Agenda of Special Council Meeting

Agenda

Good evening Councillors, staff, ladies and gentlemen, we wish to acknowledge the traditional custodians of the land we are meeting on, the Whadjuk people. We would like to pay respect to the Elders of the Nyoongar nation, past and present, who have walked and cared for the land and we acknowledge and respect their continuing culture and the contributions made to the life of this city and this region and I invite you to bow your head in prayer:

Lord

We ask for your blessing upon our City, our community and our Council. Guide us in our decision making to act fairly, without fear or favour and with compassion, integrity and honesty. May we show true leadership, be inclusive of all, and guide the City of Wanneroo to a prosperous future that all may share. We ask this in your name.

Amen

Item 1 Attendances

Item 2 Apologies and Leave of Absence

Item 3 Public Question Time

In accordance with Section 7(4)(b) of the Local Government (Administration) Regulations 1996, a Council at a Special Meeting is not required to answer a question that does not relate to the purpose of the meeting. It is therefore requested that only questions that relate to items on the agenda be asked.

Item 4 Reports

Declarations of Interest by Elected Members, including the nature and extent of the interest. Declaration of Interest forms to be completed and handed to the Chief Executive Officer.

Corporate Strategy & Performance

Business & Finance

SCS01-06/19 Adoption of the 2019/20 - 2022/23 Corporate Business Plan and 2019/20 Annual Budget

File Ref: 36171V02 – 19/198226

Responsible Officer: Manager Transactional Finance

Disclosure of Interest: Nil

Attachments: 4

Issue

To consider the adoption of the City’s 2019/20 – 2022/23 Corporate Business Plan (CBP) and 2019/20 Annual Budget (Budget).

Background

A series of Integrated Planning and Budgeting Workshops (5 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, the City of Wanneroo (the City) considered the following policies and key economic parameters:

· Strategic Budget Policy;

· Financial Cash Backed Reserves Policy;

· Accounting Policy;

· Financial Hardship – Collection of Rates and Service Charges Policy;

· Local Government Cost Index: 2.0% (Western Australian Local Government Association (WALGA)) (This affects contract costs and capital projects) (Table 1 and 2);

· Forecast 2019/20 population growth: 4.0% (id Forecast);

· Forecast 2019/20 average interest rate return on investments: 2.25%;

· Forecast Perth Consumer Price Index (CPI) over the next 12 months: 1.75% (West Australian Treasury Corporation (WATC)); and

· The Long Term Financial Plan 2019/20 – 2038/39 (LTFP).

This report is the culmination of the development work and input from stakeholders into the 2019/20 integrated planning and budgeting process.

Detail

2019/20 – 2022/23 Corporate Business Plan

The 2019/20 – 2022/23 CBP forms part of the City’s Integrated Planning and Reporting Framework (the Framework) as required under the Local Government (Administration) Regulations 1996. This Plan activates the 10 year Vision and Strategies of the Strategic Community Plan (SCP); it also addresses operational planning and resourcing as it relates to asset management, financial management and workforce management. A desktop review of the SCP was undertaken as part of the CBP development process for 2019/20, and the strategies relating to the themes of Society, Economy, Environment and Civic Leadership have been retained.

Reviewed on an annual basis and aligned with the budgeting process, the CBP (Attachment 1) contains the four-year priorities and key initiatives 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. The CBP is cascaded through operational level service plans that provide a detailed view of 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 initiatives for the year.

The key elements of the Integrated Planning and Reporting Framework and their inter-relatedness are depicted as follows in Figure 1.

Figure 1: Integrated Planning and Reporting Framework

Development of the 2019/20 – 2022/23 Corporate Business Plan

The 2019/20 – 2022/23 CBP has been developed iteratively with the Elected Members through a series of Workshops to establish the priorities for the next four years. Additional detail relating to the City’s economic development initiatives has been included to ensure awareness in the community about the significant projects being undertaken in this area.

Refinements to the format of the CBP provide additional information on the services provided by the City and performance targets. In its current form, the publication is unbranded; corporate branding will occur following the Council adoption of the Plan and this will be made publically available on the City’s website and in limited print form.

