dc report - draft annual business plan - consultation document · consultation including a public...

2019

-20

20 Whyalla

City Council Annual Business Plan & Budget

Community Consultation

The consultation period on the Annual Business Plan & Budget 2019/20 was held from 21 May -25 June 2019. Council offered a variety of consultation methods for the Annual Business Plan & Budget 2019/20 including advertisements and media releases in public newspapers, public meetings and access on Council’s website whyalla.sa.gov.au

Public Meeting

A public meeting was held 5th June 2019 at the Whyalla Public Library. A formal meeting of the council was held on 17 June 2019 at which members of the public could ask questions, and make submissions, in accordance with Section 123(4)(a)(i)(B) of the Local Government Act 1999. A report containing submissions received to date on the Annual Business Plan & Budget 2019/20 has been presented to the Council prior to adoption.

Acknowledgement of Country

We acknowledge the lands in our region belonging to the Barngarla people and acknowledge them as the traditional custodians from the past, for the present and into

the future. The Barngarla people are strong and are continuously connecting to their culture and their country. Whyalla City Council and the Barngarla people are working

together to build a stronger future.

Table of Contents

Introduction by Mayor Clare McLaughlin 4

From the Chief Executive Officer 5

Snapshot 6

Your Council 7

Elected Members 8

Our Vision & Core Values 10

Community Strategic Plan Framework 11

Council’s Services 13

Looking Forward in 2019-20 15

Funding the Annual Business Plan 21

2019-20 Rates Revenue 25

2018-19 Reflection 30

Appendix A – Financial Statements 33

4 Whyalla City Council

Introduction by the Mayor

On behalf of the Elected Members and staff, I am pleased to present the Annual Business Plan and Budget for 2019-20.

This plan outlines Council’s services, programs and projects for the 2019-20 financial year whilst embracing the vision of ‘Unearth a Bright Future for Whyalla’ by continuing to deliver on the objectives of its 2017-22 Community Strategic Plan. The objectives are set within the four major themes of our community defined in the Strategic Plan as Our People, Our Places, Our Economy, and Our Image.

By collaborating locally, regionally and nationally we are continually building and growing a bright Whyalla for our current and future residents and visitors by exploring opportunities to secure a far more sustainable future for all generations.

The plan reflects our commitment to supporting growth for the Whyalla region, while continuing to provide the best possible mix of proposed services, infrastructure and facilities for the long term future of our City. This comprises of both the maintenance of existing infrastructure and services along with new initiatives for the community.

Highlights of the Capital Program proposed for this year include:

• The first year of a $14 Million 3 Year Road Delivery Program • Memorial Oval Upgrade • Whyalla Marina and Foreshore Upgrades • Wetlands Highway Access • Strategic Bicycle Plan • Ada Ryan Gardens Upgrade

All capital projects align with Council’s strategic direction, Long Term Financial Management Plan and Infrastructure & Asset Management Plans.

Council are thankful to the Whyalla community for their contributions throughout the consultation period. The feedback was valuable and considered at length when finalising the budget and deliverables for this year.

Whyalla City Council Elected Members and staff recognise the need to provide a responsible and sustainable budget that reflects and delivers our community’s needs and desires.

As your newly elected Council we are excited for the next four years working with our community to contribute to and continue developing a vibrant and bright Whyalla.

Kind regards

Mayor Clare McLaughlin

2019-20 Annual Business Plan and Budget 5

From the Chief Executive

Officer

Welcome to the Annual Business Plan and Budget for 2019-20.

The formalisation of this plan is important as it sets out Councils services, programs and projects for the 2019/20 financial year and how they will be funded. Some of the services delivered through the operations of Whyalla City Council are required by State or Federal legislation where other outcomes or services are discretionary.

The key focus of the Annual Business Plan is to continue delivering the goals and objectives of Council’s Strategic Plan in an accountable and transparent manner while acting in the best interests of the Whyalla community.

Council is committed to supporting a community which is economically, culturally, socially and environmentally sustainable with every decision assessed against these objectives.

Your rates

Rates are Council’s main source of income and are applied to all levels of Council’s operations and capital projects to provide the level of services that meet community needs.

Initially the proposed average general rate increase for 2019/20 was 4% which has been lowered to 3.5% after community consultation and feedback. This equates to an average increase of approximately $49 per property per annum.

Council is conscious of increased rates for our residents and has committed to realising internal cost savings and efficiencies of $160,000 for 2019/20 contributing to minimising the rate increase.

In accordance with Council’s value of fairness and equity, we encourage anybody experiencing financial hardship to contact Council to discuss their options.

Your voice

A large number of Council’s decisions are made by listening and acting on the views of the community. Public consultation of the Annual Business Plan and Budget was subject to extensive community consultation including a public forum, formal and informal submissions, online engagement and the opportunity to make representations at a General Council meeting, as was Council’s rating policy.

By working together we continue to grow a vibrant, attractive city offering a diverse range of sustainable opportunities to build a better community and ensure that Whyalla’s goal to ‘Unearth a Bright Future’ is achieved.

Kind Regards

Chris Cowley


Snap shot Rate Revenue Council’s revenue for 2019-20 includes $16.4 million from general rates

Significant Influences & Priorities Highlights of Capital Program

Fixed Charge

$572

Waste Management service charge

$350

General Rates An average general

rate increase of 3.5% or $49 per property

(depending on valuation)

Natural Resource Management Levy

$906,400 for 2019/20

Consumer Price

Index 1.3% (Mar 2019)

Solid waste levy estimated increase

$83,000 for 2019/20

Local Government

Price Index 2.1% (Mar 2019)

3 Year Road Delivery Program to address the backlog

of infrastructure $14 Million

(as advised by Natural Resource Management Board)

Whyalla Marina Upgrade

$316,000

Memorial Oval Upgrade

$827,000

Foreshore Upgrade

$358,000

Wetlands Highway Access

$299,000

Strategic Bicycle Plan

$145,000

Ada Ryan Gardens Upgrade

$135,000


Your Council Getting to know the City of Whyalla The City of Whyalla is located on the western shore of Upper Spencer Gulf. The district is mostly industrial, with many large companies operating in the city.

