2017/18 Budget Workshop 1 14 March 2017

informed

Purpose

• To provide an overview of the Annual Business Plan

and Budget process

• A brief overview of our Community demographics

• To discuss the key challenges and Council’s cost of

business

• To obtain feedback from EM’s on rating scenarios

• To discuss Operating and New Services Budget

proposals; and

• To get an insight from the Audit Committee Chair,

David Powell

2

3

Building the Annual Business Plan

Strategic Management Plan

Long Term

Financial Plan

– 10 years

(Annual

review)

Asset

Management

Plan

(4 years)

Elected Member and Community Feedback

Annual

Community

Survey

(Results

January

2017)

Council

Resolutions

(July 2016 to

February

2017)

External/Internal influences

Efficiency &

Effectiveness

Review

Annual Business Plan & Budget

Operating

Budget

Capital

BudgetWorkforce

Planning

Legislation,

additional

pressures

Rating strategies Sustainability

Targets /Ratios

4

Budget Process and Timetable

5

Strategic Direction

Annual Community

Survey Budget Bids

EM Workshop 1

Operating Bids

14 March

EM Workshop 2

Capital Bids

28 March

Endorsement of draft ABP and Budget

11 April

Community Consultation

24 April – 19 May

EM Workshop 3

23 May

Adoption of ABP and Budget

13 June

Key Challenges for 2017/18

• Rate Capping

• Freeze on the Financial Assistance Grants

• EB Negotiations

• Savings Target (1.5% of rates revenue)

• Additional Cost Pressures : � 40% average increase in electricity costs

� Solid waste levy increase

� Increased contribution towards Brownhill Keswick Creek Project

� Revaluation of infrastructure

• Balance between Council rates and services

• Financial Sustainability

• Focus on effectiveness and efficiency

• Maintaining Assets

LTFP Position and Assumptions

Key driver Per Adopted LTFP Per Draft 2017/18 Budget

Rates 2.50%

plus 0.5% organic Growth

Scenarios to be discussed.

Cost Index (Dec CPI) 2.50% 1.30% CPI

1.60% LGPI

Employee Costs 2.50% Under EB Negotiations

Staffing 160.9 FTE 160.9 FTE

Savings Target 1.50% of Rates Revenue ($565k) 1.50% of Rates Revenue

Operating Projects $426k $402k

Capital $2.76m (new ) $9.80m (renewal) $4.07m (new ) $9.63m (renewal)

Operating Surplus $1.35m To be determined

Debt $15.08m To be determined

Cost of Council Business

LGPI for expenses (existing services) 1.60%

Additional known cost pressures :

• Cost shifting - solid waste levy 0.24%

• Cost increases above LGPI 0.92%

Cost to deliver existing services 2.76%**

** Unknowns:AMP’s under review

BHKC capital contribution

ERA Water contribution

Rating Scenarios

Cost to deliver existing services 2.76%

Savings target $565k (not banked until delivered) -

Rates 17/18 – Option 1 2.76%

Cost to deliver existing services 2.76%

Savings target $565k (50% banked before delivered) (0.75%)

Rates 17/18 – Option 2 2.00%

Cost to deliver existing services 2.76%

Unidentified cost savings target ($565K) (1.50%)

Rates 17/18 – Option 3 1.26%

Rates 17/18 – Option 4 1.87%

(Based on Audit Committee recommendation)

Rates 17/18 – Option 5 2.50%

(Based on Adopted LTFP)

Budget bid process

• EM Budget Bid process (collaborative effort)

• Considerations:� Highly community focussed

� Meets Legislative requirements

� “Bang for buck”

• Bid categories :� New or Enhanced Services (operating)

� Operating Projects

� Capital Renewal (to be discussed on 28 March)

� Capital New (to be discussed on 28 March)

10

Draft Operating ProjectsProject Title Gross Expenditure Income Net Cost Page No .

Building Condition Assessments $42,500 - $42,500 1

Consolidation of Facebook presence for Burnside $4,000 - $4,000 3

**Consultation for the Residential DPA $40,000 - $40,000 6

Efficiency and Effectiveness Program $50,000 - $50,000 8

Future Aged Care Services - Community Consultation $20,000 - $20,000 10

George Bolton Swimming Centre Business Review $35,000 - $35,000 13

Michael Perry Botanic Reserve Conservation Plan $25,000 - $25,000 16

**Office 365 $30,000 - $30,000 18

Real-time Service Level Reporting $10,000 - $10,000 20

Short term employee under equity & diversity $20,000 - $20,000 22

**Streetscape Guide Development $20,000 - $20,000 24

Sub -Total Draft Operating Projects $296,500 - $296,500

Sub-Total New / Enhanced Services $105,000 $105,000

TOTAL Operating Projects and New Services

$401,500 $401,500

**These Projects are considered essential and part of ordinary business.

(Attachment A – Green handout)

Draft New / Enhanced Services

12

Project Title Gross Expenditure Income Recurrent Cost P age No.

Local Artists Exhibition Support at Civic Centre $10,000 - $10,000 1

Regulated and Significant Tree Assistance Scheme $5,000 - $5,000 3

**Silt Removal - Hazelwood Pk & Michael Perry Ponds $90,000 - $90,000 5

Totals: $105,000 - $105,000

**These Projects are considered essential and part of ordinary business.

(Attachment B – Yellow handout)

Overview from the Audit Committee Chair

David Powell

13

Next Steps – Key Dates

28 March 2017 Elected Member Budget Workshop 2

3 April 2017 Audit Committee presented with Draft Annual Busines s Plan and Budget

11 April 2017 Draft Annual Business Plan and Budget presented to Council for adoption (for community consultation)

24 April to 19 May 2017 Draft Annual Business Plan Community Consultation

Wednesday, 10 May 2017 Public meeting 1 (Civic Centre , time tbc)

Saturday, 13 May 2017 Public meeting 2 (Glenunga Hub, time tbc)

23 May 2017 Member Budget Workshop 3

13 June 2017 Council Meeting – Adoption of ABP and Budget

14

Questions?

15

• Project prioritisation

• Rates Modelling

• Feedback

• Any other questions?