Long Term Financial Plan by City of Newcastle

2022/23 - 2031/32

Long-Term Financial Plan

Contents Acknowledgment of Country

Forward

Introduction

Long term financial plan objectives

Foundations of the plan

Newcastle context

Population forecasts

Strategic alignment

Service levels

Future financial opportunities and challenges

Assumptions

Sensitivity Analysis and Risk Management Impact on operating result

Risk Management

Scenario Modelling

Enquiries For information about this document contact City of Newcastle PO Box 489, Newcastle NSW 2300 newcastle.nsw.gov.au

Scenario 1 - Planned Case

Scenario 2 - Decreased works program

Scenario 3 - Optimistic works program

Performance Monitoring & Review

Conclusion

Attachment A: Financial Statements – Scenario 2 - Decreased Works Program

Attachment B: Financial Statements – Scenario 3 – Optimistic Works Program

Welcome Acknowledgment of Country We all sit on Awabakal and Worimi land ‘Niirun Yalawa Awabakal dha Worimi burrai’ City of Newcastle (CN) acknowledges its Local Government Area (LGA) sits within the Country of the Awabakal and Worimi peoples. We acknowledge that Country for Aboriginal peoples is an interconnected set of ancient relationships. We acknowledge the custodianship of the Awabakal and Worimi peoples and the care and stewardship they have performed in this place since time immemorial.

City of Newcastle

Always was, always will be Aboriginal land ‘Wunyibu wunyibu warra wunyibu wunyibu gkuuba Aboriginal burrai’

Long-Term Financial Plan 5

Forward CN’s Long-Term Financial Plan (LTFP) is a centrepiece document to underpin its long-term financial sustainability. It outlines the financial implications of delivering Newcastle 2040 and our annual and multi-year objectives within Delivering Newcastle 2040, whilst providing a framework for the prioritisation and allocation of the City’s financial resources. The LTFP is the primary guide for allocating funds on an annual basis to implement works across the City and turning our strategic plans and aspirations into reality. More than this, the LTFP is an agreement between residents and CN, showing how financial resources are raised and allocated for the delivery of public services. The LTFP is supported by, and in turn supports, the pillars of modern public governance: integrity, openness, participation, accountability, and a strategic approach to planning and achieving local objectives. Our LTFP is an essential keystone in the architecture of trust between CN, our residents, and our customers. This plan demonstrates that CN will meet all the Office of Local Government (OLG) financial performance measures. Sustainability remains a key focus for CN and the financial sustainability achieved through strong governance enables us to deliver on significant social and environmental strategies while maintaining the city’s existing infrastructure base.

Jeremy Bath

David Clarke

Chief Executive Officer

Director Governance and Chief Financial Officer

City of Newcastle

April 2022

Long-Term Financial Plan 7

Introduction

Long-term financial plan objectives

The LTFP is an integral part of CN’s strategic planning process and commitment to evidence-based decision-making. It is one component of CN’s Resourcing Strategy that underpins CN’s Newcastle 2040.

The LTFP projects a financial forecast for ten years 2022/23 to 2031/32 and includes the following:

CN is committed to achieving our financial goals and objectives. CN utilises the LTFP as a financial decision-making tool to support those goals and objectives. It strengthens our ability to identify financial and strategic opportunities and provides transparency in forecasting CN’s future financial sustainability based on the plans, strategies and initiatives endorsed by Council.

The LTFP outlines the financial implications of delivering the community’s aspirations as contained in Newcastle 2040. It assesses the funds and resources required to meet community expectations and deliver upon CN’s other strategic documents: four-year Delivery Program, Operational Plan, Workforce Development Strategic Plan (WDSP), Asset Management Strategy (AMS) and Asset Management Plan (AMP).

Cash Flow Statement

As a base, CN mandates and applies the principles of sound financial management as outlined in the Local Government Act 1993 (Section 8B):

Planning assumptions

(a) Council spending should be responsible and sustainable, aligning general revenue and expenses.

Sensitivity analysis

(b) Councils should invest in responsible and sustainable infrastructure for the benefit of the local community.

Statement of Financial Position

Financial modelling of different scenarios Methods of monitoring financial performance Through strong financial governance and budget management, and underpinned by the LTFP, CN is projecting to deliver an operating surplus in 2022/23. The LTFP is regularly reviewed and updated to ensure the estimates and assumptions remain appropriate in the context of a changing economy and as the City progresses.

(c) Councils should have effective financial and asset management, including sound policies and processes for performance management and reporting, asset maintenance and enhancement, funding decisions and risk management practices. (d) Councils should have regard to achieving intergenerational equity, including ensuring policy decisions are made after considering their financial effects on future generations and that the current generation funds the cost of its services.

The LTFP has four objectives to ensure CN’s financial sustainability. Maintain a net operating surplus

Each financial year, the budget has a net operating surplus before capital grants and contributions. This should be controlled through strong financial governance and budget management.

Renew and maintain assets within a sustainable range

The funding allocated to the annual asset renewal program will be programmed to be aligned to the equivalent level of depreciation per asset class. Funding will also be applied to asset maintenance programs to the levels required in the asset management plans.

Maintain a strong cash and liquidity position

CN guarantees its financial stability by maintaining a strong cash position and maintaining reserves in-line with internal policies. This assists with generating revenue and ensures it has sufficient assets to cover liabilities.

Financial legacy

Ensure that considered financial decision making, creates and safeguards the financial legacy of the City of Newcastle. This legacy is founded on prudent and responsible fiscal management.

City of Newcastle

The LTFP ensures that CN maintains financial sustainability into the future and effectively mitigates financial impacts and challenges as they occur, including from population growth and the changing needs across the City.

Projected income and expenditure (Income Statement)

Long-term Financial Plan 9

Foundations of the plan Newcastle context

Our place in the region

‘Metropolitan cities succeed and perform best when all tiers of government collaborate and work together with business, industry and community to deliver a shared vision for their city.’

81km of watercourses 91 bushland parcels totalling 5.1 million m2 113,048 street and park trees 42 inland cliffs totalling 3.6km 5.7km of tracks and trails 21 coastal cliff lines totalling 3.5km 14km coastline 10 beaches 65 wetlands 33 community spaces 41 cultural spaces

City of Newcastle

Newcastle is located about 160 km north of Sydney. It is Australia’s seventh-largest city and is the centre of the Greater Newcastle Region, the largest regional centre in NSW. Newcastle is the economic hub of the Hunter Region, with an international profile as a major port city and a gateway to the world for the Hunter’s rich resources. Newcastle accounts for approximately 30% of the Hunter’s developed industrial space and 80% of its office space. Newcastle is home to the University of Newcastle (UoN); the John Hunter Hospital, which is the tertiary referral hospital for Northern NSW; and a number of world-class research organisations, including the Commonwealth Scientific and Industrial Research Organisation (CSIRO) and Hunter Medical Research Institute. Newcastle is the cultural heart of the Hunter Region, supporting Newcastle Art Gallery, Newcastle Museum, and the Civic Theatre and Playhouse, and hosting a diverse calendar of cultural events. The Hunter Regional Plan 2036 and the Greater Newcastle Metropolitan Plan 2036 are the key regional development planning documents that support Newcastle. The Greater Newcastle Metropolitan Plan states that:

Long-Term Financial Plan 11

Population Forecasts Our population

Newcastle population 2021

Planning NSW Population Projections, forecast.id

171,307 Population by 2041

199,700

NSW

Greater Newcastle population 2021

Greater Newcastle

Newcastle

608,700 Population by 2041

699,200

Estimated annual population growth rate 1%

Strategic Alignment

Other Informing Strategies

CN’s Resourcing Strategy plays a critical role in delivering our strategic objectives. The four-year Delivery Program and Operational Plan are informed and supported by the financial, asset and workforce planning undertaken as part of the Resourcing Strategy. The LTFP integrates the main priorities outlined in the AMS, AMP and WDSP to ensure financial sustainability. It provides the financial framework to ensure that future funding is allocated in a way that supports service delivery and the effective management of CN’s assets and people into the future.

Various other plans, strategies and initiatives which have been endorsed by Council have been reflected in the LTFP. Several other key strategies are currently in development, but not yet endorsed, at the time of LTFP preparation. The LTFP assumes that most of the expenditure within the strategies under development will be funded from current operational allocations. Significant strategies under development include CN’s Waste Strategy and Environment Strategy, along with the Social Infrastructure Strategy. Key actions contained within these strategies will be costed and tested against priorities in the LTFP as development progresses. Once endorsed, the LTFP will be updated as part of CN’s ongoing performance monitoring.

Asset Management Strategy (AMS) and Asset Management Plan (AMP) The AMS and AMP identify the operational and strategic practices which ensure that CN manages assets across their life cycle in a financially sustainable manner. It provides CN with a sound base to understand the risk associated with managing its assets for the community’s benefit. Workforce Development Strategic Plan (WDSP)

Forecasts show that Newcastle’s population is set to grow to 199,700 by 2041 – an increase of 28,393 residents, stimulating demand for some 19,450 new dwellings. A mix of affordable and sustainable future housing is imperative to meet the diverse needs of our growing community.

City of Newcastle

The LTFP makes allowance for additional rating revenue from population growth over the next 10 years. This is consistent with the adjustment to the rate peg methodology by the Independent Pricing and Regulatory Tribunal (IPART) which now considers both movements in the cost index and population growth.

The WDSP analyses CN’s current workforce and our future workforce needs. It identifies gaps and challenges to develop the future skills and pathways ensuring sustainability of skilled workers. CN will continue to build capability as a smart, people-centric organisation and will maintain or improve service levels in a way that is sustainable and achievable within funding availability. Community expectations combined with record levels of residential development and infrastructure projects continue to place pressure on our workforce to deliver more with our existing resources.

Service Levels CN’s existing services are outlined within the four-year delivery program document ‘Delivering Newcastle 2040’. The present levels of service aim to strike a balance between the community’s desired level of service and CN’s resource capacity and strategic priorities. CN’s Planned Scenario assumes in most cases, that current service levels will be maintained throughout the period of the LTFP. LTFP projections for 2022/23 and beyond incorporate an increase in service levels for the Newcastle Art Gallery. An expanded and upgraded gallery of international standing will offer a valuable cultural tourism opportunity for Newcastle and the Hunter. The expansion is expected to create 152 jobs in construction and inject more than $1 million into annual regional revenue by attracting more than 14,000 additional local visitors and tourists each year. CN’s annual works program includes a base component of on-going infrastructure and related programs and an additional component of key city initiatives, with funding provided for both in the LTFP. CN prioritises and schedules delivery of nominated projects in line with CN planning documents and strategic objectives and consistent with the LTFP.

Long-Term Financial Plan 13

Future financial opportunities and challenges Rate pegging constraints CN’s Rates and Annual Charges revenue is constrained by the annual rate peg determinations of IPART. The rate peg comprises a Local Government Cost Index (LGCI) component, a population growth component, and other adjustments. CN faces challenges with the LGCI component being based on historical data that isn’t reflective of current circumstances. The Australian Bureau of Statistics (ABS) reports that the Consumer Price Index (CPI) rose 3.50% annually to December 2021. Yet IPART set the rate peg for 2022/23 at 0.70% (excluding population growth component), which is the lowest rate in two decades. This has a significant effect on CN’s ability to maintain services and infrastructure whilst experiencing a constraint in rates revenue. CN is unable to influence growth in rating income, without application for a special rate variation. Special variations provide an opportunity for councils to vary general income by an amount greater than the annual rate peg. IPART have recognised that, due to the delayed council elections and the determination of the 2022/23 rate peg at a lower rate than many councils had forecast, councils were not provided sufficient time to submit special variation applications. To correct for this, IPART accepted an additional special variation applications (ASV) for 2022/23.

City of Newcastle

CN successfully applied for the 2.50% ASV from IPART which is available for the 2022/23 financial year to meet our service obligations to the city.

IPART announced it will undertake a review of its rate peg methodology which will shape its rate peg determinations into the future and hopefully prevent a repeat of this year’s outcome which has required a process change to ensure councils are not financially disadvantaged.

To mitigate future risks and ensure CN can continue to deliver current service levels and infrastructure spending, CN remains committed to identifying opportunities for future income streams, thus reducing the reliance on rating income. Financial Assistance Grant CN receives approximately $12M each year under the Financial Assistance Grant (FAG) program. This is a general purpose grant paid to all local councils by the Commonwealth under the provisions of the Local Government (Financial Assistance) Act 1995. The funds comprise an unconditional grant, and a smaller local roads component. There is an ongoing risk that the funding methodology applied to the allocation of these grants to local councils could be altered and that CN receives a reduction in grant allocations. If this were the case, CN would need to assess its response to any proposed change. It should be noted that currently FAGs are not indexed and so in real terms the value of these grants has reduced during the past decade. Other Grants CN continues to be hindered in its ability to apply for certain State and Federal Government grants. A 2020 report by the Hunter Research Foundation Centre found that Newcastle is ineligible for almost $6B in annual funding on the basis of the NSW and Federal Government’s alternating view of Newcastle as a regional or metropolitan area depending on grant terms and conditions. The NSW Government currently classifies Newcastle as ‘metropolitan’ in many funding pools open to the CN, and for many large regional grants. The classification effectively excludes CN from being eligible to submit applications to significant regional funding pools for key infrastructure.

Cash and Investments and low interest rates CN achieves positive cashflow by prudent financial management. This is achieved in line with investment policy guidelines. Interest rates have been at historic lows posing challenges to Local Government who hold strong cash reserves in an environment where only modest investment returns are available. Opportunities exist for CN to balance its current risk appetite against potential future higher returns from cash and investments by diversifying the portfolio into higher cash generating assets. Cost shifting The range of services delivered by councils is growing and changing. Local government is no longer confined to the essential services of road infrastructure and waste. Councils are also now actively engaged in the policy areas of liveable communities, circular economy, smart cities, and pandemic recovery. This expanding service delivery is against a backdrop of finite resources. Improved dialogue is required between Commonwealth and State Governments to address the growth in cost shifting and provide more optimal outcomes for the communities they serve. Productivity and efficiency focus Opportunities exist for CN to explore investment in technology, continuing improvement in operational processes, workforce productivity, discretionary cost containment and effective balance sheet management. COVID-19 pandemic The COVID-19 pandemic continues to present challenges for the city’s economy, including the health and wellbeing of the community and the daily operations of CN. The uncertainty surrounding the protracted impact of COVID-19 on the operations and revenue streams of CN adds complexity to the projections in the LTFP. Alongside the pandemic challenges, new opportunities for the city have emerged. There is the potential to capitalise on the acceleration of remote working practices and subsequent technology shifts which has seen the movement of people away from capital cities and into the regions; with Newcastle well-placed to attract internal migration. Industry transition across the region The mining sector continues to play a significant role in our local economy – particularly coal, which is extracted in the Upper Hunter region and exported through the Port of Newcastle. The significance of coal mining to the local economy highlights Newcastle’s exposure to volatility and Long-term downturns in the industry. There is opportunity for economic restructuring towards ecological and social sustainability through creation of new green jobs, as well as provision of support for people and communities who might be disadvantaged during the change process.

Long-term Financial Plan 15

Assumptions Forecasting over a ten-year time frame is challenging. The LTFP makes key assumptions and is informed by externally sourced indices. Forecasts and financial projections may vary in the future, particularly in the latter years of the planning horizon. There are also key income and expenditure projections which are outside of CN’s control such as State Government waste levies, interest rates and rate pegs.

The LTFP uses CPI estimates as a measure of inflation. CPI has been estimated at between 2.20% and 2.30% for the years beyond the 2022/23 budget. Where more accurate forecasts are available, CN has adopted these rates as highlighted below. Income Statement – Revenue Rates and annual charges

The proposed capital works program within the LTFP for the 2022/23 budget is $133M, comprising a base works program of $83M and key city initiatives of $50M. This is higher than historical averages but reflects the ability of CN to fund a small number of high value, capital-focused projects in 2022/23.

Rates and annual charges account for a large portion of CN’s income, although significantly less than most benchmarked councils. CN relies on the annual rate pegging increases set by IPART. The rate peg is the maximum percentage amount by which NSW councils may increase their general income for the year. IPART has set the rate peg for CN for 2022/23 at 1.20%, which includes 0.50% in recognition of the significant population growth the city is experiencing. CN successfully applied for the Additional Special Variation (ASV) to 2.50%, which the State Government has introduced to counter errors in the methodology IPART used to set the 2022/23 financial year rate cap.

These projects include a $40M expansion of the Newcastle Art Gallery; a symbol of excellence and source of pride as a major cultural asset and home to a nationally significant collection that includes more than 7,000 works valued at $115M. Construction will also commence in 2022/23 of a 50,000 tonne Organics Processing Facility at the Summerhill Waste Management Centre, which will divert 1 million tonnes of food and garden organics from landfill, provide new revenue streams from the sale of compostable materials and negating existing costs from the State Government’s waste levy.

The rate peg is estimated to match CPI across the remainder of the ten-year planning horizon.

The LTFP assumes that a $100M capital works program, adjusted annually for CPI, will be delivered for the remainder of the ten-year period. User charges and fees

Statutory fees are those where the fee is set by the State Government. CN planning fees, which have their price increases determined by legislation, have not been indexed by CPI. The rate increase for all other user charges and fees is forecast at CPI plus 1.00% for the duration of the LTFP.

Interest and investment revenue

Interest and investment revenue is directly related to the value of CN’s investment portfolio and cashflow movements.

City of Newcastle

Bank Bill Swap Rate (BBSW) estimates of between 0.23% and 2.05% have been utilised in the consideration of interest projections.

Other revenues

Other revenues increase annually by CPI for the duration of the LTFP.

Grants and contributions provided for operating purposes

It has been assumed that CN will continue to receive grants and contributions over the duration of the LTFP consistent with current levels. CPI has been applied annually.

