Agenda of Extraordinary Meeting

BYRON SHIRE COUNCIL

Staff Reports - Corporate and Community Services 4.2

Staff Reports - Corporate and Community Services

Report No. 4.2 Adoption of the Delivery Program 2017-2021 (Revised) and Operational Plan 2018-2019, including Statement of Revenue Policy, Budget, Fees and Charges

Directorate: Corporate and Community Services

Report Author: Mila Jones, Corporate Governance Coordinator

Anna Vinfield, Manager Corporate Services

James Brickley, Manager Finance

File No: I2018/1060

Theme: Corporate Management

Governance Services

Summary:

Council at its 17 May 2018 Extraordinary Meeting, endorsed the Draft Delivery Program 2017-2021(Revised) and Operational Plan 2018-2019 (including the Statement of Revenue Policy, 2018-2019 Budget and 2018-2019 Fees and Charges) for public exhibition (Resolution 18-285 and Resolution 18-282).

The report includes the submissions received during public exhibition for Council’s consideration and recommends a number of proposed amendments. It also recommends that Council adopt the revised documents. Further, the report provides information for Council to consider in relation to resolution 18-282 part 1(b) concerning the Better Byron Crew as resolved by Council at the 17 May 2018 Extraordinary Meeting.

RECOMMENDATION:

That Council:

1. Note the submissions received during the public exhibition period for the Delivery Program 2017-2021(Revised) and Operational Plan 2018-2019 (including the Statement of Revenue Policy, 2018-2019 Budget and 2018-2019, Fees and Charges) (Attachments 2 to 4).

2. Adopt the following documents:

a) Delivery Program 2017-2021 (Revised) and Operational Plan 2018-2019 as exhibited with amendments (Attachment 1 E2018/52819) and discussed in this report under the heading ‘Management Comments – Delivery Program/Operational Plan’.

b) 2018-2019 Statement of Revenue Policy as exhibited with amendments (included in Attachment 1 #E2018/52819) discussed in the report under the heading ‘Management Comments – 2018/2019 Revenue Policy’.

c) 2018-2019 Budget Estimates as exhibited with amendments discussed in the report under the heading ‘Management Comments – 2018-2019 Budget Estimates’.

c) 2018-2019 Fees and Charges as exhibited with amendments discussed in the report under the heading ‘Management Comments – 2018-2019 Fees and Charges’.

Attachments:

1 Delivery Program 2017-2021 (revised) and Operational Plan 2018-19, E2018/52819 , page 31⇩

2 Survey responses, E2018/51517 , page 137⇩

3 Submissions (redacted), E2018/52902 , page 145⇩

4 Budget estimates public access - Question and Answers, E2018/51013 , page 160⇩

5 Better Byron crew - additional information for implementation of Res 181-282 1b, E2018/52824 , page 165⇩

Report

Integrated Planning and Reporting provides a framework that sets out the community’s main priorities and aspirations for the future and outlines how these will be achieved. The framework is led by the Community Strategic Plan (adopted 17 May 2018 Resolution 18-286) and supported by a series of plans and strategies.

The Community Strategic Plan sets out the 10-year vision and is developed in partnership between council, government agencies, community groups and individuals. The Delivery Program is a statement of commitment outlining the priorities for the next four years and how these will be achieved. The annual Operational Plan further details the Delivery Program and outlines what individual projects and activities will be undertaken during the year.

At the Extraordinary Meeting on 17 May 2018 Council resolved (18-286) and (18-282) to place the Delivery Program 2017-2021 (Revised) and Operational Plan 2018-2019 (including the Statement of Revenue Policy, 2018-2019 Budget and 2018-2019 Fees and Charges) on public exhibition.

This report presents the submissions received during the exhibition period and seeks Council’s consideration of any proposed amendments from the submissions, Council resolutions adopted during the public exhibition period and the accompanying management comments. Following that consideration and the inclusion of any further amendments endorsed by Council, it is recommended Council adopt the documents as outlined in this report.

Further, the report provides information for Council to consider in relation to resolution 18-282 part 1(b) concerning the Better Byron Crew as resolved by Council at the 17 May 2018 Extraordinary Meeting under the heading Council Resolutions within the Financial Implications section of this report.

Resourcing Strategy – Long Term Financial Plan

During the public exhibition period, Council also had on public exhibition the Transport Asset Management Plan (TAMP). Given the feedback received on this Plan, it is expected this will be reported to the 23 August 2018 Ordinary Council Meeting for consideration. It is also an opportune time to ensure the Long Term Financial Plan (LTFP) reflects the outcomes of the TAMP to demonstrate integration as a scenario from the base case. The base case of the LTFP will be formed also from the formal adoption of the 2018-2019 Budget Estimates as the starting point. Whilst it was expected the LTFP was to be provided to this Meeting of Council, it is suggested it will be more meaningful incorporating the TAMP.

Consultation and public exhibition

All of the documents were placed on public exhibition from 18 May 2018 to 15 June 2018. Key engagement activities included:

· Budget Estimates Pubic Access Session

· Online survey

· Direct email, including documents to various community and sporting groups, schools, Byron Youth Service, people with lived experience of disability and chambers of commerce

· Advertisement in the Byron Shire News

· Council’s e-newsletter

· Media release

· Council’s website www.byron.nsw.gov.au

· Facebook

The Integrated Planning and Reporting documents endorsed by Council at the 17 May 2018 Extraordinary Meeting for public exhibition can be viewed using the following link:

https://www.byron.nsw.gov.au/Home/Tabs/Public-Notices/Delivery-Program-and-Operational-Plan

Budget Estimates Public Access Session:

A public access session was held on 6 June 2018 to allow for members of the public to address Councillors and staff on budget matters. Session ran from 9.30am to 5pm with approximately 15 members of the public attending throughout the day. An overview of the budget was provided and attendees given an opportunity to discuss key budget programs. Questions that were submitted on the day and their answers have been provided at Attachment 4.

Summary of survey responses:

Council published a survey online (yoursaybyronshire.com.au) and 17 survey responses were received. The full survey report is provided at Attachment 2. A summary of the responses is provided here.

Q1. What are your top five priority actions from Council’s draft Delivery Program?

There were 17 responses to this question with the following items topping the list of priorities:

Priority 1: Fixing roads and drainage

Priority 2: Cycle paths and improved footpaths and road crossing

Priority 3: Bridge replacement

Priority 4: Upgrades to open spaces and recreational works

Priority 5: a) Public toilet upgrades; b) Building a bypass

Q2. What are your top five activities from Council’s draft Operational Plan?

There were 13 responses to this question with the following items topping the list of priorities:

Priority 1: Road works

Priority 2: Programs for drainage, kerb and gutter, footpaths, stormwater, causeways and culverts

Priority 3: Safe environment such as roads, bridges, community and land use, cycle paths and pedestrian accessibility

Priority 4: Bypass

Priority 5: Develop program of open space and recreational works

Q3. Is there anything else you would like to see included in the program/plan?

There were 17 responses to this question that related to:

· More funding for roads and road works

· Clifford Street roundabout

· Prioritisation of safety and full completion of actions from the 2017 Road Safety Audit on Coolamon Scenic Drive

· Increase bikeways, futurist green transport, transport alternatives and government funding for public train service

· Medium density living model for development

· More cycle ways and open space and recreation funding for Mullumbimby

· Flexibility to cope with unforeseen events or issues

· Skate park in Byron Bay

· More public toilets in the centre of Byron Bay

· Repair and upgrade the Bangalow weir and adjacent park

· Liaise with other NSW local government authorities and pressure state government to allow levying of a bed tax

Q4. Is there anything you think should not be included in the program/plan?

There were 14 responses to this question that related to:

· Less, or no funding for:

o open space and recreation budget, that budget to be used for road works

o rezoning of Lot 22 or for trophy cabinet at the Cavanbah Centre

o Railway Park

· Art programs not to be included

Q5. Do you have any other comments about Council’s draft Delivery Program, Operational Plan, Budget, Fees and Charges?

There were 14 responses to this question that related to:

· Fixing roads to be main priority

· Recreation, sports and arts to be put on hold until basic safety on roads is fixed

· Leave rural open land as is and medium-density living

· Public exhibition before adopting the Byron Shire Open Space and Recreation Needs Assessment and Action Plan

· Include whole of river catchment management plan into in infrastructure design

· Feasibility study for the “Byron Line”

· Quality controlled road maintenance and construction

· Works should be performed by Council staff rather than contractors to keep money in the Shire

Submissions received:

Council received 13 written submissions. Council is required to consider any submissions received during the exhibition period prior to the Council’s endorsement and/or adoption of these documents.

Full copies of the submissions are provided at Attachment 3. A summary of the submissions and staff comments are provided in tables 1 to 4 of this report.

