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BEGA VALLEY SHIRE COUNCIL

Ordinary

MEETING NOTICE AND AGENDA

An Ordinary Meeting of the Bega Valley Shire Council will be held at Council Chambers, Bega on Wednesday, 31 October 2012 commencing at 2.00 pm to consider and resolve on the matters set out in the attached Agenda.

 

Peter Tegart

General Manager

 

 

24 October 2012

 

TO:

Cr Bill Taylor, Mayor

Cr Russell Fitzpatrick, Deputy Mayor

Cr Tony Allen

Cr Michael Britten

Cr Keith Hughes

Cr Ann Mawhinney

Cr Kristy McBain

Cr Cr Liz Seckold

Cr Sharon Tapscott

COPY:

General Manager, Mr Peter Tegart

Group Manager Infrastructure, Waste and Water, Mr Wayne Sartori

Group Manager Planning and Environment, Mr Andrew Woodley

Community and Relationships, Ms Leanne Barnes

Minute Secretary

 

 


PUBLISHING OF AGENDAS AND MINUTES

The Agendas for Council Meetings and Council Reports for each meeting are available from 5.00 pm one week prior to each Ordinary Meeting, on Council’s website.  A hard copy is also made available to each Library Branch and at the Bega Administration Building reception desk.

The Minutes of Committee and Council Meetings are available from 5.00pm on Council's Web Site on the Friday after the Meeting on Councils website and hard copies distributed with the Agenda for the following meeting.

1.      Please be aware that the recommendations in the Council Meeting Agenda are recommendations to the Council for consideration.  They are not the resolutions (decisions) of Council.

2.      Background for reports is provided by staff to the General Manager for his presentation to Council.

3.      The Council may adopt these recommendations, amend the recommendations, determine a completely different course of action, or it may decline to pursue any course of action.

4.      The decision of the Council becomes the resolution of the Council, and is recorded in the Minutes of that meeting.

5.      The Minutes of each Council meeting are published in draft format, and are confirmed, with amendments by Councillors if necessary, at the next available Council Meeting.

If you require any further information or clarification regarding a report to Counci, please contact Council’s Executive Assistant who can provide you with the appropriate contact details

         Phone (6499 2104) or email execassist@begavalley.nsw.gov.au.


ETHICAL DECISION MAKING AND CONFLICTS OF INTEREST

A GUIDING CHECKLIST FOR COUNCILLORS, OFFICERS AND COMMUNITY COMMITTEES

Ethical decision making

Is the decision or conduct legal?

Is it consistent with Government policy, Council’s objectives and Code of Conduct?

What will the outcome be for you, your colleagues, the Council, anyone else?

Does it raise a conflict of interest?

Do you stand to gain personally at public expense?

Can the decision be justified in terms of public interest?

Would it withstand public scrutiny?

Conflict of interest

A conflict of interest is a clash between private interest and public duty. There are two types of conflict:

Pecuniary – regulated by the Local Government Act and Department of Local Government

Non-pecuniary – regulated by Codes of Conduct and policy. ICAC, Ombudsman, Department of Local Government (advice only).  If declaring a Non-Pecuniary Conflict of Interest, Councillors can choose to either disclose and vote, disclose and not vote or leave the Chamber.

The test for conflict of interest

Is it likely I could be influenced by personal interest in carrying out my public duty?

Would a fair and reasonable person believe I could be so influenced?

Conflict of interest is closely tied to the layperson’s definition of ‘corruption’ – using public office for private gain.

Important to consider public perceptions of whether you have a conflict of interest.

Identifying problems

1st     Do I have private interests affected by a matter I am officially involved in?

2nd    Is my official role one of influence or perceived influence over the matter?

3rd     Do my private interests conflict with my official role?

 

Whilst seeking advice is generally useful, the ultimate decision rests with the person concerned.

Agency advice

Officers of the following agencies are available during office hours to discuss the obligations placed on Councillors, officers and community committee members by various pieces of legislation, regulation and codes.

Contact

Phone

Email

Website

Bega Valley Shire Council

(02) 6499 2222

council@begavalley.nsw.gov.au

www.begavalley.nsw.gov.au

ICAC

8281 5999

Toll Free 1800 463 909

icac@icac.nsw.gov.au

www.icac.nsw.gov.au

Division of Local Government (DPC)

(02) 4428 4100

dlg@dlg.nsw.gov.au

www.dlg.nsw.gov.au

NSW Ombudsman

(02) 8286 1000

Toll Free 1800 451 524

nswombo@ombo.nsw.gov.au

www.ombo.nsw.gov.au

 


TO:   The General Manager
Bega Valley Shire Council

 

Disclosure of pecuniary interests / non-pecuniary conflict of interests

In accordance with the Council’s Code of Meeting Practice and the requirements of the Local Government Act  and regulations or dispensation issued by the Division of Local Government  I hereby disclose the following pecuniary interests and/or non-pecuniary conflict of interests at the meeting as indicated below:

Ordinary meeting held on _____ / _____ / 20___

dd             mm               yy

 

Item no & subject

 

 

Interest (tick one)

Pecuniary interest                                         Non-pecuniary conflict of interest

 

* Nature of interest

 

 

If Non-pecuniary  (tick one)

 Disclose & vote        Disclose & not vote          Leave chamber

 

 

 

 

Item no & subject

 

 

Interest (tick one)

Pecuniary interest                                         Non-pecuniary conflict of interest

 

* Nature of interest

 

 

If Non-pecuniary  (tick one)

 Disclose & vote        Disclose & not vote          Leave chamber

 

 

 

 

Signed

 

Print Name

Councillor

 

*  Note:  Under the provisions of Section 451(1) of the Local Government Act 1993 (pecuniary interests) and Part 6.11 of the Model Code of Conduct prescribed by the Local Government (Discipline) Regulation 2004 (conflict of interests) it is necessary for you to disclose the nature of the interest when making a disclosure of a pecuniary interest or a non-pecuniary conflict of interest at a meeting.

 

 


Council                                                                                                          31 October 2012

 

AGENDA

1     Confirmation Of Minutes

That the Minutes of the Ordinary and Standing Committee Meetings held on 9 October, 2012, as circulated, be taken as read and confirmed.

2     Apologies and requests for leave of absence

 

3     Declarations

Pecuniary, Non-Pecuniary and Political Donation Disclosures to be declared and tabled.

4     Deputations (by prior arrangement)

 

5     Petitions

 

6     Mayoral Minutes

 

7       Adjournment to Standing Committees

 

Recommendation

 

That the Ordinary meeting of the Council be adjourned for the purpose of dealing with staff reports to Standing Committees.

8     Staff Reports – Planning and Environment (Sustainability)

In accordance with Council’s Code of Meeting Practice, this section of the agenda will be chaired by Councillor Britten.

8.1              Use of Bermagui Surf Life Saving Club as a Reception Establishment................. 13

8.2              Draft Planning Reforms................................................................................... 33

9     Staff Reports – Community and Relationships (Liveability)

In accordance with Council’s Code of Meeting Practice , this section of the agenda will be chaired by Councillor Seckold.

Nil Reports

10   Staff Reports – Economic (Enterprising)

In accordance with Council’s Code of Meeting Practice, this section of the agenda will be chaired by Councillor McBain.

10.1             National Broadband Network........................................................................... 93

11   Staff Reports – Infrastructure Waste and Water (Accessibility)

In accordance with Council’s Code of Meeting Practice, this section of the agenda will be chaired by Councillor Fitzpatrick.

11.1             Bega Valley Local Traffic Committee Meeting 10 October 2012........................ 115

11.2             Water Allocation Payments to Sportsground Committees................................ 117

11.3             Developer Charges Guidelines for Water Supply and Sewerage (Consultation Draft) 121

11.4             Tender 26/12 Littleton Gardens Public Toilet................................................... 165

11.5             Bega Town Hall Expression of Interest (Stage 2)............................................. 169

12   Staff Reports – Governance and Strategy (Leading Organisation)

In accordance with Council’s Code of Meeting Practice, this section of the agenda will be chaired by Councillor Mawhinney.

12.1             Certificate of Investments made under Section 625 of the Local Government Act 1993     181

12.2             Pecuninary Interest Returns 1 July 2011 to 30 June 2012................................. 185

12.3             Southern Phone Company Dividend............................................................... 189

12.4             Australian Local Government Women’s Association (ALGWA) NSW Branch – State Conference                                                                                                                   193

12.5             Result of Hospital Poll - Local Government Elections....................................... 203

12.6             Local Government Infrastructure Renewal Scheme (LIRS) Funding Update......... 207

12.7             Community strategic plan review - community survey and special rate variation process   287

12.8             Quarterly Budget Review Statement for 30 June 2012...................................... 303

12.9             Presentation of Financial Statements and Audit report for the year ended 30 June 2012   313

12.10           Presentation of Draft Financial Statements for the year ended 30 June 2012.... 315 .

13   Adoption of Reports from Standing Committees

 

 

14   Delegates Reports

 

15   Rescission/alteration Motions

 

16   Notices of Motion

16.1             Cobargo Public Toilets.................................................................................. 327

16.2             Wolumla Public Toilets................................................................................. 329

 

17   Urgent Business

 

18   Questions On Notice

18.1             Cr Fitzpatrick Lake Curalo Boardwalk ............................................................ 333

18.2             Cr Fitzpatrick - Native Vegetation Act............................................................. 335

 

19   Questions for the Next Meeting

 

20.. Confidential Business 

 

21   Adoption of reports from Closed Session

22   Resolutions to declassify reports considered in closed session

  

 

 


Council                                                                                                          31 October 2012

 

 

staff reports – Planning and Environment (Sustainability)

 

31 October 2012

In accordance with Council’s Code of Meeting Practice (2011), this section of the agenda will be chaired by Councillor Surname.  

8.1              Use of Bermagui Surf Life Saving Club as a Reception Establishment..... 13

8.2              Draft Planning Reforms.................................................................................... 33


Council 31 October 2012                                                                                     Item 8.1

 

8.1. DA 2012.149: Use of Bermagui Surf Life Saving Club as a Reception Establishment       

 

Group Manager Planning & Environment   

 

 

Applicant

Bermagui Surf Life Saving Club

Owner

Department of Primary Industries (Catchments & Lands)

Site

Lot 7305 DP 1128706 and Lot 7034 DP 1118743 within Dickinson Reserve 83225, off Lamont Street, Bermagui

Zone

6(a) Existing Open Space

Site area

5.4ha

Proposed development

Use of Bermagui Surf Life Saving Club as a Reception Establishment

Precis

Council is in receipt of a development application seeking consent for the use of the Bermagui Surf Club building (a Community Facility) as a Reception Establishment under the provisions of Clause 71 of Bega Valley Local Environmental Plan 2002 (BVLEP 2002).

The application is reported to Council for determination due to the broader issues raised with the proposed use of a Community Facility as a reception establishment, catering for private functions.

Objections to the proposal were received during public exhibition.

The proposal is recommended for approval.

Background

In May 2007 Council consented to the construction of the Surf Life Saving Club building within Dickinson Reserve, Bermagui. Construction of the building commenced in January 2009 and Interim Occupancy was issued on 25 May 2012. There are a number of matters that remain outstanding for the Final Occupation Certificate, and these matters are being actively attended to by the Club.

Description of the proposal

Consent is sought for the building to be used as a Reception Establishment for up to 18 times per year. The applicant originally sought approval for up to 28 days per year but this was reduced to 18 during the assessment of the application. The proposal would require upgrading of the existing kitchen to a commercial grade suitable for catering purposes. It is also proposed to install a bar area at the eastern end of the hall. The application proposes hours of operation up until 12.30am, with service of alcohol to cease at 11.30pm (as per the Club’s current liquor licence) and music to cease at 11.40pm. The maximum number of patrons is proposed at 120 persons for seated functions and 200 persons for cocktail functions. 

A copy of the submitted development plan is provided as Attachment 1.

Description of the site

The surf club building is located within Dickinson Park Reserve, immediately adjacent to the existing amenities block. The Reserve is bounded by Horseshoe Bay to the north, the Lamont Street business precinct to the south-east and the oval facilities to the south and south-west.

A locality plan is provided as Attachment 2.

Planning assessment

The proposal has been assessed in accordance with the Matters for Consideration under Section 79C of the Environmental Planning and Assessment Act 1979. Staff highlight the key issues of the proposal in this report for Council’s consideration.

A copy of the assessing officer’s Section 79C assessment will be available at the meeting.

Zoning

Bega Valley Local Environmental Plan 2002

The subject land is zoned 6(a) Existing Open Space under the provisions of BVLEP 2002. The proposed use is defined as a Reception Establishment, which means;

A building or place used for the purpose of wedding receptions, birthday parties and the like where admission is by private invitation, but does not include a refreshment room or hotel.

Reception Establishments are prohibited in the 6(a) zone. The applicant has requested the proposed use be considered in accordance with Clause 71 of BVLEP 2002, under the provisions of temporary use of land. Clause 71 states:

 

 

71    Temporary use of land

Despite any other provision of this plan, consent may be granted to the carrying out of development for the purpose of a street stall or carnival or to other temporary development in any zone for a maximum period of 28 days, whether consecutive or not consecutive, in any one year.“

This issue will be discussed later in this report.

Notwithstanding the land use being prohibited in the zone, the objectives of the zone are relevant and must be considered in the determination of the application.

The objectives of the 6(a) zone are as follows;

(a)    to recognise the importance of land in the zone as open space and allow a limited range of uses compatible with the keeping of the land as open space and in public ownership,

(b)     to permit a range of uses, especially recreational uses, where those uses comply with the plan of management of the land,

(c)     to ensure that development in areas of environmental significance does not reduce that significance.

For the purpose of Clause 8(3) and 38(2) of BVLEP 2002, the proposed use of the Surf Club building as a Reception Establishment to enable wedding receptions, birthday parties and the like, is considered to be consistent with the objectives of the 6(a) zone. 

The proposed use provides an additional income source for the Club to maintain the Surf Club building and secure its continued primary function as a Community Facility, being for the physical, social, cultural, economic or intellectual development or welfare of the local community.

The proposed use is not expected to conflict or take away from the main use of the reserve, being for passive and active recreation. Most of the proposed private functions to be conducted at the Surf Club building would occur in the evening, when the public use of the reserve is limited. The proposed reception establishment would allow for either the Surf Club building to be hired to private caterers to come in and use the kitchen facilities to service a function, or allow the Surf Club Committee to provide catering to functions, at a fee.

It is considered that the proposal complies with the applicable plan of management (see later discussion of issues).

It is considered that the proposal would not reduce the environmental significance of the Reserve setting and surrounds.

Draft Bega Valley Local Environmental Plan 2012

The subject site is proposed to be zoned RE1 Public Recreation under Draft Bega Valley Local Environmental Plan 2012 (Draft BVLEP 2012). The proposed land use would be defined as a Function Centre under the Standard Instrument definitions, which means;

A building or place used for the holding of events, functions, conferences and the like, and includes convention centres, exhibition centres and receptions centres, but does not include an entertainment facility.

Function Centres would be prohibited in the RE1 zone. Notwithstanding, consideration of a temporary use can be made under Clause 2.8 of Draft BVLEP 2012. This matter is discussed in more detailed later in this report.

The objectives of the RE1 zone are;

·      To enable land to be used for public open space or recreational purposes.

·      To provide a range of recreational settings and activities and compatible land uses.

·      To protect and enhance the natural environment for recreational purposes.

It is considered that the proposed use of the Surf Club building for the purpose of conducting non-surf club functions, such as weddings and birthday parties, would be a compatible activity within the recreation reserve. It is unlikely that such functions would adversely impact on the other reserve uses during day time or evening events. Suitable conditions of consent are recommended to control activities, in terms of noise, hours of operation and service of alcohol. In this regard, the proposal is considered to be consistent with the objectives of the proposed RE1 zone.

Issues

Permissibility of proposed land use

The building was approved as a Community Facility (erection of a building for the purpose of a surf life saving club and radio control room). A Community Facility is defined by BVLEP 2002 as;

a building or place owned or controlled by a public authority or a body of persons associated for the purpose of providing for the physical, social, cultural, economic or intellectual development or welfare of the local community, but does not include a building or place (other than a club) elsewhere specifically defined in this Dictionary.

A condition of consent was included on the development consent (2006.508) for the surf club, limiting the uses of the building. Condition 33 states;

The Club Room and Training Room shall be used for Surf Club or community based purposes only.

The Club now seek to upgrade the kitchen area to a commercial grade kitchen and to include a bar area to be able to hold private functions in the hall area of the Club building, such as weddings and birthday parties.

Clause 71 allows Council to consider temporary uses that would otherwise be prohibited in the zone. Clause 71 states;

Despite any other provision of this plan, consent may be granted to the carrying out of development for the purpose of a street stall or carnival or to other temporary development in any zone for a maximum period of 28 days, whether consecutive or not consecutive, in any one year.

Draft Bega Valley Local Environmental Plan 2012 (Draft BVLEP 2012) also contains a clause which permits temporary land uses with the consent of Council. The assessment of the proposal in light of Clause 2.8 of Draft BVLEP 2012 is relevant as the gazettal of the plan is considered to be imminent as at the time of writing this report.

Clause 2.8 of Draft BVLEP 2012 states;

2.8     Temporary use of land

(1)     The objective of this clause is to provide for the temporary use of land if the use does not compromise future development of the land, or have detrimental economic, social, amenity or environmental effects on the land.

(2)     Despite any other provision of this Plan, development consent may be granted for development on land in any zone for a temporary use for a maximum period of 52 days (whether or not consecutive days) in any period of 12 months.

(3)     Development consent must not be granted unless the consent authority is satisfied that:

(a)        the temporary use will not prejudice the subsequent carrying out of development on the land in accordance with this Plan and any other applicable environmental planning instrument, and

(b)        the temporary use will not adversely impact on any adjoining land or the amenity of the neighbourhood, and

(c)        the temporary use and location of any structures related to the use will not adversely impact on environmental attributes or features of the land, or increase the risk of natural hazards that may affect the land, and

(d)        at the end of the temporary use period the site will, as far as is practicable, be restored to the condition in which it was before the commencement of the use.

(4)     Despite subclause (2), the temporary use of a dwelling as a sales office for a new release area or a new housing estate may exceed the maximum number of days specified in that subclause.

(5)     Subclause (3) (d) does not apply to the temporary use of a dwelling as a sales office mentioned in subclause (4).

The objective of the clause

It is considered that the proposed use of the Bermagui Surf Club building for the purpose of a Reception Establishment, which would enable the Club to hire the premises for the purpose of weddings, birthdays and the like, would not compromise the future development potential of the land. The land is located within Dickinson Reserve of which Council is Trustee and is managed under the Bermagui Foreshore Reserves Plan of Management 2004 (PoM). 

The Plan of Management establishes objectives which specify what is to be achieved within the subject land. The ‘Tourism/Commercial’ Values’ of the PoM state (p.24);

·      Ensure a sustainable tourism industry by careful planning to maintain and enhance those natural qualities that attract visitors to the area without disadvantaging the permanent residents of Bermagui.

·      Allow for commercial enterprise on foreshore land where such enterprise is appropriate to its environmental and social settings and where a clear net gain to the community can be demonstrated.

The Club submit that the proposal will provide a net gain to the community in being able to secure income which will enable the Club to service its debts and to continue to fundraise for essential surf life saving equipment.

Temporary use not to prejudice the subsequent carrying out of development on the land

As the use would be conducted wholly within the confines of the Surf Club building, it is considered that there would be no significant impact on the development potential of adjoining reserve lands.

No adverse impact on any adjoining land or the amenity of the neighbourhood

It is considered that there would be minimal adverse impact on adjoining lands. The Surf Club building sits within the Reserve which enables a suitable buffer to adjoining businesses and residential properties beyond. Specific conditions of consent are recommended which define hours of operation and ensure strict compliance with the responsible service of alcohol.

There is adequate car parking available within the Reserve (both formal and informal) to cater for the proposed functions without adversely impacting on the on-street parking in Lamont Street.

In terms of noise impact, the proposal would be required to comply with the provisions of the NSW Industrial Noise Policy and the Protection of the Environment Operations Act.

No adverse impact on environmental attributes or features of the land, or increase the risk of natural hazards that may affect the land

There is no envisaged adverse impact on any environmental attributes or features of the land as a result of the proposed development.

The site will, as far as practicable, be restored to the condition in which it was before the commencement of the use

As the proposal relates to a use of a building, that use can cease at any time without impact on any of the facilities provided within the building or the reserve. The upgraded kitchen and bar area would still be able to be used by normal surf club functions and currently permissible community uses.

Summary

Whilst Council can consider the use of the building for the purpose of a Reception Establishment up to 28 days per year under the current LEP and up to 52 days under the Draft LEP, the Club seek development consent for up to 18 days per year.

The proposal is considered to be a minor use of the premises, which primary function is to provide surf life saving services to the community and as a venue for use by community groups.

The proposal is considered to be a reasonable use of this community asset.

Asset

Council is Trustee of the subject reserve and the building is leased to Bermagui Surf Life Saving Club Incorporated under a license agreement. The license agreement would need amendment to permit the hire of the premises by non-community groups (ie for private functions).

Consultation

The proposal has been considered by the Department of Lands as the owner of the land. No objection is raised by Lands in relation to the proposed use.

Submissions

The development application was placed on exhibition for a period of 14 days from 6 June 2012 until 20 June 2012. A total of three submissions were received in relation to the development.

The key issues raised in submissions are discussed below followed by staff comment.

A copy of the submissions will be available at the Council meeting.

I object to having to compete in a limited market place with individuals who are using a public facility and have no risks attached.

It simply is not a level playing field when competing for the same wedding or function.

Every time the Life Saving Club undercuts us to host a wedding at least 10 staff will not be working at Mimosa that night.

Mimosa Wines request that you do not cater to the whims of a club whose primary objective while essentially worthy, with this proposal goes beyond the boundaries of sustaining a supposedly not for profit organisation at the expense of the local business community.

COMMENT: 

The impact on existing businesses within the township as a result of the proposed development, in terms of business competition, is not a matter for Council in its planning consent authority role.

