Securing our Future - important information about your Council rates and services

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Council is considering making an application to the Independent Pricing and …

Council is considering making an application to the Independent Pricing and
Regulatory Tribunal (IPART) for a special rate variation to secure the funding our City and community will need for future works and services.

Our aim is to provide the best possible services to our community while remaining financially sustainable into the future.

This booklet explains three funding options Council has developed in consultation with the community.

We’re inviting you to find out about each option, and tell us which one you prefer at http://haveyoursaylakemac.com.au/securingourfuture

  • Full Name Full Name Comment goes here.
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  • From my experience rate rises are not the answer to guiding the future for Lake Macquarie. Forward planning and staying with such a plan with the intentions of the plan listed in black and white.Inflation and private pressure on Council Services are the main reasons for unsustainable costs to ratepayers..An acceptance by the councilors and the council officers of the restraint necessary to avoid making hasty and expensive recommendations and a public overview of such decisions be mandatory for the Mayor Doug Pitcairn
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  • what will be different in the next seven years compared to the last 20years if rate increase is approved.
    Rates have increased on average 7.57% per year over 20 years whilst domestic waste charge has increased on average 18.73% per year over the last 20 years , also what will be the increase on domestic waste when the three bins are introduced.These are averages only as yearly increases are greater or less per year.
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  • Increasing rates AND increasing services is the only way to achieve the improvements that so many people think should be available to the residents of this Lake City.
    The increase is surprisingly small to do so, and surely ratepayers can meet the increase proposed.
    We all would like to see 'improvement' and I, for one, would feel it worthwhile !
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  • 1. We’ve listened.Now it’s time for you to tell usyour preferred funding option. Important information about your Council rates and services.Contact Us Lake Macquarie City Council phone: 02 4921 0333 fax: 02 4958 7257 web: www.lakemac.com.au email: council@lakemac.nsw.gov.au post: Box 1906 HRMC NSW 2310 Designed by Lakemac Print.
  • 2. MAYOR’S RECENT INTRODUCTION ACHIEVEMENTS Council is considering Lake Macquarie City Council achieved 83% making an application to of its Operational Plan targets last financial the Independent Pricing and year (2010/2011), with major highlights being Regulatory Tribunal (IPART) environmental works on 26 sites around the for a special rate variation to City, completion of the Fernleigh Track to secure the funding our City Belmont, and receiving a national award for and community will need for climate change adaptation programs. future works and services. The final stages of the Fernleigh Track officially opened Our aim is to provide the best possible services to our in April, and the 15km route now links Adamstown community while remaining financially sustainable into to Belmont. It has become one of the region’s most the future. popular shared pathways. Council has managed to balance its budget for many Council was named 1 of 6 Climate Change Adaptation years, but with each passing year this has become Champions from around Australia for the steps we increasingly difficult. It is clear that ‘business as usual’ is have taken to prepare for the impact of climate change. no longer an option and that we need to change the way Since 2007, Council has actively researched and taken we fund our assets and services, or go down the path of action to adapt to predicted changes, with a priority on making some serious cuts. the effects of sea level rise and increased flooding. Families are taking advantage of the now complete Council undertakes extensive community consultation Lake Macquarie Variety Playground, which boasts a each year as we develop our operational plans flying fox, climbing structure, amenities building, and and delivery programs. We have undertaken more cafe. The playground has special features for children consultation in 2011 as we look to confirm which with disabilities, and continues to be one of the most services you value the most, and try to strike the right loved attractions in our City. balance between the services you want and those you are willing to pay for through your rates. Many people attended the series of Securing our Future community workshops held in July, joined our online forum, and used our budget allocator tool over recent months. Most participants were reluctant to see cuts to services or the sale of Council assets to fund budget shortfalls. Indeed, many indicated they would be happy to see an increase in rates to maintain or improve the services and assets they value, so long as the increase was reasonable. Based on this feedback, Council has developed three funding options to present to the community for consideration. Lake Macquarie’s biggest and best skate park is also These options, explained on pages 6-13, have been proving very popular. The new park in Chapman Oval, based on community priorities identified through the Swansea, was officially opened in March. The 60m Securing our Future consultation. The options also long skate park was designed in collaboration with respond to the community’s vision as reflected in our local users. 10 Year Community Plan. Council’s inaugural Living Smart Festival attracted a crowd of 8,000 to Speers Point Park last year. The We are asking you to tell us which of these three options event is an educational and inspirational celebration of you prefer. We will use the results of feedback from the sustainable living through music, dance, performance, community to determine the level of rate increase we will workshops, art, fashion, and food. This year’s event will seek from IPART. The final decision on whether Council be held on Saturday 19 November and will feature the can increase its rate income will be made by IPART in Hunter Valley Electric Vehicle Show. June next year. I urge you to take the time to read the information contained in this brochure and tell us your preferred option. Your feedback will have an effect on the future of Lake Macquarie City Council recently Council and the City of Lake Macquarie. won a Local Government Award for Excellence in Financial Reporting for Councillor Greg Piper the presentation of our 2009/2010 Mayor of Lake Macquarie Financial Statements.2