Table 1 – Summary of submissions to the Draft Delivery Program 2017-2021 (Revised) and Operational Plan 2018-2019

Doc No	Regarding	Staff comment
E2018/48454	1. Fix Coopers Creek Road - terrible state full of dangerous corrugations and potholes 2. Work with NBN and other internet providers to build more internet capability to Upper Coopers Creek	1. This road is currently not listed for renewal in 2018/19 or a future Works Program as other roads have been included that are considered to have a higher need. Council currently has approx 200km of road in poor condition. It is not recommended to allocate funding to this road for 2018/19. 2. The NSW State Government liaises with NBN the roll out of services. The Department of Premier and Cabinet – Regional Development, is the appropriate department for the advocating of new NBN towers. Council is not consulted on the roll out of NBN towers or NBN fibre to the node services.
E2018/48450	Request for fenced in off-leash dog exercise park	In response to feedback received through the recent Community Strategic Plan engagement; it is proposed to prepare a Dogs in Public Spaces Strategy (DiPS) to develop a balanced policy approach for the management of dogs in Council’s public spaces. It is proposed that the DiPS will replace the Byron Shire Council Policy 5.31 Companion Animal Exercise Areas – which was last reviewed in 2011. This is captured under 2.4.c “Enhance public safety, health and liveability through the use of council's regulatory controls and services”
E2018/50261	Protecting environment and wildlife	Council is committed to protecting the environment and wildlife. This is captured under the overarching objective “we protect and enhance our natural environment” and specifically in strategies 3.1 “Partner to protect and enhance our biodiversity, ecosystems and ecology”, 3.2 “Strive to become a sustainable community”, 3.3 “Partner to protect and enhance the health of the Shire’s coastlines, estuaries, waterways and catchments” and 3.4 “Support and secure our farming future”.
E2018/51086	1. Competence of the Community Solutions Panel 2. Major rate-payer funded new projects must be indefinitely deferred 3. There is no long term road resealing plan published with the budget 4. The emphasis on pothole patching must stop 5. The expenditure split between rural and town roadworks/bridgeworks is not equitable 6. Railway park development 7. Open spaces operating expenditure 8. Footpaths, especially Byron Bay 9. Abandon Byron Bay Masterplan	1. The Community Solutions Panel was a randomly selected group of 31 residents brought together to deliberate on infrastructure priorities. The panel identified a framework and set of values to apply – risk and safety was their number one consideration. 2. Revenue from the Special Rate Variation is dedicated to infrastructure renewal and maintenance. Major projects such as the Bayshore Drive Roundabout have been granted funded and also projects have been funded wholly or in part by Section 94 development contributions. S94 funds can only be spent on new works. 3. It is intended to develop and publish a 4 year rolling bitumen resealing program in future budget documents after the next collection of condition data for our sealed road network in the 2018/19 financial year. Until this data has been collected the bitumen resealing program will be prepared and published for one financial year at a time. 4. The under investment by Council in our road pavements in the past has resulted in a substantial increase in costs for pothole patching. Council has a strategy for the future to continue to make the roads safe by pothole patching; increasing the resealing budget; and introduction of a heavy patching program to repair the defects in the sealed roads. This is proposed for 2018/19. This is a change in strategy for Council and an investment of funds to change the condition of our road network in the future, however, noting that this will be a lengthy period of time due to the condition of our road network and the available funds. The proposed resealing budget for 2018/19 has been increased substantially to that normally provided in the past. 5. The works proposed for 2018/19 and in the future are based on need not an equitable distribution of funds between urban/rural or each town and village, noting the limited available funds and the overwhelming need for road pavement renewal of 40% of our road network, which is in poor condition. 6. Work on the Railway Park upgrade and adjacent integrated projects such as the proposed Byron Bus Interchange are majority funded through grants and S94 contributions. 7. The Australasian LG Performance Excellence Program FY17 Report (insert web link) indicates that Byron’s level of operating expenditure allocated to Open Space Community assets is comparatively low. Byron’s per capita spending on operating costs for Parks and Gardens and Sports Grounds and Venues shire-wide is significantly lower than the average for the participating NSW medium sized regional councils. Apex park is valued by the Byron community and the level of maintenance required reflects the heavy use by both local community members and visitors. All maintenance and capital improvements are solely funded from Crown reserves that are not transferable to other Community assets. Any reduction in funding for this reserve would be returned to this reserve. 8. Council has allocated funding in 2017/18 for the revision of our Bike Plan and the preparation of a pedestrian and access mobility plans (PAMP), which will involve consultation with key stakeholders and exhibition of draft plans inviting submissions from the general public. In the course of the preparation of both plans, there will be opportunity to propose routes for footpath’s and bike parts from locations within Byron Bay into the town centre. This engagement with stakeholders and the wider public will occur in the latter half of 2018 and the early part of 2019. 9. The Byron Bay Masterplan was developed through a process of extensive community consultation and participation. The Plan has been adopted by Council and is being implemented with the support of the Byron Bay Town Centre Masterplan Leadership Group. The Plan is progressively being implemented as funding is allocated and grants secured.

Table 2 – 2018-2019 Budget

Doc No.	Regarding	Staff comment
E2018/50967	Funding allocations for the Brunswick Visitor Centre	Council will review this submission for funding as part of the Tourism Management Planning Process which will be undertaken in 2018 and released in 2019.

Table 3 – 2018-2019 Fees and Charges

Doc No.	Regarding	Staff comment
E2018/48463	Intention to levy a garbage collection fee on 390 rural residents	The application of a rural domestic waste management bin collection charge on each parcel of rateable land on which a dwelling house is situated and for which a service is available was recommended by the Water Waste and Sewer Advisory Committee (WWSAC) as part of the Rural Waste Services Review report considered at the 1 March Committee meeting. This recommendation was subsequently adopted by Council during the 19 April 2018 Council Meeting (Res 18-278). A further report detailing information on the relevant legislation associated with the introduction of this charge was considered at the 31 May WWSAC meeting, with the committee recommending Council note the report at the 21 June 2018 Council meeting. The introduction a rural domestic waste management charge on each parcel of rateable land for which a service is available will deliver the following beneficial waste management objectives for the Shire: • It will encourage responsible household waste management practices resulting in environmental benefits such as reduced waste to landfill and increased recycling. This is an important objective of Council’s ongoing commitment to improving its waste management and resource recovery. • It results in a more equitable financial contribution by ratepayers to Council’s operational waste management costs. • The domestic waste bin collection charge has been compulsory for dwellings within the urban collection area for many years so now the rural collection area charging policy is consistent with the urban charging policy. • It will reduce the likelihood of illegal dumping or residential waste in public place bins and other residents bins Section 496 of the Local Government Act 1993 (LGA) states that council must make and levy an annual charge for the provision of domestic waste management services for each parcel of rateable land for which the service is available. Section 539 of the LGA states that in determining the amount of a charge for a service, the council may have regard to (but is not limited to) the following: • the purpose for which the service is provided • the nature, extent and frequency of the service • the cost of providing the service • the categorisation for rating purposes of the land to which the service is provided • the nature and use of premises to which the service is provided • the area of land to which the service is provided Domestic waste management services is defined by the LGA as meaning services comprising the periodic collection of domestic waste from individual parcels of rateable land and services that are associated with those services. Council carefully considered the above legislative requirements before determining its proposed domestic waste charging structure for 2018/19. Council believes the charging structure is equitable and compliant with legislative requirements for the reasons provided earlier. Other Councils in NSW have also adopted compulsory domestic waste bin collection service charges for similar reasons. In response to legislative interpretations; • Council acknowledges that it could apply a lesser charge for customers that choose not to present bins kerbside for collection however, this would conflict with the waste management objectives for the shire detailed earlier. • Council considers that the statement service is available within section 496 to mean that our collection vehicle performs (or attempts to perform) on an ongoing basis, the regular periodic collection of bins adjacent to the kerbside of a property which is located along the usual route taken by the collection vehicle. Council consider that the service has been made available by virtue of the collection vehicle visiting the property regardless of whether bins are seldom presented for collection or not at all. Council also provides bins to customers free of charge (except for wilful damage and excessive bin capacity changeovers) and performs maintenance as requested, meaning that bins are readily available for use by our customers upon request. Council rejects the claim that the service is not available just because a customer choose not to utilise the service that is made available to the property. Whilst Council appreciates some customers may dispose of the waste and recyclables generated at their property diligently and possibly without the requirement of a kerbside domestic waste collection service, introducing a charging system to cater for the wide and varied range of waste disposal habits of our customers is unrealistic and would be cost inhibitive due to the resources required for its administration. Council rejects the claim to impose a bin storage fee upon Council.
E2018/48460	Proposed construction certificate and complying development charges listed as “POA”	Council has provided a Price On Application ("POA") option in lieu of a standard set of fees. This enables staff to tailor an application and inspection fee package for each customer based upon the development proposed. This is the same as what private certifiers are currently able to do and also what some other Councils do. It evens the playing field up for council service delivery in that regard. Having said that Certification fees have remained the same and will continue at the hourly rate of $180.00 per hour. A full quote will be provided to an applicant upon request based on the cost of works and type of proposal.
E2018/40623	Free or discounted entry sought for volunteer Surf Life Savers from Council Pools	Whilst Council acknowledges the great value that volunteer Surf Life Savers provide to our community and visitors we are unable to coater for this request. Council Pools are already heavily discounted to users with net operating losses having been paid for by the General Fund. Council provides a Concession rates (season tickets and single entry) for Holders of Senior Cards, Student Cards, Pensioners / Health Care Cards and family discounts. Council also provide discounted books as an option to all users.
S2018/7881	New Sub-licence fee – Beach access commercial horse riding	During review of this fee and charge for issuing of sub-licences under Councils Crown licence, it was identified that adjustment was necessary after consideration of Councils annual fee payment to Crown in order for Council to have the authority to grant these sub-licences and enable these businesses to operate on Crown Land. The new fees as proposed are in line with neighbouring Council fees for sub-licences of this type of Commercial activity.
E2018/49977 E2018/48867 S2018/8058)	Compulsory rural waste charge	The application of a rural domestic waste management charge on each parcel of rateable land for which a service is available was recommended by the Water Waste and Sewer Advisory Committee (WWSAC) as part of the Rural Waste Services Review report considered at the 1 March Committee meeting. This recommendation was subsequently adopted by Council during the 19 April 2018 Council Meeting (Res 18-278). A further report detailing information on the relevant legislation associated with the introduction of this charge was considered at the 31 May WWSAC meeting, with the committee recommending Council note the report at the 21 June 2018 Council meeting. The introduction of a rural domestic waste management charge on each parcel of rateable land for which a service is available will deliver the following beneficial waste management objectives for the Shire: · It will encourage responsible household waste management practices resulting in environmental benefits such as reduced waste to landfill and increased recycling. This is an important objective of Council’s ongoing commitment to improving its waste management and resource recovery. · It results in a more equitable financial contribution by ratepayers to Council’s operational waste management costs. · The domestic waste bin collection charge has been compulsory for dwellings within the urban collection area for many years so now the rural collection area charging policy is consistent with the urban charging policy. · It will reduce the likelihood of illegal dumping or residential waste in public place bins and other residents bins

