Annual Business Plan 2015–2016
Adopted 30 June 2015 City of Tea Tree Gully – Annual Business Plan 2015–2016
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Contents Introduction...........................................................................................................1 Key financial statistics 2010–2016...................................................................3 Budget snapshot and Key statistics.................................................................4 Key achievements delivered in 2014–2015.....................................................5 Significant influences and priorities.............................................................. 19 Continuing services......................................................................................... 20 Project priorities for the year........................................................................ 25 Measuring performance – objectives for the year......................................34 Funding the Annual Business Plan................................................................37 What this Annual Business Plan and budget mean for rates.....................53
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City of Tea Tree Gully – Annual Business Plan 2015–2016
Introduction The coming year reflects a new era for our City as we enter the implementation phase for a number of key initiatives. Residents can look forward to seeing the first stage of a substantial upgrade to Civic Park at Modbury. Council continues to review its services to ensure that we provide services that meet our community’s needs. In FYE 2016 we are proposing increased funding in the areas of city beautification and parks upgrades in response to feedback from our community.
immunisation, maintaining Council assets, and health and planning services. With a proposed $86 million operating budget for 2015–2016, we plan to spend a combined $24 million on roads, buildings, stormwater, footpaths and waste collection. The remaining $62 million will be invested in other important services and programs for our 100,000 residents.
Additional funding allocated within the budget for this increase represents 1.2% of the rate rise which will predominantly enhance the visual amenity of our City.
This year we propose a 2.8% rate revenue increase to cover the costs of delivering key community services and programs and ongoing infrastructure maintenance. This level of rate revenue increase will result in a general rate increase of approximately 2.7% apart from any increases due to growth.
We are continuing our work to reinvigorate the Modbury Precinct, a move that will bring longterm business and population growth, with flow-on effects seen throughout our region.
This Annual Business Plan for 2015–2016 demonstrates our long-term commitment to ensuring a sustainable financial future for our City.
Projects that provide long-term environmental benefits, such as the restoration of Dry Creek, will also be funded.
We have been able to achieve this modest general rate increase despite significant increases in the costs of service delivery, reductions in government grant income and the implementation of an employee enterprise bargaining agreement.
The wellbeing of our residents is vital, so this plan also outlines a number of programs that Council funds for the elderly, people with disabilities, families and young people, as well as sport and recreation programs. In addition, we continue to fund many other core services, such as street lighting, fire prevention, dog management, library,
Mindful of the economic climate and recent community feedback, we will maintain our focus on sustainability, debt reduction, continuous improvement and financial consolidation.
City of Tea Tree Gully – Annual Business Plan 2015–2016
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We will also continue to achieve cost savings and efficiencies by reducing employee expenditure, reviewing assets and services and achieving significant procurement savings. Our ongoing debt reduction strategy will reduce our net financial liabilities by a further $2.273 million over the next 12 months. This will take our debt to $28.547 million – down from a high of $43.5 million in 2011–2012. On the following pages you will find more details about our projects and initiatives, along with key financial statistics. We acknowledge the contributions of our Elected Members, staff and community in delivering this plan to further enhance and strengthen our local community.
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City of Tea Tree Gully – Annual Business Plan 2015–2016
Key financial statistics 2010–2016 Capital expenditure ($M)
Staffing levels (full time equivalent) 440
30
430
25
420
20
410
15
400 390
10
380
5 0
370
2010 2011 2012 2013 2014 2015 2016
Operating surplus/(deficit) ($M)
360
2010
2011
2012
2013
2014
2015
2016
Net financial liabilities (debt) ($M)
5
50
4
40
3 30 2 20 1 10
0
-1
2010
2011
2012
2013
2014
2015
2016
0
2010
2011
2012
2013
2014
2015
City of Tea Tree Gully – Annual Business Plan 2015–2016
2016
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Budget snapshot Operating budget
Revenue sources
Key areas of expenditure
Total operating revenues
84% rates
Waste management
$85m
$71m
Total operating expenditure
7% fees and charges
$81m
$6.2m
$ 8.5m
Buildings, roads, footpaths and stormwater
$ 14.2m
Parks and gardens
$ 9.1m Library
$3.1m Operating surplus before capital amounts
10% other
Recreation and leisure
$4.2m
$8m
Community services
$4m
$ 3.3m
Key statistics Current population
98,575
Number of dwellings
38,985 Median age
40 4
Total land area
9,521 ha Sealed roads
580 km Kerb and gutter
1,170 km
606 reserves – total approx.
1,305 ha Sealed footpaths
Number of overseas born residents (23.9%)
29,033
470 km
% undertaking voluntary work
Unsealed footpaths
% with tertiary qualifications
80 km
City of Tea Tree Gully – Annual Business Plan 2015–2016
17.4%
44.8%
Key achievements delivered in 2014–2015 Council’s strategic directions
3. Outcomes – the short term: the strategic goals that we will achieve by 2015.
In 2009 we began to document our reviewed vision for the City’s long-term future. Calling the process create20forty, we commenced consultation in 2010, talking to community members and other stakeholders about how they would like the City to be shaped over the next 30 years.
The following table outlines our key strategic objectives and shows the progress on key programs since the Strategic Plan 2011–2015 was adopted.
New strategic plan
Our Strategic Plan 2011–2015 was the result of this process. The plan was formally adopted by Council in April 2011 and has guided our planning decisions over the last three years. It has also guided our development of this Annual Business Plan. These decisions will move us towards achieving our vision. This plan is currently being reviewed in 2014–2015. The vision falls into nine themes, capturing the shared priorities of our community. Each theme identifies the City’s key responsibilities to our community and the challenges to be met by the community and the Council working together to achieve the vision. Each theme has three subheadings: 1. Key strategic objectives – the long term: aspirations of our community for the next 30 years 2. Strategic directions – the medium term: directions for each key strategic objective over the next 5 to 30 years
Council is currently in the process of developing a new strategic plan, as our current Strategic Plan 2011–2015 expires this year. Once endorsed by Council the new strategic plan will form part of Council’s suite of strategic management plans that are used to guide our decision making, annual business planning and budgeting. This suite of strategic management plans includes: • Strategic Plan 2011–2015 • City Master Plan 2011–2040 • Asset management plans • Long-Term Financial Plan • Annual Business Plan (this document) • Annual Report The new strategic plan will be developed with community and stakeholder input. Community and stakeholder engagement on a draft of the new strategic plan is planned to occur in early 2015 - 2016.
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Our buildings and infrastructure – physical infrastructure that supports the future needs of our community Strategic Direction
Action
1.1 Plan and maintain infrastructure, buildings and facilities to meet the future needs of the community.
Completed works include a new public toilet block at Memorial Reserve, Tea Tree Gully ($130,000)
Completed drainage improvements including:
Business Unit Building Assets & Environment
Action Status Complete
Civil Assets
Complete
Strategic Planning
On track
Building Assets & Environment
Complete
Building Assets & Environment
On track
• Patricia Street, Ridgehaven • Grand Junction Road, Hope Valley • Green Valley Drive, Salisbury Heights • Prince of Wales Court, Ridgehaven Development approval granted for a portion of O-Bahn Linear Park North land division. Report to Council on sale process planned for April 2015. St Agnes Community Cente internal modifications ($86,000) to achieve compliance with accessibility standards completed February 2015. Dismantle and dispose of existing end of life retractable seating system at Golden Grove Arts Centre. Supply and install new compliant retractable seating system ($240,000) Seating manufacture complete, with installation planned for April.
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City of Tea Tree Gully – Annual Business Plan 2015–2016
Strategic Direction
1.3 Provide fair and equitable access to Council facilities for all the community and optimise the use of the facilities
Action
Business Unit Modbury Sporting Club spectator viewing Building Assets & area upgrade – construct a ramp to Environment improve accessibility to sports bar, replace existing verandah and improve concrete platform to the spectator viewing area ($160,000). Design complete with works planned for April 2015. Recreation Leases and Licences to Sporting and & Leisure Community Organisations Policy is Services being implemented with approximately 95% of clubs and groups having met with Council to discuss lease/licence arrangements.
