Annual Business Plan 2015-2016

Annual

Business Plan 2015 - 2016

Table of Contents

1

2

3

Introduction

Strategic Plan 2013-2016 — Summary

2

4

Outcomes From 2014-15 — Objectives achieved

8

4

5

6

Annual Business Plan & Budget

13

Rating Strategy

17

Funding the Business Plan

24

7

8

Sustainability Index

26

28

• • • • • • •

28 29 30 31 32 33 34

Appendix 1: Budgeted Annual Statements

Budget Overview

Budgeted Income Statement Budgeted Balance Sheet

Budgeted Statement of Changes in Equity Budgeted Statement of Cash Flows

Uniform Presentation of Finances

Budget Financial Indicators

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1. Introduction As Mayor, I am excited about the coming year as we enter into a time of growth and a time of change, offering new opportunities for our region.

Residents can look forward to seeing Council invest in our future and to develop long term sustainable plans that have a positive benefit for the community we serve.

Council is committed to providing an Annual Business Plan and Budget that is transparent, accountable and designed to achieve long term financial stability for the District Council of Mallala. It supports growth and prosperity and aims to achieve a balance between the needs of industry, business, the community and the environment. It proudly demonstrates a commitment to ensuring a strong future for our region.

Through the State’s 30 Year Plan for Greater Adelaide, The District Council of Mallala has been identified as a growth area. Undoubtedly, people are attracted by our easy access to Adelaide, our rural and coastal lifestyles and affordability of housing. Coupled with increasing regional economic growth and opportunities for employment both in traditional industries and in the retail and service sectors associated with an increasing population, there are many reasons to be excited about the District’s future.

As we grow, we continue to review our services ensuring we are providing appropriate services that meet the needs of the community. The well-being of our residents is fundamental, so within this plan we provide support for a number of projects including;

•

Developing a new Strategic Plan for 2016 - 2020

•

Re-locating Council Administration to Two Wells

•

Strategic Information Technology review

We recognise that a bright economic future for our region requires a strong vision shared by dedicated staff and a supportive community. In the following pages you will find further details on this exciting journey ahead.

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‘To invest for the best future possible for our community.’

Annual Business Plan 2015 - 2016

Statutory Requirements Under Section 123 of the Local Government Act 1999 every Council must have a budget for each financial year.

This budget must deal with each principal activity of the Council on a separate basis and must be adopted before 31 August for the financial year.

Each Council must also prepare, as part of its budget, or in association with preparation of its budget, an annual statement which addresses: • the activities the Council intends to undertake in the ensuing year to achieve its objectives • the measures (financial and non financial) that council will use to assess its performance against its objectives.

A Council must ensure that copies of its Draft Annual Business Plan and any other associated documents are available for inspection.

This Draft Annual Business Plan & Budget 2015-16 was considered and endorsed for public consultation by Council at a Meeting held on Monday 22 June 2015.

Notices inviting public submissions and advising of an opportunity for members of the community to make verbal comment on the Draft Plan were published in local print media on Wednesday 24 June 2015, providing the 21 days community consultation period required under Sec 124(5) of the Local Government Act 1999.

The consultation period closed at 5.00pm Wednesday 15 July 2015.

A portion of a meeting of Council on Monday 13 July 2015 held at the Mallala Council Chambers commencing at 7.00pm provided an opportunity for members of the community to ask questions and have their say on the final make up of the adopted 2015/16 Annual Business Plan.

After taking into account community feedback, Council considered the final draft plan at a Special Meeting of Council held on Monday 20 July 2015, to formally adopt the plan (as amended following community comment) as its Annual Business Plan for the 2015-16 financial year.

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2. Strategic P lan 2013-2016 Summary Council has considered its Strategic Plan concurrently with the development of this year’s Annual Business Plan. All reference to the Strategic Plan is to the approved 2013-16 plan.

Vision A progressive growing community enjoying a quality lifestyle in a sustainable rural and coastal environment.

Mission Provide a safe healthy and sustainable environment for our growing community, business and visitors, by providing quality services, infrastructure and facilities.

Core Values The values and behaviours that the Council will embrace to support our Mission and guide us in achieving our Vision are: •

Leadership & Diplomacy – by acting strategically and effectively managing our relationships.

•

Teamwork – through unity, cooperation and support.

•

Professionalism – through commitment, quality and timeliness of work delivered.

•

Honesty & Integrity – building trust and loyalty with the community and within Council.

•

Respect – for others, acting with humility and empathy.

•

Innovative & Open-minded – being proactive in continually improving our services.

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Annual Business Plan 2015 - 2016

Strategic Plan 2013-2016

Framework: Long Term Objectives Strategic Focus

COMMUNITY DEVELOPMENT

ECONOMIC DEVELOPMENT

BUILT ENVIRONMENT

A safe and healthy A developing econom- A built environment Goals community, enjoying a ic base and increased that meets current

Outcomes

high quality of life

employment supported and future community by a growing population needs and appropriate infrastructure

Health and family support services that are accessible and meet the needs of our community

Business and employment growth

A sense of place through a cohesive community with a strong volunteer sector Recreation, sporting and leisure facilities that support the well being of the community A creative and learning community A Safe community

Effective and efficient planning and building control

Infrastructure that supports sustainable Fit for purpose roads economic development and transport networks A strong and diverse economic base Well maintained street scaping and town entrances A growing tourism industry Preservation of local heritage and character of towns and rural living areas Council buildings, facilities and assets that meet community needs

NATURAL ENVIRONMENT

GOVERNANCE & ORGANISATION

A natural environment that is protected, valued and enhanced and meets current and future community needs

A responsive Council Team providing proactive leadership, good governance and sustainable services

Protected, valued and enhanced natural environs

Effective governance, leadership and teamwork

Sustainable use and integrated management of water resources

Informed and engaged community, stakeholders and staff

Enhanced flood management

Customer focused Council services

Integrated waste management

Effective strategic and performance management

Responsiveness to climate change

Effective financial management that ensures Council’s financial sustainability

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Summary of Services Provided to the Community Council provides two types of service to the community. Firstly there is the provision of ‘operational’ services to maintain the district and deliver the core business of Council fo the community.