Table 4 – General Comments

Doc No.	Regarding	Staff comment
E2018/48457	Loud music at restaurants	Development Consent conditions including hours of operation, noise management and local amenity are included in any new restaurant approvals. Where complaints are registered as CRMs about a development, Council's Community Enforcement Team take the appropriate course of action as per the Enforcement Policy.

Facebook comments received:

Council received 28 comments on social media with more than 7,898 people reached. The comments related to roads, potholes, Bangalow memorial park, works management and establishing regional credit union.

Management Comments – Delivery Program/Operational Plan

The feedback received during public exhibition reinforces the commitments in the Delivery Program and Operational Plan, especially with regard to infrastructure improvements.

Officers have identified an action which should be included as referenced below:

· 5.1.a deliver customer satisfaction survey – responses received by 31 Dec 2018

No other amendments are proposed.

Management Comments – 2018-2019 Revenue Policy

Subject to another report to this Extraordinary Meeting of Council concerning the making of Rates and Charges and two submissions received in Table 3 above, the 2018/2019 Revenue Policy is proposed to be adopted as publicly exhibited. This includes the following:

· Continuation of the rating structure that was significantly revised by Council for the 2017-2018 financial year. The rating structure incorporates the second year of the approved 2017/2018 Special Rate Variation (SRV) with the overall rate yield for 2018-2019 being increased by 7.50% including rate pegging of 2.30%.

· Waste Charges – increases of 7.0% to apply due to:

o Queensland waste levy implementation for depositing waste to landfill sites.

o Increased recyclables gate fees proposed by Lismore City Council resulting from changes China has made to recyclables acceptance (contamination levels and product acceptance pricing).

o Contaminated land studies that require funding.

o Implementation of revised rural domestic waste collection service options (organics service for the village of Federal and removal of optional collection service levy for rural properties containing residential dwellings, as well as providing rural domestic customers with the same range of mixed waste bin capacity options as urban customers).

· Water and Sewerage charges increased in line with the Consumer Price Index of 1.80%.

· The stormwater charge has not increased given it is a regulated charge that has not changed over the last eleven years.

Management Comments – 2018-2019 Fees and Charges

Aside from the public submissions received regarding the proposed fees and charges outlined in Table 3 to this report, there are further proposed amendments to the fees and charges that will not require further advertisement for the following reasons:

· During the public exhibition period, an external review of Council’s proposed 2018-2019 fees and charges was undertaken which resulted in 33 fees having the wrong Goods and Services Tax (GST) treatment applied. This requires 6 fees to be increased as GST needs to be applied and 27 fees to be reduced because GST does not apply. Council discloses in its fees and charges that they may be altered depending upon the application of GST.

· The Office of Local Government via Circular 18-16 on 1 June 2018 have advised that Companion Animals fees are to be increased by the Consumer Price Index. These fees will be changed but not advertised given they are a statutory fee not set by Council.

· Clarification of wording in respect of Interim Parking Permits to comply with Council resolution 18-132 from the 22 March 23018 Ordinary Meeting.

· Updated wording and legislative references for Development Assessment construction certificates and complying development, planning certificates, development certification, subdivision/strata certificates, on-site sewerage fees and planning information fees, temporary food business operation approval.

· Some planning fees have been clarified in terms of Price on Application (POA) status and changed where a statutory fee to the amount or further explanation provided as raised by the submission in Table 3.

Otherwise the fees and charges presented to Council at the Extraordinary Council Meeting held on 17 May 2018 that were adopted for public exhibition remain unchanged.

Management Comments – 2018-2019 Budget Estimates

Refer to Financial Implications Section below:

Financial Implications

The Draft 2018-2019 Statement of Revenue Policy placed on public exhibition in accordance with resolution 18-282 is based on the 2017-2018 budget reviewed at 31 March 2018 with various changes to reflect the increased price of service delivery across all programs developed from the input received from each Council Directorate.

The Draft 2018-2019 Budget Result placed on public exhibition on a Consolidated (All Funds) basis forecast a surplus result of $15,800 with details of that result being included below at Table 5

Table 5 – Forecast Budget Result 2018-2019 Consolidated (All Funds)

Item	Amount $
Operating Result
Operating Revenue	80,318,500
Less: Operating Expenditure	80,748,400
Operating Result – Surplus/(Deficit)	(429,900)

Funding Result

Operating Result – Surplus/ (Deficit)	(429,900)
Add: Non cash expenses – Depreciation	13,177,900
Add: Capital Grants and Contributions	19,235,500
Add: Loan Funds Used	3,899,000
Add: Asset Sales	0
Less: Capital Works	(50,920,000)
Less: Loan Principal Repayments	(2,638,800)
Funding Result – Surplus/(Deficit) (Cash Movement)	(13,876,300)
Reserves Movement – Increase/(Decrease)	(13,892,100)
Overall Budget Result – Surplus/(Deficit) (Operating + Funding)	15,800

Table 6 below provides the indicated unrestricted cash balance of Council estimated at 30 June 2018 based on the Draft 2018-2019 Budget Estimates placed on public exhibition.

Table 6 – Forecast General Fund Unrestricted Cash Balance

Item	Amount $
Forecast unrestricted cash balance to 30 June 2018 at 31 March 2018 Budget Review	1,145,200
Add: Estimated initial draft 2018-2019 budget result	15,800
Forecast unrestricted cash balance at 30 June 2019	1,161,000

During the public exhibition period, the Draft 2018-2019 Statement of Revenue Policy incorporating the Draft 2018-2019 Budget Estimates has been further reviewed. The revised budget position is summarised in Table 7 below:

Table 7 – Forecast Budget Result 2018-2019 Consolidated (All Funds) revised during public exhibition period

Item	Amount $
Operating Result
Operating Revenue	78,826,900
Less: Operating Expenditure	81,271,700
Operating Result – Surplus/(Deficit)	(2,444,800)

Funding Result

Operating Result – Surplus/ (Deficit)	(2,444,800)
Add: Non cash expenses – Depreciation	13,678,900
Add: Capital Grants and Contributions	23,577,600
Add: Loan Funds Used	3,899,000
Add: Asset Sales	0
Less: Capital Works	(50,064,200)
Less: Loan Principal Repayments	(2,638,800)
Funding Result – Surplus/(Deficit) (Cash Movement)	(13,992,300)
Reserves Movement – Increase/(Decrease)	(14,008,100)
Overall Budget Result – Surplus/(Deficit) (Operating + Funding)	15,800

Table 7 indicates a forecasted surplus budget result and this relates to the General Fund. The forecast General Fund Unrestricted Cash Balance position based on the Draft Budget included at Table 7 is outlined in Table 8 below:

Table 8 – Forecast General Fund Unrestricted Cash Balance

Item	Amount $
Forecast unrestricted cash balance to 30 June 2018 at 31 March 2018 Budget Review	1,145,200
Add: Estimated initial draft 2018-2019 budget result	15,800
Forecast unrestricted cash balance at 30 June 2019	1,161,000

The revised Draft 2018-2019 Budget Estimates are also suggesting that Council’s overall revenue and operational expenses are expected to be derived from the following sources and allocated respectively as outlined in the graphs below:

In addition to the operational aspects of the Draft 2018-2019 Budget Estimates as revised during the public exhibition period, Council is now preparing a capital works program of $50.064million. This amount includes $37.600million in the General Fund, $5.144 million in the Water Fund and $7.320million in the Sewerage Fund. In terms of overall proposed capital works expenditure, the graph below indicates the proportionate allocation by Budget Program:

The major changes to the proposed Draft 2018-2019 Budget Estimates have been realised by the following factors:

Council Resolutions:

Funding of $75,000 for the Byron Reforestation Project has been included with funding from the Sewer Fund Capital Works Reserve (Resolution 18-301).

Funding of $25,000 for Water Sensitive Urban Design has been included with funding from the Water Fund Capital Works Reserve (Resolution 18-178).

