maitland city council extraordinary meeting agenda · 2017. 10. 27. · council adopt the asset...

MAITLAND CITY COUNCIL

EXTRAORDINARY MEETING AGENDA

02 MAY, 2006

EXTRAORDINARY MEETING AGENDA 02 MAY, 2006

Page (i)

TABLE OF CONTENTS

ITEM SUBJECT PAGE NO 1 INVOCATION.............................................................................................. 1

2 APOLOGIES ............................................................................................... 1

3 DECLARATIONS OF PECUNIARY INTEREST ......................................... 1

4 PUBLIC ACCESS ....................................................................................... 1

5 OFFICERS REPORTS ................................................................................ 2

5.1 ASSET MANAGEMENT STRATEGY .......................................... 2

5.2 STORMWATER MANAGEMENT SERVICES CHARGE........... 24

5.3 DRAFT MANAGEMENT PLAN 2006/07.................................... 34

6 COMMITTEE OF THE WHOLE................................................................. 43

6.1 CONSIDERATION OF TENDERS - MT VINCENT WASTE DEPOT BUND WALL EXTENSION........................................... 43

7 CONSIDERATION OF ITEMS FROM COMMITTEE OF THE WHOLE .... 44

8 CLOSURE................................................................................................. 44


PRESENT

1 INVOCATION

2 APOLOGIES

3 DECLARATIONS OF PECUNIARY INTEREST

4 PUBLIC ACCESS

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5 OFFICERS REPORTS

5.1 ASSET MANAGEMENT STRATEGY

File No: 12/1

Attachments: Asset Management Strategy

Responsible Officer: David Evans General Manager

Author: Chris James Manager Assets & Infrastructure Planning

EXECUTIVE SUMMARY The purpose of this report is to present for Councils consideration an Asset Management Strategy that will provide guidance and a structured set of actions to ensure improved service delivery and sustainable management of the communities infrastructure . The intent of the Strategy is to provide an overall framework to guide the management of Councils infrastructure assets.

OFFICER'S RECOMMENDATION THAT:

1. Council adopt the Asset Management strategy as detailed in this report

2. Annually review the Asset Management Strategy as part of Councils management and corporate planning process

REPORT Asset Management is the process of planning, acquisition, operation and maintenance, renewal and disposal of infrastructure assets. Its objective is to maximise asset service delivery and manage risks and costs over the life of the assets. A broad agenda for asset management and infrastructure planning over the next five years must focus on how Council can manage the following infrastructure issues

• Management of growth • Funding pressures and prioritisation • Shifting of State and Federal responsibilities to local government • Increasing community expectations

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• Changing community demographics in areas such as aging youth employment etc


Asset Management Strategy (Cont.)

These issues are essentially about change, finance and the new way that society is functioning. The key question is, how can Council build, maintain and finance the next generation of local government infrastructure? Council will have to;

• Ensure that there is an integrated and multi disciplinary approach to asset management.

• Define its asset management objectives, strategy and plan • Develop long term financial strategies that ensure existing and new assets are

sustainable • Improve the knowledge and maintenance of its existing assets • Improve its cost effectiveness and maximise the value of expenditure • Focus on what is the most appropriate level of service and what it should be

delivering • Assess the relevance and need for community assets • Ensure flexibility in methods of service delivery • Explore opportunities for regional assets creation

It is essential that Council as the responsible authority for the community’s public assets has clearly defined objectives, standards and procedures for the management of infrastructure assets from a whole of life and system wide point of view. The following documents provide the necessary framework to guide Council in meeting its asset management obligations

• Corporate Plan or Policy

• Asset Management Strategy

• Asset Management Plans

• Financial Strategy Corporate Plan or Policy – establishes the Councils goals and objectives for asset management and creates the framework for the preparation of the asset management strategy. Asset Management Strategy – outlines how Council will achieve its asset management objectives Asset Management Plans – A plan developed for the management of individual asset categories assets eg. Roads, Recreation and Buildings. The plans define service levels, present cash flow forecasts and specify capital expenditure for renewing or upgrading assets

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Financial Plan - provides financial direction, decisions and actions that will enable the Council to achieve its financial objectives. It is an element of Councils strategic planning and is designed to support Councils annual management plan and budget development processes. In addition to the above, Council has recently adopted a Citywide S94 Plan. This S94 Plan places significant asset funding obligations on Council and has been a key consideration in the development of the asset management strategy. S94 funds and projects are a direct result of growth in the City. The consequence is an expanded network of infrastructure and accordingly is a fundamental consideration in Councils asset management planning. Corporate Plan - Asset Management Goals The Corporate Plan 2005-2008 sets out Councils commitment and goals for asset management. In particular the plan identifies the following areas of corporate asset management policy: -

• Council supplied infrastructure will be designed, constructed and maintained to ensure that the communities needs for these services are met in an economically sustainable fashion

• Need for clearly defined asset management strategies and plans • Ensure there is an integrated and multi-disciplined approach to asset

maintenance • Development of long-term financial strategies to ensure the maintenance of

existing and new assets is sustainable • Continued assessment and review of funding levels for routine maintenance

programs • Long term funding and maintenance implications of acquiring new assets

Asset Management Strategy The asset management strategy is a key component of Councils asset management process and links with the Corporate Plan, Management Plan, Asset Management Plans and S94 Plan. The strategy is designed to support the corporate asset management objectives and identifies the key actions to be undertaken to achieve Councils objectives and future direction with respect to its infrastructure assets. It must be remembered that this is a strategic document and the questions that are being addressed are essentially “big picture’ with broad costs. It has been structured to provide a simple, coherent snapshot of Councils asset position. The strategy is based on the following principles: -

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• Maintenance of the existing infrastructure without the acquisition of additional assets or major upgrades except via S94

• Continued focus of asset management on the core infrastructure that underpins Council services

• Provision of funding for replacement of the asset • Service levels remaining the same with a gradual and sustainable

improvement because of a funded replacement programme • Meeting all statutory and duty of care requirements • Minimising whole of life costs • Recognising that any one off major capital projects such as new facilities will

have to be funded by loan borrowings The strategy takes into account Councils financial obligations required under the S94 plan where Council is part funding works for public services and amenities based on equity factors between existing and new population. The key financial issue arising from this process is the projected shortfall between income and expenditure of $40 to $50 million over the next ten years. This is obviously not sustainable. To manage this projected shortfall the strategy proposes the following measures: -

1. Increase Councils revenue base through a special rate variation to assist in funding the ever increasing infrastructure renewal gap recognising that the rate variation sought will not meet this shortfall.