Grants and contributions provided for capital purposes

Grants and contributions provided for capital purposes are estimated to increase annually by CPI. Developer Contributions are collected by CN from new developments. They contribute towards funding the costs of additional infrastructure required from the neighbouring impact of new development. These contributions include cash, land and other assets collected through CN’s Developer Contribution Plans and/or Planning Agreements. Funds collected are restricted and are allocated to projects in line with the relevant Development Contribution Plan or Agreements.

Other income

Other income increases annually by CPI for the duration of the LTFP.

Long-term Financial Plan 17

Income Statement – Expenditure Employee benefits and oncosts

Borrowing costs

Employee costs assumptions rely on an increase of 3.00% through to 2025/26. This includes the progressive 0.50% per annum increases in the legislated Superannuation Guarantee Contribution (SGC) that ceases in 2025/26 when superannuation has reached 12%.

Payables

Annual increases in payables aligns with CPI for the duration of the LTFP

Contract liabilities

Annual increases align with CPI for the duration of the LTFP

Lease liabilities

Represents the obligation to make lease payments and is measured at the present value of future lease payments.

Annual increases of 2.50% are estimated for the remainder of the LTFP horizon after 2025/26.

Borrowings

Balance from loan borrowing repayment schedules.

Employee benefit provisions

Repayment of interest and principal of existing loans are known from current repayment schedules.

Employee provisions to increase at the same rate as employee benefits and on-costs.

Provisions

Lease borrowing costs have been included through lease amortisation schedules.

Asset remediation/restoration changes based on the Astra St and Summerhill Waste Management Centre models.

Equity

Retained earnings from Income Statement

Materials and services

Costs required to deliver CN’s services are estimated to increase annually by CPI. Costs for works program expenses are calculated based on the operational expenditure portion of the expected works program for new and renewed assets.

Depreciation and amortisation

Depreciation expense has been calculated based on expected acquisitions and the expected useful lives of existing assets. Lease amortisation has been calculated through the wind down of the calculated right of use asset from the lease schedules.

Other expenses

Statement of Financial Position – Liabilities and Equity

Revaluation reserves maintained at current levels.

Statement of Cash Flows – Operating Activities Receipts

From Income Statement and movements in Statement of Financial Position

Payments

From Income Statement and movements in Statement of Financial Position

Other expenses to increase annually by CPI. The Waste Environment Protection Authority (EPA) Levy is estimated to increase annually by CPI.

Statement of Financial Position – Assets

Statement of Cash Flows – Investing Activities Receipts

From estimated inflows from turnover of investment securities

Payments

From turnover and purchase of investment assets and capital additions derived from works program

Cash and cash equivalents

Estimated to be maintained at levels which reflect 1/12th of annual operating expenditure.

Investments

Balance directly correlates with changes in the Statement of Cash Flows.

Receivables

Annual increases align with CPI for the duration of the LTFP.

Receipts

Amount expected to inflow from new borrowings

Infrastructure, property, plant and equipment

Additions – from expected works program

Payments

Expected outflows based on repayment schedules of borrowings and lease liabilities

Disposals – from expected renewals program

Statement of Cash Flows – Financing Activities

City of Newcastle

Depreciation – based on expected acquisitions and the expected useful lives on existing assets

Right of use assets

Based on the initial present value of the future cashflows of leased assets plus any direct costs incurred less any lease incentives received.

Investment property

Investment property is estimated to increase at 5.00% per annum.

Other

Includes inventories which are expected to follow the same trends as materials, contracts and other costs for services. Maintained at current levels

Non-current assets classified as held for sale

Maintained at current levels

Long-Term Financial Plan 19

Sensitivity Analysis and Risk Management Variations to assumptions applied in the LTFP may occur during the life of the plan and these variations could have a significant impact on the results of the financial modelling. The LTFP relies on a series of assumptions. The data underpinning these assumptions reflect the best available data at the time the LTFP was developed.

Impact on operating result The table below indicates the impact on the forecast net operating result for 2022/23 of a one percent and ten percent movement in the key assumptions underpinning the Planned Case scenario. These impacts will have a cumulative effect on the model over the horizon of the plan.

Newcastle City Council 10 Year Financial Plan for the Years ending June 2032 Sensitivity Analysis Favourable/(Unfavourable) impact to Operating Result

2022/23 Assumption

 10%

 -10%

$’000

Rate peg

2.50%

2,083

(2,083)

20,831

N/A

2.40%

(781)

866

(7,808)

N/A

BBSW

0.23%

3,210

N/A

31,761

N/A

Wages & SGC

2.50%

(1,253)

1,253

(12,527)

N/A

OPEX

29.17%

(1,140)

1,140

(11,401)

11,401

Rates and annual charges

Favourable/(Unfavourable) impact to income or expenses

'000

 1%



-1%

 10%

 -10%

208,307

2,083

(2,083)

20,831

(20,831)

User Fees & Charges

102,132

1,021

(1,021)

10,213

(10,213)

Grants & Contributions

33,374

334

(334)

3,337

(3,337)

Employee benefits and on-costs Materials and services City of Newcastle

 -1%

$’000

CPI

2022/23

 1%

Waste Levy

125,271

1,253

(1,253)

12,527

(12,527)

104,359

1,044

(1,044)

10,436

(10,436)

37,332

373

(373)

3,733

(3,733)

Long-Term Financial Plan 21

Operating Income - 2022/23 Budget

Rates & annual charges

$208.3M 54.7% of Operating Income

Operating Expenses - 2022/23 Budget

Grants & contributions provided for operating purposes

Employee benefits & on-costs

Depreciation & amortisation

$125.2M

$63.4M

36.2% of Operating Income

18.3% of Operating Income

Grants & contributions provided for capital purposes

Borrowing costs

Other expenses

$3.7M

$44.6M

$33.7M

1.1% of Operating Income

12.9% of Operating Income

Other income

Materials & services

$4M

$104.3M

Net losses from the disposal of assets

1.1% of Operating Income

30.2% of Operating Income

$16.6M 4.4% of Operating Income

User charges & fees

$102.1M 26.8% of Operating Income

8.9% of Operating Income

Interest & investment revenue

$5.4M 1.4% of Operating Income

$4.1M 1.2% of Operating Income

Other revenues

$10.3M City of Newcastle

2.7% of Operating Income

Long-Term Financial Plan 23

Risk Management During the development of the LTFP consideration is given to key risks likely to impact financial performance. These can be divided into three key groups: External Risks

Internal Risks

Continuing financial and economic impacts of the COVID-19 pandemic

Changes to fees and charges and other revenue sources

Interest rate fluctuations

Organisational service reviews and restructures

Inflation and movements in CPI

Infrastructure asset management strategies and practices

Changes to levies and their conditions (i.e. EPA Levy) Changes in rate peg methodology and determinations

Consumer Price Index (CPI)

CPI estimates have been utilised as the measure of inflation. CPI has been applied to income and expenditure projections where growth in the line items correlates closely with this index. Significant variation in the actual CPI as compared to estimates will impact the results of the forecast in the plan.

Building Cost Index

The Building Cost Index has historically grown at a faster pace than CPI and this divergence has been accelerated in 2021/22 through government stimulus in reaction to COVID-19 restrictions and severe weather events in recent years. Significant variance between this index and CPI in future years will erode CN’s buying power and limit the level of works that can be delivered.

Operational expenditure (OPEX) within the works program

Beyond 2022/23, the LTFP assumes 33% of CN’s annual works program is operational expenditure (OPEX) for the years of the Delivery Program. The OPEX percentage increases to 37% for the remainder of the plan. The level of operational expenditure per project can range from 0% to 100% and the average level varies between programs depending upon project scheduling.

Community Community needs and expectations Other key strategies

The following are identified as the areas at the highest risk of impacting the future financial performance in the LTFP:

Significant revenue – Rates and annual charges

Over the past 10 years the rate peg has varied between 1.20% and 3.60%. It does not always follow CPI. If the rate peg issued by IPART does not keep pace with CPI then CN’s financial position will deteriorate if service levels remain the same.

Estimates provided for works programs in 2022/23 and 2023/24 have more accuracy than those for later years with some costing based on refined scope of works, market quotations and engineering estimates. However, programs are also continuously subject to change, depending on new priorities, emerging works, emergency works, priorities of the elected council and availability of new funding sources like grants.

City of Newcastle

The LTFP includes CN’s successful application for the Additional Special Variation (ASV) for 2022/23 at 2.50%. As identified in the sensitivity analysis a 1.00% decrease in the rate peg has a significant impact on the net operating result of CN.

Significant revenue Summerhill Waste Management Centre (SWMC)

CN’s largest revenue centre is SWMC, providing 50% of CN’s user fees and charges revenue. Strategic and prudent decision-making regarding capital investment and contract management will be vital to maintaining its profitability.

Significant revenue - interest and investment revenue

The calculation of interest and investment revenue is derived from CN’s investment portfolio and the return on investment that can be obtained.

The amount that CN increases the employee rate of pay by each year is controlled by the Local Government (State) Award 2020 (LGSA). CN must also factor in the impact of legislated Superannuation Guarantee Contribution (SGC) increases which are currently being phased upwards to 12%. Any pay increases exceeding 2.50%, or SGC increases beyond the known 0.50% progressive annual increases through to 2025/26, would materially impact the operating surplus.

Workforce management, staffing levels and salary reviews

Natural disasters Changes in State and Government positions

Significant expenditure employee costs

These changes can materially impact the OPEX percentage and consequently the financial performance reflected in the LTFP. Works Program – Project Prioritisation

The LTFP is predicated on a works program prioritised to CN objectives and the AMS and AMP. Projects altering the project schedule can result in diminishing asset conditions, higher depreciation expense and increased loss on disposal of assets.

CN is limited to the investment options within its Investment and Borrowings Policy which is directed by Local Government legislation. Interest rates, as determined by Reserve Bank policy and financial market conditions, will directly impact the returns earned by CN’s investment portfolio and decreases in interest rates are likely to have a material impact on the operating surplus.

Long-Term Financial Plan 25

Scenario Modelling Scenario 1 – Planned Case

In developing the LTFP CN has considered a range of options and settled on the following three scenarios: Scenario Scenario 1 - Planned Case

Description Current service levels would be maintained. As per assumptions outlined in this document The proposed capital works budget within the LTFP for the 2022/23 budget is $133M. $100M capital works program (adjusted annually for CPI) will be delivered for the remainder of the ten-year period.

Total Capital Works Program Spend

2022/23: $133M Works Program

2022/23 budget $133M

2023/24 and ongoing: $100M Works Program adjusted annually for CPI

2023/24 - ongoing $100M (adjusted annually for CPI)

Income Statement

This scenario includes the optimum expenditure on CN’s infrastructure assets consistent with the projections in CN’s AMS and AMP.

Income Statement

Net cashflows would remain positive for the duration of the LTFP. The cash and cash equivalents balance would remain strong, increasing year on year to a maximum of $694M. Scenario 2 - Decreased works program

Current service levels would decrease. Based on 2022/23 budget with planning assumptions outlined in this document applied to outer years’ revenue and expenditure Reduced capital works program at $85M (adjusted annually for CPI) will be delivered for the remainder of the ten-year period. Net cashflows would remain positive for the duration of the LTFP. The cash and cash equivalents balance would remain strong, increasing year on year to a maximum of $861M at the end of 2031/32.

Income Statement

2022/23 budget $133M

Current service levels would be maintained. Based on 2022/23 budget with planning assumptions outlined in this document applied to outer years’ revenue and expenditure. Enhanced capital works program at $115M with additional funds to be prioritised based on expectations contained in Newcastle 2040, AMS and AMP.

City of Newcastle

Operating losses are predicted across several years of the LTFP without a corresponding reduction in service-related expenditure. Net cashflows would be increasing at a lower rate to account for the increased spend on renewal work required to maintain our infrastructure assets at the agreed level of service. Despite this, the cash and cash equivalents balance continues to increase to $527M at the end of 2031/32.

4RV02 4RV03 4RV04 4RV05 4RV06

2023/24 - ongoing $85M (adjusted annually for CPI)

4RV13

6EX01 6EX02 6EX03 6EX04 6EX06

The net impact of this scenario in 2031/32 is a surplus of $36M, compared to the surplus in the Planned Case of $22M. Scenario 3 - Optimistic works program

4RV01

6EX09

2022/23 budget $133M

2023/24 - ongoing $115M (adjusted annually for CPI)

1CA02 1CA03 1CA04 1CA05

1NCA01 1NCA02 1NCA03 1NCA10

1NCA06 1NCA04 1NCA05 1NCA07

2022/23

2023/24

2024/25

2025/26

Year 1 2022/23 $ '000

Year 2 2023/24 $ '000

Year 3 2024/25 $ '000

Year 4 2025/26 $ '000

2026/27 2027/28 Projection Year 5 Year 6 2026/27 2027/28 $ '000 $ '000

2028/29

2029/30

2030/31

2031/32

Year 7 2028/29 $ '000

Year 8 2029/30 $ '000

Year 9 2030/31 $ '000

Year 10 2031/32 $ '000

Income from Continuing Operations Rates and annual charges User charges and fees

198,945 94,322

208,307 102,132

212,890 112,337

217,786 118,519

223,230 122,424

228,365 126,468

233,617 130,647

238,991 134,963

244,965 139,422

250,599 144,028

256,363 148,786

Interest and investment revenue Other revenues Grants and contributions provided for operating purposes Grants and contributions provided for capital purposes Other income Total Income from Continuing Operations

5,843 11,432 16,317 13,745 4,072 344,676

5,391 10,356 16,687 33,762 4,007 380,642

6,736 10,597 18,054 34,504 4,800 399,918

8,605 10,995 18,534 35,298 5,760 415,497

10,203 11,265 18,961 36,110 5,892 428,085

11,854 11,524 19,397 36,941 6,028 440,577

13,409 11,789 19,843 37,790 6,167 453,262

14,896 12,060 20,299 38,659 6,308 466,176

16,450 12,337 20,766 39,548 6,454 479,942

17,726 12,621 21,244 40,458 6,602 493,278

19,165 12,912 21,732 41,388 6,754 507,100

117,162 3,556 102,646 58,428 43,601 4,328 329,721 14,955

125,271 3,773 104,359 63,407 44,650 4,149 345,609 35,033

129,037 3,913 107,927 67,454 49,941 6,940 365,212 34,706

132,970 3,591 112,819 69,313 51,109 7,100 376,902 38,595

136,934 3,261 114,001 71,206 50,285 7,263 382,950 45,135

140,810 2,930 120,840 73,293 51,441 7,430 396,744 43,833

144,322 2,584 123,283 74,668 52,624 7,601 405,082 48,180

147,921 2,256 127,480 76,261 53,834 7,776 415,528 50,648

151,610 1,916 128,984 78,350 55,073 8,637 424,570 55,372

155,392 1,601 131,953 80,062 56,339 8,138 433,485 59,793

159,267 1,330 134,990 82,201 57,635 8,325 443,748 63,352

1,210

1,271

202

3,297

9,025

6,892

10,390

11,989

15,824

19,335

21,964

Expenses from Continuing Operations Employee benefits and on-costs Borrowing costs Materials and services Depreciation and amortisation Other expenses Net losses from the disposal of assets Total Expenses from Continuing Operations Operating result from continuing operations Net operating result for the year before grants and contributions provided for capital purposes

Statement of Financial Position

1CA01

2021/22 Current Year Current 2021/22 $ '000

Current Year Current 2021/22 $ '000

Year 1 2022/23 $ '000

Year 2 2023/24 $ '000

Year 3 2024/25 $ '000

Year 4 2025/26 $ '000

Projection Year 5 Year 6 2026/27 2027/28 $ '000 $ '000

Year 7 2028/29 $ '000

27,477 122,300 29,496 1,152 8,655 189,080

28,801 122,300 30,203 1,196 8,989 191,489

30,434 122,300 30,868 1,222 9,187 194,011

31,408 122,300 31,578 1,250 9,398 195,934

31,912 122,300 32,304 1,279 9,615 197,410

33,062 122,300 33,047 1,309 9,835 199,553

33,757 122,300 33,807 1,339 10,061 201,264

34,627 122,300 34,585 1,369 10,293 203,174

223,074 1,657 1,588,433 32,822 731 13,990 4,935 88

219,033 1,697 1,620,184 32,936 759 14,690 4,935 90

234,797 1,734 1,625,363 47,640 776 15,424 4,935 92

255,328 1,774 1,630,070 43,049 794 16,195 4,935 94

288,878 1,815 1,634,301 38,609 812 17,005 4,935 96

320,376 1,856 1,638,053 34,184 831 17,855 4,935 98

356,634 1,900 1,641,715 30,138 850 18,748 4,935 100

395,385 1,943 1,645,468 26,169 869 19,685 4,935 103

Year 8 2029/30 $ '000 35,381 122,300 35,380 1,401 10,529 204,991

Year 9 2030/31 $ '000 36,124 122,300 36,194 1,433 10,772 206,823

Year 10 2031/32 $ '000 36,979 122,300 37,027 1,466 11,019 208,791

436,838 483,687 534,735 1,988 2,033 2,080 1,650,995 1,656,827 1,662,239 22,200 18,231 14,262 889 910 931 Long-Term Financial 20,670 21,703 22,788 4,935 4,935 4,935 105 108 110

Plan 27

4RV04 4RV05 4RV06 4RV13

6EX01 6EX02 6EX03 6EX04 6EX06 6EX09

Other revenues Grants and contributions provided for operating purposes Grants and contributions provided for capital purposes Other income Total Income from Continuing Operations