  • 3. WHAT YOU NEED TO KNOWPeople who live in Lake Macquarie value a quality lifestyle, This booklet explains three funding options Council hasbased around our beautiful lake, coastline, and bushland. developed in consultation with the community.For Council, delivering this quality of life comes downto maintaining and improving our assets – our natural Option 1:environment, as well as our community infrastructure – Reduce Services – Maintain Ratesour roads and cycleways, sporting and cultural facilities,parks and playgrounds, and vibrant town centres. Option 2:This vision is captured in our 10 Year Community Plan, Maintain Services – Increase Rateswhich sets out our shared goals and aspirations forthe future. Option 3:While we are committed to this vision, like many othercouncils in NSW we face financial pressures. Rising costs Improve Services – Increase Ratesand limits to our income mean that without securingadditional funds, Council can no longer deliver the services We’re inviting you to find out about each option,and infrastructure our community needs and expects. and tell us which one you prefer.WHAT WE ARE ASKING YOU TO DO Find out why Council is looking to increase rates see page 4 STEP 1 Find out about the financial challenges facing Lake Macquarie, and why Council is seeking feedback on a rate increase now. Read about what Council has been doing to improve our financial situation and reduce the burden on ratepayers. We explain how our rates and other fees and charges work, and how they compare to those of similar NSW councils. Understand the three funding options see page 6 STEP 2 Read about the three options and what they mean for you. You can use our calculation tables to understand how each option will impact on your rates. Tell us your preferred option see page 16 STEP 3 Once you’ve decided which option you think is best, tell us! See the back page of this booklet for details of how to register your choice by post, online, or at one of our community forums in November.Important information about your Council rates and services 3
  • 4. OUR CURRENT SITUATION In past years, Council has consistently delivered balanced WHAT IS RATE PEGGING? budgets. However, cost increases have meant we have Rate pegging is the percentage limit by which all had to draw on the City’s asset replacement reserves to councils in NSW may increase the total income they achieve this result. The reality is, our operating deficit will will receive from rates. The rate peg is set annually by continue to increase in years to come unless changes can the Independent Pricing and Regulatory Tribunal of be made. If things stay the same, a $132M budget deficit NSW (IPART). The rate peg amount for the 2011/12 is projected over the next 7 years. financial year is 2.8%. Current economic and legislative conditions – rate pegging, cost shifting from other levels of government, and increasing ratepayers. This includes establishing LakeMac Enterprises, costs – have all restricted our ability to meet existing and which has a strong focus on providing services to other emerging community priorities from current income. NSW councils. It is anticipated that LakeMac Enterprises Council has an extensive asset base, valued at over $2 can generate in excess of $1M for Lake Macquarie City billion. Most of this is infrastructure used for the delivery of Council within 5 years. services for the community, including roads, bridges, drains, buildings, and parks. These assets deteriorate over time Why is Council looking to and eventually require replacement. As Council has not had increase rates now? sufficient funds to maintain and replace its infrastructure, a To achieve financial sustainability and manage the backlog of works has built up. The current estimated cost to community’s infrastructure, we either need to increase bring the infrastructure up to a satisfactory standard is $67M. our income by increasing rates, or reduce our expenditure Deteriorating infrastructure is a major issue for local by decreasing the level of services we provide to our government across Australia. In 2006, the total community. infrastructure backlog for all NSW councils was estimated at If NSW councils want to increase rates beyond the rate $6.3 billion. peg amount they have to apply to IPART for a special rate Faced with these challenges, Council has first looked at variation, and in doing so must demonstrate extensive ways to save money and increase income. consultation and significant support from the community. Securing our Future is a 6-month consultation process How do we know Council is efficient? Council is conducting with a view to making an application Council commenced a comprehensive Service Review in to IPART in 2012. Applications close on 24 February 2012 2009, which demonstrated that our operations are already for rate increases commencing in the 2012/13 financial year. lean. This analysis is supported by the Division of Local Government’s comparative data, which shows that our You can find out more about Council’s financial expenses per capita from continuing operations are below management by visiting www.haveyoursaylakemac. the average for NSW councils. com.au/securingourfuture and downloading our information sheets on Services, Revenue and Expenditure, Council made approximately $4M in savings and Sustainability, Efficiency and Enterprise, and Assets. improvements across the organisation as a result of the review. By changing our purchasing practices we saved $2.4M. The total benefit of the service review is estimated to be $10M to $14M, achieved through efficiencies, savings, HOW OUR and additional income. RATES COMPARE 2009/2010 AVERAGE EMPLOYEE COST PER CAPITA Our rate revenue per capita is low in comparison to similar $700 NSW councils. This is despite having a larger population to $600 service than most of our comparable councils except for Wollongong, whose rates are much higher. $500 $400 $300 $642 $642 $527 $527 $540 $540 $473 2009/2010 TOTAL RATE REVENUE PER CAPITA $473 $200 $438 $438 $384 $384 $100 $0 $600 e ffs as tle aven eed gong Lak arie $500 Co our wc oalh Tw llon rb Ne Sh Wo cqu $400 Ha Ma $300 $534 $534 $531 $531 Group 5 Councils $200 $383 $383 $451 $451 $441 $441 $371 $371 $100 *Note: Group 5 is a collection of councils throughout NSW – they are deemed $0 comparable as regional councils, part of an urban centre with a population over n ng e ffs Co our ast le ave eed ngo Lak arie 70,000, and predominantly urban in nature, as determined by the Division of wc oalh Tw llo cqu rb Ne Sh Wo Ma Local Government. Ha Group 5 Councils What is being done to develop Source for tables above and left: Division of Local Government, Comparative new income streams? Information on NSW Local Government Councils 09/10 - DLG Snapshot of NSW Councils. Council is developing a range of entrepreneurial activities Australian Bureau of Statistics, Population Estimates by Local Government Area, to generate additional revenue and reduce the burden on 2001 to 2010.4
