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BUDGET AND DELIVERY
KEY REVENUE ASSUMPTIONS AND SOURCES
Rates and Annual Charges
Total revenue raised from the levying of land rates is capped by the State Government with the Independent Pricing and Regulatory Tribunal (IPART) developing a Local Government Cost Index (LGCI) for use in setting the maximum allowable increase in general income (i.e. the ‘rate peg’) for local government. The 2021-22 Budget allows for an increase of 2.0% incorporating a 0.2% allowance to cover Council election costs, representing the approved rate peg for the next financial year. Further, a Stormwater Levy is included in the Budget and is estimated to raise $240,000 in 2021-22 for allocation to important stormwater capital infrastructure initiatives. Rates and Annual Charges also include revenue associated with the Domestic Waste Service. A 2.0% increase has been applied for 2021-22 to cover increased contractor and recycling costs based on a full cost recovery determination.
Rating Categories
There are two categories of rates: Residential Business Council operates a base rating system whereby 50% of residential rate revenue is derived from a rate in the dollar (ad valorem) calculation based on all rateable land value within the Council area with the remaining 50% derived from a base rate which is calculated by dividing the remaining rate revenue by the number of assessable properties. The same system operates within the business category however the split is 60% ad valorem and 40% base rate.
Residential Business
Ratable Valuations 17,144,084,594 776,782,466 Number of Properties 12,840 602 Rate in $ 0.0005699 0.0015265 Base Amount 762 1,313 Total Income 19,554,550 1,976,093 Average Rate 1,522 3,282
Domestic Waste Management Service
The Domestic Waste Management Service is provided on a full cost recovery basis. A 2.0% increase is proposed for 2021-22. Residents have a choice of the following size bins/fee structure in 2021-22:
1 × 80 litre mobile garbage bin 1 × 120 litre mobile garbage bin 1 × 240 litre mobile garbage bin* *Available only to existing customers $379 $620 $1,298
The above rates include the following services for houses, with other arrangements being made for multi unit dwellings with shared services: Weekly waste collection Fortnightly glass and containers Fortnightly paper and cardboard Monthly green waste
Special Variations
Included in the rate revenue for Council’s budget detailed above is a special rate variation of 10.6% which was built permanently into the rate base from 1 July 2015. A full description of the works undertaken with income from this special variation will be published in Council’s Annual Report.
Pension Subsidy
Pensioners who hold a Pensioner Concession card and own and occupy rateable property in Mosman receive a mandatory rebate per annum on Rates and Domestic Waste Management up to a maximum of $250. Council also offers a voluntary rebate to Australian Service Veterans who do not qualify for a pensioner rate rebate up to a maximum of $125 per annum. This is applied against the Domestic Waste Charge.
Stormwater Levy
The Stormwater Levy will be continued with the following parameters: Residential Property: $25 per annum Residential Strata Property: $12.50 per annum Business Property: $25 per annum Business Strata Property: $5 per annum
Interest Charges
In 2021-22 interest charges on unpaid rates and charges will accrue on a daily basis at the rate of 7.0% per annum subject to ministerial direction.
Annual Fees and Charges
In accordance with Section 608 of the Local Government Act, 1993 and other relevant legislation, Council is authorised to charge and recover approved fees and charges for any service it provides. For 2021-22 these are included in the document entitled ‘2021-22 Schedule of Fees and Charges’. This document forms part of MOSPLAN, however is published separately from the Delivery Program and Operational Plan and is available for viewing on Council’s website. The fees and charges are generally intended to be imposed on the following services provided by Council: Supply of a product, service or commodity Provision of information Provision of a service in connection with the exercise of the Council’s regulatory functions, including receiving an application for approval, granting an approval, making an inspection and issuing a certificate Admission to any building or enclosure Use or benefit from Council’s assets, possessions, etc Mosman Council’s general policy in determining the amount of fees to be charged for goods and services considers the following factors: The cost of providing the service The importance of the service to the community Prices fixed by the relevant industry body/ies Any factors specified in the Local Government
Regulations Equity factors User pays principle Financial objectives Customer objectives Resource use objectives Impact of Taxation e.g. GST Market Prices Cross subsidisation objectives In cases where a fee and/or charge is determined by legislation or other regulatory bodies, Council’s policy is not to determine an amount that is inconsistent with any fee or charge so determined. All Council’s fees and charges not subject to statutory control are reviewed on an annual basis prior to finalisation of Council’s Budget. However, in special circumstances, fees and charges can be reviewed and approved by Council at other times, subject to any relevant legislative requirements. As per Australian Taxation Office guidelines, all fees and charges continue to be reviewed to assess for the impact of the GST.
