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Shellharbour City Council Resourcing Strategy 2018 - 2028 1

Resourcing Strategy

2018 - 2028

2 Shellharbour City Council Resourcing Strategy 2018 - 2028

AcknowledgementShellharbour City Council recognises and respects the traditional custodians

of this land, the Wodi Wodi and Dharawal people and acknowledge them as

the First Peoples of this region. Shellharbour City Council would also like to

pay respects to all Elders past and present. Council works together with our

Aboriginal community to ensure our local cultural heritage is recognised,

protected and celebrated.


ContentsAbout this document 4

Long Term Financial Plan 6

Asset Management Strategy 37

Appendix A 61

Asset management policy

Workforce Management Plan 68


Resourcing Strategy

The Resourcing Strategy is an essential element of the Integrated Planning and Reporting (IP&R) framework. The strategy ensures sufficient financial and human resources exists to provide services and infrastructure assets expected by the community. The Long Term Financial Plan, Asset Management Strategy, and Workforce Management Plan contained within the strategy address Strategies and Actions contained within the Delivery Program and Operational Plan.

Long Term Financial Plan (LTFP)

Council’s key objective when managing its financial resources is to remain financially sustainable. Council’s Long Term Financial Plan (LTFP) is an essential tool to assess Council’s financial sustainability and also demonstrate Council’s long term capacity to deliver the strategic Objectives contained within the Community Strategic Plan (CSP), Delivery Program and Operational Plan.

It is essential that the LTFP adopted by Council provides a level of certainty to the community that it is a sustainable financial model and represents an acceptable balance in the context of meeting community expectations, sound financial management, and the achievement of strategic Objectives that are clear and measurable, and have community and Council support.

It is important that community assets are maintained so that the cost does not become a burden for future rate payers. Financial sustainability is achieved when service and infrastructure levels are delivered according to a long term plan without the need to significantly increase rates or significantly reduce services.

The LTFP is developed in conjunction with the Asset Management Strategy and Workforce Management Plan and incorporates the strategies and actions contained within Council’s Delivery Program.

The LTFP is for a period of ten years and includes the following:• The planning assumptions used to develop the plan• Projected income and expenditure, balance sheet and cash-flow statement• Sensitivity analysis• Monitoring financial performance and sustainability• Scenario modelling

The primary purpose of this LTFP is to facilitate effective financial decision-making which is informed by the short, medium and long term expectations of the community.

The LTFP is reviewed on an annual basis, with a major review process undertaken in line with the review of the CSP.

About thisdocument

This document comprises of the Long Term Financial Plan (LTFP), Asset Management Strategy (AMS) and Workforce Management Plan (WMP)


Asset Management Strategy (AMS)

The AMS sets a framework for the sustainable management of current and future assets so that Council can continue the delivery of services from infrastructure is provided in a financially sustainable manner.

The AMS provides information about our assets, responsible asset management, compliance with regulatory requirements and summarises information with regard to funding aimed at bringing assets to a desirable level of service.

Council is the custodian of infrastructure assets valued at over $626 Million. These assets have been acquired by purchase, contract, construction by staff or assets constructed and donated by developers.

Shellharbour City Council’s primary objectives in managing these are:• to be sustainable in the management all assets• to provide a desirable level of service for the assets under its stewardship for the existing and

future community

The Asset Management Framework is made up of 3 components: The Asset Management Policy, an Asset Management Strategy and a number of Asset Management Plans for each of Council’s infrastructure asset classes.

Workforce Management Plan (WMP)

The WMP maximises the capacity of Council’s workforce resources to meet the Objectives of the CSP. The WMP focuses on current and future staffing needs to ensure Council has the right people, in the right roles, at the right time to deliver services to our community.

The WMP has been developed to outline strategies and initiatives to attract and retain a capable, efficient and effective workforce with the capacity to deliver on Council’s Delivery Program and Operational Plans.

Our strategies align with key human resource functions including recruitment; learning and development and work health and safety.

Key priorities for Council over the life of the plan include:• Leadership • Career planning and professional development• Rewards and recognition• Recruitment and Retention • Performance improvement


Long TermFinancial

Plan


Introduction The Long Term Financial Plan (LTFP) is an important part of Council’s strategic planning process, as it is used to model various scenarios. It is also used to inform and guide future actions and to allow Council to identify financial issues at an earlier stage. The LTFP provides a means to forecast Shellharbour City Council’s capacity to provide financial resources to meet the Objectives of the CSP.

Council’s Sustainable Financial Strategy supports the LTFP by providing direction and context. The LTFP is developed in conjunction with the Asset Management Strategy and Workforce Management Plan and incorporates the strategies and actions contained within Council’s Delivery Program.

The LTFP is for a period of ten years and includes the following:• The planning assumptions used to develop the plan• Projected income and expenditure, balance sheet and cash-flow statement• Sensitivity analysis

The primary purpose of this LTFP is to facilitate effective financial decision-making which is informed by the short, medium and long term expectations of the community.

The LTFP is reviewed on an annual basis, with a major review process undertaken in line with the review of the CSP.

Fit for the Future In September 2014, the New South Wales State Government introduced “Fit for the Future” reforms to help create financially stronger councils, improve council performance and strengthen the system of local government so that councils can deliver quality services and infrastructure to their communities.

Councils were required to prepare roadmaps for becoming “Fit for the Future” by 30 June 2015. The roadmaps were assessed by IPART and determinations were made regarding whether councils were fit or not fit. Shellharbour City Council’s proposal was declared as being ‘not’ fit at the time.

The Office of Local Government (OLG) issued a document in November 2017 titled, ‘Financial Criteria Reassessment Round 3 Guidelines’, which identifies Shellharbour City Council as one of three Councils eligible to participate in a reassessment process. Council has now completed the reassessment proposal template issued by the OLG, which reflects Council meeting all Fit for the Future benchmarks in the 2021/22 assessment year.

Results from the reassessment process are expected to be released by 30 June 2018.


Moving toward a Financially Sustainable FutureCouncil’s key objective is to be financially sustainable over the short, medium and long terms to meet community’s specific needs. At its meeting on 13 March 2018, Council endorsed the “Sustainable Financial Strategy”.

The 2018-2019 Operational Plan and 2018-2021 Delivery Program have been prepared within the context of the endorsed strategy. Council will demonstrate financial sustainability to the community by implementing 11 Key Financial Objectives contained within the four principles below.

Principles


PRINCIPLE A - Council spending should be responsible and sustainable, aligning general revenue and expenses

Key Objective 1 Financially sustainable over the short, medium and long term to meet community’s specific needs.

Actions• Maintaining a professional finance team.• Ensuring an effective “Integrating Planning & Reporting” (IP&R) process throughout Council.• Having Operating Performance ratio as a key assessment criteria for Council’s strategic

decisions.• Council integrates FFtF and cash reporting within the Quarterly Operational Plan Review,

Delivery Program (updated annually for the Council term) and the LTFP (updated annually for a 10 Year outlook).

Outcomes• Council access attractive TCorp borrow rates to reduce costs and drive further investment

into the community.• Council will demonstrate to the community and other stakeholders that it is financially

responsible and efficiently meets the needs of the community today and into the future.

Measure - Fit For the Future Ratio & Other Metrics• Council achieves all (FFtF) ratios and cash ratio and be deemed “Fit” by the Office of Local

Government (OLG).

Council’s Principles of Sound Financial Management


Key Objective 2Optimise returns from Council’s commercial ventures thereby reducing burden for rate payers and minimising revenue volatility.

Actions• Develop a Shell Cove Business Plan that creates a surplus from commercial enterprises to

fund ongoing maintenance of the precinct and providing a dividend to Council. • Links Shell Cove business to produce a net surplus (after depreciation) and thereby

providing a dividend to Council. • Complete the Links Shell Cove precinct sub-division and investigate further sub-division

options.• Expand commercial operations (including regular passenger transport services) at the airport

precinct. • Have a working group focusing on increasing returns from Council own surplus land.• Further commercialise business plans for Council’s enterprises.• Ensure all commercial ventures business plans are reviewed and updated regularly.

Outcomes• Increasing the performance of commercial assets/ventures that provide a net positive return

to Council.• Contributing positively to the Own Source Revenue and Operating Performance FFtF ratios.• Assists in reducing the need for special rate variations.• Improve commercial returns for the Nursery, Shellharbour Holiday Caravan Park and the

Sand Mine.

Measure - Fit For the Future Ratio & Other Metrics• Achieve the FFtF Own Source Revenue target of 60% each year with aspiration goal of

increasing the percentage year-on-year. • Assists Council in achieving the Operating Performance ratio.


Key Objective 3Council will continually review its services to better define service requirements and refine delivery methods.

Key Objective 4Adequately resourced cross-functional sustainability teams will be formed to address specific risks to Council’s financial sustainability.

Actions• Determine costs of providing services and compare to industry benchmarks.• Develop service levels and further refine existing service levels to align with community

expectation to minimise over-servicing (spending).

Outcomes• Increasing the awareness of whole of-life costs in providing services to the community and

further drive efficiencies.• Minimise the burden to general rate payers of non-commercial ventures.

Measure - Fit For the Future Ratio & Other Metrics• Assists Council in achieving the Operating Performance ratio.

Actions• Cross functional sustainable teams will be formed to address specific risks to Council’s

financial sustainability.• Teams will consist of subject matter experts who are resourced to identify and implement

solutions.

Outcomes• Significant risks to Council’s financial sustainability is timely identified and mitigated.

Measure - Fit For the Future Ratio & Other Metrics• Assists Council in achieving the Operating Performance ratio and other FFtF ratios.


Actions• The Community will be engaged to determine service levels. Council’s Asset Management

Strategy (AMS) will reflect community expectations and prioritise assets spending. • Continue with Council’s asset conditional assessment program to reduce maintenance

expenditure within the Delivery Program. • Implementing processes to enable whole of life costing for assets.• Ensure the appropriate classification of asset renewal expenditure and asset maintenance

exist.• Implement a program that ensures Infrastructure Renewal ratio greater than 100% annually

per Council’s Asset Management Strategy.• Further refine the program that identifies the frequency and method of conditional

assessments for infrastructure assets to ensure the Infrastructure Backlog Ratio is less than 2% as per Special Schedule 7 requirements contained within Council’s AMS.

• Implement a program that ensures infrastructure assets maintenance is greater than 100% as per Special Schedule 7 requirements contained within Council’s AMS.

• Enhance the community asset strategy that ensures community assets are safe, well maintained and fit for purpose.

• Educate the community on the costs associated with maintaining assets according to the various condition categories and benchmark with peer councils.

PRINCIPLE B - Councils should invest in responsible and sustainable infrastructure for the benefit of the local community

Key Objective 5Council will systematically assess asset conditions and determine funding to ensure desired condition levels are achieved at the best value for Council.


Outcomes• Achieve Special Schedule 7 Compliance by prioritising expenditure and ensuring sufficient

type of expenditure is performed on infrastructure assets. • Strategic AMS is integrated within the Operating Plan, Delivery Program and LTFP thereby

guaranteeing funding

Measure - Fit For the Future Ratio & Other Metrics• Infrastructure Renewal ratio greater than 100%.• Infrastructure Backlog ratio less than 2%.• Asset Maintenance ratio is greater than 100% which indicates Council is investing enough

funds to reduce the infrastructure backlog.

Key Objective 6Council’s Delivery Program will be used to determine infrastructure service levels and funding to meet community expectations.

Actions• The Sustainable Financial Strategy will provide the overall parameters for asset related FFtF

ratios and funding availability.• AMS is prepared at a project level within required FFtF parameters.• Ensure the AMS is integrated with the Delivery Program

Outcomes• Community infrastructure service levels and relevant FFtF ratios will be met within the

Delivery Program. • As the Delivery Program contains project level detail, information will be available

for strategic decision makers to make infrastructure changes and remain within FFtF parameters.

Measure - Fit For the Future Ratio & Other Metrics• Assists Council in achieving the FFtF ratios, Infrastructure Renewal ratio, Infrastructure

Backlog ratio and Asset Maintenance ratio.• Assists Council in achieving the Unrestricted Current ratio.


Actions• Council continues with the ‘Budgeting for Outcomes’ architecture that enables Council to

monitor the costs of the Objectives contained within the CSP.• Regular and rigorous reporting regime that identifies current and future variances, risks to

the Operational Plan that enables timely corrective action. • Continue to develop Council’s finance partnering model so finance staff increase their

understanding of Council’s activities and increase the financial acumen of Council officers.

Outcomes• The ‘Budgeting for Outcomes’ model enables Council to identify the true cost of achieving

the community’s Objectives within the CSP which drives efficiencies and improves strategic planning.

• Council’s finance partnering model, will educate Council officers of the financial impact of their activities and how they will be held to account for their financial performance.

• Council officers will be held to account to ensure Council resources are efficiently utilised.

Measure - Fit For the Future Ratio & Other Metrics• Real Operating Expenditure ratio declined over time.• Achieve Operating Performance ratio.

PRINCIPLE C - Councils should have effective financial and asset management

Key Objective 7Financial Reporting of operational performance must be accurate and transparent to ensure Council is accountable for the efficient use of community resources.


Key Objective 8Effective Capital Expenditure Framework will ensure capital expenditure is sufficiently planned, scoped, approved and regularly monitored to maximise infrastructure delivered to the community.

Key Objective 9Having a financially sustainable culture supported by effective Policies and Procedures ensures all Council officers are accountable to deliver services to the community efficiently.

Actions• Rollout the new Procurement Policy and Procurement Procedures to ensure capital

expenditure procurement roles and responsibilities are clear and individuals are held accountable.

• Rollout the recently developed capital reporting framework that ensures capital expenditure is appropriately approved with the project manager being held to account for phasing, forecasting and project risk mitigation.

Outcomes• Council officers involved in capital expenditure are held to account resulting in predictable

and efficient capital expenditure.

Measure - Fit For the Future Ratio & Other Metrics• Infrastructure Renewal ratio greater than 100%.• Infrastructure Backlog ratio less than 2%.• Asset Maintenance ratio is greater than 100% which indicates Council is investing enough

funds to reduce the infrastructure backlog.

Actions• The Quarterly Operational Plan Review process has been updated to include year-end

forecasting and year-to-date variance commentary. • Rollout the recently endorsed Procurement Policy and Procurement Procedure so Council

officers are aware of their delegated budget, remain within their delegated budget and are aware of the processes to adjust their delegated budgets.

• Provide regular finance training/education to Council’s Senior Management Team.

Outcomes• Financial literacy is achieved throughout Council thereby ensuring financial performance is

maximised and is aligned with the Operational Plan and Delivery Program.


Key Objective 10Excess working capital should be minimised and potential to borrow competitively for infrastructure projects should always exist.

Actions• Council’s cash balance and investment portfolio will be managed daily and reported monthly

to ensure the optimum funding exists to minimise cost of funds while maintaining liquidity.• Ensuring Council remains financially sustainable and ensuring borrowings are commercially

competitive and within sources defined by legislation.• Investment Policy ensures Council’s investment risk is appropriate.

Outcomes• Maximise infrastructure expenditure that benefits current and future generations, maximises

investment return and minimise operational volatility.

Measure - Fit For the Future Ratio & Other Metrics• Unrestricted Current ratio remains within the range 1.5 to 3.5 times.• Annualised Investment Return should be 1% above the AusBond Bank Bill Index.• Debt Service ratio remains within the range 0% to 20%.

Measure - Fit For the Future Ratio & Other Metrics• Assists Council in achieving all FFtF ratios.• Reduction in instances where Budget allocations are exceeded.

PRINCIPLE D- Councils should have regard to achieving intergenerational equity


Key Objective 11 Maintaining inter-generational equity is a key consideration for all strategic decisions.

Actions• Utilising borrowings to assist in funding long term assets and ensuring borrowing periods do

not exceed the useful life of the asset.• Where appropriate, and not to the detriment of achieving FFtF ratios and metrics, Council will

pursue loans and other commercial options to further align costs with generations that are receiving benefits.

• Where it is economically sound to do so, Council will incur costs today that will ultimately provide significant benefits in the future.