11,432 16,317

10,356 16,687

10,597 18,054

10,995 18,534

11,265 18,961

11,524 19,397

11,789 19,843

12,060 20,299

12,337 20,766

12,621 21,244

12,912 21,732

13,745 4,072 344,676

33,762 4,007 380,642

34,504 4,800 399,918

35,298 5,760 415,497

36,110 5,892 428,085

36,941 6,028 440,577

37,790 6,167 453,262

38,659 6,308 466,176

39,548 6,454 479,942

40,458 6,602 493,278

41,388 6,754 507,100

117,162

125,271

129,037

132,970

136,934

140,810

144,322

147,921

151,610

155,392

159,267

Borrowing costs Materials and services Depreciation and amortisation

3,556 102,646 58,428

3,773 104,359 63,407

3,913 107,927 67,454

3,591 112,819 69,313

3,261 114,001 71,206

2,930 120,840 73,293

2,584 123,283 74,668

2,256 127,480 76,261

1,916 128,984 78,350

1,601 131,953 80,062

1,330 134,990 82,201

43,601 4,328

44,650 4,149

49,941 6,940

51,109 7,100

50,285 7,263

51,441 7,430

52,624 7,601

53,834 7,776

55,073 8,637

56,339 8,138

57,635 8,325

329,721 14,955

345,609 35,033

365,212 34,706

376,902 38,595

382,950 45,135

396,744 43,833

405,082 48,180

415,528 50,648

424,570 55,372

433,485 59,793

443,748 63,352

1,210

1,271

202

3,297

9,025

6,892

10,390

11,989

15,824

19,335

21,964

Total Expenses from Continuing Operations Operating result from continuing operations Net operating result for the year before grants and contributions provided for capital purposes

1CA01 1CA02 1CA03 1CA04 1CA05

1NCA01 1NCA02 1NCA03 1NCA10 1NCA06 1NCA04 1NCA05 1NCA07

2CL01 2CL04 2CL05 2CL02 2CL06 2CL03

2NCL01 2NCL04 2NCL05 2NCL02 2NCL06 2NCL03

3EQ01 3EQ02

ASSETS Current assets Cash and cash equivalents

Current Year Current 2021/22 $ '000

Year 1 2022/23 $ '000

Year 2 2023/24 $ '000

Year 3 2024/25 $ '000

Year 4 2025/26 $ '000

Projection Year 5 Year 6 2026/27 2027/28 $ '000 $ '000

Year 7 2028/29 $ '000

Year 8 2029/30 $ '000

Year 9 2030/31 $ '000

28,801

30,434

31,408

31,912

33,062

33,757

34,627

35,381

36,124

36,979

122,300 29,496 1,152 8,655 189,080

122,300 30,203 1,196 8,989 191,489

122,300 30,868 1,222 9,187 194,011

122,300 31,578 1,250 9,398 195,934

122,300 32,304 1,279 9,615 197,410

122,300 33,047 1,309 9,835 199,553

122,300 33,807 1,339 10,061 201,264

122,300 34,585 1,369 10,293 203,174

122,300 35,380 1,401 10,529 204,991

122,300 36,194 1,433 10,772 206,823

122,300 37,027 1,466 11,019 208,791

223,074 1,657 1,588,433 32,822 731 13,990 4,935 88 1,865,730 2,054,810

219,033 1,697 1,620,184 32,936 759 14,690 4,935 90 1,894,324 2,085,813

234,797 1,734 1,625,363 47,640 776 15,424 4,935 92 1,930,761 2,124,772

255,328 1,774 1,630,070 43,049 794 16,195 4,935 94 1,952,239 2,148,173

288,878 1,815 1,634,301 38,609 812 17,005 4,935 96 1,986,451 2,183,861

320,376 1,856 1,638,053 34,184 831 17,855 4,935 98 2,018,188 2,217,741

356,634 1,900 1,641,715 30,138 850 18,748 4,935 100 2,055,020 2,256,284

395,385 1,943 1,645,468 26,169 869 19,685 4,935 103 2,094,557 2,297,731

436,838 1,988 1,650,995 22,200 889 20,670 4,935 105 2,138,620 2,343,611

483,687 2,033 1,656,827 18,231 910 21,703 4,935 108 2,188,434 2,395,257

534,735 2,080 1,662,239 14,262 931 22,788 4,935 110 2,242,080 2,450,871

LIABILITIES Current liabilities Payables Contract liabilities Lease liabilities Borrowings Employee benefit provisions Provisions Total current liabilities

41,571 10,367 3,017 6,905 36,873 19,909 118,642

43,080 10,616 3,114 5,727 37,795 7,383 107,715

44,045 10,849 4,103 5,910 38,929 7,384 111,220

45,074 11,099 4,047 6,000 40,096 1,565 107,881

46,132 11,354 4,138 6,198 41,299 1,568 110,689

47,198 11,615 3,828 6,193 42,332 1,571 112,737

48,289 11,883 3,844 5,740 43,390 1,574 114,720

49,404 12,156 3,946 5,938 44,475 1,577 117,496

50,552 12,435 4,052 4,482 45,587 1,581 118,689

51,720 12,721 4,163 3,964 46,726 1,584 120,878

52,915 13,014 2,704 1,482 47,895 1,587 119,597

Non-current liabilities Payables Contract liabilities Lease liabilities Borrowings Employee benefit provisions Provisions Total non-current liabilities TOTAL LIABILITIES Net assets

2,921 766 32,851 58,476 999 66,824 162,837 281,479 1,773,331

2,921 784 32,490 75,349 1,024 57,166 169,734 277,449 1,808,364

2,921 802 46,788 69,438 1,054 49,480 170,483 281,703 1,843,069

2,921 821 42,741 63,438 1,086 47,621 158,628 266,509 1,881,664

2,921 839 38,604 57,240 1,119 45,650 146,373 257,062 1,926,799

2,921 859 34,775 51,048 1,147 43,622 134,372 247,109 1,970,632

2,921 878 30,931 45,308 1,175 41,540 122,753 237,473 2,018,811

2,921 899 26,985 39,370 1,205 39,397 110,777 228,273 2,069,458

2,921 919 22,933 34,888 1,235 37,196 100,092 218,781 2,124,830

2,921 940 18,770 30,924 1,266 34,935 89,756 210,634 2,184,623

2,921 962 16,066 29,442 1,297 32,611 83,299 202,896 2,247,975

EQUITY Accumulated surplus Revaluation reserves Total equity

1,502,538 270,793 1,773,331

1,537,571 270,793 1,808,364

1,572,276 270,793 1,843,069

1,610,871 270,793 1,881,664

1,656,006 270,793 1,926,799

1,699,839 270,793 1,970,632

1,748,018 270,793 2,018,811

1,798,665 270,793 2,069,458

1,854,037 270,793 2,124,830

1,913,830 270,793 2,184,623

1,977,182 270,793 2,247,975

Non-current assets Investments Receivables Infrastructure, property, plant and equipment Right of use asset Investments accounted for using the equity method Investment property Intangible assets Other Total non-current assets TOTAL ASSETS

2CL03

2NCL04 2NCL05 2NCL02 2NCL06 2NCL03

3EQ01

Year 10 2031/32 $ '000

27,477

Investments Receivables Inventories Other Total current assets

Employee benefit provisions Provisions

3EQ02

Statement of Financial Position

Borrowings

2CL06

2NCL01

Expenses from Continuing Operations Employee benefits and on-costs

Other expenses Net losses from the disposal of assets

2CL02

6,905

5,727

5,910

6,000

6,198

6,193

5,740

5,938

4,482

3,964

1,482

36,873 19,909

37,795 7,383

38,929 7,384

40,096 1,565

41,299 1,568

42,332 1,571

43,390 1,574

44,475 1,577

45,587 1,581

46,726 1,584

47,895 1,587

Total current liabilities

118,642

107,715

111,220

107,881

110,689

112,737

114,720

117,496

118,689

120,878

119,597

Non-current liabilities Payables Contract liabilities

2,921 766

2,921 784

2,921 802

2,921 821

2,921 839

2,921 859

2,921 878

2,921 899

2,921 919

2,921 940

2,921 962

Lease liabilities Borrowings Employee benefit provisions

32,851 58,476 999

32,490 75,349 1,024

46,788 69,438 1,054

42,741 63,438 1,086

38,604 57,240 1,119

34,775 51,048 1,147

30,931 45,308 1,175

26,985 39,370 1,205

22,933 34,888 1,235

18,770 30,924 1,266

16,066 29,442 1,297

Provisions Total non-current liabilities TOTAL LIABILITIES Net assets

66,824 162,837 281,479 1,773,331

57,166 169,734 277,449 1,808,364

49,480 170,483 281,703 1,843,069

47,621 158,628 266,509 1,881,664

45,650 146,373 257,062 1,926,799

43,622 134,372 247,109 1,970,632

41,540 122,753 237,473 2,018,811

39,397 110,777 228,273 2,069,458

37,196 100,092 218,781 2,124,830

34,935 89,756 210,634 2,184,623

32,611 83,299 202,896 2,247,975

EQUITY Accumulated surplus Revaluation reserves Total equity

1,502,538 270,793 1,773,331

1,537,571 270,793 1,808,364

1,572,276 270,793 1,843,069

1,610,871 270,793 1,881,664

1,656,006 270,793 1,926,799

1,699,839 270,793 1,970,632

1,748,018 270,793 2,018,811

1,798,665 270,793 2,069,458

1,854,037 270,793 2,124,830

1,913,830 270,793 2,184,623

1,977,182 270,793 2,247,975

Current Year Current 2021/22 $ '000

Year 1 2022/23 $ '000

Year 2 2023/24 $ '000

Year 3 2024/25 $ '000

Year 4 2025/26 $ '000

Projection Year 5 Year 6 2026/27 2027/28 $ '000 $ '000

Year 7 2028/29 $ '000

Year 8 2029/30 $ '000

Year 9 2030/31 $ '000

Year 10 2031/32 $ '000

Statement of Cashflows

SCFO1

SCFO2

Cashflows from operating activities Receipts: Rates and annual charges User charges and fees Investment and interest revenue received Grants and contributions Other Payments: Employee benefits and on-costs Materials and contracts Borrowing costs Other Net cash provided (or used in) operating activities Cashflows from investing activities Receipts: Sale of investment securities Non-current assets classified as ‘held for sale’ Payments: Purchase of investment securities Purchase of investment property Purchase of infrastructure, property, plant and equipment Net cash provided (or used in) investing activities

198,782 91,237 6,282 30,054 14,345

208,184 101,738 5,370 50,451 14,188

212,772 111,966 6,716 52,560 15,243

217,661 118,123 8,584 53,834 16,590

223,108 122,019 10,180 55,073 16,989

228,234 126,055 11,831 56,339 17,379

233,484 130,223 13,386 57,635 17,779

238,854 134,530 14,872 58,961 18,188

244,831 138,979 16,426 60,317 18,606

250,456 143,575 17,701 61,704 19,034

256,217 148,322 19,140 63,123 19,472

(116,260) (108,383) (3,556) (43,774) 68,727

(124,271) (125,075) (3,773) (44,875) 81,972

(127,807) (114,649) (3,913) (50,072) 102,849

(131,703) (119,465) (3,591) (51,250) 108,818

(135,628) (114,915) (3,261) (50,430) 123,171

(139,690) (121,786) (2,929) (51,588) 123,882

(143,174) (124,261) (2,584) (52,774) 129,752

(146,744) (128,490) (2,256) (53,990) 133,964

(150,404) (130,028) (1,916) (55,231) 141,620

(154,155) (133,031) (1,601) (56,501) 147,223

(157,999) (136,103)

127,835 9,500

127,835 –

(135,861) (71,812) (70,338)

(123,793) (700) (94,741) (91,399)

(143,599) (734) (74,940) (91,438)

(148,365) (771) (76,530) (97,831)

(161,385) (810) (78,260) (112,620)

(159,333) (850) (80,049) (112,397)

(164,092) (893) (81,886) (119,036)

(166,585) (937) (83,822) (123,509)

(169,288) (984) (88,546) (130,983)

(174,683) (1,033) (90,065) (137,946)

(178,883) (1,085) (91,969) (144,102)

(1,330) (57,801) 153,083

Cashflows from financing activities Receipts: Proceeds from borrowings and advances Payments: Repayment of borrowings and advances Repayment of lease liabilities Net cashflow provided (used in) financing activities

8,750

22,600

(4,742) (3,874) 134

(6,905) (4,944) 10,751

(5,728) (4,050) (9,778)

Net increase/(decrease) in cash and cash equivalents

(1,477)

1,324

1,633

974

504

1,150

695

871

753

743

855

Plus: cash and cash equivalents – beginning of year

28,954

27,477

28,801

30,434

31,408

31,912

33,062

33,757

34,627

35,381

36,124

Cash and cash equivalents – end of the year

27,477

28,801

30,434

31,408

31,912

33,062

33,757

34,628

35,380

36,124

36,979

plus: Investments on hand – end of year Total cash, cash equivalents and investments

345,374 372,851

341,332 370,133

357,097 387,531

377,627 409,035

411,178 443,090

442,676 475,738

478,934 512,691

517,684 552,312

559,138 594,518

605,987 642,111

657,035 694,014

–

– (5,910) (4,103) (10,013)

– (6,000) (4,047) (10,047)

– (6,197) (4,138) (10,335)

– (6,193) (3,828) (10,021)

– (5,740) (3,844) (9,584)

– (5,938) (3,946) (9,884)

– (4,482) (4,052) (8,534)

– (3,963) (4,163) (8,126)

Scenario 2 – Decreased Works Program Refer to Appendix A

City of Newcastle

Statement of Cashflows

SCFO1

SCFO2

Current Year Current 2021/22 $ '000

Year 1 2022/23 $ '000

Year 2 2023/24 $ '000

Year 3 2024/25 $ '000

Year 4 2025/26 $ '000

Projection Year 5 Year 6 2026/27 2027/28 $ '000 $ '000

Year 7 2028/29 $ '000

Year 8 2029/30 $ '000

Year 9 2030/31 $ '000

Year 10 2031/32 $ '000

198,782 91,237 6,282 30,054 14,345

208,184 101,738 5,370 50,451 14,188

212,772 111,966 6,716 52,560 15,243

217,661 118,123 8,584 53,834 16,590

223,108 122,019 10,180 55,073 16,989

228,234 126,055 11,831 56,339 17,379

233,484 130,223 13,386 57,635 17,779

238,854 134,530 14,872 58,961 18,188

244,831 138,979 16,426 60,317 18,606

250,456 143,575 17,701 61,704 19,034

256,217 148,322 19,140 63,123 19,472

(116,260) (108,383) (3,556) (43,774) 68,727

(124,271) (125,075) (3,773) (44,875) 81,972

(127,807) (114,649) (3,913) (50,072) 102,849

(131,703) (119,465) (3,591) (51,250) 108,818

(135,628) (114,915) (3,261) (50,430) 123,171

(139,690) (121,786) (2,929) (51,588) 123,882

(143,174) (124,261) (2,584) (52,774) 129,752

(146,744) (128,490) (2,256) (53,990) 133,964

(150,404) (130,028) (1,916) (55,231) 141,620

(154,155) (133,031) (1,601) (56,501) 147,223

(157,999) (136,103) (1,330) (57,801) 153,083

127,835 9,500

127,835 –

(135,861)

(123,793)

(143,599)

(148,365)

(161,385)

(159,333)

(164,092)

(166,585)

(169,288)

(174,683)

(178,883)

Scenario 3 – Optimistic Works Program Refer to Appendix B

Long-Term Financial Plan 29

Performance Monitoring & Review CN has a strong focus on achieving its strategic goals and financial objectives. The LTFP facilitates effective financial decision making. It assists CN to identify opportunities, anticipate future financial issues early and determine how CN can best achieve outcomes agreed with the community. The LTFP provides transparency and accountability to the community by forecasting the financial impacts of CN’s plans, strategies and initiatives over a 10-year period, which can in turn be used to support the operational and capital decisions CN makes as part of the annual budget process. CN reviews the LTFP annually as part of the development of the Operational Plan. CN monitors performance against the key financial indicators, and also the projections made in the LTFP against actual outcomes to refine assumptions and adjust the plan. CN utilises key performance ratio benchmarks set by the OLG to monitor and review financial performance and financial sustainability. These include: Operating performance ratio Own source operating revenue ratio Unrestricted current ratio Debt service cover ratio Rates and annual charges outstanding percentage

City of Newcastle

Cash expense cover ratio

Long-Term Financial Plan 31

0.00%

4.50 2021/22

2022/23

2023/24

2024/25

2025/26

2026/27

2027/28

2028/29

2029/30

87.55

87.49

87.43

87.35

87.28

87.21

87.14

87.04

86.86

86.75

91.2

20.00% 30.00% 30.00% 40.00% 10.00% 10.00% 20.00% 20.00% 30.00% 0.00% 0.00% 10.00% 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 10.00% 20.00% 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 0.00% Unrestricted current ratio 0.00% 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 10.00% 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 5.002021/22 2030/31

Ratio (x)

4.50 5.00

5.00 2.50

4.50 5.00 3.50 4.00 4.50 3.00 3.50 4.00 2.50 3.00 3.50 2.00 2.50 3.00 1.50 2.00 2.50 1.00 1.50 2.00 0.50 1.00 1.50 0.00 0.50 1.00 0.00 0.50

2.00 3.50 4.00 1.50 3.00 3.50 1.00 2.50 3.00 0.50 2.00 2.50 0.00 1.50 2.00 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 1.00 1.50 0.50 1.00 0.00 0.50 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 0.00 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32

2025/26

2026/27

2027/28

2028/29

2029/30

2030/31

2031/32

RatioRatio (x) (x)