User Charges and Fees
Council’s user charges are diverse and include items such as planning and regulatory revenues, community services functions, property rentals, parking fees and engineering services.
The Pricing Policy sets out specific fee structures. It is important that Council remains competitive in the marketplace and the current inflation rate is the mechanism which drives the pricing structure. Fees have not generally been increased in the 2021-22 Budget. A small number of fees have been reduced, some hire fees rationalised to reflect actual use. A minor increase in meal fees has been applied to cover specific cost increases faced by the service. Significant components of this allocation include:
On Street Parking The Esplanade Restorations 1,660,000 673,200
Foreshore Car Parking - Balmoral Development Application 620,000 607,000
Foreshore Car Parking - Spit West
475,000 Foreshore Car Parking - Annual Permits 380,000 Foreshore Car Parking - Clifton Gardens 306,000 Work Zone 200,000 On Street Parking Bradleys Head Rd 200,000 Default 168,600 On Street Parking Botanic Road 163,000 Stand Plant on Roadway Permits 150,000 On Street Parking Parriwi Rd/Spit Rd 130,000 Bank Charges 110,000 Foreshore Car Parking - Spit East 109,000 Additional Household Cleanups 102,000 On Street Parking Hunter Rd 102,000 Mosman Meals 94,900 Section 10.7 Certificates 80,000 On Street Parking McLean Crescent 76,000
Interest and Investment Revenue
The return on Council’s short term investments has been heavily influenced by market interest rates in recent times. The 2021-22 Budget is based on a rate of return of 0.3%.
Other Revenues
This item largely contains fines revenue. This allocation includes:
Fines - Car Parking Fines - Other
$
3,060,000 32,200
Rental Income
The leasing of Investment Properties which include sites such as the Mosman Square Shops, Library Walk Shops and Flats, Balmoral Bathers Pavilion and Boronia House. The following sources will provide funding in 2021-22:
Commercial Property Leases Venue Hire, Equipment and Other
$
3,450,400 1,952,300
Grants and Contributions for Operating Purposes
Operating grants play a significant role in shoring up Council’s contribution to the many services it provides. The largest single component is the general component of the Financial Assistance Grant which it receives via the Commonwealth and is $660,000 in 2021-22 Community services such as Aged Services also receive grant funding. The following sources will provide funding in 2021-22:
Finance Management Property Administration Community Care Roads Library Services Street Lighting Arts Programming and Exhibitions Environmental Sustainability Ranger Operations
$
690,000 650,000 553,500 548,700 132,000 100,000 86,700 64,000 40,000
Grants and Contributions for Capital Purposes
The 2021-22 Budget provides for capital funding particularly that sourced from Roads and Maritime Services. However, as capital grants are very much project based they are not relied upon as a recurrent source within the Delivery Program. The Delivery Program provides for Developer Contributions of $1,200,000 in 2021-22, with indexed Roads to Recovery funding sourced from the Commonwealth.
Open Space Footpaths Property Administration Roads Stormwater Drainage
$
1,424,000 1,259,000 1,200,000 78,000 50,000
Loan Borrowing
Council proposes to borrow $3m to part fund the Capital Works Program.
KEY EXPENSES ASSUMPTIONS AND ALLOCATIONS
Employee Benefits and On-Costs
In accordance with the Local Government State Award, effective from 1 July 2021 an increase of 2.0% has been provided in the Budget for salaries in 2021-22 together with an allowance for step increases. To help Australians be more self-sufficient in retirement, the Federal Government in its 2010-2011 Budget announced a staged increase in the Superannuation Guarantee (SG) effective from 2013-14. The latest revision to the superannuation timetable means that the SG will be 10% for 2021-22, and increase to 12% by 1 July 2025. The associated costs have been included in Council’s 2021-22 budget.
Borrowing Costs
All costs associated with Council’s existing borrowing requirements have been included within the 2021-22 Budget.