This covers the bulk of Council’s services and is reasonably similar from year to year. The second is Council’s ‘project’ budget where there is a strong emphasis on achieving strategic directions, involving either ‘short-term’ or ‘one-off’ tasks, as well as projects with a longer term focus which eventually become part of Council’s core business. Listed below are the Service Profile areas Council has put into place to review and assess the different roles we perform for our community.

Service Profile Description Aged and Disabled Services Depot Operations Animal Management & Dog Control

Governance Administration Rating Administration

Development Assessment Horticultural Services

Records Management

District Development

Human Resources

Recreational Facilities

Economic Development

Information Technology

Elected Member Support

Land Use Planning

Regional Relations & Planning

Community & Sporting Groups Information & Support

Engineering Services

Library Services

Events

Museum and History

Community Development

Financial Management & Compliance

Open Space Planning

Asset Management Building & Facilities Management

Community Infrastructure Council Committees Customer Services

Fire Prevention General Inspections

Planning & Building Compliance Public Health & Food Administration

Risk Management Road Services Strategic Planning & Business Planning Tourism Volunteer Services Waste Management

CWMS Administration

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Annual Business Plan 2015 - 2016

Measuring Achievements of the Plan As well as documenting the strategic long term and financial year objectives, and activities to be undertaken for the 2015-16 financial year, this Annual Business Plan will be used by staff and Council as a basis against which we will monitor and report on our performance on a regular basis.

Regular reports will be presented to Council enabling ongoing tracking of actual performance against the planned projects, performance targets and actual achievement of stated outputs and periodic financial reports will be prepared to monitor financial performance against budget.

Measuring

performance

is

critical

to

the

process of implementing business plan actions and satisfying customers. Key performance indicators (KPI’s) provide a snapshot of how Council as a whole is performing and the long term sustainability of the organisation and well being of the community.

Corporate performance indicators for each service will be used as a means of highlighting a few issues that are fundamental to that particular service area.

Intergrated Annual Business Management

Strategic Plan

4 Year Action Plans

Performance Management

- Community - Economic Environmental Facilities Infrastructure

and Reporting

Budget

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3. Outcomes from 2014 - 2015 Objectives Achieved A summary of Objectives achieved or well under way for the 2014-15 year (Refer to the Strategic Plan 2013-16)

Community Development Action

Action Status Comments

Investigate and Facilitate hard and soft Completed infrastructure requirements for proposed new Two Wells development

The Two Wells residential development is underpinned by a Development Deed between the developer and Council, which identifies the infrastructure requirements and how they will be funded over the life of the project

Facilitate the development of the Two In Progress Wells town centre project including the urban design framework and guidelines

This project has progressed with preparation of the draft Two Wells Town Centre DPA which was released for concurrent agency and public consultation in May 2015. Further discussions continue with the relevant agencies regarding access to Crown Land

Prepare a Public Health Plan

Completed

Mallala Museum – Electrical Connection to Completed Work Shed

Regional Youth Bus Support

Completed

The Barossa, Light, Gawler and Mallala Councils collaborated to produce a regional public health plan, which was finalised in July 2014. A ‘soft’ launch of the Regional Public Health Plan was undertaken in early 2015 in a lead up to a stakeholder workshop held in May 2015 Electrical works installed and completed early in 2015

The Regional Youth Bus was launched during National Youth Week 2015 (10 April – 19 April). The Community launch was held on the 12 April as part of the Outdoor Cinema Event and the official Council launch was held on the 13 April prior to a Council Meeting.

The RYB kicked off its first visit to our district in the week commencing 1 June 2015 stopping at Mallala and Two Wells where an abundance of youth accessed the bus. The bus was full of young people who were trying new technologies, playing Xbox, listening to music and hanging out with friends.

The RYB Coordinator was on hand to offer referrals to support services and was overwhelmed with the success of the bus. A calendar of when and where the RYB is scheduled will be available via the Council website

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Annual Business Plan 2015 - 2016

Economic Development Action

Action Status Comments

Complete the Horticulture Study in conjunction with the City of Playford

Completed

Work with RDA Barossa to attract economic In Progress investment into District

Develop a business case for investment In Progress into waste water re-use in the horticultural industry

Resolve land issues associated with the In Progress coastal camping area at Parham

The Virginia and Northern Adelaide Horticultural Plains Study was completed in November 2013 and won the Award for the Best Planning Ideas - Large Project at the Planning Institute of SA Awards for Planning Excellence 2014. Also won at the 2015 National Awards for Planning Excellence was a Commendation This work continues with the CEO being a board member of RDA Barossa. Water Re-Use Schemes which will provide recycled water for the horticultural industry are being strongly supported by the RDA Barossa as key projects for the region Council and SA Water signed a memorandum of understanding to investigate an opportunity to bring 8GL of recycled water from Bolivar to the district. Council conducted a Market Proving Study to determine the level of demand for the recycled water. SA Water commenced investigations and testing into the establishment of a Managed Aquifier Recharge scheme for water storage Council progressed development of By Laws – ‘Local Government Lands’, which came into affect in April 2013. The issue will be further considered as part of the review of Councils Community Land Management Plans

Built Environment Action

Action Status Comments

Reconstruct selected sections of the Thompson Deferred Beach foreshore levee bank

Prepare the Gawler River and River Light Deferred Flood Prone Areas DPA

Old Port Wakefield Road, Two Wells Roundabout (Contribution)

In Progress

Deferred due to council resolution, to wait for the completion of the Coastal Settlements Adaptation (CSA) study. Council has engaged with the community to develop a number of strategies aimed at enhancing protection across the coastal areas. A report will be presented to Council to endorse the actions The preparation of the DPA had been placed on hold pending the release of new Flood Mapping by the Gawler River Flood Management Authority Preliminary work on the roundabout has commenced and survey concept design drafted.