2. Phasing in contributions to asset reserves over 10 years for replacement of

assets

3. Focussing expenditure on essential and high priority works across all asset categories

4. Asset rationalisation

5. Increasing the effectiveness and utilisation of the existing asset base.

6. Deferring works with the recognition that this is not sustainable in the medium

term.

7. Comprehensive review of service levels across all asset categories with an emphasis on what is realistic practical and achievable.

8. Annual review of the strategy

CONCLUSION The recommendations contained within this report and the accompanying strategy are designed to allow Council to achieve its asset management goals and objectives.

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The strategy and supporting individual asset management plans will be reviewed on an annual basis.

FINANCIAL IMPLICATIONS This matter has no direct financial impact upon Council's adopted budget or forward estimates. The strategy has been prepared in conjunction with Councils S94 Plan and Draft 2006/2007 Management Plan. The strategy will have a positive long term impact and will contribute to the on-going financial sustainability of Council

POLICY IMPLICATIONS This matter has no specific policy implications for Council.

STATUTORY IMPLICATIONS There are no statutory implications under the Local Government Act 1993 with this matter.

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Officers Reports

Asset Management Strategy

Meeting Date: 2 May 2006

Attachment No : 1

Number of Pages : 16

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Maitland City Council

Asset Management Strategy

May 2006

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TABLE OF CONTENTS 1. INTRODUCTION 3

2. ASSET MANAGEMENT – WHY IS IT IMPORTANT? 4

2.1 LEGISLATION AND STATUTORY FRAMEWORK 4

2.2 CORPORATE PLAN 2005-2008 5

2.4 STRATEGIC AGENDA 6

3 WHAT IS OUR CURRENT SITUATION 7

3.1 EXISTING ASSET SUMMARY 7

3.2 CITYWIDE S94 PLAN 11

3.3 FINANCIAL ANALYSIS 11

4 WHERE DO WE WANT TO BE? 13

4.1 ASSET MAINTENANCE & MANAGEMENT 13

4.2 URBAN INFRASTRUCTURE CONSTRUCTION 13

4.3 SERVICE DELIVERY 13

5 HOW WILL WE GET THERE 15

6. RECOMMENDED ACTION 16

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1. INTRODUCTION Maitland City Council is faced with an ever increasing demand for services in an environment of reduced funding, ageing infrastructure, increasing maintenance costs and an expanding new assets base as a result of sustained urban expansion. There are a significant number of assets and services that have been transferred from other levels of government and the public sector without recognition of the on going asset lifecycle costs. It is essential that Council as the responsible authority for the community’s public assets has a clearly defined direction, with appropriate standards and procedures for the management of infrastructure assets. The asset management strategy is a key component of Councils asset management process and links with the Corporate Plan, Management Plan, Asset Management Plans and S94 Plan. It brings together the major components of Council’s asset management process and provides a clear direction for improved asset management within the organisation. This strategy will provide a basis on which Council can make decisions relating to the maintenance of existing assets and the planning and acquisition of new assets. The financial and long-term implications of Council decisions will be more clearly highlighted than they have been in the past. The strategy will identify where we are now, where we want to go and how we are going to get there. It must be remembered that this is a strategic document and the questions that are being addressed are essentially “big picture’ with broad costs. It has been structured to provide a simple, coherent snapshot of Councils asset position The following documents were used in the development of Councils asset strategy. IPWEA International Infrastructure Management Manual and the various documents and guidelines provided by Local Government Victoria, the Municipal Association of Victoria and the Department for Victorian Communities.

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2. ASSET MANAGEMENT – WHY IS IT IMPORTANT? The City’s infrastructure is the platform for the provision of services for the community in the areas of recreation, planning, transportation, regulatory, waste management, cultural, information, social and environment. The successful delivery of Council services in these areas relies on providing and managing a broad range of infrastructure assets. Specifically, it is physical infrastructure that assists in the delivery of these services and includes buildings, roads, drainage, property, parks and plant and equipment. Asset Management is the process of planning, acquisition, operation and maintenance, renewal and disposal of these assets. Its objective is to maximise asset service delivery and manage risks and costs over the life of the assets.

2.1 Legislation and Statutory Framework

Local Government Act The Local Government Act provides a charter that comprises a set of principles that are to guide Council in the carrying out of its functions. The Council’s charter specifically addresses asset management by stating in part that a Council is to

provide appropriate services and facilities for the community and to ensure that those services and facilities are managed efficiently and effectively

•

• effectively account for and manage the assets for which it is responsible

AAS27 The state of Councils infrastructure assets is formally summarised using AAS27 (Australian Accounting Standard No. 27). This reporting mechanism provides an insight into what the Council is responsible for and what the current situation is in the way of infrastructure. This accounting standard sets out the financial reporting method and requirements for Councils across the State and is used in Council’s Annual Report. Simply, it shows the present day cost to replace the asset type (replacement cost or brand new cost) and the value of the assets based on its remaining life (written down value). It is calculated each year and takes into account the annual capital expenditure and the aging on each of the asset groups. However, it is only a simple and overall indication of the condition. In practice an asset’s annual rate of financial depreciation is different to its annual rate of physical degradation. Maitland City Council is in the fortunate position of having a condition based asset management system that utilises a regular

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maintenance inspection regime allowing a reasonably accurate snapshot of the state of the Councils assets at any given time.

2.2 Corporate Plan 2005-2008 The Corporate Plan – 2005-2008 sets down the vision and key focus areas of the Council that project the future for the Maitland community. This vision and the strategic goals form the basis of the entire operation of the Council and consequently play a fundamental role in the development of the strategic direction for the future.