Action Status On track
On track
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Our local economy – Sound business and employment opportunities through innovative economic development Strategic Direction
Action
2.2 Recognise complementary relationships between our local economy and other regions, and enhance the City’s role in promoting and supporting sound business and employment opportunities 2.7 Promote tourism opportunities
Invest Northern Adelaide interactive website (www.investnorthernadelaide. com.au) is operational with an e-newsletter being developed for distribution in the last quarter of 2014 that focuses on developments equal to or greater than $10 million within the cities of Playford, Salisbury and Tea Tree Gully
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Tourism opportunities report presented to Council in September
City of Tea Tree Gully – Annual Business Plan 2015–2016
Business Unit Strategic Planning
Action Status Complete
Strategic Planning
Complete
Our housing and living – Diversity in housing Strategic Direction
Action
3.3 Improve the amenity and character of the City and encourage opportunities for urban renewal 3.4 Prioritise the plannng and development of a high-order transitoriented development at the Modbury Regional Centre through lobbying, collaboration and partnerships with key stakeholders, including our community
Completion of Stage 1 community engagement for Modbury Heights Precinct Plan Modbury Regional Growth Area Development Plan Amendment currently with the Minister for a decision. Workshops with Elected Members were held in early 2015 to finalise Live Life Modbury vision and program of works/ activities for next financial year and community engagement
Business Unit Strategic Planning
Action Status Complete
Strategic Planning
Complete
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Our environment – A sustainable living environment Strategic Direction
Action
4.1 Inform and educate our community regarding environmental issues
Various environmental initiatives were completed including: • Wipe Out Waste professional development session
Business Unit Building Assets & Environment
Action Status Complete
Building Assets & Environment
Complete
Building Assets & Environment
On track
• Waste and recycling presentation at Ridgehaven
4.2 Adopt adaptation and mitigation measures as a response to climate change 4.3 Conserve, improve, maintain and protect areas of environmental value
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• Booth at Movies@thepark with Mini Munchers (kitchen compost bins) handed out Tea Tree Gully Library energy-efficient lighting upgrade stage 1 ($80,000)
• Willowbrook waterway restoration stage 2 ($125,000) – works commenced January 2015 • Dry Creek restoration stage 2 ($75,000) – designs completed for five sites. Works commenced February 2015
City of Tea Tree Gully – Annual Business Plan 2015–2016
Our transport network – our community linked through effective transport system Strategic Direction
Action
5.1 Create regional connections and link our neighbourhoods, facilities and amenities by a network of cycle paths and pedestrian paths
• Planning of works to link the Dry Creek Shared Use Path to the O-Bahn path completed with works scheduled to commence April 2015
Business Unit Civil Assets
Action Status On track
Civil Assets
On track
• Concrete footpaths completed at Karri Drive, Dernancourt; Gay Avenue from Anita Avenue to Padbury Road, Gilles Plains; Anita Avenue from Gay Avenue to Mary Avenue, Gilles Plains; Mary Avenue from Anita Avenue to Millbank Avenue, Gilles Plains. Kerb and reseal Wandana venue, near North East Road • Tea Tree Gully Township – road, footpath and carpark works complete
• Footpath construction worth $200,000 completed in Karri Dive, Lema Avenue, Gay Avenue, Anita Avenue, Mary Street and Grand Junction Road 5.2 Create a coordinated and • Road reseals worth $632,000 completed sustainable transport network that is safe, • Road reconstructions completed in convenient, affordable Ascham Road, Ascham Court and and accessible Vicar Street • Collaborative concept planning with Department of Planning, Transport and Infrastructure for Golden Grove Road near the Golden Grove Township ongoing
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Strategic Direction
Action
5.3 Create a city conducive to public transport, walking and cycling by implementing good urban design and placemaking strategies
• Bus waiting area hardstand construction to ensure Disability Discrimination Act 1992 (DDA) compliance – various locations (at time of print 40 sites of 50 completed)
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• Flashing light school crossing – Bicentennial Drive
City of Tea Tree Gully – Annual Business Plan 2015–2016
Business Unit Civil Assets
Action Status On track
Complete
Our population – a diverse population Strategic Direction 6.1 Support and celebrate cultural diversity
Action
Business Action Unit Status Complete • Community engagement for the Community Reconciliation Action Plan completed Development • Various Harmony Day events delivered & Engagement
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Our leadership – leadership excellence Strategic Direction
Action
7.5 Lead the City using best practice and continuous improvement principles in the area of customer service, governance, risk management, financial and resource management and other services
• All Local Government Association financial indicators have been reviewed and are tracking on target
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• A Customer Experience Strategy aimed at high quality customer interaction has been endorsed by Council and is currently being rolled out across the organisation
City of Tea Tree Gully – Annual Business Plan 2015–2016
Business Unit Finance
Action Status On track
Customer & On track Communications
Our community – foster family and community development Strategic Direction
Action
Business Unit
8.1 Offer a diverse range of community programs, services and events that meet changing needs and create a sense of community 8.2 Support healthy lifestyles and a safe living environment by providing infrastructure, partnerships, programs, information and education
Volunteer Strategy 2014–2018 Action Plan developed and on track to implement
Community Development & Engagement
• Healthy Choices Guidelines and checklists completed and promoted via Council’s intranet
Recreation & Leisure Services
8.3 Develop and use our networks with other service providers to better inform the community of available services
Action Status On track
Complete
Stage 1 • Stage 1 Community Wellbeing project Community Development & complete with Campbelltown City Council Engagement completed • Turramurra Recreation Centre camera upgrade federally funded via Attorney General’s Department Hosted Home and Community Care Expo attracting 130 residents, providing them with information and connections to services, agencies, health and volunteering options
Building Complete Assets & Environment Complete Community Development & Engagement
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Our leisure, play and arts – participation in entertainment, recreation, leisure and the arts Strategic Direction 9.1 Provide and encourage the delivery of a diverse range of leisure, recreation, learning, entertainment, arts and cultural opportunities 9.2 Deliver recreation, leisure and arts programs and manage facilities sustainably
Action
Business Unit Recreation Completion of the Active Play Area Concept Plan, a key stage one deliverable & Leisure of the Modbury Sporting Complex Master Services Plan (a component of the Open Space Strategy Action Plan)
New school holiday programs implemented, targeting specific demographics to attract new participants with October program highly successful based on attendance and social media reach. Community feedback on suggested themes being used throughout 2015 9.3 Promote the City’s range New online newsletter ‘Off the Shelf’ communicating news and event of facilities, programs information about library services, arts and events to our and culture events – completed and community distributed to community 9.4 Encourage and support Exhibitions for Gallery 1855 in 2015 completed and being promoted greater community engagement in artistic, cultural and creative pursuits Cross promotion of library resources 9.5 Enrich our community through lifelong learning with events. Implemented new e-book leisure opportunities and devices for both public and staff to use during training sessions access to resources
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City of Tea Tree Gully – Annual Business Plan 2015–2016
Action Status Complete
Library Services, Arts & Culture
Complete
Library Services, Arts & Culture
Complete
Library Services, Arts & Culture
Complete
Library Services, Arts & Culture
Complete
Alignment with other key strategic plans When developing our Strategic Plan 2011–2015 we considered the policies, strategies and reforms of all tiers of government to ensure that we share common aligned goals and that these goals are reflected in our plan. Hence, state plans such as South Australia’s Strategic Plan and The 30-Year Plan for Greater Adelaide will influence how our community develops and changes over the next 30 years. These state plans highlight the following projections for the northern Adelaide region, and specifically for our City: • Significant employment growth • A future transit-oriented development at Modbury, focused around the O-Bahn interchange • A potential mass transit connection from Modbury to Salisbury and Elizabeth • New housing developments that suit changing demographics and address our future environmental, social and economic challenges. You will find our Strategic Plan 2011–2015 on our website at www.teatreegully.sa.gov.au
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The chart below contains nine columns that represent the nine themes of the Strategic Plan. An additional column details an overall score. The nine columns show the Strategic Plan KPIs and required delivery timeframes. Each of the nine themes are tracking at 100% on target to be delivered, with the theme of Our Local Economy tracking at 0%. This figure is due to the fact that there were no KPIs current for this theme. This has not affected the overall score. Progress Report Strategic Plan 2011–2015 2014–2015 Strategic Outcomes Q3
Please note that as we draw closer to the end of the Strategic Plan 2011-2015 the number of active Key Performance Indicators (KPIs) is decreasing, meaning that some strategic themes may be represented by only a few KPIs.
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City of Tea Tree Gully – Annual Business Plan 2015–2016
Significant influences and priorities In preparing this Annual Business Plan (ABP) 2015–2016, we have taken into account several significant factors. These include: • The Adelaide Consumer Price Index (CPI) of 1.1% (as at March 2015) and Local Government Cost Index increases of 1.9% (as at December 2014) on goods and services for the previous year and forecast CPI increases of 2% to 2.5% in the next 12 months
to feedback received from our community indicating that Council should rein in spending. We are committed to ongoing reviews of our assets in order to provide optimum benefit to our community and also to ensure that we deliver quality services in the most costeffective manner. We are continuing to reduce costs through the following strategies: • Continuous review, prioritisation and validation of current services
• Enterprise bargaining agreements that provide for wage and salary increases
• Reviewing staffing levels
• Our service standards policy for providing, maintaining and renewing infrastructure assets, including roads, footpaths, lighting, stormwater drainage, street trees and plantings, open space and Council properties
• Making procurement savings. You can find full details about our project priorities for 2015–2016 on page 25 and following pages.
• Evolving needs of services and infrastructure to serve our City’s population • Possible reduction or removal of state or federal grant funding for services that we propose to continue providing • New or increased fees and charges imposed by other levels of government. In March 2012 we adopted a new Long-Term Financial Plan (LTFP) which was reviewed in May 2013 and April 2015, and which nominates a core savings target of $2.5 million over its first two years. This target has been achieved. This spending cutback was in direct response City of Tea Tree Gully – Annual Business Plan 2015–2016
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Continuing services All councils in South Australia have core (mandatory) responsibilities defined under the Local Government Act 1999 and other relevant legislation. These include: • Regulatory activities, including development planning and control, fire safety assessments and structural integrity assessments of buildings • Setting rates, preparing an annual budget, an annual business plan and developing longer-term strategic management plans • Management of infrastructure and other assets, including roads, footpaths, parks,
public open space, street lighting and stormwater drainage • Street cleaning and waste collection • Environmental health services, including food and public health inspections, immunisation, animal and pest control. The following table provides more detail on our services, including some additional services delivered in response to community needs. Lists of legislated (mandatory) and additional (discretionary) services are published on our website under Our Council/Services.
Services that we provide Service area Our City
Service Economic development
Social planning
Strategic planning Our Community
Citizenship ceremonies Cultural development
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Examples/details Support existing businesses and business sectors; encourage and facilitate new opportunities such as the high speed broadband projects Disability access and associated strategies in line with the Disability Discrimination Act 1992 (DDA); Ageing Strategy; provision of demographic and statistical information Master planning; precinct planning; heritage advice Bi-monthly citizenship ceremonies for approved candidates Reconciliation Sub-Committee; performing arts; events; placemaking
City of Tea Tree Gully – Annual Business Plan 2015–2016
Service area
Our Council
Service Home & Community Care (HACC) Immunisation
Examples/details Respite and Carer Support program; Lifestyle Links; Home Assist; Aboriginal Elders program Scheduled children’s and high school vaccinations Community Grants program; Senior Citizen of Awards, sponsorships and grants the Year; Australia Day Awards; Youth Sports & Cultural Sponsorship program Youth participation planning Provision of programs and services for young and programs people through youth development program Jubilee, Holden Hill, Surrey Downs and Community and Greenwith community centres; community neighbourhood programs and activities; crime prevention development/planning programs, community transport service; volunteers program Community education Road & Cycle Safety Centre; dog obedience training; outdoor environmental classroom Community engagement A continuous process providing residents and other stakeholders the opportunity to have a greater say in what happens in the City and to be more active in the decision making process Rates Setting and collection of rates; preparation of annual budgets and LTFP Governance Policy development and review; Council meetings and committees, agendas, minutes, reports Justice of the Peace Service coordinated by Council and voluntarily operated by appointed Justices of the Peace
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Service area Our Essentials
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Service By-laws, permits and access control Animal and pest control
Examples/details Permits to light fires and gain access to Council reserves; enforcement of by-laws Control of rodents and European wasps; dead animal collection from public spaces Control of flammable growth Advice to residents on fire risk management; and fire prevention oversee implementation of works program associated with Strategic Bushfire Management Plan Parking control Enforcement of State Government parking laws and private parking agreements; school patrols; issuing of expiation notices Dog control and Dog registration; capture and management of management stray dogs; investigation and management of dog attacks Environmental health Food safety and public health inspections including beauty and personal grooming premises, public swimming pool and spa facilities, aged care facilities, child care centres, restaurants and cafes Effluent and stormwater Community Wastewater Management System drainage maintenance (CWMS), water capture, treatment and reuse Waste management and Domestic kerbside collection; hard rubbish recycling collection; Envirocare Sunday and kerbside organics collection; mobile phone recycling; litter control; maintenance and emptying of public bins Development assessment Provision of planning, building and and compliance services compliance related services. These include the administration of the Development Act 1993 and Development Regulations 2008, the Development Plan, Building Code and other relevant standards
City of Tea Tree Gully – Annual Business Plan 2015–2016
Service area
Service Infrastructure, roads, footpaths and shared use paths
Cemeteries
Traffic management and street signage Community halls and buildings Open space development and maintenance Lighting
Our Leisure & Play Library
Community events and celebrations Recreational centres, facilities and sporting programs Arts centre, exhibition spaces and cafes
Examples/details Maintenance of bus shelters; construction and maintenance of footpaths on local streets; construction and maintenance of shared use paths; construction and maintenance of local roads; public conveniences; street sweeping and litter bins Management of leasing and licensing of burial sites and memorials through third party contractor; maintenance of cemetery grounds at Hope Valley and Golden Grove Installation of traffic control devices, road name and traffic control signage Management of community buildings and facilities, including construction, maintenance, leasing and hiring; graffiti removal Planning, planting and maintenance of reserves, ovals, gardens, verges and streetscapes; street tree planting and maintenance; weed control Upgrading existing lighting and installing new lighting, including reserve lighting, sports field, court and car park lighting Lending of reading and audio-visual material; internet training; local history services; children and youth programs Movies@thepark, Carols@thepark, Ausday@ thepark, Youth Art Exhibition and Competition Waterworld Aquatic Centre; Burragah, Turramurra and Golden Grove Recreation Centres; sports grounds; tennis and netball courts Golden Grove Arts Centre; Library foyer exhibition space; HIVE 12–Twenty Five; Gallery 1855
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Service area
Service Cycling and walking trails, dog parks, BMX tracks
Examples/details Goldenfields Reserve, Tails Trails dog park; shared use paths
Fees apply for some services. Please refer to our fees and charges register available on our website at www.teatreegully.sa.gov.au for more details.