The next stage is to obtain approval from the Department of Planning, Transport and Infrastructure on the concept design to allow detailed design and costing to occur

Undertake road Maintenance/re-sheeting/ In Progress construction program

Progressing to agreed plan

Mallala Museum – sealing carpark and Completed footpath

Works completed July 2015

Repair/maintenance work on the Old Port Completed Wakefield Road Salt Creek Bridge

Repair works completed March 2015

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Action

Action Status Comments

Building maintenance upgrade – Mallala Institute and Shelters

Partial Completion

Prepare the Lewiston Community Study

In Progress

Develop a District Wide Open Space In Progress Management Plan and review of Community Lands

Mallala Institute and CWA Buildings have been treated for salt damp with further works planned for 2015/2016 Dublin Schlodder Shelter was completed in March 2015 with the official opening on 8 April 2015 Stage Two (Cost Benefit Analysis) completed for selected sites identified in Stage One. Report presented to Council for consideration as to whether to proceed with a detailed master plan for a preferred site. At this stage, Council has not decided on a site location Following an initial delay, community engagement workshops were held in March 2015. The workshops were an opportunity for Council to listen and scope issues associated with open space and community land within the district. Feedback from the workshops will assist the consultants in preparing a draft plan. A draft plan will be prepared and released for consultation at the end of June 2015

Installation of security system at Council’s In Progress quarry

Tender process finalised

Upgrade to the Thompson Beach Fire In Progress Protection Infrastructure

Currently in construction

Baker Road Ford Project (subject to external In Progress funding)

Baker Road Ford Project commenced

Prepare the Two Wells Town Centre DPA

The draft Development Plan Amendment was presented to the Strategic Planning and Development Policy Committee in May 2015 seeking approval to release the DPA for concurrent public and agency consultation. Council formally endorsed the committee’s recommendation to commence consultation. The DPA has been released for consultation from 5 June to 31 July 2015

Partial Completion

Installation of bunted fuel storage system at Completed Council’s quarry

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Installation completed in November 2014

Annual Business Plan 2015 - 2016

Natural Environment Action

Action Status Comments

Continue the appropriate steps for the In Progress development and construction of a full CWMS for the townships of Mallala and Two Wells

Undertake a Broadacre Farming Study

Undertake an Equestrian Industry Study

This study aims to investigate the social, economic and Draft Completed environmental issues that are likely to impact on the future of broadacre farming land, with a particular emphasis on identifying areas of high quality farming land, that will enable Council to establish strategies and planning policies to address triple bottom line objectives and to enable the longer term sustainable management and protection of the district’s agricultural land resources. The consultant team has progressed on collating, reviewing and analysing data for the study, and development of a Multi-Criteria Assessment (MCA) model around key categories: Economic factors; Social factors; Environmental factors and Development constraints.

In undertaking the project a Project Reference Group has been established to help to steer the project team in both the identification of key issues and opportunities, and subsequent testing and verification of these issues and opportunities in the course of the MCA Stage 1A Completed Stage 1B In Progress

Action

The Mallala CWMS Project has progressed through the practical completion being granted for the Treatment Plant.

The civil works component is at the stage where practical completion is pending with authorisation received that householders can connect to the system. The Two Wells CWMS project recommenced with a survey of the Two Wells residents. This project has now been put on hold awaiting information from an external waste water provider

Action Status

Develop a Dublin Stormwater Management In Progress Plan Apply for funding and prepare detailed In Progress engineering concepts to protect the Two Wells township from flooding

This study aims to investigate the opportunity to establish one or more potential equestrian/horse keeping precincts that will seek to service the district/regional equestrian activities. Stage 1A has focused on investigating the provision of and demand for horse keeping and/or equestrian precinct(s) within the district. While the investigations has highlighted that very little data exists about rates of horse ownership and rates of participation in horse riding activities nationally, as well as specifically in South Australia, information indicates that there is a demand for horse riding facilities, evidenced by horse riding clubs in the District being at capacity, and members of the clubs travelling outside of the Council area to access facilities. On the basis of the investigations, the study has progressed into Stage 1B, which will involve more detailed engagement with stakeholders to identify criteria for Comments suitable sites and assessment of potential sites Preliminary survey data has been collated in order to prepare the Stormwater Plan. This project will extend into 2015-16 A funding application had been made to the Stormwater Management Authority (SMA). The SMA has required Council to develop a Stormwater Management Plan for Two Wells prior to seeking funding. Consultation on a draft Stormwater Plan has been completed

Prepare a Coastal Settlements Adaption Complete Study to address contingencies for future sea level rise

Council has engaged with the community to develop a number of strategies aimed at enhancing protection across the coastal areas. A report will be presented to Council to endorse the actions

Implement the road closure process for roads In Progress in the coastal zones to support Council’s Coastal Access Strategy

Gradual implementation

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Governance & Organisation Action

Action Status

Comments

Appointment of Senior Planning Officer

Completed

Senior Planning Officer successfully commenced on 27 January 2015

Conduct in conjunction with Electoral Commission SA the Local Government Elections November 2014

Completed

Human Resources (HR) Administrator (Contribution)

Completed

Customer Service Request Module

Completed

To initiate a community survey early in 2015, Deferred which is proposed to be undertaken every 2 years

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recruited

and

Local Government Elections successfully completed in November 2014 with elections for the position of Mayor and the Wards of Mallala/Dublin and Two Wells. Nominated candidates in the Lewiston Ward were elected unopposed An arrangement with the Barossa Council has been entered into to provide Human Resources support A Customer Service Request Module (CRM) was successfully implemented across the organisation with a go-live date of 12 March 2015 A community survey will be conducted in 2015/16

Annual Business Plan 2015 - 2016

4. Annual Business P lan & Budget Annual Business Plan Objectives – 2015-16: Actions The Draft Annual Business Plan has been prepared to deliver the following Council actions for the year.

