NAMBUCCA SHIRE COUNCIL

 

Special General Purpose Committee - 01 April 2010

 

 

AGENDA                                                                                                   Page

 

1        APOLOGIES

2        DISCLOSURE OF INTEREST

3        General Manager Report

8.1     Draft Infrastructure Management Plan 2010-2011 to 2014-2015

8.2     Draft Budget for 2010-2011    


NAMBUCCA SHIRE COUNCIL

 

 

DISCLOSURE OF INTEREST AT MEETINGS

 

 

Name of Meeting:

 

Meeting Date:

 

Item/Report Number:

 

Item/Report Title:

 

 

 

I

 

declare the following interest:

          (name)

 

 

 

 

Pecuniary – must leave chamber, take no part in discussion and voting.

 

 

 

Non Pecuniary – Significant Conflict – Recommended that Councillor/Member leaves chamber, takes no part in discussion or voting.

 

 

Non-Pecuniary – Less Significant Conflict – Councillor/Member may choose to remain in Chamber and participate in discussion and voting.

 

For the reason that

 

 

 

 

 

 

Signed

 

Date

 

 

 

 

 

Council’s Email Address – council@nambucca.nsw.gov.au

 

Council’s Facsimile Number – (02) 6568 2201

 

(Instructions and definitions are provided on the next page).

 


Definitions

 

(Local Government Act and Code of Conduct)

 

 

Pecuniary – An interest that a person has in a matter because of a reasonable likelihood or expectation of appreciable financial gain or loss to the person or another person with whom the person is associated.

(Local Government Act, 1993 section 442 and 443)

 

A Councillor or other member of a Council Committee who is present at a meeting and has a pecuniary interest in any matter which is being considered must disclose the nature of that interest to the meeting as soon as practicable.

 

The Council or other member must not take part in the consideration or discussion on the matter and must not vote on any question relating to that matter. (Section 451).

 

 

Non-pecuniary – A private or personal interest the council official has that does not amount to a pecuniary interest as defined in the Act (for example; a friendship, membership of an association, society or trade union or involvement or interest in an activity and may include an interest of a financial nature).

 

If you have declared a non-pecuniary conflict of interest you have a broad range of options for managing the conflict.  The option you choose will depend on an assessment of the circumstances of the matter, the nature of your interest and the significance of the issue being dealt with.  You must deal with a non-pecuniary conflict of interest in at least one of these ways.

 

·        It may be appropriate that no action is taken where the potential for conflict is minimal.  However, council officials should consider providing an explanation of why they consider a conflict does not exist.

·        Limit involvement if practical (for example, participate in discussion but not in decision making or visa-versa).  Care needs to be taken when exercising this option.

·        Remove the source of the conflict (for example, relinquishing or divesting the personal interest that creates the conflict or reallocating the conflicting duties to another officer).

·        Have no involvement by absenting yourself from and not taking part in any debate or voting on the issue as if the provisions in section 451(2) of the Act apply (particularly if you have a significant non-pecuniary conflict of interest).

 

         


Special General Purpose Committee

1 April 2010

General Manager's Report

ITEM 8.1      SF1446            010410         Draft Infrastructure Management Plan 2010-2011 to 2014-2015

 

AUTHOR/ENQUIRIES:     Michael Coulter, General Manager; Craig Doolan, Manager Financial Services         

 

Summary:

 

On the available evidence Council is unable to maintain its existing assets in a satisfactory condition.  It has an asset renewal ratio of 0.60.  This means that for the previous financial year Council expended about 60 cents on asset renewals for every $1.00 of estimated reduction in asset condition in the same period.  In essence, the ratio is explaining that, in financial terms, Council’s overall infrastructure has deteriorated during the year and over the past three years.

 

In order for Council to “turn around” its deteriorating assets it will either have to reduce its assets and/or the service levels of those assets or identify new funding sources to maintain them.  This is already happening by default with the Council closing the Argents Hill hall due to its unsatisfactory and unsafe condition and being unable to fund the replacement of the Deep Creek bridge except via a special rate variation.

 

The Infrastructure Management Plan 2010/2011 and Forward Financial Plan 2010/2011 are circularised.

 

 

Recommendation:

 

That Council place the Draft Infrastructure Management Plan 2010-2011 to 2014-2015 on public exhibition for a minimum of 28 days.

