Ku ring gai councils submission to the nsw boundary commission review by Ku-ring-gai Council

MERGER PROPOSAL SUBMISSION 1

KU-RING-GAI COUNCIL’S SUBMISSION TO THE COUNCIL BOUNDARY REVIEW NSW

MERGER PROPOSAL Ku-ring-gai Council & Hornsby Shire Council (part) FEBRUARY 28, 2016

KU-RING-GAI COUNCIL 2

ACKNOWLEDGEMENT OF COUNTRY We recognise the traditional owners of the land and pay tribute to elders past and present.

2014 WINNER

For excellence in local government

FURTHER READING

kmc.nsw.gov.au/mergersubmission KU-RING-GAI COUNCIL 818 Pacific Highway, Gordon NSW 2072 P 02 9424 0000 | E kmc@kmc.nsw.gov.au | W kmc.nsw.gov.au

MERGER PROPOSAL SUBMISSION 3

EXECUTIVE SUMMARY

PART 1 ISSUES

NSW Government’s merger proposal

A combined Ku-ring-gai and Hornsby Shire – creation of a super council

Scale and strategic capacity - each council satisfies the criteria

The Ku-ring-gai community says NO to the merger

Failings of the Government reform process for NSW local government

PART 2 ASSESSMENT OF LEGISLATIVE FACTORS SECTION 263(3) OF LOCAL GOVERNMENT ACT, 1993

Financial advantages and disadvantages

Communities of interest and geographic cohesion

Historical and traditional values

Attitudes of residents and ratepayers

Elected representation

Impact on service delivery and facilities

Impact on employment of staff

Impact on rural communities

Case for wards

Opinions of diverse communities

Other relevant factors

GLOSSARY 64 ACRONYMS 65 REFERENCES 66 APPENDICES 68

KU-RING-GAI COUNCIL 4

Executive summary Since 2013 the NSW Government has proposed the merger of Ku-ringgai and Hornsby Shire Councils. Ku-ring-gai Council (Council) has responded to this proposal and participated in the reform process by submitting a number of written submissions to the NSW Government. It is not local government reforms in general that Council opposes. It is the inconsistent methodology and process of reform that is being imposed on modern, financially viable and effective local government organisations like Ku-ring-gai Council that is objectionable. The NSW Government’s Fit for the Future reform program is largely premised on the argument that bigger is better. However, this assumption is contradicted by a large body of research and real life experience that challenges that proposition. There is a distinct lack of evidence to support the government’s claims, and there is also hard evidence that forced amalgamations are strongly opposed by residents and ratepayers.1 This bigger is better argument has been applied in the case of Ku-ring-gai and Hornsby Shire councils’ proposed merger, where each council satisfies all key financial performance benchmarks, yet were deemed ‘not fit’ by IPART and assessed as having limited scale and capacity to effectively deliver on behalf of residents and meet future community needs. IPART also assessed a number of

other NSW councils as ‘not fit’, which are not being forcibly merged.2

2016/17. This was also confirmed by IPART.7

There is absolutely no evidence that links population size to the financial performance of a council, and there is demonstrable evidence that some of NSW’s largest councils perform poorly.3

Council’s strong financial position has been further reinforced through an independent review carried out by the NSW Government’s Treasury Corporation (TCorp).8

The Ku-ring-gai local government area is already large by Sydney metropolitan standards. Its location along the railway corridor will result in a population already estimated to exceed 150,000 in 15 years from now, with further increases inevitable to accommodate Sydney’s population growth. The most recent analysis of publicly available data from all 152 NSW Councils for the 2014/2015 financial year shows that 4 of the largest councils in NSW, with an average population of 227,000, made an average loss of $1.7 million.4 In comparison Hornsby Shire and Ku-ring-gai councils were ranked 3rd and 6th respectively in terms of operating surpluses out of all NSW councils.5 Furthermore, Council has delivered ten straight years of operating surpluses after depreciation. The net operating result for 2014/2015 was a surplus of $22.5 million after allowing for the depreciation expenses on Council’s assets.6 Council has met all aspects of the financial sustainability measures established by the NSW Government, and will meet all seven Fit for the Future financial benchmarks by

Australian Centre of Excellence for Local Government, Consolidation in Local Government: A Fresh Look, Volume 1, May 2011. Independent Pricing and Regulatory Tribunal, Assessment of Council Fit for the Future Proposals: Local Government - Final Report, p 55, October 2015. 3 LG Solutions, Analyser: Published Financial Statements, 2013/14. 4 LG Solutions, Analyser: Published Financial Statements, 2014/15. 5 LG Solutions, Analyser: Published Financial Statements, 2014/15. 1

Council is not only in excellent financial shape; it also excels in the service it provides to residents. The quality of services and projects provided to our community was formally recognised in 2014 when we received the AR Bluett Award for being the most progressive metropolitan council in NSW. The NSW Government’s proposal to merge Ku-ring-gai with Hornsby Shire is perplexing for a number of reasons. Leaving aside the fact that Ku-ringgai is indisputably a strong council both financially and in terms of the services it provides, the KPMG report which underpins the government’s merger proposal does not include detailed information which would allow a proper financial assessment of the Merger Proposal. Council recently commissioned chartered accountants BDO to review and assess the merger as proposed. BDO was unable to complete this task due to lack of information and advised Council as follows: “The merger proposal does not contain sufficient information for us to conclude on the merits of merging the two councils.” 9 Of particular concern is the fact that the KPMG report was constructed using old financial data from 2013/14

Ku-ring-gai Council’s 2014/15 Annual Report, p21. [accessed 23 February 2016] www.kmc.nsw.gov.au/Annualreport Independent Pricing and Regulatory Tribunal, Assessment of Council Fit for the Future Proposals: Local Government - Final Report, October 2015. 8 TCorp, Financial Sustainability of the New South Wales Local Government Sector: Findings, Recommendations and Analysis, April 2013. 9 Refer to Appendix A. 6

MERGER PROPOSAL SUBMISSION 5

that predates Council’s previous submission to IPART. This body of work reinforced Council’s financial sustainability across all criteria established by government as confirmed by the IPART findings. Numerous errors and omissions in the KPMG report have been identified and where possible quantified in this submission. Key anomalies include the calculation of redundancy costs using Commonwealth provisions rather than those in the State Award which are twice as onerous, and basing the savings on reducing councillor numbers to only ten rather than fifteen as contained in the government’s proposal. Of great concern to both councils is that the merger proposal does not assess the financial impact of transferring part of Hornsby (Epping Town Centre) to Parramatta. The nature of development and land values in this area will generate a disproportionate loss of income in the Hornsby Council area. This will result in an annual financial impact of $6.4 million.10 It is difficult to understand how forecast savings can be relied upon given that KPMG did not even contact Hornsby Council to understand the extent of lost income from the area proposed to be given to Parramatta and its flow-on effects for the merged council’s financial ratios and overall capacity to fund services and projects. Notwithstanding all the issues canvassed in the financial analysis, the $70 million total saving identified

in the Merger Proposal through merging Ku-ring-gai and Hornsby Shire councils is only 1.4% of operating revenue each year over a 20 year time horizon. This represents an average saving of $11 per person each year.11 Furthermore, after adjusting for the errors and omissions in the KPMG report it is shown that a merger of Ku-ring-gai and Hornsby would be detrimental to the residents and ratepayers of both council areas. Rather than a saving, the proposed merger would result in a net cost of $82.1 million over 20 years. If the cost of equalising services is taken into account, the net cost of the merger increases to $283.5 million over 20 years. There is no case for the proposed merger on financial grounds. Council has a demonstrated track record in delivering large strategic projects and outcomes for our community, whilst partnering effectively with both state and federal governments. Council functions as a modern organisation with staffing capacity and expertise at a level to deliver excellence and the resources to attract professionals into leadership and specialist roles.12 Our integrated planning, financial and service review work has established the platform for us to embrace the local government reform agenda. Council has undertaken a rigorous process of communication and community consultation regarding the merger proposal. This included an independently conducted and

Hornsby Shire Business Paper, General Meeting, 10 February 2016, [accessed 23 February 2016] http:// businesspapers.hornsby.nsw.gov.au/Open/2016/02/GM_10022016_AGN_WEB.htm Calculation: ($70 million/avg pop (270,000+350,000)/2) / 20 years) = $11 per person pa – Note: excludes Epping 12 See page 51 10

statistically valid survey, with 79% of those surveyed indicating a strong preference to standalone. At the recent public inquiry our community consistently canvassed to the Delegate that Ku-ring-gai remain a standalone Council. A merger with Hornsby Shire Council would lead to higher rates for Ku-ring-gai residential ratepayers due to disparities in land value, decreased levels of service, less representation, exposure to significant risk associated with remediating the Hornsby Quarry, reduced environmental resource management and diminished communities of interest and societal connectedness. For the reasons stated above and within this submission Council, on behalf of the community of the Ku-ring-gai Local Government Area, restates for the public record, its desire to remain a standalone entity.

Cheryl Szatow, Mayor

John McKee, General Manager

KU-RING-GAI COUNCIL

PART 1: ISSUES

NSW Government’s merger proposal In October 2013 the Independent Local Government Review Panel (ILGRP) released its final report Revitalising Local Government which recommended wide-ranging structural reform and changes to improve the local government sector. In this report it was recommended that Ku-ring-gai and Hornsby Shire Councils amalgamate or combine as a strong Joint Organisation. The foundation for the recommendation was based on a projected population of 350,000 by 2031 and strong socio economic urban links. In response, the NSW Government initiated the Fit for the Future reforms that required each council to selfassess against key performance indicators and submit proposals demonstrating how they would meet future community needs. In 2015, the NSW Government appointed the Independent Pricing and Regulatory Tribunal (IPART) to assess each council’s submission. Both Ku-ring-gai and Hornsby Shire Councils submitted Improvement Proposals to remain stand alone councils. However, Hornsby Shire Council stated that if required to merge, its preferred partner would be Ku-ring-gai Council. In October 2015, IPART determined that Ku-ring-gai and Hornsby Shire Councils each satisfied key financial performance benchmarks. Yet, IPART concluded that neither council is ‘fit’ to stand alone and that a merger is needed to achieve the required scale and capacity to meet the needs of residents now and in the future.

The proposal includes a number of benefits of the merger for Ku-ring-gai and Hornsby including the following; ■■ The proposed merger will create a council better able to meet the needs of the community into the future and will provide significant benefits for the community; ■■ a total financial benefit of $90 million over a 20 year period that can be reinvested in better services and more infrastructure; ■■ a projected 34 per cent improvement in annual operating results; ■■ reducing the reliance on rate increases through Special Rate Variations (SRVs) to fund local infrastructure; ■■ greater capacity to effectively manage and reduce the infrastructure backlog across the two councils; ■■ improved strategic planning and economic development to better respond to the changing needs of the community; ■■ effective representation by a council with the required scale and capacity to meet the future needs of the community; and ■■ providing a more effective voice for the area’s interests and better able to deliver on priorities in partnership with the NSW and Australian governments.

In January 2016, the NSW Government released its Merger Proposal for Ku-ring-gai and Hornsby Shire Councils. The proposal is consistent with the 2013 findings of the ILGRP as well as the IPART’s 2015 assessment.

NSW Government, Merger Proposal: Hornsby Shire Council (part) Ku-ring-gai Council, January 2016

The NSW Government further states that; “The merger will provide an opportunity to better allocate future residential development across the new Council area, particularly around the strategic centre of Hornsby and relieve pressure on existing suburban neighbourhoods. Ensure challenges associated with population growth and housing development are not unreasonably concentrated in particular suburban neighbourhoods, and preserve the unique heritage and characteristics across Hornsby and Ku-ring-gai. With the merger savings, NSW Government funding of $20 million and a stronger voice the new council will be better able to provide the services and infrastructure that matter to the community, projects like: ■■ improving the quality and health of waterways, catchments, parks and open space areas; ■■ investing in wastewater infrastructure to ensure clean waterways; ■■ improving and renewing local infrastructure assets including roads, footpaths, cycleways and drains; and ■■ the revitalisation of Lindfield, Turramurra and Gordon town centres” 13 Responses to the NSW Government’s merger proposal statements have been assessed for accuracy and relevance, and are included in this submission, in addition to Council’s address of the legislative factors that the delegate must consider under Section 263 (3) of the Local Government Act, 1993 when examining this merger proposal.

MERGER PROPOSAL SUBMISSION

A combined Ku-ring-gai and Hornsby Shire creation of a super council

The current population size of Ku-ringgai and Hornsby Shire Councils as stand alone councils is already comparable to other proposed population sizes for merged councils in northern Sydney. The first graph compares population sizes for Ku-ring-gai and Hornsby as stand alone councils and as a merged entity, with the other proposed population sizes in merged Northern Sydney councils for both 2014 and 2031. The combined population of the proposed merger between Ku-ring-gai and Hornsby Council estimated to grow to 350,000 people by 2031, as shown on the graph top right. This would be significantly larger than any other Northern Sydney council.

PROPOSED MERGER – LARGEST POPULATION IN NORTHERN SYDNEY Why is a population of 150,000 (eg. Pittwater and part Warringah) acceptable for a merged Council yet a population of 160,000 for Hornsby as a stand alone council not? And if numbers are not important – then why merge Ku-ring-gai which in less than 15 years will have a projected population of 157,000? The NSW Government’s definition of an ideal population number appears to change depending on location, from the initial estimate in the Sansom Report of 250,000- 300,000.

Population – Ku-ring-gai and Hornsby KU-RING-GAI IScompared RELATIVELY LARGE NOW to other merged Councils (2014 and 2031 figures). 14

Scale in square kilometres 600

540

500

455

400 300

214 200

100

14 15

Area: Ku-ring-gai and Hornsby compared to other merged Councils

The middle graph (scale in square kilometres) compares the geographic size of a merged Ku-ring-gai and Hornsby Council, shown on the far left, with other proposed Northern Sydney councils. The combined Ku-ring-gai and Hornsby area would be more than double the size of the next largest merged council, being Pittwater and Warringah, as shown third from the left. The existing Hornsby Council is by far the largest council area in Northern Sydney, as shown second from the left. Ku-ringgai as it currently stands, shown in the middle, would still be the third largest if the other Councils were merged as proposed. In the context of other merger proposals across Northern Sydney, it is clear that this merger is out of proportion both in terms of geographical area and population size (bottom graph).

2031 figures are based on Ku-ring-gai population of 120,978

Scale – Ku-ring-gai Hornsby toprojected other (ERP 2014) and and Hornsby populationcompared 149,082 with a 30% increase. merged Councils

270,060 KU-RING-GAI HORNSBY

140,681 PITTWATER & WARRINGAH

164,094 HUNTER’S HILL, LANE COVE & CITY OF RYDE

The indicative population of the merged council is based on Ku-ringgai 120,978 and Hornsby 168,614

153,008 MANLY, MOSMAN MUNICIPAL & WARRINGAH

145,191 NORTH SYDNEY & WILLOUGHBY CITY

(ERP 2014)15 combined with a 19,532 projected population loss from Epping area.

Profile.id Community Profile, Ku-ring-gai Council, [accessed 24 February 2016] http://profile.id.com.au/ku-ring-gai Profile.id Community Profile, Ku-ring-gai Council and Hornsby Shire Council, [accessed 24 February 2016] http://profile.id.com.au/ku-ring-gai and http://profile.id.com.au/hornsby.

KU-RING-GAI COUNCIL

PART 1: ISSUES

Scale and strategic capacity each council satisfies the criteria

The terms ‘scale and capacity’ and ‘strategic capacity’ have been used interchangeably by the NSW Government and its proxies throughout a number of reform documents and reports. The reality is that scale and capacity have been ill defined. The ILGRP asserted it to be a minimum population size (between 250,000-300,000). IPART’s methodology16 for assessing proposals stated; “All councils must demonstrate they either currently have, or will have sufficient scale and capacity related objectives identified in the ILGRP for their region, and the features of strategic capacity”. Now the NSW Government’s Merger Proposal document17 defines scale and capacity as: “a minimum requirement as it is the best indicator of a council’s ability to govern effectively and provide a strong voice for its community. At a practical level, this includes being able to: ■■ undertake regional planning and strategic delivery of projects; ■■ address challenges and opportunities, particularly infrastructure backlogs and improving financial sustainability; ■■ be an effective partner for the NSW and Australian governments on delivering infrastructure projects and other cross-government initiatives; and ■■ function as a modern organisation with: ●● staffing capacity and expertise at a level that is currently not practical or economically possible for small councils; ●● innovative and creative approaches to service delivery; and ●● the resources to deliver better training and attract professionals into leadership and specialist roles” Our detailed submission to IPART provided numerous examples of

Ku-ring-gai Council’s effective scale and strategic capacity. Included in this submission was evidence of Council’s resources (financial, assets and human) to provide leadership on local and regional planning, to advocate on behalf of our community and our superior strategic planning capacity. Ku-ring-gai Council is a successful, innovative and financially sound Council that is already large by national and international standards. Our proposal to remain a stand alone Council is at least as good as, or better than18 the amalgamation option with Hornsby Shire Council. Additionally: ■■ we ensure that our community’s long term objectives are delivered through continued prudent fiscal management, sustainable infrastructure and effective and efficient service delivery. ■■ Council meets all seven Fit for the Future benchmarks by 2016/17, which are maintained or improved thereafter19. Council is already a high capacity council, with a strong record in representing and serving its local community on metropolitan issues, and operating as a true partner of State and Federal agencies. This is demonstrated by Council’s: ■■ strong record of planned development that meets both metropolitan Sydney and local community objectives; ■■ strong record in integrated planning and land use planning consistent with Sydney’s status as a global city; ■■ strong record of planning for its centres consistent with the then Metropolitan Strategy and subregional delivery plans. ■■ delivering on State Government objectives including dwelling targets. ■■ successfully undertaking and completing numerous large scale major projects with high calibre staff, as recognised by the many awards received in recent years culminating in the prestigious 2014 AR Bluett Award.

Independent Pricing and Regulatory Tribunal, Methodology for Assessment of Council Fit for the Future Proposals, p 8, June 2015. NSW Government, Merger Proposal: Hornsby Shire Council (part) Ku-ring-gai Council, p5, January 2016. 18 Independent Pricing and Regulatory Tribunal, Methodology for Assessment of 16

In short, Council staff and elected Councillors are delivering the long term objectives of the Ku-ring-gai community and the NSW Government.

SUMMARY As we have demonstrated, the issue of scale being measured by population alone does not equate to strategic capacity. This section reiterates inconsistencies and weaknesses in ILGRP’s rationale that scale is a key component of strategic capacity. The NSW Government has its own views on what constitutes a ‘Fit for the Future’ Council, which is defined by the Office of Local Government20. “A Fit for the Future council is one that: ■■ Saves money on bureaucracy and administration, freeing up funds for front-line services and community facilities ■■ Can contribute to projects and tackle issues that impact on its residents and extend beyond the council boundary; and ■■ Has credibility and influence across councils, across governments and with industry.” It is important to note that the NSW Government has now decided to exclude Liverpool and Fairfield Councils from being forcibly merged despite the previous recommendations of ILGRP and IPART. So why is it that the NSW Government is still seeking to forcibly merge Ku-ring-gai and Hornsby Shire Councils? Both Ku-ring-gai and Hornsby Councils are demonstrably large in terms of area and population. Based on publicly available information Ku-ring-gai Council also believes that Hornsby meets the scale and capacity criteria stated in the current merger proposal.

Council Fit for the Future Proposals, p 8, June 2015. 19 Ku-ring-gai Council, Council Improvement Proposal – Template 2, [accessed 26 February2016] www.ipart.nsw.gov.au/Home/Industries/Local_Govt/Council_Portal/Applications/FFTF_2015/Ku-ringgai_Council?ot=LG_FFTF_Proposal 20 NSW Office of Local Government, Fit for the Future: A roadmap for Stronger, Smarter Councils, p8, September 2014.

MERGER PROPOSAL SUBMISSION

The Ku-ring-gai community says NO to the merger

The residents of Ku-ring-gai strongly support retaining Ku-ring-gai in its existing form 79% for a stand alone Council.

COMMUNITY ENGAGEMENT PROCESS Council used the following community engagement methods to inform the development of its IPART submission: 1. Independent Telephone Survey An independent market research consultancy was engaged by Council to develop and conduct a telephone survey to obtain the most accurate picture of community sentiment. A statistically valid and demographically representative telephone survey of 402 residents with a maximum sampling error of +/- 4.9% at 95% confidence was conducted by the independent market research company, Micromex in May/ June 2015. Results indicated that participant’s preferences were as follows: ■■ 79% indicated a preference to stand alone ■■ 21% preferred to merge with Hornsby Council

2. Opt-in community survey Council also conducted an opt-in voluntary community survey between 15 May and 12 June 2015. The survey, with similar questions to the independent telephone survey, was available online and in print. Council received 2077 responses to the opt-in survey. Results indicated participant’s preferences as follows: ■■ 77% indicated a preference to stand alone ■■ 23% preferred to merge with Hornsby Council

3. Community Meeting Council also conducted a community meeting to provide residents with an opportunity to discuss Ku-ringgai Council’s adopted position on Fit for the Future with senior council staff, ask questions and take part in a ballot. 29 community members attended of which 26 people completed a ballot paper. The results showed: ■■ 92% (24 people) oppose amalgamation. ■■ 4% (1 person) supports amalgamation. ■■ 4% (1 person) didn’t know. The public inquiry for both the Kuring-gai and Hornsby communities was held in two sessions on Wednesday 3 February 2016 at Pymble Golf Course. Both sessions of the inquiry were well attended, with around 300 residents at the 1-5pm session and approximately 200 at the 7-10pm session. There were a total of 99 speakers expressing the following opinons: ■■ Opposed to the merger: 92% ■■ Supports merger: 3% ■■ Undecided: 5%. The overwhelming majority of speakers were from Ku-ring-gai and opposed to the merger. Consistent comments from residents who spoke at the inquiry included; ■■ Both councils were assessed fit for the future except on scale and capacity which keeps changing. ■■ Both councils are larger than some not required to merge. ■■ The projected savings by merging Hornsby & Ku-ring-gai are 1.5% every year for 20 years. In the private sector the benchmark for mergers is savings of at least 10%

per year. ■■ The Liberals promised no forced mergers before the election. We feel betrayed. ■■ This is a politically driven process. The inquiry is nothing more than a charade. ■■ We don’t have enough information – release the KPMG report in full. In addition, several speakers called for a referendum or plebiscite on the issue.

KU-RING-GAI COUNCIL

PART 1: ISSUES

Failings of the Government reform process for NSW local government There have been a number of failings by the NSW Government during the reform process of restructuring local government. The lack of transparency in providing comprehensive financial analysis to enable local government to adequately assess the merits of proposed mergers, crippling deadlines, and limiting the decision making processes of councils are just a few. There have also been a number of controversial statements issued by the NSW Government throughout its reform agenda campaign. A few are cited below:

THE NEED FOR MERGERS – NSW GOVERNMENT’S STATEMENTS 1. Too many councils in Sydney Reducing the number of councils in Greater Sydney from 43 to 25 The NSW Government states that the structure of local government is antiquated and obsolete, and that the benefits of reducing the number of councils is purely to ensure that communities are provided with bigger, better services and infrastructure, better representation a reduction in red tape and less bureaucracy. It’s difficult to believe this, when the likelihood of a merged Ku-ring-gai and Hornsby Council would have a combined population estimated at nearly 290,000 people, and significantly larger than any other Northern Sydney council. How would this provide better representation, a reduction in red tape and less bureaucracy?

2. Over $2 billion in financial benefits for NSW over 20 years to invest in infrastructure, improve services or stabilise rates. Over $2 billion in financial benefits for NSW over 20 years to invest in infrastructure, improve services or stabilise rates.

The NSW Government engaged KPMG to undertake the financial analysis of the proposed mergers and report on the financial benefits to communities. The analysis undertaken by KPMG of the proposed mergers contained numerous errors and omissions in its assumptions. Obvious shortcomings visible in the limited information that is available from the high level summary documents released publically raises serious concerns about the integrity of the financial forecasts. Of particular concern is the fact that the KPMG report was constructed using data that predates the Council’s previous submission to IPART. This body of work reinforced Council’s financial sustainability across all criteria established by government as confirmed by the IPART findings. Other key anomalies include the calculation of redundancy costs using Commonwealth provisions rather than those in the State Award which are twice as onerous, and basing the savings on reducing councillor numbers to only ten rather than fifteen as contained in the government’s proposal. The Merger Proposal does not provide a balanced view, focussing only on the advantages of a merger, and there is no assessment of the risks involved nor how they may be mitigated. The refusal to release the entire KPMG report to local government and the broader public, has disabled any proper assessment of the modelling and assumptions used to determine the stated potential benefits.

3. Achieving as much consensus as possible IPART received 139 local council proposals from 144 councils including:

■■ 4 Merger Proposals (involving nine councils) ■■ 115 Council Improvement Proposals to remain stand alone, and ■■ 20 Rural Council Proposals If achieving consensus was a true objective of the NSW Government why are there forced mergers when 115 councils submitted Improvement Proposals to stand alone?

4. Councils representing communities of sufficient size to deliver efficiencies and reduce red tape – population of around 150,000 Ku-ring-gai Council has a population of 120,97821 and 151,000 by 2031. Hornsby Council has a population of 168,6143 and 201,750 by 2031 The combined population of the proposed merger between Ku-ring-gai and Hornsby Councils (residual) is estimated to grow to 350,000 people by 2031. This would be significantly larger than any other Northern Sydney council, and well beyond the population size stated by the NSW Government above. The premise for merging Ku-ringgai and Hornsby Shire councils was first raised by the ILGRP, predominantly on the basis of a projected population of 348,000 by 2031, to establish sufficient scale and capacity. The Australian Centre of Excellence for Local Government (ACELG) in its submission to IPART22 stated that in assessing scale and capacity; “We also note that IPART is considering including an appropriate minimum population size as on demonstration of sufficient scale. This is potentially problematic, as population size is a contested

Independent Pricing and Regulatory Tribunal, Assessment of Council Fit for the Future Proposals: Local Government - Final Report, p1, October 2015. Australian Centre of Excellence for Local Government, Letter to Independent Pricing and Regulatory Tribunal: Methodology for Assessment of Council Fit for the Future Proposals, 24 May 2015.

21 22

MERGER PROPOSAL SUBMISSION 11

indicator of local government performance, as noted in ACELG’s research report Consolidation in Local Government: A Fresh Look: In general, research and debate about an optimum size (population) for local government areas have been inconclusive, and there remain strongly opposed views as to whether larger amalgamated councils enjoy significant economies of scales.” Is the NSW Government determined to ignore its own statements and create a super council by forcing the merger of Ku-ring-gai and Hornsby Shire Councils?

5. Joining communities with common characteristics and connections The NSW Government’s merger proposal includes statements about the population and communities of a combined Ku-ring-gai Council and Hornsby Shire. These statements conclude that the two local government areas have very similar population characteristics, communities of interest and consistent physical geography. A number of these statements are incorrect. Statements based on total population and economic employment figures for both Ku-ringgai and Hornsby and are simplistic and misleading. Our analysis of physical geography, demographic, economic employment, journey to work characteristics, resident activity movement patterns and community perceptions clearly demonstrates real physical divisions and distinctly different communities of interest within the Hornsby Shire, and the community of Ku-ring-gai. The proposed merger will have significantly negative impacts on the community of Ku-ring-gai which will inherit a collection of disparate

communities of interest with a resultant loss of Ku-ring-gai’s own strong identity and values. For a merged entity there will be historic and unresolvable differences in resident connectedness and patterns of activity, major challenges in addressing the needs and priorities of different communities and a potentially unworkable local government.

6. The NSW Government is using the existing process set out in the Local Government Act to consider council mergers. “Our process will provide an objective assessment of the merger benefits and impacts, and give the community a chance to have a say before a final decision is made. Refer to comments made under point 1; and Further, two public inquiries were held for members of the Ku-ring-gai and Hornsby Shire communities to submit their views on the proposed merger. At these public inquiries 99 registered speakers attended with the overwhelming majority of speakers from the Ku-ring-gai local government area. Only 3 speakers spoke in favour of the merger of Ku-ring-gai and Hornsby Shire Councils. Should the NSW Government genuinely want to provide communities a chance to have a say in the final decision then it should be done with a Poll at the next Local Government election (March 2017) in accordance with Section 265, Local Government Act 1993. This will assist it in truly determining the attitude of the residents and ratepayers of Ku-ring-gai and Hornsby local government areas as is their democratic right.

7. Local government is stronger, future-focused and able to help deliver the housing, jobs and transport that communities need The fact is that the delivery of housing, jobs and transport for communities is the responsibility of State and Local Governments. Both levels of government participate differently in achieving these broader community outcomes. The State Government sets policy direction and Local Government implements policy in balance with community priorities. Local Government is future focussed on its community needs, and the long term objectives and aspirations of local residents are reflected in our Community Strategic Plan. Local Government plans, facilitates and responds to a range of community needs under the banner of the Integrated Planning & Reporting framework. This is a framework developed and endorsed by the NSW Government. A framework that is to become the central plank of the revised Local Government Act. It is the unfortunate truth that there is a culture within many State Government agencies that Local Government is the poor cousin. This has become more apparent in the oppressive approach taken towards local government reform. If State Government acted as a true partner with Local Government, both levels of government would collectively achieve great community outcomes across New South Wales, and still be able retain those elements most valued by local communities.

KU-RING-GAI COUNCIL

PART 2: ASSESSMENT OF LEGISLATIVE FACTORS - SECTION 263(3) OF LOCAL GOVERNMENT ACT, 1993

01 Financial advantages and disadvantages

263 (3) (a) the financial advantages or disadvantages (including the economies or diseconomies of scale) of any relevant proposal to the residents and ratepayers of the areas concerned.

SUMMARY There is no case for the proposed merger of Ku-ring-gai Council with part of Hornsby Shire Council on financial grounds. Rather, it would be to the detriment of the residents and ratepayers of both council areas.

KEY POINTS ■■ At best, the Merger Proposal claims that a merger would result in the potential for a saving of $70 million over 20 years, or $3.5 million pa, which equates to only 1.4% of the combined operating revenue of the merged councils. This is not a material financial saving. ■■ The forecast savings cannot be verified as there is no detailed business case available to support the Merger Proposal. Chartered Accountants BDO advised Ku-ringgai Council that: “The Merger Proposal does not contain sufficient information for us to conclude on the merits of merging the two councils.” ■■ There are numerous shortcomings in the Merger Proposal methodology: ●● it does not provide a balanced view, focussing only on the advantages of a merger. ●● there is no risk assessment. ●● it is based on out of date publically available information and there was no contact with the councils involved to obtain financial data. ■■ There are errors and omissions in the Merger Proposal which overstate the financial benefits by $152.1 million over 20 years. After adjusting for these errors and

omissions, the proposed merger would have an overall detrimental impact on the residents and ratepayers of both council areas as a whole by a net cost in current dollars of $82.1 million over 20 years. ■■ The Merger Proposal also failed to take into account the impact of services harmonisation after a merger. Ku-ring-gai Council spends more on its overall services per resident than does Hornsby Council. In order to provide equal services and service levels across the whole of the merged council area, additional funding of $201.4 million would be required for the former Hornsby area over 20 years. The total net cost of the merger would then become $283.5 million in current dollars over 20 years. ■■ The Merger Proposal also failed to take into account the impact of redistributing the residential rates burden between the two council areas, after the four year rates freeze announced by the NSW Government, because of the higher land values in Ku-ring-gai compared to Hornsby. The present value of this rates transfer from year 5 to year 20 of a merged council is $44.6 million. The total cost of the merger for the residents and ratepayers of the former Ku-ring-gai area, after

adjusting for the redistribution of rates, is $180.9 million in current dollars over 20 years. ■■ The Merger Proposal fails to consider the impact of a major project to remediate and embellish the Hornsby Quarry. The latest forecast of $52 million to undertake the entire project is at a conceptual stage and if the proposed merger proceeds, the ratepayers of the former Ku-ring-gai Council area will be exposed to a high risk of future cost increases. ■■ Due to the proposed 4 year rates freeze, Ku-ring-gai Council’s Environmental Levy would have to cease in 2018/19 and could not be renewed, a highly detrimental outcome to the environment due to a merger. ■■ Both Ku-ring-gai and Hornsby councils are already in a very strong financial position, being assessed by IPART in 2015 as being financially Fit for the Future. In 2014/2015 Hornsby and Kuring-gai councils were ranked 3rd and 6th respectively across all NSW councils in terms of the best net operating surplus. Improved financial sustainability cannot be considered an advantage of a merger between these two industry leading councils.