  • 5. HOW OUR RATES COMPARE 2009/2010 2009/2010 RESIDENTIAL - AVERAGE RATE PER ASSESSMENT BUSINESS - AVERAGE RATE PER ASSESSMENT ffs ave n ed ng e Co our ast le Tw e ngo Lak arie rb wc oalh llo cqu Ha Ne Sh Wo Ma ffs le n ed ng e Co our ast ave e Lak arie wc oalh Tw ngo Ha rb Ne Sh Wo llo cqu Ma Group 5 Councils Group 5 CouncilsDivision of Local Government analysis shows that while our Keeping our business rates at an affordable level is anresidential rates are below average in comparison with the five important way that Council supports local enterprisecouncils we are grouped with, our business rates are much and encourages employment close to the places welower. In fact, they fall well below the NSW State average. live. However, this analysis indicates an argument for a reasonable increase to bring Lake Macquarie’s businessSource: Division of Local Government, Comparative Information on NSWLocal Government Councils 09/10 - DLG Snapshot of NSW Councils. rates in line with the average business rates for ourAustralian Bureau of Statistics, Population Estimates by Local Government Area, comparable councils.2001 to 2010.HOW OUR RATES WORK Sustainability Levy Currently the ordinary rate includes a special variation knownCouncil rates are determined in accordance with the as the Sustainability Levy. This Levy was introduced in Julyprovisions of the Local Government Act 1993. This legislation 2009 to fund environmental projects, including continuationprovides the mechanisms to calculate rates and limits the of lake water quality improvement works. The Levy finishesincome councils can derive from rates. in 2014. See page 14 for further detail.Each property in Lake Macquarie falls into 1 of 4 categories Domestic Waste Management Chargefor rating purposes depending on the land use of theproperty. The domestic waste management charge is an annual charge for waste services that is listed as a separate amountThese categories are residential, business, farmland, and on your residential or farmland rates notice.mining. Council decides which category your property shouldbe in based on its land use. It includes a levy charged by the state government. Most NSW councils have to pay the levy, which they thenRates are calculated annually, and include the ordinary rate have to pass on to ratepayers on a fee for service basis.and annual charges. The ordinary rate includes a flat base Councils are not permitted to make a profit or loss.amount, plus an ad valorem amount, which is based onthe value of your land. The ordinary rate also includes the In 2011/12 this charge is $349.00 for Lake Macquarie.Sustainability Levy. For this, residents get a weekly kerbside collection, a fortnightly recycling collection, bi-annual bulk wasteLand valuation is conducted every 3 years by the NSW Valuer collections, eWaste drop offs, and clean-out services forGeneral. The land value does not include the value of your the disposal of chemicals, sharps and oils. Awaba Wastehouse, buildings, or other improvements to the land. Council Management Facility is also partly funded through thisuses this figure to calculate the ad valorem amount to reflect charge. In 2012/13 the charge will be $370.50.any changes in the value of your land. RATE CATEGORIES ORDINARY RATE (includes Sustainability Levy) Residential Business Farmland Mining Base Amount A flat rate that applies to all rateable properties. In 2011/12 this is $475.06 per ✓ ✓ ✓ ✓ residential property. Ad Valorem (land value) A variable rate based on the value of your land. In 2011/12 for a residential ✓ ✓ ✓ ✓ property with a land value of $210,500, this is $474.90. ANNUAL CHARGES Residential Business Farmland Mining Domestic Waste A flat rate calculated annually on a cost recovery basis. In 2011/12 this is ✓ ✗ ✓ ✗ Management Charge $349.50 per property. In 2012/13 this will be $370.50. Commercial Waste Charge A flat rate calculated annually. In 2011/12 this is $320.00 per property. ✗ ✓ ✗ ✓ In 2012/13 this will be $362.00.Some properties not on mains sewerage may also pay an effluent removal charge.For more information about our rates and charges, and how they are calculated, visit www.lakemac.com.au/council/ratesImportant information about your Council rates and services 5
  • 6. Option 1: Reduce Services – Maintain Rates Average residential and business rate increase each year over 7 years: 3% rate cap only. 3% is the expected rate cap to be set annually by IPART. If the actual percentage set by IPART is lower in the 7 years, then further reductions in spending will be required. This option will see a dramatic difference in community infrastructure and services over the next 7 years. With income restricted by the rate peg, Council will need to make some big changes to meet rising costs and achieve a balanced budget. Reduction in maintenance of our City’s Reduction in environmental programs assets and infrastructure and works $20.8M will be saved over 7 years through a major The Sustainability Levy will not be extended beyond 2014. reduction in city infrastructure maintenance. Without As a result there could be a decline in the quality of our regular maintenance, the quality of our infrastructure and lake, coastline, and bushland. Vegetation maintenance environment will decline over time, and more expensive programs for our foreshore reserves and for bushfire reactive and emergency work may be needed. management will be affected. Environmental works and programs, such as lake water quality programs, will reduce Consequences could include: significantly, as will programs to minimise pollution, waste • Longer response times for requests for graffiti removal, generation, and resource consumption. tree lopping, and vandalism repairs. • Less frequent mowing, weed removal and spraying, Closure of major community facilities gutter cleaning, and litter collection. This would result in a To save money, Council will need to close a number of reduction in standards for users. For example, the grass in major facilities. In 2012/13 the Lake Macquarie Performing our parks and playing fields could be longer. Our wetlands Arts Centre and 2 pools will close. One pool will be put could also become choked with weeds and litter. out to contract for management. Libraries will be open for • Safety and environmental hazards may increase, for reduced hours initially, then 5 libraries will close between example trip hazards, unsafe trees, bushfire hazards, and 2013/14 and 2014/15. This will save $24M over 7 years. soil erosion. Reduced construction and maintenance of Roads and drainage works reduced footpaths, cycleways, and traffic facilities Our construction program for new footpaths, cycleways, and traffic facilities will reduce by $4M over the 7 years. In addition, no new boat ramps or jetties will be constructed, saving $2.3M over 7 years. Reductions in service levels across the City and loss of 123 Council staff Staffing reductions across all areas of Council will occur, With $24.1M less budgeted for roadworks, such as kerb saving $42.6M over 7 years. With reduced staffing, and guttering and resealing, the quality of our roads will response times for service requests and turnaround times decline to a ‘fair’ condition within 10 years. for processing development applications will be longer. The budget for replacement of failed drainage systems and flood mitigation measures will reduce by $3.9M over 7 years. This will make it harder for our drainage system to cope with major flooding events.6