Notwithstanding, the Club have reconsidered their initial application for a maximum of 28 days per year and have agreed to limit the number of non-community events to 18 per year. The Club does not seek to compete directly with other function centres in the local area but offer an alternative venue for the community to hold functions. The Club has indicated that their primary purpose is conducting surf life saving functions and seeks to utilise the asset in a viable way to provide financial sustainability.

The surf club has been used for several receptions already. I would like the noise from music to cease at 10pm – as I sell sleep.

COMMENT:

The applicant seeks consent for hours of operation up to 12.30am, with music to finish at 11.40pm and service of alcohol to finish at 11.30pm (as per the current liquor licence). The objection from the proprietor of the Beachview Motel in Lamont Street suggests that music from functions should cease at 10pm. 

Assessing staff recommend the inclusion of Councils standard condition for licensed premises which states;

The LA10 noise level emitted from the licensed premises should not exceed the background noise level by more than 5dB(A) from 7am to midnight and shall not exceed the background level from midnight until 7am. No correction for tonality is applied. Measurement is taken at the boundary of the worst affected premises.

This would ensure the premises complies with the provisions of the Environment Protection Authority NSW Industrial Noise Policy at all times.

Given the separation distance between the Surf Club and the Motel and the fact that the Motel is located within a commercial precinct and adjoining other licensed premises, staff consider it unreasonable to impose a 10pm curfew on music.

Any concerns raised in relation to noise from the subject premises would be appropriately investigated by Council officers in accordance with the Protection of the Environment Operations Act and the NSW industrial Noise Policy.

We are concerned that there appears to have been no proper notice of the proposal to turn a volunteer surf club into a potentially large commercial business competing directly with struggling private small business.

COMMENT: 

Notification of all properties along Lamont Street between Montague and Wallaga Streets was undertaken, a notice placed in the local newspapers and all documentation displayed at the Bermagui Library for viewing by the public. The provisions of Councils Development Control Plan No. 3 – Notification have been satisfied in this regard.

As a reception venue and bar the club will directly compete with struggling businesses in and around Bermagui. In this regard we note that the club has not had to pay for its land or its buildings and is staffed by volunteers. It has received extremely generous Government grants and as far as we are aware it pays no land tax or rates. In other words it has virtually none of the overheads, capital expenses or running costs of the businesses it will directly compete with.

COMMENT:

A copy of a letter from the Bermagui Surf Life Saving Club in response to submissions is provided as Attachment 3 to this report.

As mentioned previously in this report, the impact on existing businesses within the township as a result of the proposed development, in terms of business competition, is not a matter for Council in its planning consent authority role.

conclusion

The proposed development application has been assessed in accordance with the relevant Matters for Consideration under Section 79C of the Environmental Planning and Assessment Act 1979.

Whilst Reception Establishments are prohibited in the zone, the provisions of BVLEP 2002 allow the consent authority to consider the use up to 28 days per year. The Club, in considering the concerns raised in submissions, only propose to operate up to 18 days per year.

The proposal is considered to be consistent with the objectives of the zone and is not considered to adversely conflict with the principles of the Bermagui Foreshore Reserves Plan of Management.

In this regard, the proposal is recommended for approval subject to conditions as outlined in Attachment 4 to this report.

 

ATTACHMENTS

1View. Proposed development plan

2View. Locality Plan

3View. Letter from Bermagui Surf Life Saving Club

4View. Draft Consent

 

Recommendation

1.         That Development Application 2012.149 for the use of the Bermagui Surf Life Saving Club (a Community Facility) as a Reception Establishment for up to 18 days per year at Lot 7305 DP 1128706 and Lot 7034 DP 1118743 within Dickinson Reserve 83225, off Lamont Street, Bermagui be approved subject to conditions outlined in the draft consent.

2.         That those persons who made a submission be advised of Council’s decision.

 


Council

31 October 2012

Item 8.1 - Attachment 1

Proposed development plan

 


Council

31 October 2012

Item 8.1 - Attachment 2

Locality Plan

 


Council

31 October 2012

Item 8.1 - Attachment 3

Letter from Bermagui Surf Life Saving Club

 


 


Council

31 October 2012

Item 8.1 - Attachment 4

Draft Consent

2.                                                                    

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Council 31 October 2012                                                                                     Item 8.2

 

8.2.         Draft Planning Reforms     

 

To provide Council with an overview of the Draft Planning Reforms contained in the Green Paper published by the NSW Government.

 

Group Manager Planning & Environment   

 

Background

The NSW Government has been undertaking a review of the Environmental Planning and Assessment Act over the past 9 months. The Government has released a “Green Paper” which broadly sets out the proposed changes to be introduced into a new Planning Act.

“Frequently asked questions for councils” as published by the Government is attached, as is the response to the Green Paper by the NSW Local Government & Shires Associations.

ISSUES

The Environmental Planning and Assessment Act was introduced in 1979 and commenced in 1980. The Act has been amended over 150 times since its introduction and has become very difficult to interpret, to implement and to explain to the community. It has also become unwieldy for applicants wishing to undertake development.

The review was undertaken by a former Minister for the Environment, Tim Moore, and a former Minister for Public Works, Ron Dyer. Both are lawyers and Mr Moore is also a Town Planner. As part of the review there were many community forums held across NSW involving approx. 2000 people. There were also 900 written submissions received.

The review resulted in a two volume report which included issues and recommendations. The Government responded with the release of the Green Paper, which was on exhibition until 5 October 2012. Council wrote a submission requesting that, as the new Council was not meeting until after the closing date, this should be extended. The Minister for Planning responded indicating that he was not prepared to agree to an extension.

Legal

A new Planning Act will have significant ramifications across NSW and, in particular, for Local Government. At this stage there is very little available to guide Council in terms of the legal aspects. However, it will mean a whole new set of precedents will be set by the Land and Environment Court. The Department of Planning and Infrastructure will also have to provide new policies and guidelines. Consequently these precedents will take many years to evolve.

It is considered that Council will need to provide for a larger legal budget as it is considered that many more legal opinions will need to be sought.

Policy

Whilst it is not specifically known what changes will be necessary Council will most probably need to again review its Local Environmental Plan and Development Control Plan.

The Green Paper is divided into four (4) key reform areas. These areas are:-

Community Participation where the following is proposed;

-     Establishment of a public participation charter,

-     Imposing a statutory requirement for consultation on strategic planning documents relating to sub-regional planning;

-     Ensuring that there is a plain English explanation of all planning documents;

-     Ensuring that there is a genuine and effective community consultation and stakeholder involvement;

-     Adoption of evidence based planning;

-     Ensuring that there is a “clear line of sight” through the hierarchy of plans;

-     Increased use of the Planning Assessment Commission (PAC), Joint Regional Planning Panels (JRPP) and local expert panels “in order to take politics out of decision making”;

-     Make strategic plans and policies and information relating to development applications and approvals available on line.

Strategic Planning

-     10-12 consolidated non-statutory NSW Planning policies will replace the myriad of existing State Environmental Planning Policies (SEPPs) and Ministerial Section 117 directions;

-     Development controls in SEPPs will be collapsed into local land use plans and guidelines or incorporated into subregional delivery plans;

-     Non statutory regional growth plans with a 20 year horizon, identifying development capacities scenarios and targets, supported by market and feasibility data and containing 10 year growth targets for subregions will be introduced;

-     Sectorial strategies and growth infrastructure plans underpinning sub regional delivery plans will be introduced;

-     Regional planning boards will be formed on a regional basis and will determine how subregions meet their obligations through subregional delivery plans;

-     Plain English Local Land Use Plans (LLUPs) will be introduced in four parts 1) an explanation of the strategic planning framework, 2) a spatial land use plan, 3) an outline of infrastructure requirements, and 4) development guidelines;

-     Councils will be allowed to amend Local Land Use Plans subject to consistency with the higher order plans;

-     Existing Development Control Plans will be abolished and replaced with development guidelines contained in the LLUP;

-     Three new zones will be introduced. These will be an Enterprise Zone, a Future Urban Release Area Zone and a Suburban Character Zone;

-     Land use zones will generally be more flexible.

Development Assessment and Compliance

-     There will be a hierarchy of “generally depoliticised decision makers”;

-     The PAC and JRPP will determine applications to carry out State Significant Development (SSD) and regional development respectively;

-     Local expert panels, council officers or accredited certifiers will determine applications to carry out local development depending on whether the development is merit assessable or code assessable;

-     Code assessment will be introduced for development that conforms with a subregional delivery plan and must be approved within a prescribed timeframe;

-     Code assessment development will be either “consent authority code assessment” or “accredited certifier code assessment”;

-     Strategic compatibility certificates issued by the Director General (DG) of the Department of Planning and Infrastructure will enable conforming development to go ahead in the absence of a subregional delivery plan;

-     JRPPs will be allowed to review the DG’s decision not to issue a strategic compatibility certificate;

-     Different components of the one development project will be able to be code assessable or merit assessable;

-     For multi-stage development, code assessment will be able to follow the approval of a concept plan for the development.

Infrastructure Planning and Co-ordination

-     The private sector will be able to design, fund, deliver, manage and operate infrastructure in growth areas;

-     Competitive tendering will be introduced in growth areas to facilitate private sector participation in infrastructure provision;

-     Voluntary Planning Agreements (VPAs) might be phased out or significantly changed and, if kept, could be linked to larger precinct development and governed by clear minimum benchmarks;

-     A new development contributions framework will be introduced based on key principles including cost recovery, competiveness, housing affordability and delivery, beneficiary pays, spreading of costs, contestability and transparency;

-     The development contributions framework will possibly comprise 1) a local infrastructure levy 2) a regional open space levy and 3) a regional infrastructure levy in high growth areas;

-     Levies will be payable as late as practically achievable in the development process.

Strategic/Financial Implications

The changes proposed will have a very large impact on the work undertaken by Council’s planning staff. Until more details are available it is not possible to give any precise indication of the implications.

Operational Plan

The impact on the Operational Plan is yet to be determined.

What is Next?

The Green Paper will be followed before the end of the year by a White Paper and Exposure Bill which includes the draft legislation. Both documents will be open to submission.

Conclusion

Given that the newly elected Council was not in a position to make a submission to the Green Paper, it is expected that Council may wish to workshop and make a submission at the White Paper stage.

 

ATTACHMENTS

1View. A New Planning System for NSW - Green Paper  Frequently Asked Questions

2View. LGSA Submission to NSW Planning System Review - Green Paper September 2012

 

Recommendation

That Council note the report and request the General Manager to arrange a workshop and further report to Council with a view to making a submission to the White Paper and Exposure Bill.

 


Council

31 October 2012

Item 8.2 - Attachment 1

A New Planning System for NSW - Green Paper  Frequently Asked Questions

2.                                                                    

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Council

31 October 2012

Item 8.2 - Attachment 2

LGSA Submission to NSW Planning System Review - Green Paper September 2012

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 

 

 


Council                                                                                                          31 October 2012

 

 

staff reports – economic (enterprising)

 

31 October 2012

In accordance with Council’s Code of Meeting Practice (2011), this section of the agenda will be chaired by Councillor Surname.  

10.1           National Broadband Network.......................................................................... 93


Council 31 October 2012                                                                                   Item 10.1

 

10.1.       National Broadband Network     

 

This report will provide Council with additional detail concerning the negotiations between Council and the NBN Co Ltd.

 

General Manager  

 

Background

The General Manager, in conjunction with RDA, had worked on a strategy to present the south coast to NBN as ready for broadband rollout, outlining the economic and social benefits of that infrastructure investment to the region. That work led to the preparation and recent adoption of the Council’s Digital Economy Strategy.

Late in 2011, NBN Co Limited announced the next three-year program for rollout, which excluded the far south coast. The General Manager held discussions with Cushman Wakefield, the agents for NBN Co Ltd, concerning potentially suitable sites for the installation of NBN satellite dishes in the Shire. NBN were seeking a large site in private or public ownership, being one of two major sites across the country intended to accommodate satellite dishes.

Following a search of a number of properties, NBN identified Council’s Wanatta Lane site (Part Lot 3 DP 592206) as ideal geographically and topographically as an earth satellite tracking station for the purposes of the National Broadband Network (subject to Development Consent).  A copy of that original site plan is attached (Attachment 1).

Councillors were briefed in confidence of the opportunity to utilise a Council site, potentially bringing forward high speed satellite wireless broadband to the Shire and region, in advance of the NBN fibre rollout. NBN expressed an interest in the site, initially under a lease, with an option to purchase.

Following subsequent investigations and endorsement by NBN board, in mid February 2012 Cushman Wakefield submitted a draft heads of agreement to Council to form a basis for further discussions. The heads of agreement (HoA) contained in principle terms to identify a suitable 5 ha parcel on the Wanatta Lane site, nominated initially as a parcel to the NW of the Central Waste Facility (CWF), for lease with an option to purchase, subject to the site being subdivided, and the lessee having access for site investigations. Whilst referred to in discussions as a ‘heads of agreement’, the document submitted to Council on 13 February 2012 was entitled ‘Offer to lease then purchase’ and comprised commercial particulars of the proposed transaction, and suggested general terms and conditions to essentially cover the requirements for the short term lease whilst the site was subdivided, following which, the site would be purchased by the NBN Co Ltd.

In late March 2012, the independent valuation report was received, providing valuations for both the lease and sale of the site. The Preliminary Engagement Overview prepared by NBN Co, (Attachment 2) was released in March 2012 and provided additional information to assist the planning discussions, negotiations and acquisition process. Legal advice in relation to the draft ‘offer to lease then purchase’ was sought, including provisions regarding sharing access and energy to the site. A summary of that advice was reported to Council on 10 April 2012.

Council considered the matter and valuation in closed session on 10 April 2012 and resolved:

1.         That Council note the report and NBN “Preliminary Engagement Overview”.

2.         That the General Manager be authorised to negotiate terms of the lease with NBN, having regard to the advice from Council’s lawyers and arrange subdivision of Part Lot 3 DP 292206.

3.         That the Mayor and General Manager be delegated authority to execute documents with Council’s official Seal to be affixed to the Lease Documents/Contract Documents.

4.         That a further report be presented when the option to acquire the site, following subdivision, is proposed.

Following the resolution of Council, staff commenced negotiations for the appropriate agreements to give effect to the lease and sale of the site following subdivision, and to ensure Council access and operations would not be compromised. NBN also met with Council staff regarding town planning, environment, CWF conditions, access and energy matters.

A further site visit was conducted in May 2012 by NBN Co and surveyors, in order to locate the position of the Full Motion Antenna. Identifying that position would enable the remainder of the site to be confirmed and surveyed.

Difficulties ensuring the appropriate line of sight to the horizon ultimately required a change of location within the site. A parcel, approximately 5 hectares in size and located to the south west of the CWF, was preferred. The valuer indicated as the area remained the same, no change to valuation for purchase was required. A site plan is attached (Attachment 3).

As briefed to Councillors, NBN Co pushed to progress the agreement for the sale of the site following subdivision, with a development application to be submitted at an early opportunity. The proposed HoA, upon legal advice, then became an ‘offer to purchase’.

Further legal advice was sought for the appropriate preliminary agreement to be prepared. The format of the original ‘offer to lease then purchase’ was used as the basis for negotiations. Significant negotiation was involved in relation to operational issues relevant to the CWF and the access road and agreeing on the site plan to be incorporated into the agreement. This process eventually resulted in agreement to the terms of the attached ‘offer to purchase’ (Attachment 4). 

A holding deposit of $5,000 has been paid by the NBN Co Ltd, noting a deposit under any contract for sale would be 5% of the purchase price.

ISSUES

Legal

As briefed to Councillors, the Heads of Agreement/Offer to Purchase was executed in August 2012, and is subject to certain actions before any contract for sale may be contemplated. Since execution of that agreement, Council had been prorogued until the local government elections in September.

Whilst the Offer to Purchase does not incorporate a formal tenancy arrangement for the site, there is provision for NBN Co Ltd to carry out works on the land prior to completion and includes obligations regarding indemnities and removal of such works if the contract is rescinded or terminated. 

Further, it is intended that the contract of sale will contain provisions dealing with the tenancy by NBN Co Ltd. in detail.  Legal advice to Council is that in the absence of a formal lease being entered into, the access/occupation of the site by NBN Co Ltd would be as a licensee.

Council and NBN Co are currently negotiating the terms of the contract of sale. A draft is expected to be tabled at the meeting. Council's solicitors will assist in this process. The status of negotiations is that a Road Access Agreement in relation to the CWF and NBN sites, is being drafted to be incorporated into the contract of sale. Finalisation of the contract is also subject to the draft plan of subdivision which is being prepared by the surveyors appointed by NBN Co Ltd.

The HoA contained a confidentiality clause.

Asset

The Wanatta Lane property (198 ha) accommodates the approved (CWF) cells, leachate/stormwater ponds and associated infrastructure (approximately 10 ha), with stage 1 expected to be constructed by mid-2013. As emailed to Councillors in September, any DA submitted by NBN will be determined by JRPP. The claim that the central waste facility EIS/DA restricted the use of the Wanatta Lane property to the CWF only, may form part of submissions to the DA considered by JRPP.

Controls to ensure the construction and operation of the CWF are not compromised by the construction and operation of the NBN installation, will be contained in the contract of sale and expected to be reinforced as conditions in any consent by JRPP.

Consultation

While briefings to Councillors in May signalled the scale of the proposed installation, NBN presented to Councillors in June 2012, and held community information sessions in Wolumla in September.

Until this point, the commercial terms has been dealt with in confidence. It was considered any subsequent Development Application process would enable community and agency comment based on the proposed use of the site for the satellite tracking station, and enable consent conditions to be applied to appropriate protections to avoid compromise of either parties operations.

Development Application Process

The development application has been lodged with Council.

As Council is:

·     the owner of the land; and

·     the proposed development is private infrastructure with a value over $5m

the proposed development would be classified as Regional Development under Schedule 4A of the Environmental Planning and Assessment Act 1979.

As a result the Southern Region Joint Regional Planning Panel (JRPP) would be the consent authority for the development application and not Council.

As Council is the owner of the land it is proposed that an independent planning consultant would be engaged to assess any development application and prepare the report and recommendation for submission to the JRPP. Council may make a submission to that application.

An Expression of Interest and Brief has been submitted to consultants and responses are awaited.

Financial

The independent valuation previously provided to Councillors (Attachment 5) recommended $150,000 to purchase. Legal and survey costs associated with the subdivision should be borne by NBN.

Conclusion

Following the report to Council in April, the General Manager facilitated negotiations to enable NBN Co to utilise a 5ha parcel on the Wanatta Lane site for site investigations to assess planning, access, infrastructure and antenna suitability, through a heads of agreement. Due to topographical constraints, the parcel preferred by NBN shifted to the south west of the CWF. Subject to subdivision, and access road agreement, and based on an independent valuation of $150,000, it is recommended Council proceed to sell that parcel to NBN Co, with a contract for sale subject to development consent and conditioned to protect the CWF and infrastructure assets and operations on the Wanatta Lane property. Its use as a NBN satellite tracking station, enabling high speed satellite wireless to the region, is subject to DA supported by relevant studies, community and agency comment and the determination of the JRPP.

 

ATTACHMENTS

1View. Original site proposed for NBN installation - Wanatta Lane ( March 2012)

2View. Preliminary Engagement Overview - Satellite Network Deployment Bega Valley Shire Council

3View. National Broadband Network - Current Site Plan

4View. National Broadband Network Heads of Agreement - Executed 8/8/12 (Councillor Only)

5View. NBN installation opteon valuation report executive  (Councillor Only)

 

Recommendation

1.       That Council note the report.

2.       That Council enter a contract for sale of Part Lot 3 DP 592206 Wanatta Lane Frogs Hollow to NBN Co Ltd in consideration of $150,000, subject to:

·        the terms outlined in the Offer to Purchase

·        conditions appropriate to protect the construction and operational interests of the central waste facility

·        NBN Co meeting costs of subdivision and council’s legal costs up to $3000 associated with the sale.

3.       That Council authorise its official seal to be affixed to the necessary documents under the signature of the Mayor and the General Manager.

 

 


Council

31 October 2012

Item 10.1 - Attachment 1

Original site proposed for NBN installation - Wanatta Lane ( March 2012)

 


Council

31 October 2012

Item 10.1 - Attachment 2

Preliminary Engagement Overview - Satellite Network Deployment Bega Valley Shire Council

 


 



 



 



 



 



 


Council

31 October 2012

Item 10.1 - Attachment 3

National Broadband Network - Current Site Plan

 

PDF Creator

 

 


Council                                                                                                          31 October 2012

 

 

staff reports – infrastructure Waste and Water (Accessibility)

 

31 October 2012

In accordance with Council’s Code of Meeting Practice (2011), this section of the agenda will be chaired by Councillor Surname.  

11.1           Bega Valley Local Traffic Committee Meeting 10 October 2012............. 125

11.2           Water Allocation Payments to Sportsground Committees........................ 127

11.3           Developer Charges Guidelines for Water Supply and Sewerage (Consultation Draft)     131

11.4           Tender 26/12 Littleton Gardens Public Toilet.............................................. 207

11.5           Bega Town Hall Expression of Interest (Stage 2)....................................... 211


Council 31 October 2012                                                                                   Item 11.1

 

11.1.       Bega Valley Local Traffic Committee Meeting 10 October 2012     

 

This report recommends that Council adopt the advice of the Bega Valley Local Traffic Committee meeting held on 10 October 2012.

Group Manager Infrastructure, Waste & Water  

 

Background

The Bega Valley Local Traffic Committee held a meeting on 10 October 2012, the minutes of which have been distributed separately. It is a requirement that Council formally adopt the recommendations, prior to action being taken. All recommendations were supported unanimously by the Committee.

 

ATTACHMENTS

Nil

 

Recommendation

That Council note the advice of the Bega Valley Local Traffic Committee meeting held on 10 October 2012 and approve the following:

Intersection of Minyama Parade and Prospect Street, Bega

1        That the existing Stop sign currently facing traffic entering the Minyama Parade and Prospect Street intersection from Newtown Road, Bega be retained and an additional Stop sign be installed facing traffic entering the intersection from the western leg of Prospect Street.