Materials and Services
Mosman is a ‘contracting Council’ in that all of its key service contracts such as Waste, Street and Gutter Cleaning, Beach and Reserve Cleaning, Amenity and Building Cleaning and Engineering/Open Space contracts are provided at market rates by external contractors. These contracts are indexed by the annual movement in the Sydney All Groups CPI as all are schedule of rate contracts and for 2021-22 budgets however, are not indexed in anticipation of a low CPI environment and efficiency dividends. Significant allocations include:
Contractors - Operational Contractors - Waste Management Contractors - Maintenance & Repair IT-Maintenance & Licence Agreements Contractors - Cleansing Insurance Premiums Utilities - Electricity Large Sites Contractors - Maintenance State Debt Recovery Office Charges Contractors - Other Election Expenses Operating Leases - Photocopiers Contractors-Other Professional Utilities - Water Subscriptions Bank Charges - Merchant Fees Annual Management Fee Equipment Maintenance - Other Training & Development Publicity & Promotion Members Fees Utilities - Electricity Printing & Stationery Materials - Other Advertising
$
4,726,400 3,586,000 1,840,500 1,375,100 1,044,000 668,800 448,100 426,000 402,800 377,700 306,000 280,500 259,300 206,500 203,200 180,000 178,000 158,900 157,200 142,700 137,200 134,000 121,100 118,600 100,900
Depreciation and Amortisation
The depreciation expense has been aligned with the reported 2019-20 Financial Statements. As Council invests more funds on assets, depreciation increases. All asset classes are booked in the Balance Sheet at fair value.
Other Expenses
This item contains significant expenditure such as contributions to other organisations (Shorelink, NSROC) and provision for bad debts. The 2021-22 budget allocations are not indexed in anticipation of a low CPI environment and efficiency dividends.
Core elements include:
Bad & Doubtful Debts Contributions & Levies - Other Organisat Sundry Expenses
$
265,200 176,100 148,000
State Government Levies
Council contributes significant funds to the State Government including:
Fire and Emergency Services Levy S88 Waste Levy Contribution - Department of Planning Valuation Fees - Valuer General
$
1,027,000 900,000 180,000 60,000
OUTCOMES
Income Statements, Balance Sheets and Cash Flow Statements for the years 2018-19 to 2021-22 are included on the following pages The infrastructure outcomes for the years 2020-21 and 2021–22 are also included on pp 146-150.
Income Statement
Income ($)
Rates & Annual Charges User Fees & Charges Other Income Grants & Contributions for Operating Purposes Interest & Investment Revenue Fair Value Increment Rental Income Net Share of Interest in Joint Ventures
Total Income
Expenditure ($)
Employee Costs Materials & Services Legal Costs Consultants Borrowing Costs Depreciation & Amortisation Other Expenses State Government Levies Net Loss from Disposal of Assets
Total Expenditure
Operating Result before Capital Grants & Contributions
Actual 19-20
Revised 20-21 Budget
Draft 21-22 Budget
27,458,446 28,310,000 28,823,100 7,978,750 7,384,200 7,663,300 2,553,899 3,113,700 3,214,700 3,177,138 2,947,190 2,866,700 286,250 103,000 86,000 1,577,587 0 0 4,300,824 4,607,700 5,402,700 107,507 50,000 51,000
47,440,401 46,515,790 48,107,500
Actual 19-20
Revised 20-21 Budget
Draft 21-22 Budget
18,535,984 17,712,200 19,186,500 16,703,037 18,701,490 18,662,800 499,760 615,400 520,000 110,368 212,800 188,100 401,289 294,000 198,000 5,734,980 5,701,200 5,630,400 2,401,654 729,200 741,400 1,106,188 2,039,700 2,167,000 500,387 200,000 500,000
45,993,646 46,205,990 47,794,200
1,446,755 309,800 313,300
Income Statement by Strategic Direction
Income ($)
Caring & Inclusive Community Culturally Rich & Vibrant Community Attractive & Sustainable Environment
Actual 19-20
Revised 20-21 Budget
Draft 21-22 Budget
