Section 508A Special Variation Application Form – Part B · 2012-03-07 · Section 508A Special...

Section 508A Special Variation Application Form – Part B

Lake Macquarie City Council 24 February 2012 Council Contact Person: Wayne Jack Council Contact Phone: (02) 4921 1181 Council Contact Email: [email protected]

Section 508A Special Variation Application Form – Part B – Lake Macquarie City Council IPART i

© Independent Pricing and Regulatory Tribunal of New South Wales 2011

This work is copyright. The Copyright Act 1968 permits fair dealing for study, research, news

reporting, criticism and review. Selected passages, tables or diagrams may be reproduced for such

purposes provided acknowledgement of the source is included.

The Tribunal members for this special variation assessment are:

Mr James Cox PSM, Acting Chairman and Chief Executive Officer

Ms Sibylle Krieger, Part Time Member

Inquiries regarding this document should be directed to a staff member:

Nicole Haddock (02) 9290 8426

Tony Camenzuli (02) 9113 7706

Independent Pricing and Regulatory Tribunal of New South Wales

PO Box Q290, QVB Post Office NSW 1230

Level 8, 1 Market Street, Sydney NSW 2000

T (02) 9290 8400 F (02) 9290 2061

www.ipart.nsw.gov.au

Section 508A Special Variation Application Form – Part B – Lake Macquarie City Council IPART 1

Contents

1 Introduction 3

2 Special variation application overview 4 2.1 Background and summary 6

2.2 Reasons for the application 6 2.3 Period 8

2.4 Financial impact of the proposed increases 9

2.5 How the community will benefit and how the application reflects the Community Strategic Plan 11

2.6 Expiring variation – Sustainability Levy 14

2.7 Supplementary material 16

3 Need for the variation 20

3.1 Variations for capital expenditure 25 3.2 Strategic planning information 25

3.3 Financial planning information 41

3.4 Efficient and feasible program of expenditure 66 3.5 Impact on financial sustainability 74

3.6 Impact of special variation on key performance indicators - asset management planning 81


4 Community consultation 109 4.1 The consultation strategy 110

4.2 Outcomes from community consultations 118


5 Rating structure and the impact on ratepayers 142

5.1 Proposed rating structure 142 5.2 Impact on rates 143

5.3 Community’s capacity to pay proposed rate increases 145

5.4 Addressing hardship 153

6 Financing strategy 154

6.1 New capital financing strategy 154 6.2 Sustainability of debt 154

7 Productivity improvements and cost containment strategies 157

7.1 Recent productivity improvements 158

8 Implementation of Integrated Planning and Reporting framework 179

9 Other information 181

9.1 Special variation history 181 9.2 Reporting 189

9.3 Council resolution 191

10 Checklist of application contents 192

11 Certification by the General Manager and the Responsible Accounting Officer 193

2 IPART Section 508A Special Variation Application Form – Part B – Lake Macquarie City Council

12 Supporting material 194


1 Introduction

This form is to be completed by councils when applying for a special variation to general income

under section 508A of the Local Government Act 1993.

Councils must refer to the Division of Local Government (DLG), Department of Premier and

Cabinet Guidelines for the preparation of an application for a special variation to general income

in 2012/13 in completing this application form. These Guidelines are available on the Division’s

website at www.dlg.nsw.gov.au.

Note that this part of the application (Part B) must be completed in conjunction with Part A

(Section 508A Special Variation Application Form 2012/13 – Part A).

This part of the application consists of the following sections:

� Section 2 - Special variation application overview

� Section 3 - Need for the variation

� Section 4 - Community engagement/consultation

� Section 5 - Rating structure and impact on ratepayers

� Section 6 - Financing strategy

� Section 7 - Productivity improvements and cost containment strategies

� Section 8 – Implementation of Integrated Planning and Reporting Framework (IP&RF)

� Section 9 - Other information (special variation history, reporting arrangements and the

council’s resolutions)

� Section 10 – Checklist of application contents

� Section 11 - Certification by the General Manager and the Responsible Accounting Officer.

Both Part A and Part B of the application should be completed and submitted electronically to

[email protected]. A signed copy of the certification should be scanned and

attached to the same email. All attachments should be emailed if possible.

The spaces provided in each section of this application form may be extended as necessary to fit

information. Councils are not limited in the amount of information they provide. Each section

must be completed before IPART can assess the application. If necessary, IPART may seek

further information from the council.

IPART will post all applications on its website. Councils should also make their

application available to their community through their website.

Councils are required to submit their application by cob Friday, 24 February 2012. IPART

encourages councils to submit their applications as early as possible.

Councils are also required to notify IPART of their intention to apply for a special variation under

section 508A by cob Friday, 16 December 2011.


2 Special variation application overview

This section provides sufficient information to form a general understanding of the purpose and

reasons for the application. It includes a brief commentary on:

� background and summary

� the reasons for the application

� period covered by the application

� financial impact of the proposed increases, including the total cumulative percentage increase

(refer to Part A)

� how the community will benefit and how the application reflects the Community Strategic Plan

� details of any expiring special variations over the period of the variation, in particular if the new

variation is a total or partial continuation of the expiring variation’s projects



2.1 Background and summary

Lake Macquarie City Council does not have the capacity to generate the funds necessary to

maintain our assets and deliver the services and infrastructure our growing community has told

us they expect, and that our planning tells us we will need.

We consider that rates are the most appropriate source of the significant funds required to

provide services to our growing community into the future. When rate pegging was introduced in

1977, our local government area (LGA) had only just reached municipality status. Our rates at

this time were comparatively low, and the rate peg has been applied to this low starting point for

the past 35 years.

Three decades on, Lake Macquarie is now the largest city in the Hunter and fourth largest in the

state, with one of the fastest rates of growth of any LGA in New South Wales. This growth has

brought a diversity that we didn’t have in the 1970s. We not only have higher demands on our

‘traditional’ services, but our community is more diverse and demands a wider range of services

in keeping with the contemporary role of local government.

The costs of servicing our community have increased. With income pegged at levels reflective of

our 1977 status, it is not surprising that our costs are rising faster than our income. This situation

has been exacerbated by increasing costs such as fuel and energy price rises, increases to

award wages, and the requirement to cover costs shifted to us from other levels of government.

Between 2005/06 and 2009/10, this cost shifting amounted to $62m.

Comparisons with other Group 5 councils demonstrate we are already lean in our operations. We

undertook a comprehensive Service Review during 2009 to 2011 which identified more than

$4.2m in ongoing savings, achieved through cost reductions, efficiency gains and increased

income. In spite of these savings, the gap between what can be delivered within the existing

budget and the community’s current expectations and future needs remains substantial.

We have been actively engaging with our community for a number of years about the services

that we provide. Prior to the preparation of this application for a special variation to rates, we

prepared, consulted and implemented a comprehensive Integrated Planning and Reporting

Framework (IP&RF). The community consultations associated with both of these projects have

confirmed that our residents do not want to see services reduced or assets deteriorate in order to

achieve a balanced budget. In fact the majority would prefer to see rates increased to enable us

to better manage our assets and deliver increased works and services that meet our community’s

needs in a financially responsible manner.

This application, if approved, will provide council with the means to meet these community

expectations.

2.2 Reasons for the application

Lake Macquarie City Council makes this application to:

� maintain and enhance existing assets and levels of service to meet the demonstrated needs

and priorities of our growing community while securing long term financial sustainability for

Council


� address Council’s existing infrastructure backlog, which has adverse implications for the

amenity, safety and health of our community and presents unacceptable risks for Council, and

provide a program of infrastructure renewal

In 2008, Council undertook the first-10 year planning process under the Integrated Planning and

Reporting framework, including community consultation, and produced and circulated through

public exhibition its first Community Strategic Plan and an associated Resourcing Strategy.

The Resourcing Strategy, which includes the Long Term Financial Plan and Asset Management

Strategy and Plans, was developed to enable us to strategically manage our resources, prudently

respond to opportunities, and deliver works and services to meet our community’s needs in a

financially responsible manner. Current projections of revenue do not support this strategy.

Lake Macquarie City Council reported an operating deficit of over $2.8m in 2010-2011. Our Long

Term Financial Plan identified that without intervention this deficit could be expected to continue

to compound over the next seven years, with a projected cumulative operating deficit of $167m

by 2018/19. Council also has an infrastructure backlog which currently stands at $67m.

In recent years, Council has addressed operating deficits by subsidising service provision

(operating expenditure) from its asset replacement reserve to the extent of $20m per year. In

future, Council could cut services and sell off assets, or allow them to run down to balance its

budget, but this approach would be unsustainable. It would be out of line with our vision for the

City and our responsibilities under the Local Government Act, and would be contrary to the

wishes of our community. It would also only exacerbate the infrastructure backlog.

In June 2011, Council initiated Securing our Future, a comprehensive program of community

consultation to find the right balance between the levels of service the community wants and the

amount of rates they are willing and can afford to pay. This program will be more completely

discussed in Section 4.

In summary, the Securing our Future consultation was conducted over a six-month period in 2011

and comprised three stages as shown in Table 2.1.

Table 2.1 - Three consultation stages of Securing our Future

Stage Description Details

1 Understanding what we value Understanding the services our community values and would be prepared to pay for through a potential increase in rates.

2 Developing funding options Developing three funding options to meet the requirements identified in Stage 1.

3 Finding the right solution Explaining the three options to the community and encouraging the community to ‘vote’ for the option they preferred through a variety of feedback channels.

The funding options canvassed during the consultation are set out in Table 2.2. The feedback

captured throughout Securing our Future convincingly demonstrated the community’s demand for

enhanced services and new infrastructure, and its preparedness to pay for these through an

increase to rates consistent with Option 3 below.


This application is made under section 508A of the Act for a seven-year special rate variation in

accordance with the proposed rate increase and delivery program under this option. It introduces

a reasonable increase in rates, spread over the maximum number of years (seven), that has

demonstrated community support. It will allow Council to provide the levels of service asked of it

by the community, and progress many of the targets and aspirations articulated in the Community

Strategic Plan.

Table 2.2 - Summary of funding options

OPTION KEY FEATURES AVERAGE INCREASES OVER 7 YEARS

AVERAGE WEEKLY INCREASE*

$0.47 per week

RESIDENTIAL and FARMLAND

Option 1:

Reduce Services

– Maintain Rates

• Services significantly reduced

• Condition of our assets declines

• Rates increase only by rate peg amount set annually by IPART

3%

(estimated rate peg)

$1.82 per week

BUSINESS and MINING

7.7%


$1.22 per week Option 2:

Maintain Services

– Increase Rates

• Services largely maintained

• Condition of our assets maintained at current

9.9%

BUSINESS and MINING

$6.13 per week

9.8%


$1.56 per week Option 3:

Improve Services

– Increase Rates

• Services improved Delivers on Community Plan

• Condition of our assets improved

• Program of infrastructure renewal

12.8%

BUSINESS and MINING

$8.27 per week

* based on residential land value of $175,000 and business land value of $400,000

2.3 Period

A variation for the seven-year period is sought, resulting in a permanent increase to the rate

base. This long-term approach delivers greater financial stability, maintains and in some cases

enhances the level of services to the community, ensures cost-efficient maintenance of assets,

reduces the infrastructure backlog, and addresses issues of intergenerational equity.

The proposed variation and program of works aligns with Council’s Integrated Planning and

Reporting Framework and will enable adherence with consultation and planning cycles under the

IP&RF guidelines.

The period proposed also enables Council to use debt for capital works and expenditure in a way

that supports the principle of intergenerational equity. By matching the term of our loans to the life

of the assets that are constructed or purchased with the borrowed funds, we can ensure that


future generations who will be using the infrastructure (roads, parks, halls, pools, libraries) are

helping to pay for these long-lived assets.

Spreading the requested increase over the longest allowed period also reduces the burden on

current ratepayers. This is important even though there is a strong case for the affordability of the

increase.

The Long Term Financial Plan takes the above factors into account, and models the most

appropriate revenue path to enable Council to deliver services to the community in a cost

effective manner.

2.4 Financial impact of the proposed increases

2.4.1 Ratepayers

Council has undertaken consultation and analysis to demonstrate that the proposed rate increase

is affordable and will have a reasonable impact on ratepayers. As will be more fully explained in

Section 5, various indicators point to our community’s capacity to pay:

� The Socio-Economic Indices for Areas (SEIFA) data for Lake Macquarie indicates that Lake

Macquarie is the least disadvantaged, and has the highest level of economic resources of all

Group 5 councils.

� The median weekly household income for Lake Macquarie is one of the highest within its

group of councils, while unemployment levels are the lowest. The median rent and housing

loan repayments are equivalent to the average for Group 5 councils.

� The average residential rate per assessment for Lake Macquarie is currently below average,

and the average business rate per assessment is substantially below that of both Group 5

councils and the NSW average.

� Lake Macquarie also has the lowest outstanding rates and annual charges ratio within its

group of councils, and this ratio is significantly lower than the NSW average.

Council has modelled the financial impact of the proposal and engaged the community to ensure

that both the program of works and the financial impacts on ratepayers are transparent and fully

understood. Feedback from community consultation indicates that Lake Macquarie residents are

willing to pay increased rates to maintain or improve levels of services. Evidence for this is

provided in Section 4 of this application.

The proposed seven-year average increases equate to:

� $1.56 per week or $81.10 per annum for those with residential properties with an average land

value of $175,000

� $8.27 per week or $443.04 for businesses with an average land value of $400,000


Table 2.3 - Increases to average rates as percentages across all categories

Category Year 1

2012/13

Year 2

2013/14

Year 3

2014/15

Year 4

2015/16

Year 5

2016/17

Year 6

2017/18

Year 7

2018/19 Cumulative

Residential 9.80% 9.70% 9.00% 7.75% 7.25% 6.75% 4.75% 65.33%

Business 14.00% 14.00% 12.50% 9.00% 7.50% 6.75% 4.75% 87.34%

Farmland 9.80% 9.70% 9.00% 7.75% 7.25% 6.75% 4.75% 64.17%

Mining 14.00% 14.00% 12.50% 9.00% 7.50% 6.75% 4.75% 86.61%

• includes cumulative increases over seven years, including the rate peg at 3.6%

The figures above include the rate peg increase and provide for continuation of Council’s

environmental programs after the existing special variation (known as the Sustainability Levy)

expires in 2014.

The proposed increases, while cumulative over seven years, are applied to a low starting rate. In

2010/11 residential rate revenue per capita in Lake Macquarie was $384, the lowest of all Group

5 councils. In the latest Division of Local Government comparative data, average residential rates

per assessment were below the NSW average at $855, and average business rates per

assessment were well below both the Group 5 average and below the NSW state average at

$3,058.

Our calculations show that even after the proposed seven-year increases, average rates for Lake

Macquarie businesses would still be lower than those of Newcastle at the end of the proposed

variation period in 2018/19 because of the low starting rate at commencement of the variation

(Newcastle business rates per assessment were $6,773 for 2009/10, more than double that of

Lake Macquarie).

2.4.2 Council

Our projections indicate that our current ‘baseline scenario’ (a budget that maintains current

service levels with no rate increase above the rate peg) would result in a cumulative operating

deficit of approximately $167m over the next seven years, and significant continuing budget

deficits.

Therefore, if a rate increase above the rate peg is not approved, Council will need to make

significant changes to its levels of service to avoid an unacceptable financial situation. This will

result in severe cuts to works and services, reductions in current maintenance levels and a

growing infrastructure backlog. The adverse implications of reduced asset maintenance on the

amenity, safety and health of our community, and the resultant risks to Council are discussed in

Section 3.

Although our projections with the proposed special variation still involve operating deficits over

future years, these deficits are eventually reversed by 2017/18. Modelling suggests that with the

proposed variation we will achieve an operating surplus from 2017/18 onward.


The variation will ensure the financial sustainability of the Council and address infrastructure

backlog issues so that our significant asset base is able to provide the level of service the

community wants, as identified through our 10-Year Community Strategic Plan, 4-Year Delivery

Program and Annual Operational Plan. The additional funding will address the current

infrastructure gap by supporting the funding of replacement capital, and servicing the loan

program that has been identified to fund the acquisition of new assets and the construction of

roads, cycleways and drainage infrastructure.

Lake Macquarie’s Long Term Financial Plan includes a detailed analysis of various funding

strategies designed to reduce the burden on ratepayers and spread it more fairly between

generations. Although this application focuses on a rate variation as the most appropriate course

of action, other sources of income including anticipated future fees and charges, investment

revenue, and future grants have been taken into consideration, together with a financially

sustainable borrowing program.

2.5 How the community will benefit and how the application reflects the Community Strategic Plan

If the proposed rate variation is approved, the community will see much of their vision as outlined

in the Community Plan come to life, with significant progress towards its delivery over the seven-

year period.

The increased funding will allow Council to respond to unmet need and the demand for enhanced

services by improving levels of service to the community and providing an additional program of

works for roads, pools, libraries, parks and playgrounds, and upgrades to town centres.

The case for unmet need and demand for enhanced services has been quantified through

Council’s Levels of Service (LoS) Review Process, conducted as part of Securing our Future. The

methodology and outcomes of the LoS process are discussed in Section 4, and the full report,

Providing Enduring Value: Understanding our Community’s Preferred Level of Rates for Service,

is included as Supporting Document 2.1.

Table 2.4 below provides a basic overview of the benefits to the community of the program of

works. Further details on the specific programs and how they relate to the Community Strategic

Plan and Council’s other strategic planning documents are provided in Section 3.2.


Table 2.4 - Overview of benefits and how they link to Community Strategic Plan

Option 3 Likely Benefits Link to Community Strategic Plan

INFRASTRUCTURE MAINTENANCE

Increased by $15m over 7 years

Assets well maintained and useful over their predicted life

Faster response times for maintenance requests (e.g. vandalism repairs, pothole patching, and drainage clearing)

More frequent services for mowing, litter removal, street sweeping, and toilet cleaning

Strategic Direction: A City responsive to the wellbeing needs of its residents

Strategic Objective: Ensure all residents have equal opportunity to participate in the economic and social life of the community

DRAINAGE

Funding available to replace drainage that fails

Failed drainage is replaced when needed

Minimised blockages and flooding

Strategic Direction: A well-serviced and equitable City

Strategic Objective: Maintain and develop a sustainable road and drainage network and facilitate continual improvement of the City's transport network

ROADWORKS

An additional $42m over 7 years for reconstruction and resurfacing

Road condition improved from the ‘good’ (6.5 out of 10) to ‘very good’ range (7.0 to 8.5 out of 10) in 10 years



ENVIRONMENT and SUSTAINABILITY

Sustainability Levy becomes part of rate base after 2014

Continuation of projects to improve the natural environment such as bushland rehabilitation projects, lake water quality programs and foreshore rehabilitation projects

Strategic Direction: A City responsive to its environment. A City that makes an equitable contribution to global sustainability

Strategic Objective: Provide integrated environmental management, strategic planning and waste management to enhance and sustain the natural, social, cultural, and built environment and contribute to an equitable regional and global ecological footprint

LIBRARIES and CULTURAL ACTIVITIES

$7.4m over 7 years

Improve library service delivery including two replacement libraries

Art Gallery extension


Strategic Objective: Provide a balanced range of well-maintained and accessible recreation, community, education, sporting, arts and cultural facilities across the City



POOLS

$20.4m over 7 years

Upgrade pools including the redevelopment of Charlestown Pool and water play zone at Speers Point



PARKS and PLAYGROUNDS

$800,000 over 7 years

$750,000 for new play equipment at Toronto foreshore project

Improve park furniture across the City

Implement Toronto foreshore precinct project including new play equipment



FOOTWAYS and CYCLEWAYS

$3.5m over 7 years

Improve footpath and cycleway transportation network



COUNCIL STAFF

Increase in Ranger staff

Increased staff to provide more patrols, improved response times, improved public health, and environmental monitoring and enforcement

Strategic Direction: Address community concerns in relation to level of ranger activities

Strategic Objective: Negotiate a wider spread of operational hours for ranger patrols

TOWN CENTRE UPGRADES

$7m over 7 years

Upgrade town centres

Improved streetscape

Strategic Direction: A well designed adaptable and liveable City. A City of progress and prosperity.

Strategic Objective: The City's economy prospers, with managed growth that enhances the quality of life, while balancing employment and environmental aims

NEW YOUTH and ABORIGINAL PROGRAMS

New programs in partnership with relevant organisations

Develop Youth and Aboriginal programs, improving social outcomes for the community


Strategic Objective: Advocate for and develop opportunities that will ensure all residents have equal opportunity to participate in the economic and social life of the community



IMPROVED COMMUNITY FACILITIES

$4.9m over 7 years

Improve existing community facilities across the City through renovations, extensions and construction works



FINANCIAL MANAGEMENT

• New capital expenditure of $326m over 7 years

• Replacement capital expenditure of $344m over 7 years

Address maintenance and infrastructure backlog

Budget surplus in 2018/19

Additional capital expenditure for new work and replacement projects

Strategic Direction: City Leadership which is open, ethical and listens and responds to the needs of its community

Strategic Objective: Provide open and ethical leadership and work with the community to provide services and facilities to satisfy their needs, while providing a sustainable future for the City and the region

2.6 Expiring variation – Sustainability Levy

The local environment consistently rates as one of the most important features of the LGA for

residents. Access to the lake, coastline, and bushland provides people with an opportunity to

enhance health and wellbeing through outdoor activity and enjoyment of our wildlife and natural

places.

During development of the Community Plan in 2008, community feedback ranked Caring for the

Environment as the most important of Council’s key focus areas. The need for additional funds to

deliver environmental programs was identified, as the previous Lake Levy that had been in place

for 10 years was due to expire.

Council sought and was granted a special variation, which has come to be known as the

Sustainability Levy. It was introduced in 2009 to fund environmental projects, including

continuation of lake water quality improvement works, and is due to expire in 2014.

More recent consultation confirms that environment and sustainability programs, particularly

projects to improve the Lake continue to be a high priority.

Accordingly, Council intends to continue its Caring for the Environment programs. The proposed

rate variation will provide a total continuation beyond 2014 of programs currently delivered under

the expiring variation.

The proposed percentage increase in rate income in 2014/15 that relates to extension of the

expiring variation is 2.59%, which equates to an average of $29.05 per rate assessment across

all categories.

As explained in detail in Section 4, the impact of this expiring special variation, and Council’s

intention to extend funding for Caring for the Environment programs as part of the general rate

base was clearly communicated to the community as part of Securing our Future.


The continuation of these programs over the next seven years will include:

� maintaining and improving lake water quality and environmental rehabilitation works

� reducing energy and water consumption

� reducing pollution and preparing for natural disasters and climate change

� working with our community to improve our environmental practice

Further detail of these programs is provided in Section 3.

The continuation of funding for environmental works also enables Council to continue to deliver

direct cost savings measures, which to 30 June 2011 have contributed to an overall saving to the

community of $6.1m, as reported in Council’s State of the Environment Report 2010-2011,

provided as Supporting Document 2.2.

It is anticipated that continuation of these environmental programs for a further seven years would

contribute to direct savings to our community of $16.1m in addition to the indirect savings from

improvements in environmental function and amenity.


2.7 Supplementary material

Table 2.5 - Three funding options overview

OPTION 1 OPTION 2 OPTION 3

KEY FEATURES

� Services significantly reduced

� Condition of our assets declines

� Rates increase only by rate peg amount set annually by IPART

� Average residential rates increase 3% pa

� Average business rates increase 3% pa

� Services largely maintained

� Condition of our assets maintained at current rates of decline initially, then will hold

� Average residential rates increase 7.7% pa

� Average business rates increase 9.9% pa

� Services improved

� Delivers on 10 Year Community Plan

� Condition of our assets improves

� Program of infrastructure renewal

� Average residential rates increase 9.8% pa

� Average business rates increase 12.8% pa

INFRASTRUCTURE MAINTENANCE

A reduction of $20.8M over 7 years for maintenance of City infrastructure

Increased by $6M over 7 years to maintain maintenance standards and response times

Increased by $15M over 7 years to ensure Council assets are well maintained and useful over their predicted life

BOAT RAMPS & JETTIES

No new boat ramps or jetties constructed, saving $2.3M over 7 years

Current levels maintained Current levels maintained

DRAINAGE

$3.9M reduction over 7 years for replacement of failed drainage infrastructure and construction of flood mitigation measures

Current funding levels maintained, enabling approximately 30% of drainage infrastructure that fails to be replaced


ROADWORKS

$20.4M reduction over 7 years for sealing gravel roads, new kerb and gutter, resealing and reconstruction of paved roads

Average road condition falls from ‘good’ to ‘fair’ within 10 years

An additional $16M over 7 years for reconstructing and resurfacing roads

Average road condition continues to decline for the next few years but then remains in the ‘good’ range

An additional $42M over 7 years for reconstruction and resurfacing

Road condition increases to ‘very good’ range in 10 years

ENVIRONMENT & SUSTAINABILITY

Reduced maintenance program for natural vegetated areas including foreshore reserves and bushfire protection.

From 2014/15 reduced environmental works including lake water quality programs and foreshore rehabilitation projects, saving $14.4M over 7 years

Sustainability Levy becomes part of rate base

Continuing projects include bushland rehabilitation projects, lake water quality programs, foreshore rehabilitation projects


Continuing projects include bushland rehabilitation projects, lake water quality programs, foreshore rehabilitation projects

LIBRARIES & CULTURAL ACTIVITIES

Reduced opening hours for all libraries. 2 library closures in 2013, saving $713,000, and 3 further libraries close in 2014, saving $750,000

Total saving over 7 years of $8.6M

Maintain budget at current level, which will result in a gradual reduction in stock and service points

$7.4M over 7 years to implement the Library Service Delivery Model including new libraries at Morisset and Glendale



OPTION 1 OPTION 2 OPTION 3

POOLS

1 pool will close in 2012, saving $3M over 7 years, and 1 pool will be put under contract management, saving $3.9M over 7 years

In 2013 a further pool will close, saving $2.4M over 6 years

Upgraded CPR and other equipment

Pools not upgraded

$20.4M over 7 years to upgrade pools

Redevelopment of Charlestown Pool and water play zone at Speers Point

PARKS & PLAYGROUNDS

Reduction of $536K over 7 years

Funding and level of service maintained

$0.8M over 7 years to improve park furniture across City

New play equipment at Toronto foreshore at $750K

FOOTWAYS & CYCLEWAYS

$4M reduction over 7 years for construction of new footpaths, cycleways, and traffic facilities

Current levels maintained $3.5M over 7 years for construction of new footpaths and cycleways

COUNCIL STAFF

Reduction of 123 Council staff across all areas, saving $42.6M over 7 years

The Economic Development Department would be disbanded

Increase in Ranger staff - increased patrols, improved response times, improved public health, and environmental monitoring and enforcement

Increase in Ranger staff - increased patrols, improved response times, improved public health, and environmental monitoring and enforcement

DEVELOPMENT APPROVALS

Longer turnaround times for DAs, reduced number of planning studies, master plans, and area plans, saving $0.4M per year


TOURISM

Changes to tourism funding including closure of the Visitor Information Centre at Swansea, saving $3.8M over 7 years


TOWN CENTRE UPGRADES

Funding not included Funding not included $7M over 7 years to implement a program to upgrade town centres

NEW YOUTH AND ABORIGINAL PROGRAMS

Funding not included Funding not included New programs in partnership with relevant organisations

IMPROVED COMMUNITY FACILITIES

Funding not included Funding not included $4.9M over 7 years for renovations, extensions, and construction works across the City

FINANCIAL

� Maintenance and infrastructure backlog significantly increases

� Operating deficit continues with estimate of $8.5M in 2018/19

� New capital expenditure of $240M over 7 years

� Replacement capital expenditure of $268M over 7 years

� Maintenance and infrastructure backlog will be partially addressed

� Operating deficit until 2016/17 then expected surplus of up to $5M in 2018/19



� Maintenance and infrastructure backlog addressed

� Operating deficit until 2016/17 then expected surplus of up to $7M in 2018/19




Table 2.6 - Performance against rate variation criteria

Criterion Performance of Rate Variation Application

Criterion 1. Demonstrated need for the rate increases derived from council’s completed IP&RF, highlighting one or more of the following:

• service provision requirements (e.g. unmet demand for services, new demand for services, or community support for enhanced service standards);

• infrastructure backlogs that have adverse implications for the amenity, safety and health of the community; and

• a special or unique cost pressure faced by the council.

Lake Macquarie City Council’s SRV application is being made to secure long-term funding that will maintain and improve services deemed necessary by the community through the Securing our Future community engagement program, and extensive consultation undertaken in accordance with Council’s IP&R framework.

The proposed budget and delivery program reflect Council’s strategic planning base with regard to asset management and council’s social planning.

Council’s need to address its $67m infrastructure backlog to ensure that the LGA’s significant $2 billion infrastructure base is better maintained and able to be replaced and upgraded in accordance with Asset Management Plans (AMPs) is addressed in detail.

Council addresses the need to secure long-term financial sustainability and clearly outlines projected budget deficits and the return to a surplus by 2017/18.

Council has an expiring Sustainability levy and the need for additional funds to deliver environmental programs is identified as both a community priority and the continuing need to improve environmental function and amenity.

Criterion 2. Demonstrated community support for the special variation. (The criterion of “adequate community consultation” applies to any component of a special variation to fund “essential works” infrastructure costs in contributions plans).

Council undertook a high level of community engagement aimed at identifying the right solution for rates and services. The focus of consultation was on which services the community want, and are willing to pay for.

A statistically valid telephone survey regarding community support for various rates and services options was undertaken along with an online survey, a postal ballot and polling at community workshops.

Council demonstrates that there is 50% community support for an average rate increase of 9.8% or higher (including an estimated 3% rate cap).

Council also demonstrates that there is 72% community support for an average rate increase of 7.7% or higher (including the rate cap).

Council can confidently assume that the rate rise proposed will be acceptable to the community based upon community support, information contained in the SEIFA index, as well as ABS data and survey results regarding the community’s capacity and willingness to pay.

Criterion 3. Reasonable impact on ratepayers

Capacity of the community and business to afford the proposed increases is demonstrated through:

• the community consultation results

• using indicators such as the SEIFA Index and assessing the socio economic profile of the LGA


Criterion Performance of Rate Variation Application

• an analysis showing that rates are currently low in Lake Macquarie compared with similar (Group 5) councils

Council has demonstrated that not raising rates would ultimately result in cost increases for essential works and services into the future, affecting intergenerational equity.

An amended Payment Assistance Policy recognises the need to address any genuine financial hardship experienced by rate payers.

Criterion 4. Sustainable financing strategy consistent with the principles of intergenerational equity.

Lake Macquarie’s Long Term Financial Plan includes a detailed analysis of various funding strategies designed to reduce the burden on ratepayers and spread it more fairly between generations. Council’s new capital financing strategy and adopted, target debt service ratio are also consistent with this principle.

Criterion 5. An explanation of the productivity improvements and cost containment strategies the council has realised in past years, and plans to realise over the period of the proposed special variation.

Council demonstrates steps undertaken to address immediate and long term financial sustainability. Council has identified more than $4.2m in ongoing savings achieved through cost reductions, efficiency gains and increased income.

Future productivity improvements and commitments are articulated, consistent with the 15 December 2011 Council resolution to continue the implementation of ongoing reviews of service delivery efficiency.

Criterion 6. Implementation of the Integrated Planning and Reporting Framework (IP&RF)

Lake Macquarie City Council is a Group 1 council for the purpose of implementing the new IP&RF. Council’s Community Strategic Plan, Resourcing Strategy, Delivery Program and Operational Plan have been endorsed by the elected Council and were submitted to the DLG by the deadline for Group 1 Councils of 30 June 2010.

Council’s IP&RF documents are complemented by a suite of plans including Council’s LTFP, Asset Management Plans, Environmental Sustainability Action Plan, Lifestyle 2020/Draft Lifestyle 2030, and many social infrastructure plans developed to guide essential works and services.


3 Need for the variation

In this section, Lake Macquarie City Council presents a case for the proposed revenue increases

by showing why the special variation is needed. This is based on council’s strategic, asset

management and long term financial planning.

Council’s completed Integrated Planning and Reporting Framework has brought to light major

gaps in our financial capacity to address the service needs and aspirations of our growing

community over the next seven years.

The framework foreshadows that without a stable and substantial increase to income, Council will

not be able to maintain our assets and deliver the services and infrastructure our community has

told us they expect, and that analysis shows we will need into the future.

The proposed variation is derived from Council’s Integrated Planning and Reporting Framework

and addresses the needs below, as explained in the following section.

The key purposes of the variation are indicated by an X marked in the appropriate box.

Infrastructure maintenance / renewal

New infrastructure investment

Environmental works

Maintain existing services

Enhance financial sustainability

Other (urban growth)

Need for infrastructure maintenance / renewal

Maintenance and renewal of the City's infrastructure is a critical issue, as Council has an

extensive asset base, valued at over $2 billion. Most of this infrastructure delivers essential

services for the community, including roads, bridges, car parks, footpaths, cycleways, traffic

facilities, drainage, buildings, parks, sports facilities, cemeteries, access to waterways, and

natural vegetated areas.

Many of our assets were built during rapid development of the LGA during the 1950s, 60s and

70s, and will require replacement in the near future. Council's Asset Management Plans (AMPs)

identify that current levels of maintenance and renewal are inadequate for ensuring that these

assets achieve their predicted useful life and provide the required levels of service. This situation

will worsen without additional funding to this area. The current estimated cost to bring our

infrastructure up to a satisfactory standard is $67m. The proposed variation will begin to address

this infrastructure backlog.


Without adequate planned maintenance, infrastructure failures increase and Council experiences

a corresponding increase in community requests for maintenance. Council currently receives

approximately 12,000 maintenance requests each year. In 2009/10, 9% of the maintenance

service requests received were not actioned that year. This grew to 11% in 2010/11 and is

projected to reach approximately 20% by 2018/19. Under our current baseline funding scenario

the total number of maintenance requests will reach approximately 15,400 by 2018/19, with 5,800

maintenance requests not able to be completed. Examples include requests for footpath repairs,

road patching, weed removal and plumbing repairs.

Inadequate maintenance is reflected in the overall appearance and utility of the City. Poorly

maintained roads, kerb and gutter, and drainage structures are inconsistent with the strategic

direction articulated in the Community Strategic Plan for a 'well-serviced and equitable City'.

Infrastructure failures for key assets can have catastrophic consequences. Drainage failures can

have severe impacts on local communities. Failure to maintain roads and bridges can have even

more dramatic consequences. Public safety hazards and the cost of public liability claims are

likely to increase.

Need for new infrastructure investment

The initiatives under the proposed variation have been developed to help accommodate growth

and are aligned to Council’s draft Lifestyle 2030 Strategy. Lifestyle 2020 is Lake Macquarie’s

adopted land use strategy identifying urban structure, movement systems and ‘green’ systems

for the City. It has recently been reviewed to incorporate current NSW Government policy

directions, such as the Lower Hunter Regional Strategy. The result of the review is draft Lifestyle

2030, which is expected to be adopted by Council in 2012.

The need for new infrastructure is also identified through the Community Strategic Plan and

further defined through Council’s suite of social infrastructure plans. These plans have been

developed through an ‘involved’ level of community consultation and provide the detail about how

our pools, libraries, sports and community facilities will be designed and delivered to efficiently

provide maximum benefit to our residents.

The proposed variation will fund a program of infrastructure construction and renewal that

includes:

� Increase in program of resurfacing and reconstructing roads by $42m over 7 years

� Redevelopment of Charlestown Pool and construction of a water play zone at Speers Point in

accordance with Council’s Pool Service Delivery Model

� New libraries at Morisset and Glendale in accordance with the Library Service Delivery Model

� Upgrades to community facilities across the City in accordance with the Community Facilities

Strategy and Public Toilet Facilities Strategy

� Extension of Lake Macquarie Art Gallery in accordance with the Art Gallery Precinct

Masterplan

� Construction of new footpaths and cycleways in accordance with the strategic direction in

Council’s Community Strategic Plan to ‘maintain and develop a sustainable road and drainage

network and facilitate continual improvement of the City's transport network’ and will be guided

by the Cycling Strategy (currently in draft form).


New capital works programs will be undertaken following Council's initial actions to address its

financial sustainability. Council recognises that immediate funding is required to meet

community’s expectations with regard to the maintenance and renewal of many City assets.

Council will begin to address its infrastructure backlog in accordance with the enhancement of

some services.

Need for environmental works

During development of the Community Strategic Plan, community feedback ranked Caring for the

Environment as the most important of Council’s key focus areas. The high value that our

community places on environmental programs and services has been confirmed repeatedly

through statistically validated community attitude and satisfaction surveys.

The most recent survey, a phone survey of 600 residents conducted by Micromex Research in

December 2011, indicated that 79% of respondents are concerned about environmental and

sustainability issues affecting the Lake. Additionally, 85% of respondents believe that the quality

of the environment in the City has been maintained or improved over the last five years.

Council’s Environmental Sustainability Action Plan 2011-18 (ESAP) provides a framework for

sustainability planning, decision-making and action, to achieve improved environmental

sustainability for the City. The plan contains actions to be achieved over the period 2011 to 2018,

and is consistent with the Community Strategic Plan.

Without the special variation, many of the targets set out in the ESAP cannot be met. Existing

services will be reduced across the seven years, including reductions to the maintenance

program for natural vegetated areas, including foreshore reserves and bushfire protection.

Without the special variation, expiration of the Levy in 2014/15 will result in further reductions to

environmental works, including lake water quality programs and foreshore rehabilitation projects.

The proposed rate variation will provide continuing income to deliver Council’s current

environmental programs beyond 2014, and the expiring variation will become part of the general

rate base beyond 2014/15.

Need to maintain existing services

Community consultation undertaken in developing the Community Strategic Plan, through the

Levels of Service (LoS) Review Process survey and more recently, as part of Securing our Future

has demonstrated that our community values existing services.

The budget scenarios discussed in this application model the impacts on services if no rate rise is

granted. Council’s Option 1 reflects the impacts on existing services if no special rate variation is

granted. If Council is to provide a sustainable resourcing strategy under Option 1, it will

necessitate deep and significant cuts to services, and many of the outcomes identified in the

Community Strategic Plan will not be delivered. Reductions will be required across all Council

services with a corresponding reduction of 123 Council staff. Council’s environmental programs

and works will be particularly affected.

More important is the recent confirmation, through consultation and the LoS Review Process, that

Option 1 is not the community’s preferred option.


Need to enhance financial sustainability

Council’s Long Term Financial Plan and Asset Management Strategy indicate the need to take

action now to avoid continuing operating deficits and the prospect of a decaying infrastructure

base, and analysis confirms that the most appropriate way to address this is through the

proposed rate increase.

The proposed variation will deliver financial sustainability, overcoming Council’s projected $167m

operating deficit and delivering a surplus by 2017/18. The proposed increases will enable Council

to manage its substantial and ageing asset base and remove the current infrastructure backlog

over a manageable timeframe.

The financial year 2011/12 is the last year Council can deliver a balanced budget within current

service levels.

Before seeking any increase to rates, Council has comprehensively reviewed all of its services

and actively worked to identify and implement savings, efficiencies and new income streams, as

discussed in Section 7. Although productivity improvements have provided $4.2m in savings, the

gap between what can be delivered within the existing budget and the community’s expectations

and future needs remains substantial.

The cost of council services has been increasing at a greater rate than income and inflation as

measured by the Consumer Price Index (CPI), and this trend is expected to continue. Cost

increases relate to Federal and State Government expectations, changing community

expectations, a growing population, and increases in the cost of doing business, such as global

economic impacts including fuel and energy price rises. These impacts are discussed further in

Section 3.3.

Need based on urban growth

In 2011, it is estimated that there are more than 201,000 people living in Lake Macquarie, based

on the most recent Australian Bureau of Statistics estimate of 200,849 in 2010.

The Lower Hunter Regional Strategy projects a population increase of 60,000 new residents

between 2006 and 2031. Based on these projections, Council estimates that the population of the

LGA will increase by 40,000 residents between 2010 and 2031.

The Lower Hunter Regional Strategy (LHRS) represents an agreed NSW Government position on

the future of the Lower Hunter. Its primary purpose is to ensure that adequate land is available

and appropriately located to accommodate projected housing and employment needs for the

Region over the next 25 years. It requires councils to review and adjust local planning

instruments and land use policies to remove barriers that may exist to allowing or accommodating

the population and job projections outlined in the Strategy.

Since the 1970s, the LGA has evolved into a more urbanised environment with three regional

centres and seven district town centres, and a wide range of services normally provided in a city.


In the past 35 years approximately 35,000 new dwellings have been constructed in the LGA, and

the LHRS projections suggest that between 2006 and 2031, approximately 36,000 new dwellings

will be required to house our growing population.

Despite policies and planning strategies to accommodate increased population through increased

housing density in and near the centres, major road corridors and railway stations, most new

dwelling construction in the LGA in the past decades has been in the form of detached dwellings

in new subdivisions on the urban fringe, with resultant impacts for the provision of assets. As an

illustration:

� In 1979 the length of roads in the Municipality was 1,168km. In 2011, the length of road in the

City was 1,459km. Therefore the growth in road distance is 291km over 32 years, or 9km/year.

This new road length has been accompanied by other new assets, such as street lighting,

footpaths and street drainage systems.

� The number of stormwater quality improvement devices (SQIDS) has increased rapidly over

this time, to a total of 530 devices. Some of these have been retrofitted into older urban

areas, developed prior to 1976, but most are located in subdivisions developed since 1977.

� The new population has also required new community facilities, such as halls and childcare

centres, improvements to libraries, and new open space and recreation areas.

Using the current standards of provision for open space and community facilities, and the

average length of road construction figures above, as well as LHRS population growth projections

for the LGA, Council estimates that by 2031 it will acquire (at a minimum) the following additional

assets for maintenance:

� 198km of road

� 198 km of piped stormwater drains and 440 new SQIDS

� 110 new neighbourhood parks

� 5 new skate parks

� 20 new playing fields

� 2 new multipurpose neighbourhood centres

� Augmentation of current library and swimming pool facilities

� Improvement to boat ramps and boating facilities

� Collection and disposal for 30–40,000 new waste and recycling services

In addition, new industrial and commercial development will result in Council acquiring additional

road and transportation infrastructure to that listed above.

The proposed variation will enable Council to address these urban growth needs.

Responding to these needs

Council has undertaken extensive consultation through Securing our Future to understand the

community’s priorities and find the right balance between the levels of service our residents want

and need, and the amount of rates they are willing and can afford to pay.


The matters set out above were considered by the community in assessing the levels of service

that they wanted.

Council is submitting this application for a special variation to rates to allow us to work with our

community to address these needs.

3.1 Variations for capital expenditure

Does the purpose of the proposed special variation require that

a capital expenditure review be undertaken by the council in

accordance with Council Circular 10-34?

Yes No

If Yes, has a review by the council been undertaken? Yes No

If Yes, has the council submitted this to DLG Yes No

3.2 Strategic planning information

In this section, we have provided commentary on how the need for the special variation is

reflected in the council’s strategic planning outcomes (Community Strategic Plan and Delivery

Program). We have referenced relevant planning documents and explained the likely benefits of

the project, works or other activities that council is proposing to undertake with the additional

special variation funds.