  • 7. The Economic Development Department would be Limited new capital projectsdisbanded, including closure of the Visitor Information New capital expenditure over the 7 years will be limitedCentre at Swansea. One staff position would be created to $240M. While Glendale Transport Interchange andto assist employment generating development proponents the Lake Macquarie Waste Strategy will be funded, townwith site identification and approval processes, with a centre upgrades for Cardiff, Charlestown, Belmont, Torontosecond position created to assist in facilitating events that Morisset, Warners Bay, Glendale, Swansea and Mountattract visitors to the City. This would effectively reduce Hutton will not go ahead under Option 1.staffing for Economic Development from 7.4 to 2 full timeequivalent staff. Financial OutcomesUnder Option 1 only about 77% (8,500 of the 11,000) Council will continue to experience an operating deficit overservice requests we receive each year will be completed. the 7-year period. The current $15.8M operating deficitRequests that will be delayed or not carried out include would reduce to $8.5M by 2018/19. Council’s maintenancefootpath repairs, road patching, and graffiti removal. and infrastructure backlog will increase significantly. Option 2: Maintain Services – Increase Rates 7.7% average residential rate increase each year (including 3% rate cap) 9.9% average business rate increase each year (including 3% rate cap)This option will see Council services stay largely the same as they are now, with minimalimprovements or upgrades. However, the increase in income will not be enough tomaintain the condition of all our City assets and infrastructure, and the quality of our roadswill continue to decline, then hold in the ‘good’ range.Funding maintained for maintenance of Drainage maintainedour City’s assets and infrastructure Current funding for replacement of failed drainage will beUnder this option, the maintenance of the City’s maintained, enabling Council to replace approximately 30%infrastructure will continue to be funded at current levels for of drainage that fails.the next 3 years. Environmental programs andIn 2015/16 the annual maintenance program will increase byapproximately $1.5M per year until 2018/19. This will add works maintaineda total of $6M to infrastructure maintenance over the next7 years. This increased spending will only keep pace withinflation and an increase in the number of assets we haveto maintain. Requests for footpath repairs, road patching,weed removal, plumbing repairs, and signage replacementcan continue to be responded to in a timely manner.Road condition declinesOption 2 does not provide funds to stop the declining Sustainability works and programs will continue beyondquality of our roads. Although an additional $16M will be 2014/15, when the Sustainability Levy finishes. Continuingallocated over 7 years, this funding will only keep pace with programs include bushland and foreshore rehabilitationrising cost increases. This means that the average condition projects, and lake water quality improvement programs.of our roads will continue to decline for the next few years, See page 14 for details.but will then hold in the ‘good’ range.Important information about your Council rates and services 7
  • 8. Community facilities remain open With the right levels of staff, we intend to maintain our Rate increases under Option 2 will allow Council to keep the current turnaround times for processing development Lake Macquarie Performing Arts Centre and pools open. applications. Libraries will remain open in the short term; however, In addition, Ranger staffing will be increased, including funding levels have been set at the same amount as weekend shifts and after hours services. Additional Ranger 2011/2012 budget. This means that as costs increase patrols on weekends will improve response times to over time, levels of service and stock will need to decrease requests, and patrols and enforcement activities will be to ensure the service can be provided within the budget increased during normal hours. The community will benefit available. Consequently, reductions in opening hours, staff, from increased monitoring and enforcement of public health book stock, and service points will be considered. and environmental standards. Lake Macquarie Art Gallery will have all internal lights changed to meet new environmental legislation at a cost of $82,150. Sporting and recreation facilities – minimal improvements Our pools will not be upgraded to standards reflected in Council’s Pool Service Delivery Model. For example, the proposed water play zone at Speers Point will not be delivered under Option 2. New capital projects Our pools will have resuscitation equipment and disability Total new capital expenditure over the 7 years will be hoists upgraded at a cost of $140,200 over 7 years. $269M. Town centres will not be upgraded under Option 2. The Glendale Transport Interchange and the Lake Current staffing levels maintained and Macquarie Waste Strategy will be funded. frontline staff increased While Council will continue to find efficiencies in the way Financial we operate, current levels of staff will be maintained across Council will continue to experience an operating deficit all areas of Council. Maintaining staff levels means we until 2016/17, with an expected surplus of up to $5M in can continue to respond in a timely manner to the 11,000 2018/19. The City’s infrastructure backlog of $67M will maintenance requests we receive each year. only be partially addressed. Increased funding for roads, for Current Economic Development staffing will be retained. example, only maintains roads at a ‘good’ condition in the future due to increasing costs. RATING THE CONDITION OF OUR ROADS The following index is provided to assist in describing the condition of our roads: 1. Excellent condition 4. Fair No surface defects, smooth surface. Rough surface, major cracking. Significant renewal/upgrade required. 2. Very good Minor cracking. 5. Poor Minor maintenance required. Extensive surface and structural failure. Requires replacement or removal. 3. Good Noticeable cracking, surface defects. Information about each of Council’s roads is stored in a Planned maintenance required. pavement management system, which allows us to track the history of each road’s condition, any treatments, and predict future condition.8
