Late Items Agenda of Ordinary Council Meeting

SUPPLEMENTARY Agenda

Corporate Business Plan and Annual Budget

CS01-06/18 Adoption of 2018/19-21/2022 Corporate Business Plan & 2018/19 Annual Budget.

File Ref: 32361 – 18/191919

Responsible Officer: Director Corporate Strategy & Performance

Disclosure of Interest: Nil

Attachments: 4

Issue

To consider the adoption of the City’s Corporate Business Plan 2018/19 – 21/22 (CBP) and 2018/19 Annual Budget (Budget).

Background

A series of Integrated Planning and Budgeting Workshops (Workshops) were held with Elected Members which focussed on reviewing and developing the CBP, Capital Works Program, the Operating Budget and the various other elements of the Budget. To apply prudent financial management practices in guiding the development of the Budget, Council adopted a Strategic Budget Policy on 23 March 2018.

The following key economic parameters have been used in preparing the budget:

· Local Government Cost Index: 1.5% (WALGA) (This affects contract costs for capital projects);

· Forecast 2018/19 population/ratepayer growth: 4.0% (id Forecast);

· Forecast 2018/19 average interest rate return on investments: 2.5%;

· Forecast CPI over the next 12 months: 2.25% (RBA); and

· The Long Term Financial Plan 2017/18 – 35/36 (LTFP).

This report is the culmination of the development work and input from stakeholders into the 2018/19 integrated planning and budgeting process.

Detail

Corporate Business Plan 2018/19 – 2021/22

The Corporate Business Plan (CBP) forms part of the City’s Integrated Planning Framework (the Framework) as required under the Local Government (Administration) Regulations 1996. This Plan activates the ten-year Vision and Strategies of the Strategic Community Plan; it also addresses operational planning and resourcing as it relates to asset management, financial management and workforce management.

Reviewed on an annual basis and aligned with the annual budgeting process, the CBP (Attachment 1) contains the four-year Priorities and associated Annual Actions for each of these years. It also provides an overview of the range of services and capital sub-programs that will be delivered during this timeframe. Administratively, the CBP is cascaded through operational-level Service Plans that provide a closer look at core business activities planned for the forthcoming financial year. Whilst not a statutory requirement, service planning supports the implementation of the CBP; it also enables prioritisation of workforce, asset, and financial resources through a consideration of the service levels, and additional projects or one-off actions for the year.

The key elements of the Integrated Planning and Reporting Framework and their inter-relatedness are depicted in Figure 1 on the following page. The ten-year Strategic Community Plan provides Council’s direction on the key strategies that will deliver on outcomes and aspirations as informed by our community. These are translated into medium term priorities that dictate the more immediate annual actions as detailed in the Corporate Business Plan. Regular reporting on delivery of this Plan ensures that we remain accountable to Council and our community on our commitments. A suite of Resourcing Plans provide capacity through assets, workforce, and financial resourcing; these are critical to enabling delivery of the CBP and achievement of the longer term outcomes for our community. For this reason, it is imperative that these are reviewed and well integrated as part of the annual planning and review process, so that they reflect any recalibration of the CBP or changes in Council priorities:

Figure 1: Integrated Planning and Reporting Framework

Development of the Corporate Business Plan 2018/19 – 2021/22

The Corporate Business Plan 2018/19 – 2021/22 has been developed iteratively with Elected Members through a review of the Strategic Community Plan 2017/18 – 2026/27 aspirations, community outcomes and strategies; an assessment of the key focus areas to be prioritised for the next four years; and identification of the associated annual actions to be delivered and their resource implications.

The process commenced in August 2017 with review by the Executive Leadership Team of overall performance against the previous year’s commitments, the actions being delivered in the current 2017/18 year, and a consideration of the current and anticipated operating context. This context included the prevailing social, economic, environmental, and legislative factors at a local, regional, state, and national level, and encompassed the associated opportunities, challenges, and risks. A review of the mid-year (MYR) position in delivering on the 2017/18 commitments of the current CBP 2017/18 – 2020/21 then further informed re-prioritisation and forward planning for 2018/19 and beyond.