• Monitor and strategically manage borrowings, including acquiring and retiring debt to maintain the FFtF Debt Service ratio.

• External borrowings will not be used for current operational expenditure.

Outcomes• Further aligns infrastructure benefits with infrastructure costs.• Strategic financial decisions may extend beyond Council’s 10 year long term financial plan.• Inter-generational impacts will be highlighted to ensure informed strategic decisions are

made.

Measure - Fit For the Future Ratio & Other Metrics• The Debt Service ratio is always greater than 0% and less than or equal to 20%.


Planning AssumptionsThe LTFP contains a number of assumptions, including some that are beyond the control of Council, such as interest rates and State Government waste levies. Variations in these assumptions during the life of the plan may have a significant impact on Council’s future financial planning. The LTFP is updated annually in conjunction with preparation of the Operational Plan and Budget, which responds to the three year Delivery Program and Shellharbour’s 10 year CSP, to ensure the assumptions are continually updated with the latest information available.

InflationThe LTFP has been prepared assuming a 2.3% inflation for 2018/19 and 2.5% each year after. The 2.5% has been used on the basis of the Office Local Government’s (OLG) Circular 17-35, which advises that Councils should assume the rate peg for 2019/20 and in future years is 2.5%.

If more accurate forecasts are available for specific items, Council will adopt these rates and highlight the rates utilised where forecasts changes are significant.

Service PrioritiesCouncil’s objective is to ensure ‘value for money’ for ratepayers. Council also aims to deliver long-term financial sustainability, ensuring services remain relevant and align with the ‘needs and wants’ of the local community. Extensive consultation was conducted as part of the development of the CSP to determine the range and priority of services desired by the community.

Increase in dwellingsShellharbour City Council’s estimated population for 2017/18 is 71,880. The average household size (persons per dwelling) is 2.70, slightly above the state average of 2.61. Council is forecasting a year-on-year annual dwelling growth rate of 2.15% over the LTFP. This growth rate includes forecast additional dwellings of 328 and 2,200 relating to Shell Cove and Calderwood developments respectively.

The Shell Cove Project is a regionally significant development. The current phase of the development is the Waterfront precinct. It will contain a boat harbour, marina, town centre, hotel, tavern, library and community centre.

Calderwood, in the City’s west, is a master planned community that when completed will have approximately 5,000 dwellings, a town and neighbourhood centres, schools, community and sporting facilities and significant open space and parklands. The total dwelling yield may increase up to 7,000 dwellings if modifications to the concept plan are approved by the State Government.

Adjoining Calderwood is the urban release area of Tullimbar. Planning for Tullimbar is continuing. At this stage, it is expected to have a total dwelling yield of 1,500 dwellings along with a village centre, open space and parklands.

The amount of infill development is continuing to increase across the City as people choose to locate close to village centres and the City Centre. Infill continues to take many forms from dual occupancies to shop top housing. Greenfield and infill developments combine to create a wide variety of housing choice and price points in the City.

2.5%


1% 2.15% 0.0%Business Residential Farmland

Revenue ForecastsThe sources of funds for Council are varied and the following highlights the breakdown of revenues for Council. This is expected to remain an indicative breakup of sources of revenue for the term of the LTFP.

Rates & Annual Charges

Rating is a major component of Council’s revenue base. A 2.3% rate peg has been assumed for 2018/19, while the remainder of the LTFP is assumed to be in line with the inflation level of 2.5%. This is in line with advice from the OLG.

User Charges and Fees

Many of the services provided by Council are offered on a ‘cost recovery’ basis to allow a ‘user pays’ principle to be applied. Other considerations when determining user charges and fees include: regulated charges, market price, community service requirements and Section 94 developer contributions (discussed separately). The 2018/19 Operational Plan includes information on Council’s pricing policies for its user charges and fees. In general, a CPI based increase has been applied to user charges and fees pricing over the LTFP period.

Grants

Council receives a Financial Assistance Grant from the Commonwealth Government and anticipates the continuation of this grant along with CPI growth rate of 2.5%. Other budgeted grants are generally for specific purposes and projects, with the grant monies assumed to be expended in the year it is provided. In preparing the LTFP, Council has assumed that it will continue to receive grants. A CPI based increase has been applied to these grant amounts over the LTFP period. Should these grants and subsidies be reduced, Council’s ability to provide the same level of service may be impacted.

Anticipated annual growth by Rate Category

$5.1mFederal Assistance Grant

(based on historical data)

(based on historical data)

(based on expected dwelling growth)


Development Contributions

Council collects contributions from new development toward funding the cost of additional infrastructure required as a result of the development. These contributions include cash, land and other assets and are collected through Council’s Section 94 Contributions Plan, Works in Kind Agreements and/or Voluntary Planning Agreements (also known as VPA’s). Funds collected from developers are restricted and are allocated to projects in line with the relevant Section 94 Contributions Plan or Planning Agreement.

Interest and Investments Based on advice from Council’s investment advisors, existing term deposits held and taking into consideration the 10 year Australian Bond rate, interest returns have been included at 3.25% for 2018/19, 3.5% for 2019/20, 3.75% for 2020/21 and 4.0% for future years. The balance of funds available for investment has been calculated after taking into account cashflow forecasts.

3.25%


Expenditure ForecastsThe CSP has given Council an indication of the communities’ expectations for the future. In developing expenditure forecasts Council has considered, not only the new expenditure in the CSP, but also Council’s existing commitments, much of which is regular and ongoing. Extensive consultation with staff occurred during the preparation of the LTFP. All categories of expenditure have been examined and projections included have been based on varying factors, including historical averaging or staff projections in many cases.

Employee Costs

Depreciation

Depreciation estimates have been based on current levels along with factoring in costs associated with future capital expenditure, assets dedicated by developers and the anticipated sale of any assets. Refer below for significant depreciation items.

• Civic Centre depreciation based on an average useful life of 85 years. This equates to an annual depreciation cost of $0.653m.

• Resource Recovery redevelopment depreciation is based on an average useful life of 78 years. This equates to an annual depreciation cost of $0.204m.

• Warilla Beach Rockwall depreciation is based on an average useful life of 50 years. This equates to an annual depreciation cost of $0.173m.

• Depreciation forecasts include an additional $3.0m of drainage and $2.5m of roads per annum added to Council’s asset base from developer’s asset contributions.

• Shell Cove Marina assets (non-business) depreciation is based on an average useful life of 129 years. This equates to a total annual depreciation of $0.822m. Depreciation will commence from 2020/21 and is based on the assets coming over to Council from 1 July 2020, thus a full year of depreciation has been factored in for the 2020/21 financial year.

Borrowing Costs

Section 621 of the Local Government Act 1993 allows the Council to borrow at a level determined by the Council via approval of the Revenue Policy contained within the annual Operational Plan. Borrowing to build, renew and upgrade community assets is recognised across the industry as a prudent financial strategy when used to fund the cost of long life assets, refer to Principle D of the LTFP.

Wages for 2018/19 are based on an award increase and salary system movements of 3.25%. A vacancy factor of 3% is built into the 2018/19 budget and this is included in all later year projections. Staffing levels have been assumed as being stable apart additional resourcing associated with maintenance obligations attached to asset growth. Calculations for this large expenditure category was also informed by the Workforce Management Plan, as well as legislative requirements for superannuation increases and any changes to workers’ compensation legislation.


Loan borrowings have been factored in for the capital projects listed below. This is despite Council forecasting to have significant available cash levels from 2021/22 onwards in line with the Shell Cove project profit distribution. All new loans are based on a 20 year term at 4.00% p.a. The new loans are:• Shell Cove Wet and Dry Marina Business loan - $17.0m to be gradually drawn down from 2018/19

in line with expected capital spend budget.• Warilla Beach Rockwall - $4.0m to part fund the Warilla Beach Rockwall remediation works.• Tripoli Way (Albion Park Bypass) – $5.7m loan to part fund the Tripoli Way capital works.

Repayments currently included in the LTFP include:

Road RenewalBorrowings from 2012/13 under the Local Infrastructure Renewal Scheme (LIRS) – Round 1 for $3m expenditure on the renewal of Council’s road infrastructure. The term of this loan is 10 years.

Shellharbour Beachside Holiday Park Amenity ImprovementBorrowings from 2014/15 for $0.6m, with repayments to be funded from the Crown Reserve Restriction. The term of this loan is 10 years and was for the renewal of the existing amenities building and delivery of a camp kitchen.

A further loan of $0.4m was taken out to fund the installation of additional cabins . The term of this loan is also 10 years.

Stadium roof replacementBorrowings were drawn down in 2014/15 for the Stadium Roof replacement for $0.987m. The term of this loan is 10 years.

Civic CentreLoan borrowings commenced late in 2016/17 for the Civic Centre project. The LTFP includes $12.78m of borrowings over a 20 year term.

The Links 45 Lot SubdivisionLoan borrowings of $6m for The Links 45 lot land subdivision works commenced in 2017/18. The loan is to be repaid in 2018/19 which will be funded from the land sales revenue.

Capital Expenditure

The majority of the capital expenditure program included in the LTFP are for the renewal of existing assets. These costs are informed by the information contained in Council’s Asset Management Strategy. There is however some new capital expenditure items which is not unusual in a growing local government area. Refer below for key items:


• The new Warilla Library capital spend to span $1.7m in 2018/19 and $1.9m in 2019/20.• Warilla Beach Rockwall: Capital spend of $1.6m in 2018/19, $4.3m in 2019/20 and $2.7m in

2020/21. $4.0m to be funded from a loan, $4.0m from potential grants and the remainder from SRV (including the loan repayments).

• Tripoli Way: $26.0m has been budgeted across multiple years. $1.2m in 2018/19 (includes $0.963m for land acquisitions), $8.1m in 2021/22, $8.1m in 2022/23 and $8.6m in 2023/24.

• Capital expenditure associated with the Shell Cove Wet and Dry Marina business assets will span multiple years. $6.7m in 2018/19 (includes capitalised loan interest), $6.4m in 2019/20, $2.5m in 2020/21, $0.623m in 2021/22, $0.750m in 2022/23 and $0.425m in 2023/24.

Other Assumptions

Refer below for other assumptions that underpin Council’s LTFP:• Utility costs increasing at 19.3% for 2019/20 then 3% each year after. Considers the timing of the

existing contract through Local Government Procurement.• Insurance costs growth set at 4% p.a. based on average annual increase between 2015 and

2018.• Materials and contracts as well as other expenses growth over LTFP is based on CPI of 2.5%.• The EPA waste levy has been increased by cpi each year only. Any population growth is not

expected to have a material impact on the overall annual cost.• From 2021/22 the asset renewal spend increases above the current Special Rates Variation

funded capital budgets. The additional expenditure will be funded from general revenue.• Shell Cove Marina/Harbour assets (non-business) estimated valuation is $106.1m. Expected

handover dates are $17.5m in 2020/21, $43.7m in 2021/22 and $44.9m in 2022/23. • Shell Cove project profit distribution of $79.8m is expected to be received in the following

components: $14.2m (2021/22), $29.2m (2022/23), $17.9m (2023/24), $14.1m (2024/25), $4.4m (2025/26).

• Shell Cove Marina business operational costs commence in 2019/20. The first 2 years will see operational losses of $1.9m (2019/20) and $1.2m (2020/21) before seeing a profit of $0.316m in 2021/22.

• Land Sales expected are:• Subdivision A – $15m of revenue less $8.0m COGS (estimated land value & subdivision

works) in 2018/19; $7.0m of revenue less $3.7m COGS in 2019/20.• Subdivision B - $3.0m revenue less $1.1m COGS (land book value) in 2018/19.• Subdivision C - $0.800m revenue less $0.139m COGS (land book value) in 2018/19.

• Population numbers used in Real Operating Expenditure per Capita ratio expected to increase on average 2.07% per year over the 10 year period. This is based on data from “Forecast id” website plus additional population growth expected from Calderwood and Shell Cove.

• To assist Council in accounting for different types of waste and waste funding at Council’s Waste depot, a new approach to accounting for residential waste was introduced during the 2015/16 financial year. In November 2017, the reporting approach was highlighted by Council staff for review, as although there was no net impact on Council’s operating performance or financial position, the approach may be inconsistent with relevant accounting standards.

Major Projects

For details on major projects refer to Asset Management Strategy.


Financial Performance and Sustainability

PRINCIPLE A - Council spending should be responsible and sustainable, aligning general revenue and expensesPRINCIPLE C - Councils should have effective financial and asset management

Operating Performance Ratio

How well is Council managing its finances in terms of containing operating expenditure within operating revenue?

Operating performance ratio is an important measure as it provides an indication of whether a Council is containing its operating expenditure within its operating revenue.

Ratio = Operating revenue excluding capital grants and contributions less operating expenses divided by operating revenue excluding capital grants and contributions.

What do the results tell us?

Council exceeds the breakeven benchmark for all years reflected in the graph below. The peak in the ratio in 2018/19 relates to land sales revenue from three subdivisions. The large increases from 2021/22 can be attributed to the distribution of the Shell Cove project profits.

Benchmark is > 0%


PRINCIPLE A - Council spending should be responsible and sustainable, aligning general revenue and expenses

Own Source Revenue Ratio

How reliant is Council upon external funding sources such as Operating Grants and Contributions?

Own source revenue measures the degree of reliance on external funding sources (eg. Grants and Contributions). Financial flexibility increases as the level of own source revenue increases and gives Council greater ability to respond to external shocks or challenges.

Ratio = Total revenue (excluding grants and contributions) divided by total operating revenue (inclusive of capital grants and contributions).


Council meets the benchmark for this indicator and is projected to continue to do so in the future. The result indicates that Council has sufficient financial flexibility due to its levels of discretionary revenue.The decrease in 2021/22 and 2022/23 years is the result of Council receiving $106.1m of Shell Cove assets which are required to be recognised as Capital Contributions.


PRINCIPLE D - Councils should have regard to achieving intergenerational equity infrastructure and Service Management

Debt Service Ratio

What impact is loan repayments (principle & interest) having on the discretionary Revenue of Council?

Prudent and active debt management is a key part of Council’s approach to funding and managing infrastructure over the longer term.

Ratio = Total of Loan repayments is divided by income from continuing operations excluding capital grants and contributions.


Council’s debt levels are relatively low when compared to the Fit for the Future maximum benchmark for this ratio of 20%. The ratio peaks in 2018/19 based on repaying a short term loan. Loan borrowings are used to smooth funding costs and equitably spread the cost of assets across current and future generations of users.

Benchmark is greater than 0% but less or equal to 20%.


PRINCIPLE A - Council spending should be responsible and sustainable, aligning general revenue and expensesPRINCIPLE C - Councils should have effective financial and asset management

Real Operating Expenditure

Is real expenditure per capita declining over time?

The ratio measures real per capita productivity over time. The ratio excludes fair value adjustments, revaluation, gain/loss on sale of assets and interests in joint ventures. As Council adds additional services to the community, a declin-ing real expenditure per capita ratio will be challenging.

Ratio = Operating Expenditure (excl. inflation) / population (Benchmark: Declining over 5 year period).


Initially the ratio increases in 2018/19 but declines over time (as per benchmark) to 2021/22 after adjustments for inflation and population movements.



Infrastructure Renewals Ratio

Is Council renewing existing infrastructure?

The infrastructure renewals ratio assesses the rate at which assets are being renewed against the rate at which they are depreciating.

Ratio = Asset renewals (building, infrastructure and other structures) is divided by Depreciation, Amortisation and Impairment (building, infrastructure and other structures).


The ratio peaks in 2016/17 due to the annual renewal program funded from the special rate variation along with the renewal works of major capital projects. The ratio then reverts to the benchmark of 100% from 2018/19 onwards for the remainder of the LTFP based on the required amount of additional funds coming from the Operating Performance Ratio surplus.

Benchmark >100%



Infrastructure Backlog Ratio

Is Council infrastructure at a satisfactory level?

Satisfactory level is achieved when Council’s estimates the cost to bring Council’s poor conditioned infrastructure assets to a satisfactory standard is below 2% of total written down value.

Ratio = Estimates cost to bring assets to a satisfactory condition / Total WDV of infrastructure, buildings, other structures and depreciable land improvement assets.