The area comprises the following suburbs and localities: Backy Point, Cowleds Landing, Douglas Point, Douglas Point South, False Bay, Fitzgerald Bay, Middleback Range, Mullaquana, Murninnie Beach, Point Lowly, Point Lowly North, Port Bonython, Whyalla, Whyalla Barson, Whyalla Jenkins, Whyalla Norrie, Whyalla Playford and Whyalla Stuart.

Its urban boundaries comprise 41.5 km², which holds the vast majority of the district's population 21,828. These statistics are from the 2016 Census.

Your City

Your Council

Industry of Employment Ge

nd

er

POPULATION

50% 50%

Manufacturing

Health Care and Social Assistance

Retail Trade

Education and Training

Construction

Accommodation and Food

Mining

Administrative and Support

Transport, Postal and Warehousing

Public Administration and Safety

20.9%

10.5%

7.5% 7.8%

14.5%

4.2%

4.4%

4.5% 5.3%

6.2%

60-79 Years

40-59 Years 20-39 Years

0-19 Years

80+ Years

Age

4.1%

1 9 M a

y o

r

Coun

cillo

rs

1 2 8 F T E C O U N C I L Employees

2 1 8 2 8

Housing

38.7% 32.9% 25.0% 3.3%

Ow

ned

- Out

right

Oth

er

Ow

ned

- Mor

tgag

e

Rent

ed


Elected Members

Collectively Elected Members are responsible for policy making and decisions that impact on future plans for the district and the lives and livelihoods of individuals, organisations and businesses within it.

The City of Whyalla is represented by ten elected members which includes a Mayor (Chairperson) and nine Councillors.

The role of an Elected Member is to:

• participate in the deliberations and civic activities of the Council

• formulate the Council’s objectives and policies

• keep the Council’s objectives and policies under review to ensure they are appropriate and effective

• keep Council’s resource allocation, expenditure and activities and the efficiency and effectiveness of its service delivery under review

• represent the interests of residents and ratepayers, to provide community leadership and guidance and to facilitate communication between the community and the Council.

INSERT HEADSHOT INSERT HEADSHOT



Deputy Mayor Rick Santucci

Councillor Irene Adair

Councillor David Knox

Councillor Joanne Marshall

Councillor Tamy Pond

Councillor Bill Simpson

Councillor Phill Stone

Councillor Soto Stuppos

Councillor Zia Westerman



Our Vision & Core Values Goal Unearth a bright future for Whyalla.

Vision Whyalla will be a vibrant, attractive city offering the community a diverse range of sustainable economic, social, environmental and cultural opportunities.

Values Integrity Transparency Accountability Respect Commitment to community Good governance Innovation Fairness and equity Safety

Outcomes • Confident, engaged and proud community • Integrated education and training opportunities • Attractive city • Diverse economy • Integrated health, disability and aged care services


Community Strategic Plan Framework Our Four Themes

Our People

Our Economy

Our Image

Our Places

• Our residents have a sense of community pride that is seen and felt by our visitors and external stakeholders

• Residents feel safe, healthy and connected in our community through access to services, activities, facilities and information

Our People

• Our parks, gardens and open spaces are well used and reflect the needs of our community

• Community assets are being renewed and replaced to maintain service levels

• Sustainability and environmental factors are reflected in our programs and decision-making process

Our Places

• Community confidence

• Positive national media coverage

Our Image

• Diversified economy which is not wholly reliant on steel-making and mining

• Broader range of post-secondary education options based in the city and higher student numbers

• Higher retention and success rates at secondary level

• Evidence of growing business and industry with greater use of vital infrastructure

• Key areas opened up for development (foreshore, marina, Point Lowly), with access to free WiFi

• Supporting Solar industry and Defence activity

Our Economy

A full copy of the Whyalla City Council Strategic Plan can be viewed on Council’s website at www.whyalla.sa.gov.au

http://www.whyalla.sa.gov.au/

12 Whyalla City Council 2019-20 Annual Business Plan and Budget 12

Measuring our performance In order to report on outcomes and achievement of the Council’s strategic goals our activities are monitored and reported as part of the quarterly budget review process.

Objective Description Actions Performance Outcome

Our Places: Our natural and built environment supports the economic, social and physical needs of the city.

To create a city that is attractive and showcases our natural and built assets

Upgrade the entrances to Whyalla to create an inviting, modern, visual impression for visitors arriving in the city.

Complete by 31 December 2019.

Complete Signage Masterplan for Whyalla.

Completed

To protect our natural environment, minimise our ecological footprint and the impact of environmental issues on the City.

In partnership with Eyre Peninsula National Resource Management, actively promote, rehabilitate and conserve our natural environment and coastal areas.

Ongoing

Our People: to embed a range of services and facilities which promote a safe and engaged community, which is healthy, culturally and socially rich.

Unearth community pride within the city.

Regularly inform the community of council activities, decisions and actions. Promote positive stories, positive image. Articulate the positive approach the city takes. Social media, real time posts.

Updates via newsletters, Facebook and Council website.

To create a vibrant, diverse, actively engaged community with a sense of belonging.

Encourage the participation of our youth in our city by providing opportunities for leadership, social, community and economic participation.

Continue youth council, youth week events and ongoing support for youth activities.

To improve the safety, health & wellbeing of our community.