2        That this be accompanied by appropriate line marking.

The Snake Track, Kiah - Southern Mountains Rally

1        That, subject to conditions, The Snake Track between the Princes Highway and Towamba Road intersections be temporarily closed between 5.30pm to 11.30pm on Saturday, 3 November 2012 for a competitive stage of the Southern Mountains Rally.

2        That the proposed traffic arrangements involving the temporary closure of The Snake Track for the Southern Mountains Rally on Saturday, 3 November 2012 be deemed a Class 2 special event and it be conducted under an approved Traffic Control Plan for night time activities, which is to be provided to Council by Wednesday, 24 October 2012 and be in accordance with the Roads and Maritime Services (RMS) Traffic Control Manual.

3        That persons involved in the preparation and implementation of the Traffic Control Plan must hold the appropriate RMS accreditation.

4        That organisers fully implement an approved Special Event Transport Management Plan.

5        That organisers have approved public liability insurance of at least $20 million indemnifying Council, Police and Roads and Maritime Services by name for the event.

6        That organisers obtain a Section 40 approval from the Commissioner of Police, or their delegate, prior to conducting the event.

7        That local residents be notified of the amended times and evidence of the notification be provided to Council by Tuesday, 30 October 2012.

 


Council 31 October 2012                                                                                   Item 11.2

 

11.2.       Water Allocation Payments to Sportsground Committees     

 

Council currently pays an allowance to sportsground management committees to subsidise water usage charges, as well as funding for maintenance.  A review of the calculation method, area of sportsgrounds and procedure of making payments has been now been completed.

 

Group Manager Infrastructure, Waste & Water   

 

Background

The sportsground committees at George Brown Oval, Pambula Sports Complex, Berrambool Oval, Lawrence Park and Dickinson Park receive a maintenance allowance and a water allowance.  Both amounts are provided to assist the committees in the management and upkeep of the respective sportsgrounds.  The committees also receive the generated income at each facility. The Bega recreation grounds are maintained by Council, and managed with assistance of the sporting clubs.

Council has previously received a number of reports regarding water allocations payments to sportsground committees on (27 September 2011, 18 October 2011, 3 July 2012). This review comes at the request of several sportsground management committees over concerns at the increasing cost of water usage.

The current approach to water allocations was introduced in 2007 to encourage the efficient use of water, with a view that if more water than the allowance was used, the difference would be met by the committee.  If underspent, the balance would be allocated to maintenance and upkeep of the facility at the committees’ discretion.

A formula was introduced using the accepted turf industry standard minimum amounts for irrigation and the amount of funds allocated to the specific committees.

Circumstances have changed at the sportsgrounds since the original payments were made. These include: water access charges no longer being applied to Council properties (increasing funds available to those committees for maintenance) , higher than average rainfall, the installation of irrigation systems, and metering rearrangements to reduce the sewer discharge factor and charges.

ISSUES

Asset

The process of how each committee has been billed and reimbursed was reviewed.  The outcome is that processes are proposed to be updated:

·     allocations will be made in July, October, January and April,

·     amendments to any increase in the area of sporting fields made at an annual review.

Further, each sporting complex has been reassessed and the area for future allocations will be based on the table below.

Opportunities may emerge in the future, to contemplate reticulating or storing effluent treated to recreation standard from sewer treatment plants, for irrigation of sporting fields. Capital costs may be amortised to assign an equivalent value to treated effluent as potable water initially, recovered initially under a similar water charging regime to the current arrangements – with the dual benefit of reusing effluent and reducing the draw on potable water supply.

Social / Cultural

Community expectation is that playing surfaces are suitable and safe for user need. The level of service is to be defined in the Recreation asset management plan.

Economic

While the cost is considerable, maintaining these sites in playable condition is more cost-effective than allowing them to deteriorate, then attempting a restoration. The generosity of volunteers in managing and maintaining these facilities, using revenues collected for hire of grounds/facilities, Council’s allocation and any grants, saves Council and the broader community paying wages or contractors to undertake those activities.

Financial

The annual budget allocation for management of sportsgrounds is $93,000 in 2012.

The current water allocations are based on the following formula:

Playing Surface area (size m2) x 170mm per m2 per annum
Note: the 170mm per m2 per annum is the accepted turf industry standard minimum amount of irrigation required to supplement rainfall and to keep the turf in good condition.

Table 1

Sporting Oval

Average Usage 2008-2012

Calculated

Allowance KL/Pa

Proposed Water Allocation KL/PA

Current Water Allocation (currently paid)

Average Water Bill 2008-2012

Proposed equivalent Water Allocation
KL @$2.25 2012/13

George Brown Sporting Complex (Eden)

2,292

1720

1800

$4282.00

$6,344.57

$4,050.00

Dickinson Park (Bermagui)

1627

2323

2500

$2408.00

$4,403.94

$5,625.00

Pambula Beach Sporting Complex

3765

4303

4500

$9145.50

$17,114.31

$10,125.00

Berrambool Sporting Complex

3021

3213

3500

$19298.00

$9,377.95

$7,875.00

Lawrence Park

5605

2278

2500

$5002.00

$13,680.91

$5,625.00

Note: Bega Rec Ground water usage 2011-2012 is $32,427.00 (paid by Council). The Bega Show Ground (as community trust) is the only showground to be paid an annual water allocation payment of $4284.

Any overruns of the water allowance is to be funded through the sportsground maintenance allocation. Similarly, any underuse enables more to be spent on maintenance. An assessment of recent annual water accounts has indicated that while committees have paid accounts up to the annual allowance, on occasions the maintenance allocation has been overspent in advance of the water account, leaving higher water accounts being unpaid and causing stress to committees. In the main, Council has covered those accounts.

Operational Plan

The differentiation between Bega Rec grounds maintenance and management from other sportsgrounds, has been a historical and vexed matter. The Bega town team incorporates its maintenance into work schedules. The advent of the proposed General Sports and Recreation s355 Management Committee, may consider appropriate and equitable means of discerning and distributing budget allocations, with due reference to the asset management plan and the facility management plans.

Conclusion

It is proposed the assignment of maintenance allocations to sportsgrounds should be derived from the asset management plan for maintenance and renewal, while future facility management plans will outline upgrades. In the interim, the management committee representatives may meet to distribute budget allocations for upgrades.

A number of factors have previously caused mixed results with Sportsground Management Committees receiving their water allocation. However with a fixed formula for water allocation, a review of sporting field area and review of process, it is anticipated that existing formula will adequately meet Council’s current allocation/payment for water accounts.  Therefore it is considered appropriate to provide sportsgrounds with a fixed ‘free’ allocation of water up to the volume indicated in the above table, with water used above this amount being charged to the sportsground committee.

Alternately, Councillors may wish to assign an annual maintenance allocation and Council meet the water accounts – noting the ‘tension’ of managing water appropriately may be lost. That issue may be lessened with the opportunity to restricting irrigated use to early morning/late evenings or in advance of special events, in accord with best practice water policy.

An investigation in capital and operational options and costs regarding potential use of treated effluent, may be pursued once Councillors consider the Merimbula STP effluent reuse study.

 

ATTACHMENTS

Nil

 

Recommendation

That Councillors determine a preference for identification and distribution of allowances for maintenance and water for sportsgrounds.

 


Council 31 October 2012                                                                                   Item 11.3

 

11.3.       Developer Charges Guidelines for Water Supply and Sewerage (Consultation Draft)     

 

In August 2012 the NSW Office of Water in conjunction with IPART released In August 2012 the NSW Office of Water in conjunction with IPART released revised Developer Charges Guidelines for Water Supply, Sewerage and Stormwater (Consultation Draft) for comment by NSW Local Government Water Utilities.

 

This report provides Councillors with a summary of key elements of the new Guidelines and an update on implementation of revised Strategic Business Plans and Development Servicing Plans for Water Supply and Sewerage.

 

Group Manager Infrastructure, Waste & Water  

 

Background

Developer charges are up-front charges levied to recover part of the infrastructure costs incurred in servicing new developments or additions/changes to existing developments. The authority for local government councils/local water utilities (LWU) to levy developer charges for water supply and sewerage, derives from Section 64 of the Local Government Act 1993 by means of reference to Section 306 of the Water Management Act 2000.

Water and Sewerage Developer Charges (also known as Headworks Charges or Section 64 charges) are regulated by the NSW Office of Water through Guidelines issued in December 2002.  The Guidelines provide a methodology for calculating the maximum applicable developer charge, and set out the requirements for the preparation of Development Services Plans (DSP’s). DSP’s are preceded by preparation of Strategic Business Plans (with associated asset, demographic and financial models).

DSP’s are the reference documents produced by Councils in NSW to enable Developer Charges to be levied at a local level.

In 2006 Council adopted the current Development Servicing Plans (DSP’s) for Water Supply and Sewerage. The DSP’s and their associated calculations informed the current S64 contributions and replaced a number of area based interim contribution plans. They also informed the long term financial plan (LTFP)

The current Section 64 contributions have been levied on the basis of full cost recovery (user pays) from all developers in accordance with policy 2.3.1(l).

In 2007 the NSW State Government requested that IPART review the Developer Guidelines.  IPART provided a final report to the then Minister in late 2007; however the conclusions of the report were not made public by the Minister.

Council commenced its scheduled review of the DSPs and associated charges 12 months ago, commissioning consultants to assist the asset and financial modelling reviews. NSW Office of Water advised Council mid-year to not continue the review until the new guidelines were issued.

The matter of headworks charges has been the topic of several questions and notices of motion from councillors, particularly around:

·     Application of charges to council/community facility developments

·     Differentiation of portion of capital works cost between new development, and existing users

·     Comparison of headworks charges to other LWUs (noting Council has recently invested approximately $75 million in expanded modern sewer systems, requiring recovery of part of that capital cost over the next 10/20 years)

·     Retrospective application of headworks charges to lots subdivided before adoption of the 2006 DSP

·     Differentiated charges between towns, villages and catchments

·     Scale of proposed augmentation works, having regard to changing demographics, growth patterns, and consumer behaviour towards sustainability

·     Mapping DSP catchments to new LEP urban boundaries

The Minister for Primary Industries recently advised Council that she had decided to support all of the recommendations of the 2007 report, and the report has now been released on the IPART website. 

The revised Developer Charges Guidelines for Water Supply, Sewerage and Stormwater - Consultation Draft, has been released by the Minister for Primary Industries pursuant to section 306 (3) of the Water Management Act 2000.

The 2012 Developer Charges Guidelines (Consultation Draft) will update the Water Supply, Sewerage and Stormwater Guidelines, 2002 and modify them in accordance with the recommendations of the IPART Review Report available on the NSW Office of Water (NOW) website and IPART website. Links to the two documents are as follows:

Developer Charges Guidelines for Water Supply, Sewerage and Stormwater, 2012 – Consultation Draft

IPART Review Report

ISSUES

Legal

In August 2012 a report was submitted to Council to clarify the applicability of Section 64 contributions to properties in Bega Valley Shire. A copy of this report is attached since it also details the legal basis for application of the contributions in NSW by Council local water utilities.

Policy

There are significant financial implications arising from the policy position that Council ultimately chooses, once the new DSP’s are adopted. The current policy position is based on a complete cost recovery approach whereby developers who utilise water and sewer systems pay for all growth related infrastructure, with no subsidy from the wider community.

Key IPART Recommendations

The NSW Office of Water has prepared new guidelines that incorporate all of the IPART recommendations.  There are 30 recommendations and these are summarised below, together with the potential impacts for Bega Valley Shire Council.

Recommendation

General Comments

Impacts on Bega Valley Shire DSP

1 Background Information

Increased importance on background documentation, including providing spreadsheet models

Potentially a little more effort required to prepare background documentation. 

2 Draft & Final DSPs on BVSC website and review by an independent auditor

No real change.

Additional cost and time associated with having the DSPs audited by an accredited auditor.

3 & 4 Audit Process

DSPs will now need to be audited prior to being registered with the NSW Office of Water.

Additional cost and time associated with having the DSPs audited by an accredited auditor.

5 CPI Increase of S64 Charges

No change

No impact.

6 & 7 Expert Panel / Dispute Resolution

Expert panel to be formed to advise on technical matters or matters of interpretation of guidelines

May potentially impact the Draft DSP exhibition process if a matter is referred to the expert panel for consideration.

8 & 9 Assets >30 yrs Age

Assets >30 years old at the commencement of the DSP must be excluded unless special approval by NSW Office of Water and/or expert panel is given. Documentation also required.

Headworks assets >30 yrs of age are likely to be excluded unless documentation to justify their inclusion can be produced.

10 Future Assets <10 yrs Only

Future assets to be constructed within 10 years of commencement of DSP only to be included in DSP if they are included in BVSC Strategic Business Plan (SBP).

Unless BVSC decided to apply for an exemption to this rule, future augmentations beyond 5 years will not be included in the DSP. This will impact the extent of work required in the Servicing Strategies (currently a 30 year capital works plan) and also impact the base year for the charges – everything now needs to relate to the year the DSP commences (probably 2013).

11 & 12 Reticulation Assets

Reticulation assets continue to be excluded, with a supplementary charge possible if reticulation costs need to be recovered for specific areas.

No anticipated impact.

13, 14 & 15 MEERA

- Contingencies not included for existing assets

- Future assets to be based on MEERA rates and associated contingencies not to exceed 20%

 

Contingency adjustments will be straight forward. However a consistent set of construction Reference Rates will need to be developed for use on both existing and future assets. Recent asset valuation work will assist in this regard.

 

16 & 17 Agglomeration

Agglomerating capital charges within 30% of each other is still allowed. Agglomeration of service area beyond the 30% is no longer allowed.

Total number of service areas based charges is likely to increase. More significantly the charges applicable to certain areas may increase whilst others may decrease.

 

Administering the charges may be a little more complicated.

18 & 19 NPV Approach

NPV approach for calculating capital charge is now required.

Already included in the existing BVSC approach.

20, 21 & 22 Reduction Amount

- NPV of annual charges should be used for reduction amount, but 30 yr financial plan not necessary

- Iteration process not required.

BVSC Financial Plan already exists. Requirement to no longer use iteration process should make the calculation of reduction amount easier and quicker.

23 & 30 Backlog Areas

Simplifies treatment of backlog areas so they are calculated the same as other areas except reduction amount can be altered if operating costs differ significantly.

 Shouldn’t affect Servicing Strategies as long as Backlog Areas are clearly identified.

24 & 25 Equivalent Tenements 

More details required on how ETs are determined, including future growth projections. ET to be considered based on average annual demand. Utilities to carefully consider ABS data, NSW DoP data and other Council data.

Assumptions for determining water and sewer ET’s will need to be clearly stated.

 

26 & 27 Cross-subsidies

- Limits the Council ability to write down the value of assets so that more costs are recovered through recurring charges (ie residential customers).

- Assets built after 2012/13 to be fully recovered through developer charges.

- Any cross-subsidy benefitting developers to be fully disclosed to customers via website, Operational Plan and Annual report.

Could be a financial consideration if the revised DSP areas result in developer charges that are considered too high by Council.

28 Phasing in of Charges

Phasing in of charges is no longer allowed.

Depending on the new charges (including less agglomeration of charges) some areas could be subject to a substantial and sudden increase in developer charges with no phase in option now available.

29 & 30 Non-Residential and Residential Charges

Calculation of Developer Charges to consider all residential and non-residential development. Charges for non-residential development should be the same as for residential development.

 

Capital charge for DSP’s involving backlog works to be calculated in the same manner as other DSP areas and only new developments are required to pay developer charges.

No anticipated impact.

Timing for BVSC Review

A review of Council’s Water Supply and Sewer Strategic Business Plan (SBP) and associated DSP’s has already commenced. A number of Councillor Workshops are to be held in the months leading up to consideration and exhibition of the new DSP’s.

As advised in the August 2012 report, the following timetable is applicable to the SBP/DSP review process over the coming months: 

·        Completion of draft S64 Guidelines by NSW Office of Water and submission to IPART by early July 2012.(Completed)

·        Review of the draft S64 Guidelines by IPART due early September 2012.(Completed)

·        Final industry consultation between September 2012 and January 2013. (Taking place at present)

·        Adoption of new S64 Guidelines by NSW Office of Water, Feb 2013. (Future action)

·        Completion of BVSC DSP documentation and adoption for 1 July 2013. (Future action)

Asset

Section 64 charges enable developers to equitably fund assets needed to support their developments. Often the contributions include an provision/upgrade to an asset (such as a sewer pumping station) directly to service development, and/or a financial contribution to the broader planned augmentation to the water or sewer system, based on the additional load or demand that development generates on the system.

The new S64 Guidelines and associated Council policy position may have a significant impact on Typical Residential Bills and Council’s ability to provide new assets to support growth.

Economic

Broader economic discussion is a strategic balance of economic development, growth property developers and community provided infrastructure. There are arguments the current s64 charges may inhibit development, but research indicates the charges are not out of step with similarly sized councils undergoing long term growth and undertaking significant augmentation programs. Similarly, it is contended new development is a barometer of economic prosperity, and ultimately the purchasers of subdivided land/buildings pay access charges. Indeed, it is understood developers pass on the proportional cost of the s64 charges in the market pricing of land for sale.

In conjunction with the scheduled s94/94A development contribution plans review, an assessment of the relative cost and impact of all contributions on the cost and margins of development, will be reported to Council.

It is noted access charges should be designed to recover the fixed cost of capital (eg debt servicing) and management, and usage charges recover operational costs.

Inevitably, simple maths dictates that someone has to pay for infrastructure, either the community (access charges) or property developers (S64 charges).

The adopted DSP has taken the position that a single charge applies across the shire, based on calculation of addition load (expressed as ET), regardless whether that development takes place in a district town or a village. Without that cross subsidy/whole of shire approach, the cost to provide water or sewer services to villages (and thus open the prospect for growth/affordable housing in those villages) would be prohibitive to development.

With the above in mind the discussion then falls to whom most appropriately pays for growth related capital augmentation works, and paradoxically the ability for those groups to pay and indeed support economic development.

Strategic

In conjunction with the Water and Sewer DSP’s, a Strategic Business Plan (SBP) is currently being drafted detailing the capital works proposed for the Shire particularly over the next ten years. The DSP’s will reflect the SBP level of service and capital works goals, with appropriate reference to the adopted asset management plans (AMPs). Policies will also be revised to activate the adopted DSPs.

Consultation

The revised DSP’s will be subject to wide community consultation in accordance with the requirements of the new Developer Charges Guidelines.

Financial

The application of a DSP and associated charges remains a requirement in order to receive state government subsidies under the various government schemes.  In the absence of these subsidies developers and consumers bear the full cost. 

The contribution of S64 charges to Council income is significant and it is intrinsically linked to the combined residential bill and other revenues required to balance long term financial plans. In drafting the SBP and DSP’s, a sensitivity analysis will be carried out as part of the financial modelling process.

The sensitivity analysis will present Councillors with a number of levels of service, growth, subsidy and capital works scenarios to consider prior to adopting appropriate S64 and residential bill price paths for the 2013/14 to 2017/18 period.

Resources (including staff)

Significant staff and consultant time has already been devoted to the revision of SBP and DSP documents. It is expected that over $150K will be expended by the time the DSP’s are adopted by Council.

Operational Plan

The SBP and DSP documents support Operational Plan outcomes (Sustainability and Accessibility).

Conclusion

Implementation of revised Strategic Business Plans and Development Servicing Plans for Water Supply and Sewerage is proceeding as planned.

At this stage the precise impact of the new Guidelines on the level of existing S64 charges is not possible to calculate. However the most significant financial risk to Council is the change to the way agglomeration is allowed for and the impact that this may have on S64 charges applicable to small villages where new capital works has taken place.

A further challenge for consideration is the amount of subsidy, if any that Council is prepared to extend to developers.

 

ATTACHMENTS

1View. Developer Charges Guidelines Water Supply and Sewerage Key Modifications to the 2002 Guidelines

2View. Council Report - Water supply and sewer developer contributions: Infrastructure Committee 09 08 2012 

 

Recommendation

That Councillors note the NSW Office of Water Guidelines (Consultation Draft) and the timetable for adoption of revised Water Supply and Sewerage Strategic Business Plan and Development Servicing Plan documents.

 


Council

31 October 2012

Item 11.3 - Attachment 1

Developer Charges Guidelines Water Supply and Sewerage Key Modifications to the 2002 Guidelines

 

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Council

31 October 2012

Item 11.3 - Attachment 2

Council Report - Water supply and sewer developer contributions: Infrastructure Committee 09 08 2012

 

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Council 31 October 2012                                                                                   Item 11.4

 

11.4.       Tender 26/12 Littleton Gardens Public Toilet     

 

This report details the outcome of the evaluation of Tender 26/12 for the Littleton Gardens Public Toilet and recommends award to the preferred tenderer.

Group Manager Infrastructure, Waste & Water  

 

Background

Council determined on 10th April 2012 that, as part of the Littleton Gardens Master Plan Stage 1, public toilets to replace the previous facility that were demolished as part of the Sapphire Marketplace development, should be constructed during 2012. The proposed toilets are in addition to those provided in the basement carpark of the Sapphire Marketplace, under the terms of contract with Fabcot.

The adopted Masterplan proposed redevelopment of the Littleton Gardens precinct over a number of stages – the first being demolition of terrace, refurbishment of lawns, progressive placement of new built and natural features and paths, and the public toilets. Future stages may be subject to the outcome of the Bega Traffic and Carparking Study scheduled this year.

The stages are subject to detailed engineering design.

ISSUES

Strategic

The Littleton Gardens design team has evaluated the most economic, efficient and effective way to procure the toilet facility. Given the time and cost involved in conventional methods of design and delivery for this kind of public facility, the options available in the marketplace and the additional considerations of security, vandalism, maintenance and hygiene, the decision of the design team was to procure a high quality prefabricated toilet module. Numerous public authorities worldwide are procuring public facilities in this manner as well as many local Councils in Australia. On this basis, public tender RFQ 26/12 was called for Littleton Gardens Stage 1A Prefabricated Public Toilet Design, Supply, Fabrication, Manufacture, Delivery & Erection. Tenders closed on 10th July 2012. Two specialist suppliers submitted Tenders.