Our Vision “A safe and healthy city, a quality lifestyle, a vibrant and sustainable future”

Our Strategic Goals

A sustainable and healthy environment • • • •

• • • • • •

•

•

•

A focused, dynamic and sustainable economy A vibrant, healthy, equitable and informed community A city that is accessible and safe

To achieve its vision Council has identified six key focus areas as a means of directing resources and measuring outcomes:

City Environment Community lifestyle City Infrastructure Tourism / Economic Development Strategic Management Good Government

Council’s commitment to Asset Management is clearly set out in the Corporate Plan in the City Infrastructure focus area. In particular the plan identifies the following areas of corporate asset management policy: -

Council supplied infrastructure will be designed, constructed and maintained to ensure that the communities needs are for these services are met in an economically sustainable fashion

Need for clearly defined asset management strategies and plans

Ensure there is an integrated and multi-disciplined approach to asset maintenance

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Development of long-term financial strategies to ensure the maintenance of existing and new assets is sustainable

•

•

•

• • • • •

Continued assessment and review of funding levels for routine maintenance programs

Long term funding and maintenance implications of acquiring new assets

2.4 Strategic Agenda A broad agenda for asset management and infrastructure planning over the next five years must focus on how Council can manage the following infrastructure issues

Management of growth Funding pressures Shifting of State and Federal responsibilities to local government Increasing community expectations Changing community demographics in areas such as aging youth employment etc

These issues are essentially about change, finance and the new way that society is functioning. How is Council going to build, maintain and finance the current and next generation of local government infrastructure?

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3 WHAT IS OUR CURRENT SITUATION Over the last 5 years Maitland has experienced consistent high population growth rates. The current growth rate of 2.8% is the highest of all NSW local government areas. In addition the largest population increases in inland LGAs in 2004-5 occurred in Maitland (1700 people). The City has reached a threshold where a substantial increase in infrastructure expenditure is required. To address this concern the first step is to obtain a clear picture of Councils asset position. Councils approach to asset management has been to improve incrementally, the asset management systems and process to an optimum level appropriate to the needs of the organization. Council is in a position where the knowledge of its infrastructure assets is such that the long-term implications of asset management decisions can be understood with a relative degree of certainty. Currently Council has a combination of basic and sophisticated asset management systems in place that meet legislative and accounting requirements. The next step is to develop the basic systems currently in place to a more advanced level identifying strategies to reduce lifecycle costs. This more advanced approach employs more detailed asset and service level analysis, improved risk management and more accurate and longer term financial planning.

3.1 Existing Asset Summary Baseline condition assessments for all Councils asset classes have been completed and data sets and management plans prepared. A summary of Councils current position with respect to asset management in the key asset areas is provided in the tables below. These summaries are supported by an extensive asset database. Table 1 shows a summary of the AAS27 Data Table 2 shows a summary of the asset categories, quantities and status of data collection Basically these tables tell us that: 1. Council has a lot of assets, 2. They represent significant community investment over a long time 3. Council has deferred liability of almost $30 million 4. Over the long term this position is not sustainable if the current levels of

service are to be maintained. As stated earlier this is principally an accounting position and provides simplistic but clear picture of Councils asset position.

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TABLE 1 AAS27 ASSET SUMMARY

ASSET CURRENT

WRITTEN DOWN VALUE (04/05)

CURRENT REPLACEMENT VALUE (04/05)

Estimate of amount required to bring to

satisfactory standard

Estimate of the annual expense of

maintaining the works at that

standard

Maintenance undertaken 2004/2005

Road Pavement $152,708,679 $235,789,478 $22,458,680 $4,378,248 $3,540,000

Road Inventory Assets $43,736,000 $51,215,000 $1,901,800 $1,024,300 $508,000

Bridges $4,119,000 $5,843,000 $610,000 $116,000 $51,000

Drainage $67,589,000 $84,894,000 $1,698,000 $848,940 $223,000

Public Building $20,476,000 $33,515,000 $1,675,750 $670,310 $435,000

TOTALS $288,628,679 $411,256,478 $28,344,230 $7,037,798 $4,757,001

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TABLE 2 ASSET CATEGORIES DATA STATUS Asset Category

Type Qty TotalReplacement

Value

Data Collected Asset Management Strategy

Asset Management Plan

Roads Road Pavement 622 km $285,000,000 Collected Strategy adopted by

Council Developed for road

network. Basic AM Plan completed

Kerb & Gutter 583 km Footpath/Cycleway 152 km Signs 5000+ Drainage Conduits & Culverts 220 km $85,000,000 90% collected Draft Strategy

Developed Basic AM Plan

completed Pits 7677 Headwalls 441 Flood Gates 33 Detention Basins 40 Gross Pollutant

Traps 18

Bridges Concrete Steel &

Timber 37 $12,000,000 Collected Draft Strategy


completed Buildings District 5 $45,000,000 Collected Draft Strategy


completed Child Care Centres 4 Libraries 4 Community Halls 12 Amenities Buildings 27 Toilet Blocks 14

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cont. cont.e Grandstands 9 Kiosks 11 Equipment Sheds 17 Miscellaneous 7 Recreation Playgrounds 72 $14,000,000 Collected Draft Strategy


completed Tennis Courts 45 BBQ 25 Picnic Tables 120 Park Benches 65 Mowing 500 Ha Garden Beds 140 Floodlighting

(Sports) 152

Street Lights Lights 6,600 $25,000,000 Energy Australia

responsibility Energy Australia

responsibility Energy Australia

Note : The basic Asset Management Plans developed by Council include:

1. Asset Description - location, construction materials, when built, condition. 2. Condition assessment. All assets have been inspected

3. A definition of the level of service. In most cases this is maintenance of the existing service levels 4. Financial forecasts for the next 10 years 5. Programme of maintenance and capital works 6. Regular review regime.

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3.2 Citywide S94 Plan Council has recently adopted a Citywide S94 Plan. This S94 Plan places significant asset funding obligations on Council and has been a key consideration in the development of the asset management strategy. S94 funds and projects are a direct result of growth in the City. The consequence is an expanded network of infrastructure and accordingly is a fundamental consideration in Councils asset management planning.