Community Development •

Continue with the facilitation of the development of the Two Wells town centre project including

the urban design framework and guidelines

•

Establish a Youth Advisory Committee (YAC)

Economic Development •

Continue to work with RDA Barossa to attract economic investment into District

•

Continue support of Regional Water Projects

•

Active participation in regional collaboration between Federal, State and Local Governments

•

Develop a specific Regional Focus with Town of Gawler, Light Regional Council and the Barossa Council

Built Environment •

Prepare the Gawler River and Light River Flood Prone Area DPA

•

Old Port Wakefield Road Roundabout Construction Phase (Contribution)

•

Undertake road maintenance /re-sheeting/construction program

•

Continue with the Building maintenance upgrade Program

•

Initiate an engineering report on the structural integrity of the Wasleys Rd Bridge

•

Finalisation of the Two Wells Town Centre DPA

•

Wasleys Road Mallala drainage correction and sealing

Natural Environment •

Continue the process for the development and construction of a full CWMS for the

township of Two Wells

•

Completion of the Broadacre Farming Study

•

Completion of the Equestrian Industry Study

•

Finalisation of the Dublin Stormwater Management Plan

•

Purchase new aerial photography overlay for Geographical Information System (GIS)

Governance & Organisation •

Relocate Council Administration to Two Wells

•

Review and revise plans for Civic Accommodation in Two Wells

•

Undertake preliminary design work on permanent civic accommodation in Two Wells

•

Conduct a review of Strategic and Corporate Plan and Structures

•

Undertake a Strategic Information Technology review within Council operations

•

Conduct a community survey late in 2015

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Capital Project Strategy Review of Assets A key objective of the Asset Management Plans is to maintain and preserve Council’s assets at desired service levels that meet community expectations.

Capital expenditure on renewal and replacement of infrastructure assets is a key component of the long-term financial sustainability of Council. Council’s Strategic Management Plan and Long Term Financial Management Plan are scheduled for a substantial review in the second half of 2015 and will be subject to a process of public consultation and evaluation. Key elements of the process with regard to assest management will be:

• Revaluation of all Land, Building and Structures

• Review long term capital expenditure based on revised Asset Management Plans, which integrates

with the Council’s Strategic Management Plan;

• Listing of all known capital projects, prioritised within classes of assets on the basis of evaluation

criteria;

• Transparent process for evaluating and prioritising capital projects.

• Divesting of surplus assets.

Roads & Footpaths A 10 year program for renewal and/or replacement based on an engineering condition matrix to ensure Council’s road network is both safe and sustainable. Council engages independent engineering consultants for assessing any new road construction.

Capital Road Projects currently proposed for inclusion in the Works Program include:

• Wasleys Road drainage correction and sealing (Mallala Township) $234k

• Seal Rehabilitation $99k

• Arterial unsealed re-sheet $892k

• Footpath, Kerbing & Streetscape $172k

Plant & Machinery A 10 year program for renewal and/or replacement based on use and purpose is in place to ensure Council’s plant and equipment is efficient and effective. Plant hire is considered when specialist or additional equipment is required. Currently Council purchases all of its plant, equipment and vehicles, as opposed to leasing, because local government discount, low interest and opportunity costs, and lack of taxation advantage means purchasing is financially the better option.

• Fleet vehicles $53k (net after trade-in values received)

• Plant & Machinery $423k (net after trade-in values received)

• Land, Buildings & Reserves

Land, Buildings & Reserves

• Relocate Council Administration to Two Wells. Temporary Accommodation $250k

• Buildings maintenance & upgrade $184k

- Dublin Lions Park Facility Renewal $41k

- Parham Camping Ground $31k

- Mallala Institute Shed Roof $45k

- Two Wells Oval Coaches Box $7k

- Mallala Institute Salt Damp repair, painting and renew fencing $45k

- Mallala CWMS – Bunded Chlorine Storage $15k

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Other Asset Categories

• Parham Levee (Subject to grant funding) net after grant funding

$17.4k

• Office & IT Equipment

- Aeromatrix Aerial Photography Overlay $16k

- Fire Safe – Records $2.5k

Operating Revenue & Expenditure All Councils have basic responsibilities under the Local Government Act and other relevant legislation. These include: • Regulatory activities e.g. maintaining the voter’s roll and supporting the elected Council; • Setting rates, preparing an Annual Business Plan and Budget and determining long term strategic management plans for the area; • Management of basic infrastructure including roads, footpaths, parks, public open space, street lighting and stormwater drainage; • Street cleaning and rubbish collection; • Development planning and control, including building safety assessment; • Various environmental health services.

New Initiative Operating Budget Bids (included in attached Financial Statements) proposed to be undertaken for the 2015/2016 year are: • Old Port Wakefield Road Roundabout (Contribution) $500k • Review plans for permanent Civic Centre in Two Wells $100k • Review Strategic and Corporate Plans & Structures $75k • Water Projects Consultancy $24k • Strategic IT Review $15k • Wasleys Bridge Engineering Report/Recommendation $15k • Two Wells Stormwater Management Plan $20k Council is heavily reliant on rates revenue and grant funds to provide for both operational and capital costs. However, to help ease the rate burden on property owners, it is essential that Council consider setting its schedule of fees and charges each year to account for increased costs associated with the delivery of services.

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Significant Influences External Influences In preparing the recurrent budget a number of external influences have been taken into account because they are likely to impact significantly on the cost of services delivered by Council in the budget period. These include:

•

Increases to insurance and LGA Workers Compensation Scheme costs for Council assets and

employees.

•

Increasing cost of materials especially fuels & power used for Council services

•

Rehabilitation of waste sites to meet EPA standards.

Internal Influences As well as the external influences there are also a number of internal influences which have had a significant impact on the operating budget. These include:

•

The impact on salary and wage costs of Enterprise Bargaining Agreements

(EBA) for staff.