Focus on the next stage of Living Well Aged and Disability Care Masterplan, with the goal of becoming recognised as the world’s first Disability Friendly City.

Ongoing

Our Image: Whyalla is well respected and recognised as a community of strength whose people have a bright, positive and sustainable future.

Instil community pride. Continue to promote Rebranding of Whyalla as per plan.

Ongoing

To create an attractive city for the community, visitors and potential investors.

Complete median strategy. Ongoing

Our Economy: Whyalla has a diverse and sustainable economy.

To connect and mobilise the community to work collectively to improve the lives of all community members

Focus on increasing Whyalla City Council participation and collaboration with Regional Development Australia Whyalla and Eyre Peninsula (RDAWEP) and Spencer Gulf Cities to ensure we generate more outcomes for Whyalla.

Ongoing

Expand the visitor experience and stimulate investment through the development of new and diverse tourism products, in-line with Tourism Strategic Plan and Northern Coastline Masterplan

Ongoing

Complete stage one of Whyalla Beach Road and Marina Masterplan.

Ongoing

This Strategic Plan is to be updated in accordance with the Local Government Act in 2020.

13 Whyalla City Council 2019-20 Annual Business Plan and Budget 13

Council’s Services

All Councils have responsibilities under the Local Government Act, the Development Act, the Public and Environmental Health Act, the Natural Resources Management Act and other relevant legislation.

These include: • regulatory activities e.g. maintaining the

voters roll and supporting the elected Council;

• setting rates, preparing an annual budget and determining longer-term strategic management plans for the area;

• management of basic infrastructure including roads, footpaths, parks, sporting facilities, public open space, street lighting and storm-water drainage;

• street cleaning and rubbish collection; • development planning and control,

including building safety assessment; • various environmental health programs,

animal management and community safety;

• protection of natural resources including coastal areas.

In response to community needs the Council also provides further services and programs including: • economic development; • environmental programs; • community programs; • libraries; and • tourism including information

services and community events. The Council operates a number of facilities on a fee for service basis. These provide important community benefits while also generating revenue for services and projects of benefit to the City of Whyalla: • waste management facilities and

services; • recreation facilities including

swimming pools and Museum; and • Child Care Centre • Airport • Sporting grounds • Marinas

Colour Run at Whyalla’s 2018 UneARTh Festival


Photography by Eric Brokken


Looking Forward in 2019-20 Significant Influences & Priorities A number of significant factors have influenced the preparation of the Council’s 2019-20 Annual Business Plan and Budget.

These include the following:

• an operating deficit • the Local Government Price Index 2.1%

(estimated March 2019) • the Consumer Price Index (CPI) 1.3% (estimated

March 2019) • a provision for labour costs to increase by 2% in

accordance with Enterprise Bargaining agreement

• a target of $160,000 in service efficiencies or equivalent to a 1% rate increase

• Increase promotion of event including sponsorship for community held events

• Costs associated with the implementation of changes to Planning Act and accreditation, including membership of the joint planning board.

• A slight increase of grant income relating to Roads to Recovery to $308,000.

• Three year road delivery program to address Council’s backlog of infrastructure renewal.

• Environment Protection Authority (EPA) levy increase of 40%. At $55 per tonne effective from 1 July 2019, with a further increase to $70 per tonne effective from 1 January 2020.

Whilst preparing the 2019-20 Annual Business Plan and Budget Council has been mindful of the community’s ability to pay. Council has balanced this against the strategic direction and its social and economic objectives.

Therefore, to support the delivery of 2019/20 Annual Business Plan & Budget an average rate increase of 3.5% including CPI is required. However, the actual increase payable by any individual ratepayer may be more or less than this depending on the movement in the value of each property. The rate increase of 3.5% is equivalent to an increase of $49 per annum for the average assessment.

The State Valuation Office has completed their overall assessment and advised of a general property valuation increase of 5.3% over the previous year.

The current Roads to Recovery program expires in 2019-20. Whyalla City Council has been allocated $308,000 in 2019/20. The Long Term Financial Plan (LTFP) has been updated to reflect this grant income. It is assumed that this grant will continue but will not increase annually and therefore it is discounted in real terms throughout the future LTFP.

In accordance with the changes of the planning administration act, an allocation of $47,600 has been made for the implementation accreditation and joint planning board.

Continuance of Economic initiative incorporating growth strategy, new business facilitation, growth forums and workshops.


Capital Program Budget 2019-20 The table below shows Council’s expected spend on Capital Works during 2019-20, totaling $9.4 million. Asset Renewal expenditure is required to maintain Council’s infrastructure networks to their current standards and service levels.

Expenditure on New and Upgraded Assets includes funds to upgrade or expand Council’s infrastructure to meet increasing demand and capacity requirements, as well as allocations for major projects.

Based on Council’s Infrastructure & Asset Management Plans, the predicted expenditure on the renewal of assets and what Council proposes to spend on these assets as part of the 2019-20 budget are closely aligned.

Capital Expenditure

$‘000 $‘000 $‘000 $‘000 $‘000 $‘000

Asset Renewal 336 289 4,716 704

New or Upgraded Assets

160 1,464 704 292 360 392

TOTAL 496 1,753 5,420 292 360 1,096

Roads

& Other

Irrigation

Footpaths

Plant

& Equipment

Land

& Buildings

Recreation

& Open Space



Major Projects

In 2019-20 Council will undertake major capital works in line with Council’s Infrastructure & Asset Management Plan to ensure the longevity of existing assets as well as providing new assets to cope with the demands of the community as follows:

Concrete Footpath Program

The Concrete Footpath Program has been created to upgrade existing and new concrete footpaths used by pedestrians throughout Whyalla. Once completed this will improve access for all ages and abilities in conjunction with Council's Disability Action Plan. Project cost: $360,000

$14 Million - 3 Year Road Delivery Program

A Three Year Road Delivery Program is being proposed to address maintenance and backlog work including road resurfacing, kerbing, pavement patching, asphalt & spray sealing to 43.8km over 40 roads with 2019/20 being the first year of the program.

