Why

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2008-20092008-2009DRAFT BUDGET DRAFT BUDGET

OVERVIEWOVERVIEW

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BUDGET GOALSBUDGET GOALS

Reduce the Operating Deficit.Reduce the Operating Deficit. Asset Replace/Replenishment = Asset Replace/Replenishment =

to/ > Annual Depreciation to/ > Annual Depreciation expense.expense.

Control recurrent expenditure Control recurrent expenditure growthgrowth

Maintain Loans with in Borrowing Maintain Loans with in Borrowing Benchmark (20% of rates)Benchmark (20% of rates)

Ensure budget reflects Strategic Ensure budget reflects Strategic Plan and Ten Year Financial Plan Plan and Ten Year Financial Plan

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OUTCOMESOUTCOMES

Operating deficit increasedOperating deficit increased Asset renewal/Replacement > Annual Asset renewal/Replacement > Annual

Depreciation.Depreciation. Recurrent expenditure increase: Recurrent expenditure increase:

13.6%. 13.6%. Loans = 12.57% of rate revenueLoans = 12.57% of rate revenue 6% Rate Increase Proposed (CPI is 6% Rate Increase Proposed (CPI is

4.2%).4.2%). Budget & Community Plan.Budget & Community Plan.

Why

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ACHIEVEMENTS ACHIEVEMENTS 2007 - 20082007 - 2008

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Civic Building UpgradeCivic Building Upgrade Road Reconstruction ProgramRoad Reconstruction Program Bradford Street Bradford Street City Plaza DevelopmentCity Plaza Development Airport secure car parkAirport secure car park

CAPITAL PROJECTSCAPITAL PROJECTS

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CAPITAL PROJECTSCAPITAL PROJECTS

Whitehead StreetWhitehead Street Boat Ramp UpgradesBoat Ramp Upgrades Civic Park Arboretum Civic Park Arboretum Changeovers to Diesel FleetChangeovers to Diesel Fleet Foreshore Master Plan – Foreshore Master Plan –

Major infrastructure Major infrastructure commencedcommenced

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CAPITAL PROJECTSCAPITAL PROJECTS

Why

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STRATEGIC/STRATEGIC/GOVERNANCEGOVERNANCE

Community Plan Community Plan Remote Disaster Recovery FacilityRemote Disaster Recovery Facility Revised 10yr Long term Financial PlanRevised 10yr Long term Financial Plan 10 year Asset Management Plans10 year Asset Management Plans Extensive Policy ReviewExtensive Policy Review Staff Turnover 16%Staff Turnover 16% Trainee PositionsTrainee Positions

Why

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ENVIRONMENTENVIRONMENT

Mt Laura Conservation Reserve & Mt Laura Conservation Reserve & Environment UnitEnvironment Unit

Implementation of Waste StrategyImplementation of Waste Strategy Treated Effluent Pipe Network Treated Effluent Pipe Network

commissioned. commissioned. Sand Replenishment at foreshoreSand Replenishment at foreshore Asbestos RemovalAsbestos Removal

Why

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COMMUNITYCOMMUNITY

Commenced City Master PlanCommenced City Master PlanSport & Recreation needs Sport & Recreation needs AuditAuditNew Library concept plans New Library concept plans completedcompleted

Why

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COMMUNITYCOMMUNITY

New format for WCN newsNew format for WCN news

Why

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CROSS FUNCTIONAL CROSS FUNCTIONAL ACHIEVEMENTSACHIEVEMENTS

Risk Management AwardRisk Management Award Grants commission funding Grants commission funding

increased by $36,714increased by $36,714 27% OHSW Rebate27% OHSW Rebate $37,409 Risk Management $37,409 Risk Management

Rebate Rebate Productivity saving $209,341Productivity saving $209,341

Why

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GENERAL GENERAL OPERATIONSOPERATIONS

Boundary extension DPA Boundary extension DPA approvedapproved

District Centre Zone DPA District Centre Zone DPA approvedapproved

Coastal & General DPA on Coastal & General DPA on consultationconsultation

Why

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GENERAL GENERAL OPERATIONSOPERATIONS

Approved Building works Approved Building works $50 million, 25% increase.$50 million, 25% increase.

Whyalla Industrial Estate – Whyalla Industrial Estate – Stage 1, 90% of land sold Stage 1, 90% of land sold

Approved various land Approved various land parcels for residential parcels for residential developmentdevelopment

Why

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TOURISM & TOURISM & VISITATIONVISITATION

Secured Motor Home Secured Motor Home conventionconvention

Snapper Competition.Snapper Competition.