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City of Tea Tree Gully – Annual Business Plan 2015–2016
Project priorities for the year Capital works – programs and projects Note: The figures in the following table represent Council’s contribution to these projects (net of grants, third party contributions and asset trade-ins). Project/program $ $ Net cost $ Unsealed footpaths 481,000 • Kings Avenue, Golden Grove – from #5 to junction 15,000 with Eastleigh Avenue • Eastleigh Avenue, Golden Grove – from junction 19,000 with Kings Avenue to Yale Avenue • Cobbler Creek, Golden Grove – from opposite #28 32,000 Eastleigh Ave to first bridge • Emanuel Drive, Salisbury Heights – from Target Hill 67,000 Road to Council boundary • Target Hill Road, Salisbury Heights – from Green 12,000 Valley Drive west to bus stop • Mulkarra Street, Ridgehaven – west to bridge 17,000 • Perseverance Road, Tea Tree Gully – from Dowding 15,000 Terrace south to bus stop • Kingfisher Reserve, Modbury Heights – from pump 55,000 house near Dresden Road north to Noritake Road 15,000 • Cobbler Creek, Golden Grove – from SA Water pump house parallel with St Buryans Crescent to footbridge • Huppatz Plantation, Wynn Vale – from Surrey Farm 11,000 Drive to Triller Court • Huppatz Plantation, Wynn Vale – from Triller Court 11,000 to playground • Hamilton Road, Fairview Park – adjacent to the golf 58,000 course from Grenfell Road to golf course entrance • Lyons Road, Holden Hill – northern side from 154,000 Chrysler Drive to Lower North East Road Jubilee Way, Wynn Vale - tennis court resurface 35,000 Various bus stop hardstand/shelter upgrades 150,000
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Capital works (continued) Project/program New footpaths • O-Bahn shared use path replacement • Tristania Terrace, Dernancourt – playground reserve opposite Birch Grove to Fir Place • Tristania Terrace, Dernancourt – Parsons Road to Birch Grove • Doradillo Avenue, Modbury – Grenache Avenue to end (shared use path) • Eucalypt Parade, St Agnes – Wild Oak Grove to Sandalwood Drive • Hotham Street, Hope Valley – Kenning Road to Leeds Avenue • Eaglehawk Road, Modbury – Plover Avenue to Kestral Way • Dernancourt Avenue, Fairview Park – Coondada Avenue to Mintanta Road • Neale Street, Tea Tree Gully – #6 to North East Road Traffic management – various signs Corporate signage and rebranding Plant – vehicles and major plant Hardware and software system enhancements – various projects • ICT asset renewal • Our assets – Managing Assets through Capability and Knowledge (MACK) Road reconstruction/resealing/road kerbing • Road resealing • Bowhey Court, Redwood Park – Landal Boulevard to end • Coleman Avenue, Redwood Park – Trevithick Crescent to Burford Crescent • Coleman Avenue, Redwood Park – Trevithick Crescent to Grenfell Road • Papps Court, Redwood Park – Landal Boulevard to end 26
City of Tea Tree Gully – Annual Business Plan 2015–2016
$
$
Net cost $ 400,000
100,000 70,000 60,000 30,000 50,000 18,000 12,000 40,000 20,000 350,000 100,000 1,700,000 840,000 340,000 500,000 4,000,000 600,000 7,800 51,800 27,100 8,100
Capital works (continued) Project/program • Paxton Court, Redwood Park – Trevithick Crescent to end • Smith Court, Redwood Park – Landal Boulevard to end • Dickerson Way, Redwood Park – Harper Street to Brassington Avenue • Harper Street, Redwood Park – Coleman Avenue to Dickson Way • Nepean Street, Redwood Park – Minnamurra Drive to Cronulla Drive • Penrith Street, Redwood Park – Minnamurra Drive to Kirrawee Drive • Eva Avenue, Redwood Park – Kincumber Drive to Watson Street • Delray Avenue, Holden Hill – Lambert Avenue to Grand Junction Road • Georgia Court, Holden Hill – Lambert Avenue to end • Hope Avenue, Holden Hill – Riddell Road to end • Riddell Road, Holden Hill – Grand Junction Road to Lambert Avenue • Pleasant Grove, Holden Hill – Delray Avenue to Vale Avenue • Braeside Avenue, Holden Hill – Vale Avenue to Lambert Avenue • Braeside Avenue, Holden Hill – Vale Avenue to Grand Junction Road • Lambert Avenue, Holden Hill – Delray Avenue to Georgia Court • Pleasant Grove, Holden Hill – Vale Avenue to Lambert Avenue • Vale Avenue, Holden Hill – Riddell Road to Delray Avenue
$ 19,700
$
Net cost $
7,500 23,300 25,400 11,100 16,200 61,600 51,300 5,100 10,500 56,200 32,800 21,300 37,600 54,500 20,700 50,400
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Capital works (continued) Project/program • Road reconstruction and renovation • Naretha Street, Holden Hill – North East Road to Tarton Road • Siesta Street, Holden Hill – Aurama Street to Gentilly Street • Wecoma Street, Holden Hill – Lorilet Street to Gentilly Street • Honeyeater Court, Wynn Vale – #4 to #6 • Barmera Avenue, Hope Valley – Pope Crescent to Waikerie Avenue • Golden Grove Road, Golden Grove – (Para Valley Road disposal) 36m east of Brooklyn Chase to Golden Grove) • Ellis Street, Tea Tree Gully • Casemate Street, Highbury – new kerb, gutter and seal • Kevin Road, Modbury – Crozier Avenue to end • Bentley Reserve, Holden Hill – carpark rehabilitation • Purdom Road, Gould Creek • Burg Road, Gould Creek • Falkenburg Road, Golden Grove • Roads to Recovery • Ladywood Road, Modbury North – Montague Road to #25 • Ladywood Road, Modbury North – Dakara Avenue roundabout to Karalta Court • Ladywood Road, Modbury Heights – Milne Road to Sandpiper Court • Kelly Road, Modbury – North East Road to Wright Road • Delray Avneue, Holden Hill – Grand Junction Road to Pleasant Grove • Elizabeth Street, Tea Tree Gully – North East Road to Milne Road 28
City of Tea Tree Gully – Annual Business Plan 2015–2016
$
$ 1,800,000
590,000 185,000 280,000 52,000 305,000 32,000
140,000 36,000 80,000 50,000 10,000 15,000 25,000 1,600,000 200,000 190,000 560,000 250,000 85,000 160,000
Net cost $
Capital works (continued) Project/program • Greenwith Drive, Golden Grove – seal change to Seaview Road • Lydia Avenue, Surrey Downs – seal change east of Colline Street to Tanya Street City beautification and tree screen replacement and landscape rectification • Green Valley Drive, Greenwith – Reordan Drive to Reordan Drive • The Golden Way, Golden Grove – Cobbler Creek to Slate Creek • Tasman Reserve, Gilles Plains • Lower North East Road, Dernancourt – River Torrens to Gaskmore Way to bus stop 29 • Keithcot Farm Drive, Wynn Vale – northern side (opposite O’Leary Place) to Hillendale Drive to Endeavour Drive • Seymour Avenue, Modbury • The Golden Way, Greenwith – Polar Court to Golden Grove Road • Roundabouts landscaping upgrade, various locations • Hazel Grove, Ridgehaven – streetscape and parkland buffer plantings • Lake View Reserve, Highbury • O-Bahn Linear Park North, Holden Hill Open space and playgrounds • Lake View Reserve, Highbury • Martindale Reserve (Laburnum), Golden Grove • Dresden Reserve, Modbury Heights* • Tasman Reserve, Gilles Plains • Kestral Reserve, Modbury Heights* • Vostock Reserve, Modbury North • Lambert Avenue, Holden Hill • Waterford Reserve, Dernancourt • Civic Park works upgrade stage 1* • Contribution from grants
$ 70,000
$
Net cost $
85,000 1,140,000 80,000 85,000 43,000 123,000 170,000
140,000 155,000 100,000 100,000 82,000 62,000 710,000 30,000 80,000 30,000 50,000 105,000 35,000 40,000 40,000 625,000 -325,000
City of Tea Tree Gully – Annual Business Plan 2015–2016
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Capital works (continued) Project/program Fencing • New headwall fencing to replace unsafe permapine rails, Council-owned fences and shared costs for replacement fences Park furniture • Replacement of picnic tables, barbecues and park benches Drainage construction • Dawson Reserve creek rehabilitation works • Dry Creek flood protection works • Cobbler Creek stormwater management plan works • Reynolds Avenue stormwater drainage extension Community Wastewater Management System • North Boulevard, Tea Tree Gully • Grenfell Road, Fairview Park • Grenfell Road, Banksia Park • Manhole rehabilitation (various) • Elinga Street diversion Footbridge refurbishment program • Cobbler Creek West (spillway) pedestrian bridge reconstruction • Cobbler Creek East (Citronelle) pedestrian bridge reconstruction • Various bridge works Buildings • Operational buildings • Stage 1 – replacement of carpet tiles in Library relaxed reading area • Recreational buildings • Asset replacements at various sites as per Infrastructure Asset Management Plan • Community buildings • Asset replacements at various sites as per Infrastructure Asset Management Plan • Heritage building conservation works at Hope Valley Institute 30
City of Tea Tree Gully – Annual Business Plan 2015–2016
$
$
Net cost $ 150,000
150,000
20,000 20,000 340,000 45,000 50,000 45,000 200,000 200,000 30,000 50,000 35,000 40,000 45,000 50,000 20,000 20,000 10,000 1,017,000 20,000 20,000 38,000 38,000 136,000 36,000 100,000
Capital works (continued) Project/program • Sporting buildings • Asset replacements at various sites as per Infrastructure Asset Management Plan • Amenities buildings • Asset replacements at various sites as per Infrastructure Asset Management Plan • Other • DDA Action Plan building upgrades program • Asbestos removal and replacement program • Roof safety improvement program • Golden Grove Recreation & Arts Centre • Fire separation/compartmentation upgrade • Income fire separation • Theatre rigging, lighting, platform upgrade stage 2 • Burragah Recreation Centre • Installation of rubber sports flooring to stadium Environmental initiatives – revolving greenhouse fund • Variable speed drive pump at Waterworld • Lighting at Civic Centre Water • Irrigation upgrade • Illyarrie Oval irrigation replacement/upgrade • Replacement of irrigation controllers at various locations • Various irrigation systems throughout the city • Recycled water • Asset renewal and upgrades • Water connections to residential properties at Settlement and Parkwood developments Other assets • Library assets – magazines and books • Other minor assets including recreation TOTAL (net cost)
$
$ 88,000
Net cost $
88,000 25,000 25,000 270,000 150,000 70,000 50,000 365,000 250,000 -125,000 240,000 75,000 75,000 75,000 25,000 50,000 640,000 250,000 120,000 80,000 50,000 390,000 140,000 250,000 241,000 166,000 75,000 12,639,000
To address community feedback in relation to the possibility of upgrading a number of additional * Projects are subject to finalisation of Modbury Heights Precinct Plan
City of Tea Tree Gully – Annual Business Plan 2015–2016
31
Additional capital works (continued) parks or roadside verges and/or entrance gateways, an additional rate increase of 1.2% above the LTFP rate increase has been included. The projects funded from this increase are listed below.