Compliance with integrated planning and reporting requirements

Lake Macquarie City Council is a Group One council for the purpose of implementing the

Integrated Planning and Reporting Framework (IP&RF), and submitted its Community Strategic

Plan, Delivery Program and Operational Plan, and its Resourcing Strategy to the Division of Local

Government (DLG) by the deadline for Group One councils of 30 June 2010.

Feedback received from the DLG in December 2010 indicated clear linkages between the

Community Strategic Plan, the Delivery Program and the Operational Plan. Areas for

improvement included an increased focus on outcome rather than outputs, particularly at the

Community Plan level, and Council will address this in the development of its next Community

Strategic Plan for the period 2013-2023. The DLG commended the quality of Council’s

Resourcing Strategy, particularly the well developed Asset Management Plans. It was suggested,

however, that the Long Term Financial Plan would benefit from additional sensitivity analysis. The

DLG feedback has been considered and incorporated in our amended plan (Supporting

Document 3.1).

Council’s strategic planning framework

In addition to the compliance documents required under the IP&RF, Council’s strategic planning

framework is extended and supported by a broader body of planning work undertaken by Council,

including the Draft Lifestyle 2030 Strategy (LS2030) and the Environmental Sustainability Action

Plan 2011-18 (ESAP), as well as a comprehensive suite of plans and strategies for Lake

Macquarie’s social infrastructure. These documents and the related projects, works and other


activities that council is proposing to undertake with the additional special variation funds are

discussed below.

Figure 3.1 - Lake Macquarie City Council integrated planning and reporting framework

3.2.1 Community Strategic Plan, Delivery Program and Operational Plan

Council’s special rate variation proposal has been developed based on the outcomes of extensive

engagement with the Lake Macquarie community on their long-term vision for the City, as

captured in the Community Strategic Plan 2008-2018. (Supporting Document 3.2 – Lake

Macquarie Community Plan 2008-2018).

The key priorities, strategies and performance outcomes in the Plan have been used to determine

the priorities for Lake Macquarie and the services and projects that Council will deliver as part of

the 2009-2013 Delivery Program (Supporting Document 3.3 – Draft Revised Delivery Program

2009-2013).

Since 30 June 2010, the Delivery Program has been reviewed for the financial year 2011/12 and

was again reviewed and placed on public exhibition for the 2012/13 financial year from 22

October to 20 November 2011.

Council’s IP&RF documents (Supporting Documents 3.4 to 3.6) are guided by a number of

principles, including the Social Justice principles and the Council Charter as prescribed in section

8 of the Local Government Act 1993. These principles are reflected in the Community Strategic

Plan in the key priority areas of:

� Caring for Our Environment

� Caring for Our Community

� Sport, Recreation and Culture

� Roads, Transport and Drainage

� Urban and Economic Development


� Governance and Civic Leadership

The Delivery Program provides more detail than the Community Strategic Plan and is similarly

broken down into the key priority areas. The 2009-2013 Delivery Program incorporating our

Operational Plan identifies the actions Council intends to implement in achievement of each Key

Priority and Strategic Direction during the current term of Council.

The Draft Operational Plan 2012-2013 (Supporting Document 3.3 Draft Operational Plan 2012-

2013) was developed after the initial consultation with the community on values and levels of

service undertaken during Stage 1 of Securing our Future. Using the results of Stage 1, Council

developed three options for the draft Operational Plan based on the three funding options under

Securing our Future. The plan was placed on public exhibition concurrently with Stage 3 of

Securing our Future, and in this manner, the community was able to understand the impacts of

the three funding options on service delivery.

Table 3.1 illustrates how a special rate variation under Option 3 will deliver benefits to the

community in accordance with the Community Strategic Plan and Delivery Plan.


Table 3.1 - Overview of benefits and how they link to Community Plan and Delivery Plan

Option 3 Link to Community Strategic Plan Link to Delivery Plan (DP) Likely Benefits

INF

RA

ST

RU

CT

UR

E

MA

INT

EN

AN

CE

Increased by $15m over 7 years



DP Priority: Community facilities management

DP Strategy: Ensuring Council, community, recreational and cultural facilities, including cemeteries, are well used and managed efficiently and equitably

Ensures Council assets are well maintained and useful over their predicted life

The community will benefit from faster response times for maintenance requests including vandalism repairs, pothole patching, and drainage clearing. Regular services such as litter removal, street sweeping, and toilet cleaning will be conducted more frequently

DR

AIN

AG

E




DP Priority: Provide and maintain drainage infrastructure

DP Strategies:

Implement and review works program for urban flooding and urban erosion Maintain drainage network

Failed drainage is replaced when needed as identified in the asset management plan to minimise risk of blockages and flooding

RO

AD

WO

RK

S

An additional $42m over 7 years for reconstruction and resurfacing



DP Priority: Provide and maintain road infrastructure

DP Strategy: Provide and maintain road infrastructure

Implement and review works program for kerb and gutter, seal gravel roads, pavements and road side environment

Average road condition returns to ‘very good’ range (7.0 to 8.5 out of 10) in 10 years.

Note that in recent years, the average condition index for local roads has declined from 7.0 to 6.5 out of 10, as a backlog of reconstruction and resurfacing projects has built up, due to funding constraints



EN

VIR

ON

ME

NT

an

d

SU

ST

AIN

AB

ILIT

Y


Strategic Direction: A City responsive to its environment. A City that makes an equitable contribution to global sustainability.

Strategic Objective: Provide integrated environmental management, strategic planning, and waste management to enhance and sustain the natural, social, cultural, and built environment and contribute to an equitable regional and global ecological footprint

DP Priorities:

Sustainable Living - reducing resource consumption and waste generation

Ecosystem Enhancement - protecting and enhancing our natural environment

Environmental Risk - monitoring and reporting our environmental performance

Environmental Security - reducing pollution and preparing for natural disasters and climate change

Sustainability Engagement - working with our community to improve our environmental practice

Projects improving the natural environment are continued including bushland rehabilitation projects, lake water quality programs and foreshore rehabilitation projects

LIB

RA

RIE

S a

nd

C

UL

TU

RA

L

AC

TIV

ITIE

S

$7.4m over 7 years Strategic Direction: A City responsive to the wellbeing needs of its residents

Strategic Objective: Provide a balanced range of well-maintained and accessible recreation, community, education, sporting, arts, and cultural facilities across the City

DP Priority: Provide adaptive library services to meet community needs

DP Strategy: Implement the recommendations of the Library Service Delivery Model

Implementation of the Library Service Delivery Model including two replacement libraries


PO

OL

S



DP Priority: Provision of community based swimming centres

DP Strategy: Improve Council pool facilities that will allow us to offer a range of recreational activities and programs

Pools are upgraded including the redevelopment of Charlestown Pool and water play zone at Speers Point



PA

RK

S &

P

LA

YG

RO

UN

DS

$0.8m over 7 years

New play equipment at Toronto foreshore project at $750K



DP Priority: Recreation and Community Land Planning

DP Strategy: Plan and develop playgrounds, parklands, and cycle/shared pathways to improve linkages throughout the City.

Park furniture is improved across the City and the Toronto foreshore precinct project is implemented including new play equipment.

FO

OT

WA

YS

an

d

CY

CL

EW

AY

S

$3.5m over 7 years Strategic Direction: A well-serviced and equitable City


DP Priority: Improve the transportation network across the City

DP Strategy: Improve, monitor and promote the use of Council's transport network that includes footpaths, cycleways, traffic facilities and public transport infrastructure

Improvement of the footpath and cycleway transportation network.

CO

UN

CIL

ST

AF

F

Increase in Ranger staff Strategic Direction: Address community concerns in relation to level of ranger activities

Strategic Objective: Negotiate a wider spread of operational hours for ranger patrols

DP Priority: Respond to community concerns regarding ranger and public health issues

DP Strategies:

Educate operators in proper practices associated with their activities

Review resourcing requirements each year based on trends and the nature of customer requests

Increased staff will lead to increased patrols, improved response times, improved public health, and environmental monitoring and enforcement

TO

WN

CE

NT

RE

U

PG

RA

DE

S

$7m over 7 years Strategic Direction: A well designed adaptable and liveable City. A City of progress and prosperity.

Strategic Objective: The City's economy prospers, with managed growth that enhances the quality of life, while balancing employment and environmental aims

DP Priority: Develop sustainable and socially responsible economic growth within the City

DP Strategies: Deliver Town Centre Program

Develop Streetscape Masterplans to direct town upgrades

The additional funds will be used to implement a program to upgrade the nine town centres to improve access, functionality and increase opportunities for increased economic activity through the provision of modern attractive places to work, interact and do business.


Option 3 Link to Community Strategic Plan Link to Delivery Plan (DP) Likely Benefits N

EW

YO

UT

H a

nd

A

BO

RIG

INA

L

PR

OG

RA

MS

New programs in partnership with relevant organisations


Strategic Objective: Advocate for, and develop opportunities that will ensure all residents have equal opportunity to participate in the economic and social life of the community

DP Priority: Social and Cultural Planning

DP Strategy: Review as required, and implement key priorities and actions from Council's Crime Prevention, Youth Community, Ageing Population, Aboriginal Community, Children's, Cultural and Disability Action Plans

Additional funding will support the development of Youth and Aboriginal programs thereby improving social outcomes for the community

IMP

RO

VE

D

CO

MM

UN

ITY

F

AC

ILIT

IES


Strategic Objective: Advocate for, and develop opportunities that will ensure all residents have equal opportunity to participate in the economic and social life of the community

DP Priority: Community Facilities Management

DP Strategy: Review community facilities to ensure they match the community's needs

Additional funding with be used for renovations, extensions, and construction works across the City to improve existing community facilities

FIN

AN

CIA

L M

AN

AG

EM

EN

T

• Maintenance and infrastructure backlog addressed

• Operating deficit until 2016/17 then expected surplus of up to $7m in 2018/19

• New capital expenditure of $326m over 7 years

• Replacement capital expenditure of $344m over 7 years

Strategic Direction: City Leadership which is open, ethical and listens and responds to the needs of its community

Strategic Objective: Provide open and ethical leadership and work with the community to provide services and facilities to satisfy their needs, whilst providing a sustainable future for the City and the region

DP Priority: Long-term financial planning and modelling (Financial Sustainability)

DP Strategy: Ensure Council finances are strategically planned and managed to ensure Council's long-term future

As per the first column, Lake Macquarie City Council’s maintenance and infrastructure backlog is addressed, we will have an operating deficit until 2016/17 then an expected surplus 2018/19

In addition, there will be new capital expenditure and replacement capital expenditure


3.2.2 Draft Lifestyle 2030

Draft Lifestyle 2030 (LS2030) is a key part of Council’s strategic planning framework.

Lifestyle 2030 provides the long-term direction for strategic land use and land management

planning in the Lake Macquarie local government area. Its strategic directions on land use inform

both the Community Strategic Plan and the citywide Local Environmental Plan.

The preparation of Draft Lifestyle 2030 followed a review of the performance of its predecessor,

Lifestyle 2020 (LS2020). The review included:

� a demographic analysis of the City over the past 10 years

� a review of the supply of residential and employment lands in the City

� a review of the status of the City’s biodiversity

Draft Lifestyle 2030 incorporates four significant state policy changes made since the adoption of

LS2020. These are:

� The Lower Hunter Regional Strategy (LHRS) – released by the NSW Government in 2006, to

guide the growth of the Lower Hunter for the next 25 years. The strategy sets targets for

residential development and identifies growth centres within the Lower Hunter, including Lake

Macquarie.

� The Lower Hunter Regional Conservation Plan – released by the Department of Environment

Conservation and Climate Change in 2009 to guide conservation within the Lower Hunter.

� The State Plan – released by the NSW Government in 2006, this plan sets priorities to

improve services and infrastructure.

� The Newcastle – Lake Macquarie Western Corridor Planning Strategy – released by the NSW

Government in 2010 to provide a strategic land use framework for future urban expansion in

the western corridor area and to identify future residential and employment lands.

Draft Lifestyle 2030 reaffirms the core values of sustainability, equity, efficiency, and liveability set

out in LS2020. These will continue to guide future development in the City.

A primary aim of LS2030 is to promote urban development that creates mixed-use town centres

that provide for the day to day needs of nearby residents, are enjoyable places to visit, including

outside core office business hours, and serve as hubs in an enhanced public transport system.

Draft Lifestyle 2030 also seeks to provide greater housing choice to meet the needs of changing

demographics and lifestyles, reduce motor vehicle dependency, achieve more local employment,

protect significant ecological areas, and achieve more environmentally sustainable urban

development.

The LHRS identifies new housing and increased population targets for each LGA for the period

2006 to 2031. The targets for the Lake Macquarie LGA are the largest for the Region and

include:

� 15,000 new dwellings in urban fringe areas.


� 7,000 new dwellings in infill areas. These are essentially the subdivision of small farmlets and

remnant bushland within existing urban areas. Infill development will require the construction

of roads, footpaths and drainage systems.

� 14,000 new dwellings through increasing density from redevelopment of existing urban sites

along corridors and near railways stations.

Under the former Part 3A planning legislation, and identification of new urban areas in the LHRS,

the State Government has approved, or is on the verge of approving more than 4,000 new lots in

the LGA in subdivisions on the urban fringe.

A case study of the Morisset Contribution Catchment has been provided in the Supplementary

Material at the end of this section to demonstrate the impact of growth forecasts on urban

development.

Many important components of the strategy will be addressed through the proposed variation as

demonstrated in this application, in particular with regard for the need arising from urban growth.

3.2.3 Environmental Sustainability Action Plan (ESAP) and the expiring special variation

Council’s environmental sustainability framework is articulated in the City of Lake Macquarie

Environmental Sustainability Action Plan 2011-2018 (Supporting Document 3.4).

This Plan identifies Council’s vision and strategic direction for the City in relation to the following

priority areas: energy; waste; water; transport; resource consumption; natural environment; land;

climate change adaptation; natural disasters and environmental health.

The Plan documents a range of targets for these priority areas, as well as key performance

indicators to track our achievements.

The proposed rate variation will provide additional income to continue Council’s current

environmental programs beyond 2014, and the expiring variation will become part of the general

rate base beyond 2014/15.

Table 3.24 in the Supplementary Material at the end of this section details programs that will

continue to be delivered beyond 2013/14 if the special rate variation is granted.

3.2.4 Social infrastructure plans

These plans identify key trends and important issues, and are based on an analysis of available

research and statistical data (including relevant State and Commonwealth plans and policies),

and were developed in consultation with key stakeholders and the wider community. The plans

establish priorities, goals and actions to deliver the City’s social infrastructure. This was achieved

through a rigorous methodology regarding identification, prioritising and weighting of issues, and

formulation of appropriate strategies in consultation with key stakeholders and identified partners.

For the Lake Macquarie LGA, which consists of a geographically dispersed, and often isolated

population, it is essential that social infrastructure is accessible. This therefore, often requires


replicating many of the services and facilities, in order to ensure that all of the community has this

access.

Under the proposed variation, Council will be able to implement the recommendations identified

within these strategic plans to deliver additional social infrastructure. Table 3.2 identifies each of

these plans, along with the key stakeholders involved in the development of them, the

consultation methods used, and the recommendations of each of the plans which are to be

implemented under the variation.

Implementation of these social infrastructure projects will have significant social benefits. The

increased provision of services and facilities will have positive impacts on people’s way of life,

and increase the cohesion, stability and character of the community. This option will also lead to

significant improvements in the quality of the environment, along with improvements to people’s

health and wellbeing. With increased provision of services and facilities provided by Council,

people will also have a more positive outlook regarding their fears and aspirations, for

themselves, their children, their community, and for the future.


Table 3.2 - Social Infrastructure Plan recommendations to be implemented

Strategic Plan Stakeholders / Consultation Methods Recommendations to be Implemented Under the Proposed Variation

Library Service Delivery Model 2011

(Priority 3.1 in the Lake Macquarie Community Plan 2008-2018)

(Supporting Document 3.5)

• Library staff forum • Surveys of library users (3,300 received) • Non-user survey involving 439 telephone interviews • 10 Public forums with 305 people in attendance • General public through public exhibition, with over 250 submissions received

• Two new libraries (at Morisset and Glendale)

• Increased focus on the development, promotion and delivery of web-based services, including a full range of transactions

Pool Service Delivery Model 2009



• 6 community and staff workshops • 167 community surveys • School surveys • 15 Stakeholder interviews • 1300 phone number for interested community members to provide input • General public through pubic exhibition, with 25 submissions received

• Upgrades to four pools to modernise facilities

• Redevelopment of Charlestown Pool

• New water play zone at Speers Point Pool

Community Facilities Strategy 2011



• Management committees of the facilities • Users of the community facilities, including community groups, organisations

and pensioner groups • Neighbouring communities • Lake Macquarie Community Advisory Group • Lake Macquarie Youth Advisory Council • General public through public exhibition, with over 80 submissions received

• Kitchen upgrades to Rathmines Community Hall, Kilaben Bay Community Hall, Holmesville Community Hall, Dudley Senior Citizen Centre, Lakelands Community Hall and Windale Community Hall

• Refurbishment of Redhead Winder House Function Room (part of the Lambton Colliery) and Sugar Valley Neighbourhood Centre

Public Toilet Facilities Strategy

• Internal staff to identify levels of usage of facilities • Lake Macquarie Community Advisory Group

• 14 facilities replaced



2011

(Priority 2.2 and 2.4 in the Lake Macquarie Community Plan 2008-2018)


• Lake Macquarie Ageing and Disability Panel • General public through public exhibition with 14 submissions received

• 11 facilities upgraded

Art Gallery Precinct Masterplan (Currently in development)


• Art Gallery reference group • Local sporting groups • Local Business owners • Aboriginal community • General Public through public exhibition of the Masterplan

• Extensions to the Art Gallery for seminar rooms

• Extension to the sculpture park in the Gallery grounds

Sports Facility Strategy 2009


• Sports Clubs, Sports Associations and Council staff to identify current and future levels of use and issues

• Sports Clubs and Sports Associations in the development of the Strategy • General Public through public exhibition of the Strategy

• Sportsground improvements to playing surfaces, lighting, amenities, and car parks across the City

Masterplans 2008 Onwards


• Sporting groups, local residents, local businesses, schools, Aboriginal groups and users of the parks/reserves in the development of the Masterplans

• General Public through public exhibition of the Masterplans

• Implementation of Council’s masterplans including Cameron Park, Speers Point Park and Toronto Foreshore

• Cycleways Strategy

Social Plans including:

Social Plan 2009

Crime Prevention Plan

• Public consultations and forums held as part of the development of Council’s Community Plan

• Consultation with community groups and organisations, and government departments

• Additional youth and Aboriginal programs to be delivered in partnership with relevant organisations



2009

Youth Community Plan 2007

Ageing Population Plan 2008

Children and Family Services Strategy 2009

Disability Action Plan 2010

Cultural Plan 2007

Aboriginal Strategy (currently in development)

(Focus Area 2 – Caring for the Community, in the Lake Macquarie Community Plan 2008-2018)

• Consultation with relevant committees (e.g. Lake Macquarie Crime Prevention Partnership, Lake Macquarie Ageing and Disability Panel, Children and Families Reference Group, Lake Macquarie Youth Advisory Council)

• Consultation with identified stakeholders (e.g. disability advocates, Neighbourhood Watch groups, Child Care services, art practitioners)

• Public workshops held during public exhibition periods

• Construction of respite care centres

• Disability access upgrades to Council facilities

• Provision of facilities for the operation of services to support older people to remain in their own homes, and as a base for activities for older people

• Continued implementation of Graffiti removal project

• Development of public art projects in line with Council’s Public Art Policy

Draft Cycling Strategy 2011-21

(Priority 4.1 in Lake Macquarie Community Plan 2008-2018)


• Internal and external consultative committee formed to contribute to draft strategy development

• Online survey • Focus group of community members • General public through exhibition of the draft strategy • Five information stalls at shopping centres and events to provide community

feedback.

• Construct new cycleways


3.2.5 Resourcing strategy

Council’s Resourcing Strategy (Supporting Document 3.10) is a supplement document supporting

the Community Strategic Plan. The Strategy helps ensure the Community’s long-term goals and

objectives, expressed in the plan are met. Effective resource planning ensures Council will focus

not only on the short-term issues indicated in the Operational Plan, but also on the medium and

long-term challenges.

The Resourcing Strategy comprises a Long Term Financial Plan (LTFP), a Human Resources

Strategy, a Workforce Management Strategy, and an Asset Management Policy.

Lake Macquarie City Council’s Asset Management Strategies and Asset Management Plans are

also part of the Resourcing Strategy, and are presented as separate documents.

Long-term financial plan

The first part of the Resourcing Strategy consists of Council’s Long Term Financial Plan (LTFP).

The LTFP is Council’s ten-year financial planning document and the emphasis is on long-term

financial sustainability.

The LTFP is discussed in detail in relation to the proposed variation in Section 3.3.

Workforce management strategy

The second part to the Resourcing Strategy is the Workforce Management Strategy. An effective

workforce strategy aims to provide Council with the people best able to inform its strategic

direction, develop innovative approaches to complex issues, and deliver appropriate services

effectively and efficiently.

The Workforce Management Strategy addresses the human resourcing requirements for

Council’s Delivery Program and therefore, the Strategy spans four years. Lake Macquarie has

taken it a step further and developed WorkStyle2020, which contains our human resources

strategy for the next ten years (Supporting Document 3.11).

Asset management planning

The third and final part of the Resourcing Strategy deals with Asset Management Planning, in particular the Council’s Asset Management Policy, Strategy, and individual Asset Management Plans. The Asset Management Policy includes:

� Council’s overall vision and goals and supporting asset management

� the organisational context and importance of asset management

� strategic goals, key performance measures, asset management responsibilities and

relationships

� how asset management will integrate into Council’s business processes


� audit and review procedures.

The Asset Management Strategy (Supporting Document 3.12.6) includes:

� the asset management framework used by Council

� the current status of Council’s assets and management practices

� key asset management strategies

� how Council will improve or enhance assets

� specific actions to be undertaken to achieve the Council’s strategic objectives

� asset management maturity audit outcomes

The Asset Management Plans (AMPs) are strategic documents for guiding the planning and

management of infrastructure to provide the required levels of service in the most effective

manner for present and future users. They assist in ensuring infrastructure is provided and

maintained at a safe and functional standard.

AMPs have been prepared for five key asset classes:

� Roads and Infrastructure

� Stormwater

� Parks and Reserves

� Buildings

� Traffic and Transportation

The AMPs include:

� levels of service

� future demand for assets

� asset condition and valuations

� risk management (including Risk Management Plans)

� asset maintenance

� asset renewal

� asset upgrades and new assets

� financial projections

� asset management systems

� plan improvement and monitoring.

Development of the AMPs is an ongoing process that reflects the growing maturity of Council’s

asset management practices. Version 3 of the plans are included as Supporting Documents

3.12.1 to 3.12.5.

Further discussion on the proposed levels of service for assets and how they relate to the

proposed variation is included in Sections 3.3 and 3.6 of this application.


Box 3.1 Special variations for ‘essential works’ costs above the developer

contributions cap

For essential works costs above the cap in contributions plans, a council must provide:

� any reference to the proposed contributions (which were previously to be funded by

developers) in earlier planning documents (e.g, Long Term Financial Plan (LTFP) and

Asset Management Plan (AMP))

� any necessary revisions to financial projections contained in the LTFP and AMP to

reflect the special variation

� a copy of the council’s s94 contributions plan.

This application is not significantly concerned with the delivery of essential works above the

developer contributions cap. An overview of Council’s developer contributions is, however,

detailed below.

Council has the following developer contributions plans in operation:

� The Lake Macquarie Section 94 Contributions Plan No.1 - Citywide - Belmont Catchment

(2004), as amended

� The Lake Macquarie Section 94 Contributions Plan No.1 - Citywide - Charlestown Catchment

(2004), as amended

� The Lake Macquarie Section 94 Contributions Plan No.1 - Citywide - Glendale Catchment

(2004), as amended

� The Lake Macquarie Section 94 Contributions Plan No.1 - Citywide - Morisset Catchment

(2004), as amended

� The Lake Macquarie Section 94 Contributions Plan No.1 - Citywide - Toronto Catchment

(2004), as amended

� The Lake Macquarie Section 94 Contributions Plan No.2 - North Lakes (2004)

� The Lake Macquarie Section 94 Contributions Plan No.5 - North Wallarah (2004)

� The Lake Macquarie Section 94 Contributions Plan No.4 - Commercial Centres (1998)

� The Lake Macquarie Section 94 Contributions Plan No.6, 2007 - Hillsborough Road

In some instances the Citywide Catchment, Northlakes, and North Wallarah contributions plans

levy contributions over the $20,000 cap, and in accordance with legislative changes, were

reviewed and endorsed by the Local Contributions Review Panel in 2009. The review panel

included representatives from the Department of Planning, State Treasury, the development

industry and Urban Taskforce. The Panel undertook a comprehensive review of methodologies,

implementation progress and how the plans relate to cash flow and asset management. As per

the Ministerial Direction of 4 March 2011, the Citywide Catchment and Northlakes contributions

plans are currently exempt from the $20,000 cap, and the North Wallarah plan is subject to a

$30,000 cap. This Direction has previously been supplied to IPART.

For further information on Council’s future strategy for the Section 94 Reserve, refer to

Supplementary Material at the end of this Section.


3.3 Financial planning information

This section presents a justification for the special variation and its timing based on Council’s

Long Term Financial Plan (LTFP). The LTFP includes various budget scenarios that are based

on clear and reasonable assumptions.

This section briefly explains the need for the variation in the context of the LTFP.

As part of this commentary, key assumptions underpinning the LTFP and the special variation

application are explained, such as:

� the community’s priorities and expectations, in order of importance

� the rate peg (if different from 3%)

� level of cost recovery for provision of services (e.g. full or partial cost recovery)

� expenditure growth rate

� major asset disposals/investments/capital commitments

� population and rate assessment growth

� major borrowings/repayments

� grants and other revenue

� proposed level of service for assets

Commentary is included on the Council’s recent revenue and expenditure trends and how these

relate to the need for the additional funding from the special variation.

Council’s Long Term Financial Plan (LTFP) has been developed to enable strategic management

of its resources and opportunities, and the financially responsible delivery of works and services

to our community. The LTFP contained in Council’s Resourcing Strategy (Supporting Document

3.10).

The plan:

� establishes a prudent, affordable and sound financial framework for the delivery of works and

services

� establishes various key performance indicators to allow us to constantly measure and assess

our performance

� provides a transparent and robust framework for monitoring and reporting to ensure continued

financial sustainability of the organisation

Council’s Community Strategic Plan, Delivery Plan and Operational Plan are well integrated and

linked to our LTFP, as are the other components of our Resourcing Strategy, including our Asset

Management Plans and our Workforce Management Plan.

The LTFP anticipates a ‘future state’ based on various assumptions Council can make now in

relation to increases in: costs, revenue, borrowings, community expectations, and in the

responsible management of our increasing assets base.

The plan is intended to be a continually updated guide that tells us what we can afford and the

extent to which we can deliver our Community Strategic Plan. It indicates the extent to which the


program of works and services contained in the plan can be funded through projected income, or

achieved through future efficiency measures and entrepreneurial activities.

Importantly it identifies the shortfall in income required, and how funds provided through the

proposed increase in rates will be used to meet the needs of the community and achieve long-

term financial sustainability.

The LTFP also outlines the future impact on ratepayers as the result of any approved rate

increases which form part of our financial strategy.

As outlined in previous sections, the limitations of rate pegging, cost shifting from other levels of

government, costs rising at a rate greater than the rise in our income, and increasing community

demand for services have all contributed to the financial challenges facing the City.

Council faces additional challenges including:

� Significant population growth expected for our City

� Community’s aspirations, priorities and expectations for improved service delivery

� Cost pressures on wages and other operating costs.

The LTFP takes these challenges into account and provides a strategy to ensure they are

addressed through solutions that deliver continued financial sustainability into the future.

The preparation of our LTFP under current projections of revenue and expenditure has identified

unacceptable financial consequences and a loss of financial sustainability unless we take action

now to address the predicted position of continuing operating deficits and a decaying

infrastructure base. Current projections also illustrate, as communicated in our extensive

consultation process, that current income will not meet the needs of our community.

Although this application focuses on a rate variation, other sources of income including

anticipated future fees and charges, investment revenue, and future grants have been taken into

consideration, together with a financially sustainable borrowing program.

The LTFP incorporates a number of key assumptions relating to:

� Price increases in goods and services.

� Specific increases in costs associated with existing contractual commitments. Where specific

contractual increases exist, such as our three-year contract with Energy Australia for street

lighting, these specific increases have been provided for in the LTFP.

� Increases in fees and charges.

� Estimated rate pegging increases. As per IPART guidelines, our baseline scenario (which

assumes our rate variation application is not successful), incorporates a rate peg increase of

3.6% per annum for 2012/13 and an assumed 3% thereafter.


� The impact of our ageing population and any effect this may have on our pensioner rebates.

Our LTFP incorporates a modest 1.00% per annum growth in the number of pension rebates

granted. Although this may appear low, history has shown that this is a realistic assumption in

regard to future increases in pension rebates, taking into account expectations regarding

increases in our ageing population. Over the last ten years there has been limited growth in the

number of rebates granted. This can be attributed to a number of factors, including a greater

proportion of self-funded retirees and more stringent monitoring of eligibility for pensioner

fringe benefits by Centrelink.

� Rates of return on our investment portfolio. A conservative approach to future investment

earnings has been included, following consultation with Council’s investment advisors –

Oakvale Capital Ltd.

� Land rate increases, and the growth of additional rateable properties, which will assist in

funding works and services, notwithstanding the attendant increase in demand for services.

We estimate approximately 400 new rate assessments will be created each year, delivering

approximately $250,000 in additional rate revenue. Although we expect to receive an additional

$250,000 per annum in rate income, these new rateable properties will place new demands on

the delivery of works and services. In some cases, the additional rate revenue will be

insufficient to cover the cost of these new demands, and new works and services generated by

these rateable properties. Our estimates indicate that each new property will generate an

estimated increase in maintenance costs alone of $326 per annum for each new assessment,

or an additional $130,000 for the 400 new assessments mentioned above. The fact that we

incurred an operating deficit for the last financial year would indicate that the increase in rate

revenue (rate revenue represents less than half of our total income) is not sufficient to

generate an operating surplus after delivering the works and services to our community.

3.3.1 The community’s priorities and expectations, in order of importance

As previously articulated, during Stage 1 of Securing our Future, Council engaged the community

to find out what services they value. This process was used to further validate previous

consultation outcomes regarding the levels of service Council provides, and gain a deeper

understanding of the services the community values and would be prepared to pay for through a

potential increase in rates, or see reduced or cut if no increase was accepted.

The consultation built upon the existing levels of community engagement undertaken during 2008

for development of the 10 Year Community Strategic Plan and 2011 Operational Plan, along with

Council’s yearly Community Survey measuring customer satisfaction and importance.

Stage 2 of Securing our Future saw development of three funding options based upon the

feedback received during Stage 1 of the consultation.

While Section 4 provides further detail about the process and the results of the community

engagement in terms of the prioritisation of services, it is important to articulate how the three

proposed funding options reflected the community’s priorities.

The Levels of Service Review Process report, Providing Enduring Value: Understanding our

Community’s Preferred Level of Rates for Service (Supporting Document 2.1), provides a

comprehensive analysis of how Council incorporated a levels of service review and developed

financial budgets consistent with the community’s priorities and expectations.


Table 3.3 - Levels of service gap analysis summary

Focus Area

Service

Feedback from Engagement Process

Community Desired LoS

Baseline Score/

Achievable Target

Option 1 No SRV

Option 2 Baseline

Option 3

Ca

rin

g f

or

ou

r E

nv

iro

nm

en

t

Sustainability

Protecting and continued enhancement of the Lake valued. High to very high community importance.

85 80 60 80 85

Community Development

Priority areas of Aged care, Child care, Disabled services Spending on halls and community centres could be decreased.

65

58

55

58

65

C

ari

ng

fo

r o

ur

Co

mm

un

ity

Waste, Environment and Rangers

Maintain public health standards, rangers and lifeguards and bulk waste collection valued

60 55 50 55 60

Sport Centres

Swimming centes of low to medium importance but would like to see them run more efficiently

57 50 45 50 57

Cultural Services

Frequency and importance of facilities is low but libraries viewed as providing community benefit.

55 50 45 48 55

S

po

rt,

Re

cre

ati

on

an

d C

ult

ure

Sport and Recreation

Parks, playgrounds and sports facilities of high/very high importance. More amenities required around lake and recreation areas.

85 75 70 75 83


Focus Area

Service

Feedback from Engagement Process

Community Desired LoS

Baseline Score/

Achievable Target

Option 1 No SRV

Option 2 Baseline

Option 3

Asset Administration

Roads ranked as high importance. Quality roads road safety are of high value.

85

70

60

75 80

Drainage

Drainage that protects proprties and the lake is of high value

85 75 70 80 85

Roads

Maintenance and upkeep of roads is consistently highly valued

85 65 55 70 80

T

ran

sp

ort

, R

oa

ds

an

d D

rain

ag

e

Traffic and Transport

Footways and cycleways highly valued. Community wants more interconnected cycleways.

75 70 60 65 75

Economic and Employment Development

Medium to high importance rating with value placed on generating employment opportunities

55 50 45 52 52

U

rba

n a

nd

Ec

on

om

ic

De

ve

lop

me

nt

Land Use Low to medium importance rating. City planning and development considered important/very important.

80 70 65 70 70

A demonstrated in Table 3.3, once community expectations were factored in with a scoring and

then gap analysis exercise, multiple models of service levels were considered depending on what

level of funding could be achieved for each model. The budgeting process therefore provides the

cost rendering for individual Council services for each of the model’s being considered. That is, a

link is made between the community’s expectations and Council’s budget for each funding option.

3.3.2 The rate peg (if different from 3%)

Table 3.4 identifies the percentage rate increases for the proposed variation for each of our rating

categories over the life of the variation, based on and including a known rate peg of 3.6% for

2012/13 and an assumed rate peg of 3% thereafter.


Table 3.4 - Percentage change in rates by rating category – special variation scenario

Category Year 1

2012/13

Year 2

2013/14

Year 3

2014/15

Year 4

2015/16

Year 5

2016/17

Year 6

2017/18

Year 7

2018/19

Residential 9.80% 9.70% 9.00% 7.75% 7.25% 6.75% 4.75%

Business 14.00% 14.00% 12.50% 9.00% 7.50% 6.75% 4.75%

Farmland 9.80% 9.70% 9.00% 7.75% 7.25% 6.75% 4.75%

Mining 14.00% 14.00% 12.50% 9.00% 7.50% 6.75% 4.75%

3.3.3 Level of cost recovery for provision of services (e.g. full or partial cost recovery)

Our Fees and Charges clearly categorise the pricing basis of each of our fees as either: partial

cost recovery, full cost recovery, market competitive, statutory, demand management or no

charge. Unless there are specific social or equity reasons, each fee or charge is set to minimise

the net financial impact on the Council or maximise the financial return to Council.

It is important to acknowledge the limits of the market in establishing the pricing basis for our

services. For example, the level of fees we apply for swimming pool entry is determined by what

the community will pay. If the fees are raised above the level the community is willing, or can

afford to pay, there will be a negative financial impact on Council’s income as patrons cease

visiting our pools because of the increase in fees. Another example applies to our Development

Assessment and Compliance fees. A review of the non-statute defined market rates for private

certifiers carried out by Council staff indicated that our fees were below market. As a result we

increased our fees in line with the market to ensure we maximise income to the Council while still

remaining competitive. Refer to Supporting Document 3.13 for user fees and charges.

Other examples of our focus on increasing fees wherever possible include:

� a 24% increase in our mixed waste disposal fees at our waste facility

� a 20% increase in special waste disposal rates at the waste facility

� a 39% increase in Family Day Care rates for new carer registrations.

Our LTFP already factors in what we believe to be reasonable increases in fees and charges that

we consider would be acceptable to our community. It must also be remembered that Council is

not a profit making enterprise and that our objective is to deliver affordable works and services to

our community while ensuring the adequate and appropriate management of our significant asset

base. In addition to these factors, it must be recognised that many fees and charges are set by

NSW government agencies, particularly in the area of planning services. These fees rarely bear a

relationship to the cost of providing the service they are associated with.


Cost shifting from other levels of government

The ability of Council to fully recover significant costs is severely impacted by cost shifting.

Cost shifting means that local government provides a service on behalf of another tier of

government or is handed an asset and the consequent maintenance of that asset without

commensurate funding for maintenance or the provision of the service. The transfer of

responsibilities, without adequate financial compensation, will always put additional financial

pressure on councils that are left to continue to provide the service.

As previously summarised, Council calculates that between 2005 and 2010 more than $62m in

expenses were attributable to cost shifting. The latest survey completed by Lake Macquarie City

Council for the financial year 2009/2010 indicated that approximately $15.5m of Council’s

operating expenses in that year resulted from cost shifting. Examples of cost shifting include

contributions to the NSW Fire Brigade, contributions to the Rural Fire Service, pensioner rate

rebates, cost of the regulation of companion animals, and public library operations.

While it could be suggested that councils have an opportunity to discontinue services, the reality

of removing these services needs to be considered at both a social and financial level.

Historically, some programs have moved from 100% funding to 50% matched funding with the

same outputs required. For example, State Government funding has been made available for the

part-time employment of an Aboriginal Community Worker, a Children’s Planner and an Aged and

Disability Worker. The demand on each of these services, and the expectation of our community,

has now resulted in the need to engage these positions on a full-time basis, without the

corresponding funding. This has involved Council contributing scarce financial resources to

activities that may not be seen as its core function, but are necessitated by community demand

and expectation for these services. It is also extremely difficult, from both a social and political

perspective, to terminate the delivery of any services after the community has become

accustomed to them and developed reliance upon them.

Table 3.5 highlights the significant impact of cost shifting on Council, with the total cost shifting

annual amount increasing $5.5m to $15.5m over the past five years, or a total of 56%, and

totalling more than $62m over the five-year period.

Table 3.5 - Summary of cost shifting to Lake Macquarie City Council

2005/2006 2006/2007 2007/2008 2008/2009 2009/2010

Total Cost Shifting $9.97m $10.38m $12.73m $13.46m $15.54m

Detail of this cost shifting is presented in Table 3.27 in the Supplementary Material in Section 3.7

3.3.4 Expenditure growth rate

A number of expenditure growth rates form part of our LTFP for our proposed rate variation.

These assumptions are listed in Table 3.6.


Table 3.6 - Forecast expenditure growth rates

Description 2012/13 2013/14 2014/15* 2015/16 2016/17 2017/18 2018/19

Salary & Wages 3.25% 3.25% 3% 3% 3% 3% 3%

Utilities (last 5 year average) 16% 16% 16% 16% 16% 16% 16%

Street Lighting (as per contract) 7.50% 7.50% 7.50% 7.50% 7.50% 7.50% 7.50%

Material (Producer Price Index - PPI) 4.60% 4.60% 4.60% 4.60% 4.60% 4.60% 4.60%

Insurance 6% 6% 6% 6% 6% 6% 6%

Fees & Charges for non statutory fees 5% 5% 5% 5% 5% 5% 5%

Rate Pegging 3% 3% 3% 3% 3% 3% 3%

FAG Grant 3% 3% 3% 3% 3% 3% 3%

RFS Contribution 5% 5% 5% 5% 5% 5% 5%

SES Contribution 5% 5% 5% 5% 5% 5% 5%

CPI (on items not covered by the above

factors)2.70% 2.70% 2.70% 2.70% 2.70% 2.70% 2.70%

* In 2014/15 Council has an expiring special variation to general income that was granted for the years 2010/11 to 2013/14 inclusive, approved to cover the costs associated with Environmental works, as defined by Council in its special variation five year works program. As Council intends to continue with its Environmental Program it is proposed to increase rate income in 2014/15 to enable these works to continue, and this increase in rate income is incorporated in percentage increase. The proposed percentage increase in rate income in 2014/15 that relates to the extension of the environmental program is 2.59%.


Basis of above assumptions:

� Salaries and wages – The first two years are based on the Local Government State Award

increases with the following years (commencing 2014/15) estimated at a conservative 3% per

annum.

� Utilities – Future increases have been based on the average increase over previous five years

� Street lighting – A street lighting contract has been signed with Energy Australia for a three

year period commencing 1 July 2010. Increases in future years beyond the term of the contract

have been estimated based on the same 7.5% per annum increase outlined in the initial

contract.

� Materials – The increase in materials is based on the anticipated increase in the Producer

Price Index.

� Fees and charges – non statutory – The amount of fees and charges we can levy, which are

non statutory, are dependent on supply and demand. We have assumed an increase on these

non statutory fees and charges of 5% as an amount which could be reasonably assumed to be

acceptable to the general public.

� Rate pegging – as per IPART guidelines, we have assumed a rate peg increase in future years

of 3%, if our special rate variation application is not successful.

� Financial Assistance Grant (FAG) – A conservative approach has been applied to our FAG

income of 3% increase per annum.

� Rural Fire Service and State Emergency Services contributions are erratic over time. The

LTFP assumes an increase of 5% per annum, which has been based on past experience of

increases over the past five years.

� Consumer Price Index – for the balance of our costs we have assumed a general CPI increase

per annum of 2.70%. This figure was the percentage increase over the December 2010 quarter

provided by the Australian Bureau of Statistics.

3.3.5 Major asset disposals/investments/capital commitments

Asset disposals

Our Property Plan identifies an average income of $500,000 per annum from the sale of land and

reflects the disposal of several surplus land parcels across the City. These land holdings are at

various stages of becoming available to the market. The properties range from being under

contract for sale to early planning assessment stages. Proceeds from the expected sales are

contained within our Property Plan and are linked and contained within our LTFP.

Council’s Property Department has a strategy to ensure the maximum economic use and

enhancement of Council’s land holdings and to realise the best financial outcome from any

eventual sale.

All Council land holdings are regularly evaluated for operational and community needs. Assets

that are no longer effective in adding value to the community or Council operations are disposed

of.


Council also maintains a reserve for the reinvestment in assets, a reserve which has been

established to take advantage of any entrepreneurial opportunities which meet our specified

investment criteria, including enhancing employment and service delivery in the City. The reserve

is funded by income from current investment properties and pays for the costs (including staff

costs) of our Property Department, with profits being restricted within this reserve to provide

funding for future investment opportunities. An integral component of this strategy is that the

activities of our Property Department also fund a contribution to our general fund each year,

which for the current financial year amounts to over $3m. This strategy ensures that we have

funds available to take up investment opportunities and provides a mechanism to supplement the

funding of general works and services to our community.

Table 3.7 shows land sales over the past five years and indicates a reduction in the amount of

land sales since 2006/2007. This reduction in land sales reflects the fact that the ‘easy fruit’ has

already been picked with regard to land sales, with the balance of land more difficult to realise.

Importantly, the reduction in land sales over time is in line with what our community has clearly

indicated during our consultation process, which is that they do not want significant land sales to

fund ongoing works and services.

The former sales also reflect uncomplicated, attractive land and the lack of Government imposed

requirements.