The Merger Proposal has been assessed to evaluate the financial advantages and disadvantages of the proposed merger. Where applicable, the Merger Proposal financial forecasts are adjusted for obvious errors and omissions to obtain a more realistic financial impact. The Merger Proposal relies heavily on forecast financial savings to justify the proposed merger of Ku-ring-gai Council with Hornsby Shire Council. It is stated on page 8 of the Merger Proposal that “Analysis by KPMG in 2015 shows the proposed merger has the potential to generate a net financial saving of around $70 million to the new council over 20 years.” If the financial forecast in the Merger Proposal is accepted at face value, the proposed merger savings amount to $70 million over 20 years, or $3.5 million pa, both expressed in current dollars. As a proportion of the total operating revenue of the merged entity of $243.1 million pa, this represents 1.4%. Based on the average forecast population over 20 years, the saving is $11 per person pa. The Merger Proposal also claims that a benefit of the merger is a 34% improvement in annual operating results. However consideration of the forecast merger saving relative to the operating result gives the illusion of a larger saving than is really the case. As the operating result is a net figure after subtracting expenses from revenues, it provides a much smaller denominator from which to calculate a percentage than would the overall budget. The percentage improvement in the operating result is not a valid indicator unless considered in the context of the overall budget and the actual quantum of the operating result, as it can be very misleading in isolation. For example, if the councils had an initial combined operating surplus of $1 and a merger of the councils increased the surplus to only $2, it would not be meaningful to promote

the operating surplus as being a 100% improvement. The forecast saving of 1.4% of operating revenue is very small, indeed not material in a financial sense, and could reasonably be considered an upper limit in the context of the limitation that the proposed merger only has the “potential” to make the forecast savings. Logic dictates that the proposed merger must therefore also have the potential not to make the forecast savings, or even make a net loss. The total financial benefit is expressed in the Merger Proposal as being $90 million over 20 years, being the addition of the $70 million in forecast savings with $20 million in NSW Government funding. However the $20 million in NSW Government funding cannot reasonably be considered a benefit of merging. This funding is discretionary and could equally be provided to individual stand alone councils in which case it could then be considered a benefit of not merging. The funding is a grant of taxpayer revenue that must be considered on a whole of government basis. If the NSW Government decided to provide a much larger grant to the merged council, say $1 billion, it would not be sensible to conclude that a financial benefit of the merger was $1.07 billion.

ABSENCE OF A DETAILED BUSINESS CASE FOR THE PROPOSED MERGER There is not enough information in the Merger Proposal or associated documents to support the claimed financial advantages. The information that has been made publicly available could at best be considered an executive summary. For example, the forecast net saving of $70 million is not broken down to identify the different components of merger implementation costs. In reference to the unsubstantiated forecast merger savings in the Merger Proposal, page 8 includes Footnotes 5 and 6 that refer to “NSW Government (2015), Local Government Reform: Merger Impacts and Analysis, December”. However this document only provides information about the consolidated impacts of mergers across NSW as a whole. There is no specific reference to the proposed merger of Ku-ring-gai with Hornsby Council. A subsequent document was released dated 19 January 2016 and titled “KPMG Outline of Financial Assumptions for Local Government Merger Proposals – Technical Paper”. However this document provides only high level assumptions common across NSW councils not specifically relating to the proposed merger of Ku-ring-gai with Hornsby Council. Ku-ring-gai Council requested the full KPMG report and was informed by the Merger Proposal Delegate, Mr Garry West, that “the reports of KPMG in addition to the material that is contained in the 35 merger proposals, have been released and are available on the website”. However as at the time of finalising this submission, the only reports available on the website councilboundaryreview.nsw.gov.au are those referred to in the above paragraph. That being the case, there is no detailed business case available to justify the proposed merger of Ku-ring-gai and Hornsby councils, with a combined revenue of $243 million and assets of $1.3 billion.

MERGER PROPOSAL SUBMISSION

INTRODUCTION

KU-RING-GAI COUNCIL 14

The absence of detailed supporting information by KPMG, or any other such business case, is entirely unsatisfactory as it is not possible for anyone (including the NSW Government and the Delegate) to check the accuracy of the underlying data, test the assumptions or assess the reasonableness of the conclusions. Ku-ring-gai Council engaged chartered accountants BDO to review and assess the merger proposal and supporting documentation. However, BDO was unable to complete this task due to lack of information and concluded as follows: “The Merger Proposal does not contain sufficient information for us to conclude on the merits of merging the two councils.” and; “Without detailed financial forecasts we are unable to quantify the risks associated with achieving the expected cost savings.” The BDO report is provided as Appendix A.

SHORTCOMINGS IN THE METHODOLOGY Putting aside the lack of a detailed business case, an analysis of the limited information that is available in the merger proposal shows that it has many shortcomings and cannot be relied upon to consider the financial advantages and disadvantages in its current form. This is because: ■■ The merger proposal does not provide a balanced view and focuses on identifying financial advantages without due consideration of the disadvantages. ■■ By stating that the proposed merger has the “potential” to make the forecast savings, the merger proposal acknowledges that the forecast saving is uncertain and yet does not identify any of the risks that may impact on the success of the merger, nor consider how they may be mitigated. ■■ KPMG prepared the forecast savings from high level publicly

available documents only and did not have any contact with Ku-ring-gai Council or Hornsby Council in the preparation of the merger proposal. This severely limits the extent to which the KPMG forecasts can be relied upon. This is supported by Ernst & Young in their report prepared for IPART in 2015 “Fit for the future Review of Business Case Estimates of Merger Net Benefits for Sydney Metropolitan Councils – IPART Confidential Final Report – October 2015”. Ernst and Young stated as follows: “We were not asked to and have not had any direct consultations with the Sydney metropolitan local councils or the authors of the relevant merger business cases. For this reason, our analysis does not take into account the specific operating circumstances and business characteristics of each of the local council merger scenarios examined, which is typically important in identifying the extent to which merger cost savings may be achievable in any particular instance.” (emphasis added) ■■ The Merger Proposal is based on out of date financial information from 2013/14 and did not take into account the information submitted to the NSW Government and IPART during the Fit for the Future process in 2015. This body of work reinforced both councils’ financial sustainability across all criteria established by the NSW Government as confirmed by IPART. An example of the consequences of using old financial information is demonstrated by the infrastructure backlog. Because reliance was placed on out of date financial reports, the Merger Proposal erroneously states on page 4 that the proposed merger could assist in “reducing the existing $171 million backlog across the Hornsby and Ku-ring-gai area.” The Merger Proposal incorrectly identifies the infrastructure backlog of the merged council based on old and superseded data from 2013/14.

The infrastructure backlog was an indicator that required improvement from the historical year 2013/14 for Ku-ring-gai Council. Achieving consistency in the calculation of the infrastructure backlog for all councils across the state has been a significant challenge for local government. There is much variability in the methodologies used and for that reason Ku-ring-gai Council engaged the services of Morrison Low, the same consultants used by the Office of Local Government and many other NSW councils including Hornsby, to review its backlog. As a result of the review Council identified that to be consistent with the way Morrison Low and the industry generally measures the backlog, a significant reduction to the calculation of the infrastructure backlog for Ku-ring-gai was required. As set out in Ku-ring-gai Council’s Long Term Financial Plan and submitted to IPART, Council has also implemented a new funding strategy to provide more funds for infrastructure renewal and maintenance, enabling all Fit for the Future benchmarks to be met by 2016/17. Ku-ring-gai Council has already reported an improved infrastructure backlog in its audited financial statements for 2014/15 and will achieve the Fit for the Future infrastructure backlog benchmark of 2% by 2016/17. As at 30 June 2015, the total combined backlog for both Ku-ring-gai and Hornsby councils was $34 million. Therefore the claim that a benefit of merging is reducing the $171 million backlog across both councils is based on a false premise. As assessed by IPART, both Ku-ring-gai Council and Hornsby Shire Council as stand alone councils have the capacity to effectively manage infrastructure, improve asset condition and meet all infrastructure asset ratios. ■■ The Merger Proposal includes erroneous base data which raises concerns about the financial

2016/006458

and maintenance, enabling all Fit for the Future Benchmarks to be met by 2016/17. Ku-ringgai Council has already reported an improved infrastructure backlog in its audited Financial Statements for 2014/15 and will achieve the Fit for the Future infrastructure backlog benchmark of 2% by 2016/17. forecasts. The impacts are It can be seen that the Ku-ring-gai Council was unknown as a detailed business error in the KPMG data originally overstated by 30 June 2015, forand both Ku-ring-gai and Hornsby councils case is As not at available. The errorsthe total combined wasbacklog significant this is a $12.9m. in theofMerger Proposal is been advised include:was $34 million. Therefore the claim cause great concern for that a benefit of merging Council has reducing the $171 million backlog across both councils isfinancial based on a false premise. the integrity of the that this incorrect data ●● Figure 5 on page 9 of the forecasts. for the operating revenue Merger Proposal by provides a both Ku-ring-gai Council and Hornsby Shire Council as stand-alone As assessed IPART, not relied upon in the chart showing the the projected ●● In the original KPMG Reportimprove asset was councils have capacity to effectively manage infrastructure, condition and financial forecasts, however operating ratio released in January 2016 the meet allperformance infrastructure asset ratios. this cannot be verified in of Ku-ring-gai and Hornsby amount of operating revenue the absence of a detailed councils. However the listed in the Council profiles • The merger proposal includes erroneous base data which raises concerns about the financial business case. forecasts. The impacts a detailed business case is not available. The errors operating performance ratio are unknown as (Figure 3 page 7, Merger

include: shown for Ku-ring-gai for the Proposal) was incorrectly The presence of errors in the limited  Figure on page provides the projected years 2016 – 20255appears to 9 of the Merger statedProposal at $129.8m for Ku- a chart showing base data that is available from the Operating Performance Ratio of Ku-ring-gai and Hornsby councils. However the be incorrect. ring-gai Council and $128.7m high level summary documents raises operating performance ratio shown for Ku-ring-gai for the years 2016 – 2025 appears The table and chart below for Hornsby. This was serious concerns about the integrity of to be incorrect. shows the correct Ku-ring-gai subsequently updated with the financial forecasts. It is reasonable operating performance ratio correct operating revenue to assume that there are likely to The table and chart below shows the correct Ku-ring-gai Operating Performance as per Ku-ring-gai LTFP 2013for Ku-ring-gai $116.9m and be more errors in the underlying Ratio as per Ku-ring-gai LTFP 2013-14 (Scenario 1) compared to KPMG data 14 (Scenario 1) compared to Hornsby $126.2m as per modelling. However this information is (sourced from the same document). KPMG data (sourced from the 2013/14 financial statements. not available. same document). The operating revenue for It can be seen that the error in the KPMG data was significant and this is a cause of great concern for the integrity of the financial forecasts.

Ku ring gai- KPMG ( Source LTFP 2013 -14) Ku ring gai - LTFP 2013/14 - Scenario 1

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 0.1% 1.5% 3.9% 4.2% 3.8% 3.3% 3.1% 3.2% 3.5% 3.6% FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 1.4% 5.6% 6.4% 6.0% 5.7% 5.2% 5.9% 5.9% 5.9% 5.9%

Ku ring gai‐ KPMG ( Source LTFP 2013 ‐14) Ku ring gai ‐ LTFP 2013/14 ‐ Scenario 1



1.5% 5.6%

3.9% 6.4%

4.2% 6.0%

3.8% 5.7%

3.3% 5.2%

3.1% 5.9%

3.2% 5.9%

3.5% 5.9%

Projected Operating Performance Ratio by Council (2016-2025)

Ku ring gai- KPMG Report Hornsby- KPMG Report

FY 2025

FY 2024

FY 2023

FY 2022

FY 2021

FY 2020

FY 2019

FY 2018

FY 2017

Ku ring gai - LTFP 2013/14

FY 2016

7.0% 6.5% 6.0% 5.5% 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0%

0.1% 1.4%

In the original KPMG Report released in January 2016 the amount of Operating Revenue listed in the Council profiles (Figure 3 page 7, Merger Proposal) was incorrectly stated at $129.8m for Ku-ring-gai Council and $128.7m for Hornsby. This 8

FY 2025 3.6% 5.9%

MERGER PROPOSAL SUBMISSION

S09638

KU-RING-GAI COUNCIL 16

ERRORS AND OMISSIONS IN MERGER PROPOSAL FINANCIAL FORECASTS Academic research has shown that forecast savings used to justify proposed amalgamations are optimistic and unrealistic. This is supported by comments from Ernst and Young in their report prepared for IPART in 2015 “Fit for the Future Review of Business Case Estimates of Merger Net Benefits for Sydney Metropolitan Councils – IPART Confidential Final Report – October 2015”. Ernst and Young stated as follows: “The available empirical evidence on the extent to which local council amalgamations will yield net savings in costs is mixed and tends to vary by activity. Econometric analysis does not provide strong support.” (emphasis added) An analysis of the Merger Proposal has identified errors and omissions that result in the forecast financial benefits being significantly overstated. These include: ■■ Failing to take into account the true impact of the transfer of part of Epping and Carlingford, south of the M2 Motorway, to Parramatta Council. ■■ Miscalculating redundancies based on Federal entitlements rather than the Local Government (State) Award 2014. ■■ Miscalculating savings from Councillor fees. ■■ Overstating the savings from materials and contracts. ■■ Providing only for a temporary IT solution without taking into account the long term costs of moving to a common IT platform. ■■ Failing to consider the cost of salary harmonisation/parity. ■■ Failing to consider the cost of increased market based remuneration for employees in a much larger council. ■■ Failing to adequately provide for the cost of new office fitouts, staff training, change management, rebranding and new statutory plans.

■■ Failing to consider the cost of services harmonisation. ■■ Failing to consider the impact of rates redistribution between Ku-ring-gai and Hornsby due to land value differences. The errors and omissions in the merger proposal are analysed in detail in this submission to identify a more realistic financial impact. The net financial benefit forecast in the merger proposal of $70 million over 20 years in current dollars is taken as the starting point and adjusted. A summary of the adjusted financial impacts is explained below.

SUMMARY OF THE IMPACT OF THE PROPOSED MERGER ON THE RESIDENTS AND RATEPAYERS OF BOTH COUNCIL AREAS ■■ After adjusting for errors and omissions in the Merger Proposal: The errors and omissions in the Merger Proposal overstate the financial benefits by $152.1 million over 20 years. After adjusting for this, the proposed merger would have a detrimental impact on the residents and ratepayers of both council areas as a whole by a net cost in current dollars of $82.1 million over 20 years (being the additional costs of $152.1 million to account for the errors and omissions, less the claimed $70 million in savings). ■■ After adjusting for errors and omissions in the Merger Proposal and also for services harmonisation: The Merger Proposal failed to take into account the impact of services harmonisation after a merger. Ku-ringgai Council spends more on its overall services per resident than does Hornsby Council. In order to provide equal service levels across the whole of the merged council area, additional funding of $201.4 million would be required for the former Hornsby area. The total net cost of the merger would then become $283.5 million in current dollars over 20 years (being the additional costs of $152.1 million to account for the errors and omissions, plus $201.4 million for services harmonisation, less the claimed $70 million in savings).

SUMMARY OF THE IMPACT OF THE PROPOSED MERGER ON THE RESIDENTS AND RATEPAYERS OF THE KU-RING-GAI COUNCIL AREA: ■■ After adjusting for errors and omissions in the Merger Proposal, services harmonisation and also for the redistribution of council rates due to higher land values in the Ku-ring-gai area: The proposal failed to take into account the impact of redistributing the residential rates burden between the two council areas (after the four year rates freeze announced by the NSW Government) because of the higher land values in Ku-ring-gai compared with Hornsby. Based on an analysis submitted to IPART, the residential ratepayers of the former Ku-ring-gai area would pay an additional $5.8 million pa in rates, while the rates in the former Hornsby Council area would decrease by this same amount. The present value of this rates transfer from year 5 to year 20 of a merged council is $44.6 million. The share of the merger total net cost of $283.5 million to the residents and ratepayers of the former Ku-ringgai area would be $180.9 million in current dollars over 20 years (being $136.3 million for the Ku-ring-gai Council area’s share of the additional net costs of $283.5 million identified above to account for the errors and omissions, services harmonisation and claimed savings from the merger, plus $44.6 million for the rates redistribution). A table showing the adjustments for errors and omissions to the KPMG forecast savings are provided on the following page, with detailed explanations following. Present value calculations are based on the same assumptions as KPMG, including a discount rate of 9.5% over 20 years.

MERGER PROPOSAL SUBMISSION

Financial Impact of the Proposed Merger on the Residents and Ratepayers Merger Impact

Present Value of Financial Impact over 20 years ($)

Merger Proposal â&#x20AC;&#x201C; claimed potential savings

$70,000,000 Saving

Adjustments for errors and omissions in the Merger Proposal: Take into account the true impact of the transfer of part of Epping and Carlingford south of the M2 motorway to Parramatta Council (additional net cost). -$72,359,116 Allow for redundancies based on Local Government (State) Award rather than Federal entitlements (additional cost). -$1,128,559 Correct the calculation of the saving from Councillor fees (additional cost rather than a saving). -$2,600,000 Correct the overstatement of savings from Materials and Contracts (reduction in saving) -$6,000,000 Provide not only for a temporary IT solution but also the long term costs of moving to a common IT platform (additional cost). -$3,964,601 Provide for the cost of salary harmonisation /parity (additional cost). -$12,534,139 Provide for the cost of increased market based remuneration for employees in a much larger council (additional cost). -$37,964,180 Make adequate provision for the cost of new office fitouts, staff training, change management , rebranding and new statutory plans (additional cost). Total Adjustments (Net cost) Financial impact on the residents and ratepayers of the merged council as a whole (net cost) after adjusting for errors and omissions in the Merger Proposal.

Cost / Saving

Cost Cost Cost Cost Cost Cost Cost

-$15,532,182 Cost -$152,082,777 Cost

-$82,082,777 Net cost

Additional adjustments for Services Harmonization: Additional cost to provide equal services and service levels across the whole of the merged council area.

-$201,452,301 Cost

Financial impact on residents and ratepayers of the the merged council as a whole (net cost) after adjusting for errors and omissions in the Merger Proposal and also for services harmonisation.

-$283,535,079 Net cost

Additional adjustments applicable to Ku-ring-gai Council for the redistribution of rates due to higher land values in Ku-ring-gai compared to Hornsby: Share of the above overall financial net cost of the merger including adjustments for the errors and omissions and services harmonisation (based on contribution to the merged council by total operating revenue). Adjust for the impact of rates redistribution between Hornsby and Ku-ring-gai Council due to higher land values in Ku-ring-gai compared to Hornsby (additional rates paid by Ku-ring-gai and a reduction for Hornsby). Financial impact of a merger on the residents and ratepayers of the former Ku-ring-gai Council area (net cost) after adjusting for errors and omissions in the Merger Proposal, services harmonisation and also for the redistribution of council rates due to higher land values in the Ku-ring-gai area compared to Hornsby.

-$136,344,100 Net cost

-$44,565,011 Cost

-$180,909,111 Net cost

KU-RING-GAI COUNCIL 18

DETAILS OF ERRORS AND OMISSIONS IN THE MERGER PROPOSAL: ■■ Failing to take into account the true impact of the transfer of part of Epping and Carlingford south of the M2 Motorway to Parramatta Council. As stated earlier in this submission, KPMG did not contact either Ku-ring-gai or Hornsby Council to obtain data or clarify any aspect of the proposed merger. Unfortunately one of the more significant consequences of this approach is that KPMG have mistakenly assumed that revenue and expenses would both be reduced on a per capita basis (as stated on page 8 of the document “KPMG Outline of Financial Assumptions for Local Government Merger Proposals – Technical Paper”). Hornsby Council in its Report GM2/16 to the General Meeting of Council on 10 February 2016 identified that significantly more income is derived from the area proposed to be excised than is spent in that area. While some $9.4 million pa is derived from rates and other income from the excised area, only $3.0 million pa is spent in that area. There would be a resulting net financial detriment of $6.4 million pa to the merged Ku-ringgai / Hornsby Council. Over 20 years the present value equates to $72.3 million. ■■ Calculating redundancies for non-senior staff based on the Federal entitlements rather than the Local Government (State) Award. The basis for calculation of redundancy payments in the merger proposal is set out on page 7 of the document “KPMG Outline of Financial Assumptions for Local Government Merger Proposals – Technical Paper”. It is stated that redundancy payments for staff have been provided for 16 weeks pay based on the average tenure for the sector and the “Fair Work Ombudsman (2014) Redundancy Pay and Entitlements Schedule”. However, Council staff are covered by the Local Government (State) Award 2014

and the redundancy provisions are approximately double those provided in the Fair Work Ombudsman (2014) Redundancy Pay and Entitlements Schedule. An entitlement of 16 weeks in the Fair Work Ombudsman (2014) Redundancy Pay and Entitlements Schedule relates to a tenure of at least 9 years but less than 10 years. Under the Local Government (State) Award 2014, this period of service provides for a redundancy payment of 31 weeks pay. Therefore the merger proposal has understated the redundancy costs by 15 weeks per person. To determine the financial impact of understating the redundancy costs, reference is made to the merger proposal which states on page 9 that the “removal of duplicate back office and administration functions could provide the basis for employing an additional 82 staff for frontline services. It follows that it must have been assumed that 82 staff are expected to leave the merged council either through natural attrition or redundancy. The “KPMG Outline of Financial Assumptions for Local Government Merger Proposals – Technical Paper” states on page 7 that redundancy payments are based on a median turnover rate of approximately 10% pa. Accordingly, if we allow for natural attrition for the three years of employment protection, the number of staff subject to redundancy would be reduced to around 59. The average salary per employee (excluding senior staff) in 2014/15 at Ku-ring-gai Council was $86,867 and for Hornsby Council was $84,486, being an average of $85,676. An additional 15 weeks redundancy pay for 59 staff at an average salary of $85,676 amounts to an additional $1.4 million. The present value, assuming payouts are made after 3 years, is $1.1 million. ■■ Miscalculating savings from Councillor fees. The basis for calculation of the savings from reducing the number of councillors in the merger proposal

is set out on pages 2 and 3 of the document “KPMG Outline of Financial Assumptions for Local Government Merger Proposals – Technical Paper”. It is stated that the calculation is based on the assumption that the number of councillors for the merged entity will be the same as the highest number of councillors that exist in any of the councils participating in the merger. As both Ku-ring-gai and Hornsby councils both currently have 10 councillors each, it follows that the merger proposal savings are based on only 10 councillors being elected to the merged council. It is also assumed by KPMG that the newly elected councillors for the merged council will receive a fee of $30,000 pa. It is unrealistic to assume that there will be only 10 councillors in the merged council, with a population of 270,060. This would equate to some 27,000 residents per councillor, which is a much greater number than is currently experienced in other Sydney councils, including Blacktown City Council with 15 councillors for a population of 325,000, equating to 21,676 residents per councillor. It is much more likely that there would be 15 councillors in a merged Ku-ring-gai and Hornsby council. The cost of 15 councillors at $30,000 pa as assumed by KPMG equates to $450,000 pa. The current cost of the 20 councillors at Ku-ring-gai and Hornsby councils is $398,430. As such, there would be a net additional cost of councillor fees in the merged council of $51,570 pa. Utilising a discounted cash flow model at 9.5% (as assumed by KPMG), the present value of the additional cost of councillor fees is $583,056 over 20 years. Rather than an additional cost, the merger proposal stated that there would be savings due to the reduction in the number of councillors of $2 million over 20 years, in current dollars. Therefore the forecast savings in the merger proposal are overstated by $2.6 million in current dollars.

■■ Overstating the savings from materials and contracts. The basis for calculation of the savings from materials and contracts expenditure in the merger proposal is set out on page 2 of the document “KPMG Outline of Financial Assumptions for Local Government Merger Proposals – Technical Paper”. It is stated that savings from materials and contracts of 3% is assumed, phased in over 3 years such that the full 3% is achieved by year 4. It is assumed that 80% of items reported under materials and contracts by the councils are subject to scale efficiencies. No evidence is provided by KPMG to substantiate the assumed saving of 3%, which are applied for all mergers regardless of how large or small the existing councils are. It is unlikely that two large councils such as Kuring-gai and Hornsby would achieve the same scale efficiencies in a merger as would three much smaller councils. Nevertheless, even if the 3% assumption is accepted as correct, an examination of Council’s materials and contracts expenditure shows that the assumption that 80% of materials and contracts expenditure is subject to scale efficiencies is unrealistic. After allowing for materials and contracts expenditure already under State Government contracts, Local Government Procurement contracts and joint tenders with other councils, in addition to expenditure of a type not realistically expected to achieve savings beyond the scale already achieved at Ku-ring-gai and Hornsby such as for consulting costs, waste disposal and legal fees, only 46% of council expenditure is possibly subject to scale efficiencies.

Allowing for savings of 3% on 46% of materials and contracts expenditure, phased in as per the KPMG assumptions, leads to a change in the level of savings calculated by KPMG from $14 million to $8 million, being a reduction of $6 million in current dollars over 20 years. ■■ Providing only for a temporary IT solution without taking into account the long term costs of moving to a common IT platform. The “KPMG Outline of Financial Assumptions for Local Government Merger Proposals – Technical Paper” sets out on page 5 the basis for estimating Information and Communications Technology (ICT) costs. The merger proposal has only allowed for a temporary ‘veneer’ solution to overlay the existing systems. For metropolitan councils, an amount of $3.35 million is provided plus 30% contingency, totalling some $4.36 million. In the medium to long term it will be vital for a merged council to move to common IT systems. An efficient and effective organisation could not continue to run parallel legacy systems from the former Ku-ring-gai and Hornsby councils. An assessment of the IT systems at Ku-ring-gai and Hornsby councils has identified there are major variations in systems with different software for financials, property and rating, payroll, geographical information and customer requests. In addition, while Hornsby Council has adopted individual systems with custom integration, Ku-ring-gai has a fully integrated solution predominantly from a single vendor. Merging the IT systems and migrating the data would be a lengthy and disruptive process, incurring costs for new licences, consulting, and training. Based on previous IT procurement and implementation projects, the cost of transitioning to common IT systems after 3 years has been estimated at a present value of $3.96 million in current dollars.

There are also likely to be costs to transition to a common telecommunications system. These costs would be in addition to those identified above. ■■ Failing to consider the cost of salary harmonisation/parity. The merger proposal does not make any allowance for salary harmonisation/parity. The Queensland Treasury Corporation conducted a review of the 2008 council amalgamations, resulting in the report “Review of Local Government Amalgamation Costs Funding Submissions – Final Summary Report – August 2009”. This report showed that the most significant merger cost identified by councils was that of wage parity, where almost all of the councils reported that wages increased to the ‘best of’ the pre-amalgamation individual council levels. It stands to reason that if one council has higher wage levels than another, after a merger it would be inevitable for the wages to rise to the higher levels. The average 2014/15 salary for the 424 equivalent full time employees at Ku-ring-gai Council was $88,517 pa, while for the 571 Hornsby employees it was $85,662 pa, representing a difference of some $2,855 pa. After allowing for the forecast reduction in Hornsby Council staff numbers after the merger, if the remaining former Hornsby employees had their salaries increased by $2,855 to Ku-ring-gai levels, phased in over four years, the additional cost would be $12.5 million current dollars over 20 years. ■■ Failing to consider the cost of increased market based remuneration for employees in a much larger council. The merger proposal does not make any allowance for increased remuneration costs to reflect the employment market for a much larger council. It is an industry fact that employees working in larger councils generally earn more than employees in smaller councils. An analysis of a national remuneration survey

MERGER PROPOSAL SUBMISSION

In addition to the above councillor fees, there would also be additional costs to support councillors with greatly increased responsibilities. This may include additional costs for office facilities and secretariat support. These costs have not been allowed for in the Merger Proposal, nor in these financial adjustments.

KU-RING-GAI COUNCIL 20

conducted by the Local Government Manager’s Association of Australia in conjunction with McArthur “2014-15 Local Government National Remuneration Survey” has shown that there is an average 7% difference in remuneration for employees in ‘large metropolitan’ to ‘very large metropolitan’ councils. As defined by the survey, Ku-ring-gai and Hornsby employees would be moving from the ‘large metropolitan’ to the ‘very large metropolitan’ category. As such, for the merged council to be competitive in the employee market, remuneration would be expected to increase over time. Allowing for an increase in remuneration of 7% pa, phased in over time from years three to six, employee costs could be expected to increase by some $37.9 million in current dollars over 20 years. ■■ Failing to adequately provide for the cost of new office fitouts, staff training, change management, rebranding and new statutory plans. The transition costs allowed in the merger proposal are set out on page 6 of the “KPMG Outline of Financial Assumptions for Local Government Merger Proposals – Technical Paper”. An amount of only 2% of the merged entity operating expenditure is allowed in the first year of operation only. This equates to a one off amount of $4.2 million to cover what is described by KPMG as office relocation, staff training and general transition related expenditure. This amount is unrealistic and would not even meet the cost of one of the transition costs, being the fit out of a building for the merged office staff. Council has undertaken its own estimates for the transition related expenditure, and made allowance for main office and council chamber fitout and relocation (not including the cost of a new building which is assumed to be cost neutral due to sale of existing buildings), staff training, change management, rebranding (logos, signage, uniforms etc), and consolidating statutory plans such as Local Environment Plans.

These transition costs are estimated at $15.5 million in current dollars in addition to the amount allowed in the merger proposal. These estimates are realistic and if anything the costs are likely to be larger as significant costs to consolidate depot facilities and the loss of productivity due to the disruptive nature of a merger have not been taken into account. ■■ Failing to consider the cost of services harmonisation Different local government areas provide different services and service levels to their communities, and the merger proposal did not consider the implications of this for a merger of Ku-ring-gai and Hornsby councils. The Merger Proposal identifies that the total operating revenue in the Hornsby Council area (less the part transferred to Parramatta) was $126.2 million pa. This equates to $846.51 pa per resident. The merger proposal identifies that the total operating revenue for Kuring-gai Council is $116.9 million pa. This equates to $966.04 per resident. It is clear that the total revenue per resident in Ku-ring-gai is much larger than in the Hornsby area. This means that, on average, Ku-ringgai residents receive the benefit of a higher level of service than do Hornsby residents. There are only three options available to a merged council to deal with this inequity: 1. Continue to provide a higher level of service in the former Kuring-gai area than in the former Hornsby area. 2. Reduce the level of service in the former Ku-ring-gai and use the savings to increase the level of service in the former Hornsby area. 3. Maintain the level of service in the former Ku-ring-gai area and raise additional revenue to increase the level of service in the former Hornsby area to match that of Ku-ring-gai. Over time it is highly unlikely that a merged council would continue to provide a higher level of service in the former Ku-ring-gai area than in

the former Hornsby area. It is also unlikely that an outcome of a merger would be to reduce services in the former Ku-ring-gai area in order to increase services in the former Hornsby area. As such, by far the most likely outcome would be the maintenance of the higher service levels in the former Ku-ring-gai area and an increase in service levels in the former Hornsby area to match. The increase required to provide the same revenue per capita to the entire merged council as currently enjoyed by Ku-ring-gai residents is $201.4 million in current dollars over 20 years. ■■ Failing to consider the impact of rates redistribution between Ku-ring-gai and Hornsby due to land value differences. The merger proposal fails to consider the impact of land value differences on the future rates paid by both Kuring-gai and Hornsby residents. Council rates are based on land values and an amalgamation of two council areas would result in changes to the amount of rates paid by individual properties. As the Local Government Act only allows for one ordinary residential rate across the whole of an urban council area, the status quo could not remain and a new residential rate covering the amalgamated council area would need to be implemented once the 4 year rates transition period of a rates freeze as proposed by the NSW Government had elapsed. An analysis of rates for the 2014/15 year was conducted and submitted as part of Council’s submission to IPART in 2015. This showed the residential land values in Ku-ringgai as being on average 50% higher than in the Hornsby Council area. The total residential land value in Ku-ring-gai was $23.3 billion (for approximately 40,411 properties) while in Hornsby it was $20.7 billion (for approximately 54,458 properties). As a result of the lower land values, rates are higher in Hornsby Shire when expressed as a percentage of land value (rate in $).