Project/program City Beautification • Emma Reserve, Modbury Heights* • Gifford Reserve, St Agnes • Gunda Road, Banksia Park • Steventon Drive • Grenache Reserve, Modbury • Elizabeth Street, Banksia Park • Milne Road, Banksia Park • Hamilton Road, Fairview Park • Civic Park upgrade
$
Net cost $ 801,000
120,000 35,000 80,000 70,000 98,000 120,000 30,000 105,000 143,000
* Projects are subject to finalisation of Modbury Heights Precinct Plan
Project/program Grant funding received for playgrounds • Canopus Reserve, Hope Valley • Illyarrie Reserve, Surrey Downs • Nagle Reserve, Fairview Park • Shannon Reserve, Banksia Park • Fairview Park Reserve, Fairview Park • Cronulla Reserve, Redwood Park • Bell Reserve, Highbury
50,000 200,000 100,000 75,000 75,000 50,000 50,000
Project/program Additional projects to be determined
$ 225,000
32
City of Tea Tree Gully – Annual Business Plan 2015–2016
$
Net cost $ 600,000
Net cost $ 225,000
Infrastructure Asset Management Plans We have developed and adopted several Infrastructure Asset Management Plans (IAMPs), which detail information about assets, including actions to provide an agreed level of service in the most cost-effective manner. The plans define which services are to be provided, how the services will be provided and what funds are required to support them for the next ten years. IAMPs are one of a number of key components of the Long-Term Financial Plan. Providing infrastructure services in a sustainable manner requires the matching and managing of service levels, risks, projected expenditures and financing, at least for the first few years of the Asset Management Plan and ideally over the 10-year lifespan of the LongTerm Financial Plan. We aim to develop options, costs and priorities for future services in consultation with the community. At all times we seek to match the perceived service needs of the community with our ability to fund them, hence optimising community benefits within budgetary constraints. Infrastructure asset management plans have been developed for roads, footpaths, buildings, stormwater, community wastewater and the Waterworld Aquatic Centre. The Roads IAMP proposes the resurfacing of roads using asphaltic concrete (hotmix). It is desirable to resurface roads at the optimum time in their life cycle to protect the underlying
pavement. Accordingly, Council will need to continuously refine and adjust the Roads IAMP and the Long-Term Financial Plan in order to best manage our roads infrastructure. The Footpath IAMP proposes the ongoing renewal of unsealed footpaths through reserves. Most of the sealed footpath network is in a relatively good condition. Council will continue to construct sealed footpaths and off-road cycle paths to expand pedestrian and cycling networks. The Buildings IAMP requires the conducting of inspections of Council’s assets, especially those nearing the end of their useful life, to ascertain the required budget allocation to best manage these assets. Council’s stormwater and community wastewater assets have long lives and it is predicted that only a small number of earthenware pipes will need replacement during the life of this plan. However, the pipe networks are buried and so, although we have a general idea of their condition, we will need to continue our regular inspections and budget for unforeseen events that may require replacement works to pipes or pits. The Waterworld Aquatic Centre was recently refurbished but daily maintenance is of course still required to ensure healthy water. Council will continue to explore options to reduce energy consumption and costs at the centre. Full details of the IAMPs are available on our website at www.teatreegully.sa.gov.au
City of Tea Tree Gully – Annual Business Plan 2015–2016
33
Measuring performance – objectives for the year Strategic Objective 1: Build physical infrastructure that supports the future needs of our community Measures/indicators • Capital works priorities supported by annual budget allocations and reflected in the LongTerm Financial Plan with over 90% of initial capital project bids supported • Precinct plans developed for key recreation, cultural and community hubs • Implementing approved recommendations regarding fair and equitable access to and use of Council facilities Tea Tree Gully Township, Modbury Heights and Modbury Sporting Complex Precinct Plan • Long-term infrastructure and property needs are identified; actions from the adopted Land Strategy are being implemented, including the O-Bahn Reserve and Valley Road • Civic Park area plan finalised and stage one of upgrade works commences.
Strategic Objective 2: Create business and employment opportunities through innovative economic development Measures/indicators • Tourism Action Plan implemented • Continuing collaboration in the delivery of the National Broadband Network • Continue to work collaboratively with the Tea Tree Gully Business Enterprise Centre to develop and promote business opportunities within the City.
Strategic Objective 3: Provide diversity in housing Measures/indicators • A development plan for Modbury is currently with the Minister for approval.
Strategic Objective 4: Promote a sustainable living environment Measures/indicators • The Climate Action Plan is implemented ongoing: various lighting initiatives have been implemented and funding is approved for hot water upgrades • Surplus recycled water is being distributed to the community at a number of school and club sites.
34
City of Tea Tree Gully – Annual Business Plan 2015–2016
Strategic Objective 5: Link our community through effective transport systems
Strategic Objective 7: Pursue leadership excellence
Measures/indicators
• Our strategic management plans are up to date in accordance with their nominated review periods – ongoing
Measures/indicators
• The pedestrian network has been further completed in accordance with the Strategic Footpath Network Plan • All projects completed in accordance with the Local Area Bicycle Plan • All works have been completed in accordance with approved budgets • Working with Community Passenger Network (Playford, Salisbury and Tea Tree Gully) to provide transport services to Home and Community Care clients within the City.
Strategic Objective 6: A diverse population
• A Training and Development Plan for Elected Members is implemented annually – ongoing • Financial sustainability is managed in accordance with Local Government Association indicators – we are on track to meet the relevant indicators • Reach a target result of “at least 50% satisfied to very satisfied” in the annual community survey – level achieved is currently 68%.
Strategic Objective 8: Foster family and community development
Measures/indicators • We will celebrate our community’s cultural diversity with various high-profile events to be held within the City • We will continue to lobby key agencies to support projects and infrastructure required for planned population growth in particular for works in the Modbury Regional Centre Precinct.
Measures/indicators • All recommended actions set by the Ageing Strategy Action Plan were completed – these were 80% achieved this year to date • Council’s Strategic Management Bushfire Management Plan is reviewed annually with 100% of the identified actions implemented • Home and Community Care Community Reference Group has exceeded its target of five meetings per annum, averaging one per month.
City of Tea Tree Gully – Annual Business Plan 2015–2016
35
Strategic Objective 9: Increase participation in entertainment, recreation, leisure and the arts Measures/indicators • All actions recommended in the Open Space Strategy and the related Works Action Plan have been implemented or are on target for implementation • Following community feedback and in response to trends in learning and technology, we have introduced changes to
36
some programs; for example, we introduced a new program recently that allows sharing photos via a smart device • Advice was provided to sporting and leisure clubs, including information on the recently endorsed Leases and Licences Policy.
Reporting We monitor our processes in relation to these measures/indicators on a quarterly basis through formal reporting to Elected Members and the community.
City of Tea Tree Gully – Annual Business Plan 2015–2016
Funding the Annual Business Plan We are aiming for an operating surplus of $4.163 million in 2015–2016. This surplus (i.e. the difference between operating revenue and expenses for the financial year) will help us to achieve an important goal of our Long-Term Financial Plan (LTFP), which is to reduce debt.
their life span wherever this is cost-effective and practical. However, when we can no longer keep these assets functioning at a serviceable level, we replace or upgrade them to ensure these assets continue to remain useful to our community.
Our long-term financial sustainability depends on us ensuring that on average, over time, our expenses are less than revenue, and that we continually identify opportunities to help reduce our existing debts.
The Asset Sustainability Ratio (ASR) is a measure of whether we are renewing or replacing existing non-financial assets at the same rate that our overall stock of assets is wearing out (being depreciated). This ratio is calculated by measuring capital expenditure on asset renewal or replacement, relative to the recorded rate of depreciation for the same period. Our target for 2015–2016 is for the cost of renewal or replacement (after deduction of any income from the sale of old assets) to be between 90% and 110% of depreciation when averaged over a period of three years.
Funding the Annual Business Plan Our Financial Sustainability Policy is an important consideration in preparing this Annual Business Plan. The key parts to this policy are: Operating Surplus Ratio The Operating Surplus Ratio (OSR) is a key measure of financial sustainability. It shows the operating surplus (or deficit) as a percentage of general and other rates, excluding rate rebates and revenue from the Natural Resources Management (NRM) Levy.
Debt limitation In 2015–2016 we will reduce our debt level by $2.273 million. To enable debt reduction we have:
Funded asset and service provision costs
• Budgeted to deliver a modest surplus
The full cost of providing services to our community is included in our Annual Budget and Long-Term Financial Plan.
• Capital expenditure to $15.96 million
We work hard to maintain existing assets, for example, playground equipment or community buildings, to maximise their value to us during
• Funded our future capital expenditure from depreciation, and continuing to review our operations to deliver the best services in the most cost-effective manner
City of Tea Tree Gully – Annual Business Plan 2015–2016
37
• Capped and where possible reduced our discretionary expenditure increases in 2015– 2016. We believe it is appropriate to have a certain level of debt, particularly given the extensive portfolio of assets we hold. We have funded the upgrades of intergenerational assets completed in recent years, such as the Waterworld Aquatic Centre, Montague Road and various sporting and community club upgrades, by using a combination of variable and fixedrate borrowings, as outlined in our Treasury Management Policy. We also monitor the Net Financial Liabilities Ratio (NFLR), which is our net financial liabilities expressed as a percentage of our total operating income.
