Combined tender to save rate-payers millions

WHEN a number of local councils sought to save ratepayers money, they targeted an insurance tender to deliver results.

Kyogle Shire Council is part of a multi-council tender to save money for rate-payers. Picture: DAVID NIELSEN

SEVERAL innovative councils on the Northern Rivers have banded together to save ratepayers money through a joint tender for their insurance.

These councils are a group of ten across the state and have decided to reduce their overall insurance contributions by between 30% to 60%, saving approximately $3.3 million per annum.

This is estimated to bring a whopping $9.9 million in savings over a three year period, enabling ratepayer funds to be redirected to essential community projects.

Some of the local councils involved had not gone to tender on insurance for over 20 years, despite the fact that insurance premiums account for such a major component of local government operating budgets.

Kyogle Council's general manager Graham Kennett said they would benefit from saving more than $150,000 a year from July 1, 2017, when the tender took effect.

"Essentially we chose to go to a competitive tendering process to make sure we were getting value for money out of the mutual fund we were in with Jardine, Lloyd & Thompson,” he said.

"The tender process was about testing the market.”

Mr Kennett said Kyogle Council went to tender on the same service levels provided.

"We went through the tender process with another nine councils, including Richmond Valley to give some economies of scale,” he said.

Richmond Valley Council general manager, Vaughan Macdonald, said they have accrued between 40% and 50% in savings through the insurance tender.

"This adds up to approximately $300,000 per annum,” he said.

"One of our focuses is on saving money to get the most out of ratepayer dollar.”

Mr Macdonald said the substantial savings would be put towards other important projects and the delivery of vital services.

"We looked at our insurance as it is a significant amount, it approaches $1 million annually,” he said.

"Obviously council have a lot of assets and risks and identified insurance as an area where the market could be be tested.”

Mr Macdonald said Richmond Valley Council would be putting the savings to good use.

"We have a number of significant community projects such as the Casino Drill Hall and the Woodburn Riverside Precinct for example, so the savings will go into these sorts of projects as well as fixing and maintaining roads.”

Mr Macdonald said a competitive approach is simply good governance and reflects the need for many councils to become more commercial in the management of their financial resources.

Lismore City Council said of their 11 different insurance covers, public liability / professional indemnity is their most costly and comprehensive.

They said they have no plans to go out to tender as they are satisfied with the cover and cost from State Wide Mutual, Australia's largest local government self-insurance pool.

The 10 NSW Councils

Broken Hill City Council

Glen Innes Severn Council

Griffith City Council

Kyogle Council

Leeton Shire Council

Mid-Western Regional Council

Narrandera Shire Council

Parkes Shire Council

Richmond Valley Council

Tamworth Regional Council