Horwood Street

Memorial Oval Upgrades

Redevelopment of Memorial Oval including new oval lighting to allow for full oval training and night-time activity, upgrading pop-up irrigation system and scoreboard system. Improving the playing surface to accommodate various sporting groups for local and regional events. Project cost: $827,000

Essington Lewis Ave

McDouall Stuart Ave

Foreshore Upgrade The Whyalla jetty and foreshore area upgrade of power and water supplies to allow access when required.

Project cost: $358,000

Examples of roads to be resurfaced:



Major Projects

Wetlands Highway Access A redesign of the entry point and carpark of Whyalla’s Jim Pollock Wetlands from the Lincoln Highway is proposed to allow easy and safe access for all vehicles, particularly long vehicles with trailers and caravans. A reduction of the speed limit along the Lincoln Highway will reduce risk to motorists at the entry and exit points.


Strategic Bicycle Plan – Ekblom Street Continuation of the Local Area Strategic Bicycle Plan (LASBP) with a shared bicycle path along Heurich Tce, along Ekblom Street to link to Nicolson Avenue. These paths have been designed for the safety and ease of cyclists and pedestrians.


Marina Lighting Upgrade Installation of solar powered lighting at the Whyalla marina carparks and breakwater walkways for the safety of patrons utilizing the area outside of daylight hours.


Northern Coastline Road Sealing The sealing of 1.1km of unsealed road connecting Backy Bay toward Pt Douglas along the Fitzgerald Bay Northern Coastline. This will improve vehicle access to the picturesque sites that our region has to offer.




Major Projects

Marina Break Water Strengthening Strengthening the Whyalla’s marina southern breakwater to improve the structure.


Ada Ryan Gardens Upgrade Installation of path lighting throughout the Ada Ryan Gardens between entry points to the gardens and foreshore playground providing a well-lit space for patrons. Including a general power upgrade to comply with current electrical standards and to provide sufficient power for future community events.


Street Tree Replacement Program Roll out of the Street Tree Replacement Program through the installation of new trees on a range of nature strips and median strips throughout Whyalla. These will be maintained with high quality fertilizer and soil conditioner, deep watering infrastructure, TerraCottem and irrigation to ensure durability.


Street Signage Street Sign replacement program will continue to be rolled out during 2019/20. The new street signs will improve identification of streets for locals and visitors when navigating their way through our City.


19


Key Initiatives

Works will be continuing on sealing of leaks throughout the ship, replacing/repairing rusted and unsafe structural steel, and minor surface protection to ensure future safety and structural soundness of the vessel for locals and visitors to enjoy for many years to come.


Improvement to the current boat ramp within the Whyalla marina by removing the existing concrete medians which will result in better access and therefore an easier launching process for users.


Renovation of the Goodman Street and Hockey Street entrances to the Whyalla cemetery including bollard installation, upgrading of the carpark as well as procurement of steel crosses for the unmarked graves. Revitalizing these spaces will provide improved accessibility for visitors.


Repair of the Whyalla Airline Crash Memorial site at the Ada Ryan Gardens including restoration of the currently weathered photographs and text. Completion is planned to time with the 20 year anniversary of the crash, and will provide a space for the public to show their respects.


The Foreshore Front Dune Direct Seeding Project has been established to assist with stabilising the beach sand to resist wind and sea erosion. Sections of the foreshore sand will be directly seeded with a coastal plant endemic to this region.


Provision of a shelter and seating for the comfort of local and visiting dog owners whilst utilizing the dog park on Searle Street. The shelter design will be consistent with shelters in other parks around Whyalla which have been well received by the public.


Major Repairs to HMAS Whyalla Cemetery Entrances Upgrades

and Crosses Whyalla Foreshore Boat Ramp

Whyalla Airlines Crash Memorial Dog Park Shelter Foreshore Front Dune Direct Seeding Project


Funding the Annual Business Plan

Financial Indicators Key financial sustainability performance targets ensure the long term financial sustainability of the Council covering the maintenance and development of the community’s assets as well as providing appropriate services.

Council has planned for an operating deficit before capital revenues for 2019-20 of ($254,800) and an operating deficit ratio of (1%).

This ratio demonstrates Council does not have the ability to reduce its net financial liabilities over the short term and decreases the percentage of total rates available to fund capital expenditure over and above depreciation expenses.

Council’s Annual Business Plan and Budget 2019-20 is consistent with Council’s Long Term Financial Plan (LTFP). This ensures financial sustainability over the ten years of the plan while achieving Council’s objectives as specified in its Community Strategic Plan.

Council’s Net Financial Liabilities Ratio is projected to be 52% for 2019-20 and is slightly above Council proposed target range of 50% over the ten-year period of the LTFP.

The Asset Sustainability Ratio is projected to be 165% in 2019-20. Based on Council’s Infrastructure & Asset Management Plans, this ratio indicates that the predicted expenditure on the renewal of assets and what Council proposes to spend on these assets (budgeted expenditure) are closely aligned.

This ratio is above target as Council is addressing the back log of infrastructure renewals.

Total borrowings are projected to be $14.4m for 2019-20 year end.

Council will monitor the implementation of the 2019-20 budget via regular budget updates and reviews in accordance with the Local Government Act 1999 and Local Government (Financial Management) Regulations 2011.