 

 

OPTIONS:

 

Council has a broad discretion in relation to the expenditure of its funds.  The Local Government Act 1993 provides that the role of a Councillor includes participating in decisions concerning the optimum allocation of the council’s resources for the benefit of the area.  In reality some of the expenditure is determined by statutory obligations outside Council’s control but there remains considerable discretion as to how Council’s funds are expended.

 

DISCUSSION:

 

The most important part of the budget process is the infrastructure management plan which lists proposed capital works over the ensuing 5 years together with their proposed funding.  It provides a context for the annual budget by indicating likely asset management requirements for the medium term and nominating a source of funds.  The new integrated planning and reporting requirements which Council must implement by 30 June 2012 will extend this medium term, 5 year plan to a minimum 10 year period.

 

On the available evidence Council is unable to maintain its existing assets in a satisfactory condition.  It has an asset renewal ratio of 0.60.  This means that for the previous financial year Council expended about 60 cents on asset renewals for every $1.00 of estimated reduction in asset condition in the same period.  In essence, the ratio is explaining that, in financial terms, Council’s overall infrastructure has deteriorated during the year and over the past three years.  It needs to understood that this ratio is an estimate based on current information and without a thorough asset management program.

 

In assessing the replacement rate of depreciating assets it is also important to note that Special Schedule No 7, which is an unaudited statement prepared in conjunction with the financial report, discloses that the estimated cost to bring roads and bridges to a “satisfactory standard” is $13.1m (as at 30 June 2009).

 

Special Schedule No 7 provides five asset condition ratings of near perfect (1), superficial deterioration (2), deterioration evident (3), requires major reconstruction (4) and asset unserviceable (5).  In general terms most of Council’s buildings have a condition (3) rating and the estimated cost to bring them up to a satisfactory condition is $6.18m.  Council’s public roads generally have condition ratings of between 92) and (4) with the estimated cost of bringing them up to a satisfactory standard being $13.11m.  Drainage is generally rated at condition 93) with the estimated cost of bringing it up to a satisfactory standard being $1.66m.  In the general fund, timber bridges represent the single greatest liability with the estimated cost of bringing them up to a satisfactory standard being $4.39m.

 

There are also substantial costs in bringing Council’s water and sewerage assets up to a satisfactory condition with the estimate for water being $13.56m and for sewerage $16.39m.

 

Of course this Council is not alone in its plight.  The Allen report estimated that for NSW as a whole the overall under spending on infrastructure renewal has been in the order of $500m per annum and that it would cost over $6.3 billion to restore those assets to a satisfactory condition.

 

In order for Council to “turn around” its deteriorating assets it will either have to reduce its assets and/or the service levels of those assets or identify new funding sources to maintain them.  This is already happening by default with the Council closing the Argents Hill hall due to its unsatisfactory and unsafe condition and being unable to fund the replacement of the Deep Creek bridge except via a special rate variation.

 

to achieve the sort of economies required to make a meaningful difference to asset management.

 

A commentary on the components of the Infrastructure Management Plan follows.

 

Administration

 

The major components relate to Council’s computer systems, printers and photocopiers.  Council is currently installing the new “Authority” software which will manage all of Council’s rating, financial and property based information.  There is an on-going financial commitment to this software.  The plan includes a program for the timely replacement of servers, PCs, printers and photocopiers.

 

There is a provision of $70,000 in 2010/2011 for a fibre optic cable to the Macksville library with a back up server for disaster recovery/business continuity.  Currently back up is undertaken via microwave to the Works Depot where financial data is backed up both to a server and tape with all other applications (eg Trim document management, engineering design) only being backed up on tape.  The back up is currently run only once a day so at any time the Council could lose one day’s computer data ie financial transactions, correspondence, email, design, GIS, property etc.  The major advantage of the proposed disaster recovery site at the library is that the server would mirror all data stored in the administration building so there would be complete server backup in real time for all software applications.

 

Public Order & Safety

 

This section of the Infrastructure Management Plan concerns the provision of capital funding to the SES and RFS.  The net cost to Council is $461,400.  This expenditure is largely outside Council’s control as it is obliged to make a contribution of 11.7% to the total cost.

 

The net cost to Council arising out of RFS activities has increased at a faster rate than rate pegging.  In 2009/2010 it is estimated that it will be 7% more than the previous year and the forecast increase in 2010/2011 is estimated to be 21% more than the current year.