3.3 Financial Analysis To confirm the state of the Councils financial position and to guide future planning Council has developed a Ten Year Financial Planning Model. This model specifically links the draft Asset Management Strategy and supporting asset management plans with the adopted S94 Plan. The scenario modelled was essentially an optimum position based on maintaining the current service levels, fully funding asset replacement reserves and maintaining current levels of maintenance expenditure The outcome from this process is a projected shortfall between income and expenditure of $55 million over the next ten years. The graphs below illustrate the models predicted budget position

Current and Required Total Budget

$0

$20,000

$40,000

$60,000

$80,000

$100,000

Years

$(00

0's)

Current Expenditure Required Expenditure

Current Expenditure $51,000 $52,785 $54,632 $56,545 $58,524 $60,572 $62,692 $64,886 $67,157 $69,508

Required Expenditure $55,054 $58,280 $58,676 $59,390 $63,514 $64,248 $75,004 $69,658 $73,135 $76,682

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

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Funding Deficit

-$14,000

-$12,000

-$10,000

-$8,000

-$6,000

-$4,000

-$2,000

$0Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year

10

Year

$(00

0's)

Funding Deficit

The result of the AAS27 and condition based approaches to asset management detailed above confirms Councils position and are not unexpected. This situation is not unique to Maitland and is being faced by all Local Government bodies across the State. The following sections of the strategy take this understanding of our current position in the context of Councils corporate goals (where Council wants to be) and highlights what actions are required.

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4 WHERE DO WE WANT TO BE? The Corporate Plan 2005 – 2008 City Infrastructure focus area identifies the following asset management goals for Council to achieve.

4.1 Asset Maintenance & Management Clearly defining Council’s asset management policy, strategy and plan

Focusing on developing programs and strategies for realistic, efficient and cost

effective asset maintenance by ensuring that there is an integrated and multi disciplinary approach

Developing long term financial strategies to ensure that maintenance of existing and new assets are sustainable

Continually assessing and reviewing the adequateness of existing funding levels for routine maintenance programs

Carefully considering the longer term funding and maintenance implications of new assets

4.2 Urban Infrastructure Construction Implementing urban infrastructure design and construction standards to ensure

the long term sustainability, resource efficiency, public safety and amenity of infrastructure provision

Evaluating how future demands and trends will affect Council’s existing assets and where the need for new or improved assets will be

Continuing to manage and prioritise construction and maintenance of our local infrastructure in accordance with industry standards and accepted best practice

4.3 Service Delivery Improving our knowledge of the existing condition, rate of deterioration, desired

service level and strategic direction of all of Council’s assets to ensure accurate determination of expenditure and maintenance requirements

Optimising Council’s existing asset base by pursuing improved service levels from the same infrastructure, improved cost effectiveness and maximising the value of our expenditure

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Exploring options for flexibility in methods of service delivery: re-assessment of the need for some assets regional asset creation balancing resourcing levels

Focusing on what is the most appropriate level of service and what Council

should be delivering.

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5 HOW WILL WE GET THERE The way forward is determined by comparing the current situation with where Council wants to be. From this shortcomings are highlighted and options for change identified. The strategy whilst focussing on a back to basics approach must deliver tangible improvements to infrastructure The actions proposed in this strategy are based on the following principles:

1. Maintenance of the existing infrastructure without the acquisition of additional assets or major upgrades except via S94

2. Continued focus of asset management on the core infrastructure that underpins Council services 3. Provision of funding for replacement of the asset 4. Service levels remaining the same with a gradual and sustainable improvement because of a funded replacement programme 5. Meeting all statutory and duty of care requirements 6. Minimising whole of life costs 7. Recognising that any one off major capital projects such as new facilities

will have to be funded by loan borrowings The Asset Management strategy must align with Councils corporate goals. Likewise the corporate goals whilst challenging must be realistic. The actions proposed below are considered to be a practical mix of measures that will allow Council to achieve its asset objectives and address the funding gap. The avenues open to Council are limited, however the areas of revenue, rationalisation, efficiency and service levels are considered to be where the greatest opportunities lie. The need for Council to grow its revenue base to invest in infrastructure is critical, however the opportunities to do so are limited. The reality is that Local Governments main source of revenue is from Council rates. The issues of high population growth rates combined with existing asset maintenance and renewal expenditures have resulted in an immediate requirement for a sustained increase in funding.

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6. RECOMMENDED ACTION

1. Increase Councils revenue base through a special rate variation to

assist in funding the ever increasing infrastructure renewal gap recognising that the rate variation sought will not meet this shortfall

2. Phasing in of funding over 10 years for replacement of assets 3. Focussing expenditure on essential and high priority works across all

asset categories 4. Asset rationalisation 5. Increasing the effectiveness and utilisation of the existing asset base. 6. Deferring works with the recognition that this is not sustainable in the

medium term. 7. Comprehensive review of service levels across all asset categories

with an emphasis on what is realistic practical and achievable. 8. Annual review of the strategy

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5.2 STORMWATER MANAGEMENT SERVICES CHARGE

File No: 43/1

Responsible Officer: Graeme Tolhurst Group Manager Finance & Administration

Author: Graeme Tolhurst Group Manager Finance & Administration

EXECUTIVE SUMMARY The Local Government Amendment (Stormwater) Act 2005 and the Local Government (General) Amended (Stormwater) Regulation 2006 came into force on 13 April 2006. This Act and Regulation allows Councils to charge up to $25 per residential lot (excluding vacant) and $25 per 350m2 of business and industrial land. The charge does not apply to farming or mining category of land. Council staff have itemised a list of works which need to be undertaken within the Maitland area and fit within the criteria of the “Stormwater Management Services Charge”. The total amount that can be raised through this charge for 2006/2007 is $500,000.

OFFICER'S RECOMMENDATION THAT Council adopt the Stormwater Management Service Charge to be part of the Draft Management Plan 2006/07.