1,591,203 772,800 794,800 549,061 904,390 796,100 6,973,065 7,291,100 7,427,600 Informed & Engaged Community 0 0 0 Business Friendly Community with Sound Independent Civic Leadership 22,714,286 23,025,100 23,313,800 Well Designed Liveable & Accessible Places 15,493,953 14,413,400 15,664,100 Healthy & Active Village Lifestyle 118,834 109,000 111,100
Total Income 47,440,401 46,515,790 48,107,500
Expenditure ($)
Caring & Inclusive Community Culturally Rich & Vibrant Community Attractive & Sustainable Environment
Actual 19-20
Revised 20-21 Budget
Draft 21-22 Budget
2,965,239 2,198,150 2,304,400 4,130,435 4,385,840 4,541,700 7,822,640 7,638,300 7,671,400 Informed & Engaged Community 850,160 1,011,900 969,100 Business Friendly Community with Sound Independant Civic Leadership 11,460,934 11,545,400 12,611,300 Well Designed Liveable & Accessible Places 12,784,111 13,287,100 13,433,900 Healthy & Active Village Lifestyle 5,980,127 6,139,300 6,262,400
Total Expenditure
Operating Result before Capital Grants & Contributions 45,993,646 46,205,990 47,794,200
1,446,755 309,800 313,300
Financial Ratios
Ratio
Operating Performance Ratio Own Source Operating Revenue Ratio Unrestricted Current Ratio Debt Service Cover Ratio Rates, Annual Charges, Interest & Extra Charges Outstanding Percentage Cash Expense Cover Ratio Building & Infrastructure Renewals Ratio Infrastructure Backlog Ratio Asset Maintenance Ratio
Actual 19-20
0.57%
Revised 20-21 Budget
0.99%
Draft 21-22 Budget
1.59%
89.53% 1.38 2.94 3.90% 91.18% 86.22% 1.37 1.29
3.40 4.56
4.05% 4.05%
3.55 2.99
2.89 126.70% 101.93% 170.21% 0.52% 0.00% 0.00%
120% 100% 100%
Balance Sheet
Assets ($)
Current Assets Cash & Cash Equivalents Investments Receivables Inventories Contract assets Contract cost assets Other Non-current assets classified as "held for sale" Total Current Assets
Non-Current Assets Receivables Inventories Contract assets Contract cost assets Infrastructure, Property, Plant & Equipment Investment Property Intangible Assets Right of use assets Investments Accounted for using the equity method Non-current assets classified as "held for sale" Other Total Non-Current Assets
TOTAL ASSETS
Actual 19-20
Revised 20-21 Budget Draft 21-22 Budget
12,626,000 9,478,563 9,219,535 1,000,000 1,000,000 1,000,000 2,627,000 4,396,449 4,438,943 225,000 151,657 144,441 39,000 39,000 39,000
- - 77,794 77,493
- 16,517,000 15,143,464 14,919,413
258,000 261,087 266,932
- 492,631,000 494,272,656 502,243,056 50,520,000 50,520,000 50,520,000 219,000 219,000 219,000 1,065,000 1,065,000 1,065,000 1,206,000 1,256,000 1,307,000
- 545,899,000 547,593,743 555,620,988
562,416,000 562,737,207 570,540,401
Balance Sheet
Liabilities ($)
Current Liabilities Bank Overdraft Payables Income received in advance Contract liabilities Lease liabilities Borrowings Provisions Liabilities associated with assets classified as "held for sale" Total Current Liabilities
Non-Current Liabilities Payables Income received in advance Contract liabilities Lease liabilities Borrowings Provisions Investments Accounted for using the equity method Liabilities associated with assets classified as "held for sale" Total Non-Current Liabilities
TOTAL LIABILITIES
Net Assets
Equity ($)
Retained Earnings Revaluation Reserves Other Reserves Council Equity Interest Non-controlling equity interests Total Equity
Actual 19-20
Revised 20-21 Budget Draft 21-22 Budget
- 11,531,000 11,694,651 12,478,798
- 779,000 825,999 1,046,947 95,000 - 1,518,000 1,248,000 1,302,000 4,595,000 4,832,850 5,293,140
- 18,518,000 18,601,501 20,120,884
- 983,000 1,078,000 1,078,000 5,131,000 3,797,000 5,495,000 273,000 278,350 304,860
- 6,387,000 5,153,350 6,877,860
24,905,000 23,754,851 26,998,744
537,511,000 538,982,356 543,541,657
Actual 19-20
Revised 20-21 Budget
Draft 21-22 Budget
273,467,000 274,938,356 279,497,657 264,044,000 264,044,000 264,044,000
- 537,511,000 538,982,356 543,541,657
- 537,511,000 538,982,356 543,541,657
Cash Flow Statement
Cash Flows from Operating Activities ($)