The chart opposite shows the residential rates that were paid in 2014/15 for each council area for a range of different land values. For example, a property with a land value of $800,000 pays $1,630 pa in residential rates in Ku-ring-gai compared to $1,928 pa in Hornsby Shire.

Summary of key residential rates data for the 2014/15 SUMMARY OF KEY RESIDENTIAL RATES DATA FOR THE 2014/15 Combined Ku-ring-gaiHornsby Hornsby Combined Ku-ring-gai Land Value (LV) Land Value (LV)

$23.3bn $23.3bn

$20.7bn $20.7bn

$44.0bn $44.0bn

Land Value per property (average)

$576k

$380k

$464k

Total Rates Income

$54M

$64M

$118M

Land Value per property (average) Total Rates Income

$576k $54M

$380k $64M

MERGER PROPOSAL SUBMISSION

An analysis of rates for the 2014/15 year was conducted and submitted as part of Co submission to IPART in 2015. This showed the residential land values in Ku-ring-gai as bei average 50% higher than in the Hornsby Council area. The total residential land value in Ku-ri was $23.3 billion (for approximately 40,411 properties) while in Hornsby it was $20.7 billio approximately 54,458 properties). As a result of the lower land values, rates are higher in Ho Shire when expressed as a percentage of land value (rate in $).

$464k $118M

Rate in $ (Rates/LV) 0.0023 0.0031 0.0026 If the two Council areas Rate in $ (Rates/LV) 0.0023 0.0031 0.0026 amalgamated, and assuming the Total Properties 40,411 54,458 94,869 overall aggregate rates revenue was Total Properties 40,411 54,458 94,869 unchanged, the residential rates paid in the former Ku-ring-gai area The chart below shows the residential rates that were paid in 2014/15 for each council area would increase and the rates paid range of different land values. For example, a property with a land value of $800,000 pays $1,6 in the former Hornsby area would in residential rates in Ku-ring-gai compared to $1,928 pa in Hornsby Shire. decrease.

While it is not possible to model the exact impact of an amalgamation on Rates Rates Comparison rates until the actual rating structure 3,500 2,984 is determined by an amalgamated Ku-ring-gai Hornsby 3,000 2,639 2,632 council, it is quite straightforward to 2,303 2,500 2,280 determine the range within which the 1,966 1,928 2,000 rates structure for an amalgamated 1,630 1,576 council would fall. The rates 1,294 1,500 structure that would result in the 1,000 greatest variation would be entirely 500 ad valorem. The rates structure that would result in the least 600,000 800,000 1,000,000 1,200,000 1,400,000 variation allowable under the Local Land Values Government Act would be a 50% base rate (which is a fixed amount paid by all properties to raise 50% of the total rates revenue plus an ad If the two Council areas amalgamated, and assuming the overall aggregate rates revenue valorem amount for the remaining unchanged, the residential rates paid in the former Ku-ring-gai area would increase and the rate 50%).

in the former Hornsby area would decrease.

As shown in the table opposite, and assuming the total rates raised While for it is not possible to model the exact impact of an amalgamation on rates until the actual an amalgamated Council remained structure is determined by an amalgamated council, it is quite straight forward to determine the the same as the sum of the rates within which the rates structure for an amalgamated council would fall. The rates structure that IMPACT variation OF AN AMALGAMATION WITH HORNSBY ON RESIDENTIAL raised by the individual councils, result in the greatest would be entirely ad valorem. The rates RATES structure that would re the rates for properties in the former the least variation allowable under the Local Ku-ring-gai Government Act would be a 50% base rate (whic Scenarios Hornsby (Decrease) area of Ku-ring-gai would increase (increase) by between 5% and 17% in an 17% increase 14% decrease amalgamation with Hornsby Shire. Combined Structure - Ad This equates to additional total rates $8.9M pa total $8.9m pa total Valorem for Ku-ring-gai of between $2.7 $220 pa ave $164 pa ave million and $8.9 million pa, or $67 and $220 pa on average. A rates structure at the midpoint would result in an increase to rates for the residential ratepayers of the former Ku-ring-gai area of some $5.8 million pa. The present value over 20 years of a rates increase of $5.8 million (after the four year rates freeze) has been calculated using the KPMG escalation and discount rates, equating to $44.6 million.

Combined Structure 50% base amount

5% increase

4% decrease

$2.7M pa total

$2.7 M pa total

$67 pa ave

$51 pa ave

KU-RING-GAI COUNCIL 22

OTHER RATING ISSUES - BUSINESS AND FARMLAND RATES Both Ku-ring-gai and Hornsby are predominantly residential areas in terms of rating, with business rates forming a relatively minor portion of the total rating base for both councils. Business rates make up 8% of the total rates for Ku-ringgai and 12% for Hornsby. As such, the impact of an amalgamation on business rates is not as significant as for residential rates. Further, the Local Government Act allows for multiple business rates within different parts of a council area and therefore after an amalgamation the distributional issues described above for residential rates would not apply. Currently Ku-ring-gai Council has one business rate that applies across the whole council area. Hornsby Council has two different business rates, one that applies to the Hornsby CBD and one that applies elsewhere in the council area. The Ku-ring-gai rate in the dollar for business falls between the two Hornsby rates. Hornsby Shire Council raises a small proportion of its rates from farmland (approximately 1%). Ku-ring-gai Council does not have any farmland and it is not expected that this would cause any rating issues with regard to redistribution of the rating burden. According to “A Snapshot of the Hornsby Shire in 2012”, currently available on the Hornsby Shire Council website, 10% of the Shire is zoned and used for urban development, 15% for rural purposes, 5% for open space, and the remainder is Environmental Protection or National Park (approximately 70%). The rateable areas, that is the land used for urban and rural purposes, amount to approximately 25% of the total area. Of this rateable area, rural areas account for 60% (being 15 out of 25 percent of the total area). As such, while rural areas make up approximately 60% of the rateable land in the Hornsby Shire, farmland only raises 1% of the rates revenue. It seems likely that there is cross subsidisation from the residential and business areas to the rural areas.

Any cross subsidy of the rural areas would be shared with Ku-ring-gai ratepayers after an amalgamation.

higher rates which would be imposed on the ratepayers of the former Kuring-gai area.

OTHER FINANCIAL DISADVANTAGES

■■ Loss of Special Rates Variation for Environmental Levy

■■ Failing to consider the impact of the Hornsby Quarry The Merger Proposal fails to consider the impact of a major project to remediate and embellish the Hornsby Quarry. The Hornsby Quarry is a large site close to the Hornsby town centre, with an area of approximately 23 hectares. There are various concerns about the quarry including its stability. The quarry is fenced off and warning signs are erected to prevent entry by the public. There have been various estimates for the cost to remediate and embellish the Quarry since its purchase in 2002. As recently as 2013 a report to Hornsby Council identified the costs as being up to $200 million. Subsequently an alternative remediation method was proposed which has reduced the cost estimates. The latest scheme to remediate the Hornsby Quarry is to obtain fill from the NorthConnex project to part fill the Quarry (approximately one quarter) at an estimated cost of $22 million of which Hornsby Council’s share is $7.33 million. In addition, there are estimated costs of $30 million for quarry stabilisation and creation of a recreational space. Hornsby Council have advised that all of these amounts are fully funded from assets sales, reserves and section 94 developer contributions. The forecast of $52 million for the project was also confirmed by Hornsby Council in response to a request from Ku-ring-gai Council in February 2016. The project to remediate and embellish the Hornsby Quarry is at an early stage and if the proposed merger proceeds, the ratepayers of the former Ku-ring-gai Council area will be exposed to a high risk of future cost increases. This could necessitate diversion of funds from other projects or the raising of additional revenue, possibly from

Under a merger, Council’s Environmental Levy would have to cease in 2018/19. This is because during the 4 year rates transition period there is a freeze of existing rates paths meaning that special rates are not able to be renewed. This would mean that Ku-ring-gai Council’s environment programs could not continue and the staff contracted to deliver them would no longer be required, noting that these contract staff have no employment protection under the State Award. The Environment Levy raises $2.6 million pa and to date has also leveraged an additional $6.2 million in government grants. In terms of service delivery to our community, this would be a highly detrimental outcome of a merger. ■■ Inequity during 4 year rates freeze period The NSW Government has advised that there would be a rates freeze for a period of 4 years after a merger. This may lead to situations where different services and service levels are provided in different areas due to the existing rates that are in place, including special levies. Alternatively, rates revenue that is collected in one area, such as for a special levy, may be spent by the new council in another area whose ratepayers did not contribute. ■■ Additional contractual costs due to transfer of part of Hornsby Council to the expanded Parramatta Council The transfer of that part of Hornsby Council south of the M2 to Parramatta Council may result in penalties or other costs to facilitate changes to contracts for service provision in the area. These costs have not been allowed for in the Merger Proposal.

review carried out by Morrison Low concluded that:

Ku-ring-gai Council is a financially sound Council with a proven track record of prudent financial management, a sustainable financial position and strong operating results. Over the last 10 financial years Council achieved operating surpluses in every year. Council’s strong financial position was reinforced as part of an independent review carried out by the NSW Government’s Treasury Corporation (TCorp), which rated Council’s position as sound and a neutral outlook into the future.

“Ku-ring-gai delivers services at lower cost with fewer employees than other comparable councils”.

The net operating result for 2014/2015 was a surplus of $22.5 million after allowing for the depreciation expense on Council’s portfolio of depreciable infrastructure assets. This placed Ku-ring-gai Council number 6 in terms of operating surpluses out of all NSW councils in 2014/15. Council’s current budget and future forecasts continue to provide for operating surpluses. Council maintains an up-to-date and dynamic long term financial plan which provides a framework to achieve continued operating surpluses and maintain healthy levels of working capital and reserves. Ku-ring-gai Council meets all seven Fit for the Future benchmarks by 2016/17, which are maintained or improved thereafter. This reflects Council’s adopted Integrated Planning and Reporting documents including the Operational Plan 201516, Revised Delivery Program 20132017 and Long Term Financial Plan 2015/16 to 2024/25. In the past 4 years, Ku-ring-gai has spent $67 million on major projects for our community. In addition, we have spent more than $62 million acquiring land for parks, bushland and roads since 2007. This level of spending is well above the average in the industry, and yet another reinforcement of Council’s capacity to deliver positive outcomes for the broader community. Ku-ring-gai Council provides efficient services to the community. An independent organisational

In 2015 IPART assessed Ku-ring-gai Council as meeting the financial criteria for Fit for the Future. An extract of the IPART report is provided below: “The council satisfies the financial criteria overall. It satisfies the sustainability, infrastructure and service management and efficiency criteria.” Sustainability – satisfies: ■■ The council satisfies the sustainability criterion. It is forecast to meet the benchmarks for the operating performance ratio, the own source revenue ratio and the building and infrastructure renewal ratio by 2019-20. ■■ We estimate that adjusting the operating performance ratio by removing interest income on section 94 Reserves would reduce the ratio by approximately 2.7 percentage points to 2.2% in 2019-20 which is still above the benchmark. Infrastructure and service management – satisfies: ■■ The council satisfies the infrastructure and service management criterion as it meets the infrastructure backlog, asset maintenance and debt service benchmarks by 2019-20. ■■ The council implemented a new funding model in June 2015 to address its infrastructure backlog, and is forecasting an infrastructure backlog ratio of 0.2% in 2019-20. ■■ In its long term financial plan, the council shows it intends to repay all loans and have a zero debt service ratio by 2023-24. While this would not meet the benchmark, it is beyond our assessment period. Efficiency – satisfies: ■■ The council meets the criterion for efficiency based on the forecast for a reducing real opex per capita ratio for 2014-15 to 2019-20.”

In 2015 IPART also assessed Hornsby Council as meeting the financial criteria for Fit for the Future. Following is an analysis of both councils’ projected financial performance for 2016/17 to 2019/20, as provided to IPART. Ku-ring-gai Council’s data is obtained from the adopted Long Term Financial Plan 2015/2016-2024/2025. Hornsby Council has not adopted a revised Long Term Financial Plan, since adopting the 2014/2015-2023/2024 version. As such, Hornsby Council’s projected financial ratios were obtained from the report to Hornsby Council tabled at the Ordinary Meeting of 10 June 2015 “CS13/15 Local Government Reform - Fit for the Future (FFTF) Process Since 2011 and Council’s Submission to IPART”.

MERGER PROPOSAL SUBMISSION

FINANCIAL HEALTH OF THE RESPECTIVE COUNCILS

KU-RING-GAI COUNCIL 24

Both Councils project a high level of financial flexibility demonstrated by high own source future years with an average ratio of 85% for Hornsby and 75% for Ku-ring-gai. Both Councils demonstrate continued capacity in the future to meet on-going e requirements. Both Councils have ability to control or manage their own operating performance an sustainability in future and manage external challenges. Operating Performance Ratio

S09638

Ku-ring-gai

Hornsby

Own Source Operating Revenue Ratio

Operating Performance Ratio:

Benchmark: 3yr Average Hornsby >=0% Ku-ring-gai

Both Councils achieve an operating 7% surplus in future years and outperform 6% Revenue: Benchmark: 3yr Average >60% Own Source Operating the operating performance ratio 100% 5% benchmark. Hornsby’s operating 90% 4% performance ratio is marginally higher 80% than Ku-ring-gai’s,Both as demonstrated in Councils project 3% a high level of financial flexibility demonstrated the chart opposite. 2% 70%

by high own source future years with an average ratio of 85% for Hornsby and 75% for Ku-ring-gai.

1% Both Councils demonstrate continued 60% capacity in the future to meetBoth on-going 0% Councils50% have ability to control or manage their own expenditure requirements. -1% sustainability in future and manage external challenges. 40%

Own Source Operating Revenue: Both Councils project a high level of financial flexibility demonstrated by high own source revenue in future & years with Building Infrastructure 100% an average ratio of 85% for Hornsby and 75% for Ku-ring-gai. 90%

operating performance an

Own Source Operating Revenue Ratio Ku-ring-gai

Renewal Benchmark: Ratio:

Hornsby

3yr Average >60%

Hornsby’s asset renewal ratio meets benchmark and remains static at an average of aroun 80% Ku-ring-gai’s ratio at an average of around 134% is higher than that of

Both Councils have ability to control all projected years. or manage their own operating all future years. performance andinfinancial sustainability in future and manage external challenges. Ku-ring-gai

70% 60%

is 50% planning to spend significantly more than Hornsby on its ass compared to their deterioration. This will in turn keep Ku-ring-gai’s future asse 40% below benchmark and eventually eliminate it. Building & Infrastructure Renewal Ratio

Hornsby’s asset renewal ratio meets benchmark and remains static at Building & Infrastructure Asset Renewal Ratio an average of around 108% for&allInfrastructure Renewal Ratio: S09638 Building Ku-ring-gai Hornsby projected years. Ku-ring-gai’s ratio at an Benchmark: 3yr Average >100% average of around 134% is higher than 200% ratio meets benchmark and remains static Hornsby’s asset renewal that of Hornsby’s in all future years.

all projected years.

180% Ku-ring-gai’s

at an average of aroun ratio at an average of around 134% is higher than that of

Infrastructure Ratio: Ku-ring-gai is planning to spend Backlog160% in all future years. 140% significantly more than Hornsby on its asset renewal compared backlog with their 120% Hornsby’s ratio remains at 0.6% for the duration of the modelled years. is100% planning static to spend significantly more than Hornsby on its asse deterioration. This will in turnKu-ring-gai keep backlog ratio at 2% is to met by 2016/17 and gradually eliminated inKu-ring-gai’s future years.future asse compared their deterioration. This will in turn keep Ku-ring-gai’s future assets backlog 80% below benchmark and eventually below benchmark 60% and eventually eliminate it. eliminate it. Ku-ring-gai is committed to invest additional funding in assets renewal throu 40% funding strategy and eliminate its backlog by 2019/20.

Infrastructure Backlog Ratio Hornsby’s backlog ratio remains static at 0.6% for the duration of the modelled years. Ku-ring-gai’s backlog ratio at 2% is met by 2016/17 and gradually eliminated in future years. Ku-ring-gai is committed to invest additional funding in assets renewal through its asset funding strategy and eliminate its backlog by 2019/20.

Building & Infrastructure Asset Renewal Ratio Ku-ring-gai

Hornsby

Infrastructure Backlog Ratio Benchmark: 3yr Average >100%

200% 180% 2.5% 160%

140% 2.0% 120% 1.5% 100%

1.0% 0.5% 0.0%

-0.5% -1.0%

80% 60% 40%

Ku-ring-gai

Hornsby

Debt Service Ratio:

MERGER PROPOSAL SUBMISSION

term plan. Hornsby, in comparison, does not meet this ratio in the first years of the f however the ratio is met by 2018/19.

Both Councils debt service ratio remains below benchmark during the forecast period. K ratio is higher due to increased level of interest and principal repayment in future years. Asset Maintenance Ratio

Ku-ring-gai’s outstanding debt has identified sources of repayment in future ye Ku-ring-gai Hornsby discharged by 2023/24. Hornsby’s ratio is lower due to lower level of debt.

Assets Maintenance Ratio

Ku-ring-gai is projecting sufficient S09638 25 120% Debt Service Ratio asset expenditure to maintain its infrastructure assets in satisfactory Ku-ring-gai Hornsby 110% condition in the long term. The ratio Debt Service will remain constant at around 104% Ratio: 100% 25% for the duration of the long term plan. 90% Hornsby, in comparison, not Bothdoes Councils debt service20% ratio remains below benchmark during the forecast period. meet this ratio in the first years of the due to increased 80% 15% level of interest and principal repayment in future years. ratio is higher forecast period. However the ratio is 10% 70% met by 2018/19.

Ku-ring-gai’s outstanding debt has identified sources of repayment in future y 5% discharged by 2023/24. Hornsby’s ratio is lower due to lower level of debt. 0%

Debt Service Ratio:

-5%

Both Councils debt service ratio remains below benchmark during the forecast period. Ku-ring-gai’s ratio is higher due to increased level of 25% interest and principal repayment in Real Operating future years. 20%Expenditure

Debt Service Ratio Ku-ring-gai

Hornsby

per Capita Ratio:

Ku-ring-gai’s outstanding debt has Ku-ring-gai is15% projecting a decline in real expenditure per capita reflecting containment o identified sources of repayment in an increasing10% population. Hornsby Council’s real expenditure is increasing moderately in f future years and is discharged by from $767 in 2016/17 to $812 in 2019/20. 5% 2023/24. Hornsby’s ratio is lower due to lower level of debt. The following 0% charts show a comparison of Ku-ring-gai Council financial ratios to Horns

period between -5%2016/17 to 2019/20.

Real Operating Expenditure per Capita Ratio:

Ku-ring-gai is projecting a decline Real Operating Expenditure Per Capita in real expenditure per capita Ku-ring-gai Hornsby reflecting containment of costs Benchmark: Decreasing with an increasing Real population. Operating Expenditure per Capita Ratio: Hornsby Council’s real expenditure $1,000 $950 is increasing moderately in future Ku-ring-gai is projecting $900 a decline in real expenditure per capita reflecting containment o years from $767 in 2016/17 to $812 $850 Hornsby Council’s real expenditure is increasing moderately in an increasing population. in 2019/20.

from $767 in 2016/17$800 to $812 in 2019/20.

$750 The following charts show a $700 comparison of Ku-ring-gai Council $650 The following charts show financial ratios with Hornsby’s for the $600 period between 2016/17 period between 2016/17 to 2019/20. $550to

a comparison of Ku-ring-gai Council financial ratios to Horns 2019/20.

$500

Real Operating Expenditure Per Capita

Overall Financial Health Overall Financial Health

Ku-ring-gai

Hornsby

Both Ku-ring-gai and HornsbyBenchmark: councils areDecreasing already in a very strong financial position, being $1,000 bycouncils IPART inalready 2015 as financially Fitposition, for thebeing Future. In 2014/2015 Both Ku-ring-gai and Hornsby are in abeing very strong financial assessed by IPART inHornsby and Ku-ring $950 2015 as being financially Fit for the Future. In 2014/2015 Hornsby and Ku-ring-gai councils were ranked 3rd and 6th councils were ranked 3rd and 6th respectively across all NSW councils in terms of the best $900 respectively across all NSW operating councils in terms of the best net operating surplus. Improved financial sustainability cannot $850surplus. Improved financial sustainability cannot be considered an advantage of be considered an advantage of a merger between these two industry leading councils. $800 between these two industry leading councils. $750 $700 $650 $600 $550 $500

KU-RING-GAI COUNCIL

PART 2: ASSESSMENT OF LEGISLATIVE FACTORS - SECTION 263(3) OF LOCAL GOVERNMENT ACT, 1993

02 Communities of interest and geographic cohesion

263 (3) (b) the community of interest and geographic cohesion in the existing areas and in any proposed new area.

SUMMARY

IMPORTANCE OF COMMUNITIES OF INTEREST

The NSW Government’s Merger Proposal states that Ku-ring-gai and Hornsby Council have similarities and connections in their physical environments, population and economic employment characteristics and communities of interest. These similarities and connections form part of the Government’s justification for the proposed merger of the two councils.

The concept of community of interest is fundamental to the view of local government as community government. Tate Consulting, in their 2013 report into the processes and outcomes of the 2004 NSW Local Government boundary changes, highlighted the following: ■■ The need to identify communities of interest when contemplating an amalgamation

These statements are incorrect or misleading. They are based on generalisations about physical geography, land uses and communities and include incorrect statements about demography, workforce characteristics and resident movement patterns.

■■ Consideration to be given to a number of factors including transport routes and where people live, work, shop, conduct business, go to school, receive medical treatment, are entertained and play sport

Our analysis of physical geography, population and employment characteristics, resident activity movement patterns and community perceptions clearly demonstrates unresolvable physical divisions and distinctly different communities of interest existing within the Hornsby Shire and between the highly connected Ku-ring-gai community.

■■ The need for a thorough analysis by region, including identifying future needs and challenges such as infrastructure and services, and an understanding of the communities in advance of decision-making to ensure the best outcomes are achieved.23 A recent report on the 2008 Queensland local government amalgamations highlights issues created when communities are forced to merge without strong physical and community of interest connections.

In a merger these differences will have significantly negative impacts on the community of Ku-ring-gai, which will inherit an area almost six times the size of the existing Ku-ring-gai Council area and result in the loss of Ku-ring-gai’s own strong geographical and community cohesion, identity and values. For the proposed merged area there will be historic and unresolvable differences in resident connectedness and patterns of activity as well as competing resident needs and priorities in those areas. This has the potential to create community conflict, major administrative and cost challenges for a new council and an unworkable local community government.

The report was written by former Labor Government Services Minister Simon Finn, whose government oversaw the amalgamations, and former LNP Local Government Minister David Crisafulli, who ordered the “de-amalgamation” of four of the merged councils. Due to the ongoing conflicts between areas with different communities of

interest those merged communities are now undergoing demergers. Commenting on the issues arising from forced mergers Finn and Crisafulli have stated: ‘There is also no doubt that the process must involve more than just an economic rationalist argument. Local government is different to other levels of government – it is the level of government that communities engage with directly on a daily basis. Local governments are ingrained in the social fabric of communities and so there is a significant emotional connection between communities and their local governments.’ The former government ministers concluded that councils “should not seek to realise economic benefits immediately at the expense of creating a new cohesive community” and “there will be no long term economic benefits if the communities are ungovernable because of division”.24 Previous reports and recommendations on merger proposals by the NSW Government have provided no address of the community of interest and geographic cohesion in existing local government areas and in any proposed new area.25 Those reports have focussed on aggregated demographic and economic statistics of entire local council areas and broad geographic descriptions rather than more detailed analysis within existing or proposed council boundaries. The current Boundary Review process under Section 263(3) of the Local Government Act, 1993 provides the first formal opportunity for Council

Jeff Tate Consulting Pty Ltd, Report: Assessing processes and outcomes of the 2004 Local Government Boundary Changes in NSW, January 2013, p32. ABC News, NSW council amalgamations: Baird Government urged to avoid Queensland’s merger mistakes [Accessed 16 February 2016] www.abc.net.au/ news/2016-02-16/nsw-urged-not-to-repeat-qlds-council-amalgamation-mistakes/7167322?WT.ac=statenews_nsw 25 This included: Independent Local Government Review Panel, Revitalising Local Government - Final Report of the NSW Independent Local Government Review Panel, October 2013. Independent Pricing and Regulatory Tribunal, Methodology for Assessment of Council Fit for the Future Proposals, June 2015. Independent Pricing and Regulatory Tribunal, Assessment of Council Fit for the Future Proposals: Local Government - Final Report, October 2015. 23 24

Ku-ring-gai Council’s 2015 Fit for the Future Improvement Proposal identified clear differences between the communities of interest and geographic cohesion within the existing Ku-ring-gai and Hornsby Shire Council areas.

DEFINITIONS There are no definitions of geographic cohesion and community of interest under the Local Government Act. Council has therefore used the following practical definitions for the purposes of analysis:

Geographic cohesion

The term ‘geographic cohesion’ is taken to mean the level of physical and locational connectedness or unity within each local government area and the new area.

Community of interest

The term ‘community of interest’ is taken to include three important dimensions in the context of local government, which need to be given weight in assessing the effects and impacts of boundary changes on existing local government areas and the resultant new area. These are: 1. Perceptual: described as residents’ sense of belonging to an area or locality which can be clearly defined. 2. Functional: described as the ability of an area to meet with reasonable economy the community’s requirements for comprehensive physical and human services. 3. Political: described as the ability of the elected body to represent the interests and reconcile the conflicts of all its members. This definition was developed by Fulcher26 (1991) from an extensive review of amalgamations across Australian states and provides a practical means of assessment. The definition has been used in the assessment of a recent demerger proposal in Victoria and amalgamation proposal in New South Wales.27

Fulcher argues that the more clearly these attributes apply in a locality, the more confidently the people in it can be said to have a community of interest. If the boundaries of a local government area approximate a three dimensional community of interest, the unit will be a strong and viable one, representing a coherent social and economic whole.

ANALYSIS – GEOGRAPHIC COHESION The term ‘geographic cohesion’ is taken to mean the level of physical and locational connectedness or unity within each Council area and the new area.

Physical characteristics Council’s analysis has confirmed the significant physical differences between Ku-ring-gai and Hornsby Council areas as follows: ■■ Location and land area Ku-ring-gai is an established urban, middle-ring local government area, 85km2 in size, located only 10 km from the centre of Sydney CBD (from its southern boundary) and classified as a Category 3 – Large Metropolitan council by the OLG. In contrast Hornsby is an outer mixed rural/residential Sydney local government area, 510km2 28 in size, located on the outer edge of the Sydney Metropolitan Area. Hornsby is classified Category 7 – Metropolitan Fringe council by the OLG. ■■ Geography Ku-ring-gai is a regular shaped local government area, with its boundaries clearly defined by natural land features and major roads. The area is geographically cohesive with evenly distributed urban areas very accessible by road and public transport services. In contrast Hornsby is a very large and elongated local government area, with distinct locational areas driven by significant physical geographical divisions, different land uses and development patterns, large travel distances and large variations in population density. The Hornsby area includes rugged

and complex geography comprising relatively flat areas in the southernmost section of the LGA and a physical separation of its northerly areas into western and eastern sectors. This separation extends from Berowra Creek and National Park through steep escarpments south through Berowra Waters and Galston Gorge, then south all the way to Cherrybrook. The area to the west includes large undulating areas utilised for a range of productive and recreational rural activities. The northern boundary of the LGA has variable rugged frontage to the Hawkesbury River, Berowra Creek and Cowan Creek. ■■ Natural Divisions Ku-ring-gai’s location, land area and physical geography has created a very well connected and geographically cohesive urban community with evenly distributed population density and high accessibility for residents by road and public transport. The clearly defined boundaries of the council include National Park to the north and north east and major arterial roads to the south and west. In contrast Hornsby’s location, land area and physical geography has severely restricted geographic cohesion and created what is essentially three distinct sectors. These are a western area (west of Berowra Creek and escarpments), a northern area (plateau area and National Park east of Berowra Creek) and a southern area where the majority of urban development has taken place. The differences in these sectors are reinforced by the very large distances north to south and east to west in the Hornsby area. Hornsby Council shares boundaries with six adjoining councils. This includes The Hills (largest boundary at 53 kilometres), Ryde, Parramatta, Pittwater and Warringah as well Ku-ring-gai in its southeastern corner. The Physical Characteristics map on page 28 illustrates the existing physical constraints and divisions in Hornsby area, as well as the consistent physical geography of Ku-ring-gai that has allowed development of a cohesive urban area.

26 Fulcher, H, The Concept of Community of Interest, A Discussion Paper which explores the concept of Community of Interest as it applies to Local Government boundaries, January 1991. 27 Local Government Boundaries Commission, Examination of an amalgamation proposal for the creation of a new Local Government Area to be named “New England Regional”: Incorporating the whole areas of: Armidale Dumaresq, Guyra Shire Uralla Shire, November 2010 and Local Government Report, Sunbury out of Hume City Council, Victoria, June 2014. 28 Hornsby LGA has an area of 510km2, not 455km2 as stated in the IPART report and Merger Proposal. Refer to DESCRIPTION OF LOCAL GOVERNMENT BOUNDARY FOR HORNSBY SHIRE COUNCIL on Hornsby Council’s website. It is assumed that the incorrect areas have excluded half width of the Hawkesbury River as well as Milsons Island and the residential Dangar Island. These are important omissions as Hornsby Shire Council is the responsible authority for the islands as well as numerous foreshore infrastructure along its 150+km frontage to The Hawkesbury River.

MERGER PROPOSAL SUBMISSION

and the Ku-ring-gai community to raise issues and impacts relating to physical divisions and communities of interest.

KU-RING-GAI COUNCIL

MERGER PROPOSAL SUBMISSION

LAND USES There are significant differences in land uses within the Hornsby Shire Council area and in comparison with Ku-ring-gai Council area. The land uses are a direct reflection of the physical geography of each area and the natural divisions in Hornsby, all of which have dictated suitability for urban development. The land uses reinforce differences in communities of interest between the two areas.

long distances by road from the Hornsby Town Centre or can only be accessed by boat. The larger of these settlements are Brooklyn, Wiseman’s Ferry, and Dangar Island.

centres, including Hornsby Town Centre, local centres at Pennant Hills and Thornleigh and numerous neighbourhood shopping facilities.

The Land Use Character map below shows the location of the different land uses within Hornsby Council area. The unshaded Ku-ring-gai Council area has well distributed residential development.

■■ Established residential urban areas located in the southern most sector of the council area including industrial areas and local and neighbourhood commercial

Ku-ring-gai – urban residential Ku-ring-gai’s urban areas are residential (single detached, medium to high density) including local and neighbourhood commercial centres. The six dispersed local centres and Gordon Town Centre are very accessible to residents along with a number of viable local neighbourhood shopping centres.