Elected Members provided broad initial direction to conduct the review, and more specific detail subsequently to develop the Plan through a series of workshops (held during February – May 2018). This included the setting of priorities and parameters for the development of the CBP and associated resourcing plans; clarity on the Priorities to be focused on for the next four years; and the associated high level Actions to deliver on these. Detailed discussions occurred on capacity and capability to deliver on these, giving consideration to the current workload through service delivery (business as usual), delivery on the Capital Works Program, and future commitments of recently adopted strategies and plans. A conservative approach has been taken to minimise the addition of new initiatives to the Plan and to ensure capacity is effectively aligned to deliver on the Council-endorsed plans and projects, many of which are already underway. The final draft of the Corporate Business Plan Priorities and Annual Actions was presented to Elected Members for review in May 2018.

The Corporate Business Plan 2018/19 – 2021/22 as attached includes the Priorities and Actions that were agreed with Elected Members following this final review. In its current form, the publication is unbranded; corporate branding will occur following Council adoption of the Plan and this will be made publically available both in electronic (via the City’s website) and limited print form.

2018/19 Annual Budget

In developing the Budget, consideration has been given to the local and national economic climate with no major changes indicated in the short to medium term. Australia’s domestic growth is demonstrating some uncertainties, though inflation is anticipated to continue in the target range of 2-3% in the 2018/19 financial year, supported by a record low interest rate environment (cash rate is currently 1.50% - per June 2018 Reserve Bank of Australia meeting).

When compiling the Budget consideration was given to relevant commentary and forecasts provided through the State and Federal Budgets. Both of these Budgets were released in May 2018 and provided some uncertainties and challenges in the short to medium term for the City, its services and for our community in general. It is noted that investment returns will remain subdued while pressure on costs and the need to maintain and provide new infrastructure continues.

The City’s financial performance has been monitored throughout the current financial year to determine end of year forecasts and funding capacity for 2018/19. As the final end of year processes will not be completed until September 2018, it is likely that the actual result will change with the final end of year Surplus/(Deficit) identified in the Rate Setting Statement (RSS) to be transferred to the City's Strategic Projects/Initiatives Reserve per Council policy.

The following documents provide a comprehensive outline of the proposed 2018/19 Budget:

· 2018/19 Statutory Budget (Attachment 2);

· 2018/19 Schedule of Fees & Charges (Attachment 3); and

· 2018/19 Capital Program including 2017/18 Carry Forward Projects (Attachment 4).

The size of the City's Budget continues to grow, primarily due to:

· The increase in Waste Costs as levied by Mindarie Regional Council (MRC)

· Growth in the service area and population (expansion of service);

· Community expectation and needs;

· Cost factor movements such as CPI and employee costs (resulting in increases to costs of services);

· Government charges which are higher than CPI – electricity, water and transport fees.

The development of the 2018/19 Budget is a direct outcome of the work undertaken through the review of the CBP as part of the IPR process and based on a 4.0% growth factor.

Attachment 2 provides the detailed Budget, with the Statement of Comprehensive Income (by Nature & Type) reflecting a 2018/19 budgeted Net Result of $62.8 million, being a decrease from the 2017/18 estimated actual of $73.1 million. This reduction is primarily the result of a reduction in developer contributed assets.

The Net Result forms the basis of reporting organisational performance under Australian Accounting Standards and includes Non-Operating items such as Grants & Contributions and Town Planning Scheme (TPS) Income & Expenses. Furthermore, current reporting requirements provide for the recognition of the value of physical assets contributed by Developers as Non-Operating Income. To better assess financial performance reference to the Underlying Operating Result is recommended, as detailed below.

The Underlying Operating Result excludes Non-Operating items such as Non-Operating Grants & Contributions, TPS Income & Expenses and Physical Assets received from Developers. It is the City’s aim to achieve a balanced and therefore financially sustainable Underlying Operating Result. Whilst the estimate for 2017/18 is a Surplus of $3.5m, the final figures will be reported in the audited annual financial statements later this year. For 2018/19 a Surplus of $4.9 million is budgeted. This Surplus will be used to fund capital and reserves for future expenditure.

In developing the Rating Strategy the City has endeavoured to retain equity, transparency and fairness in the process by ensuring that the setting of the Minimum Rate and calculation of the General Rate (Rate-in-the-Dollar) only recovers an amount which is considered essential to the running of Council activities and the Council’s long term financial sustainability.

The modelling used in deriving the Rates has incorporated the latest valuations provided to the City by the Valuer General. It should be noted that properties rated on an Unimproved Value (UV) basis are revalued annually, whereas Gross Rental Values (GRV) are revalued every three years.

