Business Plan - Emergency Services Telecommunications Authority

34 ESTA Business Plan 2009/10
Appendix B:
ESTA 2009/10 Budget Summary
Budget Overview
ESTA’s long term objective is to maintain a sustainable financial base that ensures it has the capability to maintain staffing
and systems at a level that continues to meet required service standards.
ESTA continues to face the challenge of a significant increase in demand for services in an environment of fixed funding.
In 2008/09 ESTA in collaboration with the Department of Justice sought to address the ongoing shortfall, resulting in a
submission for ongoing funding to meet the growth in metropolitan demand.
The submission was a partial success and has resulted in a one-off injection of $3m which will be used to reduce the
impost of the ongoing increased staffing.
In 2009/10 ESTA intends on resubmitting into government for further funding as a result of a detailed review of the funding
base, cost drivers with a view to changing the way in which ESTA is funded into the future. ESTA’s funding model review is
one of the key projects set down in the 2009/10 program of work.
In the meantime ESTA will be budgeting for a loss of $4.8m. This includes the most significant project and capital budgets
ever undertaken by ESTA and exceeds $14.2m (excluding the EAS expansion project).
It is expected that this program of replacement and development projects will reduce ESTA’s liquidity in the order of
$11.5m. This is achievable within the current ESTA funding envelope and will be achieved with a mix of direct ERC funding
and accessing ESTA’s existing financial reserves.
Revenue
ESTA revenue sources are made up of ESO payments for the base CAD service and variations, payments for the managed
services (MMR, EAS, MDN), direct appropriations from the Department of Justice for support of the managed services
contracts, fees from private alarm companies and interest on cash balances.
CAD service fees are at set rates that vary according to the Department of Treasury and Finance’s funding model which
applies a CPI rise to Departmental appropriation annually. For ESTA in 2008/09 this represents a 3% increase in fees over
2008/09. This fee calculation methodology has been in place since ESTA/ECV was established and effectively means
that, despite continuous growth in activity levels, ESTA has not had any real ongoing core service fee increase since its
establishment in 2002.
Along with the $3m increase in base funding for 2009/10, revenues flow for project funding for Ambulance Victoria, CFA,
VicSES for their statewide services, totalling nearly $2.8m along with $823k in current funding to provide enhanced surge
capacity at Ballarat.
Expenditure
Total expenditure is budgeted to increase by over $8m in 2009/10. This is mostly attributable to initiative funding from
government and an increased project commitment for the year. The expenditure on the managed services contracts has
increased by $2m for the year, operations by $1.7m, support by $2m and projects by approx $2.3m.
Cash Management
ESTA maintains cash balances with both Westpac for its day to day operating funds as well as maintaining investments
with Treasury Corporation Victoria.
ESTA’s cash holdings balance is approximately $36.8m. An amount of $14.5m included in this balance is a contingency
funding reserve for the delivery of the SIPSaCS contracted services. It represents the contingency balances held on behalf of
the parties to the MMR, MDN and EAS contracts. It is not available to be allocated to ESTA’s day to day operating activities.