Review of assets We review our assets regularly to make sure they are continuing to meet strategic planning objectives. If we consider that any assets are surplus to Council’s or the community’s needs, we will seek community views on selling them. Any money received is then used to fund capital or refurbishment works in line with our Land Strategy. In purchasing new assets, we consider: • Our current operating surplus or deficit
38
• Any additional depreciation, maintenance costs and interest expense on borrowings • The impact of purchase on our operating surplus or deficit position • Any need to increase Council rates to fund the purchase and/or ongoing maintenance costs • The age, life expectancy, suitability and service potential of any asset • The discounted cash flow analysis, where appropriate. Funds received from any sale of our land or buildings are to be reinvested in line with our Land Strategy. Our Council’s Long-Term Financial Plan includes provision to upgrade and/or build a new Depot facility in the future years. Whilst funding is not allocated in this Annual Business Plan if a strategic opportunity arises our Council may after considering a Section 43 prudential report bring this investment forward.
Council rate increase forecast This Annual Business Plan includes a recommended increase in general rate revenue that reflects the cost of providing existing services at a defined level, as well as the costs outlined in the Asset Management Plans and Long-Term Financial Plan.
City of Tea Tree Gully – Annual Business Plan 2015–2016
The rate adjustment takes into account the impact of costs to Council from a combination of all the following factors: • Consumer Price Index (CPI) • Local Government Price Index (LGPI) • Enterprise bargaining agreements (EBs) • Increases in depreciation, maintenance and interest expenses associated with capital works that have been carried out over recent years. After consultation with the community, our Elected Members will determine if the direction and focus of this plan is appropriate, and to what extent our proposed initiatives or standards of service deserve community support.
City of Tea Tree Gully – Annual Business Plan 2015–2016
39
Local government financial sustainability indicators These are the indicators that are required under the Local Government Act 1999, in order to promote greater financial sustainability and transparency in local government. Actual Current Original Budget forecast budget FYE FYE FYE FYE 2016 2014 2015 2015 $’000 $’000 $’000 $’000 4,163 3,578 5,035 4,281 Operating Surplus Is the operating surplus (deficit) before capital amounts 6.0% 5.2% 6.1% 6.7% Operating Surplus Ratio (OSR) Rates - general and other, less Natural Resources Management (NRM) levy This ratio expresses the operating surplus as a percentage of general and other rates, net of NRM levy 28,547 33,665 30,820 34,165 Net Financial Liabilities (including land held for resale) Net financial liabilities are defined as total liabilities less financial assets (excluding equity accounted investments in Council businesses) and including non-current assets held for sale Net Financial Liabilities Ratio (NFLR) (including 34% 41% 37% 43% land held for resale) Total operating revenue less NRM levy 28,547 37,919 33,282 37,284 Net Financial Liabilities (excluding land held for resale) Net financial liabilities are defined as total liabilities less financial assets (excluding equity accounted investments in Council businesses) and excluding non-current assets held for sale
40
City of Tea Tree Gully – Annual Business Plan 2015–2016
Net Financial Liabilities Ratio (NFLR) (excluding land held for resale) Total operating revenue less NRM levy Interest cover ratio Net interest expense Total operating revenue, less NRM levy and less investment income Asset Sustainability Ratio (ASR) Net asset renewals Net asset renewal expenditure is defined as net capital expenditure on the renewal and replacement of existing assets, and excludes new capital expenditure on the acquisition of additional assets Fiscal balance Net lending position or net borrowing requirement in uniform presentation of finances
Actual
34%
Original budget FYE 2015 $’000 46%
Current forecast FYE 2015 $’000 40%
2.7%
2.9%
2.5%
2.9%
100%
103%
106%
125%
4,735
4,840
3,849
6,890
Budget FYE 2016 $’000
FYE 2014 $’000 47%
City of Tea Tree Gully – Annual Business Plan 2015–2016
41
Notes on financial indicators 1. Operating surplus An operating surplus occurs when the operating revenue is more than the operating expenses for the period. An operating deficit occurs when revenue is less than expenses. Our result indicates that operating revenue will be enough to cover operating expenditure. In 2015–2016 we expect to deliver a modest operating surplus of $4.163 million, in line with the targets set out in the LTFP. 2. Operating Surplus Ratio (OSR) The operating surplus ratio is the operating surplus or deficit expressed as a percentage of general and other rates, excluding rate rebates and revenues from the NRM levy. Our OSR is within the target of our Financial Sustainability Policy. 3. Net Financial Liabilities Ratio (NFLR) The NFLR is the net financial liability expressed as a percentage of total operating revenue excluding Water Catchment/NRM levy income. We have a NFLR target of 0% to 50%. The target of 50% and budgeted result of 34% for 2015–2016 are within the Local Government Association target of 100%. Our Long-Term Financial Plan (LTFP) provides the framework to reduce our net financial liabilities over the forecast period. This 42
reduction will, in turn, return the NFLR to a level within our target range. Strategies that have been and will continue to be considered to reduce debt include a longerterm reduction in capital expenditure. Target ranges have been set as part of the adoption of the LTFP and will be reviewed annually to make sure the targets remain appropriate. 4. Asset Sustainability Ratio (ASR) This ratio indicates whether a council is renewing or replacing existing non-financial assets at the same rate that its overall stock of assets is wearing out (being depreciated). It is calculated by measuring capital expenditure on asset renewal or replacement, relative to the recorded rate of depreciation of the assets for the same period. We have invested significantly in the renewal of our non-financial assets over the last five years, delivering capital works of $85 million. Our 2015–2016 budget includes capital renewal works of $14.04 million. This represents an ASR of 100%, which is within our target range set as specified in the LTFP. We have reviewed the IAMPs in the context of the Long-Term Financial Plan and have considered strategies to help us maintain performance within the targeted range. We will also continue to review the ASR target range when reviewing the LTFP to ensure the set targets remain appropriate.
City of Tea Tree Gully – Annual Business Plan 2015–2016
Budget components Our annual budget is made up of various components: • Income statement • Balance sheet • Capital budget (as outlined in Section 4: Project priorities for the year) • Cash flow statement • Statement on changes in equity. These are discussed in the following pages.
City of Tea Tree Gully – Annual Business Plan 2015–2016
43
Analysis of operating budget Budgeted Income Statement For the financial year ended 30 June 2016 Budget components
Income Rates Statutory charges User charges Grants & subsidies Investment income Reimbursements Other revenues
Budget FYE 2016 $’000
Original budget FYE 2015 $’000
71,021 2,470 3,600 6,582 198 173
69,500 2,387 3,297 5,620 100 97
1,281
2,004
85,325
83,005
34,035 33,492 1,860
33,167 33,108 1,960
11,775 Depreciation Total expenses 81,162 Operating surplus/(deficit) before capital amounts 4,163 Net gain/(loss) on disposal or revaluation of assets – Capital grants 1,300
11,192
Total revenues
Current forecast FYE 2015 $’000
Actual FYE 2014 $’000
69,106 2,419 3,354 6,038 183 173 2,798 84,071
65,772 2,351 3,716 6,301 166 51 1,900 80,257
32,278 33,906 1,660 11,192 79,036 5,035 (675) 446 255 5,061
30,844 32,306 1,841 10,985 75,976 4,281 469 682 267 5,699
Expenses
Employee costs Materials, contracts & other expenses Finance charges
Physical resources received free of charge
255
255
5,718
4,242
Net surplus/(deficit) resulting from operations
44
79,427 3,578 – 409
City of Tea Tree Gully – Annual Business Plan 2015–2016
Operating revenue
provided annually in July.
1. Rates
3. User charges
For 2015–2016 total rate revenue is projected to be $71.02 million. This is an increase of $1.9 million (or 2.8%) over the previous year.
User charges are fees that relate mainly to the recovery of the costs of delivering some of Council’s services. These are fees charged for the use of community facilities and recreation centres.
We propose a general rate increase of 2.7% for 2015–2016. This is based on the cost of providing existing services and the projected costs included in IAMPs and the LTFP. Our minimum rate will need to increase by 2.7% to $1,092 for 2015–2016. In addition, we expect to receive up to a 0.5% increase in rates revenue due to new developments, subject to confirmation from the Valuer-General. Council’s differential rating system was fully implemented in 2014–2015. A total of 14.7% of our general rate revenue will be derived from our commercial, industrial and vacant land use, with the remaining 85.3% of rate revenue to come from residential, primary production and other land use. 2. Statutory charges Statutory charges are fees for regulatory services, such as permits and licences, or the regulation of an activity. They include Development Act fees, parking fines and dog registration fees. The amount for these fees is set by the state government. Notification of these fees is
User charges in 2015–2016 are projected to increase by $246,000 compared with the previous year. In line with the fees and charges review increased as necessary to accommodate rises in costs associated with the delivery of these services. 4. Grants and subsidies This item covers grants and subsidies from all sources, except amounts specifically received for new or upgraded assets. Total grant revenue is budgeted to increase by $544,000 to $6.582 million. 5. Investment income Interest earned on funds invested is estimated at $198,000 in 2015–2016 as Council offsets cash against borrowings. 6. Reimbursements Reimbursements are payments for work Council has performed as an agent for others; for example, employee services we have provided to other councils. We estimate a reimbursement revenue of $173,000 in 2015– 2016.
City of Tea Tree Gully – Annual Business Plan 2015–2016
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7. Other revenues
9. Materials, contracts and other expenses
This is revenue not classified in items 1 to 6 above. Of the estimated $1.281 million of other revenue in 2015–2016, $500,000 is for estimated workers’ compensation insurance recovery and $100,000 is the estimated amount for sickness and accident reimbursements.
Materials cover payments for physical goods, such as consumables, water and energy. Contractual services are payments for external service providers, including labour, materials or subcontractors who are hired under contract.
Operating expenses 8. Employee costs Employee costs include all labour-related expenses, such as wages, salaries, and oncosts (allowances, leave entitlements and employer superannuation). Employee costs are budgeted to increase by $1.75 million. This is primarily attributable to an increase associated with our enterprise bargaining agreement and grade increments. Over the last three years Council has achieved economies by reducing payroll costs. This has included a significant reduction in the full time equivalent (FTE) number of employees.
Other expenses are those other than the costs of employees, materials and contractual services. We forecast the cost of materials, contractual services and other expenses to decrease by $414,000 in 2015–2016. The budget allows for a number of key known cost pressures for 2015–2016. We have been able to absorb these cost pressures through Council’s tighter spending approach in other areas. 10. Finance charges Finance charges are the cost of financing our activities through borrowings or financial leases. We forecast finance charges of $1.86 million (5.2%) in 2015–2016.
In 2015–2016 we have included a total 386 FTEs in the budget. This represents no change to the number of FTEs in comparison to the financial year 2014–2015.
11. Depreciation
We allocate employee costs directly related to capital projects separately within the capital budget. This represents an additional sum of $1.1 million.
CBD is an accounting method that more accurately records the pattern of asset use than traditional straight-line depreciation. Typically, under CBD, less depreciation is
46
In 2009 we moved to consumption-based depreciation (CBD) to depreciate most of our assets.
City of Tea Tree Gully – Annual Business Plan 2015–2016
calculated at the beginning of an asset’s life and more at the end. In 2015–2016 our depreciation expense is forecast to be $11.775 million, an increase of $583,000.
