19 April, 2014

LCC COMBINED DELIVERY PROGRAM 2013-2017 AND DRAFT OPERATIONAL PLAN 2014-2015


ITEM-12           CORP - 14/4/14 - COMBINED DELIVERY PROGRAM 2013-2017 AND DRAFT OPERATIONAL PLAN 2014-2015

REPORT BY:   D MCGRATH - CORPORATE STRATEGY AND COMMUNICATIONS
                          OFFICER & P MCFARLANE – A/FINANCE MANAGER                           

REFERENCE

Min No 13-156:     Ordinary Meeting of Council held on 6 May 2013

SUMMARY

The Council’s Combined Delivery Program 2013/14-2016/17 and Draft Operational Plan
2014/15 and Draft Fees and Charges 2014/15 have been prepared and are provided for the consideration of Council to place on public exhibition.

The Delivery Program  2013/14  –  2016/17  was  adopted  at  the  Ordinary  Meeting  of
Council held on 6 May 2013 by Council for its four-year term of office.

The  Draft  Operational  Plan  2014/15  details  the  operational  (recurrent  or  annual) activities, capital works and new initiatives to be undertaken in the 2014/15 financial year. The Operational Plan implements the Delivery Program 2013-2017 and is provided to Council for adoption.

COMMENTARY

Background
In October 2009, NSW Parliament passed the Local Government Amendment (Planning and Reporting) Bill 2009 requiring all NSW local Councils to develop a 4 year Delivery
Program and Annual Operational Plan as part of an overall Integrated Planning and
Reporting Framework.

Lithgow City Council plays an important role in the community by undertaking a wide range  of  activities  and  works  on  behalf  of  residents  and  visitors.    To  inform  the community of these planned activities and works, the Council prepares a combined four year Delivery Program and annual Operational Plan.  The Plan provides details of how Council will fund proposed activities and how Council will measure its performance.

Following a series of internal workshops with Councillors, the draft Operational Plan
2014/15 has been prepared and details Council’s activities and Revenue Policy for
2014/15.  It incorporates the strategies of the Community Strategic Plan 2026 for the four year  period  identifying  those  activities  which  are  operational  (recurrent  or  annual) activities or capital works and new initiatives to be undertaken.

An overview of some of the key features contained in the Council’s combined Delivery Program 2014/15-2016/17 and Draft Operational Plan 2014/15 is provided below.  The aim of the Plan is to provide a solid financial framework to ensure infrastructure and


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Council services can be provided to meet the requirements of residents and ratepayers as far as is practicably possible.

The 2014/15 Draft Operational Plan has been prepared predicting an increase of 3% in wages and material costs.

General Rates
In 2010, changes were made to the Local Government Act 1993 to delegate the task of setting the annual rate peg away from the Minister of Local Government and passed it on
to the Independent Pricing and Regulatory Authority (IPART).

In December 2013, IPART announced that the 2014/15 Rate Peg Determination would be 2.30%.   The rate pegging limit has been reflected in the Draft Operational Plan
2014/15 and will provide an additional income of $263,041 on the General Rate income to be received in 2014/15.

Following a general revaluation of the Lithgow Local Government Area by the Valuer General of New South Wales, the new valuations as at 1 July 2013 will be applied for the pending 2014/15 annual rate levy.

As per the valuations provided to Council by the Valuer General’s Office, the 2013 revaluation resulted in a land valuation change of -2.44% from the base year 2010.  The Residential Zone A category resulted in a total valuation movement increase of 0.5%.

Fees and Charges
The Council has reviewed its fees and charges to ensure that they contribute to a balanced budget.   Some fees and charges are set by legislation which may result in some increases not being in line with the general Council index. Council controlled fees and charges were generally increased by 3.5%.

Interest Income
The interest income earned on Council’s investments is impacted by the average level of funds invested and the interest rates available. Whilst it is extremely difficult to forecast future interest rates, the budget includes a slight reduction in rates from the current
3.41% to 3.25%. Expected changes in Financial Institution regulations scheduled to come into effect early in 2015 will require banks to hold more capital to support their loan portfolios. This is anticipated to reduce interest rates offered in short term deposits (up to
180 days) to Council which will affect the level of interest income expected to be earned by Council.