4.50 4.00 3.50 5.00 3.00

2.492.49 2031/32

2.40

2.49

2.492.49

2.402.40

2.422.42 2.402.40

2030/31

2.42

2.422.42

2.412.41

2029/30

2.41

2028/29

2.44

2.412.41

2.442.44

2.462.46

2027/28

2.46

2026/27

2.47

2.36

2025/26

2.462.46

2.472.47 2.472.47

2.512.51

2024/25

2.51

2.362.36

2.412.41 2.412.41

2.41

2023/24

2.47

2.46

2.44

2.41

2.42

2.40

2.49

2.41

0.00 Debt service cover ratio 2021/22 2022/23 2023/24 Debt 14.00 service cover ratio

2.51

0.50

2022/23

2.36

City of Newcastle

1.00

2021/22

2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 1.00 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 0.50 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 0.00 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32

2.07

2.00 0.50 0.00 1.50 0.00

2024/25

2025/26

2026/27

2027/28

2028/29

2029/30

2030/31

2031/32

Debt14.00 service cover ratio 12.00 Debt cover ratio 14.00 service 14.00 12.00 Debt service 12.00 10.00 14.00 10.00 12.00

cover ratio

12.04 12.04

10.77 10.77 .77

8.888.88 .888.88

8.308.30 308.30

7.567.56 67.56

6.836.83 .83

6.826.82 .82

6.126.12 12

5.735.73 3

2.00 6.00 2.00

4.00 8.00

4.654.65

6.00 4.00 8.00 10.00 6.00 4.00

5.555.55

Ratio (x)

8.00 6.00 10.00 12.00 6.00 8.00

10.77 10.77

10.00 12.00 14.00 8.00 10.00

12.04

Ratio (x) (x) Ratio

Ratio Ratio (x) (x)

Debt service cover ratio 8.00

io (x)

2.072.07

2.50 1.00 0.50 0.00 1.50

2.072.07

Ratio (x)

3.00 1.50 1.00 0.50 2.00 0.00

2.512.51

5.00 3.50 4.00 3.00 2.50 2.00

2.07

Ratio (x)

RatioRatio (x) (x)

4.00 Unrestricted 4.50 current ratio 3.50 3.00 2.50

Benchmark > 60.0% Current assets less all external restrictions Current assets less all external restrictions Current liabilities less specific purpose liabilities Current assets less allless external restrictions Current liabilities specific purpose liabilities Current assets less external restrictions Current liabilities lessall specific purpose liabilities The unrestricted current ratio less isassets specific local government and represents council’s Current lesstoallpurpose external restrictions Current liabilities specific liabilities to ratio meet isitsspecific short-term obligations as they due. The unrestrictedability current to local government andfall represents council’s Current liabilities less specific purpose liabilities ability to meet its short-term obligations as they fall due. The unrestricted current ratioassets is specific government and represents council’s Current less to all local external restrictions ability to meet its short-term obligations as they fall due. The unrestricted current ratio is specific to local government and represents council’s Current liabilities less specific purpose liabilities ability to meet its short-term obligations as they fall due. The unrestricted current ratio is specific to local government and represents council’s > 1.50x ability to meet itsBenchmark short-term obligations as they fall due. Benchmark > 1.50x The unrestricted current ratio is specific to local government and represents council’s Benchmark > 1.50x ability to meet its short-term obligations as they fall due. Benchmark > 1.50x

2.49

2.40

2.49 2.49 2.49

2.40

2.42

2.41

2.42 2.42 2.42

2.41

2.41 2.41 2.41

2.44

2.44 2.44 2.44

2.44

2.46

2.46 2.46 2.46

2.47

2.47 2.47 2.47

2.47

2.51

2.51 2.51 2.51

2.36

2.36 2.36 2.36

2.36

2.41

2.41 2.41 2.41

2.07

2.40 2.40 2.40

2031/32

Ratio (x)

12.04 12.04 12.04

10.77 10.77 10.77

12.04 12.04 12.04

8.88 10.77 10.77 10.77

8.88

2029/30

8.88

8.30 8.30

8.88 8.88 8.88

2028/29

8.30

7.56 8.30 8.30 8.30

7.56

7.56 7.56 7.56

7.56

6.83 6.83

6.83 6.83 6.83

6.83

6.82 6.82

6.82 6.82 6.82

6.82

6.12 6.12

6.12 6.12 6.12

6.12

5.73 5.73

5.73 5.73 5.73

4.65

5.73

4.65

5.55 5.55

5.55

2027/28

2028/29

2029/30

2030/31

2031/32

2030/31

0.08

0.00

4.06%

2025/26

2026/27

2027/28

2028/29

2029/30

2030/31

2031/32

2021/22 Cash

2022/23 cover 2023/24 expense ratio

2024/25

2025/26

2026/27

4.0 3.0 2.0 3.0 2.0 1.0 2.0 1.0 0.0 1.0 0.0 0.0

2027/28

4.06% 4.06%

4.06% 4.06% 4.06%

4.06% 4.06%

4.06% 4.06% 4.06%

4.07% 4.07%

4.07% 4.07% 4.07%

2028/29

2029/30

2030/31

The rates and annual charges outstanding ratio assesses the impact of uncollected rates Rates and annualratio charges collectible The rates and assesses of uncollected ratesefforts. andannual annualcharges chargesoutstanding on council’s liquidity andthe theimpact adequacy of debt recovery and annual charges council’s liquidity and the adequacy ofthe debt recovery efforts. The rates and on annual charges outstanding ratio assesses impact of uncollected rates Benchmark & rural The rates and annual charges outstanding ratio< 10.00% assesses regional the impact of uncollected rates and annual charges on council’s liquidity and the adequacy of debt recovery efforts. and annual charges on council’s liquidity and the adequacy of debt recovery efforts. The rates and annual charges outstanding ratio assesses the impact of uncollected rates and annual charges on council’s liquidity and the adequacy of debt recovery efforts. Benchmark < 10.00% regional & rural Benchmark < 10.00% regional & rural

Benchmark < 10.00% regional & rural

Current year’s cash and cash equivalents plus all term deposits

2031/32

6.41 6.41 6.41

6.52

6.41 6.41 6.41

6.52

6.61 6.61 6.61

6.52 6.52 6.52

6.71

6.85 6.85 6.85

7.18

6.96 6.96 6.96

6.85 6.85 6.85

2.0 5.0 4.0

6.96 6.96 6.96

3.0 6.0 5.0

7.18

7.16

5.0 4.0 3.0

4.0 7.0 6.0

7.18

7.85

5.0 8.0 7.0

Cash expense cover ratio

6.0 5.0 4.0

Rates and annual charges collectible

Monthly payments from cash flow of operating and financing activities

Cash expense cover ratio 6.0 8.0 Cash expense cover ratio Cash expense cover ratio

8.0

7.0 6.0 5.0

Rates and annual charges outstanding

2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32

7.0 Cash cover ratio Cash expense expense cover ratio

8.0 7.0 6.0

Benchmark > 2.00x Benchmark > 2.00x

2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32

8.0

8.0 7.0

Operating result before capital excluding interest and Operating resultdepreciation/impairment/amortisation before capital excluding interest and depreciation/impairment/amortisation Principal repayments (Statement Cash Flows) plus interest borrowing costs (Income Operating result beforeofcapital excluding and The debt service cover ratio measures operating cash to service including interest, Operating result before excluding interest and Principal repayments (Statement of capital Cashthe Flows) plus borrowing costs debt (Income Statement) depreciation/impairment/amortisation principal and lease payments. depreciation/impairment/amortisation Statement) Principal repayments (Statement of Cash Flows) plus borrowing costs (Income Operating(Statement result before excluding interest and Principal repayments of capital Cash Flows) plus borrowing costs (Income Statement) depreciation/impairment/amortisation Statement) Principal repayments (Statement of Cash Flows) plus borrowing costs (Income The debt service cover ratio measures the operating cash to service debt including interest, Statement) The debt service cover ratio measures the operating service debt including interest, principal andcash leasetopayments. Benchmark > 2.00x principal and lease payments. The debt service cover ratio measures the operating cash to service debt including interest, The debt service cover ratio measures the operating cash to service debt including interest, principal and lease payments. principal and lease payments. The debt service cover ratio measures the operating cash to service debt including interest, principal and lease payments. Benchmark > 2.00x Benchmark > 2.00x

Benchmark < 10.00% regional & rural Benchmark < 10.00% regional & rural 4.07% 4.07%

0.00

2021/22 0.00

2024/25

4.07% 4.07%

0.02

4.07%

2023/24

4.07%

2022/23

4.07%

2021/22

4.07% 4.07% 4.07%

0.00

0.00 0.04 0.02

4.07% 4.07% 4.07%

0.04

0.02 0.06 0.04

4.07% 4.07%

0.06 0.04 0.06

4.07%

0.04 0.08 0.06

4.07% 4.07% 4.07%

0.08 0.06 0.08

Operating result before capital excluding interest and depreciation/impairment/amortisation Principal repayments (Statement of Cash Flows) plus borrowing costs (Income Statement)

2031/32

4.07%

0.08 0.10

Benchmark > 1.50x

Benchmark > 2.00x

0.06 0.10

4.07% 4.07%

0.10

6.61 6.61 6.61

Benchmark > 60.0%

2030/31

0.12

7.18 7.18 7.18

87.55% 87.55% 87.55% 2031/32

Benchmark > 60.0%

2026/27

6.71 6.71 6.71

2030/31

87.55%

87.55% 87.55%

87.49% 87.49% 87.49%

87.43% 87.43%

87.49% 87.49%

87.43% 2029/30

87.49%

87.35% 87.35%

87.43% 87.43%

87.35% 87.35%

87.35% 2028/29

Total operating revenue excl all grants andfiscal contributions Total operating revenue The own source operating revenue ratio measures council’s flexibility and the degree to own which it relies on external funding sources such as operating grants and contributions. The source operating revenue ratio Total measures operatingcouncil’s revenuefiscal flexibility and the degree to which it relies on external funding sources such as operating grants and contributions. Total operating revenue excl all grants and contributions The own source operating revenue ratio measures council’s fiscal flexibility and the degree to which it relies on external funding sources suchcouncil’s as operating grants and contributions. The own source operating revenue ratio measures Total operating revenue fiscal flexibility and the degree to which it relies on external funding sources such as operating grants and contributions. The own source operating revenue ratio measures council’s fiscal flexibility and the degree to which it relies on external funding sources such as operating grants and contributions. Benchmark > 60.0% The own source operating revenue ratio measures council’s Benchmark > 60.0%fiscal flexibility and the degree to which it relies on external funding sources such as operating grants and contributions. Benchmark > 60.0%

2029/30

Benchmark > 1.50x Benchmark > 1.50x

Rates and annual charges outstanding Rates charges and annual charges outstanding The rates and annual outstanding ratio assesses the impact of uncollected rates Rates and annual charges collectible and annual charges on council’s liquidity and the adequacy of debt recovery efforts. Rates and annual charges outstanding Ratesand and annual charges collectible Rates annual charges outstanding Rates and annual charges collectible Rates and annual charges collectible Rates and annual charges outstanding

7.12

Total operating revenue excl all grants and contributions Total operating revenue excl all grants and contributions Total operating revenue Total operating revenue excl all grantsrevenue and contributions Total operating

5.00 4.00 4.50 Unrestricted current ratio 3.50

3.50 2.00 2.50 1.50 1.00 0.50

0.12

Ratio (mths) Ratio Ratio (mths) (mths)

Unrestricted current ratio Unrestricted current ratio 0.00%5.00 2021/22 2022/23 2023/24 2024/25 5.00 Unrestricted current ratio 4.50 Unrestricted current ratio Unrestricted current ratio 5.00 4.50 4.00

4.00 2.50 2.00 1.50 3.00 1.00

0.12

0.00 0.02

2031/32

2025/26

0.12 Rates, annual charges outstanding ratio 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28

7.12

2030/31

2028/29

0.10 Rates, annual charges outstanding ratio 0.10

0.02

2031/32

2027/28

0.10 Rates, annual charges outstanding ratio Rates, annual charges outstanding ratio 0.12 0.12 Rates, annual charges outstanding ratio Rates, annual charges outstanding ratio 0.08

0.02 0.04

2031/32 2030/31

2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 40.00% 10.00% 0.00% 20.00% 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 30.00% 0.00% 10.00% 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 20.00% 0.00% 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 10.00%

4.50 3.00 2.50 2.00 3.50 1.50

Benchmark > 0.00%

2026/27

2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 Rates, charges outstanding ratio 2021/22 annual 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32

7.12

6.50% 2031/32

0.00

2024/25

2023/24

4.24%

6.50% 6.50%

6.07% 6.07%

6.50% 6.50%

6.07% 6.50%

5.55% 5.55%

6.07% 6.07%

5.55% 6.07%

4.62% 4.62%

5.55% 5.55% 5.55%

2029/30

Benchmark > 0.00% 2031/32

2031/32

2030/31 2029/30

87.43%

2027/28

87.35%

87.28% 87.28% 87.28%

87.28% 87.28%

87.21% 87.21% 87.21% 2026/27

87.28%

2025/26

87.21%

87.21% 87.21%

87.14% 87.14% 87.14%

87.04%

87.14% 87.14%

87.04% 87.04% 2024/25

87.14%

87.04%

87.04% 87.04%

86.86% 86.86%

86.86%

86.86% 86.86%

86.75% 86.75%

86.75%

86.75% 86.75%

91.28% 91.28%

91.28%

Ratio %

91.28% 91.28%

Ratio % % Ratio

4.62%

2028/29

2030/31

2029/30 2028/29

2030/31

0.02 0.02 0.02 (excl capital 0.02grants & contributions) Operating revenue Operating revenue (excl capital grants & contributions) less operating expenses Operating (excl capital grants & contributions) Operating revenue (exclrevenue capital grants & contributions) less operating expenses

Total operating revenue excl all grants and contributions Total operating revenue

80.00% 100.00% Own 90.00% 80.00%source operating revenue ratio 70.00% 90.00%70.00% 100.00% 80.00% 60.00% Own source 80.00% 90.00%operating revenue ratio 70.00%60.00% 50.00% 100.00% 70.00% 80.00% 60.00%50.00% 40.00% 90.00% 60.00%40.00% 70.00% 50.00% 30.00% 80.00% 50.00%30.00% 60.00% 40.00% 20.00% 70.00% 40.00%20.00% 50.00% 30.00% 10.00% 60.00% 30.00% 40.00% 20.00%10.00% 0.00% 50.00% 20.00% 2021/22 2022/23 2023/24 30.00% 10.00% 0.00%

Ratio Ratio % %

4.62%

2028/29

Own source operating revenue ratio Own source operating revenue ratio 100.00% 100.00% operating revenue ratio Own source 90.00% Own source 100.00% 90.00% operating revenue ratio

2029/30

2027/28

Own source operating revenue ratio 2027/28 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27

2029/30

2025/26

The unrestricted current ratio is specific to local government and represents council’s Current liabilities specific purpose liabilities The unrestricted current ratio is specific local government andasrepresents council’s ability to meetless itsto short-term obligations they fall due. Benchmark > 1.50x ability to meet its short-term obligations they fall due. The unrestricted current ratio is specific to local as government and represents council’s The unrestricted current ratio is specific to local government and represents council’s ability to meet its short-term obligations as they fall due. ability to meet its short-term obligations as they fall due. The unrestricted current ratio is specific to local government and represents council’s ability to meet its short-term obligations as they fall due. Benchmark > 1.50x Benchmark > 1.50x

2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32

2021/22 0.00

2.00 0.00

0.13 0.13 0.14 grants Operating (excl capital grants & contributions) Operating revenue (excl revenue capital & 0.15 contributions) less operating expenses

Operating revenue (excl capital how grants contributions) TheOperating operating performance ratio measures well&council contained operating expenditure revenue (excl capital grants & contributions) less operating expenses within operatingperformance revenue (excluding capital grants andcouncil contributions, fairoperating value adjustments, The operating ratio measures how well contained expenditureand Operating revenue (excl capital grants & contributions) reversal of revaluation within operating revenue (excluding capital grants and decrements). contributions, fair value adjustments, and The operating performance ratio measures how well council contained operating expenditure Operating revenue (excl capital grants contributions) less operating expenses reversal of &revaluation decrements). within (excluding capital grants contributions, fair value adjustments, and The operating operating revenue performance ratio measures how and well council operating expenditure Operating revenue (excl capital grants & contained contributions) reversal of revaluation within operating revenue (excluding capital grants anddecrements). contributions, fair value adjustments, and The operating performance ratio measures how well council contained operating expenditure reversal of revaluation decrements). within operating revenue (excluding capital grants and contributions, fair value adjustments, and Benchmark > 0.00% reversal of revaluation decrements). The operating performance ratio measuresBenchmark how well council contained operating expenditure > 0.00% within operating revenue (excluding capital grants and contributions, fair value adjustments, and Benchmark > 0.00% reversal of revaluation decrements). Benchmark > 0.00%

2.00 0.00

2022/23

4.07% 4.07% 4.07%

2027/28 2026/27

2028/29

0.00%

Ratio %

2028/29

2027/28

2026/27 2025/26

4.62% 4.62%

4.33%

4.33% 4.33%

3.55%

2026/27 2026/27

2025/26 2024/25

2027/28

0.02

4.00 2.00 0.00

2021/22

7.12 7.12 7.12

2024/25

3.55% 3.55%

4.16% 4.16%

2025/26

2023/24

3.55% 3.55%

2025/26

2026/27

4.33%

4.16%

2024/25

4.16%

4.16% 4.16%

2.73% 2.73%

2024/25

2025/26

3.55%

2023/24

2022/23

2.73%

1.95% 1.95%

2023/24

2024/25

2.73%

2022/23 2021/22

2023/24

1.95%

1.56% 1.56%

2022/23

2023/24

1.95%

2021/22 0.00%

2022/23

1.56%

1.67% 1.67%

1.00% 2021/22

2022/23

1.56%

1.00%

2021/22

1.67%

0.00% 2.00% 0.00%

2021/22

4.33% 4.33%

RatioRatio % %

Ratio %

1.00% 0.00% 3.00% 2.00% 1.00% 0.00%

1.67%

Ratio %

RatioRatio % %

5.00% 4.00% 7.00% 6.00% 5.00% 4.00%

0.11

4.00 2.00

7.31

0.02

6.00 4.00 0.00

6.00 4.00 2.00

7.31

0.02

0.11

0.02 0.02 grants & 0.02 revenue (excl capital contributions) less operating expenses