  • 9. Option 3: Improve Services – Increase Rates 9.8% average residential rate increase (including 3% rate cap) 12.8% average business rate increase each year (including 3% rate cap)Under this option the community will see much of their vision as outlined in the 10 YearCommunity Plan come to life. Option 3 is designed to deliver on priorities identified throughcommunity consultation, and is based on what people have said they want to see more of,or wish to see maintained or improved. The increased funding will allow Council to improvelevels of service to the community and support an additional program of works for roads,pools, libraries, sports centres, parks and playgrounds, and upgrades to town centres.Improvements in maintenance of our City’s Environmental programs andassets and infrastructure works maintainedFunds will be injected into infrastructure renewal and Sustainability works and programs will continue beyondmaintenance across the City, with an additional $15M over 2014/15, when the Sustainability Levy finishes. See page 14the 7-year period. for more detail.This will significantly improve the standard of maintenanceand overall appearance of the City. Response times for Existing community facilities upgradedmaintenance requests will be reduced including vandalism and new facilities builtrepairs, pothole patching, and drainage clearing.Regular services such as litter removal, street sweeping,and toilet cleaning will be conducted more frequently.This amount allows for an increase in the number of assetsin the City over 7 years and recognises that maintenancecosts and community expectations change over time.Roads and drainage improved Rate increases under Option 3 will allow Council to keep the Lake Macquarie Performing Arts Centre and pools open. Council will also implement recommendations from the Library Service Delivery Model, which proposes 2 new libraries at Morisset and Glendale, costing $7.4M. Lake Macquarie Art Gallery will be extended to incorporate seminar rooms and the sculpture park will be extended in the gallery grounds.Under Option 3, the condition of our roads is expected The community will also benefit from:to reach the ‘very good’ range within the next 10 years • Rathmines Community Hall kitchen upgradethrough a program of targeted renewal. This will beachieved through a $42M investment over the next 7 years • Renovation of Lambton Colliery, Redhead Communityin programs for road reconstruction and resurfacing. BuildingsFunding will be available to upgrade drainage infrastructure • Refurbishment of the Sugar Valley Neighbourhood Centreand replace drainage that fails. • A new amenity block at Warners Bay foreshoreImportant information about your Council rates and services 9
  • 10. Sporting and recreation facilities improved New Youth and Aboriginal Programs Additional youth and Aboriginal programs will be delivered in partnership with relevant organisations. Current staffing maintained and frontline staffing increased Current staffing levels will be maintained and in addition, Ranger staffing will be increased as per Option 2. Under Option 3, $20.4M will be provided over 7 years New capital projects to redevelop our pools according to recommendations New capital expenditure over the 7 years will increase to in Council’s Pool Service Delivery Model. This includes $326M, and includes the works detailed above. redevelopment of Charlestown Pool and a new water play In addition a program to upgrade town centres will be zone at Speers Point. developed. $7M will be allocated over 7 years for upgrades Our sport and recreation facilities will be improved and in 9 locations: Cardiff, Charlestown, Belmont, Toronto extended across the City: Morisset, Warners Bay, Glendale, Swansea and Mount • Sportsground improvements to playing surfaces, Hutton. lighting, amenities, and car parks across the City The Glendale Transport Interchange and the Lake ($6M over 7 years) Macquarie Waste Strategy will be funded. • Additional sporting fields at Edgeworth (funded in part by developer contributions) ($5.3M) Financial • Continued implementation of: Council will continue to experience a small operating deficit - Cameron Park Master Plan – Sports Fields and Parks until 2016/17, with a surplus of up to $7M in 2018/19 (funded in part by developer contributions) projected. Option 3 addresses the $67M infrastructure ($7.6M over 5 years) backlog with roads ($30M backlog) improved and funding - Speers Point Park Master Plan ($1.1M over 4 years) for future drainage renewals are provided. - Toronto Foreshore Master Plan including new play equipment HOW WERE THESE OPTIONS DEVELOPED? The funding options were developed based on our 10 Year Community Plan, as well as input gathered through the Securing our Future consultation. Securing our Future is a 6-month community engagement process to raise awareness and consult the community about Council’s financial sustainability. Between July and September this year, more than 400 people attended forums held across the City. Council’s consultation website www.haveyoursaylakemac.com.au was also used to gather community feedback through an online forum. Input was also sought from a community working group of 24 randomly selected yet demographically representative residents across all wards. Forum participants were asked to identify which Council assets and services they valued most and would prioritise for future funding. Our roads and cycleways, domestic and commercial waste collection, environmental programs – especially lake and foreshore management, libraries, and park facilities were shown to be highly valued. Results of the community engagement informed development of the three options Council is now presenting to the community for consideration.10
  • 11. THE THREE OPTIONS AT A GLANCE Option 1 Option 2 Option 3KEY FEATURES • Services significantly reduced • Services largely maintained • Services improved • Condition of our assets declines • Condition of our assets maintained at current • Delivers on 10 Year Community Plan • Rates increase only by rate peg amount set rates of decline initially, then will hold • Condition of our assets improves annually by IPART • Average residential rates increase 7.7% pa • Program of infrastructure renewal • Average residential rates increase 3% pa • Average business rates increase 9.9% pa • Average residential rates increase 9.8% pa • Average business rates increase 3% pa • Average business rates increase 12.8% paINFRASTRUCTURE A reduction of $20.8M over 7 years for Increased by $6M over 7 years to maintain Increased by $15M over 7 years to ensure CouncilMAINTENANCE maintenance of City infrastructure maintenance standards and response times assets are well maintained and useful over their predicted lifeBOAT RAMPS No new boat ramps or jetties constructed, saving Current levels maintained Current levels maintained& JETTIES $2.3M over 7 yearsDRAINAGE $3.9M reduction over 7 years for replacement of Current funding levels maintained, enabling Funding available to replace drainage that fails failed drainage infrastructure and construction of approximately 30% of drainage infrastructure that flood mitigation measures fails to be replacedROADWORKS $20.4M reduction over 7 years for sealing An additional $16M over 7 years for reconstructing An additional $42M over 7 years for reconstruction gravel roads, new kerb and gutter, resealing and and resurfacing roads and resurfacing reconstruction of paved roads Average road condition continues to decline Road condition increases to ‘very good’ range in Average road condition falls from ‘good’ to ‘fair’ for the next few years but then remains in the 10 years within 10 years ‘good’ rangeENVIRONMENT & Reduced maintenance program for natural Sustainability Levy becomes part of rate base Sustainability Levy becomes part of rate baseSUSTAINABILITY vegetated areas including foreshore reserves Continuing projects include bushland rehabilitation Continuing projects include bushland rehabilitation and bushfire protection. From 2014/15 reduced projects, lake water quality programs, foreshore projects, lake water quality programs, foreshore environmental works including lake water quality rehabilitation projects rehabilitation projects programs and foreshore rehabilitation projects, saving $14.4M over 7 yearsLIBRARIES & Reduced opening hours for all libraries. 