Both these suppliers are NSW Local Government/ NSW Department of Commerce Procurement prequalified (Moodie : Holder of LGProcurement  T3.08), have proven capabilities and are already supplying a range of high quality finely finished prefabricated buildings and street furniture  to governments and local authorities worldwide.

The specification is for a high quality Stainless Steel construction fully disabled-compliant unit including many additional features including: self-cleaning, controlled usage time, loitering alarms, automated doors as well as anti vandal finishes, hardware and detailing.

It should be noted that the Davidson Place Eden toilet block recently built by BVSC with similar accommodation (3 cubicles) to conventional specification in bagged brick without any of the above listed features and advantages, has cost to date $153,000. Erection of this prefab unit is expected to take less than a week and has the added benefit that the facility is self cleaning which should result in reduced operating costs. Given order can be placed immediately, delivery and completion can be achieved, if not by end of year, very soon into the new year.

This facility will be similar in form, size and roof line of the existing adjacent bus shelter. Please note the following comments from Ted Dexter the principal designer of Littleton Gardens:

“Littleton Gardens Toilet Block 

The theme taken with the toilet block is consistent with a modern and up to date approach taken for the remainder of Littleton Gardens; utilising modern design solutions and robust vandal resistant materials requiring lower levels of maintenance.

The solution to this structure will allow greater flexibility as it is capable of being relocated if necessary, with minimal cost as opposed to more conventional in-situ structures which would normally be demolished and a completely new structure erected from scratch at a new location.

There is no cost penalty for this solution over the previously more common in-situ construction indeed there are both capital and maintenance cost advantages

The stainless steel finish allows for etching of art themes on the facades and far greater durability of finish against vandalism as well as being far more hygienic.”

Financial

The Toilet facility is part of Littleton Gardens Stage 1 - budget allocation, being in part from the proceeds of sale of the supper room ($800k). Note that the RLCIP funding ($250k) is not being used for this facility. The quoted price includes installation. Council has some minor costs estimated to be between $5,000-$10,000, to provide connection points for power, water and drainage, all of which are adjacent to the previous temporary facility.

Conclusion

The procurement of a Stainless Steel prefabricated Toilet module is not only the most cost effective method of providing the required facility, but offers advantages in readymade disabled compliance, speed of construction, quality of finish, far superior functionality in terms of security, vandalism, maintenance and hygiene.

 

ATTACHMENTS

1View. Confidential memorandum to Councillors (Councillor Only)

 

Recommendation

1.       That Council accept the offer from Moodie Outdoor Products for Tender RFT 26/12 Littleton Gardens Public Toilet in the lump sum amount of $156,000 (excl GST) subject to variations and provisional sums.

2.       That the unsuccessful Tenderer be advised of Council’s decision.

 


Council 31 October 2012                                                                                   Item 11.5

 

11.5.       Bega Town Hall Expression of Interest (Stage 2)     

 

Report advising Council of outcome of Expressions of Interest (stage 2) for the demolition and construction of the Bega Town Hall (Bega Civic Centre) and to seek Council’s support for the assessment of those submissions.

 

 

Group Manager Infrastructure, Waste & Water  

 

Background

Council after many years of discussion and significant public consultation, at its meeting of 26 July 2012 adopted in part:

4. That Council adopt the selective tender process and call for expressions of interest open tender for the demolition, design and construction of the Bega Town Hall in accord with the adopted functional brief, to a budget of $5.5 million plus GST and comply with the Division of Local Government (DLG) Guidelines for Capital Expenditure.

As a result, EOI documentation was prepared which essentially compromised of the following components;

·        Contract terms and conditions

·        Council Functional Brief

·        Concept Design prepared by Council’s architect

·        Performance Specification for electrical, mechanical, kitchen and acoustics.

Council also at its meeting of 12 June 2012 resolved to form a Reference Panel to assist in the assessment of submissions as part of the selective tendering process. The EOI Stage 2 closed on 4 September 2012.

The purpose of Stage 1 was to identify those proponents who could demolish, design and construct the town hall for $5.5m and meet the uses and functionality contained in the Brief. Stage 2 was to draw out the design and costing detail.

An initial notification of the proposed capital expenditure was sent to DLG, noting capital expenditure and operational expenditure details would not emerge until tenders were considered.

Councillors were presented an overview of the Town Hall project and detail on the EOIs at a further workshop on 23 October.


 

Stage 1 EOI Assessment.

The EOI was advertised in metropolitan newspapers of Sydney, Melbourne and Canberra and at the close on 29 May 2012, 31 documents had been issued and 16 submissions received.  Each EOI was assessed in accordance with the criteria and adopted scaling.

Criteria

Rating

(a) Presentation of the Expression of Interest

0%

(b) Quality of the design of the proposed new civic Centre

15%

(c) The lump sum prices and/or the proposed method of contract

20%

(d) Demonstrated capacity and technical ability to carry out the work under the Contract

15%

(e) Demonstrated managerial capability, qualifications, experience. Choice of the on and off site staff proposed and the experience and capability of the architect & consultants

15%

(f) Conformity with the request for Expression of Interest

5%

(g) Quality, Safety and Environmental Systems

10%

(h) Stability in financial position of the D & C team

10%

(i) Capacity to achieve the delivery program

5%

(j) Demonstrated ability to work with the client to develop a successful project outcome

5%

Council considered the stage 1 assessment report at its meeting of 4 July 2012 and adopted that the following 5 EOI submission be accepted for stage 2 of the selective tendering process.

(1)     Rankin Builders in combination with Cox Architecture Pty Ltd

(2)     Hines Construction in combination with Facility Design Group.

(3)     Edwards Construction in combination with Robertson + Marks Architects.

(4)     National Buildplan in combination with De Angelis Taylor.

(5)     Denham in combination with Gardner Wetherill & Assoc.

The above 5 D&C Teams were then invited to further develop and detail their proposals and submit the following additional information by the 4 September 2012.

1.       Resubmit EOI Schedule 1, more fully developing proposal, describing details, showing concepts plans and demonstrating how key functional and quality requirements will be met.

2.       Resubmit EOI Schedule 4 showing lump sum cost estimate, lump sum breakdown, contingencies, provisional sums and indentifying any cost risks.

3.       Resubmit EOI Schedule 5 indicating proposed design, approval and construction program identifying key milestones dates.

ISSUES

Stage 2 EOI Assessment.

On the 7 September 2012 and 12 October 2012, Council’ Reference Panel met to consider Stage 2 EOI submissions received on the 4 September 2012.

The Panel considered the assessment criteria as per stage 1 noting that as this was stage 2, most had met the criteria for the purposes of selection. Accordingly, those items were considered as equal and not rated and the new scale was adjusted. Refer to table below.

Criteria

Rating

(a) Presentation of the Expression of Interest

equal

(b) Quality of the design of the proposed new civic Centre

50%

(c) The lump sum prices and/or the proposed method of contract

20%

(d) Demonstrated capacity and technical ability to carry out the work under the Contract

10%

(e) Demonstrated managerial capability, qualifications, experience. Choice of the on and off site staff proposed and the experience and capability of the architect & consultants

equal

(f) Conformity with the request for Expression of Interest

equal

(g) Quality, Safety and Environmental Systems

equal

(h) Stability in financial position of the D & C team

equal

(i) Capacity to achieve the delivery program

5%

(j) Demonstrated ability to work with the client to develop a successful project outcome

15%

Each of the 5 submissions were accordingly scored and ranked according to the criteria.

Each of the submitted EOI offered based level function in accordance with Council’s brief and performance specifications.  Further, each also included a number of enhancements and associated additional features for an additional cost.  Importantly each EOI documented exclusions and assumptions which will require careful assessment during the final tender stage.

Functional Brief

During the course of the assessment, it became clear that a number of items (listed below) within the functional brief have inadvertently or disproportionally affected concept designs.  It is suggested that the importance of those items be reaffirmed to guide future design development.

Kitchen Size- currently the brief requires kitchen capable for catering to 500 people however but catering for sit down meal functions is 350.  Apart from this anomaly the size is larger than what was probably anticipated.  Recommend reduction to 350 catering capability.

Environmental Sustainability- in particular the need for stormwater reuse via rain water tanks.  Given the space limitations and irrigation opportunities the need for this inclusion is challenged.  Recommend that the building meet BCA environmentally sustainable provisions with specifically nominating inclusions.

BVSC Car Park- brief requires maintaining pedestrian access between BVSC staff car park and Zingel Place.  This is causing designers to maintain a corridor between town hall and exiting Council administration building resulting in poor utilisation of available space as well as creating potential security and bad behaviour areas.  The need for pedestrian access is question given the car park is currently sign posted Council employees only and the degree of utilisation of the general public is and would be very low.  Access from the car park to new town hall is provided in designs.  Recommend removal of this requirement.

Box Office/Cloak Room-is included however the need is questioned as it does require valuable floor space and potentially is no longer required or of limited use in a building of this type.  Recommend that requirements change to that of a ticket counter, in lieu of box office and cloak room.

Asset

The Bega Town Hall is a significant public asset which has been listed for renewal in Council Building Asset Management Plan.  The asset has not been used for several years as a result of the Sapphire Marketplace development which resulted in the demolition of the supper room and toilet facilities. Proponents have out forward designs that completely rebuild, or incorporate elements of the existing town hall in their respective submissions.

Social / Cultural

The Bega Town Hall has been and should continue be a significant part of the regions social and cultural resources. The cultural facilities review, independently conducted by South East Arts, identified the Town Hall as a significant cultural and community space, particularly as no public auditorium or conference facility is available following demolition of the Bega RSL. The Functional Brief contained a mix of requirements as detailed in Attachment 2.

Consultation

There has been extensive public consultation, focus group and stakeholder discussion, together with media coverage of the proposed renewal of the Bega Town Hall – refer previous consultation reports.

Financial

As reported previously to Council, the funding allocation for the Town Hall project is $5.5m excluding GST, utilising reserves and proceeds of sale from the Zingel land ($3.5m) for the proposed upgrade component of the project, and loan borrowings for the renewal component ($2m).

Resources (including staff)

Significant staff time has used in the consultation, document preparation and assessment.

Operational Plan

Renewal/upgrade of Bega Town Hall is listed as a Major Project and a Cultural operational action in the CSP Theme area of Liveable Place.

Conclusion

The Reference Panel, following consideration of Stage 2 EOI submissions recommends that D & C Groups be invited to formally tender for the Civic Centre development.

Councillors are also asked to give consideration to modifying the Functional Brief to better define the projects outcomes, as outlined in the report.

 

ATTACHMENTS

1View. 2012.10.31 Confidential attachment bega town hall EOI assessment (Councillor Only)

2View. Bega Town Hall Development Functional Breif (rev 3 Dec 2010)

 

Recommendation

1.       That Council approve the invitation to tender for the demolition, design and construction of the Bega Civic Centre from (insert name).

2.       That Council approve the changes to the Functional Brief as detailed in the report.

 


Council

31 October 2012

Item 11.5 - Attachment 2

Bega Town Hall Development Functional Breif (rev 3 Dec 2010)

 

BEGA TOWN HALL DEVELOPMENT -  FUNCTIONAL BRIEF (rev 3 Dec 2010)

 

General

The existing Bega Town Hall is located on the southern side of Zingel Place, Bega. A large community building, built over 50 years ago, that dominates the civic place known as Littleton Gardens. It is proposed that a new Community facility be built to replace the existing hall and associated supper room with a flexible multi functional complex that integrates with the community meeting place of Littleton Gardens and is based on principles consistent with the Town Centre planning report and investigations of the community’s future needs for regional centre infrastructure’.

The requirement is for a multi purpose hall with building floor plan to allow flexibility of use. The focus of most events will be either the stage or the central dance floor. The hall will provide use for small musical recitals, conferences, speech nights as well as large meetings touring bands and ball functions with large attendances.

The new facility is to be adaptable for both large group (wedding, birthday, function use), and also suitable for smaller group such as small meetings or conferences requiring multiple rooms

•          The new hall should be accessible from the existing Zingel Place pavement level to facilitate ease of entry and obviate the need for stairs or ramps, and relate well to the proposed enlarged and redeveloped Littleton Gardens and Woolworths marketplace plaza,

•          Service access to the building can only be from the Upper Street Council car park, including food and beverage deliveries, function materials, plant servicing and garbage removal. 

•          All public spaces should incorporate environmentally conscious air conditioning, with the ability to shut down areas not in use. Energy efficiency measures should also include solar roof panels for electricity production, solar boosted water heating, and the capture and reuse of roof rainwater. All areas should use low energy fluorescent lighting where possible and variable lighting levels should be available.

•          The design should accommodate provision for public and aboriginal art, and the use of appropriate materials where possible and prudent,

•          As a central public building with pride of place in the community the new building should be large enough and of such presence to be a dominant feature of the civic square. The new facility should be at grade with Zingel Place and therefore is likely to be at least 2 storeys in height, to connect to the car park at the rear for loading. This presents an opportunity for additional floor space, at a second floor or mezzanine level, for example Council chambers, committee room, art gallery or office accommodation.

•          The option of a mezzanine level to the hall will assist in increasing the capacity of the hall subject to effective viewing and sight lines being provided.

•          Possible public safety and crime issues must be a consideration.

•          The external appearance of the building should complement the existing Council building, generally as indicated in the Town Centre Design guidelines.

•          Pedestrian access provision from council’s rear car park must be provided to Zingel Place.

Seating Layout and Audience Capacity

Furniture layout will vary depending on the function and the building floor plan should allow a variety of configurations including rows of seating, banquet tables and large party/celebration arrangements.

To allow for the appropriate atmosphere of different types of use and varying audience sizes minimum seating requirements are as follows:

•          Row seating layout based on conventional arrangement with intermediate aisles located to maximize seating to centre of the auditorium. Row to row spacing to be at least 1000mm with main hall capacity of 500 seats (excluding any mezzanine seating).

•          Banquet seating too be of flexible arrangement depending on the requirements of the individual function and will cater for a total of approx 350 people on the main floor.

•          Moveable partitions are required to section the hall into conference and/or meeting rooms and will have capacity of up to 100 people when arranged in row seating or meeting room configuration.

•          Chairs to be of high level durability and comfort, suitable for banquet and performance seating. They shall be stackable, easily stored and minimum width of 530mm.

•          Areas for seating people with disabilities are to be provided in the main floor of the hall. The flexible seating arrangement will allow for wheel chairs to be prominently positioned within seating layout. 

Key Internal Building Elements

•          Floors to be suitable for multi purpose use and without limiting design flexibility is expected to combination of timber and carpet surfaces.

•          The ceiling is to be shaped, and of a suitable reflective material as to achieve the required acoustic performance.  The hall will need to be used for unamplified music recitals along with speeches, public meetings, conferences and other performances which will use amplified sound systems.  To satisfy the need for amplified and non amplified sound a mixture of absorptive and reflective materials acoustic designed is envisaged.  The acoustic requirements of the Town Hall maybe such that devices to adjust acoustic performance maybe required.

•          Access to the Town Hall should ideally be provided on both sides of the main floor. However, due to the site restrictions this may not be possible.  Direct level access to Zingel Place is considered important for general patronage and those with special needs.  Additional emergency access to be as required to meet BCA.

•          Sound and light locks to entry doors should, where possible, be provided to ensure isolation between the Town Hall and external interruptions.

•          Passenger and goods lifts will need to be incorporated into the design to meet accessibility and OH&S requirements.

Stage

The Town Hall stage is required to be designed for different performance use including small scale music recitals, conferences, speeches and bands of up to 25 players. Centrally located to one end of the hall, the stage should accessible to the audience for presentations.  The capacity to undertake local theatrical performance is to be included.

The stage will be in two parts, a permanent section and a number of mobile platforms that can be used to increase the stage size and which are stored under the stage when not in use. The stage structure is to be flat and should be constructed of quality timber, tongue and groove strip flooring with high quality dual finish.  Stage wings and scenery space consistent with local theatre presentations is desirable.

Final performance width, depth and height above main floor are subject to design development but are expected to be in the order of 15m, 10m and 1.5m respectively.

Dressing Rooms

Provision of dressing rooms shall be limited by the capacity of the site and proposed stage capabilities however must be consistent with stage size and use with peak demand envisage to be local theatrical performances and school presentation evenings.

Foyers and Public Spaces

The main foyer should be adjacent to Zingel Place and to be designed for efficient access to facilities and large enough for uses such as the display of artwork, social functions and small receptions. As the initial point of public contact with the building it should be a pleasant airy and open space, able to be used as display area in addition to being a public gathering area, the foyer should be as open as possible with views to Mount Mumbulla and Littleton Gardens. This space should have local art incorporated into the design in some way. 

Foyer space commensurate with egress requirements are to be included along with multiple entry points to the main room to allow for good layout flexibility

Functional elements will most likely include:

•          Box office/information counter

•          Cloakroom

•          Food and drink servery- should include a small wet bar area for the serving of pre-function drinks and coffee and tea post function and capable of separate enclosure for leasing as café space.

•          Primary access space

•          Public notices and display

•          Public furniture, waiting seating and possible lounge areas

Toilets

The approximate number of public sanitary facilities required for the town hall is regulated under the BCA. The requirements are however minimum and ideally additional facilities should be included to accommodate the potential for future commercial leasing and liquor licensing.

Catering Services

A kitchen associated with the town hall will provide food and beverages catering for balls, conferences, parties and exhibitions. This will require a commercial kitchen capable of preparing, part preparing and finishing for sit down and buffet meals for approximately 500 persons.

Kitchen should be well located with good access to main hall for efficient catering and loading bay for delivery and kitchen servicing.

Final kitchen requirements will be subject to detail design but include the following minimum facilities;

•              Cooking equipment- finishing and warming

•              Refrigeration

•              Cool rooms

•              Benches for preparation, plating and serving

•              Washing

•              Space for auxiliary equipment eg hot box, power bain-marie

Administration

The running of the facility requires a small office area for Manager and support staff and equipment. Space is to be a minimum small office and work space area approximately 20 square metres.

Lighting System

The system installed in the Hall should be of good quality and suitable for stage, fore stage and spot lighting suitable for public address, conference and stage presentations. In addition, reticulation ductwork and cabling is to be provided that would facilitate the later augmentation of the system and also the temporary installation of hired or brought in equipment by event organisers.

Sound System

The system installed in the Hall should be of good quality and suitable for public address, conference and stage presentations. In addition, reticulation ductwork and cabling is to be provided that would facilitate the later augmentation of the system and also the temporary installation of hired or brought in equipment by event organisers.

A public address system will be required for speeches and conferences with most performances expected to be amplified. However, the building floor plan and acoustic design must also consider use for unamplified music recitals. An induction loop is to be provided for the sound reinforcement for the hearing impaired.

Communications

The new hall should incorporate into its construction current standard audio visual technology, video conferencing facilities, high speed secure data network, display/theatre lighting and allow for augmentation and upgrade.

Design submissions shall include details of communication systems including and not limited to, voice, data and visual.

Building Services

General building services are outlined as points below are to be detailed in design submissions;

•              Air Conditioning

•              Fire Protection

•              Electrical supply and general house lighting

•              Hydraulic and sanitary services

•              Energy efficiency and renewable power generation option

•              Indicative operating costs (energy)

 

 

 


Council                                                                                                          31 October 2012

 

staff reports – governance and strategy (leading organisation)

 

31 October 2012

In accordance with Council’s Code of Meeting Practice (2011), this section of the agenda will be chaired by Councillor Surname.  

12.1           Certificate of Investments made under Section 625 of the Local Government Act 1993  225

12.2           Pecuninary Interest Returns 1 July 2011 to 30 June 2012......................... 229

12.3           Southern Phone Company Dividend............................................................ 233

12.4           Australian Local Government Women’s Association (ALGWA) NSW Branch – State Conference...................................................................................................... 237

12.5           Result of Hospital Poll - Local Government Elections................................. 247

12.6           Local Government Infrastructure Renewal Scheme (LIRS) Funding Update 251

12.7           Community strategic plan review - community survey and special rate variation process.......................................................................................................................... 333

12.8           Quarterly Budget Review Statement for 30 June 2012.............................. 351

12.9           Presentation of Financial Statements and Audit report for the year ended 30 June 2012.......................................................................................................................... 361

12.10         Presentation of Draft Financial Statements for the year ended 30 June 2012       363


Council 31 October 2012                                                                                   Item 12.1

 

12.1.         Certificate of Investments made under Section 625 of the Local Government Act 1993     

 

To report the details of Council’s investments during the month of September 2012.

 

Finance Manager   

 

Background

Under the legislation and regulations mentioned below, the Responsible Accounting Officer must present to Council on a monthly basis the status of the investments held by Council. The Responsible Accounting Officer must detail the investments held, and their compliance with both internal policy and external regulation under the Ministerial Order of Investments.

In accordance with the recommendations made by the Division of Local Government Investment Policy Guidelines, published in May 2010 the Finance section has made the monthly Investments report an attachment to the Business Paper. This allows a stand-alone report to be published on Council’s website for the public to view without having to peruse the Council’s Agenda for the relevant meeting.

ISSUES

Legal

Section 625 of the Local Government Act 1993 determines that money may only be invested in a form of investment authorised by order of the Minister for Local Government published in the Local Government Gazette. The most recent Ministerial Order of Investment was published February 17, 2011.

Clause 212 of the Local Government (General) Regulation 2005 determines that the Responsible Accounting Officer must provide Council with a written report setting out details of all money that Council has invested under section 625 of the Local Government Act 1993.

The report must also include a certificate as to whether or not the investments have been made in accordance with the Local Government Act 1993, the regulations and the Council’s investment policy.

Policy

Council holds an Investment Policy published under policy number 1.3.2. This policy is reviewed annually, and was reconsidered on 9 October 2012.

Council’s current policy allows for investment of funds in cash term deposits only with rated Authorised Deposit-Taking Institutions (ADI’s). Council does not hold any investments in sub-prime or managed fund products. 

Financial

The attached report indicates a current investment portfolio of $ 50,038,829. These funds can be broken into the following Funds:

 

Funding source

July

August

September

General Fund

$32,412,682

$35,445,364

$35,726,596

Water Fund

$8,749,118

$8,749,118

$8,749,118

Sewer Fund

$5,844,348

$5,844,348

$5,844,348

 

8 Each fund’s allocation can only be utilised on its specific operations. For example, Water Fund cannot use its financial resources on General Fund projects, etc.