Parking Rates
The Special Parking Rate will be levied on 153 CBD business properties within the designated area of Lithgow.   This rate is to fund the maintenance of parking facilities within the designated area. Council will apply the ad valorem rate for 2014/15, 0.9193 which will be applied to the valuations of applicable properties. This will generate income of $237,831.24 (GST exclusive).

Special Rate Variation – Infrastructure Levy
Council resolved in 2009 to apply to the Minister for Local Government for a special rate variation for infrastructure improvements in the local government area.   The variation


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was approved for a 10 year period.  Funds raised by this special rate are being used to improve many of the local roads and community buildings.

Council continues to apply for grants to both the State and Federal Governments and for corporate sponsorship in addition to the special rate to progress improvements as quickly as possible.

The works funded by the Special Rate Variation in the following table are included in the combined Delivery Program 2013/14 – 2016/17 and Draft Operational Plan 2014/15:


Proposed Infrastructure Levy: Special Rate Variation s508 (2) of the Local Government Act 1993

2014/15
2015/16
2016/17
Roads
Browns Gap Road
105,000
110,000
115,000

Hampton Road

103,000

110,000

115,000
Reseals - 10mm
120,000
120,249
122,366
Lithgow/ Portland Lanes
90,101
90,000
90,000

Total Road Improvements

418,101

430,249

442,366
Buildings
Golf Club
15,000


Lake Wallace Toilets: Refit Interior & Security
37,000


General Asset Building Maintenance
51,500
107,000
111,000
Total Building Improvements
103,500
107,000
111,000

TOTAL EXPENDITURE SPECIAL RATE

521,601

537,249

553,366

Section 94A Levy Contributions
Council has undertaken a review of its Development Contributions Framework and has proceeded with the introduction of a Section 94A Levy Plan that will apply across the LGA.

Note: The table below identifies the Section 94A Levy Contribution portion only for each project.


Proposed 3 Year Works Program – Section 94A Levy
Contributions

2014/15
2015/16
2016/17
Roads
Rural Roads Rehabilitation
100,000
100,000
100,000
Town & Village Drainage
50,000
50,000
50,000
Buildings
Aquatic Centre Stage 4
100,000
100,000
100,000
CCTV
10,000
10,000
10,000

Total Expenditure Section 94A

260,000

260,000

260,000


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Waste Charges
Due  to  the  further  development  of  the  waste  disposal  facility  at  Blackman’s  Flat, upgrading of the Lithgow Solid Waste Facility and the closure and rehabilitation of rural landfills during 2014/15 it is recommended that the residential and business garbage charge be increased by $13.55 per property from $387.00 to$400.55.


Waste Charges
Type of Service
Charge
($) (GST ex)
Estimated Yield ($) (GST ex)
Residential
400.55
3,307,741
Business
400.55
251,943
Non Rateable
400.55
50,869
Unoccupied Urban
148.55
84,819
Rural
95.77
223,150
Total Estimated Yield
3,918,522

Stormwater Charges
It is proposed that the following stormwater charges will be levied on all residential and business properties within identified urban areas (except those which are vacant land) and remain unchanged from the 2013/14 stormwater charges.  The levy is used to partly fund  the  maintenance  and  improvements  to  urban  drainage  as  well  as  the  flood mitigation works at Farmers Creek, Lithgow.


Stormwater Charges
Type
Charge
($)
Estimated Yield
($)
Residential
25.00
152,900
Strata Unit (Residential)
12.50
1,263
Business
25.00 per 350sq metres
($1,500 Cap)
88,050

Total Estimated Yield

242,213

Grant Funding and Corporate Sponsorship
The Council is continuing to apply for funding from the State and Federal Government and  other  sources.  Council  is  planning  for  a  significant  upgrade  of  the  Portland Sewerage Treatment Plant and will receive a total of $10 million in grant funding in
2015/16 from the Resources from Regions program.

Council has secured $4.2 million of funding from the NSW Office of Environment and Heritage  for  flood  mitigation  works  to  be  undertaken  on  Farmers  Creek  from  Tony Luchetti Sportsground to Glanmire Oval.  Council is required to contribute an additional
$2.1 million in funding for Flood Mitigation Works.