Why

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TOURISM & TOURISM & VISITATIONVISITATION

Why

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2008/20092008/2009

THE CHALLENGES THE CHALLENGES AHEADAHEAD

Why

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BUDGET CHALLENGESBUDGET CHALLENGES Financial SustainabilityFinancial Sustainability Ageing InfrastructureAgeing Infrastructure Levels of serviceLevels of service EB obligations 5% wage rise EB obligations 5% wage rise Cost shifting to Local governmentCost shifting to Local government Increased legal requirements Increased legal requirements Staff retention & attractionStaff retention & attraction

Why

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BUDGET INITIATIVESBUDGET INITIATIVES

Efficiencies created in service Efficiencies created in service delivery through continuous delivery through continuous improvementimprovement

Ongoing review of non-core Ongoing review of non-core services services

Reserve funds used for capital Reserve funds used for capital works as opposed to loan funds – works as opposed to loan funds – reducing net interest marginreducing net interest margin

Reviewed equity of Rating systemReviewed equity of Rating system Increased Asset Sale incomeIncreased Asset Sale income

Why

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EXPENDITURE EXPENDITURE SUMMARYSUMMARY

ExpenditureExpenditure 2008/092008/09

Operating Exp Operating Exp

(less depreciation)(less depreciation)$ 17,991$ 17,991

DepreciationDepreciation $ 4,128$ 4,128

Capital Capital ImprovementImprovement

$ 23,725$ 23,725

Loan Principle Loan Principle pmtspmts

$ 1,751$ 1,751

To ReservesTo Reserves $ 1,039$ 1,039

TOTALTOTAL $ 48,634$ 48,634

$000$000

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INCOME SUMMARYINCOME SUMMARY

INCOMEINCOME 2008/092008/09

Cash for Projects Cash for Projects brought fwdbrought fwd

$ 2,605$ 2,605

Other OperatingOther Operating $ 10,408$ 10,408

Capital Capital ImprovementImprovement

$ 18,254$ 18,254

Rates & Fixed Rates & Fixed ChargeCharge

$ 10,970$ 10,970

From ReservesFrom Reserves $ 6,476$ 6,476

TOTALTOTAL $ 48,713$ 48,713

$000$000

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KEY PERFORMANCE KEY PERFORMANCE INDICATORSINDICATORS

06/0706/0707/007/0

8808/008/0

99

Operating Operating Surplus RatioSurplus Ratio

+ +

0-15%0-15%(4)%(4)% (5)%(5)% (7)%(7)% 6.%6.% 8.%8.%

Net Financial Net Financial Liabilities (000)Liabilities (000)

(181)(181) 1,7671,767 4,1504,150 5,3565,356 4,1164,116

Net Financial Net Financial Liabilities RatioLiabilities Ratio

<0% &<0% &

> 100%> 100%(1.0)(1.0)%%

9.5%9.5% 19.8%19.8% 23.323.3%%

20.9%20.9%

Interest cover Interest cover RatioRatio

10%10% (1.2)(1.2)%%

1.1%1.1% 0.8%0.8% 1.3%1.3% 1.9%1.9%

Asset Asset Sustainability Sustainability RatioRatio

100%100% 103103 127127 9494 85%85% 108%108%

09/1009/10

10/1110/11TargetTarget

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OPERATING OPERATING STATEMENTSTATEMENT

Operating RevenueOperating Revenue 08/0908/09 07/0807/08 RatesRates 9,3479,347 8,523 8,523 Other RatesOther Rates 1,8181,818 1,524 1,524 Statutory ChargesStatutory Charges 438438 372 372 User ChargesUser Charges 3,0693,069 2,300 2,300 Operating Grants & SubsidiesOperating Grants & Subsidies 4,9754,975 5,015 5,015 Investment IncomeInvestment Income 210210 186 186 ReimbursementsReimbursements 131131 290 290 One Steel Ex-GratiaOne Steel Ex-Gratia 584584 ---- ---- OtherOther 792792 728 728 Total Operating RevenueTotal Operating Revenue 21,36421,364 18,93818,938

$000$000 $000$000

Why

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OPERATING REVENUE OPERATING REVENUE MIXMIX

Other6%

Waste Charge8%

OneSteel3%

Statutory Charges

2%

User Charges15%

Operating Grants & Subsidies

23%

General rates43%

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OPERATING OPERATING STATEMENTSTATEMENT

Operating ExpensesOperating Expenses 08/0908/09 07/0807/08 Employee CostsEmployee Costs 7,633 7,633 6,712 6,712 Contractual ServicesContractual Services 3,406 3,406 3,324 3,324 MaterialsMaterials 1,843 1,843 1,577 1,577 Finance/Interest ExpensesFinance/Interest Expenses 439 439 339 339 DepreciationDepreciation 4,128 4,128 3,605 3,605 Other ExpensesOther Expenses 4,671 4,671 3,867 3,867 Total Operating ExpensesTotal Operating Expenses 22,12022,120 19,42419,424