As a result of Council’s asset renewal strategy funded from the Special Rate Variation combined with an effective maintenance program has resulted in the cost to bring poor conditioned infrastructure assets to a satisfactory condition below the 2% benchmark.

Benchmark < 2%



Asset Maintenance Ratio

Is Council investing enough funds to reduce the infrastructure backlog?

An effective maintenance program allocates sufficient asset maintenance funds that meet or exceed the estimated level of maintenance.

Ratio = Estimated level of asset maintenance / required level of asset maintenance


Council is maintaining assets above the required level of asset maintenance throughout the LTFP. This is achieved by implementing an effective assets renewal program and allocating sufficient funds for maintenance.

Benchmark >100%


Acco

unt D

escr

iptio

n18

/19

19/2

020

/21

21/2

222

/23

23/2

424

/25

25/2

626

/27

27/2

8

Income

Rate

s & A

nnua

l Cha

rges

58,9

1161

,594

64,3

9967

,333

70,4

0173

,610

76,9

6680

,476

84,1

4787

,986

User

Cha

rges

& F

ees

18,4

9519

,233

19,7

8420

,278

20,7

8521

,304

21,8

3722

,383

22,9

4323

,516

Inte

rest

& In

vest

men

t Rev

enue

s3,

042

3,34

33,

509

2,97

32,

992

4,11

84,

813

5,37

25,

657

5,81

4O

ther

Rev

enue

s22

,803

13,5

307,

962

24,2

5540

,729

30,3

1827

,344

17,2

8013

,298

13,6

61O

pera

ting

Gran

ts &

Con

tribu

tions

5,30

17,

871

8,00

38,

170

8,35

28,

551

8,75

98,

973

9,19

49,

420

Capi

tal G

rant

s & C

ontri

butio

ns44

,473

24,9

1738

,601

64,9

1667

,199

20,5

8419

,662

17,8

1118

,645

17,0

74Ne

t Gai

ns fr

om D

ispos

al o

f Ass

ets

174

7110

975

6190

8430

613

771

Tota

l Inc

ome

153,

199

130,

559

142,

367

188,

000

210,

520

158,

576

159,

465

152,

601

154,

021

157,

543

Expenses

Empl

oyee

Ben

efits

& O

ncos

ts35

,574

37,2

6238

,383

39,8

5941

,266

42,3

5343

,417

44,4

8745

,620

46,7

49Bo

rrow

ing

Cost

s1,

140

1,44

21,

629

1,61

81,

542

1,48

31,

641

1,57

21,

509

1,43

9M

ater

ials

& C

ontra

cts

31,0

2926

,419

23,1

3723

,898

24,6

9425

,907

26,3

0627

,463

28,0

2529

,100

Depr

ecia

tion

& A

mor

tisat

ion

14,7

3515

,600

16,4

6617

,090

17,8

3917

,927

18,1

1918

,210

18,2

9118

,357

EPA

Was

te Le

vy6,

748

6,91

87,

095

7,27

17,

450

7,63

47,

823

8,01

68,

214

8,41

7O

ther

Exp

ense

s9,

068

10,6

8011

,755

12,1

6412

,665

13,1

8813

,978

13,8

4214

,253

14,6

12

Tota

l Exp

ense

s98

,294

98,3

2198

,465

101,

899

105,

456

108,

492

111,

283

113,

589

115,

912

118,

674

Net

Ope

ratin

g Su

rplu

s/(D

efici

t)54

,906

32,2

3843

,902

86,1

0010

5,06

450

,084

48,1

8239

,013

38,1

1038

,869

Net

Ope

ratin

g Su

rplu

s/(D

efici

t) Be

fore

Cap

ital

10,4

337,

321

5,30

121

,184

37,8

6529

,500

28,5

2121

,202

19,4

6421

,795

less

: Com

mer

cial P

rope

rty

Deve

lopm

ent

(9,6

45)

(3,2

57)

00

00

00

00

less

: She

ll Cov

e Ve

ntur

es &

Div

iden

d *

100

1,95

91,

149

(14,

432)

(30,

941)

(20,

516)

(17,

620)

(8,1

77)

(3,8

59)

(4,0

03)

Coun

cil O

pera

tions

- N

et O

pera

ting

Surp

lus/

(Def

icit)

Befo

re C

apita

l88

86,

023

6,45

06,

752

6,92

48,

984

10,9

0113

,025

15,6

0517

,792

* inc

lude

s ad

ditio

nal i

nter

est o

n in

vest

men

t rev

enue

resu

lting

from

the

Shel

l Cov

e di

vide

nd

Inco

me

Stat

emen

t ‘0

00


Accoun

tDescriptio

n18

/19

19/20

20/21

21/22

22/23

23/24

24/25

25/26

26/27

27/28

Curren

tAssets

Cash

&CashEq

uiva

lents

5,12

35,43

54,72

65,39

86,02

66,26

96,34

36,65

47,87

68,83

6Cu

rren

tInv

estm

ents

27,322

43,517

42,944

37,944

40,546

46,597

45,964

45,872

46,411

46,411

Curren

tRec

eiva

bles

6,03

56,30

26,56

36,83

07,10

97,40

07,70

38,01

98,34

98,69

3Inve

ntories

4,48

876

478

380

282

284

386

488

690

893

0OtherCurrentAssets

636

651

668

684

701

719

737

755

774

794

Non

-currentassetsc

lassified

ash

eldfors

ale

00

00

00

00

00

TotalCurrentAssets

43,603

56,669

55,684

51,659

55,205

61,828

61,611

62,186

64,319

65,665

Non

-CurrentAssets

Non

-currentin

vestmen

ts53

,053

42,129

43,080

53,315

77,320

103,50

413

3,24

515

4,44

417

1,91

219

3,91

9Non

-currentre

ceivab

les

1,19

41,25

41,31

61,38

21,45

11,52

41,60

01,68

01,76

41,85

2Infrastruc

ture,P

rop,Plant&

Equ

ip80

8,95

485

0,29

289

6,21

697

7,46

81,05

4,32

91,07

6,57

41,09

3,95

31,10

9,93

41,12

7,13

51,14

1,37

2Inve

stmen

tPrope

rty

19,426

19,426

19,426

19,426

19,426

19,426

19,426

19,426

19,426

19,426

Intang

ibleAssets

4,33

93,27

62,85

62,45

92,57

42,71

42,87

73,06

53,27

83,51

8

TotalN

onCurrentAssets

886,96

691

6,37

796

2,89

51,05

4,05

01,15

5,10

11,20

3,74

11,25

1,10

11,28

8,54

91,32

3,51

51,36

0,08

7

TotalA

ssets

930,56

997

3,04

61,01

8,57

81,10

5,70

91,21

0,30

61,26

5,56

91,31

2,71

11,35

0,73

51,38

7,83

41,42

5,75

2

Curren

tLiabilities

Curren

tPay

ables

11,242

12,038

12,552

12,955

13,397

13,973

14,385

14,748

15,098

15,589

Curren

tBorrowings

1,93

42,10

32,06

51,78

51,81

21,88

21,78

11,81

01,88

71,30

2Cu

rren

tProvisio

ns13

,676

14,325

14,756

15,323

15,864

16,282

16,364

16,438

16,526

16,603

TotalCurrentLiabilities

26,852

28,466

29,373

30,063

31,073

32,137

32,530

32,997

33,511

33,494

Non

-CurrentLiabilities

Non

-currentBorrowings

19,658

27,968

28,370

28,383

26,571

30,345

28,564

26,753

24,866

23,564

Non

-currentProvisio

ns15

,820

16,135

16,457

16,784

17,119

17,460

17,808

18,163

18,525

18,894

TotalN

onCurrentLiabilities

35,478

44,104

44,827

45,168

43,690

47,805

46,372

44,916

43,391

42,458

TotalLiabilities

62,330

72,570

74,200

75,231

74,763

79,942

78,902

77,913

76,903

75,952

NetAssets

868,23

990

0,47

694

4,37

81,03

0,47

91,13

5,54

31,18

5,62

71,23

3,80

91,27

2,82

21,31

0,93

11,34

9,80

0

Equity

Retained

Earning

s49

6,12

452

8,36

157

2,26

365

8,36

476

3,42

881

3,51

286

1,69

490

0,70

793

8,81

697

7,68

5Re

valuationRe

serves

372,11

537

2,11

537

2,11

537

2,11

537

2,11

537

2,11

537

2,11

537

2,11

537

2,11

537

2,11

5

TotalEqu

ity86

8,23

990

0,47

694

4,37

81,03

0,47

91,13

5,54

31,18

5,62

71,23

3,80

91,27

2,82

21,31

0,93

11,34

9,80

0

TotalEqu

ity86

8,23

990

0,47

694

4,37

81,03

0,47

91,13

5,54

31,18

5,62

71,23

3,80

91,27

2,82

21,31

0,93

11,34

9,80

0

Bal

ance

Sh

eet

‘00

0


Accoun

tDescriptio

n18

/19

19/20

20/21

21/22

22/23

23/24

24/25

25/26

26/27

27/28

CashFlowsfromOpe

ratin

gAc

tivities

Receipts:

Rate

s&A

nnua

lCha

rges

58,6

9161

,331

64,1

3667

,062

70,1

1773

,312

76,6

5480

,149

83,8

0487

,627

User

Cha

rges

&F

ees

18,4

4819

,169

19,7

2220

,216

20,7

2121

,239

21,7

7022

,314

22,8

7223

,443

Inte

rest

&In

vest

men

tRev

enue

s3,

042

3,34

33,

509

2,97

32,

992

4,11

84,

813

5,37

25,

657

5,81

4Oth

erR

even

ues

3,95

36,

530

7,96

224

,255

40,7

2930

,318

27,3

4417

,280

13,2

9813

,661

Ope

ratin

gGr

ants

&C

ontr

ibut

ions

5,30

17,

871

8,00

38,

170

8,35

28,

551

8,75

98,

973

9,19

49,

420

Capi

talG

rant

s&C

ontr

ibut

ions

6,86

27,

060

5,18

04,

165

6,37

35,

429

2,81

62,

245

2,14

01,

919

Paym

ents:

Empl

oyee

Ben

efits

&O

ncos

ts(3

4,95

0)(3

6,61

3)(3

7,95

2)(3

9,29

1)(4

0,72

5)(4

1,93

5)(4

3,33

5)(4

4,41

2)(4

5,53

2)(4

6,67

2)Bo

rrow

ing

Cost

s(8

31)

(1,1

27)

(1,3

07)

(1,2

90)

(1,2

08)

(1,1

42)

(1,2

93)

(1,2

17)

(1,1

47)

(1,0

70)

Mat

eria

ls&

Con

trac

ts(2

1,68

2)(2

2,26

4)(2

2,89

0)(2

3,71

3)(2

4,48

8)(2

5,62

6)(2

6,12

0)(2

7,30

1)(2

7,87

2)(2

8,86

9)Oth

erE

xpen

ses

(15,

701)

(17,

249)

(18,

619)

(19,

253)

(19,

916)

(20,

565)

(21,

613)

(21,

696)

(22,

311)

(22,

812)

Netca

shprovide

d(oru

sedin)o

peratin

gactiv

ities

23,133

28,051

27,745

43,294

62,948

53,699

49,794

41,707

40,103

42,461

CashFlowsfromIn

vestingAc

tivities

Receipts:

Sale

ofI

nves

tmen

ts22

,816

11,7

4324

,638

23,7

8030

,408

32,7

8038

,908

52,9

0863

,508

68,5

08Sa

leo

fRea

lEst

ate

Asse

ts18

,850

7,00

00

00

00

00

0Sa

leo

finf

rast

ruct

ure,

pro

pert

y,p

lant

and

equ

ipm

ent

271

135

206

142

115

170

159

577

259

135

Paym

ents:

Purc

hase

ofi

nfra

stru

ctur

e,p

rope

rty,

pla

nta

nde

quip

men

t(3

7,41

5)(3

8,08

1)(2

8,64

6)(3

7,26

1)(3

4,04

2)(2

5,23

5)(1

8,89

0)(1

9,08

5)(1

9,32

2)(1

7,74

2)Pu

rcha

seo

fInv

estm

ents

(27,

015)

(17,

015)

(25,

015)

(29,

015)

(57,

015)

(65,

015)

(68,

015)

(74,

015)

(81,

515)

(90,

515)

Netca

shprovide

d(oru

sedin)investin

gactiv

ities

(22,493)

(36,219)

(28,818)

(42,354)

(60,535)

(57,300)

(47,838)

(39,615)

(37,070)

(39,614)

CashFlowsfromFinan

cing

Activities

Receipts:

Proc

eeds

from

Bor

row

ings

&A

dvan

ces

6,40

810

,413

2,46

71,

798

05,

656

00

00

Paym

ents:

Repa

ymen

tofB

orro

win

gsa

ndA

dvan

ces

(7,5

13)

(1,9

34)

(2,1

03)

(2,0

65)

(1,7

85)

(1,8

12)

(1,8

82)

(1,7

81)

(1,8

10)

(1,8

87)

Netca

shprovide

d(oru

sedin)finan

cingactivities

(1,105)

8,47

936

4(267)

(1,785)

3,84

4(1,882)

(1,781)

(1,810)

(1,887)

Net(increase)/decreaseinca

sh(465)

312

(709)

672

628

243

7431

11,22

296

0

Stat

emen

t o

f Cas

h F

low

‘00

0


Sensitivity Analysis/Scenario ModellingLong term financial plans contain a wide range of assumptions, which if do not occur, may have varying levels of impact on future financial plans.

The following scenarios include modifications to some of the main assumptions made in Council’s long term financial plan.

Scenario 1 – Planned - as per assumptions outlined in this document.

Scenario 2 – Increase – this includes an increase in movements in some of the main assumptions from the planned scenario as outlined below.

Inflation – increase by 1% from the planned scenario of 2.5%. This will impact User Charges and Fees, Operating Grants and Contributions, Employee Benefits, Materials and Contracts and Other Expenses. This is applicable from 2019/20 onwards.

Dwelling Growth – Increase by 1% from the planned scenario. This will impact Rates and Annual Charges. This is applicable from 2019/20 onwards.

Rate Peg – Increase by 1% from planned scenario of 2.5%. This will impact Rates and Annual Charges. This is applicable from 2019/20 onwards.

Interest Returns – Increase by 0.5% from planned scenario. This will impact Interest and Investment Revenues. This is applicable from 2019/20 onwards.

The net impact of the scenario is a surplus of $33.6m in 2027/28 compared to the planned surplus of $21.8m.

Scenario 3 – Decrease – this includes a decrease in movements in some of the main assumptions from the planned scenario as outlined below.

Inflation – decrease of 1% from the planned scenario of 2.5%. This will impact User Charges and Fees, Operating Grants and Contributions, Employee Benefits, Materials and Contracts and Other Expenses. This is applicable from 2019/20 onwards.

Dwelling Growth – growth decreases to 1.18% based on additional forecast growth in Shell Cove and Calderwood not occurring within LTFP timeframe. This will impact Rates and Annual Charges. This is applicable from 2019/20 onwards.

Rate Peg – Decrease of 1% from planned scenario of 2.5%. This will impact Rates and Annual Charges. This is applicable from 2019/20 onwards.

Financial Assistance Grant – A freeze on this grant is imposed from 19/20 onwards. This will impact on Operating Grants and Contributions. This is applicable from 2019/20 onwards.

Interest Returns – Decrease by 0.5% from planned scenario. This will impact Interest and Investment Revenues. This is applicable from 2019/20 onwards.

The net impact of the scenario is a surplus of $10.7m in 2027/28 compared to the planned surplus of $21.8m. The detail impacts of the assumption changes in scenarios 2 and 3 have been modelled in the following 10 year income statements.