8 Externally Restricted is defined by purposes that are “restricted” by external legislation or regulations, such as unspent grants or loans tied to a specific project, or development contributions held for expenditure in accord with an adopted s94/s64 contributions plan.

Internally Restricted is defined by “restrictions” placed upon the use of these funds by Council internally, such as asset replacement, weeds, property, employee entitlements and the like.

Unrestricted funds are available for day to day operational uses, or emergencies. Those funds are reviewed daily for short term investment, depending on revenue cycles such as rates instalments.

 

ATTACHMENTS

1View. Certificate of Investments

 

Recommendation

1.       That the attached report indicating Council’s Investment position be received and noted.

2.       That the Certificate of the Responsible Accounting Officer be noted.

 


Council

31 October 2012

Item 12.1 - Attachment 1

Certificate of Investments

 


 


Council 31 October 2012                                                                                   Item 12.2

 

12.2.       Pecuninary Interest Returns 1 July 2011 to 30 June 2012     

 

Report confirming lodgement of Disclosure by Councillors and Designated Persons Returns (Pecuniary Interest Returns) for the period 1 July 2011 to 30 July 2012

 

General Manager  

 

Background

Councillors and “Designated People” are required to complete Pecuniary Interest Returns under Section 449 of the Local Government Act.  At its Extraordinary meeting held in September each year a report is presented to Council identifying “Designated People” required to complete Pecuniary Interest Returns under Section 449 of the Local Government Act for the coming year. 

Members of the public are entitled to inspect the returns of Councillors, Designated Persons and Delegates, free of charge.  The register containing completed returns is tabled at each Council meeting.

The Local Government Act 1993, provides for investigation of complaints concerning non-disclosure, incomplete sections and penalties for breaches. 

ISSUES

Legal

On 27 September 2011 Council resolved:

1.     That Councillors note that they are required to lodge Pecuniary Interest Returns under Section 449 of the Local Government Act.

2.     That the officers of the Council listed in the report submitted on 27 September 2011 be “designated persons” under the provisions of the Local Government Act requiring them to submit a Pecuniary Interest Return.

The following list represents officers of the Council who had (or their positions had) previously been “designated” by the Council as officers required to submit a Pecuniary Interest Return in that report or who were appointed to designated positions during the period:

Allison, Anthony

Hampshire, Jill

Robinson, Steve

Amberg, Penny

Hancock, Cecily

Sandford, Mike

Barnes, Leanne

Hicks, Rodney

Sartori, Wayne

Bogie Rebecca

Hicks, Tracy

Scarpin, Lucas

Blacka, Annadale

Jay, Lyn

Schweitzer, Simon

Browne Toby

Madigan, Danny

Slade, Colin

Canaider, Mark

McDermott, Tony

Slapp, Rob

Cattanach, Rob

Miles, Peter

Smith, Theresa

Collins, Jim

Murray, James

Stewart, Andrew

Churchward, Nina

Napal, Pankaj

Tegart, Peter

Cunningham, Richard

Newton, Peter

Thomson, Sophie

Dale, Ron

O’Donnell, Greg

Tipping, Jeff

Farram, Tait

Osborn, Brett

Tull, Keith

Fowler, Mark

Parker, Darrell

Van Bracht, Derek

Glover, Anna

Preo, Michelle

Van Tilburg, Michael

Griffin, Christine

Pyke, Jonathon

Williams, Graeme

Hankinson, Mark

Powell, Bruce

Woodley, Andrew

Herbert, Anne

Quick, Robert

 

It was also agreed at the Internal Audit Committee Meeting on 18 July 2011 that the independent representatives on that Committee lodge forms

Geoff Steel

John Deane

The following Councillors were also required to submit returns.

Allen, Tony

Fitzpatrick, Russell

Seckold, Liz

Britten, Michael

Pincini, Paul

Hughes, Keith

Campbell, Pat

Hede, David

Wykes, Graeme

 

Forms for the period 1 July 2011 to 30 June 2012 were due to be lodged by 30 September 2012.  All forms had been lodged with the following exceptions.

Name                                      Reason

          Mark Canaider                        Left the organisation

          Anthony Allison                       Left the organisation

          Penny Amberg                       Left the organisation

All Councillors and Officers required to submit Pecuniary Interest Returns have completed and returned the forms for the period 1 July 2011 to 30 July 2011.  Members of the public are entitled to inspect the returns of Councillors, Designated Persons and Delegates, free of charge.  The register containing completed returns is tabled at each Council meeting.

 

ATTACHMENTS

Nil

 

Recommendation

That Council note the report on Lodgement of Pecuniary Interest Returns period ending 30 June 2012

 


Council 31 October 2012                                                                                   Item 12.3

 

12.3.       Southern Phone Company Dividend     

 

Council is a shareholder in the Southern Phone Company Ltd.  The company has declared a dividend $1,350,000 of which $98,622.97 has been paid to Bega Valley Shire Council

 

Finance Manager  

 

Background

Southern Phone Company Limited is a local government-owned telecommunications provider that is an unlisted Public Company.  The company was established in late 2002 with the aim of improving competition in telecommunications, particularly in regional Australia.

There are 41 councils that hold two shares each in Southern Phone Company.  The shares were purchased for $1 each.  Only Councils can hold shares, with the shareholding being a means of returning profits to the community.

The company is now a national full-service telco, offering fixed line, mobile and internet services to customers in all states of Australia. 

The dividend it paid using a formula with 20% split equally among all 41 shareholders and the remaining 80% paid according to the amount of business generated in a Council’s area. 

The company’s Board has declared a dividend of $1,350,000.  This is triple the $450,000 dividend paid last year. 

A full list of the dividends paid to Councils is attached for Councillors information (Attachment 1).  The dividend paid to Bega Valley Council is $98,622.97.  Bega Valley Shire Council uses Southern Phone as a provider for some of its phone and internet services.

 

ATTACHMENTS

1View. Southern Phone 2011/12 Dividend Distribution

 

Recommendation

That Council note the dividend of $98,622.97 declared by Southern Phone Company Limited to Bega Valley Shire Council.

 


Council

31 October 2012

Item 12.3 - Attachment 1

Southern Phone 2011/12 Dividend Distribution

 

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Council 31 October 2012                                                                                   Item 12.4

 

12.4.       Australian Local Government Women’s Association (ALGWA) NSW Branch – State Conference     

 

The Australian Local Government Women’s Association (ALGWA) NSW Branch will be hosted by Gosford City Council from 14–16 March 2013.

 

General Manager  

 

Background

The 2013 ALGWA (NSW) Conference will be held in Gosford between 14-16 March 2013.  The theme for 2013 is “Strong Actions New Directions”  (SAND).  A copy of the Conference Program and Registration pack is attached (Attachment 1 and 2). The annual ALGWA conference provides a platform for Councillors and staff to gather to discuss current and emerging issues facing women in local government.

The Conference will be held at Ettalong Beach, with early bird registration available until 31 December 2012.

ISSUES

Financial

The cost for each delegate to attend the Conference includes the early bird registration fee of $895 (inc GST) or $995 (inc GST) for standard registration after 31 December 2012, as well as travel (airfares/train or vehicle), accommodation expenses ($187-$289/night) and incidental expenses.  Registration cost includes business papers, proceedings of the conference and some meals.

Council’s budget in 2012/13 for expenses incurred by Councillors acting as a delegate to Bega Valley Shire Council when outside the Shire is $19,000, of which approximately $6,999.75 has been expended, leaving a balance of $12,500.25.  The costs for attendance at this conference can be covered in this allocation.

It is unclear whether the NSW Shires Conference will be held in 2013, as the two Local Government Associations will merge. The final LGA conference will be held in Dubbo, with the first of the combined Associations expected early next financial year.

Operational Plan

The 2012-12 Operation Plan identified training and conference attendance by Councillors as an activity.

Conclusion

ALGWA conference provides a platform for councillors and staff to gather to discuss current and emerging issues facing women in local government. 

 

ATTACHMENTS

1View. ALGWA 2013 Conference Registration Form

2View. ALGWA 2013 Conference Program

 

Recommendation

That Councillor/s (to be determined at the meeting) be authorised to represent the Council at the Australian Local Government Women’s Association (ALGWA) NSW Branch – State Conference to be held in Gosford from 14 to 16 March 2013, and that the necessary expenses be defrayed by the Council in keeping with its policy.

 


Council

31 October 2012

Item 12.4 - Attachment 1

ALGWA 2013 Conference Registration Form

 

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Council

31 October 2012

Item 12.4 - Attachment 2

ALGWA 2013 Conference Program

 

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Council 31 October 2012                                                                                   Item 12.5

 

12.5.       Result of Hospital Poll - Local Government Elections     

 

The NSW Electoral Commission has provided the declaration of poll held at the Local Council elections on 8 September 2012, regarding the Pambula District Hospital.

 

General Manager   

 

Background

Council resolved to hold a Poll at the NSW Local Government Elections on Saturday 8 September 2012.

The poll question was:

Do you support the retention of the Pambula District Hospital funded at current total operational budget levels by NSW State Government for a period of 5 years, at approximately $7.5 million pa, from the completion and official opening of the proposed new regional hospital, so as to provide the essential services needed to supplement the new hospital during this period?

The results of the Poll as provided by the Returning Officer are set out below:

YES

15761

NO

3335

Formal

19096

Informal

627

TOTAL

19723

Council needs to now resolve as to the action to be taken in relation to the Poll result. It would seem appropriate for the Council to write to the Minister for Health providing the detail of the Poll outcome.

ISSUES

Policy

Council adopted an amended position statement on Health in 2011, following representations from the Save Our Hospital group:

Council continues to support the construction of a Regional Hospital in the Bega Valley and that pending construction of the new hospital, both the current Bega and Pambula hospitals are retained with existing services and are fully resourced to ensure that both hospitals remain viable. Council will work positively through its local members to bring about the improvement to health services within the Shire through the financial support of the state and federal governments and the initiative of local, private practitioners.

Council with the support of both Federal and State Governments, will work to ensure that the Pambula Hospital is to be retained now and in the future to provide all necessary services so the Pambula Hospital remains viable for the needs of the southern part of the Shire and in particular to provide emergency services and services referred to in the Coote-Kasper report and to supplement the new Regional Hospital.’’

Financial

The cost of the election and the Poll has not been provided to Council at this time. Council has been advised by the NSW Electoral Commission that it will be invoiced for the election costs in March 2013.

Conclusion

The Council held a Poll with the Local Government elections in September 2012. The proposed regional hospital is under design, and the NSW government is understood to have pledged retention of services at PDH – a matter that has been of concern to the community for some time.

The funding and operation of the hospital is a responsibility of the government. Council needs to resolve the action it will take in relation to the Poll results provided, which may include meeting with or sending result of Poll to the local member and Minister, and amending the Council position statement of Health.

 

ATTACHMENTS

1View. NSW Local Government Election LG 562 Declaration of Poll Bega Hospital September 2012

 

Recommendation

That Council determine the appropriate action/s following result of the poll from the 2012 NSW Local Government elections.

 


Council

31 October 2012

Item 12.5 - Attachment 1

NSW Local Government Election LG 562 Declaration of Poll Bega Hospital September 2012

 


Council 31 October 2012                                                                                   Item 12.6

 

12.6.       Local Government Infrastructure Renewal Scheme (LIRS) Funding Update     

 

This report is to provide an update on the status of Councils Local Infrastructure Renewal Scheme (LIRS) application.

 

Finance Manager  

 

Background

On 20 March, 2012 Council resolved to submit an application to the NSW State Government’s Local Infrastructure Renewal Scheme (LIRS) program. The LIRS program allowed Councils to request a reimbursement of 4% on the interest paid on loans drawn down to specifically address a backlog of infrastructure.

Council resolved to apply for the following project:

·     Bega Town Hall ($2m)

·     Bega Depot ($1.5m)

·     Merimbula Airport Runway Renewal ($3.5m)

·     Roads ($2m)

Each of these projects had been identified within Councils Community Strategic Plan as projects that required significant renewals and were reasonably close to commencement.

Council underwent an application process that required an independent audit of Councils financial performance by Treasury Corp (otherwise known as T-Corp), the NSW State Government’s funding body. T-Corp reviewed Councils Asset Management Plans, Long Term Financial Plan, and the past 3 years of Financial Statements in order to ascertain Council’s financial sustainability and capacity to service the level of debt as submitted in its application.

On July 16, 2012 Council was advised by the Division of Local Government that a press release would be issued from the office of the local state member Mr Andrew Constance MP. These press releases (attachments 1 & 2) advised that Council had been approved in principle for two of its four projects. Council was to receive LIRS funding for the Roads ($2m) and Merimbula Airport Runway Renewal ($3.5m) components of its application. Council was advised the approvals was subject to a satisfactory T-Corp audit process and a recommendation that Council could service the related debt the interest subsidy. There was no advice from the NSW State Government as to why two projects were approved and two denied, although the Bega Town Hall or Bega Depot projects were not “Shovel Ready” which may have played a part in those two projects being denied. The Division of Local Government did advise that those projects would be welcomed in Round 2 of the LIRS program. Round 2 opens in November and provides a 3% interest subsidy. 

On 9 October 2012 Council received the final report from T-Corp (attachment 3). This report provided analysis and commentary from an independent view point with a direct focus on whether Council was financially able to meet the commitments presented in it LIRS application via the LTFP. The T-Corp report reached the following conclusions:

The Council has been well managed over the review period based on the following observations:

·     Council has reported an operating surplus excluding capital grants and contributions in 2009 and 2010.  The 2011 results report an operating deficit of $1.5m with the deficit caused by increased depreciation and materials and contracts expenses primarily due to flooding in 2011

·     Council’s underlying cash result (measured using EBITDA) remained consistent over the three year period at around $19.0m per annum

·     Approximately 71.0% of the Council’s revenue base is derived from own sourced revenue (annual charges and user charges and fees).  This result is supported by an SRV of 3.49% (above rate peg) which is in place until 2031

Council reported an infrastructure backlog of $64.9m (9.4%) in 2011 with an infrastructure asset value of $687.3m.  Other observations include:

·     The Council’s infrastructure backlog is on an upward trend

·     Compared to benchmark ratios Council appear to be underspending on building and infrastructure asset renewal and asset maintenance.  However, Council has exceeded the Capital expenditure Ratio benchmark for the last three years indicating that they are spending on assets which improve performance or capacity

·     The most significant proportion of the backlog relates to roads at 57.0%, with building and other structures at 17.0%.  Both of these backlogs are being addressed in the LIRS applications

The key observations from our (LIRS) review of Council’s 10 year forecasts for its General Fund are:

·     The forecast shows a surplus position is expected in the operating result each year after 2014 when capital grants and contributions are excluded

·     Overall Council’s level of fiscal flexibility is sound as own sourced revenue is maintained at levels above 64% from 2013

·     Cash Expense Ratios are well above benchmark indicating Council will have sufficient liquidity throughout the next 10 years to service short term liabilities and currently scheduled capital expenditure

In our view, the Council has the capacity to undertake the combined additional borrowings of $9.0m for the projects applied for under LIRS.  This is based on the following analysis:

·     The DSCR remains above benchmark over the 10 year forecast period

·     The interest cover is well above benchmark for the 10 year forecast

·     Based on a benchmark of DSCR>2x, we believe Council could borrow an additional $6.0m in addition to the $9.0m borrowings proposed under LIRS in 2012/13

In respect of the Benchmarking analysis, TCorp has compared the Council’s key ratios, on a consolidated basis, with other councils in DLG Group 4.  The key observations are:

·     Council’s financial flexibility was sound, as indicated by the Operating Ratio and the Own Source Operating Revenue Ratio which generally outperformed the group’s average

·     Council’s liquidity position was very strong and generally outperformed the group’s average

·     Council has a similar level of gearing to its peers, and its DSCR and Interest Cover Ratio were acceptable in the past three years

·     Council’s Infrastructure Backlog was slightly better than the group’s average but well above the benchmark throughout the review period.  Council’s asset maintenance and asset renewal were on par with the group’s average.  Capital works were sufficient and are forecast to increase over the medium term

The T-Corp report then made the following recommendations:

Based on our review of both the historic financial information and the 10 year financial forecast within Council’s LTFP, we consider Council to be in a satisfactory financial position in terms of their operating performance.  Both past performance and the financial forecasts support our findings that Council has sufficient financial capacity to service the additional borrowings proposed under its LIRS application.

We base our recommendation on the following key points:

·     Council has sufficient financial capacity to manage the additional $9.0m debt highlighted by a DSCR and Interest Cover Ratio above the benchmarks in all 10 years of its financial forecast

·     Council has an infrastructure backlog of $64.9m and Public Roads and Buildings and Infrastructure comprise 71.0% of the total backlog.  Council are seeking to address these asset classes in its LIRS projects

·     Council has undertaken capital expenditure in the last three years at a level to enhance their  IPP&E

·     Council has engaged external advisers to provide assistance in reviewing its operating and capital investment position and options

·     Council are aware of the impacts of climate change on their community.  They mitigate these risks by developing their floodplain mapping to more accurately predict flood hazards and prepare for flood risks

·     The quality of management plans, asset management plans, and operating plans also suggest that Council are well managed and adequately resourced

 

However we would also recommend that the following points be considered:

·     As revenues are increasing at much lower rates than expenses, Council needs to develop strategies to address this imbalance between revenue and expense growth.  The Internal Audit Committee in place should assist with this process

ISSUES

Legal

Council is waiting for the Division of Local Government to issue a contract formally approving and offering the LIRS subsidy. In order to activate the agreement Council must commence work on the approved projects within 12 months of the dated contract. Once Council has a duly authorised contract with the Division of Local Government, Council will commence negotiations with financial institutions for the provision of the relevant loans to commence work.

Financial

Merimbula Airport Runway Renewal: Within Council’s Delivery Plan, the Merimbula Airport runway renewal was to be funded by a loan with a term of twenty years. Council successfully applied to IPART to retain an expiring rate variation of $332k pa in 2011, to be applied towards the repayment of the loan funding the renewal works. Council has confirmed with the Independent Pricing and Regulatory Tribunal (IPART) that as long as the revenue raised through the special variation is expended on the provision of debt used to service the renewal project, there is no issue with Council leveraging the project through LIRS. As a result, Council would be able to borrow up to approximately $6m and retain an annual repayment of $332,000 per annum over 20 years. The indexed variation is to be placed in the asset reserve for future renewals.

However, subject to Council’s decision on tenders following it’s rescission of previous resolutions on runway tenders and airport strategy, the funding of the portion of renewal v upgrade contained in any new tender or negotiation, may require matching to the amount of debt and term capable of being serviced by the rate variation. Most likely, the current rate variation may fund around $5m of airport renewals at current interest rates over 20 years. As suggested in previous reports, Council may then apply the LIRS subsidy ($140k pa IO for 10 years) to other infrastructure renewals, or in turn service a further debt over $1m over a 10yr term.

Roads: Within Councils Long Term Financial Plan (LTFP) and Asset Management Plans (AMP), Council has scheduled an increase in renewals of all asset classes over the next ten years. The LTFP scheduled a number of loans over the first 3 years of the plan to allow large sections of renewals work to occur in order to reduce Councils infrastructure backlog. By utilising the LIRS funding in roads, Council is able to continue that borrowing program but at a significantly reduced cost. The estimated savings for Council on the road component of the LIRS approval is approximately $800,000 over ten years, subject to the detail in the LIRS contract.

Similarly to the airport loan subsidy, Council may also consider borrowing more for roads renewals, utilising the annual subsidy of $80k over 10 years.

Policy

On 8 October, 2012 the Division of Local Government issued Circular 12-37 (attachment 4) advising that round 2 of the LIRS program was being established for implementation in the 2013/2014 financial year.

The Division of Local Government advises that application forms will be made available early November 2012 with a closing date of 31 December, 2012 with a decision made in May 2013. The Division of Local Government has issued guidelines (attachment 5) for Councils to use to determine if they wish to apply for Round 2 funding.

While the program is still aimed at enabling Councils to undertake backlog reduction renewal works. Round 2 of the LIRS program has been refined from Round 1. Some of the more significant changes are:

·     A maximum of 2 projects per Council

·     The subsidy reduced from 4% to 3%

·     New Capital projects (not backlog) whereby the project assists in creating new residential housing. These projects must be critical in directly enabling residential housing development. The program does not extend to Commercial dwellings.

·     The program still has a loan term maximum of ten years, but does mention a priority being given to shorter term projects.

Conclusion

This report is seeking the authority to accept and action the LIRS funding agreement when it is issued by the Division of Local Government.

Secondly, Council has the option of applying for LIRS round 2 funding for implementation in the 2013/14 financial year. Council is able to re-submit the two projects that were initially declined in round 1 or indeed, provide two new projects if any can identified. If Council were successful with an application for the projects that were declined in round 1 it would result in a saving to Council of over $600,000 over ten years.

T-Corp has provided a very positive assessment of Council’s financial management capacity and ability to service debt. As briefed to councillors, NSW government has also recently assessed Council’s asset management plans and integration with LTFP. A separate report will be presented when that assessment is received.

 

ATTACHMENTS

1View. LIRS DLG Media Release: Airport

2View. LIRS DLG Media Release: Roads

3View. LIRS TCorp Final Report

4View. LIRS Rd2 Circular 12-37

5View. LIRS Rd2 DLG Guidelines

 

Recommendation

1.   That Council note the attachment to the report advising that the NSW State Government has approved Bega Valley Shire Council for LIRS subsidy under the provision that T-Corp approve Council financial position.

2.   That Council note the attachment to the report advising that T-Corp approves Council’s financial serviceability in relation to LIRS subsidy.

3.   That Council authorise the Mayor and General Manager to accept and authorise the LIRS funding agreement.

4.   That Council resolve to submit an application to round 2 of the LIRS program, seeking a 3% subsidy on the two projects not previously awarded to Council in round 1 of the LIRS program, including the Bega Depot ($1.5m) and the Bega Town Hall ($2.0m).