Best Practice Water and Sewer Pricing
In 2010/11 Council was required as part of the funding conditions from the NSW State Government for the upgrade of the Lithgow Sewerage Treatment Plant to introduce major changes to its Water and Sewer Pricing which would see best practice in line with industry standards.


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The  2014/15  water  pricing  structure  ensures  the  Lithgow  local  government  area maintains water charges in compliance with the NSW Best Practice Guidelines of 75% of residential income from usage and 25% of revenue from access charges.

Council has reviewed in detail the water consumption pattern of the last 15 years and has resolved to continue using the two tier structure that is currently in place.

Sewerage Charges
Over recent years Council has spent approximately $30 million in the upgrade of the Lithgow and Wallerawang Sewerage Treatment Plants.  Plans are also being made to upgrade the Portland Sewage Treatment Plant.

In 2014/15 the following residential or business sewage access charges will be levied on all rateable and non rateable properties which are connected to or within 75 metres of Council’s reticulated sewerage system:

The sewerage access charge has been held at the 2013/14 level to offset the water access increase.

The following sewerage usage charges will be levied to all properties using Council's reticulated sewerage system:


Sewerage Charges

Sewerage Access Charge
Type
Charge
($)
Estimated Yield
($)
Residential
836
5,964,024
Less write-off pension rebate

-160,000
Business (main size):
200mm
1,085
651
100mm
1,085
22,210
50mm
954
55,761
20mm
720
256,032

Total Estimated Yield

6,138,678

Sewerage Business Usage Charges
Type
Charge
($)
Business (most commonly 95% of water
usage)
1.55

Water Charges
The residential or business water availability charge will be levied on all rateable and non rateable properties which are connected to or within 225 metres of Council's reticulated water supply system.  Water usage charges will be levied to all properties using Council's reticulated water supply system.

The  average  residential  water  consumption  for  2012/13  was  168kl  with  82%  of residential properties consuming less than 250kl in the year.


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Water Charges

Water Availability Charges
Type
Charge
($)
Estimated Yield
($)
Residential
150
1,155,900
Less write-off pension rebate

-172,988
Business (main size):
200mm
970
970
100mm
970
26,195
50mm
854
64,877
20mm
645
268,195

Total Estimated Yield

1,343,149

Water Usage Charges
Kilolitres Used
Charge
($)
0 – 250 Residential
2.96 / kl
250+ Residential
4.45 / kl
All business – Flat rate
2.96 / kl


Residential Water and Sewer Access Charges

Charge

2013/14

2014/15

Increase
Water Access
$135.00
$150.00
11.11%
Sewerage Access
$836.00
$836.00
0.00%

Total     Combined     Access
Charges

$971.00

$986.00

1.54%

Interest charges on outstanding property balances
Interest to be charged on rate and charges arrears has been determined by the Division of Local Government which is to be 8.5% in 2014/15.  This is a reduction of 0.5% from the 2013/14 rate of 9.0%.

Capital projects and discretionary expenditure
To  highlight  major  capital  projects  and  discretionary  expenditure  in  the  combined
Delivery Program and Draft Operations Plan they may be summarised as:


Capital Projects & Discretionary Expenditure: Summary of Major Projects

Expenditure
Income
2014/15

General Fund

Executive
LG Election (Future years to Reserve )
35,000

35,000

Operations
Bridge Improvements
104,300

104,300
Kerb & Gutter Construction
87,283

87,283
Footpath Construction
95,760

95,760
Rural Roads Improvements: Gravel Re-sheeting
201,366
150,000
51,366
Roads to Recovery Program
560,000
560,000
0
Infrastructure Levy Program (2009/10 DLG Application 5% Special Rate Variation)
Infrastructure Levy Program (5% Special Rate: Income in Operating)