Resolution 18-282 part 1(b)

At the 17 May 2018 Extraordinary Meeting, Council resolved “the Better Byron Crew wages including on-costs for labour activities for services performed within the Better Byron Crew Service area be capped at $200,000 or as near as practicable… with the additional $210,000 proposed to be drawn for these services be instead used for implementing water sensitive urban design upgrades to the Byron Bay stormwater system.”

The following summary comments are provided with respect to implementing this resolution – and are further detailed at Attachment 5:

· It is acknowledged that there are programs and services in Byron Bay which require improvement and an independent service review will be undertaken in the coming months. This will look at service costs, maintenance activities efficiencies and improvement opportunities.

· It is also important to note that Byron Bay faces a number of other challenges not experienced by other regional councils, including tourism volume, associated infrastructure pressure, more open space per capita than that prescribed by standards (draft Open Space and Recreation Needs Study), weed management approach diverted labour resources to hand weeding of 151 garden beds at the cost of not performing other services.

· The crew consists of five full time staff plus one full time horticultural trainee. Council has a contractual obligation to retain this trainee until 20 August 2018 and it is recommended that they are retained to provide employment and training opportunities for young people

· To achieve the salary cap of $200,000, the crew will need to be reduced by three full time equivalents and these officers will be redeployed elsewhere within Council (as per Local Government Act and State Award). Should no opportunities be available, redundancy will need to be implemented and this is not currently budgeted for.

· The crew is funded from a number of line items, including Crown Reserve, as works are undertaken on Council managed Crown land. These funds are not transferable to other lands or assets. Therefore the expenditure reduction will be from the Parks and Reserves Maintenance line item (3235.2)

· In reducing the budget allocation, it is acknowledged that service levels will change:

o Reduced maintenance services in the Byron Bay Township during non peak periods. Services including litter collection and cleaning, lawn care and weed control, tree and infrastructure maintenance, gardens and maintenance of soft scape elements of traffic control devices will be reduced. A direct reduction in services within Byron Bay Township of $154,500.

o Reduced levels of services for assets such as Railway Square precinct, anticipated to require additional servicing to achieve a minimum desirable level of presentation to meet anticipated increased usage as each stage is commissioned.

o Reduced levels of service shire-wide during Byron Bay township peak times. This is due to the anticipated need to reallocate resources to Byron Bay in response to safety requirements and to provide a basic level of amenity in peak times (reactive works).

The reduction in staff wages has been included in the Draft Budget at Table 7 to comply with the resolution:

Water Sensitive Urban Design Application	Funding allocation Source	Amount	Finance Restriction / Comment
Water network including ancillary infrastructure	Water Fund	$18,500	Meets Water Fund expenditure criteria
Sewer Network including ancillary infrastructure	Sewer Fund	$18,500	Meets Sewer Fund expenditure criteria
Crown Reserve	Crown Paid Parking	$18,500	If applied to adopted projects within Crown Reserve it will meet expenditure criteria
General Fund	Parks and Reserves Maintenance Byron Bay	$154,500	Retains Traineeship until 20 August 18. Reduces Parks and Reserves Maintenance Byron Bay (3235.2) to $283,748
Total Funding WSUD		$210,000	Note Res 18-178

Alternative option to Resolution 18-282 part 1(b)

An alternative option identified by management is to preserve the Better Byron Crew as is until the above mentioned service review has been undertaken and reported to Council by December 2018.

The water sensitive urban design upgrades can be funded from alternative sources, and should Council endorse this approach, a new reserve could be established. This could be established through:

Water Sensitive Urban Design Application	Funding allocation Source	Amount	Finance Restriction
Water network including ancillary infrastructure	Water Fund	$65,000	Meets Water Fund expenditure criteria
Sewer Network including ancillary infrastructure	Sewer Fund	$65,000	Meets Sewer Fund expenditure criteria
Crown Reserve	Crown Paid Parking	$80,000	If applied to adopted projects within Crown Reserve it will meet expenditure criteria
Total Funding WSUD		$210,000

Should Council endorse the alternative option, the below points could be included in the resolution:

1. That an independent service review to be undertaken of service costs and efficiencies for all maintenance activities within the Byron Bay Township.

2. That a reallocation of $154,552 from WSUD budget to Parks and Reserves Maintenance Byron Bay (3235.2).

3. WSUD funding sources be adjusted in accordance with Table 2, that being;

Water Sensitive Urban Design Application	Funding allocation Source	Amount	Finance Restriction
Water network including ancillary infrastructure	Water Fund	$65,000	Meets Water Fund expenditure criteria
Sewer Network including ancillary infrastructure	Sewer Fund	$65,000	Meets Sewer Fund expenditure criteria
Crown Reserve	Crown Paid Parking	$80,000	If applied to adopted projects within Crown Reserve it will meet expenditure criteria
Total Funding WSUD		$210,000

Other Adjustments:

Aside from the resolutions of Council outlined above, there are proposed adjustments to the Draft 2018/2019 Budget Estimates that are reflected in the Budget result presented in Table 7 of this report. These adjustments include:

· Council has received advice from the NSW Grants Commission on 21 June 2018 via Circular GC147 that the Federal Government have again determined to advance 50% of the Financial Assistance Grants for the 2018/2019 financial year prior to the end of the 2017/2018 financial year. This will require Council to reduce its Financial Assistance Grant revenue in 2018/2019 by an estimated $1,537,800. This will have no impact on the overall budget result as the advance funding received in 2017/2018 will be restricted in reserve and carried forward to the 2018/2019 financial year. The Draft 2018-2019 Budget contained the full grant revenue as operating revenue but this needs to be reduced to reflect the advance payment.

· Whilst not influencing the budget result in terms of a funding perspective, a review of the Depreciation expense budgets has been undertaken reflective of current asset values and expected depreciation expense that was not completed prior to the Draft 2018-2019 Budget being adopted for public exhibition. This requires the overall expenditure for Depreciation to be increased by $501,000 to $13,678,900.

· Adjustment to Councillor and Mayoral Fees to provide for the maximum remuneration provided from the determination of the Local Government Remuneration Tribunal reported to Council on 21 June 2018. This requires an adjustment of $1,200.

· Provision of $5,000 to fund Council’s contribution to the Byron Writers Festival in accordance with the current funding agreement. This funding was not included in the Draft 2018-2019 Budget.

· Reallocation of the new funding provided for gravel resheeting $200,000 to specific gravel resheeting works.

· Inclusion of funding and expenditure of $542,000 to be provided by Roads and Maritime Services for the Safer Roads Program.

· Inclusion of funding for the drainage works adjacent to Railway Park of $160,000 as endorsed by the Finance Advisory Committee at its Meeting held on 17 May 2018 with funding provided by the Byron Bay Town Centre Masterplan Reserve.

· Inclusion of funding for a trainee position in the Information Services Branch that was not included in the Draft 2018-2019 Budget but is an approved position. This has a budget impact of $34,800.

· Funding of $50,000 for the Accessible Housing Project and $39,500 for operational costs for the Plant Fund not budgeted for Compliance and Enforcement staff with funding provided from the On-site Sewerage Management Reserve for one year only.

· Increase expected interest on investment revenue by $46,200. This will raise the total interest revenue budget estimate in the General Fund to $1,086,600. Ongoing management of the investment portfolio to pursue investment opportunities within cash flow requirements will hope to achieve this additional revenue.

· Removal of capital expenditure in the Water Fund of $1,849,500 that was included in the Draft 2018-2019 associated with the Fletcher Street development as this project has been placed on hold.

Council in the preparation of its Operational Plan is required to include a number of statements in relation to its Revenue Policy for 2018-2019. This includes a statement containing the estimate of Council’s Income and Expenditure or Budget for this period. The other statements identified in Clause 201 of the Local Government (General) Regulation 2005 are in the main dependant upon the rate pegging limits approved by the Minister for Local Government (now the Independent Pricing and Regulatory Tribunal (IPART)), any application for a special rate variation and Council’s decisions in relation to expenditure, income and the associated fees and charges.

The assumptions/parameters used in preparing the Draft 2018-2019 Budget Estimates as presented in this report for Council’s consideration include the following:

· Second year of the Special Rate Variation of 7.5% per annum for four years as approved by the Independent Pricing and Regulatory Tribunal (IPART) inclusive of the 2.3% rate peg increase determined previously by IPART for 2018/2019.

· Consumer Price Index assumption of 1.8%.

· Indexation of expenditure limited to 0.8% where possible to assist in deriving a 1% efficiency gain.

· Allowance of the 2.5% pay increase applicable in 2018/2019 under the Local Government (State) Award 2017.

· Continuation of new loan borrowings of $6million between 2017/2018 to 2019/2020 devoted to bridge/culvert replacement programs. Specifically $3.899million is the required borrowings for 2018/2019.

· Interest on investments around 2.6% plus active management of the investment portfolio to keep it short around three month maturities to take opportunities of market offerings or longer term investments to follow Council’s resolution regarding Environmental and Socially Responsible Investments.

· Reflective of the Actions contained in the Draft 2018/2019 Operational Plan.

The immediate financial forecast of the General Fund has been discussed in detail in this report, however it is suggested Council needs to look at its longer term financial position, especially in the area of infrastructure maintenance and renewal in comparison to other areas of service provided. This is especially so given the requirements stipulated by the NSW State Government as part of its ‘Fit for the Future’ reform, and the focus for Council of it approved Special Rate Variation (SRV) for 2017/2018 to 2020/2021 financial years.