Prin

ted:

27/

6/18

3. In

com

e S

tate

men

t _LT

FP S

ensi

tivity

_Sce

nario

2_1

9061

8.xl

sxPa

ge: 1

of 1

LTFP

Inco

me

Stat

emen

t - S

cena

rio 2

incr

ease

Acco

unt D

escr

iptio

n20

18/1

920

19/2

020

20/2

120

21/2

220

22/2

320

23/2

420

24/2

520

25/2

620

26/2

720

27/2

8

Income

Rate

s & A

nnua

l Cha

rges

58,9

11,3

1462

,715

,659

66,7

68,5

5771

,086

,333

75,6

86,3

9080

,587

,276

85,8

08,7

6491

,371

,931

97,2

99,2

4310

3,61

4,64

9Us

er C

harg

es &

Fee

s18

,495

,285

19,4

17,8

7020

,167

,495

20,8

72,9

3521

,603

,487

22,3

59,6

0923

,142

,196

23,9

52,1

7324

,790

,499

25,6

58,1

66In

tere

st &

Inve

stm

ent R

even

ues

3,04

2,21

83,

346,

603

3,51

6,44

62,

984,

784

3,00

8,29

94,

138,

957

4,83

9,85

25,

405,

318

5,69

6,54

95,

861,

312

Oth

er R

even

ues

22,8

02,6

8513

,541

,326

7,98

6,01

024

,295

,332

40,7

87,4

9530

,395

,084

27,4

41,1

9317

,399

,928

13,4

41,7

6213

,830

,310

Ope

ratin

g Gr

ants

& C

ontri

butio

ns5,

300,

771

7,94

4,14

08,

154,

295

8,40

4,59

58,

676,

134

8,97

0,69

29,

280,

328

9,60

2,66

19,

938,

256

10,2

87,7

13Ca

pita

l Gra

nts &

Con

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5220

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19,6

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5617

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18,6

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6817

,074

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Net G

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3,19

9,23

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614

5,30

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2,63

5,02

321

7,02

1,94

216

7,12

6,14

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0,25

8,41

216

5,84

8,40

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2

Expenses

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efits

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37,5

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9845

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Cost

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31,0

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29,7

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88,7

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Ca

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8,09

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16


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21/2

220

22/2

320

23/2

420

24/2

520

25/2

620

26/2

720

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8

Income

Rate

s & A

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58,9

11,3

1460

,429

,130

61,9

86,7

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65,2

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68,6

36,5

9070

,409

,534

72,2

29,0

2874

,096

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Cha

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18,4

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19,4

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95,

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7,72

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67,

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7,79

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84


AssetManagement

Strategy


Asset Management PlanningCouncil exists to provide services to the Shellharbour community and many of these services are provided by infrastructure assets. Council is the custodian of infrastructure with replacement costs of $626 million. These assets have historically been constructed by Council and its contractors, or constructed and contributed by developers, through subdivisions, agreements and works in-kind.

Shellharbour City Council’s primary asset management objectives are:• To sustainably manage all assets• To provide a desirable level of service for the assets under its stewardship for the current and

future community

The Asset Management Framework (Figure 1) is made up of three components:

1. Asset Management Policy – sets the framework for undertaking asset management.2. Asset Management Strategy – enables Shellharbour City Council to show how its asset portfolio

supports the delivery service needs of the community now and into the future. 3. Asset Management Plans – are tactical plans outlining particular actions and the resources

required to provide desired levels of service for each class of asset under Council’s control.

Figure 1 - Asset Management Framework


The Asset Management PolicyCouncil’s Asset Management Policy, along with the Strategy, sets the framework for undertaking Asset Management. The policy aims to ensure Council has information, knowledge and understanding about the long term and cumulative consequences of being the custodian of community assets. This will be achieved by ensuring systems, processes and people are able to make informed decisions on the most efficient option for the delivery of services.

Council is committed to implementing a systematic asset methodology in order to apply appropriate Asset Management practices across all areas of Council. Asset Management practices impact directly on the core business of Council and appropriate asset management is required to achieve the strategic Objectives as outlined in the Community Strategic Plan (CSP) and Long Term Financial Plan (LTFP).

The Asset Management Policy is provided in Appendix A.


Asset Management StrategyThe Asset Management Strategy forms a part of the Resourcing Strategy and is a structured set of actions aimed at improving Council’s Asset Management capability and projected resource requirements for the coming 10 years. The purpose of the Asset Management Strategy is to specify objectives and outcomes that provide the link between the high level aspirations and guiding principles articulated in the Asset Management Policy and the operational and tactical aspects of Council’s Asset Management framework (especially the development of Asset Management Plans). It does this by specifying Asset Management outcomes and timeframes of what Council proposes to achieve. These activities form the basis of Council’s Delivery Program.

The objectives of Council’s Asset Management system are:

• To sustainably manage all of Shellharbour City Council’s assets and achieve an asset renewal ratio greater than 1.0.

• To provide the desired level of service for the assets under its stewardship for its current and future communities.

• Allow Shellharbour City Council to strategically plan asset renewals and identify required upgrades.

The Key Strategies identified for Shellharbour City Council’s Asset Management Strategy have been provided in Table 1. Certain key strategies have been largely achieved for most of the asset classes, though require some additional information for full accomplishment. Those strategies which have been partially achieved are currently being undertaken as a priority by Council’s Asset staff. Whilst for these strategies there has been a substantial body of work undertaken in the previous years, only ‘core’ level information was available. In 2017/18 Council embarked on a comprehensive data gathering and inspection program to allow for up to date data to be used to achieve these key strategies in the coming years.

Through the previous Resourcing Strategy period, Council has:

• Implemented an integrated financial and asset system as part of the Tech One enterprise solution.• Facilitated and undertaken financial reporting on asset condition, value and performance.• Complied with all regulatory requirements for Asset Management.• Developed draft Asset Management Plans identifying critical assets and appropriate risk

management strategies.• Identified additional funding sources to address any life cycle ‘gaps’ for key assets.

Shellharbour City Council is continually refining the currently achieved Strategies and undertaking works to accomplish all the identified strategies to an advanced level.


Table 1 - Key StrategiesKey Strategies Complete Significant

ProgressPartial Progress

Key Strategy 1 Integrate the financial and maintenance aspects of asset management P

Key Strategy 2 Facilitate management of the total asset lifecycle for all assets and any new assets be supported by a ‘whole of life’ cost analysis.

P

Key Strategy 3

Establish levels of service and develop consistent work management processes that achieve these levels of service and ensure operational efficiencies

P

Key Strategy 4

Optimise the life of assets through better forecasting of required maintenance for the total lifecycle of the asset (i.e. from planning through to disposal)

P

Key Strategy 5 Provide information to support replacement versus rehabilitation decisions P

Key Strategy 6 Enable the business to evolve from reactive to programmed maintenance where possible P

Key Strategy 7 Facilitate reporting on asset condition, value and performance P

Key Strategy 8 Comply with regulatory requirements P

Key Strategy 9

Ensure that all of Council’s Assets are identified and have in place Asset Management Plans that are consistent with Council’s Assets Management Policy, contemporary Asset Management practice and the Shellharbour City Council CSP.

P

Key Strategy 10

Asset Management section of Council to be resourced to reflect the service and operational needs of Council. This may take the form of separate planning, budgetary, data collection and asset management system functions within this role.

P

Key Strategy 11

Increase the appropriate usage and implementation of Council’s Asset Management System to enable it to become a ‘corporate’ tool supporting the Council’s Asset Management Plans.

P

Key Strategy 12

Continue to evaluate the condition of Council’s assets so that the useful life of these assets can be more accurately estimated. This may take the form of geotechnical assessments of Council’s road pavements or remote video footage of Council’s drainage pipelines.

P

Key Strategy 13

Align the level of services when maintaining Council’s asset inventory with the community Objectives contained in the CSP. This will ensure that the assets Council has stewardship of, are well maintained and appropriate to the community’s needs.

P

Key Strategy 14 That the consideration of any new assets be supported by a ‘whole of life’ cost analysis. P


Key Strategies Complete Significant Progress

Partial Progress

Key Strategy 15 That Asset Management Plans identify critical assets and associated risk management strategies.

P

Key Strategy 16

Identify additional sources of funding which can be used to narrow the life cycle ‘gap’ for Council’s key assets. This may be in the form of grants or loan funds for specific renewal works.

P

The Asset Management PlansThe objective of an Asset Management Plan (Plan) is to outline the particular actions and resources required to provide a defined level of service in the most cost effective manner. The Plans will take a long-term snapshot, linking the first 10 years into the LTFP. Individual Plans have been drafted to a core level, though further improvements to the documents are to be undertaken before they are to be formally endorsed by Council. Work is ongoing to improve asset data, condition assessments and evaluated data that will increase integrity and accuracy of the Plans. The Plans cover the below asset classes:• Buildings and Aquatic Facilities.• Roads and Transport.• Stormwater Drainage.• Opens Space and Recreational Facilities.• Major Sites and Businesses.

Given some of the large-scale developments, businesses and unique buildings to be constructed in the coming years, Council’s Asset Management team will also be seeking to develop individual Plans for these sites. As these sites contain assets with unique and sometimes complex requirements, their management will be considered on an individual basis.

It is anticipated Council’s Asset Management Plans will help to determine the Levels of Service (LoS) needed by the community, document the LoS currently provided, and enable Council to allocate funding in accordance with community priorities and affordability. In preparing the Asset Management Plans, Council has developed these Plans ‘in-house’ with adherence to legislated requirements. Plans will continue to evolve and become more comprehensive through a process of continual improvement.


Current AssetsCouncil is the custodian of infrastructure assets with a replacement cost of $626m. This figure has been revised after Council undertook a revaluation of its Assets in 2015, reducing its liabilities. The infrastructure assets are broken into the five categories shown in Table 2 below to align with Council’s annual reporting requirements:

Shellharbour City Council completed a revaluation of all assets, effective 1 July 2015. Jeff Roorda and Associates (JRA) were engaged to conduct an initial critical review of the valuation data and provide recommendations for improvement. The primary finding by JRA was that the overall depreciation was being overstated with a benchmark figure of 1-1.5% compared to Councils 1.84%. This was primarily attributed to the useful lives and unit rates of footpaths and kerb and gutter being overly conservative, along with the road asset structure no longer reflecting current engineering practices. The recommendations of JRA were accepted by Council and a revaluation was undertaken resulting in an annual depreciation of approximately 1.53% of current infrastructure asset replacement costs. Council will be reviewing these figures in conjunction with other Council’s, NSW Government departments, its auditors and industry bodies, to ensure asset valuations are supported with industry benchmarks and within expected valuations.

Table 2 - Asset categories

Asset ClassReplacement Cost

(as at 30 June 2017) Written Down Value(as at 30 June 2017)

Annual Depreciation (as at 30 June 2017)

Buildings $99,874,841 $50,322,637 $2,819,735Roads & Transport $247,384,206 $191,458,194 $3,759,907Stormwater & Drainage $247,343,746 $172,063,446 $2,107,791Open Space & Recreational Facilities $21,229,803 $9,793,374 $684,947Other Infrastructure Assets and Structures $10,035,965 $8,257,788 $198,968Total $625,868,562 $431,895,439 $9,571,349

Asset Management Plans have been prepared at an asset class level and incorporated the following assets as shown in Table 3 below.

Table 3 - Asset classesAsset Class Council Assets

(Owns, Manages, Is Custodian of)

Services Provided

Buildings

Amenities / ToiletsChild CareCommunity CentresLibraries and MuseumCouncil BuildingsSport and Recreational BuildingsSwimming Pools

• Direct service provision for the general community, and including specific services to target groups such as older people, people with a disability, children, young people, people from disadvantaged socio-economic background

• Provision of sporting amenities and canteen facilities to local clubs and sporting associations

• Provision of Tourist Information Centres


Asset Class Council Assets (Owns, Manages, Is Custodian of)

Services Provided

Roads & Transport

Guardrails, Barriers and Street FurnitureBridgesCar ParksFootpaths & CyclewayRoads

• Provide a transport network of roads and pathway

Stormwater & Drainage

Culverts and HeadwallsDrainage Pits and PipesKerb & GutterOpen DrainsPollution Traps

• Control localised flooding• Improve road safety• Protect local environment from stormwater run off• Protect the environment from pollution

Open Space & Recreational

Other Council StructuresParks & ReservesSport & Recreation

• Provide sport and recreation choices• Provide passive recreational opportunities

Other Infrastructure Assets and Structures

Other InfrastructureAirport RunwaysOther Structures

• Facilitate Council’s Regular Passenger Transport and private businesses at Illawarra Regional Airport

Assets held by Council at the end of 2016/17Infrastructure assets managed by Council include sealed and unsealed local roads, stormwater drainage, recreation facilities and Council buildings. Figure 2 below summarises the asset portfolio currently held by Council at the end of the 2016/17 financial year.

Figure 2 - Assets held by Shellharbour City Council


Figure 3 - Change in condition of Council assets

Council has plans to build new assets, as well as those it receives from Developers. A brief analysis of the 2018-2021 Council term has been undertaken to incorporate a one percent growth of the network based on previous year’s growth, projects in progress or completed that are to come online, and those anticipated to be contributed by Developers over the next three years. Figures 3 and 4 highlight the changing break-up of Council’s assets.

Traditionally Council has provided the largest renewal focus on its roads, however with the increased replacement cost of other asset classes, Council will need to manage its renewal spending accordingly. Council will attribute a greater portion of funding to the other asset classes in the 2018-2021 delivery program and is discussed further in the later chapters.

As these assets are new and therefore in excellent condition, they generally do not present an immediate maintenance and renewal liability. Nevertheless, the operations, maintenance and replacement of these assets will need to be accounted for as part of Council’s asset management practices. These costs will be examined in further detail within each Asset Management Plan, and the renewal obligations will be accounted for in Council’s Long Term Financial Planning.


Figure 4 - Current Replacement Cost of Council assets

Figure 5 - Projected Replacement Cost of Council Assets


BuildingsCouncil’s buildings category includes Council buildings, libraries, community and childcare centres, toilets and amenities, and recreational buildings. Figure 6 below provides a break-up of Council’s buildings portfolio based on replacement cost.

Figure 6 - Building Assets

The required cost to bring Council’s community buildings to a satisfactory standard as detailed in Council’s 2016/17 Financial Statements is approximately $0.544m. Council apportions its renewal spending considering the depreciation of the buildings, as well as backlog amounts reported in Special Schedule 7 of the Financial Statements. The extent of the backlog for buildings equates to approximately 1.1% of the Councils building values, below the benchmark of 2.0%.

To ensure the community’s assets are managed and maintained for current and future generations, condition assessments of Council owned and managed buildings have been undertaken. This work has been contracted to Public Works, NSW, on a phase-by-phase basis. Initially the highest priority assets are being progressed. Findings from this exercise will enable Council to properly plan future upgrade/renewal and maintenance needs and help minimise potential risks.

Civic Centre

Council finished constructing the Civic Centre in early 2018. The Civic Centre is a significant project delivered by a variety of funding sources and funding implications, including the Operations and Maintenance costs, and are accounted for in Council’s Long Term Financial Plan. It is proposed that eventually it will be the subject of its own Asset Management Plan to consider the unique requirements of Council’s largest building and newest assets, though it is currently encompassed in the Buildings Asset Management Plan. This asset alone has increased Council’s building portfolio by approximately 50% in value.

Amenities / Toilets, $6,087,641

Child Care, $3,546,000

Community Centres, $14,795,668

Libraries and Museum, $3,352,000Council Buildings, $101,505,260

Swimming Pools, $8,057,812Sport and Recreational Buildings, $42,688,272

Buildings


Warilla Library Relocation

The Warilla Library Relocation project commenced in Council’s 2017-18 Delivery Program and is expected to progress over the 2018-2021 Delivery Program. The Warilla Library Relocation will provide a contemporary library that is welcoming, flexible and accessible, offer meeting spaces and study areas, programs and a range of technology. Currently in the Development Application stage, construction is expected to commence in 2018/19 financial year. The Operation and Maintenance of the new Library is to be considered by Council’s Asset Management team as part of the Development process, and to be incorporated into future Building Asset Management Plans.

Shellharbour Beachside Holiday Park

Council actively pursues opportunities for its businesses to achieve their economic strategies to provide the community with a broad range of quality infrastructure, assets and facilities delivered in a cost-effective and sustainable manner. During the 2016/17 financial year, the construction of the Amenities building at the Shellharbour Beachside Holiday Park was completed. Plans are currently being developed for the installation of new cabins at the Park in the second half of 2018. The Holiday Park has enjoyed very strong occupancy all year as a result of continually improving infrastructure combined with the quality customer service experience for the clients. The full year financial result was a record high for the Park operation.