2019/20 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, with inflation anticipated to continue to track below the target range of 2% - 3% in the 2019/20 financial year, in part due to record low interest rate environment (cash rate is currently 1.25% - per June 2019 Reserve Bank of Australia meeting).

When compiling the Budget, consideration was given to relevant economic commentary and forecasts. The Federal and State Budgets were released in April 2019 and May 2019 respectively 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 2019/20. As the final end of year processes will not be completed until September 2019, 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 2019/20 Budget:

· 2019/20 Statutory Budget (Attachment 2);

· 2019/20 Schedule of Fees & Charges (Attachment 3); and

· 2019/20 Capital Works Program including 2018/19 Carry Forward Projects (Attachment 4).

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

· Growth in the service area (Rateable properties) is forecasted at 1.7% (supported by actual Interim Rates generated for 2018/19) and population growth forecasted at 4%;

· 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, transport, and emergency services levy fees; and

· The increase in Waste Costs through growth in tonnage taken to landfill from additional new properties.

The development of the 2019/20 Budget is a direct outcome of the work undertaken through the review of the CBP as part of the framework process and based on a 2% - 2.25% growth factor.

Attachment 2 provides the detailed Budget, with the Statement of Comprehensive Income (by Nature & Type) reflecting a 2019/20 budgeted Net Result of $39.8m), being an increase of $6.3m from the 2018/19 Estimate of $33.5m. This reduction is primarily the result of accounting for the disposal of the Ocean Reef Road infrastructure costs which is due to be transferred to the State Government in 2019/20. The disposal is a non-cash movement and has no impacts on determining the Rates to be raised in 2019/20.

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 from Continuing Operations 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 2018/19 is a surplus of $3.2m, the final figures will be reported in the audited annual financial statements later this year. For 2019/20 a surplus of $1.0m is budgeted.

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) valuation basis are revalued annually, whereas Gross Rental Values (GRV) valuation basis used for determining the Rates for Improved Properties are revalued every three years.

The General Rate (Rates-in-the-Dollar (RID)) and Minimum Rates that have been proposed deliver an overall average Rates Revenue increase of 1.8%. This is within the forecast Perth CPI increase of 1.75% and the WALGA Local Government Cost Index forecast of 2.0%.

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 RID only recovers an amount which is considered essential to the running of the City activities and the City’s long term financial sustainability.

Mindarie Regional Council (MRC) will maintain its gate fees and similarly the landfill levy as per 2018/19 rate, however as indicated above, the growth in additional properties will negatively impact costs in 2019/20 due to an increase in number of services. This is calculated at approximately a $636k increase in Waste costs offset by a combination of increase in revenue from the growth and operational efficiencies.

Guided by the Strategic Budget Policy and consistent with prior year, the City will continue to levy separate Waste Service Fees from Rates which 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; and

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

In 2017, the City engaged PricewaterhouseCoopers (PWC) to review and update their 2009 report titled “Best Practices in Funding Rapidly Growing Local Governments”. 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 +2.0% each year which would have resulted in an increase in Rates of 3.75%. It is noted that the City has deliberated this matter as part of its Budget Workshops and in light of the current state of the economy, proposed for adoption, an overall average of 1.8% increase in Rates Revenue.

In the 2018/19 Budget Adoption, Council approved the waiver of Council Rates (excluding the Emergency Services Levy (ESL)) for community groups. For 2019/20 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 2018/19 Estimates, are provided below:

· Operating Income $202.6 million (+$7.4 million/+3.8%)

The Operating Income has increased by 3.8% and primarily comes from Rates, Fees and Charges, Grants and Contributions and Interest Income. The Rates and Waste Service Fee represent $166.2m of the total Operating Income and particulars are detailed below.

· Rates Revenue $135.6 million (+$4.6 million/+3.6%)

Rates income is budgeted at $135.6m representing an increase of $4.6m from 2018/19 Estimate. The amount is based on two components:

o An overall average Rate Revenue increase of 1.8% (increase of $2.3m) while ensuring that:

o The number of minimum properties within each category does not exceed the legislated 50%; and

o The highest differential general rate is not more than twice the lowest differential general rate imposed.

o Rates growth income of $2.3m, which equates to a 1.8% change as properties are developed/renovated.