*adjusted operating surplus/(deficit) 2018 actual and 2019 adopted budget, due to advance payment of financial assistance grant

2018 Year End Actual ‐ Council's audited financial results as at 30 June 2018 2019 Adopted Budget ‐ Budget for 2018/19 as adopted by Council June 2018 2019 Projected Budget ‐ Council's revised budget, projecting its financial position to 30 June 2019 2020 Adopted Budget ‐ Adopted Budget 2019/20

Budget at a Glance

Net Rate Revenue $21.1m

Other Operating Revenue $10.4m

Operating Expenditure $31.8m

Capital Expenditure $9.4m

Key Financial Indicators Target 2018

Year End Actual

2019 Adopted Budget

2019 Projected

Budget

2020 Adopted Budget

*Adjusted Operating Surplus / (Deficit) - $’000 1,095 3 47 ($255)

Adjusted Operating Surplus / (Deficit) Ratio - % 2.5%-7.5% 4% 0% 0% (1%)

Net Financial Liabilities Ratio - % 0%-50% -4% 19% 28% 52%

Asset Sustainability Ratio - % 90-110% 65% 88% 142% 165%

21

Council will pursue synergies with the South Australian Strategic Plan and other relevant regional and national initiatives in its priorities for 2019-20 including:

• The Whyalla City Council Strategic Plan and articulation of a vision for our community to 2022 (under Section 122 of the Local Government Act 1999)

• Continued implementation of the Infrastructure Asset & Management Plan • Ensuring financial sustainability in accordance with the 10 Year Long Term

Financial Plan • Striving for continuous improvement within Council and service excellence in

line with Council’s values

Photography by R S Kittel


Summary Statement including Financing Transactions

Summary Statement Year Ending 30 June 2019

$‘000 $‘000 $‘000 $‘000

Operating Revenues 31,059 31,031 28,863 31,563

Less Operating Expenses 29,909 31,028 31,048 31,818

Operating Surplus/(Deficit) Before Capital Amounts 1,150 3 (2,185) (255)

Capital Activities Capital Expenditure on Renewal/Replacement 3,981 4,757 7,650 5,995

Less Depreciation, Amortisation & Impairment 6,868 6,919 6,919 7,083

Less Proceeds from Sale of Replaced Assets 64 50 50 50

Net Outlay on Existing Assets (2,951) (2,212) 681 (1,138)

Capital Expenditure on New/Upgraded Assets 1,105 2,510 7,682 9,442

Less Amounts Specifically for New/Upgraded Assets 1,681 100 868 250

Less Proceeds from Sale of Surplus Assets 96

Net Outlay on New/Upgraded Assets (672) 2,410 6,814 9,192

Net Lending/(Borrowing) for Financial Year 4,773 (195) (9,680) (8,309)

In any one year the above financing transactions are associated with either applying surplus funds stemming from a net lending result or accommodating the funding requirement stemming from a net borrowing result.

Financing Transactions Year Ending 30 June 2019

New Borrowings

$‘000 $‘000 $‘000 $‘000

550 6,147 8,300

*Repayment of Principal on Borrowings (6,269) (125) (125)

(Increase)/Decrease in Cash & Cash Equivalents 1,427 (28) 3,502 49

Net Balance Sheet Funding 69 (202) 156 (40)

Net Financing Transactions (4,773) 195 9,680 8,309

*Depending on cash flow

2018

Year End Actual

2019

Adopted Budget

2019

Projected Budget

2020

Proposed Budget

2018 Year

End Actual

2019

Adopted Budget

2019

Projected Budget

2020

Proposed Budget

Council plans to finance the net borrowing result by utilising its Cash Advance Debenture facility over the life of the Long Term Financial Plan. This will enable Council to repay principal when surplus funds are anticipated in future years.


2019-20 Rates Revenue

Council’s revenue for 2019-20 includes $16.4 million from general rates.

Council has set a rate which requires an increase in general rates to the average ratepayer of 3.5% including CPI. This will equate to an average increase of approximately $49 per annum. However, the actual increase payable by any individual ratepayer may be more or less than this depending on the movement in the valuation of each property, as set by the State Valuer General.

The State Valuation Office has completed their overall assessment and advised of a general property valuation increase of 5.3% over the previous year.

In setting rates for the 2019-20 financial year Council has considered the need to keep rate increases to a minimum in a time of lower global economic activity, as well as the following plans and considerations:

• the Community Strategic Plan that sets the overall direction of Council was developed following community consultation.

• the Whyalla City Council Long Term Financial Plan that sets the overall income receipts and expenditure outlays that are expected into the future and in particular the recurrent expenditure and income expected for the 2019-20 financial year.

• the Whyalla City Council Asset Management Plan that sets the forward capital works, maintenance and renewal programs.

• the resources required for the delivery of Council services as documented in the 2019-20 Annual Business Plan and Budgets which also outlines financial and non-financial performance levels.

• equity issues and the relationship between the various land uses and the previous rating structure.

• extremes in valuations and how their impact can be minimised in setting rating levels.

Rates at a Glance In 2019-20, an average general rate increase of

3.5% or $49 per property (depending on valuation)


Rates Revenue Method Used to Value Land

The Council has decided to continue to use Site Valuation as the basis for valuing land within the Council area. The Council considers that this method of valuing land provides the fairest method of distributing the rate burden across all ratepayers.

Business Impact Statement

Council has considered the impact of rates on all business in the Council area including:

• those elements of Council’s Community Strategic Plan;

• Council’s Long Term Financial Plan and Council’s Asset Management Plans;

• the operating and capital projects and new programs for the coming year required for the delivery of Council services for the coming year;

• the impact of rate changes on all ratepayers in the Council area;

• extremities in valuation and how their effect can be minimised in setting rating levels;

• Council’s recent development approval trends and growth expected for the Council area;

• equity issues and the relationship between the various land uses and the previous rating structure; and

• current local, state and national economic conditions and expected changes during the next financial year.