 

Housing and Community Amenities

 

This cost centre includes the operations of Council’s waste management centre and cemeteries.  Following on-going monitoring of the old landfill, Council’s Director Engineering Services is confident that the DECCW will not require a leachate cut off wall which will avoid an expenditure of $687,800 and free up an existing cash reserve which can now be applied to the construction of new waste cells.  This is a noteworthy achievement by the Director and the Waste Management Officer.

 


Council Buildings/Facilities

 

Council has 12 public halls, 4 community centres, 2 libraries, 1 entertainment centre, 1 theatre, 3 museums, 1 administration centre, 1 works depot, 1 sales yard and 29 public conveniences listed in asset registers.  Other buildings/structures (in reserves etc) have not been identified at this stage.

 

Whilst the documentation of the condition of these buildings is improving, it will take another 12 months to have schedules which identify all required capital works and asset replacement.

 

The major provision for 2010/11 is for the next stage of the Works Depot upgrade which involves the replacement of the amenities and lunchroom at a cost of $248,500.  Approximately 1/3 of this amount can be funded through the water and sewerage funds.  Council will be aware that the existing amenities and lunchroom are old and rundown.  The lunchroom is non compliant with a range of BCA regulations for a food service area; there is insufficient seating capacity; there are inadequate shower and hand washing facilities and no disabled facility; and contrary to the Anti-Discrimination Act no amenities for females even though females do work at the site from time to time.  Council must consider applications for employment for females in its outdoor workforce and cannot properly do so without proper amenities.  The existing toilets are in a poor condition and the staffing ratio requires an additional pan and larger 3 stall urinal.

 

A proposed provision of $75,000 for upgrading the effluent disposal facilities at the sales yard was deferred as part of the budget review process due to lack of funding.

 

Of note is a provision for 2011/12 for the replacement of 3 amenities buildings being public conveniences at Bellwood Park, Boultons Crossing and the Macksville Coach stop at a total cost of $600,000.  The Asset Manager will be bringing forward a report on the condition of all amenities because based on the normal expenditure for road and bridge renewals in next year’s budget, without substantial grant income it will be impossible to fund the replacement of three amenities buildings and difficult to fund even one per year.

 

Beside the upgrade of effluent disposal facilities at the sales yard, there is also an ongoing capital works program for the grandstand replacement and upgrading of the pens over the next five years.  The sales yards are not generating sufficient income to support this level of capital investment and again it will be difficult to fund this work from the general fund.

 

Sporting Grounds, Parks and Gardens

 

There is a modest program planned for 2010/11 consisting of improvements to Buz Brazel Park, picnic tables and shelters at Deep Creek.  A toilet block is proposed for Anderson Park at a cost of $90,000 of which $38,500 coming from a reserve from the sale of land.

 

Rural Road Bitumen Resealing

 

The special variations which allowed Council to borrow $5m for urgent infrastructure renewal meant that about $600,000 per year has been spent in recent years on rural road resealing.  Now that the program of variations has ended the provision has been reduced to $400,000 for 2010/11.

 

The infrastructure management plan makes provision for the resealing of 7.1 km in 2010/11 which is around 3.5% of the rural bitumen road network of 203 km.  On a 10 year resealing cycle about 20.3 km of rural roads should be resealed every year.  Therefore the expenditure is only about 35% of an ideal allocation.

 

Urban Street Rehabilitation/Reseal

 

Whilst considerable progress has been made in urban street rehabilitation, the 5 year forward plan does not include a number of streets which will require expensive rehabilitation within the 5 years.  This includes Florence Wilmont Drive and Alexander Way.

 

The proposed program for 2010/11 is $842,000 compared with $714,400 in 2009/2010.   A proposed provision of $180,000 for stage 3 of Main Street, Eungai is proposed to be staged due to lack of funding.  It is proposed that $40,000 be spent in 2010/11 with the remaining funding to occur in future years.

 

Rural Road Rehabilitation

 

As indicated in the plan, the proposed expenditure in 2010/11 of $639,000 is insufficient to maintain the roads in their existing condition, let alone catch up on any backlog.  Whilst improved asset management will refine the required expenditure on this program, in general terms Council should be spending at least $1m per year based on a 203 km network of bitumen rural roads.