8.00 6.00 4.00

4.24% 4.24%

0.02

0.15

8.00 6.00 2.00

7.31

0.02

0.10

0.11

1.003.00 0.02 10% 0.11 1.00 0.45 0.15 6.41 0.02 0.11 1.00 0.15 0.02 3.00 0.45 0.02 0.11 0.021.00 0.15 0.02 0.11 0.02 0.15 0.45 0.02 0.02 1.00

7.31 7.31 7.31

0.02

0.02 0.02 Operating

0.14

4.06% 0.45

4.07%

0.02

0.09

0.11

1.003.00 0.02 10% 0.11 1.00 0.45 0.14 6.52 0.02 0.11 1.00 0.14 0.02 3.00 0.45 0.02 0.11 0.021.00 0.14 0.02 0.11 0.02 0.14 0.45 0.02 0.02 1.00

4.24% 4.24% 4.24%

0.02

0.13

4.06% 0.45

4.65 4.65 4.65

0.12

0.10

1.003.00 0.02 10% 0.10 1.00 0.45 0.13 6.61 0.02 0.10 1.00 0.13 0.02 3.00 0.45 0.02 0.10 0.021.00 0.13 0.02 0.10 0.02 0.13 0.45 0.02 0.02 1.00

4.07% 4.07%

0.11

0.13

4.06% 0.45

7.16

0.10

Operating performance ratio

2.00% 1.00% 4.00% 3.00% 2.00% 1.00%

0.02

0.09

6.00% 5.00% 7.00% 6.00% 5.00%

3.00% 2.00% 5.00% 4.00% 3.00% 2.00%

0.08

7.00% 6.00% Operating performance ratio

4.00% 3.00% 6.00% 5.00% 4.00% 3.00%

0.02

0.07

0.09

1.003.00 0.02 10% 0.09 1.00 0.44 0.13 6.71 0.02 0.09 1.00 0.13 0.02 3.00 0.44 0.02 0.09 0.021.00 0.13 0.02 0.09 0.02 0.13 0.44 0.02 0.02 1.00

7.16

0.02

0.06

0.12

4.07% 0.44

4.07% 4.07% 4.07%

0.08

1.003.00 0.02 10% 0.08 1.00 0.44 0.12 6.85 0.02 0.08 1.00 0.12 0.02 3.00 0.44 0.02 0.08 0.021.00 0.12 0.02 0.08 0.02 0.12 0.44 0.02 0.02 1.00

10.00 8.00 4.00

10.00 8.00 6.00

7.16 7.16 7.16

0.02

0.11

4.07% 0.44

2024/25

4.14%

0.07

0.02

0.10

0.08

1.003.00 0.02 10% 0.08 1.00 0.44 0.11 6.96 0.02 0.08 1.00 0.11 0.02 3.00 0.44 0.02 0.08 0.021.00 0.11 0.02 0.08 0.02 0.11 0.44 0.02 0.02 1.00

12.00 10.00 8.00

5.55 5.55 5.55

0.06

0.02

0.09

4.07% 0.44

10% 3.00 1.00 2.00 0.45 6.41

4.14% 4.14%

0.05

0.02

1.003.00 0.02 10% 0.07 1.00 0.44 0.10 7.18 0.02 0.07 1.00 0.10 0.02 3.00 0.44 0.02 0.07 0.021.00 0.10 0.02 0.07 0.02 0.10 0.44 0.02 0.02 1.00

10% 3.00 1.00 2.00 0.45 6.52

7.85

0.05

0.08

0.07

4.07% 0.44

1.003.00 0.02 10% 0.06 1.00 0.44 0.09 7.12 0.02 0.06 1.00 0.09 0.02 3.00 0.44 0.02 0.06 0.021.00 0.09 0.02 0.06 0.02 0.09 0.44 0.02 0.02 1.00

10% 3.00 1.00 2.00 0.45 6.61

7.85

0.07

0.06

4.07% 0.44

10% 3.00 1.00 2.00 0.44 6.71

4.14% 4.14% 4.14%

7.00% Operating performance ratio Operating 6.00% performance ratio 7.00%

1.003.00 0.02 10% 0.05 1.00 0.43 0.08 7.31 0.02 0.05 1.00 0.08 0.02 3.00 0.43 0.02 0.05 0.021.00 0.08 0.02 0.05 0.02 0.08 0.43 0.02 0.02 1.00

10% 3.00 1.00 2.00 0.44 6.85

7.85 7.85 7.85

0.02

0.05

4.24% 0.43

10% 3.00 1.00 2.00 0.44 6.96

Ratio %

0.04

Operating performance ratio

Operating performance ratio 5. Cost to bring assets to agreed 7.00%service level

Benchmark

0.06

0.05

1.003.00 0.02 10% 0.05 1.00 0.56 0.07 7.16 0.02 0.05 1.00 0.07 0.02 3.00 0.56 0.02 0.05 0.021.00 0.07 0.02 0.05 0.02 0.07 0.56 0.02 0.02 1.00

10% 3.00 1.00 2.00 0.44 7.18

12.00 10.00 6.00

Ratio (mths)

Operating performance ratio

4.07% 0.56

10% 3.00 1.00 2.00 0.44 7.12

14.00 12.00

14.00 12.00 10.00

Ratio (x) Ratio (x)

1.003.00 0.02 10% 0.04 1.00 0.60 0.06 7.85 0.02 0.04 1.00 0.06 0.02 3.00 0.60 0.02 0.04 0.021.00 0.06 0.02 0.04 0.02 0.06 0.60 0.02 0.02 1.00

5. Cost to bring assets to agreed service level 3. Infrastructure backlog ratio

Benchmark Benchmark

0.04

4.14% 0.60

10% 3.00 1.00 2.00 0.43 7.31

14.00

Ratio % Ratio %

5. Rates, annual charges, interest and extra charges outstanding percentage

Benchmark Benchmark 1. Buildings and infrastructure renewals ratio Infrastructure Benchmark 3.Benchmark Infrastructure backlog ratio Benchmark 1. andtoinfrastructure renewals 5.expense Cost bring agreed ratio service level 6. Buildings Cash coverassets ratio to Benchmark Infrastructure 3. Infrastructure backlog ratio Benchmark Benchmark 5.Benchmark Cost to bringand assets to agreed renewals service level 1. Buildings infrastructure ratio Benchmark 3. Infrastructure backlog ratio Benchmark Benchmark 5. Cost to bring assets to agreed service level Benchmark Infrastructure 3. Infrastructure backlog ratio Benchmark 5. Cost to bring assets to agreed service level 1. Buildings and infrastructure renewals ratio Benchmark Benchmark Benchmark

10% 3.00 1.00 2.00 0.56 7.16

2023/24

8.00 12.00 service Debt cover ratio

Ratio Ratio % Ratio % %

10% 3.00 1.00 2.00 0.60 7.85

2022/23

12.00

Ratio Ratio (x) Ratio (x) (x)

2023/24 and ongoing: $100M Works Program adjusted annually for CPI

Infrastructure 3. Infrastructure backlog ratio

14.00 2021/22

Debt service cover ratio Debt service cover ratio 14.00 10.00 14.00 Debt service cover ratio Debt service cover ratio

Scenario 1 – Planned Case

2022/23: $133M Works Program

2.07 2.07 2.07

0.00

Ratio (mths) Ratio (mths)

1.67%60.00% 2.07 1.56%60.00% 2.41 1.95%60.00% 2.36 2.73%60.00% 2.51 4.16%60.00% 2.47 3.55%60.00% 2.46 4.33%60.00% 2.44 4.62%60.00% 2.41 5.55%60.00% 2.42 6.07%60.00% 2.40 6.50%60.00% 2.49 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 91.28% 86.75% 86.86% 87.04% 87.14% 87.21% 87.28% 87.35% 87.43% 87.49% 87.55% 0.00% 2.07 1.50 0.00% 2.41 1.50 0.00% 2.36 1.50 0.00% 2.51 1.50 0.00% 2.47 1.50 0.00% 2.46 1.50 0.00% 2.44 1.50 0.00% 2.41 1.50 0.00% 2.42 1.50 0.00% 2.40 1.50 0.00% 2.49 1.50 60.00% 1.67%86.75% 60.00% 1.56%86.86% 60.00% 1.95%87.04% 60.00% 2.73%87.14% 60.00% 4.16%87.21% 60.00% 3.55%87.28% 60.00% 4.33%87.35% 60.00% 4.62%87.43% 60.00% 5.55%87.49% 60.00% 6.07%87.55% 60.00% 6.50% 91.28% 5.55 4.65 5.73 6.12 6.82 6.83 7.56 8.30 8.88 10.77 12.04 1.50 0.00% 2.41 1.50 0.00% 2.36 1.50 0.00% 2.51 1.50 0.00% 2.47 1.50 0.00% 2.46 1.50 0.00% 2.44 1.50 0.00% 2.41 1.50 0.00% 2.42 1.50 0.00% 2.40 1.50 0.00% 2.49 1.50 0.00% 2.07 60.00% 5.55 2.00 60.00% 4.65 2.00 60.00% 5.73 2.00 60.00% 6.12 2.00 60.00% 6.82 2.00 60.00% 6.83 2.00 60.00% 7.56 2.00 60.00% 8.30 2.00 60.00% 8.88 2.00 60.00% 10.77 2.00 60.00% 12.04 2.00 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 91.28% 86.75% 86.86% 87.04% 87.14% 87.21% 87.28% 87.35% 87.43% 87.49% 87.55% 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 2.07 2.41 2.36 2.51 2.47 2.46 2.44 2.41 2.42 2.40 2.49 4.14% 4.07% 4.24% 4.07% 4.07% 4.07% 4.07% 4.07% 4.06% 4.06% 4.06% 1.67% 1.56% 1.95% 2.73% 4.16% 3.55% 4.33% 4.62% 5.55% 6.07% 6.50% 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 5.55 4.65 5.73 6.12 6.82 6.83 7.56 8.30 8.88 10.77 12.04 1.504.14% 1.504.07% 1.504.24% 1.504.07% 1.504.07% 1.504.07% 1.504.07% 1.504.07% 1.504.06% 1.504.06% 1.504.06% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 2.07 2.41 2.36 2.51 2.47 2.46 2.44 2.41 2.42 2.40 2.49 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 5.55 4.65 5.73 6.12 6.82 6.83 7.56 8.30 8.88 10.77 12.04 7.85 86.75% 7.16 86.86% 7.31 87.04% 7.12 87.14% 7.18 87.21% 6.96 87.28% 6.85 87.35% 6.71 87.43% 6.61 87.49% 6.52 87.55% 6.41 91.28% 10% 1.50 4.07% 10%1.50 4.24% 10%1.50 4.07% 10%1.50 4.07% 10%1.50 4.07% 10%1.50 4.07% 10%1.50 4.07% 10%1.50 4.06% 10%1.50 4.06% 10%1.50 4.06% 10%1.50 4.14% 2.00 7.85 2.00 7.16 2.00 7.31 2.00 7.12 2.00 7.18 2.00 6.96 2.00 6.85 2.00 6.71 2.00 6.61 2.00 6.52 2.00 6.41 3.00 60.00% 3.00 60.00% 3.00 60.00% 3.00 60.00% 3.00 60.00% 3.00 60.00% 3.00 60.00% 3.00 60.00% 3.00 60.00% 3.00 60.00% 3.00 60.00% 5.55 4.65 5.73 6.12 6.82 6.83 7.56 8.30 8.88 10.77 12.04 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 4.14% 2.07 3.002.00 4.07% 2.41 3.002.00 4.24% 2.36 3.002.00 4.07% 2.51 3.002.00 4.07% 2.47 3.002.00 4.07% 2.46 3.002.00 4.07% 2.44 3.002.00 4.07% 2.41 3.002.00 4.06% 2.42 3.002.00 4.06% 2.40 3.002.00 4.06% 2.49 3.002.00 7.85 7.16 7.31 7.12 7.18 6.96 6.85 6.71 6.61 6.52 6.41 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 3.00 4.14% 7.16 3.00 4.07% 7.31 3.00 4.24% 7.12 3.00 4.07% 7.18 3.00 4.07% 6.96 3.00 4.07% 6.85 3.00 4.07% 6.71 3.00 4.07% 6.61 3.00 4.06% 6.52 3.00 4.06% 6.41 3.00 4.06% 7.85 0.60 0.45 12.04 0.45 5.55 4.65 0.56 5.73 0.43 6.12 0.44 6.82 0.44 6.83 0.44 7.56 0.44 8.30 0.44 8.88 0.45 10.77

Benchmark 2. Own source revenue 4. Debt operating service cover ratioratio Benchmark Benchmark 3. Unrestricted current ratio Benchmark 4.Benchmark Debt service ratio revenue ratio 2. Own sourcecover operating Benchmark 3. Operating Unrestricted current 5. Rates, annualratio charges, interest and extra charges outstanding percentage 1. performance ratio Benchmark Benchmark 4. Debt service cover ratio Benchmark Benchmark 5.Benchmark Rates, annual charges, interest and extra charges outstanding percentage 3. Unrestricted current ratio Benchmark 4. Own Debtsource service cover ratio 6. Cashoperating expense cover ratio 2. revenue ratio Benchmark 5. Rates,Benchmark annual charges, interest and extra charges outstanding percentage Benchmark Benchmark 6.Benchmark Cash expense 4. Debt servicecover coverratio ratio Benchmark 5. Unrestricted Rates, annualcurrent charges, interest and extra charges outstanding percentage 3. ratio Benchmark Benchmarkcover ratio 6. Cash expense Benchmark Infrastructure Benchmark 5. Rates, annual charges, interest and extra charges outstanding percentage Benchmark 6. Debt Cash1. expense cover ratio Buildings andratio infrastructure renewals ratio 4. service cover Infrastructure Benchmark Benchmark Benchmark Benchmark 1. Buildings and infrastructure 6. Cash expense cover ratio renewals ratio

2.07

Ratio (x)Ratio (x)

Ratio (x) Ratio (x) Ratio (x)

Debt service cover ratio Debt service cover ratio

The performance indicators for Scenario 11.56% (Planned Case) are4.16% included below. Performance indicators 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 1.67% 1.95% 2.73% 3.55% 4.33% 4.62% 5.55% 6.07% 6.50% 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 91.28% 86.75% 86.86% 87.04% 87.14% 87.21% 87.28% 87.35% 87.43% 87.49% 87.55% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 1.67% 1.56% 2023/24 1.95% 2.73% 2025/26 4.16% 2026/27 3.55% 4.33% 2028/29 4.62% 2029/30 5.55% 2030/31 6.07% 2031/32 6.50% 2022/23 2024/25 2027/28 for Scenario 2 and Scenario 3 2021/22 are included in Attachment respectively. 60.00% 60.00% 60.00% 60.00% A and 60.00% B 87.21% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 91.28% 86.75% 86.86% 87.04% 87.14% 87.28% 87.35% 87.43% 87.49% 87.55% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Current liabilities less specific purpose liabilities Current assets less all external restrictions Current assets lessisall external restrictions The unrestricted current ratio specific to local government and represents council’s Current liabilities less specific purposeasliabilities ability to meet itsspecific short-term obligations they fall due. Current assets less all external restrictions Current liabilities less purpose liabilities Current assets less all external restrictions Current liabilities less specific purpose liabilities Current liabilities lessall specific purpose liabilities Current assets less external restrictions

4.00 Unrestricted 4.50 current ratio 4.00

2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 1.67% 2022/23 1.56% 2023/24 1.95% 2024/25 2.73% 2025/26 4.16% 2026/27 3.55% 2027/28 4.33% 2028/29 4.62% 2029/30 5.55% 2030/31 6.07% 2031/32 6.50% 2021/22

Benchmark > 60.0% Current assets less all external restrictions

2031/32

4.00 Unrestricted current ratio Unrestricted current ratio 3.50 5.00 5.00 Unrestricted current ratio Unrestricted 3.00 current ratio 4.50

Newcastle City Council 10 Year Financial Plan for the Years ending 30 June 2031 Newcastle City Council PlannedPlan Case 10Scenario: Year Financial for the Years ending 30 June 2031 Newcastle City Council Scenario: Planned Case 10 Year Financial Plan for the Years ending 30 June 2031 Newcastle City Council Scenario: PlannedPlan Casefor the Years ending 30 June 2031 10 Year1.Financial Operating performance ratio Newcastle City Council Scenario: Plannedperformance Case 1.Benchmark Operating 10 Year Financial Plan ratio for the Years ending 30 June 2031 2. Own source operating revenue ratio Benchmark Scenario: Plannedratio Case 1. Operating performance Newcastle Council 2.Benchmark OwnCity source operating revenue ratio Benchmark 1. Operating performance ratio 3. Unrestricted current ratio 10 Year Financial Plan for the Years ending 30 June 2031 Benchmark 2. Own source operating revenue ratio Benchmark Scenario: 3.Benchmark Unrestricted current ratio ratio 1. Planned OperatingCase performance

Benchmark > 60.0% Benchmark > 60.0%

Current year’s cash and cash equivalents plus all term deposits Monthly fromequivalents cash flow ofplus operating and financing activities Current year’spayments cash and cash all term deposits This liquidity ratio indicates the number of months councilactivities can continue paying for its Monthly payments from cash flow of operating andthe financing immediate expenses without additional cash inflow. Current year’s cash andfrom cash cash equivalents plus all term Monthly payments flow of operating anddeposits financing activities Monthly payments from cash flow of operating and financing activities Monthly payments from cash flow of operating and financing activities This liquidity ratio indicates the number of months the council can continue paying for its 3 months This liquidity ratio indicatesimmediate the number ofBenchmark months the>council can continue paying for its expenses without additional cash inflow. immediate expenses inflow.can continue paying for its This liquidity ratio indicates thewithout number additional of months cash the council This liquidity ratio indicates the number of months the council can continue paying for its immediate expenses without additional cash inflow. immediate expenses without additional cash inflow. This liquidity ratio indicates the number of months the council can continue paying for its Benchmark > 3 months immediate expenses without Benchmark > 3 additional months cash inflow.