These projects are going to add in the order of 50% to the value of Council’s buildings portfolio, a significant increase to the required investment in Council’s buildings. Whilst there is no expected renewal required for these assets in the Long Term Financial Plan, there is still a need to account for future requirements in Councils financial reporting and Asset Management Plans. The Operations and Maintenance of all Council buildings are currently accounted for in Council’s Long Term Financial Plan (LTFP).

Aquatic Facilities

Council owns and operates four aquatic facilities that have a Capital Replacement Cost (CRC) of $8M. The four facilities were built about 40 years ago and have been well maintained. Although the facilities are generally in a satisfactory condition, there are a number of performance issues that may need to be addressed to achieve a desired Quality Standard or level of service. This could be unexpected due to their age, however there is little evidence of significant cracking or movement which would downgrade the condition. Water leakage can also be used to indicate the structural integrity of the pools, however the volume of pool water leakage has yet to be measured - if leakage is significant, this would be an indicator to a potential poorer condition. Although the pool filtration and treatment equipment meet statutory requirements, many components are old and have become unreliable.

The 20 year Asset Management Plan provides a summary of the operational maintenance expenditure that could be required over the next 20 years to address current backlog, to renew and replace assets, and to maintain the facilities.

The renewal and replacement analysis considers the deterioration and age of all assessed components. The analysis is based on modern like for like replacements and excludes upgrading pool plant with additional capacity or additional functionality.


Roads and TransportCouncil’s Roads and Transport asset category is made up of roads, bridges, footpaths and shared use paths, signs, and traffic measures as indicated in the Figure 7 below.

Figure 7 - Roads and Transport Assets

Council’s road network has undergone significant improvement in the preceding years. As reported in Council’s Annual Report, Council expended $3,929,947 on the Renewal of Road Infrastructure Assets as well as receiving $4,630,000 of Roads and Footpath Assets contributed by developers from subdivisions and developments handed to Council. The implication of these assets will be incorporated in future Roads Asset Management Plans. Road resurfacing and patching is a large focus of Council’s renewal program given the scale of the road network relative to other asset classes.

Shellharbour City Council has achieved a significant turnaround in the condition of the road network and previous backlog, those assets in poor or very poor condition, through effective allocation of funding and improved Asset Management practises. The current Asset Condition distribution of Road Assets is provided in the table below, with an estimated cost to bring assets to a satisfactory standard of $3,661,000, down significantly from $25m in 2013. This is an excellent result and outlines Council’s commitment to renewing its Infrastructure Assets.

Guardrails, Barriers and Street Furniture, $12,496,775

Bridges, $16,639,420

Car Parks, $7,854,469

Footpaths & Cycleway, $49,077,799

Roads, $166,912,743

Roads & Transport


0

0.1

0.2

0.3

0.4

0.5

0.6

Excellent Good Average Poor Very Poor

Perc

enta

ge o

f Ass

ets

Condition of Assets

Change in Condition of Road Assets

2015/16

2016/17

Figure 8 - Change in condition of Council road assets

Table 4 - Description of condition of the asset (Institute of Public Works Engineering Australasia (IPWEA), 2014)Condition Grading Description of Condition of the Asset

1 Very Good: only planned maintenance required

2 Good: minor maintenance required plus planned maintenance

3 Fair: Significant maintenance required

4 Poor: significant renewal/rehabilitation required

5 Very Poor: physically unsound and/or beyond rehabilitation

Albion Park Bypass (Tripoli Way)

Originally planned as part of Council’s Section 94 Contributions plan to be constructed in 2025/26, this project has been brought forward to coincide with the NSW State Government’s Albion Park Rail Bypass and provide a clear link between the new suburbs at Calderwood, Tullimbar and Yellow Rock. Land acquisitions have commenced, as well as concept designs, traffic modelling and economic appraisal. This large asset will significantly expand the value of Council’s roads assets by approximately 10%, with detailed analysis and implications to be examined within the Roads Asset Management Plan.


Stormwater and DrainageCouncil’s drainage network includes various stormwater drainage assets, including pits, pipes, and open drains, pollution control devices and kerb and guttering (Figure 9).

Figure 9 - Stormwater Drainage Assets

Council’s adopted Stormwater Management Service Charge Program incorporates the highest priority improvement projects as nominated in the strategies in addition to flood mitigation and stormwater harvesting works. Some of the works included several stormwater pit and pipe renewal and/or upgrade projects; upgrades to stormwater infrastructure and Gross Pollutant Traps (GPT), and stormwater pipe relining projects were completed in locations across the City. The total annual charge collected for stormwater management services in 2016/17 was $0.608m.

A key project this year has been the undertaking of condition assessments for the stormwater network. The data received from these inspections will inform future renewals and upgrades. The service charge continues to supplement State Government grants for the Macquarie Rivulet Floodplain Risk Management Study and Plan. Flood mitigation measures identified the in Plans, once adopted, will be incorporated into the Stormwater Program on a priority basis. In Conjunction with above, a Service Levels group has been set up within Council to determine the optimal Levels of Service and will allow Council to undertake appropriate Risk Management actions.

Culverts and Headwalls, $6,974,225

Drainage Pits and Pipes, $133,900,286

Kerb & Gutter, $93,723,383

Open Drains, $157,860

Pollution Traps, $12,587,993

Stormwater Drainage


Open Spaces and Recreational FacilitiesCouncil provides parks and reserves to enable a diverse range of quality passive and active recreation and leisure opportunities shown in Figure 10. Council owns and or manages in excess of 200 open spaces and recreational facilities, all of which require a level of maintenance.

Figure 10 - Open Space and Recreational Assets

Council’s Asset Team has identified as a current priority, the need to accurately model the additional maintenance expected from Parks and Open Space Assets that are to be contributed to Council from larger sub-divisions. Whilst Council has benefited immensely from improving asset data as part of the work that was undertaken for the implementation of the Technology One upgrade, as well as in the preparation of the Fit for the Future submission, there are still gaps in the information available to update the Asset Management Plan. In 2017 Council undertook a data improvement program for all current and future Parks and Open Space assets, which will better enable Council to accurately plan and prepare for the addition of these assets. The future additional maintenance investigation will also examine assets contributed from the below sub-divisions:

• Calderwood (Stages 3/5 Wetlands & Parklands)• Shell Cove• Tullimbar• Whistlers Run• Shellharbour Heights

In conjunction with the data improvement regime, Council will undertake a service levels review for current Parks and Open Space assets, as well as those expected to be managed by Council in future years. This is part of a review of Council’s current service levels for all Asset classes, and is discussed separately in a later chapter. Another risk to Council identified to be incorporated in the above is the management of wetlands. Council’s current and future wetlands form a necessary part of Council Park’s water management, as well as an end-point of certain Council stormwater networks. As such, there are key environmental implications that to be addressed, will apply a financial burden if they are to be managed effectively. Current proposals before Council will investigate the use of novel

Other Council Structures, $478,319

Parks & Reserves, $11,132,386

Sport & Recreation, $1,561,286

Open Space and Recreational Facilities


construction techniques, such as with floating wetlands, and will examine any potential cost savings for Council’s parks maintenance program.

With Shellharbour being a growing City, the mowing and maintenance area Council is responsible forincreases every year. The Parks & Gardens section worked over the winter months on efficiencies to enable the maintenance of this land at a reduced budget in balance with responding to the various changes in demands of service levels by our community. Council now publishes a weekly mowing schedule on Council’s website to ensure a proactive communication approach with the community. Communication to residents and sporting clubs about our mowing schedules is very important to enable our crews to actively respond to these expectations.

Other Infrastructure AssetsThis category includes those infrastructure assets that don’t explicitly fit within the other categories, but are still significant valued assets and play a key role in delivery of Council services. This includes waste facilities, airport assets and other unclassified assets (Figure 11).

Figure 11 - Other Infrastructure and Structures Assets

Programmed Additions and Special Projects

In the coming years there will be significant Asset additions being constructed by and handed to Council. These projects will provide substantial maintenance and renewal requirements of Council and will need to be accounted for in future Asset Management strategies. A brief outline of each project has been provided below, as well as actions Council are taking.

Given the significance of these assets as a whole, and their particular requirements, they will be considered within their own asset management plans. These are being developed in conjunction with other Council Plans, with the Shell Cove Plan being the first plan compiled in draft by July 2018.

Other Infrastructure, $1,476,617

Airport Runways, $6,139,281

Other Structures, $2,420,068

Other Infrastructure Assets and Structures


Shell Cove Marina and Subdivision

The Shell Cove boat harbour and its surrounds will continue to dramatically take shape in the coming years. The excavation of the inner harbour has been completed and the edges formed on the 20-hectare harbour. The first shops will be built, including a supermarket and approximately 10 speciality shops in the town centre, known as The Waterfront, Shell Cove. Access will be provided with the development of roads and infrastructure creating a public domain near the foreshore.

Construction will begin on the first residential subdivision within The Waterfront precinct and include the development of medium density housing. The new main road, Harbour Boulevard, connecting The Waterfront to Shellharbour, will be built to the Wattle Road intersection during this phase of the development.

This will provide a direct link to the safe ocean accessed harbour that will accommodate 300 berths, charter operations, boat facilities and public boat ramp. It will incorporate a 1.5 km public promenade and sit beside a vibrant town centre that includes supermarket, shops, restaurants, cafes, tavern, community centre, library, and hotel.

Illawarra Regional Airport

There has been significant progress with the implementation program for the Strategic and Business Plan for the Illawarra Regional Airport. One of the key strategies from the Strategic and Business Plan is to develop a funding model to best leverage Council funds and partnerships to attract external funding for the development of the Airport. This Strategy was continued with the preparation of designs and associated documents required for submission of an application to the National Stronger Region Fund (NSRF).

Council is still awaiting the results of the NSRF Program. In the interim works planning has continued with maintenance works undertaken including resurfacing of part of runway 08/26 and taxiway H to extend its service-life. Other works undertaken during the period included minor maintenance and works on obstacle lighting. These works are helping Council address items on the corrective action list and move towards better compliance with regulations.

Calderwood Valley

On 15 September 2014 Council entered into a Planning Agreement with Lend Lease Communities Limited for the provision of all Shellharbour City Council local infrastructure contributions that are necessitated by the development of the Calderwood Urban Development Project.

Under this Planning Agreement the developer will provide approximately $20M in monetary contributions toward both local and citywide infrastructure (in lieu of Section 94 Contributions) and deliver onsite infrastructure including a community centre, parks, sportsfields, road upgrades and land dedications to the value of approximately $50M. The development is expected to occur over the next 20-25 years and will significantly increase both the population of the City’s West and Council’s asset base.

The Planning Agreement was applied to the Stage 2A and Stage 2B development applications in lieu of the Section 94 Contributions Plan. Contributions including cash and non-cash were received from the Stage 1A development.


Summary of Assets acquired by Council during 2016/17Assets are added to Council’s asset register on an ongoing basis through private development and works carried out by Council as part of its adopted Capital Works Program. The total value of asset additions associated with Council capital works amounts to $59.90M for the 2016/17 financial year. The works carried out by Council include both the construction of new assets and the renewal or upgrade of existing infrastructure.

Assets acquired through private development includes the handover of assets constructed through major subdivisions, works in kind and user groups of Council land. For 2016/17, the total value of assets acquired was $16.35m. This was comprised of $9.59M of infrastructure assets (Table 5) and $6.76m of contributed land. This largely came from new sections of Shell Cove, Calderwood and Tullimbar being handed over.

Table 5 - Assets Contributed by Developers and OthersAssets Contributed by Developers and Others

Asset Class Value

Buildings $0

Roads & Transport $4,630,000

Stormwater & Drainage $4,682,000

Open Space & Recreational Facilities $280,000

Other Infrastructure Assets and Structures $0

Total $9,592,000


Lifecycle CostingLifecycle costing (Table 6) expresses the cost of providing the service over the upcoming 3 year Delivery Program as an annual amount. Lifecycle cost refers to the total cost of ownership over the life of an asset including; planning, design, construction/ acquisition, maintenance, renewal/rehabilitation, the cost of consumption measured by depreciation expense, finance and disposal costs.

Table 6 - Asset Lifecyle CostsAsset Class Average Annual

Required Maintenance Expense

Average Annual Depreciation Expense

Lifecycle Cost

Buildings $1,731,847 $3,957,935 $5,689,782

Roads & Transport $1,334,738 $3,890,173 $5,224,911

Stormwater & Drainage $362,100 $2,143,425 $2,505,525Open Space & Recreational Facilities $6,005,210 $712,703 $6,717,913Other Infrastructure Assets and Structures $54,874 $200,219 $255,093

Total $9,488,769 $10,904,455 $20,393,224

This can be compared to lifecycle expenditure to give an indicator of sustainability in service provision. Lifecycle expenditure is proposed expenditure required to provide the service including annual operations and maintenance expenditure, plus the cost of renewal/replacement of assets. The lifecycle expenditure will vary depending on the timing of assets renewals.

Table 7 - Average 3 Year Asset ExpenditureAsset Class Maintenance Expense Capital Renewal Lifecycle Expenditure

Buildings $1,804,620 $1,929,148 $3,733,768

Roads & Transport $1,773,557 $6,668,303 $8,441,860

Stormwater & Drainage $457,068 $556,667 $1,013,735Open Space & Recreational Facilities $6,533,492 $881,167 $7,414,659Other Infrastructure Assets and Structures $112,682 $541,667 $654,349

Total $10,681,419 $10,576,952 $21,258,371

The lifecycle costs and lifecycle expenditure (Table 7) comparison highlights any difference between present outlays and the average cost of providing the service over the next 3 years. If the lifecycle expenditure is less than lifecycle cost, it is most likely that outlays will need to be increased or cuts in services made in the future. A shortfall between lifecycle cost and lifecycle expenditure gives an indication of the lifecycle gap to be addressed in the Asset Management and Long Term Financial Plans.


The average annual year combined maintenance and renewal funding allocation is approximately$21.6m and an annual depreciation expense of $10.9m. Based on the straight-line deprecation and reviewed operations and maintenance needs, the required funding level is $20.4M resulting in a lifecycle gap surplus of $0.9m over the next 3 years.

Linking service levels and cost of service deliveryThe linking of service levels and the cost of service delivery is an essential component of strategic asset management. It is essential that Council knows the true cost of service delivery, priorities placed by the community on infrastructure, the service levels that are desired by the community and what level they are willing to pay for.

Council’s asset management plans are based upon the recommended ‘core’ Asset Management structure contained in the International Infrastructure Management Manual. These plans have been prepared at a network level and aim to document the costs incurred to maintain current service levels of existing infrastructure. Periodic review and continuous improvement will be carried out as more information is gathered. The core asset management plans were prepared with minimal community consultation; they did provide an excellent basis to start the conversation with the community.

Council has identified undertaking a comprehensive review of our Service Levels as an important initiative. This has been identified as a high priority by Council’s Asset Management staff. This review will incorporate the use of internal (staff) expertise, and external (consultants) when required.

Council’s Service Levels are informed primarily by the data held against the Assets. The first component of the review is a data review and improvement strategy. This review will identify what data is essential for undertaking Strategic Asset Management, any gaps in the current data, and how Council is to proceed with data acquisition.

Once data is quantified and lifecycle costs established, community consultation is the next step. Options will be provided and feedback sought from Council and the Community to inform future Asset Management strategies. Undertaking this will ensure Council sustainably delivers its strategies as identified in the Community Strategic Plan, fulfil all legislative requirements, and achieve advanced Asset Management as identified within the International Infrastructure Management Manual.