The Rates-in-the-Dollar and Minimum Rates that have been proposed deliver an overall average rate revenue increase of 2.49% (0.46% lower than the advertised percentage), with an average increase of 2% for the Residential Improved category (which applies to 89% of Ratepayers). This is within the forecast CPI increase.

Mindarie Regional Council (MRC) will increase gate fees which will negatively impact operations and costs in 2018/19. This is calculated at approximately a $2.2m increase in Waste costs including a 7% increase in the Landfill Levy as imposed by State Government. It is preferable to ensure Waste costs are fully recovered eliminating the need to subsidise this service through reductions in other projects or programs within the City.

As a consequence of the escalating cost in Waste for 2018/19 these costs will be separated from Rates which will provide a number of benefits. This includes greater transparency in costs and ability to influence consumer behaviour that will lead to reduced landfill.

Guided by the Strategic Budget Policy the separation of Waste from Rates will help the City meet the following principles;

• Transparency: Adequately disclosing charges;

• Equity: Pricing model is equitable and fair;

• Intergenerational: Financial Stewardship for future needs;

• User Pays: Setting fair and equitable rates will endorse the User Pays principle.

The City engaged PricewaterhouseCoopers (PWC) to review and update their 2009 report titled “Best Practices in Funding Rapidly Growing Local Governments”. The 2009 report has been used by the City in its rate setting decisions. The 2017 PWC report titled “Review of City of Wanneroo Key Financial Performance Indicators (20 October 2017)”, will continue to help provide Council with guidance in rate setting as well as non-rate revenue settings.

Findings from the 2017 report confirmed the need for the City to more closely consider its Rate Setting. PWC specifically noted that for the City to maintain financial sustainability Rates needed to increase above CPI. In addition PWC also noted the City needed to more closely consider Fee Setting policies. This resulted in Council altering its strategic budget Policy in March 2018 noting Rates increase should be a minimum of CPI +2% each year.

In the 2017/18 Budget Adoption, Council approved the waiver of Council Rates (excluding the ESL) for community groups. For 2018/19 the value of Rates revenue proposed to be waived for these groups is approximately $98k.

Comments relating to the changes in each operating income and expense category comparing to the 2017/18 Actual (Estimates), are provided below:

Operating Income $193.9 million (+$8.6 million/+4.6% against 17/18 Actual (Estimates))

· Rates Revenue $131.0 million (-$21.0 million/-13.8%)

The material reduction in Rates revenue reflects the dissection of Waste income from Rates income, the Waste Fee being is now included as part of Fees and Charges. Excluding the impact of the split of Waste from Rates, the 2018/19 Rates Revenue is showing a 4% increase over last year which is based on the 2.49% overall average Rates increase and rateable property growth.

· Operating Grants, Contributions & Subsidies $9.1 million (+$1.0 million/+11.8%)

The largest contributor within this category is the annual funding to the City from the Grants Commission. The City is expecting to receive more income for this category in 2018/19 despite the State Government scaling back its grants.

The budget accounts for the reduction in the City’s Home and Community Care (HACC) services ($2.5m) given HACC ceased on 31 March 2018. Further, the Kidsport Grant Funding will not be available in 2018/2019. Last year this grant totalled $490k. The budget accounts for Financial Assistance Grant at $6.4m

· Interest Earnings $8.9 million (+$.03 million/+0.3%)

With the official cash rate at historically low levels the interest earning potential of the City has been reduced.

· Fees & Charges $44.15 million (+$28.7 million/+185%)

For 2018/19 Council is proposing a new Fee specifically relating to Waste. This Fee has arisen as a result of additional costs being levied by the Mindarie Regional Council (MRC). Previously costs associated with Waste were included as part of the City’s Rates charge. By dissecting the cost of Waste from Rates and including them as part of the City’s Fees and Charges, the additional costs being levied by MRC will not only be covered, but the City will also adhere to its principles of:

· Transparency: Adequately disclosing charges

· Equity: Pricing model is equitable and fair

· Intergenerational Equity: Financial Stewardship for future needs

· User Pays: Setting fair and equitable rates will endorse the User Pays principle.

It is important to note that dissecting Waste from Rates will in some instances alter the quantum of rebate claimable by pensioner households. This will arise as the rebate offered by the State Government is based on total Rates payable, and by subtracting Waste from Rates will in some instances result in this figure attracting a reduced rebate. To help mitigate the impact of this cost imposition the City will be offering a discount to certain pensioner groups.