City of Tea Tree Gully – Annual Business Plan 2015–2016
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Net outlays Notes to and forming part of the Financial Statements For the year ended 30 June 2016 Uniform Presentation of Finances Budget FYE 2016 $’000
Original budget FYE 2015 $’000
Income 85,325 83,005 Operating revenues Expenses (81,162) (79,427) Less operating expenses Operating surplus/(deficit) before capital 4,163 3,578 amounts Less net outlays on existing assets Capital expenditure on renewal and replacement 14,040 12,965 assets Less amounts specifically for renewal and replacement assets (11,775) (11,192) Less proceeds from sale of replaced assets (1,000) (1,000) Total net outlays on existing assets 1,265 773 Less net outlays on new & upgraded assets/changes in assets Capital expenditure on new & upgraded assets 1,925 1,000 Less amounts specifically for new or upgraded assets (1,300) (409) Less proceeds from sale of surplus assets (2,462) (2,626) Total net outlays on new & upgraded assets 1,837 (2,035) Net lending/(borrowing for financial year) 4,735 4,840
48
City of Tea Tree Gully – Annual Business Plan 2015–2016
Current forecast FYE 2015 $’000
FYE 2014 $’000
84,071
80,257
(79,036)
(75,976)
5,035
4,281
13,290
13,769
(11,192) (1,000) 1,098
( 10,985) (1,333) 1,451
1,037
1,506
(446) (503)
(682) (250)
88 3,849
574 2,256
Actual
1. Net outlays on existing assets We will spend $14.040 million on the renewal of existing assets. We aim to keep our level of spending in line with the IAMP forecasts. 2. Net outlays on new and upgraded assets We will spend $1.925 million on new and upgraded assets. We will factor the ongoing maintenance and depreciation expenses associated with capital expenditure on new and upgraded assets into our future budgets and updates of the LTFP. We will have surplus funds of $4.735 million in 2015–2016. A total of $2.273 million relates to 2015–2016 budget activities.
Financing strategy We have determined that borrowings will reduce in 2015–2016. Our borrowings, including finance leases, are projected to reduce to $23.406 million at the end of 2015–2016 while our net financial liabilities (including land held for resale) will also reduce by $2.273 million to $28.547 million at the end of 2015–2016.
Further financial information The following pages provide information on: • Budgeted cash flow statements • Budgeted balance sheet • Budgeted statement of changes in equity.
City of Tea Tree Gully – Annual Business Plan 2015–2016
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2015–2016 financial budget information Budgeted cash flow statement For the financial year ended 30 June 2016 Budget FYE 2016 $’000
Original budget FYE 2015 $’000
Current forecast FYE 2015 $’000
Actual FYE 2014 $’000
Cash flows from operating activities Receipts Operating receipts Investment receipts Payments Operating payments to suppliers & employees Finance payments Net cash provided by (or used in) operating activities
85,127
198
82,905 100
83,888 183
79,649 166
67,527 1,860 15,938
66,275 1,960 14,770
66,184 1,660 16,227
62,335 1,841 15,639
1,300 1,000 2,462
409 1,000 2,626
446 1,000 503
682 1,333 250
14,040 1,925 (11,203)
12,965 1,000 (9,930)
13,290 1,037 (12,378)
13,062 1,506 (12,303)
-
– –
– –
– –
2,273 (2,273) 2,462 2,205 4,667
2,214 – (2,214) 2,626 402 3,028
3,346 – (3,346) 503 1,702 2,205
7,381 416 (7,797) (4,462) 6,164 1,702
Cash flows from investing activities Receipts Grants specifically for new or upgraded assets Sale of replaced assets Sale of surplus assets Payments Expenditure on renewal/replaced assets Expenditure on new/upgraded assets Net cash provided by (used in) investing activities
Cash flows from financing activities Receipts Proceeds from borrowings New borrowing required Payments Repayment of borrowings Repayment of finance lease liabilities Net cash provided by (used in) financing activities Net increase/(decrease) in cash held Cash & cash equivalents at beginning of reporting period Cash & cash equivalents at end of reporting period
50
City of Tea Tree Gully – Annual Business Plan 2015–2016
Budgeted balance sheet For the financial year ended 30 June 2016 Budget FYE 2016 $’000
Original budget FYE 2015 $’000
Current forecast FYE 2015 $’000
FYE 2014 $’000
4,667 3,032
2,205 3,032 2,462 153 7,852
1,702 3,032 2,965 153 7,852
Actual
Assets Current assets Cash & cash equivalents Trade & other receivables Other financial assets - non-current assets held for resale Inventories Investments Total current assets Non-current assets Financial assets Infrastructure, property, plant & equipment Other non-current assets Total non-current assets
153 7,852
3,028 3,077 127 6,232
122 1,403,454 349 1,403,925
61 1,379,410 789 1,380,260
122 1,400,009 349 1,400,480
122 1,398,294 349 1,398,765
Total assets
1,411,777
1,386,492 1,408,332
1,406,617
-
Liabilities Current liabilities Trade & other payables Borrowings Short term provisions Total current liabilities Non-current liabilities Long term borrowings Long term provisions Total non-current liabilities Total liabilities
Net assets
9,491 917 2,803 13,211
9,034 954 2,424 12,412
9,491 917 2,803 13,211
9,491 917 2,803 13,211
22,489 699 23,188 36,399 1,375,378
26,766 719 27,485 39,897 1,346,595
24,762 699 25,461 38,672 1,369,660
28,108 699 28,807 42,018 1,364,599
340,953 5,718 1,023,685 5,022 1,375,378
334,840 4,242 1,002,491 5,022 1,346,595
335,892 5,061 1,023,685 5,022 1,369,660
330,193 5,699 1,023,685 5,022 1,364,599
Equity Accumulated surplus Year to date Asset revaluation reserve Other reserves
Total equity
City of Tea Tree Gully – Annual Business Plan 2015–2016
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Budgeted statement of changes in equity For the financial year ended 30 June 2016
Accumulated surplus Balance at end of previous reporting period Net result for year Transfers between reserves Balance at end of period Asset revaluation reserve Balance at end of previous reporting period Gain on revaluation of infrastructure, property, plant and equipment Balance at end of period Other reserves Balance at end of previous reporting period Transfers between reserves Balance at end of period Total equity at end June 2014
52
Budget FYE 2016 $’000
Original budget FYE 2015 $’000
Current forecast FYE 2015 $’000
FYE 2014 $’000
340,953 5,718 – 346,671
334,840 4,242 339,082
335,892 5,061 – 340,953
330,193 5,699 – 335,892
1,023,685 –
1,002,491 –
1,023,685 –
1,023,685 –
1,023,685
1,002,491
1,023,685
1,023,685
5,022 – 5,022 1,375,378
5,022
5,022 – 5,022 1,369,660
5,022 – 5,022 1,364,599
City of Tea Tree Gully – Annual Business Plan 2015–2016
–
–
5,022 1,346,595
Actual
What this Annual Business Plan and budget mean for rates How we set rates
current system.
When we set rates, our main point of reference is the Strategic Plan 2011–2015, and our new Strategic Plan which is being reviewed and will include extensive consultation with residents, business, interest groups, Elected Members and staff.
In November 2011, we decided to undertake community consultation, as required by Section 151 of the Local Government Act 1999, regarding a proposal to implement differential rates. The purpose was to make sure that our approach to rates is fair and equitable across our community, and that it will at the same time generate the income needed to achieve our strategic objectives and agreed service standards. After consulting with the community, we decided in February 2012 to adopt differential general rates as from 1 July 2012.
We also consider the current economic climate, including the outlook for inflation and unemployment, our debt reduction strategy, legislative changes, and the need to manage, maintain and improve our community’s physical infrastructure. We carefully consider the impact of rate rises on our ratepayers and recognise the importance of maintaining a balance between sharing the rate burden fairly among ratepayers and factoring in changes in the valuation of residential, vacant land, commercial and industrial properties. It is our policy to make sure that rents and leasing payments on our properties are not prohibitive for community groups and sporting bodies, who are the lifeblood of a vibrant community. For this reason, we may also offer concessions on rates.
Rating review In 2011 we undertook comprehensive rate modelling and analysis on alternative rating strategies and the impact on ratepayers of alternative rating systems compared to the
This review ensures that our rating strategies and structure rank highly against the principles of taxation and that the new rating structure and rate revenue contribution methodology complies with and exceeds our legislative requirements. This also ensures that our contribution methodology is considered best practice.
Differential rates Now fully implemented, our new differential rating strategy provides us with increased flexibility to accommodate movements in valuations that regularly occur in the market. This method allows us to raise rates at different levels to ensure that commercial and industrial sites continue to contribute appropriately to services that we provide, even though property market valuations in any
City of Tea Tree Gully – Annual Business Plan 2015–2016
53
category may fluctuate.
The entire community, including our
Definitions of land uses are prescribed by
commercial and industrial ratepayers, benefit
regulation and are categorised as follows for
from the many services and regulatory
rating purposes:
processes that we administer.
• Residential
Examples of our commitment to business and
• Commercial – Shops • Commercial – Office • Commercial – Other • Industrial – Light
economic development are evident in: National Broadband Network (NBN) high speed broadband network • We facilitated the work to connect 17,400 premises in the Modbury fibre-servicing
• Industrial – Other
area to the NBN high speed broadband
• Primary production
network (the highest number of connections in South Australia)
• Vacant land • Other.
• In February 2012 we launched the investnorthernadelaide.com.au website,
Differential rates better reflect consumption of
serving three northern councils, including
our services but can also be tailored to support other key objectives, such as economic or capital development, or to recognise the
our own, with state government co-funding • We organised Marketing On-line workshops held at North-Eastern Development
value of a specific aspect of land use. The differential rating strategy addresses all of our
Agency (NEDA) for our Council’s small
rating objectives.
and home-based businesses with the aid of Department of Further Education,
Apart from the more obvious services
Employment, Science and Technology
that benefit our whole community, such
(DFEEST) funding
as the maintenance of over 600 parks and reserves, footpaths, road maintenance
• We facilitated Department of Broadband,
and traffic management, we provide many
Communications and the Digital Economy
other community, recreational, health and
(DBCDE) and the NBN business and
environmental services.
community awareness events
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City of Tea Tree Gully – Annual Business Plan 2015–2016
• Cooperation with other councils on mutually
• We supported an application for federal DBCDE funding for a demonstration hub at Council’s library to raise community awareness of the potential benefits of the NBN
beneficial economic development programs • Developing Digital Economy Strategy for three northern councils with DFEEST cofunding
• We supported the launch of DFEEST’s e-Retail Management Diploma – Multichannel in our Council.