Hornsby – mixed rural, village, river and urban In contrast to Ku-ring-gai Council area Hornsby has distinctly different land use areas. This includes: ■■ Large rural areas to the west, geographically separated from the rest of Hornsby by National Park and Galston Gorge with limited access from within Hornsby LGA. These areas are utilised for agricultural production, some extraction activities and rural hobby farm activities and include small village settlements such as Galston, and Berowra Waters. ■■ Small dispersed village settlements to the north, separated by National Park and located significant distances from Hornsby Town Centre. These include Mt Ku-ring-gai, Cowan, Mt Colah and Hornsby Heights. This also includes small dispersed cottages and river settlements along the length of the Hawkesbury River which are geographically separated from the rest of Hornsby by National Park, ridges and gullies. They are located

Central Macdonald

Land Use Character

Peats Ridge

Mangrove Creek

Webbs Creek Lower Macdonald

Greengrove Gunderman Wisemans Ferry

Lower Mangrove Glenworth Valley Calga

Leets Vale Laughtondale

Lower Portland

Spencer

Mount White Wendoree Park

Maroota

Cumberland Reach

Mooney Mooney Creek

Marlow

Singletons Mill

Sackville North Sackville

Bar Point

Canoelands

Wondabyne Cheero Point Milsons Passage

South Maroota Ebenezer

Mooney Mooney

Hornsby

Forest Glen

Cattai

Dangar Island Little Wobby

Berowra Creek Fiddletown Cowan

Glenorie Brooklyn

Pitt Town Maraylya Scheyville

Berowra Heights Arcadia

Berrilee Cottage Point

Oakville Berowra Middle Dural Box Hill

Kenthurst

Nelson

Ku-Ring-Gai Chase

Mount Kuring-Gai

Galston Hornsby Heights

Annangrove

Mount Colah Duffys Forest Rouse Hill

Dural

Kellyville

Schofields

Asquith Hornsby

Glenhaven

The Ponds

Woodcroft Doonside

Legend

Bungarribee

Urban

Arndell Park

West Pennant Hills

Baulkham Hills

Ku-ring-gai Pymble

South Turramurra

Beecroft

Lalor Park

West Pymble North Rocks

Carlingford

Northmead Toongabbie Constitution Hill North Parramatta Pendle Hill

Dundas Valley Dundas

Westmead Parramatta

South Wentworthville Greystanes

Harris Park

Holroyd

Epping

Oxford Falls

Frenchs Forest

Gordon Killara Lindfield

Denistone East Denistone West Ryde

Camellia Wentworth Point

North Ryde

Cromer

Davidson

East Killara

Roseville Chatswood

Beacon Hill

Forestville

East Lindfield

Eastwood

Rydalmere Rosehill

Marsfield Macquarie Park

Belrose

St Ives

Warrawee Turramurra

North Epping

Rural (and National Park) Girraween

Prospect

Wahroonga

Pennant Hills

Blacktown Villages (and Seven National Hills Park) Winston Hills

Huntingwood

Thornleigh

Castle Hill Glenwood Bella Vista

Kings Park Marayong Kings Langley

Ingleside

Waitara

Westleigh Cherrybrook

Parklea

Terrey Hills

St Ives Chase

Stanhope Gardens Quakers Hill

North Turramurra

North Wahroonga

Allambie Heights Killarney Heights

Castle Cove North Balgowlah Seaforth Middle Cove Balgowlah Middle Harbour Castlecrag

Lane Cove North Willoughby Clontarf Northbridge Artarmon Lane Cove West Naremburn Lane Cove Riverview 7 3.5 0 Cammeray 7 Km Putney Cremorne Mosman Greenwich Tennyson Point Hunters Hill Ryde

KU-RING-GAI COUNCIL 30

GEOGRAPHIC COHESION IMPACTS ON KU-RING-GAI AND A PROPOSED MERGER Analysis has highlighted the following: ■■ Major differences in physical geography and land uses - Our analysis demonstrates major differences in the size, physical geography and land uses of the two council areas. ■■ Lack of physical connections and cohesion - Our analysis demonstrates the lack of physical connections and cohesion within Hornsby and between the Kuring-gai Council area. ■■ Distinct communities in a proposed merger - Our analysis demonstrates that a merger will create a new council with four distinct physically separated areas – three distinct areas existing in Hornsby and Ku-ringgai Council area. ■■ No locational unity - The impacts of a merger are significant for Ku-ring-gai. At present Ku-ring-gai is characterised by strong locational unity and geographical cohesion. A merger with Hornsby will add three extremely large and different sectors to the north and west, all with weak locational connectedness and geographical cohesion with Ku-ring-gai. The existing divisions and weak connections will be carried forward to a new merged entity.

ANALYSIS – COMMUNITIES OF INTEREST Communities of Interest Analysis of the Hornsby Council area highlighted three distinct communities of interest. These are driven by clear geographic divisions, landuses and distance across the council area. The areas shown in the Communities of Interest map opposite are grouped as follows: ■■ western rural area with river settlements; ■■ northern residential villages with river settlements; and ■■ southern urban area, including dense residential development and industrial lands. As previously stated Council’s analysis has been structured around the following three dimensions of community of interest: 1. Perceptual: described as residents’ sense of belonging to an area or locality which can be clearly defined. 2. Functional: described as the ability of an area to meet with reasonable economy the community’s requirements for comprehensive physical and human services – relevant factors include transport routes and where people live, work, shop, conduct business, go to school, receive medical treatment, are entertained and play sport. 3. Political: described as the ability of the elected body to represent the interests and reconcile the conflicts of all of its members.

1. Perceptual: a sense of belonging to an area or locality which can be clearly defined Ku-ring-gai Ku-ring-gai’s community has a very strong sense of belonging to the Ku-ring-gai area demonstrated by: ■■ High resident use of local community services – examples include local residents making up 91% of Ku-ring-gai Council Library members with the Annual Report 2013 – 2014, p41 – 67 and Annual Report 2014-2015, p51 – 59. Council’s Annual Report 2013-2014, p60 and p65 31 Council’s Annual Report 2014-2015, p60 29 30

remainder being students who attend school or work in Kuring-gai; local residents making up 95% of family’s using the Ku-ring-gai Council Vacation Care Program; close to 100% of local families using Council’s Thomas Carlyle Children’s Centre; all 2,500 annual participants in Council’s seniors programs being Ku-ring-gai residents.29 ■■ Very high rate of resident participation in community events – during 2013/14 over 51,000 people attended Council’s major community events, the majority being local residents.30 ■■ Very high rate of resident participation in local clubs, sports facilities and community groups – Ku-ringgai residents actively participate in a large number of diverse and locally focussed community organisations and groups. They include children’s services (long day care, preschools, play groups, vacation care), youth services, scouts, guides, aged services, social support groups, Probus, Rotary, Lions Clubs, churches, schools, sporting clubs, arts/cultural organisations and multicultural groups. ■■ High level of local resident volunteering – The 2011Census reported that a high 26% of the Ku-ring-gai population did some form of voluntary work. The actual number of volunteers today is estimated to be much higher, taking account of population growth and the extent of unreported volunteering. Volunteers are involved in community service groups, sporting clubs, church groups and schools. 714 bushcare, streetcare and parkcare volunteers also contributed over 12,000 volunteer hours on bushcare regeneration activities at 165 sites during 2014/15.31 ■■ Long standing resident engagement on local issues Ku-ring-gai residents have always been and continue to be actively involved in a broad range of strategic planning matters that

■■ History and tradition of working to preserve the natural environment as well as the heritage of the area – Ku-ring-gai residents have a long standing role in working to preserve the natural environment and built heritage. See also discussion under the factor ‘Heritage and Traditional Values’ on page38 ■■ A Community Strategic Plan strongly focused on Ku-ring-gai as a strongly connected place and community – Ku-ring-gai’s ‘Community Strategic Plan 2030’, adopted in 2013, has a very strong focus on values and themes that the Kuring-gai community actively supports. These include community participation, preserving the unique visual character of Ku-ring-gai, quality urban design and development, protection of heritage, appreciating the areas’ unique natural environment. See also discussion under the factor ‘Heritage and Traditional Values’ on page38

Hornsby

southern urban areas relate equally to their closer adjoining council areas of the Hills and Ryde.

Assessment of the level of engagement and involvement of Hornsby residents in their council area has been limited to information publicly available. Our analysis of physical geography, landuses and distances suggests:

Impacts on Ku-ring-gai and a merged area Ku-ring-gai has very strong resident perceptions of living in Ku-ring-gai as demonstrated in previous sections.

■■ A likely strong resident attachment to smaller local neighbourhoods within the Council area. For example rural, village and river communities with resident involvement are more likely to be focussed on local neighbourhoods and villages.

For Hornsby there is evidence of connection to smaller local areas and those urban areas close to Hornsby Town Centre, however the Council’s sheer size and divisions suggest weak locational and community connections as a whole.

■■ A likely connection of urban residents close to Hornsby Town Centre.

Based on our analysis it is difficult to justify how the locational and social cohesion of the Ku-ring-ai community will be enhanced by increasing its geographical size by six times and more than doubling its population.

■■ Strong likelihood that the western rural areas share common interests and a sense of belonging with the adjoining Hills Council rural areas. ■■ Strong likelihood that residents in

Central Macdonald

Communities of Interest

Peats Ridge

Mangrove Creek

Webbs Creek

Lower Macdonald

Greengrove Gunderman Wisemans Ferry

Lower Mangrove Glenworth Valley Calga

Leets Vale Laughtondale

Lower Portland

Spencer

Mount White Wendoree Park

Maroota

Cumberland Reach

Mooney Mooney Creek

Marlow

Singletons Mill

Sackville North Sackville

Bar Point

Canoelands

Wondabyne Cheero Point Milsons Passage

South Maroota Ebenezer

Mooney Mooney

Forest Glen

Cattai

Western Rural and River Fiddletown Settlements

Dangar Island Little Wobby

Berowra Creek

Cowan

Glenorie Brooklyn

Pitt Town

Northern Villages and Berowra Heights River Settlements

Maraylya Scheyville Arcadia

Berrilee

Cottage Point

Oakville Berowra Middle Dural Box Hill

Kenthurst

Nelson

Ku-Ring-Gai Chase

Mount Kuring-Gai

Galston Hornsby Heights

Annangrove

Mount Colah Duffys Forest Rouse Hill

Dural

Kellyville

Schofields

Asquith Hornsby

Glenhaven

The Ponds

Southern Thornleigh Urban (Hornsby)

Cherrybrook Castle Hill Glenwood Bella Vista

Kings Park Marayong Kings Langley Woodcroft Doonside Blacktown

Seven Hills

Arndell Park

North Epping

Prospect

3.5

West Pymble Winston Hills

Toongabbie Constitution Hill Girraween Pendle Hill

Ku-ring-gai

South Turramurra

Beecroft

North Rocks

Carlingford

Epping

Northmead

Huntingwood

West Pennant Hills

Dundas Valley

North Parramatta

Dundas Westmead Parramatta 7 Km

South Wentworthville Greystanes

Harris Park

Holroyd

Oxford Falls

Frenchs Forest

Gordon Killara Lindfield

Denistone East Denistone West Ryde

Rydalmere

Wentworth Point

North Ryde

Cromer

Davidson

East Killara

Roseville Chatswood

Beacon Hill

Forestville

East Lindfield

Eastwood

Camellia Rosehill

Marsfield Macquarie Park

Belrose

St Ives

Warrawee Turramurra

Pymble

Lalor Park

Bungarribee

Wahroonga

Pennant Hills

Baulkham Hills

Ingleside

Waitara

Westleigh

Parklea

Terrey Hills

North Wahroonga St Ives Chase

Stanhope Gardens Quakers Hill

North Turramurra

Allambie Heights Killarney Heights Castle Cove

North Balgowlah Seaforth Middle Cove Balgowlah Middle Harbour Castlecrag

Lane Cove North Willoughby Clontarf Northbridge Artarmon Lane Cove West Naremburn Lane Cove Cammeray Riverview Putney Cremorne Mosman Greenwich Tennyson Point Hunters Hill Ryde

MERGER PROPOSAL SUBMISSION

affect the local area. The level of engagement over the past 6 years has been reported in the Discussion Paper to the Community Strategic Plan 2030, adopted 2013, and in Council’s 2013/14 and 2014/15 Annual Reports. This also includes high level of resident support for long term whole of community programs to improve the environment, upgrade roads infrastructure and complete a major new sporting and recreation area at North Turramurra. All of these have been funded by special levies majority endorsed by the community.

KU-RING-GAI COUNCIL 32

2. Functional: the ability to meet with reasonable economy the community’s requirements for comprehensive physical and human services. There are clear differences in the functionality of Ku-ring-gai and Hornsby councils as follows:

Traffic and transport links Differences in road and other transport infrastructure within Ku-ring-gai and Hornsby Councils has direct impacts on the level of accessibility within each area and a proposed merged council. These include: ■■ Road network and efficiency Ku-ring-gai has a very strong network of north–south and east-west main and link roads which allow easy access within the council area and to adjoining areas. In comparison Hornsby’s road network is more restricted along north to south arterial roads. This forces drivers to use Pennant Hills Road to access Dural, with very high levels of traffic congestion during peak times. Access to the western sector from Hornsby Town Centre is particularly restricted with only two narrow and steep single lane vehicular routes available. These are: ●● Galston Road – with vehicle length limit of 7.5 metres ●● Berowra Waters Road - with vehicle weight limit of 3 tonnes. ●● Road access to the northern villages of Hornsby and river settlements is via the Old Pacific Highway. ■■ Availability of public transport – rail and bus Ku-ring-gai is well served by rail and bus services with the rail line running through the central spine of the council area and bus services radiating out to residential areas. Ku-ring-gai, because of its proximity to the Sydney CBD and middle-ring location is also well served by the following commuter bus services to the City CBD, to Macquarie Centre, to the northern beaches (to Terrey Hills/Mona Vale, and Belrose/Frenchs

Forest/Brookvale), to Chatswood, to Hornsby and Thornleigh (via SAN hospital). In comparison Hornsby’s northern villages and southern urban areas appear to be well served with rail, however there is a strong reliance on and limited bus services to reach the more remote western rural areas.

! F

Webbs Creek

MERGER PROPOSAL SUBMISSION

ÂŻ

Transport Links

Lower Macdonald WISEMANS FERRY

Wisemans Ferry Leets Vale Laughtondale Wendoree Park ur sb

y River

Marlow

Ha wk e

Singletons Mill

Maroota

! ! T

Bar Point Canoelands

Cheero Milsons Point Passage Mooney Mooney

Berowra Creek Forest Glen

Hawkesbury Bridge

Fiddletown

Cogra Bay Dangar Island

! T

HAWKESBURY RIVER

e ek

Old Northern Rd

Bero wra

Patonga

Cowan

BEROWRA WATERS FERRY

! T

Arcadia

Brooklyn

COWAN

Berowra F Berowra Waters Heights Berrilee

Glenorie

Cottage Point

BEROWRA

! T

Berowra Middle Dural

Mount Kuring-Gai

Galston

Hornsby Heights

MT KURING-GAI

MT COLAH

! ! ! ! ! ! !! ! ! ! ! ! ! Legend ! !! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !! ! ! ! ! ! ! ! ! ! ! ! ! Mount Colah

Dural

TAsquith

HORNSBY

Hornsby T

Glenhaven

Westleigh

North Wahroonga Wahroonga

WAITARA

Waitara T

St Ives Chase

WAHROONGA T NORMANHURST WARRAWEE TTURRAMURRA

Thornleigh T

Cherrybrook

Castle Hill

West Pennant Hills

PENNANT HILLS T THORNLEIGH

Pennant T BEECROFT Hills Beecroft T CHELTENHAM

T Multiple Lane Highway Cheltenham EPPING Single Lane (Light vehicle access) Carlingford Epping T CARLINGFORD

Northconnex

Dundas Valley

Boundary Variation

2.5

5 Km

MACQUARIE UNIVERSITY RAILWAY STA

Pymble T

PYMBLE

West Pymble

Belrose

St Ives

Warrawee T Turramurra

South Turramurra

Duffys Forest

North Turramurra

ASQUITH

Davidson

GORDON

East Killara

Gordon T

KILLARA

T Killara

Forestville

LINDFIELD

PARK T Marsfield TMACQUARIE RAILWAY STA Lindfield Roseville EASTWOOD NORTH RYDE

Eastwood T

Denistone T

Roseville Bridge

Middle Harbour North u Chatswood Bo Willoughby T T Lane West Chatswood Cove CHATSWOOD T West

T STA RAILWAY

Little Wobby

ROSEVILLE

ry nda

KU-RING-GAI COUNCIL 34

RESIDENT MOVEMENT PATTERNS ACCESSING SERVICES Analysis of resident movement patterns demonstrates significant differences existing within Hornsby Council area as well as differences between Hornsby and Ku-ring-gai areas.

Access to weekly services – shopping, schools, recreational and sporting, medical, other professional, vehicle fuel There are no resident activity connections between Ku-ring-gai and Hornsby councils for weekly services. ■■ Ku-ring-gai - is very self-sufficient for local services and weekly shopping due to the number of well-located and accessible local centres, town centre and neighbourhood centres. Ku-ringgai has significant choice for all of these services and their accessibility makes these choices more attractive to residents. ■■ Hornsby – has the following characteristics: ●● Relative self - sufficiency within the highly populated southern urban area ●● Variable self -sufficiency within the western rural area and northern villages area depending on the availability of local shopping and other weekly services. ●● Residents in the northern sector are likely to use Hornsby Westfield for weekly services not available closer to home while the rural areas to the west have access to larger local shopping centres in that sector such as Castle Hill.

Access to higher order retail, cultural, recreational and entertainment services There are no discernible resident activity connections between Ku-ringgai and Hornsby Councils for higher order retail, cultural, recreational and entertainment services.

entertainment services – most likely Chatswood, Macquarie Centre and Sydney CBD. These centres are much larger and well established with a more diverse range of higher order services (boutique retail, restaurants, etc) available than Hornsby Centre. See map of Strategic Centres which identifies the location of competing strategic centres. ■■ Hornsby – has the following characteristics: ●●

Different areas display different functional characteristics

●●

There are no strong links to Hornsby for the western rural and southern urban as there are stronger choices in Castle Hill, Macquarie Centre and Parramatta

Access to hospital and medical services There are no discernible resident activity connections between Ku-ringgai and Hornsby Councils for hospital and medical services ■■ Ku-ring-gai - The Strategic Centres map on page 61 clearly demonstrates that Ku-ring-gai residents have: ●● Multiple choices for accessing major hospitals with all available surgery options, specialist public and private hospital and specialist services – most likely NSHS, North Shore Private, the Mater, the SAN and the recently completed Macquarie Private Hospital. Ku-ring-gai residents will most likely use these facilities than travel north to the smaller and more limited Hornsby Hospital. ●● Chatswood and St Leonards particularly are well established world class commercial/medical precincts covering all aspects of medical surgery, specialist services and medical care.

■■ Ku-ring-gai - has multiple choices available for accessing higher order shopping, cultural and 32

Bureau of Transport and Statistics, JTW data based on data from the Australian Bureau of Statistics (ABS). 2011.

■■ Hornsby - has the following characteristics: ●● Different areas display different functional characteristics ●● There are no strong links to Hornsby Hospital for the western rural and southern urban areas as there are competing choices for accessing major hospitals else where.

Resident work destinations The Merger Proposal incorrectly states that the majority of both Ku-ring-gai and Hornsby residents have similar work destination patterns and work in the Sydney CBD Our analysis of journey to work characteristics for Ku-ring-gai and the three identified communities of interest within Hornsby demonstrates major differences in resident work destinations and no significant resident work connections.32

Ku-ring-gai residents Resident journey to work characteristics demonstrate a high level of self-employment and local employment with the majority of other workers commuting to Sydney, as shown in the following table.

DESTINATION OR PLACE OF WORK

26%

Ku-ring-gai

24%

Sydney Inner City Hornsby

11%

Chatswood – Lane Cove

North Sydney - Mosman

Ryde - Hunters Hill

Hornsby

Warringah

No fixed place of work

Parramatta

Baulkham Hills

12%

Other

Employment destinations vary significant and depend on the resident’s locational sector in the council area. As shown in the following tables: ■■ the majority of resident workers in the western rural sector, work in that sector, or travel equally to Baulkham Hills or Hornsby. ■■ the majority of resident workers in the northern village sector, work in that sector, which includes Hornsby Town Centre, or travel to Inner Sydney, followed by smaller similar percentages of workers travelling to Ku-ring-gai, Chatswood-Lane Cove and Ryde – Hunters Hill. ■■ the majority of resident workers in the southern urban sector, work in Inner Sydney, Hornsby, Ryde-Hunters Hill, Baulkham Hills and Chatswood-Lane Cove.

Western Rural Sector residents - Hornsby

DESTINATION OR PLACE OF WORK

27%

Dural – Wisemans Ferry

13%

Hornsby

13%

Baulkham Hills

Sydney Inner City

No fixed place of work

Ku-ring-gai

Ryde - Hunters Hill

Chatswood – Lane Cove

Parramatta

North Sydney - Mosman

18%

Other

Northern Village Sector residents - Hornsby

DESTINATION OR PLACE OF WORK

Analysis of the functionality of both Ku-ring-gai and Hornsby Councils has demonstrated the following:

35%

Hornsby

12%

Sydney Inner City

Ku-ring-gai

Significant differences in functionality

Chatswood – Lane Cove

■■ Ku-ring-gai is a highly functional local government area, able to meet the community’s requirements for a comprehensive range of physical and human services through an efficient road network, availability of bus and rail services, accessible services that meet residents weekly needs and where required, easy access to a range of quality higher order shopping, entertainment and medical services not found in Hornsby Council area.

Ryde - Hunters Hill

No fixed place of work

North Sydney - Mosman

Warringah

Parramatta

Baulkham Hills

14%

Other

SUMMARY – FUNCTIONALITY

■■ In comparison Hornsby does not provide this level of functionality to its residents due to physical and land use constraints.

Lack of connectedness ■■ The lack of connectedness between Ku-ring-gai and Hornsby Council areas and refutes statements and assumptions included in the Merger Proposal, which have been used as justification for a merger of Ku-ringgai and Hornsby.

Southern Urban Sector residents - Hornsby

DESTINATION OR PLACE OF WORK

18%

Sydney Inner City

16%

Hornsby

Ryde - Hunters Hill

Baulkham Hills

Chatswood – Lane Cove

Pennant Hills - Epping

Ku-ring-gai

North Sydney - Mosman

Parramatta

No fixed place of work

19%

Other

MERGER PROPOSAL SUBMISSION

Hornsby residents

KU-RING-GAI COUNCIL 36

3. Political: the ability of the elected body to represent the interests and reconcile the conflicts of all its members. Ku-ring-gai Ku-ring-gai Council has five wards of similar size and population with two councillors per ward representing similar numbers of residents. The distribution of wards and resident population per councillor currently provides a balanced and high level of representation for residents and the geographic area, with current wards representing approximately 23,000 to 27,000 people. Council meetings are held twice a month.

Hornsby Hornsby Council has three wards of significantly varying size with three Councillors per ward and a popularly elected Mayor. This distribution and ward areas are significantly different to those in Ku-ring-gai. Council meetings are held once a month.

Impacts on Ku-ring-gai and a merged area Ku-ring-gai Council has a strong relationship with its community and consequently the community has a high expectation to be consulted and engaged in decision making. The proposed merger of Kuring-gai and Hornsby will require representation for a population of more than double the current size. Geographically the area will be six times larger, dealing with issues that affect rural and remote communities rather than the urban issues that are the business of the current Council. Ku-ring-gai residents would be disadvantaged in the merger due to the higher population in the Hornsby local government area, thus reducing Ku-ring-gai’s elected representation An elected body will have the challenge of representing the interests of all communities and reconciling the competing interests of all residents. In addition, Councillors would be required to significantly increase the time spent on Council decision making.

SUMMARY – COMMUNITIES OF INTEREST AND GEOGRAPHIC COHESION The NSW Government’s Merger Proposal makes the following statements and assumptions: ■■ The Hornsby and Ku-ring-gai communities are bound by their sense of place as an outer suburban area in a bushland setting. ■■ The two council areas are predominantly residential ■■ Hornsby and Ku-ring-gai residents are shared communities of interest and there is a strong local identity across the merger area. ■■ Hornsby and Ku-ring-gai communities have important connections and require similar services. ■■ The merger will be better placed to strengthen the strategic centre at Hornsby as an employment hub and remove barriers to investment. ■■ The merger will be better placed to support health related land uses and infrastructure around Hornsby Ku-ring-gai Hospital. ■■ The local economy of the local government areas of Hornsby and Ku-ring-gai is characterised by a workforce that predominantly works in the Sydney CBD rather than locally. ■■ A combined Hornsby and Ku-ringgai is relatively self-contained in relation to: ●● household travel to parks and open spaces ●● household travel to shopping centres – for example Westfield Hornsby Shopping Centre and St Ives Shopping Village ●● household travel to health amenities – for example Hornsby and Ku-ring-gai Hospital, Sydney Adventist Hospital, Lady Davidson Private Hospital ●● educational and research institutions - for example many high quality public

and private schools, TAFE NSW Northern Sydney Institute (Hornsby College), CSIRO Telecommunications and Industrial Physics and National Measurement Laboratory ●● social and recreational activities – for example Asquith Golf Club, Pennant Hills Golf Club, St Ives Showground, and the Brickpit Sports Stadium.

In summary, the Merger Proposal assumes ■■ Both council areas have cohesive physical geography ■■ Both council areas have similar demographic, economic employment, journey to work and resident activity movement patterns ■■ Both areas have communities of interest with similar perceptual, functional and political representative characteristics. To test these statements and assumptions, Council undertook more detailed analysis of the physical, demographic and employment characteristics as well as resident activity movement and journey to work patterns for both areas.

Our analysis has highlighted; ■■ significant and unresolvable differences between the Ku-ring-gai and Hornsby local government areas. ■■ proven that the Merger Proposal statements and assumptions are incorrect.

The Ku-ring-gai community will be severely disadvantaged in a merger with Hornsby by inheriting a collection of different communities of interest which currently exist in Hornsby. This can only have the effect of reducing Ku-ring-gaiâ&#x20AC;&#x2122;s own strong community identity and locational unity. A merger will reinforce the existing lack of geographic cohesion and differences in communities of interest within Hornsby and between Ku-ring-gai. For a new merged council there will be historic and unsolvable differences in resident connectedness and patterns of activity, major challenges in addressing the conflicting expectations and priorities of different areas, budgetary impacts and a potentially unworkable local government.

MERGER PROPOSAL SUBMISSION

IMPACTS ON KU-RING-GAI AND A MERGED AREA

KU-RING-GAI COUNCIL

PART 2: ASSESSMENT OF LEGISLATIVE FACTORS - SECTION 263(3) OF LOCAL GOVERNMENT ACT, 1993

03 Historical and traditional values

263 (3) (c) the existing historical and traditional values in the existing areas and the impact of change on them.

SUMMARY The Ku-ring-gai community’s cherished historical and traditional values set it apart from other local government areas. These long held values of protecting the area’s magnificent natural environment, preserving visual landscapes and built heritage, managing urban development to maintain liveable built environments which protect the treed landscape character, supporting community priorities through volunteering and actively engaging in future planning for the area, has created a community with many common values. These values have been passed on from generation to generation and are embraced by new residents attracted to the areas for its special qualities. The geographic cohesion and social inclusiveness of the area reinforces these values. Residents’ strong sense of connection to the area and the appreciation of its assets, combined with a desire to avoid the planning mistakes of other areas of Sydney, has also created a lasting willingness to advocate on behalf of the community to preserve the area’s natural and historical assets and urban liveability. Hornsby Shire Council, by the very nature of its location on the northern edge of Sydney, its size, physical divisions, rural and remote communities, different development history and communities of interest, does not share these values and shared interests. A merger with Hornsby Shire will create a new entity comprised of competing and contradictory community values and objectives. There will be an erosion of the historical and traditional values generated, implemented and retained by Ku-ring-gai for over 100 years.

Ku-ring-gai has a very strong historical and traditional emphasis on protecting the natural environment, built and heritage character of the existing urban areas and a measured approach to accommodating additional urban growth and development. The Ku-ring-gai community’s cherished historical and traditional values set it apart from most other local government areas and include the following:

COMMUNITY ENVIRONMENTAL VALUES Covering 85 square kilometres, Ku-ring-gai is surrounded by three national parks, giving it a unique natural geographical character and position. Its natural diversity is derived from its elevated position, rich soils, high annual rainfall and a deeply dissected plateau, characterised by typically wet sclerophyll forest ecology of high conservation value. Ku-ring-gai’s natural habitat remnants are regarded as the last remaining biodiversity hotspots in the Sydney metropolitan area. The mosaic urban forests of Kuring-gai consist of biodiversity in protected reserves as well as connected vegetation corridors in public parks, golf courses, ovals, residential streets and private gardens. They contain locally and regionally significant and threatened ecological communities, species and populations, plus an important genetic seed-bank which together form part of ‘Greenweb’, Ku-ringgai’s biodiversity reservoir. Within this network 10 threatened flora species and 20 fauna species

(including 12 mammals, 6 birds, 2 amphibians and 1 reptile) have been recorded in the last 15 years. Many more threatened species have been intermittently recorded in the area. In 2014 a critically endangered flowering herb, Hibbertia spanantha, was discovered in a reserve adjoining a popular sporting facility and in 2015 an endangered fern, Grammitis stenophylla, was found in Rofe Park Turramurra. Ku-ring-gai’s unique geographic complexity gives rise to diverse habitat and the potential for many more species to occur. In many respects Ku-ring-gai is the last frontier in the discovery of natural heritage in the Sydney metropolitan area, having international significance with respect to the Convention on Biological Diversity. From an aesthetic viewpoint, Kuring-gai is defined by its unique biodiversity and beauty. Without the tall tree canopy and diversity of fauna, the Ku-ring-gai area would be indistinguishable from the many Sydney areas which have already been cleared of natural habitat.

OVERWHELMING COMMUNITY SUPPORT Council is fortunate to have an overwhelming 88% community support for the environmental levy which helps Council protect and improve the aesthetic and scientific/educational value of its reserves, as well as important European and Indigenous cultural heritage values. Many of Council’s bushland reserves support low-impact

Community Groups – Environment ■■ STEP ■■ Ku-ring-gai Bat Conservation Society ■■ Friends of Ku-ring-gai Environment (FOKE) ■■ Ku-ring-gai Bushcare Association ■■ WildThings Inc ■■ Australian Plant Society ■■ Permaculture North Inc

COMMUNITY URBAN PLANNING VALUES Development of the area has historically incorporated the characteristics of the natural environment, particularly through retention of the tree canopy. Community identification is strongly based on the distinctive characteristics of Ku-ring-gai’s architecture, its urban design qualities, natural reserves, gardens and the large trees which dominate residential roads. The combination of landscape features has served to give the area a distinctive signature and acts to differentiate Ku-ring-gai from other council areas. Ku-ring-gai’s community has always been a strong influence on the way its suburbs have appeared and developed during its history. Early European settlers in the 1800s and early 1900s recognised the significance of the natural bushland, its important place in communities and its health benefits for a growing Sydney. They advocated strongly for the retention of bushland reserves and set aside land for the reserves, parklands and recreation areas that Ku-ring-gai is renowned for today.33 The physical appearance

of Ku-ring-gai, the connectedness of green leafy areas encompassing both public and private lands and the physical location of urban areas within a well-defined geographic boundary, have been critical contributory factors to a sense of place. In order to sustain the dominant part of this green urban fabric, Council has developed its own unique way of addressing sustainability through targeted and innovative engagement and capacity building programs in energy and water saving. Combined with this Council has successfully translated a model of ecologically sustainable development to operational areas such as practical development controls in Council’s Development Control Plans, urban management and decision-making. Importantly these policies have resulted in positive feedback with respect to economic and social issues, supporting social cohesion, residential satisfaction and place identification. Ku-ring-gai has traditionally valued its residential areas (including heritage and landscape character) being evenly distributed along the main north south rail and road links with intersecting bushland areas along creeks, gullies, bushland corridors and riparian zones. More recently the medium to high density residential development up to 7 levels has spread along the Pacific Highway and north shore railway line and the adjacent commercial centres. Traditional values relating to managing the impacts of urban development have been focused, well researched, applied and monitored – to protect the treed landscape character of the area and create an acceptable urban form, with a transition to adjoining lower forms of urban development emphasising quality architecture and urban design. It is this heritage and landscape character of the area most valued by its community. Award winning policies e.g. Thinking

outside the Box and the Ku-ringgai Open Space Strategy and Open Space Acquisition Strategy demonstrate innovative approaches to managing urban growth, underpin the existing historical and traditional values of Ku-ring-gai. Best practice community consultation and land use planning have led to a robust planning framework to deliver quality design outcomes and maintain the identity and character of Ku-ring-gai.

