation, preliminary evaluation of projects, investment evaluation, project ranking and post implementation reviews.
Geoff Barrow said that a key feature of the guidelines and software was the relationship of projects to Council’s Corporate Plan and consideration of qualitative factors in project assessment, such as environmental, social, economic and cultural impacts, as well as financial analysis.
“For too long Councils have been limited in their ability to assess qualitative factors in evaluating the merits of projects. It has always been difficult to compare a road project with a community centre or a recreation project,” he said.
A package comprising a manual, standard project sheets, software and training will be available for purchase through the IMM in August.
For further information contact Geoff Barrow, telephone (03) 9316 1420.