The Water and Sewer budgets have been prepared with pricing to generate the required revenue to repay debt (Sewer), to address capital works and ongoing maintenance works in these Funds.

Whilst this report is concerned with the oncoming 2018/2019 financial year, Council also needs to consider its longer term financial projections. The budget projections realistically still demonstrate the difficulty Council has absorbing additional costs without corresponding revenue. It can only be emphasised that Council must consider carefully the long term implications on its finances, in any consideration to add a new asset/service.

Statutory and Policy Compliance Implications

In regard to Strategic Planning, Chapter 13, Part 2 of the Local Government Act 1993 states:

402 Community strategic plan

(1) Each local government area must have a community strategic plan that has been developed and endorsed by the council. A community strategic plan is a plan that identifies the main priorities and aspirations for the future of the local government area covering a period of at least 10 years from when the plan is endorsed.

(2) A community strategic plan is to establish strategic objectives together with strategies for achieving those objectives.

(3) The council must ensure that the community strategic plan:

(a) addresses civic leadership, social, environmental and economic issues in an integrated manner, and

(b) is based on social justice principles of equity, access, participation and rights, and

(c) is adequately informed by relevant information relating to civic leadership, social, environmental and economic issues, and

(d) is developed having due regard to the State government’s State Plan and other relevant State and regional plans of the State government.

(4) The council must establish and implement a strategy (its community engagement strategy), based on social justice principles, for engagement with the local community when developing the community strategic plan.

(5) Following an ordinary election of councillors, the council must review the community strategic plan before 30 June following the election. The council may endorse the existing plan, endorse amendments to the existing plan or develop and endorse a new community strategic plan, as appropriate to ensure that the area has a community strategic plan covering at least the next 10 years.

(6) A draft community strategic plan or amendment of a community strategic plan must be placed on public exhibition for a period of at least 28 days and submissions received by the council must be considered by the council before the plan or amendment is endorsed by the council.

(7) Within 28 days after a community strategic plan is endorsed, the council must post a copy of the plan on the council’s website and provide a copy to the Departmental Chief Executive. A copy of a community strategic plan may be provided to the Departmental Chief Executive by notifying the Minister of the appropriate URL link to access the plan on the council’s website.

403 Resourcing strategy

(1) A council must have a long-term strategy (called its resourcing strategy) for the provision of the resources required to implement the strategies established by the community strategic plan that the council is responsible for.

(2) The resourcing strategy is to include long-term financial planning, workforce management planning and asset management planning.

404 Delivery program

(1) A council must have a program (its delivery program) detailing the principal activities to be undertaken by the council to implement the strategies established by the community strategic plan within the resources available under the resourcing strategy.

(2) The delivery program must include a method of assessment to determine the effectiveness of each principal activity detailed in the delivery program in implementing the strategies and achieving the strategic objectives at which the principal activity is directed.

(3) The council must establish a new delivery program after each ordinary election of councillors to cover the principal activities of the council for the 4-year period commencing on 1 July following the election.

(4) A draft delivery program must be placed on public exhibition for a period of at least 28 days and submissions received by the council must be considered by the council before the delivery program is adopted by the council.

(5) The general manager must ensure that regular progress reports are provided to the council reporting as to its progress with respect to the principal activities detailed in its delivery program. Progress reports must be provided at least every 6 months.

405 Operational plan

(1) A council must have a plan (its operational plan) that is adopted before the beginning of each year and details the activities to be engaged in by the council during the year as part of the delivery program covering that year.

(2) An operational plan must include a statement of the council’s revenue policy for the year covered by the operational plan. The statement of revenue policy must include the statements and particulars required by the regulations.

(3) A council must prepare a draft operational plan and give public notice of the draft indicating that submissions may be made to the council at any time during the period (not less than 28 days) that the draft is to be on public exhibition. The council must publicly exhibit the draft operational plan in accordance with the notice.

(4) During the period of public exhibition, the council must have for inspection at its office (and at such other places as it may determine) a map that shows those parts of its area to which each category and sub-category of the ordinary rate and each special rate included in the draft operational plan applies.

(5) In deciding on the final operational plan to be adopted, a council must consider any submissions that have been made concerning the draft plan.

(6) The council must post a copy of its operational plan on the council’s website within 28 days after the plan is adopted.

406 Integrated planning and reporting guidelines

(1) The Departmental Chief Executive is to establish integrated planning and reporting guidelines (referred to in this Chapter as the guidelines) for the purposes of this Chapter.

(2) The guidelines can impose requirements in connection with the preparation, development and review of, and the contents of, the community strategic plan, resourcing strategy, delivery program, operational plan, community engagement strategy, annual report and state of the environment report of a council.

(3) In particular (but without limiting subsection (2)), the guidelines can impose requirements in relation to any of the following:

(a) the procedures to be followed in the preparation, development or review of plans, strategies, programs and reports,

(b) the matters to be addressed or provided for by plans, strategies, programs and reports,

(c) requirements for consultation in connection with the preparation, development or review of plans, strategies and programs,

(d) the matters to be taken into account or to which regard is to be had in connection with the preparation, development or review of plans, strategies, programs and reports.

(4) A council must ensure that the requirements of the guidelines are complied with.

(5) The guidelines can include other material for the guidance of councils in connection with the plans, strategies, programs and reports to which this section applies.

(6) The Departmental Chief Executive may review and amend the guidelines from time to time.

(7) The guidelines and any amendment of the guidelines must be posted on the Department’s website and notified in writing to each council by the Departmental Chief Executive.

Section 405(2) of the Local Government Act requires that the Statement of the Council’s Revenue Policy that must be included on the Operational Plan. Clause 201 of the Local Government (General) Regulation 2005 details the statements and information that must be included in the Revenue Policy and has been reproduced below:

201 Annual statement of council’s revenue policy

(1) The statement of a council’s revenue policy for a year that is required to be included in an operational plan under section 405 of the Act must include the following statements:

(a) a statement containing a detailed estimate of the council’s income and expenditure,

(b) a statement with respect to each ordinary rate and each special rate proposed to be levied,

Note: The annual statement of revenue policy may include a note that the estimated yield from ordinary rates is subject to the specification of a percentage variation by the Minister if that variation has not been published in the Gazette when public notice of the annual statement of revenue policy is given.

(d) a statement of the types of fees proposed to be charged by the council and, if the fee concerned is a fee to which Division 3 of Part 10 of Chapter 15 of the Act applies, the amount of each such fee,

(e) a statement of the council’s proposed pricing methodology for determining the prices of goods and the approved fees under Division 2 of Part 10 of Chapter 15 of the Act for services provided by it, being an avoidable costs pricing methodology determined by the council in accordance with guidelines issued by the Director-General,

(f) a statement of the amounts of any proposed borrowings (other than internal borrowing), the sources from which they are proposed to be borrowed and the means by which they are proposed to be secured.

(2) The statement with respect to an ordinary or special rate proposed to be levied must include the following particulars:

(a) the ad valorem amount (the amount in the dollar) of the rate,

(b) whether the rate is to have a base amount and, if so:

(i) the amount in dollars of the base amount, and

(ii) the percentage, in conformity with section 500 of the Act, of the total amount payable by the levying of the rate, or, in the case of the rate, the rate for the category or sub-category concerned of the ordinary rate, that the levying of the base amount will produce,

(d) in the case of a special rate-the purpose for which the rate is to be levied,

(e) the categories or sub-categories of land in respect of which the council proposes to levy the rate.

(3) The statement with respect to each charge proposed to be levied must include the following particulars:

(a) the amount or rate per unit of the charge,

(b) the differing amounts for the charge, if relevant,

(d) the estimated yield of the charge,

(e) in relation to an annual charge for the provision by the council of coastal protection services (if any)-a map or list (or both) of the parcels of rateable land that are to be subject to the charge.

(4) The statement of fees and the statement of the pricing methodology need not include information that could confer a commercial advantage on a competitor of the council.

In accordance with clause 406 of the Local Government (General) Regulation 2005 the following provision applies in relation to the authorisation of expenditure.

211 Authorisation of expenditure

(1) A council, or a person purporting to act on behalf of a council, must not incur a liability for the expenditure of money unless the council at the annual meeting held in accordance with subclause (2) or at a later ordinary meeting:

(a) has approved the expenditure, and

(b) has voted the money necessary to meet the expenditure.

(2) A council must each year hold a meeting for the purpose of approving expenditure and voting money.

(3) All such approvals and votes lapse at the end of a council’s financial year. However, this subclause does not apply to approvals and votes relating to:

(a) work carried out or started, or contracted to be carried out, for the council, or

(b) any service provided, or contracted to be provided, for the council, or

(d) facilities provided or started, or contracted to be provided, for the council,

before the end of the year concerned, or to the payment of remuneration to members of the council’s staff.

The following provision of the Local Government Act applies in relation to the public notice of fees determined by Council.

610F Public notice of fees

(1) A council must not determine the amount of a fee until it has given public notice of the fee in accordance with this section and has considered any submissions duly made to it during the period of public notice.

(2) Public notice of the amount of a proposed fee must be given (in accordance with section 405) in the draft operational plan for the year in which the fee is to be made.