Differential General Rates

The Local Government Act provides for a Council to raise rate revenue through a general rate which applies to all rateable properties, or through differential general rates, which apply to classes of properties.

Due to the need to balance the community’s capacity to pay the Council has elected to apply differential general rates based on the locality in which the rateable property is situated and the use to which the property is put:

• Locality – town planning zones (TPZ) including residential, residential character, regional centre, caravan and tourist parks, commercial, district centre, local centre, town centre, open space, recreation, community, special industry (hydrocarbons), industry, light industry, deferred industry, coastal conservation, rural living, coastal settlement, settlement and remote area.

• Land use – prescribed land use codes (LUC) including residential, commercial-shop, commercial-office, commercial-other, industry-light, industry-other, primary production, vacant and other.

Council has regard to relative movements in valuation to ensure that the rate burden remains relatively constant between the classes of properties.

Rates revenue is used to provide a range of services such as road rehabilitation, footpath repairs and maintenance, stormwater drainage, the collection of

rubbish and recyclable materials, ongoing maintenance of parks, gardens and buildings, street lighting and street cleaning, libraries, animal control, planning and enforcement of local laws, provide community grants and events for the

people of Whyalla to accommodate social needs.


Rates Revenue for

2019-20 Fixed Charge

Council considers it appropriate that: • all rateable properties make a contribution to

the cost of administering Council’s activities; and

• all rateable properties make a contribution to the cost of creating and maintaining the physical infrastructure that supports each property.

Approximately 39% of Council’s general rate revenue is generated via the fixed charge portion. For 2019-20 the fixed charge is $572.

Rate Capping

Council will continue the application of rate capping for the 2019-20 financial year. The general rate increase will be capped at 25%.

Please refer to Council’s Rating Policy for eligibility.

Rate Rebate

A rebate of rates in respect of any rateable land in the Council area will be available in accordance with the Local Government Act 1999 and Council’s Rating Policy. The Policy provides eligibility guidance upon which a ratepayer is entitled to a rebate of rates.

A full version of Council’s Rating Policy can be viewed at www.whyalla.sa.gov.au.

Natural Resources Management Levy

The Natural Resources Management (NRM) Levy, set by the NRM Boards, is a State Government tax imposed under the Natural Resources Management Act 2004. Council is obliged to collect the levy on behalf of the State Government for no net gain to Council. Council collects the levy on behalf of the Natural Resources Eyre Peninsula Management Board. The levy is based on land use type and is shown as a separate charge on the rates notice. The management board has advised the levy for 2019-20 is $906,400.

Further information on the NRM Levy and how the funds will be spent can be found on the Natural Resources Eyre Peninsula: www.naturalresources.sa.gov.au/eyrepeninsula.

NRM Levy

Land Use Type Rate Per Land Use

Residential $77.97

Commercial $116.96

Industrial $116.96

Primary producers $155.95

Other & vacant land $77.97

Service Charges

Service charges are levied on the concept of user pays based on the cost to operate and maintain the service, the cost to improve or replace the service and recognition that the value of a property is enhanced by the availability of the service.

Waste Management

The Council waste management service charge is raised to maintain the operating and capital requirements relating to waste management services partially through the sale of recycled materials, gate fees, product sales and the waste service charge. The revenue raised from this charge can only be applied to maintenance and replacement of the service and only those properties receiving the service will be levied. For the 2019-20 financial year the service charges will be $350.

Council will continue to provide the waste service charge remission. Eligible pensioners will need to apply for this rebate annually by completing the relevant form and providing supporting evidence of eligibility.


http://www.naturalresources.sa.gov.au/eyrepeninsula


Other Operating Income & Expenditure

Operating Income ● Rates Other Other rate revenue includes the State Government’s Natural Resources Management (NRM) levy collected on behalf of the NRM Board, Waste Management Service Rates is expected to account for 15% of operating income in 2019-20.

● Statutory Charges Statutory Charges are expected to account for 1% of operating income in 2019-20. Statutory charges are fees for regulatory services. They are associated with the granting of a permit/license or the regulation of an activity. They include Development Act Fees and Parking Fines.

● User Charges User Charges are expected to account for 13% of operating income in 2019-20. User Charges relate mainly to the recovery of service delivery costs through the charging of fees to users of Council’s services. They include airport fees, child care fees, waste management fees, hire of community facilities and property leases.

● Grants, Subsidies and Contributions Operating Grants, Subsidies and Contributions are expected to account for 16% of operating income in 2019-20. The grants comprise of the General Purpose Grant, Local and Special Road Grants and Roads to Recovery Grant.

● Reimbursements and Other Income Reimbursements and Other Income are each expected to account for 3% of operating income in 2019-20.

Reimbursements are amounts received as payment for work done by the Council acting as an agent for others. Other Income includes interest income and other revenue not separately classified above.

Operating Expense ● Employee Costs Employee costs are expected to account for 35% of Operating Expenditure in 2019-20. Employee costs include all labour related expenses such as wages and salaries and on-costs such as allowances, leave entitlements and employer superannuation

● Materials, Contracts & Other Expenses Materials, Contracts & Other Expenses are expected to account for 42% of Operating Expenditure in 2019-20. Materials cover payments for physical goods and includes purchase of consumables, water and energy. Contract services involve payments for the external provision of services.

● Finance Costs Finance costs are expected to account for 1% of Operating Expenditure in 2019-20. Finance costs cover the costs of financing the Council’s activities through borrowings and the interest expense is based on cash flows.

● Depreciation Depreciation expense is expected to account for 22% of Operating Expenditure in 2019-20. Depreciation is an accounting measure, which records the consumption of the Council’s infrastructure, property, plant and equipment and has been based on Council’s Infrastructure & Asset Management Plans.

