SOURCES OF INCOME

Our income streams are largely determined and regulated by the Local Government Act 1993. These include rates, fees and charges for particular services, grants and subsidies from higher levels of government, loans, interest on invested funds, and occasionally the sale of redundant assets or business activities. The income we receive is important in determining our capacity to increase levels of service or provide new services.

Rating

Income from rates provides the largest single portion of our total income, with the amount that the total rates yield of a council can increase by each year set by the Independent Pricing and Regulatory Tribunal (IPART).

Calculating rates is a complex process, largely driven by the value of the property and also what it is used for a residence, a business, a farm or a mine. This means that while the increase set by IPART is applied across the total amount of rates, individual properties may see increases or decreases in rates dependent on the value of their property as compared to others in the rating category.

Fees And Charges

Fees and charges are set on a user pays basis and allow for partial recovery of the cost of providing the service, rather than full recovery. The Revenue Policy, contained within our Operational Plan, ensures fees and charges do not result in unreasonable cost subsiding by the wider community. If the fee or charge provides additional income, this is used to provide services for the wider community.

Grants And Contributions

We receive both annual grants, which are reasonably consistent and discretionary grants, which we pursue specific projects, from the Federal and State governments. These grants help to fund a range of services and major capital projects, including environmental projects, community service programs, road safety programs, public library operations and road construction and other infrastructure works. While the provision of grants is at the discretion of other levels of government, for us they are a key source of income, and we are active in pursuing opportunities to obtain funding to support the delivery of projects.

Borrowings

Long term borrowing is a useful tool for funding major new assets. By spreading the debt over a longer period it ensures assets provide a benefit to residents now and into the future.

Investments

At any point in time, we can hold a significant amount of cash received from grant monies, contributions to works paid by developers, and general income from rates, fees and charges. This money is committed to various works and services through our annual budget and development contribution plans.

However, there can be a period of time between receiving and spending the money. To ensure it is generating income through interest, it is invested for a period between collection and expenditure. Income from investments can vary significantly due to economic climate, interest rate fluctuations and expenditure against commitments.

Asset Sales

Our significant asset base includes infrastructure, property, plant and equipment. Operational holdings, that is land and buildings, are regularly reviewed to identify opportunities to dispose of assets no longer needed for service delivery. Any asset that is sold generates revenue from the sale and reduces the maintenance cost associated with continued ownership.

Entrepreneurial Activities

Commercial activities are limited to the generation of rental and lease income from property, merchandise sales and some tourism offerings. Any involvement in other activities that could generate sustainable income would be canvassed for community support and undertake a merit based risk assessment to assess the impact on public resources.

Development Contribution Plans

Development contributions are paid by property developers to assist in the provision of infrastructure and facilities in newly developed areas, as well as address the needs of these new residents in the broader functioning of the city. A portion of our annual Capital Works Pogram is funded by development contributions, and we often need to hold these funds until we collect a sufficient amount to enable the delivery of works. Details of works funded by development contribution plans can be found on our website at maitland. nsw.gov.au/ourservices/buildinganddevelopment/ developmentcontributions

Reserves

At any given time, Council will hold funds in ‘Reserves’ that have been established for a specific purpose. Currently, Council has reserves established for transfer station construction, waste site rehabilitation, employee leave entitlements, workers compensation, developer contributions tied to future projects, information technology, asset maintenance and economic development. While held in reserve, these funds do generate interest which can be returned to the reserve (if required) or used as revenue.

Expenditure

Our expenditure is regulated by the Local Government Act 1993 and focuses on the delivery of services, cost of goods, loans for new assets and depreciation.

Employee Costs

These are the greatest expense for most councils and provide for wages, salaries, leave entitlements, superannuation, workers compensation, fringe benefits and payroll tax.

Borrowing Costs

Borrowing costs cover the repayment of loans taken out to fund new assets.

Materials And Services

Raw materials such as sand and concrete, contractor and consultancy costs, audit services and legal fees are included in this expense.

Depreciation And Amortisation

Depreciation reduces the book value of assets as a result of wear and tear or age, with assets having to be replaced or renewed once they reach the end of their useful life. Amoritisation is similar to depreciation in that it lowers the book value over time, however it is applied to intangible assets.