• Contributing to the ERA Digital Strategy (which was the impetus behind the NBN
Business Enterprise Centre (BEC)/North East Development Agency (NEDA)
rollout). Business and tourism development • Developing business and tourism attraction
• Provided ongoing financial and inkind support for small and home-based businesses in our City
opportunities • Researching how to attract innovative and
• Assisted NEDA with an application for federal DBCDE funding for training of personnel running small and home-based businesses to help them maximise benefits from the NBN • Assisted NEDA with an application under the federal Suburban Jobs Program for funding to build a small business incubation centre.
emerging industries to our City to exploit the added capability of the NBN • Promoting Council as a successful and innovative leader in business and economic development • Representing Council in key economic development forums, working groups, advisory committees and networks • Scoping proposed Business and Tourism
Economic development
Development Association for Tea Tree Gully
• Development of Business and Economic Development Strategy 2011–2015
Township
• Ongoing high-level lobbying of federal and state government agencies to include our Council in economic development programs
• Scoping proposed Business Leaders Group
• Participation in the Eastern Region Alliance (ERA) Economic Development Group
home-based businesses to build ongoing
to advocate our economic development • Developing a database of our small and mutually beneficial engagement.
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Although these initiatives and services may not yet be self-evident, all ratepayers will ultimately gain from the benefits they will bring. In relation to vacant land, we have numerous sites scattered throughout the suburbs that are vacant (i.e. unimproved). The differential rate will encourage the development of these vacant properties. The contribution methodology using differential rates is an integral component of our overall rating strategy. This method assists in achieving a number of our rating objectives, by: • Ensuring equity in rate distribution across the community by preventing inequitable shifts in rate responsibility • Minimising the impact of property valuation fluctuations while raising an equitable level of contribution from each land use sector; maintaining equity within differing communities and between communities • Recognising that communities where there is a greater consumption of services and resources rank higher in terms of the principles of taxation. The achievement of our rating objectives, as described above, provides a justification for our use of differential rates as opposed to alternative rating methodologies.
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City of Tea Tree Gully – Annual Business Plan 2015–2016
The table below shows the valuations and rates applied to the various land use categories and also the general revenue forecast for 2015–2016. Note these figures do not show rebates. In 2015–2016 we estimate we will provide $1.4 million in rebates. The majority of these rebates are mandatory as required under the Local Government Act. Further details of our rebates are included on page 50. Land use
Commercial office Commercial other Commercial shop Industrial light Industrial other Other Primary production Residential Vacant land Total
General rate revenue 2014–2015 $M 0.3 2.1 5.1 0.2 0.6 0.6 0.3 55.9 1.3 66.4
Valuation 2014– 2015 $M 55 339 836 24 95 149 82 13,587 150 15,317
General Rate Revenue 2015–2016 $M 0.3 2.2 5.2 0.2 0.6 0.6 0.3 57.4 1.3 68.1
Valuation 2015–2016 $M
General rate revenue % income 2015–2016
55 351 852 24 96 146 82 14,016 153 15.775
City of Tea Tree Gully – Annual Business Plan 2015–2016
0.4% 3.2% 7.6% 0.3% 0.9% 0.9% 0.4% 84.3% 2.0% 100
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Historical rates In 2012–2013 we declared differential rates for the first time. The following table summarises the rate in the dollar and minimum rate in comparison to previous years for each of the rating categories. Year 2010–2011 Minimum $920 $267,675 Minimum rate valuation threshold Rate in $ Residential $0.003437 Commercial – office $0.003437 Commercial – other $0.003437 Commercial – shop $0.003437 Industrial – light $0.003437 Industrial – other $0.003437 Other $0.003437 Primary production $0.003437 Vacant $0.003437
58
2011–2012 $980 $282,750
2012–2013 $980 $259,390
2013–2014 $1,024 $257,132
2014–2015 $1,064 $260,112
2015–2016 $1,092 $268,300
$0.003466
$0.00377813
$0.00398239
$0.00409054
$0.00407001
$0.003466
$0.00453376
$0.00557535
$0.00613581
$0.00610502
$0.003466
$0.00453376
$0.00557535
$0.00613581
$0.00610502
$0.003466
$0.00453376
$0.00557535
$0.00613581
$0.00610502
$0.003466
$0.00453376
$0.00557535
$0.00613581
$0.00610502
$0.003466 $0.003466
$0.00453376 $0.00377813
$0.00557535 $0.00398239
$0.00613581 $0.00409054
$0.00407001 $0.00407001
$0.003466 $0.00377813 $0.003466 $0.00566720
$0.00398239 $0.00696918
$0.00409054 $0.00818108
$0.00814002 $0.00814002
City of Tea Tree Gully – Annual Business Plan 2015–2016
During the same period, the increase in our community’s wealth has been mainly in the residential sector, driven by an increase in residential valuations. The following table shows the changes in rate revenue and valuation during the past five years. Rate revenue and variations Year Total valuation ($M) % Increase (decrease) in total valuation General rate revenue ($M)* % Increase in general rate revenue* Minimum rate % Increase in minimum rate
2010–2011 2011–2012 2012–2013 15,296 16,254 15,686
2013–2014 2014–2015 15,659 15,934
2015–2016 16,403
6.4%
6.3%
(3.4%)
(0.17%)
1.7%
2.96%
51.10
54.80
58.60
62.80
66.43
$68.10
5.3%
7.2%
6.9%
7.1%
5.8%
2.7%
$920 4.5%
$980 6.5%
$980 Nil
$1,024 4.5%
$1,064 3.9%
$1,092 2.7%
*Prior to allocation of rebates.
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Our primary source of income is Council rates, which make up 84% of our annual income. Our forecast sources of revenue for 2015–2016 are shown in the following pie chart.
Total Revenue $86 million
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City of Tea Tree Gully – Annual Business Plan 2015–2016
Average residential rate Our average residential rate for 2014–2015 was $1,465. It is estimated that the average residential rate in 2015–2016 will rise to $1,498, a 2.2% increase on the previous year.
Method used to value land The South Australian Valuer-General establishes the value of land in our City for rating purposes. The basis for valuation is the capital value of the land, including all improvements such as buildings and sheds. We believe this is the fairest way of distributing the rates burden across all ratepayers for these reasons: The equity principle of taxation requires that ratepayers of similar wealth pay similar taxes, and ratepayers of greater wealth pay more tax than ratepayers of lesser wealth. Property value is a fair indicator of wealth. A property’s capital value, which moves in line with the market value, is the best indication of its overall value. We believe the Valuer-General’s capital valuations are consistent across council areas and stable in terms of their basis of assessment
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We have adopted the valuations that the Valuer-General provided on 30 June 2015. If a ratepayer is dissatisfied with their valuation, they can object to the Valuer-General in writing, within 60 days from the date of their rates notice.
Trends in valuations and rate modelling Each year as part of our review of rating policy, anticipated movements in valuations are obtained for each rate category. The valuation trends for 2015–2016 reflect the impact of the subdued property market and indicate that valuations will generally experience modest movements across all property groups. A shortage of residential properties across all valuation levels is still considered to exist and low levels of new housing construction persists. Ongoing constraints on housing finance and lower levels of consumer confidence continue to impact sale values in this sector, however some minor improvement occurred during 2015.
the final Annual Business Plan. Based on advice from the Valuer-General, commercial and industrial property sales remained subdued with minimal activity at the top end of the market and limited activity through the middle to lower price ranges. Overall little valuation movement is expected. Vacant land valuation movements vary with some areas experiencing minor increases and others minor decreases for 2015–2016. An average increase of approximately (-1.94) per cent will impact across the area. This is due to an increase in the number of vacant land properties. Primary production properties valuation movements vary with some areas experiencing minor increases and others minor decreases for 2015–2016. An average increase of approximately 0.06 per cent will impact across the area.
Valuations are anticipated to remain fairly steady with some areas experiencing further minor increases and others minor decreases for 2015–2016. Average increases of approximately 3.18 per cent will impact most areas. Council has undertaken comprehensive rate modelling to assess the likely impact within each land category based on anticipated valuation movements prior to the adoption of 62
City of Tea Tree Gully – Annual Business Plan 2015–2016
Suburb Banksia Park Dernancourt Fairview Park Gilles Plains Golden Grove Gould Creek Greenwith Gulfview Heights Highbury Holden Hill Hope Valley Houghton Modbury Modbury Heights Modbury North Para Hills Paracombe Redwood Park Ridgehaven Salisbury Heights St Agnes Surrey Downs Tea Tree Gully Upper Hermitage Valley View Vista Wynn Vale Yatala Vale Total
FYE 2015 No. % Change of Properties Valuation 1,301 0.4% 1,439 .01% 1,420 3.5% 581 9.7% 3,979 4.4% 17 8.6% 3,421 0.1% 16 6.2% 2,549 2.5% 1,182 6.4% 2,789 0.8% 27 2.5% 2,002 0.8% 2,668 0.4% 2,242 3.6% 489 6.5% 8 0.0% 2,108 2.9% 1,625 1.7% 283 2.5% 1,685 2.0% 1,347 0.0% 1,311 0.3% 31 0.0% 558 5.1% 396 0.3% 3,117 0.1% 76 (0.5%) 38,178 1.9%
FYE 2016 No. % Change of Properties Valuation 1,306 4.41% 1,473 2.80% 1,433 4.84% 584 0.83 4,010 2.43% 15 -1.91% 3,422 2.02% 16 3.82% 2,570 3.45% 1,192 5.23% 2,805 3.5% 26 0.07% 2,055 3.78% 2,675 4.16% 2,248 4.22% 8 0.00% 2,113 0.47% 1,639 5.20% 290 7.18% 1,697 3.90% 1,351 3.96% 1,340 3.28% 30 3.33% 557 5.10% 394 3.75% 3,130 1.30% 80 2.21% 38,459 3.18%
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Growth Property valuations can increase or decrease if the land use of the property changes, for example, from residential to commercial, or if there has been any development on the property, including renovations. The change in valuation associated with these changes is referred to as ‘growth’. In 2015–2016 the changes in valuation due to growth is estimated to be about $0.4 million of additional rate revenue (growth income), an increase of 0.6%.
Council’s revenue-raising powers Council can charge rates on all land in their area except for exempt land which includes Crown Land, council-occupied land and other land prescribed in the Local Government Act 1999 (refer Section 147). The Act allows a council to raise revenue for its provision of services and facilities through a general rate, which applies to all rateable properties, or through differential general rates, which apply to classes of properties. A council can also raise separate rates for specific areas, services or charges. A council can raise revenue through the setting of fees and charges after considering the cost of the service provided and equity issues. We list the applicable fees and charges on our website (in the section Our City).
The impact of rates In 2015–2016 our total general rate revenue (excluding growth) will rise by 2.7%. The following table shows the impact on properties and the number of properties that fall within selected percentage changes. Rate increase Less than zero 0–1% 1–2% 2–3% 3–4% 4–5% 5–6% 6–7% 64
Residential properties 249 3,749 10,814 2,749 11,784 6,400 1,755 59
Pensioners
City of Tea Tree Gully – Annual Business Plan 2015–2016
17 976 2,146 356 2,777 1,515 446 8
Self funded retirees 0 130 411 78 286 259 46 2
Total properties 280 4,177 10,829 3,090 12,158 6,412 1,751 59
Rate increase 7–8% 8–9% 9–10% Greater than 10% Total
Residential properties 62 76 61 563 38,321
Pensioners 7 8 10 90 8,356
Self funded retirees 4 5 1 12 1,234
Total properties 62 79 62 861 39,820
Minimum rate
In 2015–2016 the differential above the residential rate in the dollar for the following land uses will be:
We believe it is fair that all rateable properties contribute to the cost of administering our activities, creating and maintaining the infrastructure accessed by every property, and providing all of the services used by our community.