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Browns Gap Road
105,000

105,000
Hampton Road
103,000

103,000
Reseals – 10mm
120,000

120,000
Lithgow/Portland Lanes
90,101

90,101
Golf Club
15,000

15,000
Lake Wallace Toilets: Refit Interior & Security
37,000

37,000
General Asset Building Maintenance
51,500

51,500
Sec 94/94A Plan
Rural Roads Rehab
100,000

100,000
Drainage Construction
50,000

50,000
Aquatic Centre Stage 4 – Loan Servicing
100,000

100,000
CCTV
10,000

10,000

Operations Miscellaneous
CBD Enhancement
400,000

400,000
Guardrail Installations
30,900

30,900
Line Marking
30,000

30,000
Tree Removal Contract
20,000

20,000
Bus Shelters
11,330

11,330

Floodplain Management
Flood Mitigation
3,207,503
3,138,335
69,168

Recreation
Streetscape Improvements
25,754

25,754
Tony Luchetti Improvements
75,750

75,750
Lake Lyell Improvements
72,900

72,900
Aquatic Centre – Stage 4
2,000,000
2,000,000
0
Watercourse   Maintenance   /   Farmers   Creek
Vegetation

20,600


20,600
Cemetery Improvements
49,664

49,664

Plant
Light / Heavy Vehicles – Including to Reserve
1,337,000
337,000
1,000,000

Buildings
Capertee Toilet
100,000
100,000
0
Lake Lyell Amenities
14,500

14,500
Rydal Toilet Block – Land Purchase
40,000

40,000
Other
870,200
150,000
720,200

Planning
Rural Lands Study
80,000

80,000
Marrangaroo DCP Masterplan
150,000

150,000

Corporate
Lithglo
25,750

25,750
Xmas: Main St Decorations Duplicated above
14,300

14,300
Economic Promotions
40,000

40,000
Main St Fa├žade Program
20,000

20,000
CBD Business Attraction Program
150,000

150,000

Information Technology
IT Reserve as programmed
206,900
41,900
165,000

Library
Resources
118,775
22,000
96,775
E-Book Service
10,000

10,000

Community & Culture
Youth Day Activities
3,000
1,500
1,500
Blast Furnace Park & Inch Street Bridge
322,000
172,000
150,000

Youth Program

5,000


5,000


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Borrowings
The 2014/15 budget Council projects borrowings of $3,000,000 for the General Fund to carryout the following works:

Aquatic Centre Stage 4             $2,000,000
Flood Mitigation                         $1,000,000

Community Engagement
The  Draft  Delivery  Program  2013-2017  and  Draft  Operational  Plan  2014-2015  is provided for Council’s consideration to place on public exhibition for a minimum period of
28 days.  Closing date for public submissions will be Friday 23 May 2014.  This will allow the document to be put to the Council on 2 June for adoption.

Should the Council endorse the Combined Delivery Program 2013/14 – 2016/17 and Draft Operational Plan 2014/15, community briefing sessions will be held on the following days and times:

 Wednesday 30 April, 6.30 - 7.30pm - Rydal Mount Guest House
 Thursday 1 May, 6.30 – 7.30pmOld Hartley School
 Wednesday 7 May, 6.30 – 7.30pm – Capertee Memorial Hall

Staff will also be available at the Lithgow, Portland and Wallerawang Libraries. Times and dates here are yet to be determined.

Council’s   Corporate   Strategy   and   Communications   Officer   will   be   available   by appointment for interested  members  of  the  community  wishing  to  discuss  the  Draft Operational Plan 2014/15.

POLICY IMPLICATIONS
NIL arising from the report.

FINANCIAL IMPLICATIONS
The financial implications of the combined Delivery Program 2013/14 – 2016/17 and
Draft Operational Plan 2014/15 are detailed in the financial plans provided.

LEGAL IMPLICATIONS
The Local Government Act 1993 and Local Government (General) Regulation 2005 outlines requirements for the preparation, exhibition and adoption of the management plans.  The Draft Operational Plan must be exhibited for a minimum period of 28 days.

ATTACHMENTS

1.     The combined Delivery Program 2013/14 – 2016/17 and Draft Operational Plan
2014/15.
2.     Draft Fees and Charges 2014/15.


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RECOMMENDATION

THAT:
1.     The combined Delivery Program 2013-2017 and Draft Operational Plan 2014-
2015 be placed on public exhibition for a minimum of 28 days.   This will include the following documents:
a.   The  combined  Delivery   Program  2013/14  –  2016/17  and  Draft
Operational Plan 2014/15.
b.   Draft Fees and Charges 2014/15.
2.     The closing date for submissions is Friday 23 May 2014.


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