The average increase on the City proposed Residential Rates is calculated at $23 per residence per annum. This increase does not take into account changes to the other components of the Rates bill, i.e. ESL (State Government Charge, unknown at date of reporting) and annual Swimming Pool Inspection Fee (proposed to increase from $18 to $24).

The Rates generated allow the City to continue with running its operations and significant Capital Works Program in a financially sustainable manner. It takes into account growth in services due to increase in population and number of properties with corresponding increases in income and expenditures.

As per legislative requirement, the City advertised the RID for the various Rate Categories on 14 May 2019 allowing for a 21 day comment period. A total of 10 submissions were received within this period and have been responded to. In general, the comments were for the City to maintain a low or zero increase in Rates in light of the ongoing economic climate except for one submission. In this submission, they queried the correlation (and impact on their Rates) between UV for their property, received by the City from Landgate and their mining tenement rents which are driven by the State Government (Department of Mines, Industry regulation and Safety).

The advertised and adopted Rates for the UV category is slightly different from the advertised Rates as the City received new valuations from Landgate in respect to these properties. The respective RID’s are adjusted such that the revenue generated from the UV category does not exceed the 1.8% increase.

· Operating Grants, Contributions & Subsidies $10.9 million (+$0.9 million/+9.4%)

The largest contributor within this category is the annual funding to the City from the Commonwealth Federal Assistance Grants Commission with an increase of $426k and an allowance is made for the proposed Better Bins Program for $500k.

· Interest Earnings $8.7 million (-$0.8 million/-8.0%)

With the official cash rate at historically low the interest earning potential of the City has been reduced to an average rate of 2.25% per annum.

· Fees & Charges $46.8 million (+$2.5 million/+5.7%)

For 2019/20 the Waste Service Fee is at the same rate as the previous year at $410 projected to generate $30.6m in Revenue. This will also allow for the implementation of a proposed new Better Bins Program during the year.

The City will continue to offer a discount to certain pensioner groups.

The proposed discounts are as follows:

1. Pensioner Owned Residential Properties - Rates up to $988; the proposed discount is $98; and

2. Pensioner Owned Residential Properties - Above Minimum Rates $988 to $1,398; the proposed discount is $45.

The rest of the Fees and Charges for 2019/20 are showing a minimal decrease when compared with 2018/19 Estimate after adjustment for an internal accounting entry of $2.0m for facility Booking Hire. A list of the proposed fees is detailed in Attachment 3.

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

· Other Revenue $0.6 million (+$0.01 million/+2.0%)

The main contributor to the favourable variance for Other Revenue is due to a slight increase in items for sale at the Kingsway Stadium.

· Operating Expenses $201.6 million (+$9.6 million/+5.0%)

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 1.7%. 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 $76.8 million (+$2.6 million/+3.5%)

The increase in Employee Costs is reflective of the City’s enterprise agreements, backfill arrangements to cover for staff on leave and higher workers compensation insurance premiums. It should be noted that a recent benchmarking exercise against similar large growing local governments showed that the City had one of the lowest staffing compliments as a ratio of the number of residents.

· Materials & Contracts $68.5 million (+$6.3 million/+10.1%)

The main contributor to the increase after adjusting for an internal accounting entry of $2.0m for Facility Booking Hire, relates to:

o Refuse Removal Costs. This is due to an increase in waste tonnage and the proposed Better Bin education and awareness programme of $886k;

o Additional increases relate to Council Elections with payment to the Australian Electoral Commission forecasted at $509k;

o Triennial Valuations at a cost of $770k; and

o Higher Maintenance costs of $660k in line with additional assets vested in the City from private developers and investment by the City in new assets.

· Utility Charges $9.7 million (+$0.2 million/+1.9%)

Utility charges which comprise Electricity, Gas and 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 2019 the State Government handed down its 2019/20 budget which drove a number of increases to Fees & Charges. Of note power prices have increased by a further 6.0% (Table 1), water by 6.0% (Table 2) and motor vehicle licensing costs 2.0%. Through many initiatives which include energy efficient LED street lighting, solar panel installation, fleet review 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 2019/20 has been set at 1.9%.