1.0 4.0 3.0 0.0 3.0 2.0

Current year’s cash and cash equivalents plus all term deposits Current year’s cash and cash equivalents plus all term deposits

2021/22

2022/23

2023/24

2024/25

2025/26

2026/27

2027/28

2028/29

2029/30

2030/31

2031/32

2.0 1.0

Benchmark > 3 months Benchmark > 3 months Benchmark > 3 months

1.0 0.0

2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 0.0 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2021/22

2022/23

2023/24

2024/25

2025/26

2026/27

2027/28

2028/29

2029/30

2030/31

2031/32

Benchmark > 1.50x Benchmark > 1.50x

Operating result before capital excluding interest and depreciation/impairment/amortisation Operating result before capital excluding interest and Principal repayments (Statement of Cash Flows) plus borrowing costs (Income depreciation/impairment/amortisation Operating result before capital excluding interest and Statement) Principal repayments (Statement of Cash Flows) plus borrowing costs (Income depreciation/impairment/amortisation Operating result before capital excluding interest and Statement) Principal repayments (Statement of Cash Flows) plus borrowing costs (Income depreciation/impairment/amortisation Operating result before capital excluding interest and Statement) Principal repayments (Statement of Cash Flows) plus borrowing costs (Income depreciation/impairment/amortisation Statement) The debt service cover ratio measures the operating cash to service debt including interest, Principal repayments (Statement of Cash Flows) plus borrowing costs (Income principal lease payments. The debt service cover ratio measures theand operating cash to service Operating result before capital excluding interest anddebt including interest, Statement) principal and lease payments. depreciation/impairment/amortisation The debt service cover ratio measures the operating cash to service debt including interest, Principal repayments (Statement of Cash Flows) plus borrowing costs (Income principal and lease payments. The debt service cover ratio measures the operating cash to service debt including interest, Statement) principal and lease payments. The debt service cover ratio measures the operating cash to service debt including interest, Benchmark > 2.00x principal and lease payments. Benchmark > 2.00x The debt service cover ratio measures the operating cash to service debt including interest, Benchmark > 2.00x principal and lease payments. Benchmark > 2.00x

Long-term Financial Plan 33

Conclusion The Planned Case scenario provides a forecast which is driven by key metrics, assumptions, and inputs as well as core information contained within the four-year Delivery Program, WDSP, AMS and AMP. The LTFP provides an indication of CN’s future financial position from 2022/23 to 2031/32 if it follows the actions outlined in the Newcastle 2040. The Planned Case Scenario has been developed using the 2022/23 proposed budget with continuation of ‘business as usual’, alebit with a significantly increased capital works program compared to the historical norm. The financial modelling undertaken for the LTFP indicates CN is in a good financial position. The LTFP projects net operating surpluses for the duration of the forecast. The operating performance ratio which provides an indicator of CN’s ability to cover operating expenditure within operating revenue, is above the benchmark and continues to be positive throughout the period of the LTFP.

City of Newcastle

CN maintains sufficient unrestricted cash to ensure ongoing liquidity. The strong financial position is supported by forecasted increases in cash and cash equivalents over the ten-year planning horizon. The plan reflects that financial sustainability targets will be met across the period without materially altering services levels.

Long-term Financial Plan 35

4RV05 4RV06 4RV13

6EX01 6EX02 6EX03 6EX04 6EX06 6EX09

Attachment A:

Grants and contributions provided for operating purposes Grants and contributions provided for capital purposes

16,317 13,745

16,687 33,762

18,054 34,504

18,534 35,298

18,961 36,110

19,397 36,940

19,843 37,790

20,299 38,659

20,766 39,548

21,244 40,458

21,732 41,388

Other income Total Income from Continuing Operations

4,072 344,676

4,007 380,642

4,800 399,918

5,760 415,842

5,892 428,866

6,028 441,856

6,167 455,117

6,308 468,639

6,453 483,059

6,602 497,024

6,754 511,507

Expenses from Continuing Operations Employee benefits and on-costs Borrowing costs

117,162 3,556

125,271 3,773

128,505 3,913

132,425 3,591

136,376 3,261

140,171 2,929

143,668 2,584

147,252 2,256

150,926 1,916

154,692 1,601

158,551 1,330

Materials and services Depreciation and amortisation Other expenses

102,646 58,428 43,601

104,359 63,407 44,650

103,400 67,344 49,942

108,188 68,983 51,109

109,264 70,650 50,284

115,407 72,506 51,441

117,725 73,373 52,623

121,794 74,954 53,836

123,167 76,807 55,073

126,002 78,277 56,340

128,903 80,169 57,634

Net losses from the disposal of assets Total Expenses from Continuing Operations Operating result from continuing operations Net operating result for the year before grants and contributions provided for capital purposes

4,328 329,721 14,955

4,149 345,609 35,033

5,899 359,003 40,915

6,035 370,331 45,511

6,174 376,009 52,857

6,316 388,770 53,086

6,461 396,434 58,683

6,609 406,701 61,938

7,444 415,333 67,726

6,917 423,829 73,195

7,076 433,663 77,844

1,210

1,271

6,411

10,213

16,747

16,146

20,893

23,279

28,178

32,737

36,456

Statement of Financial Position Financial Statements – Scenario 2 - Decreased Works Program Statement of Financial Position

2022/23: $133M Works Program 2023/24 and ongoing: $85M Works Program adjusted annually for CPI

1CA01 1CA02 1CA03 1CA04 1CA05

Income Statement Income Statement

Income Statement

4RV01 4RV02 4RV03 4RV04 4RV05 4RV06 4RV13

6EX01 6EX02 6EX03 6EX04 6EX06 6EX09

Income from Continuing Operations Rates and annual charges User charges and fees Interest and investment revenue Other revenues Grants and contributions provided for operating purposes Grants and contributions provided for capital purposes Other income Total Income from Continuing Operations Expenses from Continuing Operations Employee benefits and on-costs Borrowing costs Materials and services Depreciation and amortisation Other expenses Net losses from the disposal of assets Total Expenses from Continuing Operations Operating result from continuing operations Net operating result for the year before grants and contributions provided for capital purposes

2021/22 Current Year Current 2021/22

2022/23

2023/24

2024/25

2025/26

2026/27 2027/28 Projection Year 5 Year 6 2026/27 2027/28

2028/29

2029/30

2030/31

2031/32

Year 1 2022/23

Year 2 2023/24

Year 3 2024/25

Year 4 2025/26

Year 7 2028/29

Year 8 2029/30

Year 9 2030/31

Year 10 2031/32

$ '000

198,945 94,322 5,843 11,432

208,307 102,132 5,391 10,356

212,890 112,337 6,736 10,597

217,786 118,518 8,951 10,995

223,231 122,423 10,984 11,265

228,365 126,469 13,133 11,524

233,617 130,646 15,265 11,789

238,991 134,964 17,358 12,060

244,965 139,423 19,567 12,337

250,599 144,028 21,472 12,621

256,363 148,787 23,572 12,911

16,317 13,745

16,687 33,762

18,054 34,504

18,534 35,298

18,961 36,110

19,397 36,940

19,843 37,790

20,299 38,659

20,766 39,548

21,244 40,458

21,732 41,388

4,072 344,676

4,007 380,642

4,800 399,918

5,760 415,842

5,892 428,866

6,028 441,856

6,167 455,117

6,308 468,639

6,453 483,059

6,602 497,024

6,754 511,507

1NCA01 1NCA02 1NCA03 1NCA10 1NCA06 1NCA04 1NCA05 1NCA07

2CL01 2CL04 2CL05

117,162 3,556 102,646 58,428 43,601

125,271 3,773 104,359 63,407 44,650

128,505 3,913 103,400 67,344 49,942

132,425 3,591 108,188 68,983 51,109

136,376 3,261 109,264 70,650 50,284

140,171 2,929 115,407 72,506 51,441

143,668 2,584 117,725 73,373 52,623

147,252 2,256 121,794 74,954 53,836

150,926 1,916 123,167 76,807 55,073

154,692 1,601 126,002 78,277 56,340

158,551 1,330 128,903 80,169 57,634

4,328 329,721 14,955

4,149 345,609 35,033

5,899 359,003 40,915

6,035 370,331 45,511

6,174 376,009 52,857

6,316 388,770 53,086

6,461 396,434 58,683

6,609 406,701 61,938

7,444 415,333 67,726

6,917 423,829 73,195

7,076 433,663 77,844

1,210

1,271

6,411

10,213

16,747

16,146

20,893

23,279

28,178

32,737

36,456

2CL02 2CL06 2CL03

2NCL01 2NCL04 2NCL05 2NCL02 2NCL06 2NCL03

Statement of Financial Position

1CA01 1CA02 1CA03 1CA04 1CA05

ASSETS Current assets Cash and cash equivalents Investments Receivables Inventories Other Total current assets

1NCA01

City of Newcastle

1NCA02

1NCA03 1NCA10 1NCA06 1NCA04 1NCA05 1NCA07

2CL01 2CL04 2CL05 2CL02

3EQ01

Current Year Current 2021/22

Year 1 2022/23

Year 2 2023/24

Year 3 2024/25

Year 4 2025/26

$ '000

27,477 122,300 29,496

28,801 122,300 30,203

29,917 122,300 30,868

30,861 122,300 31,578

31,334 122,300 32,304

1,152 8,655

1,196 8,989

1,222 9,186

1,250 9,398

189,080

191,489

193,493

223,074 1,657 1,588,433 32,822 731 13,990 4,935 88 1,865,730 2,054,810

219,033 1,697 1,620,183 32,936 759 14,690 4,935 90 1,894,323 2,085,812

250,032 1,734 1,616,855 47,640 776 15,424 4,935 92 1,937,488 2,130,981

41,571 10,367 3,017 6,905

43,080 10,616 3,114 5,727

44,045 10,849 4,103 5,910

Projection Year 5 Year 6 2026/27 2027/28

3EQ02

Year 7 2028/29

Year 8 2029/30

Year 9 2030/31

Year 10 2031/32

$ '000

32,397 122,300 33,047

33,036 122,300 33,807

33,892 122,300 34,585

34,611 122,300 35,380

35,319 122,300 36,194

36,139 122,300 37,027

1,279 9,614

1,309 9,835

1,339 10,062

1,369 10,293

1,401 10,530

1,433 10,772

1,466 11,019

195,387

196,831

198,888

200,544

202,439

204,222

206,018

207,951

285,993 1,774 1,613,077 43,049 794 16,195 4,935 94 1,965,911 2,161,298

335,757 1,815 1,608,847 38,609 812 17,005 4,935 96 2,007,876 2,204,707

385,033 1,856 1,604,160 34,184 831 17,855 4,935 98 2,048,952 2,247,840

439,992 1,899 1,599,680 30,138 850 18,748 4,935 100 2,096,342 2,296,886

498,396 1,943 1,595,086 26,169 869 19,685 4,935 103 2,147,186 2,349,625

560,572 1,988 1,592,278 22,200 889 20,670 4,935 105 2,203,637 2,407,859

629,177 2,033 1,589,791 18,231 910 21,703 4,935 108 2,266,888 2,472,906

703,056 2,080 1,586,899 14,262 931 22,788 4,935 110 2,335,061 2,543,012

45,074 11,099 4,047 6,000

46,132 11,354 4,138 6,198

47,198 11,615 3,828 6,193

48,289 11,883 3,844 5,740

49,404 12,156 3,946 5,938

50,552 12,435 4,052 4,482

51,720 12,721 4,163 3,964

52,915 13,014 2,704 1,482

ASSETS Current assets Cash and cash equivalents Investments Receivables Inventories Other Total current assets

SCFO2

Year 1 2022/23 $ '000

Year 2 2023/24 $ '000

Year 3 2024/25 $ '000

Year 4 2025/26 $ '000

Projection Year 5 Year 6 2026/27 2027/28 $ '000 $ '000

Year 7 2028/29 $ '000

Year 8 2029/30 $ '000

Year 9 2030/31 $ '000

Year 10 2031/32 $ '000

27,477 122,300 29,496 1,152 8,655 189,080

28,801 122,300 30,203 1,196 8,989 191,489

29,917 122,300 30,868 1,222 9,186 193,493

30,861 122,300 31,578 1,250 9,398 195,387

31,334 122,300 32,304 1,279 9,614 196,831

32,397 122,300 33,047 1,309 9,835 198,888

33,036 122,300 33,807 1,339 10,062 200,544

33,892 122,300 34,585 1,369 10,293 202,439

34,611 122,300 35,380 1,401 10,530 204,222

35,319 122,300 36,194 1,433 10,772 206,018

36,139 122,300 37,027 1,466 11,019 207,951

Non-current assets Investments Receivables Infrastructure, property, plant and equipment Right of use asset Investments accounted for using the equity method Investment property Intangible assets

223,074 1,657 1,588,433 32,822 731 13,990 4,935

219,033 1,697 1,620,183 32,936 759 14,690 4,935

250,032 1,734 1,616,855 47,640 776 15,424 4,935

285,993 1,774 1,613,077 43,049 794 16,195 4,935

335,757 1,815 1,608,847 38,609 812 17,005 4,935

385,033 1,856 1,604,160 34,184 831 17,855 4,935

439,992 1,899 1,599,680 30,138 850 18,748 4,935

498,396 1,943 1,595,086 26,169 869 19,685 4,935

560,572 1,988 1,592,278 22,200 889 20,670 4,935

629,177 2,033 1,589,791 18,231 910 21,703 4,935

703,056 2,080 1,586,899 14,262 931 22,788 4,935

Other Total non-current assets TOTAL ASSETS

88 1,865,730 2,054,810

90 1,894,323 2,085,812

92 1,937,488 2,130,981

94 1,965,911 2,161,298

96 2,007,876 2,204,707

98 2,048,952 2,247,840

100 2,096,342 2,296,886

103 2,147,186 2,349,625

105 2,203,637 2,407,859

108 2,266,888 2,472,906

110 2,335,061 2,543,012

LIABILITIES Current liabilities Payables

41,571

43,080

44,045

45,074

46,132

47,198

48,289

49,404

50,552

51,720

52,915

Contract liabilities Lease liabilities

10,367 3,017

10,616 3,114

10,849 4,103

11,099 4,047

11,354 4,138

11,615 3,828

11,883 3,844

12,156 3,946

12,435 4,052

12,721 4,163

13,014 2,704

6,905 36,873 19,909 118,642

5,727 37,795 7,383 107,715

5,910 38,929 7,384 111,220

6,000 40,096 1,565 107,881

6,198 41,299 1,568 110,689

6,193 42,332 1,571 112,737

5,740 43,390 1,574 114,720

5,938 44,475 1,577 117,496

4,482 45,587 1,581 118,689

3,964 46,726 1,584 120,878

1,482 47,895 1,586 119,596

2,921 766

2,921 784

2,921 802

2,921 821

2,921 839

2,921 859

2,921 878

2,921 899

2,921 919

2,921 940

2,921 962

Lease liabilities Borrowings Employee benefit provisions Provisions Total non-current liabilities TOTAL LIABILITIES Net assets

32,851 58,476 999 66,824 162,837 281,479 1,773,331

32,490 75,349 1,024 57,165 169,733 277,448 1,808,364

46,788 69,438 1,054 49,480 170,483 281,703 1,849,278

42,741 63,438 1,086 47,621 158,628 266,509 1,894,789

38,604 57,240 1,119 45,650 146,373 257,062 1,947,645

34,775 51,048 1,147 43,623 134,373 247,110 2,000,730

30,931 45,308 1,175 41,540 122,753 237,473 2,059,413

26,985 39,370 1,205 39,398 110,778 228,274 2,121,351

22,933 34,888 1,235 37,197 100,093 218,782 2,189,077

18,770 30,924 1,266 34,935 89,756 210,634 2,262,272

16,066 29,442 1,297 32,612 83,300 202,896 2,340,116

EQUITY Accumulated surplus Revaluation reserves Total equity

1,502,538 270,793 1,773,331

1,537,571 270,793 1,808,364

1,578,485 270,793 1,849,278

1,623,996 270,793 1,894,789

1,676,852 270,793 1,947,645

1,729,937 270,793 2,000,730

1,788,620 270,793 2,059,413

1,850,558 270,793 2,121,351

1,918,284 270,793 2,189,077

1,991,479 270,793 2,262,272

2,069,323 270,793 2,340,116

Current Year Current 2021/22 $ '000

Year 1 2022/23 $ '000

Year 2 2023/24 $ '000

Year 3 2024/25 $ '000

Year 4 2025/26 $ '000

Projection Year 5 Year 6 2026/27 2027/28 $ '000 $ '000

Year 7 2028/29 $ '000

Year 8 2029/30 $ '000

Year 9 2030/31 $ '000

Year 10 2031/32 $ '000

Borrowings Employee benefit provisions Provisions Total current liabilities Non-current liabilities Payables Contract liabilities