Table 3.7 - Lake Macquarie City Council historical property disposals

Property Disposals

From Note 5 Audited Financial Statements

$`000 2010/2011 2009/2010 2008/2009 2007/2008 2006/2007

Proceeds from Disposal of Property 2,109 4,903 5,812 4,069 5,135

Proceeds from Disposal of RE Assets 1,133 1,347 465 1,965 3,170

Proceeds from Disposal of Investment Property 0 0 2,048 0 0

Total 3,242 6,250 8,325 6,034 8,305

In addition to the above, the recent introduction of several legislative requirements around

sustainability, flora, fauna and biodiversity, along with stricter requirements on contamination has

delayed the number of properties available for sale. Addressing and resolving these matters can

be a lengthy process and it may take five years or more before such land may be available for

disposal.

Past disposal of Council land has seen the sale of residential lots or part of lots containing less

than 1,000 square metres. As an example, past land sales include former night-cart lanes no

longer used or required, and left over undedicated road which was sold to adjoining owners or

placed on the open market.

There has also been a limited number of sites which have included residential subdivisions or

larger commercial land sales which are targeted with an end use that would benefit the

community and stimulate economic growth. These sites have been in the minority.


Capital commitments

Our LTFP clearly identifies the amount of new and replacement capital expenditure proposed

during the life of the plan. The impact of depreciation and maintenance costs associated with this

expenditure has also been incorporated in our LTFP.

The accounting requirement to constantly revalue our assets has placed a sharper focus on the

management of those assets, and the need to ensure appropriate maintenance and replacement.

This revaluation of assets has a significant impact on our depreciation charges and ensures that

our Asset Management Plans adequately identify the necessary maintenance required to ensure

we maximise the life of our assets. The impact of the increase in depreciation and the increased

maintenance costs identified by our Asset Management Plans have been reflected in each of the

funding options incorporated into the LTFP, underpinning the need for this special rate variation

application.

3.3.6 Population and rate assessment growth rate

Lake Macquarie City is one of the fastest growing local government areas in the state with a

current population of approximately 201,000 which is expected to grow by approximately 20,000

people over the next 10 years.

Table 3.8 - Lake Macquarie City Council population growth rates

Year Projected Population Projected % Increase

2010 200,849 0.70%

2011 202,255 0.70%

2012 203,873 0.80%

2013 205,504 0.80%

2014 207,148 0.80%

2015 209,012 0.90%

2016 210,893 0.90%

2017 213,002 1.00%

2018 215,132 1.00%

2019 217,284 1.00%

2020 219,457 1.00%

2021 221,651 1.00%

Population projections are based on ABS Table 3218 June 2010 Estimated Residential Population and LMCC projections.

Lake Macquarie City is a projected high growth area, as illustrated in Table 3.8. This continuing

growth places increasing demands on Council to provide works and services to our community.

Although contributions by developers, by way of Section 94 (EPA Act) payments will provide

some funding input, there will still be significant contributions required by Council to provide the

works and services needed. Section 94 funds do not cover maintenance and other operational

costs, such as depreciation. In addition to the increase in demand for the provision of basic works

and services, the expectations of our community are also increasing, and Council is finding it

increasingly difficult to meet these expectations under current funding arrangements.


The increase in population growth will see a minor increase in overall rate revenue as a result of

an increase in the number of rateable properties. Our rate assessment growth rate has been

factored in on the basis of 400 new rate assessments per annum, delivering an anticipated

additional rate income of $250,000 per annum. Although the additional rateable properties

provide additional rate income, they also mean new residents to the LGA, resulting in an

increased demand for works and services. In some cases, this results in a net negative financial

position for Council.

3.3.7 Major borrowings/repayments

Refer to Section 6.2 on sustainability of debt.

3.3.8 Grants and other revenue

Operating grants and capital grants form a substantial component of our annual revenue, but the

amounts of these grants can be difficult to predict and are dependent upon other levels of

government.

Figure 3.2 - Grants and contributions provided for operating and capital purposes

Grants & Contributions provided for Operating & Capital Purposes

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2006/2007 2007/2008 2008/2009 2009/2010 2010/2011

Year

$,0

00 Operating

Capital


Figure 3.3 - Operating grant revenue by year by expenditure

Operating Grant Revenue by Year

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

2006/2007 2007/2008 2008/2009 2009/2010 2010/2011

Year

$,0

00

Other Grants: Library and arts, Transport,Environmental, Bush fire services, Waterways,Economic Development, Heritage & Recreation

Community facilities and services

Financial Assistance Grants

Figure 3.4 - Categories of operating grant revenue 2010/2011

Categories of Operating Grant Revenue 2010 / 2011 (in $,000)

$15,565

$2,453

$706 $1,070 $818 $385 $49$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

Financial Assistance Grants

Community facilities and services

Library and arts

Transport (3x3, Flood Works, Roads to Recovery)

Environmental

Bush fire services

Waterways & Heritage

Categories of Grants


Table 3.9 demonstrates that under the proposed special variation, grants are factored into our

LTFP as a source of funding, along with the corresponding operating or capital expenditure.

Table 3.9 - Forecast Lake Macquarie City Council grant receipts – special variation scenario

Council staff pro-actively seek grants to supplement our income and fund various works and

services that are consistent with the priorities outlined in the Community Strategic Plan, Delivery

Program and Operational Plan. Many of these grants require a matching Council funding

component.

We currently attempt to provide flexibility in relation to matching funding required by most grants

by providing a restricted asset in our accounts. Financial constraints in the past have made it

difficult for us to maintain this reserve at a satisfactory level. This reserve provides some flexibility

for Council in taking up grants that may become available at short notice by ensuring we have

some funding to meet our matching requirement if the grant application is successful.

The additional revenue generated under the proposed variation will provide sufficient funding to

allow Council to take advantage of the many grants available.

3.3.9 Proposed level of service for assets

Council has made significant progress on asset management over the past four years. Council

has prepared core Asset Management Plans for five of our key asset groups (Roads and

Infrastructure, Transport and Traffic, Community Buildings, Parks and Reserves, Stormwater)

which have informed the preparation of the Long Term Financial Plan for the organisation.

As a Group One council, we have complied with the asset management guidelines under the

IP&RF. In accordance with the Division of Local Government’s requirements, the first versions of

an Asset Management Policy, Asset Management Strategy and Asset Management Plans were

completed in 2010. The full suite of Asset Management Plans are provided as Supporting

Documents 3.12.1 to 3.1.5.

Section 3.6 details the impacts of the proposed special rate variation on Council’s infrastructure

and assets.

Purpose

Type

Capital /

Operating

2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19

Financial Assistance Grant O 16,238,494 16,725,648 17,227,418 17,744,241 18,276,568 18,824,865 19,389,611

Lake Macquarie Interchange C 9,500,000 8,500,000 12,000,000

Dept of Family & Community Services - Family Day Care

O 2,074,029 1,863,972 1,555,484 1,586,403 1,617,937 1,650,096 1,682,891

Roads to Recovery Funding C 1,479,000 1,485,407 1,495,000 1,503,000 1,511,000 1,519,000 1,527,000

Swansea Pensioners & Community Care Centre & Morisset Dementia Day Centre

C 1,050,000 0 0 0 0 1,176,000 0

RFS Grant C 800,000 821,600 843,783 866,565 889,963 913,992 938,669


3.3.10 Alternative options

In explaining why the special variation is needed, we have indicated how we have considered an

utilised a range of alternative complementary financing options (e.g. borrowing, private public

partnerships, joint ventures, user pays) and why the special variation is the most appropriate

option. Council has explained how the decision to apply for the variation has been made after all

other options (i.e. alternative revenue sources, changing expenditure priorities, alternative modes

of service delivery) have been considered and exhausted.

Over many years, Council has pursued all available options to improve its financial position,

including:

� Conducting a comprehensive service review

� Completing a full review of fees and charges

� Establishing stand alone business units to generate additional income/profits to supplement

traditional forms of Council income

� Reviewing the opportunity to Increase other forms of revenue

� Reducing, or containing, operating costs

� Developing improved budget and cost management initiatives to ensure the efficiency of

operations.

Each of the above options are dealt with in detail below.

3.3.10.1 Conducting a comprehensive service review

Council undertook a comprehensive Service Review during 2009 to 2011 which identified more

than $4.2m in ongoing savings, achieved through cost reductions, efficiency gains and increased

income. Significant yearly savings will be realised through changes to purchasing practices

($2.4m), savings in landfill airspace consumption ($780,000) and efficiencies in small plant hire

($400,000).

The two most promising sources of new income and efficiency gains identified via the service

review are Council’s Property Investment Strategy, projected to yield $6/7M per year over five

years, and the proposed Sustainable Resource Centre, projected to save an estimated $1.28m

per year from 2016/17. Both potential revenue streams have been included in Council’s LTFP.

Further detail on Council’s Service Review can be found in Section 7 of this application.

3.3.10.2 Completing a full review of fees and charges

A full review of fees and charges is undertaken annually to minimise, wherever possible, the net

impact of service delivery. When setting fees and charges, Council is conscious of the need to

ensure, wherever possible, the full cost recovery of the works and services delivered while

adhering to the Council Charter under the Local Government Charter 1993 of providing

‘adequate, equitable and appropriate services and facilities for the community’.

We are, however, aware that not all fees and charges can be set on a cost recovery basis. Some

fees, such as swimming pool entry fees, and park hire fees can not be set on this basis, as the

fee would be too high and the facilities would not be used. These services are viewed as an


obligation by Council and the alternative of withdrawing them, unpalatable. Council’s community

consultation activities support this perspective. In some instances, Council may set a fee which

will deliver a profit; however, these opportunities are rare.

Annual charges

From the annual charges received in 2010/11, $23m was from our Domestic Waste Management

Charge (DWMC), $1.2m relates to non-domestic waste management charges, and $590,000

relates to sullage services. Although there is significant income identified in this category, it is

important to note that Council is not permitted to make a profit from the charge. The use of

income from the charge is restricted and cannot be used to supplement Council works and

services other than those associated with the delivery of domestic waste services.

Council is currently in the process of implementing a new Waste Strategy aimed at delivering

management systems that are more cost effective and are consistent with Council’s

environmental, social and economic policies and Corporate Plan. As part of this strategy, Council

has conducted a significant community education, consultation and decision-making program.

Council was awarded the 2011 Doherty Award for Excellence in Communication for Local

Governments greater that 100,000 for the communication work undertaken in conjunction with the

Waste Strategy.

As part of Council’s consultation for the special rate variation, detail of the domestic waste charge

and its impact upon rates was outlined in the Securing our Future booklet that was delivered to

households.

Implementation of new waste services to manage domestic waste streams will be charged

through the Domestic Waste Management Charge (Table 3.11), with step increases smoothed

through the use of domestic waste reserves. There are no expected impacts on Council’s

general fund. Council currently has three tenders open as part of its Waste Strategy

implementation. The expected increases in domestic waste charges are difficult to identify

precisely without tender responses; however, the following represents modelling of expected

prices from waste industry consultants’ reports. Tenders are expected to be awarded in July

2012.

Table 3.11 - Increase in domestic waste management charge for green waste processing

2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19

Proposed DWMC ($)

349.50 370.50 393.60 419.01 446.97 477.72 479.79 489.68

Increase in DWMC (%)

N/A 6 6 6 7 7 0 2

User charges and fees

From a total of user charges and fees of $13.7M, the majority of this income relates to caravan

parks on Crown Land. Even if we were to raise these fees, the majority of the income (other than

our commission on turnover) is not available for general use of the Council. Historically, any

increase in other user fees and charges has met with community resistance, and would not

provide a meaningful impact on the generation of additional income for the Council.


Parking fees

Council has recently undertaken a feasibility study on paid parking in the area of Charlestown.

The aim of the study was to investigate the feasibility and benefits of introducing paid parking in

two off-street car parks. No public consultation has occurred on this proposal to date, as the

outcomes of the investigation will not be considered by the elected Councillors until later in 2012.

Fees from community and recreation facilities

Lake Macquarie City Council has over 100 community and recreation facilities, most of which are

managed by volunteers under delegated authority from Council. This model of management,

which utilises over 500 volunteers throughout the City, ensures that user fees raised at each

facility are spent at that facility. It also gives a level of ownership to residents in local community

and sporting groups, which in turn fosters community pride and connectedness. Maintenance

expenditure from club/committee funds also reduces the financial burden on Council and enables

responsive and efficient services.

Council has calculated the savings made by using the volunteer delegated authority model of

management as being approximately $2m annually. This figure purely counts the number of

hours contributed by volunteers and does not take into account the increase in ‘social capital’

gained through community participation, networking and activity, nor the reduced maintenance

burden on Council.

3.3.10.3 Establishing stand alone business units to generate additional income/profits to

supplement traditional forms of Council income

Stand alone business units such as CiviLake (civil construction) and Lakemac Print (graphic

design and printing services) openly compete for the delivery of services to business and other

government authorities. These units generate additional revenue for Council. Estimated income

from external works for CiviLake is anticipated at over $6m this financial year and over $350,000

for Lakemac Print. Refer to Section 7 for further detail.

Lakemac Enterprises (LME) (which includes Lakemac print) has also recently been established

as an entrepreneurial business unit of Council with the objective of generating additional income

through a combination of internal and external business opportunities. It is anticipated that within

five years LME will generate an additional $500,000 income per annum for Council.

Examples of business activities being undertaken by LME include:

� Planning and Building Services ($100,000)

� Fleet Management Services ($100,000)

� Safety Services ($50,000)

� Lakemac Print ($200,000)

� Metal Fabrication ($50,000)


3.3.10.4 Increasing other forms of revenue

In the financial year 2010/11 our total income was $205m, with approximately 38% derived from

rate income, and a significant component of the remainder of income limited by statute. Other

fees and charges we may levy, at our discretion, are limited by what the community can afford

and is prepared to pay.

Figure 3.6 highlights the difficulty Lake Macquarie has experienced in generating income, by

comparing our total continuing operations income per capita (total operating income less capital

grants and contributions) with other comparative councils, the Group 5 average, and the NSW

State average.

This graph reinforces the fact that Lake Macquarie is currently at a significant disadvantage in

relation to our ability to generate sufficient income to meet the demands of our community and

remain financially sustainable.

Figure 3.5 - Total continuing operations income per capita for 2009/10

Total Continuing Operations Income per Capita 2009/10

$500.00

$700.00

$900.00

$1,100.00

$1,300.00

$1,500.00

$1,700.00

$

2009/10 $1,569.35 $1,264.23 $1,199.43 $994.40 $998.49 $828.18 $1,081.00 $1,042.77

Coffs Harbour Newcastle Shoalhaven Tweed WollongongLake

Macquarie

Group 5

Average

NSW State

Average

In 2011/12 Newcastle City Council was able to generate over $7.4m more in rate income than

Lake Macquarie City Council, even though they service 50,000 fewer residents and have 13,600

fewer rateable properties.

This is not to single out other councils, but to identify the inequity of the current rate pegging

legislation, which allows some councils to generate more rate income now because of where they

stood with rate income at the time rate pegging was introduced in 1977.

As to other means of raising income, there has been a full and complete review of our services to

identify business opportunities, other potential sources of revenue, and ways to reduce our

operating costs. By undertaking a two-year Service Review, various opportunities to improve our

financial position have been identified along with alternative ways to ensure the most cost

efficient delivery of services. However, implementation of the Service Review recommendations

will not provide the total solution to our significant financial challenges, and an increase in rate

income is proposed as the most appropriate course of action.

Table 3.12 identifies our various categories of income and the amounts and percentages relating

to these categories for the 2010/2011 financial year. As can be seen, rates form a considerable


component of our income stream (37.5%) which, limited under rate pegging, significantly impacts

our ability to generate sufficient income.

Table 3.12 - Categories of income – 2010/11 financial year

(' 000) %

Rates 77,069 37.5%

Annual Charges 24,997 12.2%

User Charges and Fees 13,679 6.7%

Interest and Investment Revenue 10,110 4.9%

Other Revenue 14,639 7.1%

Operational Grants 25,541 12.4%

Capital Grants and Contributions 38,243 18.6%

Net gain on asset sales 1,152 0.6%

TOTAL $205,430 100%

The opportunity to increase other forms of revenue is addressed in the following information,

which lists our various categories of revenue and any opportunities that may exist to increase

income in these categories.

Interest and investment revenue

Lake Macquarie’s investment objective is to provide the most favourable return to Council

available, having due consideration of risk and security for that investment type, and ensuring that

Council’s liquidity requirements are being met.

Over 95% of Council's current portfolio (which averages approximately $150m) is in licensed

bank deposits and bonds with almost all investments being held with Australian Authorised

Deposit taking Institutions (ADI). All current investments are senior obligations (e.g. term deposits

and bonds) from Australian ADIs, with no exposure to equities. It must also be remembered that

a significant component of our investment portfolio (approximately 58%) relates to investments

that are externally restricted, meaning that the interest earned on these funds is also externally

restricted, and not available for the general use of the Council.

Any attempt to generate additional revenue from our investments would necessitate an exposure

to higher levels of risk which would put our capital at risk. If nothing else, the global financial

crisis has reinforced the notion that potentially higher returns mean higher risk, which may involve

the loss of some or all of our capital. This is not a risk Lake Macquarie City Council is prepared to

take.

Council has an Investment Policy which was reviewed and adopted by the elected Council in

October 2011. This policy sets objectives in relation to the preservation of capital, levels of

liquidity and the requirement to achieve a market average rate of return in line with Council’s risk

tolerance. The policy also sets guidelines in relation to maximum exposure levels to individual

entities, investment ratings and maturity. Council’s Investment Policy is included as (Supporting

Document 3.14).


Other revenue

As mentioned earlier in this application, Council has established business units that compete for

external works contracts, including Lakemac Enterprises, and CiviLake. Revenue generated from

these business units was in excess of $7.7m in the 2010/11 financial year. We see these

enterprises as low risk.

Although we are keen to explore other income generating opportunities, we are also conscious of

the need to not risk ratepayer capital. A full review of risks and rewards is undertaken before we

embark on any potential income-generating opportunities. The requirements of s55, and s55A of

the Local Government Act also place additional restrictions on the ability of councils to generate

income through entrepreneurial activities.

Operational grants

The amount of operating grants available to Council is mostly beyond our control and can change

from year to year. This category of income is not stable, is subject to change depending on

Federal Government support, and is difficult to estimate in future modelling scenarios. In

addition, other than our Financial Assistance Grant, most other grant income is for a specific

purpose and cannot be used for the delivery of general works and services to our community.

Capital grants and contributions

Again, these grants vary significantly from year to year and cannot be relied upon when

constructing financial modelling. For example, capital grants and contributions for the 2008/09

financial year totalled $34.5m, but these grants and contributions dropped down to only $18.9m in

the 2009/10 financial year and rose again to $38.2m in 2010/11, which highlights the uncertainty

and danger of relying on this type of income for future financial modelling purposes.

Note that a significant component of this category relates to dedications of land and

infrastructure, not cash, which then have to be maintained and replaced into the future. As is the

case with operational grants, any capital grants would be provided for specific capital works and

not be permitted for the delivery of general works and services. (Information in relation to grants

has been outlined earlier in this application under Section 3.3.8 – Grants and Other Revenue)

Net gain on asset sales

This component relates to the profit on sale of various assets and can vary markedly from year to

year. This is a minor component of our total revenue stream and is very difficult to model. Our

LTFP does take into account the expected disposal of assets to fund operations during the term

of the LTFP. (The amount of asset disposals contained in our LTFP for the special rate variation

is outlined earlier in this application - Refer to Section 3.3 – Major Asset Disposals / Investments /

Capital)


3.3.10.5 Reducing, or containing, operating costs

Council continually strives to contain, and wherever possible, reduce our operating costs;

however, with ever-increasing costs and the continuation of cost shifting, we are unable to

generate sufficient income to cover these expenses.

Of significant concern is the fact that our operating costs are increasing at a rate much greater

than our operational revenue. Many of these operational costs are direct costs and non

discretionary in nature, and unable to be avoided (e.g. increases in the Rural Fire Services levy,

in the cost of insurance, in the fees payable to the Valuer General to provide values for rating

purposes, in the cost of street lighting and in utility costs). In addition, as previously outlined, our

salaries and wages on average increase about 3.5% per year (approximately $3m per year), in

accordance with the State Award. This cannot be covered by the rate peg increase.

Figure 3.6 shows how Council’s operating costs are continuing to increase each year due to the

factors identified above.

Figure 3.6 - Historical operating costs for Council

LMCC Operating Costs

80,000

90,000

100,000

110,000

120,000

130,000

140,000

150,000

160,000

170,000

180,000

1999

/00

2000

/01

2001

/02

2002

/03

2003

/04

2004

/05

2005

/06

2006

/07

2007

/08

2008

/09

2009

/10

2010

/11

Financial Year

$'0

00

Figure 3.7 clearly indicates our current predicament: where operating costs continue to increase

without an equivalent increase in our income resulting in an operating deficit for the first time in

recent history.


Figure 3.7 - Historical operating result before capital

Operating Result Before Capital

-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

12,000

$'0

00

$'000 8,252 3,746 9,616 10,495 2,655 6210 9213 7130 3079 2593 -2810

00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11

Our ability until last year to maintain an operating surplus also masks the fact that while we have

been financially responsible in containing our operating costs, this has resulted in a reduction of

works and services to our community, and less money spent on the maintenance of our asset

base. Although these actions may have a short-term positive impact upon our operating result,

they can and do have a long-term impact on the deterioration of our asset base, which will be felt

by future generations. By applying for the special rate variation over seven years, Council is

beginning to address the issue of intergenerational equity.

Projections indicate our inability to contain our operating costs, and provide a surplus to cover the

cost of principal loan repayments or the provision of any surplus to provide for new capital works.

It would be financially irresponsible to accept this outcome. Council therefore needs to

significantly increase its income to provide sufficient funds to cover our costs, or, alternatively,

significantly cut our future expenditure.

One of the largest cost areas of most local government authorities is employee costs. Lake

Macquarie City Council employee costs total over $70m per annum, excluding $7.4m of

capitalised employee costs, which represent just over 41% of our total operating costs.

Although our employee costs represent a significant cost to our bottom line, Lake Macquarie

compares very favourably with other Division of Local Government Group Five councils in New

South Wales.

To emphasise the focus we have on containing employee costs, the following information is

provided which relates to the 2010/11 financial year and compares our employee costs with other

councils in our local government grouping (Table 3.13 and Figure 3.8). This information clearly

indicates that Lake Macquarie’s employee costs have been well contained and that we have the

lowest average employee cost per capita of all Group 5 councils.


Table 3.13 - Employee costs relative to total cost

Council

Total

Operating

Costs ($'000)

Employee

Costs

($'000)

FTE(#)

Average

Operating

Cost per FTE

($'000)

Average

Employee

Cost per FTE

($'000)

Resident (#)

Estimates

30 June

2010

Average

Employee Cost

per Resident

($)

FTEs per

1000

Residents (#)

Newcastle 227,923 89,638 926 246 97 156,112 574 5.93

Shoalhaven 180,289 64,833 769 234 84 96,967 669 7.93

Wollongong 220,579 96,233 981 225 98 203,487 473 4.82

Tweed 153,282 50,952 655 234 78 90,090 566 7.27

Coffs Harbour 136,377 36,213 515 265 70 72,827 497 7.07

Lake Macquarie 169,970 77,468 885 192 88 200,849 386 4.41

Figure 3.8 - Average employee cost per capita 2010/11

Average Employee Cost per Capita (2010/11)(uses resident estimate as at 30/6/2010)

$574$669

$473$566

$497$386

$0

$100

$200

$300

$400

$500

$600

$700

$800

New

castle

Shoalha

ven

Wollo

ngon

g

Twee

d

Cof

fs H

arbo

ur

Lake

Mac

quar

ie

Council

$

Figure 3.8 also highlights our ability to contain our Full Time Equivalent (FTE) staff numbers over

time and limit the growth in the number of our employees.


Figure 3.9 - Historical Lake Macquarie City Council FTE numbers

LMCC FTE Numbers

0

100

200

300

400

500

600

700

800

900

1000

2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11

Financial Year

FT

Es

Table 3.4 shows historical costs of necessary consultancy work undertaken to support Council’s

delivery of its services. The increase in consultancy costs from $448,000 in 2008/09 to $1.968m

in 2009/10 relates mainly to consultancies engaged in relation to:

� The exploration of waste management options in regard to NSW Government waste policy the

future of our Awaba Waste Landfill site

� Coastal and Foreshore Wetland Assessment and adaption to Sea Level Rise project

� Works associated with the Office of the Lake Macquarie and Catchment Coordinator. Refer to

Section 9 for more information

Table 3.14 - Historical expenditure on consultancy services

Consultancy Costs 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11

$,000 $,000 $,000 $,000 $,000 $,000

Development Assessment 147 66 73 105 31 69

Asset Management Planning 170 56 54 39 81 149Re-Zoning assessment 136 339 268 383 330 310

Environmental 156 190 332 448 1968 2008

Design Services 21 149 98 65 15 66Other Consultants 637 591 721 593 599 950

3.3.10.6 Developing and implementing improved budget and cost management initiatives to ensure efficiency of operations

Over the past 18 months, a series of accredited external reviews were undertaken to improve

systematic cost control and reporting. In response, Council initiated implementation of the most

significant review recommendations to address:

� The incorporation of Natural Account Budgeting, and reporting against those natural account

budget components. The focus here is on integrating a ‘plan, act, review’ cycle around


projects and their components which will provide a much more timely (monthly), detailed and

targeted cost control system that will be visible to all levels of management.

� The budgeting and reporting of costs related to outdoor labour. These costs have become

significant and will now be managed independently, and in addition to the projects on which

they work. This additional level of monitoring will provide a focus on raw labour costs, a

key cost driver in the business.

� Changes to the purchasing and payables procedures to ensure that accruals are recorded as

they are raised. This will enable more timely reporting of commitments and allow for better

Council-wide reporting as significant cost impacts are recognised and actioned sooner.

� A renewed focus on monthly management reporting that will include pro-forma financial

statements, KPIs, required actions, and other business metrics (such as leave balance

reporting and staffing issues).

� Enhanced performance reporting is being addressed on several dimensions. Firstly, qualitative

reporting measures, such as investment quality or project progress, are being incorporated

into monthly management cycles through the implementation of ‘Interplan’ Corporate Planning

software. Additionally, the scheduled integration of the Financial System with Interplan will

provide an even more rigorous project management framework, from project assessment to

project completion, across the span of the Long Term Financial Plan.

Conclusion

Although we have made every attempt to maximise income wherever possible, regulatory

restrictions mean that we are limited in our capacity to generate additional funds from fees and

charges. There are also limits on the amount of grants we are able to receive and the level of

return we are able to achieve on our investments (without taking unacceptable risk).

General rates provide Council with a source of income which provides greater certainty of future

income and is a preferred method of raising income to meet the general needs of our community.

The use of rate income also allows us to spread the necessary increases over a seven-year

period to generate sufficient revenue to deliver works and services to our community and address

our current infrastructure gap.

In 2010/11 the most significant component of our total income relates to rates ($77m). Although

we explore every opportunity to increase other levels of revenue, these increases are insignificant

when compared to the quantum and the percentage that rates form in relation to our total income

stream.

To highlight the significant financial pressures facing councils, it is relevant to review the limiting

restrictions of rate pegging and consider that in some years the permitted increases in rate

revenue are not sufficient to even cover increased employee costs that occur as a result of State

Award salary and wage increases.

For example, an increase of 2.8% in our rate income for 2011/12 will generate an additional

$2.26m, whereas the State Award increase for our employees will require Council to pay an

increase in employee costs of over $2.28m. This means the permitted rate increase will not even

cover the cost of the increase in our employee costs (which represents 41% of our total costs), let

alone contribute to the maintenance, or replacement of our asset base or to the delivery of other

works and services required by our community.


Under the current rate pegging legislation, Council is prohibited from raising sufficient rate

revenue to maintain its $2 billion asset base and maintain an adequate program of works and

services to our community.

Figure 3.10 clearly outlines the inequity of the current rate pegging legislation and identifies the

significant problem relating to Lake Macquarie City Council. As there was no process of

equalisation between councils in the early 1970s when rate pegging was introduced, some

councils have been significantly disadvantaged.

To enable a meaningful comparison, and identify this disadvantage, the following graph

compares the rate revenue generated by each council in our DLG Grouping per head of

population. As can be seen, there are significant variations between each of these councils in

their ability to generate sufficient rate revenue to service the needs of the individual communities.

Figure 3.130 - Comparative revenue per capita for LGAs

Total Rate Revenue per Capita (2010/11)

(uses resident estimate as at 30/6/2010)

$550

$465

$548

$480

$413$384

300

350

400

450

500

550

600

New

castle

Shoalha

ven

Wollo

ngon

g

Twee

d

Coffs H

arbo

ur

Lake

Mac

quar

ie

Council

$

3.4 Efficient and feasible program of expenditure

This section sets out full details of the proposed program of expenditure (or program of works) to

be funded from the special variation for every year of the application, and for additional forward

year projections (to 10 years). This includes any loan funding and borrowing costs which are part

of the proposed program of expenditure.

Council has prepared the program of works included in the application to provide sufficient detail

for IPART and the community to know what the funds will be used for, what specific projects are

proposed and when they will be undertaken.

In this section of the application, Council provides additional detail about the proposed program of

expenditure to that provided in Part A.

Council has provided a commentary regarding the program of expenditure, including details on

estimated costs and why the cost estimates are based on an efficient allocation of resources.


Council has prioritised the proposed spending in the program of expenditure with program and

project dates clearly shown along with project costs.

The program of expenditure for Council’s Baseline and Special Rate Variation budgets has been

developed based on our 10 Year Community Plan, as well as input gathered through the

Securing our Future consultation.

Cost estimates have been drawn from previous experience with the construction of like facilities,

quantity survey information for building projects and the application of standard rates for other

works.

Budgets allocated to each Program or Service are listed in Table 3.15, with the amount funded by

loans also identified.

In addition to this summary, a full Proposed Program of Expenditure can be found in 7 in Part A of

this Application and in Providing Enduring Value (Supporting Document 2.1).


Table 3.15 - Categories of expenditure – 2012/13 – 2018/19

7 Year Baseline Budget $,000 7 Year Budget – Special Rate Variation $,000

Service/Program

New Capital

Replacement Capital

Maintenance TOTAL 7 Year New

Capital Replacement

Capital Maintenance TOTAL 7 Year

Additional Works

Funded by Loans

Road Resurfacing and Rehabilitation

- 148,688 - 148,688 - 190,417 - 190,417 -

Parks and Recreation 54,799 14,290 79,661 148,750 68,631 17,327 79,601 165,559 13,831

Infrastructure Maintenance and Planning

37,455 17,798 57,128 112,381 37,455 17,798 77,595 132,848 -

Corporate Services 31,788 66,835 28,491 127,114 31,647 66,835 29,215 127,697 1,035

New Roads Construction Program 50,752 - - 50,752 50,752 - - 50,752 5,041

Drainage 14,747 2,710 18,478 35,935 14,747 2,710 17,771 35,228 131

Swimming Centres 27 6,699 759 7,485 20,518 6,702 1,594 28,814 20,280

Library Services - 5,534 764 6,298 7,400 11,648 735 19,783 7,400

Community Facilities 1,273 5,728 2,232 9,233 5,340 6,240 4,866 16,446 2,221

Kerb and Gutter Construction 14,266 - - 14,266 14,266 - - 14,266 -

City Design 6,495 - - 6,495 13,911 - - 13,911 7,416

Open Space Land Dedications 13,300 - - 13,300 13,300 - - 13,300 -

Asset Management of Corporate Buildings

920 6,848 4,554 12,322 920 7,155 4,427 12,502 -

Land and Property Development 11,322 - - 11,322 11,322 - - 11,322 -

Footway and Cycleway Program 10,980 - - 10,980 10,980 - - 10,980 -

Transportation 10,906 - - 10,906 10,906 - - 10,906 -

288

Waste Management 8,600 - - 8,600 8,600 - - 8,600 -

Sustainability and Environmental Program

8,533 - - 8,533 8,533 - - 8,533 -

Sealing Gravel Roads 8,300 - - 8,300 8,300 - - 8,300 -


7 Year Baseline Budget $,000 7 Year Budget – Special Rate Variation $,000

Service/Program

New Capital

Replacement Capital

Maintenance TOTAL 7 Year New

Capital Replacement

Capital Maintenance TOTAL 7 Year

Additional Works

Funded by Loans

Fire Protection Services 6,075 241 1,014 7,330 6,075 241 973 7,289 -

Holiday Parks 3,689 3,248 - 6,937 3,689 3,248 - 6,937 -

Sustainable Resource Centre 4,851 - 210 5,061 4,851 - 210 5,061 -

Regional Roads - 1,230 2,871 4,101 - 1,230 2,871 4,101 -

Lake Foreshore Facilities - 2,386 1,387 3,773 - 2,386 1,414 3,800 -

Art Gallery and Cultural Activities - 697 430 1,127 2,400 697 440 3,537 2,400

Bridge Maintenance - 2,770 606 3,376 - 2,770 583 3,353 -

Beach and Surf Life Saving Services

72 1,345 167 1,584 344 1,345 288 1,977 267

Property Asset Management 60 1,721 14 1,795 60 1,721 14 1,795 -

Engineering and Design 272 1,269 - 1,541 272 1,269 - 1,541 -

Public Cemeteries - 955 463 1,418 - 955 446 1,401 -

Hunter Region Sports Centre 336 840 - 1,176 336 840 - 1,176 -

State Emergency Services - - 16 16 - 650 21 671 -

Fernleigh Track 227 - - 227 227 - - 227 -

Rangers Activities - 80 - 80 - 104 - 104 -

300,045 291,912 199,245 791,202 355,782 344,288 223,064 923,134


3.4.1 Additional works to be carried out (listed alphabetically)

The following additional works to be carried our are included in the budget modelling for proposed

variation.

Art gallery

Works at the Art Gallery have been prioritised in accordance with the Art Gallery Precinct

Masterplan. The following projects have been included:

YEAR PROJECT COST

2013/14 Addition to Sculpture Park $100,000

2017/18 Art Gallery Extension to incorporate seminar rooms $2.3m

(design to be undertaken in 2015/16)

Maintenance budgets have been increased to accommodate these new assets.

Beach and surf lifesaving services

Required works at the Surf Clubs have been prioritised as part of the Asset Management Plan

preparation, while incorporating safety issues and community expectations. The following projects

have been included:

YEAR PROJECT COST

2012/13 Blacksmiths storage room extension $50,000

2012/13 Catherine Hill Bay lifeguard tower $80,000

2013/14 Redhead first aid room renovation $60,000

2013/14 Redhead lifeguard tower $82,000

Maintenance budgets have been increased to accommodate these new assets.

Corporate buildings

Lake Macquarie Family Day Care (LMFDC) has been operating from two separate remote

locations. During 2012/13 the Masonic Hall adjacent to the Administration Building will be

redeveloped to accommodate all LMFDC administration staff at a cost of $300,000.

City design

Improvements to town centres will be guided by the development of the Streetscape Master

Plans. These plans are currently underway and will be actioned through Council, private and

other funding sources. We recognise that many of our main town centres have ageing and

outdated infrastructure that is in need of replacement. The proposed improvements will

provide safer, more accessible, more visually appealing centres that promote opportunities for


growth and future development. One million dollars per year has been identified to assist in the

implementation of these plans to our nine major town centres.

Community facilities

Community facility improvements have been prioritised in accordance with the Community

Facilities Strategy 2011 and the Ageing Population Plan 2008. The following projects have been

included:

YEAR PROJECT COST

2012/13 Sugar Valley Neighbourhood Centre Refurbishment $512,000

2012/13-2013/14 Lambton Colliery Winder House Redevelopment $570,000

2012/13 Swansea Pensioners and Community Care Centre $1.65m

2017/18 Morisset Dementia Day Care Centre $1.85m

Maintenance budgets have been increased to accommodate these new assets, with an additional

$422,000 pa included from 2013/14 to address maintenance backlogs.

Corporate services

An additional $1.035m has been allowed for between 2012/13 and 2013/14 to purchase new

plant required to perform additional maintenance and capital works.

Infrastructure maintenance

To address Council’s infrastructure backlog an additional $21m has been allocated to the

maintenance of Council’s infrastructure assets. A full description of the management of Council

infrastructure can be found in Supporting Documents 3.12.1 to 3.12.5.

Library services

Improvements to library services have been funded in accordance with the Library Services

Delivery Model 2011. The following projects have been included:

YEAR PROJECT COST

2012/13 Relocate Cardiff Library $30,000

2013/14 Upgrade Charlestown Library $270,000

2014/15 Relocate Edgeworth Library $120,000

2015/16 Design new library at Glendale $300,000

2016/17 Build new library at Glendale $3.5m

2016/17 Design new library at Morisset $100,000

2017/18 Build new library at Morisset $3.5m

2012-2018 Increase to book vote $5.625m

(dependent on savings in operational budget)


New roads construction – Lake Macquarie Transport Interchange

Glendale has been identified as an emerging major regional centre in the Lower Hunter Regional

Strategy. Its key functions in this regard are to provide:

• a concentration of business, higher order retailing, employment, professional services and

generally including civic functions and facilities

• a focal point for subregional road and transport networks and may service a number of

districts.

The construction of the Lake Macquarie Transport Interchange is paramount to meeting these

functions and funding of $10m has been included in all budget scenarios.

Additional $5m loans required in 2014/15 as the general funds available in the baseline option

have been reallocated to other projects.

Parks and recreation

Parks and Recreation improvements have been prioritised in accordance with the Sports Facility

Strategy 2009, Area Masterplans, the Jetty Construction Program and the Boatramp

Rehabilitation Program. The following projects have been included:

YEAR PROJECT COST

2012/13 Toronto Foreshore Stage 2 and 3 District Playground $750,000

2012/13 Warners Bay Foreshore Toilet Block $350,000

2012/13 Liles Oval Redhead Playing Surface, Carpark $265,000

2012/13-2015/16 Bernie Goodwin Oval Amenities, Carpark, Surface $740,000

2012/13-2016/17 Munibung Hill Recreation Access POM $860,000

2012/13-2015/16 Speers Point Masterplan implementation $1.5m

2013/14 Ulinga Oval Cardiff Floodlighting, Playing Surface $240,000

(design 2012/13)

2013/14-2017/18 Thomas St Oval Edgeworth design and construction $5.0m

2014/15 Cardiff No. 1 Floodlighting $170,000

(design 2013/14)

2014/15 Parbury Park Swansea Amenities, Carpark $975,000

2015/16 Jack McLoughlin Oval Edgeworth Amenities $770,000

(design 2014/15)

2015/16 Croudace Bay Rugby Floodlighting $170,000

(design 2014/15)

2015/16 Kahibah Oval Playing Surface $120,000

(design 2014/15)

2016/17 John St Warners Bay Amenities $770,000

(design 2015/16)

2016/17 Wangi Netball Floodlighting $120,000

(design 2015/16)

2016/17-2017/18 New Treddinnick Field Speers Point Floodlighting, Surface $340,000

2017/18 Blacksmiths Beach/North Swansea Channel Masterplan $1.2m

(design 2016/17)


2017/18 Lenaghan Oval Floodlighting $170,000

(design 2016/17)

2017/18-2018/19 Kaleen St Charlestown Sports Fields, Amenities, Carpark $200,000

2018/19 Mick Middleton Field Gateshead Amenities, Carpark $920,000

(design 2017/18)

2012/12-2018/19 Parks Improvement Program $500,000

Road resurfacing and rehabilitation

An additional $42m will be spent on roads over the next seven years to address the identified

infrastructure backlog. A full description of the management of Council Infrastructure can be

found in Supporting Documents 3.12.1 to 3.12.5.

Swimming centres

Improvements at Swimming Centres have been funded in accordance with the Pool Service

Delivery Model. The following projects have been included:

YEAR PROJECT COST

2012/13 Swansea – All weather cover for Learn to Swim $310,000

2013/14 Swansea – Security system $10,000

2013/14 Swansea – Café/Fitness Centre Design $100,000

2015/16 Swansea – Café/Fitness Centre Construct $3.3m

2017/18 Swansea – Wet Play Area $400,000

2012/13 Charlestown – design costs for 25m pool enclosure $150,000

2012/13 Charlestown – Ramp to 25m pool $150,000

2012/13 Charlestown – Kiosk refurbishment $60,000

2013/14 Charlestown – Security System $13,000

2014/15 Charlestown – Construct 25m pool enclosure and

fitness centre $4.9m

2016/17 Charlestown – Redevelopment of Café/Kiosk area $1.2m

2012/13 Speers Point – Family Water Park concept plan $100,000

2013/14 Speers Point – Security system $10,000

2014/15 Speers Point – Water Fun Area construction and café $3.35m

2016/17 Wave Pool Development $5.6m

2013/14 West Wallsend – Security system $10,000

2014/15 West Wallsend – Community meeting space $35,000

2013/14 Morisset – Café and Community Rooms design $60,000

2015/16 Morisset – Café and Community Rooms construct $630,000


3.5 Impact on financial sustainability

3.5.1 Budget scenarios

In this section, Council has shown the financial implications should the special variation be

approved or not approved. Council has projected three budget scenarios over the relevant years

of the special variation (including forward years):

1. Baseline scenario – This scenario is a ‘business as usual’ model that provides a comparison

for the other scenarios. Revenue forecasts exclude the special variation. Expenditure forecasts

exclude all programs of spending that are intended to be funded by the special variation

income.

2. Special variation scenario – This scenario indicates the result of full approval of the special

variation. Revenue forecasts include the special variation. Expenditure forecasts include all

programs of spending that are intended to be funded by the special variation income.

3. Project proceeds without SV scenario – This scenario shows the result of non-approval of the

special variation. Where a project or program of spending is intended to proceed regardless of

the special variation approval, the Council has shown the projected financial position if the

related expenditure priorities/projects proceed without the special variation income.

Council has included a summary of the Council’s budget, in accordance with the Code of

Accounting Practice income statement and balance sheet format, for the current year and the

following three years, based on the above scenarios. Comment is provided on trends in financial

results (e.g. cash reserves) as necessary to explain the need for the variation.

Since the variation is to fund asset or infrastructure expenditure, the application includes an

explanation of relevant asset replacement, renewal or repair expenses, and how the expenditure

addresses backlogs over time.

For the purposes of this application Council has modeled three budget scenarios in line with

Guidelines, based on a baseline scenario, a special variation scenario, and a project proceeds

without special variation scenario.

Table 3.16 illustrates alignment of these scenarios with the three funding options for rate

increases.

Table 3.16 - Comparison of budget scenarios to funding options

BUDGET

SCENARIO

CORRESPONDING

FUNDING OPTION POINTS OF DIFFERENCE

Project proceeds

without Special

Variation

Option 1 • The same, except that the budget scenario

includes an additional:

• $3m for s94 works over the next 7 years

(funded from the s94 reserve)

• $5.5m for infrastructure maintenance for

assets created by s94 works over the next 7

years


Baseline Option 2 • Income is set at rate peg

• Budget scenario excludes:

• $6m for infrastructure maintenance over the next 7 years

• $16m for road reconstruction and resurfacing over the next 7 years

• Delivery program is otherwise the same

Special Variation Option 3 • The same, except that the budget scenario

includes an additional

• $3m for s94 works over the next 7 years

(funded from the s94 reserve)

• $5.5m for infrastructure maintenance for

assets created by s94 works over the next 7

years

• $422,000 per year (from 2013/14? for

building and park infrastructure

maintenance shortfall

• $260,000 per year (from 2013/14) for

maintenance of recently constructed new

assets

3.5.1.1 Baseline

This is the ‘business as usual’ scenario. It is Council’s Option 2, with the revenue adjusted to the

rate peg amounts. It excludes the following additional works that were to be funded by the special

variation under Option 2:

� $6m for infrastructure maintenance over the next seven years

� $16m for road reconstruction and resurfacing over the next seven years

These amounts were included in our original Option 2 to begin to address the shortfall in

infrastructure maintenance and road funding. They have been removed from this submission so

that the level of funding is consistent with current levels.

