Financial commentary

Council staff commenced the preparation of the draft 2021/22 Budget in December 2020. To minimise some of the financial constraints and considerations impacting local government generally and Council specifically, and to avoid excessive bids for funding which could not be met, the draft 2021/22 budget parameters included: „ Alignment with the parameters and projects identified in the Long Term Financial Plan (LTFP), adopted by Councillors at the 13 March 2019 General Meeting and endorsed by

Councillors at various briefing workshops held during

November 2020 and February 2021. These briefing workshops were held to consider revised economic conditions impacting Council's financial position and plan for any necessary budget adjustments as required in future annual budgets. „ The main LTFP projects for inclusion in the annual 2021/22 budget include: Asquith to Mount Colah public domain of $2 million (part allocation), Footpath budget increased to $1 million, Heritage Planning Study $425K, and major project budget allocation for 2021/22 (part allocation) of Hornsby

Park Redevelopment of $18 million and Westleigh Park

Redevelopment at $3 million. „ A general rate increase of 2% for 2021/22 – i.e. the percentage increase approved by IPART. „ Zero external loan borrowing and the continuation of prudent financial management. „ A nil increase to Divisional expenditure (net of direct labour) for material and contract expenditure – this is despite substantial price increases, particularly for construction materials. Any increase has been required to be offset by productivity improvements or reviewing service provision. „ Direct salaries and wages to include provision for the Local

Government (State) Award increase of 2% calculated on 50 pay weeks. The two-week reduction from a full year represents organisational savings which occur as a result of the average delay in replacing staff members who retire/ resign/etc. and/or productivity improvements that are required. „ The use of Council staff where possible to undertake grant funded projects and Section 7.11 and 7.12 Development

Contributions projects. „ Increase superannuation from 9.5% to 10% in line with statutory requirements. „ Allowable insurance premium increase ranging from 10% to 20% based on quotes received. „ Office relocation and other alternative site costs required due to the closure of the Administration Centre building. The publicly displayed draft Budget for 2021/22 included an estimated surplus of $1.392 million and was developed in line with Council’s Long-Term Financial Plan (LTFP) parameters which had a focus on the continuance of current service levels and some additional priorities identified by Councillors above recurrent allocations.

As noted in General Manager’s Report No. GM16/21 (considered at the 14 April 2021 General Meeting) the budgeted cash surplus of $1.392 million was $100K below that forecasted in the revised LTFP of $1.492 million. Two additional expenditure requests considered by Councillors for inclusion into the 2021/22 Annual Budget were subject to the potential identification of savings during the exhibition period. The two additional requests were: „ A net recurrent budget of $72K representing Council’s share of the expenditure is required to implement and maintain newly identified bushfire asset protection zones within the

Shire. The achievement of this initiative is largely dependent upon the financial contribution from NSW Rural Fire Service. „ A recurrent budget of $15K is required to implement initiatives recommended by the Hornsby Aboriginal and

Torres Strait Islander Consultative Committee such as cultural awareness training and an increased number of

Welcome to Country and Smoking Ceremonies at the beginning of Council Meetings and Citizenship Ceremonies.

During the exhibition period, service reviews were undertaken of the Financial Services, Information and Technology and Land and Property Services Branches within the Corporate Support Division. The outcome from these service reviews identified a range of efficiencies that will enable improved service provision in the areas of asset management, financial governance, strategic property management, cyber security and business transformation. In addition to improved service provision, an amount of $92K was identified as recurrent net labour savings that were applied to fund the two additional expenditure requests stated above. The savings identified are enough to fund the additional expenditure requests, which have been added to the Annual Budget and Operational Plan 2021/22. The net impact of the additional expenditure requests and savings identified is an increase to the revised forecast surplus from $1.392 million to $1.397 million. The surplus is satisfactory to enable Council to respond to budget shocks that may occur over the financial year. This often includes natural disasters such as storm events, infrastructure failure and/or capital project increases.