Statement of Cashflows

SCFO1

Current Year Current 2021/22 $ '000

198,782 91,237 6,282 30,054 14,345

208,184 101,738 5,370 50,451 35 14,188

212,772 111,966 6,716 52,560 33 15,243

217,661 118,123 8,929 53,834 35 16,590

223,108 122,019 10,962 55,073 36 16,989

228,234 126,055 13,111 56,339 37 17,379

233,484 130,223 15,242 57,635 38 17,779

238,854 134,530 17,335 58,961 39 18,188

244,831 138,979 19,542 60,317 40 18,606

250,456 143,575 21,447 61,704 41 19,034

256,217 148,322 23,547 63,123 42 19,472

(116,260) (108,383) (3,556) (43,774) 68,727

(124,271) (125,075) (3,773) (44,875) 81,972

(127,275) (110,123) (3,913) (50,071) 107,908

(131,158) (114,835) (3,591) (51,250) 114,338

(135,071) (110,178) (3,261) (50,430) 129,247

(139,051) (116,352) (2,929) (51,589) 131,234

(142,520) (118,702) (2,584) (52,775) 137,820

(146,075) (122,804) (2,256) (53,991) 142,781

(149,720) (124,211) (1,916) (55,231) 151,237

(153,455) (127,080) (1,601) (56,502) 157,619

(157,283) (130,016) (1,330) (57,800) 164,294

127,835 9,500

127,835 –

(135,861)

(123,793)

(158,834)

(163,796)

(177,599)

(177,110)

(182,794)

(186,240)

127,835 Long-Term 127,835 127,835 Financial – – – (190,010)

(196,439)

(201,714)

Plan 37

2CL04 2CL05 2CL02 2CL06 2CL03

Contract liabilities Lease liabilities Borrowings Employee benefit provisions Provisions

10,367 3,017 6,905 36,873 19,909

10,616 3,114 5,727 37,795 7,383

10,849 4,103 5,910 38,929 7,384

11,099 4,047 6,000 40,096 1,565

11,354 4,138 6,198 41,299 1,568

11,615 3,828 6,193 42,332 1,571

11,883 3,844 5,740 43,390 1,574

12,156 3,946 5,938 44,475 1,577

12,435 4,052 4,482 45,587 1,581

12,721 4,163 3,964 46,726 1,584

13,014 2,704 1,482 47,895 1,586

118,642

107,715

111,220

107,881

110,689

112,737

114,720

117,496

118,689

120,878

119,596

Non-current liabilities Payables Contract liabilities Lease liabilities Borrowings Employee benefit provisions Provisions

2,921 766 32,851 58,476 999 66,824

2,921 784 32,490 75,349 1,024 57,165

2,921 802 46,788 69,438 1,054 49,480

2,921 821 42,741 63,438 1,086 47,621

2,921 839 38,604 57,240 1,119 45,650

2,921 859 34,775 51,048 1,147 43,623

2,921 878 30,931 45,308 1,175 41,540

2,921 899 26,985 39,370 1,205 39,398

2,921 919 22,933 34,888 1,235 37,197

2,921 940 18,770 30,924 1,266 34,935

2,921 962 16,066 29,442 1,297 32,612

Total non-current liabilities TOTAL LIABILITIES Net assets

162,837 281,479 1,773,331

169,733 277,448 1,808,364

170,483 281,703 1,849,278

158,628 266,509 1,894,789

146,373 257,062 1,947,645

134,373 247,110 2,000,730

122,753 237,473 2,059,413

110,778 228,274 2,121,351

100,093 218,782 2,189,077

89,756 210,634 2,262,272

83,300 202,896 2,340,116

EQUITY Accumulated surplus

1,502,538

1,537,571

1,578,485

1,623,996

1,676,852

1,729,937

1,788,620

1,850,558

1,918,284

1,991,479

2,069,323

Revaluation reserves Total equity

270,793 1,773,331

270,793 1,808,364

270,793 1,849,278

270,793 1,894,789

270,793 1,947,645

270,793 2,000,730

270,793 2,059,413

270,793 2,121,351

270,793 2,189,077

270,793 2,262,272

270,793 2,340,116

Statement of Cashflows

Current Year Current 2021/22 $ '000

Total current liabilities

2NCL01 2NCL04 2NCL05 2NCL02 2NCL06 2NCL03

3EQ01 3EQ02

Statement of Cashflows

Cashflows from operating activities Receipts: Rates and annual charges

SCFO1

SCFO2

User charges and fees Investment and interest revenue received Grants and contributions Bonds, deposits and retention amounts received Other Payments: Employee benefits and on-costs Materials and contracts Borrowing costs Other Net cash provided (or used in) operating activities

Attachment B: Financial Statements – Scenario 3 – Optimistic Works Program 2022/23: $133M Works Program

Year 1 2022/23 $ '000

Year 2 2023/24 $ '000

Year 3 2024/25 $ '000

Projection Year 5 Year 6 2026/27 2027/28 $ '000 $ '000

Year 4 2025/26 $ '000

Year 7 2028/29 $ '000

Year 8 2029/30 $ '000

Year 9 2030/31 $ '000

2023/24 and ongoing: $115M Works Program adjusted annually for CPI

Year 10 2031/32 $ '000

198,782

208,184

212,772

217,661

223,108

228,234

233,484

238,854

244,831

250,456

256,217

91,237 6,282 30,054 14,345

101,738 5,370 50,451 35 14,188

111,966 6,716 52,560 33 15,243

118,123 8,929 53,834 35 16,590

122,019 10,962 55,073 36 16,989

126,055 13,111 56,339 37 17,379

130,223 15,242 57,635 38 17,779

134,530 17,335 58,961 39 18,188

138,979 19,542 60,317 40 18,606

143,575 21,447 61,704 41 19,034

148,322 23,547 63,123 42 19,472

(116,260) (108,383) (3,556) (43,774) 68,727

(124,271) (125,075) (3,773) (44,875) 81,972

(127,275) (110,123) (3,913) (50,071) 107,908

(131,158) (114,835) (3,591) (51,250) 114,338

(135,071) (110,178) (3,261) (50,430) 129,247

(139,051) (116,352) (2,929) (51,589) 131,234

(142,520) (118,702) (2,584) (52,775) 137,820

(146,075) (122,804) (2,256) (53,991) 142,781

(149,720) (124,211) (1,916) (55,231) 151,237

(153,455) (127,080) (1,601) (56,502) 157,619

(157,283) (130,016)

Income Statement Income Statement

Income Statement

(1,330) (57,800) 164,294 4RV02 4RV03

Non-current assets classified as ‘held for sale’ Payments: Purchase of investment securities Purchase of investment property Purchase of infrastructure, property, plant and equipment Net cash provided (or used in) investing activities

127,835

9,500

–

(135,861) (71,812) (70,338)

(123,793) (700) (94,741) (91,399)

(158,834) (734) (65,281) (97,014)

(163,796) (771) (66,649) (103,381)

(177,599) (810) (68,153) (118,727)

(177,110) (850) (69,710) (119,835)

(182,794) (893) (71,308) (127,160)

(186,240) (937) (73,000) (132,342)

(190,010) (984) (77,475) (140,634)

(196,439) (1,033) (78,740) (148,377)

(201,714) (1,085) (80,383) (155,347)

4RV04 4RV05 4RV06 4RV13

6EX01 6EX02

Cashflows from financing activities

6EX03 6EX04

Receipts: Proceeds from borrowings and advances Payments:

8,750

22,600

Repayment of borrowings and advances Repayment of lease liabilities Net cashflow provided (used in) financing activities

(4,742) (3,874) 134

(6,905) (4,944) 10,751

(5,728) (4,050) (9,778)

Net increase/(decrease) in cash and cash equivalents

(1,477)

1,324

1,116

944

473

1,063

639

855

719

708

820

Plus: cash and cash equivalents – beginning of year

28,954

27,477

28,801

29,917

30,861

31,334

32,397

33,036

33,892

34,611

35,319

Cash and cash equivalents – end of the year

27,477

28,801

29,917

30,861

31,334

32,397

33,036

33,891

34,611

35,319

36,139

plus: Investments on hand – end of year Total cash, cash equivalents and investments

345,374 372,851

341,332 370,133

372,331 402,248

408,292 439,153

458,057 489,391

507,333 539,730

562,292 595,328

620,696 654,587

682,871 717,482

751,476 786,795

825,356 861,495

–

– (5,910) (4,103) (10,013)

– (6,000) (4,047) (10,047)

– (6,198) (4,138) (10,336)

–

(6,193) (3,828) (10,021)

(5,740) (3,844) (9,584)

– (5,938) (3,946) (9,884)

– (4,482) (4,052) (8,534)

–

City of Newcastle

Ratio

6EX09

1CA02 1CA03

Benchmark Per OLG > 0.00%

Own source operating revenue ratio

> 60.00%

2021/22

2022/23

2023/24

2024/25

2025/26

2026/27

2027/28

2028/29

2029/30

2030/31

2031/32

1.67%

1.56%

3.37%

4.27%

5.84%

5.55%

6.55%

6.95%

8.03%

8.69%

9.26%

91.28%

86.75%

86.86%

87.05%

87.16%

87.25%

87.34%

87.42%

87.51%

87.59%

87.66%

1CA04 1CA05

1NCA01 1NCA02 1NCA03 1NCA10

Unrestricted current ratio

> 1.5x

2.07x

2.41x

2.35x

2.51x

2.46x

2.45x

2.43x

2.40x

2.41x

2.39x

2.48x

Debt service cover ratio

> 2x

5.55x

4.65x

6.10x

6.53x

7.28x

7.38x

8.20x

9.05x

9.69x

11.79x

13.22x

Rates, annual charges, interest and extra charges outstanding percentage

< 10% regional & rural

4.14%

4.07%

4.24%

4.07%

4.06%

1NCA06 1NCA04 1NCA05 1NCA07

2CL01

> 3 mths

7.85 mths

7.16 mths

7.41 mths

7.22 mths

7.28 mths

7.06 mths

6.95 mths

6.81 mths

6.71 mths

6.62 mths

6.51 mths

2023/24

2024/25

2025/26

2026/27 2027/28 Projection

2028/29

2029/30

2030/31

2031/32

Current 2021/22 $ '000

Year 1 2022/23 $ '000

Year 2 2023/24 $ '000

Year 3 2024/25 $ '000

Year 4 2025/26 $ '000

Year 5 2026/27 $ '000

Year 7 2028/29 $ '000

Year 8 2029/30 $ '000

Year 9 2030/31 $ '000

Year 10 2031/32 $ '000

Year 6 2027/28 $ '000

Rates and annual charges User charges and fees Interest and investment revenue Other revenues Grants and contributions provided for operating purposes Grants and contributions provided for capital purposes Other income Total Income from Continuing Operations

198,945 94,322 5,843 11,432 16,317 13,745 4,072 344,676

208,307 102,132 5,391 10,356 16,687 33,762 4,007 380,642

212,890 112,337 6,736 10,597 18,054 34,504 4,800 399,918

217,786 118,518 8,260 10,995 18,534 35,298 5,761 415,152

223,231 122,424 9,421 11,265 18,961 36,110 5,891 427,303

228,365 126,469 10,575 11,524 19,397 36,940 6,027 439,297

233,617 130,647 11,554 11,789 19,843 37,790 6,166 451,406

238,991 134,963 12,433 12,060 20,299 38,659 6,308 463,713

244,965 139,423 13,333 12,337 20,766 39,548 6,454 476,826

250,599 144,028 13,980 12,621 21,244 40,458 6,602 489,532

256,363 148,786 14,759 12,911 21,732 41,388 6,755 502,694

Expenses from Continuing Operations Employee benefits and on-costs

117,162

125,271

129,570

133,515

137,491

141,449

144,976

148,590

152,295

156,092

159,983

3,556 102,646 58,428 43,601 4,328 329,721 14,955

3,773 104,359 63,407 44,650 4,149 345,609 35,033

3,913 112,453 67,563 49,941 7,981 371,421 28,497

3,591 117,449 69,643 51,109 8,165 383,472 31,680

3,261 118,738 71,762 50,284 8,353 389,889 37,414

2,929 126,273 74,080 51,442 8,545 404,718 34,579

2,584 128,841 75,962 52,624 8,741 413,728 37,678

2,256 133,166 77,568 53,834 8,942 424,356 39,357

1,916 134,801 79,893 55,073 9,830 433,808 43,018

1,601 137,904 81,847 56,339 9,358 443,141 46,391

1,330 141,078 84,233 57,635 9,574 453,833 48,861

1,210

1,271

698

3,470

5,933

7,473

Borrowing costs Materials and services Depreciation and amortisation Other expenses Net losses from the disposal of assets Total Expenses from Continuing Operations Operating result from continuing operations Net operating result for the year before grants and contributions provided for capital purposes

Statement of Financial Position

1CA01

Operating performance ratio

Cash expense cover ratio

6EX06

(3,964) (4,163) (8,127)

Ratios

2022/23

Income from Continuing Operations 4RV01

Cashflows from investing activities Receipts: Sale of investment securities

2021/22 Current Year Adopted

2CL04 2CL05 2CL02 2CL06 2CL03

38 2NCL01 2NCL04

ASSETS Current assets Cash and cash equivalents Investments Receivables Inventories Other Total current assets Non-current assets Investments Receivables Infrastructure, property, plant and equipment Right of use asset Investments accounted for using the equity method Investment property Intangible assets Other Total non-current assets TOTAL ASSETS LIABILITIES Current liabilities Payables Contract liabilities Lease liabilities Borrowings Employee benefit provisions Provisions Total current liabilities Non-current liabilities Payables Contract liabilities

Current Year Adopted Current 2021/22 $ '000

Year 1 2022/23 $ '000

(6,007)

Year 2 2023/24 $ '000

(3,618)

Year 3 2024/25 $ '000

1,304

Year 4 2025/26 $ '000

(2,361)

(112)