This scenario also includes the following that were added to Option 2 in December as a result of

a further review of projected funding balances which occurred during the period of community

consultation.

� $3m for s94 works over the next seven years (additional $500,000 per annum from 2013/14

funded from the s94 reserve). These amounts were added to Option 2 following a review of

the s94 reserve. Pending completion of the s94 plans which will provide a detailed program of

works (refer section 3.2 Developer Contributions) it has been assumed that over the next

seven years, all transfers into the s94 reserve will be matched by program expenditure

resulting in a static or reduced reserve balance. This is consistent with actual activity in recent

years.

� $5.5m for infrastructure maintenance for assets created by s94 works over the next seven

years. These amounts were included to ensure that there is adequate funding to maintain the

additional assets created through s94 works.


3.5.1.2 Special variation scenario

This scenario is intended to indicate the result of full approval of the special variation. Revenue

forecasts should include the special variation. Expenditure forecasts should include all programs

of spending that are intended to be funded by the special variation income.

This scenario is based on full approval of the special rate variation. It is our Option 3 with the

following additions that were made in December as a result of a further review of projected

funding balances which occurred during the period of community consultation:

� $3m for s94 works over the next seven years (funded from the s94 reserve)


years

� $422,000 per year (from 2013/14) for building and park infrastructure maintenance shortfall

� $260,000 per year (from 2013/14) for maintenance of recently constructed new assets

3.5.1.3 Project proceeds without SV scenario

This scenario is intended to show the result of non-approval of the special variation. Where a

project or program of spending is intended to proceed regardless of the special variation

approval, Council has shown the projected financial position if the related expenditure

priorities/projects preceded without the special variation income.

This scenario shows the result of non-approval of the special variation. This is our Option 1. It

identifies the required reductions in programs and services to achieve sustainable budgets

without the special variation.

It includes the following additions made in December (same as for the Baseline scenario)

because of a further review of projected funding balances, which occurred during the period of

community consultation:

� $3m for s94 works over the next seven years (funded from the s94 reserve)


years

Supporting Document 3.15 provides a suite of reports for each of the three options we have

considered.

Under each Option, we have provided information for the seven year period of the application,

which outlines:

� Full commentary on the operating result (before capital), new capital expenditure, replacement

capital expenditure, cash, debt, debt service ratios and the cash funding of depreciation

� Projected financial statements

� Projected balance sheets

� Projected cash balances (both External and Internal restrictions)

� Proposed loan borrowings, loan repayments and cumulative outstanding debt

� Full detail of all new capital funded by loan borrowings


� Detail of debt service ratios

� Projected balances in our asset replacement reserve

� Full detail of replacement capital funded from the asset replacement reserve

� Full detail of new capital expenditure (all funding sources)

� Full detail of replacement capital (all funding sources)

� Detail of cash funding of depreciation

Supporting Document 2.1 - Providing Enduring Value: Understanding our Community’s Preferred

Level of Rates for Service contains further comprehensive data on the three budget scenarios

and the specific spend across the proposed period of the variation.

3.5.2 Impact of special variation on key performance indicators

In this section, we have completed Table 3.17, Table 3.18 and Table 3.19 to respectively

demonstrate the impact on Council’s key performance indicators for the previous year, current

year and five forward years (including a 10-year forecast) under the budget scenarios as detailed

in Section 3.5.1:

� Baseline scenario

� Special variation

� Project proceeds without SV scenario (if applicable)

We have commented on the impact of the special variation on the Council’s key performance

indicators and we have explained any differences under the different scenarios.

Since the application relates to infrastructure investment, we have included a schedule of

Council’s projected performance indicators, as reflected under the LTFP scenarios and relevant

sections/pages of the Asset Management Plan.


Table 3.17 - Key performance indicators – baseline scenario (Option 2)

Indicator

Year Ended 30/6/11 Actual

Year Ended 30/6/12

Estimate

Year Ended 30/6/13

Forecast

Year Ended 30/6/14

Forecast

Year Ended 30/6/15

Forecast

Year Ended 30/6/16

Forecast

Year Ended 30/6/21

Forecast

Operating Balance Ratio %

-2.35 -8.69 -10.31 -9.99 -11.74 -13.26 -13.88

Unrestricted Current Ratio %

246.38 221.26 105.36 91.21 69.06 63.33 51.99

Rates and Annual Charges Ratio %

49.68 58.37 55.02 55.77 55.06 56.23 57.82

Debt Service Ratio %

5.18 5.50 5.56 6.13 6.04 5.93 7.55

Broad Liabilities Ratio %

72.63 73.72 78.94 90.73 95.04 92.02 86.48

Asset Renewal Ratio %

72.57 92.16 77.35 75.43 71.83 71.21 64.58

Note: Operating balance ratio is the net operating result (excluding capital items) as a percentage of operating revenue

(excluding capital items).

Unrestricted current ratio is the unrestricted current assets divided by unrestricted current liabilities. “Unrestricted” means there

is no restriction on the asset or liability imposed by regulation or some other externally imposed constraint, eg, restricted assets

include developer contributions.

Rates and annual charges ratio is the rates and annual charges divided by operating expenses.

Debt service ratio is the net debt service cost divided by revenue from continuing operations.

Broad liabilities ratio is the total debt plus cost to clear infrastructure backlogs (Special Schedule 7) divided by operating

revenue.

Asset renewal ratio is asset renewals expenditure divided by depreciation, amortisation and impairment expenses.


Table 3.18 - Key performance indicators – special variation is approved (Option 3)

Indicator


Year Ended 30/6/12

Estimate

Year Ended 30/6/13

Forecast

Year Ended 30/6/14

Forecast

Year Ended 30/6/15

Forecast

Year Ended 30/6/16

Forecast

Year Ended 30/6/21

Forecast


-2.35 -8.69 -7.90 -4.80 -2.96 -2.72 3.91


246.38 221.26 114.00 122.57 128.15 135.34 222.30


49.68 58.37 56.34 58.25 58.48 60.03 63.00


5.18 5.50 5.36 5.93 5.76 5.98 8.13


72.63 73.72 77.27 86.02 94.48 87.79 66.97


72.57 92.16 82.99 76.97 72.70 85.02 74.06

Table 3.19 - Key performance indicators – projects proceed without special variation (Option 1)

Indicator


Year Ended 30/6/12

Estimate

Year Ended 30/6/13

Forecast

Year Ended 30/6/14

Forecast

Year Ended 30/6/15

Forecast

Year Ended 30/6/16

Forecast

Year Ended 30/6/21

Forecast


-2.35 -8.69 -9.22 -5.44 -5.27 -5.54 -3.91


246.38 221.26 122.43 137.42 143.56 175.36 242.43


49.68 58.37 55.18 55.78 54.88 55.81 56.32


5.18 5.50 5.58 5.96 5.69 5.39 6.08


72.63 73.72 79.10 90.95 97.49 93.54 85.48


72.57 92.16 70.95 68.89 66.31 65.55 60.88


Operating balance ratio

A special rate variation is the only budget scenario that provides a positive operating balance

ratio, with this only being achieved in the tenth year of our forecast. This confirms the fact that

neither the Baseline nor the Without SRV scenarios are financially acceptable, with both these

scenarios providing continuing negative operating balance ratios for all future years as a result of

the inability of these scenarios to deliver an operating surplus (before capital).

Unrestricted current ratio

The baseline scenario (Option2) provides an unacceptable deterioration in the unrestricted

current ratio over the term of the requested rate variation, dropping from a projected 2.21 for the

2011/12 financial year down to only 0.63 in the 2020/21 financial year. Under this scenario, our

unrestricted current assets are actually less than our unrestricted current liabilities, meaning

Council would find it difficult, under this scenario, to meet its financial obligations when they fall

due. The special rate variation provides acceptable unrestricted current ratios, ensuring sufficient

liquidity for Council to meets its financial obligations when they fall due.

Rates and annual charges ratio

The pecial rate variation scenario provides for an increase in this ratio over the period of the

variation, indicating an improvement in our ‘own source’ revenue over time. This increase in ‘own

source’ revenue provides Council with the certainty of future revenue streams, and reduces our

reliance on other external forms of income, such as grants, which are mainly beyond our control.

Debt service ratio

Each of our three options provides debt service ratios which are financially acceptable, and within

the satisfactory range identified by the Division of Local Government.

Importantly, the special variation scenario delivers significant new capital works to our

community. The benefit has been continually communicated to and supported by our community

during the consultation process, and still provides a debt service ratio over time which is

financially acceptable and affordable to Council.

Broad liabilities ratio

Lake Macquarie City Council has an accounting procedure that only permits the use of borrowed

funds for the purpose of the acquisition, or construction, of an asset with a useful life at least that

of the term of the loan borrowings. Under this procedure all our past debt, and all proposed future

debt, is for the purpose of capital works. Our broad liabilities ratio is therefore a good measure of

how we address the infrastructure backlog and how we manage our debt in achieving this

outcome over time. Only our special variation scenario provides us with a broad liabilities ratio

that achieves an acceptable outcome over 10 years, achieving a ratio of 66.97% in 2021. The

reduction in our broad liabilities ratio over time identifies the positive outcome of our preferred

rate variation on our infrastructure gap, while still maintaining debt at affordable levels

Asset renewal ratio

To remain financially sustainable, Council must ensure that we continually address the issue of

asset deterioration over time and, importantly, provide funding to replace these ageing assets at

the most cost-efficient point in their life cycle.


Only the special rate variation scenario provides asset renewal ratios over time that approach our

preferred ratio of 1.0. A ratio of 1.0 indicates that each year, we are replacing assets at the same

rate that they are deteriorating, ensuring we maintain equity in our asset base over time. The

other two scenarios provide ratios which are reducing over time and are unacceptable regard to

the appropriate management of our significant asset base.

3.6 Impact of special variation on key performance indicators - asset management planning

3.6.1 Asset Management Plans (AMPs)

A key function of the asset management planning process is matching service levels as closely

as possible to Council’s ability to fund the services sustainably. This involves identifying current

service levels and their costs, and exploring alternative levels to ensure they are able to be

funded into the future.

Each AMP is supported by a risk management plan that identifies critical risks associated with

each class of infrastructure assets. The risks are rated and treatments identified for unacceptable

risks.

Under the AMPs a ‘whole of life’ approach is taken to managing infrastructure assets including

planning, acquisition/creation, operation, maintenance, renewal, and disposal.

The AMPs detail how Council plans to manage and operate the assets at the desired levels of

service while optimising lifecycle costs. They are closely aligned with the LTFP to ensure that

funding is identified for asset maintenance, operating and capital costs.

The AMPs provide expenditure projections relating to Council’s infrastructure assets for the next

20 years under the following categories:

� Maintenance and operating

Maintenance is the regular on-going work that is necessary to keep assets operating, including

instances where portions of the asset fail and need immediate repair. The AMPs identify

projected maintenance expenditure to meet required service levels, allowing for projected cost

increases and growth in assets.

� Capital renewal

Capital renewal expenditure is major work that restores or rehabilitates an existing asset to its

original service potential.

� Capital upgrade or new

Upgrade or new asset expenditure is work over and above restoring an asset to original service

potential. The work creates a new asset that did not previously exist, or upgrades or improves an

existing asset beyond its current capacity. They may result from growth, social or environmental

needs. New assets required to meet growth are acquired from land developments, as well as

those constructed by Council. Acquiring these new assets commits Council to fund ongoing

maintenance and operating costs for the period that services are provided from the assets.


These future costs are identified and considered in the AMPs when forecasting future

maintenance and operating expenditure.

3.6.2 Infrastructure performance from Asset Management Plans

The AMPs indicate that projected shortfalls in funding for infrastructure asset renewals have the

biggest (most detrimental) impact on the sustainability of Council’s asset-related services.

Therefore, a key performance indicator relating to asset management is the cumulative renewal

funding gap.

The cumulative renewal funding gap is assessed by first identifying projected (or required)

renewal expenditures, based on a range of factors, including asset condition, age and remaining

life. The projected renewal expenditures are then compared to planned (or funded) renewal

expenditures over the planning period. This identifies the funding gap between projected and

planned renewals.

Providing services in a sustainable manner requires this gap to be minimised over the long term

through a range of measures such as adjusting services and service levels, rationalising assets

and increasing revenue.

A second key performance indicator is the road Pavement Condition Index (PCI) as determined

under the SMEC Pavement Management System. The condition of each road section is

determined within the system, with the values ranging from a score of 10 (Excellent) to 1 (Failed).

Council’s long standing target for the road network is an average rating of 7 (Very Good).

The current and projected cumulative renewal funding gaps and pavement condition Indices for

the three scenarios are addressed later in this section.

Council has acquired and built the infrastructure assets over many years to deliver levels of

service. The challenge for Council is to maintain and enhance the existing infrastructure while

continuing to provide new infrastructure for a growing City. The provision of infrastructure that

meets community needs and expectations is fundamental to the economic, social and cultural

vibrancy of the City.

Infrastructure assets deteriorate over time and eventually require replacement. As the majority of

the existing assets were built many years ago, for example the average age of Council’s six

swimming centres is 36 years, the City is now faced with an infrastructure base that requires a

substantial increase in infrastructure expenditure.

As outlined previously, Council has insufficient funds to maintain and replace its infrastructure. A

backlog of works has built up. The current estimated cost to bring the infrastructure up to a

satisfactory standard (that is, a standard which enables baseline levels of service to be delivered)

was reported at $67m in Council’s 2010/11 financial statements.

Deteriorating infrastructure is a major issue for local government across Australia. In 2006, the

total infrastructure backlog for all NSW councils was estimated at $6.3 billion.

Council adopted a revision of the Asset Management Policy on 28 November 2011. This policy

demonstrates Council’s commitment to the responsible management of assets. In recent years


there have been other significant improvements in the systems and methodologies used to

manage Council’s assets. These included:

� a restructuring of the Council department responsible for coordinating asset management

functions

� the formation of a cross-departmental Asset Management Steering Group

� the development of detailed inventories of all Council assets

� improvements to the strategic asset modelling tools

Council’s corporate Asset Management tools include Asset Works Management (AWM), SMEC

Pavement Management System (PMS) and Strategic Asset Management (SAM).

AWM contains a register of all maintainable assets including records of maintenance works and

costs. Work orders raised capture material, labour, plant and contract costs. AWM also has the

ability to schedule asset maintenance/inspections and perform internal and external job charging.

AWM integrates with the financial asset register.

PMS is an asset management system designed to store information relating to roads and related

infrastructure. This tool is used to model pavement and surface deterioration due to the effects of

traffic and environmental factors. It can be used to determine long-term maintenance funding

requirements and to examine the consequences on network condition if insufficient funding is

available. The PMS is capable of producing accounting reports for asset replacement costs,

current written down valuation, and depreciation.

SAM is an asset modeling tool to guide the future capital expenditure needs and has the ability to

model the impact of the capital programs on the asset condition and performance. SAM can

make assessments based on risk. Council is currently implementing this system for non-road

related assets.

Asset data has been mapped within Council’s Geographic Information System (GIS), and further

work is underway to validate mapping data to represent the full suite of assets within the AWM

and PMS registers. This work is expected to be completed in the second half of 2012.

The capacity of staff to effectively manage assets has also been significantly enhanced through a

comprehensive training program, delivered through the Institute of Public Works Engineering

Australia.

Council engaged an external specialist, Jeff Roorda and Associates, to conduct an Asset

Management Maturity Audit in May 2011. The audit identified the areas where Council’s asset

management systems and processes are strong, and prioritised areas for further development

and investment. The outcomes of the maturity audit informed the preparation of a revised Asset

Management Strategy. The outcomes of the maturity audit and the draft strategy are included in

Supporting Document 3.16.


3.6.3 Impacts of special rate variation scenarios on infrastructure

Table 3.20 provides a summary of the impact each scenario will have upon infrastructure and

assets.

Table 3.20 - Impacts of special rate variation scenarios on infrastructure

Baseline Scenario Special Variation

Scenario No Special

Variation Scenario

Funding for Infrastructure maintenance

$169.7m over the next 7 years

$192.8m over 7 years (increase of $23.1m from Baseline)

$141.9m over 7 years ($27.8m reduction from Baseline)

Funding for capital renewal

$216.1m over the next 7 years

$268m over 7 years (increase of $51.9m from Baseline)

$194m over 7 years ($22.1m reduction from baseline)

Cumulative renewal funding gap (the difference between what is required and what is able to be funded)

Gap grows to $55m after 7 years increasing to $153m after 18 years

Gap is $4m after 7 years increasing to $43m after 18 years

Gap grows to $78m after 7 years and $204m after 20 years

Condition of road network

Predicted to fall into the Fair range (rating 4 to 5.5) within 10 years

Predicted to return to the Very Good range (above rating 7 out of 10) within the next 10 years

Predicted to fall into the Fair range (rating 4 to 5.5) within 5 years and the Poor range (below rating 4) after 12 years

New capital upgrade $233.6m over the next 7 years

$289m over 7 years (increase of $55.9m from Baseline)

$202m over 7 years ($31.6m reduction from Baseline)

Baseline scenario

1. Maintenance

The total amount of funding for infrastructure maintenance under this scenario is $169.7m over

the next seven years. This includes maintenance of roads, bridges, car parks, footpaths,

cycleways, traffic facilities, drainage, buildings, parks, sports facilities, cemeteries and natural

vegetated areas. (It excludes $29m for non-infrastructure maintenance).

Infrastructure maintenance is currently inadequate for ensuring the infrastructure assets achieve

their predicted useful life and provide the required levels of service. Over the past 10 years

maintenance funding has not kept pace with rising costs, due to the increasing size and age of

the infrastructure base, changing standards, and increasing community expectations. Council

currently receives approximately 12,000 maintenance requests each year. Examples are

requests for footpath repairs, road patching, weed removal, plumbing repairs, and signage

replacement. Council is currently unable to respond to this very high demand in a timely manner,

a problem which is worsening as the gap between available funding for maintenance works and

demand for these works grows. In 2009/10, 9% of the maintenance service requests received

were not actioned, and this grew to 11% in 2010/11. The projections for 2011/12 indicate


approximately 20% of the maintenance service requests will not be actioned this year. The total

number of service requests under the baseline scenario is projected to grow to 15,400 by

2018/19, with 5,800 of these not able to be completed.

Each of the various types of maintenance service requests is assigned a target turnaround

timeframe for completion, in accordance with the level of service for the corresponding

maintenance activity. As Council’s asset base and unit costs for maintenance have grown faster

than increases in maintenance funding, growing numbers of maintenance service requests

cannot be completed within target timeframes. For example, 5% of building maintenance

requests were not completed within target timeframes in 2008/09. This figure increased to 10%

in 2009/10, and 13% in 2010/11.

Due to inadequate funding, a high proportion of maintenance is reactive, rather than more

effective planned and cyclic maintenance. As an example, approximately 90% of building

maintenance is reactive.

Inadequate maintenance is reflected in the overall appearance of the City. Inadequately

maintained roads, kerb and gutter, and drainage structures is inconsistent with a vibrant and

growing City (see Figures 3.11 to 3.14). More importantly, this means the experiences of many

users of Council infrastructure are characterised by inconvenience and dissatisfaction. This is

evident from the consistently low satisfaction and high importance ratings reported for

infrastructure in Council’s Community Satisfaction Surveys in 2005, 2007 and 2009.


Figure 3.11 - Roads have reached unacceptable condition before reconstruction is carried out, resulting in extensive pothole patches, and rough, uneven road surfaces

Figure 3.12 - Current funding does not allow existing infrastructure such as kerb and gutter to be adequately repaired


Figure 3.13 - A considerable number of road shoulders are not being repaired frequently enough to satisfy residents

Figure 3.14 - Constraints on maintenance funding mean that most maintenance of drainage assets is reactive. Current funding does not allow for blocked stormwater pits and culverts like these to be cleared before stormwater pools over adjacent roads

PMS modeling indicates inadequate road maintenance is likely to cause many local roads to fail

before the end of their design lives. As a result, reconstruction and renewal works must be

brought forward in time (unless the affected roads are to be closed). This means life cycle costs

for such roads are much higher than if they had been adequately maintained in the first place.

2. Capital Renewal

The total amount of funding for capital renewal under this scenario is $216.1m over the next

seven years. (This excludes $76m for non-infrastructure renewals).

Programs to be delivered under this scenario are presented in Supporting Document 3.17 –

Capital Works Programs.

Figure 3.15 shows the projected renewal expenditures compared with planned renewal

expenditures for all infrastructure assets based on the baseline scenario.


Figure 3.15 - Projected and planned renewals – baseline option

Projected & Planned Renewals - Baseline Option

0

20,000

40,000

60,000

80,000

100,000

120,000

2012

/13

2013

/14

2014

/15

2015

/16

2016

/17

2017

/18

2018

/19

2019

/20

2020

/21

2021

/22

2022

/23

2023

/24

2024

/25

2025

/26

2026

/27

2027

/28

2028

/29

2029

/30

Year

$'0

00

Projected Renewals Expenditure $'000 Planned Renewals Expenditure$'000

Table 2.21 shows the gap between projected renewal expenditures and planned renewal

expenditures for all infrastructure assets based on the baseline scenario.


Table 3.21 - Renewal gap – baseline option

Year

Projected Renewals

Expenditure $'000

Planned Renewals

Expenditure$'000

Renewal Funding

Gap $'000

Cumulative Renewal

Funding Gap $'000

2012/13 88,185.14 26,387.69 (61,797.45) (61,797.45)

2013/14 48,563.51 27,929.32 (20,634.20) (82,431.64)

2014/15 31,527.37 27,547.77 (3,979.60 (86,411.25)

2015/16 19,209.89 28,246.74 9,036.84 (77,374.40)

2016/17 24,735.55 28,717.53 3,981.98 (73,392.42)

2017/18 20,875.20 29,471.60 8,596.40 (64,796.02)

2018/19 21,070.81 30,364.81 9,293.99 (55,502.02)

2019/20 14,276.69 30,069.04 15,792.36 (39,709.67)

2020/21 28,605.66 30,753.11 2,147.45 (37,562.22)

2021/22 60,571.50 31,444.54 (29,126.96) (66,689.18)

2022/23 25,928.84 32,387.88 6,459.04 (60,230.14)

2023/24 107,327.09 33,359.51 (73,967.58) (134,197.72)

2024/25 27,026.71 34,360.30 7,333.59 (126,864.13)

2025/26 27,041.32 35,391.11 8,349.79 (118,514.35)

2026/27 43,564.44 36,452.84 (7,111.60) (125,625.95)

2027/28 59,913.37 37,546.43 (22,366.94) (147,992.89)

2028/29 43,754.84 38,672.82 (5,082.02) (153,074.92)

2029/30 40,103.25 39,833.01 (270.25) (153,345.16)

The cumulative renewal funding gap (i.e. the difference between what is required and what is

able to be funded) grows to $55m after seven years and $153m after 18 years.

The infrastructure renewal funding gap represents the shortfall in funding for works to renew

infrastructure assets that reach the end of their useful lives. One of the primary reasons for the

current renewal funding gap is that infrastructure costs have been increasing faster than Council’s

income.

It is important to note the renewal funding gap is not calculated on the same basis as the $67m

infrastructure backlog reported under Special Schedule 7 in Council’s 2010/11 financial

statements. The infrastructure backlog was estimated in accordance with the Local Government

Code of Accounting Practice Financial Reporting and Guidance published by the Division of Local

Government on Special Schedule 7 to Local Governments’ Financial Statements. The


infrastructure backlog incorporates estimates of both renewal and maintenance works required to

bring infrastructure assets to a satisfactory standard. By contrast, the asset renewal funding gap

is a simpler measure, used to assess whether planned renewal expenditure is likely to be

sufficient to meet future asset renewal requirements.

Under the baseline scenario, faced with the continued growth of the renewal funding gap, as well

as the requirement to maintain current levels of service, deterioration of Council’s assets would

accelerate over time.

This worsening deterioration would be most evident in local roads, which comprise approximately

70% of the value of Council’s infrastructure assets. Deteriorating local roads are also a cause for

concern from a community perspective, as community feedback over many years has

consistently indicated road services are highly important to local communities in comparison to

other Council services. (Local roads were rated among the Council services of highest

importance in representative community surveys conducted by Council in 2005, 2007 and 2009,

as well as in the results from Stage 1 of Securing Our Future).

Council regularly assesses the condition of the sealed road network using well established

criteria, including roughness, surface cracking and rutting. It also considers the effects of existing

traffic and structural information. The road section data is maintained in the SMEC Pavement

Management System. The condition of each road section is determined within the system, with

the values ranging from a score of 10 (Excellent) to 1 (Failed). Over the past few years, the

average condition of the road network in Lake Macquarie has declined from a rating of over 7

(Very Good) to a rating of 6.5 (Good) because of the aging infrastructure and a growing backlog

of reconstruction and resurfacing projects. Approximately 10% of the network has been rated at

1 or lower (Failed) where either the surface or the road structure indicates that full reconstruction

or major repairs are required.

Figure 3.16 shows the predicted deterioration of the road network under the baseline scenario.

Figure 3.16 - Predicted road pavement condition index – baseline scenario

Road PCI Predictions

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Year

PC

I


Under this scenario, the average condition of the road network would continue to decline, and is

predicted to fall into the Fair range (rating 4 to 5.5) within 10 years, and would continue to worsen

after that. This means the number of defects such as potholes, edge breaks, and larger localised

pavement failures throughout the local road network would grow each year.

Although detailed forecast modeling is not yet available for other asset types, similar effects on

their condition are expected due to shortfalls in renewal funding. The current condition of all asset

classes is detailed in the Asset Management Plans.

The lack of renewal funding is clearly demonstrated in the road resurfacing program. This

program is aimed at maintaining trafficable surfaces and protecting the underlying pavements

from water damage. The area of road resurfaced each year has been declining, as costs

increase faster than available funding and greater amounts of preparation works are needed due

to the deteriorating road condition. Over the past three years the area of road sealed per year

has dropped by 11.8% and this decline is expected to continue in future years under the Baseline

scenario. This is despite a growth in road surface area as new roads are constructed. Based on

current resurfacing rates, roads can only be resurfaced once every 19 years on average, which is

well short of the target of approximately every 12 years.

The timing for addressing the renewal funding gap is an important consideration. The further the

deterioration of the City’s infrastructure asset networks advance, the greater the cost burden in

the future.

3. Capital upgrade/new capital

The total amount of funding for capital upgrade and new assets under this scenario is $233.6m

over the next seven years. (This excludes $66m for non-infrastructure).

Programs to be delivered under this scenario are presented in Supporting Document 3.17 –

Capital Works Programs.

Table 3.2 details a list of recently completed strategies that identify the infrastructure needed to

meet the current and future needs of our community. These strategies have been developed

following extensive community and stakeholder consultation and also consider asset condition on

existing infrastructure as well as increased operational costs for new and enhanced infrastructure.

The strategies prioritise works based on numerous factors, which vary slightly between plans but

include asset condition, financial implications, community benefit and community demand.

Under the Baseline Scenario, the implementation of these plans is severely limited. Table 3.2

details projects in various strategies that cannot be funded without the special rate variation and

these include community facility upgrades, refurbished and accessible public toilets, sporting

facility upgrades and implementation of public space masterplans.

Special variation scenario

1. Maintenance

The total amount of additional funding over seven years for infrastructure maintenance under this

scenario, compared with the Baseline scenario is $23.1m (i.e. 14% increase).


This is considered a sustainable level of maintenance funding. It addresses the current shortfall

in maintenance expenditure and allows for expected growth in assets in the City over seven

years. It also recognises that maintenance costs and community expectations change over time.

In some cases there will be improvements to the standard and level of maintenance, and there

will be a noticeable enhancement in the overall appearance of the City. For example:

� Bus shelters will be painted on a programmed basis

� Public toilets will be cleaned more often

� There will be increased mowing and weed removal in high usage parks and reserves

� Response times for pruning or removal of hazardous trees will decrease

� Parks furniture will be cleaned and maintained more often

� There will be increased heavy patching of road pavements

� Buildings maintenance will increase including painting, repairs and gutter cleaning

� Maintenance of stormwater improvement devices (SQIDS) will improve

The overall efficiency of Council’s maintenance operations will also improve as there will be an

increased focus on the cost effective planned and cyclic maintenance. This will allow capacity

building within existing resources supported by improved systems which are cost saving

orientated. This is likely to reduce the frequency of adhoc reactive maintenance and take

pressure off the growing number of maintenance requests.

2. Capital renewal

The total amount of additional funding over seven years for infrastructure capital renewal under

this scenario, compared with the Baseline scenario is $51.9m (i.e. 24% increase).

Additional works to be delivered under this scenario (compared with the Baseline scenario) are

presented in Supporting Document 3.17 – Capital Works Programs.

Figure 3.17 shows the projected renewal expenditures and planned renewal expenditures for all

infrastructure assets based on the Special Variation Scenario.


Figure 3.17 - Projected and planned renewals – special rate variation scenario

Projected & Planned Renewals - Special Rate

Variation Option

0

20,000

40,000

60,000

80,000

100,000

120,000

2011

/12

2012

/13

2013

/14

2014

/15

2015

/16

2016

/17

2017

/18

2018

/19

2019

/20

2020

/21

2021

/22

2022

/23

2023

/24

2024

/25

2025

/26

2026

/27

2027

/28

2028

/29

2029

/30

Year

$'0

00



expenditures for all infrastructure assets based on the special variation scenario.

Table 3.22 - Renewal funding gap table - special rate variation scenario

Year

Projected Renewals

Expenditure $'000

Planned Renewals

Expenditure$'000

Renewals Funding Gap

$'000

Cumulative Renewals

Funding Gap $'000

2011/12 59,008.19 25,556.53 (33,451.66) (33,451.66)

2012/13 54,253.68 29,500.51 (24,753.17) (58,204.82)

2013/14 48,563.51 29,091.69 (19,471.83) (77,676.65)

2014/15 31,527.37 28,483.46 (3,043.91) (80,720.56)

2015/16 19,209.89 36,915.46 17,705.56 (63,015.00)

2016/17 24,735.55 38,527.36 13,791.80 (49,223.19)

2017/18 20,875.20 41,495.74 20,620.55 (28,602.65)

2018/19 21,070.81 46,058.51 24,987.70 (3,614.95)

2019/20 14,276.69 36,226.80 21,950.11 18,335.16

2020/21 28,605.66 36,919.72 8,314.06 26,649.23

2021/22 60,571.50 37,620.46 (22,951.04) 3,698.18

2022/23 25,928.84 37,019.91 11,091.07 14,789.25

2023/24 107,327.09 38,098.74 (69,228.35) (54,439.10)

2024/25 27,026.71 39,272.00 12,245.28 (42,193.81)

2025/26 27,041.32 40,418.26 13,376.93 (28,816.88)


2026/27 43,564.44 41,599.11 (1,965.34) (30,782.22)

2027/28 59,913.37 42,815.60 (17,097.77) (47,879.99)

2028/29 43,754.84 44,068.79 313.94 (47,566.04)

2029/30 40,103.25 45,399.17 5,295.92 (42,270.12)

The cumulative renewal funding gap between projected asset renewals and planned asset

renewals will be $4m after seven years increasing to $43m after 18 years.

The projected renewal funding gap is considered acceptable given the overall size of Council’s

asset base and the anticipated growth in the asset replacement reserve. Although the reserve is

currently depleted, it will begin to be replenished under this scenario from 2015/16 and will reach

$11.6m by the end of year seven. The reserve is expected to continue to grow beyond this

period and will be available to address expected fluctuations in renewal works as the

infrastructure continues to age. For example, there will be a large increase in drainage

replacement around 2025.

It should also be recognised that the projected renewal funding gap is not a precise figure and is

based on Council’s currently available information as presented in the Asset Management Plans

and the Long-Term Financial Plan. There are various factors that will be subject to change in the

future such as growth in assets, available grant funding, decisions regarding closure or sale of

assets, and further improvements in asset forecast modeling.

The annual program of reconstructing and resurfacing roads will be increased by $42m over the

next seven years under this scenario. Through the increased resurfacing and targeted renewal of

roads, the average road condition is expected to return to the Very Good range (above rating 7

out of 10) within the next 10 years (Figure 3.18).

Figure 3.18 - Road pavement condition index forecast – with rate variation


0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Year

PC

I

Closing the renewal funding gap and improving the average road condition is expected to have

widespread benefits for the amenity, health and safety of local communities.


Examples of these benefits include:

� Reduced travelling times within the City. This would enable productivity improvements for

businesses that use the local road network, and better quality of life for local residents, who

could expect to spend less time in transit. Another likely result is fewer traffic-related injuries,

enabling some medical treatment costs for road injuries to be avoided, and some productivity

losses in the local economy to be avoided.

� Fewer slips, trips and falls by members of the public using Council footpaths. These benefits

would accrue as the whole footpath and cycleway network is maintained in a good condition

on average (compared with maintaining only high use pathways in good condition under the

baseline scenario).

� Significant financial costs associated with flood damaged property is avoided and increased

risks to personal health and safety from exposure to flood waters is also avoided.

Closing the infrastructure renewal funding gap will also ensure that future ratepayers will be able

to enjoy the same standards of service from the City’s infrastructure as current ratepayers,

without enduring a huge financial burden to bring infrastructure assets back to their current

condition in the future.

3. Capital upgrade/new

The amount of additional capital funding over seven years for new/upgraded infrastructure will be

$55.9m (i.e. 24% increase from baseline).

Additional programs and projects to be delivered under this scenario (compared with the Baseline

scenario) are presented in Supporting Document 3.17 – Capital Works Programs.

The increased funding will allow Council to improve levels of service to the community and

support an additional program of works for pools, libraries, sports centres, parks and

playgrounds, and upgrades to town centres. Existing community facilities will be upgraded and

new facilities built.

The special variation scenario supports the timely implementation of the strategies outlined in

Table 3.2, including community facility upgrades, refurbished and accessible public toilets,

sporting facility upgrades and implementation of public space masterplans.

Examples of capital upgrade and new works that will be funded under this scenario are:

� Recommendations from the Library Service Delivery Model will be delivered, which proposes

two new libraries at Morisset and Glendale, costing $7.4m. Construction of the new libraries

will also be partially funded by developer contributions

� Lake Macquarie Art Gallery will be extended to incorporate seminar rooms, and the sculpture

park will be extended in the gallery grounds

� $20.4m will be provided over seven years to redevelop our pools according to

recommendations in Council’s Pool Service Delivery Model. This includes the upgrade to four

pools to modernise their facilities, the redevelopment of Charlestown Pool and a new water

play zone at Speers Point

� Sportsground improvements will be made to playing surfaces, lighting, amenities, and car

parks across the City ($6m over seven years)


� A program to upgrade town centres will be developed. $7m will be allocated over seven years

for upgrades in nine locations: Cardiff, Charlestown, Belmont, Toronto, Morisset, Warners

Bay, Glendale, Swansea and Mount Hutton. Other sources of funding will be sought, including

State Government economic development funds.

� There will be continued implementation of:

- Speers Point Park Master Plan ($1.5m over four years)

- Toronto Foreshore Master Plan including new play equipment ($0.75m)

Without special variation scenario

1. Maintenance

Under this scenario there would be a major reduction in the already inadequate infrastructure

maintenance funding, including a $27.8m reduction over the next seven years compared with the

Baseline (i.e. 16.4% reduction).

This will have significant implications for the amenity, safety and health of the community.

Council will need to carefully manage the associated legal and risk management issues.

Under this scenario the number of maintenance requests that will not be completed each year will

escalate, and reach more than half of all requests received within seven years. Examples of

requests that will be delayed or not carried out include footpath repairs, road patching, weed

removal, plumbing repairs, building repairs, and signage replacement.

Examples of reductions in maintenance levels of service compared with the Baseline are:

� Weed spraying in commercial areas will drop from four times per year to two

� Grading of gravel roads will drop from twice a year to once a year

� Response times for pruning or removal of hazardous trees will increase from eight months to

10 and this will extend further in future years

� Removal of seaweed from the Lake foreshore, which is currently done once a year, will cease

� Weed spraying in sports grounds will drop from twice a year to once a year

� Boat ramp cleaning will drop from five times per year to three

� Cleaning and removal of weeds in playgrounds and skate parks will drop from 24 times per

year to 10

� Response times for graffiti removal requests will increase from two days to four

� Maintenance of fire protection zones in areas with high and extreme bushfire risk will drop

from twice per year to once per year

� Maintenance of fire fighting access trails will reduce from once a year to once every two years

� Mowing of parks and recreation areas will drop from six times per year to five

� Maintenance of park landscaping (garden replanting, weeding and mulching) will drop from

five times per year to four

� Routine maintenance works, such as rood gutter cleaning, on community buildings, will reduce

by 50%


The consequences of the reductions in levels of service include the following:

� Council will take longer to respond to maintenance requests

� Cyclic and planned maintenance will be carried out less often

� The average condition of the infrastructure will deteriorate and require full replacement earlier

than anticipated

� Safety and environmental hazards will increase, e.g. trip hazards, unsafe trees, bushfire

hazards and soil erosion

� The standards and levels of service experienced by community members will be reduced, e.g.

frequency of mowing will decrease

� Some facilities will not function adequately, e.g. wetlands will become choked with weeds and

litter

� The temporary closure of facilities will occur more often, e.g. community halls during repairs

� Maintenance efficiencies will decrease as resources are directed away from planned

maintenance towards more expensive reactive and emergency maintenance

� The risk of not complying with statutory requirements will increase, for example essential

services in buildings, and bushfire risk mitigation works required under the Lake Macquarie

Bushfire Risk Management Plan

� The number of public liability claims due to injury or property damage are likely to increase,

e.g. due to increased flooding

2. Capital renewal

Under this scenario the amount of infrastructure capital renewal funding will be reduced by

$22.1m (i.e. 10% reduction).

The reduction in programs under this scenario (compared with the Baseline scenario) are

presented in Supporting Document 3.17 – Capital Works Programs.

Figure 3.19 shows the projected renewal expenditures and planned renewal expenditures for all

infrastructure assets based on the without special variation scenario.


Figure 3.19 - Projected and planned renewals – without special rate variation

Projected & Planned Renewals - Without Special

Rate Variation

0

20,000

40,000

60,000

80,000

100,000

120,000

2012

/13

2013

/14

2014

/15

2015

/16

2016

/17

2017

/18

2018

/19

2019

/20

2020

/21

2021

/22

2022

/23

2023

/24

2024

/25

2025

/26

2026

/27

2027

/28

2028

/29

2029

/30

Year

$'0

00



expenditures for all infrastructure assets based on the Without Special Variation Scenario.

Table 3.23 - Renewal funding gap table - without special rate variation option

Year

Projected Renewals

Expenditure $'000

Planned Renewals

Expenditure$'000

Renewals Funding

Gap $'000

Cumulative Renewals

Funding Gap $'000

2012/13 88,185.14 23,502.04 (64,683.10) (64,683.10)

2013/14 48,563.51 24,412.30 (24,151.21) (88,834.31)

2014/15 31,527.37 24,537.43 (6,989.94) (95,824.25)

2015/16 19,209.89 25,160.84 5,950.95 (89,873.30)

2016/17 24,735.55 25,744.24 1,008.69 (88,864.61

2017/18 20,875.20 26,323.22 5,448.02 (83,416.59)

2018/19 21,070.81 26,878.63 5,807.82 (77,608.77)

2019/20 14,276.69 27,738.03 13,461.35 (64,147.42)

2020/21 28,605.66 28,430.80 (174.85) (64,332.28)

2021/22 60,571.50 29,127.86 (31,433.64) (95,765.92)

2022/23 25,928.84 30,001.70 4,072.86 (91,693.06)

2023/24 107,327.09 30,901.75 (76,425.35) (168,118.41)

2024/25 27,026.71 31,828.80 4,802.09 (163,316.32)

2025/26 27,041.32 32,783.67 5,742.34 (157,573.97)

2026/27 43,564.44 33,767.18 (9,797.27) (167,371.24)

2027/28 59,913.37 34,780.19 (25,133.18) (192,504.42)

2028/29 43,754.84 35,823.60 (7,931.25) (200,435.67)

2029/30 40,103.25 36,898.30 (3,204.95) (203,640.62)


The above demonstrates that this scenario is highly unsustainable over the long term. The

cumulative renewal funding gap grows to $78m after seven years and $204m after 20 years.

Under this scenario the deterioration of Council’s assets would accelerate at a greater rate than

the baseline scenario. This worsening deterioration would be very evident in local roads. Under

this scenario the road reconstruction and resurfacing programs will be reduced by approximately

$16.8m over the next seven years.

Figure 3.20 shows the predicted deterioration of the road network under the without special

variation scenario.

Figure 3.20 - Road pavement condition index forecast – without special rate variation


0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Year

PC

I

The average condition of the road network will decline faster than is currently occurring, and is

predicted to fall into the Fair range (rating 4 to 5.5) within five years and the Poor range (below

rating 4) after 12 years. The number of road defects would grow at a high rate. The resulting

decline in local road standards could be expected to lead to more traffic-related injuries, and to

declining traffic speeds across the local road network. In the long term, a proportion of roads

would become unserviceable, and community members would no longer be able to use them.

These impacts would have detrimental flow-on effects on the local economy.

The other classes of assets will also continue to deteriorate to an unacceptable level. For

example, parks and reserves assets currently have the condition profile shown in Figure 3.21.

Without the special rate variation the average condition would drop and the existing maintenance

requirements would not be met. This would be inconsistent with community expectations for park

and reserves, as shown through Securing Our Future.

.


Figure 3.21 - Current parks and reserves asset condition ratings

2.2

2.25

2.3

2.35

2.4

2.45

2.5

2.55

Foreshore Infrastructure Cemetery Infrastructure Landscape retaining Park Infrastructure Sport Infrastructure

3. Capital upgrade/new capital

Under this scenario the amount of funding for capital upgrade/ new will be reduced by $31.6m,

compared with the baseline.

The reduction in programs and projects under this scenario (compared with the Baseline

scenario) are presented in Supporting Document 3.17 – Capital Works Programs.

Examples of reductions in programs include:

� The installation of new footpaths, cycleways, traffic facilities and public transport infrastructure

will be reduced by $8.1m or 50% over the next seven years.

� The construction of footpaths will be reduced from 1.6 km to 0.8 km per year. Construction of

on and off street cycleways will be reduced from 6km to 3km per year. Number of bus shelter

installations and upgrades will be reduced from eight to four per year. This will set back efforts

to improve pedestrian safety, and promote walking, cycling and public transport as an

alternative to the use of cars. It will also decrease measures aimed at reducing traffic

accidents, speeding in residential areas and safety risks around schools.

� The provision of localised flood mitigation measures will be reduced by $6.4m over the next

seven years. Urban drainage funds are currently used primarily to rectify urban flooding

issues, with a small proportion allocated to improve the amenity of open drains. This will result

in a 50% drop in drainage projects, i.e. from an average of four per year to two per year. This

will increase the risk of our drainage system not coping with major flooding events. Safety

hazards and the cost of public liability claims may also increase.