• Commercial – 50% • Industrial – 50% • Primary production – same rate as residential • Vacant land – 100% • Other – same rate as residential. As part of the valuation process, the ValuerGeneral applies a land use to each assessment to identify the main use of the land. As a ratepayer you may apply to Council for a review of this assessment if you think a property has been wrongly classified in terms of its land use.
The minimum rate is charged against the whole of an allotment. This means that if you own and occupy ‘contiguous land’ – that is, two or more pieces of adjoining land, even if they are separated by a road – we only levy one minimum rate. Independent living units in a retirement village are exempt from paying the minimum rate under section 158 of the Local Government Act 1999. We are proposing a minimum rate increase of 2.7% to $1,092 for 2015–2016. The graph below shows the minimum rate in Adelaide metropolitan councils for the 2014– 2015 financial year.
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Natural Resources Management Levy We collect a regional Natural Resources Management (NRM) Levy on all rateable properties on behalf of the regional NRM Board. The Board uses the levy to manage and protect our state’s priority water, land, marine and biodiversity assets. Note that we do not keep this money and we do not determine how it is spent. We collect the levy by imposing a separate rate against all our rateable properties, with the NRM Board advising us what the rate will be at the end of each financial year.
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Community wastewater management system conversions In 2001–2002 a program was started to convert some properties from Council’s community wastewater management system (CWMS) to SA Water’s sewerage system. If you own one of these properties, in addition to paying SA Water for their services, you are legally obliged to pay a separate rate to Council for CWMS. This rate was approved by the Minister for Local Government, and will be charged until the capital cost of the conversion is repaid. The separate rate for 2015–2016 will be $360 ($345 – 2015).
Community wastewater management system service rate/charge Our community wastewater management system (CWMS) services 4,499 properties (4,489 – 2015). For 2015–2016 we have budgeted $2.26 ($2.2 million - 2015) to operate, maintain and improve this system. This figure may be subject to change based on SA Water charges that will be announced prior to the adoption of the Annual Business Plan. This sum includes an allowance for the replacement of the physical infrastructure used to provide the service. It will be funded by a service fee for each connected property unit, and also for each unconnected property unit that uses the system. If your property is connected to the CWMS system and is next to
the SA Water sewer mains (meaning you are also paying SA Water rates), this fee will be reduced. If you are receiving the CWMS service on nonrateable land, a service charge will be levied against the land. Our rates team can provide more information about the CWMS scheme, including details of what constitutes a service charge. The service charges are $515 ($495 – 2015) for a connected charge and $360 ($345 – 2015) for an unconnected or reduced charge.
Rate concessions State Government Concessions - Until this year, the State Government funded concessions on Council rates. These concessions were formerly available to the holders of pensioner concession cards, veterans, low income earners, unemployed, students, and self-funded retirees. These concessions were all abolished by the State Government with effect from 30 June 2015. From 1 July 2015, the State Government has elected to replace these concessions with a single “cost-of-living payment” provided directly to those entitled. This payment may be used to offset Council rates. Note that not all former recipients of rates concessions will be entitled to the new payment. To check eligibility, contact the Department for Communities and Social Inclusion (DCSI) Concessions Hotline 1800 307 758 or at www.sa.gov.au/. The separate concession
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entitlements for Council Community Waste Water Schemes (CWMS) remain unchanged. Should you be entitled to the State Government funded concession on CWMS rates this will be reflected on the front of this rate notice..
Payment of rates Annual rates are split into four equal instalments, each of which is due on the first business day of September, December, March and June. We provide a range of payment options. Our Chief Executive Officer also has the authority to enter into special agreements with ratepayers on the payment of rates when needed. If you are having difficulty paying your rates, we encourage you to contact our Customer Relations team to discuss payment options. All such enquiries are kept confidential.
Postponement of rates If you hold a Seniors Card or are experiencing hardship paying your rates, you can apply to postpone payment. The criteria for eligibility are listed below. Applications are assessed on a case-by-case basis and they are not dependent on the level of increase in rates payable. All such enquiries are confidential and the information is only shared with those who need to know in order to assess the application. Once an application is approved, the postponement takes effect from the first day of 68
the next instalment period following the date of application. That is, either the first day of September, December, March or June. If you have a postponement agreement, you must advise us in writing within 14 days of any change to your circumstances. For example: • Change of ownership • Change of occupation • Alterations or improvements to the property • Division of land • Change in financial circumstances. We conduct periodic audits of eligibility to confirm ongoing entitlement. If you apply for a postponement, you must also show us that you have advised relevant interested parties of your intention. These include mortgage holders, insurance companies and beneficiaries. The amount and the time frame for postponement is at the discretion of the Chief Executive Officer. All applications for postponements must be from the principal ratepayer, in writing on Council’s approved form, addressed to the Chief Executive Officer, City of Tea Tree Gully Council, 571 Montague Road, Modbury SA 5092, and include sufficient details to identify the relevant property and support the application. All information provided will be kept confidential.
City of Tea Tree Gully – Annual Business Plan 2015–2016
Postponement – Seniors Card
Postponement – hardship
Under Section 182A of the Local Government Act 1999, if you hold a State Seniors Card you can apply to postpone part of your Council rates on a long-term basis. The deferred amount will still incur a monthly interest charge, and the accrued debt will become payable when your property is sold or disposed of. In this way, postponement is similar to a reverse mortgage.
Under Section 182 of the Local Government Act 1999, you can apply to postpone your rates if payment would cause you hardship. You will need to meet the following criteria:
As a State Seniors Card holder, you can only apply for postponement if:
• We are satisfied that the hardship is proven • You agree to pay interest on the amount at the cash advance debenture rate, calculated monthly and published by the Local Government Finance Authority for 1 July each year • The property is your principal residence and is the only property you own
• The property is your main residence • No other person other than your spouse has an interest as owner of the property • There is appropriate level of equity in the property. To find out more or receive an application form, please phone us on 8397 7444.
• You have owned the property and used it as your principal residence for more than five years • You can produce your Pensioner Concession Card from Centrelink or Veterans’ Affairs or a TPI card from Veterans’ Affairs; or can show that you are a self-funded retiree with a household income of less than $30,000 a year.
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Rebates of rates
• Why the applicant needs financial assistance through a rebate
Rebates – mandatory, under Section 159–165 of the Act
• The level of rebate sought, as a percentage and dollar amount, and why it is appropriate
Under Sections 159–165 of the Local Government Act 1999 we are required to grant rebates to certain properties, including those that meet the Act’s requirements for land used for religious or educational purposes, or for community uses, as specified in the Act. These rebates vary from 75% to 100%.
• How much financial assistance is being given to that applicant by federal or state agencies and whether it applies to that land
Rebates – discretionary, under Section 166 of the Act Section 166 of the Local Government Act 1999 sets out the circumstances in which we can grant discretionary rebates of up to 100%. We have the option to grant a rebate of rates or service charges and to determine the rebate amount. Referring to Section 159(5) of the Act, we look at the land for which the rebate is sought and consider: • The type and number of services we provide on the land compared with similar services we provide elsewhere in the community • Whether a community need is met by the activities on the land • Whether activities on the land provide assistance or relief to disadvantaged people. We may also take into account other factors, such as: 70
• Whether the applicant has applied or will apply to another council • Whether the applicant is or will be providing a service in our area and the extent of that service • Whether the applicant is a public sector body, a private not-for-profit body or a private for-profit body • Whether the applicant is gaining a financial profit for the members of the body, or is engaging in trade or commerce and therefore has the ability to distribute profit to its members • Whether there are any historical considerations that may be relevant for all or any part of the current Council term • The financial consequences of the rebate for Council • The time the application is received • The availability of any community grant to the person or body making the application • Whether the applicant has received a community grant. If you or your organisation wishes to apply
City of Tea Tree Gully – Annual Business Plan 2015–2016
for a rebate for the current rating period, you must do so by 1 September 2015. We reserve the right to not consider late applications. However, if you are eligible for a mandatory rebate, this can be granted at any time during the current rating period.
may apply for a discretionary rebate on your Council rates by 1 September of each year. A report will be developed for Council’s consideration of requests for rebates under Section 166 of the Local Government Act 1999 in October of each year.
If you or your organisation’s eligibility for a rebate no longer applies, we can recover rates proportionately to the end of the current financial year.
The discretionary rebate for “not-for-profit” organisations will only be available to those that are otherwise not already receiving a rebate under Section 161.
When considering applications for rebates, we are mindful of the contribution ratepayers make to our City, and that profitable organisations who receive government funding may still need additional help to achieve their goals. However, we need to balance the desire to support community organisations with the impact that rebates have on our revenue.
The maximum rebate applied will be capped at the difference between the residential rate and the industrial/commercial vacant land rate.
We provide a discretionary rebate of 100% for community sporting and social groups that occupy Council-owned properties, including the University of the Third Age. This supports the strategic directions (set out in our Strategic Plan) to provide and maintain a high standard of recreation and leisure opportunities for all sections of the community. If you believe that your “not-for-profit” organisation is impacted adversely by our rating strategy for commercial and industrial land uses, we encourage you to apply for a discretionary rebate. We will assess each application on its own merits. If you are a “not-for-profit” land owner you
Maximum rate increase – rate capping Rate capping helps to keep rates relatively stable from year to year. It can take the form of a rebate or remission applied to residential rates. These rebates and remissions cap (or set a maximum value for) increases in rates when property values increase, land use changes, councils changes their rate structure, or when there are anomalies in valuations. In accordance with Section 153 of the Local Government Act 1999, we are considering capping the increase on rates to 7% (6% 2015) on properties owned and occupied by ratepayers who receive a State Government concession in 2015–2016. This would reduce the impact of greatly increased rates due to rapid rises in property values.
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Your rates will be capped for 2015–2016 if your general rates rose by more than 7% (6% - 2015) over the previous financial year and if you can show that: • The increase in your property valuation is not wholly or partly due to improvements or development activity on your property • You have owned the property since 1 July 2014 • You received a State Government concession on Council rates for the property in 2015– 2016 • The property is your principal place of residence. The amount of the rebate will be the difference between the rates payable for 2015–2016 (before any rebates or remissions) and the rates payable for 2014–2015 (before any rebates or remissions), plus 7% (6% - 2015).
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City of Tea Tree Gully 571 Montague Road, Modbury SA 5092 PO Box 571, Modbury SA 5092 Telephone 08 8397 7444 City of Tea Tree Gully – Annual Business Plan 2015–2016 74 www.teatreegully.sa.gov.au