Receipts: Rates & Annual Charges User Charges & Fees Investment & Interest Revenue Received Grants & Contributions Bonds & Deposits Received Other
Payments: Employee Benefits & On-Costs Materials & Contracts Borrowing Costs Bonds & Deposits Refunded Other
Net Cash provided (or used in) Operating Activities
Cash Flows from Investing Activities ($)
Receipts: Sale of Investment Securities Sale of Investment Property Sale of Real Estate Assets Sale of Infrastructure, Property, Plant & Equipment Sale of non-current assets classified as "held for sale" Sale of Intangible Assets Sale of Interests in Joint Ventures & Associates Sale of Disposal Groups Deferred Debtors Receipts Distributions Received from Joint Ventures & Associates Other Investing Activity Receipts
Actual 19-20
Revised 20-21 Budget Draft 21-22 Budget
27,485,000 28,470,884 28,718,533 9,658,000 9,716,894 10,971,262 288,000 88,578 90,124 4,566,000 4,177,624 7,102,258 2,187,000 - 8,342,000 3,799,354 5,602,889
(18,476,000) (17,741,539) (18,950,192) (15,407,000) (15,349,226) (14,361,007) (377,000) (323,913) (187,204) (2,187,000) - (7,897,000) (7,041,962) (7,658,267)
8,182,000 5,796,693 11,328,395
Actual 19-20
31,000,000
Revised 20-21 Budget Draft 21-22 Budget
Cash Flow Statement
Cash Flows from Investing Activities ($)
Payments: Purchase of Investment Securities Purchase of Investment Property Purchase of Infrastructure, Property, Plant & Equipment Purchase of Real Estate Assets Purchase of Intangible Assets Purchase of Interests in Joint Ventures & Associates Deferred Debtors & Advances Made Contributions Paid to Joint Ventures & Associates Other Investing Activity Payments
Net Cash provided (or used in) Investing Activities
Cash Flows from Financing Activities ($)
Receipts: Proceeds from Borrowings & Advances Proceeds from Finance Leases Other Financing Activity Receipts
Payments: Repayment of Borrowings & Advances Repayment of lease liabilities (principal repayments) Distributions to non-controlling interests Other Financing Activity Payments
Net Cash Flow provided (used in) Financing Activities Net Increase/(Decrease) in Cash & Cash Equivalents plus: Cash & Cash Equivalents - beginning of year
Cash & Cash Equivalents - end of the year Investments - end of the year Cash, Cash Equivalents & Investments - end of the year
Representing ($)
- External Restrictions - Internal Restricitons* - Unrestricted
*Includes Mosman Library Precinct Reserve.
Actual 19-20
Revised 20-21 Budget Draft 21-22 Budget
(29,000,000) (97,000)
- (7,542,000) (7,340,130) (13,339,422)
(5,639,000) (7,340,130) (13,339,422)
Actual 19-20
Revised 20-21 Budget Draft 21-22 Budget
- 3,000,000
(1,705,000) (1,604,000) (1,248,000) (73,000)
(1,778,000) (1,604,000) 1,752,000 765,000 (3,147,437) (259,028) 11,861,000 12,626,000 9,478,563
12,626,000 9,478,563 9,219,535 1,000,000 1,000,000 1,000,000 13,626,000 10,478,563 10,219,535
Actual 19-20
Revised 20-21 Budget
Draft 21-22 Budget
4,296,000 3,229,000 1,948,600 6,290,000 5,265,900 6,421,800 3,040,000 1,983,663 1,849,135 13,626,000 10,478,563 10,219,535
CAPITAL WORKS PROGRAM
Work programs have been developed for each asset class managed by Council. These work programs have been prepared with the best information currently available and are an indication only. The overall Capital Works Program is funded from general revenue, grants, loan funding and further funds sourced through Council’s Developer Contributions Plan.
Council has also made an initial provision for future capital works of $500,000 for the Mosman Library Precinct Reserve.
Current work schedules are based on Asset Management Plans and Council priorities, with funding based on the Long Term Financial Plan and Council’s annual budget. Programs are subject to change depending on new priorities, emerging works, emergency works, Council priorities and new funding sources such as grants. The table on page 147 details the Capital Works Program for the periods 2020-21 and 2021-22. Further details of the 2021-22 Capital Works Program are provided on pages 148-150.