COMMUNITY HERITAGE VALUES Ku-ring-gai is the birthplace of the National Trust of Australia (NSW) and has traditionally valued its significant built heritage with over 940 heritage items and with 50 Heritage conservation areas within a well-defined compact urban area. In addition over 3800 properties are within the Ku-ring-gai Heritage Conservation Areas, or approximately 10% of all properties. Ku-ring-gai has many examples of work by some of Australia’s finest early 19th and 20th Century architects. It is also the place many of them chose to build their own homes within the area. Highly skilled in-house staff in the areas of planning, heritage policy, architecture, urban design and landscape architecture within the strategy department set up a unique combination of skills and resources. These staff are important in achieving community objectives as they understand the views of the community and ensure these values are represented in strategic plans. Today, Ku-ring-gai is a culturally diverse society that still retains much of its unique natural and built heritage, managing to balance reasonable urban growth with heritage and environmental conservation. Prominent architects and landscape designers in the Ku-ring-gai Council area and examples of designed or built houses:34

19th Century ■■ Howard Joseland (resident of Wahroonga, designed 49-51

Curby, P and Macleod V, Under the Canopy – a Centenary History of Ku-ring-gai Council, p 34 – 40, 2006. Ku-ring-gai Historical Society, Ku-ring-gai Local History series, Second Series Architecture - Housing in Ku-ring-gai, May 1986. Edwards, Zeny, Six of the best: architects of Ku-ring-gai, 1998. Ku-ring-gai Historical Society and Ku-ring-gai Council records.

33 34

MERGER PROPOSAL SUBMISSION

recreation and high community values, cared for by active volunteer groups. Ku-ring-gai Council’s Community Volunteer program delivers one of the largest per capita environmental civic leadership programs in NSW with over 1000 volunteers participating in a range of programs.

KU-RING-GAI COUNCIL 40

Burns Rd. Wahroonga, 25 Water Street Wahroonga and 8 Redleaf Avenue, Wahroonga) ■■ Garden designers Paul Sorenson and Jocelyn Brown (resident of Pymble) ■■ Glen Gilling Rothiemay at 35 Fox Valley Road, Wahroonga

arts and diversity of culture in the area.

Community Individuals – Environment ■■ Nancy Pallin ■■ Janet Harwood

■■ Augustus Aley (resident of Killara – 7, 8 & 11 Yosefa Avenue, Warrawee, 9 Lynwood Avenue, Killara

■■ Neroli Lock (deceased)

■■ Walter Vernon and Hugh Vernon

■■ John Ballint

■■ Sir John Sulman (Upton Grey Hastings Rd Warrawee and 11 Pibrac Avenue, Warrawee)

■■ Cathy Cowley

■■ Hardy Wilson (Macquarie Cottage, in Avon Road, Pymble)

20th Century ■■ Russel Jack (62 Boundary Road, Wahroonga) ■■ James Peddle (houses Pymble Avenue and Orinoco Avenue, Pymble) ■■ Walter Burley Griffin (Coppins, sometimes Eric Pratten House) ■■ Harry Seidler (resident of Killara, Rose Seidler House) ■■ Ken Woolley (resident of Wahroonga) ■■ Colin Madigan (McRae Avenue Turramurra)

COMMUNITY CULTURAL VALUES Ku-ring-gai has a long history of support for cultural pursuits. Art, music and literature have historically and continue to play an important role in community life in Ku-ring-gai. The community, with Council assistance, actively promotes social inclusion through programs, events and organisations in the areas of visual and performing arts, music and food along with the celebration of both Aboriginal and Early European heritage. Council and the community work collaboratively to sponsor, promote and present events in a major annual program covering all aspects of the

■■ John Martin ■■ Jill Green

■■ John Daley ■■ Julie Antill

Prominent men and women from Ku-ring-gai ■■ Murray Barnes - https:// en.wikipedia.org/wiki/Murray_ Barnes

who is considered to be one of the leading exponents of Modernism’s methodology in Australia and the first architect to fully express the principles of the Bauhaus in Australia ■■ Ruth Cracknell AM was an Australian character actress and author, her career encompassing many genres including radio, television, film, and especially theatre. Although not a Ku-ringgai resident, she had a close association with the Marian Street Theatre in Killara. ■■ Ethel M Turner is the author of the children’s book Seven Little Australians. In 1891, Turner moved with her family to Inglewood (now known as Woodlands), a large house in Killara, which was then out in the country. Inglewood still stands today in Werona Avenue and is where she wrote Seven Little Australians.

■■ Ellyse Perry - https://en.wikipedia. org/wiki/Ellyse_Perry ■■ Bruce Djite - https://en.wikipedia. org/wiki/Bruce_Djite ■■ Sebastian Ryall - https:// en.wikipedia.org/wiki/Sebastian_ Ryall ■■ Sam Figg - former St Ives Rugby player is in the current Australian Sevens squad as is a former Wahroonga Rugby player Cam Clarke who lived in St Ives. ■■ Grace Cossington Smith AO OBE was an Australian artist and pioneer of modernist painting in Australia and was instrumental in introducing Post-Impressionism to her home country. Examples of her work are held by every major gallery in Australia ■■ Harold Cazneaux was an Australian pictorialist photographer; a pioneer whose style had an indelible impact on the development of Australian photographic history. In 1916, he was a founder of the Pictorialist Sydney Camera Circle. ■■ Harry Seidler, AC OBE was an Austrian-born Australian architect

HORNSBY SHIRE’S HERITAGE Hornsby Shire’s heritage resources include buildings, works, relics, trees and areas which are important in providing tangible links to their past. They include a number of rural items which combine to create a distinctive character and richness to the environment and history of the area. Hornsby Shire’s concept of heritage significance is based on the understanding that the particular item has historic, aesthetic, scientific or social value for the past, present and future generations. Items of heritage significance usually possess one or more of these values. Hornsby Shire also has unique areas of historical and environmental heritage and protecting these is the responsibility of Council. Hornsby Council does this through the identification and listing of heritage items and heritage conservation areas, as well as planning controls that protect them. More than 800 heritage items have been listed and nine Heritage Conservation Areas (HCA) created.

The Hornsby Shire area comprises of high-rise, high density, medium density and free standing houses. It also includes rural lifestyle blocks dispersed between the few remaining orchards and working farms, wharves, boatsheds, parks and railway stations, as well as many houses and buildings. In its submission to the Productivity Commission’s Inquiry into the Conservation of Australia’s Historic Heritage Places by the Hornsby Shire Historical Society35 it was stated that; “The current residents of Hornsby Shire reflect the full socio-economic and ethnic spectrum of Australia. In a Shire as diverse as Hornsby there are many pressures on the conservation of heritage places. Many of the residents of the Shire were not born in Australia and thus do not identify with the history of Australia or cultural evolution that made Australia the place in which they have chosen to live. Many of the residents who live in medium and high-density housing are transient residents, who treat their housing as a dormitory and have little interest in the area where they live except as users of services. As much of the housing stock in Hornsby Shire is fairly old and of modest proportions, on quite large blocks of land close to public transport, it is therefore popular with developers. They buy, demolish, subdivide the land and cover it with wall to wall large housing with paved gardens, then sell and move elsewhere. Increased housing density is encouraged by the State government in response to Federal Government policies, or lack of policies, with no apparent thought for the effects this has on the culture of an area, and thus the conservation of the heritage places of the area”.

Based on publicly available information there is no evidence of a shared community interest and strong local voice for promoting and recognising heritage, urban planning, natural values and a definitive landscape character in the Hornsby Shire area which represents risks for a merged council.

IMPACTS OF A MERGER AND NEW ENTITY

existing residential character, environmental and prime heritage landscapes. ■■ Loss of innovation and the delivery of current projects, and approaches to heritage, planning, urban design and biodiversity planning, as there is no guarantee these would be supported or have the skilled experienced and committed staff to continue under a merged entity.

Under a merged entity there are the following risks: ■■ An erosion of the historical and traditional values generated, implemented and retained by Kuring-gai for over 100 years ■■ A scaling back or discontinuance of Council’s plans, services and programs which support the community’s long held environmental, urban planning, heritage and cultural values ■■ Loss of Ku-ring-gai’s unique planning controls which have achieved development outcomes with a focus on preserving the high quality residential environment characterised by a distinctive treed and landscaped setting. Our landscape and heritage controls underpinning the planning controls for medium density residential development are unmatched and considered the current benchmark by the NSW Department of Planning. ■■ Loss of skilled assessment staff who ensure Council’s controls are upheld and built outcomes are of an exemplary standard. This is to a degree reflected in higher property values due to market preferences, demand and supply. ■■ The combined future dwelling targets and a lack of suitable urban development areas in the northern sector of the new entity will generate disproportionately increased development in the former Ku-ring-gai area, negatively impacting on the historical and traditional values associated with the

Productivity Commission, Report on Conservation of Australia’s Historic Heritage Places, 2006. [accessed 26 February 2016] www.pc.gov.au/inquiries/completed/heritage/submissions

MERGER PROPOSAL SUBMISSION

Hornsby Shire’s heritage also includes significant remnants of Aboriginal culture as evidence of the occupation of the Dharug and Guringai Aboriginal people who were the original owners of Hornsby Shire.

KU-RING-GAI COUNCIL

PART 2: ASSESSMENT OF LEGISLATIVE FACTORS - SECTION 263(3) OF LOCAL GOVERNMENT ACT, 1993

04 Attitudes of residents and ratepayers

263 (3) (d) the attitude of the residents and ratepayers of the areas concerned.

SUMMARY Ku-ring-gai residents are concerned about the proposed merger and its impact on representation, rates, service levels and loss of local identity. This has been clearly demonstrated throughout this reform process and at the public inquiry. All but three speakers indicated strong opposition to a merger with Hornsby Council.

KEY POINTS The residents of Ku-ring-gai strongly support retaining Kuring-gai in its existing form with a surveyed 79% for a stand alone Council. Ku-ring-gai Council has a strong relationship with its community and the community has a high expectation to be consulted and engaged in decision making. Hornsby Council did not actively engage their community on the Fit for the Future proposals and did not seek community feedback to inform their submission to IPART. Therefore the views of Hornsby residents since 2013 are largely unknown.

HORNSBY SHIRE COUNCIL CONSULTATION

■■ Unconvinced a rates reduction will materialise

In June 2013 Hornsby Council commissioned the market research company Crosby Textor to undertake qualitative and quantitative polling of residents in Hornsby, The Hills, Ku-ring-gai, Parramatta and Ryde local government areas.

■■ Effect on existing arrangements regarding state grant funding and federal financial assistance

Qualitative Research by Crosby Textor Four focus groups of 8-10 people were held on 11 June 2013. Participants (a representative mix of ages, sexes, occupations and suburbs) were drawn from Hornsby and formed into two groups (one from the urban area and one from the rural area). Participants were asked their opinions on council mergers generally, based on ‘Reasons to Support’ and ‘Reasons to Oppose’. The ‘Reasons to Support’ put forward included: ■■ Efficiency, cost reductions and higher skill level in the workforce ■■ Improved and broader service delivery and better facilities ■■ A larger council will have larger say and the ability to lobby more effectively ■■ Transport efficiency – a merger will extend transport networks through adjoining councils ■■ Higher revenue base and greater capacity to undertake large scale projects The ‘Reasons to Oppose’ included: ■■ Prioritisation - there may be competing interests for resources and capital funding in a merged council - potential loss of small scale local projects

■■ Loss of local identity and representation ■■ Scale and efficiency of a larger council body may adversely affect effective local management due to increased bureaucracy. ■■ Loss of key council staff ■■ Accessing services close to home due to larger council area Quantitative Research by Crosby Textor A telephone survey was also conducted in June 2013 of 700 randomly selected adults as follows: ■■ Hornsby Council local government area - 300 people ■■ Ku-ring-gai Council local government area - 100 people ■■ The Hills Council local government area - 100 people ■■ Parramatta Council local government area - 100 people ■■ Ryde Council local government area - 100 people Response from Hornsby residents: The opinions of Hornsby residents regarding amalgamating councils was closely split (49% oppose amalgamations, 44% supported amalgamations, 7% didn’t know). The main reasons to support a proposed amalgamation were related to costs and efficiency. That is a merged council will reduce costs, improve the quality and access to services.

■■ small local governments are more personal and in touch with local community needs ■■ there may be a greater risk of issues being overlooked by a large council ■■ an amalgamated council will be too large an area to manage. IMPORTANT NOTE: It is important to note that Hornsby Council’s commissioned polling was carried out in June 2013, ahead of the first published NSW Government report on potential merger proposals later that year36 and well ahead of public discussion on the relative merits or disadvantages of particular mergers.

KU-RING-GAI COUNCIL CONSULTATION The residents of Ku-ring-gai strongly support retaining Ku-ring-gai in its existing form with 79% supporting stand alone Council. The main period of community engagement regarding Ku-ring-gai’s proposed merger with Hornsby occurred in May and June 2015. A report outlining the results was included in Council’s Improvement Proposal to IPART in June 2015. Quantitative research – community survey A broad ranging community engagement exercise over a nine month period was undertaken which included a telephone survey conducted by independent market research company Micromex Research where 402 residents participated with a maximum sampling error of plus or minus 4.9% at 95% confidence. Results indicated that participants preferences were as follows: ■■ 79% indicated a preference to stand alone ■■ 21% preferred to merge with Hornsby Council

Opt-in community survey

Correspondence from residents

Council also conducted an opt-in voluntary community survey between 15 May and 12 June 2015. The survey, with similar questions to the independent telephone survey, was available online and in print. Council received 2,077 responses to the opt-in survey. Results indicated participants’ preferences as follows:

Since early 2014 Ku-ring-gai Council’s Mayor has received 124 items of correspondence regarding the proposed mergers, of which 80 were opposed to amalgamations and 44 were in support.

■■ 77% indicated a preference to stand alone ■■ 23% preferred to merge with Hornsby Council Community Meeting Council also conducted a community meeting to provide residents with an opportunity to discuss Ku-ringgai Council’s adopted position on Fit for the Future with senior council staff, ask questions and take part in a ballot. 29 community members attended of which 26 people completed a ballot paper. The results showed: ■■ 92% (24 people) opposed amalgamation. ■■ 4% (1 person) supported amalgamation. ■■ 4% (1 person) didn’t know. Examples of comments received regarding proposed amalgamations For: ■■ ‘seems to make more sense to minimise Councils in Sydney as there are so many’ Against: ■■ Like it or not, the two municipalities are completely different, have a different historical background and different objectives. ■■ This is a unique area. Hornsby is spread out over a large area and has different requirements ■■ I am opposed to amalgamation of Ku-ring-gai Council with Hornsby Shire as I believe Ku-ring-gai’s financial position would be substantially weakened if this amalgamation goes ahead. Rates would increase for us older folk – they are already high enough.

PUBLIC INQUIRY As part of the Boundary Review Process the public inquiry was held in two sessions on Wednesday 3 February 2016 at Pymble Golf Course. The inquiry was for both the Ku-ring-gai and Hornsby communities. Both sessions of the inquiry were well attended, with around 300 residents at the 1-5pm session and approximately 200 at the 7-10pm session. The total number of speakers was 99, the overwhelming majority of speakers were from Ku-ring-gai and opposed to the merger. Only three speakers spoke in favour of a merged entity. Some summarised comments from residents who spoke at the inquiry included: ■■ Both councils were assessed fit for the future except on scale and capacity which keeps changing. ■■ Both councils are larger than some not required to merge. ■■ The projected savings by merging Hornsby & Ku-ring-gai are around 1.5% every year for 20 years. In the private sector the benchmark for mergers is savings of at least 10% per year. ■■ The Liberals promised no forced mergers before the election. We feel betrayed. ■■ This is a politically driven process. The inquiry is nothing more than a charade. ■■ We don’t have enough information – release the KPMG report in full. In addition, several speakers called for a referendum or plebiscite on the issue.

ILGRP, Revitalising Local Government - Final Report of the NSW Independent Local Government Review Panel, October 2013.

MERGER PROPOSAL SUBMISSION

The main concerns surrounding council mergers were that:

KU-RING-GAI COUNCIL 44

IMPACTS OF A MERGER PROPOSAL ON KU-RING-GAI AND A NEW AREA There would be a number of impacts on Ku-ring-gai residents and a new area: Maintaining levels of engagement Ku-ring-gai residents expect high levels of community engagement. Additional resources will be required to maintain this engagement level across the merged Council, particularly in relation to major projects across a larger geographical area. Public meetings and workshops As part of Ku-ring-gai Council’s commitment to engage with the Ku-ring-gai community, residents are provided with opportunities to attend workshops, information seminars and public meetings on a diverse range of strategic planning issues. To service a wider geographically dispersed community multiple meetings would be needed to ensure the community can participate. This

would have significant cost and time implications for delivering high standards of community consultation. Access to Councillors and Council Distance and time factors would need to be costed and considered for Councillors and Council officers to travel to meet and engage with community members, particularly with accountability issues in the Hornsby area. Refer to the section on accessibility under ‘Other Factors’ on page 62 for more details. Access to Council meetings and other meetings (including consultation workshops, forums etc) would also need to be costed and considered. These may include webcasts of council meetings and council meetings held in outlying locations. Distribution of printed information A larger area and population would mean timely distribution of information to all residents would be more expensive and take longer.

Internet connectivity of rural communities Ku-ring-gai has a strong focus on communicating via its website and e-newsletters. Rural communities may not have access to reliable and fast internet as enjoyed by Ku-ringgai residents and this may present challenges and additional costs in the way information is distributed. Cost of advertising in multiple printed media Ku-ring-gai currently focuses promotion on one publication, the North Shore Times. In a merged Council this would expand to at least three major publications, as well as other smaller publications servicing niche areas of the merged council population. For example, the Hornsby Advocate is not distributed north of Mount Colah.

MERGER PROPOSAL SUBMISSION

ASSESSMENT OF LEGISLATIVE FACTORS - SECTION 263(3) OF LOCAL GOVERNMENT ACT, 1993

05 Elected representation

263 (3) (e) the requirements of the area concerned in relation to elected representation for residents and ratepayers at the local level, the desirable and appropriate relationship between elected representatives and ratepayers and residents and such other matters as it considers relevant in relation to the past and future patterns of elected representation for that area. SUMMARY

KEY POINTS

Ku-ring-gai Council strongly reiterates its view that it remain a stand alone Council area on the basis that it provides the best representation for the Ku-ringgai community, and supports the community’s high expectations for engagement, communication and advocacy on important community values.

■■ Local representation for both communities would significantly reduce in a merged council.

This is consistent with the views expressed by residents during nine months of community engagement and consultation on this issue. Ku-ring-gai Council does not support the merger proposal for the following key reasons:

CURRENT REPRESENTATIVE STRUCTURES Ku-ring-gai Council is currently a large local government area of over 120,000 people and 85m2 in size. It has five wards with two Councillors with the current wards including approximately 23,000 to 27,000 people equivalent to approximately 12,000 people per Councillor. Council meetings are held twice a month. The current representative structure for Hornsby is three wards with three Councillors and a popularly elected Mayor. The wards currently each support approximately 53,000 people, equivalent to approximately 18,000 people per representative. Council meetings are held once a month.

■■ Councillors would be required to significantly increase the time spent on decision making ■■ Ku-ring-gai residents would be disadvantaged due to the higher population in the Hornsby local government area, thereby

reducing Ku-ring-gai’s elected representation. ■■ The vast increase in overall land area in a merged council would result in a local government area six times the size of the current Ku-ring-gai Council area, leading to major logistical issues for Councillors serving and communicating with residents.

IMPACTS OF THE PROPOSED MERGER The types of decisions now required of Councillors have significantly increased in their complexity. To be effective, Councillors are required to understand modern Local Environmental Plans (LEP), masterplanning of large town centres, Public Private Partnerships, gateway matters and the financial detail involved in the design and tendering for major public facilities. As well as decision making, Councillors attend community based functions, sporting events, consultations, internal and external committees, workshops and training conferences as local representatives. They are also required to participate in regional decision making and liaise with State and Federal Members of Parliament. Ku-ring-gai Council does not support decreased representation for its residents and the consequent increased workload and decision making for Councillors.

The planned merger of Ku-ring-gai and Hornsby will require representation for a population of more than double the size. Geographically the area will be six times larger, dealing with issues that affect rural and remote communities rather than the urban issues that are the business of the current Council. Key impacts for Ku-ring-gai include: ■■ Local representation for both communities would significantly reduce in a merged council. ■■ There would be 15 councillors as opposed to 20, reducing local representation to one councillor per 18,000 residents, assuming 15 councillors. The merged council would have to represent all residents from Roseville to Wisemans Ferry, a distance of 65 kilometres by road.

Greengrove

GOSFORD KU-RING-GAI COUNCIL

Gunderman Wisemans Ferry

Somersby

Lower Mangrove

Glenworth Valley

Calga

Leets Vale

Laughtondale

Spencer Mount White Kariong

Wendoree Park

Maroota Mooney Mooney Creek Marlow

Singletons Mill

Bar Point

Canoelands

Wondabyne

South Maroota

Cheero Point Milsons Passage

HAWKESBURY

Cogra Bay

State Electoral Boundary Population (2011) 75660 Area (sq km) 3409

Mooney Mooney

Dangar Island Forest Glen

Little Wobby Berowra Creek

Fiddletown

Cowan

Glenorie

Brooklyn

Maraylya

Berowra Waters

Arcadia

Berowra Heights

Berrilee

Cottage Point

Berowra

Middle Dural Ku-Ring-Gai Chase

Kenthurst Nelson

PITTWATER

Mount Kuring-Gai

Galston

Hornsby Heights

Annangrove

HORNSBY

Mount Colah

State Electoral Boundary Population (2011) 73351 Area (sq km) 233

Rouse Hill

Duffys Forest

Dural Asquith

North Turramurra

Terrey Hills Ingleside

Beaumont Hills

Hornsby

North Wahroonga

Glenhaven

Kellyville Ridge

St Ives Chase Waitara

Westleigh

KU-RING-GAI

Stanhope Gardens

State Electoral Boundary Population (2011) 73819 Castle Hill Area (sq km) 38

Parklea

RIVERSTONE

Cherrybrook

Thornleigh

CASTLE HILL

Glenwood

St Ives

DAVIDSON

Pennant Hills

Bella Vista

West Pennant Hills

Kings Langley Baulkham Hills

Lalor Park

BAULKHAM HILLS

NSW State Electoral Boundaries (2011) Seven Hills

Old Toongabbie

TOONGABBIE

SMITHFIELD

■■ Given the population increases projected in the next 15 years, local representation would be further reduced to as little as one councillor per 23,000 residents. The sheer physical size of the area will make it very difficult for individual Councillors to get to know the area in sufficient detail and make truly informed decisions on

Brookvale

Allambie Heights Killarney Heights

Roseville Chase

Marsfield

Northmead

Westmead

Forestville

East Lindfield

Killara

RYDE

Macquarie Park

Manly Vale

Roseville Castle Cove

Middle Cove

Dundas Valley Denistone East

Dundas

Denistone West

North Ryde

Chatswood West

North Balgowlah

Chatswood

Lane Cove North

Ryde

LANE COVE

East Ryde

behalf of all residents, particularly in relation to major community strategic planning issues. This will include, for example, how and where future population growth is accommodated in the merged area, providing new facilities and services for the growing population, the design quality of new buildings and spaces and protecting the

Middle Harbour

WILLOUGHBY 2.5

Artarmon

Fairlight

Castlecrag

Willoughby

MANLY

Seaforth

Balgowlah

North Willoughby Willoughby East

Denistone

West Ryde

North Manly

Lindfield

Eastwood

Oatlands

Narraweena

Beacon Hill

West Pymble

Carlingford

Telopea

WAKEHURST

East Killara

Gordon

Epping

North Rocks

PARRAMATTA

Frenchs Forest South Turramurra

EPPING

Winston Hills

Cromer Oxford Falls

State Electoral Boundary Davidson Population (2011) 68704 Area (sq km) 76

North Epping

Merged Council - Ku-ring-gai and part Hornsby

Population Area (sq km) Toongabbie Constitution Hill Local Government Area (2014 estimates) North Parramatta Ku-ring-gai LGA 120978 85 Girraween Hornsby LGA (incl Epping) 168614 462 Pendle Hill Merged (excl Epping) 270060 540 Wentworthville

Pymble

State Electoral Boundary Population (2011) 70502 Beecroft Area (sq km) 35 Cheltenham

Belrose

Wahroonga

State Electoral Boundary Warrawee Population (2011) 73975 Area (sq km) Turramurra58

Normanhurst

Balgowlah Heights 5 Km

Northbridge

natural environment and heritage. The major challenge this will pose to elected councillors is highlighted by the discrepancies between the population of the merged Council (270,000-350,000) and existing State Electoral Boundaries which only cover approximately 75,000 people. See the map above for comparison of boundaries.

06 Impact on service delivery and facilities

263 (3) (e1) the impact of any relevant proposal on the ability of the councils of the areas concerned to provide adequate, equitable and appropriate services and facilities.

SUMMARY There are few service and community facility links between Ku-ring-gai and Hornsby Shire Councils apart from some joint regional programs. Hornsby’s very large area on the edge of Sydney and significant geographical constraints as well as Ku-ring-gai’s location at the extreme southern end of Hornsby Shire and its relative self-containment, are not conducive to links. Variances in the levels of services delivered to communities across the council areas are a major concern in the proposed merger. Ku-ring-gai Council has higher revenue per capita than Hornsby Shire, and expends more per capita on its services and programs. A merger would require the harmonisation of services, resulting in either a reduction of service levels for the former Ku-ring-gai area or increasing service levels in the former Hornsby area. The reduction of services is not readily accepted by communities, and it is more likely that services levels will equalise which in turn leads to increases in rates.

Apart from some joint regional programs there are few service and community facility links between Ku-ring-gai and Hornsby councils.

■■ Bushland management activities provided within the 340km2 of the Hornsby designated National Park or environmental protection.

Both Ku-ring-gai Council and Hornsby Shire provide a range of services that comply with legislative requirements, meet local community needs and respond to community objectives and expectations. The type and levels of service vary considerably between the councils due to significant variations in land area, pattern of development, mix of land uses, population characteristics as well as community needs and expectations.

■■ Land use planning, development assessment, development control and ranger services to areas 6 times larger than Ku-ring-gai and with a greater mix of land use zones (rural and industrial zones and significantly larger business centre at Hornsby).

Ku-ring-gai has relatively compact, more easily accessible urban areas for the delivery of efficient services. In comparison Hornsby is characterised by very large distances, dispersed population settlements and a broad mix of land uses, all of which affect the relative availability of services and their cost. The comparison of Ku-ring-gai Council and Hornsby Shire’s physical, social and economic characteristics in other sections, highlights a number of important differences. For example, Hornsby’s services include: ■■ The maintenance of unsealed rural roads (29km); maintenance of bridges on local urban roads and maintenance and management of boat ramps, jetties and wharfs.

■■ Bushfire management support to a much larger area classified as high fire danger. Hornsby Shire has 20 fire brigades within its LGA, compared to one in Ku-ring-gai. ■■ Catchment management planning and remediation works to a significantly larger area with major river and creek systems. This includes approximately 168km frontage to the Hawkesbury River, Berowra Creek and Cowan Creek. ■■ Other services reflecting a 40% larger population than Ku-ring-gai. A combined council would have a much larger population spread over an area six times the current size of Ku-ring-gai with a distance of 65km to travel from north to the south. The provision of services and facilities would be challenging in a merged Council, with likely conflict about the allocation of resources, consistent levels of service across disparate communities, and cross subsidisation between the different areas.

MERGER PROPOSAL SUBMISSION

ASSESSMENT OF LEGISLATIVE FACTORS - SECTION 263(3) OF LOCAL GOVERNMENT ACT, 1993

KU-RING-GAI COUNCIL 48

COMMUNITY FACILITIES AND ASSETS The table below compares the number of key community facilities and infrastructure within Ku-ring-gai Council and Hornsby Shire as well as a combined council. Key features include: ■■ The community facilities of both councils are ageing and will need significant investment to renew or replace.

■■ Ku-ring-gai’s parks, sportsgrounds and community facilities are more evenly located through the area, making them more accessible. ■■ Due to Hornsby’s very large geographical area (6 times the size of Ku-ring-gai) many of its community facilities and assets service dispersed and remote communities. A reduction in these

facilities and assets may not be possible to achieve potential economies of scale. ■■ Access to some community facilities for Hornsby residents is impacted by distance of travel, particularly residents in the north and northwest of the Hornsby Shire.

KEY COMMUNITY INFRASTRUCTURE

KU-RING-GAI

HORNSBY

COMBINED

Population (2014 estimates) Suburbs Geographical Area Sealed Roads Unsealed Roads Libraries Parks (includes playgrounds) Council Child Care Facilities Aquatic Leisure Centres/Public Pools Community Halls/Centres Council Offices Depots Outdoor Sport Stadium (Capacity 10,000+) Museums & Galleries Showgrounds Indoor Sport Centre Sports fields (individual sports fields) Tennis Courts Council Golf Courses

120,978 17 85km2 479km 0 4 171 13 (1 operated by Council) 1 13 2 1

168,614 32 510km2 635.1km 28.9km 5 184 16 (4 operated by Council) 3 32 1 2

289,592 49 596km2 1114.1km 28.9km 9 355 29 4 45 3 3

1 1 0 52 71 2

1 0 1 102 75 1

2 1 1 154 146 3

EXPENDITURE ON SERVICES As illustrated in the tables opposite Ku-ring-gai has expended more on total services per capita than Hornsby in both 2013/14 and 2014/15. 2013/14 Financial Statements for Ku-ring-gai and Hornsby Shire indicate that Ku-ring-gai and Hornsby have a 15% difference in total expenditure per capita on services.37

EXPENDITURE ON SERVICES (2013/14 FINANCIAL YEAR) Data

Ku-ring-gai

Hornsby

Combined

Total expenditure

$100,828,000

$122,544,000

$223,372,000

Total expenditure per capita

$847.10

$734.43

$781.34

Source: The table above is based on information publicly available in the Councils’ Annual Reports and Operational Plans.

2014/15 Financial Statements for Ku-ring-gai and Hornsby Shire indicate that Ku-ring-gai and Hornsby have a 28% difference in total expenditure per capita on services.38

EXPENDITURE ON SERVICES (2014/15 FINANCIAL YEAR) Data

Ku-ring-gai

Hornsby

Combined

Total expenditure

$110,734,000

$120,538,000

$231,272,000

Total expenditure per capita

$915.32

$714.88

$798.61

* Population: Ku-ring-gai 120,978; Hornsby 168,614 and combined 289,592 (ABS 2014 ERP). To understand variations in services provided by individual councils would require a detailed assessment of why a particular service is provided, differing methods of delivering services (in house, outsourced, collaborative), variety in the levels of service delivered (frequency, standard) and pricing. 38 To understand variations in services provided by individual councils would require a detailed assessment of why a particular service is provided, differing methods of delivering services (in house, outsourced, collaborative), variety in the levels of service delivered (frequency, standard) and pricing. 37

The combined operational expenditure per capita after eliminating Epping is $804.83 (assumed 20,000 population for Epping, & 12% reduction in expenditure). This is a reduction of $110.49 from current Ku-ring-gai (see table below).