� The current program of sealing gravel roads will decline by about $4.3m over the next seven

years. The length of road sealed each year will drop by 60%, i.e. from approximately two

kilometres to less than one kilometre.


� New kerb and gutter construction will drop by 25%, i.e. from 1.2 kilometres to 0.9 kilometres

per year. This will impede the progress being made to improve access to residents, improve

drainage, reduce sediment run-off and reduce road maintenance costs.

� The jetty construction program and boat ramp rehabilitation program will be abandoned, which

amounts to a total of $ 6.1m over seven years (including grant funding).


3.7.1 Environmental programs

Table 3.24 - Environmental Programs to be delivered under the proposed variation

PROGRAM

Ecosystem Enhancement This program would continue to deliver strategic conservation planning outcomes, particularly in the areas of biodiversity planning, water quality planning, coastal management planning and estuary management planning. These strategic planning activities are vital to the continued protection and enhancement of the significant natural environment in the City. These functions are especially important to mitigate ecosystem and water quality impacts of new development proposals, and maintain high level of natural resource management expected by the local community. The proposed variation will see delivery of an on-going on-ground environmental works program, which has proven effective in improving water quality from residential areas, as well as improving stream health, wetland health and improving the quality of foreshore areas. It will deliver a minimum of 10 on-ground ecosystem enhancement works projects per years over the life of the variation, as outlined below. In addition to the strategic conservation planning, on-ground works and community support activities listed above, the proposed variation provides Council the opportunity to leverage significant grant funds from State and Commonwealth funding schemes.

ACTIVITIES

Stormwater quality improvement devices The installation of new stormwater quality improvement devices is an important way for Council to improve runoff water quality in existing urban areas. The variation provides for improved health of local streams, as well as protecting the health and recreational amenity of the Lake Macquarie estuary and is especially important given the increasing amount of in-fill development planned to occur within the City over the new 10 years. Funding will enable Council to install two new devices per year. Devices will be installed in priority catchments to maximise water quality outcomes. Priority catchments currently identified include Cockle Creek, Marmong Creek, Winding Creek, Fennell Bay and Secret Bay. The types of devices installed will vary depending on the local conditions in the catchment and the type of pollutant that is being targeted, but will include: gross pollutant traps, vegetated swales, constructed wetlands and bioretention systems. Stream-bank stabilisation and riparian vegetation enhancements The health of local streams and creeks across the City plays an important role in controlling downstream water quality, especially when erosion of the stream is occurring. Native vegetation near streams (known as riparian vegetation) is also vitally important in preserving biodiversity in the City, by providing local habitat and acting as corridors to connect larger bushland areas. The variation will enable Council to undertake at least three streambank improvement projects per year over the life of the variation. Works will be undertaken in priority streams to maximise water quality and ecological benefit. Priority streams currently identified include Slatey Creek, North Creek, Cockle Creek, Dora Creek and Stony Creek.

Estuarine wetland rehabilitation Wetlands have high ecological significance, and provide habitat to many important species. Unfortunately, historic activities (such as filling and clearing) have resulted in a loss of around 30% of wetlands in the City. The variation will enable Council undertakes a program of rehabilitating at lease four priority wetlands per year, to improve their health and extent. Activities to be undertaken include the control of invasive weeds, as well as managing vehicular, pedestrian and stock access to important areas, to protect them from physical damage. Foreshore stabilisation and littoral vegetation improvements The Lake’s foreshore is a popular recreational asset, and is an important contributor to the health of the Lake. However, historic activities, such as filling on foreshores, or the clearing of foreshore vegetation has resulted in degradation of many foreshore areas. Funding will enable Council to undertake a program of stabilising one eroding area of the Lake’s foreshore per year, using a combination of ‘soft engineering’ techniques and improvements to foreshore (littoral) vegetation. These works not only improve the recreational amenity, but also help improve water quality and provide habitat value. Landcare and community support will also be continued, particularly through supporting bush regeneration works at Landcare sites, providing trees and material to support Landcare activities. Other community environmental groups will also be supported to deliver environmental conservation programs (e.g. wildlife rescue) according to local priorities.


PROGRAM

Sustainable Living Energy and greenhouse gas emission reduction Programs will be able to be maintained at current levels to deliver on Council’s targets, such as the 30% per capita reduction in citywide greenhouse emissions and 30% reduction from Council operations between 2008 – 2018. A range of community engagement actions will be continued, including the promotion of residential and business energy and water savings, as well as promoting active transport modes. Residential programs, such as supporting uptake of the Home Power Savings Program, energy audits and second fridge buy back schemes, will be continued and expanded to support residents reduce their energy use by improving the thermal efficiency of their homes and reduce energy use by lights, heating, cooling and refrigeration. Council will be able to facilitate reductions in business energy use and emissions by promoting the Sustainability Advantage and Energy Savers programs for large businesses, as well as the Energy Efficiency for Small Business Program, including energy audits and lighting upgrades. These programs form part of Council’s Sustainable Business Strategy, which will provide the strategic framework for targeting savings by business sector. Energy savings will be promoted via programs such as partnering with Accredited Certificate Providers to provide Energy Saving Certificates to businesses installing low energy lighting and implementing other eligible energy saving measures. Partnering with energy suppliers, Council will help businesses install smart energy metering and work through their own energy saving actions via programs such as Grow me the Money, Earthcheck, 5Star Sustainability and Sustainability Advantage. Council will also invest in capital works improvements at its own facilities, to refurbish or upgrade existing infrastructure to improve energy and greenhouse emission performance. Other Walk the Talk actions will include installation of voltage reduction units, improved air condition control, and low energy lighting to improve energy efficiency, as well as the installation of solar hot water systems and solar PV panels at Council and community facilities. The proportion of electricity sourced from renewable energy for Council’s small and large sites will be increased.

ACTIVITIES

Water consumption reduction Council will implement a range of potable water saving measures on its own sites and community facilities, including installing smart water meters, leak identification audits and rectification, and major plant upgrades at high water use community facilities, such as swimming pools, tourist parks and sports fields. These will include installing systems to harvest and reuse rainwater, and installing low-flow devices, shower timers, dual flush toilets and flush sensors. Irrigation upgrades will be undertaken at sports fields to install efficient water distribution and control systems to reduce water use. At some fields, stormwater capture and reuse systems will be implemented to supply non-potable water, further reducing potable water demand. Residential water use savings will be supported via showerhead exchange programs run in partnership with Hunter Water Corporation, as well as workshops conducted on how to use and maintain rainwater tanks. Other community engagement activities will encourage the installation of flow restrictor, shower timers, and low water using appliances. Workshops and engagement programs will also raise awareness on water wise gardening via appropriate plant selection and garden design.

Transport consumption reduction Council will promote effective public transport and active transport facilities are provided for in new developments via implementation of various planning improvements, including practical guidance in Council’s Development Control Plans and Area Plans. It will also implement the actions in the Lake Macquarie Cycling Strategy and other active transport strategies, including improvements to footpaths, linked open space and activities to engage residents’ use of active and multi-mode transport. New cycleway and footpaths under these strategies will be constructed, commencing with high priority facilities, such as high quality bicycle racks and cycle paths, extending and linking to existing routes and paths. Council will continue to trial and expand its fleet of electric cars, installing electric vehicle charge points, as well as continuing to reduce the average car size in its fleet, and increasing the number of hybrids. It will also investigate and implement options to reduce fuel use and emissions from its heavy vehicle fleet. Waste minimisation and management There will be no significant change to current waste services, as these are funded primarily from the Domestic Waste Management Charge, which is not the subject of this application.

PROGRAM

Sustainability Engagement

ACTIVITIES

Sustainable neighbourhoods program This program will continue in its current form enabling six new sustainable neighbourhoods to commence the planning process, and four neighbourhoods to develop and adopt their local Sustainable Neighbourhood Action Plan, each year.

Citywide campaigns The Citywide Urban Backyard, Natural Disaster, and Resource Consumption campaigns will continue, including the associated programs of education, support and assistance to residents and vulnerable groups, to promote behavioural change. The measurable outcomes from each of these campaigns will provide objective data on the effectiveness of these


Council will continue to work with members of the local Sustainable Neighbourhood network to support and facilitate the implementation of activities and projects that are relevant to the long-term sustainability aims of the City. The capacity building and skills development of community members will also continue. Sustainable schools program The sustainable schools program will continue in its current form with the aim of increasing participation by seven per cent (7%) per annum aiming for an overall target of 75% participation by 2018-19. School environment awards The schools environment awards will continue, providing opportunities to celebrate and formally acknowledge the achievements of our young people in undertaking sustainability practices. There are plans to introduce a new award, specifically for a project, arising from Council’s youth engagement activities Youth engagement The youth engagement program will continue in its current capacity, and Council will continue to host the Lake Macquarie Sustainability Youth Forum, providing opportunities for young people to actively participate in the future of their community. Environmental Sustainability Grants Program The grants program will continue, stimulating the ability of Lake Macquarie community groups to implement their own environmental sustainability projects and initiatives.

engagement strategies, ensuring opportunities for program and project improvement. The waste awareness campaign is not affected, as it is funded by the Domestic Waste Management Charge, which is not the subject of this application. Community ecosystem monitoring program This program will continue, further enhancing Council’s ability to undertake effective environmental planning, enabling continued Environmental Score Card reporting to the community on the state of the Lake Macquarie environment. Clean up Lake Macquarie Council will continue its existing level of support to Clean Up Lake Macquarie endeavouring to continue to increase the number of sites and the levels of citizen participation each year. In response to the demand from resident members of Sustainable Neighbourhood groups, Council will also have the ability to investigate including additional Clean Up Lake Macquarie days. Walk the talk engagement The staff engagement forums associated with Council’s Staff Sustainability Strategy’s policy agenda to integrate sustainability into all aspects of its operations will continue.

PROGRAM

Environmental Security Environmental Security program will continue delivery at current levels. Council will maintain its capacity to boost community preparedness for a changing environment and to address environmental pollution

ACTIVITIES

Natural disaster preparedness Actions to increase community awareness relating to floods, bushfires and severe storms) would continue to be implemented. Proposed activities include community engagement activities relating to floods, bushfires and severe storms in Dora Creek, Cardiff, Dudley and Cooranbong, and with vulnerable people in the general Lake Macquarie community. Flood risk management Council would continue flood risk minimisation programs, including:

• initiating new flood studies and floodplain risk management studies and plans for high priority catchments, including Winding Creek and Jewells Wetland;

• implementing recommendations of completed plans (e.g. Stony Creek, South Creek and North Creek), including planning and community education;

• installing urgent risk minimisation infrastructure recommended in flood risk minimisation studies and plans (e.g. flood warning systems and height makers and warning signage in high priority flood prone areas).

Climate change adaptation Council would continue to develop policy and actions for climate change adaptation including local area plans for vulnerable communities. This will significantly boost Council capacity to make timely decisions on new developments and enable effective community engagement with external stakeholders (e.g. ratepayers and developers) on climate change adaptation pathways. Environmental health Policy development and planning to reduce exposure to environmental pollution, including pollution from lead-contaminated black slag would continue. Current programs include community awareness and engagement activities about health risks posed by exposure to lead pollution, in particular the legacy of lead-contaminated black slag that has been deposited as landfill and landscaping and drainage base throughout Lake Macquarie. The immediate priority is developing a risk management system for black slag exposed areas on public reserves, including children’s playgrounds and sports fields. Modelling and monitoring of air quality and identifying potential health risks is another priority environmental health program.


PROGRAM

Monitoring and Reporting Current resources within the governance, administration and auditing area will be maintained and Council will continue to provide an effective program to monitor and report on the environmental performance of the City and its own operations.

3.7.2 Case study: Morisset contribution catchment

A demonstration of significant growth forecasts is provided by an analysis of projections for the

Morisset Contribution Catchment (see Figure 3.22), which is equivalent in geographical size to

the Blacktown City Council local government area.

Figure 3.22 - LGA – Morisset location plan

Over the next 15 years, it is estimated that the number of residents and workers will increase by

around 70%, with a 210% growth in non-residential building floor area (Table 3.25).

Table 3.25 - Morisset growth forecasts

Type of Development

Existing Development (Census 2006)

Projected Development by

2025

Total Projected Growth

Percentage of Projected Growth

Residential Population (within private dwellings)

20,786 persons 35,555 persons 14,769 persons 71%

Non-residential Development Building Area (gross floor area)

83,439 m2

(gross floor area)

258,808 m2

(gross floor area)

175,369 m2

(gross floor area)

210%

Workers from the non-residential development

3,622 workers 6,047 workers 2,425 workers 70%


The above outlines the existing and projected development for the Morisset Contribution

Catchment and the dramatic increases this will involve. Non-residential development includes the

following types of development: retail, commercial, industrial, tourism, hospitality, health,

education, and community services.

3.6.3 Future strategy for the Section 94 reserve

During the assessment process as detailed in Box 3.1, Council also put forward a program to

undertake a comprehensive review of contributions plans which was endorsed by the Local

Contributions Review Panel.

This review has commenced and will produce:

� 15-year development forecasts for both residential and non-residential (for example: retail,

commercial, office, and tourist) development.

� A detailed program of works to meet the needs of the:

- incoming community over the next 15 years, and

- existing community. An assessment will be undertaken to determine if there are sufficient

facilities and services to meet the needs of the existing community. Where an undersupply

of facilities is identified, Council will use the existing s94 contributions to help fund their

construction. For example, contributions already collected for sportsgrounds under existing

contributions plans will be used to construct sportsgrounds in areas where there are

insufficient sports facilities to meet the demands of the existing community.

� Timing of works identified in the works program

� A delineation of funds required from Council, to meet its part of the works schedule, and funds

to be provided by developers

A number of detailed background studies are required to complete the review of the contributions

plans. These studies include: development projections; open space, recreation and community

facilities study; and traffic and transportation study. Due to the high level of detail required,

separate studies are being prepared for each contribution catchment. The process to establish a

contributions plan includes public consultation and takes around 18 months to complete.

Council originally proposed to review the contribution catchment plans in late 2007. Unfortunately,

the State Government’s continuous shift in developer contributions policies over the past four

years has severely hampered Council’s ability to review and implement new contributions plans.

The change in policy direction has also made Council reluctant to expend large portions of

existing funds on projects (which meet the needs of both existing and future populations) without

assurances that Council would be able to continue to recoup contributions in the future.

It is expected that there will be insufficient Section (s94) contributions to fund all works to address

the undersupply of facilities, and Council will be required to fund a portion of the works (shortfall).

A shortfall arises due to a number of factors including:

� Sudden increase in construction costs, latent conditions, lending costs (if we forward fund

works) and land acquisition costs. This results in actual costs exceeding estimates used in the

development of s94 plans.


� Changes in yield capabilities from land. Council uses population projections and yield

projections to set the levy rates and if these are not met then insufficient funds will be collected

for the designated infrastructure. This can occur due to issues such as environmental

legislation, downturn in construction or change in housing style.

� Developer Contributions being limited to new demand. For example if the population of

Morisset increases from 20,786 to 35,555 over the next 15 years and an entirely new library is

required, developer contributions will only pay the proportion relating to the new population of

the cost of the new library. Whilst this is appropriate, it does result in Council having to find

additional funds for the construction costs of the new library.

In future, greater emphasis will be placed on the monitoring of development projections and the

corresponding delivery of the works program. As contribution plans are adopted by Council,

officers will:

� Incorporate the program of works identified in the contribution plan into Council’s Asset

Management Plans, to ensure the planning of maintenance and replacement. Where

upgrades to existing facilities are identified in the contributions plan, Council will consider the

use of asset replacement funds (for that component of the facility being replaced) to ensure a

better overall project outcome from the combination of funds.

� Integrate the works program into Council’s 10 Year Plan and Operating Plan.

� Annually review development projections and the timing of facility provision.

Council is comprehensively reviewing all s94 contribution catchment plans. The review will

consider development projections for the next 15 years and the facilities required to meet the

needs of the incoming residential and non-residential development. Council’s proposed timetable

to complete the reviews are attached as Supporting Document 3.18.

At the completion of the review of the five contribution catchment plans, Council will have a works

program in place that fully allocates the existing s94 contributions held by Council. Council will

actively work towards reducing the balance of the s94 reserve, however, it is reasonable that

funds will always be held at any one time.

Historically Lake Macquarie has experienced fragmented development patterns, and this is

anticipated to continue in the future. That is, Council anticipates development in all five

contribution catchments. Each of the contributions catchments are of significant size. For

example, the Morisset Contribution Catchment is 299 square kilometres, which is the size of the

entire Blacktown LGA. The most equitable way to financially manage s94 contributions is to

manage each contribution catchment as discrete entities, and cash flow works within a catchment

as opposed to across catchments. This approach also better reflects legislative requirements.

Funds will be progressively collected, however, expenditure will occur in large blocks at certain

thresholds of development. For example major traffic works, sporting facilities, and community

centres are required once certain development thresholds have been reached and they can cost

in the order of $3m to $4m per facility. If Council is collecting funds for just two major facilities in

each contribution catchment, it would follow that at any one time, around $40m would be held in

the s94 reserve. In addition, Council is often required to fund a portion of facilities identified in

s94 contribution plans, and Council often needs time to build up funds for its portion of the work.

Hence contributions build in the s94 reserve. Lastly, significant changes to developer contribution

policy over the past 4 years have severely hampered Council in the review the contribution


catchment plans and allocation of existing funds to projects. These factors explain why funds

are, and will always be, present in the s94 reserve.

A greater emphasis will be placed on a closer alignment between the receipt and expenditure of

s94 contributions to minimise the loss of real value, and improve service delivery to the

community. Whilst the financial model shows an increasing s94 reserve, this will actually reduce

to an appropriate level once the current s94 contributions have been allocated to projects, over

the next 7 years as actual projects are identified and programmed into the capital work budget.

This will mean a combination of expending total annual contributions, together with, a portion of

the current s94 reserve. It should also be noted, that annual contributions reflect development

trends and annual contributions can significantly vary from one year to the next. For example

Council received $3.6m in 2002/2003 which gradually climbed to $8.6m in 2008/09 before

dropping to $3.8m in 2009/10. This jumped up again last year with income reaching $9.1m.

Table 3.26 provides a summary of income and expenditure for the last three years. As detailed

above, once the review of contributions plans is complete expenditure will increase to reduce the

closing balance (reserve) to an appropriate level.

Table 3.26 - Historical income and expenditure

Financial Year

Opening Balance

($m)

Contributions Received

During the Year ($m)

Interest Earned

During the Year ($m)

Expended During

the Year ($m)

Closing Cash

Balance ($m)

2008/2009 $38.9 $8.6 $1.4 $4.4 $44.5

2009/2010 $44.5 $3.8 $0.3 $7.2 $41.4

2010/2011 $41.4 $9.1 $2.1 $6.0 $46.7

Where possible Council forward funds works in anticipation of future development. The following

major capital works are examples of completed projects where Council is recouping contributions:

� Morisset Multi-purpose Centre (costs $2.7m)

� Swansea Multi-purpose Centre and Library (costs $6.9m)

� Hillsborough Road Works (costs $4.3m, completed)


3.6.4 Cost shifting data

Table 3.27 - Details of cost shifting 2004/05 to 2009/10

Area 2004/2005 2005/2006 2006/2007 2007/2008 2008/2009 2009/2010

Total income before capital operations - 121,273,000 135,494,000 147,390,000 147,492,000 162,463,000

1 Contribution to NSW Fire Brigades 1,126,090 1,420,442 1,525,588 1,597,080 1,649,237 1,683,297

2 Contribution to Rural Fire Service 304,738 287,889 315,227 470,200 526,852 443,057

2a Contribution to NSW SES - - - - - 142,000

3

Pensioner rates rebates - net cost incurred (portion of rebates issued returned to Council in the form of a rebate) 2,008,000 1,966,000 1,938,000 1,961,000 1,983,000 2,022,000

4 Voluntary Conservation Agreements - - - - 2,000 2,604

5 Public Library Operations 3,246,384 3,097,093 2,710,134 3,032,539 3,586,537 3,644,688

6 On-site sewerage facilities 649,363 343,660 296,552 404,467 198,456 221,592

7 Companion Animal Act administration 381,771 346,262 186,812 314,567 332,647 578,337

8

Administration of Contaminated Land Management Act

(NSW) 14,000 14,383 14,814 14,842 18,790 19,927

9

Functions under the Protection of the Environment

Operations Act 218,403 180,643 178,915 208,233 69,321 78,232

10 Noxious Weed Cost 35,987 81,347 95,840 105,772 134,137 117,966

11 Rural Fires Act - check to see if this is not the entire RFS 60,000 65,000 70,000 75,000 80,000 85,000

12 Immigration services & citizenship ceremonies 9,899 9,619 13,750 12,132 11,370 7,756

13 Administering Food Safety Regulation 169,640 97,107 75,758 93,216 - 83,715

14 Provision of educational services 10,000 10,300 10,609 11,033 11,420 11,819

15 Community Safety 74,559 76,736 78,978 81,438 86,041 88,966

16 Flood mitigation program 19,644 16,477 14,907 21,733 16,009 10,775

17

Transfer of responsibilities for roads under RTA reclass

review - - - - - -

18 Medical Services - - - - - -

19 Road Safety 66,288 55,178 58,020 55,431 51,215 -

20 Community and Human Services 120,708 118,991 142,232 175,945 174,248 207,160

21 Waste Levy - 1,633,000 2,500,000 3,938,000 4,166,000 5,305,000

22 Sewerage treatment licence fee - - - - - -

23 Waste management site licence fee 10,180 4,180 4,180 4,180 4,252 3,360

24

Revenue limitations on Crown Land under Council

Management - - - - - -

25 Processing of development applications - - - - - 531,133

26 GST 7,731 7,963 8,202 8,465 8,849 9,382

27 Emergency Services 129,646 138,372 139,891 144,278 198,437 182,933

28 SEPPs - - - - 150,000 -

Total Cost Shifting 8,663,032 9,970,642 10,378,409 12,729,551 13,458,817 15,480,698


4 Community consultation

In this section, we demonstrate that we have consulted on the proposed special variation and that

we have gained community support for the proposal.

We have consulted the DLG’s Guidelines and IPART’s fact sheet on community consultation for

advice about how to approach community consultation and guidance about the need to conduct a

survey.

This section provides analysis of data collected via an independent phone survey, an online

survey, a postal ballot, and polling at community workshops. The analysis takes into account the

statistical validity of the various modes of feedback, responses to questions regarding affordability

of the proposed options, aspirations voiced and issues raised, and a comparison of the results as

they relate to varying levels of engagement undertaken.

In summary, Securing our Future was conducted over a six-month period in 2011. It comprised

three stages.

Figure 4.1 - Three consultation stages of Securing our Future June June June June –––– AugustAugustAugustAugustSTAGE 1UNDERSTAND WHAT WE VALUE

Community forumsHave your say online

Online budget tool

What do you value?

input informs

Stage 2

STAGE 2DEVELOP FUNDING OPTIONS

STAGE 3FIND THE RIGHT SOLUTION

Stage 1 report

Working group (24 community members)

considers options

Community panel(500-750 members)

considers options Community panel(500-750 community members)

September September September September – OctoberOctoberOctoberOctober October October October October – early Decemberearly Decemberearly Decemberearly DecemberCommunity pollsgather feedback

on preferredfunding option

What services are you

willing and able to pay for?

What levels of service

are best?

During Stage 1 of the consultation, a Levels of Service Review was undertaken. The process

provided Council with a baseline for current levels of service and an in-depth understanding of

current and future demand. It quantified the gap between current service levels and those the

community needs and expects, and identified the programs and initiatives that Council must

undertake to close the gap.

This information, along with the outcomes of prior consultative processes, was used to model

three different funding options during Stage 2. A detailed description of the three options is

presented in Table 2.5 in section 2.

During the third and final stage of Securing our Future, Council undertook an exhaustive program

of consultation, comprising telephone survey, postal ballot, on-line survey and electronic polling at


community workshops. Throughout the Securing our Future program, Council has employed all

of the mechanisms to assess community feedback set out in IPART’s Fact Sheet Community

consultation for special variation applications.

The feedback captured through the Securing our Future process demonstrated the community’s

demand and desire for enhanced services and new infrastructure, and its preparedness to pay for

these through rates evidenced by their support for Options 2 and 3. Council found that 72% or

respondents supported an increase to rates above the rate peg so that current levels of service

could be maintained and/or enhanced, with 50% of the 3257 respondents preferring the

enhanced services summarised in Option 3.

On 15 December 2011, the elected Council recognised this outcome with a unanimous vote to

endorse staff to make an application to IPART under section 508A the Act for a special rate

variation in accordance with the proposed increases and delivery program under Option 3.

4.1 The consultation strategy

In the section below, we have provided details of the consultation strategy undertaken by Council,

including the range of methods used to inform the community about the special variation proposal

and to obtain community feedback on this option (as per the application guidelines via ‘a survey,

focus group, online discussion, town hall meeting, newspaper advertisement or public exhibition

of documents’).

The information clearly identifies:

� key stakeholders in the consultation process

� the information that was presented to the community regarding the special variation proposal

� methods of consultation and why these were selected

� timing of the consultations (including exhibition of Draft Community Strategic Plan, Draft

Delivery Program and Draft Operational Plan as applicable)

We have attached relevant samples of the Council’s consultation material to the application.

Box 4.1 Does the council seek to renew or replace an expiring special variation?

Since we are seeking to replace an expiring special variation, we have clearly explained

this to the community. We explained:

� that there is a special variation due to expire during the time period covered by the

current special variation application, or the time period immediately before

� that, if the special variation were not approved (ie, only the rate peg were applied), the

year-on-year increase in rates would not be as high, or there would be a rates

decrease (whichever is applicable)

� if applicable, that the expiring special variation is being replaced with a permanent

increase to the rate base.


Lake Macquarie City Council has an ongoing program of community engagement for the

development of all our operational plans and delivery programs. The Securing our Future

consultation was undertaken with a view to seeking approval from IPART in 2012 for a special

rate variation over seven years (2012-2013 to 2018-2019) under section 508A of the Local

Government Act 1993.

The entire consultation program was conducted from April to November 2011, with consultation

on the three funding options completed on 30 November 2011 after a six-week period of

extensive community engagement (Stage 3).

4.1.1 The consultation process

In June 2011, Councillors endorsed the commencement of Stages 1 and 2 of Securing our

Future. In October 2011, Councillors endorsed the commencement of Stage 3, which involved

seeking feedback from the community about the three proposed funding options.

Stage 1: Understanding what we value

Stage 1 was used to further validate previous consultation regarding the levels of service Council

provides and gain a deeper understanding of the services the community value.

The consultation built upon the existing levels of community engagement undertaken during 2008

for development of the 10 Year Community Strategic Plan and 2011 Operational Plan, along with

Council’s annual Community Survey measuring customer satisfaction and importance.

Online survey

Stage 1 commenced in April 2011 with an online survey in which more than 2,000 respondents

provided feedback on the Council services they valued most, and indicated their level of

satisfaction with the full range of services Council provides.

The online survey, titled Residents Attitudes to Council Services and Facilities was conducted via

Council’s website from 28 April to 16 May 2011.

The survey was constructed by Essential Research in consultation with Council. A copy of the

questionnaire and the final report can be found in Supporting Documents 4.1 and 4.1.2. The

survey was hosted on surveyanalytics.com. A link to the survey was placed on the Council

website, a flyer on the survey was included in rate notices and the survey was publicised in

communications to various community groups.

The poll was open to people aged over 18 who have resided in Lake Macquarie City for at least

one year or who own property in the area but live elsewhere.

Community workshops

The online survey was followed by a series of community forums in July and September 2011

which also included a workshop for business owners and the elected Council. The workshops

were attended by more than 400 people across the three wards. At these forums the community

and business groups were given information about Council’s financial situation and the services

we currently provide. Participants were invited to identify which services they valued most, and


why. They were also asked to identify any services they would be prepared to see reduced in

order to achieve financial sustainability. Refer to Supporting Document 4.2 for the Stage 1

community workshop presentation.

Communications

Rates notice flyer

A rates notice was sent to Council’s 78,655 rate payers in June 2011 advertising the first series of

community workshops for Stage 1 and the launching of a Have Your Say website. The rates

notice issue was selected as an appropriate method of promoting the workshops as it was the

first for 2011 and was therefore received by all rate payers and in turn did not exclude those rate

payers who chose to pay their rates in full at the first notice and therefore do not receive a notice

for the remainder of the year. See Supporting Document 4.3 for a copy of the rates notice.

Newspaper

Paid advertising within the four major local newspapers was chosen as an additional method of

communication to ensure that the first stage of community workshops was widely communicated.

A copy of the paid advertisements is available in Supporting Document 4.4.

Council consultative committees

Established Council consultative committees were also engaged during Stage 1, with the

community workshop presentation shared with Council’s Community Advisory Group (CAG) and

the Lake Macquarie Youth Advisory Group (LMYAC).

Council established a CAG in 2009 as a way of getting community feedback into Council’s

Service Review. The CAG meet between 6 and 8 times per year. The CAG provides feedback to

Council on issues relating to Council operations.

The LMYAC was established in February 2009 and provides a voice for the young people of Lake

Macquarie area in dealing with Council's youth related issues. The LMYAC has a role in

assisting Council address the needs identified in the Lake Macquarie Youth Community Plan

2007 - 2011. Members of the LMYAC are aged between 12 and 24 years.

Have Your Say website

A Have Your Say consultation website, hosted by Bang the Table went live in August 2011, and

by October received over 2,000 visits and had 128 registered users. The website

(www.haveyoursaylakemac.com.au/securingourfuture) hosted an online forum, as well as a

Budget Allocator tool that enabled users to prioritise budget areas in which they wanted services

maintained or improved, and identify areas where they were willing to see a decrease.

Fact sheets

Three fact sheets were developed for the Securing our Future project to share information about

Council’s financial situation, our assets and services, and provide the community with some

further information about how Council is finding efficiencies in its operations. These facts sheets

were:


Information Sheet 1 – Services, Revenue and Expenditure

Information Sheet 2 – Sustainability, Efficiency and Enterprise

Information Sheet 3 – Assets

Fact sheets were made available on the Have Your Say website, distributed to Council’s libraries,

swim centres and family day care providers, as well as being provided at the first series of

community workshops held in the City in July 2011. Copies of the fact sheets are available in

Supporting Documents 4.5.1 to 4.5.3.

Stage 2: Developing budget scenarios

Stage 2 of Securing our Future saw development of three proposed funding options based upon

the feedback received during Stage 1. Stage 2 commenced in September 2011 and also included

further engagement and information to the community about Council services, along with the

engagement of a group of residents to provide specific feedback to Council on the development

of funding options.

Section 3 of this application contains the Levels of Service review process derived as a result of

Stage 1 consultation, and the full Levels of Service Review is available as Supporting Document

2.1 – Providing Enduring Value: Understanding our Community’s Preferred Level of Rates for

Service.

Deliberative Community Working Group

A Community Working Group of 24 randomly selected Lake Macquarie residents from the three

Council wards was established, and the group met on four occasions during September and

October 2011. This method was a deliberative approach designed to engage a representative

group in a dialogue and gain informed feedback from them about the three options.

The Deliberative Community Working Group (DWG) was recruited by Hunter Valley Research

Foundation on behalf of Lake Macquarie City Council in September 2011.

Community members were randomly selected through the White Pages and were asked to

participate in four meetings with Council officers across September and October 2011. The

intention was to have members be a representative sample of community members from across

age groups, across the three Council Wards as well as a mixture of property and business

owners and business and property renters.

24 community members were selected and due to the nature of the commitment required, (a

commitment to attend four meetings over two months) the group demographic profile was as

shown in Table 4.1:


Table 4.1 – Deliberative Community Working Group demographic profile

Characteristic Category Numbers

Age Group 18-25 2

36-40 1

41-45 1

46-55 6

56-65 2

66-70 1

71-74 1

75 + 4

Wards East 9

West 8

North 3

Gender Male 13

Female 6

Income (based on original 34 recruits (10 reserves))

Combined Household Income Before Tax

% of Respondents

<$50,000 p.a. 29.4

$50,000-$100,000 p.a. 47.1

>$100,000 p.a. 23.5

Total 100.0

Total number 34

Household Ownership Home owners 15

Renters 2

No business owners or business renters were able to be recruited for the group

The establishment of a Community Working Group was undertaken as a response to a

fundamental belief that a deliberative approach enables more informed and considered decisions

to be made.

Council also used the group to market test our messaging and to identify where the wider

community might need further information. To align with standard practice for market research

and community focus groups, members of the group were financially remunerated for their

participation.

A final report of the workings and outcomes of the Community Working Group is available in

Supporting Document 4.6. In summary, the group had a number of focus areas within each of

the four meetings, culminating in the group making a choice between the three funding options.

Community education and promotion strategy

Results from the online survey conducted in April, and results from the community forums

undertaken during Stage 1 of the community engagement process indicated that there was a

level of disengagement with types and levels of services provided by Council. In response, a

community education campaign was developed to inform the community about the Council

services they currently pay for.

Five Council ‘super users’ were identified and were asked to be advocates for Council -

essentially to be the voice and face of a campaign. These advocates were known to Council

through their involvement in groups like Landcare or the Sustainable Neighbourhoods group, or


their use of Council services like Family Day Care. These community members were not offered

any payment for their contribution.

Five videos were made of the advocates talking about their use of Council services. These

videos were posted online via Council’s YouTube website and included on the Have Your Say

website, and content from three of the videos were used in paid press advertisements. The press

advertisements, provided in Supporting Document 4.7, also included information about other key

Council activities.

Stage 3: Finding the right solution

Stage 3 of the community engagement program was aimed at both informing the community

about the proposed rate options and inviting them to express their preference.

Communications focused on Council’s financial situation and the impact of the proposed

increases, as well as the impact of proposed reductions or improvements in services. In all

mediums, a clear demonstration of how the three funding options will impact upon services and

assets was provided, along with information about the rate increases in both dollar and

percentage terms over seven years.

Information was also provided regarding the expiring special variation for environmental works

(which has come to be known as the Sustainability Levy) and how this will impact upon rates over

the coming years.

The consultation scope included ratepayers and renters, which is in line with Council’s charter

under the Local Government Act, to include all potential users of Council facilities and services.

To meet the needs of the diversity of people living in Lake Macquarie, Council’s consultation

strategy for Stage 3 involved providing many avenues for feedback. A mix of traditional modes

such as a postal ballot and phone survey were used, along with more contemporary and

deliberative approaches, such as stakeholder focus groups, electronic polling at community

workshops and an online survey.

The Stage 3 consultation was designed to gather feedback not only on a preferred funding option,

but on residents’ willingness and ability to pay for the proposed rate increases under each option.

In order to gain a representative sample of information at the end of the process, the same

questions were asked of participants in all four modes of engagement. Council also collected

demographic data for each method to enable analysis of responses and assess the extent to

which the sample was representative.

Feedback from the community captured via the telephone survey, online survey, postal ballot and

live polling at a series of 11 workshops across the City was captured and the results are provided

in Section 4.2 of this application.

Telephone survey

A telephone survey of a statistically reliable and representative sample of the Lake Macquarie

community on the three funding options was conducted by Hunter Valley Research Foundation

(HVRF) on behalf of Council.


HVRF aimed to recruit a sample of Lake Macquarie residents that could yield statistically reliable

information about the community’s perceptions of the need for an array of services that are

currently or could potentially be provided by Council, and the community’s response to options for

future Council rates and services.

Between 11 October and 23 November 2011 survey recruitment was undertaken, with the main

survey undertaken between 19 October and 24 November 2011.

The overall survey sample was structured to represent resident ratepayers, resident non-

ratepayers (renters) and business ratepayers. The sample was drawn at random from the White

Pages and Yellow Pages then cross-referenced to Council’s ratepayer database to identify

residential and business ratepayers.

HVRF carried out data collection using Computer Aided Telephone Interviewing (CATI)

technology, which is the most cost-effective technique available to achieve statistically robust and

representative data.

Survey participants were provided an information pack about services and the three funding

options to enable them to make more informed responses. The aim was to provide participants

with objective information about those options and their implications for service provision.

The survey sought participants’ preferred funding option and assessed both their willingness and

ability to pay for a rate increase. A complete copy of the HVRF survey and the information pack

sent to residents is available in Supporting Document 4.8.

Postal ballot

Australia Post was commissioned to deliver a 16-page Securing our Future information booklet to

all households (approximately 82,000 dwellings in Lake Macquarie), based on a list of postcodes

for all suburbs in the LGA. The booklet was delivered in the first two weeks of November 2011.

A ‘Funding Option Selection Form’ was included on the back page of the booklet and could be

returned reply paid, or dropped in to a Lake Macquarie City Council library by 30 November 2011.

This postal ballot collected demographic data (age, gender and postcode), and asked the two

following questions with the opportunity for comment: ‘Which funding option provides the most

appropriate level of service?’ and ‘Which funding option do you prefer?’ These questions were

consistent with those asked in the telephone survey, the workshops and online. A full copy of the

Securing our Future brochure is available in Supporting Document 4.9.

Online survey

An online survey was conducted via the Securing our Future consultation website

www.haveyoursaylakemac/securingourfuture. The survey was live between 2 and 30 November

2011.

The online survey collected demographic data (age, gender and postcode), and asked,

‘considering the impact on your rates and the impact on services in each of the three options,

which one do you most prefer?’. Again, these questions were consistent with those asked in the

telephone survey, the workshops and in the postal ballot.


Survey participants who chose Option 1 were asked under what conditions they would vote for

Option 2 or Option 3. Participants were also asked what information they had viewed or read

about Council services and the proposed rate increases and were invited to leave comments.

The online survey was promoted via Council’s existing registered users of

www.haveyoursaylakemac.com.au. At the commencement of Stage 3, there were over 400

registered users. At the end of the consultation period there were 1,154 registered users. The

registration rate of 24% of site visitors is one of the highest seen by the Bang the Table site

managers in over 500 consultation projects.

The survey was also promoted via Council’s website www.lakemac.com.au and electronically

through Council’s existing databases of around 4,000 contacts. Bang the Table managers

commented that the completion of 661 survey by 80% of registered participants was extremely

high, and again one of highest they have seen across all their online consultations.

Ads were placed in the Newcastle Herald, the Post, the Star and the Lakes Mail. Newspaper

advertising for the community workshops also included promotion of the Securing our Future

consultation website. A full copy of the Stage 3 online survey is available as Supporting

Document 4.10.

Electronic polling at community workshops

A total of 11 community workshops were held across the City in November 2011. The workshops

were designed to inform participants of Council’s financial situation and the intention to apply for a

special rate variation to address Council’s infrastructure backlog and regain financial

sustainability. The 2-hour workshops provided participants with detail of the three proposed

funding options and how each would impact on rates and service levels. The workshops also

provided participants with an opportunity for dialogue with Council, including question and answer

sessions, as well as interactive polling using keypads. Again, questions asked during the

workshop were consistent with those asked in the telephone survey, the postal ballot and online.

Similar to Stage 1, a workshop for business owners/operators was also held during Stage 3, with

invitations sent to the Lake Macquarie combined business chambers, and a paid advertisement in

the Hunter Business Members News, which is circulated to approximately 1,000 members.

The workshops were promoted through paid advertising in the Newcastle Herald, the Post and

the Star, on Council’s website and via the Have Your Say site. A full copy of the community

presentation for Stage 3 workshops is available as Supporting Document 4.11 and an example of

the paid advertising is available as Supporting Document 4.12.

The Stage 1 (and Stage 3) workshops were distributed across the LGA as shown in Figure 4.2.


Figure 4.2 - Consultation workshop sites for Stages 1 and 3

4.2 Outcomes from community consultations

This section provides a summary of the outcomes from Council’s community consultations.

This section also provides a summary of submissions received in response to the exhibition of the

Draft Operational Plan where they relate to the proposed special variation. The level of


community support for the proposal (including by relevant stakeholder group) and actions

proposed by the Council to address issues of common concern are also outlined below.

Stage 1: Understanding what we value

Community feedback provided through Stage 1 consistently confirmed that residents value a wide

range of Council services. Our roads and cycleways, domestic and commercial waste collection

services, environmental programs – especially land and foreshore management, park facilities

and playgrounds, and family day care were shown to be highly valued, with participants

consistently prioritising these services.

Many participants indicated they were reluctant to see cuts to services or a sale of Council assets

to achieve financial sustainability, and that they would be willing to pay more in rates if it meant

services and assets could be maintained or improved. As referred to above, a full report on

the process and results from Stage 1 of Securing our Future are outlined in Supporting Document

2.1 - Providing Enduring Value: Understanding our Community’s Preferred Level of Rates for

Service.

Online survey

A total of 2,121 respondents completed the survey, Residents Attitudes to Council Services and

Facilities. The overall confidence level for this survey was determined to be 95%.

By and large, residents supported increased spending on services they use more frequently and

decreased spending on services they use less often.

Essential Research compared respondents’ usage and satisfaction levels with their choices about

where Council could decrease or increase spending. There was a correlation between the

usage/satisfaction patterns.

The three areas from a selected list of services that respondents most commonly nominated as

those where spending could be reduced were cultural facilities (66%), the Tourist Information

Centre (58%) and halls and community centres (43%).

The three areas most commonly nominated from the given list of services as those where

spending should be increased if the Council has the opportunity are: cycleways and walking

paths (52%), parks, playgrounds, sports fields (51%) and natural areas (46%).

Roads and drains were regarded as the most important areas where Council spends public

funds.

In summary, the survey found that when given a list of ten areas where Council provides services

and facilities, respondents rated the following as the most important areas of spending:

Roads 92% rated this important/ very important

Drains 85%

Park, Playgrounds, Sport Facilities 75%

Environmental protection and

Enhancement programs 67%

City planning and development 66%


The areas least likely to be rated as important areas of spending are:

Halls and community centres 27% rate this important/ very important

Swimming Centres 40%

Economic development and tourism 51%

Libraries 57%


A Have Your Say website was established for Securing our Future. The site went live in July

2011 and is available at www.haveyoursaylakemac.com.au/securingourfuture. This dedicated

engagement site was established due to its ability to provide online moderated forums, polls, and

an array of reporting functionality not provided by Council’s existing website.

Notification of the website was sent to 246 registered users of Council’s Have Your Say site

which was established in 2010 for Council’s Waste Strategy consultation.

The site was further promoted via Council’s database of 4,000 strong community groups and

subscribers.

For Stage 1, the site contained an online forum which asked 3 questions:

1. What do you like most about living in Lake Macquarie?

706 page views 28 participants 40 comments

2. What does Council do best to contribute to your lifestyle in Lake Macquarie?

583 page views 27 participants 29 comments

3. What would you like to see Lake Macquarie City Council do more of to contribute to you

lifestyle?

1,844 page views 63 participants’ 159 comments

These questions were again designed to link back to what services and assets the community

value. Full results from the Stage 1 Have Your Say forum can be found in Supporting Document

4.13.

In summary, common services and assets participants valued included (not in order of priority):

� waste collection

� roads

� the natural environment, especially the lake and foreshore management

� environmental enhancement programs

� economic development (continued creation of jobs)

� parks, playgrounds and sports facilities

� footways and cycleways

� community centres


� family day care

� boat ramps and jetties

� libraries

� pools

� traffic facilities enabling free traffic flow

And services and assets participants wanted to see Council do more of included:

� footways and cycle ways

� upgrades to playgrounds

� upgrades to town centres

� boat ramps and jetties

� environmental works and programs

� traffic facilities including speed humps

� road repairs

� sport facilities

A series of Frequently Asked Questions were also developed for the website. These can be

found in Supporting Document 4.14.