REPORT On the 13 April, 2006 the Local Government Amendment (Stormwater) Act 2005 and the Local Government (General) Amendment (Stormwater) Regulation 2006 came into force. The object of the regulation is to prescribe the maximum amount that may be charged by a Council for the provision of stormwater management services. It also allows for the provision of information on stormwater management services within the Council’s Annual Report. The Department of Local Government have issued a circular with answers to some Frequently Asked questions. The main points from that circular are as follows: What is stormwater management? For the purpose of the new annual stormwater management services charge, stormwater management is defined as the management of the quantity and quality of stormwater that flows off a parcel of privately owned, developed urban land.

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STORMWATER MANAGEMENT SERVICES CHARGE (Cont.)

What is a stormwater management service? A ‘stormwater management service’ is a service to manage the quantity and/or quality of stormwater that flows off land, and includes a service to manage the re-use of stormwater for any purpose. Which land is eligible to be charged for the provision of stormwater management services? Land within an urban area that is in the residential and business categories for rating purposes, except vacant land, for which the council provides a stormwater management service. All properties that are non-rateable or owned by the Department of Housing will not be levied the Stormwater Management Charge. For the purpose of levying the charge, what does ‘vacant land’ mean? Vacant land in this context means that there are no buildings, large slabs of concrete or car parks (ie. no impervious surfaces). Is the charge only for additional stormwater management activities? Yes. This charge can only be levied when a council provides additional or a higher level of stormwater management service to eligible land. The intention of the charge is to allow councils to raise stormwater management revenue in addition to that already provided through a council’s general income. There will be significant challenges obtaining community support for raising a charge when there is no corresponding increase in the level of service provided. Councils are responsible for carrying out stormwater management activities to deal with stormwater runoff from which areas ? Councils have a responsibility to carry out stormwater management activities within their local area, including managing stormwater runoff from: public land (eg parks and roads); private land eligible to be levied the charge (eg private residential properties and commercial/industrial premises); and other land ineligible to be levied the charge (eg Department of Housing properties, non-rateable land).

What can income from the annual stormwater management services charge be spent on? The income from the charge can be spent on both capital projects and recurrent expenditure relating to new or additional stormwater management services to eligible land such as: planning, construction and maintenance of drainage systems, including pipes, channels, retarding basins and waterways receiving urban stormwater;

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planning, construction and maintenance of stormwater treatment



measures, including gross pollutant traps and constructed wetlands; planning, construction and maintenance of stormwater harvesting and reuse projects; planning and undertaking of community and industry stormwater pollution education campaigns; inspection of commercial and industrial premises for stormwater pollution prevention; cleaning up of stormwater pollution incidents (charge can fund a proportion); water quality and aquatic ecosystem health monitoring of waterways, to assess the effectiveness of stormwater pollution controls (charge can fund a proportion); and monitoring of flows in drains and creeks, to assess the effectiveness for flow management (flooding) controls (charge can fund a proportion) non-permanent staff specifically appointed to work on stormwater management project(s).

As a rule of thumb, approximately 10 – 15% of the costs associated with stormwater capital project works should be allocated for continued maintenance. Are there any limits on the amount of the annual stormwater management charge? Yes. The charge is capped at the lower of: $25 per residential property. In relation to business properties the charge is capped at $25 per 350m² (or part thereof); or the cost of providing the additional stormwater management services.

How is the charge calculated for residential strata lots ? Councils may charge no more than the actual cost of providing a stormwater management service to residential strata lots. As a stormwater management services charge relates to managing stormwater runoff from impervious surface areas, this is almost always substantially less for strata lots than the cost of providing the service to a standard residential property. It is therefore inappropriate to charge the same amount for a strata lot as for a standard residential property. In calculating the cost of providing a service to a residential strata lot councils may charge up to 50% of the adopted charge as applied to standard residential properties. This effectively caps the stormwater management services charge to residential strata units at $12.50 per unit. For example, if the cost of providing a stormwater management service to standard residential properties is calculated to be $20 per property, strata lots may be levied at up to $10 per strata lot. How is the charge calculated for business properties? The charge for business properties should be the lower cost of providing the additional stormwater management service, or $25 per 350m² (or part

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thereof).



As a hypothetical example, a business property has a land area of 800m². If the cost of providing the extra stormwater management service to the property is estimated to be $95, but the cap for a land area of 800m² is 3 x $25 = $75, then the amount levied would be $75.00. The gap between the capped amount and the service amount must be funded from other income sources. How is the charge calculated for business strata complexes ? The charge for business strata lots should be the lower cost of providing the stormwater management service, or $25 per 350m² (or part thereof). The cost should then be divided on a pro-rata basis between the lots. As a hypothetical example, a property containing 10 business strata lots has a land area of 1,250m². If the cost of providing the stormwater management service to the building is estimated to be $120, but the cap for a land area of 1,250m² is 4 x $25 = $100, each of the 10 units may be levied an amount of $100 ÷ 10 = $10. Alternatively, the charge could be apportioned according to the area of each strata lot. The gap between the capped amount and the service amount must be funded from other income sources. How is the stormwater management services charge calculated for company title properties? The charge is calculated for company title properties in the same manner as it is calculated for all other properties, according to the land category (residential or business). The charge is then apportioned according to the number of shares in the company owned by each shareholder. Can/must rebates or discounts be offered? Can/must concessions for pensioners be offered? The offering of discounts or rebates to ratepayers of eligible land is at the discretion of each council. Discounts or rebates could be applied in circumstances where: residents can demonstrate good stormwater management practice, eg. prior installation of rainwater tanks; pensioners are liable for the charge; or councils wish to encourage business to adopt improved stormwater management practices.

However, the mandatory concession that applies to ordinary rates, domestic waste, water and sewerage charges does not apply to the stormwater management charge. What are the additional reporting requirements? Councils will be required to report on the implementation of each of the stormwater management services proposed in the management plan. This will compare the services proposed in the management plan with the services actually carried out and include a statement explaining any differences

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between them.