The discount will be phased in over a two year period and will add to the City’s costs in year one by $360k. The proposed discounts are:

1. Pensioner Owned Residential Properties - Rates up to $971; the proposed discount is $98;

2. Pensioner Owned Residential Properties - Above Minimum Rates $971 to $1,382; the proposed discount is $45.

When adjusted for the Waste Fee, total Fees and Charges for 2018/19 is showing a neutral increase when compared with 2017/18.

It is important to note that Council has established a Revenue Review Committee to assess and optimise future revenue potential arising from the City’s Fees and Charges.

· Other Revenue $0.7 million (-$0.01 million/-2%)

The main contributor to the unfavourable variance for Other Revenue is due to the temporary closure of Aquamotion.

Operating Expenses $189.0 million (+$7.2 million/+4%)

Consistent with the economy at large the City of Wanneroo continues to face cost pressures. These are reflected in the Local Government Cost Index (LGCI) which over the past 12 months has increased by 1.5%. The City also faces additional cost pressure reflective of an expanding and growing community, which can be seen in Employee Costs, Materials and Contracts, and Depreciation.

· Employee Costs $72.9 million (+$2.2 million/+3%)

The increase in Employee Costs is reflective of the City’s enterprise agreements.

· Materials & Contracts $60.4 million (+$3.5 million/+6%)

The main contributor to the increase relate to the area of Refuse Removal Costs due to an increase in gate fees at MRC of $2.2 million.

· Utility Charges $9.7 million (+$0.1 million/+1%)

Utility charges comprise Electricity, Gas & Water costs are based on forecast unit charges together with any growth in usage. Whilst there are increases across these cost areas the Street Lighting component is the most substantial. Budget calculations for Street Lighting were based on the actual number of fixed lights currently charged with an allowance for Tariff increases.

In May 2018 the State Government handed down its second budget which included a number of increases to Fees & Charges. Of note power prices have increased by another 7%, water by 6% and motor vehicle licensing costs by 3.8%. These increases have been factored in the 2018/19 Budget. Through many initiatives which include Energy Efficient LED street lighting and water saving devices, the City has managed to contain the cost of utilities across all service units, and as a result the annual increase for 2018/19 has been contained to 1%.

· Depreciation $40.4 million (+$1.4 million/+4%)

The increase in costs is due to the growth in assets held by the City and contributed by Developers, and the revaluation exercise undertaken during the 2017/18 financial year.

· Interest Expenses $4.1 million ($0.0 million/0%)

Interest Expenses relate to a loan agreement with Western Australian Treasury Corporation (WATC) secured in 2006/07. This loan has been fully drawn and interest only payments will be made until the principal falls due in 2026.

In addition, the City in partnership with Property Developers undertook capital projects in the Yanchep/Two Rocks area. Due to the lack of funds in the reserve a loan was arranged and this loan will be paid back using Property Developer contributions.

It is noted that the Developer Contribution Plan covers a ten year period from 9 September 2014 to 8 September 2024. The DCP sets out the specific works covered by the Agreement, costings and the portion for which each party is liable and timeframes for the works to be undertaken. This loan is anticipated to incur approximately $0.3 million in interest per year, for which a transfer will be made from the Yanchep/Two Rocks District Community Facilities Reserve.

· Insurance Expenses $1.5 million (+$0.02 million/+1.5%)

The Insurance Expenses budget for 2018/19 is expected to increase by CPI only due to improved management of assets/resources.

Capital Program

The Capital Program is developed with the aim of balancing the demands for new infrastructure against the need to maintain, renew, upgrade and replace existing assets. The Capital Program is supported by Asset Management Plans. The Capital Program for 2018/19 allocates 46% of the Budget to upgrades, 29% to new work and 25% to renewal work.

The Capital Program has been set and prioritised based on a process of consultation and SCP based on community input with Elected Members that has enabled the City to assess the needs for each project and the priorities of the community, balanced against the City's financial and resourcing capacity.