Operating Income Operating Expenditure


Photography by Ky Blackwell


2018-19 Reflection Highlights of Actions and Objectives Achieved

Capital Works Program

Major Projects included:

Jetty – Commencement of construction for upgrade of the Jetty at Whyalla’s Foreshore with new design. This project will be completed in 2020. Project Cost: $6.5 million Stormwater – Completion of the development of a Stormwater Management Plan (SMP). Project Cost: $281,000 Wetlands Wharf – Replacement of wharf/jetty at the Jim Pollock Wetlands to improve accessibility for all patrons whilst accommodating to for both high and low water levels. Project Cost: $50,000

Roads – Road Maintenance: Road Resurfacing Program including Kerbing works, Pavement Patching and Asphalt & Spray Sealing. This includes various residential roads in the Bevan Crescent and Charles Avenue areas as part of the Roads to Recovery Program. Project Cost: $586,000

Footpaths – General upgrade and refurbishment of various footpaths to ensure the safety and wellbeing of pedestrians throughout Whyalla. These include works on Robertson Tce, Risby Avenue and Ocean Eyre Estate. Project Cost: $170,000

Marina Upgrades - Breakwater – Strengthening of the breakwater in the Marina using 4 tonne rocks/boulders - Project Cost: $136,000 Moorings – Replacement of boat moorings in marina – Partly Completed – Project Cost: $120,000

Leisure Centre Upgrades – Improvements to the Whyalla Aquatic and Leisure Centre Project Cost: $170,000

Shared/Bicycle Path – The completion of Heurich Terrace to Cartledge Avenue connecting with Nicolson Avenue, 620 metres to link all schools with safe cycle paths. Project Cost: $132,400

Safer Civic Park – Installation of lights and CCTV cameras throughout Civic Park to ensure future safety for all users. Project Cost: $146,000 Street Signage – Renewal of various street signs throughout the city Project Cost: $100,000

Northern Coastline Masterplan – Progression of the Northern Coastline Masterplan Project Cost: $87,000 Wilson Park – Improvement to Wilson Park on McBride Terrace including playground and skate park facilities Project Cost: $62,000 Murninnie Beach Campsite – Development of a campsite at Whyalla’s Murninnie Beach Project Cost: $16,000

Council also undertook a number of community projects that supported open space and recreation planning, building improvements and community wellbeing.


Budget Projection 2018-19 Council is projecting a year end adjusted operating surplus of $47,121 which is higher than its adopted budget.

Net loan borrowing for 2018-19 are projected to be $6.1m which is an increase of $2.2m on the adopted budget. This is mainly attributed to Civic Park CCTV upgrade, airport upgrades including a fuel & storage facility and renewal of the airstrip. Council is continuing to update and review its Long Term Financial Plan and Asset Management Plans with work continuing on the formalisation of asset service levels, useful lives and valuations.

Committed Projects from 2018-19 that will be completed in 2019-20 will be updated once the financial year-end audit is completed.

Singers at Whyalla’s 2018 UneARTh Festival

Photography by Lynne Hallam

Appendix A Financial Statements Appendix A

Financial Statements


Summary Statement including Financing Transactions

Summary Statement Year Ending 30 June 2019

$‘000 $‘000 $‘000 $‘000

Operating Revenues 31,059 31,031 28,863 31,563

Less Operating Expenses 29,909 31,028 31,048 31,818

Operating Surplus/(Deficit) Before Capital Amounts 1,150 3 (2,185) (255)

Capital Activities Capital Expenditure on Renewal/Replacement 3,981 4,757 7,650 5,995

Less Depreciation, Amortisation & Impairment 6,868 6,919 6,919 7,083

Less Proceeds from Sale of Replaced Assets 64 50 50 50

Net Outlay on Existing Assets (2,951) (2,212) 681 (1,138)

Capital Expenditure on New/Upgraded Assets 1,105 2,510 7,682 9,442

Less Amounts Specifically for New/Upgraded Assets 1,681 100 868 250

Less Proceeds from Sale of Surplus Assets 96

Net Outlay on New/Upgraded Assets (672) 2,410 6,814 9,192

Net Lending/(Borrowing) for Financial Year 4,773 (195) (9,680) (8,309)

In any one year the above financing transactions are associated with either applying surplus funds stemming from a net lending result or accommodating the funding requirement stemming from a net borrowing result.

Financing Transactions Year Ending 30 June 2019

New Borrowings

$‘000 $‘000 $‘000 $‘000

550 6,147 8,300

*Repayment of Principal on Borrowings (6,269) (125) (125)

(Increase)/Decrease in Cash & Cash Equivalents 1,427 (28) 3,502 49

Net Balance Sheet Funding 69 (202) 156 (40)

Net Financing Transactions (4,773) 195 9,680 8,309

*Depending on cash flow

2018

Year End Actual

2019

Adopted Budget

2019

Projected Budget

2020

Proposed Budget

2018 Year

End Actual

2019

Adopted Budget

2019

Projected Budget

2020

Proposed Budget


Financial Statements Budget 2019-20 Statement of Comprehensive Income

Year Ended 30 June: 2018 2019 2019 2020

Year End Actual

Adopted Budget

Projected Budget

Adopted Budget

$‘000 $‘000 $‘000 $‘000

INCOME

Rates 19,905 20,404 20,404 21,152

Statutory Charges 329 291 350 368

User Charges 4,041 4,194 3,771 3,944

Grants, subsidies, contributions 5,423 4,952 2,937 5,000

Investment Income 49 32 102 35

Reimbursements 92 68 94 8

Other Revenues 1,221 1,090 1,206 1,056

Total Income 31,060 31,031 28,864 31,563

EXPENSES

Employee costs 10,174 10,695 10,718 11,386

Materials, contracts & other expenses 12,820 13,259 13,356 13,201

Depreciation 6,869 6,919 6,919 7,083

Finance Costs 47 155 55 148

Total Expenses 29,910 31,028 31,048 31,818

OPERATING SURPLUS/(DEFICIT) BEFORE CAPITAL AMOUNTS 1,150 3 (2,185) (255)