IMPACTS OF A MERGER AND NEW ENTITY The NSW Government’s Merger Proposal39 provides examples of shared services, organisations and partnerships that provide community benefit which it believes is evidence of connections between the Councils and their communities. The Merger Proposal states that; “A new council will be better placed to deliver these services and projects into the future, without relying on voluntary collaboration with neighbouring areas” The fact is that there is a shared services model between Ku-ringgai Council and Hornsby Shire Council demonstrates the spirit of collaboration on specific issues which can be achieved without a forced merger. Federal and State Government Departments are planning, and

funding social support services at a broader geographical level (Northern Sydney Region) across a number of areas aged services, disability services, homelessness services, settlement services, family support services, mental health, information and assessment etc. Very few services, if any, will in the future be funded to provide services solely on the basis of a local government area. Funding for organisations will be provided to achieve very specific outcomes and with the demonstrated scale and capacity to deliver services consistently over a large geographic areas and regions. The consumer directed care model now favoured by both levels of government makes the client the budget holder with the responsibility to select the preferred supplier of services. This will be underpinned with introduction of competitive tendering process, including broadening the eligibility criteria to allow private sector involvement. The proposed Council merger will have minimal impact on shared services, improvements in delivery of services, voluntary agreements or community cohesion across areas. The examples of services provided in the Merger Proposal40 being Hornsby Ku-ring-gai Association for Mental Health and the Women’s Shelter

2014/15

OPERATIONAL EXPENDITURE ($)

A larger council is unlikely to focus and resource groups at a neighbourhood centre level, particularly as these initiatives may not exist in other areas and the competing priorities of providing for a larger area. ■■ A merger will also result in the following impacts on the Ku-ringgai community: ■■ Due to the difference in existing service levels between the council areas there would need to be an equalisation of services whereby they were increased or decreased to be the same in the both areas. ■■ As Ku-ring-gai Council has a higher revenue per capita than Hornsby Shire, with greater capacity to provide services, an equalisation of services would result in either a reduction of services for the former Ku-ring-gai area or increased rates to raise the Hornsby Shire service levels.

POPULATION

EXPENDITURE PER CAPITA ($)

Ku-ring-gai

110,734,000

120,978

915.32

120,538,000

168,614

714.88

Combined

231,272,000

289,592.00

798.61

14,295,807

20,000

714.79

Hornsby (excluding Epping)

106,242,193

148,614

714.89

Combined excluding Epping

216,976,193

269,592

804.83

Variance from Ku-ring-gai

What is at risk at “being lost” in a proposed merger are niche community based initiatives that have been supported and developed by Councils in response to local needs.

Hornsby Epping

which would continue to operate unaffected should the merger proposal between Hornsby and Kuring-gai not proceed.

NSW Government, Merger Proposal: Hornsby Shire Council (part) Ku-ring-gai Council, p 15 January 2016. NSW Government, Merger Proposal: Hornsby Shire Council (part) Ku-ring-gai Council, p 15 January 2016.

110.49

MERGER PROPOSAL SUBMISSION

COMBINED OPERATIONAL EXPENDITURE – NEW ENTITY

KU-RING-GAI COUNCIL

PART 2: ASSESSMENT OF LEGISLATIVE FACTORS - SECTION 263(3) OF LOCAL GOVERNMENT ACT, 1993

07 Impact on employment of staff

263 (3) (e2) the impact of any relevant proposal on the employment of the staff by the councils of the areas concerned.

SUMMARY

OVERVIEW OF STAFFING

The Merger Proposal will have a number of serious impacts on the workforce employed by Ku-ring-gai Council. Key impacts include:

Ku-ring-gai Council has a permanent workforce of 420 equivalent full time (EFT) staff. Council manages its staff and service delivery by a combination of permanent, casual, short and long term contract and agency hire arrangements or full outsourcing.

■■ A substantial disruption to service provision and productivity during the transition period and thereafter while the new entity is established and a new organisational structure is created and implemented; ■■ Negative impacts on organisational culture and potential industrial unrest pending the equalisation of salary systems and conditions of employment. During this time staff occupying essentially the same positions would be receiving different salaries and conditions; ■■ Loss of highly skilled and experienced key staff due to voluntary redundancies and increased staff turnover resulting in a significant impact on the organisation’s corporate knowledge and level of expertise. As a result there will potentially be declines in service efficiency and effectiveness and increased costs in training and skill replacement; ■■ Challenges associated with staff attraction and retention to the new entity due to the actual and perceived instability of the organisation and councils in general; ■■ Additional transition costs associated with job redesign, change management, standardisation of policies, processes and procedures, salary system review, branding and accommodation.

According to the most recent Comparative Performance Data published by the Office of Local Government41 (for the 2013/14

LABOUR COST AS A % OF TOTAL OPERATING BUDGET

POPULATION

EFT

NUMBER OF RESIDENTS PER STAFF MEMBER

Ku-ring-gai

119,027

420

283

35%

Hornsby

166,855

550

303

39%

Willoughby

73,155

406

180

41%

Ryde

112,545

440

256

42%

Warringah

152,636

635

240

41%

Pittwater

62,070

314

197

39%

Table: Equivalent Full Time (EFT) Comparison

The following sections detail the impacts a merger would have on the workforce employed by Ku-ring-gai Council.

LOSS OF COUNCIL’S COORDINATED FOCUS ON STRATEGY AND DELIVERY Over a number of years, Ku-ring-gai Council has developed an organisational structure that utilises highly innovative corporate practices to

year), in comparison with neighbouring Councils Ku-ring-gai has the second least number of staff compared with it’s population. At Ku-ring-gai there is one staff member per 283 people, compared with the average of one staff member per 243 people. Ku-ring-gai also has the lowest employee labour cost as a percentage of total operating budget (35%) as shown in the table below.

respond to the long term strategic planning needs of a modern local authority. The main features of this organisational structure are the separation between statutory and strategic land use planning and broader policy development and operational functions. The Division of Local Government in their 2010 Promoting Better Practice Program Review observed that the splitting of

NSW Office of Local Government, 2013-2014 Time Series Data [accessed 25 February 2016] www.olg.nsw.gov.au/sites/default/files/Time%20Series%20Data.xlsx

Other identified benefits included: ■■ efficiencies in asset planning and management; ■■ a high level of respect between staff of different directorates; and ■■ the work of different directorates being used to inform the work of others.

LOSS OF SPECIALISED SKILLS Because of its size, the diversity and technical interest of its projects reputation and its results driven culture Ku-ring-gai is able to recruit and retain a variety of high calibre professionals across a broad range of skill areas. As well as a full range of traditional local government roles, Council has on its staff professionals with the following skills: ■■ Strategic asset management ■■ Natural hazard planning and management ■■ Climate change ■■ Statutory and corporate property management ■■ Geographic information systems ■■ Landscape architecture ■■ Urban design and architecture ■■ Biodiversity and ecology ■■ Environmental engineering ■■ Traffic engineering ■■ Bushfire management ■■ Sustainable building and design ■■ Strategic traffic and transport planning ■■ Cultural heritage planning Council staff have provided expertise on climate change adaptation planning to the Governments of China, Korea and France, the United Nations Economic and Social Development Program for the 42 43

Asia Pacific region and acted as expert advisers on panels for the National Climate Change Adaptation Research Facility, Local Government NSW, NSW Office of Environment and Heritage and the Sydney Coastal Councils Group. There are many specialist roles embedded throughout the organisation in a variety of operational and professional positions. These staff provide cost effective expertise to deal with the complexity of State and Federal government planning requirements. They enable Council to provide quality planning responses and develop project plans and designs consistent with the community’s objectives for the area.

DISRUPTION TO STAFF TRAINING PROGRAMS Ku-ring-gai Council has a dedicated learning & development function which proactively drives and manages workforce professional development. An annual training budget is allocated which supports the organisational training program, together with individual staff training plans which are systematically monitored and reviewed as part of our electronic performance

management system ‘PERFORM’. This system ensures our strategic focus on driving a high performance culture and rewarding top performers. We have the capacity to independently roll out in-house operational/compliance based training and source external professional development opportunities in order to ensure our workforce is appropriately skilled and developed on an ongoing basis. Council is in the process of implementing a comprehensive program that will deliver a wide range of online and blended e-learning solutions to address increasingly complex requirements. This, in combination with a robust talent management program, will ensure we continue to be well positioned as an employer of choice in an increasingly competitive market place. We recently participated in the NSW Local Government operational and management effectiveness survey42 during 2013/2014 together with 78 NSW Councils. The outcome of this survey supports our strong investment in workforce learning and development in comparison with other Councils.

METRIC

KU-RING-GAI SURVEY POPULATION

Management Development training budget

Yes

No - 55% of Councils (Sample of 57)

Percentage of staff who participated in formal 100% management development training – Directors

62% (Sample of 75)

Percentage of staff who participated in formal management development training – Managers

64% (Sample of 75)

91%

The results of the 2015 Local Government NSW HR Metrics benchmarking report43 (Urban Councils comparison) further demonstrate this.

METRIC

KU-RING-GAI SURVEY POPULATION

Learning and Development investment as a percentage of labour costs

1.8% (93rd percentile)

Median 1.0% (Sample of =45)

Learning and Development investment per staff member

$1554 (94th percentile)

Median $778 (Sample of = 48)

Learning and Development investment per FTE staff member

$1653 (91st percentile)

Median $841(Sample of =48)

PricewaterhouseCoopers and Local Government Professionals Australia NSW, NSW Local Government Operational and Management Effectiveness Report – FY14, p 39, April 2015. Local Government NSW, HR Metrics Benchmarking Report (Urban Councils comparison), February 2015.

MERGER PROPOSAL SUBMISSION

responsibilities for long-term planning for all Council’s services, activities and facilities (Strategy) and the delivery and maintenance of assets (Operations) was working effectively and the delineated roles allowed the delivery and maintenance of assets to focus on efficient service provision.

KU-RING-GAI COUNCIL 52

DISRUPTION TO ATTRACTION AND RETENTION OF PROFESSIONALS FOR LEADERSHIP AND SPECIALIST ROLES Ku-ring-gai Council is currently able to attract and retain a wide range of professionals in leadership and specialist roles across the board. In the 2014/15 financial year, 47% of staff had tenure of between one and five years and 49% of staff had tenure of six to more than twenty years of service. Council’s Employee Opinion survey 2014 revealed that 62% of respondents intend to stay with Ku-ring-gai for a period of between 1 and 10 years. The following data (see table below) from the NSW Local Government Operational and Management Effectiveness Report44 for the 2013/14 financial year supports our capacity in this regard. Remuneration and benefits together with organisational culture must be well balanced in order to attract the right candidates for advertised vacancies. To this end, Council participates in and subscribes to a number of remuneration surveys in order to keep abreast of remuneration trends in the employment market. In addition to this, there are a number of cultural change programs in place focusing on the development of our corporate values, leadership development and reward and recognition which will positively influence the organisational culture once implemented. In line with our commitment to continuous improvement, the leadership team has recently completed the Local Government Management Colloquium program through the Australian School of Applied Management. The intent of the program is to stimulate strategic and lateral thinking among our leaders and encourage them to promote the same qualities in their staff. An organisation wide Leadership Development program is now being rolled out linked directly to the Colloquium program which will extend to staff at all levels of

the organisation. The program includes a mix of formal leadership, management, and individual training elements and will include a range of in-house workshops delivered by the leadership team. A merger will have a direct negative impact on this investment in innovative leadership development in the organisation by the scaling back or discontinuance of the program and loss of key staff who have completed the program. The strength and capacity developed within the senior and middle management leadership team will be lost. Remuneration and benefits together with organisational culture must be well balanced in order to attract the right candidates for advertised vacancies. To this end, Council participates in and subscribes to a number of remuneration surveys in order to keep abreast of remuneration trends in the employment market. In addition to this, there are a number of cultural change programs in place focusing on the development of our corporate values, leadership development and reward and recognition which will positively influence the organisational culture once implemented.

In line with our commitment to continuous improvement, the leadership team has recently completed the Local Government Management Colloquium program through the Australian School of Applied Management. The intent of the program is to stimulate strategic and lateral thinking among our leaders and encourage them to promote the same qualities in their staff. An organisation wide Leadership Development program is now being rolled out linked directly to the Colloquium program which will extend to staff at all levels of the organisation. The program includes a mix of formal leadership, management, and individual training elements and will include a range of in-house workshops delivered by the leadership team. A merger will have a direct negative impact on this investment in innovative leadership development in the organisation by the scaling back or discontinuance of the program and loss of key staff who have completed the program. The strength and capacity developed within the senior and middle management leadership team will be lost.

METRIC

KU-RING-GAI COUNCIL

SURVEY POPULATION

Turnover in senior management positions

11% (Sample of 76)

Percentage of positions filled internally filled – Manager

50%

31% (Sample of 76)

Percentage of positions filled internally– Supervisor

83%

61% (Sample of 76)

Percentage of positions filled externally– other staff (non-supervisory)

68%

61% (Sample of 76)

PricewaterhouseCoopers and Local Government Professionals Australia NSW, NSW Local Government Operational and Management Effectiveness Report – FY14, April 2015.

MERGER PROPOSAL SUBMISSION

ASSESSMENT OF LEGISLATIVE FACTORS - SECTION 263(3) OF LOCAL GOVERNMENT ACT, 1993

08 Impact on rural communities

263 (3) (e3) the impact of any relevant proposal on rural communities in the areas concerned.

SUMMARY The existing rural and remote areas of Hornsby Shire will be negatively affected by the merger proposal due to the more than doubling of the population in densely populated urban areas to the south. Key impacts include: ■■ further reinforcement of the mismatch between populated and less populated areas that exist in the Hornsby Shire Council area ■■ creation of much higher expectations and priorities for services and facilities in the denser urban areas with stronger advocacy capacity - and corresponding reduced service priorities for less populated areas ■■ potential conflicts between the competing needs and interests of the different areas, particularly with assessed limitations on the financial resources available to a merged council.

Hornsby Shire includes significant areas used for rural activities, remote villages and river settlements with dispersed and very low density populations. In contrast, Hornsby’s densely populated urban areas are concentrated in the southern sections of the Shire. The location of rural and remote communities within Hornsby Shire is shown on the Communities of Interest map on page 31 of this submission. A merger of Hornsby and Ku-ringgai will create a new area with a southern urban population of well over 200,000 people. This is more than double the current size of Hornsby Shire’s urban population.

Existing western rural and remote northern areas will remain the same. The mismatch and distance between these different communities of Hornsby Shire pose significant challenges for dealing with competing interests and priorities, the equitable provision of facilities, services and programs that meet the needs of all residents, and engaging and communicating with residents of those areas to ensure their interests and concerns are fairly represented. This change will severely skew the balance of priorities in the new entity with resulting unresolvable conflicts between the competing needs and interests of the different areas.

KU-RING-GAI COUNCIL

PART 2: ASSESSMENT OF LEGISLATIVE FACTORS - SECTION 263(3) OF LOCAL GOVERNMENT ACT, 1993

09 Case for wards

263 (3) (e4) in the case of a proposal for the amalgamation of two or more areas, the desirability (or otherwise) of dividing the resulting area or areas into wards.

SUMMARY Ku-ring-gai Council strongly supports the ward structure on the basis that: ■■ it assists increased accountability for councillors; ■■ it assists identifiable local representation; and ■■ it assists councillors specialist knowledge of a geographical area.

IMPACT OF THE MERGER PROPOSAL ON THE KU-RING-GAI COMMUNITY Ku-ring-gai Council currently has five wards, each with two Councillors, with the Mayor elected by the 10 Councillors. Any configuration in a merged Council would severely affect community representation for the former Ku-ring-gai. This will be a major impact on the Ku-ring-gai community where residents have high expectations of their Councillors, in both accessibility and reflective decision making.

KU-RING-GAI COUNCIL’S RESPONSE While it is strongly noted that Ku-ring-gai Council and the Ku-ringgai community DO NOT SUPPORT a merger, if Ku-ring-gai Council was merged with Hornsby, Council strongly supports representing the interests of Ku-ring-gai residents and therefore requests the maximum of 15 Councillors representation, as recommended by IPART for a Council the size of the proposed merger.

156,842 HORNSBY COUNCIL

In addition Council requests the following ward configurations to be

considered if a merger proceeds: ■■ 5 wards of 3 Councillors: this structure would represent approximately 54,000 people per ward and the Mayor would be elected from within the Council. ■■ 7 wards of 2 Councillors and a popularly elected Mayor: this structure would represent approximately 38,500 people per ward. ■■ 2 wards of 7 Councillors and a popularly elected Mayor: this structure would represent approximately 135,000 people per ward.

HORNSBY SHIRE COUNCIL’S PROPOSAL Hornsby Council supports a ward structure of four wards each with three Councillors, in addition to a popularly elected Mayor. This would give a total of thirteen councillor representatives for the merger proposal. Hornsby’s proposal effectively decreases the fifteen councillor representation recommended by IPART by two Councillors. This proposal is not supported by Ku-ring-gai Council.

WAHROONGA WARD

25,328

ST IVES WARD

23,913

109,297

GORDON WARD

KU-RING-GAI COUNCIL WARD A

18,417

53,407 WARD B

52,851 COMMENARRA WARD WARD C

50,311 The population figures in the following map for Hornsby Shire local government area include Epping with an estimated population of approx 20,000.

20,391

ROSEVILLE WARD

21,095

MERGER PROPOSAL SUBMISSION

ASSESSMENT OF LEGISLATIVE FACTORS - SECTION 263(3) OF LOCAL GOVERNMENT ACT, 1993

10 Opinions of diverse communities

263 (3) (e5) in the case of a proposal for the amalgamation of two or more areas, the need to ensure that the opinions of each of the diverse communities of the resulting area or areas are effectively represented.

SUMMARY Geography, population and its distribution are critical factors in connecting people together, creating a natural sense of community and communities of interest. Maintaining local identity, local engagement and respect for local history, heritage, values, needs and aspirations should be important considerations in any merger proposal. Creating social and functional cohesion in a diverse community that is geographically increased by six times and more than doubled in population will be a major challenge. There is no evidence that such a change has been successfully achieved in Australia. The implications for engagement of these communities to ensure their opinions are represented are significant.

The focus, affinity and connection to a sense of place for residents and associated community groups are within their immediate surroundings. The differences in communities of interest between Hornsby and Ku-ring-gai would be a major challenge in engaging and reaching these communities.

GEOGRAPHIC ISOLATION AND INACCESSIBILITY In a merged Ku-ring-gai and Hornsby Council the geographic isolation of certain communities would not be easily overcome, due to the sheer size of the merged council (well over 500km2) and the relative inaccessibility of communities in the western and northern sectors as well as along the Hawkesbury River.

VASTLY DIFFERENT ISSUES AND CONCERNS In addition to the geographic isolation, the concerns and issues of differing communities would not be easily addressed by the merged area. For example, some of the main concerns of residents living in Gordon are traffic congestion, on-street parking and development. For residents living in Cowan Creek, the main concerns are likely to be access to paved roads, lack of public transport, no nearby shopping centre and access to basic services.

COMPETING BUDGET PRIORITIES How would budget priorities be decided in areas where the infrastructure needs are greatest but the residents are fewest? What is the cost benefit analysis of providing infrastructure for the remotest areas of the merged entity and how would those costs be prioritised? The aggregation of services from disjointed urban and remote areas with varying

economic characteristics, service levels and delivery methods is unlikely to produce the anticipated cost savings and better service outcomes, as stated in the government’s Merger Proposal.

ACCESS TO INFORMATION AND COUNCILLORS Access to information and Councillors would be vital in the merged area. Issues that would need to be addressed and their associated costs include: ■■ How the customer service interface is managed in remote areas, given the relative scarcity of broadband or wi-fi and the high cost of providing customer service centres in those outlying areas. ■■ How information is disseminated from the merged entity to residents living in an area of over 500 square kilometres. This may include an increase in advertising through various publications; kiosks in remote areas; webcasts of Council meetings; Council meetings held in remote areas. ■■ How community engagement and consultation is managed in the proposed merged area. Ku-ringgai Council has a strong record of consultation and engagement with residents on a wide variety of issues and projects and has a community engagement officer dedicated to this role. Ku-ring-gai Council also engages its local business community through a program of free networking events, training programs and collaborative partnerships with organisations representing business interests. Based on publically available information Hornsby Council does not appear to provide this level of community engagement and consultation across a broad range

KU-RING-GAI COUNCIL 56

of service areas. For example, Hornsby Council’s research into the community’s attitude towards a merger was much more limited than Ku-ring-gai’s. In addition Hornsby Council’s recent Annual Reports include fewer instances of engagement and consultation activities. ■■ How community groups across the merged entity are supported and funded and what the mechanism would be for allocating such funding and support. In the case of community groups, they service their local population and membership is drawn from the local area. They access neighbourhood facilities, meet and hold their activities locally.

RESOURCES REQUIRED FOR OVERSEAS BORN RESIDENTS In a merged Ku-ring-gai and Hornsby Council there will be increasing numbers of overseas born residents, particularly from non-English speaking countries, as well as residents who speak English not well or not at all. Resources and strategies would need to be put in place to communicate and engage with existing residents and recent arrivals from non-English speaking countries to overcome language barriers and promote participation and representation.

IMPACT ON THE KU-RING-GAI COMMUNITY A merger, with the addition of a local government area six times bigger than Ku-ring-gai and reduced councillor representation has the potential to significantly reduce the voice of the Ku-ring-gai community on strategic planning issues, with direct impacts on the Ku-ring-gai area.

IMPLICATIONS FOR THE PROPOSED MERGED AREA A merger of Hornsby and Ku-ringgai, with significantly different communities, will create a major challenge in engaging and reaching all residents.

MERGER PROPOSAL SUBMISSION

ASSESSMENT OF LEGISLATIVE FACTORS - SECTION 263(3) OF LOCAL GOVERNMENT ACT, 1993

11 Other relevant factors

263 (3) (f) such other factors as it considers relevant to the provision of efficient and effective local government in the existing and proposed new areas.

SUMMARY In this section our response discusses the implications for the provision of efficient and effective local government for Ku-ring-gai and a merged council. To avoid repetition and for ease of reference, points previously discussed in earlier parts of our submission are noted. The following other factors are submitted for consideration as they affect many of the stated benefits contained in the NSW Government’s various reform documents supporting merger proposals. ■■ Scale and strategic capacity. ■■ Impact of boundary adjustment (Epping). ■■ Regional and local planning. ■■ Design quality of Ku-ring-gai’s buildings and urban areas. ■■ Accommodation of future population growth. ■■ Ku-ring-gai’s changed strategic role from ‘middle ring’ to ‘fringe’ council. ■■ Role of Hornsby Town Centre as a Strategic Centre. ■■ Accessibility – distance and difficulties with traffic and congestion. ■■ Integrated Planning and Reporting.

SCALE AND STRATEGIC CAPACITY – KU-RING-GAI As previously stated, the issue of scale being measured by population alone does not equate to councils having strategic capacity.

■■ streamlining regulations and planning policies between councils

Interestingly, in the NSW Government’s Local Government Reform – Merger impacts and analysis document a cited case study of the mergers of five local councils in northern inland NSW to form Tamworth Regional Council45 in 2000 states that;

However, the merged Tamworth Regional Council which is stated by the NSW Government to have strategic capacity also suffers from sizable operating deficits46 and was ranked 150th in terms of operating surpluses out of all NSW councils in 2014/201547 .

“The merger resulted in a council entity with improved strategic capacity and the transformation of the region as a whole in terms of employment, economic contribution, community and social outcomes. Key outcomes and benefits attributable to the merger include:

In comparison Hornsby Shire and Ku-ring-gai councils were ranked 3rd and 6th respectively.

■■ service and infrastructure improvements funded by a more robust revenue base; ■■ investment in regional infrastructure previously not possible;

■■ increased capacity to be an effective political advocate; ■■ a stronger and more equitable rating system; ■■ greater capacity to stimulate NSW Government, Local Government Reform – Merger impacts and analysis, p 8 December 2015. LG Solutions, Analyser: Published Financial Statements, 2014/15. 47 LG Solutions, Analyser: Published Financial Statements, 2014/15. 46

■■ a significant increase in staff employment opportunities and career development. The merged council has the financial capacity and recruitment capability to attract highly skilled and experienced professionals;

If achieving reform outcomes is reliant on having adequate scale and capacity or strategic capacity, Ku-ring-gai Council’s detailed submission to IPART provided numerous examples of our effectiveness and evidence of our resources (financial, assets and human) to provide leadership on local and regional planning and to advocate on behalf of our community.

■■ increased capacity to take on more large scale projects;

and promote growth of the local economy;

■■ improved regional decision making and regional strategic infrastructure planning; and

Although IPART deemed both Ku-ring-gai and Hornsby Shire Council as not fit based only on scale and capacity, the NSW Government has its own views on what constitutes a ‘Fit for the Future’ Council by recently excluding Liverpool and Fairfield councils from being forcibly merged despite previous recommendations from ILGRP and IPART. In particular IPART found that; “Fairfield and Liverpool are not fit for the future as they do not meet the scale and capacity criterion. The councils did not demonstrate their proposals to stand alone are as good as or better than a merger.”

KU-RING-GAI COUNCIL 58

This further echoes the inconsistencies and weaknesses in the NSW Government’s stated reform rationale. Ku-ring-gai Council is a successful, innovative and financially sound Council that is already large by national and international standards. Our proposal to remain as a stand alone Council is at least as good as or better than the amalgamation option with Hornsby Shire Council.

IMPACT OF BOUNDARY ADJUSTMENT (EPPING) The NSW Government’s assessment of merger benefits for Ku-ring-gai and Hornsby Shire Councils failed to take into account the true impact of the transfer of part of Epping and Carlingford south of the M2 Motorway to Parramatta Council. As stated earlier in this submission, KPMG did not contact either Ku-ringgai or Hornsby Council to obtain data or clarify any aspect of the proposed merger. Unfortunately one of the more significant consequences of this approach is that KPMG have mistakenly assumed that revenue and expenses would both be reduced on a per capita basis (as stated on page 8 of the document “KPMG Outline of Financial Assumptions for Local Government Merger Proposals – Technical Paper”). Hornsby Council, in its Report GM2/16 to the General Meeting of Council on 10 February 2016, identified that significantly more income is derived from the area proposed to be excised than is spent in that area. While some $9.4 million pa is derived from rates and other income from the excised area, only $3.0 million pa is spent in that area. There would be a resulting net financial detriment of $6.4 million pa to the merged Ku-ring-gai/ Hornsby Council. Over 20 years the present value equates to $72.3 million.

REGIONAL AND LOCAL PLANNING The NSW Government’s Merger Proposal48 notes the similarities in housing type and mix between Hornsby and Ku-ring-gai: “The physical makeup of the two council areas is significant with 75% of the population of Hornsby Council and 77% of Ku-ring-gai Council living in detached suburban housing.” Ku-ring-gai Council has attracted criticism over many years about its resistance to housing diversity, yet despite this the Ku-ring-gai area accommodates almost the same proportion of its population in medium and high density housing as in the Hornsby area. It should also be noted that these figures are significantly dated, having been extracted from the Australian Bureau of Statistics, Census (2011), Dwelling Structure by local government area. It is fair to say that the pathway to urban consolidation in the Ku-ring-gai area has not been an easy process, with the appointment of a State appointed Planning Panel in 2008 to review Council’s planning documents. This process was intensely unsuccessful, largely due to the significant changes made to the statutory documents post exhibition by the then Department of Planning. The Ku-ring-gai community subsequently challenged the validity of the Planning Panel’s LEP, and this challenge was upheld by the Land & Environment Court. Council then engaged with the community and undertook in a comprehensive planning process to prepare its Local Centres LEP. This process, combined with a broader review of Council’s other environmental planning instruments, provided similar yields to that proposed by the Planning Panel’s LEP without the animosity created by the earlier process. It also met the mandated metropolitan planning targets of the time.

NSW Government, Merger Proposal: Hornsby Shire Council (part) Ku-ring-gai Council, p 14, January 2016. 49 2013 AILA NSW Excellence in Landscape Architecture (Research and Communication category) for “Thinking Outside the Box: Key Design Elements for Apartments in Ku-ring-gai”. 50 Planning Institute Australian (NSW Divisions) 2012 Planning Excellence Awards - Commendation for Public Engagement and Community planning category for Community Consultation to inform preparation of Ku-ring-gai local centres LEP. 51 Planning Institute Australian (NSW Divisions) 2014 Planning Excellence Awards - Commendation for 48

At an aggregated level the dwelling mix in Hornsby and Ku-ring-gai appears relatively similar. However upon inspection of the finished built form nothing could be further from the truth. Through well formulated planning controls and guidelines, Ku-ring-gai has managed to keep the bulk of its high density development at 5-6 storeys, effectively placing it under the tree canopy. Higher buildings of 7-12 storeys are planned for within the town centres. Hornsby on the other hand has opted for considerably higher buildings, and even when adopting a 5 storey format, there are considerably less setbacks and higher built form site coverage. Ku-ring-gai has received numerous awards for the quality of its planning guidelines and controls49, and recognition for the comprehensive nature of its community engagement processes.50 Under the Ku-ring-gai Open Space Acquisition Strategy land has been acquired for new parks and town squares which are developed at the same time as medium density development is occurring. The Open Space Acquisition program is fully funded through development contributions (Section 94 Funds) and since 2007 Ku-ring-gai has spent $62.2 million on acquiring 33,539 square metres of land. This program has been recognised by a number of professional bodies for its foresight, comprehensive nature and positive outcomes for the community.51 Furthermore, the NSW Government’s Merger Proposal offers examples of local infrastructure priorities that could be funded by merger generated savings and includes in part: ■■ the revitalisation of Lindfield, Turramurra and Gordon town centres to transform them into cultural and civic hubs together with the opportunity to incorporate activities for teenagers, senior citizens and more commuter car

Ku-ring-gai Open Space Acquisition Strategy. 2014 Parks and Leisure Australia Awards NSW Open Space Planning (Strategic Planning for Open Space) Open Space Acquisition Strategy. 2014 Parks and Leisure Australia Awards NSW Open Space Development (Design and Management) Award for Greengate Park. 2013 AILA NSW Excellence in Landscape Architecture (Planning Category) for Ku-ring-gai Open Space Acquisition programme

■■ investment in wastewater infrastructure to ensure clean waterways and safe food, for oyster farmers and others that rely on the natural environment. In fact the reality is that Ku-ringgai Council through is consultative planning processes, adopted strategies and comprehensive Development Contributions Plan is delivering all of the above outcomes for our community. The risks associated by the Merger Proposal to these programs and major projects are discussed in detail under the section Impact on service delivery and facilities along with a number of case studies contained in the Appendices.

DESIGN QUALITY OF KU-RING-GAI’S BUILDINGS AND URBAN AREAS Ku-ring-gai’s unique planning controls provide a framework by which local land use planning can be undertaken. As a result, development outcomes are achieved in an integrated and strategic manner with a focus on preserving the high quality residential environment characterised by a distinctive treed and landscaped setting. These controls address planning issues concerning sustainability, physical and social Infrastructure, natural and built environment, heritage, housing and employment. They provide superior environmental protection through the introduction of new environmental zones, as well as links to local biodiversity areas and riparian lands.

and highly valued by our community. This ensures new development is consistent with the local character; retains valuable existing elements and respects its surroundings. The high standard of development in the Ku-ring-gai area has been recognised through several design awards and commendations by the Australian Institute of Architects (AIA) and the Urban Development Institute of Australia (UDIA). Images of developments in the area also feature prominently in the NSW Government Apartment Design Guide, which is the design and assessment manual for residential flat buildings in NSW. Ku-ring-gai Council’s highly skilled assessment staff ensure that built outcomes are of an exemplary standard and this to a degree is reflected in higher property values in the area.