The Capital Program for 2018/19 is proposed to be $67.2 million (excluding carry forward projects). Of the $67.2 million, funding will come from:

$ Million

· Grants & Contributions 22.7

· TPS’s 0.3

· Loans 2.0

· Reserves 17.1

· Municipal 25.1

Major projects include:

$ Million

PMO18063 Neerabup Industrial Area, Neerabup, New Industrial Area Development 0.5

PMO18014 John Moloney Park, Marangaroo, Upgrade Sports Floodlighting 0.7

PMO17008 Kingsway Netball Clubrooms, Madeley, Upgrade Building 0.9

PMO18062 Carramar Golf Course, Carramar, Renew Main & Arterial Reticulation Lines 1.0

PMO17143 Hudson Park, Girrawheen, Upgrade Dennis Cooley Pavilion 1.1

PMO16064 Kingsway Olympic Clubrooms, Madeley, New Change Rooms & Grandstand

1.5

PMO16052 Neerabup Industrial Area, Neerabup, Upgrade Roads & Services Infrastructure 1.6

PMO16135 Edgar Griffiths Park, Wanneroo, New Sports Amenities Building 1.6

PMO18093 Pinjar Road, Banksia Grove, Upgrade To Dual Carriageway From Blackberry

Dr To Joondalup Dr 1.9

PMO17047 Mirrabooka Ave, Landsdale, Upgrade To Dual Carriageway From Hepburn Ave To Gnangara Rd 2.5

PMO1523 Quinns Beach, Quinns Rocks, New Long Term Coastal Management Works 2.9

PMO16061 Butler North District Open Space, Butler, New Sports Facilities 4.0

PMO18104 Marmion Ave Upgrade To Dual Carriageway From Butler Bvd To Yanchep Beach Rd 12.0

Progress reporting on these projects will be provided to Council with the Statement of Financial Activity on a monthly basis.

A detailed listing of all individual projects comprising the Capital Program is included in Attachment 4.

Carry Forward Capital Projects

At the end of the financial year it is anticipated that some projects and plant replacements will be either incomplete or not commenced which is due to:

· The size and complexity of projects which will by their very nature need to be segmented over multiple financial years to accommodate accurate development and effective delivery; and

· Projects which suffer delays and interruptions which can result from a range of issues such as scoping, definition or budget clarification, extended consultation periods, planning and approvals, 3^rd party/statutory bodies and contractual delays.

In analysing the profile of anticipated carry-forward projects from 2017/18 it is estimated that $16.2 million worth of Capital Projects will be carried forward. This will notionally bring the total capital program for 2018/19 to $83.4 million.

The carried forward project component is fully funded from the 2017/18 Budget (Attachment 4). Actual amounts may be adjusted based on the final end of year results.

The carry forward projects are supported by the following funding sources:

$ Million

· Grants & Contributions 2.3

· TPS’s 0.0

· Loans 1.4

· Reserves 7.9

· Municipal (to be transferred to Reserve) 4.6

Reserves

In order to meet the funding requirements of the Budget and future commitments a range of Reserve transfers are proposed. Details of these transfers are provided as part of the Notes to Accounts included in Attachment 2.

In accordance with the adopted Strategic Budget Policy and the LTFP, it has been possible to improve the City’s Reserve funding capacity, which will enhance the City’s ability to sustainably meet future demands and liabilities. This is illustrated by the incorporation of a $2.0 million transfer to the Asset Renewal Reserve acknowledging the City has a growing asset base and asset renewal demand in future years that will require funding. This will be achieved by increasing allocations to the Asset Renewal Reserve in alignment to the depreciation charge. Additionally there is a $3.0 million transfer to the Coastal Management Reserve to assist the City in managing its 32 kilometres of coastline. A transfer of $3.0 million to the Regional Open Space Reserve will be made to allow the City adequate funding for future developments.

Rate Setting Statement (RSS)

The RSS represents a composite view of the finances of the City. It highlights the movement in the Surplus/(Deficit) which is primarily based on the operations and capital revenue and expenditure, as well as all transfers (Reserves and TPS). The bottom line shows the resulting Rates income to be levied in order to meet budgetary requirements.

Calculations for the 2018/19 RSS identified the need to raise $131.0 million through Rates, which equates to a 2.49% overall average Rating increase. However the proposed Residential Improved category (representing 89% of the total rateable properties) will receive a 2.0% overall average increase.

In accordance with the City’s Financial Cash Backed Reserves Policy, any unallocated Surplus/(Deficit) from the RSS is to be transferred to/(from) the Strategic Projects/Initiatives Reserve. For 2017/18 an estimated unallocated Surplus of $0.8 million is expected to be transferred to this Reserve, while an amount of $2.6 million has been budgeted to be transferred to this reserve for 2018/19.