Tables below have been used to formulate the City’s budgets.

Table 1

Source: WALGA Local Government Briefing February 2019

Table 2

Source: WALGA Local Government Briefing February 2019

· Depreciation $40.9 million (+$0.5 million/+1.3%)

The increase in costs is due to the growth in assets held by the City and contributed by Developers, and the Land and Buildings and Furniture and Fittings revaluation exercise undertaken during the 2018/19 financial year.

· Interest Expenses $4.1 million (Nil change)

Interest Expenses relate to a loan agreement with 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 to be paid back using Property Developer contributions.

It is noted that the Developer Contribution Plan (DCP) covers a 16 year period from 9 September 2014 to 8 September 2030. The DCP sets out the specific works covered by the the City’s District Planning Scheme No.2, 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 $0.3m 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 (+$0.04 million/+2.5%)

The Insurance Expenses budget for 2019/20 is expected to increase by 2.5% driven by public liability and events premiums.

Non-Operating Income and Expenses:

· Non-Operating Grants and Contributions, Reimbursements and Donations

The City has budgeted $28.8m of which $12.6m is to be received in this 2019/20 (and the balance of $16.2m which was received in 2018/19, now recognised as income with completion of performance obligations as per the Revised Australian Accounting Standards AASB 15) is mainly made up of State and Commonwealth government grants in relation to the Capital Works Program.

· Profit and Loss on Asset Disposals

A loss of $14.1m has been recognised in relation to the disposal of a portion of Ocean Reef Road which is being divested to Main Roads for the construction of Wanneroo Road/ Ocean Reef Road intersection. The loss is a non-cash entry in the financial statements and has no impact on the determination of Rates.

It is noted that the City has received via State, Federal and TPS in the order of $16.8m for the Ocean Reef Road construction (excluding pathways) since 2007.

· TPS & DCP

o Receipt of $15.3m in Income is allowed for with $11.8m in headworks, $2.3m in Interest and $800k for the sale of Lot 501 Hampton (Cell 5/6); and

o Expenditure of $8.0m has been allowed to fund various TPS activities which includes the acquisition of Yanchep Districts Open Space in September 2019.

· Contribution of Physical Assets

Physical Assets to be transferred to the City by various developers amounts to $16.3m which are mainly from developments occurring in the Northern corridor. As indicated in the Material and Contracts expenditure, there is an expected increase of $660k in maintenance of infrastructure works which includes new parks and reserves.

2019/20 Capital Works Program

The 2019/20 Capital Works 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 Works Program is supported by Asset Management Plans. The Capital Works Program for 2019/20 allocates 37% of the Budget to upgrades, 40% to new work and 23% to renewal work.

The Capital Works Program has been set and prioritised based on a community needs balanced against the City's financial and resourcing capacity.

The Capital Works Program for 2019/20 is proposed to be $76.8 million (excluding carry forward projects) funded from:

$ Millions

· Grants & Contributions 21.6

· Town Planning Scheme and private contributions 1.7

· Loans 6.7

· Reserves 24.3

· Municipal 22.5

Major projects include:

Project Description	$ Millions
Quinns Beach, Quinns Rocks, New Long Term Coastal Management Works	2.1
Kingsway Olympic Clubrooms, Madeley, New Change rooms and Grandstand	0.8
Connolly Dr, Butler, Upgrade to Dual Carriageway from Lukin Dr to Benenden Ave	3.2
Warradale Park, Landsdale, New Skate Park	0.6
Halesworth Park, Butler, New Sports Facilities	7.0
Kingsway Netball Clubrooms, Madeley, Upgrade Building	2.1
Edgar Griffiths Park, Wanneroo, New Sports Amenities Building	0.8
Hudson Park, Girrawheen, Upgrade Dennis Cooley Pavilion	1.4
Neerabup Industrial Area, Neerabup, New Development	0.8
Pinjar Road, Banksia Grove, Upgrade to Dual Carriageway from Blackberry Dr to Joondalup Dr	4.2
Shelvock Park, Koondoola, New Sports Amenities Building	2.1
Wanneroo City Soccer Clubrooms, Madeley, New Change Rooms and Store Room	0.8
Belhaven Park, Quinns Rocks, New Sports Amenities Building	1.0
Marmion Ave Upgrade to Dual Carriageway from Butler Bvd to Yanchep Beach Rd	9.3
Splendid Park, Yanchep, New Skate Park	0.7
Hepburn Avenue, Marangaroo, Upgrade Intersection at Highclere Blvd	1.2