Budget allocator

The Budget Allocator was available on the Have Your Say site from 15 September 2011 to 30

November 2011. There were 210 respondents to the Budget Allocator tool, with the majority of

respondents indicating that they wished to see existing service levels and budgets maintained.

While the tool was used primarily as an education tool to illustrate the complexity of balancing a

budget across different service areas, the comments and budget distribution preferences of the

respondents helped shape the three funding options.

A full report of the budget distributions by service area, and budget comments is available in

Supporting Document 4.15 and 4.16. In summary, participants indicated that they wanted to see

maintained or increased spending in footways and cycleways, transport infrastructure, roads,

kerb and guttering, drainage, playgrounds and sports fields, town centres and economic

development. There was a mixture of responses with regard to decreased spending levels, with

some participants indicating they wanted to see reductions in Council staff numbers, more user

pays services, and more diversified service levels for cultural services like libraries.

Community workshops

The workshop format was shaped around Council’s six focus areas as developed through the

Council’s Community Strategic Plan (see Tables 4.6 and 4.7). The areas are Caring for the

Community, Caring for the Environment, Roads, Urban and Economic Development, Transport

and Drainage, Civic Leadership, and Sport, Recreation and Culture. Workshop participants

identified which services they valued most and least from a list of service areas in each focus

area. The same workshop format was used with Council’s community Advisory Group (CAG) and


a similar format, with a focus on Urban and Economic Development, was used with the business

community. Supporting Document 4.2 and 4.3 contain a full list of Council’s focus areas and

services.

Table 4.2 - Community workshop outcomes

Focus Area Important Least Important

Caring for the Environment

� domestic and commercial waste collection and recycling services

� road and pedestrian areas sweeping and cleaning

� lake and foreshore management � fire mitigation/hazard reduction and

SQIDS

� bulk waste collection � Teralba Worm Farm � contract effluent removal services

and on-site sewerage management systems

� tree management on private land

Caring for the Community

� animal control and education � illegal dumping � food premises inspection and

registration � cleaning of public toilets, BBQ’S,

footpaths, and street sweeping in business districts

� aboriginal community liaison � youth services

� noise control � parking enforcement � traffic control � support to fire protection services

(rural fire services) � support to state emergency

services � crime prevention

Sport Recreation and Culture

� lake foreshore facilities � park facilities � beach and surf life saving services � public toilets � swimming centres and programs � libraries

� Lake Macquarie Games � Art gallery � cultural activities � Australia day festival � Carols by Candlelight � Lake Macquarie Performing Arts

Centre

Transport Roads and Drainage

� roads planning, maintenance, and replacement

� bridges and jetty planning, maintenance, and replacement

� road resurfacing, resealing and rehabilitation program

� drainage improvement program � traffic facilities improvement

program � footways and cycleways program

� sealing gravel roads program

Urban and Economic Development

� economic development support � development application

assessment and compliance � strategic land use planning

� town centre program � public cemeteries � building assessment and

compliance

Civic Leadership

� democratic government � donations and financial support


Table 4.3 - Community workshops (CAG) outcomes

Focus Area Important Least Important

Caring for the Environment

� domestic waste collection � commercial waste collection � bulk waste collection � waste recycling services � parks and public place waste

collection � community engagement to support

local sustainability initiatives � reducing environmental health

risks � lake and foreshore management � bushland management

� environment education programs � contract effluent removal and on-

site sewage management � road and pedestrian areas

sweeping and cleaning � reducing risks from natural

disasters � reducing risks from climate

change � tree management on private land � horticultural services

Caring for the Community

� aged and disability services � ranger services � food premises inspection and

registration � cemeteries management � environmental and public health

compliance

� aboriginal services � youth services � support state emergency

services � crime prevention

Sport Recreation and Culture

� sports structures and facilities � park facilities � beach and surf life saving � swimming centres and programs � libraries � art gallery

� public tree management � recreation and land planning

(sports facility strategy, master plans for parks and sports grounds)

� Lake Macquarie games � Australia Day festival � Carols by Candlelight

Transport Roads and Drainage

� footpaths � cycleways � local roads � bridges � kerbs and gutter � car parks � storm water quality devices � regional state roads (for other

levels of govt to provide)

� internal roads and car parks in public places

� road reserves � roadside litter collection


� development application assessment and compliance

� building assessment and compliance

� property certificates � developer contributions and

administration

� economic development support � town centre program � tourism and visitor centre � heritage conservation

Civic Leadership

� democratic government � donations and financial support

business workshop



� economic development support � town centre program � tourism and visitor centre

� property certificates � tourism and visitor services � heritage conservation

The LMYAC were asked by Council’s Youth Council Coordinator to develop a video that dealt

with what young people liked and disliked about living in Lake Macquarie. Following the video

screening, a workshop was undertaken with the group which asked them to extract some of the

key Council services identified in the video.


The groups value statements and their relationship to Council services arising from the video

included:

� I value the pool because I want to keep fit

� I value the libraries because they provide information, help with study and are peaceful

� Easily accessible and safe paths to encourage exercise in a lot of ways; cycling, being able to

walk places, walking the dog, etc

� A clean pollution-free ocean/lake can be so lovely and make a great place to hang out with

friends

� I value a good surface at the skate park so I don’t get injured

� I enjoy playing on good footy ovals. It makes the game better

Full results from the community workshops can be found in Supporting Document 2.1 - Providing

Enduring Value: Understanding our Community’s Preferred Level of Rates of Service.

Stage 2: Developing budget scenarios

Results from Stage 2 helped Council further understand community priorities, and the outcomes

from a Deliberative Community Working Group also helped shape the three funding options

presented to the community during Stage 3.


While a full report detailing process and outcomes from the Deliberative Community Working

Group is available in Supporting Document 4.6, when undertaking the workshop polling, 83.33%

(15 people) preferred Option 3, with 16.67% (3 people) preferring Option 2.

Stage 3: Finding the right solution

A total of 3,257 people responded to the opportunity to tell Council their preferred funding option,

with 72% supporting a rate increase beyond the annual rate cap set by IPART. The overall

outcome from all modes of feedback on the three options is:

Option 1: Maintain Rates – Reduce Services: 28%

Option 2: Increase Rates – Maintain Services: 22%

Option 3: Increase Rates – Improve Services: 50%

This result is consistent with the outcomes of Stage 1 of the Securing our Future consultation,

which found that many people did not want to see reductions to services or a sale of assets to

achieve financial sustainability – they would prefer to see an increase in rates in order that

services and assets can be maintained or improved into the future.

A breakdown of preferred option by feedback mode is shown in Table 4.4.


Table 4.4 - Preferred Option by Feedback Mode

Results

Feedback Mode

Number of Respondents Expressing a Preference Option 1 Option 2 Option 3

581 331 872 Postal ballot (Funding Option Selection Form)

1784 33% 19% 49%

210 83 368 Online survey 661

32% 13% 55%

89 251 188 Telephone survey 528

17% 48% 36%

1 1 3 Written responses 5

20% 20% 60%

37 50 192 Polling at workshops 279

13% 18% 69%

TOTAL 3257 918 717 1623

PERCENTAGE OF TOTAL RESPONSES

28% 22% 50%

Level of engagement

Analysis of the data (Table 4.5) shows that a more deliberative level of engagement resulted in

greater participant support for a higher level of rate increase. The results suggest that when

provided an opportunity to engage in dialogue about the issues and the potential solutions,

participants were more likely to select Option 3.

Table 4.5 - Polling results for deliberative processes

Results

Feedback Mode: Polling Number of

Respondents Option 1 Option 2 Option 3

0 3 15 Community Working Group 18

0% 17% 83%

1 2 13 Community Advisory Group 16

6% 13% 81%

0 0 7 Youth Advisory Council 7

0% 0% 100%

37 50 192 Community Workshops 279

13% 18% 69%

The phone survey

All respondents were asked the extent to which they agreed or disagreed that the current

services provided by Council (listed on an insert to the information package sent to them) are

good value for money for the rates or rent they pay now. The proportion of respondents who


agreed or strongly agreed is listed for each sub-group in Table 4.6. The results indicate that a

majority of all sub-groups perceived the current combination of services and rates in Lake

Macquarie as good value for money; a lower proportion of business ratepayers perceived current

rates as value for money than did other sub-groups, but this difference was not sufficient to be

significant.

Table 4.6 - Perception of current services and rates as value for money

Current Lake Macquarie City Council Services and Rates Are Good Value for Money?

% of Respondents Who Agree or Strongly

Agree

Resident Renters 77.4%

Resident Ratepayers 78.1%

Weighted Community Total 77.9%

Business Renters 74.2%

Business Ratepayers 61.7%

Total Business Operators 67.1%

Resident ratepayers and all business operators (renters and owners) were provided with specific

examples of how the proposed rates under Option 2 and Option 3 would apply to them in the first,

second and seventh years, including the average annual rate increase that would apply across

seven years. These respondents were then asked the extent to which they agreed or disagreed

that these amounts would be a reasonable price to pay for Option 2 and Option 3 separately.

They were also asked the extent to which they agreed or disagreed that they or their business

would be able to afford these rates.

The results of these questions are summarised in Table 4.7, which shows that a majority of all

sub-groups perceived Option 2 as both a reasonable price to pay and as affordable for them

personally or their business. There were no significant differences between sub-groups in their

responses to Option 2.

Table 4.7 - Phone survey results – reasonable/affordable

Business Operators Resident

Ratepayers Renters Ratepayers Total Proposed Rate

Increase

% Who Agree or Strongly Agree

% Who Agree or Strongly Agree

Option 2 - Reasonable 79.3% 82.9% 72.3% 76.9%

Option 2 - Affordable 77.1% 76.2% 68.1% 71.9%

Option 3 - Reasonable 56.3% 57.2% 38.3% 46.3%

Option 3 - Affordable 52.6% 48.6% 40.5% 43.9%


By contrast, Option 3 was seen as both reasonable and personally affordable by just over half the

residential ratepayers, while a minority disagreed or strongly disagreed that the rates under

Option 3 were reasonable (39.3%) or affordable for them (39.0%). Further, business renters on

balance saw the rates under Option 3 (and their assumed flow-on to business rents) as

reasonable but were evenly divided over whether they would be affordable for their business.

There was a significant difference between the perceptions of business ratepayers and those of

other sub-groups: the majority of business ratepayers (61.7%) disagreed that the rates under

Option 3 would be a reasonable price to pay. On balance, they also disagreed that Option 3

would be affordable for their business, although this was not significantly different from the

divided response of business renters.

All respondents were asked which option they most prefer, considering their situation and the

impact on services in each of the Three Options. The results are presented in Table 4.12 which

shows that Option 1 (the rate cap) is least preferred by the majority of respondents. Option 2

(increasing rates to maintain services at current levels) was the most preferred option – by just

under half of residents and just over 40% of businesses – while Option 3 was the clear second

choice among all sub-groups. There were no significant differences between sub-groups in the

distribution of preferred options.

Respondents were also asked about their second preference. Residential ratepayers who most

preferred Option 2 were most likely to nominate Option 3 as their second preference, rather than

Option 1. All other sub-groups were most likely to divide between Option 1 and Option 3 as a

second preference. The main objection to Option 2 or Option 3 cited by residents (renters and

ratepayers) and business renters was inability to afford the higher rates; for business ratepayers

the most common objection cited was that Council could be more efficient in its operations.

Conversely, residents most commonly cited ability to afford higher rates as the condition on which

they would vote for the higher rate options. Business renters were equally likely to cite ability to

afford higher rates or unwillingness to vote for higher rates under any circumstances, while over

half business ratepayers who did not prefer either Option 2 or Option 3 would not vote for higher

rates under any circumstances.

Table 4.8 - Rates option most preferred by respondents

Residents Business Operators

Renters Rate-

payers Weighted

Total Renters

Rate-payers

Total Preferred Rates Option

% of Respondents % of Respondents

Option 1 - Reduce Services - Maintain Rates

8.1% 17.2% 15.0% 14.3% 23.4% 19.5%

Option 2 - Maintain Services - Increase Rates

51.6% 46.2% 47.5% 48.6% 40.4% 43.9%

Option 3 - Improve Services - Higher Rates

40.3% 34.3% 35.8% 34.3% 31.9% 32.9%

DON'T KNOW / CAN'T DECIDE

1.5% 1.2% 2.9% 4.3% 3.7%

REFUSED 0.8% 0.6%

TOTAL 100% 100% 100% 100% 100% 100%

Number of Respondents 124 396 520 35 47 82


NOTE: The survey data presented in this report has been weighted for resident respondents only

to reflect the proportion of renters (residential non-ratepayers) and owners (residential

ratepayers) reflected in the 2006 Census. A broad-based survey of the community can be

weighted to match the most recent Census data, to ensure that the overall results can be

generalised to the community as a whole.

The data for business respondents (renters and ratepayers) was not weighted, as there were no

reliable data on which to base weighting, and the results from these respondents are not included

in any ‘whole community’ results.

Weighting does not alter the distribution of responses within respondent types. Tests of statistical

significance were applied to unweighted data for comparisons between residential renters and

ratepayers; and to the weighted total data for residents and unweighted data for businesses for

comparisons between residents and business operators.

As part of the HVRF survey, all respondents were asked to rate the importance to them of 26

types of Council services. Results largely confirm results from Stage 1 where waste services

were seen as clearly the most important type of service provided by Council, across all

respondent groups. Roads planning and Maintenance were also highly ranked. Eighteen of the

26 service types were rated as important or very important by a majority of residents, and 17 by a

majority of business operators. The order of priority differed very little between renters and

residential ratepayers, although there were some significant differences in the degree of

importance between these groups. As might be expected, and is consistent with Stage 1 of

community engagement, there were considerable differences between residents and business

operators, with businesses giving relatively less priority to issues such as energy and water

saving and environmental security and relatively more to development and assessment, tourism

and land use planning. Table 9 of the HVRF Report (Available in Appendix 4) further articulates

the importance of services provided by Council as a result of the telephone survey.

Statistical validity

The statistical validity of the various survey methods is fully explored in Section 3 of Supporting

Document 2.1 – Providing Enduring Value.

The initial overall data collection reflects a demographically significant sample. For example, in

addition to the statistically valid phone survey, the sample size of total respondents to the postal

ballot was 1,920 (includes non respondents), and from a population size of 200,849, this yields a

confidence level of 95% with a ±2.23% margin of error.

The high-level summary of the responses across all the survey types is given in Table 4.9. Note

that the table is a mathematical analysis, and not a statistical or a weighted analysis.

While a full copy of HVRF report on Council’s telephone survey can be found in Supporting

Document 4.8, it can be summarised that statistical significance of the telephone survey was

measured at the 95% confidence level. There were 540 completed interviews from 725 recruits.

This sample size of more than 500 yields a sample variation of ±4.5% at a confidence level of

95%, given a response probability of 50%.


In the unweighted sample of residents, 13.5% of respondents were renters and 86.5% were

ratepayers (residential property owners); while in the sample of business operators, 42.7% of

respondents were renters and 57.3% were ratepayers (business property owners).

Table 4.9 - Rates option most preferred by respondents

Confidence Level

Survey Method

Option 1 Option 2 Option 3 None No

Response Total 95% 99%

Face-to-Face

37 50 192 0 7 286 margin-for-error

5.79%

7.62%

12.94% 17.48% 67.13% 0.00%

2.45%

Slips 581 331 872 0 136 1920 margin-for-error

2.23%

2.93%

30.26% 17.24% 45.42% 0.00%

7.08%

Online 210 83 368 0 0 661 margin-for-error

3.81%

5.01%

31.77% 12.56% 55.67% 0.00%

0.00%

Letter - Mail In's

1 1 3 5 not statistically valid

na na

na na na

**Phone 73 215 161 6 3 458 margin-for-error

4.57%

6.02%

Residents 15.94% 46.94% 35.15% 1.31%

0.66%

**Phone 16 36 27 3 0 82 margin-for-error

10.82%

14.24%

Business Owners

19.51% 43.90% 32.93% 3.66%

A full report on the outcomes of community consultation is also provided in Supporting Document

2.1 – Providing Enduring Value.

Online engagement

Client Liaison for Local Government at Bang the Table, Ray Scanlan, provided Council with the report below following the conclusion of the Securing our Future engagement site.

Table 4.10 – Have Your Say report summary

Site Visitation

3503 individual visitors visited the project

7,446 site visits were made indicating an average of two visits by each visitor

a total of 18,456 pages (forums, polls, survey and news articles) were opened by the 3503 individual visitors

Participation

833 or 24% of individual visitors registered to participate in the project, completing and/or submitting:

o 661 surveys o 80 quick polls o 226 comments, 611 agrees and 144 disagrees to posted comments


o 213 Budget Allocator scenarios

Access to Information

733 document were downloaded from the project

1,964 copies of The Securing our Future booklet were accessed and opened from the project.

223 videos were downloaded and viewed from the project

1,141 news articles posted on the project were viewed by project visitors

Comparative Analysis

We would characterise this consultation as one that has been extremely well promoted and has attracted a crowd.

The registration rate of 24% of site visitors is one of the highest we have seen in over 500 consultation projects.

The completion of 661 survey by 80% of registered participants is extremely high and again one of highest we have seen across all our online consultations.

The 213 responses to Budget Allocator is one of the higher response rates we have seen for this tool.

Summary The community have responded well and there is clearly interest in Council services. The rate and nature of responses in the forum indicate there is interest but not widespread community outrage or antipathy towards Council, far from it, there is a very positive tone to many contributions. With this number of participants, community outrage would most likely have provoked significantly more comments. A reasonable comparison would be a consultation conducted by Lismore City Council in 2010. This is described in a case study on our blog: http://corporate.bangthetable.com/2010/05/07/best-practice-at-lismore-city-council/ This consultation attracted over 1300 comments from 1800 unique visitors (half the participants and 5 times the comments of the Lake Macquarie consultation). This was a community that was expressing disquiet with a rates increase.

This project clearly showed a well planned approach to community consultation and a high level of community interest and engagement. We would like to congratulate Council on the results that have been achieved here. We hope that as well as viewing these overview statistics, many of the views and ideas expressed in the forums and surveys will have added value to Council's processes.

Submissions received in response to Draft Operational Plan

The public exhibition of the revised 2009 – 2013 Delivery Program incorporating the draft 2012-2013 Operational Plan and Budget and the draft 2012-2013 Fees and Charges coincided with Stage 3 of Securing Our Future.

The exhibition ran from 22 October 2011 until 20 November 2012 and resulted in three external submissions and 10 internal submissions. Of the submissions received, nine related to the Fees and Charges, and four to the 2009 – 2013 Delivery Program incorporating the Operational Plan. No budget submissions were received. Council officers have categorised and summarised all submissions and these are available in Supporting Documentation 4.18.

Issues raised and how they have been addressed

While the results of Stage 3 indicate strong community support for a rate variation, Council also

received feedback about issues of concern to the community and has taken steps to address

these. Issues raised and addressed include:


� Although Council has a 97% collection rate for rates payments, the consultation highlighted

that the community would like Council to do more. In relation to feedback, Council’s hardship

policy is currently under review and has been submitted to Council’s REPOL Committee

(Council’s Policy Review Committee) and to Council (REF:11 RE019). Rates payment

arrangements have also been extended to allow rates to be paid in monthly instalments. Rates

can also be paid via BPAY in a timeframe convenient to the ratepayer, provided the balance is

paid by the due date. These changes will make it easier for people experiencing hardship to

budget and manage cash flow.

� The need for Council to operate in an environment of continuous improvement with

appropriate performance management and reporting mechanisms. This will ensure the

community can readily see that revenue received from a rate increase is being spent

appropriately and is achieving the desired outcomes.

� The need for Council to continue to ensure that its entrepreneurial activities are appropriate for

a local authority, and that Council continues to operate with low financial risk.

Analysis and case for Option 3

Council officers have considered the above data from all engagement sources and reiterate that

Option 3 is the preferred option because:

1. The overall data from the four sources indicated a preference for Option 3 of 50%.

2. There was significant variation in the way participants voted across the different feedback

modes. A comparison of the telephone survey results with those from more deliberative

processes such as the community workshops, as well the overall results, suggests that the

comparatively limited level of engagement provided to phone survey participants was a

factor in their choice of option, and although the majority of phone survey respondents

preferred Option 2, this was only 11% more than those who chose Option 3. Residential

rate payers, who selected Option 2, were also most likely to select Option 3 as their second

preference rather than Option 1.

3. The difference between Option 2 and 3 is an additional $0.34 per week on average for

residential and an addition $2.14 per week on average for business ratepayers.

Results from the community engagement program have confirmed what many of the elected

Councillor’s stated during the 4 October 2011 meeting of Council, that ‘Option 1 is not an option’

because it does not reflect the values and priorities of the majority of the community.

Support for Option 3 confirms that a large proportion of the community would like to see

infrastructure not only better maintained, but improved, and would be willing to pay more in rates

to enable this to happen. This again confirms the community’s goals and aspirations as captured

in the 10 Year Community Plan.

Conclusion

In conclusion, extensive community consultation has been undertaken to gauge support for a

special rate variation. The consultation program has been carried out over a 6-month period and

included multiple avenues of involvement and collaboration with stakeholder groups and the

wider community.


Over 70% of a representative sample of the community has indicated that they support a rate

increase above the anticipated rate peg of 3%. Option 3, which seeks a rate increase as outlined

within the recommendation, received 50% support from the community, and provides Council with

financial sustainability while providing the community with improved levels of service and assets.

As outlined in the following Section 5, economic indicators for the City show that there is both

community and business capacity to pay the rate increase. Council has, however, recognised the

need to continue improving its payment assistance policy to meet the needs of those who may

experience genuine financial hardship.



Table 4.11 - Summary of stakeholder consultation

STAGE 1: JUNE–AUGUST 2011

Stakeholder Objective Tools Timing Audience Reach

Summary of Outcome

To understand what our community values by way of services

Online survey

28 April to 16 May 2011

2121 Increase spending in: � roads � drains � park,

playground, sport facilities

� environmental protection

� city planning and development

Advertise community forums

Rates Notice

Sent to all rate payers in first quarter June 2011

78,655 rate payers

N/A

1. Communicate Securing our Future project

2. Find out what services our residents value

3. To educate residents about Council services, financial situation, Council services and assets through fact sheets

4. Promote community forums


Website for Stage 1 launched in August

By October 2011, site had over 2,000 visits with 128 registered users

Common services and assets valued included: � waste collection � roads � natural

environment � economic

development � parks,

playgrounds and sports fields


� community centres

Lake Macquarie Community

To promote community workshops

Paid Advertising

Newcastle Herald - 16, 20, July Star - 20 July

Newcastle Herald – Readership Mon-Fri 122,000 Sat. 183,000

400 attendees at workshops




Summary of Outcome

Lakes Mail - 21 July Post – 20 July

Post 139,700 circulation Star -114,800 circulation Lakes Mail - 27,500 circulation

To share information about Council’s financial situation and workshop values

Community Workshops

18, 26 July – 28 July

400 attendees Services most valued: � waste and

recycling collection

� roads � healthy natural

environment (especially the lake and foreshore)

� creation of employment

� libraries

To share information about Council services, assets and financial situation

Fact Sheets

Placed on BTT website. Distributed to 10 Council libraries, 6 Swimming Pools, Family Day Care providers

533 downloads between August and October

N/A

To share information about Council’s activities and refute media statements

Media Opinion Piece by General Manager and Mayor

23 June – An open Lake Council has nothing to hide 5 August – Mayor’s op ed – Lean machine can’t afford to be mean.

Newcastle Herald Readership Mon-Fri 122,000 Sat. 183,000

N/A




Summary of Outcome

To share information about Council’s activities and the Securing our Future engagement program.

Mayors Column

11 MAY – balancing budget and operational plan

22 JUNE – results from service review

27 JULY – info on forums

45 page views 47 page views 67 page views

N/A

Business Operators and tenants

Promote Council’s forum for business community To share information about Council services, assets and financial situation

Lake Business (Magazine) Email to Council’s business database Business forum

1800 print Circulation, 500 electronic circulation 500 15 Business representatives from combined business chambers of Lake Macquarie

Services most valued: � Development

application assessment and compliance

� Economic development support

� Town centre program

Tourism and Visitor Centre

Councillors Provide Councillors with update on financial situation, Securing our Future engagement program

Councillor Informationsessions

14 June

11 July

Councillors attended the session

Councillors provided statements around what they wanted from the consultation process

Interest Groups Promote Have Your Say website and advertise Stage 1 community forums

Email to Council databases

20-25 July Sustainable Neighbourhood groups – 923 Community organisations – 905 Lakemac Ezine – 2000 subscribers Have your Say subscribers - 297

Council Committees

Community Advisory Group (CAG)

Provide CAG with an update on Council’s

Stage 1 community workshop

25 May - presentation and

21/25 CAG members attended the

Examples of services rated as most important:




Summary of Outcome

financial situation and introduce the Securing our Future engagement program. To find out what services are valued.

presentation

discussion about Council's draft 2011/12 operational plan and budget 29 June - Council's levels of service 17 August Securing our Future. Presentation and values workshop

workshop 16/25 CAG members attended workshop 17/25 CAG members attended workshop

� domestic waste collection

� aged and disability services

� sports structures and facilities



Youth Advisory Group (YAC)

To find out what services the YAC values

YAC produced video – What we like and not like about living in Lake Macquarie

14 September

11/16 YAC members attended the workshop

Examples of services valued include: � pools � libraries � parks and

playgrounds � natural

environment

Media To inform community about workshops and Council operations related to Securing our Future Results from first community workshop

Media release Media Release

24 July – Lake residents start talking about Council services 26 July 22 August - Council’s financial report card

Refer to media summary in Supporting Document 4.19

STAGE 2: SEPTEMBER – OCTOBER 2011


Outcome


To engage community on Council services

Paid Advertising

Newcastle Herald - 10, 14, 17, 21, 24 November

Newcastle Herald Readership Mon-Fri 122,000 Sat. 183,000

N/A




Outcome

To engage community on Council services

Have Your Say website and YouTube videos

Videos launched September

223 Total downloads

N/A

To engage representative group of residents on development of funding options

Deliberative Community Working Group (DWG)

Four meetings across September and October 1.Tuesday 20 September 2.Thursday 29 September 3.Tuesday 18 October

24 randomly selected Lake Macquarie residents

Council amends hardship policy. Funding Options change to reflect feedback ie. More money on cycleways. Full report of CWG can be found in Appendix 4.

Councillors To provide Councillors with an update on the engagement program and the development of funding options. To seek endorsement from Councillors to go to Stage 3 of Community engagement with funding options To provide Councillors with more financial breakdown of the three funding options

Councillor Information session Extraordinary Council meeting Councillor Workshop

Monday 26 October Tuesday 4 October 31 October

Elected Councillors attended the session Elected Councillors attended the meeting Elected Councillors attended the meeting

Councillors voted in favour of taking 3 proposed funding options to Stage 3 of community engagement

Council staff To engage staff on development

Staff information session

6-7 September

Staff numbers not recorded for briefing

Staff informed of ongoing consultation




Outcome

of options and provide detail of three proposed funding options

process

Media To communicate rate options and commencement of Stage 3

Media release 29 September – Council consider three rate options


STAGE 3: OCTOBER – DECEMBER


Outcomes

16 page Securing our Future brochure with mail in slip

Mailed out via Australia Post for receipt between 1 November and 11 November

Mailed to all Lake Macquarie households

1784 returned slips Option 1- 33% Option 2 – 19% Option 3 – 49%

Online survey via Have Your Say

Online poll launched XX November

661 Option 1 – 32% Option 2 – 13% Option 3 – 55%

Paid advertising

Newcastle Herald - 5, 12 November Star - 2 November Lakes Mail – 3 November Post – 2 November

Newcastle Herald – Readership Mon-Fri 122,000 Sat. 183,000 Post 139,700 circulation Star -114,800 circulation Lakes Mail - 27,500 circulation

Community Workshops

9-22 November

279 Option 1 – 13% Option 2 – 18% Option 3 – 69%


1. To communicate the 3 proposed funding option

2. To advertise the Stage 3 workshops

Statistically Valid

Commenced 19 October

528 Option 1 – 17% Option 2 – 48%




Outcomes

Community Survey with information pack

and completed by 24 November

Option 3 – 36%

Council website

New banners advertising booklets, forums, and online survey

Page views: 504 Visits: 364 Securing our Future - Information Booklet (since 26/10/2011): 229 hits

N/A

Social media Twitter feeds Facebook

15 September 22 September 26 September 9 November 16 November 22 November 28 November 3 August 15 August 14 September 26 September 18 October 8 November 14 November 25 November 30 November

1315 followers 150 followers


4.Tuesday 25 October

24 randomly selected Lake Macquarie residents

Option 1 Option 3 Option 3

Business Community

To communicate increases to business rates and promote business workshop

Business Workshop Hunter Business Review

The Glades, Warners Bay Wednesday 23 November 6pm-8pm

8

Option 1 – 48% Option 2 – 28% Option 3 – 28%

Councillors Demonstrate community workshop and

Councillor Workshop

17 November Elected Councillors attended the




Outcomes

survey briefing

Council Committees Community Advisory Group Youth Advisory Group

Groups to have their say on the three funding options

Workshop 26 October date

17/25 Option 1 – 6% Option 2 – 12% Option 3 – 81% Option 1 – 100% Option 2 – 0% Option 3 – 0%

Media Inform community on closing date to have their say Inform community on results of community engagement Inform community on results of Council meeting

Media release Media release Media Release

16 November 12 December 15 December



BOX 4.1 EXPIRING SPECIAL VARIATION – SUSTAINABILITY LEVY As outlined above, Council clearly communicated to the community that there is a special variation due to expire during the time period covered by the proposed rate increase period of seven years. The Sustainability Levy which was introduced in 2009 is due to expire in 2013/14 and the impact of this expiring levy was communicated via the 16 page Securing our Future brochure that was distributed to all Lake Macquarie households, was available via the Have Your Say website library of documents and was made available at the community workshops. The consultation material communicated that, if the special variation was not approved (ie, only the rate peg were applied), the year-on-year increase in rates would decrease following 2013/14. Likewise, it was communicated that that the expiring special variation will be replaced with a permanent increase to the rate base should Council’s application for a Special Rate Variation be approved.


5 Rating structure and the impact on ratepayers

Council has completed the worksheets in Part A of the application which will provide the

information and calculations underpinning the proposed rating structure, the impact of the special

variation and average rate increases.

5.1 Proposed rating structure

In the section below, Council provides a detailed explanation of the proposed rating structure for

the variation under two scenarios – the proposed rating structure if approved and the proposed

structure should it not be approved.

5.1.1 Ordinary rates

The proposed rating structure contains the four primary categories of ordinary rate being:

� Farmland � Mining

� Residential � Business

The structure does not contain any sub-categories.

The rating structure for the residential category is based on a combination of a base amount of

rate and an ad valorem (amount in the dollar) component. The level of the base amount has

been set to achieve 50% of total rate income from this category, with the ad valorem component

raising the remaining 50% of the total income.

The rating structure for the business and mining categories is based on a combination of a base

amount of rate and an ad valorem component. The level of the base amount has been set to

achieve 2% of total rate income from each category, with the ad valorem component raising 98%

of the total income.

The rating structure for the farmland category is based on a combination of a base amount of rate

and an ad valorem component. The base charge for this category is set the same as the base

amount for the residential category, with the ad valorem component being set at 70% of the ad

valorem component in the residential category.

The above rating structure is outlined in the Financial Management section of Council’s

Operational plan 2011-12 and is consistent a Statement of Revenue Policy.

5.1.2 Base amount

Council has determined the base amount for all categories in terms of Section 536 of the Local

Government Act, 1993. In an attempt to provide a fair and equitable rating structure, particular

importance has been placed on the following criteria:

� The degree of congruity and homogeneity between the values of properties subject to the rate

and their spread throughout the area


� Whether a rate that is wholly an ad valorem rate would result in an uneven distribution of the

rate burden because a comparatively high proportion of assessments would bear a

comparatively low share of the total rate burden

5.1.3 Categorisation of land for rating purposes

Land has been categorised for rating purposes in accordance with Sections 515 to 519 of the

Local Government Act, 1993.

The categories of residential, farmland, mining and business apply to the whole of the Council

area.

The same rating structure will exist under both scenarios for the period of the variation.

5.1.4 Special Rates

It is not proposed to levy any special rates under either scenario. The Sustainability levy is not a

special rate as it is included in the ordinary rate.

5.2 Impact on rates

Council levies rates on the four categories of the ordinary rate, being Residential, Farmland,

Business and Mining. There are no special rates included in either the current or proposed rating

structures.

Table 5.1 shows the cumulative impact on average rates, for each category, of the proposed

special variation over the 7-year term of the proposed variation.

Table 5.1 - Cumulative impact on average rates

Average Rate

2011/12 ($)

Average Rate

2018/19 ($) Increase ($) Increase (%)

Farmland 1,622.09 2,662.99 1,040.90 64.17%

Residential 949.33 1,569.56 620.23 65.33%

Mining 31,122.47 58,077.67 26,955.20 86.61%

Business 3,283.67 6,151.70 2,868.03 87.34%

The table above shows that increase for the Residential and Farmland categories, although being

substantial, is significantly lower than the increase for the Business and Mining categories. This is

a deliberate strategy, as it is considered that the Business category should be contributing a

greater proportion of total rate income. This strategy was developed when comparing Council’s

rating structure with other Category 5 Councils and other similar sized Councils.

Table 5.2 shows average rates for each of the rating categories over the term of the proposed

special variation, and the impact of the increase in average rates above the rate-pegging amount

for each category.


Table 5.2 - Difference in average rates by rating category

Residential

2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19

Increase with Special Variation ($)

1,042.78 1,143.93 1,214.62 1,308.76 1,403.64 1,498.39 1,569.56

Rate Peg Increase Only ($)

983.92 1,013.44 1,015.26 1,045.72 1,077.09 1,109.40 1,142.69

Difference ($) 58.86 130.49 199.36 263.04 326.55 388.98 426.88

Farmland

2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19


1,769.23 1,940.85 2,060.79 2,220.50 2,381.49 2,542.24 2,662.99


1,669.34 1,719.42 1,722.52 1,774.19 1,827.42 1,882.24 1,938.71

Difference ($) 99.89 221.43 338.27 446.31 554.07 660.00 724.29

Business

2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19


3,758.05 4,284.18 4,695.03 5,117.58 5,501.40 5,872.75 6,151.70


3,416.11 3,518.59 3,521.76 3,627.41 3,736.24 3,848.32 3,963.77

Difference ($) 341.94 765.58 1,173.27 1,490.17 1,765.17 2,024.42 2,187.93

Mining

2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19


35,479.42 40,446.54 44,325.36 48,314.64 51,938.24 55,444.07 58,077.67


32,242.68 33,209.96 33,239.85 34,237.04 35,264.16 36,322.08 37,411.74

Difference ($) 3,236.74 7,236.58 11,085.51 14,077.60 16,674.09 19,121.99 20,665.92


5.2.1 Projected growth in assessments

It has been assumed that the number of rateable properties will increase by 400 annually, over

the period of the special variation. This is consistent with the actual increase in the number of

rateable properties over the past five years.

5.2.2 Minimum rates

Does the council have minimum rates? Yes No

If Yes, provide details of the proposed increase in minimum rates and the proposed share of

ratepayers on the minimum rate for the relevant category, with and without the special variation.

5.3 Community’s capacity to pay proposed rate increases

The capacity of ratepayers (in each sub-category) to pay for the rate increases is outlined below.

Supporting information includes, for example, discussion of affordability measures such as SEIFA

rankings, land values, average rates, and assumption on disposable incomes, and outstanding

rates ratio. It could also include comparisons with peer group councils.

5.3.1 Residential ratepayers

The Lake Macquarie community is well placed to pay the proposed rate increases. This is due to

the following factors:

� The median weekly household income for Lake Macquarie is one of the highest within its

group of Councils

� Comparatively high levels of employment

� The average residential rate per assessment for Lake Macquarie is currently below that of the

average for its group of Councils

� The average business rate per assessment for Lake Macquarie is substantially below that of

the average for its group of Councils

� The median rent (weekly) and housing loan repayments (monthly) are equivalent to the

average of its group of Councils

� With higher incomes, and average rent and housing loan repayments, households in Lake

Macquarie would enjoy higher levels of disposable income than other Councils within its group

� Lake Macquarie has the lowest outstanding rates and annual charges ratio within its group of

Councils, and is significantly lower than that of the NSW average

� The SEIFA data for Lake Macquarie indicates that Lake Macquarie is the least disadvantaged,

and has the highest level of economic resources than all of the other Councils within its group

� The feedback from the community consultation overwhelmingly indicates that Lake Macquarie

residents are willing to pay increased rates to maintain or improve levels of services.


Social economic profile of Lake Macquarie

Lake Macquarie is the largest LGA in the Hunter Region. In 2006, the median age of persons in

Lake Macquarie was 40, up from 35 years in 1996. There are 4,297 Aboriginal or Torres Strait

Islander persons living in Lake Macquarie. This represents 2.3% of the population, the second

highest percentage of the population in NSW. However, Lake Macquarie has very low numbers of

people from a culturally and linguistically diverse background, with just 6.8% of its population

speaking a language other than English at home.

Lake Macquarie is one of the largest coastal salt water lakes in the southern hemisphere, with the

lake geographically dividing the City. The eastern side of the Lake consists of more densely

populated older urban areas, whereas the western side comprises scattered communities, some

of which are semi-rural and isolated. The northern region is a mix of densely populated older

suburbs and small townships.

Income

In 2006, Lake Macquarie had the equal highest proportion of households with an above average

income (over $1,000 per week) of all LGAs within its group (see Table 5.3). This is also reflected

by the fact that Lake Macquarie LGA has one of the highest levels of median income of all LGAs

within its group. Conversely 23% of all households in Lake Macquarie LGA had a low weekly

household income ($0-$499 per week), which is the lowest percentage of all LGAs within its

group.

Table 5.3 - Comparison of income levels by LGA

Weekly Household Income

Lake Macquarie

LGA

Newcastle LGA

Wollongong LGA

Tweed LGA

Coffs Harbour

LGA

Shoalhaven LGA

Up to $499 23 25 25 28 27 29

$500-$999 24 24 22 29 29 29

$1,000 - $1,999 29 28 27 25 26 24

$2000+ 13 13 15 7 7 7

Incomplete Information

11 11 11 11 11 11

Total (%) 100 100 100 100 100 100

Median Income ($) $922 $885 $933 $683 $706 $659

(Source: 2006 Census)

Employment

Lake Macquarie LGA enjoys a high level of employment. In the September quarter of 2011, the

proportion of Lake Macquarie residents who were unemployed was 4.16%. This was the lowest

of all LGAs within its group (Newcastle – 4.62%, Wollongong – 6.85%, Tweed – 6.16%, Coffs

Harbour – 6.67% and Shoalhaven – 7.94%). Source: Department of Education, Employment and

Workplace Relations: Small Area Labour Markets September Quarter 2011, Average Rates

The 2009/10 Local Government comparative data shows that the average residential rate per

assessment for Lake Macquarie is $854.75. This is lower than that of the average for its group of

Councils, which is $864.83. In addition, the average business rate per assessment for Lake


Macquarie ($3,057.92) is substantially lower than that of the average for its group of Councils

($5,041.89).

Table 5.4 outlines the number of Lake Macquarie residential properties and the rateable value in

which they fall.

Table 5.4 - Number of Lake Macquarie residential properties by rateable value

Rateable Value Number of Properties

$0 to $99,999 6,803

$100,000 to $149,999 14,602

$150,000 to $199,999 22,367

$200,000 to $299,999 21,589

$300,000 to $499,999 6,909

$500,000 to $999,999 2,267

$1,000,000 to $1,999,999 254

$2,000,000 and greater 27

Housing and housing Costs

As shown in Table 5.5, the dwellings in Lake Macquarie are predominately separate houses, with

fewer flats, units or apartments than stand alone houses. Lake Macquarie has a high proportion

of residents who fully own their dwellings (38.6% compared to 32.6% for Australia and 33.2% for

NSW) and a low proportion of people who are renting. The median rent (weekly) and median

housing loan repayment (monthly) for Lake Macquarie households is significantly below that of

NSW, and is equivalent to the average of its group of Councils.

Table 5.5 - Median rent and housing loan repayments

Council Median Rent

($/weekly) Median Housing Loan

Repayment ($/monthly)

Lake Macquarie 185 1,300

Newcastle 195 1,300

Wollongong 180 1,517

Tweed 210 1,300

Coffs Harbour 180 1,170

Shoalhaven 165 1,200

Average for Group 5 councils 186 1,298

NSW 210 1,517


Disposable income


The Australian Bureau of Statistics (ABS) defines disposable income as gross income minus

income tax liability, the Medicare levy and the Medicare levy surcharge. Whilst data on levels of

disposable income is not available at a LGA level, the findings from the ABS Survey of Income

and Housing (2009-10) reveal that households in higher income deciles have higher levels of

disposable income.

Housing costs will also affect a household’s disposable income, with higher housing costs

reducing a household’s disposable income. Housing costs for Lake Macquarie households are

equivalent to the average for its group of Councils, and therefore, increase Lake Macquarie’s

standing within its group with regards to levels of disposable income (Wollongong who have high

levels of income have a significantly higher median housing loan repayment than Lake Macquarie

and the group average, which would reduce their household’s levels of disposable income).

Outstanding rates and annual charges ratio

The level of a Council’s outstanding rates and annual charges ratio also provides evidence of a

community’s capacity to pay a proposed rate increase, with a lower ratio indicating a better

capacity to pay.

Table 5.5 provides a comparison of outstanding rates and annual charges with other Councils.

The outstanding rates and annual charges ratio for Lake Macquarie in 2009/10 was 3.2%, which

is the lowest of its group of Councils, and significantly lower than the New South Wales ratio of

5.3%, and 4.9% for urban and coastal councils. Furthermore, Lake Macquarie City Council has

had the lowest ratio within its group for many years (since at least before 2000).

Table 5.6 - Outstanding rates and annual charges ratio

Council 2009/10 Outstanding Rates and Annual Charges Ratio

Lake Macquarie 3.20%

Newcastle 5.7%

Wollongong 5.91%

Tweed 7.22%

Coffs Harbour 5.65%

Shoalhaven 7.25%

Average for Group 5 councils 5.75%

Average for NSW 5.3%

(Source: DLG Comparative Information 2009/10)

SEIFA Index of disadvantage and economic resources

The Socio-Economic Indices for Areas (SEIFA) provides a numerical score to describe different

aspects of the socio-economic conditions of people living in an area. A higher SEIFA score

indicates that the area has lower levels of disadvantage compared to other areas


The Index of Relative Socio-economic Disadvantage is derived from Census variables related to

disadvantage, such as low income, low educational attainment, unemployment, and dwellings

without motor vehicles.

The Index of Economic Resources focuses on Census variables such as income, housing

expenditure and assets of households.

In 2006, Lake Macquarie LGA had a SEIFA Index of 996 for Disadvantage, and 993 for Economic

Resources. This is higher than the scores for other LGAs within its group (refer Table 5.7), and

indicates that residents of Lake Macquarie have lower levels of disadvantage and higher levels of

economic resources than the other Councils within its group.