Operating Surplus/(Deficit) Operating Surplus/(Deficit) before Capital Revenuesbefore Capital Revenues (756) (756) (486) (486)

$000$000 $000$000

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OPERATING EXPENSE OPERATING EXPENSE MIXMIX

Employee Costs35%

Depreciation19%

Other21%

Interest Expense

2%

Materials8%

Contractual Services

15%

Why

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STRATEGIC PLAN STRATEGIC PLAN RELATIONSHIPRELATIONSHIP

Council’s expenditure has been Council’s expenditure has been assessed in terms of services assessed in terms of services and functions it providesand functions it provides

Service Profiles have been Service Profiles have been developed with budget detailsdeveloped with budget details

Service Profiles can be related Service Profiles can be related to Strategic Planning Goals to Strategic Planning Goals coming from the Community coming from the Community PlanPlan

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STRATEGIC PLANNINGSTRATEGIC PLANNING

Community PlanCommunity Plan– Council GovernanceCouncil Governance– Economic ProsperityEconomic Prosperity– Environmental CareEnvironmental Care– Community WellbeingCommunity Wellbeing

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COUNCIL COUNCIL GOVERNANCEGOVERNANCE

Personnel Management and Personnel Management and DevelopmentDevelopment– IRM implementation (Integrated IRM implementation (Integrated

Integrated Risk Management)Integrated Risk Management)– Ongoing staff trainingOngoing staff training– Governance projectsGovernance projects– Ongoing OHS, Balanced Scorecard Ongoing OHS, Balanced Scorecard

and Asset management programs and Asset management programs

Why

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COUNCIL COUNCIL GOVERNANCEGOVERNANCE

Information technologyInformation technology– PABX UpgradePABX Upgrade– Server ReplacementsServer Replacements– Various SoftwareVarious Software– Printers & ScannersPrinters & Scanners

Why

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ECOMOMIC ECOMOMIC PROSPERITYPROSPERITY

Roads and FootpathsRoads and Footpaths– Concrete footpath constructionConcrete footpath construction– Kerb replacement programKerb replacement program– Sealed roadsSealed roads– Roads to RecoveryRoads to Recovery– Asset Management programAsset Management program– Foreshore Master PlanForeshore Master Plan

Why

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ECONOMIC ECONOMIC PROSPERITYPROSPERITY

– New Library DevelopmentNew Library Development– Completion of Light Vehicles Completion of Light Vehicles

changeover to Dieselchangeover to Diesel– Finalise Civic Building UpgradeFinalise Civic Building Upgrade– Airport Terminal Building UpgradeAirport Terminal Building Upgrade– Airport Security CamerasAirport Security Cameras

Why

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ECONOMIC ECONOMIC PROSPERITYPROSPERITY

Economic Development Economic Development – WEDB Subsidy and co-operative action on WEDB Subsidy and co-operative action on

projectsprojects– Upper Spencer Gulf Common Purpose GroupUpper Spencer Gulf Common Purpose Group– Advancing WhyallaAdvancing Whyalla– Various Residential Property DevelopmentVarious Residential Property Development– Business IncubatorBusiness Incubator– Kingfish Harbour ConstructionKingfish Harbour Construction– Whyalla Industrial Park DevelopmentWhyalla Industrial Park Development

Why

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ENVIRONMENTAL ENVIRONMENTAL CARECARE

Environmental ManagementEnvironmental Management– Centralised IrrigationCentralised Irrigation– ASR FinalisationASR Finalisation– Asbestos Removal ProgramAsbestos Removal Program– Solar Rebate SchemeSolar Rebate Scheme– Renewable Energy ProjectsRenewable Energy Projects

Why

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ENVIRONMENTAL ENVIRONMENTAL CARECARE

Environmental ManagementEnvironmental Management– Landfill Transfer StationLandfill Transfer Station– Waste Cell ConstructionWaste Cell Construction– Pest plant controlPest plant control– WERIC WERIC – Clean up Australia dayClean up Australia day– Recycling promotionRecycling promotion

Why

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COMMUNITY COMMUNITY WELLBEINGWELLBEING

Visitation Promotion and Visitation Promotion and Development Development – Tourism advertising and marketing Tourism advertising and marketing – Maritime museum marketingMaritime museum marketing– Special eventsSpecial events– ConferencesConferences– Tourism signageTourism signage– Annual snapper competitionAnnual snapper competition