Consultation

A series of integrated planning workshops engaging Elected Members and the Executive Leadership Team commenced in February 2018 to develop the Corporate Business Plan and Annual Budget.

In accordance with the requirements of Section 6.36(1) of the Local Government Act 1995 a local public notice was published on 11 May 2018 detailing proposed Differential General and Minimum Rates for 2018/19. This provided the opportunity for ratepayers to comment and ask questions. The Rates advertised were designed to meet a Budget Deficiency of approximately $131.0 million. Three submissions were received by the closing date with concerns surrounding the question of Rates increase and the level of community services. The City has responded to these residents and provided explanation.

Comment

In developing the Budget various economic and legislative factors have been considered. The most influential driver of the Budget is the CBP. The Corporate Business Plan documents 4 years of annual activities based on the Strategic Community Plan Priorities.

For 2018/19 a Surplus Result from Operations of $4.9 million is anticipated, whilst setting an average increase in Residential Improved Rates of 2.0%. This compares to the Long Term Financial Plan (LTFP) where the projected increase in Rates (excluding the cost of Waste) for 2018/19 was set at 2.5%.

In summary the Budget reflects prudent management of the City’s funds balanced by the needs of a growing community.

Statutory Compliance

In accordance with the requirements of the Local Government Act 1995 and Local Government (Administration) Regulations 1996, local governments are required to implement a plan for the future, as reflected in the City’s ten-year Strategic Community Plan and the annually reviewed rolling four-year Corporate Business Plan.

The accompanying Budget for 2018/19 has been prepared in accordance with the Local Government Act 1995 (the Act), Local Government (Financial Management) Regulations 1996 and Australian Accounting Standards.

Pursuant to Section 6.36(1) of the Act, the City has given the appropriate notice of its intention to impose Differential General Rates and Minimum Rates in respect of each Differential Rate Category.

In accordance with Section 6.36(5), the City may modify the proposed Rates and Minimum Payments after considering any submissions, without the requirement for further local public notice. The final Differential General Rates and Minimum Rates to be applied in imposing the 2018/19 Rates 2.49% opposed to 2.95% advertised.

In considering the Budget and subsequent reporting it is also important to consider Regulation 34(5) of the Local Government (Financial Management) Regulations 1996. This regulation requires a local government to adopt a percentage or value, calculated in accordance with Australian Accounting Standards, to be used in statements of financial activity for reporting material variances. For 2018/19 it is recommended that the Council adopts 10%, with a minimum value of $100,000 for the reporting of material variances.

Strategic Implications

The proposal aligns with the following objective within the Strategic Community Plan 2017 – 2027:

“4 Civic Leadership

4.2 Good Governance

4.2.2 Provide responsible resource and planning management which recognises our significant future growth”

Risk Management Considerations

Risk Title	Risk Rating
ST-G09 Long Term financial Planning	Low
Accountability	Action Planning Option
Director Corporate Strategy and Performance	Manage

Risk Title	Risk Rating
Financial Management	Moderate
Accountability	Action Planning Option
Executive Management Team	Manage

The above risk/s relating to the issue contained within this report has been identified and considered within the City’s Strategic and Corporate Risk register. Action plans have been developed to manage this risk to support existing management systems.

Policy Implications

The budget has been developed in accordance with the Strategic Budget Policy and Accounting Policy.

Financial Implications

Adoption of the CBP and Budget will allow for the timely implementation of identified Actions and associated Capital Program. The LTFP will be updated following adoption.

Voting Requirements

Absolute Majority

Recommendation

That Council by an ABSOLUTE MAJORITY:-

1. ADOPTS the unbranded Corporate Business Plan 2018/19 – 21/22 (Attachment 1);

2. ADOPTS the Annual Budget for the Financial Year Ending 30 June 2019 (Attachment 2), incorporating:

2.1 Statement of Comprehensive Income, showing Total Comprehensive Income of $62,749,187 Surplus.

2.2 Statement of Cash Flows, showing cash at end of year position of $349,072,643.

2.3 Rate Setting Statement, showing the need to generate $131,005,140 through the levying of Rates.

2.3 The Notes To and Forming Part of the Budget.

2.4 2018/19 Schedule of Fees & Charges (effective from 2 July 2018), and

2.6 2018/19 Capital Program (including 2017/18 Carry Forward Projects).