Do funds raised from the levying of the annual stormwater management services charge have to be spent within the financial year they are raised? Funds related to the charge do not have to be spent within the year they are raised, as it is recognised that these funds may be used to resource major programs spanning a number of years. Relevant reporting requirements would apply to ensure that expenditure is appropriately accounted for. What are the differences between a special rate for stormwater management and a stormwater management services charge? Special rate

for stormwater management Service charge for stormwater management

Calculation method Structure must include an valorem component

The lower of a specified cap ($25 for residential lots) or the cost of providing additional stormwater services

Payees Specific group of ratepayers who benefit from, contribute to need for or have access to service.

All eligible ratepayers in the LGA receiving a stormwater management service.

Rate Pegged Yes No Approval/Consultation process

Ministerial approval required if special rate causes council to exceed permissible gneeral income limit

Community consultation through draft management planning process

Reporting Process In annual report if subject to special variation approval.

Through annual report.

What is the role of the Catchment Management Authorities? Catchment Management Authorities (CMAs) are generally responsible for overseeing natural resource management within their respective catchment. Generally, they also play a major role in determining distribution of Commonwealth and State funding to local government Natural Resource Management projects. For the purpose of administering the charge, the CMAs identify potential stormwater management related projects through Catchment Action Plans, and councils need to consider these plans prior to determining which stormwater management activities will be funded by the charge. Through consulting with CMAs during the project/activity planning phase involved with levying the charge, councils also have the opportunity to adopt partnership approaches towards addressing stormwater issues of regional or catchment-wide significance.

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Proposed Works Funded by the Stormwater Management Charge The income from the charge is to be spent on both capital projects and recurrent expenditure. The proposed works are predominately additional stormwater management services and will significantly lift the level of service on eligible drainage systems. The works listed below include works as defined by the Local Government Amendment (Stormwater) Regulation 2006 such as:

• Planning, construction and maintenance of drainage systems, including pipes, channels, retarding basins and waterways receiving urban stormwater

• Planning, construction and maintenance of stormwater treatment measures, including gross pollution traps and constructed wetlands

• Planning, construction and maintenance of stormwater harvesting projects • Monitoring of flows in drains and creeks to assess effectiveness • Stormwater education programs

Current expenditure on stormwater drainage construction and maintenance does include works on ineligible systems. However, the additional works identified through the raising of this charge only includes drainage systems affected by eligible lands. Recurrent Maintenance Proposed maintenance works will significantly increase and/or improve:

• Cyclic cleaning of pollution devices • Cyclic cleaning and inspection of eligible pits and pipes • Asset, Risk and Environmental management reporting and planning • Defects/ Monitor register

Capital Works For capital works, Council has developed plans which assist in the formation of the annual rolling works program for drainage. The principal plans are the Asset Management Plan for Drainage (2006) and the Urban Stormwater Management Plan (2003). The benefits from recurrent maintenance and capital works include:

Environmental enhancement Efficient function Reduction in blockages Improved asset replacement and risk management practices Reporting and monitoring Improved duty of care accountability Logistically unambiguous (Not Reactive) Reduction in customer service request

Draft Management Plan Under section 200A of the regulation a statement must be included in Council’s draft management plan and show: (a) Particulars of the stormwater management services charge that are to be funded by the annual charge (b) Particulars of the stormwater management charge that are funded from other sources than the annual charge (c) Particulars of the stormwater management services that are to be funded from the annual charge and from other sources, noting the proportion funded from other sources

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(d) Particulars of the Council’s proposed expenditure for the provision of stormwater management services. These particulars are set in the table below.

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Maintenance Works

Urban Drainage Type Network Size Stormwater Management Activity/ Goal Stormwater Service Outcome

Total Cost of Proposed

Works (c)

MCC & Other* Funded

(Existing) (b) & (d)

Service Charge Funded

(a)

Conduits & Culverts 220km Maintenance: Inspection Monitoring & Cleaning

Additional to exiting service level that manages both water

quantity and quality

$200,000 (50% funded by MCC or Other)

$100,000 $100,000

Pits & Headwalls 7577 Maintenance: Inspection, Monitoring

& Cleaning - 1500 pits per year giving a five year cycle



$180,000 (50%) $90,000 $90,000

MCC Flood gates 33 Maintenance: Annual Inspection, testing and operational maintenance



$20,000 (25%) $5,000 $15,000

Detention Basins 40 Maintenance: Desilt and water quality control maintenance. 6 basins per year = 7 year Cycle


quantity and quality (Non Riparian)

$48,000 (21%) $10,000 $38,000

Gross Pollutant Traps/Trash 130 Maintenance: Clear, clean and

maintain twice per year

Additional to exiting service level that manages and

improves both water quantity and quality

$156,000 (16%) $25,000 $131,000

Natural Creeks Watercourses and

Constructed Wetlands 9km

Maintenance: Desilt, Weeding and maintenance 1.5km per year = 7

year Cycle

Additional service that manages both water quantity and quality

(Non Riparian)

$25,000 (20%) $5,000 $20,000

Stormwater Management Plan implementation Various

Monitoring of water quality and aquatic ecosystems, system testing

and retrofitting.

Additional service level that manages both water quantity

and quality (Non Riparian)

$50,000 (10%) $5,000 $45,000

Total Maintenance Works $679,000 $240,000 $439,000



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Capital Works

Urban Drainage Structures Capital Works

Replacement - As per Maitland Council's Asset Management Plan

and Urban Stormwater Plan



$350,000 (59%) $205,000 $145,000

Urban Drainage Structures Capital Works Drainage System Modifications



$139,000 (54%) $75,000 $64,000

Total Capital Works $489,000 $280,000 $209,000

Total Drainage Works $1,168,000

(44.5%) $520,000 $648,000

* “Other” funding sources may include Sec 94 contributions and future grants not yet determined.



FINANCIAL IMPLICATIONS From the information provided, the Council has the opportunity to have a “Stormwater Management Service Charge” in its Draft Management Plan 2006/07. Council staff have determined that the total amount that can be raised from the criteria set by the relevant Act and Regulation is $500,000. The list of works attached to this report do not include any Section 94 Contributions Works or grants for Stormwater Management within the city. Also, the existing expenditure on drainage will be maintained and this additional stormwater management charge income, if adopted by Council, will be for additional works that are needed within the City.