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

Carry Forward Capital Projects

As at the end of the financial year 2018/19, it is anticipated that some projects and plant replacements will be either incomplete or not commenced. This 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, extended consultation periods, planning and approvals, third party/statutory bodies or contractual delays.

It is anticipated carry-forward projects from 2018/19 will amount to $14.2m. This will notionally bring the total Capital Works Program for 2019/20 to $91.0m.

The carried forward project component is fully funded from the 2018/19 Budget (Attachment 4). Actual amounts will be adjusted based on the final end of year results.

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

$ Million

· Grants & Contributions 6.2

· Loans 0.1

· Reserves 4.2

· Municipal (to be transferred to Respective Reserves) 3.7

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 Statutory Budget Attachment 2 (included in note number 6).

In accordance with the adopted Strategic Budget Policy and the LTFP, it has been possible to improve the City’s Reserve funding capacity for some Strategic Reserves, which will enhance the City’s ability to sustainably meet future demands and liabilities. This is illustrated by the incorporation of:

· A $2.0m transfer to the Asset Renewal Reserve acknowledging the City has a growing asset base and asset renewal demand in future years. This will be achieved by increasing allocations to the Asset Renewal Reserve in alignment to the depreciation charge;

· A $2.0m transfer to the Coastal Management Reserve to assist the City in managing its 32 kilometres of coastline; and

· A transfer of $2.5m to the Regional Open Space Reserve will be made to allow the City adequate funding for future developments.

It should be noted that the Strategic Projects/Initiatives Reserves is higher in 2019/20 by $0.8m mainly due to an expected transfer of $13.8m from the TPS offset by partial funding of the 2019/20 Capital Works Program and Operations.

The purpose of the Loan Repayment Reserves and the Strategic Projects/Initiative Reserves has been updated to incorporate the link back to the LTFP. The previous purpose specified to “City’s 10 Year Strategic Financial Management Plans” which has been replaced by the adoption of the LTFP.

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 2019/20 RSS identified the need to raise $135.6m through Rates, which equates to a 1.8% overall average Rates Revenue increase. This would mean an equivalent average increase of $23 for Residential Improved GRV category (representing 82% of the total rateable properties).

The Rates generated allow the City to continue with running its operations and capital programs in a financially sustainable manner. It takes into account growth in services due to increase in population and number of properties with corresponding increases in income and expenditures.

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 2019/20 an estimated Deficit of $2.1m to fund City’s Operations is expected to be transferred from this Reserve as indicated above.

Consultation

This document has been prepared by consulting with the Elected Members, Executive Leadership Team and Service Unit Managers through scheduled Workshops.

Comment

The Statutory Budget Process is a part of the Integrated Planning Process which considers the SCP which is then activated by the formulation of the CBP and driven operationally by the development of the LTFP and the Annual Budget. The process also incorporates informing strategies using the Workforce Plan and Asset Management Plan.

It is acknowledged that the Annual Budget has deviated from the LTFP in light of the continuing weak economic conditions of the State.

Statutory Compliance

The Local Government Act 1995 sections relating to Annual Budget, Integrated Planning and Reporting Framework and Local Government (Financial Management) Regulations 1996.

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

Policy Implications

The Budget has been developed in accordance with the Strategic Budget Policy, Accounting Policy, Financial Cash Backed Reserves Policy and Financial Hardship – Collection of Rates and Service Charges Policy.