3. AGREES to waive the 2018/19 Council Rates (excluding Emergency Services Levy) for the following community groups, in accordance with Section 6.47 of the Local Government Act 1995:

1. AJS Motorcycle Club of WA Inc.;

2. Kingsway Football & Sporting Club Inc.;

3. Olympic Kingsway Sports Club;

4. Pinjar Motorcycle Park Inc.;

5. Quinns Mindarie Surf Lifesaving Club Inc.;

6. Quinns Rocks Sports Club Inc.;

7. The Badminton Association of WA Inc.;

8. Tiger Kart Club Inc.;

9. Vikings Softball Club Inc & The Wanneroo Giants Baseball Club Inc.;

10. Wanneroo Agricultural Society;

11. Wanneroo Amateur Boxing Club;

12. Wanneroo Amateur Football Club, Wanneroo Cricket Club, Wanneroo Junior Cricket Club and Wanneroo Junior Football Club (Wanneroo Showgrounds Clubrooms);

13. Wanneroo BMX Club;

14. Wanneroo City Soccer Club Inc.;

15. Wanneroo Districts Cricket Club Inc. (indoor facility);

16. Wanneroo Districts Cricket Club Inc. & Wanneroo Districts Hockey Association Inc.;

17. Wanneroo Districts Netball Association;

18. Wanneroo Districts Rugby Union Football Club Inc.;

19. Wanneroo Horse & Pony Club;

20. Wanneroo Racing Pigeon Club;

21. Wanneroo Shooting Complex Inc.;

22. Wanneroo Sports & Social Club Inc.;

23. Wanneroo Tennis Club;

24. Wanneroo Trotting & Training Club Inc.;

25. West Australian Rifle Association Inc.;

26. Yanchep Golf Club;

27. Yanchep Sports & Social Club Inc.;

28. Yanchep Surf Lifesaving Club Inc.; and

29. Youth Futures WA Inc.

4. In accordance with the provisions of Sections 6.32, 6.33 and 6.35 of the Local Government Act 1995:

4.1 IMPOSES Differential Rates and Minimum Rates for the 2018/19 Financial Year;

4.2 NOTES that the Differential Rates and Minimum Rates for the 2018/19 Financial Year are exclusive of Domestic Rubbish Collection Charges; and

4.3 IMPOSES the 2018/19 Gross Rental Value Differential Rates and Minimum Rates as follows, subject to the provisions of Sections 6.32, 6.33 and 6.35 of the Local Government Act 1995: -

GRV Category	Rate in the Dollar (cents)	General Minimum Rate $
Residential Improved	6.4963	971
Lesser Minimum Strata Titled Caravan Parks	6.4963	141
Residential Vacant	12.9900	975
Commercial & Industrial Improved	6.7442	1,344
Lesser Minimum Strata Titled Storage Units	6.7442	672
Commercial & Industrial Vacant	6.7050	1,344

4.4 IMPOSES the 2018/19 Unimproved Value Differential Rates and Minimum Rates as follows, subject to the provisions of Sections 6.32, 6.33 and 6.35 of the Local Government Act 1995: -

UV Category	Rate in the Dollar (cents)	General Minimum Rate $
Residential Improved	0.3774	971
Residential Vacant	0.5545	975
Commercial & Industrial Improved	0.2773	1,344
Commercial & Industrial Vacant	0.3280	1,344
Rural & Mining Improved	0.3745	963
Rural & Mining Vacant	0.4898	912

5. AGREES to offer the following payment options and incentives for the payment of Rates & Charges, Domestic Rubbish, and Private Swimming Pool Inspection Fees in accordance with the provisions of Section 6.45 of the Local Government Act 1995,:

5.1 One Instalment –

· Payment in full within thirty-five (35) days of the issue date of the Annual Rate Notice (7 September 2018).

· Eligibility to enter the incentive draw.

5.2 Two Instalments –

· The first instalment of 50% of the total current Rates & Charges, Domestic Rubbish, Private Swimming Pool Inspection Fees and Instalment Charge, plus the total outstanding arrears payable within thirty-five (35) days of date of issue of the Annual Rate Notice (7 September 2018).

· Eligibility to enter the incentive draw.

· Second Instalment sixty-three (63) days after due date of first instalment (9 November 2018).

· Eligibility to enter the incentive draw.

5.3 Four Instalments –

· The first instalment of 25% of the total current Rates & Charges, Domestic Rubbish, Private Swimming Pool Inspection Fees and Instalment Charge, plus the total outstanding arrears payable within thirty-five (35) days of date of issue of the Annual Rate Notice (7 September 2018).