(3) However, if, after the date on which the operational plan commences:

(a) a new service is provided, or the nature or extent of an existing service is changed, or

(b) the regulations in accordance with which the fee is determined are amended,

the council must give public notice (in accordance with section 705) for at least 28 days of the fee proposed for the new or changed service or the fee determined in accordance with the amended regulations.

(4) This section does not apply to a fee determined by a council for an application made in a filming proposal, if that fee is consistent with a scale or structure of fees set out in an applicable filming protocol.

BYRON SHIRE COUNCIL

Staff Reports - Corporate and Community Services 4.2 - Attachment 5

Review of direct impacts of resolution 18-282 1b and background information.

(Byron Bay Town Centre Maintenance)

At Council’s Extraordinary Meeting held 17 May, Report 4.1 Public Exhibition - Draft 2018-2019 Statement of Revenue Policy, with the adoption of the public exhibition of the Draft budget, Council Resolved the following;

Res 18-282:

1. That Council adopt for exhibition the Draft 2018-2019 Statement of Revenue Policy, comprising Budget Estimates (with the following changes), Rates and Charges, Borrowings and Fees and Charges (with the following changes): …

b) That the Better Byron Crew wages including on-costs for labour activities for services performed within the Better Byron Crew Service area be capped at $200,000 or as near as practicable,

… with the additional $210,000 proposed to be drawn for these services be instead used for implementing water sensitive urban design upgrades to the Byron Bay stormwater system

The following comments are provided with respect to implementing this resolution.

1. Current Performance in Byron Bay

Staff acknowledge, from the information provided supporting Res 18-282, that there are concerns that management of programs and services in Byron Bay which require improvement. In response, Infrastructure Services over the following months will cause an independent service review to be undertaken of service costs and efficiencies for all maintenance activities within the Byron Bay township against budget. In addition to reviewing budgets, this review would identify and recommend actions on opportunities for improvement.

The review will look to learn from recent restructuring of operations within Open Space in other areas of the Shire, for example the processes introduced into Mullumbimby in the last year have received considerable positive feedback from the community. It will also consider program approaches other councils use.

2. Preliminary service review information

In reviewing the impacts of this resolution to the Open Space budget, Staff have undertaken a comparison of budget allocation to Open Space Community assets in Byron against regional councils of similar scale.

The below graph, compiled from the The Australasian LG Performance Excellence Program FY17 Report represents a filtered survey population of NSW medium sized regional councils and has been comprised from the following sample sizes:

(a) 27 councils for Parks and Gardens (medium sized regional councils)

(b) 24 councils for Sporting Grounds and Venues (medium sized regional councils)

Source: The Australasian LG Performance Excellence Program FY17 Report. The information, statements and statistics are of a general nature and have been prepared from data provided by participating councils. The reliability, accuracy or completeness of this information has not been independently verified. Accordingly, whilst the statements are given in good faith, no one should act without obtaining specific advice and neither LG Professionals, NSW nor PwC accepts any responsibility for the consequences of any person’s use of or reliance on the report (in whole or in part) or any reference to it.

The above graph indicates that the level of operating expenditure allocated to Open Space Community assets is comparatively low. It shows that Byron’s (red) per capita spending on operating costs for Parks and Gardens and Sports Grounds and Venues shire-wide is significantly lower than the average for the participating NSW medium sized regional councils (shown in orange). The average shown in pink on the above graph is the average for all participating councils (metropolitan, regional and rural, as well as large, medium and small councils in NSW, SA, WA, Qld and New Zealand).

Other considerations of note when comparing Byron Shire to other medium size regional councils include:

a) tourism volume and associated infrastructure pressure on the iconic town of Byron Bay;

b) preliminary findings from the draft Open Space and Recreation Needs Study, that Byron community is fortunate to have more open space per capita than that prescribed by standards, indicating that the levels of expenditure being spent on individual assets is likely to be even lower than individual assets in comparable council areas;

c) Council’s weed management approach in the Byron CBD up until recently, diverted labour resources to hand weeding of 151 garden beds at the cost of not performing other services.

3. Staff impacts under the Local Government (State) Award.

The impact on Better Byron Crew staff is significant, with three Full Time Equivalent staff being required to be relocated elsewhere in order to cap Better Byron Crew wages including on-costs for labour activities for services performed, within the Better Byron Crew service area as near as possible to $200,000.

Under the Local Government Act 1993 and Local Government (State) Award 2017, specifically section 39 Workplace Change, it is a requirement that Council identify and offer reasonable redeployment opportunities for affected staff, for this reason, the direct application of Res 18-282 1 b) would result in 3 FTE staff that currently work within the Better Byron Crew Team being offered redeployment within Council. Where reasonable redeployment opportunities and agreement cannot be reached, there is potential to incur redundancy costs. There is currently no budget to fund any such costs.

4. Better Byron Crew labour services and primary cost allocation

The Better Byron Crew labour activities draw from a number of budget line items that fund essential services for Byron Bay and Suffolk Park. These activities occur on Council managed Crown, road reserves and Council owned land. Funding for activities within Crown Land is drawn from a Crown Reserve funds. These funds are not transferable to other lands or assets. Any reduction in services on Crown lands would require any savings to be transferred back to its Crown Reserve Fund.

The key services performed by the Better Byron Crew are litter and rubbish collection, cleaning, lawn care, weed control, gardens and tree maintenance and infrastructure repair and renewal work.

Below is an approximate percentage break down of these areas.

The draft budget presented to Councils Extraordinary Meeting held 17 May presented the following primary line items which are applicable to the operations of the Better Byron Crew.

Parks and Reserves Maintenance Byron Bay (3235.2) $438,300

Parks and Reserves Maintenance Byron Bay Crown (3236) $110,000

Byron Bay Town Centre Renewals (General Fund Capital Works) $73,800

On the basis Res 18-282 these accounts are where adjustments have been considered and staff advise:

a) The Byron Bay Town Centre Renewals budget should be preserved as this program funds renewal of infrastructure within the Town Centre to make it safe, consistent with the recommendations of the Community Solutions Panel.

b) The Parks and Reserves Maintenance Byron Bay Crown should be preserved due to the inability to transfer any proposed savings from Crown funds or for work on Crown lands to other locations or projects.

c) To implement Res 18-282 1. B, the final amount for reallocation to Water Sensitive Urban Design (WSUD) should be taken from Parks and Reserves Maintenance Byron Bay (3235.2) as it is the primary funding source for the Better Byron Crew labour services.

The Better Byron Crew currently consists of five (5) Full time staff (FTE) plus a one full time Horticultural Trainee.

Council has a contractual obligation to retain this traineeship until 20 August 2018. The cessation of this traineeship is not preferred for reasons that these traineeship positions provide important employment and training opportunities for local young people. Retention of the Horticultural Traineeship funding in the Open Space team would be consistent with Council’s adopted Workforce Plan priority actions that include, increasing representation of young people in our workforce, increasing traineeships and apprenticeships in service areas with a high level of potential future retirements and investing in vocational programs to ameliorate future skills shortages.

5. Resolution implementation

Resolution 18-282 1 is reflected in the draft budget with reallocation of funding in accordance with Table 1, Option A.

Staff have identified a second option, Option B: Preservation of the Better Byron Crew until completion of service review which forms managements recommendation.

Option A - Relocation of BBC staff to other areas of Council

In accordance with the resolution, the draft budget has been adjusted in accordance with this option as a direct implementation of the resolution. This option provides $210,000 to a Water Sensitive Urban Design reserve in accordance with the below table and a direct reduction of $154,552 from Parks and Reserves Maintenance Byron Bay to $283,748 (includes Suffolk Park maintenance of parks and reserves).

This option reduces the Better Byron Crew team from five (5) Full Time Equivalent staff plus one (1) full time equivalent Trainee to Three (3) full time equivalent staff.

Table 1.

Water Sensitive Urban Design Application	Funding allocation Source	Amount	Finance Restriction / Comment
Water network including ancillary infrastructure	Water Fund	$18,500	Meets Water Fund expenditure criteria
Sewer Network including ancillary infrastructure	Sewer Fund	$18,500	Meets Sewer Fund expenditure criteria
Crown Reserve	Crown Paid Parking	$18,500	If applied to adopted projects within Crown Reserve it will meet expenditure criteria
General Fund	Parks and Reserves Maintenance Byron Bay	$154,500	Retains Traineeship until 20 August 18. Reduces Parks and Reserves Maintenance Byron Bay (3235.2) to $283,748
Total Funding WSUD		$210,000	Note Res 18-178

**Notes this option provides for a Better Byron Crew Service area cap of crew labour services of $218,348 with the traineeship being retained until 20 August 2018.

Considerations for this option

The draft budget prior to the adoption of Res 18-282 1, presented the following primary line items applicable to the operations of the Better Byron Crew:

Parks and Reserves Maintenance Byron Bay (3235.2) $438,300

Parks and Reserves Maintenance Byron Bay Crown (3236) $110,000

Byron Bay Town Centre Renewals (General Fund Capital Works) $73,800

Parks and Reserves Maintenance Byron Bay Crown is considered an inappropriate source of budget for transfer due to an inability to transfer any proposed savings from Crown funds or for work on Crown lands to other locations or projects.