Projection Year 5 Year 6 2026/27 2027/28 $ '000 $ '000

Year 7 2028/29 $ '000

Year 8 2029/30 $ '000

Year 9 2030/31 $ '000

Year 10 2031/32 $ '000

27,477 122,300 29,496 1,152 8,655 189,080

28,801 122,300 30,203 1,196 8,989 191,489

30,952 122,300 30,868 1,222 9,186 194,528

31,956 122,300 31,578 1,250 9,398 196,482

32,491 122,300 32,304 1,279 9,614 197,988

33,726 122,300 33,047 1,309 9,835 200,217

34,477 122,300 33,807 1,339 10,062 201,985

35,363 122,300 34,585 1,369 10,293 203,910

36,151 122,300 35,380 1,401 10,530 205,762

36,928 122,300 36,194 1,433 10,772 207,627

37,819 122,300 37,027 1,466 11,019 209,631

223,074 1,657 1,588,433 32,822 731 13,990 4,935 88 1,865,730 2,054,810

219,033 1,697 1,620,183 32,936 759 14,690 4,935 90 1,894,323 2,085,812

219,563 1,734 1,633,871 47,640 776 15,424 4,935 92 1,924,035 2,118,563

224,663 1,774 1,647,063 43,049 794 16,195 4,935 94 1,938,567 2,135,049

241,999 1,815 1,659,756 38,609 812 17,005 4,935 96 1,965,027 2,163,015

255,719 1,856 1,671,946 34,184 831 17,855 4,935 98 1,987,424 2,187,641

273,276 1,899 1,683,751 30,138 850 18,748 4,935 100 2,013,697 2,215,682

292,373 1,943 1,695,852 26,169 869 19,685 4,935 103 2,041,929 2,245,839

313,105 1,988 1,709,711 22,200 889 20,670 4,935 105 2,073,603 2,279,365

338,198 2,033 1,723,863 18,231 910 21,703 4,935 108 2,109,981 2,317,608

366,415 2,080 1,737,579 14,262 931 22,788 4,935 110 2,149,100 2,358,731

41,571 10,367 3,017 6,905 36,873 19,909 118,642

43,080 10,616 3,114 5,727 37,795 7,383 107,715

44,045 10,849 4,103 5,910 38,929 7,384 111,220

45,074 11,099 4,047 6,000 40,096 1,565 107,881

46,132 11,354 4,138 6,198 41,299 1,568 110,689

47,198 11,615 3,828 6,193 42,332 1,571 112,737

48,289 11,883 3,844 5,740 43,390 1,574 114,720

49,404 12,156 3,946 5,938 44,475 1,577 117,496

50,552 12,435 4,052 4,482 45,587 1,581 118,689

51,720 12,721 4,163 3,964 46,726 1,584 120,878

52,915 13,014 2,704 1,482 47,895 1,586 119,596

2,921 766

2,921 784

2,921 802

2,921 821

2,921 839

2,921 859

2,921 878

2,921 899

2,921 919

2,921 940

2,921 962

Long-term Financial Plan 39

4RV01 4RV02 4RV03 4RV04 4RV05 4RV06 4RV13

198,945 94,322 5,843

208,307 102,132 5,391

212,890 112,337 6,736

217,786 118,518 8,260

223,231 122,424 9,421

228,365 126,469 10,575

233,617 130,647 11,554

238,991 134,963 12,433

244,965 139,423 13,333

250,599 144,028 13,980

256,363 148,786 14,759

2CL01

11,432 16,317

10,356 16,687

10,597 18,054

10,995 18,534

11,265 18,961

11,524 19,397

11,789 19,843

12,060 20,299

12,337 20,766

12,621 21,244

12,911 21,732

13,745 4,072

33,762 4,007

34,504 4,800

35,298 5,761

36,110 5,891

36,940 6,027

37,790 6,166

38,659 6,308

39,548 6,454

40,458 6,602

41,388 6,755

344,676

380,642

399,918

415,152

427,303

439,297

451,406

463,713

476,826

489,532

502,694

6EX02 6EX03 6EX04 6EX06 6EX09

Payables Contract liabilities

2CL05 2CL02 2CL06

Employee benefit provisions Provisions

2CL03

1NCA07

2CL04 2CL05 2CL02 2CL06

3EQ01 3EQ02

City of Newcastle

SCFO2

3,828

3,844

3,946

4,052

4,163

2,704

6,198

6,193

5,740

5,938

4,482

3,964

1,482

36,873 19,909

37,795 7,383

38,929 7,384

40,096 1,565

41,299 1,568

42,332 1,571

43,390 1,574

44,475 1,577

45,587 1,581

46,726 1,584

47,895 1,586

118,642

107,715

111,220

107,881

110,689

112,737

114,720

117,496

118,689

120,878

119,596

2,921

766

784

802

821

839

859

878

899

919

940

962

2NCL05

Lease liabilities

32,851

32,490

46,788

42,741

38,604

34,775

30,931

26,985

22,933

18,770

16,066

Materials and services Depreciation and amortisation

102,646 58,428

104,359 63,407

112,453 67,563

117,449 69,643

118,738 71,762

126,273 74,080

128,841 75,962

133,166 77,568

134,801 79,893

137,904 81,847

141,078 84,233

2NCL02

Borrowings Employee benefit provisions

58,476 999

75,349 1,024

69,438 1,054

63,438 1,086

57,240 1,119

51,048 1,147

45,308 1,175

39,370 1,205

34,888 1,235

30,924 1,266

29,442 1,297

2NCL03

Provisions Total non-current liabilities

66,824 162,837

57,165 169,733

49,480 170,483

47,621 158,628

45,650 146,373

43,622 134,372

41,540 122,753

39,397 110,777

37,196 100,092

34,935 89,756

32,612 83,300

281,479 1,773,331

277,448 1,808,364

281,703 1,836,860

266,509 1,868,540

257,062 1,905,953

247,109 1,940,532

237,473 1,978,209

228,273 2,017,566

218,781 2,060,584

210,634 2,106,974

202,896 2,155,835

1,502,538 270,793

1,537,571 270,793

1,566,067 270,793

1,597,747 270,793

1,635,160 270,793

1,669,739 270,793

1,707,416 270,793

1,746,773 270,793

1,789,791 270,793

1,836,181 270,793

1,885,042 270,793

1,773,331

1,808,364

1,836,860

1,868,540

1,905,953

1,940,532

1,978,209

2,017,566

2,060,584

2,106,974

2,155,835

Other expenses Net losses from the disposal of assets

43,601 4,328

44,650 4,149

49,941 7,981

51,109 8,165

50,284 8,353

51,442 8,545

52,624 8,741

53,834 8,942

55,073 9,830

56,339 9,358

57,635 9,574

329,721 14,955

345,609 35,033

371,421 28,497

383,472 31,680

389,889 37,414

404,718 34,579

413,728 37,678

424,356 39,357

433,808 43,018

443,141 46,391

453,833 48,861

1,210

1,271

698

3,470

5,933

7,473

(6,007)

(3,618)

1,304

(2,361)

(112)

2NCL06

TOTAL LIABILITIES Net assets EQUITY 3EQ02

Accumulated surplus Revaluation reserves

Total equity Statement of Cashflows

Current Year Adopted

Projection

Statement of Financial Position

Current

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Year 10

Statement of Cashflows

Current

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Year 10

ASSETS

2021/22 $ '000

2022/23 $ '000

2023/24 $ '000

2024/25 $ '000

2025/26 $ '000

2026/27 $ '000

2027/28 $ '000

2028/29 $ '000

2029/30 $ '000

2030/31 $ '000

2031/32 $ '000

Cashflows from operating activities

2021/22 $ '000

2022/23 $ '000

2023/24 $ '000

2024/25 $ '000

2025/26 $ '000

2026/27 $ '000

2027/28 $ '000

2028/29 $ '000

2029/30 $ '000

2030/31 $ '000

2031/32 $ '000

Current assets Cash and cash equivalents Investments

Investments Receivables Infrastructure, property, plant and equipment Right of use asset Investments accounted for using the equity method Investment property Intangible assets Other Total non-current assets TOTAL ASSETS

27,477 122,300

28,801 122,300

30,952 122,300

31,956 122,300

32,491 122,300

33,726 122,300

34,477 122,300

35,363 122,300

36,151 122,300

36,928 122,300

37,819 122,300

29,496 1,152

30,203 1,196

30,868 1,222

31,578 1,250

32,304 1,279

33,047 1,309

33,807 1,339

34,585 1,369

35,380 1,401

36,194 1,433

37,027 1,466

8,655

8,989

9,186

9,398

9,614

9,835

10,062

10,293

10,530

10,772

11,019

189,080

191,489

194,528

196,482

197,988

200,217

201,985

203,910

205,762

207,627

209,631

Receipts: Rates and annual charges

SCFO1

223,074 1,657

219,033 1,697

219,563 1,734

224,663 1,774

241,999 1,815

255,719 1,856

273,276 1,899

292,373 1,943

313,105 1,988

338,198 2,033

366,415 2,080

1,588,433 32,822

1,620,183 32,936

1,633,871 47,640

1,647,063 43,049

1,659,756 38,609

1,671,946 34,184

1,683,751 30,138

1,695,852 26,169

1,709,711 22,200

1,723,863 18,231

1,737,579 14,262

731 13,990

759 14,690

776 15,424

794 16,195

812 17,005

831 17,855

850 18,748

869 19,685

889 20,670

910 21,703

931 22,788

4,935 88 1,865,730 2,054,810

4,935 90 1,894,323 2,085,812

4,935 92 1,924,035 2,118,563

4,935 94 1,938,567 2,135,049

4,935 96 1,965,027 2,163,015

4,935 98 1,987,424 2,187,641

4,935 100 2,013,697 2,215,682

4,935 103 2,041,929 2,245,839

4,935 105 2,073,603 2,279,365

4,935 108 2,109,981 2,317,608

4,935 110 2,149,100 2,358,731

SCFO2

198,782

208,184

212,772

217,661

223,108

228,234

233,484

238,854

244,831

250,456

256,217

User charges and fees Investment and interest revenue received

91,237 6,282

101,738 5,370

111,966 6,716

118,123 8,238

122,019 9,399

126,055 10,552

130,223 11,531

134,530 12,410

138,979 13,309

143,575 13,955

148,322 14,733

Grants and contributions

30,054

50,451

52,560

53,834

55,073

56,339

57,635

58,961

60,317

61,704

63,123

Bonds, deposits and retention amounts received Other

14,345

35 14,188

33 15,243

35 16,590

36 16,989

37 17,379

38 17,779

39 18,188

40 18,606

41 19,034

42 19,472

Payments: Employee benefits and on-costs

(116,260)

(124,271)

(128,340)

(132,247)

(136,186)

(140,329)

(143,827)

(147,413)

(151,088)

(154,855)

(158,715)

Materials and contracts Borrowing costs Other

(108,383) (3,556) (43,774)

(125,075) (3,773) (44,875)

(119,176) (3,913) (50,073)

(124,096) (3,591) (51,250)

(119,652) (3,261) (50,430)

(127,219) (2,929) (51,589)

(129,819) (2,584) (52,776)

(134,177) (2,256) (53,989)

(135,845) (1,916) (55,231)

(138,982) (1,601) (56,501)

(142,191) (1,330) (57,801)

68,727

81,972

97,788

103,297

117,095

116,530

121,684

125,147

132,002

136,826

141,872

127,835 9,500

127,835 –

(135,861) (71,812) (70,338)

(123,793) (700) (94,741) (91,399)

(128,365) (734) (84,597) (85,861)

(132,934) (771) (86,410) (92,280)

(145,171) (810) (88,367) (106,513)

(141,555) (850) (90,389) (104,959)

(145,391) (893) (92,463) (110,912)

(146,932) (937) (94,643) (114,677)

(148,566) (984) (99,615) (121,330)

(152,927) (1,033) (101,389) (127,514)

(156,052) (1,085) (103,553) (132,855)

Net cash provided (or used in) operating activities Cashflows from investing activities Receipts:

Current liabilities Payables

41,571

43,080

44,045

45,074

46,132

47,198

48,289

49,404

50,552

51,720

52,915

Sale of investment securities Non-current assets classified as ‘held for sale’ Payments: Purchase of investment securities Purchase of investment property Purchase of infrastructure, property, plant and equipment Net cash provided (or used in) investing activities

Contract liabilities Lease liabilities

10,367 3,017

10,616 3,114

10,849 4,103

11,099 4,047

11,354 4,138

11,615 3,828

11,883 3,844

12,156 3,946

12,435 4,052

12,721 4,163

13,014 2,704

Cashflows from financing activities

Borrowings Employee benefit provisions

6,905 36,873

5,727 37,795

5,910 38,929

6,000 40,096

6,198 41,299

6,193 42,332

5,740 43,390

5,938 44,475

4,482 45,587

3,964 46,726

1,482 47,895

19,909 118,642

7,383 107,715

7,384 111,220

1,565 107,881

1,568 110,689

1,571 112,737

1,574 114,720

1,577 117,496

1,581 118,689

1,584 120,878

1,586 119,596

2,921 766

2,921 784

2,921 802

2,921 821

2,921 839

2,921 859

2,921 878

2,921 899

2,921 919

2,921 940

2,921 962

32,851 58,476

32,490 75,349

46,788 69,438

42,741 63,438

38,604 57,240

34,775 51,048

30,931 45,308

26,985 39,370

22,933 34,888

18,770 30,924

16,066 29,442

Employee benefit provisions Provisions Total non-current liabilities TOTAL LIABILITIES Net assets

999 66,824 162,837 281,479 1,773,331

1,024 57,165 169,733 277,448 1,808,364

1,054 49,480 170,483 281,703 1,836,860

1,086 47,621 158,628 266,509 1,868,540

1,119 45,650 146,373 257,062 1,905,953

1,147 43,622 134,372 247,109 1,940,532

1,175 41,540 122,753 237,473 1,978,209

1,205 39,397 110,777 228,273 2,017,566

1,235 37,196 100,092 218,781 2,060,584

1,266 34,935 89,756 210,634 2,106,974

1,297 32,612 83,300 202,896 2,155,835

EQUITY Accumulated surplus Revaluation reserves Total equity

1,502,538 270,793 1,773,331

1,537,571 270,793 1,808,364

1,566,067 270,793 1,836,860

1,597,747 270,793 1,868,540

1,635,160 270,793 1,905,953

1,669,739 270,793 1,940,532

1,707,416 270,793 1,978,209

1,746,773 270,793 2,017,566

1,789,791 270,793 2,060,584

1,836,181 270,793 2,106,974

1,885,042 270,793 2,155,835

Year 4 2025/26 $ '000

Projection Year 5 Year 6 2026/27 2027/28 $ '000 $ '000

Lease liabilities Borrowings

Statement of Cashflows

SCFO1

4,138

6,000

Contract liabilities

Non-current liabilities

2NCL03

4,047

5,910

2NCL04

Payables Contract liabilities

2NCL06

4,103

5,727

2NCL01

2NCL02

3,114

6,905

159,983 1,330

Provisions Total current liabilities

2NCL05

3,017

Borrowings

156,092 1,601

2CL03

2NCL04

Lease liabilities

152,295 1,916

LIABILITIES 2CL01

52,915 13,014

148,590 2,256

Non-current assets

1NCA05

51,720 12,721

144,976 2,584

Total current assets

1NCA04

50,552 12,435

141,449 2,929

Other

1NCA06

49,404 12,156

137,491 3,261

1CA05

1NCA10

48,289 11,883

133,515 3,591

1CA04

1NCA03

47,198 11,615

129,570 3,913

Receivables Inventories

1NCA02

46,132 11,354

125,271 3,773

Current Year Adopted

1NCA01

45,074 11,099

117,162 3,556

Statement of Financial Position

1CA03

44,045 10,849

Total current liabilities

3EQ01

1CA02

43,080 10,616

Employee benefits and on-costs Borrowing costs

Total Expenses from Continuing Operations Operating result from continuing operations Net operating result for the year before grants and contributions provided for capital purposes

1CA01

41,571 10,367

Non-current liabilities Payables

Expenses from Continuing Operations 6EX01

2CL04

Cashflows from operating activities Receipts: Rates and annual charges User charges and fees Investment and interest revenue received Grants and contributions Bonds, deposits and retention amounts received Other Payments: Employee benefits and on-costs Materials and contracts Borrowing costs Other Net cash provided (or used in) operating activities Cashflows from investing activities Receipts: Sale of investment securities Non-current assets classified as ‘held for sale’ Payments: Purchase of investment securities Purchase of investment property Purchase of infrastructure, property, plant and equipment Net cash provided (or used in) investing activities Cashflows from financing activities Receipts: Proceeds from borrowings and advances Payments:

Current Year Adopted Current 2021/22 $ '000

Receipts: Proceeds from borrowings and advances Payments: Repayment of borrowings and advances Repayment of lease liabilities Net cashflow provided (used in) financing activities

8,750

22,600

(4,742) (3,874) 134

(6,905) (4,944) 10,751

–

(5,726) (4,050) (9,776)

–

(5,910) (4,103) (10,013)

(6,000) (4,047) (10,047)

– (6,197) (4,138) (10,335)

–

(6,193) (3,828) (10,021)

(5,740) (3,844) (9,584)

–

(5,938) (3,946)

(4,482) (4,052)

(3,963) (4,163)

(9,884)

(8,534)

(8,126)

Net increase/(decrease) in cash and cash equivalents

(1,477)

1,324

2,151

1,004

535

1,236

751

886

788

778

891

Plus: cash and cash equivalents – beginning of year

28,954

27,477

28,801

30,952

31,956

32,491

33,726

34,477

35,363

36,151

36,928

Cash and cash equivalents – end of the year

27,477

28,801

30,952

31,956

32,491

33,727

34,477

35,363

36,151

36,929

37,819

plus: Investments on hand – end of year Total cash, cash equivalents and investments

345,374 372,851

341,332 370,133

341,863 372,815

346,963 378,919

364,299 396,790

378,019 411,746

395,576 430,053

414,673 450,036

435,404 471,555

460,497 497,426

488,715 526,534

Ratios Year 1 2022/23 $ '000

Year 2 2023/24 $ '000

Year 3 2024/25 $ '000

Year 7 2028/29 $ '000

Year 8 2029/30 $ '000

Year 9 2030/31 $ '000

Year 10 2031/32 $ '000

Ratio

198,782 91,237 6,282 30,054 14,345

208,184 101,738 5,370 50,451 35 14,188

212,772 111,966 6,716 52,560 33 15,243

217,661 118,123 8,238 53,834 35 16,590

223,108 122,019 9,399 55,073 36 16,989

228,234 126,055 10,552 56,339 37 17,379

233,484 130,223 11,531 57,635 38 17,779

238,854 134,530 12,410 58,961 39 18,188

244,831 138,979 13,309 60,317 40 18,606

250,456 143,575 13,955 61,704 41 19,034

256,217 148,322 14,733 63,123 42 19,472

(116,260) (108,383) (3,556) (43,774) 68,727

(124,271) (125,075) (3,773) (44,875) 81,972

(128,340) (119,176) (3,913) (50,073) 97,788

(132,247) (124,096) (3,591) (51,250) 103,297

(136,186) (119,652) (3,261) (50,430) 117,095

(140,329) (127,219) (2,929) (51,589) 116,530

(143,827) (129,819) (2,584) (52,776) 121,684

(147,413) (134,177) (2,256) (53,989) 125,147

(151,088) (135,845) (1,916) (55,231) 132,002

(154,855) (138,982) (1,601) (56,501) 136,826

(158,715) (142,191) (1,330) (57,801) 141,872

127,835 9,500

127,835 –

(135,861) (71,812) (70,338)

(123,793) (700) (94,741) (91,399)

(128,365) (734) (84,597) (85,861)

(132,934) (771) (86,410) (92,280)

(145,171) (810) (88,367) (106,513)

(141,555) (850) (90,389) (104,959)

(145,391) (893) (92,463) (110,912)

(146,932) (937) (94,643) (114,677)

(148,566) (984) (99,615) (121,330)

(152,927) (1,033) (101,389) (127,514)

(156,052) (1,085) (103,553) (132,855)

Benchmark Per OLG

2021/22

2022/23

2023/24

2024/25

2025/26

2026/27

2027/28

2028/29

2029/30

2030/31

2031/32

Operating performance ratio

> 0.00%

1.67%

1.56%

0.54%

1.20%

2.47%

1.54%

2.09%

2.27%

3.04%

3.40%

3.70%

Own source operating revenue ratio

> 60.00%

91.28%

86.75%

86.86%

87.03%

87.11%

87.18%

87.23%

87.29%

87.35%

87.40%

87.44%

Unrestricted current ratio

> 1.5x

2.07x

2.41x

2.37x

2.52x

2.48x

2.47x

2.45x

2.42x

2.43x

2.41x

2.50x

Debt service cover ratio

> 2x

5.55x

4.65x

5.37x

5.72x

6.36x

6.27x

6.92x

7.56x

8.06x

9.74x

10.85x

Rates, annual charges, interest and extra charges outstanding percentage

< 10% regional & rural

4.14%

4.07%

4.24%

4.07%

4.06%

7.85 mths

7.16 mths

7.21 mths

7.03 mths

7.08 mths

6.85 mths

6.75 mths

6.61 mths

6.52 mths

6.43 mths

6.32 mths

Cash expense cover ratio

> 3 mths

Long-Term Financial Plan 41 8,750

22,600

–

newcastle.nsw.gov.au

Long Term Financial Plan

Articles inside

Introduction

Long term financial plan objectives