2 library Maintain budget at current level, which will result $7.4M over 7 years to implement the LibraryCULTURAL closures in 2013, saving $713,000, and 3 further in a gradual reduction in stock and service points Service Delivery Model including new libraries atACTIVITIES libraries close in 2014, saving $750,000 Morisset and Glendale Total saving over 7 years of $8.6M Art Gallery extensionPOOLS 1 pool will close in 2012, saving $3M over 7 years, Upgraded CPR and other equipment $20.4M over 7 years to upgrade pools and 1 pool will be put under contract management, Pools not upgraded Redevelopment of Charlestown Pool and water saving $3.9M over 7 years play zone at Speers Point In 2013 a further pool will close, saving $2.4M over 6 yearsPARKS & Reduction of $536K over 7 years Funding and level of service maintained $0.8M over 7 years to improve park furniturePLAYGROUNDS across City New play equipment at Toronto foreshore at $750KFOOTWAYS & $4M reduction over 7 years for construction of Current levels maintained $3.5M over 7 years for construction of newCYCLEWAYS new footpaths, cycleways, and traffic facilities footpaths and cyclewaysCOUNCIL STAFF Reduction of 123 Council staff across all areas, Increase in Ranger staff - increased patrols, Increase in Ranger staff - increased patrols, saving $42.6M per year improved response times, improved public health, improved response times, improved public health, The Economic Development Department would and environmental monitoring and enforcement and environmental monitoring and enforcement be disbandedDEVELOPMENT Longer turnaround times for DAs, reduced number Current levels maintained Current levels maintainedAPPROVALS of planning studies, master plans, and area plans, saving $0.4M per yearTOURISM Changes to tourism funding including closure of Current levels maintained Current levels maintained the Visitor Information Centre at Swansea, saving $3.8M over 7 yearsTOWN CENTRE Funding not included Funding not included $7M over 7 years to implement a program toUPGRADES upgrade town centresNEW YOUTH AND Funding not included Funding not included New programs in partnership with relevantABORIGINAL organisationsPROGRAMSIMPROVED Funding not included Funding not included $4.9M over 7 years for renovations, extensions,COMMUNITY and construction works across the CityFACILITIESFINANCIAL • Maintenance and infrastructure backlog • Maintenance and infrastructure backlog will be • Maintenance and infrastructure backlog significantly increases partially addressed addressed • Operating deficit continues with estimate of • Operating deficit until 2016/17 then expected • Operating deficit until 2016/17 then expected $8.5M in 2018/19 surplus of up to $5M in 2018/19 surplus of up to $7M in 2018/19 • New capital expenditure of $240M over 7 years • New capital expenditure of $269M over 7 years • New capital expenditure of $326M over 7 years • Replacement capital expenditure of $268M over • Replacement capital expenditure of $308M • Replacement capital expenditure of $344M 7 years over 7 years over 7 yearsImportant information about your Council rates and services 11
  • 12. RESIDENTIAL RATES CALCULATOR Option 1: Reduce Services – Maintain Rates 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 Cumulative Increase on 3.00% 3.00% 0.34%* 3.00% 3.00% 3.00% 3.00% Previous Year Rateable Value Number of Land Value Properties For Rates Calc $0 to $99,999 6,803 $50,000 $587.87 $17.64 $18.17 $2.18 $18.77 $19.34 $19.92 $20.51 $116.53 $100,000 to $149,999 14,602 $125,000 $757.07 $22.71 $23.39 $2.81 $24.18 $24.90 $25.65 $26.42 $150.07 $150,000 to $199,999 22,367 $175,000 $869.88 $26.10 $26.88 $3.23 $27.78 $28.61 $29.47 $30.36 $172.43 $200,000 to $299,999 21,589 $250,000 $1,039.09 $31.17 $32.11 $3.86 $33.18 $34.18 $35.20 $36.26 $205.97 $300,000 to $499,999 6,909 $400,000 $1,377.50 $41.33 $42.56 $5.12 $43.99 $45.31 $46.67 $48.07 $273.05 $500,000 to $999,999 2,267 $750,000 $2,167.14 $65.01 $66.96 $8.05 $69.21 $71.28 $73.42 $75.63 $429.57 $1,000,000 to 254 $1,500,000 $3,859.21 $115.78 $119.25 $14.34 $123.24 $126.94 $130.75 $134.67 $764.97 $1,999,999 $2,000,000 27 $2,000,000 $4,987.26 $149.62 $154.11 $18.53 $159.27 $164.05 $168.97 $174.04 $988.58 and greater Option 2: Maintain Services – Increase Rates 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 Cumulative Increase on 9.75% 9.50% 6.00%* 5.50% 5.25% 4.75% 4.75% Previous Year Rateable Value Number of Land Value Properties For Rates Calc $0 to $99,999 6,803 $50,000 $587.87 $57.32 $61.29 $23.03 $40.12 $40.41 $38.48 $40.30 $300.95 $100,000 to $149,999 14,602 $125,000 $757.07 $73.81 $78.93 $29.66 $51.67 $52.04 $49.55 $51.91 $387.57 $150,000 to $199,999 22,367 $175,000 $869.88 $84.81 $90.70 $34.08 $59.37 $59.79 $56.93 $59.64 $445.32 $200,000 to $299,999 21,589 $250,000 $1,039.09 $101.31 $108.34 $40.71 $70.92 $71.42 $68.01 $71.24 $531.94 $300,000 to $499,999 6,909 $400,000 $1,377.50 $134.31 $143.62 $53.97 $94.02 $94.68 $90.16 $94.44 $705.19 $500,000 to $999,999 2,267 $750,000 $2,167.14 $211.30 $225.95 $84.90 $147.91 $148.95 $141.84 $148.58 $1,109.43 $1,000,000 to 254 $1,500,000 $3,859.21 $376.27 $402.37 $151.19 $263.40 $265.25 $252.59 $264.59 $1,975.67 $1,999,999 $2,000,000 27 $2,000,000 $4,987.26 $486.26 $519.98 $195.39 $340.39 $342.79 $326.42 $341.93 $2,553.16 and greater Option 3: Improve Services – Increase Rates 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 Cumulative Increase on 9.80% 9.70% 9.00%* 7.75% 7.25% 6.75% 4.75% Previous Year Rateable Value Number of Land Value Properties For Rates Calc $0 to $99,999 6,803 $50,000 $587.87 $57.61 $62.61 $43.76 $58.27 $58.73 $58.65 $44.06 $383.69 $100,000 to $149,999 14,602 $125,000 $757.07 $74.19 $80.63 $56.36 $75.04 $75.64 $75.53 $56.74 $494.12 $150,000 to $199,999 22,367 $175,000 $869.88 $85.25 $92.65 $64.75 $86.22 $86.91 $86.78 $65.19 $567.75 $200,000 to $299,999 21,589 $250,000 $1,039.09 $101.83 $110.67 $77.35 $102.99 $103.81 $103.66 $77.87 $678.19 $300,000 to $499,999 6,909 $400,000 $1,377.50 $135.00 $146.71 $102.54 $136.54 $137.63 $137.42 $103.23 $899.06 $500,000 to $999,999 2,267 $750,000 $2,167.14 $212.38 $230.81 $161.32 $214.80 $216.52 $216.20 $162.41 $1,414.44 $1,000,000 to 254 $1,500,000 $3,859.21 $378.20 $411.03 $287.27 $382.52 $385.57 $385.01 $289.22 $2,518.82 $1,999,999 $2,000,000 27 $2,000,000 $4,987.26 $488.75 $531.17 $371.24 $494.33 $498.27 $497.54 $373.76 $3,255.07 and greater Business and farmland rates calculations for each option are also available. Visit www.haveyoursaylakemac.com.au/securingourfuture or contact Council on 4921 0333. The Cumulative column represents the total increase in rates payable over the 7-year period from 2011/12 to 2018/19.12