Net gain/(loss) on disposal or revaluations

(33)

50

50

50

Amounts specifically for new assets 1,681 100 868 250

Physical resources free of charge

NET SURPLUS/(DEFICIT) 2,798 153 (1,267) 45

OTHER COMPREHENSIVE INCOME

Changes in revaluation surplus/(deficit) - IPP&E 286 14,603 1,967 8,294

TOTAL COMPREHENSIVE INCOME 286 14,603 1,967 8,294 Underlying surplus/(deficit) adjusted financial assistance grants 3,085 14,756 700 8,339

Heading Explanation

2018 Year End Actual – Council’s audited financial results as at 30 June 2018 2019 Adopted Budget –Budget for 2018-19 as adopted by Council June 2018 2019 Projected Budget – Council’s revised budget, projecting its financial position to 30 June 2019 2020 Proposed Budget – Proposed Budget for 2019-20.


Statement of Financial Position

Year Ended 30 June: 2018 2019 2019 2020 Year End

Actual Adopted

Budget Projected

Budget Adopted Budget

$‘000 $‘000 $‘000 $‘000

ASSETS

Current Assets

Cash & Equivalent Assets 3,646 38 98 49

Trade & Other Receivables 3,519 3,227 3,318 3,319

Inventories 155 158 155 155

Total Current Assets 7,320 3,423 3,571 3,523

Non-Current Assets

Financial Assets 3,154 3,154 3,154 3,154

Infrastructure, Property, Plant & Equipment 232,661 252,080 243,041 259,689

Other Non-current Assets 323

Total Non-Current Assets 236,138 255,234 246,195 262,843

Total Assets 243,458 258,657 249,766 266,366

LIABILITIES

Current Liabilities

Trade & Other Payables 1,984 1,785 1,987 2,017

Borrowings 125 3,917 6,100 14,400

Provisions 2,545 2,500 2,500 2,500

Total Current Liabilities 4,654 8,202 10,587 18,917

Non-Current Liabilities

Borrowings

Provisions 1,268 1,057 942 873

Total Non-Current Liabilities 1,268 1,057 942 873

Total Liabilities 5,922 9,260 11,529 19,790

NET ASSETS 237,537 249,397 238,237 246,576

EQUITY

Accumulated Surplus 37,951 36,255 37,092 37,287

Asset Revaluation Reserve 197,459 211,776 199,427 207,720

Other Reserves 2,126 1,366 1,719 1,569

TOTAL EQUITY 237,537 249,397 238,237 246,576


Statement of Changes in Equity

Year Ended 30 June: 2018 2019 2019 2020 Year End Adopted Projected Adopted Actual Budget Budget Budget

$‘000 $‘000 $‘000 $‘000

ACCUMULATED SURPLUS

Balance at end of previous reporting period

35,983

35,695

37,951

37,092

Net Result for Year 2,798 153 (1,266) 45

Transfers to Other Reserves 875 1,407 1,407 550

Transfers from Other Reserves (1,704) (1,000) (1,000) (400)

Balance at end of period 37,951 36,255 37,092 37,287

ASSET REVALUATION RESERVE

Property, Plant & Equipment

197,459

211,776

199,427

207,720


OTHER RESERVES

Balance at end of previous reporting period

1,296

1,773

2,126

1,719

Transfers from Accumulated Surplus (874) (1,407) (1,407) (550)

Transfers to Accumulated Surplus 1,704 1,000 1,000 400


TOTAL EQUITY AT END OF REPORTING PERIOD 237,536 249,397 238,237 246,576


Statement of Cash Flows

Year Ended 30 June: 2018 2019 2019 2020 Year End Adopted Projected Adopted Actual Budget Budget Budget

$‘000 $‘000 $‘000 $‘000

CASH FLOW FROM OPERATING ACTIVITIES

Receipts

Operating receipts 32,297 31,003 28,961 31,497

Investment Income 49 32 102 35

Payments

Operating payments (24,199) (24,165) (24,116) (24,595)

Finance Costs (47) (155) (55) (148)

Net Cash provided by (or used in) Operating Activities 8,100 6,715 4,891 6,788

CASH FLOWS FROM INVESTING ACTIVITIES

Receipts

Amounts Specifically for New/Upgraded Assets 1,681 100 868 250

Sale of Renewed/Replaced Assets 64 50 50 50

Sale of Surplus Assets 95

Repayments of Loans by Community Groups 10 5

Payments

Expenditure on Renewal/Replacement of Assets (3,981) (4,757) (7,650) (5,995)

Expenditure on New/Upgraded Assets (1,106) (2,510) (7,682) (9,442)

Net Cash provided by (or used in) Operating Activities (3,236) (7,112) (14,414) (15,137)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from Borrowings 550 6,100 8,300

Repayments of Borrowings (6,291) (125) (125)

Net Cash provided by (or used in) Financing Activities (6,291) 425 5,975 8,300

Net Increase/(Decrease) in cash held (1,427) 28 (3,548) (49)

Opening Cash, cash equivalents or (bank overdraft) 5,073 10 3,646 98

Closing Cash, cash equivalents or (bank overdraft) 3,646 38 98 49



Draft 2018/19 Annual Business Plan and Budget

HOW TO CONTACT US Civic Building Darling Terrace Whyalla SA 5600 PO Box 126 Whyalla SA 5600 e. [email protected] w. www.whyalla.sa.gov.au

t. 08 8640 3444 f. 08 8645 0155

Photography by David Oliver

mailto:[email protected]


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