The second, third and fourth instalments each of 25% of the total current Rates & Charges, Private Swimming Pool Inspection Fees and Instalment Charge, payable as follows:

Second Instalment sixty-three (63) days after due date of first instalment (11 November 2018).

Third Instalment sixty-three (63) days after due date of second instalment (11 January 2019).

Fourth Instalment sixty-three (63) days after due date of third instalment (15 March 2019).

· Eligibility to enter the incentive draw.

6. IMPOSES, In accordance with the provisions of Sections 6.13 and 6.51 of the Local Government Act 1995, interest on all arrears and current charges in respect of Rates & Charges , Domestic Rubbish and Private Swimming Pool Inspection Fees (including GST where applicable) at a rate of 8.45% per annum. This amount will be calculated on a simple interest basis on arrears amounts that remain unpaid and current amounts that remain unpaid after thirty-five (35) days from the issue date of the Original Rate Notice (7 September 2018), or the due date of the instalment and continues until instalment is paid, excluding:

• Deferred Rates;

• Instalment current amounts not yet due under the Four (4) payment options;

• Registered Pensioner Portions; and

• Current Government Pensioner Rebate amounts.

Such interest is to be charged once per month on the outstanding balance on the day of calculation for the number of days, as previously detailed.

7. IMPOSES, in accordance with the provisions of Section 6.45 of the Local Government Act 1995, for the 2018/19 Financial Year, the following Administration Fees & Charges for payment of Rates & Charges, Domestic Rubbish and Private Swimming Pool Inspection Fees:

7.1 Two Instalment Option -

An Administration Fee of $5.00 for Instalment Two, together with an Interest Charge of 5.5% per annum, calculated on a simple interest basis on:

50% of the total current General Rate & Charges, Domestic Rubbish and Private Swimming Pool Inspection Fees calculated thirty-five (35) days from the date of issue of the Annual Rate Notice to sixty-three (63) days after the due date of the first instalment.

7.2 Four Instalment Option -

An Administration Fee of $5.00 for each of Instalment Two, Three and Four, together with an Interest Charge of 5.5% per annum, calculated on a simple interest basis on:

• 75% of the total current General Rate & Charges, Domestic Rubbish and Private Swimming Pool Inspection Fees calculated thirty-five (35) days from the date of issue of the Annual Rate Notice to sixty-three (63) days after the due date of the first instalment;

• 50% of the total current General Rate & Charges, Domestic Rubbish and Private Swimming Pool Inspection Fees calculated from the due date of the Second (2nd) Instalment to the due date of the Third (3rd) Instalment; and

• 25% of the total current General Rate & Charges, Domestic Rubbish and Private Swimming Pool Inspection Fees calculated from the due date of the Third (3rd) Instalment to the due date of the Fourth (4th) Instalment.

8. ADOPTS, for the purposes of reporting material variances for Operational Costs and Capital expenditure for the 2018/19 Financial Year, a percentage of 10% together with minimum values of $100,000 in accordance with Regulation 34(5) of the Local Government (Financial Management) Regulations 1996.

9. ENDORSES the following discretionary transfers to and from reserves (as detailed in Attachment 2), to ensure adequate funding is available over the longer term:

1. $2,000,000 to the Asset Renewal Reserve;

2. $2,000,000 to the Asset Replacement Reserve;

3. $3,000,000 to the Coastal Infrastructure Management Reserve;

4. $500,000 to the Land Acquisition Reserve;

5. $50,000 to the Leave Liability Reserve;

6. $3,000,000 to the Regional Open Space Reserve; and

7. $9,364,897 from the Strategic Projects/Initiatives Reserve.

10. ENDORSES the closure of the following reserves:

1. Butler Collaborative Planning Agreement Reserve;

2. Fleming Park Lake Reserve; and

3. HACC Asset Replacement Reserve.

Attachments:

1 ⇩.	Unbranded Corporate Business Plan 2018-19 - 2021-22 for Council Adoption	18/234782	Minuted
2 ⇩.	2018-19 Statutory Budget	18/247357	Minuted
3 ⇩.	Schedule of Fees & Charges 2018 19	18/246804	Minuted
4 ⇩.	2018-19 Capital Works Program (Including Carry Forwards)	18/243100	Minuted