Table 5.7 – SEIFA index comparison

LGA SEIFA Index of Disadvantage

SEIFA Index of Economic Resources

Lake Macquarie 996 993

Newcastle 983 961

Wollongong 984 979

Tweed 966 976

Coffs Harbour 964 956

Shoalhaven 964 965


With high levels of income, average housing costs, low levels of disadvantage and higher levels

of economic resources than the other Councils within its group, the Lake Macquarie community is

well placed to pay the proposed rate increases. This is also reflected in the very low outstanding

rates and annual charges ratio that Lake Macquarie has had for many years.

In the statistically valid phone survey undertaken for Council as part of the community

consultation for the special rate variation, specific questions around affordability were asked.

More than three quarters of residential ratepayers and business renters agreed that current rates

in Lake Macquarie are good value for money, and saw Option 2 as both a reasonable amount to

pay and personally affordable. Just over half of residential ratepayers and business renters saw

Option 3 as a reasonable amount to pay, and just on half saw it as affordable.

70% of business rate payers saw Option 2 as reasonable and affordable, with around 40% taking

this view of Option 3.

Refer to Section 4 - Community Consultation for more detail on Council’s community engagement

results and HVRF’s final report in Section 4 of supporting documentation.

5.3.2 Business ratepayers

The City of Lake Macquarie has a population of over 200,000, the largest city in the Hunter, 4th

most populous in NSW and in the top 7% of Australia for population growth. The Lower Hunter

Regional Strategy identifies Lake Macquarie as a growth area with population expected to grow


by 60,000 between 2006-2031 creating demand for 36,000 new dwellings and 12,200 new jobs, a

driver for business in Lake Macquarie.

Currently the City has over 12,000 businesses (not all rateable businesses) offering a range of

industry, with approximately 2,000 new entrants to the market each year.

The City has one of the lowest unemployment rates in the Lower Hunter of 4.2% down from 4.6%

12 months ago, and a growing labour force of some 104,594 up from 101,176 in the same period

last year (latest figures as of September 2011).

The diverse industry base helps to shield the City from economic crisis (GFC), by reducing our

exposure to negative external shocks, less volatile growth and economic cycles. Leading

industries as a proportion of employment include the health/social assistance, retail trade, and

manufacturing industries. The City has experienced strong growth in the health, community

service, and construction industry and a move toward smart business with growth in the

knowledge and technology-based industry continuing to strengthen diversity of local industry.

The local economy also attracts between 700,000 to 1,000,00 visitors per year including day-

trippers and weekenders, providing revenue to local business throughout the year (not just on a

seasonal basis).

Table 5.8 illustrates the increases that have occurred during the past thirteen years from 1997 to

2010 with regard to business growth:

Table 5.8 - Business and employment growth from 1997-2010

Attribute Total Change 1997 to 2010

% Change

Floor Space Increased by 242,989 m2

Increase of 187%

Number of Extra Businesses Increased by

254 Increase of 124%

Full Time Extra Employment Increased by

4,913 Increase of 218%

Part Time Extra Employment Increased by

6,514 Increase of 233%

(Source: Lake Macquarie Town Centre Analysis 2010)

The City has also experienced some development hotspots aiding business start-ups and

employment growth including the GPT redevelopment at Charlestown of around $470m creating

4,400 jobs during construction and post-construction. Morisset is another emerging regional

centre anticipated to provide 1,600 new jobs, 600 new dwellings and a major focal sub point for

subregional and transport networks servicing a number of districts. Glendale another emerging

regional centre has recently received NSW State Government funding for the development of

roadworks and bridges to facilitate the development of the Lake Macquarie Integrated Transport

Centre, making Lake Macquarie the hub of the Hunter region.

Proposed development within the Glendale area estimate 712 full time jobs per annum being

created in construction and 10,092 ongoing jobs created over a 16-year period. (Lake Macquarie

Integrated Transport Centre Economic Impact Study, May 2011).


Currently the Cardiff/Glendale area generates 16,000 jobs and is one of the largest employment

zones in the Hunter region.

Demand for industrial land in the City has been strong over the past decade with uptake of land

averaged at 16ha per annum. Cameron Park and Cardiff are just two areas attracting leading

industry from EDI rail, AmpControl and a range of electronic and manufacturing industries. The

Cardiff industrial area, for example, has a total dollar value of some $331,000, which is

approximately $144 per square metre.

Lake Macquarie business benefits from a convenient location on the F3 two hours from Sydney’s

International Airport, 25 minutes to Newcastle Airport, access to the Main Northern Railway Line,

and with export opportunities to Newcastle Harbour. This location provides accessibility and a

buffer to reduce increasing transportation costs for business due to the close proximity of the City

to major transport links.

Business capacity to pay v multispeed economy

The local economy of Lake Macquarie is showing signs of resilience against the backdrop of

general global uncertainty and impacts of the multispeed economy related to the high Australian

dollar and relatively tight monetary and fiscal settings.

Recent economic indicators for Lake Macquarie including the unemployment and labour force

figures for June 2011, together with the diverse industry base and signs of resilience in some of

the non-resource trade exposed areas including food services, professional, scientific, technical

services and manufacturing support this notion.

Importantly, long-term sustainability of the local economy cannot rest upon one sector, and

should be considered in policy and decision making. This includes the promotion of innovation

and well-directed infrastructure investment to help improve business confidence in the future.

Local business is still optimistic and whilst the labour market remains strong, the local economy is

in a position to support a rate increase as shown in Table 5.9 (particularly when local business

rates are benchmarked against comparable LGA’s).

Table 5.9 - Comparisons of business rates paid - Lower Hunter

Council Total Business Rate 2010-11 Average Rate Per Assessment

Lake Macquarie $11,098,250 $3,235

Newcastle $33,244,745 $7,054

Maitland $7,133,182 $4,336

Port Stephens $6,399,582 $3,622

Cessnock $4,781,955 $3,179

Newcastle’s base rate, subject to approval will increase a further 5% for the 2012/13 year plus the

rate cap provision.

Maitland has raised rates an additional 7% on top of the rate cap for 2011-12.


This would indicate that businesses in Lake Macquarie are currently paying the second lowest

levels in average rates in the Lower Hunter, just slightly higher than Cessnock. In terms of our

adjacent commercial/industrial land competition Maitland average commercial rates are 43%

(adjusted for 7% increase this year) higher than Lake Macquarie and Newcastle 118% higher per

average commercial rate.

Council rates for most businesses represent less than 0.5% of turnover so are not a major cost

determinant. The Average business turnover in the City is estimated at $750,000 (ABS TABLE

8165.0). Variations in building leases/strata charges or mortgage interest rates play a more

significant role in business costs than Council rates.

Council has received letters of support from the Lake Macquarie Combined Business Chamber

and the Executive Committee of Business Charlestown Inc. (The Charlestown Chamber of

Commerce). Both letters expressed their support for Option 3 based upon the considerable

benefits it provides to the City as a whole. The town centre upgrades and economic development

activities to be undertaken by Council were specifically cited as providing benefit to the City’s

business owners and residents alike.

While the Committee recognised the financial pressures currently being applied to small business

(such as increased electricity, insurance and wages costs) they remained of the opinion that the

current and future benefits meant that the proposed increases under Option 3 were acceptable.

A letter of support was also received from Tourism Hunter, expressing support for a rate increase

under Options 2 or 3 and stating that:

‘Tourism is a major economic driver for the Hunter worth $1.5B to the economy annually and

employs approximately 25,000 people in the region. In regards to Lake Macquarie, tourism

generates approximately $362m from 1,000,000 domestic visitors per annum who stay an

average of 2.5 nights and spend on average $145 per day …The rate increase will ensure that

tourism can continue to contribute significantly to Lake Macquarie’s economy, now and in the

future.’

Supporting Document 5.1 – 5.3 includes copies of the above letters of support.

Rate increase benefits

Option 3, in addition to Town Centre Program funding provides additional funds ($7m over 7

years) to upgrade the physical appearance of town centres. This will enhance the amenity and

ambience allowing the centres to grow and provide ongoing employment and services to local

ratepayers and residents.

5.3.3 Outstanding rates ratio

Council has a 97% collection rate for rates payments, which would appear to indicate that Council

rates in Lake Macquarie are affordable and that Council has successfully adopted measures to

assist ratepayers experiencing difficulty in meeting their rate commitments.

Council’s outstanding rates and annual charges, as detailed in the Comparative Information on

NSW Local Government Councils, have consistently been 3% or better in recent years. This

compares favourably to both the category average and the overall State average.


5.4 Addressing hardship

Does the council have a Hardship Policy in place? Yes No

If Yes, the council must attach a copy of the Policy. Yes No

Does the council propose to introduce any measures to limit

the impact of the proposed special variation on vulnerable

groups such as pensioners? Yes No

Prior to 2011, Council addressed its hardship provisions through its debt recovery policy. In

2011, Council introduced a new Hardship Policy that dealt specifically with providing assistance

to ratepayers experiencing genuine financial hardship. Forms of assistance detailed in this policy

include providing alternative payment arrangements, writing off interest in certain cases where

arrangements are adhered to, and in the case of pensioners, allowing rates to accrue as a debt

against their estate where they are unable to meet their rate liability for financial reasons.

The Hardship Policy was developed in mid 2011 in recognition of Council’s need to provide a

more specific course for cases of genuine financial hardship that required respect and

compassion to those in special circumstances.

The policy established guidelines for assessment of hardship applications, applying the principles

of social justice, fairness, integrity, appropriate confidentiality, and compliance with relevant

statutory requirements. The policy applies to all applications for waiving, deferment and

alternative payment arrangements, or writing off rates, fees, annual charges and interest accrued

on such debts.

The policy provides a framework for responding to applications from owners/ratepayers and

customers experiencing genuine financial hardship with the payment of their rates, annual

charges and fees in accordance with the Local Government Act, 1993 and the Local Government

(General) Regulation 2005 (NSW). Confidentiality and privacy is maintained in accordance with

the NSW Privacy and Personal Information Protection Act 1998.

As a result of feedback from Stage 2 of the Securing our Future community consultation, the

Hardship Policy was renamed the Payment Assistance Policy. This change was implemented

because both the Community Working Group and Council’s Community Advisory Group

recommended that the name ‘Hardship’ may deter some members of the community from taking

up the policy as they may not want to admit to ‘hardship’. Council have renamed the policy the

Payment Assistance Policy in line with some utilities and government agencies.

In accordance with a revised Payment Assistance Policy, and again in response to feedback from

Stage 2, Lake Macquarie ratepayers now have the option to pay their rates via direct debit on a

monthly basis where previously yearly or quarterly instalments were required. This measure was

adopted as it assists people with budgeting and is more in line with salary cycles.

A copy of Council’s Payment Assistance Policy is available as Supporting Document 5.4.


6 Financing strategy

In addition to justifying the Council’s proposed expenditure under Criterion 1, councils seeking a

special variation must demonstrate that they have considered the use of all available financing

options to address capital expenditure requirements. The Council’s financing strategy must be

both sustainable and consistent with the principles of intergenerational equity. Refer to DLG’s

Guidelines for an explanation of the concept of intergenerational equity.

6.1 New capital financing strategy

Our strategy to fund new capital works is based on a mix of rate revenue, developer

contributions, fees and charges, existing reserves and borrowed funds. Full detail of the funding

of our proposed new capital works for each of our three options is contained in Supporting

Document 3.15. These supporting documents include detail on the mix of loan funds and other

funding sources for new capital works. Commentary for each of the three options, also available

in Supporting Document 3.15 which outlines the impact these borrowings will have on our critical

indicators.

Our internal accounting procedure ensures that we may only use borrowed funds for the

purchase, or construction of an asset where the term of the loan borrowings must be at least as

long as the life of the asset the funds have been used to purchase or create.

Debt is an important and legitimate component of the funding of capital works and services in

local government. Our level of debt needs to be maintained at acceptable levels to ensure the

financial sustainability of the organisation.

It is also important to distinguish between debt for community purposes and debt for

entrepreneurial purposes. For example, as per Council’s Internal Accounting Procedure

mentioned above, it is appropriate within acceptable parameters to borrow money for community

capital works at a loan term which is similar to the life of the asset. This will ensure that

community members who benefit from the asset actually pay for the use and benefit of this asset

as their rate payments fund loan repayments. This is consistent with the principles of

intergenerational equity. In relation to borrowing for entrepreneurial purposes, the borrowings

should only be undertaken if it is considered there will be a net financial benefit to Council

associated with the borrowings.

Supporting Document 3.15 (as referred to above) outlines the proposed level of borrowings over

the term of the requested rate variation for each of our scenarios and the impact these

borrowings will have on the Debt Service Ratio. The level of debt we propose is able to be

readily repaid by future operating revenue without putting undue financial pressure on Council.

6.2 Sustainability of debt

Does the council propose to undertake any borrowings over the

period of the special variation? Yes No

If Yes, what is the purpose of these borrowings and do they link to the special variation

application?


If No, why is the council seeking a special variation, rather than undertaking borrowings?

As identified in Table 6.1, Council proposes to borrow funds in each year of the application with

loan funds for various capital works. Our Accounting Procedure will only permit the use of

borrowed funds to be used for the construction or purchase of capital works with a useful life of at

least the term of the loan funds.

Table 6.1 - Proposed borrowings over proposed rate variation

Project Description 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19

Administration Building 0 126,567 0 0 0 0 0

Depot 20,540 0 216,641 556,226 0 0 0

IT & IM Strategy 600,000 500,000 500,000 500,000 500,000 500,000 500,000

Plant Replacement Program 2,210,000 550,000 1,650,000 1,940,000 1,925,000 2,570,000 1,100,000

New Plant Program 795,350 104,803 130,000 40,000 0 0 0

Waste Strategy 3,400,000 0 0 0 0 0 0

Community Facilities 896,850 530,197 287,301 285,193 293,219 877,958 298,350

Roads 58,799 60,617 62,350 64,135 65,973 67,866 69,816

Vehicle Crossings 32,032 32,922 33,798 34,699 35,625 36,578 37,559

Minor Capital Works 174,194 177,658 181,504 185,478 189,253 192,843 196,494

Investigations - Contaminated Soil 32,400 34,344 36,405 38,589 40,904 43,359 45,960

Seal Gravel Roads 806,797 823,486 842,197 861,503 879,621 896,660 913,962

Kerb & Gutter Program 866,649 894,073 921,761 951,987 980,046 1,006,121 1,032,562

Construction of New Roads 5,103,684 106,889 5,109,944 113,091 116,332 119,670 123,108

Construct New Drainage Works 1,983,827 1,756,313 1,838,778 2,161,182 2,234,515 2,433,919 2,469,583

Construction of Traffic Facilities 1,390,643 1,419,229 1,450,509 1,482,770 1,513,825 1,543,771 1,574,255

Construction of Footways and Cycleways 1,483,548 1,510,063 1,539,493 1,569,858 1,598,697 1,626,129 1,654,012

Hunter Sports Centre - Capital Works 48,000 48,000 48,000 48,000 48,000 48,000 48,000

City Landscaping - various projects 1,908,214 1,933,591 1,959,890 1,986,982 2,013,809 2,040,483 2,067,846

Recreational Facilities 1,332,188 563,474 1,024,465 755,636 1,191,993 448,540 455,283

New Park Signs 40,478 41,631 42,814 44,019 45,762 46,921 48,091

Parks Improvement Program 1,110,547 903,962 1,829,880 1,779,126 1,297,636 5,681,120 1,574,777

Fernleigh Track 88,760 89,021 9,270 9,526 9,790 10,062 10,342

Swimming Centres 646,500 236,000 8,285,000 3,930,000 6,800,000 410,000 0

Beach Facilities 130,000 137,160 0 72,000 0 0 0

Library Services 0 0 0 300,000 3,600,000 3,500,000 0

Art Gallery 0 100,000 0 300,000 0 2,000,000 025,160,000 12,680,000 28,000,000 20,010,000 25,380,000 26,100,000 14,220,000

Table 6.1 outlines the proposed purpose and amounts of proposed borrowings over the period of

the proposed variation. All borrowings, associated interest, and principal loan repayments are

linked to our LTFP, including the associated impact on operating costs, including depreciation.

Our financing strategy identifies annual borrowings over loan terms of 25 years to ensure we

apply the principles of intergenerational equity. The strategy ensures the ratepayers who benefit

from the capital works actually pay for this service by spreading the loan repayments over the life

of the assets constructed or purchased. The borrowings are also set at amounts that ensure our

debt service ratio does not exceed our pre-determined upper limit of 8.5%. Borrowings are

therefore at financially acceptable levels having regard to our ability to repay the debt without

undue financial pressure being placed on the Council or current ratepayers. The borrowings have

also been determined at levels which provide debt service ratios that are well below the

“satisfactory” levels identified by the Division of Local Government of < 10%.

The graph at Figure 6.1 indicates the prudent, and appropriate use of debt by Council over time,

ensuring that borrowings in the past, and projected into the future (for our preferred Option 3),

consistently deliver a debt service ratio below 8%, which is below the level deemed by the

Division of Local Government as “satisfactory” (<10%).


Figure 6.1 - Council debt service ratio under SRV scenario (Option 3)

Debt Service Ratio

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

00/01

01/02

02/03

03/04

04/0505/0

606/0

707/08

08/0909/1

010/1

111/12

12/13

13/14

14/15

15/16

16/17

17/18

18/19

19/20

20/21

21/22

Year

%

Option 3

NSW State Average (09/10)

LMCC Target

“The Division’s accepted benchmark for the debt service ratio is <10% ‘satisfactory’, 10% to 20% is fair, and >20% could be of concern, when considered with other financial indicators” Source - Snapshot of NSW Local Government , Comparative Information on NSW Local Government Councils 2009/10


7 Productivity improvements and cost containment

strategies

Faced with the cumulative impact of rising service costs and increasing cost pressures from

Federal and State governments, Council anticipated a significant funding shortfall and took

decisive steps to address its immediate and long term financial sustainability. These steps

commenced four years ago.

Before seeking any increase to rates, Council has made significant efforts to help fund service

needs by identifying productivity improvements, cost saving initiatives and revenue

enhancements across all areas of its operations.

At the Extraordinary Council Meeting of 15 December 2011, in tandem with passing the resolution

to apply for the rate variation, Council acknowledged the importance of keeping costs down, and

endorsed the General Manager to continue to implement ongoing reviews of service delivery

efficiency and report on those annually, prior to consideration of the annual budget.

In line with this commitment, over the next seven years Council will implement a Business

Excellence Framework to drive continuous improvement and allow internal and external

benchmarking of efficiency and effectiveness of our operations.

Lake Macquarie City Council has already implemented a culture of continuous improvement, the

results of which are evident in the Division of Local Government’s comparative figures. As

detailed in Section 3.3.10.5 – Reducing or Containing Operating Costs, for 2009/10 expenses per

capita from continuing operations were below the average for NSW councils, our staff per middle

manager was the highest when benchmarked against seven other like councils, and our average

employee cost per capita remained the lowest of all councils in our grouping. Figure 7.1

demonstrates that Lake Macquarie has the lowest number of middle managers per staff of all

seven like councils, with a middle manager to staff ratio of 1:60.

Figure 7.1 - Staff (FTE) per ‘middle’ manager

22

53

19

55

42

60

0

10

20

30

40

50

60

70

Cof

fs H

arbo

ur

New

castle

Shoalha

ven

Twee

d Hea

ds

Wollo

ngon

g

Lake

Mac

quar

ie


Despite the fact that Council is already comparatively lean in its operations, we undertook a

comprehensive Service Review during 2009 to 2011 which identified more than $4.2m in ongoing

savings, achieved through cost reductions, efficiency gains and increased income. Significant

yearly savings will be realised through changes to purchasing practices ($2.4m), savings in

landfill airspace consumption ($780,000) and efficiencies in small plant hire ($400,000).

During the period of the review, other key improvement initiatives were undertaken, including:

� an evaluation of the major management systems and core processes across the organisation

� staffing cost reductions achieved through better management of staff leave, including time in

lieu, long service leave and annual leave

� cost reductions in staffing achieved through the amalgamation of the Records Operations and

Records Governance departments, and the withdrawal of joint funding for a Road Safety

Officer position, saving $150,000 per annum

� efficiencies in management of Council assets, enabled through an audit of community facilities

and public toilets and development of a Public Toilet Strategy and Community Facilities

Strategy

� a review and planned restructure of Council’s communications section.

The two most promising sources of new income and efficiency gains over the period are Council’s

Property Investment Strategy, projected to yield $6 to 7m per year over five years, and the

proposed Sustainable Resource Centre, projected to save an estimated $1.28m per year from

2016/17. Both potential revenue streams have been included in Council’s LTFP.

While the outcomes and projections to date are pleasing, they do not provide a sufficiently stable

nor adequate source of funds to meet current and future service and infrastructure needs in Lake

Macquarie.

In many cases, the service review identified key opportunities that require more in-depth analysis,

before critical decisions on levels and standards of service can be made. Much of this work is

included in Council’s Asset Management Plans and will ultimately assist in determining

appropriate levels of service for the various asset classes. If analysis demonstrates that new

opportunities are viable, they will be incorporated into Council’s normal budgeting processes and

taken into consideration when setting future budgets and pricing policies. Long-term actions will

be considered as part of the 4-Year Delivery Program and further community consultation will

occur throughout this process.

7.1 Recent productivity improvements

“In my many years of researching local government reform I have not experienced as comprehensive a review process.”

Professor Brian Dollery, Centre for Local Government University of New England Bottom-up Internal Reform in Australian Local Government: The Lake Macquarie City Council Review Process

During 2009-2011, Council undertook a thorough review of all its services, with the fundamental

aim of addressing financial sustainability, whilst continuing to provide an appropriate level of

service to the Lake Macquarie community.


As part of the Service Review, a series of multidisciplinary internal project teams worked across

operational areas to identify and develop productivity improvements and cost reductions. External

focus groups complemented the internal project teams, with an external reference panel providing

further professional and independent input into the review process. (see Supporting Document

7.1 – Service Review Process).

The process saw each individual council service reviewed with reference to the objectives and

targets set out in Council’s 10-Year Community Plan, 4-Year Delivery Program, and Annual

Operating Plan. Reviewers also considered the implications of existing policies, procedures,

plans, and other documents relating to that service.

In addition, staff were also encouraged to identify entrepreneurial activities to generate additional

income for Council. Shared service opportunities and partnering arrangements, such as Public-

Private Partnerships (PPPs) and community and commercial ‘arms-length’ entities were and

continue to be investigated. By utilising existing resources and capacity within departments,

Council identified opportunities to contract a number of services (fee for service) to other smaller

local councils, government agencies, and business entities. Prior to proceeding with any of these

opportunities, a thorough feasibility assessment was conducted to ensure internal capacity and

core business remained unaffected.

Examples of entrepreneurial activities include:

� Shared Service and contract arrangements

- Planning and Building Services – successfully completed two contracts with two

neighbouring councils

- Property Management – undertaking valuation work for other councils

- Safety Services – submitted proposal to two smaller neighbouring councils

- Metal Fabrication – feasibility assessment complete and business plan under

development

- Lakemac Print – completed a number of contracts for local councils across NSW

- Customer Call Centre – although unsuccessful in two tenders, Council is continuing to

investigate external opportunities

� Partnering arrangements

- Lake Macquarie Performing Arts Centre – Partnership between Friends of the Regal and

Screen Hunter Central Coast to provide a series of arthouse films in September 2011

- Property Management – Investigating a joint development (PPP), within the Warners Bay

town centre

- Community Banking - Partnering with Bendigo Bank, to investigate the establishment of a

number of community banks within the City

- Surf Clubs – Working with individual surf clubs to identify ways to increase their revenue

and ultimately become self sufficient

- Swim Centres – Investigating the viability of a PPP for Charlestown Swim Centre


The calculated ongoing cost savings resulting from the review for the period 2009 to 2011 are

detailed in Table 7.1. The table indicates the type of improvement, whether it be a cost saving,

efficiency gain or income gain.

Table 7.1 - Service review outcomes achieved

Improvements Achieved During the 2009 – 2011 Period

On

go

ing

On

e-o

ff

Exp

en

ditu

re

Red

uctio

n

Pro

du

ctiv

ity

Imp

rovem

en

t

Inco

me G

ain

Amount

Savings in Purchasing area � � $2.4M

Saving in landfill airspace consumption � � $780,000

Efficiencies in Small Plant Hire � � $400,000

Savings through a reduction in staff � � $170,000

Reduction in structural maintenance costs for Community Facilities (per year over 10 years)

� � $167,000

Savings through a reduction in the lost time injury rate

� � $104,000

Fuel savings � � $60,000

Increased fees within Cemeteries � � $50,000

Increased fees within Sewage Management � � $46,000

Workshop efficiencies � � $23,000

TOTAL $4.2M

7.1.1 Other recent (non-Service Review) achievements

Corporate catering review

Corporate catering has previously been arranged departmentally through various suppliers. In

order to minimise the amount of catering, and maximise the benefits of bulk purchasing, a

Catering Procedure has been developed. In 2011/12 Council will call for tenders to provide a

preferred suppliers list to all departments. Tendering will provide Council the best competitive

pricing available in the current market place. A 10% reduction in catering costs is anticipated

following the introduction of this procedure.

GIS project

A Graphical Information System (GIS) Redevelopment Project was initiated in 2010 to undertake

a review of current practices and implement appropriate strategies and systems.

The purpose of the project is to provide an optimal platform of infrastructure, people and

processes to enable Council departments to efficiently access spatial information for specific

business processes and to manage infrastructure and assets to meet statutory obligations and

operational needs.


A modern, streamlined GIS will deliver a significant return on investment to Council including;

cost avoidance, time-savings, increased accuracy, productivity improvements, and revenue. It will

furthermore enable Council staff and senior management the ability to make better decisions.

The project will be conducted using a staged approach, and will ultimately determine Council’s

GIS requirements for the period 2012 to 2017.

Cleaning services review

Council undertook a review of its cleaning operations and cost for its administration building. The

benchmarking exercise indicated that substantial cost savings could be achieved should Council

outsource/restructure its cleaning service. Following discussions with the cleaning staff

concerned, it is proposed that the current cleaning staff be given the opportunity to continue

cleaning duties at the administration building. This has required hours to be amended to reflect

the same hours that a contractor could perform the same duties. Staff numbers will reduce

(natural attrition), and the remaining staff will change their working hours from night cleaning to

normal office hours. These initiatives will realise savings of over $95,000 per year.

Occupational health and safety management

“Despite having about 2 times as many employees, Lake Macquarie City Council lost about 2600 hours, about half.” The Newcastle Herald 21 February 2011, p21.

In 2009/10 Council implemented a manual handling program which resulted in significant

reduction in ‘Hours Lost Due to Injury’. The table below demonstrates Council’s LTI rate

compared to surrounding councils.

Newcastle City Council

Port Stephens Council

Lake Macquarie City Council

Hours Lost Due to Injury 3,580 5250 2629

Number of Employees 1000 450 1136

Information Technology (IT) - cost benchmarking

Council has undertaken a number of IT benchmarking activities, particularly with respect to the

cost effectiveness of the Councils Online platform. Councils Online is an IT outsourcing

arrangement operated by a syndicate of local councils, which provides and supports the bulk of

corporate software and hardware used by those organisations.

In July 2010, staff from Hornsby and Lake Macquarie City Councils reviewed the operations of

three Melbourne councils (Boroondara, Port Phillip, and Yarra) to understand their current IT

environment and associated cost structures. The review covered many facets of their IT and

Information Management (IM) operations including their Council’s structure and IT and IM

requirements, the business applications and IT infrastructure used, IT organisational structure


and staffing levels. Current issues and strategic directions were also discussed. The findings are

summarised in Table 7.2.

Table 7.2 - Summary results – IT benchmark exercise

Council A Council B Council C Average LMCC

Council Statistics

Total Number of Staff (FTE) 1,000 900 800 900 885

No. of Assessments 86,000 66,000 42,000 64,667 70,000

Total Council Income ($m) 151 141 119 137 183

IT and IM Statistics

Total No. of IT Staff (FTE) 24 22 20 22 12.6

Total IT Budget ($m) 6.5 5.1 5.5 5.7 5.8

No. of PC’s Supported 875 700 700 758 800

IT and IM Performance Measures

% of Total Income 4.3% 3.6% 4.6% 4.2% 3.2%

Cost Per PC ($) 7,429 7,286 7,857 7,516 7,250

Cost Per Total FTE ($) 6,500 5,667 6,875 6,333 6,554

Cost Per Assessment ($) 76 77 131 88 83

Number of Supported PCs by Each IT Staff Member

36 32 35 34 63

(Source: Lake Macquarie City Council Information Technology Department)

The Councils Online solution compared favourably with the IT and IM environments at each

council – in terms of breadth of functionality and level of integration, and was comparable in terms

of cost. The conclusion from the study was that the Councils Online solution provided

good strategic fit and value-for-money in the current market. For example, our expenditure on IT

is 3.2% of the Council's annual income, compared with an average of 4.2% for the

comparison councils.

Development assessment and compliance

"Lake Macquarie ranked behind only Sydney's Blacktown for the number of construction

certificates issued in NSW".

The Newcastle Herald, 18 February 2012, p21.

Since 2004/05, Council’s average Development Assessment (DA) times have reduced by 53%

from 53 working days down to 25 working days, whilst the number of DAs assessed has only

decreased by 33%. Lake Macquarie City Council has ranked within the top three across NSW for

the number of applications assessed in a financial year for the last four years.

Council consistently compares favourably in the areas of mean assessment time and total

number of applications determined, whilst remaining mostly on par in relation to the number of

FTEs associated to the assessment process. These findings are summarised in table 7.3 below.


Table 7.3 - DA processing efficiency

Council Name Number of DAs

Determined

Applications Determined Per

FTE

Mean Gross Time for

DAs Determined

Lake Macquarie City Council 2150 77 56

Newcastle City Council 1584 81 73

Shoalhaven City Council 1670 88 70

Wollongong City Council 1582 75 93

State Average 471 62 59

(Source: NSW Department of Planning Monitoring Survey)

Table 7.4 below provides further detail of the service review outcomes and other recent

productivity improvements to date.

Table 7.4 - Productivity improvement activities 2009-2011

Type Area Activity

Efficiency Gain

Adopt-a-Foreshore Program

The implementation of a volunteer Adopt-a-Foreshore Program to assist in achieving improved environmental outcomes for foreshore vegetation areas around the Lake. This initiative has not only empowered the community by encouraging ownership, it has reduced the demand on Council parks and maintenance staff to maintain these areas.

Efficiency Gain

Aged and Disability Services

Developed partnerships between local RSL Clubs, Bowling Clubs, Probus Clubs, Seniors and Pensioner Groups, Men’s Health Groups, and Libraries to improve cooperation and resource sharing amongst community groups, and to provide aged and disability services at the most appropriate places where people congregate.

Efficiency Gain

Asset Management

Council’s infrastructure assets are currently valued at $2.1billion. Accordingly, a considerable number of the identified actions from the service review relate to assets, particularly in the areas of –

• road and drainage maintenance • lake foreshore maintenance - dredging, seagrass wrack

management, and vegetation management • maintenance in parks and gardens, and • public reserves facility maintenance.

During the period of the service review, the Asset Management department was restructured to address a number of important issues, including the requirements of the new (IP&RF), which placed a far greater emphasis on long-term asset planning. The maintenance, and future replacement/repair, of the City’s assets has a substantial impact upon Council’s budget and it is critical that adequate resources and systems are in place to plan for and manage these demands. The Asset Management department has undergone a significant restructure to improve the organisation’s ability to meet the IP&R Framework and take a more strategic approach to asset management. Further information is provided under the Infrastructure section of this application.


Type Area Activity

Efficiency Gain / New Income - Ongoing

Awaba Waste Management Facility

Sourcing cover material from external customers In 2008/09, Council introduced a fee for the disposal of clean fill at Council’s waste disposal facility so that customers who needed to dispose of clean fill (that was subject to certain conditions) could do so at the tip at a reduced disposal charge. The advantage to Council from the introduction of this fee was that the material could be used for operational purposes, as well as receiving revenue for the material. This led to a reduction in costs as the material was not required to be purchased externally. The net benefit since 1/7/2008 is $620,000.

Cost Reduction - Ongoing


Sourcing cover material from internal operations In 2009/10, Council was able to source an additional 10,000 tonnes of cover material from Council’s construction activities. This meant that Council was not required to purchase cover material externally. This saved Council $80,000 in the 2010/11 period.



Pre-purchase of Cover Material Council’s waste disposal facility is required to provide hard cover material to disposed waste on a daily basis. The EPA waste levy must be paid on the cover material when it is purchased and transported to the waste facility. For the past two years, an analysis has been prepared taking into consideration the ability to stockpile cover material, the next year’s EPA levy and available funds. This analysis allows a decision to be made regarding the pre-purchase of cover material to avoid the increase in the levy. If the analysis is positive, additional cover material is purchased late in the financial year. As the EPA levy has been increasing significantly each year, this avoids paying a higher levy in the next financial year using operational savings. There is also a benefit where material costs are expected to increase. The cost benefit analysis also takes into consideration the loss of interest on funds by purchasing the cover material at an earlier date. This practice saved Council $57,000 from 1/7/2009 to 30/6/2011.



Use of Alternate Cover Material In accordance with the Office of Environment & Heritage requirements, Council is to apply cover material to waste disposed of at the waste disposal facility at the end of each day. In the 2008/09 financial year, alternate daily cover (ADC) was introduced at the tip. The ADC is applied to the tipping face instead of using hard cover material. This change resulted in approximately 20,000 less tonnes of cover material required for the site each year. The significant saving that is achieved from this change is the avoidance of the EPA levy which is increasing each year. The savings from this change for the 2010/11 year is estimated at $1.27m. These savings will be ongoing into the future and will increase in line with the EPA levy increases. In addition to the savings, the landfill life is extended by the reduction in volume of the cover material.


Type Area Activity

New Income Cemeteries The review identified a number of enhancements for our cemeteries, including more niche walls and emerging trends such as cemetery gardens and memorial boulders, which have been introduced. These enhancements are cost neutral with the income generated subsiding future maintenance. A review of our fees resulted in increasing revenue generation by $50,000 in the current financial year, and ongoing thereafter.

Efficiency Gain

Children and Family Services

This service provides strategic planning and program development for children and families, and management and service delivery advice to community based childcare centres. It is partly subsidised by NSW Department of Family and Community Services (FCS). The review recommended amendments to the Service Level Agreement (SLA) between Lake Macquarie City Council and FCS. These changes will reduce duplication and deliver productivity efficiencies by aligning the activities and responsibilities within the SLA to Council’s strategic goals (Community Strategic Plan).

Efficiency Gain

Communications and Community Events Review

A review of Council’s communications activities, which include marketing, public relations, community engagement, customer service, and external and internal communications, identified efficiencies to be gained through a revised Communications Team structure and implementation of Council’s Project Management Framework (PMF) (as discussed below in Corporate Management Systems). The PMF formalises project planning, consultation, and communication in a way that has previously been done in an ad-hoc manner. This will have a major impact on the Communications Team, as they will be more deeply involved in project planning across the organisation, eliminating duplication and/or inefficiencies in communications activities currently performed by individual departments.

Efficiency Gain

Community Facilities

An audit of 31 facilities is complete and a Community Facilities Strategy has been developed that recommends maintenance, upgrade, lease, sale and alternative use options for 31 community facilities. An estimated $5m is required over the next 10 years to maintain the structure of these facilities to a usable standard. The Council endorsed Community Facilities Strategy will alleviate pressure on the general fund by ensuring all monies saved or made in this process will be used to improve community facilities. Further productivity initiatives will include:

• Co-locate facilities/programs in multi-use type buildings • Partner with other organisations such as schools,

churches, and clubs

New Income Construction Certificates

A Construction Certificate is required after development approval and before any building work commences. They can be issued by a consent authority (such as Council), or by an accredited private certifier. Council has attained accreditation through the Building Professionals Board, enabling staff to compete for a greater share of the construction certificate market. A Building and


Type Area Activity

Planning Services business unit has been established to target other councils and the private construction certificate market. This unit achieved $70,000 income in its first six months of operation. This is expected to increase.

Efficiency Gain

Corporate Management Systems

A new Corporate Management System has been introduced to assist in undertaking corporate planning, risk management, and project management activities. This system will be used to better track the performance of actions and KPIs linked to both Strategic Corporate Planning Documents (i.e. 10-Year Community Plan, 4-Year Delivery Program and Operational Plans), as well as other action plans such as the Service Review outcomes. The Corporate Management System will allow the organisation to more effectively gauge how performance is tracking, whilst reducing duplication and time-consuming manual processes. It will further provide considerable savings in time for staff preparing internal monthly reports for senior management.

Cost Reduction

Councils Online Council is a member of the Councils Online (COL) Syndicate, which is a 10-year partnership between a group of NSW local government councils for the provision of shared corporate software and related services. Three of the councils have recently negotiated a 4-year extension of the shared services arrangement. Councils Online provides a comprehensive set of corporate applications which has been customised and integrated to meet the needs of the Syndicate councils. The councils shared the financial burden of this investment in technology. The councils also shared knowledge and best practice in the development and ongoing operation of the platform. A new four year contract has been negotiated which will provide Council with continued access to the Councils Online platform and related services with significant cost savings exceeding $1.2m. This will allow Council to operate without disruption and to build on its previous investment in the platform. The savings will be re-invested in the platform to provide essential improvements in information and functionality, as required for the organisation to achieve its objectives.

Efficiency Gain

Development Assessment and Compliance

The Development Assessment and Compliance (DAC) department is continually reviewing its processes to ensure assessment times are down and the number of applications assessed is up (see Section 7.1.1 - Other Recent Achievements). In 2011, Council introduced an online application and certificate issuing system resulting in quicker turnaround times, a reduction in administrative resources and a more transparent system for the community. Where there has been spare capacity, the department has utilised this to explore external income opportunities. In recognition of its achievements, the NSW Department of Planning has appointed Lake Macquarie City Council (DAC), to pilot its e-codes project which will assist the public and development industry alike in determining if their proposed development can be done as an ‘exempt’ or ‘complying’ development based on the Codes SEPP.


Type Area Activity

Information Technology

The Council’s Information Technology and Information Management (IT and IM) Strategic Plan was developed to provide a program of investments / initiatives that will support the Council in achieving its aspirations as reflected in the Council Corporate Plans. It provides the linkage from the Council's key priorities to the proposed initiatives such that the Council's key decision makers and stakeholders will have increased confidence that they will be able to realise strategic outcomes where these are dependent on technology capabilities. The plan was developed following significant internal and external consultation with key stakeholders to:

• Establish a framework within which proposed initiatives can be assessed

• Establish the demands for and allocation of capital funds for 2010

• Determine the relative priority to be assigned to initiatives

• Ensure interdependencies are identified and addressed A copy of the IT & IM Strategic Plan is attached (see Supporting Document 7.2).

Efficiency/ Income Gain

Lake Macquarie Performing Arts Centre (LMPAC)

LMPAC provides a facility and performance opportunities for amateur and semi-professional theatre, musical and cultural groups. Council provides a booking service, venue and equipment maintenance and management, and limited promotion of the venue and events. To improve occupancy rates at the Warners Bay facility, and to provide entertainment diversity to local residents, Council has partnered with Friends of the Regal and Screen Hunter Central Coast to show a series of independent films. The first series screened in September 2011 making a profit of $3,000. This will now be repeated for three series in 2012.

Efficiency Gain

Libraries Council operates 10 branch libraries throughout the City, and one mobile library service. In 2008, internal resources were allocated to collect and analyse library information and financial data in preparation for a comprehensive review of the libraries. Due to the high potential for transforming the library services and the extent of community consultation required, an external consultant was subsequently engaged to conduct a library service review. A Library Service Delivery Model (LSDM) has since been developed to provide sustainable libraries that will meet the needs of the community both now and into the future. The model will ensure that the library service:

� Provides equitable access across the City

� Increases patronage of the libraries

� Improves efficiencies in relation to operational expenditure

� Improves use of technology. The LSDM was endorsed by the full Council on 28 November 2011, however the ability to action this model will be dependent upon Council being successful with this application.


Type Area Activity

Efficiency Gain/ One-off Savings/ Ongoing Savings

Plant and Fleet The Plant and Fleet Team is responsible for managing Council owned plant and fleet, which includes new purchases and replacement, and operating costs associated with fleet management. The Small Plant section supplies and maintains equipment for other departments and supplements minor hiring short-falls (irregularly used equipment) through the use of external hire companies. Contracts with external providers have been altered to ensure hired equipment is returned if Council owned equipment becomes available. Additionally, internal procedures have been implemented to monitor equipment across jobs to decrease downtime, and weekly hire rates are now offered to Council departments, resulting in efficiency gains estimated at $400,000 per year. Lake Macquarie City Council was awarded the Fleet Environment Award by the Australasian Fleet Management Association in 2011. Forty-four 6-cylinder vehicles from the Council fleet have been replaced with hybrid or 4-cylinder vehicles, saving $60,000 annually in fuel costs, and reducing greenhouse gas emissions. Staff shift changes in plant and fleet servicing have saved $23,000 annually in internal efficiencies. An electronic fleet management and booking system has been implemented to improve the allocation and monitoring of vehicles, and ensure a more efficient use of the passenger fleet. The outsourcing of the management and maintenance of the light vehicle fleet to an external provider has been investigated, and the current in-house service has been determined to be the most effective option - $250,000pa cheaper than outsourcing.

Income Gain

Printing and Graphic Design

Lakemac Print has been offering printing and graphic design services to other Lake Macquarie City Council departments for over 40 years, and to external commercial clients for over ten years. As recommended by the service review, a commercial Business and Marketing Plan has been developed, specifically targeting NSW local councils, with a view to increasing the commercial graphic design and printing service by $200,000 per year. Three targeted marketing campaigns have been emailed to all NSW councils during March to May 2011, with building success. It is envisaged that continued presence in this market segment will, over time, generate a good outcome for Council. The campaign is branded ‘We know local government’.


Property Information Services

Section 149 certificates are legislated under the EP&A Act, and are required for the sale/purchase of land. The EP&A Act and Local Government Act also make provision for a separate Outstanding Notices certificate which Council currently provides as part of the s.149(5) certificate. The certificate provides property and land information to property buyers, including permissible land and development uses.


Type Area Activity

In response to the Service Review, Council officers have revised the notice and orders processes and introduced a new fee into the Fees and Charges Schedule for the Outstanding Notice/Order Certificates, providing an additional income source for Council.

The request and delivery of s.149 certificates has been automated for customers as an online service, reducing staff time. A Land Information Register has been assigned a Pathway property and a web-based application will be used to generate the required details. This enables the identification, storage, analysis, and filtering of land holdings, both operational and community.

Efficiency gain/ Ongoing Savings

Purchasing Council’s expenditure on external goods and services in 2008/09 was $99m. The service review identified that Council could achieve approximately $2.4m savings per year, within three years of implementation, by centralising more of its purchasing functions, and changing some processes. The purchasing section has been assigned greater responsibility for conducting strategic sourcing of suppliers, implementing supply contracts and providing the required governance framework, processes and reporting capability. These changes ensure purchases from across the organisation are being pooled where possible to attract better pricing from suppliers. They have also reduced the number of transactions processed, thereby reducing transaction costs. Additionally, systems are now in place to increase the sharing of heavy plant across a number of jobs and teams.