•

WHS & Risk Management compliance.

•

The funding gap and resultant backlog of maintenance and upkeep to

operational and community buildings and infrastructure.

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Annual Business Plan 2015 - 2016

5. Rating Strategy Council Rating Structure In 2013/2014 an extensive review was conducted and Council’s Basis for Rating, is as follows: i).

Utilising land use as the basis for differential rates;

ii).

Having three differential rate categories being;

a.

industry/commercial land uses;

b.

residential, vacant land and other land uses;

c.

primary production land uses;

iii).

Introduction of a waste service charge; and

iv).

Utilising a fixed charge rather than a minimum rate.

For the 2015/2016 year a service charge will be implemented for the Mallala township residents after the impending practical completion of the Mallala Community Wastewater Management Scheme (CWMS).

Strategic Focus In setting its rates for the 2015/16 financial year Council has considered a number of factors and issues, ranging from the requirements of Council’s budget and long term financial plan to the impact any rate increase may have on householders, businesses and primary producers.

Specific issues faced by our community include the need to maintain, replace and upgrade community infrastructure assets. The increasing legislative requirements surrounding waste management and recycling programs add additional costs to Council operations.

To ensure sufficient revenue to fund Council’s operations and proposed capital works program for 2015/16 Council has determined to raise approximately $7.722 million in general rate revenue. This represents an average 4.7% increase in rates for existing ratepayers, plus an approximate 1.3% in growth on the previous year.

The increase can be calculated as follows:

CPI Increase - (CPI Adjustment Capital Cities All Groups as at 31 March 2015)

1.3%

Additional Increase - Increase required to fund existing Council services and new initiatives

3.4%

Average Increase - impacting existing residents

4.7%

Plus Growth Increase - attributed to new dwellings/properties

1.3%

Target Increase

6.0%

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Council’s Revenue Raising Powers/Differential General Rates The Local Government Act, Section 133, provides for a Council to raise revenue for the broad purposes of the Council through a general rate, which applies to all rateable properties, or through differential general rates, which applies to classes of properties.

In addition, Council can raise separate rates for specific areas of the Council or service rates or charges for specific services. All land within a Council area, except for land specifically exempt (eg. crown land, Council occupied land and other land prescribed in the Local Government Act 1999 – refer Section 147 of the Act), is rateable.

Method Used To Value Land The Council may adopt one of three valuation methodologies to value the properties in its area.

They are: • •

•

Capital Value – the value of the land and all of the improvements on the land.

Site Value – the value of the land and any improvements which permanently affect the amenity of use of the land, such as drainage works, but excluding the value of buildings and other improvements.

Annual Value – a valuation of the rental potential of the property.

The Council has decided to continue to use capital value as the basis for valuing land within the council area.

The Council considers that this method of valuing land provides the fairest method of distributing the rate burden across all ratepayers, as capital value is representative of the wealth of individual ratepayers.

The Council expects to adopt valuations made by the State Valuation Office as provided to the Council in June 2015. Valuations as determined by the Valuer-General have increased in total by approximately 2.7% (including growth) from those valuations adopted for the 2014-15 financial year. This percentage increase will be updated when final valuations are adopted.

Note to rate payers: If a ratepayer is dissatisfied with the valuation made by the Valuer-General then the ratepayer may object to the State Valuation Office in writing, within 60 days of receiving the notice of the valuation, explaining the basis for the objection. Please note that the Council has no role in this process. It is also important to note that the lodgement of an objection does not change the due date for the payment of rates.

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Annual Business Plan 2015 - 2016

Impact on Your Rates With the existing rating structure being only in its third year, it has been proposed that the broad parameters that were determined for the 2014/2015 year be retained. The result being that three separate differentials be treated as follows, that the residential, vacant land and other land uses differential be used as the base level, with the industry/commercial land use being approximately 30% above the base and the primary production land use being approximately 10% below the base.

Differential Rates 2014/15:

Year 2014-15

Industry/Commercial 0.005464 Residential, Vacant Land & 0.004203 Other Primary Production 0.003821

Total Revenue generated from Property Values

$000 $232 $3,622 $2,517

Proposed Differential Rates 2015/16 (Subject to the final valuation adoption):

Year

Industry/Commercial Residential, Vacant Land & Other Primary Production

2015-16

Total Revenue generated from Property Values

0.005676 0.004366

$000 $273 $3,895

0.003969

$2,637

Note - These figures do not include revenue from the Waste Charge or Fixed Charge.

As stated above the average rate increase to be expected by individual households excluding growth would be 4.7%. There will also be properties that experience an increase in the rates paid from what was levied last year of greater than the average of 4.7%, with either an increase in property values.

With this in mind Council has implemented the use of a cap to limit the annual increase from what was paid in the previous year to those assessments that have been adversely affected by the implementation of the new rating structure by more than 10%. This will be the final year that the cap will apply.

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Fixed Charge Council has adopted the use of a Fixed Charge in place of a Minimum Rate. According to Section 152(2)(a) a Fixed Charge must apply equally to each separate piece of rateable land in the area, unless as per Section 152(2)(c) or (d) the following is evident: (c)

if two or more pieces of contiguous rateable land are owned by the same owner and occu pied by

the same occupier, only one fixed charge may be imposed against the whole of that land; or

(d)

if two or more pieces of rateable land within the area of the council constitute a single farm

enterprise, only one fixed charge may be imposed against the whole of the land.

In regard to Section 152(2)(d) application forms will be posted to primary production landowners and will be available on Council’s website www.mallala.sa.gov.au for property owners to apply to be eligible to receive the benefits of the Single Farm Enterprise provisions.

In 2013/2014 it was determined that the Fixed Charge be set at a modest level. As such the Fixed Charge was levied at $100. Given that this is only the third year of the new rating structure and there will be some ratepayers who are expected to be adversely affected by the new structure for the third year, the proposal is for the Fixed Charge to remain at $100 in 2015/2016. The total revenue expected to be raised from the Fixed Charge will be approximately $421,600.