 


Council

31 October 2012

Item 12.6 - Attachment 1

LIRS DLG Media Release: Airport

 

 

Monday 16 July 2012

 

MERIMBULA AIRPORT TO GET $4.5M REVAMP

                                                                                                          

Merimbula Airport will get a $4.5 million revamp thanks to a generous loan subsidy from the NSW Government’s Local Infrastructure Renewal Scheme, Member for Bega Andrew Constance said today.

 

The $70 million scheme provides councils with a four per cent interest subsidy over 10 years on loans to allow infrastructure projects which languished for 16 years under Labor to finally go ahead.

Minister for Local Government Don Page said the scheme would unlock shovel-ready infrastructure projects for communities across the State.

Mr Constance said the airport project involves the renewal of the existing 1600m runway, provision of lighting, and renewal of the apron as well as the taxiway.

“I am delighted the NSW Government can assist our community to finally begin work on this vital project after years of Labor neglect," Mr Constance said.

“Merimbula Airport is a vital piece of infrastructure for the region, servicing over 50,000 passengers a year.

 

“It is a vital link to the rest of the nation for our community.’’

 

Bega Valley Shire Council plans to borrow $3.5 million to fund the work, assisted by the State Government’s interest rate subsidy under the NSW Government’s Local Infrastructure Renewal Scheme.

Mr Page said the projects covered by the scheme include roads, bridges, community halls, libraries, paths, parks, water facilities and airports.

The scheme is expected to give the green light to up to $1 billion worth of infrastructure across the State.

“Almost 100 applications from councils across the State were received for funding - a response which illustrated how dire the backlog in infrastructure was under the previous Labor Government,” Mr Page said.


“This scheme is a promise kept by the NSW Liberals & Nationals. It will create jobs, develop and renew infrastructure and improve the quality of life for the people of NSW.

 

“With the first round of applications complete, there is still $60 million to fund other projects across the State in future rounds of grants under the scheme," Mr Page said.

Mr Page urged councils who missed out to apply for the second round of funding, expected to open by the end of the year.

CONTACT: 6492 2956


Council

31 October 2012

Item 12.6 - Attachment 2

LIRS DLG Media Release: Roads

 

 

Monday 16 July 2012

 

BEGA TO GET ROADS FACELIFT WORTH NEARLY $8M

                                                                                                          

Bega’s roads will get a $7.9 million facelift thanks to a generous loan subsidy from the NSW Government’s Local Infrastructure Renewal Scheme, Member for Bega Andrew Constance said today.

 

The $70 million scheme provides councils with a four per cent interest subsidy over 10 years on loans to allow infrastructure projects which languished for 16 years under Labor to finally go ahead.

Minister for Local Government Don Page said the scheme would unlock shovel-ready infrastructure projects for communities across the State.

Mr Constance, who is also NSW Minister for Ageing, said the Bega project involves the renewal of roads in urban areas that have been identified under the Bega Valley Shire Council Asset Management Plan as needing attention.

“I am delighted the NSW Government can assist our community to finally begin work on this vital project, after years of Labor neglect," Mr Constance said.

“The project will help make driving on our roads safer and easier for residents and visitors alike.’’

Bega Valley Shire Council plans to borrow $2 million of the project cost, to help fund the work, assisted by the State Government’s interest rate subsidy under the NSW Government’s Local Infrastructure Renewal Scheme.

Mr Page said the projects covered by the scheme include roads, bridges, community halls, libraries, paths, parks, water facilities and airports.

The scheme is expected to give the green light to up to $1 billion worth of infrastructure across the State.

“Almost 100 applications from councils across the State were received for funding - a response which illustrated how dire the backlog in infrastructure was under the previous Labor Government,” Mr Page said.


“This scheme is a promise kept by the NSW Liberals & Nationals. It will create jobs, develop and renew infrastructure and improve the quality of life for the people of NSW.

 

“With the first round of applications complete, there is still $60 million to fund other projects across the State in future rounds of grants under the scheme," Mr Page said.

Mr Page urged councils who missed out to apply for the second round of funding, expected to open by the end of the year.

NSW Treasurer Mike Baird said the Government was serious about building for the future.

"What we are saying to councils is that we will help share the burden on borrowing costs on the loans required to tackle the infrastructure backlog," Mr Baird said.

CONTACT: 6492 2056


Council

31 October 2012

Item 12.6 - Attachment 3

LIRS TCorp Final Report

 

Bega Valley Shire Council

 

Financial Assessment and Benchmarking Report

 

 

 

 

 

 

8 October 2012

 

Prepared by NSW Treasury Corporation as part of the Local Infrastructure Renewal Scheme


Disclaimer

This report has been prepared by New South Wales Treasury Corporation (TCorp) in accordance with the appointment of TCorp by the Division of Local Government (DLG) as detailed in TCorp’s letters of
22 December 2011 and 28 May 2012.  The report has been prepared as part of the Local Infrastructure Renewal Scheme (LIRS) announced by the NSW Government.

The report has been prepared based on information provided to TCorp as set out in Section 2.2 of this report.  TCorp has relied on this information and has not verified or audited the accuracy, reliability or currency of the information provided to it for the purpose of preparation of the report.  TCorp and its directors, officers and employees make no representation as to the accuracy, reliability or completeness of the information contained in the report.

In addition, TCorp does not warrant or guarantee the outcomes or projections contained in this report.   The projections and outcomes contained in the report do not necessarily take into consideration the commercial risks, various external factors or the possibility of poor performance by the Council all of which may negatively impact the financial capability and sustainability of the Council.  The TCorp report focuses on whether the Council has reasonable capacity, based on the information provided to TCorp, to take on additional borrowings within prudent risk parameters and the limits of its financial projections.

The report has been prepared for Bega Valley Shire Council, the LIRS Assessment Panel and the DLG. TCorp shall not be liable to Bega Valley Shire Council or have any liability to any third party under the law of contract, tort and the principles of restitution or unjust enrichment or otherwise for any loss, expense or damage which may arise from or be incurred or suffered as a result of reliance on anything contained in this report.

 

 

 

 

 

 

 

 

 

 

 


Index

 

Section 1                Executive Summary. 4

Section 2                Introduction. 6

2.1:         Purpose of Report 6

2.2:         Scope and Methodology. 6

2.3:         Overview of the Local Government Area. 8

2.4:         LIRS Application. 9

Section 3                Review of Financial Performance and Position. 10

3.1:         Revenue. 10

3.2:         Expenses. 11

3.3:         Operating Results. 12

3.4:         Financial Management Indicators. 13

3.5:         Statement of Cashflows. 13

3.6:         Capital Expenditure. 15

3.6(a):          Infrastructure Backlog. 15

3.6(b):          Infrastructure Status. 16

3.6(c):          Capital Program.. 17

3.7:         Specific Risks to Council 17

Section 4                Review of Financial Forecasts. 19

4.1:         Operating Results. 19

4.2:         Financial Management Indicators. 20

4.3:         Capital Expenditure. 22

4.4:         Financial Model Assumption Review.. 23

4.5:       Borrowing Capacity. 24

Section 5                Benchmarking and Comparisons with Other Councils. 25

Section 6                Conclusion and Recommendations. 31

Appendix A             Historical Financial Information Tables. 32

Appendix B         Glossary. Error! Bookmark not defined.5

 


 

Section 1       Executive Summary

This report provides an independent assessment of Bega Valley Shire Council’s (the Council) financial capacity and its ability to undertake additional borrowings. The analysis is based on a review of the historical performance, current financial position, and long term financial forecasts.  It also benchmarks the Council against its peers using key ratios.

The report is primarily focused on the financial capacity of the Council to undertake additional borrowings as part of the Local Infrastructure Renewal Scheme (LIRS).

Council has made four LIRS applications for roads, building infrastructure and airport renewal projects, for a total of $9.0m.  The roads and building infrastructure projects are to be repaid over 10 years.  The airport renewal project is to be repaid over 20 years with the LIRS subsidy applicable for 10 years only.

We understand that two of Councils LIRS applications have been approved during the first round of applications totalling $5.5m. 

We have not adjusted our analysis on the basis that we would expect Council to continue with the two projects not approved, either as part of round two applications under LIRS or on their own account.

TCorp’s approach has been to:

·     Review the most recent three years of Council’s consolidated financial results

·     Conduct a detailed review of the Council’s 10 year financial forecasts.  The review of the financial forecasts focused on the particular Council fund that was undertaking the proposed debt commitment.  As the Council operates three funds we focused our review on the General Fund as the loan will be attached to the General Fund

 

The Council has been well managed over the review period based on the following observations:

·     Council has reported an operating surplus excluding capital grants and contributions in 2009 and 2010.  The 2011 results report an operating deficit of $1.5m with the deficit caused by increased depreciation and materials and contracts expenses primarily due to flooding in 2011

·     Council’s underlying cash result (measured using EBITDA) remained consistent over the three year period at around $19.0m per annum

·     Approximately 71.0% of the Council’s revenue base is derived from own sourced revenue (annual charges and user charges and fees).  This result is supported by an SRV of 3.49% (above rate peg) which is in place until 2031

 

 

 

 

 

Council reported an infrastructure backlog of $64.9m (9.4%) in 2011 with an infrastructure asset value of $687.3m.  Other observations include:

·     The Council’s infrastructure backlog is on an upward trend

·     Compared to benchmark ratios Council appear to be underspending on building and infrastructure asset renewal and asset maintenance.  However, Council has exceeded the Capital expenditure Ratio benchmark for the last three years indicating that they are spending on assets which improve performance or capacity

·     The most significant proportion of the backlog relates to roads at 57.0%, with building and other structures at 17.0%.  Both of these backlogs are being addressed in the LIRS applications

The key observations from our review of Council’s 10 year forecasts for its General Fund are:

·     The forecast shows a surplus position is expected in the operating result each year after 2014 when capital grants and contributions are excluded

·     Overall Council’s level of fiscal flexibility is sound as own sourced revenue is maintained at levels above 64% from 2013

·     Cash Expense Ratios are well above benchmark indicating Council will have sufficient liquidity throughout the next 10 years to service short term liabilities and currently scheduled capital expenditure

In our view, the Council has the capacity to undertake the combined additional borrowings of $9.0m for the projects applied for under LIRS.  This is based on the following analysis:

·     The DSCR remains above benchmark over the 10 year forecast period

·     The interest cover is well above benchmark for the 10 year forecast

·     Based on a benchmark of DSCR>2x, we believe Council could borrow an additional $6.0m in addition to the $9.0m borrowings proposed under LIRS in 2012/13

In respect of the Benchmarking analysis, TCorp has compared the Council’s key ratios, on a consolidated basis, with other councils in DLG Group 4.  The key observations are:

·     Council’s financial flexibility was sound, as indicated by the Operating Ratio and the Own Source Operating Revenue Ratio which generally outperformed the group’s average

·     Council’s liquidity position was very strong and generally outperformed the group’s average

·     Council has a similar level of gearing to its peers, and its DSCR and Interest Cover Ratio were acceptable in the past three years

·     Council’s Infrastructure Backlog was slightly better than the group’s average but well above the benchmark throughout the review period.  Council’s asset maintenance and asset renewal were on par with the group’s average.  Capital works were sufficient and are forecast to increase over the medium term

 


Section 2       Introduction

2.1:         Purpose of Report

This report provides the Council with an independent assessment of their financial capacity and performance measured against a peer group of councils which will complement their internal due diligence, and the IP&R system of the Council and the DLG.

The report is to be provided to the LIRS Assessment Panel for its use in considering applications received under the LIRS.

The key areas focused on are:

·     The financial capacity of the Council to undertake additional borrowings

·     The financial performance of the Council in comparison to a range of similar councils and measured against prudent benchmarks

2.2:         Scope and Methodology

TCorp’s approach was to:

Review the most recent three years of the Council’s consolidated audited accounts using financial ratio analysis. In undertaking the ratio analysis TCorp has utilised ratio’s substantially consistent with those used by Queensland Treasury Corporation (QTC) initially in its review of Queensland Local Government (2008), and subsequently updated in 2011

·     Conduct a detailed review of the Council’s 10 year financial forecasts including a review of the key assumptions that underpin the financial forecasts.  The review of the financial forecasts focused on the particular Council fund that was undertaking the proposed debt commitment.  For example where a project is being funded from the General fund we focussed our review on the General fund

·     Identify significant changes to future financial forecasts from existing financial performance and highlight risks associated with such forecasts

·     Conduct a benchmark review of a Council’s performance against its peer group

·     Prepare a report that provides an overview of the Council’s existing and forecast financial position and its capacity to meet increased debt commitments

·     Conduct a high level review of the Council’s IP&R documents for factors which could impact the Council’s financial capacity and performance

In undertaking its work, TCorp relied on:

·     Council’s audited financial statements (2008/09 to 2010/11)

·     Council’s financial forecast model

·     Council’s IP&R documents

·     Discussions with Council officers

·     Council’s submissions to the DLG as part of their LIRS application

·     Other publicly available information such as information published on the IPART website

Benchmark Ratios

In conducting our review of the Councils’ financial performance and forecasts we have measured performance against a set of benchmarks.  These benchmarks are listed below.  Benchmarks do not necessarily represent a pass or fail in respect of any particular area.  One-off projects or events can impact a council’s performance against a benchmark for a short period.  Other factors such as the trends in results against the benchmarks are critical as well as the overall performance against all the benchmarks.  As councils can have significant differences in their size and population densities, it is important to note that one benchmark does not fit all.

For example, the Cash Expense Ratio should be greater for smaller councils than larger councils as a protection against variation in performance and financial shocks.

Therefore these benchmarks are intended as a guide to performance.

The Glossary attached to this report explains how each ratio is calculated.

 

Ratio

Benchmark

Operating Ratio

> (4.0%)

Cash Expense Ratio

> 3.0 months

Unrestricted Current Ratio

> 1.50x

Own Source Operating Revenue Ratio

> 60.0%

Debt Service Cover Ratio (DSCR)

> 2.00x

Interest Cover Ratio

> 4.00x

Infrastructure Backlog Ratio

< 0.02x

Asset Maintenance Ratio

> 1.00x

Building and Infrastructure Asset Renewal Ratio

> 1.00x

Capital Expenditure Ratio

> 1.10x

 


2.3:         Overview of the Local Government Area

Bega Valley LGA

Locality & Size

 

Locality

South East Coast

Area

6,280km²

DLG Group

4

Demographics

Population

34,035

% under 18

24%

% between 18 and 59

48%

% over 60

28%

Expected population 2025

41,659

Operations

Number of employees (FTE)

270

Annual revenue

$71.5m

Infrastructure

Roads

1,420km

Bridges

227

Infrastructure backlog value

$64.9m

Total infrastructure value

$687.3m

 

Bega Valley Shire Council Local Government Area (LGA) is located at the south-eastern extremity of New South Wales.  The LGA’s coastal fringe extends from Wallaga Lake in the north, and to Cape Howe, and the Victorian border in the south.  Collectively this 225 kilometre section of coastline forms the Sapphire Coast.

The LGA has one identified regional centre, Bega and three main towns Merimbula, Eden and Bermagui.  Approximately 73% of the Shire’s 6,280 square kilometres are National Park or State Forest.

The current population is expected to grow by 22% to 41,659 by 2025.

Council had 270 full-time equivalent employees at the end of 2011.

 

 

 

 

 

2.4:         LIRS Application

Council made four LIRS applications.

We understand that two of Councils LIRS applications (Projects 2 and 4) have been approved during the first round of applications totalling $5.5m. 

Project 1: Bega Works Depot Renewal

Description: Replacement of crew amenities, refurbishment of works administration and workshop at Bega Maher Street Depot

Amount of loan facility: $1.5m

Term of loan facility: 10 years

 

Project 2:  Urban Roads Renewal Scheme

Description:  Renewal of collector roads in urban areas

Amount of loan facility: $2.0m

Term of loan facility: 10 years

 

Project 3: Bega Town Hall Renewal

Description: Demolition and rebuilding of superstructure and facilities of Town Hall

Amount of loan facility: $2.0m

Term of loan facility: 10 years

 

Project 4: Merimbula Airport Infrastructure Renewal

Description: Renewal of existing runway, lighting, apron and taxiway

Amount of loan facility: $3.5m

Term of loan facility: 10 years

 

 


Section 3       Review of Financial Performance and Position

In reviewing the financial performance of the Council, TCorp has based its review on the annual audited accounts of the Council unless otherwise stated.

3.1:         Revenue

 

 

 

 

 

 

 

 

 

 

 

 


Key Observations

·     Total Revenue increased over the three year period by 17.3% to $71.5m in 2011.

·     Rates and annual charges increased by 7.8% in 2010 and 5.4% in 2011 to $37.3m.  Council was granted the renewal of an existing SRV in 2011 of 3.49% above rate peg until 2031 to fund tourism promotion, and service loan repayments for the resurface of Merimbula Airport runway additional to the LIRs funding.  This contributed to the additional $1.9m in revenue in 2011.  The SRV combined with increased revenue in sewage services contributed towards the overall increase in 2010.

·     Council also applied for an additional SRV of 2.8% above the rate peg in 2011 for expenditure on road renewal.  This application was rejected.

·     User fees and charges increased marginally between 2010 and 2011.  In 2009 Caravan Park fees generated revenue of $1.0m.  In 2011 this revenue was reclassified as discontinued operations following the responsibility of their management being assumed by the Land and Property Management Authority (LPMA).  The transfer resulted in a $6.1m loss from discontinued operations being disclosed in the operating results.  This is not a cash loss but a loss in caravan assets.

·     Operating Grants and contributions rose for the second consecutive year.  Following an increase of 13.1% in 2010, 2011 saw an increase of 23.9% due to Council being allocated an additional $3.3m in operating grants for flood restoration following the floods in March 2011.

 

3.2:         Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 


Key Observations

·     Employee costs in 2011 are equal to 32.8% of total expenses, compared to 34.2% in 2009. 2011 saw an increase of 12.4% in employee costs due to a significant increase in overtime to outdoor staff because of the increase in the number of emergency events.  Superannuation also increased as a result of the Defined Benefit Super Scheme requiring an injection of funds to maintain its liquidity.  Council also had a one-off increase in Workers Compensation claims in 2011 following a major incident.

·     Materials and contract expenses increased by 42.0% to $23.7m between 2009 and 2011.  2011 had the largest increase of $4.5m due to a combination of carryover works from 2010 and increased works associated with flood damage.  However, this expense is substantially offset by a $3.3m increase in operating grants for flood restoration.

·     The Asset Revaluations process resulted in the value of Council’s roads, bridges, footpaths and other structures increasing by $174.9m since 2009.  The Asset Revaluation resulted in the 2011 depreciation expense increasing by $4.2m to $18.1m.

·     Other expenses have fluctuated over the period increasing by 5.3% in 2010 and subsequently decreasing by 2.8% in 2011.  2010 included a bad debt expense of $0.5m arising from a contractual dispute.  This was resolved and is not of a recurring nature.

3.3:         Operating Results          

TCorp has made some standard adjustments to focus the analysis on core operating council results.  Grants and contributions for capital purposes, realised and unrealised gains on investments and other assets are excluded, as well as one-off items which Council have no control over (e.g. impairments). 

TCorp believes that the exclusion of these items will assist in normalising the measurement of key performance indicators, and the measurement of Council’s performance against its peers.

All items excluded from the income statement and further historical financial information is detailed in Appendix A.

 

 

 

 

 

 

 

 

 

 

 

 

Key Observations

·     Council reported net operating surpluses excluding capital grants and contributions in 2009 and 2010.  The 2011 results were adversely affected by increases in depreciation charges, employee expenses, and materials and contracts expenses. 

·     Council expenses include a non-cash depreciation expense of $18.2m in 2011 which is an increase of $4.2m from 2009 following the Asset Revaluations process.  Whilst the non-cash nature of depreciation can favourably impact on ratios such as EBITDA that focus on cash, depreciation is an important expense as it represents the allocation of the value of an asset over its useful life.

3.4:         Financial Management Indicators

 

Performance Indicators

Year ended 30 June

 

2011

2010

2009

EBITDA ($’000’s)

18,912

19,840

19,656

Operating Ratio

(2.2%)

5.3%

5.4%

Interest Cover Ratio

8.30x

8.36x

8.49x

Debt Service Cover Ratio

3.85x

4.05x

4.11x

Unrestricted Current Ratio

2.78x

2.50x

2.07x

Own Source Revenue

0.60x

0.66x

0.64x

Cash Expense Ratio

9.19 months

10.6 months

10.4 months

Net assets ($'000’s)

821,545

768,194

581,642

Key Observations

·     Council’s EBITDA has been maintained at consistent levels over the last three years.

·     The Operating Ratio for 2011, while above the benchmark, is lower than 2010 mainly due to increased depreciation, and materials and contracts expenses.

·     Council’s Interest Cover Ratio and DSCR were above their respective benchmarks indicating Council have flexibility in regard to carrying more debt.

·     The Unrestricted Current Ratio has been above benchmark each year indicating Council have sufficient liquidity.

·     The Own Source Operating Revenue is above the 60% benchmark.  This indicates that Council have sufficient financial flexibility.

·     The Cash Expense Ratio was well above benchmark all three years indicating Council have sound liquidity.

·     Council’s Net Assets have increased by $240.0m between 2009 and 2011 due to Asset Revaluations which have increased the value of roads, bridges and drainage infrastructure.  An impairment of $4.9m was recognised due to the value of infrastructure assets being adversely affected in the March 2011 floods with grants for flood restoration of $3.3m received.

·     When the Asset Revaluations are excluded, the underlying trend in all three years has been an increase in the infrastructure, property, plant and equipment (IPP&E) asset base with asset purchases being greater than the combined value of disposed assets and annual depreciation.  Over the three years this amounted to a $16.6m increase, including impairments, in IPP&E assets.

·     Council has total borrowings of $32.9m representing 4.0% of Net Assets.

 

 

 

3.5:         Statement of Cashflows

 

 

 

 

 

 

 

 

 

 


Key Observations

·     While cash and cash equivalents remained static between 2011, they increased by 12.7% between 2009 and 2010 due to the reduction in capital expenditure and investing activities.

·     The cash balances along with the Unrestricted Current Ratio indicate Council had sound liquidity.

