Exploring citizen satisfaction: balancing revenue generation and community engagement in municipal services

Purpose Informed by public value theory, the purpose of this paper is to explore the relationship between citizen satisfaction with municipalities’ efforts to generate financial assets and their engagement with communities for the delivery of services. Design/methodology/approach Published panel data was collected from each of the 79 municipalities in Victoria, Australia, over five fiscal years (2015–2020). This study uses Least Square Regression analysis to examine the relationship between citizen satisfaction, surplus revenues and community engagement. Findings The analysis reveals a positive relationship between citizen satisfaction and surplus revenues but finds no significant link between citizen satisfaction and community engagement across all municipalities. However, further analysis distinguishing between urban and rural municipalities uncovers distinct patterns. Urban dwellers place higher value on surplus revenues for their satisfaction, whereas rural citizens derive greater satisfaction from community engagement. Practical implications The results of this study underscore the importance of tailored governance strategies that align with the distinct needs of urban and rural communities. Municipal leaders should adopt differentiated approaches, prioritizing financial sustainability in urban areas and fostering community engagement in rural municipalities to enhance overall citizen satisfaction. Originality/value This study challenges the assumption of a universal approach to citizen satisfaction in municipal governance. By highlighting the differing priorities of urban and rural populations, the findings of this study contribute to public value theory by emphasizing the need for context-specific strategies in municipal management.