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Draft Budget 2018/19 Overview and key highlights Council’s Annual Budget The Annual Budget is an integral part of Council’s overall strategic planning framework. It endeavours to allocate the resources needed, over a 12 month period, to achieve the goals and directions that have been established in the Council Plan 2017-2021. The 2018/19 Annual Budget focuses on delivering quality services to the community through a combination of existing programs, new initiatives and capital works. The Annual Budget also includes information about the rates and charges to be levied, the human resources required, and other financial information. Major challenges include meeting the needs of the Shire’s growing population, reviewing its critical infrastructure renewal requirements and improving Council’s overall financial position, within the constraints of the rate cap. Capital Works Program The total capital works program for the 2018/19 year is expected to be $22 million comprising $19.6 million new works plus $2.4 million carry over projects from last year. New works are primarily made up of: • $11.6 million roads investment. • $1.4 million drainage investment. • $1.4 million footpaths. • $1.4 million open space investment. • $0.2 million bridges and major culverts investment. The reopening of the West Gippsland Arts Centre (pictured below) following its redevelopment will occur in the second half of the financial year. For a detailed list of specific projects and investments, please refer to the Capital Works Program fact sheet. Operating Budget The proposed budget represents income of $86.8 million and expenditure of $75.1 million resulting in a surplus of $11.7 million. The surplus of $11.7 million is then converted into an adjusted underlying result that better reflects Council’s level of financial sustainability. The underlying result for 2018/19 is a surplus of $0.8 million. It is a good measure of Council’s ability to achieve its service delivery objectives as it is not impacted by capital income items which can often mask the operating result. This underlying result is based on the surplus of $11.7 million that then excludes grants received for capital purposes which are non-recurrent and capital contributions from other sources to arrive at the adjusted result of $0.8 million. Council’s annual expenses are expected to increase by 4.5% mainly due to an expected increase in the cost of waste recycling, increase in approved employee positions to meet legislative requirements and to address service delivery needs in response to growth within the region. By contrast, revenue is expected to increase by 1.5% mainly due to the impact of the 2.25% rate cap, increase to waste services charges by 2.25% and expected CPI increases to grant and user charge revenue. Rates and Valuations The rate increase is capped at 2.25% in line with the Victorian Government’s Fair Go Rates System (FGRS). Rates are calculated as a percentage of the Capital Improved Value (CIV). The 2.25% increase applies to the total rates revenue received by Council, not to individual ratepayers. Total revenue from rates service and charges for 2018/19 is $57.2 million (including supplementary valuations and interest on rates and charges). 2018/19 is the first year of the 2018 Revaluation of all properties within the municipality. All rateable properties within the Shire have been revalued at 1 January 2018 and are effective from 1 July 2018. The change in rates will be different for each property due to the CIV of each property. For further details on rates and charges refer to the Rates and Valuations fact sheet.