·     Of the $45.5m in cash and investments, $32.6m is externally restricted, $11.3m is internally restricted and $1.6m is unrestricted.

·     The investment portfolio comprises $5.2m held in long term deposits.  Council do not hold any CDO’s or FRN’s.

 

 

 

 

3.6:         Capital Expenditure

The following section predominantly relies on information obtained from Special Schedules 7 and 8 that accompany the annual financial statements.  These figures are unaudited and are therefore Council’s estimated figures.

3.6(a):    Infrastructure Backlog

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Council reported a $64.9m infrastructure backlog in 2011, of which 57% ($37.0m) relates to public roads.  Council are seeking to address part of their roads infrastructure backlog in their LIRS projects.

 

3.6(b):    Infrastructure Status

Infrastructure Status

Year ended 30 June

 

2011

2010

2009

Bring to satisfactory standard ($’000’s)

64,975

63,975

62,510

Required annual maintenance ($’000’s)

17,727

17,727

17,140

Actual annual maintenance ($’000’s)

15,766

17,525

12,786

Total value of infrastructure assets ($’000’s)

567,074

566,301

523,191

Total assets ($’000’s)

871,673

820,154

633,636

Infrastructure Backlog Ratio

0.11x

0.11x

0.12x

Asset Maintenance Ratio

0.89x

0.99x

0.75x

Building and Infrastructure Renewals Ratio

0.82x

0.89x

1.00x

Capital Expenditure Ratio

1.82x

1.15x

1.32x

The Infrastructure Backlog Ratio has improved since 2009 as the total value of infrastructure assets has increased due to the Asset Revaluation.

The Asset Maintenance Ratio, and Building and Infrastructure Asset Renewal Ratio indicate the Council is spending at levels marginally below the benchmark on asset renewal and asset maintenance. 

The Capital Expenditure Ratio which takes into account capital expenditures which improve performance or capacity, indicate Council’s asset base is being enhanced over the last three years. However if capital expenditure priority remains on expenditure on new assets rather than asset renewal, the backlog is likely to increase.

Based on these figures, the quality of the existing asset base may decline and Council need to focus on improving this if current service levels are to be maintained.

 

 

 

 

 

 

 

 

 

3.6(c):    Capital Program

The following figures are sourced from the Council’s Annual Financial Statements at Special Schedule No. 8 and are not audited.  New capital works are major non-recurrent projects.

Capital Program ($’000’s)

Year ended 30 June

 

2011

2010

2009

New capital works

20,765

8,327

9,355

Replacement/refurbishment of existing assets

13,249

10,568

11,498

Total

34,014

18,895

20,853

 

Major projects in 2012 included:

·     Yellowpinch pipeline project. $11.2m

Major projects over the next 10 years include:

·     Bridges $3.6m - upgrade

·     Collector roads $10m - upgrade

·     Bega town hall $5.5m - renewal

·     Littleton gardens $0.6m - renewal

·     Merimbula airport runway $4.5m – renewal

·     Merimbula library $1.5m - renewal

·     Merimbula bypass and Mobil site $5.4m -  renewal - construction of bypass of Merimbula CBD

·     Merimbula service road $1.2m - upgrade

·     Pambula sports complex $0.75m - upgrade

·     Bega and Merimbula CBD streetscapes $1m each - upgrade

·     Bermagui and Eden CBD streetscapes $0.5m each - upgrade

 

 

 

 

 

 

 

 

 

3.7:         Specific Risks to Council

·     Expense growth.  Expenses have increased by 27.0% since 2009 with an increase of 17.6% in 2011.  Rising employee and materials and contractors costs (and depreciation) are the main drivers.  As revenues are increasing at much lower rates than expenses, Council needs to develop strategies to address this imbalance between revenue and expense growth.

·     Ageing population.  The LGA has a high proportion of aged persons, which is growing at a rate greater than the average population growth for the LGA.  It is predicted that 25.0% of the LGA population will be over the age of 65 by 2030.  This will place additional pressure on existing infrastructure and services and also significantly increase Council’s expenditure due to increased pensions contributions.

·     Tourism is a key driver of the local economy.  Following national trends, the number of tourists are decreasing and adversely affecting the local economy.  Council considers its long-term role in the industry is in the strategic development and placement of tourist/recreational infrastructure and signage to reflect the LGA’s ‘brand’.  Council have submitted proposals to Local Government and hope to implement a more tiered rating structure where business’ pay pro-rata for maintaining tourism infrastructure.

·     The LGA is subject to climate change and its impacts.  The LGA has had six natural disaster declarations since 2009.  These include four for storms and floods, and two for bushfires. Council is reliant on State and Federal grants for various natural disaster funds.   A flood survey has been completed and Council is in the process of developing floodplain mapping to more accurately predict flood hazards and prepare for flood risks.


 

Section 4       Review of Financial Forecasts

The financial model shows the projected financial statements and assumptions for the next 10 years.  The model includes the proposed $9.0m loan relating to the four proposed LIRS projects without any LIRS subsidy.

The LIRS loan relates to the General Fund, therefore we have focused our financial analysis solely upon this Fund.  Council’s consolidated position includes both a Water and Sewer Fund however these are operated as independent entities, which unlike the General Fund are able to adjust the appropriate fees and charges to meet all future operating and investing expenses.

 

4.1:         Operating Results

 

 

 

 

 

 

 

 


The Council’s operating results forecast a deficit position until 2014 when capital grants and contributions are excluded.  From 2014 Council forecast a surplus each year with a total increase of 20.0% over the entire forecast period.  Council have forecast Operating Revenue to increase at a faster rate than operating expenses.  Whilst this is not in line with historic results, Council is actively engaged in reviewing its procurement practices, workplace agreements and other work practices which it believes will allow it to improve cost control.

 

 

 

 

 

 

4.2:         Financial Management Indicators

Liquidity Ratios

The Cash Expense Ratio is above benchmark for the term of the forecast and indicates that Council will have sufficient liquidity.

Fiscal Flexibility Ratios

               

 

 

 

 

 

 

 

 


The Own Source Operating Revenue Ratio remains at benchmark levels from 2012 on following a forecast decrease in 2012.  This is due to Council forecasting a much more conservative rates figure for the general fund than the audited figures for 2011.

 

 

 

 

 

 

 

 

 

 

 

 


The DSCR is above the benchmark of 2.00x for the 10 years of the forecast.  This indicates that Council has the capacity to manage the additional debt cost that the LIRS applications relate to.

This also corresponds with Council having a relatively moderate level of borrowings at 4.00% of their Net Assets.  The improving ratio over time is due to an increasing EBITDA and a decrease in debt service costs over time as Council pays down its debt.

 

 

 

 

 

 

 

 

 


The Interest Cover Ratio, similarly to the DSCR, shows the Council has sufficient capacity to service scheduled debt commitments, including the LIRS loans.

There is capacity to service further debt interest costs before the Council’s ratio decreases to the 4.00x benchmark.

4.3:         Capital Expenditure

 

 

 

 

 

 

 

 

 


Capital expenditure is above the benchmark for the majority of the forecast.  There is a spike in capex in 2014 due to work on projects such as Bega Depot, Town Hall, Merimbula Bypass, Merimbula Library and Merimbula Airport.

The total surplus for capital expenditure versus depreciation over the lifetime of the forecast amounts to $50.0m in nominal terms.

 


4.4:         Financial Model Assumption Review

Councils have used their own assumptions in developing their forecasts.

In order to evaluate the validity of the Council’s forecast model, TCorp has compared the model assumptions versus TCorp’s benchmarks for annual increases in the various revenue and expenditure items. Any material differences from these benchmarks should be explained through the LTFP.

TCorp’s benchmarks:

·     Rates and annual charges: TCorp notes that rates increased by 3.4% in the year to September 2011, and in December 2011, IPART announced that the rate peg to apply in the 2012/13 financial year will be 3.6%.  Beyond 2013 TCorp has assessed a general benchmark for rates and annual charges to be  increased by mid-range LGCI annual increases of 3%

·     Interest and investment revenue: annual return of 5%

·     All other revenue items: the estimated annual CPI increase of 2.5%

·     Employee costs: 3.5% (estimated CPI+1%)

·     All other expenses: the estimated annual CPI increase of 2.5%

Key Observations and Risks

·     Rates and annual charges are forecast to decrease in 2012 and 2013.  They increase in 2014 by 3.51% for the remainder of the forecast period.  This is lower than historic increases and considered reasonable.

·     User fees and charges are forecast to decrease in 2012 and increase by 7.7% in 2013. From 2014 they increase by 5.60%.  The historical result is based on the consolidated fund and when looked at separately the revenue is forecast lower than the historical General Fund.

·     Employee costs have been forecast to increase by 2.0% for the forecast period.  While this appears conservative following the historical increases of 12.4% in 2011, this was an exceptional occurrence and will not be repeated. Council are also closely monitoring their employee costs and plan to cap their number of full time equivalent employees, implement a ratio of 40% staff to 60% contractors and the finishing of the flood renewal works.

·     Materials and contracts expenses have been forecast to increase by 2.0% compared to 15.5% in 2009 and 23.5% in 2011.  Council are currently reviewing their materials and contracts expenses and plan to reduce the number of contracting firms and invoicing costs.  They are implementing a two year road map to centralise contract management. 

·     Council have set up an Expenditure Committee to monitor Council expenses and implement practices to reduce costs. 

·     Overall we feel Councils forecasts are achievable.

 

 

 

 

 

4.5:   Borrowing Capacity

When analysing the financial capacity of the Council we believe Council will be able to incorporate additional loan funding in addition to the LIRS loan facilities, subject to our comments in section 4.4.  Some comments and observations are:

·     Based on a benchmark of DSCR>2x, $6.0m could be borrowed in addition to the $9.0m borrowings proposed under LIRS in 2013

·     This scenario has been calculated by basing borrowing capacity on a 10 year amortising loan at 7.0% interest

·     The Council’s capacity to borrow additional funds increases each year after 2014 as additional cashflow is forecast to become available for debt service

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Section 5:            Benchmarking and Comparisons with Other Councils

As discussed in section 2 of this report, each council’s performance has been assessed against ten key benchmark ratios.  The benchmarking assessment has been conducted on a consolidated basis (that is, for councils that operate more than one fund, the results of all funds are included).  This section of the report compares the Council’s performance with its peers in the same DLG Group.  The Council is in DLG Group 4.  There are 32 councils in this group and at the time of preparing this report, we have data for 19 of these councils.

In Figure 14 to Figure 20, the graphs compare the historical performance of Council with the benchmark for that ratio, with the average for the Group, with the highest performance (or lowest performance in the case of the Infrastructure Backlog Ratio where a low ratio is an indicator of strong performance), and with the forecast position of the Council as at 2016 (as per Council’s LTFP).  Figures 21 to 23 do not include the 2016 forecast position as those numbers are not available.

Where no highest line is shown on the graph, this means that Council is the best performer in its group for that Ratio.

 

Financial Flexibility

 

 

 

 

 

 

 

 

 


Council’s Operating Ratio was above benchmark and the group’s average in the past three years.  Council’s operating results are forecast to improve over the medium term, in contrast to the group average.

 

 

 

 

 

 

 

 

 

 


Council’s Own Source Operating Revenue Ratio has generally tracked the group’s average in the past three years.  The proportion of own sourced revenue is forecast to increase significantly over the medium term, on a consolidated basis.

Overall, Council’s financial flexibility is sound and compares favourably to the other councils in the group.


 

Liquidity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Council was the highest performer in the group for the Cash Expense Ratio.

Council’s Unrestricted Current Ratio tracked the group’s average over the review period and maintained above benchmark levels.  Council has not provided sufficient data to calculate a forecast over the medium term.

Overall, Council’s liquidity position is strong and compares favourably to the council average in the group.

 

 

Debt Servicing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Council’s debt servicing capacity was above benchmark but slightly below the group’s average in the past three years, as indicated by its DSCR and Interest Cover Ratios.

Council’s debt servicing ratios are forecast to improve over the medium term due to an increasing EBITDA and a decrease in debt service costs over time as Council pays down its debt.

Overall, Council’s level of gearing is similar to its peers.

 

 

Asset Renewal and Capital Works

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Council’s Capital Expenditure Ratio was above benchmark over the review period and generally outperformed the group’s average.

Overall, Council’s expenditure on asset maintenance and renewal needs to be a focus if it is to adequately improve the quality of its existing asset base and prevent the backlog from growing.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Council’s Infrastructure Backlog was well above benchmark and on par with the group’s average in the past three years.  Council’s Asset Maintenance Ratio and Building and Infrastructure Renewal Ratio were below benchmark but above the average council in the group.


 

Section 6:            Conclusion and Recommendations

Based on our review of both the historic financial information and the 10 year financial forecast within Council’s LTFP we consider Council to be in a satisfactory financial position in terms of their operating performance.  Both past performance and the financial forecasts support our findings that Council has sufficient financial capacity to service the additional borrowings proposed under its LIRS application.

We base our recommendation on the following key points:

·     Council has sufficient financial capacity to manage the additional $9.0m debt highlighted by a DSCR and Interest Cover Ratio above the benchmarks in all 10 years of its financial forecast

·     Council has an infrastructure backlog of $64.9m and Public Roads and Buildings and Infrastructure comprise 71.0% of the total backlog.  Council are seeking to address these asset classes in its LIRS projects

·     Council has undertaken capital expenditure in the last three years at a level to enhance their  IPP&E

·     Council has engaged external advisers to provide assistance in reviewing its operating and capital investment position and options

·     Council are aware of the impacts of climate change on their community.  They mitigate these risks by developing their floodplain mapping to more accurately predict flood hazards and prepare for flood risks

·     The quality of management plans, asset management plans, and operating plans also suggest that Council are well managed and adequately resourced

 

However we would also recommend that the following points be considered:

·     As revenues are increasing at much lower rates than expenses, Council needs to develop strategies to address this imbalance between revenue and expense growth.  The Internal Audit Committee in place should assist with this process

 

 


Appendix A  Historical Financial Information Tables

Table 1- Income Statement

Income Statement ($'000)

Year ended 30 June

% annual change

2011

2010

2009

2011

2010

Revenue

Rates and annual charges

37,284

35,385

32,826

5.4%

7.8%

User charges and fees

13,456

13,402

13,094

0.4%

2.4%

Interest and investment revenue

3,122

2,457

2,390

26.7%

2.8%

Grants and contributions for operating purposes

17,211

13,890

12,284

23.9%

13.1%

Other revenues

405

392

288

3.3%

36.1%

Total revenue

71,468

65,526

60,882

9.1%

7.6%

Employees

23,976

21,332

19,715

12.4%

8.2%

Borrowing costs

2,279

2,372

2,314

(3.9%)

2.5%

Materials and contract expenses

23,792

19,271

16,684

23.5%

15.5%

Depreciation and amortisation

18,174

14,012

14,032

29.7%

(0.1%)

Other expenses

4,788

5,083

4,827

(5.8%)

5.3%

Total expenses

73,009

62,070

57,572

17.6%

7.8%

Operating result

(1,541)

3,456

3,310

(144.6%)

4.4%

Table 2 - Items excluded from Income Statement

Excluded items ($’000)

2011

2010

2009

Grants and contributions for capital purposes

13,291

8,129

10,831

Gain on recognition of interest-free loan

Increase (Decrease) in the fair value of investments

Net gain (loss) from discontinued operations

(6,159)

97

0

Net gain (loss) on disposal of assets

82

(22)

288

 


Table 3 - Balance Sheet

Balance Sheet ($’000)

Year Ended 30 June

% annual change

 

2011

2010

2009

2011

2010

Current assets

Cash and equivalents

40,267

40,365

35,829

(0.2%)

12.7%

Investments

5,272

12,165

10,162

(56.7%)

14.6%

Receivables

9,896

7,891

4,568

25.4%

72.7%

Inventories

554

588

522

(5.8%)

12.6%

Other

494

0

0

Total current assets

56,483

61,009

51,531

(7.4%)

18.4%

Non-current assets

Investments

0

0

0

Receivables

99

94

28

5.3%

235.7%

Inventories

0

0

0

Infrastructure, property, plant & equipment

815,091

759,051

582,105

7.4%

30.4%

Investment property

0

0

0

Total non-current assets

815,190

759,145

582,105

7.4%

30.4%

Total assets

871,673

820,154

633,636

6.3%

29.4%

Current liabilities 

Payables

5,753

5,969

5,114

(3.6%)

16.7%

Borrowings

2,353

2,971

2,529

(20.8%)

17.5%

Provisions

6,469

6,362

5,636

1.7%

12.9%

Total current liabilities

14,575

15,302

13,279

(4.8%)

15.2%

Non-current liabilities  

Payables

0

0

0

Borrowings

30,541

31,616

33,587

(3.4%)

(5.9%)

Provisions

5,012

5,042

5,128

(0.6%)

(1.7%)

Total non-current liabilities

35,553

36,658

38,715

(3.0%)

(5.3%)

Total liabilities

50,128

51,960

51,994

(3.5%)

(0.1%)

Net assets

821,545

768,194

581,642

6.9%

32.1%


Table 4-Cashflow

Cashflow Statement ($'000)

Year ended 30 June

2011

2010

2009

Cashflows from operating activities

17,498

23,776

26,460

Cashflows from investing activities

(15,903)

(17,711)

(22,239)

·     Proceeds from borrowings and advances

936

1,000

1,000

·     Repayment of borrowings and advances

(2,629)

(2,529)

(2,469)

Cashflows from financing activities

(1,693)

(1,529)

(1,469)

Net increase/(decrease) in cash and equivalents

(98)

4,536

2,752

Cash and equivalents

40,267

40,365

35,829

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

Appendix B  Glossary

Asset Revaluations

In assessing the financial sustainability of NSW councils, IPART found that not all councils reported assets at fair value.[1] In a circular to all councils in March 2009[2], DLG required all NSW councils to revalue their infrastructure assets to recognise the fair value of these assets by the end of the 2009/10 financial year.

Collateralised Debt Obligation (CDO)

CDOs are structured financial securities that banks use to repackage individual loans into a product that can be sold to investors on the secondary market.

In 2007 concerns were heightened in relation to the decline in the “sub-prime” mortgage market in the USA and possible exposure of some NSW councils, holding CDOs and other structured investment products, to losses.

In order to clarify the exposure of NSW councils to any losses, a review was conducted by the DLG with representatives from the Department of Premier and Cabinet and NSW Treasury.

A revised Ministerial investment Order was released by the DLG on 18 August 2008 in response to the review, suspending investments in CDOs, with transitional provisions to provide for existing investments.

Division of Local Government (DLG)

DLG is a division of the NSW Department of Premier and Cabinet and is responsible for local government across NSW.  DLG’s organisational purpose is “to strengthen the local government sector” and its organisational outcome is “successful councils engaging and supporting their communities”.  Operating within several strategic objectives DLG has a policy, legislative, investigative and program focus in matters ranging from local government finance, infrastructure, governance, performance, collaboration and community engagement.  DLG strives to work collaboratively with the local government sector and is the key adviser to the NSW Government on local government matters.

 

 

 

 

Depreciation of Infrastructure Assets

Linked to the asset revaluations process stated above, IPART’s analysis of case study councils found that this revaluation process resulted in sharp increases in the value of some council’s assets.  In some cases this has led to significantly higher depreciation charges, and will contribute to higher reported operating deficits.

EBITDA

EBITDA is an acronym for “earnings before interest, taxes, depreciation, and amortisation.  It is often used to measure the cash earnings that can be used to pay interest and repay principal.

Grants and Contributions for Capital Purposes

Councils receive various capital grants and contributions that are nearly always 100% specific in nature. Due to the fact that they are specifically allocated in respect of capital expenditure they are excluded from the operational result for a council in TCorp’s analysis of a council’s financial position.

Grants and Contributions for Operating Purposes

General purpose grants are distributed through the NSW Local Government Grants Commission.  When distributing the general component each council receives a minimum amount, which would be the amount if 30% of all funds were allocated on a per capita basis.  When distributing the other 70%, the Grants Commission attempts to assess the extent of relative disadvantage between councils.  The approach taken considers cost disadvantage in the provision of services on the one hand and an assessment of revenue raising capacity on the other.

Councils also receive specific operating grants for one-off specific projects that are distributed to be spent directly on the project that the funding was allocated to.

Independent Commission Against Corruption (ICAC)

ICAC was established by the NSW Government in 1989 in response to growing community concern about the integrity of public administration in NSW. 

The jurisdiction of the ICAC extends to all NSW public sector agencies (except the NSW Police Force) and employees, including government departments, local councils, members of Parliament, ministers, the judiciary and the governor. The ICAC's jurisdiction also extends to those performing public official functions.

 

 

 

 

 

Independent Pricing and Regulatory Tribunal (IPART)

IPART has four main functions relating to the 152 local councils in NSW.  Each year, IPART determines the rate peg, or the allowable annual increase in general income for councils.  They also review and determine council applications for increases in general income above the rate peg, known as “Special Rate Variations”.  They approve increases in council minimum rates.  They also review council development contributions plans that propose contribution levels that exceed caps set by the Government.

·                     Infrastructure Backlog

Infrastructure backlog is defined as the estimated cost to bring building, infrastructure and other structures to a satisfactory standard, measured at a particular point in time. It is unaudited and stated within Special Schedule 7 that accompanies the council’s audited annual financial statements.

 

Integrated Planning and Reporting (IP&R) Framework

As part of the NSW Government’s commitment to a strong and sustainable local government system, the Local Government Amendment (Planning and Reporting) Act 2009 was assented on 1 October 2009.  From this legislative reform the IP&R framework was devised to replace the former Management Plan and Social Plan with an integrated framework.  It also includes a new requirement to prepare a long-term Community Strategic Plan and Resourcing Strategy.  The other essential elements of the new framework are a Long-Term Financial Plan (LTFP), Operational Plan and Delivery Program and an Asset Management Plan.

Local Government Cost Index (LGCI)

The LGCI is a measure of movements in the unit costs incurred by NSW councils for ordinary council activities funded from general rate revenue. The LGCI is designed to measure how much the price of a fixed “basket” of inputs acquired by councils in a given period compares with the price of the same set of inputs in the base period.  The LGCI is measured by IPART.