STATUTORY IMPLICATIONS There are no statutory implications under the Local Government Act 1993 with this matter.

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5.3 DRAFT MANAGEMENT PLAN 2006/07

File No: 35/33/12

Responsible Officer: David Evans General Manager

Author: Leanne Harris Manager Strategic Services

EXECUTIVE SUMMARY In accordance with Section 402 of the Local Government Act 1993, Council is required to prepare a Management Plan with respect to the Council’s activities for the next three years and the Council’s revenue policy for the next year. This report presents the Draft Management Plan 2006/2009 to the Council with a recommendation that the Plan be placed on public exhibition in accordance with Section 405 of the Act. The Plan has been compiled following workshops with the Councillors and incorporates detail on principal activities, capital and operating expenditure, social human resource and environmental programs. The revenue policy sets out the proposed rating structure for 2006/07 plus all other fees and charges to be set by the Council which includes the 3.6% increase in the general rate as set by the State Government. The 2006/09 Draft Management Plan also includes an application to the Minister for Local Government for a Special Rate Variation of an additional 6% above the maximum 3.6% already set by the State Government. The purpose of this variation is to assist in funding Council’s increasing infrastructure renewal gap, as identified in its Long Term Asset Management Strategy, and to assist in funding identified and needed environmental programs. This report is recommending that the draft Plan be publicly exhibited for 28 days and Council seek formal submissions on the document. In addition it is recommended that Council convene a public forum during the exhibition period to present and explain the draft Plan to the community and respond to any questions.

OFFICER'S RECOMMENDATION THAT:

1. The Draft Management Plan 2006/2009 be exhibited for public comment in accordance with the statutory requirements of the Local Government Act, 1993.

2. Council determine its position in respect of additional loan borrowing, and if additional loans are supported, these be included in the draft Plan for exhibition.

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Draft Management Plan 2006/07 (Cont.)

3. Council convene a public forum during the exhibition period seeking community involvement and response to the Draft Plan

4. A further report be presented to Council upon completion of the formal exhibition period.

REPORT Each year in New South Wales all Councils are required to develop a "Management Plan" to inform their communities of their programmes for the year and the means by which those programs are to be financed. The Management Plan, as detailed in the NSW Local Government Act 1993, is a comprehensive document requiring a range of information on principal activities, performance targets, fees and charges, environmental and human resource programs. The Management Plan for 2006/2009 has been developed in the context of our Long Term Vision Statement and Corporate Plan and provides the fine detail on how individual goals are to be met. It also contains specific financial details and lists the mechanisms by which the Council monitors and reports on the organisation. As in previous years, the Draft Management Plan 2006/2009 is structured around the six key focus areas identified through Council’s Long Term Vision Statement and Corporate Plan:

• City Environment • Community Lifestyle • Our City’s Infrastructure • Economic Development and Marketing • Strategic Management of Council Resources • Good Government

SPECIAL RATE VARIATION One of the key principles of the Draft Management Plan 2006/09 is sustainable asset management in accordance with Council’s Long Term Asset Management Strategy and Policy. Council is also cognisant of its environmental obligations and the community’s increased environmental awareness. Over the past five years Maitland has experienced consistent population increases and its current growth rate of 2.8% is the highest of all NSW Local Government Areas. The demand for and expectations surrounding Council’s services are therefore increasing. This is coupled with an aging infrastructure base where there is an increasing gap between asset renewal and maintenance requirements and availability of funds. In recognition of this Council has developed a Ten Year Financial Planning Model, integrated with recently prepared Section 94 plans and a comprehensive asset

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management strategy. The key financial issue arising from this process is the projected shortfall between income and expenditure of approximately $55 million over the next ten years and more pressingly the projected shortfall of approximately $4 million in 2006/07. The principles which underpin the NSW State Government ‘Rate Pegging’ legislation are acknowledged, as indeed is the position of the State Government and Minister for Local Government, The Hon Kerry Hickey MP, that rate pegging is “here to stay”. It is also accepted that rate pegging since its inception has driven local government as an industry and Councils individually, to become more efficient in the use of available revenue and resources. It is evident however, that these efficiencies and the gains they have delivered are now being consumed by increasing use of community assets – driven particularly by high growth rates in a City like Maitland – and the commensurate deterioration of those assets, placing increasing pressures on Council to increase and fund higher levels of maintenance in order to prolong the usable life of the community’s assets. It is in these circumstances that Council must look to the avenues available to it, under rating legislation, to secure a useful and lasting increase in its annual rating income. In light of this situation, the Draft Management Plan proposes a Special Rate Variation of an additional 6% above the maximum 3.6% approved by the Minister for Local Government. This will generate an additional $1,380,086 in income for the Council. As evidenced above, the proposed rate rise will not fully fund the works identified in Council’s strategies. Projects have therefore been prioritised taking into account factors such as safety, asset protection and level of service. The table below indicates the broad spilt of the additional funding in the first year. Category Prioritised Benefit/Target Funding Bridges Timber bridge replacement and safety

upgrade of approaches, guard and hand rails

$325,504

Buildings Roof replacements, heritage building restoration and building refurbishments

$363,798

Roads and Traffic Safety Safety upgrades of major road network components and improve cycleway safety citywide

$305,280

Community/Recreation Increase safety and general standards across the City’s sporting facilities

$325,504

Environmental Programs Natural Resource Management and Rehabilitation, Community Education and Capacity Building

$60,000

Total $1,380,086 An analysis of properties within the Maitland Local Government area has revealed that a residential property will pay between $14 and $58 per annum for the additional rate income sought from the Minister. An indicative increase for each suburb for residential urban property is attached (Attachment 1). This list is only indicative because of variances in valuations in the different areas. It is also based on a residential urban property with a total area of between 600 and 900 square metres.