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Annual Business Plan 2015 - 2016

Service Rate/Charge Waste Collection Council currently provides a kerbside/collection point waste and recycling collection service detailed as follows: -

Fortnightly domestic waste collection,

-

Fortnightly mixed recyclables collection,

-

Fortnightly green waste collection within the townships of Mallala, Two Wells and Dublin.

With the change to the rating structure Council introduced a charge to the users of the collection service. This was implemented as a service rate, being an amount for the waste collection to recover costs of the dedicated service provided to specific properties.

The full cost of operating and maintaining this service for 2015/2016 is estimated to be once again $550,000.

Council proposes to recover the cost of the service excluding the green organic refuse service which will be paid from general rate revenue.

Due to a higher than expected take up of the waste collection service from those in the primary production area and through increased efficiencies the recovery amount that is proposed to be charged and collected through a service charge will remain at $180 for each property within the designated 3 bin service area (ie. collection of domestic, recyclable and green organic refuse); and within the designated 2 bin service area (ie. collection of domestic and recyclable refuse only). Where the service is provided to non-rateable land, a service charge is levied against the land.

There may also be a reduction in the amount charged for some rural landowners that have their bins collected at a collection point. Depending on the distance travelled to access the service, a reduction in the amount paid may be applicable as per Section 9B of the Local Government (General) Regulations 1999.

Mallala Township CWMS With the Mallala Community Wastewater Management Scheme (CWMS) construction complete and practical completion pending individual properties can be connected. As such pursuant to Section 155 of the Local Government Act 1999 a CWMS Annual service charge can be levied and imposed on all land to which Council provides or makes available the prescribed service for the 2015/2016 financial year.

The commencing annual service charge is based on a Prudential Review Council initiated to determine the long term costs associated with the construction of the scheme and the ongoing operating and maintenance costs over the life of the scheme which was modelled over 50 years. To achieve full cost recovery over the life of the scheme, the initial annual service charge for the 2015/2016 year is proposed to be $586 for each property unit.

It should be noted that there will be no connection fee for any existing property where a connection point is installed during the initial construction program. Connections to the CWMS for subdivisions after the initial construction phase will be charged at $4,500.

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Total budgeted operating expenditure excluding depreciation, for the initial year of operation for the Mallala CWMS is estimated at $40,000. This allocation is expected to be greater in future years when the 12 month warranty period is complete and the utilisation of the scheme increases based on connection rates.

Middle Beach CWMS The

Council

provides

a

Community

Wastewater

Management

Scheme

(CWMS)

(previously

septic tank effluent disposal (STED) system) to Middle Beach. The full cost of operating, maintaining and improving this service, together with eventual replacement costs, is recovered from the users through the levy of a service charge.

For 2015-16 Council has chosen to increase the levy by approximately 1.3% (representative of the increase in CPI) for the following service charge. Middle Beach - Occupied Land •

Large tanks - $405

•

Small tanks - $375

Payment Dates Council has determined that pursuant to Sec 181(2) of the Local Government Act 1999, rates will be payable in four equal instalments and that these instalments will be due and payable on: • • • •

1st Instalment – 18 September 2015 2nd Instalment – 4 December 2015 3rd Instalment – 4 March 2016 4th Instalment – 3 June 2016

NOTE TO RATEPAYERS: Any person experiencing hardship and who is unable to pay their property rates when due is encouraged to contact Council’s Rates Officer on 85270 200 for information regarding available payment options.

Late Payment Of Rates

The Local Government Act provides that Councils impose a penalty of a 2% fine on any payment for rates, whether instalment or otherwise, that is received late. A payment that continues to be late is then charged an interest rate, set each year according to a formula in the Act, for each month it continues to be late.

22

Annual Business Plan 2015 - 2016

Rate Rebates & Concessions Section 159 of the Local Government Act 1999 provides for Council to provide a rebate of property rates to ratepayers upon receiving a written application from the ratepayer based on eligible property use. Eligible property uses are, but not confined to; health services, community services, religious purposes and educational purposes.

Rate Concessions Until

this

year,

the

State

Government

funded

concessions on Council rates. These concessions were formerly available to 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 for any

purpose, including offsetting 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 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 your rate notice.

Sale of Land for Non-Payment of Rates The Local Government Act provides that a Council may sell any property where the rates have been in arrears for three years or more. The Council is required to notify the owner of the land of its intention to sell the land, provide the owner with details of the outstanding amounts, and advise the owner of its intention to sell the land if payment of the outstanding amount is not received within one month.

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Disclaimer A rate cannot be challenged on the basis of non-compliance with this document and must be paid in accordance with the required payment provisions.

Natural Resources Management Levy The Council area is serviced by the Adelaide and Mount Lofty Ranges NRM Board. The Minister determines the levy to be contributed by each council using the basis set out in the Board’s plan. The levy is collected by Council, on behalf of the boards, by using a separate rate against all rateable properties in the Council area.

This Council’s contribution to the NRM Board for 2015/16 has been proposed at $152,576. This represents an approximate increase of 2.1% on last years determined amount of $149,414.

Note: Council is simply operating as a revenue collector for the NRM Board and does not retain the revenue nor does it determine how the revenue is spent.

6. Funding the Business P lan Revenue Sources Council’s long-term financial sustainability is dependent upon ensuring that sufficient revenue is raised to meet all operating costs including administrative, governance and compliance costs, service delivery costs and capital acquisition, upgrade and renewal costs.

Council’s primary source of revenue is property rates, representing approximately 76% of total revenue. Details for this plan and budget are included in Section 5 – Rating Strategy.

24

Annual Business Plan 2015 - 2016

Other sources of revenue for the Council are: User Pay Charges set by Council These comprise charges for the Council’s fee based services and facilities such as Mallala CWMS service charge, road leases, property rent, burial fees, hall hire, rate searches, rubbish tip and slashing for fire prevention.