KU-RING-GAI’S CHANGED STRATEGIC ROLE FROM ‘MIDDLE RING’ TO ‘FRINGE’ COUNCIL Ku-ring-gai is an established urban, middle-ring local government area, 85km2 in size, located around 10kms from the centre of Sydney CBD and classified as a Category 3 – Large Metropolitan council by the Office of Local Government (OLG). In contrast Hornsby Shire is an outer mixed rural/residential Sydney local government area, 510km2 52 in size, located on the outer edge of the Sydney Metropolitan Area. Hornsby is classified Category 7 – Metropolitan Fringe council by the OLG. Recently the NSW Government grouped the proposed merger of councils as: ■■ Inner Sydney

ACCOMMODATION OF FUTURE POPULATION GROWTH

■■ Outer Sydney; and

There is a potential risk that future development growth for the combined areas of Ku-ring-gai and Hornsby Shire would be concentrated in the southern part of the merged council area, being the former Ku-ring-gai area.

For Ku-ring-gai and Hornsby Shire Councils in a new merged entity, this would be classed as an Outer Sydney proposal. The new area would then be aligned with Gosford and Wyong Council and the Hills Shire and Hawkesbury Council proposed mergers.

A larger merged council would have a common combined dwelling target, along with the potential loss of local identity which is preserved through our unique local planning controls. Decisions about future development would be made by the merged council, with minority representation from councillors elected from the former Ku-ring-gai area

■■ Regional

To summarise, there is no understanding of what this Outer Sydney ranking will mean for the residents of the former Ku-ring-gai area.

A significant feature is the heritage conservation areas and heritage items integral to the overall character of the Ku-ring-gai area

52 Hornsby local government area is 510km2, not 462km2 as stated in the IPART report and Merger Proposal. Refer to DESCRIPTION OF LOCAL GOVERNMENT BOUNDARY FOR HORNSBY SHIRE COUNCIL on Hornsby Council’s website. It is assumed that the incorrect areas have excluded half width of the Hawkesbury River as well as Milsons Island and the residential Dangar Island. These are important omissions as Hornsby Shire Council is the responsible authority for the islands as well as numerous foreshore infrastructure along its 150+km frontage to The Hawkesbury River.

MERGER PROPOSAL SUBMISSION

parking in any redevelopments; ■■ environmental protection, including improving the quality and health of waterways, catchments, parks and open space areas; and

KU-RING-GAI COUNCIL 60

ROLE OF HORNSBY TOWN CENTRE AS A STRATEGIC CENTRE The Merger Proposal incorrectly states that the existing Hornsby Town Centre, designated as a Strategic Centre under the NSW Government’s ‘A Plan for Growing Sydney’, will become the natural major commercial centre for the merged area. There are a number of constraints to Hornsby Town Centre’s future development as a Strategic Centre in Northern Sydney. They include: ■■ The number of larger established and competing Strategic Centres which are more attractive in terms of the range of services they provide and more accessible to most residents in the southern urban areas of Hornsby and Ku-ring-gai. See Strategic Centres

map for the location of competing centres. ■■ The need to increase office floor space suitable for higher order commercial office activities on the limited west side of the railway line, given that further commercial activity on the eastern side of the railway is compromised by residential development. ■■ Identified issues related to maintaining a commercial core in the Centre given competing residential high rise, fragmented road and subdivision pattern and poor connections with major roads and the rail line separating the centre. The NSW government recognises these issues in its Plan for a Growing Sydney.53

NSW Planning and Environment, a plan for growing Sydney, December 2014.

Impact on Ku-ring-gai and a merged area Previous sections under ‘Communities of Interest’ in this submission demonstrate the constraints to Hornsby Centre fulfilling the role of a major commercial centre for the proposed merged area.

Lower Mangrove

Strategic Centres

Glenworth Valley Calga

Leets Vale Lower Portland

MERGER PROPOSAL SUBMISSION

Wisemans Ferry

Laughtondale Spencer

Mount White Kariong

Wendoree Park Maroota

Cumberland Reach

Mooney Mooney Creek

Marlow

Singletons Mill

Sackville North Sackville

Bar Point

Canoelands

Wondabyne

Cheero Point Milsons Passage

South Maroota Ebenezer

Forest Glen

Cattai

Western Rural and River Settlements

Mooney Mooney Dangar Island Little Wobby

Berowra Creek

Patonga

Fiddletown Cowan Glenorie Brooklyn

Northern Villages and River Berowra Heights Settlements

Maraylya Scheyville Arcadia

Berrilee

Cottage Point

Oakville Berowra

Morning Bay

Middle Dural Box Hill

Kenthurst

Nelson

Hornsby Heights

Annangrove

Mount Colah

ROUSE HILL

Duffys Forest

Rouse Hill

Dural

HORNSBY Kellyville

Schofields

Parklea

Southern Cherrybrook Urban Thornleigh Castle Hill (Hornsby) CASTLE 1 Norwest

Glenwood Bella Vista Private

G !!

Kings Park NORWEST Marayong Kings Langley Woodcroft

11 Hospital

HILL

Pennant Hills

West Pennant Hills

Baulkham Hills

Seven Hills

9 Hornsby

Ku-Ring-Gai Hospital

G !

North Rocks

Winston Hills

Carlingford

Epping

Ingleside

G ! !

East Killara

G !

Dalcross Killara2 Adventist Hospital

Marsfield Macquarie Park

MACQUARIE Eastwood CENTRE

Northern Oxford Falls Cromer Beaches Hospital (under construction)

G ! !

Frenchs Forest 8

Gordon

West Pymble

Belrose

Davidson

Pymble

North Epping

Macquarie University Hospital

St Ives

Ku-ring-gai

South Turramurra

Beecroft

Terrey Hills

St Ives Chase

Wahroonga Warrawee Turramurra

Sydney Adventist Hospital

Lalor Park Blacktown

North Turramurra

North Wahroonga

Waitara

Westleigh

Stanhope Gardens

Asquith

!! G

Hornsby

Glenhaven

The Ponds

Quakers Hill

Elvina Bay

Ku-Ring-Gai Chase

Mount Kuring-Gai

Galston

Lindfield

Beacon Hill

ForestvilleNORTHERN

East Lindfield

BEACHES Brookvale HOSPITAL PRECINCT Allambie Heights

Killarney Heights

Chatswood

Roseville Private

North Manly Manly Vale

Castle Cove Northmead CHATSWOOD Hospital Toongabbie Seaforth Middle Cove Dundas Valley Constitution Hill North Parramatta Balgowlah Denistone East Chatswood North Ryde Middle Harbour 7 Westmead Children’s Huntingwood Denistone Girraween Castlecrag 10 Dundas Hospital Pendle Hill Royal North Lane Cove North Willoughby PARRAMATTA West Ryde Balgowlah Heights Westmead North Shore Ryde ShoreNorthbridge Artarmon Lane Cove West Rydalmere Prospect Parramatta Private Hospital Naremburn Lane Cove Hospital 4 Camellia South Wentworthville ST LEONARDS Harris Park Riverview 3 Cammeray Greystanes Rosehill Mater Wentworth Point Putney Mosman Greenwich Holroyd Hospitals Tennyson Point Hunters Hill 5 North Sydney Silverwater Granville Merrylands North Sydney Huntleys Cove Sydney Olympic Park Woolwich Woodpark NORTH Cremorne Point Wetherill Park Concord West Cabarita Kirribilli SYDNEY Smithfield Guildford West CBD Birchgrove Drummoyne Auburn SYDNEY Vaucluse Guildford Concord Balmain Russell Lea Barangaroo Bossley Park Yennora Lidcombe Homebush Rozelle Five Dock Point Piper Strategic Centres Sydney Fairfield West Fairfield Lilyfield Darling Point Rose Bay Berala Rookwood Greenfield Park Glebe Darlinghurst Haberfield Strathfield Chester Hill Croydon Bellevue Hill Haymarket Leichhardt Canley Heights Regents Park Villawood Canley Vale Woollahra Sefton Camperdown Ashfield Bondi Beach Enfield Chullora Birrong Summer Hill 7 Stanmore3.5 0 Redfern Bondi Junction 7 Km Bonnyrigg Lansdowne Croydon Park Cabramatta Centennial Park Bass Hill Enmore Waterloo Lansvale Arndell Park

Legend

G !

! (

G !

! (

!! G

G! ! G ! G ! !

( ! (

KU-RING-GAI COUNCIL 62

ACCESSIBILITY – DISTANCE AND DIFFICULTIES WITH TRAFFIC AND CONGESTION Discussion under the preceding section ‘Communities of Interest’ and ‘Elected Representation’ has highlighted a number of accessibility issues with potential impacts on the Ku-ring-gai community and a merged area. These include:

Lower Blue Mountains, Kurrajong Village on the Bells Line of Road, Gosford on the Central Coast and Stanwell Park south of Sydney. Due to Hornsby’s geographic constraints and road network, much longer road trips would be required to move around the merged area for staff and councillors when compared with Ku-ring-gai.

■■ Distance The distance to travel by road around a merged area will increase significantly. It is a 65 kilometre trip by road from Roseville to Wiseman’s Ferry. This is the same distance required to travel to Glenbrook in the

that these same services will be available within the Ku-ring-gai area following a merger, with residents potentially required to travel much longer distances to access them. This is particularly relevant to the very large number of older residents, many of whom are restricted in their ability to independently travel outside the Ku-ring-gai Council area.

■■ Accessibility to services Ku-ring-gai residents currently have the benefits of accessible services and facilities. There is no guarantee

Comparative Distances

Colo Heights

Central Mangrove

Upper Mangrove

Wrights Creek

Webbs Creek

Ourimbah

Mangrove Mountain

Ten Mile Hollow

Mangrove Creek

Somersby

Greengrove

Upper Colo

Wheeny Creek

Laughtondale Maroota

Cumberland Reach

Blaxlands Ridge

Point Frederick

Spencer

Avoca Beach

Woy Woy Bay

Ebenezer

Grose Wold

Hobartville

Agnes Banks

Fiddletown

Palm Beach Arcadia

Kenthurst

Nelson Riverstone

Berkshire Park

Jordan Springs

Colebee

Penrith

Scotland Island Newport Mona Vale

Dural

Terrey Hills

Hornsby

Glenhaven Parklea

Castle Hill

Turramurra

Collaroy

Lalor Park

Kingswood

Rooty Hill St Clair

Orchard Hills

Roseville

! (

Eastwood

North Parramatta Eastern Creek

Allambie Heights

Epping

North Rocks

Seven Hills

Wentworth Point

Holroyd

Kurraba Point

St Johns Park

Berala

Villawood

Elizabeth Hills

Strathfield

Haberfield

Wattle Grove

Mascot

Riverwood

Panania Picnic Point

Ingleburn

Menai

South Hurstville Oyster Bay

Lucas Heights

Loftus

Grasmere Spring Farm

Kurnell Greenhills Beach Yowie Bay

Holsworthy Bradbury

Menangle Park

Heathcote

Royal National Park

Waterfall Menangle

Gilead Woronora Dam Lilyvale

Douglas Park Appin

5 Wilton

Darkes Forest

10 Km

Stanwell Tops Coalcliff

Scarborough

Port Botany

Dolls Point

Woronora Minto Heights

Maroubra

Hurstville

Bardia

Kearns Kirkham

Tamarama

Turrella Prestons

Catherine Field

Waterloo

Marrickville

Austral

Leppington

Haymarket

Summer Hill

Greenacre

Warwick Farm

Bringelly

Vaucluse

North Strathfield

Yennora

Kemps Creek

Greendale

North Harbour

St Leonards

Wetherill Park Luddenham

Balgowlah

Boundary St

Westmead Pemulwuy

Cobbitty

North Narrabeen

St Ives Chase

West Pennant Hills

Glendenning

Glenmore Park

Pittwater

Mount Kuring-Gai

Galston

Rouse Hill

Schofields

Cranebrook

Cottage Point

Oakville

Castlereagh

Regentville

Brooklyn

Windsor South Windsor

Cowan

Maraylya

Londonderry

Killcare Pearl Beach

Glenorie

Pitt Town Bottoms

Daleys Point

Mooney Mooney Forest Glen

Freemans Reach

North Richmond Grose Vale

Woy Woy

Cheero Point

South Maroota

Cattai

Wilberforce

Copacabana

Bar Point

Canoelands

Glossodia Kurmond

Erina

Kariong

Singletons Mill

Sackville North East Kurrajong

Wamberal

Gosford

Leets Vale Lower Portland

Kurrajong

Tumbi Umbi

Lisarow Narara

Glenworth Valley

Colo

Glenning Valley

Gunderman

Wisemans Ferry

Kangy Angy

Peats Ridge

Wadalba

Cronulla

representatives under a merged council.

At present there is a 15 minute travel time by car from Ku-ring-gai Council Chambers in Gordon to virtually the whole Ku-ring-gai Council area.

INTEGRATED PLANNING AND REPORTING

A similar 15 minute travel time by car from Hornsby Council Chambers provides access to a relatively small portion of Hornsby Council area and the northern part of the current Kuring-gai Council area. This has implications for accessing administration offices, as well as those councillors residing in the southern part of Ku-ring-gai travelling to attend site visits in the northern or western parts of the current Hornsby area or council meetings, in the event that a new civic/administration centre is located to the north of Ku-ring-gai. As an example, travel time (by car) for a trip from Lindfield to Berrilee in the afternoon peak period could take upwards of 1 hour and about 1 hour 45 mins using public transport. . ■■ Traffic congestion The time to travel significantly long distances in the merged council area would be magnified by the traffic congestion of key routes. In a 2015 NRMA survey54, the Pacific Highway and Pennant Hills Road were voted amongst the 10 worst roads for traffic congestion in NSW, with Beecroft, Pennant Hills and Thornleigh identified as some of the 10 suburbs and towns with the worst roads in NSW. The NorthConnex link currently under construction may provide some temporary relief to Pennant Hills Road, with heavy trucks expected to use it to travel through Sydney. However overall traffic volumes may not significantly decrease if drivers re-route from other roads.

Impacts on Ku-ring-gai and a merged area These accessibility issues will clearly disadvantage the Kuring-gai community and elected

54 55

The NSW Government has recently set a timetable for merged councils undertake their new Integrated Planning & Reporting (IP&R) cycle between January and July 2017.55 The Integrated Planning and Reporting Framework is a hierarchy of plans required by Council to be developed every four years under legislation and include: ■■ Community Strategic Plan - longterm strategic planning with the community. ■■ Resourcing Strategy - long-term resourcing strategies for assets, finances and the workforce. ■■ Delivery Program - four year programs aligned to a council’s term, detailing key actions, projects and resourcing ■■ Operational Plan - one year plans of actions, projects and budgets; and ■■ Performance Reporting - quarterly, biannual and annual performance reporting schedule. The above plans are to be developed in conjunction and consultation with the community and underpinned by social justice principles. Best practice engagement and consultation includes participation from elected representatives, senior staff and the wider organisation. This is imperative to gain consensus and ownership on the developed plans.

The Community Strategic Plan (CSP) is the most important document to develop as it identifies the community’s main priorities and aspirations for the future and sets out clear strategic directions to achieve them over the long-term. The CSP underpins the development of all other IP & R documents. Although it will be difficult to complete the IP&R planning cycle for Ku-ring-gai Council in the timeframes suggested by the NSW Government, it will be impossible to complete the IP & R planning cycle for a merged Ku-ring-gai and Hornsby Council within the timeframes. It cannot be stressed enough the importance of proper engagement with the community to carry out the IP&R process for a merged Council. The risk of lost opportunities by hurrying the development of these strategic plans and inadequate time needed for serious engagement with the ‘newly merged communities’ are likely to result in a compilation of different priorities reflecting the previous areas, leading to ongoing conflicts between the communities of the previous local government areas. This is particularly the case if resourcing (financial, human, assets) priorities do not match community priorities. If the CSP is to truly be a plan for the merged communities it requires adequate time to engage, facilitate and develop to ensure that the supporting IP&R documents incorporate the priorities and aspirations of the new area and reflect the NSW Government’s policy objectives and stated outcomes.

Additionally, an End of Term Report (EoT) and State of the Environment Report are to be prepared in the year of an outgoing Council, and in respect of the EoT it is to be presented to the last meeting of Council prior to an election, before entering into caretaker mode (normally a month before the election) with the next local government election being held in March 2017.

NRMA, Seeing Red on Roads survey, 2015 www.mynrma.com.au/get-involved/advocacy/news/seeing-red-on-roads-results-2015.htm [accessed 26 February 2016]. NSW Office of Local Government, Fit for the Future: Progress report, Stronger Councils, Stronger Communities, p15, December 2015

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■■ Access and travel times for elected representatives

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Glossary AR BLUETT MEMORIAL AWARD The AR Bluett Memorial Award has been awarded annually since 1945 in memory of Albert Robert Bluett. AR Bluett was an outstanding figure in local government, serving as the Secretary and Solicitor to the Local Government and Shires Associations of NSW for 30 years and one of the architects of the Local Government Act of 1919. The A R Bluett Memorial Award is keenly contested each year by councils in NSW who would like to be recognised as being the most progressive in the state in all aspects of their operations and services.

COMMUNITY STRATEGIC PLAN The Ku-ring-gai Community Strategic Plan 2030 - Our community Our Future identifies the community’s main priorities and aspirations for the future and sets out clear strategic directions to achieve them over the long-term. While Council has the main role in progressing the plan on behalf of the community other partners such as government agencies, external organisations and community groups also play an important role in delivering the long-term objectives of the plan.

COUNCILLORS Elected representatives who set strategic direction for the organisation, monitor organisational performance, liaise with stakeholders and ensure operational compliance.

DEMOGRAPHIC STATISTICS INCLUDING ERP Demographic statistics in this report are taken from the 2011 Australian Bureau of Statistics Census figures for Ku-ring-gai and Greater Sydney. The statistics can be readily accessed through Council’s website. ERP refers to the estimated resident

population and is updated annually by the Australian Bureau of Statistics. The Census count is not the official population of an area. To provide a more accurate population figure which is updated more frequently than every five years, the Australian Bureau of Statistics also produces “Estimated Resident Population” (ERP) numbers.

OFFICE OF LOCAL GOVERNMENT

IPART

The Office has a policy, legislative, investigative and program focus in matters ranging from Local Government finance, infrastructure, governance, performance, collaboration and community engagement. The Office strives to work collaboratively with the Local Government sector and is the key adviser to the NSW Government on Local Government matters.

Independent Pricing and Regulatory Tribunal of NSW. The tribunal sets the local government rate peg and assesses applications for special rate variations and council contributions plans.

INTEGRATED PLANNING AND REPORTING (IP&R) In 2009 the NSW Division of Local Government introduced the Integrated Planning and Reporting Framework. The framework introduced a hierarchy of plans which require: ■■ long-term strategic planning with the community ■■ long-term resourcing strategies for assets, finances and the workforce ■■ four year programs aligned to a council’s term, detailing key actions, projects and resourcing ■■ one year plans of actions, projects and budgets ■■ quarterly, biannual and annual performance reporting schedule.

LTFP Long-term Financial Plan. It sets out Council’s 10-20 year financial plan.

The Office of Local Government is responsible for local government across NSW. The Office’s organisational purpose is to “Strengthen Local Government” and its organisational outcome is “Fit for the future councils leading strong communities”.

ABS Australian Bureau of Statistics

IP&R Integrated Planning and Reporting

ACELG Australian Centre of Excellence for Local Government

IPART Independent Pricing and Regulatory Pricing Tribunal

CBD Central Business District

LEP Local Environmental Plan

CSP Community Strategic Plan

LGA Local Government Area

DCP Development Control Plan

LEP Local Environmental Plan

EFT Equivalent Full Time

LTFP Long Term Financial Plan

EoT End of Term report

OEH Office of Environment and Heritage

ERP Estimated Resident Population

OLG Office of Local Government

FFTF Fit for The Future

SRV Special Rate Variation

ICT Information and Communications Technology

T-Corp NSW Treasury Corporation

ILGRP Independent Local Government Review Panel

TfNSW Transport for NSW

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Acronyms

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References ABC News, NSW council amalgamations: Baird Government urged to avoid Queensland’s merger mistakes [Accessed 16 February 2016] www.abc.net.au/news/2016-02-16/ nsw-urged-not-to-repeat-qlds-councilamalgamation-mistakes/7167322?WT. ac=statenews_nsw Australian Centre of Excellence for Local Government, Letter to Independent Pricing and Regulatory Tribunal: Methodology for Assessment of Council Fit for the Future Proposals, 24 May 2015. Australian Centre of Excellence for Local Government, Consolidation in Local Government: A Fresh Look, Volume 1, May 2011. Bureau of Transport and Statistics, JTW data based on data from the Australian Bureau of Statistics (ABS). 2011. Curby, P and Macleod V, Under the Canopy – a Centenary History of Ku-ring-gai Council, November 2006. Edwards, Zeny, Six of the best: architects of Ku-ring-gai, 1998. Fulcher, H, The Concept of Community of Interest, A Discussion Paper which explores the concept of Community of Interest as it applies to Local Government boundaries, January 1991. Hornsby Shire Business Paper, General Meeting, 10 February 2016, [accessed 23 February 2016] businesspapers. hornsby.nsw.gov.au/Open/2016/02/ GM_10022016_AGN_WEB.htm Independent Local Government Review Panel, Revitalising Local Government - Final Report of the NSW Independent

Local Government Review Panel, October 2013. Independent Pricing and Regulatory Tribunal, Methodology for Assessment of Council Fit for the Future Proposals, June 2015. Independent Pricing and Regulatory Tribunal, Assessment of Council Fit for the Future Proposals: Local Government - Final Report, October 2015. Jeff Tate Consulting Pty Ltd, Report: Assessing processes and outcomes of the 2004 Local Government Boundary Changes in NSW, January 2013. Ku-ring-gai Council’s 2013/14 Annual Report [accessed 23 February 2016] www.kmc.nsw.gov.au/Your_Council/ Organisation/Reports_finances/ Annual_Report_2014_-_2015/Annual_ Report_2013_-_2014 Ku-ring-gai Council’s 2014/15 Annual Report [accessed 23 February 2016] www.kmc.nsw.gov.au/Annualreport Ku-ring-gai Council’s Community Strategic Plan 2030 [Accessed 16 February 2016] www.kmc.nsw.gov.au/ Your_Council/Organisation/Integrated_ Planning_and_Reporting_framework/ Community_Strategic_Plan_2030 Ku-ring-gai Historical Society, Ku-ring-gai Local History series, Second Series Architecture - Housing in Ku-ring-gai, May 1986. Ku-ring-gai Historical Society and Ku-ring-gai Council records. Ku-ring-gai Council, Council

Improvement Proposal – Template 2, [accessed 26 February 2016] www. ipart.nsw.gov.au/Home/Industries/ Local_Govt/Council_Portal/ Applications/FFTF_2015/Ku-ring-gai_ Council?ot=LG_FFTF_Proposal LG Solutions, Analyser: Published Financial Statements, 2013/2014. LG Solutions, Analyser: Published Financial Statements, 2014/2015. Local Government Boundaries Commission, Examination of an amalgamation proposal for the creation of a new Local Government Area to be named “New England Regional”: Incorporating the whole areas of: Armidale Dumaresq, Guyra Shire Uralla Shire, November 2010. Local Government NSW, HR Metrics benchmarking report (Urban Councils comparison), February 2015. Local Government Report, Sunbury out of Hume City Council, June 2014. NSW Government, Merger Proposal: Hornsby Shire Council (part) Ku-ring-gai Council, January 2016. NSW Government, Local Government Reform: Merger impacts and analysis, December 2015. NSW Office of Local Government, Fit for the Future: A roadmap for Stronger, Smarter Councils, September 2014. NSW Office of Local Government, Fit for the Future: Progress report, Stronger Councils, Stronger Communities, December 2015.

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NSW Office of Local Government, Comparative Information on NSW Local Government - Measuring Local Government Performance 2012/13 Part 2, June 2014. NSW Office of Local Government, 2013-2014 Time Series Data [accessed 25 February 2016] www.olg.nsw.gov.au/ sites/default/files/Time%20Series%20 Data.xlsx NSW Planning and Environment, A Plan for Growing Sydney, December 2014. Productivity Commission, Report on Conservation of Australia’s Historic Heritage Places, 2006. [accessed 26 February 2016] www.pc.gov. au/inquiries/completed/heritage/ submissions PricewaterhouseCoopers and Local Government Professionals Australia NSW, NSW Local Government Operational and Management Effectiveness Report – FY14, April 2015. NRMA, Seeing Red on Roads survey, 2015 www.mynrma.com.au/getinvolved/advocacy/news/seeing-red-onroads-results-2015.htm [accessed 26 February 2016 TCorp, Financial Sustainability of the New South Wales Local Government Sector: Findings, Recommendations and Analysis, April 2013.

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Appendices APPENDIX A BDO Financial Analysis of Proposed Merger of Hornsby Shire and Ku-ring-gai Councils (Appendices B-K include a list of services/ programs at risk)

APPENDIX B Case Study – Environmental Levy program

APPENDIX C Case Study – landscape design and environment

APPENDIX D Case Study – heritage planning and advice

APPENDIX E Case Study – children services

APPENDIX F Case Study – youth services

APPENDIX G Case Study – aged services

APPENDIX H Case Study – volunteer support

APPENDIX I Case Study – business engagement

APPENDIX J Case study service – community events

APPENDIX K Case Study service – community engagement

APPENDIX L Case studies – projects at risk

BDO Financial Analysis of Proposed Merger of Hornsby Shire and Ku-ring-gai Councils

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APPENDIX A

Commercial in Confidence Angela Apostol & David Marshall Ku-ring-gai Council 818 Pacific Highway GORDON NSW 2072

1 February 2016

Dear Angela & David FINANCIAL ANALYSIS OF PROPOSED MERGER OF HORNSBY SHIRE & KU-RING-GAI COUNCILS Thank you for engaging BDO East Coast Partnership (BDO) for the above assignment. The Minister for Local Government under section 218E(1) of the Local Government Act (1993) has proposed the merger of Hornsby Shire (part) and Ku-ring-gai local government areas north of the M2. To support the proposed merger, the NSW Government has prepared a Proposal Report to set out the impacts, benefits and opportunities of creating a new council (Merger Proposal). We have been engaged to review this proposal. To effectively review the Merger Proposal our engagement would be structured in 3 stages: 1.

Review and assessment of the proposed merger benefits as outlined by the NSW Government

Due diligence on Hornsby Council including:



Financial performance



Infrastructure backlog



Unrecorded liabilities.

Pre and post-merger analysis and the impact on Ku-ring-gai Councils constituents.

We have commenced Stage 1 of our assignment regarding the review of key assumptions of the merger proposal and further information required to complete a detailed review. Please see below for a detailed review of the Merger Proposal. SUMMARY OF MERGER PROPOSAL IMPACTS, BENEFITS & OPPORTUNITIES In summary, the NSW Government has provided a document that outlines the following benefits of the proposed merger between Ku-ring-gai and Hornsby Council: 

Net financial savings of around $70 million to the new council over 20 years



NSW Government to provide a grant of $20 million to the merged council



A forecast 34% increase in the operating result of the merged entity with 10 years as a result of the forecast net financial savings



Establishing a larger entity with operating revenue that is expected to exceed $335 million per year by 2025

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

An asset base of approximately $1.3 billion to be managed by the merged council



Greater capacity to effectively manage and reduce the $171 million infrastructure backlog across the area by maintaining and upgrading community assets and improving collaboration.

We have reviewed the above statements based on information provided by the NSW Government. Our analysis is set out in sections 1.0 to 1.3 below. Sources of information We based our review on the following documents: 

“Hornsby Shire Council (part) Ku-ring-gai Council” Merger Proposal dated January 2016



“Outline of Financial Modelling Assumptions for Local Government Merger Proposals” KPMG technical paper dated 19 January 2016



“Local Government Reform Merger Impacts and Analysis” dated December 2015



Other publically available information.

We have not been provided with the financial model or independent analysis prepared by KPMG to support the financial benefits stipulated in the Merger Proposal. We also note that the financial assumptions are based on out-dated data being financial information for each council for 2013-2014. In order to assess the financial benefits in detail we require up to date data for each council and a copy of the financial model and independent analysis prepared by KPMG. 1.0

NET FINANCIAL SAVINGS The Merger Proposal identified a range of financial benefits of the merger based on forecast cost synergies amounting to up to $70 million over a twenty year period. We have provided a summary of the financial benefits in the below table together with further commentary regarding each assumption under each heading below. A$’millions

Total expected savings

Removal of duplicate back office and administration functions and reducing senior management roles Increased purchasing power Reduced councillor fees Total expected savings from proposed merger

64 14 2 70

It is unclear whether the above forecast financial savings have been presented in nominal terms, real terms or discounted back to present value. 1.1

REMOVAL OF DUPLICATE BACK OFFICE AND ADMINSTRATION FUNCTIONS AND REDUCING SENIOR MANAGEMENT ROLES Savings of $64 million are expected to be realised primarily through the removal of duplicate back office and administrative functions and reducing the number of senior management roles. The proposal assumes a voluntary attrition rate in the first three years of amalgamation. After the three year protection period, savings are generated by initiating redundancies of duplicate back office, administration and corporate support staff functions. We have provided a table of the key assumptions in the proposal below together with BDO observations.

BDO Comment

Staffing efficiencies are estimated at 7.4%.

It is unclear what this assumption is based on and for what period. We require a detailed explanation in order to evaluate the reasonableness.

Reductions in the cost of Tier 4 (general manager (GM)) salaries (due to the reduced number of GMs in a post-merger environment) using historic salary data reported to the office of local government.

We require further information to assess this assumption as follows: a. How many Tier 4 employees there will be post-merger. b. How many Tier 4 employees there are presently in Kur-ing-gai council and Hornsby council.

Reductions in the costs of Tier 3 (Directors) salaries are assumed on the basis that Tier 3 salaries are equivalent to approximately 75% of the Tier 4 (GM) reported salary in NSW.

We require further information to assess this assumption as follows: a. How many Tier 3 employees there are presently in Kur-ing-gai council and Hornsby council. b. What the current ratio of Tier 3 salaries to Tier 4 salaries is for Kur-ing-gai council and Hornsby council.

It is assumed that a merger leads to a loss of four Tier 3 positions per council.

1.2

It is assumed that 1 General Manager and 4 Directors continue to operate post-merger.

We require further information to assess this assumption as follows: a. How many General Managers and Directors are presently employed by Kuring-gai council and Hornsby council.

Each council’s costs to make an employee redundant are a function of each council’s average salary, paid out for a standard number of weeks, and accumulated leave (average per employee) paid out in full. The analysis is based on 2013-2014 financial data.

We note this assumption is based on out dated information. We require further information to assess this assumption as follows: a. The estimated redundancy costs by employee for Kur-ing-gai council and Hornsby council.

INCREASED PURCHASING POWER Savings of $14 million are expected to be realised through greater bargaining power with suppliers as part of a larger merged council. The proposal assumes savings are realised in year one and grow gradually over a three year period (i.e. a total four year period to realise synergy). An annual saving is applied to each council’s budgeted materials and contract expenditure based on the each council’s long term financial plans (2013-2014). We note the financial model is based on out dated information.

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Merger Proposal Assumption

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We have provided a table of the key assumptions in the proposal below together with BDO observations.

Merger Proposal Assumption

BDO Comment

The assumed value of efficiency savings is up to 3% of a council’s expenditure on materials and contracts. The total efficiency saving of 3% will be realised over a four year period.

It is unclear how the efficiency rate of 3% has been estimated. We require a detailed explanation of this assumption.

It is assumed that only 80% of items reported under “materials and contracts” are subject to scale efficiencies.

It is unclear why only 80% of items reported under “materials and contracts” are subject to scale efficiencies. We require a detailed explanation. We also require a listing of any supplier contracts entered into by Kur-ing-gai council and Hornsby council including termination dates.

1.3

REDUCED COUNCILLOR FEES Savings of $2 million are expected to be realised through reducing the number of councillors needed for a merged council. The key assumptions regarding this synergy are as follows: 

The number of councillors for a new merged entity will mirror the highest number of councillors that currently exist in any one of the councils participating in the merger.