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DRAFT BUDGET 2006/07 A number of budgetary factors have influenced the preparation of the draft management plan. Significant changes to that of the 2005/06 Plan include:

An increase in the general rating revenue of approximately $1.2million which includes the general increase of 3.6% and an estimate for new properties, allowing for continued growth in the LGA

An increase in the Financial Assistance Grant of $430,000 An increase in the Domestic Waste Management Charge of $998,000 A predicted decrease in income from Development Services of

approximately $340,000 Increased expenditure of $900,000 on wages and salaries to cover

scheduled Award increases, competency payments & employment overheads

Increased loan repayments of $38,000 reflecting past decisions of the Council

An increase in street lighting costs of $190,000 A decrease in workers compensation costs of approximately $630,000

Taking all of these factors into consideration and allowing for the continued balance of funds between each of the key focus areas, the overall predicted budget position in the Draft Management Plan is a cash surplus of approximately $124,550.

PRINCIPAL ACTIVITIES The Draft Plan also sets out the principal activities for 2006/07 and beyond. These are projects, other than capital or maintenance works, that are generally undertaken using staff resources as distinct from specific funding allocations. Major activities proposed in the draft Plan include: Continued implementation of the Maitland Urban Settlement Strategy as the

key strategic planning framework to guide and manage the future growth of the LGA

Comprehensive Section 94 planning, management and administration to ensure plans are kept up to date and commensurate with growth in the LGA

Detailed Structure Planning of Central Maitland and Lochinvar to identify the future potential for urban growth and renewal

Extension of flood modelling upstream to the LGA boundary to provide more extensive data and inform strategic planning decisions

Preparation of detailed plans of management for sportsgrounds Business plan preparation to support stage 2 of the Cultural Precinct

development Continued development of asset management plans for individual asset

categories Benchmarking of various Council services such as kerb & gutter

construction, road construction and footpath construction Development of customer service performance indicators in relation to

Council’s new telephone system

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LOAN BORROWING Each year Council borrows $630,000 for specific capital work projects, including road, drainage, access and bridge construction works which in 2006/07 will be utilised as follows:

Proposed Project

Amount Proposed to be Borrowed 05/06

Construction of Local Roads $213,990

Construction of Bridges $79,567

Construction of Drainage $286,443

Construction of Access Improvements $50,000

Total $630,000 As indicated previously, even if Council is successful in its rate application, the additional income will only part fund the required shortfall in expenditure. For Council to be able to implement its long term asset management strategy therefore, the remainder must be funded through other means such as increased borrowing, revised fees and charges and asset sales, which are all being investigated. Borrowing is suitable for one-off capital items, however cannot be used for the funding of recurrent expenditure and maintenance. Debt is only sustainable where there is an increasing revenue stream and /or an expectation of a reasonable capital gain, both of which are difficult for Council to achieve. However in recognition of the predicted funding shortfall, and as an indication of Council’s commitment to the management of its infrastructure program, various loan options have been explored and factored into Council’s financial model. This has identified that Council does have the capacity to borrow a maximum of $1million in 2006/07 in addition to the normal borrowing program outlined above. This funding could then be used in, conjunction with the income from the special rate, for the construction of capital components identified in Council’s long term Asset Management Strategy. If Council is of the view that the additional $1million loan borrowing should be supported, Council should formally resolve to include this in the Draft Management Plan to be publicly exhibited.

SECTION 94 / COUNCILLOR INITIATIVES In previous years the Draft Management Plan has made allowance for detailed Section 94 expenditure programs. However, as the Council is aware a new draft Section 94 Plan was adopted in April 2006 which repealed the 1995 plan, under which the majority of existing Section 94 funds are currently being held. Council has already been given an undertaking that the expenditure of the existing funds will be the subject of a detailed report in the next two to three months. This report will also consider Councillor suggested initiatives to the extent that is possible,

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taking into consideration those that can be appropriately funded from Section 94, other programmed and prioritised works and major projects that require further consideration under Section 94. PUBLIC EXHIBITION In accordance with Section 405 of the Local Government Act, Council is required to publicly exhibit its draft Management Plan for a minimum period of 28 days to ensure that the community has the opportunity to comment on and have input into the Council’s priorities over the coming year/s. It is recommended that Council commence public exhibition of the draft Plan on Tuesday 9th May 2006. In addition, it is recommended that Council convene a public forum to provide the community with the details of the draft Plan, respond to any questions and encourage feedback and response. The suggested date for this forum is Tuesday 16th May 2006. In addition to the above, Council is aiming to achieve additional publicity for the draft management plan, particularly in respect of the special rate variation through the following mechanisms: A special edition of Maitland Matters has been devoted to the Daft

Management Plan, with a detailed overview and analysis of the proposed rate variation

Full (tabloid) page overviews of the Draft Management Plan and proposed rate variation are being placed in the Newcastle Herald, Maitland Mercury and also in the free newspapers delivered to city households.

FINANCIAL IMPLICATIONS The Draft Management Plan will enable Council to deliver the services required by the community and provides for specific mechanisms for raising of revenue to meet those services.


STATUTORY IMPLICATIONS The Draft Management Plan has been prepared to meet the statutory requirements of the Local Government Act 1993.

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Officers Reports

DRAFT MANAGEMENT PLAN 2006/07

Comparative Rating Information

Meeting Date: 2 May 2006

Attachment No : 1

Number of Pages : 2

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6 COMMITTEE OF THE WHOLE

6.1 CONSIDERATION OF TENDERS - MT VINCENT WASTE DEPOT BUND WALL EXTENSION

File No: 137/1067

Responsible Officer: Richard Minter Manager Projects and Emergency Services

Author: Warick Schroder Civil Contracts and Project Management Coordinator

EXECUTIVE SUMMARY Tenders were invited for the extension of the bund wall at the Mount Vincent Waste Depot. On closing seven (7) tenders had been received. This report recommends a preferred tenderer and is presented for Council's consideration. The report is submitted to Committee of the Whole as it contains confidential commercial information.

OFFICER'S RECOMMENDATION THAT Council move into Confidential Session to discuss this item under the terms of the Local Government Act 1993 Section 10A(2), as follows:

(d)(i) commercial information of a confidential nature that would, if disclosed: prejudice the commercial position of the person who supplied it

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7 CONSIDERATION OF ITEMS FROM COMMITTEE OF THE WHOLE

8 CLOSURE

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maitland city council extraordinary meeting agenda · 2017. 10. 27. · council adopt the asset...

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