Statutory Charges set by State Government These are fees and charges set by regulation and collected by the Council for regulatory functions such as dog registration, building & development applications.

Grants and Contributions The Council normally seeks to attract as much grant funding as possible from other levels of government and major projects of wider State benefit are usually jointly funded in partnership with the State Government and other relevant parties.

Funds Strategy The Council’s funds strategy is to be flexible enough to meet short term cash flow demands as well as achieve long term financial sustainability goals. As part of the Strategic Plan the Long Term Financial Plan provides a blueprint for Council’s financial performance and position over the term of the plan.

Investment Strategy Management aims to place all surplus cash into an investment portfolio with the financier providing the greatest net investment return to optimise interest and bonus revenue. Historically this has proven to be the Local Government Finance Authority, however rates from other financiers are considered on a periodic basis.

Loan Strategy Council monitors current and future loan requirements including repayment to ensure debt levels and loan servicing are managed within the parameters of the KPI’s shown in the following section. Council’s aim is to ensure that new borrowings stay within in the target KPI’s for Net Financial Liabilities (target 100%), and Interest Cover Ratio (target 8%). Given the investment Council is making in its road, CWMS, Two Wells development and other growth projects, Council is expected to be outside of these targets over the next few financial years.

Borrowing Strategy Council borrows to fund capital acquisition, renewal or upgrade projects. Council will need to borrow $2.0M to fund its capital program for 2015/2016. An overdraft facility of $1.5M is also maintained to better enable the management of operational cash needs throughout the financial year.

The use of borrowed funds enables Council to ensure that cost of providing future benefits to the community is not borne entirely by the current generation of rate payers, balancing inter-generational equity.

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7. Sustainability Index Application of Council’s Financial Sustainability Principles Council has measured and reported its Key Performance Indicators (KPI’s) since adopting its Financial Sustainability principles in 2008. These principles, summarised below a list of the key performance indicators are an integral part in the preparation of the Annual Business Plan & Budget.

Looking at the below Financial Indicators table for this upcoming 12 month period, it shows a declining trend, but as these indicators are projected out as per the 10 year timeframe of Councils Long Term Financial Plan there is gradual improvement as the financial benefits of proposed development projects begin to be realised.

Council is currently in a development phase with many high resource projects in the implementation and commencement stage, consuming costs at a greater rate, but will generate future benefits, for example Mallala CWMS.

Draft Budget Financial KPI's 2015- 2016 Indicator

2012-13 Actual

2013-14 Actual

2014-15 Budget Current

2015-16 Draft Budget

Indicator 1:

Operating Surplus (‘000)

272

(667)

(939)

(2,143)

Indicator 2:

Operating Surplus Ratio

4%

(10%)

(13%)

(23%)*

Indicator 3:

Net Financial Liabilities ‘000)

$7,408

$7,744

$9,244

$10,761

Indicator 4:

Net Financial Liabilities Ratio

69%

89%

94%

112%

Indicator 5:

Interest Cover Ratio

3.9%

3.8%

4.7%

5.3%

Indicator 6:

Asset Sustainability Ratio

56%

22%

46%

83%

Indicator 7:

Asset Consumption Ratio

76%

71%

70%

72%

* Note: Calculation of this ratio prior to 1st July 2015 used Rates - general and other, net of NRM Levy as the denominator. The new method for calculation uses total operating revenue as the denominator.

26

Annual Business Plan 2015 - 2016

Targeted ratios

Indicator 1

Operating Surplus

To achieve a breakeven operating position or better over any 5 year period.

Indicator 2

Operating Surplus Ratio

To achieve an operating surplus ratio of between (5%) to 10%

Indicator 3

Net Financial Liabilities

To achieve net financial liabilities no greater than annual operating revenues and not less than zero.

Indicator 4 Net Financial Liabilities Ratio

Net Financial Liabilities Ratio greater than zero but less than 100% of operating revenues.

Indicator 5 Interest Cover Ratio Net interest greater than zero but less than 8% of operating revenues.

Indicator 6 Asset Sustainability Ratio Capital outlays on renewing/replacing assets net of the proceeds from sale of replaced assets are greater than 90% but less than 110% of the level proposed in the Infrastructure and Asset Management Plan (I&AMP).

Indicator 7 Asset Consumption Ratio

The average proportion of "as new condition" left in assets is greater than 40% and less than 80%.

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8. Appendix 1: Budgeted Annual Statements Budget Overview

The 2015-16 Budgeted Annual Statements have been developed within the Council’s overall planning work. The Council’s suite of strategic management plans includes, a 10-year long-term financial plan, and supported by infrastructure asset management plans for the various categories of assets held by Council.

The Annual Business Plan as adopted provides a linkage between the Council’s suite of strategic management plans and its annual budget.

Council received advice from the Local Government Grants Commission on 29 June 2015 that 50% of the 2015/2016 Financial Assistance Grants would be prepaid in the 2014/2015 year. The amount received

by Council on 30 June 2015 was $658,872. This early payment has improved the 2014/2015 result and has a negative affect on the 2015/2016 budgeted deficit. Over the two financial years, 2014/2015 and 2015/2016 there will be no affect on the net operating result.