  • 13. HOW WILL A RATE INCREASEAFFECT ME FINANCIALLY?For residential ratepayers, with an average land value of $175,000, youraverage yearly increase will be: Council offers a number of Option 1: $24.63 per year or $0.47 per week options for ratepayers to tailor their payments to manageable Option 2: $63.61 per year or $1.22 per week amounts. For example, you can arrange to pay in quarterly or Option 3: $81.10 per year or $1.56 per week monthly instalments, and by direct debit. Contact Council onResidents can use the Residential Rates Calculator on the opposite page 4921 0333 if you wish to discussto work out what a potential rate increase will mean in terms of dollars. payment plans for your rates.Residents and business owners can use the tables below to understand theyear-to-year increases on a percentage basis.SUMMARY OF RATE INCREASES Residential Option 1 Option 2 Option 3 2012/2013 3.00% 9.75% 9.80% 2013/2014 3.00% 9.50% 9.70% 2014/2015 0.34%* 6.00%* 9.00%* 2015/2016 3.00% 5.50% 7.75% 2016/2017 3.00% 5.25% 7.25% 2017/2018 3.00% 4.75% 6.75% 2018/2019 3.00% 4.75% 4.75% Business Option 1 Option 2 Option 3 2012/2013 3.00% 14.00% 14.00% 2013/2014 3.00% 14.00% 14.00% 2014/2015 0.34%* 7.50%* 12.50%* 2015/2016 3.00% 6.00% 9.00% 2016/2017 3.00% 5.25% 7.50% 2017/2018 3.00% 4.75% 6.75% 2018/2019 3.00% 4.75% 4.75%If IPART sets the rate peg higher than any approved rate increases for any year, then Council will adjust rates accordingly foreach option.NOTES FOR TABLES: *In 2014/15 Council has an expiring special variation to general income that was granted for theyears 2010/11 to 2013/14 inclusive, for costs associated with environmental works as defined by Council in its specialvariation 5 year works program. This special variation has come to be known as the Sustainability Levy.The amount Council will be required to reduce its general income is $2,103,708 plus the equivalent cumulative proportion ofthis increase from any general variation increases or special variation increases approved for the 2011/12 to 2013/14 ratingyears inclusive. The reduced rate increase (0.34%) in 2014/15 for Option 1 reflects a reduction in environmental programsand works after the Levy ceases. The estimated reduction in Council’s general income for each option in 2014/15 is asfollows: Option 1: $2,293,869; Option 2: $2,629,142; Option 3: $2,634,213.As Council intends to continue with its environmental program, it is proposed to increase rate income in Options 2 and3 for 2014/15 to enable these works to be funded. This increase in rate income is incorporated in percentage increasesfor Options 2 and 3. The proposed percentage increase in rate income in 2014/15 that relates to the extension of theenvironmental program is as follows: Option 2: 2.59% (which equates to an average of $29.05 per residential rateassessment); Option 3: 2.59% (which equates to an average of $29.12 per residential rate assessment). See page 14 formore information on the Levy.Important information about your Council rates and services 13
  • 14. SUSTAINABILITY LEVY The local environment consistently rates as one of the What has been achieved with the Levy? most important features of the City for residents. Access Key achievements include: to the lake, coastline, and bushland provides people with an opportunity to enhance health and wellbeing through outdoor • 26 on-ground works projects completed to improve lake activity and enjoyment of our wildlife and natural places. water quality • Clean Up Lake Macquarie collected 28 tonnes of rubbish During development of the 10 Year Community Plan over 86 sites with 7,146 volunteers in 2008, community feedback rated Caring for the Environment as the most important of Council’s focus • Residents were assisted in saving money, including a areas. The need for additional funds to deliver environmental 3.9% reduction in citywide electricity use in 2009-2010, programs was identified, as the previous Lake Levy which and an overall saving to the community of $6M through had been in place for 10 years was due to expire. access to rebates and other programs • Award winning climate change adaptation program Council sought and was granted a special variation, which delivered, including the E-shorance web tool to assess has come to be known as the Sustainability Levy. It was the response of the lake foreshore to predicted sea introduced in 2009 to fund environmental projects, including level rise continuation of lake water quality improvement works. The Levy expires in 2014. • Inaugural Living Smart Festival attracted 8,000 people • Waste to landfill reduced by 23% per capita, and What happens under each funding option commercial recycling increased by 38% when the Levy finishes in 2014? • 18 sustainable neighbourhood groups established All three funding options include the Sustainability Levy in 2012-2014. As Council intends to continue with its Caring What is planned for the next 7 years? for the Environment programs, it proposes to increase rate In the next 7 years we intend to continue work to: income across the 7-year period to enable these works • Maintain and improve lake water quality through to continue beyond 2014. This increase in rate income is construction and maintenance of over 70 on-ground incorporated in Options 2 and 3, but not in Option 1. works projects Under Option 1, the Levy funding for environmental works • Complete over 20 works projects to reduce energy and and programs stops in 2014/15. This will also be the case water consumption in Council and community facilities. if Council’s application for a rate increase is not approved • Develop local area adaptation plans for all foreshore by IPART. areas affected by flooding and sea level rise Under Options 2 and 3, rate increases for the 7-year • Expand our sustainable neighbourhoods program to period will provide additional income to continue Council’s provide an opportunity for neighbourhoods in the City to current environmental programs beyond 2014. The expiring work with Council to improve their local environment variation becomes part of the general rate base beyond • Continue to support residents and businesses to save 2014/15. money at home and at work through programs to reduce waste generation and resource consumption HOW DO WE KNOW Council currently reports on its performance quarterly, as well as in our annual report, which is provided to COUNCIL IS DOING the community. Council’s performance reporting will be increased to ensure that the community can easily track A GOOD JOB? Council’s delivery of programs identified as part of any special rate variation. The Local Government Act 1993 requires local councils Lake Macquarie City Council has a strong track record of to demonstrate they are meeting the needs of their productivity improvements that have been achieved over the communities in an effective and efficient way. last 10 years. We recognise that continuous improvement Our 10 Year Community Plan outlines targets and other and innovation is an ongoing process. Council is committed measures by which actual levels of service provision to getting the very best value for money and outcomes for can be assessed. our community. We will continue to explore and adopt best practice and seek out innovative ways of delivering services.14