Should the community be prepared to accept lower levels of service, the responsibilities of Council will be reduced. Conversely, if the current Levels of Service are found to be inadequate, the Asset Management team would need to develop Asset Management Plans identifying how to achieve the Communities expected Levels of Service. The cost of service delivery will either be higher to achieve the required levels of service, or efficiencies within Council will need to be found


Where do we want to be?The Resourcing Strategy outlines Council’s contribution to achieving the Objectives and Strategies from the Community Strategic Plan 2018-2028 and the Delivery Program 2018 - 2021. Table 8 below outlines the Objectives and Strategies that this Asset Management Strategy will contribute to achieving:

Table 8 - Community Strategic Plan Objectives and StrategiesObjectives Strategies1.1 Vibrant, safe, creative and inclusive 1.1.4 Provide a liveable community that is accessible and

inclusive1.2 Active and healthy 1.2.1 Provide access to services and facilities where people

can live, learn and play1.2 Active and healthy 1.2.2 Provide diverse opportunities for sport, recreation and

enjoyment in the City’s parks, open spaces and facilities2.1 Protects, promotes and enhances its natural environment

2.1.1 Manage and improve cleanliness, health and biodiversity of creeks, waterways and oceans

2.3 A city that is connected through places and spaces

2.3.6 Deliver sustainable whole of life asset management for the community

3.1 Plans, builds and manages infrastructure for the community

3.1.1 Provide the community with a range of infrastructure delivered in a sustainable manner

3.1 Plans, builds and manages infrastructure for the community

3.1.2 Maintain the city’s assets to meet community expectation

Linking Asset Management to the Long Term Financial PlanAs discussed in the Long Term Financial Plan (LTFP), the underlying drivers for future years Asset Management Strategies, which inform the Asset Management Plans, have been derived from Council’s key objective of financial sustainability in both the medium and longer term. The drivers identified for the 2018-2028 LTFP are centred around the Fit For the Future indicators established by the NSW Office of Local Government. The key strategies identified in the LTFP provide the clear objectives for the Asset Management Policy, filtering through to all Asset Management planning documents. These strategies coincide with the Fit For the Future targets and those strategies developed to achieve the performance benchmarks.

Fit For the FutureAs part of Fit For the Future response, Council undertook analysis of current status and developed strategies to move toward a financially sustainable future. Council had previously addressed how it will meet and exceed the Infrastructure Asset Performance Indicators. The indicators are comprised of three ratios used to determine Council’s performance in managing its infrastructure and long-term sustainability. The Finance team in conjunction with the Assets team have now finalised Council’s submission of the Infrastructure Asset Performance Ratios and are displayed in Table 10 below.


Table 10 - Fit For the Future Indicators

The Infrastructure Renewal Ratio for 2016/17 is above the minimum benchmark of 100%. This can be attributed to the additional funds now being available from the Special Rate Variation (SRV) for asset renewal. The other reason relates to a large amount of renewal expenditure linked to a major capital project. A ratio over 100% indicates that Council is spending on its assets at a rate greater than they are being consumed.

Council’s result for Infrastructure Backlog Ratio has further improved in 2016/17 as a result of the additional funding Council has committed to asset renewal. The extra renewal expenditure can be confirmed through the result for the Infrastructure Renewals Ratio. As expenditure has increased to

Special Schedules 2017

page 7

Shellharbour City Council

Special Schedule 7 – Report on Infrastructure Assets (continued) for the year ended 30 June 2017

$ ’000

Infrastructure asset performance indicators * consolidated

1. Infrastructure renewals ratioAsset renewals (1)

Depreciation, amortisation and impairment

2. Infrastructure backlog ratioEstimated cost to bring assets to a satisfactory standardNet carrying amount of infrastructure assets

3. Asset maintenance ratioActual asset maintenanceRequired asset maintenance

4. Cost to bring assets to agreed service level

Gross replacement cost

Notes

* All asset performance indicators are calculated using the asset classes identified in the previous table.

(1) Asset renewals represent the replacement and/or refurbishment of existing assets to an equivalent capacity/performance as opposed to the acquisition of new assets (or the refurbishment of old assets) thatincreases capacity/performance.

1.13 1.08 0.929,397

2.76% 0.00%

> 1.00

Indicator Prior periods

8,651 2.00% 2.11% 2.30%431,895

2017 2017 2016 2015

22,269 232.67% 118.81% 40.03%9,571

AmountsBenchmark

>= 100%

< 2.00%

17,302

10,577

625,869

Estimated cost to bring assets toan agreed service level set by Council


renew those assets which have reached their intervention level (Backlog), this has had the effect of improving the overall condition of Council assets. Council is now meeting the sub 2% benchmark for the Asset Backlog Ratio.

The Asset Maintenance Ratio has continued to improve as Council gets a better understanding of its required maintenance levels while at the same time meeting community expectations. The result for 2016/17 exceeds the suggested benchmark for this ratio. The required maintenance for this year has been determined by considering community expectations as well as best practice. This has allowed for greater confidence with measuring required maintenance levels.

Council is now achieving all current infrastructure ratios. The NSW Office of Local Government has also proposed introducing the Cost to Bring to Agreed Service Levels ratio as a way of more accurately reporting outstanding renewal items. Though yet to be implemented, Council is comfortably within the suggested benchmark of 4.5%. Given Council’s greater Infrastructure Renewal expenditure than current Depreciation levels as shown in the first ratio, it is expected for Council further reduce its backlog. The Assets team are also updating the condition of Council assets as renewal work is undertaken, which will reflect the lower level of Council’s Infrastructure Backlog throughout the year. The results achieved for 2016/17 have shown improvement across the three Infrastructure Asset Performance Ratios, as was previously forecast. The ratios provide a healthy assessment of Council’s performance in managing its Infrastructure Assets, and indicate the sustainability of Shellharbour City Council.


Policy Name: Asset Management [POL-0037-VO5] Date of Adoption: TBC Page 1 of 7

Asset Management

Policy Name: Asset Management Policy Policy Number: POL-0037-V05

Date Adopted: TBC Review Date: TBC

Policy Owner: Asset Planning Manager Contents:

1. POLICY STATEMENT

The objective of this policy is to: • Ensure that Asset Management and the importance of managing Council's

infrastructure assets for present and future generations is clearly understood and recognised by Council and its Community

• Provide a framework and rationale for best practice Asset Management decision making and inform the organisation on how it will maintain its assets to deliver a level of service that meets community expectations and value for money

• Develop required strategies in order to implement and manage assets and services.

2. SCOPE This policy applies to all infrastructure and assets under the care and control of Shellharbour City Council.

3. REFERENCES NSW Local Government Act 1993 (as amended) International Infrastructure Management Manual Civil Liabilities Act 2002 Australian Accounting Standards NSW WHS Act 2011 and Regulations Shellharbour City Council Procurement Policy

4. DEFINITIONS Asset Management Plan A document to plan for the management of one or more infrastructure assets that combines multi-disciplinary management techniques (including technical and financial) over the lifecycle of the asset to provide a specified level of service in the most cost effective manner.



Asset Management Plans contain the following information:

- quantum and performance level of assets and services - management techniques - future demands - risk factors and respective mitigation measures - predictions - financial forecasts - plan improvement needs

Disposal Activities necessary to dispose of decommissioned assets. Fair Value The amount for which an asset could be exchanged, or liability settled, between knowledgeable, willing parties in an arm’s length transaction. Infrastructure Assets Physical assets that contribute to meeting the needs of an organisation or need for access to major economic and social facilities and services. For example roads (Including bridges and footpaths), drainage, buildings, aquatic facilities, parks and open spaces. These are typically large, interconnected networks or portfolios of composite assets. The components of these assets may be separately maintained, renewed or replaced individually so that the required level and standard of service from the network of assets is continuously sustained. Generally the assets have long lives. They are fixed in place and often have no separate market value. Level of Service The defined service quality for a particular activity (e.g. roads) or service area (e.g. mowing) against which service performance may be measured. Service levels usually relate to:

- quality - quantity - capacity - reliability - responsiveness - environmental impact - acceptability - cost

Lifecycle Cost The total cost of an asset throughout its life including:

- planning - design - construction - acquisition - operation - maintenance - rehabilitation


- depreciation - disposal costs

Otherwise referred to as ‘whole of life cost’.

Maintenance The activities necessary to retain an asset as near as practicable to an appropriate service condition (e.g. road patching, unsealed road grading, building and structure repairs). Operations The regular activities to provide services such as opening hours, cleansing frequency, and mowing frequency. Rehabilitation Works to rebuild or replace parts or components of an asset. To restore an asset to a required functional condition and extend its life, which may incorporate some modification. This process generally involves repairing the asset to deliver its original level of services using available techniques and standards, without resorting to significant upgrading or renewal.

Renewal Works to renew OR replace existing facilities, with facilities of equivalent capacity or performance capability. Where renewal is undertaken, provision may be made to provide the modern engineering equivalent replacement asset (MEERA). Improvement Works to improve OR upgrade assets in order to lift service standards and/or to address future growth needs. This is also referred to as an ‘Upgrade’.

Useful Life May be expressed as either:

- The period over which an asset is expected to be available for use by an entity, or - The number of production or similar units (e.g. intervals, cycles) expected to be

obtained from the asset by the entity. 5. VARIATION AND REVIEW

This policy will be reviewed every three years by relevant employees.

Review History Date Policy first adopted - Version 1 1 July 2008 Date amended adopted - Version 2 14 June 2011 Date amended - Version 3 10 June 2013 Date amended - Version 4 16 November 2016 Date amended - Version 5 TBC



- depreciation - disposal costs

Otherwise referred to as ‘whole of life cost’.

Maintenance The activities necessary to retain an asset as near as practicable to an appropriate service condition (e.g. road patching, unsealed road grading, building and structure repairs). Operations The regular activities to provide services such as opening hours, cleansing frequency, and mowing frequency. Rehabilitation Works to rebuild or replace parts or components of an asset. To restore an asset to a required functional condition and extend its life, which may incorporate some modification. This process generally involves repairing the asset to deliver its original level of services using available techniques and standards, without resorting to significant upgrading or renewal.

Renewal Works to renew OR replace existing facilities, with facilities of equivalent capacity or performance capability. Where renewal is undertaken, provision may be made to provide the modern engineering equivalent replacement asset (MEERA). Improvement Works to improve OR upgrade assets in order to lift service standards and/or to address future growth needs. This is also referred to as an ‘Upgrade’.

Useful Life May be expressed as either:

- The period over which an asset is expected to be available for use by an entity, or - The number of production or similar units (e.g. intervals, cycles) expected to be

obtained from the asset by the entity. 5. VARIATION AND REVIEW

This policy will be reviewed every three years by relevant employees.

Review History Date Policy first adopted - Version 1 1 July 2008 Date amended adopted - Version 2 14 June 2011 Date amended - Version 3 10 June 2013 Date amended - Version 4 16 November 2016 Date amended - Version 5 TBC



6. POLICY

Council recognises its obligation to act as custodian of public assets and infrastructure in accordance with Section 8 of the Local Government Act. This includes ensuring that assets are planned, created, operated, maintained, renewed and disposed of in accordance with Council's service delivery. It also recognises all relevant legislative requirements together with political, social, economic and environmental requirements that are to be taken into account in the management of assets. Council is committed to implementing a systematic asset management methodology in order to apply appropriate asset management practices across all areas of Council. Asset management practices impact directly on the core business of Council. Appropriate asset management is required to achieve our strategic delivery objectives, and is linked directly to Council’s Community Strategic Plan and Long Term Financial Plan. A strategic approach to asset management ensures that Council delivers the optimal level of service through its assets. This provides positive impact on:

• Council • Customers • Community • Councillors

In order to achieve the objectives of this policy, Council will fulfil its obligation to manage its assets in accordance with recognised best practice.

6.1 Understanding Customer Expectations • An inspection regime will be used as part of asset management to ensure agreed

service levels are maintained, and to identify asset renewal priorities • Level of service for Infrastructure assets will be periodically reviewed to ascertain the

Community's expectations. Service levels can relate to fit for purpose, aesthetics, environmental acceptability, safety, utilisation and cost

• Council will employ a range of community engagement techniques to capture the views, opinions and expectations of the community in relation to asset quality, maintenance, improvement and renewal priorities and standards.

6.2 Asset Planning, Financing and Budgets

• Asset management principles will be integrated within existing planning and operational processes

• Council will adopt the ‘life cycle cost analysis’ for the management of infrastructure assets

• Council will consider using various funding sources, including loan funds that address the principles of intergenerational equity to: - improve the condition of its asset - extend their useful life

• The Capital Works Programme and Asset Improvement Programme shall be subjected to technical and financial evaluation, and prioritised using pre-determined criteria and the principles outlined in Council's Asset Management Plans



• Council will regularly review its asset inventory and identify opportunities for asset rationalisation

• Whenever possible, predictive modelling will be used to develop and implement preventative maintenance and renewal programs to ensure: - The lowest net lifecycle cost is achieved - The asset potential is optimised.

6.3 Asset Operations and Management

• A consistent Asset Management Strategy must exist for implementing ‘systematic asset

management’ and appropriate asset management’ best practice’ throughout all divisions of Council

• Maintenance management plans (or operational asset management plan) shall be developed using asset condition data, and shall incorporate a cost-benefit analysis

• All services shall be regularly benchmarked to ensure Council is meeting best practice standards

• All outsourced services are to be procured through a competitive process as per Council Procurement Policy

• Performance driven approaches are to be adopted for operational and maintenance work.

6.4 Management of Risk Council will: • Will maintain a program of regular inspection of assets under its control to minimise

risks to people, the assets, finances and the environment • Will implement the principles contained in ISO 31000:2009 when identifying, analysing,

evaluating and treating risks presented by Council assets and infrastructure • Will maintain a Work Health and Safety management system which will address the

safety of its employees and contractors working on Council assets • Shall consider all of the environmental, social, operational and financial risks when

developing sustainable design options for new assets and asset renewals. • Utilise Council’s Risk Management toolkit when practising asset management.

6.5 Asset Accounting and Costing

• Systematic and cyclic reviews will be applied to all asset classes to ensure that the

assets are managed, valued and depreciated in accordance with appropriate best practice Australian Standards

• Council will maintain a detailed asset management system of all owned assets • Useful lives will be given to each of these asset with the written down value determined

in accordance with the current applicable accounting regulations • Depreciation charges will be calculated using a method that reflects the true

consumption of the asset. It indicates future cash flows necessary to sustain the asset condition and to maintain the required service level. Wherever possible, condition based depreciation method will be used to determine written down value

• Council will value all these current assets at ‘Fair Value’.



6.6 Asset Management Plans • Council will develop Asset Management Plans for each asset Class • Asset Management Plans will establish:

- Levels of service - Future Demand - Life Cycle Principles and Management Plans - Financial Projections - Risk Management - Performance Monitoring and Improvement

• Asset renewal programmes will be developed and implemented progressively based on

agreed service levels, and in accordance with renewal intervention strategies for respective asset categories within the respective asset class

• Asset Management Plans will be linked to the Community Strategic Plan and Long Term Financial Plan

• The Asset Management Plan will be subject to periodic review, usually every three years and updated annually

6.7 Developer Contributions, Dedications and Works in Kind

• Council receives land dedications and assets through works-in-kind, and Council’s Section 94 Plan

• Acceptance of land and assets will be in adherence to the standards and typology requirements as outlined in the Section 94 Plan.

6.8 Asset Management Working Group • A multi-disciplinary and cross-functional Asset Management Working Group will be

established to assist with the strategic asset management planning. This group will include input from various interested sections including: - Asset Strategy - City Planning - Community Connections - Services - Finance - City Development

• Staff responsibilities for asset management activities shall be included in the:

- Asset Management Plans - And reflected in individual position descriptions.

7. RESPONSIBILITIES

7.1 Council

Councillors are responsible for adopting the policy and in ensuring that sufficient resources are applied to manage the assets.



7.2 The General Manager

The General Manager has the overall responsibility for developing an asset management strategy, plans and procedures and reporting on the status and effectiveness of asset management within Council.

7.3 Directors and Managers

• Are responsible for the implementation of the Asset Management Policy and Procedures

• Must fulfil responsibilities under the Civil Liabilities Act and relevant Accounting Standards • Must ensure consultation occurs within the various Council Divisions involved in Asset Management • Are required to set appropriate levels of service and manage risk and cost standards • Are to provide linkage between the community, key stakeholders and the Council on

the management of Council’s assets • Must monitor the performance of staff in relation to implementing asset management.