The Byron Bay Town Centre Renewals budget is considered an inappropriate source of budget for transfer as this program funds renewal of infrastructure within the Town Centre to make it safe, consistent with the recommendations of the Community Solutions Panel.

Impacts and Risks of this option

Level of service impacts

· Reduced maintenance services in the Byron Bay Township during non peak periods. Services including litter collection and cleaning, lawn care and weed control, tree and infrastructure maintenance, gardens and maintenance of soft scape elements of traffic control devices will be reduced. A direct reduction in services within Byron Bay Township of $154,552.

· Reduced levels of services for assets such as Railway Square precinct, anticipated to require additional servicing to achieve a minimum desirable level of presentation to meet anticipated increased usage as each stage is commissioned.

· Reduced levels of service shire-wide during Byron Bay township peak times. This is due to the anticipated need to reallocate resources to Byron Bay in response to safety requirements and to provide a basic level of amenity in peak times (reactive works).

Redeployment impacts

· Reallocation of some Contracted service activities to redeployed staff.

· Adjustments to Open Space Plant and Equipment requirements (Please note that the direct budget impacts on plant and equipment is unknown at the time of this report)

Other impacts

· Loss of a traineeship position post 20 August 2018.

· Reduction of Town Centre Maintenance Crew (BBC) from five (5) Full Time Equivalent staff plus one (1) full time equivalent Trainee to Three (3) full time equivalent staff.

Preservation of the Better Byron Crew until completion of service review– Option B

This option requires a change in budget, namely a reallocation of $154,552 to Parks and Reserves Maintenance Byron Bay (3235.2) to $438,300 and adjustments to the WSUD reserve in accordance with Table 2.

Staff acknowledge, from the information provided supporting Res 18-282, that there are concerns that management of programs and services in Byron Bay which require improvement. In response, Infrastructure Services over the following months will cause an independent service review to be undertaken of service costs and efficiencies for all maintenance activities within the Byron Bay Township against budget. In addition to reviewing budgets, this review would identify and recommend actions on opportunities for improvement.

Staff are committed to improving and all efforts will be made to try to meet community expectations for the Byron Bay Township if funding is reduced. However, staff are obligated to provide professional advice for Council’s consideration and believe that providing the same services with fewer resources will be highly challenging and that the reduction in budget will likely result in a reduction in services in both the Byron Bay township and at other parts of the shire at times when resources need to be diverted back into the Byron CBD for reactive works for reasons of public safety and during peak periods.

This is why, it would be management’s preference to place the implementation of Res 18-282 1.b) on hold until a full independent service review is completed and that findings from this review be brought back to Council by December 2018 for further consideration of services and budgets. This recommendation is made having taken into consideration:

a) The acknowledged need for improvement in service design and delivery in the Byron Bay township.

b) Preliminary analysis of operating expenditure allocated to open space, as being lower than the average for the participating NSW medium sized regional councils.

c) Preliminary findings that the Byron Shire community is fortunate to have more open space per capita than that prescribed by standards, resulting in low levels of expenditure being spread thinly across higher numbers of assets.

d) Potential for redundancy costs if agreement with staff is unable to be reached.

e) ongoing operational change to the Better Byron Crew labour activities (for example the cessation of hand weeding of traffic control devices and roadside garden beds due to safety obligations and the implementation of reduction of litter campaign by the Resource Recovery Team); and

f) Likely reductions in services within Byron Bay Township and flow on effect of a likely reduction in services in other areas of the shire when resources need to be diverted due to safety reasons or during peak periods and major event times.

In addition to the independent service review, it is recommended that a Water Sensitive Urban Design Reserve be established as follows:

Table 2.

Water Sensitive Urban Design Application	Funding allocation Source	Amount	Finance Restriction
Water network including ancillary infrastructure	Water Fund	$65,000	Meets Water Fund expenditure criteria
Sewer Network including ancillary infrastructure	Sewer Fund	$65,000	Meets Sewer Fund expenditure criteria
Crown Reserve	Crown Paid Parking	$80,000	If applied to adopted projects within Crown Reserve it will meet expenditure criteria
Total Funding WSUD		$210,000

Notes:

· This option retains the Better Byron Crew to undertake essential services until the independent service review is completed and subsequent findings are brought back to Council for consideration.

· For specific WSUD projects, it is recommended that the above funding allocations be leveraged with any available grant funding opportunities.

6. Summary:

The Better Byron Crew labour activities draw from a number of budget line items that fund essential services for Byron Bay and Suffolk Park. These activities occur on Council managed Crown, road reserves and Council owned land. Key services performed by the Better Byron Crew are litter and rubbish collection, cleaning, lawn care, weed control, gardens, tree maintenance and infrastructure repair and renewal work.

The following reasons have lead to an alternate option B.

a) The acknowledged need for improvement in service design and delivery in the Byron Bay township and staff decision to under take a independent service review

b) Preliminary analysis of operating expenditure allocated to open space, as being lower than the average for the participating NSW medium sized regional councils.

d) Potential for incurring redundancy costs if redeployment agreement with staff is unable to be reached.

e) Ongoing operational change to the Better Byron Crew labour activities (for example the recent cessation of hand weeding of traffic control devices and roadside garden beds due to safety obligations and the implementation of reduction of litter campaign by the Resource Recovery Team); and

f) Likely reductions in services within Byron Bay township and flow on impacts of likely reduction in services in other areas of the shire at times when resources need to be diverted due to safety obligations and or during peak periods and major event times.

Alternate recommendation

1) That an independent service review to be undertaken of service costs and efficiencies for all maintenance activities within the Byron Bay Township.

2) That a reallocation of $154,552 from WSUD reserve account to Parks and Reserves Maintenance Byron Bay (3235.2).

3) WSUD reserve funding sources be adjusted in accordance with Table 2, that being;

Water Sensitive Urban Design Application	Funding allocation Source	Amount	Finance Restriction
Water network including ancillary infrastructure	Water Fund	$65,000	Meets Water Fund expenditure criteria
Sewer Network including ancillary infrastructure	Sewer Fund	$65,000	Meets Sewer Fund expenditure criteria
Crown Reserve	Crown Paid Parking	$80,000	If applied to adopted projects within Crown Reserve it will meet expenditure criteria
Total Funding WSUD		$210,000

BYRON SHIRE COUNCIL

Staff Reports - Corporate and Community Services 4.3

Report No. 4.3 Making of the 2018/2019 Ordinary Rates and Charges

Directorate: Corporate and Community Services

Report Author: James Brickley, Manager Finance

File No: I2018/1160

Theme: Corporate Management

Financial Services

Summary:

Council at its Extraordinary Meeting held on 17 May 2018, following consideration of Report No.4.1 Public Exhibition – Draft 2018-2019 Statement of Revenue Policy, adopted resolution 18-282, which determined a proposed Rating Structure for the 2018/2019 Financial Year for the purposes of public exhibition, and placed the Draft 2018/2019 Statement of Revenue Policy comprising the Budget Estimates, Rates and Charges, Borrowings and Fees and Charges on public exhibition for twenty eight days.

The Statement of Revenue Policy provides a detailed description of each of the rates, charges and fees that Council will levy on the 2018/2019 Rates and Charges Notice, and also describes the circumstances of a property to which a specific ordinary rate, charge, interest or fee will apply. It also lists relevant sections of legislation that allows for the levy of each rate, charge or fee to be made.

The public exhibition period seeking submissions on the draft documents closed on 15 June 2018, with the details of those submissions being the subject of another report to this Extraordinary Council Meeting.

Each year Council is required to make the ordinary rates and charges pursuant to sections 533, 534 and 535 of the Local Government Act 1993 (LGA), with section 543 of the LGA requiring Council to make a short separate name for each rate and charge it makes. Council is also required to set the rate of interest charged on overdue rates and charges in accordance with section 566 (3) of the LGA.

This report satisfies these legislative requirements for the 2018/2019 financial year.

RECCOMENDATION:

That in accordance with Sections 533, 534, 535, 543 and 566 of the Local Government Act 1993 (LGA), Council makes the ordinary rates, makes the charges, makes the fees and sets the interest rate to be charged on overdue rates and charges for 2018/19 listed in the following tables.