 

Bridge Replacement Program

 

The bridge replacement program for 2010/11 provides for the replacement of Deep Creek bridge as well as Gorelys, P Morans and Top bridges all located on Missabotti Road.  The replacement of Deep Creek bridge with a single lane structure is entirely dependent on Council’s application for a special variation of 1% above the 2.6% rate pegging limit.  The other 3 bridges on Missabotti Road have a combined value of $250,000.  Going forward Council will have difficulty maintaining the proposed bridge replacement program which averages $684,000 per year for the next 5 years.

 

The pedestrian footbridge over Deep Creek at Valla Beach will be in need of replacement during the 5 year program.  It was constructed by the Valla Beach resort with responsibility for maintenance passing to Council.  Its estimated replacement cost is $400,000 and at this stage has not been included in the bridge replacement program.

 

Footpath Extension/Replacement Program and Landslip Restoration

 

The plan provides for $102,000 for footpath replacement in 2010/11.  It also provides for the continuation of the cycleway construction between Bellwood and the Kingsworth Estate which is largely funded by grant income.

 

The plan identifies $2.52m of work required to repair and stabilise land slips in Nambucca Heads, and particularly along Riverside Drive.  It is proposed to undertake $350,000 of work in 2010/2011 rectifying unstable sections of Riverside Drive via a loan funded from the proposed 1% special variation.  However if the variation is not approved this work will not be undertaken.

 

Stormwater

 

Partly as a consequence of the 5 floods in 2009, there have been numerous, major failures of Council’s urban stormwater system.  The Director Engineering Services has prepared a separate report to respond to the most urgent of these as part of the 2009/2010 budget.  However other works have been deferred which will need to be addressed in subsequent years.  Further assessment as part of Council’s asset management program will be required to assess priorities and future expenditure requirements.

 

Other

 

The “other” category concerns kerb and gutter, carparks and bus stops, causeways and streetlighting.

 

Council’s asset register identifies approximately 166km of kerb and gutter.  The location of individual sections has not been recorded and there is currently no inspection regime in place to assess condition.  However this is underway with the fair value having to be determined by 30 June 2010.

 

With increasing electricity costs, street lighting is a cost centre which will require on-going review.  A provision to reduce “black spots” has been reduced by $10,000.

 

Water

 

As Council is aware the infrastructure management plan for water is dominated by the proposed off river water storage project.  A further $2.5m has been allocated in 2010/11 to finalise the detailed design.

 


Sewerage

 

The construction of the Nambucca Heads Sewerage Augmentation will continue through 2010/11 and will be the biggest item in the 5 year plan.  A further $13m has been allocated to see the contract through to completion.

 

Another significant item is the construction of sewerage pump stations to service the South Macksville urban release area.  The plan provides for an allocation of $500,000 in 2010/11 with a further $500,000 in 2011/12.

 

CONSULTATION:

 

There have been 3 workshops undertaken by Council’s senior management (MANEX) to review the budget papers.

 

SUSTAINABILITY ASSESSMENT:

 

Environment

 

Council’s expenditure priorities do have implications for the environment.

 

Social

 

Council’s expenditure priorities do have social implications.

 

Economic

 

Council’s expenditure priorities do have economic implications.

 

Risk

 

Council has insufficient funding to address all of the significant risks arising directly or indirectly out of the draft Infrastructure Management Plan.  Accidents which may be partly or wholly attributable to poor road surfaces, bridge failures, land slips, drainage failures, uneven footpaths, or poorly maintained buildings are just some of the “high profile” risks which cause staff to have sleepless nights.

 

FINANCIAL IMPLICATIONS:

 

Direct and indirect impact on current and future budgets

 

The report concerns Council’s budget.

 

Source of fund and any variance to working funds

 

The budget has obvious implications for working funds.

 

Attachments:

1View

 - Circularised - Infrastructure Management Plan 2010/2011 and Forward Financial Plan 2010/2011

 

  


Special General Purpose Committee - 1 April 2010

Draft Infrastructure Management Plan 2010-2011 to 2014-2015

 

 

 

 

 

CIRCULARISED DOCUMENT

 

 

Draft Infrastructure Management Plan 2010-2011 to 2014-2015

 

 

 

 - Infrastructure Management Plan 2010/2011 and Forward Financial Plan 2010/2011

 

 


Special General Purpose Committee

1 April 2010

General Manager's Report

ITEM 8.2      SF1446            010410         Draft Budget for 2010-2011

 

AUTHOR/ENQUIRIES:     Michael Coulter, General Manager         

 

Summary:

 

The draft budget for 2010/11 has been completed for Council’s consideration.