7.4 Asset Planning Manager

Is to manage the asset management functions identified in the asset management framework, and to achieve optimum outcomes and fulfil Council objectives and goals.

7.5 Staff

• Are to conduct all work in accordance with relevant standards and direction of their supervisor • Are to provide all relevant information on the usage and condition of Council’s assets for inclusion into the Corporate Asset Management System.

Policy Authorised by: Name: TBC Date: TBC


WorkforceManagement

Plan


IntroductionShellharbour City Council delivers a diverse range of services to the community. A number of factors such as continued urban development in areas including Calderwood and Shell Cove impact on how well Council can deliver those services.

A formal Workforce Plan as part of Council’s Resourcing Strategy under the umbrella of Integrated Planning and Reporting, assists Council in addressing the challenges ahead. This plan builds on Council’s previous workforce plans and will continue to provide Council with a workforce that has the required skills to work together and with the community.

The Workforce Plan will build on the ongoing reform including the Discovery of Core Values and new Organisational Structure. It will support the reform in building an organisational culture that attracts and retains the best staff available.

The guiding principle for Council – that it exists to provide benefits for our Community, Councillors, Customers and Council itself, underpins the workforce plan.

What is a Workforce Plan?Workforce Planning is the process of identifying current and future staffing needs. It identifies the skills required by the organisation to provide the services required by the community. The Workforce Plan provides strategies that ensure the skills required exist within the organisation’s workforce. Strategies include those that focus on retaining and training existing staff as well as attracting new employees.

Why is it important?

The Workforce Plan provides a framework for aligning decisions about human resources (such as recruitment, development, and internal deployment) with Objectives and Strategies in our Community Strategic Plan. It is a key element of our Resourcing Strategy both being informed by and informing our Long Term Financial Planning (overall Employee Benefits and On-Costs) and our Asset Management Planning in terms of the skills required now and into the future to sustainably manage the portfolio.

The Workforce Planning Framework identifies the issues (and supporting evidence) that will impact Shellharbour City Council’s ability to deliver a sustainable workforce, capable of maintaining high quality services to our community over the next three years.


Workforce Planning Framework

Where are we now?Shellharbour

With the Illawarra Regional Airport now offering regular passenger services and The Waterfront Shell Cove opening soon, there are a lot of opportunities opening for our City.

Between now and 2036 the population will increase from 72,000 to 89,000 with the biggest change being in the over 65’s age group which is expected to increase by 30%.

Council is committed to delivering services that meet the changing needs of the Community while remaining sustainable both financially and environmentally. To ensure sustainability Council’s decisions will be evidence-based. Council is also committed to transparency and accountability in its decision making.

The Workforce Plan supports Council in providing efficiencies in human resources and a high performance culture.

6. M

O

NITOR & REVIEW1.

WO

RKFORCE ANALYSIS

2. FORECAST FUTURE NEED

S

3. GAP ANALYSIS

4. D

EVEL

O

P STRATEGIES & ACTION

PLA

NS

5. IM

PLEMENT STRATEGIES

Determine the effectiveness of the

strategies and provide for continual

improvement.

An examination of the existing workforce in relation to local and

national trends

Establishing the future profile of the

workforce based on the business direction over the

mid to long term in line with the Community

Strategic Plan

Delivery of specific programs and

projects to develop and maintain the capability and capacity of the workforce.

Integration of strategies into the broader business

planning and management activities.

Understanding the gap between our

existing workforce and the future profile of our

workforce.

Establishing strategies to attract, retain and develop

skills that match future needs.


Financial SustainabilityOver the next five financial years, Council will be faced with challenges in its Operating Performance Ratio, its Building and Asset Renewal Ratio and its Asset Maintenance Ratio. The Workforce Plan acknowledges that while providing sufficiently skilled and capable staff is a priority, the costs of employment have a direct impact on Council’s financial sustainability.

To meet these challenges, it is imperative that Human Resources works collaboratively with the Senior Management Team to ensure that programs are integrated with business planning activities and provide responsive services to internal clients and the community.

Approach to Our CommunitiesOur communities look to local government for leadership. They also look to local government to listen, to be responsive, to plan for their future and to reflect their values in the decisions that are taken.

To do this well, Council needs to face the challenge of how to make itself relevant and consider what communities exist within our city and plan for them. The Workforce Plan ensures that council is appropriately resourced to meet the challenges anticipated during the life of the Plan.

The Key PrinciplesIn 2017, the General Manager introduced guiding principles for council. These principles provide a vision for the organisation based on the fact that Council exists to provide benefits for our Community, Councillors, Customers and the Council itself – we call this the 4C’s.

In this context and against the backdrop of a changing Local Government environment the Workforce Plan has been developed to address the challenge of remaining relevant and sustainable for our communities. A number of factors both externally and internally have emerged which impact the way we provide services and manage our business. These include:

• Financially sustainable (Fit for the Future)

• Relocation of council staff and business to a new purpose built facility and more contemporary working environment.

• New facilities including the Shellcove Marina, Libraries and open spaces.

• Sustainability in our approach to our communities.

• An industry which is still coming to terms with reforms and mergers.

• Changes to the Local Government Act.

4 sC1. Community - The organisation is communities focused in all

that it does2. Councillors - The organisation is Councillor focused and

helps elected representatives to do their work3. Customers - The organisation is focused on its customers

and the success of the transactions and interactions it undertakes with them

4. Council - The organisation is sustainable


Council’s Organisational StructureCouncil’s new structure addresses the challenges and principles outlined above and involves four key elements:

1. Cultural improvement and shared values2. Accountability and behaviours (not just financial accountability, but accountability for our

actions and behaviours)3. Business improvement (processes, procedures, policies and quality improvement,

systems to effectively allocate resources and rewards)4. Structure

The structure consists of 11 groups and a number of teams distributed across three directorates.

The Council Sustainability directorate is where the organisation’s financial security will be assured and opportunities for financial return from current and future enterprises optimised. The Community and Customers directorate is the centre of corporate functions as well as services provided to the community. It drives community interaction with Council and ensures buildings and natural forms are acceptable to the community. This directorate ensures human systems are in place to attract and retain good staff to deliver on required corporate and community services.

The Amenity and Assets directorate will deliver infrastructure and asset management in a planned, orderly, prompt and accountable fashion while respecting community expectations and deadlines as well as providing planning and budget control.

The groups Organisational Performance and Council Services groups report directly to the General Manager and ensure that Council remains focused on the Community Strategic Plan; Integrated Planning and Reporting; business quality improvement; accountability, and also provide the Mayor and Councillors the services they need.

Each of the Groups have specific expectations and links to the 4Cs.


Community and Customers Amenity and AssetsCouncil Sustainability

DIRECTOR MANAGER GROUP MANAGER

City DevelopmentStatutory Town planning,

Building Surveying, Compliance and regulation, Environment

Asset StrategyAsset planning, Projects,

Waste planning and operationsShell Cove

City PlanningStrategic Town planning,

Section 94 Planning and accounting, Recreation Planning

DesignEngineering design, Road safety,

Floodplain management,Engineering development

assessment

Airport

Human ResourcesHuman Resources recruitment,

Payroll, Staff development and training,Industrial Relations

ServicesCivil engineering, Workshop, Building

maintenance, Parks, Aquatics, Stadium,Nursery, Emergency management,

Cemeteries

Business and InvestmentEconomic development, Business

development, Tourism, Grants, Property Management, Business units

Business Technology andCustomer Services

Information Technology, GIS,Records, Customer Service

Community ConnectionsYouth Services, Events, Community

and Culture, Library/Museum,Communications, Community

Engagement

Chief Financial OfficerFinance, Property leases, licenses,

halls and sporting clubs, Procurement

The Links

Organisational PerformanceOrganisational Performance,

Corporate Strategy, IP&R, ContinuousImprovement, Business Improvement,

Change Management

GENERAL MANAGER Council Services Councillor Services, Governance

(Legal Services, Complaints handling,Provision of information)

Risk, Internal Audit & WHS, Media

Updated May 2017

Figure 1 - Organisational Chart


Workforce ProfileCouncil’s permanent workforce comprises 319.71 full time equivalent (FTE) employees. Council also provides temporary and casual employment. Council’s temporary workforce comprises 34.05 FTE employees. Council has a large casual pool of staff who work in areas such as pools, beaches and bush regeneration as well as supplementing operations for the libraries, customer service, parks, and youth services work.

Gender Distribution

Of Council’s permanent staff the gender distribution is 54% male and 46% female, this is consistent with the NSW average. NSW Council’s on average have a distribution of 55% males and 45% females. Of Council’s permanent and temporary staff 40.93% work outdoors. Of these 86.71% are male, while indoor staff are mainly female (68.86%).

Temporary Workforce Patterns

male female

54% 46%

Temporary staff Casual staff

50%50% 52%48%

of employees live in the Local Government Area

59%

of staff are employed full-time

of staff are employed part-time

20%

80%


80.36% of casual staff areemployed outdoors

90.91% of casual staffemployed indoors

are femalesof these 57.78% are male

Gender and Management

Of Council’s permanent and temporary employees 21% are employed in management or supervisory roles.

Figure 2 - Distribution by Profession and Gender

46.67% of Council’s senior managers are female

83.15% of female staff are in non-supervisory positions

75% of male

staff are in non-supervisory

positions


Age ProfileThe average age of staff members as at December 2017 was 43.98 years the (median age was 45 years). The average age for males was 44.96 years and for females 42.85 years. Of Council staff 9.07% are over 60 yrs of age.

Figure 3 - Workforce Comparison Shellharbour City Council v NSW Council’s

Ageing workforce projections indicate that 12.18% of staff will reach 60+ within the next 5 yrs, 16.58% within 10 years and 13.73% within 15 years. Council’s turnover rate for 2017 was 9.07% of which 1.56% were identified as retiring. The ageing workforce will have a significant impact on turnover rates.

An analysis of the age profile of Council shows that apart from Council Services there is no significant difference across the Directorates or between the indoor and outdoor workforces.

MATURISTSBABY BOOMERS

GENERATION XGENERATION Y

GENERATION Z

1945 and earlier1946 - 1964

1965 - 19801981 - 1995

1995 - 2005

30.19% 35.58% 32.88% 1.35%


Age and Key AreasOf Council’s 16 senior managers, two will be over 60 years of age within five years. This should not present Council with any significant problems. Similarly nine out of 20 managers will be over 60 years of age within five years of Council’s 49 team leaders/supervisors 12 will be 60 years or older within five years. Of these, five are in Services and Council has identified areas such as payroll, civil and mechanical trades as areas where succession planning is required. Within the mechanical trade area, 50% of staff are over the age of 54.

In some key areas there are a number of technical positions where employees are already over 60 years of age or will be within 5 years. Of these employees, some have engaged in a ‘Phased Retirement’ arrangement enabling Council to fill these positions initially on a part-time basis until the employee retires. This assists with these positions being filled prior to the employee leaving and an opportunity to train and handover knowledge to the new employee.

WasteServices

ProjectManagement

MechanicalTrades

Compliance

Civil

Engineers


Staff Turnover

Exit interviews indicate that the level of remuneration and career opportunities are the main reasons for people resigning from Council.

Council’s Ageing Workforce by Directorate

60+ as at 31/12/2017

Reaching 60 within 5 years



Council 9.07% 12.18% 16.58% 13.73%

Council Sustainability 8.51% 8.51% 17.02% 25.53%

Community and Customers 8.89% 13.33% 13.33% 10.37%

Amenity and Assets 9.04% 13.30% 19.15% 9.57%

General Manager 12.50% 0.00% 12.50% 56.25%

Internal Complaints and Grievances

The volume of internal complaints and grievances remains low within Council.

Staff turnoverrate is 9.07%

Local Governmentmedian is 10.9%

Looking ahead

By 2023

35 staff left in 2017

Highest turnover based on length

of employment is0 - 4 years

63%37%

63% were male (41% of whom were

Front Line Management or Professional staff)

37% were Female

Staff between the ages of

25 to 34 years were most likely to leave.

13% of Council Senior

Management Team will be 60 years of age

45% of front line

managers / professional staff will reach 60

24% of supervisors

will be 60 years or older


Managing Workforce Performance The expectations of the Community are outlined in the Community Strategic Plan (CSP) and flow through to business plans and individual performance agreements and work plans. This is referred to as “line of sight”, it is the direct link between Council’s goals and the work we do.

Under the General Manager’s structural reform, the Organisational Performance group was created to manage and lead corporate strategic planning, the development and review of the Integrated Planning and Reporting (IPR) suite of documents, including the CSP and the improvement of overall organisational performance. This will be achieved by undertaking change management across the organisation and through the implementation of a business improvement program, including a Quality Management System (QMS).

Managing performance continues to be a high priority at Council and clear performance targets are set each year for the Senior Management Team. The program utilises a number of sources to measure both interpersonal skills and business performance including annual performance discussions.

This was undertaken in concert with establishing performance standards for senior management.

The layout of the new Civic Centre has been designed to promote collaboration between staff. The open plan and easy access to meeting rooms and joint working spaces will encourage staff to work together. Groups have been allocated to areas such that they are close to the other groups with which they work.

To assist with staff accountability across Council staff are required to report monthly on their tasks, quarterly on their actions and biannually on their strategies. Quarterly and biannual reports are tabled at Council meetings as per the IP&R legislation requirements.

Workforce analysis

Council introduced a workforce analysis model to guide the development of a workforce profile for council. Strategically, this allows us to identify critical skills and anticipate skill gaps due to turn over or changing needs, more effectively. The data gathered informs the learning needs analysis and identifies potential risks in the future. The process removes the individual from the equation and the focus is on the position and skills needed.

When considered along with the staffing profile, organisational priorities and the CSP, the data will assist with longer term projections for types of work and facilitate workforce planning allowing council to manage some changes through natural attrition.

Operationally, the data allows management to make educated decisions about how to manage vacancies e.g. long term filling and filling behind leave (Higher Grade Pay). We should also have a good understanding of how long a vacancy can be sustained before it impacts the organisations performance. This can help with budgeting and provide justification for decisions either way.

The profile will allow us to view the organisation as a whole, identifying critical skills (and gaps), training needs and succession planning. Such information will help align workforce planning with CSP and Delivery Plan.

This tool will assist council in making more accurate decisions that are backed up by data. As we refine the data collection and analysis, it will increase the accuracy of workforce planning and scenario testing. It will also be of assistance in short and long term financial planning, as we will have a better understanding of our employment costs.


Factors Influencing Capacity and Capabilities1. Civic Centre

The new Shellharbour Civic Centre opened to the public in January 2018. The new facility includes a City Library and Museum, Auditorium, Council Chambers and Council’s Administration Centre. The Civic Centre change to the way we work together with open plan offices spaces replacing offices. Introduction of new technology, collaborative workspaces, greater interaction with the community and continued emphasis on process improvement and paper-lite work practices.

2. Focus on Asset Renewal

Asset renewal remains a critical focus for Shellharbour City Council and will continue to be so in the coming years. The new structure recognises the importance of Council’s assets with the creation of the Amenity and Assets directorate and within it the Assets Strategy Group. The directorate will be a pipeline of assets and infrastructure as – they are planned – they are funded – they are designed – they are built – they are maintained.

The structure within the Assets Strategy group will be finalised by mid 2018. Council will work with the Group Manager Asset Strategy to ensure the structure provides sufficient skill sets for both the present and anticipated workload. The Impact Analysis completed for the Workforce Plan will provide valuable data for this exercise.

3. Skill shortages

Council has conducted an Impact Analysis of all positions within Council. The analysis assessed the impact of a position being vacant on four factors:• Financial• Compliance• Reputation • Provision of Service

The results of the analysis indicate that Council has critical positions within all groups. Further analysis shows that for most positions Council has sufficient skills within the organisation to cover vacancies particularly those that are easily filled.

However, there are a number of areas where skill shortages within the community coincide with skills that are critical to Council. These areas are:• Development and building assessments• Development Contribution Planning• City Planning• Information Technology specialists• Tree management• Payroll

Vacancies in these areas usually take longer to fill than other vacancies and have significant impact on Council’s ability to conduct business.