• Reviewed organisational structure of the supply team in conjunction with the Purchasing Review

• Implemented revised payment terms and conditions • Reviewed P-card Procedure • Developed and implemented a training program for area-

specific Requisitioners.


Ranger Activities

In 2010/11, two parking officers were temporarily employed to carry out additional parking patrols. After deducting the costs of the activity, the officers provided a net benefit of $123,000 to Council. These two positions also alleviated work strain on Rangers, and increased the level of community compliance. Greater emphasis has been placed on heavy vehicle weighing using portable scales to ensure heavy vehicles are operating legally. On-the-spot fines are issued for non-compliance.

Income Gain Ranger Activities

Companion Animal Registrations In May 2010, additional resources were applied to a project relating to the Companion Animals Act. Letters were sent to the owners of 18,000 companion animals that were unregistered. The letter reminded owners of their obligations as a responsible animal owner and resulted in an increase in the animal registrations. This project returned approx $140,000 to Council, which in turn was able to further fund Council’s companion animal enforcement activities. Due to the success of this project, resources will continue to be applied for this activity in future


Type Area Activity

years.

Income Gain Waste Management

Review of Operational Approval Fee for Onsite Sewage Management Systems Prior to 1/7/10 operational approvals were issued to owners of properties that were operating an onsite sewage management system at a cost of $36. The operational approval was issued for a period of 5 years. A review of the fee was undertaken and after consideration of a number of factors, a decision was made to increase the operational approval fee to $90 and reduce the approval period to 3 years. Benefit from 1/7/2010 – 30/6/2011 = $46,000.

Outcomes Achieved (Efficiency Gain/ Ongoing Savings)

Records Management

Council holds and manages a very large quantity of paper-based and electronic records. Two separate departments were responsible for its management – Records Operations registered and distributed incoming mail, and Records Governance managed archival and retrieval of records. These two departments have now been amalgamated into a new unified section, called Records Services, located within the Corporate Information Department. Staff numbers were reduced by one full-time position, saving $60,000 pa. The new Records Services Team is responsible for improving communications with customers, investigating recordkeeping efficiencies, improving education and training of staff, and actively working with other departments to reduce the use of paper.

Efficiency Gain/Cost Savings

Sustainability Initiatives

City Strategy’s Sustainability Department was a new department when the service review commenced, so was not included as a priority service for review. During the lifespan of the review, Sustainability Department has implemented a number of cost saving actions at Council facilities including:

• A review of energy management at Council facilities has resulted in actions saving $105,000 and over 500 tonnes of CO2 per annum. Actions included adjustment of the HVAC system, installation of solar panels at five Council facilities, purchase of pool cover, installation of voltage reduction units and installation of energy efficient lighting in car parks. Savings are ongoing and actions awaiting completion will generate further savings.

• Purchase of a pool cover for Charlestown Swim Centre heated pool saves 4ML of water per annum.

• A review of water management resulted in $3,200 pa savings at Council’s Service Centre and Works Depot.

• Energy and water conservation projects at Council Holiday Parks generated savings of $23,000 and 280 tonnes of CO2 per annum.

• Waste separation at Council’s Service Centre saves $1,500 and 18 tonnes of CO2 per annum.

• CiviLake recycled 35,000 tonnes of crushed concrete saving Council $1.7m in landfill charge and $280,000 in purchase cost. The stockpile was generated over 4 years.


Type Area Activity

Efficiency Gain/One-off Savings Income Gain

Waste Management

Waste management is an important issue for the City of Lake Macquarie. Our only tip at Awaba is almost full, state waste taxes are increasing, and new federal taxes on carbon pollution are likely, which will affect waste disposal costs. In November 2009, Council commenced a project to develop a sustainable waste strategy for the City. On 28 February 2011, Council adopted a new waste management system, which includes three bins for residents to sort their waste. The decision was made after months of investigation, consultation, and technical analysis. The Community Advisory Group established under the Service Review project participated in this process. The three-bin system will be implemented in phases, with the green waste bin used initially for garden waste only, and then food waste added after two to three years once a waste processing plant has been built. The 3-bin system was the cheapest option available to Council. It was identified that alternative e-waste and mattress disposal options would significantly reduce landfill at the Awaba facility. Mattresses collected with bulk waste collections are now sent to recyclers for recovery. The estimated number of mattresses recovered is approximately 6,700 annually. This represents a saving in landfill airspace consumption, valued at around $780,000 per year. To encourage greater resources recovery, a permanent drop-off facility has been implemented for e-waste at Awaba landfill, as well as four scheduled collections.


7.2 Productivity improvements over the next seven years

Although the formal Service Review project concluded in July 2011, the process of identifying

efficiency improvements, cost savings, and entrepreneurial activities is on going. Outcomes yet to

be completed will be assigned to department operational business plans providing further savings

for Council in the future.

The introduction of a Business Excellence framework will drive continuous improvement and

allow Council to measure itself against other like organisations. Where a particular service may

be underperforming, the framework will help to identify and implement improvement strategies. In

line with the Council resolution passed on 15 December 2011, these improvements will be

reported to Council on an annual basis.

Council’s baseline expenditure under Option 3 of this report reflects the levels of service under a

‘business as usual’ approach for the period 2012 to 2019. This includes significant productivity

improvement initiatives as listed in Table 7.5. The baseline scenario does not seek to portray the

consequences of ‘doing nothing’, instead it captures the expected costs for maintaining the

current levels of service.

The projects that will result in the most significant productivity improvements, monetary savings or

income gain during the 7-year period of this application are summarised below in Table 7.5.

Table 7.5 - Productivity improvement initiatives 2012-2019

Type Area Activity Status

Efficiency Gain

Aged and Disability Services

The Property Department will investigate the feasibility of a partnership to develop and lease aged care facilities. This will be considered as part of its Strategy after 2016.

Not commenced

Efficiency Gain

Business Excellence Framework

Using the information from the Management Systems Evaluation (Refer to 7.1.1 -Other Recent Achievements), a Business Excellence framework will be implemented. Benefits from this framework will include:

• enhanced innovation and idea generation,

• increased customer satisfaction,

• organisational growth (employees),

• increased employee satisfaction and involvement,

• improved efficiency and effectiveness, and

• product reliability A Business Excellence framework will allow Council to objectively evaluate its management systems and performance, and compare that against other like organisations, both within the private and public sector. To drive and ensure ongoing productivity improvements are being achieved, results will be annually reported to Council in line with the resolution passed on 15 Dec 2011.

Not commenced

Efficiency gain Cemeteries Council will facilitate and develop formal relationships with genealogy interest groups to assist with burial/headstone audits, and recruit additional volunteers to assist in the presentation of the grounds. Grants for undertaking heritage work will also continue to be explored. In the 2012/2013 departmental business plan, staff have included an opportunity to explore the feasibility of grave site tourism opportunities. Although these opportunities won’t generate additional income, they may produce a

Not commenced



reduction in vandalism due to the site being more often occupied by people.

New Income Charlestown CBD Parking

Consultants have carried out an audit of parking availability in the Charlestown CBD area. In-line with Council’s Lifestyle 2020 strategy, Charlestown was chosen because it is one of Lake Macquarie’s three major regional centres with growth projections of 4,400 jobs and 3,200 new dwellings. The two major shopping car parking areas in Charlestown have limited parking availability during normal day operations, which impacts on-street parking within the surrounding network. Council is currently reviewing the consultant’s recommendations and the elected Council is due to consider the review in 2012.

In progress

Efficiency Gain / Necessary Upgrade

Community Facilities

An audit of 31 facilities is complete and a Community Facilities Strategy has been developed that recommends maintenance, upgrade, lease sale and alternative options for 31 community facilities. All monies saved or made (i.e. sale of land) in this process will be used to improve community facilities.

In progress

Efficiency Gain

Construction Certificates

2012/2013 will see improved efficiencies with the introduction of additional electronic processing for assessment and determination. This will free up our certifiers’ time to conduct more inspections, generating greater income for Council.

Not commenced

Efficiency Gain

Corporate Management Systems

Following the introduction of Interplan, risk management and the integrated project management modules will be implemented. The risk management module will help to identify, manage, and monitor the corporate business risks, while the Integrated project management module will help assist in integrating projects with the corporate planning and risk processes. It will also manage the lifecycle of all operational and capital projects, help with resources allocation, and assist in prioritising projects.

In progress

Efficiency Gain / Income Gain

Customer Service Unit

The following service review actions are examples of items incorporated into the CSU Strategy 2010-2014 as part of their continuous quality improvement initiatives: 1. Investigate opportunities for CSU to take on more ‘front line’ enquiries from customers on behalf of departments to free up other departments to focus on service delivery 2. Establish a Quality Assurance Team to coach and monitor staff for performance efficiency 3. Tender for external business opportunities for the CSU Call Centre to generate additional income and provide career diversity for staff 4. Evaluate shared service opportunities for the CSU Call Centre – currently in discussions with a number of Councils A Customer Access Strategy, which will consider satellite offices within the City, is being developed.

In progress In progress

Efficiency Gain

Economic Development – Town Centre Promotion

Council’s Town Centre Program provides funding to the City’s seven Chambers of Commerce (Swansea, Belmont, Charlestown, Cardiff, Warners Bay, Toronto and Morisset) for town centre promotion and coordination. An extensive review in 2011 identified that greater City-wide strategic outcomes could be achieved with a restructure of the current program to strengthen accountability for expenditure of funds. In the 2011/2012 year, each of the seven Chambers was allocated $78,860, totalling $552,020. Each Chamber uses 40% of their funding to employ a Town Centre Coordinator, and 10% of their funding for office expenses, leaving 50% of the funding

In progress



available for town centre economic development initiatives. Council is currently considering four options for future management of the program: • Discontinue funding to the Chambers of Commerce

and alternatively fund a Town Centre Improvement Program through Council’s Asset Management department – efficiency improvement, nil cost or gain

• Reduce automatic funding to Chambers of Commerce, providing a small stipend for administrative expenses, and introducing a grants application system for the greater pool of town centre funding – efficiency improvement, nil cost or gain

• Remove automatic funding to Chambers of Commerce and instead introduce a grants application system with submissions to be assessed on merit by a panel – efficiency improvement, nil cost or gain

• Introduce an external board to govern economic development – set up costs plus an estimated $1.2M per year would be offset by a reduction in economic development staff numbers.

Efficiency Gain

Gravel Roads –Investigation into Sealing Vs Maintaining

Investigation into Sealing Vs Maintaining Gravel Roads Gravel roads are typically within rural areas. Twenty-four kilometres of gravel roads have been sealed in the last 10 years, with approximately 60kms of unsealed roads remaining. The following actions are being incorporated into the Roads Asset Management Plan, and departmental business plans: 1. Undertake a cost benefit analysis for sealing the City’s

60km of remaining gravel roads compared with maintaining them in their current gravel state, taking into account the whole-of-life costs for both options

2. Based on this analysis consider an alternative funding arrangement, including the option of reducing the service to a level that can be fully funded using only grant funding from the Federal Government’s Roads to Recovery program

3. Review methods of prioritising gravel road sealing work to best utilise funds for the maximum benefit of property owners and users

4. Investigate reducing the width of the seal applied to some gravel roads to reduce costs and/or gain greater lengths of seal for the same cost.

In progress

Efficiency Gain

Information Technology

To allow prioritisation and tracking of implementation needs, Council developed the IT Strategic Plan 2011-2015. The unmet IT needs were collated into a Business Requirements Catalogue, which will be used for prioritisation of IT projects across the Council. The Strategic Plan provides a comprehensive roadmap to achieve: • Improved service to Council customers • Deeper community engagement • A more efficient Council • Capable IT infrastructure • Effective IT management and support

In progress

Efficiency Gain / Necessary Upgrade

Libraries The ability to action the Library Service Delivery Model will be influenced by Option 3 of this application.

Commenced



Efficiency Gain/One-Off Savings/ Ongoing Savings

Plant and Fleet

Quotations are currently being sought to install GPS systems in a test sample of trucks to evaluate the potential for efficiency savings, e.g. better garbage route planning.

In progress

Income Gain Plant and Fleet

A feasibility assessment identified that a commercial Metal Fabrication service has merit which has the potential to generate $50,000 to $100,000 within the first three years of operation. A commercial business plan will be developed to ensure this initiative will be viable.

Not commenced

Income Gain Property

Council owns and manages a diverse property portfolio and has done so since the 1980s. The property portfolio is used for: Meeting future community needs such as car parking, open space, or community facilities, and Strategic purposes including the receipt of investment income, future development, or to consolidate and sell when market forces provide a suitable return. Outcomes Achieved (Efficiency/Income gain) A service review work group identified significant potential revenue with a change in commercial focus towards Council’s property investment portfolio. An implementation team developed a 5-year Investment Property Strategy to expand entrepreneurial opportunities and subsidise the reliance on rates. The strategy has projected an average return of $7m per year over the next 5 years. There are three main target areas in the new strategy:

1. Property development 2. Property investment, and 3. Land offsets and biodiversity trading

Initiatives: • The property department is being re-branded to

market its commercial focus.

• Formalise an Internal Reference Group of stakeholders to provide input into land review process and ensure a more strategic focus.

• Action recommendations from the detailed study of community land holdings.

• Continue to hold operational land for strategic development purposes, with investigation and feasibility assessment to continue for such holdings (existing and future).

• Continue to seek alternative ways (within legislative boundaries) to finance and develop strategic land holdings, outside of full Council funding.

• Investigate alternative development/enterprises, with community, government, or private organisations, to maximise usage and income from both community and operational land.

• Develop a shortlist of community land for further analysis based upon specific parameters (such as size, location, strategic opportunities, topography, environment, constraints, development potential, and transport connections).

• Undertake a detailed study of community land for

In progress



potential development.

• Develop a full Masterplan for potential hospitality and tourism uses on Council land at Speers Point Park aimed at increasing revenue.

• Undertake an audit and analyse all operational land held by Council to determine what holdings can be developed and what holdings are unsuitable or surplus to Council’s requirements.

• Consider selling surplus land, with thought given to returning some of the proceeds to the General Fund rather than the Reinvestment Reserve.

• Construct or redevelop existing buildings (such as industrial warehousing), with options to sell or lease (particularly to government tenants), to increase income.

Necessary Upgrade/ Efficiency Gain

Public Toilet Strategy

A significant number of Council’s 107 public toilet facilities are in need of replacement or improvement. Predominant issues are the age and condition of buildings, and accessibility and safety for users. Council officers developed a Public Toilet Facilities Strategy which identified that 55 facilities are currently appropriate, 14 facilities need replacement, 11 facilities need upgrade or modification, 9 facilities should be closed and demolished, 9 facilities require a full safety assessment, 7 facilities should be open only as required for sporting events, and 2 facilities should be relocated to higher use areas. The public exhibition period for the Public Toilet Facilities Strategy closed on 16 May 2011, with the strategy endorsed by Council on 27 June 2011.

In progress

Efficiency Gain/ Ongoing Savings

Purchasing To achieve, and possibly increase on the projected savings of $2.4M per year (refer to Table 7.4 - Purchasing) Council’s Purchasing department will continue to implement process change over the next 3 years. This will include: • Investigate expanding the use of Purchase Cards for

low risk, high volume transactions

• Consolidate invoicing to a monthly (or some other term) basis to provide significant transactional savings

• Review the system and process to ensure an agreed tolerance (either % or $ value) is used and is flexible enough to enable invoice processing

• Review and reduce the number of suppliers

In progress


Ranger Activities

A project group will be formed to develop formal agreements with shopping centre managers to enable Council Rangers to regulate disabled car parking spaces.

Not commenced

Cost Saving Ranger Activities

Skip bins are currently located on Council’s beaches and serviced by an external contractor. It is proposed that these bins be removed and replaced with a cheaper alternative for servicing. It is anticipated that this will save Council $153,000 over the period of the special rate variation.

In progress


Environmental Compliance

A draft On Site Sewage Management (OSSM) Strategy defining Council's role in the regulation and approval of OSSM systems is expected to be complete in 2012/13.

In progress



The strategy includes a framework for setting and reviewing fees for inspections and approvals of OSSM systems. There are an estimated 300 unlicensed systems in the City. A project to confirm their locations has discovered 50 systems so far - when all have been located and licensed, the projected additional income is $10,000pa.

Efficiency Gain

Stormwater Quality Improvement Devices (SQIDS)

The following actions are being incorporated into the Stormwater Asset Management Plan, and departmental business plans: • Lengthen the maintenance period and improve the

quality of post-construction maintenance prior to SQIDS being handed over to Council maintenance staff. This will improve the plant establishment and reduce long-term maintenance costs.

• Investigate increasing maintenance funds each year as new drainage structures are constructed by developers. The maintenance costs are likely to rise as new infrastructure is handed to Council and existing facilities deteriorate with age.

• Review Council’s engineering guidelines to rationalise the type, and improve the standard, of drainage structures that can be constructed by developers, to reduce maintenance costs.

• Conduct further environmental monitoring and data collection for SQID devices to inform future SQID design, construction and maintenance.

• Further enhance the Adopt-a-SQID program, which may include in some locations the involvement of the community in the maintenance of the structures.

• Identify the sections of open drains where vegetation disturbance from maintenance is to be avoided for environmental reasons. This could reduce the overall maintenance costs.

In progress

Efficiency Gain

Sustainable Resource Centre, Proposed for Teralba

A Sustainable Resource Centre (SRC) was first mooted in 1999 when CiviLake became increasingly aware of the need for a single source solution to consolidate its separated bulk materials procurement and recycling activities. The financial implications and consequences of not constructing the SRC are significant. Alternative waste disposal costs would severely impact on Council’s ability to deliver its civil construction program. If the material being used to construct the SRC were to be disposed of at a licensed waste facility, the disposal costs for the 220,000 tonnes that will be redirected to construct the SRC would be in the order of $34.5M. With the construction (capitalisation) cost of the SRC estimated at $6.4M, this results in a net saving of $28.1M Operating the SRC will result in Council’s ability to construct roads using recycled concrete at a lower cost than using virgin products. Once Council’s bulk material operational needs are met, the facility will be income generating as recyclables are sourced from, and returned processed to the wider contracting community. The service review examined and supported the development of a recycling facility on land off the Weir Road at Teralba, allowing for a cost-effective, environmentally sustainable, and long-term solution to

In progress



bulk materials recycling, storage and supply. Council endorsed this proposal in April 2010 and the Department of Planning and Infrastructure issued development consent in late 2011. CiviLake is currently working through the preconstruction consent conditions. On commissioning, expected in 2016, the facility will receive, modify and store feedstock, sourced from CiviLake’s internal works, external contract works, and other external sources, for re-use across CiviLake’s operations. There is also opportunity to sell material to external markets in the building and civil engineering industries. The facility will have the capacity for an annual turnover (throughput) of 200,000 tonnes per annum. The current capital cost of the facility is estimated at $6.4m, with CiviLake profits (from its external works activity)providing $1.5m towards the project. Once operational, the facility will be financially self-supporting and generate an ongoing annual surplus (currently estimated at $1.28m in fiscal 2016/17) to ensure its future.

Necessary Upgrades

Swimming Centres

Council currently owns public swimming centres at Charlestown, Swansea, Speers Point, Toronto, Morisset, and West Wallsend. The Pool Service Delivery Model, conducted in 2009 (see Attachment ) recommended that Council retain all six of its pools, with upgrade and redevelopment of the centres to increase usage e.g. adding spray play areas. Council officers will await the outcome of this IPART application to action the recommendations for upgrades. A number of pool delivery models are being explored including, but not limited to, public private partnerships and community trusts.

Not commenced

Income Gain Waste Management

A service review of Council’s present household waste collection service was placed on hold while the Waste Strategy was developed. Now that the Strategy has been adopted, the current waste collection service is being reviewed, with particular emphasis on opportunities to expand the collection of commercial waste to generate additional income. Changes to Waste Collection at Council’s Beaches

In progress

Efficiency Gain

Workers Compensation and Return to Work

Council has been self insured for Workers Compensation for 24 years. Self insurance involves significant reporting requirements regarding occupational health and safety. It is considered timely that we conduct a cost benefits analysis to identify that the benefits of retaining the self insurer status still outweigh its associated costs. Lake Macquarie was a Safe Work Australia finalist in 2011 for its Occupational Health and Safety Management System. A gap analysis is underway to determine the true organisational costs for LAKE MACQUARIE CITY COUNCIL to maintain the Self Insured Licence vs being conventionally insured for worker's compensation. The information from this analysis will be considered when the renewal of the self-insurer accreditation is required.

Not commenced


8 Implementation of Integrated Planning and Reporting

framework

Implementation of the IP&RF is a criterion for section 508A applications. If the council has not

implemented the IP&RF, it should consider applying for a section 508(2) special variation instead.

Councils should discuss this option with IPART.

� Has the council implemented the IP&RF? Yes No

If Yes, which IP&RF Grouping did the council nominate to be in?

If No, councils should provide a brief summary of their progress in implementing the IP&RF to

date.

As reported in section 3.2, Lake Macquarie City Council is a Group One council for the purpose of

implementing the new Integrated Planning and Reporting Framework (IP&R Framework). Under

the new framework, Council endorsed the Lake Macquarie Community Plan 2008-2018

containing the aspirations of the people of Lake Macquarie, on 25 August 2008. The Community

Plan, Resourcing Strategy, Delivery Program and Operational Plan were submitted to the Division

of Local Government by the deadline for Group One councils of 30 June 2010.

A summary of the feedback received from the DLG in 2010 on Council’s implementation of the

IP&RF and our responses have been summarised in Table 8.1 below:


Table 8.1 - Feedback and Council response to IP&RF Implementation 2010

IP&RF Document DLG Feedback Lake Macquarie Ctiy Council’s Response

Lake Macquarie Community Plan 2008-2018 (CSP)

Too much focus on process rather than outcomes.

The CSP 2013-2023 will be based on community outcomes.

Community Engagement Strategy

Covered the quadruple bottom line Good linkages between the community survey and the CSP components No direct evidence of alignment with social justice principles.

The engagement strategy incorporated the social justice principles in all aspects of the plan however did not refer to it as such. The subsequent revised delivery program and operational plan refer to, and incorporate, the social justice principles of equity, access, participation and rights explicitly and this will continue with the revised Community Engagement Strategy and the CSP 2013-2023.

Resourcing Strategy Met legislative requirements Workforce Management Plan identifies critical positions and skills necessary to meet the agreed plans and ensure the future of the organisation. Asset management plans are well developed. The Asset Management Strategy does not include an asset policy statement and details of when the policy was adopted by Council. The Long-Term Financial Plan would be improved by showing the financial results where assumptions might be less than or better than anticipated. The LTFP result in a budget that is not financially sustainable.

Details of when the policy was adopted has been included in the amended Asset Management Strategy. New versions of the Asset Management Plans have also been developed as we continually improve our Asset Management processes. Lake Macquarie City Council have developed a revised LTFP with improved modeling for different scenarios. The LTFP shows that the delivery of the CSP would be financially unsustainable which supports the motivation to apply for a special rate variation.

Delivery Program/Operational Plan (DP)/(OP)

The DP and OP are presented in a single document and it is easy to see how the objectives of the CSP flow into the DP and OP. Progress and organisational indicators are provided for each objective.

Each year we revise our Delivery Program and develop a new Operational Plan to continually revise and improve our delivery outcomes.


9 Other information

9.1 Special variation history

In Table 9.1, insert details of all special variations that the Council has applied for in the last 10

years (whether the application was approved or not). In the space below, provide any additional

information the Council wishes to convey regarding its special variation history.

Council has had a series of Special Rate Variations to fund environmental management and

sustainability programs over the last twenty years, as well as a special variation to meet costs

associated with mainstreet programs.


Table 9.1 - Lake Macquarie City Council special rate variation history

Year

Type of Variation

(s508(2) or s508A)

% Sought (incl. Rate

Peg)

% Approved (incl. Rate

Peg)

% Rate Peg

Period (yrs)

Reason Conditions Imposed

Compliance with Conditions

1999/2000 s508(2) 5.37 5.37 2.50 3 Remedial work to Lake Macquarie

Council reduce general rate revenue by 2.8% in 2002/03

General rate revenue reduced

2000/2001 s508(2) 2.93 2.93 2.70 3 Introduction of Belmont Main Street Program

Variation applied for 3 years only Council reduce general income for 03/04 by $70,000

Levy extended and Council reduced and extended income and works in accordance with special rate of 3.62% granted in 2003/04

2002/2003 s508(2) 3.28 3.28 3.30 3

Extension of expiring Special Variation for remedial work to Lake Macquarie

Council reduce general rate revenue by $1,621,833 in 2005/06, and report outcomes and expenditure in annual report

General rate revenue reduced. Annual Report 2004-05 pages 116, 222 (Included in Supporting Document 9.1)

2003/2004 s508(2) 3.62 3.62 3.60 3

Extension of expiring Special Variation for Belmont Main Street Program

Council reduce general by $80,798 in 2006/07

Levy extended and Council reduced and extended income and works in accordance with special rate of 3.75% granted in 2006/07

2005/2006 s508(2) 8.91 8.91 3.50

Part A – 3years

Part B - Ongoing

Extension of expiring Special Variation for remedial work to Lake Macquarie To cover the future ownership costs of the assets created under the Office of the Lake Macquarie and Catchment Coordinator


General rate revenue reduced. Annual Report 2005-06 Page 222 (Included in Supporting Document 9.1) Annual Report 2006-07 Page 107 (Included in Supporting Document 9.1) Annual Report 2007-08 Page 98 (Included in Supporting Document 9.1)


Year

Type of Variation

(s508(2) or s508A)

% Sought (incl. Rate

Peg)

% Approved (incl. Rate

Peg)

% Rate Peg

Period (yrs)

Reason Conditions Imposed

Compliance with Conditions

2006/2007 s508(2) 3.75 3.75 3.60 3

Extension of expiring Special Variation for Belmont Main Street Program

Council reduce general income by $91,079 with amount deducted from Notional General Income 2006/07 Rating Return Schedule 3

Reported in 2006/07 Rating Return Schedue 3 (Supporting Document 9.2) Annual Report 2005 p.115 (Included in Supporting Document 9.1) Annual Report 2006-07 page 106 (Included in Supporting Document 9.1)

2007/2008 s508(2) 8.52 8.54 3.40 Ongoing Infrastructure construction and maintenance

Annual Report 2007-08 pp. 97-98 (Included in Supporting Document 9.1) Annual Report 2008-09 p.64 (Included in Supporting Document 9.1)

2008/2009 s508(2) 6.04 6.04 3.20 1

Extension of expiring Special Variation for remedial work to Lake Macquarie


General rate revenue reduced. Annual Report 2008-09 Page 64 (Included in Supporting Document 9.1)

2009/2010* s508(2) 6.29 6.29 3.50 1

Sustainability Levy – works to the lake and local environment

Income expenditure and program outcomes reported in annual report

Annual Report 2009-10 Page 124 (Included in Supporting Document 9.1)

2010/2011 s508(2) 5.30 5.30 2.60 4

Sustainability Levy – works to the lake and local environment

Income expenditure and program outcomes reported in annual report

Annual Report 2010-11 page.132 (Included in Supporting Document 9.1)

Note: where the rate increase sought is lower than the rate peg, this is the result of an expiring special variation and how the variation was calculated at the time of the determination of the permissible increase.


As Council is proposing to extend the Sustainability Levy as part of the rate base for the

continuation of projects in the areas of environmental sustainability (including bushland

rehabilitation, lake water quality and foreshore rehabilitation), details have been provided below

on Council’s environmental and lake remediation works carried out in accordance with the above

rate variation history.

Lake Macquarie Improvement Project capital works (Part A)

From 1999-2009, a Levy was raised by Council to fund the Office of the Lake Macquarie and

Catchment Coordinator and the Lake Macquarie Improvement Project. This project was a

collaboration between the NSW Government, Wyong Shire Council and Lake Macquarie City

Council, and involved a 50/50 funding arrangement between the State Government and the two

local councils. Lake Macquarie City Council’s contribution to this partnership was derived from

the Lake Macquarie Improvement Project Capital Works levy, which is known as the ‘Lake Levy’.

Implementing priority actions identified in the Lake Macquarie Estuary Management Plan was an

early priority of this Office. Since the plan was completed in 1997, over $20m from the Council’s

Lake Levy and the NSW Government has been spent on improvements in the Lake and its

catchment. The works included:

� constructing wetlands and pollutant traps

� removing silt and ooze from the Lake

� reconstructing and revegetating Lake foreshores

� preventing foreshore erosion

� navigational dredging in Swansea Channel

The special rate variation was extended five times between 1999 to 2009 and a high level of

community support for the program was evident from beginning to end. These extensions were

also collaborative with the NSW Government and Wyong Shire Council. The importance of lake

health as a priority issue for the local community was a key element in continuing the program.

The program was also able to demonstrate positive results, with significant improvements in lake

water quality and seagrass extent. Analysis of water quality and seagrass coverage shows

continuing signs of improvement since commencement of the Lake Macquarie Improvement

Project. Water clarity has improved by 95%, Chlorophyll 'a' reduced by 18% and orthophosphate

reduced by 80%. Over the same period, there has been a 24% increase in seagrass coverage in

the lake.

Key achievements of the project include:

� Installation of 66 stormwater treatment devices, with a focus on wetlands

� Rehabilitation of approximately 38.6 kilometres of Lake foreshore and estuarine creek bank

� Rehabilitation of 15 State Significant Wetlands

� Planting of an additional 600,000 endemic plants (in partnership with Landcare)

Outcomes of the Lake Macquarie Improvement Project (including the various extensions to the

program) were reported in the annual reports for the project that were distributed to all relevant

stakeholders and made available online. A comprehensive list of all outcomes, financials

(including audited financial statements) and acknowledgements was compiled in the ‘2008-09


Annual Report and Final Report of the Lake Macquarie Improvement Project’ (Refer to

Supporting Document 9.3) .

In 2005, the Australian National University conducted an Independent Review on the

effectiveness of the Lake Macquarie Improvement Project (Refer to Supporting Document 9.4).

The review found that the execution of the works program was well managed and overall

concluded that “the Lake Macquarie Improvement Project had enabled the cost effective

implementation of a large works program that can be expected to provide substantial

improvements in water quality in Lake Macquarie.”

The Lake Macquarie Improvement Project was awarded the Theiss River Prize for excellence in

waterway improvement in 2008. The Theiss River Prize is widely recognised as the world’s most

prestigious prize for management of rivers, wetlands, lakes and estuaries. The criteria for this

prize include:

� Demonstrated achievements in river, wetland, lake or estuary restoration and protection and

effectiveness of the program delivery

� Evidence of an integrated, science based process for improving or maintaining aquatic

ecosystem health

� Evidence of innovation to integrate social, economic and ecological elements for effective

program delivery with a long-term vision.

Lake Macquarie Improvement Project maintenance works (Part B - ongoing) (2005-2006)

In 2005-06, Council was granted an ongoing Levy for the maintenance of ecosystem

enhancement works constructed across the City under the Lake Macquarie Improvement Project.

This levy is used to maintain the performance standards of stormwater quality improvement

devices, foreshore stabilisation works, streambank and riparian works.

This application does not seek to modify the ongoing Lake Macquarie Improvement Maintenance

Works Levy.

Sustainability Levy - 2008-2014 (current and proposed ongoing levy)

At the end of 2008-09, the Lake Macquarie Improvement Project Maintenance was wound up and

responsibility for environmental improvement works within Lake Macquarie City was devolved to

Council. Funding for Council to conduct these works was provided through a further special rate

variation, known as the Sustainability Levy. This Levy funded ecosystem enhancement works, as

well as a broader suite of environmental management and sustainability programs including

sustainable living, environmental security, sustainability engagement and environmental risk

activities (see Section 3.4). This Levy was initially granted for one year, and subsequently

extended,or a further four years under the same conditions as the first year. It is due to expire on

30 June 2014. The only condition imposed by the Division of Local Government, apart from two

administrative conditions relating to the raising of the rate, was for the income, expenditure and

program outcomes to be reported annually in Council’s annual report. This condition has been

met. The relevant sections of the most recent Annual Report is provided in Supporting Document

9.1.


Council relies on the current Sustainability Levy to fulfil residents’ strong desire to have Council

continue the current broad scope of environmental risk, ecosystem enhancement, environmental

security, and sustainable living programs, while continuing lake improvements.

The Sustainability Levy is used to fund a range of projects across Council’s five environmental

sustainability work areas:

1. Ecosystem Enhancement: Protecting and Enhancing Our Natural Environment

� 80% of works to improve water quality in Lake Macquarie, including stormwater quality

improvement devices, foreshore stabilisation, streambank stabilisation and wetland

rehabilitation

� 50% of works to improve coastal dunes

2. Sustainable Living: Reducing Resource Consumption and Waste Generation

� 100% of the Living Smart Festival to showcase local products and technologies for

reducing resource consumption

� 100% of the Win-Win program to assist businesses save money through energy, water

and waste minimisation

� 25% of energy and water conservation works projects for Council and community

facilities

3. Sustainability Engagement: Working with Our Community to Improve Our Environmental

Practice

� 50% of the Sustainable Neighbourhoods Program to assist local communities to improve

their local environment, minimise waste, reduce pollution and prepare for natural

disasters

� 100% of citywide engagement campaigns to encourage the community of Lake

Macquarie to adopt sustainable practices

� 50% of support to community gardens

� 50% of support to schools for environmental education, WaterWatch monitoring and

practical assistance to minimise waste and improve the school environment

� 100% of Council’s Coastal Activities program

4. Environmental Security: Reducing Pollution and Preparing for Natural Disasters and

Climate Change

� 25% of the contaminated land management program

� 100% of the air quality management program

� 100% of flood mitigation works projects

� 25% of climate change adaptation projects

5. Environmental Risk: Monitoring and Reporting on Our Environmental Performance

� 100% of energy and water audits of Council operations to identify opportunities for cost

and resource consumption savings


During the first two years of the Sustainability Levy (2009-10 and 2010-11), Levy funds

contributed to the following outcomes:

� City wide electricity use down 4.9%

� Waste to landfill down 23% per capita since 2008

� Showerhead exchanges (1,344 heads, 17,820 kL water, 367 tCO2)

� Commercial recycling up 38%

� OzHarvest partnership to reduce food waste from commercial premises

� Solar panels on 5 buildings (Depot, Speers Point Pool, Landcare Resource Centre, Toronto

MultiPurpose Centre, Art Gallery

- Saved $15,000 and 78 tCO2 per year

� Voltage reduction units

- Art Gallery and Depot

- Saved $15,000 and115 tCO2 per year

� Admin building energy management


� Passenger fleet emissions savings

- Saved $150,000 and 300 tCO2

� Charlestown pool covers


� Contaminated land management system developed

� E-shorance web tool developed to assess response of Lake foreshore to predicted sea level

rise

� Risk assessment of Council exposure to climate change completed

� 26 on ground works projects completed to improve Lake water quality

� Completed version 1 of Lake ecological response model

� Illegal dumping campaign identified and cleaned up hot spots, achieved 6 prosecutions and

installed barriers to minimise future dumping

� Over 70 ha of private land signed up in rural areas to “Land for Wildlife”

� Green Jobs program (6.43ha rehabilitated, 974 volunteer days, 3,850 natives planted).

� Council’s vegetation and habitat corridor mapping updated using 2010 aerial photographs

� Living Smart Festival held annually for two years, attracting about 8,000 participants each year

� 17 sustainable neighbourhood groups established

� 13,680 pledges to 10:10 Challenge (9,000 tCO2) and $570,000

� Clean Up Lake Macquarie (86 sites, 7,146 volunteer participants, 28 tonnes of rubbish in

2010-11)

� Second Hand Saturdays diverted 27.9 tonnes of recyclables from landfill


� 47 community ecosystem sites monitored

Outcomes of programs funded through the Sustainability Levy are reported annually to the

Division of Local Government as part of Council’s Annual Report and State of Environment

Report. An extract of the relevant Annual Report sections are provided in Supporting Document

9.1 and in the State of Environment Report, available as Supporting Document 2.2.


9.2 Reporting

During Stage 3 of Securing our Future, the community was informed of Council’s intention to

consider applying for a proposed special rate variation via the following avenues:

� Council’s website and specially formed Have Your Say website

� Media releases/local media

� Booklet delivered to every household and business – Securing our Future

� Workshops and community forums

As previously reported in this application, the majority of respondents to Stage 3 of Securing our

Future community voted for a rate rise above the peg rate determined by IPART. The strongest

community support was for Option 3 and the specific projects have already been covered in

Section 3.2 and Section 4 of this application.

Council takes pride in maintaining a high level of transparency and accountability and as such,

performance progress against the works to be funded by the special rate variation will be reported

to the community via the following methods:

� Quarterly reporting against the operational plan and budget (via the Quarterly Budget Review

Statements).

� Results of the quarterly review will be published on Council’s website

� Progress of major projects and outcomes achieved as a result of the projects will be included

in media releases and submitted to local media

� Advertisements in local papers every quarter will summarise key achievements for that quarter

� Council’s Annual Report will contain the outcomes of all projects and actions funded from the

special rate variation

� While Council is mindful of the community’s desire for Council to remain efficient with its

expenditure, more direct communications with rate payers is also proposed. Information on

Council’s special rate variation is to be included in the first mail out of rate notices for the year

(delivered to all 78,655 rate payers) which occurs from early to mid July each year. It is

proposed that this will provide a summary of income obtained through the variation, progress

on projects or activities funded from the variation, and where required, any changes to the

projects or activities funded from the variation

� Council’s e-news subscriptions will also contain key information regarding the projects funded

from the special rate variation, as will regular publications distributed by Council, for example,

Lake Macquarie Family Day Care newsletter and Lake Business magazine

� Key community groups like Council’s Sustainable Neighbourhood Groups will be kept

informed of the rate variation through its established regular networking

� Council will continue its focus on community consultation and engagement by providing

Council’s Community Advisory Group (CAG) with updates on the special variation, including

further information on Council efficiencies and the projects and activities funded. The CAG’s

advisory role will be continued as Council seeks feedback on how effectively the proposed

special variation is being implemented and communicated


� Council will continue its program of regular community and customer satisfaction surveys and

will use this regular engagement tool as a way to test community response and understanding

of Council’s implementation of the proposed special variation


9.3 Council resolution

In accordance with Sections 532 and 535 of the Local Government Act , Lake Macquarie City

Council passed a resolution apply to IPART for a special rate variation, following consideration of

matters concerning the Draft Operational Plan 2012/13.

Council Resolution – direction to apply to IPART for a special rate variation and adopt the Draft Operational Plan 2012/13

At an Extraordinary meeting of Council on 15 December 2011, the elected Council unanimously

endorsed Council officers to make an application to the Independent Pricing and Regulatory

Tribunal for a rate increase consistent with Option 3. Council also adopted the Draft Operational

Plan, including the special variation.

A copy of the Council’s resolution to adopt the Draft Operational Plan, including the special

variation is provided in Supporting Document 9.5.


10 Checklist of application contents

Item Included?

Community Strategic Plan, Delivery Program and Draft

Operational Plan extracts

Long Term Financial Plan extracts

Asset Management Plan extracts

Performance indicators

New capital financing strategy

Contributions Plan documents (if applicable) N/A

Hardship Policy

Community engagement strategy (including material samples

and survey reports (if applicable))

Community feedback

Annual Report extracts

Resolution to apply for the special variation


12 Supporting material

2.1 Providing Enduring Value: Understanding our Community’s Preferred Level of Rates for Service

2.2 State of Environment Report 2010-2011

3.1 Lake Macquarie City Council Long Term Financial Plan 2012-2022 Updated February

2012

3.2 Lake Macquarie Community Plan 2008-2018

3.3 Draft Revised Delivery Program 2009-2013 Draft Operational Plan 2012-2013

3.4 City of Lake Macquarie Environment Sustainability Action Plan

3.5 Draft Library Service Delivery Model

3.6 Pool Service Delivery Model

3.7 Community Facilities Strategy 2011

3.8 Public Toilet Facilities Strategy 2011

3.9 Draft Cycling Strategy 2011-2021

3.10 City of Lake Macquarie Resources Strategy

3.11 Workstyle 2020 – Human Resources Strategy

3.12.1 Asset Management Plan – Parks and Reserves – Version 3

3.12.2 Asset Management Plan – Buildings – Version 3

3.12.3 Asset Management Plan – Roads and Infrastructure – Version 3

3.12.3a Asset Management Plan – Roads and Infrastructure – Version 3 - Appendix

3.12.4 Asset Management Plan – Stormwater – Version 3

3.12.5 Asset Management Plan – Transportation – Version 3

3.12.6 Asset Management Strategy – Version 2

3.13 Draft Fees Charges 2012-2013

3.14 Investment Policy – Council Policy Version 5

3.15 Financial data for Special Variation Scenario 1, 2 and 3

3.16 Asset Management Maturity Audit Outcomes – May 2011

3.17 Capital Works Programs

3.18 Section 94 Contribution Catchment table

4.1 Residents’ Attitude to Lake Macquarie Council and Council Services May 2011

- EMC Online Survey

4.1.2 Resident attitude to Council Services and Facilities Report June 2011 – EMC Focus Group

4.2 Stage 1 Community Workshop Presentation

4.3 July 2011 Rates Notice

4.4 Advertisement for Stage 1 Workshops

4.5.1 Information Sheet 1 – Services, Revenue and Expenditure

4.5.2 Information Sheet 2 – Sustainability, Efficiency and Enterprise

4.5.3 Information Sheet 3 – Assets

4.6 Deliberative Working Group Report

4.7 Super User Advertisements

4.8 Lake Macquarie City Council Survey of Residents and Ratepayers on funding options for My Lake Macquarie – Securing Our Future and review of Literature on Infrastructure productivity – Final Report – Hunter Valley Research Foundation

4.9 Securing our Future Booklet

4.10 Stage 3 Online Survey

4.11 Stage 3 Community Workshops presentation

4.12 Advertisement for Stage 3 Workshops


4.13 Have Your Say results from Stage 1 forums

4.14 Have Your Say site FAQ’s

4.15 Budget Allocator Comments

4.16 Budget Allocator Report Budget distribution

4.17 Focus Area with services list Caring for Our Community

4.17.1 Focus area with services list Sport Recreation and Culture

4.17.2 Focus area with services list Caring for Our Environment

4.17.3 Focus area with services list Civil Leadership

4.17.4 Focus area with services list Transport Roads and Drainage

4.17.5 Focus area with services list Urban and Economic Development

4.18 Summary of Submission Received during exhibition period of Operational Plan

4.19 Media monitoring table

5.1 Letter of Support from Jason Pauling – Business Charlestown Inc – Securing our Future

5.2 Letter of Support from Jason Pauling – Combined Business Chambers (081211) – Securing our Future

5.3 Letter of Support from Sheridan Ferrier – Tourism Hunter (November 2011) – Securing our Future

5.4 Payment Assistance Policy

7.1 Service Review Process – Version 06

7.2 IT and IM Strategic Plan 2011 to 2015

9.1 Annual Report references of Speical Rate Variation 04-05 to 10-11

9.2 Department of Local Government requirements and rates return Schedules 3 for Belmont Mainstreet program

9.3 Lake Macquarie Improvement Project Final Report

9.4 Independent Review of the Effectiveness of the Lake Macquarie Improvement Project – Australian National University

9.5 Council Resolution December 15

Date post:	05-Apr-2020
Category:	Documents
Upload:	others
View:	2 times
Download:	0 times