1. Ordinary Rates

Name of Ordinary Rate (Rate Notice short name)	*Rate in the Dollar or Ad-Valorem amount ($)	Minimum Rate ($)
Ordinary Rate Residential	0.2314	803.00
Ordinary Rate Residential Flood	0.2314	402.00
Ordinary Rate Business	0.4058	803.00
Ordinary Rate Business Byron CBD	0.5118	803.00
Ordinary Rate Mining	0.4058	803.00
Ordinary Rate Farmland	0.2102	803.00
Ordinary Rate Farmland Flood	0.2102	402.00

*Applied to 2016 base date land valuation

2. Domestic Waste Management Charges

Name of Domestic Waste Collection Charge (Rate Notice short name)	Annual Charge ($)
Domestic Waste 80L 3 Bin Collection	132.00
Domestic Waste 140L 3 Bin Collection	278.00
Domestic Waste 240L 3 Bin Collection	413.00
Domestic Waste 140L Week Collect 3 Bins	728.00
Domestic Waste 240L Week Collect 3 Bins	928.00
Domestic Waste 140L 2 Bin Collection	199.00
Domestic Waste 240L 2 Bin Collection	296.00
Domestic Waste Vacant Land Charge Urban	27.00
Domestic Waste Vacant Land Charge Rural	27.00
Domestic Recycling Additional Bin	92.00
Domestic Organics Additional Bin	107.00
Domestic Waste 80L 3Bin Multi Unit Serv	132.00
Domestic Waste 140L 3Bin Multi Unit Serv	278.00
Domestic Waste 240L 3Bin Multi Unit Serv	413.00
Domestic Waste 80L 2Bin Multi Unit Serv	132.00
Domestic Waste 140L 2Bin Multi Unit Serv	278.00
Domestic Waste 240L 2Bin Multi Unit Serv	413.00
Domestic Waste Strata 2Bin Share Service	221.00
Domestic Waste Strata 3Bin Share Service	221.00

3. Waste Management Charges (Non-Domestic)

Name of Waste Management Charge (Rate Notice short name)	Annual Charges ($)
Commercial 140L Waste & Recycle Service	449.00
Commercial 240L Waste & Recycle Service	515.00
Commercial Waste 140L Bin Collection	449.00
Commercial Waste 240L Bin Collection	515.00
Commercial Rural Waste & Recycle Service	463.00
Commercial Recycling 240L Bin Collection	116.00
Commercial Organics 240L Bin Collection	107.00
Waste Operations Charge Residential	75.00
Waste Operations Charge Non-Residential	75.00

4. Mixed Waste Bin Changeover Fee

Fee

Charges ($)

Mixed waste bin – size/capacity changeover fee

(first changeover free of charge then all subsequent changes per property per annum per owner/s attracts fee)

55.00

5. Stormwater Management Service Charges

Name of Stormwater Management Service Charge (Rate Notice short name)	Annual Charges ($)
Stormwater Charge Residential	25.00
Stormwater Charge Residential Strata	12.50
Stormwater Charge Business Strata	$25.00 per 350m² of the land area occupied by the strata scheme (or part thereof), proportioned by the unit entitlement of each lot in the strata scheme, minimum charge $5.00
Stormwater Charge Bus/Mixed Strata Min	12.50
Stormwater Charge Business	$25.00, plus an additional $25.00 for each 350m² or part thereof by which the area of the parcel of land exceeds 350m²

6. Water Charges

Name of Water Charge (Rate Notice short name)	Annual Charges ($)
Water Fixed Charge 20mm Residential	182.00
Water Fixed Charge 20mm Non-Residential	182.00
Water Fixed Charge 25mm Residential	285.00
Water Fixed Charge 25mm Non-Residential	285.00
Water Fixed Charge 32mm Residential	467.00
Water Fixed Charge 32mm Non-Residential	467.00
Water Fixed Charge 40mm Residential	729.00
Water Fixed Charge 40mm Non-Residential	729.00
Water Fixed Charge 50mm Residential	1,139.00
Water Fixed Charge 50mm Non-Residential	1,139.00
Water Fixed Charge 65mm Residential	1,925.00
Water Fixed Charge 65mm Non-Residential	1,925.00
Water Fixed Charge 80mm Residential	2,916.00
Water Fixed Charge 80mm Non-Residential	2,916.00
Water Fixed Charge 100mm Residential	4,556.00
Water Fixed Charge 100mm Non-Residential	4,556.00
Water Fixed Charge Vacant Residential	92.00
Water Fixed Charge Vacant Non-Residential	92.00
Water Fixed Charge Strata Residential	182.00
Water Fixed Charge Strata Non-Residntial	182.00
Water Fixed Charge Fire Service Resident	242.00
Water Fixed Charge Fire Service Non-Res	242.00
	Usage Charges ($)
Water Usage Charge Residential	2.51 per KL to 450 KL 3.77 per KL thereafter
Water Usage Charge Residential – Non-Compliant	5.40 per KL
Water Usage Charge Non-Residential	2.70 per KL
Water Usage Charge Non-Residential - Non-Compliant	5.40 per KL

7. Sewer Charges and On Site Sewage Management System Fee

Name of Sewer Charge (Rate Notice short name)	Annual Charges or Fee ($)
Sewer Fixed Charge 20mm Residential	834.00
Sewer Fixed Charge 20mm Non-Residential	834.00
Sewer Fixed Charge 25mm Residential	1,303.00
Sewer Fixed Charge 25mm Non-Residential	1,303.00
Sewer Fixed Charge 32mm Residential	2,135.00
Sewer Fixed Charge 32mm Non-Residential	2,135.00
Sewer Fixed Charge 40mm Residential	3,335.00
Sewer Fixed Charge 40mm Non-Residential	3,335.00
Sewer Fixed Charge 50mm Residential	5,211.00
Sewer Fixed Charge 50mm Non-Residential	5,211.00
Sewer Fixed Charge 65mm Residential	8,807.00
Sewer Fixed Charge 65mm Non-Residential	8,807.00
Sewer Fixed Charge 80mm Residential	13,340.00
Sewer Fixed Charge 80mm Non-Residential	13,340.00
Sewer Fixed Charge 100mm Residential	20,844.00
Sewer Fixed Charge 100mm Non-Residential	20,844.00
Sewer Fixed Charge Vacant Residential	417.00
Sewer Fixed Charge Vacant Non-Res	417.00
Sewer Fixed Charge Rebated Residential (pods)	834.00
Sewer Fixed Charge Rebated Non-Resident (pods)	808.00
On-Site Sewage Management System (OSMS) Fee	45.00
	Usage Charges ($)
Sewer Usage Charge Residential	1.89 per KL
Sewer Usage Charge Non-Residential	*SDF x 2.51 per KL

*SDF = Individual Property Sewer Discharge Factor (%)

8. Liquid Trade Waste Charges

Name of Liquid Trade Waste Charge (Rate Notice short name)	Annual Charges ($)
Liquid Trade Waste – Category 1	156.00
Liquid Trade Waste – Category 2	260.00
Liquid Trade Waste – Category 2S	260.00
Liquid Trade Waste – Category 3	437.00
	Usage Charges ($)
Liquid Trade Waste Usage Charge	**TWDF x 2.28 per KL
Liquid Trade Waste Usage Charge – Non-Compliant Cat 1	**TWDF x 3.77 per KL
Liquid Trade Waste Usage Charge – Non-Compliant Cat 2/2S	**TWDF x 16.50 per KL
Liquid Trade Waste Usage Charge – Non-Compliant Pump Stn	**TWDF x 3.77 per KL

*TWDF = Individual Property Trade Waste Discharge Factor (%)

9. Interest Rate on Overdue Rates and Charges

Name of Interest Rate

(Rate Notice short name)

Rate (%)

Interest

7.5%

Report

This report satisfies these legislative requirements for the 2018/2019 financial year.

Council in addition will be continuing to apply the Special Rate Variation (SRV) approval from the Independent Pricing and Regulatory Tribunal (IPART) received on 9 May 2017 to increase its permissible general income by 7.5% per annum for four rating years from 2017/2018 (section 508A LGA). For the 2018/2019 financial year, this is the second year of the increase. This SRV includes the rate pegging limit (which was announced as 2.3% for 2018/2019 and future rate peg announcements up to and including the 2020/2021 financial year).

The amounts outlined in the first table in the recommendation to this report headed Ordinary Rates incorporates the 7.50% SRV as it applies for the 2018/2019 financial year. They also incorporate the distributional yield change in the rating structure, as publicly exhibited, to reduce rates paid by rateable properties categorised as residential, but to increase rates payable by business and farmland categories, whilst staying within the limit of Council’s overall permissible income limit. This was the change adopted by Council for the 2017/2018 financial year and is proposed to be carried forward without change to the 2018/2019 financial year.

The Office of Local Government advised via Circular 18-08 on 20 March 2018 that the maximum interest rate on overdue rates and charges is to be 7.5% for 2018/2019. This is the same interest rate that applied in 2017/2018. Council has traditionally adopted the maximum permissible interest rate to apply for overdue rates and charges.

Financial Implications

The 2018/2019 budget including proposed works and services to be adopted by Council at this Extraordinary Meeting is the subject of another report. The Draft 2018/2019 Budget Estimates has been based on the special rate variation increase of 7.5% as approved by the Independent Pricing and Regulatory Tribunal (IPART) for the general rate income in its second year. Charges proposed for water, sewer, stormwater and waste services have been based on the works and maintenance requirements of those areas and also in conjunction with the legislative requirements of the LGA to establish such charges.

Statutory and Policy Compliance Implications

Council is required to make the rates and charges and set the interest rate for 2017/2018 pursuant to sections 533, 534, 535,543 and 566 of the Local Government Act 1993 (LGA). The relevant sections or sub-sections of the LGA are summarised below:

533 Date by which a rate or charge must be made

A rate or charge must be made before 1 August in the year for which the rate or charge is made or before such later date in that year as the Minister may, if the Minister is of the opinion that there are special circumstances, allow.

534 Rate or charge to be made for a specified year

Each rate or charge is to be made for a specified year, being the year in which the rate or charge is made or the next year.

535 Rate or charge to be made by resolution

A rate or charge is made by resolution of the council.

543 Each form of a rate and each charge to have its own name

Council must, when making an ordinary rate or charge, give a short separate name for each amount of the ordinary rate or charge.

566 Accrual of interest on overdue rates and charges

The rate of interest is that set by the council but must not exceed the rate specified for the time being by the Minister by notice published in the Gazette.