Strategies for Skill Shortages

• Council needs to continue to ensure that critical skills are learnt by other staff, particularly in areas where there is only one expert within Council. The newly introduced quality management system will ensure procedures are mapped and knowledge captured. This will assist Council to provide services during lengthy recruitment campaigns.

• Phased retirement is becoming more popular amongst baby boomers. This means they stay with Council longer thereby retaining valuable knowledge and passing it on to other staff.

• Council is also introducing a new cadet and trainee program. The new program centralises the management of cadets and trainees and will provide a more consistent program. It will ensure the program targets the skills required by Council and aid the retention of cadets and trainees. Recruitment procedures will be assessed to enable trainees to be recruited with an option for the role to become permanent at the end of the traineeship dependent on the needs of Council and the suitability of the trainee.

• Council has introduced a number of para professional positions. These positions require lower skill levels and shorter training courses; are easier to fill and reduce Council’s dependence on more highly skilled staff who are free to do the complex work. The use of para professionals will be expanded where suitable.

• Advances in technology will allow Council to continue to promote more flexible working arrangements which will improve our attraction and retention of staff. Council will continue to review its working from home policy to ensure it is relevant and provides suitable opportunities for staff to use technology to work flexibly.

• Further analysis of Council’s Age Profile indicates that staff in the areas of Information Technology; City Planning and Payroll may be retiring within the next 5 years. Council’s phased retirement policy will assist in capturing skills.

Promotion of Shellharbour as a desirable location to work and monitoring of exit interviews will continue to assist Council in attracting suitable candidates and retaining skills.

Council will continue to conduct an annual Learning Needs Analysis(LNA). A new position in Human Resources will be responsible for conducting the LNA and for ensuring, the training identified is conducted.


2018 2019 2020 2021

Organisational PerformanceCouncilServices

2018 2019 2020 2021

Finance

Shell Cove

Business &Investment

2018 2019 2020 2021

Design - Subdivision

Asset StrategyServices

- Parks - Civil

2018 2019 2020 2021

City DevelopmentCity Planning

Business Technology &Customer ServiceHuman ResourcesCommunityConnections

General Managers Office

Amenity & Assets

Community & Customer

Council Sustainability

2

5½

1

1 4 1

3 5

2

2

2

1

4

1

1

1

1

Projected staffing needs

INCREASE REPLACE(Retirement)

4. Future Staffing Needs

Shellharbour City is growing and this growth puts pressure on Council’s capacity to provide services to its Customers and the Community. The Water Front at Shell Cove; the Calderwood development; and activation of the Civic Centre are some of the projects that will require additional resources. In addition, the new Organisational Performance group will require additional staff to enable it to support change management and business improvement throughout Council.

Following is a summary of the projected staffing needs for the years 2018 to 2020. These figures are based on the best estimates of the Group Managers and the age profile of each group. Prior to any recruitment Group Managers will are required to demonstrate a need to continue to fill the position. For new positions, Group Managers need to demonstrate that Council’s Operational Ratio will still be within acceptable levels given the additional costs of the position.


5. Generational differences

Council’s workforce still consists of members of four different generations. Council will work to:

• Ensure that change programs are relevant to all generations.• Policy development must consider generational differences and needs.• Develop recruitment and retention strategies that appeal to the needs and aspirations of different

groups.• Monitor staff responses to flexible work policies and practices when staff surveys are conducted.

6. Technology

Council is continuing to improve the efficiency of its payroll system and reduce manual processing. The introduction of electronic timesheets have reduced the workload on payroll staff and have made the pay run less time critical. Procedures are being developed to document the payroll process which will also make payroll a less critical area.


Our CultureLeadership

The Executive Leadership Team (ELT) at Council has a number of new members to assist them in working well together they have participated in a number of training courses.

ELT have undergone Situational Leadership training, which is based upon understanding the performance readiness needs of the individual and/or team and the leader then adapting a leadership style to meet those needs.

During February/March 2018, another two layers of Council’s management staff will attend training in Situational Leadership.

This is a significant milestone because for the first time Council will have a common language around leadership. This sets the foundation for the appropriate leadership behaviours that, should be used when communicating with all employees and customers of Council.

Organisational Values

All successful organisations are characterised by a set of clearly articulated Values. Council’s current values were developed over 10 years ago. In line with the recent organisational reforms and restructure, Council is in the process of reviewing its core values.

Clearly stated Organisational Values:

• Are the core of any culture – they define the behaviours we expect of one another.• Create a set of expectations for how Community, Customers, Councillors and Council (i.e. our

staff) are treated• Define behavioural expectations – if you don’t know them, how do you define people who share

them and fit in?• Are cathartic – in that the discovery process surfaces and addresses poor behaviours and

support a re-booting for the future

Therefore, Council will commence a program to ‘discover’ our Organisational Values - this is intended to be the foundation underpinning the 4C’s principles into 2018 and beyond.


Integrated Conflict Management Approach

Organisational change is an area where conflict can often arise. When organisations decide to move from one way of working (existing state) to a new way e.g. new technology, structural change (future state) the potential for conflict between individual’s increases. At Shellharbour Council we have been proactive in providing change Mangement training for managers and others involved in change and this has increased organisational capability in understanding and managing change more effectively.

Human Resources have introduced a program designed to upskill the workforce in dealing with conflict through coaching and communication as part of an integrated conflict management model. This will underpin many corporate initiatives including the grievance and complaint process, performance management and appropriate workplace behaviour (bullying and harassment). It will also be a critical skill for anyone who supervises staff as we implement organisational reforms and transition to the new working environment.

Coaching approach

The coaching approach we have introduced is designed to complement existing programs, policies and procedures within Council while providing a roadmap for further integration. The training and methodology have also been developed to bring about cultural change by imbedding coaching, communication and conflict resolution skills within the workforce.

The coaching structure provides an opportunity to build upon staff and management relationships and active learning. The implementation program provides a roadmap for cultural change and organisational change by providing an alternative way of thinking, communicating and behaving that are integrated into the organisation.

The methodology has the potential to influence the way we do business across the organisation. The first stage of the process, introduces the model for change. The model will strengthen many of our existing programs and build upon the capabilities already within the organisation. It has application to change management (ADKAR), cultural and organisational reforms, and it is intended to support the current complaints/grievance structure though increased capability and skill development in critical areas such as communication, conflict resolution and coaching.

IntegratedConflict Management

Model

Performance ReviewsImprove communications

Reduce misunderstandings

Better Change Management(ADKAR) and Organisational

Outcomes

Learning and DevelopmentOrganisation Capability

On the job learning and feedback

Culture and Organisation Reform

Change how we communicateLeadership

Supported and modelled by our leaders

Grievance and ComplaintsResolve at lowest possible point

Bullying and HarrassmentCoaching and modelling behaviour

RecruitmentAsking the right questions

Getting the best people


Commitment to Learning and DevelopmentCouncil is committed to providing innovative opportunities for learning and development. An active learning environment, where development and growth are encouraged through workplace, collaborative and structured learning ranging from experiential to traditional methods.

The Learning Needs Analysis undertaken in November/December 2017 took into consideration the organisation reforms, change initiatives and business plans and information collected from performance reviews. This provided the basis for discussions with the Senior Management Team. The meetings were an opportunity to discuss group priorities and the skills and capabilities needed to deliver on them. The aim was to identify the skills or capabilities needed, who needs them and what business need are they addressing.

The Learning and Development Strategy (Table 3) provides a clear direction for Learning and Development. These also align Learning and Development with business planning and the CSP which increases transparency of the program and decision making process for budgetary expenditure. The introduction of on-line training and development options will allow greater flexibility for staff undertaking training and assist with record keeping and individual development plans.


Table 3 - Learning and Development ProgramsAim Activity Responsibility ofGoal : Prioritise CSP Business needs & align Learning Strategies

Ensure that L&D programs reflect the council’s key business objectives.

Develop an annual training program/calendar which supports the corporate priorities.

Human Resources

Ensure that policies and procedures reflect council’s commitment to L&D.

1. Review existing policies and procedures relevant to L&D (approved student, training policy).

2. Develop policy that addresses issues such as attendance at conferences and interstate travel and having a clear approval process.

3. Develop a mechanism for the transfer of learning in the workplace (eg after staff attend at a course or conference)

Human Resources

Aim Activity Responsibility ofGoal: Analyse L&D needs

1. The business planning process will be used to identify L&D needs.

2. Needs will be analysed to identify gaps in knowledge, skills, behaviours and capabilities required to support business performance improvement.

1. L&D needs discussed at business planning meetings and Managers to include learning needs in annual business plans

2. Annual review of Corporate Learning Needs.

Organisational Performance & Human Resources

Goal : Develop strategies for addressing L&D needs

The potential offered by e-learning as an efficient and cost effective way of learning will be fully explored.

1. Introduce e-learning options for all staff where possible for mandatory and compliance training.

2. Implement Learning Management System and online training providers.

Human Resources & Business Technology

Aim Activity Responsibility of

The potential of an online development program linked to work planning and review.

1. Implement an online program for development action plans (DAPs).

2. Identify opportunities to link DAPs to online learning and development resources.


Opportunities for sharing facilities, trainers and learning with other organisations will be identified and availed of.

1. Increase sharing of resources with neighbouring councils.

2. Research the viability of an employee exchange program with rural councils.

Human Resources

Supporting the potential of our people.

1. Provide staff development program to provide employees with opportunities for education and training that they otherwise may not be able to access.

Human Resources


Learning and development opportunities are communicated to staff.

Develop an internal communications plan. Human Resources andCommunity Connections

Goal : Evaluate L&D

All learning events will be evaluated.

1. Develop and implement a process for the evaluation all training provided through council.

2. Implement an online process which allows HR to capture and monitor all learning and development within council.

3. Annual evaluation of L&D be included in Annual HR Report.


Development Opportunities Employee surveys indicate that staff want more development opportunities. To make it easier for staff to access development opportunities we have increased flexibility for taking leave without pay and broadened our secondary employment policy to allow for secondments. A gap continues to exist in our organisational training policies when it comes to paying for development opportunities not related to an employee’s current position.

A proposed element of the learning and development program will allow staff to apply for training that is not, directly related to their current position. Applications will be assessed on work performance and commitment to Council’s values. Procedures will ensure that the process of approving applications is fair and transparent.

Reward and Recognition Shellharbour City Councils Reward and Recognition Program aims to promote a culture of working together to improve upon the services we provide to our Community, Customers, Councillors and Council. The program encourages innovation and outstanding achievements, which reflect Councils values and commitment to the community. Quarterly awards are given at the departmental level throughout the year culminating in an annual function

While this program provides recognition and reward for staff further work is needed in the area of reward and recognition of high-performing staff who have reached the top of their salary range and who have skills and knowledge that are critical to the overall performance of the organisation.


Recruitment and Retention

Branding

Developing an employer brand plays a critical role in both attracting and retaining talent as it will clearly communicate Council’s culture and values, giving people a compelling reason to want to work for and stay with Council. To assist with developing a Shellharbour brand Human resources will work with staff and the Communications team to determine what makes working at Shellharbour City Council different and why do they work here. The aim is to develop a uniquely Shellharbour approach to recruitment.

The ‘Current Vacancies’ page on Councils website is one of the most commonly accessed pages with 74,938 views in the last 12 months which is 11.07% of the total views on Councils website.

This provides Council with an opportunity to inform and impress potential job applicants and others about our organisation, culture and community. Applying for a position with Council may be the only contact an individual ever has with Shellharbour City Council and the only opportunity we have to leave the right impression.

Council has undertaken extensive research on the recruitment space across local government. We have reviewed the recruitment pages of numerous council websites and evaluated them on simple criteria; • Is the information easy to find? • Is it easy to understand?• What does it tell you about the organisation and its culture?


E-Recruitment

It is anticipated that the introduction of e-recruitment technology and centralising the administration of recruitment will have a flow-on effect to all areas of Council such as administrative staff and records as they will no longer be required to perform administrative tasks associated with recruitment. Managers and supervisors should also notice a reduction in the input required by them in this process.

The real benefits of this model are the ability to manage large volumes of applications (i.e. entry level positions) and correspondence more efficiently. At present panels struggle to deal with large numbers of applications and further adding to the problem are new websites which have emerged which send out resumes automatically for positions advertised. The e-recruitment system will help manage these situations more effectively as candidates will need to enter their details in the system to apply for positions and Human Resource staff will have the ability to undertake filtering activities as part of the short listing process.

The review also covered other arrangements such as trainees, apprentices, cadets, work experience and volunteers. Bringing people into the organisation under such arrangements is time consuming and lacks co-ordination. The changes we are proposing for the website and e-recruitment will improve these processes as well as providing a more streamlined and proactive means of managing recruitment.


Attraction and Retention

Flowing on from the recruitment process is the on-boarding of the new employees. On-boarding best practice is to ensure that new employees are given the best opportunity to succeed by providing them with a head start and a positive on-boarding experience (Table 4).

Council’s General Induction is a one day program with numerous speakers covering key areas within Council. Additional sessions are held for payroll and Work, Health & Safety. This program is scheduled every two months and is not always timely for new employees.

Online induction will eliminate time consuming processes and allow individuals to complete the training at a time that suits them. The aim is not to be comprehensive but rather get the important information across to new starters and not bore or overload them with too much detail that they may not need.

In 2018 Council implemented a new electronic recruitment system. The system will streamline the recruitment process which will assist Council in appointing the most suitable candidate in a timely and efficient manner, resulting in the reduction of the total recruitment process. The system will also reduce the workload on managers giving them more time to spend on their key business areas.

Table 4 - E-Induction ProgramsAction Key tasks 2018 2019 2020Ensure that new employees are appropriately inducted into council.

• Identify information required for induction ensuring that legal and legislative requirements are met.

• In consultation with stakeholders identify what additional information is to be included in inductions.

• In consultation with ELT and SMT determine what face to face induction is required.

P

Create electronic induction.

• In consultation with stakeholders determine the most appropriate format for each electronic induction segment.

• Identify the skills needed to create content and if necessary organise training.

P P

Ensure all staff and managers are trained in the new system and processes.

• Develop training for staff and managers in the new system and associated processes.

• Ensure that processes are documented.P P P

Linking Strategy and Planning with Performance Review Process

The need for more frequent feedback is consistent with the changes taking place in the performance management space in general.

Council conducted an extensive review of the existing Performance Management System which involved consultation with staff across Council. Based on the review a new system will be introduced in late 2018. To ensure ongoing acceptance of the new system a working party will be formed.

The new Performance Management System will assist with accountability and by encouraging managers to have more frequent and open discussions with their staff it will promote a more open culture within Council.


Equity and Diversity in the workplace

Council recognises the strength that diversity brings to Council and the Community. As staff, managers and elected representatives of Shellharbour City Council work together to promote gender equity and diversity at all levels within our organisation.

Council continues to have a high representation of women in senior management roles and we are continuing to promote flexible working conditions to assist women in the workforce.

Council is reviewing its Aboriginal Employment Strategy and will be developing a Reconciliation Action Plan (RAP) in 2018.

Where do we want to be?The Workforce Management Plan outlines council’s contribution to achieving the Objective and Strategies from the Community Strategic Plan 2018 -2028 and the Delivery Program 2018 – 2021. Table 5 below outlines the key Objectives and Strategies that the Workforce Plan aligns to.

Table 5 - Objectives and Strategies

Objectives Strategies3.2 Supports and increases employment and business opportunities within a strong local economy

3.2.2 Create, promote and maintain local business, job, investment and lifestyle opportunities

4.2 Supported by a Council that is responsive, accountable and financially viable

4.2.1 Undertake Council activities within a clear framework of strategic planning, policies, procedures and service standards

4.2.2 Continually improve services to enhance the customer experience and meet customer expectations

Enquiries and feedback should be made to:The General Manager

Shellharbour City CouncilLocked Bag 155

Shellharbour City Centre NSW 2529

Telephone: (02) 4221 6111Facsimile: (02) 4221 6016

E-mail: [email protected]

www.shellharbour.nsw.gov.au

2018 - 2028 · help create financially stronger councils, improve council performance and...

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