Why

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COMMUNITY COMMUNITY WELLBEINGWELLBEING

Parks and Recreation facilitiesParks and Recreation facilities– Various Solar LightingVarious Solar Lighting– Various Reserve Upgrades (Bradford, Various Reserve Upgrades (Bradford,

Loring, Norton, Barson)Loring, Norton, Barson)– Foreshore Playground Shade sailsForeshore Playground Shade sails

–

Why

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COMMUNITY COMMUNITY WELLBEINGWELLBEING

Community Services and Community Services and DevelopmentDevelopment– Donations and community grantsDonations and community grants– Community arts projectCommunity arts project– Youth weekYouth week– Whyalla Gift FoundationWhyalla Gift Foundation– Performing artsPerforming arts

– Active Community Field OfficerActive Community Field Officer

Why

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COMMUNITY COMMUNITY WELLBEINGWELLBEING

Community Services and Community Services and Development (cont)Development (cont)– Youth CouncilYouth Council– Donation to Reserve Cadet unitsDonation to Reserve Cadet units– Aged Care ContributionAged Care Contribution– Youth Development ContributionYouth Development Contribution

Why

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BUDGET BUDGET 2008/20092008/2009

Slight Cash budget surplusSlight Cash budget surplus Operating Deficit of $820KOperating Deficit of $820K 6% Rate increase in light of recent 6% Rate increase in light of recent

Financial Sustainability inquiry (CPI Financial Sustainability inquiry (CPI 4.2%) - halved rate increase above 4.2%) - halved rate increase above CPICPI

Maximise funding of capital works Maximise funding of capital works and strategic planning prioritiesand strategic planning priorities

Retention of all servicesRetention of all services

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FUTURE CHALLENGESFUTURE CHALLENGES

Managing the Infrastructure Funding GapManaging the Infrastructure Funding Gap Achieving an operating surplusAchieving an operating surplus Contain costs and review services in light Contain costs and review services in light

of financial sustainabilityof financial sustainability Completion of 10 year asset plan Completion of 10 year asset plan Adequate support for sustainable Adequate support for sustainable

development due to the exploration boom.development due to the exploration boom. Governance, Risk ManagementGovernance, Risk Management Staff succession planningStaff succession planning

Why

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RATING STRATEGYRATING STRATEGY

Regional Centre ZoneRegional Centre Zone Industrial LandIndustrial Land ShacksShacks

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RATES INCREASE 6% RATES INCREASE 6% WHAT IT WHAT IT REALLYREALLY

MEANSMEANS

An overall increase in rate revenueAn overall increase in rate revenue Individual Property LevelIndividual Property Level

– CategoryCategory– Land ValuationLand Valuation– Rebate & ConcessionsRebate & Concessions

Other ChargesOther Charges– NRM LevyNRM Levy– Refuse ChargeRefuse Charge– Fixed ChargeFixed Charge

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VALUATION HOT VALUATION HOT SPOTSSPOTS

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RATE HOT SPOTSRATE HOT SPOTS

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RATE HOT SPOTSRATE HOT SPOTS

TypeType Site Site Value Value 06/0706/07

Site Site Value Value 07/0807/08

RatesRates

06/0706/07Rates Rates

07/0807/08% % ChangeChange

BusinesBusinesss

3250032500

5400054000

1300013000

6500065000

7000070000

2600026000

23112311

36513651

10961096

24642464

26322632

11541154

6.61%6.61%

-27.9%-27.9%

5.22%5.22%

IndustrIndustryy

179000179000

2650026500

1600016000

360000360000

5300053000

3200032000

86828682

15291529

10371037

1237612376

20612061

13551355

42.55%42.55%

34.75%34.75%

30.7%30.7%

ResidenResidentt

6500065000

4850048500

1850018500

8400084000

118000118000

3200032000

10941094

889889

516516

987987

12741274

549549

-9.74%-9.74%

43.28%43.28%

6.42%6.42%

ShacksShacks 100000100000

9600096000

8000080000

140000140000

126000126000

100000100000

415415

409409

389389

598598

566566

507507

44.22%44.22%

38.26%38.26%

30.37%30.37%

Why

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RATE RELIEFRATE RELIEF

Mandatory RebatesMandatory Rebates Discretionary RebatesDiscretionary Rebates Rate CappingRate Capping Remission and PostponementRemission and Postponement Refuse Rate ConcessionsRefuse Rate Concessions Government ConcessionsGovernment Concessions