Financial Implications

Adoption of the CBP and the Budget will allow for the timely implementation of identified Actions and associated Capital Works 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 2019/20 – 22/23 (Attachment 1);

2. ADOPTS the Annual Budget for the Financial Year Ending 30 June 2020 (Attachment 2), incorporating:

a) Statement of Comprehensive Income, showing Total Comprehensive Income of 39,758,386;

b) Statement of Cash Flows, showing cash at end of year position of $330,826,079;

c) Rate Setting Statement, showing the need to generate $135,581,907 through the levying of Rates;

d) The Notes To and Forming Part of the Budget;

e) 2019/20 Schedule of Fees & Charges (Attachment 3) (effective from 1 July 2019); and

f) 2019/20 Capital Works Program (Attachment 4) (including 2018/19 Carry Forward Projects).

3. AGREES to waive the 2019/20 Council Rates (excluding Emergency Services Levy) for the following community groups, in accordance with Section 6.47 of the Local Government Act 1995:

a) AJS Motorcycle Club of WA Inc.;

b) Kingsway Football & Sporting Club Inc.;

c) Olympic Kingsway Sports Club;

d) Pinjar Motorcycle Park Inc.;

e) Quinns Mindarie Surf Lifesaving Club Inc.;

f) Quinns Rocks Sports Club Inc.;

g) The Badminton Association of WA Inc.;

h) Tiger Kart Club Inc.;

i) Vikings Softball Club Inc. & The Wanneroo Giants Baseball Club Inc.;

j) Wanneroo Agricultural Society Inc.;

k) Wanneroo Amateur Boxing Club Inc.;

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

m) Wanneroo BMX Club Inc.;

n) Wanneroo City Soccer Club Inc.;

o) Wanneroo Districts Cricket Club Inc. (Indoor Facility);

p) Wanneroo Districts Cricket Club Inc. & Wanneroo Districts Hockey Association Inc.;

q) Wanneroo Districts Netball Association Inc.;

r) Wanneroo Districts Rugby Union Football Club Inc.;

s) Wanneroo Horse & Pony Club Inc.;

t) Wanneroo Shooting Complex Inc.;

u) Wanneroo Sports & Social Club Inc.;

v) Wanneroo Tennis Club Inc.;

w) Wanneroo Trotting Training Club Inc.;

x) West Australian Rifle Association Inc.;

y) Yanchep Golf Club Inc.;

z) Yanchep Sports & Social Club Inc.; and

aa) Yanchep Surf Lifesaving Club Inc.

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

a) IMPOSES Differential Rates and Minimum Rates for the 2019/20 Financial Year;

b) IMPOSES the 2019/20 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	6.6132	988
Lesser Minimum Strata Titled Caravan Parks	6.6132	144
Residential Vacant	13.2238	991
Commercial & Industrial Improved	6.8655	1,344
Lesser Minimum Strata Titled Storage Units	6.8655	672
Commercial & Industrial Vacant	6.8256	1,344

c) IMPOSES the 2019/20 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	0.3847	988
Residential Vacant	0.4838	991
Commercial & Industrial Improved	0.2824	1,344
Commercial & Industrial Vacant	0.3345	1,344
Rural & Mining Improved	0.3726	980
Rural & Mining Vacant	0.4977	928

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:

a) One Instalment:

i. Payment in full within thirty-five (35) days of the issue date of the Annual Rate Notice (6 September 2019); and

ii. Eligibility to enter the incentive draw.

b) Two Instalments:

i. 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 35 days of date of issue of the Annual Rate Notice (6 September 2019);

ii. Second Instalment 63 days after due date of first instalment (8 November 2019); and

iii. Eligibility to enter the incentive draw.

c) Four Instalments:

The first instalment of 25% of the total current Rates & Charges:

i. Domestic Rubbish, Private Swimming Pool Inspection Fees;

ii. Instalment Charge, plus the total outstanding arrears payable;

iii. within thirty-five (35) days of date of issue of the Annual Rate; and

iv. Notice (6 September 2019).

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:

i. Second Instalment 63 days after due date of first instalment (8 November 2019);

ii. Third Instalment 63 days after due date of second instalment (10 January 2020);

iii. Fourth Instalment 63 days after due date of third instalment (13 March 2020); and

iv. Eligibility to enter the incentive draw.

d) Rates Early Payment Incentive Scheme:

In accordance with the provisions of Section 6.46 of the Local Government Act 1995, a Local Government is empowered to offer a discount or other incentive for the early payment of rates.