  • 15. FREQUENTLY ASKED QUESTIONSWhat is a Special Rate Variation? deliver the same, or improved, levels of service to ourSince 4 June 2010, the Independent Pricing and community. The rate peg has consistently been set belowRegulatory Tribunal (IPART) has been responsible for cost increases.setting a maximum percentage by which councils can If funding is not obtained to cover the operating deficit,increase rates. This is known as the rate cap or rate peg, there will need to be a significant reduction in expenditureand is usually around 3%. Prior to 2010, the rate peg was to contain costs, which will result in reduced services toset by the Minister for Local Government. the community.Councils can request a special rate variation to increaserates above the rate peg. Councils must undertake How has Council sustained a balancedextensive community consultation and make an application budget without increasing rates upto IPART if they wish to seek a special rate variation. until now?IPART makes the final decision on whether the rate Council has used our asset replacement and otherincrease is allowed. reserves to balance the budget. This practice is not sustainable. Our assets continue to age, and depreciationWhat are the proposed rate continues to increase, our reserves are being eroded toincrease options? meet the budget shortfall.Council has put forward three funding options for thecommunity to consider. How much money will Council be spending on upgrading and replacing Option 1: Reduce Services – Maintain Rates assets across the City? Option 2: Maintain Services – Increase Rates To ensure sufficient funds are provided for the replacement and upgrade of assets such as roads, community Option 3: Improve Services – Increase Rates buildings, boat ramps, and jetties, Council sets aside an amount of money each year. This amount is a percentageEach of these rate increase options is explained in detail of the total money required to ensure specific assetson pages 6-13. reach their full life cycle. This is known as cash funding depreciation.What happens after 7 years? Each of the three funding options includes differentAfter 7 years, rates will realign with the rate peg amount amounts of funds set aside for the replacement anddetermined by IPART. maintenance of assets. Under Option 1, cash funding of depreciation commencesWhy is Council looking to increase rates? at 53% after year 1 and increases to only 67% after 7Council faces some financial challenges and cannot years, while Option 2 commences at 61% after year 1 andcontinue to provide existing levels of service to the increases to 87% after 7 years. Option 3 provides the mostcommunity with our current funding levels. satisfactory outcome to ensure appropriate management and replacement of our asset base by commencing atCareful financial management has enabled Council 57% after year 1, and increasing to over 90% cash fundingto consistently maintain an operating surplus, where of the annual depreciation charge by year 7.our operational income has exceeded our operationalexpenditure. This surplus has been used to offset What happens if Council’s application forinfrastructure costs and for principal loan repayments. a rate increase is unsuccessful?Unfortunately, rate pegging continues to affect our ability If IPART does not approve Council’s application to increaseto achieve a surplus. In fact, we are now forecasting a rates, this will mean that rates will continue to increasesignificant operating deficit in the 2011/12 financial year by only the rate peg amount (3%). Council will have toand future years. consider cuts to services to correct budget shortfalls andOther factors affecting our operating result include the ensure financial sustainability, as outlined on pages 6-7.impact of cost shifting. This is where the costs of otherlevels of government are passed on to local government. When will rates rise?Cost shifting currently amounts to over $15.5M per year If a rate increase application is successful, rates willfor Lake Macquarie City Council. In addition to the burden increase from 1 July 2012.of cost shifting, recently there have been significantincreases in other government levies such as the Rural FireServices Levy. How can I get more information? Visit www.haveyoursaylakemac.com.au/Like all other businesses and households, we also have securingourfutureto budget for increased utility and fuel costs, as well asincreases in the costs of materials. Such price increaseshave a significant impact on our ability to continue toImportant information about your Council rates and services 15
  • 16. HAVE YOUR SAY ON SECURING OUR FUTUREWhich option do you prefer? Attend a Securing our Future Community Workshop in your area Option 1: Reduce Services – Maintain Rates Wed 9 Nov Belmont 16 Footers Option 2: Maintain Services – Increase Rates 12pm – 2pm The Parade, Belmont Thur 10 Nov The Place Option 3: Improve Services – Increase Rates 5.30pm – 7.30pm Charlestown Community Centre, Charlestown Square, 81/30 Pearson Street, Charlestown Sun 13 Nov Toronto DiggersThere are many ways 2pm – 4pm 41 The Boulevarde, Torontoto tell us your preferred option Tues 15 Nov Council Administrative CentreYou can either: 12pm – 2pm 126-138 Main Road, 6pm – 8pm Speers Point• Complete our online poll at www.haveyoursaylakemac.com.au/ Sun 20 Nov Cameron Park Community Centre securingourfuture 2pm – 4pm 107 Northlakes Drive, Cameron Park Tues 22 Nov Morisset Country Club• Attend one of our community workshops 5.30pm – 7.30pm Dora Street, Morissetor• Complete the funding option selection form below and Find out more online: drop it off at your local library or post it in an envelope. If Visit www.haveyoursaylakemac.com.au/ addressed as shown on the form, no stamp is required. securingourfuture to find out more and: • Read our information sheets and frequentlyStay up to date asked questions Like us on Facebook • Take part in online discussions www.facebook.com/lakemaccity • Try your hand at setting Council’s budget using our online or budget allocator follow us on Twitter www.twitter.com/lakemac • Find out what other residents are saying about rates and Council servicesSECURING OUR FUTUREFUNDING OPTION SELECTION FORMAge: Gender: Male Female Postcode:Which funding option provides the most appropriate level of service? (please tick)Option 1: or Option 2: or Option 3:Any comments?Which funding option do you prefer? (please tick)Option 1: or Option 2: or Option 3:Any comments?Please post your completed form in an envelope.No postage stamp is required if addressed as follows: Securing Our Future Project Lake Macquarie City Council Reply Paid 67121 HRMC NSW 2310