The dollar value of savings is sourced from 2013-14 reported data by council. This figure is grown at a standard wage growth rate of 2.3% per annum over the period.



The councillor fees saved are partially offset by an assumption that all new councillors will receive a fee of $30,000 per annum. This fee is greater that the top remuneration level currently received by councillors (with the exception of the City of Sydney).

We have reviewed the above assumptions and attempted to reconcile to publically available information. The total number of councillors post-merger appears to be ten councillors as ten councillors were employed by each council in 2013/14. Based on our analysis and by applying the above assumptions, the merger would yield approximately $1.1 million in savings over a 20 year period. We require clarification regarding the calculation used for the Merger Proposal. We look forward to your comments regarding stage 1 of our review and the receipt of more detailed information to allow BDO to assess the Merger Proposal . 2. SUMMARY 2.1

The Merger Proposal does not contain sufficient information for us to conclude on the merits of merging the two councils.

2.2

We are unable to conclude as to whether the expected savings ($70million) represent a significant enough proportion of the total operating costs required over the next 20 years to justify a merger.

2.3

Without detailed financial forecasts we are unable to quantify the risks associated with achieving the expected cost savings.

We thank you for the opportunity to work with you on this matter. If you have any questions, please contact me – 02 9240 9725. Yours faithfully BDO East Coast Partnership

Sebastian Stevens Partner

CASE STUDY – ENVIRONMENTAL LEVY PROGRAM

MERGER PROPOSAL SUBMISSION

APPENDIX B

Ku-ring-gai Council’s Environmental Levy program, in place since 2005, funds the annual delivery of $2.6 million of environmental initiatives within the Ku-ring-gai Local Government Area (LGA) and to date has leveraged at least $9.35 million in federal and state grants to augment the delivery of the Levy program. Key environmental benefits of the Levy program are the reduction of urban impacts of stormwater on riparian zones, a reduction in potable water use, improvements to the condition of streams and creeks, regeneration of bushland and the control of dumping and encroachment into bushland and a reduction in Council’s energy use and greenhouse gas emissions. Under a merged council scenario, the discontinuation of the Environmental Levy (currently due to expire in June 2019) is likely to represent a significant reduction in service delivery as the reduced financial resources available for environmental management are spread across a much larger geographical area and population, and hence diluted / poorer environmental outcomes. Key services / programs at risk from the discontinuation of the Environmental Levy are as follows: Water management program

The Environmental Levy facilitates the delivery of Council’s innovative water management program, involving the installation of sediment and filter basins and biofilter gardens, creek stabilisation works, weed removal, stormwater harvesting projects, community engagement and creek water quality and macroinvertebrate sampling across the LGA that reduce our reliance on Sydney’s drinking water supply, reduces the impact of stormwater runoff on our bushland and saves Council and ratepayers’ money. Since 2007 we have installed 15 stormwater harvesting systems, one rooftop filter garden, two leachate systems, two sewer mining systems, 20 biofilter gardens, 70 Gross Pollutant Traps (GPTs) and 141 pit litter baskets. In 2014/15 alone we reused 74,000 litres of water for irrigation and diverted 2,141 tonnes of rubbish from our waterways. The Levy has enabled successful water savings initiatives to be undertaken at all major Council facilities with a 14% annual saving in consumption and $50,000 annual cost reduction reported for 2015 (relative to 2010). The Environmental Levy also contributes to the delivery of Council’s flood risk management program. Energy management program

The Environmental Levy facilitates the delivery of Council’s energy management program, involving the delivery of a range of renewable energy and energy efficiency projects such as HVAC upgrades, LED lighting upgrades and intelligent lighting control upgrades, the installation of solar PV, solar hot water upgrades and the installation of energy management tools such as BMS controls and sub-metering. As a result of the Levy, Council’s total solar capacity is currently 111.5kW and is expected to increase by 50-100% over the next four years. To date, the sum of achieved and identified savings equates to electricity cost reductions of $92,800 / yr and emissions reductions of 595 CO2te / yr. By 2020 it is expected the Levy will be reducing Council’s electricity costs by an additional $149,000 / yr and reducing emissions by an additional 748 CO2te / yr. Bushland and biodiversity management program

The Environmental Levy facilitates or supplements bush regeneration activities in 37 high value bushland reserves, including two reserves subject to a Conservation Agreement (Browns Forest and the Ku-ring-gai Flying-Fox Reserve), and reserves which contain endangered ecological communities (EECs) and threatened flora and fauna species. An average, four ecological burns are conducted each year for the preservation or enhancement of ecological processes in our bushland reserves. Council’s fauna management program monitors the presence of native birds, reptiles, amphibians and mammals in the LGA to identify changes in species distribution or abundance and fauna behaviour. The data recorded improves Council’s impact and development application processes and bushland management program. Complementing Council’s bush regeneration program are 725 active Bushcare, Streetcare and Parkcare volunteers, who contribute over 12,000 volunteer hours per annum on bush regeneration activities at 165 sites, supervised by qualified Bushcare trainers with expertise in bushland regeneration. The Environmental Levy facilitates the delivery of Council’s dumping and encroachment program, which reduces the impacts on our natural environment from unauthorised dumping or encroachments from private properties on to Council-managed bushland reserves. Community and business engagement programs

The Environmental Levy facilitates the delivery of Council’s Loving Living Ku-ring-gai community engagement programs and sustainable event series. These programs include: Water Smart, offering water rebates on raingarden and rainwater tanks to all Ku-ring-gai residents (since inception, 50 rainwater tanks have been installed with a total capacity of 234kL); Energy Smart Savers, providing smart home energy monitors, rebates for energy efficient pool pumps and regular information sessions on energy efficiency and solar power (388 residents engaged, 115 pool pump rebates awarded with total expected electricity savings per annum of 222.07MWh and cost savings of $48,947 per annum); Smart Units, providing Ku-ring-gai unit blocks with energy, water and waste audits and tailored action plans (15 unit blocks engaged with more than 1500MWh/year in electricity savings identified); Smart Homes, an online web resources for incorporating sustainability into house renovations,

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retrofits or rebuilds and a sustainable building design event series (engaged 1,000 residents); and Compost Revolution, where150 Ku-ring-gai residents have purchased either a compost bin or worm farm and 1000 residents have completed either the composting or worm-farming online tutorial. Over 1,600 attend our sustainable event series each year. Council’s Loving Living Ku-ring-gai program is supported by our Loving Living Ku-ring-gai sustainability e-news (1,857 subscribers), Facebook page (2251 followers), Twitter account (334 followers) and YouTube Envirotube channel (538 subscribers and 195,627 unique views). Council’s Better Business Partnership (BBP) program provides a sustainability advice service to small and medium businesses in Ku-ring-gai (current membership is 179). Wild Things program

The Environmental Levy facilitates Council’s community biodiversity program, which to date has distributed 430 stingless native beehives to Ku-ring-gai residents and has assisted over 70 local residents convert their unwanted pools into easy-tomaintain ponds. Climate change adaptation planning

The Environmental Levy facilitates the delivery of Council’s Climate Wise Communities program, the only one of its kind, designed to improve community resilience to the impacts of climate change, at a personal, property and neighbourhood level through a range of workshops and seminars targeted at those community sectors most vulnerable to extreme weather events, including Culturally and Linguistically Diverse (CALD) communities, seniors, aged care providers, residents in high bushfire hazard zones, in-home care providers for seniors living alone and children’s’ services providers. To date, the program has attracted over 610 participants and has resulted in an increased capacity within the community to respond to the impacts of a changing climate. Community Small Grants Program

The Environmental Levy Community Small Grants Program assists the Ku-ring-gai community to deliver small, community based, environmental projects at a neighbourhood level. To date the program has funded 187 community projects worth $692,011. Sustainable transport and community recreational facilities

Through the Environmental Levy, Council is improving Ku-ring-gai cycle ways and promoting sustainable transport options, as well as providing recreational opportunities for our local residents. To date, Council has created over 9km of new cycle ways across the LGA and built the Jubes Mountain Bike Mark at Golden Jubilee Oval, Wahroonga. An education centre at the Ku-ring-gai Wildflower Garden is currently being designed and will be constructed next financial year. Research partnership with Macquarie University

Council has engaged in active research with six Australian universities and has a formal partnership arrangement with Macquarie University, through a Memorandum of Understanding, to develop academic interchange in teaching, research and other programs and activities. Staff expertise

The Environmental Levy funds or partly funds 14 Environment and Sustainability staff that has technical knowledge and specialist skills in a range of disciplines / areas, including bushfire management, catchment management, natural areas management, land use planning, community engagement, biodiversity and conservation management and environmental engineering. These staff not only deliver the Environmental Levy program but provide expert guidance and advice for a number of sections across Council. Aboriginal heritage

Ku-ring-gai Council currently partners with Lane Cove, North Sydney, Manly, Warringah, Willoughby and Pittwater Councils to fund the Aboriginal Heritage Office (AHO). Under this funding arrangement, the AHO offers a wide range of free services to the community and staff of partner Councils, including: (i) assistance in protecting and preserving Aboriginal sites, involving monitoring of sites on a day to day basis and long term management reports, strategic planning advice, DA referrals and conservation management; (ii) an avenue for Aboriginal people and non-Aboriginal people in these council areas to discuss issues or concerns they may have; (iii) direct contact with the Metropolitan Local Aboriginal Land Council and its many resources; (iv) staff training in Aboriginal site awareness; and (v) talks, walks and activities for school groups and the community, to enhance appreciation of Aboriginal culture in the wider community.

CASE STUDY – LANDSCAPE DESIGN AND ENVIRONMENT Councils landscape design and advice service delivers a wide range of projects, including local playgrounds, regional playgrounds, new parks and park improvements, car park improvements, fencing upgrades, sports field infrastructure improvements and redevelopments, and neighbourhood shopping centre streetscape improvements. The service is strongly focussed on designs which provide access for all and ensuring work complies with relevant legislation, Council’s policies and corporate standards, best practice procedures for heritage and environmental management, and Australian Standards. Recent example of Landscape Design Excellence • Greengate Park, Bruce Avenue Killara. Winner of the 2014 Parks and Leisure Australia (PLA) state award winner for Parks and Open Space Development. • Ku-ring-gai’s Open Space Acquisition Strategy (2007), winner of the AILA Award for Excellence in Planning 2013 and PLA award for Open Space Planning in 2014, identified the need for a new local park in the Killara area to support the construction of medium-density residential apartments developed in close proximity to the major rail and road corridor. Professional and technical specialist advice is also provided to elected members of Council and staff in the organisation from other departments in relation to open space polices and guidelines, capital works projects and program, open space master plans, public land plans of management and refurbishment programs for open space assets across the LGA.

APPENDIX D CASE STUDY – HERITAGE PLANNING AND ADVICE The heritage of Ku-ring-gai comprises a rare blend of fine domestic architecture within a landscape of indigenous forests and exotic plantings and gardens, with over 900 listed heritage items and over 50 Heritage conservation areas. Council’s Strategic Heritage section identifies, lists and manages Ku-ring-gai’s large number of heritage items and Heritage conservation areas. The team conducts independent research and policy development to manage and promote Ku-ringgai’s unique built heritage assets and provides internal advice on heritage matters including development applications and general advice to the community on interpreting and applying heritage planning policy. The team makes submissions on wide planning matters to the NSW Government on heritage matters. This approach has enabled Council to take a consistent and comprehensive approach to heritage management in Ku-ring-gai from research and policy development to development applications. Councils establishment of the Ku-ring-gai Heritage Reference Committee has enabled further input into the management and promotion of Council’s heritage by including representatives from the Australian Institute of Architects, National Trust and the Ku-ring-gai Historical Society.

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APPENDIX C

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APPENDIX E CASE STUDY – CHILDREN SERVICES

Description The range of children’s services provided includes long day care, occasional child care, family day care, vacation care and immunisation in response to identified community needs. In addition Council supports the planning, development, coordination and operation of all children’s services within the Local Government Area The delivery of our services provides an important linkage and conduit between Council and the State and Commonwealth Governments specifically in relation to regulatory, planning and funding issues. All directly provided child care services reflect the National Quality Framework endorsed by Australian Children’s Education and Care Authority and are licenced by the Department of Education and Communities. Council facilitates the development of a Children’s Services Needs Study and forums for children’s services within the LGA. Scale of service Direct services provided by Council in the last year include: ■■ 50 long day care and 3 occasional child care places servicing 136 children. ■■ 170 vacation care places servicing 2,300 children ■■ 90 full time equivalent places in family day care servicing 282 children ■■ Immunisation services provided to 366 children • The services all primarily operate from Council owned and managed facilities. Current occupancy rate for Councils children’s services is 94%. • All Council services currently carry waiting lists and demand for services exceeds current service capacity for long day care, occasional child care, vacation care and family day care. Demand for all children’s services is anticipated to grow in the future due to the increase in population and higher workforce participation. • Grant funding received from State and Commonwealth governments in 2014 - 2015 totalled $1.125mil. Benefits of the service Council provides a range of services for children and families and is committed to the delivery of high quality care and education within a nurturing and responsive environment. We value the contributions of families in our services and acknowledge the importance of supporting and developing connections between families and the community which enhance the development and long term outcomes for children. Hornsby Council does not currently provide any direct Children’s Services.

CASE STUDY – YOUTH SERVICES

Description

Ku-ring-gai Council provides a range of recreational, vocational and support programs to young people (12 – 24 years) and their families. The service is responsive to identified community needs and operates with the objective of ensuring that young people are happy, healthy, connected, engaged and empowered. Council’s role in the provision of Youth Services includes direct service delivery, service planning and coordination, resourcing and support, provision of community facilities and youth sector development. Scale of service

• A total of 5,911 young people attended Youth Services programs in the 2014/15 financial year. The range of services provided include three youth facilities, parent education, public art, school holiday programs, individual support, entertainment events and skill development workshops. • Youth Services utilise specific community facilities in Gordon, Turramurra, St Ives and other locations in partnership with community organisations across the Ku-ring-gai LGA. Benefits of the service

• The service aims to address the social, welfare, recreational and vocational needs of young people. This includes issues relating to drug and alcohol use, mental health and well-being, social isolation and relationships. • Demand for Youth Services is expected to grow in the future due to population growth and the increasing number of residents living in medium density accommodation. The complex nature of emerging youth issues will also increase the requirement for early intervention services. • KYDS free adolescent counselling service (based in Lindfield) works with 12 to 18 year olds and their families living on the North Shore of Sydney. This important community-based youth service has been supported financially and in-kind by Kuring-gai Council since its establishment in 2005. In 2015, this service provided over 2000 free counselling sessions for young people as well as a range of workshops in schools. Other benefits

Hornsby Council does not have a dedicated Youth Services team. Instead, they operate with a more ‘generalist’ model of service delivery with a ‘place-based’ approach to community services. The high quality of youth service provision at Ku-ringgai Council is a direct result of the strategic decision to take a ‘specialist’ rather than a ‘generalist’ approach. Without this ‘specialist’ approach, it is doubtful that this high level of targeted service delivery to young people will continue. A locality such as Ku-ring-gai is not considered the ‘first choice’ for State and Federal Government funding rounds. Often it is ‘disadvantaged’ and ‘low socio-economic’ communities that rightly are prioritised for funding rounds for community programs. This does not change the reality that young people in Ku-ring-gai still struggle with issues (such as poor mental health, drug & alcohol abuse, family violence) that cross over socio-economic boundaries. It is in this funding reality that a direct-service delivery model becomes essential for a community. If Council exits this space, the NGO sector does not have the financial capacity to fill the void. Specific needs that the service addresses

Mental health issues are one of the top issues facing youth people in Ku-ring-gai. Body image, depression and anxiety are issues faced by many young people in the community. Youth Services addresses this need through the provision of early intervention programs. Leadership opportunities are in demand amongst Ku-ring-gai young people who have a strong desire to deliver their own programs and events. Youth Services is meeting this need through the incubation of initiatives that offer participants the opportunity to tailor solutions to identified issues. Parent education has been identified as one of the key drivers to assist young people as they navigate adolescence. In response, Youth Services provides a range of parent forums annually that respond to priority issues that parents are facing.

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APPENDIX F

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APPENDIX G CASE STUDY – AGED SERVICES

Description Council provides a range of programs, activities and events to meet the social, educational and recreational needs of seniors. These activities are designed to promote independent living through a wellness and enablement model. The target group is primarily older people aged 65+ years, the frail aged and their carers. Council’s role in this area is as a direct service provider as well as planning and co-ordination with and resourcing and supporting community groups. Council provides community facilities for Community run Aged Services Scale of service • Council ran 73 seniors programs throughout the year. They included weekly Falls Prevention programs, educational seminars, excursions, health and wellbeing forums/activities, arts and cultural events annual seniors festival and specialist workshops., • 2939 seniors attended the programs. Utilisation rates were above 90% with a customer satisfaction rating of 96.3%. • The services are generally provided in Council owned facilities or in partnership with community based organisations. Benefits of the service • The anticipated growth of the Aged demographic is expected to rise exponentially given the predicted increase of people over 65. • The feedback from Senior participants is outstanding and the program is greatly appreciated. There have been many comments about the benefits of being involved socially and the resultant reduction in social isolation. • Council holds the unique position of being a trusted provider of community services. We seek regular feedback and structure future programs based on participants needs. The seniors value and appreciate the depth of programs provided. Council’s programs provide a number of positive flow on effects: including: 1.

reduced social isolation

better health outcomes

reduced admission to hospitals

increased knowledge of available services

more active involvement enabling them to continue to live independently in the community

CASE STUDY – VOLUNTEER SUPPORT

Description This Council service assists in the recruitment of local volunteers from school students to fit octogenarians to provide home support for frail aged residents. The service assists potential volunteers to choose opportunities that suit their interests, ability and availability and builds the capacity of local seniors’ support services by consistently referring appropriate new volunteers. Council’s service maintains volunteer satisfaction and enthusiasm through volunteer training and appreciation events and supports local seniors’ services through education and information sharing with coordinators. Scale of service

• Of the 320 potential volunteers who contacted the Volunteer coordinator in 2015, 240 were referred to local seniors’ support services. Training and appreciation events were attended by, on average, 25 volunteers, with 92% satisfaction rating. The “Bring a Friend” movie night attracted 220 volunteers and potential volunteers. Benefits of the service

• Volunteers enjoy physical and emotional health benefits, and a greater sense of community engagement. • Volunteers are more likely to offer their time and energy within a small geographical area close to their own local community. • Volunteers reduce the social isolation of frail aged residents, and help these residents stay in their homes rather that in residential care. Differences between Ku-ring-gai and Hornsby Council services

There are significant differences in the levels of service, models of operation and roles between Ku-ring-gai Council and Hornsby Shire Council in the children’s services, youth services, aged services and volunteer services areas. Ku-ring-gai Council unlike Hornsby Council provides direct services in all those areas including management and control of the various facilities. Under a merger there would need to be an alignment of strategic direction and equalisation of service delivery levels across both areas. This would involve renegotiation of leases, licensing and regulation agreements, grant funding contracts and management of customer and resident expectations. The alignment of service levels is likely to result in an increase in financial investment in the Hornsby LGA or a reduction of service delivery levels for Ku-ring-gai residents.

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APPENDIX H

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APPENDIX I CASE STUDY – BUSINESS ENGAGEMENT

Economic and Social Development Advisory Committee (ESDAC)

Council’s ESDAC was established as an advisory group of Councillors and Directors, with the primary function of reviewing ideas and initiatives, and making recommendations regarding the allocation of resources to best support our local economic development program. Initiatives include strengthening support for local business, upgrading neighbourhood centres, finding new ways to activate local centre and spaces, increasing our use of social media and improving our website. We are also pursuing opportunities to better promote our shopping centres, attract new investment into the area and expand tourism. Business partnerships

Council has forged stronger relationships with local and regional organisations and associations to help our local business community through: • presenting to and hosting members of the Ku-ring-gai Local Chamber of Commerce at business functions. • providing ongoing support to the programs of the Better Business Partnership. supporting the Small Biz Bus in Kur-ring-gai. • supporting the education, training and engagement of the local business community. • working with the NSW Chamber of Commerce to determine opportunities for strengthening our local chambers including promoting their services to enhance business participation. Better Business Partnership

For the business community, the Council’s membership of the Better Business Partnership (BBP) continues to attract businesses interested in reducing waste. Grant funding from the NSW Government ($246,000) has enabled the BBP to enhance its Waste Saver Service for local businesses generating high volumes of food waste. Between July and December 2014, 66 Ku-ring-gai businesses were recruited and 670 annual potential tonnes of waste were identified which could be redirected from landfill. Currently 118 Ku-ring-gai businesses are actively engaged in the BBP program, with 54 new businesses being recruited between July and December 2014. Of these 35 have been appraised on their performance and issued with accreditation. Regional economic cooperation

Council actively works with our neighbouring Councils to determine areas for economic growth. Partnerships are active with Pittwater and Warringah Councils and Ku-ring-gai is working closely to complement the Better Business Partnership program in northern Sydney. In September Council presented at the Enliven Pittwater Forum, highlighting some of the opportunities and challenges facing the local economy in Ku-ring-gai. The event was a great opportunity to hear from and network with other Councils who are active in the economic development area. Support and marketing of local events

Events are an important factor in attracting visitors and feature prominently in the development and marketing plans of most destinations. Council’s highly successful marketing program with community partners continues to develop Ku-ring-gai’s reputation for well run and interesting events. For example, in the 2014/15 period the very successful Medieval Faire and Wahroonga Food and Wine Festival were held, attracting the local community as well as visitors from outside the Council area. The tender for the St Ives Organic and Fresh Food Market was finalised creating a weekly business opportunity. This market will provide an opportunity for Council and the new market operator to activate and revitalise this part of St Ives local centre. ‘That Great Market’ was also established in East Lindfield with Council working with the operator to launch the market, by providing marketing and promotional support. A number of major events are organised or sponsored by Council annually within the Ku-ring-gai area. These events, which received major patronage from local residents also have the potential to attract visitors from all over Sydney. The events also provide opportunities for local businesses to promote their services, with the aim of strengthening local and neighbourhood business centres. Council annually provides sponsorship grants for local events. This totalled $56,000 in 2014/15 and included:

• The St Ives Food and Wine Festival attracted over 3,000 people to St Ives • The Medieval Faire at St Ives Showground attracted 12,000 people to St Ives. • The Ku-ring-gai Philharmonic Orchestra, Bobbin Head Cycle Classic and Special Olympics which were sponsored by Council • Festival on the Green at St Ives, the Twilight Concert at Wahroonga and new markets at East Lindfield Strengthen tourism opportunities

Council proactively supports tourism opportunities for Ku-ring-gai. Recent examples include: • The St Ives Precinct, including the Ku-ring-gai Wildflower Garden, which was officially registered with Destination NSW, and is now promoted as a Sydney tourist destination on the Destination NSW website, and major events are listed in the Destination NSW events calendar. Partnerships have also been developed with local accommodation providers for package deals and cross-promotion of Council’s major events on accommodation websites. • The refurbishment of Caley’s Function Centre at the Ku-ring-gai Wildflower Garden was completed at a cost of around $250,000, providing a venue for community events, commercial events and weddings. A website and other marketing collateral was developed and distributed, resulting in bookings for summer weddings. Several other events were booked for Caley’s, such as the International Women’s Day function in March 2015. • The Visitors’ Centre in the St Ives Precinct, was completed, and opened in November 2014. Visitor numbers to the centre in the seven months since its opening are over 3,000, and overall visitation to the Wildflower Garden has almost doubled during the year – from approximately 10,000 in 2013/14 to over 21,000 in 2014/15. • The St Ives Showground Precinct Plan of Management was also finalised following its public exhibition between December 2014 and February 2015. The plan addresses current and future uses for the land, such as camping and other activities, as well as protection for endangered vegetation. • Major events at the precinct such as the Medieval Faire (held in September 2014 and 2015), and the Big Swing (held in March 2015), have also attracted additional visitors to Ku-ring-gai. The St Ives Precinct program proposed for 2015/16 includes major events to be staged by third parties. This includes the Northside Polo Spectacular – September; the Indian Festival of Curry in May; the Raw Challenge in November and March; Soccer Festival November 12th - 16th, 2016; Jewish Sports Festival January 16th - 19th, 2016; the Colour Run November 2016 and Summertime Music Festival December 10th, 2016. Planning for a new Cultural Centre at the Ku-ring-gai Wildflower Garden also commenced during 2014/15 along with development of a Tourism and Visitation Strategy for the Ku-ring-gai local government area.

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• The Wahroonga Food and Wine Festival held for a second year and bringing over 7,000 people to Wahroonga. The Wahroonga Food and Wine Festival, which was sponsored by Council, also attracted high numbers of visitors from both within and outside the local government area.

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APPENDIX J CASE STUDY SERVICE â&#x20AC;&#x201C; COMMUNITY EVENTS

Every year Council organises or supports a comprehensive and highly popular community events program for Ku-ring-gai residents. This program is now attracting between 50,000-65,000 people every year including attendance to our signature event, Festival on the Green, attracting over 35,000 people in 2014. All Council events provide a great opportunity for local suppliers, stallholders, businesses and performers to showcase their products and services to the local community. Council delivers a diverse program of popular cultural events, which are free for the community to attend. Events also allow people to experience a variety of cultures through a wide range of performance groups, crafts, food stalls and information about community organisations. Recent examples include: St Ives Medieval Faire

The inaugural Medieval Faire was an outstanding success for a first time paid admission event, attracting around 12,000 people over two days in September 2014. Participants included international jousters, Viking battle re-enactors, live birds of prey recreating medieval hunting and falconry, traditional archery, a trebuchet or giant catapult, wandering minstrels and displays of arts and crafts from the Middle Ages. The Faire won the 2014/15 Parks and Leisure NSW Events Award in May 2015 in recognition of the success of the regional event in its first year. Anzac Day

An Anzac Day event was held at the Wildflower Garden on Saturday 25 April 2015. Ku-ring-gai residents were invited to a free screening of the documentary Gallipoli: The Frontline Experience, as a special commemoration of the 100th anniversary of ANZAC Day. Aboriginal Heritage festival

Ku-ring-gai Council contributes each year to the Guringai Festival which celebrates indigenous culture in northern Sydney through guided walks at the Wildflower Garden, the Childrenâ&#x20AC;&#x2122;s Voices of Reconciliation event held with local schools and a display at St Ives Library commemorating the Guringai tribe who used to inhabit the local area. Ku-ring-gai Council is a member of the Aboriginal Heritage Office (AHO), a unique partnership of eight councils in Northern Sydney which are working to protect Aboriginal sites and promote Aboriginal history and heritage.

CASE STUDY SERVICE – COMMUNITY ENGAGEMENT

In addition to formal committees and reference groups, Council takes a proactive approach to consulting and engaging with local residents, community groups, service providers, businesses, relevant organisations and government on important social and economic plans and strategies. This includes forums and summits with representatives from these groups as well as individual community members. Councils consultation policy ensures engagement with the community is equitable and accessible. To do this Council employs a range of methods to connect with our local stakeholders including: • Proactive communications and reporting. • Community meetings, forums, workshops and information sessions. • Innovative web based tools like online forums and surveying. • Reference committees to bring together subject matter experts and interested participants. • Large scale and demographically representative summits for major planning initiatives. Examples of recent community engagement include: Activate Lindfield Program

A community ‘Family Fun Day’ event was held at Lindfield local centre in February 2014 to engage the local community in planning for community facilities in the centre. The purpose of the event was to discuss ideas and options for the proposed Lindfield Village Green and Community Hub projects and obtain feedback via a survey on these projects as part of our planning for the revitalisation of Lindfield local centre. The event was well received by participants and over 120 surveys. Given the success of the event a series of similar events are being planned for other centres. Community Facilities Studies

Community user groups, service providers, relevant organisations and government departments were consulted in the preparation of a Community Facilities Study for the Ku-ring-gai local government area in 2015. Community Survey of services and facilities

Council commissioned a resident survey on community priorities and satisfaction with 44 current services and facilities provided by Council, overall level of satisfaction with Council’s performance as well as attitudes and perceptions towards a series of longer term social, economic and environmental issues. Council received a positive result with 84% of surveyed residents indicating they were satisfied to varying degrees with the overall performance of Council. Community feedback on programs

Each year a series of surveys are conducted of user groups for specific Council programs and initiatives. Their purpose is to assess the level of user satisfaction with the programs and identify opportunities for improvements or change to suit user group needs. The majority of these surveys are undertaken online and included environmental initiative programs; community education programs for fire preparedness; children’s services; and workshops and programs for older people. Social media connections

Council has embraced social media as an effective way to communicate and engage with its community and as a means of building community connections. Council now administers a range of social media channels used by different audiences and interests. Capture Ku-ring-gai Photo Competition

Council holds an annual photography competition Capture Ku-ring-gai. As part of the competition a community voting section is provided on Facebook to engage the community and generate a sense of community pride. Council uses the images in its social media, digital advertising and on its website to showcase the quality of the entries.

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APPENDIX K

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APPENDIX L CASE STUDIES – PROJECTS AT RISK Ku-ring-gai’s major projects represent the biggest urban development projects in the LGA’s history Lindfield Community Hub will be located on the western side of the Lindfield town centre and has an estimated construction cost of $120 million. The 1.3 hectare site will be a new mixed use precinct with community buildings, boutique shops, cafes restaurants and a below-ground supermarket. The redevelopment will create new streets, a large central park, a new library and community centre as well as commuter parking. In addition over 100 apartments and live-work accommodation will be developed to help meet the housing needs of 21st century living. Council is contributing over $12 million to the project as well as the land to fund community infrastructure. Council will be delivering this project as a Public Private Partnership to ensure that a high quality project is delivered that will meet the high expectations of residents. Planning for the project is well advanced with an Expression of Interest planned for later in 2016 The Turramurra Community Hub will be located centrally in Turramurra town centre directly adjoining the rail station and has an estimated construction cost of $160 million. The 1.6 hectare site will be a new mixed use precinct with community buildings, boutique shops, cafes restaurants and a below-ground supermarket. The redevelopment will create a large park and a central public plaza, an iconic library building fronting the Pacific Highway and community centre. In addition over 100 apartments will be developed to help meet the housing needs of 21st century living. Council is contributing over $20 million to the project as well as the land to fund community infrastructure. Planning for the project is at master plan stage with a public exhibition planned for early 2016. The Gordon Cultural and Civic Hub is planned to occupy nearly 1.3 hectares on the site of Council’s existing chambers

building in Gordon town centre. The precinct is planned to provide contemporary cultural facilities for local artists and performers; facilities will include galleries, workshops, performance and rehearsal spaces, studios and artist-in-residence facilities. It is also planned to provide new Council administration offices on the site to support the civic and social functions. The master plan will include a new civic public space for outdoor ceremonies and civic functions as well as creating a focus for bars, restaurants and cafes. Master plan options will include residential, commercial office and large format retail uses. Planning for this project has been put on hold pending resolution of council amalgamations.

Lindfield Village Green is a project that has developed out of Council’s award winning Open Space Acquisition Program.

Council will be utilizing development contribution funds to construct an underground car park on the site of an existing Council car park located on the eastern side of Lindfield local centre within 50 metres of the rail station. By relocating the car parking underground the surface is freed to create a new public plaza and park almost 3,000sqm in area. The project involves Council working in partnership with TFNSW to deliver a second basement level of car parking for commuters. Council has adopted a preferred concept plan for the park and is planning to submit a Development Application later in 2016, with construction commencing in late 2017. The total budget for the project is $19.7 million for Council’s component of the project. All major projects will be striving for a high environmental ratings including systems for power, heating and cooling and rainwater harvesting for non-drinking purposes such as toilet flushing and irrigation These major projects represent an exciting new chapter in Ku-ring-gai’s growth and will generate a range of property investment opportunities. They will add to Sydney’s existing high quality outdoor spaces, generate housing options, assist in the delivery of shorter work commutes and accommodate a range of new economy jobs.

At the Ordinary Meeting of Council held 9 February 2016, Council resolved to defer this project until merger decisions are finalised.

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