Net Assets

Net Assets is measured as total assets less total liabilities.  The Asset Revaluations over the past years have resulted in a high level of volatility in many councils’ Net Assets figure.  Consequently, in the short term the value of Net Assets is not necessarily an informative indicator of performance.  In the medium to long term however, this is a key indicator of a council’s capacity to add value to its operations.  Over time, Net Assets should increase at least in line with inflation plus an allowance for increased population and/or improved or increased services.  Declining Net Assets is a key indicator of the council’s assets not being able to sustain ongoing operations.

Roads and Maritime Services (RMS)

The NSW State Government agency with responsibility for roads and maritime services, formerly the Roads and Traffic Authority (RTA).

 

Section 64 Contribution

·                     Development Servicing Plans (DSPs) are made under the provisions of Section 64 of the Local Government Act 1993 and Sections 305 to 307 of the Water Management Act 2000.

·                     DSPs outline the developer charges applicable to developments for Water, Sewer and Stormwater within each Local Government Area.

·                     

Section 94 Contribution

·                     Section 94 of the Environmental Planning and Assessment Act 1979 allows councils to collect contributions from the development of land in order to help meet the additional demand for community and open space facilities generated by that development.

·                     It is a monetary contribution levied on developers at the development application stage to help pay for additional community facilities and/or infrastructure such as provision of libraries; community facilities; open space; roads; drainage; and the provision of car parking in commercial areas.

·                     The contribution is determined based on a formula which should be contained in each council's Section 94 Contribution Plan, which also identifies the basis for levying the contributions and the works to be undertaken with the funds raised. 

Special Rate Variation (SRV)

A SRV allows councils to increase general income above the rate peg, under the provisions of the Local Government Act 1993.  There are two types of special rate variations that a council may apply for: 

·     a single year variation (section 508(2)) or

·     a multi-year variation for between two to seven years (section 508A).

The applications are reviewed and approved by IPART.

Ratio Explanations

Asset Maintenance Ratio

Benchmark = Greater than 1.0x

Ratio = actual asset maintenance / required asset maintenance

This ratio compares actual versus required annual asset maintenance, as detailed in Special Schedule 7.  A ratio of above 1.0x indicates that the council is investing enough funds within the year to stop the infrastructure backlog from growing.

 

 

 

 

Building and Infrastructure Renewals Ratio

Benchmark = Greater than 1.0x

Ratio = Asset renewals / depreciation of building and infrastructure assets

This ratio compares the proportion spent on infrastructure asset renewals and the asset’s deterioration measured by its accounting depreciation.  Asset renewal represents the replacement or refurbishment of existing assets to an equivalent capacity or performance as opposed to the acquisition of new assets or the refurbishment of old assets that increase capacity or performance.

 

Cash Expense Cover Ratio

Benchmark = Greater than 3.0 months

Ratio = current year’s cash and cash equivalents / (total expenses – depreciation – interest costs)*12

This liquidity ratio indicates the number of months a council can continue paying for its immediate expenses without additional cash inflow.

Capital Expenditure Ratio

Benchmark = Greater than 1.1x

Ratio = annual capital expenditure / annual depreciation

This indicates the extent to which a council is forecasting to expand its asset base with capital expenditure spent on both new assets, and replacement and renewal of existing assets.

Debt Service Cover Ratio (DSCR)

Benchmark = Greater than 2.0x

Ratio = operating results before interest and depreciation (EBITDA) / principal repayments (from the statement of cash flows) + borrowing interest costs (from the income statement)

This ratio measures the availability of cash to service debt including interest, principal and lease payments

Infrastructure Backlog Ratio

Benchmark = Less than 0.02x

Ratio = estimated cost to bring assets to a satisfactory condition (from Special Schedule 7) / total infrastructure assets (from Special Schedule 7)

This ratio shows what proportion the backlog is against total value of a council’s infrastructure. 

 

 

Interest Cover Ratio

Benchmark = Greater than 4.0x

Ratio = EBITDA / interest expense (from the income statement)

This ratio indicates the extent to which a council can service its interest bearing debt and take on additional borrowings. It measures the burden of the current interest expense upon a council’s operating cash.

Operating Ratio

Benchmark = Better than negative 4%

Ratio = (operating revenue excluding capital grants and contributions – operating expenses) / operating revenue excluding capital grants and contributions

This ratio measures a council’s ability to contain operating expenditure within operating revenue.

Own Source Operating Revenue Ratio

Benchmark = Greater than 60%

Ratio = rates, utilities and charges / total operating revenue (inclusive of capital grants and contributions)

This ratio measures the level of a council’s fiscal flexibility. It is the degree of reliance on external funding sources such as operating grants and contributions. A council’s financial flexibility improves the higher the level of its own source revenue.

Unrestricted Current Ratio

Benchmark = 1.5x (taken from the IPART December 2009 Revenue Framework for Local Government report)

Ratio = Current assets less all external restrictions / current liabilities less specific purpose liabilities

Restrictions placed on various funding sources (e.g. Section 94 developer contributions, RMS contributions) complicate the traditional current ratio because cash allocated to specific projects are restricted and cannot be used to meet a council’s other operating and borrowing costs.   The Unrestricted Current Ratio is specific to local government and is designed to represent a council’s ability to meet debt payments as they fall due.

 


Council

31 October 2012

Item 12.6 - Attachment 4

LIRS Rd2 Circular 12-37

 


Council

31 October 2012

Item 12.6 - Attachment 5

LIRS Rd2 DLG Guidelines

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


Council 31 October 2012                                                                                   Item 12.7

 

12.7.       Community strategic plan review - community survey and special rate variation process     

 

Council is required to review its Community Strategic Plan within the first nine months of its term. This report proposes actions associated with the planned community survey and special variation options outlined in the adopted operational plan and long term financial plan, to assist that review.

 

General Manager  

 

Background

Council is required to undertake a review of the community strategic plan – ‘Bega Valley 2030’ – by June 2013. The Operational Plan 2012/13 identified the third triennial community survey is due to be undertaken in early November 2012.

Council has also adopted positions in relation to the long term financial plan (LTFP) relating to a s508A general rate special variation application over the period of Council’s adopted 2011-2016 Delivery Plan. This proposal includes two increases of 2% above rate pegging (the Local Government Cost Index - LGCI) and the continuation of an expiring special variation for recreation/community access. Council should consult with the community in relation to this proposal.

Bega Valley 2030- community strategic plan - Review

Council undertook considerable community consultation and engagement over the period 2009-2011 to review the previous 20 year plan and develop its first community strategic plan - Bega Valley 2030 and associated plans under the State Government’s integrated planning and reporting framework (IPR). Following the ‘assets and services review’ late in 2011, Council revised the asset standards and services priorities, and major projects to be funded in the LTFP, in accord with the second tranche (achievability and affordability) of its CSP schedule.

Accordingly, the Delivery Plan - Bega Valley 2016, the annual Operational Plan - Bega Valley 2013, the Resourcing Strategy (asset, financial, workforce) and the associated Long Term Financial Plan, Asset Management Plans and Workforce Plan were further refined and publicly exhibited in 2012 prior to adoption in June 2012.

Council is required to review its Community Strategic Plan under the IPR within the first nine months of its term. Following the election, Councillors have attended several induction sessions and a two day workshop focussing on the review framework.

Councillors are aware that the triennial community survey has been planned for November 2012. Councillors have indicated that in general there is no major divergence from the key directions outlined in the adopted Bega Valley 2030.

Councillors are also aware that in Council’s adopted LTFP and Operational Plan Bega Valley 2013, the adopted position is to consult the community and formally consider submitting a 508A special variation application to the Independent Pricing and Regulatory Authority (IPART).

It is suggested the formal Community Strategic Plan review process comprise:

·     Re-appraisal by councillors of the asset and services review report and amendments to the CSP and related documents 2011/12

·     Conduct the community survey (satisfaction with services and directions) and suggested deliberative survey (proposed rates special variation) - November

·     Assess whether any substantive changes are required to the CSP, having regard to the surveys – December/January

·     Adopt/readopt the CSP and related documents – February

Later in this report, the process for the survey and any application to IPART for the proposed rates special variations is outlined. Should Council resolve not to proceed with the IPART application, then the following is suggested:

·     Consider results of surveys and determine whether to formally lodge the s508A application – November/December

·     If Council chooses not to lodge, then the CSP and related documents will require substantial revision, as those plans are based on the premise of:

managing the asset backlog at 2% over the next 20 years

commencing scheduled renewals and upgrades (eg collector roads) from 2014

borrowing debt to assist asset renewals and upgrades

servicing debt in part by those rate variations

·     Re-adopt CSP, but signal the removal of the rate variations and adjustments to asset renewal, upgrade and service schedules - March

·     Schedule councillor workshops to revise asset renewal and upgrade schedules (scope and timing) to reflect timing and size of special rate variations (if removed or deferred) – April/May

Adjust Asset Management Plans, associated works schedules and LTFP

Adjust asset standards and service levels in AMPs and Delivery Plan

·     Exhibit and adopt revised CSP and associated documents - June

It is proposed that Council resolve to commit to the direction of the current community strategic plan and consider the need to review further following receipt of the results of the community survey and the consultation in relation to the special variation application.

Community survey

Council has incorporated a triennial, independent community satisfaction survey into its community strategic planning regime since 2006. The planned 2012 community survey will be the third community satisfaction survey conducted by Bega Valley Shire Council. This independent monitoring and evaluation of community needs, aspirations and satisfaction with Council’s performance is a critical input to good local government.

The longitudinal survey results provided by undertaking an independent, statistically reliable community satisfaction survey in this manner enable the organisation to set improvement targets in relation to key service areas.

The community satisfaction survey provides Council with an understanding of the perceptions and needs of the local community with respect to both Council’s services and facilities, and to customer service and community information. The results of the survey assist in:

-     Enabling Council to continue to plan for services and infrastructure to provide sustainable solutions to meet the needs of existing and future Shire residents

-     Ensuring that the services Council delivers are well managed, responsive and effective

-     Ensuring that the organisation and its staff maintain high standards of customer service.

The results of the 2009 community satisfaction survey were a major input into the development of the community strategic plan.

The survey format has been modified in 2012 to reflect the theme areas of Bega Valley 2030. As workshopped with councillors, the component parts of the survey will be expanded this year to include:

-     the traditional landline telephone survey utilising a random sampling technique that delivers a final sample that is representative of the broader community. The final results will be weighted by Census proportions to ensure that sufficient unit cohorts are obtained within key demographic characteristics such as age group and gender; and

-     the additional component of converting the survey to a format that can be hosted on Council’s consultation website so that Council can direct residents whom are not surveyed by telephone to complete the survey online. This allows individuals that become aware of the survey with an opportunity to participate.

A sample size of 750 (150 for each of Council’s five identified geographic areas) will be used with the average interview time of 15 minutes per survey. The identified geographic areas are: Eden & surrounds; Merimbula & surrounds; Bega & surrounds; Bermagui & surrounds; and Rural.

The results of the survey will also be benchmarked against like Councils using the Australian Classification of Local Government. This comparison will be clearly made in the area of overall satisfaction and performance scores for individual services/facilities. It is planned to undertake the survey in November with results presented to Council in December.

The issue of mobile phone use as well as landline contacts has been discussed with the consultants. With small area surveys, it is not currently possible to include mobile phones, as no locality identifier is known.

The consultants maintain that landline telephone calls provide by far the most cost effective mechanism to reach 80% of the population. Currently telephone surveying researchers do not have authorized access to Portable Navigation Device technology. The national body representing these types of research bodies - Australian Market and Social Research Organisation (AMSRO) - is currently working on approval for their members to access this technology. Mobile number use may be an option for the 2015 survey.

The consultants experience indicates that up to 30% of households do not have a listed telephone number The national body is working on this and trying to gain approval to have access to the PND. While this may be an issue for certain topics or target groups (i.e. young people), it doesn’t impact on the representativeness of results of a broad Council survey.

Special rate Variation

Most councils in NSW increase their general income (mainly rate income) in line with the rate peg percentage set by IPART each year. However, the Local Government Act 1993 provides for councils to apply for a ‘special variation’, which allows the council to increase its general income by more than the rate peg. Councils may apply for a special variation under section 508(2) or 508A to increase their general income in the next year or for a number of years (up to seven consecutive years). Bega Valley Shire Council has successfully applied for enduring s508(2) rate variations for a mix of asset renewals/upgrades, or retention of services (libraries/lifeguards/weeds/tourism). The variations for recreation/community access has a five year term, while the airport renewal variation has a 20 year term.

The rate variations are a one-off % lift in total general rate income. If they expire, the value of a rate variation (including effect of rate pegs) is removed from the total rate income. Applications to IPART include the anticipated value of the rate peg, plus the amount above rate peg that is sought. For example, while Council may lodge an application for the proposed 2% above rate peg for collector roads, the application will cite an increase of 5.5%, assuming the announced rate peg will be 3.5%.

IPART assesses council applications for special variations using criteria set by the NSW Government. The criteria are set out in guidelines provided by the Division of Local Government. The guidelines for 2013/14 have not been released at the time of preparing this report, however it is expected that they will be consistent with ‘The Guidelines for the preparation of an application for a special variation to general income 2012/13’ issued in 2011. One of the criteria relates to community consultation. Community consultation is one of the criteria that IPART uses in assessing councils’ applications:

There are two types of special variation applications s508(2) and s508A.

-     S508(2) application – a one off increase to general rate income for a specific purpose that may be for a set time or a permanent increase

-     S 508A application – a multiyear series of increases (for up to seven years) which may be for a set period or permanent.

For s508(2) applications, councils must show there has been ‘adequate community consultation regarding the special variation’. For 508A applications, councils must show ‘demonstrated community support for the special variation’.

In assessing whether a council’s application satisfies the relevant criterion for community consultation IPART will consider the following principles:

-     that the council clearly communicated the impact of proposed rate increases on ratepayers about the special variation application, not just a small section of the community that attends a community meeting or undertakes a survey.

-     that the council clearly communicated what the special variation will be used to fund.

In relation to lodging a s508A application Council must have completed its Community Strategic Plan and all associated plans and reports in particular outlining the special variation in the relevant Asset Management Plans and the LTFP. Bega Valley Shire has outlined within those documents the intent and focus of its proposal as required.

In discussions with IPART it is apparent that special variation applications will only be considered where they are linked to a Council’s forward planning.

IPART assessment criteria for a special variation application

IPART have provided the following information through the Division of Local Government in relation to the criteria they will use to assess applications. Councils will need to demonstrate where it is up to in its implementation of the Integrated Planning and Reporting Framework.  The four assessment criteria are then:

-     the need and purpose of a revenue path for the requested application is clearly articulated and identified in the Council’s adopted delivery plan and LTFP

-     evidence that the community is aware of the need and extent of the rate rise

-     outline of the impact on affected ratepayers which must be reasonable having regard to the purpose for the variation; and

-     the delivery program and LTFP must evidence cost containment and productivity achievement.

Timeframe

-     June 2012 Council adopted its revised Long Term Financial Plan and  Delivery Plan and the 2012/13 Operational Plan in which the special variation application is outlined as proposed in this report to Council.

-     November 2012 It is reasonable that Council consult with its community in November to gain input into its deliberations in relation to continuing with the application.

-     December 2012 Council will need to advise IPART of its intention to lodge an application if following receipt of community input it resolves to do this. This will occur through resolution at the 12 December Council meeting.

-     February 2013 Council is not fully committed until the lodgement of the application which it is expected will be required in late February 2013. Again this will be through formal decision and resolution of the Council.

Consulting with the community

Councils are required to engage with their community in relation to special variation applications. Councils may use a range of methods to consult with their community in relation to special variation applications. The manner in which Council does this may include, but is not limited to, mail outs to ratepayers, fact sheets, media releases, public meetings, listening posts, and online discussion forums. Information must be presented in a way that community members can understand, clearly explaining what the special variation is being sought for. For example, it may be for a program of works, to address infrastructure backlogs, or for service enhancements.

Councils must be able to show that the information they present to the community is transparent and clearly identifies the impact of any proposed rate increase on ratepayers. Information should not be presented so as to minimise the perceived impact of the increase. It must show:

-     that the requested special variation includes the rate peg

-     that multi-year increases in rates are cumulative

-     if the rate increases will remain permanently in the rate base of the council or be removed after a fixed period (as section 508(2) applications may be for a fixed period only)

-     if the council has an expiring special variation which it intends to continue or incorporate into general revenue into the future rates and rate increases should be presented on an annual and a weekly basis

-     increases in other charges, such as for waste management, where these are likely to exceed CPI increases.

Councils should also show the impact of not applying for, or not having the special variation approved. For example if reductions in particular services are likely, or if certain projects will not go ahead if the special variation does not proceed, this should be made clear to ratepayers. Councils will need to present a realistic scenario to the community. Councils should not present a worst-case scenario or threaten ratepayers with unrealistic cuts in the most popular community services.

Expiring Special Variations

Councils need to explain clearly, where relevant, that a special variation is being used to replace an existing special variation, such as the recreation/community access levy. This is true whether the levy is to apply permanently or for a limited number of years.

Councils should inform their communities:

-     that an existing special variation is about to expire or will do so during the period covered by the application for a special variation

-     that the year-on-year impact on rates would not be as great or would decrease if the special variation is not approved and only the rate peg was applied

-     if applicable, that an expiring special variation is being replaced with a permanent increase to the rate base

-     that the special variation includes the value of any expiring special variation and any additional rate increase that is being sought by the council

-     the effect of the special variation on rates may differ from the year-or-year change in rates if a special variation would have otherwise expired.

Bega Valley Shire Council s508A special variation proposal

As outlined in Council’s adopted LTFP and Bega Valley 2013 (Operational Plan)  the following model is proposed:

-     (1) New 2% one off ongoing increase above LGCI (rate pegging) in 2014 for transport renewal of collector roads (defined below). This variation will raise the general rate yield by an estimated $400,000 in 2014 and then be indexed by LGCI on an ongoing capacity.

 

-     (2) Retained 2.4% one-off ongoing increase above LGCI (rate pegging) in 2015 to retain the expiring recreation and access approval with the options to use this amount for debt servicing or for annual project works in line with the LTFP for recreation asset renewals (defined below). This variation will retain the general rate yield at an estimated $507,000 and then be indexed by LGCI on an ongoing capacity.

-     (3) New 2% one-off ongoing increase above LGCI (rate pegging) in 2016 for infrastructure renewal for public domain areas and buildings (defined below). This variation will raise the general rate yield by an estimated $440,000 and then be indexed by LGCI on an ongoing capacity.

Collector roads, recreation assets and public domain and public buildings

Collector Roads

Managed, maintained and funded by Council and can be both urban (Auckland Street, Monaro Street, Wallaga Street) and rural (Dr George Mountain Road, Upper Brogo Road, Burragate Road). They have the following functional characteristics:

·     Link higher order roads

·     Link population or activity centres

·     Usually part of a loop road

·     Carries significant through traffic

·     Can be critical access

·     Carries significant traffic

·     Supports economic development

There are 20.77km of sealed collector roads in the urban areas of the Shire and in the rural area 87.95 km of sealed and 65.14 or unsealed collector roads.

The Transport Asset Management Plan covers in detail the priorities, assessment and adopted program for these critical assets. Attached is a graphic depiction of the impact of the program that can be achieved with the special variation program.

Recreation and sporting assets

The Recreation Asset Management Plan covers in detail the priorities, assessment and adopted program for these critical assets. Attached is a graphic depiction of the impact of the program that can be achieved with the special variation program.

Buildings

The Building Asset Management Plan covers in detail the priorities, assessment and adopted program for these critical assets. Attached is a graphic depiction of the impact of the program that can be achieved with the special variation program.

T-Corp Assessment

With reference to a separate report in the agenda, the T-Corp audit noted the Council has been well managed over the review period based on the following observations:

-     Council has reported an operating surplus excluding capital grants and contributions in 2009 and 2010. 

-     Council’s underlying cash result (measured using EBITDA) remained consistent over the three year period

-     Approximately 71.0% of the Council’s revenue base is derived from own sourced revenue (annual charges and user charges and fees). 

Council reported an infrastructure backlog of $64.9m (9.4%) in 2011 with an infrastructure asset value of $687.3m.  Other observations include:

-     The Council’s infrastructure backlog is on an upward trend

-     Compared to benchmark ratios Council appear to be underspending on building and infrastructure asset renewal and asset maintenance.  However, Council has exceeded the Capital expenditure Ratio benchmark for the last three years indicating that they are spending on assets which improve performance or capacity

-     The most significant proportion of the backlog relates to roads at 57%, with building and other structures at 17%.  Both of these backlogs are being addressed in the LIRS applications

Impact of the special variation on rates

The amount and impact of these two new and one retained special variations is outlined in the table below. This table shows the impact on average rates as calculated using the preferred model by IPART - this is the amount of income derived by general rates from a rate category divided by the number of properties.

Council has traditionally used the land value method which is more accurate indicating the rate per category based on the average land value per category, together with the upper and lower thresholds (ie 10th and 90th percentiles). However it is appropriate to revert to the format IPART requires for its assessment.

Table 1 below shows the impact on average rates with and without a special variation of 2% for 2 years - 2013/14 and 2015/16 and the continuation of an expiring special variation in 2014/15. In this model rate peg of 3% per annum is assumed for all years.

 

2012/13

2013/14

(1)

2014/15

(2) #

2015/16

(3)

2016/17

Residential rates without SV (rate peg only)

$901.50

$919.35

$913.65

$931.74

$950.19

Residential rates with SV

$901.50

$937.74

$956.31

$994.75

$1,014.45

Impact of SV

$0.00

$18.39

$42.66

$63.01

$64.26

Cumulative impact of SV

$0.00

$18.39

$61.05

$124.06

$188.32

 

 

 

 

 

 

Farmland rates without SV (rate peg only)

$1,742.07

$1,776.56

$1,765.54

$1,800.50

$1,836.15

Farmland rates with SV

$1,742.07

$1,812.10

$1,847.98

$1,922.26

$1,960.33

Impact of SV

$0.00

$35.54

$82.44

$121.76

$124.18

Cumulative impact of SV

$0.00

$35.54

$117.98