 

 

Recommendation:

 

1.       Council note the changes to the Draft Budget for 2010/2011 made by MANEX.

 

2.       Council place all draft Management Plan documents as amended on public exhibition for at           least 28 days and that a public meeting to explain the documents and answer questions be           held at the Council Chambers during the first week of the public exhibition.

 

 

OPTIONS:

 

Council has a broad discretion in relation to the expenditure of its funds.  The Local Government Act 1993 provides that the role of a Councillor includes participating in decisions concerning the optimum allocation of the council’s resources for the benefit of the area.  In reality some of the expenditure is determined by statutory obligations outside Council’s control but there remains considerable discretion as to how Council’s funds are expended.

 

 

DISCUSSION:

 

Because of changes to deadlines set by the Division of Local Government for Councils seeking special rate variations, the budget process this year has been brought forward by approximately 5 weeks.

 

The original budget document resulted in a deficit of $3,458,300 for the General Fund.  In a series of 3 budget workshops MANEX reduced this deficit to the current figure of $3,700.  The water and sewerage budgets have been reviewed and have deficits of $15,000 and $54,100 respectively.

 

A copy of the draft budget for 2010/2011 together with a spreadsheet of variations made to the original “bid” document by MANEX is circularised.

 

The Minister for Local Government has determined that 2.6% will be the allowable increase in rates for 2010/2011.  Council has submitted an application for a special variation to exceed this rate pegging limit by 1%.

 

The decision by the Minister to peg the allowable increase in rates to 2.6% is disappointing, particularly when there is no evidence that State government owned utilities or Departments such as the Rural Fire Service limit their increases in fees/charges/contributions to this percentage or less.

 

There is little justification for the rate pegging determination in either the circular from the Division or the related media release from the Minister.  The justification provided by the Minister was that, “the annual rate peg is calculated by examining a range of economic factors, predominantly inflation.  Inflation has been down and the rate peg reflects this”, she said.  As most people know there are a variety of price indexes, and the consumer price index may not be a good fit for the impact of inflation on Councils.  However there is no detail as to how the rate peg limit was derived, whether it was based on a particular index and whether it was adjusted for typical cost drivers in local government.

 

On 18 December 2009, the Division of Local Government advised that any Council seeking a special variation for the following financial year would need to submit their completed application, including the results of their draft management plan consultations and resolution to adopt the plan, by Friday 26 March 2010.  This necessitated Council having to decide on the proposed 1% special variation before the Minister announced the 2.6% rate pegging limit on 16 February 2010.  It is impossible to prepare a management plan and undertake community consultation in a 6 week period.

 

The draft budget includes loan funding from this anticipated special variation, the proceeds of which would be allocated to the replacement of the flood damaged Deep Creek bridge and undertaking repairs to Riverside Drive in response to geotechnical assessments which have identified sections of instability and the potential for land slip.  If the special variation is refused then these identified works would be removed from the budget.

 

As a consequence of the determination that further work is not required on a leachate wall for the old landfill it has been possible to leave waste service charges for 2010/11 unchanged at $438.  This has been achieved even after making a provision for additional processing costs for biomass material as a consequence of the Government’s new standard for its land application.  The tip availability and vacant land charges are proposed to be standardised at $110.

 

 

CONSULTATION:

 

There has been consultation with MANEX.

 

 

SUSTAINABILITY ASSESSMENT:

 

Environment

 

Council’s budget has environmental implications.

 

Social

 

Council’s budget has social implications.

 

Economic

 

Council’s budget has economic implications.

 

Risk

 

There are risk implications which are discussed in the report on the draft Infrastructure Management Plan.

 

 

FINANCIAL IMPLICATIONS:

 

Direct and indirect impact on current and future budgets

 

The report concerns Council’s budget for the 2010/2011.

 

Source of fund and any variance to working funds

 

The proposed budget for 2010/2011 deals with variances to working funds.

 

Attachments:

1View

 - Circularised - Draft Budget for 2010 /2011 and Revenue Policy (Fees and Charges) 2010/2011

 

  


Special General Purpose Committee - 1 April 2010

Draft Budget for 2010-2011

 

 

 

 

 

CIRCULARISED DOCUMENT

 

Draft Budget for 2010-2011

 

 

 

 - Draft Budget for 2010 /2011 and Revenue Policy (Fees and Charges) 2010/2011