The City will provide the following prizes for Ratepayers who pay in full or by instalment as indicated above:

i. One $5,000 Flight Centre Voucher;

ii. Two $1,000 Coles/ Myer Vouchers; and

iii. Four $500 Coles/ Myer Vouchers.

The City will provide the following prizes for Ratepayers who register for eRates by 6 September 2019:

i. Four iPad Minis.

An allowance of $11,000 for the purchase of the above prizes has been included in the Annual Budget.

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 35 days from the issue date of the Original Rate Notice (6 September 2019), or the due date of the instalment and continues until instalment is paid, excluding:

a) Deferred Rates;

b) Instalment current amounts not yet due under the four payment options;

c) Registered Pensioner Portions; and

d) 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 2019/20 Financial Year, the following Administration Fees & Charges for payment of Rates & Charges, Domestic Rubbish and Private Swimming Pool Inspection Fees:

a) Two Instalment Option:

i. 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 0% 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 63 days after the due date of the first instalment.

b) Four Instalment Option:

i. 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 35 days from the date of issue of the Annual Rate Notice to 63 days after the due date of the first instalment;

ii. 50% of the total current General Rate & Charges, Domestic Rubbish and Private Swimming Pool Inspection Fees calculated from the due date of the Second Instalment to the due date of the Third Instalment; and

iii. 25% of the total current General Rate & Charges, Domestic Rubbish and Private Swimming Pool Inspection Fees calculated from the due date of the Third Instalment to the due date of the Fourth Instalment.

8. ADOPTS, for the purposes of reporting material variances for Operational Costs and Capital expenditure for the 2019/20 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. APPROVES the seeking of up to a maximum of $4,600,000 in loan funding for capital projects in the Yanchep Development area to be recouped from the Yanchep/Two Rocks District Facilities Reserve.

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

a) Transfer $2,000,000 to the Asset Renewal Reserve;

b) Transfer $2,000,000 to the Asset Replacement Reserve;

c) Transfer $2,000,000 to the Coastal Infrastructure Management Reserve;

d) Transfer $1,200,000 to the Domestic Refuse Reserve;

e) Transfer $1,000,000 to the Land Acquisition Reserve;

f) Transfer $50,000 to the Leave Liability Reserve;

g) Transfer $2,500,000 to the Regional Open Space Reserve;

h) Transfer $17,550,083 from the Strategic Projects/Initiatives Reserve; and

11. APPROVES the following change of purpose of Reserve funds:

a) Loan Repayment Reserve

From:

“To set aside adequate funds over time to repay loan commitments per

the City's 10 Year Strategic Financial Management Plans debt

management policy.”

To:

“To set aside adequate funds over time to repay loan commitments per

the City's Long Term Financial Plan.”

b) Strategic Projects/Initiative Reserve

From:

“For the purpose of accumulating funds to be used for the introduction

of new or upgrade of existing services, maintenance, renewal, upgrade of

existing assets and purchase of new assets or project works of the City

over an expected period of 10 years. The annual funds transfer is derived

from the rate setting surplus less municipal funding of capital works

carried forward.”

To:

“For the purpose of accumulating funds to be used for the introduction

of new or upgrade of existing services, maintenance, renewal, upgrade of

existing assets and purchase of new assets or project works, per the

City’s Long Term Financial Plan. The annual funds transfer is derived

from the rate setting surplus less municipal funding of capital works

carried forward.”

Attachments:

1 ⇩.	Attachment 1 - Draft CBP 2019-20 to 2022-23 pre Council 28 June	19/78726	Minuted
2 ⇩.	Attachment 2 - 19-20 statutory budget	19/231715	Minuted
3 ⇩.	Attachment 3 - Final Fees & Charges Schedule 2019/20 - Excluding Statutory Charges	19/209940	Minuted
4 ⇩.	Attachment 4 - 2019-20 CWP - Detailed	19/232125	Minuted