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Annual Business Plan 2015 - 2016

Budgeted Income Statement

Draft Budget 2015-16 $’000 REVENUE Rates

Statutory Charges

CWMS Charges

User Charges

Grants, subsidies and contributions

Reimbursements

Other Revenues

TOTAL REVENUES

EXPENSES Employee Costs

Materials, contracts & other expenses

Finance Charges

Depreciation, amortisation & impairment TOTAL EXPENSES

Operating Surplus(Deficit) before Capital Amounts

Share of profit - joint ventures & associates

Share of loss - joint ventures & associates Net gain/(loss) on disposal or revaluation of assets Amounts specifically for new or upgraded assets Physical Resources Received Free of Charge

NET SURPLUS/(DEFICIT)

7,873

373

176

77 685

264 31 9,479

4,517 4,556

493

2,056 11,622

(2,143)

0

0

(36) 395

0

(1,784)

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Draft Budgeted Balance Sheet as at 30 June 2016

$’000 ASSETS Current Assets Cash and Cash Equivalents

747 Trade and Other Receivables 585

Other financial assets

0 Inventories

81 TOTAL CURRENT ASSETS

1,413

Non-current Assets Equity accounted for Regional Subsidiaries

4,966 Land

13,168 Buildings

14,836

Road Infrastructure 42,246

3,338 Other Infrastructure

3,627 Equipment Other Assets

461 TOTAL NON-CURRENT ASSETS 82,642 84,055 TOTAL ASSETS

LIABILITIES Current Liabilities Trade and Other Payables 1,189 7,560 Borrowings 464 Short Term Provisions TOTAL CURRENT LIABILITIES 9,213

Non-current Liabilities Long Term Provisions 34 Long Term Borrowings 2,846 TOTAL NON-CURRENT LIABILITIES 2,880 TOTAL LIABILITIES 12,093

NET ASSETS 71,962

EQUITY 26,912 Accumulated Surplus Asset Revaluation Reserve 44,936 Other Reserves 95

TOTAL EQUITY 71,962

30

Annual Business Plan 2015 - 2016

Draft Budgeted Statement of Changes in Equity for year ended 30 June 2016

ACCUMULATED SURPLUS Balance at end of previous reporting period Net Result for Year Transfers from Other Reserves Transfers to Other Reserves Balance at end of reporting period

ASSET REVALUATION RESERVE Balance at end of previous reporting period Gain on revaluation of infrastructure, property, plant & equipment Transfer from/to Accumulated Surplus on sale of infrastructure, property, plant & equipment Balance at end of reporting period

GENERAL RESERVE SUMMARY Balance at end of previous reporting period Transfers from Accumulated Surplus Transfers to Accumulated Surplus Balance at end of reporting period

TOTAL EQUITY AT END OF REPORTING PERIOD

$’000 28,725 (1,784) 26,941 44,926

44,926 95 95 71,962

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Draft Budgeted Cash Flow Statement for year ended 30 June 2016

CASH FLOWS FROM OPERATING ACTIVITIES Receipts Operating Receipts Interest Receipts Payments Payments Finance Payments

NET CASH PROVIDED BY (OR USED IN) OPERATING ACTIVITIES

CASH FLOWS FROM INVESTMENT ACTIVITIES Receipts Grants specifically received for new or upgraded assets Sale of replaced assets Payments Expenditure on renewal/replacement of assets Expenditure on new/upgraded assets

NET CASH PROVIDED BY (OR USED IN) INVESTING ACTIVITIES

CASH FLOWS FROM FINANCING ACTIVITIES Receipts Proceeds from Borrowings Payments Repayments from Borrowings

NET CASH PROVIDED BY (OR USED IN) FINANCING ACTIVITIES

NET INCREASE (DECREASE) IN CASH HELD

CASH and CASH EQUIVALENTS AT BEGINNING OF PERIOD

CASH and CASH EQUIVALENTS AT END OF PERIOD

32

$’000

9,479 0 (8,923) (493) 63

395 183 (1,835) (726) (1,982)

2,000 (560) 1,440 (479) 567 747

Annual Business Plan 2015 - 2016

Draft Budgeted Uniform Presentation of Finances for year ended 30 June 2016

Operating Revenues Less Operating Expenses

Operating Surplus/(Deficit)

Less: Net Outlays on Existing Assets Capital Expenditure on renewal and replacement of Existing Assets Less: Depreciation Less: Proceeds on Sale of Replaced Assets

Less: Net Outlays on New and Upgraded assets Capital Expenditure on New and Upgraded Assets Less: Amounts received specifically for New and Upgraded Assets Less: Proceeds from Sale of Surplus Assets

Net Lending / (Borrowing) for Financial Year

$’000 9,479 11,622 (2,143) 1,835 2,056 183 (404) 726 395 0 331 (2,069)

33

Draft Budget Financial Indicators for the Period Ending 30 June 2016

Operating Surplus Operating Surplus (deficit) before Capital Amounts $'000)

Operating Surplus Ratio Operating Surplus/(deficit)

Total Operating Revenue

(2,143) (23%)

This ratio expresses the Operating Surplus as a percentage of Total Operating Revenue

Net Financial Liabilities ($' 000)

10,761 Total Liabilities less financial assets (excluding equity accounted investments)

Net Financial Liabilities Ratio Net Financial Liabilities Ratio Total Operating Revenue less NRM levy

Interest Cover Ratio Net Interest Expense Total Operating Revenue less NRM levy

Asset Sustainability Ratio Net Asset Renewal Infrastructure and Asset Management Plan required expenditure

112%

5.3%

83%

Net asset renewal expenditure excludes expenditure on new and additional assets This indicator represents best estimate subject to review of current Assest Management Plans

Asset Consumption Ratio Carrying value of depreciable assets Gross value of depreciable assets

72%

Total carrying value of depreciable assets divided by total reported value of depreciable assets before accumulated depreciation

34

Annual Business Plan 2015 - 2016

Annual Business Plan DRAFT

The District Council of Mallala Annual Business Plan, covering the period 1 July 2015 to 30 June 2016, has been prepared involving input from Council’s Elected Members, Management and Staff and the Community through our community consultation process.

The plan is referenced and aligned with Council’s strategic plan, long term financial plan and asset management plans, all of which have been previously adopted by Council.

DISTRICT COUNCIL OF MALLALA 2a Wasleys Road, Mallala SA 5502 PO Box 18, Mallala SA 5502 Tel 08 8527 0200 Fax 08 8527 2242 Email info@mallala.sa.gov.au www.mallala.sa.gov.au

www.mallala.sa.gov.au www.mallala.sa.gov.au

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